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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT 10.2
CONFIDENTIAL TREATMENT
PDF SOLUTIONS, INC. HAS REQUESTED
THAT THE MARKED PORTIONS OF THIS
DOCUMENT BE ACCORDED CONFIDENTIAL
TREATMENT PURSUANT TO RULE 406 UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.
INTEGRATION TECHNOLOGY AGREEMENT
THIS INTEGRATION TECHNOLOGY AGREEMENT ("this AGREEMENT") is made and
entered into as of ************** (the "EFFECTIVE DATE") by and between Conexant
Systems, Inc., a Delaware corporation ("CONEXANT") with a Tax Identification
Number of 251799439 and its principal place of business at 4311 Jamboree Road,
Newport Beach, California 92660, and PDF Solutions, Inc., a California
corporation ("PDF SOLUTIONS") with a Tax Identification Number of 25-1701361 and
its principal place of business at 333 West San Carlos Street, Suite 700, San
Jose, California 95110.
RECITALS
A. PDF Solutions possesses technology and expertise useful in
discovering, analyzing, and fixing problems in the design and manufacturing
processes that cause low yields of useable integrated circuits.
B. Conexant desires to engage PDF Solutions and receive a license to
certain technology useful to analyze its internal integrated circuit
manufacturing process, identify problems therewith, and recommend solutions
thereto, by way of methodology or otherwise, upon the terms and conditions
contained herein.
C. PDF Solutions desires to be so engaged upon the terms and conditions
contained herein.
DEFINITIONS
"ANALYSIS" refers to all interpretations, recommendations, extractions,
statistical models or other yield and performance models developed by PDF
Solutions and derived in whole or in part from Conexant's Raw Data; provided,
however, that Analysis does not include any information sufficiently detailed
that Raw Data could be feasibly re-constructed.
"CHARACTERIZATION VEHICLE" or "CV" refers to the parameterized layout structures
or circuit elements, specific implementations of said structures or circuit
elements either in computer format or layout format, and images of said
structures or circuit elements
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
historically or hereafter created or customized by PDF Solutions for the
purposes of creating a test vehicle used to characterize any given manufacturing
process. Manufacturing Designs are usually referenced in the process of
generating CVs for the purposes of optimizing or tuning the vehicle to the
targeted designs and process. The CV is used to create a Mask Set which is used
by the fabrication facility to generate test wafers.
"FOUNDRY" refers to any foundry with which Conexant has a relationship that
manufactures **** technology products for Conexant.
"MANUFACTURING DESIGNS" refers to all non-public information relating to
Conexant's manufacturing processes and integrated circuit designs (structures
and elements) used in connection with the CV to generate Raw Data.
"MASK SET" refers to translucent glass plates used as a light filter to transfer
designs onto a wafer.
"PROPRIETARY RIGHTS" shall mean all intellectual property rights including, but
not limited to, patents, patent applications, copyrights, copyright
registrations, moral rights, mask work rights, rights of authorship, industrial
design rights, trademarks, tradenames, know-how and trade secrets, irrespective
of whether such rights arise under U.S. or international intellectual property,
unfair competition or trade secret laws.
"PDF TECHNOLOGY" refers to all historically, or hereafter developed
methodologies, techniques, software, designs, CVs, problem solving processes and
practices utilized by PDF Solutions, and any modifications, compilations or
works derivative of the foregoing, excluding know-how, methodologies, techniques
or practices that are commonly known or that Conexant independently has the
right to use.
"RAW DATA" shall mean the data generated by PDF Solutions using the CV in
conjunction with Conexant's Manufacturing Design.
"******" shall be defined as the following ****************************
processes run by Conexant using
*****************************************************.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the above recitals and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Conexant and PDF
Solutions, intending to be legally bound, hereby agree as follows:
SECTION 1. TERM AND TERMINATION
1.1 Term. This Agreement shall commence on the Effective Date and shall
expire on ****************************, unless sooner terminated in accordance
with Sections 1.2, 1.3 or 1.4.
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
1.2 Termination Without Cause. Either party may upon 60 days prior
written notice to the other party, at any time and/or for any reason, terminate
this Agreement. In such case, Conexant shall pay PDF Solutions all Fixed Fees
(as defined in Exhibit "B" attached hereto) payable at the effective date of
such termination, all Reimbursements (as defined below) incurred through the
effective date of such termination and all Incentive Fees and Gainshare Fees
that would otherwise have been earned had this Agreement not been terminated;
provided that should PDF Solutions exercise its right to terminate this
Agreement under this Section 1.2 prior to ************************** PDF
Solutions shall thereby forfeit any and all right it may have in any Incentive
Fee, Gainshare Fee (as defined in Exhibit "B" attached hereto) other than
Incentive Fees and Gainshare Fees earned prior to the effective date of such
termination.
1.3 Termination for Cause. This Agreement may be terminated upon thirty
(30) days prior written notice by either party if the other party materially
breaches or fails to perform any material obligations hereunder and the
breaching party fails to cure such breach within thirty (30) days of such
written notice. Notwithstanding the foregoing, the cure period for any failure
of Conexant to pay Fees and Reimbursements due hereunder shall be 20 days from
the date of receipt by Conexant of any notice of breach relating thereto. In the
event of a termination under this Section 1.3, Conexant shall pay PDF Solutions
all Fixed Fees incurred through the effective date of such termination, all
Reimbursements incurred through the effective date of such termination and, if
PDF Solutions shall so terminate this Agreement, all Incentive Fees and
Gainshare Fees that would otherwise have been earned had this Agreement not been
terminated.
1.4 Change of Control Termination. This Agreement may be terminated upon
thirty (30) days prior written notice by either party if either party has
experienced a Change of Control and continuation under this Agreement is not
feasible, provided such notice is given within six (6) months of the
Announcement Date. If termination occurs under this Section 1.4 then both
parties will work together in good faith to agree upon a reasonable settlement
payment for dissolution of the Agreement. If the parties are unable to achieve
mutual agreement within thirty (30) days of termination notice under this
Section 1.4, then the settlement payment due to PDF Solutions shall be finally
determined in arbitration pursuant to Section 9.10; provided that the reasonable
settlement is intended to be an estimate of the Fixed Fees, Incentive Fees and
Gainshare Fees PDF Solutions would have earned for PDF Solution's efforts
extended prior to the termination under this Section 1.4.
* INCORPORATE "CHANGE OF CONTROL" DEFINITION PER ATTACHED EMAIL FROM ********
DATED 5/18/00.
1.5 Survival of Provisions. Any and all obligations and duties which
have accrued hereunder upon such termination shall survive the termination and
remain obligations and duties of the burdened party. Sections 3 (Payment for
Services and Technology) as modified by this Section 1, 4 (Proprietary Rights),
5 (Confidentiality), 6 (Representations and Warranties), 7 (Indemnity), 8
(Limitation of Liability) and 9 (Miscellaneous) shall survive the expiration or
sooner termination of this Agreement and remain binding upon the parties hereto;
provided that in the event of any termination of
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this Agreement by PDF Solutions pursuant to Section 1.3, any and all rights and
licenses granted by PDF Solutions to Conexant hereunder shall terminate
effective upon such termination; and provided that in the event of any
termination of this Agreement Conexant pursuant to Section 1.3, any and all
rights and licenses granted by Conexant to PDF Solutions hereunder shall
terminate effective upon such termination.
SECTION 2. DELIVERY OF SERVICES AND TECHNOLOGY
2.1 Scope of Services. During the term of this Agreement, PDF Solutions
shall furnish the PDF Technology and related services (the "SERVICES AND
TECHNOLOGY") described in detail in Exhibit "A" attached hereto (the "SCOPE OF
SERVICES AND TECHNOLOGY"). The manner and means used by PDF Solutions to provide
the Services and Technology are in the sole discretion and control of PDF
Solutions. The Scope of the Services and Technology shall be governed by the
terms and conditions of this Agreement.
2.2 Standard for Performance. PDF Solutions shall perform and deliver
the Services and Technology under this Agreement in accordance with the
standards and practices of care consistent with the quality of services PDF
Solutions performs for its other similarly situated clients. PDF Solutions at
all times shall provide such number of qualified and skilled personnel to
perform and deliver the Services and Technology in accordance with the quality
standards, time frames and other requirements set forth in this Agreement. PDF
Solutions shall utilize and comply with the relevant portions of any regulatory
standards applicable to the provision of the Services and Technology. PDF
Solutions shall promptly repair or replace at its own expense all damages, scars
or disfigurements to any materials or property that is part of, or contained in,
Conexant's work site that are the result of the methods or materials used or
employed by PDF Solutions, its personnel or its other agents.
2.3 Conexant Assistance. Subject to Section 5 (Confidentiality),
Conexant will provide PDF Solutions with such information, materials, technology
and Proprietary Rights as PDF Solutions shall reasonably require in order to
perform and deliver the Services and Technology as specified in the Scope of
Services and Technology.
2.4 Mutual Cooperation; Schedule. Conexant and PDF Solutions agree to
cooperate in good faith to achieve completion of the services specified in
Exhibit A in a timely and professional manner. Conexant understands and agrees
that PDF Solutions' provision of the Services and Technology may depend on
Conexant completing certain tasks or adhering to certain schedules within
Conexant's control. Consequently, the schedule for completion of the services
specified in Exhibit A or any portion thereof may require adjustments or changes
in the event such tasks are not completed as anticipated. PDF Solutions shall
bear no liability or otherwise be responsible for delays in the provision of
services specified in Exhibit A or any portion thereof proximately caused by
Conexant's failure to complete a reasonable Conexant task or adhere to a
reasonable Conexant schedule. PDF Solutions shall provide prior written notice,
allowing reasonable time for Conexant to act on the notice, of any Conexant task
and/or Conexant schedule upon which PDF Solutions is depending on to perform
services specified in Exhibit A. Conexant shall bear no liability or otherwise
be responsible for delays in the provision of services
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
specified in Exhibit A or any portion thereof proximately caused by a Foundry's
failure to complete tasks or schedules upon which Conexant and PDF Solutions may
depend.
2.5 Right to Perform Services for Others. Conexant acknowledges that PDF
Solutions has extensive expertise, experience, technology and proprietary
products and tools in the area of electronic design and yield improvement and
that PDF Solutions intends to utilize such expertise, experience, products and
tools in providing consulting services and other services to other clients.
Subject to PDF Solutions' compliance with the confidentiality provisions stated
herein, nothing in this Agreement shall restrict or limit PDF Solutions from
performing such design consulting or other services to any other entity in any
industry, including the semiconductor and electronics industries. Conexant
agrees that, except as otherwise agreed in this Agreement, PDF Solutions and its
employees may provide design consulting services similar in nature to the
Services and Technology for any third parties both during and after the term of
this Agreement. Subject to the limitations placed on PDF Solutions by this
Agreement or by any existing Non-Disclosure Agreement between PDF Solutions and
Conexant, PDF Solutions may in its sole discretion develop, use, market,
license, offer for sale, or sell any software, application or product that is
similar or related to that which was developed by PDF Solutions for Conexant
hereunder.
SECTION 3. PAYMENT FOR SERVICES AND TECHNOLOGY
3.1 Fees. As compensation for the Services and Technology, Conexant
shall pay to PDF Solutions the fees ("FEES") set forth in Exhibit "B" attached
hereto.
3.2 Expenses. Conexant shall also reimburse PDF Solutions for its
reasonable out-of-pocket expenses incurred in carrying out its obligations under
this Agreement including, but not limited to, travel, hotel, meals, document
production and other customary business expenses directly related to the
Services and Technology ("REIMBURSEMENT"). Travel, other than trips to
Conexant's office or fabrication facilities, shall be in accordance with
Conexant's travel policy (provided that PDF Solutions may select its own travel
agency). Reimbursement for expenses incurred in an amount of up to
*********************** in any calendar month shall not require the written
approval of Conexant; provided, however, that any extraordinary
engagement-related purchases including, but not limited to, expenses for mask
production, equipment purchases, on-site facilities and communications services,
must receive Conexant's prior written authorization. Conexant shall not have any
liability to PDF Solutions for any Reimbursement for expenses incurred in an
amount in excess of ******************** in any calendar month, unless such
expenses are approved in writing by the designated individual(s) set forth in
Exhibit "C" attached hereto. Reimbursement shall be made only upon presentation
by PDF Solutions of mutually agreed upon documentation substantiating the amount
and purpose of such expense.
3.3 Invoice. PDF Solutions shall bill Conexant as agreed herein for
Services and Technology pursuant to an invoice delivered on a monthly basis.
Each invoice shall be accompanied by a reasonably detailed breakdown of the
invoiced amount. Invoices shall be mailed to:
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
Conexant Systems, Inc.
4311 Jamboree Road, PO Box 7370
Newport Beach, CA 92658-7370
Attention: Accounts Payable
3.4 Payment of Invoices. All payments by Conexant hereunder shall be
made by corporate or other check. All invoices shall be due and payable within
thirty (30) days after the date of invoice. Amounts not paid in accordance
herewith shall be subject to a late charge equal to ***********************
(1.5%) per month (or, if less, the maximum allowed by applicable law). Without
prejudice to other remedies available, PDF Solutions reserves the right to
suspend performance and delivery of Services and Technology until such
delinquency is corrected, provided that PDF Solutions shall give written notice
of payment delinquency and shall give ************ advance written notice of its
intention to suspend performance. The amounts payable to PDF Solutions hereunder
are exclusive of any sales or use or other taxes or governmental charges.
Conexant shall be responsible for payment of all such taxes or charges except
for any taxes based solely on PDF Solutions' net income. If Conexant is required
to pay any taxes based on this Section 3.4, Conexant shall pay such taxes with
no reduction or offset in the amounts payable to PDF Solutions hereunder.
SECTION 4. PROPRIETARY RIGHTS
4.1 Ownership. Conexant and PDF Solutions acknowledge and agree that, as
between them, ownership shall be as follows:
(a) PDF Solutions is the exclusive owner of all PDF Technology
and all Proprietary Rights in the PDF Technology;
(b) Conexant is the exclusive owner of all Analysis,
Manufacturing Designs, Raw Data and all Proprietary Rights in the Analysis,
Manufacturing Design and the Raw Data; and
(c) Conexant is the exclusive owner of Mask Sets.
To the extent the law would provide for ownership other than as provided
herein, (y) Conexant hereby assigns to PDF Solutions its right, title and
interest in and to the PDF Technology and the Proprietary Rights in the PDF
Technology and (z) PDF Solutions hereby assigns to Conexant its right, title and
interest in and to the Analysis, Manufacturing Designs, Raw Data and the
Proprietary Rights in the Analysis, Manufacturing Designs and Raw Data, and in
the Mask Sets.
4.2 Grant of License by PDF Solutions. Subject to the terms and
conditions of this Agreement, including the timely payment of Fees, PDF
Solutions hereby grants to Conexant and its subsidiaries, a ******************
************************************************* license *********************
to use the PDF Technology and associated Proprietary Rights disclosed by PDF
Solutions under this Agreement, but only to the extent PDF Solutions has the
right to grant such license; provided that such license is only for use of PDF
Technology in connection with the development, manufacture and
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
fabrication of *********** technology products of Conexant and its
majority-owned subsidiaries. The foregoing license includes all PDF Technology
disclosed by PDF Solutions in its work for Conexant hereunder (including
methodologies or practices observed by Conexant personnel in the course of PDF
Solutions' work hereunder); provided, however, that specifically excluded from
this license of PDF Technology is any and all software or software tools or
software manuals and documentation. Conexant shall be bound by and shall cause
its sublicensees to be bound by the confidentiality obligations contained in
Section 5 or obligations at least as restrictive as the confidentiality
obligations contained in Section 5. Except as specifically provided herein,
Conexant shall not disclose or license PDF Technology to any third party.
Conexant understands that PDF Solutions will not disclose to Conexant certain
proprietary methods or trade secrets in connection with the services to be
rendered by PDF Solutions hereunder. To this end, PDF Solutions retains the
right to take industry standard measures to keep such proprietary methods or
trade secrets from Conexant, unless the same defeats or substantially impedes
the Scope of Services and Services and Technology under Section 2 of this
Agreement. This Section 4.2 shall not limit or alter any other Software license
or rights that may exist between the parties under a separate agreement.
4.3 Grant of License by Conexant. Subject to the terms and conditions of
this Agreement, Conexant hereby grants to PDF Solutions ***********************
******************************************************** license ***********,
but only to the extent Conexant has the right to grant such license, as follows:
(a) to incorporate Conexant's Manufacturing Designs in CVs at any
time during the term solely for the purpose of performing under this Agreement;
(b) to use, copy, compile, manipulate, analyze or reproduce Raw
Data and the Mask Sets solely for the purpose of performing under this
Agreement; and
(c) to use and rely upon Raw Data and Analysis from any Foundry
for any purpose, including with other customers of PDF Solutions; provided,
however that (i) PDF Solutions shall not use and rely upon CVs incorporating
Conexant's Manufacturing Designs, Raw Data or Analysis from any Foundry for any
other customers for a period of four months from the date of CV approval by
Conexant and (ii) PDF Solutions may itself rely upon, but shall not disclose or
deliver Raw Data to any third party. (iii) PDF Solutions shall be bound by and
shall cause its sublicensees to be bound by the confidentiality obligations
contained in Section 5 or obligations at least as restrictive as the
confidentiality obligations contained in Section 5. Conexant will, in good
faith, work with PDF Solutions and Foundry to encourage Foundry to provide any
required consents or licenses in accordance with this Section 4.
4.4 No Other Rights. Except as otherwise set forth in this Section 4,
neither this Agreement nor performance and delivery of the Services and
Technology shall give either PDF Solutions or Conexant any ownership, interest
in, or rights to, the Proprietary Rights owned or provided by the other party.
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
SECTION 5. CONFIDENTIALITY
Both parties hereto acknowledge and agree that they are parties to that certain
Master Non-Disclosure Agreement numbered ****************, the "Master NDA"
pursuant to which they have exchanged confidential and/or proprietary
information under cover of various Confidential Information Transmittal Records
("CITR'S"). Both parties further acknowledge that the Raw Data developed
pursuant to PDF Solutions' services to Conexant under this Agreement shall be
deemed Confidential and shall not be disclosed. Both parties agree that this
Agreement shall not modify, alter or extinguish the Master NDA nor any CITR's
currently existing or to be executed in the future. The parties acknowledge and
agree that during the course of the performance of the mutual obligations
hereunder, each party will occasionally deliver to the other party certain
information (including proprietary information, technical data, trade secrets,
know-how, research, software, developments, inventions, processes, design flows,
methods, methodologies, formulas, algorithms, technologies, designs, drawings,
engineering, hardware configuration information, yield data or other similar
information, and related documentation and information) which the disclosing
party deems to be confidential or proprietary. Such information shall be
considered and treated hereunder as proprietary and other confidential
information if it is marked as "Confidential" or "Proprietary" (hereinafter
referred to as "CONFIDENTIAL INFORMATION"): (i) by stamp or legend if
communicated in writing or other tangible form, or (ii) orally at the time of
disclosure with a written confirmation within thirty days describing the
Confidential Information communicated orally. All restrictions as to use and
disclosure shall apply during such thirty day period. Any recipient of
Confidential Information disclosed pursuant to this Agreement shall hold the
Confidential Information in strictest confidence and shall protect the
Confidential Information by using the same degree of care, but no less than a
reasonable degree of care, to prevent the unauthorized use, disclosure,
dissemination or publication of the Confidential Information as the recipient
uses to protect its own comparable confidential and proprietary information. Any
permitted reproduction of Confidential Information shall contain all
confidential or proprietary legends which appear on the original. If the
disclosing party discloses any software, the recipient is prohibited from
disassembling, decompiling, reverse-engineering or otherwise attempting to
discover or disclose the disclosing party's software or methods or concepts
embodied in such software. Subject to the licenses granted in Section 4, upon
receipt of the written request of the disclosing party, the receiving party will
return, or give written certification of the destruction of all Confidential
Information in any tangible or digital form, including all copies thereof
whether on paper or in digital form, which are in the recipient's possession or
control. The recipient will immediately notify the disclosing party in the event
of any loss or unauthorized disclosure of Confidential Information. The above
restrictions on use and disclosure shall not apply to any Confidential
Information that: (1) is in the public domain or in the possession of the
recipient without restriction at the time of receipt under this Agreement
through no wrongful act or omission of the recipient, (2) is used or disclosed
with the prior written approval of the disclosing party, (3) is used or
disclosed after *** years from the date of expiration or earlier termination of
this Agreement, (4) is independently developed by the recipient without breach
of this Agreement which independent development is supported by reasonable
contemporary evidence, (5) becomes known to the recipient from a source other
than the disclosing party without breach of this
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
Agreement by the recipient or any other wrongful act or omission by recipient or
any third party; or (6) is required to be disclosed pursuant to law, provided
the recipient uses reasonable efforts to give the disclosing party reasonable
notice of such required disclosure sufficient to give the disclosing party the
opportunity to contest such disclosure. The obligations of confidentiality shall
survive the expiration or sooner termination of this Agreement for a period of
**************** thereafter. Disclosing party assumes no responsibility or
liability whatever under this Agreement for any use of Confidential Information
by the recipient or its customers or agents. Nothing in this Agreement shall
restrict recipient's discretion to transfer or assign its personnel, providing
the obligations of recipient under this Agreement are otherwise met. Each party
understands that the other party may currently or in the future be developing
information internally, or receiving information from third parties that may be
similar to the Confidential Information. Accordingly, nothing in this Agreement
will be construed as a representation or inference that either party will not
develop products, or have products developed for it, or enter into joint
ventures, alliances, or licensing arrangements that, without violation of this
Agreement, compete with the products or systems embodying the Confidential
Information. Further, subject to the provisions of Section 4, either party shall
be free to use for any purpose the "residuals" resulting from access to or work
with such Confidential Information, provided that such party shall maintain the
confidentiality of the Confidential Information as provided herein. The term
"RESIDUALS" means information in non-tangible form, which may be retained by
persons who have had access to the Confidential Information, including ideas,
concepts, know-how or techniques contained therein. Neither party shall have any
obligation to limit or restrict the assignment of such persons or to pay
royalties for any work resulting from the use of residuals. The parties do not
intend that any agency or partnership relationship be created between them by
this Agreement. Each party hereto recognizes and agrees that there is no
adequate remedy at law for a breach of this Section 5, that such a breach would
irreparably harm the disclosing party and that the disclosing party shall be
entitled to seek equitable relief (including, without limitation, injunctions)
with respect to any such breach or potential breach in addition to any other
remedies.
SECTION 6. REPRESENTATIONS AND WARRANTIES
6.1 Corporate Warranties. Each party hereby represents and warrants to
the other party that: (i) it is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it was organized, (ii) the
person executing this Agreement on behalf of each party is duly authorized to
bind such party to all terms and conditions of this Agreement, (iii) this
Agreement, when executed and delivered by each party, will be the legal, valid,
and binding obligation of such party, enforceable against it in accordance with
its terms, and (iv) the execution, delivery and performance of this Agreement by
each party does not and will not conflict with or constitute a breach or default
under such party's charter documents, delegations of authority, or any material
agreement, contract or commitment of such party, or require the consent,
approval or authorization of, or notice, declaration, filing or registration
with, any third party or governmental or regulatory authority.
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6.2 Infringement. PDF Solutions warrants that it is not aware of
infringement or alleged infringement of its deliverables under third parties'
intellectual property rights.
6.3 Disclaimer of Warranties. THE WARRANTIES STATED IN THIS SECTION 6
ARE PARTIES' SOLE AND EXCLUSIVE WARRANTIES PERTAINING TO THE SUBJECT MATTER OF
THIS AGREEMENT, AND EACH PARTY HEREBY DISCLAIMS ANY OTHER WARRANTY, EXPRESS OR
IMPLIED, WRITTEN OR ORAL, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF TITLE,
MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE. NOTHING
UNDER THIS AGREEMENT, OR THE STATEMENT OF WORK OR PROJECT SHALL BE DEEMED TO BE
A WARRANTY AS TO THE OUTCOME OF ANY PROJECT OR THE EFFICACY OF ANY
RECOMMENDATIONS MADE BY PDF SOLUTIONS. NOTHING UNDER THIS AGREEMENT OR THE
STATEMENT OF WORK SHALL BE DEEMED TO CREATE ANY LIABILITY ON THE PART OF EITHER
PARTY WITH RESPECT TO THE OUTCOME OF A PROJECT OR ANY ACTIONS TAKEN BY CONEXANT
OR THE PDF SOLUTIONS AS A CONSEQUENCE OF THE OTHER PARTIE'S RECOMMENDATIONS.
6.4 Limitation. Nothing in this Agreement shall extend the time or
remedies allowable under law or remedy for either party to file an action
against the other party.
SECTION 7. INDEMNIFICATION
7.1 Infringement Indemnity. PDF Solutions shall defend or settle at PDF
Solutions' expense any claim ("CLAIM") brought against Conexant that the
Services and Technology and/or any tangible or intangible delivered in
connection therewith impermissibly contains third party's proprietary rights,
trade secrets, patents or copyrighted materials or that Conexant's use of any
such materials, as permitted hereunder, infringes any United States, Singapore,
Korean, Japanese, or Taiwanese patent; provided that such indemnification shall
not extend (a) to any infringement by Conexant's designs or products, provided
such designs, processes or products are not influenced by PDF Solutions in a way
that renders it infringing, (b) to the extent any infringement results from any
infringement contained in any technical data, Manufacturing Designs, Mask Sets
or materials or reports or information provided by Conexant. The indemnification
obligations set forth above in this Section 7 are subject to the conditions that
the Indemnified Party: (i) gives prompt written notice of the Claim to the
Indemnifying Party, (ii) gives the PDF Solutions the exclusive authority to
control and direct the defense or settlement of such Claim, provided that the
PDF Solutions does not take adopt any positions that may be prejudicial to
Conexant and (iii) gives the PDF Solutions, at the Indemnified Party's own
expense (except for the value of the Indemnified Party's employees' time), all
reasonably necessary information and reasonable assistance with respect to such
Claim. PDF Solutions shall pay all amounts paid in settlement and all damages
and costs awarded with respect to such Claim. PDF Solutions will not be liable
for any costs or expenses incurred without its prior written authorization. In
the event of any Claim under this Section 7.2, PDF Solutions shall have the
option, at its election, to (a) obtain a license to permit continued use of the
allegedly infringing item or practice, (b) modify the allegedly
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infringing item or practice to avoid continued infringement provided the
modified item or practice is substantially equivalent, (c) procure or provide a
substantially equivalent substitute for the allegedly infringing item or
practice or (d) if PDF Solutions is unable to achieve (a), (b) or (c) after best
efforts, then PDF Solutions may require that Conexant cease use of the
infringing item or practice as soon as feasible and terminate this Agreement and
refund all Incentive Fees and Gainshare Fees paid by Conexant to PDF Solutions.
SECTION 8. LIMITATION OF LIABILITY
THE LIABILITY OF EITHER PARTY AND OF SUCH PARTY'S OFFICERS, DIRECTORS,
EMPLOYEES, CONTRACTORS AND AGENTS, TAKEN AS A WHOLE, WHETHER IN TORT, CONTRACT
OR OTHERWISE, AND NOTWITHSTANDING ANY FAULT, NEGLIGENCE, STRICT LIABILITY OR
PRODUCT LIABILITY OF SUCH PARTY OR OF ITS OFFICERS, DIRECTORS, EMPLOYEES, OR
AGENTS OR FAILURE OF ESSENTIAL PURPOSE, WITH REGARD TO ANY SERVICES OR OTHER
ITEMS FURNISHED UNDER THIS AGREEMENT SHALL IN NO EVENT EXCEED THE AGGREGATE
COMPENSATION PAID BY CONEXANT TO SERVICE PROVIDER HEREUNDER. NOTWITHSTANDING
ANYTHING TO THE CONTRARY IN THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE
LIABLE FOR ANY CLAIM FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL
DAMAGES, COVER OR ANY LOSS OF DATA, PROFIT, REVENUE OR USE UNDER ANY THEORY OF
LAW OR FOR ANY CAUSE OF ACTION.
SECTION 9. MISCELLANEOUS
9.1 Publicity. Neither party shall disclose the terms of this Agreement
to any third party, or in any manner advertise or publish statements to such
effect, without the prior written consent and mutual agreement as to the
content, medium, and manner of the public announcement of the other party.
Conexant agrees to work in good faith with PDF Solutions to produce two mutually
acceptable public announcements of PDF Solutions' engagement with Conexant under
this Agreement. Notwithstanding the above, should one of the parties be required
to disclose either the existence or terms of this Agreement to a court of law, a
governmental agency, an auditor or a bank, such party may do so without the
prior written consent of the other party provided that the disclosing party: (i)
notifies the recipient of the confidential nature of the information, (ii)
requests confidential treatment of such information, (iii) limits the disclosure
to only such information as is required under the circumstances, and (iv)
delivers prompt notice to the other party of such requested or actual
disclosure.
9.2 Assignment. Neither party shall assign, delegate, or subcontract any
portion of its rights, duties, or obligations under this Agreement without the
prior written consent of the other party, which consent will not be unreasonably
withheld or delayed, provided that PDF Solutions may utilize the services of
consultants whose services it utilizes on a regular basis.
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9.3 Changes. No modification to this Agreement will be binding unless in
writing and signed by a duly authorized representative of each party. Change
orders affecting any Scope of Services will not be effective until reviewed and
approved in writing by PDF Solutions and Conexant and attached to this
Agreement. PDF Solutions will submit to Conexant a report on how the proposed
changes will affect the current Services including the effect on the time
schedule and cost estimates. The parties will have no obligation to proceed with
changed work until both parties have approved the change in writing. Conexant
will be under no obligation to pay for work performed under a change order
without prior written authorization in accordance herewith.
9.4 Notices. All notices or correspondence pertaining to this Agreement
shall be in writing, delivered by either first class mail with receipt or by
facsimile with receipt. Such notice shall be effective upon the earlier of
actual receipt or the expiration of three days following the date of mailing to
the addresses as follows, or such alternative address the parties may designate
in the future:
To Conexant:
Conexant Systems, Inc.
4311 Jamboree Rd.
Newport Beach, CA 92660
Attn: Manager, Contracts
Tel: (949) 483-6610
Fax: (949) 483-4176
To PDF Solutions:
PDF Solutions, Inc.
333 West San Carlos Street
Suite 700
San Jose, CA 95110
Attn: Chief Financial Officer
Tel: (408) 938-6445
Fax: (408) 938-6478
9.5 Independent Contractors. PDF Solutions and Conexant shall perform
their obligations under this Agreement as independent contractors, and nothing
contained in this Agreement shall be construed to create or imply a joint
venture, partnership, principal-agent or employment relationship between the
parties. Neither party shall take any action or permit any action to be taken on
its behalf which purports to be done in the name of or on behalf of the other
party and shall have no power or authority to bind the other party to assume or
create any obligation or responsibility express or implied on the other party's
behalf or in its name, nor shall such party represent to any one that it has
such power or authority.
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
9.6 Force Majeure. Neither party shall be liable to the other party for
any loss, damage, or penalty arising from delay due to causes beyond its
reasonable control including acts of God, acts of government, war, riots, or
embargoes.
9.7 Severability. If any term or provision of this Agreement is
determined to be invalid or unenforceable for any reason, it shall be adjusted
rather than voided, if possible, to achieve the intent of the parties to extent
possible. In any event, all other terms and provisions shall be deemed valid and
enforceable to the maximum extent possible.
9.8 Insurance. PDF Solutions shall carry Workers' Compensation and
Comprehensive General Liability Insurance (including Products, Contractual, and
Automobile Liability) in such form as to protect PDF Solutions and Conexant,
their directors and officers, and the agents and employees as additional
insureds from any claims or omissions of PDF Solutions under this Agreement. PDF
Solutions shall furnish Conexant with a Certificate(s) of Insurance evidencing
limits of liability not less than *********** combined single limit per
occurrence for bodily injury, including death and property damages, prior to
performing any services on site at Conexant's facility. Such insurance shall be
primary and non-contributing to any insurance maintained or obtained by Conexant
and shall not be canceled or materially reduced without thirty (30) days
prior written notice to Conexant. PDF Solutions agrees to waive any rights of
subrogation PDF Solutions or PDF Solutions' insurers may have against Conexant
under applicable Workers' Compensation laws.
9.9 Export Control Laws and Regulations. Each party, for itself and any
of its employees and agents who may be given access by such party to technical
information pursuant to the performance of the Services hereunder, acknowledges
its obligations to control access to such technical information and to ensure
that such access does not result in a violation of the U.S. Export Control Laws
and Regulations.
9.10 Disputes. If any claim or controversy arises out of this Agreement,
the parties shall first make a good faith attempt to resolve the matter through
a designated executive officer. The officers having cognizance of the subject
matter of the Agreement for each of the parties shall first meet and make a good
faith attempt to resolve such controversy or claim. In the event such good faith
negotiation fails to settle any dispute within sixty (60) days from
notice of such dispute, the parties shall endeavor to resolve such dispute
arising out of this Agreement by mediation in either Santa Clara County, Orange
County or Los Angeles County California or at such other place as the parties
hereto mutually agree upon, in accordance with the Center for Public Resources
(CPR) Model Procedure for Mediation of a Business Dispute. Unless the parties
agree otherwise, the mediator will be selected from the CPR Panels of
Distinguished Neutrals and each party shall be responsible for its own costs
associated with such mediation. If the matter has not been resolved pursuant to
the aforementioned mediation procedure within sixty (60) days of the
initiation of such procedure, the controversy shall be settled by binding
arbitration by one or three arbitrators, (if three are used, each party shall
select one, and the third shall be selected by mutual agreement of the parties),
conducted in accordance with the Commercial Arbitration Rules of the American
Arbitration Association and judgment upon the award rendered by the
arbitrator(s) may be entered by
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any court having jurisdiction thereof. The arbitrator(s) shall not be empowered
to award damages in excess of, and/or in addition to, actual damages, including
punitive damages, and the arbitrator(s) shall deliver a reasoned opinion in
connection with his/her/their decision. Nothing herein, however, shall prohibit
either party from seeking injunctive relief if such party would be substantially
prejudiced by a failure to act during the time that such good faith efforts are
being made to resolve the claim or controversy. In the event either party seeks
injunctive relief, the parties agree that jurisdiction will be before a state or
district court seated in either Santa Clara County, Orange County or Los Angeles
County, California. All deadlines in this Section 9.10 may be extended by mutual
agreement.
9.11 Governing Law. This Agreement and any and all disputes arising
hereunder shall be governed by the internal laws of the State of California.
This Agreement is prepared and executed and shall be interpreted in the English
language only, and no translation of the Agreement into another language shall
have any effect. The parties agree that the United Nations Convention on
Contracts for the International Sale of Goods (1980) is specifically excluded
from and shall not apply to this Agreement.
9.12 Waiver. The failure of any party hereto to enforce at any time any
of the provisions of this Agreement or to require at any time performance by the
other party of any of the provisions of this Agreement, or any part hereof,
shall not be construed to be a waiver of said provision or to effect the right
of any party to enforce each and every provision in accordance with the terms of
this Agreement.
9.13 Interpretation. In the event that any term of the Scope of Services
conflicts with the terms of this Agreement, the terms of this Agreement shall
take precedence.
9.14 Non-Solicitation. Conexant shall not actively solicit or influence
or attempt to influence any person employed by PDF Solutions to terminate or
otherwise cease his or her employment with PDF Solutions or become an employee
of Conexant. PDF Solutions shall not actively solicit or influence or attempt to
influence any person employed by Conexant to terminate or otherwise cease his or
her employment with Conexant or become an employee of PDF Solutions.
9.15 Drafter. Neither party will be deemed the drafter of this
Agreement, which Agreement will be deemed to have been jointly prepared by the
parties. If this Agreement is ever construed, whether by a court or by an
arbitrator, such court or arbitrator will not construe this Agreement or any
provision hereof against any party as drafter.
9.16 Entire Agreement. As noted in Section 5 relating to
confidentiality, the parties hereto have a separate confidentiality agreement in
place that will not be affected by this Agreement. The parties also acknowledge
that PDF Solutions is not providing or licensing to Conexant under this
Agreement any existing software programs or products and anticipate that they
will enter into a Software Evaluation and/or Software License Agreement related
to the subject matter hereof. Such agreement shall also not be affected by this
Agreement. Other than these specified agreements, this Agreement shall
constitute the entire agreement between the parties with respect to the subject
matter hereof and: (i) shall supersede all prior contemporaneous oral or written
communications, proposals and
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representations with respect to its subject matter, and (ii) shall prevail over
any conflicting or additional terms of any statement of work, quote, order
acknowledgment or similar communication between the parties during the term of
this Agreement.
9.17 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together will constitute
one and the same instrument.
9.18 Exhibits. Exhibits "A," "B" and "C" attached hereto are
incorporated herein by this reference as if fully set forth herein.
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IN WITNESS WHEREOF, the parties hereto have executed this Services
Agreement as of the date(s) set forth below to be effective as of the Effective
Date.
PDF SOLUTIONS, INC., A CALIFORNIA CONEXANT SYSTEMS, INC., A DELAWARE
CORPORATION CORPORATION
By: /s/ P.S. Melman By: /s/ James Spoto
-------------------------------- ---------------------------------------
Name: P.S. Melman Name: James P. Spoto
------------------------------ -------------------------------------
Title: CFO Title: Senior VP, *********************
----------------------------- Group
Date: 5/18/00 ------------------------------------
------------------------------ Date: 5/16/00
------------------------------------
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT "A" TO SERVICES AGREEMENT - SCOPE OF SERVICES AND TECHNOLOGY
This Exhibit specifies in detail the Services and Technology to be
performed by PDF Solutions during the term of this Agreement.
PROJECT DESCRIPTION & GOALS
PDF Solutions agrees to provide Conexant with ************ services for all of
Conexant's products targeted for ***** technology. Services in support of these
products are divided into two major components: (1) CONEXANT'S
******************* ******* AND (2) CONEXANT'S ****************
*********************.
The primary goals of the project are (1) to accelerate Conexant's historical
yield ramp rates at ********************** and (2) to improve Conexant's yield
****************** management of products ***********************************
At **********************, PDF Solutions and Conexant will jointly attempt to
improve Conexant's ********************** the estimated month the ****** process
will be brought to mass production. The project will target to improve yield in
the range of ************** after ***************. The specified **************
improvement target represents the project goal with no implicit performance
obligations on either party. PDF Solutions agrees to provide Conexant with yield
improvement recommendations for the ***** ******* and to assist in its
implementation.
PDF Solutions and Conexant will also jointly implement a ***************
***************** for the purpose of ******************************************
************************************** for the ***** process. The system will
also provide insight to both PDF Solutions and Conexant to improve product
yields through changes in ********************************************
PROJECT ACCOUNTABILITY
PDF Solutions will maintain an engagement manager to lead the project effort
throughout the duration of the project. PDF Solutions' engagement manager
currently assigned to the ****** process project is **********************.
************** will report to ***************************. Conexant will also
maintain a project leader to lead the project effort and Conexant team for the
****** process. ***************** is currently assigned as Conexant's project
leader. ********* will serve as the primary point of contact for **************
or other Conexant representatives regarding project status and updates.
REPORTS AND DOCUMENTATION
PDF Solutions agrees to provide at minimum bi-weekly updates to *************.
PDF Solutions will provide a written summary report with a formal presentation
to Conexant after the *******************************************************
phases.
******************* ***********************************
This component of the project is described below in the following *** phases.
Phases may be amended upon written notice to more appropriately achieve the
targeted project goals.
17 CONFIDENTIAL
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
- ------------------------------------------------------------------------------------------
PROJECT PHASE PDF SOLUTIONS WORK STEPS ESTIMATED
DURATION
- ------------------------------------------------------------------------------------------
***********
***********
- ------------------------------------------------------------------------------------------
*********** - ***********
***********
- ------------------------------------------------------------------------------------------
*********** - ***********
***********
-
-
- ------------------------------------------------------------------------------------------
*********** - ***********
***********
-
-
-
- ------------------------------------------------------------------------------------------
**** - ***********
***********
(Level 2)
- ------------------------------------------------------------------------------------------
**** - ***********
***********
(Level 3)
- ------------------------------------------------------------------------------------------
DELIVERABLES: ********************** *********** SYSTEM
PDF Solutions agrees to provide Conexant the following deliverables:
- ------------------------------------------------------------------------------------------
ESTIMATED
DELIVERABLE DESCRIPTION DELIVERY PERIOD
- ------------------------------------------------------------------------------------------
*********** - ***********
***********
-
- ------------------------------------------------------------------------------------------
*********** - ***********
***********
- ------------------------------------------------------------------------------------------
18 CONFIDENTIAL
19
CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
*********** SYSTEM
PDF Solution agrees to develop, *********** *********** for all of Conexant's
***********. Data to be used to manage potential improvements to Conexant's
*********** process (only if necessary) to increase yield.
- ------------------------------------------------------------------------------------------
ESTIMATED
PROJECT PHASE PDF SOLUTIONS WORK STEPS DURATION
- ------------------------------------------------------------------------------------------
*********** - *********** ***********
***********
- ------------------------------------------------------------------------------------------
*********** - ***********
*********** ***********
- ------------------------------------------------------------------------------------------
*********** *********** ***********
- ------------------------------------------------------------------------------------------
*********** *********** ***********
- ------------------------------------------------------------------------------------------
*********** ***********
***********
***********
*********** ***********
- ------------------------------------------------------------------------------------------
*********** ***********
***********
- ------------------------------------------------------------------------------------------
DELIVERABLES: ***********
PDF Solutions agrees to provide Conexant the following deliverables:
- -----------------------------------------------------------------------------------------
ESTIMATED
DELIVERABLE DESCRIPTION DELIVERY PERIOD
- -----------------------------------------------------------------------------------------
*********** ***********
*********** *********** ***********
- -----------------------------------------------------------------------------------------
*********** ***********
***********
*********** ***********
- -----------------------------------------------------------------------------------------
*********** ***********
*********** *********** ***********
- -----------------------------------------------------------------------------------------
*********** *********** ***********
***********
- -----------------------------------------------------------------------------------------
REQUIREMENTS FROM CONEXANT
PDF Solutions believes the following is necessary to enable the successful
completion of this project: Conexant agrees to run *********** *********** at
the *********** facility. Conexant agrees to run *********** at each ***********
******** products on an as-needed basis. Conexant shall not be responsible for
*********** delays or refusal to cooperate with the terms of this agreement.
19 CONFIDENTIAL
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
GENERAL
The Services and Technology specifically contemplate the acceleration of
Conexant's historical ********** rates at *********** (with anticipated yield
improvement of **************** projections after ***********); and the
improvement of Conexant's yield ************** and management of ***********
products targeted **************************** (with anticipated yield
improvement above ******************************** *********** products).
Conexant agrees to pay three types of fees associated with the Services and
Technology: a *********** (the "FIXED FEE"), an *********** with conditions
described below (the "INCENTIVE FEE") and a variable Gainshare fee paid over
************************************** and calculated according to the Gainshare
Fee Calculation models defined below ("GAINSHARE FEE") (collectively referred to
as "FEES"). ***************** ***************************. Conexant shall not
have any liability to PDF Solutions for any Fees incurred in an amount in excess
of ***********.
PDF Solutions agrees and acknowledges that Conexant does not guarantee a minimum
production volume either expressly, impliedly or otherwise, for any purpose
whatsoever, including the calculation of any and all Fees under this Exhibit B.
FIXED FEE
PDF Solutions shall invoice Conexant the Fixed Fee on a monthly basis at
***********per month for services rendered from *********** to *********** and
********* per month for services rendered after ************************** and
Conexant shall pay such invoices in accordance with this Agreement. If the term
of this Agreement is extended with prior written approval, both parties may
elect to continue services under this Agreement at a Fixed Fee rate of
*******************.
***************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*************************************************************
**********************************************************. ******************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*************************.
GAINSHARE FEE
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
***************.
20 CONFIDENTIAL
21
CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
PRODUCT VOLUME EXCLUDED FROM GAINSHARE FEE COGS REDUCTION CALCULATIONS
The following volume shall be excluded from the calculation of the defect
density for both **************************** and Conexant ********* ********
run at *******:
- - Pre-production lots
- - Engineering lots
- - Lots adversely affected by equipment failures or malfunctions.
- - Lots adversely affected by non-qualified PM adjustments. Non-qualified means
equipment introduced not verified to process tolerances. Conexant and PDF
Solutions agree to review the qualification process by ***********. Conexant
may elect not to make any changes suggested by PDF Solutions that are deemed
unreasonable or beyond Conexant's control.
- - Mis-processed lots or lots otherwise adversely affected by mishandling.
- - Products identified with yield issues that are not adequately addressed
during the engineering phase and prematurely introduced into mass
production for reasons beyond PDF Solutions' control. For products to be
considered under this exclusion, products must be first identified by PDF
Solutions during the engineering phase as products to be excluded from the
calculations. In such an event, products will be excluded from the
calculations for a grace period of ************** after date product is
identified by PDF Solutions by written notice.
GAINSHARE FEE CALCULATION SCHEDULE
Gainshare Fee is to be calculated quarterly, but accumulated monthly. The
Gainshare Fee will be calculated during the months of (1)January, (2) April, (3)
July and (4) October for the prior three months. An example schedule is provided
to clarify the calculation dates. Each party will work together in good faith,
to determine and agree upon the appropriate Gainshare amount within the first
twenty (20) days of the stated month.
- -------------------------------------------------------------------------------
GAINSHARE FEE MONTH WHEN CALCULATED WHEN INVOICED
- -------------------------------------------------------------------------------
*** *** ***
- -------------------------------------------------------------------------------
*** *** ***
- -------------------------------------------------------------------------------
*** *** ***
- -------------------------------------------------------------------------------
*** *** ***
- -------------------------------------------------------------------------------
*** *** ***
- -------------------------------------------------------------------------------
*** *** ***
- -------------------------------------------------------------------------------
*** *** ***
- -------------------------------------------------------------------------------
*** *** ***
- -------------------------------------------------------------------------------
*** *** ***
- -------------------------------------------------------------------------------
*** *** ***
- -------------------------------------------------------------------------------
*** *** ***
- -------------------------------------------------------------------------------
*** *** ***
- -------------------------------------------------------------------------------
21 CONFIDENTIAL
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CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
NPB COGS REDUCTION MODEL: *************** PROCESS
- --------------------------------------------------------------------------------
****
****
- --------------------------------------------------------------------------------
YIELD MODEL
For the purposes of this Agreement, the *********** equation used in determining
Gainshare Fees when appropriate will be *****************************, described
as ******************************* *** in Conexant's use of the model. The
*********** *********************** was developed with the use of the *********
as described above. Both Conexant and PDF Solutions agree that the complexity
factor, ***, will vary based on the design and may be adjusted as required. Both
Engagement Managers will verbally agree to such changes.
22 CONFIDENTIAL
23
CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
************* ***********************
The baseline information is described in the following table:
- --------------------------------------------------------------
CALENDAR MONTH D0
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
************ *******
- --------------------------------------------------------------
If Conexant's ********************************************, both parties agree
to discuss actions to be taken.
23 CONFIDENTIAL
24
CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
******* **** ********* MODEL: CONEXANT'S **************** ********
- --------------------------------------------------------------------------------
*************
- --------------------------------------------------------------------------------
******* BASELINE ****** *******
The ******** will be set to each ********* **** forecast for Conexant's
****** products, unless otherwise mutually agreed to in writing. Conexant
agrees to meet with PDF Solutions
on or around ***************
to re-evaluate the methodology for ******** ***********.
24 CONFIDENTIAL
25
CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
GAINSHARE FEE CALCULATION MODEL
- --------------------------------------------------------------------------------
********
- --------------------------------------------------------------------------------
25 CONFIDENTIAL
26
CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
For questions on technical issues contact:
Conexant Systems, Inc.
Attn: ************, Yield Engineering
Tel: ************
Fax:
For approval of expenses and/or questions on contract or business related
issues, contact:
Conexant Systems, Inc.
Attn: ************, Strategic Sourcing
Tel: *************
Fax:
26 CONFIDENTIAL
27
CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
Subject: Re. Change of Control
Date: Thu, 11:28:25 - 0700
From: *******
To: dan@PDF.COM
CC: *******
Dan,
As discussed this morning regarding the ******** Conexant hereby defines the
term "Change of Control" as follows:
"Change of Control" is defined as any of the following events: (i) any
consolidation or merger of a party in which such party is not the continuing or
surviving corporation, or pursuant to which a material number of shares of such
party's common stock would be converted to cash, securities or other property;
(ii) any sale, exchange or other transfer (in one transaction or series of
related transactions) of all or substantially all the assets of such party;
(iii) any sale or other transfer of stock or assets, any consolidation or
merger, or any other transaction, that results in management or control of the
facility resting with a third party.
If PDF accepts this definition as applicable and binding under the above
referenced Integrated Technology Agreement, please respond with your
acknowledgement.
Thanks,
Conexant Systems, Inc.
*******
*******
*******
27 CONFIDENTIAL
28
CONFIDENTIAL MATERIAL
OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
INTEGRATION TECHNOLOGY AGREEMENT (ITA)
**********