EXHIBIT 10.07
NATIONAL ASSEMBLY SERVICES AGREEMENT
THIS NATIONAL ASSEMBLY SERVICES AGREEMENT ("Agreement") is dated and made
effective this 11th day of March, 1997 (the "Effective Date") by and between
NATIONAL SEMICONDUCTOR CORPORATION, a Delaware corporation, having its principal
place of business at 2900 Semiconductor Drive, Santa Clara, California
95052-8090 ("National") and FAIRCHILD SEMICONDUCTOR CORPORATION, a Delaware
corporation, having its principal place of business at 333 Western Avenue, South
Portland, Maine 04106 ("Fairchild"). National and/or Fairchild may be referred
to herein as a "Party" or the "Parties" as the case may require.
W I T N E S S E T H:
WHEREAS, the Parties have entered into a certain Asset Purchase Agreement
(hereinafter referred to as the "Purchase Agreement") under which Fairchild is
acquiring certain of the assets of National's Logic, Memory and Discrete Power
and Signal Technologies Business Units as historically conducted and accounted
for (including Flash Memory, but excluding Public Networks, Programmable
Products and Mil/Aero Logic Products) (the "Business"); and
WHEREAS, National owns and/or leases and operates assembly facilities in
Malacca, Malaysia and Singapore (the "Facilities"); and
WHEREAS, Fairchild has been having assembly, test and other back-end
services performed at the Facilities by National; and
WHEREAS, National and Fairchild desire to enter into an agreement under
which National will continue to provide certain services to Fairchild following
the closing of the transactions contemplated by the Purchase Agreement; and
WHEREAS, National and Fairchild recognize that the prices for assembly and
test services to be provided by National to Fairchild as set forth herein are
determined based on the collateral transactions and ongoing relationship between
the Parties as expressed in the Purchase Agreement, Revenue Side Letter between
National and Fairchild of even date herewith (the "Revenue Side Letter") and the
other Operating Agreements (as defined in Paragraph 8.2); and
WHEREAS, the execution and delivery of this Agreement is a condition
precedent to the closing of the transactions contemplated by Purchase Agreement.
NOW, THEREFORE, in furtherance of the foregoing premises and in
consideration of the mutual covenants and obligations hereinafter set forth, the
Parties hereto, intending to be legally bound hereby, do agree as follows:
1.0 DEFINITIONS
1.1 "Best Efforts" shall require that the obligated Party make a
diligent, reasonable and good faith effort to accomplish the
applicable objective. Such obligation, however, does not require
any material expenditure of funds or the incurrence of any
material liability on the part of the obligated Party, which
expenditure or liability is unreasonable in light of the related
objective, nor does it require that the obligated Party act in a
manner which would otherwise be contrary to prudent business
judgment or normal commercial practices in order to accomplish
the objective. The fact that the objective is not actually
accomplished is no indication that the obligated Party did not in
fact utilize its Best Efforts in attempting to accomplish the
objective.
1.2 "Confidential Information" shall have the meaning set forth in
Paragraph 15.1 below.
1.3 "Devices" shall mean Fairchild integrated circuits to be
assembled and/or tested by National hereunder.
1.4 "Die" shall mean the silicon die material, consigned by Fairchild
to National in wafer form, from which Devices are assembled.
1.5 "Effective Date" shall mean the date first set forth above.
1.6 "Facilities" shall mean the existing assembly facilities located
at Malacca, Malaysia and Singapore owned and/or leased and
operated by National.
1.7 "Fairchild" shall mean Fairchild Semiconductor Corporation and
its Subsidiaries.
1.8 "Mix" shall mean the allocation within a forecast by package type
and pin count.
1.9 "National" shall mean National Semiconductor Corporation and
its Subsidiaries.
1.10 "National Assured Capacity" shall mean the capacity of assembly
and/or test services that National agrees to supply Fairchild
pursuant to Section 6 below.
1.11 "Specifications" shall mean Fairchild drawings, criteria and
other documented specifications in effect as of the Effective
Date, including, but not limited to,
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build procedures, buy-off criteria, quality and reliability
parameters, material specifications, marking specifications, test
settings, program specifications, load board schematics,
facilities and environmental SOP's, handling requirements, lot
and/or die traceability and processes for manufacturing Devices.
1.12 "Subsidiary" shall mean any corporation, partnership, joint
venture or similar entity more than fifty percent (50%) owned or
controlled by a Party hereto, provided that any such entity shall
no longer be deemed a Subsidiary after such ownership or control
ceases to exist.
2.0 SHIPPING AND BUILD ORDER REQUIREMENTS
2.1 National shall provide assembly and test services hereunder in
accordance with the Specifications. Such services shall be
performed at those Facilities at which they have historically
been performed.
2.2 Fairchild will, at "No Charge", deliver and consign to National
at the Facilities its electrically probed wafers or wafers
requiring wafer probe. If supplied in wafer form, any reject die
on said wafers shall be ink marked or identified by Fairchild in
a manner acceptable for use with National's pattern recognition
equipment. Wafers and other materials shall be packed in
accordance with the Specifications.
2.3 National shall be responsible for forecasting and ordering lead
frames, bonding wire, molding compound and other raw materials
required for assembly in sufficient quantities and with
sufficient lead times to meet its obligations under the National
Assured Capacity. National shall also be responsible for
maintenance and replacement costs associated with manufacturing
tools and equipment (e.g., mold die, trim and form die, lead
frame tooling), except for lead frame tooling which is owned by
and used exclusively for Fairchild.
2.4 Fairchild shall supply an appropriate bonding diagram and test
program (if applicable) for each Device to be assembled per the
Specifications.
2.5 National hereby agrees to verify the Die count and advise
Fairchild of any variance greater than one
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percent (1%).
2.6 Fairchild will provide National with a "Lot Traveler" in a format
identical to that in effect on the Effective Date and outlined in
Exhibit A hereto for the first six (6) months after the Effective
Date. After that period of time, National may utilize its own
Traveler, provided its form has previously been approved in
writing by Fairchild, which approval shall not be unreasonably
withheld.
2.7 National shall provide Fairchild with the following manufacturing
data, in a format and pursuant to criteria and procedures agreed
to by the Parties, on a monthly basis:
(a) WIP from sealing through final assembly, including
finished goods;
(b) Test yield and wafer sort yield results (if applicable);
(c) Shipping activity (description, quantity, ship date);
(d) Acknowledgment of Fairchild Die shipments as well as such
other information which Fairchild may reasonably request
from time to time; and
(e) Cycle time (if requested by Fairchild).
2.8 National shall deliver completed lots to Fairchild, packaged in
accordance with the Specifications, with the assembly run card
enclosed for each assembly lot (kit). Future traceability for a
lot (kit) shall be based solely on the run card and shall be the
responsibility of Fairchild. The assembly run card shall show the
yield for each yield point in the assembly process. By mutual
agreement of the Parties, traceability may instead be software
based, so long as such records are accessible to both Parties.
2.9 All assembly and test services shall take place at the
Facilities. National shall not perform assembly or test services
or transfer any Fairchild- owned intellectual property or other
Fairchild technical information outside of the Facilities or to
any other site, unless mutually agreed upon by both Parties.
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3.0 PACKAGE/PROCESS CHANGES NOTIFICATION
3.1 If National proposes to make any change affecting the assembly
processes, materials and/or suppliers, to include, but not be
limited to, lead frame design, lead frame material, die attach
material, wire bond material, molding compound, lead plating
process or plating material, test programs or assembly procedures
affecting the Devices, National will notify Fairchild of the
intended change in accordance with National's change procedures
then in effect. If the proposed change is unacceptable to
Fairchild, Fairchild and National shall work together in efforts
to resolve the problem. If during the first thirty-nine (39)
fiscal periods of this Agreement the Parties are unable to
resolve the problem, National shall not make the proposed change.
After the first 39 fiscal periods of this Agreement, if the
Parties are unable to resolve the problem, National shall have
the right to make such change upon the provision of ninety (90)
days prior written notice to Fairchild. Notwithstanding the
foregoing, however, National shall in no event manufacture
Devices other than in strict accordance with the Specifications,
or any amendments thereto, without the prior written consent of
Fairchild.
3.2 Fairchild shall provide at least fifteen (15) days prior
written notice to National of any proposed change in Die
design, layout modification, fabrication process, test
programs or other changes which may impact upon National's
processing, handling or assembly of Devices. National shall
not be responsible for any assembly or test loss incurred as a
result of Fairchild's failure to provide timely notification
of such change.
3.3 Fairchild reserves the right to make changes to the
Specifications that reflect improvements, developments or other
technically desired changes in the Devices. Fairchild shall
notify National of such requested change orders and National
shall respond within thirty (30) working days regarding the
feasibility, schedule and anticipated costs of implementing such
change orders. Once the parties have agreed in writing to the
engineering changes, schedule and prices thereof, National shall
promptly take all measures required to incorporate such change
orders into the Devices. National shall have the right to
renegotiate the price and/or its capacity commitments hereunder
if such changes will have an adverse effect on National's
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assembly or test capacity.
4.0 DEVICE ACCEPTANCE/QUALIFICATION/RAMP UP
4.1 Should National agree to add new package types requested by
Fairchild, National shall utilize its Best Efforts to complete
qualification assembly of new package types as soon as possible,
including qualification lots. Fairchild shall reimburse National
for the full costs of equipment, tooling and one time start up
costs required to manufacture new packages that National will use
exclusively for Fairchild, otherwise such costs will be shared.
4.2 Fairchild shall be responsible for specifying and performing any
qualification testing deemed necessary.
4.3 National reserves the right to refuse assembly of any new Devices
which violate National internal design or processing requirements
that are introduced after the Effective Date.
4.4 National shall provide Fairchild with a preliminary ramp up
schedule, which may be subject to subsequent reduction by
National in the event unforeseen problems are encountered by
National with yields, process, capacity support,
quality/reliability or other product or process features.
National shall immediately notify Fairchild in writing of the
necessity of any such reductions.
5.0 INSPECTION, ACCEPTANCE AND WARRANTY
5.1 For those Devices not tested by National, Fairchild shall conduct
incoming acceptance tests within ten (10) days after delivery at
its test facility. Upon completion of such tests, Fairchild shall
promptly report any shortage, damage or defective Devices in any
shipment. In the case of defective Devices found by Fairchild to
exceed applicable AQL and/or PPM Limits in effect as of the
Effective Date, or as subsequently agreed to in writing by the
Parties, Fairchild shall promptly ship samples of defective
Devices to National for verification. If such testing
demonstrates that the shipment failed to meet the relevant
Specifications due to National workmanship and materials,
Fairchild may at its option either:
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(a) deduct the defective Devices' purchase price from
National's invoice, in which event Fairchild shall, if
requested by National, return to National the damaged or
defective Devices at National's risk and expense; or
(b) return the damaged or defective Devices to National, at
National's risk and expense, for credit; or
(c) scrap the defective Devices at National's request for
credit.
5.2 National warrants that the services provided to Fairchild
hereunder shall conform to all applicable Specifications for
assembly and/or test and shall be free from defects in material
and National's workmanship. Such warranty, however, shall not
apply to the design or operation of the Fairchild supplied Die
incorporated in the Devices. This warranty is limited to a period
of one (1) year from the date of delivery to Fairchild. If,
during the one year period:
(i) National is notified promptly in writing upon discovery of
any such defect in any Device with a detailed description;
and
(ii) Fairchild receives a return material authorization number
from National and returns such Device to the applicable
Facility at Fairchild's expense for inspection; and
(iii) National's examination reveals that the Device is indeed
defective and does not meet the applicable Specification or
is defective in materials or National's workmanship and
such problems are not caused by accident, abuse, misuse,
neglect, improper storage, handling, packaging or
installation, repair, alteration or improper testing or use
by someone other than National
then, within a reasonable time, National shall credit Fairchild
for such defective Device. National shall reimburse Fairchild for
the transportation charges paid by Fairchild in returning such
defective Devices to National. The performance of this warranty
shall not act to extend the one (1) year warranty period for any
Device(s) repaired or replaced beyond that period applicable to
such Device(s) as originally delivered.
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5.3 THE FOREGOING WARRANTY CONSTITUTES NATIONAL'S EXCLUSIVE
LIABILITY, AND FAIRCHILD'S EXCLUSIVE REMEDY, FOR ANY BREACH OF
WARRANTY. NATIONAL MAKES AND FAIRCHILD RECEIVES NO WARRANTIES OR
CONDITIONS ON THE SERVICES PERFORMED HEREUNDER, EXPRESS, IMPLIED,
STATUTORY OR OTHERWISE, AND NATIONAL SPECIFICALLY DISCLAIMS ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
6.0 CAPACITY; VOLUME COMMITMENTS; PRODUCTION PLANNING
6.1 All planning herein will be done under National's accounting
calendar which currently divides its fiscal year into four (4)
equal fiscal quarters, each of which consists of three (3) fiscal
periods. The first two (2) periods of each quarter are of four
(4) weeks in duration and the third period is of (5) weeks
duration.
6.2 Two (2) weeks prior to the end of each National fiscal period, or
as otherwise agreed by the Parties, Fairchild will provide to
National a baseline quantity of assembly starts set forth in
terms of product family, package and pin count, for the next
eight (8) fiscal periods (the "Capacity Request"). Fairchild's
initial Capacity Request and National's Assured Capacity response
formats are set forth herein at Exhibit B.
6.3 Each fiscal period, Fairchild may make changes to the Capacity
Request in accordance with the following table, provided that the
maximum Capacity Request for each package and pin count module
does not exceed Fairchild's share of each package and pin count
module's installed equipment capacity. Any changes outside those
permitted under the following table must be by mutual consent of
the Parties.
Fiscal Periods in the
Capacity Request Permitted Changes
---------------- -----------------
Period 1 Fixed
Period 2 +/-10%
Period 3 +/-20%
Period 4 +/-40%
Period 5 +/-40%
Period 6 +/-40%
Period 7 +/-40%
Period 8 +/-40%
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6.4 Fairchild's share of a package and pin count module's installed
equipment capacity will equal the previous National Assured
Capacity for that module, plus that percentage of any excess
capacity available in the package and pin count module equal to
Fairchild's percentage of the currently utilized capacity in said
module. Installed equipment capacity by package and pin count
module is set forth herein at Exhibit C.
6.5 One (1) work week after receipt of the Capacity Request, National
shall provide Fairchild with a response to such Capacity Request,
the "National Assured Capacity". The National Assured Capacity
must guarantee the amount requested in Fairchild's latest
Capacity Request, provided that any changes to Fairchild's latest
Capacity Request are within the limits of Paragraph 6.3. National
shall utilize its Best Efforts to comply with any requests by
Fairchild for capacity above those which are permitted under
Paragraph 6.3. In any case, National shall be obligated hereunder
to provide Fairchild with the assembly starts guaranteed in the
National Assured Capacity response. The initial National Assured
Capacity response shall be the last response provided prior to
the Effective Date. Set forth below are two examples of the
foregoing:
Example #1 The new Capacity Request is less than the last
National Assured Capacity response.
Period A B C D E F G H
------ - - - - - - - -
Last Capacity Request 100 100 100 100 100 100 100 100
Last National Assured
Capacity 100 100 100 100 100 100 100 100
New Capacity Request 100 90 80 60 60 60 60 60
New National Assured
Capacity 100 90 80 60 60 60 60 60
Example #2 The new Capacity Request is greater than the
last National Assured Capacity response.
Period A B C D E F G H
------ - - - - - - - -
Last Capacity Request 100 100 100 100 100 100 100 100
Last National Assured
Capacity 100 100 100 100 100 100 100 100
New Capacity Request 100 110 120 140 140 140 140 140
New National Assured
Capacity 100 110 120 140 140 140 140 140
6.6 The timetable for the rolling eight fiscal period Capacity
Request, the National Assured Capacity response, purchase order
release and detailed Device level assembly starts request for the
next fiscal
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period are set forth in Exhibit D hereto.
7.0 PURCHASE ORDERS
7.1 All purchases and sales between National and Fairchild shall be
initiated by Fairchild's issuance of written purchase orders sent
by either first class mail or facsimile. By agreement of the
Parties, purchase orders may also be sent and acknowledged by
electronic data exchange or other mutually satisfactory system.
Such "blanket" purchase orders shall be issued once per fiscal
quarter for assembly starts three (3) fiscal periods in the
future. They shall state the product family, package and pin
count, and shipping and invoicing instructions. National shall
accept purchase orders through a written or electronic
acknowledgment. Upon receipt of Fairchild's detailed Device level
assembly starts request for the next fiscal period, National
shall provide Fairchild with a Product delivery schedule either
on a weekly basis as assembly is started or for the assembly
starts for the entire fiscal period, as the Parties may agree.
The purchase orders may utilize the first three (3) fiscal
periods forecast in the eight period rolling forecast supplied
pursuant to Section 6, as the embodiment of the purchase order
for specifying the assembly starts by package and pin count.
7.2 In the event of any conflict between the terms and conditions of
this Agreement and either Party's purchase order, acknowledgment,
or similar forms, priority shall be determined as follows:
(a) typewritten or handwritten terms on the face of a written
purchase order, acknowledgment or similar document or in
the main body of an electronic equivalent which have been
specifically accepted in writing by the other Party's
Program Manager;
(b) the terms of this Agreement;
(c) preprinted terms incorporated in the purchase order,
acknowledgment or similar document.
7.3 Consistent with standard practices of issuing specific Device
level details of part numbers to be assembled on a weekly or
periodic basis, Fairchild
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may unilaterally change the part number to be manufactured,
provided that National agrees that the change does not negatively
impact National's loadings and provided further that there is no
change in the package and pin count to be used. A change that
will negatively impact loading or alter the package and pin count
may only be directed upon National's written agreement, which
shall utilize its Best Efforts to comply with such requested
change. The specific part number detail shall be submitted by
first class mail or facsimile. By written agreement of the
Parties, specific part number detail may also be sent by
electronic data exchange, or other mutually satisfactory system.
7.4 Fairchild shall request delivery dates which are consistent with
National's reasonable lead times for each Device as indicated at
the time Fairchild's purchase order is placed. Notwithstanding
the foregoing, National shall utilize its Best Efforts to
accommodate requests by Fairchild for quick turnarounds or "hot
lots", which includes prototype lots. Hot lot cycle times shall
be a fifty percent (50%) reduction of standard cycle time with a
$2,000 lot charge.
7.5 National may manufacture lots of any size which satisfy the
requirements of effective manufacturing. However, Fairchild must
place orders for full flow and prototype Products in minimum lot
sizes of three thousand (3,000) Devices.
8.0 PRICING AND PAYMENT
8.1 Set forth herein at Exhibit F is the forecasted volume of
assembly services that Fairchild will purchase from National
during the initial thirty-nine (39) fiscal periods (the "Forecast
Volumes"). The Forecast Volumes are for pricing purposes under
this Section 8 only and may vary in magnitude and mix in
practice, whereupon the prices applicable to the revised
magnitude and mix may also vary.
8.2 The Parties hereby acknowledge that the prices for assembly and
test services to be provided by National to Fairchild as set
forth herein are determined based on the collateral transactions
and ongoing relationship between the Parties as expressed
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in the Purchase Agreement, Revenue Side Letter and corresponding
Fairchild Foundry Services Agreement, Fairchild Assembly Services
Agreement and Mil/Aero Wafer and Services Agreement, all of even
date herewith between the Parties (collectively, the "Operating
Agreements"). Set forth in Exhibit F hereto are the prices which
Fairchild shall pay to National for standard assembly and test
services hereunder during the first six (6) fiscal periods of
this Agreement. The prices in Exhibit F for fiscal periods 7
through 39 are for information purposes only and are based on the
Parties' best estimate of forecast volumes and projected costs.
8.3 The methodology under which prices which Fairchild shall pay to
National for standard assembly and test services hereunder after
the first six (6) fiscal periods of this Agreement is set forth
herein at Exhibit K.
8.4 For purposes of Exhibit K, Fairchild, or any "Big 6" accounting
firm designated by Fairchild, shall have reasonable rights, not
more than twice per fiscal year, to audit the books and records
of National relevant to the pricing terms of this Agreement in
order to come to agreement with National with regard to
National's actual manufacturing costs.
8.5 Prices are quoted and shall be paid in U.S. Dollars. Such prices
are on an FOB ship point basis. Payment terms are net thirty (30)
from date of invoice. Miscellaneous services may be invoiced
separately.
8.6 Fairchild shall pay, in addition to the prices quoted or
invoiced, the amount of any freight, insurance, special handling
and duties. Fairchild shall also pay all sales, use, excise or
other similar tax applicable to the sale of goods or provision of
services covered by this Agreement, or Fairchild shall supply
National with an appropriate tax exemption certificate.
8.7 Quoted prices are based on the use of standard National processes
and on the assumption that Fairchild's product is readily
accommodated by National's assembly/handling equipment and
processes. Any changes that must be made thereto shall result in
additional charges to Fairchild that are mutu-
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ally agreed to by the Parties.
8.8 Unless otherwise noted, quoted prices for assembly shall include
packing, marking and testing in accordance with the
Specifications for Devices that are in production as of the
Effective Date. For new Devices added after the Effective Date,
pricing will reflect specifications and any special requirements
for the Device, such as multi-insertion testing.
8.9 Should yields below historical levels be directly attributable to
Die, materials, processes or documentation provided by Fairchild,
then Fairchild shall be charged for the full price of Devices
begun in assembly, including handling, incurred by National in
processing such units.
8.10 Should Fairchild terminate any order prior to process completion,
Fairchild shall be charged a prorated portion of the full price
of such Device, subject to a negotiated adjustment, based on the
process termination point, including handling incurred by
National in processing the total quantity started in assembly.
8.11 National may invoice Fairchild for complete or partial lots
(kits).
8.12 Fairchild shall in no event be required to pay prices in excess
of those charged by National for other third party customers, for
substantially similar services sold on substantially similar
terms (e.g., volume, payment terms, manufacturing criteria,
contractual commitments vs. spot buys, etc.). In the event
National desires to perform services for other third party
customers at such lower prices, National shall immediately notify
Fairchild and Fairchild shall begin receiving the benefit of such
lower price at the same time as such other third party customer.
This Paragraph 8.12 shall not apply to the prices to be paid by
Fairchild hereunder for the first twelve (12) fiscal periods of
this Agreement, or if Fairchild fails to honor its fixed
commitments under Section 6 and to the extent that such sales by
National to third party customers are only made in an attempt to
make up for any underutilization of capacity thereby caused by
Fairchild.
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8.13 For assembly and test services not reflected in Exhibit F, terms
shall be on an individual purchase order basis at prices to be
negotiated by the Parties using a methodology based on that set
forth in Exhibit K.
9.0 DELIVERY; RESCHEDULING AND CANCELLATION
9.1 National shall make reasonable and diligent efforts to deliver
assembled and/or tested Devices on the delivery dates published
to Fairchild. Any shipment made within +/- 3 days of the shipment
date(s) published to Fairchild shall constitute timely shipment.
9.2 All Devices delivered pursuant to the terms of this Agreement
shall be suitably packed for shipment in Fairchild's specified
containers, marked for shipment to Fairchild's address set forth
in the applicable purchase order and delivered to a carrier or
forwarding agent chosen by Fairchild. National shall not be
responsible for delays in shipment resulting from Fairchild's
failure to supply National with an adequate supply of Fairchild's
specified containers. Should Fairchild fail to designate a
carrier, forwarding agent or type of conveyance, National shall
make such designation in conformance with its standard shipping
practices. Shipment will be F.O.B. shipping point, at which time
risk of loss and title shall pass to Fairchild. Shipments will be
subject to incoming inspection as set forth in Paragraph 5.1
above.
9.3 Fairchild may, with National's prior written consent, reschedule
delivery of any order of assembled and/or tested Devices once
each fiscal period.
9.4 Subject to the provisions of Section 6 hereof, Fairchild may
cancel any purchase order at least two (2) weeks prior to the
commencement of work by National without charge, provided that
Fairchild reimburses National for the cost of any unique raw
materials purchased after such purchase order has been placed,
and provided further that National had provided Fairchild with a
listing of materials it considers unique.
10.0 QUALITY AND YIELD PROGRAMS
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10.1 National shall maintain continuous cost, quality and yield
enhancement programs throughout the term of this Agreement.
10.2 National shall support Fairchild quality programs and shall
supply to Fairchild reports and/or manufacturing data in standard
National format that are in effect and which are required as of
the Effective Date.
10.3 National hereby warrants that the Facilities currently are, and
will remain throughout the term of this Agreement, ISO9000
certified.
11.0 ON-SITE INSPECTION AND INFORMATION
11.1 National shall allow Fairchild and/or Fairchild's customers to
visit and evaluate the Facilities during normal business hours as
part of established source inspection programs, it being
understood and agreed between Fairchild and National that
Fairchild must obtain the concurrence of National for the
scheduling of all such visits, which such concurrence shall not
be unreasonably withheld. It is anticipated that these visits
will occur not more than once per quarter, on average.
11.2 Upon Fairchild's written request, National will provide Fairchild
with process control information, to include but not be limited
to: SPC, yield and other detailed assembly and test quality and
reliability data and associated analyses required to support
Fairchild and Fairchild's customers' quality and reliability
programs. Except for exigent circumstances, such requests shall
not be made more than twice per year for a given category of
information.
11.3 Upon Fairchild's request and National's agreement which shall not
be unreasonably withheld, National shall provide Fairchild
engineers with access to the Facilities to the extent necessary
to perform yield improvement and product management updates
relevant to this Agreement. Fairchild's engineers will comply
with all applicable National regulations in force at the
Facilities and Fairchild hereby agrees to hold National harmless
for any damages or liability caused by any such Fairchild
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engineer, which are attributable to:
(i) the negligence or willful malfeasance of such engineer, and
(ii) any failure to comply with National's regulations in force
at the Facilities or with applicable law.
12.0 REPORTS AND COMMUNICATIONS
12.1 Each Party hereby appoints a Program Manager whose
responsibilities shall include acting as a focal point for the
technical and commercial discussions between them related to the
subject matter of this Agreement, to include monitoring within
his or her respective company the distribution of Confidential
Information received from the other Party and assisting in the
prevention of the unauthorized disclosure of Confidential
Information within the company and to third parties. The Program
Managers shall also be responsible for maintaining pertinent
records and arranging such conferences, visits, reports and other
communications as are necessary to fulfill the terms and
conditions of this Agreement. The names, addresses and telephone
numbers of the Program Managers will be communicated between the
Parties from time to time.
13.0 EXPORT CONTROL
13.1 The Parties acknowledge that each must comply with all rules and
laws of the United States government relating to restrictions on
export. Each Party agrees to use its Best Efforts to obtain any
export licenses, letters of assurance or other documents
necessary with respect to this Agreement.
13.2 Each Party agrees to comply fully with United States export laws
and regulations, assuring the other Party that, unless prior
authorization is obtained from the competent United States
government agency, the receiving Party does not intend and shall
not knowingly export or re-export, directly or indirectly, any
wafers, Die, Devices, technology or technical information
received hereunder, that would be in contravention of any laws
and regulations published by any United States gov-
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ernment agency.
14.0 TERM AND TERMINATION
14.1 The term of this Agreement shall be thirty-nine (39) fiscal
periods from the Effective Date; provided, however that the
Parties shall not less than eight (8) fiscal periods prior to the
end of such thirty-ninth (39th) fiscal period determine in good
faith a ramp-down schedule of production so as to minimize
disruption to both Parties. If the Parties are unable to agree on
the terms governing a ramp-down, Fairchild shall be allowed to
reduce its purchase commitment by not more than twenty percent
(20%) per fiscal quarter, starting one fiscal quarter after the
initial thirty-nine (39) fiscal period term of this Agreement.
Fairchild will provide National with not less than ninety (90)
days prior written notice of any such reduction.
14.2 This Agreement may be terminated, in whole or in part, by one
Party sending a written notice to the other Party of its election
to terminate, which notice specifies the reason for the
termination, upon the happening of any one or more of the
following events:
(a) the other Party is the subject of a petition filed in
a bankruptcy court of competent jurisdiction, whether
voluntary or involuntary, which petition in the event
of an involuntary petition is not dismissed within
sixty (60) days; if a receiver or trustee is
appointed for all or a substantial portion of the
assets of the other Party; or if the other Party
makes an assignment for the benefit of its creditors;
or
(b) the other Party fails to perform substantially any
material covenant or obligation, or breaches any
material representation or warranty provided for
herein; provided, however, that no right of
termination shall arise hereunder until sixty (60)
days after receipt of written notice by the Party who
has failed to perform from the other Party,
specifying the failure of performance, and said
failure having not been remedied or cured during said
sixty (60) day period.
-17-
14.3 Upon termination of this Agreement, all rights granted hereunder
shall immediately terminate and each Party shall return to the
other Party any property belonging to the other Party which is in
its possession, except that National may continue to retain and
use any rights or property belonging to Fairchild solely for the
period necessary for it to finish manufacturing the currently
forecasted National Assured Capacity and/or complete any
production ramp-down activity. Nothing in this Section 14 is
intended to relieve either Party of any liability for any payment
or other obligations existing at the time of termination.
14.4 The provisions of Sections 13, 15 and Paragraphs 5.2, 5.3, 16.5
and 16.8 shall survive the termination of this Agreement for any
reason.
15.0 CONFIDENTIALITY
15.1 For purposes of this Agreement, "Confidential Information" shall
mean all proprietary information, including Fairchild and/or
National trade secrets relating to the subject matter of this
Agreement disclosed by one of the Parties to the other Party in
written and/or graphic form and originally designated in writing
by the disclosing Party as Confidential Information or by words
of similar import, or, if disclosed orally, summarized and
confirmed in writing by the disclosing Party within thirty (30)
days after said oral disclosure, that the orally disclosed
information is Confidential Information.
15.2 Except as may otherwise be provided in the Technology Licensing
and Transfer Agreement between the Parties of even date herewith,
each Party agrees that it will not use in any way for its own
account, or for the account of any third party, nor disclose to
any third party except pursuant to this Agreement, any
Confidential Information revealed to it by the other Party. Each
Party shall take every reasonable precaution to protect the
confidentiality of said information. Each Party shall use the
same standard of care in protecting the Confidential Information
of the other Party as it normally uses in protecting its own
trade secrets and proprietary information.
-18-
15.3 Notwithstanding any other provision of this Agreement, no
information received by a Party hereunder shall be Confidential
Information if said information is or becomes:
(a) published or otherwise made available to the public other
than by a breach of this Agreement;
(b) furnished to a Party by a third party without restriction
on its dissemination;
(c) approved for release in writing by the Party designating
said information as Confidential Information;
(d) known to, or independently developed by, the Party
receiving Confidential Information hereunder without
reference to or use of said Confidential Information; or
(e) disclosed to a third party by the Party transferring said
information hereunder without restricting its subsequent
disclosure and use by said third party.
15.4 In the event that either Party either determines on the advice of
its counsel that it is required to disclose any information
pursuant to applicable law or receives any demand under lawful
process to disclose or provide information of the other Party
that is subject to the confidentiality provisions hereof, such
Party shall notify the other Party prior to disclosing and
providing such information and shall cooperate at the expense of
the requesting Party in seeking any reasonable protective
arrangements requested by such other Party. Subject to the
foregoing, the Party that receives such request may thereafter
disclose or provide information to the extent required by such
law (as so advised by counsel) or by lawful process.
16.0 GENERAL
16.1 AMENDMENT: This Agreement may be modified only by a
written document signed by duly authorized representatives
of the Parties.
-19-
16.2 FORCE MAJEURE: A Party shall not be liable for a failure or delay
in the performance of any of its obligations under this Agreement
where such failure or delay is the result of fire, flood, or
other natural disaster, act of God, war, embargo, riot, labor
dispute, unavailability of raw materials or utilities (provided
that such unavailability is not caused by the actions or
inactions of the Party claiming force majeure), or the
intervention of any government authority, providing that the
Party failing in or delaying its performance immediately notifies
the other Party of its inability to perform and states the reason
for such inability.
16.3 ASSIGNMENT: This Agreement may not be assigned by any Party
hereto without the written consent of the other Party; provided
that Fairchild may assign its rights but not its obligations
hereunder as collateral security to any bona fide financial
institution engaged in acquisition financing in the ordinary
course providing financing to consummate the transactions
contemplated by the Purchase Agreement or any bona fide financial
institution engaged in acquisition financing in the ordinary
course through whom such financing is refunded, replaced, or
refinanced and any of the foregoing financial institutions may
assign such rights in connection with a sale of Fairchild or the
Business in the form then being conducted by Fairchild
substantially as an entirety. Subject to the foregoing, all of
the terms and provisions of this Agreement shall be binding upon,
and inure to the benefit of, and shall be enforceable by, the
respective successors and assigns of the Parties hereto.
16.4 COUNTERPARTS: This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an
original and all of which together shall constitute but one and
the same instrument.
16.5 CHOICE OF LAW: This Agreement, and the rights and obligations of
the Parties hereto, shall be interpreted and governed in
accordance with the laws of the State of California, without
giving effect to its conflicts of law provisions.
16.6 WAIVER: Should either of the Parties fail to exercise or enforce
any provision of this Agreement, such failure shall not be
construed as constituting
-20-
a waiver or a continuing waiver of its rights to enforce such
provision or right or any other provision or right. Should
either of the Parties waive any provision or right under this
Agreement, such waiver shall not be construed as constituting a
waiver of any other provision or right.
16.7 SEVERABILITY: If any provision of this Agreement or the
application thereof to any situation or circumstance shall be
invalid or unenforceable, the remainder of this Agreement shall
not be affected, and each remaining provision shall be valid and
enforceable to the fullest extent.
16.8 LIMITATION OF LIABILITY: IN NO EVENT SHALL EITHER PARTY BE LIABLE
FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES
RESULTING FROM THE OTHER PARTY'S PERFORMANCE OR FAILURE TO
PERFORM UNDER THIS AGREEMENT, OR THE FURNISHING, PERFORMANCE, OR
USE OF ANY GOODS OR SERVICES SOLD PURSUANT HERETO, WHETHER DUE TO
BREACH OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE OR OTHERWISE,
REGARDLESS OF WHETHER THE NONPERFORMING PARTY WAS ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES OR NOT.
16.9 EFFECT OF HEADINGS: The headings and sub-headings contained
herein are for information purposes only and shall have no effect
upon the intended purpose or interpretation of the provisions of
this Agreement.
16.10 INTEGRATION: The agreement of the Parties, which is composed of
this Agreement and the Exhibits hereto and the documents referred
to herein, constitutes the entire agreement and understanding
between the Parties with respect to the subject matter of this
Agreement and integrates all prior discussions and proposals
(whether oral or written) between them related to the subject
matter hereof.
16.11 PUBLIC ANNOUNCEMENT: Prior to the closing of the transactions
contemplated under the Purchase Agreement, neither Fairchild nor
National shall, without the approval of the other Party hereto,
make any press release or other public announcement concerning
the terms of the transactions contemplated by this Agreement,
except as and to the extent that any such Party shall be so
obligated by law, in which case the Party shall use its Best
Efforts to advise the other Party thereof and the Parties
-21-
shall use their Best Efforts to cause a mutually agreeable
release or announcement to be issued; provided that the
foregoing shall not preclude communications or disclosures
necessary to (a) implement the provisions of this Agreement or
(b) comply with accounting, securities laws and Securities and
Exchange Commission disclosure obligations. Fairchild shall
provide National with a reasonable opportunity to review and
comment on any references to National made by Fairchild (and
shall not include any such references to National without the
written consent of National, which consent shall not be
unreasonably withheld or delayed) in any written materials that
are intended to be filed with the Securities and Exchange
Commission in connection with obtaining financing required to
effect the transactions contemplated in connection with the
Purchase Agreement or intended to be distributed to prospective
purchasers pursuant to an offering made under Rule 144A
promulgated under the Securities Act of 1933 in connection with
obtaining such financing.
16.12 NO PARTNERSHIP OR AGENCY CREATED: Nothing contained herein or
done pursuant to this Agreement shall constitute the Parties as
entering upon a joint venture or partnership, or shall constitute
either Party the agent for the other Party for any purpose or in
any sense whatsoever.
16.13 BINDING EFFECT: This Agreement and the rights and obligations
hereunder shall be binding upon and inure to the benefit of the
Parties hereto and to their respective successors and assigns.
16.14 NOTICES: All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when
received if personally delivered; when transmitted if transmitted
by telecopy, electronic or digital transmission method; the day
after it is sent, if sent for next day delivery to a domestic
address by a recognized overnight delivery service (e.g., Federal
Express); and upon receipt, if sent by certified or registered
mail, return receipt requested. In each case notice shall be sent
to:
National: National Semiconductor Corporation
2900 Semiconductor Drive
-22-
P.O. Box 58090
M/S 16-135
Santa Clara, CA 95052-8090
Attn: General Counsel
FAX: (408) 733-0293
-23-
Fairchild: Fairchild Semiconductor Corporation
M/S 01-00 (General Counsel)
333 Western Avenue
South Portland, ME 04106
FAX: (207) 761-6020
or to such other place as such Party may designate as to itself
by written notice to the other Party.
IN WITNESS WHEREOF, the Parties have had this Agreement executed by their
respective duly authorized officers on the day and date first written above. The
persons signing warrant that they are duly authorized to sign for and on behalf
of the respective Parties.
FAIRCHILD SEMICONDUCTOR CORPORATION
By:/s/ Joseph R. Martin
- -------------------------------------
Title:Executive Vice President, CFO
NATIONAL SEMICONDUCTOR CORPORATION
By:/s/ John M. Clark III
- -------------------------------------
Title:Senior Vice President
-24-
- ---------------------------------------------------------------------------------------------------------------------------------
EXHIBIT B
- ---------------------------------------------------------------------------------------------------------------------------------
CAPACITY REQUEST AND RESPONSE FORMAT
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
FYXX FYXX FYXX
- ---------------------------------------------------------------------------------------------------------------------------------
STOCK S PROD ASY TLO MINIMUM PER PER PER
- ---------------------------------------------------------------------------------------------------------------------------------
NO TYP BF MFLO GROUP LEAD LO PC CUST MISC STOCK 1 2 3
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
065959 F SO SO14W 0202DL12 NMSOW014 EM
- ---------------------------------------------------------------------------------------------------------------------------------
065917 F SO SO16W 0202DL12 NMSOW016 EM
- ---------------------------------------------------------------------------------------------------------------------------------
065917 F SO SO16W 0202DL13 NMSOW016 EM
- ---------------------------------------------------------------------------------------------------------------------------------
023077 F SO SO08N 0202FL02 NMSON008 EM
- ---------------------------------------------------------------------------------------------------------------------------------
024625 F SO SO08N 0202FL04 NMSON008 EM
- ---------------------------------------------------------------------------------------------------------------------------------
065917 F SO SO16W 0202FL06 NMSOW016 EM
- ---------------------------------------------------------------------------------------------------------------------------------
001202 F F30 IDF 0202DL13 NMDIPO24 SG
- ---------------------------------------------------------------------------------------------------------------------------------
001195 F F30 IDF 0202DL13 NMDIP024 SG
- ---------------------------------------------------------------------------------------------------------------------------------
021948 F AGG SD300 0202FL04 JCDIP02S SG
- ---------------------------------------------------------------------------------------------------------------------------------
065885 F PCC PCC28 0202FL04 NMPCC028 SG
- ---------------------------------------------------------------------------------------------------------------------------------
065889 F PCC PCC28 0202FL04 NMPCC028 SG
- ---------------------------------------------------------------------------------------------------------------------------------
027408 F PCC PCC28 0202FL04 NMPCC028 SG
- ---------------------------------------------------------------------------------------------------------------------------------
001195 F F30 IDF 0202FL06 NMDIP024 SG
- ---------------------------------------------------------------------------------------------------------------------------------
065771 F PCC PCC20 0202FL06 NMPCC020 SGG
- ---------------------------------------------------------------------------------------------------------------------------------
065889 F PCC PCC28 0202FL06 NMPCC028 SG
- ---------------------------------------------------------------------------------------------------------------------------------
065889 F PCC PC28 0202FL07 NMPCC028 SG
- ---------------------------------------------------------------------------------------------------------------------------------
001195 F F30 IDF 0202FL14 NMDIP024 SG
- ---------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------
FYXX FYXX FYXX FYXX FYXX
- --------------------------------------------------
STOCK PER PER PER PER PER
- --------------------------------------------------
NO 4 5 6 7 8
- --------------------------------------------------
- --------------------------------------------------
065959
- --------------------------------------------------
065917
- --------------------------------------------------
065917
- --------------------------------------------------
023077
- --------------------------------------------------
024625
- --------------------------------------------------
065917
- --------------------------------------------------
001202
- -------------------------------------------------
001195
- --------------------------------------------------
021948
- --------------------------------------------------
065885
- --------------------------------------------------
065889
- --------------------------------------------------
027408
- --------------------------------------------------
001195
- --------------------------------------------------
065771
- --------------------------------------------------
065889
- --------------------------------------------------
065889
- --------------------------------------------------
001195
- --------------------------------------------------
EXHIBIT C
TOTAL NS MALACCA CAPACITY
----------------------------------
Workdays
-----------------------------------------------------
in K units STS 288.6 288.6
-------------- ----------------------------------
Lead Type Daily RunRate FY98 FY99
------------------------------------------------------------------------------------------------------
Assembly Molded Dip 8 703.1 202915 202915
------------------------------------------------------------------------------------------------------
14/6e 413.5 119336 119336
--------------------------------------------------------------------
14ss 30 8658 8658
--------------------------------------------------------------------
16ss 12.9 3723 3723
--------------------------------------------------------------------
16P6 17.1 4935 4935
--------------------------------------------------------------------
11/22 11.5 3319 3319
--------------------------------------------------------------------
28 139.6 40289 40289
--------------------------------------------------------------------
1328 383174 383174
--------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Assembly JEDEC 8N 1692 488311 488311
--------------- --------------------------------------------------------------------
SOIC 14N 548.6 158326 158326
--------------------------------------------------------------------------------------
14W 32.7 9437 9437
--------------------------------------------------------------------
16W 51 14719 14719
--------------------------------------------------------------------
20W 48.3 13939 13939
--------------------------------------------------------------------
24W 28.2 8139 8139
--------------------------------------------------------------------
2401 392871 692871
--------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Assembly TO220 3 384.2 110880 110880
------------------------------------------------------------------------------------------------------
5 187.7 54170 54170
--------------------------------------------------------------------
7 20.6 5945 5945
--------------------------------------------------------------------
11 72.7 20981 20981
--------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Assembly TO263 3/5 27.6 7965 7965
------------------------------------------------------------------------------------------------------
7/9 12.7 3665 3665
--------------------------------------------------------------------
15 25.0 7215 7215
--------------------------------------------------------------------
731 210822 210822
-----------------------------------------------------
------------------------------------------------------------------------------------------------------
Assembly HYBRID 11 8.4 2424 2424
--------------- --------------------------------------------------------------------
TO220 12 8.8 2540 2540
--------------------------------------------------------------------------------------
17 4964 4964
-----------------------------------------------------
------------------------------------------------------------------------------------------------------
Assembly ISOLATED 11/15 16.9 4877 4877
--------------- ---------------------------------------------------------------------
TO220
-----------------
------------------------------------------------------------------------------------------------------
Assembly IPS 24 10.0 2886 2886
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Assembly SOT23 5 238.8 68918 68918
------------------------------------------------------------------------------------------------------
-2-
NSSG FACILITY CAPACITY
DAILY
PLCC RUNRATE FY98 FY99
---- ------- ---- ----
20L 101 35350 35350
28L 88 30800 30800
44L 64 22400 22400
52L 15 5250 5250
68L 42 14700 14700
84L 13 4550 4550
MDIP
----
24L 11 3850 3850
28L 42 14700 14700
40L 25 8750 8750
48L 12 4200 4200
NOTE: VOLUMES INDICATED ARE IN K UNITS
-3-
Section 6 Schedule 'D'
Proposed Scheduling Table
FORECAST TIMETABLE
Period 12 Period 1 Period 2 Period 3
1 2 3 4 5 1 2 3 4 1 2 3 4 1 2 3 4 5
1
2 ZA A A ZA
3
4
5 R Y R Y R Y R Y
R = FSC PROVIDES 8 PD FORECAST TO NSC
Y = NSC PROVIDES CAPACITY RESPONSE TO FSC
Z = FSC PLACES BLANKET 3 PD PURCHASE ORDER WITH NSC
A = FSC RELEASES DETAIL OF WAFER STARTS FOR THE FOLLOWING PERIOD
-4-
Foundry "Flip" Agreement
Logic Demand on NSC
ACT ACT FC
Q197 Q297 Q497 Q198 Q298 Q398 Q498 Q199 Q299 Q399 Q499
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Fab Starts TE CS80 72 72 72 72 72 0 0 0 0
W cost + TE CS80 875 875 875 875 875 0 0 0 0
markup
Revenue K$ TE CS80 57 57 57 57 57 0 0 0 0
Assembly
Volume (K u) EM NMSON 08 155 205 168 168 203 185 222 221 243 236 243
NMSOW14 4 5 15 15 15 15 15 15 15 15 15
NMSOW16 307 317 360 360 421 388 445 486 480 423 450
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
467 528 543 543 639 588 682 722 738 674 708
SG JC DIP02S 95 95 0 0 0 0 0 0 0
MDIP 24 436 436 323 345 378 337 312 299 260
MPCC 20 2 2 2 2 2 2 2 2 2
MPCC 28 707 707 644 613 624 675 668 630 698
------ ------ ------ ------ ------ ------ ------ ------ ------
1240 1240 969 960 1004 1014 982 931 960
CLD (per K EM NMSON 08 30.19 25.39 24.69 24.69 24.69 24.69 24.69 24.69 24.69 24.69 24.69
(assy)
NMSOW14 80.61 72.77 87.19 87.19 87.19 87.19 87.19 87.19 87.19 87.19 87.19
NMSOW 16 78.18 77.29 87.28 87.28 87.28 87.28 87.28 87.28 87.28 87.28 87.28
CLD+Markup EM NMSON 08 30.86 30.86 30.86 30.86 30.86 30.86 30.86 30.86 30.86
NMSOW14 108.99 108.99 108.99 108.8 108.99 108.99 108.99 108.99 108.99
NMSO16 109.10 109.10 109.10 109.0 109.10 109.10 109.10 109.10 109.10
CLD per K SG JC DIP 02S
(assy) MDIP 24 228.0 228.0 228.0 228.0 228.0 228.0 228.0 228.0 228.0 228.0
MPCC 20 162.2 148.0 142.0 142.0 142.0 142.0 142.0 142.0 142.0 142.0 142.0
MPCC28 199.7 180.0 176.0 176.0 176.0 176.0 176.0 176.0 176.0 176.0 176.0
CLD&Markup SG JC DIP 02S
MDIP 24 285.0 285.0 285.0 285.0 285.0 285.0 285.0 285.0 285.0
MPCC 20 177.5 177.5 177.5 177.5 177.5 177.5 177.5 177.5 177.5
MPCC 28 220.0 220.0 220.0 220.0 220.0 220.0 220.0 220.0 220.0
Total
Revenue K$
TE CS80 57 57 57 57 57 0 0 0 0
ACT ACT FC
Q197 Q297 Q100 Q200 Q300 Q400 FY98 FY99 FY00
------ ------ ------ ------ ------ ------ ------ ------ ------
Fab Starts TE CS80 0 0 0 0 288 0 0
W cost + TE CS80 0 0 0 0 0 0 0
markup
Revenue K$ TE CS80 0 0 0 0 227 0 0
Assembly
Volume (K u) EM NMSON 08 155 205 275 275 275 275 778 943 1,100
NMSOW14 4 5 015 15 15 15 60 60 60
NMSOW16 307 317 462 462 462 462 1,614 1,839 1,848
------ ------ ------ ------ ------ ------ ------ ------ ------
467 528 752 752 752 752 2,452 2,842 3,008
SG JC DIP02S 0 0 0 0 95 0 0
MDIP 24 251 251 251 251 1,482 1,208 1,004
MPCC 20 2 2 2 2 8 8 8
MPCC 28 628 628 628 628 2,588 2,671 2,512
------ ------ ------ ------ ------ ------ ------
881 881 881 881 4,173 3,887 3,524
CLD (per K EM NMSON 08 30.19 25.39 24.69 24.69 24.69 24.69 24.69 24.69 24.69
(assy)
NMSOW14 80.61 72.77 87.19 87.19 87.19 87.19 87.19 87.19 87.19
NMSOW 16 78.18 77.29 87.28 887.28 87.28 87.28 87.28 87.28 87.28
CLD+Markup EM NMSON 08 30.86 30.86 30.86 30.86 30.86 30.86 30.86
NMSOW14 108.99 108.99 108.99 108.99 108.99 108.99 108.99
NMSO16 109.10 109.10 109.10 109.10 109.10 109.10 109.10
CLD per K SG JC DIP 02S
(assy) MDIP 24 228.0 228.0 228.0 228.0 228.0 228.0 228.0 228.0
MPCC 20 162.2 148.0 142.0 142.0 142.0 142.0 142.0 142.0 142.0
MPCC28 199.7 180.0 176.0 176.0 176.0 176.0 176.0 176.0 176.0
CLD&Markup SG JC DIP 02S
MDIP 24 285.0 285.0 285.0 285.0 285.0 285.0 285.0
MPCC 20 177.5 177.5 177.5 177.5 177.5 177.5 177.5
MPCC 28 220.0 220.0 220.0 220.0 220.0 220.0 220.0
Total
Revenue K$
TE CS80 0 0 0 0 0
-5-
EM NMSON 08 5 5 6 6 7 7 7 7 7 8 8
(97% NMSOW 14 2 2 2 2 2 2 2 2 2 2 2
yld)
NMSOW 16 38 38 45 41 47 51 51 45 48 49 49
----- ----- ----- ----- ----- ----- ----- ---- ---- ---- ----
45 45 52 48 55 60 60 53 56 59 59
SG JC DIP 02S
(97% MDIP 24 121 121 89 95 104 93 86 83 72 69 69
yld)
MPCC 20 0 0 0 0 0 0 0 0 0 0 0
MPCC 28 151 151 137 131 133 144 143 134 149 134 134
----- ----- ----- ----- ----- ----- ----- ---- ---- ---- ----
272 272 227 227 238 238 229 217 221 204 204
Total Revenue 373 373 336 331 350 297 289 271 278 262 262
Total Cost 299 299 269 265 280 238 231 217 222 210 210
EM NMSON 08 8 8 23 28 33
(97% NMSOW 14 2 2 6 6 6
yld)
NMSOW 16 49 49 171 195 196
----- ----- ----- ----- -----
59 59 200 229 235
SG JC DIP 02S
(97% MDIP 24 69 69 410 334 278
yld)
MPCC 20 0 0 1 1 1
MPCC 28 134 134 552 570 536
----- ----- ----- ----- -----
204 204 963 905 815
Total Revenue 262 262 1,164 1,135 1,050
Total Cost 210 210 931 908 840
-6-
Foundry "Flip" Agreement
Memory Demand on NSC
Exhibit F
ACT ACT FC
Q197 Q297 Q497 Q198 Q298 Q398 Q498 Q199 Q299 Q399 Q499 Q100
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
TE Starts(K) CS160EE 3.0 3.0 3.0 3.0 3.0 3.0 0.0 0.0 0.0 0.0 0.0 0.0
Wafer Cost CS160EE 423 446 397 397 397 397
Cost & CS160EE 496 496 496 496
Markup
Revenue CS160EE 1,414 1,414 1,414 1,414
Cost CS160EE 1,131 1,131 1,131 1,131
EM
Starts(K) NMSON 08 9,350 9,680 9,680 0 0 0 0 0 0 0
NMSOW 14 264 238 165 0 0 0 0 0 0 0
----- ----- ----- ----- ---- ---- ---- ---- ---- ----
9,614 9,918 9,845 0 0 0 0 0 0 0
CLD (assy) NMSON 08 27.35 26.15 24.69 24.69 24.69
NMSOW 14 87.55 85.34 87.19 87.19 87.19
CLD & Markup NMSON 08 30.86 30.86 30.86
NMSOW 14 108.99 108.99 108.99
Revenue NMSON 08 280 290 290
NMSOW 14 28 25 17
----- ----- -----
308 315 307
Cost NMSON 08 224 232 232
NMSOW 14 22 20 14
----- ----- -----
246 252 246
SG
Starts PNP QFP 1,420 1,493 1,300 0 0 0 0 0 0 0
48 (test)
PNP PLCC 920 1,086 1,180 0 0 0 0 0 0 0
---- ---- ---- ---- ---- ----
52 (test)
PDIP 28 1,350 0 0 0 0 0 0 0 0 0
----- ----- ----- ----- ---- ---- ---- ---- ---- ----
(assy)
3,690 2,579 2,480 0 0 0 0 0 0 0
CLD PNP QFP 139.0 160.0 160.0 160.0
48 test
PNP PLCC 130.0 130.0 130.0 130.0
52 (test)
PDIP 28 252.6 242.0 218.0 218.0 0.0
(assy)
CLD & Markup PNP QFP 200.0 200.0 200.0
48 (test)
PNP PLCC 162.5 162.5 162.5
52 (test)
PDIP 28 272.5 272.5 0.0
(assy)
Revenue PNP QFP 270 284 247
48 (test)
PNP PLCC 142 168 182
52 (test)
PDIP 28 349 0 0
----- ----- -----
(assy)
Q200 Q300 Q400 FY98 FY99 FY00
---- ---- ---- ---- ---- ----
TE Starts(K) CS160EE 0.0 0.0 0.0 9 0 0
Wafer Cost CS160EE 1,191 0 0
Cost & CS160EE 1,489 0 0
Markup
Revenue CS160EE 4,243 0 0
Cost CS160EE 3,394 0 0
EM
Starts(K) NMSON 08 0 0 0 19,360 0 0
NMSOW 14 0 0 0 403 0 0
----- ----- ----- ------ ---- ----
0 0 0 19,763 0 0
CLD (assy) NMSON 08
NMSOW 14
CLD & Markup NMSON 08
NMSOW 14
Revenue NMSON 08 580 0 0
NMSOW 14 43 0 0
----- ----- -----
622 0 0
Cost NMSON 08 464 0 0
NMSOW 14 34 0 0
----- ----- -----
498 0 0
SG
Starts PNP QFP 0 0 0 2,793 0 0
48 (test)
PNP PLCC 0 0 0 2,265 0 0
----- ----- -----
52 (test)
PDIP 28 0 0 0 0 0 0
----- ----- ----- ----- ----- -----
(assy)
0 0 0 5,059 0 0
CLD PNP QFP
48 test
PNP PLCC
52 (test)
PDIP 28
(assy)
CLD & Markup PNP QFP
48 (test)
PNP PLCC
52 (test)
PDIP 28
(assy)
Revenue PNP QFP 531 0 0
48 (test)
PNP PLCC 350 0 0
52 (test)
PDIP 28 0 0 0
----- ----- -----
(assy)
-7-
761 451 429 880 0 0
Cost PNP QFP 216 227 198 425 0 0
48 (test
PNP PLCC 114 134 146 280 0 0
52 (test)
PDIP 28
(assy) 280 0 0 0 0 0
----- ----- ----- ----- - -
609 361 343 704 0 0
Total K $ 2,456 2,155 2,133 1,414 0 0 0 0 0 0 0 0 0 5,703 0 0
Revenue
Total Cost 1,987 1,744 1,721 1,131 0 0 0 0 0 0 0 0 0 4,596 0 0
-8-
Exhibit K
1. Shortly prior to the conclusion of the first six (6) fiscal
periods of this Agreement ("Fiscal Half"), the Parties shall meet in order to
determine new prices for assembly services for each Facility for the second
Fiscal Half. At that meeting the Parties will review the manufacturing history
during such part of the first Fiscal Half, for which such information shall be
available, in order to determine each Facility's actual manufacturing cost base,
which shall be consistent with National's standard cost accounting practices in
effect as of the Effective Date (the "Reference Cost Base" per applicable
Facility). For each Facility if the Reference Cost Base, plus a twenty-five
percent (25%) markup is less than the price applicable for the first Fiscal
Half, prices for the second Fiscal Half for that Facility will be equal to its
Reference Cost Base, plus a twenty-five percent (25%) markup. Otherwise, the
prices for assembly services for the applicable Facility will remain the same as
during the first Fiscal Half.
The applicable Reference Cost Base and second Fiscal Half prices
will remain in effect for each Facility for the remaining term of this
Agreement. Shortly prior to the conclusion of the eighteenth (18th) fiscal
period of this Agreement, and every six (6) fiscal periods thereafter, the
Parties shall meet in order to determine National's actual manufacturing costs,
which shall be consistent with National's standard cost accounting practices in
effect as of the Effective Date, for the preceding Fiscal Half. If a Facility's
actual costs during the previous Fiscal Half were lower than its Reference Cost
Base, the Parties shall calculate what Fairchild would have paid if such actual
costs had been used in originally setting the prices, rather than the applicable
Reference Cost Base. National shall give Fairchild a credit equal to fifty
percent (50%) of the savings Fairchild would have realized if it had paid the
recalculated prices. No monies will be owing to or from Fairchild or to or from
National if National's actual costs during the preceding Fiscal Half were higher
than the applicable Reference Cost Base.
2. The prices for standard assembly and test services purchased
during a National fiscal year in excess of the Forecast volumes will be
negotiated by the Parties on a case by case basis.
3. Pricing for any extension and/or ramp-down period beyond the
first thirty-nine (39) fiscal periods of this Agreement will be negotiated in
good faith by the Parties.
-9-