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TRANSITION SERVICES AGREEMENT

Transition Agreement

TRANSITION SERVICES AGREEMENT | Document Parties: CONEXANT SYSTEMS, INC. | SPECIALTYSEMI, INC. | Carlyle Capital Investors, LLC You are currently viewing:
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CONEXANT SYSTEMS, INC. | SPECIALTYSEMI, INC. | Carlyle Capital Investors, LLC

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Title: TRANSITION SERVICES AGREEMENT
Governing Law: Delaware     Date: 1/21/2004

TRANSITION SERVICES AGREEMENT, Parties: conexant systems  inc. , specialtysemi  inc. , carlyle capital investors  llc
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Exhibit 10.12


TRANSITION SERVICES AGREEMENT

         THIS TRANSITION SERVICES AGREEMENT (this "Agreement" ), dated as of March 12, 2002, is by and between CONEXANT SYSTEMS, INC. , a Delaware corporation (together with its subsidiaries and affiliates, "Conexant" ), and SPECIALTYSEMI, INC. , a Delaware corporation ( "Specialty" ). Conexant and Specialty are each referred to herein as a "Party" and collectively as the "Parties." Certain capitalized terms used in this Agreement are defined in Exhibit A attached hereto.

RECITALS

         WHEREAS, Conexant, Specialty and Carlyle Capital Investors, LLC, a Delaware limited liability company ( "Carlyle" ), are parties to a Contribution Agreement dated February 23, 2002 (the "Contribution Agreement" );

         WHEREAS, Specialty conducts semiconductor wafer fabrication and manufacturing operations ( "Wafer Fabrication Operations" ) using a fabrication facility (the "Fab" ) located at 4311 Jamboree Road, Newport Beach, California 92660 (the "Conexant Campus" );

         WHEREAS, in connection with the transactions contemplated by the Contribution Agreement, each Party desires to provide to the other, and to receive from the other, certain services, subject to the terms and conditions set forth herein; and

         WHEREAS, the closing of the transactions contemplated by the Contribution Agreement is conditioned upon, among other things, the execution and delivery of this Agreement.

         NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Conexant and Specialty hereby agree as follows:

AGREEMENT

         1.     SCOPE OF AGREEMENT.     Each of Conexant and Specialty hereby agrees to provide certain administrative and operational support and related services ( "Services" ) to the other Party, in accordance with the terms and conditions of this Agreement. The nature and scope of each Service are described in Sections 3 and 4 of this Agreement. Certain other terms and conditions with respect to each of the Services are set forth in Exhibit B , including duration (if different from the Term), pricing estimates, and pricing assumptions.

         2.     TERM.     The term of this Agreement (the "Term" ) shall commence on the Closing Date and shall end on the Termination Date, unless earlier terminated in its entirety under Section 9 or unless and to the extent extended by mutual written agreement of the Parties. Certain Services may be provided for a period that is less than the entire Term, in which case such period is set forth in the column entitled "Duration" on Exhibit B. Each Party shall periodically review the Services being provided hereunder and shall, no later than six (6) months after the Closing Date, notify the other Party if it intends to request an extension of this Agreement or one or more of the Services.

         3.     SERVICES TO BE PROVIDED BY CONEXANT.     Conexant shall provide Specialty with the following Services.


Confidential treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request. Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission.

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         3.1    Payroll Services.

        (a)   Recurring Services.     Conexant shall provide the following payroll services for all Specialty employees residing in the United States:

         (i)     Recording and compiling numbers of hours worked by individual employees through Conexant's established time and attendance collection procedures (e.g., punch cards and time sheets) and, once implemented, the [...***...] time and attendance system.

         (ii)    Preparing and distributing manual payroll checks as required by Specialty for unique circumstances, including in connection with employee terminations, late timecards and timecard corrections.

         (iii)  Recording into the [...***...] vacation time and cash-out information for Specialty exempt employees.

         (iv)   Recording into the [...***...] W-4 and DE-4 changes submitted by Specialty employees via the Pro Business System's self-service web site.

         (v)    Responding to reasonable payroll-related inquiries by Specialty employees.

         (vi)   Entering into the [...***...] employee direct deposit information submitted by Specialty employees via the [...***...] self-service web site.

         (vii)  Processing Specialty employees' automobile allowance expense reports as may be approved by Specialty and submitted by Specialty's sales staff to Conexant's Human Resources staff.

         (viii)  Coordinating Specialty's payroll services with the [...***...], and interfacing directly with the [...***...] for Specialty's daily payroll processing needs.

         (ix)   Recording into the [...***...] relevant 401(k) information, Voluntary Life Plans information, garnishments, [...***...] donations, savings bond purchases, and third party disbursements for Specialty employees.

         (x)    Entering into the [...***...] information concerning Specialty employees for purposes of withholding and recording employee state payroll taxes.

         (xi)   Validating weekly and biweekly payroll runs for Specialty employees through a payroll reconciliation process, and reviewing Specialty executive payroll information on a weekly basis.

         (xii)  Preparing and distributing payroll reports as reasonably required by Specialty.

         (xiii)  Forwarding to Specialty payroll and related tax funding requirements upon completion of processing relevant payroll data.


Confidential treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request. Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission.

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         (b)   Administrative Support and Transition Assistance.     Conexant shall also provide Specialty with reasonable administrative support consistent with the administrative support provided with respect to Conexant employees for payroll, personnel records management and human resource information systems (including demographic information), [...***...]. In connection with such services, Conexant, either itself or through a payroll processing contractor (the "Payroll Processing Contractor" ), will accommodate reasonable additional reporting with respect to demographic information and support Specialty's conversion from [...***...] to another system, including by providing employee data files in Conexant format, assisting Specialty with data interpretation and providing such other support services as requested by Specialty; provided, however, that the availability of Conexant payroll processing services described in this Section, other than the provision of data files in Conexant format and data interpretations, necessary to convert from the [...***...] to other systems will be determined at Conexant's reasonable discretion based on resources available at the time of such conversion. If a Payroll Processing Contractor is employed by Conexant, Conexant shall remain responsible for all Services to be provided to Specialty hereunder. [...***...]

         (c)   Additional Information Regarding Payroll Processing.     The processing of any payroll items pursuant to this Section 3.1 for both direct deposits and checks shall be performed utilizing bank accounts of Specialty funded by Specialty, it being understood that Conexant shall have no obligation to make any payments or advance any funds with respect to such payroll processing. Specialty shall provide Conexant or the Payroll Processing Contractor with all authorizations necessary for the purpose of processing payroll payments pursuant to this Section 3.1 by check and direct deposit from Specialty's accounts. Specialty also shall supply Conexant with checks containing Specialty's name and bank account number thereon for purposes of making such payroll payments to be made by check. Conexant shall, or shall cause the Payroll Processing Contractor to, use reasonable efforts to provide Specialty with the amount of payroll payments at least one (1) business day prior to the date on which such payments are scheduled to be made. Conexant shall, or shall cause the Payroll Processing Contractor to, calculate the amount of employee authorized deductions, employee deductions required by law (including without limitation, wage garnishments, child support and other domestic relations orders and taxes and other levies), and amounts payable to third parties with respect to each such payroll based solely on employee deductions existing immediately prior to the Closing Date, as adjusted from time to time in writing by Specialty to Conexant or the Payroll Processing Contractor, consistent with such calculations made by Conexant with respect to its payroll immediately prior to the Closing Date (it being understood that neither Conexant nor the Payroll Processing Contractor will have any obligation to make payments on behalf of Specialty or Specialty employees to third parties with respect to the same). Once funding requirement information is furnished to Specialty by Conexant, Specialty shall confirm that sufficient uncommitted funds remain in the relevant payroll account, or ensure that sufficient funds are promptly transferred into the relevant payroll account no later than twenty-four (24) hours prior to each projected payroll or other disbursement. To the extent Conexant, at its sole option, makes payments for payroll or related deductions on behalf of Specialty for administrative convenience, Conexant shall notify Specialty at least one (1) business day in advance of the due date for any such payment, in which case Specialty shall pay to Conexant the amount required for such payment by wire transfer of immediately available funds prior to Conexant making such payment.


Confidential treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request. Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission.

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         (d)   Payroll Tax Returns.     Conexant shall, or shall cause the Payroll Processing Contractor to: (i) prepare all W-2 forms for such period for which Conexant provides payroll processing services pursuant to this Section 3.1 and (ii) supply the data necessary for Specialty to prepare and file all United States federal, state and local payroll tax returns in connection with payroll payments processed by Conexant pursuant to this Section 3.1 (notwithstanding that such filings may be made after the Termination Date), it being understood that Conexant shall have no obligation to make deposits or payments to taxing authorities or any other person or entity with respect to such payroll payments or payroll tax returns or statutory employment taxes related thereto. Specialty shall provide Conexant or the Payroll Processing Contractor with proper federal and state tax identification numbers and related forms and information to complete such W-2 forms. Conexant shall prepare, deliver to all Specialty employees and applicable government agencies, and file with all applicable government agencies, W-2 forms for all Specialty employees on or prior to January 31 of the year following the tax year to which such forms apply.

         3.2   Tax Services.     Conexant shall assist Specialty with the identification and engagement of a third party consultant who will prepare and file all necessary Specialty tax returns. Conexant shall further assist Specialty or, as necessary, such consultant, with: (i) the preparation and filing of all federal and state income tax returns, including an estimation of profits, (ii) the preparation and filing of all property tax returns, (iii) the preparation and filing of all sales and use tax returns, and (iv) tax research and miscellaneous questions from Specialty personnel. Specialty acknowledges and agrees that, notwithstanding any assistance provided by Conexant pursuant to this Section 3.2, all Specialty tax returns are and shall remain the sole and exclusive responsibility of Specialty, and Conexant shall have no responsibility for the accuracy and/or the completeness of any information contained therein nor any liability in connection therewith.

         3.3   Treasury Services.     Conexant shall provide Specialty with the following treasury Services, as requested by Specialty:

         (i)     Cash management activities for domestic bank accounts:

         (A)   daily: review bank accounts, ascertain shortfall/excess cash, invest excess cash pursuant to a written policy provided by Specialty, and reconcile total receipts and disbursements;

         (B)   daily: review and reconcile company owned short term investments initiated through treasury;

         (C)   execute high dollar value payments (e.g., vendor payments, operation funding, Foreign USD payments) via Fedwire;

         (D)   prepare daily report to Specialty management of cash position and discuss with Specialty treasurer cash requirements and investment strategy;

         (E)   interface with bank representative on day-to-day operations of bank accounts;

         (F)    update bank mandate letters and banking resolutions for requested changes in signature authority;

         (G)   interface with other Specialty financial functions (including but not limited to payroll, accounts payable, general accounting and accounts receivable) on various support services required;

         (H)   review bank contracts requirements for new services and assist in deployment of such services;

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         (I)    respond to questions from Specialty or its accountants on daily cash activities and related questions; and

         (J)    subject to Specialty approval, negotiate pricing on cash management related services and complete bank account analysis;

         (ii)    Foreign Exchange Activities:

         (A)   execute foreign exchange spot transactions or forward contracts as requested by Specialty in writing, it being understood that such transactions will be executed based on market rates at the time of execution and that Conexant will have no liability for the rates at which such transactions are executed;

         (B)   provide supporting documentation to Specialty for foreign exchange contracts executed by Conexant; and

         (C)   maintain and administer documentation for foreign currency transactions executed by Conexant.

         (iii)  Assistance with insurance matters:

         (A)   upon request, notify broker of claims after receipt of supporting documentation from Specialty;

         (B)   attend meetings with broker and Specialty to discuss documentation assembled by Specialty in support of claims and formulation of strategy for presenting claims to underwriters;

         (C)   provide guidance to Specialty regarding procedures for initiation of claims and administration of claims during settlement process;

         (D)   interface with broker to obtain certificates of insurance; and

         (E)   review invoices received from broker.

         (iv)   Services for pension plan investments:

         (A)   attend meetings with investment manager;

         (B)   interface with investment manager to obtain information and arrange for issuance of quarterly report by investment manager for Specialty on investment results versus benchmarks;

         (v)    Cooperate with Specialty regarding transfer of cash management, foreign exchange, pension plan investment and insurance functions to Specialty within timeframes agreed to by Specialty and Conexant.

         (vi)   The services to be provided by Conexant do not include insurance audits or insurance renewals as neither of these activities is anticipated during the Term.

         (vii)  Conexant shall not terminate the coverage provided to Specialty under Conexant's property and business interruption insurance policies for a period not to exceed twelve (12) weeks from the Closing Date. In addition, Conexant shall assist Specialty to complete the application for such coverage.

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         3.4   Accounting Services.     Conexant shall provide Specialty with the following accounting services: (i) general accounting support to include weekly payroll uploads, monthly benefit uploads, [...***...], labor related inquiries and troubleshooting, [...***...], recurring entries—set up, maintenance and execution, [...***...], various labor related analysis (i.e., payroll tax, 401K, health benefits, accrued payroll, vacation, sick, relocation, medical, etc.), accounts receivable analysis, prepaids analysis and amortization, accrued sales and use taxes and related filings, accrued property taxes, other accruals (i.e., legal, dues, professional, travel), accrued software maintenance, reserve for workers compensation, accrued income taxes and deferred revenue analysis; (ii) monthly close support to include monthly close coordination, reporting and troubleshooting; and (iii) reporting to include financial statements preparation, review and related analysis and balance sheet analysis.

         3.5   Planning Systems Services.     Conexant shall provide Specialty with the following financial planning systems support: assistance with licensing, providing user support, and assistance with the coordination of the consolidation of data within the [...***...]. Specialty acknowledges and agrees that, to the extent Specialty elects to utilize Conexant's financial planning systems, the quarterly financial planning process to be used for Specialty will follow the existing process at Conexant.

         3.6   Capital Planning Services.     Conexant shall provide Specialty with system and support services for planning, tracking, and budgeting of capital expenditures and depreciation expense. All requests for such services shall be submitted in accordance with procedures used by Conexant for such requests, which shall be provided to Specialty upon request and at any time that such procedures are modified by Conexant. Conexant employees shall input the appropriate data regarding Specialty into Conexant's capital planning system and provide Specialty with feedback, documentation, and reports. Certain Specialty employees shall be granted access to the system if requested by Specialty, solely for the purpose of obtaining information related to the Capital Expenditures.

         3.7   BSO Controllership     Conexant shall provide Specialty with month-end close services to cross charge reimbursable expenses for all transition services between Specialty and Conexant. Specialty shall provide to Conexant, on a monthly basis, a detail listing of receiving and sending cost centers and actual hours and costs for Engineering Probe and actual usage and associated costs for Probe Card services.

         3.8   Accounts Payable Services.

        (a)   Description of Services.     Conexant shall provide Specialty with the following accounts payable services: (i) purchase order related invoice posting and processing [...***...], (ii) processing of check requisitions properly submitted by Specialty employees, (iii) accounts payable check printing and disbursement or, to the extent desired by Specialty, wire transfer or other electronic funds transfer, as approved by Specialty, (iv) preparation and distribution of any Form-1099's required to be completed in connection with payments by Specialty, (v) correspondence with internal and external contacts related to accounts payable of Specialty, (vi) invoice payment issue resolution with buyers, suppliers and end users (subject in each case to approval by Specialty), (vii) auditing and filing of accounts payable invoices, (viii) property administration (i.e., capitalization, disposals and reporting), and (ix) initial setup of accounts payable and property (i.e., property accounting conversion to Specialty and accounts payable conversion to Specialty).


Confidential treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request. Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission.

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         (b)   Additional Information Regarding Accounts Payable Processing.     The processing of any accounts payable pursuant to this Section 3.7 shall be performed utilizing bank accounts of Specialty funded by Specialty, it being understood that Conexant shall have no obligation to make any payments or advance any funds with respect to such accounts payable processing. For accounts payable payments approved by Specialty for payment by Conexant pursuant to this Section 3.7, Specialty shall provide Conexant with all necessary authorizations. Specialty also shall supply checks, as directed by Conexant, containing Specialty's name and bank account number thereon for purposes of making such accounts payable payments to be made by check. Upon completion of weekly processing of accounts payable and direct disbursement transaction and determination of the cash funding requirement, Conexant shall provide Specialty with the appropriate funding requirements information. Once funding requirement information is furnished to Specialty by Conexant, Specialty shall confirm that sufficient uncommitted funds remain in the relevant accounts payable account, or ensure that sufficient funds are promptly transferred into the relevant accounts payable account no later than 24 hours prior to each projected disbursement. To the extent Conexant and Specialty agree that Conexant shall make payments for accounts payable on behalf of Specialty for administrative convenience, Specialty shall reimburse Conexant therefore by wire transfer of immediately available funds prior to mailing of such payments by Conexant.

         3.9   Accounts Receivable Services.     Conexant shall provide Specialty with the following accounts receivable services: (i) credit evaluation to set up customer accounts and recommend lines of credit to be granted to Specialty customers, (ii) customer account set-up and maintenance [...***...], (iii) order entry, (iv) issue of invoices, (v) assistance with accounts receivable collection, (vi) cash application, (vii) account reconciliation, (viii) reporting, (ix) bad debt reserve requirements computation, (x) cash receipts forecasting, and (xi) developing and maintaining policies and procedures in accordance with Specialty and Conexant agreed upon parameters.

         3.10    Human Resources Information Technology Services.

        (a)    Conexant shall provide Specialty with the following human resources information technology services, as requested by Specialty:

         (i)    [...***...]

        (ii)   Automated Employee Status Notification.     Specialty will be permitted, when available, to use Conexant's [...***...] system to make online changes to employment status.

         (iii) Compensation Systems.     Specialty will be permitted to use Conexant's Compensation [...***...] Database.

         (iv)  Staffing and Recruitment Systems.     Specialty will be permitted to use Conexant's [...***...] and [...***...] to the extent and during the periods in which Specialty employees remain employed by Conexant following the Closing Date.

         (v)   Termination and Clearance System.     Specialty will be permitted to use Conexant's Termination and Clearance System.

         (vi)  Attrition Reporting.     Conexant will produce attrition reports regarding Specialty employees in the same format and schedule as provided within Conexant.

         (vii) Web Support.     Conexant will create a Specialty Human Resources Department intranet website using Conexant's Human Resources intranet website content adapted for Specialty use.


Confidential treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request. Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission.

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         (viii) Consultation Services.     Conexant's HR Systems and Services Staff shall provide Specialty with consultation services in support of HR applications for a period of [...***...] following the Closing Date.

         (ix)  Verification of Employment.     Specialty shall be permitted, when available, to utilize Conexant's verification of employment services through [...***...].

         (b)    In the event that Conexant is required to pay any amount in order to obtain any consent or license from any third party needed strictly to provide the services described in this Section, Conexant shall notify Specialty of such amount. If Specialty does not pay the full amount, the affected Services will be terminated, in which case the applicable amount set forth in Exhibit B will be adjusted accordingly.

         3.11   Employee Service Center.     Conexant's Employee Service Center will provide training and knowledge transfer to Specialty personnel in order for them to independently support the administration of the following employee services and provide assistance, during the Term indicate above, for [...***...].

         3.12   Employee File Transition Services.     Subject to other relevant provisions of this Agreement, Conexant shall store, maintain and make available to Specialty employee files (other than medical records) for Specialty employees including, but not limited to, benefit information and personnel files (other than medical records) for terminated Specialty employees. On or as soon as reasonably practicable following the Closing Date, Conexant shall move any and all such files to a location designated by Specialty, and Specialty shall thereafter have sole responsibility for the storage and maintenance of such employee files.

         3.13   Staffing Services.     In order to ensure an orderly transition of staffing function services from Conexant to Specialty, Conexant will provide Specialty's staffing organization with the following staffing services for a period not to exceed 90 days:

         (i)     assistance with talent sourcing and recruitment;

         (ii)    assistance with interviewing candidates, extending offers to candidates as directed by Specialty and tracking offers made;

         (iii)  assistance with job postings and job fairs as requested by Specialty;

         (iv)   assistance with outside vendor management [...***...]

         3.14   Compensation Support Services.     Conexant will provide Specialty with all administrative and analytical support necessary to transition compensation activities to Specialty. These activities include, without limitation, 2003 salary, bonus, and option grant planning, developing submissions to various compensation surveys [...***...]. Conexant will assist Specialty with executive compensation-related activities including, but not limited to, the development of stock option grant guidelines, and cash and equity compensation plan design issues. Conexant will make reasonably available to Specialty any program records necessary to support both historical and future compensation programs.

         3.15   Conexant Organizational Effectiveness.     Conexant will provide Specialty access via a shared network drive to all Organizational Development-related processes and templates including, but not limited to talent reviews and succession planning.


Confidential treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request. Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission.

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         3.16   Conexant Learning Solutions Services.

        (a)   Learning Infrastructure.

        (i)    Use of Learning Management Systems.     Specialty shall have access to all of Conexant's learning management systems, [...***...], for the purpose of maintaining employee records for all training activities. Specialty employee information may be maintained as needed by either Conexant or Specialty, at Specialty's election, subject to standards established by Conexant for information regarding its employees.

         (ii)   Use of Technology Enabled Learning.     Specialty shall have access to all of Conexant's on-line or technology enabled learning solutions, [...***...]

         (iii) Use of Training Rooms.     Specialty shall be permitted to use any Conexant training rooms, including but not limited to classroom style and computer laboratory rooms, at any Conexant facility, provided that such rooms are not then in use by Conexant and Specialty has obtained prior consent from the person responsible for the training room. Neither Party shall unreasonably restrict the other Party's access to such training rooms.

         (iv)  [...***...]

        (b)   Non-Technical Training.     Conexant shall provide the following non-technical training classes and consulting services to Specialty:

         (i)    Internally-Taught Classes.     Specialty employees and consultants shall be permitted to participate in internally-taught non-technical training classes offered by Conexant, [...***...]

         (ii)   Vendor-Taught Classes.     Specialty employees and consultants shall be permitted to participate in vendor-taught non-technical classes offered by Conexant [...***...]

         (iii)   Other Classes.     Specialty employees and consultants shall be permitted to participate in any other non-technical training classes offered by Conexant, either directly or through Conexant's vendors [...***...]

         (c)   Limitations.     Notwithstanding anything in this Section to the contrary, in no event shall Conexant be obligated to offer any classes described in this Section. Participation in any class offered pursuant to this Section shall be based on a first-come, first served basis, with Specialty employees receiving equal consideration with Conexant employees.

         (d)   Instructors.     As necessary to provide the services described in this Section, any of the classes described in this Section may be taught by instructors who are either Conexant employees or Specialty employees.

         3.17   Technical and Business Related Training.     During the Term, Conexant shall provide the following learning solutions organization services to Specialty:

         (i)    Program/Project Management Classes.     Specialty employees and consultants shall be permitted to participate in vendor-taught program/project management classes offered by Conexant, [...***...]

         (ii)   [...***...]


Confidential treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request. Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission.

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         (iii) [...***...]

        (iv)  [...***...]

        (A)  [...***...]

        (B)  [...***...]

        (v)   Vendor Contracted Technical Training Classes.

        (A)   Specialty employees and consultants shall be permitted to participate in vendor-taught engineering training classes offered by Conexant [...***...]

         (B)   Specialty employees and consultants shall be permitted to participate in vendor-taught information technology training classes offered by Conexant, [...***...]

         (C)   Specialty employees and consultants shall be permitted to participate in vendor-taught information technology technical training classes offered by Conexant [...***...]

         (vi)  Other Classes.     Specialty employees and consultants shall be permitted to participate in any other learning solutions training classes offered by Conexant, either directly or through Conexant's vendors, at a cost to be negotiated by the Parties in good faith.

         (vii) Limitations.     Notwithstanding anything in this Section to the contrary, in no event shall Conexant be obligated to offer any classes described in this Section. Participation in any class offered pursuant to this Section shall be based on a first-come, first served basis, with Specialty employees receiving equal consideration with Conexant employees.

         (viii) Instructors.     As necessary to provide the services described in this Section, any of the classes described in this Section may be taught by instructors who are either Conexant employees or Specialty employees.


Confidential treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request. Omissions are designated by the symbol [...***...]. A complete version of this document has been filed separately with the Securities and Exchange Commission.

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         3.18   Information Technology.     In addition to the information technology services specified elsewhere in this Agreement, Conexant shall provide information technology services to Specialty pursuant to the terms and conditions of that certain Information Technology Services Agreement attached hereto as Exhibit C (the "Information Technology Services Agreement" ). Notwithstanding anything herein to the contrary, other than with respect to the incorporation of certain payment obligations arising under the Information Technology Services Agreement into Section 5.2 below and Exhibit B attached hereto, the provisions of this Agreement shall not apply to the information technology services provided under Information Technology Services Agreement, which alone shall govern the obligations of the Parties in connection therewith.

         3.19   Mail Services.     Conexant, through its third party vendor, shall provide Specialty with mail services from the Newport Beach Facility. Specialty shall be responsible for all outgoing mail charges incurred by Conexant on behalf of Specialty, based on a postage meter designated for Specialty maintained at Conexant's Newport Beach Facility.

         3.20   Calibration and Metrology Services.

        (a)   Description of Services.     Conexant will provide Specialty with calibration and metrology services in a manner consistent with the way in which such services were provided within Conexant immediately prior to the Closing Date. [...***...]

         (b)   Additional Information.     Conexant will not provide calibration or metrology services to Specialty on tools owned by Specialty that are not located at the Specialty Newport Beach facility.

         3.21   Reliability Services.     Conexant shall provide Specialty with the following reliability services in a manner consistent with the way in which such services were provided within Conexant immediately prior to the Closing Date: [...***...]

         3.22   Reprographics Services.     Conexant shall provide such reprographics services as requested by Specialty.

         3.23   Facilities Related Services.

        (a)   Cafeteria Usage.     Employees of Specialty shall be entitled to use the cafeteria located at the Newport Beach Facility, subject to such rules, requirements and limitations as are applicable to Conexant's employees.

         (b)   Auditorium Usage.     Specialty shall have access to the El Capitan auditorium via scheduling through Conexant. Conexant shall make reasonable accommodations to provide use of the auditorium when requested subject to availability, provided that Conexant shall coordinate with Specialty in order to set aside in advance four dates per month on which Specialty shall have the first option to use the auditorium.

         3.24   Strategic Sourcing.     Conexant shall assist Specialty with arrangements for obtaining supplies and services for use in the Wafer Fabrication Operations and other activities in support thereof, as requested by Specialty, including but not limited to: contract labor, computer hardware and software, supplies, furniture, service repairs, and telephone equipment.

         3.25   Design Kit Support.     Conexant will provide Specialty with the following MaskCAD services in a manner consistent with the way in which such services were provided within Conexant immediately prior to the Closing Date: [...***...]

         3.26   Digital Library Support.     Conexant will provide Specialty with the following services in a manner consistent with the way in which such services were provided within Conexant immediately prior to the Closing Date: [...***...]


Confidential treatment has been requested for portions of this document. This copy of the document filed as an Exhibit omits the confidential information subject to the confidentiality request. Omissions


 
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