Document:

Intellectual Property Transfer and License Agreement dated as of Nov 16, 2009

 Exhibit 10.2 

EXECUTION VERSION 

CONFIDENTIAL TREATMENT REQUESTED - CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE
COMMISSION. 
 *** INDICATES CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION 

INTELLECTUAL PROPERTY TRANSFER AND 

LICENSE AGREEMENT 

Among 

NXP B.V. 

Virage Logic Corporation 

And 
 VL C.V.

 Dated November 16, 2009 

 EXECUTION VERSION 

 

 Contents 
  

							
	 	 	 	 	 Page

			
		 	  Clause	 	
			
	 1
	 	  INTERPRETATION	 	3
			
	 2
	 	  TRANSFER AND LICENSE	 	10
			
	 3
	 	  TRADEMARKS	 	19
			
	 4
	 	  PRIOR AND FUTURE SELLER COMMITMENTS AND UNDERTAKINGS	 	20
			
	 5
	 	  ROYALTY	 	21
			
	 6
	 	  ROYALTY REPORTING AND AUDIT RIGHTS	 	26
			
	 7
	 	  CONFIDENTIALITY	 	28
			
	 8
	 	  REPRESENTATIONS AND WARRANTIES; DISCLAIMER	 	30
			
	 9
	 	  INFRINGEMENT INDEMNITY AND LIMITATION OF LIABILITY	 	31
			
	 10
	 	  TERM AND TERMINATION	 	34
			
	 11
	 	  ASSIGNMENT	 	34
			
	 12
	 	  APPLICABLE LAW; DISPUTE RESOLUTION PROCEDURE	 	35
			
	 13
	 	  MISCELLANEOUS	 	36
				
		 	Annexes	 		 	
				
		 	Annex A	 	Transferred IP Blocks	 	
		 	Annex B	 	Transferred IP Tools	 	
		 	Annex C	 	Transferred Software	 	
		 	Annex D	 	Transferred Patents	 	
		 	Annex E	 	CoReUse Documentation	 	
		 	Annex F	 	NXP CoReUse Trademarks	 	
		 	Annex G	 	NXP Tools	 	
		 	Annex H	 	Royalty Reporting	 	
		 	Annex I	 	Purchaser Competitors	 	
		 	Annex J	 	Seller’s Trademark Usage Guidelines	 	
		 	Annex K	 	Seller Designated Bank Account	 	
		 	Annex L	 	High Level IP Block Obligations and Restrictions	 	
		 	Annex M	 	Revenue Sharing Deductible Costs	 	
		 	Annex N	 	Patent Assignment	 	
		 	Annex O	 	Tape-Out Report	 	

  

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 EXECUTION VERSION 

 

 INTELLECTUAL PROPERTY TRANSFER AND LICENSE AGREEMENT 

THE UNDERSIGNED: 
  

	 	(1)	NXP B.V., a limited liability company incorporated under the laws of the Netherlands, with corporate seat in Eindhoven, the Netherlands, and having its
address at High Tech Campus 60, 5656 AG Eindhoven, the Netherlands, (“Seller”); 

  

	 	(2)	Virage Logic Corporation, a corporation incorporated under the laws of Delaware, USA, and having its address at 47100 Bayside Parkway, Fremont, California
94538, USA (“Purchaser”); and 

  

	 	(3)	VL C.V., a limited partnership formed under the laws of The Netherlands, the general partner of which is an Affiliate of Purchaser and all of the
outstanding equity interests of which are owned directly or indirectly by Purchaser, and having its address at 47100 Bayside Parkway, Fremont, California 94538, USA. (“VL C.V.”). 

WHEREAS: 
  

	 	(A)	Seller and Purchaser have entered into that certain Asset Purchase Agreement dated October 9, 2009 (the “Asset Purchase Agreement”)
relating to the sale and transfer to Purchaser of the Operations (as defined in the Asset Purchase Agreement) by Seller; and 

  

	 	(B)	By this Agreement, the Seller, Purchaser and VL C.V. (each a “Party” and collectively the “Parties”) wish to set out the terms and conditions
applicable to the licensing, assignment and transfer of certain materials and intellectual property among the Parties in connection with the foregoing; 

NOW THEREFORE, in consideration of the premises, and of the mutual covenants and agreements contained herein and in the Asset Purchase
Agreement and other Ancillary Agreements, the Parties hereby agree as follows: 
  

	1	INTERPRETATION 

  

	1.1	Definitions 

 When used in
this Agreement, the following capitalised terms shall have the meanings set forth below. Any capitalised term used in this Agreement but not defined herein, shall have the meaning ascribed thereto in the Asset Purchase Agreement. 

“Agreement” means this Intellectual Property Transfer and License Agreement (including all Annexes hereto), as the same
may be amended or supplemented from time to time in accordance with the provisions hereof. 
  

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 EXECUTION VERSION 

 

 “Asset Purchase Agreement” has the meaning set forth in the recitals to
this Agreement. 
 “Combination Versions” means any derivative work of a Transferred IP Block or Transferred
Software (or any derivative of such derivative) other than a Successor Version. 
 “Confidential Information”
has the meaning set forth in clause 7.1 below. 
 “CoReUse” means Seller’s certification standard for
re-usability of IP Blocks and software as set forth in Seller’s documents at the Closing Date, included by reference in Annex E hereto, as may be reasonably updated by Seller from time to time after the Closing Date. 

“Covered Products” means IC Products (including tangible products embodying High-Level IP Blocks), and software embedded
in or executed on such IC Products or designed and used for testing IC Products. 
 “Customer Activities” means
to design, have designed, make, have made, use, import, export, offer for sale, sell and/or otherwise dispose of Transferred IP IC Products and Successor and Combination Version IC Products. 

“Deductible Costs” has the meaning set forth in Section 5.2 below. 

“Divested Company” of any Person means any former Affiliate of a Person (whether such Person is now or hereafter an
Affiliate thereof) as and from the moment it no longer qualifies as an Affiliate hereunder because of a sale, conveyance, split-off, spin-off or other transfer of all or a portion of such Person’s interest in such Affiliate, or any former
unincorporated business or division of such Person (whether such business or division is now or hereafter a business of such Person) as and from the moment it is divested by the Person to a transferee that is not an Affiliate of such Person, it
being understood that a Divested Company shall include a Person, unincorporated business or division that becomes a former Affiliate, unincorporated business or division after the date of the Asset Purchase Agreement, it being further
understood that a Divested Company shall not include any Person, unincorporated business or division that becomes a former Affiliate, unincorporated business or division if at any time it was previously a Divested Company. 

“High-Level IP Block” means an IP Block or a System on Chip that contains Purchaser Licensed IP plus material added by
Seller. 
 “IC Products” mean hardware semiconductor integrated circuit wafers, chips, dies and systems, which
systems include multi-chip modules, systems in package and dies on substrate, PCB or similar material. 
  

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 EXECUTION VERSION 

 

 “Intellectual Property Rights” means copyrights, database rights, mask
work rights, semiconductor rights, design rights, trade secret rights, and all analogous and other similar rights existing under the laws of any jurisdiction in the world, and all applications and registrations for the foregoing, but specifically
excluding Patents and Trademarks. 
 “IP Block” means an electronic circuit representing a component of a larger
system on an integrated circuit. 
 “IP Block Documentation” means for each Transferred IP Block, all
documentation owned by Seller or any of its Affiliates that consists of or otherwise comprises circuit diagrams on any level of abstraction applicable, all EDA views on any level of abstraction, silicon reports or equivalent proof of silicon
validation, datasheets, release notes, application notes, training materials and other technical documents and technical files applicable to such Transferred IP Block. For the avoidance of doubt, for the *** technology, all manuals, technical
guidelines and other technical documents and technical files that are owned by Seller or any of its Affiliates are included. 

“IP Tool Documentation” means for each Transferred IP Tool, all documentation owned by Seller or any of its Affiliates
that consists of or otherwise comprises manuals, technical guidelines and other technical documents and technical files applicable to such Transferred IP Tool. 

“Library Elements” means standard cells used in the synthesis of RTL blocks that are part of the Transferred IP Blocks,
other than standard cells contained in standard cell libraries listed in any of Annex A – C hereunder. 
 “Licensed
IPRs” means any Intellectual Property Rights that are both (a) infringed by, or embodied or included in, any of the Transferred Materials as provided hereunder, and (b) owned by Seller or any of its Affiliates between the date of
the Asset Purchase Agreement and twelve (12) months following the Closing Date, other than Transferred IPRs. 

“Licensed Materials” means 
  

	 	(i)	for each Transferred IP Block, the portions of the applicable IP Block Documentation that directly relate to that Transferred IP Block and that are used by Seller or
any of its Affiliates for (but not exclusively for) the Operations as of the Closing Date; 

  

	 	(ii)	for each Transferred IP Tool, the portions of the applicable IP Tool Documentation that directly relate to that Transferred IP Tool and that are used by Seller or any
of its Affiliates for (but not exclusively for) the Operations as of the Closing Date; 

  

	 	(iii)	for each Transferred Software, the portions of the applicable Software Documentation that directly relate to that Transferred Software and that are used by Seller or
any of its Affiliates for (but not exclusively for) the Operations as of the Closing Date; and 

  

	 	(iv)	the NXP Tools; 

  

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 EXECUTION VERSION 

 

 which, for (i), (ii) and (iii) above, shall include, for example, the
applicable portions of Seller’s final IC Product documentation and documentation of subsystems (e.g., High-Level IP Blocks) that contain one or more of the Transferred IP Blocks, Transferred IP Tools or Transferred Software. 

“Licensed Patents” means the NXP Transferred Materials Patents and the NXP Successor Version Patents. 

“NXP CoReUse Trademarks” means the Trademarks listed in Annex F hereto. 

“NXP Successor Version Patents” means any claims in any Patent (including any Patent that issues on any Patent
application filed during the time frame set forth in (b) below) that are both: 
  

	 	(a)	infringed by any Successor Versions developed by or on behalf of Purchaser or the manufacture, use, import, offer for sale or sale thereof, it being
understood that in each case NXP Successor Version Patents shall not include any claims in any Patents that read on any semiconductor manufacturing process; and 

 

	 	(b)	owned by Seller or its Affiliates at any time between the date of the Asset Purchase Agreement and *** after the Closing Date. 

“NXP Tools” means the tools listed in Annex G hereto, excluding the portions thereof not owned by Seller as set forth
under the heading “Third Party IP” in Annex G.  
 “NXP Transferred Materials Patents” means
any claims in any Patent that are both: 
  

	 	(a)	infringed by any of the Transferred Materials as furnished hereunder or any or the manufacture, use, import, offer for sale thereof, it being understood
that NXP Transferred Materials Patents shall not include any claims in any Patents that read on any semiconductor manufacturing process; and 

  

	 	(b)	owned by Seller or its Affiliates as of the date of the Asset Purchase Agreement or *** thereafter. 

“Partial Combination Version” means that portion of a Combination Version that contains IP Blocks or software licensed,
or transferred or assigned by Seller hereunder. 
 “Patents” means any patents and patent applications, together
with all additions, divisions, continuations, continuations-in-part, substitutions, reissues, re-examinations, extensions, registrations, patent term extensions, supplemental protection certificates and renewals of any of the foregoing, in any
country of the world. 
 “Purchaser Competitor” means the Persons listed or otherwise described on Annex I
hereto. 
 “Purchaser Confidential Information” shall have the meaning set forth in clause 7.1. 

 

 Page 6/38 

 EXECUTION VERSION 

 

 “Purchaser Customer” shall have the meaning set forth in clause 2.4.

 “Purchaser Indemnified Version” shall have the meaning set forth in clause 9.1.1. 

“Purchaser Licensed IP” means the Transferred Materials, Transferred IPRs, Transferred Patents, Purchaser Successor
Versions, Purchaser Successor Version IPRs, the Purchaser Partial Combination Versions and the Purchaser Partial Combination Version IPRs. 

“Purchaser Partial Combination Version” means that portion of a Combination Version that contains IP Blocks or software
licensed, or transferred or assigned by Seller hereunder. For purposes of this definition only, “Combination Versions” shall refer only to those Combination Versions made by or on behalf of Purchaser or any of its Affiliates or
otherwise owned by Purchaser or any of its Affiliates. 
 “Purchaser Partial Combination Version IPRs” means any
Intellectual Property Rights and any claims in any Patents that are both (i) infringed by, or embodied or included in, any of the Purchaser Partial Combination Versions and (ii) owned by Purchaser or any of its Affiliates. 

“Purchaser Successor Version” means any Successor Version made by or on behalf of Purchaser or any of its Affiliates or
otherwise owned by Purchaser or any of its Affiliates. 
 “Purchaser Successor Version IPRs” means any
Intellectual Property Rights and any claims in any Patents that are both (i) infringed by, or embodied or included in, any of the Purchaser Successor Versions and (ii) owned by Purchaser or any of its Affiliates. 

“Purpose” shall have the meaning set forth in clause 2.4. 

“Receiving Party” shall have the meaning set forth in clause 7.1.  

“Restricted Activities” shall have the meaning set forth in clause 5.4. 

“Royalty Term” means the seven (7) year period after the Closing Date. 

“Seller Confidential Information” shall have the meaning set forth in clause 7.1.  

“Seller Indemnified Party” shall have the meaning set forth in clause 9.1.1.  

“Seller Licensed Activity” shall have the meaning set forth in clause 2.2. 

“Software Documentation” means for each Transferred Software, all documentation owned by Seller or any of its Affiliates
that consists of or otherwise comprises technical documents and technical files applicable to such Transferred Software. 
  

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 EXECUTION VERSION 

 

 “Successor and Combination Version IC Products” has the meaning set
forth in clause 2.4. 
 “Successor Versions” means any derivative work of a Transferred IP Block or Transferred
Software (or any derivative of such derivative) that contains no modifications of or improvements to such Transferred IP Block or Transferred Software, other than modifications or improvements to the extent necessary to: 

 

	 	(a)	correct bugs or similar errors; 

  

	 	(b)	adapt or port Transferred IP Blocks or Transferred Software, as applicable, to different or new production processes; 

 

	 	(c)	improve production yield or reduce manufacturing costs of Transferred IP Blocks or Transferred Software, as applicable, while retaining substantially similar
architecture and design; 

  

	 	(d)	implement a design shrink; or 

  

	 	(e)	include or support additional EDA tool views. 

“Suspension Period” shall have the meaning set forth in clause 5.4. 

“Trademarks” means trademarks, service marks, brand names, certification marks, collective marks, domain names, logos,
symbols, trade dress, trade names and other indicia of origin, and all applications and registrations for the foregoing. 

“Transferred IP Blocks” means the IP Blocks listed in Annex A hereto. 

“Transferred IP IC Products” has the meaning set forth in clause 2.4. 

“Transferred IP Tools” means the IP Block-related tools, standards and re-use enablers listed in Annex B hereto.

 “Transferred IPRs” means any Intellectual Property Rights that (x) are misappropriated or infringed by,
or embodied or included in, any of the Transferred Materials as provided hereunder, (y) are owned by Seller or any of its Affiliates as of the Closing Date and (z) are used exclusively in connection with or for the Purpose as of the Closing
Date. 
 “Transferred Materials” means: 

 

	 	(i)	(x) the Transferred IP Blocks in source code format and (y) all of the applicable IP Block Documentation that are used by Seller or any of its Affiliates in their
respective conduct of the Operations as of the Closing Date; 

  

	 	(ii)	(x) the Transferred IP Tools, (y) all code (including executable and source code) therein, and (z) all of the applicable IP Tool Documentation that are used by Seller
or any of its Affiliates in their respective conduct of the Operations as of the Closing Date; and 

  

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 EXECUTION VERSION 

 

	 	(iii)	(x) the Transferred Software and (y) all of the applicable Software Documentation that are used by Seller or any of its Affiliates in their respective conduct of the
Operations as of the Closing Date, 

 in each case other than the Licensed Materials. 

“Transferred Materials Infringement Claim” shall have the meaning set forth in clause 5.5.1. 

“Transferred Materials Infringement Claim Costs” shall have the meaning set forth in clause 5.5.1. 

“Transferred Patents” means the Patents listed in Annex D hereto. 

“Transferred Software” means the software listed in Annex C hereto. 

“US/Netherlands Treaty” means the Convention Between the United States of America and the Kingdom of the Netherlands for
the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes and Income, as amended and as in effect as of the date of this Agreement. 
  

	1.2	References 

  

	 	1.2.1	Any reference in this Agreement to a liability or obligation of Seller shall be deemed to incorporate an obligation on the part of Seller to procure that the relevant
liability is discharged or obligation is performed by Seller’s relevant Affiliates, subject to the terms set out in this Agreement. 

  

	 	1.2.2	Any reference in this Agreement to a liability or obligation of Purchaser or VL C.V. shall be deemed to incorporate an obligation on the part of Purchaser or VL C.V. to
procure that the relevant liability is discharged or obligation is performed by Purchaser’s or VL C.V.’s relevant Affiliates (including, in the case of Purchaser, VL C.V.), subject to the terms set out in this Agreement.

  

	 	1.2.3	Any reference in this Agreement to a license granted to Seller shall be deemed to incorporate the same license to Seller’s relevant Affiliates, subject to the
terms set out in this Agreement. 

  

	 	1.2.4	Any reference in this Agreement to a license granted, or required to be granted pursuant to clause 2.2(e), to Purchaser or VL C.V. shall be deemed to incorporate the
same license to Purchaser’s Affiliates, subject to the terms set out in this Agreement. 

	 	1.2.5	Whenever used in this Agreement, the words “include”, “includes” and “including” and variations thereof shall not be deemed to be terms of
limitation, and shall be deemed to be followed by the words “without limitation”. 

  

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 EXECUTION VERSION 

 

	1.3	Drafting party 

 No
provision of this Agreement shall be interpreted against a Party solely as a result of the fact that such Party was responsible for the drafting of such provision, it being acknowledged that the Parties and representatives of the Parties have
participated in the drafting and negotiating of this Agreement. 
  

	1.4	Headings and references 

The clause and paragraph headings and table of contents contained in this Agreement are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement. 
  

	2	TRANSFER AND LICENSE 

  

	2.1	Transferred Materials, IPRs and Patents 

Subject to the terms and conditions of this Agreement, Seller hereby assigns, transfers and conveys to VL C.V. the Transferred Materials,
the Transferred IPRs and the Transferred Patents, and VL C.V. hereby accepts the assignment of the Transferred Materials, Transferred IPRs and Transferred Patents. 
  

	2.2	License Back 

  

	 	(a)	VL C.V. hereby grants to Seller a non-exclusive, irrevocable, perpetual, nonterminable, world-wide, royalty-free (except pursuant to clause 2.2(b)(iii) below) and
fully-paid up (except pursuant to clause 2.2(b)(iii) below) license, without the right to sublicense except as expressly set forth in clauses 2.2(b), (c) and (d) below, to and under the Purchaser Licensed IP to: 

 

	 	(i)	as applicable, use, have used, modify, have modified, improve, have improved, create and have created derivative works thereof; 

 

	 	(ii)	manufacture, have manufactured, make, have made, design, have designed and use Covered Products; 

 

	 	(iii)	offer to sell, sell, have sold, import, have imported, export, have exported, copy, have copied, distribute or otherwise dispose of IC Products included in such Covered
Products; and 

  

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 EXECUTION VERSION 

 

	 	(iv)	offer to license, have licensed and license, import, have imported, export, have exported, copy and have copied High-Level IP Blocks or any software included in such
Covered Products. 

 For the avoidance of doubt, all “have” rights set forth in this clause (a) are
limited to the right to have third parties, including contract manufacturers, use such rights solely on behalf of Seller or any of its Affiliates or any of their respective permitted sublicensees. On a quarterly basis (for the duration of the
Services Period (as defined in the Technology Services Agreement) and to the extent not previously delivered, Purchaser, at its own expense, shall deliver to Seller the source code portions of any software included in the Purchaser Licensed IP. The
source code shall include updated schematics (to the extent schematics were originally provided by Seller to VL C.V.), along with fully documented human-readable source code, including programmer’s notes, flow charts, logic diagrams and other
such materials and documentation, in each case to the extent available. For the avoidance of doubt, Seller shall be entitled to sublicense and deliver to any sublicensee permitted by this Agreement, the source code and related materials described in
the previous two sentences, and to grant to such sublicensee a sublicense to such source code and materials consistent with the rights set forth in clause 2.2(a)(i) through (iv) above, but limited to the scope of such sublicense (including as
required by clause 2.2(c) below, as applicable). 
  

	 	(b)	Subject to the restrictions set forth in clause 2.2(d) below, Seller shall have the right to sublicense: 

 

	 	(i)	all or part of the rights set forth in clause (a) above to Divested Companies of Seller at the applicable time of such divestment (or a direct or indirect parent
company thereof (for use solely with respect to the Divested Company as provided herein)) (subject to the restrictions set forth below in clause 2.2(c) below), including the right to further sublicense in accordance with clause 2.2(b)(iii) below;

  

	 	(ii)	all or part of the rights set forth in clause 2.2(a) above solely with respect to *** to third parties in connection with *** or similar programs or *** programs in
which Seller or any of its Affiliates is or may be a participant from time to time, whether now or in the future, to the extent such licenses are required as a condition to participation in such programs and such sublicensed third parties have no
right to *** without reference to or use in the applicable ***; 

  

	 	(iii)	 all or part of the rights set forth in clause 2.2(a) above solely with respect to *** to third parties, subject to the payment and other obligations
set forth in Annex L hereto), it being understood that such third parties shall have the 

  

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 EXECUTION VERSION 

 

	 	 
right to use, have used, modify, have modified, improve, have improved, create and have created ***, manufacture, have manufactured, make, have made, design, have designed and use ***, and to
offer to sell, sell, have sold, import, have imported, export, have exported, copy, have copied, distribute or otherwise dispose of such *** and such sublicensed third parties have no right to *** without reference to or use in the applicable ***;

  

	 	(iv)	all or part of the rights set forth in clause 2.2(a) above in the event of and following an uncured material breach by Purchaser of any material delivery milestone,
material breach of Support Services obligations with respect to Critical Error Corrections (each as defined in the Technology Services Agreement) or material breach of express breach of warranty remedy, in each case under the Technology Services
Agreement or a Statement of Work thereto, that is not cured within sixty (60) days after the conclusion of the breach resolution procedures set forth in Section 8.2.1 of the Technology Services Agreement; 

 

	 	(v)	all or part of the rights set forth in clause 2.2(a) above in the event of and following an uncured material breach by Purchaser of any material delivery milestone,
material breach of Support Services obligation with respect to Critical Error Corrections or material breach of express breach of warranty remedy, in each case under the Services Agreement or a Statement of Work thereto, that is not cured within one
(1) day after the conclusion of the breach resolution procedures set forth in Section 8.2.1 of the Technology Services Agreement, but solely to enable Seller or any of its Affiliates to engage a third party to provide services to Seller or
any of its Affiliates solely with respect to the Deliverable(s) that are the subject of such uncured material breach and provided that, in the event that Purchaser cures such material breach within sixty (60) days after the conclusion of the
breach resolution procedures set forth in Section 8.2.1 of the Technology Services Agreement, Seller’s right to sublicense and any sublicense granted under this clause 2.2(b)(v) shall automatically terminate after the completion of such
services by such third party; and 

  

	 	(vi)	*** and *** insofar as the Purchaser Licensed IP constitutes Deliverables (as defined in the Technology Services Agreement) that Seller is required to provide to ***,
as applicable, pursuant to that certain *** and the ***, each in effect as of *** 

  

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 EXECUTION VERSION 

 

 The rights in clause 2.2(b)(i) above shall be further sublicensable one (1) time
only by one (1) Divested Company of Seller relating to all or part of Seller’s *** (such right to further sublicense to be granted at the time of divestment of *** solely to a Divested Company of *** at the time of such divestment (as such
Divested Company may organically grow or change from time to time), provided that such further sublicense contains the restrictions set forth in clauses 2.2(c)(i) and c(iii) below and is otherwise in compliance with all of the requirements
set forth in this clause 2.2 (including clause 2.2(d) below and Annex L hereto). Any Divested Company sublicense will be transferable or assignable, in whole but not in part, to any Affiliate of the sublicensee or to a third party as part of a
merger, acquisition or sale of such sublicensee or substantially all of the business or assets of sublicensee related to the subject matter of this Agreement, as long as the third party involved in such a merger, acquisition or sale is not a
Purchaser Competitor and provided that such Affiliate or third party, as applicable, agrees in writing to be bound by all of the terms, conditions and provisions contained in the applicable sublicense agreement required pursuant to clause
(d) below. 
  

					
	   (c)
	 	 (i)
	 	 Except as set forth in clause 2.2(c)(ii) below, for each sublicense to or with respect to a Divested Company of Seller or a Divested Company of ***
permitted pursuant to clause 2.2(b) above, such sublicense shall be limited to exercising the rights in clauses 2.2(a)(i), (ii) and (iii) above only with respect to

 

	 	(I)	IC Products that have been Taped Out, IC Products under development, and High-Level IP Blocks and software of such Divested Company in existence, in each case as of the
date of divestiture, 

  

	 	(II)	any future IC Products, High-Level IP Blocks or software on then-current roadmaps of such Divested Company as of the date of divestiture, and 

 

	 	(III)	any derivatives or natural successors of the items specified in 2.2(c)(i)(I) and (II) above. 

 

	 	(ii)	In the event that Seller grants a sublicense to or with respect to *** under clause 2.2(b) above, such sublicense shall not be subject to the restrictions set forth in
clause 2.2(c)(i) above; provided, however, that the permitted one (1) time further sublicense by *** to a Divested Company of *** shall be subject to the restrictions set forth in clause 2.2(c)(i) above. 

 

	 	(iii)	Except as set forth in clause (c)(iv) below, no sublicense granted to a Divested Company pursuant to clause (i) or clause (ii) shall extend to any Person,
business, operation or activity with which any such Divested Company becomes combined or is merged. 

  

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 EXECUTION VERSION 

 

	 	(iv)	Notwithstanding clause (c)(iii) above, for so long as Seller does not *** to *** of the ***, if the *** on *** is *** set forth in the *** thereto or *** as long as no
other Person (other than controlled Affiliates of *** or Seller) is a *** and Seller (it being understood that, ***, the *** is the *** for purposes of this Agreement), Seller may enter into agreements extending the sublicense granted with
respect to *** to any Person, business, operation or activity with which *** is combined or is merged, but solely for the purpose of conducting the business of *** (and not for any other purpose). With respect to all other Divested Company
sublicenses hereunder, Purchaser shall consider in good faith any request by Seller to have the sublicense with respect to the applicable Divested Company extended to any Person, business, operation or activity with respect to which such Divested
Company is combined or is merged, but solely for the purpose of conducting the business of such Divested Company (and not for any other purpose). 

  

	 	(d)	Each sublicense granted under clause 2.2(b) shall be subject to a written sublicense agreement under which each sublicensee shall agree to the scope of sublicense and
the restrictions and other obligations set forth in this Agreement applicable to the rights sublicensed, including the applicable express restrictions referenced in clause 2.2 (c)(iii) and (c)(iv) above, and each such sublicense agreement shall

  

	 	(i)	be governed by the same governing law and dispute resolution procedures and venue as set forth in this Agreement, and 

 

	 	(ii)	require that Purchaser be copied on all notices provided under such sublicense agreement. 

Any such sublicense agreement shall also contain the terms and conditions set forth in clause 2.2(f) below and, if applicable, Annex L
hereto. Seller shall advise Purchaser in writing of each such sublicense and provide Purchaser with a copy of each sublicense agreement and any amendment or other modification thereto within thirty (30) days of execution of same. Further, each
sublicense agreement with or with respect to a Divested Company (not including the sublicense agreement with *** but including the sublicense agreement executed in connection with the exercise of *** of its

  

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permitted one (1) time further sublicense to a Divested Company of *** shall require such Divested Company to provide Purchaser with a copy of the roadmap applicable to such sublicense upon
the written request of Purchaser. Any roadmap provided hereunder shall be kept strictly confidential in files of Purchaser’s CEO and/or Vice President of Engineering marked “Highly Confidential” and access thereto and use thereof
shall be restricted solely for the purposes of determining whether the scope of the sublicense to, or the exercise of the sublicense by, the applicable Divested Company has been exceeded. Purchaser and VL C.V. agree that Seller shall have no
liability for any acts or omissions of its permitted sublicensees; provided that as a condition to Seller’s ability to sublicense its rights hereunder and its sublicensees’ ability to sublicense their permitted sublicensees, Seller
agrees, and Seller shall cause each of its sublicensees hereunder to be obligated in writing to agree, in the applicable written sublicense agreement between Seller and such sublicensee, that Purchaser shall be expressly named as an intended third
party beneficiary of any such sublicense in the applicable sublicense agreement with the express right to enforce such sublicense agreement in accordance with its terms. 

 

	 	(e)	As among the Parties, Seller shall exclusively own and retain all right, title and interest in and to any modifications, improvements, updates and derivative works of
the Purchaser Licensed IP (other than any Patents included therein) developed by or on behalf of Seller, any of its Affiliates or any sublicensee hereunder; provided, however, that with respect to any claims in any Patent owned by Seller or
any of its Affiliates at any time after the Closing Date that read on or are directed towards any such modifications, improvements, updates or derivative works that are developed by or on behalf of Seller or any of its Affiliates, Seller shall
automatically grant, and hereby does grant, without any additional requirement, including execution of a separate license agreement, to VL C.V. a license under all such claims, which license shall be of the same scope and for the same purposes as
the license granted in clause 2.5 below, and for the avoidance of doubt, all such claims shall be deemed licensed to VL C.V. under clause 2.5 below. The sublicense rights set forth herein shall be subject to the applicable sublicensee automatically
granting to VL C.V., ab initio, without any additional requirement, including execution of a separate license agreement, a license under any claims in any Patent owned by such sublicensee at any time after the date such sublicense is granted
to such sublicensee, that read on or are directed towards any modifications, improvements, updates or derivative works of the Purchaser Licensed IP made by or on behalf of such sublicensee, which license shall be of the same scope and for the same
purposes as the license granted in clause 2.5 below. 

  

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	   (f)
	 	 (i)
	 	 No licensee or sublicensee under this Agreement shall delete or in any manner alter any intellectual property rights notices of Purchaser or its
suppliers, if any, appearing on the Purchaser Licensed IP. Each such licensee and sublicensee shall reproduce such notices in a substantially similar manner on each copy it makes of any Purchaser Licensed IP.

 

	 	(ii)	Each licensee and sublicensee under this Agreement shall identify Purchaser on semiconductor manufacturers’ declaration forms as a licensor of the intellectual
property owned by Purchaser embodied in the Purchaser Licensed IP that is contained in such licensee’s or sublicensee’s products as produced by its semiconductor manufacturer(s). Each such licensee and sublicensee shall execute such
declaration as provided by each such semiconductor manufacturer to document the content of the Purchaser Licensed IP in such products. Upon Purchaser’s request, the applicable licensee or sublicensee shall authorize the applicable semiconductor
manufacturer to provide information directly to Purchaser documenting the content of the Purchaser Licensed IP in such products. 

  

	 	(iii)	Each licensee under this Agreement acknowledges and agrees, and each sublicensee under this Agreement shall acknowledge and agree in the applicable sublicense
agreement, that (I) certain output generated by or on behalf of such licensee or sublicensee through use of certain Purchaser Licensed IP licensed to it hereunder may contain information that complies with the Virtual Component Identification
Physical Tagging Standard (VCID) as maintained by the Virtual Socket Interface Alliance (VSIA), (II) such information may be expressed in GDSII Layer 63 or other such layer designated by Purchaser, the VSIA, and hardware definition languages, or
other formats, and (III) it is not authorized to, and it shall not, alter or change any such information. 

  

	 	(iv)	In the event a semiconductor manufacturer is manufacturing integrated circuits for any licensee or sublicensee using any of the Purchaser Licensed IP, each such
licensee and sublicensee shall provide to Purchaser reports once per quarter setting forth, for the previous quarter, the project tracking number used by the semiconductor manufacturer to identify Tape Outs (as defined in the Master License
Agreement) completed in such quarter using such Purchaser Licensed IP. The reports shall be sent via email to tapeout@viragelogic.com; provided, however, that Licensee may deliver such reports through the Steering Committee (as defined in the
Technology Services Agreement). A sample form of such report is included as Annex O hereto. 

  

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	2.3	Effectuation 

 Seller will
execute and deliver all files, assignments (including the Patent assignment set forth in Annex N hereto), and titles, evidence or authorisations as may be required to vest, perfect, confirm, effectuate or to formalise the assignment, transfer and
conveyance of the Transferred Materials, Transferred IPRs and Transferred Patents to VL C.V. Any other aspects concerning delivery by Seller of Transferred Materials, Transferred IPRs and Transferred Patents to VL C.V. shall be governed by the
Umbrella Transitional Services Agreement. 
  

	2.4	Licensed Materials and IPRs 

Subject to the terms and conditions of this Agreement (including clause 2.8), Seller hereby grants to VL C.V. a personal, non-exclusive,
non-transferable (except as set forth in clause 11), perpetual, irrevocable, non-terminable, world-wide, royalty-free and fully paid-up license under the Licensed Materials and Licensed IPRs only for the purpose of the following (the following being
referred to as the “Licensed Activities”), in each case only in connection with CMOS silicon wafer manufacturing processes with a design rule of ninety (90) nanometers and smaller (and IC Products resulting from such processes)
(the “Purpose”) and for no other purpose or use: 
  

	 	(a)	promoting, licensing, supplying, and providing maintenance and support services regarding, the Transferred IP Blocks and Transferred Software to Purchaser’s
downstream customers (each, a “Purchaser Customer”) (provided that these Purchaser Customers will be bound by confidentiality agreements no less restrictive than Purchaser’s confidentiality obligations hereunder) solely to enable such
customers to design, have designed, make, have made, use, import, export, offer for sale, sell or otherwise dispose of those portions of IC Products that contain Transferred IP Blocks or Transferred Software (such portions, the “Transferred IP
IC Products”); 

  

	 	(b)	developing Successor Versions and Partial Combinations Versions; 

  

	 	(c)	promoting, (sub)licensing, supplying, and providing maintenance and support services regarding, Successor Versions and Partial Combination Versions to Purchaser
Customers (provided that these Purchaser Customers will be bound by confidentiality agreements no less restrictive than Purchaser’s confidentiality obligations hereunder) solely to enable such customers to design, have designed, make, have
made, use, import, export, offer for sale, sell and/or otherwise dispose of those portions of IC Products that contain Successor Versions or Partial Combination Versions (such portions, the “Successor and Combination IC Products”);

  

	 	(d)	using the Transferred IP Tools, and derivative works thereof, and the NXP Tools and other Licensed Materials related to the NXP Tools to configure Transferred IP
Blocks and any Successor Versions and Partial Combination Versions; and 

  

	 	(e)	using the CoReUse standard and the Qcore tool, both identified in Annex G hereto, to qualify Transferred IP Blocks and any Successor Versions and Partial
Combination Versions as CoReUse-compliant in accordance with Seller’s guidelines referenced in Annex D. 

  

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	2.5	Patent License 

 Subject
to the terms and conditions of this Agreement (including clause 2.8), Seller hereby grants to VL C.V. a personal, non-exclusive, non-transferable (except as set forth in clause 11), perpetual, irrevocable, non-terminable, world-wide, royalty-free
and fully paid-up license under the Licensed Patents solely for the conduct of any of the Licensed Activities. 
  

	2.6	No obligation 

 For the
avoidance of doubt, Seller shall have no obligation under this Agreement to maintain or support after the Closing Date any of the items licensed or transferred by Seller or its Affiliates pursuant to this Agreement, including: (i) Transferred
Materials; (ii) Transferred IPRs; (iii) Transferred Patents; (iv) Licensed IPRs; (v) NXP Transferred Materials Patents; or (vi) NXP Successor Version Patents. 

 

	2.7	Delivery 

 Seller or one
or more of its Affiliates shall, upon the request of Purchaser, deliver the Licensed Materials to VL C.V. in accordance with the Umbrella Transitional Services Agreement, provided that Seller and its Affiliates shall have no obligation to
deliver any Licensed Materials hereunder to the extent that such Licensed Materials have been previously delivered to VL C.V. 
  

	2.8	Ownership; no other rights 

Seller (or its Affiliates as the case may be) retains all rights, title and interest in and to the Licensed Materials (including any
copies thereof and whether separate or combined with any other products), Licensed IPRs and Licensed Patents, and no ownership in or to the Licensed Materials, Licensed IPRs or Licensed Patents is transferred pursuant to this Agreement. Further, in
no event shall the licenses granted under clauses 2.4 and 2.5 above, or any other provision of this Agreement, be construed as granting Purchaser (or its Affiliates), expressly or by implication, estoppel or otherwise, any right or license to use
any of Seller’s (or any of its Affiliates’) Patents, technology or intellectual property rights other than those licenses to the Licensed Materials, Licensed IPRs and Licensed Patents to the extent expressly granted under clauses 2.4 and
2.5 above. 
  

	2.9	IP Blocks 

Notwithstanding anything herein to the contrary, it is understood and agreed that (x) unless otherwise specified on Annex A, B or C
hereto, sub-blocks, components or other constituent parts of those Transferred IP Blocks, Transferred IP Tools or Transferred Software that form part of 

 

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Transferred Materials, and the Transferred IPRs pertaining thereto, do not constitute part of such Transferred Materials or Transferred IPRs and are not being transferred or assigned hereunder
and (y) unless otherwise specified on Annex A, sub-blocks, components or other constituent parts of the Transferred IP Blocks that constitute Library Elements and the Licensed IPRs and the Licensed Patents pertaining thereto, taken in isolation
and without reference to or use in any such Transferred IP Block or Successor Version or Partial Combination Version relating thereto, are not being licensed hereunder. 

Notwithstanding the foregoing in this clause 2.9, Purchaser shall be free, and Seller hereby grants to Purchaser, the right to use for any
purpose the ***; provided however that Purchaser shall maintain the confidentiality of the Library Elements to the extent required under this Agreement. For the purpose of this clause 2.9, *** means *** in the *** of *** have had *** such *** by
such *** to *** such *** However, this clause 2.9 does not grant Purchaser any rights under any Intellectual Property Rights or Patents of Seller or its Affiliates. 
  

	2.10	Open Source 

 The license
granted to VL C.V. hereunder does not include the right to license, and neither Purchaser nor VL C.V. shall perform any actions in a manner that would require any software included in the Licensed IPRs or otherwise licensed hereunder to VL C.V., in
whole or in part, or any derivative work thereof to be licensed, under Open License Terms. 
  

	3	TRADEMARKS 

  

	3.1	License 

 Subject to the
terms and conditions of this Agreement, Seller hereby grants to Purchaser and to VL C.V. a personal, non-exclusive, non-transferable (except as set forth in clause 11 below), perpetual, irrevocable, worldwide, royalty-free, fully paid-up license to
use the NXP CoReUse Trademarks for the sole purpose of promoting, sublicensing, supplying, and providing maintenance and support services regarding, all in accordance with clause 2.4 above, the Transferred IP Blocks that have been certified by
Seller as CoReUse compliant at the Closing Date, as indicated in Annex A hereto and with respect to which such certification has not subsequently been withdrawn, it being understood that Seller may only withdraw such certification upon ninety
(90) days’ prior written notice to Purchaser. 
  

	3.2	Usage guidelines 

 The
license granted under clause 3.1 above is subject to Purchaser’s and VL C.V.’s strict compliance with Seller’s standard Trademark usage guidelines (the version of which effective as 

 

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 of the Closing Date is attached as Annex J hereto), as they may be amended or modified
from time to time by Seller upon ninety (90) days’ prior written notice to Purchaser. Seller reserves the right to practice reasonable quality control with regard to Purchaser’s and VL C.V.’s use of the NXP CoReUse Trademarks and
any products and services marketed, sold or licensed by Purchaser or VL C.V. thereunder. 
  

	3.3	Ownership and no other license 

Purchaser and VL C.V. each acknowledges and agrees that: 
  

	 	(i)	all rights in and to the NXP CoReUse Trademarks are retained by Seller; 

  

	 	(ii)	Neither Purchaser nor VL C.V. will, now or in the future, contest the validity of the NXP CoReUse Trademarks; 

 

	 	(iii)	nothing in this Agreement will transfer ownership of the NXP CoReUse Trademarks; and 

 

	 	(iv)	Purchaser’s and VL C.V.’s respective use of the NXP CoReUse Trademarks will not create in either of them, nor will either of them represent it has, any right,
title or interest in or to the NXP CoReUse Trademarks other than the license expressly granted under clause 3.1 above, and all such use and goodwill associated thereby will inure to the benefit of Seller. 

 

	3.4	NXP mark restrictions 

Neither Purchaser nor VL C.V. shall make use of the word “NXP”, alone or in combination with another sign, as a trademark,
service mark, trade name or domain name or in any other way, and neither Purchaser nor VL C.V. shall make use of any other commercial or corporate indicia retained by Seller, except for the NXP CoReUse Trademarks in accordance with this clause 3.
Notwithstanding the foregoing or anything else in this Agreement to the contrary, Purchaser and VL C.V. shall have the right to use the word “NXP” and other commercial or corporate indicia retained by Seller as reasonably required to
describe the Transactions in connection with securities and other regulatory filings with any Governmental Authority. 
  

	4	PRIOR AND FUTURE SELLER COMMITMENTS AND UNDERTAKINGS 

All assignments, transfers and licenses to Purchaser or VL C.V. will be subject to all prior commitments and undertakings of Seller and/or
its Affiliates and to all commitments and undertakings set forth in clause 2.2. 
 Seller acknowledges and agrees that any
license, assignment, transfer or other grant of any rights to the Licensed IPRs, Licensed Materials, Licensed Patents and/or NXP CoReUse Trademarks by Seller or any of its Affiliates to any third party shall be subject to the rights granted to
either Purchaser or VL C.V. or both hereunder. 
  

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	5	ROYALTY 

  

	5.1	Royalty on Transferred Materials 

Purchaser will pay Seller a royalty of *** percent (***%) of all amounts received (including the fair market value of non-cash
consideration) by or on behalf of Purchaser or any of its Affiliates during the Royalty Term (or amounts invoiced during the Royalty Term and later received) in respect of the licensing of the Transferred Materials, in the exact form provided by
Seller to VL C.V. under this Agreement, to parties other than Purchaser or its Affiliates or Seller or its Affiliates. 
  

	5.2	Royalty on Successor Versions 

Purchaser will pay Seller a royalty of *** percent (***%) of (i) all amounts received (including the fair market value of
non-cash consideration) by or on behalf of Purchaser or any of its Affiliates during the Royalty Term (or amounts invoiced during the Royalty Term and later received) in respect of the licensing of any Successor Versions to parties other than
Purchaser or its Affiliates or Seller or its Affiliates, minus (ii) any costs and expenses *** by Seller or a third party) *** (the “Deductible Costs”). It is furthermore expressly understood that only a *** percent
(***%) deduction of such Deductible Costs will be applied in connection with modifications to Successor Versions that are designed to *** by or on behalf of ***. 
  

	5.3	Royalty on Combination Versions 

Purchaser will pay Seller a royalty of *** percent (***%) of all Allocable Combination Version Revenue received by or on behalf of
Purchaser or any of its Affiliates during the Royalty Term (or amounts invoiced during the Royalty Term and later received) in respect of the licensing of any Combination Version to parties other than Purchaser or its Affiliates or Seller or its
Affiliates. 
 For the purposes of this Section 5.3, “Allocable Combination Version Revenue” means amounts
received (including the fair market value of non-cash consideration) by or on behalf of Purchaser or any of its Affiliates on the Partial Combination Version portion of each Combination Version, calculated as follows: 

 

	 	(i)	 where such Partial Combination Version portion of such Combination Version constitutes Transferred Materials in the exact form provided by Seller to VL
C.V. under this 

  

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Agreement, the Allocable Combination Version Revenue shall be determined by multiplying the amounts received by or on behalf of Purchaser or any of its Affiliates from the licensing of such
Combination Version by the fraction *** where *** is Purchaser’s *** of *** of *** when *** and *** is the *** of the *** of *** that does not constitute a *** and 

 

	 	(ii)	where such Partial Combination Version portion of such Combination Version constitutes a Successor Version, the Allocable Combination Version Revenue shall be
determined by multiplying the revenue received by or on behalf of Purchaser or any of its Affiliates from the licensing of such Combination Version by the fraction *** where *** is Purchaser’s *** of *** of *** when *** (and after deduction of
the Deductible Costs in accordance with clause 5.2 above) and *** is the *** of the *** of *** that does not constitute a *** 

  

	5.4	Royalty Suspension (Restricted Activities) 

In the event that Seller or any of its Affiliates at any time during the Royalty Term licenses on a commercial basis electronic circuit
modules and related technology, software and tools for the design, maintenance, support, and manufacturing of IC Products with baseline CMOS (90 nanometres and smaller) technology that offer substantially the same functionality as any Transferred
Materials, Successor Versions or Partial Combination Version portion of Combination Versions (“Restricted Activities”), then during the time that Seller or any of its Affiliates is engaged in any such Restricted Activity (such time,
the “Suspension Period”), Purchaser shall have no obligation 
  

	 	(i)	to pay Seller any royalties under this clause 5 with respect to any amounts invoiced during the Suspension Period with respect to the Transferred Materials, Successor
Versions or Combination Versions, as applicable, that are subject to the Restricted Activity in which Seller or any of its Affiliates is then engaging or 

  

	 	(ii)	to make any payment to Seller pursuant to clause 5.6 below in connection with the sale, transfer of title, or assignment of ownership during the Suspension Period of
any of the Transferred Materials, Successor Versions or Combination Versions, as applicable, that are subject to the Restricted Activity in which Seller or any of its Affiliates is then engaging. 

It is understood and agreed that neither Seller nor any of its Affiliates will be deemed to be engaged in a Restricted Activity with
respect to licenses regarding which neither Seller nor any of its Affiliates are entitled to receive any further revenues therefrom or attributable thereto. For purpose of this clause 5.4, “commercial basis” shall not include Seller’s
or any of Seller’s Affiliates’ engagement in High Level IP Block licensing as set forth in clause 2.2 above, as long as Seller and each of its Affiliates is in material compliance with its payment obligations under Annex L hereto.

  

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	5.5	Royalty Off-setting (Transferred Materials Infringement Claims) 

  

	 	5.5.1	In the event that during the Royalty Term a claim, lawsuit or other legal proceeding is brought by a third party against Purchaser or any Purchaser Customer, to the
extent Purchaser is required to defend such customers, which and to the extent is based on a claim that the unmodified Transferred Materials and/or unmodified portion of Transferred Materials or Transferred Materials contained in a Successor Version
or Combination Version infringes a copyright, Patent or other Intellectual Property Right of a third party (“Transferred Materials Infringement Claim”), then, without prejudice to Seller’s obligation to defend and indemnify
Purchaser under Section 8.2 of the Asset Purchase Agreement, *** subject to clause 5.5.2 below, Purchaser may set-off payment of the royalties due to Seller under this clause 5 to use such royalties as a share of the cost of litigation and
activities conducted in connection with the analysis and defense of such claim (including reasonable attorneys’ fees, settlement costs and damage awards) and such other costs incurred in connection with clause 5.5.2 (including costs and
expenses attributable to any mitigation steps undertaken by Purchaser, such as, without limitation, acquiring a license to the asserted copyright(s), Patent(s) and/or other Intellectual Property Rights or developing a non-infringing modification or
replacement of the applicable Transferred Materials) solely, in each case, to the extent directly attributable to such Transferred Materials Infringement Claim (such costs together the “Transferred Materials Infringement Claim
Costs”). Notwithstanding anything herein to the contrary, nothing in this clause 5.5 is nor shall be construed to be *** of any kind for *** or any other *** 

 

	 	5.5.2	At any time that Purchaser sets-off the royalty payments pursuant to this clause 5.5, Purchaser and Seller agree that, in each such case, the following conditions shall
apply: 

  

	 	(a)	Purchaser shall deliver prior written notice to Seller of any actual or threatened Transferred Materials Infringement Claim with sufficient detail stating the
justification for setting-off the royalty payments including without limitation the third party claimant, the specific claims and the specific Transferred Materials that are subject to the claims, and shall include a copy of the lawsuit, complaint
or administrative proceeding notice of action. 

  

	 	(b)	 Purchaser and Seller shall discuss in good faith how to mitigate costs and damages and how to best address and amicably resolve such Transferred

  

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Materials Infringement Claim and what alternatives are reasonably available to achieve this, such as, by way of example, obtaining from any third party the necessary rights and licenses for the
Parties to continue to enjoy the benefits of this Agreement or modification or replacement of any of the Transferred Materials or portion thereof so that these become non-infringing while giving substantially equivalent performance or, when no such
alternative is reasonably available, how to reasonably support each other free of charge in the defense or settlement of such Transferred Materials Infringement Claim. Purchaser shall, if and to the extent obtained for the benefit of any Purchaser
Customer, obtain a release of liability of Seller and its Affiliates relating to such Transferred Materials Infringement Claim and a license for Seller and its Affiliates for the continued use of such Transferred Materials. Purchaser shall have the
right to control the defense and settlement of such Transferred Materials Infringement Claim, provided that, subject to clause 5.5.2(c) below, Seller shall have the right to meaningfully participate in (directly and through counsel of its own
choosing and at its sole cost) the strategies, tactics and direction of such defense and settlement relating to such Transferred Materials Infringement Claim. Purchaser shall not have the right to set-off the royalty payments if Seller is denied the
right to so participate in such defense and settlement. 

  

	 	(c)	Seller shall have the right to receive copies of all pleadings, notices, communications and other information with respect to the third-party lawsuit and proceedings,
and Purchaser shall inform Seller of any settlement discussions with respect to the third-party actions or claims. Notwithstanding the foregoing, Purchaser shall have no obligation to provide any document or information to Seller that is subject to
a protective order restricting such disclosure or is covered by attorney-client, attorney work product or similar privileges. 

  

	 	(d)	Seller shall reasonably cooperate with Purchaser with respect to the defense and settlement of the Transferred Materials Infringement Claims, including providing
documents and information that are relevant to such Transferred Materials Infringement Claims, and making its employees, if relevant, available on a mutually convenient basis to provide additional information and explanation of such documents
provided hereunder. Notwithstanding the foregoing, Seller shall have no obligation to provide any document or information to Purchaser that is subject to a protective order restricting such disclosure or is covered by attorney-client, attorney work
product or similar privileges. 

  

	 	(e)	In the event that any *** related to *** under *** of the *** set forth in *** of the ***, shall be applicable to such claims. 

 

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	 	(f)	During the period that any royalty payments are suspended under this clause 5.5, Purchaser shall provide Seller each calendar quarter an accurate accounting of all of
the royalty payments set off under this clause 5.5 and the amount of litigation costs and expenses actually incurred and paid by Purchaser with respect to the Transferred Materials Infringement Claims, and the related lawsuit and proceedings. Seller
shall have the right to audit at Purchaser’s headquarters all such records of Purchaser upon reasonable notice, and during Purchaser’s normal working hours at such facility. Purchaser shall make available to Seller at Purchaser’s
headquarters all records necessary for Seller to properly conduct such audit. 

  

	5.6	Transferred Materials 

 In
the event that Purchaser or any of its Affiliates directly or indirectly sells, transfers title to, or assigns ownership of any of the Transferred Materials, Successor Versions or Combination Versions to one or more third parties (including a
disposition by Purchaser or its relevant Affiliates of VL C.V.), other than (i) any of Purchaser’s Affiliates or Seller’s Affiliates or (ii) in connection with a merger, acquisition or change of control of Purchaser or a sale of
all or substantially all of the assets of Purchaser, as long as Seller remains entitled to receive royalties with respect to the applicable Transferred Materials, Successor Versions and/or Partial Combination Version portions of each Combination
Version in accordance with the terms of this clause 5 after the consummation of such transaction, during the Royalty Term, Purchaser shall pay Seller a percentage of amounts received by Purchaser or any of its Affiliates (including any contingent,
revenue share or similar payments earned or received during the Royalty Term) directly or indirectly from such third party or parties that are attributable to the applicable Transferred Materials, Successor Versions and/or Partial Combination
Version portions of each Combination Version, calculated in accordance with the methodology described in the last paragraph of clause 5.7 below and taking into account the remaining period in the Royalty Term as of the date of consummation of the
applicable sale, transfer of title or assignment of ownership. 
  

	5.7	Methodology 

 In the event
that in the same transaction or series of related transactions, Purchaser or any of its Affiliates licenses Transferred Materials, Successor Versions and/or Combination Versions and licenses or sells other products, software or services, the amount
to be allocated to such Transferred Materials, Successor Versions and/or Combination Versions shall be determined by multiplying the amount received by or on behalf of Purchaser or any of its Affiliates for all such Transferred Materials, Successor
Versions, Combination Versions and other products, software 
  

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 and services licensed or sold in such transaction or series of related transactions by
the fraction A/B where A is the combined list price of all such Transferred Materials, Successor Versions and/or Partial Combination Version portions of such Combination Versions when licensed separately and B is the combined list price of all such
Transferred Materials, Successor Versions, Combination Versions and other products, software and services when licensed or sold separately.  

List prices shall be determined at the time applicable amounts are invoiced. In establishing list prices, Purchaser acknowledges and
agrees that it will not disproportionately discount Transferred Materials, Successor or Partial Combination Versions as compared to Combination Versions. 

Where applicable, amounts under this clause 5 shall be calculated in accordance with U.S. generally accepted accounting principles.

 The fair market value of any non-cash consideration received by or on behalf of Purchaser or any of its Affiliates shall be
determined in accordance with U.S. generally accepted accounting principles as they relate to non-monetary transactions. 
 In
determining the amount attributable to the applicable Transferred Materials, Successor Versions and/or Partial Combination Version portions of Combination Versions for purposes of clause 5.6 above, Seller and Purchaser shall negotiate in good faith
the attributable amount for a period of thirty (30) days. If Seller and Purchaser are unable to agree on such attributable amount after such thirty (30) day period, Seller and Purchaser shall appoint a mutually acceptable independent,
internationally recognized appraisal, accounting or consulting firm that provides appraisal services to make such determination, which determination shall be provided to both Purchaser and Seller and will be binding on Purchaser and Seller. Subject
to execution of a non-disclosure agreement reasonably acceptable to Purchaser, Purchaser shall provide to any such mutually agreed firm access to its books and records and other materials and personnel to the extent reasonably necessary to determine
such attributable amount. 
  

	6	ROYALTY REPORTING AND AUDIT RIGHTS 

  

	6.1	Inspection of books and records 

Purchaser shall maintain accurate books and records which enable the calculation of royalties payable hereunder to be verified in
accordance with this clause 6.1. Purchaser shall retain the books and records for each quarterly period for four (4) years after the submission of the corresponding royalty report under clause 6.2 below. Upon no less than thirty
(30) days’ prior written notice to Purchaser, independent accountants selected by Seller, reasonably acceptable to Purchaser, after entering into a confidentiality agreement with Purchaser no materially less restrictive than Seller’s
confidentiality obligations hereunder, may have access to the books and 
  

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records of Purchaser to conduct, at Purchaser’s headquarters, a review or audit, no more often than once per calendar year (it being understood, for the avoidance of doubt, that more than
one (1) visit to such facilities may be required to complete a single audit), for the sole purpose of verifying the accuracy of the royalty reports submitted by Purchaser to Seller during the four (4) year period immediately preceding the
date of such review or audit. Purchaser shall make available to the auditors at Purchaser’s headquarters all books and records necessary for the auditors to properly conduct such review and audit. The accounting firm shall provide an audit
report to Seller, specifying whether there has been a royalty underpayment or overpayment (and, if so, the amount thereof), including its calculation per calendar quarter of royalties payable compared with royalties reported by Purchaser, aggregated
for Transferred Materials, Successor Versions and Combination Versions categories, respectively, and an itemized bridge calculation for any difference between said reported royalties and the payable royalties per such category. Such access shall be
permitted during Purchaser’s normal business hours during the Royalty Term and for two (2) years thereafter. Any such inspection or audit shall be at Seller’s expense, except if the audit results show underpayment by Purchaser of more
than five percent (5%) over the course of the entire period audited, in which case Purchaser will pay for the reasonable audit expenses incurred and documented by Seller within thirty (30) days of Seller’s itemized invoice therefor.
Purchaser shall pay to Seller any underpaid royalties promptly. Any overpayments by Purchaser revealed in such inspection or audit shall be credited to future royalties, unless the Royalty Term has expired in which case Seller shall promptly, but in
any event within forty-five (45) days of the issuance of the audit report, refund such overpaid amounts to Purchaser. Any records or accounting information received from Purchaser or its Affiliates during the course of any such inspection or
audit shall be deemed Purchaser’s Confidential Information under this Agreement. 
  

	6.2	Royalty reporting and payment 

Purchaser shall, within thirty (30) days following 31 March, 30 June, 30 September and 31 December of each
calendar year during the Royalty Term: (i) submit to Seller (even in the event that Purchaser has no payment obligations for the applicable quarter) its duly signed written statement in the form as Annex H hereto; and (ii) pay to Seller
the amounts due for that respective quarter. All amounts are in United States Dollars (USD), and Purchaser shall pay all amounts due to Seller hereunder by wire transfer into the bank account designated in Annex K or as otherwise designated by
Seller in writing. Purchaser shall not offset, withhold or reduce any payment(s) due to Seller. 
  

	6.3	Tax 

  

	 	6.3.1	 All amounts paid hereunder by Purchaser are gross amounts and shall be paid without withholding for or on account of any tax, but are exclusive
of any value added tax (VAT) or analogous tax only. If the transactions as described in this Agreement are subject to any applicable VAT or analogous tax, Seller shall provide Purchaser with a valid invoice that

  

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complies with local tax regulations and which specifically states this tax. Provided Seller has stated VAT or analogous tax (as identified above) on the applicable invoice Purchaser will pay to
Seller the VAT or analogous tax properly chargeable in respect of that payment. Purchaser reserves the right to withhold payment of VAT or analogous tax to Seller until Seller has provided Purchaser with a valid invoice which states such tax. If
Seller has incorrectly determined the amount of VAT chargeable to Purchaser, then the invoice shall be corrected and (a) where Purchaser has overpaid any amount, Seller will repay this amount plus interest to Purchaser and (b) where
Purchaser has paid less than the correct amount, Purchaser shall pay the outstanding amount to Seller upon receipt of a valid invoice. In the event that Purchaser is refused recovery of such input VAT by means of a deduction or refund by a taxing
authority, solely because of an incorrect initial invoice made out by Seller, Seller will repay such VAT plus interest except where such refusal has arisen as a result of an action (or inaction) by Purchaser in respect of compliance with local tax
legislation. 

  

	 	6.3.2	Seller shall deliver to Purchaser at the Closing a U.S. Internal Revenue Service Form W-8BEN claiming residence in the Netherlands for purposes of the
US/Netherlands Treaty, claiming the benefits of Article 13 of the US/Netherlands Treaty (related to royalties), and otherwise signed and completed to the reasonable satisfaction of Purchaser. 

 

	7	CONFIDENTIALITY 

  

	7.1	Confidential information 

Purchaser and VL C.V. acknowledge that any unpublished patent applications included in the Licensed Patents, any trade secrets or other
confidential information included in the Licensed Materials, Licensed IPRs, and Successor Versions and Combination Versions (solely insofar as the Successor Versions and Combination Versions incorporate all or part of the trade secrets included in
the Licensed IPRs) embody or contain valuable trade secrets and other confidential information of Seller (such trade secrets and other confidential information along with any unpublished patent applications included in the Licensed Patents and any
trade secrets or other confidential information included in the Licensed Materials, Licensed IPRs are collectively referred to as “Seller Confidential Information”). Seller acknowledges that the Transferred Materials, any
unpublished patent applications included in the Transferred Patents, any trade secrets or other confidential information contained in the Transferred IPRs, Successor Versions and Combination Versions embody or contain valuable trade secrets and
other confidential information of Purchaser and VL C.V. (such trade secrets and other confidential information along with the Transferred Materials, any unpublished patent applications included in the Transferred Patents and any trade secrets or
other confidential information included in the Transferred IPRs are collectively referred to as “Purchaser Confidential Information”). Purchaser, Seller and VL C.V. (each a “Receiving Party”) will not use the Seller
Confidential Information or the Purchaser Confidential Information, as applicable (the “Confidential Information”), for any purpose not expressly permitted by this Agreement, and may disclose the other Party’s Confidential

  

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Information only to those of its employees, permitted sublicensees and other authorized third parties who have a strict need to know such Confidential Information for purposes of exploiting the
licenses granted to such Party under this Agreement and who are under a written obligation of confidentiality no less restrictive than the Receiving Party’s confidentiality obligations hereunder. The Receiving Party will protect the other
Party’s Confidential Information from unauthorized use, access and disclosure in the same manner as the Receiving Party protects its own confidential or proprietary information of a similar nature and with no less than reasonable care.

  

	7.2	Exceptions 

 The Receiving
Party’s obligations under clause 7.1 shall not apply to any information if and to the extent the Receiving Party can document that such information: 
  

	 	(a)	was already lawfully known to the Receiving Party at the time of initial disclosure by the other Party (expressly excluding, where Seller or any of its Affiliates is
the Receiving Party, the Transferred Materials, any unpublished patent applications included in the Transferred Patents, and any trade secrets or other confidential and proprietary information contained in the Transferred IPRs (including as such
trade secrets and other confidential and proprietary information may be included, incorporated or embodied in Successor Versions and Combination Versions); 

 

	 	(b)	was disclosed to the Receiving Party by a third party who had the right to make such disclosure without any confidentiality restrictions (including the confidentiality
restrictions set forth herein or in any other Ancillary Agreement); 

  

	 	(c)	is, or through no fault of the Receiving Party has become, generally available to the public; or 

 

	 	(d)	is independently developed by the Receiving Party without use of or reference to the other Party’s Confidential Information. In addition, the Receiving Party will
be allowed to disclose Confidential Information of the other Party to the extent that such disclosure is: 

  

	 	(i)	expressly approved in writing by the other Party prior to such disclosure; 

 

	 	(ii)	necessary for the Receiving Party to enforce its rights under this Agreement in connection with a legal proceeding, provided that the Receiving Party shall, prior to
disclosure and at its own expense, seek a protective order appropriate to preserve the other Party’s rights in the confidential nature of the Confidential Information; or 

 

	 	(iii)	 required by law or by the order or a court of similar judicial or administrative body, provided that the Receiving Party notifies the other Party of
such required 

  

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disclosure promptly and in writing and cooperates with the other Party, at the other Party’s reasonable request and expense, in any lawful action to secure a protective order appropriate to
preserve the other Party’s rights in the confidential nature of the Confidential Information or otherwise to contest or limit the scope of such required disclosure. 

 

	8	REPRESENTATIONS AND WARRANTIES; DISCLAIMER 

  

	8.1	This Agreement is subject to and the Parties are the beneficiaries of the representations, warranties and covenants set forth in the Asset Purchase Agreement.

  

	8.2	Seller Tax Representations 

In addition to the representations, warranties and covenants set forth in the Asset Purchase Agreement, Seller hereby represents and
warrants to Purchaser as follows: 
  

	 	(a)	Seller is a resident of the Kingdom of the Netherlands for purposes of the US/Netherlands Treaty and is entitled to all of the benefits thereof without
limitation by Article 26 thereof (entitled “Limitation on Benefits”). 

  

	 	(b)	Seller does not have a permanent establishment in the United States for purposes of the US/Netherlands Treaty, and no royalty to be received by it pursuant to
this Agreement will be attributable to such a permanent establishment for purposes of the US/Netherlands Treaty. 

  

	8.3	Disclaimer 

 EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN THE ASSET PURCHASE AGREEMENT, ALL TECHNOLOGY, INTELLECTUAL PROPERTY AND OTHER MATERIALS OR INFORMATION ASSIGNED, TRANSFERRED OR LICENSED HEREUNDER ARE ASSIGNED, TRANSFERRED OR LICENSED, AS THE CASE MAY BE, ON AN
“AS IS” BASIS AND WITHOUT ANY WARRANTY OF ANY TYPE. SELLER’S SOLE LIABILITY AND PURCHASER’S AND VL C.V.’s SOLE REMEDY WITH RESPECT TO ANY PATENT INFRINGEMENT OR ANY OTHER CLAIM OF INFRINGEMENT OR MISAPPROPRIATION MADE BY ANY
THIRD PARTY ON ACCOUNT OF, OR ARISING FROM THE USE OR PRACTICE OF ANY TECHNOLOGY, INTELLECTUAL PROPERTY OR OTHER MATERIALS OR INFORMATION ASSIGNED, TRANSFERRED OR LICENSED HEREUNDER SHALL BE AS SET FORTH IN THE ASSET PURCHASE AGREEMENT AND IN THE
ROYALTY SUSPENSION CLAUSE IN CLAUSE 5.5 HEREOF. 
  

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	9	INFRINGEMENT INDEMNITY AND LIMITATION OF LIABILITY 

  

	9.1	Indemnity by Purchaser 

  

	 	9.1.1	Duty to Indemnify and Defend 

Purchaser shall indemnify and hold harmless Seller against, and will defend or settle at Purchaser’s own expense, subject to the
limitations stated in clauses 9.2 and 9.3 below and, to the extent applicable, the provisions of Sections 8.6 and 8.7 of the Asset Purchase Agreement, any action or other proceeding brought against Seller, its Affiliates or their respective
directors, officers, shareholders or employees (each a “Seller Indemnified Party”) to the extent that it is based on a claim that any Successor Version or Combination Version, or a portion of either one (each, a
“Purchaser Indemnified Version”) infringes or misappropriates a copyright, Patent or other Intellectual Property Right of a third party. Purchaser will pay any damages (including attorneys’ fees) awarded against the
Seller Indemnified Party in any such action or proceeding and any costs and expenses (including reasonable attorneys’ fees) incurred by the Seller Indemnified Party to the extent attributable to any such claim, subject to the limitations stated
in clauses 9.3 and 9.4 below. Seller agrees to provide Purchaser with prompt notice of any action or other proceeding brought against a Seller Indemnified Party for which such Seller Indemnified Party has indemnification rights hereunder,
provided that the failure to provide such prompt notice shall not relieve Purchaser of its indemnification obligations hereunder except to the extent it is materially prejudiced thereby. Seller hereby agrees, and Seller shall procure that
each other Seller Indemnified Party shall agree as a condition of being indemnified hereunder, that Purchaser will have the sole right to control the defense and settlement of any such action or other proceeding hereunder, provided that the Seller
Indemnified Party may participate in the defense and settlement with its own attorneys at its expense, and provided, further, that Purchaser shall not be liable for or obligated under any compromise or settlement of such claim, action or proceeding
without its prior written consent not to be unreasonably withheld or delayed. At Purchaser’s reasonable request, each Seller Indemnified Party shall provide Purchaser with reasonable assistance, at Purchaser’s expense, in its defense and
settlement of such action, proceeding or claim. 
  

	 	9.1.2	Injunctions  

 If
Seller’s use of any Successor Version(s) and/or Combination Version(s) under the terms of this Agreement is, or in Purchaser’s reasonable opinion is likely to be, enjoined due to the type of infringement or misappropriation specified in
clause 9.1.1 above, which is not subject to any exclusion set forth in subsection 9.1.4 below, then Purchaser shall, at its sole option and expense, subject to clause 9.3 below, either: 

 

	 	(i)	procure for each Seller and its Affiliates the right to continue using such Successor Version(s) and/or Combination Version(s) or any Purchaser Indemnified Versions,
under the terms of this Agreement; or 

  

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	 	(ii)	replace or modify such Successor Version(s) and/or Combination Version(s), or any Purchaser Indemnified Versions, so that they are noninfringing and substantially
equivalent in function to the Successor Version(s) and/or Combination Version(s), or any Purchaser Indemnified Versions, subject to, or potentially subject to, an injunction. 

Upon Purchaser’s successful performance of 9.1.2(i) or (ii) above, Purchaser’s liability under clause 9.1.1 above with
respect to the applicable claim shall terminate with respect to all damages, costs and expenses related to the continued use of the unaltered Successor Version(s) and/or Combination Version(s) after the date of such performance, or, in the case of
clause 9.1.2(ii) after Seller has had a reasonable opportunity, in light of the applicable circumstances, to implement the replaced or modified Successor Version(s) and/or Combination Version(s). 

 

	 	9.1.3	Sole Remedy  

 THE
FOREGOING ARE PURCHASER’S SOLE AND EXCLUSIVE OBLIGATIONS, AND SELLER’S SOLE AND EXCLUSIVE REMEDIES, WITH RESPECT TO INFRINGEMENT OR MISAPPROPRIATION OF PATENTS OR INTELLECTUAL PROPERTY RIGHTS UNDER THIS AGREEMENT. 

 

	 	9.1.4	Exclusions  

 Purchaser
shall have no obligations under this clause 9.1 to the extent that the infringement or misappropriation arises from: 
  

	 	(i)	the Transferred Materials or Licensed Materials, standing alone (and not in combination, operation or use with other software, apparatus, data, technology or materials,
except where the infringement or misappropriation does not arise from such combination, operation or use); 

  

	 	(ii)	any modification(s) to any Transferred Material(s), Successor Version(s) and/or Combination Version(s) made by Seller, any of its Affiliates, any Divested Company, ***,
any of their respective sublicensees or any Person on behalf of any of the foregoing; 

  

	 	(iii)	 Purchaser’s compliance with modifications requested by Seller or any of its Affiliates (or any Divested Company, *** through Seller or any of its

  

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Affiliates) to any Transferred Material(s), Successor Version(s) and/or Combination Version(s) that comply with specifications or implementation instructions provided by Seller or any of its
Affiliates (or any Divested Company, *** through Seller or any of its Affiliates) under a Statement of Work pursuant to the Technology Services Agreement, to the extent such compliance with the specifications or instructions could not be achieved
without infringing or misappropriating the rights of a third party; 

  

	 	(iv)	any instantiations of any Transferred Material(s), Successor Version(s) and/or Combination Version(s) generated by Seller, any of its Affiliates, any Divested Company,
*** or any Person on behalf of any of the foregoing, except, solely with respect to Successor Version(s) and/or Combination Version(s), to the extent such infringement or misappropriation existed in such Successor Version(s) and/or Combination
Version(s) in the form delivered by Purchaser to Seller; 

  

	 	(v)	any use of any Transferred Material(s), Successor Version(s) and/or Combination Version(s) in combination with products or technology not provided by Purchaser if such
infringement would not have arisen but for such combination or use; 

  

	 	(vi)	any failure to implement a revision to any Successor Version(s) and/or Combination Version(s) delivered by Purchaser to Seller, which if implemented, would have avoided
the infringement or misappropriation, provided that the revision is given to Seller free of charge with reasonable time, in light of the applicable circumstances, to implement it and does not substantially alter the functionality of the Successor
Version(s) and/or Combination Version(s); or 

  

	 	(vii)	any NXP Material(s) licensed or sublicensed to Purchaser under the Technology Services Agreement, standing alone (and not in combination, operation or use with other
software, apparatus, data, technology or materials, except where the infringement or misappropriation does not arise from such combination, operation or use). 

 

	9.2	EXCEPT FOR A BREACH OF THE LICENSE GRANTS AND RESTRICTIONS UNDER CLAUSES 2.2, 2.4 AND 2.5, THE PAYMENT OBLIGATIONS UNDER CLAUSE 6.2, OR CONFIDENTIALITY UNDER
CLAUSE 7, AND TO THE EXTENT ALLEGED IN THIRD PARTY CLAIMS COVERED BY INDEMNIFICATION OBLIGATIONS UNDER CLAUSE 9.1, NEITHER PARTY SHALL BE LIABLE FOR ANY LOSS OF PROFITS, LOSS OF USE, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF ANY
BREACH OR FAILURE UNDER THIS AGREEMENT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE PARTIES ACKNOWLEDGE THAT THESE LIMITATIONS ON POTENTIAL LIABILITIES ARE AN ESSENTIAL ELEMENT IN THIS AGREEMENT. 

 

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	9.3	EXCEPT FOR A BREACH OF THE LICENSE GRANTS AND RESTRICTIONS UNDER CLAUSES 2.2, 2.4 AND 2.5, THE PAYMENT OBLIGATIONS UNDER CLAUSE 6.2, OR CONFIDENTIALITY UNDER
CLAUSE 7, AND PURCHASER’S OBLIGATIONS UNDER CLAUSE 9.1, IN NO EVENT SHALL EITHER PARTY’S LIABILITY UNDER THIS AGREEMENT EXCEED TWO MILLION U.S. DOLLARS (US$2,000,000) (IT BEING UNDERSTOOD THAT THE CIRCUMSTANCES FOR WHICH REMEDIES ARE
AVAILABLE TO PURCHASER PURSUANT TO CLAUSES 5.4 AND 5.5 SHALL NOT BE DEEMED LIABILITIES OF SELLER THAT ARE SUBJECT TO THE FOREGOING LIMITATION). PURCHASER’S LIABILITY FOR ITS OBLIGATIONS UNDER CLAUSE 9.1 ABOVE, SHALL, IN CONJUNCTION WITH
PURCHASER’S OBLIGATIONS UNDER SECTION 7.1 OF THE TECHNOLOGY SERVICES AGREEMENT, NOT EXCEED AN AGGREGATE OF FIVE MILLION U.S. DOLLARS (US$5,000,000). THESE LIMITATIONS OF LIABILITY ARE CUMULATIVE AND NOT PER INCIDENT. FOR PURPOSES OF
CLARIFICATION, WITH RESPECT TO PURCHASER’S OBLIGATIONS UNDER CLAUSE 9.1 ABOVE AND SECTION 7.1 OF THE TECHNOLOGY SERVICES AGREEMENT, THE COMBINED LIABILITY UNDER THIS AGREEMENT AND THE TECHNOLOGY SERVICES AGREEMENT SHALL NOT EXCEED FIVE MILLION
U.S. DOLLARS (US$5,000,000), IN THE AGGREGATE. FURTHERMORE THE EXCLUSIONS AND LIMITATIONS OF LIABILITY SET FORTH IN THIS CLAUSE 9.3 DO NOT APPLY IN CASE OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR INTENTIONAL BREACH, OR IN CASE OF PERSONAL INJURY
OR DEATH. 

  

	10	TERM AND TERMINATION 

  

	10.1	Effective Date 

 This
Agreement shall become effective as from the Closing Date and continue in full force and effect in accordance with its terms unless and until terminated by mutual agreement of the Parties. The rights and obligations of the Parties which by their
nature would continue beyond termination of this Agreement shall survive and continue after any termination of this Agreement for as long as necessary to permit their full discharge. 

 

	11	ASSIGNMENT 

 Neither
Purchaser nor VL C.V. may assign or transfer this Agreement or any of its rights or obligations hereunder without the prior written consent of Seller; provided, however, that either Purchaser or VL C.V. may assign this Agreement, in whole but not in
part, along with all its rights and obligations hereunder (i) to an Affiliate of Purchaser or (ii) to a third party as part of a merger, acquisition or sale of Purchaser or substantially all of the business or assets of Purchaser related
to the subject matter of this Agreement without such consent. Seller may not in whole or in part assign or transfer this Agreement or any of its rights or obligations hereunder without the prior written consent of Purchaser; provided, however, that
Seller may assign this Agreement, in whole but not in part, and all of its rights and obligations hereunder (i) to an Affiliate of Seller or (ii) to a 

 

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third party as part of a merger, acquisition or sale of Seller or substantially all of the business or assets of Seller related to the subject matter of this Agreement without such consent, as
long as the third party involved in such a merger, acquisition or sale is not a Purchaser Competitor. 
  

	12	APPLICABLE LAW; DISPUTE RESOLUTION PROCEDURE 

  

	12.1	Applicable law and dispute resolution 

This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York applicable to
contracts entered into and performed under the laws of the State of New York, without giving effect to such laws whose application would result in the application of the laws of another jurisdiction. 

 

	 	(i)	Any claims or causes of action arising out of or in connection with this Agreement (“Claims”) that relate to any Patent matter that is within the jurisdiction
of the United States Court of Appeals for the Federal Circuit will be brought solely in the federal courts in the Southern District of New York or, if said court lacks subject matter jurisdiction, then in the Supreme Court of the State of New York,
County of New York. Each Party hereby submits to the personal jurisdiction and venue of such courts and agrees to receives service of process at its address set forth herein. 

 

	 	(ii)	With respect to all Claims other than those specified in clause (i) above, clauses 13.2 through 13.9 of the Asset Purchase Agreement are hereby incorporated by
reference and made a part hereof as if fully set forth herein, provided that this clause 12.1 shall not preclude a Party from pursuing an action in any court of competent jurisdiction for the sole purpose of obtaining injunctive or similar relief in
the case of a breach of clause 2 or clause 7 hereof. 

  

	 	(iii)	If Claims are raised that fall within both clause 12.1(i) above and clause 12.1(ii) above, the Parties will resolve the Claims falling within clause 12.1(i) above
first, and then proceed with the remaining claims under clause 12.1(ii) above. The Parties agree that a final or the unappealed judgment of any Claims under clause 12.1(i) above (a “Final Judgment”) may be submitted to any court of
competent jurisdiction within the Netherlands (or in any other jurisdiction), that such Final Judgment may be enforced by such court, and that neither Party will object to the enforcement by such court of such Final Judgment. Further, a Final
Judgment may be taken by the prevailing party to the arbitrator handling any Claims under clause 12.1(ii) above. 

  

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	13	MISCELLANEOUS 

  

	13.1	Entire Agreement 

 This
Agreement and the documents, instruments and other agreements specifically referred to herein or therein or delivered pursuant hereto, including all Annexes hereto, constitute the entire agreement of the Parties with respect to the subject matter
hereof and supersede all prior agreements, term sheets, letters of interest, correspondence (including e-mail) and undertakings, both written and oral, between Seller, on the one hand, and Purchaser, on the other hand, with respect to the subject
matter hereof. 
  

	13.2	Amendment 

 Subject to
applicable law, the Parties may amend this Agreement at any time in accordance with an instrument in writing signed on behalf of each of the Parties. 
  

	13.3	Notices 

 All notices and
other communications hereunder will be in writing and deemed to have been duly given if given in accordance with the provisions of the Asset Purchase Agreement. 
  

	13.4	Severability 

 If any term
or provision of this Agreement or the application of any such term or provision to any Person or circumstance is held by final judgment of a court of competent jurisdiction or arbiter to be invalid, illegal or unenforceable in any situation in any
jurisdiction, all other conditions and provisions of this Agreement will nevertheless remain in full force and effect. If the final judgment of such court or arbitrator declares that any term or provision hereof is invalid, void or unenforceable,
the parties agree to, as applicable, (i) reduce the scope, duration, area or applicability of the term or provision, to delete specific words or phrases, or (ii) replace any invalid, illegal or unenforceable term or provision with a term
or provision that is valid and enforceable and that comes closest to expressing the original intention of the invalid, illegal or unenforceable term or provision. 
  

	13.5	Extension; Waiver 

 Any
Party hereto may, to the extent legally allowed, waive compliance with any of the agreements or conditions for the benefit of such Party contained herein. Any agreement on the part of a Party hereto to any such waiver will be valid only if set forth
in an instrument in writing signed on behalf of such Party. Without limiting the generality or effect of the preceding sentence, no delay in exercising any right under this Agreement will constitute a waiver of such right, and no waiver of any
breach or default will be deemed a waiver of any other breach or default of the same or any other provision in this Agreement. 
  

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	13.6	No Third-Party Beneficiaries 

This Agreement is for the sole benefit of the Parties, their permitted assigns, Affiliates and permitted sublicensees, and nothing herein,
express or implied, is intended to or will confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. 

 

	13.7	Costs 

 Except as
otherwise expressly provided in this Agreement, all costs and expenses incurred in connection with this Agreement shall be borne by the Party incurring such costs and expenses, whether or not the Transaction is consummated. 

 

	13.8	Independent contractors 

The Parties are and intend to remain independent contractors. Nothing contained in this Agreement shall be deemed or construed to
constitute or create an agency, association, joint venture or partnership between the Parties, and neither Party shall have authority to act in the name of or on behalf of or otherwise to bind the other Party in any way, including the making of any
representation or warranty, the assumption of any obligation or liability and the exercise of any right or power. 
  

	13.9	Export control 

 Each
Party acknowledges that the technology transferred, assigned or licensed hereunder, including documentation and technical data, may be subject to export control regulations. Neither Party shall export or re-export (directly or indirectly) any
technology or other materials transferred, assigned or licensed to it hereunder without complying with applicable export regulations, and upon request, each Party shall provide reasonable assistance to the other Party with respect to such
compliance. 
  

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	13.10	Language 

 This Agreement
and all documents and notices issued under the terms of this Agreement shall be in the English language. Any translation into another language is for the convenience of the Parties only. 

 

	13.11	Counterparts 

 This
Agreement may be executed in two (2) counterparts, and by each of the Parties in separate counterparts, each of which when executed will be deemed to be an original but both of which taken together will constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by telecopy or by electronic delivery in Adobe Portable Document Format will be effective as delivery of a manually executed counterpart of this Agreement. 

[SIGNATURE PAGES FOLLOW] 
  

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	 AGREED AND SIGNED ON NOVEMBER 16 2009 BY:

 
 NXP B.V., as Seller

		
	By:	 	/S/    KARL HENRIK SUNDSTRÖM
	 Name: Karl Henrik Sundström

	 Title: EVP and Chief Financial Officer

 

			
	By:	 	/S/    GUIDO DIERICK
	 Name: Guido Dierick

	 Title: SVP and General Counsel

 

			
	 Virage Logic Corporation, as Purchaser

		
	By:	 	/S/    ALEXANDER SHUBAT
	 Name: Alexander Shubat

	 Title: President and Chief Executive Officer

 

			
	 AGREED AND SIGNED ON NOVEMBER 16 2009 BY:

 
 VL C.V.

 
 By: Virage Logic International, its general partner

		
	By:	 	/S/    BRIAN SEREDA
	 Name: Brian Sereda

	 Title: Chief Financial Officer

 

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 Annex I – IPTLA – Purchaser Competitors 

*** 
 Any Affiliate of any of
the foregoing Persons, any Person holding directly or directly more than 50 percent of the nominal value of the share capital or more than 50 percent of the voting power at general or special meetings of shareholders of the foregoing Persons, any
Person acquiring all or substantially all of the assets of any of the foregoing Persons or the surviving entity of any merger to which such Person is a party or constituent entity. 

 

 1 / 1 

 *** 

 *** 

 Annex L – IPTLA - High-Level IP Block Obligations and Restrictions

 1. License Fees: For the first *** sublicenses with respect to High-Level IP Blocks under clause
2.2(b)(iii) of the Intellectual Property Transfer and License Agreement, Seller shall not be obligated to pay Purchaser any fees with respect thereto. Thereafter, Seller and Purchaser shall negotiate in good faith and mutually determine the fee for
any additional sublicenses entered into pursuant to clause 2.2(b)(iii) on a case by case basis; provided that any such sublicense fee shall not be in excess of *** percent (***%) of the list price of the Purchaser Licensed
IP embodied in the relevant High Level IP Block. 
 2. Timing of Sublicense Fee Payments: With respect to those sublicenses
for which Seller is obligated to pay Purchaser a fee hereunder, Seller shall notify Purchaser promptly of its receipt of fees from a sublicense entered into pursuant to clause 2.2(b)(iii) of the Intellectual Property Transfer and License Agreement.
Seller shall pay the fees due to Purchaser in accordance with paragraph 1 of this Annex L within forty-five (45) days after Seller’s receipt of fees from such sublicense. 

 Annex M – IPTLA – Revenue Sharing Deductible Costs 

 

							
	 Class of Expense
	  	 Direct
	  	 Indirect
	  	 Deductible
costs

				
	 Salary
	  		  		  	
				
	 Vacation Accrual Expense
	  		  		  	
	 PTO
	  		  		  	
				
	 Medical Insurance
	  		  		  	
				
	 Dental Insurance
	  		  		  	
				
	 Vision Insurance
	  		  		  	
				
	 Other Benefits
	  		  		  	
	 Cobra Expense
	  		  		  	
	 Benefits Allocations Out
	  		  		  	
				
	 Employee Insurance
	  		  		  	
				
	 Fitness & Other Benefits
	  		  		  	
				
	 Benefits
	  		  		  	
				
	 Payroll Taxes
	  		  		  	
				
	 Payroll Tax
	  		  		  	
				
	 Severance Expense
	  		  		  	
	 Severance
	  		  		  	
				
	 Bonus Expense
	  		  		  	
	 Gratuity
	  		  		  	
	 Bonus
	  		  		  	
				
	 Commission Expense
	  		  		  	
	 Commission
	  		  		  	
				
	 Relocations
	  		  		  	
	 Relocation
	  		  		  	
				
	 Auto Allowance
	  		  		  	
	 Other Compensation
	  		  		  	

									
	Subtotal Compensation	  		  		  		  	
	  
 Deprec - Furniture & Fixtures
	  		  		  		  
	Deprec - Computers & Equipment	  		  		  		  
	Deprec - Software	  		  		  		  
	Deprec - Building	  		  		  		  
	Deprec - Leasehold Improvement	  		  		  		  
	Amort - Intangibles - Patents	  		  		  		  
	Amort - Intangibles - Goodwill	  		  		  		  
	Depreciation & Amortization	  		  		  		  
	  
 Subcon/Consulting
	  		  		  		  
	  
 Outside Services
	  		  		  		  
	  
 Consulting
	  		  		  		  
	  
 Lodging
	  		  		  		  
	Travel Meals	  		  		  		  
	Auto Rental and Rental Gas	  		  		  		  
	Transportation & Airfare	  		  		  		  
	Travel Telecom	  		  		  		  
	Taxi/shuttle/tips/parking toll	  		  		  		  
	Other Exp.-Visa's/Medical	  		  		  		  
	Auto Expense & Mileage	  		  		  		  
	Business Meals	  		  		  		  
	Entertainment	  		  		  		  
	Meetings	  		  		  		  
	Company Events	  		  		  		  
	Special Events-T&E	  		  		  		  
	Employee Meals	  		  		  		  
	Employee Meals Off-Site	  		  		  		  
	Travel and Entertainment	  		  		  		  
	  
 Benefit Plan Fees
	  		  		  		  
	Payroll Service Fees	  		  		  		  
	Accounting & Auditing	  		  		  		  
	Bank Fees	  		  		  		  
	Insurance - General Liab	  		  		  		  
	Insurance - D & O	  		  		  		  
	Transfer Agent	  		  		  		  
	Public Filings	  		  		  		  
	Investor Relations	  		  		  		  
	Professional Services	  		  		  		  
	  
 Legal-Corporate
	  		  		  		  

									
	Legal - Patents	  		  		  		  	
	Legal-Immigration	  		  		  		  
	Legal Services	  		  		  		  
	  
 Equipment Lease
	  		  		  		  
	Equipment Expenses	  		  		  		  
	Equipment	  		  		  		  
	  
 Freight
	  		  		  		  
	Postage	  		  		  		  
	Office Supplies	  		  		  		  
	Cafeteria Supplies	  		  		  		  
	Supplies	  		  		  		  
	  
 Advertising & Promotion
	  		  		  		  
	Collateral	  		  		  		  
	Public Relations	  		  		  		  
	Trade Shows/Exhibition	  		  		  		  
	Website	  		  		  		  
	Partner Marketing Programs	  		  		  		  
	Industry Assoc Sponsorships	  		  		  		  
	Market Research	  		  		  		  
	Marcom	  		  		  		  
	  
 Software Expenses
	  		  		  		  
	Software Maint	  		  		  		  
	Software License Fees	  		  		  		  
	SW Expense	  		  		  		  
	  
 Cell Phone
	  		  		  		  
	Telephone	  		  		  		  
	Maintenance & Repairs	  		  		  		  
	Rent - Office	  		  		  		  
	Rent - Common Area Maint	  		  		  		  
	Lease Termination	  		  		  		  
	Offsite-Storage	  		  		  		  
	Office Move and Related Exp.	  		  		  		  
	Property Tax	  		  		  		  
	Janitorial Expense	  		  		  		  
	Security	  		  		  		  
	Utilities	  		  		  		  
	Facilities	  		  		  		  
	  
 Internet Connect
	  		  		  		  
	MIS	  		  		  		  

							
	Test Chip Cost	  		  		  	
	Test Chip	  		  		  	
				
	Rep. Commission	  		  		  	
	External Commission	  		  		  	
				
	Recruiting Expense	  		  		  	
	Recruiting	  		  		  	
				
	Workers’ Compensation	  		  		  	
	Seminars & Education	  		  		  	
	Subscriptions & Dues	  		  		  	
	Other Expenses	  		  		  	
	Employee Welfare	  		  		  	
	Internal Communication	  		  		  	
	Custom / Duty Tax	  		  		  	
	Business License	  		  		  	
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	 Subtotal Non-Compensation
	  		  		  	
	Total Expense Before Alloc	  		  		  	
				
	Overhead Allocation	  		  		  	
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	Allocation	  		  		  	
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 *** 

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 *** 

 ***Shareholders' agreement dated as of March 30, 1999

 Exhibit 10.4 

CONFIDENTIAL TREATMENT REQUESTED - CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND SEPARATELY FILED WITH THE COMMISSION.

  

	***	INDICATES CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION 

SHAREHOLDERS AGREEMENT 

THIS SHAREHOLDERS AGREEMENT (“this Agreement”) is made as of this 30th day of March 1999 by and among 

EDB Investments Pte Ltd, a company incorporated in the Republic of Singapore and organized and existing under the laws of the Republic of Singapore, with
its registered head office at 250 North Bridge Road, #27-04, Raffles City Tower, Singapore 179101 (“EDBI”) 
 of the
first part 
 and 
 Koninklijke
Philips Electronics N.V., a corporation organized and existing under the laws of The Netherlands, with its registered head office at Groenewoudseweg 1, 5621 BA Eindhoven, The Netherlands (“Philips”) 

of the second part 
 and

 Taiwan Semiconductor Manufacturing Company Ltd, a corporation organized and existing under the laws of the Republic of China, with its
registered head office at No. 121 Park Avenue III, Science-Based Industrial Park, Hsinchu, Taiwan, Republic of China (“TSMC”) 

of the third part 

- - WITNESSETH - - 

WHEREAS, EDBI, Philips and TSMC including their respective successors and permitted assignees and transferees of their respective entire
ownership interest (collectively also referred to herein as the “Shareholders” and individually as a “Shareholder” during the period they have and/or have the right to acquire ordinary shares in SSMC (as defined)) wish to
organize a major joint venture company between them in and for the manufacture of tested and untested semiconductor wafers/chips (dies) (“Products”) for supply only to TSMC and its Subsidiaries (“TSMC Group”) and to Philips and
its Subsidiaries (“Philips Group”) with true commercial volume production to commence in the calendar year 2000 or thereabouts, it being understood that the term “Subsidiaries” as used in this Agreement in respect of any of the
Shareholders shall mean and include any company or other business entity, present or future, in which that Shareholder owns or controls, directly or indirectly, more than fifty percent (50%) of the voting shares or otherwise has a controlling
interest, but only so long as such ownership or control exists. 
  

			
		  	SSMC Shareholders Agreement 15 March 1999

 NOW, THEREFORE, in furtherance of the foregoing premise, the parties hereto hereby agree as
follows: 
 ARTICLE I 

THE NEW JOINT VENTURE COMPANY 
  

	1.01	Name and Articles of Association of the Joint Venture Company 

Taking account that Philips has duly arranged for the purpose and has caused the incorporation under the laws of the Republic of Singapore
of a new private company limited by shares by the name of “PT Semiconductor Manufacturing Company Pte Ltd”, the Shareholders hereby confirm that promptly upon execution of this Agreement, they shall cause (i) the name of this company
to be changed to “Systems on Silicon Manufacturing Company Pte Ltd” or another name mutually agreed, (ii) its authorized capital to be increased as specified in this Agreement and (iii) its Articles of Association to be amended
for sake of consistency with the understanding of the Shareholders as set out in this Agreement. 
 The Articles of Association
of the joint venture company, hereinafter referred to as “SSMC”, shall at all times be maintained at the principal office of SSMC. 

It is expressly understood that in the event of there being any conflict between the provisions of this Agreement and the Articles of
Association of SSMC, then as among the Shareholders the provisions of this Agreement shall prevail and the Articles of Association of SSMC shall be amended with urgency so as to have them comply with the provisions of this Agreement. 

 

	1.02	Capitalization 

 The
Articles of Association of SSMC will upon amendment as contemplated in the preceding Section 1.01 state for the sake of flexibility that the total authorized capital of SSMC shall be One Billion and Two Hundred Million Singapore Dollars (S$
1,200,000,000), consisting of One Million and Two Hundred Thousand (1,200,000) ordinary shares, each with a par value of One Thousand Singapore Dollars (S$ 1,000). 
  

			
	- 2 -	  	SSMC Shareholders Agreement 15 March 1999

 All shares of SSMC shall be issued in registered form only, shall be of one class and shall
have to be paid up in cash. 
 Upon amendment of the Articles of Association of SSMC as aforesaid, the Shareholders shall
subscribe to, shall pay for and shall be issued new shares in SSMC such that (i) EDBI shall hold twenty percent (20%) of SSMC’s then outstanding ordinary shares; (ii) Philips shall hold forty-eight percent (48%) of
SSMC’s then outstanding ordinary shares; and, (iii) TSMC shall hold thirty-two percent (32%) of SSMC’s then outstanding ordinary shares. 

The first SSMC share issue upon amendment of the Articles of Association will consist of Four Thousand Nine Hundred (4,900) SSMC
shares, it being understood that at that time Philips already holds and has paid for One Hundred (100) such shares prior to amendment of the Articles of Association pursuant to the terms of this Agreement. 

The number of shares within the authorized capital specified above which the Shareholders have agreed shall be issued in instalments to
and shall be subscribed by the Shareholders proportionately, shall be such that at the time of the last share issue referenced hereinafter, the total nominal value of the issued share capital of SSMC in Singapore Dollars will be near equal to Six
Hundred Million United States Dollars (US$ 600,000,000) on the basis of then current currency conversion rates at such last instalment or such lower amount as decided upon by the Board of Directors of SSMC by super majority vote as specified in the
second part of the second paragraph of Section 2.04. 
 The actual timing of the instalment share issues after the first
share issue referenced above and the exact number of shares included in each such further share issue will be decided upon by the Board of Directors of SSMC with due regard to, on the one hand, the agreed Initial Business Plan of SSMC attached as
Annex A hereto and any agreed updates or amendments thereto and on the other hand, the agreed 60-40 equity debt ratio, as to which it is agreed that negative deviations are acceptable until such time that all start-up losses will have recuperated,
on the understanding that the equity debt ratio of SSMC should never be worse than 40-60. 
  

	1.03	Option rights 

 At any
time after the issued share capital of SSMC has been paid in full up to the agreed US$ 600 million reference value, but within five (5) years after the date of this Agreement or such other date as may be mutually agreed upon in writing
between EDBI and Philips, Philips will have the right to purchase in one or more instances any or all of the shares held by EDBI against payment of a price determined on the basis of a detailed formula and other conditions set out in the frame of a
separate Option Agreement between Philips and EDBI of even date with this Agreement. 
  

			
	- 3 -	  	SSMC Shareholders Agreement 15 March 1999

 TSMC will have the right, but not the obligation to buy from Philips a pro-rata share of the
EDBI shares so acquired by Philips against payment of the all-inclusive price paid by Philips, including associated transfer costs, and acceptance of the conditions which Philips had to agree to when acquiring the said EDBI shares or any part
thereof. 
  

	1.04	Purpose and Scope of Business of SSMC 

The Shareholders shall organize and operate SSMC for the purpose of providing and selling manufacturing services in relation to the
fabrication and supply of tested and untested Integrated Circuits (ICs) in wafer or die form (“Products”) on the basis of product design specifications provided by its customers. Accordingly, 

SSMC will not engage in full IC product design or in packaging, unless otherwise agreed by super majority decision of the Board of
Directors of SSMC. 
 The scope of business of SSMC (“the Scope”), which shall focus on the fabrication of Products in
advanced production processes of 0.35 micron and below on the basis of an annual output capacity equivalent to 350,000 8” wafers, shall be limited in that SSMC shall provide manufacturing services and supply Products to and only to TSMC Group
and Philips Group. Accordingly, SSMC will not be engaged in marketing and sales, other than as required to supply its output to TSMC Group and Philips Group. 

The Shareholders agree and confirm that SSMC will at all times operate and will be managed as an independent enterprise on a commercial
basis. Its profit and growth ambitions are reflected in the agreed Initial Business Plan of SSMC referenced in Article VII and any agreed updates or amendments thereto approved by super majority decision of the Board of Directors of SSMC.

  

	1.05	Costs 

 All costs directly
related to the incorporation of SSMC and its first issue of shares, the subsequent re-organization of SSMC and outside financing arrangements according to the terms of this Agreement, including, without limitation, reasonable legal costs in that
regard, which are incurred by or on behalf of any of the Shareholders with the consent of the other Shareholders prior to the date of the first share issue upon amendment of the Articles of Association of SSMC, will be reimbursed by SSMC.

  

			
	- 4 -	  	SSMC Shareholders Agreement 15 March 1999

 ARTICLE II 

BOARD OF DIRECTORS, AUDITORS 

AND 

SHAREHOLDERS’ MEETINGS 
  

	2.01	The Board of Directors 

The overall management policy of SSMC shall be established by, and the operations of SSMC shall be under the general guidance and control
of the Board of Directors of SSMC, which shall have rights and privileges normally pertaining thereto as provided in the Republic of Singapore, unless expressly provided otherwise in this Agreement or in the Articles of Association of SSMC.

  

	2.02	Number of Directors 

 SSMC
shall have a Board of Directors composed of six (6) members. Each of the Shareholders will be from time to time entitled to nominate a number of Directors on a basis substantially proportionate to its then current shareholding in SSMC.

 Employees of SSMC will not be eligible for appointment to the Board of Directors of SSMC, but the CEO of SSMC will be invited
to the meetings of the Board of Directors as a non-voting member. 
  

	2.03	Election of Directors 

Promptly upon amendment of the Articles of Association of SSMC and the issuance of shares to the Shareholders as specified in
Section 1.02, third paragraph, the Shareholders shall elect and appoint a slate of Directors to the Board of Directors of SSMC according to the representation principle reflected in the preceding Section 2.02. Based on the participation
ratio set forth in Section 1.02, third paragraph, EDBI, Philips and TSMC will have the right to nominate one (1), three (3) and two (2) member(s) to the SSMC Board of Directors, respectively, at the time referenced in the preceding
sentence. 
 Each Shareholder will vote its SSMC shares on each future occasion such that the composition of the Board of
Directors will be or yet again become in accordance with the principle of representation reflected in the preceding Section 2.02. 

The chairman of the Board of Directors will be elected by the Directors appointed, on the understanding that for as long as Philips is the
largest shareholder of SSMC, the Board of Directors will at all times elect a Chairman from among the Philips’ representatives. 
  

			
	- 5 -	  	SSMC Shareholders Agreement 15 March 1999

	2.04	Directors’ Meetings 

Except as otherwise specifically provided hereinafter in this Section 2.04, the organization and operation of meetings of the Board
of Directors of SSMC, including subjects such as the quorum requirements therefor and the votes required with respect to certain actions to be resolved by the Board of Directors, shall be as specified in the Articles of Association of SSMC.

 However, notwithstanding any provision to the contrary in this Agreement or the Articles of Association of SSMC, SSMC shall
not (and each of the Shareholders hereto undertakes to take all such steps as are necessary to ensure that SSMC does not), take any action unless the Board of Directors has decided in favour of such action with super majority approval, meaning a
majority decision including at least one Board member appointed on the nomination of each of the Shareholders, in respect of the following: 
  

	 	(a)	proposals to shareholders as regards amendment of the Memorandum or Articles of Association or any other constitutional documents of SSMC; 

 

	 	(b)	proposals to shareholders to reduce or cancel the authorized and issued share capital of SSMC; 

 

	 	(c)	proposals to shareholders to issue new shares beyond the levels specified hereinabove in Section 1.02; 

 

	 	(d)	proposals to shareholders to liquidate SSMC; 

  

	 	(e)	proposals to shareholders to have SSMC cease doing business; 

  

	 	(f)	decisions and/or proposals to shareholders to admit new shareholders to SSMC other than allowed under this Agreement for wholly-owned Subsidiaries.

 and in respect of the following by a super majority decision, in which at least one Board member appointed on
the nomination of TSMC and one Board member appointed on the nomination of Philips have joined in the majority decision: 
  

	 	(g)	the appointment and dismissal of Members of the Management Team; 

  

	 	(h)	the adoption of the SSMC Business Plans (yearly updated, 4-year rolling plans as referenced in Article VII hereinafter), it being understood that the first year covered
by such Business Plan can and will be considered as the annual budget; 

  

			
	- 6 -	  	SSMC Shareholders Agreement 15 March 1999

	 	(i)	significant investments and divestments; 

  

	 	(j)	investments outside SSMC’s agreed waferfab business scope; 

  

	 	(k)	substantial above-budget spendings, and/or (loan) indebtedness; 

  

	 	(l)	technology transfer agreements between SSMC and any party. 

The Board of Directors of SSMC shall meet at least every three (3) months. Unless in case of urgent circumstances, notice of every
Board Meeting, including the agenda and relevant papers to be discussed in said Board Meeting shall be given to each Director and all contact-persons to whom notices are to be sent pursuant to Section 12.19, at least fourteen (14) days
prior to such meeting and may be given in writing or by fax at the address from time to time notified to SSMC by such Director. 

The quorum for each meeting of the Board of Directors of SSMC shall include at least one Director (or his alternate) nominated by each
Shareholder. The quorum for reconvened/adjourned meetings shall be any three (3) Directors (or their alternates), provided such quorum includes at least one Director (or his alternate) on the part of two (2) of the SSMC Shareholders. The
notice period for such reconvened/adjourned meeting shall at least be fourteen (14) days. 
 Decisions by the Board of
Directors outside an official meeting duly convened shall require unanimous approval of all Board members. 
 For avoidance of
any doubt, it is hereby confirmed that upon a permitted transfer of EDBI’s shares to a third party, EDBI has the option to transfer in accordance with the terms of this Agreement its consent-rights set forth herein (including EDBI’s right
to appoint one member of the Board of Directors) to such third party if such third party purchases at least half the total number of shares subscribed by and issued to EDBI. 

 

	2.05	Auditors 

 The auditors of
SSMC who shall be an accounting firm of international standing, shall be appointed by the General Shareholder Meeting of SSMC upon proposal by the Board of Directors. In this respect the Shareholders confirm that promptly upon amendment of the
Articles of Association of SSMC they shall do all things necessary to have Messrs KPMG of Singapore appointed as auditors of SSMC, unless otherwise agreed by the Shareholders. 

The duties of the auditors of SSMC shall be as specified in the Companies Act (Cap.50) of the Republic of Singapore as effective from time
to time. 
  

			
	- 7 -	  	SSMC Shareholders Agreement 15 March 1999

	2.06	Vacancies 

 If any vacancy
occurs, for any reason, in the Board of Directors of SSMC, such vacancy shall be filled by his alternate or an individual nominated by the Shareholder who had nominated the person to be replaced, and the Shareholders shall take such other actions,
as may be necessary, to cause the appointment or election of such alternate or nominee to the SSMC Board of Directors. The new nominee shall serve the balance of the term of his predecessor. 

 

	2.07	Removals 

 No Director
shall be removed, during the term for which he was elected, without the consent of the Shareholder that nominated that Director for election, which consent shall not be unreasonably withheld, unless that Director is engaged in any act or conduct
which is clearly illegal or in violation of his duties hereunder. If any Shareholder proposes to remove any Director it had nominated, each of the other Shareholders shall vote the SSMC’s shares held and/or controlled by it in favor of such
removal. 
  

	2.08	The Shareholders 

 The
shareholders of SSMC shall have the ultimate control over SSMC in conformity with the applicable laws of the Republic of Singapore as in effect at the time and from time to time. 

As specified in SSMC’s Articles of Association or as specified in any resolution duly passed or adopted at the shareholders’
meetings of SSMC, or as required by any applicable provision of Singapore law, certain matters shall be referred to, and passed upon, only by the shareholders of SSMC, and the actions, or the refusal to take actions, of the Board of Directors and
the officers of SSMC shall, in all respects and at all times, be in conformity with said charter document, any such resolutions or applicable law. Each Shareholder shall take whatever actions as are necessary to cause the Directors and officers of
SSMC nominated by it to act in accordance with the provisions of this Section 2.08. With due regard to the above, it is recognized that the shareholders’ meeting and the meeting of the Board of Directors are to act independently in
accordance with the relevant and applicable provisions of Singapore law. 
 2.09 Shareholders’ Meetings 

Regular shareholders’ meetings of SSMC shall be called as specified in the Articles of Association of SSMC. Special
shareholders’ meetings shall be called by the Board of Directors of SSMC, or by any other person entitled to call a shareholders’ meeting under the Companies Act of the Republic of Singapore, by complying with the notice and other
procedures with respect thereto set out in SSMC’s 
  

			
	- 8 -	  	SSMC Shareholders Agreement 15 March 1999

 Articles of Association. It is hereby further confirmed that all Shareholders shall act in
accordance with Section 2.04 and consequently no shareholder’s resolution shall be taken on any of the issues indicated in Section 2.04, if and as long as the required Board of Directors decision has not been made in accordance with
said Section 2.04 and so unless and until the Board of Directors has passed a resolution referring the matter to the Shareholders. 

ARTICLE III 

MANAGEMENT AND ACCOUNTING PRACTICES 
  

	3.01	Management Team 

 The SSMC
Management Team will be responsible for the day-to-day operation of SSMC and will consist of such number of persons as the Board of Directors will determine from time to time. 

The Management Team will in any event include a Chief Executive Officer (“CEO”), a Chief Operations Officer (“COO”)
and a Chief Financial Officer (“CFO”). In addition, the Management Team will include the two senior managers (if any) nominated by TSMC pursuant to the second paragraph of Section 3.03. 

In specific cases, Management Team decisions will be subject to approval or super majority approval by the Board of Directors and/or the
General Meeting of Shareholders as the case may be. 
  

	3.02	The CEO of SSMC 

 The CEO
of SSMC will be an individual with proven capabilities in the management of an advanced IC production industry and will, upon good faith consultation between Philips and TSMC, be elected at the nomination of Philips by resolution of the Board of
Directors of SSMC. 
 The CEO of SSMC shall be responsible for the overall control of the business and operation of SSMC and
shall report to the Board of Directors of SSMC. Subject to the policies of SSMC set by the Board of Directors of SSMC, he shall supervise and control the day-to-day business and operations of SSMC. 

 

	3.03	Other Senior Management Personnel 

Philips will be given the right to make nominations for the CFO and COO positions upon consultation with TSMC. 

 

			
	- 9 -	  	SSMC Shareholders Agreement 15 March 1999

 TSMC will have the right to nominate two expert senior managers, one of whom shall be the
controller, to act as department heads under the responsibility of the CFO and the COO, if the COO and CFO would not be hired from or at the recommendation of TSMC. 

During the initial joint venture period TSMC will have the right to send at any time an expert senior manager to work at SSMC in a senior
position as operations engineer. 
  

	3.04	Salaries and Incentive Payments 

All members of the senior management staff of SSMC, including the CEO and the members of the SSMC Management Team, shall be paid regular
salaries for their services as determined by the Board of Directors of SSMC. 
 Incentive payments in line with local market
conditions consistent with the goals of SSMC will be determined and applied according to decision by the Board of Directors of SSMC. 
  

	3.05	Accounting and Reporting Practices 

  

	 	(a)	The fiscal year of SSMC shall start as of January 1 and end on December 31 of the same year. 

 

	 	(b)	The CEO of SSMC shall cause to be prepared and furnished to the Board of Directors of SSMC a balance sheet of SSMC and SSMC’s profit and loss statement and cash
flow statement with explanatory notes , as of the end of each calendar month, quarter and year. Monthly and quarterly statements shall be furnished in accordance with the reporting requirements of Philips as generally applicable to the members of
Philips Group, and year-end statements shall be furnished no more than thirty (30) days after the end of each year. 

  

	 	(c)	All such financial statements shall be prepared in accordance with Philips General Accounting Principles consistently applied, in as far as not in conflict with the
accounting principles prescribed by applicable Singapore Law. Unless a Shareholder reasonably objects thereto, SSMC shall further prepare its audited annual accounts in accordance with the Statements of Accounting Standard applicable in Singapore.

  

	 	(d)	 As regard the year-end financial statements, it has been agreed that within one month following the end of each fiscal year, the CEO of SSMC will cause
to be prepared and furnished to the Board of Directors of SSMC the unaudited annual accounts of SSMC (provisional balance sheet, profit and loss statement and cash flow statement with explanatory notes). The audited

  

			
	- 10 -	  	SSMC Shareholders Agreement 15 March 1999

	 	
annual accounts of SSMC will be submitted within two (2) months following the end of the fiscal year. The auditing of the year-end financial statement shall be done by SSMC’s auditors
appointed as specified in Section 2.05 at SSMC’s cost and expense. 

  

	 	(e)	SSMC, at its own expense, shall also produce any other reports required by the competent authorities in the Republic of Singapore. 

ARTICLE IV 

RESTRICTION ON TRANSFER OF SHARES 

AND ON NEW ISSUES 
  

	4.01	Restriction on the Disposal of SSMC Shares 

Each party hereto understands that the other parties are entering into this Agreement and subscribing to shares in SSMC in reliance upon
the continuing involvement of the other parties in the business affairs and operations of SSMC, Philips and TSMC as business and technology partners and EDBI as a business investment promoter and financial shareholders for a limited period of time.
Accordingly, except as permitted under Section 1.03, which specifies an option by Philips on shares owned by EDBI, none of the Shareholders shall divest any of its shares in SSMC within five (5) years after the date of this Agreement
(except for any transfer to a wholly-owned Subsidiary as and when permitted pursuant to Section 4.03 hereof). 
 In
addition, as regards TSMC and Philips it is further agreed between them that neither of them may divest any of its shares in SSMC from the sixth year up to and including the tenth anniversary of the date of this Agreement, to a third party outside
its own Group without the prior written consent of the other party, which consent shall not unreasonably be withheld. 
  

	4.02	Right of First Refusal 

With due regard to the provisions of Section 4.01 hereinabove and except in case of exercise of the option under Section 1.03,
in the event that any Shareholder (the “Seller”) receives at any time a bona fide offer (which offer the Seller shall be entitled to solicit) for its ownership interest in the registered capital of SSMC (a “Valid Offer”) from
either any Shareholders or an unrelated, independent third party, being any third party or any company in which a Shareholder owns or controls, directly or indirectly, fifty percent (50%) or less of the voting shares (the “Offeror”) ,
the Seller may sell, assign and transfer all but not less than all of its 
  

			
	- 11 -	  	SSMC Shareholders Agreement 15 March 1999

 
ownership interest to the Offeror, provided that the Seller shall first have offered to the other Party or Parties the following rights in accordance with the following provisions: 

 

	 	(a)	the Seller shall first give to all of the other Shareholders (herein referred to as the “Non-Selling Parties”) a written notice of its desire to sell and
transfer its ownership interest (“Notice of Intent”) to the Offeror and shall stipulate therein the price, term and conditions of the Valid Offer, and shall attach a copy of the Valid Offer; 

 

	 	(b)	within sixty (60) days of receipt of the Notice of Intent, any one or more of the Non-Selling Parties shall give the Seller (i) notice of its intent to
purchase the Seller’s ownership interest upon the same terms and conditions as the Valid Offer (“Notice of Purchase”), (ii) notice of its objection to the Offeror (“Notice of Objection”), or (iii) notice of refusal
of the aforementioned options (“Notice of Refusal”). In the event that any Non-Selling Party fails to give any of the notices contemplated in this subsection within the prescribed period, any such Non-Selling Party shall be deemed to have
irrevocably given a Notice of Refusal; 

  

	 	(c)	in the event that any one or more of the Non-Selling Party(ies) give(s) Notice of Purchase, the Seller shall sell and transfer its ownership interest to the Non-Selling
Party(ies) having given Notice of Purchase, and in case of more than one such Non-Selling Party(ies), then on a pro rata basis according to their then shareholding in SSMC, which the Non-Selling Party(ies) shall purchase upon the same terms and
conditions as the Valid Offer and the closing of said purchase shall take place on the sixtieth (60th) day following receipt of the Notice(s) of Purchase at 10:00 a.m. local time at the head office of SSMC or such other date, time and place as
may be agreed upon in writing by the Seller and the Non-Selling Party(ies) concerned; 

  

	 	(d)	in the event that any one or more of the Non-Selling Party(ies) give(s) Notice of Objection, which shall be exercised reasonably, the Seller shall not sell, assign and
transfer any of its ownership interest to the Offeror and each such Non-Selling Party(ies) having given Notice of Objection shall within ten (10) days following the Notice of Objection send to the Seller its explanation of the reasons based on
which such Non-Selling Party considers the concerned objection to the Offeror in the exercise of its reasonable discretion justified; 

  

	 	(e)	in the event that all the Non-Selling Parties give Notice of Refusal or are deemed to have given a Notice of Refusal, the Seller may sell and transfer its ownership
interest to the Offeror upon the price, terms and conditions of the Valid Offer, provided that the Offeror must purchase the Seller’s entire ownership interest within ninety (90) days from the date of the Notice of Intent;

  

			
	- 12 -	  	SSMC Shareholders Agreement 15 March 1999

	 	(f)	notwithstanding any provision to the contrary herein, it is a mandatory condition of the Valid Offer that the Offeror shall pay cash to the Seller.

  

	4.03	Permitted Transferees 

 In
the event of any transfer of shares in SSMC during the term of this Agreement from a Shareholder to an outside third party, any company in which a Shareholder owns or controls, directly or indirectly, fifty percent (50%) or less of the voting
shares or to a Subsidiary within its own Group, it shall be a condition precedent to such a transfer that the transferee and each of the Shareholders who shall dispose of any or all of its shares in SSMC or any beneficial interest therein and all
Shareholders, shall enter into a further agreement to the effect that the rights and obligations of the disposing party under this Agreement are fully and effectively assumed by the transferee (provided that if a transferee does not acquire the
entire interest of the transferor, such rights shall only be capable of being exercised jointly with the disposing party), without prejudice to any rights or obligations of any party for breach of this Agreement prior to the date of such disposal.

  

	4.04	Pre-emptive Right 

 Each
of the Shareholders, in its capacity as shareholder in SSMC, shall have a preemptive right (but not an obligation, except for the share issues referenced in the fourth paragraph of Section 1.02) to subscribe and pay for additional shares of
SSMC, which may from time to time be issued or proposed for issuance, in proportion to its ownership of shares of SSMC immediately prior to such issuance. 

ARTICLE V 

BACK-UP SUPPORT 
  

	5.01	Financing 

 It is agreed
that SSMC will be funded in accordance with the finance plan to be established in agreement between the Shareholders as part of the Initial Business Plan of SSMC and any agreed updated or amendments thereto. In this respect the Shareholders have
taken due note that SSMC is eligible for and will be able to obtain a special Intech grant for some S$ 50 million and a special Capital Assistance Scheme loan for an amount of S$ 600 million at favourable terms. It is also noted that
SSMC will enjoy a 10-year tax holiday in Singapore. 
 Other loans to support the operation of SSMC will be obtained from
Shareholders or any of them, if found willing or from banks or similar institutions on 
  

			
	- 13 -	  	SSMC Shareholders Agreement 15 March 1999

 
commercial terms and conditions, on the understanding that it will be the aim that if any security is required, SSMC arranges for such security on the basis of its own assets and activities.

 As regards profits it is understood that unless otherwise decided by the Board of Directors by super-majority vote including
at least one (1) representative of each of the Shareholders at the time participating in SSMC, net earnings shall be distributed in full by way of cash dividend, it being understood that in no event dividend payments shall be made till the time
all SSMC’s losses in previous years have been recuperated and that no dividend shall be paid during the period Philips has the right and option to buy shares in SSMC held by EDBI as specified in Section 1.03. 

 

	5.02	Technology Support 

 Each
of TSMC and Philips will support SSMC by the transfer of full and complete information as regards advanced processes then in current volume production use at TSMC Group and Philips Group, as the case may be, as and when and in time as needed for
SSMC to meet its agreed business objectives. It is expressly understood that the technology furnished by TSMC Group and Philips Group shall be used by SSMC only for production at the order of or as agreed by TSMC or Philips, as the case may be, and
for no other purpose. 
 In addition to the general remuneration as specified in the Technology Cooperation Agreements between
SSMC on the one hand and Philips and TSMC respectively, on the other hand, (hereafter “Technology Cooperation Agreements”) , SSMC will pay the Group arranging the transfer of a new process all reasonable cost associated with such transfer
and the installation of such process at SSMC. 
 The cost associated to technical support of a Group in the qualification of a
new product will be borne in accordance with the terms of the Technology Cooperation Agreements. 
 Improvements to installed
processes requiring technical support by the Party interested in its use will be provided to SSMC in accordance with the terms of the Technology Cooperation Agreements. 

All other technical support, not covered by the above Technology Cooperation Agreements, will be provided by or at the instruction of TSMC
and Philips to SSMC at arm’s length prices. 
 Each of TSMC and Philips will use all reasonable efforts to have SSMC
included under their patent cross license agreements with third parties to the extent current have made arrangements and licenses provide insufficient coverage. It is understood that this undertaking may justify a separate remuneration in the frame
of the Technology Cooperation Agreements referred to above. 
  

			
	- 14 -	  	SSMC Shareholders Agreement 15 March 1999

	5.03	Lease 

 EDBI will use all
reasonable endeavours to assist SSMC in securing a Lease Agreement covering land and buildings at the Pasir Ris Wafer Fab Park with Jurong Town Corporation on most favorable terms and conditions. 

 

	5.04	General Support 

 Apart
from their direct participation, aid and contributions in and to the management and business of SSMC, each of the Shareholders, directly or through their respective designees, are willing to provide general back-up support services to SSMC on a
commercial basis. For EDBI this undertaking means that it will assist SSMC in the search and hiring of expert personnel, whilst for Philips this undertaking includes the preparedness to have its Singapore Subsidiaries provide general head office
services as and to the extent required 
 ARTICLE VI 

CAPACITY RIGHTS AND LOADING COMMITMENTS 
  

	6.01	Capacity Rights and Prices 

It is agreed that after the initial ramp-up period Philips Group and TSMC Group will have rights as regards the actual annual capacity of
SSMC as follows: 
  

									
	 Philips Group:    60%
	  		  		  		  	
	 TSMC Group:    40%
	  		  		  		  	

 After the initial-ramp up the capacity of SSMC shall be determined on an annual basis as set forth
in Annex A to this Agreement, which Annex contains the Initial Business Plan referred to in Article VII. 
 SSMC will
charge TSMC Group and Philips Group for Products supplied to them at prevailing market prices to be determined each quarter or other agreed period in good faith agreement between expert representatives designated by TSMC, Philips and SSMC ***.

  

	6.02	Loading Commitments 

 TSMC
and Philips both will strive to load SSMC as much as possible. In this respect, it is agreed that if either TSMC or Philips concludes in respect of any particular year that its Group will not be able to load its capacity obligation for

  

			
	- 15 -	  	SSMC Shareholders Agreement 15 March 1999

 
any reason, it will promptly notify the CEO of SSMC. In that event the CEO will offer the capacity not utilized by that one Group to the other Group. Each of TSMC and Philips will ensure that its
Group representative will respond to such notification by the CEO of SSMC without delay. 
 TSMC and Philips further agree that
in respect of each year after the initial ramp-up period they and their respective Groups each will have the obligation to provide load to SSMC for minimum volumes equal to at least 70% of their respective rights on SSMC’s annual capacity as
determined in respect of each such year on the basis of the capacity calculations elaborated in Annex A. 
 In case
total capacity usage in any particular year after initial ramp-up falls below 70% of total available capacity as determined on the basis of the capacity calculations elaborated in Annex A, a cost compensation scheme will be applicable which
will provide full coverage for all unavoidable costs directly associated with any shortfall in respect of the agreed 70% of total available capacity as incurred by SSMC (“the Unavoidable Shortfall Costs”). Unless otherwise proposed and
agreed in good faith upon reasonable consideration of all pertinent elements, shortfall cost compensation payment will be due and payable by TSMC and/or Philips, as the case may be, to the extent for any reason TSMC Group and/or Philips Group did
not meet their respective loading obligations (i.e. Philips 70% of 60%, and TSMC 70% of 40%), but never for an aggregate amount higher than needed to cover the total amount of the Unavoidable Shortfall Costs. 

Annex B to this Agreement shall provide the Rules as regards the calculation of shortfall compensation payments. 

ARTICLE VII 

BUDGETS AND BUSINESS PLANS 

Before October 15 of each calendar year as long as the fiscal year of SSMC corresponds to the calendar year, the Management Team shall submit to the
Board of Directors of SSMC for its approval a Business Plan according to an agreed format, which shall be forward looking and cover at least four (4) years. The first such Business Plan, also referred to as the Initial Business Plan, is
attached as Annex A to this Agreement. 
 Each Business Plan will at all times deal with the following matters in detail: 

Strategy, Products, SSMC technology plan, including technology roadmap, process assumptions, product/process qualification, quality
management and capacity ramp-up, and the operations/financial plan including key assumptions, spending, staffing, factory loading, factory output, cost assumptions, profit/loss, the balance sheet, funds flow, the capital plan and accounting.

  

			
	- 16 -	  	SSMC Shareholders Agreement 15 March 1999

 For greater certainty it is confirmed that the Business Plans of SSMC will pay due regard to the confirmed
objective of the Shareholders that SSMC will meet performance parameters and achieve a ramp-up plan, which is according to best in-class standards. 

The Board of Directors of SSMC shall approve each Business Plan with such modifications as it may deem necessary, within a period not exceeding one
(1) month after receipt of the proposal by the Management Team as referenced in the first paragraph of this Article VII. 
 Upon
approval by the Board of Directors of SSMC, the annual operational and investment budget for the following year, as contained in Business Plan concerned, shall be considered the approved operational and investment budget. 

If, for any reason, the Board of Directors of SSMC shall not have approved an updated Business Plan for the next period, the operational and investment,
budget for such next period shall be taken from the last Business Plan approved by the Board of Directors of SSMC. 
 ARTICLE
VIII 
 EXCHANGE OF INFORMATION 

AND 

PROTECTION OF CONFIDENTIAL INFORMATION 

It is recognized that in order to achieve an expeditious start for the desired cooperative relationship between the parties in and with regard to SSMC,
certain highly confidential technical and business information will have to be disclosed in discussions among engineers and experts of the parties. In this connection it is agreed that each party shall use technical information received from the
other party for review purposes only and shall treat as confidential and hold in strict confidence any and all business and technical information clearly marked by said other party as confidential, whether initially disclosed orally, or in writing,
by demonstration or otherwise, provided that if such confidential information is not initially disclosed in writing, it is reduced to writing by the disclosing party within thirty (30) days after disclosure to the receiving party. 

Confidential Information of the disclosing party will be treated by the receiving party in the same manner and with the same degree of care as it applies
with respect to its own confidential information. The receiving party shall disclose confidential information of the disclosing party only to its employees and employees of its affiliated companies, who have a need to know and are aware of and have
agreed to respect the conditions set forth herein. 
  

			
	- 17 -	  	SSMC Shareholders Agreement 15 March 1999

 The parties hereto agree that they shall not disclose confidential information received from the other party
to third parties, unless and to the extent that the receiving party can prove by written record or otherwise that said information: 
  

	 	(a)	was already in its possession prior to disclosure thereof by the other party; 

 

	 	(b)	is or becomes publicly known through no fault of the receiving party; 

  

	 	(c)	was lawfully obtained from a third party, who was free to disclose same without a confidentiality obligation; 

 

	 	(d)	was necessarily disclosed as the result of a commercially available product by a person other than the receiving party; 

 

	 	(e)	was disclosed as required by law; or 

  

	 	(f)	was independently developed by the receiving party without use of the confidential information of the disclosing party. 

The furnishing of any information hereunder shall not be construed as the granting of a license under any patent, patent application, copyright or any
other industrial or intellectual property right or as implying any obligation other than as specifically recited herein. 
 The parties hereto
further agree that except as required by law or in the framework of any dispute-resolution pursuant to Section 11.03 or in connection with obtaining outside legal advice on a confidential basis, they shall not disclose to any third party or
make any public announcement to news media or otherwise with respect to the terms and conditions of this Agreement without the prior written consent of the other parties, to the extent such terms and conditions are not publicly known by any other
means such as via the Articles of Association. 
 ARTICLE IX 

FREEDOM OF ACTION 

Except as may be expressly provided otherwise in this Agreement, nothing will impair the rights of the parties or their respective Group to develop,
make, use, market, sell, procure, or otherwise deal in products or services now or in the future, individually or jointly with others, which may be competitive, or compatible with, or relate in any way to the Products. 

 

			
	- 18 -	  	SSMC Shareholders Agreement 15 March 1999

 ARTICLE X 

COMMERCIAL EFFICACY: 

CONTROL OVER AND LIABILITIES FOR ACTIONS BY 

DIRECTORS AND OFFICERS 
  

	10.01	Obligation to give effect to this Agreement; Control over Directors and Officers. 

Subject to applicable Singapore law, the parties hereto shall, in their capacity as Shareholders of SSMC, use all reasonable endeavors to
assist SSMC in effecting commercial efficacy to the business of SSMC, as contemplated in this Agreement, and each of them shall help promote the business of SSMC by causing the Directors and Officers of SSMC nominated by it (in their capacity as
such Directors and Officers) to take all necessary actions which are the duties, obligations and/or responsibilities of such Directors and Officers (including executing, delivering or filing certificates, agreements and instruments and complying in
full with all legal requirements for the operations of SSMC) as if such Directors and Officers were the parties hereto and directly bound hereby, all in a timely fashion. 

In addition, the parties hereto, in their capacity as Shareholders of SSMC, shall take all actions necessary to cause the Directors and
Officers of SSMC nominated by them to comply with the terms of this Agreement, and to take such other actions as shall be needed to promote the agreed policies and objectives of SSMC. 

 

	10.02	Liability 

 The breach of
any applicable law, rule, regulation or any provision of this Agreement or the Articles of Association of SSMC, or the taking of actions or the failure to take actions, prohibited or required by resolutions adopted at any shareholders’ or Board
of Directors’ meeting, by any Director or officer of SSMC nominated by any party hereto, shall be deemed to be a breach of this Agreement by that party, who shall be liable to the other parties hereto and SSMC for all losses and damages arising
therefrom, unless the party in breach shall have taken remedial actions within a period of sixty (60) days to have such breach cured. 
  

			
	- 19 -	  	SSMC Shareholders Agreement 15 March 1999

 ARTICLE XI 

GOVERNING LAW AND RESOLUTION OF DISPUTES 
  

	11.01	Governing Law 

 This
Agreement and each part thereof shall be governed by and construed in accordance with the laws of Republic of Singapore. 
  

	11.02	Negotiations 

 Parties
hereto agree to endeavor to identify in advance issues that could generate controversies or disputes, in order to permit their early resolution by friendly negotiations, and to use their best efforts to negotiate in good faith, for a period of sixty
(60) days or such other period as shall be mutually agreed upon by them, to resolve all such controversies or disputes in an amicable manner. 
  

	11.03	Arbitration 

 In the event
that any controversy or dispute among parties hereto arising out of or in connection with the validity, effectiveness, construction or performance of this Agreement, or any amendment, modification or addition hereto, or as to the construction
hereof, or with respect to the rights, obligations or liabilities of any party hereunder (unless such agreements, amendments, modifications or additions expressly state that they shall not be subject to this Article XI) cannot, in the sole judgment
of any party to the controversy or dispute, be resolved by negotiation pursuant to the terms of the preceding Section 11.02, then such party may require that such controversy or dispute be referred to, and settled by, arbitration proceedings in
Singapore in accordance with the Arbitration Rules of the Singapore International Arbitration Center (“SIAC Rules”) from time to time in force , which SIAC Rules are deemed to be incorporated by reference in this Section 11.03. The
law of the arbitration shall be the International Arbitration Act Cap. 143A. The language of the arbitration shall be the English language. 

Any award of the Arbitral Tribunal shall be rendered in writing; shall state the reasons on which it was based and shall be final and
binding on all parties hereto. The cost of arbitration shall be borne and paid for as the Arbitral Tribunal may direct in the award. 
  

	11.04	Enforcement of Arbitral Award 

Judgment upon any arbitral award rendered under the preceding Section 11.03 may be entered in a competent court in the Republic of
Singapore, where application may be made to such court for judicial recognition of that award and an order of enforcement, as the law of such jurisdiction may require and allow. 

Each party hereto hereby agrees that any judgment upon an arbitral award rendered under the preceding Section 11.03 may be executed
against the assets of that party in any jurisdiction. Each party hereto hereby also irrevocably submits to the jurisdiction of the court of any jurisdiction in any legal action or proceeding relating to such execution. 

 

			
	- 20 -	  	SSMC Shareholders Agreement 15 March 1999

 ARTICLE XII 

MISCELLANEOUS 
  

	12.01	Term and Termination 

  

	 	(a)	This Agreement shall take effect on the date on which it is signed by each of the three signatory parties and shall continue unless otherwise agreed in full force and
effect as long as TSMC and Philips (together with their designated Subsidiaries and/or employees) each control at least eighty percent (80%) of the original total shareholding subscribed to by each of them pursuant to Article 1.02.

  

	 	(b)	Upon the sale of all of its shares by EDBI, all rights and obligations of EDBI under this Agreement shall terminate except that all claims of any party hereto,
including EDBI, against any other party for damages arising out of acts or omissions of such other party under this Agreement prior to the sale of all its shares by EDBI, shall survive such termination, and except that the provisions of Article
VIII, Article XI and this Article XII shall survive such termination. 

  

	 	(c)	Similarly, upon termination of this Agreement, all of the rights and obligations hereunder shall terminate except that all claims of any party hereto against any other
party for damages arising out of acts or omissions of such other party under this Agreement prior to termination, shall survive such termination, and except that the provisions of Articles 1.01, 2.03, 2.04 second paragraph and subsections
(a) to (f) as well as last paragraph, first paragraph of 4.01, 4.03, VIII, XI and XII shall survive such termination. For the avoidance of any doubt, it is hereby confirmed that also upon termination of this Agreement the Directors and
Officers of SSMC shall (and when needed, caused by the Shareholders to) take all necessary actions which are the legal duties, obligations and/or responsibilities of such Directors and Officers. 

 

	12.02	Force Majeure 

Notwithstanding any other provision of this Agreement, in the event that the performance of an obligation under this Agreement by a party
is prevented due to acts of God, governmental acts or decisions, wars, hostilities, blockades, civil disturbances, revolutions, strikes, lockouts, fire, typhoons, tidal waves, flood or any other causes beyond the reasonable control of such party,
such party shall not be responsible to the other parties hereto for failure or delay in the performance of its 
  

			
	- 21 -	  	SSMC Shareholders Agreement 15 March 1999

 obligations under this Agreement; provided that prompt notice shall have been given to all
of the other parties of the occurrence of such force majeure event. If such an event continues for more than three (3) consecutive months, the parties hereto shall consult with each other about the continuation of this Agreement. 

The foregoing provisions shall not exempt any party hereto from its duty to perform its obligations under this Agreement as soon as
practicable after a force majeure event ceases to exist. 
  

	12.03	Representations and Warranties 

  

	 	Each	of the Shareholders to warrant and represent as follows: 

  

	 	(a)	It is a corporation duly organized and validly existing under the laws of its place of incorporation, and is not in receivership or liquidation or judicial management
or any analogous situation. 

  

	 	(b)	It has full corporate power and authority to enter into, execute, deliver and perform all of its obligations under the Agreements and any other agreements to be
executed by the Shareholders. 

  

	 	(c)	All actions, conditions and all corporate steps required to be taken, fulfilled and done (including the obtaining of any necessary consents) in order (i) to enable
such party lawfully to enter into, exercise its necessary rights and perform and comply with its obligations under, this Agreement, and (ii) to ensure that those obligations are legally binding and enforceable have been taken, fulfilled and
done. 

  

	 	(d)	All agreements and instruments of such party contemplated hereby shall be the legal, valid binding agreement of such party, enforceable against such party in accordance
with their terms. 

  

	 	(e)	The execution, delivery and performance of the Agreements and the consummation of the transactions contemplated in it will not conflict with any law, order, judgment,
decree, rule or regulation of any court, arbitral tribunal or government agency, or any agreement, instrument or indenture to which such party or any of its related corporations is a party or by which any thereof is bound. 

 

	12.04	Disclaimer of Agency 

This Agreement does not constitute any party hereto as the representative or agent of any other party hereto or SSMC, nor does any party
hereto have the right or authority to assume, create, or incur any liability or any obligation of any kind, express or implied, against or in the name of or on behalf of any other party hereto or SSMC, except as otherwise expressly stated herein.

  

			
	- 22 -	  	SSMC Shareholders Agreement 15 March 1999

 None of the parties hereto is authorized to accept legal process on behalf of any other
party hereto or SSMC. 
  

	12.05	Assignment 

 Unless
otherwise provided in this Agreement, none of the parties hereto may assign, transfer or otherwise convey its rights, interest or obligations hereto, herein or hereunder in whole or in part to any party in or outside its Group, without (i) the
prior written consent of all of the other parties hereto and (ii) the agreement of the assignee to be bound by and fulfill all of the obligations and duties hereunder of the assigning party, it being understood that the parties have agreed to
accept an assignment of this Agreement by a party to a member of its Group directly or indirectly wholly owned by the respective Shareholder, if the assigning party expressly confirms the undertaking reflected under (ii) above. 

 

	12.06	Entire Agreement 

 This
Agreement, together with its annexes, constitutes the entire agreement and understanding between the parties hereto with respect to all matters provided herein, and supersedes and cancels all previous negotiations, statements, representations,
undertakings, and agreements, if any, theretofore made between the parties hereto including but not limited to that Heads of Agreement between Philips Semiconductors International B.V. and TSMC dated September 1/15, 1998. 

 

	12.07	Annexes 

 All Annexes to
this Agreement shall be deemed an integral part hereof. 
  

	12.08	Indemnification 

 Members
of the Board of Directors and all employees of SSMC will have no liability for acts, omissions or obligations of SSMC or for their actions and omissions on behalf of SSMC (for which SSMC shall take up a Directors’ and Officers’ liability
insurance), except in the event of fraud or gross negligence. 
 Each such member or employee shall be indemnified by SSMC, for
any liability arising out of actions or omissions of that member or employee on behalf of SSMC, except in the case of fraud or gross negligence. 
  

			
	- 23 -	  	SSMC Shareholders Agreement 15 March 1999

	12.09	Modifications or Amendments  

No modification or amendment of this Agreement or any exhibit hereto shall be valid or binding, unless made in writing and signed by the
duly authorized representatives of all parties hereto. 
 No waiver of any of the terms or conditions hereof shall be valid or
binding, unless made in writing and signed by the duly authorized representatives of all parties hereto. 
  

	12.10	Counterparts 

 This
Agreement may be executed in a number of counterparts, each such counterpart being deemed an original and all such counterparts together constituting one single instrument. 

 

	12.11	Section Headings 

 Section
and Article headings herein are for convenience only and shall not affect the construction hereof. 
  

	12.12	Number 

 Unless the
context otherwise requires, all words denoting the singular shall be taken to include the plural, and vice-versa. 
  

	12.13	Successors and Assigns 

Subject to the provisions hereof, this Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their
respective successors and permitted assigns. 
  

	12.14	Forbearance 

 The failure
of any party hereto to seek redress for violation of, or to insist upon the strict performance of, any covenant, term, condition or obligation contained in this Agreement shall not prevent a subsequent similar act, which would have originally
constituted a violation, from having the effect of any original violation. 
  

	12.15	Severability 

 Any
provision of this Agreement which is invalid, illegal or unenforceable in any respect in any jurisdiction shall be, as to such jurisdiction, ineffective to the extent of such invalidity, illegality or enforceability of the remaining provisions
hereof, 
  

			
	- 24 -	  	SSMC Shareholders Agreement 15 March 1999

 and any such invalidity, illegality or unenforceability in any jurisdiction shall not
invalidate or in any way affect the validity, legality or enforceability of such provision in any other jurisdiction. 
  

	12.16	Rights Cumulative 

 The
rights and remedies provided in this Agreement are cumulative, and the exercise of any right or remedy by any party hereto shall not preclude or be deemed a waiver of such party’s rights to arbitrate, sue or otherwise claim compensation for
losses and damages, or pursue any and all other remedies. Said rights and remedies are given in addition to any other rights or remedies such party may have at law, or under any statute, rules, regulation, or otherwise, except to the extent as such
rights and remedies are otherwise expressly restricted by this Agreement. 
  

	12.17	Controlling Language 

This Agreement has been signed and delivered in the English language, which shall be controlling. In case of conflict or discrepancy
between the original in the English language and any translation, the original shall always prevail. 
  

	12.18	Expenses 

 Subject to any
other provision herein to the contrary, each party hereto shall bear the expenses incurred by it in the performance of this Agreement, except that the expenses relating to the formation of SSMC and the issuance of its stock certificates, including
all related taxes, stamp duties, fees, registration charges and legal and notarial expenses, shall be borne by SSMC. 
  

	12.19	Notices 

 All notices,
demands, consents, requests or other communications provided for or permitted to be given pursuant to this Agreement shall be in writing and shall be deemed properly delivered, given or served, when (a) personally delivered, (b) delivered
by telecopier, or (c) mailed by certified or registered mail, postage prepaid, addressed to the Parties at the following addresses: 
  

			
	If to EDBI, to:	  	EDB Investments Pte Ltd
		  	 250 North Bridge Road

#27-04 Raffles City Tower
 Singapore
179101

		  	Att.: General Manager and Legal Manager
		  	Fax: (65) 3362503

  

			
	- 25 -	  	SSMC Shareholders Agreement 15 March 1999

			
	If to Philips, to	  	 Philips Semiconductors International B.V.

Hurksestraat 19
 5652 AH Eindhoven

The Netherlands
 Att.: General Counsel

Fax: (31) 40 2724005

		
	If to TSMC,to:	  	 Taiwan Semiconductor Manufacturing Company, Ltd.

No 121 Park Avenue III
 Science-Based Industrial
Park
 Hsinchu
 Taiwan, Republic of
China
 Att.: President of TSMC
 Fax:
(886) 3 5785295

 all notices so mailed shall be deemed received at the earlier of actual receipt or three
(3) business days after depositing the same in the mail. Any party hereto may change its address for the purpose of this Section 12.19 by giving ten (10) days’ prior written notice of such change of address to the other parties
in the manner herein provided. 
 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of this 30th day of March 1999

  

					
	EDB Investments Pte Ltd	  	Koninklijke Philips Electronics N.V.	  	
			
	
 

	  	
 

	  	
	Name: Liow Voon Kheong	  	A.P.M. van der Poel	  	
	Designation: General Manager	  	 Executive Vice-President and Chairman and

CEO Philips Semiconductors
	  	
	Taiwan Semiconductor	  		  	
	Manufacturing Company Ltd	  		  	
			
	

	  		  	
	  
	  		  	
	Morris Chang	  		  	
	Chairman of the Board & CEO	  		  	

  

			
	- 26 -	  	SSMC Shareholders Agreement 15 March 1999

 Annex A 

SSMC Initial Business Plan—Starting Points 

CapEx of MUS$*** for 360K wafers per year 

Load shared 60/40 between Philips and TSMC 

Load will be principally 0.25um, with some 0.35um and 0.18um 

Wafers sold to TSMC and Philips at Market price less 10% 

Royalty fees of *** of sales payable 

Share Capital reaches a maximum of MUS$*** in Q2 of 2002 

Thereafter debt maintained at *** 

Cost levels benchmarked and agreed by TSMC and Philips 

Ramp-up in line with the agreed plan; complete in Q4 2002 

Ground-breaking Q2 1999; First wafers out Q4 2000 

IBP Final 
  

 1 

 SSMC Initial Business Plan – Sales, Supplies and Results 

 

																															
	US$ millions	    	1999	 	 	2000	 	 	2001	 	 	2002	 	 	2003	 	 	2004	 	 	2005	 	 	2006	 	 	2007	 	 	2008	 
		    			 			 			 			 			 			 			 			 			 		
	 8” Wafers:
	    			 			 			 			 			 			 			 			 			 		
	 Installed Capacity
	    			 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  
	 Yield
	    			 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  
	 Wafers Out
	    			 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  
											
	 Sales & Supplies
	    			 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  
											
	 IFO
	    	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  
	 as % of sales & supplies
	    			 			 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  
											
	 NEBT
	    	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  
											
	 NOC
	    	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  
											
	 CapEx
	    	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  
											
	 Operational Cash Flow
	    	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  
	 Cumulative
	    	*	** 	 	*	** 	 	*	** 	 	*	** 	 	*	** 	 	*	** 	 	*	** 	 	*	** 	 	*	** 	 	*	** 
	 Headcount
	    	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  
											
	 Royalties paid
	    			 			 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  
	 Dividends paid
	    			 			 			 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  	 	***	  

 IBP Final

  

 2 

 SSMC Initial Business Plan – Financing 

 

																					
	US$ millions	    	1999	  	2000	  	2001	  	2002	  	2003	  	2004	  	2005	  	2006	  	2007	  	2008
		    		  		  		  		  		  		  		  		  		  	
	 NOC
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
											
	 FINANCING:
	    		  		  		  		  		  		  		  		  		  	
	 Philips
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
	 TSMC
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
	 EDBI
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
	 Share Capital
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
											
	 Accumulated losses
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
	 EQUITY
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
											
	 % debt
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
	 CAS loan
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
	 Other loans
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
											
	 TOTAL FINANCING
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***

 IBP Final 

 

 29 

 SSMC Initial Business Plan – Ramp-up Plan 

 

																					
	 8” Wafers:
	    	1999	  	2000	  	2001	  	2002	  	2003	  	2004	  	2005	  	2006	  	2007	  	2008
		    		  		  		  		  		  		  		  		  		  	
	 Installed Capacity:
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
											
	 January
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
	 February
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
	 March
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
	 Q1
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
	 April
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
	 May
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
	 June
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
	 Q2
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
	 July
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
	 August
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
	 September
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
	 Q3
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
	 October
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
	 November
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
	 December
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
	 Q4
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***
											
	 TOTAL Year
	    	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***	  	***

 IBP Final 

 

 30 

 Annex B 

 

	1.	The annual budget, as defined in Article VII, will specify the total cost per wafer for the coming year based on the budgeted capacity. The total cost per wafer shall
include all manufacturing cost plus operating expenses. 

  

	2.	The shortfall compensation per wafer is defined as the *** 

The amount of the shortfall compensation per wafer for the coming year will be fixed at the time of preparing the budget. 

 

	3.	The calculation of the number of wafers for which compensation is to be paid is shown in the following example: 

 

																	
	 	  	Capacity	  	Commitment
70%	  	Examples
	 	  	 	  	 	  	A	  	B	  	C	  	D	  	E	  	F
	 TSMC
	  	400	  	280	  	500	  	50	  	350	  	280	  	220	  	250
	 Philips
	  	600	  	420	  	200	  	650	  	350	  	350	  	420	  	350
	 TOTAL
	  	1000	  	700	  	700	  	700	  	700	  	630	  	640	  	600

 Shortfall compensation
payable: 
  

	 	A:	Total commitment of 70% is met. No compensation payable. 

  

	 	B:	Total commitment of 70% is met. No compensation payable. 

  

	 	C:	Total commitment of 70% is met. No compensation payable. 

  

	 	D:	Total shortfall of 70 wafers. TSMC meets its commitment. Philips pays compensation on 70 wafers. 

 

	 	E:	Total shortfall of 60 wafers. Philips meets its commitment. TSMC pays compensation on 60 wafers. 

 

	 	F:	Total shortfall of 100 wafers. Neither party meets its commitment. TSMC pays compensation on 30 wafers. Philips pays compensation on 70 wafers.

  

	4.	The shortfall and compensation will be calculated on an annual basis. The amount of compensation will be invoiced and accounted for by SSMC prior to the end of the year
to which it relates. 

  

 31 

 SHAREHOLDERS AGREEMENT 

(SUPPLEMENTAL) 

THIS SHAREHOLDERS AGREEMENT (SUPPLEMENTAL) (“this Supplement”) is made as of this
16th day of August 2002 by and among 

EDB Investments Pte Ltd, a company incorporated in the Republic of Singapore and organized and existing under the laws of the Republic of Singapore, with
its registered head office at 250 North Bridge Road, #27-04, Raffles City Tower, Singapore 179101 (“EDBI”) 
 of the
first part 
 and 
 Koninklijke
Philips Electronics N.V., a corporation organized and existing under the laws of The Netherlands, with its registered head office at Groenewoudseweg 1, 5621 BA Eindhoven, The Netherlands (“Philips”) 

of the second part 
 and

 Taiwan Semiconductor Manufacturing Company Ltd, a corporation organized and existing under the laws of the Republic of China, with its
registered head office at No. 121 Park Avenue HI, Science-Based Industrial Park, Hsinchu, Taiwan, Republic of China (“TSMC”) 

of the third part 
 EDBI, Philips
and TSMC are hereinafter referred to collectively as “Parties” and individually as “Party”. 
 - -WITNESSETH-
- 
 WHEREAS, EDBI, Philips and TSMC entered into a Shareholders Agreement dated 2 March 1999 (“Shareholders
Agreement”) concerning the setting up and operation of Systems on Silicon Manufacturing Company Pte Ltd (“SSMC”). 

AND WHEREAS, the Parties acknowledge that SSMC is in negotiations with certain financial institutions concerning external loans for its
general business purposes, pursuant to which it would no longer be possible to maintain the original agreed debt to equity ratios set out in Section 1.02 of the Shareholders Agreement (“Debt to Equity Ratios”). 

 

			
		  	SSMC Shareholders Agreement 2 March 1999

 NOW, THEREFORE, in furtherance of the foregoing premise, the Parties hereto hereby agree as
follows: 
 ARTICLE I 

WAIVER OF DEBT TO EQUITY RATIOS 
  

	1.01	Pursuant to Section 12.09 of the Shareholders Agreement, the Parties hereto waive the Debt to Equity Ratios with effect from 1 December 2001, such that the
same no longer apply with effect from that date. 

  

	1.02	All other provisions of the Shareholders Agreement remain unchanged, save to the extent required to be amended mutatis mutandi be reason of Section 1.01 above.

 IN WITNESS WHEREOF, the Parties hereto have executed this Supplement as of this
16th day of August 2002. 

 

									
	EDB Investments Pte Ltd	 		  	Koninklijke Philips Electronics N.V.	  	
				
	  

 

	 		  	
 

	  	
	Name:	 	Liow Voon Kheong	 		  	Carlo van den Akker	  	
	Designation:	 	General Manager	 		  	 General Counsel and Vice-President

(signing under Power of Attorney)
	  	
				
	 Taiwan Semiconductor

Manufacturing Company Ltd
	 		  		  	
				
	
 

	 		  		  	
	Name:	 	Rick Tsai	 		  		  	
	Designation:	 	President	 		  		  	

  

			
	- 2 -	  	

 TSMC-ROYALPHILIPS-PSI AGREEMENT 

THIS TSMC-ROYAL PHILIPS-PSI AGREEMENT (the “Agreement”) is entered into by and between KONINKLIJKE PHILIPS ELECTRONICS N.V. of Amsterdam, the
Netherlands (“Royal Philips”), PHILIPS SEMICONDUCTORS INTERNATIONAL B.V. of Eindhoven, the Netherlands (“PSI”) and TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LTD of Hsin-Chu, Taiwan, Republic of China and its Subsidiaries
(“TSMC”) on September 25, 2006 (the “Effective Date”). Royal Philips, PSI and TSMC may be referred to individually as a Party or collectively as the Parties as the case may require. 

BACKGROUND 

PSI is a wholly-owned subsidiary of Royal Philips and has been and will continue to be the management company for the worldwide
semiconductor businesses and operations of Philips Semiconductors; 
 PSI and TSMC have entered into the Crolles Agreements and
the Capacity Support Agreement referred to below; 
 Royal Philips and TSMC have entered into the SSMC Agreements and the TCA
referred to below; 
 Philips’ current intention is to sell a majority of its shareholding in PSI to a group of private
equity investors, upon which event, PSI will change its corporate name into NXP b.v. (which sale shall be hereinafter referred to as the “NXP Transaction”); 

TSMC desires to protect its confidential and proprietary information that has been provided to Royal Philips and PSI, and to continue its
strategic collaborative engagements with PSI (to be renamed NXP if and when such transaction occurs); 
 By entering into this
Agreement, TSMC, Philips and PSI agree as follows: 
  

	1.	With respect to SSMC Shareholder Agreement of March 30, 1999 and Supplemental of August 16, 2000 (“SSMC Agreement”):

 The Parties agree that if NXP Transaction occurs, NXP shall assume all of Royal Philips and PSI’s
obligations under the SSMC Agreement, including, inter alia, obligations relating to protecting TSMC confidential and proprietary information, seeking TSMC’s prior written consent to any subsequent sale or transfer to SSMC assets or
shares, and TSMC’s right of first refusal to purchase any and all of NXP’s ownership interest in SSMC. 
  

			
	1	  	

 Subject to the Parties’ agreement above, TSMC hereby approves the transfer by Royal
Philips to PSI of all of the SSMC shares held by Royal Philips. 
 Royal Philips hereby cedes, assigns and transfers to PSI, with
TSMCs approval, and PSI hereby accepts, all of Royal Philips’ rights and obligations under SSMC Agreement. 
  

	2.	With respect to TSMC-Philips Technology Cooperation Agreement of July 9, 1997 and amended and restated as of January 01, 2004 (“TCA”):

 The Parties agree that if NXP Transaction occurs, NXP shall assume all of Royal Philips and PSI’s
obligations under the TCA, including, inter alia, obligations relating to protecting TSMC confidential and proprietary information, and seeking TSMC’s prior written consent to any subsequent sale, transfer or assignment of the TCA.

 Subject to the Parties’ agreement above, TSMC hereby approves the transfer by Royal Philips all of its rights,
liabilities and obligations arising from or relating to the Crolles Agreement to PSI. 
 Royal Philips hereby cedes, assigns and
transfers to PSI, with TSMCs approval, and PSI hereby accepts, all of Royal Philips’ rights and obligations under the TCA. 
  

	3.	 With respect to the Amended and Restated Technology Cooperation Agreement and the
2nd Amendment effective as of July 16, 2001 (the
“Crolles Agreement”): 

 The
Parties agree that if NXP Transaction occurs, NXP shall assume all of Royal Philips and PSI’s obligations under the Crolles Agreement, including, inter alia, obligations relating to protecting TSMC confidential and proprietary
information, and seeking TSMC’s prior written consent to any subsequent sale, assignment to transfer of the Crolles Agreement. 

Subject to the Parties’ agreement above, TSMC hereby approves the transfer by Royal Philips all its rights, liabilities and
obligations arising from or relating to the Crolles Agreement to PSI. 
 TSMC and PSI agree that notwithstanding the change of
control experienced by PSI, PSI will remain Party to the Crolles Agreement, and will continue to be subject to its terms and conditions. 
  

			
	2	  	

	4.	With respect to related Capacity Support Agreements effective on March 18, 2003 (for 0.13um products) and July 08, 2005 (for 90nm products) separately
(“CSA”): 

 The Parties agree that if NXP Transaction occurs, NXP shall assume all of Royal Philips
and PSI’s obligations under the CSA, including, inter alia, obligations relating to protecting TSMC confidential and proprietary information, and seeking TSMC’s prior written consent to any subsequent sale, assignment or transfer of
the CSA. 
 Subject to the Parties’ agreement above, TSMC hereby approves the transfer by Royal Philips all of its rights,
liabilities obligations arising from or relating to the CSA to PSI. 
 TSMC and PSI agree that notwithstanding the change of
control experienced by PSI, PSI will remain Party to the CSA, and will continue to be subject to its terms and conditions. 
  

	5.	Miscellaneous: 

  

	 	A.	The Parties hereby agree that nothing contained in this Agreement shall be construed or interpreted so that TSMC’s consents will be extended beyond the scope of
what have been expressly specified under this Agreement. In particular, notwithstanding Philips’ notice to TSMC regarding Philips’ proposed disposal of a majority interest in PSI or any other public reports on said disposal and PSI/NXP
arrangements, nothing contained herein shall constitute TSMC’s express or implied consent to future business arrangements by Philips or PSI with any third parties. 

 

	 	B.	The terms and conditions of this Agreement shall supersede and take precedence over any and all contrary or conflicting terms and conditions under the SSMC Agreement,
the Crolles Agreement, the TSC, and the CSA (collectively, the “TSMC-Philips Transactional Agreements”). 

  

	 	C.	If ambiguity arises under this Agreement or any of the TSMC-Philips Transactional Agreements, the Parties agree that such ambiguity shall be construed and interpreted
in a way favorable to protect the Parties’ technologies and intellectual property rights and assets. The Parties also agree that the rule of interpreting the contract against its drafter shall not apply herein. 

 

	 	D.	Philips and PSI agree to cause NXP, immediately after NXP Transaction occurs, to be bound by and ratify this Agreement and all the terms and conditions of TSMC-Philips
Transactional Agreements by countersigning below. 

 IN WITNESS WHEREOF, THE PARTIES HAVE CAUSED THIS AMENDMENT TO
BE SIGNED BY THEIR DULY AUTHORIZED REPRESENTATIVES. 
  

											
	Royal Philips	  		 	TSMC
						
	By:	  	
 

	  		 	By:	 	
 

	  	
	Name:	  	Eric Coutinho	  		 	Name:	 	Richard L. Thurston	  	
	Title:	  	General Secretary	  		 	Title:	 	Vice President & General Counsel	  	

  

			
	3	  	

											
	Date:	  	 27-9-2006
	  		 	Date:	 	 27 September 2006
	  	
					
	PSI	  		  		 	 Ratified by

NXP
	  	
	By:	  	
 

	  		 	By:	 	  
	  	
						
	Name:	  	G.R.C. Dierick	  		 	Name:	 	  
	  	
						
	Title:	  	SVP & General Counsel	  		 	Title:	 	  
	  	
						
	Date:	  	 27-09-2006
	  		 	Date:	 	  
	  	

  

			
	4

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