1
EXHIBIT 10.38
EXECUTION COPY
TRANSITIONAL SERVICES AGREEMENT
This Transitional Services Agreement ("Agreement") is made and entered
into this 13th day of April, 1999 (the "Closing Date") by and between Samsung
Electronics Co., Ltd., a corporation organized under the laws of the Republic of
Korea ("Samsung"), and Xxxxxxxxx Korea Semiconductor Ltd., a corporation
organized under the laws of the Republic of Korea ("Fairchild"). Either Samsung
or Fairchild may be referred to herein as a "Party" or together as the
"Parties," as the case may require.
RECITALS
WHEREAS, Samsung and Xxxxxxxxx Semiconductor Corporation have entered
into a certain business transfer agreement dated as of December 20, 1998
("Business Transfer Agreement") and Xxxxxxxxx Semiconductor Corporation has
assigned its rights thereunder to Fairchild, pursuant to which Fairchild will
acquire all of the Conveyed Assets and assume all of the Assumed Liabilities
(each as defined in the Business Transfer Agreement) upon the terms and
conditions set forth in the Business Transfer Agreement; and
WHEREAS, in order to support the continued and uninterrupted operation
of the Business from the Closing Date, the Parties hereto wish to enter into an
agreement as contemplated and required by the Business Transfer Agreement
whereby Samsung will continue to provide to Fairchild certain of the services
that have been provided by Samsung to the Business (as defined in the Business
Transfer Agreement) prior to the Closing Date, in accordance with the terms and
conditions of this agreement; and
WHEREAS, the execution and delivery of this Agreement is required by
the Business Transfer Agreement and is a condition to the closing of the
transactions contemplated thereunder.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and undertakings contained herein, the Parties hereto, intending to be
legally bound hereby, do agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Unless otherwise defined herein, capitalized
terms used herein shall have the meaning ascribed to such terms in the Business
Transfer Agreement.
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For the avoidance of doubt, "Samsung" shall refer only to Samsung Electronics
Co., Ltd., and shall not refer to any subsidiary or other Affiliate of Samsung
Electronics Co., Ltd.
ARTICLE II
TERM
Section 2.1 Term. The term of this Agreement (the "Transition Period")
shall, with respect to any service provided herein, commence on the Closing Date
and expire on the date that is the three (3) year anniversary of the Closing
Date (the "Expiration Date"), unless terminated on an earlier date pursuant to
Article VII of this Agreement. Fairchild may extend the Transition Period for an
additional six-month period by providing written notice to Samsung of such
extension no later than ninety (90) days prior to the Expiration Date; provided,
however, that in the event of such extension, the Parties shall negotiate the
terms and conditions of the Service or Services to be provided during such
extended term.
ARTICLE III
THE SERVICES
Section 3.1 Services to be provided by Samsung. (a) During the
Transition Period, Samsung shall provide to Fairchild the following services
provided by Samsung and necessary to operate the Business in calendar year 1998
(collectively, the "Services" and, individually, a "Service"), at the costs
specified in Schedule 4.1:
(i) Logistics services and related support as set forth
in Schedule 3.1 (i);
(Service fee: 3,500 million Won)
(ii) Purchasing services and related support as set forth
in Schedule 3.1 (ii);
(Service fee: 150 million Won)
(iii) Sales resources and related support as set forth in
Schedule 3.1 (iii);
(Service fee: 100 million Won)
(iv) Personnel administration services and related support
as set forth in Schedule 3.1 (iv);
(Service fee: 150 million Won)
(v) Financial management services and treasury services
and related support as set forth in Schedule 3.1 (v);
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(Service fee: 300 million Won)
(vi) Employee training services and related support as set
forth in Schedule 3.1 (vi);
(Service fee: 100 million Won)
(vii) Payroll services and related support as set forth in
Schedule 3.1 (vii);
(Service fee: N/A)
(viii) Travel services and related support as set forth in
Schedule 3.1 (viii);
(Service fee: N/A)
(ix) Intellectual property maintenance services and
related support as set forth in Schedule 3.1 (ix);
(Service fee: 30 million Won)
(x) Export/import services and related support as set
forth in Schedule 3.1 (x);
(Service fee: 150 million Won)
(xi) Risk management services and related support as set
forth in Schedule 3.1 (xi);
(Service fee: 710 million Won)
(xii) Insurance administration services and related support
as set forth in Schedule 3.1(xii);
(Service fee: 5 million Won)
(xiii) Immigration services and related support as set forth
in Schedule 3.1 (xiii)
(Service fee: 5 million Won)
(xiv) Research and development, quality assurance and test
services as set forth in Schedule 3.1 (xiv); and
(Service fee: 1,200 million Won)
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(xv) Information technology services as set forth in
Schedule 3.1 (xv).
(Service fee: N/A)
(b) The Schedules setting forth the Services to be provided for
hereunder identify a principal department and position of a person within that
department (the "Contact") for each category of Service. Samsung will ensure
that each Contact remains available to consult with Fairchild on the respective
Service and has the requisite authority to resolve day-to-day issues with
Samsung that may arise during the Transition Period, including, without
limitation, issues relating to the extent or quality of a Service. If a Contact
changes prior to the Expiration Date, Samsung will provide Fairchild notice of
such change. Samsung will provide to each Contact a copy of this Agreement and
notice of the scope of its respective Service.
(c) Any change in the provision of Services hereunder that
would require a material change in the method of operation of the Business shall
be subject to the prior review of Fairchild and to Xxxxxxxxx'x consent, which
shall not be unreasonably withheld.
(d) The parties hereto agree to observe and perform their
respective obligations set forth in Schedule 3.1 (d) hereto.
Section 3.2 Terms of Service.
(a) The attached Schedules of Services and costs are subject to
change only upon the Parties' mutual written consent. To the extent a Schedule
is incomplete as of the date hereof in describing a Service, the Parties shall
use good faith efforts to complete such Schedule as promptly as practicable. Any
element of a Service reflected on any such amended Schedule shall be deemed a
part of the "Service" as if set forth on such Schedule as of the date hereof.
(b) Costs and expenses of separation of Fairchild from Samsung
Service(s) provided hereunder at the end of the Transition Period (or, with
respect to Services or elements of Services terminated pursuant to Section
7.1(b)) will be paid and borne (i) by Samsung, to the extent Samsung personnel
is required, (ii) equally by Samsung and Fairchild to the extent that any
third-party assistance is required and (iii) by Fairchild, to the extent
Fairchild or Xxxxxxxxx Semiconductor Corporation personnel is required; provided
that, under any of clauses (i), (ii) or (iii), neither Party will be relieved of
any obligation it otherwise has under this Agreement or any other agreement
entered into in connection with the closing of the Business Transfer Agreement.
Samsung agrees to cooperate as reasonably requested by Fairchild in order to
effectuate such separation.
Section 3.3 Additional Services. (a) In addition to the
specific services described above, the Parties hereto acknowledge that there may
be additional services (other than information technology and hardware services,
security services and related services) which have not been identified herein
but which have historically been provided by Samsung and which are necessary to
operate the Business prior to the Closing Date and which shall continue to be
required or desired by Fairchild until the termination of this Agreement, or
such
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later date as the Parties may agree. If, within one year of the Closing Date,
any such additional services are identified and requested by Fairchild, Samsung
shall provide such other services at no extra cost to Fairchild in a manner
consistent with the other Services.
(b) If within one year of the Closing Date, Fairchild shall
identify and reasonably request Samsung to provide any additional service which
has not historically been provided by Samsung to the Bucheon Facility in
connection with the Business (a "New Service"), Samsung shall provide such New
Service if Samsung consents to the provision of such New Services, which consent
shall not be unreasonably withheld, at a cost per service to be negotiated in
good faith by Samsung and Fairchild.
(c) If within one year of the Closing Date, Fairchild shall
identify any services that were provided to the Business in calendar year 1998,
and are not being provided to the Business hereunder or under third-party
agreements (that have not been modified or terminated by Fairchild), Samsung
shall use its Best Efforts to provide assistance to Fairchild to secure the
benefits of such services on terms substantially similar to those enjoyed by the
Business prior to the Closing Date.
Section 3.4 Restrictions. The Parties covenant and agree that
Fairchild shall, as promptly as practicable after the Closing Date, at its sole
cost and expense, lease one or more servers necessary to operate the Business
from an independent third party with the reasonable assistance of Samsung.
ARTICLE IV
PAYMENT AND INVOICE
Section 4.1 Service Fees.
(a) The fees payable by Fairchild to Samsung per year for the
Services shall be as set forth in Section 3.1 (the "Service Fees"). Costs of New
Services shall be payable by Fairchild in addition to the Service Fees.
Notwithstanding anything to the contrary contained herein, Fairchild shall not
be charged under this Agreement for any Service that is specifically required to
be performed under any other agreement between Samsung and Fairchild and any
such other Service shall be performed and charged for in accordance with the
terms of such other agreement.
(b) In the event that a Service or New Service commences,
expires or terminates on any day other than the first day of a calendar month,
the fee for such Service or New Service shall be calculated on a pro rata basis
based on the actual number of days during which the Service was provided and a
month of 30 days.
(c) Notwithstanding anything to the contrary, the Service Fees
and any fees payable for any New Service shall be subject to an upward
adjustment on the first and second anniversary of the Closing Date by an amount
that reflects the percentage change in the U.S.
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Consumer Price Index published since the Closing Date and the first anniversary
of the Closing Date, respectively.
Section 4.2 Payment.
(a) Subject to Section 4.1(a), Samsung shall invoice the
Service Fees in twelve equal monthly installments in arrears within fifteen (15)
calendar days of the end of the month in question. Fairchild shall pay the
amount invoiced by Samsung and any sales, use value added, excise or similar
taxes applicable to the provision of services covered by this Agreement
hereunder in full within thirty (30) calendar days of the date of receipt of
Samsung's tax invoice. Fairchild shall supply Samsung with an appropriate tax
exemption certificate. Unless otherwise agreed, all payments to be made under
this Agreement shall be invoiced and paid in U.S. Dollars.
(b) The Parties acknowledge and agree that with respect to any
services to be provided from any party other than Samsung, Fairchild shall
contract directly with, and remit payment directly to, such party. Samsung shall
promptly reimburse Fairchild for any costs incurred by Fairchild during the term
of this Agreement for services provided by third parties (other than Samsung
Data Systems) that would not, consistent with Past Practices, be reflected in
the audited statements of income and operating expenses of the Business.
Section 4.3 Interest on Late Payment. If Fairchild fails to
make any payment due hereunder by the date it is due, Fairchild shall pay to
Samsung, in addition to the amount of such payment due, a late charge of
one-twentieth of one percent (1/20%) of the outstanding amount per day from the
due date of the payment until finally paid.
ARTICLE V
WARRANTIES
Section 5.1 Express Warranty. Samsung warrants that the
Services provided under this Agreement shall be of substantially the same type
and quality (including without limitation, staffing (including qualification,
professionalism, training, experience level and hours of employment), manner and
dedication of equipment, incurrence of overtime and out-of-pocket expenses and
additional fees) as have been provided in connection with the Business during
calendar year 1998.
Section 5.2 Disclaimer. OTHER THAN THE WARRANTY CONTAINED IN
SECTION 5.1 OF THIS AGREEMENT, SAMSUNG MAKES NO REPRESENTATIONS OR WARRANTIES,
EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE SERVICES, INCLUDING, WITHOUT
LIMITATION, ANY REPRESENTATION OR WARRANTY AS TO SUITABILITY OR ADEQUATENESS FOR
THE OPERATION OF THE BUSINESS BY FAIRCHILD.
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ARTICLE VI
INDEMNITY- LIMITATION OF LIABILITY
Section 6.1 Indemnity .
(a) Each Party (the "Indemnifying Party") shall indemnify the
other Party (the "Indemnified Party") and hold it harmless from and against
any loss, demand, liability, claim, cost or expense of whatever kind
(collectively, "Damages") arising from and incurred by the Indemnified Party,
its Affiliates, or any of their respective directors, officers, employees or
representatives due to any willful misconduct, negligence or material breach of
this Agreement by the Indemnifying Party.
Section 6.2 No Consequential Damages. In no event shall either
Party be liable for any indirect, special, incidental, or consequential damages
resulting from the other Party's performance or failure to perform under this
Agreement, or the furnishing, performance, or use of any goods or services sold
pursuant hereto, whether due to breach of contract, breach of warranty,
negligence or otherwise, regardless of whether the nonperforming Party was
advised of the possibility of such damages or not.
ARTICLE VII
TERMINATION
Section 7.1 Termination.
(a) This Agreement shall terminate on the Expiration Date
unless earlier terminated as follows:
(i) by mutual written agreement of the Parties;
(ii) by either Party if (A) the other Party is
the subject of a bankruptcy, corporate
reorganization or composition petition filed
in a court of competent jurisdiction,
whether voluntary or involuntary, which
petition in the event of an involuntary
petition is not dismissed within thirty (30)
days; (B) if a receiver or trustee is
appointed for all or a substantial portion
of the assets of the other Party; or (C) if
the other Party makes an assignment for the
benefit of its creditors; or
(iii) at the written election of the non-breaching
Party in the event of a material breach or
default by a Party of its obligations
hereunder, which default shall not have been
cured within thirty (30) calendar days after
written notice is provided by the
non-breaching Party to the breaching Party.
For purposes of this section, material
breach shall mean a breach that would
reasonably be expected to result in a
serious adverse effect on the non-breaching
Party's business operations related to the
Services.
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(b) Fairchild may terminate this Agreement with respect to any
Service(s) or any element(s) of a Service provided pursuant to this Agreement on
ninety (90) days prior written notice to Samsung, unless otherwise specified in
the Schedules. Upon such termination, Fairchild shall no longer be obligated to
pay Samsung the Service Fees attributable to a cancelled Service following the
effective termination date of such Service(s) provided that Fairchild fully pays
any and all Service Fees, charges or other similar payment due and accrued in
connection with Service(s) provided up to and including the effective
termination date. If an element of a Service is terminated pursuant to this
Section 7.1(b), the Parties shall negotiate in good faith to determine a
reduction in the Service Fees reflecting such terminated element.
(c) No termination of this Agreement (including any early
termination of a Service or an element of a Service pursuant to paragraph (b)
above) shall discharge, affect or otherwise modify in any manner the rights and
obligations of the Parties hereto which have accrued or have been incurred prior
to such termination, including, without limitation, the obligation of Fairchild
to pay Samsung any and all amounts payable hereunder for, or related to, the
Services provided prior to such termination. The provisions of Article 6 and
Sections 7.1(c), 8.1, 8.2, 10.1, 10.2, 10.7, 10.9, 10.11 and 10.16 shall
survive the termination of this Agreement for any reason.
ARTICLE VIII
CONFIDENTIALITY
Section 8.1 Confidentiality. Samsung and Fairchild agree that
any Confidential Information (as defined in the Confidentiality Agreement
executed between Samsung Electronics Co., Ltd. and Xxxxxxxxx Semiconductor
Corporation on September 18, 1998) each Party discloses, generates or otherwise
acquires under this Agreement, as the case may be, shall be treated in
accordance with the terms and conditions of the Confidentiality Agreement.
Samsung and Fairchild further agree that, in the event the Confidentiality
Agreement expires prior to termination or expiration of this Agreement or any
Service hereunder, the terms and conditions of the Confidentiality Agreement
shall continue to apply with respect to any Confidential Information disclosed,
generated or otherwise acquired under this Agreement.
Section 8.2 Ownership and Maintenance of Data. All records,
data files (and the data contained therein), input materials, reports and other
materials received, computed, developed, processed or stored for Fairchild by
Samsung (collectively the "Data") pursuant to this Agreement after the Closing
Date will be the exclusive property of Fairchild, and Samsung shall not possess
any interest, title, lien or right in connection therewith, provided, however,
that Samsung shall have the right to keep a copy of any data file that contains
information related to the Business and information related to other businesses
of Samsung or information related to both the Business and other businesses of
Samsung. Samsung shall safeguard the Data to the same extent it protects its own
similar materials, but in no case in an unreasonable manner. Data shall not be
utilized by Samsung for any purpose other than in support of Samsung's
obligations hereunder. Neither the Data nor any part thereof shall be disclosed,
sold, assigned, leased or otherwise disposed of to third parties by Samsung or
commercially exploited by or on behalf of Samsung, its employees or agents. If a
Party either
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determines that it is required to disclose any information pursuant to
applicable law or receives any demand under lawful process to disclose or
provide information of the other Party that is subject to the confidentiality
provisions hereof, such Party shall notify the other Party prior to disclosing
and providing such information and shall cooperate at the expense of the
requesting Party in seeking any reasonable protective arrangements requested by
such other Party. Subject to the foregoing, the Party that receives such request
may thereafter disclose or provide information to the extent required by such
law or by lawful process. Upon termination of any Service provided hereunder,
Samsung shall provide Fairchild reasonable access to retained Data for a period
not to exceed three (3) months following said termination whereupon, upon
Xxxxxxxxx'x request, such Data will be transferred to Fairchild at Xxxxxxxxx'x
cost, except in the event of termination by Fairchild under Section 7.1(a) by
reason of Samsung's material breach, in which case, such transfer will be made
at Samsung's cost.
ARTICLE IX
FORCE MAJEURE
Section 9.1 Force Majeure.
(a) A Party is not liable for a failure to perform any of its
obligations under this Agreement insofar as it proves that the failure was due
to force majeure.
(b) Force Majeure within paragraph (a) above may result from
events including, but not limited to, (i) war, whether declared or not, riots,
acts of sabotage, explosions, fires, destruction of equipment/machines, or
inability to obtain raw materials, (ii) natural disasters, such as violent
storms, earthquakes, floods and destruction by lightning, (iii) the intervention
of any Governmental Authority, (iv) boycotts, strikes and lock-outs of all kinds
and work-stoppages and (v) any other cause, whether similar or dissimilar to the
foregoing, beyond the control of the Party claiming the benefit.
(c) A Party seeking relief hereunder shall as soon as
practicable after the force majeure and its effects upon its ability to perform
became known to it give notice to the other Party of such force majeure.
ARTICLE X
MISCELLANEOUS
Section 10.1 Notices. All notices hereunder shall be
sufficiently given for all purposes hereunder if in writing and delivered
personally, sent by documented overnight delivery service or, to the extent
receipt is confirmed, telecopy or other electronic transmission service to the
appropriate addresses or numbers as set forth below.
Notices to Samsung shall be addressed to:
Samsung Electronics Co., Ltd.
Samsung Main Xxxxxxxx
000, 0-Xx, Xxxxxxxx-Xx, Xxxxx-Xx
0
00
Xxxxx, Xxxxx
Attention: Director, Legal Department
Telecopy No.: 000-000-0000
with a copy to:
Xxx, Xxx & Xxx
Hankook Tire Xxxx. 000-00
Xxxxxx-xxxx, Xxxxxxx-xx
Xxxxx 000-000, Xxxxx
Attention: Kap-You Xxx
Telecopy No.: 000-0000-0000
or at such other address and to the attention of such other Person as Samsung
may designate by written notice to Fairchild.
Notices to Fairchild shall be addressed to:
Xxxxxxxxx Korea Semiconductor Ltd.
00-0, Xxxxxx-Xxxx
Xxxxx Xxxxxxxx
Xxxxxx Xxxx, Xxxxxxx Xxxxxxxx
Xxxxx
Attention: President
Telecopy No.: (00 00) 000-0000
with copies to:
Xxxxxxxxx Semiconductor Corporation
000 Xxxxxxx Xxxxxx, M.S. 00-00
Xxxxx Xxxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telecopy No.: (01)(000)000-0000
and to:
Xxx & Xxxxx
000 Xxxxx-Xxxx, Xxxxxxx-Xx
Xxxxx 000-000, Xxxxx
Attention: Y.J. Ro
Telecopy No.: (00 0)-000-0000
or at such other address and to the attention of such other Person as Fairchild
may designate by written notice to Samsung.
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Section 10.2 Governing Law; Consent to Jurisdiction. (a) This
Agreement shall be governed by and construed in accordance with the laws of the
Republic of Korea without reference to the choice of law principles thereof.
Fairchild and Samsung consent to and hereby submit to the non-exclusive
jurisdiction of the Seoul District Court located in the Republic of Korea in
connection with any action, suit or proceeding arising out of or relating to
this Agreement, and each of the Parties irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any claim
that any such proceeding brought in such a court has been brought in an
inconvenient forum.
(b) Notwithstanding the foregoing, if the Parties hereto cannot agree
as to the amount of the adjustment of the Service Fee(s) as provided in Section
7.1(b), the Parties shall resolve their differences in the following manner:
(i) Either Party may refer the adjustment of the Service Fee to
arbitration by Xxxxxx Xxxxxxxx or such other accounting firm mutually acceptable
to the Parties ("Arbitrator"), by giving written notice to the Arbitrator and
the other Party.
(ii) Samsung and Fairchild shall each submit a report to the
Arbitrator indicating the proposed amount of the Service Fee adjustment within
two weeks after the date of the notice set forth in clause (i) above. If either
Samsung or Fairchild fails to submit such a report within such period of time,
the other Party's report will be automatically adopted by the Arbitrator.
(iii) The Arbitrator shall select the report which is closer to
the Arbitrator's calculation of the adjustment within one month after the
submission of the reports. The Arbitrator shall not make any modifications to
the reports submitted by the Parties, but shall select one of the reports as is.
(iv) The Parties shall be bound by the report which is
selected by the Arbitrator as the final decision as to the adjustment.
(v) For the avoidance of doubt, the Parties agree that all of
the Services (other than the terminated Service(s)) provided pursuant to this
Agreement shall continue to be provided during any arbitration hereunder, and
that Fairchild shall continue to be obligated to pay the Service Fee(s),
provided, however, that with respect to any Services Fees then in dispute,
Fairchild shall be required to pay the lesser of the two amounts proposed by the
Parties.
Section 10.3 Effectiveness. The Parties' obligations under this
Agreement are conditioned upon the Closing, the occurrence of which is subject
to various conditions set forth in the Business Transfer Agreement. This
Agreement shall become operative if and when the Closing occurs and shall be
null and void if this Closing does not occur for any reason.
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Section 10.4 Headings: Definitions. The section and article
headings contained in this Agreement are inserted for convenience of reference
only and will not affect the meaning or interpretation of this Agreement. All
references to Sections or Articles contained herein mean Sections or Articles of
this Agreement unless otherwise stated.
Section 10.5 Amendment. This Agreement may not be amended,
modified, superseded, canceled, renewed or extended except by a written
instrument signed by the Party to be charged therewith.
Section 10.6 Waiver; Effect of Waiver. No provision of this
Agreement may be waived except by a written instrument signed by the Party
waiving compliance. No waiver by any Party of any of the requirements hereof or
of any of such Party's rights hereunder shall release the other Party from full
performance of its remaining obligations stated herein. No failure to exercise
or delay in exercising on the part of any Party any right, power or privilege of
such Party shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege preclude any other or further exercise
thereof or the exercise of any other right, power or privilege by such Party.
Section 10.7 Severability. If any provision of this Agreement
or the application thereof to any person or circumstance shall be deemed
invalid, illegal or unenforceable to any extent or for any reason, such
provision shall be severed from this Agreement and the remainder of this
Agreement and the application thereof shall not be affected and shall be
enforceable to the fullest extent permitted by law. A provision which is valid,
legal and enforceable shall be substituted for the severed provision.
Section 10.8 No Third-Party Beneficiaries. Nothing in this
Agreement, express or implied, is intended to or shall confer on any Person
other than the Parties and their respective successors or assigns any rights
(including third-party beneficiary rights), remedies, obligations or
liabilities under or by reason of this Agreement. This Agreement shall not
provide third parties with any remedy, claim, liability, reimbursement, cause of
action or other right in excess of those existing without reference to the terms
of this Agreement.
Section 10.9 Interpretation; Absence of Presumption
(a) For the purposes hereof, (i) words in the singular shall be
held to include the plural and vice versa and words of one gender shall be held
to include the other gender as the context requires, (ii) the terms "hereof,"
"herein," and "herewith" and words of similar import shall, unless otherwise
stated, be construed to refer to this Agreement as a whole (including all of the
Schedules hereto) and not to any particular provision of this Agreement, and
Article, Section, paragraph and Schedule references are to the Articles,
Sections, paragraphs and Schedules to this Agreement unless otherwise specified,
(iii) the word "including" and words of similar import when used in this
Agreement means "including, without limitation," unless the context otherwise
requires or unless otherwise specified, (iv) the word "or" shall not be
exclusive, (v) provisions shall apply, when appropriate, to successive events
and transactions, and (vi) all references to any period of days shall be deemed
to be to the relevant number of calendar days.
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(b) This Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the Party
drafting or causing any instrument to be drafted.
Section 10.10 Counterparts. This Agreement may be executed in
two or more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more counterparts have been
signed by each of the Parties and delivered to the other Party.
Section 10.11 Entire Agreement. This Agreement (including
agreements incorporated herein), the Business Transfer Agreement, the
Confidentiality Agreement and the Schedules and Exhibits hereto contain the
entire agreement between the Parties with respect to the subject matter hereof
and there are no agreements, understandings, representations or warranties
between the Parties other than those set forth or referred to herein.
Section 10.12 Relationship of the Parties. Samsung shall
perform all Services hereunder as an independent contractor. This Agreement does
not create a fiduciary or agency relationship between Samsung and Xxxxxxxxx,
each of which shall be and at all times remain independent companies for all
purposes hereunder. Nothing in this Agreement is intended to make either Party a
general or special agent, joint venturer, partner or employee of the other for
any purpose.
Section 10.13 Assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors and
assigns; provided, however, that no Party will assign its rights or delegate its
obligations under this Agreement without the express prior written consent of
the other Party, except that (i) Xxxxxxxxx may assign its rights hereunder as
collateral security to any bona fide financial institution engaged in
acquisition financing in the ordinary course providing financing to consummate
the transactions contemplated hereby or any bona fide financial institution
engaged in acquisition financing in the ordinary course through which such
financing is refunded, replaced or refinanced and any of the foregoing financial
institutions may assign such rights in connection with a sale of Xxxxxxxxx in
the form then being conducted by Xxxxxxxxx substantially as an entirety and (ii)
Samsung and Xxxxxxxxx each may assign its rights and obligations under this
Agreement to any Entity that succeeds to substantially all of its assets and
liabilities.
Section 10.14 Fulfillment of Obligations. Any obligation of
any Party to any other Party under this Agreement, which obligation is
performed, satisfied or fulfilled by an Affiliate of such Party, shall be deemed
to have been performed, satisfied or fulfilled by such Party.
Section 10.15 Publicity. Neither Party shall, without the
approval of the other Party, make any press release or other public announcement
concerning the terms of the transactions contemplated by this Agreement, except
as and to the extent that any such Party shall be so obligated by law or
pursuant to a lawful request of a government agency.
Section 10.16 Specific Performance. The Parties acknowledge
that, in view of the uniqueness of the subject matter hereof, the Parties would
not have an adequate remedy
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at law for money damages in the event that this Agreement were not performed in
accordance with its terms, and therefore agree that the Parties shall be
entitled to specific enforcement of the terms hereof in addition to any other
remedy to which the Parties may be entitled at law or in equity.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed on their behalf as of the date first written above.
SAMSUNG ELECTRONICS CO., LTD.
By: /s/ Xxx Xxx
---------------------------
Name:
---------------------------
Title:
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XXXXXXXXX KOREA SEMICONDUCTOR
LTD.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------
Title: Executive Vice President
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Schedule 3.1 (i)
Logistics Services and related support
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Item # Transitional Services [KOREAN]
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Onyang Logistics department shall support FKSL in sample [KOREAN]
49 delivery, consistent with past practices, upon request from
168 FKSL; provided that the sample is to be stored at Onyang main
175 warehouse, and is for the purpose of promotion or inspection.
Shipping costs and expenses for samples shall be charged to
FKSL.(e.g.: DHL)
------------------------------------------------------------------------------------------------------------------------------------
169 Samsung shall provide FKSL with support for the operations relating to [KOREAN]
QA out-going inspection.
------------------------------------------------------------------------------------------------------------------------------------
170 Samsung shall issue an outgoing inspection report for a certain [KOREAN]
customers specified by FKSL.
------------------------------------------------------------------------------------------------------------------------------------
171 Onyang Logistics department shall control special-shipping-products [KOREAN]
upon request from FKSL.
------------------------------------------------------------------------------------------------------------------------------------
172 Samsung shall support FKSL in the RMA related operations and process. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
176 Onyang Logistics department shall control FKSL's products whose [KOREAN]
shipping is banned by FKSL.
------------------------------------------------------------------------------------------------------------------------------------
206 FKSL's expenses relating to the use of Onyang Logistics Center is [KOREAN]
covered by TSA service fees.
------------------------------------------------------------------------------------------------------------------------------------
207 Samsung shall maintain the collective insurance and road [KOREAN]
transportation insurance agreements with its transportation companies.
------------------------------------------------------------------------------------------------------------------------------------
208 Samsung shall continue to insure Onyang warehouse against fire. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
1
17
------------------------------------------------------------------------------------------------------------------------------------
209 Samsung shall maintain its transportation dispatch process. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
210 Samsung shall provide repacking services upon request from FKSL. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
212 Samsung shall prepare the shipping forms for FKSL. Cost and expenses [KOREAN]
shall be charged to FKSL.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall provide FKSL with shipping data and relevant [KOREAN]
214 reports with regard to the incoming and outgoing status of FKSL's
products.
------------------------------------------------------------------------------------------------------------------------------------
215 Criteria of other Miscellaneous works relating to logistics shall be [KOREAN]
discussed between the parties.
------------------------------------------------------------------------------------------------------------------------------------
233 Onyang, SSI, SSEG, SSEL and SAPL shall provide FKSL with warehousing [KOREAN]
services.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall compensate FKSL for loss or theft, provided that [KOREAN]
242 such loss or theft occur in Samsung's overseas warehouses or
Onyang warehouse. Amount of compensation shall be consistent with the
rate of insurance.
------------------------------------------------------------------------------------------------------------------------------------
Onyang Logistics department shall maintain the existing service [KOREAN]
252 contracts with transportation companies until FKSL is able to be
independent from Onyang Logistics department.
------------------------------------------------------------------------------------------------------------------------------------
In case of domestic deliveries, Onyang Logistics department shall [KOREAN]
prepare the shipping order, security check slip, invoice and delivery
253 confirmation sheet upon each delivery, and submit the delivery
confirmation sheet signed by customer to FKSL. Samsung shall be
responsible for damages in the event of negligence relating the above
items.
------------------------------------------------------------------------------------------------------------------------------------
254 Onyang Logistics department shall provide FKSL with the stock status [KOREAN]
and shipping reports, upon request from FKSL.
------------------------------------------------------------------------------------------------------------------------------------
2
18
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall settle the issues relating to the customs clearance [KOREAN]
regulation (two entities may not exist in one bonded area) in order
299 to enable FKSL to use its bonded sector, specially authorized by
customs office, at Onyang Logistics center. FKSL's bonded warehouse
shall be effective as of the day after the Closing date.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall allocate 50% of the total rack capacity of Onyang [KOREAN TRANSLATION]
warehouse to FKSL, and in case the maximum capacity of the 50% is
[Korean] reached, Samsung shall notify FKSL of it. After such a
notice, Samsung shall be obligated to process additional 5% (of the
total rack capacity) stock only.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall present the Logistics related costs per each box [KOREAN]
[Korean] processed to FKSL monthly. FKSL shall notify Samsung at least
3 months prior to the date of termination of service.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall accept up to l0% difference in standard progress rate in [KOREAN]
[Korean] connection with shipping of products. Samsung shall assign up to 3
processing lines for FKSL products 3 days from the end of each month.
------------------------------------------------------------------------------------------------------------------------------------
FKSL products shall be separately stored at Onyang warehouse. Samsung [KOREAN]
[Korean] shall have FKSL logo printed on the FKSL product containers that will
300 be stored from the day after the Closing date. Onyang Logistics
department shall continue to order secondary materials for FKSL, who
shall issue the specifications and be charged for the costs.
------------------------------------------------------------------------------------------------------------------------------------
Delivery contracts and system from FKSL to each business destination [KOREAN]
[Korean] shall be maintained by Samsung consistent with past practice, and the
costs and expenses shall be paid by FKSL.
------------------------------------------------------------------------------------------------------------------------------------
3
19
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall handle the customs clearance for FKSL, and charge FKSL [KOREAN]
[Korean] for the actual costs and expenses monthly. Onyang Logistics department
205 shall, unless there are quality or customs problem, make efforts to
211 maintain TAT of 2 days from the date of shipping request.
213 In case of rush delivery requested by FKSL, provided that Samsung
agrees to accept such requests, Samsung shall run the shipping process
on weekends or holidays.
------------------------------------------------------------------------------------------------------------------------------------
FKSL shall be responsible for air freight. [KOREAN]
[Korean] FKSL shall be responsible for RMA relating to its own
products From the day after the Closing date.
------------------------------------------------------------------------------------------------------------------------------------
4
20
Schedule 3.1(ii)
Purchasing Services and related support
------------------------------------------------------------------------------------------------------------------------------------
Item # Transitional Services [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall support FKSL in work procedures relating to Photo-Mask [KOREAN]
16 outsourcing contracts and price negotiations until FKSL makes
contracts with outsourcing companies independently.
------------------------------------------------------------------------------------------------------------------------------------
67 FKSL shall make contracts for raw materials supply with all equipment [KOREAN]
makers and agencies.
------------------------------------------------------------------------------------------------------------------------------------
For 'joint-purchase' items, Samsung shall, upon request from FKSL, [KOREAN]
80 support FKSL in the price contracts with suppliers and share relevant
information with FKSL.
------------------------------------------------------------------------------------------------------------------------------------
203 Samsung shall continue to purchase the non-buried layer sub- [KOREAN]
305 wafers for EPI on behalf of FKSL
------------------------------------------------------------------------------------------------------------------------------------
In support of outsourcing, SDS shall support FKSL in GLONETS, and [KOREAN]
277 provide assistance in connection with L/C applications until the end
of June, 1999, with its expenses paid by FKSL. (Refer to the Import
Services Agreement)
------------------------------------------------------------------------------------------------------------------------------------
Upon request from FKSL during the 3 years of Transitional Services, [KOREAN]
Samsung shall provide information on the unit costs and the terms and
301 conditions under the materials supply contracts. In addition, in case
FKSL is unable to purchase a small quantity of materials, Samsung
shall assist FKSL so that FKSL may be able to purchase such materials
upon terms consistent with Samsung's past practices.
------------------------------------------------------------------------------------------------------------------------------------
5
21
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall provide FKSL with services relating to L/C applications, [KOREAN]
insurance applications and transportation, until FKSL establishes its
303 own system, which is expected to be the end of June, 1999, pursuant to
the Import Services Agreement.
------------------------------------------------------------------------------------------------------------------------------------
6
22
Schedule 3.1(iii)
Sales Resources and related support
------------------------------------------------------------------------------------------------------------------------------------
Item # Transitional Services [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall support FKSL's business transactions with each SEC [KOREAN]
225 business divisions in the way FKSL may continue to supply its
products, without qualification process, by changing the name of
vendor on the supplier approval sheet to FKSL.
------------------------------------------------------------------------------------------------------------------------------------
FKSL sales personnel shall be allowed to visit domestic Samsung [KOREAN]
251 offices or overseas branches and offices for business purposes;
provided that they should obtain a long-term entrance permit from
Samsung in advance.
------------------------------------------------------------------------------------------------------------------------------------
259 Samsung shall produce data books for FKSL at FKSL's costs and expenses [KOREAN]
32 until FKSL makes its own, and distribute them to each distributor
33 until FKSL sets up an independent shipping system.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall produce News Letters for FKSL at FKSL's costs and [KOREAN]
expenses, until FKSL makes its own, and distribute them to each
260 distributor until FKSL sets up an independent shipping system; FKSL is
responsible for the content of News Letters after the Closing date.
FKSL will pay the cost incurred in actual product.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall produce promotion materials for FKSL at FKSL's costs and [KOREAN]
261 expenses, until FKSL makes its own, and distribute them to each
distributor until FKSL sets up all independent shipping system.
------------------------------------------------------------------------------------------------------------------------------------
7
23
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall place advertisements for FKSL in magazines and [KOREAN]
262 newspaper, at FKSL's costs and expenses, until FKSL can do such
activities independently.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall assist FKSL with support in making arrangements for [KOREAN]
263 exhibitions and relevant promotion tools, at FKSL's costs and
expenses, until FKSL can do such activities independently.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall assist FKSL with purchasing of gifts for customers, at [KOREAN]
264 FKSL's costs and expenses, until FKSL can produce its own
independently.
------------------------------------------------------------------------------------------------------------------------------------
265 Samsung shall allow FKSL to use Samsung's Internet Home Page until [KOREAN]
FKSL can set up its own Home Page
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall allow FKSL to use Samsung's rental office at Kumi and [KOREAN]
Add maintain adequate office space, provided that FKSL shall pay the
expenses.
------------------------------------------------------------------------------------------------------------------------------------
8
24
Schedule 3.1(iv)
Personnel Administration Services and related support
------------------------------------------------------------------------------------------------------------------------------------
Item # Transitional Services [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall not issue a permanent entrance permission to any FKSL [KOREAN]
personnel; instead, Samsung shall provide long-term entrance
59 permission cards to FKSL personnel who are authorized by Samsung to
have reason to stay at Samsung's business sites for an extended period
of time
------------------------------------------------------------------------------------------------------------------------------------
While Samsung shall support FKSL in IT relating to the ID card related [KOREAN]
91 systems, FKSL shall be responsible for making its own ID card as soon
320 as possible; provided that Samsung shall allow FKSL to use existing ID
cards with FKSL logo attached on them for 2 months after the Closing
date.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall make efforts, by the end of February, 1999, to transfer [KOREAN]
its personnel to FKSL to the extent necessary for the job performance
of the following areas at the present level: planning, P.R, patent,
285 legal matter, commerce, sales control, domestic sales, overseas sales,
overseas quality management, succession of overseas local employee,
funding, product strategy, technology management, technology strategy,
quality management, human resources planning.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall provide FKSL with information on company policies, [KOREAN]
287 instructions, and electronic systems in connection with human
resources management; as requested to support the PDD Business.
------------------------------------------------------------------------------------------------------------------------------------
291 Samsung shall provide FKSL with the database and know-how [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
9
25
------------------------------------------------------------------------------------------------------------------------------------
concerning employment and recruiting; as requested to support the PDD [KOREAN]
Business.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall make efforts to reconcile the difference between the [KOREAN]
293 data kept by the Department of National Pension Management and the
data kept by FKSL human resources department.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall provide information and materials relating to the [KOREAN]
298 regulations and data concerning employee training; provided that such
information does not violate Samsung's security regulations.
------------------------------------------------------------------------------------------------------------------------------------
10
26
Schedule 3.1(v)
Financial Management Services and Treasury Services and related support
------------------------------------------------------------------------------------------------------------------------------------
Item # Transitional Services [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall transfer computer data concerning from 1994 until the [KOREAN]
57 date of this Agreement accounting, accounting cost and managerial
accounting cost to FKSL.
------------------------------------------------------------------------------------------------------------------------------------
A21 Samsung shall dispatch its personnel to FKSL, upon request, for [KOREAN]
instruction in sales supports and accounting.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall dispatch its personnel to FKSL, upon request, for [KOREAN]
A22 instruction in corporate financial settlements at the end of each
fiscal period.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall have SEC headquarters dispatch its personnel to FKSL, [KOREAN]
A23 upon request, for instruction in settlement of accounts and corporate
taxation at the end of each fiscal period, which Samsung shall give
priority to.
------------------------------------------------------------------------------------------------------------------------------------
FKSL shall dispatch its personnel to Samsung, on demand, for training [KOREAN]
A24 in the domestic asset management and operations. (2 SEC personnel
already transferred to FKSL as of Mar.31,'99)
------------------------------------------------------------------------------------------------------------------------------------
FKSL shall dispatch its personnel to Samsung, on demand, for training [KOREAN]
in the management of foreign exchange and overseas assets. In
A25 addition, Samsung shall allow FKSL to continue to use the asset
management system which will be optimized or modified by Samsung, if
necessary, to enable FKSL to use the system in its normal operations.
------------------------------------------------------------------------------------------------------------------------------------
11
27
------------------------------------------------------------------------------------------------------------------------------------
When FKSL files reports on VAT to Chonan Tax Office and all other [KOREAN]
A26 statutory reporting requirements, FKSL shall be responsible for the
filing, and Samsung shall provide assistance to FKSL in delivery of
documents.
------------------------------------------------------------------------------------------------------------------------------------
Add Samsung shall maintain records of subcon-assembly services (SESS) as [KOREAN]
per past practices. (e.g. : daily report and monthly report)
------------------------------------------------------------------------------------------------------------------------------------
12
28
Schedule 3.1(vi)
Employee Training Services and related support
------------------------------------------------------------------------------------------------------------------------------------
Item # Transitional Services [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
133 Samsung shall provide necessary consultation services, if FKSL is [KOREAN]
in need of recruiting of professional instructors or lectures.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall provide necessary consultation services, if FKSL is [KOREAN]
134 in need of Samsung's quality control related training programs
including the college of quality studies.
------------------------------------------------------------------------------------------------------------------------------------
135 Samsung shall provide necessary consultation services, if FKSL is in [KOREAN]
need of assistance in connection with employee trainings.
------------------------------------------------------------------------------------------------------------------------------------
454 Samsung and FKSL shall cooperate in allowing each other to participate [KOREAN]
500 in utility related seminars; provided that the subjects of such
seminars are not confidential.
------------------------------------------------------------------------------------------------------------------------------------
495 Samsung shall provide FKSL with opportunities to attend Samsung's [KOREAN]
engineers' training classes.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall allow FKSL to participate in the semiconductor [KOREAN]
527 information exchange meeting hosted by the Environmental Safety Group
of Kiheung plant; provided that the subjects of such meetings are not
confidential information.
------------------------------------------------------------------------------------------------------------------------------------
528 Samsung shall provide FKSL with opportunities to attend Samsung's [KOREAN]
training classes relating to environmental safety.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall allow FKSL to participate in the meetings of the [KOREAN]
534 environment protection technology studies, once a month, hosted by the
489 E-CIM Team of the Central Research Center; provided that the subjects
of such meetings are not confidential.
------------------------------------------------------------------------------------------------------------------------------------
13
29
Sechedule 3.1(vii)
Payroll Services and related support
Samsung shall provide ongoing payroll administrative services for any changes to
PDSS database until PDSS moves to Puchon server (such as pay increases and
benefits coverage changes).
14
30
Schedule 3.1(viii)
Travel Services and related support
None available
15
31
Schedule 3.1(ix)
Intellectual Property Maintenance Services and related support
------------------------------------------------------------------------------------------------------------------------------------
Item # Transitional Services [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
With respect to the patent applications, Samsung shall support FKSL in [KOREAN]
421 the relevant tasks until FKSL can carry out such tasks; provided,
however, the support shall be limited to provision of the Patent
search system in support of FKSL's patent applications.
------------------------------------------------------------------------------------------------------------------------------------
Samsung and FKSL shall allow each other to have access to the [KOREAN]
451 patent information; provided that such information is not
confidential.
------------------------------------------------------------------------------------------------------------------------------------
16
32
Schedule 3.1(x)
Export/Import Services and related support
------------------------------------------------------------------------------------------------------------------------------------
Item # Transitional Services [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall continue to provide FKSL with services relating to L/C [KOREAN]
negotiation, shipping and sales accounting operations for 6 months
from the Closing, subject to a one-time extension of 3 additional
58 months after the expiration of the initial period, if necessary;
provided, however, FKSL shall inform Samsung if FKSL intends to
terminate such services from Samsung before the expiration of said 6
month service period.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall support FKSL in arrangements for the invoice, P/L, [KOREAN]
219 transaction details, logo of tax statement of account, business
registration number, and the company name registration; provided,
however, FKSL shall make arrangements for its own document forms.
------------------------------------------------------------------------------------------------------------------------------------
Xxxxxxxxx shall proceed with obtaining EDI ID approval, and Samsung [KOREAN]
220 shall continue to support FKSL in EDI related operations including
bank reports. (1 person in charge of EDI operation has already been
transferred to FKSL)
------------------------------------------------------------------------------------------------------------------------------------
17
33
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall provide FKSL with services concerning foreign exchange [KOREAN]
related tasks, consistent with the Foreign-exchange Management
Services Agreement, as follows:
1) FKSL shall make arrangements for reporting documents.
239 2) Samsung shall carry out registrations and routine tasks.
3) Samsung shall make contracts with outsourcing companies consistent
with past practices, and shall discuss with FKSL in case the rates
should change.
------------------------------------------------------------------------------------------------------------------------------------
Samsung has transferred to FKSL one employee in charge of shipping [KOREAN]
258 operations, who will be responsible for the shipping related tasks of
FKSL.
------------------------------------------------------------------------------------------------------------------------------------
18
34
Schedule 3.1(xi)
Risk management services and related support
------------------------------------------------------------------------------------------------------------------------------------
Item # Transitional Services [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
Samsung and FKSL shall cooperate with each other in connection with
440 visits to plants and exchange of information.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall share with FKSL the information on the standard [KOREAN]
441 registration of Electricity Group, consistent with Samsung's QA
policy, provided that such information concerns System LSI or general
work instructions.
------------------------------------------------------------------------------------------------------------------------------------
442 Samsung shall share with FKSL the energy related information. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
443
444 Samsung and FKSL shall share the information on construction or [KOREAN]
457 installation of the clean-room; provided that such information is
461 limited to general System LSI facility technologies.
------------------------------------------------------------------------------------------------------------------------------------
445 Samsung shall share with FKSL the status of electric facilities. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
446 Samsung shall share with FKSL the data on automatic control equipment. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
447 Samsung shall share with FKSL the application data on electric [KOREAN]
facilities.
------------------------------------------------------------------------------------------------------------------------------------
448 Samsung shall share with FKSL the technical data concerning facility [KOREAN]
management.
------------------------------------------------------------------------------------------------------------------------------------
449 Samsung shall share with FKSL TPM related data. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
19
35
------------------------------------------------------------------------------------------------------------------------------------
450 Samsung shall share with FKSL the excellent examples of improvement. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
452 Samsung shall share with FKSL the technical data concerning utility [KOREAN]
facilities.
------------------------------------------------------------------------------------------------------------------------------------
453 Samsung shall share with FKSL the examples of accidents concerning [KOREAN]
plant operations.
------------------------------------------------------------------------------------------------------------------------------------
455 Samsung shall share with FKSL examples of energy conservation and [KOREAN]
relevant data.
------------------------------------------------------------------------------------------------------------------------------------
456 Samsung shall provide specifications of clean-rooms to FKSL shall [KOREAN]
501 be pursuant to the policy agreed between QA departments of both
parties.
------------------------------------------------------------------------------------------------------------------------------------
458 Samsung shall share with FKSL the technical information concerning [KOREAN]
FFU, AHU, Air Comp., static electricity removal, ventilation system.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall share with FKSL the technical information concerning [KOREAN]
459 EYE LID PANEL, CLN VACUUM, CLN PVC pipe arrangements, GLN DI pipe
arrangements.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall share with FKSL the technical information concerning EYE [KOREAN]
460 LID PANEL, CLN VACUUM, CLN PVC pipe arrangements, CLN DI pipe
arrangements.
------------------------------------------------------------------------------------------------------------------------------------
462 Samsung shall share with FKSL the specifications of facilities [KOREAN]
concerning repair, manufacturing, installation.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall share with FKSL the information on disaster [KOREAN]
463 prevention, self-detection, design of automatic fire-extinguishing
equipment, construction inspection and ZONE AHU.
------------------------------------------------------------------------------------------------------------------------------------
464 Samsung shall share with FKSL the information on freezer technology. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
20
36
------------------------------------------------------------------------------------------------------------------------------------
465 Samsung shall share with FKSL the specifications of the temperature [KOREAN]
and humidity modulators.
------------------------------------------------------------------------------------------------------------------------------------
466 Samsung shall share with FKSL the examples of accident concerning [KOREAN]
environment, safety, health, disaster prevention.
------------------------------------------------------------------------------------------------------------------------------------
467 Samsung shall share with FKSL the managerial strategies concerning [KOREAN]
environment, safety and health.
------------------------------------------------------------------------------------------------------------------------------------
468 Samsung shall allow FKSL to receive consultation, along with Samsung, [KOREAN]
concerning disaster prevention, safety, building structure diagnosis.
------------------------------------------------------------------------------------------------------------------------------------
469 Samsung shall share with FKSL the information on radiation treatment, [KOREAN]
525 disaster prevention, and dangerous machinery.
------------------------------------------------------------------------------------------------------------------------------------
470 Samsung shall share with FKSL the data relating to the analysis [KOREAN]
technology seminars.
------------------------------------------------------------------------------------------------------------------------------------
471 Samsung shall share with FKSL the data and information relating to [KOREAN]
PSM, ISO and BS.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall give a notice to FKSL of errors detected in the [KOREAN]
472 inspections by governmental authorities, in connection with health and
safety, if there are any, and share with FKSL the relevant
information.
------------------------------------------------------------------------------------------------------------------------------------
474 Samsung shall provide FKSL with materials safety health data. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall have the technical advisors of its affiliates [KOREAN]
475 maintain the support for FKSL in consultation concerning safety and
disaster prevention.
------------------------------------------------------------------------------------------------------------------------------------
21
37
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall provide FKSL with SPEED, which is a LCA support software [KOREAN]
476 developed by E-CIM team, SDS central research center, provided that
such software concerns general environmental evaluations.
------------------------------------------------------------------------------------------------------------------------------------
480 Samsung shall provide FKSL with GMIS, a green management program [KOREAN]
software developed by SDS's environment safety group at Kiheung Plant.
------------------------------------------------------------------------------------------------------------------------------------
481 Upon request of FSKL, Samsung shall support FKSL in modification or [KOREAN]
upgrade of GMIS.
------------------------------------------------------------------------------------------------------------------------------------
477 Samsung shall provide FKSL with LCA related information and [KOREAN]
478 technology, once a week, developed by E-CIM team, Central Research
479 Center.
------------------------------------------------------------------------------------------------------------------------------------
Upon FKSL's request for environmental analyses of the products from [KOREAN]
483 FKSL plant, Samsung shall provide FKSL with the collective analysis
service.
------------------------------------------------------------------------------------------------------------------------------------
484 Samsung shall provide FKSL with information relating to CFC. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
485 Samsung shall provide FKSL with information published by Samsung Earth [KOREAN]
Environment Research Center.
------------------------------------------------------------------------------------------------------------------------------------
488 Samsung shall provide FKSL with environmental information which the [KOREAN]
533 Technology Strategic Group of the Central Research Center provides to
Samsung affiliates.
------------------------------------------------------------------------------------------------------------------------------------
490 Samsung shall assist FKSL in permits or approvals from government [KOREAN]
offices including KEPCO.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall allow FKSL to use Samsung's non-utilized facilities, for [KOREAN]
491 which FSKL shall be charged, or transfer such non-utilized facilities
to FKSL at the price pursuant to asset values.
------------------------------------------------------------------------------------------------------------------------------------
22
38
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall allow FKSL to use Samsung's spare parts, including the [KOREAN]
492 ones for environmental facilities, for which FSKL shall be charged, or
497 transfer such spare parts to FKSL at the price pursuant to asset
values.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall make efforts to allow FKSL to use Samsung's measuring [KOREAN]
493 equipment, including ones for environmental safety, if and when
499 necessary and provided such equipment shall remain the property of
Samsung.
------------------------------------------------------------------------------------------------------------------------------------
494 Samsung shall provide FKSL with managerial data on the third party [KOREAN]
contractors that have price related contracts with Samsung.
------------------------------------------------------------------------------------------------------------------------------------
496 Samsung and FKSL shall exchange the data on any disorder in [KOREAN]
electricity provided by KEPCO.
------------------------------------------------------------------------------------------------------------------------------------
498 Samsung shall allow FKSL to visit the machinery rooms in the utility [KOREAN]
related facilities for the purpose of study.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall allow FKSL to use Samsung's precision measuring [KOREAN]
502 instrument, if and when necessary; provided that such instrument is
movable, provided that such property shall remain the property of
Samsung.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall allow FKSL to use Samsung's tools and equipment, if and [KOREAN]
503 when necessary; provided that such tools and equipment are movable,
provided that such property shall remain the property of Samsung.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall allow FKSL to use Samsung's industrial materials such as [KOREAN]
504 PVC piping, electrical back panels and similiar materials that FKSL
needs, and FKSL shall be charged for such materials.
------------------------------------------------------------------------------------------------------------------------------------
505 In case Samsung needs to dispose of its non-utilized facilities, [KOREAN]
Samsung shall give FKSL first priority to purchase such
------------------------------------------------------------------------------------------------------------------------------------
23
39
------------------------------------------------------------------------------------------------------------------------------------
facilities.
------------------------------------------------------------------------------------------------------------------------------------
506 Samsung shall provide FKSL with data relating to construction. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall provide FKSL with data on the unit price in the [KOREAN]
507 contracts concerning painting work, partitioning, dredging,
plastering, waterproofing.
------------------------------------------------------------------------------------------------------------------------------------
508 Samsung shall provide FKSL with data relating to the labor services [KOREAN]
contracts and operations with labor service companies.
------------------------------------------------------------------------------------------------------------------------------------
513 Samsung shall allow FKSL to use Samsung's oxygen density measuring [KOREAN]
equipment, if and when necessary.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall allow FKSL to use Samsung's measuring device for [KOREAN]
514 electromagnetic wave, if and when necessary, provided that such
property shall remain the property of Samsung.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall allow FKSL to use Samsung's individual sample collecting [KOREAN]
515 devices, if and when necessary, provided that such property shall
remain the property of Samsung..
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall allow FKSL to use Samsung's endoscope for observation [KOREAN]
516 of ducts, if and when necessary, provided that such property shall
remain the property of Samsung.
------------------------------------------------------------------------------------------------------------------------------------
518 Samsung shall provide data concerning environmental safety technology [KOREAN]
upon request from FKSL.
------------------------------------------------------------------------------------------------------------------------------------
519 Samsung shall provide assistance to FKSL in connection with the public [KOREAN]
relations with government authorities and share relevant information.
------------------------------------------------------------------------------------------------------------------------------------
521 Samsung shall perform sanitation analysis (IC, GC-MASS), upon request [KOREAN]
from FKSL.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall allow FKSL to use Samsung's container level measuring [KOREAN]
522 devices, upon request from FKSL, provided that such property shall
remain the property of Samsung.
------------------------------------------------------------------------------------------------------------------------------------
24
40
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall allow FKSL to use Samsung's portable container- [KOREAN]
523 level-measuring devices, upon request from FKSL, provided that such
property shall remain the property of Samsung.
------------------------------------------------------------------------------------------------------------------------------------
524 Samsung shall continue to provide FKSL with HF ointment, upon request [KOREAN]
from FKSL.
------------------------------------------------------------------------------------------------------------------------------------
526 Environmental Safety Group of Kiheung plant shall reflect FKSL's [KOREAN]
opinion to the green-management system program.
------------------------------------------------------------------------------------------------------------------------------------
1. Meetings or conferences in connection with environmental safety, [KOREAN]
TPM, facility studies, in which FKSL personnel participate, shall
be subject to the visitor control regulation of Samsung.
[Korean]
2. Delivery of all documents, including utility status and technical
information is subject to the security regulation of Samsung.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall provide FKSL with LCC related information and [KOREAN]
A15 technology, once a week, that are expected to be developed by E-CIM
A16 team, Central Research Center.
------------------------------------------------------------------------------------------------------------------------------------
A19 Samsung shall provide FKSL with information relating to MINI SCRUBBER; [KOREAN]
provided that such information is relevant to FKSL business.
------------------------------------------------------------------------------------------------------------------------------------
Kiheung plant shall allow FKSL to use the measuring equipments for [KOREAN]
A20 environmental assessment; provided that FKSL should not unreasonably
disturb Kiheung plant in its ordinary course of business.
------------------------------------------------------------------------------------------------------------------------------------
25
41
Schedule 3.1(xii)
Insurance administration services and related support
------------------------------------------------------------------------------------------------------------------------------------
Item # Transitional Services [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall maintain the current fire insurance policy that covers [KOREAN]
FKSL plant until the end of July 1999, and shall make efforts to have
FKSL remain on the policy when Samsung enters into the new contract,
509 commencing August, 1999, with Samsung Fire Insurance Co.; provided
that FKSL shall be charged for its own premium. In case FKSL fails to
remain on the insurance policy of Samsung, Samsung shall make efforts
to help FKSL make its own fire insurance contract with Samsung Fire
Insurance Co. at the same rate of premium as Samsung.
------------------------------------------------------------------------------------------------------------------------------------
26
42
Schedule 3.1(xiii)
Immigration services and related support
------------------------------------------------------------------------------------------------------------------------------------
Item # Transitional Services [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall support FKSL personnel in their overseas activities by [KOREAN]
241 allowing FKSL's overseas resident personnel to continue to use the
245 passports with Samsung's commercial visa for 30 days after the Closing
date.
------------------------------------------------------------------------------------------------------------------------------------
FKSL shall enter into its own contracts for housing and vehicle lease [KOREAN]
243 for FKSL's overseas resident employees. Samsung shall continue to
support this for 30 days after Closing.
------------------------------------------------------------------------------------------------------------------------------------
27
43
Schedule 3.1(xiv)
Research and development, quality assurance and test services
------------------------------------------------------------------------------------------------------------------------------------
Item # Transitional Services [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
With regard to the actual set testing at Onyang plant and [KOREAN]
subcontractors' manufacturing sites, Samsung QA department shall
4 discuss with FKSL how to establish network through which Samsung can
provide feed- back information on the testing results and data to
FKSL.
------------------------------------------------------------------------------------------------------------------------------------
5 Samsung shall allow FKSL to use the analysis equipment owned by [KOREAN]
Kiheung plant.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall transfer to FKSL the technical data relating to patents [KOREAN]
8 and technologies of analog cell; provided that such information is
relevant to FKSL business.
------------------------------------------------------------------------------------------------------------------------------------
Standard of assorting technical documents that are subject to transfer [KOREAN]
9 to FKSL shall be determined by the nature of business, not by the
420 engineer who made the document. Samsung shall transfer to FKSL such
technical documents that belong to FKSL as of the Closing date.
------------------------------------------------------------------------------------------------------------------------------------
10 Samsung shall transfer to FKSL the data cartridge that contain the [KOREAN]
data on power devices being produced by FKSL.
------------------------------------------------------------------------------------------------------------------------------------
11 Kiheung QA department shall provide FKSL with reliability testing [KOREAN]
47 services if and when FKSL is incapable of performing such an analysis
for certain technical items.
------------------------------------------------------------------------------------------------------------------------------------
12 By transferring database relating to power devices to FKSL, Samsung [KOREAN]
shall stop allowing FKSL to use LIB registerred in LMS.
------------------------------------------------------------------------------------------------------------------------------------
28
44
------------------------------------------------------------------------------------------------------------------------------------
14 Samsung shall transfer CELL LIB to FKSL; provided that the CELL LIB is [KOREAN]
relevant to FKSL business.
------------------------------------------------------------------------------------------------------------------------------------
17 Samsung shall license FKSL to use the CAE inhouse tools for [KOREAN]
manufacturing masks.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall make efforts to help FKSL enter into its own maintenance [KOREAN]
20 contracts concerning CAE hardware and software with the same terms and
conditions as Samsung.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall transfer to FKSL the database files on all CAE related [KOREAN]
22 data before the Closing date; provided that such information is
relevant to FKSL business.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall transfer to FKSL the database files on the database [KOREAN]
relating to the PD products kept by CAE, and provide FKSL with CELL
23 LIB of STD60 and STD70; provided that such data should be used in FKSL
plant only, and that the application is confined to the development of
BCDMOS.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall transfer to FKSL the BCDMOS Rule File [KOREAN]
24 Generation(SDA4/SDG3); the database files shall be transferred prior
to the Closing date.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall assist FKSL in following tasks: Establishing logic in [KOREAN]
connection with development costs, collective management of data,
transfer of expenses through distribution, calculation of expenses for
26 MASK, FAB, PKG, CAE, and other development, settlement of accounts and
distribution in labor costs, system set-up and attendant training,
upgrade of database master; provided that such services shall be
provided until the Closing date.
------------------------------------------------------------------------------------------------------------------------------------
28 Samsung shall transfer to FKSL library documents relating to BCDMOS [KOREAN]
29 products in database format.
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29
45
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30 Samsung shall transfer to FKSL LMS DATA (including SCHEMATIC, LAYOUT, [KOREAN]
INFORMATION RULE FILES (DRC, LVC)
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall transfer to FKSL all technical documents relating to [KOREAN]
35 power devices, prior to the Closing date. Samsung shall not give FKSL
access to Kiheung library.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall transfer to FKSL historical information on the contracts [KOREAN]
41 relating to power device technology as well as data relating to power
device business.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall provide FKSL with analysis services, making use of [KOREAN]
45 analysis facilities in Kiheung plant, if and when FKSL is incapable of
performing analysis for certain technical items.
------------------------------------------------------------------------------------------------------------------------------------
51 Samsung shall transfer to FKSL some measuring equipment being used by [KOREAN]
Media engineering department after consultation with FKSL.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall provide FKSL with work history, historical data and [KOREAN]
training, (i) in terms of tasks that have been supported by Kiheung
52 and FKSL is incapable of performing(e.g.: planning, technology
management, technology planning, patent management), before the
Closing date, and (ii) after the Closing date, in case FKSL will not
be ready for such tasks by then.
------------------------------------------------------------------------------------------------------------------------------------
62 Upon request from FKSL, Samsung shall support FKSL in the test and [KOREAN]
split in connection with EPI process.
------------------------------------------------------------------------------------------------------------------------------------
Samsung (Onyang Assembly & TEST) shall provide FKSL with samples, upon [KOREAN]
64 request, in case FKSL is in need of such samples for the purpose of
the inspection on the new products or evaluation of the changes in
process.
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30
46
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66 Samsung shall give FKSL access to the technology reports of the LSI [KOREAN]
products manufactured on an OEM basis.
------------------------------------------------------------------------------------------------------------------------------------
68 Samsung shall continue to support FKSL in optimization of equipment, [KOREAN]
85 upon request from FKSL, consistent with past practices.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall have FKSL participate in the audits for raw material [KOREAN]
69 makers and secondary material makers, Samsung shall share the audit
reports with FKSL, if necesarry; provided that such materials are
being used by FKSL.
------------------------------------------------------------------------------------------------------------------------------------
70 Samsung shall provide FKSL with the incoming inspection services for [KOREAN]
cleaning utilities.
------------------------------------------------------------------------------------------------------------------------------------
71 Samsung shall provide FKSL with qualification service for the new [KOREAN]
72 specifications or suppliers relating to the cleaning tools within
about 30 days from the date of request.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall provide FKSL with the pollution analysis for the [KOREAN]
73 cleaning tools and other environmental matters, within about 15
days--average term of works in 1998--from the date of request.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall give FKSL a lease on the portable cleaning measurement [KOREAN]
74 equipment, upon request; provided that FKSL shall be responsible for
repair or compensation of damage in case FKSL causes any damages
during use.
------------------------------------------------------------------------------------------------------------------------------------
FKSL shall make its own contracts, separately from Samsung, for the [KOREAN]
75 maintenance of its PMS facilities; provided that Samsung shall make
efforts to provide FKSL with relevant information on the costs and
technical matters.
------------------------------------------------------------------------------------------------------------------------------------
FKSL shall make its own contracts, separately from Samsung, for the [KOREAN]
76 maintenance of its HIAC and ROYCO; provided that Samsung shall make
efforts to provide FKSL with the relevant information on the costs and
technical matters.
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31
47
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FKSL shall make its own contracts, separately from Samsung, for the [KOREAN]
78 maintenance of its Microscopr and Autoloader; provided that Samsung
shall make efforts to provide FKSL with the relevant information on
the costs and technical matters.
------------------------------------------------------------------------------------------------------------------------------------
79 Samsung shall provide FKSL with the old or unsalable parts at the [KOREAN]
remaining book value.
------------------------------------------------------------------------------------------------------------------------------------
81 Samsung shall allow FKSL to use the spare parts at Kiheung plant [KOREAN]
195 in emergency cases.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall allow FKSL to use Samsung's portable measuring equipment [KOREAN]
82 for special purpose; provided that FKSL shall be responsible for
repair or compensation of damage in case FKSL causes any type of
damage in use.
------------------------------------------------------------------------------------------------------------------------------------
FKSL shall make its own contracts, separately from Samsung, for the [KOREAN]
83 maintenance of its facilities; provided that Samsung shall make
efforts to provide FKSL with the relevant information on the costs and
technical matters.
------------------------------------------------------------------------------------------------------------------------------------
84 Samsung shall grant FKSL a preferred purchase right, at the [KOREAN]
194 remaining book value, in case Samsung intends to sell the non-
utilized equipment in Kiheung plant.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall continue to support FKSL in optimization of the [KOREAN]
85 thin-film reference set and the film thickness standard sample for the
correction and measurement of the thin-film equipment, upon request
from FKSL, consistent with past practices.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall continue to support FKSL in optimization (0.2 um~4.9um) [KOREAN]
86 of the standard sample for the correction of absolute contamination
level, upon request from FKSL, consistent with past practices.
------------------------------------------------------------------------------------------------------------------------------------
32
48
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall continue to support FKSL in optimization of the standard [KOREAN]
87 micro scale in terms of regular correlation, upon request from FKSL,
consistent with past practices.
------------------------------------------------------------------------------------------------------------------------------------
88 Samsung shall continue to support FKSL in optimization of the XX Xxxx [KOREAN]
meter, upon request from FKSL, consistent with past practices.
------------------------------------------------------------------------------------------------------------------------------------
89 Samsung shall continue to support FKSL in optimization of the MFC, MFC [KOREAN]
calibrator, upon request from FKSL, consistent with past practices.
------------------------------------------------------------------------------------------------------------------------------------
FKSL shall make its own contracts, separately from Samsung, for the [KOREAN]
maintenance of its automatic conveyance system made by Dai-ich;
90 provided, however, Samsung shall make efforts to provide FKSL with the
relevant information on the costs and technical matters.
------------------------------------------------------------------------------------------------------------------------------------
93 FKSL shall keep the technical documents and data relating to the power [KOREAN]
devices.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall support FKSL in the services relating to the abnormal [KOREAN]
94 lots detected by Onyang QC department, that shall carry on the
attendant works. In addition, Samsung shall provide FKSL with the work
reports at each phase of process.
------------------------------------------------------------------------------------------------------------------------------------
In case the Samsung detects low-yields or abnormal lots out of FKSL's [KOREAN]
products during the final test, Samsung shall have such lots processed
pursuant to Onyang's regulation and past practices, and Samsung shall
95 notify FKSL of the details of the problem occurred by listing them on
MAGICS and sending the samples to FKSL. In addition, Samsung shall
provide FKSL with information on assembly, test and production,
provided that such information is relevant ro FKSL business.
------------------------------------------------------------------------------------------------------------------------------------
33
49
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96
97
98
99 Samsung shall transfer related services to FKSL related to the [KOREAN]
102 transfer of one employee of Kiheung System LSI QA to FKSL for the
111 quality control tasks of FKSL.
130
179
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100 Samsung shall transfer to FKSL the standard specifications relating to [KOREAN]
FKSL products that are subject to outsourcing manufacture.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall transfer to FKSL the quality reports and other [KOREAN]
101 significant documents relating to FKSL's IC products that are subject
to outsourcing manufacture.
------------------------------------------------------------------------------------------------------------------------------------
103 Samsung shall notify FKSL of the changes in assembly process and [KOREAN]
reliability tests made by Onyang plant.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall give FKSL access to the analysis equipment at Analysis [KOREAN]
104 Technology team, Kiheung LSI QA department, and shall provide analysis
data upon request from FKSL.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall provide SKSL with SK92 tester ZIG and support FKSL in [KOREAN]
105 the correlation work. In case F/T program should change, Samsung shall
discuss with FKSL.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall conduct retest (e.g. putting the TAPING materials into [KOREAN]
the TUBE after TAPING removal), in case quality problems are found
106 with the RMA returned materials and stocks at Onyng warehouse. Samsung
shall inform FKSL of the results of the restest and send defective
samples to FKSL
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34
50
------------------------------------------------------------------------------------------------------------------------------------
The sample of the products on which the final test cannot be processed [KOREAN]
because FKSL does not have the final test program or final test JIG
107 shall be sent to Onyang, and Onyang Test Technology department shall
perform the final test and send the test results to FKSL in the form
of a file through e-mail, such as SINGLE.
------------------------------------------------------------------------------------------------------------------------------------
In case inspection in actual set before stocking is needed to reduce [KOREAN]
the customer defect rate of FKSL products for which the final test is
109 conducted at Onyang, Onyang QA and Test department shall conduct the
actual set test in accordance with the sampling plan submitted by FKSL
and send the results to FKSL after the test.
------------------------------------------------------------------------------------------------------------------------------------
Onyang Test department shall retest FKSL's products, when abnormal [KOREAN]
110 lots are detected, and send FKSL the test result and defective samples
upon request from FKSL.
------------------------------------------------------------------------------------------------------------------------------------
138 Onyang QA shall support FKSL in the actual set test and electric [KOREAN]
characteristics tests, and shall send FKSL the test result and data.
------------------------------------------------------------------------------------------------------------------------------------
139 Onyang QA shall conduct incoming inspection on outsourced [KOREAN]
semi-manufactured goods for FKSL.
------------------------------------------------------------------------------------------------------------------------------------
140 Onyang QA shall conduct the incoming inspection on raw materials for [KOREAN]
141 FKSL; provided that such inspection services will be provided before
142 FKSL's outsourcing companies are ready for performing such inspection.
------------------------------------------------------------------------------------------------------------------------------------
In case FKSL requests Samsung to perform ESD test, Samsung shall make [KOREAN]
143 efforts to comply with such request within reasonable period of time;
provided, however, Samsung does guarantee FKSL a certainty in its
response time.
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35
51
------------------------------------------------------------------------------------------------------------------------------------
In case FKSL requests Samsung to perform IR reflow, Samsung shall make [KOREAN]
144 efforts to comply with such request within reasonable period of time;
provided, however, Samsung does guarantee FKSL a certainty in its
response time.
------------------------------------------------------------------------------------------------------------------------------------
In case FKSL requests Samsung to perform TC (Temperature Cycle), [KOREAN]
145 Samsung shall make efforts to comply with such request within
reasonable period of time; provided, however, Samsung does guarantee
FKSL a certainty in its response time.
------------------------------------------------------------------------------------------------------------------------------------
In case FKSL requests Samsung to perform Surge Test, Samsung shall [KOREAN]
146 make efforts to comply with such request within reasonable period of
time; provided, however, Samsung does guarantee FKSL a certainty in
its response time.
------------------------------------------------------------------------------------------------------------------------------------
147 Onyang QA department shall allow FKSL to use the reliability equipment [KOREAN]
in case of changes in Samsung's assembly process
------------------------------------------------------------------------------------------------------------------------------------
150
~ Samsung shall support FKSL in terms of overseas QA services; provided [KOREAN]
154 that such services will be confined to the transmission of customer
249 claims between Samsung overseas branches and FKSL.
------------------------------------------------------------------------------------------------------------------------------------
155 Samsung shall transfer to FKSL the data relating to the past claims [KOREAN]
156 and customer complaints in connection with FKSL products.
------------------------------------------------------------------------------------------------------------------------------------
162 Samsung shall transfer to FKSL the data relating to the past RMA cases [KOREAN]
in connection with FKSL products.
------------------------------------------------------------------------------------------------------------------------------------
In connection with provision of Dolphins, Samsung shall transfer to [KOREAN]
164 FKSL the specification files which have been used as standards of FKSL
business.
------------------------------------------------------------------------------------------------------------------------------------
Dolphin related specification data omitted at the time of transfer or [KOREAN]
165 approved of by Samsung shall be transferred to FKSL by Samsung for 3
years from the Closing date.
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36
52
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177 Samsung shall transfer to FKSL the data relating to the past PCN in [KOREAN]
connection with FKSL products.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall continue to provide FKSL with analysis of the items such [KOREAN]
199 as WAFER/CHEMICAL/GAS etc., upon FKSL's request to Kiheung analysis
team, and share the evaluation results of the qualification and
analysis of the new suppliers or materials.
------------------------------------------------------------------------------------------------------------------------------------
201 Samsung shall maintain and improve the existing reporting system for [KOREAN]
the reliability tests concerning Maverick Lot for FKSL.
------------------------------------------------------------------------------------------------------------------------------------
In order to enable FKSL outsourcing management team to perform the [KOREAN]
business related to the unit cost contract for the existing IC
269 outsourcing product, Samsung shall provide FKSL with the data relating
to the existing contracts and the results of the unit cost negotiation
for 1999.
------------------------------------------------------------------------------------------------------------------------------------
As outsourcing operations relating to the IC products are gradually [KOREAN]
transferred to FKSL, Onyang production management team shall (I)
summarize the status of PD products currently managed by it and
270 transfer it along with all other relevant information to FKSL, and
(ii) transfer the IC outsourcing operation to FKSL in accordance with
the schedule agreed between the parties.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall continue to provide the transportation service for FKSL [KOREAN]
271 products, consistent with past practices, between Onyang warehouse and
outsourcing companies.
------------------------------------------------------------------------------------------------------------------------------------
FKSL outsourcing management team shall be responsible for all [KOREAN]
outsourcing related businesses of its own products; provided that
281 Samsung shall make efforts to help FKSL to enter into contracts with
outsourcing companies, in terms of service price, with the same terms
and conditions as before.
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37
53
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Samsung shall provide training so that FKSL can establish its own [KOREAN]
282 operation and maintain its own system for handling the expenses
incurred by running outsourcing system; provided that FKSL shall be
responsible for the management and accounting relating to such
expenses.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall allow FKSL to use the software such as HSPICE, BASECAMP, [KOREAN]
408 OSA, PACMAN, SABER, OPUS, DRACULAR, which are required for
EWS(Engineer Work Station); provided, however, FKSL shall be
responsible for the costs and expenses.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall allow FKSL an access to the analysis equipment at [KOREAN]
409 Kiheung plant, in case FKSL does not have the analysis equipment
required for its business. (e.g.: TEM, TXRF, XRD, AES, AAS & ESCA).
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall provide FKSL with incoming inspection service for [KOREAN]
411 raw materials and subsidiary materials for packages; provided that
such materials are package development materials.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall continue to conduct simulations for FKSL's package [KOREAN]
412 development; provided that the TAT for such services shall be pursuant
to past practices of the package development team of Samsung.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall cooperate with FKSL in the simulation or analysis for [KOREAN]
413 technical activities, upon request from FKSL to the Kiheung or Onyang
plant of Samsung.
------------------------------------------------------------------------------------------------------------------------------------
415 Kiehung shall support FKSL in the material characteristics analysis [KOREAN]
for packages.
------------------------------------------------------------------------------------------------------------------------------------
416 FKSL shall take the lead in development of packages or lead frames, [KOREAN]
417 new process if and when such activities should be performed at Onyang
418 production lines, and FKSL may utilize Onyang lines pursuant to the
standards and rules applied to other outsourcing companies.
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38
54
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419 Samsung shall provide FKSL, as required, with the information relating [KOREAN]
to process renovation.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall provide FKSL with training service for the simulation [KOREAN]
425 engineers; provided that FKSL shall be responsible for the set-up of
simulation system and recruiting of personnel for simulation and its
development.
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The Purchased Software among the CAD Tool Software (paragraph 5 of the [KOREAN]
Excluded Assets) shall not be transferred to FKSL; however, Samsung
shall make efforts to help FKSL make contacts with the suppliers so
that FKSL may obtain same terms and conditions enjoyed by Samsung.
Samsung shall license FKSL to use the Home Grown Software among the [KOREAN]
426 CAD Tool Software (paragraph 5 of the Excluded Assets), including
427 Gremlin, RFG, CubicArc, and CubicBuild; provided that FKSL should use
428 such software for internal use only, and FKSL shall be charged for the
upgrade of Cubic home grown software, if and when necessary.
Samsung shall provide FKSL's CAE personnel with training service [KOREAN]
concerning operation of such software, pursuant to the standards and
rules applied to the supports in patent matters; provided, however,
FKSL shall be responsible for the expenses.
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FKSL shall maintain the contract with Kukdong concerning WIN92 [KOREAN]
430 project, and Kukdong shall be responsible for the remaining issues in
connection with the project.
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432 Samsung shall pay FKSL for maintenance service concerning Z400, at [KOREAN]
cost, which FKSL provided to Suzhou plant, if and when necessary.
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39
55
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Samsung shall transfer to FKSL the ownership of JIG and relevant [KOREAN]
433 programs currently used by the outsourcing companies in connection
with production of FKSL product.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall share with FKSL the information on outsourcing [KOREAN]
434 management such as product information files and statistical analysis
tool packages; provided, however, such information concerns FKSL
products.
------------------------------------------------------------------------------------------------------------------------------------
Samsung and FKSL shall exchange JIG and CAD files, consistent with [KOREAN]
435 past practices: Onyang plant shall provide FKSL with PD related JIG
and CAD files, while FKSL shall provide Kiheung plant with System LSI
related JIG and CAD files.
------------------------------------------------------------------------------------------------------------------------------------
436 Samsung shall support FKSL in production of Epoxy type probe cards, [KOREAN]
180 with historical TAT; FKSL shall provide Samsung with Blade type probe
cards. (Epoxy type:Samsung -> FKSL; Blade type: FKSL -> Samsung)
------------------------------------------------------------------------------------------------------------------------------------
FKSL shall be responsible for the expenses relating to the maintenance [KOREAN]
and production of probe cards required for the Foundry service for
437 Samsung; provided, however, Samsung shall provide FKSL with probe
cards for the new products at Samsung's expenses, consistent with past
practices.
------------------------------------------------------------------------------------------------------------------------------------
438 Samsung shall allow FKSL to use for 3 years 3 units of A360 and 6 [KOREAN]
units of EG2001X PROBER which are Samsung's property.
------------------------------------------------------------------------------------------------------------------------------------
Samsung shall provide FKSL with the Onyang plant's final test data on [KOREAN]
A14 FKSL's products, upon request from FKSL, in case such data relate to
FKSL's mass production, improvement of products, or new products
running in Onyang plant.
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40
56
Schedule 3.1(xv)
Information Technology Services
------------------------------------------------------------------------------------------------------------------------------------
Item # Transitional Services [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
36
37 Samsung shall license FKSL to use INPRO, and transfer to FKSL the [KOREAN]
38 database relating to INPRO.
------------------------------------------------------------------------------------------------------------------------------------
327 Samsung shall license FKSL to use SFMS. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
328 Samsung shall provide FKSL with the Korean MS-Office. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
329
132 Samsung shall provide FKSL with SAS. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
343 Samsung shall license FKSL to use ALCOS. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
344 Samsung shall license FKSL to use FAMOUS. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
345 Samsung shall license FKSL to use MCS. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
346 Samsung shall license FKSL to use CATS. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
347 Samsung shall license FKSL to use UCMS. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
348 Samsung shall license FKSL to use TELAS. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
349
137 Samsung shall license FKSL to use EAS. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
350 Samsung shall license FKSL to use SQC. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
351 Samsung shall license FKSL to use MCC. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
352 Samsung shall license FKSL to use MIDAS. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
353 Samsung shall license FKSL to use INFOGATE. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
41
57
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354
132 Samsung shall license FKSL to use STAR. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
355
25 Samsung shall license FKSL to use ARIRANG. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
356 Samsung shall license FKSL to use TPSS. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
357 Samsung shall license FKSL to use MICS. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
358 Samsung shall license FKSL to use TOMMIX. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
359 Samsung shall license FKSL to use SPC. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
360
27 Samsung shall license FKSL to use DOLPHINS. [KOREAN]
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361
410 Samsung shall license FKSL to use STEALTH. [KOREAN]
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363
136 Samsung shall license FKSL to use SEDAS. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
364
149 Samsung shall license FKSL to use CRISIS. [KOREAN]
153
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365 Samsung shall license FKSL to use XXXX. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
366
56 Samsung shall license FKSL to use SICAS. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
367 Samsung shall license FKSL to use GTS. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
369 Samsung shall license FKSL to use PLASMA. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
370
221 Samsung shall license FKSL to use GCM. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
371
158 Samsung shall license FKSL to use GOM. [KOREAN]
279
------------------------------------------------------------------------------------------------------------------------------------
372 Samsung shall license FKSL to use SEMIS. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
373 Samsung shall license FKSL to use FOCOS. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
42
58
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218
------------------------------------------------------------------------------------------------------------------------------------
374 Samsung shall provide FKSL with GSS program. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
376
159 Samsung shall license FKSL to use ASIMACS. [KOREAN]
173
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377
160 Samsung shall license FKSL to use RMACS. [KOREAN]
161
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378
221 Samsung shall license FKSL to use ATP. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
379 Samsung shall license FKSL to use MSS. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
380 Samsung shall license FKSL to use IDIX. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
381
280 Samsung shall license FKSL to use XXXX. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
382 Samsung shall license FKSL to use SLIM. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
383 Samsung shall license FKSL to use the warehousing bar code program [KOREAN]
designed for outsourcing subcontractors.
------------------------------------------------------------------------------------------------------------------------------------
400 Samsung shall license FKSL to use GLIMS (document & information [KOREAN]
searching system)
------------------------------------------------------------------------------------------------------------------------------------
402 Samsung shall provide FKSL with Hun-min-jung-eum and patent searching [KOREAN]
program except LANCD
------------------------------------------------------------------------------------------------------------------------------------
403 Samsung shall provide FKSL with TIDB. [KOREAN]
------------------------------------------------------------------------------------------------------------------------------------
405 Samsung shall license FKSL to use CMSPLUS (product code registration [KOREAN]
program)
------------------------------------------------------------------------------------------------------------------------------------
400-1 Salmsung shall license FKSL to use ALPS. [KOREAN]
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43
59
SCHEDULE 3.1 (d)
SEC ROLE & RESPONSIBILITY PURSUANT TO XXXXXXXXX TSA
1. Supporting uninterrupted operation of the Business with respect to
information technology services.
(a) SEC shall, in a manner consistent with past practices, provide
support to the Business to maintain the uninterrupted operation of
the Business with respect to information technology services. SEC
shall provide such support until such time as (i) Xxxxxxxxx Korea's
server has been set up and (ii) Xxxxxxxxx Korea has accepted such
server, which acceptance shall not be unreasonably withheld ((i) and
(ii) collectively referred to as the "Separation Acceptance").
(b) SEC will provide support for testing procedures at (a) the location
of the server on the date hereof and (b) at the Bucheon Facility,
and shall provide on one occasion training support with respect to
Xxxxxxxxx Korea's server.
(c) Until the Separation Acceptance, SEC shall be responsible for
providing, in a manner consistent with past practices, protection
for Xxxxxxxxx Korea's data stored in the server(s) for the benefit
of Xxxxxxxxx Korea from unauthorized access by third parties.
(d) Upon the reasonable request by Xxxxxxxxx Korea, SEC shall provide
consultation support to Xxxxxxxxx Korea with respect to information
technology services to the extent such support is not available from
SDS.
2. Confirmation of the term of use of SDS software.
Xxxxxxxxx Korea will be permitted to use the following softwares at no
charge to Xxxxxxxxx Korea (other than third-party vendor tools).
(a) Email (Single) - No charge until June 1999
(b) Document system (DMS) - No charge until June 1999
(c) Payroll system (PDSS) - No charge until April 2002
(d) Purchasing system (GLONETS) - No charge until April 2002
(e) Accounting system (SFIS) - No charge until April 2002
3. Xxxxxxxxx X0X compliance assistance.
