Document:

exv10w13

 

EXHIBIT 10.13

CONFIDENTIAL TREATMENT

AMENDED AND RESTATED

SHAREHOLDERS’ AGREEMENT

     This Amended and Restated Shareholders’ Agreement (“Amended Agreement”), made this
12th day of August, 2005 (the “Effective Date”) by and among Taiwan Semiconductor
Manufacturing Co., Ltd. a company incorporated under the laws of Taiwan, Republic of China
(“TSMC”), OmniVision International Holding Ltd., an exempted company incorporated under the
Companies Law of Cayman Islands (“OmniVision”), and VisEra Technologies Company, Ltd., a company
incorporated under the laws of Taiwan, Republic of China (“VisEra Taiwan”), and VisEra Holding
Company, an exempted company incorporated under the Companies Law of Cayman Islands (“VisEra
Cayman”). OmniVision and TSMC are each sometimes referred to herein as a “Shareholder” and
collectively as the “Shareholders”; OmniVision, TSMC, VisEra Taiwan and VisEra Cayman are each
sometimes referred to herein as a “Party” or collectively as the “Parties”.

BACKGROUND

     A. TSMC is engaged in the business of manufacturing and selling semiconductor related
products.

     B. OmniVision is engaged in the business of developing, manufacturing and selling CMOS-based
products including CMOS image sensors.

     C. TSMC and OmniVision have formed a joint venture (the “JV”) under the Shareholder Agreement
dated October 29, 2003 (“Initial Shareholders Agreement”) and formed VisEra Taiwan as the initial
joint venture entity.

     D. TSMC, OmniVision and VisEra Taiwan have been operating materially in accordance with the
Initial Shareholders Agreement including the investment made by each TSMC and OmniVision of
US$1,500,000 into VisEra Taiwan.

     E. After considering various factors, TSMC, OmniVision and VisEra Taiwan desire to restructure
and reorganize VisEra Taiwan and reflect the various agreements among TSMC, OmniVision and VisEra
Taiwan in the Amended Agreement, including the selection of VisEra Cayman as the parent JV entity
which will wholly own VisEra Taiwan.

     NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements and
covenants contained herein, the Parties agree as follows:

ARTICLE 1. PURPOSES, STRUCTURE AND CAPITALIZATION.

     1.1 Purposes. The purposes of this JV and the establishment of the JV entities described
below are: (1) to provide to [***] high-quality, cost-efficient and fast-turn-around [***] and
automated final testing services in the ROC [***] for certain [***] products; and (2) to consolidate
the [***] business relationship between OmniVision and TSMC (the
“Purposes”). Recognizing that the Purposes may be achieved in the most effective and efficient
manner by combining the technologies, expertise, equipment and personnel from both OmniVision and
TSMC, OmniVision and TSMC hereby mutually agree upon the establishment and eventual structure of
the JV entities described herein. Subject to the terms,

	 	 	 
	 
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CONFIDENTIAL TREATMENT

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conditions, covenants and obligations contained herein, TSMC and OmniVision anticipate that the
formation and operation of the JV entities will be mutually beneficial to TSMC and OmniVision.

     1.2 Structure. TSMC and OmniVision agree that VisEra Cayman shall be parent JV entity, and
its jurisdiction for incorporation and/or registration was selected on the basis of at least the
following factors: suitability for achieving the exit strategies, including the possibility of
becoming in due course a publicly listed and traded company on a major stock exchange or market,
including without limitation one or more of the NASDAQ National Market, the Taiwan Stock Exchange,
and the Stock Exchange of Hong Kong (an “Initial Public Offering”); and operability from the
corporate operation, governance, management, and tax planning viewpoints; acceptance by potential
future investors for prospective equity investment and capital infusion. The Parties agree to make
such further elections, including without limitation those contemplated by Internal Revenue Service
Form 8832, and execute such documents on behalf of VisEra Cayman as the Parties or any of them may
deem advantageous from a tax planning perspective. The Shareholders agree that if the elective
procedures adopted upon the formation of VisEra Cayman prove inadequate to the effect certain
advantageous tax strategies subsequently decided to be in the best interests of the Parties, and a
new entity may be formed to take the place of VisEra Cayman, and shall be organized as necessary to
accomplish the Purposes. In the event such substitute entity is deemed necessary, VisEra Taiwan
agrees to make certain advantageous tax elections at the inception of the new entity as the
Shareholders may request or require.

     1.3 Capitalization. TSMC and OmniVision agree that, at the end of Phase III described in
Section 3.7, the total cumulative capital from Phase I to Phase III of VisEra Cayman shall be at
least U.S. Dollars $65,000,000 million.

     1.4 Ownership Ratio. TSMC and OmniVision agree that, at the end of Phase III, the relative
cumulative ownership interests in VisEra Cayman held respectively by TSMC and OmniVision (or their
respective designated entities approved by both parties) shall be in the ratio of 1:1, exclusive of
the Technical Stock (the “Ownership Ratio”). In the event one or more additional investor invests
in VisEra Cayman, the Ownership Ratio shall be adjusted as mutually agreed.

ARTICLE 2. FORMATION OF JV ENTITIES.

     2.1 Formation of VisEra Taiwan. TSMC and OmniVision successfully incorporated VisEra Taiwan
in the ROC as the initial JV entity on November 19, 2003.

     2.2
Name. The official and legal name of VisEra Taiwan is:(i) “” (in
Chinese); (ii) “VisEra Technologies Company, Ltd.” (in English).

     2.3 Formation of VisEra Cayman. VisEra Cayman was incorporated in the Cayman Islands on March
31, 2005. A copy of the charter documents of VisEra Cayman is attached hereto in Exhibit A.

     2.4 Name. The official and legal name of VisEra Cayman is “VisEra Holding Company”.

	 	 	 
	 
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and Exchange Commission. Omitted portions have been filed separately with the Commission.

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     2.5 Succession of VisEra Cayman. In the event a replacement entity (for the reasons set forth
in Section 1.2 and subject to the limitations in Section 4.5) assumes the rights and obligations of
VisEra Cayman hereunder, the Parties agree that Articles of Incorporation of the successor entity,
together with the information required by Sections 2.3, 2.4, 4.1, 4.2, and 4.3, shall be attached
hereto as Exhibit B and immediately thereupon become a part of this Amended Agreement.

ARTICLE 3. SUBSCRIPTION FOR STOCK.

     3.1 Capitalization of Phase I; Funding of VisEra Taiwan.

          (a) Phase I shall be deemed to have commenced on October 29, 2003 and ended upon the Effective
Date of the Amended Agreement (“Phase I”).

          (b) In Phase I, TSMC and OmniVision each contributed the amount set forth below in (e) in cash
to VisEra Taiwan in exchange for the number of shares of common stock of VisEra Taiwan.

          (c) In Phase I, in consideration of acquiring the assignment of technology needed from the
technical team of VisEra Taiwan, VisEra Taiwan issued its common stock having value of U.S. Dollars
three million (US$3,000,000), (“Technical Stock”) to the members of the technical team or
employees of VisEra Taiwan.

          (d) The shares issued by VisEra Taiwan were legended as described in Section 3.9 and issued as
fully paid and non-assessable and issued at a par value of NT$10.

          (e) The capitalization of VisEra Taiwan during Phase I is set forth immediately below:

	 	 	 	 	 	 	 	 	 
	Phase I	 	USD	 	NTD	 	Common Shares
	TSMC
	 	1,500,000	 	51,000,000	 	 	5,100,000	 
	OmniVision
	 	1,500,000	 	51,000,000	 	 	5,100,000	 
	Technical Stock
	 	3,000,000	 	102,000,000	 	 	10,200,000	 

	 	 	 
	 	 	(The historical figures above were based on the effective exchange rate in October 2003 of 34
NTD per one USD)

     3.2 Capitalization of Phase II; Funding of VisEra Cayman. .

          (a) Phase II shall commence as of the Effective Date and shall continue until the Approval (as
defined below) is obtained (“Phase II”).

          (b) As soon as practicable after the Effective Date, VisEra Taiwan shall use not more than
US$4,200,000, drawn on VisEra Taiwan’s short-term facilities, to acquire as soon as practicable
approximately 9.8% of the currently issued and outstanding equity shares of [***] from certain of
[***] shareholders, at the price of [***] per share.

          (c) As soon as practicable after the Effective Date, TSMC and OmniVision shall contribute
simultaneously the amount set forth below to VisEra Cayman for the purposes set forth in (d) below.

          (i) The consideration for these common shares shall be made in cash or in kind as set
forth in (ii) below. These shares issued by VisEra Cayman shall

 
	 	 	 
	 
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be legended as described in Section 3.9. The shares issued upon said payment shall be
issued as fully paid and non-assessable.

          (ii) VisEra Cayman shall issue these common shares at a par value of US$1.00 as set
forth immediately below:

	 	 	 	 	 
	Phase IIa	 	USD	 	Common Shares
	TSMC	 	7,500,000	 	7,500,000
	OmniVision	 	7,500,000	 	7,500,000

          (d) VisEra Cayman shall, upon completion of the transaction set forth above in Section 3.2(c),
use the funds received therefrom in transactions including the following:

          (i) use of US$4,200,000 to purchase from VisEra Taiwan the [***] shares acquired pursuant to
3.2(b) at the price paid by VisEra Taiwan;

          (ii) no earlier than fifty (50) days from the completion of Section 3.2(b), use of not more
than US$8,400,000 to acquire approximately 19.8% of the currently issued and outstanding shares of
[***], also at the price of [***] per share; and

          (iii) after gaining representative presence in the management and control of [***] as a result
of the share purchase transactions described above, use of up to the remaining 3.2(c) capital to
either subscribe to a portion of [***] shares to be newly issued for capacity expansion purposes,
or purchase existing [***] shares from certain shareholders of [***] at [***].

          (e) As soon as practicable after the Effective Date, TSMC, OmniVision, VisEra Taiwan and
VisEra Cayman shall conduct one or more transactions (including without limitation inversion or
like “cash-in-cash-out” or “circular” transactions as described in (i), (ii) and (iii) below) which
are tax-efficient to TSMC, and OmniVision, and consistent with the terms of this Section 3.2, such
that VisEra Taiwan will become a wholly owned subsidiary of VisEra Cayman, except for the technical
shares of VisEra Taiwan, which shares shall be transferred to VisEra Cayman as soon as practicable
as described in 3.2(f).

          (i) VisEra Cayman shall wire an aggregate of US$3,000,000, representing the Phase I investment
amount from the Shareholders, to one or more escrow account for the purposes of purchasing the
VisEra Taiwan shares owned by OmniVision and TSMC, respectively,

          (ii) OmniVision and TSMC will transfer their respective shares of VisEra Taiwan to VisEra
Cayman,

          (iii) OmniVision and TSMC shall make a capital contribution of the aggregate of US$3,000,000
so received to VisEra Cayman in exchange for the aggregate of 3,000,000 VisEra Cayman shares, and

          (iv) TSMC, OmniVision, VisEra Taiwan and VisEra Cayman acknowledge and agree that such
inversion transactions shall only be made pursuant to a “plan of organization” conforming to the
United States Internal Revenue Code Section 351.

 
	 	 	 
	 
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          (f) Subject to the appropriate approval by Board of Directors of VisEra Taiwan, the approval
of relevant government authorities, and commercially reasonable resolution of any taxation issues,
VisEra Cayman shall issue stock corresponding the foregoing shares of Technical Stock as soon as
practicable after the funding of VisEra Cayman. The shares issued under this Section 3.2(f) (the
“Corresponding Stock”) shall, in the event of future transfer, be subject to rights of first
refusal in favor of, first, VisEra Cayman; and second, TSMC and OmniVision on an equal basis, and
shall be legended as set forth in Section 3.9.

          (g) In addition to contribution of capital above in Section 3.2(c), at a time mutually agreed
to by TSMC and OmniVision, TSMC and OmniVision shall each contribute the amount set forth below to
VisEra Cayman in exchange for the VisEra Cayman common shares set forth in (iii) below.

          (i) The consideration for such shares shall be made in cash or in kind. These shares
issued by VisEra Cayman shall be legended as described in Section 3.9 The shares issued upon
said payment shall be issued as fully paid and non-assessable.

          (ii) VisEra Cayman shall issue these common shares at a par value of US$1.00 as set
forth immediately below:

	 	 	 	 	 	 	 
	Phase IIb	 	USD	 	Common Shares
	TSMC	 	9,500,000	 	 	9,500,000	 
	OmniVision	 	9,500,000	 	 	9,500,000	 

     3.3 Future subscriptions; Pre-emptive Rights. Other than for stock set forth in Section
3.2(c) and (g) and 3.6(c) below, each TSMC and OmniVision shall have preemptive rights to the
issuance of any new shares of the capital stock of VisEra Cayman, thereby allowing each of TSMC and
OmniVision to maintain its percentage ownership of the capital stock at all stages contemplated by
this Amended Agreement. Future subscriptions for VisEra Cayman stock may be made in cash,
technology, or other in kind contributions, or any combination thereof to the extent allowed by law
and as approved by the Board of Directors of VisEra Cayman . Such stock shall have such par value
as shall be determined by the Board of Directors from time to time.

     3.4 No Issuance of Technical Stock. No Technical Stock or employee compensation-related
stock, such as stock options, shall be issued during Phase II.

     3.5 The Phase II Closings for Subscription of Common Shares. The “Phase II Closing” shall
mean the consummation of the Phase II Transactions set forth in Section 3.2. The Phase II Closings
shall take place on the “Phase II Closing Dates” at the principal offices of VisEra Cayman or
another location mutually agreed upon. The capitalization of VisEra Cayman shall reflect the
Ownership Ratio on the Phase II Closing Dates. Within a reasonable time after the Phase II Closing,
the Parties shall each use their commercially reasonable efforts to (a) apply for and (b) obtain
the approval by the relevant authorities of Taiwan, R.O.C. to permit TSMC and VisEra Taiwan [***]
for providing [***] and testing service, and either (c) locate additional investor(s) making an
investment in VisEra Cayman in the

	 	 	 
	 
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aggregate amount not to exceed a portion of the total equity share voting rights of VisEra
Cayman equal to 19.98% minus X% where X is equal to the total percentage of the Corresponding Stock
described in 3.2(f), or (d) secure the appropriate approvals from their respective Boards of
Directors to proceed with the transactions described in Phase III, or both (c) and (d)
(collectively the “Approval”).

     3.6 Final JV Entity; Phase III Transaction; Capitalization of Phase III.

          (a) Phase III shall commence on the date of the Approval (“Phase III”).

          (b) Immediately or as soon as practicable upon the Approval, the Parties shall cause the
further capitalization of VisEra Cayman by (i) the acquisition of the capital stock of [***] or
(ii) the acquisition of the [***] as set forth in Section 8.1 below; or (iii) the exchange or
contribution of the capital stock of [***] for capital stock of VisEra Cayman, through one or more
appropriate transactions mutually agreed upon by the Parties (collectively, the “Phase III
Transaction”). To the maximum extent possible, the Parties shall cooperate with one another to
minimize tax and other liabilities to any Party or Parties resulting from structuring and
capitalization of the JV.

          (c) In consideration of the contributions in cash and in kind made by TSMC and OmniVision
described in this Section 3.6, VisEra Cayman shall issue the numbers of common shares to TSMC and
OmniVision, respectively, in at least the amounts as set forth immediately below, at a par value of
US$1.00 and a purchase price of US$1.00. Such shares shall be issued as fully paid and
non-assessable.

          (d) VisEra Cayman shall issue to the party making any Additional Investment as contemplated by
3.5(c) such securities as the Board of Directors of VisEra Cayman shall deem advisable.

	 	 	 	 	 
	Phase III	 	USD	 	Common Stock
	TSMC	 	6,500,000	 	6,500,000
	OmniVision	 	6,500,000	 	6,500,000
	Additional Investment	 	15,000,000	 	N/A*

	 	 	 
	 	 	(*Actual voting representation potentially subject to the restrictions of Section 3.5(c))

     3.7 The Phase III Closing for Subscription of Common Shares.

          (a) The “Phase III Closing” shall mean the consummation of the Phase III Transaction set forth
in Section 3.6. The Phase III Closing shall take place on the “Phase III Closing Date” at the
principal offices of VisEra Cayman or another location mutually agreed upon. The capitalization of
VisEra Cayman shall reflect the Ownership Ratio on the Phase III Closing Date.

          (b) The Shareholders reserve the right to cause VisEra Cayman to issue an additional 3,000,000
shares of stock, of a to-be-determined nature, in order to increase the pool of shares available to
VisEra employees subsequent to the Phase III Closing. Any shares beyond the additional 3,000,000
must be specifically approved by the Shareholders.

 
	 	 	 
	 
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and Exchange Commission. Omitted portions have been filed separately with the Commission.

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     3.8 Cumulative Shareholding. The total minimum cumulative capitalization structure and
estimated cumulative stockholding ratio of VisEra Cayman after the transfers described in Section
3.2(e) and (f) and for each of the Phases I, II, and III is summarized below:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Cumulative	 	 	 	 	 	 	 	 	 	 
	 	Capital and	 	 	Phase I	 	 	Phase II	 	 	Phase III	 
	 	Shareholding	 	 	Contribution (USD)	 	 	Shareholding (%)	 	 	Contribution(USD)	 	 	Shareholding (%)	 	 	Contribution (USD)	 	 	Shareholding (≈%)	 
	 	TSMC
	 	 	 	1,500,000	 	 	 	 	25.00	%	 	 	 	18,500,000	 	 	 	 	46.25	%	 	 	 	25,000,000	 	 	 	 	>40.00	%	 
	 	OmniVision
	 	 	 	1,500,000	 	 	 	 	25.00	%	 	 	 	18,500,000	 	 	 	 	46.25	%	 	 	 	25,000,000	 	 	 	 	>40.00	%	 
	 	Additional Investment
	 	 	 	0	 	 	 	 	0	 	 	 	 	0	 	 	 	 	0.00	%	 	 	 	15,000,000	 	 	 	 	N/A	 	 
	 	Tsai, Kuo-Chih
	 	 	 	0	 	 	 	 	0.00	%	 	 	 	1	 	 	 	 	0.00	%	 	 	 	1	 	 	 	 	0.00	%	 
	 	Technical Stock*
	 	 	 	3,000,000	 	 	 	 	50.00	%	 	 	 	3,000,000	 	 	 	 	7.50	%	 	 	 	3,000,000	 	 	 	 	4.41	%	 
	 	Total
	 	 	 	6,000,000	 	 	 	 	100.00	%	 	 	 	40,000,001	 	 	 	 	100.00	%	 	 	 	68,000,001	 	 	 	 	100.00	%	 
	 

 

			
	 	 	(Phase I values given at the then-existing Phase I exchange rate of NTD34:US$1)

(*Technical Stock share values assume the transactions described in 3.2(f) have taken
place)

     3.9 Stock Certificates. Each Party agrees that the stock certificates of VisEra Cayman
first subscribed or thereafter acquired by any party subject to this Amended Agreement shall be
endorsed with the following legend:

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN AGREEMENT DATED
OCTOBER 29, 2003, AND AS AMENDED ON JULY ___, 2005 BY AND AMONG TAIWAN SEMICONDUCTOR
MANUFACTURING COMPANY, LTD., OMNIVISION INTERNATIONAL HOLDING, LTD. VISERA TAIWAN
AND VISERA CAYMAN, COPIES OF WHICH ARE ON FILE AT THE MAIN OFFICE OF THE CORPORATION
AND ANY SUBSEQUENT HOLDER ACQUIRING THESE SHARES IN ANY MANNER WHATSOEVER TAKES THE
SAME UNDER AND SUBJECT TO THE TERMS OF SAID AGREEMENTS.”

     3.10 Dilution. The Parties agree that notwithstanding anything to the contrary in this
Amended Agreement, including Section 3.7(b), or the Exhibits, any further issuance of and
subscription for VisEra Cayman stock, or any stock held by VisEra Cayman’s subsidiaries, shall not
be diluted at any time without the prior written consent of TSMC and OmniVision.

ARTICLE 4. ARTICLES OF INCORPORATION.

     4.1 Articles of Incorporation. The Articles of Incorporation of VisEra Cayman provide for the
following:

          (a) The duration of VisEra Cayman shall be perpetual.

          (b) The total initial number of shares authorized to be issued by VisEra Cayman is fifty
million (50,000,000) of common shares with a par value of US$1.00 per share.

 
	 	 	 
	 
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          (c) The initial registered office of VisEra Cayman shall be at the offices of Bridge Street
Services Limited, Buckingham Square, 3rd Floor, 720 West Bay Road, P.O. Box 30691SMB,
Grand Cayman, Cayman Islands, British West Indies.

     4.2 Form of Articles of Incorporation and Conflict. The Articles of Incorporation are
substantially in the form annexed hereto as Exhibit A. In the event of a conflict between this
Amended Agreement and any provision of the Articles of Incorporation, the Articles of Incorporation
shall control.

     4.3 Ratification of Articles of Incorporation. TSMC and OmniVision ratify the formation of
VisEra Cayman on March 31, 2005 and the adoption of the Articles of Incorporation of VisEra Cayman.

     4.4 Covenant to Amend Articles of Incorporation. The Parties agree to take such steps as are
necessary to amend the Articles of Incorporation to increase, per Section 34 of the Articles of
Incorporation, the number of shares set forth in 4.1(b) in order to achieve the Purposes, including
but not limited to the transactions contemplated in Phase III.

     4.5 Covenant to Retain Obligations of Replaced Entity. The Parties agree that if, for the
reasons set forth in Section 1.2, the replacement herein of VisEra Cayman becomes necessary or
desirable to accomplish the Purposes, that such replacement entity shall specifically be structured
and organized substantially the same as VisEra Taiwan and VisEra Cayman (except to the limited
extent necessary to accomplish the Purposes) and shall be required to assume all the duties and
obligations of VisEra Cayman hereunder.

ARTICLE 5. MANAGEMENT OF VISERA.

     5.1 Inaugural Meeting of the Promoters. TSMC and OmniVision shall elect the Directors of each
of VisEra Cayman and VisEra Taiwan in accordance with Section 5.3 and 5.4.

     5.2 Board of Directors and Supervisors. The Articles of Incorporation of VisEra Taiwan
provide that the Board of Directors will consist of not less than three (3) and not more than five
(5) Directors and two (2) Supervisors. The Parties intend that the Board of Directors of VisEra
Cayman shall be organized substantially the same as that of VisEra Taiwan, except that VisEra
Cayman shall have no Supervisors.

     5.3 Board Members and Supervisors Nomination. OmniVision, and TSMC agree that the initial
Boards of Directors of VisEra Cayman and VisEra Taiwan (each the “Board” as applicable and the
“Boards” collectively) will consist of three (3) Directors. OmniVision shall nominate one (1)
Director (an “OmniVision Director”) and TSMC shall nominate one (1) Director (a “TSMC Director”).
The third (3rd) Director shall be nominated by the mutual agreement of TSMC and OmniVision. In the
event that OmniVision and TSMC agree to increase the number of Directors to five, OmniVision shall
nominate two (2) Directors (each an “OmniVision Director”) and TSMC shall also nominate two (2)
Directors (each a “TSMC Director”). The fifth (5th) Director shall be nominated by the mutual
agreement of TSMC and OmniVision. For VisEra Taiwan only, TSMC shall nominate one (1) Supervisor
and OmniVision shall nominate one (1) Supervisor. Each Shareholder shall vote all of its shares
for the election of such nominees of Directors. If any Director resigns or is unable to serve, the
Party which nominated him or her shall, as soon as possible, nominate

 
	 	 	 
	 
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a replacement and each Shareholder shall vote all of its shares for the election of such
nominee so that the Board shall have either three (3) members or five (5) members, as applicable,
at all times, provided, that if a Party having the right to nominate a Director or Supervisor does
not do so, within 60 days of the commencement of vacancy, the Board consisting of the remaining
Directors shall have the right to nominate a new Director or Supervisor to fill the vacancy.

     5.4 Meetings of the Board of Directors. At the first and subsequent meetings of the Boards,
the Directors shall appoint such officers and managers of their respective entities as they decide
is prudent and shall establish such resolutions as are necessary for their operations and otherwise
to deal with all matters arising out of the implementation of the Initial Shareholders Agreement
and this Amended Agreement.

     5.5 Special Rights. At such time, if any, as either TSMC or OmniVision acquires fifty-one
percent (51%) interest in either VisEra Taiwan or VisEra Cayman, TSMC and OmniVision shall promptly
cause a special meeting of the shareholders to be called, at which time the then sitting Board
shall resign, and the Party owning the majority of either VisEra Taiwan or VisEra Cayman shares
shall nominate (i) in the case of a three-member Board, two (2) members, and the other Party shall
nominate one (1) member; and (ii) in the case of a five-member Board, three (3) members, and the
other Party shall nominate two (2) members. Each Shareholder shall vote all of its shares for the
election of such nominees.

     5.6 Officers. Each shareholder shall cause the Director (s) nominated by it to vote in favor
of the election of the officer positions of each of VisEra Cayman and VisEra Taiwan as shall be
mutually agreed.

     5.7 President. The President of VisEra Taiwan shall be appointed by the Board. The President
shall be nominated by three Board members until such time, if any, as either TSMC or OmniVision
acquires a fifty-one percent (51%) interest in VisEra Taiwan, thereupon the President shall resign
and the then sitting Chairman shall promptly call a special meeting of the Board at which time the
majority Shareholder’s Board members shall nominate a new President; and further provided, the
other Party agrees to cause its shares to be voted for the said nominee for President.

     5.8 Empowerment. Pursuant to the procedures prescribed in this Amended Agreement and by the
Articles of Incorporation of each of VisEra Cayman and VisEra Taiwan, the Boards of Directors shall
be empowered to discuss and take action on all fundamental issues concerning their respective
entities including, but not limited to, expansion projects, budgets, long term (greater than one
(1) year duration) agreements, distribution of profits, borrowing of capital or the financing of
VisEra Taiwan concerning manpower and pay scales.

     5.9 Authority. The Directors shall act only as a Board, and an individual Director shall have
no power as such. Except as otherwise limited by law, this Amended Agreement, or the Articles of
Incorporation, all business, affairs and powers of each of VisEra Cayman and VisEra Taiwan shall be
exercised by, or under the authority/control of the Board of Directors. The Board of Directors
may, by contract, resolution or otherwise as they may see fit, give general or limited or special
power and authority to any Director, officer, employee and/or other person to transact the general
business, or any special business of each of VisEra

	 	 	 
	 
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Cayman and VisEra Taiwan, and may give powers of attorney to agents of VisEra Taiwan to
transact any special business requiring such authorization.

     5.10 Board Guidelines. In addition to such authority prescribed by law to a Board of
Director(s), the Boards of Directors shall issue guidelines or directives for:

          (a) The financial goals of VisEra Cayman and VisEra Taiwan;

          (b) The business plan of VisEra Taiwan;

          (c) Any borrowing by either VisEra Cayman or VisEra Taiwan;

          (d) The application and distribution of profits as dividends;

          (e) The appointment, terms of service, remuneration, and dismissal of the managers of VisEra
Taiwan except as is otherwise set forth in the ROC law, this Amended Agreement, or the Articles of
Incorporation of VisEra Taiwan;

          (f) The size of the staff and of the work force required by VisEra Taiwan from time-to-time
and the general policies and guidelines for their appointment and dismissal; and

          (g) The extent of any special reserve funds, development funds, and bonus and welfare funds.

     5.11 Board Responsibility. The Board of Directors of VisEra Taiwan shall prepare management
and operating instructions in the form of Board Resolutions to be observed in the day-to-day
conduct and administration of VisEra Taiwan’s operations, and will take such steps as are necessary
to ensure that those resolutions are available to and observed by the management of VisEra Taiwan.
The Boards of Directors will pass such resolutions as may be necessary to put into practice in
VisEra Cayman and VisEra Taiwan the provisions of this Amended Agreement.

     5.12 Supermajority Actions. Notwithstanding the foregoing, the Parties agree that the below
stated corporate actions shall be referred to the Board and that no decision in relation thereto
shall be taken or implemented (whether by the Parties as Shareholders of VisEra Cayman or
otherwise) unless such decision has received the approval of at least one OmniVision Director and
one TSMC Director, until such time as either TSMC or OmniVision shall obtain an equity interest of
51% or more, or after the completion of an Initial Public Offering in any jurisdiction, at which
time this provision shall terminate:

          (a) The entering into any new business activity or the change in its major products or
services;

          (b) The alteration, amendment, cancellation or other change in the schedules for technology
transfer, production start up and output;

          (c) The alteration, amendment, cancellation or invalidation of any and all supply contracts or
technical assistance agreements between VisEra Taiwan and TSMC or OmniVision;

 
	 	 	 
	 
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          (d) The incurring of any borrowings, loans or other indebtedness in excess of NT Dollars one
hundred million (NTD 100,000,000);

          (e) The acquisition or disposal of any capital asset where the aggregate amount involved in
the transaction is more than NT Dollars fifty million (NTD 50,000,000);

          (f) The merger, acquisition, divestiture, transfer, sale or disposal of all or a substantial
portion of VisEra Taiwan’s business or assets, joint venture, or partnership with, by or of either
of VisEra Cayman or VisEra Taiwan;

          (g) The alteration of the capital structure of either of VisEra Cayman or VisEra Taiwan
(including the increase in authorized capital, issuance of new shares or securities, etc., except
as set forth in Section 4.4);

          (h) The alteration, amendment or restatement of the Articles of Incorporation of VisEra
Taiwan;

          (i) Passage of any resolution to dissolve, liquidate, file voluntary bankruptcy, wind up, or
reorganize either of VisEra Cayman or VisEra Taiwan;

          (j) The alteration or cancellation of the capitalization obligations of the Stockholders;

          (k) The entering into any contractual commitment in excess of NT Dollars fifty million (NTD
50,000,000) by VisEra Taiwan;

          (l) The declaration of dividends;

          (m) The sale or license of software, patents, other intellectual property or other technology
by VisEra Taiwan except as set forth in this Amended Agreement or the other agreements between
either of VisEra Taiwan or VisEra Cayman and the other Parties described herein;

          (n) Approval of annual and quarterly budgets of VisEra Taiwan, and proposals or reports
required to be submitted to the Shareholders; and

          (o) The entering into any technical assistance agreement, or the substantial equivalent,
between either of VisEra Cayman or VisEra Taiwan and any party other than TSMC or OmniVision.

     5.13 Regular Meetings of the Board. The Board of Directors shall meet together for the
dispatch of routine business at least four (4) times in each calendar year at regular intervals of
three (3) months.

     5.14 Quorum. If the Board consists of three (3) members, the presence of two (2) Directors
including one (1) TSMC Director and one (1) OmniVision Director, and if the Board consists of five
(5) members, the presence of three (3) Directors including at least one (1) TSMC Director and one
(1) OmniVision Director, shall constitute a quorum.

 
	 	 	 
	 
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     5.15 Deadlock.

          (a) In the event of a deadlock of either of the Boards on the corporate actions stated in
Section 5.12 and on any issue material to the ongoing operation of either of VisEra Cayman or
VisEra Taiwan, either Shareholder may request a meeting of the Shareholders with the applicable
Board for the purpose of resolving the deadlock. Such request shall be in writing and given to the
other Shareholder and the affected entity, and shall specify in reasonable detail the nature of the
issue giving rise to the deadlock. Within thirty (30) days from the date of the request, an
officer at the senior vice president level or its equivalent, or above, of each of the Shareholders
shall meet with the affected Board to discuss the issue or issues that have given rise to the
deadlock.

          (b) If the deadlock is not resolved within sixty (60) days of such meeting, then the rights
and obligations of the Parties shall be as follows:

          (i) In the event the deadlock has been caused intentionally by a Shareholder without
just cause, and the deadlock results in the frustration of the Purposes, then said
Shareholder shall be deemed to be in a Material Breach (as defined below) and the provisions
of Article 11 shall apply.

          (ii) In the event the deadlock results from a just cause through no fault of any
Shareholder, in order to protect the Shareholders’ rights, interests or entitlements
pursuant to and under this Amended Agreement and any of the other agreements between the
Parties described herein, then the Shareholders shall meet within sixty (60) days of failure
to resolve the deadlock to attempt to agree on mutually acceptable terms and conditions to
terminate this Amended Agreement and to sell the shares of one Shareholder in VisEra Cayman
to the other Shareholder; provided, however, that in the event the Shareholders fail to
reach agreement on such terms and conditions within said sixty (60) day period, then both
VisEra Cayman and VisEra Taiwan shall be wound up and liquidated in accordance with Article
13; and further provided that neither TSMC nor OmniVision will be under any additional
ongoing obligation to provide any technical assistance to VisEra Taiwan during the interim
except to the extent such assistance is required to wind down the operations of VisEra
Taiwan or as is reasonably required to satisfy any obligations of VisEra Taiwan to third
parties.

          (c) For purposes of this Section 5.16, “deadlock” shall mean an inability of the respective
Board to reach a decision, with the result that the operations of VisEra Taiwan effectively cease.

     5.16 Director Resignation or Removal.

          (a) If at any time a Director resigns or is removed, the Parties shall cause a special
shareholders’ meeting to be called, at which meeting the Shareholder that nominated such Director
shall nominate a replacement, and each Shareholder shall vote all appropriate shares held by it for
the election of such nominee.

          (b) In the event a Shareholder (the “Initiating Shareholder”) gives written notice to the
other Shareholder that the Initiating Shareholder desires to be removed from the Board a Director
nominated for such directorship by the Initiating Shareholder, then upon

 
	 	 	 
	 
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delivery of such notice the Shareholders agree that they shall cause a special meeting of
Shareholders to be called and held as soon as practicable in order to remove such Director and to
elect a successor in the manner provided in Section 5.3.

     5.17 Advisory Committees. TSMC, OmniVision and VisEra Taiwan shall establish a senior
management Advisory Committee and an advisory Coordinating Committee, each of which shall meet
periodically at least once per calendar year as TSMC and OmniVision may agree upon:

          (a) To advise TSMC and OmniVision, VisEra Cayman, VisEra Taiwan and/or the Boards on
extraordinary matters;

          (b) To provide such other advise to the Parties from time to time as may be appropriate; and

          (c) To provide dispute resolution assistance in accordance with Article 14 of this Amended
Agreement.

     5.18 Structure and Operation of Advisory Committees.

     It is the intention of the parties that the advisory Committees shall operate in accordance
with the following guidelines and procedures.

          (a) General Structure. The Advisory Committee shall, from time-to-time as requested, provide
each of VisEra Cayman and VisEra Taiwan advice with respect to extraordinary matters. The
Coordinating Committee and other sub-committees may be established by the Advisory Committee with
the unanimous concurrence of TSMC, OmniVision and the affected entity from time to time to address
specific issues as they may arise. The composition and duties of these advisory committees are set
forth below. Legal counsel of the Parties shall be permitted to attend all of the Advisory
Committee and the Coordinating Committee meetings.

          (b) Composition and Term of Advisory Committee

     The Advisory Committee shall consist of three members: (i) one TSMC representative; (ii) one
OmniVision representative; and (iii) an officer of the affected entity. Each of the members of the
Advisory Committee shall serve a one-year term, which can be renewed annually. Each member shall
have the right to designate an alternate to attend Committee meetings and to make decisions in
his/her absence.

     The Advisory Committee shall select one of its members as chairman. One of the members of the
Advisory Committee shall be designated a secretary. The secretary and the chairman shall be from
different parties to this Amended Agreement, and the chairmanship shall alternate from one party to
the other on an annual basis.

     Each chairman shall serve a one-year term. The chairman shall be responsible for coordinating
all sub-projects, if any, and for coordinating the review of any disputes that may be brought
before the Advisory Committee pursuant to Section 5.17 of this Amended Agreement.

 
	 	 	 
	 
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     Committees reporting to the Advisory Committee shall include initially the Coordinating
Committee.

     The Advisory Committee shall have no authority over the operations of VisEra Taiwan but shall
serve in a purely advisory capacity.

     The Advisory Committee shall meet when requested by the parties.

ARTICLE 6. RIGHT OF FIRST OFFER.

     6.1 Except as otherwise provided in this Amended Agreement or upon the mutual agreement of the
Shareholders, the Shareholders agree that they shall not sell, give, encumber, pledge or otherwise
transfer, assign or dispose of either voluntarily or by operation of law, all or any part of their
shares in VisEra Cayman and/or withdraw from VisEra Cayman within the first three (3) years from
the date of incorporation of VisEra Taiwan, unless VisEra Cayman has completed an Initial Public
Offering in any jurisdiction, at which time this provision shall terminate.

     6.2 The Shareholders agree that they will not sell, give, encumber, pledge or otherwise
transfer, assign or dispose of, either voluntarily or by operation of law, all or any part of the
stock which either of them now owns or may hereafter acquire in VisEra Cayman without first
offering such stock to the other Shareholder as provided herein.

     6.3 After three (3) years from the date of incorporation of VisEra Taiwan:

          (a) If either initial Shareholder desires to withdraw from VisEra Cayman, the withdrawing
Shareholder shall first provide the non-withdrawing Shareholder with written notice of its
intention to withdraw and shall offer (the “Offer”) its shares to the non-withdrawing Shareholder,
whereupon the non-withdrawing Shareholder shall have the irrevocable first right, exercisable
within thirty (30) days of the withdrawing Shareholder to so withdraw, to purchase the entire
equity interest of the withdrawing Shareholder in VisEra Cayman at a price per share equal to the
proportionate Book Value Per Share (in the aggregate, the “Offer Price”). For purposes of this
Amended Agreement the “Book Value Per Share” shall mean the book value set forth in VisEra Cayman’s
most recent quarterly financial statements, defined in accordance with the ROC Generally Accepted
Accounting Principles, divided by the number of shares of common stock of VisEra Cayman on the date
of such financial statements.

          (b) Upon receipt of the Notice, the Shareholders shall promptly confer on a date (the “Offer
Closing Date”) for closing such transaction (the “Offer Closing”), which in any event shall not be
more than thirty (30) days from receipt of Notice.

          (c) At the Offer Closing on the Offer Closing Date, the withdrawing Shareholder shall deliver
to the non-withdrawing Shareholder certificates representing all of its shares, duly endorsed and
in proper form for transfer, accompanied by all notices, permits, authorizations and other
documents required for such transfer under the ROC law or other relevant laws.

          (d) At the Offer Closing on the Offer Closing Date, in consideration of the withdrawing
Shareholder’s delivery to the non-withdrawing Shareholder of the shares, the

 
	 	 	 
	 
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non-withdrawing Shareholder shall pay to the withdrawing Shareholder cash in the amount of the
Offer Price.

          (e) In the event a Shareholder tenders an offer in accordance with this Section 6.3 and the
other Shareholder does not exercise their rights hereunder, then the offering Shareholder shall
have the right to solicit an offer in accordance with Sections 6.4 and 6.5; provided, however, that
(x) in the event the offering Shareholder makes a good faith attempt to locate a buyer but cannot
so find a buyer within ninety (90) days of the non-withdrawing Shareholder’s rejection of the
initial offer, or (y) in the event the offering Shareholder finds only a [***] which is interested
in making an offer; for purposes of this Section 6.3, a [***] shall be reasonably determined by
TSMC; then:

          (i) in the case of “(x)”, the non-withdrawing Shareholder shall be obligated to buy
said shares in accordance with Section 6.3; or

          (ii) in the case of “(y)”, the non-withdrawing Party will either agree to waive the
restriction of Section 6.5 or else shall be obligated to buy the offering Party’s shares in
accordance with Section 6.3.

     6.4 Unsolicited Offer. In the event either Shareholder shall receive an unsolicited offer for
any or all of its shares in either of VisEra Cayman (hereinafter in this Section 6 said Shareholder
will be referred to as the “Seller”) and shall obtain a bona fide written offer (which offer must
be accompanied by a good faith deposit in the form of a certified check equal to at least ten
percent (10%) of the purchase price) for such interest, which offer shall set forth the name and
address of the prospective and beneficial (if any) purchaser, the number of shares to be purchased,
the prospective purchase price, and the other terms and conditions of such offer, the Seller may
thereupon sell such shares only upon the following terms and conditions:

          (a) Upon receipt of such written offer which Seller desires to accept, Seller shall send to
VisEra Cayman and to the other Stockholder a photocopy of such offer (the “Offer”), together with a
photocopy of the accompanying certified check, whereupon the other Shareholder shall have the
option to purchase (which option shall be exercised by written notice given to the Seller and
VisEra Cayman within sixty (60) days after such notification), all (but not less than all) of the
shares offered to be sold by the Seller for the same aggregate price and on the same terms and
conditions (except that the closing shall be held at a mutually agreeable place and time within
thirty (30) days after the expiration of the option period as defined above) as contained in the
Offer.

          (b) If, at the end of such time periods as specified herein, the rights under this Article 6
to purchase all of the shares offered to be sold have not been exercised, then the consent of the
other Shareholder is deemed to have been given and then, for those shares Seller shall be permitted
to accept the Offer within sixty (60) days thereafter for the price and according to the terms and
conditions set forth in the Offer; provided however, that the party to whom such shares are to be
sold shall first agree to be bound by the provisions of this Article 6.

          (c) In the event shares are to be sold to a third party pursuant to this Section 6.4, and as a
condition precedent to any such transaction, the Shareholders agree that the

 
	 	 	 
	 
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Seller shall first obtain from the third party its written consent to be bound by the terms
and conditions of this Amended Agreement upon the transfer of said shares.

     6.5 Limitation on Sale.

          (a) In consideration for entering into this Amended Agreement, the Shareholders agree that
they shall not at any time, transfer any part or all of their shares in VisEra Cayman to any [***]
without the prior written approval of all of the TSMC Directors then holding office. For purposes
of this Section 6.4, a [***] shall be reasonably determined by TSMC.

          (b) In consideration for entering into this Amended Agreement, the Parties agree that they
shall not at any time, transfer any part or all of their shares in VisEra Cayman to any entity or
company which is a competitor of OmniVision or its affiliates without prior approval of all of the
OmniVision Directors then holding office. For purposes of this Section, a “competitor of
OmniVision or its affiliates” shall be reasonably determined by OmniVision.

ARTICLE 7. OPTION TO PURCHASE.

     7.1 Option Grant. Subject to the occurrence and within sixty (60) days of a Triggering Event
(as defined in Section 7.4), either TSMC or OmniVision, as the case may be (the “Granted
Shareholder”), shall have an exclusive, irrevocable right and option (the “Option”) to require the
other Shareholder (the “Granting Shareholder”) to sell to the Granted Shareholder such number of
the Granting Shareholder’s shares in VisEra Cayman as shall enable the Granted Shareholder to
obtain an equity interest in VisEra Cayman of fifty-one percent (51%) of the total issued and
outstanding shares of VisEra Cayman in accordance with the terms and conditions of this Amended
Agreement; provided, however, that this Article 7 shall terminate after VisEra Cayman has completed
an Initial Public Offering in any jurisdiction.

     7.2 Exercise of the Option. Should the Granted Shareholder desire to exercise either of the
Options set forth in Section 7.1 the Granted Shareholder shall give the Granting Shareholder thirty
(30) days written notice (the “Notice”) of its intent to exercise its option, stating the number of
shares to be acquired, and shall also state its reasons for the exercise. Delivery of the Notice
shall constitute an irrevocable exercise of the Option. Upon receipt of the Notice the Granting
Shareholder shall promptly confer on a date (the “Option Closing Date”) for closing such
transaction (the “Option Closing”). In the event the Shareholders are unable to agree on the
Option Closing Date, such Option Closing Date shall be sixty (60) days from the date of Notice (or
the next subsequent business day, if such sixtieth day is not a business day).

     7.3 Option Price. In the event of the exercise of the Option by either Shareholder under this
Article 7, the Shareholders agree that the purchase price per share (the “Purchase Price”) shall be
the higher of (a) the Book Value Per Share (as defined in Section 6.3(a)) or (b) the original
purchase price multiplying by the Option Premium, where the “Option Premium” equals (1 + 0.02) to
the nth power, and n equals the number of years (expressed as a decimal rounded to the nearest .xx
after the decimal point of a year based on a 365-day year) from the date on which the shares of
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Shareholder were fully paid; provided, however, that if such shares were fully paid on more
than one dates, then the Option Premium shall be the weighted average of (1 + 0.02), whichever
applies, to the nth power for all such dates. For purposes of determining the weighted average,
the results of each (1 + 0.02) to the nth power calculation shall be weighted by the number of
shares paid for by the grating Shareholder on that date as a percentage of the total number of
shares owned by the grating Shareholder as of the date of Notice.

     7.4 Triggering Events. For the purpose of this Article 7, a “Triggering Event” shall be the
event, action or failure to act, as set forth in Sections 8.6(j) and 11.1(b).

     7.5 Delivery. At the Option Closing on the Option Closing Date, the Granting Shareholder shall
deliver to the Granted Shareholder certificates representing the shares to be sold pursuant to this
Article 7, duly endorsed, and accompanied by all notices, permits, authorizations and other
documents required for such transfer under the ROC law.

     7.6 Payment. At the Option Closing on the Option Closing Date, in consideration of Granting
Shareholder’s delivery to Granted Shareholder of such shares, Granted Shareholder shall pay to
Granting Shareholder cash in the amount of the Purchase Price.

     7.7 Nonperformance. Except as otherwise provided in this Amended Agreement, in the event that
the Granted Shareholder provides Notice, as required herein, to exercise its option under this
Article 7, and the Granting Shareholder fails to sell to the Granted Shareholder any or all of its
shares of VisEra Cayman, then, in the event a court of competent jurisdiction upholds the validity
of Granted Shareholder’s exercise (should the Granting Shareholder challenge said exercise) and, in
the event the Granted Shareholder cannot obtain specific performance, the Granting Shareholder
shall pay the Granted Shareholder liquidated damages in the amount of the greater of: (a) five (5)
times the proportionate Book Value of shares issued but not sold by the Granting Shareholder to the
Granted Shareholder at the time Notice is provided; or (b) 10 x (total issue price of shares not
sold) x (the Option Premium, as defined in Section 7.3); provided, however, in addition to
liquidated damages, if any, VisEra Cayman shall be forthwith wound up if the Granted Shareholder is
prevented by the Granting Shareholder from obtaining the fifty-one percent (51%) equity interest
pursuant to this Article 7. Nothing in this Article 7 shall preclude the Granted Shareholder from
seeking and receiving any other legal or equitable remedies.

     7.8 Rights Additional to the Right of First Offer. The rights and privileges granted to the
Granted Shareholder under this Article 7 are in addition to and independent of the Right of First
Offer under Article 6 and do not place any limitation or restriction on the Granted Shareholder’s
ability to exercise such right. In the event the Granting Shareholder exercises its rights under
this Article 7, the Granted Shareholder shall first have the right to exercise its Options under
Section 7.1. Any additional shares in excess of the amount purchased by the Granted Shareholder
under the Option shall then be subject to the procedures set forth in Article 6.

     7.9 Assumption. As part of the consideration paid for the Granting Shareholder’s interest
under this Article 7, the Granted Shareholder shall deliver to the Granting Shareholder a written
assumption of the Granting Shareholder’s percentage of the shares of the debts and liabilities of
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being sold to the Granted Shareholder; provided, however, the Granting Shareholder shall
remain fully liable for all debts and liabilities caused or incurred by its negligence, intentional
or wrongful acts or omissions, or incurred by the Granting Shareholder in violation of this Amended
Agreement, and shall indemnify each of VisEra Cayman and VisEra Taiwan and the Granted Shareholder
against all such debts and liabilities immediately on demand.

     7.10 Escrow. In the event that either TSMC or OmniVision challenges the validity of the
exercise of the Option, the non-exercising Shareholder shall place the shares in dispute in escrow
with the law firm of Lee and Li, Taipei, Taiwan, during such challenge.

ARTICLE 8. COVENANTS.

     8.1 OmniVision’s Commitments.

          (a) Commitment to TSMC. OmniVision has entered into a [***] with TSMC [***], substantially in
the form set forth on Exhibit B attached hereto, under which OmniVision and its affiliates shall
[***] to TSMC (i) a minimum of [***] of all of their [***] requirement [***] during Phase I; and
(ii) a minimum of [***] of all of their [***] requirement [***] during Phase II and Phase III (up
to the term specified in the [***]); provided however, that TSMC shall fulfill its commitments,
guarantees and obligations under Section 8.2(a)(i) — (iii). Notwithstanding the [***] provided in
Section 8.2, OmniVision shall have the right [***]. TSMC and OmniVision shall immediately meet and
confer regarding such [***] request, and shall use their best efforts to agree upon [***],
consistent with the principle that both Parties have business related margin requirements. Should
such meetings fail to produce agreement within a reasonable time, OmniVision has the right to seek
the [***] (as that term is defined in the [***]) by a third party; provided, however, that prior to
placing any [***] from such third parties, OmniVision shall, subject to restrictions under any
confidential agreement or arrangement with such third parties, give TSMC a “last look” by informing
TSMC of such [***] and giving TSMC an opportunity to match. Notwithstanding the technology
guarantees provided in Section 8.2, OmniVision shall have the right [***]. TSMC and OmniVision
shall immediately meet and confer regarding such [***] request, and shall use their best efforts to
agree upon the [***]. Should such meetings fail to produce agreement within a reasonable time,
OmniVision has the right to seek the [***] (as that term is defined in the [***]) by a third party;
provided, however, that prior to placing any [***] from such third parties, OmniVision shall,
subject to restrictions under any confidential agreement or arrangement with such third parties,
give TSMC a “last look” by sharing with TSMC OmniVision’s knowledge about such third party’s [***]
and giving TSMC an opportunity to match.

          (b) Commitment to VisEra.

          (i) OmniVision shall enter into a [***] with VisEra Taiwan, with terms and conditions
to be negotiated between OmniVision and VisEra Taiwan, under which OmniVision shall [***] a
minimum of [***] of its [***] activities to VisEra Taiwan; provided, however, that VisEra
Taiwan shall fulfill its commitments, guarantees and obligations under this Amended
Agreement and [***]. Notwithstanding the foregoing, OmniVision shall have the right to
request [***] from VisEra Taiwan. VisEra Taiwan and OmniVision shall immediately meet and
confer regarding such [***] request, and shall use their best efforts to agree upon [***].

 
	 	 	 
	 
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Should such meetings fail to produce agreement within a reasonable time, OmniVision has
the right to engage a third party for the [***] activities under the [***].

          (ii) Under the Phase III Transaction, OmniVision shall cause the transfer of either (x)
the capital stock of [***] to VisEra Cayman, or (y) the assets consisting principally of the
facilities of [***] and the right to use the land for such facilities as set forth on
Schedule 8.1(b)(ii) attached here to (collectively, the “[***]”) and an aggregate of [***]
to either of VisEra Taiwan, or VisEra Cayman as appropriate, provided that the consideration
set forth in Section 8.4(b) and (d) is paid in full. The Parties acknowledge and agree that
no other assets of [***] are included in the foregoing consideration.

          (c) Prior to the Phase III Closing, OmniVision shall make proper arrangements with [***]
authorities to satisfy the registered capital commitment of [***].

          (d) Except as set forth in Sections 3.1, 3.2(c) and (g) and 3.6(c), neither TSMC nor
OmniVision are required to make any further investment in either of VisEra Cayman or VisEra Taiwan
or [***]. However, in the event OmniVision or TSMC shall be required to make further capital
contributions in [***], including without limitation contributions made pursuant to any
arrangements between OmniVision and [***] authorities to satisfy the registered capital commitment
of [***], TSMC and OmniVision shall negotiate in good faith to account for such contributions by
either Shareholder, including without limitation the making of comparable contributions in cash or
in kind by the other Shareholder, in order to maintain the Ownership Ratio.

     8.2 TSMC’s Commitments.

          (a) Commitment to OmniVision and Its Affiliates.

          (i) TSMC guarantees to fulfill the [***] requirements of OmniVision and its affiliates
described in Section 8.1, and as set forth in more detail in the [***].

          (ii) TSMC hereby guarantees [***]

     (1) [***]

     (2) [***]

     (3) [***]

     (4) [***]

          (iii) Upon a commercially reasonable request of OmniVision, TSMC agrees to provide
OmniVision with TSMC’s commercially competitive [***].

          (b) Commitment to VisEra.

 
	 	 	 
	 
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          (i) TSMC shall enter into an [***] with VisEra Taiwan, with terms and conditions to be
negotiated between TSMC and VisEra Taiwan, as soon as practicable after the incorporation of
VisEra Taiwan, under which agreement TSMC will provide VisEra Taiwan with [***] to assist
VisEra Taiwan to establish its [***].

          (ii) At set forth in Section 3.6 and upon the commencement of Phase III, respectively,
and subject to the consideration paid in accordance with Section 8.4(a), TSMC shall sell and
transfer to VisEra Cayman TSMC’s [***]

     8.3 TSMC’s Operation of [***] Business.

          (a) Subject to the terms and conditions set forth in Section 8.3 (b) and (c), during the Term,
TSMC acknowledges and agrees that it will not operate directly or indirectly any [***] business in
competition with VisEra Taiwan. TSMC represents that it has notified its current customers, since
October 29, 2003, and shall use its best commercial efforts to transfer its current customers, and
refer future customers, [***], to VisEra Taiwan as soon as practicable after the commencement of
Phase II.

          (b) In the event that a TSMC customer rejects such transfer effort by TSMC, and the rejection
would result in the loss of [***] business of such customer to TSMC, TSMC shall have the option to
provide that customer the [***] services upon notification to and discussion with VisEra Taiwan.

          (c) In the event that TSMC provides [***] service to those customers who do not accept the
transfer of service to VisEra Taiwan and that there is any profit accrued from TSMC’s [***]
services to such customers, TSMC shall transfer such profit to either of VisEra Cayman or VisEra
Taiwan, in a form best suited, at VisEra Cayman’s discretion, for the Purpose. In the event the
transfer of such profit to is prohibited for any reasons including but not limited to the ROC law,
such reasons not attributable to TSMC, TSMC agrees to compensate or credit VisEra Taiwan by other
commercially applicable alternatives reasonably acceptable to each of VisEra Cayman and VisEra
Taiwan.

     8.4 VISERA’s Commitments.

          (a) VisEra Cayman shall pay TSMC U.S. Dollars eight million (US$8,000,000) during Phase II and
VisEra Cayman shall pay U.S. Dollars eight million one hundred thousand (US$8,100,000) during Phase
III to purchase TSMC’s [***] equipment.

          (b) VisEra Cayman shall acquire an aggregate of [***] for a value of U.S. Dollars six million
(US$7,500,000) from OmniVision and/or its affiliates under the Phase III Transaction.

          (c) VisEra Cayman shall acquire the [***] and compensate OmniVision for certain [***] start-up
costs, for an aggregate value of U.S. Dollar eleven million five hundred thousand (US$11,500,000)
under the Phase III Transaction.

          (d) In the event additional assets (for example, additional [***]) are sold or otherwise
transferred to either of VisEra Taiwan or VisEra Cayman, the value of such assets sold or otherwise
transferred shall be the fair market value determined by the Board, but in no event shall such
value be less than the original cost of such assets to the transferor.

	 	 	 
	 
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          (e) During Phase I, VisEra Taiwan will provide to its customers [***] services through
subcontracting the work with TSMC, [***] services through subcontracting with other vendors
approved by TSMC and OmniVision, and testing services through subcontracting with [***].

     8.5 Technology and Patent Licenses. TSMC and OmniVision have each granted to VisEra Taiwan a
[***] under certain [***] technology and related patents and technical information, under certain
agreements. OmniVision shall also cause [***] to provide VisEra Taiwan with [***] under the
foregoing agreement between OmniVision and VisEra Taiwan. The consideration for the [***] granted
by TSMC to VisEra Taiwan was agreed to be [***] during Phase I and shall be [***] during Phase II,
and the consideration for the [***] granted by OmniVision to VisEra Taiwan was agreed to be [***]
during Phase I and shall be [***] during Phase II.

     8.6 Hua Wei Shanghai. OmniVision represents, warrants, and covenants as follows with respect
to Hua Wei Shanghai that, except as otherwise expressed below, as of the Effective Date and prior
to the Phase III Closing:

          (a) The legal name of Hua Wei Shanghai is:  (in Chinese) and Hua
Wei Semiconductor (Shanghai) Co., Ltd. (in English).

          (b) Hua Wei Shanghai is duly organized, incorporated and registered in accordance with all
applicable laws and regulations of [***], with an address at 111 Ronghua Road, Songjiang Export
Processing Zone, Shanghai, China.

          (c) The sole shareholder of Hua Wei Shanghai is, and shall remain, a wholly owned subsidiary
of Hua Wei Cayman.

          (d) All information and documents provided to TSMC as requested by TSMC during its due
diligence investigations and requests were complete, accurate, and true and did not omit any
material fact and fairly present in all material respects the corporate structure, business, debt
and obligation of Hua Wei Shanghai.

          (e) Hua Wei Shanghai shall be continuously organized, registered, maintained, operated and
managed in strict compliance with all applicable local, provincial, and state laws, rules,
regulations, ordinance and statutes of the [***].

          (f) Hua Wei Shanghai shall not engage in any activities, enter into any contracts, incur any
indebtedness, or conduct any business that will substantially adversely affect Hua Wei Shanghai’s
financial conditions. Furthermore, prior to the Phase III Closing Date, Hua Wei Shanghai shall not
enter into any new contractual commitment not existing as
of the Effective Date in excess of U.S. Dollars one million (U.S.$1,000,000) without prior
written consent from TSMC and OmniVision, such consent not to be unreasonably withheld or delayed.

          (g) OmniVision shall cause Hua Wei Shanghai to keep complete and accurate books and records of
its operations, including all contracts, obligations and liens.

          (h) Upon a joint written request from TSMC and VisEra Cayman, OmniVision shall cause Hua Wei
Shanghai to permit TSMC’s auditor to examine, during

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normal business hours, relevant records and
documents of Hua Wei Shanghai to assure Hua Wei Shanghai’s compliance with provisions stated in
this Section 8.6. Such audit shall be limited to an audit of relevant records and documents only.
OmniVision shall cause Hua Wei Shanghai to provide full cooperation in such audit, including, but
not limited to, providing sufficient time for such examination and convenient access to relevant
records and documents. Except as otherwise agreed by OmniVision and Hua Wei Shanghai, the
foregoing audit shall be allowed only on a once-per-year basis.

          (i) OmniVision shall cause Hua Wei Shanghai to transfer the [***] and to provide VisEra Taiwan
with technical assistance as set forth in Sec. 8.5.

          (j) Governmental Approvals.

          (i) Each of OmniVision, TSMC, VisEra Taiwan, VisEra Cayman and Hua Wei Shanghai shall
use its commercially reasonable efforts to obtain, with good faith and reasonable
cooperation from the other Parties, all governmental approvals requisite for the
transactions contemplated by this Amended Agreement and the operation of VisEra Cayman
during Phase III.

          (ii) In the event that ROC law requires that either OmniVision or TSMC to own an equity
interest of fifty-one percent (51%) in either of VisEra Cayman or VisEra Taiwan for the
purpose of obtaining the Approval, such an event shall be deemed a Triggering Event for the
purpose of Article 7; provided, however, that the Shareholder required to own such majority
interest in either of VisEra Cayman or VisEra Taiwan shall give the other Shareholder
sufficient prior written notice of such requirement in order for the Shareholders to seek
any applicable remedy including a waiver for such requirement, or to find some other
mutually acceptable solution.

     8.7 Maintenance of Shareholding.

          (a) Except as otherwise provided in Section 6.1, OmniVision’s shareholding in VisEra Cayman
will decrease to 25% during a three-year period after the completion of an Initial Public Offering
in any jurisdiction.

          (b) OmniVision undertakes to maintain a shareholding in VisEra Cayman of a minimum of 25% for
a period of at least five (5) years commencing from the date of incorporation of VisEra Taiwan.

          (c) TSMC shall maintain shareholding in VisEra Cayman of a minimum of 25% for a period of at
least five (5) years commencing from the date of incorporation of VisEra Taiwan.

     8.8 Audit.

          (a) Throughout the Term, TSMC, OmniVision, VisEra Taiwan and VisEra Cayman shall each maintain
and keep relevant records and all relevant documents in accordance with the generally accepted
accounting principles and in sufficient detail to permit the determination of the satisfaction of
the following obligations of the Parties:

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          (i) OmniVision and Hua Wei Shanghai shall have performed their obligations under
Sections 8.1, 8.5 and 8.6;

          (ii) TSMC shall perform its obligations under Sections 8.2, 8.3 and 8.5; and

          (iii) VisEra Taiwan and VisEra Cayman their obligations under Sections 8.4 and 8.5.

          (b) Upon a Party’s written request for an audit, the audited Party shall permit auditors
designated by the requesting Party to examine, during ordinary business hours, relevant records and
documents for the purposes of the audit. Such audit shall be limited to an audit of relevant
records and documents only. The audited Party shall provide full cooperation in such audit,
including, but not limited to, providing sufficient time for such examination and convenient access
to relevant records and documents.

          (c) Except as otherwise agreed to by the requesting Party and the audited Party, the foregoing
audit shall be allowed only on a once-per-year basis.

     8.9 Shareholders Freedom to Conduct Business Without Restriction. Except as expressly
provided in this Amended Agreement or other agreements between or among the Parties, nothing
contained herein or therein shall be deemed or construed to limit or restrict in any way the
freedom of any Shareholder or any affiliates thereof to conduct or engage in any business activity
whatsoever for its own account without regard to the business of either of VisEra Cayman or VisEra
Taiwan.

ARTICLE 9.     CONFIDENTIALITY.

     9.1 Confidential Information. The terms and conditions of the existing Non-Disclosure
Agreement by and between the Shareholders are incorporated herein by this reference as if set forth
at length; further, VisEra Taiwan and VisEra Cayman hereby agree to be bound by said
Non-Disclosure Agreement as if made a party thereto.

     9.2 Treatment of Extremely Confidential Information. The Shareholders will each contribute
extremely confidential information to the other and to VisEra Taiwan and VisEra Cayman during the
performance of their obligations under this Amended Agreement. With respect to TSMC, such
information comprises TSMC’s process information; with respect to OmniVision, such information
comprises its [***] technology and architecture, [***], and automated final testing processes (all
of which are hereinafter referred to as
“Extremely Confidential Information”). The Parties hereby agree to keep confidential, and not
disclose to any third party without the prior written consent of the originating Party, any
Extremely Confidential Information they receive through the course of the business to be conducted
pursuant to this Amended Agreement. Each Party agrees to do the following with respect to any such
Extremely Confidential Information: (i) exercise the same degree of care to safeguard the
confidentiality of, and prevent the unauthorized use of, such information as that party exercises
to safeguard the confidentiality of its own similar type of Extremely Confidential Information;
(ii) restrict disclosure of such information to those of its employees and agents who have a “need
to know” and, with prior written approval of the disclosing party, those of its third party
contractors who have a “need to know,” and (iii) instruct, require and obtain the written agreement
of such employees, agents and subcontractors to

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maintain the confidentiality of such information
and not to use such Confidential Information except as expressly permitted. Each Party further
agrees not to remove or destroy any proprietary or confidential legends or markings placed upon any
documentation or other materials.

     9.3 Disclosure. Notwithstanding Sections 9.1 and 9.2, each Party may disclose this Amended
Agreement and the Exhibits: (a) to its legal and financial advisers on a need-to-know basis; (b) to
third-party financing sources on a need-to-know basis and subject to a non-disclosure agreement;
(c) to the extent necessary to comply with applicable laws or regulations, including, but not
limited to any rule , regulation or policy statement of any national securities exchange, market
or automated quotation system on which either of the Party’s securities are listed or quoted; and
(d) to governmental authorities as required by law, provided that the party required to make such
disclosure shall, if possible, provide to the Parties prior notice and an opportunity to reasonably
contest such disclosure or seek a protective order or other appropriate remedy prior to such
disclosure.

ARTICLE 10.     COVENANT NOT TO COMPETE.

     10.1 OmniVision.

          (a) Except as otherwise provided in this Amended Agreement, OmniVision shall ensure that
OmniVision and its affiliates, during the Term and within twelve (12) months after the cancellation
or termination of this Amended Agreement, shall not engage in any business, either on its (their)
own behalf or for the behalf of a third party, nor shall it (they) enter into any agreement or
direct or indirect arrangement, that will directly compete with the operating business of VisEra
Taiwan.

          (b) Notwithstanding the foregoing, the Parties agree that Section 10.1(a) shall not apply to
either: (i) any activities of OmniVision strictly for its own account; or (ii) any arm’s length
transaction with an unrelated third party (A) into which OmniVision is consolidated or merged, or
(B) which acquires all or substantially all of the assets of OmniVision, subsequent to the
Effective Date; provided however, that in the event of the occurrence of either subsections
(b)(ii)(A) or (B), the Parties agree that if after consultation among the Parties, TSMC and or
VisEra Cayman determine that the resulting company or activity will be detrimental to the ongoing
activities of VisEra Taiwan then OmniVision and/or any affiliate shall sell its entire equity
holding(s) in VisEra Cayman to TSMC pursuant to Article 6 of this Amended Agreement, and further
provided, in the event that OmniVision sells its equity interest(s) to TSMC hereunder, then
OmniVision shall have the right to
terminate this Amended Agreement or any or all of the other agreements then in force and
effect with the other Parties.

     10.2 Except as otherwise provided in this Amended Agreement, TSMC shall ensure that TSMC and
its affiliates, during the Term and within twelve (12) months after the cancellation or termination
of this Amended Agreement, shall not engage in any business, either on its (their) own behalf or
for the behalf of a third party, nor shall it (they) enter into any agreement or direct or indirect
arrangement, that will directly compete with the operating business of VisEra Taiwan.

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     10.3 Each Party agrees that it and its affiliates will not, during the Term, solicit for
employment as an employee, officer, agent, consultant, advisor, or in any other capacity
whatsoever, any individual employed by the other Party or Parties in a technical capacity, who is
at the time of such solicitation, or within six (6) months of such time was, involved directly or
indirectly in positions associated with the subject matter of this Amended Agreement. As used
herein, “solicit” means contact or communicate in any manner whatsoever, including, but not limited
to, contacts or communications by or through intermediaries, agents, contractors, representatives,
or other parties, provided, however, that nothing herein shall be construed to prohibit the Parties
from (a) placing advertisements for employment which are aimed at the public at large in any
newspaper, trade magazine, or other periodical in general circulation, or (b) responding to any
unsolicited inquiry by an employee concerning employment.

     10.4 Each of VisEra Cayman and VisEra Taiwan shall adopt appropriate measures to ensure that
its employees will not solicit the employees, officers, agents, consultants, advisors or customers
of VisEra Taiwan for a period of one (1) year after the termination of employment with the
respective VisEra entity.

ARTICLE 11. MATERIAL BREACH AND REMEDIES.

     11.1 Definition of “Breach” and “Material Breach".

          (a) For purposes of this Amended Agreement, a “breach” shall mean a failure to comply with any
terms or conditions of this Amended Agreement, whether by reason of negligence or willful,
intentional or reckless conduct of acts or omissions. Any breach by TSMC, OmniVision, VisEra
Cayman and/or VisEra Taiwan that, in itself or in combination with other actions or omissions of
another Party, substantially impairs the operations of VisEra Taiwan, or directly and proximately
causes the frustration of the Purposes, or makes it impossible for any Party to comply with the
terms and conditions of this Amended Agreement, shall be deemed a “Material Breach”. By way of
example, a breach of any of Sections 1.1, 3.2, 3.3, 3.6, 3.9, 3.10, 5.3, 5.5, 5.12, 5.15 and 5.16,
and Articles 6 — 10 and 12, shall be deemed a Material Breach.

          (b) A Material Breach shall also exist in the event that:

          (i) A Shareholder causes either of VisEra Cayman or VisEra Taiwan to materially breach
its obligations under an agreement with a Shareholder; or

          (ii) A Shareholder intentionally causes either of VisEra Cayman or VisEra Taiwan to
experience financial difficulties of either (x) an accumulated loss in the third (3rd)
fiscal year following the year of incorporation of VisEra Taiwan or (y) pre-tax losses for
any three (3) consecutive fiscal quarters after the first two years from the year of
incorporation of VisEra Taiwan.

     A Material Breach in Section 11.1(b)(i) or (ii) shall be deemed a Triggering Event under which
the non-breaching Shareholder shall have the right to exercise the Option set forth under Article
7.

     11.2 Ramifications of a Material Breach by TSMC or OmniVision. Except as otherwise provided
in this Article 11, as between TSMC and OmniVision, in the event that

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either TSMC or OmniVision commits a Material Breach that has not been remedied within ninety (90) days after written notice
thereof to the breaching Shareholder given by the non-breaching Shareholder, then:

          (a) The non-breaching Shareholder shall have the right, upon written notification to the
breaching Shareholder, to require the breaching Shareholder to sell and transfer all or any shares
held by it to the non-breaching Shareholder at a price per share equal to the original purchase
price, such sale to occur within ten (10) days of such notification.

          (b) The non-breaching Shareholder shall have the right to terminate this Amended Agreement
with respect to the breaching Shareholder and be entitled to pursue other remedies available to it
at law or in equity against the breaching Shareholder.

          (c) The rights and obligations of the non-breaching Shareholder and each of VisEra Cayman and
VisEra Taiwan with respect to each other under this Amended Agreement and any other agreements
between the two Shareholders shall continue and subsist to the extent possible, unless the two
Shareholders otherwise agree upon, including without limitation winding up either of VisEra Cayman
or VisEra Taiwan.

     11.3 Material Breach by either of VisEra Cayman or VisEra Taiwan. Except as otherwise provided
in this Article 11, in the event that either of VisEra Cayman or VisEra Taiwan in and by itself
commits a Material Breach that has not been remedied within ninety (90) days after written notice
thereof to either of VisEra Cayman or VisEra Taiwan, as applicable, given by either TSMC or
OmniVision (with a copy of the notice sent to the other non-breaching Party), then:

          (a) Either non-breaching Party shall have the right to terminate this Amended Agreement with
respect to each of VisEra Cayman and VisEra Taiwan and be entitled to pursue other remedies
available to it at law or in equity against either of VisEra Cayman or VisEra Taiwan.

          (b) The rights and obligations of TSMC and OmniVision with respect to each other under this
Amended Agreement and any other agreements between TSMC and OmniVision shall continue and subsist
to the extent possible, unless TSMC and OmniVision otherwise agree upon, including without
limitation winding up either of VisEra Cayman or VisEra Taiwan, taking over the management of
either of VisEra Cayman or VisEra Taiwan, or entering into a new agreement or arrangement with
respect to either of VisEra Cayman or VisEra Taiwan.

     11.4 Material Breach by either of VisEra Cayman or VisEra Taiwan Caused by a Shareholder.
Except as otherwise provided in this Article 11, in the event that either TSMC or OmniVision causes
either of VisEra Cayman or VisEra Taiwan to commit a Material Breach that has not been remedied
within ninety (90) days after written notice thereof to VisEra Taiwan and the Shareholder causing
the breach by the non-breaching Shareholder, then

          (a) The non-breaching Shareholder shall have the right, upon written notification to the
Shareholder causing the breach, to require the Shareholder causing the breach to sell and transfer
all or any shares held by it to the non-breaching Shareholder at a

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price per share equal to the original purchase price, such sale to occur within ten (10) days of such notification.

          (b) The non-breaching Shareholder shall have the right to terminate this Amended Agreement and
be entitled to pursue other remedies available to it at law or in equity against any or all of
VisEra Cayman, VisEra Taiwan and the Shareholder causing the breach.

ARTICLE 12. REPRESENTATIONS AND WARRANTIES.

     12.1 Corporate Standing. Each of TSMC and OmniVision represents and warrants to the other
Shareholder that:

          (a) it is a corporation duly incorporated, validly existing, and in good standing under the
law of the jurisdiction of it incorporation, and has full corporate power and authority to execute
this Amended Agreement and to perform all obligation hereunder; and

          (b) approval of this JV and respective investment by its board of directors, and the
execution, delivery and performance of this Amended Agreement by each will have been duly
authorized by all necessary corporate proceedings on the part of it and this Amended Agreement will
constitute the valid and legally binding obligations of it enforceable in
accordance with the terms; except to the extent limited by bankruptcy or similar laws
affecting creditors rights generally, or by general equitable principles.

     12.2 Investment Intention. Each Shareholder represents and warrants that it is acquiring the
securities for investment for its own account and not with a view to, or for resale in connection
with, any distribution thereof. Each Shareholder represents that, except for otherwise permitted
by this Amended Agreement, it has no agreement, contract, arrangement or undertaking with any
person or entity to sell, transfer, or grant any rights in any of the securities.

     12.3 TSMC and OmniVision agree that neither Shareholder shall cause the other Shareholder or
either of VisEra Cayman or VisEra Taiwan to be in violation of their respective home country laws.
Neither of VisEra Cayman or VisEra Taiwan, their officers, employees or agents will participate in
or provide any information in furtherance of any boycott in violation of U.S. law or offer to pay
or receive any bribe to/from any individual or corporation. When other individuals or organizations
are required to participate in programs of either of VisEra Cayman or VisEra Taiwan, they shall be
compensated fairly based on the task performed. In no circumstances are public servants or other
holders of public offices to be offered or paid any bribe or other benefits, directly or
indirectly. No contribution in any way related to either of VisEra Cayman or VisEra Taiwan will be
made to candidates for public offices or to political parties or other political organizations,
regardless of whether such contributions are permitted by local laws.

ARTICLE 13. TERM AND TERMINATION.

     13.1 Effective Date. The “Effective Date” of this Amended Agreement shall be the date of
execution of the Amended Agreement by a duly authorized representative of each of TSMC and
OmniVision.

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     13.2 Term and Expiration.

          (a) This Amended Agreement shall come into force on the Effective Date and remain in effect
until [***], unless it is terminated earlier by written agreement between TSMC and OmniVision or in
accordance with the terms and conditions of this Amended Agreement. At the end of the initial term,
this Amended Agreement shall automatically be extended for additional terms of [***] years each,
unless it is earlier terminated (i) by written agreement between TSMC and OmniVision; (ii) in
accordance with the terms and conditions of this Amended Agreement; or (iii) by either TSMC or
OmniVision with written notice to the other Parties twenty-four (24) months before the end of any
such additional term. The “Term” shall mean collectively the initial term and all the additional
terms.

          (b) Upon the termination of the Term, the future relationship of the Parities, as well as each
of VisEra Cayman and VisEra Taiwan’s existence, shall be determined by such other terms and
conditions to which the Parties shall agree, provided, however, in the event the Parties shall not
agree, the Parties shall take such steps as are necessary to cause either or both of VisEra Cayman
or VisEra Taiwan to be wound up as soon as practical thereafter, in accordance with the Articles.

     13.3 Termination. This Amended Agreement shall be terminated automatically and each of VisEra
Cayman and VisEra Taiwan shall be dissolved upon the occurrence of any of the following events of
or pertaining to either of VisEra Cayman or VisEra Taiwan:

          (a) liquidation, bankruptcy or insolvency; or

          (b) termination of business by a final decision at a shareholders meeting; or

          (c) the appointment of any trustee, receiver or liquidator for substantially all of the assets
of the business of either of VisEra Cayman or VisEra Taiwan; or

          (d) the attachment, sequestration, execution or seizure of substantially all of the assets of
either of VisEra Cayman or VisEra Taiwan, which attachment, sequestration, execution or seizure is
not vacated within thirty (30) days from the institution thereof; or

          (e) judicial, governmental or any sale other than a voluntary sale of substantially all of the
assets of either of VisEra Cayman or VisEra Taiwan by its respective Boards of Directors; or

          (f) in accordance with any other terms and conditions of this Amended Agreement.

     13.4 Termination for Material Breach. TSMC or OmniVision may in the event of a Material
Breach terminate this Amended Agreement in accordance with the provisions of Article 11.

     13.5 Termination and Dissolution. In the event this Amended Agreement is terminated by
written agreement of TSMC and OmniVision, VisEra Taiwan may acquire the licenses granted under
Section 8.5, and the future relationship between TSMC and OmniVision as well as either of VisEra
Cayman or VisEra Taiwan’s existence shall be determined by such other terms and conditions to which
TSMC and OmniVision shall agree;

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provided, however, that, in the event TSMC and OmniVision are
unable to reach agreement, TSMC and OmniVision shall take all steps as are necessary to cause
either or both of VisEra Cayman and VisEra Taiwan to be wound up as soon as practicable thereafter.

     13.6 Winding Up either of VisEra Cayman or VisEra Taiwan. In the event that:

          (a) all or material portions of the assets or properties of either of VisEra Cayman or VisEra
Taiwan or those assets of one of the Parties which are under the control of either of VisEra Cayman
or VisEra Taiwan including but not limited to the patents, trade secrets, trademarks, copyrights or
mask work rights of TSMC or OmniVision are expropriated, requisitioned for use, infringed or made
inoperative or unavailable for normal use by government action; or

          (b) the government of the ROC [***], or any other governmental entity, including any courts of
such government or governmental entity, for any reason shall directly prohibit or indirectly
effectively prevent VisEra Taiwan from conducting operations essentially as contemplated herein,
then either TSMC or OmniVision shall have the right with thirty (30) days prior written notice to
terminate this Amended Agreement and require either of VisEra Cayman or VisEra Taiwan to be wound
up. TSMC and OmniVision shall cause either of VisEra Cayman or VisEra Taiwan to take immediate
steps to reduce expenditures to a minimum and to bring its operations to a close as quickly and
efficiently as possible so that either of VisEra Cayman or VisEra Taiwan may as soon as practicable
be wound up.

     13.7 Liquidation of either of VisEra Cayman or VisEra Taiwan. In the event that either of
VisEra Cayman or VisEra Taiwan is liquidated, and in the absence of agreement by
the Parties to the contrary, the liquidator shall observe the following principles to the
extent permitted by the ROC [***] laws, whichever may be the case:

          (a) The business and affairs of either of VisEra Cayman or VisEra Taiwan shall terminate and
be wound up as promptly as orderly business practice permit.

          (b) The Technology Transfer Agreement of TSMC and OmniVision and all rights, privileges, and
licenses hereunder shall terminate immediately and shall be returned to the requesting Party, and
at no time will they be considered to be assets of either of VisEra Cayman or VisEra Taiwan, and
they may not be levied upon by any Party, or otherwise be used as collateral or security by either
of VisEra Cayman or VisEra Taiwan or any other party.

          (c) A full inventory and account of the asset, liabilities and transactions of either of
VisEra Cayman or VisEra Taiwan shall promptly be taken and a balance sheet prepared as of date of
liquidation.

          (d) Subject to the rights of secured parties, if any, the assets of each of VisEra Cayman and
VisEra Taiwan shall be disassemble and liquidated as promptly as is consistent with obtaining fair
market value of such assets; provided, however, that, subject to the ROC [***] laws, whichever my
be the case, a Party may purchase any assets upon agreement with the other Parties.

          (e) Subject to the applicable ROC [***] laws, proceeds of such liquidation shall be applied in
the following order:

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          (i) First, to the payment of debts and liabilities of either of VisEra Cayman or VisEra
Taiwan to third parties, and then to the payment and debts and liabilities of either of
VisEra Cayman or VisEra Taiwan to the Parties, if any, then

          (ii) The surplus, if any, to be paid to each Shareholder pro rata based upon shares of
either of VisEra Cayman or VisEra Taiwan then held by it.

          (f) Except as provided elsewhere in this Amended Agreement and subject to the applicable ROC
[***] laws, pre-production and prototype products, designs, patents, copyrights, and technical
information of either of VisEra Cayman or VisEra Taiwan shall be distributed in kind to TSMC and
OmniVision, respectively, and TSMC and OmniVision shall receive full right, title and interest, to
perform, practice, sell and license such products, designs, patents, copyrights, and technical
information in any manner for any purpose.

     13.8 Expiration or termination of this Amended Agreement for any reason shall not affect:

          (a) the obligations or liabilities of the Parties which have accrued as of the date of
termination;

          (b) those obligations set forth in Article 9 and any non-disclosure agreement between or among
the Parties; or

          (c) the Parties’ respective rights to each Party’s rights conferred under the applicable ROC
[***] laws as a Shareholder, all of which obligations and rights shall survive the termination of
this Amended Agreement.

ARTICLE 14. DISPUTE RESOLUTION

     14.1 Introduction. It is the intention of the Stockholders that any breach of this Amended
Agreement or any Exhibits shall initially be attempted to be resolved in an amicable manner to the
fullest extent possible, and that any such resolution be reasonable in light of the rights and
obligations of the Shareholders. If a dispute arising between or among the Parties cannot be
resolved by personnel directly involved, the following procedures shall apply in each of the
circumstances described below.

     14.2 Conciliation Process. At any time during the Term, upon the occurrence of one or more
disputes under this Amended Agreement and/or under any other agreements described herein, the Party
allegedly aggrieved and/or damaged (the “Asserting Party”) shall promptly deliver written
notification to the allegedly offending and/or non-complying Party (the “Defending Party”) and the
Coordinating Committee, setting out in reasonable detail and in clear and concise language and on a
good faith basis, the specifics of the matter in dispute. If the Defending Party has not cured the
matter prior to the later of (i). five (5) business days after delivery of such written
notification or (ii) the expiration of the time period, if any, specified for such cure in this
Amended Agreement or the applicable agreement (the “Applicable Cure Period”), then the Coordinating
Committee shall convene a meeting within ten (10) business days thereafter for the purpose of,
among other things:

          (a) Assessing the good faith basis for the assertions;

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          (b) Defining, assessing and prioritizing the alternatives reasonably available to cure or to
correct the circumstances and, to make its reoccurrence unlikely; and

          (c) Adopting by unanimous votes, one or more curative or corrective courses of action.

14.3 Composition, Term and Duty of Coordinating Committee

          (a) Composition. The Coordinating Committee shall be comprised of such number of members as
shall be agreed upon by the parties. Each party shall contribute one-third of the number of
members, as selected by the Advisory Committee. The members of the Coordinating Committee shall
select one of themselves as a Chairman who shall be a member from one of the other parties to which
the Chairman of the Advisory Committee does not belong.

          (b) Term. The Chairman of the Coordinating Committee shall alternate from among the parties
on an annual basis. Each member of the Coordinating Committee shall serve a two (2) year term,
which can be renewed. Each Committee member shall have the right to designate an alternate to
attend Committee meetings and to make decisions in his or her absence. All members (or designated
alternatives) of the Coordinating Committee shall be officers or employees of the parties.

          (c) Duties. The duties of the Coordinating Committee are to:

          (i) Establish work groups and submit proposals and recommendations as directed by the
Advisory Committee, and submit these proposals to the Advisory Committee for review;

          (ii) Report on the progress of the matters to the Advisory Committee;

          (iii) Maintain continuous communication between the Parties throughout the matter at
hand to ensure timely exchanges of information and identification/resolution of issues as
they may arise;

          (iv) With respect to the resolution of any disputes among the Parties, to discharge its
conciliation responsibilities;

          (v) Perform such other duties and responsibilities or as may be agreed by and among the
parties from time to time.

          (d) Either the Defending Party or the Asserting Party shall be entitled to:

          (i) Make reasonable requests for information from the other party (“Information
Request”) pertaining to the dispute (provided such requests are not unduly burdensome and
can be accomplished within two (2) business days), and

          (ii) Present its views to the Coordinating Committee with respect to the allegations,
through its appropriate officer “Presentation”. If within five (5) business days of its
first meeting the Coordinating Committee shall be unable to

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resolve the conflict by unanimous vote, then the matter shall immediately be referred to the Advisory Committee for
further attempts at resolution.

Within ten (10) days of such inability to resolve the conflict, the Advisory Committee shall
convene a meeting for the purpose of attempting a resolution. The procedures described above
concerning Information Requests and Presentation shall also apply to the Advisory Committee
proceedings.

If within five (5) business days of its first meeting the Advisory Committee shall be unable to
resolve the conflict by unanimous vote, then the matter shall immediately be referred to the chief
executive officer of TSMC and OmniVision (or his or her designated representative) for the purpose
of attempting a resolution during the period of ten (10) business days following the submission of
such matter to them for their consideration.

     14.4 Definition of “Conciliation Process". The process described in Section 14.2 is herein
referred to as the “Conciliation Process”. Resolution of all disputes shall be attempted initially
through the foregoing Conciliation Process.

     14.5 Exhibits. In the case of any breach of any other agreements described herein, in the
event such breach is not resolved through the Conciliation Process, the Asserting Party shall be
entitled to exercise all such rights and remedies as provided under the applicable agreement or
otherwise provided at law or in equity.

ARTICLE 15. SPECIAL REMEDIES FOR BREACH OCCURRING WITHIN

THREE YEARS OF INCORPORATION OF VISERA TAIWAN

     15.1 In addition to any remedies available under Article 11, in the event of a final judgment
of a court of competent jurisdiction of a Material Breach occurring within three years of
incorporation of VisEra Taiwan (but in no event after the completion of Phase III), the
non-breaching Shareholder may: (a) recover all damages, losses and liabilities both
suffered as a consequence of the breach and otherwise recoverable under the terms of this
Amended Agreement or as judicially determined; and (b) elect either to (i) purchase the facilities
of VisEra Taiwan at a price equal to the [***] or to (ii) convey to the breaching Shareholder (and
the breaching Shareholder shall be obligated to purchase) all shares of capital stock of VisEra
Cayman then owned by the non-breaching Shareholder at a price, payable in cash at closing, equal to
the [***]; and

     15.2 Reacquisition of the Facility of VisEra Taiwan. The Closing of the purchase and sale of
the Facility pursuant to Section 15.1 shall take place at the appropriate executive offices on the
tenth business day following the date the determined value is established hereunder, or such later
date as all requisite governmental approvals are secured in connection therewith. At the closing,
VisEra Taiwan shall convey to the Purchasing Party good title to the Facility, free of all liens
and encumbrances against receipt of the purchase price, which shall be delivered by wire transfer
of immediately available funds to the bank account designated by conveying Shareholder.

     15.3 Sale of VisEra Cayman Stock. The Closing of the purchase and sale of non-breaching
Party’s VisEra Cayman stock pursuant to Section 15.1 shall take place at the appropriate executive
offices on the tenth business day following the date the determined value is established hereunder,
or such later date as all requisite governmental approvals are

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secured in connection therewith. At the closing, non-breaching Party shall convey the VisEra Cayman stock owned by non-breaching Party
to the breaching Party, free of all liens and encumbrances against receipt of the purchase price,
which shall be delivered by wire transfer of immediately available funds to the bank account
designated by the conveying Shareholder.

Contemporaneously with the closing, all non-continuing Shareholder officials and appointees shall
resign from the Board of Directors of each of VisEra Cayman and VisEra Taiwan and all other offices
or other positions held with either of VisEra Cayman or VisEra Taiwan.

ARTICLE 16. MISCELLANEOUS.

     16.1 Force Majeure. No Party shall be liable for failure to perform (other than payment of
amounts due), in whole or in material part, its obligations under this Amended Agreement, if such
failure is caused primarily by any event or condition not existing as of the Effective Date and not
reasonably within the control of the affected party, including without limitation, by fire, flood,
typhoon, earthquake, explosion, strikes, labor troubles or other industrial disturbances,
unavoidable accidents, war (declared or undeclared), acts of terrorism, sabotage, embargoes,
blockage, acts of governmental authorities, riots, insurrections, or any other cause beyond the
control of the parties; provided that the affected party promptly notifies the other parties of the
occurrence of the event of Force Majeure and takes all reasonable steps necessary to resume
performance of its obligations so interfered with.

     16.2 Insurance. Either of VisEra Cayman or VisEra Taiwan, as applicable, shall obtain from a
reputable, international insurance company, and maintain throughout the Term, such kinds and
amount(s) of insurance as is reasonable and customary in the trade, including but not limited to
insurance covering product liability, theft fire, natural disasters, employee injury and primary
Directors and Officers liability insurance.

     16.3 Assignment. Neither Party shall assign this Amended Agreement or any right, obligation,
or interest under this Amended Agreement, nor delegate any work or obligation to
be performed under this Amended Agreement, without the other Party’s prior written consent.
Any attempted assignment or delegation in contravention of this Section shall be null and void, and
ineffective in law or in equity.

     16.4 Survival. Without limiting any provision in this Amended Agreement, the obligations of
the Parties pursuant to Articles 6, 9, 10, 14, and 16.11 shall survive the Term or termination or
expiration of this Amended Agreement.

     16.5 Notices. All communications, reports, approvals and notices required or permitted under
this Amended Agreement shall be made in writing and shall be deemed to have been duly given or
delivered if personally delivered or sent by (i) by facsimile, or (ii) mailed by certified or
registered mail, or overnight courier return receipt requested and postage prepaid, addressed to
the principal offices of the Parties as listed below. Delivery by facsimile is effective upon
receipt of a successful fax transmission as indicated on the electronic time/date stamp on the
original transmission and shall be followed by delivery by mail as set forth above. Notice by
personal delivery is effective upon receipt of the notice. Notice sent by mail shall for all
purposes of this Amended Agreement be treated as being effective or having been given three days
after mailed.

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     If to OmniVision International Holding Ltd., to:

     c/o General Counsel

OmniVision Technologies, Inc.

1341 Orleans Drive

Sunnyvale, CA 94089

     If to TSMC, to:
 

     If to VisEra Taiwan:
 

     If to VisEra Cayman:
 

     Any Party may change the address to which notice or payment is to be sent by written notice to
the others under any provision of this Section 16.5.

     16.6 Export Control. Without in any way limiting the provisions of this Amended Agreement,
each of the Parties agrees that no products procured from or technical information disclosed by any
Party under this Amended Agreement are intended to or shall be exported or re-exported, directly or
indirectly, to any destination restricted or prohibited by any applicable law without necessary
authorization by the relevant governmental authorities.

     16.7 Entire Agreement. This Amended Agreement and its Exhibits and Schedules embody the
entire agreement and understanding among the Parties with respect to the subject matter hereof,
superseding, all previous and contemporaneous communications, representations, agreements and
understandings, whether written or oral, in existence on the
date this Amended Agreement is executed. No Party has relied upon any representation or
warranty of the other Party except as expressly set forth herein. In the case of a conflict
between this Amended Agreement and the Initial Shareholders Agreement, the terms of this Amended
Agreement shall control.

     16.8 Modification. This Amended Agreement and the surviving provisions thereof may not be
modified or amended, in whole or part, except by a writing executed by duly authorized
representatives of the Parties.

     16.9 Severability. If any term or provision of this Amended Agreement shall, for any reason,
be held to be invalid, illegal or unenforceable, such provision shall be deemed severed from this
Amended Agreement; provided, however, that to the extent that such provision is deemed by the
Parties to be material to the performance of this Amended Agreement, the Parties shall use their
commercially reasonable efforts to arrive at a mutually acceptable solution. The remaining
provisions of this Amended Agreement shall remain in full force and effect, and shall be construed
and interpreted in a manner that corresponds as

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closely as possible with the intentions of the Parties as expressed in this Amended Agreement.

     16.10 Non-Waiver. Except to the extent that a Party may have otherwise agreed in writing, no
waiver by that Party of any condition of this Amended Agreement or breach by any other Party of any
of its obligations or representations hereunder shall be deemed to be a waiver of any other
condition or subsequent or prior breach of the same or any other obligation or representation by
such other Party, nor shall any forbearance by a Party to seek a remedy for any noncompliance or
breach by any other Party be deemed to be a waiver by the non-breaching Party of its rights and
remedies with respect to such noncompliance or breach.

     16.11 Applicable Laws.

          (a) This Amended Agreement shall be governed by and construed in accordance with the laws of
the State of California without regard to its conflict of laws provisions. The Parties hereby
agree that an action arising directly or indirectly from the business relationship created by this
Amended Agreement shall be brought in the United States District Court for the Northern District of
California. The Parties expect such court to have subject matter jurisdiction for matters arising
under 28 U.S.C. section 1332 (diversity jurisdiction) or 28 U.S.C. section 1338 (for matters
arising under the patent laws and other laws of the United States), and hereby each expressly
consent to the exclusive personal jurisdiction of such court for such action.

          (b) The Parties further agree that, in the event the United States District Court for the
Northern District of California would dismiss such action for lack of subject matter jurisdiction,
the Parties shall discuss and mutually agree on the jurisdiction of another appropriate United
States District Court or State Court.

          (c) For the purpose of any proceeding before the United States District Court for the Northern
District of California, the Parties hereby appoint the respective person set out below as their
agents for service of process in California:

     TSMC:

     OmniVision:

c/o General Counsel

OmniVision Technologies, Inc.

1341 Orleans Drive

Sunnyvale, CA 94089

     VisEra Taiwan:

     VisEra Cayman:

     16.12 No Agency. This Amended Agreement shall not constitute an appointment of either Party
as the legal representative or agent of the other Party, nor shall either Party have any right or
authority to assume, create or incur in any manner any obligation or other liability of any kind,
express or implied, against, in the name or on behalf of, the other Party.

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Nothing herein or in the transactions contemplated by this Amended Agreement shall be construed as, or deemed to be, the
formation of a partnership by or among the Parties.

     16.13 No Third Party Beneficiaries. No provisions of this Amended Agreement are intended to,
or shall be construed to, confer upon or give to any person other than the parties hereto and
thereto, any rights, remedies or other benefits under or by reason of such agreements.

     16.14 Headings. All headings contained in this Amended Agreement are for convenience of
reference only and shall not be deemed to be a part of this Amended Agreement or to affect the
meaning or interpretation of this Amended Agreement.

     16.15 Publicity and Disclosure. Subject to limitations placed upon a Party by the securities
laws of the United States of America (including regulations of the Securities and Exchange
Commission) or the securities laws of the ROC (including regulations of the Securities and Exchange
Commission), timing and content of any announcements, press releases, and public statements
concerning the transaction contemplated herein will be by mutual agreement of the Shareholders and
the Shareholders hereby agree, to the extent reasonable, to keep the terms of this Amended
Agreement and any ancillary agreements contemplated hereby confidential.

     16.16 Governing Language. This Amended Agreement and its Exhibits and Schedules are written
and executed in English. No translation of the Amended Agreement and its Exhibits and Schedules
into any other language shall have any force or effect in the interpretation of the construction of
this Amended Agreement in determination of the intent of the Parties hereto.

     16.17 Constructions and Reference. Words used in this Amended Agreement, regardless of the
number or gender specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender masculine, feminine or neutral, as the context shall
require. Unless otherwise specified, all references in this Amended Agreement to Sections or
Subsections are deemed references to be corresponding Sections or Subsections in this Amended
Agreement, and all references in this Amended Agreement to Exhibits are references to the
corresponding Exhibits attached to this Amended Agreement.

     16.18 Counterparts. This Amended Agreement may be executed in counterparts, each of which
shall be deemed an original, and all of which shall be deemed to constitute one and the same
instrument.

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IN WITNESS WHEREOF, the parties hereto have caused this Amended Agreement to be executed by
their duly authorized representatives on the date set forth above.

	 	 	 	 	 	 	 
	TAIWAN SEMICONDUCTOR	 	OMNIVISION INTERNATIONAL
	MANUFACTURING CO., LTD.	 	HOLDING LTD.
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	BY:

	 	 
	 	BY:
	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	NAME:	 	NAME:
	 
	 	 	 	 	 	 
	TITLE:	 	TITLE:
	 
	 	 	 	 	 	 
	DATE:	 	DATE:
	VISERA TECHNOLOGIES COMPANY, LTD.	 	VISERA HOLDING COMPANY
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	BY:

	 	 
	 	BY:
	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	NAME:	 	NAME:
	 
	 	 	 	 	 	 
	TITLE:	 	TITLE:
	 
	 	 	 	 	 	 
	DATE:	 	DATE:

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EXHIBITS

	 	 	 
	EXHIBIT A

	 	ARTICLES OF INCORPORATION OF VISERA HOLDING COMPANY
	 
	 	 
	EXHIBIT B

	 	ARTICLES OF INCORPORATION OF REPLACEMENT ENTITY
(check here if attached: o)
	 
	 	 
	SCHEDULE 8.1(b)(ii) [***]

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Exhibit 10.1

The Yankee Candle

Company, Inc.

P.O. Box 110

South Deerfield

MA 01373-0110

Human Resources

413-665-8306

fax 413-665-3184

Employment

413-665-8306

fax 413-665-0158

Jobline

800-839-6038 Option 4

jobs@yankeecandle.com

August 9, 2005

Mr. Richard R. Ruffolo

1066 Poppy Hills Drive

Blacklick, OH 43004

Dear Rick:

Congratulations! I am pleased to present to you an offer of employment as the Senior Vice
President, Marketing and Product Innovation within the Executive Team at The Yankee Candle Company,
Inc. In this position, you will report directly to Harlan Kent, President. As discussed,
your employment will commence on August 29, 2005 or an alternate date as agreed upon with Harlan
Kent.

In specific, your compensation package includes:

	 	 	 
	Base Pay:

	 	$6,250.00 per week, an annualized rate of $325,000.00.
	 
	 	 
	Target Bonus:

	 	40% of base salary actually paid during the applicable fiscal year, subject to
the pro-ration terms and provisions of the Company’s Management Incentive Plan. For
fiscal 2005 only we will guarantee a minimum incentive payment of $130,000.00. The
documents related to the Management Incentive Plan will be provided to you and
discussed in detail after your employment. Payments in consideration of the 2005
Management Incentive Plan will be made on or before March 31, 2006.
	 
	 	 
	Equity Participation:

	 	You will be awarded a stock option grant that will allow you to
acquire 30,000 shares of common stock. The exercise price for the shares will be the
closing price on the New York Stock Exchange on your employment start date. The stock
option grant vests 25% per year at each anniversary of the grant date. In addition,
you will be awarded 4,000 Performance Shares under Yankee
Candle’s 2005 – 2007
Performance Share Plan. The Performance Share plan rewards the attainment of specific
levels of Earnings per Share achievement over the three year cycle. Full details of
the Performance Share Plan will be provided to you and discussed in detail upon your
employment.
	 
	 	 
	Severance:
	 	 
	 

	 	Yankee Candle agrees that in the event that your employment is
terminated by Yankee Candle for any reason other than for “Cause,”
(as defined in the Company’s most recent Stock Option and Award
Plan) then you shall be paid a lump sum severance payment in an
amount equal to one year of your then current annual base salary,
and a pro-rata portion of your target incentive based upon the
effective termination date.
	 
	 	 
	Paid Time Off:

	 	You will be eligible for 15 Vacation Days and 7 Sick/Personal Days in
2006, and a pro-rata portion thereof in 2005. You will also be immediately eligible
for all holidays as observed by YCC.

 

 

	 	 	 
	Executive Compensation plan:
	 	 
	 

	 	As part of our Non-Qualified Deferred Compensation Plan, you are
offered a match on deferral contributions of 100% of your first
$10,000 of deferral and 50% of the next $20,000 of deferrals, not
to exceed a match of $20,000.
	 
	 	 
	Benefits:
	 	 
	 
	 	 
	 

	 	You will be eligible for all benefits available to salaried
personnel, as more fully described in the material you have
already received.
	 
	 	 
	Relocation & Interim Living:
	 	 
	 
	 	 
	 

	 	In addition to the above, Yankee Candle agrees to provide you with
a relocation package. Specifically, Yankee Candle agrees to
reimburse:
	 
	 	 
	 

	 	Home Closing Costs: A real estate commission up to 6% on
the sale of your home (to be grossed up for tax purposes and
included in gross income); points associated with obtaining a
mortgage on your new home to a maximum of two points; usual and
customary fees associated with a real estate attorney and home
inspection.
	 
	 	 
	 

	 	Interim Living Expenses: Expenses for interim living to be
reimbursed by Yankee Candle, for a period not to exceed one
hundred and eighty (180) days. Reimbursable items will include
lodging, meals (except for lunch when working at a YCC location)
and laundry. These expenses will be treated as normal business
expenses. Meal expense is not to exceed $35 per day. In addition,
if needed, Yankee Candle will arrange for a rental car to be used
during the interim living period up to and not to exceed the one
hundred and eighty (180) days.
	 
	 	 
	 

	 	Home Search Assistance: Home Search Assistance is
available to all new hires/promoted employees and includes
information related to locating real estate services for either
renting or purchasing a home as a part of the relocation.
	 
	 	 
	 

	 	House Hunting Trips and Return to Former Residence: Yankee
Candle will reimburse for travel expenses related to house hunting
trips and return to former residence during the interim living
period, up to a maximum of five (5) trips total, up to two (2) of
which may be for the new hire, spouse and minor children (such
trips not to exceed three (3) days each.) Please note that certain
items may be ineligible for coverage under our plan. All Travel
to be coordinated through PTC, Professional Travel Corporation.
	 
	 	 
	 

	 	Movement of Household Goods: Packing, moving, unpacking
and insuring of personal and household goods by public carrier to
the new area of residence or to a storage facility will be
reimbursed by Yankee Candle (from two locations only — point A to
point B). This service will be coordinated through Coldwell
Banker. If necessary, transportation of one vehicle will also be
included. Please note that certain items may be ineligible for
coverage under our plan.
	 
	 	 
	 

	 	Final Family Moving Expenses: Yankee Candle will reimburse
you for living expenses incurred during the actual move from the
former location to the new location. These costs include
transportation, lodging en route and meals. It is the expectation
that the final moving period will not exceed seven (7) days.
	 
	 	 
	 

	 	Relocation Expense Allowance: To compensate you for other
incidental expenses generated by your relocation (such as loss of
local memberships, establishing cable and telephone service,
drapes, floor coverings, etc.) we will provide a one time
Relocation Expense Allowance of twenty-five thousand dollars
($25,000.) This allowance
is to be used at your own discretion, and no accounting of it is
required. The Relocation Expense Allowance will be included in
your gross income and will be grossed-up for tax purposes. The
Relocation Expense Allowance will be processed by payroll and
included in your first paycheck.

 

 

Relocation and Interim Living expenses are not to exceed a combined total of $175,000, and are
subject to your acceptance of this offer, and your acceptance of the specific terms of the
relocation agreement enclosed.

In this position you are immediately eligible to enroll in our health and wellness benefits (please
see the benefits information packet for further details). Additionally, in accordance with the
Yankee Candle Company Inc.’s pay progression plan, your first salary review will occur in January
2006, reviewing your performance for fiscal 2005.

Due to the nature of this position, we do require a signed “Proprietary and Confidential
Information Agreement”, an “Agreement Not to Compete” as well as a signed “Relocation Agreement”.
Please sign and return these documents, as well as a copy of this offer letter, to my personal
attention at the earliest opportunity and no later than your start date.

We will schedule you to attend Employee Orientation on the Monday your employment begins. Employee
Orientation will be at the Yankee Candle manufacturing facility at 102 Christian Lane in Whately,
MA (YCI) with a member of the Human Resources Department. Orientation will begin at 8:30am.
Additionally, you will be scheduled to attend Computer Orientation Training immediately following
the Employee Orientation in the Computer Training Room at Yankee Candle Corporate Office (YCO).

I trust that these conditions of employment are mutually agreed upon and fully understood. If you
have any questions or concerns, please contact me directly. On a personal note, I look forward to
you joining our team, and to working with you!

Warmest regards,

Martha S. LaCroix, SPHR

Senior Vice President, Human Resources

I agree that the terms outlined in this offer of employment are as described to me verbally, and I
do accept these terms. I understand that this is an offer of employment, not an employment
contract, and that employment with Yankee Candle is on an “at will” basis and may be terminated by
me or the Company at any time, for any reason.

Signed:

 

			
	Richard R. Ruffolo
	 	Date

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