Document:

Exhibit
10.35

 

MASTER
JOINT TECHNOLOGY DEVELOPMENT AGREEMENT

 

This Master Joint Technology Development Agreement
(this “Agreement”) is entered into as of October 15, 2002 (the “Effective Date”)
by and between Newport Fab, LLC doing business as Jazz Semiconductor, a
Delaware limited liability company having an office at 4321 Jamboree Road,
Newport Beach, California (“Jazz”), and RF Micro Devices, Inc., a North
Carolina corporation having an office at 7628 Thorndike Road, Greensboro, North
Carolina 27409 (“RFMD” and together with Jazz hereinafter jointly referred to
as the “Parties” or individually as a “Party”).

 

WHEREAS, RFMD owns certain valuable and confidential
technology useful for the design and manufacture of integrated circuits for
wireless communications applications; and

 

WHEREAS, Jazz owns certain valuable and confidential
technology useful for the design and manufacture of integrated circuits for
wireless and wireline communications applications and operates a semiconductor
wafer fabrication facility located in Newport Beach, California; and

 

WHEREAS, Jazz and RFMD desire to cooperate with each
other on development projects to jointly design and develop advanced silicon
integrated circuit devices and new silicon wafer manufacturing processes; and

 

NOW, THEREFORE, in consideration of the promises and
mutual covenants herein contained, the Parties agree as follows:

 

1.             DEFINITIONS

 

Capitalized terms used herein and not otherwise
defined shall have the following meanings:

 

1.1           “CA Team” is defined in Section 2.4.

 

1.2           “Risk Production “ means that a particular silicon wafer
fabrication process has established baseline in terms of process recipes,
device models, and design kits, and has passed standard wafer level reliability
tests.

 

1.3           “Confidential Information” shall mean Jazz Confidential Information
and/or RFMD Confidential Information, and shall include this Agreement, each
SOW and the MOU.

 

1.4           “Design” shall mean the electrical design,
layout, schematics, diagrams, specifications and bill of materials for any IC
covered by a SOW and the production photomasks and other production tooling for
the ICs.

 

 

Confidential treatment is being requested for portions of this
document.  This copy of the document
filed as an exhibit omits the confidential information subject to the
confidentiality request.  Omissions are
designated by the symbol [...***...].  A
complete version of this document has been filed separately with the Securities
and Exchange Commission.

 

 

1.5           “Fab” shall mean the facility and associated
assets owned by Jazz, and used by Jazz to provide specialty process foundry
services and to manufacture semiconductor wafers, located in Newport Beach,
California.

 

1.6           “Foreground” shall mean all inventions, discoveries,
improvements, designs, information, data, methods, techniques, drawings,
component board models, layouts, schematics, diagrams, functional blocks,
cells, design rules, simulation models, net lists, software, test protocols,
methods and patterns and other technology developed during the course of Work
under a SOW, whether or not patentable, including all Intellectual Property
Rights embodied therein.

 

1.7           “IC” shall mean an integrated circuit or
other semiconductor device that performs electrical functions, including
associated substrates, circuit elements, embedded passive elements, packaging,
housing and other means of function and support.

 

1.8           “Intellectual Property
Rights” shall
mean all patents and all patent applications (including, without limitation,
originals, divisions, continuations, continuations-in-part, CPA’s, RCE’s,
provisional, extensions or reissues), design rights (whether registered or not
and all applications for the foregoing), copyrights, database rights,
topography rights, mask work rights, applications to register any of the
aforementioned rights, trade secrets, rights in unpatented know-how, rights of
confidence and any other intellectual or industrial property rights of any
nature whatsoever in any part of the world.

 

1.9           “Jazz Background” shall mean the inventions, trade
secrets, know-how, designs, information, data, processes, methods, techniques,
drawings, component board models, layouts, schematics, diagrams, functional
blocks, cells, design rules, simulation models, net lists, software, test
protocols, methods and patterns and other technology owned or used, as at the
effective date of a SOW, by Jazz and which Jazz may use or provide to RFMD in
the performance of Work under such SOW including all Intellectual Property
Rights embodied therein.

 

1.10         “Jazz Confidential
Information”
shall mean all information identified by Jazz as confidential and disclosed by
Jazz to RFMD under the MOU, this Agreement or any SOW.

 

1.11         “Jazz Non-Process
Background” shall
mean Non-Process Background that is owned or used, as at the effective date of
a SOW, by Jazz and which Jazz uses or provides to RFMD in the performance of
Work under such SOW including all Intellectual Property Rights embodied
therein.

 

1.12         “MOU” shall mean the nonbinding Memorandum of
Understanding dated June 26, 2002, between the Parties.

 

1.13         “Non-Process Background” shall mean all Jazz Background and all
RFMD Background other than Process Background.

 

1.14         “Non-Process Foreground” shall mean all Foreground other than
Process Foreground.

 

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1.15         “Person” shall mean any individual, corporation, partnership,
joint venture, trust, business association, governmental entity or other
entity.

 

1.16         “Process” shall mean the semiconductor
manufacturing technology used at the Fab to fabricate ICs and other
semiconductor products, including variants of such technology used to
manufacture CMOS, Bipolar, BiCMOS, SiGe and other devices, as the same is
revised or updated from time to time under this Agreement or otherwise.

 

1.17         “Process Foreground” shall mean Foreground related to or
constituting an improvement, modification, revision, iteration or other
adaptation of the Process and any Foreground related to or constituting a new
Process.

 

1.18         “Prototype” shall mean a preliminary version of an
IC fabricated by Jazz on behalf of RFMD under a SOW, which is intended for
evaluation, testing, characterization and tuning and which may or may not be
functional.

 

1.19         “RFMD Background” shall mean the inventions, trade
secrets, know-how, designs, information, data, processes, methods, techniques,
drawings, component board models, layouts, schematics, diagrams, functional
blocks, cells, design rules, simulation models, net lists, software, test
protocols, methods and patterns and other technology owned or used, as at the
effective date of a SOW, by RFMD and which RFMD may use or provide to Jazz in
the performance of Work under such SOW including all Intellectual Property
Rights embodied therein.

 

1.20         “RFMD Confidential
Information” shall
mean all information identified by RFMD as confidential and disclosed by RFMD
to Jazz under the MOU, this Agreement or any SOW.

 

1.21         “RFMD Process Background” shall mean the semiconductor
manufacturing processes owned or used, as at the effective date of a SOW, by
RFMD and which RFMD uses or provides to Jazz in the performance of Work under
such SOW including all Intellectual Property Rights embodied therein.

 

1.22         “SOW” shall mean the separate Statements of
Work to be agreed by the Parties from time to time regarding specific
development projects agreed to be undertaken by them. Each SOW will be executed
by both Parties and will specify the tasks and Work to be performed by each
Party, the contributions of engineering and design resources, equipment, supplies,
capital and other resources to be made by each Party, the deliverables,
Prototypes and other work product to be generated, the development schedule and
key milestones, the roles and responsibilities of the Parties to complete the
development, the exclusivity, marketing, manufacturing and distribution rights
of the Parties, any royalty obligations of the Parties and such other matters
as the Parties may agree.

 

1.23         “Subsidiary” shall mean a corporation, company or
other entity:

 

(a)           more than fifty
percent (50%) of whose outstanding shares or securities (representing the right
to vote for the election of directors or other managing authority) are, now or
hereafter, owned or controlled, directly or indirectly, by a Party hereto, but
such corporation,

 

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company or other entity
shall be deemed to be a Subsidiary only so long as such ownership or control
exists; or

 

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

 

1.24         “Work” shall mean the work carried out under this Agreement
or under a SOW.

 

2.             SCOPE OF COOPERATION

 

2.1           During the term
of this Agreement, the Parties will work together in a mutually beneficial and
cooperative fashion in order to develop advanced semiconductor products,
develop new and improved semiconductor manufacturing processes and ICs and
create mutually beneficial technological solutions. Each joint development
project undertaken by the Parties will be covered by a separate SOW, which
shall set forth in reasonable detail the tasks and Work to be performed by each
Party, the contributions of employee resources, equipment, supplies, capital,
RFMD Background, Jazz Background and other intellectual property and resources
to be made by each Party, the deliverables, including the hardware and
software, reference designs, technical papers, Prototypes and other work
product to be generated from the Work, the payments (if any) to be made by the
Parties to each other for non-recurring engineering services, the development
schedule and key milestones for the Work and the roles and responsibilities of
the Parties with respect to the manufacture, marketing, promotion,
advertisement, commercialization, distribution and sale of products created
under or resulting from Work under the SOW. Each SOW will describe each Party’s
participation in the evaluation, characterization, testing and debugging of
Prototypes.

 

2.2           Each Party
agrees to use commercially reasonable efforts to perform its responsibilities
under each SOW and to allocate sufficient resources to complete the Work in
accordance with the relevant specifications and development schedule set forth
in such SOW. In the event resource constraints are preventing a timely
completion of milestones or Work under a SOW, each Party will make commercially
reasonable efforts to address the constraints to ensure completion of the
project within the project timeline. To the extent permitted under its existing
contractual obligations, each Party will disclose to the other Confidential
Information that is relevant to the other in completing Work under a SOW,
including all relevant Background necessary to complete the SOW. Either Party
may propose changes or modifications to a SOW. Both Parties will timely review
any proposed changes to a SOW and will identify impacts of such changes on the
development schedule, cost and deliverables under the SOW. Any agreed changes
shall be described in a written amendment to the SOW executed by the Parties.

 

2.3           This Agreement
shall serve as an overall framework with respect to the joint technology
developments of the Parties, and it contains general principles regarding the
Parties’ responsibilities, cost sharing and ownership and use of Intellectual
Property Rights and Foreground applicable to all projects undertaken under an
SOW by the Parties, which principles

 

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may be modified on a project-by-project basis in the SOW, provided such
modifications are signed by both Parties. The initial SOW will be negotiated by
the Parties as soon as practical after the Effective Date. Additional SOWs may
follow from time to time as agreed by the Parties.

 

2.4           RFMD will create two silicon technology
development teams, one of which will be located at RFMD’s principal offices and
one of which will be located at the Fab (the “CA Team”). RFMD will consult with
appropriate personnel at Jazz regarding hiring of personnel for the CA team. The
Parties may assign, on a permanent or temporary basis, one or more Jazz
employees to the CA Team as agreed by the Parties. As of the Effective Date, it
is estimated that the CA Team will consist of approximately seven individuals
by the end of 2003. All persons assigned to the CA Team will devote
substantially all their efforts to technology development projects under this
Agreement and agree to sign a Non-Disclosure Agreement in a form mutually
acceptable to the Parties. The CA Team will report to Jazz’s Integration
Manager, under the supervision of Jazz’s Director of Research &
Development, with secondary reporting to RFMD’s Director of Research &
Development. Unless otherwise agreed by the Parties, all members of the CA Team
will be employees of RFMD and RFMD will be solely responsible for payment of
all salaries, benefits and other compensation and deposit of all income,
unemployment, FICA and other taxes with respect to such persons. The CA Team
will abide by, and be subject to any and all Jazz Security and Safety Policies.

 

2.5           Jazz will provide the CA Team with office
and lab space, office and communications equipment, personal computers and
software, supplies and administrative and technical support. Jazz will bill
RFMD monthly for such services at a rate to be mutually agreed to cover Jazz’s
standard cost of providing such facilities and services. To the extent
reasonably necessary, Jazz will make available its existing Process technology,
engineering personnel and other resources only as provided in each SOW at a
rate to be mutually agreed upon within the SOW. Jazz will also provide, without
charge, sufficient access to its Fab, test equipment, computer-aided design
systems, laboratories and other facilities and associated equipment to enable
the CA Team to complete Work under each SOW. All projects involving Process
developments will follow standard development procedures implemented by Jazz,
and the actual Process development function will continue to be the primary
responsibility of Jazz’s process engineers. Jazz will allow the CA Team to
participate in all relevant meetings and discussions concerning Process
developments covered by a SOW and to engage in all related aspects of Process
development, including process design, starting and monitoring wafer lots,
device characterization, modeling and testing, except to the extent related to
or involving third party confidential information.

 

2.6           In the event a member of the CA Team
discloses to RFMD confidential information regarding Jazz, or Jazz customers,
other than in connection with a SOW or this Agreement, RFMD agrees to promptly
notify Jazz of such disclosure and to take appropriate reasonable action
regarding such member of the CA Team. In the event an employee of Jazz or any
other person with access to the Fab discloses to Jazz confidential information
regarding RFMD, or RFMD customers, other than in connection with a SOW or this
Agreement, Jazz agrees to promptly notify RFMD of such disclosure and to take
appropriate reasonable action regarding such person. Nothing contained in this
Section 2.6 shall limit the rights and obligations of the Parties under Section
3 of this Agreement. The Parties acknowledge and agree

 

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that the notices
provided under this Section 2.6 shall not be an admission of any breach under
Section 3 or any other provision of this Agreement, and neither the fact nor
substance of such notice shall be admissible as evidence against the notifying
Party.

 

2.7           Both Parties agree
not to directly or actively recruit, divert or solicit the employment of either
Party’s employees during the term of this Agreement and for a period of twelve
(12) months thereafter.

 

2.8           Each SOW will
address any exclusivity provisions with respect to the development,
manufacturing and marketing of any products resulting from the Work under each
SOW. If exclusivity is not specifically addressed in a SOW, then subject to the
other terms of this Agreement, the following exclusivity provisions shall
prevail:

 

2.8.1        RFMD shall
exclusively own all Non-Process Foreground, including the Design of all ICs
fabricated for it at the Fab, and shall retain the exclusive right to make,
have made, use, import, market, offer for sale and sell ICs based on or
derived, in whole or in part, from such Designs. RFMD may not use the improved
Process Foreground fully funded by RFMD under Section 2.8.3, for manufacturing
at any internal or foundry site other than a Jazz site, until [. . . *** . . .]
from the Risk Production at the Fab of such new or improved Process,
and RFMD agrees that if RFMD asserts “have made” rights under this Section
2.8.1 at a location other than a Jazz location thereafter, RFMD shall do so
only in full accordance with RFMD’s obligation to give JAZZ the first right of
refusal to supply all RFMD silicon demand, provided JAZZ is competitive in
pricing, technology, quality and delivery, as set forth in the Wafer Supply
Agreement entered into between RFMD and JAZZ contemporaneously herewith;
provided that, in the event RFMD rightfully asserts its “have made” rights,
Jazz shall grant a royalty-free, non-transferable, reasonable license to a
third party foundry authorized by RFMD to use the appropriate Process for the
express, limited purpose of manufacturing ICs for RFMD.

 

2.8.2        Jazz shall exclusively own all Process
Foreground related to development of CMOS and SiGe Processes arising from
development projects, or internally funded by Jazz or developed independently
from an SOW,  and will be free to offer
foundry services to any Person, including RFMD, for the use of such improved
Processes.

 

2.8.3        Jazz shall exclusively own all Process
Foreground, and new and improved Process Foreground arising from development
projects under a SOW that are funded solely by RFMD, however Jazz hereby agrees
that RFMD shall have the [. . . *** . . .]
right to have ICs fabricated for it at the Fab under such new or improved
Process; provided, that RFMD issues a binding purchase orders for at least [. . . *** . . .]
wafers within [. . . *** . . .]
from the Risk Production of such new or improved Process. RFMD needs to
purchase minimum annual quantities of [. . . *** . . .]
wafers based on such new or improved Process thereafter to maintain the [. . . *** . . .]
right, otherwise, Jazz will be free to provide foundry services to any
Person, including RFMD, for the use of such new or improved Process.

 

2.8.4        Jazz shall exclusively own all new or
improved Processes arising from development projects under a SOW that are
funded jointly by Jazz and RFMD. However, if RFMD funds greater than or equal
to [. . . *** . . .]
percent ([. . . *** . . .]%),
but less than [. . . *** . . .]
([. . . *** . . .]
%) of the project, RFMD shall have the [. . . *** . . .] right to have

 

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ICs fabricated for
it at the Fab under such new or improved Process Foreground for a period of [. . . *** . . .]
from the Risk Production of such new or improved Process Foreground. Thereafter,
Jazz will be free to provide foundry services to any Person, including RFMD,
for the use of such new or improved Process. Jazz agrees that it shall not
increase funding to a development project under a SOW without RFMD’s prior
written consent.

 

2.8.5        Without regard to whether RFMD has or
retains exclusive rights to have ICs fabricated for it at the Fab using a new
or improved Process Foreground under Sections 2.8.2 – 2.8.4, RFMD will be
provided access to such new or improved Process Foreground on terms no less
favorable than those provided to any other customer of Jazz, with the exclusion
of Conexant or its affiliates or spin-offs under existing wafer supply
agreements.

 

3.             CONFIDENTIAL INFORMATION

 

3.1           The handling of
all Confidential Information, including that Confidential Information
transferred under the MOU and to be transferred under the Agreement and each
SOW, shall be in accordance with this Section 3. Confidential Information
previously provided under the MOU or disclosed by the Parties prior to the
Effective Date shall be treated as if disclosed under this Agreement.

 

3.2           For a period of
five (5) years from the date of disclosure of Confidential Information, the
receiving Party agrees to use the same degree of care and discretion to avoid
disclosure, publication or dissemination of Confidential Information outside of
the receiving Party as it uses with its own similar information that it does
not wish to disclose, publish or disseminate. RFMD may use Jazz Confidential
Information: (i) for any purpose related to the performance of its duties under
this Agreement or a SOW; (ii) as permitted under the terms of the license
rights granted by Jazz in Section 5.2; and (iii) may not use the Jazz
Confidential Information for any other purpose not expressly permitted under
this Agreement. Jazz may use RFMD Confidential Information: (i) for any purpose
related to the performance of its duties under this Agreement or a SOW; (ii) as
permitted under the terms of the license rights granted by RFMD in Section 5.3;
and (iii) may not use the RFMD Confidential Information for any other purpose
not expressly permitted under this Agreement.

 

3.3           Confidential
Information may be disclosed either in writing, by delivery of items, by
initiation of access to Confidential Information, such as may be contained in a
database, or by oral or visual presentation.

 

3.4           The disclosing
Party to mark Confidential Information as Jazz Confidential Information or RFMD
Confidential Information, as the case may be. If Confidential Information is
not so marked or is disclosed orally, the disclosing Party agrees to identify
Confidential Information as confidential at the time of disclosure and provide
the receiving Party with written confirmation within thirty (30) days after
disclosure.

 

3.5           The receiving
Party may disclose Confidential Information to its employees and employees of
its parent and Subsidiary companies, consultants and subcontractors who have a
need to know and to anyone else with the disclosing Party’s prior written
consent. Before disclosure to any of the above parties, the receiving Party
agrees to have a written agreement

 

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with such party sufficient to require it to treat Confidential
Information in accordance with this Agreement.

 

3.6           Notwithstanding
any other provision of this Agreement, the nondisclosure obligations specified
in Section 3.2 shall not apply to any Confidential Information which:  is already in the possession of the receiving
Party or any of its Subsidiaries without obligation of confidence; is
independently developed by Persons (not having access to Confidential
Information) of, or for the receiving
Party or any of its Subsidiaries; becomes publicly available without breach of
this Agreement; is rightfully received by the receiving Party from a third
party not under an obligation of confidentiality; is released for disclosure by
the disclosing Party with its written consent.

 

3.7           Disclosure of
Confidential Information shall not be precluded if such disclosure is:

 

3.7.1        in response to a
valid order of a court or other governmental body; provided, however, that the
receiving Party shall first have notified promptly the disclosing Party and
shall have made a reasonable effort to obtain a protective order requiring that
the Confidential Information so disclosed be used only for purposes for which
the order was issued; or

 

3.7.2        otherwise
required by law; provided, however, that the receiving Party must give the
disclosing Party prompt notice and make a reasonable effort to obtain a
protective order or, if requested, assist the disclosing Party in obtaining a
protective order; or

 

3.7.3        necessary to
establish the receiving Party’s rights under this Agreement.

 

3.8           If any
Confidential Information falls under an exception set forth in Section 3.6, the
receiving Party shall not disclose that the disclosing Party hereto was the
source of that Confidential Information.

 

4.             INTELLECTUAL PROPERTY RIGHTS

 

4.1           (a)           Except as
otherwise provided in a SOW, the RFMD Background (and all Intellectual Property
Rights therein) shall remain the exclusive property of RFMD.

 

(b)           Except as
otherwise provided in a SOW, the Jazz Background (and all Intellectual Property
Rights therein) shall remain the exclusive property of Jazz.

 

(c)           Except as
otherwise provided in a SOW, all Process Foreground (and all Intellectual
Property Rights therein) arising from Work shall be the exclusive property of
Jazz, regardless of whether such Process Foreground is invented solely by Jazz,
solely by RFMD or jointly by the Parties. Jazz shall have the sole and
exclusive right (but not the obligation) to seek patent protection for any
Process Foreground in all countries of the world at its sole expense and shall
have full control over the prosecution and maintenance of such patents and
title to any patent issuing therefrom shall be issued solely in the name of
Jazz.

 

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(d)           Except as otherwise
provided in a SOW, all Non-Process Foreground (and all Intellectual Property
Rights therein) arising from Work shall be the exclusive property of RFMD,
regardless of whether such Non-Process Foreground is invented solely by Jazz,
solely by RFMD or jointly by the Parties. RFMD shall have the sole and
exclusive right (but not the obligation) to seek patent protection for any
Non-Process Foreground in all countries of the world at its sole expense and
shall have full control over the prosecution and maintenance of such patents
and title to any patent issuing therefrom shall be issues solely in the name of
RFMD.

 

4.2           Employees of
Jazz or RFMD performing work under this Agreement or a SOW who develop
Foreground, whether solely or jointly with others, shall promptly make a
complete written disclosure to their employer for patent review of such
Foreground, in the normal course, specifically pointing out those features or
concepts believed to be new or different. Each Party agrees to promptly submit
to the other Party upon request copies, marked as Jazz Confidential Information
or RFMD Confidential Information, as the case may be, of any written
disclosures pertaining to Foreground submitted exclusively to it, which
submissions shall be subject to the provisions of Section 3 of this Agreement.

 

5.             EXPLOITATION

 

5.1           Jazz hereby
grants to RFMD a worldwide, nonexclusive, nontransferable license to use the
Jazz Non-Process Background licensable by Jazz (and the Intellectual Property
Rights of Jazz therein), and any Non-Process Foreground to the extent owned by
Jazz (and the Intellectual Property Rights therein), to perform its obligations
hereunder and under any applicable SOW and to, use, have used, lease, offer to
sell, sell or otherwise transfer any product based on Work arising from a SOW
(including any derivative) and to practice and have practiced any non process
method in support of these rights. Except as otherwise provided in an
applicable SOW, this license is royalty-free. This license shall include the
right of RFMD to grant revocable sublicenses to its Subsidiaries and other
subcontractors to make ICs on behalf of RFMD and its Subsidiaries, to customers
of RFMD in order to permit such customers to incorporate RFMD ICs in their
products and to end users of RFMD’s customers in order to permit such end users
to use such products. The foregoing license is irrevocable. The license granted
in this Section 5.1 does not include rights related to the Process Background
or Process Foreground.

 

5.2           RFMD hereby
grants to Jazz a worldwide, nonexclusive, nontransferable and non-sublicensable
(except as provided in this Section 5.2) royalty-free license to use the RFMD
Process Background (and the Intellectual Property Rights of RFMD therein), to
perform its obligations under this Agreement and under any applicable SOW and
to make, use, have used, lease, offer to sell, sell or otherwise transfer any
product or process based on work arising from a SOW (including any derivative)
and to practice and have practiced any method in support of these rights. Except
as otherwise provided in an applicable SOW, this license is royalty-free. This
license shall include the right of Jazz to grant revocable sublicenses to its
Subsidiaries, to third party subcontractors to make ICs on behalf of Jazz’s
customers, to customers of Jazz in order to permit such customers to design
their products under Jazz’s Process and to end users of Jazz’s customers in
order to permit such end users to use such products. The foregoing license is

 

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irrevocable. The license granted in this Section 5.2 does not include
rights related to ICs, whether Foreground or Background.

 

5.3           Jazz hereby
grants to RFMD a worldwide, irrevocable, non-exclusive, transferable,
royalty-free license, under Jazz’s rights in any Jointly Owned Foreground, to
use, and commercially exploit, such Jointly Owned Foreground in any way it sees
fit, and to sublicense any other Person to do the same.

 

5.4           RFMD hereby
grants to Jazz a worldwide, irrevocable, non-exclusive, transferable,
royalty-free license, under RFMD’s rights in any Jointly Owned Foreground, to
use, and commercially exploit, such Jointly Owned Foreground in any way it sees
fit, and to sublicense any other Person to do the same.

 

5.5           If the Parties,
through a SOW, agree to Work involving or including new or improved Process
technology, Jazz will exclusively own all Process Foreground (and all
associated Intellectual Property Rights) related to such new or improved
Process technology. No license or other right to use Process technology except
in conjunction with the fabrication of ICs designed by RFMD at the Fab will be
granted to RFMD or will arise out of this Agreement in favor of RFMD, by
implication, estoppel or otherwise.

 

6.             OTHER LICENSES

 

Except as expressly
provided in Section 5 or in a SOW, nothing contained in this Agreement shall be
deemed to grant, either directly or by implication, estoppel or
otherwise, any license, including (but not limited to) any license under any
copyrights, trademarks, maskworks, inventions, background technologies,
Foreground, patents, patent applications or any Intellectual Property Rights of
either Party.

 

7.             TERM, TERMINATION AND EXPIRATION

 

7.1           This Agreement
shall commence on the Effective Date and shall continue for five (5) years
following that date (the “Initial Term”) and will automatically renew for
subsequent one-year terms unless either Party gives the other Party written
notice of its intent not to renew at least thirty (30) days prior to the end of
the Initial Term or of any renewal term; provided, that this Agreement shall
expire sooner upon the first to occur of the following:  (i) the mutual written agreement of the
Parties to terminate this Agreement; or (ii) the termination of this Agreement
pursuant to Section 7.2 hereof.

 

7.2           As each Party is
disclosing Confidential Information and is committing significant resources and
has bargained for the other Party’s unique and special expertise hereunder,
each Party may immediately (except as set forth in Section 7.2.5) terminate
this Agreement if any of the events of default specified in Sections 7.2.1
through 7.2.6 occur. The defaulting Party shall promptly notify the other Party
in writing if it engages in or suffers any of such events of default. The
events of default are:

 

7.2.1        a Party becomes
insolvent, is dissolved or liquidated, has a petition in bankruptcy,
reorganization, dissolution or liquidation or similar action filed by or
against it, is adjudicated a bankrupt, or has a receiver appointed for its
business;

 

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7.2.2        a Party has all
or a substantial portion of its capital stock or assets expropriated or
attached by any government entity;

 

7.2.3        a Party makes an
assignment of all or substantially all its assets for the benefit of creditors;

 

7.2.4        a Party is
subject to property attachment, court injunction, or court order materially
adversely affecting its performance under this
Agreement;

 

7.2.5        a Party
materially breaches any provision of this Agreement and such breach is not
cured within sixty (60) days of written notification
by the notifying Party to the breaching Party; or

 

7.2.6        The Promissory Note of RFMD in the principal amount of $30 million held by
Jazz dated October 15,2002 is not paid in full in cash by October 15, 2003.

 

7.3           When this
Agreement is terminated:

 

7.3.1        each Party shall
continue to be bound by the confidentiality obligations of Section 3 of this
Agreement; and

 

7.3.2        each Party shall
continue to be bound to the licenses granted to the other Party in Section 5 of
this Agreement; and

 

7.3.3        each SOW then in
existence shall remain in full force and effect in accordance with its terms.

 

7.4           The provisions
of this Section 7 are without prejudice to any rights or remedies either Party
may have, under the general law or in equity, upon expiration or termination of
this Agreement.

 

7.5           The development
work under each SOW will be considered completed by reference to performance of
agreed upon milestones and delivery schedules. Each Party may terminate work
under a SOW at any time upon notice to the other Party without penalty or
future obligation to make payments due to market considerations or competitive
considerations, or if the development project addressed by the SOW is delayed
or is otherwise not likely to be commercially successful.

 

8.             COORDINATORS

 

The Parties’ project
coordinators for disclosing or receiving Confidential Information are:

 

Jazz:

RFMD:

 

These project coordinators shall
also oversee the Work to be done pursuant to this Agreement and each SOW,
mutually agree to, and approve, any changes to be made to such Work, and
attempt to resolve any disputes related to this Agreement and any SOW. Each
Party may change

 

11

 

its coordinator from time to time
during the term of this Agreement by notifying the coordinator for the other
Party in writing at the designated address for notices.

 

9.             GENERAL PROVISIONS

 

9.1           This Agreement
shall be governed by and construed in accordance with the laws of the State of
Delaware, excluding the conflicts of law, and the parties hereto irrevocably
submit to the exclusive jurisdiction of the Courts of the State of Delaware
with respect to such claim or dispute.

 

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

 

9.3           (a)           All information,
know-how, technologies, services, background technology, Foreground and
Prototypes provided by either Party hereunder are provided “AS IS”, without warranty of any type or kind. Neither Party
hereunder makes any warranty of any kind, express or implied, including implied
warranties of merchantability, fitness for a particular purpose, satisfactory
quality, good title or warranties of non-infringement of third-party
Intellectual Property Rights.

 

(b)           Neither Party
shall be liable to the other for any defects within any information, know-how,
technologies, services, background technology, Foreground and Prototypes
provided to the other Party hereunder, except to the extent that such liability
is incapable of exclusion at law.

 

(c)           Neither Party
shall be liable to the other if any information, know-how, technologies,
services, background technology, Foreground and Prototypes provided to the
other Party hereunder infringe the Intellectual Property Rights of any third
party, except to the extent that such liability is incapable of exclusion at
law.

 

9.4           Neither Party
shall use any name, trade name or other designation of the other Party
(including any contraction, abbreviation or simulation of the foregoing), or
reference or disclose the contents this Agreement, the MOU or any SOW, without
the prior written consent of the other Party, which consent shall not be
unreasonably withheld.

 

9.5           If any term or
provision of this Agreement or any SOW shall, in any jurisdiction and to any
extent, be finally held to be invalid or unenforceable, such term or provision
shall be ineffective only to the extent of such invalidity or unenforceability,
without invalidating or rendering unenforceable any other term or provision of
this Agreement or such SOW, so long as the remainder of this Agreement or such
SOW still effectuates the essential purposes of this Agreement or such SOW. If
such essential purposes cannot be effectuated, this Agreement or such SOW shall
either be renegotiated or terminated without cause by either Party.

 

9.6           The failure of a Party to insist upon strict adherence to any term of this Agreement or a SOW on any
occasion shall not be considered a
waiver, nor shall it deprive that Party of the right to insist later on
adherence thereof, or thereafter to insist upon strict adherence

 

12

 

to that term or any other term of this Agreement or a SOW. Any waiver
must be in writing to be effective.

 

9.7           The headings in
this Agreement and each SOW are intended solely for convenience of reference
and shall be given no effect in the construction or interpretation of this
Agreement or any SOW. The terms “herein”, “hereof”, “hereunder” and any similar
terms used in this Agreement or any SOW refer to this Agreement or such SOW (as
the case may be), and all reference to “this Agreement” refer to this
instrument and the Exhibits hereto, as amended from time to time. The terms “including”
or “include” shall mean “including, without limitation”, or “include, without
limitation”.

 

9.8           Neither Party
may assign any of its rights, privileges or obligations hereunder or under any
SOW without the express written consent of the other Party. Where either Party
experiences (i) the sale by that Party of all or substantially all its assets,
liabilities and business in a single transaction to a single Person, or (ii) a
merger of a Party with or into another Person, then the other Party retains all
license rights granted under this Agreement. Any unauthorized assignment of
this Agreement or any SOW is void.

 

9.9           EXCEPT FOR INTENTIONAL, RECKLESS OR
GROSSLY NEGLIGENT BREACHES OF THIS AGREEMENT, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER
PARTY FOR LOST PROFITS OR FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL,
OR EXEMPLARY DAMAGES ARISING FROM THE SUBJECT MATTER OF THIS AGREEMENT,
REGARDLESS OF THE TYPE OF CLAIM AND EVEN IF THAT PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. FURTHER,
IN NO EVENT WILL THE PARTIES’ AGGREGATE LIABILITY (INCLUDING ATTORNEY’S FEES)
HEREUNDER EXCEED SIX MILLION DOLLARS ($6,000,000), EXCEPT THAT THIS LIMITATION
SHALL NOT APPLY TO ANY INTENTIONAL, RECKLESS OR GROSSLY NEGLIGENT BREACH OF
SECTION 3 OF THIS AGREEMENT.

 

9.10         Each Party to
this Agreement agrees to comply with all applicable laws, rules, regulations,
licenses and approvals of any duly constituted governmental authority having
jurisdiction. Each Party to this
Agreement, on behalf of itself and its Subsidiaries, shall do all things
necessary to obtain, in a timely manner, all such licenses and approvals and to
comply with all applicable laws, rules and regulations, including, but not limited to, the
regulations of the United States
Department of Commerce.

 

9.11         Each Party to
this Agreement, on behalf of itself and its Subsidiaries, agrees that neither
it nor any of its Subsidiaries will export or re-export, directly or
indirectly, any technology, software, and/or commodities furnished under this
Agreement or any SOW, or the direct product thereof, to any country, or the
nationals thereof, specified in the laws, rules and regulations of the
jurisdiction in which the Party is based as an unauthorized destination without
first obtaining approval from the relevant authority.

 

9.12         It is agreed
that this Agreement establishes a contractual relationship but does not create
any legal structure such as a partnership, joint venture or any agency
relationship between the Parties, nor shall either Party hold itself out as
such contrary to the terms hereof by

 

13

 

advertising or otherwise, nor shall either Party be bound or become
liable because of any representation, action or omission of the other Party. Each
Party is an independent contractor of the other and this Agreement does not
create an agency relationship between Jazz and RFMD or between Jazz and RFMD
personnel. Neither Party assumes any liability or responsibility for personnel
of the other. Each Party shall be responsible for the supervision, control,
compensation, withholdings, health and safety of its personnel.

 

9.13         (a)           Each Party
agrees, subject to Sections 2, 3, 4 and 5 hereof, that this Agreement will not
restrict the right of a Party to enter into agreements with any third party for
the same or similar efforts, or to make, have made, use, sell, buy, develop,
market, or otherwise transfer any products or services now or in the future, to
any market, regardless of whether such products or services are competitive to
the activities hereunder.

 

(b)           It is
acknowledged and agreed by each Party that nothing in this Agreement prohibits
(or is intended to inhibit) either Party from independently developing,
acquiring, licensing or otherwise exploiting technology which is the same or
similar to Work under a SOW. Both Parties will continue to be bound by the
confidentiality obligations in Section 3 and will not use any of the other
Party’s Background or solely owned Foreground or other Intellectual Property
Rights of the other Party except as provided in this Agreement.

 

9.14         All
communications and notices between the Parties concerning this Agreement and
each SOW shall be in writing and delivered either in person or by mail to the
person and address specified below. Such communications and notices shall be
effective upon receipt.

 

	
  For Jazz:

  	
  Jazz Semiconductor,
  Inc.

  
	
   

  	
  4321 Jamboree
  Road

  
	
   

  	
  Newport Beach,
  California 92660

  
	
   

  	
  Attention:
  Carolyn Follis

  
	
   

  	
   

  
	
  For RFMD:

  	
  RF Micro
  Devices, Inc.

  
	
   

  	
  7628 Thorndike
  Road

  
	
   

  	
  Greensboro,
  North Carolina 27409-9421

  
	
   

  	
  Attention:
  Suzanne Rudy

  

 

9.15         Neither Party
shall be responsible for failure to fulfill its
obligations under this Agreement due to fire, flood, war or other such cause
beyond its reasonable control and without its fault or negligence, provided it
promptly notifies the other Party.

 

9.16         Sections 3, 4,
5, 6, 7 and 9 of this Agreement will survive the termination or expiration of
this Agreement and shall remain in effect beyond such termination or expiration
until fulfilled and shall apply to each Party’s successors and assigns.

 

9.17         This Agreement
and each SOW entered into hereunder shall be the complete and exclusive
statement of the agreement of the Parties and shall supersede all prior
agreements and understandings, oral or written, between or among the Parties
respecting the subject matter hereof, including the MOU.

 

14

 

9.18         This Agreement
may not be changed or terminated orally by or on behalf of any Party. Any
amendments to this Agreement shall be in writing and signed by authorized
representatives of Jazz and RFMD.

 

9.19         Neither Party
will issue a press release regarding this Agreement or any SOW without the
written consent of the other Party. The Parties will issue a joint press
release announcing this collaboration at a mutually acceptable time.

 

 

[The remainder of this page is intentionally left
blank.]

 

15

 

IN WITNESS WHEREOF, each
of the Parties has caused this Agreement to be executed in
duplicate originals by its duly authorized representative on the respective
dates entered below.

 

	
   

  	
  NEWPORT FAB, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  \s\ Scott
  Silcock

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Scott Silcock

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President
  Operations

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  October 15, 2002

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  RF MICRO DEVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  \s\ Jerry D.
  Neal

  
	
   

  	
   

  
	
   

  	
  Name:

  	
  Jerry D. Neal

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Executive Vice
  President of Marketing &

  
	
   

  	
   

  	
  Strategic
  Development

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  October 15, 2002Exhibit 10.36

 

LICENSE AND SUPPLY AGREEMENT

 

THIS
AGREEMENT, is made and entered into this 16th day of
December, 2003 (“Effective
Date”) by and between NEWPORT FAB, LLC,
a Delaware limited liability company d/b/a Jazz Semiconductor (“Jazz”), and ADVANCE SEMICONDUCTOR MANUFACTURING CORP. OF SHANGHAI, a
corporation formed under the laws of the Peoples Republic of China (“ASMC”) (hereinafter
Jazz and ASMC may each be referred to as a “party”
and may be jointly referred to as “parties”).

 

PURPOSES

 

ASMC has committed to
provide Jazz with semiconductor products utilizing manufacturing capacity at
ASMC’s facility in Shanghai, Peoples Republic of China that ASMC has reserved
for the exclusive use of Jazz. This Agreement provides the terms and conditions
for the manufacture of such products by ASMC for Jazz, including the use of the
information and know-how of Jazz in order to meet Jazz’s needs for Wafers, and
for no other purpose.

 

In consideration of the
mutual promises of the parties hereto, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto, intending to be legally bound, do hereby agree as follows:

 

ARTICLE 1

 

DEFINITIONS

 

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

 

1.1           “Affiliate” shall mean
and include, with respect to either of the parties, any Person that directly or
indirectly controls, is controlled by or is under common control with such
specified Person.

 

1.2           “Aggregate Wafer Receipts”
shall mean an aggregate amount equal to the sum of (i) the ASMC Net Income and
(ii) the Jazz Net Income.

 

1.3           “ASMC’s Facility”
shall mean ASMC’s facility located at 385 Hong Cao Road, Shanghai 200233,
Peoples Republic of China.

 

1.4           “ASMC
Net Income” shall mean the aggregate gross revenue of ASMC
resulting from the sale of the Wafers to Jazz pursuant to this Agreement,
determined as of the date of the finding of infringement.

 

1.5           “CMOS” and “BiCMOS” shall refer to complementary metal oxide
semiconductor devices and bipolar complementary metal oxide semiconductor
devices, respectively.

 

1.6           “Damages” shall mean
any and all demands, claims, actions or causes of action, assessments, losses,
diminution in value, damages (including special and consequential damages),
liabilities, costs, and expenses, including without limitation, interest,
penalties, cost of investigation and defense, and reasonable attorneys’ and
other professional fees and expenses.

 

Confidential
treatment is being requested for portions of this document.  This copy of
the document filed as an exhibit omits the confidential information
subject to the confidentiality request.  Omissions are designated by the
symbol [...***...].  A complete version of this document has been filed
separately with the Securities and Exchange Commission.

 

 

1.7           “Delivery
Date” shall mean a date for delivery of an agreed upon quantity
of Wafers ordered by Jazz as set forth in any Jazz order.

 

1.8           “Intellectual
Property Rights” shall mean all patents and all patent applications
(including, without limitation, originals, divisions, continuations,
continuations-in-part, CPA’s, RCE’s, provisional, extensions or reissues),
design rights (whether registered or not and all applications for the
foregoing), copyrights, database rights, topography rights, mask work rights,
applications to register any of the aforementioned rights, trade secrets,
rights in unpatented know-how, rights of confidence and any other intellectual
or industrial property rights of any nature whatsoever in any part of the
world.

 

1.9           “Lead-time” shall mean
the estimated amount of time required from order placement to delivery as
agreed to by the parties.

 

1.10         “Jazz Net Income”
shall mean the aggregate gross revenue of Jazz resulting from the sale of the
Wafers to its customers, less
(ii) the aggregate amount paid by Jazz to ASMC pursuant to this Agreement,
determined as of the date of the finding of infringement.

 

1.11         “Jazz Technology”
shall mean all proprietary information and know-how provided to ASMC by Jazz or
any of its Affiliates, no matter what form and including without limitation
information and know-how identified in Confidential Information Transmittal
Report(s) (copies of which shall be provided to Jazz), that relate to Jazz’s
process(es) for the manufacture of Wafers, Jazz’s specifications for Wafers,
Jazz’s performance criteria for Wafers and all other matters relating to Wafers
and their manufacture, including without limitation, information relating to
the products and processes identified in Exhibit
A hereto.

 

1.12         “Jazz Patent Rights”
shall mean those patent rights owned by Jazz during the term of this Agreement.

 

1.13         “Person” shall mean and include
any individual, corporation (including any non-profit corporation), general or
limited partnership, limited liability company, joint venture, estate, trust,
association, organization, labor union, or other entity or governmental body.

 

1.14         “Process” shall mean
Jazz’s process for the manufacture of Wafers as communicated by Jazz or any of
its Affiliates to ASMC or from time to time during the term of this Agreement.

 

1.16         “Term” shall have the
meaning ascribed to it in Article 15.

 

1.17         “Wafers” shall mean
wafers that have been manufactured or processed according to the Process so as
to include or embody any of the products listed on Exhibit B attached hereto.

 

1.18         “Wafer Acceptance Criteria”
shall mean those written Wafer
specifications, engineering requirements, performance criteria, etc. provided
to ASMC by Jazz or any of its Affiliates from time to time during the term of
this Agreement.

 

CONFIDENTIAL 

 

2

 

ARTICLE 2

 

PURCHASE
OF WAFERS; PURCHASE FORECASTS, ETC.

 

2.1           ASMC shall
manufacture Wafers utilizing the Process for Jazz. Jazz will purchase Wafers
manufactured by ASMC in accordance with the terms of this Agreement.

 

2.2           Jazz
shall provide to ASMC on or before [...***...] rolling forecast setting forth its
estimated requirements [...***...] for Wafers. Such rolling forecast shall not
constitute a binding commitment to ASMC to buy the estimated number of Wafers
specified.

 

2.3           With
respect to Specialty Wafers, ASMC shall provide Jazz with sufficient production
capacity at ASMC’s Facility to manufacture at least five thousand (5,000) Wafer
starts per month between the Effective Date and March 2004 and at least ten
thousand (10,000) Wafer starts per month between April 2004 and December 2006. Additionally,
ASMC shall use best efforts to meet Jazz’s demand for Specialty Wafers should
that demand exceed the forgoing minimum quantities.

 

2.4           With
respect to Advanced Specialty Wafers, ASMC shall use best efforts to provide
Jazz with the quantity of Wafers set forth in the [...***...] rolling forecast for all
months after March 2004.

 

2.5           ASMC
shall manufacture Wafers, including, without limitation, Specialty Wafers,
using Jazz Technology and/or the Process exclusively for Jazz. Except as set
forth in Section 2.11, ASMC shall not manufacture Specialty wafers for any
entity other than Jazz, regardless of the process used in the manufacture of
such wafers. ASMC shall have the right to manufacture CMOS and BiCMOS wafers
for entities other than Jazz, provided that ASMC shall not use the Process, the
Jazz Patent Rights or Jazz Technology, in whole or in part, in such manufacture
without an express license from Jazz.

 

2.6           With
respect to CMOS and BiCMOS Wafers, ASMC shall use best efforts to provide Jazz
with the quantities of Wafers set forth in the [...***...] rolling forecast.

 

2.7           Jazz
shall place its purchase order for Wafers with ASMC in accordance with the
Lead-time.

 

2.8           Jazz shall qualify the suppliers to ASMC of
major equipment, chemicals and other components required to manufacture the
Wafers in accordance with the Process and the terms hereof. Thereafter, such
suppliers may not be changed without [...***...] prior notice so that Jazz may qualify the proposed new supplier

 

2.9           Nothing
herein shall be construed as an obligation on the part of Jazz to purchase any
quantity of Wafers from ASMC.

 

2.10         ASMC
shall use commercially reasonable efforts to refer potential customers for
semiconductor devices to Jazz. If ASMC refers any potential customer(s) with
which Jazz has a commercial relationship, and the referred customer(s) agrees
to purchase Specialty Wafers from Jazz, then Jazz shall give ASMC the first
option to provide Specialty Wafers to Jazz for the referred customer, provided
that the referred customer does not otherwise object to ASMC as a source for
Specialty Wafers.

 

2.11         If
Jazz’s orders for Specialty Wafers for [...***...]
consecutive months are less than [...***...]percent
([...***...]%) of the smaller of:
(1) ASMC’s actual capacity for the manufacture of Specialty Wafers and (2) the
capacity amounts set forth in Section 2.3, then 

 

3

 

ASMC may manufacture
Specialty wafers for third parties, provided that ASMC shall not utilize
Process, Jazz Patent Rights or Jazz Technology in whole or in part, in such
manufacture.

 

2.12         If Jazz
considers obtaining Specialty Wafers from third parties between [...***...], then Jazz shall meet its
requirements of up to [...***...] from ASMC
pursuant to this Agreement provided: (1) the capacity for the manufacture of
Specialty Wafers at all Jazz facilities now owned or hereafter acquired
(including those facilities under complete or partial common ownership) is
full, (2) Jazz’s customer(s) do not object to ASMC as a source of Specialty
Wafers and (3) ASMC agrees to sell such Specialty Wafers to Jazz on terms and
conditions as advantageous, in terms of price, delivery and otherwise, as any
third party offer(s) made to Jazz for the provision of Specialty Wafers.

 

ARTICLE 3

 

ORDERS

 

3.1           Jazz
shall place orders for the Wafers by mail or by facsimile to ASMC or in another
mutually agreed upon way. ASMC shall, within [...***...] after receipt of such orders, send Jazz an acknowledgement
of such orders. ASMC shall regard Jazz’s orders as having most favored customer
status, providing Wafers to Jazz in quantities and on schedules at least as
advantageous as ASMC provides comparable wafers to its two other largest
customers in terms of sales revenues.

 

3.2           The
terms of this Agreement shall supersede the terms of any Jazz purchase order
and/or ASMC’s acknowledgment/acceptance of such purchase order. Although it is
recognized that the parties may, for their respective convenience, desire to
use standardized purchase order forms, acknowledgment forms and other documents
which may contain terms in addition to or at variance with the terms of this
Agreement, no purchase order or acknowledgement will amend this Agreement and
all purchase order or acknowledgements shall be subject to the terms and
conditions of this Agreement regardless of statements to the contrary contained
within the purchase order or acknowledgment.

 

3.3           All
matters designated herein as subject to agreement of the parties must be agreed
upon in a writing signed by authorized representatives of both parties for such
agreement to be effective. All issues that arise during the Term that are not
addressed by the terms herein shall be resolved in accordance with Article 17
below.

 

ARTICLE 4

 

MANUFACTURE
OF WAFERS, ETC.

 

4.1           ASMC
shall manufacture Wafers only according to the Process and only on behalf of
Jazz.

 

4.2           ASMC
shall, at its own expense, install all equipment necessary to produce Wafers
according to Process in the minimum quantities contemplated by this Agreement. Further,
ASMC shall install, at its own expense, all equipment necessary to manufacture
Specialty Wafers in the quantities set forth in Section 2.3 above by June 2003
in accordance with the Process. ASMC shall install, at its own expense,
equipment necessary for a pilot production line of Specialty Wafers by March  2004

 

4

 

and
thereafter shall use its best efforts to expand its production capacity for
Specialty Wafers.

 

4.3           Jazz
shall provide ASMC with Jazz Technology and other technical assistance to
enable ASMC to implement the Process to manufacture Wafers. Prior to the
commercial production of Wafers, Jazz shall verify that ASMC is utilizing the
Process in accordance with Jazz’s specifications to produce Wafers meeting the
Wafer Acceptance Criteria. Absent prior approval and subsequent verification by
Jazz, ASMC shall not deviate from the Process once the process at ASMC’s
Facility is verified.

 

4.4           ASMC
shall provide authorized personnel of Jazz with access to the ASMC Facility in
order to assist ASMC in implementing the Process and, thereafter, to
periodically verify that ASMC is manufacturing Wafers according to the Process,
that Wafers meet Wafer Acceptance Criteria and as otherwise necessary in Jazz’s
discretion to inspect the Process and/or ASMC’s Facility for compliance with
the terms of this Agreement. Jazz shall give reasonable notice of its intent to
inspect ASMC’s Facility.

 

4.5           Jazz
shall provide ASMC with advance written notice of changes in Process and Jazz
Technology relating thereto. With assistance from Jazz, ASMC shall change its process
to comply with any changes, verify the Process as changed and assist Jazz in
verifying the Process as changed.

 

4.6           Each
party shall use its commercially reasonable efforts to complete, and shall bear
its own expenses in connection with, the actions associated with enabling ASMC
to utilize the Process, verifying ASMC’s process, implementing changes to
Process and ensuring that Wafers meet Wafer Acceptance Criteria.

 

4.7           ASMC
shall not use Process or Jazz Technology at any location other than ASMC’s Facility
or for any purpose other than the manufacture of Wafers for Jazz.

 

4.8           Jazz
may at any time request ASMC to [...***...]
and ASMC shall [...***...]. The
manufacture of Wafers shall [...***...]
pending [...***...]. ASMC shall [...***...] within a reasonable time after
receipt of Jazz’s written request, subject to Jazz’s agreement to bear all
expenses incurred by ASMC in [...***...].
If Jazz [...***...] for more than
ninety (90) days, then ASMC may, at its option, cancel the order. If an order
for Wafers is cancelled after ASMC has [...***...],
Jazz shall pay to ASMC a cancellation fee based on [                               ].

 

ARTICLE 5

 

LICENSE,
INTELLECTUAL PROPERTY, ACKNOWLEDGEMENT

 

5.1           Jazz
hereby grants to ASMC a non-exclusive, non-transferable, royalty-free license
to use the Jazz Technology and Jazz Patent Rights that can be licensed by Jazz
(including the Intellectual Property Rights of Jazz therein) to manufacture
Wafers at ASMC’s Facility solely on behalf of Jazz. This license shall not be
exercised at any other facility or for the manufacture of Wafers for any other
entity. Upon termination of this Agreement, the license granted herein shall
terminate automatically.

 

5.2           ASMC
hereby agrees and acknowledges that Jazz is the sole owner of and shall retain
all ownership right, title, and interest in Jazz Technology and Jazz Patent
Rights.

 

5

 

5.3           ASMC
shall not contest or oppose or otherwise participate in or support any
challenge, including without limitation a challenge to ownership, validity,
scope, or enforceability of Jazz Technology or Jazz Patent Rights nor shall it
participate in or support in any way any reissue, reexamination or
reconsideration thereof, with the exception of the ability to challenge the
validity of United States patents as permitted under applicable law.

 

5.4           ASMC
shall sign or cause to be signed all documents necessary to perfect Jazz’s
ownership rights in Jazz Technology and Jazz Patent Rights, including all
Intellectual Property Rights therein, including without limitation all
necessary assignments and agreements with its employees, subcontractors or
agents.

 

5.5           ASMC
acknowledges that, except as set forth herein, Jazz reserves to itself all
rights in all fields, territories and technologies under Jazz Technology, Jazz
Patent Rights and the Intellectual Property Rights of Jazz therein. No licenses
are granted, no implied licenses are granted and no rights to grant sublicenses
are transferred to ASMC except those expressly stated herein.

 

ARTICLE 6

 

OWNERSHIP
OF NEWLY DEVELOPED TECHNOLOGY

 

6.1           During
the term of this Agreement and with the written consent of Jazz, the Process
may be improved, modified, refined or otherwise altered by ASMC or by the
parties working in conjunction with one another. Such improvements,
modifications, refinements or other alterations of the Process, whether before
or after the date hereof, shall hereinafter be referred to as “Newly Developed Technology”
and may, but need not necessarily, constitute one or more inventions, whether
patentable or not.

 

6.2           ASMC agrees to promptly disclose any Newly
Developed Technology to Jazz. All Newly Developed Technology and all
Intellectual Property Rights therein shall be owned by Jazz.

 

6.3           For
no longer than the remainder of the term of this Agreement, Jazz hereby grants
to ASMC a non-exclusive, non-transferable, royalty-free license in the Newly
Developed Technology (including newly developed technology developed pursuant
to any agreement with any of Jazz’s Affiliates) and all Intellectual Property
Rights therein to manufacture Wafers at ASMC’s Facility. This license shall not
be exercised at any other facility or for the manufacture of Wafers for any
other entity. Upon termination of this Agreement, the license grant in the
Newly Developed Technology and all Intellectual Property Rights therein shall
terminate automatically.

 

6.4           ASMC
shall sign or cause to be signed all documents necessary to perfect Jazz’s
ownership rights in the Newly Developed Technology and all Intellectual
Property Rights therein, in the Peoples Republic of China or elsewhere,
including without limitation all necessary assignments and agreements with its
employees, subcontractors and agents. ASMC
shall not make any registrations or filings with respect to any Newly Developed
Technology absent the prior written consent of Jazz.

 

6.5           It
is the intent of the parties that ownership of the Newly Developed Technology
and all Intellectual Property Rights therein shall permanently reside in Jazz.
However, should a court of competent jurisdiction find that ASMC owns any
interest in the Newly Developed Technology or 

 

6

 

the Intellectual Property
Rights therein, then ASMC hereby grants to Jazz a worldwide, perpetual,
exclusive, irrevocable, transferable, royalty-free license in the Newly
Developed Technology and all Intellectual Property Rights therein to make,
sell, offer to sell, import and otherwise distribute products that include or
incorporate, in whole or in part, the Newly Developed Technology and the
Intellectual Property Rights therein.

 

ARTICLE 7

 

PRICES
AND PAYMENT

 

7.1           Prices
for Jazz’s purchases of Wafers, are provided in Exhibit B. Orders or changes to Orders increasing the volume
of an existing order shall [...***...]. After the first anniversary of this Agreement, either
party may, from time to time, request the other party to renegotiate pricing
based on changing market conditions. Only price changes agreed to in writing by
both parties shall be effective.

 

7.2           All
prices are stated in U.S. Dollars. All
prices include all taxes, export duties, and other charges imposed by the
Peoples Republic of China and any local governments in the Peoples Republic of
China but are exclusive of all federal, state or local sales, use,
excise, or similar taxes imposed by the United States of America and any local
governments within the United States of America. Any such tax(es) shall be
separately itemized on ASMC’s invoice(s) and paid by Jazz, or, in lieu thereof,
Jazz shall furnish ASMC a properly executed tax exemption certificate prior to
shipment.

 

7.3           ASMC
shall invoice Jazz upon ASMC’s shipment of such Wafers to Jazz. Payments from
Jazz shall be due [...***...] days from the date of ASMC’s invoice or Jazz’s acceptance
of Wafers, whichever occurs later. [Any late payment shall be subject to late
payment charges of [...***...] percent ([...***...]%) per month]. Jazz shall pay the Invoices by wire transfer
or check, payable in U.S. Dollars. Jazz shall make any wire transfer payment
requested by ASMC to the account designated below or as otherwise directed by
ASMC:

 

Bank:

Location:

Account Name:

Account Number:

ABA/Routing:

 

ARTICLE 8

 

TERMS OF
DELIVERY, PACKING

 

8.1           The
terms of delivery are Ex Works, [                         ].

 

8.2           Wafers
shall be packed in accordance with Jazz’s packing instructions, which shall be
provided to ASMC by Jazz from time to time. Prices for Wafers include the cost
of packing. Each delivery of Wafers to Jazz must include a packing list that
contains at least the Jazz Order number, the quantity of Wafers shipped; the
Process Control Monitor (PCM) data of the shipped Wafers (either as hard copy
or location of web-based data); the date of shipment and the results of any
testing performed on the Wafers pursuant to the Wafer Acceptance Criteria.

 

7

 

8.3           Wafers
shall be shipped via [                         ].
ASMC shall obtain insurance on all Wafers in an amount sufficient to replace
any Wafers that are lost, stolen, or damaged during shipping. [...***...].

 

8.4           ASMC
shall be responsible for complying with all regulations and paying for all
duties relating to the export from the Peoples Republic of China and the import
into the United States of America of Wafers. Jazz shall have no obligation to
ASMC with respect to any regulation or duty relating to the export of or the
import of Wafers. ASMC shall be responsible for meeting all customs
requirements relating to Wafers both in the Peoples Republic of China and in
the United States of America. ASMC shall at all times take necessary steps to
expedite all shipments of Wafers through customs. Prices for Wafers include the
cost of customs compliance.

 

8.5           ASMC
shall be responsible for meeting all import and export controls relating to
Wafers both in the Peoples Republic of China and the United States of America. Jazz
shall provide reasonable assistance in meeting import and export control
requirements. Prices for Wafers include the cost of export control compliance.

 

8.6           Jazz
will promptly notify ASMC concerning any visible damage to Wafers or shipping
containers from shipment. Jazz agrees to reasonably assist ASMC in asserting any claim for such loss or
damage against ASMC’s carrier for the loss or damaged involved.

 

ARTICLE 9

 

DELIVERY
DATES

 

9.1           ASMC
will make best efforts to schedule the Delivery Dates consistent with ASMC’s
Lead-time. The Delivery Date shall be specified in Jazz’s order. ASMC shall
deliver Wafers according to such Delivery Dates.

 

9.2           Unless
otherwise notified by ASMC, all orders will be delivered complete. ASMC will
give Jazz prompt notice if it reasonably expects a delay in a Delivery Date or
if only a portion of the Wafers will be available for delivery to meet a
Delivery Date. For partial shipments, ASMC will deliver the available Wafers
unless directed by Jazz to reschedule a delivery.

 

9.3           If
ASMC cannot deliver the Wafers in accordance with the Delivery Dates, then ASMC
shall, as soon as ASMC becomes aware of the delay, inform Jazz thereof and ASMC
shall propose a new date for delivery (the “New Date”‘). [...***...].

 

ARTICLE
10

 

INSPECTIONS,
QUALITY REQUIREMENTS AND ACCEPTANCE

 

10.1         Wafers
furnished hereunder shall be inspected and/or tested by ASMC prior to shipment
for conformance with the Wafer Acceptance Criteria. No Wafers shall be shipped
by ASMC that fail to meet the Wafer Acceptance Criteria.

 

10.2         Jazz,
at its option, may inspect and/or test Wafers after receipt for conformance
with the Wafer Acceptance Criteria.

 

8

 

10.3         Jazz
shall accept or reject the Wafers in each shipment within [...***...] of its
receipt of Wafers.

 

ARTICLE
11

 

WAFER
WARRANTY AND RETURNS

 

11.1         ASMC
warrants that all Wafers furnished under this Agreement will be free from
defects in material and workmanship and in conformity with the Wafer Acceptance
Criteria. Prior to shipment to Jazz, in the event that ASMC discovers that any of the Wafers do not meet
any one of the Wafer Acceptance Criteria, ASMC shall as soon as reasonably
possible effect the rectification or replacement of the Wafers.
Following the delivery to Jazz, ASMC will, at Jazz’s option, credit or replace
any Wafers that, in Jazz’s discretion, do not conform to this warranty,
provided ASMC is notified of the nonconforming Wafers within thirty (30) days
after Jazz becomes aware of the nonconformity. ASMC shall credit any amounts
paid by Jazz for any Wafers that do not conform to this warranty against the
account of Jazz. All returns shall be shipped Ex Works, Newport Beach,
California, United States of America.

 

11.2         Shipping
and insurance charges for any Wafers returned by Jazz to ASMC shall be at ASMC’s
expense.

 

11.3         The
warranty provided herewith shall be void in the event (a) the Wafers fail,
malfunction or are damaged as a result of improper handling, storage,
processing, test, or packaging by Jazz or (b) the Wafers are altered or damaged
by Jazz.

 

ARTICLE
12

 

REPRESENTATIONS
AND WARRANTIES

 

12.1         ASMC
represents and warrants to Jazz as follows:

 

(a)           ASMC
has the full right, power and authority to enter into and perform its
obligations under this Agreement and this Agreement constitutes a legal, valid
and binding obligation of ASMC, enforceable against ASMC in accordance with its
terms.

 

(b)           The
execution, delivery and performance of this Agreement by ASMC will not result
in the breach of any terms of, or constitute a default under, or conflict with
any obligation of ASMC.

 

(c)           The
execution, delivery and performance of this Agreement by ASMC will not violate
any applicable law, rule, statute or regulation.

 

(d)           The
Process, and ASMC’s use of Process pursuant to the terms of this Agreement and
the manufacture, offer for sale, sale and importation into the United States of
America of Wafers do not infringe upon or violate any patent, copyright, trade
secret or other intellectual property or industrial rights of a third party.

 

(e)           ASMC
will retain sufficient free capacity at ASMC’s Facility to meet its obligations
to manufacture Wafers under this Agreement.

 

9

 

(f)            ASMC
will not make nor will ASMC allow any entity or employee or agent of ASMC to
make unauthorized use of Process or Jazz Technology in the Peoples Republic of
China or elsewhere.

 

12.2         Jazz
represents and warrants to ASMC as follows:

 

(a)           Jazz
has the full right, power and authority to enter into and perform its
obligations under this Agreement and this Agreement constitutes a legal, valid
and binding obligation of Jazz, enforceable against Jazz in accordance with its
terms.

 

(b)           The
execution, delivery and performance of this Agreement by Jazz will not result
in the breach of any terms of, or constitute a default under, or conflict with
any obligation of Jazz.

 

(c)           The
execution, delivery and performance of this Agreement by Jazz will not violate
any applicable law, rule, statute or regulation.

 

(d)           To
Jazz’s knowledge, it has the right to use and to license others to use the Jazz
Technology so as to manufacture Wafers or to have Wafers manufactured by others
on behalf of Jazz in accordance with the Process.

 

(e)           Jazz
has no knowledge of any claim by a third party that any Intellectual Property
Rights of a third party will be infringed by the use of the Jazz Technology in
the manufacture of Wafers pursuant to the Process or by the offer for sale,
sale and importation into the United States of America of Wafers manufactured
pursuant to the Process, which claim, if adversely determined, would have a
material adverse effect on the ability of Jazz to perform its obligations under
the Jazz Agreement and this Agreement.

 

(f)            To
Jazz’s knowledge, Jazz Technology is fit for the particular purpose of
manufacturing Wafers pursuant to the Process provided that ASMC adheres to the
manufacturing specifications provided by Jazz.

 

12.3         EXCEPT AS PROVIDED IN THIS AGREEMENT, THERE ARE NO
EXPRESS WARRANTIES, REPRESENTATIONS, UNDERTAKINGS, OR CONDITIONS (STATUTORY OR
OTHERWISE) BY EITHER PARTY, AND THERE ARE NO IMPLIED WARRANTIES,
REPRESENTATIONS, UNDERTAKINGS, OR CONDITIONS (STATUTORY OR OTHERWISE) BY EITHER
PARTY, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY, USAGE OF TRADE,
PAST PRACTICES, FITNESS FOR A PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT,
IN THIS AGREEMENT.

 

ARTICLE
13

 

INDEMNIFICATION,
LIMITATION OF LIABILITY

 

13.1         ASMC
shall defend, indemnify and hold harmless Jazz from any costs, loss, damage and
liability, except indirect and consequential damages, which may be incurred by
Jazz on account of (a) any breach by ASMC of this Agreement, including any
inaccuracy or breach of any representation or warranty of ASMC contained
herein, (b) the manufacture of the
Wafers, including, without 

 

10

 

limitation any claims for
injury, death or property damage related to any alleged defect in any Wafers or
the failure of any Wafers to conform to Wafer Acceptance Criteria, or (c) any
allegation that the process or some portion thereof employed by ASMC in the
manufacture of Wafers provided under this Agreement infringes any Intellectual
Property Rights of a third party, except for those portions of the process
employed by ASMC that constitute Jazz Technology and that must be practiced by
ASMC in order to comply with the Process as specified by Jazz. ASMC, at its own
expense, shall defend all suits or actions, provided ASMC is promptly notified
of such suits or actions, given all evidence in Jazz’s possession, and given
reasonable assistance in and sole control of defense thereof and all
negotiations for its settlement or compromise. ASMC shall have no liability to
Jazz for any settlement or compromise incurred or made by Jazz without ASMC’s
prior written consent.

 

13.2         Notwithstanding a breach of any of the
representations and warranties of either of the parties contained in this
Agreement, if either Jazz or ASMC incurs any Damages arising out of or related
to a claim that any portion of the Process employed by ASMC in the manufacture
of the Wafers infringes any United States patent or trade secret rights, then
the other party hereto shall contribute to the amount paid or payable by Jazz
or ASMC as a result of such Damages in such proportion as is determined in the
following sentence. The parties agree that (i) the proportion of such Damages
that ASMC shall bear shall be determined by dividing the ASMC Net Income by the
Aggregate Wafer Receipts and (ii) the proportion such Damages that Jazz shall
bear shall be determined by dividing the Jazz Net Income by the Aggregate Wafer
Receipts.

 

13.3         If
any suit or action alleging patent or trade secret infringement as set forth in
Section 13.2 is filed or threatened against either of the parties and Jazz
determines in its reasonable judgment to settle or compromise such suit or
action, including without limitation by entering into a license to continue the
manufacture, use, sale, offer to sell, importation or other distribution of
Wafers manufactured utilizing the alleging infringing process, then ASMC shall
contribute to the amount paid or payable by Jazz as a result of such settlement
in such proportion as is set forth in Section 13.2. Jazz shall have no
liability to ASMC for any settlement or compromise incurred or made by ASMC in
connection with any suit or action alleging such patent infringement without
Jazz’s prior written consent.

 

13.4         The aggregate liability of ASMC for contribution
pursuant to Sections 13.2 and 13.3 shall not exceed the aggregate gross revenue
of ASMC resulting from the sale of the Wafers to Jazz pursuant to this
Agreement, determined as of the date of the finding of infringement.

 

EACH OF
JAZZ AND ASMC ACKNOWLEDGES AND AGREES THAT, NOTWITHSTANDING A BREACH OF ANY OF
THE REPRESENTATIONS AND WARRANTIES OF THE PARTIES CONTAINED IN THIS AGREEMENT,
THE PROVISIONS CONTAINED IN SECTIONS 13.2 AND 13.3 REFLECT THE MUTUALLY AGREED
UPON ALLOCATION OF RISK WITH RESPECT TO CLAIMS OF PATENT AND/OR TRADE SECRET
INFRINGEMENT BETWEEN THE PARTIES AS SET FORTH IN SECTIONS 13.2 AND 13.3 AND
THAT EACH OF THE PARTIES WOULD NOT HAVE ENTERED INTO THIS AGREEMENT WITHOUT THE
CONTRIBUTION PROVIDED FOR HEREIN.

 

NOTWITHSTANDING
ANYTHING TO THE CONTRARY ELSEWHERE HEREIN AND EXCEPT AS SET FORTH IN SECTIONS
13.2 AND 13.3, NEITHER PARTY SHALL BE LIABLE (WHETHER BASED UPON CONTRACT,
TORT, STATUTORY OR EQUITABLE THEORIES) TO THE OTHER PARTY FOR ANY INCIDENTAL,
INDIRECT, SPECIAL, REMOTE OR CONSEQUENTIAL DAMAGES (INCLUDING BUT NOT LIMITED
TO LOSS OF REVENUE OR PROFITS) ARISING OUT OF THIS AGREEMENT, 

 

11

 

EVEN IF
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR IF SUCH DAMAGES ARE FORESEEABLE.

 

ARTICLE
14

 

CONFIDENTIALITY

 

14.1         In
connection with the transactions contemplated by this Agreement, ASMC will
obtain or have access to Jazz Confidential Information. Jazz Confidential
Information may be disclosed by ASMC only to those persons within ASMC who “need
to know” such information in order to perform their responsibilities under this
Agreement on behalf of ASMC. ASMC will, and will cause each of its employees
to: (a) keep in confidence all Jazz Confidential Information; (b) not use any
Jazz Confidential Information for any purpose other than the performance of
this Agreement; (c) not disclose any Jazz Confidential Information to any third
party without Jazz’s prior written consent; and (d) return all of Jazz
Confidential Information, regardless of form and including, without limitation,
all copies, analyses, derivations and compilations of Jazz Confidential
Information to Jazz within thirty (30) days after the termination of this
Agreement for any reason and, therefore, provide verification by an officer of
ASMC that all Confidential Information has been returned to Jazz.

 

14.2         As
used herein, the term “Jazz
Confidential Information” means information about the business,
assets or operations of Jazz, including but not limited to Jazz Technology,
deemed by Jazz to be of value and not commonly known to others within Jazz’s
industry. Jazz Confidential Information will not include information which ASMC
demonstrates with documentary evidence: (a) was known to the public at the time
of its disclosure, or becomes known to the public after the disclosure through
no action of the receiving party; (b) was in its possession prior to the time
of the disclosure (provided that ASMC did not receive such information from a
party that was subject to a confidentiality agreement with Jazz); or (c) was
developed by ASMC independent of the disclosure by Jazz.

 

14.3         ASMC
agrees that, because the breach or threatened breach of any of the terms of
this Article 14 by ASMC will result in immediate and irreparable injury to
Jazz, Jazz shall be entitled to an injunction restraining ASMC from any such
breach to the fullest extent allowed by law. Any such right of equitable relief
granted to Jazz shall not be deemed to preclude Jazz from seeking money damages
or any other remedy from Jazz and/or its agents in the event of such a breach.

 

14.4         The
terms and conditions of this Agreement are deemed to be confidential, and each
party will maintain such terms and conditions in strict confidence. The terms
of this Agreement may be disclosed only to those persons within ASMC’s and Jazz’s
organizations who “need to know” such information in order to perform their
work responsibilities on behalf of their employer.

 

12

 

ARTICLE 15

 

EFFECTIVE DATE, TERM,
TERMINATION

 

15.1         The
Term of this Agreement shall commence on the Effective Date and continue for a
period of five (5) years therefrom (the “Initial Term”), unless terminated earlier in
accordance with Section 15.2. Upon expiration of the Initial Term, this
Agreement will renew automatically for successive one-year periods unless
terminated by either party with [...***...]
written notice prior to the expiration of any such period.

 

15.2         In
addition to the provisions of Section 15.1, and as otherwise set forth in this
Agreement, this Agreement may be terminated by either party (a) after the
Initial Term with [...***...] written notice to the other party, (b) after the material
breach of this Agreement by the other party which is not cured within thirty
(30) days after the non-breaching party provides the breaching party with
written notice of such breach (other than a failure of Jazz to pay ASMC for
Wafers due to bona fide disputes concerning the acceptance, delivery or quality
of any Wafers produced hereunder), (c) upon the filing of a petition by the
other party seeking to take advantage of any laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or composition
for adjustment of debts after thirty (30) days written notice to the other
party or (d) after twelve (12) consecutive months in which Jazz does not place
an order for Wafers from ASMC.

 

15.3         Upon
termination of this Agreement for any reason:

 

(a)                                  Except
as set forth herein, ASMC shall have no right to make, offer for sale, sell,
export or import Wafers or any other product incorporating or manufactured in
accordance with Jazz Technology, Jazz Patent Rights or Process. ASMC shall have
no right to use, offer for sale, sell or import Wafers or Jazz Technology for
any purpose. Upon termination, ASMC shall discontinue use of Process and the
obligations of Section 14.1 shall apply.

 

(b)                                 ASMC
shall return Jazz Technology to Jazz pursuant to Section 14.1.

 

(c)                                  ASMC
shall immediately cease using and remove all Jazz Technology from the Process
at ASMC’s Facility and certify to Jazz in writing that Process is no longer in
use.

 

(d)                                 At
any time and from time to time during the two (2) year period following the
termination of this Agreement and upon ten (10) days prior written notice, ASMC
shall permit Jazz to inspect ASMC’s Facility to insure compliance with the
obligations of this Agreement.

 

15.4         The
expiration or termination of this Agreement shall not affect the delivery or
payment for Wafers that have been ordered and confirmed prior to such
termination.

 

15.5         The
obligations set forth in Sections 5.2, 5.3 and 5.5 and in Articles 6, 7, 11,
12, 13, 14, 15, 17, 18, 19, and 21 shall survive any cancellation or
termination of this Agreement as described in this Article 15.

 

13

 

ARTICLE 16

 

INSURANCE

 

16.1         ASMC
shall acquire and maintain at its sole cost and expense throughout the Term,
and for a period of five (5) years following the termination or expiration of
this Agreement, comprehensive general liability insurance, including product
liability, completed operations, advertising injury/personal injury,
contractual liability and patent, trademark, trade dress and copyright
liability, underwritten by an insurance company with a Best’s rating of at
least A-/VIII and licensed to do business in all states of the United States of
America. This insurance coverage shall be primary and non-contributory, contain
a waiver of subrogation against additional insureds and provide coverage of not
less than [...***...] for personal injury and property damage (on a per occurrence
basis) and a deductible not to exceed [...***...]. All insurance policy(ies) shall
name Jazz and their respective officers, employees and agents as additional
insured parties, shall contain an endorsement which requires that notice be
given to Jazz more than thirty (30) days prior to cancellation or expiration of
the policy(ies), and shall provide adequate protection for Jazz and their
respective officers, employees, and agents against any and all claims, demands,
causes of action or damages, including attorney’s fees, arising out of the
manufacture and use of the Wafers and ASMC obligations in this Agreement,
regardless of when such claims are made or when underlying injuries occur or
manifest themselves. Insurance policies shall not contain cross-claim,
cross-suit, or other such exclusion clauses that would preclude additional
insured parties from instituting causes of action against other insureds under
the policy or which would otherwise limit coverage of additional insureds.

 

16.2         Prior
to the date on which ASMC begins manufacturing the Wafers, certificates issued
by ASMC’s insurance company evidencing the insurance required herein shall be
provided to Jazz. Such certificates shall set forth, minimally, the amount of
insurance, the additional insured endorsement, the policy number, the date of
expiration, and an endorsement that Jazz shall receive thirty (30) days written
notice prior to termination, or reduction in coverage. The certificates shall
bear an inked or stamped signature. Facsimile or photocopied certificates are
not acceptable. Certificates shall be furnished to Jazz upon renewal of
insurance.

 

16.3         In
the event ASMC’s insurance providing the coverage required under this Section
is canceled and replacement insurance is not obtained prior to the effective
date of such cancellation or if ASMC fails to procure the insurance required
herein, Jazz shall have the right to procure such coverage and charge the
expenses incurred to ASMC.

 

ARTICLE 17

 

SETTLEMENT OF DISPUTES
AND APPLICABLE LAW

 

17.1         All
disputes between Jazz and ASMC, including without limitation any disputes
arising out of the execution, interpretation and performance of this Agreement
(including the validity, scope and enforceability of this arbitration
provision) or any provision of any instrument, document, agreement,
certification or other writing delivered hereunder or in connection herewith
shall be solely and finally settled by a board of arbitrators consisting of three
arbitrators conducted in accordance with the Rules of Conciliation and
Arbitration of the International Chamber of Commerce in effect at the time of
arbitration (the “ICC
Rules”). The board of arbitrators shall be chosen by each party
selecting one arbitrator and a third arbitrator being appointed in accordance 

 

14

 

with the ICC Rules. The
arbitration proceedings shall be held in Orange County, California, United
States of America. Any arbitration proceeding, including all documents and
communications in connection therewith, shall be in the English language. Any
translation of such documents or communications shall be for convenience
purposes only and the parties agree that the English language version of any
such document, communication or proceeding shall govern and control for all
purposes. To the extent that the ICC Rules conflict with any provision set
forth in this Section 17.1, the provisions of this section 17.1 shall prevail. If any party determines to submit a dispute
for arbitration pursuant to this Section 17.1, such party shall furnish the
other party to the dispute with a dated, written statement indicating (i) such
party’s intent to commence arbitration proceedings, (ii) the nature, with reasonable
detail, of the dispute and (iii) the remedy or remedies such party will seek. The
awards and findings of the arbitrators shall be conclusive and binding upon the
parties (or their successors) and judgment upon such award may be entered in
any court of competent jurisdiction. Any party against whom an arbitrator’s
award shall be issued shall not, in any manner, oppose or defend against any
suit to confirm such award, or any enforcement proceedings brought against such
party, whether within or outside the United States of America or the Peoples
Republic of China, with respect to any judgment entered upon the award, and
such party hereby consents to the entry of a judgment against such party, in
the full amount thereof, or other relief granted therein, in any jurisdiction
in which enforcement is sought. The fees of the arbitrators shall be borne by
the party against whom the arbitration award is issued. All other expenses of
the arbitration shall be shared equally by the parties.

 

17.2         All deadlines in this Article may be
extended by mutual agreement.

 

17.3         This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of California, United States of America, without regard for
its choice and or conflict of laws provisions and without regard to the United
Nations Convention on Contracts for the International Sale of Goods and is
subject to all other applicable governmental laws and regulations, including
but not limited to applicable regulations and requirements of any United States
regulatory agency concerning the import of Wafers into the United States of
America and the export of Jazz Technology from the United States of America. This Agreement has been made in the English
language and all documents and communications (including any arbitration or
mediation proceedings and any documents or communications delivered in
connection therewith) between the parties hereto shall be in the English
language. Any translations of this Agreement or any documents relating to this
Agreement shall be for convenience purposes only and the parties hereto agree
that the English language version of this Agreement and the documents relating
hereto shall govern and control for all purposes.

 

ARTICLE
18

 

FORCE
MAJEURE

 

18.1         Neither
Jazz nor ASMC shall be liable in damages for failure to deliver or for delay in
delivery or performance arising out of causes beyond its reasonable control
including, but not limited to, acts of God or of the public enemy, fires,
floods, earthquakes, outages of electrical power, epidemics, quarantine
restrictions, strikes, labor disputes, or freight embargoes (a “Force Majeure Event”).
The party suffering a Force Majeure Event shall promptly notify the other party
of such Force Majeure Event. A party shall be excused from its performance to
the extent caused by such Force 

 

15

 

Majeure Event; provided
that such party (i) gives notice of the Force Majeure Event to the other party
promptly after its occurrence, (ii) uses its reasonable efforts (including
executing any disaster plan) to overcome, mitigate and remove the cause of the
event preventing or delaying performance, (iii) continues the performance of
all its obligations under this Agreement that are not prevented or delayed and
(iv) upon cessation of the Force Majeure Event, promptly performs or completes
performance of the obligations which were prevented or delayed. In the event
ASMC’s inability to perform continues for sixty (60) days or more from
notification to Jazz of the Force Majeure Event, Jazz shall have the right to
terminate its obligations to ASMC with no further liability under this
Agreement upon prompt written notice.

 

ARTICLE
19

 

ACCOUNTING
AND RECORDS

 

19.1         ASMC
will keep complete, true and accurate books of account, records of production,
engineering documents, etc. for the purpose of showing its compliance with the
terms of this Agreement. Such books, records and documents will be kept at ASMC’s
principal place of business for at least five (5) years after the end of the
quarter to which they pertain, and will be open at all reasonable times for
inspection by a representative of Jazz. The representative will be obliged to
treat as confidential all relevant matters. Such inspections shall be at the
expense of Jazz, unless a variation or error exceeding U.S. $1,000 is
discovered in the course of any such inspection, whereupon ASMC shall pay all
costs relating thereto. ASMC will promptly pay to Jazz the full amount of any
underpayment, together with interest thereon at the maximum rate of interest
allowed by law.

 

ARTICLE 20

 

COMPLIANCE WITH
LAWS

 

20.1         In exercising its rights and meeting
its obligations under this license, ASMC shall fully comply with the
requirements of any and all applicable laws, regulations, rules and orders of
any domestic or foreign governmental body having jurisdiction over the exercise
of rights under this license. ASMC further agrees to indemnify and hold Jazz
harmless from and against any costs, expenses, attorney’s fees, citation, fine,
penalty and liability of any kind which might be imposed by reason of any
asserted or established violation of any such laws, order, rules or
regulations.

 

ARTICLE 21

 

MISCELLANEOUS

 

21.1         Each party hereto is contracting
independently with the other and there is no agency, employment or other
relationship except as may be expressly set forth herein. Neither party is
authorized nor has the power to obligate or bind the other party by contract,
agreement, warranty, representation or otherwise in any matter whatsoever.

 

21.2         The headings used in this Agreement
are inserted for convenience only and shall not affect the interpretation of
the respective provisions of this Agreement.

 

16

 

21.3         ASMC
shall not assign or subcontract its rights and obligations under this Agreement
without the prior written consent of Jazz.

 

21.4         The following persons shall act as
the representatives of the parties regarding notices, performance, extension,
dispute resolution, termination and changes in respect of this Agreement:

 

If to ASMC:

 

Mr. Tony Liu

President

Advanced
Semiconductor Manufacturing Corporation of Shanghai

385 Hong Cao Rd.

Shanghai, China

 

If to Jazz:

 

Mr. Theodore Zhu

Jazz/Semiconductor

4321 Jamboree Road

Newport Beach, CA
92660

 

with copies to:

 

Carolyn Follis,
Esq.

Jazz Semiconductor

4321 Jamboree Road

Newport Beach, CA 92660

 

and

 

Mark Kelly, Esq.

Alston & Bird

Bank of America Plaza

101 South Tryon Street, Suite 4000

Charlotte, NC 28280-4000

 

21.5         No failure or delay of either party
in exercising its rights hereunder (including but not limited to the right to
require performance of any provision of this Agreement) shall be deemed to be a
waiver of such rights unless expressly made in writing by the party waiving its
rights.

 

21.6         In the event that any provision of
this Agreement shall be held invalid or unenforceable as contrary to any law,
statute or regulation in that regard, the invalidity or unenforceability of
such provision shall in no way affect the validity of any other provision of
this Agreement, and each and every provision shall be severable from each and
every other.

 

21.7         Neither party shall make a press
release, advertisement, public statement or disclosure to any third party
concerning the existence of this Agreement or its contents without the express
written consent of the other party not to be unreasonably withheld or delayed.

 

17

 

21.8         Neither
party will be deemed the drafter of this Agreement (or its Exhibits), which
Agreement will be deemed to have been jointly prepared by the parties. If this
Agreement is ever construed, whether by a court or by an arbitrator, such court
or arbitrator will not construe this Agreement or any provision hereof against
any party as drafter.

 

21.9         This Agreement embodies the entire
agreement between the parties hereto and supersedes all other prior agreements
between the parties in connection with the sale of goods described herein. This
Agreement cannot be modified or supplemented except in writing and signed by
both parties. Neither party shall be bound by or liable to the other for any
representation, promise, or inducement, whether prior to or concurrent with,
made by any agent or person in the other’s employ, not embodied in this
Agreement.

 

21.10       Time is of the essence of this
Agreement, as are the provisions relating to ownership, warranties,
confidential information and payments.

 

21.11       This Agreement may be executed in
counterparts, which together shall constitute one and the same Agreement.

 

21.12       Each party to this Agreement, upon
the request of the other party, agrees to perform all further acts and execute,
acknowledge, and deliver any documents that may be reasonably necessary,
appropriate, or desirable to carry out the provisions of this Agreement.

 

21.13       Upon
the request of ASMC or Jazz, this Agreement shall be registered with the
appropriate governmental authorities in the People’s Republic of China.

 

[SIGNATURES
FOLLOW ON NEXT PAGE]

 

18

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their duly authorized representatives.

 

 

	
   

  	
  ADVANCE
  SEMICONDUCTOR MANUFACTURING CORP. OF SHANGHAI

  
	
   

  	
   

  
	
  [CORPORATE
  SEAL]

  	
   

  
	
   

  	
  By:

  	
  \s\ SUN ZHEN

  
	
   

  	
  Name:  Sun Zhen

  
	
   

  	
  Title:    Sales & Marketing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NEWPORT
  FAB, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  \s\ PAUL KEMPF

  
	
   

  	
  Name:  Paul Kempf

  
	
   

  	
  Title:    CTO

  

 

19

 

EXHIBIT
A

 

Jazz
Technology

 

	
  Process

  Name

  	
   

  	
  Description

  
	
  C05LA

  	
   

  	
  0.5 um Analog

  
	
  CL35Q

  	
   

  	
  0.35um Digital

  
	
  CA25QW

  	
   

  	
  0.25um Analog

  
	
  CR25QW3

  	
   

  	
  0.25um RF

  
	
  CA25QL

  	
   

  	
  0.25um [...***...]

  
	
  BC35M

  	
   

  	
  0.35um

  
	
  BC35Q

  	
   

  	
  0.35um

  
	
  SBC35M

  	
   

  	
  SiGe60-

  
	
  SBC35Q

  	
   

  	
  SiGe60-

  
	
  SBC35QT

  	
   

  	
  SiGe60-QT [...***...]

  
	
  SBC18M

  	
   

  	
  SiGe90-

  
	
  SBC18QT

  	
   

  	
  SiGe90-QTD [...***...]

  
	
  SBC18

  	
   

  	
  SiGe90-P (0.18um

  

 

20

 

EXHIBIT
B

 

Wafers
and Wafer Pricing

 

	
  Wafers to be Manufactured by ASMC

  	
   

  	
  Price Not
  to Exceed

  
	
  C05LA 0.5um Analog CMOS;

  	
   

  	
   

  	
  $

  	
  [...***...] USD

  	
   

  
	
  CL35Q 0.35um Digital CMOS;

  	
   

  	
   

  	
  $

  	
  [...***...] USD

  	
   

  
	
  CL25Q 0.25um Digital CMOS;

  	
   

  	
   

  	
  $

  	
  [...***...] USD

  	
   

  
	
  CA25QW3 0.25um Analog CMOS;

  	
   

  	
   

  	
  $

  	
  [...***...] USD

  	
   

  
	
  CR25QW34 0.25um RF CMOS;

  	
   

  	
   

  	
  $

  	
  [...***...] USD

  	
   

  
	
  CA25QLD 0.25 um [...***...]

  	
   

  	
   

  	
  $

  	
  [...***...] USD

  	
   

  
	
  BC35M 0.35 um BiCMOS

  	
   

  	
   

  	
  $

  	
  [...***...] USD

  	
   

  
	
  BC35Q 0.35 um BiCMOS

  	
   

  	
   

  	
  $

  	
  [...***...] USD

  	
   

  
	
  Specialty60-M

  	
   

  	
   

  	
  $

  	
  [...***...] USD

  	
   

  
	
  Specialty60-Q

  	
   

  	
   

  	
  $

  	
  [...***...] USD

  	
   

  
	
  Specialty60-QT [...***...]

  	
   

  	
   

  	
  $

  	
  [...***...] USD

  	
   

  
	
  Specialty90-M

  	
   

  	
   

  	
  $

  	
  [...***...] USD

  	
   

  
	
  Specialty90-QTD [...***...]

  	
   

  	
   

  	
  $

  	
  [...***...] USD

  	
   

  
	
  Specialty90-P

  	
   

  	
   

  	
  $

  	
  [...***...] USD

  	
   

  

 

The
prices set forth above for Wafers shall decrease [...***...] on April 1, 2004 and
ASMC shall make commercially reasonable efforts to decrease the prices set
forth above by [...***...] on each anniversary thereafter.

 

21

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}]]