Common use of Loading Commitments Clause in Contracts

Loading Commitments. TSMC and Philips both will strive to load SSMC as much as possible. In this respect, it is agreed that if either TSMC or Philips concludes in respect of any particular year that its Group will not be able to load its capacity obligation for - 15 - SSMC Shareholders Agreement 15 March 1999 any reason, it will promptly notify the CEO of SSMC. In that event the CEO will offer the capacity not utilized by that one Group to the other Group. Each of TSMC and Philips will ensure that its Group representative will respond to such notification by the CEO of SSMC without delay. TSMC and Philips further agree that in respect of each year after the initial ramp-up period they and their respective Groups each will have the obligation to provide load to SSMC for minimum volumes equal to at least 70% of their respective rights on SSMC’s annual capacity as determined in respect of each such year on the basis of the capacity calculations elaborated in Annex A. In case total capacity usage in any particular year after initial ramp-up falls below 70% of total available capacity as determined on the basis of the capacity calculations elaborated in Annex A, a cost compensation scheme will be applicable which will provide full coverage for all unavoidable costs directly associated with any shortfall in respect of the agreed 70% of total available capacity as incurred by SSMC (“the Unavoidable Shortfall Costs”). Unless otherwise proposed and agreed in good faith upon reasonable consideration of all pertinent elements, shortfall cost compensation payment will be due and payable by TSMC and/or Philips, as the case may be, to the extent for any reason TSMC Group and/or Philips Group did not meet their respective loading obligations (i.e. Philips 70% of 60%, and TSMC 70% of 40%), but never for an aggregate amount higher than needed to cover the total amount of the Unavoidable Shortfall Costs. Annex B to this Agreement shall provide the Rules as regards the calculation of shortfall compensation payments.

Loading Commitments. TSMC and Philips both will strive to load SSMC as much as possible. In this respect, it is agreed that if either TSMC or Philips concludes in respect of any particular year that its Group will not be able to load its capacity obligation for - 15 - SSMC Shareholders Agreement 15 March 1999 any reason, it will promptly notify the CEO of SSMC. In that event the CEO will offer the capacity not utilized by that one Group to the other Group. Each of TSMC and Philips will ensure that its Group representative will respond to such notification by the CEO of SSMC without delay. TSMC and Philips further agree that in respect of each year after the initial ramp-up period they and their respective Groups each will have the obligation to provide load to SSMC for minimum volumes equal to at least 70% of their respective rights on SSMC’s annual capacity as determined in respect of each such year on the basis of the capacity calculations elaborated in Annex A. In case total capacity usage in any particular year after initial ramp-up falls below 70% of total available capacity as determined on the basis of the capacity calculations elaborated in Annex A, a cost compensation scheme will be applicable which will provide full coverage for all unavoidable costs directly associated with any shortfall in respect of the agreed 70% of total available capacity as incurred by SSMC (“the Unavoidable Shortfall Costs”). Unless otherwise proposed and agreed in good faith upon reasonable consideration of all pertinent elements, shortfall cost compensation payment will be due and payable by TSMC and/or Philips, as the case may be, to the extent for any reason TSMC Group and/or Philips Group did not meet their respective loading obligations (i.e. Philips 70% of 60%, and TSMC 70% of 40%), but never for an aggregate amount higher than needed to cover the total amount of the Unavoidable Shortfall Costs. Annex B to this Agreement shall provide the Rules as regards the calculation of shortfall compensation payments.