Document:

Plant Facility Service Agreement dated July 20, 2004

 Exhibit 10.2 
  
 Plant Facility Service Agreement 
 [Translation] 
  
 This Agreement is made by and
between Chi Mei Optoelectronics Corp. (hereinafter “Party A”) and Himax Display, Inc. (hereinafter “Party B”) on July 20, 2004. The parties agree to the following terms and conditions with respect to the use by Party B of a
plant facility located in Tainan Science and Industrial Park and owned by Party A and the services to be provided by Party A to Party B. 
  

			
		
	 Article 1
	 	Location of the Premises
		
	 	 	Party A agrees to provide a certain area of a plant facility located at 12 Nanke 8th Road, Tainan Science and Industrial Park, for Party B to research, develop, design, experiment, and establish
a clean room for the production of Liquid Crystal on Silicon (L-COS).
		
	 Article 2
	 	Administrative Management
		
	 2.1
	 	 Personnel of Party B shall obey and act in compliance with all the administrative, management and operational regulations and processing directives of the
plant.

		
	 2.2
	 	 Party B shall pay a management fee of NT$1,110,000 (tax excluded) to Party A, as prescribed in Appendix I.

		
	 2.3
	 	 Party B shall buy all necessary insurances, liability insurances, or arrange necessary risk management measures for the benefit of the properties located and
personnel worked in the premises.

		
	 2.4
	 	 Party B represents and warrants that business operations and production activities engaged within the premises will not disturb Party A as a result of an argument
and/or dispute between a third person and Party B or its personnel. In the event where Party A, its representative, or personnel suffers, including but not limited to mental, physical, reputation, property, and goodwill losses, Party B shall be
liable for the damages. If the damage is substantial, Party is entitled to terminate this Agreement immediately.

  

 1 

			
		
	 2.5
	 	 With respect to payments of management fee, the following, without limitation, shall be taken into account:

		
	 	 	 1. cost of land used;

		
	 	 	 2. cost of plant construction;

		
	 	 	 3. cost of monthly water and electricity supply; and

		
	 	 	 4. cost of special gas and high-pressure electricity.

		
	 2.6
	 	 The management fee mentioned above may be adjusted reasonably and fairly upon the agreement of the parties based on the actual usage and costs of the
premises.

		
	 2.7
	 	 When Party B moves to another office, it shall compensate Party A for the expenses in connection with remaining interior design, physical facilities and
damages.

		
	 Article 3
	 	Clean Room
		
	 3.1
	 	 To facilitate Party B’s L-COS production within the premises, Party A agrees to establish one L-COS Clean Room (hereinafter, the “CR”) for Party B,
while the equipment for production shall be provided by Party B.

		
	 3.2
	 	 Construction fees: The total costs of the CR to be established by Party A for Party B shall be NT$42,479,891 (taxes excluded, as prescribed in Appendix II). Party
B shall pay the total amount to Party A in a lump-sum payment, and Party A shall issue the invoice in December 2003 to Party B for such payment.

		
	 3.3
	 	 Additional costs: Party B shall pay all the additional costs incurred thereafter in connection with the construction of CR and other additional construction. Party
A will not pay such costs for Party B for reimbursement by Party B.

  

 2 

			
		
	 3.4
	 	 Ownership: Financed and established by Party A, the ownership of CR shall belong to Party A; however; a right of first refusal to purchase the CR may be granted
to Party B upon the negotiation and agreement with Party A at the expiration of this Agreement.

		
	 3.5
	 	 Area to be used by Party B: Party A agrees to provide an area prescribed in Appendix III for Party B.

		
	 Article 4
	 	Supply and Management of Energy
		
	 4.1
	 	 Party A shall provide power and energy for Party B’s LCOS production. Party B shall collaborate with Party A, providing Party A necessary assistance (such as
planning on water and power usage), so that Party A may provide Party B all the necessary power and utility.

		
	 4.2
	 	 Party B shall, depending on the actual volume of its usage, pay Party A every month a fee of energy supply and management. Computation of such fee is prescribed in
Appendix IV.

		
	 Article 5
	 	Work Safety
		
	 5.1
	 	 Hazard Prevention Center and emergency response: Party B shall share the costs of supporting the Hazard Prevent Center in accordance with the area of its lease,
which is prescribed in Appendix V. Party B shall establish an emergency response team, which shall collaborate with Party A in emergencies in accordance with the emergency response procedures of Party A.

		
	 5.2
	 	 Fire control examination: Party B shall conduct maintenance and repair of fire control facilities within the premises, and share the costs prescribed in Appendix
V.

		
	 5.3
	 	 Public safety and hygiene management: Party B shall be responsible for providing safety and hygiene within the premises in accordance with the
applicable laws and regulations, conduct public safety examinations in collaboration with Party A, and share relevant costs in proportion to the area it used.

	 	 

  

 3 

			
		
	 5.4
	  	 Management of Party B’s contractors: Party B and its contractors shall comply with the contractors’ management rules promulgated by the Party A, as
prescribed in Appendix VI.

		
	 5.5
	  	 Waste disposal: Party B shall, in accordance with applicable laws and regulations, dispose wastes generated in the course of producing LCOS.

		
	 5.6
	  	 Party B shall not store any illicit or illegal goods at Party A’s plant.

		
	 Article 6
	  	Changes of Fees
		
	 6.1
	  	 In the event where Party B increases its staff or expands its area usage, it shall pay Party A additional fees regarding the extra area, water and power
supply.

		
	 6.2
	  	 In the event where extra fees are incurred due to Party B’s requirement regarding equipment (such as telephones) or its maintenance, such amounts shall become
payable in the first month of the following year.

		
	 Article 7
	  	Payments
		
	 	  	Unless otherwise provided in Article 3, with respect to the fees payable (VAT excluded) by Party B to Party A under this Agreement, Party A shall provide the figure due and issue invoices to
Party B within three business days after the 30th day of every month (or similar time). Party B shall, within five business days after receipt of Party A’s provision of figure notification and invoices, remit the amount payable to a designated
bank account of Party A; such remittance shall be done no later than the 15th day of every month.

  

 4 

			
		
	 Article 8
	 	Maintenance
		
	8.1	 	 With respect to the usage and entry of the premises specified in this Agreement, Party B shall exercise due care as a faithful manager to safekeep, maintain,
and repair relevant facilities, and shall comply with the management rules promulgated by Party A. With respect to facilities out of Party B’s reach (such as air conditioning and fire control system), Party B may engage Party A to provide
assistance.

		
	8.2	 	 Party B shall not alter or add structures and exterior of the premises and the internal office facilities without Party A’ consent.

		
	Article 9	 	Representations and Warranties
		
	9.1	 	 The parties represent and warrant that this Agreement is executed by their duly authorized representatives.

		
	9.2	 	 The parties represent and warrant that execution of this Agreement will not breach another contract, agreement, or obligation in any form having been made by
either party with a third party.

		
	9.3	 	 Party B represents and warrants that the decision to station in Party A’s plant has been approved by its board and in line with all company rules of its
own.

		
	9.4	 	 The Parties shall keep confidential this Agreement and information of the other party obtained under this Agreement.

		
	Article 10	 	Breach
		
	 	 	Unless due to force majeure or government regulations, the party in breach of this Agreement shall compensate the other party all the losses and damages suffered by the other party as a
result of the breach.
		
	Article 11	 	Term and Termination
		
	11.1	 	 This Agreement shall become effective on the effective date and expire on December 31, 2005.

		
	11.2	 	 The Parties may extend this Agreement by one-year term with a 60-days’ notice sent prior to the date of expiration.

  

 5 

			
		
	11.3	 	 This Agreement may be terminated if either party commits a breach or is financially exhausted, provided that the other party shall give such party a
60-days’ prior written notice.

		
	11.4	 	 This Agreement may be terminated at any time upon the written consent of both parties.

		
	11.5	 	 This Agreement shall terminate immediately in the event of liquidation, reorganization, or bankruptcy of either party.

		
	Article 12	 	Restoration
		
	 	 	Upon the expiration or termination of this Agreement, Party B shall restore the premises at its own expense to its original condition.
		
	 	 	Fixtures and other property remaining on the premises shall be disposed of by Party A at Party B’s cost and expense.
		
	Article 13	 	Amendment and Assignment
		
	13.1	 	 Amendment of this Agreement shall be done by duly authorized representatives of the parties.

		
	13.2	 	 Without prior written consent of the parties, this Agreement may not be assigned to any third person; provided, however, that in the event that Party B desires
to terminate this Agreement as a result of a change in its business or an internal restructure, Party B shall notify Party A of such event immediately in writing.

		
	 	 	In the event of termination by the foregoing, Party B shall cause the new business affiliate to enter into an agreement with the same terms and conditions of this Agreement.
		
	 	 	Until the new business affiliate enters into the aforementioned agreement with Party A, the termination of this Agreement pursuant to this Article 13.2 shall not be
effective.

  

 6 

			
		
	13.3	 	 Party B shall not permit any third person to use the premises without consent of Party A.

		
	Article 14	 	Entire Agreement
		
	 	 	The parties agree that this Agreement, together with the Appendixes attached thereto, replaces all prior written or verbal agreements or promises.
		
	Article 15	 	Dispute Resolution
		
	 	 	Disputes arising out of this Agreement shall be resolved by the parties by amicable negotiation. Disputes which cannot be resolved by negotiation shall be settled by non-binding arbitration
pursuant to the rules and procedures of the Arbitration Association of the Republic of China and the Arbitration Law of the Republic of China. Awards rendered by the arbiteurs may be litigated pursuant to Article 15 contained
herein.
		
	Article 16	 	Jurisdiction
		
	 	 	The Parties agree that any and all disputes arising out of this Agreement shall be brought to Tainan District Court, Taiwan, as the court of first impression.
		
	Article 17	 	Counterparts
		
	 	 	This Agreement is executed in three counterparts, with Party A keeping one copy and Party B keeping two for records.

  

 7 

			
	 Entered into by
	 	 
	 /Seals/
	 	 /Seals/

		
	 Chi Mei Optoelectronics Corporation
	 	 Himax Display, Inc.

	 Representative: He Zhao-yang
	 	 Representative: Wu Bing-sheng

	 Address: 1 Chiye Rd., STSP, Tainan
	 	 Address: 12 Nanke 8th Rd., Tainan

	 County
	 	 Science and Industrial Park, Tainan

	 	 	 County

  
 Dated
this 20th day of July, 2004 
  

 8 

 Appendix I - Management Fee for Himax Display, Inc. 
  

																							
	 Category

	  	 Item

	  	CHI MEI PLANT

	  	 
	  	  	Cost

	  	Depreciation

	  	Unit Price
(Depreciated)

	  	Amount

	  	Unit

	  	Cost

	  	Interest
2.7%

	  	Maintenance
Cost

	  	Total
Cost

	  	 Remarks

	 Location
	  	 Office Area 55%
	  	 	  	 	  	151	  	1,092	  	m2	  	164,832	  	 	  	 	  	164,832	  	 
												
	 	  	 Office Area Public Amenities 45%
	  	 	  	 	  	151	  	893	  	m2	  	134,843	  	 	  	 	  	134,843	  	$500 per ping
												
	 	  	 Clean Room 55%
	  	 	  	 	  	151	  	1,045	  	m2	  	157,795	  	 	  	 	  	157,795	  	 
												
	 	  	 Clean Room Public Amenities 45%
	  	 	  	 	  	151	  	855	  	m2	  	129,105	  	 	  	 	  	129,105	  	 
												
	 Interior Decoration
	  	 Office Desk/ Chair/ Partition
	  	—  	  	6	  	—  	  	1	  	Set	  	0	  	0	  	0	  	0	  	Already paid
												
	 	  	 Major Interior Decoration
	  	1,300,178	  	26	  	4,167	  	1	  	Month	  	4,167	  	2,925	  	0	  	7,093	  	 
												
	 	  	 Light Partition
	  	1,950,000	  	26	  	6,250	  	1	  	Month	  	6,250	  	4,388	  	0	  	10,638	  	 
												
	 	  	 Ceiling
	  	620,000	  	26	  	1,987	  	1	  	Month	  	1,987	  	1,395	  	0	  	3,382	  	 
												
	 	  	 Seamless Flooring
	  	400,000	  	26	  	1,282	  	1	  	Month	  	1,282	  	900	  	0	  	2,182	  	 
												
	 	  	 Conference room Whiteboard/ Notice Board
	  	—  	  	6	  	—  	  	0	  	Item	  	0	  	0	  	0	  	0	  	Already paid
												
	 	  	 Shoe Cabinet
	  	—  	  	6	  	—  	  	0	  	Item	  	0	  	0	  	0	  	0	  	Already paid

  

 9 

																							
	 Facility
	  	 Network Equipment
	  	4,783,000	 	4	  	99,646	  	1	  	Month	  	99,646	  	10,762	  	56,830	  	167,238	  	 
												
	 	  	 Telephone System
	  	1,086,197	 	6	  	15,086	  	1	  	Month	  	15,086	  	2,444	  	21,724	  	39,254	  	 
												
	 	  	 Air Conditioning
	  	2,305,148	 	9	  	21,344	  	1	  	Month	  	21,344	  	5,187	  	46,106	  	72,634	  	 
												
	 	  	 Electrical Equipment
	  	853,400	 	9	  	7,902	  	1	  	Month	  	7,902	  	1,920	  	17,068	  	26,890	  	 
												
	 	  	 Firefighting Equipment
	  	500,000	 	9	  	4,630	  	1	  	Month	  	4,630	  	1,125	  	10,000	  	15,755	  	 
												
	 	  	 Kitchen Equipment
	  	350,000	 	6	  	4,861	  	1	  	Month	  	4,861	  	788	  	7,000	  	12,649	  	 NT.7,000,000 per 1000 uses * 50 people

												
	 	  	 ID Card System
	  	234,250	 	6	  	3,253	  	1	  	Month	  	3,253	  	527	  	4,685	  	8,466	  	 NT.9,370,000 per 200 sets * 5 sets

												
	 	  	 Surveillance System
	  	409,655	 	6	  	5,690	  	1	  	Month	  	5,690	  	922	  	8,193	  	14,804	  	 NT.19,800,000 per 145 sets * 3 sets

												
	 	  	 Projector Screen
	  	—  	 	6	  	—  	  	1	  	Month	  	0	  	0	  	0	  	0	  	 Already paid

												
	 Electricity & Water
	  	 Water Cost
	  	 	 	 	  	30	  	65	  	Person	  	1,950	  	0	  	0	  	1,950	  	 
												
	 	  	 Lighting/Operational Equipment Electricity Cost
	  	 	 	 	  	617	  	22	  	Day	  	13,574	  	0	  	0	  	13,574	  	 Excludes clean room

												
	 	  	 Air Conditioning Electricity Cost
	  	($165/hr*
  10 hrs)	 	 	  	1,650	  	22	  	Day	  	36,300	  	0	  	0	  	36,300	  	 Excludes clean room

  

 10 

																					
	 Fees
	  	 MIS Service Fee
	  	 	 	60,000	  	1	  	Month	  	60,000	  	0	  	0	  	60,000	  	 
											
	 	  	 Office Cleaning
	  	 	 	24,000	  	0.0	  	Man
hour	  	0	  	0	  	0	  	0	  	 
											
	 	  	 Garbage Cleaning and Disposal
	  	40Kg/
person
*
3.709	 	148	  	65	  	Person	  	9,646	  	0	  	0	  	9,646	  	 May 2003 changed to NT.3709/ton

											
	 	  	 Security
	  	 	 	4	  	3,885	  	m2	  	15,540	  	0	  	0	  	15,540	  	 
											
	 	  	 Medical
	  	 	 	50	  	65	  	Person	  	3,250	  	0	  	0	  	3,250	  	 
											
	 	  	 Washroom Supplies (e.g. toilet paper)
	  	 	 	60	  	65	  	Person	  	3,900	  	0	  	0	  	3,900	  	 
											
	 	  	 Parking Space (20 basic parking spots)
	  	 	 	 	  	 	  	 	  	 	  	0	  	0	  	0	  	 For each space over 20, additional charge of NT.2300 per month

											
	 	  	 Fire Inspection
	  	 	 	 	  	 	  	 	  	 	  	0	  	0	  	0	  	 

  

 11 

 Appendix II - Opto-Electronics Clean Room Construction for Himax Display Inc. 
  

													
	 	  	 Construction
Form Code

	  	 PO Form Code

	  	 Explanation

	  	 Contractor

	  	Amount

	  	Remarks

	 1
	  	 59204666CM3
	  	 92509150CM3
	  	 Opto-Electronics clean room construction for HiamxDisplay
	  	 Han Tang
	  	32,500,000	  	Completed
							
	 2
	  	 59210216CM3
	  	 92513372CM3
	  	 Stickers and Labels
	  	 SHIN Tao-tsung
	  	1,600	  	Completed
							
	 3
	  	 59210211CM3
	  	 92515494CM3
	  	 Six separate power sources
	  	 Han Tang
	  	354,000	  	Completed
							
	 	  	 59210211CM3
	  	 92515492CM3
	  	 Additional low voltage electrical distribution engineering
	  	 Han Tang
	  	371,000	  	Completed
							
	 	  	 59210211CM3
	  	 92515493CM3
	  	 Ventilation
	  	 Han Tang
	  	422,000	  	Completed
							
	 4
	  	 59212334CM3
	  	 92515346CM3
	  	 Access swipe card system transplant
	  	 CHIN Chan-shing
	  	9,500	  	Completed
							
	 5
	  	 59212452CM3
	  	 92515185CM3
	  	 MAU room’s VFD and PLC tray transplant
	  	 Han Tang
	  	150,000	  	Completed
							
	 6
	  	 59211317CM3
	  	 92515184CM3
	  	 Three items of independent socket tray
	  	 Han Tang
	  	280,000	  	Completed
							
	 7
	  	 59210961CM3
	  	 92513664CM3
	  	 Display Sign
	  	 SHIN Tao-tsung
	  	6,000	  	Completed
							
	 8
	  	 59213355CM3
	  	 92516379CM3
	  	 Sewage pipe modification
	  	 Han Tang
	  	97,000	  	Completed
							
	 9
	  	 59213273CM3
	  	 92516170CM3
	  	 Additional sockets
	  	 Kao Hsin
	  	14,000	  	Completed
							
	 	  	 	  	 	  	 	  	 	  	34,205,100	  	 

  

	*	Additional shared liquid system cost: 

  

	1.	The contractor for the PCW supply (for L-COS and LCD-USL) was CHIU HO Engineer Co.,Ltd. Cost was NT$5,480,000 + 725,536 = NT$6,205,536 

  

 12 

 L-COS: 8 m3/hr 
  
 LCD-USL:
75.3 m3/hr 
  
 The two feeds into LCOS and has to share 8/(75.3 + 8) = 0.096 of the cost, which is approximately 0.096 x 6205536 = 595,731. 
  

	2.	The contractor for the DIW supply (for Sun-East International, L-COS, LCD-USL) was KINTECH. 

  
 Cost was NT$30 million + backup system NT$5.8 million (RO, EDI, UF chemical wash, 580,000) + (1 set of EDI, 2,600,000)

  
 Sun-East International: 5 m3/hr 
  
 L-COS: 13 m3/hr

  
 LCD-USL: 48 m3/hr 
  
 Total feed into LCOS shares 13/(5 + 13 + 48) ≈ 0.197 (300 million + 58 million + 2.6 million) = 7,679,060 
  

 13 

 Appendix III - Engineering schematic 
  
 [omitted] 
  

 14 

 Appendix IV 
  

											
	 C.M.O.
 LCM Plant Himax Display Opto-Electronics Project
 Compressed Dry Air (CDA) Cost Calculation Table

			
	 	 	(1) Investment Cost	 	 
	 	 	 Name

	 	 Total Investment
Amount

	 	 Monthly Cost
(amortized over 5 years)

	 	 Remarks

					
	 	 	Screw Air Compressor	 	NT.13345716	 	NT.185358	 	 
					
	 	 	Air Dryer	 	NT.8555144	 	NT.118822	 	 
					
	 	 	Pipeline	 	NT.39484094	 	NT.548390	 	 
					
	 	 	    Sub-Total	 	NT.61384954	 	NT.852570	 	 
			
	 Fixed
	 	(2) Land and Infrastructure Investment Cost	 	 
	 Cost
	 	  
 Amortized Monthly Total
 (852570)/0.7*0.3
	 	  
         NT.365387 per month
	 	 
			
	 	 	(3) Equipment, Land and one-time Power Supply Work Total Investment Cost Monthly Interest	 	 
				
	 	 	((1) + (2)) * 0.5% (annual interest rate 6%)	 	         NT.6090 per month
	 	 
			
	 	 	 Sub-Total: (1) + (2) +(3) = 852570 + 365387 +6090
 = NT.1224047 per month
	 	 
			
	 	 	 Fixed Cost: 1224047/8752 CMH = NT.140/CMH–month) = NT.0.194 CMH-HR)
 Note: 8752 CMH: (2188 CMH/SET * 4 SETS = 8752 CMH)
	 	 

  

 15 

											
	 Operating
 Cost
	 	(1) Electricity Cost
	 	 	 Equipment Name

	 	 Monthly Power
Consumption per Set

	 	 Number of Sets

	 	 Total Monthly Power
Consumption

	 	 Total Monthly
Electricity Cost

						
	 	 	Screw Air Compressor	 	246KWH*54*30	 	4	 	4*246*24*30	 	NT.1204416
						
	 	 	Air Dryer	 	51KWH*25*30	 	3	 	3*51*24*30	 	NT.187272
		
	 	 	Sub-total: NT.160/month-CMH
		
	 	 	(2) Maintenance Cost
						
	 	 	 Equipment Name

	 	 Monthly Cost per Set

	 	 Number of Sets

	 	 Total Monthly Cost

	 	 Remarks

						
	 	 	Screw Air Compressor	 	2043	 	4	 	8172	 	 
						
	 	 	Air Dryer	 	19165	 	3	 	57495	 	 
		
	 	 	 Sub-total: NT.7.5/month-CMH
 Notes

 
 1.      The screw
air compressor costs NT.2043/month for replacement of air filter, oil filter and lubricant.
  
 2.      The air dryer costs NT.19165/month for replacement of front filter, rear filter, final
filter and activated carbon filter.

		
	 	 	Sub-total: (1) + (2) = NT.167,5/month-CMH
		
	 	 	Operating Cost: NT.167.5/month-CMH/30/24=NT.0.23 CMH-HR
		
	 Total
 Cost
	 	 Fixed Cost + Operating Cost
 = NT.0.194
CMH-HR + NT.0.23 CMH-HR

	
	 Remarks:
  
 The total capacity of the four screw air compressors: 8752CMH
 (Each
compressor rated at 2188CMH)

  

 16 

											
	 C.M.O.
 LCM
Plant Himax Display Opto-Electronics Project
 DCC System Cost Calculation Table
  

	 	 	(1) Investment Cost
					
	 	 	 Equipment Name

	 	 Total Investment Amount

	 	 Monthly Cost
(amortized over 5 years)

	 	 Remarks

					
	 	 	Pump (includes engineering)	 	 NT.19000000
	 	 NT.263889
	 	 
					
	 	 	Pipeline work	 	 NT.39000000
	 	 NT.541667
	 	 
					
	 	 	Sub-total	 	 NT.58000000
	 	 NT.805556
 per month
	 	 
			
	 Fixed
	 	(2) Land and Infrastructure Investment Cost	 	 
	 Cost
	 	  
 Amortized Monthly Total
 (805556)/0.7*0.3
	 	  
         NT.345238 per month

		
	 	 	(3) Equipment, Land and one-time Power Supply Work Total Investment Cost Monthly Interest
				
	 	 	((1) + (2)) * 0.5%	 	 	 	         NT.5753/month

		
	 	 	 Sub-total: (1) + (2) + (3) = 805556 + 345238 + 5753
 = NT.1156547 per month

		
	 	 	 Fixed Cost: 1156547/2410RT = NT.479/RT-month
 Note:
 2410RT: (heat exchanger 2430000Kcal/HR*3 SETS
 = 7290000Kcal/HR/3024
 =
2410RT)

		
	 Operating
 Cost
	 	(1) Electricity Cost
						
	 	 	 Equipment Name

	 	 Monthly Power
Consumption per Set

	 	 Number of Sets

	 	 Total Monthly Power
Consumption

	 	 Total Monthly
Electricity Cost

						
	 	 	DCC refrigerated water pump	 	 75kwh*24*30
	 	 3
	 	 75kwh*24*30*3
	 	 NT.91800

		
	 	 	Sub-total:             NT.91800 per month
		
	 	 	(2) Maintenance Cost
						
	 	 	 Equipment Name

	 	 Monthly Cost per Set

	 	 Number of Sets

	 	 Total Monthly Cost

	 	 Remarks

						
	 	 	DCC refrigerated water pump	 	 1666
	 	 3
	 	 4998
	 	 
		
	 	 	 Sub-total:             NT.4998 per month
 Note: Pump maintenance (bearing lubrication, axel maintenance and calibration) is approximately NT.1666 per month.

		
	 	 	Sub-total: (1) + (2) = 91800 + 4998 = 96798 per month
		
	 	 	Operating Cost: 96798/2415RT/30/24 = NT.0.056/RT-HR
		
	 Total
 Cost
	 	Fixed Cost + Operating Cost = NT.479/RT-month + NT.0.056/RT-HR

  

 17 

									
	 C.M.O.
 LCM
Plant Himax Display Opto-Electronics Project
 Nitrogen Gas Cost Calculation Table
  

		
	 	 	(1) Investment Cost
	 	 	 Equipment Name

	 	 Total Investment Amount

	 	 Monthly Cost
(amortized over 5 years)

	 	 Remarks

					
	 	 	Pipeline	 	NT.3000000	 	NT.41667	 	 
					
	 	 	Sub-total	 	NT.3000000	 	NT.41667 per month	 	 
		
	 Fixed
	 	(2) Land and Infrastructure Investment Cost
	 Cost
	 	  
 Amortized Monthly Total
 (41667)/0.7*0.3
	 	  
 NT.17857 per month
	 	 
		
	 	 	(3) Equipment, Land and one-time Power Supply Work Total Investment Cost Monthly Interest
				
	 	 	((1) + (2)) * 0.5% (Annual interest at 6%)	 	NT.298 per month	 	 
		
	 	 	 Sub-total: (1) + (2) + (3) = 41667+ 17857 + 298
 = NT.59822 per month

		
	 	 	Fixed Cost: NT.59822 per month
		
	Operating
Cost	 	 1KG LN2 = 0.8M3GN2
  
 Expended Cost
 = (Actual cumulative nitrogen gas usage / 0.8) * NT.3.1/KG-LN2
  

	 	 	 Operating Cost:
 (Actual cumulative nitrogen
gas usage) * NT.3.1/KG-LN2

		
	 Total
 Cost
	 	Fixed Cost + Operating Cost = NT.59822/month + (actual cumulative nitrogen gas usage/0.8)*NT.3.1/KG-LN2
					
	 Remarks:
	 	 	 	 	 	 	 	 

  

 18 

											
	
	 C.M.O.
 LCM Plant Himax Display Opto-Electronics Project
 Refrigerated Water System Cost Calculation Table

			
	 	 	(1) Investment Cost	 	 
					
	 	 	 Equipment Name

	 	 Total Investment Amount

	 	 Monthly Cost
(amortized over 5 years)

	 	 Remarks

					
	 	 	Refrigeration unit including engineering	 	NT.64254860	 	NT.892429	 	 
					
	 	 	Pump including engineering	 	NT.24270000	 	NT.337083	 	 
					
	 	 	Water Cooling Tower including engineering	 	NT.28607105	 	NT.397321	 	 
					
	 	 	Pipeline work	 	NT.67500000	 	NT.937500	 	 
					
	 	 	Sub-total	 	NT.184631965	 	 NT.2564333
 per month
	 	 
			
	Fixed	 	(2) Land and Infrastructure Investment Cost	 	 
	Cost	 	  
 Amortized Monthly Total
 (2564333)/0.7*0.3
	 	  
 NT.1099000 per
month

			
	 	 	(3) Equipment, Land and one-time Power Supply Work Total Investment Cost Monthly Interest	 	 
			
	 	 	((1) + (2)) * 0.5%	 	 NT. 18317 per month

			
	 	 	 Sub-total: (1) + (2) + (3) = 2564333 + 1099000 +18317
 = NT.0.604/RT-HR
	 	 
			
	 	 	 Fixed Cost: 3681650/8880RT = NT.434.8/RT-month
 = NT. 0.604 RT-HR
 Note: 8880RT: (Heat recovery 460RT * 3 SETS + 1250RT * 6 SETS
 =8880RT)
	 	 

  

 19 

											
		
	Operating Cost	 	(1) Electricity Cost
						
	 	 	 Equipment Name

	 	 Monthly Power
Consumption
per Set

	 	 Number
of Sets

	 	 Total Monthly Power
Consumption

	 	 Total Monthly
Electricity Cost

						
	 	 	1250RT refrigeration unit	 	812KWH*24*30	 	6	 	812KWH*24*30*6	 	NT.3507840
						
	 	 	460RT refrigeration unit	 	360KWH*24*30	 	3	 	360KWH*24*30*3	 	NT.777600
						
	 	 	Secondary refrigerated water pump	 	150KWH*24*30	 	4	 	150KWH*24*30*4	 	NT.432000
						
	 	 	Cooling water pump	 	75KWH*24*30	 	6	 	75KWH*24*30*6	 	NT.324000
						
	 	 	Cooling water pump	 	5 KWH*24*30	 	3	 	5KWH*24*30*3	 	NT.120960
						
	 	 	Refrigerated water pump	 	30KWH*24*30	 	6	 	30KWH*24*30*6	 	NT.129600
						
	 	 	Refrigerated water pump	 	23KWH*24*30	 	3	 	23KWH*24*30*3	 	NT.49680
						
	 	 	Water cooling tower fan	 	45KWH*24*30	 	6	 	45KWH*24*30*6	 	NT.194400
		
	 	 	Sub-total: NT.5536080 per month
		
	 	 	(2) Maintenance Cost
						
	 	 	 Equipment Name

	 	 Monthly Cost
per Set

	 	 Number
of Sets

	 	 Total Monthly Cost

	 	 Remarks

						
	 	 	1250RT refrigeration unit	 	12500	 	6	 	7500	 	 
						
	 	 	460RT refrigeration unit	 	1250	 	3	 	37500	 	 
						
	 	 	Secondary refrigerated water pump	 	1666	 	4	 	6664	 	 
						
	 	 	Cooling water pump	 	1666	 	6	 	9996	 	 
						
	 	 	Cooling water pump	 	1666	 	3	 	4998	 	 
						
	 	 	Refrigerated water pump	 	1666	 	6	 	9996	 	 
						
	 	 	Refrigerated water pump	 	1666	 	3	 	4998	 	 
						
	 	 	Water cooling tower fan	 	5000	 	6	 	30000	 	 
		
	 	 	Sub-total: NT.179152 per month
		
	 	 	 Sub-total: (1) + (2) = 5536080 + 179152 = NT.5715232 per month.
  
 Note:
  
 1.      Maintenance for main refrigeration water unit (cleaning condenser, replace oil filter,
clean distillation unit, replace refrigeration oil) costs approximately NT.150000 a year, or an average of NT.12500 per unit each month.

  

 20 

											
		
	 	 	 2.      Maintenance for the water cooling tower (cleaning basin,
maintenance of speed reduction gear, replacement of speed reduction gear oil( costs approximately NT.60000 a year, or an average of NT.5000 per unit each month.
  

3.      Maintenance for pumps (bearing lubrication, maintenance of axels and calibration) costs
approximately NT.20000 a year, or NT.1666 per unit each month.

		
	 	 	Operating Cost: 5715232/8880RT/30/24 = NT.0.893/RT-HR
		
	 Total
 Cost
	 	 Fixed Cost + Operating Cost = NT.0.604/RT-HR + NT.0.893/RT-HR
 = NT.1497/RT-HR

  

 21 

 C.M.O. 
  
 LCM Plant Electricity System Cost Calculation 
  
 (1) A total of 26 high and low voltage distributors are related to Himax Display 
  

	1.	Share in for one-fifth of the burden for the following distributors 

  
 3002-ESG-001~ 3002-ESG-005 
  
 3002-ESG-T01 
  
 3002-GT-001 ~ 005 
  
 3002-GR-001 ~ 3002-GR-005 
  
 Total: NT.3433800 
  
 One fifth is therefore NT.686760 
  

	2.	Share in one half of the burden for the following distributors 

  
 2002-SB-250 
  
 2002-SB-T50 
  
 2002-SB-150 
  
 2002-SB-242F 
  
 2002-SB-131H” 
  
 2002-ESB-T81 
  
 2002-ESB-191D” 
  
 2002-ESB-291d” 
  
 2002-ESB-281D 
  
 2002-ESB-T91” 
  
 Total: NT.3898099 
  
 One half is therefore NT.1949050 
  

	3.	Emergency Power Supply 

  
 Total construction cost is NT.50 million, with Himax Display 
  
 Opto-Electronics’s share being: 
  
 50000000/5*0.4 = NT.4000000 
  

 22 

 (2) From the above, if amortized over five years by LI-CHING Opto-Electronics, the fixed cost are: 
  
 4000000/6/12 = 5556 
  
 + 
  
 7457398.5/6/12 = 36609 
  
 NT. 92165 
  
 (3) The above are the fixed costs, while the variable cost is calculated using the following equation: 
  
 LI-CHING Opto-Electronics’ monthly power consumption 
  
 * Taipower’s listed hourly rate 
  
 * 1.2 
  

 23 

											
	 C.M.O.
 LCM Plant Himax Display Opto-Electronics Project
 Hot Water System Cost Calculation Table

			
	 	 	 (1) Investment Cost
	 	 
					
	 	 	 Equipment Name

	 	 Total Investment Amount

	 	 Monthly Cost
(amortized over 5 years)

	 	 Remarks

					
	 	 	Heater (1000KW, 217RT)	 	 NT.2593800
	 	 NT.36025
	 	 
					
	 	 	Heater Pump	 	 NT.105090
	 	 NT.1460
	 	 
					
	 	 	Primary Hot Water Pump	 	 NT.229163
	 	 NT.3182
	 	 
					
	 	 	Secondary Hot Water Pump	 	 NT.394755
	 	 NT.5483
	 	 
					
	 Fixed
	 	Pipeline	 	 NT.3312709
	 	 NT.46009
	 	 
	 Cost
	 	  
 Sub-total
	 	  
 NT.6635517
	 	  
 NT.92159 per month
	 	 
			
	 	 	(2) Land and Infrastructure Investment Cost	 	 
			
	 	 	 Amortized Monthly Total
 (92159)/0.7*0.3
	 	         NT.39497 per month

		
	 	 	(3) Equipment, Land and one-time Power Supply Work Total Investment Cost Monthly Interest
			
	 	 	((1) + (2)) * 0.5% (Annual interest at 6%)	 	         NT.658 per month

		
	 	 	 Sub-total: (1) + (2) + (3) = 92159 + 39497 +658
 = NT.132314 per month

		
	 	 	 Fixed Cost: 132314/434RT = NT.305/RT-month = NT.0.424/RT-HR
 Note:
 434RT: (one heater hot water RT index
 = (290 gallon * 3.785 liter) * 10 temperature difference * 1 specific heat capacity * 60 minute / 3025 Calorie-hour = 217RT) * 2 SETS
 = 434RT

  

 24 

											
	 Operating Cost
	 	(1) Electricity Cost
						
	 	 	 Equipment Name

	 	 Monthly Power
Consumption per Set

	 	 Number of Sets

	 	 Total Monthly Power
Consumption

	 	 Total Monthly
Electricity Cost

	 	 	Heater	 	1000KW*0.8*24*30	 	2	 	 2*1000KW
 *0.8*24*30
	 	NT.1958400
						
	 	 	Heater Pump	 	2.2KW*0.8*24*30	 	2	 	 2*2.2KW
 *0.8*24*30
	 	NT.18957
						
	 	 	Primary Hot Water Pump	 	5.5KW*0.8*24*30	 	3	 	 3*5.5KW*0.8
 *24*30
	 	NT.16157
						
	 	 	Secondary Hot Water Pump	 	22KW*0.8*24*30	 	3	 	 3*22KW
 *0.8*24*30
	 	NT.6463
		
	 	 	Sub-total: NT.1999977 per month
		
	 	 	(2) Maintenance Cost
						
	 	 	 Equipment Name

	 	 Monthly Cost per Set

	 	 Number of Sets

	 	 Total Monthly Cost

	 	 Remarks

	 	 	Heater	 	1000	 	2	 	2000	 	 
						
	 	 	Heater Pump	 	1666	 	2	 	3332	 	 
						
	 	 	Primary Hot Water Pump	 	1666	 	3	 	3332	 	 
						
	 	 	Secondary Hot Water Pump	 	1666	 	3	 	3332	 	 
		
	 	 	 Sub-total: NT.11996 per month
 Note:
  
 Maintenance for pumps (bearing lubrication, maintenance of
axels and calibration) is approximately NT.1666 per set each month.
  
 Maintenance for heater and cleaning of electric heater is approximately NT.12000 a year, or around NT.1000 per set each month.

		
	 	 	4. Sub-total: (1) + (2) = 1999977 + 11996 = NT. 2011973 per month
		
	 	 	Operating Cost: 2011973/434RT/30/24 = NT6.4RT-HR
		
	 Total
 Cost
	 	Fixed Cost + Operating Cost = NT.0.424/RT-HR + NT6.4/RT-HR
		
	 Remarks
	 	The total for two heaters: 434RT (217RT per set)

  

 25 

 Himax Display Opto-Eletronics Hyperpure Water Charges 
  

													
	 	  	 Year 2003

	  	 Year 2004

	 Month

	  	 September

	  	 October

	  	 November

	  	 December

	  	 January

	  	 February

	 Hyperpure Water Usage (M3)
	  	100	  	 	  	 	  	 	  	 	  	 
							
	 Monthly Sewage Charge
	  	0	  	 	  	 	  	 	  	 	  	 
							
	 Cumulative Flow Rate at Start of Month
	  	100	  	 	  	 	  	 	  	 	  	 
							
	 Cumulative Flow Rate at End of Month
	  	200	  	 	  	 	  	 	  	 	  	 
							
	 Hyperpure Water Charge =
	  	Monthly Volume (M3) * unit
price	  	Unit price	  	Monthly Sewage Charge * 1.3	  	Monthly Sewage Charge	  	 	  	 
							
	 	  	100	  	40	  	1.3	  	5200	  	 	  	 

  

 26 

											
	 C.M.O.
 LCM Plant Himax Display Opto-Electronics Project
 Sewage Treatment Charges Calculation Table

	 	 	 (1) Investment Cost

					
	 	 	 Equipment Name

	 	 Total Investment
Amount

	 	 Monthly Cost
(amortized over 5 years)

	 	 Remarks

	 	 	 Flow meter
	 	 NT.50000
	 	 NT.695
	 	 
					
	 	 	 Sub-total
	 	 NT.50000
	 	 NT.695 per month
	 	 
				
	Fixed	 	 (2) Land and Infrastructure Investment Cost
	 	 	 	 
	Cost	 	  
 Amortized Monthly
Total
 NT.695/0.7*0.3 = 298
	 	  
 NT.298 per month
	 	 
		
	 	 	 (3) Equipment, Land and one-time Power Supply Work Total Investment Cost Monthly Interest

				
	 	 	 ((1) + (2)) * 0.5% (Annual interest at 6%)
	 	 NT.5 per month
	 	 
				
	 	 	 Sub-total: (1) + (2) + (3) = 695 + 298 +5 = NT.998
	 	 	 	 
				
	 	 	 Fixed Cost: NT.850 per month
	 	 	 	 
		
	 	 	 (1) Electricity Cost

						
	 	 	 Equipment Name

	 	 Monthly Power
Consumption per Set

	 	 Number of Sets

	 	 Total Monthly Power
Consumption

	 	 Total Monthly
Electricity Cost

	 	 	 Sewage Pump
	 	 7.5KWH*24*30
	 	 2
	 	 10800kw.hr
	 	 NT.19440

				
	Operating
Cost	 	 Sub-total:            NT.91800 per month
	 	 	 	 
			
	 	 	 (2) Maintenance Cost
	 	 
						
	 	 	 Equipment Name

	 	 Monthly Cost per Set

	 	 Number of Sets

	 	 Total Monthly Cost

	 	 Remarks

	 	 	 Sewage 1 ton
	 	 NT.18/month
	 	 1
	 	 	 	 Calculated by volume

		
	 	 	 Operating Cost: NT.19440 per month

		
	 Total
 Cost
	 	 Fixed Cost + Operating Cost + Pipeline Charge
 = NT.998/month + NT.19440/month
 = 20438 + Pipeline Charge * 1.3
 Pipeline Charge is calculated using actual sewage volume.

	Remarks:	 	 	 	 	 	 	 	 	 	 

  

 27 

 Appendix V 
  
 I. Himax Display Opto-Electronics Fire and Maintenance Fees 
  

															
	 Total Cost

	 	 Unit Price

	 	 Amount

	 	 Cost for 13
months

	 	 13 months
interest at 5%

	 	 Monthly Cost

	 	 Monthly
Interest

	 	 Monthly Charge

	 NT.2000000
	 	NT.18.41/M2	 	1,985M2	 	NT.36537	 	NT.1827	 	NT.2811	 	NT.141	 	NT.2952

  
 II.
Emergency Services Center 
  
 Cost for one person is
approximately NT.585,579 per year. 
  
 NT.585579 * 4 people /
39,501 Ping / 12 month = NT.5/Ping 
  
 (Unit cost
calculation based on area of Building A) 
  
 The above does not
include share options or profit share. 
  

 28 

 Appendix VI 
  
 CHI MEI ELECTRONICS CORP. 
  
 Contractor Safety and Sanitation Penalty Clauses 
  

							
	 Category

	  	Item

	  	 Violation

	  	 Penalty Amount
 (NT)

				
	 	  	1-1	  	Did not apply for work permit or a permit for special operations. (such as use of naked flame, elevation, sealed space, suspension, fire protection )	  	3,000 each
				
	 	  	1-2	  	Work permit not displayed at work site.	  	3,000 each
				
	Work Permit	  	1-3	  	Use of equipment not verified for use by this company. (Such as arc welders)	  	3,000 each
				
	 	  	1-4	  	Work not performed by qualified personnel or equipment. (Mobile cranes, suspended platforms, welding... etc.)	  	100,000 each
				
	 	  	2-1	  	Photographing or videotaping without permission will result in confiscation of film.	  	3,000 each
				
	 	  	2-2	  	Unauthorized removal or use of items such as the company’s electrical equipment and warning signs etc.	  	3,000 each
				
	 Plant Maintenance
and Security
	  	2-3	  	If damage done to equipment, the contractor is responsible for immediately arranging for its repair. (including other contractors’ equipment)	  	3,000 each
	  	2-4	  	Appropriate isolation measures not taken leading to alarm being set off by work.	  	5,000 each
				
	 	  	2-5	  	Unauthorized use of electrical (must use authorized electrical distribution board), water or gas sources.	  	10,000 each
				
	 	  	2-6	  	If negligence on part of the contractor results in severe loss to the company, the company will hold a meeting to decide the compensation. (The maximum penalty is the total loss suffered as
calculated by the company.)	  	above 20,000
				
	Command
and Control Operations	  	3-1	  	 1. Did not plan and implement self-inspection measures.
 2. Did not conduct the pre-work impact assessment meeting.
	  	2,000 each
	 	  	3-2	  	Personnel involved in work did not complete the safety and sanitation training course before starting work inside plant.	  	3,000 each
				
	 	  	3-3	  	Contractor’s site supervisor and safety/sanitation personnel did not attend safety and sanitation related meeting held by this company.	  	3,000 each
				
	 	  	3-4	  	 1. Supervisor not appointed for hazardous operations.
 2.
Safety/Sanitation supervision personnel not on site during operations that involve working above each other.
	  	3,000 each

  

 29 

							
				
	 	  	3-5	  	 1. Safety/Sanitation supervision personnel (Wearing identifying armband) not appointed at site.
 2. Personnel involved in work not wearing identification vest.
	  	1,000 each
				
	 	  	3-6	  	 Personnel and Vehicle Management:
 1. Personnel not
wearing identification badge.
 2. Working on site wearing a guest badge.
 3. Personnel carrying or drinking alcoholic beverages. (including Whisbih type drinks)
 4. Vehicle does not have identification badge, not parked as
directed, or blocking traffic.
 5. Personnel or vehicle entering or leaving the plant without the permission of the security staff.
	  	3,000 each
				
	Work Safety	  	4-1	  	Work personnel not on ground when moving scaffolding.	  	3,000 each
				
	 	  	4-2	  	Did not apply to remove safety equipment, or did not restore safety equipment.	  	3,000 each
				
	 	  	4-3	  	Inadequate safety measures taken when working in enclosed space.	  	3,000 each
				
	 	  	4-4	  	Hazardous work sites that should regulate the movement of personnel not involved in the work (suspension, arc welding, cutting etc.) not displaying warning signs and area not properly closed
off. (e.g. warning tape)	  	3,000 each
				
	 	  	4-5	  	Personnel not wearing and using properly safety equipment, (e.g. helmet, harness, mask etc.) or using inadequate safety equipment.	  	3,000 each
				
	 	  	4-6	  	 Elevated Operations
 1. Not using safety harness or
vertical safety lines.
 2. Safety nets not installed or edge guard ropes not secured.
 3. Use of non-approved personnel transportation equipment.
	  	3,000 each
				
	 	  	4-7	  	 Crane Operations
 1. Crane or reel not fitted with safety
latch.
 2. Did not install/use reel over-speed device.
 3. Wire
rope broken, deformed or rope end not properly treated.
 4. Improper transportation of personnel. (e.g. use the rope or hook to carry personnel
directly)
 5. When hoisting steel cylinders, did not use appropriate framework to secure them in place.
	  	3,000 each
				
	 	  	4-8	  	 1. Inadequate gate safety precautions.
 2. Did not
install warning signs.
 3. Did not take appropriate safety measures for excavation work.
	  	3,000 each

  

 30 

							
				
	 	  	4-9	  	 1. Scaffolding has no guard rails, has overlapping steps, or does not have pins and struts.
 2. Unsafe ladder installed. (Including dangerous slopes)
 3. Scaffold not
fixed securely during work.
	  	3,000 each
				
	 	  	4-10	  	 1. Inadequate lightning
 2. Poor ventilation

3. Equipment such as cutting tools not fitted with protective measures.
	  	2,000 each
				
	 	  	5-1	  	Unauthorized use or damage of firefighting equipment outside of an emergency. (Such as using fire hose to hoist equipment, get water or displacement of firefighting equipment)	  	3,000 each
				
	 	  	5-2	  	 1. Failed to remove all flammable materials in work area or cover them fully with a fire blanket.
 2. Safety/Sanitation supervision personnel not present during use of open flame.
 3. Cutting and welding tools in poor condition, with inadequate protective measures.
	  	3,000 each
				
	 	  	5-3	  	Insufficient protective measures in flammable and combustible liquid work area. (including storage)	  	3,000 each
				
	Fire
Prevention	  	5-4	  	 1. During open flame operations at least two fire extinguishers must be supplied by contractor within a five meter radius. (each at least 10 pounds,
with CO2 extinguishers to be used in clean room)
 2. Fire extinguisher pressure indicator should be normal, and still within the expiry date.
	  	3,000 each
				
	 	  	5-5	  	No smoking in non-smoking areas.	  	3,000 each
				
	 	  	5-6	  	 1. Oxygen, acetylene and other steel cylinders not secured vertically or appropriately labeled.
 2. Gas cylinders in use not placed on trolley.
 3. Gas pipe lying across
road.
	  	1,500 each
				
	 	  	5-7	  	 1. Electric arc welder casing not grounded.
 2. Electric
arc welder not fitted with an automatic electric shock prevention device.
	  	3,000 each
				
	Safe
Electricity
Use	  	6-1	  	 1. Electrical wiring placed on wet surface.
 2. Use of
electrical wiring with broken sheath or poor insulation.
 3. Naked wires plugged into power socket.
 4. Did not correctly install fuse or circuit breaker.
	  	2,000 each
				
	 	  	6-2	  	Electrical wiring not properly secured or placed in such a manner as to adversely affect personnel safety.	  	2,000 each
				
	 	  	6-3	  	Placing obstructions in passage ways that adversely affect the smooth operation emergency exit line.	  	3,000 each
				
	Environment Protection	  	7-1	  	 1. Free blowing dust (did not spray water or take other effective dust suppression measures)
 2. Build up of waste.
 3. Other situations which cause environmental
pollution.
	  	3,000 each

  

 31 

							
				
	 	  	7-2	  	Work site not cleaned up after completion of work.	  	3,000 each
				
	 	  	7-3	  	Did not follow the park management office’s directives for contractors’ and their staff.	  	5,000 each
				
	 	  	7-4	  	 Tools and materials
 1. Not placed in the designated
storage area
 2. Physically exceeds the designated storage area or exceeds the allowed time.
 3. Stored in a disorganized manner.
 4. Interferes with passage way.
	  	3,000 each
				
	Regulatory
Issues	  	8-1	  	Penalized by oversight agency due to labor safety law violation.	  	10,000 each
				
	 	  	8-2	  	Penalized by environmental protection agency for environmental protection law violation.	  	10,000 each
				
	 	  	8-3	  	Did not report occupational injury that occurred at work site.	  	5,000 each
				
	Audit of
Rectification	  	9-1	  	After being notified of a minor flaw to rectify, but later found to not have resolved the issue on time.	  	1,000 each
				
	 	  	9-2	  	After being notified of a violation, but later found to not have resolved the issue on time.	  	5,000 each
				
	 	  	9-3	  	After being issued a financial penalty, did not pay the penalty or submit an appeal within 10 days.	  	Penalty amount
doubled.
				
	 	  	9-4	  	Obstructing or not cooperating with the company’s audit personnel’s audit operation.	  	10,000 each

  
 Remarks: 
  

	1.	These penalty clauses are applicable to all those who have a direct or indirect contractor relationship with this company. 

  

	2.	Each incident of violation is in principle limited to one penalty per day, with the exception of special or severe violations upon notice. 

  

	3.	The penalty for involved personnel or equipment is to be based upon the actual number of violations. 

  

	4.	Unless otherwise specified, all rectification of faults should all be completed before the next work period. If faults are not rectified, work may not resume.

  

	5.	Depending on the severity of the situation, the labor safety department may call for a meeting to decide how repeat offenders (multiple occurrences of the same violation or having
been repeatedly penalized) will be dealt with. Measures include doubling of penalties, dismissal of offending personnel, contractor’s signing of guarantee, offending personnel barred from working in the plant, termination of contractor status,
and notification to relevant units that the contractor is prohibited from tendering. 

  
 NO: FM-U206-Ver.01 
  

 32Lease Agreement dated June 11, 2004

 EXHIBIT 10.3 
  
 LEASE AGREEMENT 
  
 [Translation] 
  
 This Agreement is made as of June 11, 2004 by and between the following parties: 
  
 Lessor: Shin Kong Life Insurance Co., Ltd.; and 
  
 Lessee: Himax Technologies Limited, 
  
 with respect to Lessee’s lease of Lessor’s property, as follows: 
  
 Article 1 Premises 
  
 Lessor will lease the following to Lessee on an AS IS basis: 
  
 The premises in whole on the third, fourth, sixth, eighth, ninth and tenth floors, and part of the premises on the fifth floor as marked in oblique lines in Appendix 2, at 605 Zhongshan Road, Xinhua, Tainan County,
with a total area of 796.9 pings (including common area). 
  
 Article 2 Term

  

	1.	The lease under this Agreement is a term of one year four months and fifteen days from August 16, 2004 to December 31, 2005. 

  

	2.	Lessor agrees the period between June 16, 2004 and August 15, 2004 is rental-free decoration period. Rental will be zero dollar for such period, provided Lessee shall
still pay the water, electricity and management charges and all relevant expenses arising out of its occupancy of the premises. 

  

	3.	Lessee shall agree on the rental and other terms of lease with Lessor through negotiation and also execute a new agreement within three months prior to the expiration of lease, if
Lessee desires to renew the lease upon expiration. 

  

	4.	 Should Lessor disagree to renewal, it will be deemed to have notified Lessee of non-renewal on the date of expiration of lease, in which event the lessor-lessee

  

 1 

	 	 
relationship will terminate ipso facto and Lessee shall immediately evacuate from the premises and surrender the same to Lessor in their original
state unconditionally, without delay on any pretext. 

  
 Article 3 Rental 
  

	1.	Rental is NT$239,070 per month, excluding VAT. 

  

	2.	Each rental payment covers a period of one month. Lessee shall issue 17 checks, each dated the 16th day and in the amount of the monthly rental, to Lessor upon signing the
agreement. 

  

	3.	A delay penalty is payable at 1% of the total monthly rental for each day of delay in payment. Lessee will be deemed in breach of contract for delaying payment for 60 days (two
installments) or more. In such event, Lessor is entitled by law to claim default penalty from Lessee and terminate this Agreement, and Lessee shall immediately evacuate unconditionally without objection, and further observe Article 10.

  

	4.	Lessor may deduct any outstanding amount of the above-mentioned payment, from the bond, and is further entitled by law to seek compensation for any shortfall and losses suffered
therefrom. 

  
 Article 4 Performance Bond 
  

	1.	Lessee shall pay Lessor upon signing the agreement a performance bond of NT$717,210 (which payment is to be evidenced by a receipt). Such bond will be returned free of interest
against the receipt issued upon payment, upon the expiration or termination of the lease, subject to Lessee’s evacuation from and surrender of the premises and performance of all obligations under this Agreement. 

  

	2.	Lessee may not assign or pledge any claims in the bond to a third party. 

  
 Article 5 Insurance 
  

	1.	The premises are Lessor’s property to be insured by Lessor. Lessee will be responsible for insuring its own chattel and equipment, without concern to Lessor.

  

 2 

	2.	Lessee shall take out public accident liability insurance in accordance with the regulations of the central competent authority and reimburse other occupants at its own expense for
any additional fire insurance premiums which result from the public accident liability insurance, if during the term of lease Lessee is to operate any of the items listed in the former part of Paragraph 1, Article 17 of the Apartment Building
Regulations. (Regulations governing such insurance, reimbursement and rate of insurance premiums will be determined by the central competent authority in conjunction with the Ministry of Finance.) 

  

	3.	Lessee must bear, pursuant to Paragraph 2, Article 17 of the Apartment Building Regulations, the premiums, reimbursement for shortfall, and other costs of the insurance which the
appointed personnel responsible for management or the management committee (Subparagraph (2), Paragraph 2, Article 8) has taken out on behalf of Lessee, should Lessee violate the obligation described in the preceding paragraph and still fail to take
out such insurance within a seven days’ prescribed time limit. 

  
 Article 6 Restrictions on the Use of the Premises 
  

	1.	The premises are made available to Lessee for office purposes and may not be used for any other purposes. 

  

	2.	Lessee shall not sublet, lend, transfer or otherwise make available by indirect means the premises, in whole or in part, to others for use, or assign the leasehold to others.

  

	3.	Lessee shall not engage in tax evasion, sale of contraband, or other wrongful business acts, nor may it store dangerous goods to the detriment of public safety.

  

	4.	No public lot or public equipment of the building, such as corridors and vacant lots, parking lot, public lavatories, machine room, outdoor passageways on the first floor, all
stairs, fire escapes, elevators, cisterns, lift lobbies and the surroundings etc. of the building, may be occupied by way of storage of objects, residence, or installation of equipment etc. The premises and all other facilities such as elevators,
water and electric meters, lighting fixtures, aluminum doors and windows, glass panes, iron gates, sanitation equipment, fire equipment, fire wall, gas equipment, and other ancillary equipment etc. of the building shall be kept intact without damage
or additional installation. 

  

	5.	 Lessor has reserved a location by the side of the entrance to the elevator on the first floor of the building, for erection of a standard signboard. Lessee shall
make such 

  

 3 

	 	 
signboard within the space and area allocated by Lessor. Lessee shall not put up any signboard or advertisement at any location outside or inside the
building absent the prior written consent of Lessor. 

  

	6.1	Lessor is responsible for maintenance of the overall structure and ancillary equipment of the premises (provided Lessee shall be responsible for repair if a joint inspection by
Lessor and Lessee confirms the damage is imputable to Lessee. Lessee is deemed to waive its right if it refuses to conduct the above inspection, in which event it shall be responsible for all matters relating to repair). 

  

	6.2	All execution of work, construction work, partitioning and renovation etc. within the premises as required by Lessee shall be subject to Lessee’s procurement of permits and
licenses from the relevant competent government authorities as well as Lessor’s written consent, prior to the commencement of work. All costs shall be solely borne by Lessee. Such work shall in no event damage the safety of the structure and
equipment of the original building. 

  

	6.3	Lessee may not construct any additional building or unlawful building during the term of lease. 

  

	6.4	If Lessee needs to modify, add or remove any of the water, power, HVAC and fire equipment on the premises, it shall procure by law permits and licenses from the relevant competent
government authorities, produce the design drawings to Lessor for written approval, and notify the service office of the building, prior to commencement of work. All costs will be solely borne by Lessee. 

  

	6.5	Lessee shall be solely liable if the renovation that it completes does not pass safety inspection, and further bear all costs pertaining to demolition, modification and compliance
with safety regulations. 

  

	6.6	Lessee shall notify Lessor in writing and procure Lessor’s approval and confirmation of the absence of any impact on the safety facilities of the building prior to taking any
safety measures or installing any security system etc. All costs will be solely borne by Lessee. 

  

	7.	Lessee shall not engage in business acts such as direct sale, or keep canine or other livestock on the premises. 

  

 4 

	8.	Lessor may terminate this Agreement at any time, without objection from Lessee, should Lessee violate any of the preceding seven paragraphs of this article and still fail to make
timely cure within the 30 days’ time limit prescribed by the relevant government authority or Lessor after inspection. All civil and criminal liabilities will further be assumed by Lessee, without concern to Lessor, if the above results in a
contravention of government laws and regulations by Lessee. Lessee must further compensate Lessor for all losses sustained from any government authority’s administrative decision against Lessor due to Lessee’s act.

  
 Article 7 Special Provisions 
  

	1.	The house tax and land value tax on the premises will be borne by Lessor. Lessee will assume all requisite business taxes and the VAT on rental. 

  

	2.1	Lessor may, subject to a prior notice to Lessee by telephone or in writing, inspect the premises at any time throughout the term of lease, to confirm whether the premises are being
legally and properly used in accordance with Articles 6.1 to 6.7. Lessee must cooperate in such inspection. 

  

	2.2	To maintain proper management of the building, Lessee agrees the building manager appointed by Lessor is responsible for all matters relating to the management of the building. The
cleaning fee, fire inspection fee, HVAC fee and maintenance fee, as well as all other fees payable for the management of the building, shall be shared by all tenants by the area they lease pro rata to the area of the building.

  

	3.	Lessee shall share the cost of maintenance of the existing fixed equipment of the building management company appointed by Lessor, pro rata to the area leased. Such company will
furnish a receipt for the payment. 

  

	4.	Lessee shall pay electricity charge according to the meter reading, by the general user fee schedule established by the power company. Water charge is payable by Lessee on a monthly
basis to the building manager appointed by Lessor, according to the reading of the meter, if any, or pro rata to the area leased in the absence of a meter (the proportion to be assumed is subject to agreement based on actual water consumption).
Air-conditioning charge will be calculated by the meter reading and payable on a monthly basis to the building manager appointed by Lessor. Notwithstanding, Lessee is responsible for the relevant consumables of the equipment solely used by Lessee.

  

 5 

	5.	If Lessee is in arrears with its payment of water and electricity charges, the cleaning fee, HVAC fee and maintenance fee, as well as other fees payable for the management of the
building up to an aggregate amount exceeding two rental installments or up to a substantial sum, Lessor may terminate this Agreement by law, in which event Lessee shall immediately evacuate unconditionally, without objection, and observe Article 10.

  

	6.1	Lessee shall not request to terminate the lease until one year after the commencement of the lease term, otherwise, Lessee shall still pay the agreed rental for the first year and,
in addition, pay Lessor a default penalty equivalent to three months’ rental. 

  

	6.2	Lessee shall pay Lessor a default penalty equivalent to three months’ rental of the particular year of lease if Lessee requests to terminate the lease one year after the
commencement of the lease term, provided such penalty shall be reduced to one month’s rental if Lessee has notified Lessor three months in advance of the contemplated termination. 

  

	6.3	Lessee is entitled to use two parking spaces of the basement parking lot for free during the term of lease, provided it shall comply with the parking lot regulations of the
building. Any violation of such regulations and failure to make cure as required in a written notice by Lessor will entitle Lessor to immediately recover the parking spaces. 

  

	6.4	Failure by Lessee to complete cure of its violation of Article 6 within one month as prescribed by Lessor will entitle Lessor to terminate this Agreement at any time. In such event,
Lessee shall revert the premises to their original state and compensate Lessor for all losses sustained and, in addition, pay Lessor an amount equivalent to three months’ rental as default compensation. 

  

	7.	Lessee may terminate this Agreement if use of the premises is affected by the destruction, damage or loss of the premises or the affiliated building, in whole or in part, due to
force majeure such as an act of God, government act, or other circumstance that is not attributed to Lessee’s gross negligence. In such event, Lessor shall immediately return to Lessee the rental prepaid by Lessee but remaining unused,
and the performance bond, in full. 

  

	8.	 The premises shall have been reverted to their original state and cleared of waste by Lessee by the time of evacuation. Any abandoned objects, miscellaneous items
etc. such as a signboard under Article 6.5 or facility, work or partition under Article 6.6 that is not removed, will be deemed discarded to be treated by Lessor at its sole discretion. 

  

 6 

	 	 
The cost of such treatment shall be borne by Lessee and may be deducted from the performance bond, with no objection from Lessee.

  

	9.	Upon evacuation, Lessee shall not claim any relocation fee or otherwise from Lessor for any reason, or claim refund by Lessor of the performance bond as an excuse for surrender of
premises, save in the event of a breach of contract by Lessor. 

  

	10.	Should Lessee delay in surrendering, or refuse to surrender, the premises on any pretext when required to upon the expiration of this Agreement where no renewal is consummated, it
shall pay a default penalty equivalent to the agreed monthly rental under this Agreement for the first month of delay, twice the agreed monthly rental under this Agreement for the second month of delay, and thrice the agreed monthly rental under
this Agreement for the third month of delay. Should Lessee still fail to evacuate from and surrender the premises in the fourth month, it shall, from such month onwards, pay a default penalty on a monthly basis that is thrice the monthly rental. If
Lessee refuses to pay the above, Lessor may deduct the above payment from the performance bond and claim damages against Lessee by law for non-performance, and Lessee shall still revert the premises to their original state and surrender the same to
Lessor in a timely fashion. 

  
 Article 8 Risk Sharing

  
 Lessee shall use the premises with the care of a good administrator, and
shall make compensation in the event of destruction or damage of the premises due to the willful misconduct or negligence of any employee of Lessee or person hired by Lessee. 
  
 Article 9 Evacuation 
  
 Lessee shall, upon the expiration or termination of the lease, immediately evacuate, revert the premises to their original state, clear all the waste and, after the
confirmation of delivery in conjunction with Lessor, hand the premises back to Lessor; Lessee shall further settle payment of rental, default penalty, damages and all other fees. Lessor may deduct any outstanding payment from the performance bond,
without objection from Lessee. 
  
 Article 10 
  
 The parties agree to refer any lawsuit and dispute in connection with this Agreement to the
Tainan District Court, Taiwan as the court of first instance. 
  

 7 

 Article 11 
  
 Issues not addressed by this Agreement will be governed by applicable laws and regulations such as the Civil Code provisions governing lease, the Building Code, and
Apartment Building Regulations. 
  
 Article 12 
  
 This Agreement must be notarized by court. The parties shall share the notarization fee
equally. 
  
 Article 13 
  
 This Agreement is made in triplicate, with Lessor, Lessee and the notarization office of the
district court each holding one counterpart as evidence. 
  
 Article 14

  
 Enforcement matters are as described in the notarization. 
  

 8 

 SIGNED BY: 
  

			
	 Lessor
	  	Lessee
		
	 Name:
 Shin Kong Life Insurance Co., Ltd. (sealed)
	  	 Name:
 Himax Technologies Limited
(sealed)

		
	 Responsible Person:
 Wu Dong-jin (sealed)
	  	 Responsible Person:
 Wu Jordan

		
	 Agent:
 Yang Shu-fen (signed and sealed)
	  	 Agent:
 Li Chun-da (signed and
sealed)

		
	 Company ID No.:
 03458902
	  	 Company ID No.:
 16130970

		
	 Address:
 31F-43F, 66, Section 1 Zhongxiao West Road,
 Taipei
	  	 Invoice Address:
 1F, 12, Tainan Science Park Eighth
Road,
 Shanhua, Tainan County, Tainan
 Science-based Industrial
Park

		
	 	  	 Mailing Address:
 Same as invoice
address

		
	 	  	Telephone: (06) 505-0880 Manager Cai

  
 (Seal of notary public) 
  

 9 

  
 Appendix 1 Diagram 1 
  
 [Omitted] 
  

 10 

  
 Appendix 2 Diagram 2 
  
 [Omitted] 
  

 11 

  
 RIDER

  
 This Rider is made as of October     , 2005 by
and between the following parties: 
  
 Lessor: Shin Kong Life Insurance Co., Ltd.;
and 
  
 Lessee: Himax Technologies Limited, 
  
 with respect to the following amendments to the lease agreement between Lessor and Lessee
[Premises: 3F, 4F, 5F, 6F, 8F, 9F, 10F, 605 Zhongshan Road, Xinhua, Tainan County, with a total area of 796.9 pings]: 
  

	1.	Article 2.1 (Term): The original lease is a term of one year and four months from August 16, 2004 to December 31, 2005. It is hereby extended for nine months from
January 1, 2006 to September 31, 2006 

  

	2.	The rest of the provisions of the lease agreement shall remain unchanged save in the event of other riders to the lease agreement. 

  
 SIGNED BY: 
  

			
	 Lessor
	  	Lessee
		
	 Name:
 Shin Kong Life Insurance Co., Ltd. (sealed)
	  	 Name:
 Himax Technologies Limited
(sealed)

		
	 Responsible Person:
 Wu Dong-jin (sealed)
	  	 Responsible Person:
 Wu Jordan
(sealed)

		
	 Company ID No.:
 03458902
	  	 Company ID No.:
 16130970

		
	 Address:
 31F-43F, 66, Section 1 Zhongxiao West Road, Taipei
	  	 Mailing Address:
 1F, 12, Tainan Science Park Eighth
Road,
 Shanhua, Tainan County, Tainan
 Science-based Industrial
Park

		
	 	  	Telephone: (06) 505-0880 Manager Cai

  

 12

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