Document:

exv4w19

 

EXHIBIT 4.19

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.

First Amendment to

Joint Venture Agreement dated 13 November 2002

This amendment (“First Amendment”) to the subject Agreement, is entered into by and between

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

and

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

(collectively the “Parties”).

WHEREAS, NTC and IFX entered into a Joint Venture Agreement (hereinafter “JVA”) for the
establishment of Inotera Memories, Inc. (hereinafter “Inotera”) on 13 November 2002; and

WHEREAS, NTC and IFX each now wish to amend JVA to more accurately reflect their understanding
regarding the equity funding requirement under JVA;

NOW THEREFORE, in consideration of the premises and mutual covenants contained herein, NTC and IFX
agree to amend JVA as follows:

     1.     Add a new Subsection 1.3-7(1), as follows:

     1.3-7(1)     The Parties agree that they shall subscribe for shares of Inotera at the dates listed
in Subsection a. to d. below. Taking into consideration that according to the laws of the Republic
of China up to 15% of the shares in each capital increase have to be offered to the employees, the
Parties shall each subscribe for shares of Inotera equal to 50% of the amounts listed below
minus such amounts for which the employees of Inotera have committed to subscribe for shares.

     a.     10
billion NT Dollars by 31 January 2004,

     b.     5
billion NT Dollars by 30 April 2004,

     c.     6
billion NT Dollars by 31 July 2004,

     d.     5
billion NT Dollars by 31 October 2004.

     2.     Add a new Subsection 1.3-7(2), as follows:

 

 

     1.3-7(1)     The Parties shall pass by themselves, or shall cause their representatives on the
Board of Directors of Inotera to pass all corporate resolutions necessary for the authorization of
the increase of Inotera’s share capital in accordance with the First Amendment. The Parties shall
assist each other to obtain governmental approvals, if any, necessary to effect such capital
increase.

Regarding Subsection 1.3-10 of the JVA, the Parties re-iterate that Inotera shall provide for its
own loan financing to the decision of the Board of Directors. Both parties shall support Inotera
in obtaining the most favorable terms for its loan financing. None of the Parties shall be
obligated to make any guarantees of financing unless this is separately agreed by the Parties.

Unless expressly modified by this First Amendment, all of the other provisions of the Agreement
shall remain in full force and effect.

IN WITNESS WHEREOF, the Parties have caused this First Amendment to be effective as of the date of
the last of the Parties to sign below.

Nanya Technology Corporation

By:
/s/ Jih Lien

Name:
Jih Lien

Title:
President

Date:
Dec. 3, 2003

Infineon Technologies AG

By:
/s/
Dr. Michael Majerus

Name:
Dr. Michael Majerus

Title:
Chief Financial Officer

Date:
24. 11. 2003

 

By:
/s/ Dr. Harold Eggers

Name: Dr. Harold Eggers

Title:
CEO HP

Date:
24. 11. 2003

 

 

Second Amendment to

Joint Venture Agreement dated 13 November 2002

This amendment (“Second Amendment”) to the subject Agreement, is entered into by and between

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

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

(collectively the “Parties”).

WHEREAS, NTC and IFX entered into a Joint Venture Agreement (hereinafter “JVA”) for the
establishment of Inotera Memories, Inc. (hereinafter “Inotera”) on 13 November 2002; and

WHEREAS, in order to more accurately reflect the Parties’ understanding regarding the equity
funding requirement under JVA, NTC and IFX executed the First
Amendment to the JVA on 3 December,
2003 (hereinafter “First Amendment”); and

WHEREAS, NTC and IFX each now wish to further adjust the final capital injection, which the Parties
have reached their understanding under the First Amendment.

NOW THEREFORE, in consideration of the premises and mutual covenants contained herein, NTC and
IFX agree to amend JVA as follows:

     1.     The Parties agree to change Subsection 1.3-7(1) d) which was inserted into the JVA under
the First Amendment to JVA dated 3 December, 2003 as follows:

that they shall subscribe for shares of Inotera at the dates listed in Subsection a. to d. below.
Taking into consideration that according to the laws of the Republic of China up to 15% of the
shares in each capital increase have to be offered to the employees, the Parties shall each
subscribe for shares of Inotera equal to 50% of the amounts listed below minus such amounts for
which the employees of Inotera have committed to subscribe for shares.

     d.     7.6
billion NT Dollars latest by 31 December 2004.

Unless expressly modified by this Second Amendment, all of the rest provisions set forth under the
JVA shall remain intact and unchanged.

 

 

IN WITNESS WHEREOF, the Parties have caused this Second Amendment to be effective as of the date of
the last of the Parties to sign below.

Nanya Technology Corporation

By: /s/ Jih Lien

Name:
Jih Lien

Title:
President

Date:
28/9/04

Infineon Technologies AG

By: /s/ Mr. Seifert

Name:
Mr. Seifert

Title:
MP CEO

Date:
28/9/2004

By:
/s/
Dr. M. Majerus

Name:
Dr. M.
Majerus

Title:
MP CFO

Date:
28/9/2004

 

 

Third Amendment to

Joint Venture Agreement dated 13 November 2002

This Amendment (“Third Amendment”) to the subject Agreement, is entered into by and between

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

and

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

(collectively the “Parties”)

WHEREAS the Parties have entered into a Joint Venture Agreement on 13 November 2002.

WHEREAS the Parties have entered into a First Amendment to the Joint Venture Agreement on 3
December 2003 and a Second Amendment to the Joint Venture Agreement on 28 September 2004.

WHEREAS, the Parties have decided to change the status of Inotera Memories Inc. from a private to a
public company and are evaluating a possible IPO of the Company.

NOW, THEREFORE, in consideration of the foregoing, the Parties agree as follows:

	1.	 	Subsection 1.3-5 shall be replaced by the following:
	 
	 	 	“SPV: The SPV shall be established under the laws of the Republic of China by the Parties
for the sole purpose of buying shares in the Company, administrating
and selling these shares to the employees of the Company pursuant to the terms and conditions to be set
forth by the Company’s Board of Directors. The SPV shall adopt Articles of Incorporation
pursuant to the laws of the Republic of China in the form as attached to this Agreement
as Appendix I. The SPV shall be set up by the Parties simultaneously with the
establishment of the Company

 

 

	 	 	and shall be
capitalized by the Parties with NT$700 million (equivalent of US$20 million) in equal
installments by each Party of NT$350 million (equivalent of US$10 million). The SPV shall
then subscribe for 70 million shares of the Company at nominal value of NT$10 per share.
Upon affirmative decision of the Parties and subject to the conditions as to be
determined by the Board of Directors of the Company and the SPV, the SPV shall later
offer the shares in the Company to the Company’s employees, whereby the sales price per
share shall be at least NT$15 per share. The exact selling price shall be determined by
the Board of the Company and the SPV. Upon completion of this employee participation
program, the SPV shall be dissolved and the proceeds from the share sale (equivalent of
at least US$30 million) shall be redistributed to the Parties according to their
respective shareholding of 50% in the SPV. “
	 	 	 
	 
	2.	 	Subsection 1.3-8 shall be deleted.
	 
	3.	 	Subsection 1.3-9 shall be replaced by the following:
	 
	 	 	“Before an IPO of the Company, agreement between the Parties shall be necessary to
determine the timing and necessity of increases in the capital of the Company.
Furthermore, for such agreed capital increases as indicated herein, each Party shall
have the right and obligation to subscribe to new shares in the same proportion as its
then current ownership of shares. No third party shall subscribe to share capital of the
Company unless jointly agreed upon by the Parties or otherwise provided by law. For the
avoidance of doubt, this Agreement shall impose no obligation on any Party to provide
any additional funding other than what is stipulated herein, whether in the forms of
loans, equity or otherwise.”
	 
	4.	 	Subsection 1.4-1 shall be replaced by the following:
	 
	 	 	“Within five (5) years after the incorporation of the Company, or until the shares of
the Company are listed on Taiwan Stock Exchange, or any stock exchange out of the
Republic of China (the “Stock Exchange”), whichever is earlier, neither Party shall,
without the prior written consent of the other Party, sell, transfer or otherwise
dispose of its shares (except for, (i) transferring all but not part of its shares to an
Affiliate, or (ii) transfers of shares to employees under Subsection 1.3-6, each under
the terms of this Agreement and in accordance with the provisions of the Articles of
Incorporation), or pledge, hypothecate or otherwise use its shares as security, or grant
options over its legal and beneficial interest in its shares. Any action of a Party
violating this provision shall be void and shall be considered a material breach of this
Agreement in accordance with Subsection 7.3 (a).”

 

 

	5.	 	The last paragraph of Subsection 1.4-2 shall be replaced by the following:
	 
	 	 	“For the purpose of this Subsection 1.4-2, Off-the-Market Sale shall mean the sale of shares of the Company not through the Stock Exchange or not via Depository Receipts.”
	 
	6.	 	Subsection 1.4-9 shall be replaced by the following:
	 
	 	 	“Minimum Shareholding
	 
	(a)	 	Notwithstanding anything to the contrary of other provisions set forth in this
Article 1, each Party shall own a minimum of 33.5% of the outstanding shares of the
Company at any time (the “Minimum Shareholding”); and shall not pledge, hypothecate or
otherwise use its shares as security, or grant options over its legal and beneficial
interest in these 33.5% of the outstanding shares (“Encumbrance”).
	 
	(b)	 	Any action in violation of this provision shall be considered a material breach of
this Agreement according to Subsection 7.3 (a).
	 
	(c)	 	In case the non-breaching Party decides not to terminate this Agreement for material
breach according to Subsection 7.3(a), it may choose that each Party’s Output Share
shall be adjusted by the following formula: The breaching Party shall be obligated to
offer to the non-breaching Party, and the non-breaching Party shall have the right of
first refusal to the offer from the breaching Party, a share of the Total Capacity
amounting to 1.5[x]% of the Total Capacity of the Company if the breaching Party’s
shareholding is [x]% less than 33.5% of the shares of the Company, or if the breaching
Party’s shareholding free of any Encumbrance is [x]% less than 33.5% of the shares of
the Company. By way of example: If the breaching Party’s shareholding is decreased to
16% of the outstanding shares of the Company, it shall offer to the non-breaching Party
26.25% (1.5[33.5-16])% of the Total Capacity. The terms Output Share and Total Capacity
used in this Subsection 1.4-9 shall have the same meaning as defined in the PPCRA and
the Parties shall cause the Company to comply with this Subsection 1.4-9.
	 
	(d)	 	Further to the rights of the non-breaching Party to terminate this Agreement
pursuant to Section 7.3 (a), or to claim an adjustment of the Output Share pursuant to
Subsection 1.4-9 (c), the breaching Party shall on written request of the non-breaching
Party:

	 	–	 	withdraw one of its appointed directors if the shareholding of the
breaching Party drops below 30%;
	 
	 	–	 	withdraw two of its appointed directors if the shareholding of the
breaching Party drops below 26%;

 

 

	 	–	 	withdraw three of its appointed directors and its appointed supervisor
if the shareholding of the breaching Party drops below 22%;
	 
	 	–	 	withdraw four of its appointed directors and its appointed supervisor
if the shareholding of the breaching Party drops below 16.75%.”

	7.	 	Subsection 1.4-10 shall be added to the Agreement:
	 
	 	 	“1.4-10 Depository Receipts Offering
	 
	 	 	Subject to the Minimum Shareholding each Party shall be entitled to dispose of its
shareholding in the Company via the offering of depository receipts. If a Party intends
to do so, it shall first inform the other Party of the volume of shares to be offered
and the anticipated price. The other Party may request within 15 days to participate in
such offering, or to buy the first Party’s shares intended to be offered via depository
receipts, provided that the Parties can agree on the conditions for such joint offering,
or a price for the shares within the 15 days period. In any event and even if there is
no agreement within the above 15 days period, the Parties agree to cause their nominees
on the board of the Company to support such offerings and to vote affirmatively on any
resolution required for such offering. The Parties shall cause the Company to sponsor
such offering of depository receipts and to file all necessary applications, in
particular with the Securities and Futures Bureau.”
	 
	8.	 	Section 2.2 shall be replaced by the following:
	 
	 	 	“2.2 Directors, Supervisors, President and Executive Vice President
	 
	 	 	2.2-1 Unless otherwise agreed by the Parties, the Chairman, directors, supervisors,
President and Executive Vice President of the Company shall be appointed and replaced by
the Parties in accordance with the following method:
	 
	 	 	(a) There shall be 8 directors, of whom NTC shall appoint 4 directors and IFX shall
appoint 4 directors. The right to appoint a director shall include the right to replace
the director at any time.
	 
	 	 	Notwithstanding the foregoing, in case that the Board of the Company has approved the
application for an IPO of the Company on Taiwan Stock Exchange (“TSE”), the Parties
agree to increase the number of directors to 12 directors, of whom NTC shall appoint 4
directors and IFX shall appoint 4 directors. One director shall be a non-related natural
person nominated by Nanya and one director shall be a non-related natural person
nominated by Infineon. Two directors shall be independent of NTC and IFX as prescribed
by ROC law and applicable listing rules [**].

 

 

	 	 	(b) There shall be 2 supervisors, of whom NTC shall appoint 1 supervisor and IFX shall
appoint 1 supervisor. The right to appoint a supervisor shall include the right to
replace the supervisor at any time.
	 
	 	 	Notwithstanding the foregoing, in case that the Board of the Company has approved the
application for an IPO of the Company on TSE, the Parties agree to increase the number
of supervisors to 4 supervisors, [**]. One supervisor nominated by each Party shall be independent of
the nominating Party as prescribed by ROC law and applicable listing rules.
	 
	 	 	(c) NTC shall nominate a director of the Company, and provide an alternative nominee if
the first nomination is not agreed by IFX, to be appointed as the Chairman of the Board
of the Company.
	 
	 	 	(d) The appointment of the President and the Executive Vice President shall be jointly
consented by the Parties. However, neither Party shall unreasonably withhold such
consent. If the President is appointed by one Party, the other Party may appoint the
Executive Vice President.
	 
	 	 	(e) Each Party shall cause the performance of such Chairman, President, Executive Vice
President, directors, supervisors, and/or other managers appointed or nominated by such
Party to be in accordance with this Agreement.
	 
	 	 	Each Party shall inform the other Party of the persons it wishes to nominate or appoint
to be elected as director or supervisor by the Shareholder’s Meeting of the Company. For
as long as the other Party is in compliance with the Minimum Shareholding requirement as
set forth in this amended Subsection 1.4-9, each Party shall equally use its votes in
the Shareholders Meeting to vote in favor of the persons appointed or nominated by
itself and by the other Party as stipulated in this Subsection 2.2-1 (a) and (b). In
case that a Party is in breach of its Minimum Shareholding requirement as set forth in
this amended Subsection 1.4-9, it shall not be relieved from its obligations to vote in
favor of the persons appointed or nominated by the other Party.
	 
	 	 	2.2-2 Subject to the Company Law of the Republic of China, the term of the directors and
the supervisors shall be three (3) years.
	 
	 	 	2.2-3 Further to the Parties agreement in Subsection 2.2-1 above, if the Company needs to
comply with legal requirements for the election of independent directors and supervisors
as prescribed by the applicable laws or regulations of the Republic of China, the Parties
agree to co-operate in good faith and to work out an appropriate contractual arrangement
to maintain the

 

 

	 	 	Company as joint venture between the Parties as equal partners with regard to the
directors, supervisors and the management of the Company.”
	 	 	 
	 
	9.	 	The last paragraph of Subsection 2.3-1 shall be changed as follows:
	 
	 	 	“A resolution of the Board of Directors shall be required for the Joint Venture Company,
its Chairman, its President and Executive Vice President, or any of its directors,
personnel or supervisors to engage in any matters which are within the responsibilities
of the Board of Directors.”
	 
	10.	 	Subsection 2.3-2 shall be replaced by the following:
	 
	 	 	“An attendance by two thirds of the directors in person or through representation shall
be necessary to form a quorum. Resolutions of the Board of Directors shall be in
writing, and shall be adopted by affirmative vote of at least 75% of the directors
attending the Board Meeting (at which a quorum is present) whether in person or by
proxy.. The Chairman shall not be entitled to a second or casting vote.”
	 
	11.	 	Section 6.2 shall be replaced by the following:
	 
	 	 	“In each year that the Company has realized a profit after accounting for any tax
liability and covering of accumulated losses, 10% of the remaining profit shall be
retained as legal reserves. After providing for any voluntary reserves as decided by the
Shareholders Meeting, 0.1%~1% of the then remaining profits shall be set aside for the
directors and supervisors of the Company, and 1%~8% of the then remaining profits shall
be set aside for employees as bonuses. The remainder of the profit, if any, may be
announced and paid as dividends to the shareholders in cash or stock, such as shall be
determined from year to year by the Board of Directors and approved by the Shareholders
Meeting, whereby at least 50% shall be distributed as cash dividend. Any other remaining
profit shall be kept by the Company as retained earning.”
	 
	12.	 	Subsection 8.10-2
	 
	 	 	ProMOS Technologies Inc., Taiwan, shall be deleted from the list of Frontend Fab Cluster
members. Semiconductor Manufacturing International Corporation, (Shanghai), People’s
Republic of China, shall be added to the list of Frontend Fab Cluster members.

 

 

	 	 	 	 	 
	Nanya Technology Corporation
	 	Infineon Technologies AG
	 
	 	 
	By:
	/s/
Jin Lien
	 	By:
	/s/ Thomas Seifert
	 	 
	 	 	 

	Name: 
	Jin Lien	 	Name: 	Thomas Seifert
	Title:
	President	 	Title:	MP CEO
	Date:
	April 5, 2005	 	Date:	04.05.05
	 
	 	 	 	 
	 
	 	 	By:
	/s/ Michael Majerus
	 
	 	 	 	 
	 
	 	 	Name: 	Michael Majerus
	 
	 	 	Title:	MP CFO
	 
	 	 	Date:	04.05.05exv4w28

 

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.

EXHIBIT 4.28

SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

This Settlement Agreement and Mutual General Release

(the “Agreement”)

is made by and between

INFINEON TECHNOLOGIES AG, a corporation organized and existing under the laws of the Federal
Republic of Germany and having its head office at Munich, Germany (“Infineon”);

and

PROMOS TECHNOLOGIES INC., a corporation organized and existing under the laws of the Republic of
China (“ROC”) and having its head office at Hsinchu, Taiwan, ROC (“ProMOS”).

(Infineon and ProMOS are hereinafter individually referred to as a “Party” or collectively as the
“Parties.”)

WHEREAS, Infineon and ProMOS entered into (i) that certain License Agreement, and (ii), together
with Mosel Vitelic Inc. (“MVI”), that certain PPCRA (both of which agreements are defined below);

WHEREAS, certain disputes have arisen between the Parties in connection with the said agreements,
for which certain legal proceedings have been initiated by a Party against the other Party; and

WHEREAS, the Parties intend to resolve any and all such disputes and to dismiss any and all such
legal proceedings with prejudice.

NOW, THEREFORE, in consideration of the representations, warranties and covenants contained in this
Agreement and other consideration, the sufficiency and adequacy of which is hereby acknowledged,
and intending to be legally bound hereby, it is hereby mutually agreed by the Parties as follows:

	1.	 	Definitions

	 	1.1	 	Unless otherwise specified or required by the context, the capitalized terms used
herein shall have the meanings as ascribed to them below. Any other capitalized terms
that are used but not defined in this Agreement shall have the same meaning as ascribed to
them under the License Agreement and/or the First Amendment to the License Agreement;
provided that, if any term is defined in this Section and the
License Agreement and/or the First Amendment to the License Agreement, the definition of
this Section shall prevail in case of any conflict between definitions.

	 	1.1.1	 	“Effective Date” shall mean the date upon which this Agreement is entered
into and signed by the authorized representatives of the Parties and, if signed

1

 

	 	 	 	separately, the date that the last of the Parties to sign this Agreement signs this
Agreement.
	 
	 	1.1.2	 	“ICC Arbitration Case” shall mean the arbitration case currently pending
before the Court of Arbitration, International Chamber of Commerce, with Case No.
12708/ACS/FM, including the claims filed by ProMOS and the counterclaims filed by
Infineon, and the respective amendments to the claims and counterclaims.
	 
	 	1.1.3	 	“Know How” shall mean those portions of the Know How as formerly defined
in Section 1.3 of the License Agreement, that have actually been transferred under
the License Agreement by Infineon to ProMOS.
	 
	 	 	 	For the avoidance of doubt, Know How shall include all intellectual property rights
(“IPRs”) on those actually transferred portions of the Know How as described in the
preceding paragraph, whereas IPRs shall mean any and all trade secret rights,
copyrights (including published and unpublished works of authorship, rights to
database and other compilations of information, and computer programs), mask work
rights, and all other intellectual property or proprietary rights and registrations
thereof and applications therefor in any country in the world, excluding, however,
any and all patents and patent applications (including process/design patents and
process/design patent applications, utility models, invention disclosures,
divisions, continuations, continuations-in-part, and renewals, extensions, reissues
and applications therefor).
	 
	 	1.1.4	 	“License Agreement” shall mean the S17 to S12 License Agreement entered
into by and between Infineon and ProMOS, dated 15 March 2000.
	 
	 	1.1.5	 	“PPCRA” shall mean, individually or collectively by the context, (i) the
Product Purchase and Capacity Reservation Agreement between ProMOS, MVI and Siemens
Aktiengesellschaft (“Siemens”), dated 15 January 1997, which was later assigned by
Siemens to Infineon pursuant to the Assignment Agreement between ProMOS, MVI, Siemens
and Infineon as of 15 March 2000; (ii) the First Amendment to the Product Purchase
and Capacity Reservation Agreement between ProMOS, MVI and Infineon, dated 15 March
2000; (iii) the Side Letter between ProMOS, MVI and Infineon dated 15 March 2000; and
(iv) the Addendum to the Side Letter between ProMOS, MVI and Infineon dated 7 March
2002.
	 
	 	1.1.6	 	“ProMOS Know How” shall mean those portions of technical information that
(i) were developed by ProMOS based on or derived from the Know How transferred from
Infineon, and (ii) have actually been transferred back under the License Agreement by
ProMOS to Infineon.

	 
	 	 	 	For the avoidance of doubt, ProMOS Know How shall include all intellectual property
rights (“IPRs”) on those actually transferred portions of the ProMOS Know How as
described in the preceding paragraph, whereas IPRs shall mean any and all trade
secret rights, copyrights (including published and unpublished works of authorship,
rights to database and other compilations of information,

2

 

	 	 	 	and computer programs),
mask work rights, and all other intellectual property or proprietary rights and
registrations thereof and applications therefor in any country in the world,
excluding, however, any and all patents and patent applications (including
process/design patents and process/design patent applications, utility models,
invention disclosures, divisions, continuations, continuations-in-part, and
renewals, extensions, reissues and applications therefor).
	 
	 	1.1.7	 	“ProMOS Patents” shall mean any and all patents and patent applications
(including process/design patents and process/design patent applications, utility
models, invention disclosures, divisions, continuations, continuations-in-part, and
renewals, extensions, reissues and applications therefor):

	 	a)	 	which are issued or will be issued on patent applications
entitled to an effective priority filing date on or prior to [**], and
	 
	 	b)	 	which but for the License Agreement, as amended, would be
infringed by Infineon by using any aspect or combination of aspects of ProMOS
Know How and/or any aspect or combination of aspects of the Know How within the
scope of the licenses granted in the License Agreement, as amended, and
	 
	 	c)	 	under which patents ProMOS now has, or hereafter obtains on or
prior to [**], the right to grant licenses of the same scope granted in Section
4.4 of the License Agreement, as amended, without such grant or the exercise of
rights thereunder resulting in the payment of royalties or other consideration
by ProMOS to third parties (except for payments between ProMOS and third
parties for inventions made by said third parties while employed by or made on
behalf of ProMOS), unless Infineon reimburses ProMOS for such payment of
royalties or other consideration.
	 
	 	d)	 	For the avoidance of doubt, (i) the scope of ProMOS Patents set
forth in Section 1.1.7 b) is meant to accomplish solely a license under any
patent of which at least one claim is related to an aspect or a combination of
aspects of ProMOS Know How and/or an aspect or a combination of aspects of the
Know How, but excludes a license under any patent no claim of which is related
to ProMOS Know How and/or the Know How, and which does not claim any related
aspects of a combination of the ProMOS Know How and/or the Know How with other
elements not licensed under the License Agreement, as amended; and (ii) the
Know How and/or ProMOS Know How referred to in Section 1.1.7 a) through 1.1.7
d) only refers to the Know How and/or ProMOS Know How that has actually been
transferred under the License Agreement [**].

	 	1.1.8	 	“Subsidiary” shall mean, but only for so long as it fulfills the
requirements of paragraphs a) or b) of this Section 1.1.8, a corporation, company or
other entity:

	 	a)	 	more than fifty percent (50%) of whose outstanding shares or
securities (such shares or securities representing the right to vote for the
election of directors or other managing authority) are, now or hereafter, owned
or controlled, directly or indirectly, by a Party; or

3

 

	 	b)	 	which does not have outstanding shares or securities, as may be
the case in a partnership, joint venture or unincorporated association or other
entity, but more than fifty percent (50%) of whose ownership interest
representing the right to vote for, designate, or otherwise select members of
the highest governing decision-making body, managing body or authority for such
partnership, joint venture, unincorporated association or other entity is now
or hereafter, owned or controlled, directly or indirectly, by a Party hereto.
	 
	 	c)	 	For the purpose of this Agreement and the License Agreement, as
amended, the Parties agree that Mosel Vitelic Corporation, located in San Jose,
California, U.S.A. (“MVC”), MVC shall be considered a Subsidiary of ProMOS, so
long as each of ProMOS and MVI holds fifty percent (50%) of the shares, or if
it otherwise qualifies as a Subsidiary of ProMOS.

	 	1.1.9	 	“Taiwan Actions” shall mean, collectively, the civil lawsuits, criminal
complaints, petitions for preliminary injunction, unfair competition complaint,
appeals in any form related thereto, and any other legal or administrative
proceedings initiated by Infineon or ProMOS, or by any other person or entity with
the knowledge of Infineon or ProMOS, before the competent court or other governmental
authorities in Taiwan, as more fully described in Sections 6.1 and 6.2 below.
	 
	 	1.1.10	 	“Licensed Patents” shall mean any and all patents and patent applications
(including process/design patents and process/design patent applications, utility
models, invention disclosures, divisions, continuations, continuations-in-part, and
renewals, extensions, reissues and applications therefor):

	 	a)	 	which are issued or will be issued on patent applications
entitled to an effective priority filing date on or prior to [**], and
	 
	 	b)	 	which but for the License Agreement, as amended, would be
infringed by ProMOS by using any aspect or combination of aspects of the Know
How and/or any aspect or combination of aspects of ProMOS Know How within the
scope of the licenses granted in the License Agreement, as amended; and
	 
	 	c)	 	under which patents Infineon now has, or hereafter obtains on
or prior to [**], the right to grant licenses of the same scope granted in
Section 3 of the License Agreement, as amended, without such grant or the
exercise of rights thereunder resulting in the payment of royalties or other
consideration by Infineon to third parties (except for payments between
Infineon and third parties for inventions made by said third parties while
employed by or made on behalf of Infineon), unless ProMOS reimburses Infineon
for such payment of royalties or other consideration.

4

 

	 	d)	 	For the avoidance of doubt, (i) the scope of Licensed Patents
set forth in Section 1.1.10 b) is meant to accomplish solely a license under
any patent of which at least one claim is related to an aspect or a combination
of aspects of the Know How and/or an aspect or a combination of aspects of
ProMOS Know How, but excludes a license under any patent no claim of which is
related to the Know How or ProMOS Know How, and which does not claim any
related aspects of a combination of the Know How or ProMOS Know How with other
elements not licensed under the License Agreement, as amended, and (ii) the
Know How and/or ProMOS Know How referred to in Section 1.1.10 a) through d)
only refers to the Know How and/or ProMOS Know How that has actually been
transferred under the License Agreement [**].

	 	1.2	 	Interpretation. As the rules of interpretation for the purpose of this Agreement:

	 	1.2.1	 	Unless the context otherwise requires, (i) words in the singular include
the plural and vice versa; (ii) words in the masculine gender include the feminine
and neuter gender and vice versa; (iii) words such as “herein,” “hereinafter,”
“hereto,” “hereby,” and “hereunder,” when used in this Agreement, refer to this
Agreement; and (iv) forms of the verb “include” are not limiting and shall be deemed
to be followed with the phrase “but not limited to” or “without limitation.”
	 
	 	1.2.2	 	References to Sections or Annexes are to sections of or annexes to this
Agreement, unless stated otherwise.
	 
	 	1.2.3	 	Technical words and phrases not otherwise defined in or required by the
context of provisions of this Agreement shall have the meaning generally ascribed to
them in the semiconductor industry.

	2.	 	Settlement in Gross; No Admission

	 	2.1	 	It is mutually acknowledged and agreed that the Parties enter into this Agreement to
avoid any business interruptions, costs and risks of continued litigation and arbitration,
and that the settlement and mutual releases as contemplated herein are intended and made
by the Parties to be a settlement in gross, and to constitute an overall resolution of any
and all outstanding disputes between the Parties in connection with the License Agreement,
PPCRA, ICC Arbitration Case, Taiwan Actions and/or any subject matters or issues
associated therewith, including any claims of unfair competition and infringements on
intellectual property rights.
	 
	 	2.2	 	No Party admits to any liability, claim or cause of action, or to the veracity of any
allegations made by the other Party arising from or in connection with the ICC Arbitration
Case, Taiwan Actions or otherwise, and nothing contained herein shall be
construed, by implication, estoppel or otherwise, to constitute any such admission to any
liability, claim or cause of action.

5

 

	3.	 	Licensed Technologies

	 	3.1	 	No Termination of License Agreement. Neither of Infineon and ProMOS shall assert or
attempt to assert the validity or any legal effect of their respective notices of
termination of the License Agreement as sent by Infineon as of 24 January 2003 or by
ProMOS as of 18 March 2003, and such notices shall be deemed null and void.
	 
	 	3.2	 	First Amendment to the License Agreement. Concurrently with the execution of this
Agreement, the Parties execute and sign the First Amendment to the License Agreement in
the form and substance as provided for in Annex A hereto, which shall constitute
an integral part of this Agreement and be incorporated herein by reference.
	 
	 	3.3	 	Operative Provisions of the License Agreement. The Parties agree that, in addition
to the provisions introduced by the First Amendment to the License Agreement, only the
following Sections of the License Agreement shall continue to be operative and binding
upon the Parties:

	 	3.3.1	 	Section 1, but only with respect to such paragraphs of which the defined
terms are used in or otherwise applicable to any term or provision of this Agreement
and/or to the License Agreement as amended by Section 1 of the First Amendment to
the License Agreement;
	 
	 	3.3.2	 	Section 4.1 including its subsections and Section 4.2, but only with
respect to any joint inventions, as defined therein, which were made on or prior to
[**];
	 
	 	3.3.3	 	Section 4.3, but only with respect to any license granted by ProMOS to
Infineon thereunder for patents with an effective priority filing date on or prior
to [**], and any sublicense made by Infineon to third parties for such license
pursuant to the conditions thereunder, as already made on or prior to [**];
	 
	 	3.3.4	 	the first paragraph of Section 6.1; the first paragraph of Section 6.2;
Section 6.3 and Section 6.4;
	 
	 	3.3.5	 	Sections 7.1 through 7.4, provided only that (i) the term “Wholly Owned
Subsidiary” in Section 7.1.1 and 7.1.4 shall be replaced by the term “Subsidiary”,
and (ii) ProMOS, within the terms of Section 7 of the License Agreement, undertakes
to keep confidential the 110nm Know How transferred to it and the transferred
Confidential Information in association with the 110nm Licensed Process and any
110nm Licensed Product for a period expiring on [**]. For the avoidance of doubt,
disclosures which are made in accordance with a sublicense right of either Party
under this Agreement and/or the License Agreement, as amended, shall not be deemed a
breach of confidentiality under Section 7 of the License Agreement, as amended;
	 
	 	3.3.6	 	the first sentence of the first paragraph of Section 8.1;
	 
	 	3.3.7	 	Section 9.4;
	 
	 	3.3.8	 	Section 10, but replaced by the arbitration provision set forth Section
9.2 herein below;

6

 

	 	3.3.9	 	Section 11, but replaced by the applicable law provision set forth
Section 9.1 herein below; and
	 
	 	3.3.10	 	Annexes 1 through 5 of the License Agreement.

	 	3.4	 	Non-Operative Provisions. Except for the provisions of the License Agreement as
specifically identified in Section 3.3 hereof and the provisions introduced by the First
Amendment to the License Agreement, no other provision of the License Agreement shall be
operative or enforceable after the Effective Date.
	 
	 	3.5	 	[**]. Infineon shall have no obligation to provide ProMOS with [**]; and, ProMOS
shall have no obligation to provide Infineon with [**].
	 
	 	3.6	 	No Solicitation of Third Party Actions. Neither Party (for itself and its
Subsidiaries) shall solicit or cause any third party to allege or institute, any claim or
legal proceeding of intellectual property rights infringement or unfair competition
against the other Party, its Subsidiaries, directors, supervisors, officers,
representatives, employees and customers in connection with the exercise of the licenses
and rights granted to each other under the License Agreement, as amended, and this
Agreement.
	 
	 	3.7	 	No Warranty. Neither Party makes any warranty or representation as to the condition
or accuracy, sufficiency or suitability for the other Party’s use of any of the Know How
or ProMOS Know How, the licenses provided for under this Agreement and the License
Agreement, as amended, or for the quality of any product or process made hereunder, nor
does either Party assume any responsibility or liability for any costs, losses or damages,
whether direct or indirect, consequential or incidental, which might arise out of the
other Party’s possession or use thereof. Neither Party makes any warranty or
representation as to the validity of any of the Licensed Patents or ProMOS Patents.
	 
	 	3.8	 	No Indemnity. Nothing contained in this Agreement and/or the License Agreement, as
amended, shall be construed as a warranty or representation that the possession or use of
the Know How or the ProMOS Know How, the licenses provided for under this Agreement and
the License Agreement, as amended, and/or the manufacture, use, development, importation,
sale, offer for sale, lease or other disposal of systems, apparatus, material, process,
circuits, devices, software and products hereunder and/or thereunder will be free from
infringement of intellectual property rights of third parties, or that a Party will
successfully manufacture products based upon the Know How or ProMOS Know How.
	 
	 	3.9	 	Order of Agreements. If there is any discrepancy between the First Amendment to the
License Agreement and this Agreement, the provisions of this Agreement (including without
limitation Sections 3, 5, 9, 10 and 11 hereof) shall prevail.
	 
	 	3.10	 	Assignment of MVI Infineon [**]. Infineon, ProMOS and Mosel Vitelic Inc. agree to
assign the MVI Infineon [**] from Mosel Vitelic Inc. to ProMOS pursuant to the assignment
agreement attached hereto as Annex B; such assignment agreement shall be separate and
independent from this Agreement.

7

 

	4.	 	Mutual Releases

	 	4.1	 	In consideration of the releases and other consideration given by ProMOS, Infineon
(for itself, its directors, supervisors, officers, representatives, successors, assigns
and Subsidiaries) hereby releases, acquits and forever discharges ProMOS and any of its
Subsidiaries, directors, supervisors, officers, representatives, employees and attorneys
from any and all claims, causes of action, damages, losses, expenses, demands and
liabilities whatsoever in law or in equity (whether based on breach of contract, tort,
breach of fiduciary duty, or any other legal theory), known or unknown, arising or
allegedly to arise, at any time prior and up to the Effective Date of this Agreement, out
of or in connection with the License Agreement, PPCRA, ICC Arbitration Case, Taiwan
Actions and/or any subject matters or issues associated therewith, including any
intellectual property rights and unfair competition claims.
	 
	 	4.2	 	In consideration of the releases and other consideration given by Infineon, ProMOS
(for itself, its directors, supervisors, officers, representatives, successors, assigns
and Subsidiaries) hereby releases, acquits and forever discharges Infineon and any of its
Subsidiaries, directors, supervisors, officers, representatives, employees and attorneys
from any and all claims, causes of action, damages, losses, expenses, demands and
liabilities whatsoever in law or in equity (whether based on breach of contract, tort,
breach of fiduciary duty, or any other legal theory), known or unknown, arising or
allegedly to arise, at any time prior and up to the Effective Date of this Agreement, or
out of in connection with the License Agreement, PPCRA, ICC Arbitration Case, Taiwan
Actions and/or any subject matters or issues associated therewith, including any
intellectual property rights and unfair competition claims. With regard to any potential
allegations against Infineon of short swing trading of ProMOS stocks in 2003, ProMOS shall
not file any lawsuits against Infineon, any of Infineon’s Subsidiaries, directors,
supervisors, officers, representatives, and/or employees, unless such filings are either
requested by any shareholder of ProMOS or required by the applicable laws.
	 
	 	4.3	 	The Parties agree that, as a result of the mutual releases given above, any and all
rights, interests and claims of a Party against the other Party under the License
Agreement and PPCRA or in connection with any subject matters or issues associated
therewith shall be relinquished, and shall be replaced by such rights, interests and
claims as given rise to under this Agreement. The Parties agree that the PPCRA was
terminated as of December 31, 2002 and that no provision under the PPCRA shall have
survived its termination thereafter, except for the Outstanding Payments under Section 5.2
herein below.
	 
	 	4.4	 	The Parties are currently in the process of negotiating, in good faith and for the
mutual benefits of both Parties, to resolve issues regarding the joint inventions made,
prior to [**], by the employees of Infineon and of ProMOS in accordance with Sections 4.1
and 4.2 of the License Agreement. The mutual releases granted under
this Agreement shall not include any rights, interests or claims of either Party that may
arise out of or in connection with such joint inventions, provided, however, that any
possible disputes on such joint invention issues shall not have any impact on the
validity and enforceability of this Agreement and the License Agreement, as

8

 

	 	 	 	amended, and
neither Party shall assert or attempt to assert any right or claim related to such joint
inventions as the grounds of defense, counterclaim, offset and the like against, or
otherwise withhold, its performance and delivery of its obligations under this Agreement
or the License Agreement, as amended.

	5.	 	Consideration

	 	5.1	 	Amounts. In consideration of the rights and licenses granted (under the License
Agreement, as amended, and Section 3 hereof), mutual releases (Section 4 hereof),
dismissal of actions (Section 6 hereof) and reciprocal concessions and overall settlement
as contemplated by this Agreement, ProMOS agrees to pay, at the respective due dates, the
lump sums described in Section 4.2 of the First Amendment to the License Agreement against
corresponding invoices to be issued by Infineon, subject to the withholding tax under
Section 5.4 below.
	 
	 	5.2	 	Outstanding Payments by Infineon. The Parties acknowledge and agree that a total
principal sum of outstanding payments due by Infineon to ProMOS under the PPCRA is thirty
six million, six hundred thirty thousand, nine hundred and eighty two US dollars and five
cents (US$36,630,982.05) (“Outstanding Payments”), and that the Outstanding Payments shall
be automatically offset on March 31, 2005 in full against the lump sum payment by ProMOS
to Infineon of thirty six million US dollars (US$36,000,000) described in Section 4.2.1.2
of the First Amendment to the License Agreement, and that ProMOS, subject to such offset,
agrees to waive any and all claims with respect to the residual amount of six hundred
thirty thousand, nine hundred and eighty two US dollars and five cents (US$630,982.05),
and any interests accrued or to be accrued to the total sum of the Outstanding Payments,
upon and after the offset.
	 
	 	5.3	 	No Other Payments. In the interest of removing doubt, Infineon and ProMOS agree and
confirm that:

	 	5.3.1	 	the total amount of the lump sums as provided for in Section 5.1 hereof
shall (i) be in lieu of any and all license fees, running royalties, and other form
of considerations or compensations as may be due under any provision of the License
Agreement and the First Amendment to the License Agreement; and (ii) constitute the
total and only remaining consideration for any and all rights and licenses granted
under Section 3.2 hereof, Section 3 of the License Agreement and Section 2 of the
First Amendment to the License Agreement, and all other rights, interests and
benefits as granted or accrued to ProMOS under this Agreement; and
	 
	 	5.3.2	 	except for the total amount of the lump sums under Section 5.1 hereof, no
other license fee, royalty, cost, expense or other form of compensation or payment
shall be due or payable by ProMOS or its Subsidiaries to Infineon.

	 	5.4	 	Taxes. Any and all taxes, withholdings, charges and/or other duties (hereinafter
“Taxes”) imposed by the laws of Taiwan or other countries on any payments to be made by
ProMOS to Infineon under or in conjunction with the provisions of Section 5 of this
Agreement, shall be borne by the Parties in accordance with the following terms and
conditions:

9

 

	 	5.4.1	 	Infineon shall assist ProMOS in obtaining approvals from the tax and
other governmental authorities of Taiwan for exemption or reduction of Taxes
imposable upon any payment to be made by ProMOS under this Agreement (as described
in the First Amendment to the License Agreement), and such assistance by Infineon
shall include (i) acting as the applicant for the tax exemption and authorizing
ProMOS and its designees, by appropriate forms of power of attorney, to act as the
attorneys-in-fact of Infineon solely for such application; and (ii) making, jointly
with ProMOS, recordation with the Taiwanese authorities of the licensing
arrangement, as contemplated under the License Agreement and the First Amendment to
the License Agreement, in connection with any and all Taiwanese patents of the
Licensed Patents; and (iii) promptly delivering to ProMOS any and all documents and
information reasonably requested by the Taiwanese authorities through ProMOS or
otherwise reasonably necessary for responding to any inquiry of the Taiwanese
authorities for obtaining the licensing recordation and approvals for the tax
exemption.
	 
	 	5.4.2	 	Notwithstanding the foregoing, the Parties agree that the liabilities
for Infineon’s income Taxes (including any withholdings therefrom) imposed by the
tax authorities of Taiwan against the lump-sum payments described in Sections
4.2.1.1 (US$[**]), 4.2.2.1 (US$[**]) and 4.2.2.2 (US$[**]) of the
First Amendment to the License Agreement shall be borne by Infineon and ProMOS
pursuant to the following conditions:

	 	a)	 	Subject to paragraph d) below, each of Infineon and ProMOS
shall be responsible for [**] percent ([**]%) of such Taxes imposable by the
laws and tax authorities of Taiwan; but only when making the lump sum payment
to Infineon described in Section 4.2.2.2 of the First Amendment to the
License Agreement, when due, ProMOS shall be entitled to withhold the amount,
equivalent to [**] percent ([**]%) of the total amount of such Taxes (up to
the maximum amount defined in paragraph d) hereunder) as imposable against
each of such lump sum payment described in Sections 4.2.1.1, 4.2.2.1 and
4.2.2.2 of the First Amendment to the License Agreement, and shall issue and
deliver to Infineon a certified copy of the certificate of withholding of the
full amount of such Taxes as applicable to each such lump sum payment.
	 
	 	b)	 	Refunds, if any, made by the Taiwanese tax authorities to
Infineon of any income Taxes paid (and not withheld) by ProMOS with respect
to the lump sum payments to Infineon described in Section 4.2.1.1, 4.2.1.2
and 4.2.2.1 of the First Amendment to the License Agreement shall be passed
on by Infineon to ProMOS within five (5) business days after receipt of such
refund. In no case shall Infineon be responsible for paying ProMOS any
interest in connection with such refunds. Delay by Infineon of more than
five (5) business days after receipt of such refund(s) shall entitle ProMOS to
claim from Infineon payment of interests on arrears, computed on a
per-day-basis from the sixth business day after such receipt until the day
such pass-on payment is made at the total rate of six percent (6%) per annum
(respectively 6/365 percent per day). In addition to such interests, 

10

 

	 	 	 	and notwithstanding the waiver in Section 5.6 below, ProMOS shall have the right
to offset such outstanding refunds against further payments due by ProMOS
under this Agreement as described in Sections 4.2.2.1 and 4.2.2.2 of the First
Amendment to the License Agreement.
	 
	 	c)	 	The Parties agree that, as between Infineon and ProMOS,
Infineon shall in no case be responsible for any such Taxes applicable to the
lump sum payment described in Section 4.2.1.2 of the First Amendment to the
License Agreement thirty six million U.S. dollars (US$36 million) and any
such Taxes on such amount shall be paid by ProMOS; provided, however, that
ProMOS shall be entitled to name Infineon as the taxpayer, pursuant to the
tax laws and regulations of Taiwan.
	 
	 	d)	 	The liability of Infineon in aggregate for any and all such
Taxes imposable by the tax authorities of Taiwan shall not be more than [**]
U.S. dollars (US$[**]).
	 
	 	e)	 	In no case shall ProMOS be responsible for paying Infineon
any interest in connection with the withheld amount of such Taxes.

	 	5.4.3	 	Any Taxes other than Infineon’s income Taxes imposed on such payments
shall be borne and paid (i) solely by Infineon, if imposed by countries other than
Taiwan, and (ii) solely by ProMOS, if imposed by Taiwan.

	 	5.5	 	Promissory Notes. Upon Infineon delivering to ProMOS the duly executed withdrawal
documents for the preliminary injunction in accordance with Section 6.4.5 hereunder,
ProMOS agrees to make and deliver to Infineon or its representatives (Wang and Partners)
the promissory notes described below, as securities for its payments of the lump sum
payments due as described in Section 4.2.1.1, 4.2.2.1 and 4.2.2.2 of the First Amendment
to the License Agreement, in accordance with the following conditions:

	 	5.5.1	 	Promissory notes shall be made, drawn and issued by ProMOS, in the face
value and of maturity dates, respectively, as follows:

	 	a)	 	A promissory note of [**] U.S. dollars (US$[**]), due and
matured on [**];
	 
	 	b)	 	A promissory note of [**] U.S. dollars (US$[**]), due and
matured on [**];
	 
	 	c)	 	A promissory note of [**] U.S. dollars (US$[**]), due and
matured on [**].

	 	5.5.2	 	Each of these promissory notes shall be made payable only to Infineon,
and shall be non-transferable and non-endorsable to any third party, and the
presentment by Infineon of each promissory note shall be subject to the condition
that Infineon does not receive the respective amount of the relevant promissory note
on or prior to its maturity date.

11

 

	 	5.5.3	 	Each of these promissory notes under Section 5.5.1 shall be returned by
Infineon to ProMOS within five (5) business days after receipt of ProMOS’ payment of
the face value of each promissory note. The promissory notes shall become null and
void upon receipt by Infineon of the respective payments by ProMOS.
	 
	 	5.5.4	 	Infineon shall be fully liable to ProMOS if Infineon’s presentment of,
or exercise of its rights under, any of these promissory notes is made in a manner
not consistent with or in violation of the conditions provided for herein.
	 
	 	5.5.5	 	ProMOS represents and warrants that the promissory notes have been duly
chopped and issued in Taiwan. The Parties agree that the promissory notes shall be
subject to the laws of Taiwan.

	 	5.6	 	Partial Waiver on Offset. ProMOS shall not offset any claim under the License
Agreement, the First Amendment to the License Agreement, this Agreement or any other
agreement, against Infineon’s claims for payment of the lump sums described in Section 4
of the First Amendment to the License Agreement. This Section 5.6 shall not apply to the
withholding of Taxes, if and to the extent made in accordance with Section 5.4. hereof.

	6.	 	Dismissal of Actions

	6.1	 	In consideration of ProMOS’ dismissal of actions under Section 6.2, Infineon agrees
to and shall withdraw and cause to be withdrawn, and dismiss or cause to be dismissed with
prejudice:

	 	6.1.1	 	Its counterclaims under the ICC Arbitration Case;
	 
	 	6.1.2	 	Its petition for preliminary injunction against ProMOS, now pending at the
Taiwan High Court (Case No. 93-Kang-Tzu-53);
	 
	 	6.1.3	 	Its civil lawsuit for cancellation of the election of ProMOS’ directors
and supervisors at ProMOS’ Special Shareholders Meeting of 10 January 2003, and for
removal of Mr. Hung-Chiu Hu as a director of ProMOS, now pending at Hsinchu District
Court (Case No. 92-Su-Tzu-113);
	 
	 	6.1.4	 	Its appeal, if any, to the Decision of Non-Indictment (Case No.
93-Cheng-Tzu-4348) rendered by the Public Prosecutors Office of Hsinchu District
Court in favor of Mr. Hung-Chiu Hu; and
	 
	 	6.1.5	 	Any other lawsuits and legal proceedings, whether civil, criminal or
otherwise, against ProMOS, its directors, supervisors, officers, employees, assigns
and Subsidiaries initiated by Infineon or by third parties with the knowledge of
Infineon in any country in the world.

	 	6.2	 	In consideration of Infineon’s dismissal of actions under Section 6.1, ProMOS shall
withdraw and cause to be withdrawn, and dismiss or cause to be dismissed with prejudice:

12

 

	 	6.2.1	 	Its claims under the ICC Arbitration Case;
	 
	 	6.2.2	 	Its petition for preliminary injunction against Infineon (as per Hsinchu
District Court Order of Case No. 91-Tsai-Chaun-Tzu-2338), now pending at the Supreme
Court, and the enforcement proceedings of Hsinchu District Court (Case No.
92-Chi-Chaun-Tzu-101),
	 
	 	6.2.3	 	Its unfair competition complaint against Infineon, now pending at the Fair
Trade Commission (Case No. as per the Fair Trade Commission Letter dated December 23,
2002, Ref. No. Kung-2-Tzu-090012530, and other related Letters thereafter);
	 
	 	6.2.4	 	Its criminal complaint against Infineon and some of its officers, now
pending at the Public Prosecutors Office of Taipei District Court (Case No.
93-Cheng-Tzu-8613); and
	 
	 	6.2.5	 	Any other lawsuits and legal proceedings, whether civil, criminal or
otherwise, against Infineon, its directors, supervisors, officers, employees, assigns
and Subsidiaries initiated by ProMOS or by third parties with the knowledge of ProMOS
in any country in the world.

	6.3	 	Each Party warrants and represents to the other Party that, except for the legal
proceedings as described in Section 6.1 or 6.2, respectively, of this Agreement, no other
legal proceedings have been initiated by either Party against the other Party or its
directors, supervisors, officers, representatives or employees as of the Effective Date.
Further, each Party warrants and represents that it is not aware of any other legal
actions by third parties, [**] commenced or in preparation against any of the Parties,
directors, supervisors, officers, representatives or employees in connection with the
License Agreement, PPCRA, ICC Arbitration Case, Taiwan Actions and/or any subject matters
or issues associated therewith, including any claims of unfair competition and
infringements on intellectual property rights. Any breach of the warranties and
representations in this Section 6.3 shall constitute a material breach of this Agreement.
	 
	6.4	 	To carry out the dismissal of actions under Sections 6.1 and 6.2, the Parties agree
that:

	 	6.4.1	 	Immediately upon signing of this Agreement, Infineon and ProMOS shall
submit, through their respective Swiss counsels (Homburger and Froriep Renggli,
respectively), to the arbitral tribunal of the ICC Arbitration Case written
statements to withdraw and dismiss their counterclaims and claims as provided for in
Section 6.1.1 and 6.2.1;
	 
	 	6.4.2	 	Immediately upon signing of this Agreement,

	 	a)	 	Subject to Section 6.4.5 below, Infineon shall deliver to
ProMOS’ Taiwanese counsel (Lin and Partners) a full set of signed originals of
documents for dismissal with prejudice of any and all actions under Section
6.1.3 through 6.1.5, in such form as acceptable to ProMOS’ Taiwanese counsel
for filing with the appropriate authorities; and

13

 

	 	b)	 	ProMOS shall deliver to Infineon’s Taiwanese counsel (Wang and
Partners) a full set of signed originals of documents for dismissal with
prejudice of any and all actions under Section 6.2.3 through 6.2.5, in such
form as acceptable to Infineon’s Taiwanese counsel for filing with the
appropriate authorities.

	 	6.4.3	 	Infineon agrees, by executing and signing the consent form as per Annex D
hereto on the Effective Date, that the bonds in the amount of NT$87,500,000 deposited
by ProMOS with respect to the Taiwan Action as described in Section 6.2.2 hereof
shall be released to ProMOS, and as soon as practicably possible but no later than
the forty-fifth (45st) calendar day after the Effective Date, Infineon
shall deliver to ProMOS a full set of (i) the executed original copy of the notarized
and legalized consent letter, in such form as acceptable to ProMOS’ Taiwanese
counsel, for release of the bonds in the amount of NT$87,500,000; and (ii) the
notarized and legalized certificate of incorporation of Infineon; and (iii) other
documents as reasonably requested by ProMOS for release of the aforesaid bonds
(including a duly executed, notarized and legalized power of attorney to Infineon’s
counsel (Wang and Partners) for receipt of service of process and for waiver of the
appeal against any court order for bond release) with respect to the proceedings
under Section 6.2.2.
	 
	 	6.4.4	 	Each Party shall take, promptly upon request of the other Party, any and
all necessary actions (including providing any additional documents or information,
and making appearance and testimony before the court, arbitral tribunal or other body
of adjudication in favor of the other Party) to cause all the legal proceedings as
described in Section 6.1 or 6.2, to be withdrawn and dismissed with prejudice in
their entirety and for the benefit of the other Party.
	 
	 	6.4.5	 	With regard to the withdrawal as per Section 6.1.2 hereof, Infineon shall,
as soon as practicably possible, deliver to ProMOS’ counsel (Lin and Partners) in the
following order, and together with other required documents for withdrawal of the
Taiwan Action described in Section 6.1.2 above, one of the following documents:

	 	a)	 	Infineon shall provide a duly signed (by Rudolf von Moreau and
Horst Meyer on behalf of Infineon), duly notarized and duly legalized power of
attorney to Infineon’s Taiwanese counsel (Wang and Partners) authorizing the
withdrawal, or
	 
	 	b)	 	If such power of attorney cannot reasonably be provided, Infineon
shall provide ProMOS:

	 	i.	 	after due inquiry to the judge or the panel of the
judges presiding thereover, with documents deemed necessary by the judge
or panel of judges for withdrawal of the Infineon’s petition for
preliminary injunction, or
	 
	 	ii.	 	a duly signed (by Mr. Wolfgang Ziebart and Mr.
Peter Fischl on behalf of Infineon), duly notarized and duly legalized
power of attorney to 

14

 

	 	 	 	Infineon’s Taiwanese counsel (Wang and Partners)
authorizing the withdrawal.

	 	c)	 	As long as none of the withdrawal documents / powers of attorney
listed above in this Section 6.4.5, together with the withdrawal documents as
per Section 6.1.2 above, is delivered by Infineon to ProMOS, the part of the
lump sum in the amount of [**] US Dollars (US$[**]) described
in Section 4.2.1.1 of the First Amendment to the License Agreement shall not
become due. If, as consequence of this failure, only the other installments, but
not such [**] US Dollars (US$[**]), have been paid by ProMOS as
per 30 April 2006, the licenses and rights granted to ProMOS in this Agreement
and in the License Agreement, as amended, shall become perpetual to the extent
such perpetuity is provided for in Section 3.4 of the License Agreement, as
amended, regardless of whether ProMOS has paid such [**] US Dollars
(US$[**]).

	 	6.4.6	 	Immediately after the filing of the dismissal or withdrawal documents,
each of the Parties shall provide and deliver to the other Party documentary evidence
of submission of such documents to the appropriate tribunal, court or body of
adjudication.
	 
	 	6.4.7	 	Where any obligation under Section 6.4 is due to be performed on a day
that is not a business day, such obligation shall be performed on the first business
day following such due performance date.

	 	6.5	 	Each Party hereby waives and agrees to waive any and all rights of appeal, recourse,
review, protest or any other kind of remedies, under any applicable laws or rules of
arbitration, which may arise as a result of or in connection with such withdrawal or
dismissal. Further, each Party hereby undertakes not to commence any further legal actions
(by arbitration or any other legal proceedings) with regard to issues falling under the
releases granted pursuant to Section 4 hereof.
	 
	 	6.6	 	Each Party shall bear its own costs and expenses (including legal fees, and any and
all costs and expenses whether initially prepaid or subsequently incurred by it, or
finally determined by any decision of court or other body of adjudication on cost
allocation to be borne by it) arising from or in connection with the ICC Arbitration Case
and the Taiwan Actions, and the arbitration costs (including any and all arbitrators fees
and ICC fees) arising from the ICC Arbitration Case shall be borne equally by the Parties.
Any right potentially in contradiction to this principle (e.g., the right to compensation)
is hereby waived by both Parties.

	7.	 	Disclosure Requirement and Publicity

	 	7.1	 	Upon signing of this Agreement, each Party will issue, subject to its mandatory
obligations under the applicable laws and regulations for disclosure, its press release,
in such form as in Annex C-1 or C-2 hereto, that will announce the conclusion of
this Agreement. The press releases shall be issued outside of any trading hour of the US,
German and Taiwan stock exchanges.

15

 

	 	7.2	 	Except for the foregoing, and unless otherwise required by applicable laws or
regulations for disclosure, neither Party is permitted to publicize or otherwise make
available to any third party the information associated with this Agreement or the
negotiation on the subject matters hereof, and, except with prior written consent of the
other Party, each Party shall refrain from otherwise publicly commenting, proactively or
upon a third party inquiry, on this Agreement or the settlement reached between the
Parties. This clause does not prevent a Party from disclosing the First Amendment to the
License Agreement in accordance with Section 5 thereof. In any case, neither Party shall
publicize any untrue or misleading information in connection with the rights of the other
Party.
	 
	 	7.3	 	ProMOS Know How shall constitute the Confidential Information of ProMOS, and shall be
kept by Infineon in confidence in accordance with the provisions of confidentiality under
Section 7 of the License Agreement, as amended.

	8.	 	Authority

	 	8.1	 	Each of Infineon and ProMOS represents and warrants to the other that (i) each of
them has already taken necessary corporate actions to sign and execute this Agreement,
(ii) the individuals executing this Agreement possess the full authority and power to do
so, (iii) each Party does so after reviewing and understanding the contents and effects of
this Agreement, and (iv) by executing this Agreement each of the Parties knowingly and
voluntarily binds itself to the terms hereof.
	 
	 	8.2	 	The Parties agree that, to the extent required by this Agreement, either Party shall
cause its Subsidiaries to perform, deliver and comply with any and all of its obligations
under this Agreement, and shall hold the other Party, its directors, supervisors,
officers, representatives, successors, assigns and Subsidiaries harmless against any and
all claims, damages and liabilities arising from or in connection with any act or omission
to act of its Subsidiary under such obligations of this Agreement.

	9.	 	Applicable Laws and Arbitration

	 	9.1	 	This Agreement and the License Agreement (as amended by this Agreement and the First
Amendment to the License Agreement) shall be governed by the substantive laws of the
Switzerland, without regard to its rules on the conflict of laws. The application of the
United Nations Convention on Contracts for the International Sale of Goods of April 11,
1980 is herewith explicitly excluded.
	 
	 	9.2	 	All disputes arising out of or in connection with this Agreement and/or the License
Agreement (as amended by this Agreement and the First Amendment to the License Agreement),
including any question regarding their existence, validity or termination,
shall be finally settled under the Rules of Arbitration of the International Chamber of
Commerce (“Rules”) by three arbitrators appointed in accordance with the said Rules. The
seat of arbitration shall be Zurich, Switzerland. The language to be used in the
arbitration proceeding shall be English. PROVIDED, HOWEVER, THAT (i) any dispute in
connection with infringement, validity, invalidity, enforceability or claim construction
of any patent acquired by or vested in either Party shall not be subject to this
arbitration clause, and shall be resolved by the national (or multinational) court(s)

16

 

	 	 	 	having jurisdiction over such patent issues; and (ii) presentation of, or exercise of its
rights under, any of the promissory notes referred to in Section 5.5 above shall not be
subject to this arbitration clause, and any such promissory note shall be enforced by any
competent national court having jurisdiction over the enforcement of such promissory
notes.

	10.	 	Continuity of License

	 	10.1	 	It is the Parties’ mutual understanding and consent that the licenses and covenants
not to sue granted to ProMOS and to Infineon under this Agreement and the First Amendment
to the License Agreement are self-executing and do not require any kind of ongoing
performance, mutual trust, or trust by a Party to the other Party. The Parties agree that
the licenses granted to a Party shall not be terminable, whether by any cause under this
Agreement, the License Agreement or the First Amendment to the License Agreement, or under
any statutory or regulatory provision or judicial precedent or otherwise of the applicable
laws under Section 9.1, for so long as the relevant licensee (i) is not in material
default with regard to the lump sum payments according to Section 5 hereof (only
applicable to the license granted to ProMOS), and (ii) has not acted in any way materially
inconsistent with Section 7 of the License Agreement, as amended. An act shall not be
considered materially inconsistent with Section 7 of the License Agreement, as amended, if
(i) it relates to Confidential Information unrelated to the Know How or ProMOS Know How,
respectively, or (ii) relates to Confidential Information related to the Know How or
ProMOS Know How, respectively, but only a minor portion of it (provided that, by way of
example, but not limitation, a process module shall not be considered a minor portion any
more), or (iii) if the Party in breach can prove that it has taken the same measures to
prevent the unauthorized disclosure of the other Party’s Confidential Information it
applies to the protection of its own Confidential Information, but no less than reasonable
measures, to prevent unauthorized disclosure of the other Party’s Confidential
Information.
	 
	 	10.2	 	Upon full settlement of the total amount of all lump sums due under Section 5.1
hereof, as described in Section 4 of the First Amendment to the License Agreement,
(subject to Section 6.4.5 hereof and the withholding under Section 5.4 hereof), the
licenses granted in Section 3 of the License Agreement, as amended, shall become perpetual
and fully paid up to the extent such perpetuity is provided for in Section 3.4 of the
License Agreement, as amended.
	 
	 	10.3	 	Material default as referred to in Section 10.1 above shall exist when the respective
Party is in default of the respective contractual obligation and such default is not
reasonably cured within thirty (30) days after receipt of a written default notice from
the other Party specifying such breach. In case a material default as referred to in
Section 10.1 above is not reasonably cured within such thirty (30) days cure period, the
Party not in breach shall have the right to terminate the License Agreement (as
amended by this Agreement and the First Amendment to the License Agreement) by sending a
written termination notice to the Party in breach.
	 
	 	10.4	 	After termination of the License Agreement pursuant to Section 10.3 above, all rights
granted to the Party in breach under License Agreement (as amended by this Agreement and
the First Amendment to the License Agreement), including, but not limited to licenses and
covenants, shall cease to be in effect after the date of receipt of 

17

 

	 	 	 	the termination notice
pursuant to Section 10.3 and the Party in breach shall cease exercising such rights. All
rights granted to the terminating Party under License Agreement (as amended by this
Agreement and the First Amendment to the License Agreement), including, but not limited to
licenses and covenants, shall continue to be in effect, for the term(s) and in a manner as
foreseen, in the License Agreement (as amended by this Agreement and the First Amendment
to the License Agreement) and the terminating Party shall be entitled to so exercise such
rights.

	11.	 	Miscellaneous

	 	11.1	 	Written Form. This Agreement and its Annexes cannot be modified except by a written
instrument signed by both Parties. This requirement of written form can only be waived in
writing.
	 
	 	11.2	 	Notices. Except otherwise provided in this Agreement, communications between the
Parties shall be given in writing, by post or by telefax, to the following addresses of
the Parties or to such other addresses as the Party concerned may subsequently notify in
writing to the other Party:

	 	 	 	If to ProMOS, to:

ProMOS Technologies Inc.

Office of the President

19 Li-Hsin Road

Hsinchu Science Park

Hsinchu, Taiwan, ROC

Fax: +886 3 578 6189
	 
	 	 	 	If to Infineon:

Infineon Technologies AG

Att: Legal Department

PO Box 80 09 49

St.-Martin-Str. 53

81609 München

Germany

Fax: +49 89 234 26983

	 	11.3	 	Assignment. No right or interest in this Agreement and the License Agreement, as
amended, shall be assigned or transferred to any third party by either ProMOS or Infineon
without first obtaining written consent from the other Party, except that Infineon may
assign, with the prior written consent of ProMOS (which consent shall not be unreasonably
withheld) this Agreement and the License Agreement, as amended, including licenses, rights
and obligations hereunder and thereunder (however, except that the right resulting from
the waiver of offset granted to Infineon
in Section 5.6 hereof and the rights to and interests in the promissory notes provided
for in Section 5.1 and 5.5 hereof are not assignable at all), but only, however, to (a) a
Subsidiary or (b) to a third party as part of a transfer of all or of that part of its
activities, to which such licenses or rights pertain, whether by spin-off, sale, merger
or consolidation, in each and any case, however, subject to the conditions that:

18

 

	 	11.3.1	 	Such assignee shall concurrently grant to ProMOS the licenses of the same or
substantially same scope as those granted in Section 3 of the License Agreement, as
amended, under (i) any and all patents acquired by or issued to such assignee before
the spin-off, sale, merger or consolidation, which are entitled to an effective
priority filing date prior to [**], for the remaining lives of such patents, (ii)
any and all patents acquired by or issued to such assignee before the spin-off,
sale, merger or consolidation, which are entitled to an effective priority filing
date between [**] and [**], for a term expiring on [**], and (iii) any and all
non-patent intellectual property rights acquired by, vested in or issued to such
assignee in the Know How, for a perpetual term; and
	 
	 	11.3.2	 	Such assignee shall be bound by the terms, conditions and restrictions of this
Agreement and the License Agreement, as amended, and be granted the licenses and
rights under this Agreement and the License Agreement, as amended, as if it were
named herein and therein ever since the Effective Date of each relevant agreement;
and
	 
	 	11.3.3	 	As a result of the assignment, (i) any and all Licensed Patents and Know How
already granted by Infineon to ProMOS shall continue to be granted to ProMOS, and
(ii) the licenses and rights granted by ProMOS to Infineon under Section 4.4 of the
License Agreement, as amended, (Grant-Back License to Infineon), shall cease with
respect to any activities of Infineon as of the date of such assignment to the
assignee. To the extent that Infineon does not assign the Licensed Patents or other
intellectual property rights associated with the Know How to the assignee, the
licenses and rights granted by Infineon under this Agreement and the License
Agreement, as amended, shall continue to be granted to ProMOS by Infineon; and
	 
	 	11.3.4	 	Infineon shall be held liable for any act or omission to act, constituting a
breach of this Agreement and the License Agreement, as amended, by such assignee,
for as long as such assignee remains a Subsidiary of Infineon and for two (2) years
thereafter; and
	 
	 	11.3.5	 	In case an assignment had an adverse impact on any rights and interests accrued to
or to be accrued to ProMOS under the applications or approvals for tax exemption or
reduction as provided for in Section 5.4, Infineon shall indemnify and hold ProMOS
harmless against any and all liabilities (including without limitation the principal
sum of the Taxes imposed, and any penalties and interests associated therewith) in
connection with the Taxes as applicable to the lump sum payments described in
Sections 4.2.1.1, 4.2.2.1 and 4.2.2.2 of the First Amendment to the License
Agreement.
	 
	 	11.3.6	 	The Parties assume that no taxes, charges or other duties will become due in
connection with the above assignment. However, if the tax laws of any country
require the payment of taxes (in the form of withholding or otherwise) due to such
assignment, such taxes shall be borne and paid by Infineon and/or the assignee.

19

 

	 	11.4	 	Export and Import Compliance. Export of controlled commodities, technical data, or
information about such commodities or data may be prohibited by law. Each Party agrees to
take all steps reasonably necessary to comply with applicable export and import laws and
regulations as they apply to use and distribution of the subject matter of this Agreement
and/or the License Agreement, as amended.
	 
	 	11.5	 	Explicit Grants. Except as specifically provided for in this Agreement and the
License Agreement, as amended, no rights or licenses of any kind (whether express or
implied) are granted hereunder or thereunder.
	 
	 	11.6	 	Severability. If any provision contained in this Agreement and/or the License
Agreement, as amended, is or becomes ineffective or is held to be invalid by a competent
authority or court having final jurisdiction thereover, all other provisions of this
Agreement and/or the License Agreement, as amended shall remain in full force and effect
and shall be substituted for the said invalid provision a valid provision having an
economic effect as similar as possible to the original provision.
	 
	 	11.7	 	Entire Agreement. This Agreement, the License Agreement, and that certain
non-disclosure agreement between the Parties regarding the ICC Arbitration Case dated
November 9, 2004, constitute the entire understanding and agreement between the Parties
hereto with respect to the subject matter hereof and shall supersede and cancel all
previous agreements, negotiations and commitments, either oral or written, relating
hereto. Only the following annexes to this Agreement shall constitute an integral part of
this Agreement: Annexes A (First Amendment to the License Agreement), C (Press Releases)
and D (Consent Form for Release of Bonds); for the avoidance of doubt, Annex B is not an
integral part of this Agreement.
	 
	 	11.8	 	Counterparts. This Agreement may be executed in several counterparts, each of which
shall be deemed to be an original, but all of which shall constitute one and the same
instrument.

*** Remainder of page left blank ***

20

 

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

	 	 	 	 	 	 	 
	Infineon Technologies AG	 	ProMOS Technologies Inc.
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Dr. Thomas Schwarcz
	 	By:
	 	/s/ Dr. Min-Liang Chen
	Name:

	 	Dr. Thomas Schwarcz
	 	Name:
	 	Dr. Min-Liang Chen
	Title:

	 	Corporate Vice President
	 	Title:
	 	Chairman & President
	Date:

	 	10 November 2004
	 	Date:
	 	10 November 2004
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Florian Boegel	 	 	 	 
	Name:

	 	Florian Boegel	 	 	 	 
	Title:

	 	Corporate Legal Counsel	 	 	 	 
	Date:

	 	10 November 2004	 	 	 	 

To the extent this Agreement changes, impacts or otherwise relates to those Sections of the
License Agreement that Mosel Vitelic Inc. had previously accepted, Mosel Vitelic Inc. hereby
accepts this Agreement. Further, Mosel Vitelic Inc. agrees to the assignment of the Infineon MVI
Patent Cross License Agreement as set forth in Section 3.10 and Annex B of this Agreement.

	 	 	 	 
	Mosel Vitelic Inc.
	 
	 	 	 
	 
	 	 	 
	By:

	 	/s/ Dr. John Seto	 
	Name:

	 	Dr. John Seto	 
	Title:

	 	Executive Vice President	 
	Date:

	 	10 November 2004	 

21

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