EXHIBIT 10.22
CONFIDENTIAL
ASSEMBLY AND TEST SERVICES AGREEMENT
This Package and Test Agreement (the "Agreement"), is dated and effective as of
February 28th, 2000 (the "Effective Date"), by and between. ST Assembly and Test
Services Ltd a Singapore Corporation with offices at 0 Xxxxxx Xxxxxx, 000000,
Xxxxxxxxx (STATS), and Centillium Communications, Inc., a Delaware corporation
with offices at 00000 Xxxxxxxx Xxxx., Xxxxxxx, Xxxxxxxxxx, 94538("Centillium").
RECITALS
WHEREAS, Centillium desires to purchase from STATS and STATS desires to
supply to Centillium Assembly and Test Services on the terms and conditions of
this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, the parties agree as follows:
1.0 DEFINITIONS
1.1 "Assembly Cycle Time" means the period of time required to manufacture
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the Products, commencing upon wafer start and ending on the day when
STATS ships out (ex-factory) the ordered quantity of Products. The
Assembly and Test Cycles Times for Prototype Production and Volume
Production shall be as set forth in Exhibit A. Cycle Time does not
include local national holidays and other factory holidays and
shutdowns.
1.2 "Lead Time" means the period of time, in calendar days, from the
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placement of a particular order of a Product until the date of first
shipment (ex-factory) of the ordered quantity of the Product.
1.3 "Products" means the name of the package technology.
1.4 "Affiliate" means any corporation or business entity, which is owned
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or controlled by, owns or controls, or is under common ownership or
control with, a party. For purposes of this definition, "control" of a
corporation or business entity shall mean the right to exercise,
directly or indirectly, more than fifty percent (50%) of the voting
rights attributable to the shares of the corporation or business
entity or the power to direct or cause the direction of the management
or policies of the corporation or business entity.
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2.0 INTELLECTUAL PROPERTY RIGHTS
2.1 Technical Information. All intellectual property and related rights in
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and to technical information of either party including an affiliate or
either party, which is provided to the other party in the course of
the development of the Product(s) shall continue to belong to such
providing party. This information shall be considered confidential and
covered by a separate Non Disclosure Agreement.
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3.0 ASSEMBLY AND TEST SUPPLY
3.1 Assembly Manufacturing
3.1.1 On the terms and conditions of this Agreement, STATS will;
manufacture packages, wafer sort silicon and test assembled
packages
3.1.2 Centillium will take ownership of the packages after all
processing has been completed and electrical test continuity and
Visual Mechanical results meet specification, see exhibit B.
3.1.3 STATS will perform all Assembly and Test at its Singapore
manufacturing facility. If STATS desires to change the location
at which Assembly or Tests are being performed, STATS shall first
define a qualification plan and obtain Centillium's written
consent, more than 90 days prior to the location change.
Centillium reserves the right to approve all changes to location.
Centillium will notify STATS of approval or rejection within two
weeks from receiving STATS notification and supporting
documentation
3.1.4 If STATS desires to change the form, fit, function or
reliability STATS shall first define a qualification plan and
obtain Centillium written consent, more than 90 days prior to
such changes. Centillium reserves the right to approve all
changes to form, fit, function or reliability. Centillium will
notify STATS of approval or rejection within two weeks from STATS
Centillium's notification and supporting documentation
3.1.5 STATS will notify Centillium 90 days in advance, in writing, of
any changes that are not form, fit, function or reliability
related.
3.1.6 STATS agrees to provide End-of-Life Notification to Centillium
one year in advance of product discontinuance.
3.2 STATS will treat Centillium as a Key Account and as such will continue
to provide early access to newly developed processes during the period
this agreement is in force.
3.3 Qualification and Quality Control
3.3.1 Qualification Centillium and STATS will cooperate fully to
qualify jointly each product for which silicon is used in a
package technology and will be manufactured hereunder
("Qualification"). Accordingly, the parties will cooperate to
implement a Qualification procedure pursuant to which the parties
will agree on parameters to monitor product quality and
reliability. After qualification, Reliability Monitor data will
be provided to Centillium on a quarterly basis detailing; Number
of Lots, Number of devices, Number of passes/fails (cycles when
failed), Test criteria. EXHIBIT C
3.3.2 Changes After Qualification of any Product, STATS shall not
make any major and/or critical Process change which will impact
the performance, reliability or construction of the Products,
without Centillium prior written consent, which consent shall not
be unreasonably withheld. STATS shall notify Centillium in
writing in advance of major Process changes, including but not
limited to any changes which may:
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3.3.2.1 Degrade Product quality or reliability;
3.3.2.2 Result in failure of the Product to meet Centillium
specifications
3.3.2.3 Substantially stow lead times
3.3.2.4 Change Process control variables, ranges or method;
3.3.2.5 Result in leadframe or substrate revisions or changes to
test methods/limits;
3.3.3 Problem Notification
STATS will classify and notify Centillium promptly (EXHIBIT D) upon
discovering major process problems in its manufacturing lines
that may affect the delivery capability of packages or package
yields or that it has caused via the use of returned material.
3.3.4 Yield Improvement Help STATS will notify Centillium of yield
trends on a quarterly basis and what action is being performed to
resolve the issues.
3.4 Capacity and Forecasts.
3.4.1 Capacity Agreement (EXHIBIT E)
In order to ensure capacity. Centillium will provide a 12 month
forecast with upside potential. STATS will agree to fulfill the
capacity requirement of the 12 month forecast. This forecast is
to be used for capacity planning only and the forecast on section
(3.4.2) will be used to purchase wafers. If Centillium has
unexpected demand above and beyond its upside forecast STATS
agrees to meet this upside 100%, within the specified cycle times
(EXHIBIT A) provided at least five (5) weeks notice is provided.
3.4.2 Three (3) Month Rolling Forecasts
Each month, Centillium will provide STATS a rolling forecast
("Forecast") of the number of packages and test time, which
Centillium intends to purchase weekly during the next three- (3)
months. The Forecast will be based on "packages out," i.e., on
deliveries expected to be made by STATS each week
3.4.3 Forecast Acknowledgment.
All Forecasts shall be mutually agreed in writing (e-mail) with PO
number and acknowledged package builds for each month of the
three- (3) month forecast
3.4.4 Required Orders
Upon mutual agreement by the parties regarding the forecast,
Centillium shall issue a "blanket" purchase order for those units
identified in the initial Forecast and each subsequent weekly
Forecast issued in accordance with this Agreement. Authorization
for payment against the forecast will be given upon the
determination of the quantity within 30 days of the shipment
date.
3.4.5 Purchase Order Process
A blanket purchase order and the forecast process as stated in section
3.4.4, 3.4.2 will initiate all purchases under this Agreement.
Forecast shall state unit quantities, unit descriptions,
requested delivery dates and shipping instructions. This
Agreement, any prices agreed upon by the parties pursuant to this
Agreement, unit quantities, unit descriptions, requested delivery
dates and shipping instructions, shall constitute the complete
agreement between the parties with respect to the purchase and
sale of the Products and shall
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supersede all prior oral or written agreements, representations
and other communications between the parties relating to the
subject matter of this Agreement. This Agreement shall also
supersede any standard terms and conditions or pre-printed terms
and conditions found on any Purchase Order issued under this
Agreement.
3.4.6 Cancellation
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Centillium may cancel product purchase order(s) or any portions
thereof for any reason by notifying STATS in writing 48 hours
prior to the scheduled start date on the forecast, provided that
Centillium shall be liable for the costs of any direct or
indirect raw materials incurred by STATS in reliance of the
forecasts notwithstanding the cancellation or if Centillium's
confirmed orders are less than Centillium's forecasts orders.
3.4.7 Delivery Commitments.
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STATS will deliver products to the carrier for shipment, within one
(1) day. Upon Centillium request, STATS will halt production
during manufacture, the foregoing delivery commitments will be
extended by the number of days that the products are held.
3.4.8 Shipping
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All assembled units shall be delivered to Centillium, its designated
airport or Customers freight forwarder in the case of drop ship.
Pre-alerts are required to be sent from STATS to Centillium's
freight forwarder at least 24 hr. in advance. Products shall be
suitably packed for shipment in STATS JEDEC compliant standard
containers, marked for shipment as specified in Centillium's
purchase order, and delivered to a carrier or forwarding agent
chosen by Centillium. However, should Centillium fail to
designate a carrier, forwarding agent or type of conveyance,
STATS shall contact Centillium's shipping department.
3.5 Test and Inspection
3.5.1 Inspection Results
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STATS will supply to Centillium, with each shipment, quality control
results, visual quality inspection results as agreed by the
parties and a certificate of compliance to show the assembly and
quality control steps were all completed
3.5.2 Regular Reports
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STATS will supply Centillium with reliability and statistical quality
data on the STATS standard processes, which is made for the same
product line, at regular intervals to be agreed upon but no less
than once a quarter. The format and the contents of these
report(s) are to be mutually agreed upon. Upon reasonable notice,
STATS will allow Centillium on-site inspection at reasonable
intervals to ensure that STATS follows the reliability and
testing procedures set forth in this Agreement.
3.5.3 Incoming Inspection Packages and tested devices may be subject
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to incoming inspection, electrical testing and reliability
testing by Centillium in accordance with the acceptance criteria
set forth in Exhibit B and C hereto. Packages meeting applicable
initial acceptance criteria or updated acceptance criteria will
be deemed
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accepted by Centillium. If packages do not meet this criteria
Centillium Communications will notify STATS within 72 hr.
3.5.4 Test or Visual/Mechanical Failure
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If any packages or lot of packages fails incoming inspection or test,
and if test failure is caused by any defect in the Process used
by STATS, Centillium may reject such lot or package in writing as
soon as possible but at least within forty-five (45) days after
delivery. In such event, STATS may, at its option, either re-
test, rework or refund Centillium the purchase price of STATS
services. Centillium will explain the reasons for wishing to
reject a lot, and STATS will be entitled to examine any lot that
Centillium wishes to reject. The parties will seek in good faith
to resolve any disagreement as to whether a lot is conforming.
After mutual agreement for return shipment, Centillium shall use
reasonable commercial efforts to use STATS original packing, but
in any event shall use commercially reasonable packaging, and
supply all identifying shipping documents in order to avoid any
deterioration of the goods.
3.5.5 Low Line Yield on Volume Production.
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If the output per lot (i.e., electrical or visual mechanical yield,
which meets the inspection and test criteria, is less than yield
defined in Exhibit F and if Centillium so requests, STATS will
explain the reasons for the low line yield. Lots or packages with
yields below a yield defined in Exhibit F may not be shipped
unless Centillium prior approval is obtained. The Established
Standard Yield will be reviewed in every quarterly strategic
business review and mutually agreed upon to apply for the
following quarter and placed in Exhibit F.
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4.0 COMPENSATION
4.1 Purchase Price
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The price of the services shall be determined from time to time by
agreement and quotation. The fixed price for any quarter will be
reviewed during the last month of the previous quarter and mutually
agreed to by the parties in good faith. For example, the Q2 (May -
July) price will be finalized by March. If an agreement cannot be
made, the current price will continue to be valid for the products
already ordered.
4.2 Payment.
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STATS will invoice Centillium the (the "payer"), as specified in the
relevant Purchase Order. Past due invoices of Centillium to the payer
shall bear interest at the rate of US prime rate + 1.5%, however, this
payment can be delayed without charge if a quality or other process
issue causes a delay but not in excess of the maximum lawful rate,
until paid in full. If the due date of the invoice of STATS is not a
business day, the payer shall pay STATS on the next business day
following such due date. STATS may submit invoices for services not
earlier than the date of shipment to Centillium Payment shall be in
United States dollars unless otherwise agreed.
4.3 Taxes
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Purchase prices shall be exclusive of all taxes and customs duties
including any applicable goods and services tax, and Centillium shall
pay and be liable for all taxes and duties imposed by any taxing
jurisdiction in "Country of Origin" or at the location of
manufacturing.
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5.0 WARRANTY AND DISCLAIMER; LIABILITY
5.1 LIMITED WARRANTY. Products sold by STATS are warranted to conform to
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specifications therefor at the time of delivery to Centillium and to
remain free from defects in workmanship and material for a period of
three (3) months from the date of shipment by STATS. Any products
which fail to meet either such warranty shall, at upon mutual
agreement, either be repaired or replaced by STATS at no charge to
Centillium or STATS shall issue a credit therefor in the amount paid
by Centillium on the said invoice. STATS warranty obligation shall be
limited solely to such repair, replacement or credit. Such obligation
shall be conditioned upon receipt by STATS of notice of any alleged
non-conformance to specifications within thirty (30) days after
delivery to Centillium and of any alleged defect in material or
workmanship within thirty (30) days after discovery. Products, which
STATS consents or directs in writing to be returned, shall be returned
to STATS, freight prepaid, F.O.B. Centillium's facility in California
or other destination directed by. STATS warranty shall only apply if
the products have not been altered or repaired other than with
authorization from STATS and according to its approved procedures, the
products have not been subjects to misuse, abuse, improper
installation, misapplication, maintenance, neglect or accident, the
products have not been damaged by excessive physical or electrical
stress and the products have not had their serial numbers, or other
markings, if any, altered, defaced or removed. All Products or parts
determined to be defective shall become the property of STATS upon
replacement, and STATS reserves the right to utilize refurbished parts
to repair or replace the warranted products. Warranty repairs or
warranty replacements shall be subject to this warranty for the longer
of (a) ninety (90) days following shipment of the repaired/replaced
products, or (b) the remainder of the original warranty for the
defective product, which has been repaired or replaced.
THE FOREGOING WARRANTY IS EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTY
OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, COURSE OF
DEALING OR USAGE OF TRADE. STATS SHALL HAVE NO RESPONSIBILITY FOR ANY
PARTICULAR APPLICATION MADE OF ANY PRODUCT.
5.2 LIMITATION OF LIABILITY
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UNDER NO CIRCUMSTANCE SHALL STATS OR ANY OF ITS AFFILIATES BE LIABLE TO
CENTILLIUM OR ANY OTHER PERSON OR ENTITY FOR ANY SPECIAL, PUNITIVE,
INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER BASED UPON LOST
GOODWILL, LOST PROFITS, WORK STOPAGE, PRODUCT FAILURE, IMPAIRMENT OF
OTHER GOODS OR OTHERWISE AND WHETHER ARISING OUT OF BREACH OF
WARRANTY, BREACH OF CONTRACT, NEGLIGENCE, TORT OR OTHERWISE.
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6.0 INTELLECTUAL PROPERTY INDEMNITY
6.1 Indemnification by Centillium
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Centillium agrees to defend STATS and its Affiliates against any third-
party actions or claims arising out of the manufacture, use, sale,
offer for sale, or importation of Products and brought against STATS
to the extent based upon a claim that Centillium's specifications,
technology, or information made available to STATS, or the product
thereof infringes any worldwide patent, trademark or copyright, trade
secret or similar intellectual property right of any third party, and
Centillium agrees to purchase any work-in-process for Products and to
pay any settlement amounts or damages awarded against STATS and its
Affiliates (including reasonable attorneys fees and court costs) to
the extent based upon such a claim; provided that STATS and its
Affiliates provides Centillium (i) prompt notice thereof, (ii)
reasonable assistance in connection with the defense thereof (at
Centillium's expense excluding STATS and its Affiliates employee
expense), and (iii) full control of the defense and settlement
thereof. Centillium shall not settle any such claim in a manner that
has a material adverse effect on STATS and its Affiliates without
STATS and its Affiliates prior written consent. Centillium agrees to
keep STATS and its Affiliates apprised of the progress of any action
or claims covered by this Section 6.1. Notwithstanding the foregoing,
Centillium's obligation to indemnify STATS and its Affiliates under
this Section 6.1 shall not apply to any actions or claims described in
Section 6.2 below.
6.2 Indemnification by STATS.
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6.2.1 STATS agrees to defend Centillium and/or its Associated
Companies against any third-party actions or claims arising out
of the manufacture, use, sale, offer for sale, or importation of
Products and brought against Centillium to the extent based upon
a claim that the use of any Process used by STATS or any
technology or information provided by STATS under this Agreement
infringes or misappropriates (directly or indirectly, such as,
without limitation, through the sale or importation of a wafer
manufactured by any such Process) any worldwide patent,
copyright, trade secret or other intellectual property right of
any third party, and agrees to pay any settlement amounts or
damages awarded against Centillium and/or its Associated
Companies (including reasonable attorneys fees and court costs)
to the extent based upon such a claim; provided that Centillium
and/or its Associated Companies provides STATS (i) reasonably
prompt notice thereof, (ii) reasonable assistance in connection
with the defense thereof (at Centillium's expense excluding
Centillium and/or Associated Company employee expense), and (iii)
allows STATS full control of the defense and settlement thereof.
STATS shall not settle any such claim in a manner that has a
material adverse effect on Centillium without Centillium's prior
written consent. STATS agrees to keep Centillium apprised of the
progress of any action covered by this Section 6.2.
6.2.2 STATS shall at all times have the right to: (i) obtain
appropriate licenses to, or (ii) modify the Process provided that
the resulting Product complies with the specifications set forth
in Exhibit B and subject to Centillium's right to
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approve such changes in advance, such pre-approval not to be
unreasonably withheld.
6.2.3 Exclusions. STATS shall not be obligated to indemnify and hold
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harmless Centillium where the infringement is caused by: (i) the
use of Products by Centillium in combination with other circuits
components, components, devices or products if both the
infringement would not have occurred but for such combination and
could have been avoided by a different commercially viable
combination and such combination is not reasonably necessary to
use the Product for its intended purpose; (ii) use of the
Products by Centillium and/or its Associated Companies in
applications or environments for which Products were not
designed; or (iii) modifications to the Products by Centillium
and/or its Associated Companies if such infringement would have
been avoided absent such modifications, unless such modifications
were authorized by STATS.
6.3 Entire Liability. THE FOREGOING STATES EACH PARTY'S ENTIRE LIABILITY
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AND OBLIGATION (EXPRESS, STATUTORY, IMPLIED OR OTHERWISE) UNDER THIS
AGREEMENT WITH RESPECT TO INFRINGEMENT OF THIRD PARTY INTELLECTUAL
PROPERTY. IN NO EVENT SHALL STATS'S LIABILITY PURSUANT TO SECTION 6.2
ARISING OUT OF ANY INFRINGEMENT CLAIM EXCEED THE AMOUNT PAD OR PAYABLE
BY CENTILLIUM HEREUNDER FOR THE PRODUCTS THAT ARE THE SUBJECT OF SUCH
CLAIM.
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7.0 GENERAL PROVISIONS
7.1 Confidentiality. (5 years)
7.1.1 Confidential Information. "Confidential Information" means any
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technical data, trade secret, know-how, or other information
disclosed by any party (including the Associated Companies)
hereunder, either directly or indirectly, in writing, orally, by
drawing or by inspections, and which shall be marked by the
disclosing party as "Confidential" or "Proprietary". If such
information is disclosed orally, through demonstration or by
inspection, in order to be deemed Confidential Information, it
must be specifically designated as being of a confidential nature
at the time of disclosure and confirmed in writing to be received
by the receiving party within ten (10) days of such disclosure.
7.1.2 Exclusions. Notwithstanding the foregoing, Confidential
Information shall not include information which:
7.1.2.1 is known to the receiving party at the time of
disclosure or becomes known to the receiving party without
breach of this Agreement;
7.1.2.2 is or becomes publicly known through no wrongful act of
the receiving party or any affiliate of the receiving party;
7.1.2.3 is rightfully received from a third party without
restriction on disclosure;
7.1.2.4 is independently developed by the receiving party or any
of its affiliates by persons who had no access to the
information;
7.1.2.5 is furnished to any third party by the disclosing party
without restriction on its disclosure; or
7.1.2.6 is approved for release upon a prior written consent of
the disclosing party.
7.1.3 Compelled Disclosure. Notwithstanding the foregoing, a
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receiving party may disclose Confidential Information if such
Confidential Information is disclosed pursuant to judicial order,
requirement of a governmental agency or by operation of law;
provided, however, that the receiving party shall provide prior
notice to the disclosing party and thereafter use reasonable
commercial efforts to assist the disclosing party in preventing
or controlling such compelled disclosure.
7.1.4 Nondisclosure. The receiving party agrees that it will not
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disclose any Confidential Information to any third party unless
that third party agrees to be bound to the confidentiality
obligations stated in this part VII and will not use Confidential
Information of the disclosing party for any purpose other than
for the performance of obligations hereunder during the term of
this Agreement. The receiving party further agrees that
Confidential Information shall remain the sole property of the
disclosing party and that it will take all reasonable precautions
to prevent any unauthorized disclosure of Confidential
Information by its employees and independent contractors. No
license shall be granted by the disclosing party to the receiving
party with respect to Confidential Information disclosed
hereunder unless otherwise expressly provided herein. Each party
will disclose the other's Confidential Information
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only to those of its employees and personnel of Affiliates that
have a need to know and who are informed that such information is
confidential.
7.1.5 Return of Confidential Information. After expiration or
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termination of this Agreement upon the request of the disclosing
party, the receiving party will promptly return all Confidential
Information furnished hereunder and all copies thereof, and the
receiving party will certify that al such confidential
information has been returned or destroyed.
7.1.6 Publicity. The parties agree that all publicity and public
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announcements concerning the formation and existence of this
Agreement shall be jointly planned and coordinated by and among
the parties. Neither party shall disclose any of the provisions
of this Agreement, the existence of this Agreement, nor that the
parties are doing business with one another to any third party
without the prior written consent of the other party. Centillium
will be responsible for all communications with Centillium's
customers concerning the subject matter hereof, and STATS agrees
to forward to Centillium any communications it receives from
Centillium's customers. Notwithstanding the foregoing, any party
may disclose information concerning this Agreement as required by
the rules, orders, regulations, subpoenas or directives of a
court, government or governmental agency, after giving prior
notice to the other parties and either party may disclose this
Agreement to its attorneys, accountants or like consultants that
have a need to know or to potential investors or potential
acquiring companies.
7.1.7 Remedy for Breach of Confidentiality. If a party breaches any
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of its obligations with respect to confidentiality and
unauthorized use of Confidential Information hereunder, the non-
breaching party shall be entitled to equitable relief to protect
its interest therein, including but not limited to injunctive
relief, as well as money damages.
7.2 Term and Termination
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This Agreement shall remain in force for five (5) years from the time the
first product is released to production by Centillium unless it is
terminated earlier as provided in this Agreement. At the end of five
(5) years, this Agreement will be extended for another one (1) year
under the same terms and conditions provided herein unless either
party gives notice of termination twelve (12) months prior to the
expiration date. Notwithstanding the foregoing, all existing orders
and the provisions of Part 5.0, 6.0, and Section 7.6 (Export Controls)
shall survive any termination or expiration of this Agreement. The
obligations of confidentiality under Article 7.1 shall last during the
specific period set forth in Article 7.1.
7.2.1 Subject to Section 7.2(b), either party may terminate this
Agreement with immediate effect, at its sole discretion, upon
giving written notice to the other party, in case:
7.2.1.1 the other party defaults in the performance of any
material obligation hereunder, and if any such default is
not corrected within ninety (90) days after the defaulting
party receives written notice of such default from the non-
defaulting party,
7.2.1.2 the business of the other party as a commercial
enterprise ceases, or
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7.2.1.3 The other party files a petition in bankruptcy, or is
adjudicated bankrupt, or makes a general assignment for the
benefit of creditors, or becomes insolvent, or is otherwise
unable to meet its business obligations for a period of three (3)
consecutive months.
7.2.2 In the event that STATS terminates this Agreement pursuant to
Section 7.2 above, STATS agrees to upon request to provide
Centillium customers with a continued supply of Packages and test
services. Centillium agrees to provide STATS with a list of such
customers reasonably prior to the occurrence of the events
specified in Sections 7.2.
7.3 Force Majeure. The parties shall not be liable to one another for
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failure to perform any part of this Agreement except for any payment
obligation when such failure is due to fire, flood, strikes, labor
troubles or other industrial disturbances, inevitable accidents, war
(declared or undeclared), embargoes, blockades, legal restrictions,
governmental regulations or orders, riots, insurrections, year 2000
computer problems or any cause beyond the control of such party.
However, the party so prevented from performance shall use
commercially reasonable efforts to resume performance, and the parties
shall proceed under this Agreement when the causes of such
nonperformance have ceased or have been eliminated.
7.4 Assignment. The parties shall not assign or transfer this Agreement,
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in whole or in part, or any right or obligation hereunder to any third
party without the prior written consent of the other party, provided
that either party shall have the right to assign this Agreement to an
entity that acquires all or substantially all of its assets, without
the consent of the other party.
7.5 Governing Law: Disputes.
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7.5.1 Except as hereinafter provided, all disputes or controversies
arising out of or in any manner relating to this Agreement which
the parties do not resolve in good faith within ten days after
either party notifies the other of its desire to arbitrate such
disputes or controversies shall be settled by arbitration by a
single arbitrator in accordance with the then standard prevailing
commercial rules, as modified or supplemented by this article, of
the American Arbitration Association ("AAA"). The arbitration
shall be held in Santa Xxxxx County, California. The arbitration
award shall be in writing and shall specify the factual and legal
bases of such award. The arbitration award shall be final and
binding, and a judgment consistent therewith may be entered by
any court of competent jurisdiction. The parties agree that the
arbitration award shall be treated confidentially, and the
parties shall not, except as otherwise required by law or court
or, disclose the arbitration award to any third party, excluding
personnel I their affiliated companies and their attorneys and
accountants with a need to know, provided that such recipients
agree to be bound by the same restrictions as are contained in
this Agreement. The arbitrator shall not have the power to render
an award of punitive damages. To the extent of any conflict, this
article shall supersede and control AAA rules.
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7.5.2 Nothing in this article shall be construed to preclude or in
any way prohibit either party from: (1) seeking any provisional
remedy, such as an injunction or a temporary restraining order;
or (2) instituting or prosecuting to judgment any lawsuit in any
court of competent jurisdiction to collect any money due.
7.5.3 Except as provided in this subsection, neither party shall have
the right to take depositions or obtain discovery of documents or
other information. After the appointment of the arbitrator, the
parties shall agree on (1) a reasonable number of and schedule
for depositions which the parties may take and (2) a reasonable
scope and schedule for the production of documents or other
information which is relevant to the subject matter of the
arbitration. If the parties cannot reach agreement on the number
of depositions, the scope, of production of documents or other
information and the schedule therefor, the arbitrator shall make
such determination(s). All discoveries shall be completed no
later than thirty (30) days prior to the arbitration hearing. The
arbitrator shall have the power to enforce any discovery agreed
upon by the parties or other wise required to be taken sanctions
and penalties as can be or may be imposed in like circumstance in
a civil actions by a California Superior Court, except the power
to order the arrest or imprisonment of a person.
7.5.4 No later than thirty (30) days prior to the arbitration
hearing, each party shall produce to the other party and the
arbitrator lists of the witnesses, documents and other
information which such party intends to use at the arbitration
hearing.
7.6 Export Controls. STATS and Centillium acknowledge that they are each
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subject to regulation by agencies of the U.S. and "Country of Origin"
Governments, including the U.S. Department of Commerce, which prohibit
export or diversion of certain products and technology to certain
countries. Any and all obligations of the parties to provide technical
information, technical assistance, any media in which any of the
foregoing is contained, training and related technical data
(collectively, "Data") shall be subject in all respect to such United
States and "California" laws and regulation as shall from time to time
govern the license and delivery of technology and products abroad by
persons subject to the jurisdiction of the United States, including
the Export Administration Act of 1979, as amended, any successor
legislation, and the Export Administration Regulations issued by the
Department of Commerce, International Trade Administration, Bureau of
Export Administration.
Without in any way limiting the provisions of this Agreement, the parties
agree that unless prior written authorization is obtained from the
Bureau of Export Administration or unless the Export Administration
Regulations explicitly permit the re-export without such written
authorization, neither party will export, re-export, or transship,
directly or indirectly, the Products or any technical data disclosed
or provided to STATS, or the direct product of such technical data, to
country groups Q, S, W, Y, or Z (as defined in the Export
Administration Regulations and which currently consist of Albania,
Bulgaria, Cambodia, Cuba, the Czech Republic, Estonia, Laos, Latvia,
Libya, Lithuania, Mongolian People's Republic, North Korea, Poland,
Romania, the geographic area of the former Union of Soviet Socialist
Republics, the
Page 14 of 00
Xxxxxx Xxxxxxxx and Vietnam, or to the People's Republic of China
(excluding Taiwan), Haiti, Iran, Iraq, Syria, Yugoslavia (Serbia and
Montenegro), or to any other country, as to which the U.S. Governments
have placed an embargo against the shipment of products, which is in
effect during the term of this Agreement.
7.7 Notice Any notice required or permitted to be given under this
------
Agreement shall be delivered (i) by hand, (ii) by registered or
certified mail, postage prepaid, return receipt requested, to the
address of the other party first set forth above, or to such other
address as a party may designated by written notice in accordance with
this Section 7.7 by overnight courier, or (iii) by electronic
transmission with conforming letter mailed under the conditions
described in (ii). Notice so given shall be deemed effective when
received, or if not received by reason of fault of addressee, when
delivered.
If to ST Assembly and Test Services Ltd, to:
Exec. Vice President Sales
Singapore Account Manager
0 Xxxxxx Xxxxxx 23
768442
If to Centillium, to:
Vice President of Operations and Manufacturing
Centillium
00000 Xxxxxxxx Xxxx
Xxxxxxxxxx, 00000
7.8 Relationship of Parties The relationship between Centillium and STATS
-----------------------
under this Agreement is that of independent contractors and neither
shall be, nor represent itself to be, the joint venture, franchiser,
franchisee, partner, broker, employee, servant, agent, or
representative of the other for any purpose whatsoever. No party is
granted any right or authority to assume or create any obligation or
responsibility, express or implied, on behalf of, or in the name of,
another party or to bind another in any matter or thing whatsoever.
7.9 Waiver
------
Should any of the parties fail to exercise or enforce any provision of this
Agreement or to waive any rights in respect thereto, such waiver or
failure shall not be construed as constituting a continuing waiver or
a waiver of any other right.
7.10 Severability
------------
In the event that any provision or provisions of this Agreement shall be
held to be unenforceable, the parties shall re-negotiate those
provisions in good faith to be valid, enforceable substitute
provisions which provisions shall reflect as closely as possible the
intent of the original provisions of this Agreement. If the parties
fail to negotiate
Page 15 of 25
a substitute provision, this Agreement will continue in full force and
effect without said.
7.11 Entire Agreement This Agreement, including the Exhibits referred to
----------------
herein, contains the entire understanding of the parties, and
supersedes any prior agreement between or among the parties with
respect to its subject matter. In case of any conflicts between this
Agreement and any purchase orders, acceptances, correspondence,
memorandum, listing sheets and other documents forming part of any
order for Products, this Agreement shall govern. This Agreement shall
not be amended or modified except by written instrument signed by the
duly authorized representatives of the parties hereto. IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be signed by
their duly authorized representatives or officers, effective as of the
Effective Date.
STATS Centillium
By: /s/ By: /s/ XX Xxxxxxxxx
--- ----------------
Name: JUNE CHIA Name: Xxxxxxx X Xxxxxxxxx
---------- -------------------
Title: EVP Sales & Marketing Title: VP Operations and Manufacturing
---------------------
Services
Page 16 of 25
EXHIBITS
--------
A - Assembly and Test Cycle Times - Prototype and Production
B - Acceptance Criteria - Electrical and Visual Mechanical
C - Regular Data - SPC, Test and Reliability
D - Problem Resolution Procedures
E - Capacity Guarantee
F - Low yield limits
G - Specifications
H - WIP Reporting Format (minimum data set)
Page 17 of 25
EXHIBIT A - Assembly and Test Cycle Times - Prototype and Production
--------------------------------------------------------------------
TECHNOLOGY PROTOTYPE PRODUCTION HOT-LOT
-------------------------------------------------------------------------------------------------------
LEADED ASSEMBLY 3 Days 5 Days 3 Days
-------------------------------------------------------------------------------------------------------
NON-LEADED ASSEMBLY 2 Days 4 Days 2 Days
-------------------------------------------------------------------------------------------------------
TEST 1 Day 3 Days 1 Day
-------------------------------------------------------------------------------------------------------
Page 18 of 25
EXHIBIT B - ACCEPTANCE CRITERIA
-------------------------------
TECHNOLOGY PROTOTYPE PRODUCTION AOQ
(PRODUCTION)
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
LEADED ASSEMBLY 4 mil Coplanarity 3 mil Coplanarity 15 DPM
-----------------------------------------------------------------------------------
NON-LEADED 8 mil Coplanarity 6 mil Coplanarity 15 DPM
ASSEMBLY
-----------------------------------------------------------------------------------
TEST Prototype Program Latest Program 35 DPM
-----------------------------------------------------------------------------------
Page 19 of 25
EXHIBIT C - REGULAR DATA
------------------------
Test Number of lots Devices tested Passes/Fails Test Criteria
Autoclave Number of lots Devices tested Passes/Fails Test Criteria
HAST Number of lots Devices tested Passes/Fails Test Criteria
Temp Cycle Number of lots Devices tested Passes/Fails Test Criteria
Thermal Shock Number of lots Devices tested Passes/Fails Test Criteria
Ball Shear Number of lots Devices tested Passes/Fails Test Criteria
Bond Pull Number of lots Devices tested Passes/Fails Test Criteria
Solderability Number of lots Devices tested Passes/Fails Test Criteria
Lead Strength Number of lots Devices tested Passes/Fails Test Criteria
Die Shear Number of lots Devices tested Passes/Fails Test Criteria
Xxxx Permanency Number of lots Devices tested Passes/Fails Test Criteria
SPC Number of lots Devices tested Cp Cpk
Data is to be provided to the Centillium Reliability Engineer on a Monthly Basis
including FA Reports for all failures
Page 20 of 25
EXHIBIT D Problem Resolution Procedures
When STATS identifies current or potential problems or Centillium Notifies STATS
of a potential problem
a) Accept such notice and classify it in accordance with
the following classifications:
i. Critical - Functional or Reliability failure resulting in missed
deliveries or customer lines down
ii. Major - Functional or Reliability failure which does
not resulting in missed deliveries or customer lines down
iii. Minor - Cosmetic problem or feature enhancement
b) Resolve such Engineering Complaint according to the
following classifications of the date of STATS's notice, unless the parties
mutually agree upon a later date. If unable to resolve an Engineering
Complaint within the specified period, STATS will issue an "interim report".
i. Critical - 1 day
ii. Major - 3 days
iii. Minor - 2 weeks
b) For Critical and Major complaints, STATS agrees to
acknowledge receipt of such Engineering Complaint and advise Centillium of
their proposed organization responsible for containing it within one (1)
working day of Centillium's receipt thereof.
c) For Minor complaints, STATS agrees to acknowledge
receipt of such Engineering Complaint and advise furnish Centillium a weekly
report of the status of open Engineering Complaints, in a mutually agreed upon
medium, together with a proposed schedule for their resolution.
Page 21 of 25
EXHIBIT E Capacity Agreement
MONTHS LEADED PACKAGES NON LEADED PACKAGES TEST TIME/HR TEST TIME/HR
(DIGITAL) (ANALOG)
------------------------------------------------------------------------------------------------------
March 35000 75000 611 125
------------------------------------------------------------------------------------------------------
Apr 35000 75000 611 125
------------------------------------------------------------------------------------------------------
May 27500 67500 528 113
------------------------------------------------------------------------------------------------------
Jun 30000 70000 556 117
------------------------------------------------------------------------------------------------------
Jul 32500 62500 528 104
------------------------------------------------------------------------------------------------------
Aug 35000 75000 611 125
------------------------------------------------------------------------------------------------------
Sept 35000 75000 611 125
------------------------------------------------------------------------------------------------------
Oct 40000 80000 667 133
------------------------------------------------------------------------------------------------------
Nov 40000 100000 778 167
------------------------------------------------------------------------------------------------------
Dec 40000 155000 1083 258
------------------------------------------------------------------------------------------------------
. This forecast is to be used for capacity planning only and the forecast on section (3.4.2) will be
used to purchase wafers.
. If Centillium has unexpected demand above and beyond its upside forecast STATS agrees to meet this
upside 100%, within the specified cycle times (EXHIBIT A) provided at least five (5) weeks notice is
provided for leaded and 8 weeks for non leaded
. Test time for Digital includes Sort
Page 22 of 25
EXHIBIT F LOW YIELD CRITERIA
TECHNOLOGY DIGITAL TEST ANALOG AOQ AOQ
TEST (V/M) (ELECTRICAL)
-----------------------------------------------------------------------------------------------------------------
LEADED ASSEMBLY 90% 62.5% 35 DPM 15 DPM
-----------------------------------------------------------------------------------------------------------------
NON-LEADED ASSEMBLY 80% N/A 35 DPM 15 DPM
-----------------------------------------------------------------------------------------------------------------
. If the lot does not meet the limit page the relevant Centillium engineer
Page 23 of 25
EXHIBIT G - SPECIFICATIONS
SPC monitoring of manufacturing sites CSP-OPQR- 16
Reliability process monitoring program CSP-OPQR- 17
Packing and Transportation of wafers CSP-OPSH-1
Visual wafer inspection criteria CSP-OPQR-18
Page 24 of 25
EXHIBIT H - WIP Reporting Format (minimum data set)
1. Location
2. Requested Ship Date
3. Date and time file sent
4. Forecast Ship date
5. Customer or MELCO Devices Number
6. Ship confirmation date
7. Process Stage
8. Lot number
9. Package quantity into process stage
. Reports to be generated daily
Page 25 of 25
