8-K

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): October 17, 2005

ALLIANCE SEMICONDUCTOR CORPORATION

(Exact name of registrant as specified in its charter)

000-22594
(Commission File Number)

Delaware
(State or other jurisdiction of
incorporation) 77-0057842
(I.R.S. Employer Identification No.)

2575 Augustine Drive
Santa Clara, California 95054-2914
(Address of principal executive offices, with zip code)

(408) 855-4900
(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:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EXHIBIT 10.1

EXHIBIT 10.2

EXHIBIT 99.1

ITEM 1.01. Entry Into A Material Definitive Agreement.

     On October 17, 2005, Alliance Semiconductor Corporation (“Alliance” or the “Company”), N. Damodar Reddy, C.N. Reddy, B. Riley & Co., Inc., Bryant R. Riley, Sanford L. Kane, Gregory E. Barton, Juan A. Benitez, Edward J. McCluskey, Alan B. Howe, Robert D’Agostino and J. Michael Gullard entered into a Settlement Agreement (the “Settlement Agreement”) setting forth the parties’ agreement with respect to a proxy contest related to the election of directors at an annual meeting of stockholders previously scheduled for October 20, 2005 (the “Contest”) and various other matters related thereto as described below.

     Pursuant to the Settlement Agreement, Alliance’s board of directors then in office (the “Old Board”) approved a reconstituted board of directors that consists of the individuals listed in Item 5.02 of this Form 8-K (the “New Board”).

     Pursuant to the Settlement Agreement, among other things:

• The Company canceled the annual meeting of stockholders scheduled to occur on October 20, 2005 (the “Old Annual Meeting”). Concurrently, the Company set December 2, 2005 as the date of the next annual meeting of stockholders of the Company (the “New Annual Meeting”) and set November 1, 2005 as the record date for such meeting. The nominees for election to the board at the New Annual Meeting will be the members of the New Board (the “Nominees”).

• Bryant R. Riley and B. Riley & Co., Inc. (together “Riley & Co.”), N. Damodar Reddy and C.N. Reddy (which collectively beneficially own approximately 37% of the Company’s common stock outstanding as of October 18, 2005) agreed to vote all shares of Company stock under their control in favor of the election of the Nominees at the New Annual Meeting and any other meeting of the stockholders held before August 31, 2006 for the purpose of electing or removing directors.

• Each of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee of the New Board will be composed of two of Bryant R. Riley, Alan B. Howe, Bob D’Agostino and J. Michael Gullard (the “New Nominees”) and one of either N. Damodar Reddy or Edward J. McCluskey (the “Incumbent Nominees”).

• Until the 2006 annual meeting of stockholders, the signatories to the Settlement Agreement (except in a capacity as members of the board of directors of the Company) and their affiliates agreed not to solicit proxies with respect to the election of directors or any other proposal and not to attempt, in their capacity as stockholders, to call a special meeting of stockholders for any purpose.

• For a period of one year, members of the New Board and their affiliates agreed not to act in concert with others as part of a 13D group for the purpose of changing the composition of the board of directors of the Company.

• The signatories to the Settlement Agreement agreed to mutual releases covering any actions or claims arising in connection with the Contest and the Old Annual Meeting, and released any claims they individually hold against each other and agreed not to assert or cooperate in asserting any derivative or direct claims against each other.

• The Company agreed to reimburse B. Riley & Co., Inc., which is controlled by Bryant R. Riley, for up to $450,000 of its actual out-of-pocket costs actually incurred (such as printers, proxy solicitor fees and expenses, California and Delaware counsel and actual out-of-pocket expense for telephone, courier and travel) directly related to its campaign to elect at the Old Annual Meeting the

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nominees described in its proxy statement filed with the Securities and Exchange Commission on September 19, 2005.

• The Company agreed to indemnify each signatory to the Settlement Agreement against any costs or expenses by reason of such party entering into, and performing, or causing the Company to perform, the Settlement Agreement.

• The Company agreed to mail the notice required by Rule 14f-1 under the Securities Exchange Act of 1934, as amended (“Rule 14f-1”) concerning the change in a majority of its directors no later than October 20, 2005, and to separate the offices of Chairman and Chief Executive Officer.

     A copy of the Settlement Agreement is attached as Exhibit 10.1 and incorporated by reference herein. The foregoing description of the Settlement Agreement is qualified by reference to the full text of such exhibit.

     On October 17, 2005, the Old Board approved and ratified an amendment to the Company’s existing Indemnity Agreements with its directors to, among other things, (1) eliminate a provision allowing the board to prohibit the Company from advancing expenses to an indemnitee even though the indemnitee provided the undertaking required by both the indemnity agreement and Delaware law; (2) allow a court to determine, at the indemnitee’s request, whether the indemnitee had met the standard of conduct justifying indemnification in a specific case; and (3) allow the Company to invoke certain exclusions from the indemnification obligation only if a court of competent jurisdiction had rendered a final, non-appealable judgment that the indemnitee had engaged in the conduct triggering such exclusion.

     A copy of the form of Amendment to Indemnity Agreement is attached as Exhibit 10.2 and incorporated by reference herein. The foregoing description of the Amendment to Indemnity Agreement is qualified by reference to the full text of such exhibit.

     On October 17, 2005, a special committee of the Old Board, consisting of N. Damodar Reddy and C.N. Reddy, approved an amendment to the standard board compensation arrangement such that each non-employee director would be paid by the Company a one-time fee of $6,000 for his attendance at three special meetings of the board of directors.

Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

     (b) Pursuant to the Settlement Agreement, after the resignations and appointments of directors as further described in Item 5.02 of this Form 8-K, the Company’s board of directors is currently comprised of N. Damodar Reddy, Bryant R. Riley, J. Michael Gullard and C.N. Reddy. As a result, on October 19, 2005, the Company notified The Nasdaq Stock Market, Inc. (“Nasdaq”) that the Company is temporarily not in compliance with Nasdaq Marketplace Rules 4350(c)(1)(requiring that a majority of the board of directors be comprised of independent directors) and 4350(d)(2)(A) (requiring that the audit committee consist of three independent directors) (the “Marketplace Rules”) due to the vacancies on the board and its audit committee created by the resignations. The Company expects this temporary non-compliance to be cured automatically by October 31, 2005, or 10 days after the Company’s mailing of the required

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notice on October 20, 2005 for the additional independent directors to assume the director positions to which they were appointed, as described in Item 5.02 of this Form 8-K.

     Automatically upon compliance by the Company with Rule 14f-1, a majority of the New Board will be comprised of independent directors meeting the requirements of Marketplace Rule 4350(c)(1). Concurrently as described in Item 5.02 of this Form 8-K, the board’s audit committee will be comprised of three independent directors meeting the requirements of Marketplace Rule 4350(d)(2)(A).

Item 5.01 Change in Control of Registrant.

     The change in the composition of the board of directors referred to in Item 5.02 of this Form 8-K that has occurred due to the Settlement Agreement may (although approved by the Old Board) be deemed to have resulted in a change of control of the Company. The description of the Settlement Agreement set forth in Item 1.01 of this Form 8-K is incorporated into this Item 5.01 by reference.

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

     (b) and (d)

     Pursuant to the Settlement Agreement, on October 17, 2005, the Old Board (1) increased the number of directors of the Company to seven; (2) appointed Bryant R. Riley and J. Michael Gullard as directors, effective as of the execution and delivery of the Settlement Agreement by all signatories (the “Effective Time”); and (3) appointed Alan B. Howe, Bob D’Agostino and Edward J. McCluskey as directors, effective after the Effective Time and automatically upon, and only upon, compliance by the Company with Rule 14f-1. Thereafter, the board accepted the resignations of Sanford L. Kane, Gregory E. Barton and Juan A. Benitez from membership on the board, effective immediately prior to the Effective Time. As of the date of this report, the board of directors consists of N. Damodar Reddy, Bryant R. Riley, J. Michael Gullard and C.N. Reddy. Upon the Company’s compliance with Rule 14f-1, the board of directors of the Company will consist of the following seven members: N. Damodar Reddy, Bryant R. Riley, J. Michael Gullard, Alan B. Howe, Bob D’Agostino, C.N. Reddy and Edward J. McCluskey, identified above and referred to in this Form 8-K as the “New Board.”

     The Settlement Agreement provides that each of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee of the New Board be composed of two New Nominees and one Incumbent Nominee. On October 19, 2005, the members of the board of directors then in office (N. Damodar Reddy, Bryant R. Riley, J. Michael Gullard and C.N. Reddy) appointed Bryant R. Riley and J. Michael Gullard, effective immediately, and Alan B. Howe, Bob D’Agostino and Edward J. McCluskey, effective upon the compliance by the Company with Rule 14f-1, to serve on the following committees:

		Nominating and Corporate
Audit Committee	Compensation Committee	Governance Committee
J. Michael Gullard (Chairman)	Alan B. Howe	Bob D’Agostino
Alan B. Howe	Edward J. McCluskey	Edward J. McCluskey
Edward J. McCluskey	Bryant R. Riley (Chairman)	Bryant R. Riley (Chairman)

     None of the newly appointed directors has, or has had since the Company’s last fiscal year, a relationship with the Company that would require disclosure under Item 404(a) of Regulation S-K, except for Bryant R. Riley. Pursuant to the Settlement Agreement, the Company agreed to reimburse B. Riley & Co., Inc., which is controlled by Bryant R. Riley, up to $450,000 of its actual out-of-pocket costs actually incurred (such as printers, proxy solicitor fees and expenses, California and Delaware counsel and actual out-of-pocket expense) directly related to its campaign to elect the nominees described in its proxy statement filed with the Securities and Exchange Commission on September 19, 2005.

     A copy of the press release announcing the settlement and the above resignations and appointments to the New Board has been filed as Exhibit 99.1 to this report and is incorporated herein by reference.

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Item 9.01 Financial Statements and Exhibits.

(c) Exhibits.

Exhibit No.	Description
10.1.	Settlement Agreement by and among Alliance Semiconductor Corporation, N. Damodar Reddy, Sanford L. Kane, Gregory E. Barton, Juan A. Benitez, Edward J. McCluskey, C.N. Reddy, Bryant R. Riley, Alan B. Howe, Bob D’Agostino, J. Michael Gullard and B. Riley & Co., Inc. dated as of October 17, 2005.
10.2.	Form of Amendment to Indemnity Agreement approved by the Board of Directors on October 17, 2005.
99.1	Press release issued by Alliance Semiconductor Corporation on October 18, 2005.

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SIGNATURE

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 hereunto duly authorized.

	ALLIANCE SEMICONDUCTOR CORPORATION
Date: October 21, 2005	By:	/s/ N. Damodar Reddy
		N. Damodar Reddy
		Chairman of the Board, President, Chief Executive
		Officer and Interim Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description
10.1.	Settlement Agreement by and among Alliance Semiconductor Corporation, N. Damodar Reddy, Sanford L. Kane, Gregory E. Barton, Juan A. Benitez, Edward J. McCluskey, C.N. Reddy, Bryant R. Riley, Alan B. Howe, Bob D’Agostino, J. Michael Gullard and B. Riley & Co., Inc. dated as of October 17, 2005.
10.2.	Form of Amendment to Indemnity Agreement approved by the Board of Directors on October 17, 2005.
99.1	Press release issued by Alliance Semiconductor Corporation on October 18, 2005.

EX-10.1

Exhibit 10.1

SETTLEMENT AGREEMENT

     SETTLEMENT AGREEMENT, dated as of October 17, 2005 (this “Agreement”), by and among Alliance Semiconductor Corporation, a Delaware corporation (the “Company”), N. Damodar Reddy, Sanford L. Kane, Gregory E. Barton, Juan A. Benitez, Edward J. McCluskey, C.N. Reddy, Bryant R. Riley, Alan B. Howe, Bob D’Agostino, J. Michael Gullard, and B. Riley & Co., Inc., a Delaware corporation.

     WHEREAS, the parties to this Agreement have engaged in a proxy contest (the “Contest”) related to the election of directors at the currently scheduled October 20, 2005 Annual Meeting of Stockholders of the Company (the “Old Annual Meeting”) involving a good faith controversy over issues of corporate policy;

     WHEREAS, the parties to this Agreement believe that the stockholders have benefited from the policy debate generated by the Contest;

     WHEREAS, the New Board (as defined below) will be composed of directors who have voiced differing policy positions during the Contest and whose views have been supported by different groups of stockholders during the course of the Contest;

     WHEREAS, the parties to this Agreement believe that a settlement of the Contest will provide stability to the Company and its customers and employees and allow for orderly and value-maximizing decision-making by the New Board and management concerning the Company’s semiconductor business, the Company’s investment portfolio and the Company’s marketable securities; and

     WHEREAS, a settlement of the Contest also will settle possible disputes and possible litigation relating to the outcome of the Old Annual Meeting;

     NOW, THEREFORE, in consideration of the mutual representations and warranties, covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

ARTICLE I AGREEMENTS AS TO BOARD COMPOSITION

     Section 1.01 The following individuals (the “New Nominees”) shall be appointed to the Board of Directors of the Company (the “Board”), which shall be expanded to seven members, as of the execution and delivery of this Agreement by all signatories (the “Effective Time”): Bryant R. Riley, Alan B. Howe, Bob D’Agostino, and J. Michael Gullard; provided, however, that the appointments of Alan B .Howe and Bob D’Agostino will be delayed and shall become effective automatically upon, but only upon, compliance by the Company with Rule 14f-1 under the Securities Exchange Act of 1934, as amended (“Rule 14f-1”), which the Company shall complete as promptly as possible (with the mailing of the required notice commencing in no event later than October 20, 2005).

     Section 1.02 Concurrently, three individuals currently serving as directors of the Company (Gregory E. Barton, Juan A. Benitez and Sanford L. Kane; collectively, the “Resigning Directors”) shall resign from the Board, effective as of the Effective Time, and Edward J. McCluskey shall be appointed to the Board, which appointment will be delayed and shall become effective automatically upon, but only upon, compliance by the Company with Rule 14f-1.

     Section 1.03 As a result, at the Effective Time the Company’s Board of Directors shall consist of Bryant R. Riley, J. Michael Gullard, C.N. Reddy. and N. Damodar Reddy, and upon the Company’s compliance with Rule 14f-1, the Board (the “New Board”) will consist of the following seven (7) members: the four New Nominees, C.N. Reddy and two other individuals, N. Damodar Reddy and Edward J. McCluskey (the “Continuing Directors”).

     Section 1.04 Concurrently, the Board will act to ensure that, after the Effective Time and upon the Company’s compliance with Rule 14f-1, the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee are composed of the following individuals: two of the New Nominees and one Continuing Director.

     Section 1.05 Initially, N. Damodar Reddy shall continue to serve as Chairman of the Board. The Company hereby agrees to separate the offices of Chairman of the Board and Chief Executive Officer.

     Section 1.06 Each signatory to this Agreement who will serve as a member of the New Board hereby acknowledges and agrees that no director will participate in Board or Board committee discussions or decisions concerning any company in which both such director and the Company have invested or, with respect to N. Damodar Reddy and C. N. Reddy, with respect to any matter involving Alliance Ventures Management.

ARTICLE II 2005 ANNUAL MEETING OF STOCKHOLDERS

     Section 2.01 The Board acknowledges that it has cancelled the Old Annual Meeting and has set December 2, 2005 as the date of the next annual meeting of stockholders of the Company (the “New Annual Meeting”) and November 1, 2005 as the record date for the New Annual Meeting.

     Section 2.02 The New Board shall nominate and recommend the election of a slate of seven (7) directors for election at the New Annual Meeting, which slate shall consist of the following individuals: the four New Nominees, C.N. Reddy and the two Continuing Directors. The Company proxy statement for the New Annual Meeting shall be in form and substance reasonably acceptable to Bryant R. Riley, and his costs to review and comment thereon shall be reimbursed by the Company if so approved by the New Board.

     Section 2.03 N. Damodar Reddy, C.N. Reddy, Bryant R. Riley and B. Riley & Co., Inc. hereby agree to vote all shares of Company stock under their control and the control of their controlled affiliates in favor of the election of the nominees so approved by the New Board for election at the New Annual Meeting and any other meeting of the stockholders held before August 31, 2006 for the purpose of electing or removing directors.

ARTICLE III ADDITIONAL AGREEMENTS

     Section 3.01 For a period of one year from the Effective Time, the signatories to the Agreement who will serve as members of the New Board hereby agree to take all action necessary, consistent with their fiduciary duties to the Company, to ensure that the four New Nominees, C.N. Reddy and the two Continuing Directors continue as directors until the 2006 annual meeting of stockholders of the Company, which meeting will not be held earlier than August 31, 2006 (the “2006 Annual Meeting”).

     Section 3.02 Until the 2006 Annual Meeting, none of N. Damodar Reddy, C.N. Reddy, Bryant R. Riley, B. Riley & Co., Inc., the Continuing Directors, the Resigning Directors, the New Nominees or their affiliates shall, except in a capacity as members of the New Board, solicit proxies with respect to the election of directors or any other proposal nor shall they attempt, in their capacity as stockholders, to call a special meeting of stockholders for any purpose. The New Board shall be free to convene meetings of stockholders to approve corporate actions or for any other purpose consistent with its duties, but the convening of such a meeting and the solicitation of proxies in connection with such a meeting shall not supersede the provisions of this Section 3.02 or Section 3.01.

     Section 3.03 For a period of one year from the Effective Time, none of N. Damodar Reddy, C.N. Reddy, Bryant R. Riley, B. Riley & Co., Inc., the New Nominees, the Continuing Directors or their affiliates shall act in concert with others as part of a 13D group for the purpose of changing the composition of the Board.

     Section 3.04

     (a) The New Nominees and C.N. Reddy hereby agree for the benefit of the Company and N. Damodar Reddy, the Resigning Directors and Edward J. McCluskey, and each director, officer, stockholder, agent, affiliate, employee, partner, attorney, heir, assign, executor, administrator, predecessor and successor, past and present, of the Company and N. Damodar Reddy, the Resigning Directors and Edward J. McCluskey (the Company, N. Damodar Reddy, the Resigning Directors, Edward J. McCluskey and each such person being a “Company Released Person”) as follows:

          (i) The New Nominees and C.N. Reddy, for themselves and for their members, affiliates, officers, directors, assigns, agents and successors, past and present, hereby agree and confirm that, effective from and after the date of this Agreement, they hereby acknowledge full and complete satisfaction of, and covenant not to sue, and forever fully release and discharge each Company Released Person of, and hold each Company Released Person harmless from, any and all rights, claims, warranties, demands, debts, obligations, liabilities, costs, attorneys’ fees, expenses, suits, losses and causes of action of any nature whatsoever, whether known or unknown, suspected or unsuspected, derivative or direct, arising in respect of or in connection with any and all actions taken or omitted from being taken with respect to (a) the Contest and (b) the Old Annual Meeting, including the nomination of director candidates, the solicitation of proxies, all filings made with the Securities and Exchange Commission (the “SEC”), and all other statements and communications made to stockholders or the public

(“Claims”), occurring any time or period of time on or prior to the date of this Agreement (including the future effects of such transactions, occurrences, conditions, acts or omissions).

          (ii) The undersigned understand and agree that the Claims released by the New Nominees and C.N. Reddy above include not only those Claims presently known but also include all unknown or unanticipated claims, rights, demands, actions, obligations, liabilities, and causes of action of every kind and character that would otherwise come within the scope of the Claims as described above. The New Nominees and C.N. Reddy understand that they may hereafter discover facts different from or in addition to what they now believe to be true, which if known, could have materially affected this Release of Claims, but they nevertheless waive any claims or rights based on different or additional facts. The New Nominees and C.N. Reddy knowingly and voluntarily waive any and all rights or benefits that they may now have, or in the future may have, under the terms of Section 1542 of the California Civil Code, which provides as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

     (b) The Company, N. Damodar Reddy, the Resigning Directors and Edward J. McCluskey (the “Company Releasors”) hereby agree for the benefit of the New Nominees and C.N. Reddy, and each officer, director, stockholder, agent, affiliate, employee, partner, attorney, heir, assign, executor, administrator, predecessor and successor, past and present, thereof (the New Nominees, C.N. Reddy and each such person being a “New Nominees Released Person”) as follows:

          (i) The Company Releasors, for themselves and for their affiliates, officers, directors, assigns, agents and successors, past and present, hereby agree and confirm that, effective from and after the date of this Agreement, they hereby acknowledge full and complete satisfaction of, and covenant not to sue, and forever fully release and discharge each New Nominees Released Person of, and hold each New Nominees Released Person harmless from, any and all Claims of any nature whatsoever, whether known or unknown, suspected or unsuspected, derivative or direct, occurring any time or period of time on or prior to the date of this Agreement (including the future effects of such transactions, occurrences, conditions, acts or omissions).

          (ii) The undersigned understand and agree that the Claims released by the Company Releasors above include not only those Claims presently known but also include all unknown or unanticipated claims, rights, demands, actions, obligations, liabilities, and causes of action of every kind and character that would otherwise come within the scope of the Claims as described above. The Company Releasors understand that they may hereafter discover facts different from or in addition to what they now believe to be true, which if known, could have materially affected this Release of Claims, but they nevertheless waive any claims or rights based on different or additional facts. The Company Releasors knowingly and voluntarily waive

          any and all rights or benefits that they may now have, or in the future may have, under the terms of Section 1542 of the California Civil Code, which provides as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

     Section 3.05 For a period of three years from and after the date hereof, each of the Company, the Continuing Directors, the New Nominees and the Resigning Directors, on behalf of themselves and their affiliates, officers, directors, partners, managers, members, and agents with actual authority to speak for the Company, the Continuing Directors, the New Nominees and the Resigning Directors, as the case may be, with regard to the Contest, expressly acknowledges, agrees, and covenants that he, she or it will not make any statements, comments, or communications that are reasonably likely to be considered to be disparaging of or derogatory or detrimental to, the good name or business reputation of one another or any of their respective members, partners, officers, directors, employees or representatives (including statements relating to the circumstances leading up to and including the execution of this Agreement); provided however, this Section does not preclude criticism of prior business practices or decisions provided such criticism does not constitute a personal attack (i.e. criticism shall be couched as a disagreement or a change). Where applicable, this mutual non-disparagement covenant applies to any public or private statements, comments, or communications in any form, whether oral, written, or electronic. Each of the Company, the Continuing Directors, the New Nominees and the Resigning Directors further agrees that he, she or it will not knowingly encourage or solicit any such statements, comments or communications.

     Section 3.06 The signatories to the Agreement hereby acknowledge and agree that as long as they have material non-public information about the Company they will refrain from using it to trade in Company securities and that to the extent that they continue to serve as directors of the Company they owe a fiduciary duty to the Company to refrain from improper disclosure of confidential information.

     Section 3.07 The Company, recognizing that if B. Riley & Co., Inc. were to prevail in the Contest it likely would be entitled under Delaware law to seek reimbursement from the Company for the costs it reasonably incurred in connection with such Contest, shall reimburse B. Riley & Co., Inc. for all out-of-pocket costs actually incurred by B. Riley & Co., Inc. (such as printers, proxy solicitor fees and expenses, California and Delaware counsel and actual out-of-pocket expense for telephone, courier and travel) directly related to its campaign to elect at the Old Annual Meeting the nominees described in its proxy statement filed with the SEC on September 19, 2005; provided, that B. Riley & Co., Inc. provides invoices to support such expenses; and provided further, that reimbursement of such expenses shall not exceed $450,000.

     Section 3.08

     (a) The Company shall to the maximum extent permitted by Delaware law indemnify, defend and hold harmless each signatory to this Agreement (including the Resigning Directors) and their heirs, assigns, executors, administrators, predecessors and successors (individually an “Indemnified Party” and collectively, the “Indemnified Parties”) against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, amounts paid in settlement, claims, penalties, damages or liabilities incurred or suffered by any Indemnified Party arising by reason of such Indemnified Party entering into, and performing, or causing the Company to perform, this Agreement, whether civil, criminal, administrative or investigative (including, without limitation, costs of settlement and the advancement of reasonable attorney’s fees and disbursements), which shall be paid, reimbursed or advanced by the Company on a monthly basis prior to the final disposition thereof without the requirement of any bond or other security.

     (b) From and after the Effective Time, the Company shall keep in full force and effect, and comply with the terms and conditions of, any indemnification agreement, as amended, in effect as of the Effective Time between the Company and its directors and officers.

     (c) From and after the Effective Time, the Company shall maintain in effect the provisions in its Certificate of Incorporation and Bylaws providing for indemnification of each present and former director and officer of the Company with respect to facts and circumstances occurring at or prior to the Effective Time, to the fullest extent permitted from time to time under the Delaware General Corporation Law, which provisions shall not be amended except as required by applicable law or except to make changes permitted by applicable law that would increase the scope of such person’s indemnification rights thereunder.

     Section 3.09 With respect to the matters contained herein, no party shall issue a press release unless it is mutually approved by Bryant R. Riley and the Company.

     Section 3.10 The New Board shall cause the Company to comply with the terms and conditions of the Agreement.

ARTICLE IV MISCELLANEOUS

     Section 4.01 Article and Section references are to this Agreement, unless otherwise specified. All references to instruments, documents, contracts, and agreements are references to such instruments, documents, contracts, and agreements as the same may be amended, supplemented, and otherwise modified from time to time, unless otherwise specified. The word “including” shall mean “including but not limited to.” This Agreement shall be deemed to have been mutually prepared by the parties hereto and shall not be construed against any of them by reason of authorship.

     Section 4.02 Neither this Agreement nor any of the rights or obligations of any party hereunder shall be assignable without the prior written consent of the other parties hereto, other than as expressly provided herein and assignments by operation of law. This Agreement shall be binding upon the undersigned and their respective successors and permitted assigns. This Agreement contains the entire understanding of the parties with respect to its subject matter. This Agreement may be amended only by a written instrument duly executed by all the parties or their respective successors and assigns. If any provision of this Agreement shall be deemed or

declared to be unenforceable, invalid or void, the same shall not impair any of the other provisions of this Agreement.

     Section 4.03 All notices and demands provided for hereunder shall be in writing and shall be given by registered or certified mail, return receipt requested, telecopy, Internet electronic mail, air courier guaranteeing overnight delivery or personal delivery to each person at the address provided under his signature or to such other address as the parties may designate in writing. All other communications may be by regular mail. All notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; upon

actual receipt if sent by certified mail, return receipt requested, or regular mail, if mailed; when receipt acknowledged, if telecopied or sent via Internet electronic mail; and upon actual receipt when delivered to a courier guaranteeing overnight delivery.

     Section 4.04 This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California, without reference to the conflict of laws principles thereof, and each of the parties hereto agree that any action or proceeding relating to or arising out of this Agreement shall be adjudicated in the courts of California.

     Section 4.05 This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement.

     Section 4.06 Each signatory to this Agreement represents and warrants with respect to itself or himself that it or he is duly authorized to execute, deliver and perform this Agreement, that this Agreement has been duly executed by such signatory, and that this Agreement is a legal, valid and binding agreement of such signatory, enforceable against such signatory in accordance with its terms.

[Signature page follows]

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement, effective as of the date first above written.

ALLIANCE SEMICONDUCTOR CORPORATION

/s/ N. Damodar Reddy

By: N. Damodar Reddy

Its: President and Chief Executive Officer

/s/ N. Damodar Reddy

N. Damodar Reddy

Address:

Fax:

/s/ C.N. Reddy

C.N. Reddy

Address:

Fax:

B. RILEY & CO., INC.

/s/ Bryant R. Riley

By: Bryant R. Riley

Its: Chairman

Address:

Fax:

/s/ Bryant R. Riley

Bryant R. Riley

Address:

Fax:

/s/ Sanford L. Kane

Sanford L. Kane

Address:

Fax:

/s/ Gregory E. Barton

Gregory E. Barton

Address:

Fax:

/s/ Juan A. Benitez

Juan A. Benitez

Address:

Fax:

/s/ Edward J. McCluskey

Edward J. McCluskey

Address:

Fax:

/s/ Alan B. Howe

Alan B. Howe

Address:

Fax:

/s/ Bob D’Agostino

Bob D’Agostino

Address:

Fax:

/s/ J. Michael Gullard

J. Michael Gullard

Address:

Fax:

EX-10.2

Exhibit 10.2

AMENDMENT TO INDEMNITY AGREEMENT

     THIS AMENDMENT TO INDEMNITY AGREEMENT (this “Amendment”), dated as of                     , is made by and between Alliance Semiconductor Corporation, a Delaware corporation with executive offices at 2575 Augustine Drive, Santa Clara, California 95054 (the “Company” ), and                     .

BACKGROUND

A. The parties hereto are parties to Indemnity Agreement, dated as of                      (the “Original Agreement”).

B. The parties hereto previously agreed to amend certain provisions of the Original Agreement, and wish to confirm such agreement as provided herein.

     NOW, THEREFORE, in consideration of the premises and mutual covenants hereinafter set forth, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Section 6 hereby is amended by deleting in its entirety the last sentence of Section 6. Section 6 is hereby further amended by add at the end thereof a new sentence reading as follows: “If so requested by the Company, Indemnitee hereby agrees to provide the Company in connection with any proceeding a written undertaking confirming, with respect to such proceeding, the undertaking of the Indemnitee set forth in this Section 6”.

2. The last two sentences of Section 8.2 hereby are amended to read in their entirety as follows: “Such determination shall be made (a) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, (and if such directors so direct, by independent legal counsel in a written opinion), (b) by the stockholders of the Company, or (c) a court of competent jurisdiction. Unless prohibited by the General Corporation Law of the State of Delaware, Indemnitee shall be entitled to select the forum from the choices of forums specified in such clauses (a) through (c) in which Indemnitee’s entitlement to indemnification and advances will be determined, but shall pay the costs incurred by the Company if a determination by the stockholders is requested”.

3. Section 9.2 hereby is amended to insert the following phrase between the word “determines” and the word “that”: “by a final and non-appealable judgment”.

4. Section 9.4 hereby is deleted in its entirety.

5. Section 9.7 hereby is amended to insert the following phrase between the word “which” and the word “Indemnitee”: “a court of competent jurisdiction determines by a final and non-appealable judgment that”.

6. Section 9.8 hereby is amended to insert the following phrase between the word “that” and the word “constituted”: “a court of competent jurisdiction determines by a final and non-appealable judgment”.

7. The Original Agreement, as amended hereby, remains in full force and effect.

8. Capitalized terms used but not defined herein shall have the meanings designated in the Original Agreement.

9. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above written.

ALLIANCE SEMICONDUCTOR CORPORATION
By:
	Name:
	Title:
	Print Name:

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EX-99.1

[ALLIANCE SEMICONDUCTOR LETTERHEAD]

Exhibit 99.1

Press Release

COMPANY CONTACT:	ADDITIONAL CONTACT:	INVESTOR CONTACT:
N.D. Reddy	Bryant R. Riley/ Tom Kelleher	Kellie Nugent
Chairman, President, CEO and Interim CFO	B. Riley & Co., Inc.	Shelton Investor Relations
408-855-4900	310-966-1444	972-239-5119 Ext. 125
		knugent@sheltongroup.com

ALLIANCE SEMICONDUCTOR AND B. RILEY & CO. END PROXY CONTEST;
AGREEMENT WILL BENEFIT ALL SHAREHOLDERS

ANNUAL MEETING POSTPONED

SANTA CLARA, CALIFORNIA- October 18, 2005 — Alliance Semiconductor Corporation (Nasdaq: ALSC), and B. Riley & Co, Inc. (“Riley & Co.”), today announced that they have reached an agreement to end their proxy contest.

Pursuant to an agreement entered into last night, the Alliance Semiconductor board of directors (the “Board”) will be expanded to seven members and shall include all of the nominees proposed by B. Riley & Co. Specifically, the Company’s new directors shall include Bryant R. Riley, Alan B. Howe, Bob D’Agostino, and J. Michael Gullard (the “New Riley Nominees”.)

Pursuant to the terms of the agreement, effective immediately, three individuals previously serving as directors of the Company have resigned, and the Board is currently comprised of Bryant R. Riley, N. Damodar Reddy, J. Michael Gullard and C.N. Reddy. Automatically upon compliance by the Company with Rule 14f-1 of the Securities and Exchange Commission, the Board will consist of the following seven (7) members: Bryant R. Riley, J. Michael Gullard, Bob D’Agostino, Alan B. Howe, Edward J. McCluskey N. Damodar Reddy and, C.N. Reddy (the “New Board”).

Also as part of the agreement, Alliance Semiconductor announced that its annual meeting of stockholders will be held on December 2, 2005. The board of directors will consist of seven members, and the nominees for election to the board at the annual meeting will be the members of the New Board. The record date for determining stockholders eligible to participate in the annual meeting will be November 1, 2005.

Bryant Riley said, “We are very pleased to have reached this agreement with Alliance Semiconductor and strongly believe that it is in the best interests of all Alliance Semiconductor stockholders, customers and employees. I appreciate the willingness of the
Alliance Semiconductor board of directors to facilitate an orderly resolution to the proxy contest. I look forward to working with the new board members and the employees for the benefit of all stockholders.”

N. Damodar Reddy, who will continue as Chairman, stated, “We are pleased to have reached this settlement with Riley & Co. We are confident that it is in the best interests of all of our stockholders, customers and employees. It is time to end the dispute and refocus the Company’s efforts toward creating value for stockholders.” Mr. Reddy concluded, “I

want to thank all of our employees for their constant support and dedication to our business during this period. I also want to thank our departing directors for their service to the Company and its stockholders.”

Forward-Looking Statements
Except for historical information, the above statements of this press release are forward-looking statements. Forward-Looking Statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in the Forward-Looking Statements. These risks and uncertainties include such factors, among others, as further significant price erosion of the Company’s products; continued significantly decreased demand and increased competitive environment for the Company’s products; the possibility of additional deficiencies in the Company’s internal controls over financial reporting; the Company’s potential status as an Investment Act of 1940 reporting company; obsolescence of the Company’s products; further accumulation of excess inventory or price erosion or obsolescence of existing inventory, any of which may result in charges against the Company’s earnings; inability to timely ramp up production of and deliver new or enhanced products; inability to successfully recruit and retain qualified technical and other personnel; adverse developments in current or future litigation or administrative proceedings; further diminution in value of investments made by Alliance or by Alliance Venture Management, LLC; cancellation of orders in the Company’s backlog and the risk factors listed in the Company’s periodic reports filed with the Securities and Exchange Commission, which are available through the Company’s home page at http://www.alsc.com. These forward-looking statements speak only as of the date of this press release; they are based on management’s estimates, projections and assumptions as of the date hereof and include the assumptions that underlie such statements. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or to reflect any change in events, conditions or circumstances on which any such forward-looking statement is based.

About Alliance Semiconductor Corporation
Alliance Semiconductor Corporation (Nasdaq:ALSC) is powering applications with high performance solutions for the communications, computing and consumer electronics markets. Utilizing advanced process technologies and design expertise, Alliance provides leading OEMs with a broad portfolio of complementary technologies including analog and mixed-signal products, chip-to-chip connectivity products, networking controllers and high-performance memories. Alliance addresses the complete needs of system developers by leveraging its proprietary advances in Electromagnetic Interference (EMI) reduction, power management and timing technology, HyperTransport™ I/O connectivity and specialized memory solutions for next-generation applications. Founded in 1985, Alliance is headquartered in Santa Clara, California with design centers in Bangalore and Hyderabad, India. The Company is publicly traded on NASDAQ with ticker symbol ALSC. Additional information is available on the Alliance Web site at www.ALSC.com.

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