EX-10.I.N



 






Exhibit 10(i)(N)







Qimonda AG

Confidential Materials Omitted and Filed Separately with the

Securities and Exchange Commission.

Confidential Portions denoted by [***].







Product Purchase And Capacity Reservation Agreement 300mm




- hereinafter referred to as the “Agreement”-


by and between




Winbond
Electronics Corporation, with offices in Hsinchu, Taiwan, R.O.C.


-
hereinafter referred to as “Winbond”-


and


Infineon Technologies AG, with offices in Munich, Germany


-
hereinafter referred to as “Infineon”-


-
Winbond and Infineon hereinafter collectively referred to as the “Parties” and severally referred to as a

“Party”-


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Preamble



WHEREAS, Infineon and Winbond, on May 02, 2002, have entered into that certain Know How Transfer
Agreement regarding Infineon’s 110nm DRAM technology for use with certain DRAM products and that
certain Product Purchasing and Capacity Reservation Agreement and its First Addendum related
thereto;



WHEREAS, Infineon and Winbond, simultaneously to this Agreement, have entered into a Know How
Transfer and License Agreement 90nm and 300mm (the “90nm-License Agreement”) under which Infineon
transfers know how for the 90nm-DRAM technology and the 300mm-manufacturing technology (for the
manufacture of inter alia Contract Products as defined below and under which Infineon grants to
Winbond the license to manufacture, develop, assemble and sell Contract Products only to Infineon
and/or its Subsidiaries;



WHEREAS, Infineon is willing to transfer said Know How and to grant the desired rights and licenses
to Winbond subject to Winbond granting a certain Reserved 300mn-Capacity to Infineon as stated in
Section 3.1 of this Agreement. It is understood that effectiveness of the 90nm-License Agreement is
dependent upon the effectiveness of this Agreement. Therefore the parties hereby agree that the
90nm-License Agreement only comes into effect, if this Agreement is duly signed and executed by
both parties.



WHEREAS, the Parties, simultaneously to this Agreement, further wish to enter into a Development
Contract in order to develop Jointly Developed Products;



WHEREAS, Infineon is committed to purchase from Winbond and Winbond is committed to sell to
Infineon Contract Products and Jointly Developed Products produced by Winbond in its 300mm fab in
Taichung for Infineon and/or its Subsidiaries to use, sell and have sold worldwide:



WHEREAS, the Parties wish to establish terms and conditions to govern such transactions;



NOW, THEREFORE, the Parties agree as follows:




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1.
DEFINITIONS



For the
purpose of this Agreement, the terms set forth in this Article 1, when employed in capital
letters, either in the singular or plural form, are defined to mean the following:





	1.1	 	“Contract Products” shall mean the Commodity DRAM-products including its
improved and/or modified versions, designed by or on behalf of Infineon, as
further described in Annex I of the License Agreement manufactured by
Winbond using the Contract Process.
	 
	1.2	 	“Contract Process” shall mean Know How relating to the 90nm DRAM technology
process licensed from Infineon to Winbond under the 90nm-License Agreement.
	 
	1.3	 	“Commodity DRAM Products” shall mean mainstream DRAM products, which have a
highly standardized specification.
	 
	1.4	 	“Confidential Information”
	 
	 	 	shall mean any and all commercial and technical data and information of
either Party (“Disclosing Party”), which another Party (“Receiving Party”)
has received or accessed to under this Agreement, including all data and
information of the Disclosing Party or of its Subsidiaries, in relation to
the product development technology, know-how, trade secret and other
intellectual properties, prices, marketing strategies, costs, customer
lists, supplier lists, finance, accounting, business administration,
personnel, and the like, and which may be in written, graphic, machine
readable or other tangible form and is marked “Confidential”, “Proprietary”
or the like or in some other manner to include oral information disclosed by
the Disclosing party to the Receiving Party pursuant to this Agreement,
provided that such data and information is disclosed in a manner indicating its
confidential nature at the time of disclosure and is summarized in writing by
the Disclosing Party within thirty (30) days after its oral disclosure.
	 
	1.5	 	“Die”
	 
	 	 	shall mean an individual integrated circuit on a Wafer.
	 
	1.6	 	“Good Die” shall mean all Dies fulfilling the relevant Product specification.
	 
	1.7	 	“Market Price” for each calendar month of Winbond’s operation (“Winbond
Month”) shall mean the average price calculated over the period of such
Calendar Month achieved by Infineon in the





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	 	 	sales of all Contract Product manufactured by Winbond and Commodity DRAM
Products manufactured by Infineon respectively differentiated by density
and quality grade.
	 
	1.8	 	“ASP Component” for each calendar month of Winbond’s operation (“Winbond
Month”) shall mean the monthly average price for either a QC-Component
according to the daily average DRAM spot market and contact price as set
forth on the DRAMeXchange Marketing Information System, calculated over
the period of the respective Calendar Month, differentiated by density,
type and quality grade or a NC-Component according to the Infineon price.
“Infineon Price” shall mean the actual price at which Infineon sells such
NC-Components. Regarding NC-Components the parties agree to the
following: If evidence shows, that Infineon’s sales price for
NC-Components is not as high as the price Winbond would achieve for such
product, both Parties should discuss in good faith whether Winbond should
be responsible for the sale.
	 
	1.9	 	“Jointly Developed Products” shall mean products developed by the Parties
and being subject to a separate Development Contract. The first Jointly
Developed Product shall be the 128M Cellular RAM.
	 
	1.10	 	“Products” shall mean Contract Products and/or Jointly Developed Products.
	 
	1.11	 	“Reserved 300mm-Capacity”
	 
	 	 	shall mean the extent of the production capacity of Winbond which is used
by Winbond to manufacture Products for Infineon and/or Infineon’s
Subsidiaries as further specified in Annex 2.
	 
	1.12	 	“Scrap Products”
	 
	 	 	dies, wafers or packaged parts are considered to be Scrap Products if
they do not fully comply with the specifications given within the
appropriate document of the Frontend Fab Cluster for the respective
Product.
	 
	1.13	 	“Term”
	 
	 	 	shall mean the period beginning with the date set forth above and ending
with the last shipment of, and payment for, Products under this Agreement
unless earlier terminated in accordance with the provisions of this
Agreement.
	 
	1.14	 	“Transfer Price”
	 
	 	 	shall mean the respective price charged to Infineon by Winbond for the
Jointly Developed Products and the Contract Products respectively
according to Annex 1.





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	1.15	 	“Wafer”
	 
	 	 	shall mean a crystalline substrate for integrated circuit production
which when fully processed consists of several potential finished
Dies of various grades.
	 
	1.16	 	“Subsidiary”: any company which is or becomes owned or controlled
directly or indirectly by a Party hereto as to more than fifty
percent (50%) of such company’s issued share capital, voting rights
and/or the like
	 
	1.17	 	“Calendar Month” shall mean the month which is two months later than
the relevant Winbond Month in the case of Contract Products, mean the
month which is one month later than the relevant Winbond Month in
the case of Jointly Developed Products.
	 
	1.18	 	“Frontend Fab Cluster” shall mean a group of companies which align
their frontend fabs to a synchronized technical, quality and
reporting guideline in order to realize economies of scale and common
quality standards. On the Effective Date the Frontend Fab cluster
members are Infineon Technologies Richmond Limited Partnership, USA,
Infineon Technologies Dresden GmbH & Co. OHG, Germany, Infineon
Technologies SC300 GmbH & Co. KG, Germany, Inotera Memories Inc,
Semiconductor Manufacturing International Corporation, Shanghai and
Winbond Electronics Corporation, Hsinchu, Taiwan, and shall further
include Joint Ventures, as well as any other Infineon Subsidiary or
third party cooperation partner of Infineon that Infineon may add to
the Frontend Fab Cluster. The Parties acknowledge that certain
members of the Frontend Fab Cluster may cease to be members during
the term of this Agreement.
	 
	2.	 	SUBJECT OF THE AGREEMENT
	 
	2.1	 	During the Term of this Agreement, Winbond, subject to the
restrictions of the 90nm-License Agreement, shall manufacture and
sell to Infineon subject to Infineon’s placing of purchase orders
within the scope of the Reserved 300mm-Capacity and Winbonds
acceptance thereof—, or at the request of a Subsidiary of Infineon,
Products up to the Reserved 300mm-Capacity having specifications and
in quantities determined by the mutual agreement of Winbond and
Infineon pursuant to this Agreement. For this purpose Winbond will
upgrade its 300mm-wafer fab in Taichung towards 90nm-technology and
will manufacture within this capacity Contract Products and/or
Jointly Developed Products for Infineon using the Contract Process.
In no event will Winbond sell Contract Products to any person other
than Infineon and/or its Subsidiaries without a prior written consent
of Infineon.





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	2.2	 	Infincon shall have the right and obligation to purchase
Products — subject to Infineon’s placing of purchase orders within the scope of
the Reserved 300mm-Capacity and Winbonds acceptance thereof — up to the
Reserved 300mm-Capacity of Winbond regarding the Products.
	 
	2.3	 	Infineon shall have the right and obligation to purchase
Products — subject to Infineon’s placing of purchase orders within the scope of
the Reserved 300mm-Capacity and Winbonds acceptance thereof — up to the
Reserved 300mm-Capacity of Winbond regarding the Products.
	 
	2.4	 	Volume Adjustments
	 
	 	 	As soon as the Margin (as defined in Annex 1) for Contract Products in
the Reserved 300mm-Capacity becomes negative for a period of three
consecutive months [***]





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	3.	 	ORDERING, CAPACITY AND SHIPMENT
	 
	3.1	 	Reserved 300mm-Capacity
	 
	 	 	Winbond shall provide and use the Reserved 300mm-Capacity for the
manufacture of (i) Contract Products for the years 2005 until 2008 as
further specified in Annex 2, Part I and (ii) Jointly Developed
Products until the end of 2009. Winbond agrees to sell its output of
Products to Infineon up to the Reserved 300mm-Capacity.
	 
	 	 	The Reserved 300mm-Capacity constitutes the minimum quantity up to
which Infineon will place purchase orders.
	 
	 	 	The Reserved 300mm-Capacity for Contract Products to be measured in
number of wafer, will be out of the 0,09μm production capacity and is
further specified in Annex 2 part I.
	 
	3.2	 	In order to plan for the efficient utilization of WINBOND’s
manufacturing capacity, the Infineon agree to exchange forecasts with
WINBOND and such other information as is reasonably requested by
WINBOND. No later than five months before the beginning of each
calendar year, WINBOND will provide the Infineon with a preliminary
capacity plan in parts of wspw per DRAM process technology of the said
calendar year. Within one month after receipt thereof, the
Infineon shall provide WINBOND with an annual forecast m units of wspw
per DRAM process technology for every week. WINBOND shall use
reasonable best efforts to meet the request of the Infineon.
Based on the Infineon’ request, WINBOND will (i) plan its production
capacity, efficiency and related adjustments and then (ii) prepare an
adjusted forecast that will become the basis for the quantity to be
purchased by the Infineon during the said calendar year.

	 
	 	 	
Once per month WINBOND will plan parameter values (chips per wafer,
yields, cycle times, quality shares) together with the Infineon and
synchronized with the Frontend Fab Cluster planning process. WINBOND
shall provide the Infineon on a weekly basis with a short term wafer
out/chip out forecast as well as reports of actual wafer starts, wafer
out/chip out and above mentioned parameter values for each Product.
Each kind of manual forecast/report are consolidated into one





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	 	 	file. In addition, yields, cycle times and wafer starts must be
provided accurately and regularly compatible to Infineon IT landscape.
	 
	 	 	The Parties will further jointly review this forecast mechanism,
taking into account practical operation.
	 
	 	 	WINBOND agrees to follow the latest version of Infineon wafer shipment
specification as agreed for the existing 200mm business.
	 
	3.3	 	Purchase Orders
	 
	 	 	Four (4) working days prior to the beginning of each calendar month,
Infineon shall issue to Winbond a non-cancelable purchase order
(“Purchase Order”). The Purchase Order shall specify Product mix and
quantity based upon the agreed Reserved Capacity, and shall be in an
amount sufficient to cover the Reserved Capacity, by Product mix, of
Products during such month, and shall specify the applicable price and
valid date. Winbond shall be obliged to accept the Purchase Order if
it is within the scope of the Reserved Capacity and shall confirm
acceptance thereof within three working days after its receipt. Should
output during a quarter fall below the ordered quantities of Products,
Infineon shall accept delivery of the deficient quantities and issue
to Winbond a revised Purchase Order to account for such shortfall.
Should output during a quarter exceed the ordered quantities of
Products, Infineon shall accept delivery of the additional quantities
and Issue to Winbond a supplementary Purchase Order to cover such
excess.
	 
	3.4	 	Capacity Records. Throughout the Term of this Agreement Winbond shall
cooperate with Infineon to maintain records that accurately reflect
utilization of the water capacity by Infineon. Winbond and Infineon
shall cooperate to mutually verify these records for accuracy and
completeness as often as Infineon may reasonably request but in no
event more frequently than monthly.
	 
	3.5	 	Shipping
	 
	 	 	Winbond shall ship the Products to Infineon as they are produced, or
at the request of Infineon to the Subsidiary of Infineon or to
subcontractors on Infineon’s instructions. In no event will Winbond
maintain any significant inventory for Infineon. Winbond shall ship
per the instructions of Infineon. Infineon shall provide Winbond with
assistance in meeting its shipping requirements. All freight and other
shipping charges, duties, sales, excise or other taxes (other than
taxes based on the net income or assets of the Winbond) shall be paid
by Infineon. Title and risk of loss shall pass fob according to
INCOTERMS 2000.





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	3.6	 	Subject to Section 3.1, Infineon may reschedule or change the mix
of Products it has ordered in a Purchase Order by written notice
prior to the scheduled delivery, provided that Winbond will have (i)
the materials and (ii) the capability to fulfill such revised
purchase order within the time available and (iii) that Infineon
shall pay for any additional costs incurred and (iv) that Infineon
shall buy and take the Products already made per the original
Purchase Order. Such change of Purchase Order shall not affect the
obligation of Infineon to take and pay for the Products.
	 
	4.	 	PRICE AND PAYMENT
	 
	4.1	 	Winbond shall sell (i) all Contract Products manufactured by it out
of the Reserved 300mm-Capacity based on the accepted Purchase Order,
to Infineon, or at the request of Infineon to a Subsidiary, on the
basis of the Transfer Price as set forth in Annex 1, part I and
(ii) all Jointly Developed Products manufactured by it out of the
Reserved 300mm-Capacity based on the accepted Purchase Order, to
Infineon, or at the request of Infineon to a Subsidiary, on the
basis of the Transfer Price as set forth in Annex 1, part II.
	 
	4.1.1	 	Infineon and Winbond first agree on a four months estimated Transfer
Price for the Contract Product and the Jointly Developed Products
respectively. Fifteen days before the end of the fourth month,
Infineon and Winbond will agree on the estimated Transfer Price for
the fifth month, fifteen days before the end of the fifth month,
Infineon and Winbond shall agree on the estimated Transfer Price for
the sixth month, and so on.
	 
	4.1.2	 	Infineon shall use such estimated Transfer Price when placing Purchase Orders with Winbond.
	 
	4.1.1	 	Infineon shall calculate the actual Market Price for a
specific month as soon as possible and inform Winbond but in no cases later
than fifteen (15) days after the end of the Calendar Month.
	 
	4.1.4	 	Using the actual Market Price established in 4.1.3, Winbond
shall calculate the actual Transfer Price for such specific
Winbond Month and compare this actual Transfer Price with the
original invoiced Transfer Price. If the original invoiced Transfer
Price is higher, the difference shall be credited to Infineon by
Winbond. If the original invoiced Transfer Price is lower, the
difference shall be debited to Infineon by Winbond. Such debits and
credits shall be accumulated by Winbond over the span of a calendar
quarter and the balance shall be credited or debited to Infineon
within fifteen (15) days after the end of each such quarter or when
the final figures will be available.







			
	 	 	 
	 
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	4.2	 	Winbond shall issue to Infineon an invoice promptly upon each shipment
of Products. Payment terms shall be net on the [***]
delivery month remove. Interest at the rate of one percent per month shall be paid on all
late amounts. Interest will be calculated based on the original net
[***] due date.
	 
	5.	 	PROCESSING
	 
	5.1	 	Scrap Products
	 
	 	 	Dies, wafers and packaged puts processed by Winbond may need to be
scrapped due to product quality issues, defects, or process errors
resulting in non compliance with the specifications of the
respective Product. Any proceeds from the sale of such Scrap Products,
after duducting the sales cost, shall be allocated at a ratio of [***]
to Winbond and [***] to Infineon. The Parties agree that Winbond will
handle the sales or otherwise disposal of Scrap Products, If evidence
shows, that Winbond’s sales price for Scrap Products is not as high as
the price Infineon would achieve for such product, both Parties should
discuss in good faith whether Infineon should be responsible for the
sale. Notwithstanding the above, under no circumstance shall the logos
of Winbond or Infineon be marked or inscribed on Scrap Products sold
or disposed, or left in blank for sales.
	 
	6.	 	SPECIFICATIONS OF PRODUCTS, USE OF INFINEON’S LOGO
	 
	 	 	Infineon shall notify with a reasonable lead time Winbond of the
electrical, mechanical, quality-related, marking, and packing
specifications to be met by all Products purchased by Infineon.
Products shall be marked by Winbond with the logo of Infineon as
further specified in Annex 5 which shall be affixed to each Product
delivered to Infineon. Winbond agrees that it shall not use Infineon’s
logo except to mark Products to be delivered to Infineon under this
Agreement. If Infineon’s logo has been marked on Products which are
subsequently rejected by Infineon’s customers due to non-compliance
with product specifications, Winbond and Infineon shall discuss in
good faith the procedures to handle such rejects. Upon reasonable
advance notice, Infineon shall have the right to audit Winbond’s
compliance with the provisions of this Section.
	 
	7.	 	INSPECTIONS
	 
	 	 	Winbond shall deliver Products which meet the specifications
determined under Section 6.




 
			
	 	 	 
	 
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	 	 	Infineon may perform, or may have performed on its behalf and at its
expense, incoming inspection
and tests of delivered Products, and Infineon shall provide notice 10
Winbond of Products which do not meet specifications. Failure to
provide notice of rejection within thirty (30) days of receipt of
shipment shall be deemed to be an acceptance by Infineon, but such
failure to reject shall not preclude Infineon from making a warranty
claim under Section 10.
	 
	8.	 	PROCESS CHANGES
	 
	8.1	 	Frontend Fab Cluster
	 
	 	 	The Parties agree that WINBOND shall become a member of the Frontend
Fab Cluster. The basic rules and regulations of the Frontend Fab
Cluster are attached hereto as Annex 6. WINBOND shall adhere to the
rules and regulations set up for the Frontend Fab Cluster and shall be
classified according to synchronization level B as defined in such
rules and regulations. The Parlies acknowledge that the Frontend Fab
Cluster is established on the basis of reciprocal treatment and
contribution by all its members to their joint interest. It is the
joint understanding of the Parties, that the WINBOND may follow a dual
vendor strategy in the critical areas, which is in line with the rules
and regulations of the Frontend Fab Cluster.
	 
	8.2	 	Winbond will, for Contract Products, adopt all process changes
submitted by Infineon. Winbond shall only make any process change
which may affect Products with the express prior written consent of
Infineon. If Winbond requests such changes Winbond shall give advance
written notice to Infineon. Winbond shall provide reliability data as
Infineon may request to determine if the performance of Products will
be affected by any such proposed process change. Information
relating to the proposed change and reliability data shall be
provided in sufficient detail so as to allow re-qualification of
Products. Any such agreed process changes win be handled according to
the procedure described in Annex 3, which may be amended from time to
time by mutual agreement of the Parties.
	 
	9.	 	QUALITY DATA
	 
	 	 	Winbond agrees to provide the following information relating to the
quality or reliability of the Products and the quality systems used to
guarantee these standards. Reference documents clarifying Infineon’s
requirements and internal methods shall be agreed between the Winbond
and Infineon and then included in Annex 4.






			
	 	 	 
	 
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	 	a.	 	Winbond agrees to provide reliability data which demonstrates the ability of all Products
to meet Infineon’s reliability criteria (test programs), Winbond agrees to provide free of
charge support for necessary not cause analysis. Any exceptions to these criteria will be
reviewed on a product-by-product basis. Infineon shall have the right to use data that is
protected under a non-disclosure agreement for the purposes of preparing sales and
promotional information for her customers, Winbond’s reliability testing methods and
conditions shall be subject to the review and approval of Infineon.
	 
	 	b.	 	Winbond agrees that all Products shall meet Infineon’s quality requirements to be
referenced in Annex 4. Infineon may review Winbond’s quality measurement and control
systems upon reasonable request.
	 
	 	c.	 	Winbond agrees to maintain reasonable documentation regarding all Products sold to
Infineon for ten (10) years after shipment. All Products shall be traceable based on the
top side date code. Full history shall include applicable Wafer fab process recipes,
quality control data, process deviation notes and probe data as well as assembly records
and deviations, burn-in conditions, and final test data.
	 
	 	d.	 	Winbond agrees to participate in regular quality system reviews for all Products purchased
by Infineon. The details of such reviews shall be provided to Winbond by Infineon at least
one month in advance.
	 
	 	e.	 	Winbond agrees to provide timely failure analysis on Products that are beyond Infineon’s
analysis capability or which are returned for the purposes of feedback and correlation.
Infineon agrees to provide timely failure analysis due to Winbond for the purposes of
feedback and correlation.






	10.	 	WARRANTIES
	 
	 	 	Winbond warrants that, at the time of delivery to Infineon, and for a
period of twenty-four (24) months from the date shipment of the
Contract Products or Jointly Developed Products to Infineon, all
Contract Products and Jointly Developed Products will (i) be clear of
any liens and encumbrances, (ii) be free from any defects in material
and workmanship attributable to Winbond ’s operation or the operations
of Winbond’s supplier, and (iii) will conform to all written
specifications of Infineon relating to such Contract Products and
Jointly Developed Products which






			
	 	 	 
	 
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	 	 	were accepted by Winbond in order to manufacture such Contract
Products or Jointly Developed Products. Infineon shall advise Winbond
of any claims for such defects in writing within the period of the
said warranty. If Contract Products or Jointly Developed Products are
not as warranted. Winbond shall, at its choice, (i) repair the
defect(s), or (ii) replace the defective Contract Products or Jointly
Developed Products and be liable for the cost of replacement,
re-installing and/or refitting of the Contract Products or Jointly
Developed Products, including without limitation any delivery
charges, or (iii) reclaim the defective Contract Produce or Jointly
Developed Products and reimburse Infineon for costs of handling and
transporting of the defective Contract Products or Jointly Developed
Products and refund the Transfer Price of the defective Contract
Products or Jointly Developed Products.
	 
	 	 	If the Parties mutually agree on case-by-case basis that Infineon
shall undertake the repair or replacement of a Defect in a Contract
Products or Jointly Developed Products on behalf of Winbond, Winbond
shall compensate Infineon for such said repair or replacement costs,
and the costs of handling and transporting of the defective Contract
Products or Jointly Developed Products incurred thereby.
	 
	 	 	Notwithstanding anything to the contrary in this Clause, Infineon
shall be entitled to compensation for direct losses, costs and
expenses including the costs of exchange of defective Contract
Products or Jointly Developed Products In their application and other
similar amounts suffered or incurred due to defective Contract
Products or Jointly Developed Products attributable to Winbond’s
operation or the operations of Winbond’s supplier up to a maximum
amount of US$ 1,000,000 per case and up to an aggregate amount of US$
5,000,000 per year. The obligation of Winbond to replace the
defective Contract Products or Jointly Developed Products shall not
be limited by this cap.
	 
	 	 	The paragraph above does not apply to Winbond in the event that
any warranty claim is attributable to the manufacturing
process/ Contract Process or any design not contributed solely by
Winbond.
	 
	 	 	The aforementioned concludes all warranties and remedies undertaken
by Winbond for damages resulting from the non-compliance of the
Contract Products and Jointly Developed Products.
	 
	11.	 	Industrial and Intellectual Property Rights
	 
	11.1	 	Contract Products and Jointly Developed Products





			
	 	 	 
	 
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Only
as set forth below in 11.1, and subject to the conditions and limitations stated herein below,
Winbond agrees to defend and indemnify Infineon from and against any and all justified claims,
demands and actions (“Claims”) brought against Infineon and based upon any infringement of
intellectual property rights or copy rights (“Claims”) by the Contract Products or the Jointly
Developed Products manufactured by Winbond, using Contract Process, and sold to Infineon and/or its
Subsidiaries to the extent and insofar as such claim is attributable to Winbond’s unauthorized
change of the design, specification or instruction given to Winbond by Infineon for manufacture of
Contract Products or Jointly Developed Products.




Winbond agrees to pay all money damages finally awarded against Infineon and attributable solely to
any such infringement however not exceeding the maximum amount of US $ [***] per event and up to an
overall maximum amount of US $ [***]

 As a condition of such defense and indemnification as above,
Infineon shall give Winbond prompt written notice of any alleged Claim, shall not accept on his own
any such claims and conducts any disputes, including settlements out of court, only in agreement
with Winbond and shall give all reasonable assistance to Winbond (at Winbond’s expense) as may be
requested by Winbond.




If, as a result of a Claim, Infineon becomes enjoined from using Contract Products or Jointly
Developed Products, Winbond shall, at its election (i) procure for Infineon the right to use the
Contract Product or Jointly Developed Product or (ii) modify the Contract Product or Jointly
Developed Product to become non-infringing or deliver a non-infringing product that meet
substantially the same functional specifications as the Contract Products or Jointly Developed
Product.




If,
as a result of a Claim, Infineon becomes enjoined from using of selling Contract Products or
Jointly Developed Products, Infineon shall have no further obligation to order or purchase Contract
Products or Jointly Developed Products from Winbond




THE FOREGOING SECTION STATES THE ENTIRE LIABILITY OF WINBOND AND THE EXCLUSIVE REMEDY OF INFINEON
WITH RESPECT TO INFRINGEMENT BY CONTRACT PRODUCTS OR JOINTLY DEVELOPED PRODUCTS OF ANY INTELLECTUAL
PROPERTY RIGHTS, STATUTORY, EXPRESS OR IMPLIED. EXCEPT AS EXPRESSLY STATED IN THIS SECTION, ALL
WARRANTIES AGAINST INFRINGEMENT



			
	 	 	 
	 
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	 	 	OF INTELLECTUAL PROPERTY RIGHTS AS MENTIONED BEFORE ARE HEREBY
DISCLAIMED.
	 
	12.	 	MARKETING AND USE
	 
	 	 	Infineon shall have unrestricted rights to use and sell the Products
world-wide through their own sales (force, affiliates, agents and
independent distributors, unless otherwise provided for by mandatory
law.
	 
	13.	 	CONFIDENTIALITY
	 
	13.1	 	The Parties agree that they shall keep the existence, terms, contents
and specifications of this Agreement, and their relationship
hereunder in confidence, unless otherwise agreed by the Parties.
	 
	13.2	 	Both Parties agree that either of them as a Receiving Party of
Confidential Information shall safeguard such Confidential
Information and keep it in strict confidence, and shall use
reasonable efforts, consistent with those used in the protection of
its own confidential information of similar nature and significance,
to prevent the unauthorized disclosure of such Confidential
Information to third parties.
	 
	13.3	 	Each Party shall use its bat efforts to limit the dissemination of
the Confidential Information solely to its directors, officers,
employees, agents, and advisors who have a specific need to know
such Confidential Information, provided that its directors, officers,
employees, agents, and advisors shall be subject to an equivalent
confidentiality obligation under this Agreement.
	 
	13.4	 	Either Party shall not use the Confidential Information for any
purposes other than for the performance of this Agreement.
	 
	13.5	 	All Confidential Information disclosed to or received by a Party
under this Agreement shall always remain the property of the
Disclosing Party. Upon the termination of this Agreement, the
Receiving Party shall return to the Disclosing Party all Confidential
Information and any documents or storage media (including any and all
transcripts and copies thereof) recording such Confidential
Information. At the time when any of the directors, officers,
employees, agents or advisors of a Party are discharged from the duty
and service relating to this Agreement, such Party shall ensure and
undertake to cause each of the discharged directors, officers,
employees, agents




 
			
	 	 	 
	 
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	 	 	or advisors to return to the Disclosing Party all Confidential
Information and any documents or storage media (including any and all
transcripts and copies thereof) recording such Confidential
Information.
	 
	13.6	 	The confidentiality obligation set forth in this Section shall not
apply to any business or technical information in Question if:






	 	13.6.1	 	it is generally available from public sources or in the public
domain; or
	 
	 	13.6.2	 	it is made available to a third party by the Disclosing Party
without imposing any restriction on disclosure;
	 
	 	13.6.3	 	it is rightful received by the Receiving Party at any time from any
third party without any nondisclosure obligation to the disclosure
and without breach of this Section; or
	 
	 	13.6.4	 	is shown to have been developed independently by the Receiving
Party without reliance on the Disclosing Party’s Confidential
Information or to have been already known to the Receiving Party
prior to the disclosure by the Disclosing Party.






	13.7	 	The obligations of the Parties with respect to Confidential
Information shall not apply to any disclosure which:






	 	13.7.1	 	as part of Annexes 2 to 4, must be made to a customer of infineon
for the purpose of marketing of Products, if an undertaking of
confidentiality is duly procured and the disclosure shall be
limited to a need-to-know basis, or
	 
	 	13.7.2	 	is disclosed to a third party with a prior written consent of the
Disclosing Party, or
	 
	 	13.7.3	 	is made pursuant to an order, of a governmental or judicial agency,
or legislative body or disclosure is required by operation of law, provided that the Party so required or requested to make such
disclosure shall promptly give the Disclosing Party a prompt
nonce of such request so that the Disclosing Party may have an
opportunity to defend, limit or protect such disclosure to the
extent available under applicable law.
	 
	 	13.8	 	The obligations imposed by this Section 13 shall continue for a
period of three (3) years after termination of this Agreement, of
after the receipt of the Confidential Information of concern,
whichever comes earlier





			
	 	 	 
	 
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	14.	 	PACKING REQUIREMENTS
	 
	 	 	The Winbond shall properly pack, mark, and ship all Products to meet the written
requirements of Infineon, at Infineon’s expense.
	 
	15.	 	CUSTOMER AUDIT
	 
	 	 	Upon reasonable prior notice, Winbond shall permit Infineon and/or its Subsidiaries or an
Infineon customers to audit Winbond’s facilities and to perform source inspection of
customers product if reasonably required by Infineon’s contract with its customer, during
business hours. Except with respect to Infineon and its Subsidiaries, such audits shall
always exclude clean room areas to avoid contamination. Any such party must comply with
security, safety and confidentiality requirements of Winbond. Winbond shall support such
audits on a non-discriminatory basis including (i) setting the date of such audit, (ii)
presenting the fab quality systems, (iii) supplying guides to support the physical audit,
and (iv) taking all requested corrective action to the audit results in a timely manner.
	 
	16.	 	REMEDIES AND LIMITATION OF LIABILITY
	 
	 	 	In the event of a breach of this Agreement by a Party, any other Party to this Agreement
shall be entitled to pursue any remedy at law or in equity that any
non-breaching party
would have against the breaching Party.
	 
	 	 	UNLESS EXPRESSLY STATED IN THIS AGREEMENT UNDER SECTION 10 AND II, UNDER NO CIRCUMSTANCES
WILL ANY PART TO THIS AGREEMENT, OR ANY SUBSIDIARY OF A PARTY, SEEK OR BE LIABLE FOR LOSS OF
DATA, REPROCUREMENT COSTS, LOST REVENUE OR PROFITS OR FOR ANY OTHER SPECIAL, INCIDENTAL,
PUNITIVE OR CONSEQUENTIAL DAMAGES, EVEN IF THEY WERE FORESEEABLE OR A PARTY HAS INFORMED
ANOTHER OF THE POTENTIAL FOR SUCH DAMAGES.
	 
	 	 	This limitation will apply regardless of the form of action
(i.e., whether the mediation,
arbitration, lawsuit or claim is in contract or in tort, including negligence).





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	17.	 	SECTION TITLES
	 
	 	 	Section titles as to the subject matter of particular sections herein are for convenience
only and are in no way to be construed as part of this Agreement or as a limitation of the
scope of the particular sections to which they refer.
	 
	18.	 	COUNTERPARTS
	 
	 	 	This Agreement may be executed in several counterparts, each
of which shall be deemed to
be an original, but all of which shall constitute one and the same instrument.
	 
	19.	 	FORCE MAJEURE
	 
	 	 	No party shall be in default of its obligations under this Agreement to the extent that its
performance is delayed or prevented by causes beyond its reasonable control, including,
without limitation, acts of God, acts of third party suppliers directly related to
performance of work under this Agreement, civil disorders, acts of any civil or military
authority,or judicial action. Winbond shall notify Infineon at the earliest indication of
any interruption in supplying Products or other difficulty which may impact the availability
of Products under this Agreement.
	 
	20.	 	PRECEDENCE
	 
	 	 	With respect to the subject matter of this Agreement, the provisions of this Agreement
shall prevail over any terms in any purchase order, order acknowledgement or other form or
agreement.
	 
	21.	 	INFINEON OTHER COMMITMENTS
	 
	 	 	Infineon will sell to Winbond the necessary mask sets for the production of Contract
Products at market price.
	 
	22.	 	ARBITRATION
	 
	22.1	 	Any claims, differences or disputes arising out of or in connection with this Agreement
(Dispute), including any question regarding its existence, validity, termination or its
performance, or in connection with arrangements regarding the performance of this Agreement
shall be settled by an amicable effort on the put of the Parties affected, which shall include
a meeting between the





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	 	 	President of the Infineon Memory Products Group or his equivalent, and the President
of Winbond. An attempt to arrive at a settlement shall be deemed to have failed as soon as
one of the Parties so notifies the other Party in writing.
	 
	22.2	 	If an attempt at settlement has failed, the Dispute shall be finally settled under the
International
Arbitration Rules of the American Arbitration Association (International AAA-Rules) by three
arbitrators appointed in accordance with the International AA A-Rules. The arbitration shall
be
conducted in the English language by three (3) arbitrators
chosen from a list of attorneys
who are
members of the American Arbitration Associations large complex case panel.
	 
	22.3	 	Each Party shall nominate one arbitrator for confirmation by the competent authority under
the
applicable International AAA- Rules (Appointing Authority). Both arbitrators, when so
confirmed,
shall agree on the third arbitrator within 30 (thirty) days. Should the two arbitrators
fail, within the
above time-limit, to reach agreement on the third arbitrator, such third arbitrator shall be
appointed
by the Appointing Authority.
	 
	22.4	 	The seat of arbitration shall be in New York, USA. The procedural law of the place of
the
arbitration shall apply where the Rules are silent.
	 
	22.5	 	The arbitration award shall be substantiated in writing. The arbitration tribunal shall
decide on the matter of costs of the arbitration and on the allocation of expenditure
among the respective Parties to the arbitration proceedings.
	 
	22.6	 	The decision of the arbitration proceedings shall be final and binding upon both Parties.
Enforcement of the award rendered by the arbitral tribunal may be entered into any court
having
jurisdiction thereof.
	 
	22.7	 	The arbitrators shall have the authority to issue injunctions or other equitable relief.
	 
	23.	 	Applicable Law
	 
	 	 	All disputes shall be settled in accordance with the provisions of this Agreement
and all other agreements regarding its performance, otherwise in accordance with the
substantive law in force in Germany, without reference or recourse to other laws. The
application of the United Nations Convention on Contracts for the International Sale of
Goods of April 11, 1980 shall be excluded.





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	24.	 	MISCELLANEOUS
	 
	24.1	 	This Agreement cannot be modified except by written
instrument signed by both Parties and
approved by the competent governmental authorities. This requirement of written form can
only be
waived in writing.
	 
	24.2	 	Except otherwise provided in this Agreement, communications between Infineon and Winbond
shall be given in writing, by post, via 

e-mail or by telefax, to the following addresses of
the Parties
or to such other addresses as the Party concerned may subsequently notify in writing to the
other Party:
	 
	 	 	If to Infineon to:
	 
	 	 	Infineon Technologies AG
	 
	 	 	Legal Department
	 
	 	 	P.O. Box 80 0949
	 
	 	 	81609 Munich, Germany
	 
	 	 	Tel: + 49 89 234 26991; fax: - +49 89 234 26993
	 
	 	 	If to Winbond to:
	 
	 	 	Winbond Electronics Corporation
	 
	 	 	Legal Department
	 
	 	 	No. 4, Creation Road III
	 
	 	 	Science-Based Industrial Park
	 
	 	 	Hsinchu, Taiwan, R.O.C.
	 
	24.3	 	No right or interest in this Agreement shall be assigned or transferred to any third party by
either
Winbond or Infineon without first obtaining written consent from the other Party except that
Infineon may freely assign this Agreement to a Subsidiary or to a third party to whom all
or
substantially all of the business unit to which this Agreement pertains is transferred.
	 
	24.4	 	If any provision contained in this Agreement is or becomes ineffective or is held to be
invalid by a
competent authority or court having final jurisdiction thereover, all other provisions of
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	 	 	Agreement shall remain in full force and effect and there shall be substituted for
the said invalid provision a valid provision having an economic effect as similar as
possible to the original provision.
	 
	24.5	 	This Agreement constitutes the entire understanding and agreement between the Parties
hereto with respect to the subject matter hereof and shall supersede and cancel all previous
agreements, negotiations and commitments, either oral or written, relating hereto.
	 
	25.	 	SURVIVAL
	 
	 	 	Section 1,10,11,13 (to the extent specified in 13.8),
16, 22, 23 shall survive termination of
this Agreement regardless of the basis for such termination. All obligations contemplated to
be performed, whether as a whole or in part, after termination of this Agreement, shall in
fact survive after termination of this Agreement regardless of the basis for such
termination.
	 
	26.	 	ANNEXES
	 
	 	 	Annexes 1 through 4, which are attached hereto, shall
constitute an integral part hereof. The Annexes have the following titles:
	 
	 	 	Annex 1 Part I: Transfer Price for Contract Products
	 
	 	 	Annex 1 Part II: Transfer Price for Jointly Developed
Products
	 
	 	 	Annex 2 Part I: Reserved 300mm-Capacity for Contract Products
	 
	 	 	Annex 3: Product or Process Change Notification
	 
	 	 	Annex 4: Quality Criteria
	 
	 	 	Annex 5: Infineon logo





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     IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed in
duplicate by their respective duly authorized representatives:



	 	 	 	 	 	 	 	 	 
	Winbond Electronics
Corporation	 	 	 	Infineon Technologies AG
	 
	 	 	 	 	 	 	 	 
	 

	 	[SEAL]
	 	 	 	 
	 	 
	 
	By:

	 	/s/ Ching Chu Chang
	 	 	 	By:
	 	/s/
Michael Majerus
	Name:

	 	Ching Chu Chang
	 	 	 	Name:
	 	Michael Majerus
	Title:

	 	President
	 	 	 	Title:
	 	MP CFO
	Date:

	 	Aug. 6, 2004
	 	 	 	Date:
	 	6/8/2004
	 
	 	 	 	 	 	 	 	 
	And By:

	 	 	 	 	 	And By:
	 	/s/
Klaus Fleischmann
	 

	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:
	 	Klaus Fleischmann
	 

	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:
	 	VP Bus. Dev.
	 

	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Date:
	 	Aug. 6, 2004
	 

	 	 	 	 	 	 	 	 





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ANNEX 1




Part 1: TRANSFER PRICE FOR CONTRACT PRODUCTS





	 	o	 	Purchases of Contract Products shall be according to [***] Transfer
Prices.
	 
	 	o	 	The Transfer price for Contract Products is calculated [***] basis as follows: [***]





Part II: TRANSFER PRICE FOR JOINTLY DEVELOPED PRODUCTS





	 	o	 	Purchases of Jointly Developed Products shall be on a [***] according to [***]
	 
	 	o	 	The Transfer price for Jointly Developed Products is
calculated on a [***] as follows: [***]





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[***]




	 	 	 
	 

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ANNEX 2




Part I.: Reserved 300mm-Capacity for Contract Products



Infineon will reserve and Winbond will provide [***] of Winbond 300mm–capacity (in wspw) for the
sale to Infineon. The quantity is based on a maximum of
[***] wafers per month total capacity in
the Phase 1 and a maximum of [***] wafers per month total capacity including the Phase 2 of the
project capped at 15k per month according to the investment plan contemplated by Winbond and
Infineon.



The Reserved 300mm–Capacity of [***] will be at least 50% of the Reserved 300mm–Capacity of
[***]. There is no capacity allocation on 90nm Contract Product from [***] and beyond The Reserved
300mm–Capacity in [***] will be [***] per month exclusively for Specialty DRAMs. There is no
capacity allocation on 90nm Specialty DRAM for Infineon from [***] and beyond.




	 	 	 
	 

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ANNEX 3




PRODUCT OR PROCESS CHANGE NOTIFICATION



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ANNEX 4




QUALITY CRITERIA




[***]




	 	 	 
	 

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Annex 6




Basic rules and regulations of the Frontend Fab Cluster




[***]




	 	 	 
	 

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[***]




	 	 	 
	 

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[***]




	 	 	 
	 

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