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Exhibit 10.44
EXECUTION COPY
ASSEMBLY AND TEST SERVICES AGREEMENT (SUZHOU)
This Assembly and Test Services Agreement ("Agreement") is made and
entered into this 13th day of April, 1999 (the "Effective Date") by and between
SESS Electronics Suzhou Semiconductor Co., Ltd., a subsidiary of Samsung
Electronics Co., Ltd. and a corporation organized under the laws of the People's
Republic of China ("SESS"), and Xxxxxxxxx Korea Semiconductor Ltd., a
corporation organized under the laws of the Republic of Korea ("Fairchild").
Either SESS or Fairchild may be referred to herein as a "Party" or together as
the "Parties," as the case may require.
RECITALS
WHEREAS, Samsung Electronics Co., Ltd. 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, the Parties hereto desire to enter into an agreement as
contemplated and required by the Business Transfer Agreement whereby SESS will
provide certain assembly and test services to Fairchild at its Suzhou, China
facilities following, the Closing (as defined in the Business Transfer
Agreement), 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 term in the Business
Transfer Agreement.
"Device(s)" shall mean Xxxxxxxxx'x discretes and integrated circuits to
be assembled and/or tested by SESS hereunder.
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"Die(s)" shall mean the silicon die material, consigned by Fairchild to
SESS in wafer form, from which Devices are assembled.
"Facilities" shall mean SESS's assembly and test facilities, located at
Suzhou, China.
"Past Practices" shall mean the practices of SESS's assembly and testing
services division at the Facilities and of Samsung Electronics Co., Ltd. with
respect to the Facilities occurring during calendar year 1998, including,
without limitation, practices relating to SPC data, yield data, 8D reports,
technical analysis, PQA support, failure analysis, quality surveys and
customers.
ARTICLE II
GENERAL REQUIREMENTS
Section 2.1 General Requirements
(a) SESS shall provide assembly and test services hereunder
consistent with Past Practices at the Facilities.
(b) Fairchild shall consign to SESS, free of charge, Dies consistent
with Past Practices and Xxxxxxxxx'x technical specifications on a CIF Suzhou,
China Facilities basis. SESS shall not be liable for any defective Device to the
extent such defect is a result of a defective Die supplied by Fairchild.
ARTICLE III
PACKAGE/PROCESS CHANGES NOTIFICATION
Section 3.1 Package/Process Changes Notification
(a) If SESS proposes to make any change affecting the assembly
processes, materials and/or suppliers affecting the Devices, SESS shall provide
at least thirty (30) days prior written notice to Fairchild of the intended
change for Xxxxxxxxx'x consent, which shall not be unreasonably withheld or
delayed. SESS shall be responsible for any cost increase arising from any such
change. Fairchild shall not be responsible for any loss incurred as a result of
SESS's failure to timely provide notification of such change.
(b) Fairchild shall provide at least thirty (30) days prior written
notice to SESS of any proposed change in Die design, layout modification,
fabrication process, test programs or other changes which may impact upon SESS's
processing, handling or assembly of Devices. Fairchild shall be responsible for
any cost increase arising from any such change. SESS shall not be responsible
for any assembly or test loss incurred as a result of Xxxxxxxxx'x failure to
provide timely notification of such change.
(c) Subject to the business requirements of both Parties, the
Parties agree to use their Best Efforts, consistent with Past Practices, to
promptly accommodate
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requests for urgent services or deliveries hereunder.
(d) Fairchild reserves the right to make changes to the
specifications that reflect improvements, developments or other technically
desired changes in the Devices. Fairchild shall notify SESS of such requested
changes and SESS shall respond within thirty (30) working days regarding the
feasibility, schedule and anticipated costs of implementing such change orders.
Once the Parties have agreed in writing to the engineering changes, schedule
and prices thereof, SESS shall promptly take all measures required to
incorporate such change orders into the Devices. If either SESS or Fairchild
desires to make any changes to the specifications, that Party shall notify the
other Party in writing and negotiate the changes in good faith, including any
changes in prices required by such modifications. A modification to any of the
foregoing will be binding only when a writing to which such modification is
attached and has been signed by both Parties.
ARTICLE IV
INSPECTION AND WARRANTY
Section 4.1 Inspection. Fairchild shall inspect the Devices within five
(5) days after delivery at its facility. Upon completion of such inspection,
Fairchild shall promptly report any damaged or defective Device in any shipment.
Fairchild reserves the right to reject any damaged or defective Device.
Section 4.2 Express Warranty. SESS warrants that the services provided to
Fairchild hereunder shall conform to all applicable specifications and processes
(or, in the absence of specifications, generally accepted industry standards)
consistent with Past Practices for assembly and/or test services and shall be
free from defects in material and SESS's workmanship. Such warranty, however,
shall not apply to the design or operation of the Fairchild supplied Dies
incorporated in the Devices. This warranty is limited to a period of one (1)
year from the date of delivery to Fairchild. If, during the one year period:
(a) SESS is notified promptly upon discovery in writing by a
reasonably detailed description of any such defect in any Device; and
(b) SESS, upon being reasonably satisfied with such description,
requests Fairchild to return such Device, and Fairchild returns such Device to
the Facilities at Xxxxxxxxx'x expense for inspection; and
(c) SESS's examination reveals that the Device is defective, or if
the Device is indeed defective, and the Device does not meet the applicable
specifications or is defective in materials or SESS's workmanship and such
problems are not caused by accident, abuse, misuse, neglect, improper storage,
handling, packaging or installation, repair, alteration or improper testing or
use by someone other than SESS then SESS, shall promptly credit Fairchild for
such defective Device. SESS shall reimburse Fairchild for the transportation
charges paid by Fairchild in returning such defective Devices to SESS. If such
defective Devices were caused by defective Die(s) supplied by Fairchild, SESS
shall be free from any liabilities.
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Section 4.3 Disclaimer. THE WARRANTY SET XXXXX.XX SECTION 4.2 CONSTITUTES
SESS'S EXCLUSIVE LIABILITY, AND XXXXXXXXX'X EXCLUSIVE REMEDY, FOR ANY BREACH OF
WARRANTY. EXCEPT AS SET FORTH IN SECTION 4.2, SESS MAKES AND FAIRCHILD RECEIVES
NO WARRANTIES ON THE SERVICES PERFORMED HEREUNDER, EXPRESS, IMPLIED, STATUTORY
OR OTHERWISE, AND SESS SPECIFICALLY DISCLAIMS ANY WARRANTY OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE V
FORECASTS AND ORDERS
Section 5.1 Forecasts. (a) All forecasts and demand for assembly and
testing services shall be consistent with Past Practices. Fairchild shall
provide a three (3) month rolling forecast to SESS no later than ten (10) days
prior to the end of each month in terms of the volume of Dies and Devices,
respectively. In the event that actual orders from Fairchild for any given first
month of the forecast do not meet, in volume, the most recent forecast provided
by Fairchild for such month (the Minimum Monthly Commitment), Fairchild shall,
within thirty (30) days after the end of such month, pay to Samsung an amount
equal to the product of (x) the number of additional Devices which, if ordered,
would have satisfied the Minimum Monthly Commitment, multiplied by (y) the price
per Device, minus material costs, that Fairchild would have been obligated to
pay for the provision of assembly and testing services hereunder.
(b) Fairchild may change the forecast for any month in accordance with
the following table, provided that the maximum request of Fairchild shall not
exceed the assembly and test capacity of the Facilities provided in accordance
with Past Practices. Any changes outside of those permitted under the following
table must be by written agreement of the Parties.
Monthly Period in
the Forecast Permitted Changes
----------------- -----------------
First No change permitted
Second +/-10%
Third +/-15%
Section 5.2 Orders. All requests for assembly and test services between
SESS and Fairchild shall be initiated by Xxxxxxxxx'x issuance of written service
request orders with reasonable lead time sent by either registered mail or
facsimile followed by mail. Such service request orders shall be submitted to
SESS on or before the tenth (10th) day prior to the end of each month,
describing the quantity and type of the products and shipping and invoicing
instructions requested by Fairchild for delivery the following month. By written
agreement of the Parties, service request orders may also be sent and
acknowledged by electronic data exchange or other mutually satisfactory system.
In the event of any conflict between the terms and conditions of this Agreement
and either Party's service request order, acknowledgment, or
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similar forms, the Parties shall resolve such conflict in good faith.
Section 5.3 Assured Capacity. SESS shall dedicate assembly and test
capacity at the Facilities in accordance with Past Practices.
Section 5.4 Minimum Annual Order Volume. Annual orders from Fairchild of
Devices utilizing the packaging types set forth on Schedule 5.4 hereto shall
exceed eighty (80) percent, in volume, of the aggregate assembly and test
capacity of the Facilities set forth in Schedule 5.4 hereto. In the event that
annual orders from Fairchild do not exceed eighty (80) percent, in volume, of
such capacity, Fairchild shall, within thirty (30) days after the end of such
annual period, pay to SESS an amount equal to the revenue which would have been
achieved had eighty (80) percent of the capacity been utilized, less an amount
reflecting variable costs attributable to such unutilized capacity.
ARTICLE VI
PRICES AND PAYMENT
Section 6.1 Prices. (a) Set forth in Schedule 6.1 hereto are the prices,
expressed in U.S. Dollars and subject to Section 6.1 (b), that Fairchild shall
pay to SESS for assembly and test services hereunder during the term of this
Agreement. Such prices are on an EX WORKS Suzhou, China Facilities basis. The
Parties acknowledge and agree that the prices in Schedule 6.1 hereto reflect the
sum of SESS's standard manufacturing costs, material costs, interest and general
and administrative expenses for the assembly and test services hereunder in U.S.
Dollars.
(b) After the first anniversary of the Effective Date, the prices
set forth in Schedule 6.1 shall be reduced by 5% (the "Second Year Prices") and
after the second anniversary of the Effective Date, the Second Year Prices shall
be reduced by 5%. Any adjustment hereunder shall apply to the prices beginning
with the first calendar month following the first and second anniversary of the
Effective Date, respectively.
Section 6.2 Payment. Prices shall be paid in U.S. Dollars by telegraphic
transfer. Payment terms are net thirty (30) days from the date of tax invoice.
SESS may invoice Fairchild for complete or partial lots (kits), and
miscellaneous services may be invoiced separately.
Section 6.3 Miscellaneous Charges and Taxes. Fairchild shall pay, in
addition to the prices quoted or invoiced, the amount of any special handling
charges if such charges were paid by the Business in Past Practices. Fairchild
shall also pay all sales, use, VAT, excise or other similar tax applicable to
the sale of goods or provision of services covered by this Agreement, or
Fairchild shall supply SESS with an appropriate tax exemption certificate.
Section 6.4 Interest on Late Payments. If Fairchild fails to make any
payment due hereunder by the date it is due, Fairchild shall pay to SESS, 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.
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Section 6.5 Prorated Charges. Should Fairchild terminate any order prior
to process completion, Fairchild shall be charged a prorated portion of the full
price of such Device subject to a negotiated adjustment, based on the process
termination point, including handling incurred by SESS in processing the total
quantity started in assembly.
Section 6.6 Additional Services. For assembly and test services for
Devices not reflected in Schedule 6.1, terms shall be on an individual purchase
order basis at prices to be negotiated by the Parties; provided, however, that
for assembly and test services not reflected in Schedule 6.1 but which were
provided in Past Practices, the Parties shall negotiate in good faith to
determine prices for such services using a methodology consistent with that used
to determine the prices set forth in Schedule 6.1.
ARTICLE VII
DELIVERY
Section 7.1 Delivery. SESS shall deliver assembled and/or tested Devices
on the delivery dates agreed to by the Parties. Delivery of 90% or more of the
volume of each Device published in the order and made within -7/+2 days of the
delivery date(s) agreed to by the Parties shall constitute timely delivery.
Delivery will be on an EX WORKS Suzhou, China Facilities basis, at which point
delivery shall be deemed to be made and risk of loss and title shall pass to
Fairchild. Deliveries will be subject to incoming inspection as set forth in
Section 4.1.
Section 7.2 Late Delivery. If SESS falls to timely deliver a Device in
accordance with Section 7.1, Fairchild shall have the right in its sole
discretion to cancel all or any part of the purchase order pertaining to such
Device. Any obligation of Fairchild under any commitment to SESS under this
Agreement associated with such cancelled purchase order shall be discharged in
full and Fairchild shall have no liability whatsoever to SESS thereof.
Section 7.3 Packing. All Devices delivered pursuant to the terms of this
Agreement shall be suitable, packed for shipment in containers specified by
Fairchild, marked for shipment to Xxxxxxxxx'x address set forth in the
applicable purchase order and delivered to a carrier or forwarding agent chosen
by Fairchild. Should Fairchild fail to designate a carrier, forwarding agent or
type of conveyance, SESS shall make such designation in conformance with its
standard shipping practices. Delivery will be EX WORKS Suzhou, China Facilities
basis, at which time risk of loss and title shall pass to Fairchild. Shipments
will be subject to incoming inspection as set forth in Section 4.1.
Section 7.4 Lot Integrity. To facilitate the inspection of deliveries to
Fairchild, lot integrity shall be maintained on all such deliveries, unless
specifically waived by mutual agreement of the Parties.
Section 7.5 Cancellation. Subject to the provisions of Section 5 and its
other obligations hereunder, Fairchild may cancel any purchase order upon 30
days written notice prior to the commencement of manufacturing without charge,
provided that Fairchild
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reimburses SESS for labor costs actually incurred by SESS and the cost of any
raw materials purchased for such order to the extent such raw materials are not
used for any other products.
Section 7.6 Production Stoppages. Fairchild may request that SESS stop
production of Devices in process for Xxxxxxxxx'x convenience, and SESS shall
consider stopping depending on the point of process. In such event, Fairchild
shall pay for all Devices at the agreed price, subject to a negotiated
adjustment based upon the degree of completion of the Devices and whether or not
SESS is able to use the unfilled capacity. SESS shall, if reasonably
practicable, restart production of stopped Devices within a reasonable time
after receipt of a written request from Fairchild, subject to Xxxxxxxxx'x
payment of any additional expenses incurred.
Section 7.7 Partially Completed Inventory. In the event that Fairchild
elects to maintain an inventory of partially finished Devices, ownership of the
partially finished Devices shall pass to Fairchild when they reach the holding
point defined by the relevant process flow. SESS shall invoice Fairchild for
such Devices, but they shall be stored under clean-room conditions and remain in
SESS's processing WIP management system. SESS shall inform Fairchild of the
number and types of these Devices remaining in inventory at the end of each
month. Further, the electronic records and physical inventory shall be available
for inspection by Fairchild at any time. SESS shall credit Fairchild with the
amount previously invoiced for any such Devices at such time as they are
restarted in the process flow.
ARTICLE VIII
QUALITY CONTROL; INSPECTION; AND RELIABILITY
Section 8.1 Specifications. SESS shall assemble and test Devices in
accordance with the specifications for the applicable Device. Prior to shipment,
SESS shall perform the electrical parameter testing and other inspections
specified to be performed by it in the applicable specifications on each Device
lot manufactured. SESS shall only ship those Device lots that successfully pass
the applicable specifications. SESS shall electronically provide Fairchild with
the electrical test data specified in the applicable specifications.
Section 8.2 Certification. SESS warrants that it will maintain
IS09002/ISO14000 certification throughout the term of this Agreement. SESS shall
provide Fairchild notice of any audits and copies of any report or
correspondence relating to such or similar certifications.
ARTICLE IX
ON-SITE INSPECTION AND INFORMATION
Section 9.1 Inspection and Evaluation. SESS shall allow Fairchild and/or
Xxxxxxxxx'x customers to visit and evaluate the Facilities during normal
business hours as part of established source inspection programs, it being
understood and agreed between Fairchild and SESS that Fairchild must obtain the
concurrence of SESS for the scheduling of all such visits, which concurrence
shall not be unreasonably withheld.
Section 9.2 Information. Upon Xxxxxxxxx'x written request, SESS WILL
provide
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Xxxxxxxxx with process control information, including but not limited to process
and electrical test yield results, current process specifications and
conformance to specifications; calibration schedules and logs for equipment;
environmental monitor information for air, gases and DI water; documentation of
operator qualification and training; documentation of traceability through
SESS's operation; and SESS verification information.
ARTICLE X
PRODUCT ENGINEERING SUPPORT
Section 10.1 Engineering Cooperation. The Parties will cooperate in
allowing Fairchild employees to have reasonable access to the Facilities during
the term of this Agreement (the "Fairchild Engineering Team"), in order to
assist in Device developments and improvements. SESS will provide reasonable
office space to the Fairchild Engineering Team, if required on a temporary basis
not to exceed thirty (30) days per occurrence, at no expense to Fairchild.
Should the Fairchild Engineering Team require long-term, dedicated office space,
Fairchild agrees to pay SESS the overhead cost associated with such space. The
Fairchild Engineering Team will comply with all applicable SESS regulations in
force at the Facilities and Fairchild hereby agrees to hold SESS harmless for
any damages or liability caused by any member of the Fairchild Engineering Team,
which are attributable to (i) the negligence or willful malfeasance of such
member and (ii) any failure by such member to comply with SESS's regulations in
force at the Facilities or with applicable law.
Section 10.2 Assistance. SESS shall assist the efforts of the Fairchild
Engineering Team and provide Fairchild with reasonable and timely support. SESS
shall reasonably assist Fairchild in any efforts to identify any reliability
problems that may arise in a Device. Fairchild shall correct Device related
problems and SESS shall correct all process related problems.
ARTICLE XI
TERM AND TERMINATION
Section 11.1 Term. The term of this Agreement shall be three years from
the Effective Date. Fairchild shall have the right to renew the term for an
additional three years upon written notice to SESS at least six (6) months prior
to the end of the initial term, provided, however, that upon renewal the terms
of this Agreement shall be subject to renegotiation. If the Parties should fail
to reach agreement on the renegotiated terms for the renewal period, then this
Agreement shall terminate upon the expiration of the initial term.
Section 11.2 Termination. This Agreement may be terminated (i) upon
mutual agreement of the Parties; (ii) by Fairchild at any time after the
two-year anniversary of the Effective Date upon ninety (90) days prior written
notice to SESS; or (iii) by one Party sending a written notice to the other
Party of the termination of this Agreement, which notice specifies the reason
for the termination, upon the happening of any one or more of the following
events:
(a) The other Party is the subject of a bankruptcy, corporate
reorganization or composition petition filed in a court of competent
jurisdiction, whether
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voluntary or involuntary, which petition in the event of an involuntary petition
is not dismissed within thirty (30) days; if a receiver or trustee is appointed
for all or a substantial portion of the assets of the other Party; or if the
other Party makes an assignment for the benefit of its creditors; or
(b) The other Party fails to perform substantially any material
covenant or obligation, or breaches any material representation or warranty
provided for herein; provided, however, that no right of termination shall arise
hereunder until thirty (30) days after receipt of written notice by the Party
who has failed to perform from the other Party, specifying the failure of
performance, and said failure having not been remedied or cured during said
thirty (30) day period. 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 Devices.
Section 11.3 Effect of Termination. Upon termination of this Agreement,
all rights granted hereunder shall immediately terminate and each Party shall
return to the other Party any property belonging to the other Party which is in
its possession. Xxxxxxxxx'x liability to SESS for any costs or expenses,
including but not limited to materials, inventory and work in-progress, arising
from any order placed by Fairchild with SESS prior to termination shall not be
affected by the termination of this Agreement. Nothing in this Article 11 is
intended to relieve either Party of any liability for any payment or other
obligation existing at the time of termination. The provisions of Sections 11.3,
12.1, 12.2, 14.1, 14.2, 14.3, 14.8, 14.10, 14.12, 14.17 and 14.18 shall survive
the termination of this Agreement for any reason.
ARTICLE XII
CONFIDENTIALITY
Section 12.1 Confidentiality. SESS 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. SESS and Fairchild
further agree that, in the event the Confidentiality Agreement expires prior to
termination or expiration of this Agreement, 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 12.2 Ownership and Maintenance of Data. All records, data files
(and the data contained therein), input materials, reports and other materials
provided to SESS by Fairchild and derivative data computed or processed
therefrom (collectively the "Data") pursuant to this Agreement after the
Effective Date will be the exclusive property of Fairchild, and SESS shall not
possess any interest, title, lien or right in connection therewith. SESS 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 used by SESS for any
purpose other than in support of SESS's obligations hereunder. Neither the Data
nor any part thereof shall be disclosed, sold, assigned, leased or otherwise
disposed of to third parties by SESS or commercially
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exploited by or on behalf of SESS, its employees or agents. If a Party
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 this Agreement, SESS 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 11.2(b) by reason of SESS's material
breach, in which case, such transfer will be made at SESS's cost.
ARTICLE XIII
FORCE MAJEURE
Section 13.1 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 XIV
MISCELLANEOUS
Section 14.1 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 SESS shall be addressed to:
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Samsung Electronics Suzhou Semiconductor Co., Ltd.
No. 15, Jin Ji Road
Suzhou Industrial Park
Suzhou, China
Attention: President
Telecopy No.: 00-000-000-0000
with copies to:
Samsung Electronics Co., Ltd.
Samsung Main Xxxx.
000, 0-Xx, Xxxxxxxx-Xx, Xxxxx-Xx
Xxxxx, Xxxxx
Attention: Director, Legal Department
Telecopy No: 000-000-0000
and 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 SESS 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:
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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 SESS.
Section 14.2 Indemnification. (a) Each Party (the "Indemnifying Party"),
at its own expense and cost, shall defend any suit, claim or legal proceeding
against the other Party (the "Indemnified Party") for the infringement of
patents or trademark, or claims based on allegations of copyright, trade secret
or other proprietary right infringement, by the Indemnifying Party. The
Indemnifying Party shall pay all damages and costs which may be awarded against
the Indemnified Party because of such infringement by the Indemnifying Party.
(b) The Indemnifying Party's duties under the immediately
preceding paragraph (a) are conditional upon the Indemnified Party furnishing to
the Indemnifying Party prompt written notice of the commencement of any suit or
proceeding or any claim of infringement and a copy of each written communication
relating to the alleged infringement, and giving to the Indemnifying Party
authority and reasonable assistance (at the Indemnifying Party's expense and
cost) to defend or settle such law suit, proceeding or claim. The Indemnifying
Party shall not be bound by any settlement made without its prior consent.
Section 14.3 Governing Law; Consent to Jurisdiction. 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. Xxxxxxxxx and
SESS 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.
Section 14.4 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 the Closing does not occur for any reason.
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Section 14.5 Headings: Definition. 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 14.6 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 14.7 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 14.8 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 14.9 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 14.10 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 14.11 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 14.12 Entire Agreement. This Agreement including agreements
incorporated herein), the Business Transfer Agreement, the Confidentiality
Agreement and the Schedules 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 14.13 Relationship of the Parties. SESS shall perform all
services hereunder as an independent contractor. This Agreement does not create
a fiduciary or agency relationship between SESS 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 venture, partner or employee of the other for any
purpose.
Section 14.14 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)
SESS 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. Notwithstanding anything to the contrary, any assignment of this
Agreement by either party shall expressly provide that the rights of the other
party hereunder shall survive such assignment.
Section 14.15 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 14.16 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 14.17 Specific Performance. The Parties each acknowledge that,
in view of
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the uniqueness of the subject matter hereof, the Parties would not have an
adequate remedy 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.
Section 14.18 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.
Section 14.19 Ownership Interest. SESS shall promptly provide to
Xxxxxxxxx notice of its intention to sell the Facilities and Xxxxxxxxx shall be
the preferred purchaser of the Facilities. After providing such notice, SESS
shall promptly provide to Xxxxxxxxx all documents and other information
reasonably requested by Xxxxxxxxx to enable Xxxxxxxxx to make an offer to
purchase the Facilities. Xxxxxxxxx shall have the right to make the first offer
to purchase the Facilities and Xxxxxxxxx and SESS shall negotiate in good faith
the terms and conditions included in any such offer. Notwithstanding the
purchase price offered by Xxxxxxxxx, if Xxxxxxxxx purchases the Facilities,
Xxxxxxxxx shall be entitled to a credit against the purchase price in an amount
equal to one-half of the net income before Income Taxes (as calculated in
accordance with GAAP) generated by the Business from March 16, 1999 to the
Closing Date. SESS agrees that it will not sell the Facilities to any third
party for a purchase price that is not equal to or higher than the purchase
price offered by Xxxxxxxxx (before application of the credit referred to in the
immediately preceding sentence), unless the terms of such third-party offer
(other than the purchase price) are determined in good faith by SESS to be
superior to the offer by Xxxxxxxxx. Other than the limitations set forth in this
paragraph, SESS shall not be restricted in any way from selling or transferring,
the Facilities to a third party and, notwithstanding the foregoing SESS shall
not be restricted in any way from discussing the sale or transfer of the
Facilities to any third party.
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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 SUZHOU SEMICONDUCTOR CO., LTD.
By: /s/ Xxx Xxx
-------------------------------------------
Name:
-------------------------------------------
Title:
-------------------------------------------
XXXXXXXXX KOREA SEMICONDUCTOR LTD.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------------
Name Xxxxxx X. Xxxxxx
-------------------------------------------
Title: Exec. V.P.
-------------------------------------------
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Schedule 5.4
Capacity assigned exclusively for the use of the Devices
unit: Kpcs/year
-----------------------------------------------
Package Annual capacity
-----------------------------------------------
TO-220 264,000
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D-PAK 63,600
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I-PAK 72,000
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Schedule 6.1
Prices
unit: US cent
--------------------------------------------------------------------------------
General &
Package Manufacturing cost Interest Administrative Total cost
--------------------------------------------------------------------------------
Assembly Final test Sum
--------------------------------------------------------------------------------
8-DIP 3.83 1.07 4.90 0.32 0.41 5.63
8-SOP 3.96 1.20 5.16 0.33 0.42 5.91
8-SOP MOS 3.72 1.19 4.91 0.31 0.39 5.61
14-SOP 6.33 1.46 7.79 0.59 0.73 9.11
16-SOP 6.82 1.56 8.38 0.67 0.86 9.91
TO-220 4.68 1.20 5.88 0.29 0.37 6.54
D/I-PAK 4.01 1.06 5.07 0.32 0.40 5.79
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