Document:

<PAGE>
                                                                   EXHIBIT 10.32

                                                           LSI LOGIC CORPORATION
                                                        ASIC TERMS OF ENGAGEMENT

These Terms of Engagement define the requirements and procedures that LSI and
the Customer agree will govern all stages in the development and production of
one or more ASIC devices subject to the attached ASIC Development Proposal.

1.   PROJECT PARAMETERS

     1.1  Engineering Activities. The engineering activities relating to the
          ASIC(s) covered by the attached ASIC Development Proposal (the
          "Product") and applicable conditions are stipulated in the attached
          Statement of Work ("SOW"). Each party will exercise reasonable
          diligence and apply industry standard engineering practices to
          perform, their designated responsibilities. In addition, each party
          will cooperate with the other party for the timely achievement of
          project milestones.

     1.2  Design Operating Rules. Customer specifications supplied by Customer
          to LSI for use in the design of the Product will be compatible with
          LSI's FlexStream(R) design system by which LSI will verify all design
          and engineering work. Customer and LSI mutually acknowledge that all
          design milestones and schedules for deliverables are estimates only.
          Customer and LSI will indicate in writing acceptance of the
          completion of each milestone in conformity with the SOW.

     1.3  Design Changes. LSI will exercise reasonable efforts to accommodate
          Customer's requests for changes to the SOW and/or the design of the
          Product at such times during the performance of the SOW where such
          charges are practicable. Such requests will be submitted to LSI in
          writing, whereupon LSI will promptly evaluate such requests and
          inform Customer of the possible effects on the SOW, including (i)
          the effect upon the original schedule for completion of the
          engineering activities caused by the requested changes, (ii) the
          effect on the Development Engineering Charge ("Charge") for the
          Product, (iii) the effect on production unit pricing due to die size,
          package, or other changes, and (iv) such other factors as LSI
          believes to be relevant. Unless the parties agree otherwise following
          evaluation of any such request, the parties will continue their
          respective activities under the SOW pending agreement to modify the
          SOW.

     1.4  Prototype Release. Upon completion of the engineering milestones
          specified in the SOW, LSI will manufacture and deliver 20 prototypes
          to Customer. Customer acknowledges that prototypes are delivered and
          intended for evaluation purposes only and are not intended for other
          use in or resale for use in any system or application. LSI will ship
          prototypes on a timely basis in accordance with LSI's then-current
          prototype shipment schedule.

     1.5  Prototype Approval. Customer will promptly evaluate the prototypes
          and advise LSI whether Customer agrees that the prototypes conform to
          the agreed upon specifications for the Product. If Customer concludes
          that the prototypes are conforming, then Customer will sign and
          submit to LSI a Prototype Approval Form as shown in Exhibit B. If
          Customer concludes that the prototypes do not conform to such
          specifications for the Product, Customer will fully describe all
          perceived deficiencies in writing to LSI within 30 days of delivery
          of the prototypes. In such event, Customer and LSI will cooperate to
          resolve and, as appropriate, to develop and implement a plan of
          corrective action to remedy all perceived defects in the Product. LSI
          will not commence production of the Product until after it receives
          written confirmation of prototype acceptance from Customer. A
          purchase order for production units does not substitute for written
          confirmation of prototype acceptance by Customer.

     1.6  Product Rework. If additional engineering work is deemed necessary to
          complete the Product, the parties will contribute additional
          resources as mutually agreed. Product rework includes the following:

          1.6.1  Product redesign. A Product redesign is a modification of the
                 Product either before or after prototypes have been delivered
                 to Customer, whereby Customer desires to change the
                 functionality or performance of the Product and receive new
                 Prototypes prior to production release. In this case, Customer
                 and LSI will agree upon and generate a new SOW. LSI will
                 evaluate the SOW and determine the new Charge to be paid by
                 Customer and any potential change in Product price as a result
                 of die size, package or other changes.

LSI LOGIC CONFIDENTIAL                 1                           TERMS OF SALE

<PAGE>
          1.6.2  Production respin. A Product respin is a redesign of the
                 Product due to a deficiency in the initial design of the
                 Product substantially caused by LSI as evidenced in the
                 prototypes. If a prototype fails as a result of an error
                 believed to be caused by LSI, Customer will fully describe to
                 LSI the perceived deficiency in writing within 30 days of
                 delivery of the prototypes. LSI will be given adequate time and
                 opportunity to evaluate the information provided by Customer
                 and to verify and perceived deficiency. If LSI agrees that such
                 error is the responsibility of LSI, LSI will correct the
                 problem and be liable for the cost of the respin. If Customer
                 decides to modify the functionality or performance of the
                 Product during the respin process, the parties will generate a
                 new SOW. Customer will be liable for additional Charges and for
                 revised Product pricing that may occur as a result of such
                 design change.

     1.7  Preproduction Orders. Any Product shipped over and above the initial
          Prototype quantities prior to the confirmation of approval of the
          Product by Customer is "Preproduction" product. Preproduction product
          will be subject to terms separately agreed upon by the parties.
          Customer acknowledges that preproduction product is manufactured
          solely as an accommodation to Customer. Preproduction product is not
          fully qualified, and therefore is not covered by any warranty. The
          Customer assumes full financial liability for preproduction product,
          without regard to issues of design or performance. LSI disclaims all
          liability with respect to the performance of preproduction product,
          including possible design errors by LSI.

     1.8  Production Orders. Customer will notify LSI by means of a purchase
          order when the Product may be started in production. All production
          product will be subject to the Terms of Sale in Exhibit C. Customer
          may purchase quantities of Product designed hereunder from LSI from
          time-to-time in accordance with Customer's needs and pursuant to the
          terms and conditions agreed upon by the parties herein. Prior to
          discontinuing manufacture of the Product, LSI will notify Customer,
          allowing one year to place a final order for delivery within 18 months
          of such notice.

2. SHARED DEVELOPMENT ENGINEERING COSTS AND CHARGES

     2.1  Product Costs. The initial estimated costs for development of the
          Product are noted in the ASIC Development Proposal for the requested
          Product. Each ASIC Development Proposal stipulates total LSI costs as
          well as charges to Customer. In cases where development costs to LSI
          exceed the charge to Customer, it will be so noted on the ASIC
          Development Proposal as "LSI Contribution to the Development". This
          format will be proposed as Shared Development Engineering Costs and
          Charges to Customer.

     2.2  Adjustments to Product Costs. Except as otherwise provided, LSI will
          assume the risk of cost increases incurred by LSI beyond the initial
          quotation, subject to there being no change in the agreed upon
          assumptions for such estimates. If Customer makes any change to the
          specification and/or the SOW for the Product that affects such
          assumptions or otherwise causes an increase in LSI's quoted costs, LSI
          will make an appropriate determination of such increased costs to be
          borne by Customer and will notify Customer thereof. Customer
          acceptance of any such determination will be presumed unless Customer
          has notified LSI to the contrary in writing within ten days
          thereafter. If Customer does not accept such increased costs, the
          parties will mutually determine the future status of the project.

     2.3  Shared Development Milestone Payments. Customer will pay applicable
          Charges to LSI in accordance with the following schedule of
          milestones:

          <Table>
          <S>                                     <C>
          At Placement of Order ("APO")           10%
          Initial Netlist Review ("INR")          10%
          Placement Timing Review ("PTR")         30%
          Final Design Review ("FDR")             30%
          Test Program Gen/Proto Ship ("TPR")     20%
          </Table>

          Successful completion of such milestones will entitle LSI to receipt
          of such contributions and to invoice Customer therefor. Payment terms
          are net 30 days from invoice date. Customer will be responsible for
          any and all applicable taxes associated with such payments.

LSI LOGIC CONFIDENTIAL                 2                           TERMS OF SALE
<PAGE>

3.   DESIGN CANCELLATIONS

Prior to the delivery of prototypes, Customer may cancel the design and
engineering work under the SOW for the Product by written notice to LSI,
whereupon LSI will cease work in connection with the Product and invoice
Customer for a percentage of the total Shared Development Engineering Charges
specified below through the next applicable milestone. The payment terms are
net 30 days from invoice date.

<Table>
<Caption>
NOTICE OF CANCELLATION RECEIVED BY LSI                                               DESIGN CANCELLATION FEE
                                                                                     (cumulative %)
<S>                                                                                  <C>
After Design Kick-off Review but before First Netlist Review                         20%
After Initial Netlist Review but before Trial Layout Review                          50%
After Trial Layout Review but before Placement & Timing Review                       60%
After Placement & Timing Review but before Final Design Review                       80%
After Final Design Review but before Program Release and Prototype Shipment          90%
After Program Release & Prototype Shipment but before Prototype Approval Review      100%
After Prototype Approval Review                                                      100%
</Table>

4.   INTELLECTUAL PROPERTY

     4.1  Exchange of Intellectual Property. Each party may release
          intellectual property to the other party for purposes of performing
          the design and engineering activities stipulated in the SOW. All
          intellectual property released hereunder will be in accordance with
          the terms of the Intellectual Property Release Form in Exhibit A.

     4.2  Releases to EDA Vendors. LSI's flexStream(R) design system utilizes
          certain third-party EDA tools in addition to LSI's proprietary tools.
          In order to resolve a design-specific bug in a third-party tool, LSI
          may need to send test cases derived from a customer design ("Test
          Cases") to a certain EDA vendor. In order for LSI to do this
          efficiently and expediently, and to minimize delays in completing the
          design, LSI will provide Test Cases to the appropriate EDA vendor
          from time-to-time as necessary. LSI will deliver Test Cases to the
          EDA vendor only when design-specific bugs are found. Prior to the
          release of Test Cases, LSI will have in place a confidentiality
          agreement with the applicable EDA vendor that requires the EDA vendor
          to protect the confidential and proprietary information of Customer.
          Before of Agreement is exercised, Gadzoox must be notified in writing.

     4.3  Special Tooling and Data. Subject to Section 4.4 below, LSI agrees
          not to use specifications provided by Customer or any customized ASIC
          netlist, database, test vectors, or tooling generated exclusively for
          the Product in the course of development other than for the
          manufacture of the Product on behalf of Customer. Customer
          acknowledges and agrees that place and route data, database tapes,
          mask sets, and other customized data relating to the Product contain
          proprietary information of LSI and Customer, and such materials will
          therefore remain in the custody of LSI at all times, except as is
          noted above in 4.2 above. Upon request of Customer, however, LSI will
          destroy such materials produced for Customer and provide
          certification thereof.

     4.4  Intellectual Property Rights. LSI or its licensors will own and
          retain all intellectual property rights (including, without
          limitation, mask work rights) associated with any and all circuitry
          design components and process technology furnished by LSI in
          connection with the design, development, or manufacture of the
          Product, including, but, not limited to, (i) all base-array layers,
          (ii) all library elements (including any design cores, SPICE models,
          megafunctions or macrocells furnished to Customer), and (iii) all
          modifications of any such library elements ((i), (ii), (iii)
          collectively as "LSI Elements"). Customer will own and retain all
          intellectual property rights in (i) all intellectual property
          furnished to LSI by Customer, including specifications provided by
          Customer, and (ii) the mask work rights subsisting in the Product as
          a whole, subject to LSI's ownership of the mask work rights
          subsisting in the LSI Elements.

     4.5  Inventions. LSI will own any process, pattern, device, or other
          invention discovered by LSI in the course of performing this
          Agreement. If Customer discovers any process, pattern, device, or
          other invention in the course of designing or developing the Product,
          LSI will automatically acquire a fully paid, perpetual, worldwide
          license to use such invention in connection with manufacture of the
          Product. The parties will be deemed joint owners of any invention
          that is jointly discovered.

LSI LOGIC CONFIDENTIAL                 3                           TERMS OF SALE

<PAGE>
5. CONFIDENTIAL INFORMATION

Each party acknowledges that materials received from the other party may be
considered confidential and proprietary ("Confidential Information").
Confidential information may be furnished in any tangible or intangible form
including, but not limited to, writings, drawings, computer tapes and other
electronic media, email, samples, and verbal communications. Any information
disclosed by one party to the other by any of the foregoing means which would
ordinarily be regarded as confidential in the course of business will be deemed
Confidential Information. Neither party will disclose such information to any
third party without the prior written consent of the other party. Each party
will protect such information from disclosure to others with at least the same
degree of care as such party exercises to protect its own information of
similar type and importance, but in no event with less than reasonable care.
These obligations of confidentiality will survive the expiration, termination,
or cancellation of this Agreement for a period of three (3) years; provided,
however, the obligation of confidentiality will not apply, or will cease to
apply, to any information which:

     (a)  was known to the receiving party prior to its receipt hereunder;

     (b)  is or becomes publicly available without breach of this Agreement;

     (c)  is received from another party without an obligation of
          confidentiality to the disclosing party and without breach of this
          Agreement;

     (d)  is disclosed by the disclosing party to another party without an
          obligation of confidentiality;

     (e)  is developed independently by employees of the receiving party not
          having access to such information; or

     (f)  is disclosed by the receiving party pursuant to court order provided
          that the originally disclosing party is given a reasonable opportunity
          to object to or restrict such disclosure requirement to the extent
          practicable, and then such disclosure will be permitted only subject
          to the terms and conditions of such order.

6. TERMINATION

     6.1  Termination for Convenience. Customer may terminate the project by
          giving LSI at least 30-day prior written notice of any such
          termination. In such event, the cancellation fee, determined as set
          forth in Article 3, will become immediately due and payable.

     6.2  Termination for Breach. If either party breaches a material provision
          of this Agreement and fails to remedy such breach within 30 days after
          written notice from the other party, the other party will have the
          right to: (a) suspend performance or payment, in whole or in part,
          until such breach has been remedied, (b) terminate the Agreement or
          purchase orders placed under the Agreement, in whole or in part, or
          (c) employ a combination of (a) and (b).

     6.3  Insolvency. If either party: (a) becomes insolvent; (b) makes an
          assignment for the benefit of creditors; (c) files or has filed
          against it a petition in bankruptcy or seeking reorganization; (d) has
          a receiver appointed; or (e) institutes any proceedings for
          liquidation or winding-up; then the other party may by written notice,
          in addition to other rights and remedies it may possess, immediately
          terminate the Agreement or any purchase orders placed hereunder.

7. FORCE MAJEURE

Neither party will be liable for damages resulting from a default in the
performance of its obligations under this Agreement when caused by an act or
occurrence that is beyond the reasonable control of such party, including but
not limited to fire, flood, earthquake or other natural disaster, labor
disputes, war or civil disturbance, shortage of materials, disruption of normal
production, yield failures, carrier strike, or an interruption of electric
power or utility services or mode of transportation.

8. EXPORT CONTROL

Each party will be responsible for ensuring compliance with all laws and
regulations of the U.S. government, including the Export Administration
Regulations administered by the Bureau of Export Administration within the
Department of Commerce, relating to the export from the U.S. of technical
information, technical data or products made using technical information.

LSI LOGIC CONFIDENTIAL                 4                    TERMS OF SALE

<PAGE>
9.   DISCLAIMER

IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY SPECIAL, INDIRECT, PUNITIVE,
INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOSS OF
PROFITS), CAUSED BY ANY BREACH BY EITHER PARTY OF ITS OBLIGATIONS ARISING OUT OF
OR RELATING TO THE AGREEMENT, REGARDLESS OF THE FORM OF ACTION, WHETHER IN
CONTRACT OR IN TORT (INCLUDING NEGLIGENCE), EVEN IF LSI HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.

10.  GENERAL

     10.1  Assignment. Neither party will assign any of its rights or privileges
           hereunder without the prior written consent of the other party other
           than to a successor in ownership of all or substantially all of the
           assets of the assigning party, which successor expressly assumes in
           writing the assignor's obligations hereunder.

     10.2  Governing Law. These Terms will be construed and interpreted in
           accordance with the law of the State of California (except its
           choice of law rules) as though made by two parties residing in
           California so as to be fully performed within that State.

     10.3  Waiver. No failure or delay on the part of either party in the
           exercise of any right or privilege hereunder will operate as a
           waiver thereof or of the exercise of any other right or privilege
           hereunder, nor will any single or partial exercise of any such right
           or privilege preclude other or further exercise thereof or of any
           other right or privilege.

     10.4  Notice. Any notice or claim provided for herein will be in writing
           and will be given (i) by personal delivery, effective upon delivery,
           (ii) by first class mail, postage prepaid addressed to the address
           first stated above for the recipient, effective one (1) business day
           after proper deposit in the mail, or (iii) by facsimile directed to
           the facsimile number first indicated above for the recipient, but
           only if accompanied by mailing of a copy in accordance with (ii)
           above, effective as of the date of facsimile transmission.

     10.5  Severability. If any provision of these Terms is held to be
           ineffective, unenforceable or illegal for any reason, such decision
           will not affect the validity or enforcement of any of the remaining
           portions hereof.

     10.6  Other Rights. Nothing contained in these Terms will be construed as
           conferring by implication, estoppel, or otherwise upon either party
           of any third party any license or other right except, solely as to
           the parties hereto, the rights expressly granted hereunder.

     10.7  Publicity. All notices to third parties and all other publicity
           concerning the transactions contemplated by these Terms will be
           jointly planned and coordinated by and between the parties. Neither
           of the parties will act unilaterally in this regard without the
           prior written approval of the other party; provided, however, this
           approval will not be unreasonably withheld.

     10.8  Exhibits. The following Exhibits attached hereto are incorporated
           herein by this reference:

               Exhibit A - Intellectual Property Release Form
               Exhibit B - Prototype Approval Form
               Exhibit C - Terms of Sale (for Production Units)

     10.9  Integration; Modification. These Terms, together with the Exhibits
           hereto, embodies the final, complete and exclusive statement of the
           terms agreed upon by the parties with respect to the subject matter
           hereof and supersedes any prior or contemporaneous representations,
           descriptions, courses of dealing, or agreements in regard to such
           subject matter. No amendment or modification of these Terms or any
           Exhibit hereto will be valid or binding upon the parties unless
           stated in writing and signed by an authorized representative of each
           party.

     10.10 Relationship of the Parties. The relationship of the parties hereto
           is that of independent contractors. Neither party, nor its agents or
           employees, will be deemed to be the agent, employee, joint venture
           partner, partner or fiduciary of the other party. Neither party will
           have the right to bind the other party, transact any business on
           behalf of or in the name of the other party, or incur any liability
           for or on behalf of the other party.

LSI LOGIC CONFIDENTIAL                 5                           TERMS OF SALE

<PAGE>
These ASIC Terms of Engagement are agreed to by each party as of the Effective
Date.

LSI LOGIC CORPORATION                   ----------------------------------------

By:                                     By: /s/ WAYNE RICKARD
   -------------------------------         -------------------------------------
Name:                                   Name: Wayne Rickard
     -----------------------------
Title:                                  Title: Sr. VP/CTO
      ----------------------------
Date:                                   Date: 12/20/00
     -----------------------------
                                        See Note Addition on 4.2.

LSI LOGIC CONFIDENTIAL                                             TERMS OF SALE
                                       6
<PAGE>

                                   EXHIBIT A.

                       INTELLECTUAL PROPERTY RELEASE FORM

A.   TERMS AND CONDITIONS

1.   DEFINITIONS

     1.1  "Intellectual Property" means all or any portion of either the LSI IP
          or the Customer IP that either party may disclose or furnish to the
          other party in connection with the Project (as defined below).

     1.2  "LSI IP" means ideas, know-how, inventions, designs, architecture,
          techniques, methods, processes and other information and data that
          are proprietary to LSI or its licensors based on rights under
          patents and patent applications, trademarks, copyrights, mask works,
          and trade secrets, and including but not necessarily limited to, the
          core (the "Core") and SPICE model (the "Model") identified below,
          together with associated materials, models, and documentation as
          identified below.

     1.3  "Customer IP" means ideas, know-how, inventions, designs,
          architecture, techniques, methods, processes and other information
          and data that are proprietary to Customer or its licensors based on
          rights under patents and patent applications, trademarks, copyrights,
          mask works, and trade secrets, including but not necessarily limited
          to, netlists and design specifications for the ASIC together with
          associated materials, models, and documentation as identified below.

     1.4  "Project" means the design, development, manufacture, and
          verification of the Product identified in the attached Agreement.

2.   LICENSE GRANT TO CUSTOMER

LSI grants to Customer a nonexclusive, nontransferable, revocable, royalty-free
license to use the LSI IP subject to the following:

     2.1  With respect solely to the Core, Customer may create a netlist of the
          Product or a portion thereof incorporating the entirety of any
          netlist included in the Core (the "Core Netlist"), provided that, in
          all copies, the entirety of such Core Netlist so incorporated remains
          entirely unmodified and in a readily identifiable file or directory
          entirely segregated from any other portion of the Product netlist. In
          no event may any such Core Netlist or any portion thereof be otherwise
          incorporated into or embedded in any netlist or other integrated
          circuit design database. Customer may make copies of the Core Netlist
          solely to the extent necessary to perform the Project provided,
          however, in no event will Customer make more than 10 copies of such
          Core Netlist, including copies incorporated into any netlist of the
          Product. Customer will immediately notify LSI of any unauthorized
          copying or use of any of the Core or Core Netlist.

     2.2  With respect solely to the Model, Customer agrees that LSI will have
          no obligation or responsibility with respect to the results of design
          and simulation obtained using the Model. Customer may use only the
          copies of the Model provided by LSI hereunder; provided, however,
          Customer may possess archives of the Model that have been merged into
          storage media no longer accessible by Customer for operational use
          following completion or earlier termination of the Project. Other than
          as expressly stated herein. Customer agrees not to make copies of any
          Model or of any associated documentation.

     2.3  LSI may recommend certain third-party vendor hardware, software, and
          applicable configurations (collectively "Vendor IP") to Customer in
          connection with use of the LSI IP and for design and verification of
          the Product. LSI will have no responsibility to provide support,
          remedy defects, or respond to claims of infringement in regard to
          such Vendor IP if adopted by Customer. Customer accepts the full risk
          and responsibility of purchasing, licensing and using such Vendor IP.

3.   LICENSE GRANT TO LSI

Customer grants to LSI a nonexclusive, nontransferable, revocable, royalty-free
license to use the Customer IP (and any documentation, specification, netlist,
or other technical data or program generated with use of the Customer IP)
solely for the purpose of performing the Project.

LSI LOGIC CONFIDENTIAL                 7                           TERMS OF SALE

<PAGE>
4.  MUTUAL RESTRICTIONS

     1.1  All Intellectual Property received from the other party will be
          disclosed to employees of the receiving party solely on a need to know
          basis. Either party may disclose Intellectual Property of the other
          party to third-party contractors engaged in the Project only upon
          first having received prior approval from the other party and ensuring
          that such third-party contractor is knowingly subject to the
          restrictions stated in this Article 4.

     1.2  Each party may use the Intellectual Property owned by the other party
          (and any documentation, specification, netlist, or other technical
          data or program generated with use of the Intellectual Property)
          solely for the purpose of performing the Project.

     1.3  Each party may use the Intellectual Property owned by the other party
          only at the Designated Site and, if in electronic form, only on the
          Designated Computer identified below; provided, however, either party
          may change the Designated Computer and/or Designated Site upon prior
          written approval of the other party.

     1.4  Upon termination or expiration of the Project for any reason
          whatsoever, each party will immediately destroy all Intellectual
          Property owned by the other party (including product manuals,
          specifications and application notes) and all copies thereof (with the
          exception of back-up and archival copies) and upon request by the
          disclosing party furnish a certificate signed by an authorized
          representative attesting to such destruction.

     1.5  Neither party will disassemble, de-compile, decrypt, decode or
          reverse-engineer any Intellectual Property owned by the other party.

     1.6  Neither party will remove or destroy any copyright notices,
          proprietary markings or confidential legends placed upon or contained
          in the Intellectual Property or any copies thereof.

5.  OWNERSHIP

     5.1  Each party and their respective licensors, if any, will retain sole
          right, title, and ownership to their respective Intellectual Property
          and all rights (including patents, patent applications, mask works,
          trademarks, copyrights, and trade secrets) arising from such
          Intellectual Property, including, but not limited to, any and all
          improvements, modifications, or derivatives thereof.

     5.2  LSI may retain any mask work that embodies the Customer IP for the
          sole purpose of manufacturing the Product for Customer. Unless
          expressly agreed in writing by Customer, LSI agrees that it will not
          design, develop, or manufacture for itself or any other person or
          entity any product using such mask work or any part of the Customer
          IP, including any improvement, modification or derivative thereof.

LSI LOGIC CONFIDENTIAL                 8                           TERMS OF SALE

<PAGE>
B. DESCRIPTION OF INTELLECTUAL PROPERTY

INTELLECTUAL PROPERTY TO BE RELEASED BY LSI:

[THIS IS AN EXAMPLE]

GIGABLAZE(R) G11(TM) CORE (NO. CW000502):

      System Verification Environment -- A generic environment that facilitates
      simulation of the GigaBlaze(R) G11(TM) core. It allows the exercise of
      functions such as loopback and self-test. The environment is a
      combination of the register transfer level ("RTL") and behavioral models.

      Unencrypted Netlist -- Versions of the netlist are provided that permit
      use with the LSI Toolkit, Model SIM VHDL, and Verilog XL.

      Encrypted RTL for Model Sim VHDL Simulator

      GigaBlaze(R) G11(TM) documentation set, consisting of the GigaBlaze(R)
      G11(TM) Design Manual

G11(TM) SPICE MODEL:

            I/O:              Internal:
                -----------            -----------

            Preliminary:               Final:      X      (check one)
                        -----------          ------------

(Note: LSI Engineering Services tracks all deliverables released from LSI.)

INTELLECTUAL PROPERTY TO BE RELEASED BY CUSTOMER:

Specifications, register transfer logic, netlists, test vectors, synthesis
scripts, and tech bench related to the Product.

-------------------------------------------------------------------------------

DESIGNATED COMPUTERS FOR INSTALLATION OF INTELLECTUAL PROPERTY PROVIDED BY LSI
AND CUSTOMER:

<Table>
<Caption>
-------------------------------------------------------------------------------
   INTELLECTUAL PROPERTY    NO. OF COPIES    PLATFORM         HOST ID
-------------------------------------------------------------------------------
<S>                         <C>              <C>              <C>
GigaBlaze(R) G11(TM) core
-------------------------------------------------------------------------------
G11(TM) SPICE Model
-------------------------------------------------------------------------------
(Customer IP)
-------------------------------------------------------------------------------
(Customer IP)
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
</Table>

LSI LOGIC CONFIDENTIAL                 9                           TERMS OF SALE
<PAGE>
                                   EXHIBIT B.

                            PROTOTYPE APPROVAL FORM

                          LSI LOGIC PROTOTYPE APPROVAL

Date:
     -------------------------

Customer:
                      ---------------------------
Customer Part Number:
                      ---------------------------
LSI Part Number:
                      ---------------------------
LSI Package/Chip/Flow:
                      ---------------------------

Customer acknowledges that the prototypes of the above stated LSI part number
have been fully evaluated by Customer, and these prototypes meet the
specifications and requirements of the Customer.

The customer also acknowledges that all production orders for this device will
be tested to the same test program as these prototypes. Any modification to the
current test program requires written approval from LSI engineering and may
impact unit pricing, SDE charges and delivery.

Processing of a production purchase order cannot proceed until this signed
Approval Form and a completed Product Configuration and Mark Specification are
received by LSI Logic Customer Service.

LSI LOGIC CORPORATION (AUTHORIZED REP)       CUSTOMER

By:                                          By:
   -------------------------------              ------------------------------

Name:                                        Name:
     -----------------------------                ----------------------------

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

Date:                                        Date:
     ------------------------------               ----------------------------

TO LSI LOGIC AUTHORIZED REP:
RETURN THIS SIGNED CUSTOMER APPROVAL TO THE FOLLOWING DISTRIBUTION:

__ Legal; Customer Contracts (original)

__ Field Sales Engineer

__ Design Center

__ Customer Service

LSI LOGIC CONFIDENTIAL                 10                          TERMS OF SALE

<PAGE>
Notwithstanding the above. LSI shall have no obligation to indemnify or hold
Customer harmless with respect to any Claim of infringement, disclosure or
misuse of any intellectual property rights arising out of or relating to either
(i) the combination of one or more LSI library elements with any other
circuitry in the design of any product, (ii) the combination or incorporation
of any product or of elements of any product supplied by LSI with any other
product, end item, or subassembly, (iii) the use or incorporation in any
product of any design, technique or specification furnished by Customer, or
(iv) any infringement based on protocols (including MPEG technologies and IEEE
1394) established by standards bodies. Customer will defend and indemnify LSI
from and against any liability, damages, cost or expense (including attorney's
fees) arising out of any such Claim asserted against LSI arising out of or
relating to any act or condition described in clauses (i), (ii), (iii), or (iv)
above; provided, however, LSI agrees to give Customer prompt written notice of
any Claim, full authority to defend and settle such Claim, and reasonable
assistance (at Customer's expense) as may be requested by Customer.

9. LIMITED WARRANTY. LSI warrants that production units manufactured by LSI
will be free from defects in material and workmanship under normal use and
service for a period of one year from the date of shipment to Customer. LSI's
obligations under this limited warranty are limited to replacing or repairing
or giving credit for, at its option, at its factory, any of the products which
shall, within one year after shipment, be returned to LSI, transportation
charges prepaid, and which are, after examination, disclosed to the
satisfaction of LSI to be defective. Any product which has either been repaired
or replaced by LSI under the terms of this limited warranty shall have warranty
coverage for the remaining period of time of the originally shipped product.
EXCEPT FOR THE LIMITED WARRANTY STATED IN THIS SECTION, ALL WARRANTIES,
EXPRESS, STATUTORY OR IMPLIED, WITH RESPECT TO ANY PRODUCT OR OTHER ITEMS
DELIVERED HEREUNDER, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY DISCLAIMED. THE REMEDIES SET FORTH
IN THIS SECTION ARE EXCLUSIVE. NO INDIVIDUAL IS AUTHORIZED TO GIVE ANY OTHER
WARRANTY ON BEHALF OF LSI.

This limited warranty does not apply to die or any other products which are not
finished and fully encapsulated, or to products which have been repaired or
altered (except by LSI) or which shall have been subjected to misuse,
negligence, or accident. PRODUCTS WHICH ARE NOT FINISHED AND FULLY ENCAPSULATED
ARE SOLD STRICTLY "AS IS."

10. CONFIDENTIAL INFORMATION. Customer acknowledges that materials received
from LSI may be considered confidential and proprietary ("Confidential
Information"). Customer agrees to maintain in confidence such information
which, if disclosed in writing, is identified and marked as confidential (or
with words of similar import) at the time of its disclosure (or which, if
disclosed verbally, is designated confidential at the time of disclosure and is
summarized and identified as confidential in a writing delivered to the
receiving party within 30 days after the disclosure). All information disclosed
in electronic form shall be deemed confidential. Customer shall not disclose
such information to any third party without the prior written consent of LSI.
Customer shall protect such information from disclosure to others with at least
the same degree of care as Customer exercises to protect its own information of
similar type and importance. The obligations of confidentiality and protection
required by this Article 10 shall survive the expiration, termination, or
cancellation of this Agreement for a period of five years. The obligation of
confidentiality shall not apply, or shall cease to apply, to any information
which: (a) was known to Customer prior to its receipt hereunder; (b) is or
becomes publicly available without breach of these Terms of Sale; (c) is
received from another party without an obligation of confidentiality to LSI;
(d) is disclosed by LSI to another party without an obligation of
confidentiality; or (e) is developed independently by employees of Customer not
having access to such information.

11. FORCE MAJEURE. Neither party shall have any liability for delays or
failures in performance of any obligation hereunder that are caused by any act
or occurrence that is beyond the reasonable control of such party, including
but not limited to fire, flood, earthquake or other natural disaster, shortages
of materials, labor disputes, war or civil disturbance, disruption of normal
product. Y2K issues, or an interruption of the means of transportation. In such
event, the performance of the affected party shall be excused for the time that
such event continues.

12. EXPORT CONTROL. Upon delivery of product to the carrier. Customer shall be
responsible for ensuring compliance with all applicable export laws and
regulations relating to the export of technical information, data, or products
received from LSI.

13. LIMITATION ON DAMAGES. CUSTOMER MAY NOT RECOVER DAMAGES FROM LSI IN
CONNECTION WITH ANY "CLAIM" WITH RESPECT TO A PRODUCT IN AN AMOUNT IN EXCESS OF
10% OF THE AGGREGATE CONSIDERATION PAID BY CUSTOMER TO LSI WITH RESPECT TO THE
PRODUCT OVER THE 12-MONTH PERIOD PRECEDING ACCRUAL OF THE CLAIM. As used
herein, "CLAIM" shall mean one or more claims (whether sounding in contract or
in tort (arising out of any breach, or related breaches, of this Agreement (or
arising out of any act or omission, or related series of acts or omissions by
LSI or its suppliers or contractors occurring in connection with performance
under this Agreement) with respect to a product ordered by Customer.

14. DISCLAIMER. IN NO EVENT WILL LSI BE LIABLE FOR ANY SPECIAL, INDIRECT,
PUNITIVE, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION,
LOSS OF PROFITS), CAUSED BY ANY BREACH BY LSI OF ITS OBLIGATIONS ARISING OUT OF
OR RELATING TO THIS AGREEMENT, REGARDLESS OF THE FORM OF ACTION, WHETHER IN
CONTRACT OR IN TORT (INCLUDING NEGLIGENCE), EVEN IF LSI HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.

15. HIGH RISK USES. All products are manufactured solely for standard
commercial applications and are not intended for use in any critical safety
system, life-support system, medical device, nuclear facility, military device,
satellite, or aviation equipment. LSI DISCLAIMS ANY AND ALL LIABILITY IN
CONNECTION WITH USE OF THE PRODUCT FOR ANY OF THE FOREGOING PURPOSES.

16. ASSIGNMENT. Except for LSI's right to payment accruing hereunder, neither
party shall assign any of its rights or privileges hereunder without the prior
written consent of the other party other than to a successor in ownership of
all or substantially all of the assets of the assigning party, which successor
expressly assumes in writing the assignor's obligations hereunder.

17. GOVERNING LAW. These Terms shall be construed and interpreted in accordance
with the law of the State of California (except its choice of law rules) as
though made by two parties residing in and fully performed within that State.

18. WAIVER. No failure or delay on the part of either party in the exercise of
any right or privilege hereunder shall operate as a waiver thereof or of the
exercise of any right or privilege hereunder nor shall any single or partial
exercise of any such right or privilege preclude other or further exercise
thereof or of any other right or privilege.

19. NOTICE. Any notice or claim provided for herein shall be in writing and
shall be given (i) by personal delivery, effective upon delivery, (ii) by first
class mail, postage prepaid, effective one business day after proper deposit in
the mail, or (iii) by facsimile directed to the facsimile number provided by
the recipient, but only if accompanied by mailing of a copy, effective as of the
date of transmission.

LSI CONFIDENTIAL INFORMATION                            ASIC TERMS OF ENGAGEMENT
                                       12                         8/00
<PAGE>

                                   EXHIBIT C

                                                           LSI LOGIC CORPORATION
                                                           TERMS OF SALE

THESE TERMS OF SALE GOVERN ALL SALES OF ASIC AND STANDARD PRODUCTS BY LSI.
ACCEPTANCE OF A PURCHASE ORDER IS CONDITIONAL UPON CUSTOMER'S ASSENT TO THESE
TERMS OF SALE IN LIEU OF ANY TERMS STATED ON THE CUSTOMER'S PURCHASE ORDER. A
FAILURE TO OBJECT TO THE PROVISIONS CONTAINED IN ANY COMMUNICATION FROM
CUSTOMER SHALL NOT BE DEEMED A WAIVER OF THESE TERMS OF SALE. ALL REFERENCES
HEREIN TO STANDARD PRODUCTS SHALL INCLUDE ASSP PRODUCTS.

1. PRICES. Prices will be consistent with LSI's current price list or a
quotation provided to Customer, as applicable. Prices do not include any taxes
that may be applicable to the products sold under this Agreement. All
applicable taxes (other than taxes based on the net income of LSI) are the
responsibility of Customer, and Customer agrees to pay such taxes unless
Customer has provided a valid tax-exemption certificate to LSI prior to product
shipment.

2. PAYMENT TERMS. Payment terms are net 30 days from invoice date. LSI may
periodically request financial information from Customer to review credit terms
and, based on such review, may in its sole discretion require different payment
terms.

3. DELIVERY, TITLE, RISK OF LOSS. All sales and deliveries are FOB (port of
shipment) (For international shipments, the terms shall be FCA (port of
shipment) as defined in the INCOTERMS 1990) and title and risk of loss or
damage shall pass to the Customer upon delivery to the carrier, unless
otherwise indicated. Unless Customer provides written shipping instructions,
LSI may select the carrier and mode of shipment without assuming any liability
for loss, theft or delay. All shipping dates are estimates only. Partial and/or
installment shipments are authorized. In the event of delivery delays due to
contingencies beyond its reasonable control, LSI may allocate production and
delivery among its customers.

4. PRODUCT ACCEPTANCE. Customer shall accept any product ordered that conforms
to the product specifications. (In the case of ASIC, this means product that
conforms to the test parameters in the applicable Engineering Design Review.)
Failure by Customer to give written notice of rejection within 30 days of
shipment (or 90 days of first customer shipment for any given platform) shall
be deemed acceptance following inspection. If Customer notifies LSI within the
applicable period that product is nonconforming, then upon approval from LSI,
Customer may return such product to LSI in accordance with the LSI material
return procedure, accompanied by a written explanation of the reasons for the
return.

5. MODIFICATION AND SUBSTITUTION, DISCONTINUED DESIGNS. LSI may modify the
specifications of Standard Products and substitute Standard Products
manufactured to such modified specifications at any time without prior notice
to Customer, provided such Standard Products substantially conform to the form,
fit and function of the original product. LSI will provide Customer with the
current specifications pertaining to each Standard Product. LSI may, at its own
discretion, provide Customer with notice of a modification of specifications
for Standard Products and offer Customer the opportunity to place final orders
for the unmodified version of such Standard Products. LSI may at any time cease
production of any product. Prior to discontinuing such product, LSI will
provide Customer with one year notice and an opportunity to place orders for
delivery within 18 months following said notice.

6. TERMINATION. If either party defaults on a material provision and, when the
default is non-monetary, does not cure such default within 60 days after
written notice thereof is received from the other party, the other party shall
have the right at its option to suspend performance or payment, in whole or in
part, until such default is cured, or terminate the purchase orders placed, in
whole or in part or a combination thereof. If either party becomes insolvent,
makes an assignment for the benefit of creditors, files or has filed against it
a petition in bankruptcy or seeking reorganization, has a receiver appointed,
or institutes any proceedings for liquidation or winding up, then the other
party may, in addition to other rights and remedies it may have, terminate any
purchase orders immediately by written notice.

7. RESCHEDULING, CANCELLATION. Customer may reschedule a purchase order one
time, postponing shipment not more than 45 days. Notice of rescheduling shall
be given in writing not less than 45 days prior to the original shipment date.
Customer may cancel a purchase order for product subject to payment of a
cancellation fee. Orders for Standard Products shall be non-cancelable within
30 days of the currently scheduled shipment date. The cancellation fee for
ASIC, preproduction, and all build-to-order product will be the ratio of the
purchase price, as follows:

<Table>
<Caption>
     Notice                                                  Cancellation Fee
     ------                                                  ----------------
<S>                                                          <C>
Before start of wafer fab                                           0%

After start of fab but before start of assembly                    65%

After start of assembly                                           100%
</Table>

8. INFRINGEMENT. Except as set forth below, LSI agrees to defend Customer from
and against any and all claims, demands and actions ("Claim") brought against
Customer based upon any alleged infringement of U.S. patents, copyrights or
mask work rights owned by third parties by any product purchased by Customer
from LSI, or upon any alleged disclosure or misuse by LSI of trade secrets of a
third party in connection with the design or production of any product. LSI
agrees to pay any money damages (other than attorney's fees and exemplary or
punitive damages) awarded against Customer attributable solely to any such
infringement, disclosure, or misuse. As a condition thereof, Customer shall
give LSI prompt written notice of any Claim, full authority to defend and
settle such Claim, and all reasonable assistance requested by LSI. If, as a
result of a Claim, Customer is enjoined from selling, using, or otherwise
disposing of the product purchased from LSI, then LSI will, at its option,
(i) procure for Customer the right to sell and use the product, (ii) provide
Customer with replacement product that is non-infringing and meets the same
functional specifications as the product, or (iii) if LSI cannot procure such
rights or furnish such replacement product on commercially reasonable terms,
refund to Customer the full purchase price actually paid for the infringing
product. THIS SECTION STATES THE ENTIRE LIABILITY OF LSI AND THE EXCLUSIVE
REMEDY OF CUSTOMER WITH RESPECT TO INFRINGEMENT. EXCEPT AS EXPRESSLY STATED IN
THIS SECTION, ALL WARRANTIES AGAINST INFRINGEMENT OF ANY INTELLECTUAL PROPERTY
RIGHTS, STATUTORY, EXPRESS OR IMPLED, ARE HEREBY DISCLAIMED.

LSI LOGIC CONFIDENTIAL                 11                          TERMS OF SALE

<PAGE>

20.  SEVERABILITY. If any provision of these Terms is held to be ineffective,
unenforceable or illegal for any reason, such decision shall not effect the
validity or enforcement of any or all of the remaining portions hereof.

21.  MODIFICATION. No amendment or modification of these Terms shall be valid
or binding upon the parties unless in writing and signed by an officer of each
party, and NO LSI EMPLOYEE OR REPRESENTATIVE HAS ANY AUTHORITY OTHERWISE TO
BIND LSI TO ANY OBLIGATION OR LIABILITY NOT EXPRESSLY STATED HEREIN.

22.  GOVERNMENT PROCUREMENTS. If these Terms are entered into as a first tier
or lower tier subcontract under a U.S. Government prime contract, Customer
warrants, represents and agrees that no "technical data" (as defined at DoD FAR
Supp. 252.227-7013) deliverable to Customer under this Agreement is deliverable
(or will be delivered by the Customer to the U.S. Government or any other third
party.

LSI CONFIDENTIAL INFORMATION                            ASIC TERMS OF ENGAGEMENT
                                         13                           8/00<PAGE>

                                                            EXHIBIT  10.19

SERVICE CONTRACT

for Managing Director

   between

   Pall GmbH
   Philipp-Reis-Strasse 6
   63303 Dreieich
   (hereinafter the "Company")

   and

   Heinz Ulrich Hensgen
   Ahl 18
   63584 Gruendau
   (hereinafter the "Managing Director").

Article 1 - Position and Scope of Duties

1.1      Since June 1, 1984, Mr. Hensgen has been employed by the Company as
         Managing Director.

1.2      The quota holders appoint additional managing directors and/or assign
         different and/or additional responsibilities to Mr. Hensgen and
         determine an allocation of responsibilities as well as the authority to
         represent the Company singly or jointly.

1.3      The Managing Director shall perform his duties as managing director by
         observing the diligence of a prudent businessman in accordance with the
         provisions of this Service Contract, the Company's Articles of
         Association, the general and specific directives or instructions given
         by Managing Director of Pall GmbH Holding, the internal rules for the
         Management as amended from time to time, and in accordance with the
         law.

<PAGE>
                                       2

1.4      The Managing Director shall report to the Managing Director of Pall
         GmbH Holding, or to any other officer of the Pall Group who may in
         future assume the responsibilities currently assigned to managing
         director of Pall GmbH Holding, or to any other employee of Pall Group
         which the managing director of Pall GmbH Holding may determine. Mr.
         Hensgen may consult managing director of Pall GmbH Holding on any issue
         that is beyond the ordinary operation of the business. In case of
         doubt, he shall request directions in writing. The position of managing
         director of Pall GmbH Holding currently is held by Mr. Heinz Kauke.

1.5      The Managing Director must obtain prior consent of the shareholders for
         all acts which are not within the regular scope of business of the
         Company.

1.6      Part of the Managing Director's duties under this Service Contract
         shall furthermore be the assumption of the function as a Senior Vice
         President of Pall, Inc., New York. Upon termination of this Service
         Agreement or otherwise upon request of the Managing Director of Pall
         GmbH Holding the Managing Director shall resign from this office
         immediately. There shall be no additional compensation for the
         assumption of this office.

1.7      The Managing Director shall work whatever hours are required.

Article 2 - Other Activities

2.1      The Managing Director shall devote his full working time and ability to
         the Company's business. Any other activity, be it for remuneration or
         not, including any part time work, is subject to the explicit prior
         written consent of the shareholders or of the Managing Director of Pall
         GmbH Holding. The Company shall grant such consent if the Company's
         interests are not affected by such activities.

2.2      Scientific and literary activity is permitted, provided that the
         Company is informed prior to publication, and that such activity does
         not adversely effect the working capacity of the Managing Director,
         does not give rise to the divulging of confidential information, or is
         in any other way not in the interest of the Company.

<PAGE>
                                       3

Article 3 - Remuneration

3.1      The Managing Director shall be entitled to a gross monthly salary in
         the amount of DM 28,846 (in words: twenty eight thousand eight hundred
         forty six) payable twelve times per year at the end of the month.

3.2      In addition, the Managing Director shall receive a Christmas
         gratification to the amount of one monthly salary according 3.1. The
         gratification shall be paid with the November salary

3.3      In addition, the Company shall pay half of the mandatory social
         security contributions (Sozialversicherungsbeitrage) including
         contributions to state unemployment and medical insurance according to
         German law. In case the Managing Director opts for a private medical
         insurance instead of the state medical insurance the Company will bear
         half of the contributions due up to the legal limit which is annually
         new committed. In case the own share of the Managing Director is less
         than the legal limit the difference can be used for medical insurance
         of his wife.

3.4      The Managing Director shall participate in the bonus scheme in force
         from time to time. The bonus plan currently in force is attached to
         this contract as Exhibit 1. The Company reserves the right at any time,
         especially at the beginning to each financial year, to modify the bonus
         plan, especially the agreed targets and bonus payments.

3.5      By payment of the above mentioned salary, all activities which the
         Managing Director has to perform under this Service Contract shall be
         compensated. In particular, the Managing Director shall not be entitled
         to any additional compensation of overtime work.

Article 4 - Other Benefits

4.1      Travel expenses and other necessary expenses reasonably incurred by the
         Managing Director in the furtherance of the Company's business shall be
         reimbursed according to the guidelines of the Company and within the
         framework of the principles applicable in Germany for tax purposes.

4.2      The Company shall in accordance with its rules provide the Managing
         Director with a company car for business and private use. The
         determination of the type of car shall be at the full discretion of the
         Company. The value of the private use per month as determined by the
         German tax regulations for the particular type of car shall constitute

<PAGE>
                                       4

         additional compensation to the Managing Director which will be subject
         to wage withholding tax. The costs of maintenance and use of the
         company car shall be borne by the Company. Instead of a company car the
         Managing Director may opt for a monthly car allowance as a lump sum
         compensation for all expenses related to the business use of his
         private car. All accruing taxes shall be borne by the Managing
         Director. Once the Managing Director has exercised his option for a
         company car, it will be binding until the termination of the leasing
         time.

4.3      The Company provides insurance cover of the Managing Director against
         accident. The amount insured is one year's salary (monthly salary * 13)

4.4      The Managing Director is entitled to participate in the company's
         pension scheme according to the pension plan of July 1971.

Article 5 - Continued Remuneration in case of Sickness and Death

5.1      In case the Managing Director shall be unable to perform his duties
         under this Service Contract, be it for health or other reasons, he
         shall inform the Company immediately. In case the inability to work
         shall last for a longer period, the Managing Director shall provide the
         Company with an appropriate medical certificate on the third day of his
         absence at the latest. If the Managing Director is prevented from
         carrying out his duties under this Service Contract due to illness he
         shall continue to be entitled to payment of his salary according Sec.
         3.1 for a period of up to six months beginning on the date of his
         inability to work, provided that this Service Contract does not end
         earlier. Benefits received from the health insurance or other statutory
         insurance institutions shall be deducted from these payments.

5.2      In case of death, the Company shall continue salary payments according
         Sec. 3.1 for a period of three months. The payments shall be made to
         those dependents who are or were entitled to the pension payments
         according to the Pall GmbH pension scheme or those dependents
         respectively who lived in a common household with the deceased at the
         time of his death.

<PAGE>
                                       5

Article 6 - Vacation

6.1      The Managing Director shall be entitled to an annual vacation
         corresponding to the valid Pall vacation system (at the moment 29
         working days) excluding Saturdays.

6.2      The time of vacation shall be determined in agreement with Managing
         Director of Pall GmbH Holding, and the other managing directors, if
         any, thereby taking into consideration the personal wishes of the
         Managing Director and the interests of the Company.

6.3      Holiday entitlement accrues month by month evenly through the calendar
         year. Holidays must be taken until December 31st of this calendar year.

Article 7 - Secrecy, Data Protection

7.1      The Managing Director shall not disclose to any third party, or use for
         personal gain, any confidential technical or other business information
         which has been entrusted to him, or which has otherwise become known to
         the Managing Director and which relates to the Company or to any of its
         affiliated companies. In particular, no information may be disclosed
         concerning the organisation of the business, the relation with
         customers and suppliers and the Company's know-how. This obligation
         shall not expire upon termination of the service contract but shall
         continue to remain in force thereafter. The Managing Director
         undertakes to pay to the Company a contractual penalty in the amount of
         3 monthly salaries (gross) for each case of breach of this secrecy
         obligation. The Company's right to further damages is reserved.

7.2      Business records of any kind, including private notes concerning
         Company affairs and activities, shall be carefully kept and shall be
         used only for business purposes. No copies or extracts or duplicates of
         drawings, calculations, statistics and the like nor of any other
         business records or documents may be copied or extracted for purposes
         other than for the Company's business.

7.3      Upon termination of this Service Contract, or upon suspension/release
         from work, the Managing Director shall return all business records and
         copies thereof, regardless of the data carrier; he shall have no right
         of retention.

<PAGE>
                                       6

Article 8 - Post Contractual Non-compete Clause

8.1      After termination of the Service Contract, the Employee shall not
         engage for a period of two years in a business in the filtration,
         separation and purification technology industry and which is in
         competition with the Company's business activities, neither on the
         Managing Director's own account nor in an employment, advisory or any
         other supporting capacity, neither occasionally nor permanently, and
         the Managing Director shall not set up a competitive business or
         participate in such, neither directly or indirectly

8.2      The obligation not to compete shall extend to the geographic territory
         of the European Union.

8.3      The Managing Director shall not for a period of two years after
         termination of the service contract hereunder whether directly or
         indirectly canvass, entice or solicit any employee of the Company or
         any of its subsidiaries or associated companies.

8.4      During the period of non-competition and non-solicitation after the
         termination of the employment relationship, the Employer agrees to pay
         to the Managing Director a compensation of maximum 50% of his last
         contractual remuneration. The compensation shall be paid monthly at the
         end of each month.

8.5      To the extent legally possible, the company shall offset against such
         compensation all income the Managing Director will earn during the
         period of the covenant to not compete or fails to earn voluntarily,
         including unemployment benefits. The Managing Director is obliged, upon
         the company's request, to give information concerning the amount of his
         income and his current employer.

8.6      The Managing Director undertakes to pay a contractual penalty in the
         amount of three monthly salaries for each case of breach of this
         obligation not to compete. Monthly salary is the average monthly
         remuneration earned in the last twelve months before the Managing
         Director left the company. In the case of a continuing violation of his
         obligation (a competing activity extending for more than one month), a
         contractual penalty shall be due once again for each additional month.
         At the same time, the company's obligation to pay compensation
         according to sec. 8.4 shall be suspended. The Company's right to
         further damages is reserved.

8.7      Except as otherwise provided herein, the provisions of Section 74 et
         seq. of the Commercial Code shall apply.

<PAGE>
                                       7

Article 9 - Inventions

9.1      All rights pertaining to inventions, whether patentable or not, and to
         proposals for technical improvements made and to computer software
         developed by the Managing Director (hereinafter jointly called
         "Inventions") during the term of this Service Contract shall be deemed
         acquired by the Company without paying extra compensation for it. The
         Managing Director shall inform the Company or a person designated by
         the Company of any Inventions immediately in writing and shall assist
         the Company in acquiring patent or other industrial property rights, if
         the Company so desires.

         Any and all writings or other copyrightable material produced by the
         Managing Director in the course of his services reasonably relating to
         the actual or potential business of the Company or one of its
         affiliates shall be the sole property of the Company or such affiliate,
         and the Company or one of its affiliates shall have the exclusive right
         to copyright such writings or other materials in any country. The same
         shall apply to any and all significant ideas, works of authorship,
         formulae, devices, improvements, methods, processes, or discoveries
         that are related to the Company or one of its affiliates (hereinafter
         referred to as "Improvements") and which the Managing Director
         conceives, makes up, develops, or works on in the course of his
         services under this Contract shall be the sole property of the Company
         or of one of its affiliates, respectively. The Managing Director shall
         execute any additional documents required to protect the right, title
         and interest of the Company or one of its affiliates in the
         Improvement.

9.2      Subsection 9.1 above shall apply to any Inventions, Improvements or
         other industrial or intellectual property rights, no matter whether
         they are related to the business of the Company, are based on
         experience and Know-how of the Company, emanate from such duties of
         activities as are to be performed by the Managing Director within the
         Company, or materialise during or outside normal business hours of the
         Company.

9.3      The Company's exclusive and unlimited rights to Inventions,
         Improvements or other industrial or intellectual property acquired
         hereunder shall in no way be affected by any amendments to or the
         termination of this Service Contract. Should the Managing Director by
         law be entitled to any compensation payment for such intellectual
         property rights which - as agreed above - solely pertain to the Company
         or one of its affiliates it is agreed that such payment is covered by
         the salary and that the Managing Director shall have no further claims
         against the Company or its affiliates.

<PAGE>
                                       8

Article 10 - Term of Employment and Notice

10.1     This Service Contract is entered into for an indefinite period. It
         shall, however, end without the need to give notice not later than the
         end of the month during which the Managing Director attains the age of
         65, or the month during which the Managing Director is entitled to
         receive state old age pension or disability benefits, whichever occurs
         first. In either event the Managing Director is obliged to inform the
         company on a timely basis. Both parties are entitled to terminate this
         Contract by giving 24 months prior notice effective to the end of any
         calendar quarter. In case the Company is obliged to observe an extended
         notice period, such an extension shall also apply for the Managing
         Director.

<PAGE>
                                       9

10.2     In case this Contract has been terminated, the Company is entitled to
         suspend and relieve the Managing Director from work at any time. In
         such case the Company shall continue to pay the contractual
         remuneration to the Managing Director. Any holidays not yet taken shall
         be offset against the time period during which the Managing Director is
         suspended/relieved from work. Any suspension period shall not count for
         calculating a possible (discretionary) bonus or payment above the
         salary.

10.3     Notice of extraordinary termination, effective immediately, may be
         given for compelling reasons.

10.4     Notice of termination must be given in writing. A revocation of
         appointment as Managing Director shall at the same time be deemed as
         termination of this Contract with notice period, provided that no
         termination for cause is made.

Article 11 - Final Provisions

11.1     This Service Contract represents the entire agreement and understanding
         of the parties. It supersedes and replaces all other previous contracts
         of employment as issued by the Company or its affiliates, including the
         post-contractual non-compete clause agreed upon in the employment
         contract dated May 15, 1987 and as amended on April 23, 1991.

11.2     Any amendments of or additions to this Service Contract shall be made
         in writing in order to be effective.

11.3     If one of the provisions of this Service Contract is held to be
         invalid, the remaining provisions shall remain valid, and the invalid
         provision shall be replaced by such valid one which shall have the
         closest admissible economic effect. The same shall apply in the event
         that the Contract is found to be incomplete.

11.4     In the event of disputes in connection with this Service Contract the
         place of jurisdiction shall be the corporate seat of the Company.

11.5     This Service Contract shall be governed and construed in accordance
         with the laws of the Federal Republic of Germany.

<PAGE>
                                       10

11.6     In case of doubt the German version of this Contract shall prevail.

Dreieich, February 26, 2001

For the Company

/s/ Heinz Kauke
------------------------
    Heinz Kauke                                         /s/ Heinz Ulrich Hensgen
                                                        ------------------------
                                                            Heinz Ulrich Hensgen

/s/ Paul Kummer
------------------------
    Paul Kummer

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