Document:

EXHIBIT 10.49
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                        DISTRIBUTION AND SUPPLY AGREEMENT

     This Agreement is made as of this 18th day of February 2003, by and between
MEDA AB (publ), a company organized under the laws of Sweden, with its principal
offices at Box 906 170 S-170 09 Solna, Sweden ("MEDA"), and VIVUS International,
Ltd., a company organized under the laws of Bermuda, with its principal offices
at Clarendon House, Church Street, Hamilton, Bermuda. ("VIVUS").

                                    RECITALS

     WHEREAS, VIVUS has developed the medical device, ACTIS(R), an Adjustable
Constriction Loop for the treatment of male erectile dysfunction; and

     WHEREAS, MEDA is interested in obtaining distribution rights to ACTIS(R),
and VIVUS is interested in granting such rights to MEDA; and

     NOW, THEREFORE, in consideration of the mutual obligations and promises as
set forth herein, the parties do hereby agree as follows:

ARTICLE 1 - DEFINITIONS
-----------------------

     For purposes of this Agreement, the following terms shall have the
following respective meanings:

         1.1      Affiliate means any corporation, firm, partnership or other
                  entity, whether de jure or de facto, that directly or
                  indirectly owns, is owned by or is under common ownership with
                  a party to the extent of in excess of fifty percent (50%) of
                  the outstanding securities or assets having the power to vote
                  on or direct the affairs of the entity.

         1.2      CE Marking means products regulated by the European
                  Commissions Health, Safety and Environmental Protection
                  Legislation, which indicates the manufacturer has conformed to
                  all obligations required by the legislation.

         1.3      Confidential Information means any information, data or
                  business plans relating to the Product or otherwise to the
                  subject of this Agreement, which a party discloses to the
                  other party, except any portion thereof which:

                  (i)      is known to the receiving party at the time of
                           disclosure and documented by written records made
                           prior to the date of this Agreement;

                  (ii)     is disclosed to the receiving party by a third person
                           who has a right to make such disclosure;

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                  (iii)    becomes patented, published or otherwise part of the
                           public domain through no fault of the receiving
                           party; or

                  (iv)     is independently developed by the receiving party as
                           evidenced by its written records.

         1.4      Effective Date means the date of this Agreement first written
                  above.

         1.5      First Commercial Sale means the first sale of Product (as
                  defined below) in the Territory by MEDA or any MEDA Affiliate
                  or sublicensee to any unaffiliated third party.

         1.6      Product means the medical device ACTIS(R), an Adjustable
                  Constriction Loop for the treatment of male erectile
                  dysfunction.

         1.7      Regulatory Approval means all governmental approvals and
                  authorizations necessary for the commercial marketing and sale
                  of the Product in the Territory including the CE Marking.

         1.8      Supply Price means the price as set forth in Article 3.2
                  below.

         1.9      Territory means Austria, Belgium, Czech Republic, Denmark,
                  Estonia, Finland, France, Germany, Greece, Hungary, Iceland,
                  Ireland, Italy, Latvia, Lithuania, Luxembourg, Norway, Poland,
                  Portugal, Spain, Sweden, Switzerland, The Netherlands, Turkey
                  and the United Kingdom.

         1.10     Trademark means the trademark ACTIS.

ARTICLE 2 - GRANT OF RIGHTS
---------------------------

         2.1      Appointment. VIVUS hereby grants to MEDA exclusive
                  distribution rights (exclusive even as to VIVUS) to use,
                  market and sell the Product in the Territory. MEDA may
                  sublicense these rights to any one or more of its Affiliates
                  at MEDA's sole discretion, and may sublicense third parties
                  with VIVUS's prior written consent, such consent not to be
                  unreasonably withheld.

ARTICLE 3 - PURCHASE AND SALE
-----------------------------

         3.1      Purchases and Sale of Product. Subject to the terms and
                  conditions of this Agreement, VIVUS shall exclusively to MEDA,
                  sell the volumes of the Product required by MEDA for further
                  sale in the Territory and MEDA shall purchase its requirements
                  of Product exclusively from VIVUS, at the Supply Price. All
                  sales of Product to MEDA are final.

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         3.2      Supply Price. The Product shall be sold to MEDA at a price of
                  $[*] in year one and shall be adjusted by a [*] increase each
                  year thereafter.

         3.3      Payments. Any payments due VIVUS or MEDA under this Agreement
                  shall be made by remitting to the bank account designated by
                  the party to whom payment is to be made. Any such payments
                  shall be made in U.S. Dollars.

         3.4      Taxes. Where any sum due to be paid to VIVUS hereunder is
                  subject to any withholding or similar tax, the parties shall
                  use their best efforts to do all such acts and things and to
                  sign all such documents as will enable them to take advantage
                  of any applicable double taxation agreement or treaty. In the
                  event there is no applicable double taxation agreement or
                  treaty, or if an applicable double taxation agreement or
                  treaty reduces but does not eliminate such withholding or
                  similar tax, MEDA shall pay such withholding or similar tax to
                  the appropriate government authority, deduct the amount paid
                  from the amount due VIVUS and secure and send to VIVUS the
                  best available evidence of such payment.

ARTICLE 4 - FORECASTS, ORDERS, INVOICES AND TITLE
-------------------------------------------------

         4.1      Initial Forecast. Within thirty (30) days of the Effective
                  Date, MEDA shall provide to VIVUS its then current best
                  forecast of the quantity of Product that MEDA will require
                  from VIVUS, by month for the next two calendar quarters.

         4.2      Rolling Forecasts. No later than ninety (90) days prior to the
                  first day of each calendar quarter after the initial calendar
                  quarter, MEDA shall provide to VIVUS its then current best
                  forecast of the quantity of Product that MEDA will require
                  from VIVUS during each of the next four (4) calendar quarters.
                  MEDA shall break down the forecast for the first two such
                  calendar quarters of the forecast by month.

         4.3      Order and Acceptance. Firm binding orders must be made at
                  least two (2) months in advance of delivery date, and VIVUS is
                  obliged to confirm these orders within seven (7) days of
                  receipt. If MEDA does not receive such notice, the order is
                  deemed to have been accepted. MEDA shall not increase or
                  decrease its forecast, for the second calendar quarter in each
                  of MEDA's rolling forecasts made pursuant to Article 4.2
                  above, by more than twenty percent (20%). VIVUS shall accept
                  all firm orders from MEDA for quantities of Product up to and
                  including one hundred twenty percent (120%) of the quantity of
                  Product previously forecasted by MEDA for such calendar
                  quarter, and shall use its best efforts to accept all firm
                  orders from MEDA for quantities of Product in excess of that
                  quantity of Product. Once an order has been accepted by VIVUS,
                  then VIVUS shall be obligated to sell, and MEDA shall be
                  obligated to purchase, the ordered Product.

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         4.4      Invoices. VIVUS shall invoice MEDA for the Supply Price in
                  United States Dollars for the Product shipped on the day of
                  shipment. MEDA shall pay VIVUS such invoiced amount within
                  thirty (30) days from the date of the receipt of the Product.

         4.5      Delivery. VIVUS shall deliver the Product via sea freight to
                  MEDA,CIF, MEDA's designated warehouses in the respective
                  countries in the Territory. All shipping costs, liability,
                  ownership and logistics of Product up to MEDA's designated
                  warehouses discharging dock, are the responsibility of VIVUS.
                  In the event MEDA requests delivery of Product via air
                  freight, then all such shipping costs shall be the
                  responsibility of MEDA.

         4.6      Conflicting Terms and Conditions. Except as otherwise provided
                  in this Agreement, the terms and conditions of this Agreement
                  shall govern, notwithstanding any additional or inconsistent
                  terms or conditions in MEDA's form of purchase order or
                  similar document or in VIVUS's acknowledgment, invoice, or
                  similar documents.

         4.7      Initial Start-up and At Risk Costs. MEDA will be responsible
                  for reimbursing VIVUS for VIVUS' actual costs incurred and
                  expenses paid to third parties to modify the packaging for the
                  Product in order to incorporate MEDA trade dress (including,
                  but not limited to, artwork changes, typesetting charges and
                  plate charges), to otherwise modify the packaging for the
                  Product to meet MEDA's requirements (including, but not
                  limited to, packaging materials). MEDA shall not repackage or
                  re-label Product supplied to MEDA by VIVUS hereunder without
                  the prior written consent of VIVUS.

ARTICLE 5 - SAMPLING, TESTING AND ANALYSIS
------------------------------------------

         5.1      Defective Product. MEDA shall notify VIVUS in writing of any
                  claim relating to damaged or defective Product or any shortage
                  in quantity of any shipment of the Product within thirty (30)
                  days of receipt of such Product or, if the defect is not
                  readily apparent based upon a reasonable inspection (a "Hidden
                  Defect"), within thirty (30) days after which the Hidden
                  Defect becomes known to MEDA. A Hidden Defect is defined as a
                  defect that existed at the time Product is delivered and, for
                  avoidance of doubt, a Hidden Defect does not include any
                  defect that might be caused in the storage or transportation
                  of the Product. If MEDA fails to give such written claim
                  notice to VIVUS within said thirty (30) day period, the
                  Product shipped shall be deemed to be sufficient in quantity
                  and not damaged nor defective at the time of delivery. If MEDA
                  gives such written claim notice to VIVUS within said thirty
                  (30) day period, then MEDA and VIVUS shall, in an appropriate
                  manner to be agreed, jointly inspect the Product to see if
                  claimed damage or defect actually exists in the Product
                  shipped. If existence of claimed damage, defect or shortage is
                  reasonably verified through such inspection, VIVUS shall
                  replace the rejected Product or make up the shortage as soon
                  as practicable but no later than ninety (90) days after such
                  verification, at no extra cost to MEDA, and shall make
                  arrangements with MEDA for the destruction of any rejected
                  Product, at VIVUS's expense.

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ARTICLE 6 - DEVELOPMENT AND REGULATORY ISSUES
---------------------------------------------

         6.1      VIVUS Responsibilities.  VIVUS shall be responsible for, and
                  shall bear all costs of the following:

                  a.       VIVUS shall provide to MEDA, as expeditiously as
                           possible, appropriate assistance, information and/or
                           materials in VIVUS's possession or control in order
                           to enable or facilitate MEDA's filing for a CE
                           Marking to market and sell the Product in the
                           Territory.

                  b.       VIVUS shall be responsible for filing trademark
                           applications for, and for the maintenance and upkeep
                           of, the Trademark in the Territory.

                  c.       VIVUS shall provide Product to MEDA in final
                           packaging for distribution in the Territory

         6.2      MEDA  Responsibilities.  During the term of this Agreement,
                  MEDA shall be responsible for, and shall bear all cost of, the
                  following:

                  a. MEDA shall, at its own expense, be responsible for

                           (i)      Preparing, filing and maintaining a CE
                                    Marking and/or other Marketing or Regulatory
                                    Authorizations necessary for distribution of
                                    the Product in the Territory; and

                           (ii)     Providing VIVUS with camera-ready artwork
                                    for the final packaging of Product including
                                    MEDA's trade dress.

                  b.       MEDA shall own all registrations and Regulatory
                           Approvals for the Product in the Territory.

                  c.       In fulfilling its obligations under this Agreement,
                           MEDA shall use its reasonable best efforts to ensure
                           that the Product is entitled to and receives the
                           maximum available benefit of any regulatory market
                           exclusivity periods or other safeguards or extensions
                           of proprietary status, which are or may be applicable
                           in the Territory.

         6.3      Pharmacovigilance. MEDA will have overall responsibility for
                  Pharmacovigilance in the Territory. Promptly after the
                  Effective Date and prior to Product distribution by MEDA, the
                  respective pharmacovigilance groups of VIVUS and MEDA shall
                  enter into a separate agreement covering adverse event
                  information exchange relating to the Product. Such agreement
                  will permit the inclusion of the respective pharmacovigilance

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                  groups of other third parties to whom VIVUS has granted or
                  will grant (during the term of this Agreement) similar rights
                  to make, have made, use and sell the Product outside the
                  Territory.

         6.4      Regulatory Communications. MEDA and VIVUS shall promptly
                  inform each other of any material communications to or from
                  governmental authorities or agencies relating to the Product
                  that affect marketing and/or sale of Product in the Territory.
                  With the exception of product recalls, which are to be handled
                  pursuant to Article 8 below, and adverse event reporting,
                  which is to be handled pursuant to Article 6.3 above, the
                  parties shall consult with each other regarding any issues
                  raised in such communications, and shall attempt in good faith
                  to agree upon any action to be taken or response to be made in
                  connection with such communications. If the parties are unable
                  to agree within a reasonable time prior to when the action is
                  to be taken or the response is to be made, the party receiving
                  the material communication for the Product shall decide what
                  action to take or response to make.

ARTICLE 7 - MARKETING AND SALES
-------------------------------

         7.1      MEDA Diligence. MEDA shall use its diligent efforts to market
                  and/or sell the Product in the Territory, consistent with the
                  efforts that MEDA expends on pursuing commercialization of
                  other products MEDA markets in the Territory of similar market
                  potential. MEDA agrees that neither MEDA nor its Affiliates or
                  Authorized Distributors will market or distribute any medical
                  device products for the treatment of Erectile Dysfunction in
                  the Territory other than the Product.

ARTICLE 8 - PRODUCT RECALL
--------------------------

         8.1      Recall in the Territory. In the event that in the Territory
                  (i) any government authority issues a request, directive or
                  order that the Product be recalled, or (ii) a court of
                  competent jurisdiction orders such a recall, or (iii) MEDA and
                  VIVUS jointly determine that the Product should be recalled,
                  MEDA shall take all appropriate corrective actions. If such
                  recall results from any cause or event attributable solely to
                  VIVUS's negligence or fault, VIVUS shall be responsible for
                  the direct expenses of the recall. If such recall results from
                  any cause or event attributable solely to MEDA's negligence or
                  fault, MEDA shall be responsible for the direct expenses of
                  the recall. If such recall results from any other cause or
                  event (including attribution to the negligence or fault of
                  both VIVUS and MEDA), the parties shall share equally the
                  direct expenses of the recall. For the purposes of this
                  Agreement, the direct expenses of recall shall include,
                  without limitation, the expenses of notification and return of
                  the recalled Product and MEDA's costs for the Product, and
                  shall not include the cost of any re-launch by MEDA of the
                  Product in the Territory subsequent to a recall.

         8.2      Recall Outside the Territory. In the event that outside the
                  Territory (i) any government authority issues a request,
                  directive or order that the Product be recalled, or (ii) a
                  court of competent jurisdiction orders such a recall, or (iii)

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                  VIVUS (or its Affiliates or sublicensees, as the case may be)
                  decides that the Product should be recalled, VIVUS shall
                  notify MEDA as expeditiously as possible and shall provide
                  MEDA with all information and assistance as MEDA may
                  reasonably request in order to enable MEDA to determine any
                  appropriate actions relating to the Product in the Territory
                  arising from such recall.

ARTICLE 9 - REPRESENTATIONS AND WARRANTIES
------------------------------------------

         Each party hereby represents and warrants for itself as follows:

         9.1      Organized. It is a corporation duly organized, validly
                  existing and is in good standing under the laws of the
                  jurisdiction of its incorporation, is qualified to do business
                  and is in good standing as a foreign corporation in each
                  jurisdiction in which the conduct of its business or the
                  ownership of its properties requires such qualification and
                  failure to have such would prevent it from performing its
                  obligations under this Agreement and has all requisite
                  corporate power and authority to conduct its business as now
                  being conducted, to own, lease and operate its properties and
                  to execute, deliver and perform this Agreement.

         9.2      Due Execution. The execution, delivery and performance by it
                  of this Agreement have been duly authorized by all necessary
                  corporate action and do not and will not (i) require any
                  consent or approval of its stockholders; (ii) violate any
                  provision of any law, rule, regulation, order, writ, judgment,
                  injunction, decree, determination or award presently in effect
                  having applicability to it or any provision of its charter or
                  by-laws; or (iii) result in a breach of or constitute a
                  default under any material agreement, mortgage, lease, license
                  (including any license from a third party which is necessary
                  for the full performance of this Agreement), permit or other
                  instrument or obligation to which it is a party or by which it
                  or its properties may be bound or affected.

         9.3      No Third Party Approval. No authorization, consent, approval,
                  license, exemption of, or filing or registration with, any
                  court or governmental authority or regulatory body (other than
                  health regulatory authorities) is required for the due
                  execution, delivery or performance by it of this Agreement,
                  except as provided herein.

         9.4      Binding Agreement. This Agreement is a legal, valid and
                  binding obligation of such party, enforceable against it in
                  accordance with its terms and conditions. It is not under any
                  obligation to any person, contractual or otherwise, that is in
                  conflict with the terms of this Agreement.

         9.5      Full Disclosure. Each Party has disclosed to the other in good
                  faith all material information relevant to the subject matter
                  of this Agreement and to such party's ability to observe and
                  perform its obligations hereunder.

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ARTICLE 10 - COVENANTS, REPRESENTATIONS AND WARRANTIES OF VIVUS
---------------------------------------------------------------

         VIVUS covenants, represents and warrants to MEDA that:

         10.1     VIVUS Rights. VIVUS has the right to grant the rights granted
                  in this Agreement and no provision in any third party
                  agreement to which VIVUS is a party will prevent VIVUS from
                  performing its obligations under this Agreement.

         10.2     Specifications. All quantities of the Product will comply
                  with, and VIVUS shall only release Product for shipment to
                  MEDA which comply with (i) all specifications of the Product
                  in the Regulatory Approvals granted by the regulatory
                  authorities in the Territory; (ii) all Specifications; and
                  (iii) all applicable legal and regulatory requirements
                  relating to the manufacture of the Product for sale in the
                  Territory, including but not limited to Good Manufacturing
                  Practices.

         10.3     Current Good Manufacturing Practices ("cGMP")/Regulatory
                  Requirements. All manufacturing and quality control methods
                  utilized by VIVUS and/or VIVUS's third-party contract
                  manufacturer(s) in the manufacture of the Product shall be
                  carried out in accordance with all applicable rules governing
                  medical devices in the Good Manufacturing Practice for medical
                  devices and regulations issued by the health regulatory
                  authorities in the Territory for which such Product is to be
                  sold as in effect at the time and the applicable standards in
                  effect at the time (collectively, the "Manufacturing
                  Standards").

         10.4     Documentation. VIVUS shall keep and maintain, for a minimum of
                  five (5) years after the date of distribution, (i) reference
                  samples and quality control records for each batch of starting
                  materials and packaging material used in the manufacture of
                  the Product, and (ii) manufacturing and quality control
                  records for each batch of the Product. Each shipment of the
                  Product shall be accompanied by the following written
                  documentation:

                  a. the date of final packaging;

                  b. delivered amount of Product units; and

                  c. a certificate of compliance pursuant to Article 6.

         10.5     Product Liability Insurance. The Parties shall maintain
                  product liability insurance consistent with their normal
                  business practices from time to time to cover risks related to
                  the Product and, upon either Party's request, to provide the
                  other Party with certificates of insurance attesting to the
                  existence of such insurance.

         10.6     Coverage. During the Term and for a period of two (2) years
                  thereafter, each Party shall obtain and maintain insurance
                  coverage from a reputable arm's-length insurer in respect of
                  its respective obligations under Article 10.5 and in respect
                  of third-person liability in an amount of not less than
                          [*]                              . Each Party shall
                  add the other Party as a co-insured under its respective
                  insurance policy

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ARTICLE 11 - FORCE MAJEURE
--------------------------

         11.1     Upon occurrence of an event of force majeure, the party
                  affected shall promptly notify the other party in writing,
                  setting forth the details of the occurrence, its expected
                  duration and how that party's performance of its obligations
                  under this Agreement is affected. The affected party shall
                  resume the performance of its obligations as soon as
                  practicable after the force majeure event ceases. If a party's
                  performance of any obligation under this Agreement is
                  significantly hindered or is prevented by an event of force
                  majeure for more than six (6) months, whether or not
                  consecutive, in any twelve (12) month period, then the other
                  party may terminate this Agreement upon thirty (30) days'
                  notice.

ARTICLE 12 - ALLOCATION OF SUPPLY
---------------------------------

         12.1     Allocation of Supply. In the event of VIVUS's inability to
                  supply the Product ordered by MEDA, VIVUS shall allocate its
                  available supply between MEDA, VIVUS and VIVUS's licensee(s)
                  outside the Territory on a fair and equitable basis based on a
                  pro-rata share of worldwide Product sales for the six (6)
                  months preceding and the forecasted worldwide Product sales
                  for the next six (6) months following such allocation. SUCH
                  ALLOCATION SHALL BE MEDA'S SOLE REMEDY FOR VIVUS'S FAILURE TO
                  SUPPLY MEDA QUANTITIES OF PRODUCT VIVUS IS OTHERWISE OBLIGATED
                  TO SUPPLY UNDER ARTICLE 4 OF THIS AGREEMENT.

ARTICLE 13 - TRADEMARKS
-----------------------

         13.1     Trademark Rights. VIVUS hereby grants to MEDA the exclusive
                  right, exclusive even as to VIVUS, to use the Trademarks in
                  connection with the Product in the Territory during the term
                  of this Agreement. MEDA acknowledges that such Trademarks
                  shall be and are the sole property of VIVUS.

         13.2     Electronic Address. VIVUS hereby grants to MEDA a
                  non-exclusive right to use VIVUS's registered electronic
                  address, www.vivus.com, for the purpose of linking electronic
                  users with MEDA's relevant web pages, web sites or other
                  electronic addresses relating to the Product in the Territory.
                  MEDA hereby grants to VIVUS a non-exclusive right to use
                  MEDA's registered electronic address, www.meda.se for the
                  purpose of linking electronic users with VIVUS's relevant web
                  pages, web sites or other electronic addresses relating to the
                  Product.

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ARTICLE 14 - INFRINGEMENT
-------------------------

         14.1     Third Party Infringement. Each party will notify the other
                  party if it becomes aware of the activities of any third party
                  that are believed to infringe the Trademark. The parties shall
                  consult as to potential strategies against the alleged
                  infringer, including but not limited to litigation strategy.

         14.2     Litigation.

                  a.       If the efforts of the parties are not successful in
                           abating the alleged infringement, then VIVUS shall
                           have the right, but not the obligation, to bring an
                           appropriate suit or action against such infringement,
                           at its own expense. MEDA agrees to cooperate in any
                           such infringement action and agrees to execute all
                           papers and perform such other acts as may be
                           reasonably requested by VIVUS at MEDA's expense.
                           VIVUS shall consult with MEDA and take into account
                           MEDA's recommendations regarding the conduct of such
                           action, provided that VIVUS shall have full right and
                           authority to determine the strategy and tactics for
                           such action and to settle, consent to judgment, or
                           otherwise resolve any such action or suit. The
                           provisions of the foregoing notwithstanding, no such
                           resolution shall be binding on MEDA without its prior
                           written consent (which consent shall not be
                           unreasonably withheld) unless such resolution does
                           not (i) impose any liability, loss, cost or
                           obligation upon MEDA, and (ii) adversely affect
                           MEDA's rights under this Agreement.

                  b.       If VIVUS does not elect to bring suit against the
                           alleged infringer, MEDA shall have the right, but not
                           the obligation, to bring an appropriate suit or
                           action against such infringer in the Territory, at
                           MEDA's own expense. VIVUS agrees to cooperate in any
                           such infringement action and agrees to execute all
                           papers and perform such other acts as may be
                           reasonably requested by MEDA (including but not
                           limited to consent to be joined as a nominal party
                           plaintiff in such action), at VIVUS's expense. MEDA
                           shall consult with VIVUS and take into account
                           VIVUS's recommendations regarding the conduct of such
                           action, provided that MEDA shall have full right and
                           authority to determine the strategy and tactics for
                           such action and to settle, consent to judgment, or
                           otherwise resolve any such action or suit. The
                           provisions of the foregoing notwithstanding, no such
                           resolution shall be binding on VIVUS without its
                           prior written consent (which consent shall not be
                           unreasonably withheld) unless such resolution does
                           not (i) impose any liability, loss, cost or
                           obligation upon VIVUS and (ii) adversely affect
                           VIVUS's rights under this Agreement.

                  c.       If VIVUS or MEDA brings an infringement action
                           pursuant to this Article 14, any amount recovered in
                           any action or suit against a third party infringer
                           shall be allocated as follows: first, to the party
                           bringing such action in order to reimburse such party
                           for the costs and expenses of such action; second,
                           with respect to any remaining amount,     [*]
                                 of that portion of such amount resulting from
                           infringement within the Territory to MEDA, and the
                           rest of any remaining amount to VIVUS.

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ARTICLE 15 - TERM AND TERMINATION
---------------------------------

         15.1     Term. The term of this Agreement shall commence on the
                  Effective Date and shall, unless earlier terminated pursuant
                  to this Article 15 or other express termination provisions in
                  this Agreement, expire on the tenth (10th) anniversary of the
                  First Commercial Sale of Product.

         15.2     Breach. Either party may, in addition to any other remedies
                  available to it by law or in equity, terminate this Agreement
                  upon sixty (60) days' written notice in the event that the
                  other party commits a material breach of this Agreement and
                  fails to cure such breach within sixty (60) days of notice of
                  the breach. The party giving notice of breach may withhold any
                  payments otherwise due and owing to the breaching party, to be
                  used as a setoff against any loss or damage arising from the
                  breach, and said withholding shall not constitute breach of
                  this Agreement. Any amounts so withheld shall be deposited by
                  the withholding party into an interest-bearing escrow account.
                  If the breaching party cures the breach within the sixty (60)
                  day cure period and this Agreement is not terminated, then the
                  withholding party shall promptly pay to the other party the
                  withheld amount, less that portion of such amount which was
                  applied as a setoff. Notwithstanding the foregoing provision,
                  if MEDA gives notice of breach to VIVUS, MEDA may withhold
                  other payments pursuant to this Article 15.2 but shall not be
                  entitled to withhold payment for Product actually ordered by
                  and delivered to MEDA pursuant to Article 4 of this Agreement.

         15.3     Insolvency or Bankruptcy. Either party may, in addition to any
                  other remedies available to it by law or in equity, terminate
                  this Agreement, upon thirty (30) days' written notice to the
                  other party in the event the other party shall have become
                  insolvent or bankrupt, or shall have made an assignment for
                  the benefit of its creditors, or there shall have been
                  appointed a trustee or receiver of the other party or for all
                  or a substantial part of its property, or any case or
                  proceeding shall have been commenced or other action taken by
                  or against the other party in bankruptcy or seeking
                  reorganization, liquidation, dissolution, winding-up,
                  arrangement, composition or readjustment of its debts or any
                  relief under any bankruptcy, insolvency, reorganization or
                  other similar act or law of any jurisdiction now or
                  hereinafter in effect.

         15.4     Serious Events. Should there occur serious and unexpected
                  events which, from a reasonable pharmaceutical company's point
                  of view, would make it impossible or impracticable to pursue
                  the commercialization of the Product, including but not
                  limited to a serious adverse event associated with the
                  Product, either party may, with full consultation with the
                  other party, terminate this Agreement upon thirty (30) days'
                  written notice. Termination by a party in good faith pursuant
                  to this Article 15.4 shall not, in itself, constitute a basis

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                  for any claim for compensation or other remedies by the other
                  party. In the event of termination by VIVUS under this Article
                  15.4, VIVUS shall be restricted from commercializing the
                  Product, either directly or indirectly, for a period of two
                  (2) years in the Territory.

         15.5     Change of Control or Ownership. Either party may terminate
                  this Agreement upon thirty (30) days' written notice if the
                  ownership or control of at least fifty percent (50%) of the
                  assets or voting securities of the other party are transferred
                  and, in the non-changing party's reasonable judgment, the
                  other party's new owner or controlling entity is a competitor
                  of the non-changing party in the field of erectile dysfunction
                  in the Territory.

         15.6     Survival of Liability. Except as expressly provided otherwise
                  in this Agreement, termination, expiration, cancellation or
                  abandonment of this Agreement through any means and for any
                  reason shall not relieve the parties of any obligation
                  accruing prior thereto and shall be without prejudice to the
                  rights and remedies of either party with respect to any
                  antecedent breach of any provision of this Agreement.

         15.7     Remaining Inventory. MEDA shall maintain a normal level of
                  inventory of the Product prior to expiration or termination of
                  this Agreement, and shall have a period of six (6) months from
                  the date of termination of this Agreement during which it may
                  sell its remaining inventory of Product, provided it sell such
                  inventory in a manner substantially similar to the manner in
                  which it was selling Product prior to the termination.

         15.8     Survival. Upon expiration or termination of this Agreement,
                  all rights and obligations of the parties under this Agreement
                  shall terminate except those rights and obligations described
                  in ARTICLES 1, 8.1, 10.4, 15, 16, 17 AND 18.

ARTICLE 16 - INDEMNITY
----------------------

         16.1     By VIVUS. In addition to indemnification expressly provided
                  elsewhere in this Agreement, VIVUS shall indemnify, defend and
                  hold MEDA, its directors, employees, agents and
                  representatives (including but not limited to MEDA's
                  Affiliates) harmless from and against all claims, causes of
                  action, settlement costs (including but not limited to
                  reasonable attorney's fees and expenses) losses or liabilities
                  of any kind which:

                  (a)      arise from or are attributable to any negligent act
                           or omission or willful misconduct on the part of
                           VIVUS or its Affiliates, or its or their directors,
                           employees, agents or representatives relating to any
                           of VIVUS' obligations under this Agreement, including
                           but not limited to any breach of a representation or
                           warranty;

                  (b)      arise from or are attributable to the manufacture of
                           the Product and which in either case are not
                           otherwise attributable to any negligent act or

                                       12
<PAGE>

                           omission or willful misconduct on the part of MEDA,
                           its directors, employees, agents or representatives
                           (including, but not limited to, MEDA's Affiliates);

         16.2     By MEDA. In addition to indemnification expressly provided
                  elsewhere in this Agreement, MEDA shall indemnify, defend and
                  hold VIVUS, its directors, employees, agents and
                  representatives harmless from and against all claims, causes
                  of action, settlement costs (including but not limited to
                  reasonable attorney's fees and expenses) losses or liabilities
                  of any kind which:

                  (a)      arise from or are attributable to any negligent act
                           or omission or willful misconduct on the part of
                           MEDA, its directors, employees, agents or
                           representatives relating to any of its obligations
                           under this Agreement; or

                  (b)      arise from or are attributable to the storage, use,
                           sale, marketing and promotion of the Product by MEDA
                           in the Territory and which in either case are not
                           otherwise attributable the manufacture of a Product
                           and which in either case are not otherwise
                           attributable to any negligent act or omission or
                           willful misconduct on the part of VIVUS, its
                           directors, employees, agents or representatives.

         16.3     Condition of Indemnification. If either party expects to seek
                  indemnification under this Section, it shall promptly give
                  notice pursuant to Section 18.5 below to the indemnifying
                  party of the basis for such claim of indemnification. If
                  indemnification is sought as a result of any third party claim
                  or suit, such notice to the indemnifying party shall be within
                  fifteen (15) days after receipt by the other party of such
                  claim or suit; provided, however, that the failure to give
                  notice within such time period shall not relieve the
                  indemnifying party of its obligation to indemnify unless it
                  shall be materially prejudiced by the failure. The
                  indemnifying party shall have full control over the defense of
                  such claim or suit; provided that the indemnified party shall
                  have the right to participate, at its own expense, with
                  counsel of its own choosing, in such defense. The indemnified
                  party shall fully cooperate with the indemnifying party in the
                  defense of all such claims or suits. The indemnifying party
                  shall make no offer of settlement, settlement or compromise
                  without the prior written consent of the indemnified party
                  (which consent shall not be unreasonably withheld) unless such
                  settlement fully releases the indemnified party without any
                  liability, loss, cost or obligation.

         16.4     Term of Indemnification. The obligations of the parties set
                  forth in this Article 16 shall apply during the term of this
                  Agreement and for a period of five (5) years after the date of
                  termination in whole or expiration of this Agreement or any
                  extension thereof.

                                       13
<PAGE>

ARTICLE 17 - CONFIDENTIALITY AND DISCLOSURE
-------------------------------------------

         17.1     Confidentiality. Neither party shall use or disclose any
                  Confidential Information received by it pursuant to this
                  Agreement without the prior written consent of the other. This
                  obligation shall continue for a period of seven (7) years
                  after expiration or termination of this Agreement.

         17.2     Disclosure. Nothing contained in this Article 17 shall be
                  construed to restrict the parties from disclosing Confidential
                  Information as required: (i) for regulatory, tax, securities
                  or customs reasons, (ii) by court or other government order,
                  (iii) for confidential audit purposes; or (iv) from using such
                  Confidential Information as is reasonably necessary to perform
                  acts permitted by this Agreement, including the registration,
                  marketing, sale or use of the Product.

ARTICLE 18 - MISCELLANEOUS
--------------------------

         18.1     Assignment. This Agreement may not be assigned or otherwise
                  transferred, nor, except as expressly provided hereunder, may
                  any right or obligation hereunder be assigned or transferred
                  by either party without the prior written consent of the other
                  party; provided, however, that either VIVUS or MEDA may,
                  without such consent, assign this Agreement and its rights and
                  obligations hereunder in connection with the transfer or sale
                  of all or substantially all of its assets, its merger or
                  consolidation or any similar transaction, and that MEDA may,
                  without such consent, assign this Agreement and its rights and
                  obligations hereunder to one or more of its Affiliates. Any
                  permitted assignee shall assume all obligations of its
                  assignor under this Agreement.

         18.2     Sublicensees. In the event that MEDA grants sublicenses under
                  Article 2, MEDA shall ensure that such sublicensees abide by
                  all the obligations of MEDA contained in this Agreement to the
                  extent that such obligations are relevant to and applicable to
                  such sublicensees.

         18.3     Damages. Notwithstanding any provision in this Agreement to
                  the contrary, in no event shall a party hereto be liable to
                  the other party for any indirect or consequential damages,
                  including but not limited to loss of profits or business
                  opportunity.

         18.4     Severability. Each party intends not to violate any public
                  policy, statutory or common law, rule, regulation, treaty or
                  decision of any government agency or executive body thereof of
                  any country or community or association of countries. If any
                  term or provision of this Agreement is held to be invalid,
                  illegal or unenforceable by a court or other governmental
                  authority of competent jurisdiction, such invalidity,
                  illegality or unenforceability shall not affect any other term
                  or provision of this Agreement, which shall remain in full
                  force and effect. The holding of a term or provision to be
                  invalid, illegal or unenforceable in a jurisdiction shall not
                  have any effect on the application of the term or provision in
                  any other jurisdiction.

                                       14
<PAGE>

         18.5     Notices. Any consent or notice required or permitted to be
                  given or made under this Agreement by one party to the other
                  shall be in writing, delivered personally or by facsimile (and
                  promptly confirmed by personal delivery, first-class mail or
                  courier), first-class mail or courier, postage prepaid (where
                  applicable), addressed to the other party as shown below or to
                  such other address as the addressee shall have last furnished
                  in writing to the addresser and (except as otherwise provided
                  in this Agreement) shall be effective upon receipt by the
                  addressee.

                  If to VIVUS:              VIVUS International Limited
                                            c/o VIVUS, Inc.
                                            1172 Castro Street
                                            Mountain View, CA  94040
                                            Attention:  Legal Department
                                            Fax:  (650) 934-5389

                  If to MEDA:               MEDA AB
                                            Pipers vag 2
                                            Box 906, SE-170 09 Solna,
                                            Attention: CEO
                                            Fax:  +46 8 630 19 19

         18.6     Applicable Law. This Agreement shall be governed by and
                  construed in accordance with the laws of the State of
                  California, excluding its conflict of laws provision.
                  Application of the United Nations Convention On Contracts For
                  The International Sale Of Goods is hereby excluded.

         18.7     Entire Agreement. This Agreement contains the entire
                  understanding of the parties with respect to the subject
                  matter hereof. All express or implied agreements and
                  understandings, either oral or written, heretofore made are
                  superseded by this Agreement. Except as expressly provided
                  elsewhere in this Agreement, this Agreement may be amended, or
                  any term hereof modified, only by a written instrument duly
                  executed by both parties hereto.

         18.8     Headings. The captions to the Articles hereof are not a part
                  of this Agreement, but are merely guides or labels to assist
                  in locating and reading the Articles hereof.

         18.9     Independent Contractors. It is expressly understood and agreed
                  that VIVUS and MEDA are independent contractors and that the
                  relationship between the two parties shall not constitute a
                  partnership, joint venture or agency. Neither VIVUS nor MEDA
                  shall have the authority to make any statement,
                  representations or commitments of any kind, or to take any
                  action, which shall be binding on the other, without the prior
                  written consent of the party to do so.

                                       15
<PAGE>

         18.10    Waiver. The waiver by either party of any right hereunder or
                  of a failure to perform or breach by the other party shall not
                  be deemed a waiver of any other right hereunder or of any
                  other failure or breach whether of a similar nature or
                  otherwise.

         18.11    Dispute Resolution. Prior to either party initiating any court
                  proceedings against the other party, the parties shall first
                  attempt to resolve any disputes arising out of or related to
                  this Agreement as follows. Either party may initiate the
                  dispute resolution process by delivering written notice to the
                  other party setting forth the matter in dispute. Such matter
                  shall be referred to a joint committee comprised of at least
                  one (1) member nominated by each party. The joint committee
                  shall meet within ten (10) business days of receipt of such
                  notice. The joint committee shall have a period of ten (10)
                  business days to attempt to resolve the matter in dispute. If
                  the joint committee is unable to resolve the dispute by
                  unanimous resolution within such time, the joint committee
                  will escalate the dispute to the chief executive officers of
                  the parties for resolution. If the respective chief executive
                  officers cannot resolve the dispute within fifteen (15)
                  business days after the date such dispute was escalated, then
                  either party may refer such dispute for resolution by court
                  proceedings

         18.12    Counterparts. This Agreement may be executed in two or more
                  counterparts, each of which shall be deemed an original, but
                  all of which together shall constitute one and the same
                  instrument.

     THEREFORE, the parties hereto have executed this Agreement as of the first
day above written.

MEDA  AB                                    VIVUS INTERNATIONAL, LTD.

By:  /s/ Anders Lonner                      By: /s/ Leland Wilson
   ------------------------                    ------------------------

Title: CEO                                  Title: President and CEO
      ---------------------                       ---------------------
Date:  2/18/03                              Date:  2/21/03
      ---------------------                       ---------------------Exhibit 10.30

 

	
  Execution
  Copy

  	
   

  	
  Nov.14, 2002

  

 

AMENDED AND RESTATED LICENSE AGREEMENT

 

BETWEEN

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

 

AND

 

IBIS TECHNOLOGY CORPORATION

 

 

	
  FIA-2000-0027

  	
   

  	
  IBM/IBIS CONFIDENTIAL

  
	
  IBIS
  Know-How License 12-18-2000 Amended and Restated

  	
   

  	
   

  

 

1

 

TABLE OF CONTENTS

 

	
  Section

  	
   

  	
  Page

  
	
  1.

  	
  DEFINITIONS
  

  	
  4

  
	
   

  	
   

  	
   

  
	
  2.

  	
  SCOPE 

  	
  7

  
	
   

  	
   

  	
   

  
	
  3.

  	
  LICENSES
  

  	
  9

  
	
   

  	
   

  	
   

  
	
  4.

  	
  CONFIDENTIAL INFORMATION 

  	
  9

  
	
   

  	
   

  	
   

  
	
  5.

  	
  COMPENSATION
  

  	
  13

  
	
   

  	
   

  	
   

  
	
  6.

  	
  TERMINATION
  

  	
  17

  
	
   

  	
   

  	
   

  
	
  7.

  	
  REPRESENTATIONS AND
  DISCLAIMERS 

  	
  19

  
	
   

  	
   

  	
   

  
	
  8.

  	
  TECHNOLOGY
  TRANSFER  & TECHNICAL ASSISTANCE 

  	
  22

  
	
   

  	
   

  	
   

  
	
  9.

  	
  APPLICABLE LAW 

  	
  24

  
	
   

  	
   

  	
   

  
	
  10.

  	
  MISCELLANEOUS
  

  	
  26

  

 

2

 

    This Amended and Restated License Agreement (the “Agreement”)
is by and between International Business Machines Corporation
(referred to as “IBM”) and IBIS Technology Corporation (referred to as
“IBIS”), each referred to as a “Party” or, collectively referred to as the
“Parties”.

 

WHEREAS:                                       IBIS has previously developed expertise in products for the
implantation and annealing of semiconductor wafers with oxygen;

 

WHEREAS:                                     IBM has developed an improved method of implantation and
annealing;

 

WHEREAS:                                   IBIS wishes to operate in its facility implantation machines
and associated equipment owned by IBM and/or owned by IBIS;

 

WHEREAS:                                   IBIS and IBM have executed agreements on the consignment of
such implantation machines and associated equipment and on the purchase of
wafers by IBM implanted and annealed by IBIS;

 

WHEREAS:                                   Concurrently with this Agreement, IBIS and IBM are entering
into an agreement defining the joint development by IBIS and IBM of an enhanced
process for implanting silicon wafers with oxygen and/or other ions and
annealing such wafers (hereinafter referred to as the “Joint Development
Agreement”);

 

3

 

WHEREAS:                                   IBIS wishes to sell products incorporating IBM’s trade
secrets; and

 

WHEREAS:                                  IBM wishes to receive royalties from IBIS;

 

 NOW THEREFORE, in consideration of the contributions of knowledge
and skill in the areas of their respective expertise, in the cooperative undertaking specified herein, and in view
of the mutual promises, commitments and efforts relating thereto, it hereby is
agreed between the Parties that as of November 14, 2002 this Agreement is
amended and restated as follows:

 

1      DEFINITIONS

 

    Words shall have their normally accepted meanings as employed
in this Agreement.  The terms “herein”,
“hereunder” and “hereof”, unless specifically limited, shall refer to the
entire Agreement.  The words “shall” and
“will” are mandatory, the word “may” is permissive, the word “or” is not
exclusive, the words “includes” and “including” are not limiting and the
singular includes the plural.  The
following terms shall have the described meanings:

 

1.1                                 “Confidential Information” shall mean technical and business
information relating to oxygen implantation and annealing methods and

 

4

 

disclosed
by or on behalf of a Party that is subject to the applicable restrictions on
disclosure of this Agreement.

 

1.2                                 “Consigned Equipment” shall mean the following equipment
presently owned by IBM: two model 1000 oxygen implant tools manufactured by
IBIS (IBM tool numbers 36F1070AA and 36F107AD),  Kokusai Furnace
(12J0503AA), Mini-environment (15J0518AA), IPEC Accumap (15J0525AA) and Mapper
(15J0521AA).

 

1.5                                 “Effective Date” shall mean December 15, 2000.

 

1.6                                 “IBM Improvements” shall mean any change, upgrade,
modification or revision actually introduced into the Licensed Process by IBM
and practiced in production of implanted wafers in IBM’s East Fishkill facility
or in a substitute IBM facility.

 

1.7                                 “Licensed Process” shall mean the process for implanting
silicon wafers with oxygen and annealing, as practiced for commercial
production in IBM’s East Fishkill, NY, facility on the Effective Date, referred
to within IBM as Routes 7N00, 7V00, 7A00 and 2V00.  IBM represents that the twenty (20) wafers delivered to IBIS on
or about November 10, 2000 were implanted and annealed with the Licensed
Process.  The Licensed Process shall
include IBM Improvements only if such IBM Improvements are subsequently
licensed to IBIS.  The Licensed Process
shall further include the Enhanced Process, as defined in the Joint Development
Agreement.

 

1.8                                 “Licensed Product” shall mean: (a) silicon wafers or
substrates implanted with oxygen and annealed according to, with the aid of,
based on

 

5

 

or using information disclosed hereunder (including the
Licensed Process) that, as of the date of disclosure, is not excluded from the
obligations of confidentiality by the provisions of Section 4.6; and (b)
semiconductor devices and integrated circuits formed on silicon substrates
licensed according to the preceding clause.

 

1.9                                 “Net Revenue” shall mean the price charged or recognized (as
determined under United States generally accepted accounting principles) for
Licensed Products sold by IBIS in normal, bona fide, commercial transactions,
without any deductions other than for duties, taxes, freight and insurance,
returns or credit allowances on sales of such Licensed Products to the extent
to which such deductions are actually paid or allowed.

 

    In the case of Licensed Products sold to a Subsidiary or
other entity in other than an arm’s length transaction, Net Revenue shall be
deemed to be the greater of: (a) gross receipts actually received; or (b) gross
receipts recognized (as determined under United States Generally Accepted
Accounting Principles) for Licensed Products based upon the invoice price
generally available to unaffiliated third parties for the sale, lease or
disposition of similar quantities of the same type of products or services;
without any deductions other than for duties, taxes, freight and insurance,
returns or credit allowances on sales of such Licensed Products to the extent
to which such deductions are actually paid or allowed.

 

1.10                           “Subsidiary” shall mean a corporation, company, or other
entity: (i) more than fifty percent (50%) of whose outstanding shares or
securities (representing the right to vote for the election of directors or
other managing authority) are, now or hereafter, owned or controlled, directly
or indirectly,

 

6

 

by a Party hereto, but such corporation, company, or other
entity shall be deemed to be a Subsidiary only so long as such ownership or
control exists; or (ii) which does not have outstanding shares  or
securities, as may be the case in a partnership, joint venture or
unincorporated association, but fifty percent (50%) or more of whose ownership
interest representing the right to make the decisions for such corporation,
company or other entity is, now or hereafter, owned or controlled, directly or
indirectly, by a Party hereto, but such corporation, company, or other entity
shall be deemed to be a Subsidiary only so long as such ownership or control
exists.

 

    Notwithstanding the foregoing, for the purposes of this
Agreement, an entity more than 35% of whose shares or ownership interest is
owned or controlled by a Party and that has a licensing relationship with such
Party covering manufacturing process knowhow and imposing obligations on such
Party to provide updated knowhow to such entity shall be deemed to be a
Subsidiary of such Party.

 

1.11                           “Term” shall mean the period of time this Agreement is in
effect, which will commence on the Effective Date and continue until the
expiration of a patent license agreement between the parties executed together
herewith, unless sooner terminated pursuant to Section 7.

 

2    SCOPE

 

2.1                                 IBIS agrees to make commercially reasonable efforts to market
and sell Licensed Products.

 

7

 

2.2                                 IBIS has, at its own expense, transferred the Consigned
Equipment once located in IBM’s facility in East Fishkill, NY to IBIS’ facility
in Danvers, MA, and installed and powered on the Consigned Equipment.  IBIS has, at its own expense, exerted its
best commercial efforts to debug and make available for production the
Consigned Equipment.  Terms for the
consignment of the Consigned Equipment are set forth in the consignment
agreement that was executed between the Parties on or about the Effective Date.

 

2.3                                 IBM shall disclose the Licensed Process to IBIS as set forth
in Section 8 below.

 

2.4                                 Each Party shall have a Program Manager and a Technical
Coordinator as follows:

 

	
  For
  IBM:

  	
  Program
  Manager:

  
	
   

  	
  Daniel
  J. Armbrust

  
	
   

  	
   

  

 

8

 

 

	
   

  	
  Technical
  Coordinator:

  
	
   

  	
  Devendra
  K. Sadana

  
	
   

  	
   

  
	
  For
  IBIS:

  	
  Program
  Manager:

  
	
   

  	
  Martin
  J. Reid

  
	
   

  	
   

  
	
   

  	
  Technical
  Coordinator:

  
	
   

  	
  Robert
  P. Dolan

  

 

Each
Party may change its Program Manager and/or Technical Coordinator by giving
written notice to the other Party.

 

2.5                                   Each of the Program Managers shall be responsible for the
representation of his Party’s interest under this Agreement.  The Program Managers shall meet on a regular
basis to review progress.

 

2.6                                   The Technical Coordinators or their designees shall supervise
the exchange of information during the course of the Agreement.

 

3    LICENSES

 

3.1                                     IBM hereby grants to
IBIS a worldwide, nonexclusive royalty-bearing license, revocable only pursuant
to Section 6, under IBM’s trade secret rights in the Licensed Process to make,
import, export and sell Licensed Products.

 

3.2                                   No license is granted in this agreement by a Party to another
Party under any patent or trademark.

 

9

 

3.3                                   Nothing in this Agreement shall be construed as amending or
modifying in any way a patent license agreement between the parties signed
concurrently herewith.

 

4    CONFIDENTIAL
INFORMATION

 

4.1                                   The prior agreement between the Parties concerning
confidential information, having a term beginning on March 24, 2000 and
relating to oxygen implantation technology and methods, is terminated as of the
Effective Date and all information disclosed thereunder shall be deemed to have
been disclosed on the Effective Date.  The
handling of all confidential information exchanged between the Parties,
including any confidential information transferred under the prior agreement
shall be in accordance with this Section 4. 
All further disclosures of confidential information shall only be made
in accordance with this Section 4.

 

4.2                                   It is understood that receipt of Confidential Information
under this Agreement will not create any obligation in any way limiting or
restricting the assignment and/or reassignment of employees within the
receiving Party.

 

4.3                                   For a confidentiality period as set forth below, the
receiving Party agrees to use the same care and discretion to safeguard
Confidential Information of the disclosing Party and to avoid release of such
Confidential Information outside of the receiving Party as it employs with
similar embodiments of information of its own which it does not desire to
publish, disclose, or disseminate, but in no event less than reasonable care.

 

10

 

4.4                                   Following the period of confidentiality as specified below,
no obligation of any kind is assumed by, or is to be implied against the
receiving Party with respect to any Confidential Information of the disclosing
Party and the receiving Party will be free to disclose, publish and disseminate
such Confidential Information to others without limitation.

 

4.5                                  Disclosure
of such Confidential Information of the disclosing Party will not be precluded
if such disclosure is:

 

(a)               in response to a valid order of a court or other governmental
body; provided, however, that the receiving Party will first have given notice
to the disclosing Party and made a reasonable effort to obtain a protective
order requiring that the information and/or documents so disclosed be used only
for the purposes for which the order was issued; or

 

(b)              otherwise required by law (including, without limitation,
applicable securities laws).

 

4.6                                   The obligations of confidentiality herein shall not apply to
information that:

 

(a)               Is already in the possession of the receiving Party or any of
its Subsidiaries without obligation of confidentiality;

 

(b)              Is independently developed by the receiving Party or any of
its Subsidiaries;

 

11

 

(c)               Is or becomes publicly available without breach of this
Agreement;

 

(d)              Is rightfully received by the receiving Party from a third
party;

 

(e)               Is released for disclosure by the disclosing Party with its
written consent; or

 

(f)                 Is required to be disclosed in a patent application.

 

4.7                                   All disclosures under this Agreement of Confidential
Information by IBM or IBIS, as the disclosing Party, shall preferably be made
by or under the supervision of its Technical Coordinator, or his designee, to
the receiving Party’s Technical Coordinator, or his designee.  Any such designee shall be identified by a
Party’s Technical Coordinator in writing to the Technical Coordinator of the
other Party.  In the event of
inadvertent disclosure from one Party to another, either Party may give notice
to the other Party within six (6) months of such inadvertent disclosure that
such inadvertently disclosed information was confidential and not within the
scope of this Agreement and the receiving Party shall promptly return such
information and cease use thereof.

 

4.8                                   All disclosures of information will be deemed to be
nonconfidential unless specifically designated at the time of disclosure as
including the Confidential Information of a Party.

 

12

 

4.8.1                        Notwithstanding the foregoing, Inventions created and
Confidential Information disclosed in the course of joint work or discussions
between the Parties shall be deemed to be the Confidential Information of the
employer(s) of the individuals creating or disclosing them, whether or not the
pertinent information is marked or summarized in a resume.  The Parties agree to make reasonable efforts
to document and mark such joint work or discussions.

 

4.9                                   IBIS’s obligations of confidentiality with respect to the
Licensed Process shall extend until December 31, 2017.  The confidentiality obligations of the
Parties with respect to confidential information disclosed hereunder, other
than the Licensed Process, shall extend until December 31, 2007.

 

5    COMPENSATION

 

5.1                                   IBIS has paid to IBM a nonrefundable technology transfer fee
of [*] upon the signing of this Agreement.

 

5.2                                   From the Effective Date, and continuing through the Term, for
each Licensed Product sold, IBIS shall pay to IBM in the United States of
America a royalty comprising [*] of Net Revenue for each such Licensed Product
sold by IBIS.

 

5.3                                   The royalties of this Section 5 shall accrue when a Licensed
Product is first sold. For the purpose of determining such royalty, Licensed
Products shall be considered sold when invoiced.  If not invoiced, then Licensed Products are to be considered sold
when delivered or when paid for, if paid for before delivery.  If not invoiced, delivered or paid for
before delivery,

*
Confidential treatment has been requested for the language omitted and such language
has been separately filed with the Securities and Exchange Commission.

13

 

Licensed Products are to be considered sold
at the earlier of when put into use or when possession is transferred to a
third party.  When Licensed Products are
sold in conjunction with other products or services provided by IBIS, IBIS
agrees to separately invoice such Licensed Products from such other products or
services.

 

5.4                                   Accrued royalties shall be calculated and paid on a quarterly
basis.  Within thirty (30) days of the
end of a calendar quarter, IBIS shall deliver to IBM a report showing the
number and identification (type and wafer size) of Licensed Products sold
during such quarter, the Net Revenue from such Licensed Products during such
quarter, and the royalties payable thereon. 
At such time, IBIS shall also make payment of such payable
royalties.  Any royalties paid to IBM
are nonrefundable, but overpayments shall be credited against future royalties
due hereunder.  IBIS may deduct from the
accrued royalties calculation in this Section 6.6 those royalties accrued on
Licensed Products which have been returned to IBIS or for which credit
allowances have been made.

 

5.5                                   For a period ending two (2) years after the expiration or
termination of this Agreement, IBIS agrees to maintain adequate documentation
and accounting records for demonstration of compliance with all the provisions
of this Agreement, including the provisions concerning disclosure and use of
the Licensed Process.  At IBM’s request
and expense, and upon thirty  (30) days
written notice to IBIS, IBIS shall permit IBM or a mutually acceptable
independent third party auditor and/or technical expert to review all such
documentation and accounting records and/or to inspect IBIS’s facilities during
regular business hours.

 

14

 

5.6                                   IBIS shall be liable for interest on any and all overdue
payments, fees, and royalties required to be made to IBM under this Agreement,
commencing on the date such overdue payment, fee, or royalty becomes due, at an
annual rate of eighteen per cent (18%). 
If such interest rate exceeds the maximum legal rate in the jurisdiction
where a claim therefor is being asserted, the interest rate shall be reduced to
such maximum legal rate.  Nothing in
this Section 5.6 shall limit IBM’s rights under Section 6.

 

5.7                                   IBIS shall bear and pay, and indemnify and hold IBM harmless
from any and all taxes (including, without limitation, sales, use, royalty, value
added, and property taxes) imposed by any national government (including any
political subdivision thereof) of any country, as the result of the existence
of this Agreement or the exercise of rights hereunder, and IBM shall not be
responsible for any taxes that arise from the foregoing.  Notwithstanding the foregoing, IBIS shall
not be liable for any taxes or assessments arising from the purchase by IBM of
goods and services hereunder or based on the net income of IBM.

 

5.8                                   IBIS shall pay all royalties and other payments due hereunder
in the United States of America in United States dollars.

 

5.9                                   All royalties, fees, and payments to IBM that result from
this Agreement are to reference this Agreement and the license number assigned
thereto and be sent by electronic funds transfer to the following address:

 

    International Business Machines Corporation

    The Bank of New York

    1 Wall Street

    

15

 

New York, New York 10286

    United States of America

    Credit Account No. 
890-0209-674

    ABA No.  0210-0001-8

 

    A written statement containing the same information shall be
mailed to:

 

    Director of Licensing

    International Business Machines Corporation

    North Castle Drive, MD - NC119

    Armonk, New York, 10504-1785

    United States of America

    FAX: (914) 765-4380

 

with a copy to:

    

Michael Poponiak

    International Business Machines Corporation

    2070 Route 52

    Hopewell Junction, NY 12533;

 

    Each Party may change the person to receive notice or its
address for receiving notice by giving written notice to the other Party.

 

6    TERMINATION

 

6.1                                   In the event of any material default, the non-defaulting
Party may give written notice of such default (a “Notice of Default”) to
the defaulting Party.  If the defaulting
Party fails to cure such default within a cure period of thirty (30) days after
receiving the Notice of Default, the non-defaulting Party may then terminate
this Agreement by a second written notice (a

 

16

 

“Notice of Termination”) to the defaulting Party.  The Notice of Termination shall be effective
upon receipt.

 

6.2                                   Notwithstanding Section 6.1, in the event of any material
default specified in this Section 6.2, the non-defaulting Party may immediately
terminate this Agreement by giving a Notice of Termination without any Notice
of Default.  The Notice of Termination
shall be effective upon receipt. 
Circumstances where such immediate termination is permitted by a Party
are:

 

(a)               If the other Party becomes insolvent, is dissolved or
liquidated, has a petition in bankruptcy, reorganization, dissolution or
liquidation or similar action filed by or against it, is adjudicated a
bankrupt, or has a receiver appointed for its business.

 

(b)              If the other Party has all or a substantial portion of its
capital stock or assets expropriated or attached by any government entity.

 

(c)               If the other Party makes an assignment for the benefit of
creditors.

 

(d)            If the other Party is subject to property attachment, court injunction,
or court order materially affecting its operations under this Agreement.

 

(e)               If the other Party breaches its obligation of confidentiality
under Section 4.

 

17

 

    Circumstances where such immediate termination is permitted
by IBM are:

 

(f)               If IBIS materially breaches the terms of its license       under Section 3.

 

6.3                                   If this Agreement is terminated by IBM due to material
default under this Agreement by IBIS:

 

(a)       all IBM Confidential Information previously transferred to,
or in the possession of, IBIS shall be returned, at IBIS’s expense, to IBM
forthwith, but no later than thirty (30) days from the date of termination; (b)  the licenses granted to IBIS in Section 3 shall terminate.

 

6.4                                   If this Agreement is terminated by IBIS due to material
default under this Agreement by IBM:

 

(a)               the licenses (and royalty obligations) of Section 3.1 and 5
shall survive; and b) each Party’s obligations of confidentiality shall
survive.

 

6.5                                   In the event of termination by either Party for any reason,
all financial obligations due or accrued hereunder as of the date of
termination shall remain payable.

 

6.6                                   Except as stated in Sections 6.3, 6.4, and 6.5, to the extent
a particular right or obligation herein does not have a specifically identified
survival period, all rights and obligations in this Section or in any other
Section in this Agreement which by their nature survive the expiration or

 

18

 

termination of this Agreement will remain
in effect beyond any termination for the time period reasonably necessary to
accomplish their purpose and shall bind and inure to the benefit of the
parties, their legal representatives and successors.  By way of example and not as a limitation, sections 7, 9 and 10
shall survive any expiration or termination of this Agreement.

 

7    REPRESENTATIONS
AND DISCLAIMERS

 

7.1                                   IBIS recognizes that equipment and wafer purchases are
complex decisions and that IBM can make no commitment that IBM or IBM’s
Subsidiaries will purchase any products from IBIS.

 

 

7.2                                   This Agreement is nonexclusive.  IBM and IBIS recognize and agree that each has been and may
continue to be active in the development of technology, and/or manufacture and
sale of products indirectly or directly relating to the technologies, processes
and products contemplated by this Agreement, and IBIS acknowledges and agrees
that IBM will not be precluded by this Agreement from pursuing such activities
independent of IBIS, including with third parties, and further, IBM
acknowledges and agrees that IBIS will not be precluded by this Agreement from
pursuing such activities independent of IBM, including with third parties.

 

7.3                                   IBM and IBIS each represent that they have the right to disclose
the information disclosed hereunder and to grant the licenses granted
hereunder.

 

7.4                                   Nothing contained in this Agreement will be construed as:

 

19

 

7.4.1                        conferring on either Party any rights to use in advertising,
publicity, or other marketing activities any name, trade name, trademark, or
other designation of the other Party hereto, including any contraction,
abbreviation, or simulation of any of the foregoing without the prior written
and signed agreement of the other Party; or

 

7.4.2                        conferring by implication, estoppel, or otherwise upon either
Party hereunder any license or other right except the licenses and rights
expressly granted hereunder to a Party hereto; or

 

7.4.3                        a warranty or representation that the manufacture, sale,
lease, use, or other disposition of systems, processes, circuits, devices,
packages, software, and products licensed hereunder will be free from
infringement of intellectual property rights of third parties; or

 

7.4.4                        a warranty that the recipient Party will successfully
manufacture products, or a particular volume of products, using the Licensed
Process; or

 

7.4.5                        an obligation on either Party to bring or prosecute actions
or suits against third parties for infringement, or to defend actions or suits
from third parties for infringement, or to secure and/or maintain any of its
intellectual property rights; or

 

7.4.6                        in any way limiting the rights which a Party has outside the
scope of this Agreement.

 

7.5                                   ALL INFORMATION, TECHNOLOGY, IMPROVEMENTS, INVENTIONS,
CONFIDENTIAL INFORMATION, INTELLECTUAL PROPERTY RIGHTS,

 

20

 

BACKGROUND INTELLECTUAL PROPERTY RIGHTS, LICENSED PROCESS,
PRODUCTS, MATERIALS, ASSISTANCE, AND SERVICES PROVIDED BY EITHER PARTY
HEREUNDER ARE PROVIDED “AS IS” WITHOUT ANY WARRANTY OF ANY KIND, INCLUDING,
WITHOUT LIMITATION, ANY WARRANTY OF NONINFRINGEMENT AND THE IMPLIED WARRANTIES
OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

 

 

7.6                                   Each Party acknowledges its responsibility to make its own
evaluation of the risks of bringing any product based on information provided
under this Agreement to market, or otherwise to use such information.

 

7.7                                   Each Party disclaims any warranty that the recipient will be
able to reproduce the results of the disclosing Party and each Party
acknowledges that it may be not be able to use disclosed information without
further research and development.

 

7.8                                   IBM disclaims any warranty under Section 2-312 of the Uniform
Commercial Code that the information disclosed hereunder or that the transfer
by IBIS of articles made by IBIS with the aid of such information will be free
of claims of infringement of patents of third parties.  IBIS disclaims any warranty under Section
2-312 of the Uniform Commercial Code that information disclosed hereunder or
that the transfer by IBM of articles made by IBM with the aid of the such
information will be free of claims of infringement of patents of third parties.  Nothing in this Agreement will override
these disclaimers or operate, expressly or by implication, to grant a warranty
of noninfringement of third party patents.

 

21

 

8  TECHNOLOGY TRANSFER AND TECHNICAL
ASSISTANCE

 

8.1                                   Subject to Sections 8.2 and 8.3 and with the sole exception
of the Enhanced Process, IBM has provided to IBIS in IBM’s facilities in the
United States the recipe for the Licensed Process and limited technology
transfer and technical assistance in operation, setup and qualification
procedures for the Licensed Process.

 

8.2                                   During the period from the Effective Date through three (3)
months from the Effective Date, IBM has provided at no additional cost to IBIS
technology transfer and technical assistance as provided in Section 8.1 up to a
total limit of [*]

 

8.3                                   The IBM and IBIS Technical Coordinators shall keep accurate
records of all limited technical assistance performed and shall compare records
for accuracy and provide access to such records to the other Party once a quarter
or pursuant to a schedule mutually agreed to. 
Queries made by IBIS from its facilities shall be logged at a minimum of
one person-hour.

 

8.4                                   IBIS, at its own cost and expense, shall be responsible for
acquiring the necessary equipment, materials, and services required to
implement the Licensed Process.

 

8.5                                   After the earlier to occur of the exhaustion of the [*]
person-hours of the limited transfer assistance and limited technical
assistance specified in Sections 8.1 and 8.2 and the expiration of the three
month period specified in Section 8.2, IBM agrees to provide, in IBM’s
facilities in the U.S.A., up to an additional [*] person-hours of transfer
assistance and technical assistance to

*
Confidential treatment has been requested for the language omitted and such
language has been separately filed with the Securities and Exchange Commission.

 

22

 

IBIS, subject to the availability of requisite personnel
within IBM, for a period ending on six (6) months after the Effective
Date.  IBIS agrees to pay IBM for such
limited additional transfer and technical assistance provided to IBIS at a rate
that is the higher of [*] dollars per person-hour or the then-current rate,
plus reasonable travel and living expenses. 
IBIS may make site visits to IBM’s East Fishkill facilities upon
reasonable notice to IBM and upon mutual agreement of the Parties.  A maximum of five (5) IBIS employees may
visit IBM’s facilities at any one time. 
The travel and living expenses of such visiting IBIS employees shall be
at the sole expense of IBIS.  The amount
of limited additional transfer assistance and technical assistance shall be
defined and determined by mutual agreement.

 

8.6                                   IBM shall invoice charges monthly for the limited additional
transfer assistance and technical assistance provided for in this

Section 8.

 

8.7                                   IBM shall be under no obligation hereunder to provide
transfer or technical assistance to any person or entity other than IBIS, and
in particular, not to suppliers or customers of IBIS.

 

8.8                                   IBM will not be obligated to disclose to or to grant rights
under IBM Improvements to IBIS, but may make such disclosure and/or grant such
rights in its sole discretion.

*
Confidential treatment has been requested for the language omitted and such
language has been separately filed with the Securities and Exchange Commission.

 

23

 

 

9    APPLICABLE
LAW

 

9.1                                   This Agreement shall be construed and the legal relations
between the Parties shall be determined in accordance with the law of the State
of New York, U.S.A. without regard to the conflict of law provisions
thereof.  Any proceedings to enforce
this Agreement, or to resolve disputes relating to this Agreement, shall be
brought in the United States District Court for the Southern District of New
York, Westchester County Division and the Parties hereby consent to the
exclusive jurisdiction and venue of such court.  IBM and IBIS waive the right to trial by jury in any matter
relating to this Agreement and agree that any proceeding hereunder shall be
tried by a judge without a jury.

 

9.1.1                        No action, regardless of form, arising out of this   Agreement may be brought by a Party more than two (2) years
after the cause of action has accrued.

 

9.2                                   Each Party agrees to pay the other Party’s attorney’s fees
and costs of litigation if the first Party, for any reason whatever, brings
suit against the other Party and the other Party is finally adjudicated not to
have liability.

 

9.3                                   If any sentence, paragraph, clause or combination of the same
in this Agreement is held by a court of competent jurisdiction to be
unenforceable in any jurisdiction, such sentence, paragraph, clause or
combination of same shall be unenforceable in the jurisdiction in which it is
invalid and the remainder of this Agreement shall remain binding on the Parties
in such jurisdiction as if such unenforceable provision had not been contained
herein.  The enforceability of such
sentence, paragraph, clause or combination of same in this Agreement, shall be
otherwise unaffected and shall remain enforceable in all other jurisdictions.

 

24

 

10    MISCELLANEOUS

 

10.1                           IBIS shall indemnify, defend and hold harmless IBM, IBM
Subsidiaries at any level, and the affiliates, directors, officers, agents and
employees of each of IBM and IBM Subsidiaries at any level (collectively, the “Indemnified
Persons” and each, an “Indemnified Person”) from and against:

 

    (1)  all claims,
demands, costs, liabilities, causes of action, actions, obligations, and
damages (including without limitation, reasonable attorneys’ fees, claims,
demands or damages for business injury, property damage, environmental harm,
personal injury, and/or death, but excluding claims, demands or damages
relative to any third party’s intellectual property rights which are covered by
item (2) below) of every kind and every nature, in law or in equity, known or
unknown, contingent or otherwise, past, present, or future brought by or on
behalf of any third party related to, arising from, or alleged to arise from
IBIS’s (or any IBIS Subsidiaries’ or any IBIS affiliates’) development,
manufacture, use, misuse, advertising, labeling, marketing, sale, license,
transfer, transportation, storage, support, modification, distribution or
disposal of (a) any Confidential Information, IBM Improvements, Licensed
Product, Consigned Equipment, or Licensed Process (b) any other use of
Confidential Information, IBM Improvements, Licensed Product, Consigned
Equipment, or Licensed Process; and

    

(2)  all claims,
demands, costs, liabilities, causes of action, actions, obligations, and
damages (including without limitation, reasonable attorneys’ fees and/or
claims, demands or damages for business injury) brought by or on

 

25

 

behalf
of any third party related to, arising from, or alleged to arise from any
violation of any third party’s intellectual property rights in any country by
(a) the use of any Confidential Information, IBM Improvements, Consigned
Equipment, Licensed Process or related process, or Licensed Product
manufactured, sold, licensed or transferred by IBIS (or by any IBIS Subsidiary
or any IBIS affiliate) by any party other than IBM or IBM Subsidiaries, or (b)
the sale, license or transfer of any Confidential Information, IBM
Improvements, Consigned Equipment, Licensed Process or related process, or
Licensed Product by IBIS (or by any IBIS Subsidiary or any IBIS affiliate) to
any party other than IBM or IBM Subsidiaries. 
IBM’s Subsidiaries at any level, and the affiliates, directors,
officers, agents and employees of each of IBM and IBM Subsidiaries at any level
shall continue to be indemnified, defended and held harmless per subsections
(1) and (2) of this Section 10.1 even after they cease to be such Subsidiaries,
affiliates, directors, officers, agents and employees.  Notwithstanding the foregoing, IBIS’
obligations of indemnification to IBM with respect to third party claims based
on: (a) the purchase of implanted wafers by IBM from IBIS; (b) the implantation
by IBIS of wafers supplied to it by IBM and subsequent shipment of such wafers
to IBM; or (c) the use by IBM of implanted wafers included in (a) and (b) above
shall be governed by terms no less favorable to IBM as those set forth in
purchase agreements or services agreements between IBIS and third parties for
comparable  wafers.

 

    (3)  IBIS and IBIS’s
Subsidiaries at any level and affiliates of IBIS release and covenant that they
will not sue or otherwise make any claim against any Indemnified Person,
regarding any matter which, if it had been the subject matter of a suit brought
by a third party, would be subject to the provisions of Section 10.1(1) and (2)
above.  Each Indemnified Person shall
continue to be released and the covenantors shall continue to covenant to

 

26

 

them
as provided above even after they cease to be IBM, an IBM Subsidiary at any
level, or an affiliate, director, officer, agent or employee of IBM or an IBM
Subsidiary at any level.  If IBIS or any
IBIS Subsidiary at any level or any IBIS affiliate violates this subsection (3)
of Section 10.1, IBIS agrees to pay all costs and expenses of defending against
such claim or suit incurred by any Indemnified Person, including reasonable
attorneys’ fees.  IBIS shall cause
IBIS’s Subsidiaries at any level and affiliates of IBIS or any IBIS Subsidiary
at any level to so release and not sue the Indemnified Persons as provided
above.

 

10.1.1                  Without limiting Section 10.1, above, IBIS agrees to pay all
expenses of the defense, including any amount in settlement, of all claims,
demands, proceedings and actions which may be asserted against any of the
indemnitees specified in Section 10.1, regardless of merit, and agrees to
permit IBM, at IBM’s expense, to actively participate in the defense or
settlement of any of the claims demands, proceedings or actions described above
and, in any claim or action brought against IBIS and not IBM, at the option of
IBM, to permit IBM, at IBM’s expense, to intervene in or become a party to any
such claims, demands, proceedings or actions. 
IBM agrees to permit IBIS, at IBIS’s expense and option, to actively
participate in the defense or settlement of any of the claims or actions
described above and, in any such action brought against IBM and not IBIS.  Each Party shall promptly notify the other
Party of any action, suit, proceeding, claim or demand of which it becomes
aware and relating to the indemnification obligations under Section 10.1.

 

10.2                           IBIS will be solely responsible for determining its prices
and other terms and conditions for its products sold to its customers.  IBIS will be solely

 

27

 

responsible for marketing products to its customers, and IBM
will have no obligation to provide any support of any kind to IBIS’s customers.

 

10.3                           If any Party is rendered wholly or partially unable by force
majeure to carry out its obligations under this Agreement, and if that Party
gives prompt written notice and full particulars of such force majeure to the
other Party, the notifying Party will be excused from performance of its
obligations hereunder during the continuance of any inability so caused, but
for no longer period; provided that if payment cannot be made due to the
existence of a banking crisis or international payment embargo, such amount may
be paid within the following thirty (30) days. 
Such cause will be remedied by the notifying Party as far as possible
with reasonable speed and effort.  For
the purposes of this Agreement, force majeure will mean acts of God, acts of
public enemies or terrorists, wars, other military conflicts, blockades,
insurrections, riots, epidemics, quarantine restrictions, landslides,
lightning, earthquake, floods, washouts, civil disturbances, restraints by or
actions of any governmental body (including export or security restrictions on
information, material, personnel, equipment or otherwise), Year 2000 issues and
any other acts or events whatsoever, whether or not similar to the foregoing,
not within the control of the Party claiming excuse from performance, which by
the exercise of due diligence and commercially reasonable effort that Party
will not have been able to overcome or avoid. 
If the notifying Party cannot remedy the force majeure situation and
resume satisfactory performance within thirty (30) calendar days of the notice,
the other Party may at its option immediately terminate this Agreement.

 

10.4                           Each Party agrees to comply with all applicable country,
Federal, State, and Local laws, rules, regulations, and ordinances, including
those of

 

28

 

any duly constituted governmental authority
having jurisdiction, and including without limitation, all rules and
regulations of the Occupational Health and Safety Administration, Environmental
Protection Agency, U.S. Department of Commerce, and U.S. Department of
Transportation, as applicable.  Each
Party will do all things necessary to: (a) obtain in a timely manner all
required licenses and approvals; and (b) comply with all applicable laws, rules
and regulations, including, but not limited to, the Regulations of the United
States Government relating to the export and reexport of technical data,
commodities, and products produced as a result of the use of such data.  Each Party hereto agrees that it will not
export or reexport, directly or indirectly, any technology, software and/or
commodities furnished under this Agreement, or the direct product thereof, to
any country, or the nationals thereof, specified in such laws, rules,
regulations, and ordinances referred to above as an unauthorized destination
without first obtaining, as applicable, U.S. Government approvals.

 

10.5                           The captions used in this Agreement are for convenience of
reference only and are not to be used in interpreting the obligations of the
Parties under this Agreement.

 

10.6                           Nothing contained herein, or done in pursuance of this
Agreement, will constitute the Parties as entering into a joint venture or
partnership or will constitute either Party hereto the agent for the other
Party for any purpose or in any sense whatsoever.

 

10.7                           Either Party may disapprove the assignment of any of its
former employees to perform work under this Agreement on its premises by the
other Party and such personnel will not be so assigned.  Each Party will take

 

29

 

appropriate preventive steps, before the assignment of any of
its employees to perform work under this Agreement, that such Party reasonably
believes will ensure that its employees will not engage in inappropriate
conduct while on the other Party’s premises. 
Inappropriate conduct will include, but not be limited to: (a) being under
the influence of, or affected by, alcohol, illegal drugs or controlled
substances or engaging in their use, distribution or sale; (b) the possession
of a weapon of any sort; and (c) harassment, threats or violent behavior.

 

10.8                           Representatives and personnel of each Party, during the time
they are present on the premises of the other Party will be subject to all
rules and regulations prevailing on such premises.  Each Party will be responsible for the payment of all
compensation and expense of its respective representatives and personnel.  None of the representatives or personnel of
either Party will be considered, for any reason, to be an employee or agent of
the other.

 

10.9                           Each Party represents that it has, or will have in place,
established procedures and agreements with its Subsidiaries, employees or
others, including subcontractors and vendors, whose services the Party may
require, sufficient to enable the Party to comply with all the provisions of
this Agreement.

 

10.10                     Any written notice or communication required to be made or
given to either Party hereto, pursuant to this Agreement, will be effective
upon delivery and will be sent by facsimile, reputable air courier or other
means providing verification of delivery, and addressed as set forth below, or
to such other address as is designated by written notice given to the other
Party:

 

30

 

10.10.1                         In the case of IBM:

 

      Director of Licensing

      International Business Machines Corporation

      North Castle Drive, MD NC119

      Armonk, New York, 10504-1785

      United States of America

      FAX: (914) 765-4380

 

with
a copy to:

 

      IP Counsel, East Fishkill

      International Business Machines Corporation

      2070 Route 52

      Hopewell Junction, New York, U.S.A., 12533-6531

      Fax: (845) 892-6363

 

10.10.2                        In the case of IBIS:

 

      Debra L. Nelson

      IBIS Technology Corporation

      32A Cherry Hill Drive

      Danvers, MA 01923

      Fax:  (978) 777-6570

 

10.11                     In no event will a Party be liable to the other Party for
incidental damages, lost profits, lost savings or any other such damages,
including consequential damages, regardless of whether the claim is for breach
of contract, breach of warranty, tort (including negligence), failure of a
remedy to accomplish its purpose or otherwise, even if such Party has been
advised of the possibility of such damages.

 

10.12                     No failure on the part of any Party to exercise, and no delay
in exercising, any right, power, or remedy hereunder will operate as a waiver

 

31

 

thereof or as a waiver of any other right, power, or remedy
hereunder or to the performance of any Party; and no single or partial exercise
by a Party of any right, power, or remedy hereunder will preclude any other or
further exercise thereof or the exercise of any other right, power, or remedy.

10.13                     Except for obligations under Section 5, and 10.1, each
Party’s maximum cumulative liability to the other Party for any and all causes
of action arising hereunder or in any way relating thereto, regardless of form,
shall be limited to five hundred thousand dollars (US$500,000.00).

 

10.14                     For the period of the Term, each Party agrees not to directly
solicit or recruit employees of the other Party who: (a) are directly involved
in the Project; or (b) have been or are assigned to perform work under this
Agreement.  This does not restrict
general solicitations for employment or the right of any employee of one Party,
on that employee’s own initiative or in response to general solicitations, to
seek employment from the other Party.

 

10.15                     Neither party will assign this agreement to a third party,
except as follows.  Either Party may
assign its rights, privileges, and obligations under this Agreement in
connection with a sale or other transfer of such Party’s entire business
related to production, development and sale of SOI wafers.  For the avoidance of doubt: (a) a merger
with, (b) sale of more than fifty per cent of the stock to, or (c) acquisition
by, a third party is included in the scope of this Section 10.15.  Except as provided in the following Section
10.15.1, no other assignment of this Agreement, or assignment of rights or
delegation of obligations hereunder, is permitted.  Any attempted assignment or delegation in derogation of the
foregoing shall be void.

 

32

 

10.15.1           IBM may, in its sole discretion, assign its right to receive
payments from IBIS under this Agreement to a third party.

 

10.16                     Subject to the provisions of Section 4, neither Party will
disclose the existence, terms and conditions, or subject matter of this
Agreement.

 

10.17                     This Agreement will not be binding upon the Parties until it
has been signed below by or on behalf of each Party, in which event it will be
effective as of the Effective Date. 
This Agreement constitutes the entire agreement between the Parties with
respect to the subject matter hereof and will supersede all contemporaneous and
previous communications, understandings and agreements, whether oral or
written, between the Parties relating to the subject matter hereof.  No amendment or modification of this
Agreement will be valid or binding upon the Parties unless made in writing and
signed on behalf of such Parties by their respective authorized representatives.  The requirement of a signed writing may only
be waived in a signed writing.

 

####

 

33

 

    IN WITNESS WHEREOF, the Parties have caused this Agreement to
be executed by their duly authorized representatives, who by their signature
represent that they are so authorized, to be effective as of the Effective
Date.

 

 

	
  ACCEPTED AND AGREED TO:

  	
   

  	
  ACCEPTED AND AGREED TO:

  	
   

  
	
  IBIS TECHNOLOGY

  CORPORATION

  	
   

  	
      INTERNATIONAL
  BUSINESS

    MACHINES CORPORATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/Martin J. Reid

  	
   

  	
  By:

  	
  /s/Bijan Divari

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Martin J. Reid

  President

  IBIS Technology Corporation

  	
   

  	
  Bijan Davari

  Vice President, Technology

  and Emerging Products

  IBM Microelectronics Division

  2070 Route 52

  Hopewell Junction, NY 12533

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date

  	
  November 14, 2002

  	
   

  	
  Date

  	
  November 22, 2002

  	
   

  
										

 

34

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