Common use of Prototype, First Iteration Clause in Contracts

Prototype, First Iteration. CUSTOMER shall supply an RTL or GDS database, as set forth in EXHIBIT B, to the FOUNDRY for fabrication of the Product. FOUNDRY shall fabricate unprobed prototype wafers or blind build units of the Product as set forth in Exhibit B. CUSTOMER may subcontract mask making to HSA and FOUNDRY, or HSA may subcontract photomask making to a designated subcontractor. In any case, the expense, responsibility and ownership of and for the masks remain CUSTOMER’s. If an HSA and FOUNDRY designated photomask subcontractor is used, the subcontractor shall be subject to the non-disclosure terms at least as restrictive as stated herein and be subject to the written consent of CUSTOMER and HSA, and FOUNDRY. CUSTOMER shall have a period of thirty (30) days to inspect the EXHIBIT B Prototypes. Within such thirty (30) day period, CUSTOMER shall provide HSA and FOUNDRY with a written notice of its acceptance or rejection of the Prototypes. The notice to be provided by CUSTOMER, if a rejection, shall set forth in sufficient and specific detail the reasons for rejection, and such notice shall be accompanied by the return of all of the Prototypes. If written notice of rejection or a request for additional evaluation time, not to exceed ten (10) business days, is not received by HSA and FOUNDRY within such thirty (30) day period, then the Prototypes are here agreed to have been accepted by CUSTOMER Upon receipt by HSA of the Prototypes and a notice from CUSTOMER rejecting the Prototypes, HSA and FOUNDRY shall evaluate the reasons for the rejection and inspect the Prototypes. If the reasons for rejection are due to a nonconformity of the Prototypes to the PCM data set out in Exhibit B, or are due to a nonconformity of the Prototypes of the post-simulation layout, then Foundry shall accept responsibility and correct any such nonconformity at its expense. In all other cases the Prototypes are here agreed to have been accepted and CUSTOMER shall accept responsibility for the rejection and pay the balance of the nonrecurring engineering charges at the rates set forth in EXHIBIT A and any additional charges required for a second iteration.