EXHIBIT 10.51
AMENDMENT TO JOINT DEVELOPMENT AGREEMENT
This Amendment ("Amendment") to the parties' Joint Development Agreement
("Agreement") dated December 14, 2001, is entered into and effective as of this
18th day of January 2003, by and between ESS Technology Inc., ("ESS"), a
California corporation having a registered office at 48401 Fremont Blvd.,
Fremont, CA 94538, and *** ("Counterparty*"), a corporation organized under the
laws of ***, having a principal place of business at ***.
WHEREAS, the parties have entered into the Joint Development Agreement;
and
WHEREAS; the parties desire to amend and clarify the terms of the Joint
Development Agreement as set forth herein.
NOW, THEREFORE, in consideration of the mutual promises contained herein
and for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereby agree as follows:
1. Section 1 "Definitions" shall be amended to include the following
defined terms:
"Assembly Facility" shall mean ***, or such other assembly, packaging,
and testing facility as has been agreed to by the parties.
"Foundry" shall mean *** or such other foundry as has been agreed to by
the parties.
2. Section 4 "Manufacturing, Marketing, and Distribution" and Section 5
"Accounting; Audit; Payment" shall be amended to include the following
terms:
*** shall issue a Combined Product Purchase Order ("P.O.") to the
Foundry, and *** shall be responsible for costs of fabrication. Once
fabricated, the Foundry will drop-ship the wafers to the designated
Assembly Facility.
*** shall issue a P.O. to *** for the purchase of all the wafers
fabricated from the Foundry.
*** shall issue a P.O. to the Assembly Facility for the wafer sort, and
shall be responsible for the costs thereof.
*** shall then issue a P.O. to the Assembly facility for packaging and
testing, and will be responsible of the costs thereof.
*** shall then issue a P.O. to *** for the Combined Product finished
goods.
ESS and Counterparty* agree that the manufacturing costs of either wafer
fabrication, sorting, packaging or test shall be ***. If either party
receives any rebates, discounts,
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* All references to the counterparty on this page have been replaced with the
term "Counterparty*." Confidential treatment has been requested with respect to
the replaced reference.
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
commission or credit from any Product-related manufacturer, each party
shall be obligated to disclose it (to be treated as ***) to the other
party immediately.
ESS and Counterparty* agree to meet on a quarterly basis to reconcile
accounting and payments due. All accounting for this manufacturing
venture shall be *** in accordance with Section 5 of the Joint
Development Agreement.
*** shall provide *** with ***-month wafer rolling forecasts, and
provide firm wafer P.O. information to ***. *** agree that *** will
invoice or/and ship *** all the finished Combined Products within 30
days of ***'s receipt of these finished Combined Product from the
testing manufacture.
The parties agree to work together in developing testing programs for
the Combined Products, do yield improvement, and resolve any quality
issues.
Counterparty* is authorized to sell Combined Products, in die or
finished-goods form, only to ESS.
ESS is authorized to sell Combined Products' wafers only to
Counterparty*. Unless with Counterparty*'s authorized written consent,
ESS or any third party can not place any Combined Product's P.O. to any
packaging or testing manufacturer.
If required, either party will provide direct assistance to the Assembly
Facility for the assembly, packaging, and testing of the Combined
Products. In the event Counterparty* decides not to provide the package
and test Combined Products service, ESS may elect to manufacture the
Combined Products either itself or with Counterparty*'s prior written
consent, through a third party. Sales of such Products shall only be
together with, or for use with ESS/Counterparty* Combined Products.
Whether such manufacture is by ESS or by a third party, ESS shall pay
Counterparty* profit shares according to the formula stipulated in the
Agreement.
Payment terms are *** for all sales of inventory between the parties.
3. Exhibit A "Specification" "2. Features of each Combined Product"
shall be amended to include the following terms:
The Basic Features of the Combined Product shall be judged and
determined by and from the market mainstream basic
specification/features products manufactured by major competitors.
Basic Features Combined Product Sold Ratio=***.
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* All references to the counterparty on this page have been replaced with the
term "Counterparty*." Confidential treatment has been requested with respect to
the replaced reference.
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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ESS and Counterparty* agree that the Basic Features Combined Product
Sold Ratio shall not be less than ***%. If the above Ratio is less than
***%, then both parties agree to treat the *** as *** for profit sharing
calculation purpose; if the above two models' cumulated Ratio is still
less than ***%, then the *** will be treated as *** too. This rule shall
apply until the cumulated Ratio is more than ***%.
4. This Amendment hereby only amends the Joint Development Agreement
Sections 1, 4, 5, and Exhibit A (2) as specified in the above, and is deemed
fully incorporated therein by reference as though set forth in such Agreement in
full. All terms used herein, except where otherwise designated, shall have the
same meanings as they have in the Agreement. In the event of any conflict
between the provisions of this Amendment and the provisions of the Agreement,
the provisions of this Amendment shall prevail.
IN WITNESS WHEREOF, the parties have caused this Amendment to be as of the
Effective Date.
On behalf of On behalf of
ESS Technology Inc. *** Corporation
By: /s/ Fred S. L. Chan By: /s/ ***
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Name: Fred S. L. Chan Name: ***
Title: Chairman Title: President
Date: 18 Jan 2003 Date: Jan. 18, 2003
Both parties also agree to delete the Agreement Exhibit C (4)'s ***.
FSLC ***
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* All references to the counterparty on this page have been replaced with the
term "Counterparty*." Confidential treatment has been requested with respect to
the replaced reference.
*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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