EXHIBIT 10.27

***PORTIONS OF THIS EXHIBIT HAVE BEEN DELETED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE CONFIDENTIAL PORTIONS HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

This Agreement is made on this 29th day of June, 2000 ("Effective Date") by and between POWER INTEGRATIONS, INC., a corporation duly organized and existing under the laws of the State of Delaware, U.S.A., having its principal place of business at 477 North Mathilda Avenue, Sunnyvale, California 94086 ("PI"), and

MATSUSHITA ELECTRONICS CORPORATION, a corporation duly organized under the laws of Japan, having its principal place of business at 1-1 Saiwai-cho, Takatsuki- shi, Osaka-fu, 569 Japan ("MEC"), and

MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., a corporation duly organized under the laws of Japan, acting through Semiconductor Marketing & Sales Office for Overseas having its principal place of business at Twin 21 National Tower, 1-61 Shiromi 2 Chome, Chuo-ku, Osaka 540-0001 Japan ("MEI"), (MEC and MEI shall be hereby regarded as single party when indicated as "MEC/MEI").

A. PI is the owner and developer of certain integrated circuit process technologies required to manufacture high voltage integrated circuits.

B. PI has no wafer fabrication facility and desires to obtain a cost competitive foundry to manufacture wafers for PI, in order to provide a source for the wafers PI requires, and to assure a long term supply of wafers.

C. MEC/MEI has wafer fabrication facilities in Japan and desires full utilization and efficient operation of its wafer fabrication facilities.

D. MEC/MEI and PI have established a fruitful business relationship.

E. MEC and PI intend to enter into a Technology License Agreement (the "License Agreement") at the same time that they enter into this Agreement.

AGREEMENT

PI and MEC/MEI, intending to be legally bound, hereby agree as follows:

For the purpose of this Agreement, all capitalized terms not otherwise defined in this Agreement, including its exhibits, shall have the meanings set forth in the License Agreement, and the following terms have the following meanings:

1.1 "Fab" means any of the existing or future wafer fabrication facilities in Japan or the United States of any company in the Matsushita Group.

1.2 "Wafer(s)" means wafer(s) for Products which MEC fabricates under this Agreement for sale to PI through MEI.

1.3 "Prior Wafer Foundry Agreement" means the Wafer Foundry Agreement entered into among MEC, MEI and PI as of June 29, 1990, as amended June 29, 1995.

For PI Products that will be second sourced by MEC, the mask set and sample wafer costs will be shared equally between MEC and PI.

(a) MEC/MEI shall use its best efforts to bring-up Updates of Baseline Process, if any, at the Fab at which PI Products then are made in order to supply PI with prototype Wafers and production Wafers as contemplated by this Agreement.

(b) The parties agree that each party shall pay all of its own expenses incurred in order to perform its obligations under Section 2.3(a).

(c) During the term of this Agreement, the allocation of the costs and expenses incurred by MEC, after consultation with PI and if requested by PI, for
(i) improvement of the existing manufacturing processes for PI Products; or (ii) establishment of a new manufacturing process, and/or (iii) transfer of manufacturing process from one Fab to another Fab, whichever is necessary to diligently comply with this Agreement shall be negotiated in good faith between the parties hereto.

(a) Throughout the term of this Agreement, MEC/MEI shall make its best effort to commit human, capital and financial resources necessary and reasonably calculated to permit it to timely fulfill all of its obligations under this Agreement, including, but not limited to, appropriate capital expenditures and allocation of capacity, facilities and experienced personnel for an engineering/manufacturing team to ensure an expeditious Product technology transfer; an expeditious bring-up of new Products including Updates of Products at the Fab; and a smooth production build-up beyond the period of prototype development of such Products.

(b) During the period of prototype production development and sample Wafer production development for new Products including Updates of Products, PI shall bear the cost of mask making for all PI Products and pay for all Wafers requested by and delivered to PI.

(c) During the period of prototype production development and sample Wafer production development for new Products including Updates of Products, MEC/MEI shall bear any and all the costs of Wafers used or disposed of by MEC/MEI for the production or development.

(a) During the term of this Agreement, MEC/MEI shall make available for delivery to PI, from the production capacity of the Fab, not less than the quantities of tested wafers as are set forth in Exhibit A ("Wafer Pricing and Capacity"). The terms "Standard Process" and "DC Process" shall mean the definitions given for those terms in Appendix A ("Baseline Process") of the License Agreement.

(b) At either party's request, the parties shall negotiate in good faith the terms and conditions for MEC/MEI to supply to PI, and for PI to purchase from MEC/MEI, more than the minimum quantities of wafers agreed between the parties.

(c) PI shall order Products in lots, each of which contains the number of Wafers as set forth in Exhibit A to this Agreement ("Wafer Pricing and Capacity").

3.2 Prices.

(a) The purchase price payable by PI to MEC/MEI for the quantities of wafers set forth in Exhibit A will be as set forth in that Exhibit A.

(b) Wafers shall be tested in accordance with test procedures as agreed by MEC and PI. All Wafers shall be FOB point of shipment by MEC/MEI.

(c) Any gain or loss due to the exchange rate between Japanese Yen and United States Dollars will be shared equally by PI and MEC per Exhibit B ("Exchange Rate") at the time the Wafer

order is placed.

(a) MEC/MEI will complete mask sets for any PI Product within seven
(7) working days after the receipt by MEC/MEI of a final database tape for such PI Product. PI will bear all the costs of mask tooling.

(b) MEC/MEI will ship to PI prototype Wafers of any PI Products within forty (40) working days after availability of mask sets for such PI Product. MEC/MEI and PI will negotiate in good faith the possibility of making available to PI fast-turn lots for certain prototype Wafers. PI will pay for those prototype wafers.

(c) MEC/MEI will ship the first (1st) shipment of the Wafers ordered by PI for that month no later than forty (40) working days after the start of the production as per PI's purchase order for such PI Products, unless PI's purchase order specifies a later delivery date. The rest of the ordered Wafers for that month will be shipped so that PI receives all such Wafers, in equal weekly quantities to the extent practicably possible, within forty (40) working days after the first (1st) shipment. MEC/MEI shall use its reasonable and best efforts to improve actual leadtime for the production of Wafers.

(d) In the event the production of new Products (including Updates of the Products) requires more complicated manufacturing process to MEC, including the case, but not limited to, where the increase of the number of masks used for such production, or the manufacturing processes of the Products are transferred from the present Fab to another qualified Fab, the leadtime stated in Section 3.4(c) may be changed according to such different conditions if both parties agree to such change.

(a) PI shall deliver an initial binding purchase order covering four
(4) months of deliveries of tested Wafers and a nonbinding forecast[s] for same for the following two (2) months.

(b) In order to allow MEC the smooth production of the Wafers, by the twenty-fifth (25th) day of each month during the term of this Agreement, PI shall deliver a purchase order and updated forecast, specifying (i) its firm, noncancellable order for Wafer starts for the next four (4) months ahead; the first month of which is specified by product, and the next three months of which are forecast by product, against which the numbers of Wafers (but not necessarily the product mix) stated in PI's actual

orders shall be the same, and (ii) the quantities of Wafers to be ordered by PI for the months five (5) and six (6) months ahead, against which PI's actual orders will be within the range of plus or minus thirty percent (30%).

4.3 Each party shall not export the Product to any country designated as "Countries against which the sanctions should be taken" by certain resolutions of the Security Council of the United Nations regarding the sanctions against certain countries, as long as such resolutions remain valid and effective. For purposes of this Agreement, any re-export in violation of such resolutions by a customer of either MEC or PI will not be considered to be an export in violation of such resolutions by MEC or PI, as the case may be, so long as MEC or PI, as the case may be, did not knowingly participate in such re-export.

4.4 During and after the term of this Agreement, to the extent the same practically is within its control, each party shall not sell, lease or otherwise dispose of, directly or indirectly, any Product to customers whom such party knows intend to make use of the Product for Military Purposes (defined hereinbelow). For the purpose of this Agreement, "Military Purposes" means the design, development, manufacture or use of any weapons, including without limitation nuclear weapons, biological weapons, chemical weapons and missiles.

4.5 In the event either party violates the provisions of this Article IV, the non-violating party shall have the right to require reasonable written assurances from the violating party that such violation, whether or not past incidents of violation can be cured, will not continue in the future, and if the violating party does not deliver such assurances to the non-violating party promptly after its request, the non-violating party may suspend the performance of its obligations under this Agreement until such time as it receives such assurances, without any prejudice to the rights and remedies which the non- violating party may have under this Agreement. In the event that such assurance is not delivered to the non-violating party within three (3) months after request, the non-violating party shall the right to terminate forthwith, without any prejudice to the rights and remedies which it may have hereunder, this Agreement, by giving a written notice to the violating party.

(a) Except as otherwise set forth in this section, if either party shall at any time default, without any material causative fault on the part of the other party, by failing to substantially perform any material provision of this Agreement, and such default shall not be cured within sixty (60) days after written notice to it from the other party specifying the nature of the default, the non-defaulting party shall have the right to terminate this Agreement at any time thereafter by giving written notice of termination to the other party, and upon the giving of such notice of termination, this Agreement shall terminate immediately. The party receiving notice shall have the right to cure any such default up to the date of termination.

(b) Each party shall have the right to terminate this Agreement by giving written notice of termination to the other at any time upon or after, (i) the filing by the other party of a petition in bankruptcy or insolvency, or (ii) upon or after the filing of any voluntary or involuntary petition or answer seeking reorganization, readjustment or arrangement of the other party's business under any law relating to bankruptcy or insolvency, or (iii) upon or after the appointment of a receiver for all or substantially all of its property, or (iv) upon or after the making by the other party of any assignment or attempted assignment for the benefit of creditors, or (v) upon or after 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; and this Agreement shall terminate automatically on the thirtieth (30th) day after such notice of termination is given, without further notice, demand or opportunity to cure.

(a) This Agreement, and rights and obligations herein, shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, provided that except as set forth below neither party shall assign this Agreement or any of its rights hereunder without the prior written consent of the other party.

(b) Notwithstanding any other provision of Agreement, PI may without the prior consent of MEC/MEI assign all of its rights under this Agreement to a purchaser of all or substantially all of PI's stock or assets or to a third party participating in a merger or other corporate reorganization in which PI is a constituent corporation. Within 180 days after such assignment, if the assignee is (i) a competitor of MEC, and (ii) of comparable size to MEC or larger, then either party may elect to have this Agreement be deemed to have expired and to have the provisions of Section 5.4 take effect 180 days after written notice to the other party of such election. Any terminations by MEC/MEI in this situation will become effective after a reasonable but significant transition period for PI to bring up another supplier of wafers.

(c) As a condition of any assignment of this Agreement or any of the rights granted hereunder, any successor shall expressly assume in writing the performance of all terms and conditions of this Agreement to be performed by the assigning party including such party's obligations hereunder with respect to the protection of Confidential Information.

(a) creating any partnership, joint venture or other similar relationship between PI and MEC/MEI; or

(b) obligating either party to commercially produce or to continue to commercially produce, any solid state device of any type whatsoever, or any parts or components thereof except otherwise explicitly provided in this Agreement.

or other labor disturbances, fires, floods, earthquakes, acts of God, or causes of like or different kind beyond the control of the parties and the parties hereto shall be excused from any failure to perform any obligation hereunder to the extent such failure is caused by any such law, order, regulation, direction, request or contingency, for the period such cause endures. Notwithstanding the foregoing, in the event any such cause delays either party's performance of any of its material obligations under this Agreement, the other party may suspend its performance hereunder for the period such delay continues and if any such cause renders impossible or delays for a period of more than six months either party's performance of any of its material obligations under this Agreement, the other party may terminate this Agreement pursuant to Section 5.3, as if a material default had occurred hereunder and shall have the rights and remedies specified in Article V. The party whose performance is delayed on account of any such cause shall promptly notify the other party, and shall exert its best efforts to recommence performance as soon as possible.

6.9 Notices. All notices shall be given in writing either by personal delivery to the party to whom notice is given, or by a commercial overnight courier service, or by registered or certified mail, return receipt requested. The date upon which any such notice is so personally delivered, the date of confirmation of courier delivery, or if the notice is given by registered or certified mail the date of the return receipt, shall be deemed to be the date of such notice, irrespective of the date appearing therein.

If to PI:      POWER INTEGRATIONS, INC.
               477 N. Mathilda Ave.
               Sunnyvale, California 94086
               Attn: President

If to MEC:     MATSUSHITA ELECTRONICS CORPORATION
               1 Kotariyakemachi, Nagaokakyo, Kyoto
               617 JAPAN
               Attn: Director, Sales & Marketing Division

If to MEI:     MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD.
               Semiconductor Marketing & Sales Office for Overseas
               Twin 21 National Tower
               1-61 Shiromi 2-chome, Chuo-ku
               Osaka 540-0111 JAPAN

6.10 Headings. All paragraph captions are for reference only and shall not be considered in construing this Agreement.

6.11 Severability. Any provision or provisions of this Agreement which in any way contravenes a law of any state or country in which the Agreement is in effect shall, in such state or country and to the extent of such contravention of local law, be deemed separable and shall not affect any other provision or provisions of this Agreement.

6.12 Governing Law. This Agreement and the rights and obligations of the parties hereunder shall be governed by, and construed in accordance with, the laws of the United States and the State of California as applied to agreements entered into and to be performed entirely within California between California residents without regard to conflict of laws principles.

6.13 Arbitration. Disputes arising out of or in connection with the validity, interpretation, application, or enforcement of this Agreement or the performance of either party will be discussed and settled amicably by good faith negotiations between PI and MEC/MEI. Any such disputes which cannot be settled amicably and by such good faith negotiations within sixty (60) days after written notice by one party to the other of such inability to amicably settle shall thereafter be settled by binding arbitration. The arbitration shall be conducted in English pursuant to the Rules of Arbitration of the International Chamber of Commerce, which shall be held in San Francisco, California. Any judgement or award rendered in these arbitrations may be entered and enforced by any court of competent jurisdiction and may include, when appropriate, equitable relief.

6.14 Time of Essence. Time is of the essence in the performance of each and every obligation of the parties under this Agreement.

6.15 Originals. This Agreement shall be executed in triplicate, each of which shall be an original, and shall be kept by PI, MEC and MEI, respectively.

6.16 Prior Wafer Foundry Agreement. Purchases undertaken under the Prior Wafer Foundry Agreement shall be governed by the Prior Wafer Foundry Agreement even though those purchases are to be fulfilled after the expiration or termination of that agreement and during the term of this Agreement.

IN WITNESS WHEREOF, PI, MEC and MEI have caused this Agreement to be executed in their names by the duly authorized officers or representatives as of the date first above written.

POWER INTEGRATIONS, INC. MATSUSHITA ELECTRONICS

CORPORATION

By: /s/                             By: /s/

Name:______________________         Name:__________________________________

MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD.

By: /s/

Name:__________________________________

Agreement Year         2000-2001   2001-2002     2002-2003     2003-2004     2004-2005
July 1-June 30
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Lot Size shall be *** Wafers.

* The parties agree that for the term ***to ***, more than *** capacity will be negotiated in good faith.

MEC agrees to provide at least the minimum capacity of *** of the previous year's wafer purchases to provide for PI's future growth.

*** IDENTIFIES REDACTED MATERIAL WHICH HAS BEEN DELETED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

EXHIBIT B

EXCHANGE RATE

Base exchange rate ("F/X_BASE") will be set at ***

A new effective F/X_RATE is only established at the time of placing a purchase order for WAFERSs if the Previous Month's Average daily exchange rate is equal to or greater than *** from the current F/X_RATE. The new F/X_RATE will be set to the Previous Month's Average exchange rate and will remain in effect for at least the month it was established.

The actual WAFERS PURCHASE_PRICE used at the time of order will be calculated by the following formula:

Production WAFERS BASE_PRICE = ***

F/X_BASE = ***

Initial F/X_RATE = ***
PURCHASE_PRICE =
***

Examples:

1) Nominal F/X Rate Example: F/X_RATE = ***:

PURCHASE_PRICE = ***

2) Higher F/X Rate Example: New F/X_RATE = ***:

PURCHASE_PRICE = ***

3) Lower F/X Rate Example: New F/X_RATE = ***:

PURCHASE_PRICE = ***

*** IDENTIFIES REDACTED MATERIAL WHICH HAS BEEN DELETED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND

EXHIBIT 10.28

*** PORTIONS OF THIS EXHIBIT HAVE BEEN DELETED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

This Technology License Agreement ("Agreement") is made on this 29th day of June, 2000 ("Effective Date") by and between POWER INTEGRATIONS, INC., a corporation duly organized and existing under the laws of the State of Delaware, U.S.A., having its principal place of business at 477 North Mathilda Avenue, Sunnyvale, California 94086 ("PI"), and

MATSUSHITA ELECTRONICS CORPORATION, a corporation duly organized and existing under the laws of Japan, by and through its Semiconductor Company having its principal place of business at 1 Kotariyakemachi, Nagaokakyo, Kyoto, Japan ("MEC").

A. PI is the owner and developer of certain integrated circuit process technologies required to manufacture high voltage integrated circuits.

B. PI has no wafer fabrication facility and desires to obtain a cost competitive foundry to manufacture wafers for PI, in order to provide a source for the wafers PI requires, and to assure a long term supply of wafers.

C. MEC has wafer fabrication facilities in Japan and elsewhere and desires full utilization and efficient operation of its wafer fabrication facilities.

D. MEC and PI desire to enhance the types of product available for sale by each of them through complementary and cooperative product development activity.

E. PI and MEC desire that PI license MEC to manufacture wafers for certain integrated circuits, designed by either PI or MEC, using PI process technology, for sale to PI and for sale by MEC as finished products in certain geographic markets on the terms set forth in this Agreement.

PI and MEC, intending to be legally bound, hereby agree as follows:

For the purposes of this Agreement, the following terms shall have the following meanings:

Confidential
*** IDENTIFIES REDACTED MATERIAL WHICH HAS BEEN DELETED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

1.1 "Asian Territory" means the People's Republic of China, Republic of Korea, Democratic People's Republic of Korea, Republic of China, Hong Kong, Mongolia, Philippines, Maldives, Malaysia, Singapore, Indonesia, Thailand, Vietnam, Laos, Kamp, Myanmar (Burma), Nepal, Bhutan, India, Pakistan, Afghanistan, Bangladesh, Srilanka, Brunei, and former Soviet Union.

1.2 "Asian Company" means a corporation organized and existing under the laws of any country in the Asian Territory and operating in such country.

1.3 "Baseline Process" means (a) the specific n-channel power technology (nominally 400V) of PI and (b) extensions of the foregoing to higher voltages, that is more fully described in Appendix A attached to this Agreement, and does not include PI's p-channel process technology and (c) PI's technology, developed during the term of the Agreement, necessary to manufacture high voltage n- channel devices with MOS structure including, but not limited to, MOSFET, IGBT and MCT. Reference to the Baseline Process covers the process, manufacturing method and device structures relevant to (a), (b) and (c) above.

1.4 "Confidential Information" means information relating to the subject matter of this Agreement which is regarded as confidential or proprietary by one party or the other; information received as a consequence of the rendering or receiving of technical assistance under this Agreement and/or the Prior License Agreement; information transferred during meetings between the parties relating to this Agreement and/or the Prior License Agreement which is owned or controlled by either party and which relates to its past, present or future activities with respect to the subject matter of this Agreement if such information is disclosed by one of the parties to the other party in written, graphic, model or other tangible form or in the form of a computer program or in a machine readable medium or any derivation thereof and is designated in writing as confidential by an appropriate legend, together with the name of the party so disclosing it, or, if such information is disclosed orally, which is identified at the time of oral disclosure as confidential and which is reduced to written, graphic, model, or other tangible form, marked as confidential and delivered by the disclosing party within thirty (30) days after such oral disclosure.

1.5 "Japanese Company" means a corporation organized and existing under the laws of Japan and operating in Japan, other than a Subsidiary of a corporation organized and existing under the laws of any other country.

1.6 "Mask Work" and "Semiconductor Chip Product" are defined as those terms are defined in Section 901 of the Semiconductor Chip Protection Act, Title 17, United States Code.

1.7 "Matsushita Group" means MEC, MEI and their respective wholly owned subsidiaries and their respective subsidiaries in which MEC or MEI owns, directly or indirectly, more than fifty percent (50%) of the stock interest, or the maximum percentage of the stock interest that a foreign investor may own, if equal to or less than fifty percent (50%), pursuant to local laws and regulations of any country, as of the Effective Date. (Further, from time to time during the term of the Agreement, the definition of "Matsushita Group" shall be extended to include certain corporations or entities, based upon the request of MEC and the written approval by PI.) It is explicitly understood by the parties that Matsushita Electric Works ("MEW") and all of its subsidiaries, in which MEW owns, directly or indirectly, more than fifty percent (50%) of the stock interest, or the maximum percentage of the stock interest that a foreign

Confidential
*** IDENTIFIES REDACTED MATERIAL WHICH HAS BEEN DELETED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

investor may own, if equal to or less than fifty percent (50%), pursuant to local laws and regulations of any country, as of the Effective Date, shall be included in the definition of "Matsushita Group".

1.8 "MEC Product" means any and every Semiconductor Chip Product designed and released to production by MEC prior to and during the term of this Agreement, incorporating or utilizing at least one of (i) the Baseline Process;
(ii) any Update to the Baseline Process made by PI or MEC; and (iii) any PI Patents; provided, however, that any MEC derivative of a PI Product will be deemed to be a MEC Product only if it is "substantially different in functionality" (as defined below) from the PI Product from which it was derived.

1.9 "PI Product" means any and every Semiconductor Chip Product designed and released to production by PI prior to and during the term of this Agreement, utilizing at least one of (i) the Baseline Process; (ii) any Update to the Baseline Process made by PI or MEC; and (iii) any PI Patents; provided, however, that any PI derivative of a MEC Product will be deemed to be a PI Product only if it is "substantially different in functionality" (as defined below) from the MEC Product from which it was derived.

1.10 "Substantially different in functionality" means that at least 50% of the functional blocks of the derivative circuit are different from the functional blocks of the circuit (the "original circuit") from which the derivative circuit is derived; provided, however, that derivative circuits with only some or all of the following changes will be deemed not to be substantially different in functionality from the original circuits from which they were derived: changes in values of data sheet parameters such as breakdown voltage, RDSON, minimum pulsewidth, dynamic current range, frequency, and current limit; the addition or deletion of features such as latched shutdown and auto restart; and/or making parameters such as frequency or current limit externally programmable.

1.11 "Product" without further qualification means, collectively, PI Product and/or MEC Product.

1.12 "Restricted Product" means any Product covered by the Restricted Patents.

1.13 "Net Sales" shall have the meaning provided in Section 5.3 below.

1.14 (a) "Patents" means letters patent, utility models, rights and privileges to or under letters patent and utility models in existence prior to the expiration or earlier termination of this Agreement, to the extent they relate to the Baseline Process or the design or manufacture of Products made on the Baseline Process or any Updates to the Baseline Process. "Patents" also means such letters patent, utility models, rights and privileges to or under letters patent and utility models that come into existence after the expiration or earlier termination of this Agreement if the same (i) issue on patent applications filed before the expiration or earlier termination of this Agreement, (ii) cover a PI Product (if such letters patent or utility model is owned by MEC) or cover an MEC Product (if such letters patent or utility model is owned by PI) and, (iii) such PI Product or MEC Product, as the case may be, incorporates or is made using Baseline Process Confidential Information disclosed under this Agreement.

(b) "PI's Patents" means Patents owned or controlled by PI during the term of this

Confidential
*** IDENTIFIES REDACTED MATERIAL WHICH HAS BEEN DELETED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Agreement, with respect to which and to the extent to which, and subject to the conditions under which, PI shall have the right to grant licenses, rights and privileges to licensees during the term of this Agreement; it does not include, however, Patents with respect to which a license cannot be granted excepting pursuant to an agreement which requires the payment to a third party of royalties or other consideration measured by the use made of such Patents, unless MEC requests licenses under such Patents and agrees in writing to assume its fair share of such royalties or other consideration. PI represents and warrants that a list of all PI's Patents as of the date of this Agreement is set forth in Appendix B attached hereto.

(c) "Restricted Patents" means all PI Patents relating to Semiconductor circuit design or system level architectures issued or first applied for after January 1, 1994, other than PI Patents relating solely to the Baseline Process and Updates to the Baseline Process such as improvements to high voltage device structures and improvements to semiconductor processing.

(d) "MEC's Patents" means Patents owned or controlled by MEC during the term of this Agreement, with respect to which and to the extent to which, and subject to the conditions under which, MEC shall have the right to grant licenses, rights and privileges to licensees during the term of this Agreement; it does not include, however, Patents with respect to which a license cannot be granted excepting pursuant to an agreement which requires the payment to a third party of royalties or other consideration measured by the use made of such Patents, unless PI requests licenses under such Patents and agrees in writing to assume its fair share of such royalties or other consideration. MEC represents and warrants that a list of all MEC's Patents as of the date of this Agreement is set forth in Appendix C attached hereto.

1.15 "Subsidiary" of a company means a corporation or other legal entity
(i) the majority of whose shares or other securities entitled to vote for election of directors (or other managing authority) is now or hereafter controlled by such company either directly or indirectly; or (ii) which does not have outstanding shares or securities but the majority of whose ownership interest representing the right to manage such corporation or other legal entity is now or hereafter owned and controlled by such company either directly or indirectly; but any such corporation or other legal entity shall be deemed to be a Subsidiary of such company only as long as such control or ownership and control exists.

1.16 "Update" shall mean:

(a) with respect to a Product, a modification or addition made during the term of this Agreement to effect a cost improvement or to correct the design or to improve the specific Product to meet the specifications of such Product or, if no specifications are set forth, to meet data sheet specifications; and

(b) with respect to the Baseline Process, any modification or change, during the term of this Agreement, to the Baseline Process, as defined in
Section 1.3 of this Agreement, which improves or increases the efficiency, speed or yield of the Baseline Process.

Both parties hereby understand that the Updates shall include any and all modifications or changes to materials covered by copyrights and to Mask Works, in connection with the Products or Baseline

Confidential
*** IDENTIFIES REDACTED MATERIAL WHICH HAS BEEN DELETED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Process.

1.17 "Wafers" means silicon wafers for Products.

1.18 "Work" means all works of authorship as defined in Sections 101, 102 and 103 of the Copyright Act, Title 17, United States Code.

1.19 "Prior License Agreement" means that Technology License Agreement entered into between MEC and PI, effective as of June 29, 1990, as amended on June 29, 1995 and as again amended on April 1, 1997.

1.20 "Foundry Agreement" means the Wafer Foundry Agreement signed by the parties on the same date this Agreement is signed.

1.21 MEI means MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., a corporation that owns over fifty percent (50%) of the voting stock of MEC and is duly organized under the laws of Japan, having its principal place of business at Twin 21 National Tower, 1-61 Shiromi 2 Chome, Chuo-ku, Osaka 540-0001 Japan.

Confidential
*** IDENTIFIES REDACTED MATERIAL WHICH HAS BEEN DELETED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

The parties hereby confirm that any information transferred even by the informal meetings and other communications by and between the parties' technical representatives shall fall within the scope of the Confidential Information in the event such information satisfies the definition thereof as contemplated in
Section 1.4.

(a) published or otherwise made available to the public other than by a breach of this Agreement by such party hereto, or

(b) rightfully received by one party hereto from an independent third party without restrictions on disclosure, or

(c) approved in writing for release by the party designating the information as Confidential Information, or

(d) except as otherwise provided in Section 3.5 below, known to or independently developed by the party receiving the Confidential Information without reference to such Confidential Information, or

(e) disclosed within a patent application, the subject matter of which patent application belongs to the receiving party and only with the prior written approval of the disclosing party.

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In the case that the receiving party intends to disclose Confidential Information under the exceptions (a), (b), or (d) above, the receiving party must first give the disclosing party notice (30) thirty days prior to such a disclosure.

(a) In response to a valid order of a court or other government body or any political subdivision thereof; provided, however, that the receiving party shall first immediately notify the other party of such order so as to allow the other party sufficient time to oppose the order and to seek to obtain a protective order requiring that the Confidential Information so disclosed be used only for the purpose for which such protective order is issued; or

(b) otherwise required by law.

(a) Subject to all the terms and conditions of this Agreement, PI hereby grants to MEC, for the term of this Agreement, a nontransferable, non- assignable right and license to use PI's Confidential Information transferred hereunder or under the Prior License Agreement relating to Products, the Baseline Process and Updates, including all such information designated as proprietary or confidential:

(i) to design MEC Products;

(ii) to improve and make derivatives of PI Products;

(iii) to make Wafers and Products at manufacturing facilities of MEC or MEC's Subsidiaries;

(iv) to have Wafers and/or Products manufactured, assembled or tested solely for MEC, provided that

(1) the right granted in this Section 4.1(a)(iv) shall not broaden the scope of any license granted to MEC under this Agreement,

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(2) PI gives its written approval in advance for any such manufacture, assembly or test, which approval shall not be unreasonably withheld,

(3) MEC shall pay, for such Wafers and Products, the royalty due under this Agreement for Wafers and Products, respectively,

(4) the party performing such manufacture, assembly or test agrees in writing to all terms and conditions of this Agreement relating to intellectual property rights and licenses, and territorial and Restricted Product restrictions, and;

(5) MEC shall be the insurer and guarantor of such party's full observance of such terms and conditions;

(v) to use, sell, lease or otherwise dispose of:

(1) Products to the Matsushita Group worldwide;

(2) Products to any and all companies established or to be established under the laws of Japan;

(3) Products to any and all Subsidiaries of Japanese Companies in the Asian Territory;

(4) Products other than Restricted Products to Asian Companies in the Asian Territory; and

(vi) to sell Wafers and Products to PI.

This license will be exclusive to the extent provided in Section 4.1(e) below; otherwise it is nonexclusive.

(b) Subject to all the terms and conditions of this Agreement, PI hereby grants to MEC, for the term of this Agreement, a nontransferable, non- assignable, indivisible right and license under the PI Patents:

(i) to design MEC Products;

(ii) to improve and make derivatives of PI Products;

(iii) make Wafers and Products at manufacturing facilities of MEC or MEC's Subsidiaries;

(iv) to have Wafers and/or Products manufactured, assembled or tested solely for MEC, provided that

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(1) the right granted in this Section 4.1(b)(iv) shall not broaden the scope of any license granted to MEC under this Agreement,

(2) PI gives its written approval in advance of any such manufacture, assembly or test, which approval shall not be unreasonably withheld,

(3) MEC shall pay, for such Wafers and Products, the royalty due under this Agreement for Wafers and Products, respectively,

(4) the party performing such manufacture, assembly or test agrees in writing to all terms and conditions of this Agreement relating to intellectual property rights and licenses, and territorial and Restricted Product restrictions, and;

(5) MEC shall be the insurer and guarantor of such party's full observance of such terms and conditions;

(v) to use, sell, lease or otherwise dispose of:

(1) Products to the Matsushita Group worldwide;

(2) Products to any and all companies established or to be established under the laws of Japan;

(3) Products to any and all Subsidiaries of Japanese Companies in the Asian Territory;

(4) Products other than Restricted Products to Asian Companies in the Asian Territory; and

(vi) to sell Wafers and Products to PI.

This license will be exclusive to the extent provided in Section 4.1(e) below; otherwise it is nonexclusive.

(c) MEC will not sell, lease or otherwise dispose of Products to any companies established under the laws of countries other than Japan, whether through the international procurement offices of such companies or otherwise unless, for Products other than Restricted Products, MEC:

(i) is advised by the customer that; and

(ii) has a reasonable basis to believe that , and

(iii) does actually believe that

the final destination of such Products is an Asian Company in the Asian Territory.

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(d) Notwithstanding anything to the contrary contained herein, in case Japanese Companies wish to procure Products from MEC outside the territories where MEC is allowed to sell Products under this Agreement and PI is unable to satisfy such customer's Product quality and volume requirements, both parties shall negotiate the terms and conditions under which MEC shall be entitled to supply Products other than Restricted Products to such customers.

(e) During the term of this Agreement PI will not grant to any companies established or to be established under the laws of Japan and any Subsidiaries of Japanese Companies worldwide, other than MEC, a whole or any part of the rights and licenses which MEC is granted hereunder, including, but not limited to, the right to use the Baseline Process, except to provide for production wafers, parts or other services solely for PI. Should MEC fail to comply with the terms of this Agreement in any material respect, PI will be entitled, subject to advance written notice to MEC and consultation with MEC, in case such failure should not be cured within sixty (60) days after PI's written notice, to grant any such rights and licenses to other companies established or to be established under the laws of Japan, without any infringement of MEC's proprietary rights.

(f) MEC shall not have the right to sell, lease or otherwise dispose of Wafers or Products as die, wafers or packaged units for purposes of resale by any third party as Semiconductor Chip Products under any third party's own brand label or marking.

(g) MEC and any other licensees under this Agreement shall not have any rights under this Agreement or the licenses granted herein to use any Confidential Information of PI or Updates of PI delivered to MEC on or after June 29, 1995, or any PI Patents first owned or controlled by PI on or after June 29, 1995, to design, develop, manufacture, use, sell, lease or otherwise dispose of any products for any application for energizing light.

(h) Although MEC's Subsidiaries are not otherwise granted licenses under this Agreement, any MEC Subsidiary outside Japan that has manufactured or assembled Products as permitted by this Section 4.1 may make, sell, lease or otherwise dispose of such Products to the same extent MEC is licensed to do so under Sections 4.1 and 4.3 of this Agreement. MEC shall assure that each MEC Subsidiary that makes, sells, leases or otherwise disposes of Products pursuant to this Section 4.1(h) does so in compliance with all applicable provisions of this Agreement. MEC shall be responsible for any noncompliance by any MEC Subsidiary to the same extent as if MEC itself were not in compliance.

(a) Subject to all the terms and conditions of this Agreement, MEC hereby grants to PI a perpetual, paid-up, worldwide, nonexclusive, non- assignable (except as otherwise provided in Section 9.4 below), nontransferable right and license to use MEC's Confidential Information transferred hereunder or under the Prior License Agreement relating to Products, the Baseline Process, and Updates, including all such information designated as proprietary or confidential, to design, make and have made Products, other than MEC Products, and to use, sell, lease or otherwise dispose of such Products.

(b) Subject to all the terms and conditions of this Agreement, MEC hereby grants to PI a perpetual, paid-up, worldwide, nonexclusive, non- assignable (except as otherwise provided in Section 9.4

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below), nontransferable, indivisible right and license under the MEC Patents to make, have made, use, sell, lease or otherwise dispose of Products, other than MEC Products.

(c) Subject to all of the terms and conditions of this Agreement, MEC hereby grants to PI, for the term of this Agreement, a worldwide, nonexclusive, non-assignable (except as otherwise provided in Section 9.4 below), nontransferable right and license to use MEC's Confidential Information transferred hereunder or under the Prior License Agreement relating to Products, the Baseline Process, and Updates, including all such information designated as proprietary or confidential, to make and have any companies other than Japanese Companies make MEC Products and derivatives of MEC Products and to use, sell, lease or otherwise dispose of such MEC Products and derivatives of MEC Products worldwide.

(d) Subject to all of the terms and conditions of this Agreement, MEC hereby grants to PI, for the term of this Agreement, a worldwide, nonexclusive, non-assignable (except as otherwise provided in Section 9.4 below), nontransferable, indivisible right and license under the MEC Patents to make, have any companies other than Japanese Companies make, use, sell, lease or otherwise dispose of MEC Products and derivatives of MEC Products.

(e) PI shall not have any rights under this Agreement or the licenses granted herein to use any Confidential Information of MEC or Updates of MEC delivered to PI on or after June 29, 1995, to design, develop, manufacture, use, sell, lease or otherwise dispose of any products for any application for energizing light.

(f) Although PI's Subsidiaries are not otherwise granted licenses under this Agreement, any PI Subsidiary outside Japan may design, make, sell, lease or otherwise dispose of Products to the same extent PI is licensed to do so under Sections 4.2 and 4.3 of this Agreement. PI shall assure that each PI Subsidiary that designs, makes, sells, leases or otherwise disposes of Products pursuant to this Section 4.2(f) does so in compliance with all applicable provisions of this Agreement. PI shall be responsible for any noncompliance by any PI Subsidiary to the same extent as if PI itself were not in compliance.

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(a) MEC shall pay PI royalties, in Japanese yen on all units of Product made by MEC and MEC's Subsidiaries and used, leased, sold or otherwise disposed of by MEC and MEC's Subsidiaries, other than to PI, at the following rates based upon the Net Sales of such Products:

                                                           Royalty Rate
                                                           ------------

During the term of this Agreement                          ***

For four years after the term of this Agreement.           ***

(b) Product shall be considered as used, sold, leased or disposed of, as the case may be, when billed out, delivered, shipped or mailed to a customer or lessee, or when first used or first set aside for future use by the Matsushita Group, whichever shall first occur. Product scrapped and destroyed shall not be considered as Product manufactured under this Agreement.

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                                                        Royalty Rate
                                                        ------------

During the term of this Agreement                       ***

For four years after the term of this Agreement.        ***

(b) MEC Product shall be considered as used, sold, leased or disposed of, as the case may be, when billed out, delivered, shipped or mailed to a customer or lessee, or when first used or first set aside for future use by PI or any of its Subsidiaries, whichever shall first occur. MEC Product scrapped and destroyed shall not be considered as Product manufactured under this Agreement.

(a) "Net Sales" of Product shall be determined as follows:

(i) In respect of Product in the form of packaged, tested product or as die or wafers sold in normal, arm's length, commercial transactions between parties which are not in affiliation, the Net Sales shall be the aggregate of the genuine selling prices at which customers are billed in the usual course of business for such Product, without any deductions or credits other than those determined in accordance with Section 5.3(b), if any.

(ii) In respect to Product in the form of packaged, tested product or as die or wafers used, leased or otherwise disposed of, or sold otherwise than in normal, arm's length, commercial transactions between parties which are not in affiliation, the Net Sales shall be the aggregate of the genuine selling prices of the same quantities of similar or substantially similar Product which are sold in normal, arm's length, commercial transactions between parties which are not in affiliation, or, if there be no similar or substantially similar Product so sold, then the fair market value thereof, without any deductions other than those determined in accordance with Section 5.3(b), if any.

(b) In determining its Net Sales, a party may deduct from the genuine selling price, equivalent thereof or fair market value, as the case may be, of Product, the amount of any sales, excise or other taxes, as well as any packing, freight and transportation, payable by the party in respect of any such Product to the extent that any such amount is included in the genuine selling price, equivalent thereof or fair market value, as the case may be, of such Product and is billed separately by the party to its customers. Each party shall be allowed to take as a credit in determining Net Sales, (i) customary trade and quantity discounts actually allowed, and (ii) allowances or credits to customers on account of rejections or returns.

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(c) MEC warrants that sales of the Products from MEC to any company in the Matsushita Group shall be priced as though such company was a third party customer and that the selling prices between MEC and such company will be determined in normal arm's length transaction.

(a) Within two (2) months after, and as of March 31, June 30, September 30 and December 31 of each year during the period MEC is obligated to pay royalties pursuant to this Agreement, MEC shall furnish PI with a written statement certified by an officer of MEC specifying (i) the number of units of each kind of Product used, sold, leased, or otherwise disposed of by MEC during the quarter ending such March 31, June 30, September 30 and December 31, and with respect to which compensation is payable under this Agreement, (ii) the aggregate of the Net Sales of each such kind of such Product, (iii) the total net compensation payable for reach such kind of such Product pursuant to this Agreement. At the time of furnishing such statements, MEC shall also make the payments prescribed therefor in Section 5.1.

(b) Within two (2) months after, and as of, each March 31, June 30, September 30 and December 31 of each year during the period PI is obligated to pay royalties pursuant to this Agreement, PI shall furnish MEC with a written statement certified by an officer of PI specifying (i) the number of units of each kind of MEC Product under PI Label used, sold, leased, or otherwise disposed of by PI during the quarter ending such March 31, June 30, September 30 and December 31, and with respect to which compensation is payable under this Agreement, (ii) the aggregate of the Net Sales of each such kind of such Product, (iii) the total net compensation payable for each such kind of such Product pursuant to this Agreement. At the time of furnishing such statements, PI shall also make the payments prescribed therefor in Section 5.2.

(c) A similar statement shall be rendered and payment made within two
(2) months after, and as of, the date of any termination of this Agreement covering the period from the end of that covered by the last preceding statement to such date of termination. Such statement and payment shall include all Product manufactured prior to such date of termination but not covered by prior statements and payments, which Product shall be considered as sold as of such date of termination.

(d) In the event that any payments under this Agreement by either party are taxable by the government of Japan/United States, whichever applicable, and such tax is required to be withheld from the payment to the other party, the party to make the payment shall deduct such amount from the payment to the receiving party to the extent permitted under U.S./Japan Income Tax Convention and shall pay such tax on behalf of the receiving party. In such event, the party to make payment shall obtain and transmit to the receiving party the proper tax receipt evidencing the payment of such tax.

(e) Each party shall keep, notwithstanding any termination or the expiration of this Agreement, true and accurate records, files and books of account containing all the data reasonably required for the full computation and verification of the amounts to be paid and the information to be given in the statements provided hereunder. Each party shall, during usual business hours, permit certified public accountants designated by the other party, at the requesting party's expense and by prior arrangement, and not more than once a year, adequately to inspect the same for the sole purpose of

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determining the amounts payable pursuant to this Article V. Such record need not be retained by each party beyond three (3) years from the date on which the royalties hereunder becomes due.

(f) MEC shall keep, notwithstanding any termination or the expiration of this Agreement, true and accurate records, files and books of account containing all the data reasonably required for the verification of compliance of the territorial restrictions of the sale of MEC Products and Restricted Products by MEC for a period of three (3) years from such sale. MEC guarantees that MEI shall keep true and accurate records, files and books of account, of the same nature, under the same conditions, and for the same period, all as set forth in the foregoing sentence. Upon PI's or MEC's determination that a violation of said territorial restrictions has taken place, MEC shall provide to PI the relevant documents, including those of MEI, identifying the likely source and MEC's plan to immediately cure such violation and prevent further violations.

5.5 PI and MEC will each exert reasonable efforts to assert their rights under law to protect the Baseline Process against infringement by others.

(a) Nothing contained in this Agreement shall be construed as (i) a warranty or representation by either party as to the validity or scope of any Patents; or (ii) a warranty or representation that any manufacture, sale, lease, use, or other disposition hereunder will be free from infringement of Patents other than those under which, and to the extent to which, licenses are granted hereunder; or (iii) a warranty or representation that any product can be manufactured without infringing the patents or other proprietary rights of third parties; or (iv) an agreement to bring or prosecute actions or suits against third parties for infringement or conferring any right to bring or prosecute actions or suits against third parties for infringement; or (v) conferring any right to use in advertising, publicity, or otherwise, any trademark, trade name or name or any contraction, abbreviation or simulation thereof, of either party (provided, however, that PI may identify MEC as a foundry and second source for PI's products); or (vi) conferring

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by implication, estoppel or otherwise upon any party licensed hereunder, any license or other right under any Patent or other right except the licenses and rights expressly granted hereunder; or (vii) a warranty that one party shall be able to make successfully any products using the other party's technical information; or (viii) that the receiving party will be able to use the technology without infringing patents or other rights of third parties.

(b) EXCEPT AS OTHERWISE EXPRESSLY STATED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY AS TO THE ACCURACY, SUFFICIENCY OR SUITABILITY FOR THE OTHER PARTY'S USE OF ANY TECHNICAL INFORMATION OR ASSISTANCE PROVIDED HEREUNDER; NOR FOR THE QUALITY OF ANY PRODUCT OR PROCESS MADE HEREUNDER..

(a) Each party hereby assures the other that it will not, without prior authorization, if required, of the Office of Export Administration, U.S. Department of Commerce, 14th and Constitution Ave., N.W., Washington, D.C. 20230, export or re-export (as defined in Section 779.1 (b)(c) of the Export Administration Regulations "Regulations" and any amendments thereto) the technical data covered thereby. PI shall inform MEC in writing of the technical data restricted under such Regulations as well as its restricted country group upon PI's disclosure or provision of technical information.

(c) Each party shall not export the Product to any country designated as "Countries against which the sanctions should be taken" by certain resolutions of the Security Council of the United Nations regarding the sanctions against certain countries, as long as such resolutions remain valid and effective. For purposes of this Agreement, any re-export in violation of such resolutions by a customer of either MEC or PI will not be considered to be an export in violation of such resolutions by MEC or PI, as the case may be, so long as MEC or PI, as the case may be, did not knowingly participate in such re- export.

(d) During and after the term of this Agreement, to the extent the same practically is within its control, each party shall not sell, lease or otherwise dispose of, directly or indirectly, any Product to customers whom such party knows intend to make use of the Product for Military Purposes (defined herein below). For the purpose of this Agreement, "Military Purposes" means the design, development, manufacture or use of any weapons, including without limitation nuclear weapons, biological weapons, chemical weapons and missiles.

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(e) In the event either party violates the provision of this Section 7, the non-violating party shall have the right to require reasonable written assurances from the violating party that such violation, whether or not past incidents of violation can be cured, will not continue in the future, and if the violating party does not deliver such assurances to the non-violating party promptly after its request, the non-violating party may suspend the performance of its obligations under this Agreement until such time as it receives such assurances, without any prejudice to the rights and remedies which the non- violating party may have under this Agreement. In the event that such assurance is not delivered to the non-violating party within three (3) months after request, the non-violating party shall have the right to terminate forthwith, without any prejudice to the rights and remedies which it may have hereunder, this Agreement, by giving a written notice to the violating party.

If this Agreement has not earlier terminated, the parties agree to negotiate in good faith, beginning on the fourth (4th) anniversary of the Effective Date of this Agreement, for the continuation on mutually agreeable terms of the licenses, royalty arrangements, manufacturing commitments and other terms and conditions included in this Agreement and the Foundry Agreement.

(a) Except as otherwise set forth in this section, if either party shall at any time default, without any material causative fault on the part of the other party, by failing to substantially perform any material provision of this Agreement or the Foundry Agreement, and such default shall not be cured within sixty (60) days after written notice to it from the other party specifying the nature of the default, the non-defaulting party shall have the right to terminate this Agreement and the licenses it has granted under the Prior License Agreement, at any time thereafter by giving written notice of termination to the other party, and upon the giving of such notice of termination this Agreement and such licenses shall terminate immediately. Subject to Section 8.5(b)(ii), the licenses and rights granted to the non- defaulting party under this Agreement shall survive such termination. The party receiving notice shall have the right to cure any such default up to the date of termination. In the event either party defaults by failing to substantially perform any material provision of this Agreement or the Foundry Agreement, the other party shall have the right to suspend further transfers of information, including Updates, by it and shall not be obligated to resume such transfers until such default has been cured.

(b) Each party shall have the right to terminate this Agreement and the licenses it has granted under the Prior License Agreement, by giving written notice of termination to the other at any time upon or after, (i) the filing by the other party of a petition in bankruptcy or insolvency, or (ii) upon or

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after the filing of any voluntary or involuntary petition or answer seeking reorganization, readjustment or arrangement of the other party's business under any law relating to bankruptcy or insolvency, or (iii) upon or after the appointment of a receiver for all or substantially all of its property, or (iv) upon or after the making by the other party of any assignment or attempted assignment for the benefit of creditors, or (v) upon or after 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; and this Agreement and such licenses shall terminate automatically on the thirtieth (30th) day after such notice of termination is given, without further notice, demand or opportunity to cure. Subject to Section 8.5(b)(ii), the licenses and rights granted to the non- defaulting party under this Agreement shall survive such termination.

(c) The following articles and sections shall survive any expiration or termination of this Agreement: Articles III, V, VI, VII, and Sections 9.11, 9.12, 9.13 and 9.14.

(a) Upon expiration of this Agreement, all rights and obligations of the parties hereunder shall cease and determine, except for rights and obligations which, by the terms of this Agreement, continue after expiration or earlier termination of this Agreement and except that the expiration of this Agreement shall not release either party from any of its obligations accrued hereunder prior to the time expiration becomes effective.

(b) Without limiting the generality of the foregoing, upon expiration of this Agreement, the rights and licenses granted by the parties to each other for the term of this Agreement in Article IV hereof shall terminate immediately; provided, however, that:

(i) subject to the continuing payment of royalties set forth in
Section 5.1, MEC shall retain the licenses granted by PI under Article IV; and

(ii) subject to the continuing payment of royalties set forth in
Section 5.2, PI shall retain the licenses granted by MEC under Article IV.

If the royalty amounts set forth in this Section 8.4(b) are paid in full at the end of four (4) years after the expiration of this Agreement ("Additional Term"), all royalty obligations shall be deemed fully paid up.

Upon the expiration of the Additional Term, so long as a party has performed its respective obligations hereunder during such Additional Term, including payment of all royalties, the rights and licenses granted to such party under Article IV of the Agreement shall be fully paid-up and such party shall have free right to utilize any information furnished and rights granted under this Agreement on or before its expiration, without any further payments, subject to continuing confidentiality obligations as provided in Article III of this Agreement and compliance with the terms of the rights and licenses granted under Article IV of the Agreement, including, without limitation, the territorial and Restricted Product restrictions on such rights and licenses.

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(c) Notwithstanding the final paragraph of Section 8.4(b), it is confirmed by the parties that, after the expiration of this Agreement, neither party shall be obligated to continue to furnish any information to the other party.

(a) Upon termination of this Agreement, all rights and obligations of the parties hereunder shall cease and determine as from such date of termination, except for rights and obligations which, by the terms of this Agreement, continue after such termination and except that no termination of this Agreement shall release either party from any of its obligations accrued hereunder but not yet performed prior to the time such termination becomes effective.

(b) Notwithstanding the above Section 8.5(a);

(i) in the event of termination of this Agreement pursuant to Section 8.3 above, the rights and licenses granted to the defaulting party under Article IV shall terminate upon such termination, provided, however, that the defaulting party shall retain the rights to manufacture, use, sell or otherwise dispose of the units of Products which have been ordered by its customers or any inventory of the Products at the time of termination subject to the royalty payment pursuant to Article V hereof.

(ii) in the event of termination of this Agreement pursuant to Section 8.3, above, the rights and licenses granted to the non-defaulting party under Article IV of the Agreement shall become perpetual, fully paid-up and irrevocable upon payment of all royalties that would have been owed if such termination had not occurred.

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(a) This Agreement, and rights and obligations herein, shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, provided that except as set forth below neither party shall assign this Agreement or any of its rights hereunder without the prior written consent of the other Party.

(b) Notwithstanding any other provision of the Agreement, PI may without the prior consent of MEC assign all of its rights under this Agreement to a purchaser of all or substantially all of PI's stock or assets or to a third party participating in a merger or other corporate reorganization in which PI is a constituent corporation. Within 180 days after such assignment, if the assignee is (i) a competitor of MEC, and (ii) of comparable size to MEC or larger, then either MEC or PI's assignee may elect to have this Agreement be deemed to have expired and to have the provisions of Section 8.4(b) take effect 180 days after written notice to the other party of such election.

(c) As a condition of any assignment of this Agreement or any of the rights granted hereunder, any successor shall expressly assume in writing the performance of all terms and conditions of this Agreement to be performed by the assigning party including such party's obligations hereunder with respect to the protection of Confidential Information. The successor's name shall thereafter automatically be substituted for the name of the assigning party in this Agreement.

(a) creating any partnership, joint venture or other similar relationship between PI and MEC; or

(b) obligating either party to commercially produce or to continue to commercially produce, any solid state device of any type whatsoever, or any parts or components thereof (except as provided in the Foundry Agreement).

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the other party may suspend its performance hereunder for the period such delay continues and if any such cause renders impossible or delays for a period of more than six months either Party's performance of any of its material obligations under this Agreement, the other party may terminate this Agreement pursuant to Section 8.3, as if a material default had occurred hereunder and shall have the rights and remedies specified in Article VIII. The party whose performance is delayed on account of any such cause shall promptly notify the other party, and shall exert its best efforts to recommence performance as soon as possible.

If to PI:      POWER INTEGRATIONS, INC.
               477 N. Mathilda Ave.
               Sunnyvale, California 94086
               Attn: President

If to MEC:     MATSUSHITA ELECTRONICS CORPORATION
               1 Kotariyakemachi, Nagaokakyo,
               Kyoto 617 JAPAN
               Attn: Director, Discrete Device Division

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conditions of the Prior License Agreement remain licensed under this Agreement.

IN WITNESS WHEREOF, PI and MEC have caused this Agreement to be executed in their names by the duly authorized officers or representatives as of the date first above written.

POWER INTEGRATIONS, INC.                MATSUSHITA ELECTRONICS CORPORATION


By: /s/______________________________   By:  /s/_______________________________

Name: _______________________________   Name: _________________________________

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1.  Material specification
--------------------------

       Crystal type                    :      ***
       Resistivity                     :      ***
       Thickness                       :      ***

       Diffusion                       :      ***
       preclean

       Etch rate                       :      ***


2.  Blocking oxidation
----------------------

       Diffusion
       preclean
       Blocking                               ***
       oxidation
       Step                                   ***

       Push in                                ***
       Anneal                                 ***
       Ramp to                                ***
       Oxidation                              ***
       Oxidation                              ***
       Ramp to                                ***
       *Time adjusted as required to maintain specified oxide thickness.
       Visual inspect

3.  N-Well Mask (CD's measured)
-------------------------------

       Microscope inspect

4.  N-Well Etch
---------------

       Resist bake                     :      ***
       Microscope inspect
       Wet etch                        :      ***

       Plasma resist clean
       Resist clean                    :      ***
       CD's measured

5.  Well oxidation
------------------

       Diffusion preclean
       Well oxidation                         ***
       Step                                   ***
                                              ***
       Push in                                ***
       Ramp to                                ***
       Oxidation                              ***
       Ramp to                                ***
       *Time adjusted as required  to maintain specified oxide thickness.
       Visual inspect

6.  Phosphorus N-Well implant
-----------------------------

       Dose                            :      ***
       Energy                          :      ***
       Specie                          :      ***
       Cleaning                        :      ***


7.  N-Well drive
----------------

       Diffusion
       preclean
       Step                                   ***

       Push in                                ***
       Ramp to                                ***
       Anneal                                 ***
       Ramp to                                ***

8.  Well oxidation etch
-----------------------

       Wet etch                        :      ***
       Microscope inspect

9.  Implant oxidation
---------------------

       Diffusion preclean
       Implant oxidation                      ***

       Step                                   ***

       Push in                                ***
       Ramp to                                ***
       Oxidation                              ***
       Oxidation                              ***
       Anneal                                 ***
       Ramp to                                ***
       *Time adjusted as required to maintain specified oxide thickness.
       Visual  inspect

10.  P-Top Mask (CD's  measured)
--------------------------------

       Microscope
       inspect

11.  Boron P-Top implant
------------------------

       Dose                            :      ***
       Energy                          :      ***
       Specie                          :      ***
       Plasma resist clean
       Resist clean                    :      ***
       Microscope inspect


12.  Oxide strip
----------------

       Oxide strip                     :      ***
       Microscope inspect

13.  Regrow oxidation
---------------------

       Diffusion
       preclean
       Regrow oxidation                       ***
       Step                                   ***

       Push in                                ***
       Ramp to                                ***
       Oxidation                              ***
       Ramp to                                ***

*Time adjusted as required to maintain specified oxide thickness. Visual inspect

Nitride deposition(LP-                 ***
CVD)
Temperature                     :      ***

NH3                             :      ***
SiH2Cl2                         :      ***

*Time adjusted as required to maintain specified Nitride thickness. Visual inspect

Microscope inspect

Nitride etch (Plasma etcher)
Microscope inspect
Plasma resist
Clean
Resist clean : *** CD's measured

       Microscope inspect

18.  Oxide etch
---------------

       Resist                          :      ***
       bake
       Microscope inspect
       Wet etch                        :      ***
       Resist bake                     :      ***


19.  BF2 field implant
----------------------

       Dose                            :      ***
       Energy                          :      ***
       Specie                          :      ***

20.  Boron Punchthrough implant
-------------------------------

       Dose                            :      ***
       Energy                          :      ***
       Specie                          :      ***
       Plasma resist clean
       Resist clean                    :      ***
       Microscope inspect

21.  Field oxidation
--------------------

       Diffusion preclean
       Field oxidation                        ***
       Step                                   ***

       Push in                                ***
       Anneal                                 ***
       Oxidation                              ***
       Ramp to                                ***
       Anneal                                 ***
       Ramp to                                ***
       Oxidation                              ***
       Oxidation                              ***
       Ramp to                                ***
       *Time adjusted as required to maintain specified oxide thickness.
       Visual  inspect

22.  Phosphoric Acid Nitride strip
----------------------------------

       Oxide dip                       :      ***
       Phosphoric Acid                 :      ***
       strip
       Microscope inspect
       Oxide dip                       :      ***
       Microscope inspect


23.  Sacrificial oxidation
--------------------------

       Diffusion preclean
       Sacrificial oxidation                  ***
       Step                                   ***

       Push in                                ***
       Anneal                                 ***
       Oxidation                              ***

       Oxidation                              ***
       Oxidation                              ***
       Ramp to                                ***
       Anneal                                 ***
       Ramp to                                ***
       *Time adjusted as required to maintain specified oxide thickness.
       Visual inspect

24.  P-Buried Mask (CD's measured)
----------------------------------

       Microscope inspect

25.  Boron P-Buried implant
---------------------------

       Dose                            :      ***
       Energy                          :      ***
       Specie                          :      ***
       Tilt:                           :      ***
       Plasma resist clean
       Resist clean                    :      ***
       Microscope inspect

26.  Vt implant Mask (no CD's measured)
---------------------------------------

       Microscope inspect

27.  Boron Gate implant
-----------------------

       Dose                            :      ***
       Energy                          :      ***
       Specie                          :      ***
       Plasma resist clean
       Resist clean                    :      ***
       Oxide dip                       :      ***
       Microscope inspect

28.  Gate oxidation
-------------------

       Diffusion preclean
       Gate oxidation                         ***
       Step                                   ***

       Push in                                ***
       Anneal                                 ***

       Oxidation                              ***
       Oxidation                              ***
       Oxidation                              ***
       Ramp to                                ***
       Anneal                                 ***
       Ramp to                                ***
       *Time adjusted as required to maintain specified oxide thickness.
       Visual inspect

29.  Poly deposition
--------------------

       Polysilicon deposition(LP-CVD)                      ***
       Temperature                     :      ***

       SiH4                            :      ***
       Visual inspect

29A. Backside Etch
------------------

       Photoresist spin
       Resist bake                                         ***
       Backside poly etch        ***
       Backside oxide dip     ***
       Plasma Resist
       Clean
       Resist Clean Sulfuric/peroxide

30.  Poly dope
--------------

       Diffusion preclean
       Poly dope                       ***
       Step                            ***

       Push in                         ***
       Ramp to                         ***
       Doping                          ***
       Ramp to                         ***
       *Time adjusted as required to maintain specified Poly resistivity.
       Visual inspect
       Oxide dip                       ***
       Cleaning                        ***

       ***
       Microscope inspect

32.  Poly etch
--------------

       Plasma Poly etch                ***
       Microscope inspect
       Plasma resist clean
       Resist clean                    :      ***
       Oxide dip                       :      ***
       Microscope inspect
       CD's measured

33.  Implant oxidation
----------------------

       Diffusion preclean
       Implant oxidation                      ***
       Step                                   ***

       Push in                                ***
       Anneal                                 ***
       Oxidation                              ***
       Anneal                                 ***
       *Time adjusted as required to maintain specified oxide thickness.
       Visual inspect

34.  N+ Mask (no CD's measured)
-------------------------------

       Microscope inspect

35.  Arsenic Source/Drain implant
---------------------------------

       Dose                            :      ***
       Energy                          :      ***
       Specie                          :      ***
       Plasma resist clean
       Resist clean                    :      ***

36.  P+ Mask (no CD's measured)
-------------------------------

       Microscope inspect

37.  Boron Source/Drain implant
-------------------------------

       Dose                            :      ***
       Energy                          :      ***
       Specie                          :      ***
       Plasma resist clean
       Resist clean                    :      ***



38.  Source/Drain re-oxidation
------------------------------

       Diffusion preclean
       Source/Drain re-oxidation              ***
       Step                                   ***

       Push in                                ***
       Anneal                                 ***
       Oxidation                              ***
       Ramp to                                ***
       Anneal                                 ***
       Ramp to                                ***
       *Time adjusted as required to maintain specified oxide thickness.
       Visual inspect

39.  Glass deposition
---------------------

       LTO deposition(LP-CVD)                 ***
       Temperature                     :      ***

       SiH4                            :      ***
       MIX gas                         :      ***
       O2                              :      ***
       He                              :      ***
       Visual inspect
       Scrubber cleaning

40.  Densify
------------

       Step                                   ***

       Push in                                ***
       Ramp to                                ***
       Densify                                ***
       Ramp to                                ***


41.  Contact Mask (CD's measured)
---------------------------------

       Microscope inspect

42.  Contact etch
-----------------

       Plasma flush
       Resist
       bake                            :      ***
       Microscope inspect
       Oxide etch                      :      ***
       Resist bake                     :      ***
       Oxide thickness
       measured
       Plasma etch
       (CHF3)
       Oxide thickness
       measured
       Microscope inspect
       Resist                          :      ***
       bake
       Oxide etch                      :      ***
       Plasma resist clean
       Resist clean                    :      ***
       Microscope inspect
       CD's measured

43.  AL/Si/Cu Sputter
---------------------

       Pre-Sputter clean               :      ***
       Wafer bake                      :      ***
       Aluminum                        :      ***
       Visual inspect

44.  Metal Mask (CD's measured)
-------------------------------

       Microscope inspect

45.  Metal etch
---------------

       Resist                          :      ***
       bake

Plasma metal etch on PE8300 using BCl3 Microscope inspect

       CD's measured

46.  AL sinter
--------------

       Step                 ***

       Push in              ***
       Sinter               ***

       Plasma Nitride                         ***
       deposition
       Refractive index                :      ***
       Visual inspect

48.  Pad Mask (no CD's measured)
--------------------------------

       Microscope inspect

49.  Pad etch
-------------

       Plasma etch
       (CF4/O2)
       Microscope inspect
       Plasma resist clean
       Microscope inspect

50.  Nitride sinter
-------------------

       Step                                   ***

       Push in                                ***
       Sinter                                 ***

53.  Backgrind
--------------

       Tape coating                    :      ***
       Backgrind                       :      ***
       Peeling tape off
       Water cleaning
       Visual inspect

Confidential
***IDENTIFIES REDACTED MATERIAL WHICH HAS BEEN DELETED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

1.  Material specification
--------------------------

       Crystal type                           ***
       Resistivity                            ***
       Thickness                              ***

       Diffusion preclean                     ***


       Etch rate                              ***


2.  Blocking oxidation
----------------------

       Diffusion preclean
       Blocking oxidation                     ***
       Step                                   ***

       Push in                                ***
       Anneal                                 ***
       Ramp to                                ***
       Oxidation                              ***
       Oxidation                              ***
       Ramp to                                ***
       *Time adjusted as required to maintain specified oxide thickness.
       Visual inspect

3.  N-Well Mask (CD's measured)
-------------------------------

       Microscope inspect

4.  N-Well Etch
---------------

       Resist
       bake                            :      ***
       Microscope inspect
       Wet etch                        :      ***
       Plasma resist clean

       Resist clean                    :      ***
       CD's measured

5.  Well oxidation
------------------

       Diffusion preclean
       Well oxidation                         ***
       Step                                   ***

       Push in                                ***
       Ramp to                                ***
       Oxidation                              ***
       Ramp to                                ***
       *Time adjusted as required to maintain specified oxide thickness.
       Visual inspect

6.  Phosphorus N-Well implant
-----------------------------

       Dose                            :      ***
       Energy                          :      ***
       Specie                          :      ***
       Cleaning                        :      ***

7.  N-Well drive
----------------

       Diffusion preclean
       Step                                   ***

       Push in                                ***
       Ramp to                                ***
       Anneal                                 ***
       Ramp to                                ***

8.  Well oxidation etch
-----------------------

       Wet etch                        :      ***
       Microscope inspect

9.  Implant oxidation
---------------------

       Diffusion preclean
       Implant oxidation                      ***
       Step                                   ***

Push in                                ***
Ramp to                                ***
Oxidation                              ***
Oxidation                              ***
Anneal                                 ***
Ramp to                                ***

*Time adjusted as required to maintain specified oxide thickness. Visual inspect

       Dose                            :      ***
       Energy                          :      ***
       Specie                          :      ***
       Plasma resist clean
       Resist clean                    :      ***
       Microscope inspect

12.  P-Top drive
----------------

       Diffusion preclean
       Step                                   ***

       Push in                                ***
       Anneal                                 ***
       Ramp to                                ***
       Anneal                                 ***
       Ramp to                                ***

13.  Oxide strip
----------------

       Oxide strip                     :      ***
       Microscope inspect

14.  Regrow oxidation
---------------------

       Diffusion preclean
       Regrow oxidation                       ***
       Step                                   ***

       Push in                                ***
       Ramp to                                ***
       Oxidation                              ***
       Ramp to                                ***
       *Time adjusted as required to maintain specified oxide thickness.
       Visual inspect

15.  Nitride deposition
-----------------------

       Nitride deposition(LP-                 ***
       CVD)
       Temperature                     :      ***

       NH3                             :      ***
       SiH2Cl2                         :      ***

*Time adjusted as required to maintain specified Nitride thickness. Visual inspect

Microscope inspect

Nitride etch (Plasma etcher)
Microscope inspect
Plasma resist Clean
Resist clean : *** CD's measured

       Microscope inspect

19.  Oxide etch
---------------

       Resist
       bake                            :      ***
       Microscope inspect
       Wet etch                        :      ***
       Resist
       bake                            :      ***


20.  BF2 field implant
----------------------

       Dose                            :      ***
       Energy                          :      ***
       Specie                          :      ***

21.  Boron Punchthrough implant
-----

       Dose                            :      ***
       Energy                          :      ***
       Specie                          :      ***
       Plasma resist clean
       Resist clean                    :      ***
       Microscope inspect

22.  Field oxidation
--------------------

       Diffusion preclean
       Field oxidation                        ***
       Step                                   ***

       Push in                                ***
       Anneal                                 ***
       Oxidation                              ***
       Ramp to                                ***
       Anneal                                 ***
       Ramp to                                ***
       Oxidation                              ***
       Oxidation                              ***
       Ramp to                                ***

*Time adjusted as required to maintain specified oxide thickness. Visual inspect

       Oxide dip                       :      ***
       Phosphoric Acid                 :      ***
       strip
       Microscope inspect
       Oxide dip                       :      ***
       Microscope inspect


24.  Sacrificial oxidation
--------------------------

Diffusion preclean
Sacrificial oxidation                  ***
Step                                   ***

Push  in                               ***
Anneal                                 ***
Oxidation                              ***
Oxidation                              ***
Oxidation                              ***
Ramp to                                ***
Anneal                                 ***
Ramp to                                ***

*Time adjusted as required to maintain specified oxide thickness. Visual inspect

       Microscope inspect

26.  Boron Gate implant
-----------------------

       Dose                            :      ***
       Energy                          :      ***
       Specie                          :      ***
       Plasma resist clean
       Resist clean                    :      ***
       Oxide dip                       :      ***
       Microscope inspect

27.  Gate oxidation
-------------------

       Diffusion preclean
       Gate oxidation                         ***
       Step                                   ***

       Push in                                ***
       Anneal                                 ***
       Oxidation                              ***
       Oxidation                              ***
       Oxidation                              ***
       Ramp to                                ***
       Anneal                                 ***
       Ramp to                                ***

*Time adjusted as required to maintain specified oxide thickness.

       Visual inspect

28.  Poly deposition
--------------------

       Polysilicon                            ***
       deposition(LP-CVD)
       Temperature                     :      ***

       SiH4                            :      ***
       Visual inspect

29. Backside Etch
-----------------

       Photoresist spin
       Resist bake                                         ***
       Backside polY                   ***
       Backside oxide                        ***
       Plasma Resist Clean
       Resist Clean                ***

30.  Poly dope
-----

       Diffusion preclean
       Poly dope                       ***

       Step                            ***

       Push in                         ***
       Ramp to                         ***
       Doping                          ***
       Ramp to                         ***
       *Time adjusted as required to maintain specified Poly resistivity.
       Visual inspect
       Oxide dip                       ***
       Cleaning                        ***

31.  Gate Mask (CD's measured)
------------------------------

       Microscope inspect

32.  Poly etch
--------------

       Plasma Poly etch                      ***
       Microscope inspect

       Plasma resist clean
       Resist clean                    :      ***
       Oxide dip                       :      ***
       Microscope inspect
       CD's measured

33.  Implant oxidation
----------------------

       Diffusion preclean
       Implant oxidation                      ***
       Step                                   ***

       Push in                                ***
       Anneal                                 ***
       Oxidation                              ***
       Anneal                                 ***
       *Time adjusted as required to maintain specified oxide thickness.
       Visual inspect

34.  N+ Mask (no CD's measured)
-------------------------------

       Microscope inspect

35.  Arsenic Source/Drain implant
---------------------------------

       Dose                            :      ***
       Energy                          :      ***
       Specie                          :      ***
       Plasma resist clean
       Resist clean                    :      ***


36.  P+ Mask (no CD's measured)
-------------------------------
       Microscope inspect

37.  Boron Source/Drain implant
-------------------------------

       Dose                            :      ***
       Energy                          :      ***
       Specie                          :      ***
       Plasma resist clean
       Resist clean                    :      ***

38.  EP Mask (no CD's measured)
-------------------------------

       Microscope inspect

39.  Boron EP implant
---------------------

       Dose                            :      ***
       Energy                          :      ***
       Specie                          :      ***
       Plasma resist clean
       Resist clean                    :      ***

40.  Source/Drain re-oxidation
------------------------------

       Diffusion preclean
       Source/Drain re-oxidation              ***
       Step                                   ***

       Push in                                ***
       Anneal                                 ***
       Oxidation                              ***
       Ramp to                                ***
       Anneal                                 ***
       Ramp to                                ***
       *Time adjusted as required to maintain specified oxide thickness.
       Visual inspect

41.  Glass deposition
---------------------

       LTO deposition(LP-CVD)                 ***
       Temperature                     :      ***

       SiH4                            :      ***
       MIX gas                         :      ***
       O2                              :      ***
       He                              :      ***
       Visual inspect
       Scrubber cleaning

42.  Densify
------------

       Step                                   ***

       Push in                                ***
       Ramp to                                ***

Confidential
***IDENTIFIES REDACTED MATERIAL WHICH HAS BEEN DELETED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

       Microscope inspect

44.  Contact etch
-----------------

       Plasma flush
       Resist
       bake                :  ***
       Microscope inspect
       Oxide etch          :  ***
       Resist
       bake                :  ***
       Oxide thickness
       measured
       Plasma etch
       (CHF3)
       Oxide thickness
       measured
       Microscope inspect
       Resist bake         :  ***
       Oxide etch          :  ***
       Plasma resist clean
       Resist clean        :  ***
       Microscope inspect
       CD's measured

45.  AL/Si/Cu Sputter
---------------------

       Pre-Sputter clean   :  ***
       Wafer bake          :  ***
       Aluminum            :  ***
       Visual inspect

Microscope inspect

Confidential
*** INDENTIFIES REDACTED MATERIAL WHICH HAS BEEN DELETED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Resist
bake : ***
Plasma metal etch on PE8300 using BCl3 Microscope inspect
Plasma resist clean
Microscope inspect

       CD's measured

48.  AL sinter
--------------

       Step              ***

       Push in           ***
       Sinter            ***

Plasma Nitride              ***
deposition
Refractive index     :      ***
Visual inspect

       Microscope inspect

51.  Pad etch
-------------

       Plasma etch
       (CF4/O2)
       Microscope inspect
       Plasma resist clean
       Microscope inspect

52.  Passivation sinter
-----------------------

       Step                        ***

       Push in                     ***
       Sinter                      ***

53.  Passivation sinter
-----------------------

       Step                        ***

       Push in                     ***
       Sinter                      ***

54.  Backgrind
--------------

       Tape coating             :  ***
       Backgrind                :  ***
       Peeling tape off
       Water cleaning

1.  Material specification
--------------------------

       Crystal type             :  ***
       Resistivity              :  ***
       Thickness                :  ***

       Diffusion preclean       :  ***

       Etch rate                :  ***


2.  Blocking oxidation
----------------------

       Diffusion preclean
       Blocking oxidation          ***
       Step                        ***

       Push in                     ***
       Anneal                      ***
       Ramp to                     ***
       Oxidation                   ***
       Oxidation                   ***
       Ramp to                     ***

*Time adjusted as required to maintain specified oxide thickness. Visual inspect

       Microscope inspect

4.  N-Well Etch
---------------

       Resist bake             :  ***
       Microscope inspect
       Wet etch                :  ***
       Plasma resist clean
       Resist clean            :  ***
       CD's measured

5.  Well oxidation
------------------

       Diffusion preclean
       Well oxidation             ***
       Step                       ***

       Push in                    ***
       Ramp to                    ***
       Oxidation                  ***
       Ramp to                    ***

*Time adjusted as required to maintain specified oxide thickness. Visual inspect

       Dose                    :  ***
       Energy                  :  ***
       Specie                  :  ***
       Cleaning                :  ***

7.  N-Well drive
----------------

       Diffusion preclean
       Step                       ***

       Push in                    ***
       Ramp to                    ***
       Anneal                     ***
       Ramp to                    ***

8.  Well oxidation etch
-----------------------

       Wet etch                  :  ***
       Microscope inspect

9.  Implant oxidation
---------------------

       Diffusion preclean
       Implant oxidation            ***
       Step                         ***

       Push in                      ***
       Ramp to                      ***
       Oxidation                    ***
       Oxidation                    ***
       Anneal                       ***
       Ramp to                      ***

*Time adjusted as required to maintain specified oxide thickness. Visual inspect

       Microscope inspect

11.  Boron P-Top implant
------------------------

       Dose                      :  ***
       Energy                    :  ***
       Specie                    :  ***
       Plasma resist clean
       Resist clean              :  ***
       Microscope inspect

12.  P-Top drive
----------------

       Diffusion preclean
       Step                         ***

       Push in                      ***
       Anneal                       ***
       Ramp to                      ***
       Anneal                       ***
       Ramp to                      ***

13.  Oxide strip
----------------

       Oxide strip               :  ***
       Microscope inspect

14.  Regrow oxidation
---------------------

       Diffusion preclean
       Regrow oxidation             ***
       Step                         ***

       Push in                      ***
       Ramp to                      ***
       Oxidation                    ***
       Ramp to                      ***

*Time adjusted as required to maintain specified oxide thickness. Visual inspect

15.  Nitride deposition
-----------------------

       Nitride                      ***
       deposition(LP-
       CVD)
       Temperature               :  ***

       NH3                       :  ***
       SiH2Cl2                   :  ***

*Time adjusted as required to maintain specified Nitride thickness. Visual inspect

Microscope inspect

Nitride etch (Plasma etcher)
Microscope inspect
Plasma resist Clean
Resist clean : ***
CD's measured

       Microscope inspect

19.  Oxide etch
---------------

       Resist bake             :  ***
       Microscope inspect
       Wet etch                :  ***
       Resist bake             :  ***

20.  BF2 field implant
----------------------

       Dose                    :  ***
       Energy                  :  ***
       Specie                  :  ***

       Dose                    :  ***
       Energy                  :  ***
       Specie                  :  ***
       Plasma resist clean
       Resist clean            :  ***
       Microscope inspect

22.  Field oxidation
--------------------

       Diffusion preclean
       Field oxidation            ***
       Step                       ***

       Push in                    ***
       Anneal                     ***
       Oxidation                  ***
       Ramp to                    ***
       Anneal                     ***
       Ramp to                    ***
       Oxidation                  ***
       Oxidation                  ***
       Ramp to                    ***

*Time adjusted as required to maintain specified oxide thickness. Visual inspect

       Oxide dip                   :   ***
       Phosphoric Acid             :   ***
       strip
       Microscope inspect
       Oxide dip                   :   ***
       Microscope inspect


24.  Sacrificial oxidation
--------------------------

       Diffusion preclean
       Sacrificial oxidation           ***
       Step                            ***

       Push in                         ***
       Anneal                          ***
       Oxidation                       ***
       Oxidation                       ***
       Oxidation                       ***
       Ramp to                         ***
       Anneal                          ***
       Ramp to                         ***

*Time adjusted as required to maintain specified oxide thickness. Visual inspect

       Microscope inspect

26.  Boron Gate implant
-----------------------

       Dose                        :   ***
       Energy                      :   ***
       Specie                      :   ***
       Plasma resist clean
       Resist clean                :   ***
       Oxide dip                   :   ***
       Microscope inspect

27.  Gate oxidation
-------------------

       Diffusion preclean
       Gate oxidation                  ***
       Step                            ***

Push in                      ***
Anneal                       ***
Oxidation                    ***
Oxidation                    ***
Oxidation                    ***
Ramp to                      ***
Anneal                       ***
Ramp to                      ***

*Time adjusted as required to maintain specified oxide thickness. Visual inspect

       Polysilicon                  ***
       deposition(LP-CVD)
       Temperature               :  ***

       SiH4                      :  ***
       Visual inspect

29. Backside Etch
-----------------

       Photoresist spin
       Resist bake                  ***
       Backside poly                ***
       Backside oxide               ***
       Plasma Resist Clean
       Resist Clean                 ***

30.  Poly dope
--------------

       Diffusion preclean
       Poly dope                    ***
       Step                         ***

       Push in                      ***
       Ramp to                      ***
       Doping                       ***
       Ramp to                      ***

*Time adjusted as required to maintain specified Poly resistivity. Visual inspect
Oxide dip : ***

       Cleaning                      :  ***

31.  Gate Mask (CD's measured)
------------------------------

       Microscope inspect

32.  Poly etch
--------------

       Plasma Poly etch                 ***
       Microscope inspect
       Plasma resist clean
       Resist clean                  :  ***
       Oxide dip                     :  ***
       Microscope inspect
       CD's measured

33.  Implant oxidation
----------------------

       Diffusion preclean
       Implant oxidation                ***
       Step                             ***

       Push in                          ***
       Anneal                           ***
       Oxidation                        ***
       Anneal                           ***
       *Time adjusted as required to maintain specified oxide thickness.
       Visual  inspect

34.  N+ Mask (no CD's measured)
-------------------------------

       Microscope inspect

35.  Arsenic Source/Drain implant
---------------------------------

       Dose                          :  ***
       Energy                        :  ***
       Specie                        :  ***
       Plasma resist clean
       Resist clean                  :  ***

36.  P+ Mask (no CD's measured)
-------------------------------

       Microscope inspect

37.  Boron Source/Drain implant
-------------------------------

       Dose                       :   ***
       Energy                     :   ***
       Specie                     :   ***
       Plasma resist
       clean
       Resist clean               :   ***

38.  EP Mask (no CD's measured)
------------------------------

       Microscope inspect

39.  Boron EP implant
---------------------

       Dose                       :   ***
       Energy                     :   ***
       Specie                     :   ***
       Plasma resist clean
       Resist clean               :   ***

40.  Source/Drain re-oxidation
------------------------------

       Diffusion preclean
       Source/Drain re-oxidation      ***
       Step                           ***

       Push in                        ***
       Anneal                         ***
       Oxidation                      ***
       Ramp to                        ***
       Anneal                         ***
       Ramp to                        ***
       *Time adjusted as required to maintain specified oxide thickness.
       Visual inspect

41.  Glass deposition
---------------------

       LTO deposition(LP-CVD)         ***
       Temperature                :   ***

       SiH4                       :   ***
       MIX gas                    :   ***
       O2                         :   ***

       He                              :      ***
       Visual inspect
       Scrubber cleaning

42.  Densify
------------

       Step                                   ***

       Push in                                ***
       Ramp to                                ***
       Densify                                ***
       Ramp to                                ***

43.  Contact Mask (CD's  measured)
----------------------------------

       Microscope inspect

44.  Contact etch
------------------

       Plasma flush
       Resist bake                     :      ***
       Microscope inspect
       Oxide etch                      :      ***
       Resist bake                     :      ***
       Oxide thickness measured
       Plasma etch (CHF3)
       Oxide thickness measured
       Microscope inspect
       Resist bake                     :      ***
       Oxide etch                      :      ***
       Plasma resist clean
       Resist clean                    :      ***
       Microscope inspect
       CD's measured

45.  AL/Si/Cu Sputter
---------------------

       Pre-Sputter clean               :      ***
       Wafer bake                      :      ***
       Aluminum                        :      ***
       Visual inspect

46.  Metal Mask (CD's measured)
-------------------------------

     Microscope Inspect

47.  Metal etch
---------------

       Resist bake                           ***
       Plasma metal ***
       Microscope inspect
       Plasma resist clean
       Microscope inspect
       CD's measured

48.  AL sinter
--------------

       Step                 ***

       Push in              ***
       Sinter               ***


49.  Glass deposition
---------------------

       LTO                                    ***
       deposition(LP-CVD)
       Temperature                     :      ***

       SiH4                            :      ***
       MIX gas                         :      ***
       O2                              :      ***
       He                              :      ***
       Visual inspect

Microscope inspect

Plasma etch (CF4/O2)
Microscope inspect
Plasma resist clean
Microscope inspect

       Push in             ***
       Sinter               ***

53.  PIX coating
----------------

       PIX-1400                        :      ***
       Bake                            :      ***

       Microscope inspect

55.  PIX sinter
---------------

       Step                 ***

       Push in              ***
       Sinter               ***

56.  Backgrind
--------------

       Tape coating                    :      ***
       Backgrind                       :      ***
       Peeling tape off
       Water cleaning

1.  Material specification
--------------------------

       Crystal type                    :      ***
       Resistivity                     :      ***
       Thickness                       :      ***

       Diffusion                       :      ***
       preclean

       Etch rate                       :      ***

2.  Blocking  oxidation
-----------------------

       Diffusion
       preclean
       Blocking                               ***
       oxidation
       Step                                   ***

       Push in                                ***
       Anneal                                 ***
       Ramp to                                ***
       Oxidation                              ***
       Oxidation                              ***
       Ramp to                                ***
       *Time adjusted as required to maintain specified oxide thickness.
       Visual inspect

3.  N-Well Mask (CD's measured)
-------------------------------

       Microscope inspect

4.  N-Well Etch
---------------

       Resist bake                    :      ***
       Microscope inspect
       Wet etch                       :      ***
       Plasma resist clean
       Resist clean                   :      ***
       CD's measured

5.  Well oxidation
------------------

       Diffusion preclean
       Well oxidation                        ***
       Step                                  ***

       Push in                               ***
       Ramp to                               ***
       Oxidation                             ***
       Ramp to                               ***

*Time adjusted as required to maintain specified oxide thickness.
Visual inspect

Dose : ***

       Energy                          :      ***
       Specie                          :      ***
       Cleaning                        :      ***

7.  N-Well drive
----------------

       Diffusion
       preclean
       Step                                  ***

       Push in                               ***
       Ramp to                               ***
       Anneal                                ***
       Ramp to                               ***

8.  Well oxidation etch
-----------------------

       Wet etch                       :      ***
       Microscope inspect

9.  Implant oxidation
---------------------

       Diffusion preclean
       Implant oxidation                     ***
       Step                                  ***

       Push in                               ***
       Ramp to                               ***
       Oxidation                             ***
       Oxidation                             ***
       Anneal                                ***
       Ramp to                               ***
       *Time adjusted as required to maintain specified oxide thickness.
        Visual inspect

10.  P-Top Mask (CD's measured)
------------------------------

       Microscope inspect

11.  Boron P-Top implant
------------------------

       Dose                            :      ***
       Energy                          :      ***
       Specie                          :      ***
       Plasma resist clean

       Resist clean                    :      ***
       Microscope inspect

12.  P-Top drive
----------------

       Diffusion preclean
       Step                                   ***

       Push in                                ***
       Anneal                                 ***
       Ramp to                                ***
       Anneal                                 ***
       Ramp to                                ***

13.  Oxide strip
----------------

       Oxide strip                     :      ***
       Microscope inspect

14.  Regrow oxidation
---------------------

       Diffusion preclean
       Regrow oxidation                       ***
       Step                                   ***

       Push in                                ***
       Ramp to                                ***
       Oxidation                              ***
       Ramp to                                ***
       *Time adjusted as required to maintain specified oxide thickness.
        Visual inspect

15.  Nitride deposition
-----------------------

       Nitride                                ***
       deposition(LP-CVD)
       Temperature                     :      ***

       NH3                             :      ***
       SiH2Cl2                         :      ***

*Time adjusted as required to maintain specified Nitride thickness. Visual inspect

Confidential
*** IDENTIFIES REDACTED MATERIAL WHICH HAS BEEN DELETED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Microscope inspect

Nitride etch (Plasma etcher)
Microscope inspect
Plasma resist Clean
Resist clean : *** CD's measured

       Microscope inspect

19.  Oxide etch
---------------

       Resist bake                     :      ***
       Microscope inspect
       Wet etch                        :      ***
       Resist bake                     :      ***

20.  BF2 field implant
----------------------

       Dose                            :      ***
       Energy                          :      ***
       Specie                          :      ***

21.  Boron Punchthrough implant
-------------------------------

       Dose                            :      ***
       Energy                          :      ***
       Specie                          :      ***
       Plasma resist clean
       Resist clean                    :      ***
       Microscope inspect

22.  Field oxidation
--------------------

       Diffusion preclean
       Field oxidation                        ***
       Step                                   ***

       Push in                                ***

Anneal                                 ***
Oxidation                              ***
Ramp to                                ***
Anneal                                 ***
Ramp to                                ***
Oxidation                              ***
Oxidation                              ***
Ramp to                                ***

*Time adjusted as required to maintain specified oxide thickness.
Visual inspect

       Oxide dip                       :      ***
       Phosphoric Acid                 :      ***
       strip
       Microscope inspect
       Oxide dip                       :      ***
       Microscope inspect


24.  Sacrificial oxidation
--------------------------

       Diffusion preclean
       Sacrificial                            ***
       oxidation
       Step                                   ***

       Push in                                ***
       Anneal                                 ***
       Oxidation                              ***
       Oxidation                              ***
       Oxidation                              ***
       Ramp to                                ***
       Anneal                                 ***
       Ramp to                                ***

*Time adjusted as required to maintain specified oxide thickness.
Visual inspect

Microscope inspect

       Dose                            :      ***
       Energy                          :      ***
       Specie                          :      ***
       Plasma resist clean
       Resist clean                    :      ***
       Oxide dip                       :      ***
       Microscope inspect

27.  Gate oxidation
-------------------

       Diffusion
       preclean
       Gate oxidation                         ***
       Step                                   ***

       Push in                                ***
       Anneal                                 ***
       Oxidation                              ***
       Oxidation                              ***
       Oxidation                              ***
       Ramp to                                ***
       Anneal                                 ***
       Ramp to                                ***
       *Time adjusted as required to maintain specified oxide thickness.
        Visual  inspect

28.  Poly deposition
--------------------

       Polysilicon                            ***
       deposition(LP-CVD)
       Temperature                     :      ***

       SiH4                            :      ***
       Visual inspect

29. Backside Etch
-----------------

       Photoresist spin
       Resist bake                                     ***
       Backside poly                          ***
       Backside oxide                         ***
       Plasma Resist Clean
       Resist Clean                           ***

30.  Poly dope
--------------

       Diffusion
       preclean
       Poly dope                              ***
       Step                                   ***

       Push in                                ***
       Ramp to                                ***
       Doping                                 ***
       Ramp to                                ***
       *Time adjusted as required to maintain specified Poly resistivity.
       Visual inspect

       Oxide dip                       :      ***
       Cleaning                        :      ***

31.  Gate Mask (CD's measured)
-----------------------------

       Microscope inspect

32.  Poly etch
--------------

       Plasma Poly etch                       ***
       Microscope inspect
       Plasma resist clean
       Resist clean                    :      ***
       Oxide dip                       :      ***
       Microscope inspect
       CD's measured

33.  Implant oxidation
----------------------

       Diffusion preclean
       Implant oxidation                      ***
       Step                                   ***

       Push in                                ***
       Anneal                                 ***
       Oxidation                              ***
       Anneal                                 ***

*Time adjusted as required to maintain specified oxide thickness. Visual inspect

       Microscope inspect

35.  Arsenic Source/Drain implant
---------------------------------

       Dose                            :      ***
       Energy                          :      ***
       Specie                          :      ***
       Plasma resist clean
       Resist clean                    :      ***

36.  P+ Mask (no CD's measured)
-------------------------------

       Microscope inspect

37.  Boron Source/Drain implant
-------------------------------

       Dose                            :      ***
       Energy                          :      ***
       Specie                          :      ***
       Plasma resist clean
       Resist clean                    :      ***


38.  Source/Drain  re-oxidation
-------------------------------

       Diffusion
       preclean
       Source/Drain                           ***
       re-oxidation
       Step                                   ***

       Push in                                ***
       Anneal                                 ***
       Oxidation                              ***
       Ramp to                                ***
       Anneal                                 ***
       Ramp to                                ***
       *Time adjusted as required to maintain specified oxide thickness.
       Visual  inspect

39.  Glass deposition
---------------------

       LTO                                    ***
       deposition(LP-CVD)
       Temperature                     :      ***

       SiH4                            :      ***
       MIX gas                         :      ***

     O2                      :      ***
     He                      :      ***
     Visual inspect
     Scrubber cleaning

40.  Densify
------------

     Step        ***

     Push in     ***
     Ramp to     ***
     Densify     ***
     Ramp to     ***

41.  Contact Mask (CD's measured)
----------------------------------

     Microscope inspect

42.  Contact etch
------------------

     Plasma flush
     Resist bake                    :      ***
     Microscope inspect
     Oxide etch                     :      ***
     Resist bake                    :      ***
     Oxide thickness measured
     Plasma etch (CHF3)
     Oxide thickness measured
     Microscope inspect
     Resist bake                    :      ***
     Oxide etch                     :      ***
     Plasma resist clean
     Resist clean                   :      ***
     Microscope inspect
     CD's measured

43.  AL/Si/Cu Sputter
----------------------

     Pre-Sputter clean              :      ***
     Wafer bake                     :      ***
     Aluminum                       :      ***
     Visual inspect

44.  Metal Mask (CD's measured)
--------------------------------

     Microscope inspect

45.  Metal etch
---------------

     Resist bake                    :      ***
     Plasma metal
     etch on PE8300 using BCl3
     Microscope inspect
     Plasma resist clean
     Microscope inspect
     CD's measured

46.  AL sinter
--------------

     Step                ***

     Push in             ***
     Sinter              ***

47.  Glass deposition
----------------------

     LTO deposition(LP-CVD     ***
       Temperature      :      ***

       SiH4             :      ***
       MIX gas         :      ***
       O2               :      ***
       He               :      ***
       Visual inspect

Microscope inspect

Plasma etch (CF4/O2)
Microscope inspect
Plasma resist clean
Microscope inspect

     Push in      ***
     Sinter       ***

51.  PIX coating
----------------

     PIX-1400           :      ***
     Bake               :      ***

Microscope inspect

       Step             ***

       Push  in         ***
       Sinter           ***

54.  Backgrind
--------------

       Tape coating     :      ***
       Backgrind        :      ***
       Peeling tape off
       Water cleaning

Confidential
*** IDENTIFIES REDACTED MATERIAL WHICH HAS BEEN DELETED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

High Voltage MOS transistors                               USA                                   4,811,075

                                                           European (designated France,            0295391
                                                           Germany, Great Britain,
                                                           Italy, Netherlands, Sweden)

Regulated Flyback Converter with Spike Suppressing         USA                                   5,008,794
Coupled Inductors

Self Powering Technique for Integrated Switched Mode       USA                                   5,014,178
Power Supply
                                                           Japan                                   2044690

Temperature-Compensated Integrated Circuit for Uniform     USA                                   5,038,053
Current Generation

Pulse Width Modulator Control Circuit                      USA                                   5,045,800

MOS Grated Bipolar Transistor                              USA                                   5,072,268

                                                           Japan                                   1937954

High Frequency Switched Mode Converter                     USA                                   5,161,098

     Low Cost High Frequency Switched Mode Converter
     & Method For Making Same                              Taiwan                                    56268

Low Noise Voltage Regulator Using A Gated Single Ended     USA                                   5,164,891
Oscillator

Below Ground Current Sensing with Current Input to         USA                                   5,245,526
Control Threshold

Semiconductor Device w/ Improved Breakdown Voltage         USA                                   5,258,636
Characteristics

Dual Threshold Differential Discriminator                  USA                                   5,274,274

                                                           European (designated France,            0562397
                                                           Germany, Great Britain,
                                                           Italy, Netherlands, Sweden)

High Voltage Transistor                                    USA                                   5,274,259

Power MOSFET Safe Operating Area Current Limiting Device   USA                                   5,282,107

                                                           European (designated France,            0585847
                                                           Germany, Great Britain,
                                                           Italy, Netherlands, Sweden)

Linear Load Circuit to Control Switching Power Supplies    USA                                   5,285,367
Under Minimum Load Conditions

Switched Mode Power Supply Integrated Circuit with         USA                                   5,285,369
Start-up Self-Biasing
                                                           European (designated France,            0585788
                                                           Germany, Italy,
                                                           Netherlands, Sweden, UK)

High Voltage MOS Transistor With A Low On-Resistance       USA                                   5,313,082

Three Terminal Switched Mode Power Supply Integrated       USA                                   5,313,381
Circuit
                                                           European (designated France,            0585789
                                                           Germany, Italy,
                                                           Netherlands, Sweden, UK)

Bi- Directional MOSFET Switch                              USA                                   5,323,044

Method of Making High Voltage Transistor                   USA                                   5,411,901

Power Factor Correction Pre-compensation Circuit           USA                                   5,461,303

Plastic Quad Packaged Switch with Mode Integrated          USA                                   5,469,334
Circuit Transformer Winding and Moldings for
Transformer Core Pieces

Low-Cost High-Voltage Flyback Power Supply                 USA                                   5,602,724

Coupled inductor power supply with reflected feedback      USA                                   5,973,945
regulation circuitry

Two switch off-line switching converter                    USA                                   5,982,639

Two switch off-line switching converter                    USA                                   6,005,781

Confidential
*** IDENTIFIES REDACTED MATERIAL WHICH HAS BEEN DELETED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

-------------------------------------------------------------------------------------------------
Title                                     Open No              Patent No            Patent No
                                          (Japan)               (Japan)               (USA)
-------------------------------------------------------------------------------------------------
Semiconductor                       ***                   ***
Apparatus
-------------------------------------------------------------------------------------------------
Semiconductor                       ***                   ***
Apparatus
-------------------------------------------------------------------------------------------------
Semiconductor                       ***                   ***
Apparatus
-------------------------------------------------------------------------------------------------
Semiconductor                       ***                   ***
Apparatus
-------------------------------------------------------------------------------------------------
Semiconductor                       ***                   ***
Apparatus
-------------------------------------------------------------------------------------------------
Semiconductor                       ***                   ***
Apparatus and igniter With it
-------------------------------------------------------------------------------------------------
Semiconductor                       ***                   ***
Apparatus
-------------------------------------------------------------------------------------------------
Semiconductor                       ***                   ***
Apparatus
-------------------------------------------------------------------------------------------------
Semiconductor                       ***                   ***
Apparatus and Manufacturing method
-------------------------------------------------------------------------------------------------
Semiconductor                       ***                   ***
Apparatus
-------------------------------------------------------------------------------------------------
Semiconductor                       ***                   ***
Apparatus
-------------------------------------------------------------------------------------------------
Semiconductor                       ***                   ***
Apparatus
-------------------------------------------------------------------------------------------------
Semiconductor                       ***                   ***
Apparatus
-------------------------------------------------------------------------------------------------
Constant Current Circuit            ***                   ***
-------------------------------------------------------------------------------------------------
Semiconductor                       ***                                        ***
Apparatus
-------------------------------------------------------------------------------------------------
Semiconductor                       ***                                        ***
Apparatus
-------------------------------------------------------------------------------------------------
Electro Luminescence                ***                                        ***
Drive Apparatus
-------------------------------------------------------------------------------------------------

Confidential
*** IDENTIFIES REDACTED MATERIAL WHICH HAS BEEN DELETED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Confidential
*** IDENTIFIES REDACTED MATERIAL WHICH HAS BEEN DELETED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

EXHIBIT 10.29

[LETTERHEAD OF UNION BANK OF CALIFORNIA]

August 1, 2000

Mr. Robert Staples
Chief Financial Officer
Power Integrations, Inc.
477 North Mathilda Avenue
Sunnyvale, CA 94086

Re: First Amendment ("Amendment") to the Loan Agreement dated October 16, 1998 (this Amendment and the Loan Agreement together called the "Agreement")

Dear Robert:

In reference to the Agreement between Union Bank of California, N.A. ("Bank") and ("Borrower"), the Bank and Borrower desire to amend the Agreement. Capitalized terms used herein, which are not otherwise defined, shall have the meaning given them in the Agreement.

Amendments to the Agreement:

(a) Section 1.1.1 of the Agreement is hereby amended by substituting the date "July 1, 2002" for the date "November 30, 2000."

(b) Section 1.1.1.1 of the Agreement is hereby amended by substituting the words "180 days" for the words "120 days."

(c) Section 5.3 of the Agreement is hereby deleted and replaced in its entirety as follows:

5.3 Sale of Assets, Liquidation or Merger. Borrower will neither liquidate nor dissolve nor enter into any consolidation, merger, partnership or other combination, nor convey, nor sell, nor lease all or the greater part of its assets or business.

(d) Section 5.9, titled "Capital Expenditures", of the Agreement is hereby deleted in its entirety.

Except as specifically amended and waived hereby, the Agreement shall remain unaltered and in full force and effect and is hereby ratified and confirmed. This Amendment shall not be a waiver of any existing default or breach of a condition to covenant unless specified herein.

This Amendment shall become effective when the Bank shall have received the acknowledgment copy of this Amendment executed by the Borrower and the following executed documents, all of which the Bank must be received before August 11, 2000.

Very truly yours,

UNION BANK OF CALIFORNIA, N.A.

         /s/
--------------------------
By:     James B. Goudy
Title:  Vice President

Agreed and Accepted to this ___________________ day of August, 2000.

POWER INTEGRATIONS, INC.

         /s/
--------------------------
By:     Robert Staples
Title:  Chief Financial Officer

[LETTERHEAD OF UNION BANK OF CALIFORNIA]

AUTHORIZATION TO OBTAIN CREDIT, GRANT SECURITY,
GUARANTEE OR SUBORDINATE

RECITALS

B. The Business desires that certain person(s) be authorized to act on its behalf from time to time in obtaining, among other things, such credit from, granting security to, or giving guaranties or subordinations to, Bank.

NOW, THEREFORE, IT IS RESOLVED THAT:

C.E.O. & PRESIDENT         HOWARD EARHART             /s/
-------------------------- -------------------------- --------------------------
Corporate Title            Name            Signature

CHIEF FINANCIAL OFFICER    ROBERT STAPLES             /s/
-------------------------- -------------------------- --------------------------
Corporate Title            Name                       Signature

DIRECTOR OF FINANCE        ROBERT LELIEUR             /s/
-------------------------- -------------------------- --------------------------
Corporate Title            Name                       Signature

-------------------------- -------------------------- --------------------------
Corporate Title            Name                       Signature

-------------------------- -------------------------- --------------------------
Corporate Title            Name                       Signature

-------------------------- -------------------------- --------------------------
Corporate Title            Name                       Signature

2. Scope Of Authority. Without limiting the generality of the authority granted, each person designated in paragraph 1 above is authorized, from time to time, in the name and on behalf of the Business, to:

2.1 Incur Indebtedness To Bank. The word "Indebtedness" as used herein means all debts, obligations and liabilities, including without limitation obligations and liabilities under guaranties or subordinations, currently existing or now or hereafter made, incurred or created, whether voluntary or involuntary and however arising or evidenced, whether direct or acquired by assignment or succession, whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, and whether liability is individual or joint with others, all renewals, extensions and modifications thereof, and all attorneys' fees and costs incurred in connection with the negotiation, preparation, workout, collection and enforcement thereof;

2.2 Execute, deliver and endorse with respect to Indebtedness to Bank, promissory notes, loan agreements, drafts, guaranties, subordinations, applications and agreements for letters of credit, acceptance agreements, foreign exchange documentation, applications and agreements pertaining to the payment and collection of documents, indemnities, waivers, purchase agreements and other financial undertakings, leases and other documents and agreements in connection therewith, and all renewals, extensions or modifications thereof;

2.3 Grant security interests in, pledge, assign, transfer, endorse, mortgage or hypothecate, and execute security or pledge agreements, financing statements and other security interest perfection documentation, mortgages and deeds of trust on, and give trust receipts for, any or all property of the Business as may be agreed upon by any officer as security for any or all Indebtedness of the Business or any other individual or entity ("Person"), and grant and execute renewals, extensions or modifications thereof;

2.4 Sell to, or discount or rediscount with, Bank all negotiable instruments, including without limitation promissory notes, commercial paper, drafts, accounts, acceptances, leases, chattel paper, contracts, documents, instruments or evidences of debt at any time owned, held or drawn by the Business, and draw, endorse or transfer any of such instruments or documents on behalf of the Business, guarantee payment or repurchase thereof, and execute and deliver to Bank all documents and agreements in connection therewith, and all renewals, extensions or modifications thereof;

2.5 Direct the disposition of the proceeds of any credit extended by Bank, and deliver to Bank and accept from Bank delivery of any property of the Business at any time hold by Bank.

2.6 Specify in writing to Bank the individuals who are authorized, in the name of and on behalf of the Business, to request advances under loans or credit lines made available by Bank to the Business, subject to the terms thereof.

3. Writings. Any instruments, documents, agreements or other writings executed under or pursuant to these resolutions (collectively, the "Authorization") may be in such form and contain such terms and conditions as may be required by Bank in its sole discretion, and execution thereof by any officer authorized under the Authorization shall be conclusive evidence of such officer's and the Business's approval of the terms and conditions thereof.

4. Certification. The Secretary or any Assistant Secretary of the Business is hereby authorized and directed from time to time to certify to Bank a copy of this Authorization, the names and specimen signatures of the persons designated in paragraph 1 above, and any modification thereof.

6. Requests For Credit. Credit may be requested by the Business from Bank in writing, by telephone, or by other telecommunication method acceptable to Bank. The Business recognizes and agrees that Bank cannot effectively determine whether a specific request purportedly made by or on behalf of the Business is actually authorized or authentic. As it is in the Business's best interest that Bank extend credit in response to these forms of request, the Business assumes all risks regarding the validity, authenticity and due authorization of any request purporting to be made by or on behalf of the Business, The Business is hereby authorized and directed to repay any credit that is extended by Bank pursuant to any request which Bank in good faith believes to be authorized, or when the proceeds of any credit are deposited to the account of the Business with Bank, regardless of whether any individual or entity other than the Business may have authority to draw against such account.

7. Business As Partner/Joint Venturer, LLC Member or Manager. Nothing in its organizational documents limits or prohibits the Business from acting as a general or limited partner of a partnership, a member or manager of a limited liability company, or joint venturer of a joint venture. Any Person designated in paragraph 1 of the Authorization is authorized, on behalf of the Business, in its role as a general or limited partner, a member or manager, or a joint venturer, to execute, deliver and endorse all certificates, authorizations and agreements (i) to evidence the Business's role in and responsibilities to and for such partnership, limited liability company or joint venture so that Bank may rely thereon, and (ii) to evidence such partnership's, limited liability company's or joint venture's obligations and liabilities to Bank.

8. No Limitation By This Authorization. Nothing contained in this Authorization shall limit or modify the authority of any person to act on behalf of the Business as provided by law, any agreement or authorization relating to the Business or otherwise.

9. Addenda. The Addendum - Foreign Exchange Contracts and Addendum - Letters of Credit attached hereto are incorporated herein by this reference.

CERTIFICATE OF SECRETARY OF THE BUSINESS

I also certify that the above are the names and genuine specimen signatures of the officers of the Business authorized in paragraph 1 of the Authorization.

I agree to notify Bank in writing of any change in any aspect of the Authorization or of any individual holding any office set forth in this certificate immediately upon the occurrence of any such change, and to provide Bank with a copy of the modified resolution(s) and the genuine specimen signature of any such new officer.

Dated:  August 9, 2000                /s/
        --------------------          --------------------------------------
                                      Secretary of POWER INTEGRATIONS, INC.
                                      Robert G. Staples
                                      --------------------------------------

/s/
--------------------------------------
*President of POWER INTEGRATIONS, INC.
Howard Earhart
--------------------------------------

*When the Secretary is among those authorized, the President should also sign this Certificate.

[LETTERHEAD OF UNION BANK OF CALIFORNIA]

--------------------------------------------------------------------------------
|Borrower Name           POWER INTEGRATIONS, INC.                              |
--------------------------------------------------------------------------------
|Borrower Address                     | Office | Loan Number                   |
|                                     | 64561  | 7122943099  0080-01-0-000     |
|477 N. MATHILDA AVENUE               |-----------------------------------------
|SUNNYVALE, CA  94086                 | Maturity Date | Amount                 |
|                                     | JULY 1, 2002  | $10,000,000.00         |
--------------------------------------------------------------------------------

DATE:    JULY 10, 2000

     FOR VALUE RECEIVED, on JULY 1, 2002  the undersigned ("Debtor") promises to
                            -------------

No Base Interest Rate may be changed, altered or otherwise modified until the expiration of the Interest Period selected by Debtor. The exercise of interest rate options by Debtor shall be as recorded in Bank's records, which records shall be prima facie evidence of the amount borrowed under either interest option and the interest rate; provided, however, that failure of Bank to make any such notation in its records shall not discharge Debtor from its obligations to repay in full with interest all amounts borrowed. In no event shall any Interest Period extend beyond the maturity date of this note.

To exercise this option, Debtor may, from time to time with respect to principal outstanding on which a Base Interest Rate is not accruing, and on the expiration of any Interest Period with respect to principal outstanding on which a Base Interest Rate has been accruing, select an index offered by Bank for a Base Interest Rate Loan and an Interest Period by telephoning an authorized lending officer of Bank located at the banking office identified below prior to 1 0:00 a.m., Pacific time, on any Business Day and advising that officer of the selected index, the Interest Period and the Origination Date selected (which Origination Date, for a Base Interest Rate Loan based on the LIBOR Rate, shall follow the date of such selection by no more than two (2) Business Days).

Bank will mail a written confirmation of the terms of the selection to Debtor promptly after the selection is made. Failure to send such confirmation shall not affect Bank's rights to collect interest at the rate selected. If, on the date of the selection, the index selected is unavailable for any reason, the selection shall be void. Bank reserves the right to fund the principal from any source of funds notwithstanding any Base Interest Rate selected by Debtor.

b. VARIABLE INTEREST RATE. All principal outstanding hereunder which is not bearing interest at a Base Interest Rate shall bear interest at a rate per annum equal to the Reference Rate, which rate shall vary as and when the Reference Rate changes.

If any interest rate defined in this note ceases to be available from Bank for any reason, then said interest rate shall be replaced by the rate then offered by Bank, which, in the sole discretion of Bank, most closely approximates the unavailable rate.

2. LATE PAYMENTS. If any payment required by the terms of this note shall remain unpaid ten days after same is due, at the option of Bank, Debtor shall pay a fee of $100 to Bank.

3. INTEREST RATE FOLLOWING DEFAULT. In the event of default, at the option of Bank, and, to the extent permitted by law, interest shall be payable on the outstanding principal under this note at a per annum rate equal to FIVE AND NO/100 percent ( 5.000% ) in excess of the interest rate specified in paragraph
1.b, above, calculated from the date of default until all amounts payable under this note are paid in full.

4. PREPAYMENT.

a. Amounts outstanding under this note bearing interest at a rate based on the Reference Rate may be prepaid in whole or in part at any time, without penalty or premium. Debtor may prepay amounts outstanding under this note bearing interest at a Base Interest Rate in whole or in part provided Debtor has given Bank not less than five (5) Business Days prior written notice of Debtor's intention to make such prepayment and pays to Bank the prepayment fee due as a result. The prepayment fee shall also be paid, if Bank, for any other reason, including acceleration or foreclosure, receives all or any portion of principal bearing interest at a Base Interest Rate prior to its scheduled payment date. The prepayment fee shall be an amount equal to the present value of the product of: (i) the difference (but not less than zero) between (a) the Base Interest Rate applicable to the principal amount which is being prepaid, and (b) the return which Bank could obtain if it used the amount of such prepayment of principal to purchase at bid price regularly quoted securities issued by the United States having a maturity date most closely coinciding with the relevant Base Rate Maturity Date and such securities were held by Bank until the relevant Base Rate Maturity Date ("Yield Rate"), (ii) a fraction, the numerator of which is the number of days in the period between the date of prepayment and the relevant Base Rate Maturity Date and the denominator of which is 360; and (iii) the amount of the principal so prepaid (except in the event that principal payments are required and have been made as scheduled under the terms of the Base Interest Rate Loan being prepaid, then an amount equal to the lesser of (A) the amount prepaid or (B) 50% of the sum of (1) the amount prepaid and (2) the amount of principal scheduled under the terms of the Base Interest Rate Loan being prepaid to be outstanding at the relevant Base Rate Maturity Date). Present value under this note is determined by discounting the above product to present value using the Yield Rate as the annual discount factor.

b. In no event shall Bank be obligated to make any payment or refund to Debtor, nor shall Debtor be entitled to any setoff or other claim against Bank, should the return which Bank could obtain under this prepayment formula exceed the interest that Bank would have received if no prepayment had occurred. All prepayments shall include payment of accrued interest on the principal amount so prepaid and shall be applied to payment of interest before application of principal. A determination by Bank as to the prepayment fee amount, if any, shall be conclusive.

c. Bank shall provide Debtor a statement of the amount payable on account of prepayment. Debtor acknowledges that (i) Bank establishes a Base Interest Rate upon the understanding that it apply to the base Interest Rate Loan for the entire Interest Period, and (ii) Bank would not lend to Debtor without Debtor's express agreement to pay Bank the prepayment fee described above.

Debtor Initial here: ____________

5. DEFAULT AND ACCELERATION OF TIME FOR PAYMENT. Default shall include, but not be limited to, any of the following: (a) the failure of Debtor to make any payment required under this note when due; (b) any breach, misrepresentation or other default by Debtor, any guarantor, co-maker, endorser, or any person or entity other than Debtor providing security for this note (hereinafter individually and collectively referred to as the "Obligor") under any security agreement, guaranty or other agreement between Bank and any Obligor; (c) the insolvency of any Obligor or the failure of any Obligor generally to pay such Obligor's debts as such debts become due; (d) the commencement as to any Obligor of any voluntary or involuntary proceeding under any laws relating to bankruptcy, insolvency, reorganization, arrangement, debt adjustment or debtor relief; (e) the assignment by any Obligor for the benefit of such Obligor's creditors; (f) the appointment, or commencement of any proceeding for the appointment of a receiver, trustee, custodian or similar official for all or substantially all of any Obligor's property; (g) the commencement of any proceeding for the dissolution or liquidation of any Obligor; (h) the termination of existence or death of any Obligor; (l) the revocation of any guaranty or subordination agreement given in connection with this note; (j) the failure of any Obligor to comply with any order, judgement, injunction, decree, writ or demand of any court or other public authority; (k) the filing or recording against any Obligor, or the property of any Obligor, of any notice of levy, notice to withhold, or other legal process for taxes other than property taxes; (l) the default by any Obligor personally liable for amounts owed hereunder on any obligation concerning the borrowing of money; (m) the issuance against any Obligor, or the property of any Obligor, of any writ of attachment, execution, or other judicial lien; or (n) the deterioration of the financial condition of any Obligor which results in Bank deeming itself, in good faith, insecure. Upon the occurrence of any such default, Bank, in its discretion, may cease to advance funds hereunder and may declare all obligations under this note immediately due and payable; however, upon the occurrence of an event of default under d, a, f, or g, all principal and interest shall automatically become immediately due and payable.

6. ADDITIONAL AGREEMENTS OF DEBTOR. If any amounts owing under this note are not paid when due, Debtor promises to pay all costs and expenses, including reasonable attorneys' fees, incurred by Bank in the collection or enforcement of this note. Debtor and any endorsers of this note, for the maximum period of time and the full extent permitted by law, (a) waive diligence, presentment, demand, notice of nonpayment, protest, notice of protest, and notice of every kind; (b) waive the right to assert the defense of any statute of limitations to any debt or obligation hereunder; and (c) consent to renewals and extensions of time for the payment of any amounts due under this note. If this note is signed by more than one party, the term "Debtor" includes each of the undersigned and any successors in interest thereof; all of whose liability shall be joint and several. Any married person who signs this note agrees that recourse may be had against the separate property of that person for any obligations hereunder. The receipt of any check or other item of payment by Bank, at its option, shall not be considered a payment on account until such check or other item of payment is honored when presented for payment at the drawee bank. Bank may delay the credit of such payment based upon Bank's schedule of funds availability, and interest under this note shall accrue until the funds are deemed collected. In any action brought under or arising out of this note, Debtor and any Obligor, including their successors and assigns, hereby consent to the jurisdiction of any competent court within the State of California, as provided in any alternative dispute resolution agreement executed between Debtor and Bank, and consent to service of process by any means authorized by said state's law. The term "Bank" includes, without limitation, any holder of this note. This note shall be construed in accordance with and governed by the laws of the State of California. This note hereby incorporates any alternative dispute resolution agreement previously, concurrently or hereafter executed between Debtor and Bank.

7. DEFINITIONS. As used herein, the following terms shall have the meanings respectively set forth below: "Base Interest Rate" means a rate of interest based on the LIBOR Rate. "Base Interest Rate Loan" means amounts outstanding under this note that bear interest at a Base Interest Rate. "Base Rate Maturity Date" means the last day of the Interest Period with respect to principal outstanding under a Base Interest Rate Loan. "Business Day" means a day on which Bank is open for business for the funding of corporate loans, and, with respect to the rate of Interest based on the LIBOR Rate, on which dealings in U.S. dollar deposits outside of the United States may be carried on by Bank. "Interest Period" means with respect to funds bearing interest at a rate based on the LIBOR Rate, any calendar period of one, three, six, nine or twelve months. In determining an Interest Period, a month means a period that starts on one Business Day in a month and ends on and includes the day preceding the numerically corresponding day in the next month. For any month in which there is no such numerically corresponding day, then as to that month, such day shall be deemed to be the last calendar day of such month. Any Interest Period which would otherwise end on a non-Business Day shall end on the next succeeding Business Day unless that is the first day of a month, in which event such Interest Period shall end on the next preceding Business Day. "LIBOR Rate" means a per annum rate of interest (rounded upward, if necessary, to the nearest 1/100 of 1%) at which dollar deposits, in immediately available funds and in lawful money of the United States would be offered to Bank, outside of the United States, for a term coinciding with the Interest Period selected by Debtor and for an amount equal to the amount of principal covered by Debtor's interest rate selection, plus Bank's costs, including the cost, if any, of reserve requirements. "Origination Date" means the first day of the Interest Period. "Reference Rate" means the rate announced by Bank from time to time at its corporate headquarters as its Reference Rate. The Reference Rate is an index rate determined by Bank from time to time as a means of pricing certain extensions of credit and is neither directly tied to any external rate of interest or index nor necessarily the lowest rate of interest charged by Bank at any given time.

POWER INTEGRATIONS, INC.

BY:  /s/------------------------------     ---------------------------------
     Robert J. Lelieur  TITLE

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[LETTERHEAD OF UNION BANK OF CALIFORNIA]

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|Borrower Name           POWER INTEGRATIONS, INC.                              |
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|Borrower Address                     | Office | Loan Number                   |
|                                     | 64561  | 7122943099  0080-01-0-000     |
|477 N. MATHILDA AVENUE               |-----------------------------------------
|SUNNYVALE, CA  94086                 | Maturity Date | Amount                 |
|                                     | JULY 1, 2002  | $10,000,000.00         |
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Union Bank of California, N.A. ("Bank") is hereby authorized and instructed to disburse the proceeds of that certain promissory note ("Note") evidencing the obligation referred to above in the following manner:

$ 10,000,000.00

Change in terms of obligation #0080-01-0-000 which matures NOVEMBER 30, 2000.

____ COMMITMENT FEE: .20% PER ANNUM ON THE AVERAGE DAILY UNUSED PORTION
OF FACILITY, PAYABLE QUARTERLY IN ARREARS.

2. Bank shall disburse proceeds in the amounts stated above in accordance with the foregoing authorization or when Bank receives verbal or written authorization to do so from Borrower(s) or any one of the Borrowers, if there are joint Borrowers, but not later than the final date for availability provided in the loan documents. Bank, at its discretion, may elect to extend this date without notice to or acknowledgment by the Borrower(s).

3. This Authorization and the Note will remain in full force and effect until the obligations in connection with the Note have been fulfilled. Unless dated by Bank prior to execution, the Note shall be dated by Bank as of the date on which Bank disburses proceeds.

4. Notwithstanding anything to the contrary herein, Bank reserves the right to decline to advance the proceeds of the Note if there is a filing as to the Borrower(s), or any of them of a voluntary or involuntary petition under the provisions of the Federal Bankruptcy Act or any other insolvency law; the issuance of any attachment, garnishment, execution or levy of any asset of the Borrower(s), or any endorsers or guarantor which results in Bank deeming itself, in good faith insecure.

5. The Borrower(s) authorizes Bank to release information concerning the Borrower(s) financial condition to suppliers, other creditors, credit bureaus and other credit reporters; and also authorizes Bank to obtain such information from any third party at any time.

The Borrower(s) by their execution of this Authorization accept the foregoing terms, conditions and instrucitons.

BY:  /s/ Robert J. Lelieur   Director of Finance
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     Robert J. Lelieur           TITLE

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[LETTERHEAD OF UNION BANK OF CALIFORNIA]

ALTERNATIVE DISPUTE RESOLUTION AGREEMENT
(Judicial Reference and Waiver of Jury Trial)

1. CLAIMS SUBJECT TO JUDICIAL REFERENCE; SELECTION OF REFEREE. All Claims, including any and all questions of law or fact relating thereto, shall, at the written request of any Party, be determined by Reference. The Parties shall select a single neutral referee, who shall be a retired state or federal court judge with at least five years of judicial experience in civil matters. In the event that the Parties cannot agree upon a referee, the referee shall be appointed by the court. The Parties shall equally bear the fees and expenses of the referee unless the referee otherwise provides in the statement of decision.

2. WAIVER OF JURY TRIAL. In connection with a Reference or any other action or proceeding, whether brought in state or federal court, the Parties hereby expressly, intentionally and deliberately waive any right they may otherwise have to trial by jury of any Claim.

3. CONDUCT OF REFERENCE. Except as provided in this Agreement, the Reference shall be conducted pursuant to Applicable State Law. The referee shall determine all issues relating to the applicability, interpretation, legality and enforceability of this Agreement.

4. PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. No provision of this Agreement shall limit the right of any Party to (a) exercise self-help remedies including, without limitation, set-off, (b) foreclosure against or sell any collateral, by power of sale or otherwise or (c) obtain or oppose provisional or ancillary remedies from a court of competent jurisdiction before, after or during the pendency of the Reference. The exercise of, or opposition to, any such remedy does not waive the right of any Party to Reference pursuant to this Agreement.

5. LIMITATION ON DAMAGES. In the event that punitive damages are permitted under Applicable State Law, the amount thereof shall not exceed a sum equal to three times the amount of actual damages as determined by the referee.

6. SEVERABILITY. In the event that any provision of this Agreement is found to be illegal or unenforceable, the remainder of this Agreement shall remain in full force and effect.

7. MISCELLANEOUS. In the event that multiple Claims are asserted, some of which are found not subject to this Agreement, the Parties agree to say the proceedings of the Claims not subject to this Agreement until all other Claims are resolved in accordance with this Agreement. In the event that Claims are asserted against multiple parties, some of whom are not subject to this Agreement, the Parties agree to sever the Claims subject to this Agreement and resolve them in accordance with this Agreement. In the event of any challenge to the legality or enforceability of this Agreement, the prevailing Party shall be entitled to recover the costs and expenses, including reasonable attorneys' fees, incurred by it in connection therewith. Applicable State Law shall govern the interpretation of this Agreement. This Agreement fully states all of the terms and conditions of the Parties' agreement regarding the matters mentioned in, or incidental to, this Agreement. This Agreement supersedes all oral negotiations and prior writings concerning the subject matter hereof.

8. DEFINED TERMS. As used in this Agreement, the following terms shall have the respective meanings set forth below:

(a) "Applicable State Law" shall mean the law of the state which governs the Subject Documents; provided, however, that if any Party seeks to (i) exercise self-help remedies, including without limitation, set-off, (ii) foreclose against or sell any collateral, by power of sale or otherwise or (iii) obtain or oppose provisional or ancillary remedies from a court of competent jurisdiction before, after or during the pendency of the Reference, the law of the state where such collateral is located shall govern the exercise of or opposition to such rights and remedies.

(b) "Claim" shall mean any claim, cause of action, action dispute or controversy between or among the Parties, whether sounding in contract, tort or otherwise, which arises out of or relates to: (i) any of the Subject Documents;
(ii) any negotiations or communications relating to any of the Subject Documents, whether or not incorporated into the Subject Documents or any indebtedness evidenced thereby; or (iii) any alleged agreements, promises, representations or transactions in connection therewith.

(c) "Reference" shall mean a judicial reference conducted pursuant to this Agreement in accordance with Applicable State Law, as in effect at the time the referee is selected pursuant to Paragraph 1 of this Agreement.

(d) "Subject Documents" shall mean any and all documents, instruments and agreements previously, concurrently or hereafter executed by Obligor in favor of Bank, or between Obligor and Bank, which incorporate by reference an alternative dispute resolution agreement, any and all related documents, instruments and agreements, and any and all extensions, renewals, amendments and replacements of any of the foregoing; and "Subject Documents" shall mean any one of such Subject Documents.

This Agreement is duly executed by the Parties as of the date first written above.

UNION BANK OF CALIFORNIA, N.A.

By:           /s/
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          JAMES GOUDY

TITLE:    VICE PRESIDENT
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BY:  /s/ Robert J. Lelieur   Director of Finance
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     Robert J. Lelieur           TITLE

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