CONFORMED COPY Amended and Restated Investment Contract Between ANADIGICS, Inc And Kunshan New and Hi-Tech Industrial Development Zone Dated as of April 5, 2007 Contents

1.1    To expand foreign economic cooperation and technological exchange, fully utilize both Parties’ strength, promote the development of Kunshan’s high and new science and technology and expand the manufacturing capacity of ANADIGICS, Inc in China, Kunshan New and Hi-Tech Industrial Development Zone under the People’s Government of Kunshan City (“Party A”) and ANADIGICS, Inc. a corporation formed and existing under the laws of the State of Delaware, U.S.A. (“Party B”), through equal and friendly negotiations, based on the People’s Republic of China’s Wholly Foreign Owned Enterprise Laws, and other applicable laws, regulations, policies of regions under national supervision, hereby agree to Party B’s establishment of a new company in Kunshan New & Hi-tech Industrial Development Zone (“KSND”) in Kunshan City, Jiangsu Province, and hereby enter into this contract (“Contract”) as follows.

1.2    Terms used but not defined herein that are defined in Appendix One hereto shall have the respective meanings set forth in Appendix One.

4.1    The objective of the Contract is to construct a world class Gallium Arsenide (“GaAs”) wafer fabrication manufacturing facility by Party B through ACC in the Kunshan New & Hi-tech Industrial Development Zone, Kunshan City, Jiangsu Province by working with the People’s Government of Kunshan City through Party A, and to promote the development of compound semiconductor industry in China and create high technology jobs in Kunshan as well as to promote ANADIGICS products in China.

4.2    The business scope of the Newco will include: manufacturing and sales of Gallium Arsenide semiconductor commercial products; import and export of other semiconductor products, technological consultation and training and other related business as approved by Party A and Kunshan Administrative Bureau for Industry and Commerce.

5.1    The total investment for the Newco will be Forty-Nine Million Eight Hundred Eighty Thousand US Dollars (US$49,880,000.00) (“Total Investment”), whose registered capital (“Registered Capital”) will be Sixteen Million Seven Hundred Thousand US Dollars (US$16,700,000.00). Party B shall be solely responsible for meeting the difference between the Total Investment and the Registered Capital. At least 15% of the Registered Capital shall be contributed within 3 months after the issuance of Newco’s business license, and the remainder shall be contributed within two years after the issuance of Newco’s business license.

5.2    The capital contributions by Party B to the Registered Capital shall include up to 40% of the Registered Capital (subject to the PRC statutory provisions on the proportional ratio of intangible assets in the Registered Capital) intangible assets that include processing technique, manufacturing technology and related patent. The remaining portion of the Registered Capital other than those intangible assets recognized by PRC law shall be injected in US dollar cash and / or Equipment. 

 

5.3    The value of the used Equipment supplied by Party B should be that of fair market value. The new Equipment purchased within 12 months before the Effective Date should be valued at the original purchase price.

 

5.4    The new Equipment purchased by Party B may be shipped to the US for debugging and qualification before shipping to the Newco for installation. All new Equipment supplied by Party B to Newco should be valued at the original purchase price independent of whether it’s shipped to Party B in the US first or shipped directly to the Newco in KSND.

6.1    Notwithstanding any provision in this Contract, the investment specified in Chapter V shall not be required to be injected till all the following conditions precedent are satisfied unless waived by Party B in writing:

7.2    The obligations of Party B are as follows:

 

(a)	Party B shall cause to be transferred to the Newco the Equipment and working capital the estimated value of which will be no less than Ten Million US Dollars (US$10,000,000.00) as contemplated under Chapter V herein above to satisfy the Registered Capital requirement under the PRC law;

  

(b)	Party B shall be responsible for all funding required to complete the construction of the “Building and Clean Room” over and beyond the Funding committed by Party A, and ensure that the funding is available to ensure that the construction can be completed as contemplated under Clause 7.1 (b);

 

(c)	Subject to any limitations on the transfer of Technology imposed by the government of the USA, Party B will transfer to the Newco Technology, manufacturing and management expertise and dispatch experts and personnel necessary to enable the Newco to develop Gallium Arsenide technology;

 

(d)	Party B shall make a good faith effort to transfer to the Newco cash, Equipment, and Technology and know-how with an approximately combined value of US$49,880,000.00 over the ten (10) years following the Effective Date of this Contract;

 

(e)	Party B will form a Project team to work with Party A’s Project team in developing detailed Building and Clean Room Specifications, overseeing the construction of the Facility;

 

(f)	Party B will train the on-site management, engineering team and employees of the Newco to operate the Facility properly;

 

(g)	Party B shall be responsible for obtaining all necessary governmental authorization from the USA authorities for the transfer of Technology and Equipment to the Newco and for the operation of the Facility as contemplated in this Contract;

 

(h)	Party B will sell the Products through its sales and marketing channels; and

 

(i)

Party B will assist Party A to develop appropriate local or regional supplier chain in China (epitaxy - subject to technology approval if required by US Government, chemicals, assembly, and test). The proposed suppliers should meet semiconductor grade and Party B’s quality standards and offer substantial cost saving over Party B’s current suppliers in order to be used by Newco.

 

7.3    Environmental Protection

 

8.1    If the failure to execute or perform this Contract is due solely to one of the Parties hereto, then such defaulting Party shall bear the responsibility for breach of this Contract.  In such situations, the non-defaulting Party shall be entitled to seek recovery of any and all losses, damages, injuries and expenses, including attorney’s fees and expenses of collection, together with any and all other recovery. If a default under this Contract is attributable to fault by both Parties, then each Party shall bear its respective responsibility in accordance with the actual situation.

8.2    In the event of breach of contract committed by a Party to the Contract resulting in the non-performance of, or inability to fully perform, its obligations under this Contract, such Party’s aggregate liability shall be limited to such extent that: i) in the case of Party B, ACHC and the Newco combined under the Contract it shall not exceed ACHC’s investment in the Registered Capital of the Newco; and ii) in the case of Party A it shall not exceed its investment in the Building and Clean Room. In the event that a breach of contract is committed by more than one Party, each Party shall bear its individual share of the liabilities arising from the breach of contract.

8.3    Any dispute, controversy or claim arising out of or in connection with or relating to this Contract, the interpretation, breach, termination or validity hereof, shall be settled by the Parties through negotiation. Such negotiation shall begin immediately after one Party hereto has delivered to the other Party hereto a written request for such negotiation.

8.4    If a dispute is not resolved within 30 days of the day the dispute arose through negotiation, either Party involved may submit the dispute for arbitration. In case that the arbitration proceeding is initiated by Party B, both Parties agree that the dispute shall be submitted to Singapore International Arbitration Center for arbitration in accordance with the rules of that Center and such arbitration shall be conducted in English and Chinese, and that the arbitrators may refer to both the English and Chinese texts of this Contract; in case that the arbitration proceeding is initiated by Party A, both Parties agree that the dispute shall be submitted to China International Economic and Trade Arbitration Commission Shanghai for arbitration in accordance with the rules of that Commission and such arbitration shall be conducted in Chinese and English and the arbitrators may refer to both the Chinese and English texts of this Contract. The arbitration award rendered by either tribunal shall be final and binding on the Parties and shall be enforceable subject to the limitations of liability provided in Clause 8.2 herein above.

8.5    When any dispute occurs and when any dispute is under arbitration, except for the matters in dispute, the Parties shall continue to fulfill their respective obligations and shall be entitled to exercise their rights under this Contract.

 

11.1    Any amendment to this Contract must be in writing and signed by both Parties.

11.2    The Contract shall be invalid with mutual consent if any Force Majeure Event occurs, and neither of the Parties shall be responsible for the damages. “Force Majeure Event” shall mean any event which is beyond the control of the affected Party, and which is unforeseen, unavoidable or insurmountable, and which arises after the signing of this Contract and which prevents total or partial performance by such Party. Such events shall include earthquakes, typhoons, flood, fire, war, failures of international or domestic transportation, acts of government or public agencies, epidemics, civil disturbances, strikes or any other events which cannot be foreseen, prevented or controlled, including events which are accepted as Force Majeure in general international commercial practice. The Party claiming Force Majeure shall promptly inform the other Party in writing and shall furnish the other Party within fifteen (15) days thereafter sufficient proof of the occurrence and duration of Force Majeure. The Party claiming Force Majeure shall also use all reasonable endeavors to eliminate or mitigate the effects of such Force Majeure.

 

      In the event of a default by Party A or Party B, the non-defaulting Party shall send a written notice to the defaulting Party requesting it to cure such default within ninety (90) days after receipt of the notice. If the defaulting Party fails to cure such default within such ninety 90 days after it has received the non-defaulting Party’s written notice, the non-defaulting Party shall have the right to seek damages from the defaulting Party as well as to terminate this Contract. If both Parties continue to perform this Contract, then the defaulting Party shall pay damages to the non-defaulting Party. In the event that a breach of contract is committed by more than one Party, each such Party shall bear its individual share of the liabilities arising from the breach of contract subject to limits of liability in Clause 8.2 herein above.

11.3    This Contract can be terminated by mutual written agreement between both Parties at any time. In the event of termination of the Contract, Newco shall vacate the Building and Clean Room and Party A shall cooperate with the Newco to assure a prompt and efficient move of all the Equipment to a destination of Newco’s choosing.

 

11.4    This Contract shall automatically come to an end on the one-hundred-fiftieth (150) day after the effective signing by both Parties if by then all the conditions previously identified between Party A and Party B for the Contract coming into effect have not been fulfilled, unless otherwise agreed by both Parties in writing.

KSND:

 

Kunshan New& Hi-tech Industrial Development Zone

757 Beimen Road

Yushan Town, Kunshan Municipality

Jiangsu Province, China

ACC and ANAD:

 

ANADIGICS, Inc

141 Mt. Bethel Road

Warren, NJ 07059

USA

 

HEREOF, each of the Parties hereto has caused this Contract to be executed by their duly authorized representatives on the date first set forth above.

KUNSHAN NEW & HI-TECH INDUSTRIAL DEVELOPMENT ZONE ADMINISTRATIVE COMMITTEE

By: Wei Cheng   

Title: Deputy Director

 

ANADIGICS, INC.

By: Bami Bastani

Title: President & CEO