§ 1 
(General Provisions)

(1) Nominal Amount and Denomination. This issue by Infineon Technologies Holding B. V. (the "Issuer"), a private limited liability company incorporated under the laws of The Netherlands, of 4.25% Guaranteed Subordinated Convertible Notes due 2007 in the aggregate nominal amount of€1,000,000,000 (in words: euro one billion) is divided into notes in bearer form with a nominal amount of€50,000 (the "Principal Amount") each which rank pari passu among themselves (the "Notes").

(2) Form.

(a) The Notes are initially represented by a temporary global note (the "Temporary Global Note") in bearer form without interest coupons. The Temporary Global Note will be exchangeable for a permanent global note (the "Permanent Global Note", and each of the Temporary Global Note and the Permanent Global Note being referred to herein as a "Global Note") in bearer form without interest coupons. Each Global Note will be deposited with a common depositary for Euro clear Bank S. A./N. V. as operator of the Euro clear System ("Euroclear") and Clear stream Banking, société anonyme ("Clearstream", and together with Euro clear the "Clearing System"). Each Global Note shall be manually signed by two authorised representatives of the Issuer and manually authenticated by or on behalf of the Principal Paying Agent (§ 18 (1)). Definitive certificates representing individual Notes and interest coupons shall not be issued.

(b) The Temporary Global Note shall be available for exchange for the Permanent Global Note not earlier than 40 days after the issue of the Temporary Global Note. Such exchange shall only be made upon delivery of certifications to the effect that none of the beneficial owners of the Notes represented by the Temporary Global Note is a US person as defined in the US Internal Revenue Code (except that such beneficial owners may be financial institutions as defined in US Treasury Regulations Section 1.165-12 (c) (1) (v) or certain persons holding Notes through such financial institutions). Payments in respect of the Notes represented by the Temporary Global Note will be made only after delivery of such certifications.

(3) Custody and Clearing. The respective Global Note will be kept in custody by the Clearing System until all obligations of the Issuer under the Notes have been satisfied. The Notes shall be transferable by appropriate entries in securities deposit accounts in accordance with the applicable rules of the Clearing System.

§ 2 
(Subordination of Payment Claims, Status of the Notes; Condition Subsequent of Subordination; Negative Pledge of Issuer)

(1) Subordination of Payment Claims, Status of the Notes. The claims of the holders of the Notes ("Note holders") for payment of principal or interest or any other amounts arising under the Notes shall be subordinated to the claims of all other creditors of the Issuer which are senior and not subordinated. Such subordination shall mean that in any event of liquidation, bankruptcy or other proceedings to avoid bankruptcy any payment which might become due under the Notes shall be made only after all claims against the Issuer which are senior and not subordinated have been satisfied. Any right to set-off claims arising from the Notes against claims of the Issuer shall be excluded. The Notes are unsecured obligations of the Issuer ranking pari passu among themselves and at least pari passu with all other present and future unsecured and subordinated obligations of the Issuer, save for such obligations as may be preferred by applicable law.

(2) Condition Subsequent of Subordination. The subordination specified in § 2 (1) shall be subject to the condition subsequent (auflȍsende Bedingung) of the exercise of the Conversion Right (§ 7) and terminate with effect as of the Issue Date (§ 3 (1)) on the day immediately prior to the Conversion Date (§ 8 (4)) at 24 hours. The exercise of the Conversion Right (§ 7) in reliance on § 194 (1) sentence 2 of the German Stock Corporation Act (Aktiengesetz) shall not be affected by the subordination.

(3) Negative Pledge.So long as any Notes shall remain outstanding, but only up to the time at which all amounts payable to the Note holders under the Notes in accordance with these Conditions of Issue have been placed at the disposal of the Principal Paying Agent (§ 18 (1)) and all obligations pursuant to § 7 have been fulfilled, the Issuer undertakes not to secure any subordinated Capital Market Indebtedness, including any guarantees or other indemnities assumed in respect thereof, upon any of its assets without at the same time providing that the Note holders (§ 2 (1)) share equally and rateably in such security. The undertaking pursuant to sentence 1 shall not apply to a security which is (i) mandatory according to applicable laws or (ii) required as a prerequisite for governmental approvals or (iii) provided by the Issuer over any claims of the Issuer against any of its consolidated subsidiaries or any third party, which claims exist now or arise at any time in the future, as a result of the passing on of the proceeds from the sale by the Issuer of any Notes, provided that any such security serves to secure obligations under such Notes of the Issuer. Any security which is to be provided pursuant to sentence 1 may also be provided to a person acting as trustee for the Note holders.

(4) Capital Market Indebtedness. For the purpose of these Conditions of Issue "Capital Market Indebtedness" means any obligation to repay money that is borrowed through the issuance of bonds, notes or other debt securities which are capable of being listed or traded on a stock exchange or other recognised securities market; except as expressly provided above, it does not include any off-balance sheet assets and obligations.

§ 3 
(Interest)

(1) Interest Rate. The Notes shall bear interest on their Principal Amount at the rate of 4.25% per annum from and including February 6, 2002 (the "Issue Date"). Interest shall be payable annually in arrear in the amount of€2,125 per Note on February 6 of each year (each a "Coupon Date"), commencing on February 6, 2003. The last Coupon Date shall be the Maturity Date (§ 4 (1)) (unless the Notes have previously been redeemed, converted or purchased and cancelled). Interest shall cease to accrue as of the beginning of the date on which the Notes become due for redemption. In the event of an exercise of the Conversion Right (§ 7 (1)) in respect of any Note, interest shall cease to accrue on that Note as of the end of the day immediately preceding the last Coupon Date prior to the Conversion Date (§ 8 (4)) or, if there was no Coupon Date, the Issue Date.

(2) Late Payments of Principal. Should the Issuer fail to redeem the Notes when due, interest shall continue to accrue at the rate of 4.25% per annum on their Principal Amount until (but not including) the date of actual redemption of the Notes.

(3) Day Count Fraction. If interest is to be calculated for a period of less than one year, it shall be calculated on the basis of the actual number of days elapsed, divided by 365 (or, if any portion of that period falls in a leap year, the sum of (i) the actual number of days in that period falling in a leap year divided by 366 and (ii) the actual number of days in that period falling in a non-leap year divided by 365).

§ 4 
(Redemption at Maturity for Cash; Repurchase; Early Redemption)

(1) Redemption at Maturity for Cash. The Issuer shall redeem the Notes for cash at their Principal Amount together with interest accrued thereon until (but not including) the date of such redemption on February 6, 2007 (the "Maturity Date"), unless they have previously been redeemed, converted or purchased and cancelled.

(2) Repurchase. The Issuer and/or Infineon Technologies AG, Munich ("Infineon Technologies AG" or the "Guarantor"), or any of their affiliates within the meaning of § 15 German Stock Corporation Act shall be entitled at any time to purchase Notes in the market or otherwise for cancellation.

(3) Early Redemption at the Option of the Issuer for Reasons of Share Price. The Issuer may at its option, on giving not less than 20 nor more than 40 days' notice by publication in accordance with § 19, redeem the Notes outstanding in whole, but not in part, at their Principal Amount together with interest accrued thereon until (but not including) the date of redemption, if the XETRA-Quotation (as defined below) of the Shares (§ 7 (1)) on each of 15 trading days (each a "Stock Exchange Trading Day") on the Frankfurt Stock Exchange (the "FSE") during a period of 30 consecutive Stock Exchange Trading Days commencing on or after February 6, 2005, exceeds 5% of the Conversion Price pursuant to § 7 (1). Such notice of early redemption shall be irrevocable and must be given within five Business Days (§ 5 (3)) after the respective last day of the period of 30 consecutive Stock Exchange Trading Days referred to in sentence 1; upon the expiration of such five Business Day period such right shall in respect of such period of 30 consecutive Stock Exchange Trading Days expire. If the end of the notice period falls within an Excluded Period (§ 7 (4)), then the notice shall become effective only five Business Days after the end of that Excluded Period. The notice pursuant to sentence 1 shall determine the date of redemption, the aggregate principal amount of Notes to be redeemed and state the facts which establish the right of the Issuer to redeem the Notes.

"XETRA-Quotation" on any day means the closing quotation in XETRA of the Shares (§ 7 (1)) entitled at the time of fixing of the quotation to full dividend rights or, in the case that no such quotation is reported, the official quotation (Einheitskurs) on the FSE or, in the case that no official quotation is reported, the last reported per share sale price on such day of the Shares on the FSE or, if no sale price is reported, the average of the last bid and ask prices. If no bid and ask prices are available, the Principal Conversion Agent (§ 18 (1)) shall determine the XETRA-Quotation on the basis of such information as it considers appropriate.

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