EX-10.I.G



 








Exhibit 10(i)(G)











Qimonda AG

Confidential Materials Omitted and Filed Separately with the

Securities and Exchange Commission.

Confidential Portions denoted by [***].









Joint Venture Agreement



This Joint Venture Agreement (hereinafter the “Joint Venture Agreement” or this “Agreement”) is
entered into by and between



Nanya Technology Corporation, a company legally established under the laws of the Republic of China
and having its head office at Hwa-Ya Technology Park 669, Fuhsing 3rd Road, Kueishan,
Taoyuan, Taiwan, Republic of China (hereinafter “NTC”), and



Infineon Technologies AG, a company legally established under the laws of Germany and having its
head office at St.-Martin-Strasse 53, D-81669 Munich, Germany (hereinafter “IFX”) (collectively
the “Parties”).



WHEREAS, the Parties entered into a Memorandum of Understanding and an Addendum to Memorandum of
Understanding, both dated May 2, 2002 in order to negotiate in good faith definitive agreements
dealing with a technical cooperation project and a manufacturing joint venture; and



WHEREAS, concurrent with execution of this Agreement, the Parties enter into a Technical
Cooperation Agreement to jointly develop the 90nm and 70nm DRAM process technology between the
Parties.



NOW, THEREFORE, in consideration of the foregoing and of the mutual agreements and covenants
contained herein, intending to be legally bound, the parties agree as follows:



Article 1. Establishment of the Joint Venture Company





	 	1.1	 	Joint Venture Company
	 
	 	 	 	The Parties agree to establish a joint venture company (hereinafter the “Company”) to
operate a 300mm wafer fab with a capacity of at least 50K wafer starts per month
(hereinafter “Module I”). The Company will initially apply the 90nm and 70nm DRAM
process technology to be jointly developed by the Parties and licensed to the Company,
or such other DRAM technology agreed by the Parties. In addition to this Agreement,
certain agreements will be entered into among the Parties and the Company, either
concurrently with the execution of this Agreements or upon establishment of the
Company (hereinafter referred to as the “Ancillary Agreements”), as follow:






	 	a)	 	Know How Transfer Agreement (as attached in Appendix A): to transfer
the technology jointly developed by the Parties to the Company as pursuant to the
Technical Cooperation Agreement.





 









 








	 	b)	 	Product Purchase and Capacity Reservation Agreement (“PPCRA”) (as
attached in Appendix B): to deal with matters relating to product purchase and
capacity allocation and reservation of the Company.
	 
	 	c)	 	Land Sale and Purchase Agreement (as attached in Appendix C): to sell
certain land from NTC to the Company.
	 
	 	d)	 	Services Agreement (as attached in draft form in Appendix D): for NTC and
eventually its Affiliates to provide certain support services to the Company.






	 	1.1-1	 	The Parties shall act as quickly as possible to establish a company limited by shares under
the laws of the Republic of China. The name of the
Company shall be  (“Hwa-Ya Semiconductor Inc.”) in Chinese.
	 
	 	 	 	The Company shall additionally have an English name. Infineon shall have the right to
choose this English name for the Company, and provide an alternative name if the first
name is reasonably refused by NTC.
	 
	 	1.1-2	 	Address of the Company: The registered address of the company shall be at Hwa-Ya Technology
Park, Fuhsing 3rd Road, Kueishan, Taoyuan, Taiwan, Republic of China.
	 
	 	 	 	Registered Business of the Company: The registered business of the Company is set forth
in government applications and in the Articles of Incorporation of the Company as
attached in Appendix E.
	 
	 	1.1-3	 	Business Activities: Notwithstanding the registered business scope of the Company, the
Parties agree to cause and allow the Company to engage only in the business of the
development, manufacture and sale of semiconductor products.
	 
	 	1.1-4	 	Articles of Incorporation: The Company shall adopt Articles of Incorporation pursuant to the
laws of the Republic of China in the form as attached to this Agreement as Appendix E. The
Articles of Incorporation shall be consistent with the terms of this Agreement and in case of
any conflict the terms of this Agreement shall prevail as between the Parties. Without
limiting the foregoing, the Parties shall exercise all rights available to them to give effect
to the terms of this Agreement and shall take all reasonable steps to amend the Articles of
Incorporation to the extent necessary to remove such inconsistency or conflict.
	 
	 	1.2-1	 	Procedure of application: The Parties shall jointly undertake the procedures for investment
in a Joint Venture Company pursuant to the Statute for Investment by Foreign Nationals. IFX
may at its option delegate the performance of application procedures to NTC.
	 
	 	1.2-2	 	Merger control: If any transaction under this Agreement is subject to premerger control
and/or premerger notification, then this Agreement shall not become effective unless the
competent antitrust authorities shall have





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	 	 	 	given the relevant permissions or clearances to the transaction under premerger
control or unless any required premerger notification waiting period shall have
expired.






	 	1.3	 	Capitalization






	 	1.3-1	 	Authorized Capital: At the formation of the Company, the authorized capital of
the Company shall be NT$ 7.7 billion (equivalent of US$ 220 million at a conversion
rate of 35 NT$ for one US$), which shall be divided into 770 million shares of common
stock, each having a par value of NT $10.
	 
	 	1.3-2	 	Issued and Outstanding Capital: At the formation of the Company, the outstanding
and issued share capital shall be NT$ 2.45 billion (equivalent of US$ 70 million), out
of which (i) NT$ 875 million (equivalent of US$ 25 million ) shall be paid in the
Company by each of the Parties as equity, and (ii) NT$ 700 million (equivalent of US$ 20
million) shall be paid in the Company by a special purpose vehicle incorporated under
the laws of the Republic of China (“SPV”), set up jointly by the Parties, for the sole
purpose of granting employee shares pursuant to the terms and conditions set forth by
the Board of Directors. The equity shall be paid in cash in the fourth calendar quarter
of 2002, the exact date to be determined by the Board of Directors of the Company.
	 
	 	1.3-3	 	Shareholder’s Loan: Subject to Subsection 1.3-7, up to NT$ 2.625 billion
(equivalent of US$ 75 million) shall be provided to the Company by each of the Parties
as shareholder loans (“Shareholder’s Loan”) until the third calendar quarter of 2003 in
equal installments by each Party according to the financial needs of the Company and as
determined by the Board of Directors of the Company.
	 
	 	1.3-4	 	Capital Increase: The Company may from time to time increase its outstanding
and issued share capital. In this case, additional funds raised with the increased
capital shall first be used to pay off the Shareholder’s Loan. The exact dates and
conditions of capital increases and repayments of Shareholder’s Loan shall be
determined by the Board of Directors of the Company.
	 
	 	1.3-5	 	SPV: The SPY shall be established under the laws of the Republic of China by the
Parties for the sole purpose of buying shares in the Company, administrating and selling
these shares to the employees of the Company pursuant to the terms and conditions to be
set forth by the Company’s Board of Directors. The SPV shall adopt Articles of
Incorporation pursuant to the laws of the Republic of China in the form as attached to
this Agreement as Appendix I. The SPV shall be set up by the Parties simultaneously with
the establishment of the Company and shall be capitalized by the Parties with NT$ 700
million (equivalent of US$ 20 million) in equal installments by each Party of NT$ 350
million (equivalent of US$ 10 million. The SPV shall then subscribe for 70 million shares of the Company at nominal value of NT$ 10 per share. Upon





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	 	 	 	affirmative decision of the Parties and subject to the conditions as to be determined
by the Board of Directors of the Company and the SPV, the SPV shall later offer the shares
in the Company to the Company’s employees, whereby the sales price per share shall be NT$ 10
per share plus reasonable interest. Upon completion of this employee participation program,
the SPV shall be dissolved and the proceeds from the share sale (equivalent of US$ 20
million plus interest) shall be redistributed to the Parties according to their respective
shareholding of 50% in the SPV.
	 
	 	1.3-6	 	Transfer of Shares to employees of NTC and/or IFX: Each Party shall have the option to
offer to its employees shares in the Company up to a maximum number of 35 million shares of
10 NT$ nominal value of each share. The Parties may choose to make use of this option until
December 31st, 2004 at the latest. Both Parties shall be obliged to restrict their
respective employees to a minimum shareholding period of two years after the receipt of such shares.
	 
	 	1.3-7	 	Funding: The Parties agree that the Company shall require funding for the purpose of
building-up the production capacity of Module I in accordance with the Top Level Business
Plan attached in Appendix F, which may be revised from time to time by the unanimous consent
of the Parties. The max funding requirement for Module I up to December 31st, 2005
shall be US$ 2.2 billion comprising (a) US$ 1.1 billion in issued and paid up capital (via
the issue of shares as set out in this Section 1.3), or Shareholder Loans and (b) as may be
approved by the Board of Directors, US$ 1.1 billion by way of grants, credit facilities
and/or bank loans. As a principle, the Parties agree that the debt ratio of the Company shall
be at anytime at least 50%. Each Party shall have the obligation to provide the Company with
50% of the funding outlined in a) above.
	 
	 	1.3-8	 	Subscription ratio: Each of the Parties shall subscribe to equal outstanding and issued
share capital of the Company. No third party shall subscribe to share capital of the Company
unless jointly agreed upon by the Parties or otherwise provided by law.
	 
	 	1.3-9	 	Except as agreed in Subsection 1.3-7, agreement between the Parties shall be necessary to
determine the timing and necessity of increases in the capital of the Company. Furthermore,
for such agreed capital increases as indicated herein, each Party shall have the right and
obligation to subscribe to new shares in the same proportion as its then current ownership of shares. For the avoidance of doubt, this Agreement shall impose no obligation on any Party to
provide any additional funding other than what is stipulated herein, whether in the forms of
loans, equity or otherwise.
	 
	 	1.3-10	 	The Company shall provide for its own loan financing according to the decision of its Board
of Directors. Both Parties shall support the Company in obtaining the most favorable terms
for its loan financing. None of the Parties shall be obliged to make any guarantees of
financing unless this is separately agreed by the Parties.





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	 	1.4	 	Limitations on Sale, Transfer and Other Disposition, and Use of Shares as Security






	 	1.4.1	 	Within five (5) years after the incorporation of the Company, or until the shares
of the Company are listed on Taiwan Stock Exchange or any other stock exchanges of
Taiwan, Republic of China (the “Stock Exchange”), whichever is earlier, neither Party
shall, without the prior written consent of the other Party, sell, transfer or otherwise
dispose of its shares (except for, (i) transferring all but not part of its shares to an
Affiliate, or (ii) transfers of shares to employees under Subsection 1.3-6, each under
the terms of this Agreement and in accordance with the provisions of the Articles of
Incorporation), or pledge, hypothecate or otherwise use its shares as security, or grant
options over its legal and beneficial interest in its shares. Any action of a Party
violating this provision shall be void and shall be considered a material breach of this
Agreement in accordance with Subsection 7.3 (a).
	 
	 	1.4-2	 	To the extent that the restrictions of Subsection 1.4.1 cease to apply and in the
case that either Party desires to sell to a bona fide third party all or any of its shares of the Company (such Party hereinafter the “Selling Party”), the other Party shall
have a right of first refusal to purchase such shares (except for transferring all but
not part of its shares to an Affiliate under the terms of this Agreement and in
accordance with the provisions of the Articles of Incorporation). The Selling Party shall
first give a written notice to the other Party (hereinafter the “Receiving Party”)
setting forth i) the number of shares proposed to be transferred (hereinafter the
“Offered Shares”), ii) the proposed purchase price, terms and payment and other material
terms and conditions received from a bona fide third party and iii) an irrevocable offer
to sell Offered Shares to the Receiving Party (hereinafter the “Sale Offer”) at the same
price and on the same terms and conditions as set forth therein. For the avoidance of
doubt, the right of first refusal stipulated in this Subsection 1.4-2 shall apply only
when i) the shares of the Company remain unlisted after five (5) years of incorporation
of the Company; or ii) in the case where the shares of the Company are listed on the
Stock Exchange, the right of first refusal stipulated herein shall only apply for the
Off-the-Market Sale of shares of the Company by either Party.
	 
	 	 	 	For the purpose of this Subsection 1.4-2, Off-the-Market Sale shall mean the sale of shares of a company which lists its shares on the Stock Exchange not through such
Stock Exchange.
	 
	 	1.4-3	 	The Receiving Party shall have the right to purchase the Offered Shares
pursuant to the Sale Offer, in whole or in part, by delivering a written notice to the
Selling Party within 30 days from the date of the Sale Offer, irrevocably stating
therein that all of the Offered Shares will be purchased by the Receiving Party.
	 
	 	1.4-4	 	If the Receiving Party provides to the Selling Party the notice specified in
the immediately preceding paragraph, then the Receiving Party shall have 30 days to
complete the purchase of the Offered Shares upon the terms set





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	 	 	 	forth in the Sale Offer (hereinafter the “Purchase Period”), provided, however, that
the Purchase Period shall be extended until such date as all required approvals, consents or
authorizations in connection with such purchase are obtained.
	 
	 	1.4-5	 	If the Receiving Party shall not have completed such purchase within the Purchase Period,
as extended as provided herein, then the Selling Party shall have the right for 90 days
thereafter (hereinafter the “Transfer Period”) to transfer the Offered Shares not subject to
any of the restrictions set forth in this Agreement; provided, however, that such transfer is
consummated on terms not more favorable to the purchasers thereof than the terms specified on
the Sale Offer; and provided, further, that the Transfer Period shall be extended until such
date as all required approvals, consents or authorizations in connection with such purchase
are obtained.
	 
	 	1.4-6	 	If at the end of the Transfer Period, as extended as provided herein, the Selling Party has
not completed the sale of the Offered Shares, the Selling Party shall no longer be permitted
to sell such Offered Shares pursuant to this Section 1.4.
	 
	 	1.4-7	 	In such case that any Party transfers all or part of its shares in the Company to an
Affiliate or a third party in accordance with Section 1.4, this Agreement shall not terminate
and such Selling Party shall remain liable to all obligations under this Agreement, and it is
a precondition for such transfer of shares that 1) the Selling Party shall have caused such
Affiliate or third party to enter into an agreement with the other Party by which such
Affiliate or third party agrees to be bound by the covenants of this Agreement and the
Ancillary Agreements and to perform the obligations of the Selling Party under this Agreement
and the Ancillary Agreements, and that 2) the Selling Party shall have caused such Affiliate
to agree that should it at anytime cease to be an Affiliate it will before this happens
transfer all its shares in the Company to another Affiliate of the original Selling Party.
	 
	 	1.4-8	 	Notwithstanding anything to the contrary of other provisions set forth in this Section 1.4,
neither Party shall sell any of its shares of the Company to any Competitors of the Company.
For purposes of this Agreement, a Competitor shall mean a company which conducts the
businesses of development, manufacture or sale of semiconductor products which are in
competition with the Company’s products at any time.
	 
	 	1.4-9	 	Notwithstanding anything to the contrary of other provisions set forth in this Article 1,
each Party shall own a minimum of 26% of the outstanding shares of the Company at any time;
and shall not pledge, hypothecate or otherwise use its shares as security, or grant options
over its legal and beneficial interest in these 26% of the outstanding shares
(“Encumbrance”). Any action in violation of this provision shall be considered a material
breach of this Agreement according to Subsection 7.3 (a). In case the non-breaching Party
decides not to terminate this Agreement for material breach according to Subsection 7.3(a),
it may





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	 	 	 	choose that each Party’s Output Share shall be adjusted by the following
formula: The breaching Party shall be obligated to offer to the non-breaching
Party, and the non-breaching Party shall have the right of first refusal to the
offer from the breaching Party, a share of the Total Capacity amounting to 2[x]%
of the Total Capacity of the Company if the breaching Party’s shareholding is
[x]% less than 26% of the shares of the Company, or if the breaching Party’s
shareholding free of any Encumbrance is [x]% less than 26% of the shares of the
Company. By way of example: If the breaching Party’s shareholding is decreased to
16% of the outstanding shares of the Company, it shall offer to the non-breaching
Party 20% (2[26-16])% of the Total Capacity.
	 
	 	 	 	The terms Output Share and Total Capacity used in this Subsection 1.4-9 shall
have the same meaning as defined in the PPCRA and the Parties shall cause the
Company to comply with this Subsection 1.4-9.






	 	1.5	 	Changes in Subscription Ratio
	 
	 	 	 	In case of a change pursuant to Section 1.4 in the subscription ratio established in
Subsection 1.3-7, the Parties shall revise Article 2 of this Agreement to provide for
nomination and voting of officers and directors and other management in accordance with
the shareholding ratio at that time.
	 
	 	1.6	 	Time Schedule and Costs of Establishment
	 
	 	 	 	Each of the Parties agrees to the timetable with several milestones hereto attached as
Appendix G for the establishment of the Company and the operation of the plant and,
furthermore, both Parties shall cooperate to make progress according to the timetable.
Except for salaries of the staff of each Party, the Company shall bear all of the costs
of establishing the Company.
	 
	 	1.7	 	Interim Committee
	 
	 	 	 	The Parties have established an interim committee to review, monitor and approve all
necessary costs associated with establishing the Company. Upon the incorporation of the
Company, the Company shall reimburse any and all such costs incurred by each of the
Parties.




Article 2. Management Structure and Operation





	 	2.1	 	Shareholders Meeting






	 	2.1-1	 	Matters to be decided by the Shareholders Meeting shall be as follows:






	 	(a)	 	Revision of the Articles of Incorporation;
	 
	 	(b)	 	Appointment and dismissal of the directors and the
supervisors, and determination of their compensation;
	 
	 	(c)	 	Approval of the balance sheet and other financial
statements received from the Board of Directors;
	 
	 	(d)	 	Determination of dividends and of disposition of losses;





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	 	(e)	 	Merger, consolidation, restructuring or reorganization of
the Company;
	 
	 	(f)	 	Sale of all or substantially all assets of the Company;
	 
	 	(g)	 	Appointment and removal of the Company’s auditors;
	 
	 	(h)	 	An initial
public offering of the company’s shares;
	 
	 	(i)	 	Voluntary submission by the Company to receivership, bankruptcy,
or any similar status;
	 
	 	(j)	 	Liquidation or dissolution of the Company; and
	 
	 	(k)	 	Other matters
reserved to the determination of the Shareholders Meeting by the Company Law of the Republic of China.






	 	2.1-2	 	Matters such as the method of announcing the Shareholders Meeting, the legally
required number of attendants, and the required number of votes for decisions shall be
in accordance with the Articles of Incorporation of the Company and the Company Law of
the Republic of China subject to the following:






	 	a)	 	Each shareholder of the Company shall be given timely, written notice
of the time, date, agenda and place of the Shareholders Meeting, in no event later
than 15 days prior to the date of convocation of such meeting. All
notices and agendas of Shareholders Meetings shall be accompanied by
accurate and complete English language translations thereof.
	 
	 	b)	 	A quorum for a Shareholders Meeting shall require the presence, in
person or by proxy, of shareholders of the Company holding more than 60% of the
total outstanding shares of the Company.
	 
	 	c)	 	Resolutions of the Shareholders Meetings shall be adopted by the
affirmative vote of 60% of the shares represented in person or by proxy at a
Shareholders Meeting at which a quorum is present.






	 	2.1-3	 	Each share shall be entitled to one vote.
	 
	 	2.1-4	 	In case where a shareholder cannot attend a Shareholders Meeting, such
shareholder may appoint a representative by issuing a proxy in writing in accordance
with the laws of the Republic of China.






	 	2.2	 	Directors, Supervisors, President and Executive Vice President






	 	2.2-1	 	Unless otherwise agreed by the Parties, the Chairman, directors, supervisors,
President and Executive Vice President of the Company shall be appointed and replaced
by the Parties in accordance with the following method:






	 	(a)	 	There shall be 8 directors, of whom NTC shall appoint 4 directors and
IFX shall appoint 4 directors.
	 
	 	(b)	 	There shall be 2 supervisors, of whom NTC shall appoint 1
supervisor and IFX shall appoint 1 supervisor.





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	 	(c)	 	NTC shall nominate a director of the Company, and provide an
alternative nominee if the first nomination is not agreed by IFX, to be appointed
as the Chairman of the Board of the Company.
	 
	 	(d)	 	The appointment of the President and the Executive Vice President
shall be jointly consented by the Parties. However, neither Party shall
unreasonably withhold such consent. If the President is appointed by one Party,
the other Party may appoint the Executive Vice President.
	 
	 	(e)	 	Each Party shall cause the performance of such Chairman, President,
Executive Vice President, directors, supervisors, and/or other
managers appointed or nominated by such Party to be in accordance with this
Agreement.






	 	 	 	The Parties agree to vote in the Shareholders Meeting or meeting of Board of
Directors, as the case may be, in favor of the candidates appointed by the other Party
as stipulated in this Subsection 2.2-1.
	 
	 	2.2-2	 	Subject to the Company Law of the Republic of China, the term of the directors
and the supervisors shall be three (3) years, and it shall be possible to reappoint any
of them to any number of terms.
	 
	 	2.2-3	 	If the Company needs to comply with legal requirements for the appointment of
independent directors and supervisors as will be provided in the Company Law, Securities
Exchange Law and any other laws or regulations, the Parties agree to co-operate in good
faith and to work out an appropriate contractual arrangement to maintain the Company as
joint venture between the Parties as equal partners with regard to the directors,
supervisors and the management of the Company.






	 	2.3	 	The Board of Directors






	 	2.3-1	 	The responsibilities of the Board of Directors shall be as follows:






	 	(a)	 	Appointment and removal of the Chairman of the Board, approval and
removal of the President and Executive Vice President of the Company appointed by
the Chairman, approval and removal of Vice Presidents and Assistant Vice
Presidents of the Company appointed by the President;
	 
	 	(b)	 	Approval of the annual and quarterly budgets (including but not
limited to the production plan, the business plan, the profit and loss plan, the
capital investment plan, and the financial plan);
	 
	 	(c)	 	Change of issued and outstanding share capital of the Company;
	 
	 	(d)	 	Determination of long term policies of the Company including
substantial change in the organizational structure and business operation of
the Company;





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	 	(e)	 	Determination of employment terms including compensation packages of President, Executive Vice President, Vice Presidents and Assistant Vice Presidents of the
Company;
	 
	 	(f)	 	Establishment of subsidiaries, opening and closing of branch offices, acquisition of the
whole or part of the assets of another company or business, establishment of new business
sites and closing of existing ones;
	 
	 	(g)	 	Setting the limits of authorities of various positions and approving the chart of
authorities;
	 
	 	(h)	 	Approval of capital expenditure in the amount of US$2,000,000 or more in a single event or a
total of US$10,000,000 or more in a quarter proposed by the President and the Executive Vice
President, as well as ratified by the Chairman, in case where the capital expenditure exceeds
the quarterly budget approved by the Board of Directors in the quarterly Board meeting;
	 
	 	(i)	 	Approval of any borrowing and lending with respect to banks and third parties in the amount
of US$ 2,000,000 or more;
	 
	 	(j)	 	Preparation and submission to the Shareholders Meeting of the financial accounts (including
dividends and disposition of losses);
	 
	 	(k)	 	Creation of pledge, hypothecation, encumbrance or other security on the Company’s assets;
	 
	 	(l)	 	Issuance of debt securities;
	 
	 	(m)	 	Transfer, sale or any other disposal of major assets other than in the ordinary course of
business in the amount of more than US$ 2,000,000;
	 
	 	(n)	 	Conclusion or termination of agreements regarding intellectual property rights and know how;
	 
	 	(o)	 	Conclusion of any agreement or other arrangement with, or for the benefit of any director of
the Company;
	 
	 	(p)	 	Establishment or change of any significant accounting principles;
	 
	 	(q)	 	Initiation of new product lines or discontinuation of existing product lines;
	 
	 	(r)	 	The commencement of any litigation as plaintiff or the settlement by the Company of any
litigation against it;
	 
	 	(s)	 	Submission of other matters to the Shareholders Meeting for consideration or approval as may
be required by law;





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	 	(t)	 	Decision to modify, extend or terminate any of the agreements with the
Parties listed in Section 1.1. and any other agreements between the Company and any of
the Parties;
	 
	 	(u)	 	Repurchase of the Company’s own shares; and
	 
	 	(v)	 	Decision of other important matters related to the Company and transactions
other than in the ordinary course of business of the Company.






	 	 	 	A resolution adopted by a majority of all the members of the Board of Directors shall be
required for the Joint Venture Company, its Chairman, its President and Executive Vice
President, or any of its directors, personnel or supervisors to engage in any matters which
are within the responsibilities of the Board of Directors.
	 
	 	2.3-2	 	An attendance by a simple majority of the directors in person or through representation
shall be necessary to form a quorum. Resolutions of the Board of Directors shall be in
writing, and shall be adopted by a majority vote of all Directors (whether attending the
Board Meeting or not), unless a higher majority of votes is specifically provided for in the
Company Law. The Chairman shall not be entitled to a second or casting vote.
	 
	 	2.3-3	 	In case where any director of the Company cannot attend a meeting of the Board of Directors,
that director may appoint another director as representative in accordance with the Company
law of the Republic of China. All or any of the directors may participate in a meeting of the
Board of Directors by means of a video conference which allows all persons participating in
the meeting to see and hear each other. A director so participating shall be deemed to be
present in person at the meeting and shall be entitled to vote or be counted in a quorum
accordingly.
	 
	 	2.3-4	 	Meetings of the Board of Directors shall be called by the Chairman. Each director of the
Company shall be given timely, written notice of the time, date, agenda and place of the
Directors meeting, in no event later than 14 days prior to the date of convocation of such
meeting. In emergency cases the meeting of the Board of Directors can be called by the
Chairman by giving a minimum of two working days notice.
	 
	 	 	 	The Chairman shall designate, at the time when the Chairman is appointed, one of the
IFX-nominated directors as agent during the office term to convene the Board of Directors
meeting when the Chairman cannot convene such meeting himself, or does not designate any
other director to do so on his behalf, for any reason. Each director of the Company shall
have the right to request the Chairman to call a Board of Directors meeting indicating the
proposed agenda. If the Chairman cannot, within one week, comply with the director’s
request, the IFX-nominated director designated by the Chairman as specified in this
Subsection 2.3.4 may call the meeting on behalf of the Chairman.





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	 	2.4	 	Operation
	 
	 	 	 	Except as determined in the Company Law of the Republic of China or in the Articles of
Incorporation of the Company, the Board of Directors and the Chairman of the Board
shall delegate the daily operation and management of the Company jointly to the
President and Executive Vice President, including without limitation:






	 	(a)	 	Appointment of Vice Presidents and Assistant Vice Presidents of the
Company;
	 
	 	(b)	 	Proposal to the Board of Directors of annual and quarterly budgets
and business plan of the Company;
	 
	 	(c)	 	Approval of capital expenditure in the amount of up to US$ 2,000,000
in a single event, or a total of up to US$ 10,000,000 in a quarter;
	 
	 	(d)	 	Approval of borrowing and lending and disposition of assets in the
amount of up to US$ 2,000,000; and
	 
	 	(e)	 	Execution of annual and quarterly budgets approved by the Board of
Directors.






	 	 	 	The President and Executive Vice President shall manage the Company as a team. The
Executive Vice President shall report to the President and will have specific
responsibilities as determined by the Board of Directors. The Executive Vice President
shall represent the President in case he is unable to fulfill his duties.




Article 3. Construction and Operation of the Fab





	 	3.1	 	Manufacturing Plan
	 
	 	 	 	The Company will initially construct a wafer fab (hereafter “Module I”) with a target
capacity of 50.000 300mm wafer starts per month (hereafter “wspm”). Market conditions
permitting, [***] will be located at NTC’s existing site_at Hwa-Ya Technology Park
669, Fuhsing 3rd Road, Kueishan, Taoyuan, Taiwan, Republic of China.






	 	3.1-1	 	Land Sale and Purchase Agreement: NTC agrees to sell the land to
the Company (as per the Land Sale and Purchase Agreement attached as Appendix C)
for the construction and operation site and to provide all information and
assistance necessary for the Company to obtain all permits and approvals
necessary for the construction and operation of the wafer fab.
	 
	 	3.1-2	 	Services Agreement: NTC and eventually its Affiliates will supply
certain services to the Company, including without limitation warehouse control
service, security service, management information system and other management and
support services. An offer for terms and conditions for





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	 	 	 	the provision of such services is set forth in the draft Services Agreement
attached as Appendix D which is subject to approval of the Board of Directors of the
Company.






	 	3.2	 	Production Capacity of Module I
	 
	 	 	 	The timetable for the ramping-up of Module I’s capacity is set forth in the Top Level
Business Plan attached as Appendix F, which specifies 50,000 wspm capacity in the first
stage. Subject to further adjustment by both Parties in good faith, the first silicon will be
made available for sale during the first quarter of 2004.






	 	3.3	 	Technology Transfer
	 
	 	 	 	Each of NTC and IFX shall transfer to the Company the 90nm and 70nm DRAM process technology
jointly developed in a technical cooperation project specified in a separate Technical
Cooperation Agreement. If IFX and NTC are the only shareholders of the Company (including
employee shares described in Subsection 1.3-6), [***] will be payable by the Company to NTC
and IFX for the technology transfer specified in this Section 3.3.
	 
	 	 	 	Both Parties shall provide the Company sufficient start-up training and other transfer
support.
	 
	 	 	 	The terms and conditions of the technology transfer and training are set forth in the Know
How Transfer Agreement as attached in Appendix A.






	 	3.4	 	Plant Design, Plant Construction, Plant Equipment Purchasing, and Plant
Construction Management






	 	3.4-1	 	After establishment of the Company a Building and Infrastructure Office Team
(the “BIO”) will be formed comprised of engineers dispatched from both Parties and -
where available - staff employed by the Company. The joint team shall be established
under a project guide to be mutually agreed between the Parties.
	 
	 	 	 	The BIO will be led in parity by one engineering team leader of each Party and will
report to the President of the Company or to the person assigned by the President.
	 
	 	 	 	The BIO will be in place until the completion and handing-over of the building and
infrastructure to production.
	 
	 	 	 	The BIO shall manage the design, detail engineering, progress on construction and
the budget for the building and infrastructure works including change management.
	 
	 	 	 	The IFX team members shall provide technical and financial expertise especially with
regard to the 300mm wafer fab. Furthermore the IFX team





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	 	 	 	members shall ensure continuous experience exchange between IFX and the
Company.
	 
	 	 	 	The NTC members shall provide detailed design and engineering, procurement and
supervision of the construction works. Furthermore NTC shall provide detailed
information on the proposed site, applicable national and local laws and
statutory regulations including environmental protection and other applicable
matters, as well as security and safety for the proposed site including relevant
areas related to the construction works.
	 
	 	 	 	Actual costs of the BIO engineers, such as salaries, travel and living
expenses shall be borne by the Company.
	 
	 	 	 	The Hook Up Office (HUO) shall be established in due time acting in the sense of
the aforementioned. Detailed regulations shall be mutually agreed.






	 	3.5	 	Frontend Fab Cluster
	 
	 	 	 	Both Parties agree to make the Company a member of the Frontend Fab Cluster. The
Company will therefore adopt all cluster-wide process improvements and will operate in
accordance with the regulations of the Frontend Fab Cluster as described in the
Know-How Transfer Agreement




Article 4. Product Purchase and Capacity Reservation





	 	 	 	NTC and IFX shall assign the Total Capacity of the Company into the following
corridors:
	 
	 	 	 	Commodity DRAM Corridor, which constitutes a minimum of 80% of the Total Capacity of
the Company and is assigned to the production of Commodity DRAM Products using the
process technology developed by the Parties under the Technical Cooperation Agreement.
	 
	 	 	 	Specialty DRAM Corridor, which constitutes up to 20% of the Total Capacity of the
Company.
	 
	 	 	 	Terms and conditions of matters relating to product purchase and capacity reservation
are set forth in the Product Purchase and Capacity Reservation Agreement as attached
in Appendix B and capitalized terms used in this Article 4 shall have the same meaning
as defined in the PPCRA.




Article 5. Employment and Materials





	 	5.1	 	Employment






	 	5.1-1	 	Employment: The Company shall employ by itself all necessary
staff except for a number of employees (the “JV Employees”) to be dispatched





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	 	 	 	from each of the Parties, subject to approval by the Board of the Company. Both
Parties shall cooperate in order to obtain the employment of a sufficient number of
staff of the Company who are high in quality and loyal to the Company at the Taiwanese
market-based compensation level. Additional costs associated with the transfer and
employment of the JV Employees shall be borne by each of the Parties from which such JV
Employees are transferred; provided, however, that the Company shall reimburse each of
the Parties for costs and expenses incurred as a result of loss of experienced staff
for an amount of up to 6 months of salary for each of the JV Employees.
	 
	 	5.1-2	 	Position of the dispatched staff: Each of the Parties shall dispatch and/or
transfer a certain number of staff to join the Company as JV Employees. Each Party
shall follow the provisions of Labor Standard Law and other applicable labor laws and
regulations of the Republic of China with respect to the retirement and other benefits
of JV Employees dispatched or transferred to the Company.






	 	5.2	 	Purchasing of Materials






	 	5.2-1	 	Masks required for the manufacturing of the Commodity DRAM Products will
initially be supplied by IFX’s affiliated mask shop Advanced Mask Technology Center
GmbH & Co. KG, Dresden, Germany (“AMTC”) under ordinary business terms. Once a
qualified second source of masks is available, the Company may purchase from such
alternative source, however, AMTC should be given a right of first refusal as long as
it can offer at least the same terms and conditions (commercially and technically) as
any of the alternative mask sources for such masks.
	 
	 	5.2-2	 	Purchasing of machinery, equipment, tools, major and minor raw materials,
consumables and the like (the “Procurement Items”) shall be handled as follows:






	 	  a)	 	The technical selection of the Procurement Items shall
be in accordance with the rules and regulations of the Frontend Fab Cluster and
the Frontend Fab Cluster shall determine the vendors for such Procurement Items.
	 
	 	  b)	 	In order to ensure the most favorable purchasing conditions, the JV
shall purchase the Procurement Items from vendors determined by IFX and NTC under
the commercial frame conditions established between such vendors and IFX or NTC.
	 
	 	  c)	 	NTC shall provide procurement services (operational execution) to the
Company on the same terms and conditions as it provides like services to other
customers.






	 	5.3	 	Supply of Utilities, Waste Water Disposal and other Waste Disposal
	 
	 	 	 	NTC shall provide to the Company adequate amounts of utilities at adequate quality on the
customary terms and conditions. NTC shall cooperate with the Company for the disposal of
waste water and other wastes. NTC shall bill to the





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	 	 	 	Company each month the actual costs of waste disposal determined by the amount
disposed of in the previous month on the customary terms and conditions.
	 
	 	 	 	Terms and conditions of matters relating to supply of utilities, waste water and other
disposals as specified in this Section 5.3 are set forth in the Services Agreement as
attached in Appendix D.
	 
	 	5.4	 	Information System
	 
	 	 	 	The Parties agree that the Company shall establish it’s own information systems
organization that is responsible for procuring and/or providing all of the information
systems and technology required for the operation of the Company (the “Company’s IT
Organization”). The Company’s IT Organization shall establish and operate the
Company’s IT infrastructure, including information systems and all supporting
services. The term “establish and operate” as used in the previous sentence shall mean
that the Company’s IT Organization shall execute these responsibilities either
directly or by entering into commercial contracts with third parties to procure
equipment, technology and services as required. The Company’s information systems and
technology, and the Company’s IT Organization shall be determined and shall be
operated in accordance with the provisions of the IT Strategy Appendix which is
attached hereto as Appendix H.




Article 6. Accounting and Dividend Policy





	 	6.1	 	Accounting






	 	6.1-1	 	The accounting year of the Company shall be from January 1 to
December 31.
	 
	 	6.1-2	 	Within 10 days after the end of each month and 20 days after the end
of each quarter, the Company shall submit to each Party its unaudited balance
sheet and profit and loss statement of such month or such quarter, as the case may
be.
	 
	 	6.1-2	 	Each Party shall have the right to audit or have audited, and/or
require copies of the accounts of the Company. The accounts of the Company shall
be kept in accordance with the laws of the Republic of China. Monthly financial
accounts according to ROC GAAP and quarterly financial accounts according to US
GAAP shall be made available to both Parties.
	 
	 	6.1-4	 	Unless otherwise determined by the Board of Directors, the Parties
agree to appoint KPMG as its certified public accountants.
	 
	 	6.1-5	 	In order to cooperate with the public reporting of financial
statements of the Parties, the Company shall tender to NTC and IFX such accounting
records including without limitation the financial statements as are necessary for
the consolidated accounting of the Company with either or





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	 	 	 	both Parties. Expenses relating to the preparation of such accounting
records for the Party so requesting shall be borne by such Party.






	 	6.2	 	Dividend Policy
	 
	 	 	 	In each year that the Company has realized a profit after accounting for any tax
liability and covering of accumulated losses, 10% of the remaining profit shall be
retained as legal reserves. After providing for any voluntary reserves as decided
by the Shareholders Meeting, 1% of the then remaining profits shall be set aside
for the directors and supervisors of the Company, and 1% to 8% of the then
remaining profits shall be set aside for employee as bonuses; provided, however, at
least 50% of such employee bonus shall be distributed in the form of stock
dividends. The remainder of the profit, if any, may be announced and paid as
dividends to the shareholders in cash or stock, such as shall be determined from
year to year by the Board of Directors and approved by the Shareholders Meeting.
Any other remaining profit shall be kept by the Company as retained earnings.





Article 7. Term and Termination





	 	7.1	 	Subject to obtaining relevant anti-trust approvals as stated in Subsection
1.2-2, if applicable, this Agreement shall become effective upon signing (hereafter the
“Effective Date”), and continue in force unless terminated.
	 
	 	7.2	 	Other than set forth in the Sections 7.3 and 7.4 of this Agreement, this
Agreement may be terminated by written consent of both Parties.
	 
	 	7.3	 	In case of the occurrence of any of the following circumstances this Agreement
may be terminated with immediate effect by either Party by serving written notice (the
“Termination Notice”) to the other Party:






	 	(a)	 	Material breach of this Agreement by a Party (where only the
non-breaching Party shall have the right to unilaterally terminate this
Agreement as specified in this Section 7.3 and the breaching Party was granted
a 60 days cure period before the Termination Notice is served and did not cure
the material breach within this 60 day period);
	 
	 	(b)	 	In the case that the non-terminating Party has applied for
liquidation or reorganization under applicable bankruptcy law, or has applied
for or is the subject of a third party action for bankruptcy, or is unable to
honor its debts, or in the case of a Force Majeure which continues
uninterrupted for a period in excess of 12 months.
	 
	 	(c)	 	The Technical Cooperation Agreement, or its subsequent
amendments, is terminated for cause, unless such termination is due to the
breach of the Technical Cooperation Agreement by a Party requesting termination
of this Agreement.
	 
	 	(d)	 	The Know How Transfer Agreement, as attached in Appendix B, or
its subsequent amendments, is terminated for cause, unless such termination is





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	 	 	 	due to the breach of the Know How Transfer Agreement by a Party requesting
termination of this Agreement.
	 
	 	(e)	 	The Product Purchase and Capacity Reservation Agreement, as attached in
Appendix C, or its subsequent amendments, is terminated for cause, unless such
termination is due to the breach of the Product Purchase and Capacity Reservation
Agreement by a Party requesting termination of this Agreement.
	 
	 	(f)	 	In the case that either Party has disposed of, or subjected to an Encumbrance
its shares of the Company in violation of Subsection 1.4-9 (where only the
non-violating Party shall have the right to unilaterally terminate
this Agreement).






	 	7.4	 	This Agreement shall be automatically terminated with immediate effect upon the date of the
transfer and sale of all of the shares in the Company by one of the Parties.
	 
	 	7.5	 	In case any of the circumstances stipulated in Section 7.3 occurs, the Party serving
Termination Notice may elect either of the following options:






	 	(i)	 	Within 45 days after the day the Termination Notice was served, to serve a
sale notice (the “Sale Notice”) on the other Party offering to sell all of its shares
at 120% of the Market Value or Net Asset Value, which ever is higher (the “Put Option
Price”).The Party who receives the Sale Notice must, by itself or through a third
party nominee, accept the offer and must purchase all of the requesting Party’s shares
at the Put Option Price within 45 days after the above notice is served.
	 
	 	(ii)	 	Within 45 days after the day the Notice was served, to serve a purchase
notice (the “Purchase Notice”) on the other Party offering to purchase all of its shares at 80% of either the Market Value or Net Asset Value, whichever is lower (the
“Call Option Price”). The Party who receives the Purchase Notice must, by itself or
through a third party nominee, accept the offer and must sell all of its shares to
the requesting Party at the Call Option Price within 45 days after the above notice
is served.






	 	 	 	For the purpose of this Section 7.5, Market Value shall mean i) if the Company is a company
listed in Taiwan Stock Exchange or any other stock exchange of Taiwan, Republic of China
(“Listed Company”) and the Sale Notice is served, the average traded price per share of the
common stock of the Company for the thirty (30) trading days immediately prior to the date
of service of the Sale Notice, multiplied by the total number of shares the non-offering
Party holds as of such date; ii) if the Company is a Listed Company and the Purchase Notice
is served, the average traded price per share of the common stock of the Company for the
thirty (30) trading days immediately after the date of notice of termination of this
Agreement by the terminating Party, multiplied by the total number of shares the
non-offering Party holds as of such date; and iii) if the Company is not a Listed Company,
the value per share appraised by an internationally recognized independent appraiser
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	 	 	 	the auditors of the Company, multiplied by the total number of shares the
non-offering Party holds as of the date of the Sale Notice or the Purchase Notice,
as the case may be.
	 
	 	 	 	For the purpose of this Section 7.5, Net Asset value shall mean the book value of the
Company as determined by its latest available audited financial statements, as
adjusted for capital increase or decrease of the Company or other major corporate
activities which may affect the content of such financial statements, such
adjustments to be made and certified by the Company’s auditors within 30 days after
the Sale Notice or Purchase Notice was served.
	 
	 	7.6	 	In case of occurrence of the termination event set forth in the Subsection
7.3(a), the non-breaching Party shall, in addition to the rights as set forth in the
Section 7.5, be entitled to demand the breaching Party to compensate its damages
incurred by such termination event.
	 
	 	7.7	 	Sections 8.1, 8.3, 8.4.2 and 8.4.3 shall survive termination of this Agreement.
No termination shall relieve any Party from liability for any breach of this Agreement.





Article 8. General Conditions





	 	8.1	 	Confidentiality and Non-use
	 
	 	 	 	During a period beginning at the Effective Date and ending ten (10) years after the
later of the termination of this Agreement or the termination of the Know How
Transfer Agreement set forth in Appendix A, it shall be prohibited for either Party
to disclose to any third party (except Affiliates) information which has been
disclosed by the other, whether such disclosure is direct or indirect, by any means
such as a writing, factory tour, or other means used to communicate information,
provided that such information shall be documented or described in a tangible form
and shall be marked “Confidential” (hereinafter “Confidential Information”). Any
such Confidential Information shall be used only for the purposes of carrying out
this Agreement. Any other use of Confidential Information is prohibited. Each of
the Parties will cause its own and employees of the Company to adhere to the
obligations of this Article 8 through provisions in their respective employment
agreements or otherwise. Confidential Information specifically includes the terms
of this Agreement and its conditions provided however that the Parties may in
connection with an actual or proposed merger or acquisition, and in connection with
the enforcement of its rights under this Agreement and the Ancillary Agreements
disclose the terms and conditions of these agreements in confidence to its legal
counsel, accountants and other advisors.
	 
	 	 	 	Confidential Information does not include information:






	 	(1)	 	Which was obtained legally by the receiving Party prior to its
receipt from the disclosing Party.
	 
	 	(2)	 	Which was or has become public not through any act of the receiving Party.
	 
	 	(3)	 	Which has been received from a third party with no
obligation of confidentiality.





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	 	(4)	 	Which has been independently developed by the receiving Party or its
Affiliates.






	 	 	 	This obligation of confidentiality shall not apply in such case that information is
requested by a government agency of competent jurisdiction but in any case that
Confidential Information is disclosed under this paragraph the Party disclosing
Confidential Information to such government agency shall give the other Party (the
“Information Owning Party”) notice prior to such disclosure which notice shall be
reasonably sufficient to allow the Information Owning Party to seek appropriate action to
prevent such disclosure.






	 	8.2	 	Force Majeure






	 	8.2-1		An Event of Force Majeure
	 
	 	 	 	In the event that either Party is delayed in performing or is prevented from
performing in whole or in part its obligations hereunder due to Force Majeure then
the Party so affected shall have no liability to the other Party in respect of any
resultant delay in performance or non-performance, partially or in whole, of its
obligations under this Agreement (and the other Party shall to a similar extent not
be liable for non performance or delay in performance of its obligations).
	 
	 	 	 	For the purpose of this Agreement, a Force Majeure shall exist only if and during
a period when an event is beyond the control of the Party claiming Force Majeure.
Such event of Force Majeure shall include but not be limited to:






	 	-	 	labor disputes affecting the region,
	 
	 	-	 	fire, explosion directly affecting the facilities concerned, or
	 
	 	-	 	war or other hostilities, flood, earthquake, severe weather
conditions of an extraordinary nature directly affecting the facilities
concerned.






	 	8.2-2	 	Invocation and Duration of Force Majeure
	 
	 	 	 	A Party wishing to invoke Force Majeure shall promptly notify the other Party in
writing giving details thereof, and of the anticipated effect on this Agreement and
of the estimated duration of Force Majeure. Such Party shall use its best endeavors
to resume full performance of its obligations under this Agreement without
avoidable delay.






	 	8.3	 	Applicable Law
	 
	 	 	 	This Agreement shall be construed in accordance with and governed by the laws of the
Republic of China and shall be interpreted thereunder.
	 
	 	8.4	 	Dispute Resolution





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		8.4-1	 	Deadlock






		8.4-1.1	 	In case that a deadlock exists at either the Board of Directors meeting or the
Shareholders’ Meeting (a “Deadlock”), such Deadlock may be submitted by either Party
(containing a notice that summarizes the issues in dispute) to the President of NTC
and the General Manager of the memory products group of IFX for resolution. The
respective officers of NTC and IFX shall meet at least once in person in Hong Kong
(or any other location agreed between the Parties) and will then use their best
effort to resolve the Deadlock in the 30 calendar day period after such Deadlock is
submitted.
	 
	 	8.4-1.2	 	If the officers of the Parties as specified in Subsection 8.4-1.1 are unable to
resolve the Deadlock after expiration of the above period, the Parties shall submit
to a special joint committee for consultation (the “Consultation Committee”). The
Consultation Committee shall be composed of four members, two of whom shall
be appointed by each of the Parties from the Board of Directors of the
respective Parties. The representatives of the Consultation Committee from
each Party shall meet at least once in person in Paris (or any other
location agreed between the Parties) and will then use their best effort to
resolve the Deadlock in the 30 calendar day period after such Deadlock is
submitted to the Consultation Committee in accordance herewith.
	 
	 	8.4-1.3	 	If the Consultation Committee as specified in Subsection 8.4-1.2 are unable to
resolve the Deadlock after the expiration of the above period, the Parties shall
submit the matter to settlement proceedings under the ADR Rules of the International
Chamber of Commerce The attempt to resolve the Deadlock by ADR shall not exceed 30
days.
	 
	 	8.4-1.4	 	If the Parties fail to resolve any Deadlock after exhausting all reasonable
avenues available to them to achieve a mutually acceptable outcome, any Party (“First
Party”) may within 30 days after the result of the mediation, serve a sale notice on
the other Party (“Second Party”) offering Second Party the whole of the First Party’s
shareholding for sale at the price stipulated therein (the “Sale Price”). The sale
notice will provide that the offer will lapse 45 days after the notice is served on
the Second Party.
	 
	 	 	 	The Second Party may, or may nominate a third party to, accept the offer to
purchase the shareholding at the Sale Price at any time before the offer
lapses.
	 
	 	 	 	If the offer is not accepted before it lapses, the Second Party will be
deemed to have served a sale notice on the First Party





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	 		 	offering to sell all its shareholding at the same Sale Price
(proportionate to its shareholding). The First Party will be bound to
accept the offer within 7 days, unless it introduces a third party
which accepts the offer in that period.
	 
	 	 	 	Any sale under this clause shall be effective within 30 days of the
date of acceptance.






	 	8.4-2	 	Dispute
	 
	 	 	 	In case of any dispute between the Parties to this Agreement which dispute is not
due to Deadlock under Subsection 8.4-1, or in case of any alleged breach of this
Agreement, the Parties shall cooperate to reach an amiable resolution of such
dispute. In such case that they are unable to reach such an amicable resolution,
the Parties shall submit such dispute to arbitration. Arbitration under this
Subsection requested by either Party shall be held in Hong Kong.
	 
	 	8.4-3	 	Arbitration
	 
	 	 	 	In case of any arbitration the Parties shall choose three arbitrators in accordance
with the rules of the International Chamber of Commerce. Of the three arbitrators
one each shall be chosen by each of the Parties, and the two arbitrators so chosen
shall choose the third. Such arbitration shall be conducted in the English
language. 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
and IFX hereby unconditionally and irrevocably consent to the compulsory execution
of any arbitration award rendered against them by any court having jurisdiction
over them.






	 	8.5	 	Language
	 
	 	 	 	This Agreement shall be prepared in the English language, and the English language version
shall be official. No translation into German, Chinese or any other language shall be
taken into consideration in the interpretation of this Agreement.
	 
	 	8.6	 	Notice
	 
	 	 	 	All notices required under this Agreement, and all communications made by agreement of the
Parties, shall be made in writing, and shall be delivered either personally, by facsimile,
or by mail. The date of actual receipt by the receiving party shall be deemed the date of
notice under this Agreement. The addresses of each Party for purposes of notice under this
Agreement shall be as follows:





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	 	NTC:	 	Nanya Technologies Corporation
	 
	 	 	 	Hwa-Ya Technology Park 669
	 
	 	 	 	Fuhsing
3rd Road
	 
	 	 	 	Kueishan, Taoyuan
	 
	 	 	 	Taiwan, Republic of China
	 
	 	 	 	 
	 
	 	 	 	Attention: Legal Department
	 
	 	 	 	 
	 
	 	IFX:	 	Infineon Technologies AG
	 
	 	 	 	P.O. Box 80 09 49
	 
	 	 	 	81609 Munich
	 
	 	 	 	Germany
	 
	 	 	 	 
	 
	 	 	 	Attention:       Legal Department
	 
	 	 	 	 
	 
	 	 	 	Copy to:    General Manager Memory Products Division







	 	8.7	 	Transfer
	 
	 	 	 	No right or obligation under this Agreement shall be transferable or assigned to any third
party without the express agreement in writing of the other Party.
	 
	 	8.8	 	Modification of the Agreement
	 
	 	 	 	No modification of this Agreement shall be valid without a writing setting forth such
modification signed by both Parties.
	 
	 	8.9	 	Miscellaneous






	 	8.9-1	 	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, or the competent anti-trust authorities find a provision to be invalid or
request modifications, 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.
	 
	 	8.9-2	 	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.
	 
	 	8.9-3	 	Appendix A through I, which are attached hereto, shall constitute an
integral part hereof. The Appendices have the following titles:
	 
	 	 	 	Appendix A Know How Transfer Agreement
	 
	 	 	 	Appendix B Product Purchase and Capacity Reservation Agreement





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	 	 	 	Appendix C            Land Sale and Purchase Agreement
	 
	 	 	 	Appendix D            Services Agreement
	 
	 	 	 	Appendix E            Articles of Incorporation of the Company
	 
	 	 	 	Appendix F            Top Level Business Plan
	 
	 	 	 	Appendix G            Milestone Timetable
	 
	 	 	 	Appendix H            IT Strategy Appendix
	 
	 	 	 	Appendix I            Articles of Incorporation of the SPV






	 	8.10	 	Interpretation






	 	8.10-1	 	For the purpose of this Agreement, “Affiliate” shall mean, with respect to any Party, any
legal person that directly or indirectly through one or more intermediaries controls, or is
controlled by or is under common control with such Party. For the purpose of this definition,
“control” (including the terms “controlling”, “controlled by” and “under common control
with”), as used with respect to any Party shall mean the possession, directly or indirectly,
of more than 50% of the outstanding shares or voting rights, or of the power to direct or
cause the direction of the management or policies of such person, whether through the
ownership of voting securities, by contract, agency or otherwise.
	 
	 	8.10-2	 	For the purpose of this Agreement, “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 the Company, as well as any other IFX subsidiary or
third party cooperation partner of IFX that IFX may add to the Frontend Fab Cluster. The
Parties acknowledge that certain members of the Frontend Fab Cluster may cease to be members
throughout the term of this Agreement.





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In witness to the above, duly authorized representatives of both
Parties, on the date set out first above, do execute two copies of this
Agreement. Each copy so executed shall be deemed an original of this
Agreement, and each Party shall retain one original.




	 	 	 	 	 	 	 	 	 
	Nanya Technology Corporation	 	 	 	Infineon Technologies AG
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Jih Lien
	 	 	 	By:
	 	     /s/ Harald Eggers
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name:

	 	Dr. Jih Lien
	 	 	 	Name:
	 	Dr. Harald Eggers
	Title:

	 	President
	 	 	 	Title:
	 	CEO, Memory Products Group of Infineon
	Date:

	 	November 13, 2002
	 	 	 	Date:
	 	November 13, 2002
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	     /s/ Michael Majerus
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	Dr. Michael Majerus
	 

	 	 	 	 	 	Title:
	 	CFO, Memory Products Group of Infineon
	 

	 	 	 	 	 	Date:
	 	November 13, 2002






Execution Copy



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Appendix A to Joint Venture Agreement




Know How Transfer 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 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”—





 









 








Preamble




     WHEREAS, 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 has developed certain know how for 120nm DRAM process technology and Infineon
has developed certain know how for 110nm DRAM process technology;



     WHEREAS, NTC and Infineon will jointly develop 90nm and 70nm DRAM process technology (exact
dimensions of “70nm” and “90nm” are still to be defined) subject to the (110nm) License and
(90/70nm) Technical Cooperation Agreement (“Technical Cooperation Agreement”);



     WHEREAS, NTC, Infineon and JV will severally and jointly develop certain technology for DRAM
products;



     WHEREAS, NTC and Infineon wish to transfer certain DRAM process and product technology to JV
to enable JV to manufacture and sell DRAM-products subject to the terms of this Agreement;



     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 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 128Mbit and 2Gbit,



     e) include SDRAM interface standards such as SDR, DDR and DDR II, and



     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.




     1.2 “Contract Products” shall mean Commodity DRAM-Products and Specialty DRAM Products.



     1.3 “Contract Process” shall mean:



     1.3.1 Infineon’s 110nm DRAM process technology (the “Infineon 110nm Process”), as generally
described in Annex 1A hereto, and



     1.3.2 NTC’s 120nm DRAM process technology (the “NTC 120nm Process”), as generally described in
Annex 1B hereto, and



     1.3.3 the 90nm and 70nm DRAM process technology jointly developed by NTC and Infineon, as
generally described in Annex 1C hereto (subject to changes agreed in the Technical Cooperation
Agreement);


on the condition that such process technology listed in Articles 1.3.1 to 1.3.3 is transferred to
JV by NTC and/or Infineon.





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The Contract Process shall exclude Know How relating to the backend manufacturing of semiconductor products.




     1.4 “Effective Date” shall mean the date upon which this Agreement enters into force as per Article 9.1 hereof.



     1.5 “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 Electronices 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 throughout the term of this Agreement.



     1.6 “Improvements” shall mean all technical information on improvements and/or modifications
relating to the Know How, which NTC, Infineon and/or JV develop and/or acquire during the term of
this Agreement and which NTC, Infineon and/or JV are entitled to disclose in accordance with the
terms of this Agreement. The term Improvements, however, shall not include any technical
information on any such improvements and/or modifications which lead to changes in the basic
technical concept of the manufacture and/or testing of Contract Products or to substantial changes
and enhancements in the functionality or performance of Contract Products.



     1.7 “Invention” shall mean any invention or discovery relating to the Know How, conceived or
first reduced to practice solely by one or more employees of JV, or jointly by one or more
employees of JV together with one or more employees of NTC and/or Infineon, during the term of this
Agreement and pursuant to activities performed in JV.



     1.8 “Information Management System” shall mean the knowledge and document control system which
is up to the standard of the industrial general practice maintained in and implemented by JV to
manage and protect its proprietary information, as well as those of any other Party which JV is
obligated to keeping in confidence.



     1.9 “Know How” shall mean all technical information (including but not limited to technical
data or specifications, drawings, engineering information, process or product information,
formulas, information on techniques or methods, software or computer programs, proprietary tools,
processes of record, design information packages and quality know how), relating to Contract
Products and Contract Processes, which is available and used at NTC and/or Infineon at the time of
Shipment Qualification and which NTC and/or Infineon are entitled to license without incurring
payment to third parties.



     1.10 “Know How Package” shall mean different subsets of the Know How and Improvements in
document or other recorded form created by NTC and/or Infineon in order to facilitate the
technology transfer from NTC and/or Infineon to JV. The topics of such Know How Packages shall be
set forth in Annex 2 hereto.



     1.11 “Patents” shall mean all patents and patent applications, including process/design
patents and process/design patent applications, and utility models:



     1.11.1 which are issued or will be issued on patent applications entitled to an effective
priority filing date prior to termination of this Agreement, and





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     1.11.2 which but for this Agreement would have been infringed by JV by using any aspect
or combination of Know How within the scope of the license to use granted in this Agreement, or by
developing, manufacturing and selling any Contract Products, and



     1.11.3 under which NTC and/or Infineon now have, or hereafter obtain prior to termination of
this Agreement, the right to grant rights to use of the same scope granted in Article 5 of this
Agreement without such grant or the exercise of rights thereunder resulting in the payment of
royalties or other consideration by NTC and/or Infineon to third parties (except for payments
between NTC and/or Infineon and third parties for inventions made by said third parties while
employed by or made on behalf of NTC and/or Infineon), unless JV reimburses NTC and/or Infineon for
such payment of royalties or other consideration.


The term “Patents” does not include any patent or patent application related to Non-DRAM Products.




     1.12 “Non-DRAM Products” shall mean all semiconductor products excluding Commodity DRAM
Products and Specialty DRAM Products, such as but not limited to FeRAM or MRAM.



     1.13 “Reference Site” shall mean the manufacturing site from which NTC and/or Infineon will
transfer the Know How to JV.



     1.14 “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 1T SRAM, high speed applications for
graphics and networking, but shall exclude embedded DRAMs.



     1.15 “Shipment Qualification” or “SQ” shall mean the qualification procedure as generally
described in Annex 3 that is used for releasing Contract Products for sale.



     1.16 “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—Supply of Know How Packages




     2.1 NTC and Infineon have agreed to jointly develop 90nm and 70nm DRAM process
technologies at Infineon’s facilities in Dresden, Germany under the Technical Cooperation
Agreement. It is the common goal of NTC and Infineon to transfer to JV such jointly developed
processes to enable JV to manufacture for NTC and Infineon Commodity DRAM Products in high volume
as well as Specialty DRAM Products.



     2.2 In case that all Parties jointly agree in writing that the ramping-up of JV’s
manufacturing capacity requires the transfer of the Infineon 110nm Process, and/or the NTC 120nm
Process, Infineon or NTC shall make reasonable best efforts to transfer Know How Packages
containing such process technologies to JV as soon as technically and commercially feasible.



     2.3 NTC and Infineon shall provide the Know How Packages containing the 90nm DRAM process
technology within 3 months after Shipment Qualification of the first Commodity DRAM Product using
such process technology at the Reference Site. The Know How Packages containing the 70 nm DRAM
technology shall be provided within 3 months after Shipment Qualification of the first Commodity
DRAM Product using such process technology at the Reference Site. JV shall be responsible for the
transfer of the Know How Packages to its production site and shall bear the cost for all wafers
that will be provided to JV by NTC and/or Infineon as part of the technology transfer.



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     2.4 NTC and Infineon shall transfer a reasonable number of Know How Packages describing the
Improvements they have achieved as soon as technically and commercially feasible after they have
established reliability and quality of such Improvements. JV shall continuously provide NTC and
Infineon with its Improvements.



     2.5 NTC and Infineon shall devote sufficient resources and efforts to facilitate the
technology transfer contemplated under this Agreement.



     2.6 JV shall implement the Know How in its manufacturing line and manufacture Contract
Products according to agreed production plans as defined in the Product Purchase and Capacity
Reservation Agreement between the Parties.



     2.7 All the Know How Packages to be transferred shall be in English language and will be
transferred by electronic means with encryption, to the extent permissible under the applicable
law, or other due safeguard for the transmission with necessary assistance from JV.



     2.8 JV shall set-up and maintain the Information Management System which needs to be
compatible with the Reference Site. JV shall be responsible for insuring the data security therein
and for administering access rights to its employees.



Article 3—Training Program and Technical Assistance




     3.1 Training Program



     3.1.1 In order to familiarize personnel of JV with the Know How, Infineon and NTC shall
provide for JV’s personnel a training program based on the contents of the Know How Packages (the
“Training Program”). Except for Know How relating to NTC’s 120 nm DRAM process technology, the
Training Program shall take place at Infineon’s facilities in Dresden, Germany. For Know How
relating to NTC’s 120 nm DRAM process technology the Training Program shall take place at NTC’s
facility in Linkou, Taiwan.



     3.1.2 Details of the Training Program shall be agreed upon between the Parties in due course.



     3.2 Technical Assistance



     3.2.1 NTC and Infineon shall delegate experienced employees to JV to provide on-site support
to JV in the manufacture and testing of Contract Products using the Contract Process (the
“Technical Assistance”). Such Technical Assistance by experts of NTC and Infineon shall be rendered
at JV’s plant in Linkou, Taiwan.



     3.2.2 Details of the Technical Assistance shall be agreed upon between the Parties in due
course.



     3.3 General Provisions regarding the Training Program and Technical Assistance



     3.3.1 All Training Programs and Technical Assistance shall be provided in English language and
trainers and trainees shall have sufficient working knowledge of the English language.



     3.3.2 Each Party shall be responsible for and shall pay all such salaries, living allowances,
insurances, travelling expenses including accommodation cost, and other remuneration and expenses
to which its employees delegated to the other Parties’ facilities may be entitled. All employees
delegated to other Parties shall have sufficient knowledge in the respective technical field in
which they are to be trained, or will be training employees of other Parties.



     3.3.3 Employees delegated to the other Parties’ facilities shall observe the security rules
and regulations prevailing at such facilities. The Party in charge of the facilities shall inform
the employees of the other Parties on such rules and regulations.



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     3.3.4 Reasonably in advance of each delegation of employees to the other Parties’ facilities,
the Parties shall agree in writing on the dates, duration and the number and qualification of
trainers and trainees intended to be sent. Each Party shall use all reasonable efforts to comply
with the interests of the other Parties regarding availability of appropriately qualified employees
and regular course of business and production.



     3.3.5 The Parties shall assist each other in obtaining entry visas and working permits, if
required, for employees delegated to the other Parties’ facilities. Infineon’s obligation to train
personnel of JV shall be subject to issuance of such approvals.



Article 4—Inventions




     4.1 During the term of the JV Agreement, Inventions made by employees of the Parties
performing development work at the JV shall be owned as follows:


• Inventions made solely by employees of JV shall be owned by JV and licensed to NTC and Infineon as
provided in Article 5.



• Inventions made by one or more employees of JV jointly with one or more employees of NTC and/or
Infineon shall be jointly owned by NTC, Infineon and JV. NTC, Infineon and JV shall each have the
right to grant licenses (including the right for any licensee to grant sublicenses) to third
parties without compensation to the other Parties and/or its employees, and necessary consent is
hereby given by the other Party for the granting of such licenses as may be required by the law of
any country. All expenses, other than internal expenses, incurred in obtaining and maintaining
patents issued on such jointly owned Inventions shall be equally shared by the Parties.




     4.2 JV shall regularly report Invention disclosures to NTC and Infineon, and the Parties shall
jointly review Invention disclosures relating to Inventions made solely by employees of the JV, or
jointly by the Parties, and shall decide whether: (i) a patent application should be prepared for
an Invention disclosure, and (ii) if so, which Party should file and assume responsibility for the
preparation of the patent application, or application for copyright registration, and (iii) in
which countries corresponding applications shall be filed and by whom. The non-filing Parties shall
give the filing Party all reasonable assistance in the preparation or prosecution of any such
patent application filed by said filing Party, and shall cause execution of all instruments and
documents as said filing Party may consider necessary or appropriate to carry out the intent of
this Article 4.



     4.3 With respect to any joint Inventions, where one owning Party elects not to seek or
maintain patent protection in any particular country or not to share equally in the expenses
thereof, the other jointly owning Parties shall have the right to seek or maintain such patent
protection in said country at their own expense and shall have full control over the prosecution
and maintenance thereof even though title to any patent issuing thereon shall be joint.



     In the event that the filing Party shall determine to abandon, or otherwise not to prosecute,
any jointly owned patent application, or not to maintain, defend or renew any jointly owned patent,
it shall notify the non-filing Parties thereof, in writing, at the earliest practicable date. Such
non-filing Parties shall have the right, at its or their expense, to prosecute such application or
to take up such maintenance or defense, and the filing Party agrees to cooperate fully with the
non-filing Parties in obtaining, maintaining, defending or renewing such jointly owned patent
rights hereunder.



Article 5—Rights Granted by the Parties




     5.1 Pursuant to the terms of this Agreement, and effective from the date of
disclosure of the respective Know How Packages, NTC and Infineon hereby grant to JV a
non-transferable, non-exclusive right under the Know How, Improvements and Patents to manufacture
and test Contracts




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Products in Taiwan and to sell such Contract Products to NTC and Infineon and/or their
Subsidiaries, and to use any apparatus and/or material and any method and/or process in the
manufacture of Contract Products. For the avoidance of doubt the Parties acknowledge that JV shall
have no right to (i) grant third parties any rights under the Know How, Improvements and Patents
and (ii) have Contract Products manufactured and tested at third parties.



     5.2 In addition to the rights granted in Article 5.1 above, Infineon and NTC hereby grant to
JV the non-transferable, non-exclusive right to use, copy, modify and/or translate the Know How
Packages for the sole purpose of executing the rights granted under Article 5.1. above.



     5.3 Rights granted by JV to NTC and Infineon



     JV hereby grants to NTC and Infineon and their Subsidiaries a worldwide, non-transferable,
non-exclusive and fully paid up right and license to use JV’s Improvements, JV’s solely owned
Inventions, and all of JV’s patents, patent applications, utility models, mask works and design
patents pertaining thereto (“JV Patents”), to use, manufacture, have manufactured, develop, have
developed, assemble, have assembled, test, have tested, sell or otherwise dispose of semiconductor
products and to use any apparatus and/or material and any method and/or process in the manufacture
of such semiconductor products. Further, Infineon shall have the right to sublicense to third
parties JV’s Improvements, solely owned Inventions and JV Patents, except those of JV’s
Improvements, solely owned Inventions and JV Patents relating solely to NTC’s 120 nm DRAM process
technology; and NTC shall have the right to sublicense (i) to third parties JV’s solely owned
Inventions and JV Patents and (ii) to wholly owned subsidiaries JV’s Improvements; (i) and (ii)
shall not apply to those of JV’s Improvements, solely owned Inventions and JV Patents relating
solely to Infineon’s 110 nm DRAM process technology.



Article 6—Frontend Fab Cluster




     The Parties agree that JV 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. JV shall adhere
to the rules and regulations set up for the Frontend Fab Cluster and shall be classified according
to synchronization level A as defined in such rules and regulations. The Parties 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 JV
may follow a dual vendor strategy in the critical areas, which is in line with the rules and
regulations of the Frontend Fab Cluster.



Article 7—Warranty, Warranty Exclusions, Liability




     7.1 Subject to Article 13 of the Product Purchase and Capacity Reservation Agreement
between the Parties, neither Party represents or warrants that the possession or use of any Know
How and/or the use, development, manufacture, test, sale, lease, or other disposition of systems,
processes, circuits, devices, software and any products hereunder will be free from infringement of
intellectual property rights of third parties and neither Party assumes any liability under this
agreement for or indemnifies the other Parties from any third party claims for infringement of
intellectual property rights. In case that one of the Parties is subject to a claim of intellectual
property rights infringement as a result of the use of the Know How or other technology received
hereunder, the other Party will give assistance, as it considers reasonable in its sole discretion
in order to defend such claims.



     7.2 Neither NTC nor Infineon represent or warrant to JV or to one another, that the Know How
will fulfill certain conditions, that the Know how will be sufficient, suitable, or fit for JV’s
purposes, that the use of the Know How by JV will be uninterrupted, error free, or result in a
minimum yield and that JV will be successful in the manufacturing of Contract Products.



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     7.3 Except as otherwise expressly provided in this Agreement, nothing in this Agreement shall be construed as:



     7.3.1 a warranty or representation by Infineon nor NTC to the validity and scope of any of the Patents licensed to JV, or



     7.3.2 an obligation on Infineon or NTC or a warranty or representation by Infineon or NTC that
it will continue to own all of the Know How and Patents under which JV is granted a right of use
under this Agreement, or



     7.3.3 a requirement that Infineon or NTC shall file any patent application, secure any patent,
or maintain any patent in force, or

     7.3.4 an obligation on Infineon or NTC to bring or prosecute actions or suits against third
parties for infringement, or



     7.3.5 conferring a right to use in advertising, publicity, or otherwise any trademark, trade
dress or trade name of Infineon or NTC, or



     7.3.6 granting by implication, estoppel or otherwise, any rights under patents or patent
applications of Infineon or NTC other than the Patents licensed to JV under this Agreement,
regardless of whether such other patents or applications are dominant or subordinate thereto.



     7.4 Infineon and NTC make no representations, extend no warranties of any kind, either
express or implied, and assumes no responsibilities whatever with respect to the use, sale, or
other disposition by JV or its vendees or other transferees of products incorporating or made
by use of (i) the Know How and Patents under which JV is granted a right of use under this
Agreement or (ii) information, if any, furnished to JV under this Agreement.



     7.5 With the exception of a breach of the confidentiality provision in Article 8, neither
Party assumes any liability, or shall be held liable by the other Parties, for any business
interruption, loss of revenue, profits or sales, loss of information or data, or for any special,
incidental, punitive, indirect or consequential damages. NTC’s and Infineon’s liability for direct
costs, losses or damages of JV shall be limited to an aggregate amount of one million US Dollars.



     7.6 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.



Article 8—Confidentiality




     8.1 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 data and information
relating to Contract Process and Contract Products transferred by NTC and/or Infineon and to be
held in the Information Management System of JV, (ii) all other information disclosed in written or
other tangible form and marked “confidential” or the like, and (iii) all information disclosed
orally, which is confirmed in written or other tangible form within thirty (30) days after initial
oral disclosure.




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     The term Confidential Information shall not include any information which is:



     8.1.1 already in the possession of the receiving Party or its Subsidiaries without breach
of obligation of confidence under this Agreement;



     8.1.2 now, or hereafter becomes, publicly available without breach of this Agreement;



     8.1.3 rightfully received from third parties without obligation of confidence;



     8.1.4 independently developed by the receiving Party or its Subsidiaries; or



     8.1.5 approved for release by written agreement of the disclosing Party.



     8.2 The receiving Party’s obligations with respect to the Confidential Information as
specified in Article 8.1 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 Party a
reasonable opportunity and cooperated with the disclosing Party to contest or limit the scope of
such required disclosure including a protective order, or otherwise required by law.



Article 9—Term, Termination




     9.1 This Agreement shall enter into force upon signature by the Parties hereto and
shall terminate three years after completion of the transfer of the first Know How Package
containing the 70nm DRAM process technology, or at the same time as the JV Agreement, whichever is
earlier.



     9.2 Any performance under this Agreement is subject to receipt of all governmental approvals
necessary for the performance of this Agreement (“Government Approvals”). Either Party shall
without undue delay apply for the necessary Government Approvals and shall inform the other Parties
in writing if such approval was issued by the competent authorities.



     The Parties anticipate that as a precondition for the performance of this Agreement the
relevant export control authorities of Germany and the United States of America need to issue
export licenses for the transfer of technology to JV. The Parties shall co-operate in the
application for such export licenses without undue delay after signature of this Agreement and
after receipt of any required so called “Enduser Certificates” signed by JV.



     9.3 If the period between Effective Date of this Agreement and receipt of all necessary
Governmental Approvals exceeds twelve (12) months, this Agreement shall be regarded as null and
void, if a Party requests so after elapse of said twelve (12) months period.



     9.4 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:



     9.4.1 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;



     9.4.2 by either NTC or Infineon concurrently with a termination for cause or automatic
termination as specified in Article 7.3 and 7.4 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



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     9.4.3 by either NTC or Infineon concurrently with a termination for cause of the Technical
Cooperation Agreement, unless such termination is due to the breach of the Technical Cooperation
Agreement by a Party requesting termination of this Agreement.



Article 10—Rights and Obligations after Termination




     10.1 JV shall have the right to continue to exercise any and all rights and licenses
granted according to Article 5, if this Agreement was terminated pursuant to Article 9.1, or 9.4.1
if the JV was the terminating Party.



     10.2 NTC and/or Infineon shall have the right to continue to exercise any and all rights and
licenses granted according to Article 5, if this Agreement was terminated pursuant to Article 9.1,
9.4.2, 9.4.3, or 9.4.1 if NTC and/or Infineon are the terminating parties.



     10.3 Articles 7, 8, 10, 11 and 12 shall survive any
termination of this Agreement.



Article 11—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 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 12—Applicable Law




     This Agreement and the performance of the Parties hereunder shall be construed in
accordance with and governed by the substantive laws of Germany, 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 13—Miscellaneous




     13.1 This Agreement cannot be modified except by written instrument signed by both
Parties. This requirement of written form can only be waived in writing.



     13.2 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 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.



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     13.3 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.



     13.4 Except otherwise provided in this Agreement, communications between Infineon and JV 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 NTC to:




Nanya Technology Corporation

Legal Department

Hwa-Ya Technology Park 669, Fuhsing 3rd Road

Kueishan, 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

Fuhsing 3rd Road, Kueishan

Taoyuan, Taiwan, R.O.C.

Fax: + 886




     13.5 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.



     13.6 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.



     13.7 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.



     13.8 Annexes 1 through 6, which are or will be attached hereto, shall constitute an
integral part hereof. The Annexes have the following titles:


Annex 1A: Infineon 110nm Process



Annex 1B: NTC 120nm Process



Annex 1C: 90nm and 70nm DRAM process technology



Annex 2: Description of Know How Packages



Annex 3: Shipment Qualification



Annex 4: Basic rules and regulations of the Frontend Fab Cluster.




11









 





     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:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Infineon Technologies AG	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:	 	 	 	 	 	And by:	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Date:	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Hwa-Ya Semiconductor Inc.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:	 	 	 	 	 	And by:	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Date:	 	 
	 

	 	 
	 	 	 	 	 	 







12









 








Annex 1A: Infineon 110nm Process




	 	 	 
	TECHNOLOGY:

	 	[**]
	CELL:

	 	[**]
	LITHOGRAPHY:

	 	110nm[**]
	 

	 	[**]
	L-REQUIREMENTS:

	 	[**]
	DEVICE TYPES: (approximate Lmin)

	 	[**]
	FEOL (FRONT END OF LINE):

	 	[**]
	BEOL (BACK END OF LINE):

	 	[**]







 









 








Annex 1B: NTC 120nm Process




	 	 	 
	TECHNOLOGY:

	 	[**]
	CELL:

	 	[**]
	LITHOGRAPHY:

	 	[**]
	DEVICE TYPES: (approximate Lmin)

	 	[**]
	FEOL (FRONT END OF LINE):

	 	[**]
	BEOL (BACK END OF LINE):

	 	[**]







 









 








Annex 1C: 90nm and 70nm DRAM process technology




90nm DRAM process technology




	 	 	 
	CELL:

	 	[**]
	LITHOGRAPHY:

	 	90 nm [**]
	 

	 	[**]
	DEVICE TYPES:

	 	[**]
	FEOL (FRONT END OF LINE):

	 	[**]
	BEOL (BACK END OF LINE):

	 	[**]
	WAFERSIZE:

	 	[**]






70nm DRAM process technology




	 	 	 
	CELL:

	 	[**]
	LITHOGRAPHY:

	 	70 nm [**]
	 

	 	[**]
	DEVICE TYPES:

	 	[**]
	FEOL (FRONT END OF LINE):

	 	[**]
	BEOL (BACK END OF LINE):

	 	[**]
	WAFERSIZE:

	 	[**]







 









 







Annex 2: Description of Know How Packages




     The following Check List applies to the Know-How of the Contract Processes and Contract
Products and is a guideline of the type of information that will be delivered from Infineon and/ or
NTC to JV. The information provided shall be on the basis of Reference Site performance and will be
available in different portions:



	 	 	 
	Preliminary Know How Package

	 	PART I
	 
	Final Know How Package

	 	PART II
	 
	Additional measures: Update Packages and Workshops.

	 	PART III






     Infineon and/or NTC will prove the manufacturability of the Contract Process and
Contract Product at the Reference Site with reasonable yield. The interface between the Reference
Site and the JV as well as synchronization and common learning procedures is described in Annex 4
(Basic rules and Regulations of the Frontend Fab Cluster). Infineon and NTC will undertake all
reasonable efforts to jointly achieve similar yields at JV as at the Reference Site.



     The Checklist given in this Annex is described as detailed below. Where information has been
already transferred from a previous technology generation the data may not be repeated.



	 	 	 
	Part I Preliminary Know How Package

	 
	 	 
	Part I.A

	 	Frontend wafer fab: Equipment and Materials for Unit Process
	Part I.B

	 	Frontend wafer fab: Process Integration
	Part I.C

	 	Design
	 
	 	 
	Part II Final Know How Package

	 
	 	 
	Part II.A

	 	Front End
	Part II.A.i.

	 	Frontend Wafer Fab: Process Integration
	Part II.A.ii

	 	Front End Wafer Test
	Part II.B.

	 	Information regarding Final Back End (i.e. Package) Level Test Engineering
	Part II.C.

	 	Design Data
	Part II.D.

	 	QRA Fab
	 
	 	 
	Part III Updates

	 
	 	 
	(Delivery according Infineon Technology Development Handbook — TDHB — Milestones)
	Part III a

	 	Update Packages
	Part III b

	 	Workshops






 









 






Part I. — Preliminary Know How Package




Part I.A Wafer Fab Equipment and Materials for Unit Process




     The Know How transfer should include (i) preliminary operation instruction and recipe for each
and every process step, and (ii) the equipment configurations, acceptance test reports, process
control specifications, PM items and procedures, material (wafer, gases, chemicals, targets, CMP
slurries, etc.) specifications including second sources, if available, required by the respective
process.



     a. [**]



     b. [**]



     c. [**]



     d. [**]



     e. [**]



     f. [**]



Part I.B Wafer Fab Process Integration




     a. [**]



     b. [**]



     c. [**]



     d. [**]



     e. [**]



     f. [**]



     g. [**]



     h. [**]



     i. [**]



     j. [**]



     k. [**]



Part I.C Design




     1. By process



     a. Design Manual



     b. Process assumptions



     c. Preliminary design manual (Ground rules)



     d. Fill rules for layers where applicable



     e. All information, including mask tooling information(e.g. alignment mark, PCI, MCI), formulas
for mask preparation (conversion of layouts to mask layers, quality of different layers, all relevant
biases) to include the Fracturing Method, Mask Sizing, OPC and PSM rules.



     f. ESD structure



     2. By Product



2









 





     a. Schematic package (pdf)



     b. Kerf description



     c. Layout of kerf & Contract Product (GDS2)



Part II. — Final Know How Package (includes Preliminary KHP)




Part II.A Front End




Part II.A.i. Wafer Fab Process Integration




     a) [**]



     b) [**]



     c) [**]



     d) [**]



     e) [**]



Part II.A.ii Front End Wafer Sort Test Engineering—By product




     a) [**]



     b) [**]



     c) [**]



     d) [**]



     e) [**]



Part II.B Information regarding Final Back End (i.e. Package) Level Test Engineering




     a. Qualification Test flow



     Release criteria and correlation document with all hardware necessary to achieve product shipment
qualification at JV



Part II.C Design data




1. Design data — Know How required by process




     a. Design manual



     b. Design Rules and reference run sets.



     c. Electrical design rules for ESD, Latch up, electromigration, antenna ratios for flux
sensitivities



     d. HSPICE model parameter (electrical parameters) best, nominal and worst case data



2. Design data — Know How required by Product




     a. Product description



     b. Circuit
design (pdf) and layout (GDS2) for each Contract Product, test
chip and scribe line  structure



     c. Data sheets



3









 





Part II.D QRA




(1) RA/FA




     a. Reliability management procedure including qualification, routine monitor, failure
rate calculation method, sampling plan



     b. Failure analysis procedure



     c. Trace analysis procedure for qualitative and quantitative material analysis



(2) QA/QC




     a. Product grading (frontend and backend) methodology



     b. Incoming and outgoing quality control program



     c. QSB Established



     d. In-process quality control program and QC flow (product, process, equipment, material, and
others as required)



     e. Experiences and results of Failure Mode and Effect Analysis (FMEA) as available



     f. Alignment of downgrade procedure



Part III




Part III a Update Packages




     Update Packages will be delivered after an Infineon milestone has been reached
(Infineon Technologies Development Handbook “TDHB”) and new results are available.



     The topics and content of these updates are described in the Preliminary Know How Package.




     The
Updates will be documented in Lotus Notes DBs. These DBs will be announced and replicated from
the Reference Site Document Center.



     After the final Know How Package is delivered further Updates will be issued via the Frontend
Fab Cluster Synch Procedure.



Part III b Workshops




     Workshops at the Reference Site were held to release milestones and enter a new development
period as described in the Infineon TDHB. Attendees from JV will be invited. The number of
attendees of the JV at the Workshops will be mutually agreed to. The workshop usually lasts 3 days.
The information provided will be treated as an Update package and carefully documented. The
delivery will be tracked by the Reference Site’s Document Center.



4









 





Annex 3: Shipment Qualification




     This Annex sets forth the work to be performed by the Parties to demonstrate
qualification of the fabrication processes and the work to be performed by the Parties for
qualification of the Product
design.



     A qualification team shall be established by the respective Project Managers to develop
common methods and procedures for conducting the fabrication processes qualifications that
satisfy the common requirements of all Parties based on this Exhibit.



PROCESSES QUALIFICATION:




     Purpose: To demonstrate that the fabrication processes design rules are adequate for a
Product with a high expectation that it will meet reliability and productivity targets.



     Method: Use test site measurements and stresses to define reliability bounds and identify wearout
mechanisms. Use of test site or product measurements to define the ability to maintain statistical
process control.



     Tests to be performed include: [**]



PRODUCT QUALIFICATION:




     Purpose: Demonstrate that Product built with the qualified fabrication processes and the chosen
package(s) can meet the reliability and application specifications.



     Method: Conduct Product stresses and functional tests to measure Product reliability and operating
margins. Identify actions to resolve areas where criteria are not met. Review documentation and
procedures. An additional goal is to perform applications test to verify functionality to
customers’ applications.



     Measurements to be performed include: [**]




5









 





					
	
	 	Fab cluster member rules
	 	Annex 4 to KHTA






Fab cluster member rules




The present document does not replace any manual or business process but summarizes in short
way the rules fab cluster members are expected to respect. Chapter 1-4 are by and large an extract
of the released Fab Cluster Manual.



	 	 	 	 	 	 	 
	Content	 	 	 	 	 	 
	1

	 	MISSION OF THE IFX MP FE FAB CLUSTER
	 	 	2	 
	 
	 	 	 	 	 	 
	2

	 	STRUCTURE OF THE MP FE FAB CLUSTER
	 	 	2	 
	 
	 	 	 	 	 	 
	3

	 	RESPONSIBILITIES
	 	 	2	 
	 
	 	 	 	 	 	 
	4

	 	AREAS OF SYNCHRONIZATION/FAB CLUSTER LEARNING
	 	 	4	 
	 
	4.1

	 	Synchronization levels between cluster production lines
	 	 	4	 
	4.2

	 	Technology platforms
	 	 	4	 
	4.3

	 	Fabrication equipment, material use, and productivity performance
	 	 	4	 
	4.4

	 	Quality and performance targets
	 	 	4	 
	 
	 	 	 	 	 	 
	5

	 	PARTICULAR RULES WITHIN THE FAB CLUSTER
	 	 	4	 
	 
	 	 	 	 	 	 
	5.1

	 	Rules to guarantee communication within the cluster
	 	 	4	 
	5.2

	 	Rules to guarantee synchronization level C
	 	 	4	 
	5.3

	 	Rules to guarantee synchronization level B
	 	 	4	 
	5.4

	 	Rules to guarantee synchronization level A
	 	 	4	 
	 
	 	 	 	 	 	 
	6

	 	ABBREVIATIONS AND TERMINOLOGY
	 	 	5	 






	 	 	 
	Author	 	Owner	 	 	Document Number	 	 	Version	 	 	Date	 	 	 	 	 	Page/Pages
	Giorgio
Schweeger	 	Giorgio Schweeger	 	 	 	 	 	02	 	 	2002-07-02	 	 	Status	 	 	1/10






Proprietary data. All rights reserved




 









 






					
	
	 	Fab cluster member rules
	 	Annex 4 to KHTA





1 MISSION OF THE IFX MP FE FAB CLUSTER



The Fab Cluster is the community of wafer fabrication plants which are producing memory
chips with Infineon owned technologies and for the scope to be sold as Infineon products. This
wafer fabs are globally synchronized



• to meet the expectations of the customer to receive equal performance and quality from Infineon
as a supplier,



• to meet the expectation of marketing and logistics to have largest possible production
flexibility, and



• to obtain best-in-class fabrication performance in all fabrication sites.



With respect to technology, the Fab Cluster assures uniform quality, functionality (incl.
performance) and reliability of technology platforms and of products fabricated on these platforms.
This results in only one technology qualification per site necessary for all products and only one
customer qualification per customer necessary for all sites. Furthermore, the Fab Cluster strives
to achieve equal fabrication processes in all sites in order to improve common learning and to
accelerate improvement roadmaps.



With respect to production, the Fab Cluster assures highest production flexibility with reduced
transfer efforts due to the technology synchronization, as well as overall “best-in-class”
manufacturing performance and common learning in the areas of production efficiency, production and
process control, equipment choice etc.




2 STRUCTURE OF THE MP FE FAB CLUSTER



The Infineon MP FE fab cluster is [**]. The current members of the fab cluster are:





	—	 	Infineon Dresden 200mm line
	 
	—	 	Semiconductor 300 Dresden 300mm line
	 
	—	 	Infineon Richmond 200mm line
	 
	—	 	ProMOS Hsinchu 200 and 300mm lines




[**].




 









 








3 RESPONSIBILITIES




	 	 	 
	Function	 	Responsibilities
	 
	[**]

	 	[**]
	 
	 	 
	 
	[**]

	 	[**]
	 
	 	 
	 
	[**]

	 	[**]
	 
	 	 
	 
	[**]

	 	[**]
	 
	 	 
	 
	[**]

	 	[**]
	 
	 	 
	 
	[**]

	 	[**]
	 
	 	 
	 
	[**]

	 	[**]
	 
	 	 
	 
	[**]

	 	[**]
	 
	 	 
	 
	[**]

	 	[**]
	 
	 	 
	 
	[**]

	 	[**]
	 
	 	 
	 
	[**]

	 	[**]
	 
	 	 
	 
	[**]

	 	[**]
	 
	 	 
	 
	[**]

	 	[**]
	 
	 	 
	 
	[**]

	 	[**]






	 	 	 
	Author	 	Owner	 	 	Document Number	 	 	Version	 	 	Date	 	 	 	 	 	Page/Pages
	Giorgio
Schweeger	 	Giorgio Schweeger	 	 	 	 	 	02	 	 	2002-07-02	 	 	Status	 	 	2/10






Proprietary data. All rights reserved




2









 







					
	
	 	Fab cluster member rules
	 	Annex 4 to KHTA






4 AREAS OF SYNCHRONIZATION / FAB CLUSTER LEARNING




4.1 Synchronization levels between cluster production lines [**]




4.2 Technology platforms

A technology platform is [**]




4.3 Fabrication equipment, material use, and productivity performance

[**]




4.4 Quality and performance targets

[**]




5 PARTICULAR RULES WITHIN THE FAB CLUSTER




5.1 Rules to guarantee communication within the cluster

[**]




5.2 Rules to guarantee synchronization level C

[**]




5.3 Rules to guarantee synchronization level B

[**]




5.4 Rules to guarantee synchronization level A

[**]




	 	 	 	 	 
	Author	 	Owner	 	 	Document Number	 	Version	 	 	Date	 	 	 	 	 	Page/Pages
	Giorgio
Schweeger	 	Giorgio Schweeger	 	 	 	 	02	 	 	2002-07-02	 	 	Status	 	 	4/10





Proprietary data. All rights reserved




3









 








					
	
	 	Fab cluster member rules
	 	Annex 4 to KHTA






6 ABBREVIATIONS AND TERMINOLOGY




	 	 	 
	Abbreviation	 	Description
	 
	BE

	 	Backend
	 
	 	 
	CAR

	 	Corrective action request
	 
	 	 
	CEB

	 	Cluster equipment board
	 
	 	 
	CLB

	 	Cluster logistics board
	 
	 	 
	CPB

	 	Cluster production board
	 
	 	 
	CTR

	 	Cluster technology review / quarterly meeting
	 
	 	 
	FCTO

	 	Fab Cluster Technology Officer
	 
	 	 
	FE

	 	Frontend / an organizational entity of MP
	 
	 	 
	FELK

	 	Frontend Leitungskreis / highest FE internal board
	 
	 	 
	IFDD

	 	Dresden 200mm line
	 
	 	 
	IFR

	 	Richmond
	 
	 	 
	KEC

	 	Knowledge exchange / a working group of the CPB
	 
	 	 
	KEP

	 	Key electrical parameter
	 
	 	 
	KIP

	 	Key inline parameter
	 
	 	 
	MACORE

	 	Material cost reduction / a working group of the CPB






 









 






	 	 	 
	Abbreviation	 	Description
	MP

	 	Memory products / a division of Infineon
	 
	 	 
	OP

	 	Operations / an organizational entity of MP
	 
	 	 
	PCI

	 	Process integration
	 
	 	 
	PCN

	 	Process change notification
	 
	 	 
	PI

	 	Productivity improvement / an organizational entity within FE
	 
	 	 
	POR

	 	Process of record
	 
	 	 
	PPC

	 	Production planning and control / an organizational entity of MP
	 
	 	 
	PUR CB FE

	 	Purchasing Core Buyer Frontend / an organizational entity within FE
	 
	 	 
	QSB

	 	Quality Synchronization Board
	 
	 	 
	SMCom

	 	Semiconductor Maintenance Comparison / a working group of the CPB
	 
	 	 
	TD

	 	Technology development
	 
	 	 
	TPTI

	 	Technology and Product Transfer within Infineon / an Infineon business process
	 
	 	 
	TSB

	 	Technology Synchronization Board
	 
	 	 
	UP

	 	Unit process
	 
	 	 
	UPMS

	 	Unit process matching sheet
	 
	 	 
	UPSB

	 	Unit Process Synchronization Board
	 
	 	 





	 	 	 
	Author	 	Owner	 	 	Document Number	 	 	Version	 	 	Date	 	 	 	 	 	Page/Pages
	Giorgio
Schweeger	 	Giorgio Schweeger	 	 	 	 	 	02	 	 	2002-07-02	 	 	Status	 	 	5/10






Proprietary data. All rights reserved




4









 





Appendix B to Joint Venture Agreement




[Superseded. Please See Exhibit 10(i) (J)]




 









 








Appendix C to Joint Venture Agreement




LAND SALE AND PURCHASE AGREEMENT




     This LAND SALE AND PURCHASE AGREEMENT (“Agreement”) is entered into by and between:




     Nanya
Technology Corporation, a company legally established under the laws of the Republic of China
and having its head office at Hwa-Ya Technology Park 669, Fuhsing 3rd Road, Kueishan,
Taoyuan, Taiwan, Republic of China (hereinafter the “Seller”), and



     Hwa-Ya Semiconductor Inc., a company legally established under the laws of the Republic of China
and having its head office at Hwa-Ya Technology Park, Fuhsing 3rd Road, Kueishan,
Taoyuan, Taiwan, Republic of China (hereinafter the “Buyer”)



     WHEREAS, the Buyer contemplates constructing and operating a 300mm wafer fab in Hwa-Ya Technology
Park and requires sufficient and suitable land there for said construction and operation; and



     WHEREAS,
the Seller desires to sell and the Buyer desires to purchase the Land on the terms and
conditions contained in this Agreement.



     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein
contained, intending to be legally bound, the parties do hereby agree as follows:



     1. Land The Buyer agrees to purchase and the Seller agrees to sell the entire piece of land and
any and all rights attached thereon but not a part thereof, totally approximately 10831 Pings,
presently constituting part of the land registered as lot number 348 and 348-2, Hua Ya Section,
Kueishan Country, Taoyuan County as specified in Exhibit A (hereinafter referred to as “Land”).



     2. Purchase Price The purchase price for the Land shall be NT$[**] (the “Purchase Price”),
payable from the Buyer to the Seller in accordance with the payment schedule as follows:


• 30% of the Purchase Price shall be payable on the date of this Agreement;



• 40% of the Purchase Price shall be payable on the Target Date as defined in Section 3.1; and



• 30% of the Purchase Price shall be payable on the Completion Date as defined in Section 3.4.




     The Purchase Price is exclusive of any and all taxes and charges imposed by any government body for
the transfer of title to the Land, which shall be borne by the Buyer and the Seller in accordance
with the applicable laws and regulations of the Republic of China. Any other cost and expense paid
to third parties, incurred by each of the parties in connection with the negotiation, preparation,
execution of and implementation of this Agreement, shall be borne directly by the respective
parties.



     3. Closing



     3.1 Closing shall begin on six months after the establishment of Buyer or otherwise agreed upon
by the parties (the “Target Date”) and be completed within one week following the Target Date.



     3.2 Deliveries by Seller



     On the Target Date, Seller shall deliver to Buyer:


• any and all title documents to the Land;



• certificate issued by the banks, in whose favor the existing mortgages on the land were created,
certifying that the mortgages have been removed, if applicable;



• land registration documents showing that the Land is free and clear of any and all liens or
encumbrances;



• any and all other documents required for the transfer of title; and



• the documents
contemplated by Section 2 and Section 4.





 









 








     3.3 Deliveries by Buyer



     On the Target Date, the Buyer shall deliver the following to the Seller:


• payment of forty percent (40%) of the Purchase Price in accordance with Section 2 hereof; and



•the documents contemplated by Section 2 and Section 5.




     3.4 Registration of Transfer of the Title and the Final Payment



     Buyer agrees to pay Seller thirty percent (30%) of the Purchase Price within seven (7) days after
the registration of transfer of the title to the Land is completed (the “Completion Date”).



     4. Conditions to Seller’s Obligations



     Unless otherwise waived by the Seller, the obligations of the Seller to effect the Closing shall be
subject to the satisfaction on or prior to the Target Date of the following conditions:



     4.1 The representations and warranties of the Buyer set forth in Section 7 of this Agreement shall
have been true in all material respects as of the date of this Agreement and shall be true in all
materials respects as of the Target Date as though made at such time.



     4.2 The Buyer shall have performed and complied in all material respects with the covenants
contained in this Agreement required to be performed and complied with it prior to or as of the
Target Date.



     4.3 The Buyer shall have delivered to the Seller a certified copy of the resolutions adopted by
its board of directors authorizing the execution, delivery, and performance of this Agreement.



     5. Conditions to Buyer’s Obligations



     Unless otherwise waived by the Buyer, the obligations of the Buyer to effect the Closing shall be
subject to the satisfaction on or prior to the Target Date of the following conditions:



     5.1 The representations and warranties of Seller set forth in Section 6 of this Agreement shall
have been true in all material respects as of the date of this Agreement and shall be true in all
material respects as of the Target Date as though made at such time.



     5.2 The Seller shall have performed and complied in all material respects with the covenants
contained in this Agreement required to be performed and complied with by it prior to or as of the
Target Date.



     5.3 The Seller shall have delivered to the Buyer a certified copy of the resolutions adopted by
its board of directors authorizing the execution, delivery, and performance of this Agreement.



     6. Representations and Warranties of Seller



     The Seller represents and warrants to the Buyer as follows:



     6.1 Organization of Seller; Authorization



     The Seller is a company duly organized, validly existing, and in good standing under the laws of
the Republic of China, with full corporate power and authority to execute and deliver this
Agreement, and to perform its obligations hereunder. The execution, delivery and performance of
this Agreement and the consummation of the sale and purchase of the Land have been duly authorized
by all necessary corporate action on the part of the Seller and this Agreement constitutes a valid
and binding obligation of the Seller, enforceable against it in accordance with its terms.



2









 





     6.2 No Conflict



     Neither the execution and delivery of this Agreement nor the consummation of the sale and purchase
of the Land (a) will violate, be in conflict with, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, any agreement or commitment to
which the Seller is a party, or result in the termination of, or accelerate the performance
required by, or excuse performance by any person of any of its obligations under, or cause the
acceleration of the maturity of any debt or obligation pursuant, or result in the creation or
imposition of any encumbrance upon the Land under any agreement or commitment to which the Seller
is a party or by which any of its property or assets is bound, or to which any of its property or
assets is subject, (b) will violate any statute or law, or any judgement, decree, order, rule, or
regulation of any court or other governmental body applicable to the Seller, or (c) will violate
any permit, license, or approval of any court or other governmental body applicable to the Seller.



     6.3 Consent and Approval



     Except as set forth elsewhere in this Agreement, no consent, approval, or authorization of or
declaration, filing, or registration with any governmental body is required to be obtained or made
by the Seller in connection with the execution, delivery and performance of this Agreement or the
consummation of the sale and purchase of the Land contemplated herein.



     6.4 Title to Land; Encumbrances



     Seller has good, valid and marketable title to the Land, free and clear of all liens and
encumbrances.



     6.5 Litigation against the Sellers regarding the Land



     There have not been in the past and there is currently no pending or threatened legal action or
other legal proceeding by any third party before any court or other governmental body against the
Seller with respect to the Land.



     6.6 No Hazardous Materials



     The Land is free of any substance, material or other thing of potential harm to human health or the
environment.



     6.7 Conditions of the Land




     There are to the best of Seller’s knowledge no soil, underground, environmental, or other material
conditions which would make the construction of a wafer fab unduly problematic or burdensome.



     6.8 No Environmental Condition



     No environmental condition on the Land is in violation of any applicable law, governmental or
administrative regulation.



     6.9 No Default



     Seller is not in default with any of its obligations or liabilities pertaining to the Land.



     6.10 No Claims




      The Land is free from third party claims, including rights of possession and rights of way.



3









 





     7. Representations and Warranties of Buyer




     The Buyer represents and warrants to the Seller as follows:



     7.1 Organization of Buyer; Authorization



     The Buyer is a company duly organized, validly existing, and in good standing under the laws
of the Republic of China, with full corporate power and authority to execute and deliver this
Agreement, and to perform its obligations hereunder. The execution, delivery and performance of
this Agreement and the consummation of the sale and purchase of the Land have been duly authorized
by all necessary corporate action on the part of the Buyer and this Agreement constitutes a valid
and binding obligation of the Buyer, enforceable against it in accordance with its terms.



     7.2 No Conflict




     Neither the execution and delivery of this Agreement nor the consummation of the sale and
purchase of the Land (a) will violate, be in conflict with, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under any material
agreement or commitment to which the Buyer is a party or result in the termination of, or
accelerate the performance required by, or excuse performance by any person of its obligations
under, or cause the acceleration of the maturity of any debt or obligation pursuant to, any
material agreement or commitment to which the Buyer is a party or by which any of its property or
assets is bound, or to which any of its assets or property is subject, or (b) to the knowledge of
the Buyer, will violate any statute or law, or any judgement, decree, order, rule or regulation of
any court or other governmental body applicable to the Buyer.



     7.3 Consent and Approval



     To the knowledge of the Buyer, no consent, approval or authorization of, or declaration,
filing or registration with any governmental body is required to be obtained or made by the Buyer
as precondition for the execution, delivery and performance of this Agreement or the consummation
of the sale and purchase of the Land.



     8. Seller’s Obligations after the Target Date



     The Seller shall provide any and all additional documents and shall affix their registered
seals on any of the documents, if any, which are necessary to effect the transfer of deed title of
the Land from the Seller to the Buyer upon the reasonable request of the Buyer.



     9. Termination




     This Agreement may be terminated by either party with immediate effect if the contemplated
transaction on sale and purchase of the Land is not consummated as pursuant to Section 3.1 unless
failure to consummate such transaction is attributable to such terminating party.



     10. Arbitration



     Any and all claims, disputes, controversies or differences arising out of or in connection
with this Agreement, or with a breach thereof, shall be determined by arbitration in accordance
with the then prevailing Arbitration Law of the Republic of China by three arbitrators appointed in
accordance with such rules upon the request of any party. The arbitration shall be held in Taipei,
Taiwan and the decision of the arbitrators shall be final and binding upon the parties and judgment
thereon may be entered in any court having jurisdiction thereon or application may be made to such
court for judicial acceptance of the award and/or order of enforcement, as the case may be.



4









 





     11. Miscellaneous



     11.1 Expenses



     Each party shall bear its own expenses incident to the preparation, negotiation, execution, and
delivery of this Agreement, the performance of its obligations hereunder and the completion of the
sale and purchase of the Land.



     11.2 Captions



     The captions in this Agreement are for convenience of reference only and shall not be given any
effect in the interpretation of this Agreement.



     11.3 No Waiver




     The failure of a party to insist upon strict adherence to any term of this Agreement on any
occasion shall not be considered a waiver or deprive that party of the right thereafter to insist
upon strict adherence to that term of any other term of this Agreement. Any waiver must be in
writing.



     11.4 Exclusive Agreement; Amendment



     This Agreement supersedes all prior agreements among the parties with respect to its subject
matter, is intended (with the documents referred to herein) as a complete and exclusive statement
of the terms of the agreement among the parties with respect thereto and cannot be changed or
terminated orally.



     11.5 Assignment



     Neither party may assign any of its rights under this Agreement without the written consent of the
other.



     11.6 Governing Law



     This Agreement and (unless otherwise provided) all amendments hereof and waivers and consents
hereunder shall be governed by the laws of the Republic of China.



5









 





     IN WITNESS WHEREOF, the parties have each caused this Agreement to be executed by their duly

authorized representative on the date above first written.



	 	 	 	 	 	 	 	 	 	 	 
	Hwa-Ya Semiconductor Inc. as Buyer	 	 	 	Nanya Technology Corporation as Seller	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	 

	 	Name:
	 	 	 	 	 	Name:	 	 
	 

	 	Title:
	 	 	 	 	 	Title:	 	 
	 

	 	Date:
	 	 	 	 	 	Date:	 	 






6









 





EXHIBIT A

THE LAND




(DETAILED SITE MAP WILL BE ATTACHED LATER)



 




 









 





Appendix D to Joint Venture Agreement



Services Agreement



     This Services Agreement (hereinafter this “Agreement”) is entered into by and between:



     Nanya Technology Corporation, a company legally established under the laws of the Republic of China
and having its head office at Hwa-Ya Technology Park 669, Fuhsing 3rd Road, Kueishan, Taoyuan,
Taiwan, Republic of China (hereinafter “NTC”), and



     Hwa-Ya Semiconductor Inc., a company legally established under the laws of Republic of China and
having its head office at Hwa-Ya Technology Park, Fuhsing 3rd Road, Kueishan, Taoyuan, Taiwan,
Republic of China (hereinafter “JVC”) (collectively the “Parties”).



     WHEREAS, NTC and Infineon Technologies AG, a company legally established under the laws of Germany
and having its head office at St.-Martin-Strasse 53, D-81669 Munich, Germany, entered into a Joint
Venture Agreement (the “JVA”); and



     WHEREAS, JVC wishes to purchase from NTC certain Services (as defined hereinafter), and NTC is
prepared to render such Services upon the conditions set forth hereinafter.



     NOW, THEREFORE, in consideration of the forgoing and of the mutual agreements and covenants
contained herein, intending to be legally bound, the Parties agree as follows:



     1. Definitions



     For purposes of this Agreement, the following capitalized terms shall have the following
meanings: “Effective Date” shall mean the last signature date on this Agreement.



     “GUI” shall mean government unified invoice.



     “Services” shall have the meaning set forth in Section 2.1 hereof.



     “VAT” shall mean value added tax.



     2. Services



     Services Generally Except as otherwise provided herein, NTC shall provide or cause to be
provided by the Formosa Plastic Group the services (the “Services”) described in Exhibit I hereto.
To the extent the Services are provided by the Formosa Plastic Group, NTC shall remain jointly
liable with respect to such services. For purposes of this Agreement, reference to NTC’s provision
of Services shall include,where such context requires, the provisions of Services by the Formosa
Plastic Group, as the case may be. The Services shall be provided by NTC on a continuous basis for
the term of this Agreement set forth in Section 3.1. JVC shall not be required to furnish specific
orders for Services to be provided by NTC hereunder.



     3. Term and Termination



     3.1 Term. The term of this Agreement shall commence on the Effective Date and shall
remain in effect for an unlimited period of time unless terminated.



     3.2 Termination. This Agreement may be terminated by mutual agreement of the Parties or by
JVC upon termination of the JVA. JVC may terminate individual Services rendered hereunder at any
time upon 90 days prior written notice to NTC. Notwithstanding the foregoing, in the event of any
termination with respect to one or more, but less than all Services, this Agreement shall continue
in
full force and effect with respect to any Services not terminated hereby and shall only terminate
upon termination of all individual Services hereunder.



     4. Compensation



     4.1 Fees for Services. JVC shall pay NTC the service fee (exclusive of VAT) in
accordance with the guidelines set forth on Exhibit I hereto and to be further agreed upon between
the parties, for each of the Services listed therein as adjusted from time to time. Such service
fee shall



 









 







be based on a fixed annual amount to be calculated on the budgeted direct or indirect cost of
providing such Services hereunder. For the avoidance of doubt, if any termination of a Service
under Section 3.2 occurs before the machinery, equipment or other assets (the “Machinery”) acquired
for purposes of providing such Service are fully depreciated or amortized, JVC shall pay NTC, in
addition to the service fee as specified in this Section 4.1, the amount equivalent to the
unamortized or undepreciated portion of the value of the Machinery at the time of termination of
such Service. All services fees shall be payable in New Taiwan Dollars and shall be made in strict
compliance with all applicable laws and regulations of the government of Taiwan. The Parties also
intend for the service fee payable hereunder to be easy to administer and, therefore, hereby
acknowledge it may be counterproductive to try to recover every cost, fee, or expense, particularly
those that are insignificant or de minimis. The Parties shall use good faith efforts to discuss any
situation in which the actual fee for a particular Service is reasonably expected to exceed the
estimated fee, if any, set forth on Exhibit I hereto; provided, however, that the incurrence of
fees in excess of any such estimate shall not justify stopping the provision of, or payment for,
Services under this Agreement.



     4.2 Payment Terms. NTC shall bill JVC monthly for all fees pursuant to this Agreement. Such
bills shall be accompanied by GUI, and reasonable documentation or other reasonable explanation
supporting such charges. The fees for such Services shall be due on the first day of each month and
shall be payable by JVC within [**] after receipt of an invoice therefor. Late payments beyond [**]
of the date of the invoice shall be subject to an interest of six percent (6%) per annum of the
invoiced amount.



     5. General Obligations; Standard of Care



     5.1 Performance of NTC. NTC shall maintain a standard of reasonable care in rendering
the Services hereunder. Subject to Section 6.2, NTC shall maintain sufficient resources to perform
its obligations to provide Services hereunder. NTC shall use reasonable efforts to provide Services
to JVC in accordance with the policies, procedures and practices in effect before the date hereof
and shall exercise the same care and skill as it exercises in performing similar services for
itself.



     5.2 Performance of JVC. JVC shall use reasonable efforts, in connection with receiving
Services, to follow the policies, procedures and practices in effect before the date hereof,
including providing information and documentation sufficient for NTC to perform the Services and
making available, as reasonably requested by the NTC, sufficient resources and timely decisions,
approvals and acceptances in order that NTC may accomplish its obligations to provide Services
hereunder in a timely manner.



     5.3 Changes in Provision of Services. The Parties acknowledge the transitional nature of the
Services and that NTC may make changes from time to time in the manner of performing the Services
if NTC is making similar changes in performing similar services for itself and if NTC furnishes to
JVC reasonable advance notice of not less than three months regarding such changes.



     5.4 Responsibility for Errors; Delays. NTC’s sole responsibility to JVC:



     (a) for errors or omissions in Services, shall be to furnish correct information, payment and/or
adjustment in the Services, at no additional cost or expense to JVC; provided JVC must promptly
advise NTC of any such error or omission of which it becomes aware after having used reasonable
efforts to detect any such errors or omissions in accordance with the standard of care set forth in
Section 5.1; and



     (b) for failure to deliver any Service because of impracticability, shall be to use reasonable
efforts, subject to Section 6.1, to make the Services available and/or to resume performing the
Services as promptly as reasonably practicable.



2









 





     5.5 Good Faith Cooperation; Consents. The Parties will use good faith efforts to cooperate
with each other in all matters relating to the provision and receipt of Services. Such cooperation
shall include exchanging information, providing electronic access to systems used in connection
with Services, performing adjustments and obtaining all third party consents, licenses, sublicenses
or approvals necessary to permit each Party to perform its obligations hereunder. The costs of
obtaining such third party consents, licenses, sublicenses or approvals shall be borne by the JVC.
The Parties will maintain documentation supporting the information contained in Exhibit I hereto
and cooperate with each other in making such information available as needed.



     6. Certain Limitations



     6.1 Impracticability. NTC shall not be required to provide any Service to the extent
the performance of such Service becomes “impracticable” as a result of a cause or causes outside
the reasonable control of NTC including unfeasible technological requirements, or to the extent the
performance of such Services would require NTC to violate any applicable laws, rules or regulations
or would result in the breach of any software license or other applicable contract.



     6.2 Additional Resources. Except as provided in Exhibit I for a specific Service, in
providing the Services, NTC shall not be obligated to: (i) hire any additional employees; (ii)
maintain the employment of any specific employee; (iii) purchase, lease or license any additional
equipment or software; or (iv) pay any costs related to the transfer or conversion of JVC’s data to
JVC or any alternate supplier of Services.



     7. Confidentiality



     During the term of this Agreement, a Party may receive or have access to certain information
of the other Party that is marked as “Confidential Information,” including, though not limited to,
information or data related to any Party’s products (including the discovery, invention, research,
improvement, development, manufacture, or sale thereof), processes, or general business operations
(including sales, costs, profits, pricing methods, organization, employee or customer lists and
processes), and any information obtained through access to any information assets or information
systems (including computers, networks, voice mail, etc.), which, if not otherwise described above,
is of such a nature that a reasonable person would believe to be confidential. Each Party agrees to
hold confidential all Confidential Information furnished to it under this Agreement, except for
information which (a) is in the public domain or enters the public domain other than by such
Party’s breach of this Agreement, (b) is disclosed to such Party without restrictions of
confidentiality by a third person who is not in breach of an obligation of confidentiality in doing
so, or (c) is required to be disclosed by any applicable law or regulation or by order of a
judicial or administrative authority having jurisdiction.



     8. Limitation of Liability



     Neither Party will be liable to the other for any lost profits, loss of data, loss of use,
business interruption or other special, incidental, indirect, punitive or consequential damages,
however caused, under any theory of liability, arising from the performance of any Service
hereunder, or relating to this Agreement.



     9. Force Majeure



     Each Party shall be excused for any failure or delay in performing any of its obligations
under this Agreement, other than the obligations of JVC to make certain payments to NTC pursuant to
Section 4 hereof for Services rendered, if such failure or delay is caused by Force Majeure. “Force
Majeure” means any act of God or the public enemy, any accident, explosion, fire, storm,
earthquake, flood, or any other circumstance or event beyond the reasonable control of the party
relying upon such circumstance or event.



3









 





     10. Applicable Law



     This Agreement shall be construed in accordance with and governed by the laws of the
Republic of China and shall be interpreted thereunder.



     11. Dispute Resolution



     In case of any dispute between the Parties arising from, relating to or in connection with
this Agreement, the Parties shall submit such dispute to arbitration in accordance with the rules
of the Republic of China Arbitration Association. Such arbitration shall be conducted in Taipei,
Taiwan by three arbitrators and in the English language. The results of such arbitration shall be
binding against both Parties.



     12. Miscellaneous



     12.1 Entire Agreement. This Agreement, together with Exhibit I hereto, constitutes the
entire agreement between the Parties with respect to the subject matter hereof and shall supersede
all prior written and oral and all contemporaneous oral agreements and understandings with respect
to the subject matter hereof.



     12.2 Descriptive Headings. The descriptive headings herein are inserted for convenience of
reference only and are not intended to be part of or to affect the meaning or interpretation of
this Agreement.



     12.3 Language. This Agreement shall be prepared in the English language, and the English
language version shall be official.



     12.4 Notices. All notices required under this Agreement, and all communications made by
agreement of the Parties, shall be made in writing, and shall be delivered either personally, by
facsimile, or by mail. The date of actual receipt by the receiving party shall be deemed the date
of notice under this Agreement. The addresses of each Party for purposes of notice under this
Agreement shall be as follows:



	 	 	 
	NTC:

	 	Hwa-Ya Technology Park 669
	 

	 	Fuhsing 3rd Road 
	 

	 	Kueishan, Taoyuan 
	 

	 	Taiwan, Republic of China
	 

	 	Fax:
	 
	 	 
	 

	 	Attention:
	 
	 	 
	JVC:

	 	Hwa-Ya Technology Park
	 

	 	Fuhsing 3rd Road 
	 

	 	Kueishan, Taoyuan 
	 

	 	Taiwan, Republic of China
	 

	 	Fax:
	 
	 	 
	 

	 	Attention:






     12.5 Transfer. No right or obligation under this Agreement shall be transferable or
assigned to any third party without the express agreement in writing of the other Party.



     12.6 Severability. If any term or other provision of this Agreement is invalid, illegal or
incapable
of being enforced by any rule of law or public policy, all other conditions and provisions of this
Agreement will nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid, illegal or incapable of



4









 







being enforced, the Parties will negotiate in good faith to modify this Agreement so as to effect
the original intent of the Parties as closely as possible.



     12.7 Modification of the Agreement. No modification of this Agreement shall be valid without a
writing setting forth such modification signed by both Parties.



     IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed in duplicate
originals by its duly authorized representatives.



	 	 	 	 	 
	Nanya Technology Corporation

	 	Hwa-Ya Semiconductor Inc.	 	 
	 
	 	 	 	 
	 


	 	 

	 	 
	By:

	 	By:	 	 
	Name:

	 	Name:	 	 
	Title:

	 	Title:	 	 
	Date:

	 	Date:	 	 







5









 







Exhibit I




SERVICES




     Services to be provided (and guidelines for charging such Services) by Formosa Plastic
Group (“FPG”) to JVC are as follows:



     1. Corporate systems



     1.1 Services for corporate systems:



— —[**]




     1.2 Charging guidelines for corporate systems services:



     1) For ERP system and public relations consultancy services, service fee is a function
of [**] terms as offered to NTC and other members of FPG. In addition, Services for ERP
system and software maintenance are charged based on [**]. Services for sharing the
hardware (mainframe), on the other hand, are charged [**].



     2) For other general administrative services, such as a) [**], b) [**], c) [**], the
service is charged [**] for the respective services. For the architectural design and
construction, the service is charged [**]



     2. Fab Operation System



     Facility supply (including building supply): Costs include [**]. The service is charged [**]


—Materials supply: Costs are [**]. The service is charged [**].




     Maintenance tool: Costs include [**]. The service is charged [**]



     Laboratory tool: Costs include [**]. The service is charged [**]


—Information technology system and related services: Costs include [**]. The service is charged
[**].




     3. Fab support system


—Operating system development: Costs include [**]. The service is charged [**].




     Fab expansion: Costs include [**]. The service is charged [**]


—Site general affairs: Costs include [**]. The service is charged [**].




     Site security: Costs include [**]. The service is charged [**]



 









 





Appendix E to Joint Venture Agreement




[Superseded. Please See Exhibit 99 (A)]




 









 








Appendix F to Joint Venture Agreement: Business Plan, page 1 of 6




Scenario Manager




Confidential Materials omitted and filed separately with the

Securities and Exchange Commission.




 









 








Annex G to JVA




Key milestones for the JV Company




	 	 	 
	Milestone:	 	Date:
	Start of Construction of Module I

	 	[**]
	Inauguration of the Company

	 	[**]
	Module I Cleanroom Ready-for-Equipment

	 	[**]
	1. Silicon Out

	 	[**]
	Start construction of Module II

	 	[**]
	Start
of Qual. Lots (110nm)

	 	[**]
	Qualification
of 110nm Technology / Product

	 	[**]
	Start of 90 nm Lots

	 	[**]
	Ramp Module I to 20,000 WSPM

	 	[**]
	Qualification of 90 nm Technology / Product

	 	[**]
	Ramp Module I to 40,000 WSPM

	 	[**]
	Module II Cleanroom Ready-for-Equipment

	 	[**]
	Full Capacity of 50,000 WSPM of Module I

	 	[**]
	1. Silicon out of Module II

	 	[**]
	[**]

	 	[**]






 









 





Appendix H

IT Strategy





	1.	 	Company IT Strategy Board





     1.1 Purpose of the IT Strategy Board. The IT Strategy Board (hereinafter the
“ITSB”) shall be set up for the purpose of achieving maximum operational synergy among the Company,
NTC and IFX with regard to achieving rapid deployment of the Company’s IT infrastructure, ensuring
efficient IT operations at the lowest possible cost, and ensuring that the Parties each receive the
intended benefits to be derived from the Company.



     1.2 Responsibilities of the ITSB. The ITSB shall establish the Company’s initial IT policies,
define the IT Set-up Project, and monitor and review the IT Operations Phase of the Company..
Subject to the specific requirements set forth in this Appendix H, the goals of the IT Strategy
Board include, but are not limited to




     (i) harmonization of the IT policies (inclusive of the IT Security policies) of the
Company with those of NTC and IFX,




     (ii) determining mutually beneficial IT Requirements,



     (iii) providing input and final approvals regarding IT Reporting and common IT Projects,
in which strategic IT solutions are to be deployed,



     (iv) providing input regarding structure and staffing of the Company’s IT
Organization, the IT budget planning and execution, and outsourcing of critical IT
Services, and



     (v) reviewing and providing input regarding the Company’s ongoing
operational IT performance.



     1.3 Establishment and composition of the ITSB. The Parties shall cause the ITSB to be created
as soon as possible, but not later than four (4) calendar weeks after the Effective Date of the
Joint Venture Agreement. The ITSB shall consist of three persons, each of which shall have
extensive experience (including senior management level experience) in the management and operation
of IT. For as long as NTC and IFX comply with the minimum shareholding requirements set out in
Article 1.4-9 of the Joint Venture Agreement, NTC and IFX shall each appoint one member of the
ITSB, and the Company shall appoint the third member of the ITSB. The Parties intend that the
Company’s head of the Company’s IT Organization be designated as the Company’s representative on
the ITSB. In the event that that person is not yet in place upon the initial establishment of the
ITSB, the Company’s Board of Directors shall nominate Company’s interim ITSB representative.



     1.4 Each member shall nominate a substitute member who shall be available to act on behalf of the
primary member when the primary member may be occasionally unavailable. Substitute members
shall have the same requirements as the primary member with regard to experience level, shall
attend all meetings of the ITSB along with the primary member in order to be fully
knowledgeable regarding the activities of the ITSB, and shall be empowered to act on behalf of
the primary member in the event of the primary member’s absence. All decisions of the ITSB
require unanimous agreement of each of the three primary members (or their respective
substitute in event of absence of the primary member. The Meetings of the ITSB shall be
scheduled as required and mutually agreed. During the Set-up phase, it is anticipated that
meetings will be frequent (as often as required, but no less than once each calendar quarter),
and less frequent during the Operational Phase (as often as required, but no less than 2 times
a year).



     1.5 Interfacing of the ITSB with the Parties. The ITSB will communicate on a regular basis as
required with the IT organizations of NTC, IFX and the Company.



     1.6 Decisions and Escalation for ITSB. All decisions and recommendations of the ITSB must be
unanimous. In the event that the ITSB is unable to reach a unanimous decision, then any such
situation will be escalated to the Company’s Board of Directors.



 









 





     1.7
Costs of the ITSB. NTC, IFX and the Company will each be responsible for their own costs
associated with the participation in the ITSB.



     1.8 Specific Requirements for the Company’s IT Organization. The parties agree that they will
cause the Company’s IT Organization to adhere to the specific requirements set forth in Exhibit 1
and Exhibit 2 which are attached to this Appendix H.


Exhibit 1: Requirements regarding the Company’s IT Organization



Exhibit 2: Requirements regarding the IT Set Up phase and the IT Solutions of the Company




2









 








EXHIBIT 1 (to APPENDIX H)




Requirements regarding the Company’s IT Organization




     1. IT Organization—overall responsibility for IT. The Parties agree that the IT
Organization of the Company will have the overall responsibility for the establishment and
operation of the entire IT of the Company, including all infrastructure, applications, hardware,
software, systems, platforms, processes, databases, applications and all solutions and IT Services
necessary to support the Business Processes of the Company and for insuring the data security
therein. “Business Processes” shall include, without limitation, Finance, Accounting, Sales,
Engineering, Human Resource management, Purchasing, Warehousing, Supply Chain Management,
Production, Production Control, Customer Communication Processes.



     2. IT Interfacing and Connectivity Services. Effective and accurate data communication and
interfacing processes between the Company and each of the Parties are critical for the successful
operation of all Parties’ business. The Company and each Party shall establish operational
interfaces and connectivity services as required to support the agreed reporting and data
communications. The Company and each Party will nominate a Representative who will be responsible
for effective communication, cooperation and mutual harmonizing of the related operational
processes. This shall include but not be limited to (i)Access, Account and Configuration
Management, (ii) Change Management, (iii) Monitoring, (iv) Trouble Shooting, Emergency, Alert and
Escalation Management.



     3. Procurement of or Outsourcing of IT Services. The Parties agree that certain IT products
and services may be procured from or outsourced to a third party, or one of the Parties. It is
further understood if a Party is to provide any IT services to the Company, then for purposes of
that service, the Party providing such service shall be treated in the same manner as would a third
party. Any IT products or services acquired from or outsourced to a third party (or a Party) shall
be subject to an arm’s length commercial contract which shall include but not be limited to: a
detailed description of: purpose, general terms and conditions, Scope of Work, deliverables and
milestone dates as appropriate, security regulations, service performance metrics, Service Levels,
and clearly defined prices that are favorable when compare to general market prices for similar
products or services.



3









 





EXHIBIT 2 (to APPENDIX H)





Requirements regarding the IT Set Up phase and the IT solutions of the Company





     1. IT Set-up Project



     During the IT Set-up Phase, in order to meet the agreed timeline of Company ramp up as
specified in the Joint Venture Agreement, the IT Strategy Board will define the IT Set-up Project.
In compliance with conditions agreed within the IT Strategy Board, NTC shall provide the initial IT
Set-up Project organization, the project management and the project plan. The project plan will
contain phases for assessment, definition, requisition, installation, configuration, integration,
test, operation, administering and maintaining of the entire scope of the IT required for the
Company. The project plan shall include a schedule with milestones that are aligned with the
overall Company ramp up and approved by the Board of Directors of the Company.



     2. IT Set Up Project completion



     The entire IT required by the Company, including without limitation operation,
administration, maintenance, account and access management, configuration management, requirement
management, change management, incident & problem management, help desk, back up/restore
procedures, disaster recovery and contingency policy will be available and ready to use for
production latest by the start of the IT Operations Phase.



     3. Temporary
IT Services for the JV Set-up Project



     NTC shall provide the IT Services as may be required and agreed by the Company on a
temporary basis for the purpose of running of the Company Set-up Project. NTC shall use reasonable
efforts to provide Services to Company in accordance with the policies and Requirements committed
within the IT Strategy Board.



     4. IT Set-up Project Documentation



     All services performed hereunder shall be fully documented and NTC shall maintain a standard
of reasonable diligence and care regarding project documentation in rendering the Services
hereunder. All Documentation shall be prepared in English language and the English version shall be
official.



     5. IT Objects & Services Catalogue and Service Levels



     To define the IT portfolio of the Company’s IT Organization and to maintain the support of
the Business Processes by IT in alignment with the Business Strategy of the Company, NTC shall
establish at the beginning of the IT Set-up Project and continuously maintain a data base of all IT
applications and services used by the Company (the “IT Objects and Services Catalogue”).



     In context of the IT Objects and Services Catalogue the delivery and quality (availability,
reliability, serviceability) of all critical services shall be controlled by mutually agreed
commercial contracts which will include without limitation, schedules with milestone, deliverables,
appropriate service levels, pricing and other requirements as mutually agreed.



     6. Take Over of IT responsibility by Company’s IT Organization



     The Parties shall cause the Company’s IT Organization to take over the responsibility for
and control of the entire IT of the Company according to the committed IT Objects & Services
Catalogue latest by the “Ready for Equipment” milestone is reached.



     The Company’s IT Organization shall take over the responsibility for maintenance of IT Objects &
Services Catalogue and agreements including the associated documentation and keep it current.



4









 





     7. Protection of IT Objects and Components against unauthorized access, access for Parties



     The Parties agree, that entire IT Infrastructure of the Company, consisting of all IT
systems, hardware and software, platforms, including Databases and Applications and all IT Services
necessary for set up and running of all Business Processes of the Company, which includes without
limitation Finance, Accounting, Sales, Engineering, Human Resource management, Purchasing,
Warehousing, Supply Chain Management, Production, Production Control will be connected to the
Company’s own Intranet Domain, which shall be separated from IT environments not controlled by the
Company (e.g., the Company shall be separated from the IT Infrastructure of both Parties and any
third party) by means of Firewalls and Demilitarized Zones (DMZ) configured accordingly to the
actual state of the art and commonly used security standards which efficiently protect all of the
Company’s IT Components and Objects against an unauthorized access from outside of the Company
Intranet. Each Party shall have access to the information contained in the Company systems as
pursuant to the internal rules regulating the accessibility of proprietary information approved by
the board of directors of the Company (to be defined within the IT Set-up Project).



     8. IT Solutions to be determined during the Company IT Set-up Project



     Both Parties expressly agree that the full scope of the Company’s IT, including all
solutions, all required installations, hardware, software, systems, platforms, processes,
databases, applications and all solutions and IT Services necessary for set up and running of all
Business Processes of the Company shall be subject of analysis, decisions and measures conducted
jointly by all three Parties during the IT Set-up Project. The final decisions about IT solutions
for deployment at the Company must be approved by the IT Strategy Board by unanimous vote. All IT
solutions implemented for the Company shall be aligned with the rules and regulations of the
Frontend Fab Cluster including TR24. The IT solutions implemented for the Company shall also be
aligned with NTC’s Multi-Site support and Key Performance Indicator specifications.



     9. IT Interfaces to be determined during the Company IT Set-up Project



     The Parties agree that the Company shall provide IT interfaces between the Company and each
of the Parties.



     Detailed information and data attributes regarding: description, format, availability,
confidentiality, authenticity, integrity, referring substantially to the required solutions or
corresponding interfaces will be defined in detail during the IT Set-up Project in cooperation with
the Owners of the corresponding Business Processes.



     10. IT Solutions for Reporting required by the Parties



     The Parties expressly agree that the Company shall set-up the appropriate IT Solutions to
provide each Party with reports regarding the Business Processes of the Company. The IT Solutions
and corresponding interfaces will be defined in detail during the IT Set-up Project.



     11. IT Solution for ERP system for Company



     As proposed by NTC, the Parties agree that the Company shall use the ERP system developed by
Formosa Technology Corporation (FTC) which includes: finance, accounting, sales, engineering
service, human resource management, purchasing, warehousing and production control. The Parties
agree that the configuration, implementation and operation of this system shall be in accordance
with and shall adhere to the requirements stated in Sections 7, 8, 9 and 10 of this Exhibit 2. The
ERP Database of the Company will be isolated and maintained separately from the databases of
Formosa Plastics Group (FPG). The Company will provide an ERP interface between the Company and
each of the Parties, and establish a firewall of information system between the Company and each of
the Parties for purposes of security and confidentiality of the proprietary information of the
Company. Each Party shall have access to the information contained in the Company’s version of the
ERP system, subject to



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the rules and requirements regulating the accessibility of proprietary information as approved by
the board of directors of the Company and the ITSB. The Company’s use of the ERP system shall be
governed by a commercial contract to be negotiated between the Company and the provider of the ERP
system. Such contract will include without limitation, schedules with milestone, deliverables,
appropriate service levels, pricing and other requirements as mutually agreed.



     12. Language for User Interfaces (Screens) and Reports and the corresponding user documentation
in English



     User Interfaces, Reporting and Documentation of IT Systems, Solutions and Applications to be used
at Company shall be in English or bilingual English and Chinese language. If any IT Systems,
Solutions, Applications or Documentation are available only in Chinese language, NTC will translate
it into English on request of IFX.



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Appendix I to Joint Venture Agreement




ARTICLES OF INCORPORATION

OF

HWA-KENG INVESTMENT INC.




	 	 	 
	Chapter I. General provisions
	 
	 	 
	Article 1.

	 	The corporation shall be named Hwa-Keng
Investment Inc. ( ...........) (the “Corporation”) and
be incorporated as a company limited by shares in
accordance with the Company Law of the Republic of
China (the “ROC”).
	 
	 	 
	Article 2.

	 	The scope of business of the Corporation shall
be to subscribe for, purchase and otherwise acquire,
hold, sell and otherwise dispose of shares.
	 
	 	 
	Article 3.

	 	The Corporation may also act as a shareholder
with limited liability of another company, and its
investment may exceed forty percent (40%) of the
paid-in capital of the Corporation, notwithstanding
Article 13 of the Company Law.
	 
	 	 
	Article 4.

	 	The head office of the Corporation shall be
located in
3rd Floor, 101-17, Tun Hwa North Road,
Taipei, Taiwan, ROC.
	 
	 	 
	Article 5.

	 	Public notices to be given by the Corporation
pursuant to law shall be made in conspicuous sections
of local daily newspapers circulated in the location
of the head office of the Corporation.
	 
	 	 
	Chapter II. Shares
	 
	 	 
	Article 6.

	 	The total capital of the Corporation is
authorized at seven hundred million New Taiwan dollars
(NT$700,000,000), which is divided into seventy
million (70,000,000) common shares with a par value of
10 New Taiwan dollars (NT$10) per share.
	 
	 	 
	Article 7.

	 	Before they may be issued, the share
certificates of the Corporation shall bear the
shareholders’ name, shall be signed and sealed by
three or more directors of the Board, and certified by
the competent government agent.
	 
	 	 
	Article 8.

	 	Any application for transfer of share
certificates shall be filed jointly by transferor and
transferee with the Corporation. Until the transfer is
duly made, the transferee shall not assert its
shareholder’s rights against the Corporation, and any
such application shall be in a form approved by the
Board of Directors.
	 
	 	 
	Article 9.

	 	In the event that a shareholder loses his share
certificate(s), he shall formally notify the
Corporation of such occurrence. The Corporation shall
issue new share certificate(s) to replace those lost,
subject to receiving an indemnity on terms
satisfactory to the Board of Directors.
	 
	 	 
	Chapter III. Shareholders’ Meetings
	 
	 	 
	Article 10.

	 	Shareholders’ meetings shall be as follows:







	 	(1)	 	Regular meeting—to be called by the Board of Directors within six months
after the conclusion of each accounting year; and
	 
	 	(2)	 	Special meeting—to be called by the Board of Directors whenever
necessary, or with written requests from shareholders representing more than
three percent (3%) of total issued shares which have been continuously held by
the same shareholders for more than one year. The Supervisor may call a
Shareholders’ Meeting whenever necessary.




 









 












Where the Board of Directors or the Supervisor(s) are unable to call the Shareholders’ Meeting for
any reason including in the case of a latter because of the transfer of the Supervisor(s) shares,
the shareholders representing more than three percent (3%) of the total amount of issued shares may
call the Shareholders’ Meeting after obtaining the competent authority’s approval for the request.




Matters to be decided by the Shareholders meeting shall be as follows:




	 	(1)	 	Revision of the Articles of Incorporation;
	 
	 	(2)	 	Appointment and dismissal of the directors and the supervisors, and determination of
their compensation;
	 
	 	(3)	 	Approval of the Settlement of Accounts received from the Board of Directors;
	 
	 	(4)	 	Determination of dividends and of disposition of losses;
	 
	 	(5)	 	Liquidation, merger, consolidation or reorganization of the Company;
	 
	 	(6)	 	Other matters reserved to the determination of the Shareholders meeting by the Company
Law





	 	 	 
	Article 11.

	 	Shareholders’ meetings shall be presided over by the
Chairman of the Board of Directors. In his absence, the
Chairman of the Board of Directors may designate a director
as the chairman of the meeting. In the absence of such a
designation, the Directors shall elect one among
themselves.
	 
	 	 
	Article 12.

	 	A notice to convene a regular meeting of
shareholders shall be given to each shareholder 20 days in
advance. A notice to convene a special meeting of
shareholders shall be given to each shareholder 10 days in
advance. The notice shall state when, where and why the
meeting is to be convened.
	 
	 	 
	Article 13.

	 	Shareholders of the Corporation shall be entitled to
one vote for each share they hold. Matters such as the
method of announcing the Shareholders meeting, the legally
required number of attendants, and the required number of
votes for resolutions shall be in accordance with the
Company Law of the Republic of China.
	 
	 	 
	Article 14.

	 	Resolutions at a Shareholders’ meeting shall, unless
otherwise provided for in the Company Law, be adopted by a
majority vote of shareholders present in person or by
proxy, who represent a majority of the total number of
issued shares.
	 
	 	 
	Article 15.

	 	Resolutions adopted at a meeting of the shareholders
shall be recorded in the minutes of the proceedings, which
shall be prepared in English and Chinese, and shall be
signed and sealed by the chairman of the meeting. The
minutes of proceedings shall also include the time and
place of the meeting, name of the chairman, number of
shareholders present at the meeting and the manner in which
resolutions had been adopted, as well as other essentials
of the proceedings. The minutes shall be kept together with
a list of shareholders present at the meeting and the
proxies.
	 
	 	 
	Chapter IV. Directors, Supervisors, Officers
	 
	 	 
	Article 16.

	 	Unless otherwise decided by the shareholders, the
Corporation shall have four (4) Directors and two (2)
Supervisors, to be elected at a Shareholder meeting. The
tenure of office of Directors and Supervisors will be three
years and they will be eligible for re-election. The
remuneration of Directors and Supervisor, if any, shall be
determined by the shareholders at a Shareholders’
meeting.






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	Article 17.

	 	A corporate
shareholder of this
Corporation shall have the
right to designate a number
of representatives to be
elected as Directors and/or
Supervisor(s) of the
Corporation and the right
to designate
representatives as
substitutes or successors
of such Directors or
Supervisor(s).
	 
	 	 
	Article 18.

	 	The Directors shall
form a Board of Directors.
The Chairman of the Board
of Directors shall be
elected from among the
Directors by a majority
vote at a meeting attended
by two-thirds or more of
the Directors. The Chairman
of the Board of Directors
shall represent the
Corporation.
	 
	 	 
	Article 19.

	 	The Chairman shall
call a meeting of the Board
of Directors, provided that
the director who receives
the number of ballots
representing the largest
number of votes shall call
the initial meeting of each
term of the board of
directors.

	 
	 	 
	 

	 	An attendance by a
simple majority of the
Directors in person or
through representation
shall be necessary to form
a quorum. Directors may
attend the meeting in
person or by proxy. A
Director cannot represent
more than one absent
Director for a meeting of
the board of directors. A
director residing in a
foreign country may appoint
in writing a shareholder
residing within the
Republic of China as his
alternate to attend the
meetings of the Board of
Directors regularly
provided, however the
appointment shall be
registered with the
competent government
authority.
	 
	 	 
	 
	 	The notice for the
Board Meeting shall state
the reasons and agenda of
the meeting, and shall be
sent to each Board of
Director 14 days prior to
the meeting, provided that
such period for advance
notice may be shortened to
2 days in case of
emergency.
	 
	 	 
	Article 20.

	 	The Chairman of the
Board of Directors shall
preside at meetings of the
Board of Directors. In his
absence, the Chairman of
the Board of Directors may
designate a director as the
chairman of the meeting. In
the absence of such a
designation, the Directors
shall elect a meeting
chairman from among
themselves.
	 
	 	 
	Article 21.

	 	On all issues to be
determined by the Board of
Directors, each Director
shall have one vote. Unless
otherwise specifically
provided for in the Company
Law or herein, resolutions
shall be in writing,
adopted by a majority vote
of all directors (whether
attending or not) at a
meeting attended by a
majority of the
Directors.
	 
	 	 
	Chapter V. Accounting
	 
	 	 
	Article 22.

	 	The accounting year
of the Corporation shall
begin on January 1 and end
on December 31 of each
year. Annual closing of
books shall be made at the
end of each accounting
year. The accounts of the
Company shall be kept in
accordance with the laws of
the Republic of China.
	 
	 	 
	Article 23.

	 	At the end of each
accounting year, the Board
of Directors shall prepare
the following reports, and
forward them on to the
Supervisor(s) for
examination thirty days
prior to the regular
meeting of
shareholders:







	 	(1)	 	Report on operations;
	 
	 	(2)	 	Financial statements; and
	 
	 	(3)	 	Proposal concerning distribution of net profits or action to deal with losses.





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	Article 24.

	 	Out of the net profit of the Corporation for each fiscal year, after
having provided for income tax, and covered the losses of the previous years,
there shall be first set aside a legal reserve of ten percent (10%) from the net
profit after tax until the accumulated amount of such reserve equals the total
authorized capital. Thereafter, after providing for any voluntary reserves as
decided by the Shareholders meeting, 0.1 per cent (0.1%) of the then remaining
profits shall be set aside for employee as bonuses. The remainder of the profit,
if any, may be announced and paid as dividends to the shareholders in cash or
stock, such as shall be determined from year to year by the Board of Directors
and approved by the Shareholders meeting.
	 
	 	 
	Article 25.

	 	Dividends will be paid only to those shareholders whose names are recorded
on the shareholders’ register on the date fixed for distributing dividends in
proportion to their holding percentages.
	 
	 	 
	Chapter VI. Supplementary Provisions
	 
	 	 
	Article 26.

	 	When it is determined by the Shareholders’ meeting that the business of
the Corporation is completed, the Corporation shall be dissolved and liquidated.
Such determination shall be in the form of a shareholders’ resolution adopted by
a majority vote of shareholders representing over three-fourths of the total
number of issued shares of the Corporation.
	 
	 	 
	Article 27.

	 	Provisions of the Company Law shall be referred to for matters not
provided for in these Articles of Incorporation.
	 
	 	 
	Article 28.

	 	These Articles of Incorporation were agreed upon and signed on [ ].






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