Document:

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                                                                   Exhibit 10.11

 [LOGO] ASHURST MORRIS CRISP

 AGREEMENT

 AMI Semiconductor Belgium BVBA

 And

 AMI Semiconductor Inc.

 And

 STMicroelectronics NV

 for the acquisition of the business of the Mixed Signal
 Division of Alcatel Microelectronics

    8th May 2002

                                      -1-
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                                    CONTENTS

CLAUSE ................................................................   PAGE

1.   INTERPRETATION ...................................................   1
2.   SALE AND PURCHASE ................................................   10
3.   CONDITIONS .......................................................   10
4.   PERIOD TO COMPLETION .............................................   12
5.   CONSIDERATION ....................................................   15
6.   COMPLETION .......................................................   15
7.   PROPERTIES .......................................................   17
8.   ACTION AFTER COMPLETION ..........................................   17
9.   LIABILITIES OF THE SELLER AND BUYER ..............................   18
10.  RECEIVABLES AND PAYABLES .........................................   19
11.  CONTRACTS ........................................................   19
12.  EMPLOYEES ........................................................   20
13.  TAX ..............................................................   21
14.  WARRANTIES AND INDEMNITY .........................................   21
15.  NON-COMPETE COVENANT AND PROTECTION OF GOODWILL ..................   22
16.  CONFIDENTIAL INFORMATION .........................................   22
17.  ANNOUNCEMENTS ....................................................   23
18.  ASSIGNMENT .......................................................   23
19.  COSTS ............................................................   24
20.  EFFECT OF COMPLETION .............................................   24
21.  ENTIRE AGREEMENT .................................................   24
22.  WAIVER ...........................................................   25
23.  INVALIDITY .......................................................   25
24.  NOTICES ..........................................................   25
25.  ORIGINALS ........................................................   26
26.  GOVERNING LAW AND JURISDICTION ...................................   26
27.  SELLER'S GUARANTEE ...............................................   27
28.  BUYER'S GUARANTEE ................................................   27
29.  FOREIGN EQUIVALENCY ..............................................   28
SCHEDULE 1 ............................................................   29
Assumed Employees .....................................................   29
SCHEDULE 2 ............................................................   30
Warranties ............................................................   30
SCHEDULE 3 ............................................................   39
Limitations on Liability ..............................................   39
SCHEDULE 4 ............................................................   43
Properties ............................................................   43
SCHEDULE 5 ............................................................   44
Pensions ..............................................................   44
SCHEDULE 6 ............................................................   45
Agreed Terms Documents ................................................   45
SCHEDULE 7 ............................................................   46
The Sellers' Guarantor's Guarantee ....................................   46
SCHEDULE 8 ............................................................   48
The Buyers Guarantee ..................................................   48
SCHEDULE 9 ............................................................   50
Environmental Indemnity ...............................................   50
SCHEDULE 10 ...........................................................   52
Best Knowledge of the Seller ..........................................   52
SCHEDULE 11 ...........................................................   53
Management Accounts and Financial Statements of the Company and the
  Acquired Subsidiary .................................................   53
SCHEDULE 12 ...........................................................   54
Allocation Rules ......................................................   54
SCHEDULE 13 ...........................................................   55
Fixed Asset Budget 2002 ...............................................   55

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(Clause 4.1(b))...............................................................55
SCHEDULE 14...................................................................56
Bonuses to Assumed Employees..................................................56
(Clause 4.1(b))...............................................................56
SCHEDULE 15...................................................................57
Patent Licence Agreement and Technology Transfer and Licence Agreement and
  Assignment of Certain Patents from the Seller's Guarantor to the Buyer......57
SCHEDULE 16...................................................................58
Guarantees in Respect of Assumed Liabilities..................................58
SCHEDULE 17...................................................................59
Supply Agreement between the Buyer and the Seller's Guarantor.................59
SCHEDULE 18...................................................................60
Provisions of Global Supply Agreement and copy of the Volume Purchase
     Agreement................................................................60
SCHEDULE 19...................................................................61
Deed of Adherence.............................................................61
SCHEDULE 20...................................................................62
Agreed upon Closing Policies and Procedures...................................62
SCHEDULE 21...................................................................63
Excluded Warranty Obligations.................................................63
SCHEDULE 22...................................................................64
Transitional Services Agreement Term Sheet....................................64

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THIS AGREEMENT is made on 8th May 2002

BETWEEN:

(1)  AMI SEMICONDUCTOR BELGIUM BVBA a company incorporated under the laws of
     Belgium (the "Buyer"); and

(2)  AMI SEMICONDUCTOR Inc. a Delaware corporation (the "Buyer's Guarantor");
     and

(3)  STMICROELECTRONICS NV, a company incorporated under the laws of the
     Netherlands, (the "Seller's Guarantor").

THE PARTIES AGREE AS FOLLOWS:

1.   INTERPRETATION

1.1  The following words and expressions shall, unless the context otherwise
     requires, have the following meanings:

     "ACCOUNTS DATE" means 31 December 2001;

     "ACCOUNTING POLICIES" means those accounting policies described in the
     Financial Statements and consistently applied by the Company;

     "ACQUIRED SUBSIDIARY" means Mietec France, a French "Societe par actions
     simplifiee (SAS)", with a share capital of EUR 40,000 registered with the
     companies registry of Nanterre under n(degree) 399 395 581 RCS Nanterre,
     having its registered office at 17/19 rue Jeanne Braconnier -- 92 360
     Meudon la Foret;

     "ACTIVITIES" means any activity, operation or process carried out by the
     Seller at any Property;

     "AGREED UPON CLOSING POLICIES AND PROCEDURES" shall mean those accounting
     principles, rules and methods described in Schedule 20 to this Agreement;

     "ALCATEL" means Alcatel, a French societe anonyme, with a share capital of
     E2,481,539,594 registered with the Companies Registry of Paris under number
     542 019 096, having its registered office at 54 rue de la Boetie, 75008
     Paris, France;

     "ALCATEL AGREEMENT" or "SPA" means the agreement dated 15 April 2002
     between Alcatel, Alcatel Bell N.V. and the Seller's Guarantor under which
     the Seller's Guarantor is to acquire the Company;

     "ALCATEL GROUP" means Alcatel and each of its Related Persons including,
     for the avoidance of doubt, Alcatel Bell NV;

     "ALCATEL TRANSACTION DOCUMENTS" means the Alcatel Agreement and each of the
     agreements to be entered into by any of the Seller, the Seller's Guarantor,
     Alcatel and Alcatel Bell N.V. pursuant to or in connection with the Alcatel
     Agreement, including agreements contained in the schedules to the Alcatel
     Agreement;

     "ALCATEL TRANSITIONAL SERVICES AGREEMENT" means the agreement, in the
     agreed terms, between Alcatel and the Buyer in respect of transitional
     services to be provided by the Alcatel Group directly to the Buyer;

     "ALLOCATION RULES" has the meaning given to that term in schedule 12;

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"ASSETS" means all of the non cash tangible and intangible assets used by the
Company and the Acquired Subsidiary in the carrying out of MSB, other than the
Excluded Assets;

"ASSUMED EMPLOYEES" means those employees of MSB as identified in Schedule 1,
together with those persons agreed upon between the Buyer's Guarantor and the
Seller's Guarantor, employed by MSB between the date hereof and Completion with
the consent of the Buyer less those persons identified in Schedule 1 who resign
between the date hereof and Completion;

"ASSUMED LIABILITIES" means all liabilities (whether known or unknown, whether
done or omitted to be done) associated with the ongoing operation of MSB (but
generally not obligations arising outside the Ordinary Course of Business
unless otherwise specified in the Agreement) prior to the Completion Date,
including:

(a)  the obligations of the Seller under the Contracts (but excluding the
     Excluded Contract Liabilities);

(b)  the Payables and Current Liabilities;

(c)  the employment and compensation obligations of the Seller in respect of
     the Assumed Employees pursuant to clause 12;

(d)  active warranty obligations other than the Excluded Warranty Obligations
     (provided, and to the extent that an appropriate reserve, as per current
     Accounting Policies, is reflected in the Financial Statements; and

(e)  the obligations of the Seller in respect of the Properties and Leases
     pursuant to clause 4;

"BELGIAN PROPERTY" means the property located at 9700 Oudenarde, Westerring
15, Belgium;

"BENEFIT PLAN" means any plan, pension plan, arrangement or scheme maintained,
sponsored or participated in by the Company and the Acquired Subsidiary,
relating to the Assumed Employees (including but not limited to retirement,
disability, life insurance, death benefit schemes and arrangements);

"BEST EFFORTS" means the efforts that a prudent person desirous of achieving a
result would use in similar circumstances to ensure that such result is
achieved as expeditiously as possible;

"BEST KNOWLEDGE OF THE SELLER" shall mean that the Seller shall be deemed to
have knowledge of such particular fact or other matter if any of those persons
listed in Schedule 10 (being members of the management of Seller and/or
the Acquired Subsidiary, and/or the Seller's Guarantor and/or Alcatel), is
actually aware of such fact or other matter, or if in the Ordinary Course of
Business they would be reasonably expected to know;

"BOOKS AND RECORDS" means all books and records and including tool registers,
books of account, financial and tax records, and all other records relating to
MSB as at Completion;

"BREACH" means breach of, or failure to perform or comply with, a
representation, warranty, covenant, obligation, or other provision of this
Agreement or any instrument or agreement delivered or executed pursuant to this
Agreement;

"BUSINESS DAY" means any day other than a Saturday, Sunday or legal holiday in
France and in Belgium;

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"BUSINESS INFORMATION" means all information, know-how and documentation (and
on whatsoever medium they are stored) relating to MSB and the Assets as at
Completion including all correspondence, promotional material, lists of
customers and suppliers, technical or computer hardware or software manuals;

"BUSINESS INTELLECTUAL PROPERTY" means Intellectual Property owned by or
licensed, by the Alcatel Group, (with the right to sub-license), to the Seller
or a member of the Seller's Group and used in MSB, together with the goodwill
relating thereto comprising the registered and unregistered Intellectual
Property set out in the Patent Assignment and Patent License Agreement and the
rights provided to certain Intellectual Property of Seller's Guarantor pursuant
to the terms of the Technology Transfer and License Agreement in the agreed form
attached hereto in Schedule 15;

"BUYER'S DESIGNEE(S)": means Buyer's Guarantor or any company which is a
Subsidiary of the Buyer's Guarantor, to be designated, as the case may be, by
Buyer to purchase all or part of the Assets in accordance with this Agreement,
notified to Seller not less than five days prior to Completion Date, provided
however that Buyer and Buyer's Guarantor shall each remain severally and
jointly liable for any and each of Buyer Designee(s) obligation under this
Agreement.

"BUYER'S GROUP" means the Buyer, the Financial Investors, the Buyer's Guarantor
and any subsidiary undertakings and the associated companies from time to time
of Buyer or the Buyer's Guarantor, all of them and each of them as the context
admits;

"BUYER'S SOLICITORS" means both or each of Ashurst Morris Crisp and Dechert;

"COMPANY" or "SELLER" means Alcatel Microelectronics NV, a company incorporated
in Belgium, whose registered office is at Westerring 15, B-9700 Oudenaarde,
Belgium;

"COMPLETION DATE" means the date upon which Completion takes place pursuant to
clause 6 or, as the context may require, is scheduled to take place;

"CONDITIONS" means the conditions set out in clause 3.1;

"CONSENTS" means any approval, consent, ratification, waiver or other
authorisation, including any Governmental Authorisation;

"CONTEMPLATED TRANSACTIONS" means all of the transactions contemplated by this
Agreement including the Transaction Documents.

"CONTINGENT LIABILITIES" means a contingent loss or liability representing an
existing condition, situation or set of circumstances involving uncertainty as
to possible loss or liability that will ultimately be resolved when one or more
future events occur or fail to occur. Resolution of uncertainty may confirm
the loss or impairment of an asset or the incurrence of a liability;

"CONTRACTS" means any agreement, contract or obligation in written form that is
legally binding and relating to MSB;

"CONTROL" shall have the meaning set forth in Article L. 233-3 of the French
Commercial Code;

"CURRENT ASSETS" means the Stocks and Receivables and all Other Current Assets
(determined in accordance with the Allocation Rules);

"CURRENT LIABILITIES" means the Payables and Other Current Liabilities plus all
the reserves in respect of active obligations of MSB determined in accordance
with the Allocation Rules;

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"DEED OF ADHERENCE" means a deed to be executed by the Company, the Seller's
Guarantor, the Buyer's Guarantor and the Buyer in the form as is set out in
schedule 19;

"ENCUMBRANCE" means any charge, claim, lien, mortgage, option, pledge, other
security interest or other equivalent or similar third party right;

"ENVIRONMENTAL INDEMNITY" means the indemnity in the agreed terms to be given
by Alcatel to the Buyer in the terms of Schedule 9;

"EXCLUDED ASSETS" means any assets or rights and the benefit of any claims as
at Completion in the following:

(a)  cash in hand and at bank of MSB (other than petty cash at locations at
     which the MSB is conducted and which is related to MSB); and

(b)  assets disposed of by the Seller in the Ordinary Course of Business as
     permitted by this agreement between the date hereof and the Completion
     Date;

"EXCLUDED LIABILITIES" means:

(a)  any and all obligations, liabilities, costs, claims, losses, demands and
     expenses (arising in any way or manner whatsoever) owed to Alcatel (or any
     of its Related Persons) or the Seller (or any of its Related Persons) for
     anything done or omitted to be done before the Completion Date; and

(b)  any and all obligations, liabilities, costs, claims, losses, demands and
     expenses exceeding, in aggregate, Euro 2,000,000 (arising in any way or
     manner whatsoever in respect of the claims relating to:

     (i)   in respect of Hella;

     (ii)  in respect of Square D; and

     (iii) in respect of Schneider,

     in each case as disclosed in Schedule 21
     (collectively the "EXCLUDED WARRANTY OBLIGATIONS")

"EXCLUDED CONTRACT LIABILITIES" means all liabilities of the Seller or any
member of the Seller's Group or Alcatel or any member of the Alcatel Group
relating to or arising in connection with any breach of contract, breach of
duty or which are attributable to any act, neglect, omission, or default of the
Seller's Group or Alcatel Group prior to Completion outside the Ordinary Course
of Business, save to the extent that such liabilities are specifically included
as an Assumed Liability and to the extent that such liability has not been
accrued in the Financial Statements;

"FINANCIAL INVESTORS" means Francisco Partners L.P. and Citigroup Venture
Capital L.P.;

"FINANCIAL STATEMENTS" means the audited financial statements of the Company
for the year ending on December 31, 2001 prepared in accordance with GAAP (as
adapted by the Accounting Policies which are set out in the notes to the
Financial Statements), disclosed at Schedule 11 and the audited financial
statement for the Acquired Subsidiary for the year ending on December 31, 2001
to be provided by Seller to Buyer as soon as available and in any case prior to
Completion Date and disclosed at Schedule 11;

                                      -4-

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"GAAP" means French generally accepted accounting principles consistently
applied by Alcatel and adapted as described in the Accounting Policies or
the Agreed Upon Closing Policies and Procedures;

"GLOBAL SUPPLY AGREEMENT" means the agreement between Alcatel and the
Seller's Guarantor as defined in Section 7.3 of the Alcatel Agreement;

"GOODWILL" means the goodwill relating to MSB as at Completion together
with the exclusive right for the Buyer to represent itself as carrying on
MSB in succession to the Seller;

"GOVERNMENTAL AUTHORISATION" means any material approval, authorisation,
consent, license, permit, waiver or other authorisation issued, granted,
given or otherwise made available to the Company and/or the Acquired
Subsidiary by or under the authority of any governmental body or pursuant
to any Legal Requirement and which is mandatory for the purpose of carrying
out the MSB;

"HSR ACT" means the Hart-Scott-Rodino Improvements Act of 1976, as amended,
and the rules and regulations promulgated thereunder;

"INTELLECTUAL PROPERTY" means any and all of the following rights arising
from or used in connection with the MSB:

(a)  all patents, and

(b)  trade names, and company names (hereinafter "TRADE NAMES") trade marks and
     service marks and applications for registration and registrations thereto
     (hereinafter "MARKS"), registered internet domain names that are related
     to the MSB and in which the Company and/or Acquired Subsidiary have any
     ownership interest or license right, the corporate trade marks and service
     marks Alcatel word and Alcatel logo (hereinafter "CORPORATE MARKS"), and

(c)  know how, processes, engineering and design know how;

"LEASES" means the leases the details of which are set out in part 3 of
schedule 4;

"LEGAL REQUIREMENT" means any treaty, legislation, constitution, statute,
decree, ordinance, rule, regulation, order or other similar act or document
promulgated by one or more governmental bodies having legislative,
rulemaking or regulatory authority;

"LOSS" means losses, costs, reasonable expenses and liabilities, excluding
any indirect or consequential damages (indirect or consequential damages to
include, without limitation, loss of profits and loss of revenue);

"MANAGEMENT ACCOUNTS" means the unaudited accounts of the Company,
including profit and loss accounts by division as they relate to the period
of the five quarters to and including the first quarter of 2002, disclosed
at Schedule 11 to this agreement;

"MATERIAL ADVERSE CHANGE" means any event, change, circumstance, loss, failure,
effect or other occurrence in connection with the MSB which is materially
adverse to the financial condition of the MSB when considered as a whole, other
than any such event, change, circumstance, transaction, loss, failure, effect or
other occurrence occurring as a result of general economic or financial
conditions not unique to the MSB or general events affecting the industry or
customers of MSB not unique to MSB;

"MATERIAL CONTRACTS" means Contracts which in respect of the MSB or the Assets:

(a)  involve the receipt or payment of more than Euro1,000,000 in any
twelve month period;

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(b)  may not be terminated on notice of less than 6 months; or require a
     payment of a sum or indemnity of more than Euro 500,000 upon termination;

(c)  require notice to be given to the other party(ies) or will be subject to
     termination following a change in the ultimate control of the Company; or

(d)  the absence or termination would be a Material Adverse Change.

"MIXED SIGNAL DIVISION" means the mixed signal division of the Seller and
the Acquired Subsidiary such division conducting activities as described in
the Alcatel Microelectronics Descriptive Memorandum dated December 2001,
such activities comprising the product areas of (i) automotive, Industrial
and Peripherals, (ii) Telematics, (iii) Power and Battery Management, (iv)
ISDN and POTS, and (v) Telecom ASICs; For the avoidance of doubt, there are
no power and battery management devices of wireless DSL chipsets and the
power and battery management devices for wireless chipsets are not in the
scope of the Mixed Signal Division;

"MSB" means the business of the Mixed Signal Division carried on by the Seller
and the Acquired Subsidiary and wheresoever carried on;

"MSB CONFIDENTIAL INFORMATION" means all information relating to MSB, including
its operations, trade secrets or financial or other affairs (including the
future plans and targets of MSB) which is not in the public domain, and which
the Buyer shall clearly define in writing as comprising Confidential Information
within 30 days from Completion;

"MSB PRODUCTS" means products of the MSB as at the date of Completion (other
than the Telecom ASICs listed in Annex 2 of the Volume Purchase Agreement and
section 2 of the Global Supply Agreement);

"NON MSB CONFIDENTIAL INFORMATION" means all information relating to the Company
or the Acquired Subsidiary (other than the MSB Confidential Information),
including its operations, trade secrets or financial or other affairs (including
the future plans and targets) which is not in the public domain, and which the
Seller shall clearly define in writing as comprising confidential information
within 30 days from Completion;

"ORDER" means any award, decision, injunction, judgement, order, ruling,
subpeona or verdict entered, issued, made or rendered by any court or by any
arbitral tribunal;

"ORDINARY COURSE OF BUSINESS" shall be interpreted so that an action shall be
taken or deemed to have been taken by a person in the ordinary course of
business only if such action is:

(a)   consistent with the past practices of such Person and taken, or to be
      taken, in the ordinary course of the normal day-to-day operations of such
      Person provided that it is consistent with the current market conditions;
      or

(b)   similar in nature and magnitude to actions customarily taken in the
      ordinary course of the normal day-to-day operations of other Persons that
      are in the same line of business as such Person;

"ORGANISATIONAL DOCUMENTS" means (a) the "status", articles of association or
certificate of incorporation and the bylaws of a corporation; (b) the
partnership agreement and any statement of partnership of a general partnership;
(c) the limited partnership agreement and the certificate of limited partnership
of a limited partnership; (d) any charter or similar document adopted or filed
in connection with the creation, formation, or organisation of a Person; and (e)
any amendment to any of the foregoing;

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"OTHER CURRENT LIABILITIES" means current liabilities of MSB as determined in
accordance with the application of the Accounting Policies and Allocations Rules
applied on a consistent basis excluding Payables.

"OTHER CURRENT ASSETS" means current assets of MSB as determined in accordance
with the application of the Accounting Policies and Allocation Rules, applied
on a consistent basis, excluding Stocks and Receivables;

"PAYABLES" means all amounts due or accrued in the Ordinary Course of Business
at the Completion Date, to third parties in respect of MSB as at Completion as
determined in accordance with the application of the Accounting Policies and
Allocation Rules;

"PERSON" means any individual, corporation (including any not-for-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organisation, labour union or other entity
or governmental body;

"PROCEEDINGS" means any action, arbitration, litigation or suit (whether
criminal or administrative) commenced, brought, conducted or heard by or before
or otherwise involving any court or an arbitral tribunal;

"PROPERTIES" means the real properties particulars of which are set out in part
1 of Schedule 4 and shall include where the context so admits the individual
real properties comprising the Properties or any part or parts thereof and
"Property" shall be construed accordingly;

"PROJECTED BENEFITS OBLIGATIONS -- PBO" means the actuarial present value of all
benefits attributed by the plan's benefit formula using the same projected unit
credit cost as the one defined under US FAS Board Statement N. 87 -- under the
applicable pension plan(s) of the company employee service rendered prior to
that date. The PBO as of the Completion Date is determined as follows:

(a)  the PBO calculated as of 1 January 2002;

(b)  increased by the pro rata service cost plus the pro rata interest cost
     minus the benefits paid in the period between 1 January 2002 and the
     Completion Date;

For clarification purposes, the incremental PBO as of the Completion Date is
measured based on discount rate of 6.5%, future merit levels (excluding
inflation) of 2.5%, Expected Inflation and the applicable decrement tables.
Expected Inflation is defined as the average of the difference between the
nominal yield on the OAT maturity 2012 and the real yield on the OAT i.e. 2012
as observed on Reuters for March 2002;

"PURCHASE PRICE" has the meaning given to that sum in clause 5.1(a);

"RECEIVABLES" means all amounts owed to or accrued in the Ordinary Course of
Business of MSB in favour of the Seller, any other member of the Seller's Group
in respect of MSB at Completion as determined in accordance with the application
of the Accounting Policies and Allocation Rules and any receivables allocated to
the Buyer pursuant to clause 10.4 shall be deemed Receivables for the purpose of
this definition;

"RELATED PERSON" means with respect to a specified Person (other than an
individual):

(a)  Any Person that, directly or indirectly, Controls, is Controlled by, or is
     under common Control with, such specified Person; and

(b)  any Person that serves as a director or officer of such specified Person.

                                      -7-
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"RENTED PREMISES" means the premises over which the Company and Acquired
Subsidiary have possession by virtue of leases relating to the MSB;

"REPRESENTATIVE" means with respect to a particular Person, any director,
officer, employee, agent, consultant, adviser or other representative of such
Person, including legal counsel, accountants and financial advisers;

"RETAINED EMPLOYEES" means any persons other than the Assumed Employees who are
or have been at any time prior to Completion engaged to any extent in MSB;

"RETAINED LIABILITIES" means, in respect of the period prior to the Completion
Date, all liabilities (whether known or unknown, whether done or omitted to be
done) relating to the Assets, Property, Lease or MSB which does not constitute
an Assumed Liability;

"SELLER'S ACCOUNT" means the account in the name of the Seller, that the Seller
or the Seller's Guarantor shall have given the full details of in writing to the
Buyer 5 Business Days prior to the Completion Date;

"SELLER'S GROUP" means the Seller, the Seller's Guarantor and any subsidiary
undertakings of the Seller's Guarantor, all of them and each of them as the
context admits;

"SELLER'S SOLICITORS" means Clifford Chance;

"STATUTORY ACCOUNTS" means the statutory accounts of the Company for the three
fiscal years ending on the Accounts Date as filed with National Bank of Belgium;

"STOCKS" means the stocks in trade or inventories, raw materials, component
parts, fuels, packing materials, work in progress and finished goods held,
acquired or produced in connection with MSB and related to MSB as determined in
accordance with the Allocation Rules which are at Completion at the Properties
or elsewhere;

"SUBSIDIARY" with respect to any person (the "Parent"), means any Person
Controlled directly or indirectly by such Parent;

"SUPPLY AGREEMENT" means the supply agreement between the Buyer and the Seller's
Guarantor to be entered into on the Completion Date in the form of Schedule 17;

"TAX" means any tax, levy, impost, duty, and any related charge or withholding
(including any fine, penalty, interest or addition to tax), imposed, assessed or
collected by or under the authority of any governmental body;

"TAXATION AUTHORITY" means any government, state or municipality or any local,
state, federal or other fiscal, revenue, customs or excise authority, body or
official anywhere in the world competent to impose, collect or administer any
Tax (including VAT) or make any ruling on any matter relating to Tax;

"TAX REGULATIONS" means any tax law as well as statute, decree, ordinance, rule,
order or other legally binding texts of general application applicable in a
given country as well as any international treaty relating to Tax (including the
Law, directive, regulations, statute, decree, ordinance, rule, order or other
legally binding texts of general application, in each case implementing such
treaty);

"TAX RETURN" means any return (including, without limitation, any information
return), report, statement, schedule, notice, form or other document or
information filed with or submitted to, or required to be filed with or
submitted to, any governmental body in connection with the determination,

                                      -8-
<PAGE>
     assessment, collection or payment of any Tax or in connection with the
     administration, implementation or enforcement of, or compliance with, any
     Legal Requirement relating to any Tax;

     "TELECOM ASICS AGREEMENT" means an agreement which assigns the provisions
     of article 2 of the Global Supply Agreement and the Volume Purchase
     Agreement which relate to the purchase by Alcatel of the Products listed on
     schedule 18;

     "TRADE MARK PHASE OUT LICENCE" means the licence, in the agreed terms, to
     be granted by Alcatel to the Buyer in the terms of clause 5.5 of the
     Alcatel Agreement;

     "TRANSACTION DOCUMENTS" means each of the:

     (a)  Patent Licence Agreement between the Company and the Buyer;

     (b)  Patent Assignment of rights to certain patents between the Seller's
          Guarantor, the Buyer and Alcatel;

     (c)  Technology Transfer and License Agreement between the Company, the
          Seller's Guarantor and the Buyer;

     (d)  Supply Agreement between the Buyer and the Seller's Guarantor;

     (e)  Transitional Service Agreement between the Company and the Buyer;

     (f)  Agreement Relating to Back End Transitional Services between the Buyer
          and the Company;

     (g)  Notary Deed relating to the transfer of the Properties by the Company
          to the Buyer;

     (h)  Telecom ASIC's agreement;

     (i)  any other documents or agreements that before the Completion Date the
          Buyer's Solicitors and the Seller's Solicitors agree are to be
          included as Transaction Documents;

     "TRANSFERRED EMPLOYEES" means those employees transferred to the Seller's
     Guarantor pursuant to the Alcatel Transaction Documents;

     "VAT" means such Tax as may be levied by reference to, inter alia, added
     value, sales of goods, use or supplies and excluding any Tax on transfer or
     sale of property;

     "VOLUME PURCHASE AGREEMENT" means the agreement between Alcatel and the
     Seller attached at Schedule 18;

     "WARRANTIES" means the warranties set out in clause 14 and schedule 2,
     Parts A and B;

     "WORKING CAPITAL" means Current Assets less Current Liabilities as they are
     allocated between MSB and the other divisions of the Seller and the
     Acquired Subsidiary as determined in accordance with the Allocation Rules.

     1.2 In this agreement unless otherwise specified, reference to:

     (a)  a document in the "AGREED TERMS" is a reference to that document in
          the form approved and for the purposes of identification signed by or
          on behalf of each party including those documents listed in schedule
          6;

     (b)  "INCLUDES" and "INCLUDING" shall mean including without limitation;

                                      -9-
<PAGE>
     (c)  a "PARTY" means a party to this agreement and includes its permitted
          assignees (if any) and/or the successors in title to that part of its
          undertaking which includes this agreement;

     (d)  a "STATUTE" or "STATUTORY INSTRUMENT" or "ACCOUNTING STANDARD" or any
          of their provisions is to be construed as a reference to that statute
          or statutory instrument or accounting standard or such provision as
          the same may have been amended or re-enacted before the date of this
          agreement;

     (e)  "CLAUSES", "PARAGRAPHS" or "SCHEDULES" are to clauses and paragraphs
          of and schedules to this agreement;

     (f)  "WRITING" includes any methods of representing words in a legible form
          (other than writing or an electronic or visual display screen) or
          other writing in non-transitory form; and

     (g)  words denoting the singular shall include the plural and vice versa
          and words denoting any gender shall include all genders.

1.3  The schedules form part of the operative provisions of this agreement and
     references to this agreement shall, unless the context otherwise requires,
     include references to the schedules.

1.4  The index to and the headings in this agreement are for information only
     and are to be ignored in construing the same.

2.   SALE AND PURCHASE

2.1  Upon the terms and subject to the conditions of this agreement, the Seller
     shall and the Seller's Guarantor shall cause the Seller, any applicable
     member of the Seller's Group or the Alcatel Group or the Acquired
     Subsidiary as owner to sell and the Buyer shall purchase the Assets and MSB
     as a going concern with effect from Completion free from any Encumbrance
     (save as expressly stated herein) and together with all accrued benefits
     and rights and all Assumed Liabilities attached thereto.

2.2  Subject to clause 8.5, it is intended by the Seller's Guarantor and the
     Buyer's Guarantor that such sale and purchase of the Assets and MSB shall
     occur simultaneously with completion of the SPA.

2.3  The Excluded Assets are not included in the sale and purchase pursuant to
     clause 2.1.

2.4  The consideration for such sale and purchase shall be as specified in
     clause 5.

3.   CONDITIONS

3.1  Completion is conditional upon the fulfilment of each of the Conditions as
     follows:

     (a)  completion of the Alcatel Agreement and each of the Alcatel
          Transaction Documents having occurred without the waiver by Seller's
          Guarantor of (i) any breach or failure to perform or comply with any
          agreements and covenants required by the Alcatel Agreement to be
          performed or complied with by any party thereto, other than the
          Seller's Guarantor or (ii) any condition precedent for the benefit of
          Seller's Guarantor, which in each case, relates to MSB provided
          however that Seller's Guarantor shall be entitled to grant any such
          waiver with respect to the MSB with the prior written consent of
          Buyer;

     (b)  the Company executing the Deed of Adherence under which it will become
          a party to this Agreement;

                                      -10-
<PAGE>
      (c)    all of the Seller's and the Buyer's representations and warranties
             in this agreement (considered collectively), and each of these
             representations and warranties (considered individually) must have
             been true, accurate in all material respects and not materially
             misleading, in each case, as of the date of this agreement and the
             Completion Date as if made on such date;

      (d)    the Seller, the Seller's Guarantor, the Buyer and the Buyer's
             Guarantor shall have performed and complied with in all material
             respects all agreements and covenants required by this Agreement to
             be performed or complied with by it prior to or at Completion;

      (e)    all notifications and consultations required under any applicable
             Legal Requirement shall have been made in all material respects and
             all Consents (if any), (including, without limitation any consent
             under the HSR Act) materially required to operate the MSB shall
             have been obtained;

      (f)    the delivery by the Belgian Tax Authority to the Seller of a valid
             certificate with regard to the Company as meant in article 442 bis
             of the Belgian Income Tax Code 1992;

      (g)    the performance of an orientating soil survey ("orienterend
             bodemonderzoek") as defined in the Flemish Soil Decontamination
             Decree of 22 February 1995 ("het Vlaams decreed van 22 februari
             1995 betreffende de bodemsanering")(the "Decree") and any
             subsequent descriptive soil survey ("beschrijvend bodemonderzoek")
             or other actions that may be required under the Decree in respect
             of the transfer to Buyer or Buyer's Designee of the Property
             located at 9700 Oudenaarde, Westerring 15, Belgium;

      (h)    the obtaining of all required oil certificates ("bodemattesten")
             as defined in the Decree in respect of the transfer of the Property
             to Buyer or Buyer's Designee located at 9700 Oudenaarde,
             Westerring 15, Belgium;

      (i)    the written consent by the municipality of Oudenaarde in respect of
             the transfer to Buyer or Buyer's Designee of the Property located
             at 9700 Oudenaarde, Westerring 15, Belgium;

      (j)    simultaneous valid and binding execution and delivery of the
             Transaction Documents; and

      (k)    no material Breach having been committed by either the Buyer or the
             Seller which has not been waived by the Party not in Breach.

3.2   The Buyer may by notice in writing to the Seller's Guarantor waive any of
      the Conditions of clause 3.1 in whole or in part. The Seller's Guarantor
      may by notice in writing to the Buyer waive any of the conditions of sub
      clause 3.1(e) in whole or in part.

3.3   The Seller's Guarantor and the Buyer each undertake to each other to use
      all reasonable endeavours to procure the fulfillment of the Conditions of
      clause 3.1 between 15 June and 30 June 2002 or any other date to be
      mutually agreed in writing. The Buyer agrees to use all reasonable
      endeavours to procure the fulfilment of the Conditions set on in
      sub-clause 3.1(e) between 15 June and 30 June 2002 or such other mutually
      agreed date. The Seller's Guarantor shall procure that, immediately
      following the completion of the SPA, the Seller shall execute the Deed of
      Amendment so that the Seller immediately becomes a party to this Agreement
      and immediately thereafter the Seller's Guarantor, the Buyer and the
      Buyer's Guarantor shall each execute the Deed of Amendment.

3.4   If all of the Conditions have not been fulfilled on or before the earlier
      of 30 September 2002 or the date on which the Alcatel Agreement is
      terminated by the Seller's Guarantor in respect of a breach of the Alcatel
      Agreement by Alcatel in accordance with its terms, or any other mutually
      agreed date this Agreement shall terminate with effect from that date.

                                      -11-
<PAGE>
3.5  If this Agreement terminates in accordance with clause 3.4 or clause 4.4
     ten the obligations of the Parties shall automatically terminate save that
     the rights and liabilities of the Parties which have accrued prior to
     termination shall continue to subsist including those under clauses 16 to
     19, 21 to 26 (inclusive).

3.6  The Seller's Guarantor and the Buyer's Guarantor shall keep each other
     advised of the progress towards the satisfaction of its obligations under
     clause 3.3.

3.7  Without prejudice to the generality of clause 3.4 above, if there are
     jurisdictions where Consents as set out in clause 3.1(e) are required and
     are suspensive, but are not obtained, a filing made but the waiting period
     not expired, Completion in such jurisdictions shall not be effected and the
     parties shall:

     (a)  agree to such variations to the terms of this Agreement as may be
          necessary to reflect the fact that Completion of some but not all of
          the businesses will occur; and

     (b)  use their Best Endeavours to obtain such Consents as are required in
          order for the sale and purchase of each of the other businesses to
          take place as soon as practicable after Completion and the parties
          hereby agree to enter into or procure the entry into of any further
          agreements or arrangements as may be deemed necessary in order to
          effect the same.

4.   PERIOD TO COMPLETION

4.1  OPERATION OF MSB

     (a)  Between the date of this Agreement and the Completion Date, the Seller
          and the Seller's Guarantor (to the extent of its power to do so
          pursuant to the terms of the Alcatel Agreement) shall cause MSB to be
          conducted in the Ordinary Course of Business.

     (b)  Without limitation to the general character of clause 4.1(a) above the
          Seller and, to the extent of its power to do so pursuant to the terms
          of the Alcatel Agreement, the Seller's Guarantor warrants and agrees
          that from the date of this Agreement to the Completion Date and save
          with the prior written consent of the Buyer's Guarantor, which
          response shall be given no later than four Business Days after
          request, in the absence of response within said period, the Buyer's
          Guarantor shall be deemed to have consented:

          (i)    no grant by the Company or the Acquired Subsidiary of a loan
                 credit or memory facility or amendment of an existing loan
                 credit or money facility shall be effected outside the Ordinary
                 Course of Business which will give rise to a Material Adverse
                 Change;

          (ii)   no grant by the Company or the Acquired Subsidiary of a
                 guarantee, charge, pledge or other Encumbrance over the Assets
                 or the Property shall be effected which shall not be fully
                 discharged or released as at the Completion Date;

          (iii)  none of the Company or the Acquired Subsidiary shall dispose of
                 any interest in the Properties or any of the Assets;

          (iv)   Capital investment related to MSB shall be spent in the
                 Ordinary Course of Business. In any event, the Company shall
                 invest in and pay for fixed assets related to MSB in the period
                 between the date of this Agreement and Completion Date in an
                 amount of at least the same proportions to the expenditures for
                 fixed assets of the Company for that period as the proportion
                 for MSB reflected in the Company's fixed asset budget for 2002
                 as a whole attached as Schedule 13;

          (v)    Stock shall be managed in the Ordinary Course of Business of
                 MSB;

                                      -12-
<PAGE>
          (vi)   the Company and the Acquired Subsidiary will continue to manage
                 Working Capital in the Ordinary Course of Business of MSB;

          (vii)  except as disclosed in Schedule 14 neither the Company nor the
                 Acquired Subsidiary shall grant any benefit, premium or bonus
                 to their employees, directors and managers and the Company and
                 Acquired Subsidiary shall not conclude a remuneration contract
                 outside the standards applicable to the type of business
                 operated by the Company and Acquired Subsidiary and none of the
                 employees shall benefit from extra-statutory remunerations
                 which derogate from the applicable contract; and

          (viii) neither the Company nor the Acquired Subsidiary shall enter
                 into or materially amend any long term agreements or
                 commitments, long term being defined as effective after
                 December 31, 2002, in each case, relating to MSB;

     (c)  For the purpose of giving the consents provided in paragraph (b) of
          this sub-section, the Buyer's Guarantor hereby designates as the
          Buyer's authorised representative Christine King and Walter Mattheus
          or any other person they nominate to the Seller's Guarantor as a
          substitute for either of them;

     (d)  The Buyer shall only be entitled to claim for a breach by Seller's
          Guarantor of section 4.1(b) or in the event of gross negligence or
          wilful breach by the Seller's Guarantor in respect of the provisions
          of clause 4.1(a).

4.2  REQUIRED APPROVALS

     As promptly as practicable after the date of this agreement, the Seller's
     Guarantor shall cause the Seller and the Buyer and Buyer's Guarantor shall
     make all filings required by Legal Requirements to be made by them in order
     to consummate the Contemplated Transactions. Between the date of this
     agreement and the Completion Date, the Seller's Guarantor shall use its
     Best Efforts to cause the Company to co-operate with the Buyer and Buyer's
     Guarantor (a) with respect to all filings that the Buyer is required by
     Legal Requirements to make in connection with the Contemplated Transactions
     and (b) in obtaining all Consents.

4.3  ACCESS

     (a)  Both prior to and following Completion, the Seller's Guarantor and the
          Seller (after it becomes a party to this agreement) agree to grant the
          Buyer and its Representatives, during normal business hours,
          reasonable access to employees of the Company and the Acquired
          Subsidiary and to the auditors who signed the audit report in the
          Financial Statements and the Statutory Accounts and to inspect and/or
          copy any accounting, financial, legal or tax books and records of the
          Company and the Acquired Subsidiary (including the Statutory Accounts
          and any records or information relating to the preparation of the
          Statutory Accounts) which shall include all relevant historical, and
          current commercial information relating to MSB, including access or
          information in connection with the preparation of financial statements
          prepared in conformity with applicable regulations of the US
          Securities and Exchange Commission (including Regulation S-X) by Buyer
          or Buyer's Guarantor. The Seller shall grant all reasonable access to
          the Buyer, as regards the Seller's accounting, financial, legal or tax
          books and records, in order to provide the Buyer with access to
          information reasonably required by the Buyer for regulatory or other
          filings.

          It is understood that neither the Seller's Guarantor nor the Seller
          shall be required to provide any information relating to the
          preparation of the Statutory Accounts of the Seller, which may require
          the Seller's Guarantor or the Seller to grant the Company's auditors
          an indemnity or an

                                      -13-

<PAGE>
          agreement to hold harmless covenant which the Seller's Guarantor,
          acting reasonably, in its own discretion, shall not deem acceptable.

     (b)  The Seller's Guarantor agrees to provide as soon as possible after
          signing of this agreement all underwriting information necessary to
          enable Buyer to subscribe to the relevant insurance policies and/or to
          replace any group insurances at Completion.

     (c)  The Seller's Guarantor agrees that it shall use its Best Efforts, both
          prior to and following Completion, to ensure that Alcatel provides the
          access and the information referred to in (a) above to the Buyer.

4.4  NOTIFICATION

     Between the signature of this agreement and the Completion Date or the
     termination of this Agreement in accordance with its terms, the Seller
     shall notify the Buyer as soon as reasonably practicable in writing if the
     Seller becomes aware of any new event that causes or shall cause any
     representation or warranty under clause 15 or schedule 2 or contained in
     the Alcatel Agreement to be inaccurate or incomplete. The Seller may then
     update the list of information disclosed to the Buyer, as set out in the
     relevant Annex, in order to take into account the consequences of such new
     event.

     (a)  If Seller does so update an Annex, the Buyer may nevertheless elect to
          terminate this agreement (notwithstanding such update) if:

          (i)    the new event in question arises as a result of any breach by
                 Seller of its obligations contained in clause 4 hereof or as a
                 result of any act or omission of the Seller, or Seller's
                 Guarantor, or

          (ii)   the Seller has not used its Best Efforts to limit (or to cause
                 the Acquired Subsidiary to limit) any adverse consequences
                 which arise for the Company or the Acquired Subsidiary as a
                 result of the new event in question, or

          (iii)  the new event affects or could affect the Company or the
                 Acquired Subsidiary in a material respect, or

     (b)  If the Seller does so update an Annex, the Buyer may nevertheless
          elect to terminate this agreement if the new event(s) would constitute
          a material omission, change or misrepresentation to the schedules of
          the SPA or this Agreement, which taken individually or cumulatively,
          is materially adverse to MSB.

          For the purposes of clause 4.4(a) and 4.4(b), "NEW EVENT" means any
          event which occurs between the date hereof and the Completion Date and
          which does not occur as a result of events already existing at the
          date hereof.

     (c)  During the same period, the Seller's Guarantor shall notify the Buyer
          as soon as reasonably practicable of the occurrence of any Breach of
          any covenant of the Seller in this clause 4 or of Alcatel contained in
          the Alcatel Agreement or of the occurrence of any event that may make
          the satisfaction of the conditions in clause 3 impossible.

4.5  With respect to the MSB, the Seller's Guarantor undertakes to the Buyer
     that it will not undertake any negotiations, communications or discussions
     (including in the case of correspondence and any other written
     documentation) with any trade union or other such organisation without
     first informing the Buyer, and to the extent allowed involving a
     representative of the Buyer. Furthermore, when meeting with the Seller's
     employees or representatives from the date hereof until Completion to the
     extent allowed by Alcatel the Seller shall not take any action in respect
     of trade unions or organisations without the prior written approval of the
     Buyer (such consent not to be unreasonably withheld).

                                      -14-

<PAGE>
4.6  The Seller's Guarantor and the Buyer's Guarantor agree that prior to the
     Completion Date they shall negotiate in good faith and enter into a
     transitional services agreement at Completion containing the terms set
     forth in Schedule 22 together with any other terms that they shall so
     agree.

5.   CONSIDERATION

5.1  (a)  The Purchase Price (the "PURCHASE PRICE") payable for the sale and
          purchase of the MSB and the Assets shall be an amount equal to 70
          million euro.

     (b)  The total consideration in respect of the transactions contemplated by
          this agreement shall be the sum of the Purchase Price and the
          assumption of the Assumed Liabilities.

5.2  The Purchase Price shall be paid in full by electronic transfer of funds at
     Completion in accordance with clause 6.3.

5.3  The Benefits Plan adjustment will be determined and paid in accordance
     with Schedule 5.

5.4  For all tax and accounting purposes the Buyer and the Seller agree to
     report the transactions contemplated in this Agreement in a manner
     consistent with the Purchase Price allocation, and will not take any
     position inconsistent therewith in any tax returns, in any refund claim, in
     any litigation or otherwise, unless required to do so by a governmental
     authority.

5.5  The Buyer and the Seller shall acting reasonably and in good faith an in
     any event no later 60 days after Completion, agree on the allocation the
     Purchase Price amongst the Assets so as to reflect a fair and responsible
     allocation and neither party shall subsequently take any positions
     inconsistent with such allocation.

5.6  Prior to the execution by a Belgian notary of the deed of transfer, between
     the Seller and the Buyer, of the Belgian Property, the Parties shall have
     agreed on the pro-fisco value of the Belgian Property, which shall be set
     out in such deed of transfer. The Parties undertake to have such agreed
     pro-fisco value validated by a Belgian real estate expert of their joint
     choice, prior to the execution of the deed of transfer.

     Should the Parties not be able to find an agreement on the amount of the
     pro-fisco value, they shall appoint a Belgian real estate expert of their
     joint choice in order to determine such pro-fisco value. The expert's
     estimation shall bind the Parties and shall be included in the above
     notarial deed of transfer.

6.   COMPLETION

6.1  The purchase and sale provided for in this agreement is scheduled to take
     place at the offices of the Seller's Solicitors on the date that is at the
     latest four (4) Business Days following satisfaction (or waiver if
     permitted) of all the conditions referred to in clause 3, or at such other
     time and place as the Parties may agree except in relation to the
     Properties where Completion shall take place in accordance with Part 2 of
     schedule 4 or as otherwise agreed between the Seller and the Buyer. If, on
     the scheduled Completion Date, the Seller signs, executes and delivers all
     documents and performs all acts, matters and things required of it as set
     out in or otherwise complies with clause 6.2 and all conditions have been
     fulfilled or waived, such date shall be the Completion Date. Subject to the
     provisions of clause 6.4, failure to consummate the purchase and sale
     provided for in this agreement on the date and time and at the place
     determined pursuant to this clause 6.1 shall not result in the termination
     of this agreement and shall not relieve any Party of my obligation under
     this agreement.

                                      -15-
<PAGE>
6.2  At Completion the Seller shall:

     (a)  make available to the Buyer at the Properties:

          (i)   the Books and Records and that part of the Business Information
                which is in writing; and relates to the MSB;

          (ii)  as well as all other Assets hereby agreed to be sold title to
                which can be transferred by delivery,

          with the intent that title in the Assets referred to in this clause
          6.2(a) shall pass by and upon such delivery;

     (b)  deliver to the Buyer:

          (i)   duly executed assignments and/or novations and consents of
                the Contracts listed in Schedule 6, as agreed between the
                Seller's Guarantor and the Buyer;

          (ii)  a release of any Encumbrance other than Encumbrance that does
                not materially effect the value or use of such Assets to which
                any of the Assets owned by the Seller, the Acquired Subsidiary
                or any member of the Alcatel Group, are subject;

          (iii) a copy of the minutes of a meeting of the directors of the
                Seller authorising the execution by the Seller of this agreement
                and all other documents specified herein and an opinion from the
                General Counsel of Seller's Guarantor, confirming that the
                execution by the Sellers' Guarantor of this Agreement has been
                duly authorised;

          (iv)  the agreement by the Seller to transfer all vehicle registration
                documents in respect of any motor vehicles comprised in the
                Assets together with all current test certificates and all
                current road fund licences;

          (v)   duly executed copies of each of the Transaction Documents and
                the Trademark Phase Out Licence, the Environmental Indemnity,
                and the Alcatel Transitional Services Agreement; and

     (c)  upon request from the Buyer, do or procure the doing of all acts
          and/or execute or procure the execution of all such documents in a
          form reasonably satisfactory to the Buyer acting reasonably for the
          purpose of vesting in the Buyer legal title to MSB and the Assets
          (including, for the avoidance of doubt, the Property and the Leases)
          as shall be required to comply with any Legal Requirement or as the
          Buyer's Solicitors shall otherwise reasonably require which, in each
          case, have been notified to the Seller's Solicitors five Business Days
          prior to the Completion Date.

6.3  Upon compliance by the Seller with the provisions of clause 6.2 the Buyer
     shall:

     (a)  provide for the transfer by electronic transfer of funds of the
          Purchase Price (less any sum as determined pursuant to clause 8.5)
          payable at Completion Date to the Seller's Account; and

     (b)  deliver to the Seller a counterpart of the documents referred to in
          clauses 6.2, to which the Buyer or the Buyer's Guarantor is a party
          duly executed by the Buyer or Buyer's Guarantor (as the context of
          such documents so requires).

6.4  If in any respect the obligations of the Seller (or Buyer) pursuant to this
     clause 6 are not complied with on the scheduled date for Completion or on
     the date for legal completion of the transfer or assignment of any of the
     Properties in accordance with schedule 4 the Party not in default may:

                                      -16-

<PAGE>
     (a)  defer Completion to a date not more than 20 Business Days after
          Completion should have taken place but for the said default (and so
          that the provisions of this clause 6, apart from this clause 6.4(a),
          shall apply to Completion as so deferred); or

     (b)  proceed to Completion so far as practicable (without prejudice to its
          rights hereunder); or

     (c)  terminate this agreement without prejudice to the rights and
          liabilities which accrued prior to termination which shall continue to
          subsist including those under clauses 17 to 19 and 21 to 26
          (inclusive).

7.   PROPERTIES

     The provisions of Schedule 4 shall apply in relation to the Properties and
     the Leases with the intent that as at Completion (or such other time as
     this Agreement may contemplate) the Buyer acquires full title to the
     Property and the Lease without any Encumbrance.

8.   ACTION AFTER COMPLETION

8.1  Forthwith after Completion the Seller shall join with the Buyer in sending
     out a notice in the agreed terms to all the Buyer's and the Seller's
     customers, clients or suppliers and their respective other business
     contacts in respect of MSB.

8.2  After Completion the Seller shall promptly pass on to the Buyer all orders,
     enquiries, notices, correspondence and information relating to MSB which
     the Seller may receive.

8.3  Following Completion the Seller shall from time to time forthwith upon
     request from the Buyer do or procure the doing of all acts and/or execute
     or procure the execution of all such documents in a form reasonably
     satisfactory to the Buyer for the purpose of vesting in the Buyer the title
     to the Assets and MSB Business and otherwise giving the Buyer the full
     benefit of this agreement. The Buyer and the Seller shall discuss the
     allocation of any actual out of pocket cost or expense related thereto.

8.4  (a)  In circumstances where the Trade Mark Assignment (as defined below)
          has not been delivered to the Buyer and the Completion Date, the
          Seller shall continue to use its Best Efforts to procure that the
          benefit of clause 5.5 (Mark license Phase Out) of the Alcatel
          Agreement is unconditionally assigned to the Buyer (for itself and
          each of its Related Persons) and that the irrevocable written consent
          of Alcatel is obtained to such assignment (the "Trade Mark
          Assignment").

     (b)  Prior to the Trade Mark Assignment being completed or any member of
          the Alcatel Group making a claim against any member of the Buyer's
          Group in respect of any infringement of any Alcatel trade marks by any
          member of the Buyer's Group, the Seller shall indemnify and keep
          indemnified the Buyer (for itself and each of its Related Persons)
          against any and all obligations, liabilities, claims, demands and
          expenses arising from the fact that neither the Buyer nor any of its
          Related Persons has delivered the benefit of the Trade Mark
          Assignment.

8.5  (a)  The Buyer and the Seller agree that they shall each use their
          respective Best Efforts to seek that Completion of this Agreement
          occurs as soon as is practicable immediately following the completion
          of the Alcatel Agreement (the "Simultaneous Closing").

     (b)  if the reason why the Simultaneous Closing can not be achieved is due
          to the conditions set forth in clause 3.1(h), (i) or (??illegible??)
          not being satisfied on or prior to the completion of the completion of
          the Alcatel Agreement, the Buyer agrees that it shall if so requested
          by the Seller's Guarantor proceed to complete this Agreement
          simultaneously with the Alcatel

                                      -17-

<PAGE>
          Agreement (save in respect of the Belgian Property) and to complete
          the acquisition of the Belgian Property as soon as practicable
          following the satisfaction of each of the conditions in clause 3.1(g),
          (h) or (i) (the "SPLIT CLOSING") provided that

          (i)  (a)  the Buyer shall pay to the relevant Taxation Authority
                    promptly following the Completion Date the amount of VAT
                    that it reasonably determines is due in respect of the
                    transfer of the Belgian Property (the "VAT Payment"), and
                    shall deduct such amount from the Purchase Price payable to
                    the Seller on the Completion Date;

               (b)  the Buyer shall, at Seller's request and at Seller's
                    expense, apply for a refund of the VAT Payment and shall
                    take all such actions as Seller may reasonably request in
                    order to obtain such refund;

               (c)  the Buyer shall promptly pay over to Seller all amounts
                    received or recovered from the Taxation Authority in respect
                    of the refund application referred to in (b) above, up to
                    the amount of the VAT Payment.

          (ii) that the Buyer and the Seller shall have entered into a lease
               (with nominal lease payments) under which the Buyer is granted
               rights and assumes obligations so that it is in the same position
               it would have been had the completion of the acquisition of the
               Belgian Property occurred simultaneously with this Agreement.

     (c)  Prior to the Completion Date the Seller and the Buyer agree that they
          shall each consider, in good faith and acting reasonably, any proposal
          made by the other whereby (i) the structure of the acquisition of MSB
          or the Assets or (ii) the mechanism set forth in clause 8.5(b) may be
          altered so as to ensure that either or both party's derive the full
          benefit of the transactions contemplated under this agreement.

8.6  The Seller's Guarantor agrees to consent to and execute any document
     necessary to implement a modification to article 2 of the Global Supply
     Agreement to permit a direct agreement between the Buyer's Group and
     Alcatel if such arrangement is agreed to by Alcatel, provided that Buyer
     and Buyers' Guarantor agree to hold Seller and Seller's Guarantor harmless
     from any and all actual out of pocket liabilities, losses, damages, costs
     and expenses net of any benefits received, including attorney's fees and
     expenses arising from or in connection with Seller's Guarantor having to
     comply with any of Buyer's obligations as a supplier due to Buyer's breach
     of the terms of such Global Supply Agreement, including without limitation
     any costs and expenses incurred by Buyer's guarantor in the event that
     Alcatel shall require due performance by Buyer's Guarantor of the
     obligations of Supplier pursuant to the Telecom Asie Agreement.

9.   LIABILITIES OF THE SELLER AND BUYER

9.1  The Buyer shall:

     (a)  with effect from the Completion Date assume responsibility for and
          indemnify the Seller against the payment or performance of the Assumed
          Liabilities and all obligations, liabilities, costs, losses, claims
          demands and expenses relating hereto.

     (b)  Perform any obligation falling due for performance or which should be
          performed after completion in respect of any Assumed Liability and
          shall use all reasonable endeavours to procure the cancellation of
          those securities or guarantees given in respect of the Assumed
          Liabilities by a member of the Seller's Group which have been
          expressly disclosed in Schedule 16 provided that it shall not be
          reasonable for the Buyer to provide any form of financial
          accommodation, bond, guarantee, undertaking or the payment of cash to
          procure such cancellation.

                                      -18-
<PAGE>
 9.2 The Seller shall

     (a) with effect from the Completion Date retain responsibility for and
         indemnify the Buyer against the payment or performance of the Retained
         Liabilities; and

     (b) perform any obligation falling due for performance or which should have
         been performed before Completion in respect of any Retained Liability.

 9.3 With regard to article 442 bis of the Belgian Income Tax Code 1992, the
     Seller undertakes to indemnify the Buyer in full and hold it harmless
     against any and all loss, liability, costs and expenses arising as a result
     of (a) the Buyer being held jointly liable for any tax liabilities of the
     Seller, and/or (b) any enforcement measure being taken by the Belgian tax
     authorities against the Assets.

 9.4 Upon and following Completion it shall be the responsibility of the Buyer
     to effect all insurance cover in respect of MSB and the Assets.

10.  RECEIVABLES AND PAYABLES

10.1 As and when required by the Buyer after Completion, the Seller shall
     deliver to the Buyer assignments of such of the Receivables as the Buyer
     may specify (the "ASSIGNED RECEIVABLES") and the Seller irrevocably
     appoints any director of the Buyer after Completion to act as its attorney
     in fact, with full power of substitution, in the execution of any such
     assignment, such power of attorney being by way of security to secure the
     Seller's obligations in connection with its sale of the Receivables.

10.2 Notwithstanding clause 10.1 the Seller undertakes to hold on trust for the
     benefit of the Buyer any payments in respect of any Receivables received by
     it and to pay the same to the Buyer forthwith on receipt.

10.3 The Seller shall sign and deliver to the Buyer any letter from it to each
     of the persons from whom the Receivables are owed requiring them to pay
     their respective part of the Receivables to the Buyer that the Buyer shall
     reasonably request it sign.

10.4 The Seller and the Buyer agree that in respect of any receivable (either
     due at the date hereof or which may become payable in the future) relating
     to research and development grants that such receivables shall be allocated
     amongst the Buyer and the Seller in accordance with the allocation of the
     contracts that relate to MSB and the other divisions of the Company in
     accordance with the Allocation Rules.

10.5 The Buyer undertakes to make all payments of the Payables in the Ordinary
     course of Business.

10.6 The Buyer shall sign and deliver to the Seller any letter from it to each
     of the persons to whom the Payables are owed notifying them that the Buyer
     is responsible for the payment of the Payables that the Seller shall
     reasonably request it sign.

11.  CONTRACTS

11.1 If any of the Contracts cannot be assigned or novated to the Buyer without
     the consent of a third party then the Seller shall use all Best Efforts to
     obtain such consent (which shall include requesting that the applicable
     member of the Alcatel Group use its reasonable endeavours to assist in
     obtaining any such consent). Notwithstanding the foregoing, nothing
     contained herein shall obligate the Seller to expend or pay any amount or
     other type of consideration to obtain any consents, approvals or waivers.

                                      -19-

<PAGE>
11.2 In any case where the consent in clause 11.1 above is refused or otherwise
     not obtained and until it is obtained or where any of the Contracts are
     incapable of transfer to the Buyer by assignment or by other means:

     (a)  the Seller shall hold such Contracts and any monies, goods or other
          benefits received thereunder and shall forthwith upon receipt of the
          same account for and pay or deliver to the Buyer without any deduction
          or withholding whatsoever all such monies, goods and other benefits;

     (b)  the Buyer shall perform such Contracts to the extent that they are
          Assumed Liabilities (if such sub-contracting is permissible and lawful
          under the relevant Contract) as sub-contractor to the Seller;

     (c)  the Seller shall use Best Endeavours to enable the Buyer to enforce
          the rights of the Seller under the Contracts and shall at all times
          act with regard to the Contracts in accordance with the Buyer's
          reasonable instructions from time to time; and

     (d)  the Seller shall not take any action in respect of the Contracts which
          may have a Material Adverse Change without the prior written approval
          of the Buyer.

11.3 Nothing in this agreement shall be construed as an attempt to assign any
     contract which by its terms or by law is not assignable without a third
     party consent unless such consent has been given.

12.  EMPLOYEES

12.1 ASSUMPTION

     Seller and Buyer agree that, pursuant to collective labour agreement No. 32
     bis, (in respect of those Assumed Employees to which this collective labour
     agreement in Belgium relates) and in respect of all other Assumed Employees
     pursuant (but subject) to any other applicable Legal Requirement (including
     in France article L. 122-12 of the French Employment Code), the contracts
     of employment between Seller and the Assumed Employees will have effect
     after Completion as if made between the Buyer and the Assumed Employees,
     and the Buyer shall assume and hereby agrees to take over at Completion all
     of the Assumed Employees, subject to the conditions of this clause 12 and
     all applicable Legal Requirements. The Buyer shall not be obligated to
     offer employment to any person other than the Assumed Employees unless
     otherwise required by law.

12.2 CONSULTATION

     Seller and Buyer shall consult and co-operate to comply with the relevant
     Legal Requirements regarding the giving of notice to the Assumed Employees.

12.3 INDEMNITY

     The Seller shall indemnify the Buyer against all losses and costs arising
     out of or in connection with:

     (a)  any failure by the Seller to comply with its duties under any Legal
          Requirement including the transfer of undertaking, rules and/or
          failure by the Seller to comply with any other Legal Requirement duty
          or obligation to any Assumed Employee or to any trade union, employee
          or appropriate representatives of any Assumed Employee;

     (b)  any threatened or actual action, claim or other legal recourse by any
          Assumed Employees (whether in contract, in tort or otherwise) arising
          prior to Completion; and

                                      -20-
<PAGE>
          (c)  any threatened or actual action, claim or other legal recourse by
               any person who is not an Assumed Employee or an employee to whom
               Buyer is obligated by law of offer employment, relating to that
               person's employment or previous employment with the Seller or the
               Acquired Subsidiary or at the Alcatel Group.

12.4      APPORTIONMENT

          The parties agree that all statutory contributions and all income tax
          deductions for which the Seller is accountable, all employer's
          contributions to the Seller's pension and insurance schemes to the
          extent that they are not funded by the transferred pension assets
          pursuant to Schedule 5 and all other employment costs and all
          liabilities in relation to salaries and wages, employee bonus
          entitlements that are due and payable as at Completion in respect of
          Assumed Employees (a) will be borne by Seller in respect of the period
          up to the Completion whether or not due for payment at such date, but
          in any case excluding any amounts or rights owed or which may be owed
          to Assumed Employees or which may have accrued thereto but with
          respect to which such Assumed Employee is not eligible or which are
          not vested as of the Completion, (b) in respect of the period after
          the Completion will be borne by the Buyer, and (c) will if necessary
          be apportioned on a time basis.

13.       TAX

13.1      The provisions of Article 11 and Article 18, Section 3 of the Belgian
          VAT-Code and the provisions of articles 210 and 215 of Schedule II of
          the French General Tax code shall apply to this Agreement, so that the
          transfer of the MSB and Assets shall be exempted from VAT. Seller and
          the Buyer shall prepare and deliver, at Completion, a document making
          reference to the VAT-exempt nature of the transaction as maybe
          applicable to the transactions contemplated by this agreement. In the
          event that any Belgian, French or other VAT or any other Tax is
          payable, all such payments shall be borne by the Buyer.

13.2      To the extent that in jurisdictions other than Belgium and France the
          transfer of MSB, the Assets (or parts thereof) may give rise to VAT
          being payable on such transfer, the Seller agrees with the Buyer that
          it shall use its Best Efforts to assist the Buyer in obtaining any
          allowable relief or exemption from VAT in any and all such
          jurisdictions.

13.3      The Buyer will take care of payment of all taxes, including VAT
          (subject to the provisions of clause 8.5) and relevant property
          transfer tax, relating to the sale of Assets and Goodwill pursuant to
          this Agreement, and Buyer's Guarantor shall hold harmless Seller's
          Guarantor and Seller against any and all loss, liability, costs and
          expenses arising as a result of such taxes and VAT.

14.       WARRANTIES AND INDEMNITY

14.1      The Seller and the Seller's Guarantor warrant with the Buyer in the
          terms of the Warranties. The Warranties shall be deemed to have been
          repeated immediately prior to Completion by reference to the facts and
          circumstances then subsisting.

14.2      Any information supplied by any Assumed Employee to the Seller or its
          agents or accountants, solicitors or other advisers in connection with
          the Warranties, the disclosures to the Warranties or otherwise in
          relation to MSB and the Assets shall not constitute a representation
          or warranty or guarantee as to the accuracy thereof by such Assumed
          Employee or other such persons and the Seller undertakes to the Buyer
          and each such Assumed Employee and other such persons that it will not
          bring (other than in circumstances of fraud or wilful concealment on
          the part of that Assumed Employee or such person) any and all claims
          which it might otherwise have against such Assumed Employee or other
          such persons in respect thereof.

                                      -21-
<PAGE>
14.3      Each of the Warranties shall be construed as a separate warranty, and
          (unless expressly provided to the contrary) shall not be limited by
          the terms of any of the other Warranties or by any other term of this
          agreement.

14.4      The liability of the Seller under the Warranties shall be limited if
          and to the extent that the limitations referred to in schedule 3
          apply.

14.5      The Buyer warrants to the Seller that, as at the Completion Date, it
          will have funding sufficient to satisfy the Purchase Price.

14.6      Seller agrees to indemnify Buyer in the terms set out in Schedule 9
          provided that the maximum liability of the Seller in respect of such
          indemnity shall not exceed the caps indicated in said Schedule 9.

14.7      Without prejudice to any claim or remedy that the Buyer or Buyer's
          Guarantor may have for a Breach of Warranty pursuant to this Agreement
          Buyer and Buyer's Guarantor hereby acknowledge that the
          representations and warranties made by Seller's Guarantor and Seller
          in schedule 2, are made on the basis of similar representations and
          warranties made by Alcatel and Seller pursuant to Section 3 of the SPA
          and the Seller's Guarantor warrants that, to the Best of its Knowledge
          there has been no Breach of the representations and warranties set
          forth in section 3 of the SPA.

15.       NON-COMPETE COVENANT AND PROTECTION OF GOODWILL

15.1      For a period of two (2) years after Completion neither the Seller's
          Guarantor nor the Seller shall carry out or be engaged in or control
          (on its own behalf as well as on behalf of its Related Persons for
          whom it shall be responsible for so long as they remain Related
          Persons) a business competing with MSB. A "business competing with
          MSB" shall mean the substitution or an attempt to substitute, by pin
          and function compatible devices, the MSB Products under development
          pursuant to a customer contract or in volume production as of 14 April
          2002 with any customer of MSB at Completion other than Hewlett
          Packard.

15.2      For a period of two (2) years after the date of this agreement the
          Seller and the Buyer are prohibited (on their own behalf as well as on
          behalf of their respective Related Persons for so long as they remain
          Related Persons) from directly soliciting or encouraging the managers,
          executives or salaried employees of MSB and the Company, respectively,
          to leave their present and future functions within the MSB and the
          Company, respectively, or from recruiting directly or indirectly such
          managers, executives or salaried employees (except for those who
          answer a public advertisement, or those who are approached when they
          are no longer employed by MSB and the Company).

16.       CONFIDENTIAL INFORMATION

16.1      (a)  The Seller (in respect of the MSB Confidential Information) and
               the Buyer (in respect of the Non MSB Confidential Information)
               are prohibited on their own respective behalf (as well as on
               behalf of their Related Persons or of their managers, salaried
               employees or representatives for which the Seller's Guarantor is
               responsible) and without limitation in time, to disclose to any
               person or entity in the case of the Seller, the MSB Confidential
               Information and in the case of the Buyer, the Non MSB
               Confidential Information.

          (b)  The Seller agrees that neither it nor any of its Related Persons
               (or any of their managers, salaried employees or representatives)
               shall disclose or use any MSB Confidential Information other than
               for the purpose of complying with its obligations under this
               Agreement and that all MSB Confidential Information shall be
               destroyed on or before the third anniversary of the date of this
               Agreement.

                                      -22-
<PAGE>
     (c)  The Buyer agrees that neither it nor any of its Related Persons (or
          any of their managers, salaried employees or representatives) shall
          disclose or use any Non MSB Confidential Information other than for
          the purpose of complying with its obligations under this Agreement and
          that all Non MSB Confidential Information shall be destroyed on or
          before the third anniversary of the date of this Agreement.

16.2 Notwithstanding clause 16.1, the Seller and the Buyer may disclose such
     confidential information:

     (a)  if and to the extent required by the law of any relevant jurisdiction;

     (b)  if and to the extent required by any governmental body;

     (c)  if and to the extent required for the purposes of any arbitration
          pursuant to clause 27;

     (d)  to its professional advisers and auditors;

     (e)  if and to the extent that the Buyer has given prior written consent to
          the disclosure;

     (f)  if and to the extent it is in the public domain other than by the
          Seller's breach of clause 16.1;

     (g)  to the providers or prospective providers of equity or debt finance to
          the Buyer or any member of the Buyer's Group or their Representatives;
          or

     (h)  to a proposed purchaser of MSB, the Buyer or any member of the Buyer's
          Group.

17.  ANNOUNCEMENTS

     Any public announcement or similar publicity with respect to this agreement
     or the Transaction Documents shall be issued, if at all, at such time and
     in such manner as Buyer and the Seller's Guarantor mutually determine and
     agree upon. Unless consented to by both Parties or as required by Legal
     Requirements, prior to Completion the Parties shall refrain from making any
     disclosure of this agreement and the Transaction Documents to any person
     other than the respective Representatives (which shall include
     representatives of the Seller), the persons to whose such disclosure is
     required pursuant to the Legal Requirements or to the providers or
     prospective providers of equity or debt finance to the Buyer or any member
     of the Buyer's Group or their Representatives. Buyer and the Seller's
     Guarantor shall consult with each other concerning the means by which MSB's
     customers and suppliers and others having dealings with MSB shall be
     informed of the Contemplated Transactions.

     This clause does not apply to announcements, communications or circulars
     made or sent by the Buyer or by the Seller (including any sent jointly with
     the Seller pursuant to clause 8.1) after Completion to customers, clients
     or suppliers of the Seller and its other business contacts to the extent
     that it informs them of the Buyer's acquisition of the Assets and MSB or to
     any announcements containing only information which has become generally
     available.

18.  ASSIGNMENT

18.1 The Parties acknowledge that this agreement is an intuitu personae
     agreement and that it has been entered into for the sole benefit of the
     Parties and does not give rise to any rights in favour of any other
     individual or entity other than the Parties to this agreement.

18.2 The Buyer may (without the consent of the Seller) assign the benefit of all
     or any of the Seller's obligations or any benefit it enjoys under this
     agreement (i) to any member of the Buyer's Group; provided however that
     such assignment shall not be absolute but shall be expressed to have effect
     only for so long as the assignee remains a member of the Buyer's Group and
     that immediately before ceasing to be a member of the Buyer's Group the
     assignee shall assign the benefit to a member of the

                                      -23-

<PAGE>
     Buyer's Group or (ii) to any person who has provided finance to the Buyer
     or any member of the Buyer's Group. The Buyer's Guarantor shall however
     remain jointly and severally liable with any assignee of the Buyer named in
     (i) or (ii), with respect to such assignee's rights and obligations
     hereunder.

     The sale or transfer of all or part of MSB or the Assets shall not affect
     the liability of the Seller under any provision of this agreement
     whatsoever, except as, and the extent expressly provided in the Agreement
     hereto.

18.3 The Buyer may disclose to a proposed assignee or acquirer of the Buyer
     information in its possession relating to the provisions of this agreement,
     the negotiations relating to this agreement, the subject matter of this
     agreement and the other party which it is necessary to disclose for the
     purposes of the proposed assignment, notwithstanding the provisions of
     clause 16. Further, upon the Buyer entering into an agreement with a third
     party for the sale of all or part of MSB or the Assets or Buyer or any
     member of the Buyer's Group, the Seller shall not unreasonably withhold any
     written consent or assignment required by the Buyer to effect such sale
     provided such consent shall in all events be subject to the terms and
     conditions of this Agreement, as well as to all the provisions of the
     Transaction Documents attached hereto.

19.  COSTS

     Unless expressly otherwise provided in this agreement each of the parties
     shall bear its own legal, accountancy and other costs, charges and expenses
     connected with the sale and purchase of the Assets and MSB.

20.  EFFECT OF COMPLETION

20.1 The articles of this Agreement shall continue in force after and
     notwithstanding Completion.

20.2 The remedies of the Buyer and the Seller in respect of any breach of any
     of the Warranties shall continue to subsist notwithstanding Completion,
     subject to and in accordance with the terms of this Agreement.

21.  ENTIRE AGREEMENT

21.1 This agreement supersedes all prior agreements between the Parties with
     respect to its subject matter and constitutes (along with the documents
     referred to in this agreement a complete and exclusive statement of the
     terms of the agreement between the Parties with respect to its subject
     matter. This agreement may not be amended except by a written agreement
     executed by the Parties.

21.2 Each party on behalf of itself and as agent for each of its Related
     Persons acknowledges and agrees with the other party (each such party
     acting on behalf of itself and as agent for each of its Related Persons)
     that neither it nor any of its Related Persons has been induced to enter
     into any Transaction Document in reliance upon, nor has any such party
     been given, any warranty, representation, statement, assurance, covenant,
     agreement, undertaking, indemnity or commitment of any nature whatsoever
     other than as are expressly set out in the Transaction Documents or as
     included in the Offering Memorandum or the Data Room material made
     available by Alcatel and, to the extent that any of them has been, it
     (acting on behalf of itself and as agent on behalf of each of its Related
     Persons) unconditionally and irrevocably waives any claims, rights or
     remedies which any of them might otherwise have had in relation thereto;

     PROVIDED THAT the provisions of this clause 21 shall not exclude any
     liability which any of the parties or, where appropriate, their Related
     Persons would otherwise have to any other party or, where appropriate, to
     any other party's Related Persons or any right which any of them may have
     in respect

                                      -24-
<PAGE>
      of any statements made fraudulently by any of them prior to the execution
      of this agreement or any rights which any of them may have in respect of
      fraudulent concealment by any of them.

22.   WAIVER

22.1  A waiver of any term, provision or condition of, or consent granted under,
      this agreement shall be effective only if given in writing and signed by
      the waiving or consenting party and then only in the instance and for the
      purpose for which it is given.

22.2  Neither the failure nor any delay by any Party in exercising any right,
      power or privilege under this agreement or the documents referred to in
      this agreement shall operate as a waiver of such right, power or
      privilege, and no single or partial exercise of any such right, power or
      privilege shall preclude any other or further exercise of such right,
      power or privilege or the exercise of any other right, power or privilege.

22.3  The rights and remedies herein provided are cumulative with and not
      exclusive of any rights or remedies provided by law.

23.   INVALIDITY

      If any provision of this agreement is held invalid or unenforceable by any
      court of competent jurisdiction, the other provisions of this agreement
      shall remain in full force and effect. Any provision of this agreement
      held invalid or unenforceable only in part or degree shall remain in full
      force and effect to the extent not held invalid or unenforceable.

24.   NOTICES

24.1  Any notice, demand or other communication given or made under or in
      connection with the matters contemplated by this agreement shall be in
      writing and shall be delivered personally or sent by fax or post (air mail
      if posted to or from a place outside the country of residence of the
      destinee):

      In the case of the Buyer and the Buyer's Guarantor to:

      2300 Buckskin Road
      Pocatello, ID 83201
      USA
      Fax:        001 208 234 6795
      Attention:  President and CEO

      In the case of the Seller to such address as the Seller's Guarantor shall
      notify the Buyer of in writing or as set forth in the Deed of Adherence
      and the Seller's Guarantor to:

      Ronte de Pre-Bois
      20 ICC Bloc A
      1215 Geneva 15
      Switzerland
      Fax:        +41 22 929 5878
      Attention:  General Counsel

      and shall be deemed to have been duly given or made as follows:

      (a)  If personally delivered, upon delivery at the address of the relevant
           party;

      (b)  if sent by post, two Business Days after the date of posting;

                                      -25-

<PAGE>
      (c)  if sent by air mail, three Business Days after the date of posting;
           and

      (d)  if sent by fax, when despatched;

      provided that if, in accordance with the above provisions, any such
      notice, demand or other communication would otherwise be deemed to be
      given or made after 5:00 p.m. on a Business Day such notice, demand or
      other communication shall be deemed to be given or made at 9.00 a.m. on
      the next Business Day.

24.2  A party may notify the other party to this agreement of a change to its
      name, relevant addressee, address or fax number for the purpose of clause
      24.1 provided that such notification shall only be effective on:

      (a)  the date specified in the notification as the date on which the
           change is to take place; or

      (b)  if no date is specified or the date specified is less than five
           Business Days after the date on which notice is given, the date
           falling five Business Days after notice of any such change has been
           given.

25.   ORIGINALS

      This agreement shall be executed in a number equal to the number of
      parties. This agreement shall not take effect until it has been executed
      by the Buyer, the Buyer's Guarantor and the Seller's Guarantor.

26.   GOVERNING LAW AND JURISDICTION

26.1  This agreement (and any dispute, controversy, proceedings or claim of
      whatever nature arising out of or in any way relating to this agreement or
      its formation) shall be governed by and construed in accordance with
      French law. It is expressly agreed that articles L141-1 to 143-23 of the
      French Commercial Code relating to the sale of a business are excluded. In
      addition, mandatory provisions of Belgium law shall apply to this
      Agreement.

26.2  Any dispute or claim arising out of or in connection with this agreement
      shall be finally settled by arbitration, in accordance with the Rules of
      the International Chamber of Commerce ("ICC") then in force (the "Rules")
      and the Parties hereby agree to be bound by such Rules.

26.3  Unless the parties agree upon the appointment of a sole arbitrator, the
      arbitral tribunal shall be composed of three arbitrators, of which one
      shall be appointed by the Buyer, the one shall be appointed by the Seller
      and the third, who shall also be the chairman of the tribunal, appointed
      by the other two arbitrators or, if they are unable to agree, in
      accordance with the Rules.

26.4  The arbitration proceedings shall be conducted in the English language in
      Paris, France. The award shall be rendered in English. Documents and
      briefs exchanged between the Parties, witness auditions shall be
      submitted, in the English language. The exhibits shall however be
      submitted in their original language.

26.5  The arbitral tribunal, when adequately informed of the issues of the
      dispute, shall establish its terms of reference describing such issues.

26.6  The arbitral tribunal shall render its award within six months after
      acceptance of its appointment by the third arbitrator. This delay may be
      extended by mutual agreement of the parties, or by the Court of
      Arbitration of the ICC at the request of one of the Parties, or of the
      arbitral tribunal.

                                      -26-
<PAGE>
26.7      The award shall be final and binding on the parties who hereby waive
          their right to any form of appeal or recourse, insofar as such waiver
          can validly be made.

26.8      The arbitral tribunal shall fix the costs of the arbitration,
          including arbitrators' fees and expenses, and shall decide which of
          the parties shall bear all or a portion of these costs as well as
          other costs incurred by the parties, including costs of experts or
          witnesses and reasonable attorneys' fees.

26.9      Except for conservatory measures, none of the Parties shall be
          entitled to commence or maintain any action in a court of law upon any
          matter in dispute arising from or in relation to this Agreement except
          for the enforcement of an arbitral award granted pursuant to this
          clause. During the period of submission to arbitration and thereafter
          until the granting of the arbitral award, the parties shall, except in
          the event of termination, continue to perform all their obligations
          under this agreement without prejudice to a final adjustment in
          accordance with said award.

26.10     No Party nor the arbitrators may disclose the existence, content or
          results of any arbitration hereunder without the prior written Consent
          of the other parties, except to the extent required for the proper
          organization of the arbitration or the enforcement of the resulting
          award. The provisions contained in this clause shall survive
          termination and/or expiration of this agreement.

27.       SELLER'S GUARANTEE

27.1      In consideration of the Buyer entering into this agreement the
          Seller's Guarantor gives in favour of the Buyer's Guarantor and the
          Buyer exclusively the guarantee in the terms set out in schedule 7.

27.2      The Seller's Guarantor warrants to the Buyer's Guarantor and the Buyer
          in the terms of paragraphs 2 (Organisation) and 3 (Authorisations and
          Proper Execution) of schedule 2, Part A both at the date of this
          agreement and immediately prior to Completion save that references in
          paragraph 2 and 3 to the Seller shall be replaced by appropriate
          references to the Seller's Guarantor.

27.3      The Seller's Guarantor undertakes to procure that, as soon as
          reasonably practical, and in any case forthwith after completion of
          the Alcatel Agreement, the Seller will execute this agreement.

27.4      The Seller's Guarantor agrees that, until the Seller enters into this
          agreement pursuant to clause 27.3 above, the Seller's Guarantor will
          be liable as primary obligor (solidairement) for all obligations of
          the Seller under this agreement.

28.       BUYER'S GUARANTEE

28.1      In consideration of the Seller entering into this agreement the
          Buyer's Guarantor gives in favour of the Seller exclusively the
          guarantee in the terms set out in schedule 8.

28.2      The Buyers Guarantor warrants to the Seller in the terms of paragraphs
          2 (Organsation) and 3 (Authorisations and Proper Execution) of
          schedule 2, Part A both at the date of this agreement and immediately
          prior to Completion save that references in paragraph 2 and 3 to the
          Buyer shall be replaced by appropriate references to the Buyer's
          Guarantor.

                                      -27-
<PAGE>
29.  FOREIGN EQUIVALENCY
     Any reference in this agreement or any of the Transaction Documents to any
     statue, statutory instrument, regulation, by-law or other requirement of
     French or Belgian law and to any French or Belgian legal term for any
     action, remedy, method of judicial proceeding, legal document, legal
     status, procedure, court, official or any legal concept or doctrine or
     other expression shall in respect of any jurisdiction other than France or
     Belgium be deemed to include that which most nearly approximates in that
     jurisdiction to the French or Belgian term (in the context in which that
     term is used in this Agreement on the Transaction Documents).

IN WITNESS whereof this agreement has been executed on the date first above
written.

                                      -28-

<PAGE>

/s/ CHRISTINE KING

Executed as a deed by AMI SEMI CONDUCTOR BELGIUM BVPA represented by Christine
KING for herself as a director and on behalf of the founding shareholders AMI
Semiconductor, Inc. and AMI Acquisition LLC.

/s/ CHRISTINE KING

Executed as a deed by AMI SEMI CONDUCTOR INC

/s/ ALAIN DUTHEIL

Executed as a deed by STMICROELECTRONICS NV
Represented by Alain DUTHEIL, Corporate Vice President
Strategic Planning & Human Resources<PAGE>
                                                                   Exhibit 10.12
                                                                         ST=>AMI

                                                                    CONFIDENTIAL

                        PROFESSIONAL SERVICES AGREEMENT

This Professional Services Agreement (the "Agreement") is made and entered into
as of the date written below (the "Effective Date") by and between AMI
SEMICONDUCTOR INC., a corporation incorporated under the laws of the state of
Delaware, USA, whose chief executive office is located at Buckskin Road 2300,
Pocatello, ID 83201, USA ("CUSTOMER" or AMI), and STMICROELECTRONICS NV, a
company duly organized under the law of The Netherlands, having its registered
office at Strawinskylaan 1725, World Trade Center, Tower B, 17th floor, 1077XX
Amsterdam, acting for the purposes of this Agreement through its Swiss branch,
ICC - Bloc A, 20 route de Pre-Bois, 1215 Geneva 15, Switzerland (the
"CONTRACTOR").

WHEREAS, Pursuant to the terms and conditions of a Business Purchase Agreement
(the "BPA"), dated May 8, 2002 among Contractor, Customer, AMI Semiconductor
Belgium BVBA, a corporation incorporated and existing under the laws of Belgium
("BVBA") and Alcatel Microelectronics NV, a Belgian company ("AME")(which will
become a party to the BPA on the Completion Date (as defined in the BPA)),
Customer and AME are contemporaneously with the execution and delivery of this
Agreement selling to Contractor and certain of its Affiliates the Mixed Signal
Business (the "MSB" as defined in the BPA) of AME.

WHEREAS, for a certain period of time, Customer will require from Contractor the
delivery of certain services (as specified herein) in order to allow AME to
continue its business operations on a continuous, uninterrupted basis following
the sale of MSB to Contractor.

WHEREAS, Contractor is willing to provide those services to Customer and
Customer desires to obtain such services, subject to the terms and conditions
set forth herein.

WHEREAS, Customer and Contractor are contemporaneously with the execution of
this Agreement entering into an Agreement providing for the provision of
services by Customer to Contractor and containing substantially similar terms to
those contained in this Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the covenants
contained herein, Customer and Contractor hereby agree as follows:

1. DEFINITIONS

In this Agreement, unless the context otherwise requires, the following words
and expressions shall have the following meanings:

"AFFILIATE" of a party means a Person owning or controlling a party, or under
the same ownership or control as a party, or owned or controlled by a party, but
only so long as such ownership or control exists. Ownership or control shall
exist through the direct or indirect: (i) ownership of more than 50% of the
Equity Interests and of the Equity Interests generally entitled to vote on
matters submitted to holders of Equity Interests, or (ii) the right by any other
means to elect or appoint a majority of directors, or Persons performing similar
functions.

"CONTRACTOR TECHNOLOGY" means proprietary information and materials in
electronic design automation, CAD or CAE, electronic product manufacturing,
software tools, computer programs and their documentation, computer languages,
methods, methodologies, design flows, cell libraries, algorithms, databases,
mechanical and electronic hardware, electronic components and other materials
and technology owned or controlled by Contractor.

"DELIVERABLES" means the specific materials, devices, products or other
deliverables Contractor provides to Customer as a result of performing Services
and which are specified in the Statement(s) of Work.

"EQUITY INTERESTS" shall mean capital stock, share capital, ordinary or
preference shares, common or preferred stock, general or limited partnership
interests, limited liability company interests or any other interests in any
Person entitling the holder thereof to share in the profits or liquidation value
of a Person.

                                      -1-

<PAGE>
                                                                         ST=>AMI

                                                                    CONFIDENTIAL

"IP RIGHTS" means semiconductor topography rights, mask works rights, patents,
copyrights, trademarks (including service marks), trade secrets, and design
rights, whether registered or unregistered, and including any application for
registration of any of the foregoing and all rights or forms of protection of a
similar nature of having equivalent or similar effect to any of these, which may
subsist anywhere in the world.

"INNOVATIONS" means any invention, discovery, improvement, development or
innovation conceived or developed by Contractor during the term of this
Agreement and in the course of performance of the Services and whether or not
forming part of a Deliverable, including, but not limited to, blocks, database
rights, cells, models, formulas, algorithms, methods, libraries, design flows,
processes, databases, mechanical and electronic hardware, electronic components,
computers and their parts, computer languages, programs and their documentation,
encoding techniques, articles, writings, compositions, works of authorship and
improvements.

"CUSTOMER TECHNOLOGY" means the proprietary information and materials in
electronic design automation, CAD or CAE, electronic product manufacturing,
software tools, computer programs and their documentation, computer languages,
methods, methodologies, design flows, cell libraries, algorithms, databases,
mechanical and electronic hardware, electronic components and other materials
and technology owned or controlled by Customer which Contractor reasonably
requires rights to use in order to perform the Services.

"PERSON" shall include individuals, corporations, companies, partnerships,
trusts, limited liability companies and other entities.

"PROJECT SCHEDULE" means the timetable (including the required end date by which
the projects on the Statement(s) of Work must be completed) relating to the
performance of the Services set out in each Statement of Work.

"SERVICES" means the services described in the Statement(s) of Work.

"RESIDUAL INFORMATION" means ideas, concepts, know-how or techniques related to
the disclosing party's technology that are retained by the unaided memories of
the receiving party's employees who have had access to confidential information
consistent with the terms of this Agreement. An employee's memory will be
considered to be unaided if the employee has not intentionally memorized the
confidential information for the purpose of retaining and subsequently using or
disclosing it. The receiving party's use of Residual Information is subject to
valid patents, copyrights, and semiconductor mask work rights of the disclosing
party.

"STATEMENT(S) OF WORK" means the description of the Services and Deliverables to
be provided hereunder from time to time, which may include single or multiple
Statements of Work.

2.   PROFESSIONAL SERVICES

2.1  Contractor will provide to Customer the Services that are described in a
Statement(s) of Work attached hereto under the terms and conditions of this
Agreement. The parties acknowledge and agree that the Statement(s) of Work
include only the current iteration of products and that Contractor has no
obligation to provide Services relating to future iterations of products (for
purposes of the foregoing an "iteration" shall mean a silicon modification which
implies a mask change from the current design as of the date hereof). Such
Statement(s) of Work may be amended or modified in a writing by both parties
hereto and attached to the Statement(s) of Work, and thereafter, the Services
shall be deemed to include the services described in such supplement or
modification.

Contractor will provide such resources and utilize such employees or design
consultants as specified in the Statement(s) of Work, or in the absence of
specific designation, as Contractor deems necessary, acting in a commercially
reasonable manner, to perform the Services. All work shall be performed at
Contractor's designated facilities specified in the Statement(s) of Work or as
mutually agreed between the parties.

2.2  Customer will provide, if necessary, Contractor with the use of the
Customer Technology.

                                  PAGE 2 OF 14

<PAGE>
                                                                       ST => AMI

                                                                    CONFIDENTIAL

2.3  Contractor shall meet the project schedules, end dates and time of
performance of Services and delivery of Deliverables set forth in the
Statement(s) of Work unless such delay is caused by Customer. Customer agrees to
cooperate in good faith to allow Contractor to achieve completion of Services in
a timely and professional manner. Customer understands and agrees that
Contractor's provision of the Services may depend on completion of certain
Customer tasks or adherence to Customer schedules within Customer's control;
consequently, the project schedule, end dates, time of performance, and Services
may require adjustments or changes in the event such Customer tasks or schedules
change, are modified, or are not completed as anticipated.

2.4  In performing the Services, Contractor shall design, develop and/or make
for Customer the Deliverables as required in the Statement(s) of Work.
Contractor shall ensure that the Deliverables meet the specifications, if any,
set forth in the Statement(s) of Work for such Deliverables. In case Contractor
has reason to believe that any of the foregoing is not going to be met,
Contractor will inform Customer and the Parties will discuss in good faith
reasonable corrective actions.

2.5  If the Deliverables consist of software, then the Deliverables shall be
deemed to include in both source code and object code forms the final version
and all intermediate versions of the software and all routines and subroutines,
as well as all program materials, flowcharts, notes, outlines, work papers and
the like created or developed in connection therewith, the resulting screen
formats and other visual effects of the software, and any formulae, processes,
algorithms, ideas and other information not generally known to the public,
whether or not protected by copyright, developed or generated by Contractor in
the course of performing the Services.

2.6  Contractor is not providing or licensing to Customer any Contractor
software programs or products or other IP Rights or Contractor Technology. In
the event Contractor provides such software or other IP Rights of Contractor
Technology, such tools shall be provided only under the terms of a separate
license agreement or maintenance agreement.

2.7  Unless otherwise set forth in the Statement(s) of Work, Contractor will
undertake a close-out meeting at the conclusion of the Services.

3.   NEW OR RELATED SERVICES

3.1  If in performing the Services Customer require further Services or
Deliverables over and above those specified in the Statement(s) of Work a new
or amended Statement(s) of Work must be agreed to in writing by each of the
Parties.

4.   SERVICE FEES COSTS, AND EXPENSES

4.1  For the Services and Deliverables provided by Contractor, Customer agrees
to pay Contractor a fees equal to the number of hours actually worked in
providing the Services in accordance with the schedule attached as exhibit X
hereto.

provided, however, that the maximum number of hours chargeable by Contractor
for each individual project identified in the Statement(s) of Work shall not
exceed the number of hours specified on such Statement(s) of Work plus an
additional 10% of hours; provided, however, that as stated in Section 2.1,
Contractor has no obligation to provide Services relating to future iterations
of products. For the avoidance of doubt one man week shall be comprised of 40
hours.

4.2  Customer shall reimburse Contractor for all actual, reasonable travel and
out-of-pocket expenses incurred in the course of providing any Services that
must be performed by an employee, consultant or agent of Contractor away from
the facility where such person normally works.

4.3  Customer shall reimburse Contractor for all other material cost and other
out of pocket expenses incurred by Contractor in the course of providing any
Services, including, without limitation, the costs of making any masks or
prototypes.

4.4  If achievement of any project described in the Statement(s) of Work, in
whole or in part, is dependent upon performance or completion of tasks or
provision of technology, specifications, data or other information within the
control of the Customer or by a third party outside Contractor's control, the
applicable required end or delivery dates for a specific project will be
appropriately adjusted to reflect any delay caused by Customer or such third
party not caused by Contractor the effect of which is to delay completion of
such projects in whole or in part.

                                  PAGE 3 OF 14

<PAGE>
                                                                         ST=>AMI
                                                                         -------
                                                                    CONFIDENTIAL

4.5 The amounts payable to Contractor pursuant to this Agreement are exclusive
of any value added tax, sales or use deductions, withholding or other taxes or
governmental charges. Customer shall be responsible for payment of all such
taxes or charges, except for any taxes based solely on Contractor's net income.

5. INVOICING AND PAYMENT

5.1 For each calendar month in which Services are rendered, Contractor shall
submit to Customer an invoice within 15 days of the end of such month specifying
any fees or reimbursable expenses payable hereunder plus any VAT or other tax
related thereto, accompanied by an appropriate level of detail to permit
verification of provision of Services and of such fees and reimbursable
expenses, and the Parties shall supply each other with any supplemental
information relating to the Services or such fees and expenses that is
reasonably requested by either Party.

5.2 Amounts invoiced shall be due and payable by wire transfer of immediately
available funds within thirty (30) days following receipt of such invoice and
supporting evidence.

6. INTELLECTUAL PROPERTY RIGHTS

6.1 Customer hereby grants Contractor a royalty-free, non-exclusive, world-wide
license to use and practice the Customer Technology, and all Customer owned IP
Rights covering such Customer Technology, solely for the purpose and use of
Contractor performing the Services and developing or preparing the Deliverables
solely during the term of this Agreement. Customer represents and warrants that
to the extent Customer provides to Contractor any Customer or third party IP
Rights or Customer Technology hereunder, it has obtained all necessary
permissions, licenses, consents, and has the authority and right, to provide
such technology to Contractor.

6.2 Except as otherwise set forth herein, neither this Agreement, nor the
provision of Services hereunder, shall give either Contractor or Customer any
ownership interest in or rights to the IP Rights or other technology of the
other party. All IP Rights that are owned or controlled by a Party at the
commencement of this Agreement shall remain under the ownership or control of
such party throughout the term of this Agreement and thereafter.

6.3 All right, title, and interest in and to any and all Innovations, generated
or developed by Contractor or Contractor's personnel in the course of performing
this Agreement or any other work performed on Customers' behalf by Contractor or
its personnel, including all IP Rights therein, shall be assigned to and owned
solely by Customer, and all Innovations shall be considered works made by
Contractor and its personnel for hire for the benefit of Customer, and
Contractor shall take all reasonable actions deemed necessary by Customer to
perfect Customer's rights therein. Notwithstanding the foregoing, Customer shall
grant to Contractor a royalty free, worldwide, non-exclusive, non-transferable,
non sub-licensable (except to Contractors' Affiliates) license to use such
Innovations.

6.4 To perfect ownership of Customer IP Rights, Contractor agrees to assign to
Customer all rights Contractor may have in the Customer owned innovations, and
to assist and cooperate with Customer in all reasonable respects, subject to
reasonable availability, (a) in actions to acquire, transfer or maintain such
Customer IP Rights, including executing documents associated therewith, and (b)
in actions of enforcement of such Customer IP Rights, subject to payment by
Customer of all costs incurred by Contractor which are associated therewith.

7. LICENSE GRANT

7.1 Subject to payment in full of the amounts owed to Contractor hereunder and
compliance by the Customer with the terms and conditions hereof, Contractor
grants to Customer and its Affiliates a worldwide, non-exclusive,
non-transferable, perpetual, fully paid, royalty free license under the
Contractor IP Rights incorporated in the Deliverables for the sole purpose of
making, having made, using and selling, having sold the Customer products or
technology described in the applicable Statement of Work. Customer shall have no
rights to sublicense to third parties Contractor IP Rights except as necessary
to allow Customer to make, have made, use or sell the products or technology as
set forth in the applicable Statement of Work.

                                  PAGE 4 OF 14

<PAGE>
                                                                       ST=>AMI

                                                                  Confidential

8.      LIMITED WARRANTIES AND EXCEPTIONS

8.1     Without prejudice to greater service or quality levels specified in the
Statement(s) of Work, Contractor shall use commercially reasonable best efforts
to perform the Services in a professional manner and using reasonable care the
Services will be of substantially the same quality and in substantially the same
manner of the performance as provided by AME prior to the Completion Date, as
defined in the BPA.

8.2     The warranty above is exclusive and in lieu of all other warranties,
whether express, implied, or statutory, including the implied warranties
concerning the Services or the Deliverables of merchantability, reasonable skill
and care, fitness for a particular purpose or non-infringement, which are
expressly disclaimed to the fullest extent permissible by law.

8.3     In order to receive warranty remedies, deficiencies in the Services must
be reported to Contractor in writing within on hundred eighty (180) days from
Contractor's delivery of the final milestone related to the Services subject
matter of a Statement of Work. Customer shall not make any additions, deletions
or modifications to the Deliverables except as specifically set forth in the
Contractor documentation or as authorized in writing by Contractor. Unauthorized
modification of the Deliverables shall cause immediate termination of any
applicable warranty as established above. Customer's sole remedy shall be to
have the deficiencies remedied within a reasonable period of time or to receive
a refund of the pro rata amount of the fees allocated to such Services, at
Contractor's option.

9.      INDEMNIFICATION

9.1     Subject to the provisions of Sections 9.3, 10.0 and 10.2 below
Contractor hereby agrees to indemnify, defend and hold Customer, its Affiliates,
and their respective officers, directors, employees, and agents ("Customer
Indemnitees") harmless from and against any and all liabilities, losses,
damages, legal costs, and legal expenses ("Losses"), and any attorneys' fees
relating to its defense, resulting from any suit or action brought against the
Customer Indemnitees due to, infringement or any third party IP Rights, by
Customer due to the incorporation of any Contractor owned or controlled IP
Rights in any Deliverables or Services. Contractor shall not be obligated to
defend or be liable for Losses if the infringement claim arises out of
compliance with Customer's specifications or requirements, or results from an
addition to or modification by Customer to the Deliverables or the Services, or
the Customer Technology, Customer owned IP Rights, including the IP Rights
therein, or from a combination of the Deliverables or Services provided by
Contractor under this Agreement with other products or items developed or made
by third parties if such infringement would have not existed but for such
combination. Notwithstanding the foregoing, should any Deliverable or Service
become or in Contractor's opinion be likely to become, the subject of any such
suit or action for infringement, Contractor may, at Contractor's option and
expense, (1) procure for Customer the right to continue using such Deliverable
or Service, or (2) replace or modify such Deliverable or Service so that it
becomes non-infringing while still in conformity with the applicable
Statement(s) of Work, which shall extinguish Contractor's obligations hereunder.

9.2     Subject to the provisions of Sections 9.3, 10.1 and 10.2 below, Customer
hereby agrees to indemnify defend and hold Contractor, its Affiliates, and their
respective officers, directors, employees, and agents ("Contractor Indemnitees")
harmless from and against any and all Losses (as defined in Section 9.1 above),
and any attorneys' fees and expenses relating to its defense, resulting from any
suit or action brought against any of the Contractor Indemnitees due to
infringement of any third party IP Rights, by Contractor due to the authorized
use in providing the Services or delivering the Deliverables of any Customer
owned or controlled IP Rights. Provided, however, that Customer shall not be
obligated to defend or be liable for Losses if the infringement claim arises
from an addition to or modification by Contractor of the Customer's owned or
controlled IP Rights, or from a combination of the Customer's owned or
controlled IP Rights with other IP Rights if such infringement would have not
existed but for such combination.

9.3     If any claim or action is commenced against a party entitled to
indemnification under this Section for Losses resulting from such claim or
action (a "Claim"), such party shall give written notice to the other party
within ten (10) days of notice of such Claim. If such party receiving notice is
obligated under this Section to defend the party against such Claim, then the
indemnifying party shall take control of the defense and investigation of the
Claim, using such attorneys and other assistance as it selects in its
discretion. The indemnified party shall cooperate in all reasonable respects in
such investigation and defense, including trial and any appeals, provided that
such party may also participate, at its own expense, in such defense. No
settlement of a Claim that involves a remedy other than payment of money by
indemnifying party shall be agreed to and entered without the consent of the
indemnified party, which consent shall not be unreasonably withheld.

                                  PAGE 5 OF 14
<PAGE>
                                                                         ST=>AMI
                                                                         -------
                                                                    CONFIDENTIAL

9.4  THE FOREGOING SECTIONS 9.1, 9.2 AND 9.3 STATES THE ENTIRE LIABILITY OF
CONTRACTOR AND CUSTOMER AND THEIR RESPECTIVE AFFILIATES AND THE EXCLUSIVE REMEDY
OF CONTRACTOR AND CUSTOMER WITH RESPECT TO INFRINGEMENT, EXCEPT AS EXPRESSLY
STATED IN THESE SECTIONS, ALL WARRANTIES OF NON-INFRINGEMENT OF ANY INTELLECTUAL
PROPERTY RIGHTS ARE HEREBY DISCLAIMED BY CONTRACTOR AND CUSTOMER.

10. LIMITATION OF LIABILITY.

10.1 In no event shall either party be liable under this Agreement for any
special, consequential, incidental, indirect, punitive or exemplary damages, or
lost profits or for the cost of procurement of substitute goods or services,
however caused, whether for breach of warranty, contract, tort negligence,
strict liability or otherwise, even if such party has been advised of the
possibility of such damages.

10.2 Each party's aggregate cumulative liability to the other or Customer
Indemnitees or Contractor Indemnitees, as applicable, arising out of or related
to this Agreement shall not exceed the total amount actually paid by Customer to
Contractor under the applicable Statement(s) of Work, except that the foregoing
limitation in this section 10.2 will not apply in case of willful misconduct or
gross negligence.

11. CONFIDENTIALITY

11.1 During the term of this Agreement, either Party may disclose Confidential
Information (hereafter defined) to the other one. In such case, the following
provisions shall apply. Confidential Information means the terms of this
Agreement as well as any proprietary information and data of either Party,
contained in written or tangible form, which is marked with "Internal Use Only",
"Proprietary", "Confidential", or with other similar words. One Party's
("Disclosing Party") Confidential Information shall also include its
confidential information and data orally disclosed to the other Party
("Receiving Party") if: a reasonable summary of the same is reduced to a writing
and marked with "Proprietary", "Confidential", or with other similar words and
the writing is delivered to the Receiving Party within thirty (30) days of the
first disclosure to the Receiving Party. However, Confidential Information shall
not include any data or information which:

(a) is or becomes publicly available through no fault of the Receiving Party; is
already in the rightful possession of the Receiving Party prior to its receipt
of such data or information;

(b) is independently developed by the Receiving Party;

(c) is rightfully obtained by the Receiving Party from a third party or in the
public domain; is disclosed with the written consent of the Disclosing Party; or

(d) is disclosed pursuant to a valid order or other legal compulsion of a court
or other government body; provided, however, that Receiving Party shall, to the
extent possible: (i) prior to such disclosure promptly notify Disclosing Party
of the requirement and give Disclosing Party the opportunity to object; (ii)
upon disclosure inform the body to which the Confidential Information is
disclosed of its confidential status and shall seek to obtain confidential
treatment of such Confidential Information by such body; and (iii) disclose only
such Confidential Information as is strictly required by such order.

11.2 Each Party undertakes to use the same degree of care as it uses with
respect to its own information of a similar nature to avoid disclosing the
Confidential Information received from the other Party unless the Disclosing
Party previously consented in writing to such disclosure. Notwithstanding the
foregoing, the Receiving Party shall, during the term of this Agreement, and for
a period of three (3) years from the termination or expiration of this
Agreement, hold all Confidential Information of the Disclosing Party received,
in confidence.

11.3 The Parties shall not use the Confidential Information for purposes other
than for the purpose of this Agreement.

11.4 Either Party may disclose any Confidential Information to its and its
Affiliates' employees having the reasonable need for access to such Confidential
Information in connection with or during the performance of this Agreement or
their employment responsibilities and the Parties shall ensure that such
employees comply with the provisions of this Section.

                                  PAGE 6 OF 14
<PAGE>
                                                                       ST => AMI
                                                                       ---------

                                                                    CONFIDENTIAL

11.5 Upon termination or expiration of this Agreement, either Party shall return
to the other party all Confidential Information, whether in written, documentary
or other form, as well as computer programs, software and technical drawings
other than any Confidential Information that is required to be retained under
applicable law or which is necessary to defend against or prosecute any claim
hereunder.

11.6 Neither Party shall in any manner disclose to third parties, advertise or
publish the fact it has entered into or the terms of this Agreement except by
the express written consent of the other Party.

11.7 Notwithstanding the foregoing, either Party may disclose the fact of
entering into this Agreement and its terms (i) to its advisors or to any Person
providing it with finance, subject to such Person agreeing to keep such
information confidential, or (ii) in any prospectus, offering memorandum or
other similar document. Provided, that such disclosure is necessary and provided
that prior to such disclosure the party desiring to disclose shall send to other
party a formal notice indicating that such disclosure is necessary and the
timing of such disclosure.

11.8 The parties acknowledge and agree that they and their respective employees
may utilize for any purpose any Residual Information resulting from performing
the Services or having access to Confidential Information.

11.9 Nothing in this Section 11 shall limit either party's right to
independently develop information, materials, technology, or other products or
services for itself or for others which may compete with the other party or
which may be similar to the Confidential Information, as the case may be, so
long as no unauthorized disclosures have been made by the party during the term
of the confidentiality obligation and there was no unauthorized use of the
Confidential Information in the independent development. Subject to the
limitations placed on Contractor by the confidentiality provisions of this
Agreement, Contractor may in its sole discretion develop, use, market, license,
offer for sale, or sell any software, application, or product that is similar or
related to that which was developed by Contractor for Customer hereunder.

11.10 Each party acknowledges that unauthorized disclosure or use of the
Confidential Information may cause irreparable harm to the other party for which
recovery of money damages would be inadequate, and the other party shall
therefore be entitled to obtain timely injunctive relief to protect its rights
under this Agreement, in addition to any and all remedies available at law.

12.  TERM AND TERMINATION

12.1 This Agreement commences on the Effective Date and, unless terminated
earlier pursuant to the terms of this Agreement, shall continue in force until
completion of the Services, provided, however, subject to Contractor reasonable
prior notice to Customer, the Agreement shall automatically terminate no later
than the certain date indicated in the Statement of Work, if Contractor after
having used reasonable effort is unable to complete the Services. A party shall
have the right to terminate this Agreement at any time upon or after the filing
by or against the other party of a petition in bankruptcy or insolvency, or upon
or after the appointment of a receiver for all or substantially all the property
of the other party unless such receivership is terminated or petition dismissed
without prejudice within thirty (30) days, or upon or after the making by the
other party or any proceedings for the liquidation or winding up of its
business, or for the termination of its corporate charter; and upon exercise of
such right, this Agreement shall terminate fifteen (15) days after notice in
writing to that effect has been given by the party to the other party.

12.2 This Agreement or any Statement of Work hereunder may be terminated by
either party upon thirty (30) days prior written notice if the other party
materially breaches or fails to perform any material term hereof or in the
applicable Statement of Work, respectively, and the breaching party fails to
cure such breach within the thirty (30) day period.

12.3 Each party's obligations under Sections 4, 5, 6, 7, 8, 9, 10, 11, 12, 14,
15 and 16 of the Agreement shall survive termination or expiration of the
Agreement.

                                  PAGE 7 OF 14
<PAGE>
                                                                       ST => AMI
                                                                    CONFIDENTIAL

13.  INDEPENDENT CONTRACTORS

Contractor shall perform the Services as an independent contractor and nothing
contained in this Agreement shall be construed to create or imply a joint
venture, partnership, principal-agent or employment relationship between the
parties. Neither party shall take any action or permit any action to be taken
on its behalf which purports to be done in the name of or on behalf of the
other party and shall have no power or authority to bind the other party to
assume or create any obligation or responsibility express or implied on the
other party's behalf or in its name, nor shall such party represent to any one
that it has such power or authority.

14.  GOVERNING LAW

This Agreement will be governed by the laws of France. This Agreement is
prepared and executed and shall be interpreted in the English language only,
and no translation of the Agreement into another language shall have any
effect. The parties agree that the United Nations Convention on Contracts for
the International Sale of Goods (1980) is specifically excluded from and shall
not apply to this Agreement.

15.  DISPUTE RESOLUTION

Any dispute arising out of this Agreement shall be conducted in accordance with
clauses 27.2 through 27.10, inclusive, of the Business Purchase Agreement
executed among AMI Semiconductor Inc., Contractor and Customer and dated May
8th 2002.

16.  MISCELLANEOUS

16.1 NOTICES. Notices to be given or submitted by either party to other
pursuant to this Agreement shall be in writing and directed in the case of the
Customer to the address above, attention: General Counsel, and in the case of
Contractor to the address above, attention: Legal Counsel.

16.2 SEVERABILITY. If any term or provision of this Agreement is determined to
be invalid or unenforceable for any reason, it shall be adjusted rather than
voided, if possible, to achieve the intent of the parties to the fullest extent
possible. In any event, all other terms and provisions shall be deemed valid
and enforceable to the maximum extent possible.

16.3 FORCE MAJEURE. Neither Party shall be liable for the non-performance of any
of their obligations hereunder, if and to the extent only that such
non-performance is caused by an event of force majeure, which means acts of God,
war, war-like condition, embargoes, riots and other unforeseen events beyond
their reasonable control and which cannot be prevented. To the extent possible,
in the event that such failure or delay occurs, the affected Party shall notify
in writing the other Party of the occurrence thereof as soon as possible and the
Parties shall discuss the best way to resolve the event of force majeure.

16.4 Performance of all affected Services shall be made on a revised schedule
(to be mutually agreed upon), that shall, at least, take into account the delay
incurred.

16.5 By reason solely of force majeure neither Party shall have any claim for
relief or other damages against the other Party in respect of such delay in
performance or non-performance.

16.6 AUTHORIZATION. This Agreement and any supplement to it shall be binding on
the parties only after acceptance by officers or authorized representatives of
Contractor and Customer.

                                  PAGE 8 OF 14
<PAGE>
                                                                       ST => AMI
                                                                    CONFIDENTIAL

16.7  ASSIGNMENT. Unless for a given project a designated sub-contractor has
been mutually agreed between the Parties and specifically identified in writing
in the relevant Statement of Work, neither party shall assign any portion of its
rights, duties, or obligations under this Agreement and any attempt to do so
shall be void unless the other party gives its approval to the assignment after
receiving written notification. The approval itself must also be in writing and
sent by certified or registered mail or courier service to the party seeking
assignment. As used in this Agreement, the following shall be deemed an
assignment: (1) any dissolution, merger, consolidation, or other reorganization
of or affecting the Customer, whether or not Customer is the surviving corporate
entity; and (2) the sale or transfer, by one or more transactions, of stock
possessing more than fifty percent (50%) of the total combined voting power of
all classes of Customer's capital stock issued, outstanding and entitled to vote
for the election of its directors.

16.8  COMPLETE AGREEMENT. Customer acknowledges that it has read, understands
and agrees to be bound by this Agreement, and that this Agreement including the
attached Statement(s) of Work, are the complete and exclusive statement of the
agreement between the parties regarding the subject matter hereof, which
supersedes all proposals, oral or written, all other communications between the
parties relating to such subject matter. In the event of any conflict between
the Agreement and a Statement of Work or any subsequent attachment hereto, the
terms of this Agreement shall control.

16.9  MODIFICATION. This Agreement and any term of a Statement of Work may be
modified only by a written instrument duly executed by an authorized
representative of Contractor and Customer.

16.10 NO WAIVER. The failure of a party to enforce any provision of this
Agreement shall not constitute a waiver of such provision or the right of such
party to enforce such provision or any other provision.

16.11 INTERPRETATION. In construing or interpreting this Agreement, the word
"or" shall mean either or both, and the word "including" shall not be limiting
or exclusive. This Agreement shall be fairly interpreted in accordance with its
terms without any strict construction in favor of or against either party and
ambiguities shall not be interpreted against the drafting party.

                                  PAGE 9 OF 14

<PAGE>
                                                                       ST => AMI
                                                                    CONFIDENTIAL

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Effective Date

EXECUTED BY STMICROELECTRONICS NV:

Signature: /s/ Francois Guibert
          -----------------------------------------------
Name: FRANCOIS GUIBERT
     ----------------------------------------------------

Title:
      ---------------------------------------------------

Date:  26 June 2002
      ---------------------------------------------------

EXECUTED BY AMI SEMICONDUCTOR INC.

Signature: /s/ Christine King
          -----------------------------------------------
Name: CHRISTINE KING
     ----------------------------------------------------

Title: PRESIDENT & CEO
      ---------------------------------------------------

Date:  June 26, 2002
      ---------------------------------------------------

                                 PAGE 10 OF 14
<PAGE>
                                                                       ST => AMI
                                                                    Confidential

                                   EXHIBIT Z

TSA REQUIREMENTS - SERVICES REQUIRED BY AMI-S FROM STM - PRODUCT DEVELOPMENT -
REVISION 4.0 - JUNE 6, 2002

TSA DETAILS TO FINISH COMMITTED TELECOM ASIC PROJECTS & CAD ACTIVITIES SUPPORT

<Table>
<Caption>
----------------------------------------------------------------------------------------------------------------------------------
PROJECT  STATUS                 WORK DESCRIPTION       RESOURCE               LOCATION           DELIVERABLE        MW    END DATE
----------------------------------------------------------------------------------------------------------------------------------
<S>      <C>                    <C>                    <C>                    <C>                <C>                <C>   <C>
CIVA     Customer evaluation    Support RD/R1          Francesco Cretti       Milan              note 1               2      02/52
----------------------------------------------------------------------------------------------------------------------------------
CRIA     Customer evaluation    Support RD/R1          Faruk Donmez           Istanbul           note 1              10      02/52
                                Support RD/R1          Asil Arsian            Istanbul           note 1               2      02/52
                                Support RD/R1          Francesco Cretti       Milan              note 1               4      02/52
----------------------------------------------------------------------------------------------------------------------------------
MARB     Customer evaluation    Support RD/R1          Stefano Lorenzini      Milan              note 1               4      02/52
                                Support RD/R1          Asil Arsian            Istanbul           note 1               2      02/52
----------------------------------------------------------------------------------------------------------------------------------
GLIA     Customer evaluation    Support RD/R1          Allessandro Ingrazie   Padova             note 1               2      02/52
----------------------------------------------------------------------------------------------------------------------------------
TNIA     RD                     Support R1             Glanvito Lorusso       Milan              note 1               1      02/28
----------------------------------------------------------------------------------------------------------------------------------
TSMA     ???Illegible???        Support RD/R1          Leveni Ergun           Istanbul           note 1               4      02/39
         Improvement            Support RD/R1          Marco Zanata           Milan              note 1               1      02/39
----------------------------------------------------------------------------------------------------------------------------------
PESA     Design ongoing         design support, RD/R1  Calogero Timineri      Milan              note 1              11      02/36
                                RD/R1                  Calogero Timineri      Milan              note 1               2      03/05
----------------------------------------------------------------------------------------------------------------------------------
FLMA     Design ongoing         Design iteration 1     Illker Ertylmaz        Istanbul           tested prototypes,
                                                                                                 note 1                      02/40
                                Design iteration 1     Zeynep Toprok          Istanbul           tested prototypes,
                                                                                                 note 1                      02/40
                                Design iteration 1     Alper Durak            Istanbul           tested prototypes,
                                                                                                 note 1                      02/40
                                Design iteration 1     Turan Solmaz           Istanbul           tested prototypes,
                                                                                                 note 1                      02/40
                                Design iteration 1     Erdem Karaadam         Istanbul           tested prototypes,
                                                                                                 note 1                      02/30
                                Design iteration 1     Total Manpower         Istanbul           tested prototypes,
                                                                                                 note 1              40      02/40
                                Support measurements
                                iteration 1            Turan Solmaz           Istanbul           tested prototypes,
                                                                                                 note 1               4      02/52
         METAL FIX ONLY         Design iteration 2     Turan Solmaz           Istanbul           tested prototype 2,
                                                                                                 note 1               4      03/04
         METAL FIX ONLY         Support measurements
                                iteration 2            Turan Solmaz           Istanbul           note 1               3      03/17
----------------------------------------------------------------------------------------------------------------------------------
CARA     Design ongoing         Design support for
                                debug                  Milan team             Milan              note 1, note 3
                                Design support for
                                debug high speed part  Istanbul team          Istanbul           note 1, note 3
                                Design support,
                                STA, ATPG              Milan team             Milan              note 1, note 3
                                P&R                    P&R team               Brussels           note 1, note 3      13      02/52
                                Support RD/R1          D. De Gennaro          Milan              note 1, note 3      13      02/52
----------------------------------------------------------------------------------------------------------------------------------
IRIA     RD                     Support R1             Jerome Pichon          Velizy             note 1               1      02/39
                                Support R1             Asil Arsian            Istanbul           note 1               1      02/39
----------------------------------------------------------------------------  ----------        --------------------------
OSIA     RD                     Support R1             Jerome Pichon          Velizy             note 1               1      02/39
                                Support R1             Asil Arsian            Istanbul           note 1               1      02/39
----------------------------------------------------------------------------------------------------------------------------------
BIBA     Customer evaluation    Support RD/R1          Jerome Pichon          Velizy             note 1               1      02/39
----------------------------------------------------------------------------------------------------------------------------------
</Table>

                                 PAGE 11 OF 14
<PAGE>
                                                                   ST => AMI

                                                                 CONFIDENTIAL

<Table>
<Caption>

Project        Status                Work description                                              Resource               Location
------------   -------------------   ---------------------                                         ---------------        --------
<S>            <C>                   <C>                                                           <C>                    <C>

                                     Support RO/R1                                                 Asli Arslan            Istanbul
BIBB           Customer evaluation   Support RO/R1                                                 Alain Morand           Velizy
                                     Support RO/R1                                                 Asli Arslan            Istanbul
MRUC           Customer evaluation   Support RO/R1                                                 Alain Morand           Velizy
MRUD           Start                 design support, RO/R1                                         Alain Morand           Velizy
RG1A           R1                    Yield optimization support                                    Jerome Pichon          Velizy
XBUB           Customer evaluation   Support RO/R1                                                 Alain Morand           Velizy

Misc Velizy                          Database transfer                                             All project leaders    Velizy
Misc Milan                           Database transfer                                             All project leaders    Milan
Misc Istanbul                        Database transfer                                             All project leaders    Istanbul

Misc Istanbul                        Knowledge transfer high speed code                            All project leaders    Istanbul
Misc Velizy                          Management                                                    Ludovic (Illegible)    Velizy
Misc Milan                           Management                                                    Pierpaolo Pomati       Milan
Misc Istanbul                        Management                                                    Asil Arslan            Istanbul

                                     General support on ADS
                                     * no new script of new loadflow developments
                                     - more help on fixing AME design kit problems where
                                     the knowledge is originally with people transferred to ST
                                     and where due to the specificity of the problem it is not
CAD                                  possible to transfer the knowledge before closing             All ST CAD team        Brussels
CAD                                                                                                All ST CAD team        Brussels

</Table>

<Table>
<Caption>

Deliverable                                    MW      End Date
---------------------------                    --      --------
<C>                                            <C>     <C>

BIBB           note 1                           1      02/39
MRUC           note 1                           2      02/39
MRUD           note 1                           1      02/39
RG1A           note 1                           1      02/39
XBUB           note 1                           4      02/39
Misc Velizy    note 1                           1      02/39
Misc Milan     note 1                           1      02/39

Misc Istanbul  all database transferred (")     1      02/39
Misc Istanbul  all database transferred (")     1      02/38
Misc Velizy    all database transferred (")     1      02/39
Misc Milan     all database transferred (")*
Misc Istanbul  training done                    4      02/43
                                                2      02/52
                                                2      02/52
                                                4      02/52

               note 2                          11      02/52
               note 2                          11      03/26

</Table>

(") Full database transfer (Test benches and vectors, basic coverage,
    VHDL/Verlog code, microarchitecture and any other component of end ADB
    database)

NOTES:

1) Give support on actions related to R0 or R1. Support questions can be handled
in the remote location. Support questions can include questions related to (but
not limited to) CPK 8 Instability (support from design but ownership of
engineering). ESD questions, instructions, valid. It could be possible that data
need to be looked up in the design database or that basic simulations need to be
redone. The leadtime to answer should not exceed 2 working days. If the answer
can not be provided in 2 working days a planning to give the answer must be
provided. The total support manpower can not exceed the manpower in the MW
column, the support will not extend the "End Date" column. If support reaches R1
status, no support will be asked.

2) Give support on questions related to the AME design kit. Support questions
can be handled in the remote location. Support questions can include questions
related to (but not limited to) scripts for the analog and digital endorsements,
bonding editor, Place and Route environment, transferred or licensed BT Monitors
and compilers. The leadtime to answer should not exceed 2 working days. If the
answer can not be provided in 2 working days a planning to give the answer must
be provided. The total support manpower can not exceed the manpower in the MW
column, the support will not extend the "End Date" column.

3) For Care project S7 will provide on request new memory cut coming from his
own memory generator.

                                 PAGE 12 OF 14
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                                                                    CONFIDENTIAL

<Caption>
<Table>
TBA DETAILS TO FINISH COMMITTED PABU PROJECTS & TO SUPPORT PAE ACTIVITIES FROM VALLAY.
----------------------------------------------------------------------------------
<S>            <C>              <C>                                 <C>                <C>       <C>           <C>  <C>
Project        Status           Work  description                   Resources          Location  Deliverable    MW  End Date
----------------------------------------------------------------------------------------------------------------------------
SEBA           In design        Transfer of the digital
                                  to O. Jacquemart                  A.C. Chanveau      Velizy       [**]         3     02/28
----------------------------------------------------------------------------------------------------------------------------
MAFA           In design        Transfer of the digital
                                   to X. Alonso                     J. Pichon          Velizy       [**]         4     02/30
----------------------------------------------------------------------------------------------------------------------------
AFCB           ROM updates >RO  Transfer of the digital database
                                   to F. Valentin                   A. Morand          Velizy       [**]         2     02/29
----------------------------------------------------------------------------------------------------------------------------
LEDA           In design        Transfer digital sign-off database
                                   to F. Valentin                   C. Guillet (subc)  Velizy       [**]         3     02/29
----------------------------------------------------------------------------------------------------------------------------
Subcontractor                   The 3 subcontractors in Vallay      C. Guillet,        Velizy      Letter to
a on LIN                           must stay with AMI-5             G. Billon and                  subcontractor
                                                                    P. Amaud                       signed by ST
----------------------------------------------------------------------------------------------------------------------------
</Table>

Note: the design support as depicted in this table extends to week 230. It
requires cooperation between engineers in Velizy and Zaventem and
availability of AMI CAD tool's on ST site

    (**) 1) Project overview
         2) list of remaining actions to go to production
         3) Full database transfer (Test benches and vectors, fast coverages,
            VHDL/Verilog code, Microarchitecture and any other component
            of the CAD database)

<Caption>
<Table>
TSA DETAILS TO FINISH COMMITTED PROJECTS ON SHPOTS, ISON AMD BATTERY MANAGEMENT
----------------------------------------------------------------------------------
<S>            <C>              <C>                               <C>              <C>           <C>           <C>  <C>
Project        Status           Work Description                   Resources        Location     Deliverable    MW  End Date
----------------------------------------------------------------------------------------------------------------------------
SHPOTS         In               Support                            Stefan
               qualification                                       Vanhaeverbeke   Zaventem       [**]          2     02/52
----------------------------------------------------------------------------------------------------------------------------
ISDN           In qualification Support                            Stefan
                                                                   Vanhaeverbeke   Zaventem       [**]          2     02/52
----------------------------------------------------------------------------------------------------------------------------
ISDN PTI       off hook CLIP     support/pay subcontractor to        subc. Dave    Mechelen       [**]          1     02/50
               for obligation      solve contractual obligation      Buckingham
               in PTI project      to PTI
----------------------------------------------------------------------------------------------------------------------------
</Table>

    (**) 1) Project overview
         2) Full database transfer (Test benches and vectors, fast coverage,
            VHDL/Verilog code, Microarchitecture and any other component of
            the CAD database)

-- end of table --

                                 PAGE 13 OF 14

<PAGE>
                                                                       ST => AMI

                                                                    CONFIDENTIAL

                                   EXHIBIT X

PRICING OF ENGINEERING SERVICES

Pricing will be according to the following rules

          Service                  Price per hour
          ---------------------------------------
          Engineering                     80 Euro
          Product engineering             92 Euro
          Test engineering               110 Euro

- Out of pocket expenses (e.g. traveling, materials, silicon, packaging) are to
  be reimbursed separately on a cost basis.
- These prices will be applied to the effective hours worked. If the effective
  hours worked exceed the forecast of the Exhibit Z by more than 10%, no
  additional compensation for the completion of the work will be due.
- Exhibit Z provides the forecast assuming that one design iteration is
  performed for each product (for product C174 an additional iteration called
  OBB is undergoing).
- Parties may agree for services on additional design iterations: in any such
  case the pricing will be according to the rules set in this exhibit.
- A design iteration is defined as: "Every Silicon Modification which implies a
  Mask Change from the current design as of the date hereof".

                                 PAGE 14 OF 14

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