EX-2.1 2 v056512_ex2-1.txt 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. -2- DIODES INCORPORATED, a Delaware corporation By /s/ Keh-Shew Lu ------------------------------------- Keh-Shew Lu, President DII TAIWAN CORPORATION LTD., a Taiwan corporation By /s/ Steven Ho ------------------------------------- Steven Ho, General Manager APD SEMICONDUCTOR, INC., a California corporation By /s/ David Chow ------------------------------------- David Chow, Director APD SEMICONDUCTOR (ASIA) INC., a Cayman Islands corporation By /s/ David Chow ------------------------------------- David Chow, Director -3- 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: 1 Lagoon Drive Suite 410 Redwood City, California 94065 F7-1, No. 222, Section 3 Da-Tong Road Xi-Zhi City, Taipei County, Taiwan 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 (Gary Hurtz) 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 Vladimir 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 (Paul) 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 James Hong 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 - Betty O2006032 6/26/2006 Computer - Vivian 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