ON SEMICONDUCTOR CORP
EXHIBIT 10.8
<DOCUMENT>
<TYPE>EX-10.8
<SEQUENCE>15
<FILENAME>p66835exv10w8.txt
<DESCRIPTION>EXHIBIT 10.8
<TEXT>
<PAGE>
                                                                    Exhibit 10.8






                             JOINT VENTURE CONTRACT




                                       FOR




                  LESHAN-PHOENIX SEMICONDUCTOR COMPANY LIMITED







                           (AMENDED ON JUNE 25, 2002)
<PAGE>
                                TABLE OF CONTENTS


<TABLE>
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<S>                                                                         <C>
PRELIMINARY STATEMENT.....................................................    1

ARTICLE 1 - DEFINITIONS AND INTERPRETATION................................    1

ARTICLE 2 - PARTIES TO THE CONTRACT.......................................    3

ARTICLE 3 - ESTABLISHMENT OF THE JOINT VENTURE COMPANY....................    5

ARTICLE 4 - PURPOSE, SCOPE AND SCALE OF PRODUCTION........................    6

ARTICLE 5 - TOTAL AMOUNT OF INVESTMENT AND REGISTERED CAPITAL.............    6

ARTICLE 6 - RESPONSIBILITIES OF THE PARTIES...............................   11

ARTICLE 7 - TECHNOLOGY AND TRADEMARKS.....................................   12

ARTICLE 8 - SALE OF JOINT VENTURE PRODUCTS................................   13

ARTICLE 9 - BOARD OF DIRECTORS............................................   15

ARTICLE 10 - OPERATION AND MANAGEMENT.....................................   17

ARTICLE 11 - SITE.........................................................   19

ARTICLE 12 - MATERIALS, EQUIPMENT AND SERVICES............................   19

ARTICLE 13 - LABOR MANAGEMENT.............................................   20

ARTICLE 14 - FINANCIAL AFFAIRS AND ACCOUNTING.............................   21

ARTICLE 15 - TAXATION AND INSURANCE.......................................   24

ARTICLE 16 - CONFIDENTIALITY..............................................   25

ARTICLE 17 - JOINT VENTURE TERM...........................................   26

ARTICLE 18 - TERMINATION AND LIQUIDATION..................................   26

ARTICLE 19 - BREACH OF CONTRACT...........................................   31

ARTICLE 20 - FORCE MAJEURE................................................   31

ARTICLE 21 - SETTLEMENT OF DISPUTES.......................................   32

ARTICLE 22 - APPLICABLE LAW...............................................   33

ARTICLE 23 - MISCELLANEOUS PROVISIONS.....................................   34
</TABLE>


Appendices

      A     List of the Joint Venture Products
      B     Schedule of Capital Contributions


                                       i
<PAGE>
                             JOINT VENTURE CONTRACT

            THIS Amended JOINT VENTURE CONTRACT (this "Contract") is made in
Phoenix, Arizona, U.S.A. on the 25th day of June, 2002 among LESHAN RADIO
COMPANY LTD., an enterprise legal person established and existing under the laws
of the People's Republic of China with its legal address at 27 West People's
Road, Leshan, Sichuan Province 614000, People's Republic of China ("Party A"),
MOTOROLA (CHINA) INVESTMENT LIMITED, a company established and existing under
the laws of People's Republic of China, with its legal address at No. 108 Jian
Guo Road, Chao Yang District, Beijing 100022, People's Republic of China ("Party
B"), and SCG (CHINA) HOLDING CORPORATION, a company established and existing
under the laws of the State of Delaware, U.S.A., with its legal address at 5005
East McDowell Road, Phoenix, Arizona 85008, U.S.A. ("Party C"). Each of Party A,
Party B and Party C shall hereinafter individually be referred to as a "Party"
and collectively as the "Parties".

                              PRELIMINARY STATEMENT

            WHEREAS, Party A, Party B and Party C are parties to the restated
Joint Venture Contract dated September 6, 1999, for the establishment of
Leshan-Phoenix Semiconductor Company Limited (the "Company") and desire that,
when this Contract becomes effective in accordance with its terms and
conditions, such Joint Venture Contract shall be amended and restated in its
entirety by this Contract;

            WHEREAS, Party A, Party B and Party C desire that the Company add IC
and Discrete Wafer Fab products to the scope of its business ("New Products");

            NOW THEREFORE, after friendly consultations conducted in accordance
with the principle of equality and mutual benefit, the Parties have agreed to
amend the Amended and Restated Joint Venture Contract of 1999 as follows:

                   ARTICLE 1 - DEFINITIONS AND INTERPRETATION

1.01  Definitions

      Unless the terms or context of this Contract otherwise provide, the
      following terms shall have the meanings set out below:

      (a)   "Motorola" means Party B or any of its Affiliates.

      (b)   "Affiliate" means, in relation to Party A, any enterprise or other
            entity which, directly or indirectly, is controlled by Party A; the
            term "control" meaning ownership of fifty percent (50%) or more of
            the registered capital or the power to appoint the general manager,
            factory chief or other principal person in charge of an enterprise
            or other entity.

            "Affiliate" means, in relation to Party B or Party C, any company
            which, through ownership of voting stock (shares) or otherwise,
            directly or indirectly, is controlled by, under common control with,
            or in control of, Party B or Party C, as the case may be; the term
            "control" meaning ownership of fifty percent (50%) or more of the
            voting stock (shares) of a company, or the power to appoint or elect
            a majority of the directors of a company, or the power to direct the
            management of a company.


                                       1                  JOINT VENTURE CONTRACT
<PAGE>
            For purposes of this Contract, the Company shall not be deemed as an
            Affiliate of any Party hereto.

      (c)   "Articles of Association" means the Articles of Association of the
            Company executed on March 1, 1995 and as amended and restated.

      (d)   "Board" and "Board of Directors" mean the board of directors of the
            Company.

      (e)   "Business License" means the business license of the Company issued
            by the SAIC dated March 28, 1995 and any amendment to or renewal,
            replacement or extension of such license.

      (f)   "China" and "PRC" mean the People's Republic of China excluding Hong
            Kong, Macau and Taiwan for purposes of this Contract.

      (g)   "Company" means Leshan-Phoenix Semiconductor Company Limited.

      (h)   "Effective Date" means the effective date of this Contract, which
            shall be the date on which this Contract and the Articles of
            Association have been approved by the Examination and Approval
            Authority without varying their terms or imposing any additional
            conditions, unless otherwise agreed by the Parties in writing.

      (i)   "Examination and Approval Authority" means the authority entrusted
            by the Chinese government to approve this Contract, the Appendices
            attached hereto and the Articles of Association.

      (j)   "Export-oriented Enterprise" means the status of the Company to be
            granted by the Examination and Approval Authority under PRC law.

      (k)   "Feasibility Study" means the Feasibility Study Report dated
            November 4, 1994 regarding the feasibility of the joint venture and
            the establishment of the Company, together with the Capital Increase
            and Expansion Plan for the Wafer Fab Products dated June 2002.

      (l)   "Joint Venture Products" means the products listed in Appendix A
            attached hereto and any other similar, related or complementary
            products that the Board approves for production by the Company.

      (m)   "Joint Venture Term" means the term of this Contract as set forth in
            Article 17.01 hereof including any extensions of such term pursuant
            to Article 17.02 hereof.

      (n)   "Land Use Rights Grant Contract" means the relevant contract or
            contracts for the grant of the land use rights over the Site between
            the Company and the Municipality of Leshan.

      (o)   "Management Personnel" means the Company's General Manager, Deputy
            General Manager and other management personnel designated by the
            Board.

      (p)   "ON" means Party C or any of its Affiliates.


                                       2                  JOINT VENTURE CONTRACT
<PAGE>
      (q)   "Plant" means the Company's manufacturing facilities located at the
            Site where the Joint Venture Products will be produced.

      (r)   "Renminbi" or "RMB" means the lawful currency of China.

      (s)   "SAFE" means the State Administration of Foreign Exchange of the
            People's Republic of China and/or a local branch thereof, as
            appropriate to the context.

      (t)   "SAIC" means the State Administration for Industry and Commerce of
            the People's Republic of China and/or a local branch thereof, as
            appropriate to the context.

      (u)   "Services Contract" means the contract for the provision of services
            between the Company and Party A.

      (v)   "Site" means the parcels of land located in Leshan, Sichuan
            Province, on which the facilities of the Company are situated.

      (w)   "Technologically Advanced Enterprise" means the status of the
            Company to be granted by the Chinese government under PRC law

      (x)   "Technology" has the meaning as defined in the Technology License
            Contract, as amended.

      (y)   "Technology License Contract" means the technology license contract
            dated February 24, 1995 as amended so far under which the Company is
            the licensee.

      (z)   "Third Party" means any entity or person other than the Parties or
            their Affiliates.

      (aa)  "United States Dollars" or "US$" means the lawful currency of the
            United States of America.

      (bb)  "Working Personnel" means all employees and staff of the Company,
            other than the Management Personnel.

      (cc)  "Wafer Fab Products" means the wafer fab products as listed in
            Appendix A.

1.02  Interpretation

      Article headings are inserted for the purposes of convenience and
      reference only and shall not affect the interpretation or construction of
      this Contract. Words denoting the singular shall, where applicable,
      include the plural and vice versa. Reference to the masculine gender
      shall, where applicable, include the feminine gender and the neuter gender
      and vice versa.

                      ARTICLE 2 - PARTIES TO THE CONTRACT

2.01  The Parties

      The Parties to this Contract are:


                                       3                  JOINT VENTURE CONTRACT
<PAGE>
      (a)   Party A, Leshan Radio Company, Ltd., a Chinese limited liability
            company registered in Leshan, Sichuan Province, China, with its
            legal address at 27 West People's Road, Leshan, Sichuan Province,
            China.

            Legal Representative of Party A:

            Name:          Mr. Pan Min-Zhi
            Position:      Chairman of the Board
            Nationality:   Chinese

      (b)   Party B, Motorola (China) Investment Limited, a company established
            and existing under the laws of the PRC, with its legal address at
            No. 108 Jian Guo Road, Chao Yang District, Beijing 100022, People's
            Republic of China.

            Legal Representative of Party B:

            Name:          Mr. Pin Yong Lai
            Position:      Chairman of the Board
            Nationality:   Malaysia

      (c)   Party C, SCG (China) Holding Corporation, a company established and
            existing under the laws of the State of Delaware, U.S.A., with its
            legal address at 5005 McDowell Road, Phoenix, Arizona 85008, U.S.A.

            Legal Representative of Party C:

            Name:          Henry Leung
            Position:      Chairman of the Board
            Nationality:   American

2.02  Representations, Warranties and Undertakings

      (a)   Each of Party A, Party B and Party C hereby represents, warrants and
            undertakes to the other Parties that, as of the date of execution
            hereof and as of the Effective Date:

            (i)         it is duly organized, validly existing and in good
                        standing under the laws of the place of its
                        establishment or incorporation;

            (ii)        it has all requisite power, authority and approval
                        required to enter into this Contract and upon the
                        Effective Date will have all requisite power, authority
                        and approval to perform fully each and every one of its
                        obligations hereunder;

            (iii)       it has taken all action necessary to authorize it to
                        enter into this Contract and such Party's representative
                        whose signature is affixed hereto is fully authorized in
                        writing to sign this Contract and to bind such Party
                        thereby;

            (iv)        upon the Effective Date, this Contract shall constitute
                        its legal, valid and binding obligation;


                                       4                  JOINT VENTURE CONTRACT
<PAGE>
            (v)         neither the execution of this Contract, nor the
                        performance of such Party's obligations hereunder, will
                        conflict with, or result in a breach of, or constitute a
                        default under, any provision of its business license or
                        articles of association, or any law, rule, regulation,
                        authorization or approval of any government agency or
                        body, or of any contract or agreement to which it is a
                        party or is subject; and

            (vi)        all material documents, statements and information of or
                        provided by any governmental body in its possession
                        relating to the transactions contemplated in this
                        Contract have been disclosed to the other Parties, and
                        no document previously provided by it to the other
                        Parties contains any untrue statement of material fact.

      (b)   If any Party does not perform the above undertakings and
            representations, it shall be considered a breach of this Contract.

      (c)   At the time of the execution of this Contract, each Party shall
            provide the other Parties with a certified copy of its business
            license.

2.03  Change of Legal Representative

      Each Party shall have the right to change its legal representative and
      shall promptly notify the other Parties of such change and the name,
      position and nationality of its new legal representative.

             ARTICLE 3 - ESTABLISHMENT OF THE JOINT VENTURE COMPANY

3.01  Name and Address of the Company; Branches

      (a)   The name of the Company shall be "?????????????????" in Chinese, and
            "Leshan-Phoenix Semiconductor Company Limited" in English.

      (b)   The legal address of the Company shall be 27A West People's Road,
            Leshan, Sichuan Province, China.

      (c)   In accordance with its business needs, the Company may establish
            branch offices within or outside China upon the decision of the
            Board and approval by the relevant governmental authorities.

3.02  Limited Liability Company

      The form of organization of the Company shall be a limited liability
      company. Except as otherwise provided herein, once a Party has paid in
      full its contribution to the registered capital of the Company, it shall
      not be required to provide any further funds to or on behalf of the
      Company by way of capital contribution, loan, advance, guarantee or
      otherwise unless the Parties mutually agree otherwise. Creditors of the
      Company shall have recourse only to the assets of the Company and shall
      not seek repayment from any of the Parties. The Company shall indemnify
      the Parties against any and all losses, damages, or liabilities suffered
      by the Parties in respect of any Third Party claims arising out of the
      operation of the Company. Subject to the above, the profits, risks and
      losses of the Company shall be shared by the Parties in proportion to
      their respective contributions to the Company's registered capital.


                                       5                  JOINT VENTURE CONTRACT
<PAGE>
3.03  Laws and Decrees

      The Company shall be a legal person under the laws of China. The
      activities of the Company shall be governed and protected by the laws,
      decrees and relevant rules and regulations of China.

3.04  Code of Conduct

      The Company and its employees shall comply with a Code of Conduct adopted
      by the Board of Directors. The Code of Conduct shall be substantially
      similar to the Code of Conduct of Party A, Party B or Party C, whichever
      is more strict, and shall be fully consistent with relevant Chinese laws.

               ARTICLE 4 - PURPOSE, SCOPE AND SCALE OF PRODUCTION

4.01  Purpose

      The Parties have agreed that the purposes of the Company will be
      manufacturing low cost and high efficiency semi-conductor components and
      products that meet world-wide quality standards by using advanced and
      suitable technology and scientific management methods, to satisfy the
      increasing global market demand and achieve a satisfactory return on
      investment.

4.02  Scope of Business

      The Company will engage in the development, design, manufacture, assembly
      and testing of Integrated Circuit ("IC") and Discrete semiconductor
      products and related products, the sale of products produced by the
      Company and the provision of after-sales service with respect to such
      products.

4.03  Scale of Production

      It is anticipated by the Parties that the annual production capacity of
      the Company at the completion of all investment phases will reach 28.5
      billion units of miniature surface mount IC packages and 728,000 6-inch IC
      and Discrete wafers. The Board of Directors of the Company shall have
      complete autonomy in the formulation and execution of the Company's
      production policies in order to achieve these goals, and may expand or
      reduce the Company's scale of production in accordance with market demands
      and the Company's business situation.

         ARTICLE 5 - TOTAL AMOUNT OF INVESTMENT AND REGISTERED CAPITAL

5.01  Total Investment

      The total amount of investment will be Five Hundred Nine Million Three
      Hundred Thousand United States Dollars (US$$509.3 million). This
      investment shall be made in phases, subject to market conditions and the
      business operations of the Company, as the Board shall decide from time to
      time. If the Company is successful, the Parties hope to increase further
      their investment, but any such increase will need to be finalized and
      approved in the future by the Board and the Examination and Approval
      Authority .


                                       6                  JOINT VENTURE CONTRACT
<PAGE>
5.02  Registered Capital

      The total amount of registered capital will be One Hundred One Million
      Eight Hundred and Sixty Thousand United States Dollars (US$101.86
      Million).

5.03  Contributions to Capital

      (a)   Party A's contribution to the registered capital of the Company
            shall be Thirty-Nine Million Seven Hundred Twenty-Five Thousand and
            Four Hundred United States Dollars (US$39,725,400), representing a
            thirty-nine percent (39%) share of the registered capital of the
            Company. Party A's contribution to the registered capital shall
            include Thirty-Eight Million Three Hundred Sixty Thousand and Four
            Hundred Seventy-Seven United States Dollars (US$38,360,477) in cash,
            equipment valued at Four Hundred Eighty-Three Thousand Nine Hundred
            and Twenty-Three United States Dollars (US$483,923), the land use
            rights of a parcel of land located at No. 27, West People's Road,
            the total area of which is 26,853.80 square meters and is valued at
            Seven Hundred Twenty-One Thousand United States Dollars
            (US$721,000), and additional land use rights and the building
            thereon located at No. 27, West People's Road and currently used for
            Expatriate Apartments valued at One Hundred Sixty Thousand United
            States Dollars (US$160,000).

      (b)   Party B's contribution to the registered capital of the Company
            shall be Ten Million One Hundred Eighty-Six Thousand United States
            Dollars (US$10,186,000), representing a ten percent (10%) share of
            the registered capital of the Company.

      (c)   Party C's contribution to the registered capital of the Company
            shall be Fifty-One Million Nine Hundred Forty-Eight Thousand and Six
            Hundred United States Dollars (US$51,948,600), representing a
            fifty-one percent (51%) share of the registered capital of the
            Company.

      (d)   The unpaid registered capital amount as of the date hereof will be
            paid by installment contribution in accordance with Appendix B.

5.04  Payment of Registered Capital and Conditions Precedent thereto

      (a)   Subject to Article 5.04(c) below, each Party shall make its
            contribution to the registered capital of the Company in accordance
            with the schedule set forth in Appendix B.

      (b)   In the event that a Party fails to make its capital contribution, in
            whole or in part, in accordance with the provisions of Article
            5.04(a) and Appendix B, such Party shall be liable to pay liquidated
            damages to the Company in the form of simple interest on the unpaid
            amount from the time due until the time paid at the rate of two
            percent (2%) above the six-month London Interbank Offered Rate
            (LIBOR) for United States Dollars up to a maximum of US$200,000.00.
            Notwithstanding the above provisions of this Article 5.04 (a), if
            the failure of a Party to make its capital contribution, in whole or
            in part, is not remedied within thirty (30) days of notice from any
            other Party, said other


                                       7                  JOINT VENTURE CONTRACT
<PAGE>
            Party shall have the right to terminate this Contract pursuant to
            Article 18.01(c)(ix) hereof.

      (c)   The Parties shall have no obligation to make capital contributions
            in accordance with Appendix B until the occurrence of the Effective
            Date. The capital contributions to be made by the Parties under this
            Contract shall be reduced by the amount of any distributable profits
            that are not distributed to the Parties as dividends, and such
            profits may be reinvested in the business of the Company as
            determined by the Board.

5.05  Investment Certificate

      After each Party's installment contribution to the registered capital has
      been made, a Chinese registered accountant shall verify the contribution
      and issue a contribution verification report. Thereupon, the Company shall
      issue an investment certificate to each Party signed by the Chairman and
      the Vice Chairman of the Board.

5.06  Assignment of Registered Capital

      (a)   Each Party hereto undertakes to the other Parties and to the Company
            that it shall not assign, sell, transfer or otherwise dispose of all
            or any part of its interest in the registered capital of the Company
            or its rights, obligations and benefits under this Contract unless
            (i) each of the other Parties hereto shall have consented in writing
            to such assignment, sale, transfer or disposition or (ii) such
            assignment, sale, transfer or disposition complies with the terms of
            this Article 5.06.

      (b)   When one Party (the "Disposing Party") wishes to sell, assign or
            otherwise dispose of all or part of its share of the registered
            capital (the "Offered Share"), it shall notify each of the other
            Parties (the "Non-Disposing Parties") in writing (the "Transfer
            Notice") of the identity of the proposed purchaser and provide each
            Non-Disposing Party a copy of the offer including all of the
            proposed terms and conditions of such sale, assignment or disposal.
            The Transfer Notice shall include a statement confirming that there
            is no supplementary consideration not stated in the offer. The
            Non-Disposing Parties shall have a preemptive right to purchase all
            but not part of such Offered Share in proportion to their respective
            equity interests in the Company on terms and conditions no less
            favorable to the Disposing Party than those specified in the
            Transfer Notice.

      (c)   The Non-Disposing Parties may exercise their preemptive right by
            giving notice to the Disposing Party of their intention to purchase
            the Offered Share within 30 days after receipt of the Transfer
            Notice ("Option Exercise Period"). Upon issuance of such notice, the
            Parties shall execute such documents as are required to effect the
            transfer. The purchase shall be made within 30 days after receipt of
            any required government approvals of the transfer.

      (d)   If one Non-Disposing Party does not exercise the option within the
            Option Exercise Period or fails to make payment for its share of the
            Offered Share within the time provided in subsection (c), the other
            Non-Disposing Party shall have the option to purchase such share by
            giving notice to the Disposing Party


                                       8                  JOINT VENTURE CONTRACT
<PAGE>
            within 30 days thereafter. If such other Non-Disposing Party does
            not wish to purchase such share or if both of the Non-Disposing
            Parties should fail to exercise their preemptive right, the
            Disposing Party may sell all but not part of the Offered Share to
            the proposed purchaser at a price not less than that provided in the
            Transfer Notice. The Disposing Party shall provide each of the
            Non-Disposing Parties with a copy of any executed written equity
            transfer agreement with the purchaser.

      (e)   It shall be a condition precedent to the right of any Party to
            transfer any of its registered capital that (i) the transfer shall
            be done in accordance with Chinese law, (ii) the transferee agrees
            to be bound by and entitled to the obligations and benefits of this
            Contract as if an original party hereto; and (iii) neither the
            business of the Company nor the performance of its contracts shall
            be interrupted, nor shall its organizational structure be affected
            by any such sale, assignment or other disposal of such registered
            capital. Notwithstanding the foregoing, unless the written consent
            of the Disposing Party is obtained, upon any assignment, sale or
            other disposal of the Disposing Party's entire interest in the
            registered capital of the Company, the Company shall remove from its
            name all references to the name of the Disposing Party and shall
            cease using all packaging, letterhead, stationery, promotional and
            advertising materials and other items which contain any reference to
            the name of the Disposing Party.

      (f)   Subject to the satisfaction of the terms and conditions set forth in
            this Article 5.06, the Parties shall cause their directors appointed
            to the Board to approve any sale, assignment or other disposal of
            registered capital hereunder. Any such sale, assignment or other
            disposal shall, to the extent required by law, be submitted to the
            Examination and Approval Authority for examination and approval.
            Upon receipt of the approval of the Examination and Approval
            Authority, the Company shall register the change in ownership with
            the SAIC.

      (g)   The provisions on assignment set forth in this Article 5.06 shall
            not apply to any sale or assignment of registered capital by any
            Party to any of its Affiliates, and the other Parties shall be
            deemed to have consented to, and the Parties shall cause their
            directors appointed to the Board to approve, any such sale or
            assignment. Any such sale or assignment shall, to the extent
            required by law, be submitted to the Examination and Approval
            Authority for examination and approval. Upon receipt of such
            approval, the Company shall register the change in ownership with
            the SAIC.

      (h)   The share of the registered capital owned by Party B and Party C
            shall not, in the aggregate, be lower than 25% of the registered
            capital of the Company.

5.07  Encumbrance of Investment

      No Party shall mortgage, pledge, charge or otherwise encumber all or any
      part of its contribution to the Company's registered capital without the
      prior written consent of the other Parties.

5.08  Increase of Registered Capital and Additional Financing


                                       9                  JOINT VENTURE CONTRACT
<PAGE>
      (a)   Any increase in the registered capital of the Company must be
            approved by a unanimous vote of the members of the Board present in
            person or by proxy at a duly constituted meeting thereof and
            submitted to the Examination and Approval Authority for examination
            and approval. Upon receipt of the approval of the Examination and
            Approval Authority, the Company shall register the increase in
            registered capital with the local branch of the SAIC. Unless
            otherwise agreed by the Parties, any increase in the registered
            capital shall be made by the Parties in the same proportion as their
            respective then-existing interests in the registered capital of the
            Company. The agreement on any capital increase may specify the time
            limits for payment of such capital increase. If any Party fails to
            contribute its share of the capital increase within the time limits
            set out therein, such Party shall pay interest to the Company on the
            amount of the overdue contribution at the rate of two percent (2%)
            above the six-month LIBOR for United States Dollars as in effect on
            the date such contribution is due. Such interest shall be payable
            monthly in arrears from and including the date on which such
            contribution is due and to but excluding the date on which such
            contribution (together with all interest accrued thereon) is paid in
            full.

      (b)   In the event that any Party fails to make its registered capital
            contribution (or any portion thereof) as provided herein or fails to
            provide its share of any increase in the Company's registered
            capital as described in (a) above, then in addition to any other
            rights the Company may have against the defaulting Party, the
            Company may offer such portion to the non-defaulting Parties in
            proportion to the ratio of their respective interests in the
            registered capital of the Company. Such offer to provide a portion
            of any increase in the registered capital as described in this
            paragraph requires approval by the Examination and Approval
            Authority.

      (c)   The Company shall fund the difference between the total amount of
            investment and registered capital through long-term loans obtained
            from financial institutions. If the Company cannot obtain all or a
            portion of the required loans on the strength of its own credit,
            then each of the Parties, either directly or through an Affiliate,
            shall raise loans for the Company in the same proportion as their
            respective contributions to the registered capital. If any Party is
            unable to raise loans in the proportion applicable to such Party,
            the other Parties shall consider helping arrange for such loans. The
            Board shall decide the specific timing and amounts of the Company's
            loans. Loans shall bear interest at the actual loan interest rate,
            following confirmation by the Board. Such loans shall be repaid by
            the Company on a pari passu basis in accordance with the decision of
            the Board based upon the Company's ability to repay without
            endangering the financial stability of the Company. The Company may
            fund the difference between the total amount of investment and
            registered capital through overseas loans obtained from financial
            institutions.

      (d)   In the future, the Company may obtain additional financing by
            utilizing its own internal funds, through loans from sources in
            China or outside China, or through increased investment by the
            Parties.

                                       10                 JOINT VENTURE CONTRACT
<PAGE>
                  ARTICLE 6 - RESPONSIBILITIES OF THE PARTIES

6.01  Responsibilities of Party A

      In addition to its other obligations under this Contract, Party A shall
      have the following responsibilities:

      (a)   assist the Company in obtaining all necessary approvals, permits and
            licenses for the operation of the Company;

      (b)   assist the Company in liaising with the relevant authorities to
            effectively procure the external water supply, fuel supply, power
            supply, transportation, communications, and other services required
            for the Plant at the most preferential prices available;

      (c)   assist the Company in obtaining raw materials from sources in China;

      (d)   assist the Company in opening Renminbi and foreign currency bank
            accounts and in obtaining Renminbi loans when necessary;

      (e)   assist the Company in arranging for the transportation of imported
            equipment and materials between ports in China and the Plant;

      (f)   assist with the procedures for applying for and procuring licenses,
            and on carrying out all customs procedures, for the import of
            machinery, equipment, materials, supplies and office equipment;

      (g)   assist the expatriate employees of the Company to obtain all
            necessary entry visas and work permits;

      (h)   assist the Company in recruiting various types of qualified Chinese
            personnel;

      (i)   assist the Company in obtaining the Certificate of Authentication of
            its status as an "Integrated Circuit (IC) Manufacturing Enterprise"
            permitting the Company to be entitled to all the Value-Added Tax
            ("VAT") and other investment incentives as provided for by the
            governments including in State Council Document No. (2000) 18 on
            Policies to Encourage the Development of the Software and Integrated
            Circuit (IC) Industries dated on June 24, 2000 and in policies
            promulgated by the Sichuan Provincial Government;

      (j)   assist the Company in obtaining approval of its status as a
            Technologically Advanced Enterprise and/or Export-oriented
            Enterprise and securing the appropriate confirmation certificates;
            thus permitting the Company to enjoy the preferential tax treatment
            and other benefits available to such enterprises under the current
            and future government sponsored programs including programs
            promulgated under the western region modernization policies;

      (k)   assist the Company to obtain access to sources of foreign exchange;

      (l)   assist the Company to apply for and obtain approval from the Customs
            that the Company's factory and all other facilities will be treated
            as a bonded factory or warehouse in accordance with Chinese legal
            regulations;


                                       11                 JOINT VENTURE CONTRACT
<PAGE>
      (m)   assist the Company in applying for and obtaining any other most
            preferential tax treatment and other investment incentives available
            under applicable laws and regulations, in addition to those listed
            in this Article 6.01;

      (n)   assist the Company in getting duty and VAT exemption that may be
            available on all self-used materials and equipment; and

      (o)   handle other matters entrusted by the Company from time to time.

6.02  Responsibilities of Party B and Party C

      In addition to its other obligations under this Contract, each of Party B
      and Party C shall have the following responsibilities, which shall be
      carried out directly or through its Affiliates:

      (a)   when requested by the Company, assist the Company in the purchase of
            equipment, supplies and materials manufactured inside or outside
            China;

      (b)   assist the Company in obtaining loans when necessary;

      (c)   assist the Company in recruiting expatriate and local personnel;

      (d)   assist the Company in arranging training of Company personnel in
            China or abroad as contemplated in the Technology License Contract;

      (e)   assist the Company in generating export opportunities; and

      (f)   handle other matters entrusted by the Company from time to time.


6.03  If, at the time or times of Party B or Party C's performance hereunder, a
      validated U.S. export license is required for Party B, Party C or their
      Affiliates to lawfully export goods or associated technical data, then the
      issuance of such license shall constitute a condition precedent to Party B
      and Party C's obligations hereunder.

6.04  No Compensation

      When the Parties assist the Company with the purchase of equipment,
      supplies and materials, they shall serve the Company without compensation
      and no Party may impose additional charges.

                     ARTICLE 7 - TECHNOLOGY AND TRADEMARKS

7.01  Technology

      The Parties contemplate that from time to time during the term of this
      Contract, Semiconductor Components Industries, LLC may provide the Company
      and/or Party A with additional Technical Information and Know-How to
      produce other products. In such event, the Parties shall cause the Company
      and Party A to execute one or more additional technology license contracts
      with Semiconductor Components


                                       12                 JOINT VENTURE CONTRACT
<PAGE>
      Industries, LLC in substantially the form of the Technology License
      Contract. Any additional technology license contracts will become
      effective on the date of approval by or registration with the Examination
      and Approval Authority and will be valid for ten (10) years.

7.02  Trademarks

      (a)   The Company is not authorized to use the name or trademark of any
            Party in its name or otherwise, except as specifically authorized in
            writing by such Party.

      (b)   The Company shall develop and register its own trademark. The use of
            such trademark shall be decided upon by the Board.

                   ARTICLE 8 - SALE OF JOINT VENTURE PRODUCTS

8.01  Distribution and Sales- Non Wafer Fab Products

      (a)   Unless unanimously decided otherwise by the Board, each Party,
            directly or through designated Affiliates, shall purchase the
            Company's products in proportion to its contribution to the
            registered capital, and the pricing of such purchases shall follow
            the principles provided in the Board resolutions dated June 12, 1997
            and any subsequent unanimous Board resolutions.

      (b)   Each Party or its Affiliates may act as agent for the sale of such
            Party's portion of the Company's production. In such case, such
            Party or its Affiliates shall receive a sales commission.

      (c)   The majority of the Company's products will be exported directly or
            indirectly.

      (d)   Party A may request the Company to perform the assembly and test of
            devices by the Company which are not produced by Motorola or ON.
            Such production would use wafers provided by Party A on a
            consignment basis and take place within Party A's pro rata share of
            the Company's manufacturing capacity. However, the quantity and
            specifications of each device requested must meet the Company's
            manufacturability requirements as defined by the General Manager of
            the Company.

      (e)   Party A, Party B and Party C may request the Company to perform the
            assembly and test of devices by the Company using wafers provided by
            Party C or its Affiliates, on a consignment basis and taking place
            within each Party's pro rata share of the Company's manufacturing
            capacity. However, the quantity and specifications of each device
            requested must meet the Company's manufacturability requirements as
            defined by the General Manager of the Company.

      (f)   The New Products for non wafer fab listed in Appendix A will be sold
            exclusively to the Parties or their affiliates. However, the Company
            may sell such New Products to third parties if the Board agrees such
            sales are in the best interests of the Company.


                                       13                 JOINT VENTURE CONTRACT
<PAGE>
8.02  Distribution and Sales - Wafer Fab Products

      (a)   The Wafer Fab Products listed in Appendix A will be sold exclusively
            to the parties or their affiliates. However, the Company may sell
            such New Products on the open market if the Board agrees such sales
            are in the best interests of the Company.

      (b)   For the first three years of operation of the Wafer Fab, the pricing
            for wafer fab products will be set at the lower of (1) prices that
            are calculated to generate a return on invested equity equal to the
            weighed average annual interest rate of borrowing of the Company as
            determined by the Board at the end of each fiscal year plus 6% or
            (2) the cost at which such products could be purchased from an
            unrelated third party in an arm's-length transaction. Thereafter,
            pricing will be set at a level that generates a return on invested
            equity equal to the weighed average annual interest rate of
            borrowing of the Company as determined by the Board at the end of
            each fiscal year plus 6%.

      (c)   Each party will have the right to purchase Wafer Fab Products from
            the Company in proportion to their respective equity interests
            therein. In order to exercise such right, each party will commit at
            least one year in advance to purchase specified amounts of Wafer Fab
            Products. If a party fails to purchase any of its committed amount,
            then it shall pay the Company an underutilization charge as defined
            in the Board Resolution dated May 16, 2002. In addition, once a
            party makes a commitment to purchase a given amount of Wafter Fab
            Products, it may not reduce such amount in any subsequent year,
            except if (a) such reduction is caused by the exercise by either of
            the other parties of its right to regain its share of the total
            production capacity as set out in Section 8.02d, or (b) either of
            the other parties agrees to take over the reduced amount.

      (d)   If in any year a party does not commit to purchase all the Wafer Fab
            Products it is entitled to purchase (such party a "Declining
            Party"), each of the other parties will have the right to commit to
            purchase a pro rata portion (based on such party's registered
            capital in the Company, calculated for such purpose not taking into
            account the equity owned by the Declining Party) of such New
            Products. A Declining Party may upon one year's advance notice
            regain its share of production.

      (e)   the Company shall increase its production capacity to satisfy the
            demands of the parties for the Wafer Fab Products. If total demand
            exceeds the production capacity of the Company, the parties agree
            that the Company will raise funds, through additional pro rata
            capital contributions or loans, to expand its production capacity.

      (f)   No party or any of its affiliates may resell to any third party
            wafers produced by the Company utilizing the design of any other
            party. However, a party and any of its affiliates may sell finished
            products utilizing wafers produced by the Company.


                                       14                 JOINT VENTURE CONTRACT
<PAGE>
                         ARTICLE 9 - BOARD OF DIRECTORS

9.01  Formation of the Board

      (a)   The Board shall consist of nine (9) directors, three (3) of whom
            shall be appointed by Party A, one (1) of whom shall be appointed by
            Party B and five (5) of whom shall be appointed by Party C. At the
            time this Contract is executed and each time a director is
            appointed, each Party shall notify in writing to the other Parties
            the names of its appointee(s).

      (b)   In the event of any change in the ratio of ownership of the Parties
            of the registered capital of the Company (including as a result of
            an increase in the registered capital), the total number of
            directors and the number of directors appointed by each Party shall
            be changed as necessary to reflect such change. The Board may by its
            decision increase or decrease the number of directors from time to
            time, subject to the requirements of PRC law.

      (c)   Each director shall be appointed for a term of four (4) years and
            may serve consecutive terms if reappointed by the Party originally
            appointing him. A director shall serve and may be removed at the
            pleasure of the Party which appointed him. If a seat on the Board is
            vacated by the retirement, resignation, illness, disability or death
            of a director or by the removal of such director by the Party which
            originally appointed him, the Party which originally appointed such
            director shall appoint a successor to serve out such director's
            term.

      (d)   A director selected by Party C shall serve as the Chairman of the
            Board and a director selected by Party A shall serve as Vice
            Chairman of the Board. The Chairman of the Board shall be the legal
            representative of the Company. Whenever the Chairman of the Board is
            unable to perform his responsibilities for any reason, another
            director as designated by the Chairman may temporarily represent
            him. The Chairman of the Board shall exercise his authority within
            the limits prescribed by the Board and may not under any
            circumstances contractually bind the Company or otherwise take any
            action on behalf of the Company without prior approval of the Board.

      (e)   Subject to a decision by the Board, the Company shall indemnify the
            director against all claims and liabilities incurred by reason of
            acting as a director of the Company, except if incurred as a result
            of willful misconduct, gross negligence or violations of criminal
            laws.

9.02  Powers of the Board

      (a)   The Board shall be the highest authority of the Company.

      (b)   Resolutions involving the following matters may be adopted at a duly
            constituted and convened meeting of the Board only upon the
            unanimous affirmative vote of each and every director of the Board
            voting in person, by telephone, video conference or by proxy at such
            meeting:

            (i)         amendment of the Articles of Association;

            (ii)        merger of the Company with another economic
                        organization;


                                       15                 JOINT VENTURE CONTRACT
<PAGE>
            (iii)       suspension or dissolution of the Company; and

            (iv)        increase, decrease or assignment of the registered
                        capital of the Company.

      (c)   All other issues that require a resolution by the Board may be
            adopted at a duly convened meeting of the Board, and such resolution
            may be adopted only by the affirmative vote of only a simple
            majority of the directors present at such meeting in person or by
            telephone, video conference or proxy.

      (d)   Meetings of the Board shall be attended by at least one director
            from each Party or his proxy, and will be scheduled to ensure to the
            maximum extent possible, the convenient participation of the
            directors. If a Party is not represented at a meeting it will be
            rescheduled as soon as possible to ensure the participation of
            directors from all the Parties, within a maximum of sixty (60) days.
            After sixty (60) days, the rescheduled meeting may take place if any
            six (6) directors participate. If a Board Meeting is held in
            accordance with this section, the Parties in attendance shall orally
            notify the non-attending Party about the contents and decisions of
            the meeting on the day of the meeting, then fax a copy of the
            minutes of the meeting to the non-attending Party within seven (7)
            days. The non-attending Party may offer opinions and suggestions.

9.03  Meetings

      (a)   Meetings of the Board shall be held at least once each year.
            Meetings shall be held at the registered address of the Company or
            such other address in China or abroad as is designated by the Board.
            Meetings may be attended by directors in person or by telephone,
            video conference or proxy.

      (b)   The Chairman of the Board shall set the agenda and be responsible
            for convening and presiding over Board meetings.

      (c)   Upon the written request of three (3) or more of the directors of
            the Company specifying the matters to be discussed, the Chairman of
            the Board shall within twenty-one (21) days convene an interim
            meeting of the Board. The Chairman, or in his absence another
            director as designated by the Chairman or Party C, shall decide on
            the timing and location of such interim meetings.

      (d)   In order to convene a meeting of the Board, the Chairman shall send
            written notice to each director at least thirty (30) days prior to
            the meeting. Such notice shall include a detailed agenda of matters
            to be discussed at the meeting and all reports, documents and other
            materials relevant or necessary for adequate and informed
            consideration of each matter on such agenda. All such notices of
            meetings, detailed agendas and relevant or necessary reports,
            documents and other materials shall be written in English and
            Chinese. Notice of any meeting of the Board may be waived by consent
            of all directors attending the meeting in person or by proxy.

      (e)   Subject to Article 9.02(d) above, six (6) of the directors present
            in person or by proxy shall constitute a quorum which shall be
            necessary for the conduct of


                                       16                 JOINT VENTURE CONTRACT
<PAGE>
            business at any meeting of the Board. Except as provided in Article
            9.02(d), if at any properly convened meeting, no quorum is
            constituted because less than two-thirds of the directors are
            present in person or by proxy, the Chairman may call another meeting
            with seven (7) days' notice. Any director absent from a meeting
            without giving a reason therefor and without having appointed a
            proxy shall be considered to have abstained from voting and shall be
            considered as present for purposes of determining a quorum.
            Excluding those directors who shall be considered to have abstained
            from voting, resolutions other than those listed in Article 9.02(b)
            hereof shall be valid if passed by more than half of the directors
            present.

      (f)   If a Board member is unable to participate in a Board meeting, he
            may issue a proxy and entrust a representative to participate in the
            meeting on his behalf. Unless otherwise provided in the proxy, the
            representative so entrusted shall have the same rights and powers as
            the Board member. One person may represent more than one director by
            proxy. Each Party shall cause its appointed directors to attend
            Board meetings either in person or by proxy.

      (g)   The Board will cause complete and accurate minutes to be kept of all
            meetings of the Board, together with copies of notices of the
            meetings, in English and Chinese. Minutes of all meetings of the
            Board shall be distributed to all the directors as soon as
            practicable after each meeting but not later than thirty (30) days
            from the date of such meeting. Any director who wishes to propose
            any amendment or addition thereto shall submit the same in writing
            to the Chairman and the Vice Chairman within two (2) weeks after
            receipt of the proposed minutes. The minutes shall be finalized by
            the Chairman and Vice Chairman.

      (h)   Any action requiring the unanimous vote of the directors of the
            Board may be taken without a meeting if all members of the Board
            consent in writing to such action. Any action requiring a majority
            vote of the directors may be taken without a meeting if a majority
            of the members of the Board consent in writing to such action. Such
            written consents shall be filed with the minutes of the Board
            proceedings and shall have the same force and effect as a vote taken
            by members physically present.

      (i)   Members of the Board shall serve in such capacity without any
            remuneration, but all reasonable costs incurred by a director in the
            performance of his duties as a member of the Board shall be borne by
            the Party which appointed the director.

                     ARTICLE 10 - OPERATION AND MANAGEMENT

10.01 Management Organization

      The Company shall adopt a management system under which the General
      Manager shall be responsible to and under the leadership of the Board.

10.02 General Manager


                                       17                 JOINT VENTURE CONTRACT
<PAGE>
      (a)   The General Manager shall be an individual of high professional
            qualifications and experience. The General Manager shall be
            nominated by Party C and appointed by the Board of Directors. The
            General Manager shall be employed pursuant to such terms as shall be
            set out in an offering letter issued by the Board of Directors and
            an employment contract with the Company. If the General Manager is
            removed or cannot serve in such capacity due to retirement,
            resignation, illness, disability or death, a successor shall be
            nominated and appointed in the same manner as the original
            appointee.

      (b)   The General Manager shall be in charge of the day-to-day operation
            and management of the Company, shall be responsible to the Board and
            shall carry out all matters entrusted by the Board. In particular,
            but without limiting the generality of the foregoing, the General
            Manager shall have the following responsibilities:

            (i)         perform all pertinent obligations set forth in this
                        Contract and the Articles of Association, as well as
                        resolutions adopted by the Board;

            (ii)        formulate a comprehensive organizational structure and
                        management system for consideration and approval by the
                        Board;

            (iii)       appoint and dismiss managerial staff (both Chinese and
                        expatriate) in charge of various departments, and their
                        subordinates;

            (iv)        formulate, and submit to the Board for adoption, Company
                        policies, rules and regulations, define and designate
                        departmental job responsibilities, and direct and
                        supervise departmental activities;

            (v)         submit to the Board for review and approval business
                        plans, annual and quarterly budgets, forecast plans and
                        reports;

            (vi)        formulate and implement personnel training programs,
                        including apprenticeships and graduate training schemes;

            (vii)       manage external relations and sign economic contracts
                        and other corporate documents as authorized by the
                        Board; and

            (viii)      handle all other major issues as authorized and directed
                        by the Board.

      (c)   The General Manager shall perform his or her duties on a full-time
            basis and shall not hold any operation or management related posts
            concurrently with other enterprises.

      (d)   The General Manager shall not be required to indemnify the Company
            for any acts performed in his or her official capacity (but the
            Company shall indemnify Third Parties for losses suffered as a
            result therefrom if liability exists by the Company), except for
            such acts which constitute willful misconduct, gross negligence or
            violations of criminal laws.

10.03 Deputy General Manager


                                       18                 JOINT VENTURE CONTRACT
<PAGE>
      (a)   The Deputy General Manager shall be nominated by Party A and
            appointed by the Board of Directors. The Deputy General Manager
            shall assist the General Manager in the day-to-day operation and
            management of the Company.

      (b)   The Deputy General Manager shall perform his or her duties on a
            full-time basis and shall not hold any operation or management
            related posts concurrently with other enterprises.

      (c)   The Deputy General Manager shall not be required to indemnify the
            Company for any acts performed in his or her official capacity (but
            the Company shall indemnify Third Parties for losses suffered as a
            result therefrom if liability exists by the Company), except for
            such acts which constitute willful misconduct, gross negligence or
            violations of criminal laws.

                               ARTICLE 11 - SITE

11.01 Land Use Rights

      (a)   The Company has acquired the land use rights for the Site pursuant
            to the Land Use Rights Grant Contract and other relevant legal
            documents. The Company's land use rights of the Site and its
            ownership of the buildings and structures on the Site are evidenced
            by several Land Use Rights Certificates and Real Estate Certificates
            or equivalent documents issued by the relevant Chinese government
            authorities in the name of the Company.

11.02 Environmental Matters

      (a)   The Company shall strictly comply with all applicable environmental
            laws and regulations of the PRC in its operation activities.

      (b)   Each of the Parties and the Company shall have the right to have the
            Site tested in accordance with ON's "Due Diligence Environmental
            Policy" and the Site must pass such test.

      (c)   The Company will participate in and cooperate with ON's audit
            program, in which facilities are inspected on a periodic basis for
            compliance with environmental, safety, and health laws and
            regulations. Any such audit is subject to prior notice from Party C
            and shall be coordinated and scheduled by the Company and Party C.
            The Company must provide responses to any audit recommendations and
            complete corrective action.

                 ARTICLE 12 - MATERIALS, EQUIPMENT AND SERVICES

12.01 Sources of Supply

      (a)   The Company shall have the right to import materials and equipment
            not available in China in the qualities and quantities deemed
            necessary by the General Manager, except that items requiring import
            licenses shall be handled in accordance with the relevant import
            licensing regulations of China.

      (b)   Unless otherwise required by Chinese legal regulations, the Company
            shall have the right to appoint foreign architects, consultants,
            engineers and


                                       19                 JOINT VENTURE CONTRACT
<PAGE>
            contractors to undertake relevant work when, in the opinion of the
            General Manager, there are no Chinese units or individuals qualified
            or available to undertake such work.

12.02 Party A Services

      Party A shall provide to the Company certain services and facilities
      required for the Company's operation, pursuant to the terms and conditions
      of the Services Contract.

12.03 Machinery and Equipment

      The Company may purchase from Party C or its Affiliates machinery and
      equipment. The purchase price will be agreed upon by the Board.

                         ARTICLE 13 - LABOR MANAGEMENT

13.01 Governing Principle

      Matters relating to the recruitment, employment, dismissal, resignation,
      wages and welfare of the staff and workers of the Company shall be handled
      in accordance with the Labor Law of the People's Republic of China (the
      "Labor Law") and related legislation. The Company shall have autonomy in
      determining its employment policies and related matters in accordance with
      Chinese legal regulations applicable to foreign invested enterprises. The
      Company shall seek to deal directly with its employees, without any
      external intermediary parties, and will cause the adoption of such
      personnel policies and practices as appropriate in order to reasonably
      achieve such results. The Company shall establish personnel practices that
      fairly reward employees for services rendered in a manner consistent with
      common business practices in their location of employment.

13.02 Working Personnel

      Working Personnel shall be employed by the Company in accordance with the
      terms of individual employment contracts entered into between the Company
      and individual Working Personnel or relevant agreements entered into
      between the Company and Party A. The standard individual employment
      contract shall be filed with the local labor department.

13.03 Management Personnel

      Management Personnel shall be employed by the Company in accordance with
      the terms of individual employment contracts or the terms of relevant
      agreements between the Company and Party A. Expatriate personnel
      (including those from the regions of Hong Kong, Macau and Taiwan) shall
      receive a salary and benefits commensurate with those provided to
      expatriate personnel employed by other foreign investment enterprises of a
      similar nature in China.

13.04 Conformity with Labor Protection


                                       20                 JOINT VENTURE CONTRACT
<PAGE>
      The Company shall conform to rules and regulations of the Chinese
      government concerning labor protection and ensure safe and civilized
      production. Labor insurance for the Working Personnel of the Company shall
      be handled in accordance with individual employment contracts and the
      relevant regulations of the Chinese government.

13.05 Number of Employees

      The qualifications and number of employees shall be determined in
      accordance with the operating needs of the Company. The Company shall
      refer to the guidelines provided by Party C as to staffing experience in
      similar types of facilities in other countries.

13.06 Employee Examination and Recruitment

      (a)   The Company shall observe the Labor Law, labor regulations and other
            relevant regulations and the Company shall have autonomy in
            determining its employment policies and relevant matters.

      (b)   Employees will be selected from candidates for employment according
            to their professional qualifications and work experience. Each
            Working Personnel may be examined and interviewed by the General
            Manager or his designated representative prior to commencement of
            employment by the Company. The General Manager shall have the
            absolute right to decide, on behalf of the Company, whether to
            employ any such person. All candidates hired by the Company must
            complete satisfactorily a probationary period of employment before
            they will be officially considered permanent employees of the
            Company.

                 ARTICLE 14 - FINANCIAL AFFAIRS AND ACCOUNTING

14.01 Accounting System

      (a)   The Financial Controller of the Company, under the leadership of the
            General Manager, shall be responsible for the financial management
            of the Company.

      (b)   The General Manager and the Financial Controller shall prepare the
            accounting system and procedures in accordance with the relevant
            regulations. The accounting system and procedures to be adopted by
            the Company shall be submitted to the Board for approval. Once
            approved by the Board, the accounting system and procedures shall be
            filed with the department in charge of the Company and with the
            relevant local department of finance and the tax authorities for the
            record. The accounting system and procedures approved by the Board
            shall to the maximum extent possible comport with the accounting
            requirements of Party C.

      (c)   The Company shall adopt Renminbi as its bookkeeping base currency,
            but may also adopt the United States Dollar as a supplementary
            bookkeeping currency.


                                       21                 JOINT VENTURE CONTRACT
<PAGE>
      (d)   All accounting records, vouchers, books and statements of the
            Company shall be made and kept in Chinese. All accounting statements
            of the Company shall also be made and kept in English.

      (e)   For the purposes of preparing the Company's accounts and statements,
            calculating declared dividends to be distributed to the Parties, and
            for any other purposes where it may be necessary to effect a
            currency conversion, such conversion shall be in accordance with the
            median rate for buying and selling announced by the People's Bank of
            China, or other rate recognized by the Chinese government, on the
            date of actual receipt or payment.

14.02 Financial Reports

      (a)   The Company shall furnish to the Parties financial reports (in
            Chinese and English) on at least a monthly basis so that they may
            continuously be informed about the Company's performance.

      (b)   The Company shall submit to the Parties an annual financial report
            (which shall include an audited profit and loss statement and
            balance sheet for the fiscal year) within one (1) month after the
            end of the fiscal year, together with an audit report from the
            Company's auditor.

14.03 Audits

      (a)   An independent accountant registered in China shall be engaged as
            the Company's auditor to examine and verify the annual financial
            report, investment certificates to be issued to the Parties,
            financial reports on the liquidation of the Company and other
            financial documents as required by the Board.

      (b)   Each of the parties shall have the right to inspect, audit, and
            copy, from time to time, the books and other financial records and
            documents of the Company at its own expense. The Party wishing to
            exercise its right to audit shall be free to use its own internal
            auditors to perform said audit, if it so chooses. Said internal
            auditors shall also have the right to audit the Company's system of
            internal control and the Company's compliance with the Code of
            Conduct approved by the Company. The audit of these systems may
            result in recommendations to management. Management shall be
            required to provide responses to the recommendations and complete
            corrective action. Audit reports, consisting of an introduction,
            conclusion, recommendations, and responses will be issued to the
            Company and the Parties.

      (c)   Each Party may, at its own expense, appoint an accountant (which may
            be either an accountant registered abroad or registered in China) to
            audit the accounts of the Company on behalf of such Party.
            Reasonable access to the Company's financial records shall be given
            to such auditor and such auditor shall keep confidential all
            documents examined while conducting audits.

14.04 Bank Accounts and Foreign Exchange Control


                                       22                 JOINT VENTURE CONTRACT
<PAGE>
      (a)   The Company shall open foreign exchange and Renminbi bank accounts
            at authorized banks in China and may also open foreign exchange
            account(s) outside China with the approval of SAFE for the
            furtherance of its business purposes.

      (b)   The Company's foreign exchange transactions shall be handled in
            accordance with relevant Chinese regulations relating to foreign
            exchange control.

14.05 Foreign Exchange Balance

      (a)   The Company shall be responsible to maintain a balance in its
            foreign exchange receipts and expenditures through the sale of its
            products and services and through other methods permitted under the
            laws of China.

      (b)   If there is a foreign exchange deficiency, the Board will consider
            various plans and alternatives to balance foreign exchange receipts
            and expenditures, which, subject to obtaining the relevant
            government approvals, may include all means permitted under the
            relevant regulations, including but not limited to export of
            domestically produced products and, when permitted by law, borrowing
            from foreign exchange banks.

      (c)   All costs incurred in converting Renminbi to foreign exchange
            required for the Company's operations shall be treated as operating
            expenses of the Company.

      (d)   Liquid funds in the Company's foreign exchange account shall be used
            in the following order of priority:

            (i)         payments of principal and interest on foreign exchange
                        loans taken out by the Company from Third Parties;

            (ii)        payment for imported materials and equipment;

            (iii)       payment for imported services;

            (iv)        payments due under the Technology License Contract;

            (v)         payment of the Company's expatriate staff salaries;

            (vi)        payment of principal and interest on foreign exchange
                        loans and advances provided by the Parties or
                        Affiliates;

            (vii)       maintenance of foreign currency reserves determined by
                        the Board of Directors;

            (viii)      remittance of profits to Party B and Party C; and

            (ix)        payment of profits to Party A.

      (e)   Upon government approval, the Company may source components and
            equipment from local suppliers for the Parties' Affiliates inside
            and outside China.


                                       23                 JOINT VENTURE CONTRACT
<PAGE>
14.06 Fiscal Year

      The Company shall adopt the calendar year as its fiscal year, which shall
      begin on January 1 and end on December 31 of the same year, except that
      the first fiscal year of the Company shall commence on the date that the
      Company is granted its Business License and shall end on the immediately
      succeeding December 31.

14.07 Profits Distribution

      (a)   After the payment of income tax by the Company, the Board will
            determine the annual allocations from after-tax net profits to the
            reserve fund and expansion fund of the Company and the bonus and
            welfare fund for the workers and staff members. The sum of the
            annual allocations to the three funds shall be determined by the
            Board.

      (b)   The Board shall once every year by a formally adopted resolution
            decide the amount of after-tax net profit of the Company (after the
            deduction of the allocations to the three funds mentioned in
            paragraph (a) above) to be retained in the Company for expanding the
            production and operation of the Company and the amount to be
            distributed to the Parties in proportion to their respective shares
            in the registered capital.

      (c)   If the Company carries losses from previous years, the after-tax net
            profits of the current year shall first be used to cover the losses
            after deductions for the three funds mentioned in 14.07(a). No
            profit shall be distributed unless the deficit from the previous
            years is made up. Profits retained by the Company and carried over
            from the previous years may be distributed together with the
            distributable profits of the current year, or after the deficit of
            the current year is made up therefrom.

      (d)   When the Company has foreign currency available for profit
            distribution, Party B and Party C will have a priority right to
            receive their respective shares of the distributable profit in
            foreign exchange.

                      ARTICLE 15 - TAXATION AND INSURANCE

15.01 Income Tax, Customs Duties and Other Taxes

      (a)   The Company shall pay tax under the relevant tax laws of China,
            subject to any further tax holidays, waivers, exemptions, or
            exclusions granted to the Company from time to time by any local,
            regional or national tax authorities.

      (b)   No later than six (6) months before the expiration of the
            preferential income tax treatment currently enjoyed by the Company,
            the Company may submit an application for confirmation of the
            Company's status as a Technologically Advanced Enterprise and
            Export-oriented Enterprise in accordance with the Implementing
            Measures of the Ministry of Foreign Trade and Economic Cooperation
            on the Confirmation and Examination of Export-Oriented and
            Technologically Advanced Enterprises with Foreign Investment and
            other relevant regulations. Upon receiving such confirmation, the
            Company shall be


                                       24                 JOINT VENTURE CONTRACT
<PAGE>
            entitled to all preferential tax treatment granted to such
            enterprise under PRC law.

      (c)   The Chinese and expatriate employees of the Company shall pay tax on
            their individual incomes in accordance with the relevant provisions
            of the tax laws of China.

15.02 Insurance

      (a)   The Company shall, at its own cost and expense, at all times take
            out and maintain full and adequate insurance for the Company against
            loss or damage by fire and such other risks as are customarily
            insured against.

      (b)   The property, transportation and other items of insurance of the
            Company will be denominated in Chinese and foreign currencies, as
            appropriate. The types and amounts of insurance coverage shall be
            determined by the General Manager.

      (c)   The Company shall take out the required insurance from the People's
            Insurance Company of China or any other insurance company authorized
            to do business in China.

                          ARTICLE 16 - CONFIDENTIALITY

16.01 Confidentiality

      (a)   Prior to and during the term of this Contract, each Party has
            disclosed or may disclose confidential and proprietary information
            to the other Parties. In addition, the Parties may, during the term
            of this Contract, obtain confidential and proprietary information of
            the Company in connection with the operation of the Company. Each of
            the Parties receiving such information shall, during the term of
            this Contract and for three (3) years thereafter:

            (i)         maintain the confidentiality of such information; and

            (ii)        not disclose it to any person or entity, except to their
                        employees who need to know such information to perform
                        their responsibilities.

      (b)   The provisions of paragraph (a) above shall not apply to information
            that:

            (i)         can be shown to be known by the receiving Party by
                        written records made prior to disclosure by the
                        disclosing Party;

            (ii)        is or becomes public knowledge otherwise than through
                        the receiving Party's breach of this Contract; or

            (iii)       was obtained by the receiving Party from a Third Party
                        having no obligation of confidentiality with respect to
                        such information.

      (c)   If required by Party B or Party C, the Company shall execute a
            separate confidentiality agreement with provisions similar to those
            in paragraphs (a), (b) and (c) above with respect to confidential
            and proprietary information


                                       25                 JOINT VENTURE CONTRACT
<PAGE>
            obtained by the Company from Party B or Party C, as the case may be,
            or their respective Affiliates.

      (d)   Each of the Parties and the Company shall formulate rules and
            regulations to cause its directors, senior staff, and other
            employees, and those of their Affiliates also to comply with the
            confidentiality obligation set forth in this Article 16.

      (e)   The technology and any other technical information licensed or
            provided in any way by Party B, Party C or their Affiliates to the
            Company or otherwise acquired or developed by the Company shall be
            used by the Company only in the Plant for the production of Joint
            Venture Products.

      (f)   The Company shall be liable for damages accrued to any Party as a
            result of a breach of any provision of this Article 16 by the
            Company, which damages shall be determined in accordance with the
            relevant provisions of the contract law of China. The payment of
            damages by the Company to any Party shall be without prejudice to
            any right or rights of action or other remedies accrued to such
            Party at the date of such breach.

      (g)   This Article 16 and the obligations and benefits hereunder shall
            survive for three (3) years after the expiration or termination of
            this Contract, notwithstanding the termination, dissolution or
            liquidation of the Company.

      (h)   Notwithstanding the foregoing provisions of this Article 16, each of
            the Parties shall be permitted to make any disclosure required by
            applicable law.

                        ARTICLE 17 - JOINT VENTURE TERM

17.01 Joint Venture Term

      The Joint Venture Term established under this Contract shall be fifty (50)
      years, commencing on March 28, 1995.

17.02 Extension of the Joint Venture Term

      If the Board unanimously approves the extension of the Joint Venture Term,
      the Company shall apply to the Examination and Approval Authority for
      approval no less than six (6) months prior to the expiration of the Joint
      Venture Term. The Joint Venture Term may be extended only upon approval by
      the Examination and Approval Authority.

                    ARTICLE 18 - TERMINATION AND LIQUIDATION

18.01 Termination

      (a)   This Contract shall terminate upon the expiration of the Joint
            Venture Term set forth in Article 17.01 hereof unless extended
            pursuant to Article 17.02 hereof.


                                       26                 JOINT VENTURE CONTRACT
<PAGE>
      (b)   This Contract may be terminated at any time by the written agreement
            of the Parties and after obtaining approval from the relevant
            Chinese government authorities.

      (c)   This Contract may be terminated by the written notice of a Party to
            the other Parties of an intention to terminate this Contract,
            followed by a vote of the Board to terminate this Contract pursuant
            to the procedure set forth in paragraph (d) below and after
            obtaining approval from the relevant Chinese government authorities,
            if:

            (i)         any other Party materially breaches this Contract
                        (except for a breach involving capital contributions per
                        5.04(b)) or violates the Articles of Association causing
                        the Company's inability to continue operating or
                        otherwise undermining the desired objectives of the
                        Parties, and such breach or violation is not cured
                        within three (3) months of written notice to the
                        breaching Party;

            (ii)        the Technology License Contract or any other technology
                        contract or the Land Use Rights Contract is materially
                        breached by the Company;

            (iii)       the Services Contract is materially breached by Party A
                        causing the Company's inability to continue operating or
                        otherwise undermining the desired objectives of the
                        Parties, (in these cases only Party B and Party C may
                        terminate this Contract) or the Services Contract is
                        materially breached by the Company causing the Company's
                        inability to continue operating or otherwise undermining
                        the desired objectives of the Parties, (in these cases
                        only Party A may terminate this Contract);

            (iv)        the Technology License Contract is materially breached
                        by the licensor thereunder (in this case only the
                        Parties which are not the licensor or Affiliates of such
                        licensor may terminate this Contract);

            (v)         the Company or any Party becomes bankrupt, is the
                        subject of proceedings for liquidation or dissolution,
                        ceases to carry on business or becomes unable to pay its
                        debts as they become due;

            (vi)        the Company qualifies but is unable to secure or retain
                        the appropriate certificate from the Examination and
                        Approval Authorities granting the Company status as a
                        Technologically Advanced Enterprise in an economic
                        development area or as a Technologically Intensive or
                        Knowledge Intensive Manufacturing Foreign Investment
                        Enterprise and qualifying the Company for the 15%
                        regular tax rate;

            (vii)       the Company is not allowed to import raw materials and
                        equipment which it deems necessary to carry out its
                        operations.

            (viii)      under the requirements specified in the relevant Chinese
                        legal regulations, the Company is qualified but unable
                        to obtain or retain duty and tax exemption on imported
                        production equipment, spare parts, production tools,
                        construction and production materials, and other


                                       27                 JOINT VENTURE CONTRACT
<PAGE>
                        necessary goods and "bonded" treatment on the imported
                        raw materials for the Company's normal production use or
                        is unable to obtain or retain approval of bonded
                        factory, bonded manufacturing area, or bonded warehouse
                        status when the import/export volume of the Company
                        meets the requirements specified in the relevant Chinese
                        regulations.

            (ix)        any other Party has failed to provide its contribution
                        to the registered capital of the Company on or before
                        the expiration of the time period stipulated in Article
                        5.04(b) or 5.08 hereof;

            (x)         any other Party transfers its share of the registered
                        capital in the Company in violation of the provisions of
                        this Contract;

            (xi)        the conditions or consequences of Force Majeure (as
                        hereinafter defined in Article 20) significantly
                        interfere with the normal functioning of the Company for
                        a period in excess of six (6) months causing the
                        Company's inability to continue operating or otherwise
                        undermines the desired objectives of the Parties, and
                        the Parties have been unable to find an equitable
                        solution pursuant to Article 21 hereof;

            (xii)       if the Board determines that the Company is unable
                        obtain its desired objectives such as quantity, quality,
                        cost, rate of production, supply of regional market
                        preferences or requirements, delivery needs or any other
                        objective;

            (xiii)      if market conditions change such that the Board
                        determines that the Company may no longer sell Joint
                        Venture Products on a competitive basis;

            (xiv)       the Parties cannot implement the economic adjustment set
                        forth in Article 22.02.

      (d)   In the event that any Party gives notice pursuant to Article
            18.01(c) hereof of a desire to terminate this Contract, the Parties
            shall within a two (2)-month period after such notice is given
            conduct negotiations and endeavor to resolve the situation which
            resulted in the giving of such notice. In the event matters are not
            resolved to the satisfaction of all the Parties within two (2)
            months of such notice or any non-notifying Party definitely refuses
            to commence negotiations within the period stated above, each Party
            shall cause its appointed directors to vote to terminate this
            Contract, and the Board shall submit a termination application to
            the Examination and Approval Authority for approval.

      (e)   For purposes of this Article 18, the "date of termination" shall be
            (i) the date of expiration of the Joint Venture Term, if the
            termination is effected pursuant to paragraph (a) above; (ii) the
            date of the written agreement of the Parties, if the termination is
            effected pursuant to paragraph (b) above; or (iii) the date that the
            Board votes to terminate this Contract, if the termination is
            effected pursuant to paragraph (c) above.


                                       28                 JOINT VENTURE CONTRACT
<PAGE>
18.02 Buy-out Options

      (a)   In the event that any Party gives notice pursuant to Article
            18.01(c) hereof of a desire to terminate this Contract, the other
            Parties (except for the Party in breach or is bankrupt or insolvent)
            shall have the right to purchase the equity interest of such Party
            in proportion to their respective interests in the registered
            capital. A Party that wishes to exercise such buy-out option shall
            notify the other Parties in writing of its decision no later than
            thirty (30) days after the end of the two-month negotiation period
            referred to in Article 18.01(d).

      (b)   In the event that this Contract is terminated pursuant to Article
            18.01(a) or 18.01(b) hereof, any Party shall have the option to
            purchase the equity interest of the other Parties. A Party that
            wishes to exercise such buy-out option shall notify the other
            Parties in writing of its decision no later than thirty (30) days
            after the date of termination.

      (c)   Absent any buy-out notice, the Parties shall liquidate the Company
            in accordance with applicable law and Article 18.03 hereof.

      (d)   In the event a buy-out option is exercised, the Parties shall within
            two (2) weeks of receipt of the buy-out notice jointly appoint one
            Sino-foreign joint venture accounting or appraisal firm qualified in
            China to value the Company. All costs and expenses of such
            accounting or appraisal firm shall be borne equally by Party A,
            Party B and Party C.

      (e)   The valuation of the Company as provided in paragraph (d) above
            shall be completed within four (4) weeks and shall be based on the
            assumption that (i) the Company shall continue as a going concern
            and (ii) subject to the terms and conditions of and to the extent
            permitted by the relevant agreements, the Company shall enjoy the
            right to use the Site and the Plant and the right to use the
            technology and know-how provided to the Company by each of the
            Parties.

      (f)   The purchase price shall be equal to an amount determined by
            multiplying the value of the Company by the percentage of registered
            capital then held by the selling Party.

      (g)   The purchase price shall be paid to the selling Party within sixty
            (60) days after the later to occur of (i) the determination of such
            purchase price and (ii) the receipt of any governmental approvals in
            respect of the relevant purchase then required under applicable law.
            If Party B or Party C is the selling Party, the purchase price shall
            be paid in United States Dollars.

      (h)   Upon a buy-out pursuant to this Article 18.02, each Party agrees to
            take (and to cause the Company and the Board to take) whatever
            action may be necessary to consummate such buy-out, including but
            not limited to (i) obtaining the approval of the Examination and
            Approval Authority and all other necessary approvals, (ii) in the
            case of a buy-out of Party A, taking all actions required to convert
            the Company into a wholly foreign-owned enterprise, and (iii)
            causing the Business License and registration records of the Company
            to be changed or canceled with SAIC.


                                       29                 JOINT VENTURE CONTRACT
<PAGE>
18.03 Liquidation

      (a)   If the Parties are required to liquidate the Company pursuant to
            Article 18.02(c) hereof, or if the Parties otherwise agree that the
            Company shall no longer operate as a going concern, then the Board
            shall, within a period of thirty (30) days, appoint a liquidation
            committee which shall have the power to represent the Company in all
            legal matters. The liquidation committee shall value and liquidate
            the Company's assets in accordance with the Foreign Investment
            Enterprises Liquidation Procedures and other applicable Chinese law
            and regulations and the principles set out herein.

      (b)   The liquidation committee shall consist of seven (7) members, of
            which two (2) members shall be nominated by Party A, one (1) member
            shall be nominated by Party B, and four (4) members including the
            chairman of the liquidation committee shall be nominated by Party C.
            Members of the liquidation committee may, but need not be, Board
            directors or senior employees of the Company. When permitted by
            Chinese law or regulations, each Party may also appoint professional
            advisors to be members of or to assist the liquidation committee.
            The Board shall report the formation of the liquidation committee to
            the department in charge of the Company. In principle, the
            liquidation committee shall resolve all issues by consensus. In the
            event that consensus cannot be reached, matters shall be decided by
            a majority vote of all members of the liquidation committee.

      (c)   The liquidation committee shall conduct a thorough examination of
            the Company's assets and liabilities, on the basis of which it
            shall, in accordance with the relevant provisions of this Contract,
            develop a liquidation plan which, if approved by the Board, shall be
            executed under the liquidation committee's supervision. The
            liquidation plan shall provide that the Parties will have the right
            to purchase any of the machinery and equipment and other facilities
            on a priority basis. In the event that two or more Parties offer the
            same terms and conditions for such purchases, competitive bidding
            shall take place. If the Company is liquidated, ON shall have the
            right to terminate the Technology License Contract and Party A shall
            have the right to terminate the Services Contract so that these
            contracts shall not be deemed to be assets of the Company.

      (d)   In developing and executing the liquidation plan, the liquidation
            committee shall use every effort to obtain the highest possible
            price in United States Dollars for the Company's assets.

      (e)   The liquidation expenses, including remuneration to members and
            advisors to the liquidation committee, shall be paid out of the
            Company's assets in priority to the claims of other creditors.

      (f)   After the liquidation of the Company's assets and the settlement of
            all of its outstanding debts, the balance shall be divided and paid
            over to Party A, Party B and Party C in proportion to their
            respective shares of the registered capital of the Company.


                                       30                 JOINT VENTURE CONTRACT
<PAGE>
      (g)   On completion of all liquidation procedures, the liquidation
            committee shall submit a final report approved by an independent
            accountant registered abroad or in China to the Examination and
            Approval Authority, hand in the Business License to the original
            registration authority and complete all other formalities for
            canceling the Company's registration. Each of Party B and Party C
            shall have the right to obtain copies of all of the Company's
            accounting books and other documents at its own expense, but the
            originals thereof shall be left in the care of Party A.

      (h)   Party A hereby agrees Party B and Party C shall have priority in
            obtaining the foreign currency portion of the balance to be
            distributed under paragraph (f) above.

18.04 Continuing Obligations

      The obligations and benefits stipulated in the confidentiality provisions
      of Article 16, in the provisions on settlement of disputes of Article 21
      and in the provisions on termination and liquidation of this Article 18
      shall survive the termination of this Contract with approval from the
      relevant authorities of the PRC government and the termination,
      dissolution or liquidation of the Company.

                        ARTICLE 19 - BREACH OF CONTRACT

19.01 Liability for Breach of Contract

      In the event that a breach of contract committed by a Party to this
      Contract results in the non-performance of or inability to fully perform
      this Contract or its Appendices, the liabilities arising from the breach
      of contract shall be borne by the Party in breach as provided in this
      Contract and its Appendices. In the event that a breach of contract is
      committed by more than one Party, each such Party shall bear its
      individual share of the liabilities arising from the breach of contract.

19.02 Limitations on Liability

      Notwithstanding the foregoing, and except for any liability arising under
      Article 11 hereof, the aggregate liability of each Party under this
      Contract shall not exceed such Party's investment in the registered
      capital of the Company.

                           ARTICLE 20 - FORCE MAJEURE

20.01 Definition of Force Majeure

      "Force Majeure" shall mean any event which is beyond the control of the
      affected Party, and which is unforeseen, unavoidable or insurmountable,
      and which arises after the Effective Date and which prevent total or
      partial performance by such Party. Such events shall include earthquakes,
      typhoons, flood, fire, war, failures of international or domestic
      transportation, acts of government or public agencies, epidemics, civil
      disturbances, strikes or any other events which cannot be foreseen,
      prevented or controlled, including events which are accepted as Force
      Majeure in general international commercial practice.

20.02 Consequences of Force Majeure


                                       31                 JOINT VENTURE CONTRACT
<PAGE>
      (a)   If an event of Force Majeure occurs, a Party's contractual
            obligations affected by such an event under this Contract shall be
            suspended during the period of delay caused by the Force Majeure.

      (b)   The Party claiming Force Majeure shall promptly inform the other
            Parties in writing and shall furnish the other Parties within
            fifteen (15) days thereafter sufficient proof of the occurrence and
            duration of such Force Majeure. The Party claiming Force Majeure
            shall also use all reasonable endeavors to eliminate or mitigate the
            effects of such Force Majeure.

      (c)   In the event of Force Majeure, the Parties shall immediately consult
            with each other in order to find an equitable solution and shall use
            all reasonable endeavours to minimize the consequences of such Force
            Majeure.

                      ARTICLE 21 - SETTLEMENT OF DISPUTES

21.01 Friendly Consultations

      In the event any dispute arises between the Parties out of or in relation
      to this Contract, including any dispute regarding its breach, termination
      or validity, the Parties shall attempt in the first instance to resolve
      such dispute through friendly consultations.

21.02 Joint Conciliation

      If the dispute has not been resolved by friendly consultations within
      sixty (60) days after one Party has served written notice on the other
      Party or Parties requesting the commencement of such consultations, then
      the Parties shall attempt to reach a settlement through conciliation
      conducted in Beijing in accordance with the Conciliation Rules of the
      Beijing Conciliation Center of the China International Economic and Trade
      Arbitration Commission. If the dispute is resolved through conciliation,
      the Parties agree to enter into a written settlement contract.

21.03 Arbitration

      If the dispute is not resolved pursuant to Article 21.02 within sixty (60)
      days after conciliation proceedings have commenced, or if a Party fails to
      comply with any settlement reached by conciliation conducted pursuant to
      Article 21.02 within sixty (60) days after a settlement is reached, then

      (a)   any Party involved may submit the dispute for arbitration in
            Stockholm at the Arbitration Institute of the Stockholm Chamber of
            Commerce in accordance with the Arbitration Rules of that Institute
            with instructions that the arbitration be conducted in English and
            that the arbitrators may refer to both the English and Chinese texts
            of this Joint Venture Contract;

      (b)   there shall be three (3) arbitrators all of whom shall be fluent in
            English and Mandarin. Party A shall select one (1) arbitrator, and
            Party B and Party C shall select one (1) arbitrator. The third
            arbitrator shall be appointed by agreement between the arbitrators
            selected by Party A, Party B and Party C, and such third arbitrator
            shall serve as chairman of the panel;


                                       32                 JOINT VENTURE CONTRACT
<PAGE>
      (c)   the arbitration award shall be final and binding on the Parties and
            shall be enforced in accordance with its terms;

      (d)   the arbitration fee shall be borne by the losing party.

      (e)   each Party may require the other Parties to enter into a written
            contract which sets forth the terms of the arbitration award.

21.04 Continuous Performance of Joint Venture Contract

      In the course of the arbitration, this Contract shall be continuously
      performed in accordance with its terms and the Articles of Association
      except for the part which is under, or which is directly and substantially
      affected by, the arbitration.

21.05 Enforceability of Award

      Any award of the arbitrators shall be enforceable by any court having
      jurisdiction over the Party against which the award has been rendered, or
      wherever assets of the Party against which the award has been rendered can
      be located, and such award shall be enforceable in accordance with the
      "United Nations Convention on the Recognition and Enforcement of Foreign
      Arbitral Awards (1958)" (except where reservations are made by the
      People's Republic of China).

21.06 Jurisdiction of Chinese Courts

      Any dispute arising under this Contract shall be settled in accordance
      with this Article 21, except that either party may apply to the courts of
      China to enforce an arbitration award rendered or contract executed in
      accordance with this Article.

                          ARTICLE 22 - APPLICABLE LAW

22.01 Applicable Law

      The formation, validity, interpretation and implementation of this
      Contract shall be governed by the laws of the People's Republic of China
      which are published and publicly available, but in the event that there is
      no published and publicly available law in China governing a particular
      matter relating to this Contract, reference shall be made to general
      international commercial practices.

22.02 Economic Adjustment

      If any Party's or the Company's economic benefits are adversely and
      materially affected by the promulgation of any new laws, rules or
      regulations of China or the amendment or interpretation of any existing
      laws, rules or regulations of China after the signature date of this
      Contract, or if the Company subsequently fails to continue to qualify for
      preferential treatment, the Parties shall promptly consult with each other
      and use their best endeavors to implement any adjustments necessary to
      maintain each Party's and the Company's economic benefits derived from
      this Contract on a basis no less favorable than the economic benefits it
      would have derived if such laws, rules or regulations had not been
      promulgated, amended or so interpreted. If the economic benefits approved
      by the Parties following consultations cannot be obtained after such
      adjustments are implemented, a Party may terminate this Contract under
      Article 18.


                                       33                 JOINT VENTURE CONTRACT
<PAGE>
22.03 Preferential Treatment

      The Company and the Parties shall be entitled according to the law to any
      tax, investment or other benefits or preferences that become available or
      publicly known after the signing of this Contract and which are more
      favorable than those set forth in this Contract.

22.04 Continuity of Contract

      The Parties agree that in the event of the promulgation of any new laws,
      rules or regulations of China, this Contract shall continue to be
      performed in accordance with its terms to the largest extent permitted
      under PRC law.

                     ARTICLE 23 - MISCELLANEOUS PROVISIONS

23.01 Non-Competition

      Because the Company will be manufacturing components with commodity
      characteristics, the Parties agree that Party A or Party C shall not,
      directly or indirectly, through any other joint venture, manufacture in
      China the Joint Venture Products including the New Products listed in
      Appendix A that are being manufactured and to be manufactured by the
      Company, unless the Company cannot meet demand for such products (whether
      due to demands of quantity, quality, cost, rate of production, regional
      market preferences or requirements, delivery needs or any other reason).

      In order to strengthen their relationship with Party A, Party C and their
      Affiliates have no present intention of producing the products in Appendix
      A in China other than through the Company unless the Company cannot meet
      demand for such products.

      In order to strengthen its relationship with Party C, Party A is willing
      to give Party C first right of refusal for Party A's future semi-conductor
      projects. Party A shall give written notice to Party C describing such
      project. Party C shall have sixty (60) days to either agree to participate
      therein or to decline to participate and Party C shall be deemed to have
      declined if it fails to respond in such time. If Party C declines to
      participate, Party A may conduct such activities on its own or with other
      parties on the terms described to Party C.

23.02 Waiver

      To the extent permitted by Chinese law or regulations, failure or delay on
      the part of any Party hereto to exercise a right, power or privilege under
      this Contract and the Appendices hereto shall not operate as a waiver
      thereof; nor shall any single or partial exercise of a right, power or
      privilege preclude any other future exercise thereof.

23.03 Assignability

      This Contract may not be assigned in whole or in part by any Party without
      the prior written consent of each of the other Parties hereto and the
      approval of the Examination and Approval Authority.

23.04 Binding Effect


                                       34                 JOINT VENTURE CONTRACT
<PAGE>
      This Contract is made for the benefit of each of the Parties and their
      respective lawful successors and assignees and is legally binding on them.
      This Contract may not be changed orally, but only by a written instrument
      signed by each of the Parties and approved by the Examination and Approval
      Authority.

23.05 Severability

      Subject to the provisions of Article 22.02 hereof, the invalidity of any
      provision of this Contract shall not affect the validity of any other
      provision of this Contract.

23.06 Language

      This Contract is executed in the Chinese language in five (5) originals
      and in the English language in five (5) originals. Both language versions
      shall be equally authentic.

23.07 Entire Agreement

      This Contract and the Appendices hereto constitute the entire agreement
      among Party A, Party B and Party C with respect to the subject matter of
      this Contract and supersede all prior discussions, negotiations and
      agreements among them. In the event of any conflict between the terms and
      provisions of this Contract, the Articles of Association and the
      Feasibility Study, the terms and provisions of this Contract shall
      prevail.

23.08 Notices

      Any notice or written communication provided for in this Contract by one
      Party to the other Parties, including but not limited to any and all
      offers, writings, or notices to be given hereunder, shall be made in
      English or Chinese by facsimile, or by courier service delivered letter,
      promptly transmitted or addressed to the appropriate Party. The date of
      receipt of a notice or communication hereunder shall be deemed to be
      fifteen (15) days after the letter is given to the courier service in the
      case of a courier service delivered letter and one (1) working day after
      dispatch of a facsimile if evidenced by a transmission report. All notices
      and communications shall be sent to the appropriate address set forth
      below, until the same is changed by notice given in writing to the other
      Parties.

      PARTY A:
      Leshan Radio Company, Ltd.
      27 West People's Road
      Leshan, Sichuan Province 614000
      People's Republic of China
      Attention:  Chairman
      Facsimile No:  86-833-213-2060

      PARTY B:
      Motorola (China) Investment Limited
      No. 108 Jian Guo Road
      Chao Yang District


                                       35                 JOINT VENTURE CONTRACT
<PAGE>
      Beijing 100022
      People's Republic of China
      Attention:  Corporate Law Department
      Facsimile No:  86-10-6566-8449

      PARTY C:
      SCG (China) Holding Corporation
      5005 East McDowell Road
      Phoenix, Arizona 85008
      U.S.A.
      Attention: General Counsel
      Facsimile No:  1-602-244-5500


      The sending Party shall send confirmation to the other Parties by
      telephone or facsimile at an appropriate time.

23.09 Appendices

      The Appendices hereto listed below are made an integral part of this
      Contract and are equally binding with these Articles 1 through 23.

      List of Joint Venture Products                                (Appendix A)
      Schedule of Capital Contributions                             (Appendix B)

23.10 Effectiveness

      This Contract shall become effective on the Effective Date.


                                       36                 JOINT VENTURE CONTRACT
<PAGE>
IN WITNESS WHEREOF, each of the Parties hereto have caused this Contract to be
executed by their duly authorized representatives on the date first set forth
above.


LESHAN RADIO COMPANY, LTD.


By:    /s/ Pan Min-zhi
      --------------------------
Name:  Pan Min-Zhi
Title: Chairman of the Board


MOTOROLA (CHINA) INVESTMENT LIMITED


By:    /s/ Larry Cheng
      --------------------------
Name:  Larry Cheng
Title: Authorized Representative


SCG (CHINA) HOLDING CORPORATION


By:    /s/ Steve Hanson
      --------------------------
Name:  Steve Hanson
Title: President



                                       37                 JOINT VENTURE CONTRACT
<PAGE>
                                   APPENDIX A

                         LIST OF JOINT VENTURE PRODUCTS


Assembly Test Products

SOT23, SC59, SC88, SC75, SC89, SC70, SOD323, SOIC, SOD523, SOD723 and other
miniature surface mount semiconductor packages.


Wafer Fab Products
IC and Discrete wafers


                                       A
<PAGE>
                                   APPENDIX B

                       SCHEDULE OF CAPITAL CONTRIBUTIONS


The total amount of the registered capital of the Company is US$101.86 million.
As of the date hereof, the Parties have paid in US$52,039,207. The specific
timing and amounts for each future installment payment by each Party shall be
determined by the decision of the Board of the Company.


                                       B

</TEXT>
</DOCUMENT>
