Document:

Sublease Agreement dated December 10, 2002

 EXHIBIT 10.25 
  
 CONTRACT OF LEASE 
  
 KNOW ALL MEN BY THESE PRESENTS: 
  
 This Contract of Lease made and executed by and between: 
  
 GRANVILLE PROPERTIES & DEVELOPMENT CORP., a corporation duly organized and registered under and by virtue of Philippine laws with office address at
10-D JMT Bldg., ADB Avenue, Ortigas Center, Pasig City, represented herein by its President, MANUEL L. OLIVAN, now and hereinafter referred to as the LESSOR; 
  
 - and - 
  
 NSF RF-TECHNOLOGIES CORPORATION. A corporation duly organized and registered under and by virtue of Philippine laws with office address at Granville
Industrial Complex, Bo. Bangkal, Carmona, Cavite, herein represented by its Country Manager & General Manager, KARL MAY, now and hereinafter referred to as the LESSEE. 
  
 WITNESSETH: 
  
 WHEREAS, the LESSOR is the owner of the building located at Granville Industrial Complex, Carmona, Cavite, otherwise known as Bldg. B-1 (extension) with a
floor area of approximately 2,160 square meters, facilitized in accordance with Memorandum of Agreement dated September 11, 2002; 
  
 WHEREAS, the LESSEE has agreed to lease from the LESSOR the above mentioned property and the LESSOR is agreeable thereto: 
  
 NOW, THEREFORE, for and in consideration of the foregoing premises and of the
mutual covenants and stipulations hereinafter set forth and contained, the LESSOR has let and by these presents does hereby let and demise by way of lease unto the LESSEE the premises designated in the above “Whereas” clause hereof under
the following terms and conditions: 
  
 1. TERM OF LEASE - This
lease shall be for a period of TWO (2) YEARS commencing on January 1, 2003 and shall expire on December 31, 2004. This lease may be renewed for up to five (5) years under such terms and conditions mutually agreed upon. 
  
 2. MONTHLY RENTAL - The parties herein agree that the monthly rental rate
shall be as follows: 
  
 Year 1 – 1/01/03 to 12/31/03 –
P295.00/sq.m. or P637,200.00 per month plus VAT 
 Year 2 – 1/01/04 to 12/31/04 – P309.75/sq.m. or P669,060.00 per month plus VAT

  
 Said rentals shall be payable on or before the
10th day of every month. Overdue rental shall be subject to 2% per month penalty/interest charge. The commitment fee of THREE MILLION FIVE HUNDRED SEVENTY ONE THOUSAND SEVEN HUNDRED SEVENTY SIX PESOS (P3,571,776.00) paid under the Memorandum of
Agreement of September 11, 2002 shall be applied as security deposit to answer for any unpaid bill for water, gas, electricity, telephone, association dues or damages to the premises caused by the fault of negligence of the LESSEE aside from wear
and tear; such amounts will be deducted from this deposit and the balance, if any, shall be refunded to the LESSEE thirty (30) days after the termination of this contract. 
  
 3. USE OF PREMISES - The premises, subject matter of this Contract, shall be used for factory and office space and other
related products only and for no other purpose without the written consent of the LESSOR. 

 
4. WATER,
ELECTRIC CURRENT, ETC. - all expenses for water, electric current, telephone, security services, maintenance dues and garbage fees accruing to the leased premises, if any, shall be for the account of the LESSEE and the LESSEE shall pay immediately
when due all bills and/or charges for water, electricity, telephone and other utilities. 
 
5. ALTERATIONS, INSTALLATIONS, ADDITIONS, IMPROVEMENTS - The LESSEE shall not introduce alterations in the area being Leased without the written consent of the LESSOR. 
 
6. CARE OF LEASED PREMISES - The LESSEE shall, at his expense,
maintain the leased premises in a clean and sanitary condition, free from noxious odours, disturbing noises, or other nuisances, and upon the expiration of the lease, shall surrender and return the premises and fixtures in as good condition as they
were actually found at the beginning of the lease, ordinary wear and tear excepted. Any injury or damage caused or done by the LESSEE may be repaired by the LESSOR for the account of the LESSEE. 
 
The LESSOR shall be responsible for all major
repairs on the premises, except repairs due to the fault or negligence of the LESSEE, his employees, guests, or visitors. 
 
7. RULES, REGULATIONS, ETC. - The LESSEE shall comply with any and all reasonable rules and safety regulations which may be promulgated
from time to time by the LESSOR and other duly constituted authorities of the local or City or National Government made known to the LESSEE regarding the use, occupancy and sanitation of the leased premises. 
 
8. INJURY OR DAMAGE TO THIRD PERSONS OR LESSEE - The LESSOR
shall not be liable, nor responsible: 
 
a) For the
failure of water supply and/or electric current; 
 
b) For any article delivered or left to any of its employees; 
 
c) For any injury, loss, or damage, which the LESSEE, his agents, or employees might sustain in the premises due to any cause whatsoever excepting injury or damage caused by the negligence or willful
act or omission of the LESSOR; and 
 
d) For any
damages arising from acts of negligence of LESSEE or its agents, employees, representatives or any and all other persons. 
 
9. DAMAGE TO LEASED PREMISES - In case of damage to leased premises or its Appurtenances by fire, earthquake, war or any other unforeseen
cause, the LESSEE shall give immediate notice thereof to the LESSOR. If the leased premises shall be damaged by fire or other cause without the fault or negligence of the LESSEE or its agents, clerks, servants or visitors, the injury shall be
repaired at the expense of the LESSOR, as speedily as possible after such notice with the LESSEE being entitled to a proportionate reduction of the rentals during the period of repairs, but if the leased premises be destroyed to such an extent as to
make it untenantable, without the fault or neglect of the LESSEE, either party may demand the rescission of the contract. In the event the lease is rescinded by the LESSEE by reason of the foregoing, the LESSOR shall return to the LESSEE after
thirty (30) days from notice of rescission all funds held by LESSOR as security or other deposit. 
 
The LESSEE shall be fully liable to the LESSOR in all cases where damages of any nature or kind is caused by the fault or
negligence of the said LESSEE, its employees, agents, servants or visitors. 

 
No compensation or claim shall be allowed against the LESSOR by reason of inconvenience, annoyance or injury to the LESSEE’s business arising out of necessity of repairing any portion of the leased premises, however, the
necessity may arise. 
 
10. INSPECTION OF PREMISES
– The LESSOR or its authorized agent shall, by previous arrangement with the LESSEE, have the right to enter the leased premises to examine the same, or for any purpose which it may seem necessary, for the operation or maintenance of the leased
premises. 
 
11. ACCESS FOR REPAIRS, ETC. –
The LESSEE shall give access to the LESSOR to the leased premises for the purpose of making repairs, remodeling or repainting or to undertake all works necessary for the preservation, conservation, improvements of the leased premises or any part
thereof. 
 
12. SUBLEASE, TRANSFER OF RIGHTS –
The LESSEE shall not assign its right in this Contract or sublease or sublet all or any part of the leased premises without the written consent of the LESSOR. 
 
13. TERMINATION OF LEASE – The LESSEE agrees to return and surrender the leased premises at the expiration of this lease in as good
condition as that in which the premises were given, with allowance for reasonable wear and tear. All permanent improvements shall accrue to the LESSOR in accordance with the provisions of paragraph 5 thereof except non-permanent fixtures and devices
including but not limited to circuit breakers, airconditioning units, exhaust fans & other electrical installations introduced by the LESSEE. 
 
14. FAILURE TO SURRENDER – If said premises is not surrendered at the expiration of the term, the LESSEE shall pay, by way of
penalty, a sum equivalent to the amount of the rentals for the leased premises for the whole period of delay. It is hereby agreed that such penalty shall be in addition to the rentals corresponding to the period of delay. Payment of said penalty
shall likewise be without prejudice to the attorney’s fees and other liabilities provided for in this contract. 
 
15. ABANDONMENT OF LEASED PREMISES – In case the leased premises shall be deserted or vacated before the expiration of this lease,
the LESSOR shall have the right to peacefully enter the same as the agent of the LESSEE, without being liable to any prosecution therefor, and to relet the same as the agent of the LESSEE, and to receive the rent therefore, and to apply the same to
the payment of the rent due hereunder holding the LESSEE liable for any delinquency. Abandonment shall be defined to mean failure of the LESSEE to occupy the leased premises for a minimum period of thirty (30) consecutive days. 
 
16. NON-WAIVER – The failure of the LESSOR to insist upon
a strict performance of any of the terms, conditions and covenants hereof, shall not be deemed a relinquishment or waiver of any rights or remedy that said LESSOR may have, nor shall it be considered as a waiver or any subsequent breach or default
of the terms, conditions, and covenants shall continue to be in full force and effect. 
 
17. BREACH OR DEFAULT – In the event that either party shall commit a breach of any term or condition of this Agreement, and such breach shall not have been remedied within thirty (30) days from
receipt of notice specifying the nature of such breach, the party not in breach may terminate this Agreement. 
 
18. RENTALS FOR REMAINING TERM/SATISFACTION OF DAMAGE AND OBLIGATION – In all cases where this contract is terminated or cancelled
whether judicially or extra-judicially, by reason of rental default committed by the LESSEE, the said LESSEE shall be fully liable to the LESSOR for the rentals corresponding to the remaining term of this lease, as well as for any and all damages,
actual or consequential, resulting from such default and termination. In the event of such termination/cancellation, the LESSOR is hereby authorized as Attorney-in-Fact of the LESSEE to sell at public or private sale any and all goods, merchandise,
equipments, etc. brought in the leased premises by the LESSEE, and to apply the proceeds of such sale to any damages and outstanding obligation of the LESSEE under this contract. 

 
19. LIEN ON
PROPERTIES – It is understood by the herein Parties that for as long as the LESSEE is in default in the payment of its rental, the LESSOR shall have a lien on any and all properties of the LESSEE and the latter shall not remove nor dispose of
the said property without the written consent of the LESSOR. 
 
20. ARBITRATION – In the event of any dispute or claim except non payment of rental arising out of the implementation or interpretation of this contract or any provision thereof, and the same is not settled amicably by the
Parties, then the LESSOR and LESSEE agree to submit the same for resolution by arbitration under the Arbitration Law of the Philippines. The arbitration proceedings shall be conducted under the supervision and rules on arbitration of the European
Chamber of Commerce of the Philippines. The decision of the arbitrator or arbitrators shall be final and binding upon the Parties hereto, and may be enforced in a court of competent jurisdiction within Metro Manila. 
 
IN WITNESS WHEREOF, the parties hereto have hereunto signed
this 10th day of December, 2002, at MAKATI CITY, Philippines. 
 
 

	 GRANVILLE PROPERTIES &
 DEVELOPMENT INC.

 [LESSOR]
	 	 	 	 NSF TECHNOLOGIES (PHILS.) INC.

 [LESSEE]

	
	 By:
	 	 /s/    MANUEL L.
OLIVAN        

	 	 	 	 By:
	 	 /s/    KARL
MAY        

	 	 	 MANUEL L. OLIVAN
 President
	 	 	 	 	 	 KARL MAY
 Country Manager & General Manager

 
 
Signed in the presence of: 
 

	
	  

	 	 	 	  

 
ACKNOWLEDGEMENT

 
Republic of the Philippines)

City of MAKATI CITY) S.S. 
 
BEFORE ME, a Notary Public, for and in the City of MAKATI CITY personally appeared on this 10
DEC 2002 the following: 
 

	 Name

	 	 Res. Cert. No.

	 	 Date and Place Issued

	 	 	 	 	 
	 GRANVILLE PROP. & DEV. INC.
	 	 216324
	 	 1/11/02    Carmona, Cavite

	
	 MANUEL L. OLIVAN
	 	 5545950
	 	 1/23/02    Pasacao, Cam. Sur

	
	 NSF TECHNOLOGIES (PHILS) INC.
	 	 216307
	 	 1/17/02    Carmona, Cavite

 
KARL MAY 
Passport No. 321 501 1218 
 
 
Known to me and to me known to be the same persons who executed the foregoing
CONTRACT OF LEASE and who acknowledged to me that the same is their own free and voluntary act and deed and that of the corporations therein represented. 
 
WITNESS MY HAND AND SEAL on the date and place first above written. 
 

	 	 	 NOTARY PUBLIC

	 	 	 
	
	 DOC. NO.     163    
	 	 /s/ Maria Regina A. Ruiz
 MARIA REGINA A. RUIZ
 Notary Public
 Until December 31, 2002
 PTR No. 6742214/1-08-02/Makati
 IBP No.
548891/1-07-02

	 PAGE NO.     35    
	 
	 BOOK NO.     VI    
	 
	 SERIES OF 2002Manufacturing Agreement

 Exhibit 10.26 
  
 MANUFACTURING 
 AGREEMENT 
  
 This Manufacturing Agreement is
entered into as of March 27, 2003, between Three Five Systems Inc., a Delaware corporation, located at 1600 North Desert Drive, Tempe, AZ 85281 (“hereinafter Company”) and Microtune, Inc., a Delaware Corporation located at 2201 Tenth
Street, Plano, Texas 75074 (“Buyer”). (hereinafter “Buyer”). 
  
 WHEREAS, Company, is engaged in the business of manufacturing electronic assemblies, 
  
 WHEREAS, Buyer is engaged in the business of designing and selling a variety of related and unrelated electronic goods and commodities, 
  
 WHEREAS, Buyer desires to retain the services of Company, and Company desires
to provide its services to Buyer upon the terms and conditions hereinafter set forth, 
  
 NOW, THEREFORE, in consideration of the foregoing, the mutual promises and covenants contained herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as
follows. 
  
 ARTICLE 1 
 DEFINITIONS AND AGREEMENT 
  
 1.1 Defined Terms. The following terms shall, when written with an initial capital letter, have the following meanings for purposes of this
Manufacturing Agreement: 
  
 1.1.1
“Agreement” shall mean this Manufacturing Agreement. 
  
 1.1.2 “Asset Purchase Agreement” shall mean the agreement executed by and among Three-Five Systems, Inc., NSF-Technologies (Phils.), Inc. and Microtune (Texas), LP. The Asset Purchase Agreement is attached
hereto as Exhibit A and made a part of this Agreement by this reference. 
  
 1.1.3 “Buyer” shall mean MICROTUNE, Inc., a Delaware corporation, and all of its assigns and successors, affiliates and
subsidiaries. 
  
 1.1.4 “Company” shall
mean Three Five Systems Inc., a Delaware corporation, and all of its assigns and successors, affiliates and subsidiaries. 
  
 1.1.5 “Inventory” shall have the same meaning assigned to such term in the Asset Purchase Agreement. 
  

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1.1.6 “Manufacturing Price” shall mean the prices set forth on Exhibit B attached hereto, which may be changed from time to time in accordance with this Agreement, and which prices are exclusive of freight, insurance
and like charges, and net of any taxes, discounts, returns, refunds and collection costs. 
 
1.1.7 “Term Promissory Note” shall mean the promissory note dated March 26, 2003, executed by Three-Five Systems
Pacific, Inc. (with Company as a guarantor) and delivered to Buyer. The Term Promissory Note is attached hereto as Exhibit C and made a part of this Agreement by this reference.  
 
1.1.8 “Products” shall mean RF
electronic modules and printed circuit board assemblies. “Products” shall not include any silicon products which are not contained in a module. 
 
1.1.9 “Product Build Schedule” shall mean the manufacturing forecasts submitted to the Company from time to time
in accordance with this Agreement. 
 
1.1.10 “Specifications” shall mean the Buyer’s specifications and drawings attached hereto as Exhibit D which may be added to or revised from time to time in accordance with this Agreement 
 
ARTICLE 2 
TERM OF AGREEMENT 
 
2.1 Term. Except as otherwise provided in this Agreement, the initial term of this Agreement shall commence on March 27, 2003 and
shall end on March 27, 2008. At the end of the initial five (5) year term, this Agreement shall automatically be renewed for successive one (1) year terms until terminated by the Company or the Buyer two hundred seventy (270) days prior to the end
of the initial term or any renewal term. The 270 day termination provision can be invoked only after the twelve months from the date of execution. In addition this notice period may be reduced if the Buyer notifies the Company of any significant
quality or shipment issues on Products provided to the Buyer by the Company and such issues are not reasonably cured within 60 days from Company receiving such written notice from the Buyer. During such initial or renewal term of this Agreement, the
volume of Products to be manufactured shall be established by purchase orders submitted and accepted in accordance with Article 4 of this Agreement. After any proper termination of this Agreement, all of the Company’s and the Buyer’s
obligation hereunder shall cease and terminate; provided, however, that in the event such termination occurs prior to the Company’s shipment of all Products for which the Company has accepted Buyer’s purchase order, the Buyer shall pay the
Company for (i) all custom components the Company has in stock for Product as of the date of notice under this paragraph which are not used before this Agreement actually terminates, (ii) a negotiated fee of up to 10% of all custom component parts
the Company has in stock for the Product that cannot be returned to the original vendor ; and (iii) all unpaid tooling charges for the Product. 
 

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2.2 Termination for Breach. If either party breaches this Agreement, the
non-breaching party shall give written notice of breach to the breaching party. If the breaching party fails to cure such breach default or fails to submit a written plan acceptable to the non-breaching within thirty (30) days of receipt of the
notice of breach, the non-breaching party may terminate this Agreement by giving the breaching party thirty (30) days written notice of termination. If the Company fails to cure a breach under this Agreement which results in Buyer failing to supply
its customers in accordance with the Buyers purchase orders submitted under Section 4.1, Company shall reimburse Buyer for all reasonable costs in securing inventory to meet its customers needs for a period of six months until Buyer can secure
another manufacturing source. In addition, Company shall pay all damages Buyer incurs as a result of its contractual obligations to customers to timely deliver including any “line down charges”. If Buyer terminates this Agreement under
this paragraph due to a material breach by Company, Buyer is relieved of any obligations under this Agreement to purchase inventory or components or to honor existing purchase orders. 
 
2.3 THE FOREGOING REMEDIES ARE EXCLUSIVE AND ARE MADE EXPRESSLY IN LIEU OF ALL OTHER REMEMDIES EXPRESS OR
IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, STATUTORY OR OTHERWISE. BOTH PARTIES SHALL NOT BE LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES NOT PROVIDED FOR BY CONTRACT. 
 
2.4 Termination for Insolvency, etc. This Agreement shall immediately terminate should either party:
(i) become insolvent; (ii) enter into or file a petition, arrangement or proceeding seeking an order for relief under the bankruptcy laws; (iii) enter into a receivership of any of its assets or; (iii) enter into a dissolution or liquidation of its
assets or an assignment of the benefit of creditors. 
 
ARTICLE 3 
MANUFACTURING AND TESTING 
 
3.1 Manufacturing. The Company will exclusively
manufacture the Products for the Buyer, and the Buyer will place all purchase orders for the Products exclusively with the Company, in accordance with the terms of this Agreement, the Specification, and the Product Build Schedule. The terms of this
Agreement shall prevail over the terms of the Specification, the Product Build Schedule, and any purchase order. The Company guarantees 95% on time delivery for products on accepted purchase orders under Section 4.1 and will pay all reasonable costs
or damages the Buyer incurs as a result of any noncompliance with this on time delivery warranty. 
 
3.2 Quarterly Meetings. The Company and Buyer will hold quarterly meeting to review performance, critical procedures, key programs,
and manufacturing indexes. 
 
3.3 Specification
Changes. The Buyer shall submit the Specifications and any changes thereto to the Company. Upon receipt of written notice of a proposed change to the Specifications, the Company will promptly (but in no event less than seven (7) business days
and no more than ten 10 business days) review anticipated cost and schedule impacts of the proposed Specification 
 

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changes. All cost impacts, material availability issues and Manufacturing Price changes resulting from any
Specification change must be approved in writing by the Company prior to implementation of the proposed Specification changes. In the event Company consents to any Specification changes, the Buyer shall pay the Company for (i) all component parts
the Company has ordered, are in transit or are in stock for the original Product design, Specifications, Product Build Schedule or Product Volume that cannot be returned to the original vendor or used in another Company product; and (ii) all vendor
cancellation or restock charges for component parts the Company has ordered or are in transit for the original Product design, Specifications or Product Build Schedule. The Company shall make reasonable efforts to utilize all materials in
alternative products and/or return the materials to the original vendor. Buyer is only responsible for raw materials which have been purchased in accordance with vendor required lead times and accepted purchase orders. Any raw material purchases
outside of this criteria is the sole responsibility of the Company. 
 
3.4 Support and Cooperation. The Buyer shall supply the Company all necessary and technical support for the Products. The Buyer agrees (i) to respond promptly to any reasonable request by the Company for information,
(ii) to forward promptly to the Company any inquiry or other communication concerning the Products (iii) to cooperate fully with the Company in regard to all activities related to the Products. In return, the Company agrees to accept and comply with
all Microtune existing processes, production procedures, and provide required documentation such as existing part-numbering conventions, DCC procedures, BOM structure, process-FMEA, Capability studies, production releases, and RMA procedures. The
Company will retain all Buyer data for a minimum of ten (10) years. In documentation which is currently retained in SAP by Buyer will be kept in SAP or a functioning equivalent which can be accessed easily by Buyer. Buyer and Buyer’s customers
have the right to perform factory audits upon reasonable notice to the Company. 
 
3.5 Manufacturing Certification. The Company will manufacture the Products under ISO-9002 Certification, QS9000, TS16949, and ISO-14001, or such other manufacturing certification required by the
Buyer. The Company will obtain all certifications on or before July 31, 2003 and will keep all certifications current after that date. Failure to obtain a certification or keep certification shall be considered a material breach of this Agreement.
The Buyer will provide specific certification requirements and schedules to the Company periodically as required. The Company will full support Buyer’s need for SQA functions for customers (i.e. supplier audits, supplier ratings, supplier
development). 
 
3.6 Manufacturing
Standards. The Company will manufacture the Products to Buyer’s design and layout standards. The Company warrants it will develop critical manufacturing processes such as lead-free-solder in both through hole and surface mounts applications
on or before June 30, 2003 and converting products to re-flow process, in a timeframe approved by the Buyer. The Company will adopt Buyer’s existing PTR (production test run) procedures including cost and cycle time commitments which is
attached as Exhibit E. The Company notes that Buyer does not use IPC standards in the design (layout) of its Products. 
 
3.7 ERP Systems. The Company will work with Buyer to develop and maintain an acceptable communication path for the real-time access
of PTR and production information. The 
 

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Company agrees that its ERP system must have the ability to interface with MT’s current ERP systems
to provide product status on a real-time basis. The Company agrees that Buyer must be able to interface with the Company’s document control system and upload and download documents. The Company will make best efforts to meet the requirements of
the Buyer for WIP tracking, shop floor control, and required interfaces with Buyer ERP systems. 
 
3.8 Testing. The Company will perform Incircuit Tests, final tests, and quality assurance tests on the Products. The Company agrees to keep all Buyer IP related to testing confidential. The
Company agrees that Buyer requires its employees have access to test equipment for real-time monitoring of test results and will give Buyer full access to the test equipment and results. Company agrees to perform all testing of the Products
according to documented Test Instructions, to be made available to the Company by Buyer. 
 
3.9 Consigned Test Equipment. The Company will maintain all equipment consigned by the Buyer in good working condition and will keep all calibrations of equipment current and accurate in
accordance with Buyer’s requirements. All calibration and maintenance records will be made available to Buyer upon request. 
 
3.10 Inventory. In the event that the Company determines in its reasonable, good faith discretion that any portion of the Inventory
is defective or otherwise unsuitable for use pursuant to the Asset Purchase Agreement, then the balance or amount payable (including principal and interest) remaining on the Term Promissory Note shall be reduced on a dollar for dollar basis by the
value, as determined by mutual agreement of the Parties, of such defective or otherwise unusable Inventory. 
 
ARTICLE 4 
MANUFACTURING ORDERS

 
4.1 Purchase Orders. The Buyer shall
submit to the Company thirty (30) day rolling purchase orders for the Products in accordance with the Specifications and the Product Build Schedule. Such purchase orders shall be in writing or by e-mail, facsimile, and shall at a minimum identify
the quantity of, and requested shipping dates and delivery places for, the Products. Each thirty (30) day rolling purchase order shall be accompanied by a revised Product Build Schedule setting forth the Buyer’s revised forecast of the quantity
of Products to be manufactured for the Buyer during the one hundred eighty (180) period following the thirty (30) day period set forth in the purchase order. The Buyer shall ensure that its purchase orders and Product Build Schedules are timely
received by the Company. 
 
4.2 Acceptance of
Purchase Orders. All purchase orders from Buyer are subject to acceptance by the Company at its manufacturing facility in Calamba, City, the Philippines. Each purchase, when accepted by the Company, shall give rise to a contract under the terms
set forth in this Agreement and to the exclusion of any additional terms set forth in the purchase order. The Company shall not be required to maintain any consignment or other inventory of the Products. The Company will notify the Buyer within 48
hours of receiving a purchase order if such purchase order is accepted or rejected. Failure to reject a purchase order shall be deemed acceptance. 
 

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4.3
Shipping Terms. Buyer will designate where Company is to ship products with terms to be FOB TFS Calumba, the Philippines or FOB Buyer facility for the transition production period.  
 
4.4 Modification of Purchase Orders. No accepted
purchase order shall be changed or modified unless mutually agreed upon in writing by both parties. 
 
4.5 Manufacturing Price. The prices to be paid by Buyer for the Products manufactured pursuant to this Agreement shall be the
Manufacturing Price in effect at the time of acceptance of the relevant purchase order submitted by Buyer except that until September 1, 2003, all prices are to be as set forth in Exhibit B Target Prices. In addition, the Company guarantees a
5% price reduction from Target Prices as set forth in Exhibit B six months from the date of this Agreement and an additional 5% price reduction from Target Prices as set forth in Exhibit A three months from the date of the initial price
reduction. Any identified material savings will be shared 50% by each the Company and the Buyer after the above reductions have occurred. 
 
4.6. Manufacturing Price Changes. The Company may (based upon documented and verified material price increases or decreases) change
the Manufacturing Price by the amount of the direct material increase or decrease providing the Buyer with at least forty-five (45) days prior written notice but in no event prior to March 1, 2004. Notwithstanding the above, on or before each
anniversary date of the Closing, the Buyer and the Company will agree (in writing) to pricing for the next 12 months. In the event that the parties do not agree to such pricing, then Buyer will have the right to solicit a competitive quote (taking
into consideration volume and other requirements) for all Products listed under Exhibit E. If Company does not reasonably match such competitive quote in the aggregate, then Buyer shall have the right to place all or any part of such Product
business with such other supplier. 
 
4.7
Payment Terms. All payments by the Buyer for the Products shall be due net thirty (30) days from the date the of the Company’s invoice to the Buyer. In the event of any dispute arising over any part of an invoice or the total amount due
under an invoice, all undisputed amounts shall be promptly paid by the Buyer. 
 
4.8 Overdue Payments. If and for so long as any payment from the Buyer to the Company under this Agreement shall be overdue, unless overdue payment is for product or items in dispute per section
4.7 and payment arrangements have not been made, the Company shall have the right, in its sole discretion and until the Buyer’s account is current, to require payment in advance for additional shipments of the Products or by C.O.D. or by
irrevocable, revolving, transferable and divisible letter of credit opened at the Buyer’s expense, issued or confirmed by a bank specified by, or acceptable to, the Company, or by such other method of secured payment as the Company shall
prescribe, instead of by open account as provided above. 
 
4.9 Acceptance of Products. In the event of any shortage, damage or discrepancy in or to a shipment of Products, the Buyer shall promptly report the same to the Company and furnish such written evidence or other documentation
as the Company may deem appropriate. The 
 

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Company shall not be liable for any such shortage, damage or discrepancy unless the Company has received
notice and substantiating evidence thereof from the Buyer within thirty (30) days of arrival of the products at the Buyer’s designated shipping address. If the substantiating evidence delivered by Buyer demonstrates to the Company’s
satisfaction that the Company is responsible for such shortage, damage or discrepancy, the Company shall deliver, in its sole discretion, additional, replacement or substitute Products to the Buyer; provided, however, the Company may be liable for
any additional costs, expenses or damages incurred by the Buyer directly or indirectly as a result of such shortage, damage or discrepancy in or to a shipment. 
 
4.10 End of Life. If a component on a board is made obsolete or production of a board is discontinued, the buyer is responsible for
all obsolete materials that cannot be returned for full credit. The Company will maintain the capability to manufacture and ship products for twelve (12) months after End of Life notification. 
 
ARTICLE 5 
BUYER’S WARRANTY 
AND REMEDIES 
 
5.1 Buyer’s Product Warranty. The Company warrants to the Buyer for a period of one (1) year after it ships the Products to the Buyer for general commercial products and for three (3) years after it ships the Products to
the Buyer for Automative products that the Products shall be free from defects in material and workmanship. The Company will adopt Microtune’s RMA procedure which is attached as Exhibit F. The Company will credit Microtune’s account
for all such returned Product and the freight incurred in returning the Product to the Company. 
 
5.2 Minimum Quality Standards. The Company and the Buyer have agreed to adopt various procedures and processes of the Buyer. Failure to comply with Buyer’s procedures and processes shall be
deemed a warranty failure and the Company shall reimburse Buyer for all reasonable costs connected with obtaining products which meet its minimum quality standards. 
 
5.3 Minimum Quality Levels. The Company warrants to the Buyer that it will guarantee a quality level
of no greater than 500PPM defect rate for commercial products and no greater than 500PPM defect rate for automotive per MT standards. 
 
5.4 On Time Delivery. The Company guarantees 95% on time delivery for products and will pay all reasonable costs or damages the
Buyer incurs as a result of any noncompliance with this on time delivery warranty. 
 
5.5 Excluded Claims. The Company shall have no obligation under the Buyer’s Product Warranty in the event that the replacement or substitution of the Products or parts shall have been
caused by the fault or negligence of the Buyer or shall have been caused by the modification of the Products in any manner without prior written consent of the Company. 
 
5.6 Buyers Limited Warranty. The Buyer’s product warranty set forth in this Article 5 is intended
solely for the benefit of the Buyer or their designee. The Buyer’s product warranty set 
 

7 

forth above is in lieu of all other warranties, express or implied, which are hereby disclaimed and
excluded by the Company, including, without limitation, any warranty of merchantability or fitness for a particular purpose or use and all obligations or liabilities on the part of the Company for damages arising out of or in connection with the
use, repair or performance of the products. 
 
5.7
Force Majeure. Neither party shall be responsible for delays or failures in performance resulting from acts beyond the control of such party. Such acts shall include but not be limited to acts of god, riots, acts of war, governmental
regulations superimposed after the facts, communication line failures, power failures, fire or other disasters. 
 
5.8 Delays and Approved Vendor List. Company shall inform Buyer immediately of any production delays caused by Parts Manufacturers
missing their promised ship dates to Company and Company agrees to only approved components as specifically listed in the Product BOM (vendor and exact type) and acknowledges that it is not sufficient to only purchase products from Buyer’s
approved vendor list. All part changes must be approved in writing by the Buyer. The Company will provide the Buyer all required data for such items as PPAPs, Qualpacks, SoC, hazardous material reporting, etc. The Company agrees that all purchasing
contracts must support the Hazardous Material limitations under EACEM EU2000 and/or CS9003D per Certificate of Conformance as well as any future limitations required by Buyer or its customers. 
 
5.9 Consequential Damages. In no event shall the
Company’s liability of any kind to the Buyer include any indirect, special, punitive, incidental or consequential losses or damages, even if the Company shall have been advised of the possibility of such potential losses or damages except as
set forth in this Agreement. 
 
ARTICLE 6

INTELLECTUAL PROPERTY 
 
6.1 Use of Intellectual Property. The Buyer hereby grants to the Company a non-exclusive
non-transferable, and royalty-free right and license to use all Buyer’s copyrights, patents, patent applications, trademarks and tradenames relating to the Products in connection with the Company’s performance of this Agreement. Company
shall not use Buyer’s copyrights, patents, patent applications, trademarks, and trade names, product designs or specifications, or confidential or proprietary information in any manner for its benefit or purposes. The Nondisclosure Agreement,
dated November 27, 2002, between the Company and the Buyer is incorporated in herein by this reference. The Company understands and agrees that its obligations under the Nondisclosure Agreement continue until one year after this Agreement
terminates. 
 
6.2 Indemnification.
The Buyer shall, at its own expense, indemnify and hold the Company harmless from any claim against the Company which is based on an allegation that any Product manufactured by the Company for Buyer hereunder constitutes an infringement of any
copyright, patent or trademark and shall indemnify the Company against any cost, damages, expenses, or losses incurred by the Company as a result of such infringement claim unless such claim arises from the manufacturing process used by the Company
outside of the scope of Buyer’s requirements. Without limiting the generality of the foregoing, the Buyer shall, at its own expense, 
 

8 

 defend any lawsuit instituted against the Company which is based on an allegation that any Product manufactured by the
Company for Buyer hereunder constitutes an infringement of any copyright, patent or trademark and shall indemnify the Company against any cost, damages, expenses, or losses incurred by the Company as a result of any such lawsuit, including, without
limitation, any damage award and or costs against the Company if such award is based in whole or in part on infringement by any Product unless such infringement claim arises from the manufacturing process used by the Company outside the scope of
Buyer’s requirements. 
  
 ARTICLE 7 

DISPUTE RESOLUTION 
  
 7.1 Dispute Resolution. Except as otherwise provided in this Agreement, in the event of a dispute hereunder, either party may initiate negotiation
proceedings by written notice of to the other party setting forth the details of such dispute. If such negotiations are initiated, the parties agree to meet in good faith within fifteen (15) days of such written notice to jointly define the scope
and method to remedy the dispute. If this meeting is not productive, then the parties shall promptly submit such dispute to mediation with an independent mediator acceptable to the Company and the Buyer within twenty (20) days after the good faith
meeting attempt failed. In the event the parties are unable to agree upon a mediator or the mediation does not resolve such dispute, then the parties may exercise all their respective legal and equitable rights in a court of competent jurisdiction.
In the event of a breach of this Agreement which endangers Buyer’s ability to supply its customers, the Dispute Resolution procedures shall not apply. 
  
 ARTICLE 8 
 GENERAL
PROVISIONS 
  
 8.1 Non-Waiver. The failure of any
party to insist upon the strict performance of any term or condition in this Agreement shall not be considered a waiver or relinquishment of future compliance therewith. 
  
 8.2 Independent Contractors. The relationship of the Company and the Buyer shall be that of independent contractors
and nothing contained in this Agreement shall be construed to (a) give any of the parties the power to direct and control the day-to-day activities of any other party, (b) constitute the parties as partners, joint venturers, co-owners or otherwise
as participants in a joint or common undertaking, or (c) make any of the Buyer the agent or employee of the Company or grant to the Buyer any power or authority to act for, bind or otherwise create or assume any obligation on behalf of the Company
for any purpose whatsoever. 
  
 8.3 Compliance with Laws.
The parties shall comply with all applicable laws affecting this Agreement and their performance of this Agreement. 
  
 8.4 Governing Law, Venue and Jurisdiction. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas,
U.S.A. 
  
 8.5 Attorneys’ Fees. In the event of a
dispute arising hereunder, the prevailing party 
  

 9 

shall be entitled to all costs and reasonable attorneys’ fees incurred in connection with such
dispute. 
 
8.6 Entire Agreement;
Modification. This Agreement contains the entire agreement between the parties relating to the subject matter hereof. No modification of this Agreement shall be valid unless it is made in writing and signed by the parties hereto. 
 
8.7 Duplicate Originals. This Agreement may be executed
in two (2) duplicate originals. 
 
IN WITNESS
WHEREOF, the parties hereto have executed this Agreement the day and year first above written. 
 

	 COMPANY:
	 	 	 	 BUYER:

	
	 THREE FIVE SYSTEMS INC.,
	 	 	 	 MICROTUNE INC.,

	
	 By:
	 	  

	 	 	 	 By:
	 	  

	 	 	 Carl Derrington, Vice-President
	 	 	 	 	 	 Douglas J. Bartek, CEO and Chairman

 
 

10 

Exhibit A 
 
ASSET PURCHASE AGREEMENT 
 

11 

Exhibit B 
 
MANUFACTURING PRICE 
 

12 

Exhibit C 
 
TERM PROMISSORY NOTE 
 

13 

Exhibit D 
 
SPECIFICATIONS 
 

14 

Exhibit E 
 
MANUFACTURING STANDARDS 
 

15

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