SECOND AMENDMENT
THIS SECOND AMENDMENT is made and effective as of October 31, 2006,
by and among Diodes Incorporated, a Delaware corporation ("Diodes"), DII Taiwan
Corporation Ltd., a Taiwan corporation ("Buyer"), APD Semiconductor, Inc., a
California corporation ("APD"), and APD Semiconductor (Asia) Inc., a corporation
formed under the laws of the Cayman Islands ("APD-Asia").
RECITALS
B. Buyer and APD are parties to that certain Asset Purchase
Agreement dated as of October 18, 2006, as subsequently amended (the
"Agreement"). All capitalized terms used in this Amendment, unless otherwise
defined in this Amendment, shall have the meaning set forth in the Agreement.
C. Each party hereto desires to amend the Agreement as set forth
herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained in this Amendment, and for other good and valuable
consideration the receipt and sufficiency of which hereby is acknowledged, the
parties agree as follows:
1. Intellectual Property.
(a) Schedule 1.01(a)(iv) of the Agreement hereby is amended to
read in full as set forth on Schedule 1 of this Amendment.
(b) APD and APD-Asia hereby represent and warrant that Phoenix
Atlantic Limited does not have any right, title or interest in, to or under any
Intellectual Property.
2. Acquired Contracts. Schedule 1.01(a)(v) of the Agreement hereby
is amended to read in full as set forth on Schedule 2 of this Amendment.
3. Excluded Assets. Schedule 1.02 of the Agreement hereby is amended
to read in full as set forth on Schedule 3 of this Amendment.
4. Omitted Disclosures Regarding Representations and Warranties;
Waiver and Release. Buyer hereby waives compliance with Section 5.02(i) of the
Agreement to the extent the failure to so comply is the result of the omission
from Schedules 3.01, 3.09(a), 3.10, 3.11, 3.14, 3.15, 3.20 or 3.22 of the
matters set forth on Schedule 4 of this Amendment (the "Omitted Disclosures").
Buyer hereby waives and releases APD and APD-Asia of and from any and all
claims, actions and causes of action, whether now known or unknown, which Buyer
now has, or at any other time had, or shall or may have against APD and/or
APD-Asia based upon or arising out of the previous omission from Schedules 3.01,
3.09(a), 3.10, 3.11, 3.14, 3.15, 3.20 or 3.22 of the Omitted Disclosures.
-1-
5. Business Records. Notwithstanding anything to the contrary
contained in Sections 1.01(a)(viii) or 1.01(b) of the Agreement, APD and
APD-Asia shall have the right to retain the original of any financial or other
business records which they are required by applicable law to retain in original
form. On the Closing Date, APD and APD-Asia shall provide Buyer with a true and
complete copy of any such records the original of which APD and APD-Asia have
retained under this Section 5. Buyer and its attorneys, accountants and other
representatives shall have access to, and the right to make copies and extracts
from, the originals of such records, from time to time after the Closing Date,
during regular business hours upon 48 hours notice for any purpose.
6. Taxes. Diodes shall pay all Taiwan VAT relating to the sale of
the Assets by APD-Asia to Buyer pursuant to the Agreement.
7. Payment of Purchase Price.
(a) Section 1.04(a)(i) of the Agreement is amended to read in
full as follows:
(i) pay to APD, on the Closing Date, U.S. $7 million;
(b) Section 1.03(b)(i) is deleted from the Agreement.
(c) The following is added as Section 1.03(c)(xi) of the
Agreement:
(xi) any indebtedness of APD to any bank or any
shareholders.
8. Miscellaneous.
(a) Except as expressly provided in this Amendment, the
Agreement shall remain in full force and effect. In the event of any conflict
between the Agreement and this Amendment, the provisions of this Amendment shall
govern.
(b) This Amendment (i) shall be binding upon the parties
hereto and their respective successors, agents, representatives, assigns,
officers, directors and employees; (ii) may not be amended or modified except in
writing; (iii) represents the entire understanding of the parties with respect
to the subject matter hereof; (iv) may be executed in separate counterparts,
each of which shall be deemed an original but all such counterparts shall
together constitute one and the same instrument; (v) shall be deemed to be a
part of the Agreement as fully as though set forth therein; and (vi) shall be
governed by and construed in accordance with the laws of the State of California
applicable to contracts made and to be performed solely within that state.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed as of the date first set forth above.
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DIODES INCORPORATED,
a Delaware corporation
By /s/ Keh-Xxxx Xx
-------------------------------------
Keh-Xxxx Xx, President
DII TAIWAN CORPORATION LTD.,
a Taiwan corporation
By /s/ Xxxxxx Xx
-------------------------------------
Xxxxxx Xx, General Manager
APD SEMICONDUCTOR, INC.,
a California corporation
By /s/ Xxxxx Xxxx
-------------------------------------
Xxxxx Xxxx, Director
APD SEMICONDUCTOR (ASIA) INC.,
a Cayman Islands corporation
By /s/ Xxxxx Xxxx
-------------------------------------
Xxxxx Xxxx, Director
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SCHEDULE 3
Excluded Assets
1. Any amount payable by Buyer to APD pursuant to Section 1.04(a); provided,
however, that the foregoing shall not limit Buyer's right to
indemnification pursuant to Section 7.01(a) and (b) or setoff pursuant to
Section 9.13.
2. The lease of those premises located at:
0 Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
X0-0, Xx. 000, Xxxxxxx 0
Xx-Xxxx Xxxx
Xx-Xxx Xxxx, Xxxxxx Xxxxxx, Xxxxxx
3. Cash, cash equivalents and short term investments.
4. Any Benefit Plan.
5. Any Contract other than those set forth on Schedule 1.01(a)(v).
6. Any investment in Phoenix Atlantic Limited and APD Semiconductor (Asia)
Inc.
7. All goods, services, economic benefits, payments, deposits, prepayments
and other rights and interests related to the Excluded Assets.
8. The trade names or trademarks "APD" and "APD Semiconductor" and all right,
title and interest therein.
9. All receivables, payables, deposits, prepayments, and accounts arising
from transactions with directors or shareholders of APD or any of their
respective Affiliates, which transactions are set forth on Schedule 3.14.
10. The fixed assets set forth below with a net book value of less than
U.S.$1,000:
APD Semiconductor, Inc.
Item Date Acquired
---- -------------
Diode Tester 9/23/1999
Diode Tester 4/4/2000
TPI W/Accessories 2 Sets 3/15/2001
Test Equipment 3/30/2001
Test Equipment 7/9/2001
MDL 2878 Monitor & Parts 10/24/2001
TVS-EOD Tester 1/31/2002
Power Supply (Xxxx Xxxxx) 4/15/2002
Curv Tracer 577 Hot Plate 9/30/2002
DV/DT Tester 10/4/2002
Oscilloscope 1/30/2003
Sencore LC Meter 102 11/22/2004
HP644B 600V Power Supply 4/20/2005
Overhead Projector 4/5/1999
Continue
Item Date Acquired
---- -------------
Computer Workstation 6/7/1999
Computer Equipment 7/6/1999
Office Equipment 8/1/1999
Office Equipment 4/21/2000
Laptop for Xxxxxxxx 5/9/2000
PC(2 Sets) 8/17/2000
Hardrive and DVD 9/15/2000
Notebook Computer & Case 10/5/2000
Microscope, Equip, Table 10/9/2000
PC(2) and Server 10/27/2000
2 EPSN SYTLS 86 Printer. 11/2/2000
Notebook for CL 11/3/2000
Telephone and Voice Mail 11/10/2000
Notebook 11/28/2000
Computer System (Xxxx) 2/28/2001
Dell Computer (LA Office) 5/9/2001
Monitor, Keyboard 5/9/2001
Workstation(LA) 11/19/2001
Microscope 11/19/2001
Laptop and Video card(2) 2/28/2002
Server, Switch & Cable Kit 3/8/2002
Computer 7/1/2002
Computer 7/17/2002
Refrigerator 9/24/2002
Printer 10/15/2002
Logitech OCAM 12/13/2002
512MB USB Hardrive 2/28/2003
Asus A7266 Motherboard 1/9/2004
HP Pav ZD-7000 Lap Top 1/19/2004
Dell Dimen 2400 Computer 4/20/2004
2.4GB Computer (Server) 6/18/2004
Office Copier 12/31/2004
Xxxxx Xxxx Laptop Computer 4/8/2005
Computer 8/31/2005
Dell Laptop Computer 7/1/2006
Dell Computer 7/13/2006
Dell Computer 7/13/2006
APD Semiconductor (Asia), Inc. Taiwan Branch
Item Asset No. Date Acquired
---- --------- -------------
To-3P burn-in board FA04022 10/30/2004
Epson Overhead Projector FA05007 4/29/2005
Continue
Item Asset No. Date Acquired
---- --------------- -------------
Tel System FA050016 6/30/2005
DC Power Supply GPR60H15D T2006031 6/19/2006
Compaq Note Book-248538 FA04024 9/30/2004
Compaq Note Book-248538 FA04025 9/30/2004
Compaq Note Book - 267719 FA04032-FA04033 12/31/2004
Computer - Xxxxx O2006032 6/26/2006
Computer - Xxxxxx O2006033 6/30/2006
Office Renovation 8/1/2004
Schedule 3
SCHEDULE 4
Waiver of Breach of Representations
1. Schedule 3.01
o APD Semiconductor (Asia) Inc. is qualified as a foreign corporation
to transact business through its Taiwan branch.
2. Schedule 3.09(a)
o Each of the purchase orders or agreements with customers or
suppliers either cannot by its terms be terminated by APD with 90
days' or less notice without penalty or provides for a term
continuing beyond one year after the date of the Agreement.
o Refer to Schedule 3.14 and Schedule 3.20 regarding indebtedness and
service arrangements with Lotus Atlantic Limited and its Affiliates.
3. Schedule 3.10
Name Coverage Policy Number Policy Period Insurance Limits Insured Amounts
---------- --------------- ---------------- ------------- ------------------------- -------------------------
One Beacon General 711-00-85-07-000 08/01/06 - Each Occurrence $1,000,000
Insurance Liability 08/01/07 Damage to rented Premises 500,000
Med Exp (Any one person) 10,000
Personal & Adv Injury 1,000,000
General Aggregate 2,000,000
Products-Com./Op Agg. 2,000,000
Employee Benefits 250,000 Each Claim
500,000 Annual Aggregate
1,000 Deductible
One Beacon Excess/Umbrella 711-00-85-07-000 08/01/06 - Each Occurrence 1,000,000
Insurance Liability 08/01/07 Products/Completed
Operations Aggregate 1,000,000 Policy Limit
Bodily Injury by Disease 1,000,000 Aggregate Limit
General Aggregate 1,000,000 Policy Limit
Republic Workers 162953-03 08/01/06 - Bodily injury by Accident 1,000,000 Each Accident
Indemnity Compensation 08/01/07
Bodily injury by Disease 1,000,000 Each Employee
Bodily injury by Disease 1,000,000 Policy Limit
4. Schedule 3.11
o The amount of such inventory on the Financial Statements is valued
at weighted average cost.
Schedule 4
5. Schedule 3.14
o Consulting Agreement dated as of September 10, 1998, between VMVR
International Inc. and APD Semiconductor, Inc.
o Consulting Agreement dated as of April 1, 2006, between Promax
Industry Corporation and APD Semiconductor, Inc.
o Convertible Subordinated Secured Note dated as of May 12, 2004,
between Lotus Atlantic Limited and APD Semiconductor, Inc., in the
principal amount of $3 million.
o Convertible Subordinated Secured Note dated as of June 12, 2006,
between Lotus Atlantic Limited and APD Semiconductor, Inc., in the
principal amount of $2 million.
o Promissory Note dated as of October 20, 2006, between Lotus Atlantic
Limited and APD Semiconductor, Inc., in the principal amount of
$150,000.
o Debit note charges dated as of October 5, 2006, by SMC Multimedia
Products Company Limited to APD Semiconductor (Asia) Inc., in the
amount of $35,363.
o Debit note charges dated as of September 30, 2006, by Galactic
Computing Corporation to APD Semiconductor (Asia) Inc., in the
amount of HK $2,833.
6. Schedule 3.15
The following charges have been made since August 31, 2006:
o Debit note charges dated as of October 5, 2006, by SMC Multimedia
Products Company Limited to APD Semiconductor (Asia) Inc., in
the amount of $35,363.
o Debit note charges dated as of September 30, 2006, by Galactic
Computing Corporation to APD Semiconductor (Asia) Inc., in the
amount of HK $ 2,833.
7. Schedule 3.20
o Promissory Note in the principal amount of $150,000, dated October
20, 2006, payable to Lotus Atlantic Limited.
8. Schedule 3.22
o See Schedule 3.22(a), (b) and (c) attached.
Schedule 4
