UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 10, 2006
DIODES INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 1-5740 95-2039518
(State or other jurisdiction (Commission File Number) (I.R.S. Employer Identification
of incorporation or organization) No.)
3050 East Hillcrest Drive
Westlake Village, California 91362
(Address of principal executive offices) (Zip Code)
(805) 446-4800
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01. Entry into a Material Definitive Agreement.
Wafer Purchase Agreement
On January 10, 2006, DII Taiwan Corporation Ltd. ("DII"), a wholly
owned subsidiary of Diodes Incorporated (the "Company") formed under the laws of
Taiwan, purchased an additional 40,470,212 shares (the "Shares") (or 80.94%) of
the outstanding capital stock of Anachip Corporation, a Taiwan corporation
("Anachip"), from Lite-On Semiconductor Corporation ("LSC"), Shin Sheng
Investment Limited and Sun Shining Investment Corp. For a more detailed
description of the purchase of the Shares and the relationship between the
Company and LSC, see "Item 2.01. Completion of Acquisition or Disposition of
Assets" below.
Concurrent with the purchase and sale of the Shares, Anachip entered
into a Wafer Purchase Agreement (the "Wafer Purchase Agreement") with LSC,
pursuant to which LSC will sell to Anachip, according to Anachip's requirements,
during the two year period ending on December 31, 2007, wafers of the same or
similar type, and meeting the same specifications, as those wafers currently
being purchased from LSC by Anachip. Anachip will purchase such wafers on terms
(including purchase price, delivery schedule, and payment terms) no less
favorable to Anachip than those terms on which Anachip currently purchases such
wafers from LSC; provided, however, that the purchase price will be the lower of
the current price or the most favorable customer pricing. If the price of raw
wafers increases by more than 20% within any six-month period, Anachip and LSC
will renegotiate in good faith the price of wafers to reflect the cost increase.
The foregoing description of the Wafer Purchase Agreement does not
purport to be complete and is qualified in its entirety by reference to the copy
of the Wafer Purchase Agreement (and the exhibits thereto), which is filed as
Exhibit 2.1 to this Report and is incorporated herein by this reference.
Item 2.01. Completion of Acquisition or Disposition of Assets.
Acquisition of Anachip
On January 10, 2006, DII purchased an additional 40,470,212 shares (the
"Shares") (or 80.94%) of the 50,000,000 outstanding shares of the capital stock
of Anachip, a fabless analog IC company.
DII purchased the Shares from LSC, Shin Sheng Investment Limited and
Sun Shining Investment Corp. (collectively, the "Selling Stockholders") pursuant
to that certain Stock Purchase Agreement dated as of December 20, 2005, by and
among DII, Anachip and the Selling Stockholders (the "Stock Purchase
Agreement"). DII purchased 31,027,000 of the Shares from LSC.
In December 2005, DII had purchased an aggregate of 9,433,613 shares
(or 18.87%) of the outstanding capital stock of Anachip from employees and other
stockholders of Anachip. Following completion of the purchase of the Shares, DII
holds approximately 99.81% of the outstanding capital stock of Anachip.
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The purchase price for the Shares (as well as the shares of the capital
stock of Anachip purchased in December 2005) was N.T.$20.00 (approximately
U.S$0.60) per share. The aggregate purchase price for all shares of the capital
stock of Anachip purchased by DII in December 2005 and January 2006 was
N.T.$998,076,500 (approximately U.S.$30 million).
For a more detailed description of the Stock Purchase Agreement, see
the description of the Stock Purchase Agreement contained in the Company's
Current Report on Form 8-K filed with the SEC on December 21, 2005, and the copy
of the Stock Purchase Agreement (and the exhibits thereto) filed as an exhibit
thereto.
Wafer Purchase Agreement
Concurrent with the purchase and sale of the Shares, Anachip entered
into a Wafer Purchase Agreement (the "Wafer Purchase Agreement") with LSC,
pursuant to which LSC will sell to Anachip, according to Anachip's requirements,
during the two year period ending on December 31, 2007, wafers of the same or
similar type, and meeting the same specifications, as those wafers currently
being purchased from LSC by Anachip. For a more detailed description of the
Wafer Purchase Agreement, see "Item 1.01. Entry into a Material Definitive
Agreement" above.
Relationship with Lite-On Semiconductor and The Lite-On Group
LSC is the Company's principal stockholder, the Company's largest
customer and one of the Company's largest suppliers. LSC currently owns
5,777,187 shares of the Company's common stock (22.9% of the Company's total
outstanding common stock). LSC is a Taiwan-based provider of image-sensing
products used in applications such as copiers, scanners and fax machines, as
well as discrete semiconductor products. The Lite-On Group is an affiliation of
several electronics companies, including LSC.
The Company has had a relationship with LSC since 1990. For 2004 and
the nine months ended September 30, 2005, LSC accounted for 11.6% and 9.5%,
respectively, of the Company's net sales. Other members of The Lite-On Group
accounted for an additional 3.3% and 5%, respectively, of the Company's net
sales in the same periods. In addition, for 2004 and the nine months ended
September 30, 2005, 17.2% and 14.9%, respectively, of the Company's net sales
were derived from the sale of discrete semiconductor products purchased from LSC
and subsequently sold by the Company.
Several of the Company's directors and executive officers are current
or former directors of LSC or other members of The Lite-On Group. For further
information concerning these relationships, see "Certain relationships and
related party transactions" and "Principal and selling stockholders" in
Amendment No. 1 to Registration Statement on Form S-3 of the Company filed with
the SEC on September 8, 2005.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits.
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Exhibit
Number Description
------ -----------
2.1* Wafer Purchase Agreement dated as of January 10, 2006, by
and between Anachip Corporation and Lite-On Semiconductor
Corporation.
- -------------------------
* All schedules have been omitted in reliance upon Item 601(b)(2) of Regulation
S-K. The Company agrees to furnish the SEC, supplementally, with a copy of any
omitted schedule upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DIODES INCORPORATED
Date: January 10, 2006 By /s/ Carl C. Wertz
----------------------------
Carl C. Wertz,
Chief Financial Officer
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EXHIBIT INDEX
Exhibit
Number Description
------ -----------
2.1* Wafer Purchase Agreement dated as of January 10, 2006, by
and between Anachip Corporation and Lite-On Semiconductor
Corporation.
- -------------------------
* All schedules have been omitted in reliance upon Item 601(b)(2) of Regulation
S-K. The Company agrees to furnish the SEC, supplementally, with a copy of any
omitted schedule upon request.
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EXECUTION COPY
WAFER PURCHASE AGREEMENT
By and Between
LITE-ON SEMICONDUCTOR CORPORATION,
and
ANACHIP CORPORATION
January 10, 2006
1. SCOPE................................................................3
2. DEFINITIONS..........................................................3
3. TERM.................................................................3
4. PURCHASE RIGHTS AND OBLIGATIONS......................................4
5. INTENTIONALLY OMITTED................................................4
6. PRICE AND PAYMENT....................................................4
7. ADDITIONAL SERVICES..................................................5
8. WARRANTIES...........................................................6
9. PRODUCT CHANGES AND APPROVALS........................................7
10. INDEMNIFICATION AND LIMITATION OF LIABILITY..........................8
11. FORCE MAJEURE........................................................9
12. ASSIGNMENT AND SUCCESSION............................................9
13. TERMINATION.........................................................10
14. PARAGRAPH TITLES....................................................10
15. GOVERNING LAW AND ARBITRATION.......................................10
16. ENTIRE AGREEMENT....................................................10
17. SEVERABILITY........................................................11
18. NOTICES.............................................................11
19. PUBLICITY...........................................................11
20. WAIVER..............................................................11
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Wafer Purchase Agreement
This Wafer Purchase Agreement ("Agreement") is made and entered into as of the
tenth day of January, 2006, by and between Lite-On Semiconductor Corp. with its
principal place of business at 9F, 233-2 Pao Chiao Road, Hsin-Tien City, Taipei
231, Taiwan, R.O.C. (herein referred to as "LSC"), and Anachip Corporation, with
its principal place of business at 2/F, 24-2 Industry E. 4th Rd., Hsinchu
Science Park, Hsinchu, Taiwan, R.O.C. (herein referred to as "Anachip").
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS CONTAINED HEREIN, THE
PARTIES AGREE AS FOLLOWS:
1. SCOPE
The purpose of this Agreement is to establish the terms and conditions
under which LSC will sell to Anachip, and Anachip will purchase from LSC,
semiconductor die in wafer form. This Agreement does not constitute an
order. Anachip's purchase orders (a "Purchase Order") (per Section 4) will
be required to purchase any Products from LSC.
2. DEFINITIONS
2.1 Wafer(s): Completed Products through wafer probe electrical testing.
2.2 Product(s): All semiconductor die in wafer form which are set forth
on Attachment 1, developed under Section 7, changed under Section 9
or introduced by LSC after the date of this Agreement.
2.3 Yield: The number of die on a wafer passing wafer probe electrical
testing, divided by the total number of die on a wafer.
2.4 Wafer Lot Yield: The average Yield of all wafers in one wafer Lot as
calculated in Section 2.3 above.
2.5 Lot: A lot of wafers started together using the same lot number and
processed through wafer fabrication as a single group.
2.6 Device Type: Different die types and sizes as set forth on
Attachment 1, developed under Section 7, changed under Section 9 or
introduced by LSC after the date of this Agreement.
3. TERM
3.1 This Agreement shall be effective as of the date hereof (the
"Effective Date") and continue for a period of two (2) years from
the Effective Date (the "Initial Term") unless terminated earlier as
otherwise provided herein. After the Initial Term, this Agreement
shall be renewed for additional two (2) year periods on a
period-to-period basis (each a "Renewal Term") if either party gives
written notice to the other party of its offer to renew at least
ninety (90) days prior to the end of the Initial Term or any Renewal
Term and the other party accepts such offer.
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3.2 Except as otherwise provided in this Agreement, upon termination of
this Agreement the parties shall complete performance of all
Purchase Orders accepted by LSC prior to the effective date of
termination to the extent they require delivery within the two (2)
month period from the effective date of termination. Any portion of
an accepted Purchase Order outstanding on the effective date of
termination that does not require delivery within such time shall be
void. Any portion of an accepted Purchase Order outstanding on the
effective date of termination that requires delivery within such two
(2) month period shall remain in effect, subject to the terms and
conditions herein.
4. PURCHASE RIGHTS AND OBLIGATIONS
4.1 During the Initial Term and each Renewal Term of this Agreement,
Anachip shall have the right to purchase, and LSC, upon receipt of a
duly completed Purchase Order, shall sell to Anachip such number of
units of Products as Anachip may request.
5. INTENTIONALLY OMITTED
6. PRICE AND PAYMENT
6.1 The unit price for each Product shall be equal to the average unit
price for such Product purchased by Anachip from LSC during the six
(6) months ended December 31, 2005, excepting specific price
modifications as allowed herein.
6.1.1 In the event the cost to LSC of raw wafers increases by more than
twenty percent (20%) within any six (6) month period, Anachip and
LSC shall renegotiate in good faith an upward adjustment to the
prices thereafter of Products solely to reflect such increase in the
cost of raw wafers. If the parties fail to agree regarding such
adjustment within two (2) months of LSC's written request therefor,
either party may terminate this Agreement by giving the other party
thirty (30) days written notice thereof.
6.2 New Device Types may be introduced from time-to-time by LSC, and the
prices therefore will be negotiated by Anachip and LSC in good faith
at the time of initial offering for sale by LSC.
6.3 The prices at which LSC agrees to sell the Products to Anachip
pursuant to this Agreement are inclusive of epitaxial substrate
costs, wafer processing costs, electrical testing per LSC's standard
procedures, packaging costs for shipment per LSC's standard
procedures, and any applicable taxes.
6.4 Delivery of Products and the risk of loss shall be F.O.B. LSC's
facility in Hsinchu Science Park as set forth in Incoterm 2000. It
shall be the responsibility of Anachip, at its own expense, to
insure any shipments against damage to or loss of Products. Unless
otherwise specified by Anachip, transportation will be by the most
cost effective method of transportation in keeping with any
particular delivery date. Packaging of shipments shall be in
accordance with LSC's standard practices. Any special packaging
requested by Anachip shall be made at Anachip's expense.
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6.5 After the Initial Term, all prices may be subject to good faith
renegotiation for each Renewal Term, which new prices will become
effective on the first day of such Renewal Term.
6.6 Anachip shall make payment in full for any and all LSC invoices
within sixty (60) days of the last day of the month in which the
Product is shipped and invoiced. In the event Anachip fails to
comply with this provision, LSC reserves the right to suspend or
delay shipments. A finance charge equal to the lesser of 1.0 percent
per month (12 percent APR) or the highest rate permitted by law,
accrued daily, shall be assessed on all past due accounts. In any
event, exercising this provision shall not in any way alter
Anachip's responsibilities to abide by the terms of this Agreement.
6.7 At all times, Anachip will receive the best price offered by LSC to
commercial accounts purchasing comparable wafer quantities,
excepting special discounts or other short-term promotional prices.
In the event LSC offers special discounts or other short-term
promotional pricing for specific Products, Anachip shall have first
and equal opportunity to purchase Products under such promotions and
at such promotional prices.
6.7.1 Anachip represents and warrants that Products purchased under
this Agreement are for assembly by Anachip into a higher level
of assembly, and are expressly NOT for resale as die in wafer
form or any other form. Anachip agrees that it shall not
resell Products purchased from LSC, in wafer or die form,
without the prior written consent by LSC, which consent shall
not be unreasonably withheld. In addition to any other
remedies available to LSC, breach of this Section 6.7.1 shall
sever Section 6.7 and related subsections from this Agreement,
without relieving either party from any and all remaining
obligations herein.
7. ADDITIONAL SERVICES
7.1 Product Development: Both parties agree to use commercially
reasonable efforts to develop, design and manufacture such new
products as required to meet the requests of Anachip's customers.
Non-recurring expense ("NRE") charges may be assessed by LSC for
development of products to Anachip's specifications. Payment of NRE
charges by Anachip to LSC shall not convey to Anachip any ownership
interest in or any license or right to produce existing or developed
products or processes of LSC.
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8. WARRANTIES
8.1 All Products sold by LSC under this Agreement shall have Wafer Lot
traceability using a lot number assigned by LSC. Any and all
communications between Anachip and LSC concerning warranty issues
shall reference this lot number.
8.2 All Products shall meet the specifications therefor set forth on
Attachment 1 hereto. Any new product or Device Type introduced by
LSC after the date of this Agreement or developed pursuant to
Section 7 shall meet such specifications as Anachip and LSC shall
mutually agree. Any deviations from such specifications must be
approved in writing by Anachip and LSC. Products shipped by LSC to
Anachip shall be electrically tested per specifications in effect at
time of purchase.
8.3 Anachip shall promptly inspect Products upon delivery of the
Products to a designated Anachip facility. Anachip shall complete
all inspections within thirty (30) days of delivery.
8.4 If any Product is claimed to be defective by Anachip, Anachip may,
before the end of the inspection period, submit a Corrective Action
Request ("CAR") to LSC for LSC's evaluation and/or analysis of the
claimed defective Product. Failure by Anachip to deliver a CAR to
LSC within thirty (30) days after delivery of the Products shall
constitute acceptance of the Products by Anachip.
8.5 Upon receipt of a CAR tracking number, Anachip shall promptly return
samples exhibiting the claimed defect to LSC for analysis. Cartons
containing samples returned for analysis shall have the CAR tracking
number clearly marked on the outside of the carton. Failure to
comply with this provision may result in LSC rejecting the return
shipment.
8.6 Upon completion of LSC's analysis, LSC will judge the claim as
either valid or invalid. If LSC agrees the defect as claimed is
valid, a Returned Material Authorization ("RMA") number will be
provided by LSC for return of the materials (wafers and/or wafer
lots) claimed under the initial request. Cartons containing returned
materials shall have the RMA tracking number clearly marked on the
outside of the carton. Failure to comply with this provision may
result in LSC rejecting the return shipment.
8.7 If LSC determines that the defect as claimed is invalid, then
Anachip may dispute the claim as set forth in Section 15.
8.8 Upon receipt of and verification that materials returned under RMA
are in good condition and of indicated quantity, LSC will issue a
credit memo to Anachip for adjustment of the amount invoiced to
Anachip.
8.9 LSC's indemnification on warranty of Products shall be strictly
limited as set forth in Article 10 below.
6
8.10 The provisions of the warranties set forth in this Agreement shall
not apply to, and no warranty of whatever kind shall exist for, any
Product or part thereof which has been subject to misuse, negligence
or accident or that has been altered by anyone other than LSC nor to
normal deterioration of any Product or part thereof due to wear,
usage or exposure. In addition, LSC is not responsible for damages
of whatever nature resulting from improper installation or
operations beyond design capability, whether intentional or
accidental.
8.11 EXCEPT AS SPECIFICALLY STATED IN THIS SECTION, LSC DISCLAIMS ALL
WARRANTIES, WHETHER EXPRESSED, IMPLIED OR STATUTORY, INCLUDING, BUT
NOT LIMITED TO, ANY WARRANTIES AS TO THE QUALITY OF THE PRODUCTS,
AND ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
9. PRODUCT CHANGES AND APPROVALS
9.1 After Products sold under this Agreement have been qualified and
released (in accordance with the parties' course of performance) by
both Anachip and LSC, all major manufacturing processes shall remain
unchanged unless both parties agree via the procedure below to
modify that process.
9.1.1 LSC will provide Anachip with written notice of any proposed
major process change, accompanied by the appropriate data to
support the change.
9.1.2 Anachip will have fourteen (14) working days to accept or
reject the proposed change in writing. In the event Anachip
fails to reply within the fourteen (14) day period, the
proposed change will be considered as accepted by Anachip and
may be fully implemented by LSC.
9.1.3 Anachip shall have the right to require re-qualification of
any Product where there has been a major process change. Upon
Anachip's acceptance of the proposed change, the newer process
shall be deemed qualified and may be fully implemented by LSC.
LSC shall, through lot traceability, be able to identify
Product processed under both the old and new processes.
9.1.4 If Anachip rejects a proposed major process change, Anachip
shall identify to LSC the reason for such rejection of the
proposed change. LSC shall have the option, in LSC's sole
discretion, to (a) continue to manufacture for Anachip
hereunder using the previously qualified process; (b)
eliminate such product, offering Anachip the opportunity to
place a last-time buy; or (c) a combination of (a) and (b) or
other alternatives as may be mutually acceptable to Anachip
and LSC.
9.2 Anachip may, at any time, submit written requests for change to
Products regarding specifications, designs, drawings, features, or
other characteristics of Products covered by this Agreement. LSC
may, at its sole discretion, notify Anachip in writing that
implementation of the requested change(s) renders LSC unable to
comply with its obligations hereunder. Both parties hereby agree
that any and all change requests shall be acted upon by LSC only if
such suggested change is in writing, cost impacts have been
evaluated, and agreement reached on new prices, NRE payments, and/or
other compensation resulting from the costs associated with the
requested change.
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9.2.1 LSC will reply to all change requests submitted by Anachip in
writing, indicating LSC's response to the requested change. If
the requested change is accepted by LSC in writing, such
change is assumed to be a written amendment to this Agreement,
executed by both parties.
9.3 Any changes to Products made in compliance with this Agreement shall
not relieve LSC of any of LSC's obligations hereunder unless such
relieved obligation has been covered by a written amendment to this
Agreement, executed by both parties.
10. INDEMNIFICATION AND LIMITATION OF LIABILITY
10.1 Anachip hereby agrees to indemnify LSC against and save it harmless
from all liability, claims or demands made by any party arising out
of damage to any property or death or injury to any employee of LSC
that is the result of negligence of Anachip.
10.2 LSC shall at all times defend, indemnify and hold harmless Anachip,
its officers, agents, directors, employees, representatives, and
permitted successors and assigns from and against any and all
losses, claims, demands, actions, suits, liabilities, damages, costs
or other expenses (including without limitation reasonable fees and
expenses of counsel and costs of investigation) related to or
arising out of any acts, duties or obligations of LSC or of any
personnel employed or otherwise engaged by the LSC, including (i)
injury and/or death to persons including Anachip's employees, agents
or representatives and damage to property, (ii) fines, levies or
other charges imposed by any governmental authority or agency, (iii)
failure to comply with or violation of any applicable federal,
state, local, or foreign laws, regulations, rules and ordinances,
(iv) any alleged infringement or violation of any patent right in
connection with the manufacture or sale of products by Anachip using
Products (unless the alleged infringement or violation was directed
by Anachip or due to the design by Anachip or for causes not
attributable to LSC). Anachip shall provide LSC (i) written notice
of any claim, demand, action, suit or other proceeding subject to
indemnification hereunder, and (ii) if such action is brought by a
third party, reasonable cooperation (at LSC's expense) in the
defense or settlement thereof. Notwithstanding the foregoing, LSC
may be represented in, but may not control, such action, suit, or
proceeding at its own expense and by its own counsel.
10.3 LSC shall not in any circumstances be liable to Anachip for anything
whatsoever other than the direct loss to Anachip (excluding any loss
of use, revenue or profit by Anachip or the amount of damages
awarded against Anachip in favor of, or monies paid by Anachip by
way of settlement to, any third party and any costs or expenses of
Anachip in connection with the same) due to the failure of Products
or defective Products.
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10.4 At all times and under all conditions, LSC's liability for direct
loss or damages is strictly limited to the value of the Product
shipped and invoiced, and at no time shall LSC's liability exceed
the value of the original amount invoiced by LSC or paid by Anachip,
whichever is less.
10.5 IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY ACTION IN CONTRACT,
TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR ANY OTHER THEORY OR
FORM OF ACTION FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL
OR PUNITIVE DAMAGES, LOSS OF PROFITS OR REVENUES, LOSS OF
ANTICIPATED PROFITS OR REVENUES, OR COST OF SUBSTITUTED PRODUCTS
INCURRED BY THE OTHER PARTY OR ANY OTHER PARTY AS A RESULT OF THE
PRODUCTS PROVIDED UNDER THIS AGREEMENT OR IN ANY WAY ARISING OUT OF
THIS AGREEMENT REGARDLESS OF WHETHER THE POSSIBILITY OF SUCH DAMAGE
WAS DISCLOSED TO OR REASONABLY COULD HAVE BEEN FORESEEN BY SUCH
PARTY AND THE LIABILITY OF LSC SHALL BE LIMITED TO THE TOTAL
PURCHASE PRICES ACTUALLY RECEIVED BY LSC FOR THE PRODUCTS IN DISPUTE
HEREUNDER.
10.6 No action for breach of this Agreement may be commenced more than
one (1) year after the date of the alleged breach.
11. FORCE MAJEURE
11.1 Neither party shall be liable to the other party for any inability
to comply with the provisions of this Agreement due to causes
reasonably beyond its control, including, but not limited to, fire,
flood, earthquake, explosion, accident, acts of public enemy, riots,
insurrections, war, labor disputes, transportation, or failures or
delays in transportation, embargoes, acts of God, acts of any
government, or any agency or department thereof or judicial action.
Upon the occurrence of such a force majeure condition, the affected
party shall promptly notify the other party and describe in
reasonable detail the circumstances of such condition and shall
promptly inform the other party of any further developments. If such
non-performance continues in effect for more than ninety (90) days,
the other party may, at its option, terminate this Agreement without
further cause or liability. Otherwise, this Agreement shall continue
in full force and effect for the remainder of its term upon
cessation of such event of force majeure.
12. ASSIGNMENT AND SUCCESSION
12.1 Neither party may assign or transfer (by operation of law or
otherwise) its rights or obligations under this Agreement without
the prior written consent of the other party, which consent shall
not be unreasonably withheld; provided, however, that Anachip may
assign or transfer all of its interests hereunder without the
consent of LSC to any person who controls, is controlled by or is
under common control with Anachip.
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12.2 This Agreement shall be binding upon and inure to the benefit of the
parties' successors and permitted assigns.
13. TERMINATION
13.1 Either party may terminate this Agreement immediately in the event
that the other party is the subject of a petition filed in
Bankruptcy Court of the United States, Singapore, Hong Kong, or
Taiwan, whether voluntary or involuntary, if a receiver or trustee
is appointed for all or a substantial portion of the assets of the
petitioning party, or if the petitioning party makes an assignment
for the benefit of its creditors.
13.2 Unless otherwise provided herein, either party may terminate this
Agreement immediately in the event that the other party is in
material breach of this Agreement and has failed to cure such breach
within thirty (30) days after receipt of a written notice of default
by the terminating party.
14. PARAGRAPH TITLES
The paragraph titles herein are intended for convenience only and shall
not be construed to alter either parties' obligations or rights as
otherwise set forth herein.
15. GOVERNING LAW AND ARBITRATION
15.1 This Agreement and the performance hereunder shall in all respects
be governed, construed and interpreted in accordance with laws of
Taiwan, the Republic of China.
15.2 All disputes arising in connection with this Agreement shall be
settled amicably through good faith negotiation. In the event no
agreement can be reached after thirty (30) days, all disputes shall
be submitted to arbitration by an arbitration panel of three
arbitrators in Taipei, Taiwan before and under the rules of the
Arbitration Association of the Republic of China. The arbitration
panel's decision shall be written and shall be final, conclusive,
and binding, and judgment on any arbitration award may be entered in
any court of competent jurisdiction.
16. ENTIRE AGREEMENT
This Agreement, including all other documents incorporated by reference
and those attached hereto as Attachments, expresses the entire
understanding of the parties hereto and cancels and supersedes any
previous agreements, understandings or representations between the parties
relating to the subject matter hereof. This Agreement may not be modified
except in a writing signed by an authorized officer or representative of
each party.
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17. SEVERABILITY
If any provision of this Agreement is held invalid, the remaining
provisions shall remain valid and in force, unless such invalidity would
frustrate the purpose of this Agreement.
18. NOTICES
Any notice to be given under this Agreement shall be in writing and shall
be sent to the appropriate party at the address first stated in this
Agreement, or to such other address as a party may later designate in
writing to the other. Notices shall be deemed to have been adequately sent
and delivered when received by the appropriate party, after having been
deposited in the United States mail (registered or certified), postage
prepaid.
19. PUBLICITY
Except as required by applicable law, neither party shall publicize or
otherwise disclose the terms of this Agreement without the prior approval
of the other party, which approval shall not be unreasonably withheld.
20. WAIVER
No failure or delay on the part of either party in the exercise of any
power, right or privilege arising hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right
or privilege preclude other or further exercise thereof or of any other
right, power or privilege.
Lite-On Semiconductor Corp. Anachip Corporation
By: /s/ C.H. Chen By: /s/ Jeffrey Tang
Name: C.H. Chen Name: Jeffrey Tang
Title: Vice Chairman Title: Supervisor
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