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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Diodes Incorporated
-------------------
(Name of Issuer)
Common Stock, par value $0.66 2/3
---------------------------------
(Title of Class of Securities)
25443 10 1
----------------
(CUSIP Number)
Avi D. Eden, Esq.
Vishay Intertechnology, Inc.
63 Lincoln Highway
Malvern, PA 19355
(610) 644-1300
--------------------------------------
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
with a copy to:
Mark B. Segall, Esq.
Kramer, Levin, Naftalis & Frankel
919 Third Avenue, New York, NY 10022
(212) 715-9100
July 17, 1997
---------------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box: [ ]
Page 1 of 7 Pages
Exhibit Index appears on page 7
SCHEDULE 13D
CUSIP No. 25443 10 1
- --------------------------------------------------------------------------------
1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Vishay Intertechnology, Inc. (I.R.S. employer
identification no. 38-1686453)
- --------------------------------------------------------------------------------
2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3) SEC USE ONLY
- --------------------------------------------------------------------------------
4) SOURCE OF FUNDS
BK (See Item 3)
- --------------------------------------------------------------------------------
5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7) SOLE VOTING POWER
Not Applicable
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8) SHARED VOTING POWER
OWNED BY 1,995,093 shares of Common Stock as of the Closing Date
EACH REPORTING (as defined in Item 1)
PERSON --------------------------------------------------------------
WITH 9) SOLE DISPOSITIVE POWER
Not Applicable
--------------------------------------------------------------
10) SHARED DISPOSITIVE POWER
1,995,093 shares of Common Stock as of the
Closing Date
- --------------------------------------------------------------------------------
11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,995,093 shares of Common Stock will be deemed to be beneficially
owned by Vishay as of the Closing Date
- --------------------------------------------------------------------------------
12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
- --------------------------------------------------------------------------------
13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
40.2% (See Item 5)
- --------------------------------------------------------------------------------
14) TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
Page 2 of 7 Pages
SCHEDULE 13D
------------
ITEM 1. SECURITY AND ISSUER.
-------------------
This Statement on Schedule 13D (the "Statement") relates to common
stock, $0.66 2/3 par value per share (the "Common Stock") of Diodes
Incorporated, a Delaware corporation (the "Company"). Pursuant to the Stock
Purchase Agreement, dated April 25, 1997, among Lite-on Power Semiconductor
Corporation ("LPSC"), Silitek Corporation ("Silitek"), Lite-on Technology
Corporation ("LTC"), Dyna Investment Co., Ltd. ("Dyna"), Lite-on Inc.
("Lite-on") and other shareholders listed on Schedule A thereto, as Sellers, and
Vishay Intertechnology, Inc. ("Vishay"), as Purchaser (the "Stock Purchase
Agreement")(attached hereto as Exhibit A) and the Joint Venture Agreement, dated
April 25, 1997, between Vishay and Silitek and certain other shareholders of
LPSC (the "Joint Venture Agreement")(attached hereto as Exhibit B), which
agreements were consummated on July 17, 1997 (the "Closing Date"), Vishay is
deemed to beneficially own approximately 1,995,093 shares of Common Stock of the
Company. The principal executive offices of the Company are located at 3050 East
Hillcrest Drive, Westlake Village, California 91362.
ITEM 2. IDENTITY AND BACKGROUND.
------------------------
This Statement is being filed by Vishay. Vishay is a corporation
organized under the laws of the State of Delaware and is principally engaged in
the business of manufacturing, selling and distributing discrete passive
electronic components. The address of its principal business and principal
office is 63 Lincoln Highway, Malvern, Pennsylvania 19355.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
--------------------------------------------------
Pursuant to the terms of the Stock Purchase Agreement, Vishay, through
Singapore holding companies, acquired more than 99% of the issued and
outstanding shares of capital stock of LPSC, which owns 40.2% of the outstanding
Common Stock of the Company, for cash consideration of US$200,000,000. The
purchase price was funded by borrowings under Vishay's existing credit facility
with its lending banks led by Comerica Bank, N.A. Concurrently, pursuant to the
terms of the Joint Venture Agreement, which was amended as of July 17, 1997,
Vishay's newly-formed, wholly-owned subsidiary, incorporated in Singapore (the
"Holding Company"), through the Holding Company's 50% owned subsidiary (the
"Joint Venture Company") (of which the other 50% was directly owned by Vishay),
purchased 100% of the shares of LPSC, and (b) Silitek and certain other
shareholders of LPSC, through a new company ("Newco"), purchased from Vishay 35%
of Vishay's interest in the Holding Company and 17.5% of Vishay's interest in
the Joint Venture Company for consideration of $70 million.
Page 3 of 7 Pages
ITEM 4. PURPOSE OF TRANSACTION.
----------------------
(a) Vishay acquired beneficial ownership of the shares of Common Stock
of the Company to which the Statement relates for investment. Subject to
approval of the Company's Board of Directors, Vishay or an affiliate of Vishay
may purchase additional shares of Common Stock of the Company through privately
negotiated transactions, although Vishay does not have any immediate plans to do
so. Such purchases may result in Vishay being deemed to own beneficially more
than 50% of the shares of Common Stock of the Company on a fully diluted basis.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
------------------------------------
(a) As of the Closing Date, Vishay is deemed to beneficially own
approximately 1,995,093 shares of Common Stock which represent approximately
40.2% of the shares of Common Stock of the Company currently issued and
outstanding (excluding 717,115 treasury shares).
(b) As of the Closing Date, Vishay will have shared dispositive power
to direct the vote of 1,995,093 shares of Common Stock and shared power to
direct the disposition of 1,995,093 shares of Common Stock. Vishay will share
the power to direct the vote and disposition of the shares of Common Stock with
its joint venture partner, Newco, pursuant to the terms of the Joint Venture
Agreement.
(c) Vishay has not effected any other transactions in the shares of
Common Stock during the past 60 days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
------------------------------------------
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.
------------------------------------------------------
See Item 3.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
--------------------------------
Stock Purchase Agreement
Joint Venture Agreement
Amendment No. 1 to Joint Venture Agreement
Page 4 of 7 Pages
SCHEDULE I
Directors and Executive Officers of Vishay: The name, business address, present
principal occupation or employment and citizenship of each of the directors and
executive officers of Vishay, and the name of the principal business and address
of any corporation or other entity where such employment is conducted, are set
forth below:
Name and Principal Occupation
Address of Positions or Employment if
Principal with different from the
Business Vishay Citizenship positions with Vishay
---------- --------- ----------- ---------------------
Felix Zandman Chairman of the US
Board, President,
CEO and Director
Avi D. Eden Vice Chairman of US
the Board,
Executive Vice
President and
Director
Donald G. Executive Vice US
Alfson President, Chief
Business
Development
Officer and
Director
Robert A. Senior Vice US
Freece President and
Director
Richard N. Executive Vice US
Grubb President,
Treasurer, Chief
Financial Officer
and Director
Eliyahu Hurvitz Director Israel President
and CEO of
Teva Pharma
ceuticals
Industries
Ltd.
Gerald Paul Chief Operating
Officer, Executive
Vice President and
Director
Edward B. Shils Director US Consultant
Luella B. Director US Investor
Slaner
Mark I. Solomon Director US Chairman
of CMS
Companies
Jean-Claude Tine Director France Investor
Page 5 of 7 Pages
SIGNATURE
---------
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
Statement is true, complete and correct.
Dated: July 28, 1997
VISHAY INTERTECHNOLOGY, INC.
By: /s/ Richard N. Grubb
---------------------------
Name: Richard N. Grubb
Title: Executive Vice President
and Chief Financial Officer
Page 6 of 7 Pages
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
A Stock Purchase Agreement
B Joint Venture Agreement
C Amendment No. 1 to Joint Venture
Agreement
Page 7 of 7 Pages
EXHIBIT A
============================================
STOCK PURCHASE AGREEMENT
AMONG
LITE-ON POWER SEMICONDUCTOR CORPORATION,
SILITEK CORPORATION,
LITE-ON TECHNOLOGY CORPORATION,
DYNA INVESTMENT CO., LTD.,
LITE-ON INC.
AND
OTHER SHAREHOLDERS
AS SELLERS
AND
VISHAY INTERTECHNOLOGY, INC.
AS PURCHASER
DATED AS OF APRIL 25, 1997
============================================
TABLE OF CONTENTS
SECTION 1 - PURCHASE AND SALE OF SHARES................................... 1
1.1 PURCHASE AND SALE OF SHARES............................. 1
1.2 PURCHASE PRICE.......................................... 1
1.3 ALLOCATION OF PURCHASE PRICE............................ 2
1.4 DE MINIMIS EXCEPTION.................................... 2
1.5 DEPOSIT................................................. 2
SECTION 2 - REPRESENTATIONS AND WARRANTIES OF SELLERS..................... 2
2.1 ORGANIZATION, STANDING AND QUALIFICATION................ 2
2.2 BUSINESS................................................ 2
2.3 EXECUTION; AUTHORITY; ENFORCEABILITY.................... 3
2.4 CONSENTS; REGULATORY APPROVALS; NO CONFLICTS............ 3
2.5 BOOKS AND RECORDS....................................... 3
2.6 CAPITALIZATION.......................................... 4
2.7 OWNERSHIP OF SHARES..................................... 4
2.8 COMPLIANCE WITH LAWS AND OTHER INSTRUMENTS.............. 4
2.9 FINANCIAL STATEMENTS.................................... 4
2.10 ABSENCE OF UNDISCLOSED LIABILITIES...................... 4
2.11 ABSENCE OF GUARANTEES................................... 5
2.12 ABSENCE OF CHANGES...................................... 5
2.13 TITLE TO AND CONDITION OF ASSETS........................ 5
2.14 REAL PROPERTY........................................... 5
2.15 SCHEDULES............................................... 5
2.16 PRODUCT RETURNS; WARRANTIES............................. 6
2.17 INSURANCE............................................... 6
2.18 INTELLECTUAL PROPERTIES................................. 6
2.19 TAX MATTERS............................................. 7
2.20 LITIGATION.............................................. 8
2.21 ENVIRONMENTAL MATTERS................................... 8
2.22 EMPLOYMENT MATTERS...................................... 8
2.23 EMPLOYEE BENEFITS....................................... 9
2.24 TRANSACTIONS WITH CERTAIN PERSONS....................... 10
2.25 ABSENCE OF CERTAIN BUSINESS PRACTICES................... 10
2.26 DISCLOSURE.............................................. 10
SECTION 3 - REPRESENTATIONS AND WARRANTIES OF PURCHASER................... 10
3.1 ORGANIZATION AND STANDING............................... 10
3.2 EXECUTION; AUTHORITY; ENFORCEABILITY.................... 10
3.3 NO CONFLICTS............................................ 11
SECTION 4 - CONDUCT OF BUSINESS PRIOR TO CLOSING.......................... 11
4.1 CONDUCT OF BUSINESS PRIOR TO CLOSING.................... 11
i
SECTION 5 - CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS............... 12
SECTION 6 - CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS.................. 13
SECTION 7 - INDEMNIFICATION............................................... 14
7.1 SURVIVAL OF SELLERS' REPRESENTATIONS AND WARRANTIES..... 14
7.2 SURVIVAL OF PURCHASER'S REPRESENTATIONS AND WARRANTIES.. 14
7.3 INDEMNIFICATION BY SELLERS.............................. 14
7.4 PROCEDURE FOR INDEMNIFICATION........................... 15
7.5 REMEDIES CUMULATIVE..................................... 15
7.6 LIMITATIONS ON INDEMNIFICATION.......................... 15
SECTION 8 - CLOSING PROCEDURE............................................. 16
8.1 CLOSING................................................. 16
8.2 OBLIGATIONS AT CLOSING.................................. 16
SECTION 9 - TERMINATION................................................... 17
SECTION 10 - MISCELLANEOUS................................................ 18
10.1 PUBLIC NOTICE........................................... 18
10.2 ENTIRE AGREEMENT........................................ 18
10.3 EXPENSES................................................ 18
10.4 FURTHER ASSURANCES...................................... 18
10.5 NOTICES................................................. 18
10.6 GOVERNING LAW........................................... 19
10.7 DISPUTES................................................ 19
10.8 ASSIGNMENT.............................................. 19
10.9 AMENDMENT............................................... 20
10.10 WAIVER.................................................. 20
10.11 SEVERABILITY............................................ 20
10.12 COUNTERPARTS............................................ 20
ii
(a) Schedules.
Schedule A - Other Shareholders
Schedule B - Subsidiaries
Schedule 2.2 - Business
Schedule 2.4 - Consents; Regulatory Approvals; No Conflicts
Schedule 2.6 - Capitalization
Schedule 2.7 - Ownership of Shares
Schedule 2.8 - Compliance with Laws and Other Instruments
Schedule 2.10 - Undisclosed Liabilities
Schedule 2.11 - Guarantees
Schedule 2.12 - Changes
Schedule 2.13 - Title to and Condition of Assets
Schedule 2.14 - Real Property
Schedule 2.15 - Schedules
(a) Proprietary Rights
(b) Insurance Policies
(c) List of Customers and Distributors
(d) Contracts Evidencing Indebtedness
Schedule 2.16 - Product Returns; Warranties
Schedule 2. - Intellectual Property
Schedule 2.19 - Tax Matters
Schedule 2.20 - Litigation
Schedule 2.21 - Environmental Matters
Schedule 2.22 - Employment Matters
Schedule 2.23 - Employee Benefits
Schedule 2.24 - Transactions with Certain Persons
(b) Exhibits.
Exhibit A - Joint Venture Agreement
iii
STOCK PURCHASE AGREEMENT
Agreement dated April 25, 1997 by and among Vishay Intertechnology,
Inc., a Delaware U.S.A. corporation (by itself, or through a wholly-owned
subsidiary, the "Purchaser"), Lite-On Power Semiconductor Corporation, a
Republic of China company ("LPSC"), Silitek Corporation, a Republic of China
("ROC") company, Lite-On Technology Corporation, a ROC company, Dyna Investment
Co., Ltd., a ROC company and Lite-On Inc., a ROC company (collectively,
"Sellers") and those individuals listed on SCHEDULE A hereto (the "Other
Shareholders").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, LPSC by itself and through its direct and indirect
subsidiaries as listed on SCHEDULE B hereto (the "Subsidiaries" and
collectively, the "Company") is engaged in the business of manufacturing,
selling and distributing discrete power semiconductor devices (the "Business");
WHEREAS, Sellers and the Other Shareholders collectively are the
registered and beneficial owners of 100% of the issued and outstanding shares of
capital stock of LPSC (the "Shares");
WHEREAS, Purchaser desires to purchase from Sellers and the Other
Shareholders, and Sellers and the Other Shareholders desire to sell to
Purchaser, the Shares on the terms and subject to the conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by each of the parties
hereto, the parties, intending to be legally bound, do hereby covenant and agree
as follows:
SECTION 1 - PURCHASE AND SALE OF SHARES
1.1 PURCHASE AND SALE OF SHARES. Subject to this Agreement, on the Closing Date
(as defined in Section 8 below) Sellers and the Other Shareholders hereby agree
to sell and deliver to Purchaser, and Purchaser hereby agrees to purchase from
Sellers and the Other Shareholders, the Shares. The Shares shall be transferred
free and clear of all liens, pledges, encumbrances and claims of any nature
whatsoever ("Encumbrances").
1.2 PURCHASE PRICE. In consideration of the sale and delivery of the Shares, and
in reliance upon the representations and warranties made herein by Sellers,
Purchaser will, in full payment therefor, deliver to Silitek Corporation on
behalf of and for the benefit of Sellers and the Other Shareholders ("Sellers'
Agent") on the Closing Date a total purchase price of US$200,000,000 (the
"Purchase Price") by wire transfer to the bank account specified by Sellers'
Agent at least 48 hours prior to the Closing.
1.3 ALLOCATION OF PURCHASE PRICE. Sellers' Agent shall allocate and distribute
the Purchase Price among Sellers and the Other Shareholders. Purchaser shall be
able to rely conclusively on instructions it receives from Sellers' Agent with
respect to payment of the Purchase Price. Upon payment of the Purchase Price as
directed by Sellers' Agent, Purchaser shall have fully satisfied its obligations
to Sellers and the Other Shareholders hereunder. Sellers' Agent shall indemnify
and hold harmless Purchaser from and against any damage, liability, loss, cost
or expense (including reasonable attorneys' fees) resulting from or arising out
of any claim by any Seller, Other Shareholder or any other party that such
Seller's or Other Shareholder's portion of the Purchase Price was not
satisfactorily delivered.
1.4 DE MINIMIS EXCEPTION. Sellers shall use their best efforts to ensure that
100% of the shares of capital stock (including shares with instruments of
transfer as set forth in Section 8.2) of LPSC are delivered to Purchaser on the
Closing Date. However, Sellers and the Other Shareholders shall be deemed to
have fulfilled their sale and delivery obligations hereunder so long as at least
98% of the shares of capital stock of LPSC are delivered at the Closing.
1.5 DEPOSIT. Concurrently with the execution and delivery of this Agreement,
Purchaser is delivering to Comerica Bank N.A. ("Escrow Agent") US$2,000,000 in
immediately available funds by wire transfer to an account designated by Escrow
Agent (the "Deposit"). The Deposit (and any interest earned thereon) shall be
returned (in the same currency paid) to Purchaser simultaneously with the
payment of the Purchase Price payable pursuant to Section 1.2 at the Closing or
in the event the Closing fails to occur, for whatever reason.
SECTION 2 - REPRESENTATIONS AND WARRANTIES OF SELLERS
LPSC and Sellers jointly and severally represent and warrant to
Purchaser that:
2.1 ORGANIZATION, STANDING AND QUALIFICATION. LPSC and each of its Subsidiaries
is duly organized and is validly existing and in good standing (to the extent
that the concept of good standing exists in the relevant jurisdiction) under the
laws of the jurisdiction of its organization as listed on Schedule B. LPSC and
each of its Subsidiaries has all necessary corporate power, authority and
capacity to own, lease or operate its assets and properties and to carry on the
Business as presently conducted. LPSC and each of its Subsidiaries is duly
qualified to do business and is in good standing as a foreign company in each
jurisdiction in which the nature of the activities conducted by it or the
character of the assets or properties owned, leased or operated by it require
such qualification, except where the failure to be so qualified would not have a
material adverse effect on the Business. Other than the Subsidiaries listed on
Schedule B, the Company does not own, directly or indirectly, any other entity,
and the Company has not agreed to acquire any capital stock of any other entity
other than investments in, and purchases of, securities for passive investment
purposes in the ordinary course which, in any event, do not account for more
than a de minimis amount.
2.2 BUSINESS. Except as set forth in Schedule 2.2, the Company is not a party to
any contract which restricts the freedom of the Company to carry on the Business
and the business contemplated by the transactions to be consummated hereby,
including any contract which contains covenants by the Company not to compete in
any line of business with any other person, other
2
than the joint venture agreement described in Section 8.2(c) (the "Joint Venture
Agreement"). Sellers and the Other Shareholders (except for those holding a de
minimis number of shares of capital stock of LPSC) do not conduct the Business
other than through the Company. Following the Closing, Purchaser will be able to
conduct the Business as it was conducted prior to the Closing.
2.3 EXECUTION; AUTHORITY; ENFORCEABILITY. This Agreement has been duly and
validly executed and delivered by each Seller and at or prior to Closing by
Sellers' Agent on behalf of the Other Shareholders. This Agreement constitutes
the legal, valid and binding obligation of each Seller and at Closing will
constitute the legal, valid and binding obligation of the Other Shareholders,
enforceable against each of them in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and
other similar laws relating to or affecting creditors' rights generally or by
general principles of equity. Each Seller and Other Shareholder has the absolute
and unrestricted right, power, authority and capacity to execute and deliver,
and to perform their respective obligations under this Agreement.
2.4 CONSENTS; REGULATORY APPROVALS; NO CONFLICTS. Except as set forth in
Schedule 2.4, no approvals, filings or registrations with any governmental
authority, notices to any party or other consents are required to be made or
obtained prior to the consummation of the transactions contemplated hereby.
After giving effect to the information set forth in Schedule 2.4, the execution
and delivery of this Agreement by Sellers and Sellers' Agent, the consummation
of the transactions contemplated hereby and the fulfillment by Sellers and the
Other Shareholders of the terms, conditions and provisions hereof does not and
will not, directly or indirectly:
(a) conflict with or violate or result in the default, or give
rise to or accelerate any obligations of the Company, or any
Seller under: (i) any law applicable to the Company, any
Seller, or the Business, (ii) any court or governmental agency
order, or give any such body the right to terminate or modify
any approval or consent held by the Company, (iii) the
constituent documents of LPSC, and each of its subsidiaries,
and (iv) the provisions of any material contract to which the
Company is a party or by the assets or properties of the
Company are bound;
(b) relieve any other party to any material contract with or of
the Company;
(c) result in the creation or imposition of any material
Encumbrance on the assets or properties owned, leased or
operated by the Company or on the Shares; or
(d) cause Purchaser or the Company to become subject to, or to
become liable for the payment of, any taxes.
2.5 BOOKS AND RECORDS. All constituent documents, business licenses, books of
account, minute books, stock certificate books, stock transfer ledgers and other
records of the Company (collectively, the "Records") have been maintained in
accordance with sound business practices and applicable legal requirements. The
Records are complete and accurate in all material respects and contain all
material matters required to be dealt with in such Records.
3
2.6 CAPITALIZATION. The capitalization of LPSC and each Subsidiary is as set
forth on Schedule 2.6. Except for up to US$11,000,000 in capital contributions
intended to be made into Shanghai Kai-Hong Electronic Co., Ltd., by the end of
April 1998, the Shares and the shares of capital stock of each Subsidiary have
been duly and validly issued, and are fully paid and non-assessable. Except as
disclosed in Schedule 2.6, there are no outstanding (a) securities convertible
into or exchangeable or exercisable for any shares of the capital stock of LPSC
or any Subsidiary or (b) subscriptions, options, warrants, calls, preemptive
rights or other rights to purchase or subscribe for or otherwise acquire capital
stock of LPSC or any Subsidiary.
2.7 OWNERSHIP OF SHARES. Sellers and the Other Shareholders are the record and
beneficial owners of and have good and marketable title to the Shares. Upon
consummation of the transactions contemplated hereby, Purchaser will have valid
title to the Shares free and clear of any Encumbrance. Except as set forth on
Schedule 2.7 or to the extent reflected or reserved against in the Financial
Statements for the fiscal year ended December 31, 1996, LPSC and each
Subsidiary, as the case may be, is the record and beneficial owner of, and has
good and marketable title to, the shares of capital stock of each Subsidiary
free and clear of all Encumbrances.
2.8 COMPLIANCE WITH LAWS AND OTHER INSTRUMENTS. Except as set forth on Schedule
2.8, (a) the Company has at all times conducted the Business in compliance with
all laws, licenses, approvals, notices and other requirements applicable to the
Business, except where the failure to so comply would not have a material
adverse effect on the Company; (b) neither the ownership nor use of its assets
or properties nor the conduct of its Business by the Company conflicts with the
rights of any other party or violates, or with or without the giving of notice
or lapse of time, will violate, conflict with or result in a breach or default,
right to accelerate or loss of rights under, any terms or provisions of LPSC's
or any Subsidiary's constituent documents or to LPSC's and Sellers' knowledge,
any order, judgment, restriction or decree to which the Company is a party or by
which it or its properties are bound or affected where such conflict, violation
or breach would have a material adverse effect on the Company; and (c) none of
the Sellers or the Company has received any notice of violation of any
applicable regulation, ordinance or other law which is applicable and material
to the Business, operations, properties or assets of the Company.
2.9 FINANCIAL STATEMENTS. The Company has delivered to Purchaser copies of the
audited financial statements of the Company for the fiscal years 1994 through
1996 (the "Financial Statements"). The Financial Statements present fairly, in
all material respects, the financial position of the Company as at their
respective dates and for the periods covered thereby and have been prepared from
the books and records of the Company in accordance with ROC generally accepted
accounting principles, consistently applied ("GAAP"). The statements of earnings
do not contain any items of special or nonrecurring income or loss or any other
income not earned or loss not incurred in the ordinary course of business,
except as expressly specified therein.
2.10 ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth on Schedule 2.10 or
to the extent reflected or reserved against in the Financial Statements for the
fiscal year ended December 31, 1996 or incurred since such date in the ordinary
course of business consistent with past practice, the Company has no direct or
indirect liabilities of any nature whatsoever.
4
2.11 ABSENCE OF GUARANTEES. Except as set forth on Schedule 2.11 or to the
extent reflected or reserved against in the Financial Statements for the fiscal
year ended December 31, 1996, the Company has not given or agreed to give, or is
a party to or bound by, any guarantee of indebtedness, indemnity, bond,
suretyship or other obligation of any party and none of the liabilities of the
Company is guaranteed by any other party.
2.12 ABSENCE OF CHANGES. Except in connection with the transactions contemplated
by this Agreement and the Joint Venture Agreement or as set forth on Schedule
2.12, since December 31, 1996, the Company (a) has conducted the Business only
in the ordinary and normal course consistent with past practice; (b) has not
entered into any transaction, undertaken any activity or conducted the Business
not in the ordinary and normal course of the Business consistent with past
practice; and (c) there has not been any material adverse change in the
operations, assets or financial condition of the Company or, to LPSC's or
Sellers' knowledge, the future prospects of the Company.
2.13 TITLE TO AND CONDITION OF ASSETS. Except as set forth on Schedule 2.13 or
to the extent reflected or reserved against in the Financial Statements for the
fiscal year ended December 31, 1996, the Company owns and has good and
marketable title to all of its assets (whether tangible or intangible) free and
clear from all Encumbrances other than (i) Encumbrances that do not materially
interfere with the present use by the Company of the property subject thereto or
affected thereby and (ii) Encumbrances for taxes, assessments or governmental
charges, or landlords', mechanics', workmen's, materialmen's or similar liens,
in each case that are not delinquent or which are being contested in good faith.
All of the assets owned, leased or used by the Company are in good operating
condition and repair (normal wear and tear excepted), are suitable for the
purposes used and are adequate and sufficient for all current operations of the
Company.
2.14 REAL PROPERTY. Except as set forth on Schedule 2.14 or to the extent
reflected or reserved against in the Financial Statements for the fiscal year
ended December 31, 1996, (a) the Company does not own or lease any property or
any interest in any property; and (b) the Company has good and marketable title
to all the property it owns, free and clear of all Encumbrances other than
Encumbrances that are reflected in the title reports, if any, delivered or
otherwise made available to the Purchaser in connection with the transactions
contemplated hereby. Except with respect to the real property leases in the
People's Republic of China, which are subject to the uncertainties of Chinese
real estate law, all the Company's real property leases are in full force and
effect.
2.15 SCHEDULES. Schedule 2.15 contains, as of the date hereof, an accurate a
And complete list and description of:
(a) All material patents, patent applications, patent licenses,
trademarks, trademark registrations, and applications
therefor, certification marks, distinctive markings, service
marks, service names, trade names, brand names, labels,
business names, copyrights and copyright registrations, and
applications therefor, exploitation arrangements, inventions
and industrial designs or other marks (collectively,
"Proprietary Rights") wholly or partially owned or held by the
Company or used in the operation of the Business.
5
(b) A summary of all fire, theft, property, casualty, liability,
workers' compensation, directors and officers liability,
surety bonds, key man life insurance and other insurance
policies and binders insuring the Company or its properties
(the "Insurance Policies").
(c) A list of the customers and distributors (identifying each as
such) representing approximately 80% of sales for the year
ended December 31, 1996, detailing the aggregate sales to each
such customer and distributor for such year.
(d) All contracts to which the Company is a party or by which it
or any of its assets or properties is bound which (i) involve
payments or receipts by the Company of more than US$200,000 in
any one year period, and (ii) contracts which are not
terminable by the Company on less than 30 days' notice and
would involve a penalty payment by the Company of more than
US$50,000 upon early termination.
All contracts required to be listed on Schedule 2.15 (other than those which
have been fully performed) were entered into in the ordinary course of business
consistent with past practice, are valid, binding and enforceable against the
Company, in accordance with their respective terms, are in full force and effect
and there is no breach or default by the Company thereunder or to LPSC's and
Sellers' knowledge, the other party thereto. Except as specified in Schedule
2.4, no contract, to which the Company is a party requires any consent or waiver
to remain in full force and effect following the Closing and to entitle
Purchaser to the full benefits thereof. In addition, no contract to which the
Company is a party contains any provision that would alter or amend any of the
terms thereto following the Closing as a result of the transfer of the Shares.
Except as listed on Schedule 2.15(d), all exclusive distribution and license
agreements to which the Company is party are terminable by the Company without
penalty or consideration upon 30 days' notice.
2.16 PRODUCT RETURNS; WARRANTIES. To LPSC's and Sellers' knowledge, except as
set forth on Schedule 2.16 or to the extent reflected or reserved against in the
Financial Statements for the fiscal year ended December 31, 1996, there are no
liabilities or threatened claims for (a) product returns, (b) warranty
obligations or (c) product services other than those arising in the ordinary
course of business consistent with past practice relating to the Business.
2.17 INSURANCE. Each Insurance Policy is in full force and effect and will be in
full force and effect on the Closing Date. Each Insurance Policy is with a
financially sound and reputable insurer in accordance with normal industry
practice. Based on Sellers' belief and consistent with industry practice in the
relevant jurisdictions, the Insurance Policies provide adequate coverage for all
normal risks incident to the Business conducted on the date hereof, assets and
properties of the Company.
2.18 INTELLECTUAL PROPERTIES. Except as disclosed in Schedule 2.18,
(a) The Company has the legal and exclusive right to, or ownership
of, all Proprietary Rights, necessary for the conduct of the
Business.
6
(b) The Proprietary Rights are free and clear of all Encumbrances
other than (i) Encumbrances that do not materially interfere
with the present use by the Company of the property subject
thereto or affected thereby and (ii) Encumbrances for taxes,
assessments or governmental charges, or landlords',
mechanics', workmen's, materialmen's or similar liens, in each
case that are not delinquent or which are being contested in
good faith.
(c) To LPSC's and Sellers' knowledge, neither the Company nor any
licensor, franchisor or other owner (each, a "Licensor") of
any Proprietary Rights from which the Company holds a license
has used or enforced, or failed to use or enforce, any of the
Proprietary Rights in any manner which could limit their
validity or result in their invalidity which would have a
material adverse effect on the business, operations, assets,
results of operations, condition (financial or otherwise) or
liabilities of the Company (a "Material Adverse Effect").
(d) No licenses or sublicenses have been granted by the Company to
third parties permitting the use of the Proprietary Rights,
nor is there any obligation on the part of the Company to
enter into a license or sublicense with a third party to
permit such third party to use the Proprietary Rights.
(e) To LPSC's and Sellers' knowledge, there has been no
infringement or violation of the Proprietary Rights, nor any
claim or threat of a claim of adverse ownership, invalidity or
other opposition to conflict with any of the Proprietary
Rights which would have a Material Adverse Effect.
(f) To LPSC's and Sellers' knowledge, there has been no activity
in which the Company is engaged relating to the Business that
violates or infringes any intellectual property rights of a
third party.
2.19 TAX MATTERS. Except as set forth on Schedule 2.19,
(a) The Company has completely and accurately filed on a timely
basis all tax returns through the date hereof and has paid, or
caused to be paid, on a timely basis all taxes required to be
paid through the date hereof, whether disputed or not, except
taxes which are owing but not yet due, for which adequate
reserves have been established. No taxing authority is now
asserting or, to LPSC's and Sellers' knowledge, threatening to
assert against the Company or any of their respective
shareholders directors or officers in their capacity as such,
any deficiency of or claim for additional taxes.
(b) The Company (i) has not granted any power of attorney with
respect to any matter relating to taxes which is currently in
force; (ii) is not a party to any agreement providing for the
allocation, sharing or indemnification of taxes; (iii) has not
requested any, and there are no outstanding, waivers or
extensions of time, relating to the filing of any tax return;
and (iv) has not given any waivers or comparable
7
consents to the application of the statute of limitations to
any taxes or Tax returns, nor is any such waiver or consent
outstanding.
(c) There are no pending or threatened audits, investigations
(other than routine examinations conducted by tax authorities
in the ROC and the People's Republic of China, none of which
has resulted in any adjustment to the Company's tax
liabilities) or claims for or relating to any liability in
respect of taxes of the Company.
2.20 LITIGATION. Except as set forth on Schedule 2.20 or to the extent reflected
or reserved against in the Financial Statements for the fiscal year ended
December 31, 1996, there is no suit, action, dispute, civil or criminal
litigation, arbitration, legal, administrative or other proceeding or
governmental investigation, including appeals and applications for review, in
progress, pending or, to LPSC's and Sellers' knowledge, threatened against or
relating to the Company, the Business or the Company's officers, directors or
employees in their capacity as such or the transactions contemplated by this
Agreement which, if adversely determined, would have a Material Adverse Effect.
2.21 ENVIRONMENTAL MATTERS. Except as disclosed on Schedule 2.21, to LPSC's and
Sellers' knowledge, (a) the Company is in compliance with all applicable
environmental laws, except where the failure to so comply would not have a
Material Adverse Effect; (b) all properties owned, leased or operated by the
Company are free from contamination by any hazardous material (as defined by
local law) in violation of applicable law; (c) there are no legal proceedings
pending or, to LPSC's and Sellers' knowledge, threatened against Sellers or the
Company alleging the violation of any environmental law; and (d) the Company has
never engaged in manufacturing operations at any locations other than its
current plant locations.
2.22 EMPLOYMENT MATTERS. Except as disclosed in Schedule 2.22:
(a) As of the date hereof, the Company is not a party to any
employment agreement with directors, officers, employees,
agents or independent contractors.
(b) The Company is in compliance in all material respects with all
applicable laws respecting employment and employment
practices, terms and conditions of employment, and wages and
hours, and is not engaged in any unfair labor practice.
(c) There are no strikes, slowdowns, work stoppages or other labor
troubles pending or, to LPSC's and Sellers' knowledge,
threatened with respect to the employees of the Company.
(d) As of the date hereof, no collective bargaining or related
agreement is currently in effect or being negotiated with
respect to the employees of the Company; the Company does not
have any obligation to negotiate any collective bargaining or
related agreement with respect to the employees of the Company
other than as required by applicable law, and neither the
Company nor any Seller has encountered any labor union
organizing activity with respect to the Company.
8
(e) No charges with respect to or relating to the Company are
pending or, to LPSC's and Sellers' knowledge, threatened
before any governmental agency responsible for the prevention
of unlawful employment practices.
2.23 EMPLOYEE BENEFITS.
(a) Schedule 2.23 hereto sets forth as of the date hereof, a true,
complete and correct list of each employee benefit plan, which
is maintained, contributed to or required to be contributed to
by the Company on behalf of any current or former employee,
director or consultant (or any of their dependents or
beneficiaries) of the Company (all of which are hereinafter
referred to as the "Benefit Plans"). The Company does not have
any formal commitment, or intention communicated to employees,
to create any additional Benefit Plan or modify or change any
existing Benefit Plan.
(b) Each Benefit Plan has been maintained in substantial
compliance with its terms and with the requirements prescribed
by any and all applicable laws (including any special
provisions relating to registered or qualified plans where
such Benefit Plan was intended to so qualify) and has been
maintained in good standing with applicable regulatory
authorities. Except as set forth on Schedule 2.23, or to the
extent reflected or reserved against in the Financial
Statements for the fiscal year ended December 31, 1996, the
fair market value of the assets of each funded Benefit Plan
(or the liability of each funded Benefit Plan funded through
insurance) is sufficient to procure or provide for the
benefits accrued thereunder through the Closing Date according
to the actuarial assumptions and valuations most recently used
to determine employer contributions to the Benefit Plan.
(c) All contributions required to be made under the terms of any
Benefit Plan have been timely made when due and have been
properly reported in the Financial Statements in accordance
with Taiwan or U.S. GAAP, as the case may be.
(d) The Company does not have any liabilities for retiree health
or life benefits other than (i) coverage mandated by
applicable law or (ii) death benefits or retirement benefits
under any Benefit Plan. Except as mandated by applicable law
or as set forth on Schedule 2.23, there are no restrictions on
the rights of the Company to amend or terminate any such
Benefit Plan without incurring liability thereunder and, to
LPSC's or Sellers' knowledge, no communications have been made
to participants with respect to guaranteeing benefits under
any such Benefit Plan.
(e) Except as set forth on Schedule 2.23, the consummation of the
transactions contemplated by this Agreement will not (or will
not upon termination of employment within a fixed period of
time following such consummation): (i) entitle any person to
severance pay, unemployment compensation or any other payment,
or (ii) accelerate the time of payment or vesting or increase
the amount of payment with respect to any compensation due to
any person.
9
2.24 TRANSACTIONS WITH CERTAIN PERSONS. Except as set forth on Schedule 2.24,
during the past three years the Company has not, except on an arms-length basis,
directly or indirectly, purchased, leased or otherwise acquired any assets or
properties or obtained any services from, or sold, leased or otherwise disposed
of any assets or properties or furnished any services to, or otherwise dealt
with (except with respect to remuneration for services rendered as a director,
officer or employee of the Company), any Seller or any person which, directly or
indirectly, alone or together with others, controls, is controlled by or is
under common control with the Company or any Seller.
2.25 ABSENCE OF CERTAIN BUSINESS PRACTICES. None of the Company or any officer,
employee or agent of the Company, nor any other person acting on its or their
behalf, has, directly or indirectly, within the past three years given or agreed
to give any gift or similar benefit to any customer, supplier, governmental
employee or other Person who is or may be in a position to help or hinder the
Business which (a) would subject the Company to any damage or penalty in any
civil, criminal or governmental litigation or proceeding, (b) if not given in
the past, would have had a material adverse effect on the Business, or (c) if
not continued in the future, would result in a material adverse effect or which
would subject the Company to suit or penalty in any private or governmental
litigation or proceeding, in the case of (b) and (c), however, without taking
into account ordinary and customary activities as permitted by the relevant
jurisdictions.
2.26 DISCLOSURE. The representations and warranties by the Company or Sellers
contained in this Agreement and in any document, instrument or certificate
furnished to be furnished by Sellers in connection herewith or pursuant hereto
do not contain or will not, as of the Closing Date, contain any untrue statement
of a material fact, or to LPSC's or Sellers' knowledge do not omit or will not,
as of the Closing Date, omit to state any fact which to LPSC's or Sellers'
knowledge is material, required to be stated therein or necessary in order to
make the statements herein or therein, in light of the circumstances under which
they were made, not misleading. The representations and warranties contained in
this Section 2.26 or elsewhere in this Agreement or in any document or
certificate furnished or to be furnished as aforesaid in connection herewith or
pursuant hereto shall not be affected or deemed waived by reason of the fact
that Purchaser and/or its representatives know or should have known that any
such representation or warranty is or might be inaccurate in any respect.
SECTION 3 - REPRESENTATIONS AND WARRANTIES
OF PURCHASER
Purchaser hereby represents and warrants to Sellers that:
3.1 ORGANIZATION AND STANDING. Purchaser is a corporation duly incorporated and
organized and is validly existing and in good standing under the laws of the
State of Delaware and has all necessary corporate power, authority and capacity
to enter into this Agreement and to perform its obligations hereunder.
3.2 EXECUTION; AUTHORITY; ENFORCEABILITY. This Agreement has been duly and
validly authorized, executed and delivered by Purchaser and constitutes a legal,
valid and binding
10
obligation of Purchaser enforceable against it in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws relating to or affecting
creditors' rights generally or by general principles of equity.
3.3 NO CONFLICTS. The execution and delivery of this Agreement by Purchaser, the
consummation of the transactions contemplated hereby and the fulfillment by
Purchaser of the terms, conditions and provisions hereof does not and will not,
directly or indirectly (a) conflict with or violate or result in the default, or
give rise to or accelerate any obligations of Purchaser under: (i) any law
applicable to Purchaser, (ii) any court or governmental agency order applicable
to Purchaser, (iii) the certificate of incorporation, by-laws or any resolutions
of Purchaser, or (b) the provisions of any material contract to which Purchaser
is a party or by which it is bound.
SECTION 4 - CONDUCT OF BUSINESS PRIOR TO CLOSING
4.1 CONDUCT OF BUSINESS PRIOR TO CLOSING.
(a) Prior to the Closing (as defined in Section 8 below), the
Company shall conduct the Business only in the ordinary course
and consistent with past practice and shall preserve its
assets and properties in good condition and repair (normal
wear and tear excepted) and in accordance with present
practices, and the Company and Sellers will use their best
commercial efforts to (i) preserve the business and
organization of the Company intact, (ii) keep available to
Purchaser the services of the present officers, employees,
agents and independent contractors of the Company, (iii)
preserve for the benefit of Purchaser the goodwill of
suppliers, customers, landlords and others having business
relations with the Company, (iv) cooperate with Purchaser and
use reasonable efforts to assist Purchaser in obtaining the
consent of any party to any contract with the Company where
the consent of such party may be required by reason of the
transactions contemplated hereby, and (v) maintain in full
force and effect all material contracts. In addition, the
Company shall not enter into any new contract or arrangement
not in the ordinary course of business and consistent with
past practice.
(b) Sellers shall give Purchaser prompt written notice of any
change in any of the information contained in the
representations and warranties made pursuant to this Agreement
if such information might materially and detrimentally impact
on Purchaser's decision to purchase the Shares and consummate
the transactions contemplated hereby, provided, however, that
neither the supplementing or amending of any Schedules by
Sellers, nor the discovery of any matters by Purchaser in the
course of its investigations, shall be deemed to cure any
breach of any representation or warranty made in this
Agreement, to have been disclosed as of the date of this
Agreement or to constitute any waiver by Purchaser of any of
its rights hereunder.
(c) Upon reasonable notice and subject to the confidentiality
agreement between the parties dated April 11, 1997 (the
"Confidentiality Agreement"), the Company will
11
give Purchaser full access to the officers and other personnel
of the Company and all properties, documents, contracts, books
and records of the Company and will furnish Purchaser with
copies of such documents and contracts and with such
information with respect to the Business, the Company's assets
and properties and the affairs of the Company as Purchaser may
from time to time reasonably request. Any such furnishing of
such information to Purchaser or any investigation by
Purchaser shall not affect Purchaser's right to rely on any
representation or warranty made in this Agreement or in any
document or certificate furnished or to be furnished by the
Company or Sellers to Purchaser or its representatives in
connection herewith or pursuant hereto.
(d) Each party hereto shall use its best commercial efforts to
render its representations and warranties in this Agreement
accurate as of the Closing Date, and shall refrain from taking
any action that would render any of such representations and
warranties inaccurate as of the Closing Date.
(e) Subject to the terms and conditions herein provided, each of
the parties hereto agrees to use their respective best
commercial efforts to take, or cause to be taken, all action,
and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws to consummate and make
effective the transactions contemplated by this Agreement.
SECTION 5 - CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS
Purchaser's obligations hereunder are subject, at the option of
Purchaser, to the fulfillment of each of the following conditions at or prior to
the Closing (except with respect to paragraph (h) below, which shall be
fulfilled within 35 days from the date hereof), and Sellers shall exert their
best commercial efforts to cause such conditions to be fulfilled:
(a) All representations and warranties of Sellers and the Company
contained herein or in any document or certificate delivered
pursuant hereto shall be true and correct when made and shall
be deemed to have been made again at and as of the Closing
Date, and shall then be true and correct in all material
respects.
(b) All covenants, agreements and obligations required by the
terms of this Agreement to be performed by Sellers or the
Company at or before the Closing, including but not limited to
delivery of the Shares free and clear of all Encumbrances and
the execution of the Joint Venture Agreement, shall have been
duly and properly performed in all material respects.
(c) Since the date of this Agreement there shall not have occurred
any change, event or condition which in any case or in the
aggregate has had or is reasonably likely to result in a
material adverse effect on the business, operations, assets,
results of operations, condition (financial or otherwise),
liabilities or prospects of the Company.
12
(d) There shall be delivered to Purchaser a certificate executed
by the President and Secretary of the Company, dated the date
of the Closing, certifying that the conditions set forth in
paragraphs (a), (b) and (c) of this Section 5 have been
fulfilled.
(e) The parties shall have received all consents necessary to
consummate the transactions contemplated hereby.
(f) There shall not exist any action in any court or by or before
any governmental agency pending or known by Purchaser to be
threatened against Sellers or the Company which, in the
reasonable judgment of Purchaser, if adversely determined,
would have a Material Adverse Effect.
(g) Except as directed by Purchaser, all of the senior officers
and directors of LPSC shall continue to be retained or
associated with LPSC.
(h) Sellers shall have completed and delivered to Purchaser the
Schedules hereto within 14 days of the date hereof, and such
Schedules shall not disclose any matters not reflected in the
Financial Statements (whether or not such matters are required
to be disclosed therein) which materially and detrimentally
impact on Purchaser's decision to purchase the Shares and
consummate the transactions contemplated hereby. Purchaser
shall have completed its due diligence review of the Company
and shall not have discovered any information that materially
and detrimentally impacts on Purchaser's decision to purchase
the Shares and consummate the transactions contemplated
hereby. If the conditions set forth in this subparagraph (h)
have not been satisfied, Purchaser shall promptly notify
Sellers of such conclusion, whereupon either party may
terminate this Agreement without liability on the part of any
party.
(i) Purchaser shall have received the necessary consents from its
lending banks to consummate this Agreement, which Purchaser
shall use its best commercial efforts to obtain within 35 days
from the date hereof.
SECTION 6 - CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS
Sellers' obligations hereunder are subject, at the option of Sellers,
to the fulfillment of each of the following conditions at or prior to the
Closing, and Purchaser shall exert its best commercial efforts to cause such
conditions to be fulfilled:
(a) All representations and warranties of Purchaser contained
herein or in any document or certificate delivered pursuant
hereto shall be true and correct when made and shall be deemed
to have been made again at and as of the date of the Closing
Date, and shall then be true and correct in all material
respects.
13
(b) All covenants, agreements and obligations required by the
terms of this Agreement to be performed by Purchaser,
including, but not limited to, the execution of the Joint
Venture Agreement, at or before the Closing shall have been
duly and properly performed in all material respects.
(c) There shall be delivered to Sellers a certificate executed by
the President and Secretary of Purchaser, dated the Closing
Date, certifying that the conditions set forth in paragraphs
(a) and (b) of this Section 6 have been fulfilled.
(d) All other documents required to be delivered by Purchaser to
Sellers at or prior to the Closing shall have been so
delivered.
(e) The parties shall have received all consents necessary to
consummate the transactions contemplated hereby.
SECTION 7 - INDEMNIFICATION
7.1 SURVIVAL OF SELLERS' REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Sellers contained in this Agreement shall survive the Closing
for the benefit of the Purchaser as follows:
(a) as to the representations and warranties contained in Section
2.21, five years following the Closing Date;
(b) as to the representation and warranties contained in Sections
2.19 and 2.23, until 60 days following the expiration of all
periods allowed for objecting and appealing the determination
of any proceedings relating to any assessment or reassessment
by any tax authority with respect to the matters to which such
representation and warranties pertain; and
(c) as to all other matters, until the later of eight months
following the Closing Date and April 30, 1998.
7.2 SURVIVAL OF PURCHASER'S REPRESENTATIONS AND WARRANTIES. The representations
and warranties of the Purchaser contained in this Agreement shall survive the
Closing for the benefit of Sellers until the later of eight months following the
Closing Date and April 30, 1998.
7.3 INDEMNIFICATION BY SELLERS. Sellers on the one hand and Purchaser on the
other (each, an "Indemnifying Party") hereby agree to defend, indemnify and hold
harmless the other party (each, an "Indemnified Party") from and against any
actual damage, liability, loss, cost or expense (including reasonable attorneys'
fees) ("Costs") incurred by the Indemnified Party resulting from or arising out
of:
14
(a) any failure by an Indemnifying Party to perform its covenants
or obligations as set forth in this Agreement or in any
certificate or instrument delivered pursuant to this
Agreement;
(b) any inaccuracy in or breach of any of the representations or
warranties of an Indemnifying Party contained in this
Agreement; and
(c) any and all actions, suits, litigations, arbitrations,
proceedings, investigations, claims or liabilities of whatever
nature arising out of any of the foregoing.
7.4 PROCEDURE FOR INDEMNIFICATION. Each party which may request indemnification
under this Agreement agrees to give the party from which it may request
indemnification prompt notice of any event, or any written claim by a third
party of which it obtains knowledge, which could give rise to any damage,
liability, loss, cost or expense as to which it may request indemnification
under this Agreement, but the failure to give such prompt notice shall not
affect such party's rights hereunder except to the extent the other party was
materially and adversely prejudiced thereby. In connection with any such third
party claim, if the Indemnifying Party shall have acknowledged in writing its
obligation to indemnify in respect of such claim, the Indemnifying Party may
select counsel to direct the defense of such third party claim, which counsel
shall be reasonably satisfactory to the Indemnified Party, and the Indemnified
Party, at the expense of the Indemnifying Party, will cooperate with the
Indemnifying Party in determining the validity of any such claim and in the
defense thereof. The Indemnified Party may, at its expense, participate in the
defense of such third party claim. The Indemnified Party shall have the right to
employ counsel to represent the Indemnified Party at the Indemnifying Party's
expense if, (a) the Indemnifying Party has failed to promptly assume the defense
of such third party claim and employ counsel or (b) in the reasonable judgment
of the Indemnified Party or its counsel, a conflict of interest between the
Indemnified Party and the Indemnifying Party exists with respect to such third
party claim. The Indemnifying Party shall not settle any such claim without the
consent of the Indemnified Party if any relief, other than the payment of money
damages, would be granted by such settlement or if such settlement does not
include the unconditional release of the Indemnified Party. In the event that an
Indemnifying Party is required to make any payment under this Section 7, the
Indemnifying Party shall promptly pay to the Indemnified Party the amount so
determined.
7.5 REMEDIES CUMULATIVE. The remedies provided in this Section 7 shall be
cumulative and shall not preclude the assertion by any party to this Agreement
of any other rights or the seeking of any other remedies against the other party
to this Agreement.
7.6 LIMITATIONS ON INDEMNIFICATION. No indemnity shall be payable hereunder by
Sellers until the aggregate amount of all Costs suffered or incurred by
Purchaser exceeds US$3,000,000 and Sellers shall be liable for such Costs in
excess of US$3,000,000. No indemnity shall be payable hereunder by Purchaser
until the aggregate amount of all Costs suffered or incurred by Sellers exceeds
US$3,000,000 and Purchaser shall be liable for such Costs in excess of
US$3,000,000. The amount that Sellers shall be obligated to pay to Purchaser and
Purchaser shall be obligated to pay Sellers under this Section 7 shall not
exceed US$35,000,000, respectively; provided,
15
however, that the limits set forth in this Section 7.6 shall not apply to
breaches of Sections 1.3, 2.3, 2.6, 2.7, 3.2 and 8.2.
SECTION 8 - CLOSING PROCEDURE
8.1 CLOSING. The Closing of the transactions contemplated hereby (the "Closing")
shall take place at 10:00 a.m., local time, on the 30th day of June, 1997, at
the office of Silitek Corporation, Taipei, Republic of China, or such other time
and place as the parties may agree upon as adjusted as set forth below (the
"Closing Date"). In the event either of the parties is entitled not to close on
the scheduled date because a condition to its obligation to close set forth in
Section 5 or 6 hereof has not been met (or waived by the party or parties
entitled to waive it), such party may postpone the Closing, from time to time,
by giving at least three days prior notice to the other party, until the
condition has been met (which all parties will use their best commercial efforts
to cause to happen), but in no event to a date later than September 30, 1997.
8.2 OBLIGATIONS AT CLOSING.
(a) At the Closing, Sellers and the Company shall deliver to
Purchaser: (i) the consents in form and substance reasonably
satisfactory to the Purchaser, (ii) certificates representing
at least 49% of the Shares and instruments of transfer with
the relevant certificates attached in form reasonably
satisfactory to Purchaser for the balance of the Shares, (iii)
such other good and sufficient instruments of conveyance,
assignment and transfer, in form and substance reasonably
satisfactory to Purchaser and its counsel, as shall be
effective to (A) transfer to Purchaser all of Sellers'
beneficial right, title and interest in and to the Shares and
(B) permit the Company to maintain good and marketable title
to the Company's assets free and clear of any Encumbrances
except as otherwise disclosed in Section 2 above, and (iv)
certified copies of constituent documents, good standing
certificates, incumbency certificates and all other documents
required to be delivered on or before the Closing by Sellers
and the Company to Purchaser under the provisions of this
Agreement (to the extent not previously delivered) or as may
otherwise be reasonably requested by Purchaser in connection
herewith.
(b) At the Closing, Purchaser shall deliver, or cause to be
delivered, to Sellers: (i) the Purchase Price in one lot of
New Taiwanese Dollars after deducting the securities
transaction tax required to be withheld from the Purchase
Price by wire transfer to the bank account specified by
Sellers' Agent and (ii) all other documents required to be
delivered on or before the Closing by Purchaser to Sellers
hereunder (to the extent not previously so delivered) or as
may otherwise be reasonably required by Sellers in connection
herewith.
16
The Shares shall be delivered as follows:
(A) Phase 1
At the Closing, Sellers shall transfer and deliver to
Purchaser the share certificates representing the
Shares duly endorsed for transfer by Sellers. Sellers
shall provide Purchaser with information concerning
the names of the shareholders and the number of the
certificates of the Shares to be transferred and
delivered to Purchaser in Phase 1 no later than 10
days prior to the Closing Date. On the Closing Date,
Purchaser shall pay the securities transaction tax
regarding the Shares transferred in Phase 1. As soon
as practicable after the Closing, Sellers shall
convene directors and shareholders meetings to
re-elect the board of LPSC and to have the nominees
designated by Purchaser elected as the directors,
supervisors and chairman of the board of LPSC.
(B) Phase 2
The outstanding balance of the Shares (the "Remaining
Shares") duly endorsed for the transfer shall be
delivered to the custodian, Lee and Li,
Attorneys-at-Law (the "Stocks Custodian") for
safekeeping. The Remaining Shares shall be
transferred and delivered to Purchaser by the Stocks
Custodian immediately after the special shareholders
meeting of LPSC described above has been convened. In
the meantime, Purchaser shall pay the securities
transaction tax regarding the transfer of the
Remaining Shares.
(c) In addition to the sale and purchase of the Shares and the
other transactions provided for in this Agreement, at or prior
to Closing, Sellers and Purchaser shall enter into the Joint
Venture Agreement substantially in the form of EXHIBIT A
annexed hereto.
SECTION 9 - TERMINATION
(a) This Agreement may be terminated and the transactions
contemplated hereby may be abandoned prior to the Closing: (i)
by the mutual consent of Purchaser and Sellers or (ii) by
Sellers or Purchaser if the Closing Date shall not have
occurred on or before September 30, 1997; provided, however,
that the right to terminate this Agreement under this
subparagraph (ii) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has
been the cause of the failure of the Closing Date to occur on
or before such date, and (iii) by Purchaser if on the Closing
Date any of the conditions provided for in Section 5 have not
been met and have not been waived by Purchaser, or by Sellers
if on the Closing Date any of the conditions provided for in
Section 6 have not been met and have not been waived by the
Company.
17
(b) In the event of the termination and abandonment of this
Agreement pursuant to this Section 9, this Agreement shall
forthwith become void and have no effect, without any
liability on the part of any party hereto or its affiliates,
directors, officers or shareholders; provided, however, that a
termination of this Agreement pursuant to Section 9(a)(ii)
shall not defeat or impair the right of any party to pursue
such relief as may otherwise be available to it on account of
any breach of this Agreement or any of the representations,
warranties, covenants or agreements contained herein.
SECTION 10 - MISCELLANEOUS
10.1 PUBLIC NOTICE. Except as may be required by law, all public notices to
third parties and all other publicity concerning the transactions contemplated
by this Agreement shall be jointly planned and coordinated by Sellers and
Purchaser.
10.2 ENTIRE AGREEMENT. This Agreement (including the Schedules and Exhibits
hereto) and the Confidentiality Agreement constitute the entire agreement
between the parties and supersede all prior understandings and communications
between the parties.
10.3 EXPENSES. Each party shall bear its own expenses incurred in connection
with this Agreement and the transactions contemplated hereby, including all
income and capital gains taxes. Sellers shall pay all ROC securities transfer
taxes incurred in connection with this Agreement and transactions contemplated
hereby.
10.4 FURTHER ASSURANCES. The parties shall do all such things and provide all
such reasonable assurances as may be required to consummate the transactions
contemplated hereby, and each party shall provide such further documents or
instruments required by any other party as may be reasonably necessary or
desirable to effect the purpose of this Agreement and carry out its provisions,
whether prior to or following the Closing.
10.5 NOTICES. Any notice which is required to be given by any party to another
party shall be in writing and (a) delivered personally, (b) sent by prepaid
courier service or (c) sent by telecopier, e-mail or other similar means of
electronic communication, to the parties at their following respective address:
For the Purchaser:
Vishay Intertechnology, Inc.
63 Lincoln Highway
Malvern, PA 19355
Attention: Avi D. Eden, Esq.
Telecopier: (610) 296-0657
E-mail: AVIEDEN@AOL.COM
18
with a copy to:
Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, New York 10022
Attention: Mark Segall
Telecopier: (212) 715-8000
E-mail: MSEGALL@KRAMER-LEVIN.COM
For Sellers:
Silitek Corporation
12F, 25, Sec. 1, Tung Hwa S. Road
Taipei, Taiwan, Republic of China
Attention: Mr. Raymond Soong, Mr. David Lin
Telecopier: (886) 2 577 5960
with a copy to:
Winthrop Stimson, Putnam and Roberts
2505 Asia Pacific Finance Tower
3 Garden Road, Central
Hong Kong
Attention: Robert Lin
Telecopier: (852) 2530-3355
Any such notice so given shall be deemed conclusively to have been given upon
receipt.
10.6 GOVERNING LAW. This Agreement and the rights, obligations and relations of
the parties shall be governed by and construed in accordance with the laws of
the State of New York, U.S.A. (but without giving effect to the conflict of laws
rules thereof).
10.7 DISPUTES. Any dispute or controversy arising with respect to a claim of
indemnification hereunder, including, without limitation, any dispute concerning
the scope of this arbitration clause, shall be settled by arbitration in
Singapore in accordance with the rules of the International Chamber of Commerce.
Judgment upon the award rendered by the arbitrators shall be final, conclusive
and binding on the parties and may be entered in and enforced to the fullest
extent of the law by any court having jurisdiction thereof, and the parties
hereby consent to the jurisdiction of the New York courts and the Republic of
China courts for this purpose.
10.8 ASSIGNMENT. Neither this Agreement nor any rights or obligations hereunder
shall be assignable by any party without the prior written consent of each of
the other parties, except that Purchaser may assign its rights and obligations
hereunder to any direct or indirect wholly-owned subsidiary, but such assignment
shall not release Purchaser from its obligations hereunder. This
19
Agreement shall enure to the benefit of and be binding upon the respective
heirs, executors, administrators, successors and permitted assigns of the
parties.
10.9 AMENDMENT. This Agreement may be amended only by written agreement of
Purchaser and a majority of Sellers. Each party acknowledges that it shall have
no right to rely upon any amendment, promise, modification, statement or
representation made or occurring subsequent to the execution of this Agreement
unless the same is in writing and executed by the Purchaser and requisite
Sellers.
10.10 WAIVER. No waiver by a party of any provision hereof, in whole or in part,
shall operate as a waiver of any other provision hereof. The exercise by any
party of any of its rights under this Agreement shall not preclude or prejudice
such party from exercising any other right it may have under this Agreement,
irrespective of any previous action or proceeding taken by it hereunder.
10.11 SEVERABILITY. If any provision of this Agreement is invalid or
unenforceable, such provision shall be severed and the remainder of this
Agreement shall be unaffected thereby and shall continue to be valid and
enforceable to the fullest extent permitted by law.
10.12 COUNTERPARTS. This Agreement may be executed by the parties in separate
counterparts (by original or facsimile signature) each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument.
20
IN WITNESS WHEREOF the parties have hereunto duly executed this Agreement
on the date first above written.
VISHAY INTERTECHNOLOGY, INC.
By__________________________________
SILITEK CORPORATION
By__________________________________
LITE-ON POWER SEMICONDUCTOR CORPORATION
By__________________________________
LITE-ON TECHNOLOGY CORPORATION
By__________________________________
DYNA INVESTMENT CO., LTD.
By__________________________________
LITE-ON INC.
By__________________________________
EXHIBIT B
JOINT VENTURE AGREEMENT
JOINT VENTURE AGREEMENT, dated April 25, 1997, by and between
Vishay Intertechnology, Inc., a Delaware USA corporation ("VISHAY"), and Lite-On
[JV Co.], a company formed under the laws of The Republic of China ("LITE-ON").
ARTICLE 1 - CERTAIN DEFINITIONS
1.1. Definition of Certain Terms. When used in this Agreement, the
following terms shall have the meanings set forth in this Section 1.1:
1.1.1. "AFFILIATE" means, when used with reference to a specified
Person, any Person that, directly or indirectly, controls, is controlled by, or
is under common control with, the specified Person.
1.1.2. "COMMENCEMENT DATE" means the date on which the final
initial capital contribution is received by the Company (as defined below).
1.1.3. "PERSON" means any natural person, partnership, trust,
estate, association, company, custodian, nominee or any other individual or
entity in its own or any representative capacity.
1.1.4. "SHAREHOLDER" means each of Vishay and Lite-On and any
permitted transferee or assignee as provided hereunder.
1.1.5. "SHARES" means the authorized ordinary shares of the
Company.
1.1.6. "TERRITORY" means the Peoples Republic of China, Republic
of China ("ROC"), Hong Kong, Macau, South Korea, North Korea, Vietnam, Laos,
Cambodia, Thailand, Myanmar, Singapore, Malaysia, Indonesia and the Philippines,
and such additional countries and territories as the Board of Directors may
approve from time to time in accordance with Section 4.2 below.
ARTICLE 2 - FORMATION OF THE COMPANY
2.1. Organization. Promptly upon the execution of this Agreement, the
parties shall form Vishay/Lite-On Power Semiconductor Ltd., under the laws of a
jurisdiction to be mutually agreed upon by the Shareholders (the "Company"). The
constituent documents of the Company shall not be inconsistent with the terms
hereof and shall be mutually agreed to by the Shareholders.
2.2. Place of Business. The address of the principal executive offices
and principal place of business of the Company shall be Taipei, ROC, or such
other location as from time to time may be designated by the Board of Directors.
2.3. Purpose. The purpose of the Company shall be to engage in the
manufacturing, of discrete power semiconductors components worldwide, the
manufacturing of passive electronic components in the Territory, the marketing
and sale of such power semiconductors worldwide and the marketing and sale of
passive electronic components in the Territory, and to do all things necessary
and desirable in connection with the foregoing or as otherwise contemplated in
this Agreement (the "BUSINESS").
2.4. Term. The term of this Agreement shall commence on the date hereof
and continue until its termination as provided herein.
2.5. Consideration. In consideration of Lite-On agreeing to become
Purchaser's partner in accordance with the terms of this Agreement and the
transactions contemplated hereby, Vishay shall issue to Lite-On immediately
after Lite-On purchases its interest in the Company in accordance with Article 3
below, securities of Vishay (the "Securities") that will contain the following
terms:
Number of Securities: 1
Liquidation Preference: none
Rank: pari passu with Common Stock
Dividend Requirement: none
Conversion/Exercise: that number of shares of Vishay Common
Stock equal to:
(Fair Market Value - $23.00)(1,625,000)
-------------------------------------
Fair Market Value
Antidilution Rights: structural only (including stock splits,
mergers, reorganizations and non-cash
dividends)
Registration Rights: none
Other Terms: customary terms and conditions as parties
shall agree
2.6. SEC Reports and Financial Statements. In connection with the
issuance of the Securities, Vishay hereby represents and warrants that it has
filed with the Securities and Exchange Commission (the "SEC") all forms,
reports, schedules, statements and other documents required to be filed by it
since January 1, 1995 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") or the Securities Act of 1933, as amended (the "Securities Act")
(as such documents have been amended since the time of their filing,
collectively, the "Vishay SEC Documents"). The Vishay SEC Documents, including
without limitation any financial statements and schedules included therein, at
the time filed, (a) did not contain any untrue statement of a material fact or
to Purchaser's knowledge omit to state a fact, which to Purchaser's knowledge is
material, required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading and (b) complied in all material respects with the applicable
requirements of the Exchange Act and the Securities Act, as the case may be, and
the applicable rules and
- 2 -
regulations of the SEC thereunder. The financial statements of Vishay included
in the Vishay SEC Documents comply as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the period
involved (except as may be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Form 10-Q of the SEC) and fairly present
(subject, in the case of the unaudited statements, to normal, recurring audit
adjustments) the consolidated financial position of Vishay and its consolidated
subsidiaries as at the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended.
2.7. Valid Issuance of Securities. Vishay further represents and
warrants that when issued, sold and delivered in accordance with the terms
hereof for the consideration expressed herein, the Securities will be duly
authorized and validly issued. Subject to Lite-On's compliance with Section 2.8,
the Securities will be issued in compliance with all applicable federal
securities laws, including with respect to issuances to non-U.S. persons,
Regulation S of the Securities Act. Vishay has reserved out of its authorized
but unissued shares of common stock, solely for the purpose of delivery upon
exercise/conversion of the Securities, such number of shares of common stock as
are deliverable upon the exercise/conversion of the Securities. Such common
stock, when issued pursuant to the Securities, will be duly authorized, validly
issued, fully paid, nonassessable and free of preemptive rights.
2.8. Accredited Investor Representations and Warranties. In connection
with acquiring the Securities, Lite-On hereby represents and warrants to Vishay
that:
2.8.1. Lite-On is either an "accredited investor," within the
meaning of Rule 501 of Regulation D under the Securities Act or is not a U.S.
person as defined by Regulation S of the Securities Act.
2.8.2. Lite-On, if deemed to be a U.S. person (i) is purchasing
the Securities for its own account, with the intent to hold them for investment,
and without any view to the distribution thereof and has no present intention of
distributing or selling to others any of such interest or granting any
participation therein; (ii) Lite-On has received and carefully reviewed the
Securities agreement and has consulted, and relied solely upon, its own
financial, legal and tax advisors with respect to the economic, legal and tax
consequences of acquiring the Securities; and (iii) Lite-On acknowledges that it
has sufficient knowledge and experience in financial and business matters to be
capable of evaluating the merits and risks associated with the acquisition of
the Securities and making an informed investment decision with respect thereto.
2.9. Private Placement Legend. The Securities have not been
registered under the Securities Act, or any foreign, state or other securities
laws in reliance on exemptions for private or offshore offerings based in part
upon the representations made by Lite-On in this Agreement; the shares of Common
Stock underlying the Securities may be considered "restricted securities" within
the meaning of Rule 144 under the Securities Act and may not be sold,
- 3 -
transferred, or otherwise disposed of without registration under the Securities
Act or an exemption therefrom.
ARTICLE 3 - CAPITAL CONTRIBUTIONS
3.1. Capital Contributions. The initial aggregate capital contributions
of the Shareholders shall be as follows:
3.1.1. Vishay is in the process of acquiring (the "ACQUISITION")
up to 100% of the outstanding capital stock of Lite-On Power Semiconductor Corp.
("LPSC"), a company formed under the laws of the ROC (the "LPSC SHARES"). Upon
consummation of the Acquisition, Vishay shall contribute all the LPSC Shares to
the Company in return for 100% of the capital stock of the Company.
3.1.2. As soon thereafter as is legally permitted, Lite-On shall
purchase from Vishay up to 35% of the Company's capital stock free and clear of
any liens or encumbrances whatsoever, for the purchase price of US $70,000,000
in cash in order to reflect the ownership percentage in the Company as
calculated below.
3.1.3. Following the above transactions, the Shareholders'sis.
respective ownership percentages in the Company (the "PERCENTAGE OWNERSHIP
INTERESTS") shall be:
Vishay: That Percentage Ownership Interest in the Company that
will give Vishay a 65% ownership interest in LPSC on a
fully diluted basis.
Lite-On: 100% minus Vishay's Percentage Ownership Interest in the
Company following the calculation of Vishay's Percentage
Ownership Interest, as provided above.
3.1.4. Any additional funds (the "ADDITIONAL FUNDS") required by
the Company, as determined from time to time by the Board of Directors in
accordance with Section 4.2 below, shall be provided, to the extent permitted by
law, in the following order of priority:
FIRST: In the form of loans or other debt instruments
provided by third parties in arms-length transactions at
commercially reasonable rates;
SECOND: In the form of loans from the Shareholders in
proportion to their Percentage Ownership Interests, which
loans shall contain terms and conditions (including, without
limitation, ranking, interest rate and term) as the
Shareholders may agree from time to time (the "LOANS"); and
THIRD: In the form of additional capital
contributions from the Shareholders in proportion to their
Percentage Ownership Interests.
- 4 -
3.1.5. In the event any Shareholder (the "NON-COMPLYING
SHAREHOLDER") fails to timely deliver its Additional Funds to the Company (the
"FUNDING DEADLINE"), the other Shareholder shall have the option for a period of
30 days following the Funding Deadline, to provide the funds not delivered by
the Non-complying Shareholder either in the form of (a) an additional
contribution to the Company's capital, in the form of cash, in which case, the
Percentage Ownership Interests shall be adjusted pursuant to Section 3.1.6 below
to reflect such additional capital contribution, or (b) an additional loan to
the Company, upon the same terms and conditions, to the extent possible, as the
Loan, except that interest shall accrue on such loan at a rate equal to 2% per
annum above the rate provided for in such Loan, or if no such loan is
outstanding, at 6 month US dollar denominated LIBOR (as in effect on the date
the loan is made) plus 3%. The other Shareholder shall provide the Non-complying
Shareholder at least 20 days' prior written notice of its election to provide
the Additional Funds and in what form such funds shall be provided.
3.1.6. Any adjustment in the Percentage Ownership Interests shall
be based upon a fair market valuation of the Company's equity as a going concern
at a date no earlier than six months prior to the date of the event giving rise
to the need for such valuation. The valuation shall be as agreed upon by the
Shareholders, or in the absence of prompt agreement by the Shareholders, as
valued by the Company's independent certified public accountants or an
independent appraiser selected by such accountants.
3.1.7. No Shareholder shall be entitled to withdraw any part of
its contributed capital from the Company or to receive any distribution from the
Company, except as expressly provided in this Agreement. No Shareholder shall be
entitled to demand or receive any property from the Company other than cash.
3.1.8. No Shareholder shall have any personal liability for the
payment of the capital contribution of the other Shareholder.
3.2. Preemptive Rights. Subject to Section 3.1.5, the Shareholders
shall have a first right to purchase all or part of their pro rata share (based
on their Percentage Ownership Interests) of any additional Shares which the
Company may, from time to time, propose to sell and issue for a period of
fifteen (15) days from the time the Company provides notice of such proposal to
the Shareholders.
3.3. Share Certificates. Upon receipt of the initial capital
contributions as described above, the Company shall issue certificates
representing Shares to Vishay and Lite-On reflecting their respective Percentage
Ownership Interests, and shall register such Shares in its record of
Shareholders as issued and fully paid. Each share certificate shall bear upon
its face the following legends:
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED,
SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF UNLESS AND UNTIL REGISTERED
- 5 -
UNDER THE SECURITIES ACT, ANY APPLICABLE STATE SECURITIES
LAWS OR UNLESS, IN THE OPINION OF COUNSEL, SATISFACTORY TO
THE COMPANY, SUCH SALE OR TRANSFER IS EXEMPT FROM
REGISTRATION OR IS OTHERWISE IN COMPLIANCE WITH THE
SECURITIES ACT AND MAY NOT BE OFFERED OR SOLD IN ANY OTHER
JURISDICTION UNLESS IN ACCORDANCE WITH ALL APPLICABLE
PROVISIONS OF LAW.
THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED UNDER THE TERMS OF A JOINT
VENTURE AGREEMENT DATED AS OF APRIL 25, 1997, COPIES OF
WHICH ARE ON FILE AT THE OFFICE OF THE COMPANY.
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
VOTING TERMS AND CONDITIONS CONTAINED IN THE JOINT VENTURE
AGREEMENT REFERRED TO ABOVE.
ARTICLE 4 - MANAGEMENT OF THE COMPANY
4.1. Board of Directors - Authority and Composition. The business of
the Company shall be managed by a Board of Directors (the "BOARD OF DIRECTORS"),
which shall have full and complete authority with respect to any matter relating
to or arising out of this Agreement. To the extent not provided for herein, the
Board of Directors shall be governed in their activities by the Company's
Memorandum and Articles of Association or the equivalent constituent documents
(the "M&A"). The initial Board of Directors shall be composed of five members,
three of whom shall be designated by Vishay and two of whom shall be designated
by Lite-On. Each Shareholder may also designate alternate directors for each of
their appointees in accordance with applicable law and the Company's M&A. Such
directors shall serve until their successors shall have been duly elected and
qualified. Each of the Shareholders shall have the right to remove the directors
designated by such Shareholder and, in the event of a vacancy in the Board of
Directors, whatever its cause, such vacancy shall be filled by an individual
designated by the Shareholder who had designated the former director to the post
presently vacant. The Shareholders agree to vote their Shares in any election of
Directors to effect the foregoing.
4.2. Action by the Board of Directors. So long as each Shareholder
holds at least 17.5% of the issued and outstanding Shares, the vote of at least
a majority of the members of the Board of Directors attending (whether in
person, by proxy or teleconference) any duly called meeting of the Board of
Directors with a "quorum" (as defined below) present shall be required to
authorize the Company to take any actions, except that the vote of at least 66
2/3% of the members of the Board of Directors attending (whether in person or by
teleconference) any duly called meeting of the Board of Directors with a quorum
present (a "SUPERMAJORITY VOTE") shall be required to authorize the Company to
take any of the following actions:
(a) as required by local law;
- 6 -
(b) to make any amendment to the constituent documents of the
Company or to increase or decrease the size of the Board of Directors;
(c) to sell all or substantially all of the assets of the Company,
or to effectuate the merger or consolidation of the Company with or
into another corporation, or to cause the liquidation of the Company;
(d) to make any fundamental change in the Business beyond the
scope of manufacturing, marketing and selling discrete power
semiconductors and passive electronic components, or to make any change
in the Territory;
(e) to declare or pay any dividend or authorize or make any
distribution on any Shares;
(f) to change the compensation of the directors and the Chairman
or President of the Company or LPSC, except in the ordinary course of
business consistent with past practice;
(g) to enter into any transaction with any Shareholder or
Affiliate of any Shareholder or any director or officer or any Person
with whom the Company does not deal at arm's length;
(h) other than as required by U.S. generally accepted accounting
principles, to make any change in the accounting, tax practices or
fiscal year of the Company if any such change has a disproportionate
material adverse effect on any Shareholder;
(i) to agree to the settlement of, or the making or acceptance of
any payment in connection with, any claim by or against the Company in
which the amount in dispute exceeds 15% of the registered capital of
the Company, whether or not such claim is the subject of litigation,
arbitration or other judicial or administrative proceedings; and
(j) as otherwise provided in this Agreement.
The Board of Directors shall call for at least two meetings
per year. Reasonable travel expenses of the members of the Board of Directors
shall be paid by the Company. Any one director shall be entitled to call a
meeting of the Board of Directors at any reasonable time. A "QUORUM" shall mean
a statutory quorum which shall include two directors appointed by each
Shareholder to be present (in person, by proxy or by telephone); provided,
however, that if a quorum is not present, the meeting shall be adjourned for one
week, at which time, subject to statutory requirements, the directors present
(in person or by telephone), with or without the participation of a director
appointed by each Shareholder, shall constitute a quorum. Actions of the Board
of Directors may be taken without a meeting if all members of the Board of
Directors consent in writing to such actions.
- 7 -
4.3. Officers - Day to Day Management. The day to day affairs of the
Company shall be managed by the officers of the Company, who shall be elected by
the Board of Directors in accordance with the Company's M&A. Any action to be
taken by the officers that is other than administrative in nature shall require
the written approval of any two officers one of whom shall be a Vishay
appointee. The initial officers of the Company shall be as follows:
Dr. Felix Zandman - Chairman
Mr. Raymond Soong - Vice Chairman/President
Mr. Avi D. Eden - Vice President/Secretary
Mr. Richard Grubb - Vice President/Treasurer
[To be designated by Lite-On] - Assistant Secretary/Treasurer
Such officers shall serve until their successors shall have been duly elected
and qualified. The Shareholders agree that so long as this Agreement is in
effect they shall direct their designated directors to fill any vacancy and/or
to elect new officers so that the positions of Chairman, Vice
President/Secretary and Vice President/Treasurer shall be as designated by
Vishay, and the positions of Vice Chairman/President and Assistant
Secretary/Treasurer shall be as designated by Lite-On.
4.4. Subsidiaries. The foregoing provisions of this Article 4 shall
apply mutatis mutandis (provided that the 17.5% ownership threshold with respect
to the Shares in Section 4.2 shall apply to each subsidiary) to the management
of each subsidiary of the Company, including LPSC; provided that (a) with
respect to LPSC, the initial officers shall be as set forth below:
Dr. Felix Zandman - Honorary Chairman
Mr. Raymond Soong - Chairman
Mr. M. K. Lu - President
Mr. Avi D. Eden - Vice President
Mr. Richard N. Grubb - Vice President
(b) with respect to jurisdictions which provide for supervisors of a Person (or
its equivalent) each of the Shareholders shall have the right to designate one
such supervisor, and (c) the size of the boards of each subsidiary shall be
determined by the Board of Directors of the Company, provided that Lite-On shall
also be able to designate that number of directors representing 34% or more of
the total number of board members for each such subsidiary.
4.5. Control by Vishay. Other than those decisions requiring a
Supermajority Vote, all matters relating to the operations and management of the
Company and its subsidiaries, including, without limitation, the appointment and
dismissal of officers, shall be as determined by Vishay or the members of the
Board of Directors of the Company appointed by Vishay.
- 8 -
ARTICLE 5 - OPERATIONS OF THE COMPANY
5.1. Expenses. Upon Supermajority Vote by the Board of Directors, the
Company will have the right to employ the services and assistance of the
Shareholders and their Affiliates as required, against reimbursement for
services rendered.
5.2. Books and Records. The Company shall maintain separate books and
accounting records in accordance with United States generally accepted
accounting principles. Such books and records shall be open for inspection
and/or audit by the Shareholders at all times.
5.3. Accountants. An annual audit of the books of the Company shall be
made, at the Company's expense, by the Company's firm of certified public
accountants, designated and authorized by the Board of Directors, and shall be
completed not later than forty-five (45) days after the close of the fiscal
year.
5.4. Operating Plans and Budget. The Board of Directors shall agree on
the Company's operating plans and financial budget during each year of the term
of this Agreement (the "BUDGET"). The Budget must be approved by the Board of
Directors by December 31, 1997 for the first full year of the term of this
Agreement and no later than December 31 of the previous year for each subsequent
year of the term of this Agreement.
5.5. Bank Accounts. All funds contributed or advanced by the
Shareholders to the Company and all progress and final payments or other revenue
received by the Company shall be deposited to the account of the Company in a
bank account to be established at such bank or banks as the Board of Directors
may designate. Checks may be drawn on said account or accounts by the signatures
of any two officers of the Company. The Company may also maintain payroll or
other accounts at such banks or at such branch as the Board of Directors may
designate.
5.6. Personal Guarantees. The Shareholders intend to cooperate and use
their reasonable efforts to assist in eliminating any personal guarantees
relating to debt of LPSC.
ARTICLE 6 - TRANSFERABILITY OF SHARES
6.1. Transfer of Shares. Except as set forth in this Article and in
Section 12.7 below, no Shareholder may, directly or indirectly, sell, assign,
mortgage, transfer, pledge, create a security interest in or lien upon,
encumber, make a gift of, place in trust, hypothecate, or otherwise in any
manner voluntarily or involuntarily dispose of, any or all of its Shares,
without the prior written consent of the other Shareholders.
6.2. Right of First Refusal. If at any time commencing from the fourth
anniversary of the Commencement Date (as defined below) of this Agreement,
either Shareholder (the "SELLING SHAREHOLDER") desires to sell, assign or
otherwise dispose of all or
- 9 -
part of its Shares in the Company to a third party, the Selling Shareholder must
comply with the following provisions:
6.2.1. Following the Selling Shareholder's receipt of a bona fide
offer from a third party (an "OFFER") to purchase all or a part of its Shares in
the Company, the other shareholder (the "HOLDER") shall have customary rights of
first refusal as follows:
(a) The Selling Shareholder shall notify the Holder of the
Offer in writing, which notice shall set forth the details of the Offer
including the purchase price, payment terms and the identity (including
beneficial ownership) of the third party.
(b) The Holder shall have the right to acquire all of the
Shares of the Company the Selling Shareholder proposes to sell.
(c) The right of first refusal shall remain open for a
period of sixty (60) days from the date the Offer is delivered to the
Holder. If the Holder elects to exercise its right of first refusal,
the Selling Shareholder shall sell and the Holders shall buy such
Shares of the Company set forth in the Offer free and clear from any
liens or encumbrances at the price and upon the terms and conditions
specified in the Offer. Such sale and purchase shall be completed at
the registered office of the Company, or such other location as the
parties may mutually agree, within thirty (30) days following the date
of the Holder's notice that it has elected to exercise its right of
first refusal, subject only to delays caused by obtaining necessary
governmental approvals.
(d) if the Holder determines not to exercise its right of
first refusal within the sixty (60) day period described above, subject
to Section 6.3 below, the Holder shall be deemed to agree to the sale
set forth in the Offer and the Selling Shareholder shall be free during
a period of ninety (90) days after the sixty (60) day period set forth
in Subsection (c) above to sell to the third party the shares of the
Company as set forth in the Offer not purchased by the Holder at a
price which equals or exceeds the price specified in the Offer and on
terms no more favorable to the third party than those of the Offer
without again complying with the terms of this Section 6.2. The
transfer of the Shares of the Company to a third party and payment of
the purchase price shall be completed within such ninety (90) day
period, subject only to delays caused by obtaining necessary government
approvals. In order for the transfer to be valid, the third party shall
agree to assume all the rights and obligations of the Selling
Shareholder under this Agreement. If the transfer is not completed
within such ninety (90) day period, except for delays caused by
obtaining governmental approvals, the Selling Shareholder shall not be
permitted to transfer the ownership interest to the third party and the
provisions of Section 6.2 shall again apply to any offer by a Selling
Shareholder to sell such Shares of the Company.
(e) In the event a sale is consummated with the third
party, the Selling Shareholder shall provide the Holder with a
duplicate of the executed written agreement with the third party
transferee.
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6.2.2. Neither the Business of the Company nor the performance of
this Agreement or other contracts or agreements related hereto shall be
interrupted by any such sale or other transfer of such interest.
6.3. Tag Along. If a Holder elects not to exercise its right of first
refusal as provided above, it may, upon written notice to the Selling
Shareholder within the sixty (60) day period set forth in Section 6.2.1(c)
above, require that the third party purchaser identified in the Offer, as a
condition precedent to its purchase of Shares of the Company, purchase all of
the Holder's Shares of the Company at the same price and upon the same terms as
contained in the Offer. If, however, such purchaser does not wish to purchase
all of the Selling Shareholder's Shares and those of the Holders exercising
their rights under this Section 6.3, then the Shares such purchaser acquires
shall be sold by the Selling Shareholder and each Holder exercising its rights
under this Section 6.3 in proportion to their respective Percentage Ownership
Interests in the Company.
6.4. Lite-On Put. If (a) the Board of Directors authorizes any
investment, acquisition or disposition in excess of US$100,000,000 or dismisses
without cause the Chairman or President of LPSC, in either case notwithstanding
the objection of all of the members of the Board of Directors designated by
Lite-On, or (b) a "Qualifying IPO" put shall have been triggered as provided in
Section 6.4.4. Lite-On shall have the right to require the Company to purchase
its Percentage Ownership Interest in accordance with the following provisions:
6.4.1. Lite-On shall notify the Company and Vishay in writing that
it desires to sell its Percentage Ownership Interest in the Company, specifying
the event that triggered the demand to sell.
6.4.2. Within 60 days following the receipt of such notice, if
Lite-On shall have delivered a valid notice of its demand to sell, Lite-On shall
be paid the "Put Value" (as defined below) by either the Company or Vishay.
6.4.3. For purposes of this Section, "PUT VALUE" means (a) until
the third anniversary of the Commencement Date, an amount equal to Lite-On's
aggregate capital contribution to the Company (including the initial purchase
from Vishay), together with interest at the annual rate of six-month U.S. dollar
denominated LIBOR to be calculated from the date of each capital contribution,
and (b) following the third anniversary of the Commencement Date, the market
value of Lite-On's Percentage Ownership Interest as determined by an
internationally recognized investment bank mutually acceptable to both
Shareholders.
6.4.4. A "QUALIFYING IPO" means: After the second anniversary of
the Commencement Date, if Lite-On determines it desires to commence an IPO for a
minority interest in respect of the Business of the Company, it shall first
obtain a letter from an internationally recognized and reputable investment bank
indicating the bank's interest in underwriting such an IPO on a well
capitalized, actively traded, developed securities market (which shall include,
without limitation, the New York and American Stock Exchanges, the Nasdaq
National Market Stock Market, The Taiwan Stock Exchange, The Singapore Stock
Exchange, the Stock Exchange of Hong Kong Limited, the Tokyo Stock Exchange and
the
- 11 -
London Stock Exchange) and at a premium to the valuation of LPSC on the date it
was acquired by Vishay. Lite-On shall then notify Vishay, which shall have 20
business days from receipt of Lite-On's notice to indicate if it agrees to
participate in the IPO or desires to postpone the IPO for up to one year because
of Vishay's business requirements. The "Qualifying IPO" put will then be
triggered upon the earlier of (a) the date Vishay indicates that it does not
desire to participate in the IPO requested by Lite-On and (b) one year from the
date Lite-On notified Vishay it desires to commence the IPO (unless at that time
a registration statement (or its equivalent) has been filed with the relevant
authorities).
6.5. Void Transfers. Any transfer not in accordance with this Article 6
shall be deemed void ab initio.
ARTICLE 7 - REPRESENTATIONS, WARRANTIES AND COVENANTS
7.1. Representations, Warranties and Covenants. Each of Vishay and
Lite-On hereby represents, warrants and covenants to the other party as follows:
(a) It is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of
incorporation, and has all requisite corporate power and authority (i)
to own and operate its properties and assets and carry on its business
as presently conducted, (ii) to enter into this Agreement, (iii) to
carry out the transactions contemplated by this Agreement and (iv) to
engage in the Business.
(b) All corporate proceedings required to be taken by it
to authorize the execution, delivery and performance of this Agreement
by it have been properly taken, and this Agreement constitutes its
legal, valid and binding obligation, enforceable against it in
accordance with its terms.
(c) There is no claim, action, suit, investigation,
arbitration or proceeding, and no order, decree or judgment, in
progress, pending or threatened, which relates to or may adversely
affect any of the transactions or activities contemplated by this
Agreement, and it has no reason to be aware of any basis for the same.
(d) This Agreement does not conflict with or violate any
other agreement or obligation of Vishay or Lite-On, as the case may be,
or to its knowledge, any law to which it is subject.
(e) It acknowledges that it has been advised that: (i) the
shares have not been registered under the United States Securities Act
of 1933, as amended; (ii) the shares have not been the subject of a
prospectus, within the meaning of the applicable law; and (iii)
restrictive legends shall be placed on any certificates representing
the shares.
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(f) Neither Vishay nor Lite-On, as the case may be, shall
directly or indirectly, give or agree to give any gift or similar
benefit to any customer, supplier, governmental employee or other
person who is or may be in a position to help or hinder the Business,
or otherwise violate the Foreign Corrupt Practice Act of 1977, as
amended, that might (i) subject the Company or any other Shareholder to
any damage or penalty in any civil, criminal or governmental litigation
proceeding or (ii) otherwise result in an adverse impact to the Company
or any of the other Shareholders.
7.2. Survival of Representations and Warranties. All representations,
warranties, covenants and agreements made by each party hereto in this Agreement
shall survive the execution and delivery of this Agreement. The representations,
warranties and covenants in Section 7.1 hereof are being made by the
Shareholders in consideration for their respective undertakings and rights under
this Agreement.
ARTICLE 8 - CONFIDENTIAL INFORMATION; NONCOMPETITION
8.1. Confidential Information. Each party hereto agrees to keep in
strictest confidence all non-public proprietary information relating to or
acquired from the other obtained (a) in connection with the performance of this
Agreement or any agreement provided for herein, (b) through participation in the
management of the Company or (c) otherwise.
8.2. Non-Competition.
8.2.1. So long as this Agreement is in effect and for a period of
one year thereafter, the Shareholders agree as follows:
(a) they will not engage in the manufacturing of discrete
power semiconductors worldwide except through the Company;
(b) they will not engage in the manufacturing of passive
electronic components in the Territory except through the Company;
(c) they will not engage in the sale in the Territory of
discrete power semiconductors except through the Company;
(d) they will not engage in the sale outside of the
Territory of discrete power semiconductors except though Vishay on an
expense arrangement to be agreed upon from time to time; provided that
such sales outside the Territory may continue through Diodes, Inc. and
FabTech Inc.;
(e) they will not engage in the sale in the Territory of
passive electronic components of the type manufactured by the Company
except through the Company;
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(f) sales outside of the Territory of passive electronic
components manufactured by the Company shall be made through Vishay on
an expense arrangement to be agreed upon from time to time;
(g) sales in the Territory of passive electronic
components manufactured by Vishay shall be made through the Company on
an expense arrangement to be agreed upon from time to time; and
(h) the provisions of clauses (a) though (g) above shall
not apply to the manufacturing and selling of transformers and power
supply-related coil winding products by Affiliates of Lite-On, existing
products of Vishay Measurements Group and Vishay's Affiliate's proposed
Tantalum manufacturing facility in the People's Republic of China
(which Vishay shall use its best commercial efforts to include in this
joint venture).
8.2.2. For purposes of Section 8.2 any Person that competes or
intends to compete with any of the businesses in the Territories as described in
clauses (a) through (g) above shall be considered a "COMPETING ORGANIZATION." So
long as this Agreement is in effect, the Shareholders agree that they will not
acquire any equity interest in any Competing Organization; provided, however,
that, the Shareholders shall be entitled to maintain passive investments in
Competing Organizations when (i) such investments do not exceed five percent
(5%) of the capital of such Competing Organization; and (ii) the Shareholders do
not participate at any level in the management of the Competing Organization
including, but not limited to, the board of directors of such Competing
Organization.
8.2.3. The Shareholders acknowledge that the restrictions
contained in this Article 8 are reasonable and necessary for the furtherance of
the Business, and that the violation of these provisions by either Shareholder
would result in irreparable harm to the other Shareholder. Accordingly, it is
the desire and the intent of the Shareholders that the provisions of this
Article 8 shall be enforceable to the fullest extent permissible under the laws
and public policies applied in each jurisdiction in which enforcement is sought.
If any particular portion of this Article 8 is adjudicated unenforceable in any
jurisdiction, such adjudication shall apply only in the particular jurisdiction
in which such adjudication is made. The Shareholders recognize that a
Shareholder will have no adequate remedy at law for breach by another
Shareholder of the requirements of this Article 8 and, in the event of such
breach, the Shareholders hereby agree that the non-breaching Shareholder will be
entitled to specific performance, or any other appropriate remedy, to enforce
performance of such requirements.
ARTICLE 9 - EVENTS OF DEFAULT; TERMINATION; INDEMNIFICATION
9.1. Events of Default; Termination. Either party may, in its
sole discretion, immediately terminate this Agreement upon the occurrence of any
of the following events: (a) the Company is adjudged a bankrupt, or becomes
insolvent, or makes a general assignment for the benefit of creditors; (b) any
party breaches any representation, warranty, covenant or agreement contained in
this Agreement which results in, or is likely to result in, a material
- 14 -
adverse change to the financial condition of the Company, which is not cured
within 30 days following receipt of written notice of such breach from the other
party; or (c) any party effects a "Change of Control." For purposes hereof, a
"Change of Control" means the occurrence of any one or more of the following:
(A) a merger or consolidation in which such party is not the surviving entity,
(B) the sale (in one transaction or a series of transactions) of all or
substantially all of the assets of such party or (C) the approval by such
party's shareholders of any plan or proposal for the liquidation or dissolution
of such party. This Agreement may also be terminated upon the unanimous written
consent of the Shareholders.
9.2. Effects of Termination. In the event this Agreement is terminated
for any reason, then the Company shall immediately commence to wind up its
affairs and to liquidate the business of the Company in accordance with
applicable law. During the period of winding up, the rights and obligations of
the Shareholders shall otherwise continue unaltered.
9.3. Survival Upon Termination. Section 6.1, Articles 7 through 12 of
this Agreement (and Sections 5.2 and 5.5, solely as they relate to winding up
the Company's activities in connection with any termination) shall survive any
termination of this Agreement.
9.4. Indemnification. Vishay agrees to indemnify and hold harmless
Lite-on, and Lite-on agrees to indemnify and hold harmless Vishay and each of
their respective directors, officers, employees and agents, from and against any
losses, costs, expenses, damages and liabilities, including reasonable
attorneys' fees, arising from any and all claims, demands, fines, suits,
actions, proceedings, orders, decrees and judgments of any kind or nature
whatsoever resulting from any breach by Vishay or Lite-on, as the case may be,
of any representation, warranty, covenant or agreement contained herein.
ARTICLE 10 - AMENDMENT AND WAIVER
10.1. Amendment. This Agreement may be amended only by written
agreement of all parties. Each party acknowledges that it shall have no right to
rely upon any amendment, promise, modification, statement or representation made
or occurring subsequent to the execution of this Agreement unless the same is in
writing and executed by all parties.
10.2. Waiver. No waiver by a party of any provision hereof, in whole or
in part, shall operate as a waiver of any other provision hereof. The exercise
by any party of any of its rights under this Agreement shall not preclude or
prejudice such party from exercising any other right it may have under this
Agreement, irrespective of any previous action or proceeding taken by it
hereunder.
ARTICLE 11 - NOTICES
Any notice which is required to be given by any party to another party shall be
in writing and (a) delivered personally, (b) sent by prepaid courier services or
(c) sent by telecopier, e-mail or
- 15 -
other similar means of electronic communication, to the parties at their
following respective address:
If to Vishay:
Vishay Intertechnology, Inc.
63 Lincoln Highway
Malvern, PA 19355
Attention: Avi D. Eden, Esq.
Telecopier: (610) 296-0657
E-mail: AVIEDEN@AOL.COM
with a copy to:
Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, New York 10022
Attention: Mark Segall
Telecopier: (212) 715-8000
E-mail: MSEGALL@KRAMER-LEVIN.COM
If to Lite-On, at:
Lite-On Corporation
12F, 25, Sec. 1 Tung Hwa S. Road
Taipei, Taiwan, Republic of China
Attention: Mr. Raymond Soong, Mr. David Lin
Telecopier: (886) 2 577 5960
with a copy to:
Winthrop Stimson, Putnam and Roberts
2505 Asia Pacific Finance Tower
3 Garden Road, Central
Hong Kong
Attention: Robert Lin
Telecopier: (852) 2530-3355
Any such notice so given shall be deemed conclusively to have been given upon
receipt.
ARTICLE 12 - MISCELLANEOUS
12.1. Governing Law. This Agreement and the rights, obligations and
relations of the parties shall be governed by and construed in accordance with
the laws of the State of New York, U.S.A. (but without giving effect to the
conflict of laws rules thereof).
- 16 -
12.2. Disputes. Any dispute or controversy arising with respect to a
claim of indemnification hereunder, including, without limitation, any dispute
concerning the scope of this arbitration clause, shall be settled by arbitration
in Singapore in accordance with the rules of the International Chamber of
Commerce. Judgment upon the award rendered by the arbitrators shall be final,
conclusive and binding on the parties and may be entered in and enforced to the
fullest extent of the law by any court having jurisdiction thereof, and the
parties hereby consent to the jurisdiction of the New York courts and the
Republic of China courts for this purpose.
12.3. Expenses. Unless otherwise provided for herein, each party shall
bear its own expenses incurred in connection with the execution of this
Agreement. Direct expenses incurred by the Shareholders in performance of this
Agreement subsequent to its execution, including expenses relating to the
formation of the Company and all taxes, fees, registration charges and legal and
notarial expenses, shall be borne by the Company or charged to the Company as
formation expenses.
12.4. Entire Agreement. This Agreement (including the Schedules and
Exhibits hereto) constitutes the entire agreement between the parties and
supersedes all prior understandings and communications between the parties.
12.5. Severability. If any provision of this Agreement is invalid or
unenforceable, such provision shall be severed and the remainder of this
Agreement shall be unaffected thereby and shall continue to be valid and
enforceable to the fullest extent permitted by law.
12.6. Further Assurances. The parties shall do all such things and
provide all such reasonable assurances as may be required to consummate the
transactions contemplated hereby, and each party shall provide such further
documents or instruments required by any other party as may be reasonably
necessary or desirable to effect the purpose of this Agreement and carry out its
provisions.
12.7. Assignment. Neither this Agreement nor any rights or obligations
hereunder shall be assignable by any party without the prior written consent of
each of the other parties, except that Vishay may assign its rights and
obligations hereunder to any direct or indirect wholly owned subsidiary. This
Agreement shall enure to the benefit of and be binding upon the respective
heirs, executors, administrators, successors and permitted assigns of the
parties.
12.8. Counterparts. This Agreement may be executed by the parties in
separate counterparts (by original or facsimile signature) each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute one and the same instrument.
- 17 -
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on the day and year first above written.
VISHAY INTERTECHNOLOGY, INC.
By: /s/ Richard N. Grubb
--------------------
Name: Richard N. Grubb
Title: Executive Vice President and
Chief Financial Officer
LITE-ON [JV CO.]
By: /s/ Raymond Soong
-----------------
Name: Raymond Soong
Title: Prepatory Officer
- 18 -
EXHIBIT C
AMENDMENT NO. 1 TO
JOINT VENTURE AGREEMENT
WHEREAS, Vishay Intertechnology, Inc., a Delaware USA corporation
("VISHAY"), and Lite-On JV Corporation, a company formed under the laws of The
Republic of China ("LITE-ON"), entered into the JOINT VENTURE AGREEMENT, dated
April 25, 1997 (the "JV AGREEMENT"), in connection with the STOCK PURCHASE
AGREEMENT, dated April 25, 1997 (the "STOCK PURCHASE AGREEMENT"), among Lite-On
Power Semiconductor Corporation, Silitek Corporation, Lite-On Technology
Corporation, Dyna Investment Co., Ltd., Lite-On Inc. and Other Shareholders
named therein (collectively, the "SELLERS") and Vishay (the "PURCHASER");
AND WHEREAS, the parties have since decided it is desirable to effect a
different ownership structure to be implemented as soon as possible following
the closing of the Stock Purchase Agreement;
AND WHEREAS, this AMENDMENT NO. 1 TO JOINT VENTURE AGREEMENT
("AMENDMENT NO. 1 TO JV AGREEMENT") is intended to reflect this new structure;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree to amend the JV
Agreement as follows:
1. Section 1.1.2. of Article 1 is hereby amended in its entirety to read as
follows:
1.1.2. "COMMENCEMENT DATE" means the date on which the final
initial capital contribution is received by the Holding Company and Joint
Venture Company (each as defined below).
2. Section 1.1.5. of Article 1 is hereby amended in its entirety to read as
follows:
1.1.5. "SHARES" means the authorized ordinary shares of either
the Holding Company or the Joint Venture Company, as the case may be.
3. Section 2.1. of Article 2 is hereby amended in its entirety to read as
follows:
2.1. Organization. The parties have formed Vishay Lite-On Holding Pte
Ltd (originally named Macinta Investments Pte Ltd, the "Holding Company"), under
the laws of Singapore and Vishay Lite-On Pte Ltd (originally named Hellser Pte
Ltd, the "Joint Venture Company," and with the Holding Company, sometimes
individually or collectively referred to, as the context requires, as the
"Company"), under the laws of Singapore. The constituent documents of each
Company shall not be inconsistent with the terms hereof and shall be mutually
agreed to by the Shareholders.
4. Article 3 is hereby amended in its entirety to read as follows:
ARTICLE 3 - CAPITAL CONTRIBUTIONS
3.1. Capital Contributions. The initial aggregate capital contributions
of the Shareholders shall be as follows:
3.1.1. Vishay, through the Joint Venture Company, is in the
process of acquiring (the "ACQUISITION") up to 100% of the outstanding capital
stock of Lite-On Power Semiconductor Corp. ("LPSC"), a company formed under the
laws of the ROC (the "LPSC SHARES"). Immediately prior to the consummation of
the Acquisition, Vishay shall directly own 50% of the capital stock of the Joint
Venture Company, with the remaining 50% to be directly owned by the Holding
Company, such that Vishay shall indirectly own 50% of the capital stock of the
Joint Venture Company through its 100% ownership of the capital stock of the
Holding Company.
3.1.2. As soon after the Acquisition as is legally permitted,
Lite-On shall purchase from Vishay up to 35% of the Joint Venture Company's
outstanding capital stock, free and clear of any liens or encumbrances
whatsoever, for the purchase price of US $70,000,000 in cash. As soon thereafter
as possible, Lite-On shall exchange such number of shares of outstanding capital
stock of the Joint Venture Company for such number of shares of outstanding
capital stock of the Holding Company in order to reflect the effective ownership
percentage in LPSC as set forth in Section 3.1.3.
3.1.3. Following the above transactions, the Shareholders'
respective ownership percentages in each Company (the "PERCENTAGE OWNERSHIP
INTERESTS") shall be:
Vishay: That Percentage Ownership Interest that will
give Vishay a minimum of a 65% ownership
interest in the Holding Company and a
minimum of a 35% ownership interest in the
Joint Venture Company, so that Vishay's
aggregate ownership interest in LPSC will be
65% on a fully diluted basis.
Lite-On: That Percentage Ownership Interest that will
give Lite-On a 35% ownership interest in the
Holding Company and a 17.5% ownership
interest in the Joint Venture Company;
provided, however, that Lite-On's aggregate
Percentage Ownership Interest in each
Company may be reduced on a pro rata basis
so that Lite- On's aggregate Percentage
Ownership Interest in LPSC will be 100%
minus Vishay's Percentage Ownership Interest
in LPSC following the calculation of
Vishay's Percentage Ownership Interest, as
provided above.
3.1.4. Any additional funds (the "ADDITIONAL FUNDS") required
by either the Holding Company or the Joint Venture Company, as determined from
time to time by the Board
- 2 -
of Directors of each Company in accordance with Section 4.2 below, shall be
provided, to the extent permitted by law, in the following order of priority:
FIRST: In the form of loans or other debt instruments
provided by third parties in arms-length transactions at
commercially reasonable rates;
SECOND: In the form of loans from the Shareholders in
proportion to their Percentage Ownership Interests, which
loans shall contain terms and conditions (including, without
limitation, ranking, interest rate and term) as the
Shareholders may agree from time to time (the "LOANS"); and
THIRD: In the form of additional capital
contributions from the Shareholders in proportion to their
Percentage Ownership Interests.
3.1.5. In the event any Shareholder (the "NON-COMPLYING
SHAREHOLDER") fails to timely deliver its Additional Funds to either the Holding
Company or the Joint Venture Company, as the case may be, (the "FUNDING
DEADLINE"), the other Shareholder shall have the option for a period of 30 days
following the Funding Deadline, to provide the funds not delivered by the
Non-complying Shareholder either in the form of (a) an additional contribution
to either Company's capital, as the case may be, in the form of cash, in which
case, the Percentage Ownership Interests shall be adjusted pursuant to Section
3.1.6 below to reflect such additional capital contribution, or (b) an
additional loan to either Company, as the case may be, upon the same terms and
conditions, to the extent possible, as the Loan, except that interest shall
accrue on such loan at a rate equal to 2% per annum above the rate provided for
in such Loan, or if no such loan is outstanding, at 6 month US dollar
denominated LIBOR (as in effect on the date the loan is made) plus 3%. The other
Shareholder shall provide the Non-complying Shareholder at least 20 days' prior
written notice of its election to provide the Additional Funds and in what form
such funds shall be provided.
3.1.6. Any adjustment in the Percentage Ownership Interests
shall be based upon a fair market valuation of either the Holding Company's or
the Joint Venture Company's equity, as the case may be, as a going concern at a
date no earlier than six months prior to the date of the event giving rise to
the need for such valuation. The valuation shall be as agreed upon by the
Shareholders, or in the absence of prompt agreement by the Shareholders, as
valued by either Company's independent certified public accountants, as the case
may be, or an independent appraiser selected by such accountants.
3.1.7. No Shareholder shall be entitled to withdraw any part
of its contributed capital from either Company or to receive any distribution
from either Company, except as expressly provided in this Agreement. No
Shareholder shall be entitled to demand or receive any property from either
Company other than cash.
3.1.8. No Shareholder shall have any personal liability for
the payment of the capital contribution of the other Shareholder.
- 3 -
3.2. Preemptive Rights. Subject to Section 3.1.5, the Shareholders
shall have a first right to purchase all or part of their pro rata share (based
on their Percentage Ownership Interests) of any additional Shares which either
the Holding Company or the Joint Venture Company, as the case may be, may, from
time to time, propose to sell and issue for a period of fifteen (15) days from
the time either the Holding Company or the Joint Venture Company, as the case
may be, provides notice of such proposal to the Shareholders.
3.3. Share Certificates. Upon receipt of the initial capital
contributions as described above, the Holding Company and the Joint Venture
Company each shall issue certificates representing Shares to Vishay and Lite-On
reflecting their respective Percentage Ownership Interests, and shall register
such Shares in its respective record of Shareholders as issued and fully paid.
Each share certificate shall bear upon its face the following legends:
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED,
SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF UNLESS AND UNTIL REGISTERED UNDER THE
SECURITIES ACT, ANY APPLICABLE STATE SECURITIES LAWS OR
UNLESS, IN THE OPINION OF COUNSEL, SATISFACTORY TO THE
COMPANY, SUCH SALE OR TRANSFER IS EXEMPT FROM REGISTRATION
OR IS OTHERWISE IN COMPLIANCE WITH THE SECURITIES ACT AND
MAY NOT BE OFFERED OR SOLD IN ANY OTHER JURISDICTION
UNLESS IN ACCORDANCE WITH ALL APPLICABLE PROVISIONS OF
LAW.
THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED UNDER THE TERMS OF A JOINT
VENTURE AGREEMENT, AS AMENDED, COPIES OF WHICH ARE ON FILE
AT THE OFFICE OF THE COMPANY.
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
VOTING TERMS AND CONDITIONS CONTAINED IN THE JOINT VENTURE
AGREEMENT REFERRED TO ABOVE.
5. Article 4 is hereby amended in its entirety to read as follows:
ARTICLE 4 - MANAGEMENT OF THE COMPANY
4.1. Board of Directors - Authority and Composition. The businesses of
each of the Holding Company and the Joint Venture Company shall be managed by a
Board of Directors (the "BOARD OF DIRECTORS"), each of which shall have full and
complete authority with respect to any matter relating to or arising out of this
Agreement. To the extent not provided for herein, each Board of Directors shall
be governed in their activities by the respective Memorandum and Articles of
Association or the equivalent constituent documents (the "M&A") of each Company.
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Each initial Board of Directors shall be composed of five members, three of whom
shall be designated by Vishay and two of whom shall be designated by Lite-On.
Each Shareholder may also designate alternate directors for each of their
appointees in accordance with applicable law and the applicable company's M&A.
Such directors shall serve until their successors shall have been duly elected
and qualified. Each of the Shareholders shall have the right to remove the
directors designated by such Shareholder and, in the event of a vacancy in
either of the Board of Directors, whatever its cause, such vacancy shall be
filled by an individual designated by the Shareholder who had designated the
former director to the post presently vacant. The Shareholders agree to vote
their Shares in any election of Directors to effect the foregoing.
4.2. Action by the Board of Directors of the Holding Company. So long
as each Shareholder holds an aggregate of at least 17.5% of the issued and
outstanding shares of the Holding Company, the vote of at least a majority of
the members of the Board of Directors attending (whether in person, by proxy or
teleconference) any duly called meeting of the Board of Directors with a
"quorum" (as defined below) present shall be required to authorize the Holding
Company to take any actions, except that the vote of at least 66 2/3% of the
members of the Board of Directors attending (whether in person or by
teleconference) any duly called meeting of the Board of Directors with a quorum
present (a "SUPERMAJORITY VOTE") shall be required to authorize the Holding
Company to take any of the actions set forth in Section 4.3 below.
4.3. Actions Requiring Supermajority Vote. The following actions
require a Supermajority Vote from the Board of Directors of the Holding Company:
(a) as required by local law;
(b) to make any amendment to the constituent
documents of either Company, as the case may be, or to
increase or decrease the size of the Board of Directors of
the Holding Company, as the case may be;
(c) to sell all or substantially all of the assets
of the Holding Company, or to effectuate the merger or
consolidation of the Holding Company, with or into another
corporation, or to cause the liquidation of the Holding
Company;
(d) to make any fundamental change in the Business
beyond the scope of manufacturing, marketing and selling
discrete power semiconductors and passive electronic
components, or to make any change in the Territory;
(e) to declare or pay any dividend or authorize or
make any distribution on any Shares;
(f) to change the compensation of the directors and
the Chairman or President of the Holding Company, the
Joint Venture Company or LPSC, except in the ordinary
course of business consistent with past practice;
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(g) to enter into any transaction with any
Shareholder or Affiliate of any Shareholder or any
director or officer or any Person with whom the Holding
Company does not deal at arm's length;
(h) other than as required by U.S. generally
accepted accounting principles, to make any change in the
accounting, tax practices or fiscal year of the Holding
Company, if any such change has a disproportionate
material adverse effect on any Shareholder;
(i) to agree to the settlement of, or the making or
acceptance of any payment in connection with, any claim by
or against the Holding Company, in which the amount in
dispute exceeds 15% of the registered capital of the
Holding Company, whether or not such claim is the subject
of litigation, arbitration or other judicial or
administrative proceedings; and
(j) as otherwise provided in this Agreement.
The Board of Directors of the Holding Company shall
call for at least two meetings per year. Reasonable travel expenses of the
members of the Board of Directors shall be paid by the Holding Company. Any one
director shall be entitled to call a meeting of the Board of Directors at any
reasonable time. A "QUORUM" shall mean a statutory quorum which shall include
two directors appointed by each Shareholder to be present (in person, by proxy
or by telephone); provided, however, that if a quorum is not present, the
meeting shall be adjourned for one week, at which time, subject to statutory
requirements, the directors present (in person or by telephone), with or without
the participation of a director appointed by each Shareholder, shall constitute
a quorum. Actions of the Board of Directors may be taken without a meeting if
all members of the Board of Directors consent in writing to such actions.
4.4. Officers - Day to Day Management. The day to day affairs of the
Holding Company and Joint Venture Company shall be managed by the officers of
the Holding Company and the officers of the Joint Venture Company, respectively,
who shall be elected by the Board of Directors in accordance with the Holding
Company's M&A and the Joint Venture Company's M&A, respectively. Any action to
be taken by the officers that is other than administrative in nature shall
require the written approval of any two officers one of whom shall be a Vishay
appointee. The initial officers of the Holding Company shall be as follows:
Dr. Felix Zandman - Chairman
Mr. Raymond Soong - Vice Chairman/President
Mr. Avi D. Eden - Vice President/Secretary
Mr. Richard Grubb - Vice President/Treasurer
Mr. David Lin - Assistant Secretary/Treasurer
The initial officers of the Joint Venture Company shall be as follows:
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Dr. Felix Zandman - Chairman
Mr. Raymond Soong - Vice Chairman/President
Mr. Avi D. Eden - Vice President/Secretary
Mr. Richard Grubb - Vice President/Treasurer
Mr. David Lin - Assistant Secretary/Treasurer
Such officers of the Holding Company and Joint Venture Company shall serve until
their successors shall have been duly elected and qualified. The Shareholders
agree that so long as this Agreement is in effect they shall direct their
designated directors to fill any vacancy and/or to elect new officers so that
the positions of Chairman, Vice President/Secretary and Vice President/Treasurer
of each Company shall be as designated by Vishay, and the positions of Vice
Chairman/President and Assistant Secretary/Treasurer of each Company shall be as
designated by Lite-On.
4.5. Subsidiaries. The foregoing provisions of this Article 4 shall
apply mutatis mutandis (provided that the 17.5% ownership threshold with respect
to the Shares in Section 4.2 shall apply to each subsidiary) to the management
of each direct and indirect subsidiary of each Company, including the Joint
Venture Company and LPSC; provided that (a) with respect to LPSC, the initial
officers shall be as set forth below:
Dr. Felix Zandman - Honorary Chairman
Mr. Raymond Soong - Chairman
Mr. M. K. Lu - President
Mr. Avi D. Eden - Vice President
Mr. Richard N. Grubb - Vice President
(b) with respect to jurisdictions which provide for supervisors of a Person (or
its equivalent) each of the Shareholders shall have the right to designate one
such supervisor, and (c) the size of the boards of each subsidiary shall be
determined by the Board of Directors of the Holding Company, provided that
Lite-On shall also be able to designate that number of directors representing
34% or more of the total number of board members for each such subsidiary.
6. Section 6.2. is hereby amended as follows:
6.2. Right of First Refusal. If at any time commencing from the fourth
anniversary of the Commencement Date (as defined below) of this Agreement,
either Shareholder (the "SELLING SHAREHOLDER") desires to sell, assign or
otherwise dispose of all or part of its Shares in either Company to a third
party, the Selling Shareholder must comply with the following provisions:
7. The introductory paragraph of Section 6.2.1. is hereby amended in its
entirety to read as follows:
6.2.1. Following the Selling Shareholder's receipt of a bona
fide offer from a third party (an "OFFER") to purchase all or a part of its
Shares in either Company, the other shareholder (the "HOLDER") shall have
customary rights of first refusal as follows:
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8. Section 6.4 is hereby amended in its entirety to read as follows:
6.4. Lite-On Put. If (a) the Board of Directors authorizes any
investment, acquisition or disposition in excess of US$100,000,000 or dismisses
without cause the Chairman or President of LPSC, in either case notwithstanding
the objection of all of the members of the Board of Directors designated by
Lite-On, or (b) a "Qualifying IPO" put shall have been triggered as provided in
Section 6.4.4. Lite-On shall have the right to require either Company, as the
case may be, to purchase its Percentage Ownership Interest in accordance with
the following provisions:
6.4.1. Lite-On shall notify either Company, as the case may be, and
Vishay in writing that it desires to sell its Percentage Ownership Interest in
either Company, as the case may be, specifying the event that triggered the
demand to sell.
6.4.2. Within 60 days following the receipt of such notice, if Lite-On
shall have delivered a valid notice of its demand to sell, Lite-On shall be paid
the "Put Value" (as defined below) by either of the Holding Company, the Joint
Venture Company or Vishay.
6.4.3. For purposes of this Section, "Put Value" means (a) until the
third anniversary of the Commencement Date, an amount equal to Lite-On's
aggregate capital contribution to either Company, as the case may be (including
the initial purchase from Vishay), together with interest at the annual rate of
six month U.S. dollar denominated LIBOR to be calculated from the date of each
capital contribution, and (b) following the third anniversary of the
Commencement Date, the market value of Lite-On's Percentage Ownership Interest
as determined by an internationally recognized investment bank mutually
acceptable to both Shareholders.
6.4.4. "Qualifying IPO" means: After the second anniversary of the
Commencement Date, if Lite-On determines it desires to commence an IPO for a
minority interest in respect of the Business of either Company, as the case may
be, it shall first obtain a letter from an internationally recognized and
reputable investment bank indicating the bank's interest in underwriting such an
IPO on a well capitalized, actively traded, developed securities market (which
shall include, without limitation, the New York and American Stock Exchanges,
the Nasdaq National Market Stock Market, The Taiwan Stock Exchange, The
Singapore Stock Exchange, the Stock Exchange of Hong Kong Limited, the Tokyo
Stock Exchange and the London Stock Exchange) and at a premium to the valuation
of LPSC on the date it was acquired by Vishay. Lite-On shall then notify Vishay,
which shall have 20 business days from receipt of Lite-On's notice to indicate
if it agrees to participate in the IPO or desires to postpone the IPO for up to
one year because of Vishay's business requirements. The "Qualifying IPO" put
will then be triggered upon the earlier of (a) the date Vishay indicates that it
does not desire to participate in the IPO requested by Lite-On and (b) one year
from the date Lite-On notified Vishay it desires to commence the IPO (unless at
that time a registration statement (or its equivalent) has been filed with the
relevant authorities).
9. Section 9.1. and Section 9.2 are hereby amended in their entirety to read as
follows:
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9.1. Events of Default; Termination. Either party may, in its sole discretion,
immediately terminate this Agreement upon the occurrence of any of the following
events: (a) either Company, as the case may be, is adjudged a bankrupt, or
becomes insolvent, or makes a general assignment for the benefit of creditors;
(b) any party breaches any representation, warranty, covenant or agreement
contained in this Agreement which results in, or is likely to result in, a
material adverse change to the financial condition of either Company, as the
case may be, which is not cured within 30 days following receipt of written
notice of such breach from the other party; or (c) any party effects a "Change
of Control." For purposes hereof, a "Change of Control" means the occurrence of
any one or more of the following: (A) a merger or consolidation in which such
party is not the surviving entity, (B) the sale (in one transaction or a series
of transactions) of all or substantially all of the assets of such party or (C)
the approval by such party's shareholders of any plan or proposal for the
liquidation or dissolution of such party. This Agreement may also be terminated
upon the unanimous written consent of the Shareholders.
9.2 Effects of Termination. In the event this Agreement is terminated for any
reason, then each Company shall immediately commence to wind up its affairs and
to liquidate the business of each Company in accordance with applicable law.
During the period of winding up, the rights and obligations of the Shareholders
shall otherwise continue unaltered.
10. In all other respects, the JV Agreement shall remain unchanged and in full
force and effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.
VISHAY INTERTECHNOLOGY, INC.
By: /s/ Richard N. Grubb
--------------------
Name: Richard N. Grubb
Title: Executive Vice President
LITE-ON JV CORPORATION
By: /s/ Raymond Soong
-------------------
Name: Raymond Soong
Title: Preparatory Officer
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