Document:

exv10w7

Exhibit 10.7

LICENSE AGREEMENT

(ModularBCD)

DATED March 18, 2005

BETWEEN

ADVANCED ANALOGIC TECHNOLOGIES INC.

AND

MAGNACHIP SEMICONDUCTOR, LTD.

 

 

			
	[*****] 	 -	 Portions of this exhibit are subject to a request for confidential treatment and
have been redacted and filed separately with the Securities and Exchange Commission.

 

LICENSE AGREEMENT 

(ModularBCD) 

     This agreement (the “Agreement”) is made effective as of March 18, 2005, by and between
Advanced Analogic Technologies Inc., a California corporation with its principal place of business
located at 830 E. Arques Ave, Sunnyvale California 94085 (hereafter called “AATI”) and MagnaChip
Semiconductor, Ltd. with its principal place of business located at 1, Hyangjeong-dong, Hungduk-gu,
Cheongju-si, Chungbuk, South Korea (hereafter called “MAGNACHIP”).

RECITALS 

     WHEREAS, AATI and/or its affiliates own certain technology related to ModularBCD
Technology (as defined below), and

     WHEREAS, MAGNACHIP wishes to obtain a license to certain technology of AATI, and AATI has
agreed to license such technology pursuant to the terms and conditions set forth herein, including
a use restriction, and

     WHEREAS, AATI wishes to provide for the manufacture, assembly, test and delivery of
certain products (defined below), and MAGNACHIP has agreed to undertake such obligations pursuant
to the terms and conditions set forth in the Wafer Supply Agreement dated June 4, 2002 (“Wafer
Agreement”), as those terms and conditions are amended by an Amendment effective on the Effective
Date hereof.

     NOW, THEREFORE, the MAGNACHIP and AATI agree as follows:

AGREEMENT 

     1. DEFINITIONS. The following terms will have the meanings attributed thereto,
unless otherwise provided herein:

     1.1 “AATI Field” means the design, manufacturing, testing, sale, offer for sale, or
distribution of Products, which are using AATI ModularBCD Technology described hereunder.

     1.2 “AATI Improvements” shall have the meaning attributed thereto in Section 3.3.

     1.3 “AATI Intellectual Property” means those Intellectual Property Rights that AATI
owns or has a right to license consistent with the scope of the license hereunder.

     1.4 “AATI Licensed Products” means those AATI Products whose manufacture includes
the use of MAGNACHIP Technology.

     1.5 “AATI Products” means those Low-Voltage Power Management Products of AATI,
including, but not limited to, those identified on Exhibit A, as may be amended by
AATI from time to time.

     1.6 “AATI IC Technology” means the designs, technology and other information
provided by AATI to MAGNACHIP related to ModularBCD Technology and related device and
processing under this

 

 

Agreement. AATI IC Technology includes the processes, methods, devices and apparatus
described in the United States and foreign patent and patent applications listed on
Exhibit B along with any improvements, derivatives, continuation patents, foreign
filings, continuation in part (CIP) applications, and all work by AATI or its employees
related to ModularBCD Technology preceding said applications (dating back to September 1998)
continuing through the term of this Agreement. AATI IC Technology also includes the features,
devices, processes, apparatus and methods identified in Exhibit C and protected by the
Patents in Exhibit B. For purposes of clarity and notwithstanding the above definition of AATI
IC Technology, AATI IC Technology does not include discrete trench-gated vertical power
MOSFETs and AATI’s proprietary TrenchDMOS Technology used to produce discrete vertical power
MOSFETs, circuit designs, packaging technology, the multi-chip combination of TrenchDMOS or
discrete transistors with integrated circuits containing ModularBCD Technology or other
integrated circuits, and other related designs, technologies and information.

     1.7 “Basic Semiconductor Technology” means designs, technology and other information
used to design, manufacture and test semiconductors, including etching, depositions,
diffusion, cleaning, photolithography, and other semiconductor processes or sequences (such as
LOCOS). Basic Semiconductor Technology does not include process architecture or the process
integration (and resulting process flow) of an integrated process such as ModularBCD
Technology. It also does not include “specialized” unit process steps such as directionally
deposited oxides, chained and non-Gaussian implants, etc.

     1.8 “Battery Management” means a Low-Voltage Power Management Products comprising
any device or solution that manages battery performance, including controls the charging and
discharging of batteries, electrochemical cells, and fuel cells. Battery Management includes
battery charger circuits, protection of LiIon or Lithium polymer batteries from potentially
damaging overcharged and over-discharged conditions, the multiplexing and sequencing of
different batteries in multi-battery systems (e.g. in notebook computers), and voltage
clamping to limit the maximum voltage output from a charger circuit. Battery Management
functions typically include sensing the battery’s condition (voltage, temperature, total
coulombs) and interrupting or permitting current flow (switching).

     1.9 “Competing Products” means products that compete with the AATI Products after
the date of this Agreement. If any portion of a Product includes or integrates the functions
of a Competing Product, then such product is a “Competing Product.”

     1.10 “Confidential Information” means any information disclosed by either Party (the
“Disclosing Party”) to the other Party (the “Receiving Party”) under this Agreement, either
directly or indirectly, in writing, orally or by inspection of tangible objects (including
without limitation documents, prototypes, samples and equipment), which is designated as
“Confidential,” “Proprietary” or some similar designation. Information communicated orally or
through inspection shall be considered Confidential Information if such information is
confirmed in writing as being Confidential Information within a reasonable time after the
initial disclosure. Confidential Information may also include information disclosed to a
Disclosing Party by Third Parties. Notwithstanding any designation of “Confidential”,
Confidential Information includes the AATI IC Technology.

     1.11 “Effective Date” means the date at which this Agreement is signed by both
Parties.

     1.12 “Facility” means the MAGNACHIP-owned wafer fabrication facility located in
Gumi, Korea and Cheong-ju, Korea or such other MAGNACHIP-owned facility that the Parties may
agree upon in writing.

 

 

     1.13 “MAGNACHIP Field” means Basic Semiconductor Technology, along with the design,
manufacture, test, and sales of products not related to analog semiconductors, power
semiconductors, or the AATI Field (such as memory ICs, digital ICs, displays, sensors, and
other non-analog non-power semiconductor products).

     1.14 “MAGNACHIP Licensed Products” means Non-Competing Products of MAGNACHIP, i.e.
Non-Competing Products marketed and sold under a MAGNACHIP-owned brand or sold by MAGNACHIP to
a Third Party as wafer sales, die sales or finished good sales through MAGNACHIP’s foundry
services business that include, employ or rely upon AATI IC Technology.

     1.15 “MAGNACHIP Improvements” shall have the meaning attributed thereto in Section
3.3.

     1.16 “MAGNACHIP Intellectual Property” means those Intellectual Property Rights that
MAGNACHIP owns or has a right to license consistent with the scope of the license hereunder.

     1.17 “MAGNACHIP Technology” means the Basic Semiconductor Technology, and technology
not related to analog and power semiconductor manufacture such as memory IC and digital IC
processes, provided by MAGNACHIP to AATI.

     1.18 “Intellectual Property Rights” means any intellectual property right existing
now or during the term of this Agreement recognized throughout the world, including without
limitation copyright, maskwork rights, patent rights, trade secrets and know-how. For the
purposes of this Agreement, “Intellectual Property Rights” excludes trademarks, service marks
and domain names.

     1.19 “Improvements” means all copyrightable material, notes, records, drawings,
designs, inventions, patents, improvements, developments, discoveries and trade secrets first
conceived, made or discovered by a Party during the period of this Agreement which relate in
any manner to, or are derived from, the AATI IC Technology, the MAGNACHIP Technology or
Confidential Information licensed or provided hereunder, including any enhancements,
modifications or derivations thereto.

     1.20 “Joint Improvements” shall have the meaning attributed thereto in Section 3.3.

     1.21 “Load Switching and Power Supervision” involves Low-Voltage Power Management
Products which shuts-off or limits loads to save power when the load is not in use (load
switching) or to supervise power by sensing when an adequate power supply condition is reached
(voltage monitoring as a power good indicator), including the sequencing of multiple power
supplies. Voltage references, along with voltage detectors and microprocessor reset ICs are
considered as power supervision type products. Some load switching functions may include
slow-turn-on to limit in-rush current (and over-current) or over-temperature protection to
prevent damage during a shorted load condition.

     1.22 “Low-Voltage Power Management Products” means those products that have low-
voltage power management characteristics. For the purpose of this Agreement, “Low-Voltage”
shall be defined as semiconductor components rated at 35 volts or less. “Power Management
Products” include the following semiconductor components: (1) Integrated Circuits, (2) Power
Integrated Circuits, (3) Discrete Power MOSFETs, (4) Intelligent and Application-Specific
Power MOSFETs, and (5) Multi-chip Combinations of ICs and Power MOSFETs which include any
Product controlling the flow of power in the

 

 

following broadly defined functions: (1) Port Protection, (2) Battery Management, (3)
Load Switching & Power Supervision, and/or (4) Voltage Regulation & DC/DC Conversion.

     1.23 “Other Technology” means all designs, technology and information other than
AATI IC Technology are beyond the scope of this Agreement. Other Technology includes, without
limitation, TrenchDMOS Technology (as defined in the License Agreement (TrenchDMOS) between
AATI and MAGNACHIP of even date with this Agreement.

     1.24 “Port Protection” means Low-Voltage Power Management Products having functions
that include limiting current, clamping voltage, providing ESD protection, facilitating
over-temperature protection, and preventing operation during under-voltage or shorted-load
conditions. Port Protection includes protecting any input or output pin (or connector) from
damage, especially during the connection or disconnection of components while power is
available at the connector (hot plugging) such as PC Cards (PCMCIA), Universal Serial Bus
(USB), IEEE1394 (FireWire), Bluetooth, camera modules, external peripherals, and PCB (printed
circuit board) hot plugging. Port Protection may also include protocol-specific functions such
as sensing of the port condition, power supply voltage sequencing, noise suppression between
loads, and in-rush induced noise spikes. Port Protection may also include supplying power to a
port (such as USB on-the-go) or by driving an external load (such as a speaker in a class D
audio output).

     1.25 “ModularBCD Technology” means that technology related to the fabrication of
electronic devices and semiconductor integrated circuits capable of monolithically integrating
fully-isolated devices without the need for epitaxial layers or high-thermal-budget processing
(including long or high-temperature diffusions, deep diffusions, or any processes that
substantially redistribute dopant profiles from their as-implanted distributions through
thermal diffusion). ModularBCD Technology is distinguished by its extensive use of high-energy
ion implantation methods (including multi-energy chained-implants) to form and isolate any and
various combinations of electronic devices including N-channel and P-channel MOSFETs (i.e.
CMOS), NPN and PNP bipolar transistors (i.e. complementary bipolars), DMOS (double-junction)
transistors, lateral and quasi-vertical trench-gated power MOSFET devices, along with on-chip
passives (such as high-sheet-resistance resistors and poly-to-poly capacitors). Isolation of
components is achieved using deeply-implanted junctions without requiring epitaxy, isolation
diffusions, trench isolation, or SOI (silicon-on-insulator) materials. ModularBCD Technology
can also be characterized by its multi-voltage capability whereby components and circuitry
operating at different voltages can be integrated and isolated with little or no interaction
among the differing voltage components, and with no substantial area penalty for mixing
voltages within the integrated circuit. ModularBCD Technology includes but is not limited to
the processes, methods, devices and apparatus described in United States and foreign Patent
and Patent applications listed in Exhibit B along with any improvements, derivatives,
continuation patents, foreign filings, continuation in part (CIP) applications, and all work
by AATI or its employees related to ModularBCD Technology preceding said applications (dating
back to September 1998) continuing through the term of this Agreement. ModularBCD Technology
features includes but is not limited to the features, device structures, apparatus and
fabrication methods listed in Exhibit C and protected by the Patents in Exhibit B.

     1.26 “Net Sales” means the gross selling die or wafer price (depending on how such
is sold) invoiced by MAGNACHIP, its affiliates and authorized manufacturers on sales or other
dispositions of MAGNACHIP Licensed Products, less the following items to the extent they are
included in such gross revenues and separately stated on the invoice: (i) normal and customary
rebates, refunds and discounts actually given by seller, (ii) insurance, transportation and
other delivery charges actually paid by seller, (iii) sales, excise, value-added and other
taxes, (iv) testing and packaging costs and (v) wafer thinning, and other

 

 

outside expenses incurred in manufacturing, but not included in the Projected Wafer
Costs. Sales between MAGNACHIP, its affiliates and authorized manufacturers shall not be
included in Net Sales (but sales or other dispositions by MAGNACHIP, its affiliates and
authorized manufacturers to third parties shall be counted as Net Sales). If any MAGNACHIP
Licensed Products are sold or transferred
in whole or in part for consideration other than cash, Net Sales shall include the fair market
value of such MAGNACHIP Licensed Product. For purposes of this definition of Net Sales,
“authorized manufacturer” means any entity (other than a MAGNACHIP affiliate) that
manufacturers (including any assembly and packaging of MAGNACHIP Licensed Products) and sells
MAGNACHIP Licensed Products under authority, directly or indirectly, from MAGNACHIP.

     1.27 “Non-Competing Products” means Products that either (i) Operate above 35V, or
(ii) Do NOT perform Power Management functions (namely Port Protection, Load Switching & Power
Supervision, Battery Management, or Voltage Regulation & DC/DC Conversion). Specific examples
of Non-Competitive Products are listed in Exhibit D.

     1.28 “Party” means each of AATI and MAGNACHIP (and collectively “Parties” means both
MAGNACHIP and AATI). The term Party (whether referred to as a “Party” or “Parties” or “AATI”
or “MAGNACHIP”) does not include any affiliates of such Party except for wholly owned
subsidiaries, unless expressly agreed upon in writing by both Parties. In addition, the terms
Party, AATI, MAGNACHIP and Parties shall not include any assignees or successors in interest
except as provided for under Section 12.3.

     1.29 “Products” means semiconductor devices; integrated circuits; discrete
transistors; or semiconductor components; whether in wafer form or separated into individual
dice (chips), whether assembled into packages, modules, chip-scale packages, bumped, or
otherwise unassembled, whether tested or untested. Products include both Competing Products
and Non-Competing Products.

     1.30 “Release-to-Design (RTD) Date” means the date when IC circuit design using
ModularBCD Technology can commence. The RTD Date requires the completion of working test
devices and the extraction of SPICE simulation models. Thereafter design of the first
integrated circuit product can commence.

     1.31 “Release-to-Manufacturing (RTM) Date” means the date when the first integrated
circuit Product using ModularBCD Technology is successfully qualified. The RTM Date requires
the successful fabrication and burn-in qualification of three (3) wafer runs of said Product.
Thereafter both Product and ModularBCD Technology are qualified and manufacturing production
can commence.

     1.32 “Third Party” means any company, corporation, partnership, person or commercial
entity other than a Party.

     1.33 “Voltage Regulation & DC/DC Conversion” means Low-Voltage Power Management
Products that regulate voltage (or in some cases current) by linear (i.e. linear regulators or
LDO’s), switched capacitive (i.e. charge pumps), and switched inductor (i.e. switching or PWM
regulator) methods. The input voltage is generally stepped up and/or down in voltage by the
converter circuitry then the output is regulated by some sort of feedback to produce constant
output voltage (or in some cases constant output current). Linear regulators and charge pumps
need external capacitors while switching regulators also require one or more inductors.
Voltage Regulation applications include regulators for cell phones, CPUs, chip sets, displays,
RF ICs, DSPs, memory, data busses, whole systems, and more. Constant current applications
include LED drivers for portable electronics display backlights.

 

 

     1.34 “Projected Wafer Cost” means the estimated cost of a wafer, including the
substrate, but not including back grind or project costs. This will also be the same cost that
AATI will pay directly for said wafers from MAGNACHIP. The projected wafer costs shall be
mutually agreed upon by both parties and both parties agree to revisit the projected wafer
cost on an annual basis in the future.

     1.35 “Customer” means any third party purchaser of products under this Agreement who
is not an affiliate, parent company or subsidiary of MAGNACHIP or AATI.

     2. LICENSE

     2.1 License by AATI.

     (a) Subject to the terms and conditions set forth in this Agreement, AATI
hereby grants and agrees to grant to MAGNACHIP, and MAGNACHIP accepts, the following
license:

     (i) a non-exclusive and non-transferable (except pursuant to Section
12.3), license under the AATI Intellectual Property to:

     (1) make at the Facility (but not have made elsewhere), design,
develop, offer to sell, sell, use, import, and otherwise dispose of the
MAGNACHIP Licensed Products;

     (2) practice, at the Facility, any process or method involved in
the manufacture or use of MAGNACHIP Licensed Products; and

     (3) to make, use and have made any manufacturing apparatus
involved in the manufacture or use of MAGNACHIP Licensed Products.

     (ii) a non-exclusive nontransferable (except pursuant to Section 12.3)
license under the AATI Intellectual Property to use the AATI IC Technology for
the sole purpose of manufacturing and repairing AATI Products, at the Facility,
for distribution to AATI.

     (iii) a non-exclusive and non-transferable (except pursuant to Section
12.3), license on a world-wide basis under the AATI Intellectual Property to use,
reproduce modify and make derivative works of the copyrightable materials of the
AATI IC Technology solely for use in connection with the exercise of the license
granted in Section 2.1(a)(i) and (ii).

     (b) MAGNACHIP Licensed Products shall be royalty-bearing in accordance with
Section 5.

     (c) MAGNACHIP shall have no license under the AATI Intellectual Property to
supply AATI Products or Competing Products to any party other than AATI without AATI’s
prior written approval except as provided for in Section 2.3. Further, for clarity and
notwithstanding anything to the contrary set forth in this Agreement, to the extent (i)
a MAGNACHIP License Product includes or relies upon both AATI IC Technology and Other
Technology, or (ii) the practice of any rights granted under this Section 2.1 infringes
or misappropriates any AATI Intellectual Property due to such Other Technology, then
(iii) the use of the Other Technology shall not be considered licensed under this
Agreement, but shall instead require a

 

 

separate license from AATI (which AATI may grant or withhold in its sole
discretion). The parties acknowledge that AATI and MAGNACHIP have executed a separate
License Agreement (TrenchDMOS) concurrently with this Agreement.

     (d) MAGNACHIP shall have the right, upon prior approval of AATI in writing, to
sublicense to Third Parties its right under Section 2.1(a). Except as expressly provided
in this
Section 2.1, MAGNACHIP shall have no right to sublicense the rights granted in this
Section 2.1.

     2.2 License by MAGNACHIP:

     (a) Subject to the terms and conditions set forth in this Agreement, MAGNACHIP
hereby grants and agrees to grant to AATI, and AATI accepts, a non-exclusive,
irrevocable, royalty-free, fully paid-up and non-transferable (except pursuant to
Section 12.3 , and, under no circumstances, to any other manufacturer of the Products
apart from MAGNACHIP), and only for the Term of this Agreement, license on a world-wide
basis under the MAGNACHIP Intellectual Property to:

     (i) make and have made AATI Licensed Products solely in the Facility,

     (ii) design, develop, offer to sell, sell, use, import and otherwise
dispose of AATI Licensed Products made or to be made in the Facility,

     (iii) practice, solely within the Facility, any process or method
involved in the manufacture of the AATI Licensed Products,

     (iv) to practice any process or method involved in the use of the AATI
Licensed Products made in the Facility, and

     (v) make and have made any manufacturing apparatus involved in the
manufacture or use of AATI Licensed Products that incorporates or is based upon
MAGNACHIP Technology and to use such apparatus exclusively at the Facility.

     2.3 Competing Products. In no event shall MAGNACHIP utilize any AATI IC
Technology in connection with the design, manufacturing, distribution or sale of any Competing
Product without the prior written permission of AATI. MAGNACHIP agrees to provide AATI at
least thirty (30) days prior written notice prior to MAGNACHIP’s manufacture, distribution or
sale (or assisting others with regard to the same) of any Competing Product. At no time my
AATI utilize MAGNACHIP Licensed Products or MAGNACHIP Intellectual property in connection with
the design or manufacturing of AATI Products or AATI Licensed Products outside of MAGNACHIP’
Facility without MAGNACHIP’ expressed written approval.

     3. OWNERSHIP AND RESERVATION

     3.1 By AATI. Subject to the rights granted to or retained by MAGNACHIP under
Sections 2, 3.2 and 3.3, the Parties acknowledge and agree that as between the Parties, all
title to and ownership of all AATI Intellectual Property and AATI IC Technology not expressly
granted herein shall remain the sole and exclusive property of AATI. Nothing herein shall be
construed as granting MAGNACHIP any ownership rights in the AATI Intellectual Property and
AATI IC Technology. AATI grants no rights, license or title to its technology beyond the scope
of this Agreement, unless otherwise agreed to in writing by both parties.

 

 

     3.2 By MAGNACHIP: Subject to the rights granted to or retained by AATI under
Sections 2, 3.1 and 3.3, the Parties acknowledge and agree that as between the Parties, all
title to and ownership of all MAGNACHIP Technology and MAGNACHIP Intellectual Property not
expressly granted herein shall remain the sole and exclusive property of MAGNACHIP. Nothing
herein shall be construed as granting AATI any ownership rights in the MAGNACHIP Intellectual
Property and
MAGNACHIP Technology. MAGNACHIP grants no rights, license, or title to its technology
beyond the scope of this Agreement, unless otherwise agreed to in writing by both parties.

     3.3 Improvements. With respect to any Improvements, ownership shall be
allocated as follows:

     (a) AATI Improvements. All Improvements to AATI IC Technology that are created
or conceived solely by AATI shall be solely owned by AATI (the “AATI Improvements”).
AATI shall own all right, title, and interest in the AATI Improvements and all
Intellectual Property therein (excluding MAGNACHIP’ rights in and ownership of any Joint
Improvement under Section 3.3(c) below). AATI shall have the exclusive right to apply
for or register any patents, mask work rights, copyrights, and such other proprietary
protections with respect thereto. Nothing herein shall be construed as granting
MAGNACHIP any ownership rights in the AATI Intellectual Property and AATI IC Technology.
AATI grants no rights, license or title to such technology and/or Intellectual Property
outside the scope of this Agreement.

     (b) MAGNACHIP Improvements: All Improvements to MAGNACHIP Technology that are
created or conceived solely by MAGNACHIP shall be solely owned by MAGNACHIP (the
“MAGNACHIP Improvements”). MAGNACHIP shall own all right, title, and interest in the
MAGNACHIP Improvements, and all Intellectual Property therein (excluding AATI’s rights
in and ownership of any Joint Improvement under Section 3.3(c) below). MAGNACHIP shall
have the exclusive right to apply for or register any patents, mask work rights,
copyrights, and such other proprietary protections with respect thereto. Nothing herein
shall be construed as granting AATI any ownership rights in the MAGNACHIP Intellectual
Property and MAGNACHIP Technology. MAGNACHIP grants no rights, license or title to such
technology and/or Intellectual Property outside the scope of this Agreement.

     (c) Joint Improvements. Any Improvement which is jointly created or conceived
by the Parties pursuant to this Agreement shall:

     (i) if created or conceived as an Improvement to AATI IC Technology as
a result of the licenses granted to MAGNACHIP in Section 2 or access to the AATI
IC Technology or AATI Confidential Information, be considered:

     (1) a “Joint Improvement” under this Section 3.3(c), if falling
outside the AATI Field; or

     (2) an “AATI Improvement” under Section 3.3(a), if falling within
the AATI Field; and

 

 

     (ii) if created or conceived as an Improvement to MAGNACHIP Technology
as a result of the licenses granted to AATI in Section 2 or access to the
MAGNACHIP Technology or MAGNACHIP Confidential Information, be considered:

     (1) a “Joint Improvement” under this Section 3.3(c), if falling
outside the MAGNACHIP Field; or

     (2) a “MAGNACHIP Improvement” under Section 3.3(b), if falling
within the MAGNACHIP Field.

     (iii) The Parties shall cooperate with each other in obtaining and
securing all possible United States and foreign rights to the Joint Improvements
and enforcing such
rights. The Parties agree to meet and confer prior to any public
dissemination, use or sale of Joint Improvement in order to ensure that any
related patent applications have been filed prior to such event, and shall not
make such dissemination, use or sale of Joint Improvement until related patent
applications have been filed. The Parties shall share equally in the costs of
obtaining Joint Improvement rights which are jointly owned, including but not
limited to the costs of preparing, filing and prosecuting applications and patent
maintenance fees. If a Party determines that it does not want to pursue or
continue to pursue obtaining a particular Joint Improvement right which otherwise
would be jointly owned, and the other Party elects to do so (the “electing
Party”), the cost related to that particular Joint Improvement right shall be
borne solely by the electing Party and the electing Party shall have sole and
full ownership of such Joint Improvement right, including any derivatives,
continuations, divisions, reissues and reexaminations of that Joint Improvement
right.

     (iv) MAGNACHIP hereby irrevocably transfers, conveys and assigns to
AATI all of its right, title, and interest in any Improvements described in
Section 3.3(c)(i)(B) (AATI Improvement). MAGNACHIP shall execute such documents,
render such assistance, and take such other action as AATI may reasonably
request, at AATI’s expense, to apply for, register, perfect, confirm, and protect
AATI rights to such Improvements, and all Intellectual Property therein. AATI
hereby irrevocably transfers, conveys and assigns to MAGNACHIP all of its right,
title, and interest in any Improvements described in Section 3.3(c)(ii)(B)
(MAGNACHIP Improvement). AATI shall execute such documents, render such
assistance, and take such other action as MAGNACHIP may reasonably request, at
MAGNACHIP’s expense, to apply for, register, perfect, confirm, and protect
MAGNACHIP’s rights to such Improvements, and all Intellectual Property therein.

     (v) MAGNACHIP and AATI shall each have the right to exploit all Joint
Improvements (that are not AATI Improvements or MAGNACHIP Improvements) without
being required any additional payment to the other, provided however, in the
event a Party refuses to cooperate and pay costs related to the Joint Improvement
under Section 3(c)(iii), such Party shall have no rights to use or exploit such
Joint Improvement under the terms of this Agreement.

     (d) Independently Developed. Notwithstanding the above, to the extent
that any Improvements is solely created by a Party under this Agreement, without
reference or use of the other Party’s Technology, Intellectual Property or Confidential
Information (as defined below), then such Party shall exclusively own such Improvements.

     3.4 Waiver of Moral Rights. Each party hereby waives any and all “moral
rights,” meaning any right to identification of authorship or limitation on subsequent
modification that a party (or its employees, agents or consultants) has or may have in the
other party’s Improvements, to the extent recognized by applicable law consistent with Berne
Convention, art. 6bis.

 

 

     3.5 Attorney in Fact. Each Party assigning any rights under Section 3
hereunder (the “Assignor”) agrees that if the other Party (the “Assignee”) is unable because
of Assignor’s unavailability, dissolution or incapacity, or for any other reason, to secure
Assignor’s signature to apply for or to pursue any application for any United States or
foreign patents or mask work or copyright registrations covering the inventions assigned to
Assignee above, then Assignor hereby irrevocably designates and appoints the company and its
duly authorized officers and agents as Assignor’s agent and attorney in fact, to act for and
in Assignor’s behalf and stead to execute and file any such applications and to do all other
lawfully permitted acts to further the prosecution and issuance of patents, copyright and mask
work registrations thereon with the same legal force and
effect as if executed by Assignor. This power of attorney is deemed coupled with an
interest and is irrevocable.

     3.6 Non-Exclusive Arrangement. Nothing in this Agreement shall be construed
to limit AATI’s rights to manufacture, distribute or take any other action with respect to the
AATI Products, AATI IC Technology, AATI Improvements or AATI Confidential Information or to
authorize any other persons to do any of the foregoing except as it relates to MAGNACHIP
Technology or Improvements to MAGNACHIP Technology pursuant to Section 3.3. Likewise nothing
in this agreement shall be construed to limit MAGNACHIP’s rights to manufacture, distribute or
take any other action with respect to the MAGNACHIP Products, MAGNACHIP Technology, MAGNACHIP
Improvements or MAGNACHIP Confidential Information or to authorize any other persons to do any
of the foregoing, except as it relates to AATI IC Technology or Improvements to AATI IC
Technology pursuant to Section 3.3.

     4. TECHNOLOGY DELIVERY & IMPLEMENTATION.

     4.1 AATI Technology. AATI will deliver to MAGNACHIP the AATI IC Technology
promptly after the Effective Date in a form that is mutually acceptable to both Parties. AATI
deliverables to MAGNACHIP are outlined in Exhibit E. Thereafter, AATI may (but is not
obligated to) supplement the AATI IC Technology.

     4.2 MAGNACHIP Technology: Upon the recommendation of MAGNACHIP or upon
agreement of both Parties, MAGNACHIP will deliver to AATI the MAGNACHIP Technology listed in
Exhibit F that may be applicable and useful in adapting and implementing the AATI IC
Technology in said Facility. It is understood by both Parties that the applicability of such
MAGNACHIP Technology to AATI IC Technology Implementation may vary by Facility. Thereafter, as
agreed upon by both Parties, certain processing steps, methods, or features in the AATI IC
Technology (such as unit process steps in the ModularBCD Technology process flow) may be
adapted to incorporate MAGNACHIP Technology or variants thereof. MAGNACHIP may (but is not
obligated to) supplement the MAGNACHIP Technology at a later date.

     4.3 AATI IC Technology Implementation. Both Parties agree to implement with
commercially reasonable effort, the AATI IC Technology in said Facility in accordance with the
procedures for AATI IC Technology Implementation as described in Exhibit G.

     (i) Adapting AATI IC Technology for Facility. In the event that AATI IC
Technology is adapted or modified to best match or fit said Facility by utilizing
MAGNACHIP Technology in certain steps or processes, such steps or techniques that
constitute MAGNACHIP Technology shall remain the property of MAGNACHIP. Those portions
of the AATI IC Technology not using MAGNACHIP Technology along with the integrated
process flow of ModularBCD Technology constitute AATI IC Technology and shall remain the
property of AATI.

 

 

     (ii) Initial AATI IC Technology Implementation. The initial implementation of
AATI IC Technology in said Facility does NOT constitute an Improvement to AATI IC
Technology.

     (iii) Initial AATI IC Technology Implementation Milestones. Both Parties will
use commercially reasonable efforts to meet the milestones of the Initial AATI IC
Technology Implementation including efforts to meet the objective Release-to-Design
(RTD) Date, and the Release-to-Manufacturing (RTM) Date.

     5. ROYALTIES AND PAYMENT TERMS.

     5.1 Royalty.

     (a) MAGNACHIP shall pay [*****] royalty for Products its produces for and sells to
AATI (or AATI’s affiliate as designated in writing by contract from AATI). AATI’s wafer price
from MAGNACHIP is covered under the AATI MAGNACHIP supply agreement and is not covered by this
Agreement.

     (b) In the case of Non-Competing Products, MAGNACHIP shall pay AATI [*****] royalty
of Net Sales of all wafers produced using or incorporating the AATI Intellectual Property
licensed herein (such MAGNACHIP payment to be offset by any payment due from AATI pursuant to
Section 5.4 below); provided, however, that the Parties agree that the foregoing royalty rate
is based on a presumption of a [*****] withholding tax rate as of the Effective Date, and so
the Parties agree to negotiate in good faith an increase or decrease in such royalty rate at
any time the withholding tax rate changes after the Effective Date. Customer shall be
responsible for its own designs or pay for AATI’s design with a release to AATI. Customer
and/or MagnaChip shall be responsible for the qualification, orders, shipping logistics and
quality.

     (c) In the case of Competing Products, MAGNACHIP has no license under this Agreement
to sell Competing Products to customers other than AATI (and AATI’s affiliates). In the event
that AATI has provided said customer with a license to have made, purchase, promote and sell
Competing Products, however, MAGNACHIP may, to the extent it is a qualified manufacturer
manufacture Competing Products for such licensee, to the extent authorized by AATI. In such
instances, MAGNACHIP shall pay AATI [*****] of the difference between the Net Sales of a wafer
produced using or incorporating the AATI Intellectual Property licensed herein, and the
mutually agreed upon “Projected Wafer Cost” (such MAGNACHIP payment to be offset by any
payment due from AATI pursuant to Section 5.4 below). AATI reserves the right to charge
additional consideration directly to such customers (as opposed to MAGNACHIP) for such
Competing Products. In such cases, (1) MAGNACHIP makes no representation to AATI with respect
to the qualification and product quality; (2) AATI, at its election, may choose to assist such
customers with respect to qualification and product quality; and (3) as between AATI and
MAGNACHIP. MAGNACHIP shall be responsible for shipping logistics, orders and process quality
of wafers.

     (d) Both parties shall negotiate a mutually agreeable new cost price. In any case,
both parties agree that they will review the pricing structure hereunder on an annual basis to
ensure the pricing structure is mutually agreeable, and adjust such accordingly.

     5.2 Payment. Within 30 days following the end of each calendar quarter,
MAGNACHIP and AATI shall pay their respective royalty payments on invoices paid by the third
party in U.S. Dollars and shall include a report sufficient to show the basis for calculation
of the royalty payments made hereunder, including without limitation, quantity and
identification of all Competing and Non-Competing Products

 

			
	[*****] 	 -	 Portions of this exhibit are subject to a request for confidential treatment and
have been redacted and filed separately with the Securities and Exchange Commission.

 

 

(“Report”). Upon AATI approval, in lieu of payment on a quarterly basis MAGNACHIP may pay such
outstanding royalties by issuing a credit against outstanding AATI invoices or toward new
wafer starts for Products from MAGNACHIP.

     5.3 Records and Audit. Each party shall retain records and supporting
documentation sufficient to document the fee payable under this Agreement in any particular
quarter in which this Agreement is in effect for at least three years following the end of
such quarter and its compliance with Section 5.2. Upon prior reasonable written notice of no
less than sixty (60) days by one party, the other party shall provide to a nationally
recognized independent public accounting firm (the
“Auditors”) designated in writing by that party access during normal business hours to
the audited party’s personnel, outside accountants and data and records maintained in
connection with this Agreement, in each case to the extent necessary or appropriate for the
purpose of determining whether (i) calculations of the royalties payable under this Agreement
are accurate and in accordance with this Agreement and/or (ii) MAGNACHIP has offered most
favorable pricing to AATI in accordance with Section 5.2 (an “Audit”). Audits will be
conducted no more frequently than once per calendar year. Each party agrees to use
commercially reasonable efforts to assist such Auditors in connection with such Audits. Any
such Audits shall be conducted at the requesting party’s sole cost and expense.

     5.4 Taxes. Each Party shall bear any and all taxes and other charges
incurred by or levied on it by its own country in connection with this Agreement; provided,
however, that AATI shall bear fifty percent (50%) of any withholding or similar tax for
foreign payments that is levied by the Korean Government upon any amounts due from MAGNACHIP
to AATI under this Agreement, and MAGNACHIP is entitled to offset such AATI payment obligation
from any amounts actually paid by MAGNACHIP to AATI under this Agreement, including but not
limited to amounts due pursuant to Sections 5.1(b) and 5.1(c) above. MAGNACHIP will furnish
AATI with each tax receipt issued by the Korean taxing authority to assist AATI in obtaining
the credit in the United States.

     6. WARRANTY AND DISCLAIMER.

     6.1 General. Each Party represents and warrants to the other that:

     (e) it has all requisite corporate power and authority to enter into this Agreement
and to carry out the transactions contemplated by this Agreement; and

     (f) the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated by this Agreement have been duly authorized by all requisite
corporate action on the part of such Party

     6.2 EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS SECTION 6, NEITHER PARTY
MAKES ANY OTHER WARRANTIES WITH RESPECT TO THE TECHNOLOGY AND INTELLECTUAL PROPERTY RIGHTS
LICENSED HEREUNDER, WHETHER EXPRESSED OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT.

 

 

     7. TERM AND TERMINATION OF AGREEMENT.

     7.1 Term. This Agreement shall have an initial term of three (3) years but
shall be automatically renewed thereafter (and after each subsequent renewal term) for a
renewal term of one year unless, at least sixty (60) days prior to the date of any such
renewal, either Party hereto shall have given notice in writing to the other of its intention
to terminate the Agreement. This Agreement shall thereafter be automatically terminated at the
end of the term during which such notice is given.

     7.2 Termination for Default. Should either Party materially default in the
performance of any term or condition of this Agreement (a “Default”), in addition to all other
legal rights and remedies, the other Party may terminate this Agreement by giving thirty (30)
days written notice of said Default unless such Default is corrected within the notice period.

     7.3 Termination for Bankruptcy: Either Party may terminate this Agreement by
written notice in the event that the other Party makes an assignment for this benefit of
creditors, or admits in writing inability to pay debts as they become due; or a Trustee or
receiver for any substantial part of
its assets is appointed by any court; or a proceeding is instituted under a provision of
the Federal Bankruptcy Act by or against the other Party and is acquiesced in or is not
dismissed within 60 days or results in an adjudication in bankruptcy. An assignment by AATI of
all or part of its rights to payment hereunder as part of a working capital financing shall
not be deemed cause for termination under this paragraph.

     7.4 Effect of Termination. Upon termination or expiration of this Agreement
for any reason, all licenses shall immediately terminate. Each Party shall return the
Confidential Information of the other Party within thirty (30) days after the effective date
of such termination or expiration. In addition Sections 1, 3, 5.3, 6, 7, 8, 9, 10, 11 and 12
shall survive any expiration or termination of this Agreement.

     8. INTELLECTUAL PROPERTY RIGHTS INDEMNITY.

     8.1 By MAGNACHIP:

     (a) MAGNACHIP will defend or settle, at its expense, all claims, proceedings and/or
suits brought by Third Parties against AATI, its Affiliates (including their directors,
officers, and employees) and customers alleging that the MAGNACHIP Technology as provided by
MAGNACHIP to AATI hereunder infringes or violates any patent, copyright, trade secret or other
intellectual property right (herein “Infringement Claim”) and will indemnify AATI from and pay
all litigation costs, reasonable attorney’s fees, settlement payments (subject to reasonable
approval by MAGNACHIP) and damages awarded by a court having jurisdiction over such
Infringement Claim with respect to any Infringement Claim; and provided that MAGNACHIP shall
be relieved of its obligations under this Section 8.1 unless AATI promptly notifies MAGNACHIP
in writing of any such Infringement Claim and gives MAGNACHIP sole control, full authority,
information and assistance (at MAGNACHIP’s expense) for the defense or settlement of such
Infringement Claim.

     (b) Without limiting its obligations under Section 8.1(a), when notified of an
action or motion that seeks to restrict the use, sale and/or distribution of any MAGNACHIP
Technology hereunder (or part thereof), MAGNACHIP may but is not required nor obligated to, at
its option and expense, (1) obtain the right for AATI the right to use the MAGNACHIP
Technology as licensed hereunder, (2) substitute other functionally equivalent technology that
does not infringe, or (3) modify such MAGNACHIP Technology so that it no longer infringes.

 

 

     (c) Notwithstanding any provision to the contrary, the indemnification obligations
in this Section 8.1 shall not be applicable to the extent an Infringement Claim arises from
(1) use of the MAGNACHIP Technology in violation of the license terms herein, (2) the
modification of any MAGNACHIP Technology by AATI, or (3) a combination of the MAGNACHIP
Technology with other technology not provided by MAGNACHIP. THE FOREGOING SECTION 8.1 STATES
THE SOLE LIABILITY OF MAGNACHIP, AND THE SOLE REMEDY OF AATI, WITH RESPECT TO INFRINGEMENT OR
MISAPPROPRIATION OF ANY PATENT, COPYRIGHT, TRADE SECRET OR OTHER INTELLECTUAL PROPERTY RIGHT
BY THE MAGNACHIP TECHNOLOGY OR MAGNACHIP INTELLECTUAL PROPERTY UNDER THIS AGREEMENT.

     8.2 By AATI.

     (a) AATI will defend or settle, at its expense, all claims, proceedings and/or suits
brought by Third Parties against MAGNACHIP, its Affiliates (including their directors,
officers, and employees) alleging that AATI IC Technology as provided by AATI to MAGNACHIP
hereunder infringes or violates any patent, copyright, trade secret or other intellectual
property right (herein “Claim”) and will indemnify MAGNACHIP from and pay all litigation
costs, reasonable attorney’s fees, settlement payments (subject to AATI’s reasonable approval)
and damages awarded by a court having
jurisdiction over such Claim with respect to any such Claim; and provided that AATI shall
be relieved of its obligations under this Section 8.2 unless MAGNACHIP promptly notifies AATI
in writing of any such Claim and gives AATI sole control, full authority, information and
assistance (at AATI’s expense) for the defense or settlement of such Claim.

     (b) Without limiting its obligations under Section 8.2(a), when notified of an
action or motion that seeks to restrict the use, sale and/or distribution of any AATI IC
Technology hereunder (or part thereof), AATI may but is not required or obligated to, at its
option and expense, (1) obtain the right for MAGNACHIP the right to use the AATI IC Technology
licensed hereunder, (2) substitute other functionally equivalent technology that does not
infringe, or (3) modify such technology so that it no longer infringes.

     (c) Notwithstanding any provision to the contrary, the indemnification obligations
in this Section 8.2 shall not be applicable to the extent a Claim arises from (1) use of the
AATI IC Technology in violation of the license terms herein or (2) modification of the AATI IC
Technology by a party other than AATI, or (3) a combination of the AATI IC Technology with
other technology not provided by AATI or (4) MAGNACHIP acting as a foundry to any Third Party
AATI Intellectual Property licensee, provided, however, that AATI has, in its written consent
granting permission to MAGNACHIP to act as a foundry to such Third Party licensee, provided a
written representation reasonably satisfactory to counsel to MAGNACHIP that AATI has
indemnified such Third Party licensee from and against all claims, proceedings and/or suits
brought against the Third Party licensee and alleging that AATI intellectual property as
provided by AATI to the Third Party licensee infringes or violates any patent, copyright,
trade secret or other intellectual property right. THE FOREGOING SECTION 8.2 STATES THE SOLE
LIABILITY OF AATI, AND THE SOLE REMEDY OF MAGNACHIP, WITH RESPECT TO INFRINGEMENT OR
MISAPPROPRIATION OF ANY PATENT, COPYRIGHT, TRADE SECRET OR OTHER INTELLECTUAL PROPERTY RIGHT
BY AATI IC TECHNOLOGY PROVIDED TO MAGNACHIP BY AATI UNDER THIS AGREEMENT.

 

 

     9. OTHER INDEMNITIES. Notwithstanding anything to the contrary in this Agreement
or any Exhibit hereto, each party agrees to defend, indemnify and hold the other harmless from and
against any and all claims, liability for damages, costs and expenses (including reasonable
attorney’s fees and disbursements) for any noncompliance by said party or its Affiliates or agents
with the laws, rules or regulations of any jurisdiction, including export control laws.

     10. LIMITATION OF LIABILITY.

     EXCEPT FOR A BREACH OF SECTIONS 2.1(c) or 11 or LIABILITY UNDER SECTIONS 8 AND 9, IN
NO EVENT WILL EITHER PARTY BE LIABLE FOR LOST PROFITS OR ANY CONSEQUENTIAL, SPECIAL, PUNITIVE,
INCIDENTAL, OR INDIRECT DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING
WITHOUT LIMITATION, NEGLIGENCE), ARISING OUT OF OR RELATED TO THIS AGREEMENT WHETHER OR NOT
SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EACH PARTY ACKNOWLEDGES THAT
FEES AGREED UPON BY THE PARTIES ARE BASED IN PART UPON THESE LIMITATIONS, AND THAT THESE
LIMITATIONS WILL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY REMEDY.
NOTWITHSTANDING THE FOREGOING, THIS LIMITATION OF LIABILITY SHALL NOT APPLY TO ANY CLAIM WITH
RESPECT TO DEATH OR PERSONAL INJURY.

     EXCEPT FOR A BREACH OF SECTIONS 2.1(c) or 11, IN NO EVENT SHALL EITHER PARTY’S
LIABILITY UNDER THIS AGREEMENT EXCEED THE AMOUNT OF U.S. FIVE MILLION DOLLARS
(US$5,000,000.00) IN THE AGGREGATE.

     11. CONFIDENTIALITY OF INFORMATION.

     11.1 Each Receiving Party shall safeguard the Confidential Information and keep it
in strict confidence, and shall use reasonable efforts, consistent with those used in the
protection of its own confidential information of similar nature and significance, to prevent
the disclosure of such Confidential Information to Third Parties.

     11.2 A Receiving Party shall limit the dissemination of the Confidential Information
to only its shareholders, directors, officers, employees and agents, who have a specific need
to know such Confidential Information for the purpose for which such Confidential Information
is disclosed and prevent the dissemination of such Confidential Information to Third Parties;
provided however a Receiving Party may disclose Confidential Information of the a Disclosing
Party to the extent required to do so under applicable law. In the event such disclosure is
required, the Receiving Party shall provide prompt prior written notice to the Disclosing
Party, shall use commercially reasonable efforts to limit any such disclosure, shall cooperate
in a reasonable manner with the Disclosing Party in resisting such disclosure, and provide
sufficient time, if possible, for the Disclosing Party to seek a protective order or other
legal recourse against disclosure.

     11.3 Each Receiving Party shall not use or disclose the Confidential Information for
any purposes other than for the performance of this Agreement.

     11.4 Confidentiality of Terms. The Parties shall keep the terms of this
Agreement confidential and shall not now or hereafter divulge these terms to any Third Party
except:

     (a) with the prior written consent of the other Party; or

 

 

(b) to any governmental body having jurisdiction to call therefor; or

(c) as otherwise may be required by law or legal process, including to legal and
financial advisors in their capacity of advising a Party in such matters; or

(d) to the extent reasonably necessary to comply with United States law in a filing
with the Securities and Exchange Commission, or other governmental agency; or

(e) during the course of litigation so long as the disclosure of such terms and
conditions are restricted in the same manner as is the confidential information of other
litigating Parties and so long as (1) the restrictions are embodied in a court-entered
protective order and (2) the disclosing Party informs the other Party in writing at
least ten (10) days in advance of the disclosure; or

(f) in confidence to legal counsel, accountants, banks and financing sources and
their advisors solely in connection with financial transactions or other corporate
transactions, and said persons are held to the same level of confidentiality as set
forth herein.

          11.5 Nothing contained in this Section 11 shall be construed as granting or
conferring any rights, licenses or establishing relationships by the disclosure or
transmission of a Disclosing Party’s Confidential Information.

          11.6 All Confidential Information disclosed to or received by a Receiving Party’s
under this Agreement shall always remain the property of the Disclosing Party, except for the
license granted herein or other terms or conditions expressly provided herein. Upon the
expiration or termination of
this Agreement, the Receiving Party shall return to the Disclosing Party all Confidential
Information and any documents or storage media (including any and all transcripts and copies
thereof recording such Confidential Information.

     11.7 The confidentiality obligations set forth in this Article shall not apply to
any information which:

(a) is already known by the Receiving Party at the time of its receipt from the
Disclosing Party; or

(b) is or becomes publicly available or known through no breach of this Section 11,
or any other agreement between the Parties by the Receiving Party ; or

(g) is made available to a Third Party by the Disclosing Party without any
restriction on disclosure; or

(h) is rightfully received by the Receiving Party from a Third Party who is not
restricted from disclosing such information and is not in wrongful possession of such
information; or

(i) can be demonstrated has been independently developed by the Receiving Party
without reference to the Disclosing Party’s Confidential Information; or

(j) is disclosed with the prior written consent of the Disclosing Party.

 

 

          11.8 Each Receiving Party acknowledge that any disclosure or dissemination of any
Confidential Information of the Disclosing Party which is not expressly authorized under this
Agreement is likely to cause irreparable injury to such Disclosing Party, for which monetary
damages is not likely to be an adequate remedy, and therefore such Party shall be entitled to
equitable relief, without the posting of bond or security, in addition to any remedies it may
have under this Agreement or at law.

     12. GENERAL.

          12.1 Independent Contractors. The Parties hereto are independent
contractors. Nothing contained herein will constitute either Party the agent of the other
Party, or constitute the Parties as partners or joint ventures. MAGNACHIP shall make no
representations or warranties on behalf of AATI with respect to the MAGNACHIP Licensed
Products or AATI IC Technology.

          12.2 Days. Unless otherwise indicated, the term “days” used in this
Agreement is assumed to be calendar days.

          12.3 Assignment. Neither Party may assign or delegate this Agreement or any
of its licenses, rights or duties under this Agreement, directly or indirectly (in a single
transaction or any series of transactions), by operation of law or otherwise, without the
prior written consent of the other Party. Notwithstanding, a Party may assign this agreement
to an affiliate of such Party and in the case of a re-incorporation, reorganization or a sale
or other transfer of substantially all such Party’s assets or equity, including, without
limitation, either party’s right to sell all or spin-off all or substantially all of its
assets to which this Agreement relates, whether by sale of assets or stock or by merger or
other reorganization that the assignee has agreed in writing to be bound by all the terms and
conditions of this Agreement, and further, provided that in no event shall either party (or
its permitted successors) assign or transfer (in a single transaction or any series of
transactions) this Agreement or any of its licenses, rights or duties hereunder, to a party
primarily engaged in the manufacture, marketing or
sale of a product that directly competes with the products of the other party without the
prior written permission of such other party. Upon any such attempted prohibited assignment or
delegation, such assignment shall be deemed null and void, and this Agreement will immediately
automatically terminate. Subject to the terms of this Section 12.3, this Agreement will inure
to the benefit of each Party’s successors and assigns.

          12.4 Notices. Any notice required or permitted to be given by either Party
under this Agreement will be in writing or by email and will be deemed given: (i) one day
after pre-paid deposit with a commercial courier service (e.g., DHL, FedEx), (ii) upon
receipt, if personally delivered, (iii) three days after deposit, postage pre-paid, with first
class airmail (certified or registered if available), or (iv) upon receipt, when sent by
facsimile or e-mail (with a confirmation copy to follow by regular U.S. Mail), in any such
case, to the other Party at its address below, or to such new address as may from time to time
be supplied hereunder by the Parties hereto:

Notice Address for AATI:

Advanced Analogic Technologies Inc.

830 E. Arques Ave.

Sunnyvale, California 94085

Attn: President

Tel: (408) 737-4600

Fax: (408) 737-4611

Email:

 

 

Notice Address for MAGNACHIP:

MagnaChip Semiconductor, Ltd.

1, Hyangjeong-dong, Hungduk-gu, Cheongju-si, Chungbuk, South Korea

Attn: President & CEO, with copy to Legal Department

Tel: 82-2-3459-3007

Fax: 82-2-3459-3666

Email: youm.huh@magnachip.com

     12.5 Export Regulations. MAGNACHIP understands and acknowledges that AATI is
subject to regulation by agencies of the United States Government, including, but not limited
to, the U.S. Department of Commerce, which prohibit export or diversion of certain technology
to certain countries. Any obligations of AATI to provide technology are subject in all
respects to such United States laws and regulations as from time to time govern the license
and delivery of technology and services outside the United States. MAGNACHIP will comply with
all applicable laws, and will not export, re-export, transfer, divert or disclose, directly or
indirectly, including via remote access, the AATI IC Technology, Products, any confidential
information contained or embodied in the AATI IC Technology or Products, or any direct product
thereof, except as authorized under the Export Administration Regulations or other United
States laws and regulations governing exports in effect from time to time.

     12.6 Payment. Payment must be in U.S. Dollars. All references to “dollars”
or “$” in this Agreement mean United States dollars.

     12.7 Legal Compliance. MAGNACHIP will comply with all applicable laws in
connection with its performance under this Agreement.

     12.8 Force Majeure. Neither Party shall be responsible for delays or
failures in performance not within its reasonable control resulting from acts of God, strikes
or other labor disputes, riots, acts
of war, acts of terrorism, plagues and epidemics, governmental regulations superimposed
after the facts, communication line failures, power failures, fire or other disasters beyond
its control. If it appears that MAGNACHIP’s performance hereunder will be delayed for more
than ninety (90) days, AATI shall have the right to terminate this Agreement, or to cancel
without cancellation charges those Purchase Orders or portions thereof which are affected by
the delay.

     12.9 Language. This Agreement is in the English language only, which
language will be controlling in all respects, and all versions hereof in any other language
will not be binding on the Parties hereto. All communications and notices to be made or given
pursuant to this Agreement must be in the English language. The Parties hereto confirm that it
is their wish that this Agreement, as well as other documents relating hereto, including
notices, have been and will be written in the English language only.

     12.10 Governing Law. The rights and obligations of the Parties under this
Agreement will not be governed by the 1980 U.N. Convention on Contracts for the International
Sale of Goods;

 

 

rather such rights and obligations will be governed by and construed under the laws of
the State of California, without reference to its conflict of laws principles.

     12.11 Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the existence, validity, breach or termination of this Agreement, whether
during or after its term, will be finally settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association (“AAA”), as modified or
supplemented as follows:

     (a) To initiate arbitration, a Party will file the appropriate notice at the AAA.
The arbitration proceeding will take place in San Francisco, CA or such other place as the
Parties may agree in writing. The arbitration panel will be selected in accordance with the
AAA standards. The Parties expressly agree that the arbitrators will be empowered to, at a
Party’s request, (i) issue an interim order requiring one or more other Parties to cease using
and return the requesting Party’s Confidential Information and/or (ii) grant injunctive
relief.

     (b) The arbitration award will be the exclusive remedy of the Parties for all
claims, counterclaims, issues or accounting presented or pled to the arbitrators. The award
will be granted and paid in U.S. Dollars exclusive of any tax, deduction or offset and will
include reasonable attorneys fees and costs. Judgment on the arbitration award may be entered
in any court that has jurisdiction thereof. Any additional costs, fees or expenses incurred in
enforcing the arbitration award will be charged against the Party that resists its
enforcement.

     (c) Nothing in this Section 12.11 will prevent a Party from seeking injunctive
relief against another Party from any judicial or administrative authority pending the
resolution of a dispute by arbitration. MAGNACHIP acknowledges that a violation of proprietary
rights of AATI would result in irreparable injury entitling MAGNACHIP to injunctive relief.

     12.12 Modification and Waiver. No amendment, waiver or any other change in
any term or condition of this Agreement will be valid or binding unless mutually agreed to in
writing by both Parties. The failure of a Party to enforce any provision of this Agreement, or
to require performance by the other Party, will not be construed to be a waiver, or in any way
affect the right of either Party to enforce such provision thereafter.

     12.13 Severability. If a court or other body of competent jurisdiction
finds, or the Parties mutually believe, any provision of this Agreement, or portion thereof,
to be invalid or unenforceable, such provision will be enforced to the maximum extent
permissible so as to effect the intent of the Parties, and the remainder of this Agreement
will continue in full force and effect. The Parties shall
negotiate in good faith an enforceable substitute provision that most nearly achieves the
intent and economic effect of such invalid or unenforceable provision.

     12.14 Favored Pricing Terms.

     12.15 The price charged AATI and its customers for any MAGNACHIP Licensed Products
shall always be MAGNACHIP’s lowest price charged any customer for such MAGNACHIP Licensed
Product (or other products which are most similar or substantially equivalent to the
manufacturing, function, and electrical specification of said MAGNACHIP Licensed Products)
regardless of any special terms, conditions, rebates, or allowances of any nature. If
MAGNACHIP provides MAGNACHIP Licensed Products or other technologies that are related to the
AATI IC Technology or AATI Intellectual Property to any customer at a price less than provided
for herein, MAGNACHIP shall adjust its price charged to AATI to

 

 

the lower price for any un-invoiced product and for all outstanding and future invoices
for such product. AATI shall have the right to audit MAGNACHIP’s compliance with this
provision by conducting an Audit in accordance with Section 5.3 of this Agreement.

     12.16 Entire Agreement. The terms and conditions of this Agreement,
including all exhibits hereto, constitute the entire agreement between the Parties and
supersede all previous agreements and understandings, whether oral or written, between the
Parties hereto with respect to the subject matter hereof.

     12.17 Authority.

     (i) By AATI. Execution or modification of this License Agreement
requires the approval of the President (or the CEO) and the Chief Technical Officer
(CTO) of AATI. No other employee of AATI can approve modifications to the Intellectual
Property licenses contained herein.

     (ii) By MAGNACHIP. Execution or modification of this License Agreement
requires the approval of a representative officer or director of MAGNACHIP. No other
employee of MAGNACHIP can approve modifications to the Intellectual Property licenses
contained herein.

     12.18 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be an original, and all of which taken together shall
constitute a single instrument.

 

 

     IN WITNESS WHEREOF, the Parties hereto have executed this Agreement the date and the year
first herein above written.

	 	 	 	 	 
	MAGNACHIP Semiconductor, Ltd.	 	 
	 
	 	 	 	 
	Signature:
	 	 	 	 
	 

	 	 

	 	 
	Name:

	 	Youm Huh	 	 
	 
	 	 	 	 
	Title:

	 	President and Chief Executive Officer (CEO)	 	 
	 
	 	 	 	 
	Address:

	 	 891 Daechi-dong Kangnam-gu, Seoul, South	 	 
	 

	 	Korea, 135-738	 	 
	 
	 	 	 	 
	Facsimile:

	 	 82-2-3459-3666	 	 
	 
	 	 	 	 
	Advanced Analogic Technologies, Inc.:	 	 
	 
	 	 	 	 
	Signature:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Name:

	 	Richard K. Williams	 	 
	 
	 	 	 	 
	Title:

	 	President, Chief Executive Officer (CEO) and	 	 
	 

	 	Chief Technical Officer (CTO)	 	 
	 
	 	 	 	 
	Address:

	 	830 E. Arques Ave. Sunnyvale, California	 	 
	 

	 	 94085	 	 
	 
	 	 	 	 
	Facsimile:

	 	 (408) 737-4611exv10w8

Exhibit 10.8

AMENDED AND RESTATED LICENSE AGREEMENT

(TrenchDMOS)

DATED September 19, 2007

BETWEEN

ADVANCED ANALOGIC TECHNOLOGIES INC.

AND

MAGNACHIP
SEMICONDUCTOR, LTD.

 

 

			
	[*****] 	 -	 Portions of this exhibit are subject to a request for confidential treatment and
have been redacted and filed separately with the Securities and Exchange Commission.

 

AMENDED AND RESTATED

LICENSE AGREEMENT

(TrenchDMOS)

          This agreement (the “Agreement”) is made effective as of September 19, 2007
(“Effective Date”), by
and between Advanced Analogic Technologies Inc., a California corporation with its principal
place of
business located at 830 E. Arques Ave, Sunnyvale California 94085 (hereafter called “AATI”)
and MagnaChip
Semiconductor, Ltd. with its principal place of business located 1, Hyangjeong-dong,
Hungduk-gu,
Cheongju-si,Chungbuk, South Korea (hereafter called “MAGNACHIP”).

RECITALS

          WHEREAS, AATI and MAGNACHIP entered into a License Agreement on or about March 30, 2005
(“Original Agreement”) providing for the license of certain of AATI’s technology related to
TrenchDMOS Technology (as defined below), and

          WHEREAS, MAGNACHIP and AATI wishes to amend and restate such Original Agreement on the
terms and conditions set forth below as of the Effective Date hereof.

          NOW, THEREFORE, the MAGNACHIP and AATI agree as follows:

AGREEMENT

     1. DEFINITIONS. The following terms will have the meanings attributed thereto, unless
otherwise provided herein:

          1.1 “AATI Field” means the design, manufacturing, testing, sale, offer for sale, or distribution of Products, which are using AATI TrenchDMOS Technology described hereunder.

          1.2 “AATI Improvements” shall have the meaning attributed thereto in Section 4.3.

          1.3 “AATI Intellectual Property” means those Intellectual Property Rights that AATI owns or has a right to license consistent with the scope of the license hereunder.

          1.4 “AATI Licensed Products” means those AATI Products whose manufacture includes the use of MAGNACHIP Technology.

          1.5 “AATI Products” means those Low-Voltage TrenchDMOS Products of AATI, including, but not limited to, those identified on Exhibit A, as may be amended by AATI from time to time.

          1.6 “AATI Discrete Technology” means the designs, technology and other information provided
by AATI to MAGNACHIP related to TrenchDMOS Technology and related device and processing under
this
Agreement AATI Discrete Technology includes the processes, methods, devices and apparatus
described in
the United States and foreign patents and patent applications listed on Exhibit B along with
any improvements,
derivatives, continuation patents, foreign filings, continuation in part (“CIP”)
applications, and all work by
AATI or its employees related to TrenchDMOS Technology preceding said applications (dating
back to
September 1998) continuing through the term of this Agreement. AATI Discrete Technology also
includes the

 

 

features, devices, processes, apparatus and methods identified in Exhibit C__including those protected by the
Patents in Exhibit B. For the purposes of clarity (and notwithstanding the above definition of AATI Discrete
Technology), AATI Discrete Technology) does not include integrated circuit technology (including IC
processes incorporating CMOS, BiCMOS, CBiC, and BCD device arsenals), IC processes used to produce
power management integrated circuits (such as AATl’s proprietary ModularBCD Technology), circuit designs,
packaging technology, the multi-chip combination of TrenchDMOS or discrete transistors with integrated
circuits, the multi-chip combination of TrenchDMOS or discrete devices with Schottky diodes, and other
related designs, technologies and information.

          1.7 “Basic Semiconductor Technology” means designs, technology and other information used
to design, manufacture and test semiconductors, including etching, depositions, diffusion,
cleaning,
photolithography, and other semiconductor processes or sequences (such as LOCOS). Basic
Semiconductor
Technology does not include process architecture or the process integration (and resulting
process flow) of an
integrated process such as TrenchDMOS Technology. It also does not include “specialized” unit
process steps
such as directionally deposited oxides, chained and non-Gaussian implants, etc.

          1.8 “Competing Products” means Products that compete with the AATI Products after the date
of this Agreement. If any portion of a Product includes or integrates the functions of a
Competing Product, then
such product is a “Competing Product.”

          1.9 “Confidential Information” means any information disclosed by either Party (the  “Disclosing Party”) to the other Party (the “Receiving Party”) under this Agreement, either
directly or
indirectly, in writing, orally or by inspection of tangible objects (including without
limitation documents,
prototypes, samples and equipment), which ts designated as “Confidential,” “Proprietary” or
some similar
designation. Information communicated orally or through inspection shall be considered
Confidential
Information if such information is confirmed in writing as being Confidential Information
within a reasonable
time after the initial disclosure. Confidential Information may also include information disclosed to a
Disclosing Party by Third Parties. Notwithstanding any designation of “Confidential”, Confidential
Information includes the AATI Discrete Technology.

          1.10 “Effective Date” means the date set forth in the recital.

          1.11 “Facility” means the MAGNACHIP-owned wafer fabrication facility located in Gumi, Korea
and Cheong-ju, Korea or such other MAGNACHIP-owned facility that the Parties may agree upon
in writing.

          1.12 “MAGNACHIP Field” means Basic Semiconductor Technology, along with the design,
manufacture, test, and sales of products not related to analog semiconductors, power
semiconductors, or the AATI Field (such as memory ICs, digital ICs, displays, sensors, and other non-analog or non-power
semiconductor products).

          1.13 “MAGNACHIP Licensed Products” means (1) those Non-Competing Products of
MAGNACHIP, i.e., Non-Competing Products marketed and sold under a MAGNACHIP-owned brand or
sold
by MAGNACHIP to a Third Party as wafer sales, die sales or finished good sales through
MAGNACHIP’s
foundry services business that include or rely upon AATI Discrete Technology and (2) those
Competing
Products sold to the Customers designated in Exhibit H (“Customers”), as may be amended by
AATI in its sole
discretion, and with MagnaChip’s approval of such, from time to time. “MAGNACHIP Licensed
Products”
exclude Competing Products sold to any other Customer and Products that utilize Other Technology.

          1.14 “MAGNACHIP Improvements” shall have the meaning attributed thereto in Section 3.3.

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          1.15 “MAGNACHIP Intellectual Property” means those Intellectual Property Rights that
MAGNACHIP owns or has a right to license consistent with the scope of the license hereunder.

          1.16 “MAGNACHIP Technology” means the Basic Semiconductor Technology, and technology
not related to analog and power semiconductor manufacture such as memory IC and digital 1C
processes,
provided by MAGNACHIP to AATI.

          1.17 “Intellectual Property Rights” means any intellectual property right existing now or during
the term of this Agreement recognized throughout the world, including without limitation
copyright, maskwork
rights, patent rights, trade secrets and know-how. For the purposes of this Agreement,
“Intellectual Property
Rights” excludes trademarks, service marks and domain names.

          1.18 “Improvements” means all copyrightable material, notes, records, drawings, designs,
inventions, patents, improvements, developments, discoveries and trade secrets first
conceived, made or
discovered by a Party during the period of this Agreement which relate in any manner to, or
are derived from,
the AATI Discrete Technology, the MAGNACHIP Technology or Confidential Information licensed or
provided hereunder, including any enhancements, modifications or derivations thereto.

          1.19 “Joint Improvements” shall have the meaning attributed thereto in Section 4.3.

          1.20 “Low-Voltage TrenchDMOS Products” means those TrenchDMOS products that have
low- voltage characteristics. For the purpose of this Agreement, “Low-Voltage” shall be
defined as
semiconductor components rated at 35 volts or less, i.e., devices who drain-to-source
breakdown specification
not exceeding 35V. “TrenchDMOS Products” include the following semiconductor components: (1)
Discrete
power MOSFETs produced using TrenchDMOS Technology or portions of TrenchDMOS Technology (2)
Multichip packages containing at least one discrete power MOSFET produced using TrenchDMOS
Technology
or portions of TrenchDMOS Technology (3) Monolithically integrated power MOSFETs produced
using
TrenchDMOS Technology or portions of TrenchDMOS Technology (including dual common-drain
devices).
“TrenchDMOS Products” collectively comprise N-channel or P-channel devices of differing drain
and gate
voltage ratings (i.e., Process Types). Some TrenchDMOS Products may also include
gate-to-source ESD
protection diodes.

          1.21 “Starting Material” means un-patterned epitaxial silicon wafers comprising either N-epi on
an N++ Substrate or P-epi on a P++ Substrate, as applicable. Epitaxial doping and thickness
vary with Process
Type.

          1.22 “TrenchDMOS Technology” means that technology related to the fabrication of
semiconductor electronic components comprising or containing at least one trench-gated MOSFET
device
having vertical current flow (i.e., where current flows between a topside source contact and
a backside drain
contact in a manner which is substantially perpendicular to the wafer’s surface in the drain
and/or channel
regions of the device) and incorporating any of several unique features, processes, or
characteristics (as
described in Exhibit C) including;

               (a) A “chained implant DMOS body” (or CIDB) using sequential multiple and high
energy (including MeV) ion implantations to form an active MOS channel;

               (b) A trench gate with “thick bottom oxide” (TBOX) formed by directional deposition of
dielectric material;

-3-

 

               (c) A “dual polysilicon trench gate” process comprising an embedded trench gate
contacted by a second polysilicon (also used to form optional PN polysilicon diodes);

               (d) A “hardmask self-aligned trench gate” photolithographically defined by a dielectric
hardmask layer not removed prior to the trench-etch and trench-fill processing steps;

               (e) A “super-self aligned” (or SSA) trench gate photolithographically defined by a
dielectric hardmask layer subsequently removed by chemical and/or CMP methods to facilitate
contact across
the entire silicon mesa (i.e., trench-to-trench);

               (f) A high-speed embedded “polycide” trench gate comprising a polysilicon-sealed
silicide trench gate structure (i.e., where the silicide does not touch the gate oxide);

               (g) A “planarized gate bus” comprising the integration of narrow (trench-gates) and wide
(trench-gate-bus) regions, sharing a common embedded polysilicon, planarized by CMP or
etchback

               (h) A rugged trench-gated DMOS combining thick bottom oxide (TBOX) with an
embedded PN drain clamping diode (or “TBOX clamping diode”), said clamping diode being
shallower than
trenches but deeper than the polysilicon gates;

               (i) A “planarized silicided trench contact” for a trench gated DMOS with improved

               ruggedness (avalanche capability);

               (j) A “salicide trench gate DMOS”, comprising self aligned silicided (i.e., salicide)
polysilicon and mesa regions;

          1.23 TrenchDMOS Technology can also be characterized by its low thermal budget fabrication
(no long or high temperature diffusions), its high-density-capable device construction (287
Mcells/in        2 and up), a
highly-reproducible short channel capable of low thresholds without punchthrough, and the
unique benefits of
its thick bottom oxide including lower gate charge (per trench width), reduced
field-plate-induced breakdown,
and improved reliability (since impact ionization and avalanche occur near the thick bottom
oxide, not in the
vicinity of thin gate oxide). TrenchDMOS Technology includes but is not limited to the
processes, methods,
devices, mask designs, and apparatus described in United States and foreign Patents and
Patent applications
listed in Exhibit B along with any improvements, derivatives, continuation patents, foreign
filings, CIP
applications, and all work by AATI or its employees related to TrenchDMOS Technology
preceding said
applications (dating back to September 1998) continuing through the term of this Agreement.
TrenchDMOS
Technology features includes but is not limited to the features, device structures, apparatus
and fabrication
methods listed in Exhibit C. TrenchDMOS Technology collectively comprises processes and
methods to
manufacture N-channel and P-channel TrenchDMOS Products, for any and all drain-to-source and
gate-to-source device voltage ratings (referred to herein as “Process Types”).

          1.24 “Net Sales” means the gross selling die or wafer price (depending on how such is sold)
invoiced by MAGNACHIP, its affiliates and authorized manufacturers on sales or other
dispositions of
MAGNACHIP Licensed Products, less the following items to the extent they are included in such
gross
revenues and separately stated on the invoice: (i) normal and customary rebates, refunds and
discounts actually
given by seller, (ii) insurance, transportation and other delivery charges actually paid by
seller, (iii) sales, excise,
value-added and other taxes, and (iv) testing and packaging costs (v) backmetal and backgrind
performed as a
service to MAGNACHIP by any 3rd party vendor. Sales between MAGNACHIP, its
affiliates and authorized
manufacturers shall not be included in Net Sales (but sales or dispositions by MAGNACHIP, its
affiliates and
authorized manufacturers to third parties shall count as Net Sales). If any MAGNACHIP Licensed
Products are

-4-

 

sold or transferred in whole or in part for consideration other than cash, Net Sales shall include the fair market
value of such MAGNACHIP Licensed Product. For purposes of this definition of Net Sales, “authorized
manufacturer” means any entity (other than a MAGNACHIP affiliate) that manufacturers (including any
assembly and packaging of MAGNACHIP Licensed Products) and sells MAGNACHIP Licensed Products
under authority, directly or indirectly, from MAGNACHIP.

          1.25 “Non-Competing Products” means (i) Products comprising or containing vertical power
MOSFETs that operate above 35V (i.e., have a drain to source breakdown voltage specification
in excess of
35V), or (ii) Products that do not comprise or contain vertical power MOSFETs (including
conventional planar
lateral MOSFETs). For clarity, vertical MOS-bipolar merged devices such as the MOS gated
thyristor, emitter switch thyristors, or IGBTs (insulated gate bipolar transistors) whether conventional or trench-gated are
Non-Competing Products. Specific examples of Non-Competing Products are listed in Exhibit D.

          1.26 “Other Technology” means all designs, technology and information other than AATI
Discrete Technology and beyond the scope of this Agreement. Other Technology includes,
without limitation,
ModularBCD Technology as defined in the License Agreement (ModularBCD) between AATI and
MAGNACHIP of even date with this Agreement.

          1.27
“Party” means each of AATI and MAGNACHIP (and collectively “Parties” means both
MAGNACHIP and AATI). The term Party (whether referred to as a “Party” or “Parties” or “AATI”
or
“MAGNACHIP”) does not include any affiliates of such Party except for wholly owned
subsidiaries, unless
expressly agreed upon in writing by both Parties. In addition, the terms Party, AATI, MAGNACHIP and
Parties shall not include any assignees or successors in interest except as provided for under Section 13.3.

          1.28 “Process Type” means the process variations of TrenchDMOS Technology in conductivity
type, epitaxial doping, and gate oxide thickness that sets the device voltage ratings for
drain minimum
avalanche breakdown (i.e., BVdss) and for maximum gate voltage (i.e., itsVGs(max) specification). Process
Types are coded by their ratings using the nomenclature Polarity-BVDSs
-VGs(max). A TrenchDMOS Process
Type P3020, for example, refers to a P-channel device with a 30V drain rating and a 20V
maximum gate
voltage rating. Other Process Types in TrenchDMOS Technology include; P2012, P1208, N3020,
N3012, and
N2012.

          1.29 “Products” means semiconductor devices; integrated circuits, discrete transistors; or
semiconductor components; whether in wafer form or separated into individual dice (chips),
whether assembled
into packages, modules, chip-scale packages, bumped, or otherwise unassembled, whether tested
or untested.
Products include both Competing Products and Non-Competing Products.

          1.31 “Customer” means any third party purchaser of products under this Agreement who is not
an
affiliate, parent company or subsidiary of MAGNACHIP or AATI.

          1.32 “Release-to-Manufacturing (RTM) Date” means the date when the first TrenchDMOS
Product using TrenchDMOS Technology is successfully qualified for a particular TrenchDMOS
Process Type,
i.e., for a given drain and gate voltage specification. The RTM Date requires the successful
fabrication and
burn-in qualification of three (3) wafer runs of said Product for that Product Type.
Thereafter both Product and
TrenchDMOS Technology are qualified and manufacturing production for that particular Process
Type can
commence. Each specific Process Type (e.g. N2012, P3020) will require separate qualification
to constitute a
Release-to-Manufacturing (RTM) for that Process Type.

          1.33 “Third Party” means any company, corporation, partnership, person or commercial entity
other than a Party.

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     2. TERMINATION OF ORIGINAL AGREEMENT

          AATI and MAGNACHIP hereby tenninate the Original Agreement in its entirety, and
notwithstanding
anything therein to the contrary all terms and conditions thereof are hereby terminated, no
longer in force or
effect and hereby replaced by the terms and conditions of this Agreement; provided however,
(1) all
Confidential Information and technology delivered or provided under the Original Agreement is
hereby deemed
subject to the terms of this Agreement and (2) all amounts owing under the Original Agreement
shall continue
to be owed, and the respective audit and reporting provisions of the Restated Agreement shall
apply thereto.
The Parties hereby waive all rights to notice of termination as may be otherwise provided
under the Original
Agreement or applicable laws. Except as expressly provided herein, all other Agreements
between the Parties
remain in effect in accordance with their own terms.

     3. LICENSE

          3.1 License by AATI

          (a) Subject to the terms and conditions set forth in this Agreement, AATI hereby grants
and agrees
to grant to MAGNACHIP, and MAGNACHIP accepts, the following license:

               (i) a non-exclusive and non-transferable (except pursuant to Section 13.3), license
under the AATI Intellectual Property to:

                    (1) make at the Facility (but not have made elsewhere), design, develop,
offer to sell, sell, use, import, and otherwise dispose of the MAGNACHIP Licensed Products;

                    (2) practice, at the Facility, any process or method involved in the
manufacture or use of MAGNACHIP Licensed Products; and

                    (3) to make, use and have made any manufacturing apparatus involved in
the manufacture or use of MAGNACHIP Licensed Products.

               (ii) a non-exclusive nontransferable (except pursuant to Section 13.3) license
under the AATT Intellectual Property to use the AATI Discrete Technology for the sole purpose
of
manufacturing and repairing AATI Products, at the Facility, for distribution to AATI and such
other third
parties that AATI may designate in writing from time to time.

               (iii) a non-exclusive and non-transferable (except pursuant to Section 13.3), license
on a world-wide basis under the AATI Intellectual Property  to use, reproduce modify and make
derivative
works of the copyrightable materials of the AATI Discrete Technology solely for use in
connection with the
exercise of the license granted in Section 3.1(a)(i) and (ii).

               (b) MAGNACHIP Licensed Products shall be royalty-bearing in accordance with Section 6.

               (c) MAGNACHIP shall have no license under the AATI Intellectual Property to supply AATI
Products or Competing Products to any party other than AATI or, in the case of Competing
Products only, to the
Customers designated on Exhibit H’s without
AATI’s prior written approval. Further,
for clarity and
notwithstanding anything to the contrary set forth in this Agreement, to the extent (i) a
MAGNACHIP License
Product includes or relies upon both AATI Discrete Technology and Other Technology, or (ii)
the practice of
any rights granted under this Section 3.1 infringes or misappropriates any AATI Intellectual
Property due to
such Other Technology, then (iii) the use of the Other Technology shall not be considered
licensed under this

-6-

 

Agreement, but shall instead require a separate license from AATI (which AATI may grant or
withhold in its
sole discretion). The parties acknowledge that AATI and MAGNACHIP have executed a separate License
Agreement (ModularBCD) concurrently with this Agreement.

               (d) MAGNACHIP shall have the right, upon prior approval of AATI in writing, to sublicense
to Third Parties its right under Section 3.1(a). Except as expressly provided in this Section
3.1, MAGNACHIP shall have no right to sublicense the rights granted in this Section 3.1.

     3.2 License by MAGNACHIP

     (a) Subject to the terms and conditions set forth in this Agreement, MAGNACHIP hereby grants
and agrees to grant to AATI, and AATI accepts, a non-exclusive, irrevocable, royalty free,
fully paid-up and
non-transferable (except pursuant to Section 13.3, and, under no circumstances, to any other
manufacturer of
the Products apart from MAGNACHIP), and only for the Term of this Agreement, license on a
world-wide
basis under the MAGNACHIP Intellectual Property to:

               (i) make and have made AATI Licensed Products solely in the Facility,

               (ii) offer to sell, sell, use, design, develop, import, and otherwise dispose of AATI
Licensed Products made or to be made in the Facility,

               (iii) practice, solely within the Facility, any process or method involved in the manufacture
of the AATI Licensed Products,

               (iv) to practice any process or method involved in the use of the AATI Licensed Products
made in the Facility, and

               (v) make and have made any manufacturing apparatus involved in the manufacture or use
of AATI Licensed Products that incorporates or is based upon MAGNACHIP Technology and to use
such apparatus exclusively at the Facility.

          3.3 Restrictions. Except as expressly authorized herein, in no event shall MAGNACHIP utilize any
AATI Discrete Technology in connection with the design, manufacturing, distribution or sale of
any Competing
Product without the prior written permission of AATI. In no event shall MAGNACHIP utilize any
AATI
Discrete Technology in connection with the design, manufacturing, distribution or sale of any
Product that
includes an integrated circuit and a Product that uses AATI Discrete Technology in a single
package without the
prior written permission of AATI. MAGNACHIP agrees to provide AATI at least thirty (30) days
prior written
notice prior to MAGNACHIP’s manufacture, distribution or sale (or assisting others with regard
to the same) of any Competing Product, except as provided for under Exhibit H. At no time may AATI utilize
MAGNACHIP
Licensed Products or MAGNACHIP Intellectual property in connection with the design or
manufacturing of
AATI Products or AATI Licensed Products outside of MAGNACHIP’s Facility without MAGNACHIP’s
expressed written approval.

     4. OWNERSHIP AND RESERVATION

          4.1 By AATI. Subject to the rights granted to or retained by MAGNACHIP under
Sections 3, 4.2
and 4.3, the Parties acknowledge and agree that as between the Parties, all title to and
ownership of all AATI
Intellectual Property and AATI Discrete Technology not expressly granted herein shall remain
the sole and
exclusive property of AATI. Nothing herein shall be construed as granting MAGNACHIP any
ownership rights

-7-

 

in the AATI Intellectual Property and AATI Discrete Technology. AATI grants no rights, license or title to its
technology beyond the scope of this Agreement, unless otherwise agreed to in writing by both parties.

          4.2 By MAGNACHIP Subject to the rights granted to or retained by AATI under Sections 3, 4.1
and 4.3, the Parties acknowledge and agree that as between the Parties, all title to and
ownership of all
MAGNACHIP Technology and MAGNACHIP Intellectual Property not expressly granted herein shall
remain
the sole and exclusive property of MAGNACHIP. Nothing herein shall be construed as granting
AATI any
ownership rights in the MAGNACHIP Intellectual Property and MAGNACHIP Technology. MAGNACHIP
grants no rights, license or title to its technology beyond the scope of this Agreement,
unless otherwise agreed to
in writing by both parties.

          4.3
Improvements. With respect to any Improvements, ownership shall be allocated as follows:

               (a) AATI Improvements. All Improvements to AATI Discrete Technology that are created
or conceived solely by AATI shall be solely owned by AATI (the “AATI Improvements”). AATI
shall own
all right, title, and interest in the AATI Improvements and all Intellectual Property therein
(excluding
MagnaChip’ rights in and ownership of any Joint Improvement under Section 4.3(c) below), AATI
shall have
the exclusive right to apply for or register any patents, mask work rights, copyrights, and
such other proprietary
protections with respect thereto. Nothing herein shall be construed as granting MAGNACHIP any
ownership
rights in the AATI Intellectual Property and AATI Discrete Technology. AATI grants no rights,
license or title
to such technology and/or Intellectual Property outside the scope of this Agreement.

               (b) MAGNACHIP Improvements All Improvements to MAGNACHIP Technology that
are created or conceived solely by MAGNACHIP shall be solely owned by MAGNACHIP (the
“MAGNACHIP Improvements”). MAGNACHIP shall own all
right, title, and interest in the MAGNACHIP
Improvements, and all Intellectual Property therein (excluding AATPs rights in and ownership
of any Joint
Improvement under Section 4.3(c) below). MAGNACHIP shall have the exclusive right to apply
for or register
any patents, mask work rights, copyrights, and such other proprietary protections with
respect thereto. Nothing
herein shall be construed as granting AATI any ownership rights in the MagnaChip Intellectual
Property and
MagnaChip Technology. MagnaChip grants no rights, license or title to such technology and/or
Intellectual
Property outside the scope of this Agreement.

               (c) Joint Improvements. Any Improvement which is jointly created or conceived by the
 Parties pursuant to this Agreement shall:

          (i) if created or conceived as an Improvement to AATI Discrete Technology as a
result of the licenses granted to MAGNACHIP in Section 3 or access to the AATI
Discrete
Technology or AATI Confidential Information, be considered:

                         (1) a
“Joint Improvement” under this
Section 4.3(c), if falling
outside
the AATI Field; or

                         (2) an
“AATI Improvement” under Section 4.3(a), if falling within the AATI Field; and

          (ii) if created or conceived as an Improvement to MAGNACHIP Technology as a
result of the licenses granted to AATI in Section 3 or access to the MAGNACHIP
Technology
or MAGNACHIP Confidential Information, be considered:

-8-

 

                         (1) a “Joint Improvement” under this Section 4.3(c), if falling
outside
the MAGNACHIP Field; or

                         (2) a “MAGNACHIP Improvement” under Section 4.3(b), if falling
within the MAGNACHIP Field.

     (iii) The Parties shall cooperate with each other in obtaining and securing all
possible United States and foreign rights to the Joint Improvements and
enforcing such rights.
The Parties agree to meet and confer prior to any public dissemination, use or
sale of Joint
Improvement in order to ensure that any related patent applications have been
filed prior to
such event, and shall not make such dissemination, use or sale of Joint
Improvement until
related patent applications have been filed. The Parties shall share equally in
the costs of
obtaining Joint Improvement rights which are jointly owned, including but not
limited to the
costs of preparing, filing and prosecuting applications and patent maintenance
fees. If a Party
determines that it does not want to pursue or continue to pursue obtaining a
particular Joint
Improvement right which otherwise would be jointly owned, and the other Party
elects to do
so (the “electing party”), the cost related to that particular Joint Improvement
right shall be
borne solely by the electing Party and the electing Party shall have sole and
full ownership of
such Joint Improvement right, including any derivatives, continuations,
divisions, reissues
and reexaminations of that Joint Improvement right.

     (iv) MAGNACHIP hereby irrevocably transfers, conveys and assigns to AATI all
of its right, title, and interest in any Improvements described in Section
4.3(c)(i)(2) (AATI
Improvement). MAGNACHIP shall execute such documents, render such assistance,
and take
such other action as AATI may reasonably request, at AATI’s expense, to apply
for, register,
perfect, confirm, and protect AATI rights to such Improvements, and all
Intellectual Property
therein. AATI hereby irrevocably transfers, conveys and assigns to MAGNACHIP
all of its right, title, and interest in any Improvements described in Section
4.3(c)(ii)(2) (MAGNACHIP
Improvement). AATI shall execute such documents, render such assistance, and
take such
other action as MAGNACHIP may reasonably request, at MAGNACHIP’s expense, to
apply
for, register, perfect, confirm, and protect MAGNACHIP’s rights to such
Improvements, and
all Intellectual Property therein.

     (v) MAGNACHIP and AATI shall each have the right to exploit all Joint
Improvements (that are not AATI Improvements or MAGNACHIP Improvements) without
being required any additional payment to the other, provided however, in the
event a Party
refuses to cooperate and pay costs related to the Joint Improvement under
Section 4(c)(iii),
such Party shall nave no rights to use or exploit such Joint Improvement under
the terms of this
Agreement.

                    (d) Independently Developed. Notwithstanding the above, to the extent that any
Improvements is solely created by a Party under this Agreement, without reference or use of
the other Party’s
Technology, Intellectual Property or Confidential Information (as defined below), then such
Party shall
exclusively own such Improvements.

          4.4 Waiver of Moral Rights. Each party hereby waives any and all “moral rights,”
meaning any
right to identification of authorship or limitation on subsequent modification that a party
(or its employees,
agents or consultants) has or may have in the other party’s Improvements, to the extent
recognized by applicable
law consistent with Berne Convention, art. 6bis.

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          4.5
Attorney in Fact. Each Party assigning any rights under this Section 4 hereunder
(the
“Assignor”) agrees that if the other Party (the “Assignee”) is unable because of Assignor’s
unavailability,
dissolution or incapacity, or for any other reason, to secure Assignor’s signature to apply
for or to pursue any
application for any United States or foreign patents or mask work or copyright registrations
covering the
inventions assigned to Assignee above, then Assignor hereby irrevocably designates and
appoints the company
and its duly authorized officers and agents as Assignor’s agent and attorney in fact, to act
for and in Assignor’s
behalf and stead to execute and file any such applications and to do all other lawfully
pennitted acts to further
the prosecution and issuance of patents, copyright and mask work registrations thereon with
the same legal
force and effect as if executed by Assignor. This power of attorney is deemed coupled with an
interest and is irrevocable.

          4.6 Non-Exclusive Arrangement. Nothing in this Agreement shall be construed to limit AATI’s
rights to manufacture, distribute or take any other action with respect to the AATI Products,
AATI Discrete
Technology, AATI Improvements or AATI Confidential Information or to authorize any other
persons to do
any of the foregoing except as it relates to MAGNACHIP Technology or Improvements to
MAGNACHIP
Technology pursuant to Section 4.3. Likewise nothing in this Agreement shall be construed to
limit
MAGNACHIP’s rights to manufacture, distribute or take any other action with respect to the
MAGNACHIP
Products, MAGNACHIP Technology, MAGNACHIP Improvements or MAGNACHIP Confidential
Information or to authorize any other persons to do any of the foregoing, except as it
relates to AATI Discrete
Technology or Improvements to AATI Discrete Technology pursuant to Section 4.3

     5.
TECHNOLOGY DELIVERY & IMPLEMENTATION.

          5.1
AATI Discrete Technology. As of the Effective Date, AATI has delivered to
MAGNACHIP
the AATI Discrete Technology as outlined in Exhibit E. AATI may (but is not obligated to)
supplement the
AATI Discrete Technology.

          5.2 MAGNACHIP Technology; Upon the recommendation of MAGNACHIP or upon
agreement of both Parties, MAGNACHIP will deliver to AATI the MAGNACHIP Technology listed in
Exhibit F that may be applicable and useful in adapting and implementing the AATI Discrete
Technology in
said Facility. It is understood by both Parties that the applicability of such MAGNACHIP
Technology to
AATI Discrete Technology Implementation may vary by Facility. Thereafter, as agreed upon by
both Parties,
certain processing steps, methods, or features in the AATI Discrete Technology (such as unit
process steps in
the TrenchDMOS process flow) may be adapted to incorporate MAGNACHIP Technology or variants
thereof.
MAGNACHIP may (but is not obligated to) supplement the MAGNACHIP Technology at a later date.

          5.3
AATI Discrete Technology Implementation. Both Parties have, as of the Effective Date,
implemented, the AATI Discrete Technology in said Facility in accordance with the procedures
for AATI
Discrete Technology Implementation as described in Exhibit G.

               (i) Adapting AATI Discrete Technology for Facility. In the event that AATI Discrete
Technology is adapted or modified to best match or fit said Facility by utilizing MAGNACHIP
Technology in
certain steps or processes, such steps or techniques that constitute MAGNACHIP Technology
shall remain the
property of MAGNACHIP. Those portions of the AATI Discrete Technology not using MAGNACHIP
Technology along with the integrated process flow of TrenchDMOS Technology constitute AATI
Discrete
Technology and shall remain the property of AATI.

               (ii) Initial AATI Discrete Technology Implementation. The initial implementation of
AATI Discrete Technology in said Facility does NOT constitute an Improvement to AATI Discrete
Technology.

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               (iii) Initial
AATI Discrete Technology Implementation Milestones. Both Parties will
use
commercially reasonable efforts to meet the milestones of the initial AATI Discrete Technology
Implementation including efforts to meet the objective
Release-to-Manufacturing (RTM) Date

     6. ROYALTIES
AND PAYMENT TERMS.

          6-1
Royalty.

               (a) MAGNACHIP shall pay [*****] royalty for Products its produces for and sells to
AATI (or AATI’s affiliate as designated in writing by contract from AATI). AATI’s
wafer price from
MAGNACHIP is covered under the AATI MAGNACHIP supply agreement and is not covered by this
Agreement.

               (b) In
the case of Non-Competing Products, MAGNACHIP shall pay AATI
[*****] royalty
of Net Sales of all wafers produced using or incorporating the AATI Intellectual Property
licensed herein (such
MAGNACHIP payment to be offset by any payment due from AATI pursuant to Section 5.4 below);
provided,
however, that the Parties agree that the foregoing royalty rate is based on a presumption of a
[*****] withholding
tax rate as of the Effective Date, and so the Parties agree to negotiate in good faith an
increase or decrease in
such royalty rate at any time the withholding tax rate changes after the Effective Date.
Customer shall be
responsible for its own designs or pay for AATI’s design with a release to AATI. Customer
and/or MagnaChip
shall be responsible for the qualification, orders, shipping logistics and quality.

               (c) In
the case of Competing Products, MAGNACHIP shall  pay AATI the royalty identified
in Exhibit H of Net Sales to the identified Customer of all wafers produced using or
incorporating the AATI
Intellectual Property licensed herein. The Parties anticipate that
such royalties will be [*****] (depending on volume) of such Net Sales to the identified Customers of all wafers, or as otherwise agreed to
by both parties in
writing.

               (d) Both parties agree that they will review the pricing structure hereunder on an annual
basis to ensure the pricing structure is mutually agreeable, and adjust such accordingly. In
the event that a
customer provides the Starting Material, the parties agree to adjust the foregoing Net Sales
price by (I)
deducting the actual third party costs of such Starting Material or (2) otherwise agreeing
upon a commercially
reasonable value for Starting Material and deducting such agreed upon value from the Net Sales
price. AATI
reserves the right to charge additional consideration directly to such customers (as opposed
to MAGNACHIP)
for such Competing Products. In such cases, (1) MAGNACHIP makes no representation to AATI with
respect
to the qualification and product quality; (2) AATI, at its election, may choose to assist such
customers with
respect to qualification and product quality; and (3) as between AATI and MAGNACHIP, MAGNACHIP
shall
be responsible for shipping logistics, orders and process quality of wafers.

          6.2
Payment Within thirty (30) days following the end of each calendar quarter,
MAGNACHIP
and AATI shall pay their respective royalty payments on invoices paid by the third party in
U.S. Dollars and
shall include a report sufficient to show the basis for calculation of the royalty payments
made hereunder,
including without limitation, quantity and identification of all Competing and Non-Competing
Products
(“Report”). Upon AATI approval, in lieu of payment on a quarterly basis MAGNACHIP may pay such
outstanding royalties by issuing a credit against outstanding AATI invoices or toward new
wafer starts for
Products from MAGNACHIP.

          6.3 Records and Audit. Each party shall retain records and supporting documentation
sufficient to
document the fee payable under this Agreement in any particular quarter in which this
Agreement is in effect for
at least three years following the end of such quarter and its compliance with Section 6.2.
Upon prior

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	[*****] 	 -	 Portions of this exhibit are subject to a request for confidential treatment and
have been redacted and filed separately with the Securities and Exchange Commission.

 

reasonable written notice of no less than sixty (60) days by one party, the other party shall
provide to a
nationally recognized independent public accounting firm (the “Auditors”) designated in writing by
that party
access during normal business hours to the audited party’s personnel, outside accountants and data
and records
maintained in connection with this Agreement, in each case to the extent necessary or appropriate
for the
purpose of determining whether (i) calculations of the royalties payable under this Agreement are
accurate and
in accordance with this Agreement and/or (ii) MAGNACHIP has offered most favorable pricing to AATI
in
accordance with Section 6.2 (an “Audit”). Audits will be conducted no more frequently than once
per calendar
year. Each Party agrees to use commercially reasonable efforts to assist such Auditors in
connection with such
Audits. Any such Audits shall be conducted at the requesting party’s sole cost and expense.

          6.4 Taxes. Each Party shall bear any and all taxes and other charges incurred by or
levied on it by its
own country in connection with this Agreement, provided, however, that AATI shall bear fifty
percent (50%) of
any withholding or similar tax for foreign payments that is levied by the Korean Government
upon any amounts
due from MAGNACHIP to AATI under this Agreement, and MAGNACHIP is entitled to offset such
AATI
payment obligation from any amounts actually paid by MAGNACHIP to AATI under this Agreement,
including but not limited to amounts due pursuant to Sections 6.1(b) and 6.1(c) above.
MAGNACHIP will
furnish AATI with each tax receipt issued by the Korean taxing authority to assist AATI in
obtaining the credit in the United States.

     7. WARRANTY AND DISCLAIMER.

          7.1 General. Each Party represents and warrants to the other that:

               (a) it has all requisite corporate power and authority to enter into this Agreement and to
carry
out the transactions contemplated by this Agreement; and

               (b) the execution, delivery and performance of this Agreement and the consummation of the
transactions contemplated by this Agreement have been duly authorized by all requisite
corporate action on the part of such Party

          7.2 EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS SECTION 7,
NEITHER PARTY MAKES ANY OTHER WARRANTIES WITH RESPECT TO THE TECHNOLOGY
AND INTELLECTUAL PROPERTY RIGHTS LICENSED HEREUNDER, WHETHER EXPRESSED OR
IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR OF FITNESS FOR
A PARTICULAR PURPOSE OR NON-INFRINGEMENT.

     8. TERM AND TERMINATION OF AGREEMENT.

          8.1 Term. This Agreement shall have an initial term of three (3) years but
shall be automatically
renewed thereafter (and after each subsequent renewal term) for a renewal term of one year
unless, at least sixty
(60) days prior to the date of any such renewal, either Party hereto shall have given notice
in writing to the other
of its intention to terminate the Agreement. This Agreement shall thereafter be automatically
terminated at the
end of the term during which such notice is given.

          8.2 Termination for Default. Should either Party materially default in the performance
of any
term or condition of this Agreement (a “Default”), in addition to all other legal rights and
remedies, the other
Party may terminate this Agreement by giving thirty (30) days written notice of said Default
unless such Default
is corrected within the notice period.

-12-

 

          8.3 Termination for Bankruptcy: Either Party may terminate this Agreement by written
notice in
the event that the other Party makes an assignment for this benefit of creditors, or admits
in writing inability to
pay debts as they become due; or a Trustee or receiver for any substantial part of its assets
is appointed by any
court; or a proceeding is instituted under a provision of the Federal Bankruptcy Act by or
against the other Party
and is acquiesced in or is not dismissed within 60 days or results in an adjudication in
bankruptcy. An
assignment by AATI of all or part of its rights to payment hereunder as part of a working
capital financing shall
not be deemed cause for termination under this paragraph.

          8.4 Effect of Termination. Upon termination or expiration of this Agreement for any reason, all
licenses shall immediately terminate. Each Party shall return the Confidential Information of
the other Party
within thirty (30) days after the effective date of such termination or expiration. In
addition Sections 1, 2, 4, 6.3, 7, 8, 9, 10, 11, 12 and 13 shall survive any expiration or termination of this Agreement.

     9. INTELLECTUAL PROPERTY RIGHTS INDEMNITY.

          9.1
By MAGNACHIP.

               (a) MAGNACHIP will defend or settle, at its expense, all claims, proceedings and/or suits
brought by Third Parties against AATI, its Affiliates (including their directors, officers,
and employees) and
customers alleging that the MAGNACHIP Technology as provided by MAGNACHIP to AATI hereunder
infringes or violates any patent, copyright, trade secret or other intellectual property
right (herein
“Infringement Claim”) and will indemnify AATI from and pay all litigation costs, reasonable
attorney’s fees,
settlement payments (subject to reasonable approval by MagnaChip) and damages awarded by a
court having
jurisdiction over such Infringement Claim with respect to any Infringement Claim; and
provided that
MAGNACHIP shall be relieved of its obligations under this Section 9.1 unless AATI promptly
notifies
MAGNACHIP in writing of any such Infringement Claim and gives MAGNACHIP sole control, full
authority,
information and assistance (at MAGNACHIP’s expense) for the defense or settlement of such
Infringement
Claim.

               (b) Without
limiting its obligations under  Section 9.1(a), when notified of an action or
motion that seeks to restrict the use, sale and/or distribution of any MAGNACHIP Technology
hereunder (or
part thereof), MAGNACHIP may but is not required nor obligated to, at its option and expense,
(1) obtain the
right for AATI to use the MAGNACHIP Technology as licensed hereunder, (2) substitute other
functionally
equivalent technology that does not infringe, or (3) modify such MAGNACHIP Technology so that
it no longer
infringes.

               (c) Notwithstanding any provision to the contrary, the indemnification obligations in this
Section 9.1 shall not be applicable to the extent an
Infringement Claim arises from (l) use of
the MAGNACHIP
Technology in violation of the license terms herein, (2) the modification of any MAGNACHIP
Technology by
AATI, or (3) a combination of the MAGNACHIP Technology with other technology not provided by
MAGNACHIP. THE FOREGOING SECTION 9.1 STATES THE SOLE LIABILITY OF MAGNACHIP,
AND THE SOLE REMEDY OF AATI, WITH RESPECT TO INFRINGEMENT OR MISAPPROPRIATION
OF ANY PATENT, COPYRIGHT, TRADE SECRET OR OTHER INTELLECTUAL PROPERTY RIGHT
BY THE MAGNACHIP TECHNOLOGY OR MAGNACHIP INTELLECTUAL PROPERTY UNDER THIS
AGREEMENT.

     9.2 Bv AATI.

               (a) AATI will defend or settle, at its expense, all claims, proceedings and/or suits brought
by
Third Parties against MAGNACHIP, its Affiliates (including their directors, officers, and
employees) alleging

-13-

 

that AATI Discrete Technology as provided by AATI to MAGNACHIP hereunder infringes or violates any
patent, copyright, trade secret or other intellectual property right
(herein “Claim”) and will
indemnify
MAGNACHIP from and pay all litigation costs, reasonable attorney’s fees, settlement payments
(subject to
AATI’s reasonable approval) and damages awarded by a court having jurisdiction over such Claim
with respect
to any such Claim; and provided that AATI shall be relieved of its obligations under this Section
9.2 unless
MAGNACHIP promptly notifies AATI in writing of any such Claim and gives AATI sole control, full
authority,
information and assistance (at AATI’s expense) for the defense or settlement of such Claim.

               (b) Without limiting its obligations under Section 9.2(a), when notified of an action or
motion that seeks to restrict the use, sale and/or distribution of any AATI Discrete
Technology hereunder, (or
part thereof), AATI may but is not required nor obligated to, at its option and expense, (1)
obtain for
MAGNACHIP the right to use the AATI Discrete Technology licensed hereunder, (2) substitute
other
functionally equivalent technology that does not infringe, or (3) modify such technology so
that it no longer
infringes.

               (e) Notwithstanding any provision to the contrary, the indemnification obligations in this
Section 9.2 shall not be applicable to the extent a Claim arises from (I) use of the AATI
Discrete Technology in
violation of the license terms herein or (2) modification of the AATI Discrete Technology by
a party other than
AATI, or (3) a combination of the AATI Discrete Technology with other technology not provided
by AATI or
(4) MAGNACHIP acting as a foundry to any Third Party that is an AATI Intellectual Property
licensee,
provided, however, that AATI has, in its written consent granting permission to MAGNACHIP to
act as a
foundry to such Third Party licensee, provided a written representation reasonably
satisfactory to counsel to
MAGNACHIP that AATI has indemnified such Third Party licensee from and against all claims,
proceedings
and/or suits brought against the Third Party licensee and alleging that AATI intellectual
property as provided by
AATI to the Third Party licensee infringes or violates any patent, copyright, trade secret or
other intellectual
property right. THE FOREGOING SECTION 9.2 STATES THE SOLE LIABILITY OF AATI, AND THE
SOLE REMEDY OF MAGNACHIP, WITH RESPECT TO INFRINGEMENT OR MISAPPROPRIATION
OF ANY PATENT, COPYRIGHT, TRADE SECRET OR OTHER INTELLECTUAL PROPERTY RIGHT
BY AATI DISCRETE TECHNOLOGY PROVIDED TO MAGNACHIP BY AATI UNDER THIS
AGREEMENT.

               (d) AATI will provide indemnity to Customers on substantially the same terms provided to
MAGNACHIP as described in this Section 9.2 provided that 1) MAGNACHIP has identified to AATI
in
writing any Customer for which indemnity is sought prior to any sales to that Customer under
this Agreement
and 2) AATI has not specifically rejected such Customer in writing within fifteen (15)
business days of
MAGNACHIP’S notification thereof.

     10. OTHER
INDEMNITIES. Notwithstanding anything to the contrary in this Agreement or
any
Exhibit hereto, each Party agrees to defend, indemnify and hold the other harmless from and
against any and all
claims, liability for damages, costs and expenses (including reasonable attorney’s fees and
disbursements) for
any noncompliance by said Party or its Affiliates or agents with the laws, rules or
regulations of any jurisdiction,
including export control laws.

     11.
LIMITATION OF LIABILITY.

          EXCEPT
FOR A BREACH OF SECTIONS 3.1(c) or 12 or LIABILITY UNDER SECTIONS 9 AND
10, IN NO EVENT WILL EITHER PARTY BE LIABLE FOR LOST PROFITS OR ANY
CONSEQUENTIAL, SPECIAL, PUNITIVE, INCIDENTAL, OR INDIRECT DAMAGES, HOWEVER
CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING WITHOUT LIMITATION,
NEGLIGENCE), ARISING OUT OF OR RELATED TO THIS AGREEMENT WHETHER OR NOT SUCH

-14-

 

PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EACH PARTY
ACKNOWLEDGES THAT FEES AGREED UPON BY THE PARTIES ARE BASED IN PART UPON
THESE LIMITATIONS, AND THAT THESE LIMITATIONS WILL APPLY NOTWITHSTANDING ANY
FAILURE OF ESSENTIAL PURPOSE OF ANY REMEDY. NOTWITHSTANDING THE FOREGOING,
THIS LIMITATION OF LIABILITY SHALL NOT APPLY TO ANY CLAIM WITH RESPECT TO DEATH
OR PERSONAL INJURY.

          EXCEPT FOR A BREACH OF SECTIONS 3.1(c) or 12, IN NO EVENT SHALL EITHER PARTY’S
LIABILITY UNDER THIS AGREEMENT EXCEED THE AMOUNT OF U.S.FIVE MILLION DOLLARS
(US$5,000,000.00) IN THE AGGREGATE.

     12. CONFIDENTIALITY OF INFORMATION.

          12.1 Each Receiving Party shall safeguard the Confidential Information and keep it in strict
confidence, and shall use reasonable efforts, consistent with those used in the protection of
its own confidential
information of similar nature and significance, to prevent the disclosure of such
Confidential Information to
Third Parties.

          12.2 A Receiving Party shall limit the dissemination of the Confidential Information to only its
shareholders, directors, officers, employees and agents, who have a specific need to know such
Confidential
Information for the purpose for which such Confidential Information is disclosed and prevent
the dissemination
of such Confidential Information to Third Parties; provided however a Receiving Party may
disclose
Confidential Information of the a Disclosing Party to the extent required to do so under
applicable law. In the
event such disclosure is required, the Receiving Party shall provide prompt prior written
notice to the
Disclosing Party, shall use commercially reasonable efforts to limit any such disclosure,
shall cooperate in a
reasonable manner with the Disclosing Party in resisting such disclosure, and provide
sufficient time, if possible,
for the Disclosing Party to seek a protective order or other legal recourse against disclosure.

          12.3 Each Receiving Party shall not use or disclose the Confidential Information for any purposes
other than for the performance of this Agreement.

          12.4 The Parties shall keep the terms of this Agreement confidential and shall not now or hereafter
divulge these terms to any Third Party except:

(a) with the prior written consent of the other Party; or

(b) to any governmental body having jurisdiction to call therefore; or

(c) as otherwise may be required by law or legal process, including to legal and
financial
advisors in their capacity of advising a Party in such matters; or

(d) to the extent reasonably necessary to comply with United States law in a filing
with the
Securities and Exchange Commission, or other governmental agency; or

(e) during the course of litigation so long as the disclosure of such terms and
conditions are
restricted in the same manner as is the confidential information of other litigating
Parties and so
long as (1) the restrictions are embodied in a court-entered protective order and
(2) the
disclosing Party informs the other Party in writing at least ten (10) days in
advance of the
disclosure; or

-15-

 

(f) in confidence to legal counsel, accountants, banks and financing sources and
their advisors solely in connection with financial transactions or other corporate transactions, and
said persons are held to the same level of confidentiality as set forth herein.

          12.5 Nothing contained in this Section 12 shall be construed as granting or conferring any rights,
licenses or establishing relationships by the disclosure or transmission of a Disclosing
Party’s Confidential
Information.

          12.6 All Confidential Information disclosed to or received by a Receiving Party’s under this
Agreement shall always remain the property of the Disclosing Party, except for the license
granted herein or
other terms or conditions expressly provided herein. Upon the expiration or termination of
this Agreement, the
Receiving Party shall return to the Disclosing Party all Confidential Information and any
documents or storage
media (including any and all transcripts and copies thereof) recording such Confidential Information.

          12.7 The confidentiality obligations set forth in this Article shall not apply to any information which:

(a) is already known by the Receiving Party at the time of its receipt from the
Disclosing Party;
or

(b) is or becomes publicly available or known through no breach of this Section 12,
or any
other agreement between the Parties by the Receiving Party; or

(c) is made available to a Third Party by the Disclosing Party without any
restriction on
disclosure; or

(d) is rightfully received by the Receiving Party from a Third Party who is not
restricted from
disclosing such information and is not in wrongful possession of such information;
or

(e) can be demonstrated has been independently developed by the Receiving Party
without
reference to the Disclosing Party’s Confidential Information; or

(f) is disclosed with the prior written consent of the Disclosing Party.

          12.8 Each Receiving Party acknowledge that any disclosure or dissemination of any
Confidential
Information of the Disclosing Party which is not expressly authorized under this Agreement is
likely to cause
irreparable injury to such Disclosing Party, for which monetary damages is not likely to be
an adequate remedy,
and therefore such Party shall be entitled to equitable relief, without the posting of bond
or security, in addition
to any remedies it may have under this Agreement or at law.

     13. GENERAL.

          13.1 Independent Contractors. The Parties hereto are independent contractors. Nothing
contained
herein will constitute either Party the agent of the other Party, or constitute the Parties as
partners or joint
ventures. MAGNACHIP shall make no representations or warranties on behalf of AATI with respect
to the
MAGNACHIP Licensed Products or AATI Discrete Technology.

          13.2 Days. Unless otherwise indicated, the term “days” used in this Agreement is assumed to be
calendar days.

-16-

 

          13.3 Assignment. Neither Party may assign or delegate this Agreement or any of its
licenses, rights
or duties under this Agreement, directly or indirectly (in a single transaction or any series
of transactions), by
operation of law or otherwise, without the prior written consent of the other Party.
Notwithstanding, a Party
may assign this Agreement to an affiliate of such Party and in the case of a re-incorporation,
reorganization or a
sale or other transfer of substantially all such Party’s assets or equity, including, without
limitation, either
Party’s right to sell all or spin-off all or substantially all of its assets to which this
Agreement relates, whether by
sale of assets or stock or by merger or other reorganization that the assignee has agreed in
writing to be bound
by all the terms and conditions of this Agreement, and further, provided that in no event
shall either party (or its
permitted successors) assign or transfer (in a single transaction or any series of
transactions) this Agreement or
any of its licenses, rights or duties hereunder, to a party primarily engaged in the
manufacture, marketing or
sale of a product that directly competes with the products of the other party without the
prior written permission
of such other party. Upon any such attempted prohibited assignment or delegation, such
assignment shall be
deemed null and void, and this Agreement will immediately automatically terminate. Subject to
the terms of this Section 13.3, this Agreement will inure to the benefit of each Party’s successors and assigns.

          13.4 Notices. Any notice required or permitted to be given by either Party under this Agreement will
be in writing or by email and will be deemed given: (i) one day after pre-paid deposit with a
commercial courier
service (e.g., DHL, FedEx, etc.), (ii) upon receipt, if personally delivered, (iii) three
days after deposit, postage
pre-paid, with first class airmail (certified or registered if available), or (iv) upon
receipt, when sent by facsimile
or e-mail (with a confirmation copy to follow by regular U.S. Mail), in any such case, to the
other Party at its
address below, or to such new address as may from time to time be supplied hereunder by the
Parties hereto:

     Notice Address for AATI:

Advanced Analogic Technologies Inc.

830 E. Arques Ave.

Sunnyvale, California 94085

Attn: President

Tel: (408) 737-4600

Fax: (408) 737-4611

Email: richardwilliams@analogictech.com

     Notice Address for MAGNACHIP:

MagnaChip Semiconductor, Ltd.

891 Daechi-dong Kangnam-gu, Seoul, South Korea, 135-738

	 	 	 	 
	 	Attn: EVP, GM of SMS Division

	 	SVP, General Counsel and Secretary
	 	Tel: 82-2-3459-3160

	 	82-2-3459-3073
	 	Fax: 82-2-3459-4698

	 	82-23459-3898
	 	Email: channy. Iee@magnachip.com

	 	jmcfarland@magnachip.com

          13.5 Export Regulations. MAGNACHIP understands and acknowledges that AATI is
subject to
regulation by agencies of the United States Government, including, but not limited to, the
U.S. Department of
Commerce, which prohibit export or diversion of certain technology to certain countries. Any
obligations of
AATI to provide technology are subject in all respects to such United States laws and
regulations as from time
to time govern the license and delivery of technology and services outside the United States.
MAGNACHIP
will comply with all applicable laws, and will not export, re-export, transfer, divert or
disclose, directly or

-17-

 

indirectly, including via remote access, the AATI Discrete Technology, Products, or any confidential
information contained or embodied in the AATI Discrete Technology or Products, or any direct product thereof,
except as authorized under the Export Administration Regulations or other United States laws and regulations
governing exports in effect from time to time.

          13.6
Payment Payment must be in U.S. Dollars. All references to “dollars” or “$” in this Agreement

mean United States dollars.

          13.7
Legal Compliance. MAGNACHIP will comply with all applicable laws in connection with its

performance under this Agreement.

          13.8
Force Majeure. Neither Party shall be responsible for delays or failures in performance not
within its reasonable control resulting from acts of God, strikes or other labor disputes,
riots, acts of war, acts of
terrorism, plagues and epidemics, governmental regulations superimposed after the facts,
communication line
failures, power failures, fire or other disasters beyond its control. If it appears that
MAGNACHlP’s
performance hereunder will be delayed for more than ninety (90) days, AATI shall have the
right to terminate
this Agreement, or to cancel without cancellation charges those Purchase Orders or portions
thereof which are
affected by the delay.

          13.9
Language. This Agreement is in the English language only, which language will be controlling
in all respects, and all versions hereof in any other language will not be binding on the
Parties hereto. All
communications and notices to be made or given pursuant to this Agreement must be in the
English language.
The Parties hereto confirm that it is their wish that this Agreement, as well as other
documents relating hereto,
including notices, have been and will be written in the English language only.

          13.10
Governing Law. The rights and obligations of the Parties under this Agreement
will not
be governed by the 1980 U.N. Convention on Contracts for the
International Sale of Coods;
rather such
rights and obligations will be governed by and construed under the laws of the State of
California, without
reference to its conflict of laws principles.

          13.11
Arbitration. Any controversy or claim arising out
of or relating to this
Agreement, or the
existence, validity, breach or termination of this Agreement, whether during or after its
term, will be finally
settled by arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration
Association (“AAA”), as modified or supplemented as follows:

               (a) To initiate arbitration, a Party will file the appropriate notice at the AAA. The
arbitration
proceeding will take place in San Francisco, CA or such other place as the Parties may agree
in writing. The
arbitration panel will be selected in accordance with the AAA standards. The Parties
expressly agree that the
arbitrators will be empowered to, at a Party’s request, (i) issue an interim order requiring
one or more other
Parties to cease using and return the requesting Party’s Confidential Information and/or (ii)
grant injunctive
relief.

               (b) The arbitration award will be the exclusive remedy of the Parties for all claims,
counterclaims, issues or accounting presented or pled to the arbitrators. The award will be
granted and paid in
U.S. Dollars exclusive of any tax, deduction or offset and will include reasonable attorneys
fees and costs.
Judgment on the arbitration award may be entered in any court that has jurisdiction thereof.
Any additional
costs, fees or expenses incurred in enforcing the arbitration award will be charged against
the Party that resists
its enforcement.

-18-

 

               (c) Nothing
in this Section 13.11 will prevent a Party from seeking injunctive relief
against
another Party from any judicial or administrative authority pending the resolution of a
dispute by arbitration.
MAGNACHIP acknowledges that a violation of proprietary rights of AATI would result in
irreparable injury entitling AATI to injunctive relief.

          13.12
Modification and Waiver. No amendment, waiver or any other change in any term or
condition of this Agreement will be valid or binding unless mutually agreed to in writing by
both Parties. The
failure of a Party to enforce any provision of this Agreement, or to require performance by
the other Party, will
not be construed to be a waiver, or in any way affect the right of either Party to enforce such provision
thereafter.

          13.13
Severability. If a court or other body of competent jurisdiction finds, or the Parties mutually
believe, any provision of this Agreement, or portion thereof, to be invalid or unenforceable,
such provision will
be enforced to the maximum extent permissible so as to effect the intent of the Parties, and
the remainder of this
Agreement will continue in full force and effect. The Parties shall negotiate in good faith
an enforceable
substitute provision that most nearly achieves the intent and economic effect of such invalid
or unenforceable
provision.

          13.14 [*****]

          13.15 Entire Agreement. The terms and conditions of this Agreement, including all exhibits hereto,
constitute the entire agreement between the Parties and supersede all previous agreements and
understandings,
whether oral or written, between the Parties hereto with respect to the subject matter hereof.

          13.16 Authority

               (i) By AATI. Execution or modification of this Agreement requires the
approval of the
President (or the CEO) and the Chief Technical Officer (CTO) Of AATI. No other employee of
AATI can
approve modifications to the Intellectual Property licenses contained herein.

               (ii) By MAGNACHIP. Execution or modification of this Agreement requires the approval
of a representative, officer or director of MAGNACHIP. No other employee of MAGNACHIP can
approve
modifications to the Intellectual Property licenses contained herein.

          13.17 Counterparts. This Agreement may be executed in one or more counterparts, each of which

shall be an original, and all of which taken together shall constitute a single instrument.

-19-

 

			
	[*****] 	 -	 Portions of this exhibit are subject to a request for confidential treatment and
have been redacted and filed separately with the Securities and Exchange Commission.

 

     IN WITNESS WHEREOF, the Parties hereto have executed this Agreement the date and the year
herein above written.

	 	 	 	 	 
	MagnaChip Semiconductor, Ltd.:

 	 
	By  :	 /s/ Channy Lee
 	 
	 	Name:  	Channy Lee 	 
	 	Title:  

Address:
Facsimile: 	Executive Vice President and General Manager of SMS Division

 891 Daechi-dong Kangnam-gu, Seoul, South Korea, 135-738

 82-2-3459-4698 	 
	 
	Advanced Analogic Technologies,
Inc.:

 	 
	By:  	/s/ Richard K. Williams
 	 
	 	Name:  	Richard K. Williams 	 
	 	Title:  

Address:
Facsimile: 	President, Chief Executive Officer (CEO) and Chief Technical Officer (CTO)

 830 E. Arques Ave. Sunnyvale, California 94085

 (408) 737-4611 	 
	 

-20-

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