JOINT VENTURE CONTRACT

A

List of the Joint Venture Products

B

Schedule of Capital Contributions

(a)

“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.

(b)

“Articles of Association” means the Articles of Association of the Company executed on March 1, 1995 and as amended and restated.

(c)

“Board” and “Board of Directors” mean the board of directors of the Company.

(d)

“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.

(e)

“China” and “PRC” mean the People’s Republic of China excluding Hong Kong, Macau and Taiwan for purposes of this Contract.

(f)

“Company” means Leshan-Phoenix Semiconductor Company Limited.

(g)

“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.

(h)

“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.

(i)

“Export-oriented Enterprise” means the status of the Company to be granted by the Examination and Approval Authority under PRC law.

(j)

“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.

(k)

“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.

(l)

“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.

(m)

“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.

(n)

“Management Personnel” means the Company’s General Manager, Deputy General Manager and other management personnel designated by the Board.

(o)

“ON” means Party B or any of its Affiliates.

(p)

“Plant” means the Company’s manufacturing facilities located at the Site where the Joint Venture Products will be produced.

(q)

“Renminbi” or “RMB” means the lawful currency of China.

(r)

“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.

(s)

“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.

(t)

“Services Contract” means the contract for the provision of services between the Company and Party A.

(u)

“Site” means the parcels of land located in Leshan, Sichuan Province, on which the facilities of the Company are situated.

(v)

“Technologically Advanced Enterprise” means the status of the Company to be granted by the Chinese government under PRC law

(w)

“Technology” has the meaning as defined in the Technology License Contract, as amended.

(x)

“Technology License Contract” means the technology license contract dated February 24, 1995 as amended so far under which the Company is the licensee.

(y)

“Third Party” means any entity or person other than the Parties or their Affiliates.

(z)

“United States Dollars” or “US$” means the lawful currency of the United States of America.

(aa)

“Working Personnel” means all employees and staff of the Company, other than the Management Personnel.

(bb)

“Wafer Fab Products” means the wafer fab products as listed in Appendix A.

1.02

Interpretation

2.01

The Parties

(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.

(b)

Party B, 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.

2.02

Representations, Warranties and Undertakings

(a)

Each of Party A and Party B hereby represents, warrants and undertakes to the other Party 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;

(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 Party, and no document previously provided by it to the other Party 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 Party with a certified copy of its business license.

2.03

Change of Legal Representative

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

3.03

Laws and Decrees

3.04

Code of Conduct

4.01

Purpose

4.02

Scope of Business

4.03

Scale of Production

5.01

Total Investment

5.02

Registered Capital

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 Sixty-Two Million One Hundred Thirty-Four Thousand and Six Hundred United States Dollars (US$62,134,600), representing a sixty one percent (61%) share of the registered capital of the Company.

(c)

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 Party shall have the right to terminate this Contract pursuant to Article 18.01(c)(ix) hereof.

(c)

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. If it results in changing the payment method of the capital contribution, it shall apply to the Examination and Approval Authority for approval.