EX-10.I.L



 







Exhibit 10(i)(L)









Qimonda AG

Confidential Materials Omitted and Filed Separately with the

Securities and Exchange Commission

Confidential Portions denoted by [***]








Product Purchase and Capacity Reservation Agreement




by and between




Hwa-Ya Semiconductor Inc., having its registered offices at Hwa-Ya Technology Park,

Fuhsing 3rd Road, Kueishan, Taoyuan, Taiwan, R.O.C., Taiwan, R.O.C.




 
– hereinafter referred to as “JV” – 




on the
first part


and



Nanya Technology Corporation, having its registered offices at Hwa-Ya Technology Park

669, Fuhsing 3rd  Road, Kueishan, Taoyuan, Taiwan, R.O.C.




 
– hereinafter referred to as “NTC” – 




and




Infineon Technology AG, having its registered offices at St. Martin Strasse 53,




81669 Munich, Germany




  – hereinafter referred to as “Infineon” –  




on the second part




  – JV, NTC and Infineon are hereinafter collectively referred to as the “Parties” and severally

referred to as a “Party”; NTC and Infineon are hereinafter collectively referred to as the

“Buyers” and severally referred to as a “Buyes”
– 




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Preamble



WHERAS, NTC and Infineon have formed JV as a joint venture company for the development,
manufacture and sale of semiconductor products subject to a Joint Venture Agreement (“Joint
Venture Agreement”);



WHEREAS, NTC, Infineon and JV have entered into a Know How Transfer Agreement (“KHTA”) under
which NTC and Infineon transfer and license certain know how relating to DRAM processes and
products to JV;



WHEREAS, NTC, Infineon and JV wish to allocate JV’s total wafer manufacturing capacity to
different process corridors with the understanding that the majority of JV’s total wafer
manufacturing capacity will be used for the production of standard DRAM products to be sold
exclusively to NTC and Infineon;




NOW, THEREFORE, the Parties agree as follows:





Article 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	 	“Commodity DRAM Corridor” shall mean a certain portion of the Total Capacity
assigned to the production of Commodity DRAM Products for the Buyers.
	 
	1.2	 	“Commodity DRAM Products” shall mean mainstream DRAM products in wafer
form, which






	 	a)	 	have a highly standardized specification,
	 
	 	b)	 	are targeted for high production volumes,
	 
	 	c)	 	follow JEDEC standards,
	 
	 	d)	 	have densities between 256Mbit and 4Gbit,
	 
	 	e)	 	include SDRAM interface standards such as SDR, DDR and DDR II, and





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	 	f)	 	use the Contract Process






and are designed by or on behalf of NTC and/or Infineon, including improved and/or modified
versions thereof. Commodity DRAM Products shall exclude any embedded DRAM products.




	1.3	 	“Contract Process” shall mean DRAM process technology transferred to JV under the KHTA.
	 
	1.4	 	“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, ProMOS Technologies
Inc, Hsinchu, Taiwan, and Winbond Electronics Corporation, Hsinchu, Taiwan, and
shall further include JV, 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.
	 
	1.5	 	“Products” shall mean Commodity DRAM Products and Specialty DRAM Products
JV sells to the Buyers under this Agreement.
	 
	1.6	 	“NTC Development Area” shall mean a certain portion of JV’s cleanroom space that
NTC may use to set-up a development line using NTC equipment, at NTC’s cost.
	 
	1.7	 	“NTC Development Wafers” shall mean DRAM products manufactured in the NTC
Development Area that JV shall sell exclusively to NTC.
	 
	1.8	 	“Output Share” shall mean the respective share of JV’s Total Capacity that is assigned to
each Buyer,
	 
	1.9	 	“Specialty DRAM Corridor” shall mean a certain portion of the Total Capacity assigned to the
production of Specially DRAM Products for the Buyers using a Contract Process that is one of
the processes being used by the JV’s Commodity DRAM Corridor.





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	1.10	 	“Specialty DRAM Products” shall mean all low volume DRAM products in wafer
form targeting special applications, using the Specialty DRAM Corridor and a
Contract Process, that is one of the processes being used by the JV’s Commodity
DRAM Corridor which show in terms of performance significant changes to
Commodity DRAM Products. Specialty DRAM Products shall include but not be
limited to low power applications such as SDR, DDR and IT SRAM, high speed
applications for graphics and networking, but shall exclude embedded DRAMs.
	 
	1.11	 	“Total Capacity” shall mean the total wafer manufacturing capacity of JV measured in
wafer starts per week (‘wspw’).
	 
	1.12	 	“Transfer Price” shall mean the price of the Products JV charges to the Buyers which is
calculated according to Annex 1.
	 
	1.13	 	“Subsidiary” shall mean any legal entity which is or becomes owned or controlled directly or
indirectly by a Party hereto as to more than fifty percent (50%) of such legal entity’s
issued share capital, voting rights and/or the like.





Article 2
– Utilization of JV’s Wafer Manufacturing Capacity





	2.1	 	The Total Capacity of JV shall be allocated to following
process corridors:
	 
	 	 	
At least 80% of the Total Capacity shall be allocated to the Commodity DRAM Corridor,
with the remaining portion of the Total Capacity allocated to the Specialty DRAM Corridor.
	 
	 	 	Each Buyer may assign a maximum of 10% of the Total Capacity to the production of
Specialty DRAM Products. Each Buyer may use its portion of the Specialty DRAM Corridor for
the manufacture of a maximum of four Specialty DRAM Products. In case that the demand of
Specialty DRAM Products of such Buyer falls short of 10% of the Total Capacity, the remaining
portion of the Total Capacity shall be filled with Commodity DRAM Products for that Buyer.
	 
	2.2	 	The Parties agree, that a maximum of two different DRAM process technologies shall be used
in the Commodity DRAM Corridor and that a maximum of five Commodity DRAM Products shall be
manufactured at the same time. Such five (or less)





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Commodity DRAM Products shall be exclusively determined out of the following list of
products (provided, however, that during the first twelve months after the establishment of
JV, Commodity DRAM Products shall be limited to a maximum of three):




	 	1)	 	One 110nm product designed by Infineon;
	 
	 	2)	 	One 110nm product designed by NTC;
	 
	 	3)	 	One lead 90nm product and one lead 70nm product jointly developed under the
Technical Cooperation Agreement;
	 
	 	4)	 	One 90nm product and one 70nm product designed by NTC; and
	 
	 	5)	 	One 90nm product and one 70nm product designed by Infineon.






	2.3	 	Each Buyer may assign a minimum of 40% of the Total Capacity to the production of Commodity
DRAM Products. Each Buyer may in its discretion use its portion of the Commodity DRAM
Corridor for the manufacture of Commodity DRAM Products in accordance with the decision of
JV’s board of directors on which products out of the list of products specified in Article 2.2
are to be manufactured in JV.
	 
	2.4	 	With respect to the Products that fall within items 1, 2, 4 or 5 indicated above, the
Buyer who provides the design will be responsible for setting up the product testing and
qualification mechanism at wafer level with the engineering support by JV,
	 
	2.5	 	In addition, JV may manufacture any other 110nm, 90nm or 70nm Product designed
by either Buyer upon written agreement between the Buyers on terms and conditions
of manufacturing of such Product in JV and how such Product may be manufactured
and successfully commercialized by the other Buyer in its own facility at terms
reasonable and equitable to both Buyers. In case either Party wishes the Company to
manufacture any product developed by such Party, such Party shall be responsible for
setting up the Product testing and qualification mechanism at wafer level with the
engineering support by JV.
	 
	2.6	 	JV shall sell all Products solely to the Buyers. The Output Share of each Buyer shall
be 50% of the Total Capacity. Each Buyer shall have the right and obligation to buy a
quantity of Products from JV that corresponds to its Output Share.





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	2.7	 	In the event either Buyer needs additional wafer fabrication capacity for processing
Products, it may (i) request the other Buyer to temporarily or permanently adjust the Buyers’
Output Share, or (ii) request JV and the other Buyer to consider expansion of the Total Capacity.
	 
	2.8	 	Throughout the term of this Agreement JV shall cooperate with the Buyers to maintain
records that reflect the utilization of JV’s wafer manufacturing capacity by the Buyers. JV shall
allow the Buyers to verify these records for accuracy and completeness as often as they may
reasonably request.
	 
	2.9	 	JV shall reserve 200 sqm of its cleanroom space for the NTC Development Area. NTC may use
the NTC Development Area to set up at its own cost a development line. JV will also process NTC
Development Wafers for NTC if such wafers: (i) use portions of the Contract Process (ii) do not
endanger the yield, performance and logistics of the Contract Process (iii) are counted against
and are limited by the wspw agreed for NTC’s Specialty DRAM Corridor; and NTC shall reimburse all
costs relating to the manufacture of the NTC Development Wafers. Until the JV is ready to equip
the NTC Development Area for its own purposes, NTC may use the space assigned to it free of
charge. The JV shall give 3 months prior written notice to NTC before completely equipping the
rest of its facility. NTC shall then bindingly declare, if it wishes to continue using the NTC
Development Area or decommission it at its own cost. In case of such continued use by NTC the
Buyers and the JV shall agree on a reasonable monthly rent payable by NTC to JV for the continued
use of the NTC Development Area.





Article 3
– Forecasts





	3.1	 	In order to plan for the efficient utilization of JV’s manufacturing capacity, the Buyers
agree to exchange forecasts with JV and such other information as is reasonably requested by JV.
No later than five months before the beginning of each calendar year, JV will provide the Buyers
with a preliminary capacity plan in units of wspw per DRAM process technology of the said calendar
year. Within one month after receipt thereof, the Buyers shall provide JV with an annual forecast
in units of wspw per





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DRAM process technology for every week. The Buyers shall mutually agree on the capacity per
DRAM process technology that will be shared in equal parts. JV shall use reasonable best efforts
to meet the request of the Buyers. Based on the Buyers’ request, JV 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 Buyers during the said calendar year.




	3.2	 	The Product mix for each Buyer’s Output Share is determined by the Buyers
according to the principles of this Agreement. If any Buyer wishes to modify the
Product mix and/or production capacity, the Buyer shall inform JV in writing on a
monthly basis and in manner which is timely synchronized to the Frontend Fab
Cluster’s rolling forecast process. Such modification shall be subject to the condition
that no substantial change of the production process flow or equipment will occur due
to the modification.
	 
	3.3	 	Once per month JV will plan parameter values (chips per wafer, yields, cycle times,
quality shares) together with the Buyers and synchronized with the Frontend Fab
Cluster planning process. JV shall provide the Buyers 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 file. In addition,
yields, cycle times
and wafer starts must be provided accurately and regularly compatible to Buyers IT
landscape.
	 
	3.4	 	The Parties will further jointly review this forecast mechanism, taking into account
practical operation.





Article 4
– Ordering





	4.1	 	Four working days prior to the beginning of each calendar month, the Buyers shall issue to
JV a non-cancelable purchase order (“Purchase Order”). The Purchase Order shall:
	 
	 	 	–          specify the Product mix;





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	 	–	 	provide for the ordering of quantities sufficient to cover the Buyer’s Output Share;
	 
	 	–	 	respect the allocation of JV’s manufacturing capacity to different process corridors;
	 
	 	–	 	specify the applicable price and delivery date.






	4.2	 	JV shall be obliged to accept the Purchase Order if it is within the scope of the
Buyer’s Output Share and the capacity allocation to process corridors and shall
confirm acceptance thereof within three working days after its receipt.
	 
	4.3	 	Should JV’s output during a quarter fall below the ordered quantities of Products, the
Buyers shall accept delivery of the deficient quantities and issue to JV a revised
Purchase Order to account for such shortfall. Should output during a quarter exceed
the ordered quantities of Products, the Buyers shall accept delivery of the additional
quantities and issue to JV a supplementary Purchase Order to cover such excess.
	 
	4.4	 	Subject to Article 4.1, each Buyer may reschedule or change the mix of Products it
has ordered from JV by written notice prior to the scheduled delivery, provided that
JV will have (i) the materials and (ii) the capability to fulfill such revised Purchase
Order within the time available and (iii) that the respective Buyer shall pay for any
additional costs incurred by JV and (iv) that the respective
Buyer shall buy and take
the Products already made per the original Purchase Order.





Article 5
— Delivery, Title and Risk of Loss





	5.1	 	JV shall ship the Products to the Buyers, or at the request of a Buyer to such Buyer’s
Subsidiary or subcontractor. In no event will JV maintain any significant inventory
for the Buyers. The Buyers shall provide JV with reasonable assistance in meeting
their 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 JV) shall
be paid by the Buyers.
	 
	5.2	 	Title and risk of loss shall pass ‘FCA JV’s production facilities’ according to Incoterms 2000.





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Article 6
– Price and Payment





	6.1	 	JV shall sell all Products to the Buyers and their Subsidiaries on the basis of the Transfer
Price. The prices shall be ‘FCA JV’s production facilities’ according to Incoterms 2000 and
shall include the cost of packing,
	 
	6.2	 	JV shall issue to the Buyers an invoice promptly upon shipment of Products. Payment terms
shall be net 60 days from the date of shipment. Interest at the rate of one percent per month
shall be paid on all overdue amounts.
	 
	6.3	 	NTC and Infineon shall have the right to audit through internal or external auditors all
financial data of JV to verify JV’s computation of the Transfer Price.





Article 7
– Specifications of Products, Inspections





	7.1	 	Each Buyer shall notify JV, with a reasonable lead time, of the electrical, mechanical,
quality-related, marking, and packing specifications to be met by all Products
purchased by them and JV shall deliver Products which meet such specifications.
	 
	7.2	 	The Buyer’s may perform, or may have performed on their behalf and at their
expense, incoming inspection and tests of delivered Products, and shall provide notice
to JV of Products which do not meet the specifications. Failure to provide notice of
rejection within 30 days of receipt of shipment shall be deemed to be an acceptance
by the Buyers, but such failure to reject shall not preclude the Buyers from making a
warranty claim under Article 12.





Article 8
– Scrap Products



Wafers being processed by JV may need to be scrapped from time to time due to product quality
issues, defects, or process errors resulting in non compliance with the specifications of the
respective Product (“Scrap Product”). For the avoidance of doubt, partially finished, untested, or
non-functional Products shall be considered Scrap Products. The JV hereby undertakes to scrap
Products at its cost if the reason for scrapping the Product was caused by JV.




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Otherwise Scrap Products shall be sold to the Buyers at terms to be agreed.



Article 9
– Process Changes




JV will adopt all process changes requested and approved by the Technology Synchronization
Board of the Frontend Fab Cluster. JV shall not implement any process changes unilaterally.



In case of process changes requested by only one Buyer, JV will (i) prior to implementation
seek approval by the Technology Synchronization Board according to the rules and regulations of
the Frontend Fab Cluster as referred to in the KHTA, and (ii) if JV implements such changes
without the approval of the Technology Synchronization Board, such Buyer shall bear all cost
associated with such process change.



Article 10
– Quality Data





	10.1	 	JV agrees to provide all information relating to the quality or reliability of the Products
and the quality systems used to guarantee these standards as foreseen by the rules and
regulations of the Frontend Fab Cluster as referred to in the KHTA.
	 
	10.2	 	JV agrees to maintain reasonable documentation regarding ell Products sold to the
Buyers’ for 10 years after shipment. All Products shall be traceable based on wafer lot
number. Full history shall include applicable wafer fab process recipes, quality
control data, process deviation notes and probe data.
	 
	10.3	 	JV agrees to participate in regular quality system reviews for all Products purchased
by the Buyers. The details of such reviews shall be provided to JV by the Buyers at
least one month in advance.
	 
	10.4	 	JV agrees to provide timely failure analysis on Products that are beyond the Buyers’
analysis capability or which are returned for the purposes of feedback and correlation.
	 
	10.5	 	Each Buyer may review JV’s quality measurement and control systems upon
reasonable advance notice.





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Article 11 – Customer Audit




Upon
reasonable prior notice, JV shall permit the Buyers and their
Subsidiaries and customers to audit JV’s facilities during business hours. Any audit must be in compliance with security,
safely and confidentiality requirements of JV. JV shall support such audits 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.



Article 12 – Warranties





	12.1	 	JV warrants that, at the time of delivery to the Buyers, and
for a period of 21 months from
the date of shipment of the Products to the Buyers, all Products will (i) be clear of any
liens and encumbrances, (ii) be free from any defects in material and workmanship, and (iii)
will conform to all written specifications of the Buyers applicable to such Products.
	 
	12.2	 	The Buyers shall advise JV of any claims for such defects in writing within the period of
the said warranty. If Products are not as warranted, JV shall, at the Buyers’ choice, (i)
repair the defect(s), or (ii) replace the defective Products and reimburse the Buyers’ for
costs of handling and transporting of the defective Products; or (iii) refund the Transfer
Price of the defective Products and reimburse the Buyers for costs of handling and
transporting of the defective Products.





Article 13 – Industrial and Intellectual Property Rights





	13.1	 	JV does not warrant or represent that Products manufactured with the Contract Process will
be free from infringement of intellectual property rights of third parties, unless such claim
is attributable to JV’s unauthorized change of the Contract Process, or any non-compliance
with specifications or instructions given to JV by the Buyers for the manufacture of
Products.
	 
	13.2.1	 	As between the Parties, it is NTC’s responsibility to indemnify JV and to defend, settle or
otherwise solve at its expense any dispute arising from a claim of a third





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party, wherein the third party alleges that Products manufactured for and/or sold to NTC by
JV are infringing intellectual property rights of such third party.




	13.2.2	 	As between the Parties, it is Infineon’s responsibility to indemnify JV and to defend,
settle or otherwise solve at its expense any dispute arising from a claim of a third
party, wherein the third party alleges that Products manufactured for and/or told to
Infineon by JV are infringing intellectual property rights of such third party.
	 
	13.2.3	 	For the avoidance of doubt, in the case where a dispute arises from a claim of a third
party as described in this Article 13, and the Products alleged to infringe the
intellectual property rights of such third party are manufactured for and/or sold to
both NTC and Infineon by JV, the responsibility to indemnify JV shall be shared
between NTC and Infineon in accordance with the capacity allocation arrangement of
such Products as pursuant to the terms of this Agreement and in proportion to the
quantity of such Products manufactured for or sold to NTC and Infineon, respectively.
	 
	13.2.4	 	If JV wishes to invoke any such indemnification, JV must, within 30 days of receipt
of notice of infringement, notify the indemnifying Buyer in writing and forward a
copy of said notice. In such case JV shall assign its responsibility and control to
negotiate and settle such claims described in said notice to the indemnifying Buyer
and JV agrees to comply with any reasonable request to assist in the defense of said
claims.





Article 14 – Limitation of Liability





	14.1	 	With the exception of a breach of the confidentiality provision in Article 15, neither
Party assumes any liability, nor shall it be held liable by the other Parties, for any
business interruption, loss of revenues, profits or sales, loss of information or data, or
for any special, incidental, punitive, indirect or consequential damages. Each Party’s
liability for direct costs, losses or damages of the other Parties shall be limited to an
aggregate amount of one million US Dollars.
	 
	14.2	 	The Parties further agree that the rights and remedies contained in this Agreement are
sole and exclusive, and that these remedies are in lieu of any and all other rights and
remedies available at law, in contract, tort, or otherwise.





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Article 15 – Confidentiality





	15.1	 	The Parties undertake to keep all Confidential Information disclosed under this Agreement by
a Party to the other Parties, in confidence for a period of ten years after disclosure to the
receiving Party and not to distribute, disclose, or disseminate such Confidential Information
to anyone except its own or its Subsidiaries’ employees, who have a reasonable need to know
such Confidential Information and who are bound to confidentiality by their employment
agreements or otherwise. The receiving Party shall use the same efforts to avoid publication
or dissemination of Confidential Information received as it employs with respect to
information of its own which it does not desire to be published or disseminated, but not less
than reasonable care.
	 
	 	 	The term Confidential Information as used herein shall include (i) all information disclosed
in written or other tangible form and marked “confidential” or the like, and (ii) all
information disclosed orally, which is confirmed in written or other tangible form within
thirty (30) days after initial oral disclosure.
	 
	 	 	The term Confidential Information shall not include any information which is:
	 
	15.1.1	 	already in the possession of the receiving Party or its Subsidiaries without breach of
obligation of confidence under this Agreement;
	 
	15.1.2	 	now, or hereafter becomes, publicly available without breach of this Agreement;
	 
	15.1.3	 	rightfully received from third parties without obligation of confidence;
	 
	15.1.4	 	independently developed by the receiving Party or its Subsidiaries; or
	 
	15.1.5	 	approved for release by written agreement of the disclosing Party.
	 
	15.2	 	The receiving Party’s obligations with respect to the Confidential Information as specified
in Article 15.1 shall not apply to any disclosure which is in response to a valid order of a
court or a due inquiry of other governmental body of any country or group of countries or any
political subdivision thereof, provided, that the receiving Party shall have notified the
disclosing Party immediately upon learning of any such order and has given the disclosing
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the disclosing Party to contest or limit the scope of such required disclosure including a
protective order, or otherwise required by law.



Article 16 – Term, Termination





	16.1	 	This Agreement shall enter into force upon signature by the Parties hereto and shall
terminate at the same time as the Joint Venture Agreement.
	 
	16.2	 	This Agreement may be prematurely terminated by registered letter with immediate effect by a
Party having such right as herein below provided – and notwithstanding any other rights such
Party may have – upon the occurrence of one of the following events:
	 
	16.2.1	 	by each Party in the event that one of the other Parties has failed in the performance of
any material contractual obligation herein contained, provided that such default is not
remedied to the terminating Party’s reasonable satisfaction within sixty (60) days after
receipt of written notice by the non-terminating Party specifying the nature of such
default and requiring remedy of the same;
	 
	16.2.2	 	by either NTC or Infineon concurrently with a termination for cause of the Joint
Venture Agreement, unless such termination is due to the breach of the Joint Venture
Agreement by a Party requesting termination of this Agreement; or
	 
	16.2.3	 	by either NTC or Infineon concurrently with a termination for cause of the License
and Technical Cooperation Agreement, unless such termination is due to the breach of
the License and Technical Cooperation Agreement by a Party requesting termination
of this Agreement





Article 17 – Rights and Obligations after Termination




Articles 5 and 6 with respect to outstanding shipments and payments and Articles 10.2, 12,
13, 14, 15, 18 and 19 shall survive any termination of this Agreement.



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Article 18 – Arbitration




The Parties hereto shall use their best efforts to amicably resolve any disputes,
controversies or differences which may arise between the Parties in connection with the
interpretation or performance of this Agreement. If any such disputes, controversies or
differences cannot be resolved between the Parties hereto, they shall be finally settled by
arbitration in Hong Kong in accordance with the rules of the International Chamber of Commerce,
Paris (“Rules”). The arbitration shall be conducted by three (3) arbitrators selected in
accordance with the Rules. Arbitration proceedings shall be conducted in the English language. The
procedural law of the place of arbitration shall apply where the Rules are silent. The decision of
the arbitration proceedings shall be final and binding upon the Parties and judgment on any
arbitration decision may be entered in any court of competent jurisdiction for enforcement. The
Parties are aware that the Republic of China is not a signatory to the 1958 Convention on the
Recognition and Enforcement of Foreign Arbitral Awards and therefore wish to state that each of
NTC, Infineon and JV hereby unconditionally and irrevocably consent to the compulsory execution of
any arbitration award rendered against them by any court having jurisdiction over them.



Article 19 – Applicable Law




This Agreement and the performance of the Parties hereunder shall be construed in accordance
with and governed by the substantive laws of the Republic of China, without regard to its conflict
of laws principle. The application of the United Nations Convention on Contracts for the
International Sale of Goods of April 11, 1980 shall be excluded.



Article 20 – Miscellaneous





	20.1	 	This Agreement cannot be modified except by written instrument signed by the
Parties. This requirement of written form can only be waived in writing by the Parties.
	 
	20.2	 	Neither Party shall be liable to the others for failure or delay in the performance of
any of its obligations under this Agreement for the time and to the extent such failure
or delay is caused by force majeure (such as without limitation; riots, wars, freight





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embargo,
shortage of supply, hostilities between nations, governmental laws,
earthquakes, storms, fires, sabotages, explosions or any other contingencies beyond the
reasonable control of the respective party). On the occurrence of such an event, the
affected Party shall immediately inform the other Parties of such circumstances together
with documents of proof and the performance of obligations hereunder shall be suspended
during, but not longer than, the period of existence of such cause and the period
reasonably required to perform the obligations in such cases.




	20.3	 	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.
	 
	20.4	 	Except otherwise provided in this Agreement, communications between Infineon and
JV shall be given in writing, by post, by hand delivery, 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 NTC to:

Nanya Technology Corporation

Legal Department

Hwa-Ya Technology Park 669, Fuhsing 3rd Road

Kveishan, Taoyuan

Taiwan, R.O.C.

Fax: + 886-3-396-0993



If to Infineon to:

Infineon Technologies AG 

Legal
Department 

P.O. Box 800949

81609 Munich, Germany

Fax: - +49 89 234 26993



If to JV to:



Hwa-Ya Semiconductor Inc.



Hwa-Ya Technology Park




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Fuhsing 3rd Road, Kueishan



Taoyuan, Taiwan, R.O.C.

Fax: +886





	20.5	 	No right or interest in this Agreement shall be assigned or transferred to any third
party by a Party hereto without first obtaining written consent from the other Parties
except that NTC and Infineon may freely assign this Agreement to a Subsidiary, or to
a third party, to which all or substantially all assets of their memory products
divisions are transferred.
	 
	20.6	 	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 this 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.
	 
	20.7	 	This Agreement and any documents attached hereto constitute the entire agreement
between the Parties with respect to the transactions contemplated hereby and, except
as otherwise expressly set forth herein, supersedes all prior discussions,
understandings, agreements and negotiations between the Parties with respect to such
subject matter.
	 
	20.8	 	With respect to the subject matter of this Agreement, the provisions of this Agreement
shall prevail over any terms in any purchase order, order acknowledgment or other
form or agreement
	 
	20.9	 	Annex 1 attached hereto, shall constitute an integral part hereof.





Execution Copy













 

 




 18



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



	 	 	 	 	 	 	 	 	 
	Nanya Technology Corporation	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Jih Lien
	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Name:

	 	Jih Lien	 	 	 	 	 	 
	Title:

	 	President	 	 	 	 	 	 
	Date:

	 	Nov, 13, 2002	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Infineon Technologies AG	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Harold Eggers
	 	 	 	And by:
	 	/s/ Michael Majerus
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	Dr. Harold Eggers
	 	 	 	Name:
	 	Dr. Michael Majerus
	Title:

	 	CEO, Memory Products
	 	 	 	Title:
	 	CFO, Memory Products
	Date:

	 	November 13, 2002
	 	 	 	Date:
	 	November 13, 2002
	 
	 	 	 	 	 	 	 	 
	Hwa-Ya Semiconductor Inc.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ C. J. Nu
	 	 	 	And by:
	 	/s/ Karlheinz Horninger
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	C. J. Nu.
	 	 	 	Name:
	 	Dr. Karlheinz Horninger
	Title:

	 	Chairman
	 	 	 	Title:
	 	EVP Inotera Memories, Inc.
	Date:

	 	7/15/2003
	 	 	 	Date:
	 	June 16th, 2003






Execution Copy






 






 




 19




Annex
1 to the Product Purchase and Capacity Reservation Agreement has been


superseded and replaced by Annex 1 to the First Amendment to the
Product 

Purchase and Capacity Reservation Agreement














 





First Amendment to Product Purchase and Capacity Reservation Agreement




by and between




Inotera
Memories, Inc, having its registered offices at Hwa-Ya Technology
Park, 4F, 669,

 Fuhsing 3rd Road, Kueishan, Taoyuan, Taiwan, R.O.C., Taiwan, R.O.C




-
hereinafter referred to as “JV” - 

 on the first part




and




Nanya Technology Corporation, having its registered offices at Hwa-Ya Technology Park

669, Fuhsing 3rd Road, Kueishan, Taoyuan, Taiwan, R.O.C.




- hereinafter referred to as “NTC” -




and




Infineon Technologies AG, having its registered offices at St. Martin Strasse 53,

81669 Munich, Germany

- hereinafter referred to as “Infineon” -

on the second part




- JV,
NTC and Infineon are hereinafter collectively referred to as the
“Parties” and severally 

referred to as a “Party”; NTC and Infineon are hereinafter
collectively referred to as the 

“Buyers” and severally referred to as a “Buyer” -




WHEREAS The Parties have entered into a Product Purchase and Capacity Reservation Agreement on
July 15, 2003 (“PPCRA”);



WHEREAS The Parties have jointly agreed to change the Transfer Price calculation to reflect the
distribution of the margin achieved from selling non-QC and non-NC dies picked from wafers supplied
by JV;



WHEREAS The Parties have jointly agreed to change the Transfer Price calculation to reflect the
assembly losses in the back end more accurately;



First Amendment to PPCRA



1









 






WHEREAS The Parties have jointly agreed to define more specifically the parameters needed for the
Transfer Price calculation;



NOW THEREFORE, in consideration of the premises and mutual covenants contained herein, the Parties
agree to amend the PPCRA as follows:




	1.	 	Article 5.2. shall be replaced by the following:

	 
		 	
“Title to the Products shall pass upon delivery or the Products
to Buyer. The risk of loss
shall pass ‘EXW JV’s production facility’ according to Incoterms 2000, as amended.”
	 
	2.	 	The second sentence of Article 6.1 shall be replaced by the following:

	 
		 	
“The prices shall be ‘EXW JV’s production facility’ according to Incoterms 2000, as
amended, and shall include the cost of packing”
	 
	3.	 	Annex 1 shall be restated as attached hereto and shall supersede all previous versions
of this Annex 1.
	 
	4.	 	Unless expressly modified by this First Amendment, all of the other provisions of the
PPCRA shall remain intact and unchanged.
	 
	5.	 	This First Amendment shall come into full force and effect and shall become an
integral part of the PPCRA from the last date the Parties sign below.





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



	 	 	 	 	 
	Nanya Technology Corporation	 	 
	 
	 	 	 	 
	By:

	 	/s/ Jih Lien	 	 
	 

	 	 	 	 
	Name:

	 	Jih Lien	 	 
	Title:

	 	President	 	 
	Date:

	 	March 18, 2005	 	 






First Amendment to PPCRA



2








 





	 	 	 	 	 	 	 	 	 	 	 
	Infineon Technologies AG	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Thomas Seifert
	 	 	 	And by:
	 	/s/ Michael
Majerus

	 

	 	 
	 	 	 	 	 	 
	Name:

	 	Thomas Seifert
	 	 	 	Name:
	 	Michael
Majerus

	Title:

	 	MP CEO
	 	 	 	Title:
	 	MP - CFO

	Date:

	 	05.04.05
	 	 	 	Date:
	 	05.04.05
	 
	 	 	 	 	 	 	 	 	 	 
	Inotera Momories, Inc.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Charles Kau
	 	 	 	And by:
	 	/s/ Karlheinz
Horninger

	 

	 	 
	 	 	 	 	 	 
	Name:

	 	Charles Kau
	 	 	 	Name:
	 	Karlheinz
Horninger

	Title:

	 	President
	 	 	 	Title:
	 	E.V P

	Date:

	 	March 23, 2005
	 	 	 	Date:
	 	25.03.2005







First Amendment to PPCRA



3









 




Annex 1: Transfer Price




Section I Principles




The calculation of the Transfer Price to be charged by the JV to the Buyers has been agreed
upon by the Parties to be performed by the following rules:




	a)	 	The Products will be sold from JV to the Buyers at Transfer Prices per wafer.
These Transfer Prices will be calculated for all wafers of a certain diameter (e.g. 300mm).
All Commodity DRAM Products, [***] Specialty DRAM Products will be sold at [***] wafer transfer prices.


	 
	b)	 	
 In principle, the Transfer Price for the Commodity DRAM Products will be calculated as
follows:






	 		 	bl) Transfer Price [***]
	 
	 	 	 	b2) Margin =            [***]            [***]




Transfer Price Principle for Commodity DRAM Products



[***]




Annex 1 to First Amendment to Product Purchase and Capacity Reservation Agreement



 









 



 





	c)	 	The Transfer Price for the Specialty DRAM Products will be calculated as follows:
	 
	 	 	Transfer Price =[***]
	 
	d)	 	For all wafers that do not fulfill the QC quality criteria as
jointly defined by the Buyers, regardless if they carry Commodity DRAM Products or Specialty DRAM Products, [***]
as calculated according to b) and c) above. [***]
Transfer Prices for Commodity DRAM Products and specialty DRAM Products to the JV.
	 
	e)	 	After July 15th, 2004, JV shall be reimbursed by the Buyers with a premium for
additional potential revenue based on Downgrade Business as follows;
	 
	 	 	e1) for any additional revenue between July 15th, 2004, and Feb. 28th, 2005, the
reimbursement of each Buyer to JV shall be calculated as 2.5% of the wafer sales from JV to
the Buyer in accordance with the aforesaid paragraph a) of this Section as a premium (the
“DG-Business Premium”).
	 
	 	 	e2) the percentage of the DG-Business Premium under paragraph el) of this Section shall be
increased to 5% starting from March of 2005 onwards.
	 
	 	 	The percentage set forth in paragraph e2) of this Section shall be reviewed on a quarterly
basis based on the DG-Business implemented by the Buyers. First review shall take place
in June of 2005. Any change of the percentage of the DG-Business Premium will have to be agreed
by all Parties in writing based on the results of the quarterly reviews of the DG-Business of
IFX and NTC. For quarterly reviews of the Buyers’ DG Business, the Buyers shall provide the JV
the necessary reports agreed by IFX, NTC and IMI.
	 
	 	 	- JV will invoice the Buyers by adding the DG-Business Premium set forth in this paragraph
to the preliminary and final Transfer Price respectively. Thereafter the charging for the
DG-Business by JV to the Buyers shall follow the standard wafer sales between JV and the Buyers
with regards to invoicing and payment terms, etc. The mechanism will follow Article 6.2 of the
PPCRA.
	 
	f)	 	The calculation sheet to be used for the calculation of all Transfer Prices according to a) -
e) above,
for a given diameter, is given under Section II (sec below).
	 
	g)	 	The purchase orders for a certain calendar month will be based on “Preliminary Transfer
Prices”,
using forecasted values for the items A, C, E, H, I1, N and Q of the formula.
	 
	h)	 	Not later then 4 weeks after that calendar month, the “Final Transfer Prices” will be
calculated by using the actual values of that month for the items A,
C, E, H, I1, N and Q.
	 
	i)	 	The difference between payments based on “Preliminary Transfer Price” and payments due to
“Final Transfer Price” will be charged / refunded not later
than 6 weeks after that calendar
month.
	 
	j)	 	The Parties will take all reasonable efforts and provide all relevant data in order to
allow timely calculation of the Preliminary Transfer Price and the Final Transfer Price.
	 
	k)	 	In the formula used for the Transfer Price, as per Section II (see below), [***] (i)
[***] (ii) [***]the market price, (iii)
[***] to





Annex 1 to First Amendment to Product Purchase and Capacity Reservation Agreement











 







	 	 	the Buyer, (iv) [***]
	 
	1)	 	The procedure for evaluating the monthly Front End Cost per Commodity DRAM Product wafer
(item N on the formula as per Section II) and the Front End Cost
per Specialty DRAM Product
wafer (item O on formula as per Section II) shall be agreed upon between the Parties [***]
	 
	 	 	The Parties agree that [***] specially DRAM
product wafers [***] in the Transfer Prices of the
specialty DRAM Product wafers.





Annex 1 to First Amendment to Product Purchase and Capacity Reservation Agreement






















 



 




Section II Definitions & Formula



Section II.I: Definition




[***]



Section II.2: Transfer Price Calculation Sheet




Annex 1 to First Amendment to Product Purchase and Capacity Reservation Agreement










 



 


[***]