<PAGE>

                                                                   Exhibit 10.10

                                    AGREEMENT

                                       ON

         TERMINATION OF JOINT VENTURE AGREEMENT AND RELATED TRANSACTIONS

                            between, on the one side

Saifun Semiconductors Ltd.
Sappir Industrial Park
P.O. Box 8385 Netanya
Israel 42504

                                         - hereinafter referred to as "SAIFUN" -

Saifun Ventures Ltd.
Sappir Industrial Park
P.O. Box 8385 Netanya
Israel 42504

                                - hereinafter referred to as "SAIFUN VENTURES" -


                             and, on the other side

Infineon Technologies AG
Sankt-Martin-Strasse 53
81541 Munich
Germany

                                       - hereinafter referred to as "INFINEON" -


This Agreement ("AGREEMENT") is entered into on December 20, 2004 between Saifun
Semiconductors Ltd., Netanya, Israel, registered with the Company Register under
No 51-239733-2, Saifun Ventures Ltd., Netanya, Israel 42504, registered with the
Company Register under No. 51-308780-9, and Infineon Technologies AG, Munich,
Germany, registered with the Commercial Register of the Local Court
(Amtsgericht) of Munich under HRB 126492.

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                                    SECTION 1
                            BACKGROUND AND OBJECTIVES

1.1   On April 6, 2001, Saifun and Infineon have entered into a Joint Venture
      Agreement (the "JVA") establishing a joint venture (the "JOINT VENTURE")
      in Germany and Israel regarding the development, production and
      distribution of so-called "MASS STORAGE PRODUCTS". In connection with the
      establishment of the Joint Venture, Saifun and Infineon have incorporated
      a limited liability company in Israel (currently named "Infineon
      Technologies Flash Limited") and a limited liability business partnership
      (GmbH & Co. KG) in Germany (currently named "Infineon Technologies Flash
      GmbH & Co. KG"), the general partner of which is a German limited
      liability company (GmbH) (currently named "Infineon Technologies Flash
      Geschaftsfuhrungs GmbH"). The limited liability company in Israel shall
      also be referred to as "JV LTD.", the limited liability business
      partnership shall be referred to as "JV KG" and its sole general partner
      as "JV GMBH". The three companies shall also hereinafter be referred to as
      the "JV COMPANIES". Originally, Infineon held 51% of the interest in each
      of the JV Companies and Saifun held 49%.

1.2   In connection with the establishment of the Joint Venture, several other
      agreements have been entered into following the signing of the JVA. These
      agreements together with any amendments and additional agreements entered
      into from time to time in the context of the Joint Venture (the "ANCILLARY
      AGREEMENTS") are listed in Exhibit 1.2.

1.3   On August 21, 2001, Saifun transferred its shares in JV GmbH and its
      limited partnership interest in JV KG to its fully owned subsidiary,
      Saifun Ventures. Moreover, effective as of June 1, 2001, Saifun
      transferred its shares in JV Ltd. to Saifun Ventures. In the respective
      transfer deeds, Saifun Ventures has agreed to be bound by the JVA and the
      Ancillary Agreements.

1.4   On January 9, 2003, the Parties amended and restated the JVA by entering
      into a certain Amended and Restated Joint Venture Agreement (the "AJVA")
      to extend the existing cooperation to the field of CODE FLASH PRODUCTS (as
      defined in Schedule D to the AJVA). In this context, certain Ancillary
      Agreements were amended and additional agreements were entered into.
      Moreover, the stake of Infineon in each of the JV Companies was increased
      from 51% to 70% whereas the stake of Saifun Ventures was reduced from 49%
      to 30%.

1.5   Infineon and Saifun Ventures are sometimes referred to as the "PARTIES"
      and individually as a "PARTY". Saifun shall be included in the term
      "Parties" where the context so requires, taking into account that Saifun
      is a party to this Agreement and the AJVA, but not a direct
      shareholder/partner in the JV Companies any more. The term "AFFILIATE"
      shall be defined as provided for in Sections 15 et. seq. of the German
      Stock Corporation Act (AktG). The term "SUBSIDIARY" shall include any
      Affiliate which is controlled by or the majority of the shares

                                      -2-
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      of which are owned by any of the Parties. The Schedules and Exhibits to
      this Agreement form integral and combined parts of this Agreement.

1.6   The Parties intend to terminate the Joint Venture and Infineon intends to
      buy the shares in JV GmbH and JV Ltd. as well as the partnership interest
      in JV KG. In this context, upon fulfillment of the conditions to First
      Closing and/or Second Closing (as applicable) as described in Section 9
      hereof, the Parties and the JV Companies shall take the steps described in
      Sections 2 through 8 of this Agreement:

                                    SECTION 2
                              TERMINATION OF AJVA /
              TERMINATION AND/OR AMENDMENT OF ANCILLARY AGREEMENTS

2.1   The Parties will terminate by mutual agreement the AJVA (including the
      JVA) with effect as of Second Closing (as defined in Section 9 hereof),
      save for Sections 9.2, 9.3 and 9.5 of the AJVA which shall remain in full
      force and effect. The provisions of the AJVA relating to and/or regulating
      the termination of the Joint Venture and the AJVA (in particular Section 7
      thereof) shall not apply to this termination by mutual agreement
      contemplated in this Agreement but rather this termination shall be
      regulated by the terms and conditions of this Agreement.

2.2   Upon First Closing, the rights and obligations of the Parties and their
      respective Affiliates arising out of or relating to any financing
      arrangements, including the financing guaranty agreement between Saifun,
      Infineon and JV KG of spring 2004 (the "FINANCING GUARANTEE") shall be
      regulated in accordance with Section 7 hereof.

2.3

2.3.1 Upon First Closing, the following Ancillary Agreements shall be terminated
      by mutual agreement by the relevant parties thereto with effect as of
      First Closing:

            -     Master Loan Agreement between JV Ltd. and Saifun Ventures of
                  May 21, 2001;

            -     Master Loan Agreement between JV KG and Saifun of February 19,
                  2003,

      whereas the Individual Loan Agreement between JV Ltd. and Saifun of May
      29, 2001 shall be assigned by Saifun to Infineon.

2.3.2 Upon Second Closing, the following Ancillary Agreements shall not be
      terminated, but shall be replaced and superseded with the amended and
      restated agreements as set forth herein (the "AMENDED ANCILLARY
      AGREEMENTS") and the Parties shall execute, and/or cause the

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      respective parties thereto to execute, as applicable, the Amended
      Ancillary Agreements as follows:

            -     the amended and restated Basic Agreement on Development Orders
                  in accordance with the draft agreement attached hereto as
                  Exhibit 2.3.2.1;

            -     the amended and restated License Agreement in accordance with
                  the draft agreement attached hereto as Exhibit 2.3.2.2 (the
                  "AMENDED LICENSE AGREEMENT"); and

            -     the amended and restated Wafer Production and Testing
                  Agreements in accordance with the draft agreements attached
                  hereto as Exhibit 2.3.2.3.

2.4   Upon Second Closing and in accordance with the waiver letter attached
      hereto as Exhibit 2.4, the Parties shall, other than as set forth
      explicitly in this Agreement (including any Exhibits thereto), irrevocably
      waive all rights, claims, demands, complaints and interests arising out of
      or relating to the JVA, AJVA and/or Ancillary Agreements (other than the
      Amended Ancillary Agreements).

                                    SECTION 3
               SALE AND TRANSFER OF SHARES IN JV LTD. AND JV GMBH
                   AS WELL AS OF PARTNERSHIP INTEREST IN JV KG

3.1   Upon First Closing, Saifun Ventures shall sell and transfer its entire
      490,000 ordinary shares of NIS 0.01 par value per share in JV Ltd. to
      Infineon for a purchase price of US$ 1,100. Infineon shall accept such
      sale. The sale and transfer deed shall be executed on First Closing.

      Saifun Ventures agrees that notwithstanding the foregoing transfer of
      shares in JV Ltd., and the provisions of Section 9.3.13 hereunder, Saifun
      Ventures shall maintain after First Closing and until dissolution one of
      the current board members appointed by Saifun Ventures to the board of
      directors of JV Ltd., Boaz Eitan or Kobi Rozengarten, (which shall be a
      non-voting board member), in order to aid in and support the facilitation
      of the dissolution of JV Ltd. as further described in Section 5 below
      (including to co-sign the solvency affidavit required for the voluntary
      liquidation), provided that such remaining Saifun board member shall act
      as one out of at least three acting board members.

      Except for the regulations of the preceding paragraph, with effect as of
      First Closing, Saifun and Saifun Ventures shall cause the dismissal or
      resignation of the directors or equivalent board and management members of
      the JV Companies appointed by them and as listed in Exhibit 9.3.13,
      provided that even after the First Closing, Saifun shall

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      designate one of its employees, at no cost for JV Ltd., to facilitate the
      dissolution of JV Ltd. until the liquidation of JV Ltd. is consummated.

      Infineon will designate one employee in order to facilitate the
      dissolution of the JV Ltd. until the liquidation of JV Ltd. is
      consummated.

3.2   Upon First Closing, Saifun Ventures shall sell and transfer its entire
      share in the nominal amount of EUR 12,250 in JV GmbH to Infineon for a
      purchase price of US$ 15,700. Infineon shall accept such sale. The sale
      and transfer deed shall be executed on First Closing.

3.3   Upon First Closing, Saifun Ventures shall sell and transfer its entire
      partnership interest in the nominal amount of EUR 245,000 in JV KG to
      Infineon for a purchase price of US$ 983,200. Infineon shall accept such
      sale. The sale and transfer deed shall be executed on First Closing.

3.4   The drafts of the sale and transfer deed pursuant to Section 3.1 is
      attached hereto as Exhibit 3.4.1 and the sale and transfer deed pursuant
      to Sections 3.2 and 3.3 is attached hereto as Exhibit 3.4.2.

                                    SECTION 4
                            PAYMENT OF PURCHASE PRICE

4.1   Upon the terms and subject to the conditions of this Agreement, at First
      Closing, Infineon shall pay for the sale and transfer of the shares and
      partnership interest in JV GmbH, JV Ltd. and JV KG as described in Section
      3 hereof the aggregate purchase price of US$ 1 million (the "PURCHASE
      PRICE").

4.2   The Purchase Price shall be paid by wire transfer to the bank accounts as
      further specified in the agreements pursuant to Exhibits 3.4.1 and 3.4.2.

                                    SECTION 5
                         UNDERTAKINGS RELATED TO JV LTD.

5.1   The Parties acknowledge that it is the intention of Infineon, upon Second
      Closing, to take all necessary steps to facilitate and procure the
      voluntary dissolution of JV Ltd. in accordance with the provisions set
      forth herein. Saifun Ventures shall assist Infineon in the facilitation of
      such voluntary dissolution of JV Ltd.. Saifun Ventures agrees to assume
      its share of 30% in the liabilities of JV Ltd., other than the ones
      resulting from the ordinary course of business, which are neither recorded
      as a liability on the balance sheet of JV Ltd. as of First Closing nor
      explicitly assumed by a Party under this Agreement or any Ancillary
      Agreement. Saifun guarantees for Saifun Venture's

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      fulfillment of such obligation. The direct cost of the liquidation (legal
      advice, filings, etc.) shall be borne by Infineon.

5.2   Exhibit 5.2(a) hereto lists all employees of JV Ltd. (excluding those that
      have been delegated from Saifun to JV Ltd and currently work in Infineon's
      Dresden facility) (the "EMPLOYEES") as of the date indicated thereon.
      Exhibit 5.2(b) hereto lists all employees of JV Ltd. who currently work in
      Infineon's Dresden facility and who will be transferred to Saifun (the
      "DRESDEN EMPLOYEES"). Exhibit 5.2 (c) hereto lists the consultants that
      are currently working for JV Ltd. (the "CONSULTANTS").

5.3   The Parties agree that JV Ltd. shall furnish the Employees, the Dresden
      Employees and the Consultants with a termination notice in accordance with
      the requirements of any applicable contract or law pertaining to the
      dismissal of employees or consultants, as applicable. The termination
      notices shall provide for the timely termination of the employments
      effective as of Second Closing or such other date as indicated in Exhibits
      5.2 (a) or 5.2 (b) or as subsequently agreed to between JV KG and Saifun
      (the "ALTERNATIVE TRANSFER DATE"). Saifun shall, or shall cause one of its
      Affiliates to, offer employment, effective as of Second Closing or the
      Alternative Transfer Date, as the case may be, to each Employee, and
      Consultant on terms and conditions of employment similar (in particular
      with respect to salaries and fringe benefits) to those that apply to such
      Employee, or Consultant immediately before Second Closing, and with
      respect to Dresden Employees, on terms not less favorable than the terms
      of their employment immediately prior to their assignment to Dresden,
      except with respect to any future entitlement of such Employee, Dresden
      Employee or Consultant under the SARP (as defined below) (the "EMPLOYMENT
      OFFERS"). The Employment Offers shall also comply with any applicable law.
      Immediately after signing of this Agreement (and with respect to Dresden
      Employees prior to their Alternative Transfer Date), (i) the Parties shall
      cause JV Ltd. to allow Saifun to approach the Employees, Dresden Employees
      and Consultants for the purpose of the Employment Offers, and (ii) Saifun
      shall approach the Employees, Dresden Employees and Consultants (safe for
      the provisions in Sec. 5.4) in order to fulfill its obligations towards
      Infineon and its Affiliates under this Section 5.

5.4   The Parties agree that JV Ltd. will continue to employ the Dresden
      Employees until immediately prior to their Alternative Transfer Dates and
      Mr. Moti Shulak until the transfer of his employment to Infineon or an
      Infineon Affiliate. The timing of the liquidation of JV Ltd will - to the
      extent possible - be coordinated with the aforementioned return dates of
      the Dresden Employees.

5.5   Except as provided with regards to the SARP under Section 5.7 below, the
      Parties agree that JV Ltd., at no cost to Saifun, shall be responsible to
      pay any and all payments and benefits due to the Employees, Dresden
      Employees and Consultants when due, under the respective employment
      agreement or mandatory law, as listed in Exhibits 5.2 (a), (b) and (c)
      (the "Wages") and will discharge all such obligations in respect of the
      Employees,

                                      -6-
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      Dresden Employees and Consultants up to (including with respect to)
      termination of employment, whether or not such payments fall due before or
      after the termination of employment ("TERMINATION OF EMPLOYEES
      LIABILITIES"). Infineon agrees to save, defend, indemnify and hold
      harmless Saifun and its Affiliates from and against all Termination of
      Employees Liabilities, except in the event that the Parties agree not to
      comply with the requirement of a thirty (30) days notice period, without
      receiving appropriate waiver letter from the employees.

5.6   With regard to employees, Saifun shall be responsible for any liabilities
      in respect of any Employee or any former employee of JV Ltd. (i) arising
      out of the failure of Saifun to comply with its obligations under this
      Section 5, and (ii) with respect to his or her employment with Saifun and
      its Affiliates from and after Second Closing.

5.7   Upon First Closing, the Parties shall cause JV Ltd. to assign to Saifun
      and Saifun shall release JV Ltd. and Infineon from and assume any and all
      liabilities and obligations of any kind and nature, whether known or
      unknown, expressed or implied, arising out of, relating to or otherwise in
      respect of [***]. Subject to the foregoing, Saifun agrees to save, defend,
      indemnify and hold harmless JV Ltd. and its Affiliates from and against
      all Saifun Assumed Liabilities.

5.8   For the avoidance of doubt and except for the provisions with respect to
      the Affiliates of the Parties, nothing herein shall be deemed or construed
      as an agreement for the benefit of a third party (Vertrag zugunsten
      Dritter), in particular not for the benefit of the Employees, Dresden
      Employees, Consultants or [***].

5.9   Upon Second Closing, Saifun shall terminate the sublease agreement between
      Saifun and the JV Ltd. as well as the cost sharing for the Security Guard
      and the JV Ltd shall assign to Saifun the car lease agreements used by the
      Employees as well as the phone system lease.

5.10  Upon First Closing, the Parties shall, or shall cause the respective
      parties thereto to, terminate the Ancillary Agreements pertaining to JV
      Companies as listed in Exhibit 5.10.

5.11  Immediately after the transfer of the shares in JV Ltd. according to
      Section 3.1 JV Ltd. shall sell and transfer certain assets in accordance
      with Exhibit 5.11 to JV KG as the remaining shareholder. Such sale and
      transfer shall take place at no cost to Saifun.


*** Omitted pursuant to a confidential treatment request. The confidential
    information has been filed separately with the SEC.

                                      -7-
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5.12  Thereafter, JV Ltd. will then be dissolved - on a voluntarily basis - in
      accordance with applicable law.

                                    SECTION 6
                       SALE AND TRANSFER OF SAIFUN SHARES

6.1   JV Ltd. currently holds 1,072,407 Ordinary Shares, NIS0.01 par value per
      share, of Saifun (the "SAIFUN SHARES"). The Saifun Shares have been
      deposited with Eitan, Pearl, Latzer & Cohen-Zedek Trustee for Employee
      Benefit Programs (the "TRUSTEE") pursuant to the trust agreement of August
      2, 2001, as amended as of April 15, 2002, attached hereto as Exhibit 6.1.1
      (the "TRUST AGREEMENT"). The Trustee currently holds the Saifun Shares in
      trust for JV Ltd. for the purpose of the SARP. Upon First Closing, the
      Parties shall cause JV Ltd. to terminate the Trust Agreement with the
      Trustee with immediate effect and cause the Trustee to release the Saifun
      Shares from the trust in accordance with Section 5 of the Trust Agreement.
      As soon as practical following the First Closing, JV Ltd. shall transfer
      the Saifun Shares to Infineon at no cost to Saifun in accordance with the
      Infineon Share Purchase Agreement attached hereto in Exhibit 6.1.2.
      Infineon's obligation to sell the Saifun Shares as specified under the
      Amended License Agreement shall be triggered upon the consummation of the
      transfer and assignment of the Saifun Shares to Infineon. Infineon shall
      agree to take all necessary actions to consummate the transfer and
      assignment.

6.2   The Trustee has confirmed in writing to the Parties that it has not made
      any distributions of Saifun Shares or rights pertaining thereto to any
      third party.

6.3   JV Ltd.'s ownership in the Saifun Shares free and clear of any
      Encumbrance, as described herein, is evidenced by (i) the excerpt from the
      Companies Registrar concerning Saifun sent to Infineon on Dec. 13, 2004,
      showing that JV Ltd. holds the Saifun Shares, (ii) the excerpt from the
      Companies Registrar concerning JV Ltd. sent to Infineon on Dec. 13, 2004,
      showing that JV Ltd. has not Encumbered the Saifun Shares, and (iii) the
      confirmation by the secretary of Saifun and an updated shareholder
      register attached hereto as Exhibit 6.3.1, showing that JV Ltd. owns the
      Saifun Shares and is registered as a shareholder in Saifun`s shareholder
      registry. For the purpose of this Agreement, "ENCUMBRANCE" means any
      registered charge, claim, limitation, condition, equitable interest,
      mortgage, lien, option, pledge, security interest, easement, encroachment,
      adverse claim.

6.4   As between the Parties, Infineon shall not be obligated to provide any
      warranties and representations, except that (i) it did not encumber the
      Saifun Shares itself and (ii) that, as of the First Closing, no registered
      liens existed and Infineon did not know of any unregistered encumbrances
      as of the First Closing. (iii) Infineon will confirm that it obtained the
      power and authority to enter into the sale of Saifun Shares agreement with
      the third party. Infineon and its Affiliates shall not be obligated to
      provide any further indemnities or otherwise have any liability whatsoever
      with respect to or in

                                      -8-
<PAGE>

      connection with the purchase and holding of the Saifun Shares by Infineon
      and the sale and transfer of the Saifun Shares to a third party. In case a
      third party request additional warranties, representations or indemnities
      or any other liability from Infineon, Infineon shall not be obligated to
      sell the Saifun Shares.

6.5   Saifun shall use its best efforts to provide a third potential buyer or
      Infineon upon IPO with piggy back registration rights for the Saifun
      Shares.

                                    SECTION 7
                    SHAREHOLDER LOANS AND FINANCING GUARANTEE

7.1   Upon First Closing, Saifun and Infineon shall be released from any past,
      present and future obligations to provide further equity contributions or
      other financing to the JV Companies under Section 4 of the AJVA and/or the
      Financing Guarantee.

7.2   Effective as of First Closing, (i) Saifun hereby irrevocable assigns to
      Infineon, and Infineon accepts the assignment of, Saifun's right to
      repayment of the loan granted to JV Ltd. under the Individual Loan
      Agreement between Saifun and JV Ltd. of May 29, 2001, including all other
      rights under such Individual Loan Agreement; and (ii) Saifun and any of
      its Affiliates hereby irrevocably waive their right to repayment of any
      other loans granted to and any other payments or financial contributions
      made to JV Ltd. or any other JV Company under the other loan agreements as
      listed in Section 2.3.1, any individual loan agreement, any other
      agreement or on any ground whatsoever.

7.3   Upon First Closing, the Parties shall irrevocably waive, and will cause JV
      KG to irrevocably waive, any and all rights and obligations arising out of
      or relating to the Financing Guarantee between Infineon, Saifun and JV KG
      in accordance with the written waiver form a draft of which is attached
      hereto as Exhibit 7.3.

                                    SECTION 8
                         BOARD AND SHAREHOLDER APPROVAL

The Parties shall obtain all board approvals, shareholder approvals, if needed
and any other approvals necessary for the execution of this Agreement and the
transactions contemplated thereby, and shall deliver to the other on Signing
executed originals thereof.

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                                    SECTION 9
                         CLOSING AND CLOSING CONDITIONS

9.1   The transactions contemplated by this Agreement designated to take place
      on the First Closing, shall become effective at the time of the first
      closing ("FIRST CLOSING") to be held at Munich, Germany at 10 a.m. local
      time on the fifth business day following the date hereof or at such other
      place or at such other time or on such other date as the Parties mutually
      may agree in writing. The day on which First Closing takes place is
      referred to as the "FIRST CLOSING DATE".

      The transactions contemplated by this Agreement designated to take place
      on the Second Closing, shall become effective at the time of the second
      closing ("SECOND CLOSING") to be held at Munich, Germany at 10 a.m. local
      time on the fifth business day following the satisfaction or, to the
      extent permitted by applicable law, waiver of all applicable conditions to
      the obligations of the Parties set forth in this Section 9 for the Second
      Closing (other than such conditions as may, by their terms, only be
      satisfied at Second Closing or on the Second Closing Date) or at such
      other place or at such other time or on such other date as the Parties
      mutually may agree in writing. The day on which Second Closing takes place
      is referred to as the "SECOND CLOSING DATE".

9.2   The respective obligations of the Parties to consummate the transactions
      contemplated by this Agreement shall be subject to the fulfillment, at or
      prior to Second Closing, of the following conditions precedent:

      9.2.1 To the extent applicable, Infineon or any of its Affiliates shall
            have obtained any material consents of, or registrations,
            declarations or filings with, any governmental authority legally
            required for the consummation of the transactions contemplated by
            this Agreement and the Ancillary Agreements.

      9.2.2 Expiration of the 30-day termination prior notice period for the
            Employees or sooner if the appropriate waiver will have been
            obtained.

9.3   The following shall occur at First Closing or Second Closing as indicated
      below,

      9.3.1 At the Second Closing, the Parties shall confirm in writing that the
            conditions to Second Closing pursuant to Section 9.2 hereof have
            been fulfilled or waived;

      9.3.2 Within 7 days as of the First Closing, Infineon shall deliver to
            Saifun, by wire transfer to the bank account set forth in Section
            4.2 hereof (or as otherwise designated in writing by Saifun to
            Infineon at least two business days prior to the First Closing
            Date), an amount equal to the Purchase Price set forth in Section
            4.1 hereof in immediately available funds in US Dollars;

                                      -10-
<PAGE>

      9.3.3 At the First Closing, the termination agreements and the assignment,
            as the case may be, with respect to the loan agreements as set forth
            in Section 2.3.1 herein shall be duly executed by the relevant
            parties thereto;

      9.3.4 At the Second Closing, the amended and restated Ancillary Agreements
            as set forth in Section 2.3.3 herein shall be duly executed by the
            relevant parties thereto;

      9.3.5 At the Second Closing, the Parties shall duly execute and submit to
            each other the waiver letter in accordance with Section 2.4 hereof;

      9.3.6 At the First Closing, the transfer deeds described in Section 3
            hereof shall be duly executed;

      9.3.7 At the First Closing, the Parties shall provide that a report to the
            Israeli Registrar of the Companies ready for immediate filing in a
            mutually agreeable form, contemplating the transfer of 490,000
            ordinary shares of JV Ltd. from Saifun to Infineon is executed.

      9.3.8 At the First Closing, the Parties shall pass a resolution of the
            Board of Directors and of the shareholders of JV Ltd. in the form
            attached as Exhibit 9.3.8 hereto approving the transactions
            contemplated herein.

      9.3.9 At the First Closing, the Parties shall procure that (i) the
            managing directors of JV GmbH are immediately notified of the
            transfer pursuant to Sec. 16 GmbHG and that (ii) the filing of the
            transfer of the limited partnership interest in JV KG is duly
            executed in front of a notary and (iii) filed in due course for
            registration with the commercial register.

      9.3.10 At the Second Closing, each of Saifun shall confirm the execution
            of its undertakings according to Section 5.9.

      9.3.11 At the First Closing, the termination agreements with respect to
            the Ancillary Agreements pertaining to JV Companies as set forth in
            Section 5.10 herein shall be duly executed by the relevant parties
            thereto;

      9.3.12 At the Second Closing, in the event that all required consents for
            the transfer of the Saifun Shares have been granted, the ownership
            in the Saifun Shares shall be validly transferred and the respective
            share

                                      -11-
<PAGE>

             certificates, if any, shall be delivered to Infineon; for the
             avoidance of doubt, this Section 9.3.12 is not a precondition to
             Second Closing; and

      9.3.13 At the First Closing, Saifun shall cause the dismissal or
             resignation of the directors or equivalent board and management
             members of the JV Companies appointed by or otherwise representing
             Saifun listed in Exhibit 9.3.13.

9.4   Within two (2) weeks following Second Closing, Infineon will cause JV Ltd.
      to pay to Saifun any outstanding amounts due under the Basic Agreement on
      Development Order and any other accounts payable when due.

9.5   Saifun shall deliver as soon as practical after the transfer of the Saifun
      Shares to Infineon an updated copy of its shareholder register showing
      Infineon as the new, duly registered owner of the Saifun Shares. For the
      avoidance of doubt, this Section 9.5 is not a precondition to First or
      Second Closing.

9.6   Infineon agrees to provide Saifun with audited financial statements for
      the JV Companies for the year end 2004 (December 30, 2004) and should do
      its best reasonable efforts to provide the same by February 15, 2005.
      Saifun acknowledges that the audited financial statements may be on a
      going concern basis or on a liquidation value basis.

      Should the First Closing be effective after December 30, 2004, Infineon
      shall provide Saifun with consolidated financial statements as of the date
      of First Closing as soon as practical.

      Infineon agrees to cause its auditors to provide a letter of consent
      (including the audit letter) and a comfort letter with respect of the
      financial statements of the JV Companies to be included and disclosed in
      Saifun's registration statement.

      Saifun will bear any additional cost of Infineon's auditors with respect
      to this Section incurred only due to Saifun's requirements.

                                   SECTION 10
                               GENERAL PROVISIONS

10.1  This Agreement including any documents enclosed hereto or mentioned herein
      shall be governed by the substantive law of the Federal Republic of
      Germany, excluding its conflict of laws provisions. Notwithstanding the
      foregoing, the agreements enclosed hereto (including those under Exhibits
      2.3.2.1, 2.3.2.2 and 2.3.2.3) shall be

                                      -12-
<PAGE>

      governed by such laws as provided in each of these agreements and any
      disputes related to such agreements shall be settled as provided in each
      of these agreements.

10.2  All disputes that may arise out of or in connection with this Agreement
      including disputes regarding the validity thereof shall exclusively and
      finally be settled under the Rules of Arbitration of the International
      Chamber of Commerce, Paris by three arbitrators, appointed in accordance
      with said Rules. The third arbitrator (Chairman of the Arbitral Tribunal)
      shall be appointed by the arbitrators nominated by each Party within four
      weeks after the nomination of the second arbitrator has been confirmed by
      the International Court of Arbitration. The arbitration shall be conducted
      in the English language. The place of arbitration shall be Geneva,
      Switzerland. In as far as the said Rules do not provide procedural
      regulation, the procedural law of the Canton of Geneva shall apply.

10.3  All notices and other communications required or permitted hereunder shall
      be in the English language and unless otherwise provided herein will be
      deemed to have been duly given by delivery in person or dispatched by
      email or facsimile (both confirmed in writing by mail dispatch on the same
      or subsequent business day) to the appropriate Party's address specified
      below:

      Infineon:

      For the attention of the head of the legal department

      Michael von Eickstedt
      Infineon Technologies AG
      Sankt-Martin-Str. 53
      81669 Munich, Germany

      Saifun Ventures and Saifun:

      For the attention of the head of the finance department
      Saifun Semiconductors Ltd.
      45, Hamelache St., Poleg Industrial Park
      Netanya, Israel
      Fax: +972-9-885031

      with a copy to:

      Eitan, Pearl, Latzer & Cohen-Zedek
      Attention: Advocate Doron Latzer
      Fax: +972-9-9799001

                                      -13-
<PAGE>

      or to such other address or addresses such Party may from time to time
      designate by written notice

10.4  This Agreement will be binding upon and inure to the Parties and the
      respective successors and assignees.

10.5  Each Party shall hold and shall cause its representatives and Affiliates,
      to hold in strict confidence and not to disclose or provide any third
      party, any Confidential Information. For the purposes of this Agreement,
      "CONFIDENTIAL INFORMATION" shall mean any facts and circumstances of any
      kind which are not publicly known or do not become known publicly in
      connection with the Parties and the transactions contemplated in this
      Agreement including the existence, content and status of any negotiations
      in relation to this Agreement, the terms of this Agreement, trade and
      business secrets.

      The Parties hereto shall keep the terms of this Agreement confidential and
      shall not now or hereafter divulge these terms to any third party except

      (a)   that each party may disclose the existence, but not the terms of
            this Agreement, as is reasonably necessary for purposes of providing
            information in confidence, of the type customarily provided to
            investors and to shareholders, in the ordinary course of doing
            business; or

      (b)   with the prior written consent of the other Parties; or

      (c)   to any governmental body having jurisdiction to call therefore; or
            as required under the law or statute, rule or regulation, including
            the rules, regulations and requirements of the Securities and
            Exchange Commission.

      (d)   as otherwise may be required by law, including to legal and
            financial advisors in their capacity of advising a Party in such
            matters, provided that such advisors are subject to confidentiality
            undertakings; or

      (e)   in confidence to their own legal counsel, accountants, banks and to
            purchasers or investors who need to know this information, but (i)
            solely to the extent necessary for preparing and implementing
            certain transactions (a "TRANSACTION") and (ii) provided, however,
            such legal counsel, accountants, banks and purchaser or investors
            agree to be bound by a confidentiality obligation similar to the
            confidentiality obligation assumed by the Parties herein. For
            purposes of this Section 10.5 (e), a Transaction shall be:

                                      -14-
<PAGE>

            (1)   In the case of Saifun, Saifun's diligent preparation and
                  execution of an IPO, follow-on offerings, private placements
                  and debt financing and similar transactions; provided that in
                  the event of private placements, or debt financing or similar
                  transactions by a direct competitor of Infineon, Confidential
                  Information may be disclosed under this Section following an
                  execution of a binding undertaking, or, prior to such
                  execution with the prior written consent of Infineon which
                  shall not be unreasonably withheld; and

            (2)   [***]

      The Parties shall mutually agree on the content of a press release or
      other form of publicity relating to this Agreement.

10.6  In the event that one or several provisions of this Agreement (including
      Schedules and Exhibits) should be invalid or unenforceable or if this
      Agreement should be incomplete, the validity and enforceability of the
      other provisions of this Agreement shall not be affected thereby. In such
      case, the void, unenforceable or incomplete provision hereto shall be
      deemed replaced by such valid and enforceable provision or such provisions
      completing this Agreement which are to the extent possible in line with
      the commercial intent of this Agreement (including Schedules and Exhibits)
      as of the date hereof.

10.7  The costs required for notarization of this agreement as well as the
      Schedules and Exhibits requiring notarization shall be borne by the
      Parties in proportion to the shareholding of the respective Parties in the
      JV Companies prior to this Agreement. Other fees and expenses, in
      particular for advisors, attorneys, accountants or the like, shall be
      borne by the respective Party commissioning in such services, but not
      directly or indirectly by the JV Companies.

                  [Remainder of page intentionally left blank.]

*** Omitted pursuant to a confidential treatment request. The confidential
    information has been filed separately with the SEC.

                                      -15-
<PAGE>

The exhibits 5.2(a), 5.2(b), 5.2(c) and Schedule 1 to Exhibit 5.11 exclusively
consist of inventories and other schedules within the meaning of Section 14 of
the German Notarisation Act ("Beurkundungsgesetz"). The Notary Public hereby
confirms that these exhibits have been presented to the appeared persons for
examination. The appeared state that these annexes are present before them here
and now. The appeared persons have signed these annexes on every page. The
appeared hereby expressly declare that these annexes shall not be read out to
them.

IN WITNESS THEREOF this Notarial Deed and all its exhibits other than exhibits
5.2(a), 5.2(b), 5.2(c) and Schedule 1 to Exhibit 5.11 have been read out to the
appeared persons before me, the Notary Public, after which the appeared have
approved and signed this deed, after which I, the Notary Public, have singed as
well and have affixed my official seal; the exhibits 5.2(a), 5.2(b), 5.2(c) and
Schedule 1 to Exhibit 5.11, to which the parties have made reference in their
preceding declarations, have not been read out to the appeared persons according
to their express wish, but have been signed by the appeared persons and have
been affixed to this deed as well.

Basel, this 20th (twentieth) day of December 2004 (two thousand and four)

                                        Infineon Technologies AG

                                        /s/ [illegible]       /s/ [illegible]
                                        -------------------   -----------------

                                        Saifun Semiconductors Ltd.

                                        /s/ Igal Shany
                                        -------------------

                                        Saifun Ventures Ltd.

                                        /s/ Igal Shany
                                        -------------------

                                        Notary

Allg. Prot. Nr. 51/2004                 /s/ [illegible]
                                        -------------------

                                      -16-