1.4            “ Effective Date ” shall have the meaning given to it in the introductory paragraph hereof; provided, that the effectiveness of this Agreement is subject to the pertinent terms and conditions hereof.

1.5            “ Intellectual Property Rights ” shall mean any and all right, title and interest in and to any and all patents and all patent applications (including, without limitation, originals, divisions, continuations, continuations-in-part, CPA’s, RCE’s, provisional, extensions or reissues), design rights (whether registered or not and all applications for the foregoing), copyrights, database rights, topography rights, mask work rights, applications to register any of the aforementioned rights, trade secrets, rights in unpatented know-how and show-how, information, data, drawings, concepts, drawings, schematics, specifications, object code and machine-readable copies of any software, source code relating to any software, rights of confidence, rights of authorship, and any other intellectual or industrial property rights of any nature whatsoever in any part of the world and whether arising under the common law, state law, federal law or the laws of any foreign country.

1.6            “ Jazz Confidential Information ” as used herein means information about this Agreement and all its Appendices and Schedules, any amendment or addenda hereto or thereto, Licensor’s business, assets or operations, including but not limited to the Design Kits, the Jazz Technology and Intellectual Property Rights, and any other proprietary information supplied to Licensee by Licensor deemed by Licensor to be of value and not commonly known to others within Licensor’s industry. Jazz Confidential Information will not include information which Licensee demonstrates with documentary evidence: (a) was filed with any governmental agency on a non-confidential basis or was known to the public at the time of its disclosure, or becomes known to the public after the disclosure through no action of Licensee; (b) was in Licensee’s possession prior to the time of the disclosure (provided that Licensee did not receive such information from a party that was subject to a confidentiality agreement with Licensor); (c) is subject to a subpoena, summons or other legal process, or (d) was developed by Licensee independent of the disclosure by Licensor.

1.7            “ Jazz Patent Rights ” shall mean those patent rights that Licensor owns or under which it has rights during the term of this Agreement with respect to the Process.

1.8            “ Jazz Technology ” shall mean all proprietary information and know-how provided to Licensee by Licensor, no matter in what form provided, that relate to the Process, including, without limitation, information relating to the products and processes identified in Appendix F attached hereto.

1.9            Licensee ” shall mean Shanghai Hua Hong NEC Electronics Company, Limited, a company organized under the laws of the People’s Republic of China.

1.10          Licensee’s Facility ” shall mean Licensee’s Facility located at No. 1188, Chuan Qiao Rd, Pu Dong Shanghai, Peoples Republic of China or other agreed facility.

1.11          “ Licensor ” shall mean Newport Fab LLC, a Delaware limited liability company d/b/a Jazz Semiconductor.

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1.12          “ LLC Agreement ” shall mean the Limited Liability Company Agreement of Jazz/Hua Hong LLC, a limited liability company organized by Licensor and Licensee under the laws of the State of Delaware.

1.13          “ Process ” shall mean the process, procedures and methods identified [and defined] by the Design Kits that enable the conduct of a foundry for the production of Wafers as communicated by Licensor to Licensee from time to time during the term of this Agreement.

1.14          “ Manufacturing Territory ” shall mean the People’s Republic of China, including Hong Kong and Macau.

1.15          “ Wafers ” shall have the meaning given to it in the above Recitals.

2.              License; Limitations and Restrictions .

2.1 License to Licensee Licensor hereby grants to Licensee, subject to compliance by Licensee with the terms and conditions of this Agreement, (i) an exclusive, nontransferable, royalty-free (except as otherwise provided herein) license, without the right to sublicense except in the distribution in compliance with the terms of Sections 6.1, 9.2  and 9.6 herein to customers and potential customers whether or not within the Manufacturing Territory solely to enable customers to design for manufacturing at a HHNEC facility within the territory (“Manufacturing Territory”), to the extent that Licensor can grant such license to Licensee (including the Intellectual Property Rights of Licensor therein), to use the Design Kits to the extent necessary solely in conjunction with the conduct by Licensee of a foundry business to produce Wafers at a HHNEC manufacturing facility within the territory; and (ii) an exclusive, nontransferable, royalty-free (except as otherwise provided herein) license within the territory, without the right to sublicense, to use the Jazz Technology and Jazz Patent Rights within the territory, to the extent that Licensor can grant such license to Licensee (including the Intellectual Property Rights of Licensor therein), for business purposes only in order for Licensee to be able to engage customers and to conduct a foundry business for the production of Wafers at a HHNEC facility within the Territory; provided, however, that such right of exclusivity within the Territory shall only apply if (1)Licensee is satisfying the capacity requirements of Licensor,;  and (2) Licensee is commercially competitive on on-time delivery, quality, and yield of Licensor products purchased under separate agreement between Licensor and Licensee; and, provided, further, that such right of exclusivity shall not apply to any existing contracts, agreements, or commitments between Licensor and any third party entered into prior to the signing hereof, which have been identified to Licensee. If Licensee fails to meet the conditions set forth in this Section regarding the exclusivity, Licensor shall notify the Licensee in writing of such failure and the Licensee, upon receiving such notice, shall have ninety days(90) of grace period to correct such failure. Subject to the foregoing, during the term of this Agreement said right of exclusivity shall mean that Licensor shall not license the Licensed Technology to any third party within the Manufacturing Territory other than Licensee to make and sell, Wafers to foundry customers but Licensor shall be free to make and sell and license any third party or parties to make and sell Wafersoutside of the Territory and Licensee’s right to sell Wafers outside the Territory shall be non-exclusive, it is also understood that Licensor shall retain the right to use the Licensed Technology to make or sell wafers at Licensor’s facilities without restriction..

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2.2 No Other Licenses or Rights . This license does not authorize any use other than that which is expressly set out herein. No other license or right to sublicense or other right is granted, by implication, estoppel or otherwise to Licensee with respect to the Design Kits, any Jazz Technology, Jazz Patent Rights or any Intellectual Property Rights of Licensor and/or Confidential Information in regard thereto now or hereafter owned or controlled by Licensor except those expressly granted in this Agreement. Licensee agrees and acknowledges that, except as otherwise set forth herein, Licensor reserves to itself all rights in all fields, territories and technologies under or with respect to the Jazz Technology, Jazz Patent Rights and Intellectual Property Rights of Licensor therein.

2.3 No Transfer of Title or Ownership . This license transfers to Licensee neither title nor any Intellectual Property Rights to the Design Kits, the Jazz Technology or Jazz Patent Rights (or any part or element thereof), or any Documentation (or any part or element thereof), or any copyrights, patents, trade secrets, or trademarks, or other proprietary rights embodied or used in connection therewith, except for the limited licenses expressly granted herein. Licensee hereby agrees and acknowledges that Licensor is the sole owner of and shall retain all ownership right, title and interest in and to the Design Kits, the Jazz Technology and Jazz Patent Rights (and all Intellectual Property Rights therein). Licensee hereby agrees that Licensee shall not contest or oppose or otherwise participate in or support any challenge, including without limitation a challenge to ownership, validity, scope or enforceability of any of the Design Kits, the Jazz Technology or Jazz Patent Rights (or any Intellectual Property Rights therein), nor shall Licensee participate in or support in any way any reissue, reexamination or reconsideration thereof. Licensee shall sign or cause to be signed all documents necessary to perfect Licensor’s ownership rights in the Design Kits, the Jazz Technology and Jazz Patent Rights, including all Intellectual Property Rights of Licensor therein, including without limitation all necessary assignments and agreements with its employees, subcontractors or agents.

2.4 License Restrictions . Licensee agrees that it will not itself, or through any parent, subsidiary, affiliate, agent or other third party: (a) sell, lease, rent, assign, transfer, license or sublicense any of the Design Kits, the Jazz Technology, the Jazz Patent Rights or Documentation; (b) use or manipulate any of the Design Kits, the Jazz Technology, the Jazz Patent Rights or any Documentation (or any part or element thereof) in any manner or to any extent not contemplated by this Agreement; (c) provide, disclose, divulge or make available to, or permit use of the Design Kits, the Jazz Technology, the Jazz Patent Rights or Documentation (or any part or element thereof) by any third party, except as otherwise expressly permitted in accordance with the terms and conditions hereof; or (d) take any other action in derogation of Licensor’s Intellectual Property Rights.

2.5            Right to Audit . Licensee will keep complete, true and accurate books of account, records of production, engineering documents, etc. for the purpose of showing its compliance with the terms of this Agreement. Such books, records and documents will be kept at Licensee’s principal place of business at all times during the term of this Agreement and for a period of at least two (2) years after termination or expiration of this Agreement for any reason. Upon ten (10) days written notice to Licensee, and no more often than twice per year, Licensor’s designated representative, at Licensor’s expense, shall have the right to inspect Licensee’s records relevant to this Agreement only and not business data of Licensee that is irrelevant to this Agreement during normal business hours solely for the purposes of verifying

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the compliance by Licensee with the provisions of this Agreement. A final inspection shall occur no later than two (2) years after the termination of this Agreement.

2.6            Third Party Software, Licenses, Consents and Agreements . Licensee acknowledges and understands that utilization of the Design Kits and/or Jazz Technology requires third party software and software licenses that are not included in the Design Kits, as more particularly set forth on Appendix C attached hereto, and that Licensor is not purporting to assign or sublicense any rights to such third party software. In addition, Licensee acknowledges that the utilization of the Design Kits and/or Jazz Technology is subject to the terms and conditions of certain agreements between Licensor and certain third parties including without limitation, those third parties set forth on Appendix D attached hereto, which agreements require the prior written consent of such third parties, a sublicense of Licensor’s rights under its agreements with such third parties and/or a separate agreement between Licensee and one or more of such third parties to permit Licensee to use the Design Kits and/or Jazz Technology and which may also require the payment of royalties or other recurring fees or charges to such third parties. Licensee acknowledges and agrees that the effectiveness of this Agreement and grant of the license herein is expressly conditioned upon obtaining such consents, sublicenses and/or separate agreements, as applicable, and that Licensee is responsible for obtaining at its own expense, and shall obtain, such consents, sublicenses and/or separate agreements, as applicable, and the third party software and software licenses set forth on Appendix C attached hereto in order to utilize the Design Kits and/or Jazz Technology. Although Licensor shall use its commercially reasonable efforts to assist Licensee in obtaining such consents, sublicenses and/or separate agreements, as applicable, and such third party software and software licenses, and assist in negotiating with such third parties a cost-effective means of utilizing such licenses and the likely recurring fees and charges payable to such third parties, no assurance is or can be given by Licensor that Licensee will be able to obtain any or all of such consents, sublicenses and/or separate agreements, as applicable, or that Licensee will be able to obtain such third party software and software licenses. Licensee further acknowledges and agrees that Licensee shall be responsible for the payment of any fees, royalties and other charges payable to such third parties pursuant to such consents, sublicenses and/or separate agreements, as applicable, and such third party software and software licenses. Furthermore, Licensee acknowledges and understands that Licensee may select to obtain and utilize certain optional views with respect to the Design Kits as Licensee may deem appropriate in its reasonable discretion and at its sole expense, as more particularly set forth on Appendix E attached hereto.

2.7            Export Control Approvals . Licensee acknowledges and agrees that the effectiveness of this Agreement and grant of the foregoing licenses is expressly conditioned upon Licensor and Licensee obtaining all necessary and advisable approvals from the United States Department of Commerce (Bureau of Industry and Security) and any and all other applicable U.S., People’s Republic of China and other foreign governmental agencies (collectively, “Export Control Approvals”).

2.8           Newly Developed Technology . During the term of this Agreement, the Process may be improved, modified, refined or otherwise altered by Licensee. Such improvements, modifications, refinements or other alterations shall hereinafter be referred to as “ Newly

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Developed Technology ” and may, but need not necessarily, constitute one or more inventions, whether patentable or not. Licensee agrees to promptly disclose any Newly Developed Technology to Licensor. All Newly Developed Technology and all Intellectual Property Rights therein shall be owned by Licensee. Licensee may make any registrations or filings with respect to any Newly Developed Technology with written notice to Licensor. Licensee hereby grants to Licensor a worldwide, perpetual, non-exclusive, non-transferable, royalty-free license in the Newly Developed Technology and all Intellectual Property Rights therein to make, sell, offer to sell, import and otherwise distribute products that include or incorporate, in whole or in part, the Newly Developed Technology and the Intellectual Property Rights therein.

3       Support;  Warranties; Disclaimers .

3.1            Support by Licensor . Licensor agrees to provide technology transfer (process) support, as well as foundry manufacturing operation service and know-how for foundry compatible process to Licensee, as more particularly described on Appendix G attached hereto.

3.2           Support by Licensee . Licensee shall provide engineering support, photo masks and engineering wafers to support the performance of this Agreement by the parties, as more particularly described on Appendix G attached hereto.

3.3            Limited Representation by Licensor . Licensor represents and warrants only that, as of the Effective Date, to the actual knowledge of Licensor the Design Kits, Jazz Technology and Jazz Patent Rights licensed to Licensee hereunder are owned, developed by Licensor, or have been licensed to Licensor, and to Licensor’s actual knowledge, does not infringe any intellectual property right of any third party. Licensee’s exclusive remedy and Licensor’s sole obligation for breach of this warranty are set forth in Section 4.1 (Indemnification).

3.4            SUBJECT TO APPLICABLE CHINESE LAWS AND REGULATIONS REGARDING TECHNOLOGY TRANSFER, EXCEPT FOR THE LIMITED REPRESENTATION MADE BY LICENSOR IN SECTION 3.3 ABOVE, THE JAZZ CONFIDENTIAL INFORMATION, THE DESIGN KITS, THE JAZZ TECHNOLOGY, THE JAZZ PATENT RIGHTS, THE DOCUMENTATION, AND ALL INTELLECTUAL PROPERTY RIGHTS THEREIN AND ALL MATERIALS RELATED THERETO AND THE USE THEREOF AND OF ANY HARDWARE, SOFTWARE OR OTHER DOCUMENTATION DELIVERED HEREUNDER (IN ANY AND ALL FORMS) IS PROVIDED BY LICENSOR AND IS ACCEPTED BY LICENSEE “AS IS” AND “WITH ALL FAULTS.” LICENSOR MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO SAME AND/OR THEIR QUALITY, PERFORMANCE, MERCHANTABILITY, NON-INFRINGEMENT, OR FITNESS FOR A PARTICULAR PURPOSE. FURTHER, THERE IS NO AFFIRMATION OF FACT, ACCURACY, COMPLETENESS, CAPABILITY OR PERFORMANCE, EXPRESS OR IMPLIED, MADE BY LICENSOR WITH RESPECT TO THE JAZZ CONFIDENTIAL INFORMATION, THE DESIGN KITS, THE JAZZ TECHNOLOGY, JAZZ PATENT RIGHTS, DOCUMENTATION, THE INTELLECTUAL PROPERTY RIGHTS THEREIN AND ALL MATERIALS RELATED THERETO OR THE USE THEREOF OR OF ANY HARDWARE, SOFTWARE OR OTHER DOCUMENTATION DELIVERED HEREUNDER.

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WITHOUT IN ANY WAY LIMITING THE GENERALITY OF THE FOREGOING, LICENSOR DOES NOT WARRANT THAT ANY OF THE DESIGN KITS OR THE JAZZ TECHNOLOGY IS COMPLETE OR WILL OPERATE UNINTERRUPTED OR THAT IT WILL BE FREE FROM ANY DEFECTS OR ERRORS OR THAT THE JAZZ TECHNOLOGY OR ANY PORTION THEREOF IS DESIGNED TO MEET ANY OF LICENSEE’S OR ANY OF ITS CUSTOMERS’ TECHNICAL OR BUSINESS REQUIREMENTS. NO EMPLOYEE, AGENT, REPRESENTATIVE OR AFFILIATE OF LICENSOR HAS AUTHORITY AT ANY TIME TO BIND LICENSOR TO ANY ORAL OR WRITTEN REPRESENTATION OR WARRANTY CONCERNING ANY OF THE DESIGN KITS OR THE JAZZ TECHNOLOGY.

4 Indemnification .

4.1           Indemnification by Licensor .

Subject to Section 5.1 (Limitation of Liability), Jazz hereby agrees to (1) defend, at Jazz’s expense, and fully indemnify the HHNEC against damages finally awarded by a court of proper jurisdiction in any intellectual property infringement lawsuit brought by any third party against the products manufactured by HHNEC based on the solely use of Jazz’s Process, only to the extent that such products are sold to Jazz and only to the extent t