Exhibit 10.12.1

Confidential
Execution Version

[***] Certain information in this document has been excluded because it both (i)
is not material and (ii) would likely cause competitive harm to the registrant
if publicly disclosed.

JOINT VENTURE AGREEMENT
by and among
Aizu Fujitsu Semiconductor Limited
Fujitsu Semiconductor Limited
and
Transphorm, Inc.
Date
May 23, 2017

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TABLE OF CONTENTS
 
 
Page

Article I Definitions
1

 
 
Article II Representations and Warranties of the Parties
4

 
 
 
2.1
Representations and Warranties of AFSL and FSL
4

2.2
Representations and Warranties of TPH-A and TPH
6

 
 
 
Article III Operation of the Company
7

 
 
 
3.1
Activities
7

3.2
Cash Requirement of the Company
7

3.3
Business Plan
7

3.4
Independent Entity
8

 
 
 
Article IV Management of the Company
8

 
 
 
4.1
Board
8

4.2
Composition of the Board
8

4.3
Board Observers
9

4.4
Meetings; Quorum
9

4.5
Personnel; Representative Director
9

4.6
Statutory Auditors
9

4.7
Actions Requiring Unanimous Board Approval
9

4.8
Agreement Regarding Board
12

4.9
Procedure in the Event of Failure to Agree
12

 
 
 
Article  V Covenants
13

 
 
 
5.1
Capital Accounts
13

5.2
Provision of Support Services
13

5.3
GaN Equipment
13

5.4
Ancillary Agreements
13

5.5
Other Existing Agreements
14

5.6
Ownership of IP
14

5.7
Sufficiency of IP
14

5.8
Cooperation
14

5.9
Delivery of Financial Statements; Inspection Rights
14

5.10
TPH’ s Stockholder Approval
15

 
 
 
Article VI Rights and Obligations of FSL, TPH AND TPH-A
15

 
 
 
6.1
FSL
15

6.2
TPH
15

6.3
TPH-A
15

 
 
 
Article VII Term and Termination
15

 
 
 
7.1
Termination Prior to the Effective Date
15

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TABLE OF CONTENTS
(continued)
 
 
Page
7.2
Effect of Termination Prior to the Effective Date
16

7.3
Termination After the Effective Date
16

7.4
Dissolution and Winding-up
17

7.5
Shareholder Calls Upon Breach
17

7.6
Shareholder Calls Upon Bankruptcy After the Effective Date
18

7.7
Survival of Provisions After the Effective Date
19

7.8
Cooperation
19

 
 
 
Article VIII Transfer Restrictions
19

 
 
 
8.1
Restrictions on Transfers
19

8.2
Permissible Transfers
19

 
 
 
Article IX Put Option and Call Option
19

 
 
 
9.1
AFSL’s Right to Require the Purchase of the Shares by TPH or TPH-A
19

9.2
TPH-A’s Right to Require the Purchase of the Shares from FSL or AFSL
20

9.3
Conditions to Put Option or Call Option Closing
21

9.4
Other Obligations
22

 
 
 
Article X Treatment of Employees
22

 
 
 
10.1
New Terms and Conditions for Employment
22

10.2
Representations and Warranties Regarding Employment
22

 
 
 
Article XI Miscellaneous
23

 
 
 
11.1
No Partnership
23

11.2
Limitations on Parties’ Authority
23

11.3
Indemnification
23

11.4
Confidentiality
24

11.5
Access to Company Information After the Put Closing Date or the Call Closing
Date
24

11.6
Expenses
24

11.7
Notices
25

11.8
Successors and Assigns
26

11.9
Waiver
26

11.10

Announcements
26

11.11

Entire Agreement
26

11.12

Amendments
26

11.13

Limitations on Rights of Third Persons
26

11.14

Governing Law; Language
26

11.15

Resolution of Disputes
26

11.16

Severability
27

11.17

Execution in Counterparts
28

11.18

Titles and Headings
28

11.19

Counsel only to TPH and TPH-A
28

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JOINT VENTURE AGREEMENT
THIS JOINT VENTURE AGREEMENT (“Agreement”) is made as of this 23rd day of May,
2017 by and among Aizu Fujitsu Semiconductor Limited (“AFSL”), a kabushiki
kaisha incorporated in Japan, with an address at No.4 Kogyo Danchi,
Monden-Machi, Aizu Wakamatsu, Fukushima, Japan, Fujitsu Semiconductor Limited
(“FSL”), a kabushiki kaisha incorporated in Japan, with an address at
Shin-Yokohama Chuo Building, 2-100-45, Shin-Yokohama, Kohoku-Ku, Yokohama,
Kanagawa, Japan, as a one hundred percent (100%) shareholder of AFSL, and
Transphorm, Inc. (“TPH”), a corporation incorporated in Delaware, with an
address at 75 Castilian Drive, Goleta, California 93117, U.S.A. (collectively
referred to as the “Parties” and individually, a “Party”).
W I T N E S S E T H:
WHEREAS, Aizu Fujitsu Semiconductor Wafer Solution Limited (“AFSW” or the
“Company”), a kabushiki kaisha incorporated in Japan, with an address at No.3
Kogyo Danchi, Monden-Machi, Aizu Wakamatsu, Fukushima, Japan has been engaged
with the business of 150mm wafer foundry services and other services related
thereto (the “Business”).
WHEREAS, prior to the Effective Date (as defined below), TPH intends to
incorporate a new wholly-owned subsidiary (“TPH-A”) and make it a Party hereto.
WHEREAS, with the consent of the Parties and the board of directors of the
Company, AFSL has entered into the Shares Purchase Agreement dated May 23, 2017
(the “SPA”), by and among the Parties hereof, pursuant to which AFSL will sell
and transfer [***] shares of the issued and outstanding shares in the Company
(representing [***] of the issued and outstanding shares in the Company) to
TPH-A; and
WHEREAS, the Parties intend to regulate and agree upon the organization and
operation of the Company and each Party’s rights and obligations and other
matters regarding the Company; and
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Parties agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
1.1    “Affiliate” of AFSL, FSL, TPH-A or TPH, as the case may be, means a
Person or group of Persons: (a) which owns or Controls, directly or indirectly,
AFSL, FSL, TPH-A or TPH; (b) which is owned or Controlled, directly or
indirectly, by AFSL, FSL, TPH-A or TPH; or (c) which is owned or Controlled,
directly or indirectly, by any Person described in Section 1.1(a) or (b).
1.2    “AFSW Secondment Agreement” has the meaning ascribed to that term in the
SPA.

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1.3    “Amended Process Development Agreement” has the meaning ascribed to that
term in Section 2.1.7.
1.4    “Ancillary Agreements” means the SPA, the AFSW Secondment Agreement, the
TPH-J Secondment Agreement, the Wafer Supply Agreement, the Joinder Agreement,
the Process Development Amendment and the Services Agreement Amendment.
1.6    “Board” means the board of directors of the Company.
1.7    “Business” has the meaning ascribed to that term in the Recitals.
1.8    “Business Day” means any day other than a Saturday, Sunday or public
holiday under the laws of Japan, or any other day on which banking institutions
are authorized to close in Tokyo, Japan or in New York, New York, USA.
1.9    “Business Plan” has the meaning ascribed to that term in Section 3.3.1.
1.10    “Call Shares” means any and all Shares held by AFSL or FSL or any other
Person Controlled by AFSL or FSL, as the case may be, on the date of the Call
Exercise Notice.
1.11    “Change of Control Transaction” means either (a) the acquisition of the
Company by an entity not affiliated with FSL or TPH by means of any transaction
or series of related transactions (including, without limitation, any stock
acquisition, merger, demerger or share exchange but excluding any sale of stock
for capital raising purposes) other than a transaction or series of related
transactions in which the holders of the voting securities of the Company
outstanding immediately prior to such transaction or series of related
transactions retain, immediately after such transaction or series of related
transactions, as a result of shares in the Company held by such holders prior to
such transaction or series of related transactions, at least a majority of the
total voting power represented by the outstanding voting securities of the
Company or such other surviving or resulting entity (or if the Company or such
other surviving or resulting entity is a wholly-owned Subsidiary (hereinafter
defined) immediately following such acquisition, its parent); or (b) a sale,
lease, transfer, exclusive license or other disposition of all or substantially
all of the assets of the Company and its Subsidiaries taken as a whole by means
of any transaction or series of related transactions with a party other than FSL
or its Affiliates or TPH or its Affiliates, except where such sale, lease,
transfer, exclusive license or other disposition is to a wholly owned Subsidiary
of the Company. 
1.12    “Company Assets” has the meaning ascribed to that term in the SPA.
1.13    “Control” means the power, right or authority to direct or cause the
direction of the management or policies of a Person, or to elect a majority of
the board of directors or similar governing body of a Person, whether through
the ownership of securities or similar ownership interest, by contract or
otherwise, and references to “change of control” include the transfer,
disposition or relinquishment, whether directly or indirectly, of Control. 
1.14    “Designated Individuals” has the meaning ascribed to that term in
Section 4.9.
1.15    “Designated Nuclear Waste” has the meaning ascribed to that term in the
SPA.

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1.16    “Director” has the meaning ascribed to that term in Section 4.2.
1.17    “Effective Date” means the date that the Initial Closing occurs.
1.18    “Encumbrance” has the meaning ascribed to that term in the SPA.
1.19    “Funded Work” has the meaning ascribed to that term in Section 2.1.7.
1.20    “GaN Equipment” has the meaning ascribed to that term in Section 5.3.
1.21    “GaN Wafers” has the meaning ascribed to that term in the Amended
Process Development Agreement.
1.22    “Governmental Authority” means any government, state (or any subunit
thereof), political subdivision or regulatory authority, whether domestic,
foreign or multinational, or any agency, authority, bureau, commission,
department, or court of any government state, political subdivision or
regulatory authority or similar body or instrumentality thereof, or any federal
state, local, governmental, foreign or arbitral tribunal. 
1.23    “Governmental Approvals” mean all consents, approvals, orders, permits
or authorizations of, and registrations, declarations and filings with, and
expirations of waiting periods imposed by, any court, legislative body,
administrative agency, commission or other Governmental Authority and required
in connection with the transactions contemplated herein.
1.24    “Harmful Materials” has the meaning ascribed to that term in the SPA. 
1.25    “Initial Closing” has the meaning ascribed to that term in the SPA. 
1.26    “Intellectual Property Rights” has the meaning ascribed to that term in
the SPA. 
1.27    “Japanese GAAP” means generally accepted accounting principles in
Japan. 
1.28    “Joinder Agreement” has the meaning ascribed to that term in Section
6.3.
1.29    “Joint Venture” means the operation of the Company pursuant to this
Agreement from the Effective Date to the earliest to occur of: (i) the Put
Closing Date (hereinafter defined), (ii) the Call Closing Date (hereinafter
defined), or (iii) termination of this Agreement pursuant to Article VII hereof.
1.30    “Laws” means laws, statutes, ordinances, rules requirements, decrees,
orders or regulations.
1.31    “Net Book Value” has the meaning ascribed to that term in the SPA. 
1.32    “Option Starting Date” means February 1, 2020. 
1.33    “Person” includes any individual, company, corporation, firm,
partnership, joint venture, association, organization or trust in each case
whether or not having a separate legal identity.

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1.34    “Pro Rata Ownership” means for any Shareholder, the ratio equal to the
total number of Shares held by such Shareholder at any given time to the total
number of outstanding Shares at such time.
1.35    “Process Development Amendment” has the meaning ascribed to that term in
the SPA.
1.36    “Put Shares” means any and all Shares held by AFSL or FSL or any other
Person Controlled by AFSL or FSL, as the case may be, on the date of the Put
Exercise Notice. 
1.37    “Sale Shares” has the meaning ascribed to that term in the SPA. 
1.38    “Section” means a section of this Agreement. 
1.39    “Seller Disclosure Schedule” has the meaning ascribed to that term in
the SPA. 
1.40    “Services Agreement Amendment” has the meaning ascribed to that term in
the SPA.
1.41    “Shareholder” means each Person that holds Shares. 
1.42    “Shares” means the shares of authorized and outstanding capital of the
Company. 
1.43    “Shares Purchase Price” has the meaning ascribed to that term in the
SPA. 
1.44    “SPA” has the meaning ascribed to that term in the Recitals. 
1.45    “Subsidiary” means a Person in which a Party hereto beneficially owns at
least fifty percent (50%) of the equity interest or voting power of such
Person. 
1.46    “Tax” has the meaning ascribed to that term in the SPA.
1.47    “Tax Return” has the meaning ascribed to that term in the SPA.
1.48    “TPH-J” means Transphorm Japan, Inc., a kabushiki kaisha incorporated in
Japan, which is a wholly-owned Subsidiary of TPH.
1.49    “TPH-J Secondment Agreement” has the meaning ascribed to that term in
the SPA. 
1.50    “Wafer Supply Agreement” has the meaning ascribed to that term in the
SPA. 
Unless the context clearly requires otherwise, reference to the singular shall
include the plural, reference to the plural shall include the singular and
reference to a gender shall include all genders.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
2.1    Representations and Warranties of AFSL and FSL.   AFSL and FSL hereby
represent and warrant to TPH-A and TPH as of the date hereof and as of the
Effective Date as follows:

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2.1.1    Organization.   Each of AFSL and FSL is a kabushiki kaisha, duly
organized, validly existing and in good standing under the laws of Japan, and
has the corporate power and authority to execute, deliver and perform its
obligations under this Agreement.
2.1.2    Authorization; Execution and Delivery; Enforceability.   All corporate
action on the part of AFSL and FSL necessary for the authorization, execution
and delivery of this Agreement and for the performance of all of their
respective obligations hereunder has been taken. This Agreement has been duly
executed and delivered by each of AFSL and FSL and constitutes a valid and
legally binding obligation of each of them.
2.1.3    Government and Other Consents.   No consent, authorization, license,
permit, registration or approval of, or exemption or other action by, any
Governmental Authority, or any other Person, is required in connection with
AFSL’s or FSL’s execution, delivery and performance of this Agreement.
2.1.4    Effect of Agreement.   Except as set forth in Section 3.2.3 of the
Seller Disclosure Schedule, each of AFSL’s and FSL’s execution, delivery and
performance of this Agreement will not (i) violate the Articles of Incorporation
of either of them or any provision of Law, (ii) violate any judgment, order,
writ, injunction or decree of any court applicable to AFSL, FSL or the Company,
(iii) result in the breach of, give rise to a right of termination, cancellation
or acceleration of any obligation with respect to (presently or with the giving
of notice, the passage of time or both), or otherwise be in conflict with any
term of, or affect the validity or enforceability of, any agreement or other
commitment to which AFSL, FSL or the Company is a party and which would
materially and adversely affect either of them or the Company, or (iv) result in
the creation of any lien, pledge, mortgage, claim, charge or encumbrance upon
any assets of AFSL, FSL or the Company.
2.1.5    Litigation.   There are no actions, suits or proceedings pending or, to
either AFSL’s or FSL’s knowledge, threatened, against AFSL or FSL before any
Governmental Authority which question AFSL’s or FSL’s right to enter into or
perform this Agreement, or which question the validity of this Agreement.
2.1.6    Equipment.   FSL (as of the date hereof) and the Company (as of the
Effective Date) have valid and perfected ownership of all GaN Equipment, free
and clear of any Encumbrances. There are no third party agreements or licenses
with respect to any software or firmware required to operate any GaN Equipment.
2.1.7    Sufficiency of IP.   As of the Effective Date, the Intellectual
Property Rights owned by the Company, together with the Intellectual Property
Rights licensed to TPH pursuant to (i) that certain Process Technology
Development Services Agreement, dated as of November 28, 2013, by and between
FSL and TPH, and (ii) the Process Development Amendment ((i) and (ii)
collectively, the “Amended Process Development Agreement”), shall constitute all
Intellectual Property Rights owned by FSL, AFSL, Fujitsu Limited or their
Affiliates that are or will be necessary for the continued operation of the
Business for GaN Wafers following the Effective Date in the manner conducted as
of the Effective Date. For the avoidance of doubt, the Business does not include
the Company’s performance of the GaN work commissioned and funded by Fujitsu
Limited and its Affiliates

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(including Fujitsu Laboratories Ltd., but excluding FSL and AFSL) to the Company
(such work, the “Funded Work”).
2.2    Representations and Warranties of TPH-A and TPH. 
2.2.1    TPH hereby represents and warrants to AFSL and FSL as of the date
hereof and as of the Effective Date as follows:
(i)    Organization.   TPH is a corporation, duly organized, validly existing
and in good standing under the laws of the State of Delaware, and has the
corporate power and authority to execute, deliver and perform its obligations
under this Agreement.
(ii)    Authorization; Execution and Delivery; Enforceability.   All corporate
action on the part of TPH necessary for the authorization, execution and
delivery of this Agreement and for the performance of all its obligations
hereunder has been taken. This Agreement has been duly executed and delivered by
TPH and constitutes a valid and legally binding obligation of TPH.
(iii)    Government and Other Consents.   No consent, authorization, license,
permit, registration or approval of, or exemption or other action by, any
Governmental Authority, or any other Person, is required in connection with
TPH’s execution, delivery and performance of this Agreement.
(iv)    Effect of Agreement.   TPH’s execution, delivery and performance of this
Agreement will not (i) violate the Certificate of Incorporation or Bylaws of
TPH, or any provision of Law, (ii) violate any judgment, order, writ, injunction
or decree of any court applicable to TPH, (iii) result in the breach of, give
rise to a right of termination, cancellation or acceleration of any obligation
with respect to (presently or with the giving of notice, the passage of time or
both), or otherwise be in conflict with any term of, or affect the validity or
enforceability of, any agreement or other commitment to which TPH is a party and
which would materially and adversely affect it or the Company, or (iv) result in
the creation of any lien, pledge, mortgage, claim, charge or encumbrance upon
any assets of TPH.
(v)    Litigation.   There are no actions, suits or proceedings pending or, to
TPH’s knowledge, threatened, against TPH before any Governmental Authority which
question TPH’s right to enter into or perform this Agreement, or which question
the validity of this Agreement.
2.2.2    TPH-A hereby represents and warrants to AFSL and FSL as of the date of
the Joinder Agreement and as of the Effective Date as follows:
(i)    Organization.   TPH-A is a kabushiki kaisha, duly organized, validly
existing and in good standing under the laws of Japan, and has the corporate
power and authority to execute, deliver and perform its obligations under this
Agreement.
(ii)    Authorization; Execution and Delivery; Enforceability.   All corporate
action on the part of TPH-A necessary for the authorization, execution and
delivery of the Joinder Agreement, and for the performance of all its
obligations thereunder and hereunder has been taken.

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The Joinder Agreement has been duly executed and delivered by TPH-A and
constitutes a valid and legally binding obligation of TPH-A.
(iii)    Government and Other Consents.   No consent, authorization, license,
permit, registration or approval of, or exemption or other action by, any
Governmental Authority, or any other Person, is required in connection with
TPH-A’s execution, delivery and performance of the Joinder Agreement and this
Agreement.
(iv)    Effect of Agreement.   TPH-A’s execution, delivery and performance of
the Joinder Agreement and this Agreement, as applicable, will not (i) violate
the Articles of Incorporation of TPH-A, or any provision of Law, (ii) violate
any judgment, order, writ, injunction or decree of any court applicable to
TPH-A, (iii) result in the breach of, give rise to a right of termination,
cancellation or acceleration of any obligation with respect to (presently or
with the giving of notice, the passage of time or both), or otherwise be in
conflict with any term of, or affect the validity or enforceability of, any
agreement or other commitment to which TPH-A is a party and which would
materially and adversely affect it or the Company, or (iv) result in the
creation of any lien, pledge, mortgage, claim, charge or encumbrance upon any
assets of TPH-A.
(v)    Litigation.   There are no actions, suits or proceedings pending or, to
TPH-A’s knowledge, threatened, against TPH-A before any Governmental Authority
which question TPH-A’s right to enter into or perform this Agreement and the
Joinder Agreement, or which question the validity of this Agreement and the
Joinder Agreement.
ARTICLE III
OPERATION OF THE COMPANY
3.1    Activities.   The Company shall manufacture the semiconductor products
for which AFSL/FSL or TPH-A/TPH-J/TPH places an order to the Company from time
to time during the term of this Agreement, using the technologies made available
by AFSL/FSL and TPH-A/TPH-J/TPH, respectively. With the consent of the Board in
compliance with Section 4.7, the Company may manufacture semiconductor products
directly for Persons who are not parties to this Agreement.
3.2    Cash Requirement of the Company.   All cash requirements of the Company
shall be satisfied from cash generated by the operations of the Company, from
external financing (on a non-recourse basis and without guarantees of the
Shareholders or their Affiliates) procured by the Company in its own name, from
financing by the Shareholders (the burden of such financing shall be allocated
to a Shareholder based on Pro Rata Ownership) and from the initial
capitalization.
3.3    Business Plan.
3.3.1    Conduct of Business.   The Company shall conduct its Business in
conformity with a business plan jointly prepared and agreed to by the Parties on
or prior to the Effective Date, as may be amended from time to time after the
Effective Date with the unanimous approval of the Board (the “Business Plan”).
In case where the Parties have not agreed on the Business Plan as of the date
hereof, then the Parties shall continue to discuss in good faith immediately
following the execution of this Agreement and agree on the Business Plan prior
to the Effective Date.

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3.3.2    Treatment of the Business Plan.   The Parties expect the Company to
comply with the Business Plan; provided, however, deviations from the Business
Plan that result in an increase or decrease of less than twenty percent (20%) of
the original cost or revenue to the Company attributable to such item as set
forth in the Business Plan shall not require the consent of the Parties, so long
as all such deviations in any given quarter do not represent a deviation of more
than ten percent (10%) of total revenue or total expense, as the case may be, in
the aggregate for the quarter in which the deviation occurs. No Party shall,
however, have any assurance that the Company will achieve the Business Plan,
except as to the number of wafers that each of FSL/AFSL and TPH/TPH-A commits to
purchase in the Business Plan. In the event that FSL/AFSL or TPH/TPH-A, as
applicable, has failed to purchase its applicable number of wafers in accordance
with the Business Plan, then such Party shall compensate the Company for the
shortfalls in the actual revenue of the Company attributable to its failure to
purchase such wafers versus its share of the planned revenue set forth in the
Business Plan. As soon as it becomes practicable after the end of each quarter,
but not later than thirty (30) days thereafter, the Parties shall review the
actual revenue of the Company versus the Business Plan based on the wafer
loading by each of FSL/AFSL and TPH/TPH-A for the previous quarter, and if there
are any shortfalls in revenue from the Business Plan in such quarter, the
compensation for such shortfalls shall be made by a Party who caused such
shortfalls to the Company within sixty (60) days after the end of the fiscal
year of the Company where such quarter resides. For the avoidance of doubt, (i)
if a Party, its Affiliate or another third party purchases such Party’s
committed number of wafers in the Business Plan, such Party shall not be deemed
to have caused a shortfall in the revenue of the Company and (ii) the revenue
attributable to a Party’s failure to purchase its number of wafers in accordance
with the Business Plan shall equal (A) the number of wafers not purchased,
multiplied by (B) the agreed price (as set forth in the Business Plan) per
wafer.
3.3.3    Revised Budget.   The budget of the Company shall be reviewed quarterly
and may be revised by the Company with the unanimous approval of the Board. Such
revised budget shall be deemed as the then-current Business Plan.
3.4    Independent Entity.   The Company shall be operated as an independent
business entity, even though the Parties may provide products, personnel and
services.
ARTICLE IV
MANAGEMENT OF THE COMPANY
4.1    Board.  Except where the approval of the Shareholders is required by
applicable Laws, the Articles of Incorporation or this Agreement, the business
and affairs of the Company shall be managed by the Board.
4.2    Composition of the Board.  The Board shall consist of five (5) members
(each, a “Director”), three (3) of whom shall be nominated by AFSL and two (2)
of whom shall be nominated by TPH-A, and each Shareholder shall vote all of its
Shares in favor of the election of the Directors nominated by the other. Each of
AFSL and TPH-A shall have the right to nominate a replacement for any Director
previously nominated by it, and each shall vote all of its Shares in favor of
the election of such replacement. A Director nominated by AFSL shall be a
Chairman of the Board for all meetings. In the event that a Shareholder who is
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Director by written notice to the Company, all Shareholders shall be obligated
to vote their Shares in favor of such removal.
4.3    Board Observers.   Representatives of TPH and FSL may attend and
participate in any meeting of the Board, but shall in all other respects be a
nonvoting observer.
4.4    Meetings; Quorum.
4.4.1    Regular meetings of the Board shall be held at least once per three (3)
months at such place and time as set forth in notices provided to the Directors
at least ten (10) Business Days in advance of such meeting. Special meetings of
the Board shall be held upon notice of not less than three (3) Business Days
setting forth an agenda or purpose for the meeting; provided, however, that any
Director may waive compliance with such notice requirement before or after the
meeting. Special meetings of the Board may be called by at least two (2)
Directors upon three (3) Business Days’ notice to the Chairman, which notice
shall include an agenda for such meeting.
4.4.2    Any Director may propose items for the agendas of any meeting of the
Board whether in advance or at such meeting.
4.4.3    A quorum shall be deemed to exist for purposes of Board actions so long
as at least a majority of the total number of Directors then in office are
present, provided that proper notice of such Board meeting has been given, in
accordance with Section 4.4.1, to each of the Directors then in office.
Directors may participate in Board meetings in person or electronically
(including video or audio conference) in accordance with the Japanese Companies
Act.
4.4.4    Proceedings of Board meetings shall be in Japanese/English, as the case
may be, and a record of each Board meeting shall be made in Japanese and
English, and sent promptly to each Shareholder. In the event of a conflict
between the English and Japanese versions, the Japanese version shall control.
4.4.5    Minutes of the meetings of the Board shall be placed and duly
maintained at the office of the Company.
4.4.6    Any action that may be taken at a meeting of the Board may be taken in
writing in accordance with the Company’s Articles of Incorporation.
4.5    Personnel; Representative Director.   One of the Directors to be
nominated by AFSL shall be the manager of the Company, who shall also be the
Representative Director (as defined under the Japanese Companies Act).
4.6    Statutory Auditors.   The Company shall have one (1) statutory auditor.
The statutory auditor shall be appointed by AFSL, subject to the approval of
TPH-A, which approval shall not be unreasonably withheld.
4.7    Actions Requiring Unanimous Board Approval.   The Parties agree that the
following matters require the unanimous approval of the Directors present at a
properly-noticed Board meeting,

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and no Shareholder shall convene a shareholders meeting with respect to the
following matters without the prior written consent of the other Shareholder:
4.7.1    revising the budget or Business Plan of the Company;
4.7.2    making any capital contribution in excess of the capital required
pursuant to the Business Plan;
4.7.3    manufacturing semiconductor products directly for Persons who are not
parties to this Agreement;
4.7.4    selling, transferring, leasing, assigning or otherwise disposing of the
property or assets of the Company, or contracting to do so, whether in a single
transaction or series of related transactions;
4.7.5    consummating a Change of Control Transaction including without
limitation merger, demerger, share exchange, liquidating or dissolving the
Company, the entering into of a composition with creditors or the authorization
of any filing for bankruptcy by the Company or the transformation of the Company
into another type of legal entity;
4.7.6    entering into any agreement to effect a Change of Control Transaction
or undertaking any action which effects a Change of Control Transaction, except
pursuant to the exercise of the Put Option or Call Option, calls pursuant to
Sections 7.5 and 7.6 and transfers permitted pursuant to Sections 8.1 and 8.2;
4.7.7    issuing any shares of the authorized capital of the Company or the
authorization or issuance of any new class or series of capital of the Company
or any securities convertible into or exchangeable for any class or series of
capital of the Company;
4.7.8    recapitalizing, reclassifying, consolidating, subdividing or
converting, or altering of any rights attaching to, any class or series of
authorized capital of the Company;
4.7.9    entering into any joint venture, partnership or profit-sharing
agreement with any third party;
4.7.10    purchasing or otherwise acquiring, or agreeing to purchase or
otherwise acquire material assets of any other Person or any shares of capital
stock of, or similar interest in, any other Person, or any other asset or group
of assets, in a single transaction or series of related transactions;
4.7.11    removing any Director during his/her term of office, unless such
Director was requested to be removed by the Shareholder that nominated him/her;
4.7.12    amending or repealing any provision of the Articles of Incorporation
or other constituent documents of the Company, including, without limitation,
the changing of the business purpose of the Company;

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4.7.13    declaring or paying any dividend or distribution;
4.7.14    adopting or changing a significant tax or accounting practice or
principle of the Company or making any significant tax or accounting election by
the Company;
4.7.15    making or changing any election in respect of Taxes, filing any
amendment to a Tax Return, entering into any agreement in respect of Taxes,
settling, responding to, or making any filing or submission in respect of any
audit, claim or assessment in respect of Taxes, or consenting to any extension
or waiver of the limitation period applicable to any claim or assessment in
respect of Taxes, other than those approved by the Directors nominated by TPH-A
as immaterial or in the ordinary course of the Business, such approval not to be
unreasonably withheld;
4.7.16    settling or abandoning, on the part of the Company or any Party or
Affiliate of any Party, any legal action that is in the name of the Company or
that directly affects the Company, which legal action (A) involves a claim or
claims for monetary damages, (B) involves a claim or claims by or against any
Governmental Authority, (C) involves any claims raising antitrust issues, or
(D) involves a request for injunctive relief;
4.7.17    instituting or determining the strategy of any legal action in the
name of the Company that (A) involves a claim or claims for monetary damages,
(B) involves a claim or claims by or against any Governmental Authority,
(C) involves any claims raising antitrust issues, or (D) involves a request for
injunctive relief;
4.7.18    entering into or amending an agreement between the Company and a Party
or its Affiliates, other than (A) as expressly contemplated by this Agreement or
the SPA, or (B) such amendments that result in an increase or decrease of less
than 20% of the original cost or revenue to the Company attributable to such
agreement as set forth in the Business Plan, so long as all such deviations in
any given quarter do not represent a deviation of more than 10% of total revenue
or total expense, as the case may be, in the aggregate for the quarter in which
the deviation occurs;
4.7.19    incorporating, liquidating, acquiring or transferring any legal
entities;
4.7.20    carrying on any business other than the Business and the businesses
currently conducted by the Company as of the Effective Date;
4.7.21    creating, incurring, assuming or permitting to exist any indebtedness,
except to the extent consistent with the then-current Business Plan;
4.7.22    creating, incurring, assuming or permitting to exist, directly or
indirectly, any lien or other encumbrance upon any property, now owned or
hereafter acquired, other than incidental liens or liens to secure indebtedness
authorized pursuant to Section 4.7.21;
4.7.23    making any loan or advance or the giving of any credit by the Company
(other than normal trade credit) to any Person or the giving of any guarantee or
indemnity to secure the liabilities or obligations of any Person or the creation
of any mortgage, claim, charge, lien, security interest, easement, right of way,
pledge or other encumbrance over the whole or any part of the property or assets
of the Company;

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4.7.24    entering into any contract, agreement, commitment, transaction or
series of transactions requiring the expenditure by the Company, or the making
of any investment, which would exceed thirty million Japanese Yen (¥30,000,000)
in the aggregate, except for operational expenditures approved in the Business
Plan;
4.7.25    making any material change in (A) the role and responsibility of
certain Company employees specified as “Key Employees” in the Appendix 1
attached hereto or (B) the Company’s organization;
4.7.26    adopting, materially amending or terminating any Employee Plan,
entering into any change in control, severance or similar agreement or any
retention or similar agreement with any officer, employee, director or
consultant of the Company (including seconded employees), or hiring or making an
offer to hire any new employee;
4.7.27    increasing or making any other change that would result in increased
cost to the Company to the salary, wage rate, incentive compensation
opportunity, employment status, title of other compensation payable or to be
become payable to any current or former employee, officer, director, or
consultant of the Company (including seconded employees);
4.7.28    entering into, amending or terminating any collective bargaining
agreement, labor union contract, works council agreement or other contract with
any labor organization or union;
4.7.29    using any Company Assets for (A) the storage, manufacture, processing
or disposal of any Harmful Materials, except for the storage of the Designated
Nuclear Waste to the extent and in the manner set forth in Article 3.18 of the
SPA, or (B) the processing or disposal of industrial waste; or
4.7.30    increasing or decreasing the size of the Board.
Notwithstanding the above, at the request of TPH or TPH-A, the Board shall,
without following the procedures set forth in this subsection, approve and
direct management to make operational changes to portions of the Company that
(i) are specific solely to GaN operation or GaN Equipment and (ii) do not have a
material and adverse effect on the Company’s profit and loss.
4.8    Agreement Regarding Board.   Each Shareholder shall take all actions
necessary to cause the Directors nominated by it to abide by and implement all
of the provisions of this Agreement.
4.9    Procedure in the Event of Failure to Agree.   In the event that the Board
has been unable to resolve any matter set forth in Section 4.7 within thirty
(30) Business Days after such matter was referred to the Board, then any Party
may bring the matter to the attention of the Chief Executive Officer of FSL and
the Chief Executive Officer of TPH (the “Designated Individuals”) for a
decision, which joint decision of the Designated Individuals shall be final and
binding on the Company, and the Parties shall direct the Directors nominated by
them to exercise their voting rights and take all other necessary steps to
ensure that such resolution is fully and promptly carried into effect. Should no
solution be agreed upon within sixty (60) days after submission of the matter to
the Designated Individuals, then any Party may refer the matter for resolution
in accordance with the dispute resolution procedure set forth in Section 11.15.

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ARTICLE V
COVENANTS
5.1    Capital Accounts.   The capital accounts of each Shareholder shall be
updated in proportion to such Shareholder’s Pro Rata Ownership.
5.2    Provision of Support Services. 
5.2.1    AFSL shall provide support services agreed upon by AFSL/FSL and the
Company to the Company, with adequate consideration to FSL/AFSL and/or
FSL’s/AFSL’s designees, the detailed terms and conditions of which services
shall be the same as already have been provided in the applicable agreement(s)
by and between AFSL/FSL and the Company (if any) or shall be discussed and
determined by the Parties.
5.2.2    TPH and TPH-A shall cause the Company to provide support services
agreed upon by AFSL/FSL and the Company to FSL/AFSL and/or FSL’s/AFSL’s
designees, with adequate consideration to the Company, the detailed terms and
conditions of which services shall be the same as already have been provided in
the applicable agreement(s) by and between AFSL/FSL and the Company (if any) or
shall be discussed and determined by the Parties.
5.3    GaN Equipment.   During the term of this Agreement, TPH-A/TPH shall be
responsible for the costs and expenses agreed by the Parties to maintain and/or
procure the equipment for wafer processing specified in the Appendix 2 attached
hereto and as amended from time to time upon the mutual agreement of the Parties
(the “GaN Equipment”). At TPH’s sole option, TPH or TPH-A may purchase the GaN
Equipment by completion of payment of the purchase price or depreciation cost
for such equipment as set forth in Appendix 2. In such case: (i) TPH-A or TPH,
as the case may be, shall acquire sole and exclusive title to the GaN Equipment,
free and clear of all Encumbrances, and none of FSL, AFSL or the Company shall
have any right, title or interest in such GaN Equipment, (ii) such GaN Equipment
shall be clearly labeled as the property of TPH-A or TPH, as the case may be,
and (iii) FSL and AFSL shall cause to be assigned to TPH-A or TPH, as the case
may be, all licenses and warranties for such GaN Equipment and the software or
firmware required to operate such GaN Equipment that are attached to, installed
on, or embodied in such GaN Equipment as of the Effective Date. During the term
if this Agreement, the GaN Equipment shall be used exclusively in GaN wafer
processing, and shall not be used in the silicon wafer processing for AFSL’s or
FSL’s current products. In the event that the Company needs to use the GaN
Equipment to provide products or services to any customer other than TPH-A or
TPH or their Affiliates prior to the Put Closing Date or the Call Closing Date,
the Company shall reimburse TPH-A or TPH for the use of such equipment in the
manner to be discussed in good faith and agreed upon by the Parties, which
reimbursement may be offset against amounts otherwise owing from TPH-A or TPH,
as the case may be, to the Company.
5.4    Ancillary Agreements.   Prior to the Effective Date, the Parties shall
take any actions necessary to cause the Wafer Supply Agreement, the AFSW
Secondment Agreement, TPH-J Secondment Agreement, the Joinder Agreement and the
Process Development Amendment to go into effect as of the Effective Date.

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5.5    Other Existing Agreements.   The Parties shall ensure that the following
agreements stay in full force and effect without modification during the term of
this Agreement unless they are terminated or modified pursuant to the terms and
conditions thereunder:
5.5.1    the Intellectual Property License Agreement, dated November 28, 2013,
by and between TPH and Fujitsu Limited;
5.5.2    the Secondment Agreement, dated as of January 31, 2014, by and between
Fujitsu Limited and TPH-J; and
5.5.3    the Fujitsu intercompany license agreement and Fujitsu intercompany
services agreement.
5.6    Ownership of IP.   The Parties agree that the ownership of Intellectual
Property Rights in technology developed by or for the Company pursuant to an
Ancillary Agreement shall be governed by such Ancillary Agreement.
5.7    Sufficiency of IP.   FSL and AFSL represent and warrant that, as of the
Put Closing Date or the Call Closing Date, the Intellectual Property Rights
owned by the Company, together with the Intellectual Property Rights licensed to
TPH pursuant to the Amended Process Development Agreement shall constitute all
Intellectual Property Rights owned by FSL, AFSL, Fujitsu Limited or their
Affiliates that are or will be necessary for the continued operation of the
Business for GaN Wafers following the Put Closing Date or Call Closing Date in
the manner conducted as of the Put Closing Date or Call Closing Date, as
applicable. For the avoidance of doubt, the Business does not include the
Company’s performance of the Funded Work.
5.8    Cooperation.   The Parties shall cooperate reasonably with each other to
obtain and maintain all necessary approvals and registrations to effect this
Agreement and all related agreements and documents; provided, however, that the
Parties shall not be required to change any provision of this Agreement to
obtain or maintain any such approvals or registrations.
5.9    Delivery of Financial Statements; Inspection Rights.   The Parties shall
cause the Company to deliver to each Party, at the Company’s expense, (i) annual
audited and quarterly and monthly unaudited financial statements prepared in
accordance with Japanese GAAP consistently applied, including any independent
auditor’s report or opinion thereon, if any, and (ii) any information necessary
to enable a Party to prepare consolidated financial statements, in each case
within sixty (60) days after the end of each fiscal year of the Company and
within thirty (30) days after the end of each quarterly accounting period of the
Company and calendar month. Each Party will indemnify the Company and hold it
harmless for, from and against any claims, demands, costs or expenses arising
out of or relating to such consolidated financial statements, provided that such
indemnity shall not apply to claims, demands, costs or expenses to the extent
they are related to the Company’s financial statements provided to such Party.
In addition to any inspection rights granted under Law, upon notice to the
Company of at least twenty-four (24) hours, each Party shall have full access to
all properties, books of account, and records of the Company.

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5.10    TPH’s Stockholder Approval.   TPH shall obtain approval of the
acquisition of the Option Shares (as defined in the SPA) from the requisite
stockholders of TPH in accordance with Delaware Law and TPH’s Certificate of
Incorporation and Bylaws, which approval shall have been obtained prior to the
Effective Date, to the extent such an approval is permissible under Delaware
Law.
ARTICLE VI
RIGHTS AND OBLIGATIONS OF FSL, TPH AND TPH-A
6.1    FSL.   FSL, as a one hundred percent (100%) shareholder of AFSL, shall
cause AFSL to perform all obligations of AFSL hereunder.
6.2    TPH.   Until TPH-A is incorporated and made a party hereto, TPH shall
assume all obligations of TPH-A hereunder. After TPH-A is incorporated and made
a party hereto, TPH, as a one hundred percent (100%) shareholder of TPH-A, shall
cause TPH-A to perform all obligations of TPH-A hereunder.
6.3    TPH-A.   TPH shall cause TPH-A to execute and deliver a joinder agreement
to the Parties substantially in the form attached hereto as Exhibit A (the
“Joinder Agreement”), and TPH-A shall agree to be bound by the terms and
conditions of this Agreement and the SPA to be performed and complied with by
TPH-A by executing and delivering the Joinder Agreement.
ARTICLE VII
TERM AND TERMINATION
7.1    Termination Prior to the Effective Date.   This Agreement may be
terminated prior to the Effective Date, and the Joint Venture and the other
transactions contemplated by this Agreement may be abandoned at any time prior
to the Effective Date (by written notification with respect to Sections 7.1.2 to
7.1.5 below), notwithstanding any requisite approval of this Agreement and the
transactions contemplated by this Agreement, as follows:
7.1.1    by mutual written consent duly executed by FSL and AFSL on the one
hand, and TPH-A and TPH on the other hand;
7.1.2    by either FSL or AFSL on the one hand, and TPH-A or TPH on the other
hand, if the Effective Date shall not have occurred on or before September 30,
2017 (the “Long Stop Date”), provided, however, that the right to terminate this
Agreement under this Section 7.1.2 shall not be available to any Party whose
failure to fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure of the Effective Date to occur on or before the Long
Stop Date; provided, however, in the event that any required waiting period (and
any extension thereof) under the applicable Laws relating to the transactions
contemplated hereby shall not have expired or terminated early before the Long
Stop Date, the Long Stop Date shall be extended until December 31, 2017;
7.1.3    by either FSL or AFSL on the one hand, and TPH-A or TPH on the other
hand, upon the issuance of any Order which is final and nonappealable which
would (i) prevent the consummation of the sale of the Shares under the SPA,
(ii) prohibit TPH or TPH-A’s ownership or operation of any portion of the
business of the Company, or (iii) compel FSL, AFSL or the Company

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on the one hand, and TPH-A or TPH on the other hand, to dispose of or hold
separate, as a result of the Joint Venture, any portion of the business or
assets of the Company;
7.1.4    by FSL or AFSL upon a breach of any representation, warranty, covenant
or agreement on the part of TPH or TPH-A set forth in this Agreement or the SPA,
or if any representation or warranty of TPH or TPH-A in this Agreement or the
SPA shall have become untrue, in either case such that the conditions set forth
in Article 7.2 of the SPA would not be satisfied (“Terminating TPH Breach”);
provided, however, that, if such Terminating TPH Breach is curable by TPH or
TPH-A through the exercise of such Party’s reasonable best efforts and for so
long as such Party continues to exercise such reasonable best efforts, FSL or
AFSL may not terminate this Agreement under this Section 7.1.4 unless such
breach is not cured within thirty (30) days after written notice thereof is
provided by FSL or AFSL to TPH and TPH-A pursuant to Section 11.7 (but no cure
period is required for a breach which, by its nature, cannot be cured); or
7.1.5    by TPH or TPH-A upon a breach of any representation, warranty, covenant
or agreement on the part of FSL or AFSL set forth in this Agreement or the SPA,
or if any representation or warranty of FSL or AFSL in this Agreement or the SPA
shall have become untrue, in either case such that the conditions set forth in
Article 7.1 of the SPA would not be satisfied (“Terminating FSL Breach”);
provided, however, that, if such Terminating FSL Breach is curable by FSL or
AFSL through the exercise of such Party’s reasonable best efforts and for so
long as such Party continues to exercise such reasonable best efforts, TPH or
TPH-A may not terminate this Agreement under this Section 7.1.5 unless such
breach is not cured within thirty (30) days after written notice thereof is
provided by TPH or TPH-A to FSL and AFSL pursuant to Section 11.7 (but no cure
period is required for a breach which, by its nature, cannot be cured).
7.2    Effect of Termination Prior to the Effective Date.   In the event of
termination of this Agreement pursuant to Section 7.1, this Agreement shall
forthwith become void and of no further force and effect, there shall be no
liability under this Agreement on the part of any Party or any of their
respective officers or directors, and all rights and obligations of each Party
hereto shall cease; provided, however, that (i) Section 11.4 and Section 11.6
shall remain in full force and effect and survive any termination of this
Agreement and (ii) nothing herein shall relieve any Party from liability for the
willful breach of any of its representations or warranties or the breach of any
of its covenants or agreements set forth in this Agreement.
7.3    Termination After the Effective Date.
7.3.1    After the Effective Date, this Agreement may be terminated on the date
that the first of the following shall occur:
(i)    by mutual written consent duly executed by FSL and AFSL on the one hand,
and TPH-A and TPH on the other hand;
(ii)    By FSL/AFSL or TPH/TPH-A, if there is only one (1) shareholder,
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(iii)    If the Put Option or Call Option is exercised, one (1) Business Day
after the Put Closing Date or Call Closing Date, as applicable;
(iv)    By TPH/TPH-A, if FSL/AFSL has not exercised the Put Option within one
hundred eighty (180) days of the Option Starting Date; or
(v)    By FSL/AFSL and TPH/TPH-A, if there is a change in the Control of the
other and the acquiring/succeeding entity causing such change in the Control is
an entity that may be reasonably believed to be objectionable to the Japanese
Government and/or FSL including FSL’s Affiliates in case of the termination by
FSL/AFSL or the US Government and/or TPH in case of the termination by
TPH/TPH-A, termination to be effective upon thirty (30) days’ notice of
termination. By way of example only, an entity that deals in weapons or weapon
systems directly or indirectly may be deemed as such objectionable entity.
7.3.2    In the event that any one of the following events applies to a Party,
the other Party(ies) shall have the right to terminate this Agreement at any
time:
(i)    it has breached any provisions of this Agreement and, after having
received a written notice to cure the breach from the other Party(ies), has
failed to cure such breach within thirty (30) days after the receipt of such
notice;
(ii)    it has been subject to attachment, provisional disposition or has been
subject to a procedure for the collection of a tax delinquency; or
(iii)    a petition for the commencement of any bankruptcy, civil
rehabilitation, or corporation liquidation procedure has occurred.
7.4    Dissolution and Winding-up.   In case where this Agreement is terminated
pursuant to Section 7.3 (except for the cases of Section 7.3.1(ii) and (iii),
and the cases where a Shareholder has exercised the right as specified in
Section 7.4 or 7.5), the Company shall be dissolved and wound up unless
otherwise agreed by the Parties. In the absence of mutual agreement of the
Parties to dissolve and wind up the Company on such terms and conditions as they
shall determine, the business and affairs of the Company shall be dissolved and
wound up in accordance with the Laws then in effect.
7.5    Shareholder Calls Upon Breach.
7.5.1    Calls by AFSL.   If, after the Effective Date, TPH or TPH-A shall have
materially breached any of its representations or warranties contained in this
Agreement or shall have failed to comply in any material respect with any of the
other covenants or agreements contained in this Agreement, which breach or
failure shall not have been remedied within thirty (30) days after written
notice thereof (the “Default Notice”) has been given by AFSL to TPH/TPH-A, then
AFSL shall have the option of purchasing from TPH-A, and TPH-A shall be
obligated to sell, all of the Shares then owned by TPH-A at a purchase price per
Share equal to the lesser of: (i) the Net Book Value as of the most recent month
end (provided that, if the Net Book Value is a negative amount, the product of
the Net Book Value multiplied by such Sale Shares shall be deemed to be one
Japanese Yen (¥1)), or (ii) the Shares Purchase Price, divided by the number of
Sale Shares. AFSL shall provide written notice of its election (the “Election
Notice”) to purchase the Shares owned by TPH-A within ten (10) Business Days
following the expiration of the thirty (30) day cure period set forth in the
Default Notice. The closing of the purchase of the Shares owned by TPH-A

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shall take place within thirty (30) Business Days following the date of the
Election Notice, or at such other time as the Parties may mutually agree. At
such closing, AFSL shall deliver to TPH-A, by wire transfer, the full amount of
the purchase price in Japanese Yen for such Shares as provided in this
Section 7.5.1 against delivery by TPH-A of the following: (a) a sale agreement
in form reasonably satisfactory to AFSL containing among other things, a
representation and warranty of TPH-A that it is, and AFSL shall be, the
beneficial owner of such Shares, with good title thereto, free and clear of all
liens and other encumbrances; (b) documentary evidence reasonably satisfactory
to AFSL of the transfer to it of all of TPH-A’s Shares and (c) resignations of
all Directors, if any, on the Board appointed by TPH-A. Notwithstanding the
remedies provided in this Section 7.5.1, AFSL/FSL shall be entitled to all other
remedies against TPH/TPH-A available at law or equity or under this Agreement.
7.5.2    Calls by TPH-A.   If, after the Effective Date, FSL or AFSL shall have
materially breached any of its representations or warranties contained in this
Agreement or shall have failed to comply in any material respect with any of the
other covenants or agreements contained in this Agreement, which breach or
failure shall not have been remedied within thirty (30) days after the Default
Notice has been given by TPH-A to FSL/AFSL, then TPH-A shall have the option of
purchasing from AFSL, and AFSL shall be obligated to sell, all of the Shares
then owned by AFSL at a purchase price per Share equal to the lesser of: (i) the
Net Book Value as of the most recent month end (provided that, if the Net Book
Value is a negative amount, the product of the Net Book Value multiplied by such
Sale Shares shall be deemed to be one Japanese Yen (¥1)), or (ii) the Shares
Purchase Price, divided by the number of Sale Shares. TPH-A shall provide the
Election Notice to purchase the Shares owned by AFSL within ten (10) Business
Days following the expiration of the thirty (30) day cure period set forth in
the Default Notice. The closing of the purchase of the Shares owned by AFSL
shall take place within thirty (30) Business Days following the date of the
Election Notice, or at such other time as the Parties may mutually agree. At
such closing, TPH-A shall deliver to AFSL, by wire transfer, the full amount of
the purchase price in Japanese Yen for such Shares as provided in this
Section 7.5.2 against delivery by AFSL of the following: (a) a sale agreement in
form reasonably satisfactory to TPH-A containing among other things, a
representation and warranty of AFSL that it is, and TPH-A shall be, the
beneficial owner of such Shares, with good title thereto, free and clear of all
liens and other encumbrances; (b) documentary evidence reasonably satisfactory
to TPH-A of the transfer to it of all of AFSL’s Shares and (c) resignations of
all Directors, if any, on the Board appointed by AFSL. Notwithstanding the
remedies provided in this Section 7.5.2, TPH/TPH-A shall be entitled to all
other remedies against FSL/AFSL available at law or equity or under this
Agreement.
7.6    Shareholder Calls Upon Bankruptcy After the Effective Date.
7.6.1    Calls by AFSL.   After the Effective Date, in the event of (a) any
distress, execution, sequestration or other process being levied or enforced
upon TPH or TPH-A; (b) the adjudication of TPH or TPH-A as a bankrupt or
insolvent subject to any insolvency or bankruptcy law; (c) the making by the TPH
or TPH-A of an assignment for the benefit of creditors; (d) the suspension of
payments or a moratorium on payments to creditors; or (e) the appointment of a
receiver or judicial manager or trustee for the business or properties of TPH or
TPH-A, then AFSL shall have the right to purchase the Shares of TPH-A in the
same manner and subject to the same terms and conditions as specified in Section
7.5.1.

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7.6.2    Calls by TPH-A. After the Effective Date, in the event of (a) any
distress, execution, sequestration or other process being levied or enforced
upon FSL or AFSL; (b) the adjudication of FSL or AFSL as a bankrupt or insolvent
subject to any insolvency or bankruptcy law; (c) the making by the FSL or AFSL
of an assignment for the benefit of creditors; (d) the suspension of payments or
a moratorium on payments to creditors; or (e) the appointment of a receiver or
judicial manager or trustee for the business or properties of FSL or AFSL, then
TPH-A shall have the right to purchase the Shares of AFSL in the same manner and
subject to the same terms and conditions as specified in Section 7.5.2.
7.7    Survival of Provisions After the Effective Date.  Sections 11.4, 11.6,
11.7, 11.14 and 11.15 shall specifically survive the termination of this
Agreement after the Effective Date. In case where this Agreement is terminated
pursuant to Section 7.3.1(ii) and (iii), Section 9.4, Article X, and Section
11.5 shall also specifically survive the termination of this Agreement after the
Effective Date.
7.8    Cooperation.   During the term of the Joint Venture, each Party shall
cooperate with the other and shall take all actions necessary in order to
consummate any sale and purchase of Shares, or dissolution and winding up of the
Company.
ARTICLE VIII
TRANSFER RESTRICTIONS
8.1    Restrictions on Transfers.   Except as set forth in this Article VIII,
prior to the Option Starting Date, without the prior written consent of the
other Shareholders, no Shareholder may sell, assign, transfer, pledge, encumber
or otherwise dispose of, by operation of Law or otherwise, any of its Shares, or
rights in or associated with such Shares, and any purported sale, assignment,
transfer, pledge, encumbrance or disposition by a Shareholder of its Shares in
violation of this Article VIII shall be invalid and of no force and effect.
8.2    Permissible Transfers.   AFSL shall be entitled at any time to transfer
all but not a portion of the Shares registered in its name to FSL or any other
entity Controlled by FSL, and TPH-A shall be entitled at any time to transfer
all but not a portion of the Shares registered in its name to TPH or any other
entity Controlled by TPH; provided that FSL (or such other entity Controlled by
FSL) and TPH (or such other entity Controlled by TPH), as applicable, shall
assume the obligations of AFSL and TPH-A, as applicable, hereunder, as set forth
in Article VI.
ARTICLE IX
PUT OPTION AND CALL OPTION
9.1    AFSL’s Right to Require the Purchase of the Shares by TPH or TPH-A.
9.1.1    As longs as AFSL and FSL are not in material and continuing breach of
this Agreement or the Ancillary Agreements, FSL or AFSL may trigger the option
to sell the Put Shares to TPH-A or its designee (the “Put Option”) by providing
a written notice of the exercise of the Put Option (the “Put Exercise Notice”)
simultaneously to the Company, TPH and TPH-A, which notice states (i) such
Party’s bona fide intention to exercise the Put Option, and (ii) the date on
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9.1.2    FSL or AFSL may not exercise the Put Option for less than one hundred
percent (100%) of the Shares held by both FSL and AFSL or any Affiliate of FSL
or AFSL, as the case may be.
9.1.3    FSL and AFSL may not exercise the Put Option prior to the Option
Starting Date nor more than one hundred eighty (180) days after the Option
Starting Date.
9.1.4    The purchase price for the Put Shares (the “Put Option Price”) shall be
the greater of (x) the amount in Japanese Yen equal to the Net Book Value as of
the most recently completed month end prior to the Put Closing Date, minus the
Net Book Value as of the most recently completed month end prior to the
Effective Date, multiplied by the number of Put Shares, or (y) one Japanese Yen
(¥1).
9.1.5    Upon FSL’s or AFSL’s exercise of the Put Option, TPH-A shall be obliged
to purchase or cause TPH-A’s designees to purchase, and TPH shall be obliged to
cause TPH-A or TPH-A’s designees to purchase, the Put Shares in accordance with
this Section 9.1. For the avoidance of doubt, the Put Option is the right of
AFSL/FSL, and AFSL/FSL is not obliged to exercise the Put Option.
9.1.6    Completion of the sale and purchase of the Put Shares pursuant to the
exercise of the Put Option by AFSL/FSL shall take place on the date specified in
the Put Exercise Notice (which shall be a date after at least sixty (60) days
from the date of the Put Exercise Notice) (the “Put Closing Date”) and on which
date:
(i)    TPH-A shall, or shall cause its designees to, and TPH shall cause TPH-A
or TPH-A’s designees to, pay to AFSL the Put Option Price for the Put Shares by
way of a bank transfer to the bank account as separately designated by AFSL; and
(ii)    in exchange for which, AFSL shall deliver to TPH-A or its designees duly
executed a letter of request to enter in the shareholder register of the Company
the information that is required to be registered with regard to the Put Shares;
and
9.1.7    AFSL and TPH-A shall cause the Board to approve the share transfer of
the Put Shares on or prior to the Put Closing Date.
9.2    TPH-A’s Right to Require the Purchase of the Shares from FSL or AFSL.
9.2.1    As longs as TPH-A and TPH are not in material and continuing breach of
this Agreement or the Ancillary Agreements, TPH-A or TPH may trigger the option
to purchase the Call Shares (the “Call Option”) by providing a written notice of
the exercise of the Call Option (the “Call Exercise Notice”) simultaneously to
the Company, FSL and AFSL, which notice states (i) such Party’s bona fide
intention to exercise the Call Option, and (ii) the date on which such Party
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9.2.2    TPH or TPH-A may not exercise the Call Option for less than one hundred
percent (100%) of the Shares held by both FSL and AFSL or any Affiliate of FSL
or AFSL, as the case may be.
9.2.3    TPH-A and TPH may not exercise the Call Option prior to the Option
Starting Date nor more than one hundred eighty (180) days after the Option
Starting Date.
9.2.4    The purchase price for the Call Shares (the “Call Option Price”) shall
be the greater of (x) the amount in Japanese Yen equal to the Net Book Value as
of the most recently completed month end prior to the Call Closing Date, minus
the Net Book Value as of the most recently completed month end prior to the
Effective Date, multiplied by the number of Call Shares, or (y) one Japanese Yen
(¥1).
9.2.5    Upon TPH-A’s or TPH’s exercise of the Call Option, AFSL/FSL shall be
obliged to sell, or cause the holder of the Call Shares to sell, the Call Shares
to TPH-A or its designee in accordance with this Section 9.2. For the avoidance
of doubt, the Call Option is the right of TPH-A and TPH-A is not obliged to
exercise the Call Option.
9.2.6    Completion of the sale and purchase of the Call Shares pursuant to the
exercise of the Call Option by TPH-A/TPH shall take place on the date specified
in the Call Exercise Notice (which shall be a date after at least sixty (60)
days from the date of the Call Exercise Notice) (the “Call Closing Date”) and on
which date:
(i)    TPH-A shall, or shall cause its designees to, and TPH shall cause TPH-A
or TPH-A’s designees to, pay to AFSL the Call Option Price for the Call Shares
by way of a bank transfer to the bank account as separately designated by AFSL;
and
(ii)    in exchange for which, AFSL shall deliver to TPH-A or its designees duly
executed a letter of request to enter in the shareholder register of the Company
the information that is required to be registered with regard to the Call
Shares.
9.2.7    AFSL and TPH-A shall cause the Board to approve the share transfer of
the Call Shares on or prior to the Call Closing Date.
9.3    Conditions to Put Option or Call Option Closing.   Each Party’s
obligation to complete the Put Option or Call Option at the Put Closing Date or
Call Closing Date, as applicable, is subject to the fulfillment on or before
such Put Closing Date or Call Closing Date of each of the following conditions,
unless waived in writing (where permissible) by the applicable party in such
closing:
9.3.1    TPH’s Stockholder Approval.   The acquisition of the Option Shares (as
defined in the SPA), shall have been approved and adopted by the requisite
stockholders of TPH in accordance with Delaware Law and TPH’s Certificate of
Incorporation and Bylaws, which approval shall have been obtained prior to the
Effective Date, to the extent permissible under Delaware Law.
9.3.2    No Order.   No Governmental Authority or court of competent
jurisdiction located or having jurisdiction over any of the Parties in the
United States shall have enacted, issued, promulgated, enforced or entered any
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order, whether temporary, preliminary or permanent (each an “Order”) which is
then in effect and has the effect of making the closing of the Put Option or
Call Option, as applicable, illegal or otherwise prohibiting consummation of the
Put Option or Call Option.
9.3.3    Governmental Approvals.   All required authorizations, permits,
consents, orders, actions or approvals of, or declarations or filings with, or
expirations or terminations of waiting periods imposed by, any Governmental
Authority in the United States, whether federal, state or local, that may be
required, as well as any Governmental Authority in any other jurisdiction which
the parties mutually agree in good faith is required to be obtained, in each
case, to consummate the Put Option or Call Option, shall have been filed,
occurred or been obtained, including that any required waiting period (and any
extension thereof) under the Hart-Scott-Rodino Act relating to the transactions
contemplated by the Put Option or Call Option shall have expired or been
terminated early.
9.3.4    No Other Litigation.   There shall not be pending any legal proceeding
against or on behalf of any Party preventing or prohibiting or seeking to
prevent or prohibit the closing of the Put Option or the Call Option, as
applicable.
9.4    Other Obligations.
9.4.1    After the Put Closing Date or Call Closing Date, as applicable, the
Parties shall use their best efforts to obtain and maintain all necessary
approvals and registrations to effect this Agreement and all related agreements
and documents; provided, however, that the Parties shall not be required to
change any provision of this Agreement or the SPA, and no Party shall be
required to divest any material business unless contemplated by this Agreement
or the SPA.
9.4.2    For two (2) years after the Put Closing Date or Call Closing Date, as
applicable, TPH shall make, and cause TPH-A to make, every best effort to
maintain the employees of the Company.
9.4.3    The Directors appointed by FSL or AFSL shall take whatever steps as are
necessary to resign effective as of the Put Closing Date or Call Closing Date,
as applicable. Immediately after the Put Closing Date or Call Closing Date, as
applicable, TPH-A, TPH and the Company shall be prohibited from using the logo,
trademark, corporate name and other indications utilizing or showing the name of
AFSL or its Affiliates (the “Fujitsu Logos”), and shall exclude the Fujitsu
Logos from any material of the Company. TPH/TPH-A shall change the corporate
name of the Company.
ARTICLE X
TREATMENT OF EMPLOYEES
10.1    New Terms and Conditions for Employment.   The terms and conditions of
employment of any person employed by the Company after the Put Closing Date or
Call Closing Date, as applicable, shall be on terms and conditions satisfactory
to the Company, TPH and TPH-A.
10.2    Representations and Warranties Regarding Employment.   FSL and AFSL
represent and warrant to TPH and TPH-A, as of the date hereof and as of the Put
Closing Date or Call Closing Date, as applicable, that:

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10.2.1    FSL, AFSL and the Company do not have any pension liability in respect
of the Company’s employees or the Company’s pension plans;
10.2.2    there is no material labor dispute between FSL, AFSL or the Company,
on the one hand, and the Company’s employees, on the other hand or legal
proceeding against FSL, AFSL or the Company related to the Company’s employees;
and
10.2.3    in the event of any liability to the Company’s employees to the extent
related to their employment by the Company, AFSL, FSL or AFSL/FSL’s Affiliates
prior to the Put Closing Date or Call Closing Date, as applicable, AFSL and FSL
agree that such liability shall be borne solely by AFSL/FSL and not the Company
or TPH-A/TPH.
ARTICLE XI
MISCELLANEOUS
11.1    No Partnership.   None of the provisions of this Agreement shall be
deemed to constitute a partnership between or among the Parties and they shall
have no authority to bind one another or the Company in any way.
11.2    Limitations on Parties’ Authority.   None of the Parties shall have or
hold itself out as having, any right, authority or agency to act on behalf of
any other Party or the Company in any capacity or in any manner except as
specifically authorized in this Agreement, and none of the Parties shall become
liable to any other Parties or to any other Person by reason of any
representation, action or omission of any other Party contrary to this
provision. Without limiting the generality of the foregoing, in no event shall
any Party have any liability or obligation for any debts, liabilities or
contractual obligations of any other Party to any other Person and each Party
agrees to indemnify and hold harmless any other Party as to such debts,
liabilities and contractual obligations.
11.3    Indemnification.
11.3.1    Each Party agrees to indemnify, defend and hold harmless the Company
and any other Party, its permitted successors and assigns, from and against any
and all losses, liabilities, claims, damages, costs and expenses including
reasonable legal fees and disbursements in connection therewith (collectively,
“Claims”) asserted against or incurred by the Company or such other Party which
arise out of, result from, or may be payable by virtue of, any breach of any
representation, warranty, covenant or agreement made or obligation required to
be performed by the indemnifying Party pursuant to this Agreement.
Notwithstanding the foregoing, claims related to the purchase of the Shares
under the SPA shall be governed by the indemnification provisions set forth in
the SPA.
11.3.2    In the case of a third party Claim which is subject to indemnification
under this Section 11.3, the indemnifying Party shall be notified promptly in
writing of the existence of any such Claim instituted at any time against or
made upon the indemnified Party or the Company by any third party, and shall be
given the opportunity to defend the same with counsel of its choice, in which
defense the indemnified Party or the Company, as the case may be, shall
cooperate. If the indemnifying Party, after notification, fails promptly to
undertake such defense, then the indemnified Party, or the Company, as the case
may be, may undertake the defense with counsel of its choice, in which case the
indemnifying Party shall bear the cost of such defense, including reasonable
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fees and disbursements in connection therewith, and shall pay the amount of any
judgment or settlement.
11.4    Confidentiality.
11.4.1    All information, whether written or oral, relating to the Company, the
Parties or their Affiliates, or their respective businesses or operations, which
includes but is not limited to information obtained as a proprietary right
(“Confidential Information”), disclosed by any Party (the “Disclosing Party”) to
any other Party (or its directors, officers, employees or representatives) shall
be kept strictly secret and confidential and shall not be disclosed to any
Person except to the extent that any such disclosure is necessary in connection
with the performance of this Agreement, and except to the extent that (i) such
information is known to such other Parties when received or is or subsequently
becomes lawfully obtained from other sources; (ii) the duty as to
confidentiality and non-use is waived in writing by the Disclosing Party; or
(iii) disclosure of such information is required by applicable Laws or is
validly ordered by a Governmental Authority. The Parties further agree that they
shall not use, nor permit their respective Affiliates to use, any Confidential
Information for any purpose whatsoever except in the manner expressly provided
or contemplated in this Agreement. Notwithstanding the foregoing, the treatment
of any Confidential Information disclosed pursuant to the Amended Process
Development Agreement shall be governed solely by the Amended Process
Development Agreement.
11.4.2    Each of the Parties agrees to take, and to cause its respective
Affiliates and the Company to take, reasonably adequate security and
precautionary measures to effect compliance with this Section 11.4 by directors,
officers, employees and agents of each of the Parties, their respective
Affiliates and the Company who are given access to Confidential Information.
11.4.3    Each of the Parties hereby acknowledges that the Disclosing Party
would be irreparably harmed by a breach of this Section 11.4 and it would not be
possible to estimate damages resulting from such a breach. The Parties agree
that the Disclosing Party shall be entitled to injunctive relief to prevent a
breach or continued breach of this Section 11.4, or any part of it, and to
secure the enforcement of this Section 11.4 and shall be entitled to recover
from the other Parties reasonable legal fees and all costs and expenses incurred
in connection with such an action
11.5    Access to Company Information After the Put Closing Date or the Call
Closing Date.   In case it is necessary for AFSL/FSL to access to any materials
or information of the Company prepared or otherwise made on or before the Put
Closing Date or the Call Closing Date due to requirement by any Governmental
Authority or any third party on or after the Put Closing Date or the Call
Closing Date, then, TPH/TPH-A shall fully cooperate, and shall cause the Company
to fully cooperate, with AFSL/FSL so that AFSL/FSL can access such materials or
information.
11.6    Expenses.   Except as otherwise expressly provided herein, Each Party
shall pay their own expenses incurred in connection with the execution of this
Agreement and their respective performance of the obligations provided for
herein, including the expenses incurred by Directors nominated by the respective
Shareholders in connection with attendance at meetings of the Board.

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11.7    Notices.   All notice, waivers and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given when delivered by hand or one (1) day after being sent by e-mail (with
reasonable evidence of transmission) and followed by registered mail or an
internationally recognized overnight courier service if those to be notified,
including Shareholders, Directors and auditors, reside outside Japan, addressed
to the Party to whom the notice is intended to be given at the addresses
specified below:
(a)    If to AFSL:
No.4 Kogyo Danchi, Monden-Machi, Aizu Wakamatsu, Fukushima,
Japan
Aizu Fujitsu Semiconductor Limited
Attn:  President and Representative Director
(b)    If to FSL:
Shin-Yokohama Chuo Building, 2-100-45, Shin-Yokohama,
Kohoku-Ku, Yokohama, Kanagawa, Japan
Fujitsu Semiconductor Limited
Attn: Head of Corporate Management Unit
(c)    If to TPH:
75 Castilian Drive
Goleta, CA 93117, U.S.A.
Transphorm, Inc.
Attn:  Chief Executive Officer
With a copy, which shall not constitute notice, to each of:
Wilson Sonsini Goodrich & Rosati, P.C.
650 Page Mill Road
Palo Alto, CA 94304-1050, U.S.A.
Attn:  Mark Bertelsen and Julia Reigel
and
Mori Hamada & Matsumoto
Marunouchi Park Building,
2-6-1 Marunouchi, Chiyoda-ku,
Tokyo 100-8222, Japan
Attn: Masujima Masakazu
or to such other address or addresses as any such Party may from time to time
designate by written notice. Notwithstanding the foregoing, the Parties
acknowledge and agree that notice hereunder may be provided by e-mail, but such
notice shall not be deemed effective unless and until the Party to whom such
notice was delivered confirms, in writing, receipt of such notice.

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11.8    Successors and Assigns.   This Agreement shall be binding upon and inure
to the benefit of the Parties and their permitted successors and assigns.
Notwithstanding the foregoing, no rights, obligations or liabilities hereunder
shall be assignable by a Party without prior written consent of all of the other
Parties; provided, however, that a Party shall not unreasonably withhold its
consent to the assignment of rights and obligations by the other Parties to its
Affiliate if that Affiliate’s performance has been guaranteed satisfactorily in
form and substance by the assigning Party.
11.9    Waiver.   No action taken pursuant to this Agreement shall be deemed to
constitute a waiver of compliance with any representation, warranty, covenant or
agreement contained in this Agreement and shall not operate or be construed as a
waiver of a similar or dissimilar nature. A Party may by written notice
(a) extend the time for performance of any of the obligations or other actions
of any other Parties under this Agreement, (b) waive any inaccuracies in the
representations or warranties of any other shareholder contained in this
Agreement, or (c) waive or modify performance of any of the covenants or
obligations of any other Parties under this Agreement.
11.10    Announcements.   FSL, AFSL TPH and TPH-A shall consult and confer with
each other prior to making any public announcement concerning any of the
transactions contemplated in this Agreement.
11.11    Entire Agreement.   This Agreement supersedes any previous agreement,
whether written or oral, that may have been made or entered into by and among
the Parties or any of them or their representatives relating to the matters
contemplated hereby. This Agreement constitutes the entire agreement by and
among the Parties with respect to the subject matter hereof.
11.12    Amendments.   This Agreement may be amended or supplemented only by
written agreement signed by the Parties.
11.13    Limitations on Rights of Third Persons.   Nothing expressed or implied
in this Agreement is intended or shall be construed to confer upon or give any
Person other than the Parties any rights or remedies under or by reason of this
Agreement or any transaction contemplated hereby, except the permitted assigns
of the Parties.
11.14    Governing Law; Language.   The English text of this Agreement shall
control any interpretation of its provisions, and this Agreement and the legal
relations among the Parties and the Company shall in all respects be
interpreted, construed and governed by and in accordance with the laws of Japan.
11.15    Resolution of Disputes.
11.15.1   The Parties shall attempt in good faith to resolve any and all
disputes arising out of or relating to this Agreement through friendly
consultations. If the Parties cannot resolve the dispute through friendly
consultation, the provisions of Section 11.15.2 to Section 11.15.4 shall apply
with respect to such dispute.
11.15.2   Any dispute, controversy or claim arising out of or relating to this
Agreement, or the breach, termination or invalidity hereof, shall be finally
resolved exclusively by arbitration administered by the Hong Kong International
Arbitration Centre (“HKIAC”). The arbitration shall be conducted in accordance
with the HKIAC Administered Arbitration Rules in effect at the time of the
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Parties. The seat of the arbitration shall be Hong Kong. The arbitration shall
be conducted in the English language.
11.15.3   The arbitration shall be conducted by three (3) arbitrators. The Party
initiating arbitration (the “Claimant”) shall appoint an arbitrator in its
request for arbitration (the “Request”). The other Party to the arbitration (the
“Respondent”) shall appoint an arbitrator within thirty (30) days of receipt of
the Request and shall notify Claimant of such appointment in writing. The first
two (2) arbitrators appointed in accordance with this provision shall appoint a
third arbitrator, who shall act as chair of the tribunal. The arbitral award
shall be in writing, state the reasons for the award, and be final and binding
on the Parties. The award may include an award of costs, including, without
limitation, reasonable attorneys’ fees and disbursements. In addition to
monetary damages, the arbitral tribunal shall be empowered to award equitable
relief.
11.15.4   The Parties agree that the arbitration shall be kept confidential, and
that the costs of arbitration shall be borne by the losing Party unless
otherwise determined by the arbitration award. All payments made pursuant to the
arbitration decision or award and any judgment entered thereon shall be made in
United States dollars, free from any deduction, offset or withholding for taxes.
11.15.5   Notwithstanding this Section 11.15 or any other provision to the
contrary in this Agreement, no Party shall be obligated to follow the foregoing
arbitration procedures where such Party intends to apply to any court of
competent jurisdiction for an interim injunction or similar equitable relief
against any other Party, provided there is no unreasonable delay in the
prosecution of that application.
11.15.6   When any dispute occurs and when any dispute is under litigation or
arbitration, except for the matters in dispute, the Parties shall continue to
fulfill their respective obligations and shall be entitled to exercise their
rights under this Agreement. However, this provision shall not apply to rights
or obligations extinguished in connection with a valid termination of this
Agreement.
11.15.7   Judgment on the award rendered by the arbitrator may be entered in any
court having jurisdiction. Except as set forth above, each of the Parties hereby
irrevocably waives any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated
hereby.
11.16    Severability.   Each section and subsection of this Agreement
constitutes a separate and distinct undertaking or provision hereof. Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable Laws. In the event that any
provision of this Agreement shall finally be determined by a competent court or
tribunal to be unlawful or unenforceable, such provision shall be deemed severed
from this Agreement, but every other provision of this Agreement shall remain in
full force and effect, and in substitution for any such provision held unlawful
or unenforceable, there shall be substituted a provision of similar import
reflecting the original intent of the Parties to the extent permissible under
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11.17    Execution in Counterparts.   This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement. The signature of each
Party may be evidenced by an electronic (e.g., pdf) copy of this Agreement
bearing such signature and transmitted to the other Parties. Such signature
shall be valid and binding as if an original executed copy of this Agreement has
been delivered.
11.18    Titles and Headings.   Titles and headings to sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
11.19    Counsel only to TPH and TPH-A.   Wilson Sonsini Goodrich & Rosati, P.C.
(“WSGR”) and Mori Hamada & Matsumoto (“MHM”) are counsel solely to TPH-A and
TPH. The other Parties to the Agreement acknowledge that they are not relying on
WSGR or MHM for advice in connection with the matters related to this Agreement
and the transactions contemplated hereby, and that they have had the opportunity
consult counsel of their own choosing and have elected not to do so.
[Signature pages follow]

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IN WITNESS WHEREOF, the Parties have caused their respective duly authorized
officers to execute this Agreement as of the day and year first above written.
Aizu Fujitsu Semiconductor Limited
 
 
By:
/s/ Atsuo Shimizu
Name:
Atsuo Shimizu
Title:
President and Representative Director
 
 
Fujitsu Semiconductor Limited
 
 
By:
/s/ Kagemasa Magaribuchi
Name:
Kagemasa Magaribuchi
Title:
President and Representative Director
 
 
Transphorm, Inc.
 
 
By:
/s/ Mario Rivas
Name:
Mario Rivas
Title:
Chief Executive Officer

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EXHIBIT A
FORM OF JOINDER AGREEMENT
This JOINDER (this “Joinder”), dated as of [● ●], 2017, is delivered pursuant to
(a) Section 6.3 of that certain Joint Venture Agreement dated as of May 23,
2017, by and among Aizu Fujitsu Semiconductor Limited (the “Seller”), Fujitsu
Semiconductor Limited (“FSL”) and Transphorm, Inc. (“TPH”) (as such agreement
may be amended, supplemented or modified from time to time in accordance with
its terms, the “Joint Venture Agreement”) and (b) Section 5.3.2 of that certain
Shares Purchase Agreement dated as of May 23, 2017, by and among the Seller, FSL
and TPH (as such agreement may be amended, supplemented or modified from time to
time in accordance with its terms, the “Shares Purchase Agreement”). The
undersigned, [●], a Japanese corporation (“TPH-A”) hereby agrees that this
Joinder may be attached to each of the Joint Venture Agreement and the Shares
Purchase Agreement.
1.    Joinder to Joint Venture Agreement.   TPH-A, by executing and delivering
this Joinder, hereby becomes a party to the Joint Venture Agreement in the
capacity of “TPH-A” as defined therein in accordance with Section 6.3 thereof,
and agrees to be bound by all of the terms and conditions thereof (including
without limitation all of the representations and warranties and covenants of
TPH-A therein to be made or performed, as applicable, from and after the date
hereof), in each case as if the undersigned were a direct signatory thereto.
2.    Joinder to Shares Purchase Agreement.   TPH-A, by executing and delivering
this Joinder, hereby becomes a party to the Shares Purchase Agreement in the
capacity of the “Purchaser” as defined therein in accordance with Section 5.3.2
thereof, and agrees to be bound by all of the terms and conditions thereof
(including without limitation all of the representations and warranties and
covenants of the Purchaser therein to be made or performed, as applicable, from
and after the date hereof), in each case as if the undersigned were a direct
signatory thereto.
3.    Representations and Warranties.   TPH-A hereby represents and warrants
that:
a.    TPH-A has all requisite power and authority to enter into this Joinder and
to perform its covenants and obligations hereunder; and
b.    The execution and delivery of this Joinder and the performance by TPH-A of
its covenants and obligations hereunder have been duly authorized by all
necessary action on the part of TPH-A and no further action is required on the
part of TPH-A to authorize this Joinder or the performance by TPH-A of its
covenants and obligations hereunder.
[SIGNATURE PAGE FOLLOWS]

-Exhibit A-1-

--------------------------------------------------------------------------------

Confidential
Execution Version

IN WITNESS WHEREOF, the undersigned has caused this Joinder to be duly executed
and delivered by its officer thereunto duly authorized as of [● ●], 2017.
[●], a Japanese corporation
 
 
By:
 
Name:
 
Title:
 

-Exhibit A-2-

--------------------------------------------------------------------------------

Confidential
Execution Version

APPENDIX 1
Key Employees
Department
Employee
ID
Name
Date of hiring
Title
exhibit10121appendix1image2.jpg [exhibit10121appendix1image2.jpg]
[***]
[***]
[***]
 
exhibit10121appendix1image2.jpg [exhibit10121appendix1image2.jpg]
[***]
[***]
[***]
 
exhibit10121appendix1image2.jpg [exhibit10121appendix1image2.jpg]
[***]
[***]
[***]
 
exhibit10121appendix1image2.jpg [exhibit10121appendix1image2.jpg]
[***]
[***]
[***]
 
exhibit10121appendix1image2.jpg [exhibit10121appendix1image2.jpg]
[***]
[***]
[***]
 
exhibit10121appendix1image2.jpg [exhibit10121appendix1image2.jpg]
[***]
[***]
[***]
 
exhibit10121appendix1image2.jpg [exhibit10121appendix1image2.jpg]
[***]
[***]
[***]
 
exhibit10121appendix1image2.jpg [exhibit10121appendix1image2.jpg]
[***]
[***]
[***]
Manager
exhibit10121appendix1image2.jpg [exhibit10121appendix1image2.jpg]
[***]
[***]
[***]
 
exhibit10121appendix1image2.jpg [exhibit10121appendix1image2.jpg]
[***]
[***]
[***]
 
exhibit10121appendix1image2.jpg [exhibit10121appendix1image2.jpg]
[***]
[***]
[***]
 

Name
Current Employment
[***]
Seconded to TPH-J
[***]
Seconded to TPH-J
[***]
TPH-J
[***]
Seconded to TPH-J
[***]
Seconded to TPH-J
[***]
Seconded to TPH-J
[***]
TPH-J
[***]
Seconded to TPH-J
[***]
Seconded to TPH-J
[***]
Seconded to TPH-J
[***]
Seconded to TPH-J
[***]
Seconded to TPH-J

-A1-1-

--------------------------------------------------------------------------------

Confidential
Execution Version

APPENDIX 2
GaN Equipment
No
Asset ID
Tool name
Tool ID
Application
1
I12026102439
[***]
[***]
[***]
2
I12016100800
[***]
[***]
[***]
3
I12016100427
[***]
[***]
[***]
4
I12016100801
[***]
[***]
[***]
5
I14086159094
[***]
[***]
[***]
6
I14086159092
[***]
[***]
[***]

 
 
 
Invoice Amount
Item
Specification
Last Invoice Month
2017/06
2017/07
2017/08
2017/09
2017/10
2017/11
2017/12
2018/01
2018/02
2018/03
2018/04
2018/5
2018/6
2018/7
2018/8
2018/9
2018/10
2018/11
2018/12
2019/01
2019/02
2019/03
2019/04
[***]
[***]
201804
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
 
 
 
 
 
 
 
 
[***]
[***]
201802
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
[***]
[***]
201803
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
 
 
 
 
 
 
 
 
 
[***]
[***]
201804
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
 
 
 
 
 
 
 
 
[***]
[***]
201807
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
 
 
 
 
 
[***]
[***]
201802
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
[***]
[***]
201802
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
[***]
[***]
201802
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
[***]
[***]
201804
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
 
 
 
 
 
 
 
 
[***]
[***]
201804
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
 
 
 
 
 
 
 
 
[***]
[***]
201804
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
 
 
 
 
 
 
 
 
[***]
[***]
201802
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
[***]
[***]
201802
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
[***]
[***]
201804
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
 
 
 
 
 
 
 
 
[***]
[***]
201804
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
 
 
 
 
 
 
 
 
[***]
[***]
201803
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
 
 
 
 
 
 
 
 
 
[***]
[***]
201803
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
 
 
 
 
 
 
 
 
 
[***]
[***]
201802
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
[***]
[***]
201803
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
 
 
 
 
 
 
 
 
 
[***]
[***]
201803
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
 
 
 
 
 
 
 
 
 
[***]
[***]
201803
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
 
 
 
 
 
 
 
 
 
[***]
[***]
201803
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
 
 
 
 
 
 
 
 
 
[***]
[***]
201810
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
 
 
[***]
[***]
201812
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
[***]
[***]
201902
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
 
 
[***]
[***]
201904
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
201904
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
201904
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
201904
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
201904
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
201904
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
201904
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
201711
[***]
[***]
[***]
[***]
[***]
[***]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

-A2-1-