EXECUTION COPY
EXHIBIT 10.11*
SCG FOUNDRY AGREEMENT
This SCG Assembly Agreement (this "Agreement") is made this July 31, 1999
(the "Effective Date") between Semiconductor Components Industries, LLC, a
Delaware limited liability company ("SCILLC") and Motorola, Inc., a Delaware
corporation ("Motorola").
WITNESSETH:
WHEREAS, pursuant to the Reorganization Agreement and the Recapitalization
Agreement, as defined herein, the business and operations of the Semiconductor
Components Group are being reorganized as a "stand alone" business;
WHEREAS, in connection therewith, Motorola, and SCILLC desire that
Motorola, as a foundry, provide SCILLC with certain manufacturing services as
set forth herein;
NOW, THEREFORE, SCILLC and Motorola agree to enter this Agreement to
accomplish the foregoing premises in accordance with the following terms and
conditions:
1 DEFINITIONS:
1.1 CONFIDENTIAL INFORMATION means any information disclosed by one
party to the other pursuant to this Agreement which is in written,
graphic, machine readable or other tangible form and is marked
Confidential, Proprietary or in some other manner to indicate its
confidential nature. Confidential Information may also include oral
information disclosed by one party to the other pursuant to this
Agreement, provided that such information is designated as
confidential at the time of disclosure and reduced to a written
summary by the disclosing party, within thirty (30) days after its
oral disclosure, which is marked in a manner to indicate its
confidential nature and delivered to the receiving party. Such
Confidential Information includes but is not limited to Technical
Information transferred hereunder and all copies and derivatives
thereof and information received as a consequence of rendering or
receiving technical assistance, owned or controlled by either party,
which relates to its past, present or future activities with respect
to the subject matter of this Agreement, provided that if such
Confidential Information is disclosed by one of the parties to the
other party in written and/or graphic or model form, or in the form
of a computer program or data base, or any derivation thereof, the
disclosing party must designate it as confidential, in writing, by
an appropriate legend, together with the name of the party so
disclosing it, such as SCILLC Confidential Proprietary or Motorola
Confidential Proprietary Information.
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*Confidential information in this Exhibit 10.11 has been omitted
and filed separately with The Securities and Exchange Commission.
1.2 CONTRACT PRODUCTS means, collectively, those products which are
described in the Schedules to this Agreement.
1.3 DIE means an individual integrated circuit or components which when
completed create an integrated circuit or component.
1.4 DIE YIELD has the meaning ascribed to such term in Section 4
1.5 EFFECTIVE DATE means the date set forth above
1.6 EMPLOYEE MATTERS AGREEMENT means the Employee Matters Agreement by
and among Motorola, Inc., SCG Holding Corporation and Semiconductor
Components Industries, LLC, made as of May 11, 1999, as amended and
restated from time to time.
1.7 ENVIRONMENTAL LAWS has the meaning ascribed to such term in the
Recapitalization Agreement.
1.8 EQUIPMENT LEASE AND REPURCHASE AGREEMENT means the Equipment Lease
and Repurchase Agreement between Motorola, Inc and Semiconductor
Components Industries, LLC, dated as of the date hereof.
1.9 FIRM ORDER has the meaning ascribed to such term in Section 5.1.
1.10 FORCE MAJEURE has the meaning ascribed to such term in Section 5.6.
1.11 FORECAST has the meaning ascribed to such term in Section 5.1.
1.12 HAZARDOUS SUBSTANCES has the meaning ascribed to such term in the
Recapitalization Agreement.
1.13 IP AGREEMENT means the Amended and Restated Intellectual Property
Agreement by and between Motorola, Inc. and Semiconductor Components
Industries, LLC, dated as of the date hereof.
1.14 LOGISTICS SCHEDULE means the Logistics Schedule to the Transition
Services Agreement, dated as of the date hereof, by and between
Motorola, Inc and Semiconductor Components Industries, LLC
1.15 LONG TERM PRODUCTS has the meaning ascribed to such term in Section
6.3.
1.16 MINIMUM YIELD CRITERIA shall have the meaning set forth in Section
3.1.
1.17 RECAPITALIZATION AGREEMENT means the Agreement and Plan of
Recapitalization and Merger, as amended pursuant to Amendment No. 1
to the Recapitalization Agreement dated July 28, 1999, by and among
Motorola, Inc., SCG Holding Corporation, Semiconductor Components
Industries, LLC, TPG Semiconductor
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Holdings LLC and TPG Semiconductor Acquisition Corp made as of May
11, 1999.
1.18 RELEASE has the meaning ascribed to such term in the
Recapitalization Agreement.
1.19 REORGANIZATION AGREEMENT means the Reorganization Agreement by and
among Motorola, Inc., SCG Holding Corporation and Semiconductor
Components Industries, LLC dated as of May 11, 1999.
1.20 SCG ASSEMBLY AGREEMENT means the SCG Assembly Agreement between
Motorola, Inc. and Semiconductor Components Industries, LLC dated as
of the date hereof.
1.21 SCRAP means any metal piece part, wafer, die or device, in any stage
of completion, without regard to its ability to function, that are
not in conformance with the requirements of this contract for
Contract Products to be sold to SCILLC.
1.22 SOW means Appendix A. The SOW contains all currently known die types
that will be fabricated in wafer form, or assembled and/or tested.
The SOW documents die type, historical die yield, planning
cycletime, Minimum Yield Criteria, historical assembly / test yield
and assembly / test planning cycletime. The SOW shall be updated on
a quarterly basis or as mutually agreed.
1.23 WAFER means a crystalline substrate for integrated circuit
fabrication which when fully processed may consist of several
potential finished Die.
2 FACTORIES, PRODUCTS AND TERM
2.1 As set forth in Schedule A, Motorola shall manufacture the listed
Contract Products for SCILLC at the respective factories described
in Schedule A (the "Factories") through the respective last start
dates at the respective prices.
2.2 Motorola may choose to migrate foundry services for a given Contract
Product to a different factory than shown on Schedule A by giving
SCILLC six months written notice. Motorola shall be responsible for
all out of pocket costs related to such a move (including masks,
probe cards, and any decommissioning, packaging and shipping costs)
provided that SCILLC shall be responsible for costs associated with
customer acceptance of any such move.
3 STATEMENT OF WORK
3.1 During the term of this Agreement, each party agrees to use the data
contained in the SOW to plan and execute the manufacturing agreement
as described hereby.
3.1.1 The historical die yield data described in the SOW will be
used in
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conjunction with the negotiated wafer prices described in
Schedule A to set a die price as described in Section 4.1.
3.1.2 The planning cycletime is used by SCILLC and Motorola planning
organizations to provide the Forecasts and Firm Orders
described in Section 5.
3.1.3 The Minimum Yield Criteria sets a threshold for die yield on
each wafer below which no wafers will be shipped from Motorola
to SCILLC. These minimum yields are applicable to established
(mature) products for which a baseline of yield exists. For
new products, engineering tests or changes, or product
revisions no minimum shall apply until a baseline exists.
3.2 All Contract Products identified in the SOW are qualified for
shipment at this time. No future qualification requirements or
future qualification testing is required prior to shipment from
Motorola to SCILLC.
3.3 Motorola agrees to cooperate with SCILLC in continuing the
Reliability Audit Program (RAP) specification 12MRM15301A for the
products manufactured by Motorola for SCILLC. Such reliability
testing shall be the responsibility of SCILLC.
3.4 Future product qualification requirements shall be mutually agreed
upon prior to new product introduction, but shall generally conform
to current Semiconductor Product Sector standard specification
12MWS00024b.
3.5 Motorola shall provide all facilities, equipment, material, manpower
and expertise necessary to manufacture the products according to
SCILLC's requirements and specifications as set forth in this
Agreement and the appropriate SOW.
4 PRICE
4.1 Prices shall be based on the actual number of good die delivered
(based on probe tests). Price per good die shall be initially based
on the wafer price divided by the average die yields for the
previous six months (the "Die Yield") and shall be adjusted on the
same basis every six months thereafter, subject to a floor equal to
the Minimum Yield Criteria.
4.2 Engineering work and initial photolithography masks, probe cards and
load boards required for new product introduction, qualification or
major process changes requested by SCILLC will be billed at actual
cost including overhead.
4.3 Rush lots requested by SCILLC and accepted by Motorola will be
billed at 150% of the price agreed upon in Section 4.1. Upside die
demands beyond the agreed upon Firm Orders described in Section 5.1,
requested by SCILLC and accepted by Motorola will be billed at 125%
of the price agreed upon in Section 4.1.
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5 ORDER PLACEMENT, DELIVERY AND PAYMENT
5.1 Binding minimum and maximum weekly wafer supply constraints are set
forth on Schedule A. SCILLC shall provide, on a monthly basis, a
rolling 12 month die delivery forecast with anticipated weekly wafer
run rates. The first 3 months of the die forecast shall be fixed
(the "Firm Orders") and the last 9 months will be floating (the
"Forecast"). The Forecasts will be non-binding and used solely for
planning purposes. The Firm Orders shall act as purchase orders. As
an example, orders for die outs for the month of April would be
added to the Firm Order base on January first. Each new month's Firm
Orders shall not be allowed to change by more than 20% or 500 wafers
per week, whichever is smaller, from the previous month's run rate
without mutual consent of both parties, which shall not unreasonably
be withheld. SCILLC may request rush status on any production lot,
and if Motorola agrees to this request, the die will be billed
according to Section 4 hereof. In addition, unexpected upside die
demands may be requested by SCILLC within the Firm Order window.
Motorola has the option of accepting such orders which will be
billed according to Section 4 hereof. SCILLC may request changes to
the device mix within the Firm Order window at any time prior to
wafer starts, and Motorola shall make reasonable efforts to
accommodate the request, provided that total wafer starts in a given
technology do not change, and subject to manufacturer material
availability (e.g. wafers). If mutually agreeable to both Motorola
and SCILLC, the factories may schedule starts above the max or below
the min as shown in Schedule A without penalty. Delivery of die or
finished goods scheduled above the max shall be on a "best-effort"
basis and there shall be no penalty for late or missed deliveries on
such "above max" commitments. This mutual agreement shall be
documented by email from the planning managers of both SCILLC and
Motorola, now envisioned to be Duff Young for Motorola and Xxxxxx
Xxxxx for SCILLC, or their functional replacements in the future.
The same two individuals will also document requests for early
termination of foundry services by email.
5.2 Motorola is required to maintain capacity sufficient to meet the
supply of die set forth in SCILLC's Firm Orders, subject to the
maximum weekly wafer supply constraints. In the event Firm Orders
for any Contract Products over a monthly period fall below the
minimum weekly wafer supplies for those Contract Products during
that month, SCILLC will be responsible for Motorola's fixed costs
(equal to unit costs minus material costs, calculated according to
Motorola's cost allocation methodologies as of May 11, 1999)
associated with maintaining capacity to produce the relevant minimum
weekly wafer supply, taking into account any die actually purchased
by SCILLC, provided that Motorola shall take all reasonable steps to
limit such fixed costs. In such an event, SCILLC shall have the
right to audit such fixed costs. In the event SCILLC notifies
Motorola that the Firm Orders are likely to continue to be below the
minimum weekly wafer supplies, the parties shall meet and explore
potential solutions to the shortfall, which may include, subject to
mutual consent, a reduction of the
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minimum weekly wafer supplies, efforts to reduce fixed costs or the
early termination of the relevant Contract Products line. SCILLC's
liability for the cancellation of any Firm Orders will be limited to
the actual expenses reasonably incurred by Motorola in anticipation
of the Firm Orders, provided that Motorola shall take all reasonable
steps to mitigate any such damages. SCILLC will have no liability
for failure to meet minimum VHVIC order commitments or for the
cancellation of any Firm Orders in the event such failure or
cancellation is due to an adverse outcome in the matter of Power
Integrations v. Motorola.
5.3 If Motorola does not agree to start the wafers necessary to meet
SCILLC's Firm Orders (on a cumulative basis), even though the wafer
start volume meets the min-max limits for the Contract Products as
set forth in Schedule A, Motorola will pay SCILLC per wafer
liquidated damages equal to the gross margin for that Contract
Products for the previous fiscal quarter, once those wafer starts
are delinquent by more than 30 days, provided that in no case will
Motorola be required to pay any such damages until the total amount
of liquidated damages payable under this contract exceed $50,000.00.
Once these damages are paid the relevant Firm Order under this
Agreement and any related assembly Firm Orders under the SCG
Assembly Agreement shall be deemed cancelled and no damages or
obligations to pay fixed costs shall be payable by either party for
failure to order, purchase or deliver the services requiring such
die pursuant to the SCG Assembly Agreement.
5.4 In the event Motorola has started the wafers but fails to deliver a
number of functional die equal to 80% of the volume set forth in the
Firm Orders within 30 days of the date specified in the Firm Orders,
the factory manager will initiate best efforts recovery programs
(which may include overtime, rush lots, or increased starts) and
report the recovery plan to the respective directors of planning and
directors of manufacturing at Motorola and SCILLC. At the option of
the SCILLC planning organization, the recovery plan can be declined
and the orders cancelled without penalty for either party.
5.5 In the event Motorola has started the wafers but fails to deliver a
number of functional die equal to 70% of the volume set forth in the
Firm Orders within 90 days of the date specified in the Firm Orders,
Motorola will be required to pay per die liquidated damages (as
described below) for the die shortfall below 85% of the ordered die
amount set forth in relevant Firm Order, provided that in no case
will Motorola be required to pay any such damages until the total
amount of liquidated damages payable under this contract exceed
$50,000.00. Per die liquidated damages shall be equal to the gross
margin per die for each of the Contract Products (equal to the gross
margin for that Contract Products for the previous fiscal quarter).
If liquidated damages are paid pursuant to this Section and such die
are required for any assembly services pursuant to the SCG Assembly
Agreement, no damages or obligations to pay fixed costs shall be
payable by
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either party for failure to order, purchase or deliver the services
requiring such die pursuant to the SCG Assembly Agreement.
5.6 No party will be liable for failure or delay under this Agreement
owing to any cause beyond its control, including, but not limited
to, acts of God, governmental orders or restriction, war, threat of
war, warlike conditions, fire, hostilities, sanctions, revolution,
riot, looting or inability to obtain necessary transportation,
labor, materials or facilities (together, "Force Majeure"). In the
event of Force Majeure, each parties' time for delivery or other
performance will be extended for a period equal to the duration of
the delay caused thereby. If the Force Majeure continues or is
foreseen without question to continue for more than 3 months, the
non-affected party may terminate this Agreement immediately upon
written notice. Motorola will notify SCILLC at the earliest
indication of any interruption in supply of the Contract Products or
other facility difficulty that may affect the availability of
Contract Products under this Agreement.
5.7 Contract Products shall be shipped at the time set forth in the Firm
Orders pursuant to the terms of the Logistics Schedule. Contract
Products shall be billed and title shall pass to SCILLC at shipment,
and risk of loss shall pass to SCILLC upon receipt at the
destination set forth therein. Motorola will be responsible for
compliance with any local laws, including export control laws
related to the manufacture and delivery of the Contract Products.
5.8 Payment terms are net 30 days from the date of invoice. Payments
will be due in U.S. dollars except for products manufactured in
Japan, which will be paid in Yen as set forth in Schedule A.
5.9 If actual die yields exceed the Die Yield, Motorola shall use
reasonable efforts to adjust its wafer starts and keep such die in
its inventory in order to deliver ordered die as set forth in the
Firm Orders, provided that Motorola shall have the right to ship up
to 110% of the die specified in the Firm Orders resulting from
increased Die Yields, and SCILLC shall accept delivery of such
excess die, if future Firm Orders are insufficient to account for
such excess die.
5.10 The parties agree that as the time for shut-down of the BP-4 factory
approaches, both parties will meet to discuss capacity. After
reviewing the factory shut down plans and end-of-life product build
needs for both parties, if more capacity is available Motorola will
make a reasonable effort to make this capacity available to SCG for
increased run rates.
5.11 During the period of second quarter 1999 and third quarter 1999
("Q-3 1999"), the MECL-10K MIN/MAX is included in the total MESA
LOGIC min/max. Hence the min/max for NON-MECL-10K in BMC for Q-3
1999 should be 2850 / 3600. The MECL-10K demands shown beyond Q-3
1999 are correct as shown in Schedule A.
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5.12 The MOS-20 SmarTMOS 3 min/max includes both SmarTMOS-2.5 and
SmarTMOS-3 demands for a TOTAL of the 200 / 500 min/max shown in
Schedule A. Currently Schedule A refers only to SmarTMOS-3, but the
capacity exists to run a mix of either.
6 OTHER SERVICES
6.1 Motorola shall provide all reasonable support for the wafer
manufacturing processes and associated processes used to manufacture
the Contract Products consistent with past practice, industry
standards and Motorola form contracts.
6.2 Motorola shall keep SCILLC apprised of any major planned process
changes or other significant changes relating to the Contract
Products (each as defined by Motorola standard operating procedures
for process changes), and shall not make any such changes without
the consent of SCILLC, which shall not unreasonably be withheld.
Implementation of any process changes consented to by SCILLC shall
be based on Motorola standard operating procedures for process
changes.
6.3 For Contract Products with last start dates after the end of 2000
("Long Term Products"), Motorola shall cooperate in good faith with
any process or other manufacturing changes reasonably requested by
SCILLC, and the parties shall negotiate in good faith any price
adjustments based on such changes. In the event such negotiations
are not successful, SCILLC may terminate this agreement with respect
to any of such Long Term Products on 3 months written notice.
7 EQUIPMENT
7.1 SCILLC owned equipment used at any of the factories will be governed
pursuant to the terms of the Equipment Lease and Repurchase
Agreement.
8 WARRANTY / REJECTION CRITERIA
8.1 SCILLC may refuse wafers that fail to meet the Minimum Yield
Criteria as set forth in the appropriate SOW. Motorola shall be
responsible for all costs related to the return of any such wafers.
8.2 Motorola warrants that products sold hereunder shall from date of
shipment be free and clear of liens and encumbrances, and for 120
days from date of shipment shall be free from defects in
workmanship. In the event a workmanship defect is discovered,
Motorola agrees at its sole expense to replace or provide a credit
equal to the moneys paid for the affected unit(s) of products,
provided that the provision of a credit or the replacement of
products shall not limit Motorola's obligations to pay liquidated
damages under Section 5.4 and 5.5, hereof, for failure to deliver
functional die on a timely basis, although such liquidated damages
shall be offset by the amount of any credit paid.
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8.3 Motorola shall destroy and properly dispose of all Scrap in order to
prevent any unauthorized sale of any Contract Product, which cannot
be reclaimed. Motorola shall return such Scrap to SCILLC at SCILLC's
request and expense.
8.4 THIS WARRANTY EXTENDS TO SCG ONLY AND MAY BE INVOKED ONLY BY SCG FOR
ITS CUSTOMERS. MOTOROLA SHALL NOT ACCEPT WARRANTY RETURNS DIRECTLY
FROM SCG's CUSTOMERS OR USERS OF SCG's PRODUCTS. MOTOROLA DOES NOT
WARRANT PRODUCTS REJECTED AS A RESULT OF RELIABILITY TESTING OR
PROCESSING NOT PREVIOUSLY AGREED TO IN WRITING. THIS WARRANTY IS IN
LIEU OF ALL OTHER WARRANTIES WHETHER EXPRESS, IMPLIED OR STATUTORY
INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
PARTICULAR PURPOSE. THIS WARRANTY DOES NOT APPLY TO DEFECTS ARISING
AS A RESULT OF SCG'S DESIGN, FORMULA, OR APPLICATION.
8.5 In the event repeated field failures occur with respect to a
Contract Product, or a significant field failure occurs which
requires immediate attention, Motorola and SCILLC will discuss a
solution in good faith. This provision does not expand Motorola's
warranty obligations or any other liabilities beyond those expressly
set forth in this Section or limit Motorola's obligations to pay
damages under Section 5, hereof.
8.6 EXCEPT AS EXPLICITLY SET FORTH IN THIS AGREEMENT, IN NO EVENT SHALL
MOTOROLA BE LIABLE FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL
DAMAGES OF ANY NATURE WHATSOEVER (INCLUDING, WITHOUT LIMITATION,
LOST PROFITS) REGARDLESS OF THE LEGAL THEORY ON WHICH ANY SUCH CLAIM
MAY BE MADE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
9 INTELLECTUAL PROPERTY
9.1 Ownership of intellectual property related to the Contract Products
will be governed by the IP Agreement. Other than as set forth
therein or as separately agreed to between the parties in the event
of any process change, the manufacture of the Contract Products by
Motorola does not imply any transfer of Motorola's intellectual
property, technical information, or know how.
10 TERM
10.1 Last start dates are as set forth on Schedule A. SCILLC may
terminate the agreement with respect to any Contract Products on 6
months written notice.
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10.2 In the event Motorola is unwilling to provide foundry support under
reasonable terms for Smartmos 3, Motorola shall provide assistance
to SCILLC in transitioning the manufacture of such Contract Products
to a third party foundry, which services shall be billed at
Motorola's costs, including overhead. Motorola shall choose the
third party foundry, subject to SCILLC's reasonable consent.
Motorola shall be responsible for establishing and managing this
foundry relationship. The transfer of intellectual property rights
to the foundry shall be governed by the terms of the IP Agreement.
If such a third party foundry is established, Motorola shall also
have the right to have SCILLC establish a similar third party
foundry to manufacture Motorola products using an SCILLC technology
that is being manufactured at the date of Closing under similar
terms and conditions, provided Motorola requests such foundry
services within 6 months of the date the parties begin to establish
the Smartmos 3 third party foundry.
10.3 Motorola shall also provide reasonable assistance to SCILLC in
transitioning the manufacture of Mosaic 3 and 5 to a separate
facility prior to expiration or termination, which services shall be
billed at Motorola's costs, including overhead. It is anticipated
that after CDMC activities have been moved to Com 1 a process
transfer relating to Mosaic 5 will commence with completion expected
within 18 months following project initiation. Motorola will then
have an option to purchase Mosaic 5 wafers from SCILLC under similar
terms as those pursuant to which SCILLC purchases Mosaic 5 wafers
from Motorola pursuant to this Agreement.
10.4 With regard to all other Contract Products covered by this
Agreement, other than those listed in Sections 10.2 and 10.3 and 85%
BiCMOS, Motorola shall provide reasonable assistance to SCILLC in
transitioning the manufacture of such Contract Products to a
separate facility prior to expiration or termination provided
Motorola shall have personnel available, which services shall be
billed at Motorola's costs, including overhead.
10.5 Motorola's assistance in transitioning the Contract Products listed
in this Section 10 may also include training of the relevant
employees which will be provided at Motorola's facilities and billed
at Motorola's costs, including overhead.
10.6 In the event SCILLC requires a Factory to remain open beyond the
planned closure date listed in Schedule A, the die price will be
calculated as follows: (i) if SCILLC becomes the sole user of a
Factory after the planned closure dates, then the die price will
first be adjusted to cover the full costs of such Factory; and (ii)
the die price, whether or not adjusted pursuant to (i) above, will
increase by 10% (without compounding of interest) each month
thereafter, subject to a cap of 200% of the adjusted die price. In
no case will SCILLC be liable for any damages set forth in this
Section if Motorola is responsible for the late closure, whether as
a result of Motorola's failure to meet any Firm Orders for the
relevant Contract
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Product at such Factory or at another Factory producing the same
Contract Products, or as a result of delays in the relocation of any
other facilities in Motorola's control.
11 SITE ACCESS
11.1 Motorola shall allow SCILLC to visit and inspect the facilities upon
reasonable notice during normal business hours, provided that SCILLC
must first obtain Motorola's consent to any such visit, which
consent shall not unreasonably be withheld. Motorola may limit such
site inspections to no more than once per calendar year, except in
the event of any exceptional circumstances, including Motorola's
failure to meet any of its Firm Orders under this Agreement.
12 EXPORT CONTROL LAWS
12.1 The parties acknowledge that each must comply with all applicable
rules and laws in the performance of their respective duties and
obligations including, but not limited to, those relating to
restrictions on export and to approval of agreements. Each party
will be responsible for obtaining and maintaining all approvals and
licenses, including export licenses, permits and governmental
authorizations from the appropriate governmental authorities as may
be required to enable such party to fulfill its obligations under
this Agreement. Each party agrees to use its best efforts to the
other in obtaining any such approvals, export licenses, permits or
governmental authorizations.
12.2 Each party agrees that, unless prior written authorization is
obtained from the United States Bureau of Export Administration, it
will not export, re-export, or transship, directly or indirectly,
any products or technical information that would be in contravention
of the Export Administration Regulations then in effect as published
by the United States Department of Commerce.
13 ENVIRONMENTAL
13.1 Allocation of responsibility for environmental and employee health
and safety liabilities pre-dating the Closing shall be covered by
the terms of the Recapitalization Agreement.
13.2 Subject to the obligations of the parties set forth in the
Recapitalization Agreement with respect to Environmental
Liabilities, including Pre-Closing Liabilities, each as defined
therein, Motorola agrees to indemnify SCILLC for claims/liabilities
relating to Motorola's operations pursuant to this Agreement
involving the Release of Hazardous Substances, or non-compliance
with Environmental Laws.
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13.3 Motorola acknowledges that it is responsible for complying, and
agrees that it will comply in all material respects, with applicable
Environmental Laws, including those relating to worker health and
safety, the Release of Hazardous Substances, and the management,
storage, treatment, recycling or disposal of any waste generated as
a result of its operations pursuant to this Agreement. Motorola
acknowledges that it is the owner and generator of waste generated
from its activities pursuant to this Agreement.
14 EMPLOYEES
14.1 Motorola shall indemnify SCILLC for any severance or other
termination compensation or benefits payable in respect of any
personnel working in and supporting any manufacturing activities in
Toulouse covered by this Agreement that may be attributed to SCILLC;
provided that such indemnification shall not apply to any individual
employed by SCILLC who is a Transferred Employee (as defined in the
Employee Matters Agreement) under the Employee Xxxxxx Agreement.
15 ASSIGNMENT
15.1 This Agreement shall be binding upon, inure to the benefit of, and
be enforceable by or against the parties hereto and their respective
successors and assigns; provided, however, that neither party hereto
may assign this Agreement without the prior written consent of the
other (which consent shall not unreasonably be withheld) except to a
party that acquires all or substantially all of the assets of the
assigning party or for the account of the lenders providing bank
financing solely and specifically for the purpose of securing such
bank financing in connection with the Recapitalization Agreement and
the transactions contemplated thereby.
16 CONFIDENTIALITY
16.1 Each party will treat as confidential all Confidential Information
of the other party in accordance with the terms of the IP Agreement.
17 NOTIFICATION
17.1 Unless otherwise indicated herein, all notices, requests, demands or
other communications to the respective parties hereto shall be
deemed to have been given or made when deposited in the mails,
registered mail, return receipt requested, postage prepaid, or by
facsimile to the respective party at the following address:
If to Motorola for Motorola, Inc.
Technical 0000 Xxxxxxx Xxxxxx Xxxxx Xxxx
Xxxxxxx: Xxxxxx, Xxxxx 00000
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Facsimile Number: (000) 000-0000
Attn: Xxx Xxxx
If to Motorola: Motorola, Inc.
Law Department
0000 X. Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile Number: (000) 000-0000
Attn: General Counsel
and to Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile Number:(000) 000-0000
Attn: Xxxxx X. Xxxxx, Esq.
If to SCILLC: SCG Holding Corporation
0000 X. XxXxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile Number: (000) 000-0000
Attn: Xxxxx Xxxxxxxx
With copies to: Xxxxx Xxxxxxx
Texas Pacific Group
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile Number: (000) 000-0000
and
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxx, Esq.
Facsimile Number: (000) 000-0000
18 TRANSLATION
18.1 If this Agreement is translated into a language other than English,
the English language version will be the only version binding upon
the parties.
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19 ENTIRE AGREEMENT
19.1 This Agreement, which includes the SOW, Schedules and other
attachments, supersedes all prior discussions and writings and
constitutes the entire and only contract between the parties
relating to the activities to be performed hereunder for Contract
Products, and it may not be changed, altered or amended except in
writing and signed by duly authorized representatives of all of the
parties.
19.2 If any inconsistencies arise between the terms of this Agreement,
Schedule A, the SOW, a purchase order or any other agreement entered
into between the parties, the order of precedence in determining the
rights and obligations of the parties will be: (i) this Agreement;
(ii) Schedule A; then (iii) the SOW. Without limiting the generality
of the foregoing, any provisions in any purchase order concerning
acceptance, proprietary information, warranties, termination,
indemnification (including, without limitation, patent or other
intellectual property indemnification), changes, insurance, dispute
resolution or materials, tools, and equipment, will not govern or
affect the rights or obligations of the parties.
20 WAIVER
20.1 The failure of any party to enforce, at any time, or for any period
of time, any provision of this Agreement, to exercise any election
or option provided herein, or to require, at any time, performance
of any of the provisions hereof, will not be construed to be a
waiver of such provision, or in any way affect the validity of this
Agreement, or any part thereof, or the right of any party thereafter
to enforce each and every such provision.
21 APPLICABLE LAW AND DISPUTE RESOLUTION
21.1 New York law governs this Agreement. The parties agree that the UN
Convention for the International Sale of Goods shall not apply. The
parties will settle any claim or controversy arising out of this
Agreement in the manner set forth in Article IV.3 of the
Reorganization Agreement.
22 COMPLIANCE WITH LAWS
22.1 Both parties will comply with all applicable state, federal or local
laws, regulations or ordinances in the performance of their
respective duties and obligations under this Agreement.
23 INDEPENDENT CONTRACTOR
23.1 It is agreed that Motorola is an independent contractor for the
performance of services under this Agreement, and that for
accomplishment of the desired result SCILLC is to have no control
over the methods and means of accomplishment
14
thereof, except as specifically set forth in this Agreement. There
is no relationship of agency, partnership, joint venture, employment
or franchise between the parties. Motorola is the sole employer and
principal of any and all persons providing services under this
Agreement, and is obligated to perform all requirements of an
employer under federal, state, and local laws and ordinances.
Motorola, or its employees or agents will not be construed to be
employees of SCILLC, nor will Motorola or its employees or agents be
entitled to participate in the profit sharing, pension, or other
plans established for the benefit of SCILLC's employees.
24 SECTION TITLES
24.1 Section titles as to the subject matter of particular sections
herein are for convenience only and are in no way to be construed as
part of this Agreement or as a limitation of the scope of the
particular sections to which they refer.
25 COUNTERPARTS
25.1 This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original, but all of which shall
constitute one and the same instrument.
* * * * *
15
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives as of the date and year first set forth
above.
MOTOROLA, INC.
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxxxx
----------------------------------------
Title: Executive Vice-President and
Chief Financial Officer
----------------------------------------
SEMICONDUCTOR COMPONENTS INDUSTRIES, LLC
By: SCG Holding Corporation, its sole
member
By: /s/ Xxxxxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxxxxx
----------------------------------------
Title: Vice-President
----------------------------------------
SCG Foundry Agreement
TERM SHEET
FOUNDRY AND ASSEMBLY AGREEMENT
SCHEDULE A -- PRICES
SPS FOUNDRY PRICES TO SCG
[2 PAGES REDACTED]
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION]
TERM SHEET
FOUNDRY AND ASSEMBLY AGREEMENT
SCHEDULE A-MIN/MAX
[1 PAGE REDACTED]
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION]
APPENDIX A
STATEMENT OF WORK
[159 PAGES REDACTED]
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION]
