Manufacturing Services Agreement - Motorola Inc., Advanced Semiconductor Engineering Inc. and ASE (Korea) Ltd.
MANUFACTURING SERVICES AGREEMENT
This Manufacturing Services Agreement (the "AGREEMENT") is entered
into on July 3, 1999 by and between Motorola, Inc., with offices at 3501 Ed
Bluestein Blvd., Austin, Texas 78762 and at 6501 William Cannon Drive West,
Austin, Texas 78735, ("MOTOROLA"), Advanced Semiconductor Engineering, Inc.,
with offices at Room 1901, Taiwan World Trade Center International Bldg., 19th
Floor, No. 333 Keelung Road, Section 1, Taipei, Taiwan, Republic of China ("
ASE INC.") and ASE (Korea) Ltd., a Korean company ("ASE KOREA") and,
collectively with ASE Inc., "ASE"). Each of Motorola and ASE is a "Party".
WITNESSETH:
WHEREAS, Motorola designs and develops semiconductor products which it
sells to the commercial market, and wishes to contract with a third party for
the assembly, test and associated services regarding certain of these products;
WHEREAS, ASE has the capacity and skill to perform the assembly, test
and associated services on high quality semiconductor products in volume; and
WHEREAS, Motorola and ASE desire to establish a strategic supplier
relationship in which ASE will utilize the capacity at its final semiconductor
manufacturing operation and facilities of ASE Korea located at Paju, Korea (the
"PAJU FACILITY") on a priority basis to perform the assembly, test and
associated services on certain semiconductor products for Motorola;
NOW, THEREFORE, Motorola and ASE agree to enter this Agreement to
accomplish the foregoing premises in accordance with the following terms and
conditions:
1. PURPOSE OF THIS AGREEMENT
The purpose of this Agreement is to provide the terms and conditions
which shall be applicable to the assembly, test and associated services
provided to Motorola by ASE, upon the purchase of the Paju Facility from
Motorola by ASE Korea
This Agreement does not limit in any way Motorola's right to perform
the Work (as defined below) or to have others to perform the same or similar
Work on the Contract products (as defined below) for any reason.
ASE shall commence performing services for Motorola on the date
hereof, and shall complete the services within the time and monetary
limitations specified
<PAGE> 2
from time to time by Motorola pursuant to the terms hereof. If in the course of
performing the Work ASE determines that it shall be unable to complete it
within the time and monetary limitations specified pursuant to the terms
hereof, ASE shall notify Motorola promptly of such determination in writing.
2. DEFINITIONS
"ASE FACILITY" means the Paju Facility.
"CONTRACT PRODUCTS" means, collectively, those Motorola-designed
products which are described in the Supplements (as defined below) to this
Agreement.
"DIE" means an integrated circuit chip as cut (diced) from a finished
wafer.
"SCRAP" means any die or device, in any stage of the Work and
regardless of its functionality, that is not in conformity with the
requirements of this Agreement for the Contract Products.
"SPECIFICATIONS" means the technical specifications provided by
Motorola for each of the Contract Products.
"SUPPLEMENT" means a written appendix to this Agreement, as amended
from time to time pursuant to Subsection 16(B) hereof, which is agreed to by
the Parties as indicated by their signatures thereon. Each Supplement shall set
forth the prices to be paid by Motorola for the Contract Products.
"TECHNICAL INFORMATION" means the information identified as technical
information in any Supplement, which is used in relation to the Contract
Products described in the same Supplement.
"WAFER" means a crystalline substrate for integrated circuit
fabrication which, when fully processed, consists of a number of finished Die.
"WORK" means specified assembly, test and associated services to be
provided by ASE on finished Die owned by Motorola for the manufacture of the
Contract Products.
Capitalized terms not defined herein shall have the meanings
attributed to them in the Asset Purchase Agreement.
3. DURATION AND TERMINATION
2
<PAGE> 3
The Agreement shall become effective on the date hereof and, subject
to earlier termination in accordance with Section 30 hereof, it shall continue
to be in full force and effect for five (5) years.
4. MANUFACTURING SITE RESTRICTION
All Work performed by ASE shall take place at the Paju Facility.
5. COORDINATION
(A) Each Party shall designate a coordinator (the "COORDINATOR")
to represent that Party in the implementation of this Agreement. Either Party
may change its Coordinator by written notice to the other Party.
(B) ASE shall identify to Motorola an account team dedicated to
the implementation of this Agreement, which team shall include, at a minimum,
an account executive, an account manager, a customer service representative and
engineering support personnel.
(C) Motorola shall have the right to assign, from time to time,
its employees (the "MOTOROLA EMPLOYEES") at the ASE Facility to perform work in
connection with this Agreement. ASE shall grant the Motorola Employees full
access to the areas of the ASE Facility where the Contract Products are
manufactured or located. ASE shall provide the Motorola Employees with
designated and secure office space and full access to conference rooms and
food, rest and parking facilities. ASE shall allow the Motorola Employees to be
active participants on problem-solving teams with respect to the manufacture of
the Contract Products. While at an ASE Facility, the Motorola Employees shall
abide by the policies and regulations of ASE, and Motorola shall, at ASE's
reasonable request, replace or reassign any such employees who fail to do so.
(D) The Parties shall plan and schedule, at a minimum,
semi-annual business reviews. The reviews shall focus on the current and
forecast business activities, feedback on performance and factory metrics, key
improvement programs and activities focused on enhancing the relationship
between the Parties, and a review of the status of open issues and action
items. These reviews are agreed to be a key activity of the Parties.
6. BAILMENT OR CONSIGNMENT OF MOTOROLA PROPERTY TO ASE
(A) As used in this Agreement, the term "BAILED PROPERTY" shall
mean and include any and all Die, material, components or equipment owned by
3
<PAGE> 4
Motorola and provided to ASE under bailment or consignment for the performance
of the Work. Title to the Bailed Property shall at all times remain vested in
Motorola, but the risk of loss and damage to any item of the Bailed Property
shall pass to ASE during such time as the item is in ASE's possession or
control.
(B) ASE agrees that it shall, at all times, keep all of the
Bailed Property within the relevant ASE Facility unless otherwise authorized in
writing in advance by Motorola. Motorola shall have the right to enter an ASE
Facility at any time during ASE's regular business hours to inspect and account
for the Bailed Property.
(C) ASE agrees to develop, implement and utilize procedures to
fully account for the Bailed Property as it is transferred between the Parties,
and to comply with Motorola's reasonable instructions regarding inventory
accounting and security procedures.
(D) If any equipment owned by Motorola is provided as Bailed
Property to ASE, during any transfer the transferor shall provide a list
identifying each item of equipment by description, serial number and the
Motorola asset number (if any) and shall obtain the signature of the transferee
to evidence the receipt of such item(s). Upon any transfer, the transferee
shall be responsible for inspecting the item(s) of equipment and notifying the
transferor in writing immediately, but in any event no later than five (5)
calendar days thereafter, of any and every item which is not in good and proper
working condition. ASE shall return all Bailed Property to Motorola FOB ASE's
dock in its original condition, less ordinary wear and tear, upon expiration or
termination of this Agreement.
(E) Unless otherwise mutually agreed, ASE shall be responsible
for any maintenance and repair of any equipment provided as Bailed Property
while it is in ASE's possession or control, but ASE shall not make any
alterations or modifications to any such equipment without prior written
consent by Motorola. Titles to all additions, parts, accessories, improvements
and attachments to any equipment which is Bailed Property, whether provided by
ASE or Motorola, shall immediately vest in Motorola and shall be deemed
thereafter to constitute a part of the Bailed Property. Notwithstanding the
foregoing, attachments provided by ASE which, in both parties' reasonable
opinion, may be readily removed without reducing the value of the Bailed
Property shall remain the property of ASE.
(F) ASE shall use all Bailed Property solely for the performance
of the Work, in a careful and proper manner and in compliance with all
applicable laws, rules and regulations relating to the possession and use of
the Bailed Property. ASE shall be liable for Motorola's damages (except
special, indirect or
4
<PAGE> 5
consequential damages) which result from ASE's violation of this Subsection
6(F).
(G) Motorola may take possession of any equipment that is Bailed
Property at any time such item(s) have not been utilized by ASE for any reason
for a period of five (5) consecutive calendar days to meet any unfilled
requirement for the Work, whether because of any events or conditions set forth
in Section 27 hereof or otherwise. If the failure of ASE to so utilize any item
of the Bailed Property is caused by a final adjudication of bankruptcy or
insolvency of ASE, Motorola shall be entitled to take possession of the Bailed
Property immediately and without notice. If any of the preceding situations
arises ASE shall, upon Motorola's instruction., properly prepare for immediate
shipment and delivery of such items of the Bailed Property to any location
designated by Motorola, F.O.B. ASE's dock.
7. SPECIFICATIONS AND REQUIREMENTS FOR THE WORK
(A) Upon the commencement of this Agreement, ASE agrees that the
Work shall conform to such product qualification, vendor qualification,
equipment qualification, processing, quality control, reliability, yield
reporting and inspection specifications and requirements as existed immediately
prior to the purchase of the Paju Facility from Motorola by ASE, and as are
incorporated in Motorola specifications 12MRB18841C, 12MWS70485A, 12MRH02030A
and 12AAQSM120.
*
.
(B) Motorola may change any specifications or requirements by
providing written notice to ASE. If any such change, in ASE's opinion, is
incompatible with ASE's existing equipment, or would adversely affect ASE's
existing productivity rates or material costs at the relevant ASE Facility,
Motorola, upon prompt notice by ASE, and ASE shall in good faith negotiate a
reasonable and mutually acceptable solution.
(C) Unless otherwise agreed, ASE shall provide a written notice
to Motorola * prior to making
any changes that may affect any of the Contract Products. In addition, ASE
shall, upon request, provide reliability and other data concerning such changes
in sufficient detail to allow determination by Motorola as to (i) the effect of
such changes on the Contract Products and (ii) whether requalification of the
Contract Products by or for customers requiring process control is required.
Motorola shall have the right to approve such changes if customer approval is
required.
----------
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
5
<PAGE> 6
(D) If ASE is required to apply Motorola's name, trademark, logo
or similar information (collectively, the "MARKS") on any Contract Products,
ASE agrees that it shall not acquire or claim any right, title or interest
thereto, nor shall it use any of the Marks in any other manner except as has
been specifically authorized in writing by Motorola. All Marks shall remain the
property of Motorola.
8. CAPACITY PLANNING AND FORECASTING
(A) As a condition to the execution of this Agreement, Motorola
shall provide ASE with a written forecast for the total monthly volume of the
Contract Products, itemized by package type and pin count, that Motorola plans
to order from ASE during *
. After the end of each subsequent month, Motorola shall provide ASE with
an update to the forecast (a " * Forecast"), which is to be
used by ASE to allocate capacity for the Work. The Twelve Month Rolling
Forecast shall establish the minimum capacity of ASE to be available to
Motorola during each month of the immediately following *
period, upon the acceptance thereof by ASE. The absence of any notice of
objection to a Twelve Month Rolling Forecast given by ASE within *
of the date of receipt shall be deemed as acceptance by ASE.
Motorola makes no representation or warranty with respect to the accuracy of
any * Forecast.
(B) Using the * Forecasts, ASE will provide sufficient
capacity for * of the Work specified
for each month. ASE will place orders for materials using such suppliers and
upon such lead times as Motorola and ASE shall mutually agree. If Motorola's
forecasts for any Contract Products significantly decrease, and such decrease
results, after * , in more than * of inventory of
unique materials purchased by ASE to support Motorola's requirements, and which
inventory cannot be used for any other ASE customer, then Motorola will
purchase the inventory above * from ASE * ,
provided that ASE had purchased reasonable quantities of such materials based
on Motorola's forecasts. It is ASE's intention to work with its suppliers and
with Motorola to allocate certain of such risks among all parties to the extent
practicable, and it is understood by the parties that the provisions of this
Section 8(B) are subject to review by the parties concurrently with the
issuance of any new pricing Supplement pursuant to Section 16 of this
Agreement.
(C) ASE and Motorola shall negotiate in good faith on the
financial obligation of each Party with respect to, and delivery times for, any
capital equipment required by ASE to support Motorola's requirements if such
equipment
----------
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
6
<PAGE> 7
is unique to Motorola's specifications and cannot be used without material
modification or expenditure by ASE to support other customers. Such negotiation
shall include good faith attempts of the Parties to find alternative uses for
such equipment. This Subsection shall not apply to capital equipment additions
within the contemplation of the Parties prior to the effective date of this
Agreement, which includes ASE's commitment to expend a minimum of * for
the Paju Facility.
(D) ASE agrees to use commercially reasonable efforts to
accommodate mix and option changes required by Motorola's business needs.
(E) If the Work required is either significantly more or
significantly less than that specified by the * month forecast,
Motorola shall communicate such information to ASE as soon as such information
is available.
9. ORDER PLACEMENT AND DELIVERY
(A) Blanket purchase orders for Contract Products shall
periodically be placed by Motorola with ASE. The sole purpose of the blanket
purchase order is to establish the price for each Contract Product, as set
forth in the Supplements to this Agreement and any new Contract Products added
to this Agreement, and to provide a purchase order number which ASE's invoices
shall reference. All preprinted terms and conditions contained in the blanket
purchase orders, including the aggregate purchase prices, are superceded by the
terms and conditions of this Agreement and the Supplements hereto. Motorola's
actual orders for the Contract Products shall also be placed with ASE
periodically. The actual orders shall provide details regarding specific
Contract Products, mix, quantities, shipping instructions and requested
shipment dates. ASE agrees to comply with the requested shipment dates unless
it advises Motorola otherwise within seven (7) calendar days following its
receipt of the actual orders. ASE shall use its commercially reasonable efforts
to deliver the exact quantity of the Contract Products ordered. ASE shall adopt
Motorola's Demand Driven Production Requirements (DDPR) system for piece part
forecasting and, unless otherwise mutually agreed, ASE shall adopt Motorola
Contract House Accounts Payable System (CHAPS) for inventory accounting and
payment.
(B) "ON-TIME DELIVERIES" means deliveries made no more than
* days before or on ASE's scheduled delivery dates. Time is of the
essence in delivery. ASE shall establish a system to ensure all deliveries to
be made on time.
(C) If * per cent * on-time deliveries are not
achieved, ASE agrees to take appropriate corrective actions, including
----------------
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
7
<PAGE> 8
communication of the delivery problems to Motorola. ASE shall also take a
systematic approach to develop, evaluate and monitor adherence to established
on-time delivery requirements. ASE will notify Motorola when the on-time
delivery requirement will not be met. ASE and Motorola will in good faith
negotiate the compensation to be paid by ASE to Motorola, if any, for actual,
direct damages incurred by Motorola as a result of such late delivery. ASE
agrees to implement Supplier Managed Inventory with Motorola so that Contract
Products will be provided on a demand-pull basis.
10. CANCELLATIONS AND SCHEDULE CHANGES
(A) ASE may cancel a firm order * if it terminates this
Agreement on the basis of an uncured payment default by Motorola as provided in
Subsection 30(A) hereof.
(B) Delivery schedule changes may be made by mutual agreement.
Motorola is not obligated to accept any unscheduled deliveries of Contract
Products; however, ASE may ship ahead of Motorola's requested schedule up to a
maximum of * calendar days early.
11. SHIPMENT AND ACCEPTANCE
(A) ASE shall ship the Contract Products to the destinations
identified by Motorola. Motorola shall acknowledge to ASE the receipt of each
shipment of Contract Products, stating the quantity and type of, and any
damages existing at delivery to, such Contract Products within *
* of receipt at Motorola's ultimate destination. At Motorola's
request, ASE shall hold the Contract Products and delay shipment for up to
* . ASE shall certify to Motorola with each shipment
that the Contract Products contained therein have successfully passed
applicable testing and meet all specifications. Acceptance testing of the
Contract Products delivered to Motorola shall be performed by Motorola within
* of receipt.
(B) If Motorola rejects any Contract Products, Motorola and ASE
shall confer to determine the reason for the rejection. ASE shall immediately
exercise commercially reasonable efforts to develop and implement a corrective
action plan for any errors, including manufacturing errors or defects,
identified in its systems. All properly rejected Contract Products that are
confirmed by ASE to be nonconforming may be returned to ASE for a refund at the
purchase price stated in the applicable Supplement, plus Motorola's shipping
cost, or may be retained by Motorola subject to a mutually agreed credit issued
by ASE to be applied to future orders by Motorola. Title and risk of loss or
damage to return merchandise
-------------------
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
8
<PAGE> 9
authorization (RMA) material shall pass to ASE ExWorks (EXW) (Incoterms 1990)
Motorola's dock.
12. SCRAP
(A) The scrap rates for the Scrap of each type of the Contract
Products shall not exceed the corresponding average rates experienced by
Motorola at the Paju Facility during 1999 while Motorola owned the Facility.
Motorola represents that such average scrap rates are true and correct and have
resulted from its normal course of business. ASE shall credit Motorola, at
Motorola's selling price for the relevant Contract Product, for Scrap in excess
of the applicable average rate. ASE shall use commercially reasonable efforts
to continually reduce Scrap rates for Contract Products.
(B) ASE shall dispose of any Scrap in accordance with applicable
laws and Motorola's written instructions. Upon request, ASE shall ship all
Scrap to Motorola separately from any of the Contract Products or Bailed
Property in clearly-marked boxes so as to identify the items contained therein.
Motorola shall pay for all reasonable shipping costs with respect to such
scrap.
13. PACKAGING
(A) All packaging of the Contract Products shall consist of
anti-static materials and shall be resistant to any damage which may result in
failure to meet specifications. ASE shall notify Motorola in writing and in
advance of changes in existing packaging, even it such changes are within
Motorola's specifications.
(B) Unless otherwise directed in writing by Motorola, ASE shall
make no reference and place no identification in its packaging of any goods,
boxes or containers which would indicate that ASE is the manufacturer of the
goods contained therein.
14. RELIABILITY DATA
(A) ASE agrees to provide reliability data which demonstrates the
ability of the manufacturing processes used for assembling and testing the
Contract Products to meet Motorola's reliability criteria. Any exceptions to
these criteria shall be reviewed on a product-by-product basis. Motorola shall
have the right to use the reliability data concerning the Contract Products for
the sole purposes of preparing sales and promotional information concerning the
Contract Products for Motorola's actual or potential customers. ASE's
reliability testing methods and conditions shall be subject to review by
Motorola from time to time,
9
<PAGE> 10
and any changes thereto requested by Motorola shalt be mutually agreed before
implementation.
(B) ASE agrees to maintain records regarding all Contract
Products provided to Motorola for three (3) years after shipment. Such records
shall be in a hard copy format, unless and except to the extent Motorola
consents to another form of storage, which consent shall not be unreasonably
withheld. All Contract Products shall be traceable throughout the entire
process of the Work. The records shall include quality control data, process
deviation notes, assembly records, deviations, burn-in conditions, final test
data and finished goods top side date codes. ASE shall maintain lot history
records for a period of three (3) years. All lot history records are the
property of ASE but shall also be considered confidential information of
Motorola. Motorola shall have access to the lot history records concerning all
Motorola Contract Products at any time during ordinary business hours.
(C) ASE agrees to provide, upon request, timely failure analyses
on the Contract Products that are beyond either Motorola's analysis capability
or which are returned for the purposes of feedback and correlation. Motorola
agrees to provide timely failure analysis data to ASE for the sole purposes of
feedback and correlation.
(D) To avoid delays in the processing of the Contract Products,
ASE shall notify Motorola of any known failure mechanisms and defects which
are, or are suspected to be, present in any completed Contract Product.
Motorola shall make reasonable efforts to assist ASE in its efforts to correct
such failure mechanisms and/or defects.
15. QUALITY
(A) ASE shall take all actions required to obtain and maintain
QS9000 certification or recertification for the Facility as soon as
practicable, but in any event no later than December 31, 1999, and Motorola
shall assist ASE in this effort.
(B) ASE agrees to implement regular quality system reviews for
all Contract Products with Motorola. Motorola shall provide the details of such
reviews to ASE in writing at least one month in advance.
(C) ASE agrees to nurture a quality culture within each ASE
Facility. Quality systems shall include online Statistical Process Control
(SPC) with statistically valid limits. ASE shall nurture a culture which
responds to established
10
<PAGE> 11
limits and shall cease production if these limits are exceeded. ASE shall
strive for excellence in quality with continuous improvement methods.
16. PRICES
(A) Subject to Section 18, pricing for the Contract Products
under this Agreement shall be specified in the Supplements to this Agreement.
Prices shall be in U.S. dollars and shall be EXW, (Incoterms 1990) ASE's dock.
The Supplement covering the * period is attached hereto as Annex
A.
(B) *
If either Party desires to renegotiate the prices on an
anniversary date of the date hereof, it shall notify the other Party at least
sixty (60) calendar days prior to such date. The relevant factors in
renegotiating the prices shall include market prices for the services provided
by ASE, the *
and the benefit to ASE of Motorola's efforts to improve ASE's
manufacturing process to meet Motorola stringent quality standards.
*
(C)
*
ASE shall establish an internal review process to assure
compliance with this Subsection 16(C), and shall certify its compliance to
Motorola at least quarterly, both verbally, with an opportunity for Motorola to
ask questions, and, if requested, in the form of a written letter to Motorola.
(D) Motorola shall have the right to cause ASE to appoint an
independent certified public accounting firm (the "AUDITOR") selected by ASE
and approved by Motorola, which approval shall not be unreasonably withheld, to
audit ASE's compliance with Subsection 16(C) hereof. The Auditor shall only
have access to information that is reasonably necessary to verity ASE's
compliance with Subsection 16(C) hereof, and must maintain the confidentiality
of such information.
*
----------------
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
11
<PAGE> 12
*
17. PAYMENT TERMS
Unless otherwise mutually agreed, ASE shall invoice Motorola on or
after delivery of any Contract Products, and shall submit all invoices to
Motorola's Accounts Payable department at Motorola, Inc., Procurement Financial
Services, P.O. Box 20922, Phoenix, Arizona 85036 (telephone (602) 952-3828), or
such other address as Motorola may provide. Motorola shall make payments to ASE
no later than * after receipt of invoice.
18. COST REDUCTION EFFORTS
(A) Motorola and ASE agree to form a joint cost reduction task
force focused on continuous cost improvements for Work on Contract Products,
materials, and equipment. Demonstrated cost reductions resulting from joint
efforts shall result in immediate price decreases to Motorola of *
of the cost savings if such cost reductions are implemented by
ASE for other customers, or * of the cost savings if
limited to Work on Contract Products.
(B) If, in the reasonable opinion of both parties, Motorola is
solely responsible for cost reductions associated with the performance of the
Work, ASE shall immediately reduce the prices of the affected Contract Products
by * of the per unit cost savings derived from such
reduction. If such cost reduction results from the use of Motorola's
Confidential Information (as defined in Section 23 hereof), ASE shall use such
Confidential Information only with respect to the Work, and not any other work
or services for other customers or suppliers unless, and only to the extent,
Motorola licenses such use.
(C) Motorola agrees in good faith to work with its suppliers who
have Supplier Managed Inventory Agreements with Motorola to obtain the benefits
of such agreements for ASE.
19. WARRANTIES
(A) ASE warrants that, at the time of delivery of Contract
Products to Motorola and for a period * following the date
thereof, all such Contract Products shall: (i) be clear of any liens and
encumbrances, (ii) be free from any defects in material and workmanship
attributed to the Work and (iii) conform to all written specifications relating
thereto.
----------
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
12
<PAGE> 13
(B) With respect to defective units, ASE shall either rework the
units if returned, replace the units, *
All
costs associated with such returns, replacements, rework and corrections shall
be borne by ASE, including all labor, materials, installation, repair, service,
transportation and other charges. ASE expressly assumes all risks of loss or
damage to the units returned by Motorola while such units are in transit.
(C) In the event that repeated field failures occur with respect
to a Contract Product, or a significant field failure occurs which requires
immediate attention, ASE and Motorola shall discuss a solution in good faith.
(D) ASE hereby represents and warrants that none of the Contract
Products shall be manufactured with, or contain, Class 1 ozone depleting
substances.
(E) To the extent that the performance of the Work depends on
certain information technology that processes, provides and/or receives date
data, ASE represents and warrants that it will use commercially reasonable
efforts to ensure that the Work shall not be materially interrupted or
adversely impacted by "year 2000 problems" associated with ASE's operations.
(F) All warranties shall survive the acceptance and payment by
Motorola.
20. INDEMNITY
(A) ASE agrees to indemnify, defend and hold harmless Motorola,
its officers, agents and employees from any and all claims, costs, attorney
fees, fines, and similar expenses of whatsoever kind or character, including,
but not limited to, those resulting from injury or death to persons or damage
to property to the extent due to any negligence or willful misconduct of ASE,
its officers, employees, subcontractors, or agents acting on ASE's behalf in
connection with ASE's obligations under this Agreement.
(B) Motorola agrees to indemnify, defend and hold harmless ASE,
its officers, agents and employees from any and all claims, costs, attorney
fees, fines, and similar expenses of whatsoever kind or character, including,
but not limited to, those resulting from injury or death to persons or damage
to property to the extent due to any negligence or willful misconduct of
Motorola, its officers, employees, subcontractors, or agents acting on
Motorola's behalf in connection with Motorola's obligations under this
Agreement.
----------
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
13
<PAGE> 14
(C) ASE agrees to defend, at its expense and with counsel chosen
by it, any suits brought against Motorola based upon the claim that any of the
Work infringes or violates any patent, mask work, copyright, trade secret, or
other intellectual property right other than those alleged infringements or
violations instructed or requested by Motorola, and to pay all liabilities,
costs, and damages finally determined in any such suit against Motorola.
Motorola shall promptly notify ASE in writing of any such suit and shall
provide reasonable assistance to ASE in connection with defending such suit. If
the use and sale of any of the Contract Products is enjoined as a result of
such suit, ASE, at its option and at no expense to Motorola, shall either
obtain for Motorola the right to use and sell the Contract Products or shall
substitute an equivalent method for performing the Work which is acceptable to
and qualified by Motorola. This Subsection (C) does not extend to any suit
based upon any infringement or alleged infringement of any patent, copyright,
mask work, trade secret or any other intellectual property right (i) caused by
any article of Motorola's design or formula, or (ii) the use of any
manufacturing process licensed to ASE by Motorola.
(D) Motorola agrees to defend, at its expense and with counsel
chosen by it, any suits brought against ASE based upon the claim that any of
the Contract Products produced by ASE for Motorola infringes any patent, mask
work, copyright, trade secret or other intellectual property right, if such
infringement arises from compliance by ASE with Motorola's specifications or
formula, and to pay all liabilities, costs, and damages finally determined in
any such suit against ASE. ASE shall promptly notify Motorola in writing of any
such suit and shall provide reasonable assistance to Motorola in connection
with defending such suit.
(E) THE FOREGOING PROVISIONS STATE THE ENTIRE LIABILITY OF EITHER
PARTY WITH RESPECT TO INFRINGEMENT OF PATENT, COPYRIGHTS, MASK WORKS, TRADE
SECRETS, OR ANY OTHER INTELLECTUAL PROPERTY RIGHT CLAIMS OF ANY TYPE. WITHOUT
LIMITING THE OBLIGATIONS OF EITHER PARTY UNDER SUCH FOREGOING PROVISIONS, IN NO
EVENT SHALL EITHER PARTY BE LIABLE FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL
DAMAGES OF ANY NATURE WHATSOEVER AGAINST THE COUNTERPARTY (INCLUDING, WITHOUT
LIMITATION, LOST PROFITS) ARISING FROM INFRINGEMENT OR ALLEGED INFRINGEMENT OF
PATENT, COPYRIGHTS, MASK WORKS, TRADE SECRETS, OR ANY OTHER INTELLECTUAL
PROPERTY RIGHT.
14
<PAGE> 15
21. INSURANCE
(A) At all times during the term of this Agreement, ASE shall
maintain, in full force and effect and at its sole expense, the following forms
of insurance:
(1) at least * of insurance to
cover any loss, theft or damage to the Contract Products or
the Bailed Property in the amount of the full replacement
cost thereof, and shall name Motorola as the loss payee;
(2) public liability and property damage
liability insurance, under the comprehensive general liability
form, with limits of liability of no less than *, including
contractual liability coverage for the indemnity obligations
specified in Section 20 hereof and a products/completed
operations endorsement; and
(3) excess liability insurance, under the
umbrella form, with a limit of liability of not less than
* per occurrence.
(B) ASE shall name Motorola as an additional insured under the
liability insurance policies specified in Subsections 21(A)(2) and 21(A)(3) and
Motorola will bear the cost of naming Motorola as an additional insured to the
extent such cost exceeds * . In addition, ASE's insurance must be
designated as primary. A certificate of insurance evidencing the required
coverages and confirming that Motorola is identified as a loss payee or
additional insured as specified herein shall, upon request, be provided to
Motorola prior to the commencement of any Work. ASE shall provide Motorola with
written notice no later than thirty (30) calendar days prior to any expiration,
termination or cancellation of any policy.
(C) * giving ASE written notice of said
additional requirements subject to the prior written consent of ASE, which will
not be unreasonably withheld. *
(D) The procurement and maintenance of insurance specified in
this Section 21 shall not limit or affect liability of ASE under this
Agreement.
----------
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
15
<PAGE> 16
22. RECORDS AND AUDITS
ASE shall implement and utilize such records, procedures and systems
as may be specified by Motorola in writing from time to time to document,
record and account for (i) the performance of the Work, (ii) the location and
use of and adequate security for the Bailed Property, (iii) compliance with
Motorola's quality control and reliability processes and specifications, (iv)
proper documentation of shipment, delivery, invoicing and payment history and
(v) other similar matters. ASE agrees to permit representatives of Motorola at
reasonable times to inspect, audit and copy such books, records and
documentation.
23. CONFIDENTIALITY/NON-DISCLOSURE AGREEMENT
(A) Pursuant to this Agreement, one Party may furnish to the
other Party software, data, designs, drawings, tracings, plans, layouts,
specifications, samples, equipment and other written information which is
confidential and proprietary to the disclosing Party (collectively, the
"Confidential Information"). All Confidential Information, as delivered in
written form, shall be marked "CONFIDENTIAL" or an equivalent thereof by the
disclosing Party. Any Confidential Information which is furnished orally shall
be confirmed in writing as being Confidential Information within thirty (30)
calendar days of being so furnished.
(B) It is agreed that for a period of five (5) years after
receipt of Confidential Information, the receiving Party shall: (i) restrict
the dissemination of such Confidential Information to (a) those employees who
need to use the Confidential Information in the performance of the Work and (b)
those to whom the receiving Party is legally compelled to disclose; and (ii)
use the same degree of care as for its own information of like importance, but
at least use reasonable care, in safeguarding against unauthorized disclosure
of such Confidential Information. ASE agrees to have an appropriate
nondisclosure agreement signed by each of its employees who may be exposed to
Motorola's Confidential Information.
(C) Notwithstanding any other provisions of this Agreement,
Confidential Information shall not include any information which: (i) is now
available or becomes available to the public otherwise than as a result of a
breach of this Agreement by the receiving Party, (ii) is released in writing by
the disclosing Party, (iii) is lawfully obtained from a third party or parties,
(iv) is known to the receiving Party prior to such disclosure by the disclosing
Party, (v) is at any time developed by the receiving Party prior to such
disclosure or (vi) is at any time developed by the receiving Party
independently of such disclosure or disclosures by the disclosing Party.
16
<PAGE> 17
(D) The Parties shall not disclose the existence of this
Agreement or any of the terms hereof to third parties, except (i) when
requested or required by any legal or other regulatory authority to disclose
such information and (ii) as may be necessary to enforce the terms hereof.
(E) Each Party agrees not to disclose to the other Party any
confidential or proprietary information of third parties unless authorized to
do so.
(F) For the purposes of Section 30 hereof, any breach of the
provisions in this Section 23 shall be a material breach under this Agreement.
(G) It is expressly understood that any drawings, blueprints,
descriptions, resumes, documents, tapes or any other media transferred by the
disclosing Party hereunder, and all copies, modifications and derivatives
thereof, shall remain the property of the disclosing Party, and the receiving
Party is authorized to use those materials only in accordance with the terms
and conditions of this Agreement.
(H) ASE agrees that Motorola's past, present and future costs of
material and equipment shall be considered Confidential Information of
Motorola, whether or not so marked and provided in writing in connection with
Subsection 23(A) hereof.
24. INVENTIONS
(A) All discoveries, improvements, inventions and trade secrets
created or conceived during the performance of this Agreement *
(B) All discoveries, improvements, inventions and trade secrets
created or conceived during the performance of this Agreement *
(C) All discoveries, improvements, inventions and trade secrets
created or conceived during the performance of this Agreement jointly by
Motorola and ASE personnel shall be the joint property of Motorola and ASE,
each Party having an equal and undivided one-half (1/2) joint interest therein
(the "JOINTLY-OWNED IP"). Each Party may assign, license or otherwise transfer
a portion or all of its rights under any such Jointly-owned IP without the
consent of the other Party and
----------
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
17
<PAGE> 18
without accounting to the other Party, and the Parties shall cooperate with
each other in executing all necessary documents to give effect to the
foregoing.
(D)
*
. Motorola shall notify ASE in writing whether or not,
and in which jurisdictions, Motorola elects to file such patent applications;
ASE shall have the right to file patent applications in all other
jurisdictions. Each Party, at its own expense, shall cooperate fully with the
filing Party as may be necessary for the proper preparation, filing and
prosecution of each such patent application and the maintenance, renewal and
defense of each patent covering such discovery, improvement or invention.
(E) The IP Expenses for preparing each joint patent application
shall be borne by the Party that prepares and files the application. Before
filing, the filing Party shall request the other Party to indicate whether it
will agree to pay * of all IP Fees and Translating Expenses, if
any, in a particular jurisdiction or group of jurisdictions. In the event that
the non-filing Party does not notify the requesting Party within *
in writing that it will pay * of all IP Fees and
Translating Expenses or if one Party desires to obtain intellectual property
protection for specific Joint-owned IP (such as filing for patent protection in
a certain country) and the other Party does not wish to obtain such protection,
(i) the filing Party shall control and pay the cost of such prosecution, (ii)
but both Parties will remain joint owners and (iii) the filing shall reflect
the Parties as joint owners. For the purposes of this Subsection 24(E): (i) "IP
Fees" shall mean fees or other charges required to be paid to a governmental
agency, office or entity to secure and maintain intellectual property rights
and include filing fees, registration fees, issue fees, maintenance fees,
annual taxes and annuities; (ii) "IP Expenses" shall mean fees, costs or other
charges related to securing and maintaining intellectual property rights other
than IP Fees and Translating Expenses; and (iii) "Translating Expenses" shall
mean fees, costs or other charges related to translating patent applications.
25. DATA RIGHTS
ASE hereby assigns to Motorola all rights in software, reports,
drawings, sketches, formulas, notes, notebooks and designs prepared for the
performance of the Work. All rights, title and interest shall vest immediately
in Motorola upon preparation, shall be the sole property of Motorola and shall
not be disclosed by ASE to any third party.
----------
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
18
<PAGE> 19
26. SECURITY
ASE agrees to take all necessary precautions to secure the areas of
the Facility associated with the performance of the Work and the storage of the
Bailed Property. Motorola shall have the right to audit ASE's security
practices, policies, procedures and measures as they relate to the performance
of the Work, and to specify such changes as may be reasonably required to
protect the Work or the Bailed Property. ASE shall immediately report to
Motorola any breaches or suspected breaches of its security, but such reporting
shall not relieve ASE of its responsibilities hereunder.
27. FORCE MAJEURE
Neither Party shall be liable for failures or delays in fulfilling its
obligations hereunder owing to any cause beyond its reasonable control,
including, but not limited to, acts of God, governmental orders or restriction,
war, threat of war, warlike conditions, fire, hostilities, sanctions,
revolution, riot, looting, strike, lockout, interruption of transportation or
inability to obtain necessary labor, materials or equipment. ASE shall notify
Motorola promptly of any interruptions in the Work or difficulties relating to
the Facility that may affect the availability of the Contract Products.
28. ASSIGNMENT
(A) ASE shall not assign, sublicense, delegate, subcontract or
otherwise transfer this Agreement or any rights or obligations arising under
this Agreement without the prior written approval of Motorola, which shall not
be unreasonably withheld.
*
(B) Should any business unit of Motorola's Semiconductor Products
Sector as it existed on March 11, 1999 subsequently be separated from Motorola,
whether due to a sale, a spin-off or other arrangements (a "Business Unit"),
ASE agrees to extend the same terms and conditions of this Agreement (including
all Supplements hereto) to such Business Unit if it so requests. ASE further
agrees to extend the same terms and conditions of this Agreement and all
Supplements hereto to Affiliates where "Affiliates" means any other person or
entity controlling, controlled by or under common Control with Motorola where
"Control" means direct or indirect, legal or beneficial ownership of 50% or
more of the voting control of such person or entity if they so request.
----------
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
19
<PAGE> 20
(C) Other than as provided in Subsection 28(B), Motorola shall
not assign, sublicense, delegate, subcontract or otherwise transfer this
Agreement or any rights or obligations arising under this Agreement without the
prior written approval of ASE, which shall not be unreasonably withheld.
29. NOTICES
(A) In any case where a notice or another form of communication
is to be given or made pursuant to any provision of this Agreement, such notice
or communication shall be deemed to be received when given or made as follows:
(i) if by hand delivery, on the day delivered; or (ii) if by telex, cable, fax
or telegraph, on the next business day following the date sent.
(B) All notices specifically required to be given under the terms
of this Agreement shall be delivered to the following addresses, as applicable:
To ASE:
Advanced Semiconductor Engineering, Inc.
Room 1901
Taiwan World Trade Center International Trade Bldg.
19th Floor
No. 333 Keelung Road
Section 1
Taipei, Taiwan
Republic of China
To Motorola:
Jim Duckworth
Director of Supply Management
Semiconductor Products Sector
Motorola, Inc.
7700 West Parmer Lane
Maildrop PL03
Austin, TX 78729
20
<PAGE> 21
With a copy to:
Cindi Moreland
Director, Motorola SPS Corporate Law Department
Motorola, Inc.
6501 William Cannon Drive
West Austin, TX 78735
30. TERMINATION
(A) If either Party defaults on any of the material obligations
or conditions of this Agreement and such default remains uncured for
* after written notice to the defaulting Party specifying the
nature of the default the non-defaulting Party shall have the right to
terminate this Agreement by giving written notice of termination to the
defaulting Party; in such case, this Agreement shall terminate on the
* after provision of such termination notice. The defaulting
Party shall have the right to cure any such default through but not after the
date of termination. In the event of a cure of default, the cure shall be
retroactive to the date of the notice of default. In order to cure any default
of a payment obligation of this Agreement, the defaulting party shall pay
* annual interest on the amount of the obligation, appropriately
prorated for the time between when the obligation was due and when it is paid.
(B) Either Party shall have the right to terminate this Agreement
by giving written notice of termination to the other Party at any time upon or
after: (i) the filing by the other Party of a petition in bankruptcy or
insolvency; (ii) any adjudication that the other Party is bankrupt or
insolvent; (iii) the filing by the other Party under any law relating to
bankruptcy or insolvency; (iv) the appointment of a receiver for all or
substantially all of the property of the other Party; (v) an assignment or
attempted assignment for the benefit of creditors by the other Party; or (vi)
the institution of any proceedings for the liquidation or winding up of the
other Party's business or for the termination of its corporate charter. In any
such case this Agreement shall terminate on the tenth (10th) calendar day after
provision of the termination notice.
(C) In the event of a direct or indirect taking over, or an
assumption of control, of Motorola or ASE, Inc. by a third party, the
non-acquired Party shall have the right to terminate this Agreement immediately
at any time thereafter upon giving written notice.
(D) Either Party shall have the right to terminate this Agreement
if, in its sole judgment, official United States or Korean government policy,
directives
------------------
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
21
<PAGE> 22
or rulings have been put into effect that substantially affect or change the
economic viability of this Agreement and the Parties have not been able to
renegotiate this Agreement in a mutually satisfactory manner within a
reasonable period of time following such event. No Party shall make any claims
or demands against any other Party for any damages, losses, expenses or costs,
if any, incurred as a result of termination of this Agreement pursuant to this
Subsection 30(D).
(E) If any of the events and conditions set forth in Section 27
has continued for more than * , the
non-affected Party may terminate this Agreement immediately upon written
notice.
(F) If Motorola terminates this Agreement on the ground of a
default by ASE, Motorola may, at its sole discretion, cancel the delivery of
all unshipped, and shipped but unaccepted, Contract Products.
(G) Within one (1) month following the termination of this
Agreement, ASE shall return or destroy to Motorola each item of Technical
Information and Confidential Information delivered or disclosed to ASE
hereunder, and provide a certification that, through its best efforts, and to
the best of its knowledge, the original and all copies, in whole or in part, in
any form, of the Technical Information and Confidential Information, have been
destroyed or returned to Motorola.
(H) The provisions of this Section and Sections 6, 19, 20, 23,
24, 32, 34, 35, 38, and 39 shall survive the expiration or termination of this
Agreement.
31. TRANSLATION
Notwithstanding any translation of this Agreement, the English
language version shall be determinative.
32. ENVIRONMENTAL MATTERS
ASE shall indemnify and hold Motorola harmless from and against any
liability, claim, damage, injury, expense, suit or cause of action, including
but not limited to reasonable attorneys fees, arising from or caused by any
toxic or hazardous substances or chemicals, as those terms are defined by the
environmental health or safety laws or regulations of Taiwan, Republic of
China, the country in which each ASE facility is located which are (i) used in
the performance of the Work, (ii) present in the Scrap disposed of or destroyed
by ASE (other than in accordance with Motorola's instructions) or (iii) present
at such ASE Facility during the term of this Agreement. ASE shall comply with
all applicable laws and have all necessary permits, operating licenses or
----------
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
22
<PAGE> 23
authorizations necessary to operate such ASE Facility under applicable
environmental safety or health laws or regulations in the country in which such
ASE Facility is located.
33. OTHER OBLIGATIONS
(A) In connection with this Agreement, ASE agrees to comply with
all applicable laws, rules, regulations and orders of any duly constituted
authority, including, but not limited to, those relating to taxes, insurance,
environmental regulation, transportation, country of origin and other customs
requirements and occupational safety and health.
(B) Each of Motorola and ASE covenants that:
(1) it shall not request, induce, solicit or
accept any bribe, kickback or illegal payment from any
employee of the other Party;
(2) it shall not offer or provide any gift or
gratuity to any employee of the other Party (including, but
not limited to, Christmas presents, money, property,
services, free trips, commissions, kickbacks, paid vacation,
special discounts on a product or service, or entertainment)
which could be viewed as an attempt to influence the business
relationship between the Parties;
(3) it shall not solicit, encourage or
participate in any activity in which the funds and assets of
the other Party would not be properly and accurately recorded
on the books and records of the other Party in accordance
with generally accepted accounting principles and practices
(such as creation of false or artificial entries), or in any
payment made on behalf of Motorola which would be approved or
made with the intention or understanding that any part of
such payment is to be used for any purpose other than that
described by the documents supporting the payment (such as
issuance of an invoice or other document which inaccurately
reflects a transaction);
(4) it does not presently and shall not employ
any employee of the other party in any way, directly or
indirectly, which could compromise such employee's loyalty to
the other Party; and
23
<PAGE> 24
(5) it does not presently have any employee of
the other Party, or person who has a close personal
relationship with an employee of the other Party, who has a
financial interest in its business (including employment) to
the extent that a conflict of interest may exist or be
created, and it shall not allow such a situation to arise
while the Agreement is in effect.
(C) ASE * and * the due and
punctual payment or performance, as applicable, by *
of the obligations, covenants, and agreements of ASE under this
Agreement, and hereby waives any defense, including any suretyship defenses or
offset, which it otherwise might have or assert in the event of enforcement of
such *
(D) Motorola shall have the right to deduct or offset any money
due under this Agreement against any money then due and payable to Motorola by
ASE under any other agreement between the parties, including, without
limitation, the Asset Purchase Agreement and the agreement under which ASE
purchased Motorola's final manufacturing and test operations in Korea.
34. EXPORT CONTROL AND GOVERNMENT APPROVAL
The Parties acknowledge that they must comply with all applicable
rules and laws in connection with this Agreement including, but not limited to,
those relating to restrictions on export and to approval of agreements. Each
Party shall be responsible for obtaining and maintaining all approvals and
licenses, including export licenses, permits and governmental authorizations
from the appropriate governmental authorities as may be required to enable such
Party to fulfill its obligations under this Agreement. Each Party agrees to
give reasonable assistance to the other in obtaining any such approvals, export
licenses, permits or governmental authorizations. Each Party agrees that,
unless prior written authorization is obtained from the United States Bureau of
Export Administration, it shall not export, re-export, or transship, directly
or indirectly, any products or technical information that would be in
contravention of the Export Administration Regulations then in effect as
published by the United States Department of Commerce.
35. NON-SOLICITATION OF EMPLOYEES
(A) During the term of this Agreement neither Motorola nor ASE
shall solicit any employee of the other for employment, either directly through
any of its employees, *
----------
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
24
<PAGE> 25
(B) Before making an offer of employment to any individual who is
employed by Motorola during the term of this Agreement, ASE shall provide
notice of its intent to make such an offer to Motorola's designated manager,
and ASE and Motorola shall then discuss the circumstances which led to ASE's
potential employment offer and the impact on their business relationship should
any offer be made by ASE and accepted by such individual.
(C) ASE agrees that if it hires any Motorola employee without
Motorola's consent, ASE will *
that such individual was in most recently when
employed at Motorola. The parties agree that such amount *
to hire a qualified
* individual.
36. SECTION TITLES
Section titles as to the subject matter of particular sections herein
are for convenience only and are in no way to be construed as part of this
Agreement or as a limitation of the scope of the particular sections to which
they refer.
37. COUNTERPARTS
This Agreement may be executed in several counterparts, each of which
shall be deemed to be an original, but all of which shall constitute one and
the same instrument.
38. APPLICABLE LAW
The laws of the United States and, where applicable, the state of New
York, shall govern this Agreement, except for that body of law known as
conflicts of laws. The Parties expressly agree that the UN Convention for the
International Sale of Goods shall not apply.
39. DISPUTE RESOLUTION
(A) The Parties shall attempt to settle any claim or controversy
arising out of this Agreement through consultation and negotiation in good
faith and a spirit of mutual cooperation. If those attempts fail, the dispute
shall be mediated by a mutually acceptable mediator to be chosen by the Parties
within * after written notice by one of the Parties
demanding mediation. Neither Party may unreasonably withhold its consent to the
selection of a mediator, and the Parties shall share the costs of the mediation
equally. By mutual agreement, however, the Parties may postpone mediation until
each has completed
----------
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
25
<PAGE> 26
some specified but limited discovery about the dispute. The Parties may also
agree to replace mediation with non-binding alternative dispute resolution,
such as neutral fact-finding or a minitrial. Disputes relating to the
intellectual property of either Party shall not be subject to mediation or
alternative dispute resolution.
(B) Any dispute which cannot be resolved through negotiation or
mediation within * of the initial demand by either
Party shall then be finally resolved by a court within the state of New York.
The use of alternative dispute resolution shall not be construed under the
doctrines of laches, waiver or estoppel to affect adversely the rights of
either Party. Nothing in this Subsection 39(B) shall prevent either Party from
resorting to judicial proceedings if: (i) good faith efforts to resolve the
dispute under these procedures have been unsuccessful, or (ii) interim relief
from a court is necessary to prevent serious and irreparable injury to one
Party or to others.
(C) EXCEPT AS MAY BE OTHERWISE SPECIFICALLY PROVIDED IN THIS
AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY SPECIAL, INCIDENTAL
OR CONSEQUENTIAL DAMAGES OF ANY NATURE WHATSOEVER (INCLUDING, WITHOUT
LIMITATION, LOST PROFITS) REGARDLESS OF THE LEGAL THEORY ON WHICH ANY SUCH
CLAIM MAY BE MADE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
40. EXCLUSIVE AGREEMENT
This Agreement contains the complete and exclusive statement of the
agreement and understanding of Motorola and ASE relating to the subject matter
of this Agreement, and it supersedes all other agreements, understandings,
communications, and proposals, oral or written, between the parties. Any
amendment of this Agreement must be in writing and signed by authorized
representatives of Motorola and ASE.
41. SEVERABILITY
If any provision of this Agreement should become fully or partially
invalid or unenforceable for any reason whatsoever, or violate any applicable
law, this Agreement is to be considered divisible as to such provision and such
provision deleted from this Agreement, and the remainder of this Agreement
shall be valid and binding as if such provision were not included herein. A new
provision shall be substituted for any such deleted provision which shall come
as close to what the parties intended, as far as legally possible, according to
the sense and purpose of this Agreement.
-----------------
* Certain information on this page has been omitted and filed separately with
the commission. Confidential treatment has been requested with respect to the
omitted portions.
26
<PAGE> 27
42. WAIVER
The failure of any Party to enforce, at any time, or for any period of
time, any provision of this Agreement, to exercise any election or option
provided herein, or to require, at any time, performance of any of the
provisions hereof, shall not be construed to be a waiver of such provision, or
in any way affect the validity of this Agreement, or any part thereof, or the
right of any Party thereafter to enforce each and every such provision.
43. INDEPENDENT CONTRACTOR
It is agreed that ASE is an independent contractor for the performance
of the Work under this Agreement and that Motorola shall have no control over
the methods and means of accomplishment thereof, except as specifically set
forth in this Agreement. There is no relationship of agency, partnership, joint
venture, employment or franchise between the Parties. ASE is the sole employer
and principal of any and all persons performing Work under this Agreement, and
is obligated to perform all requirements of an employer under applicable law.
ASE employees and agents shall not be construed to be employees of Motorola,
nor be entitled to participate in the profit sharing, pension, or other plans
established for the benefit of Motorola's employees.
44. ENTIRE AGREEMENT
(A) This Agreement, which includes the Supplements and other
attachments hereto, supersedes all prior discussions and writings and
constitutes the entire and only contract between the Parties relating to the
Work, and it may not be changed, altered or amended except in writing and
signed by duly authorized representatives of all of the Parties.
(B) If any inconsistencies arise between the terms of this
Agreement, a purchase order or any other agreement entered into between the
Parties, the order of precedence in determining the rights and obligations of
the Parties shall be: (i) the Asset Purchase Agreement; (ii) this Agreement;
(iii) the Supplements; and (iv) the relevant firm orders.
27
<PAGE> 28
IN WITNESS WHEREOF, the Parties hereto execute this Agreement to be
effective on the date first referenced above.
Advanced Semiconductor Engineering, Inc. Motorola, Inc.
Name: /s/ JASON CHANG Name: /s/ PATRICK CHOY
------------------------------- -----------------------
Title: Jason Chang, Chairman Title: Patrick Choy,
------------------------------- Corporate Vice
President
-----------------------
Date: Date:
------------------------------- -----------------------
ASE Korea Ltd.
Name: /s/ JOSEPH TUNG
----------------------
Title: Joseph Tung, Director
----------------------
Date:
----------------------
28
<PAGE> 29
Korea Factory
Summary -- Factory Cost & Unit Volume
Most realistic numbers reflected variability
Total Cost Volume Unit Cost
------------------------------------------------------------------------------------------------------------------------------------
1H2000 1H2000 2H99 1H200
Q498 Q199 2H99 Qnty Qnty Q498 Q199 2H99 Qnty Qnty Q498 Q199 Units Qnty
Pkg Description Total $ Total $ Total $ Total $ Units Units Units Units CLC CLC CLC CLC
------------------------------------------------------------------------------------------------------------------------------------
* * * *
* * * *
* * * *
* * * *
* * * *
* *
* *
* *
----------
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.