EXHIBIT 10.12
Dated this __ th day of June, 1998
An
Assembly / Final Test
Subcontract Agreement
Between
This Subcontractor whose name and address
are stated in Section Two of the first schedule
and
Fairchild Semiconductor, Inc.
whose business registration address
is stated in Section Three of the first schedule
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THIS AGREEMENT is made the day and year stated in Section One of the
First Schedule hereto between:
1. The Subcontractor whose name and address are set out in Section Two of
the First Schedule (hereafter called the "Assembler") of one part; and
2. Fairchild Semiconductor, Inc. with its address set out in Section Three
of the First Schedule (hereafter called "FSC" or "Fairchild") of the
other part.
WHEREAS:
1. Fairchild is engaged in the business of designing, manufacturing and
marketing semiconductor devices.
2. Assembler is engaged in the business of manufacturing various
electronic components and semiconductor devices.
3. This assembly agreement is applicable only to the list of packages
referenced in Section One and Two of the Second Schedule.
4. The parties mutually desire that the Assembler assemble certain
integrated circuits designed by Fairchild subject to the terms and
conditions below.
5. The parties also mutually desire that the Assembler provide final test
service on assembled packages listed in the Second Schedule, Section
One.
NOW, THEREFORE, the parties hereto agree as follows:
1. SCOPE OF WORK
a) Assembler shall perform certain semiconductor assembly and
final test work for Fairchild. The semiconductor devices
(hereafter the "Devices") shall be assembled and/or tested in
a good and workmanlike manner in accordance with Assembler's
standard specifications and Fairchild's specific
specifications listed in the Third Schedule (hereafter the
"Specifications").
b) Notwithstanding anything contained herein to the contrary,
Fairchild reserves the right to engage any other subcontractor
to perform any assembly and/or final test work on a per need
basis. This agreement shall in no way be interpreted or
construed to be an exclusive dealing with the Assembler.
2. TERMS
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a) The term of this Agreement is as stipulated in Section Four of
the First Schedule. Fairchild will notify Assembler is writing
ninety (90) days prior to the expiration of this Agreement
whether or not it desires to renew this Agreement. Should
Fairchild desire such a renewal, then both parties will enter
into a good faith negotiation regarding the same. Failure by
Fairchild to provide such notice to Assembler shall be deemed
to be notice by Fairchild that it does not desire to renew
this Agreement. If Assembler is not notified 90 days prior to
the expiration of this Agreement, then Assembler should make
reasonable effort to begin a dialogue with Fairchild
concerning the plans of both parties.
b) Fairchild shall be entitled, in its sole discretion, to renew
this Agreement for at least one additional year term under the
same terms and conditions stated herein, by notification to
Assembler at least ninety (90) days prior to the expiration of
this Agreement.
3. MATERIALS / FACILITIES
a) Assembler shall supply all materials related to the assembly,
except for the items listed in Section Five of the First
Schedule.
The items listed in Section Five of the First Schedule may be
updated by the parties from time to time, at the request of
Fairchild, but at a minimum once per quarter. Fairchild shall
mark the equipment in such a manner as to serve notice to all
third parties that such equipment is owned solely by
Fairchild.
Assembler shall not place any contrary marks upon Fairchild
equipment and shall confirm to any third party Fairchild's
ownership of such listed equipment.
Assembler shall cooperate with Fairchild in making any filings
or registration permitted by applicable law to publish
Fairchild's ownership of said equipment, including, without
limitation, any filings or registrations permissible, if any,
under the Thailand Registration of Machinery Act (No. 2) B.E.
2530 (1987).
Assembler agrees that Fairchild may, upon reasonable notice,
enter Assembler's premises to recover said equipment in a
non-disruptive manner, regardless of whether the Assembler is
in default of this Agreement. Assembler agrees to cooperate
fully with any Fairchild efforts to retrieve any and all said
equipment. Assembler further agrees to maintain said equipment
in reasonable working order, with reasonable wear and tear
excepted.
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b) Assembler shall ensure that all materials and assembly
processes used to assemble Fairchild's Devices are free of
ODC's (Ozone Depleting Chemicals).
c) Assembler shall be responsible for supplying the assembly and
final test facilities and all equipment (unless otherwise set
forth in this Agreement) and personnel necessary to perform
assembly and/or test work contemplated hereunder. Unless
Assembler has received Fairchild's prior written consent
otherwise, all assembly and/or test work shall be performed at
the facility specified in Section Two of the First Schedule
hereto.
d) Fairchild agrees to accept the liability for any unique raw
materials that the Assembler has purchased for Fairchild's
Devices, if unused, provided that the Assembler has purchased
this inventory using Fairchild's 8 period rolling forecast and
used reasonable lead time provided by the vendor. Any excess
to this amount is the responsibility of the Assembler.
Fairchild's liability for such raw material shall be subject
to right of setoff against any amounts owed by Assembler to
Fairchild hereunder.
Fairchild's shall be liable under this Paragraph only to the
extent Assembler can deliver such raw materials to Fairchild
free and clear of all liens and encumbrances of others.
4. ASSEMBLY PLAN
a) For information and planning purposes, Fairchild will provide
Assembler with a eight (8) period rolling forecast (hereafter
the "Forecast") with quantities by package type as shown in
Section One of the Second Schedule.
b) A new Forecast shall be due during the last week of each
period (Fairchild's fiscal year calendar) and Assembler shall
respond to the Forecast with a one hundred percent (100%) firm
assembly commitment for the first period within five (5)
working days as long as the immediate period forecast is not
higher than that committed in the previous period.
c) Based on the Forecast provided by Fairchild, Assembler shall
ensure that the proportionate weekly capacity is available to
enable linear loading of Fairchild's orders. Fairchild shall
make reasonable effort to ensure linear loading to the
Assembler.
d) If Assembler starts factory program material more than thirty
(30) days ahead of customers request data, then the Assembly
assumes liability
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for the total value of the product unless the starts are
authorized by Fairchild.
5. PRICES
a) The prices to be paid by Fairchild for devices assembled
and/or tested pursuant to this agreement shall be mutually
agreed to by both Assembler and Fairchild. A Pricing Agreement
shall be documented noting effectivity date, and signed by
representatives of both the Assembler and Fairchild. A Pricing
Agreement shall be incorporated in this agreement into by
reference in Section Two, Second Schedule, and will be
expressed in U.S. Dollars. Prices shall be negotiated on an
annual basis, as a minimum. Updates on a quarterly basis shall
be permitted when mutually agreed upon between Assembler and
Fairchild. Yields used in determining the pricing shall be
reviewed on an annual basis, as a minimum.
b) All prices are to be expressed in terms of unit pricing that
include all the materials supplied by the Assembler unless
otherwise specified. Pricing shall reflect whether product is
to be standard packed in tubes or packed utilizing tape and
reel.
c) Unit pricing that is reduced contingent on specific minimum
volumes shall be documented on the Pricing Agreement. Failure
by Fairchild to meet the minimum quantity volumes required
shall result in a quarterly penalty payment. Penalty payment
shall be calculated as in the example provided below:
o Volume Price Break 500KU per week
o Actual Volume Load 400KU per week
o Penalty Payment 1.3MU times (base price less
volume price)
d) Prices agreed by both Assembler and Fairchild shall be
effective throughout the term of this contract except as
updated quarterly by mutual agreement between the Assembler
and Fairchild. Any cost improvement or steps taken by
Fairchild to reduce the existing price shall be incorporated
into the Pricing Agreement in the quarter immediately
following the identification and acceptance of reduction by
the Assembler. Any cost reduction generated by the Assembler
through improved utilization or efficiency of equipment and/or
operators being employed shall benefit the Assembler
exclusively until the next contractual pricing agreement is
incorporated.
e) New products introduced by Fairchild for the Assembler to
assemble and/or final test shall be priced through mutual
agreement between Fairchild and Assembler. Pricing of new
products shall follow the
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format mutually agreed to in the Pricing Agreement by both
Assembler and Fairchild.
6. PAYMENT TERMS
a) Payment to Assembler by Fairchild shall be made on a Net
Thirty (30) Days basis from the date of invoice, if not
specified otherwise in Section Three of the Second Schedule.
b) All payments shall be made in United States dollars (US$)
unless specified otherwise in Section Three of the Second
Schedule.
c) Assembler shall purchase die from Fairchild at those prices
defined by the Transfer Price File while the Assembler remains
on buy-sell agreement with Fairchild. Invoices for said die
shall be due and payable by Assembler on a Net Thirty (30)
Days basis and paid in United States dollars.
Assembler's payment obligations shall be secured by a security
interest in the die being purchased from Fairchild hereunder,
until all obligations of Assembler hereunder have been
satisfied in full.
Assembler hereby grants to Fairchild a security interest in
all die purchased from Fairchild and in all proceeds thereof
until the purchase price for the die, and all obligations of
Assembler hereunder have been satisfied in full.
7. TURNAROUND TIME
a) Assembler shall use its best efforts to ship Devices (assembly
only or assembly and test) in the turnaround times indicated
below:
Assembly Assembly and Test
-------- -----------------
50% 4.0 Days 8.0 Days
98% 7.0 Days 14.0 Days
b) The Turnaround Time shall mean the elapsed number of calendar
days from the date of the Die or assembled unit shipment
arrives at the Airport of Assembler's manufacturing location,
or date the die is requested to be built, whichever is later,
and the date assembled and/or tested Devices are shipped out
of the same Airport. Turn-around Time shall include Sundays
and Holidays at Assembler's location.
8. YIELD
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a) Assembler shall use its best efforts to meet the Assembly /
Test Yields defined in Section Four of the Second Schedule.
b) Assembly yield shall be measured by acceptable assembled
Devices shipped versus the number of good die the Assembler
received and shall be assessed over a thirty (30) day time
period on a per package and per lead count basis. Should the
yield performance fall five percent (5%) below that specified
in Section Four of the Second Schedule, Assembler shall submit
a specific explanation to Fairchild for review and the cost of
indemnification shall be mutually determined and agreed upon
between Fairchild and Assembler on a case to case basis,
unless otherwise specified in Section Four of the Second
Schedule.
c) Should the yield performance fall below minimum contract yield
that is specified in Section Four of the Second Schedule on a
lot to lot basis, Assembler shall notify Fairchild
immediately. A specific explanation in the standard report
format shall be submitted to Fairchild for review within the
next seven (7) days.
d) For assembly of untested Devices only, Fairchild will perform
"First Test" testing on the Devices received from the
Assembler at Fairchild's test location and will report the
test results to Assembler on a weekly basis, or as and when
the need arises, to assist Assembler in monitoring its
assembly performance.
e) Assembler shall calculate yield variance as defined by
Attachment A of the Second Schedule Section Four every period
(per Fairchild Fiscal Year Calendar). Yields may be adjusted
each quarter if mutually agreed to by both assembler and
Fairchild. A reclaim process shall be implemented by Assembler
to reduce the amount of negative variance claimed against
Fairchild for E2PROM products. The reclaim procedure shall be
as defined in Attachment B of the Second Schedule Section Four
attached herein.
f) Yield variance claims by the Assembler shall be as defined of
the Second Schedule, Attachment A and are subject to the
concurrence and approval of Fairchild.
g) Fairchild reserves the right to reprocess finished goods in an
effort to maximize utilization of its inventories. Procedures
and pricing of reprocessed materials is defined in the Second
Schedule Section Four, under Attachment C.
h) Fairchild shall have the right to terminate this Agreement
should Assembler be unable to meet agreed upon yield levels
within ninety (90) days of notification from Fairchild.
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9. PROVISION OF DIE
a) Fairchild shall sell die and/or assembled units to Assembler
for assembly and/or test work as long as Assembler remains on
buy-sell agreement with Fairchild.
b) Assembler shall not use uncommitted die for assembly prior to
receiving specific loading instructions from Fairchild or its
designated receiving location.
10. SHIPMENT
a) All shipments of die and material to and from FSC and
Assembler shall be under FOB shipping point terms. FSC and
Assembler agree that freight an handling costs shall be
covered per First Schedule Attachment B.
b) All shipments of assembled and/or tested Devices from
Assembler to a Fairchild location specified in Section 5 of
the Second Schedule will be on FOB term. If Assembler is
paying freight on behalf of Fairchild then manual billing
should be done on a monthly basis.
c) Assembler is required to use the freight forwarder specified
by Fairchild for shipment of assembled Devices. Assembler
shall ensure that all export controls and licenses are in
place between Assembler's location and Fairchild's regional
warehouses and shipments made directly to Fairchild's
customers per Fairchild's instructions.
d) FSC shall be responsible for freight and transportation costs
plus handling charges from FSC's plants or the plants of FSC's
subcontractor (from where the dies, consigned equipment or
material are shipped) to the Bangkok International Airport or
other port of entry. Assembler shall be responsible for any
inland transportation costs within Thailand after clearing
Thai customs, plus any handling charges, from the Bangkok
International Airport or other port of entry to Assembler's
plant.
11. ACCEPTANCE
a) Fairchild's acceptance or rejection of assembled and/or tested
Devices shall be based on the Specifications. Fairchild shall
have the right to reject isolated lots or groups of lots
assembled and/or tested Devices at its incoming or designated
receiving location.
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b) Fairchild will notify Assembler of any rejection that exceeds
AQL Limits per Specifications and reject samples shall be
promptly shipped to Assembler for verification upon
Assembler's request.
c) Assembler shall have fourteen (14) days to reply to
Fairchild's notification and upon agreeing that the rejection
is caused by assembly workmanship deficiency the rejected lots
if reworkable shall be returned to Assembler for rework and
Assembler will pay all associated freight costs. If rejected
lots are non-reworkable, Fairchild is entitled at a minimum,
to debit Assembler's account the dollar amount in the
Assembler's original invoice for the defective assembled
Devices, unless otherwise specified in Section Four of the
Second Schedule.
d) Fairchild shall have the right, at its expense, to employ one
or more inspectors, or professional or technical personnel or
its designees, with access to Assembler's facility to inspect
the processes, materials and Fairchild's Devices and to
perform quality audit. The quality Inspector is authorized to
shutdown, in his or her sole reasonable discretion, the
Assembler's manufacturing activities for Fairchild, upon
discovering any discrepancies against the Specifications.
12. CHANGE OF SPECIFICATIONS
a) Assembler shall advise Fairchild in writing at least fourteen
(14) days prior to making any proposed changes with respect to
direct materials, suppliers, manufacturing processes and/or
assembly location. Fairchild reserves the right in its
absolute discretion to accept or reject such proposed changes.
Upon obtaining the conceptual acceptance of the proposed
changes from Fairchild, Assembler shall perform and provide
the relevant reliability data and/or build qualification lots
per Fairchild's requests at Assembler's expense. Proposed
changes shall be implemented on a cut-off date mutually
determined by both parties upon obtaining final approval from
Fairchild.
b) Assembler agrees to use its best efforts to implement all
reasonable proposals for improvement of specifications
suggested by Fairchild.
c) Assembler shall use its best efforts to participate in quality
and yield enhancement programs as suggested by Fairchild.
d) Assembler shall not be required to implement any change where
the cost is shown to exceed the benefit anticipated unless
mutually agreed to by both parties.
13. MANUFACTURING DATA
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a) Assembler shall provide the manufacturing data necessary as
agreed to between Assembler and Fairchild. It shall include
the amount at die and package level of Assembler's diebank,
WIP, and stagnant inventories. Assembler shall be able to
provide Fairchild on a weekly basis, a summary of shipping
activity and die receipts. Assembler shall also provide
Fairchild weekly reports regarding assembly and test yields,
as well as cycletimes for both assembly only and assembled /
tested products at the package level. Assembler shall also
provide Fairchild with any other information Fairchild
reasonably requests. The format for stated data shall be as
mutually determined between Assembler and Fairchild.
b) Wherever possible, Assembler agrees to allow Fairchild to
establish a computer-link with the Assembler's computer system
to enable quick access to data related to Fairchild's Devices
only.
c) Assembler shall provide period-end inventory records to FSC.
Data to include all die, raw materials, and tested / untested
assembled products sold to assembler in anticipation of
finished goods receipt. Inventories shall include al stagnant
inventories, such as engineering holds and binstock.
Inventories shall include materials (assembled, untested)
received from other subcontractors on behalf of FSC, and be so
designated. Details of the inventory shall be at the chip /
package level as required. FSC reserves the right to audit
such reports, as deemed necessary.
14. MANUFACTURING LOT
a) Assembler shall ensure that no manufacturing lot shall consist
of more than one die lot. At Assembler's discretion, large die
lots can be broken down into smaller manufacturing lots.
b) Assembler shall assign a unique manufacturing lot number to
each assembly lot to maintain tractability. The lot number
shall appear on the Lot Traveller together with Fairchild's
Device code.
15. REJECTED DIE & REJECTED ASSEMBLED UNITS
Fairchild may at its discretion, request all rejected die and rejected
assembled and/or tested Devices be returned by the Assembler, or
otherwise to destroyed by the Assembler. Such destruction, if desired,
shall be witnessed by Fairchild personnel or alternatively, Fairchild
may request the Assembler to issue a letter of assurance to that
effect. Fairchild shall pay for freight for such returns.
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16. U.S. EXPORT / IMPORT LAWS
Assembler shall comply with all applicable U.S. Import and Export Laws
and Regulations. Assembler shall meet such requirements, like Country
of Origin marking on each package as requested by Fairchild, in order
to ensure full compliance with such Laws. The provisions of this
Section 16 shall survive the termination of this Agreement and continue
indefinitely.
17. WARRANTY
a) The assembled and/or tested Devices sold by Assembler to
Fairchild shall be in good condition, free of defects in
material and workmanship (except with regard to die supplied
by Fairchild to which Assembler warrants only workmanship) for
a period of twelve (12) months after the date of acceptance by
Fairchild.
b) In the event of assembled and/or tested Device failure proven
by way of failure analysis to have been caused by defects in
workmanship, Assembler shall, issue credit for at a minimum,
the dollars amount of the assemblers original invoice of the
relevant Devices to Fairchild, or assemble similar Devices for
Fairchild at no charge.
c) Assembler shall have no obligation under any warranty set
forth above in the event that;
o the Devices have failed as a result of normal wear
and tear, catastrophe or fault or negligence of
Fairchild or its customers;
o the Devices have been modified by Fairchild or its
customers in a way which affects the performance of
the Devices;
o the Devices have not been stored, maintained, or used
by Fairchild or its customers in accordance with
Fairchild's standard operating and/or maintenance
instructions.
18. INSURANCE
Fairchild will be responsible for insurance coverage for all consigned
materials and equipment in-transit to Assembler and in-house with
Assembler.
19. INDEMNIFICATION
Fairchild shall at its cost and expense defend any claim or action
brought against the Assembler based upon a claim that any Device
assembled
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hereunder by Assembler for Fairchild in accordance with the Fairchild's
specifications, infringes any U.S., Japanese, or European Union patent,
copyright, trade secret or other intellectual property right, and
Fairchild will pay any settlements entered into on behalf of, or
damages awarded against Assembler, provided that Fairchild is given
full control of such defense and settlement, Assembler provides all
reasonable assistance in connection therewith as requested by
Fairchild, at Fairchild's cost and expense and Assembler provides
written notice to Fairchild within a reasonable time after becoming
aware of such claim or action.
20. TERMINATION AND DEFAULT
a) Default by Assembler: the occurrence of any of the following
events, if not cured within the periods set forth herein,
shall be an Event of Default by the Assembler hereunder: (1)
Assembler fails to make any payment due to Fairchild hereunder
within fourteen (14) days of its due date, or ten (10) days
after receipt of notice of non-payment from Fairchild,
whichever is later; (2) Assembler, without the consent of
Fairchild, removes, sells, transfers, or encumbers
(voluntarily or involuntarily) any of the Fairchild Equipment
detailed in Attachment A, as identified by Section Five of the
First Schedule, or attempts to do any of the foregoing; (3)
Assembler fails to perform any of its remaining obligations
hereunder including, without limitation, the failure to meet
the Assembly/Test Yields set forth in Section Four of the
Second Schedule, or the continuing breach of any of the
representations of warranties of Assembler hereunder if not
cured within ten (10) days after receipt of notice of
non-compliance from Fairchild; (4) Assembler is in default
under the terms of any indebtedness for borrowed money when
due (whether at maturity or otherwise) or fails to perform any
material covenant or condition on its part which failure
causes the acceleration of such indebtedness; (5) Assembler
sells, leases, or disposes of any portion of its assets, which
in Fairchild's reasonable judgment could adversely affect
Assembler's performance hereunder, except when such action
occurs in the normal course of its business, or the loss, the
uninsured destruction, or the attachment of such assets; (6)
Assembler ceases doing business as a going concern, makes an
assignment for the benefit of creditors, admits in writing its
inability to pay its debts as they become due, files a
petition of bankruptcy, is declared bankrupt, becomes
insolvent, goes into liquidation or receivership, or loses
legal control of its business; (7) Assembler merges or
consolidates with any other entity, which in Fairchild's
judgment could adversely affect Assembler's performance
hereunder, or makes a material change in the senior management
of the Assembler; (8) Fairchild reasonably believes that the
Assembler will not in the future be able to meet each and
every one of its material obligations under this Agreement; or
(9) there shall occur a material adverse change in the
financial or business condition of the Assembler.
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b) Default by Fairchild: the occurrence of any of the following
shall be an Event of Default by Fairchild hereunder: (1)
Fairchild fails to perform any of its obligations hereunder,
and such failure continues for a period of 30 days after
Fairchild's receipt of written notice of such failure; or (2)
Fairchild ceases doing business as a going concern, makes an
assignment for the benefit of its creditors, admits in writing
its inability to pay its debts as they become due, files a
petition as to its bankruptcy, is declared bankrupt, becomes
insolvent, goes into liquidation or receivership, or loses
legal control of its business
c) Termination:
1) upon the occurrence of an Event of Default which is
not cured within any applicable cure or grace period,
set forth below, or thirty days (30) of receipt of
written notice, if no cure or grace period is
mentioned, the non-defaulting party shall have the
right to immediately terminate this Agreement by
providing written notice to the defaulting party,
which notice shall be effective upon dispatch; and
2) Fairchild shall have the right to terminate this
Agreement at any time without cause (subject to its
obligations under subsections (d) and (e) of this
Section) by providing 90 days prior written notice of
its intentions to terminate to Assembler.
d) Termination shall not release either party from the obligation
to make payment of all amounts then due and payable.
e) In the event of termination, Assembler shall return all die at
contract price, materials, equipment and technical documents
that Fairchild has previously provided to Assembler. Fairchild
shall also be obligated to buy back all work-in-progress (WIP)
at Assembler's cost, and all assembled and tested devices in
Assembler's stock at contracted prices, provided that said WIP
and devices are assembled in accordance with the
Specifications.
21. ENTIRE AGREEMENT
a) The Schedules referred to and attached to this Agreement are
hereby incorporated and by this reference made a part hereof.
This Agreement, and the Schedules, hereto, embody the entire
understanding of the parties as it relates to the subject
matter hereof.
b) The relevant sections of the Schedules, whenever necessary,
shall be updated to include any changes and additional new
business plans
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agreed between the parties. The revised Schedules signed by
the duly authorized officers of the respective parties, shall
become the addendum of the original Schedules and by this
reference made a part hereof.
c) This Agreement supersedes any prior agreements or
understanding between the parties with respect to such subject
matter.
d) No amendment or modification of this Agreement shall be valid
and binding upon the parties unless signed by the duly
authorized officers or representatives of the respective
parties.
e) This agreement shall be renegotiated upon such time as FSC and
Assembler mutually agree to change from buy-resell arrangement
to an agreement of consignment. The new agreement shall
supersede all prior agreements, inclusive of the Agreement
herein.
22. WAIVER
Should any party fail to enforce any provision of this Agreement or to
exercise or waive any right in respect hereto, such failure or waiver
shall not be constructed as constituting a waiver or a continuing
waiver of its rights to enforce such provisions or right or any other
provision or right.
23. AGENCY
a) The relationship of the parties under this Agreement shall be
as independent contractors.
b) Nothing contained herein or done in pursuance of this
Agreement shall constitute the parties as entering upon a
joint venture or partnership, or shall constitute either party
being an employee of the other party for any purpose or in any
sense whatsoever.
24. INVALIDITY
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. In the
event of such partial invalidity, the parties shall seek in good faith
to agree on replacing any such legally invalid provision with
provisions which in effect will, from an economic viewpoint, most
nearly or fairly approach the effect of the invalid provision.
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25. COUNTERPARTS
This Agreement may be executed simultaneously in several duplicate
originals in the English Language, each of which shall be deemed an
original, but all of which shall constitute one and the same
instrument.
26. JURISDICTION
The Agreement shall be governed by, and interpreted and construed in
accordance with the Laws of the Country specified in Section Three of
the First Schedule, where the relevant Fairchild Location or Product
Division resides.
27. CONFIDENTIALITY
a) For the purposes of this Agreement, "Confidential Information"
shall mean all proprietary information relating to the subject
matter of this Agreement which is disclosed by one of the
parties to the other in written, graphic and/or computer data
form and originally designated in writing by the disclosing
party as "Confidentiality Information" or by words of similar
import, or if disclosed orally is designated as "Confidential
Information" at such time and is summarized and confirmed in
writing within thirty (30) days after oral disclosure that
such orally disclosed information is "Confidential
Information"
b) Each party acknowledges and agrees that all Confidential
Information identified as such is confidential or proprietary
to the disclosing party. Each party agrees not to use any such
Confidential Information during the term of the Agreement and
for an additional period of three (3) years for any purpose
other than as permitted or required for performance by such
party hereunder. Each party further agrees not to disclose or
provide any of such Confidential Information to any third
party and to take all necessary measures to prevent such
disclosure using the same standard of care if normally uses in
protecting its own trade secrets and proprietary information.
c) Notwithstanding any other provision of this Agreement, no
information received by a party hereunder shall be
Confidential Information if said information is:
o published or otherwise made available to the public
other than by a breach of this Agreement;
o furnished to a party by an independent third party
without restriction on its dissemination;
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o approved for released in writing by the party
designating said information as Confidential
Information;
o known to or independently developed by the party
receiving Confidential Information hereunder who have
had no access to the said Confidential Information;
o disclosed to a third party by the party transferring
said information hereunder without restricting its
subsequent disclosure and use by the third party.
d) Disclosure of any Confidential Information by a party hereto
shall not be precluded if such disclosure is in response to a
valid order of a court or other government body, provided that
the receiving party promptly notifies the other party of such
order and makes a good faith effort, at the expense of the
party which originally disclosed the information, to obtain a
protective order requiring the Confidential Information so
disclosed be kept in confidence and used only for the purpose
for which such order was issued.
28. ARBITRATION
This Agreement shall be concluded in the United States and governed by,
and construed in accordance with, the laws of the United States. The
Parties shall use their best efforts to settle by way of amicable
negotiations any differences which may occur between them in connection
with this Agreement. If the Parties fail to reach such an amicable
settlement, either party may submit such differences to arbitration,
which shall have sole jurisdiction and shall take place in accordance
with the following minimum set of rules:
a) The rules of the International Chamber of Commerce (ICC) shall
apply.
b) The arbitration shall be held by a single arbitrator mutually
acceptable to both Parties. If the Parties cannot agree on a
single arbitrator, each Party shall identify one independent
individual who shall to appoint a single arbitrator.
c) The decision of the arbitrator shall be considered as a final
and binding resolution of the disagreement and may be entered
as judgement in any court of competent jurisdiction.
d) The arbitration shall be held in a mutually agreeable
location.
29. FINANCIAL REPORTING
16
a) Through Fairchild's Fiscal Year 2000, Assembler agrees to
provide Fairchild upon request, and in any event not less than
quarterly, all current financial information prepared for
Assembler's management or its lenders related to Assembler's
current liabilities and current assets together with cashflow
predictions and other information related to or reasonably
necessary to assess Assembler's financial ability to perform
its obligations hereunder. In addition, Assembler shall
provide quarterly income and expense statements, as well as
quarterly balance sheets, to the extent not otherwise
provided. All such information shall be prepared in accordance
with generally accepted accounting principles. Statements
shall indicate the financial condition of Assembler, together
with any other financial information which Fairchild may
reasonably request, subject to any restrictions set forth
elsewhere herein.
b) Within sixty (60) days of Assembler's fiscal year end,
Assembler shall provide to Fairchild Assembler's year end
audited financial statements prepared by an accounting firm
reasonably acceptable to Fairchild. In addition, Assembler
shall provide Fairchild , upon reasonable request, additional
financial information related to or reasonably necessary to
assess Assembler's financial ability to perform its
obligations hereunder.
c) All information received by Fairchild pursuant to this
Paragraph shall be held in the strictest confidence by
Fairchild. All such information shall be reviewed and
evaluated only by (i) the individuals holding the following
positions: FSC's Chief Financial Officer, Chief Legal Officer,
Controller and any member of their immediate staffs; (ii) FSC
Memory Division's Controller and Chief Logistics Officer and
their immediate staffs and (iii) any FSC managers directly
responsible for the administration of this Agreement and (iv)
those FSC personnel specifically directed by any of the
foregoing individuals to review or assess Assembler's
financial ability to perform its obligations hereunder. All
information received by Fairchild pursuant to this Paragraph
shall be reviewed and evaluated only for the purpose of
assessing Assembler's financial ability to perform its
obligations hereunder, and used for no other purpose.
30. THIRD-PARTY VENDOR ACTIVITY
FSC agrees to reimburse for third-party vendor work when mutually
agreed upon in advance. FSC agrees to pay original invoice plus 10%
premium for related assemblers activities. Assembler agrees to provide
FSC original quotation for approval, copy of original invoice plus
calculations of premium.
31. WAIVER BY ASSEMBLER
17
To the fullest extent permitted by applicable law, Assembler waives any
right to sue Fairchild for specific performance of this Agreement. Upon
occurrence of the Event of Default by Fairchild hereunder, which Event
of Default is not cured within any applicable grace period, Assembler's
sole remedy shall be to terminate this Agreement and to recover,
whether by arbitration or by legal action, any amounts owed by
Fairchild to Assembler hereunder.
32. ASSIGNMENT
This Agreement may not be assigned by either party hereto without the
prior written consent of the non-assigning party. Notwithstanding the
foregoing, Fairchild may assign its rights and obligations under this
Agreement without the consent of the Assembler to any Fairchild
subsidiary or affiliate.
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IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
the day, month and year first above written.
SIGNED by said Assembler: In the presence of:
- -------------------------------- ----------------------------------------
Name: Thavisak Thangsupanich Name: Terence Chua
Title: Chief Executive Officer Title: Director of Business Development
Date: April ___, 1998 Date: April ___, 1998
- --------------------------------
Name: Udom Udompanyavit
Title: President
Date: April ___, 1998
SIGNED by In the presence of:
Fairchild Semiconductor, Inc.
- ------------------------------------- ----------------------------------------
Name: Daniel E. Boxer Name:
Title: Chief Administrative Officer Title:
18
Date: April ___, 1998 Date: April ___, 1998
19
FIRST SCHEDULE
- --------------------------------------------------------------------------------
SECTION ONE: DAY / MONTH / YEAR OF THIS AGREEMENT
- --------------------------------------------------------------------------------
1st day of April, 1998
- --------------------------------------------------------------------------------
SECTION TWO: NAME AND DESCRIPTION OF THE ASSEMBLER
- --------------------------------------------------------------------------------
Company Name: NS Electronics Bangkok (1993) Ltd.
Address: 40/10 Soi Lasalle
Sukhumvit 105, Bangna
Bangkok 10260
Country: Thailand
- --------------------------------------------------------------------------------
SECTION THREE: FAIRCHILD SEMICONDUCTOR, INC.
- --------------------------------------------------------------------------------
Location Name: Fairchild Semiconductor, Inc.
Address: 333 Western Avenue
South Portland
Maine 04106
U.S.A.
- --------------------------------------------------------------------------------
SECTION FOUR: TERM OF AGREEMENT
- --------------------------------------------------------------------------------
Effective Date: April 1, 1998 Expiration Date: May 30, 2000
- --------------------------------------------------------------------------------
SECTION FIVE: MATERIALS / EQUIPMENT CONSIGNED BY FAIRCHILD
- --------------------------------------------------------------------------------
See Attachment A for list of equipment owned by FSC.
- --------------------------------------------------------------------------------
20
ATTACHMENT A
EQUIPMENT OWNED BY "FSC" *
Equipment Tag #
- --------- ------
Tritemp SN1 1547523
Tritemp SN2 1547592
Tritemp SN3 1547593
Tritemp SN4 1547618
Tritemp SN5 1547619
Tritemp SN6 1550853
Tritemp SN7 1550893
Tritemp SN8 1550899
Tritemp SN11 1550902
Tritemp SN13 1553148
Tritemp SN14 1555777
Tritemp SN17 1555774
Tritemp SN18 1555776
Tritemp SN12 1550903
Tritemp SN19 1557828
Tritemp SN24 n/a
Tritemp Bench Tester SN1 1547594
Tritemp Bench Tester SN2 1547595
Tritemp Bench Tester SN3 n/a
Memex Testers (7)
PC Pentium 6X86-166 Set (2) n/a
Laserjet 6L Printer n/a
Sun Sparc 5 (1) n/a
*Equipment in place at NSEB as of November 24, 1997
(to be physically verified by FSC during the week of October 13, 1997)
21
ATTACHMENT B
Freight and Handling Costs
Product Ship From Ship To Paid By
- ------- --------- ------- -------
die, raw materials for assembly FSC Assembler Assembler
die, raw materials, consigned equip Subcontractor Assembler FSC
Consigned equipment FSC Assembler FCS
Assembled, tested devices Assembler FSC FSC
Finished Goods, reprocessing FSC/RCW whses Assembler FSC
Finished Goods, QA Return FSC/RCW whses Assembler Assembler
Finished Goods, customer QA return Customer,FSC Assembler Assembler
Note 1: FSC shall be deemed any site specifically owned and operated
by said company or any subcontractor's wafer fabrication site used by
FSC in the manufacturing of die.
Note 2: Subcontractor shall be deemed any assembly and test
manufacturing site not owes and operator by FSC.
Note 3: Should any customer return be deemed invalid or should such
return have been generated by fault of FSC, then FSC agrees to
reimburse Assembler for freight costs incurred
22
SECOND SCHEDULE
- --------------------------------------------------------------------------------
SECTION FOUR: YIELDS
- --------------------------------------------------------------------------------
Standard Yields Remarks
Assembly Cum Yield is to be: PDIP 8 LD 99.3% SOIC 8/14 LD 99.3%
-TQFP 48/64 LD 99% PDIP 18/28/32 LD 99% PLCC 32/52 LD 99%
CERDIP 24/28 LD 98.5% 32LD 98.2% 40LD 97% TSSOP 8/14/16 LD 99%
TSOP 28/32 LD 99%
First Test Yield:
Per pricing agreement
Final Test Yield:
Per pricing agreement, see attachments A, B
- --------------------------------------------------------------------------------
SECTION FIVE: SHIPMENT SENT TO
- --------------------------------------------------------------------------------
1) Products:
Attention of:
Company Name:
Address:
Phone / Fax Contact Numbers:
2) Products:
Attention of:
Company Name:
Address:
Phone / Fax Contact Numbers:
- --------------------------------------------------------------------------------
SECTION SIX: MANUFACTURING DATA
- --------------------------------------------------------------------------------
See Attachment 13
- --------------------------------------------------------------------------------
23
SECOND SCHEDULE
- --------------------------------------------------------------------------------
SECTION ONE: DEVICE VOLUME FORECAST
- --------------------------------------------------------------------------------
Package Lead Product Volume Forecast
- ------- ---- ------- ---------------
Type Type Type Pd Pd Pd Pd
---- ---- ---- -- -- -- --
Assembly
Per Period 8 assembly forecast that is to be submitted by FSC each
financial period, covering the following packages
SOIC TSOP SOT23
M_DIP TSSOP TQFP
PLCC CER-DIP
Final Test
Per 8 period packout forecast to be submitted by FSC each financial
period
- --------------------------------------------------------------------------------
SECTION TWO: PRICES
- --------------------------------------------------------------------------------
Package Lead Unit Pricings Remarks
- ------- ---- ------------- -------
Type Type
---- ----
Per pricing Agreement
- --------------------------------------------------------------------------------
Payment Term:
Net 30 Days
- --------------------------------------------------------------------------------
24
Attachment A of second schedule
Yield Variance Computation Methodology
(refer to Clause 8E)
1 Yield Variance shall be computed by Process flow by NSPN.
2 Engineering Database System shall be used for Yield Variance computation.
3 Yield Variance shall be calculated on prime processing (B Type) Only.
4 The Formula for Yield Variance calculations are as follows:
a) Yield Variance in favor of Assembler= (1/ "Actual Yield" - 1/Contract Yield) X "pack-out Qty"
X (Untested Package Cost + Final Test Cost).
b) Yield Variance in favor of National= (1/ "Actual Yield" - 1/Contract Yield) X "pack-out Qty"
X Untested Package Cost.
Notes:
"Actual Yield" shall mean the cumulative of all the yields for the prime
operations for each NSPN according to the respective Manufacturing Flow and
with the yields FIXED for the workmanship related operations as shown
below:
Operation Fixed Yield
--------- -----------
Burn-In 100%
Tape & Reel 100%
FOI 99.65%
Pack 100%
"Pack-out Qty" shall mean the pack-out quantity for the prime (B-type
processing) lots only excluding the reclaim (C-type processing) lots and
engineering (R-type processing) lots.
Untested Package Cost is the TC13x Assembly Cost in Contract Price List.
Assembler shall be responsible to ensure the correlation of Yield Variance
Report quantities to Engineering Database Report and R563 LOTS Report
quantities at all inventory points.
25
Attachment B of second schedule
Reclaim Procedure For E2PROM Products
(refer to Clause 8E)
1. The fallous (reclaimable rejects) for the following listed devices shall be
reclaimed:
Technology Device Operation Stored Bin
CS100 NM24C*EM8/EN Tritemp Every Bin except Bin 6
NM24C*LEM8/LEN Tritemp Every Bin except Bin 6
NM24C*EM8/EN Tritemp Every Bin except Bin 6
NM93C*TEM8 Tritemp Every Bin except Bin 6
NM93C*AEM8/AEN Tritemp Every Bin except Bin 6
NM93C*LM8/LN/TLM8 Tritemp Every Bin except Bin 6
NM93C*LEM8/LEN/TLEM8 Tritemp Every Bin except Bin 6
NM93C*LM8/LN 2HT1 Bin 5
NM93C*LEM8/LEN 2HT1 Bin 5
NM25C*OEM8/EN 2HT1 Bin 5
CS160 NM93C*LZEM8/LZEN/LZM8/TLZEM8 1HT1/2HT1 Bin 3& Bin 5
NM93CS*LZEM8/LZEN/LZM8/TLZEM8 1HT1/2HT1 Bin 3& Bin 5
("*"= the numeric that refers to a specific device type)
2. The identified fallouts above mentioned shall be transfered to EB3299
inventory bucket and a report generated at each period end.
3. Assembler shall be responsible to batch the fallouts for transfer from
EB3299 to FA 6 (Function Area 6) of LOTS System which is designed for
Reclaim processings, or other mutually agreed locale, upon elimination of
LOTS system.
4. Assembler shall calculate the Reclaim gain in favor of National on a
periodic basis using below Formula or an alternative later agreed between
the Assembler and National.
Reclaim Gain in favor of National= "Reclaim Pack-out Qty" x Tested Package
Cost - (Reclaim Pack-out Qty" / "Reclaim Cum Yld" x Final Test Cost)
5. NSEB will be responsible for minimum quantities of reclaimed mat'ls to be
retested at 30K day average. This minimum quantities include the reprocess
mat'ls which require black ink and remarked. The minimum number is
changeable when both parties agree.
Notes:
"Reclaim Pack-out Qty" shall mean the pack-out quantity of the reclaimed
lots under C-type processing per Engineering Database Report. "Reclaim Cum
Yield" shall mean the cumulative of all the yields for the operations the
reclaimed lots have undergone. Tested Package Cost is the TC11x Finished
Goods Cost in Contract Price List.
6. Assembler shall be responsible to ensure the correlation of Reclaim
Report's quantities by NSPN to Engineering Database Report and R563 LOTS
Report quantities at all inventory points.
26