Document:

Exhibit
10.2

SECOND
AMENDMENT TO

WJ COMMUNICATIONS, INC.

2001 EMPLOYEE STOCK PURCHASE PLAN

This Second
Amendment to the WJ Communications, Inc. (the “Company”) 2001 Employee Stock
Purchase Plan, (the “Stock Purchase Plan”), is made pursuant to Section X of
the Stock Purchase Plan.

Recitals:

WHEREAS,
the 2001 Employee Stock Purchase Plan was originally adopted by the Company and
approved by the stockholders in 2001;

WHEREAS,
the 2001 Employee Stock Purchase Plan was first amended by the board of
directors on November 1, 2001 to clarify certain terms of the Stock Purchase
Plan to reflect the administrators interpretation of such terms and the prior
administration of the Stock Purchase Plan; to revise the offering period; to
clarify the timing of payroll deductions; to define the Purchase Date as the
last day of each offering period and to add provisions to delegate to the
Company’s executive committee the authority to amend the Stock Purchase Plan,
which modifications were not deemed necessary to submit to stockholders for
approval; and

WHEREAS,
in 2006 in connection with the Company’s annual meeting, the Board of Directors
determined a second amendment to the Stock Purchase Plan to increase the shares
available under the Stock Purchase Plan from 1,500,000 to 2,250,000;

WHEREAS,
the Second Amendment was approved by the Company stockholders at the Company’s
annual meeting on July 20, 2006.

NOW
THEREFORE:

The section III,
titled “STOCK SUBJECT TO PLAN” of the Stock Purchase Plan is hereby amended to
delete “1,500,000” and insert “2,250,000” in its place to reflect an increase
in the shares reserved for use under the Stock Purchase Plan.

All other terms
and conditions of the Stock Purchase Plan, as amended remain in full force and
effect.

The Second
Amendment to the Stock Purchase Plan was approved by the Board of Directors on
June 1, 2006 and submitted to, and approved by, the Company’s stockholders in
connection with the Company’s July 20, 2006 annual meeting.Exhibit 10.1

“CONFIDENTIAL
TREATMENT OF CERTAIN INFORMATION CONTAINED IN THIS DOCUMENT HAS BEEN REQUESTED
BY WJ COMMUNICATIONS, INC. THE CONFIDENTIAL PORTIONS
OF THIS DOCUMENT INDICATED WITH ASTERISKS (***) HAVE BEEN OMITTED AND
HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.”

Wafer Manufacturing and Supply Agreement 

This
Wafer Manufacturing and Supply Agreement (“Agreement”) is made and entered into
this        day of December      ,
2005, by and between Global Communication
Semiconductors, Inc., a California corporation having its principal
place of business at 23155 Kashiwa Court Torrance, California 90505
(hereinafter “GCS”) and WJ Communications, Inc., a Delaware
corporation having its principal place of business at 401 River Oaks Parkway
San Jose, CA 95134 (hereinafter  “WJ”). (WJ
and GCS shall also sometimes be referred to herein together as the “Parties” or individually as a “Party”).

WITNESSETH:

WHEREAS, GCS is a semiconductor foundry that manufactures semiconductor products
in volume;

WHEREAS, WJ desires to pay GCS to manufacture and supply
WJ with wafers utilizing WJ’s
wafer production processes;

WHEREAS, WJ has developed
certain proprietary process technology associated with wafer production
products, and desires to provide such technology to GCS solely for the purpose
of manufacturing wafers for WJ;

WHEREAS, GCS is willing to manufacture and supply
wafers to WJ utilizing WJ’s
wafer production processes; and

WHEREAS, the Parties desire to establish the terms and
conditions for the manufacture of wafers by GCS and the purchase of wafers by WJ.

NOW, THEREFORE, in consideration of the mutual promises and agreements of the Parties
contained herein, and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. DEFINITIONS

1.1
“Confidential
Information means any and all information (in any and every form
and media) not generally known in the relevant trade or industry, which was
obtained from any Party in connection with this Agreement or the respective
rights and obligations of the Parties hereunder, including, without limitation,
(a) information relating to trade secrets of such Party, (b) information
relating to existing or contemplated products, services, technology, ideas,
designs, processes, formulae, research and development (in any and all stages)
of such Party, (c) information relating to the Wafers or any of the patents,
trade secrets, know-how, and other technology and information relating to the Wafers
and their design, and (d) information relating to forecasts, projections,
sales, business plans, methods of doing business, sales or marketing methods,
current and contemplated markets, current and potential customers, strategic
partners, acquirers or investors, customer lists, customer usages and/or
requirements and supplier information of such Party.

1.2 “Copyrights” means: (a)  any rights in original works of authorship
fixed in any tangible medium of expression as set forth in the United States
Copyright Act, 17 U.S.C. § 101 et.
seq.; (b) 
all registrations and applications to register the foregoing
anywhere in the world; (c)  all foreign
counterparts and analogous rights anywhere in the world; and (d)  all rights in and to any of the foregoing.

1.3           “Die” means an individual integrated circuit or
components which when completed create an integrated circuit.

1.4           “Embedded Third Party Technology”
means third Party software or hardware embedded as part of the WJ Technology and/or in Improvements thereto.

1.5 “Facilities” means GCS’s physical fabrication
facilities located at 23155 Kashiwa Court, Torrance, California 90505.

1.6 “GCS Services” has
the meaning set forth in Section  2.1.

1.7 “GCS Technology” has
the meaning set forth in Section 11.2.

1.8 “Gross Die per Wafer” (“GDW”)
means the total quantity of Die candidates on each Wafer, whether or not the
Die is operational when the Wafer has completed the manufacturing process.

 

1.9 “Improvements” means with respect to any
Technology, all discoveries, innovations, improvements, enhancements,
derivative works, or modifications of or to such Technology.

1.10 “Intellectual Property Rights” means any and
all: (a)  Copyrights, mask work rights,
trademarks, and Patents; (b)  rights
relating to innovations, know-how, trade secrets, and confidential, technical,
and non-technical information; (c)  moral
rights, author’s rights, and rights of publicity; and (d)  other industrial, proprietary and
intellectual property related rights anywhere in the world, and all applications
for, renewals and extensions of the foregoing now or hereafter filed,
regardless of whether or not such rights have been registered with the
appropriate authorities in such jurisdictions in accordance with the relevant
legislation.

1.11 “Jointly Developed Technology”
means Technology that is written, created, or otherwise made or acquired not
solely by one or more employees of one Party but is created jointly by
employees or contractors of WJ together with
employees or contractors of GCS during and in the course of the transactions
contemplated by this Agreement provided that: (a)  with respect to copyrightable material, each
contributing Party prepared the work with the intention that their
contributions be merged into inseparable or interdependent parts of a unitary
whole; (b)  with respect to inventions
subject to patent protection, each contributing Party made some original
contribution to the inventive thought and to the final solution; and (c)  with respect to matter subject to trade
secret protection, each contributing Party made substantial contributions to
such matter.

1.12 “Knowledge” shall mean the actual knowledge of
the officers, directors, and director-level employees of GSC.

1.13 “Lot” means a group of Wafers which are
processed simultaneously. Each Lot will be assigned a specific alpha/numeric
identification that distinguishes it from any other group that contains the
same type of Die so that each Lot can be separately identified.

1.14 “Minimum Yield” means, with respect to a
particular Wafer, the minimum acceptable Yield for such Wafer as per the Specifications.

1.15 “Net Die per Wafer” (“NDW”) means the net number of functional Die
on each Wafer after the Wafer has completed the wafer probe testing.

1.16 “Patents” means: (a)  patents and patent applications, worldwide,
including all divisions, continuations, continuing prosecution applications,
continuations in part, reissues, renewals, reexaminations, and extensions
thereof and any counterparts worldwide claiming priority therefrom;
utility models, design patents, patents of importation/confirmation, and
certificates of invention and like statutory rights; and (b) all rights in and
to any of the foregoing.

1.17 “Process” the proprietary wafer manufacturing
processes of WJ to be provided by WJ
to GCS for implementation by GCS in its Facilities to manufacture the Wafers
exclusively for WJ.

1.18 “Process Qualification”
shall have the meaning set forth in Section 4.1.

1.19
“Project Manager” has
the meaning set forth in Section  3.2.

1.20 “Qualify” or “Qualification” means that the
Process has been approved by WJ for volume
manufacturing of the Wafers at the Facilities because the Wafers have been
produced pursuant to the Process with predictable yields acceptable to WJ, in each case in excess greater than the Minimum Yield,
and have passed all tests required by WJ.

1.21 “Purchase Order” has
the meaning set forth in Section  9.1.

1.22 “Quality and Reliability Standards” has
the meaning set forth in Section 4.1.

1.23 “Scrap” means any Wafer or Die, in any stage
of completion, without regard to its ability to function,
that is not in conformance with the requirements of the Specification
for Wafers to be sold to WJ.

1.24 “Specifications” mean the technical
specifications provided by WJ for the Process and the
manufacture of the Wafers by GCS including the specifications described in
Appendix A.

1.25 “Target Yield” means, with respect to a
particular Wafer, the Target Yield for such Wafer as set forth in Appendix B.
Notwithstanding the foregoing, the Target Yield is subject to post
qualification confirmation and adjustment pursuant to Section  4.4 and Appendix B.

 

1.26 “Technical Information” means the technical
information and materials provided or to be provided by WJ
to GCS.

1.27 “Technology” means any and all technical
information, specifications, drawings, records, documentation, works of
authorship or other creative works, ideas, algorithms, models, databases,
ciphers/keys, systems architecture, network protocols, research, development,
and manufacturing information, software (including object code and source
code), application programming interfaces (APIs), innovations, mask works,
logic designs, circuit designs, technical data, processes and methods.

1.28 “Term” has the
meaning set forth in Section 16.1.

1.29 “Verification Test Program”
has the meaning set forth in Section 5.2(b).

1.30 “Wafers” means the GaAs
(gallium arsenide) Wafers described in Appendix B which will be manufactured by
GCS for WJ using the Process.

1.31 “WJ
Technology” has the meaning set forth in Section 11.1.

1.31 “Yield” means the
percentage represented by Net Die per Wafer (NDW)
divided by Gross Die per Wafer (GDW).

2              GCS SERVICES AND FACILITIES

2.1   GCS Services. GCS
shall implement the Process in accordance with the Specifications provided by WJ for the manufacture of the Wafers in accordance with the
Process responsibilities set forth in Appendix D, manufacture the Wafers at its
Facilities utilizing the Process provided by WJ, and
sell and deliver to WJ the Wafers, all in accordance
with the terms and conditions set forth in this Agreement. GCS shall not
outsource or delegate to any third party the manufacture of the Wafers.

2.2   Facilities. All
manufacturing of Wafers shall take place at the Facilities. If GCS desires to
relocate the manufacturing of the Wafers at another facility, it shall provide WJ with at least  *************************** days prior
notice of its intent to relocate to a proposed new facility. If WJ notifies GCS within *** **** days of its objection to the
new location, GCS shall not transfer the manufacture of the Wafers to the new
facility and shall continue to manufacture the Wafers at the Facilities.
Approval to relocate shall not be unreasonably withheld.

3              PROCESS IMPLEMENTATION AND ASSISTANCE

3.1 Process
Implementation.

(a) Process – W J desires to
have GCS manufacture the Wafers at the Facilities using the Process which meet
the Specifications. The Parties agree to work together to implement the Process
in accordance with the Process responsibilities of each Party described in
Appendix D, as it may be amended by mutual consent.  The Process shall be implemented at the
Facilities in accordance with the time schedule set forth in Appendix D and GCS
shall use its commercially reasonable efforts to successfully establish the
Process within the time schedule set forth in Appendix D.  GCS acknowledges that the implementation of
the Process will require significant capital expenditures and resources on its
part and GCS covenants that it will make the required capital expenditures for
implementing the Process as described in Appendix D and that it currently has,
and will continue to allocate during the Term of this Agreement, the financial
and other resources necessary to carry out its obligations under this Agreement .

(b)
Process Delays – Each Party shall
promptly provide the other with notice as soon as possible after it has reason
to believe it will be unable to timely perform any of its obligations under
this Agreement (including without limitation delivering any deliverable)
together with the reason for such delay and the date on which such Party
reasonably expects to perform such obligation. The Party that is not the cause
of the delay shall not be precluded from exercising its termination rights
hereunder. The Parties agree that this Section shall not be construed to
relieve either Party of its obligation to continue in the performance of its
responsibilities under this Agreement notwithstanding any delay. In the event
of a delay or delinquency by a Party of more than ninety (90) days in the
implementation of the Process, the other Party shall have the immediate right
to terminate this Agreement.

3.2 Transfer Project
Managers.

(a) Project Manager
Designation – Each Party shall identify a principal contact to whom
all communications between the Parties with respect to the applicable project
shall be directed (each a “Project
Manager”) and shall provide the

 

other Party the
addresses, e-mail, telephone numbers and fax numbers for such Project Managers.
Each Party may replace or substitute its designated Project Manager from time
to time upon written notice to the other Party. Each Party shall also provide
the other Party from time to time with the names and telephone numbers of
additional specific contact persons to communicate specific information or
manage specific project matters when such direct contact is preferable.

(b)
Project Manager Responsibilities —
The Project Managers shall: (i)  serve as the primary point of contact between
the Parties; (ii)  coordinate the Parties’
undertakings and activities in connection with this Agreement, including,
without limitation, defining and tracking the implementation of the Process and
facilitating reviews; (iii)  address
technical and resource allocation issues arising, and (iv) have first tier
responsibility for resolving disputes arising under this Agreement, subject to
any corporate governance requirements of the Party.

3.3 Wafer Technical
Information.

(a)
WJ will provide the Technical Information and
assistance relating to the Wafers to GCS in accordance with the timeline set
forth in Appendix D.

(b)
GCS will use the Technical Information solely for performing GCS Services
relating to the manufacture of the Wafers for WJ.
After any Process Qualification, GSC will not make
any changes or modifications to the qualified process without WJ’s prior written approval.

1              WJ Technology Improvements by GCS. GCS shall
provide WJ with prompt written notice with respect to
any Technology or Intellectual Property Rights conceived, developed or reduced
by or on behalf of GCS or any other Person that constitutes an Improvement to
any WJ Technology. 
Thereafter, at WJ’s request, GCS shall make
available to WJ appropriate personnel with suitable
knowledge and understanding of such Improvement to describe and explain such
Improvement to designated WJ personnel and to
otherwise provide such WJ personnel with sufficient
information and materials satisfactory to WJ.

2              PRE-PRODUCTION – QUALIFICATION AND ACCEPTANCE

4.1 Qualification of Process.
GCS shall demonstrate and verify that the applicable Process as implemented at
the Facilities for all Wafers, meets the Specifications and the parametric,
electrical, process flow, quality, and reliability specifications, as well as
other standards or requirements that may be necessary for manufacturing the
Wafers as WJ reasonably deems necessary (the “Quality and Reliability Standards”
as specified in Appendix E). Thereafter, GCS will execute Qualification plan
for such Wafers (the “Process
Qualification”).

4.2 Qualification Sample
Lots. GCS will produce and transfer to WJ the
number of Process Qualification sample Lots of the Wafers requested by WJ. WJ will evaluate each Lot of
Process Qualification samples and will issue a notice of approval or disapproval
of the Process Qualification Lots within thirty (30)  days of WJ’s
receipt of the Wafers. If WJ rejects Qualification of
the sample Lot(s), GCS shall cooperate in developing a corrective action plan
reasonably acceptable to WJ. Based on such plan, GCS
will manufacture additional Lot(s) of sample Process Qualification Wafers for WJ’s evaluation. WJ will purchase
all Process Qualification Wafers that conform to the Specifications. GCS will
not ship production quantities of Lots to WJ until
GCS receives written notice of qualification of the Wafers from WJ. GCS shall ship production quantities of particular Wafers
per WJ’s orders after the applicable Specifications
are achieved.

4.3  Pre-Production Termination. At any time prior to successful completion
of Process Qualification, WJ may terminate
fabrication of any Qualification Process Wafers by giving GCS written notice,
which shall specify whether such Wafers should be delivered to WJ or scrapped. Upon receipt of such notice, GCS shall stop
related fabrication at the conclusion of the manufacturing step in process. In
such case, (i) WJ will pay
for any partially completed Wafers, pro-rated based on percentage completed and
(ii) GCS shall pay all other expenses and costs related to the termination of
fabrication of any Qualification Process Wafers.

4.4
 Baseline Establishment. After notice of Qualification has been sent
by WJ to GCS:

(a)           The Process baseline process may be further refined by mutual
agreement. GCS will obtain written approval of WJ
before making any modifications to the baseline manufacturing process,
materials, or tooling. Approval shall not be unreasonably withheld. 

(b)           The Parties shall confirm the Target Yield and Minimum Yield for the
Wafers as is acceptable to WJ.

(c)           Compliance with the Target Yield standards is a performance obligation
of GCS under this

 

Agreement. Without limiting the foregoing, WJ shall have the right to reject any individual Wafer or
its entire Lot which do not meet the Minimum Yield pursuant to the
Specifications and Section 5.8.

5. PRODUCTION QUALITY, RELIABILITY AND
CONTROL

5.1 Quality
Culture. The GCS systems shall be not only ISO qualified to WJ’s reasonable satisfaction but shall also promote and
drive a quality culture within the factory. GCS’s quality systems shall include
Statistical Process Control (SPC) with statistically
valid limits. GCS will establish a culture which responds to established
limits, and will stop the manufacturing line if these limits are found out of
tolerance.

5.2 Specification
Testing and Compliance. GCS will produce Wafers for WJ
that meet the Specifications. In that regard:

(a) GCS shall conduct in line process monitoring
according to testing procedures and use test equipment reasonably acceptable to
WJ. GCS must have sufficient testing capability to
handle testing requirements, including the provision of engineering analysis of
test Wafers sufficient to (i)  identify potential product issues
(i.e. any failure to fully meet Specifications or achieve Minimum Yields) at
the earliest possible stage and (ii) 
make necessary adjustments to the Wafers.

(b) After Wafer completion, GCS shall conduct testing
in accordance with the Specifications (“Verification Test Program”), and
inspect and confirm that the Wafers conform to the applicable Specifications.

GCS shall neither ship nor bill WJ
for any Wafer that to the Knowledge of GCS fails to meet the Minimum Yield and
Quality and Reliability Standards unless specifically instructed in writing by WJ to do so. GCS shall notify WJ
of any Wafer that is below the Minimum Yield, and WJ
may, at its discretion, agree to accept delivery of such Wafer at a mutually
agreed upon price. GCS must notify WJ in advance of
shipment of those Wafers that do not comply with the foregoing criteria.

(c) If GCS or WJ detects any
wafer fabrication related defects in any Wafers, GCS shall provide WJ with a corrective action plan to correct the failure
mechanisms and/or defects. WJ may review GCS’s
quality measurement and control systems at any time.

(d) From time to time WJ may
desire to update, revise or modify the Specifications for the Wafers. GCS will
use reasonable efforts to implement all revisions, updates, or modifications as
soon as practicable. If such changes impact Wafer Yield, the Parties shall
re-set Target Yields using the same procedure as initially used by WJ. GCS shall advise WJ of any
cost and schedule impact, and the date and lot number of
implementation of the revision, update or modification, all of which
shall be subject to WJ’s written approval. Any requalification required as a result of the revisions,
updates, or modifications will be the responsibility of WJ.

(e) The results from GCS testing processes shall be
accessible and available to WJ for review and
download to WJ records at the conclusion of each test
lot.

5.3 Failure and Defect
Reporting. The Parties shall notify each other of any detected failure
mechanisms and/or defects which are present, or which they suspect might be
present, in completed Wafers. GCS shall use reasonable efforts to correct such
failure mechanisms and/or defects as promptly as possible within a time frame
acceptable to WJ and reasonable to GCS.

5.4 Reliability
Records and Data.

Without limitation of any requirements in the Quality and Reliability
Standards, GCS agrees to provide the following information relating to the
quality or reliability of the Wafers and the quality systems used to comply
with these standards and specifications.

(a) GCS will maintain Lot history records for a period
of five (5)  years.
WJ shall have access to all Lot history records
concerning all Wafers at any time.

(b) GCS agrees to provide reliability data which
demonstrates the ability of the Process used for all Wafers to meet WJ’s Quality and Reliability Standards as set forth in
Appendix E. Any exceptions to these criteria will be reviewed on a
product-by-product basis. WJ shall have the right to
use reliability data concerning Wafers for the purposes of preparing sales and
promotional information concerning Wafers. GCS’s reliability testing methods
and conditions shall be subject to the review of WJ,
and shall be changed upon WJ’s request, and agreed to
by GCS, such agreement not to be unreasonably withheld.

(c) WJ may conduct an
on-site inspection and audit of the process and manufacturing records relevant
to the Wafers during normal business hours upon twenty four (24) hours advance
notice to GCS.  Any inspection or audit
will be conducted at WJ sole expense.

(d) GCS agrees to maintain sufficient documentation
regarding all Wafers sold to WJ for five (5) years
after shipment. All Wafers shall be traceable to the assigned Lot. Lot
traceability for Wafers shall be maintained throughout the

 

entire process
from fabrication through verification testing, packing and shipment.
Traceability and full history for Wafers shall include applicable wafer
fabrication process recipes, substrate vendor identification and lot number,
quality control data, process deviation notes and probe data as well as
assembly records and deviations, verification test results, visual inspection
results, burn-in conditions, and final test data. WJ
shall have the right to limit and approve substrate and other materials
suppliers.  Supplier approval will not be unreasonably
withheld and rejection must be based on objective documented criteria showing
how the substrate and material suppliers will cause GCS to fail to meet the
Specifications.

5.5 Process Control
Information, On-Line Information Access. Upon WJ’s
written request, GCS shall provide WJ with process
control information as set forth in the Specifications. Such information may
include: Process and electrical test yield results, calibration schedules and
logs for equipment, environmental monitor information for air, gases and DI
water, documentation of operator qualification and training, documentation of
traceability, process verification information, and trouble report currently
available from GCS’s document control center in a format pursuant to GCS’s
standard document retention policy. WJ shall have
on-line web access to the foregoing information and reports, and other GCS
information, to the extent that such access is customarily provided by GCS to
other customers.

5.6 Scrap Disposal. GCS
shall return Scrap which cannot be reclaimed to WJ at
WJ’s request, or otherwise destroy and properly
dispose of all Scrap in order to prevent any unauthorized sale or other
disposition of any Wafers. GCS will maintain Scrap procedures and will record
all products scrapped including Lot history, reason for scrap and WJ’s approval for scrap. WJ shall
have the rights to audit the scrap procedures and to witness scrap of the material.

5.7 Manufacturing
Metrics. GCS agrees to provide pertinent manufacturing metrics to WJ, including but not limit to data regarding process
yield, cycle time and Process development. 
WJ shall upon request receive in a timely
manner raw data for these metrics such that the data could be calculated using WJ standard formulas as listed in the Specifications.

5.8 Deficiency
Expectations. WJ expects consistent, high quality
wafer fabrication processing and services from GCS, such that a die yield
expectation can be predicted for WJ’s products based
on the area of a particular die. It is understood that WJ’s
design and specifications also influence this metric. The functional test
yields expected by WJ are equal to or greater than
the yields that WJ has experienced in the past for
their products of identical design to the products produced in this
Agreement.  WJ
shall provide GCS data illustrating the yield performance and die size for each
device.  A Target Yield will be
established on a per device basis using WJ’s
historical data (see Appendix B).

WJ will inform
GCS of material exhibiting unexpectedly low yields. GCS is willing to assist WJ at no additional cost in the evaluation of the low
Yield, and in identification of the necessary activities to correct such low
Yields.

WJ agrees to pay full price for wafer lots
that exceed the target functional test Yield percentage of historical
performance as follows:

0-3 months after
Qualification: **% Target Yield

3-9 months
after Qualification: **% Target Yield

>9 months after
Qualification: **% Target Yield

Pricing of Wafer Lots between the Target Yield and **%  Target Yield will be pro-rated.  Pro-ration will be calculated and credited on
a quarterly basis. Should the average yield of a device (excluding rejected
wafers) meet or exceed the Target Yield, no credit will be issued for lots
normally subject to pro-ration.

Pricing of
Wafers below **% of the Target Yield may be rejected and WJ
will request and be granted a return material authorization for the full value
of such Wafers.

6. PARTIES’ ACTIVITIES

6.1 Site Inspections. WJ and its current employees, customers, strategic
partners, investors and acquirers shall have the right to visit GCS’s
Facilities to inspect the Facilities and fabrication of the Wafers, as well as
conduct other activities contemplated by this Agreement as long as such WJ personnel comply with GCS’s security policies and sign a
non-disclosure agreement acceptable to GCS. Such visits shall be conducted
during GCS’s normal working hours and may be stopped by GCS, if disruptive to
GCS operations. WJ may also assign WJ employees to work at the Facilities manufacturing the
Wafers on an as needed or other mutually agreed basis. GCS shall grant these
employees full access to employee parking facilities and appropriate sections
of the Facilities including clean room where the Wafers are manufactured or
placed. GCS shall provide such WJ employees with
secured office space and full access to conference room, food and break
facilities. GCS shall allow WJ employees to be full
and active participants on problem solving teams 

 

with
respect to the manufacturing of the Wafers.

6.2 Records
Inspections. In addition to WJ’s other inspection
rights set forth elsewhere in this Agreement, WJ
shall have the right to inspect the books and records (whether maintained in
documentary form or as computer files) of GCS related to this Agreement during
normal business hours upon one week’s written advance notice to GCS.

1              Financial
Reports and Notification of Financial Impairment . GCS agrees, for so long as the Agreement remains in effect,
to furnish to WJ: 
(i) within 90 days after the end of each
fiscal year, audited annual financial statements, setting forth in comparative
form the figures for the previous year (or if not yet completed, then a draft
thereof, followed by the final thereof as soon a available); (ii) within 45
days of each of the first three fiscal quarters of each year, the quarterly unaudited financial statements, setting forth in
comparative form the figures for the previous year; (iii) within 30 days after
the end of each month, the monthly unaudited
financial statements which shall be limited to the monthly cash balance and
revenue for the period, setting forth in comparative form the figures for the
previous year as well as performance versus budget; (iv) within 30 days after
the end of each quarter, a rolling twelve month forecast of cash flow; and (v)
within 60 days after the first day of each fiscal year, an annual budget. GCS
further agrees to immediately notify WJ if (i) based on GCS’s then current three month forecast of cash
flow, all or substantially all of GCS’s available cash balance for working
capital would be reasonably likely to be consumed or (ii) GCS suffers any
material adverse change in its financial condition that is reasonably likely to
impair GCS’s ability to perform its obligations under this Agreement.

2              PRICING AND PAYMENTS

7.1 Wafer Pricing.  The price for Wafers ordered and accepted by WJ and delivered by GCS in accordance with this Agreement
shall be as set forth in Appendix C.

7.2 Invoicing and Payment
Terms. GCS shall invoice WJ upon shipment of the
Wafers. GCS’s invoices shall set forth the amounts due from WJ
to GCS for such shipment, and shall contain sufficient detail to allow WJ to determine the accuracy of the amount(s) billed. The
invoice shall be dated and delivered as of the date of shipment and payments
shall be on thirty  (30)
days net terms. All payments will be in United States of America dollars. WJ shall have the right to offset any disputed claims or
other amounts due from GCS against WJ’s payment obligations
under any invoice.  Upon resolution of
any dispute, payment is due immediately from WJ.  If WJ pays invoices
after thirty (30) days from delivery, interest shall apply at the lesser of the
CoMerica Bank prime rate plus 2%, compounded
annually, or the highest rate allowable by law.

7.3 Taxes. GCS is responsible for all taxes related to the Wafers and this
Agreement except for taxes on WJ’s income, customs
duties, sales tax, value added tax, use tax, and excise tax.

8. CAPACITY PLANNING AND FORECASTING

8.1 Forecasts.  In order to allow GCS to plan its foundry
capacity and to order raw materials in due time, WJ
shall give to GCS a non-binding twelve (12) month forecast for its estimated
monthly Wafer requirements per product based on reasonably available
information. WJ will provide an updated non-binding
twelve (12) month forecast no later than ten (10) days before the end of each
calendar quarter. WJ will also provide a non-binding
six (6) month rolling forecast of its estimated Wafer requirements no later
than ten (10) business days before the end of the applicable calendar month.

8.2 Capacity Commitment.

(a)
GCS shall reserve the capacity and agrees to maintain the ability to
manufacture, at the stated lead times, the minimum volume of Wafers per year as
described in Appendix C.  Such capacity
will be available in equal quarterly installments of the entire capacity. GCS
also agrees to reserve capacity to meet the forecasted volumes as set forth in
Section 8.1.

(b)
Within ten (10) days after receipt of WJ’s forecast,
GCS shall provide WJ with a written plan detailing
GCS’s manufacturing capacity commitments for the forecast period. GCS shall
allocate sufficient capacity to be able to provide up to ********************
percent (***%) of the forecast and shall use
reasonable efforts to provide additional capacity as requested.

(c)
GCS shall provide current-quarter weekly wafer output updates to the forecast.
This weekly update would comprehend anticipated changes to forecast related to
deviations from planned cycle-time. WJ will use the
weekly updates to direct GCS activities, including the disposition of Wafers
for shipping.

(d)
GCS shall provide WJ prompt written notice if GCS
becomes aware of any circumstance which may constrain its capacity to
manufacture Wafers in accordance with the then current forecast.

 

9. ORDER, DELIVERY AND ACCEPTANCE

9.1 Order Placement and Firm Orders.  WJ shall place
written orders for the Wafers to be purchased under this Agreement via a
purchase order in a form acceptable to WJ (each, a “Purchase Order”). The
Purchase Order shall include delivery instructions included thereon or issued
in connection with the written order that reference the applicable written
order and provide detail regarding the mix, quantities and requested delivery
date for the Wafers. Firm Purchase Orders will be placed monthly, no later than
ten (10) business days prior to the end of each calendar month. WJ may adjust the device mix prior to GCS starting
material, but the total volume of Wafers cannot be decreased without the
consent of GCS after the Purchase Order has been accepted. Modifications to the
mix and quantity of Wafers to be started in any given week may be requested in
writing by WJ no later than Thursday of the previous
week. GCS shall accept any Purchase Order that is within the volume of the most
recent six (6) month forecast or up to **% greater.

9.2 Order Acceptance.

(a)
GCS shall acknowledge all Purchase Orders and confirm all delivery schedules
and instructions therein within two (2)  business days following its receipt of
Purchase Order. GCS may not reject Purchase Orders based on ordering
instructions that conform to the terms of this Agreement and GCS may not reject
the Purchase Order based on the quantity of Wafers ordered unless, and then
only to the extent that, the quantity is more than **% over the most recent six
(6) months forecast.

(b)
GCS shall deliver the quantity of Wafers stipulated in the relevant Purchase
Order and delivery shall be considered timely only if on or before the
scheduled delivery date. In the event delivery is more than seven (7) days after
the scheduled delivery date, WJ shall be entitled to
a reduction in the price of the delayed Wafers in the amount of *% per week up
to a maximum reduction of **% and after thirty (30) days, WJ
shall have the right to cancel any undelivered Wafers at no charge. WJ agrees to accept deliveries of *** percent (**%) above the Purchase Order quantities.  WJ also agrees to
allow Purchase Orders to be delivered short provided the deliveries are within ***
percent (**%) of the Purchase Order Quantity.

9.3 Cancellations and
Schedule Changes.

(a)
WJ may, in its discretion, cancel, suspend or modify
any Purchase Order, even if GCS has begun manufacture of the Wafers so ordered
within the stated lead time. Upon cancellation of the complete or partial
Purchase Order for which GCS has begun manufacturing Wafers, WJ agrees to pay GCS a percentage of the applicable selling
price set forth in the applicable Purchase Order based on the stage of
completion of the applicable Wafer Lot. 
GCS may not terminate any accepted Purchase Order, even if GCS
terminates this Agreement for default by WJ.

(b)
Changes to the Purchase Order may be made at any time by WJ.
GCS shall use reasonable efforts to accommodate WJ’s
requested changes. GCS will notify WJ at the earliest
indication of any interruption in supply of the Wafers or other Facility
difficulty that may affect the availability of Wafers under this Agreement. WJ may request GCS to hold and delay shipment of any Wafers
for up to one hundred twenty (120)  days. WJ
agrees to pay GCS ***** percent (**%) of the Purchase
Order price for shipments delayed for thirty (30) days or more at WJ’s request.

9.4 Wafer Shipment. GCS shall deliver
the Wafers to the destination set out by WJ in the
relevant Purchase Order. WJ will acknowledge to GCS
the receipt of each shipment of Wafers stating quantity, type and damages
existing at delivery, within seven (7) days. 
GCS shall bear the risk of loss with respect to the Wafers until WJ accepts delivery of the Wafers at which time title shall
pass to WJ upon GCS’s receipt of payment in full.

9.5 Wafer Acceptance
Testing. Acceptance testing of the Wafers delivered to WJ
will be performed within fifteen (15) days of receipt.  After this period, WJ
will be deemed to have accepted the Wafers. 
GCS will certify to WJ with each shipment that
the Wafers contained in the shipment have successfully passed the Quality and
Reliability Standards.  If WJ rejects any Wafer, and GCS verifies that a Wafer has a
different NDW than certified by GCS, then WJ and GCS will confer and determine the reason for the
rejection or the inaccurate count of NDW. GCS shall
immediately exercise its reasonable efforts to develop and implement a
corrective action plan for any errors, including manufacturing errors or
defects identified in its systems. All Wafers that are properly rejected due to
failure to meet Wafer Standards may be returned to GCS for a refund of the
purchase price, plus WJ’s shipping cost, or may be
retained by WJ subject to an agreed upon credit being
issued by GCS. For such properly rejected Wafers that WJ
returns to GCS for a refund of the purchase price, GCS will be responsible for WJ’s shipping cost, customs and export costs and insurance.
Title and risk of loss or damage of returns will pass to GCS at WJ’s docks. Rejected Wafers shall be subject to the scrap
disposal procedures set forth in Section 5.6 herein. WJ
will provide documentation for all rejected Wafers.

 

10. PRODUCT WARRANTIES AND FAILURES

10.1 Product Warranty. GCS warrants
that, at the time of delivery to WJ, all Wafers will comply with the
Specifications and the Quality and Reliability Standards and be free of liens,
encumbrances and defects. WJ shall advise GCS in writing of any claims
involving failure to meet the Specifications.

10.2 Persistent Failure. In the event
repeated field failures occur with respect to Wafers, or a significant field
failure occurs which requires immediate attention, GCS shall take all
commercially reasonable action required to promptly resolve the matter.

1                                          Product
Failure. In the event that any Wafer fails to pass WJ’s
inspection, or WJ otherwise determines that any Wafer fails to meet the Wafer
Standards, WJ will give GCS notice of the defective Wafer and GCS shall use
commercially reasonable efforts to resolve the matter.  WJ shall have no financial responsibility for
defective Wafers.

2                                          INTELLECTUAL PROPERTY OWNERSHIP

11.1 Technology Owned by WJ. WJ shall
own all right, title and interest (including all Intellectual Property Rights)
in and to any and all:

(a)
Pre-Existing Technology —
Technology developed or acquired by WJ prior to or independently of this
Agreement, including but not limited to Technology embodied in or used to
practice the Process together with any and all improvements, enhancements,
modifications, alterations, additions or applications thereof, all proprietary
information and know-how provided to GCS by WJ that relate to WJ’s Process(es)
for the manufacture of Wafers, WJ’s specifications for Wafers, WJ’s performance
criteria for Wafers, WJ’s applications for Wafers and all other matters
relating to Wafers and their manufacture, which has been provided to GCS by WJ
for the specific purpose of manufacturing Wafers;

(b) New
Technology — Technology developed during the Term solely by or for
WJ (e.g., a commissioned work) that does not constitute an Improvement to any
of the Technology in (a) above or in Section 11.2 below;

(c) Improvements —
Improvements to any of Technology in (a) 
or (b)  above during the Term if
such Improvements (i)  are developed
solely by or for WJ (e.g., a commissioned work), (ii)  constitute Jointly Developed Technology; or
(iii)  are developed solely by or for GCS
where such Improvement is based upon or derived in whole or in part from WJ
Confidential Information or from Technology in (a) or (b)  above.

(All of (a), (b)  and (c) 
above, collectively, “WJ Technology”.)

11.2 Technology Owned by GCS. GCS
shall own all right, title and interest (including all Intellectual Property
Rights) in and to any and all:

(a)
Pre-Existing Technology —
Technology developed or acquired by GCS prior to or independently of this
Agreement;

(b) New Technology — Technology developed
during the Term solely by or for GCS (e.g., a commissioned work) that does not
constitute an Improvement to any of the Technology in (a)  above or in Section 11.1 above;

(c)
Improvements — Improvements to
any of Technology in (a)  or (b)  above during the Term if such Improvements (i)  are developed solely by or for GCS (e.g., a
commissioned work); (ii)  constitute
Jointly Developed Technology; or (iii) 
are developed solely by or for WJ where such Improvement is based upon
or derived in whole or in part from GCS Confidential Information or from
Technology in (a)  or (b)  above.

(All of (a), (b)  and (c) 
above, collectively, “GCS Technology”.)

1                                           Assignment
of Rights. To the extent that the allocation of right, title
and interest in and to any Intellectual Property specified in this Section
11 do not automatically vest in the applicable Party, the other Party (the “Assignor”) hereby
assigns, transfers and conveys (and agrees to assign, transfer and convey) to
the other Party (the “Assignee”)
such of the Assignor’s right, title and interest in and to all such
Intellectual Property as is necessary to achieve such allocation. The Assignor
will provide, at the Assignee’s expense, all assistance reasonably required by
the Assignee to consummate, record and perfect the foregoing assignment, including,
but not limited to, signing all papers and documents necessary to register
and/or record such assignment with the United States Patent  & Trademark Office, United States
Copyright Office, other state and federal agencies and all corresponding government
agencies and departments in all other countries, where applicable. Assignor
hereby appoints Assignee as its attorney-in-fact to act as Assignor to execute
and file the papers and documents specified in

 

this
Section 11 if Assignor is unwilling or unable to comply with the foregoing
sentence of this Section 11.3. Each Party shall have the right, in its sole
discretion, to apply for and maintain Intellectual Property Rights (including
registrations therefore) with respect to the Technology owned by such Party (as
described above).

2                                          INTELLECTUAL PROPERTY LICENSES

12.1 GCS Technology License. GCS
acknowledges and agrees that no GCS Technology will be utilized to manufacture
the Wafers for WJ. However, to the extent that may be necessary for any reason
and subject to the terms and conditions of this Agreement, GCS hereby grants to
WJ, as a partial remedy for breach of the prior sentence, a limited worldwide,
non-exclusive, perpetual, royalty-free, paid-up and sublicensable license under
all Intellectual Property Rights in the GCS Technology to use, manufacture,
have manufactures, sell, offer for sale, offer for sale, import, reproduce,
prepare derivative works of, distribute or otherwise exploit the Wafers.

12.2 WJ Interface License. With
respect to any and all software and hardware interfaces or other adaptations
developed or acquired by or for GCS, that are specific to the WJ Technology,
and which GCS has the right to license to WJ without payment of royalties to
any third party (each a “WJ
Interface”), to the extent GCS has the right to grant a license,
GCS hereby grants to WJ a limited, worldwide, non-exclusive, perpetual,
royalty-free, paid-up and sublicensable license to: (a)  use, reproduce, perform, display and create
derivative works of such WJ Interface; and (b) 
make, have made, import and otherwise use such WJ Interface.

12.3
WJ Technology License. Subject to the terms and conditions of this
Agreement, WJ hereby grants to GCS a worldwide, non-transferable,
non-exclusive, perpetual, non-sublicensable, royalty-free, paid-up license
during the Term solely to use the WJ Technology to make (but not have made)
products for WJ at the Facilities. GCS shall not (and shall not permit any
third party to): (a)  modify, reverse-engineer
or create derivative works of the WJ Technology or any components thereof
except as specifically permitted hereunder; (b) 
remove or alter any patent, trademark, copyright or other proprietary
legend in WJ Technology; or (c)  sell,
loan, lease, assign, encumber or otherwise transfer any rights to WJ
Technology.

12.4 Embedded Third Party Technology.
GCS acknowledges and agrees that WJ may incorporate or otherwise include
Embedded Third Party Technology. Embedded Third Party Technology may only be
used as part of the WJ Technology, and subject to any terms applicable
thereto.  WJ represents and warrants that
it has the right to use the Embedded Third Party Technology and will defend and
hold GCS harmless if a claim is made for GCS’s use of the Embedded Third Party
Technology consistent with this Agreement.

12.5  Retained Rights. WJ reserves all
rights in WJ Technology, and related Intellectual Property Rights not expressly
granted to GCS.

13                                    PROTECTION OF TECHNOLOGY AND INTELLECTUAL PROPERTY

13.1 Protection of WJ Technology. GCS
will take steps to avoid benefit to WJ’s competitors from WJ Technology, as
follows:

(a)
GCS will create a firewall between (i) 
products, processes and other activities on behalf of WJ, and (ii)  all personnel, products and processes of (1)  competitors of WJ and (2) other product
customers of GCS.

(b)
The Parties will cooperate to prevent the unauthorized distribution, use or
access, or the unauthorized disclosure of WJ’s Intellectual Property by GCS.

(c)
If a security compromise related to the WJ Technology is caused by or results
primarily from the acts or omissions of GCS or any of its subsidiaries,
vendors, employees or sublicensees or their failure to comply with the agreed
security procedures, GCS will be responsible for responding to and containing
such security compromise

13.2                           Know-How
Preservation. GCS will not use any Intellectual Property of WJ
(including without limitation Confidential Information), for any purpose inside
or outside GCS, except for the direct and sole benefit of WJ.

14                                    INDEMNIFICATION AND INSURANCE

14.1 Intellectual
Property Indemnification by GCS.

(a)
GCS agrees to defend at its expense any suits brought by a third party against
WJ based upon a claim that the process used by GCS to manufacture Wafers and
the GCS Technology used in such process infringes any Intellectual Property
Rights, and to pay costs, including attorneys fees, and damages finally awarded
in any such suit against WJ. GCS has no obligations under this Section to the
extent arising from GCS’s use of the Process. 
WJ will promptly notify GCS in

 

writing
of any claim or suit. GCS will have control of such claim or suit to defend or
settle at its expense. WJ will provide reasonable assistance for GCS’s defense
of such claim or suit.

(b)
If the use and sale of any of the Wafers is prohibited by court order as a
result of a suit within the scope of Section 14.1(a), GCS, at its option and at
no expense to WJ, will obtain for WJ the right to use and sell the Wafers or
will substitute an equivalent method for performing the GCS Services which are
acceptable to and qualified by WJ.

14.2 Intellectual
Property Indemnification by WJ. WJ agrees to defend at its expense any suit
brought against GCS by a third party based upon a claim that the Wafers
produced by GCS for WJ infringe any Intellectual Property Rights, if such
infringement arises from GCS’s use of the Process, WJ Technology, WJ’s
instruction in connection with the manufacture of the Wafers or compliance with
WJ’s Specifications and to pay costs, including attorneys fees, and damages
finally awarded in such suit against GCS, provided that WJ is notified within
thirty (30) days in writing of the suit and at WJ’s request and at its expense
is given and opportunity to control of said suit and all requested reasonable
assistance for defense of such claim.

14.3 Damage Mitigation. If
a third party notifies either party that the Technology, processes,
specifications or formula of the other party infringes or violates the rights
of such third party, then the parties will cooperate to assure that their
actions will respect properly asserted third party intellectual property rights
and address such allegations of infringement or other claims in a reasonable
manner.

14.4 SOLE INFRINGEMENT LIABILITY. THE
FOREGOING PROVISIONS STATE THE ENTIRE LIABILITY OF EITHER PARTY TO THE OTHER
WITH RESPECT TO THIRD PARTY INFRINGEMENT CLAIMS OF ANY TYPE BROUGHT AGAINST A
PARTY REGARDING PERFORMANCE OF THIS AGREEMENT. WITHOUT LIMITING THE OBLIGATIONS
OF EITHER PARTY UNDER SUCH FOREGOING PROVISIONS, IN NO EVENT SHALL EITHER PARTY
BE LIABLE FOR ANY SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY NATURE
WHATSOEVER (INCLUDING, WITHOUT LIMITATION, LOST PROFITS) ARISING FROM
INFRINGEMENT OR ALLEGED INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY
RIGHTS.

14.5 Other
Indemnification by GCS. All work to be performed by GCS under this
Agreement shall be at GCS’s sole risk. GCS shall indemnify and hold harmless
WJ, its officers, directors, employees, affiliates and representatives from and
against any claims, demand, cause of action, debt or liability, including
litigation costs and reasonable attorney’s fees, relating to or arising from
this Agreement, except for any claims attributable to WJ design defects, or the
gross negligence or intentional misconduct of WJ.

14.6 Insurance.
GCS shall acquire and maintain at its sole cost and expense (i) statutory
workers’ compensation insurance and employer’s liability insurance, (ii) all
risk insurance coverage for physical loss or damage to Wafers while at the
Facility or under its control, and until title passes to WJ, and to the
tangible personal property provided to GCS in connection with the Process and
(iii) product liability, bodily injury, business interruption, casualty and
property damage insurance, in a form reasonably acceptable to WJ with a
reputable insurance company reasonably acceptable to WJ. The insurance policy
shall provide for combined single limit coverage of not less than $**********
and WJ shall be named as an additional insured and loss payee. GCS shall submit
certificates of such insurance to WJ (which shall include an agreement by the
insurer not to cancel such coverage except upon thirty (30) days prior written
notice to WJ) for its approval. GCS shall maintain such insurance coverage in
effect for WJ’s benefit throughout the term of this Agreement and for a period
of one (1) year from the date of the last delivery of wafers to WJ hereunder.
If GCS fails to furnish such certificates of insurance or any required
insurance is cancelled for any reason, WJ may, at its option, immediately
terminate this Agreement.

15. CONFIDENTIALITY

15.1
Confidentiality Obligations. The parties recognize that the Confidential
Information of one another constitutes valuable confidential and proprietary
information. Accordingly, the Parties agree on behalf of themselves and their
respective officers, directors, employees and agents that during the term of
this Agreement and for a period of ten (10) years after the termination or
expiration hereof for any reason, they shall hold in confidence all
Confidential Information of the other party (including the existence of this
Agreement and the terms hereof) and not use the same for any purpose other than
as set forth in this Agreement nor disclose the same to any other Person except
to the extent that it is necessary for a Party to enforce its rights under this
Agreement or if required by law or any governmental authority at the discretion
of a Party (including, without limitation, the Securities and Exchange
Commission and any stock exchange or quotation system upon which a Party’s
shares or other equity securities may be traded); provided, however, if a Party
shall be required by law to disclose any such Confidential Information to any
other Person, such party shall give prompt written notice thereof to the other
party and shall minimize such disclosure to the amount required. The Parties
acknowledge that violation of this Section 15.1 could

 

cause
the other Party irreparable harm and as such each Party agrees and acknowledges
that remedies at law for any breach of its obligations under this Section 15.1
are inadequate and that in addition thereto the other party shall be entitled
to seek equitable relief, including injunction and specific performance, in the
event of any such breach, without the necessity of demonstrating the inadequacy
of monetary damages. Processes, data and other information provided, created or
discovered prior to or during the term of this Agreement relating to the Wafers
and/or the Process(es) or methods for the manufacture of the Wafers whether
provided, created or discovered solely by WJ or GCS or jointly by the parties
shall, for purposes of this Agreement, be deemed Confidential Information
solely owned by WJ and furnished by WJ to GCS hereunder and GCS further agrees
that such specific Confidential Information shall be accessible on a “need to
know” basis only to those GCS employees working on the manufacture of the
Wafers. GCS warrants and represents to WJ that no Confidential Information of
WJ will be disclosed to any director of GCS who is a commercial competitor of
WJ, the director’s employee, officer, agent or any of its affiliates or
subsidiaries.

The board members of GCS
agree to be bound by the confidentiality provisions of this Agreement. Any GCS
board member who is a competitor of WJ agrees to recuse themselves from any
meeting where Confidential Information is discussed as long as it is not in
conflict with their fiduciary responsibility as a board member.

15.2                           Excluded
Information. The obligations of a Party under Section 15.1 shall
not apply to any information which (a) at the time of disclosure, is generally
known to the public, (b) after disclosure, becomes part of the public knowledge
(by publication or otherwise) other than by breach of this Agreement by the
receiving party, (c) the receiving Party can verify by written documentation
was in its possession at the time of disclosure and which was not obtained,
directly or indirectly, from the other Party, (d) the receiving Party can
verify by written documentation results from research and development by the
receiving Party thereof independent of disclosures by the other Party thereof
or (e) the receiving Party can prove was obtained from any Person who had the
legal right to disclose such information, provided that such information was
not obtained to the knowledge of the receiving Party thereof by such Person,
directly or indirectly, from the other Party thereof on a confidential basis.
Notwithstanding the foregoing, a Party may disclose Confidential Information of
the other Party (a) to its attorneys, accountants and other professional
advisors under an obligation of confidentiality to the other Party, (b) to
banks or other financial institutions or venture capital sources for the
purpose of raising capital or borrowing money or maintaining compliance with
agreements, arrangements and understandings relating thereto, and (c) to any
Person who proposes to purchase or otherwise succeed (by merger, operation of
law or otherwise) to all of a Party’s right, title and interest in, to and
under this Agreement, if such Person is specifically identified to the other
Party in advance and such Person agrees in writing to maintain the
confidentiality of such Confidential Information. The Party disclosing Confidential
Information to any third party as permitted by this Agreement shall also be
responsible for any failure of such third party to maintain the confidentiality
of such Confidential Information. The standard of care required to be observed
hereunder shall be not less than the degree of care which a Party uses to
protect its own information of a confidential nature.

16                                    TERM AND TERMINATION

16.1 Term of Agreement.
The term of this Agreement shall be one (1) year from the date the Process is
qualified hereunder, unless earlier terminated pursuant to the provisions of
this Agreement (the “Term”).
The Term is renewable annually for additional consecutive terms of one year
each at WJ’s option. GCS shall have the right to reject automatic renewal after
a period of three years if the total demand for Wafers drops below **** wafers
per year.

16.2 Termination.

(a)
This Agreement may be terminated immediately by a Party if the other Party
defaults on any of its material obligations or conditions of this Agreement which
remain uncured for thirty (30)  calendar
days, if capable of being cured, after written notice to the defaulting Party
specifying the nature of the default, the non-defaulting Party will have the
right to terminate this Agreement by giving written notice of termination to
the defaulting Party.

(b)
A Party shall have the right to immediately terminate this Agreement by giving
written notice of termination to the other Party at any time upon or after:
(i)  the filing by the other Party of a
petition in bankruptcy or insolvency; (ii) 
any adjudication that the other Party is bankrupt or insolvent;
(iii)  the filing by the other Party
under any law relating to bankruptcy or insolvency; (iv)  the appointment of a receiver for all or
substantially all of the property of the other Party; (v)  the making by the other Party of any
assignment or attempted assignment for the benefit of creditors; or (vi)  the institution of any proceedings for the
liquidation or winding up of the other Party’s business or for the termination
of its corporate existence.

(c)
This Agreement may, upon sixty (60) days notice, be terminated by WJ if (i) GCS
receives audited financial statements with a “going concern” or similar
qualification or exception by its auditors, , (ii) GCS engages in fraudulent or
material intentional misconduct (iii) GSC is in breach of its lease agreement
related to the Facility (without securing a substitute lease agreement for an
alternate Facility), (iv) there is a change in control of GCS of **% or more of
the board of directors of GCS or its equity share ownership, or (v) WJ is
otherwise specifically entitled to immediately terminate this

 

Agreement
under any term or provision of this Agreement.

(d)
This Agreement may be terminated by WJ at any time upon ninety (90) days
written notice to GCS.

16.3 Effect of
Termination.

(a)
If WJ terminates this Agreement, WJ may, at WJ’s sole discretion, terminate
delivery of all undelivered, and delivered but unaccepted, Wafers. WJ must
compensate GCS for all costs and expenses incurred for work-in-process Wafers.

(b)
In the event of termination or cancellation of this Agreement for any reason,
GCS shall promptly return to WJ the WJ Technology and processes, photomasks,
equipment, tools and other property of WJ used to manufacture the Wafers,
immediately cease the use thereof and certify to WJ in writing that the same
are no longer in use provided, however, in the event of termination or
cancellation of this Agreement for any reason, WJ may require GCS to continue
to honor the terms of this Agreement for up to twelve (12) additional months to
allow WJ and GCS to effect an efficient transition of the WJ Technology,
processes, photomasks, equipment, tools and other property to WJ or a third
party designated by WJ.

(c)
If WJ terminates this Agreement pursuant to Section 16.2(c)(ii) (fraud) or
Section 16.2(c) (iii)(loss of lease), GCS shall be liable to WJ for any
reasonable cover costs incurred by WJ in re-procuring the Wafers which shall
include all direct costs incurred by WJ to procure the Wafers from another
supplier, including all nonrecurring expenses. GCS shall also be responsible
for any indirect costs incurred by WJ. GCS’s liability under this Section 16.3
shall be limited to $*********.  WJ must
exercise commercially reasonable efforts to mitigate damages.

16.4 Liquidated Damages.

(a)
If within twelve (12) months after the date of this Agreement WJ elects to
terminate this Agreement without cause as set forth in Section 16.2(d), WJ
agrees to pay GCS liquidated damages of $*******.  Liquidated damages will be offset by any
payments made to GCS pursuant to Appendix D; provided that no amount shall be
payable under this clause (b) unless all amounts called for under Section
16.3(c) are first paid in full.

(b)
If within twelve (12) months after the date of this Agreement WJ terminates
this Agreement pursuant to Section 16.2(c)(ii) (fraud) or Section
16.2(c)(iii)(loss of lease), GCS agrees to pay WJ liquidated damages of
$******* plus any payments made to GCS pursuant to Appendix D. GCS agrees that
such damages would be difficult to estimate but that the foregoing is a
reasonable estimate of the actual damages that WJ would incur.

1                                          Survival. The
provisions of this Section and Sections 
11, 12, 13.1, 13.2, 14, 15, 16.3, 16.4, 17, 18, 19 and 20 shall survive
any expiration or termination of this Agreement.

2                                          DISPUTE RESOLUTION

17.1 Mediation. WJ and GCS shall attempt to settle any claim or
controversy, except those related to intellectual property, through
consultation and negotiation in good faith and a spirit of mutual cooperation.
If those attempts fail, then the dispute will be mediated by a mutually
acceptable mediator to be chosen by WJ and GCS within twenty (20) days after
written notice by a Party demanding mediation. 
Neither Party may unreasonably withhold consent to the selection of a
mediator, and WJ and GCS will share the cost of the mediation equally.

17.2 Arbitration. Any
dispute, claim or controversy arising out of or relating to this Agreement or
the breach, termination, enforcement, interpretation or validity thereof,
including the determination of the scope or applicability of this agreement to
arbitrate, that is not resolved through negotiation or mediation within thirty
(30) days of the date of the initial demand by either Party, shall be
determined by arbitration in San Jose, California before one arbitrator. The
arbitration shall be administered by JAMS pursuant to its Streamlined
Arbitration Rules and Procedures. Judgment on the Award may be entered in any
court having jurisdiction. This clause shall not preclude parties from seeking
provisional remedies in aid of arbitration from a court of appropriate
jurisdiction. The arbitrator may, in the Award, allocate all or part of the
costs of the arbitration, including the fees of the arbitrator and the
reasonable attorneys’ fees of the prevailing party.

18. LIMITATION OF LIABILITY

18.1 DISCLAIMER. EXCEPT AS EXPRESSLY
STATED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY ADDITIONAL WARRANTIES,
EXPRESS, IMPLIED OR STATUTORY, ARISING FROM COURSE OF DEALING OR USAGE OF
TRADE. IN PARTICULAR, ANY AND ALL WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE AND NON-INFRINGEMENT ARE HEREBY EXPRESSLY DISCLAIMED.

18.2 LIMITATION
OF LIABILITY. EXCEPT FOR BREACH OF OBLIGATIONS RELATING TO FAILURE TO
RETURN THE PROCESS OR WJ TECHNOLOGY TO WJ UNDER THE TERMS OF THIS AGREEMENT,

 

INFRINGEMENT
OR VIOLATION OF A PARTY’S INTELLECTUAL PROPERTY RIGHTS ON A BREACH OF
OBLIGATIONS RELATING TO CONFIDENTIAL INFORMATION, (1)  IN NO EVENT WILL EITHER PARTY BE LIABLE TO
THE OTHER PARTY, CUSTOMERS OR ANY THIRD PARTIES FOR ANY INDIRECT, SPECIAL,
INCIDENTAL, PUNITIVE, CONSEQUENTIAL OR SIMILAR DAMAGE OF ANY KIND OR CHARACTER,
REGARDLESS OF WHETHER EITHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES AND (2)  THE AGGREGATE LIABILITY
OF A PARTY FOR ALL CLAIMS HEREUNDER SHALL NOT EXCEED ************************************
DOLLARS ($************).  THIS IS AN
ABSOLUTE LIMITATION ON DAMAGES AND MAY NOT BE INCREASED BY ANY OTHER SECTION OF
THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO SECTION 16.

19                                  ****************

19.1  
************************************************************************************************

************************************************************************************************

************************************************************************************************

************************************************************************************************

************************************************************************************************

************************************************************************************************

 

20                                MISCELLANEOUS

20.1 Applicable Law.
The law of the state of California shall govern this Agreement without regard
to choice of law provisions. The Parties agree that the UN Convention for the
International Sale of Goods shall not apply. Jurisdiction and venue for
litigation of any dispute, controversy or claim arising out of or in connection
with this Agreement will be only in a United States federal court for the
Northern District of California or a California state court having subject
matter jurisdiction located in San Jose, California or San Francisco,
California. Each of the Parties hereby expressly submits to the personal
jurisdiction of the foregoing courts located in California, and waives any
objection or defense based on personal jurisdiction or venue that might
otherwise be asserted to proceedings in such courts.

20.2 Assignment. GCS shall not assign,
sublicense or otherwise transfer this Agreement or any rights or obligations
arising under this Agreement without the prior written approval of WJ and GCS
shall not delegate or subcontract its performance of this Agreement to any
third party without the prior written approval of WJ.  WJ may assign or transfer this Agreement with
the prior written consent of GCS provided that the assignee or transferee is
bound by law or written agreement to WJ’s obligations under this Agreement.

20.3 Notification. All
notices specifically required to be given under the terms of this Agreement
will be in writing and sent to the addresses stated below or to such other
address, which is designated in writing by the Party to receive notice. All
notices will be deemed to have been given when received by the addressee.

As
to GCS:

Name: Wing Yau    Jerry Curtis 

Function: VP and Director Foundry Services   
President and CEO 

Tel. no.: 310-530-7274 X107 310-530-7274 X202

Fax no.: 310-517-8200 310-517-8200 

Address: 23155 Kashiwa Court 23155 Kashiwa Court

Torrance, CA 90505    Torrance, CA 90505

E-mail wyau@gcsincorp.com
jcurtis@gcsincorp.com

Such persons listed above shall be subject to
change at any time by GCS with prior written notification to WJ.

As to WJ:

Name:   Mark Knoch  
Bruce Diamond 

Function: VP of Operations    CEO &
President

 

Tel. no.: (408) 577-6229
(408) 577-6222

Fax no.:  (408) 577-6229 (408) 577-6229

Address: 401 River Oaks Parkway 401 River Oaks Parkway

San Jose, CA 95134    San Jose, CA 95134

E-mail  
Mark.knoch@wj.com   
Bruce.diamond@wj.com

20.4 Entire Agreement/Superseded
Agreements. This Agreement, which includes the appendixes and other
exhibits and attachments hereto, supersedes all prior discussions and writings
and constitutes the entire and only contract between the Parties relating to
the activities to be performed hereunder.

20.5 No Modification.
This Agreement may not be changed, altered or amended except in writing and
signed by duly authorized representatives of all of the Parties

20.6 Environmental Matters. GCS will
indemnify and hold WJ harmless from and against any liability, claim, damage,
injury, expense, suit, or cause of action, including, but not limited to,
reasonable attorneys fees, arising from or caused by any toxic or hazardous substances
or chemicals, as those terms are defined by applicable environmental health or
safety laws or regulations, which are used in performance of this Agreement by
GCS, present in Scrap disposed of or destroyed by GCS, or present on any of the
Facilities in or during GCS’s performance of this Agreement. GCS will maintain
compliance of the Facility with all applicable laws and have all necessary
permits, operating licenses or authorizations necessary to operate its
Facilities under applicable environmental safety or health laws or regulations.
WJ is solely responsible for environment compliance on its facilities.

20.7 Waiver. The failure of any Party
to enforce, at any time, or for any period of time, any provision of this
Agreement, to exercise any election or option provided herein, or to require,
at any time, performance of any of the provisions hereof, will not be construed
to be a waiver of such provision, or in any way affect the validity of this
Agreement, or any part thereof, or the right of any Party thereafter to enforce
each and every such provision.

20.8 Compliance with Laws. GCS agrees
to comply with all applicable and reasonable local, state, and Federal laws and
executive orders and regulations and agrees to defend, indemnify and hold WJ
harmless against any loss, cost, damage, expense (including attorney’s fees),
or liability by reason of GCS’s violation.

20.9 Independent
Contractor. It is agreed that GCS is an independent contractor for the
performance of services under this Agreement, and that for accomplishment of
the desired result WJ is to have no control over the methods and means of
accomplishment thereof, except as specifically set forth in this Agreement.
There is no relationship of agency, partnership, joint venture, employment or
franchise between the Parties.

20.10
Export Control and Governmental Approval.

(a)
The Parties acknowledge that each must comply with all applicable rules and
laws in the performance of their respective duties and obligations including,
but not limited to, those relating to restrictions on export and to approval of
agreements. GCS will be responsible for obtaining and maintaining all approvals
and licenses, including export licenses, permits and governmental
authorizations from the appropriate governmental authorities as may be
required, to enable such GCS to fulfill its obligations under this Agreement.

(b)
Each Party agrees that, unless prior written authorization is obtained from the
United States Bureau of Industry and Security, it will not export, re-export,
or transship, directly or indirectly, any products or technical information
that would be in contravention of the Export Administration Regulations then in
effect as published by the United States Department of Commerce.

20.11 Non-Solicitation of
Employees.

(a)
During the term of this Agreement, and for a period of six (6) months following
expiration or termination, neither WJ nor GCS shall solicit any employee of the
other who is or was employed by any organizational unit of the other Party
involved with the performance of this Agreement for employment, either directly
through any of its employees, or indirectly through any agent or third party
such as an recruiting agency or headhunter; provided, however, that if any such
employee first contacts a Party seeking employment, the restrictions of this
section shall not apply.

(b)
Before making an offer of employment to any individual who is or was employed
by any organizational unit of the other Party involved with the performance of
this Agreement, a Party shall provide notice of its intent to make such an

 

offer to
the Project Manager of the other Party, and the Parties shall then discuss the
circumstances which led to the Party’s potential employment offer and the
impact on their business relationship should any offer be made by the Party and
accepted by such individual. Should a Party fail to comply with this
obligation, such Party shall pay the other Party for the reasonable costs the
other Party incurs in hiring a qualified replacement for such individual.

20.12 Force Majeure.
Notwithstanding the insurance requirements under Section 14.6 of this
Agreement, neither Party shall be liable to pay damages during the term of this
Agreement for any delay or failure in performance, provided such delay or
non-performance is due to circumstances outside its reasonable control,
including but not limited to, decrees or restraints of government, acts of God
or nature, strikes or other labor disturbances, war, riot, sabotage, fire,
earthquake, flooding, power failures or any other cause which cannot reasonably
be controlled by such party (a “Force Majeure Event”). However, the aforesaid
shall apply with the restriction that the Party not claiming the Force Majeure
Event shall be entitled to terminate this Agreement in writing if the delay or
nonperformance of the other Party as a result of the Force Majeure Event should
last for more than 3 months.  For a Party
to claim a Force Majeure Event hereunder, it must notify the other Party within
five (5) days of commencement of the Force Majeure Event specifying the nature
of the Force Majeure Event and the anticipated length of the Force Majeure
Event.  The Party claiming a Force
Majeure Event shall use commercially reasonable efforts to investigate,
eliminate or prevent the Force Majeure Event so as to continue performing its
obligations under this Agreement.  Any
delay or non-performance due to Force Majeure Event will result in a pro-rated
delay of the minimum purchase requirements, pro-rated for the time of
non-performance or delay. Under no circumstances shall a Force Majeure event
delay WJ’s obligation to pay GCS.

20.13 Section Titles. Section titles
as to the subject matter of particular sections herein are for convenience only
and are in no way to be construed as part of this Agreement or as a limitation
of the scope of the particular sections to which they refer.

20.14 Counterparts and
Facsimiles.  This Agreement may be
executed in several counterparts and by facsimile, each of which shall be
deemed to be an original, but all of which shall constitute one and the same
instrument.

 

IN WITNESS
WHEREOF, the Parties have caused this Agreement to be signed by duly authorized
representations on the date first set forth above.

	
  GLOBAL COMMUNICATION SEMICONDUCTORS, INC.

  	
  WJ COMMUNICATIONS, INC.

  
	
   

  	
   

  	
   

  
	
  BY:

  	
  /s/ Jerry
  Curtis

  	
   

  	
  BY:

  	
  /s/ Mark Knoch

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TITLE:

  	
       President
  & CEO

  	
   

  	
  TITLE:

  	
     VP OPERATIONS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Bruce Diamond

  
	
   

  	
   

  	
   

  	
   

  	
  President & CEO

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
									

 

APPENDIXES

APPENDIX A- WJ PROCESSES TO BE PROVIDED TO GCS

APPENDIX B- LIST OF PRODUCTS (WAFERS)

APPENDIX C- VOLUMES AND PRICES FOR WAFERS

APPENDIX D- PROCESS RESPONSIBILITIES AND TIME
SCHEDULE

 

Appendix A

WJ Processes to be Provided to GCS

The
table below contains the valid WJ Process Specifications. Each modification or
change of a parameter leads to a new release of the Process Specification.  This change must be performed in written form
and signed by GCS and WJ, respectively. 

	
  

  	
   

  	
  Full

  	
   

  	
  Derivative

  
	
  Description

  	
   

  	
  Development

  	
   

  	
  Development

  
	
  MESFET
  0.5um gate

  	
   

  	
  X

  	
   

  	
   

  
	
  MESFET
  0.7um gate

  	
   

  	
  X

  	
   

  	
   

  
	
  HFET
  0.5um gate

  	
   

  	
  X

  	
   

  	
  X

  
	
  HBT 5V
  InGaP

  	
   

  	
  X

  	
   

  	
   

  
	
  HBT 28V
  InGaP

  	
   

  	
   

  	
   

  	
  X

  

 

PCM Measurement Conditions,
Pass/Fail-Selection

GCS will perform a PCM test at all lots, each wafer, performed on the
process control monitor structure (PCM) located in the scribe line or special
test inserts. 

A wafer will
be classified as having passed if each individual pass/fail parameter listed in
the process specification passes on **% of the mutually agreed upon number of
test sites. The pass/fail limits for electrical tests performed on the PCM for
each wafer are listed in the relevant process documentation.

If a Wafer fails the acceptance criteria, the Wafer may not be shipped
to WJ unless WJ requests that it be shipped.

Appendix B

List of Products (Wafers) 

	
  Products

  	
   

  	
  Process

  	
   

  	
  Die X(um)

  	
   

  	
  Die Y(um)

  	
   

  	
  Area(mm^2)

  	
   

  	
  Target Yield

  	
   

  
	
  *****

  	
   

  	
  MESFET

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  ****

  	
   

  
	
  *****

  	
   

  	
  MESFET

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  ****

  	
   

  
	
  *****

  	
   

  	
  MESFET

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  ****

  	
   

  
	
  *****

  	
   

  	
  MESFET

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  ****

  	
   

  
	
  *****

  	
   

  	
  MESFET

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  ****

  	
   

  
	
  *****

  	
   

  	
  MESFET

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  ****

  	
   

  
	
  *****

  	
   

  	
  MESFET

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  ****

  	
   

  
	
  *****

  	
   

  	
  MESFET

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  ****

  	
   

  
	
  *****

  	
   

  	
  MESFET

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  *****

  	
   

  	
  MESFET

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  *****

  	
   

  	
  MESFET

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  *****

  	
   

  	
  HFET

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  *****

  	
   

  	
  HFET

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  *****

  	
   

  	
  HFET

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  *****

  	
   

  	
  Passive

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  *****

  	
   

  	
  HBT 5V

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  *****

  	
   

  	
  HBT 5V

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  *****

  	
   

  	
  HBT 5V

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  *****

  	
   

  	
  HBT 5V

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  *****

  	
   

  	
  HBT 5V

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  *****

  	
   

  	
  HBT 5V

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  *****

  	
   

  	
  HBT 5V

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  *****

  	
   

  	
  HBT 5V

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  *****

  	
   

  	
  HBT 5V

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  *****

  	
   

  	
  HBT 5V

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  *****

  	
   

  	
  HBT 5V

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  

 

 

Appendix C

Volumes and Prices for Wafers

All prices under this agreement are to be quoted, billed, and paid for
in U.S. Dollars. USD ($). Prices
listed below are quoted per wafer and include the raw wafer cost and all other
costs, but not IC probing.

 

	
  

  	
   

  	
  Price/Wafer by Process Technology

  	
   

  
	
  Semiannual Quantity

  	
   

  	
  MESFET

  	
   

  	
  HFET

  	
   

  	
  5V HBT

  	
   

  	
  28V HBT

  	
   

  
	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  
	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  	
  *****

  	
   

  

 

Volume pricing
will be established using the values in the pricing table based on the 6-month
forecast.  The price band will be set for
6-month periods of time on January 1st and July 1st of each year. All volume numbers are based on
the total four (4) inch wafer starts in the 6-month forecast period. Minimum
purchasing volume will for the first year be based on ***** wafers.

Lead-Times

Process lead-times from GCS will be ***
days/level.  Device mix releases will be
started in the week following receipt.

Hot lots (if lots in-line
exceed 3/1) have a ***** cost factor. 
Cycle time on hot lots is (GCS – **** days/level)

Hand-Carry lots require
written acceptance of the wafer fab, and have a **** cost factor.  Cycle time on hand-carry lots is (GCS – ****
days/level)

Priority
lots are subject to acceptance by GCS according to their internal limits.

 

Appendix D

Process Responsibilities and Time Schedule

1.               WJ agrees to pay the following NRE to GCS
with **% payable upon completion of the Process freeze and the remaining
**% payable upon completion of the first yielding qualification lot per
Process.

Process                                                                                                                                      Amount Payable

MESFET $**** (50% payable 6 months from contract
date assuming completion therein) HFET $**** (50% payable 6 months from
contract date assuming completion therein) 5V HBT $**** (50% payable 8 months
from contract date assuming completion therein) 28V HBT $**** (50% payable 9
months from contract date assuming completion therein)

1                                          WJ is
responsible to provide all documentation and engineering support to enable GCS
to use WJ’s processes in its manufacture of the Wafers.

2                                          WJ is
responsible for direct material cost of epi-wafers, qualification wafers,
masks, and analysis required for the manufacture of the Wafers.

3                                          WJ is
responsible for reliability and qualification test costs for all WJ’s products.

4                                          WJ is
responsible for WJ tools, WJ de-installation costs, and WJ tool modifications
required for the manufacture of the Wafers.

5                                          WJ is
responsible for providing photomask sets or GDS II data of acceptable quality
for each device to GCS.  If any
photomasks require replacement prior to use by GCS, WJ is responsible for
replacement.  Any future photomask replacement
due to normal wear or damage is the responsibility of GCS.

6                                          Each Party
is responsible for the travel and related expenses for their respective team
members.

7                                          GCS is
responsible for all internal process development costs at both locations.

8                                          GCS is
responsible for processing wafers and supporting tools to implement the
manufacture of the Wafers.

9                                          GCS is
responsible for replacement wafer costs for qualification failures due to GCS’s
fault.

10                                     GCS is
responsible for tool installation, government permits, and facility costs.

11                                    GCS is
responsible for tools ongoing maintenance and operating costs.

12                                    GCS is
responsible for any tools needed strictly for capacity expansion associated
with the manufacture of the Wafers.

13                                    WJ will consign the below list of equipment which has been
determined needed to install the process capability at GCS (which equipment
will be returned to WJ upon termination or cancellation of this Agreement by
either Party for any reason).  It is GCS’s
responsibility to cover the cost of installation of this equipment and to
maintain the equipment to the same conditions as it was delivered.  GCS is also responsible for replacement cost
insurance for this equipment.  Any
additional requests for equipment must be completed within ** days of the
signing of this agreement. GCS shall be responsible for the costs of preparing
and filing any UCC statements required by WJ.

*******************************************

*****************************************

********************************************

*******************************************

********************************************

*********************************************

*******************************************

*********

 

*******************************************

*****************************************

********************************************

*********************************

***************************************

*******************************************

 

 

15.
The initial high level time schedule for successfully establishing the Process
shall be as follows and more detailed time schedules shall be provided in the
future as approved by WJ in writing which shall be deemed incorporated into and
a part of this Agreement : 

	
  Equipment Transfer Complete

  	
   

  	
  ****************

  
	
  MESFET Process
  Frozen

  	
   

  	
  ***************

  
	
  HBT Process
  Frozen

  	
   

  	
  ************

  
	
  MESFET Risk
  Wafer Starts

  	
   

  	
  ************

  
	
  HBT Risk Wafer
  Starts

  	
   

  	
  **********

  
	
  MESFET Process
  Qualified

  	
   

  	
  **********

  
	
  HBT Process
  Qualified

  	
   

  	
  ***********

  

 

Appendix E

Appendix E – 
Qualification Requirements

Process Qualification requirements:  each
process technology has specific failure modes unique to that technology and/or
methodology. Other failure modes are generic to materials & structures
common in all semiconductor processes.  
Process Qualification requires evaluation of the following:

·                  Failure
modes specific to the individual technology

·                  Three-temperature
DC life test

·                  RF
operational endurance test

·                  Passive
element tests

·                  Mechanical integrity tests

Documents containing very detailed
requirements for MESFET, HFET, and 5V HBT processes have been previously
provided to GCS.

Product Qualification
requirements: the
following products cover the combinations of process technologies and packaging
materials/methods. Each product listed will require a full Product
Qualification.   

	
  Process

  	
   

  	
  Products to qualify

  	
   

  
	
  MESFET

  	
   

  	
  *************

  	
   

  
	
   

  	
   

  	
  *************

  	
   

  
	
   

  	
   

  	
  ***********

  	
   

  
	
  5V HBT

  	
   

  	
  ****************

  	
   

  
	
   

  	
   

  	
  *****************

  	
   

  
	
  HFET

  	
   

  	
  **************

  	
   

  

 

Full Product Qualification testing consists
of performing and passing the following tests: 

	
  Test

  	
   

  	
  # lots tested

  	
   

  	
  reference

  	
   

  
	
  HTOL (1000
  hours)

  	
   

  	
  3

  	
   

  	
  JESD22-A108

  	
   

  
	
  HAST

  	
   

  	
  3

  	
   

  	
  JESD22-A110

  	
   

  
	
  Autoclave

  	
   

  	
  3

  	
   

  	
  JESD22-A102

  	
   

  
	
  Temperature
  cycle

  	
   

  	
  3

  	
   

  	
  JESD22-A104

  	
   

  
	
  HTB

  	
   

  	
  1

  	
   

  	
  JESD22-A103

  	
   

  
	
  ESD

  	
   

  	
  3

  	
   

  	
  MIL-STD883, method 3015

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00113-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00113-of-00352.parquet"}]]