-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 S62GIQynse2gXzmeGKIDNhVVi2AQPwUEGewTjwwXiFw84lb+Wd4GK/Xykn5Lzb72
 vD4QOwbwBgKKSubPwrKbpg==

<SEC-DOCUMENT>0000950150-00-001014.txt : 20001219
<SEC-HEADER>0000950150-00-001014.hdr.sgml : 20001219
ACCESSION NUMBER:		0000950150-00-001014
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		8
CONFORMED PERIOD OF REPORT:	20001201
ITEM INFORMATION:		
ITEM INFORMATION:		
FILED AS OF DATE:		20001218

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DIODES INC /DEL/
		CENTRAL INDEX KEY:			0000029002
		STANDARD INDUSTRIAL CLASSIFICATION:	SEMICONDUCTORS & RELATED DEVICES [3674]
		IRS NUMBER:				952039518
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		
		SEC FILE NUMBER:	002-25577
		FILM NUMBER:		791287

	BUSINESS ADDRESS:	
		STREET 1:		3050 E HILLCREST DR
		CITY:			WESTLAKE VILLAGE
		STATE:			CA
		ZIP:			91362
		BUSINESS PHONE:		8054464800

	MAIL ADDRESS:	
		STREET 1:		3050 E HILLCREST DR SUITE 200
		STREET 2:		3050 E HILLCREST DR SUITE 200
		CITY:			WESTLAKE VILLAGE
		STATE:			CA
		ZIP:			913623154
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>a68061e8-k.txt
<DESCRIPTION>FORM 8-K DATED DECEMBER 1,2000
<TEXT>

<PAGE>   1

                                  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

                                DECEMBER 1, 2000
                Date of Report (Date of Earliest Event Reported)

                               DIODES INCORPORATED
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                        <C>                            <C>
   DELAWARE                         1-5740                     95-2039518
   (State or other         (Commission File Number)         (I.R.S. Employer
   jurisdiction of                                        Identification Number)
   Incorporation)
</TABLE>

                            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)



                                      -1-
<PAGE>   2

ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.

General

              On December 1, 2000, the Company purchased all the outstanding
capital stock of FabTech, Inc., a Delaware corporation ("FabTech"), pursuant to
a Stock Purchase Agreement dated as of November 28, 2000, among the Company,
FabTech and Lite-On Power Semiconductor Corporation, a Taiwan corporation
("LPSC").

              Since 1996, FabTech has operated a 5-inch silicon wafer foundry
specializing in Schottky products and formerly owned by AT&T. LPSC, which owns
approximately 38% of the Company's outstanding Common Stock, is a member of The
Lite-On Group, a consortium of Taiwan-based manufacturers of power
semiconductors, computer peripherals and communications products.

Strategy

              The acquisition of FabTech is a key element in the Company's
strategy of becoming a vertically integrated manufacturer and supplier of
discrete semiconductors. The Company believes that FabTech's wafer foundry and
research and development capacity will contribute significantly to the Company's
goal to develop higher-margin, proprietary products in the areas of
miniaturization, integrated discretes and chip-scale discretes. This expanded
product development capacity, together with the Company's manufacturing
facilities in China and superior customer service, is intended to enable the
Company to become a total solution provider for its customers. FabTech will
continue to provide wafers for use in the Company's internal manufacturing
processes at Diodes-China, as well as to sell wafers to trade customers.

FabTech

              FabTech has 210 employees, including eight senior engineers.
FabTech's manufacturing facility, located in Lee's Summit, Missouri, consists of
approximately 110,000 square feet, including a 16,000 square foot clean room,
70,000 square feet of manufacturing equipment and offices, and 40,000 square
feet of storage and mechanical area, leased from a third party. The term of the
lease is ten years, commencing on July 1, 1999. The annual base rent is
approximately $1,400,000, subject to a one percent (1%) annual increase. In
addition, FabTech must pay certain operating costs of the facility.

Terms

              The purchase price consists of approximately $6 million in cash
and an earnout of up to $30 million if FabTech meets specified earnings targets
over a four-year period. In addition, FabTech is obligated to repay an aggregate
of approximately $19 million, consisting of (i) approximately $13.6 million
payable, together with interest at LIBOR plus 1%, to LPSC through March 31,
2002, (ii) approximately $2.6 million payable, together with interest at LIBOR
plus 1.1%, to the Company through February 28, 2001 and (iii) approximately $3.0
million payable to a financial institution, which amount was repaid on December
4, 2000 with the proceeds of a capital contribution by the Company.

              FabTech has entered into a Volume Purchase Agreement dated as of
October 25, 2000 with LPSC pursuant to which LPSC is obligated to purchase from
FabTech, and FabTech is obligated to manufacture and sell to LPSC, a specified
number of Schottky wafers. In addition, LPSC is obligated to purchase from
FabTech at least 90% of the total number of such wafers purchased by LPSC from
all sources, provided that FabTech is competitive in pricing and quality.

              FabTech has entered into management incentive agreements and
severance agreements with its two officers pursuant to which they may be
entitled to (i) bonuses if FabTech meets specified earnings targets over a
four-year period and (ii) severance payments if they are terminated without
"cause" (as defined).



                                      -2-
<PAGE>   3

              FabTech has also entered into management incentive agreements with
certain of its key employees, pursuant to which they may be entitled to bonuses
if FabTech meets specified earnings targets over a four-year period.


Fairness Opinion

              The Board of Directors of the Company unanimously approved the
acquisition of the outstanding capital stock of FabTech. In reaching its
decision to approve the acquisition, the Board of Directors considered the
following factors, among others:

       -      The unanimous recommendation by a committee consisting of all
              independent directors that the Board of Directors approve the
              transaction; and

       -      The opinion of Duff & Phelps, LLP, dated November 28, 2000, that
              the consideration to be paid by the Company in the proposed
              transaction is fair to the Company and its stockholders from a
              financial point of view.

Amendment to Credit Facility

              On December 1, 2000, the Company amended its credit facility with
Union Bank of California. The amended credit facility provides for (i) a term
loan of $10 million for financing the acquisition of FabTech, (ii) a working
capital line of up to $9.0 million and (iii) term commitment notes of up to
approximately $7.6 million for equipment financing. Interest on outstanding
borrowings under the credit facility accrues at LIBOR plus 1.5%. The term loan
facility is payable interest only until December 4, 2001 and then is payable in
36 equal monthly installments. The working capital facility is payable interest
only until June 30, 2002 when it is payable in full. The term commitment notes
repayment schedules range between 15 to 51 monthly installments. The credit
facility is guaranteed by all domestic subsidiaries of the Company and is
secured by all domestic assets of the Company and its subsidiaries. The credit
facility is subject to certain restrictive covenants, including a provision that
the Company maintain a specified ratio of senior funded debt to EBITDA and a
minimum fixed charge coverage ratio.

              The foregoing description of the acquisition by the Company of the
outstanding capital stock of FabTech and the Company's amended credit facility
with Union Bank of California does not purport to be complete and is qualified
in its entirety by reference to the complete text of the Stock Purchase
Agreement, the opinion of Duff & Phelps, LLP and the Credit Agreement, which are
attached as exhibits to this Current Report on Form 8-K and are incorporated
herein in their entirety.

ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.

              (a)    Financial Statements: The financial statements required by
                     this item will be filed by amendment not later than 60 days
                     after the date this report on Form 8-K must be filed.

              (b)    Pro Forma Financial Information: The pro forma financial
                     information required by this item will be filed by
                     amendment not later than 60 days after the date this report
                     on Form 8-K must be filed.

              (c)    Exhibits

              10.30+ Stock Purchase Agreement dated as of November 28, 2000,
                     among Diodes Incorporated, FabTech, Inc. and Lite-On Power
                     Semiconductor Corporation.

              10.31+ Volume Purchase Agreement dated as of October 25, 2000,
                     between FabTech, Inc. and Lite-On Power Semiconductor
                     Corporation.



                                      -3-
<PAGE>   4

              10.32+ Credit Agreement dated as of December 1, 2000, between
                     Diodes Incorporated and Union Bank of California.

              10.33+ Subordination Agreement dated as of December 1, 2000, by
                     Lite-On Power Semiconductor Corporation in favor of Union
                     Bank of California.

              10.34  Subordinated Promissory Note in the principal amount of
                     $13,549,000 made by FabTech, Inc. payable to Lite-On Power
                     Semiconductor Corporation.

              99.17  Opinion of Duff & Phelps, LLP dated November 28, 2000.

              99.18  Press Release: Diodes, Inc. Announces Successful Completion
                     of FabTech Acquisition



   +   All schedules and exhibits have been omitted. Any omitted schedule or
       exhibit will be furnished supplementally to the Securities and Exchange
       Commission 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 hereunto duly authorized.

Dated:  December 14, 2000                   DIODES INCORPORATED

                                            By /s/ Carl Wertz
                                            CARL WERTZ
                                            Chief Financial Officer



                                      -4-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.30
<SEQUENCE>2
<FILENAME>a68061ex10-30.txt
<DESCRIPTION>EXHIBIT 10.30
<TEXT>

<PAGE>   1

                                  EXHIBIT 10.30




                            STOCK PURCHASE AGREEMENT


                                  By and Among


                              DIODES INCORPORATED,


                        LITE-ON POWER SEMICONDUCTOR CORP.

                                       and

                                  FABTECH, INC.



                                November 28, 2000



<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                           Page
                                                                                                           ----
<S>                                                                                                        <C>
ARTICLE I. PURCHASE AND SALE OF SHARES........................................................................7
    1.1   Purchase and Sale of Shares.........................................................................7
    1.2   Purchase Price......................................................................................7
    1.3   Payment of Purchase Price...........................................................................7
    1.4   Closing............................................................................................10
    1.5   Closing Deadline...................................................................................10
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF SELLER.........................................................10
    2.1   Due Formation......................................................................................10
    2.2   Shares.............................................................................................10
    2.3   Title to Shares....................................................................................11
    2.4   Certificate of Incorporation and Bylaws............................................................11
    2.5   Subsidiaries.......................................................................................11
    2.6   Authority..........................................................................................11
    2.7   No Violation of Law and Agreements.................................................................12
    2.8   Financial Statements...............................................................................12
    2.9   No Undisclosed Liabilities.........................................................................13
    2.10  Absence of Certain Changes.........................................................................13
    2.11  Tax Returns and Payments...........................................................................14
    2.12  Compliance with Laws...............................................................................16
    2.13  Contracts and Other Agreements.....................................................................16
    2.14  Real Estate........................................................................................18
    2.15  Environmental Matters..............................................................................20
    2.16  Intellectual Property and Computer Software........................................................23
    2.17  Title to Properties, Absence of Liens and Encumbrances.............................................25
    2.18  Permits............................................................................................25
    2.19  Labor and Employment Matters.......................................................................25
    2.20  Employee Benefits Plans............................................................................26
    2.21  Litigation.........................................................................................29
    2.22  Insurance..........................................................................................29
    2.23  Officers, Directors and Key Employees..............................................................29
    2.24  Conditions of Tangible Assets and Inventories......................................................30
    2.25  Bank Accounts......................................................................................30
    2.26  Powers of Attorney; Guarantees.....................................................................30
    2.27  Relations with Suppliers...........................................................................30
    2.28  Relations with Customers...........................................................................31
    2.29  Accounts Receivables...............................................................................31
    2.30  Transactions with Affiliates.......................................................................31
    2.31  Data Processing....................................................................................31
    2.32  Brokerage..........................................................................................32
</TABLE>


                                      -i-

<PAGE>   3

<TABLE>
<CAPTION>
                                                                                                           Page
                                                                                                           ----
<S>                                                                                                        <C>
    2.33  Accuracy of Representations........................................................................32
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF BUYER.........................................................32
    3.1   Organization and Standing..........................................................................32
    3.2   Authority..........................................................................................32
    3.3   No Violation of Law and Agreements.................................................................33
    3.4   Brokerage..........................................................................................33
ARTICLE IV. COVENANTS AND AGREEMENTS OF SELLER AND COMPANY...................................................33
    4.1   Conduct of Business................................................................................33
    4.2   Efforts to Close...................................................................................33
    4.3   Continued Effectiveness of Representations and Warranties of Seller................................34
    4.4   Corporate Examinations and Investigations..........................................................34
    4.5   Assignment of Leaseholds...........................................................................34
    4.6   Insurance..........................................................................................35
    4.7   Cooperation........................................................................................35
    4.8   WARN Act...........................................................................................35
    4.9   Expenses...........................................................................................35
    4.10  Further Assurances.................................................................................35
    4.11  Hart-Scott-Rodino..................................................................................35
    4.12  No Solicitation of Transactions....................................................................36
    4.13  Noncompetition.....................................................................................36
    4.14  Inventory and Accounts Receivable..................................................................37
    4.15  Indebtedness.......................................................................................37
ARTICLE V. COVENANTS AND AGREEMENTS OF BUYER.................................................................37
    5.1   Efforts to Close...................................................................................37
    5.2   Expenses...........................................................................................37
    5.3   Further Assurances.................................................................................38
    5.4   Hart-Scott-Rodino..................................................................................38
ARTICLE VI. CONDITIONS TO THE OBLIGATIONS OF SELLER..........................................................38
    6.1   Representations and Warranties.....................................................................38
    6.2   Compliance with Covenants..........................................................................38
    6.3   Corporate Action...................................................................................38
    6.4   Litigation.........................................................................................39
    6.5   Absence of Adverse Governmental Action.............................................................39
    6.6   Filings; Consents; Waiting Periods.................................................................39
    6.7   Approval of Documentation..........................................................................39
    6.8   Payment of Indebtedness............................................................................39
ARTICLE VII. CONDITIONS TO THE OBLIGATIONS OF BUYER..........................................................39
    7.1   Representations and Warranties.....................................................................39
    7.2   Compliance with Covenants..........................................................................39
    7.3   Corporate Action...................................................................................40
    7.4   Litigation.........................................................................................40
    7.5   Absence of Adverse Governmental Action.............................................................40
</TABLE>


                                      -ii-
<PAGE>   4

<TABLE>
<CAPTION>
                                                                                                           Page
                                                                                                           ----
<S>                                                                                                        <C>
    7.6   Filings; Consents; Waiting Periods.................................................................40
    7.7   Approval of Documentation..........................................................................40
    7.8   Financing..........................................................................................40
    7.9   No Material Adverse Changes........................................................................40
    7.10  Resignations.......................................................................................40
    7.11  Estoppel Certificates..............................................................................41
    7.12  Management Incentive Agreements....................................................................41
    7.13  Lease Assignment...................................................................................41
    7.14  Fairness Opinion...................................................................................41
ARTICLE VIII. INDEMNIFICATION................................................................................41
    8.1   Survival...........................................................................................41
    8.2   Seller's Obligation to Indemnify...................................................................41
    8.3   Buyer's Obligation to Indemnify....................................................................41
    8.4   Notice of Asserted Liability.......................................................................41
    8.5   Opportunity to Defend..............................................................................42
    8.6   Tax Adjustment.....................................................................................42
    8.7   Waiver of Subrogation and Other Rights.............................................................43
    8.8   No Contribution....................................................................................43
    8.9   Non-Exclusive Remedy...............................................................................43
ARTICLE IX. TAX MATTERS......................................................................................43
    9.1   Tax Returns........................................................................................43
    9.2   Tax Sharing Agreements.............................................................................43
    9.3   Clearance Certificates.............................................................................43
    9.4   Transfer Taxes.....................................................................................44
    9.5   Seller's Tax Indemnity.............................................................................44
ARTICLE X. TERMINATION OF AGREEMENT..........................................................................44
    10.1  Termination........................................................................................44
    10.2  Survival...........................................................................................45
    10.3  Return of Materials................................................................................46
ARTICLE XI. MISCELLANEOUS....................................................................................46
    11.1  Notices............................................................................................46
    11.2  Entire Agreement...................................................................................47
    11.3  Waivers and Amendments.............................................................................47
    11.4  Governing Law......................................................................................48
    11.5  Arbitration........................................................................................48
    11.6  Reference to U.S. Dollars..........................................................................48
    11.7  Binding Effect; Assignment.........................................................................49
    11.8  No Third Party Beneficiaries.......................................................................49
    11.9  Counterparts.......................................................................................49
    11.10 Schedules and Exhibits.............................................................................49
    11.11 Headings, Gender and Person........................................................................49
    11.12 Publicity..........................................................................................49
    11.13 Severability.......................................................................................49
</TABLE>


                                     -iii-
<PAGE>   5

<TABLE>
<CAPTION>
                                                                                                     Page
                                                                                                     ----
<S>                                                                                                  <C>
    11.14 Time of Essence..............................................................................50
    11.15 Attorneys' Fees..............................................................................50
    11.16 Confidential Information.....................................................................50
    11.17 No Publicity; Employee Letters...............................................................50
    11.18 Mutual Drafting..............................................................................51
    11.19 Further Assurances...........................................................................51
    11.20 Covenant.....................................................................................51
ARTICLE XII. DEFINITIONS...............................................................................51
    12.1  Defined Terms................................................................................51
</TABLE>



                                      -iv-
<PAGE>   6

                                  EXHIBIT INDEX

EXHIBIT A  -  Subordinated Promissory Note

EXHIBIT B  -  Management Incentive Agreement

EXHIBIT C  -  Union Bank of California Credit Term Sheet



                                 SCHEDULE INDEX

SCHEDULE 2.7      -        Approvals

SCHEDULE 2.10     -        Absence of Certain Changes

SCHEDULE 2.11     -        Tax Returns and Payments

SCHEDULE 2.12     -        Compliance with Laws

SCHEDULE 2.13     -        Contracts and Other Agreements

SCHEDULE 2.14     -        Real Estate

SCHEDULE 2.15     -        Environmental Matters

SCHEDULE 2.16     -        Intangible Property and Computer Software

SCHEDULE 2.17     -        Title to Properties

SCHEDULE 2.18     -        Permits

SCHEDULE 2.20     -        Employee Benefit Plans

SCHEDULE 2.22     -        Insurance

SCHEDULE 2.23     -        Officers, Directors and Key Employees

SCHEDULE 2.25     -        Bank Accounts

SCHEDULE 2.26     -        Powers of Attorney and Guarantees

SCHEDULE 2.28     -        Relations with Customers

SCHEDULE 2.30     -        Transactions with Affiliates

SCHEDULE 3.3      -        Approvals


                                      -v-
<PAGE>   7

SCHEDULE 7.2      -        Management Incentive Employees




                                      -vi-

<PAGE>   8

                            STOCK PURCHASE AGREEMENT

              THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made and
effective as of November 28, 2000, by and among Diodes Incorporated, a Delaware
corporation ("Buyer"), Lite-On Power Semiconductor Corp., a Taiwan corporation
("Seller"), and (with respect only to Articles IV, VII, IX, X and XI) FabTech,
Inc., a Delaware corporation ("Company"). Buyer, Seller and Company are referred
to collectively as the "parties."

                                    RECITALS

              A. WHEREAS, Seller is the beneficial and record owner of all of
the issued and outstanding shares of the capital stock of Company, consisting of
4,000,000 shares of Series A Convertible Preferred Stock and 1,000 shares of
Common Stock (collectively, the "Shares").

              B. WHEREAS, Seller wishes to sell to Buyer, and Buyer wishes to
purchase from Seller, the Shares in accordance with the terms and conditions set
forth in this Agreement.

                                    AGREEMENT

              NOW, THEREFORE, in consideration of the mutual covenants and
promises set forth in this Agreement, and for other good and valuable
consideration the receipt of which is hereby acknowledged, and subject to the
terms and conditions stated herein, Buyer, Seller and Company hereby agree as
follows:

       1. PURCHASE AND SALE OF SHARES

              1.1 Purchase and Sale of Shares. Subject to the terms and
conditions hereinafter set forth, at the Closing, Seller shall sell to Buyer,
and Buyer shall purchase from Seller, the Shares.

              1.2 Purchase Price. As full payment for the Shares and for
Seller's agreements and indemnities contained herein, Buyer shall pay to Seller
up to Fifty-Five Million United States Dollars (U.S. $55,000,000) (the "Purchase
Price"). The Purchase Price shall be computed and paid as set forth in Section
1.3 below.

              1.3 Payment of Purchase Price.

                     (a) The Purchase Price shall consist of the following
       amounts:



                                      -7-
<PAGE>   9

                     (1) An amount (the "Initial Purchase Price") equal to the
       amount, if any, by which U.S. $25,000,000 exceeds the sum of the
       following:

                            (A) The outstanding principal balance of, and
              interest accrued on, Company's indebtedness to Seller, Buyer and
              Citibank as of the Closing Date; and

                            (B) Any Liabilities of Company or any Subsidiary on
              the Closing Date (including any amounts accrued on the Closing
              Date under the Management Incentive Agreements referred to in
              Section 7.12), except (x) Liabilities the amounts of which are
              disclosed or reserved against on the Recent Balance Sheet and (y)
              Liabilities incurred, in connection with Company's or any
              Subsidiary's continuing businesses, in the ordinary course of
              business and consistent with past practice since the date of the
              Recent Balance Sheet. In the event the sum of the amounts set
              forth in Section 1.3(a)(i)(A) and (B) equals or exceeds U.S.
              $25,000,000 then the Initial Purchase Price shall be zero and no
              amount shall be payable by Buyer to Seller under this Section 1.3
              (a)(i).

                     (2) For each of the fiscal years ending December 31, 2001,
       2002, 2003 and 2004, an amount (the "Earnout") determined as follows:

                     A
                E = --(B-40)
                    90

       where:   A  =   The number set forth in Column 1 of the following chart
                       for such fiscal year.

                       C
                B  =  -- X 100  rounded down to the nearest whole integer.
                       D

                C  =   The lesser of (i) Company's earnings before interest and
                       taxes ("EBIT") or (ii) 130% of the number set forth in
                       Column 2 of the following chart for such fiscal year.

                D  =   The number set forth in Column 2 of the following chart
                       for such fiscal year.

                E  =   Earnout for any such fiscal year.




                                      -8-
<PAGE>   10
<TABLE>
<CAPTION>
                    Fiscal
                     Year                  1                        2
                    ------                 -                        -
<S>                                <C>                      <C>
                     2001          U.S. $4,000,000          U.S. $7,326,000
                     2002                6,500,000               11,887,000
                     2003                9,000,000               15,622,000
                     2004               10,500,000               19,110,000
</TABLE>

                     (b) The Initial Purchase Price shall be payable in cash in
       U.S. dollars on the Closing Date by wire transfer of immediately
       available funds to such account as Seller shall specify in writing not
       less than three (3) business days before the Closing Date.

                     (c) The Earnout for the fiscal year ending on any of
       December 31, 2001, 2002, 2003 or 2004 shall be payable in cash in U.S.
       dollars on or before the next March 31 by wire transfer of immediately
       available funds to such account as Seller shall specify in writing not
       less than three (3) business days before such payment date.

                     (d) The Earnout shall be determined by Buyer's accounting
       staff in accordance with U.S. generally accepted accounting principles
       consistently applied to the operations of Buyer and Company. The EBIT of
       Company used in determining the Earnout shall not be less than the EBIT
       of Company reported by Buyer in its consolidated financial statements
       filed with the U.S. Securities and Exchange Commission. The Earnout for
       each fiscal year shall be computed based upon Company's actual EBIT for
       such year without any deduction (or credit) due to any shortfall (or
       overage) in any prior or subsequent year. A portion of the Earnout for
       each fiscal year shall be deemed to be imputed interest at a rate
       (commencing on the Closing Date and based on a 365 day year) equal to the
       lowest applicable federal rate for the three month period ending on the
       last day of the calendar month in which the Closing Date occurs. For the
       Earnout payable with respect to 2001, 2002 or 2003, the applicable
       short-term federal rate shall be used. For the Earnout payable with
       respect to any subsequent fiscal year, the applicable mid-term federal
       rate shall be used.

                     (e) Any amount payable with respect to any fiscal year
       under the Management Incentive Agreements described in Section 7.12 shall
       be deducted from the Earnout payable with respect to such year.

                     (f) In the event the Earnout payable with respect to any
       year is less than the amount payable with respect to such fiscal year
       pursuant to the Management Incentive Agreements referred to in Section
       7.12, Seller shall indemnify Buyer for the amount by which such incentive
       payment exceeds the Earnout for such fiscal year.



                                      -9-
<PAGE>   11

              1.4 Closing. The transfer of the Shares and the payment of the
Initial Purchase Price shall be effected on the Closing Date. At the Closing,
Seller shall deliver to Buyer certificates evidencing the Shares, together with
assignments separate from the certificates duly executed in blank and,
concurrently with such delivery, Buyer shall pay the Initial Purchase Price in
accordance with Section 1.3. In addition, at the Closing, all other actions
shall be taken, and all other documents shall be duly executed and delivered,
which are necessary to consummate all other transactions contemplated by this
Agreement, other than such actions and documents as are to be taken or delivered
at another date as specifically provided in this Agreement.

              1.5 Closing Deadline. The Closing shall occur five (5) business
days following the date upon which the waiting period provided for in the HSR
Act expires, and all other conditions hereunder have been satisfied, or such
earlier or later date as may be mutually agreed to in writing by Buyer and
Seller (such date being referred to herein as the "Closing Date" or the
"Closing"), but in no event later than March 31, 2001, unless both Buyer and
Seller consent in writing to an extension beyond such date. The Closing shall
take place at the offices of Sheppard, Mullin, Richter & Hampton LLP, 333 South
Hope Street, Forty-Eighth Floor, Los Angeles, California 90071. Buyer, Seller
and Company agree to use commercially reasonable efforts to satisfy the
conditions set forth in this Agreement, and to cause the Closing to occur within
the specified time period.


       2. REPRESENTATIONS AND WARRANTIES OF SELLER

              Seller hereby represents and warrants to Buyer that the statements
contained in this Article II are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Article II):

              2.1 Due Formation. Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
has the requisite power to own, lease and operate its assets, properties and
business and to carry on its business as now being conducted and is duly
qualified as a foreign corporation in good standing under the laws of each state
or jurisdiction in which either the ownership or use of the properties owned or
used by it, or the nature of the activities conducted by it, requires such
qualification.

              2.2 Shares. The Shares are validly issued, fully paid and
nonassessable. Except for 4,000,000 shares of Series A Convertible Preferred
Stock and 1,000 shares of Common Stock, as of the date of this Agreement, there
are no shares of the capital stock or other equity securities of Company
outstanding; there are



                                      -10-
<PAGE>   12

no outstanding options, warrants or rights to purchase or acquire any shares of
the capital stock or other equity securities of Company; and there are no
contracts, commitments, understandings, arrangements or restrictions by which
Company is bound to issue additional shares of its capital stock or other equity
securities or other securities, options, warrants or rights to purchase or
acquire any additional shares of its capital stock or other equity securities.

              2.3 Title to Shares. All of the Shares are held of record and
owned beneficially by Seller free and clear of all liens, encumbrances, security
interests, equities, options, claims, charges and restrictions (other than
restrictions of general applicability imposed by federal or state securities
laws), and, upon delivery of the Initial Purchase Price on the Closing Date as
herein provided, Buyer will acquire good and marketable title to the Shares,
free and clear of any lien, claim or other encumbrance.

              2.4 Certificate of Incorporation and Bylaws. Company has
heretofore delivered to Buyer true and complete copies of the Certificate of
Incorporation (certified by the Delaware Secretary of State) and the Bylaws
(certified by the Secretary of Company) as in effect on the date hereof. The
minute book of Company in the form heretofore delivered to Buyer accurately
reflects all actions taken by the Board of Directors or the stockholders of
Company on or before the date hereof.

              2.5 Subsidiaries. Each direct and indirect Subsidiary of Company
is duly organized, validly existing and in good standing under the laws of its
jurisdiction of formation and has the requisite power and authority to own,
lease and operate its assets and properties and to carry on its business as it
is now being conducted. The Subsidiaries are duly qualified as corporations in
good standing under the laws of each state or jurisdiction in which either the
ownership or use of the properties owned or used by it, or the nature of the
activities conducted by it, requires such qualification. All of the outstanding
equity securities of each Subsidiary are validly issued, fully paid,
nonassessable and free of preemptive rights and are owned directly or indirectly
by Company free and clear of any liens, encumbrances, security interests,
equities, options, claims, charges or restrictions of any nature whatsoever.
There are no subscriptions, options, warrants, rights, calls, contracts, voting
trusts, proxies or other commitments, understandings, restrictions or
arrangements relating to the issuance, sale, voting, transfer, ownership or
other rights with respect to any equity securities of any Subsidiary, including
any right of conversion or exchange under any outstanding security, instrument
or agreement.

              2.6 Authority. Seller and Company each has all requisite corporate
power and authority to execute and deliver this Agreement and each Transaction
Document and to perform its obligations hereunder and thereunder. This Agreement
has been, and each Transaction Document will be prior to the Closing, duly



                                      -11-
<PAGE>   13

authorized, executed and delivered by Seller or Company, and (assuming the due
authorization, execution and delivery by Buyer) this Agreement constitutes, and
each Transaction Document when so executed and delivered will constitute, the
legal, valid and binding obligations of Seller and Company enforceable against
Seller and Company in accordance with its terms except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws affecting the
enforcement of creditors' rights generally, and general principles of equity
(regardless of whether enforcement is considered in a proceeding at law or in
equity).

              2.7 No Violation of Law and Agreements. Except as set forth in
Schedule 2.7, the execution and delivery by Seller or Company of this Agreement
and each Transaction Document, and the performance by Seller or Company of its
obligations hereunder or thereunder, does not and will not:

                     (a) violate any provision of the Certificate of
       Incorporation or Bylaws of Seller or Company;

                     (b) to the best knowledge of Seller, violate any provision
       of Applicable Law relating to Seller or Company; violate any provision of
       any order, arbitration award, judgment or decree to which Seller or
       Company is subject; or require a registration, filing, application,
       notice, consent, approval, order, qualification or waiver with, to or
       from any Governmental Authority; or

                     (c) require a consent, approval or waiver from, or notice
       to, any party to any contract to which Seller, Company or any Affiliate
       thereof is a party; or result in a breach of or cause a default under any
       provision of a contract to which Seller, Company or any Affiliate thereof
       is a party.

              2.8 Financial Statements. Company has previously delivered to
Buyer true and complete copies of the consolidated financial statements of
Company (the "Company Financial Statements") consisting of (i) the audited
balance sheet of Company at December 31, 1995, 1996, 1997, 1998 and 1999 and
June 30, 2000 and the unaudited balance sheet at October 31, 2000 (the "Recent
Balance Sheet") and (ii) the audited statements of income for the fiscal years
ended December 31, 1995, 1996, 1997, 1998 and 1999 and the six months ended June
30, 2000 and the unaudited statement of income for the four months ended October
31, 2000 (including the notes and schedules contained therein or annexed
thereto). All Company Financial Statements (including all notes and schedules
contained therein or annexed thereto) have been prepared in accordance with GAAP
consistently applied and with the books and records of Company, and fairly
present the assets, liabilities and financial position, the results of
operations and cash flows of Company on a consolidated basis as of the dates and
for the years and periods indicated.



                                      -12-
<PAGE>   14

              2.9 No Undisclosed Liabilities. Neither Company nor any Subsidiary
has any Liabilities, except (i) Liabilities the amounts of which are disclosed
or reserved against on the Recent Balance Sheet and (ii) Liabilities incurred,
in connection with Company's continuing businesses, in the ordinary course of
business and consistent with past practice since the date of the Recent Balance
Sheet.

              2.10 Absence of Certain Changes.

                     (a) Except as set forth in Schedule 2.10, since the date of
       the Recent Balance Sheet, neither Company nor any Subsidiary has:

                            (1) entered into any transaction, contract or
              commitment or incurred any obligation or liability (fixed or
              contingent) which is not a business transaction, contract,
              commitment or obligation entered into or incurred in the ordinary
              course of business and which at the date hereof is expected to
              have a materially adverse effect on the business, financial
              condition or prospects of Company or such Subsidiary;

                            (2) waived or released any rights of material value,
              other than in the ordinary course of business;

                            (3) accelerated receivables, delayed payables or
              liquidated inventory, except in accordance with prior practices;

                            (4) transferred or granted any rights under any
              concessions, leases, licenses, agreements, patents, inventions,
              trade names, trademarks, service marks, brand marks, brand names
              or copyrights, or registrations or licenses thereof or
              applications therefor, or with respect to any know-how or other
              proprietary or trade rights;

                            (5) made or granted any wage or salary increase
              (except for increases made in accordance with established
              compensation policies of Company or such Subsidiary applied on a
              basis consistent with previous practice), entered into any
              employment contract with any officer or employee or made any loan
              (excluding advances for normal reimbursable business expenses) to,
              or entered into any transaction of any other nature with, any
              officer or director of Company or any Subsidiary (other than the
              Management Incentive Agreements referred to in Section 7.12);

                            (6) suffered any material adverse change in the
              financial condition or results of operations of Company and the
              Subsidiaries, or in their assets, properties, business, operations
              or prospects, considered as a whole;



                                      -13-
<PAGE>   15

                            (7) issued, sold or otherwise disposed of any
              securities of Company or of the Subsidiaries or, except in the
              ordinary course of business, any evidence of indebtedness of
              Company or of the Subsidiaries;

                            (8) made any changes in accounting methods or
              practices;

                            (9) committed to make any capital expenditures; or

                            (10) entered into any agreement to do any of the
              things described in this section.

                     (b) Since the date of the Recent Balance Sheet, each of
       Company and the Subsidiaries has operated its business in the ordinary
       course consistent with its past practice so as to preserve such business
       intact, to keep available to it the services of its employees, and to
       preserve its business and the goodwill of its suppliers, customers,
       distributors and others having business relations with it.

              2.11 Tax Returns and Payments.

                     (a) Company has filed its United States federal Income Tax
       Returns and its Missouri corporate Income Tax Returns on a separate
       basis. Except for the corporations and entities identified on Schedule
       2.11, no other corporation or entity other than Company was or is
       includible in such Tax Returns. Company is not a party to any Tax
       allocation or sharing agreement, other than any such agreement of which a
       complete, true and accurate copy is included in Schedule 2.11. Each
       United States federal Income Tax and other federal, foreign, state,
       county and local Tax Return which is required to have been filed with
       respect to the operations, income or assets of Company or any member of
       Seller has been filed by or on behalf of Company or such member and is
       complete and correct, and all Taxes which have become due pursuant or
       with respect thereto or as reflected thereon, have been paid. Seller,
       Company and each member of Seller have disclosed on their Income Tax
       Returns all positions taken therein that could give rise to a substantial
       understatement of Income Tax within the meaning of IRC Section 6662 or
       R&TC Section 25935. Except as set forth on Schedule 2.11, Company is not
       subject to Tax in any state, local or foreign jurisdiction other than
       Missouri and Delaware; and Schedule 2.11, lists all federal, state, local
       and foreign income Tax Returns filed by or on behalf of Company for
       taxable periods ended after December 31, 1995, indicates those Tax
       Returns that have been examined or audited and indicates those Tax
       Returns that currently are the subject of examination or audit. Company
       has delivered to Buyer correct and complete copies of all federal and
       Missouri Income Tax Returns filed for each taxable period ended



                                      -14-
<PAGE>   16

       since December 31, 1995 (and, if applicable, for any prior taxable period
       which remains the subject of examination, audit, assessment or dispute or
       for which the statute of limitations for assessment has been extended and
       remains open), and all examination reports received and statements of
       deficiencies assessed against or agreed to by Company at any time.

                     (b) Except as set forth on Schedule 2.11:

                            (1) No extension or waiver of any statute of
              limitations has been requested of or granted by Company with
              respect to any Tax for any period, and no extension or waiver of
              time within which to file any Tax Return has been requested by or
              granted to Company or any member of Seller.

                            (2) No deficiency, delinquency or default for any
              Taxes relating to Company or Seller or its receipts, income,
              sales, transactions or other business activities has been claimed,
              proposed or assessed against Company or any member of Seller nor
              has Company or any member of Seller received notice of any such
              deficiency, delinquency, or default; and there is no audit,
              examination, investigation, claim, assessment, action, suit,
              proceeding, lien or encumbrance in effect, pending or proposed by
              any tax authority with respect to any such Taxes or with respect
              to any Tax Return of Company or Seller. No claim has been made by
              an authority in any state, local or foreign jurisdiction other
              than Missouri that Company is subject to taxation by that
              jurisdiction.

                            (3) Company has withheld and paid all Taxes required
              to have been withheld and paid in connection with amounts paid or
              owing to any employee, independent contractor, creditor,
              stockholder or third party.

                            (4) There is no tax ruling, request for ruling, or
              settlement, compromise, closing or Tax collection agreement in
              effect or pending which does or could affect the liability of
              Company for Taxes for any period after the Closing Date.

                            (5) Company has not been a member of an Affiliated
              Group filing a consolidated federal Income Tax Return, or incurred
              any liability for the Taxes of any person under Treasury
              Regulation Section 1.1502-6; under any provision of state, local
              or foreign law similar to Treasury Regulation Section 1.1502-6; as
              a transferee or successor; by contract; or otherwise.



                                      -15-
<PAGE>   17

                            (6) Company is not obligated to make any payments,
              or is a party to any agreement that under any circumstances could
              obligate Company to make any payments, that are or would not be
              deductible under IRC Section 162(m) or IRC Section 280G (other
              than as set forth in the Management Incentive Agreements referred
              to in Section 7.12).

                            (7) None of the assets of Company consists of any
              stock in a corporation (unless such stock represents either (A)
              one hundred percent (100%) of the stock of such corporation or (B)
              such stock is publicly traded and is less than one percent (1%) of
              both the total voting power and total fair market value of all
              outstanding stock of such corporation, determined after
              application of the attribution rules of IRC Section 318),
              indebtedness of another person or if there is market discount (as
              defined in IRC Section 1278(a)(2)) with respect to such
              indebtedness of more than $0, any interest as a partner in a
              partnership (as defined in IRC Section 7701(a)(2)), any interest
              in a trust, whether as grantor, beneficiary or otherwise, foreign
              currency, or any option or obligation to acquire or dispose of any
              of the foregoing.

                            (8) None of the assets of Company consists of or
              secures any indebtedness the interest on which is exempt from
              Income Tax; is "tax-exempt use property" within the meaning of IRC
              Section 168(h); or will as of the Closing Date be subject to any
              "safe harbor lease" within the meaning of former Section 168(f)(8)
              of the Internal Revenue Code of 1954.

              2.12 Compliance with Laws. Except as set forth in Schedule 2.12,
to the best knowledge of Seller and Company, each of Seller, Company and the
Subsidiaries has not violated and is in compliance with all laws, statutes,
ordinances, regulations, rules and orders of any foreign, federal, state or
local government and any other governmental department or agency, and any
judgment, decision, decree or order of any court or governmental agency,
department or authority. Neither Seller nor Company nor any Subsidiary has
received any notice to the effect that, or otherwise been advised that, it is
not in compliance with any such statutes, regulations, rules, judgments,
decrees, orders, ordinances or other laws, and neither Seller nor Company nor
any Subsidiary is aware of any existing circumstances which are likely to result
in violations of any of the foregoing.

              2.13 Contracts and Other Agreements.

                     (a) Schedule 2.13 sets forth as of the date of this
       Agreement all of the contracts and other agreements hereinafter referred
       to in this Section 2.13,



                                      -16-
<PAGE>   18

       to which Company or any Subsidiary is a party or by or to which it or its
       assets or properties are bound or subject (collectively, the
       "Contracts"):

                            (1) written contracts and other agreements with any
              current or former officer, director, employee, consultant, agent
              or other representative having more than six (6) months to run
              from the date hereof or providing for an obligation to pay or
              accrue compensation of $25,000 or more per annum, or providing for
              the payment of fees or other consideration in excess of $25,000;

                            (2) contracts and other agreements with any labor
              union or association representing any employee;

                            (3) contracts and other agreements for the purchase
              or sale of inventory, equipment or services that contain an
              escalation, renegotiation or redetermination clause or that cannot
              be canceled without liability, premium or penalty on thirty (30)
              or fewer days notice;

                            (4) contracts and other agreements for the sale of
              any of the assets or properties of Company or any Subsidiary other
              than in the ordinary course of business and for a sale price
              exceeding $50,000 in any one case (or in the aggregate, in the
              case of any series of related contracts or other agreements) or
              for the grant to any person of any preferential rights to purchase
              any of its assets or properties;

                            (5) contracts and other agreements (including,
              without limitation, leases of real property) calling for an
              aggregate purchase price or payments in any one year of more than
              $50,000 in any one case (or in the aggregate, in the case of any
              series of related contracts or other agreements);

                            (6) joint venture agreements;

                            (7) contracts or other agreements under which
              Company or a Subsidiary or a third party agrees to indemnify any
              party other than in the ordinary course of business;

                            (8) contracts and other agreements containing
              covenants of Company or any Subsidiary not to compete in any line
              of business or with any person in any geographical area or
              covenants of any other person not to compete with Company or any
              Subsidiary in any line of business or in any geographical area;



                                      -17-
<PAGE>   19

                            (9) contracts and other agreements relating to the
              making of any loan by Company or any Subsidiary;

                            (10) contracts or other agreements relating to the
              borrowing of money by Company or any Subsidiary or the direct or
              indirect guaranty by Company or any Subsidiary of any obligation
              for, or an agreement by Company or any Subsidiary to service, the
              repayment of borrowed money, or any other contingent obligations
              in respect of indebtedness of any other person or governmental or
              regulatory body;

                            (11) contracts or other agreements for or relating
              to computers, computer equipment, computer software or computer
              services in excess of $25,000; and

                            (12) contracts or other agreements between Company
              or any Subsidiary and any federal, state or local government,
              agency or authority.

                     (b) There have been delivered or made available to Buyer
       true and complete copies of all of the contracts and other agreements set
       forth in Schedule 2.13 or on any other Schedule. Neither Company nor any
       Subsidiary has been found to be in default under any such contract or
       agreement, nor will the consummation of the transactions contemplated by
       this Agreement result in a default under any such contract or agreement
       or the right to terminate such contract or agreement.

              2.14 Real Estate.

                     (a) Schedule 2.14 contains a complete and accurate list of
       the following:

                            (1) all real property and interests in real property
              and the buildings, structures and improvements thereon (the "Owned
              Property") owned by Company or a Subsidiary, or which Company or a
              Subsidiary is contractually obligated to purchase;

                            (2) all leases (the "Leases") of real property and
              interests in real property and the buildings, structures and
              improvements thereon (the "Leased Property") pursuant to which
              Company or a Subsidiary is the lessee;

                            (3) all contracts or options (and all amendments,
              extensions and modifications thereto) held by Company or a
              Subsidiary, or contractual obligations (and all amendments,
              extensions and



                                      -18-
<PAGE>   20

              modifications thereto) on the part of Company or a Subsidiary to
              purchase or acquire any interest in real property;

                            (4) all contracts or options (and all amendments,
              extensions and modifications thereto) granted by Company or a
              Subsidiary, or contractual obligations (and all amendments,
              extensions and modifications thereto) on the part of Company or a
              Subsidiary to sell or dispose of any interest in real property;
              and

                            (5) all policies of title insurance issued to
              Company or a Subsidiary with respect to the Facilities.

                     (b) The Facilities are sufficient for the conduct of the
       business of Company and the Subsidiaries as such business is now
       conducted. Except as set forth in Schedule 2.14, Company or a Subsidiary
       has the right under valid and existing leases or other agreements to
       occupy and use all Leased Property which it uses in the conduct of their
       business. Neither the whole nor any portion of the Facilities has been
       condemned, requisitioned or otherwise taken by any Governmental
       Authority, and neither Company nor a Subsidiary has received any notice
       that any such condemnation, requisition or taking is threatened, which
       condemnation, requisition or taking would preclude or materially impair
       the current use thereof. All buildings, structures and appurtenances
       comprising part of the Facilities which are currently being used in the
       conduct of the business of Company or any Subsidiary are in satisfactory
       condition and have been reasonably maintained, normal wear and tear
       excepted. All Facilities have received all required approvals of
       Governmental Authorities (including, without limitation, permits and a
       certificate of occupancy or other similar certificate permitting lawful
       occupancy of the Facilities) required in connection with the operation
       thereof and have been operated and maintained in accordance with
       applicable laws, rules and regulations. All Facilities are supplied with
       utilities (including, without limitation, water, sewage, disposal,
       electricity, gas and telephone) and other services necessary for the
       operation of such Facilities as currently operated. The improvements
       constructed on the Facilities, including, without limitation, all
       Leasehold Improvements, and all fixtures and equipment and other tangible
       assets owned, leased or used by Company or a Subsidiary at the Facilities
       are (i) insured to the extent and in a manner customary in the industry,
       (ii) structurally sound with no known defects, (iii) in good operating
       condition and repair, subject to ordinary wear and tear, (iv) not in need
       of maintenance or repair except for ordinary routine maintenance and
       repair, the cost of which would not be material, (v) sufficient for the
       operation of Company's and the Subsidiaries' businesses as presently
       conducted and (vi) in conformity with all applicable laws, ordinances,
       orders, regulations and other requirements relating thereto currently in
       effect.



                                      -19-
<PAGE>   21

                     (c) Company has good and marketable title to the Owned
       Property, subject to no mortgage, pledge, lien, security interest,
       conditional sale agreement, encumbrance or charge, and there are no
       encroachments by Company or a Subsidiary on abutting property and no
       encroachments by others on their properties, except: as reflected in the
       Recent Balance Sheet; tax, materialmen's or like liens for obligations
       not yet due or payable or being contested in good faith by appropriate
       proceedings described in Schedule 2.14; such imperfections of title and
       encumbrances which do not detract materially from the value thereof for
       the conduct of the business conducted there, or materially interfere with
       the use thereof for the conduct of the business conducted there; zoning
       ordinances, recorded building use and other restrictions and easements of
       record which do not materially interfere with the use thereof for the
       conduct of the business conducted there; and mortgages, deeds of trust or
       other claims and encumbrances, as set forth in Schedule 2.14. Except as
       set forth in Schedule 2.14, neither Company nor a Subsidiary nor Seller
       has received any written notice that Company or a Subsidiary is in
       violation of any zoning, use, occupancy, building, wetlands or
       environmental regulation, ordinance or other law, order, regulation or
       requirement relating to the Facilities, including, without limitation,
       the Americans With Disabilities Act and Environmental Laws.

                     (d) Except as set forth in Schedule 2.14, each Lease is in
       full force and effect, neither Company nor a Subsidiary is in default of
       its obligations under any Lease, and no Lease is subject to or encumbered
       by any lien or other restriction which impairs the use of the property to
       which it relates in the business of Company or a Subsidiary as now
       conducted.

              2.15 Environmental Matters. Except as set forth on Schedule 2.15:

                     (a) For purposes of this Section, the term "Company" shall
       include (i) all Affiliates of Company, (ii) all partnerships, joint
       ventures and other entities or organizations in which Company or a
       Subsidiary was at any time or is a partner, joint venturer, member or
       participant and (iii) all predecessor or former corporations,
       partnerships, joint ventures, organizations, businesses or other
       entities, whether in existence as of the date hereof or at any time prior
       to the date hereof, the assets or obligations of which have been acquired
       or assumed by Company or a Subsidiary or to which Company or a Subsidiary
       has succeeded; provided, however, that in no event shall Vishay
       Intertechnology, Inc. be deemed to be an Affiliate of Company for the
       purposes of this Section 2.15.

                     (b) The Facilities have been maintained in compliance with
       all applicable federal, state, local or foreign laws, statutes,
       ordinances, regulations,



                                      -20-
<PAGE>   22

       rules, judgments, orders, notice requirements, court decisions, agency
       guidelines or principles of law, restrictions and licenses, which (i)
       regulate or relate to the protection or clean-up of the environment; the
       use, treatment, storage, transportation, handling, disposal or Release of
       Hazardous Substances; the preservation or protection of waterways,
       groundwater, drinking water, air, wildlife, plants or other natural
       resources; or the health and safety of persons or property, including,
       without limitation, protection of the health and safety of employees; or
       (ii) impose liability with respect to any of the foregoing, including,
       without limitation, the Federal Water Pollution Control Act (33 U.S.C.
       Section 1251 et seq.), Resource Conservation & Recovery Act (42 U.S.C.
       Section 6901 et seq.) ("RCRA"), Safe Drinking Water Act (21 U.S.C.
       Section 349, 42 U.S.C. Section 201, 300f), Toxic Substances Control Act
       (15 U.S.C. Section 2601 et seq.), Clean Air Act (42 U.S.C. Section 7401
       et seq.), Comprehensive Environmental Response, Compensation and
       Liability Act (42 U.S.C. Section 9601 et seq.) ("CERCLA"), and Missouri
       Revised Statutes Sections 260.350 et seq., 643.010 et seq. and 644.006 et
       seq., or any other similar federal, state or local law of similar effect,
       each as amended. (All of the above, collectively, are referred to herein
       as the "Environmental Laws").

                     (c) The Facilities are, and at all times have been, and all
       Former Facilities were at all times when owned, leased or operated by
       Company or a Subsidiary, owned, leased and operated in compliance with
       all Environmental Laws and in a manner that will not give rise to any
       liability under any Environmental Laws.

                     (d) Company has, and at all times has had, all Permits
       required under any Environmental Law and each Facility is, and at all
       times has been, in compliance with all such Permits.

                     (e) The consummation of any of the transactions
       contemplated by this Agreement will not require an application for
       issuance, renewal, transfer or extension of, or any other administrative
       action regarding, any Permit required under any Environmental Law.

                     (f) Neither Company nor a Subsidiary nor Seller has
       received any notice at any time that it is or was claimed to be in
       violation of or in non-compliance with the conditions of any Permit
       required under any Environmental Law or the provisions of any
       Environmental Law.

                     (g) There is not now pending or threatened, nor any basis
       for, nor has there ever been, any Action against Company or a Subsidiary
       under any



                                      -21-
<PAGE>   23

       Environmental Law or otherwise with respect to any Release or mishandling
       of any Hazardous Substance.

                     (h) There are no consent decrees, judgments, judicial or
       administrative orders or agreements with, or liens by, any governmental
       authority or quasi-governmental entity relating to any Environmental Law
       which regulate, obligate, bind or in any way affect Company or a
       Subsidiary or any Facility or Former Facility.

                     (i) There is not and has not been any Hazardous Substance
       used, generated, treated, stored, transported, disposed of, handled or
       otherwise existing on, under, about or from any Facility or any Former
       Facility, except for quantities of any such Hazardous Substances stored
       or otherwise held on, under or about any such Facility in full compliance
       with all Environmental Laws and necessary for the operation of the
       business conducted there.

                     (j) Company has at all times used, generated, treated,
       stored, transported, disposed of or otherwise handled its Hazardous
       Substances in compliance with all Environmental Laws and in a manner that
       will not result in liability of Company or a Subsidiary under any
       Environmental Law.

                     (k) There are no present or past Environmental Conditions
       in any way relating to Company or a Subsidiary, or the Facilities.
       "Environmental Conditions" means the introduction into the environment of
       any pollution, including, without limitation, any contaminant, irritant
       or pollutant or other Hazardous Substance (whether or not upon the
       Facilities or other property of Company or a Subsidiary and whether or
       not such pollution constituted at the time thereof a violation of any
       Environmental Law as a result of any Release of any kind whatsoever of
       any Hazardous Substance) as a result of which Seller, Company or a
       Subsidiary has or may become liable to any person or by reason of which
       the Facilities may suffer or be subjected to any lien.

                     (l) No current or past use, generation, treatment,
       transportation, storage, disposal or handling practice of Company or a
       Subsidiary with respect to any Hazardous Substance has or will result in
       any liability under the CERCLA or RCRA or any state or local law of
       similar effect.

                     (m) There is not now and has not been at any time in the
       past any underground or above-ground storage tank or pipeline at any
       Facility or Former Facility where the installation, use, maintenance,
       repair, testing, closure or removal of such tank or pipeline was not in
       compliance with all Environmental Laws, and there has been no Release
       from or rupture of any such tank or pipeline, including, without
       limitation, any Release from or in connection with the filling or
       emptying of such tank.



                                      -22-
<PAGE>   24

                     (n) True, complete and correct copies of the written
       reports, and all parts thereof, including any drafts of such reports if
       such drafts are in the possession or control of Company or a Subsidiary
       or Seller, of all environmental audits or assessments which have been
       conducted at any Facility or Former Facility within the past five years,
       either by Seller, Company or a Subsidiary or any attorney, environmental
       consultant or engineer engaged for such purpose, have been delivered to
       Buyer and a list of all such reports, audits and assessments and any
       other similar report, audit or assessment of which Company or a
       Subsidiary or Seller has knowledge is included on Schedule 2.15.

                     (o) Company does not manufacture or distribute any product
       in the State of Missouri which requires any warning mandated by Missouri
       Law.

                     (p) Company is not a party, whether as a direct signatory
       or as successor, assign or third party beneficiary, or otherwise bound,
       to any Lease or other Contract (excluding insurance policies disclosed on
       Schedule 2.22) under which Company or a Subsidiary is obligated by or
       entitled to the benefits of, directly or indirectly, any representation,
       warranty, indemnification, covenant, restriction or other undertaking
       concerning environmental conditions.

                     (q) Company has not released any other person from any
       claim under any Environmental Law or waived any rights concerning any
       Environmental Condition.

                     (r) Company has given all notices and warnings, made all
       reports, and has kept and maintained all records required by and in
       compliance with all Environmental Laws.

              2.16 Intellectual Property and Computer Software.

                     (a) Each of Company and each Subsidiary of Company has all
       requisite right, title and interest in or valid and enforceable rights
       under contracts or licenses to use all Company Intellectual Property
       necessary to the conduct of its respective business as presently
       conducted. To the extent any Intellectual Property is the subject of a
       licensing agreement, such licensing agreement and the parties thereto are
       described in Schedule 2.16. Except as described in Schedule 2.16, neither
       Company nor any Subsidiary of Company has received notice that it is
       infringing upon or otherwise misappropriating any rights relating to the
       Intellectual Property of any third party or any application pending for
       the Intellectual Property of any third party, and neither Company nor any
       of its Subsidiaries has knowledge of any basis for any such claim of
       infringement or misappropriation.



                                      -23-
<PAGE>   25

                     (b) Each item of Company Intellectual Property is owned
       exclusively by the Company or its Subsidiaries (excluding Intellectual
       Property licensed to Company or such Subsidiaries) and is free and clear
       of any Liens. Company (i) owns exclusively all trademarks, service marks
       and trade names used by Company in connection with the operation or
       conduct of the business of Company, including the sale of any products or
       technology or the provision of any services by Company and (ii) owns
       exclusively, and has good title to, all copyrighted works that are
       Company products or other works of authorship that Company otherwise
       purports to own; provided, however, that such works may incorporate
       copyrighted works or works of authorship, trademarks or trade names of
       third parties which are licensed to Company or are in the public domain.
       Each Subsidiary of Company (i) owns exclusively all trademarks, service
       marks and trade names used by such Subsidiary in connection with the
       operation or conduct of the business of such Subsidiary, including the
       sale of any products or technology or the provision of any services by
       such Subsidiary and (ii) owns exclusively, and has good title to, all
       copyrighted works that are such Subsidiary's products or other works of
       authorship that the Subsidiary otherwise purports to own; provided,
       however, that such works may incorporate copyrighted works or works of
       authorship, trademarks or trade names of third parties which are licensed
       to the Subsidiary or are in the public domain.

                     (c) To the extent that any Company Intellectual Property
       has been developed or created by any party other than Company or a
       Subsidiary, Company has a written agreement with such party with respect
       thereto and Company or Subsidiary has either (i) obtained ownership of,
       and is the exclusive owner of, all such Intellectual Property by
       operation of law or by valid assignment of any such rights or (ii) has
       obtained a license under or to such Intellectual Property.

                     (d) Company Intellectual Property constitutes all the
       Intellectual Property used in and/or necessary to the conduct of
       Company's and its Subsidiaries' business as it currently is conducted or
       as reasonably contemplated to be conducted, including, without
       limitation, the design, development, distribution, marketing,
       manufacture, use, import, license, and sale of the products, technology
       and services of Company (including products, technology or services
       currently under development).

                     (e) To the knowledge of Seller and Company, no party is
       infringing or misappropriating any Company Intellectual Property.

                     (f) No Company Intellectual Property or product, technology
       or service of Company or its Subsidiaries is subject to any Action that
       restricts, or that is reasonably expected to restrict in any manner, the
       use, transfer or



                                      -24-
<PAGE>   26

       licensing of any Company Intellectual Property by Company or its
       Subsidiaries or that may affect the validity, use or enforceability of
       such Company Intellectual Property.

                     (g) Company has taken all necessary and appropriate steps
       to protect and preserve ownership of Company Intellectual Property.
       Company has secured valid written assignments from all consultants and
       employees who contributed to the creation or development of Company
       Intellectual Property. In the event that the consultant is concurrently
       employed by Company and a third party, Company has taken additional steps
       to ensure that any Company Intellectual Property developed by such a
       consultant does not belong to the third party or conflict with the third
       party's employment agreement. Such steps include, but are not limited to,
       ensuring that all research and development work performed by such a
       consultant are performed only on Company's facilities and only using
       Company's resources.

              2.17 Title to Properties, Absence of Liens and Encumbrances.
Company and each Subsidiary has good and marketable title to all of its
properties and assets whether real, personal, tangible or intangible, including
all properties reflected in the Recent Balance Sheet and those acquired since
the date thereof (except as since sold or otherwise disposed of in the ordinary
course of business), free and clear of all mortgages, liens, pledges, easements,
covenants, conditions, restrictions, claims and encumbrances, other than (i) as
referred to in the Recent Balance Sheet, (ii) any liens for taxes not yet
delinquent or being contested in good faith by appropriate proceedings, and
(iii) the matters set forth in the Schedule 2.17. None of the assets necessary
to operate the business conducted by Company or any Subsidiary are owned by
Seller or an Affiliate of Seller (other than Company and the Subsidiaries).

              2.18 Permits. Schedule 2.18 sets forth all governmental Permits
held by Company or any Subsidiary and necessary to the operation of their
respective business. Except for Permits for which applications are shown in
Schedule 2.18 to be pending, all such Permits are currently in force. No written
notice of any violation has been received in respect of any such Permit, and no
proceeding is pending that would suspend or revoke or limit any such Permit.

              2.19 Labor and Employment Matters.

                     (a) Each of Company and the Subsidiaries has: (i) withheld
       and paid to the appropriate Governmental Authorities, or are withholding
       for payment not yet due to such authorities, all amounts required to be
       withheld from its employees; (ii) is not liable for any arrears of wages,
       Taxes, penalties or other sums for failure to comply with any of the
       foregoing; and (iii) to the best knowledge of Seller and Company, has
       complied in all respects with all



                                      -25-
<PAGE>   27

       Applicable Laws, rules and regulations relating to the employment of
       labor, including, without limitation, Title VII of the Federal Civil
       Rights Act of 1964, as amended, the Federal Occupational Safety and
       Health Act, and those relating to hours, wages, collective bargaining and
       the payment and withholding of Taxes and other sums as required by
       appropriate authorities.

                            (i) Neither Seller nor Company nor any Subsidiaries
              are a party to any collective bargaining agreement or other labor
              contract applicable to the employees of Company; (ii) there has
              been no breach or other failure to comply with any material
              provision of such agreement or contract; and (iii) neither
              Company, nor any Subsidiary, is subject: (1) to any unfair labor
              practice complaint pending before the National Labor Relations
              Board or any other federal, state, local or foreign agency, (2)
              pending or threatened labor strike, slowdown, work stoppage,
              lockout, or other organized labor disturbance, or threat thereof,
              (3) pending grievance proceeding, representation question or
              arbitration proceeding arising out of or under any collective
              bargaining agreement, or (4) attempt by any union to represent
              employees of Company or a Subsidiary as a collective bargaining
              agent.

              2.20 Employee Benefits Plans.

                     (a) Schedule 2.20 sets forth a true and complete list of
       all Benefit Plans and identifies as such each Benefit Plan that is an
       "employee welfare plan," as defined in ERISA Section 3(1) (a "Welfare
       Plan"), or an "employee pension benefit plan," as defined in ERISA
       Section 3(2) (a "Pension Plan"), that Company, and any trade or business
       which is under control, or which is treated as a single employer, with
       Company under Section 414(b), (c), (m) or (o) maintains, participates in,
       or contributes to, or has ever maintained, participated in, or
       contributed to; provided, however, that the term "Pension Plan" shall not
       include any Benefit Plan that is a "multiemployer plan" within the
       meaning of ERISA Section 3(37) (a "Multiemployer Plan"). Each Benefit
       Plan that is not a Welfare Plan, Pension Plan or Multiemployer Plan is
       referred to below as a "Benefit Arrangement."

                     (b) Seller or Company has delivered to Buyer true and
       complete copies of: (i) all plan texts, agreements and material employee
       communications relating to each Benefit Plan; (ii) all summary plan
       descriptions (whether or not required to be furnished pursuant to ERISA),
       the three (3) most recent annual reports (including all schedules
       thereto) and the three (3) most recent annual and periodic accounting and
       financial statements of related plan assets with respect to each Pension
       Plan and Welfare Plan; (iii) the most recent determination letter
       received from the Internal Revenue Service with respect to



                                      -26-
<PAGE>   28

       each Pension Plan; and (iv) the most recent actuarial report with respect
       to each Pension Plan subject to Title IV of ERISA.

                     (c) No event has occurred (and there exists no condition or
       set of circumstances) in connection with any Benefit Plan that could
       subject Company, Buyer, or any Benefit Plan, directly or indirectly, to
       any liability under ERISA, IRC or any other law, regulation or
       governmental order applicable to any Benefit Plan.

                     (d) Each Benefit Plan (other than any Multiemployer Plan)
       conforms to, and its administration is in compliance with, all applicable
       laws and regulations, including, but not limited to, ERISA and IRC, and
       no fiduciary of any Benefit Plan has taken any action that could result
       in such fiduciary being liable for the payment of damages under ERISA
       Section 409 and that would result in any liability for Company or Buyer.

                     (e) Each Pension Plan that is intended to qualify under
       Section 401(a) or 403(a) of IRC is so qualified and has received a
       favorable determination letter from the Internal Revenue Service with
       respect to such qualification, its related trust has been determined to
       be exempt from taxation under Section 501(a) of IRC, and nothing has
       occurred since the date of such letter that could adversely affect such
       qualification or exemption.

                     (f) Each Benefit Plan (other than any Multiemployer Plan)
       has been maintained in accordance with its terms, and there are no
       pending or threatened claims, lawsuits or arbitrations (other than
       routine claims for benefits) that have been asserted or instituted
       against or with respect to any such Benefit Plan or the assets of any of
       the trusts under any such Benefit Plan.

                     (g) There has been no failure to comply with applicable
       ERISA or other requirements as to the filing of reports, documents and
       notices with the Secretary of Labor, the Secretary of the Treasury and
       the Pension Benefit Guaranty Corporation ("PBGC") that could subject any
       Benefit Plan (other than any Multiemployer Plan), any fiduciary thereof,
       Company or Buyer to a penalty, and any requirement of the furnishing of
       such documents to participants or beneficiaries, due before the Closing
       Date, has been or will be complied with by all of the Benefit Plans prior
       to the Closing.

                     (h) No "prohibited transaction," as such term is defined in
       Code Section 4975 and ERISA Section 406, has occurred with respect to any
       Pension Plan or Welfare Plan that could subject such Plan, any fiduciary
       thereof, Company or Buyer to a penalty for such prohibited transaction
       imposed by ERISA Section 502 or a material tax imposed by Code Section
       4975.



                                      -27-
<PAGE>   29

                     (i) Any bond required by applicable provisions of ERISA
       with respect to any Pension Plan or Welfare Plan has been obtained and is
       in full force and effect.

                     (j) No "reportable event," as such term is defined in ERISA
       Section 4043(c), has occurred or is continuing with respect to any
       Pension Plan.

                     (k) No Pension Plan that is or was subject to Title IV of
       ERISA has been terminated; no proceeding has been initiated to terminate
       any such Plan; and Company has not incurred, nor reasonably expects to
       incur, any liability, whether to the PBGC or otherwise, except for
       required premium payments, which payments have been made when due, with
       respect to the termination of any Pension Plan. No event has occurred
       (and there exists no condition or set of circumstances) that presents a
       material risk of the partial termination of any Pension Plan.

                     (l) No Benefit Plan provides medical or death benefits
       (whether or not insured) with respect to current or former employees of
       Company beyond their retirement or other termination of service (other
       than coverage mandated by law or death benefits under any Pension Plan).

                     (m) There are no unfunded benefit obligations arising in
       any jurisdiction.

                     (n) The consummation of the transactions contemplated
       hereby will not entitle any current or former employee of Company to
       severance pay, unemployment compensation or any similar payment, or
       accelerate the time of payment or vesting, or increase the amount of any
       compensation due to any such employee or former employee.

                     (o) Seller has provided (or has caused the applicable
       Benefit Plans to provide) and will continue to provide (or cause the
       applicable Benefit Plans to provide) for "continuation coverage" to or
       for the benefit of each "covered employee" and each "qualified
       beneficiary" entitled thereto (as such terms are defined in Code Section
       4980B) and shall otherwise comply in all respects with the requirements
       (including, but not limited to, notice requirements) of Code Section
       4980B as to each such covered employee and each such qualified
       beneficiary with respect to whom a "qualifying event" (as defined in Code
       Section 4980B) has occurred (or will occur) through the Closing.

                     (p) Schedule 2.20 sets forth a true and correct list of all
       Multiemployer Plans to which Seller or Company have contributed, or are
       required to contribute. To the best knowledge of Seller and Company, each
       Multiemployer Plan has been maintained in substantial compliance with the



                                      -28-
<PAGE>   30

       requirements prescribed by any and all applicable statutes, orders, rules
       and regulations, including, but not limited to, ERISA and IRC. To the
       best knowledge of Seller and Company, no "prohibited transaction," as
       defined in ERISA Section 406 or Code Section 4975, has occurred in
       connection with any Multiemployer Plan. Seller or Company shall have
       made, on or prior to the Closing, all contributions required to be made
       to each Multiemployer Plan.

                     (q) Schedule 2.20 sets forth accurately, for each
       Multiemployer Plan, the amount of contributions by Seller or Company to
       such plan for the prior two plan years and the amount of withdrawal
       liability as determined under Section 4201 of ERISA that Seller or
       Company would incur if they withdrew from such plan in a complete
       withdrawal. With respect to any Multiemployer Plan, Seller or Company
       have not incurred or otherwise become liable for and are not reasonably
       expected to incur or become liable for a "complete withdrawal" or
       "partial withdrawal," as such terms are defined in Sections 4203 and 4205
       of ERISA, respectively, with respect to events that have occurred before
       or as of the Closing. Seller previously has furnished to Buyer complete
       and correct summaries of Seller's and Company's contribution history with
       respect to each of the Multiemployer Plans set forth in Schedule 2.20.

              2.21 Litigation. There is no litigation, action, suit, proceeding
or to the best knowledge of Seller or Company, investigation presently pending
or threatened against Company or a Subsidiary or affecting its assets, property,
business or prospects or restricting or prohibiting the consummation of the
transactions contemplated by this Agreement before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign.

              2.22 Insurance. Schedule 2.22 sets forth a list and brief
description of all policies or binders of fire, liability, product liability,
worker's compensation, vehicular and other insurance held by or on behalf of
Company and each Subsidiary. Such policies and binders are valid and enforceable
in accordance with their terms, are in full force and effect, and insure against
risks and liabilities of the kinds and in amounts customarily insured against by
persons of established reputation engaged in the same or a similar business
similarly situated. All premiums on all such policies have been paid to date and
Company has complied with all conditions of such policies and has received no
notice of any failure to comply with the terms of such policies. In addition,
Schedule 2.22 sets forth in respect of such policies and binders (i) the type
and amount of coverage provided thereby, (ii) their respective effective dates
and (iii) any claims made or occurrences reported during the past two (2) years
with respect to products liability and workers compensation.

              2.23 Officers, Directors and Key Employees. Schedule 2.23 sets
forth (i) the name and total compensation of each officer and director of
Company or a



                                      -29-
<PAGE>   31

Subsidiary, and each other employee of Company or a Subsidiary whose salary as
of the date hereof equals or exceeds $60,000 per annum, and (ii) all commitments
or agreements by Company or a Subsidiary to increase the wages or to modify the
conditions or terms of employment of any such employees.

              2.24 Conditions of Tangible Assets and Inventories.

                     (a) All items of machinery, equipment and other tangible
       assets of Company and each Subsidiary are in good operational condition,
       have been regularly and properly serviced and maintained in a manner that
       would not void or limit the coverage of any warranty thereon, other than
       items currently under, or scheduled for, repair or construction, and are
       adequate and fit to be used for the purposes for which they are currently
       used in the manner they are currently used.

                     (b) The inventory of the Company and the Subsidiaries
       consist of items of merchantable quality and quantity usable or salable
       in the ordinary course of business, and are salable at prevailing market
       prices not less than the book value amounts thereof, and are not
       obsolete, damaged, slow-moving or defective. No item included in the
       inventory has been the subject of recall by a government agency. The
       value at which inventories are carried on the Recent Balance Sheet
       reflects the customary inventory valuation policy of Company (which
       fairly reflects the value of obsolete, spoiled or excess inventory) for
       stating inventory in accordance with GAAP consistently applied.

              2.25 Bank Accounts. Schedule 2.25 sets forth the names and
locations of all banks, trust companies, savings and loan associations and other
financial institutions at which each of Company and the Subsidiaries maintain
accounts of any nature, the account numbers of all such accounts and the names
of all persons authorized to draw thereon or make withdrawals therefrom.

              2.26 Powers of Attorney; Guarantees. Except as set forth in
Schedule 2.26, neither Company nor any Subsidiary has an obligation to act under
any outstanding power of attorney or any obligation or liability, either
accrued, accruing or contingent, as guarantor, surety, consignor, endorser
(other than for purposes of collection in the ordinary course of the business),
co-maker or indemnitor in respect of the obligation of any person, corporation,
partnership, joint venture, association, organization or other entity.

              2.27 Relations with Suppliers. No supplier has canceled any
contract or order for provisions of, and there has been no threat by any
supplier not to provide, products, supplies, or services (including utilities)
to Company or any Subsidiary within the twelve (12) months immediately preceding
the date of this Agreement.



                                      -30-
<PAGE>   32

Each of Company's and the Subsidiaries' relationships with its suppliers are
commercially satisfactory.

              2.28 Relations with Customers. Except as set forth in Schedule
2.28, no customer has canceled any contract or order for provisions of, and
there has been no threat by any customer not to purchase (or to reduce its
purchases of), products from Company or any Subsidiary within the twelve (12)
months immediately preceding the date of this Agreement. Each of Company's and
the Subsidiaries relationships with its customers are commercially satisfactory.

              2.29 Accounts Receivables. All of the accounts receivable owing to
each of Company and the Subsidiaries as of the date of this Agreement
constitute, and as of the Closing Date will constitute, valid and enforceable
claims arising from bona fide transactions in the ordinary course of business
and will be fully collected within sixty (60) days after the date when first
due, and there has been no notice of any claims, refusals to pay or other
claimed rights of set off against any thereof. (i) No third party account debtor
is delinquent in its payment in the aggregate more than $10,000 by more than
sixty (60) days; (ii) no account debtor has refused or threatened to refuse to
pay its obligations for any reason; (iii) no account debtor is insolvent or
bankrupt; and (iv) no account receivable is pledged to any third party.

              2.30 Transactions with Affiliates. Schedule 2.30 is a true,
correct and complete list of all existing business relationships between each of
Company and the Subsidiaries and any of the officers, directors or shareholders
thereof or any of such officer's, director's, or shareholder's Affiliates. No
officer or employee of Company or any Subsidiary or Seller or any of Seller's
Affiliates has any material interest in any property, real or personal, tangible
or intangible of Company or any Subsidiary, is indebted or otherwise obligated
to Company or any Subsidiary, has any contractual relationship with Company or
any Subsidiary or is an officer, director, employee or consultant of a
competitor of Company or any Subsidiary. Neither Company nor any Subsidiary is
indebted or otherwise obligated to any such person, except for amounts due under
normal arrangements applicable to all employees generally as to salary or
reimbursement of ordinary business expenses not unusual in amount or
significance. The consummation of the transactions contemplated by this
Agreement will not (either alone, or upon the occurrence of any act or event, or
with the lapse or time, or both) result in any benefit or payment (severance or
other) arising or becoming due from Company or any Subsidiary or the successor
or assign of any thereof to any person.

              2.31 Data Processing. Company's and each Subsidiary's records, to
the extent they contain important information that is not easily and readily
available elsewhere, have been duplicated, and such duplicates are stored safely
and securely pursuant to procedures and techniques utilized by companies of
comparable size in similar lines of business. The data processing equipment,
data transmission



                                      -31-
<PAGE>   33

equipment, related peripheral equipment and software used by the foregoing in
the operation of the business to generate and retrieve such records are
comparable in performance, condition and capacity with those utilized by
companies of comparable size in similar lines of business and have been since
December 31, 1999, free from limitations on capacity or readiness to accept,
create, manipulate, sort, sequence, calculate, compare or output calendar date
information, including, but not limited to, functionality of peripheral
interfaces, firmware and embedded microchips

              2.32 Brokerage. No broker, finder or investment banker has acted
directly or indirectly for Company, Seller or any Affiliate thereof in
connection with this Agreement or the transactions contemplated hereby. No
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in respect of any such transaction based in any way on
agreements, arrangements or understandings made by or on behalf of Company,
Seller or any Affiliate thereof.

              2.33 Accuracy of Representations. No representation, warranty,
statement or schedule furnished by Seller or Company to Buyer in connection with
the transactions contemplated hereby contains any untrue statement of any
material fact or omits to state any material fact necessary in order to make the
statements contained herein or therein not misleading.

       3. REPRESENTATIONS AND WARRANTIES OF BUYER

              Buyer represents and warrants to Seller that the statements
contained in this Article III are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Article III):

              3.1 Organization and Standing. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of Delaware,
has the requisite power to own, lease and operate its assets, properties and
business and is duly qualified as a foreign corporation in good standing under
the laws of each state or jurisdiction in which either the ownership or use of
the properties owned or used by it, or the nature of the activities conducted by
it, requires such qualification.

              3.2 Authority. Buyer has all requisite corporate power and
authority to execute and deliver this Agreement and each Transaction Document
and to perform its obligations hereunder and thereunder. This Agreement has
been, and each Transaction Document will be prior to the Closing, duly
authorized, executed and delivered by Buyer, and (assuming the due
authorization, execution and delivery by Seller and Company) this Agreement
constitutes, and each Transaction Document when so executed and delivered will
constitute, the legal, valid and binding obligations of Buyer enforceable
against Buyer in accordance with its terms except to the extent



                                      -32-
<PAGE>   34

that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
affecting the enforcement of creditors' rights generally, and general principles
of equity (regardless of whether enforcement is considered in a proceeding at
law or in equity).

              3.3 No Violation of Law and Agreements. Except as set forth on
Schedule 3.3, the execution and delivery by Buyer of this Agreement and each
Transaction Document, and the performance by Buyer of its obligations hereunder
or thereunder, does not and will not:

                     (a) violate any provision of the Certificate of
       Incorporation or Bylaws of Buyer;

                     (b) (i) violate any provision of Applicable Law relating to
       Buyer; (ii) violate any provision of any order, arbitration award,
       judgment or decree to which Buyer is subject; or (iii) require a
       registration, filing, application, notice, consent, approval, order,
       qualification or waiver with, to or from any Governmental Authority; or

                     (c) (i) require a consent, approval or waiver from, or
       notice to, any party to any contract to which Buyer or any Affiliate
       thereof is a party; or (ii) result in a breach of or cause a default
       under any provision of a contract to which Buyer or any Affiliate thereof
       is a party.

              3.4 Brokerage. No broker, finder or investment banker has acted
directly or indirectly for Buyer or any Affiliate thereof in connection with
this Agreement or the transactions contemplated hereby. No broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in respect of any such transaction based in any way on agreements,
arrangements or understandings made by or on behalf of Buyer or any Affiliate
thereof.

       4. COVENANTS AND AGREEMENTS OF SELLER AND COMPANY

              4.1 Conduct of Business. From the date hereof through the Closing
Date, Seller shall cause Company to, and Company shall, carry on its business
and Company shall cause each Subsidiary to carry on each of its business,
substantially in the manner in which they are presently conducted and, without
the prior written consent of Buyer, not to undertake any of the actions
specified in Section 2.10.

              4.2 Efforts to Close. From the date hereof through the Closing
Date, Seller and Company shall use commercially reasonable efforts to take, or
cause to be taken, all actions, and shall do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated hereby (including, without limitation,
using commercially



                                      -33-
<PAGE>   35

reasonable efforts to satisfy Buyer's conditions to Closing), and shall
cooperate with Buyer in connection with the foregoing.

              4.3 Continued Effectiveness of Representations and Warranties of
Seller. From the date hereof through the Closing Date, (i) Seller shall, and
Seller shall cause Company to, use its commercially reasonable efforts to
conduct its affairs in such a manner so that, except as otherwise contemplated
or permitted by this Agreement, the representations and warranties contained in
Article II shall continue to be true and complete on and as of the Closing Date
as if made on and as of the Closing Date, and (ii) Company and Seller shall
promptly notify Buyer of any event, condition or circumstance occurring from the
date hereof through the Closing Date that would constitute a violation or breach
of this Agreement by Seller or Company and of any changes to any of the
Disclosure Schedules; provided, however, that such disclosure shall not be
deemed to cure any breach of a representation, warranty, covenant or agreement
or to satisfy any condition. Notwithstanding the foregoing, Company shall not be
liable for any breach of the representations and warranties contained in Article
II.

              4.4 Corporate Examinations and Investigations. Prior to the
Closing Date, Buyer shall be entitled, through its employees, agents and
representatives, to make such investigation of the assets, liabilities,
properties, business and operations of Company and the Subsidiaries, and such
examination of the books, records and financial condition of Company and the
Subsidiaries, as Buyer reasonably determines is necessary. Without limiting the
foregoing, Buyer shall have the right, at its sole cost and expense, to (i)
conduct tests of the soil, surface or subsurface waters and air quality at, in,
on, beneath or about the Facilities, and such other procedures as may be
recommended by independent environmental consultants selected by Buyer (the
"Consultant(s)") based on its reasonable professional judgment, in a manner
consistent with good engineering practice, (ii) inspect records, reports,
permits, applications, monitoring results, studies, correspondence, data and any
other information or documents relevant to Environmental Conditions or
environmental noncompliance, and (iii) inspect all buildings and equipment at
the Owned Property and the Facilities including, without limitation, the visual
inspection of the Facilities for asbestos-containing construction materials;
provided, however, that in each case, such tests and inspections shall be
conducted only (i) during regular business hours; and (ii) in a manner which
will not unduly interfere with the operation of Company's business or the use
of, access to or egress from the Facilities.

              4.5 Assignment of Leaseholds. Seller and Company shall obtain from
the lessors or sublessors of the Leased Property, as Buyer shall request,
estoppel certificates addressed to Buyer and Company stating (i) that the
applicable lease is and will continue to be in full force and effect and has not
been modified or amended, except as indicated in such certificate, and neither
the Landlord nor Company is in



                                      -34-
<PAGE>   36

default thereunder, (ii) the expiration date of the term thereunder, (iii) the
rent and other charges payable thereunder and (iv) the date through which rent
and other charges have been paid thereunder.

              4.6 Insurance. From the date hereof through the Closing Date,
Seller shall cause Company and the Subsidiaries to maintain, and Company shall
maintain and cause the Subsidiaries to maintain, in full force and effect
(including necessary renewals thereof) the insurance policies listed on Schedule
2.22, except to the extent that they may be replaced with equivalent policies
appropriate to insure the assets, properties and business of Company and the
Subsidiaries to the same extent as currently insured.

              4.7 Cooperation. Company and Seller shall provide Buyer or its
Representatives with any other document related to Company and the Subsidiaries
that Buyer may reasonably request and shall otherwise cooperate (i) in Buyer's
examination of Company and the Subsidiaries, and (ii) with Buyer's financing
sources.

              4.8 WARN Act. Seller shall give notice of any "plant closing" or
"mass layoff," as such terms are defined in the WARN Act and the regulations
promulgated thereunder (the "WARN Act"), which occur up to and including the
Closing Date, and Seller shall indemnify and hold Buyer harmless for any and all
liability arising from a failure to give such notice or arising from a plant
closing or mass layoff occurring prior to or on the Closing Date.

              4.9 Expenses. Seller shall bear all expenses incurred on behalf of
Seller, Company or any Subsidiary in connection with the preparation, execution
and performance of this Agreement and the transactions contemplated hereby,
including, without limitation, all fees and expenses of its agents,
representatives, counsel and accountants and shall reimburse Buyer promptly upon
demand for one-half of (i) any costs incurred by Buyer in connection with the
preparation or negotiation of this Agreement or the Management Incentive
Agreements referred to in Section 7.12, and (ii) any costs incurred by the
independent directors of Buyer in connection with the fairness opinion referred
to in Section 7.14.

              4.10 Further Assurances. Seller and Company shall execute such
documents and other papers and take such further actions as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated hereby.

              4.11 Hart-Scott-Rodino. Seller and Company shall promptly take all
such action as may be necessary, desirable or convenient to satisfy the
requirement of filing notification under the HSR Act and the rules of the FTC
thereunder and to comply at the earliest practicable date with any request for
additional information received by it from the FTC or from Justice pursuant to
the HSR Act. Seller and



                                      -35-
<PAGE>   37

Company shall use all commercially reasonable efforts to assist Buyer in
complying with its obligations under Section 5.4 hereof.

              4.12 No Solicitation of Transactions. Neither Seller nor Company
shall, directly or indirectly, solicit, encourage, initiate or hold discussions
or negotiations with, provide any nonpublic information to, or enter into any
agreement with, any Person (other than Buyer and its employees, representatives
and agents) with respect to a merger, consolidation, sale of a substantial
amount of assets, sale of securities or acquisition of beneficial ownership of
Company or any Subsidiary.

              4.13 Noncompetition.

                     (a) As used in this Agreement, the term "Competitive
       Activity" shall mean any participation in, ownership of any interest in,
       acceptance of business from or assistance, promotion or organization of
       any person, partnership, corporation, firm, association or other business
       organization, entity or enterprise which, directly or indirectly, is
       engaged in, or hereinafter engages in, research on, or development,
       production, marketing or selling of Schottky wafers.

                     (b) Until December 31, 2004, Seller shall refrain from,
       without the prior written consent of Buyer in each instance, directly or
       indirectly, engaging in any Competitive Activity in any of the following
       geographic areas:

                            (1) the State of California;

                            (2) the United States of America;

                            (3) the United States of America, The People's
              Republic of China and Taiwan; and

                            (4) anywhere in the world.

                     (c) Seller shall not, without the prior written consent of
       Buyer in each instance, disclose or use in any way any confidential
       business or technical information or trade secret of Company, whether or
       not patentable, copyrightable or otherwise protected by law
       (collectively, the "Trade Secrets"), including, without limitation, any
       information concerning Company Intellectual Property, customer lists,
       products, designs, processes, procedures, operations, investments,
       financing, costs, employees, purchasing, accounting, marketing,
       merchandising, sales, salaries, pricing, profits and plans for future
       development, the identity, requirements, preferences, practices and
       methods of doing business of specific parties with whom Company transacts
       business, and all other information which is related to any product,
       service or business of Company,



                                      -36-
<PAGE>   38

       other than information which is generally known in the industry in which
       Company transacts business or is acquired from public sources; all of
       which Trade Secrets are the exclusive and valuable property of Company.

                     (d) Seller shall not, directly or indirectly, employ or
       offer to employ, call on, solicit, interfere with or attempt to divert or
       entice away any employee or independent contractor of Company (or any
       person whose employment or status as an independent contractor has
       terminated within the twelve (12) months preceding the date of such
       solicitation) in any capacity if that person possesses or has knowledge
       of any Trade Secrets of Company.

              Seller hereby acknowledges and agrees that it would be difficult
to fully compensate Buyer for damages resulting from the breach or threatened
breach of the foregoing provisions and, accordingly, that Buyer shall be
entitled to temporary and injunctive relief, including temporary restraining
orders, preliminary injunctions and permanent injunctions, to enforce such
provisions without the necessity of proving actual damages and without the
necessity of posting any bond or other undertaking in connection therewith. This
provision with respect to injunctive relief shall not, however, diminish Buyer's
right to claim and recover damages.

              4.14 Inventory and Accounts Receivable. (a) Seller and Buyer shall
       each review the inventory and accounts receivable of Company and the
       amounts reserved by Company in connection therewith, and Seller shall
       cause the financial statements of Company as of the Closing Date to
       reflect such increase or decrease in such reserves as to which Seller and
       Buyer mutually shall agree. Any such change in reserves shall have no
       effect on the Purchase Price.

              4.15 Indebtedness. From the date hereof through the Closing Date,
Company shall refrain from paying, and Seller shall cause Company to refrain
from paying, any indebtedness of Company to Seller or Citibank.

       5. COVENANTS AND AGREEMENTS OF BUYER

              5.1 Efforts to Close. From the date hereof through the Closing
Date, Buyer shall use commercially reasonable efforts to take, or cause to be
taken, all actions, and shall do, or cause to be done, all things necessary,
proper or advisable to consummate and make effective as promptly as practicable
the transactions contemplated hereby (including, without limitation, using
commercially reasonable efforts to satisfy Seller's conditions to Closing), and
shall cooperate with Seller in connection with the foregoing.

              5.2 Expenses. Except as set forth in Section 4.9, Buyer shall bear
all expenses incurred on behalf of Buyer in connection with the preparation,
execution and performance of this Agreement and the transactions contemplated
hereby,



                                      -37-
<PAGE>   39

including, without limitation, all fees and expenses of its agents,
representatives, counsel, and accountants.

              5.3 Further Assurances. Buyer shall execute such documents and
other papers and take such further actions as may be reasonably required or
desirable to carry out the provisions hereof and the transactions contemplated
hereby.

              5.4 Hart-Scott-Rodino. Buyer shall promptly take all such action
as may be necessary, desirable or convenient to satisfy the requirement of
filing notification under the HSR Act and the rules of the FTC thereunder and to
comply at the earliest practicable date with any request for additional
information received by it from the FTC or from Justice pursuant to the HSR Act.
Buyer shall use all commercially reasonable efforts to assist Seller in
complying with its obligations under Section 4.11 hereof.

       6. CONDITIONS TO THE OBLIGATIONS OF SELLER

              The obligation of Seller to complete the transactions contemplated
hereby is subject to the fulfillment on or prior to the Closing Date of the
following conditions, any one or more of which may be waived by it, to the
extent permitted by law.

              6.1 Representations and Warranties. The representations and
warranties of Buyer contained herein shall be true and complete on and as of the
Closing Date as though made at and as of that date, and Buyer shall have
delivered to Seller a certificate to such effect.

              6.2 Compliance with Covenants. Buyer shall have performed and
complied with all terms, agreements, covenants and conditions of this Agreement
to be performed or complied with by it on or prior to the Closing Date, and
Buyer shall have delivered to Seller a certificate to that effect.

              6.3 Corporate Action. Buyer shall have delivered to Seller (i)
certified copies of Buyer's Certificate of Incorporation, Bylaws and resolutions
of Buyer's Board of Directors, in form reasonably satisfactory to Seller,
approving the execution and delivery of this Agreement and each Transaction
Document and the performance of Buyer's obligations hereunder and thereunder;
(ii) a certificate of good standing with respect to Buyer issued by the
appropriate Governmental Authority of Buyer's jurisdiction of incorporation
showing that Buyer is in good standing in such jurisdiction, dated within ten
(10) business days prior to the Closing Date; and (iii) an incumbency
certificate of Buyer, certified by the Secretary or Assistant Secretary of
Buyer.



                                      -38-
<PAGE>   40

              6.4 Litigation. On the Closing Date, there shall be no Action
pending or threatened pertaining to the transactions contemplated hereby or to
their consummation.

              6.5 Absence of Adverse Governmental Action. No action shall have
been taken, proposed or threatened and no statute, rule, regulation or order
shall have been proposed, enacted or entered by any Governmental Authority or by
any court with jurisdiction over the transactions contemplated hereby that
threatens to prohibit or unduly delay consummation of such transactions on the
terms and provisions herein set forth.

              6.6 Filings; Consents; Waiting Periods. All registrations,
filings, applications, notices, consents, approvals, orders, qualifications and
waivers listed in Schedule 2.7, shall have been filed, made or obtained, and all
waiting periods applicable under the HSR Act shall have expired or been
terminated.

              6.7 Approval of Documentation. The form and substance of all
certificates, instruments, opinions and other documents delivered to Seller
under this Agreement shall be satisfactory in all reasonable respects to Seller
and its counsel.

              6.8 Payment of Indebtedness. On the Closing Date, Company shall
deliver to Seller a promissory note in substantially the form attached hereto as
Exhibit A representing Company's outstanding indebtedness to Seller, together
with all interest accrued thereon, as of the Closing Date.



       7. CONDITIONS TO THE OBLIGATIONS OF BUYER

              The obligation of Buyer to complete the transactions contemplated
hereby is subject to the fulfillment on or prior to the Closing Date of the
following conditions, any one or more of which may be waived by it, to the
extent permitted by law.

              7.1 Representations and Warranties. The representations and
warranties of Seller contained herein shall be true and complete on and as of
the Closing Date as though made at and as of that date, and Seller shall have
delivered to Buyer a certificate to such effect.

              7.2 Compliance with Covenants. Seller and Company shall have
performed and complied with all terms, agreements, covenants and conditions of
this Agreement to be performed or complied with by it on or prior to the Closing
Date, and Seller and Company shall have delivered to Buyer a certificate to that
effect.



                                      -39-
<PAGE>   41

              7.3 Corporate Action. Seller shall have delivered to Buyer (i)
certified copies of Seller's and Company's Certificates of Incorporation, Bylaws
and resolutions of Seller's and Company's Board of Directors, in form reasonably
satisfactory to Buyer, approving the execution and delivery of this Agreement
and each Transaction Document and the performance of Seller's and Company's
obligations hereunder and thereunder; (ii) a certificate of good standing with
respect to Seller and Company issued by the appropriate Governmental Authority
of such Person's jurisdiction of incorporation showing that such Person is in
good standing in such jurisdiction, dated within ten (10) business days prior to
the Closing Date; and (iii) an incumbency certificate of Seller and Company,
certified by the Secretary or Assistant Secretary of each such Person.

              7.4 Litigation. On the Closing Date, there shall be no Action
pending or threatened pertaining to the transactions contemplated hereby or to
their consummation.

              7.5 Absence of Adverse Governmental Action. No action shall have
been taken, proposed or threatened and no statute, rule, regulation or order
shall have been proposed, enacted or entered by any Governmental Authority or by
any court with jurisdiction over the transactions contemplated hereby that
threatens to prohibit or unduly delay consummation of such transactions on the
terms and provisions herein set forth.

              7.6 Filings; Consents; Waiting Periods. All registrations,
filings, applications, notices, consents, approvals, orders, qualifications and
waivers listed in Schedule 3.3, shall have been filed, made or obtained, and all
waiting periods applicable under the HSR Act shall have expired or been
terminated.

              7.7 Approval of Documentation. The form and substance of all
certificates, instruments, opinions and other documents delivered to Buyer under
this Agreement shall be satisfactory in all reasonable respects to Buyer and its
counsel.

              7.8 Financing. Buyer shall have closed the financing arrangements
described in Exhibit C.

              7.9 No Material Adverse Changes. Since the date hereof, there
shall not have been any material adverse changes in the consolidated financial
condition, the results of operations or prospects of Company, and Company on a
consolidated basis shall not have sustained any material loss or damage, whether
or not insured.

              7.10 Resignations. Buyer shall have received resignations from
each director and officer of Company.



                                      -40-
<PAGE>   42

              7.11 Estoppel Certificates. Buyer shall have received and approved
the estoppel certificates required by Section 4.5.

              7.12 Management Incentive Agreements. On the Closing Date, each
party thereto shall have executed and delivered a Management Incentive Agreement
in the form attached hereto as Exhibit B between Company and each employee whose
name is set forth on Schedule 7.12.

              7.13 Lease Assignment. Buyer shall receive executed assignments of
the Leases in a form acceptable to Buyer.

              7.14 Fairness Opinion. On the Closing Date, Buyer shall have
received an opinion of Duff & Phelps (or such other firm as the Board of
Directors of Buyer shall determine in its sole and absolute discretion) in form
and substance acceptable to the Board of Directors of Buyer in their sole and
absolute discretion to the effect that the terms of the transactions
contemplated by this Agreement are fair to the stockholders of Buyer (other than
Seller) from a financial point of view.

       8. INDEMNIFICATION

              8.1 Survival. Each covenant, agreement, representation and
warranty contained herein shall survive the Closing.

              8.2 Seller's Obligation to Indemnify. From and after the Closing,
Seller shall indemnify, defend and hold harmless Buyer (and its directors,
officers, employees, affiliates (other than Seller) and assigns) from and
against all Losses resulting from or arising out of any inaccuracy in or any
breach of any representation, warranty, covenant or agreement of Seller or
Company contained herein or in any Transaction Document.

              8.3 Buyer's Obligation to Indemnify. From and after the Closing,
Buyer shall indemnify, defend and hold harmless Seller (and its directors,
officers, employees, Affiliates and assigns) from and against all Losses
resulting from or arising out of any inaccuracy in or any breach of any
representation, warranty, covenant or agreement of Buyer contained herein or in
any Transaction Document.

              8.4 Notice of Asserted Liability. Promptly after the party
entitled to Indemnification ("Indemnitee") becomes aware of any fact, condition
or event that may give rise to Losses for which indemnification may be sought
under this Article VIII, Indemnitee shall give notice thereof in the manner
provided in this Section 8.4 (the "Claims Notice") to the indemnifying party
("Indemnitor"). The Claims Notice shall include a description in reasonable
detail of any claim or the commencement (or threatened commencement) of any
action, proceeding or investigation (an "Asserted Liability") against
Indemnitee, and shall indicate the



                                      -41-
<PAGE>   43

amount (estimated, if necessary) of the Losses that have been or may be suffered
by Indemnitee. Failure of Indemnitee to promptly give notice hereunder shall not
affect the rights to indemnification hereunder, except to the extent that
Indemnitor demonstrates actual damage caused by such failure. Upon Indemnitor's
request, Indemnitee shall provide Indemnitor with full and unrestricted access
to all books and records relating to the Asserted Liability, and to all
employees or other persons who are knowledgeable about such Asserted Liability,
in order to allow Indemnitor to audit the status of such Asserted Liability and
the payments that have been, or will be, made with respect thereto.

              8.5 Opportunity to Defend. Indemnitor may elect to compromise or
defend, at its own expense and by its own counsel, any Asserted Liability;
provided, however, that Indemnitor may not compromise or settle any Asserted
Liability without the consent of Indemnitee, such consent not to be unreasonably
withheld, unless such compromise or settlement requires no more than a monetary
payment for which Indemnitee and any other indemnifiable parties hereunder are
fully indemnified. If Indemnitor elects to compromise or defend such Asserted
Liability, it shall within 15 days (or sooner, if the nature of the Asserted
Liability so requires) notify Indemnitee of its intent to do so and Indemnitee
shall cooperate in the compromise of, or defense against, such Asserted
Liability. If Indemnitor elects not to compromise or defend any Asserted
Liability, fails to notify Indemnitee of its election as herein provided or
contests its obligation to indemnify, Indemnitee may pay, compromise or defend
such Asserted Liability without prejudice to any right it may have hereunder. In
any event, each of Buyer and Seller may participate, at its own expense, in the
defense of any Asserted Liability in respect of which it may have an
indemnification obligation hereunder. If either party chooses to defend or
participate in the defense of any Asserted Liability, it shall have the right to
receive from the other party any books, records or other documents within such
party's control that are necessary or appropriate for such defense.

              8.6 Tax Adjustment. Any amounts payable by an Indemnitor to or on
behalf of an Indemnitee in respect of a Loss will be adjusted as follows: If an
Indemnitee is liable for any additional taxes as a result of the payment of
amounts in respect of an indemnifiable claim, the Indemnitor will pay to the
Indemnitee in addition to such amounts in respect of the Loss within ten days
after being notified by the Indemnitee of the payment of such liability (x) an
amount equal to such additional taxes (the "Tax Reimbursement Amount") plus (y)
any additional amounts required to pay additional taxes imposed with respect to
the Tax Reimbursement Amount and with respect to amounts payable under this
clause (y), with the result that the Indemnitee will have received from the
Indemnitor, net of the payment of taxes, an amount equal to the Loss.



                                      -42-
<PAGE>   44

              8.7 Waiver of Subrogation and Other Rights. An Indemnitee will not
be required to proceed against any particular Indemnitor for indemnification or
otherwise in respect of any Losses before enforcing its rights hereunder against
any other Indemnitor, and each Indemnitor expressly waives all rights it may
have, now or in the future, under any statute, at common law, or at law or in
equity, or otherwise, to compel an Indemnitee to proceed against any Indemnitor
in respect of any Losses before proceeding against, or as a condition to
proceeding against, any other Indemnitor.

              8.8 No Contribution. Anything to the contrary herein
notwithstanding, Seller shall not have any right to seek any indemnification or
contribution from or remedy against Company, whether arising prior to or after
the Closing Date, in respect of any breach of any representation or warranty by
Company or the failure of Company to comply with any covenant or agreement to be
performed by Company on or prior to the Closing Date, and Seller hereby waives
any such claim it may have against Company with respect thereto whether at law,
in equity or otherwise.

              8.9 Non-Exclusive Remedy. The provisions for indemnification set
forth in this Article VIII are not the exclusive remedies of the parties hereto
with respect to the matters addressed in this Article VIII.

       9. TAX MATTERS

              9.1 Tax Returns. Seller and Buyer agree that for the period from
the end of the most recently ended taxable year of Company through the close of
the Closing Date, Company will file separate federal and Missouri Income Tax
Returns prepared in accordance with this Agreement. Seller shall pay any and all
federal, Missouri and other Taxes imposed or assessed at any time upon Company
or any Subsidiary or any of their assets or with respect to any receipts,
income, sales, transactions or other business activities of any of Company or
any Subsidiary with respect to the period through the close of the Closing Date
and any period ended before that time. Any amount owed by Seller pursuant to the
immediately preceding sentence shall be paid within the later of fifteen (15)
days after Buyer's request for such payment and five (5) days prior to the date
on which Buyer is required to pay or cause to be paid any such Tax.

              9.2 Tax Sharing Agreements. Any Tax sharing or allocation
agreement or obligation between Company and Seller is and shall be terminated as
of the Closing Date and thereupon shall have no further effect for any taxable
year (whether the current year, a future year or a past year).

              9.3 Clearance Certificates. Seller shall furnish to Buyer such
clearance certificates or similar documents that may be required by any federal,



                                      -43-
<PAGE>   45

foreign, state, local or other taxing authority in order to relieve Buyer of any
obligations to withhold any portion of the Purchase Price.

              9.4 Transfer Taxes. Seller shall pay all sales, use, transfer,
real property, documentary and stamp taxes and recording and filing fees
applicable to any transaction contemplated by this Agreement.

              9.5 Seller's Tax Indemnity. Seller shall indemnify and hold Buyer
and Company harmless from and against the entirety of any Taxes which Seller is
responsible or required to pay under any provision of this Agreement and from
and against any Losses that Buyer may suffer resulting from, arising out of,
relating to, in the nature of or caused by any liability of Buyer or Company for
any such Taxes; any liability with respect to any Taxes arising from any changes
made on examination or audit; any liability of any of Company or any Subsidiary
for Taxes of any person other than Company, whether (i) under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local or foreign
law), (ii) as a transferee or successor, (iii) by contract, or (iv) otherwise;
any liability for Taxes arising from the use tax audit described on Schedule
2.11; and any liability for Taxes which would not be owed if all warranties and
representations of Seller or Company hereunder had been true, complete and
correct in all respects. Any indemnification pursuant hereto shall also include
reasonable costs incurred by Buyer or Company (including reasonable fees and
disbursements of attorneys, accountants and expert witnesses) in connection with
such indemnification claim. Any indemnification payable by Seller pursuant
hereto shall be paid within the later of fifteen (15) days of Buyer's request
therefor and five (5) days prior to the date on which the liability upon which
the indemnification is based is required to be satisfied.

       10. TERMINATION OF AGREEMENT

              10.1 Termination. This Agreement may be terminated prior to the
Closing as follows:

                     (a) at the election of Seller, if any one or more of the
       conditions to its obligation to close has not been fulfilled by March 31,
       2001;

                     (b) at the election of Buyer, if any one or more of the
       conditions to its obligation to close has not been fulfilled by March 31,
       2001;

                     (c) at the election of Seller, if Buyer has materially
       breached any material representation, warranty, covenant or agreement
       contained herein; provided, however, that Seller shall have no
       termination right hereunder if the other conditions to the obligation of
       Seller to consummate the transactions contemplated herein shall have been
       satisfied, unless such representation, warranty, covenant or agreement
       shall not have been cured by Buyer by the



                                      -44-
<PAGE>   46

       earlier of (i) March 31, 2001, or (ii) forty-five (45) days after Buyer
       shall have received written notice from Seller that it intends to
       exercise its right to terminate under this subparagraph (c);

                     (d) at the election of Buyer, if Seller or Company has
       materially breached any material representation, warranty, covenant or
       agreement contained herein; provided, however, that Buyer shall have no
       termination right hereunder if the other conditions to the obligation of
       Buyer to consummate the transactions contemplated herein shall have been
       satisfied, unless such representation, warranty, covenant or agreement
       shall not have been cured by Seller or Company by the earlier of (i)
       March 31, 2001, or (ii) forth-five (45) days after Seller or Company
       shall have received written notice from Buyer that it intends to exercise
       its right to terminate under this subparagraph (d);

                     (e) at the election of Seller, on the one hand, or Buyer,
       on the other hand, if any action shall have been instituted and be
       continuing by any Governmental Authority with proper authority to
       restrain, modify or prohibit the carrying out of the transactions
       contemplated hereby; provided, however, that neither Seller nor Buyer
       shall have any termination right hereunder if the other conditions to the
       obligation of Seller or Buyer, as the case may be, to consummate the
       transactions contemplated herein shall have been satisfied, unless such
       action, suit or proceeding shall not have been stayed or terminated by
       the later of (i) March 31, 2001, or (ii) sixty (60) days after the
       commencement of such action, suit or proceeding becomes known to Buyer or
       Seller, as the case may be; and

                     (f) at any time on or prior to the Closing Date, by mutual
       written consent of Seller and Buyer.

              If Buyer or Seller, as the case may be, elects to terminate this
Agreement pursuant to Section 10.1(a), (b), (c), (d) or (e) hereof, the
terminating party shall deliver a notice to the other party hereto declaring its
election to so terminate this Agreement in accordance with the provisions of
Section 10.1(a), (b), (c), (d) or (e), as the case may be, and setting forth
therein the basis for such termination.

              10.2 Survival. If this Agreement is terminated, this Agreement
shall become void and of no further force and effect, except for the provisions
of this Agreement relating to the obligation of Buyer to keep confidential and
not to use certain information and data obtained by it from Seller or any
Affiliate thereof and except for the provisions of Sections 4.9 and 5.2 hereof,
Article VIII, IX and this Article X. None of the parties hereto shall have any
liability in respect to a termination of this Agreement pursuant to this Article
X, except to the extent that



                                      -45-
<PAGE>   47

failure to satisfy the conditions of Articles VI and VII, as applicable, results
from the intentional or willful breach or violation of the representations,
warranties, covenants or agreements of such party under this Agreement. For
purposes of the preceding sentence, the failure of any party to comply with its
respective obligations under Article I promptly after all conditions to such
compliance shall have been fulfilled, shall constitute an intentional or willful
violation of the agreement herein contained by such failing party.

              10.3 Return of Materials. If this Agreement is terminated for any
reason whatsoever, each party shall return to the other all documents, work
papers and other material (including all copies thereof) obtained in connection
with the transactions contemplated hereby and will use all commercially
reasonable efforts, including instructing its employees, agents and
representatives and others who have had access to such information, to keep
confidential and not to use any such information, unless such information is
now, or is hereafter, disclosed, through no act or omission of such party, in
any manner making it available to the general public.

       11. MISCELLANEOUS

              11.1 Notices. All notices, requests, demands and other
communications required or permitted to be given hereunder or under any
Transaction Document shall be in writing and shall be deemed to have been duly
given (i) upon receipt, if delivered personally, (ii) upon confirmation of
receipt, if given by electronic facsimile and (iii) on the third business day
following mailing, if mailed first-class, postage prepaid, certified mail,
return receipt requested, as follows:

                         (a) If to Buyer to:

                                Diodes Incorporated
                                3050 East Hillcrest Drive
                                Westlake Village, California 91362
                                Attention:  President
                                Telecopier:  (805) 381-3825

                                with a copy to:

                                Sheppard, Mullin, Richter & Hampton LLP
                                333 South Hope Street, 48th Floor
                                Los Angeles, California  90071
                                Attention: Peter M. Menard, Esquire
                                Telecopier: (213) 620-1398

                         (b) If to Seller to:



                                      -46-
<PAGE>   48

                                Lite-On Power Semiconductor Corp.
                                28-1, Wu Shin St.
                                Ta Wu Lung Ind. Zone Keelung
                                Taiwan R.O.C.
                                Attention:  President
                                Telecopier:  (02) 2432-4924 / 2431-1919

                                with a copy to:

                                Lien Cheng International Law Office
                                13 F-1, Sec. 4, Jen Ai Road
                                Taipei, Taiwan
                                Attention: Curtis T.Y. Hsieh, Esquire
                                Telecopier: (02) 278-49922

                         (c) If to Company to:

                                FabTech, Inc.
                                777 Northwest Blue Parkway
                                Lee's Summit, Missouri 64063
                                Attention:  President
                                Telecopier:  (816) 251 - 8850

                                with a copy to:

                                Blackwell Sanders Pepper Martin, LLP
                                2300 Main Street
                                Suite 1000
                                Kansas City, Missouri 64108
                                Attention: Beverlee Roper, Esquire
                                Telecopier: (816) 983-8080

              Any party may by notice given in accordance with this Section 11.1
to the other parties designate another address or person for receipt of notices
hereunder.

              11.2 Entire Agreement. This Agreement (including the Schedules
hereto) and the Transaction Documents contain the entire agreement of the
parties with respect to the purchase of the Shares and related transactions, and
supersedes all prior agreements, representation and warranties, written or oral,
with respect thereto.

              11.3 Waivers and Amendments. This Agreement and each Transaction
Document may be amended, superseded, canceled, renewed or extended, and the
terms hereof or thereof may be waived, only by a written instrument signed by
each of the parties hereto or thereto or, in the case of a waiver, by the party
waiving compliance.



                                      -47-
<PAGE>   49

The failure of a party to insist, in any one or more instances, upon performance
of the terms or conditions of this Agreement or any Transaction Document shall
not be construed as a waiver or relinquishment of any right granted hereunder or
of the future performance of any such term, covenant or condition. No waiver on
the part of any party of any right, power or privilege, nor any single or
partial exercise of any such right, power or privilege, shall preclude any
further exercise thereof or the exercise of any other such right, power or
privilege.

              11.4 Governing Law. This Agreement and each Transaction Document
shall be governed by and construed in accordance with the substantive and
procedural laws of the State of California applicable to agreements made and to
be performed entirely within such State. The parties hereby agree that any
action, suit, arbitration or other proceeding arising out of or related to this
Agreement or any Transaction Document or the relationship created hereby or
thereby shall be conducted only in Los Angeles County, California. Each party
hereby irrevocably consents and submits to the personal jurisdiction of and
venue in United States District Court for the Central District of California and
in the Superior Court and Municipal Court for Los Angeles County in any legal
action, equitable suit or other proceeding arising out of or related to this
Agreement or any Transaction Document or the relationship between the parties
created hereby or thereby.

              11.5 Arbitration. Notwithstanding anything herein to the contrary,
if there shall be a dispute among any of the parties arising out of or relating
to (a) the negotiations of the transactions contemplated by this Agreement or
any Transaction Document; (b) this Agreement or any Transaction Document
(including, without limitation, the issue of arbitrability or the indemnities
provided herein or therein, or the breach thereof); or (c) the transactions
contemplated hereby or thereby, the parties agree that such dispute shall be
resolved by final and binding arbitration in Los Angeles, California,
administered by Judicial Arbitration & Mediation Services, Inc. ("JAMS"), in
accordance with JAMS' rules of practice then in effect or such other procedures
as the parties may agree to. Each party hereby irrevocably consents and submits
to personal jurisdiction in the State of California for any arbitration
contemplated by this Section 11.5. Any award issued as a result of such
arbitration shall be final and binding between the parties thereto, and shall be
enforceable by any court having jurisdiction over the party against whom
enforcement is sought. The fees and expenses of such arbitration (including
reasonable attorneys' fees) or any action to enforce an arbitration award shall
be paid by the party that does not prevail in such arbitration.

              11.6 Reference to U.S. Dollars. All references in this Agreement
and in any Transaction Document to amounts of money expressed in dollars are
references to United States dollars, unless otherwise indicated.



                                      -48-
<PAGE>   50

              11.7 Binding Effect; Assignment. This Agreement and each
Transaction Document shall be binding upon and inure to the benefit of the
parties and their respective permitted successors and permitted assigns. Neither
this Agreement nor any Transaction Document, nor any of the rights hereunder or
thereunder, may be assigned by any party, nor may any party delegate any
obligations hereunder or thereunder, without the written consent of the other
party hereto or thereto. Any non-permitted assignment or attempted assignment
shall be void. Notwithstanding the foregoing, Buyer may assign this Agreement
and the Transaction Documents, and any of its rights hereunder or thereunder,
and may delegate any of its obligations hereunder or thereunder, to any
Affiliate thereof.

              11.8 No Third Party Beneficiaries. Nothing herein is intended or
shall be construed to give any person any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein,
except as otherwise provided herein.

              11.9 Counterparts. This Agreement and each Transaction Document
may be executed by the parties in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute one and the same instrument. Each counterpart may consist of
a number of copies hereof or thereof each signed by less than all, but together
signed by all of the parties.

              11.10 Schedules and Exhibits. The schedules and exhibits attached
to this Agreement or to any Transaction Document are a part hereof or thereof,
as applicable, as if fully set forth herein or therein.

              11.11 Headings, Gender and Person. The headings herein or in any
Transaction Document are for reference only and shall not affect the
interpretation of this Agreement or such Transaction Document. Whenever the
context requires in this Agreement or any Transaction Document, the masculine
pronoun shall include the feminine and the neuter, and the singular shall
include the plural.

              11.12 Publicity. All notices to third parties and all other
publicity concerning the transactions contemplated hereby or by any Transaction
Document shall be jointly planned and coordinated by Buyer and Seller.

              11.13 Severability. Whenever possible, each provision of this
Agreement and any Transaction Document shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this
Agreement or any Transaction Document is held to be prohibited by or invalid
under applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Agreement or such Transaction
Document. For purpose of determining the scope



                                      -49-
<PAGE>   51

of the covenant set forth in Section 4.13, each of subparagraphs (i), (ii),
(iii) and (iv) shall be considered a separate covenant such that if the
geographic scope of any such subparagraph shall be determined by a court of
competent jurisdiction to be excessive and invalid, such subparagraph shall be
severed and the remaining subparagraphs shall be deemed enforceable and remain
in full force and effect.

              11.14 Time of Essence. Time is of the essence for each and every
provision of this Agreement and each Transaction Document.

              11.15 Attorneys' Fees. If any legal action or other proceeding is
brought for the enforcement of this Agreement or any Transaction Document, or
because of an alleged dispute, breach, default or misrepresentation in
connection with any of the provisions hereof or thereof, the successful or
prevailing party shall be entitled to recover reasonable attorneys' fees and
other costs incurred in that action or proceeding, in addition to any other
relief to which it may be entitled.

              11.16 Confidential Information. The parties acknowledge that the
transactions described herein are of a confidential nature and shall not be
disclosed except to each party's respective Affiliates, consultants and
advisors, or as required by law, until such time as the parties make a public
announcement regarding the transactions in accordance with Section 11.12 hereof.
In connection with the negotiation of this Agreement and the preparation for the
consummation of the transactions contemplated hereby, each party acknowledges
that it has had and will have access to information relating to the other party
and its Affiliates. Each party shall treat such information as confidential,
preserve the confidentiality thereof and not duplicate or use such information,
except to Affiliates, advisors and consultants in connection with the
transactions contemplated hereby or by any Transaction Document. Seller, at a
time and in a manner which it reasonably determines and after prior notice to
and consultation with Buyer, may notify employees of Company and the
Subsidiaries of the fact of the subject transaction.

              11.17 No Publicity; Employee Letters. The parties agree not to
disclose the terms of this Agreement without the other party's prior written
consent, which may be withheld in the sole and absolute discretion of such
party, except for such disclosure as counsel for Buyer shall deem to be required
by SEC rules or applicable securities laws; provided, however, that any such
disclosure to be made by Buyer shall be subject to prior review and reasonable
approval of Seller (including, without limitation, prior review of SEC filings
and press releases regarding the transactions contemplated hereby). The parties
agree that such disclosure requirements will include a public filing by Buyer of
the Agreement and related description of the transactions contemplated hereby in
either a Form 8-K or Form 10-K and a concurrent news release (subject to prior
review and consent in accordance with this



                                      -50-
<PAGE>   52

Section 11.17). The parties agree to jointly prepare a letter to be delivered to
each of Company's employees with regard to the transactions contemplated hereby.

              11.18 Mutual Drafting. The parties hereto are sophisticated and
have been represented by lawyers throughout the transactions contemplated hereto
who have carefully negotiated the provisions hereof. As a consequence, the
parties do not intend that the presumptions of California Civil Code Section
1654 and similar laws or rules relating to the interpretation of contracts
against the drafter of any particular clause should be applied to this Agreement
or any Transaction Document and therefore waive their effects.

              11.19 Further Assurances. Each party hereto shall execute such
documents and other papers and take such further actions as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated hereby.

              11.20 Covenant. Any covenant, term or provision of this Agreement
or any Transaction Document, which in order to be effective must survive the
termination of this Agreement or such Transaction Document, shall survive any
such termination.

       12. DEFINITIONS

              12.1 Defined Terms. As used herein, the terms below shall have the
following meanings. Any of such terms, unless the context otherwise requires,
may be used in the singular or plural, depending upon the reference.

              "Action" means any action, suit, proceeding or investigation
(provided that such investigation is by a Governmental Authority).

              "Affiliate" has the meaning set forth in the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder.

              "Affiliated Group" means any Affiliated Group within the meaning
of IRC Section 1504, any group of corporations filing a combined report for
purposes of corporate franchise or corporate income tax, and any similar group
defined under a similar provision of state, local or foreign law.

              "Applicable Law" means, with respect to any Person, any domestic
or foreign, federal, state or local statute, law, ordinance, rule,
administrative interpretation, regulation, order, writ, injunction, directive,
judgment, decree or other requirement of any Governmental Authority (including
any Environmental Law) applicable to such Person or any of its Affiliates or
Plan Affiliates or any of their respective properties, assets, officers,
directors, employees, consultants or agents (in



                                      -51-
<PAGE>   53

connection with such officer's, director's, employee's, consultant's or agent's
activities on behalf of such Person or any of its Affiliates or Plan
Affiliates).

              "Asserted Liability" has the meaning set forth in Section 8.4
hereof.

              "Benefit Plan" means any plan, agreement, arrangement or
commitment (whether provided by insurance, self-insurance or otherwise) that is
an employment, consulting or deferred compensation agreement; or an executive
compensation, incentive, bonus, employee pension, profit-sharing, savings,
retirement, stock option, stock purchase or severance pay plan; or a life,
health, post-retirement benefit, worker's compensation, unemployment benefit,
disability or accident plan; or a holiday, vacation, leave of absence, Christmas
or other bonus practice; or expense reimbursement, automobile or other
transportation allowance; or other employee benefit plan, agreement, arrangement
or commitment, including, without limitation, any "employee benefit plan," as
defined in Section 3(3) of ERISA, maintained by Company or with respect to which
Company has or in the future may have, any contribution or other liability or
obligation with respect to any current or former employees of Company, or their
beneficiaries.

              "Buyer" has the meaning set forth in the preamble hereof.

              "Claims Notice" has the meaning set forth in Section 8.4 hereof.

              "Closing" or "Closing Date" have the meanings set forth in Section
1.5 hereof.

              "Company" has the meaning set forth in the preamble hereof.

              "Company Financial Statements" has the meaning set forth in
Section 2.8 hereof.

              "Company Intellectual Property" shall mean any Intellectual
Property that is (i) owned by, (ii) licensed to, or (iii) was developed or
created by or for Company.

              "Contracts" has the meaning set forth in Section 2.13 hereof.

              "Disclosure Schedule" means a schedule prepared and delivered by
Seller to Buyer pursuant to this Agreement that sets forth the exceptions to the
representations and warranties of Seller contained herein. Unless the context
clearly indicates otherwise, each reference herein to any numbered schedule is a
reference to that numbered schedule which is included in the Disclosure
Schedule.

              "Earnout" has the meaning set forth in Section 1.2 hereof.



                                      -52-
<PAGE>   54

              "Environmental Condition" means the introduction into the
environment of any pollution, including without limitation any contaminant,
irritant or pollutant or other Hazardous Substance (whether or not upon the
Facilities or other property of the Company or a Subsidiary and whether or not
such pollution constituted at the time thereof a violation of any Environmental
Law as a result of any Release of any kind whatsoever of any Hazardous
Substance) as a result of which Company has or may become liable to any person
or by reason of which the Facilities may suffer or be subjected to any lien.

              "Environmental Laws" has the meaning set forth in Section 2.15(b)
hereof.

              "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.

              "Facilities" means the Owned Property and the Leased Property.

              "Former Facility" means each plant, office, manufacturing
facility, store, warehouse, improvement, administrative building and all real
property and related facilities which was owned, leased or operated by Company
at any time prior to the date hereof, but excluding any Facilities.

              "FTC" means the Federal Trade Commission.

              "GAAP" means U.S. generally accepted accounting principles.

              "Governmental Authority" means any foreign, domestic, federal,
territorial, state or local governmental authority, quasi-governmental authority
or instrumentality, or any regulatory, administrative or other agency, or any
political or other subdivision, department or branch of any of the foregoing.

              "Hazardous Substance" shall mean any quantity of asbestos in any
form, urea formaldehyde, PCB's, radon gas, crude oil or any fraction thereof,
all forms of natural gas, petroleum products or by-products, any radioactive
substance, any toxic, infectious, reactive, corrosive, ignitable or flammable
chemical or chemical compound and any other hazardous substance, material or
waste (as defined in or for purposes of any Environmental Law), whether solid,
liquid or gas.

              "Holding" means the "common parent" of the Seller Group as that
term is used in the Treasury Regulations promulgated under IRC Section 1502.

              "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the rules and regulations promulgated thereunder.



                                      -53-
<PAGE>   55

              "Income Tax" means any federal, state, local or foreign Tax
imposed on or measured by gross or net income or a taxable base in the nature of
gross or net income (including franchise, alternative, minimum, alternative
minimum, add-on, surcharge and other similar Taxes), any Tax imposed in whole or
in part in lieu of any of the foregoing, and in each instance any interest
(including interest on deferred tax liability under Section 453A(c) of the IRC
and "look-back" interest under Section 460 of the IRC and similar amounts of
interest imposed by the IRC), penalties, additions to tax or similar charges
attributable to such Tax.

              "Income Tax Return" means any Tax Return that relates to Income
Tax.

              "Indemnitee" has the meaning set forth in Section 8.4 hereof

              "Indemnitor" has the meaning set forth in Section 8.4 hereof

              "Initial Purchase Price" has the meaning set forth in Section 1.2
hereof.

              "Intellectual Property" means all trademarks and trademark rights,
trade names and trade name rights, service marks and service mark rights,
service names and service name rights, patents and patent rights, utility models
and utility model rights, copyrights, mask work rights, brand names, trade
dress, product designs, product packaging, business and product names, logos,
slogans, rights of publicity, trade secrets, inventions (whether patentable or
not), invention disclosures, improvements, processes, formulae, industrial
models, processes, designs, specifications, technology, methodologies, computer
software (including all source code and object code), firmware, development
tools, flow charts, annotations, all Web addresses, sites and domain names, all
data bases and data collections and all rights therein, any other confidential
and proprietary right or information, whether or not subject to statutory
registration, and all related technical information, manufacturing, engineering
and technical drawings, know-how and all pending applications for and
registrations of patents, utility models, trademarks, service marks and
copyrights, and the right to sue for past infringement, if any, in connection
with any of the foregoing, and all documents, disks, records, files and other
media on which any of the foregoing is stored.

              "IRC" means the Internal Revenue Code of 1986, as amended.

              "Justice" means the Antitrust Division of the Department of
Justice.

              "Lease" has the meaning set forth in Section 2.14 hereof.

              "Leased Property" has the meaning set forth in Section 2.14
hereof.



                                      -54-
<PAGE>   56

              "Liability" or "Liabilities" means, with respect to any Person,
any liability or obligation of such Person of any kind, character or
description, whether known or unknown, absolute, contingent or threatened,
secured or unsecured, joint or several, due or to become due, vested or
unvested, executory, determined, determinable or otherwise and whether or not
the same is required to be accrued on the financial statements of such Person.

              "Liens" means any mortgage, pledge, assessment, security interest,
lease, lien, easement, license, covenant, condition, restriction, adverse claim,
levy, charge, option, equity, adverse claim or restriction or other encumbrance
of any kind, or any contract to give any of the foregoing, except for any
restrictions on transfer generally arising under any applicable federal or state
securities law.

              "Losses" means all losses, costs, claims, liabilities, damages,
lawsuits, demands and expenses (including attorney's fees), and all amounts paid
in the investigation, defense or settlement of any of the foregoing; provided,
however, that Losses shall not mean lost profits. Without limiting the
foregoing, "Losses" is not limited to matters asserted by third parties, but
includes Losses incurred or sustained in the absence of third party claims.

              "Multiemployer Plan" has the meaning set forth in Section 2.20
hereof.

              "Owned Property" has the meaning set forth in Section 2.14 hereof.

              "Pension Plan" has the meaning set forth in Section 2.20 hereof.

              "Permits" means all licenses, permits, franchises, approvals,
authorizations, consents or orders of, or filings with, any governmental
authority, whether foreign, federal, state or local, or any other person,
necessary or desirable for the past, present or anticipated conduct of, or
relating to the operation of the business of, Company and any Subsidiary.

              "Person" means an individual, corporation, partnership,
association, trust, estate or other entity or organization, including a
Governmental Authority.

              "Plan Affiliate" means, with respect to any Person, any employee
benefit plan or arrangement sponsored by, maintained by or contributed to by
such Person, and with respect to any employee benefit plan or arrangement, any
Person sponsoring, maintaining or contributing to such plan or arrangement.

              "Purchase Price" has the meaning set forth in Section 1.2 hereof.

              "Recent Balance Sheet" has the meaning set forth in Section 2.8
hereof.



                                      -55-
<PAGE>   57

              "Release" shall mean and include any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping, migrating within the environment or disposing into the environment or
the workplace of any Hazardous Substance, and otherwise as defined in any
Environmental Law.

              "Representative" means any officer, director, principal, attorney,
agent, employee or representative.

              "SEC" means the Securities and Exchange Commission.

              "Securities Act" means the Securities Act of 1933, as amended.

              "Seller" has the meaning set forth in the preamble hereof.

              "Shares" has the meaning set forth in Recital A hereof.

              "Subsidiary" means (i) any corporation in an unbroken chain of
corporations beginning with Seller if each of the corporations other than the
last corporation in the unbroken chain then owns any shares of the capital stock
in one of the other corporations in such chain, (ii) any partnership in which
Company is a general partner, or (iii) any partnership in which Company or any
Subsidiary is a general or a limited partner.

              "Tax" or "Taxes" means (whether or not disputed) taxes of any
kind, levies or other like assessments, customs, duties, imposts, charges or
fees, including, without limitation, Income Taxes, gross receipts, ad valorem,
value added, excise, real property, personal property, occupancy, asset, sales,
use, license, payroll, transaction, capital, capital stock, net worth,
estimated, withholding, employment, social security, unemployment, unemployment
compensation, workers' compensation, disability, utility, severance, production,
environmental, energy, business, occupation, mercantile, franchise, premium,
profits, windfall profits, documentary, stamp, registration, transfer and gains
taxes, toll charges (including toll charges under Sections 367 and 1492 of the
IRC), or other taxes of any kind whatsoever, imposed by or payable to the United
States, or any state, country, local or foreign government or subdivision,
instrumentality, authority or agency thereof or under any treaty, convention or
compact between or among any of them, and in each instance such term shall
include any interest (including interest on deferred tax liability under Section
453A(c) of the IRC and "look-back" interest under Section 460 of the IRC and
similar amounts of interest imposed by the IRC), penalties, additions to tax or
similar charges imposed in lieu of a Tax or attributable to any Tax.

              "Tax Return or Return" means any return, declaration, report,
claim for refund, information return or statement that relates to Taxes,
including any schedule or attachment thereto and any amendment thereof.



                                      -56-
<PAGE>   58

              "Treasury Regulation" means any final, proposed or temporary
regulations promulgated under the IRC.

              "Transaction Document" means, when used in reference to a
particular Person, any agreement, document or instrument to be executed by such
Person in connection with the transactions contemplated hereby.

              "WARN Act" is the Worker Adjustment and Retraining Notification
Act (29 U.S.C. Sections 2101, et seq.).

              "Welfare Plan" has the meaning set forth in Section 2.20 hereof.



                                      -57-
<PAGE>   59

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

                                   "SELLER"

                                   LITE-ON POWER SEMICONDUCTOR CORP.,
                                   a Taiwan corporation


                                   By  /s/ M.K. Lu
                                        M.K. Lu, President

                                   "BUYER"

                                   DIODES INCORPORATED,
                                   a Delaware corporation


                                   By  /s/ C.H. Chen
                                        C.H. Chen, President

                                   With respect only to Articles IV, VII, IX, X
                                   and XI:

                                   "COMPANY"

                                   FABTECH, INC.,
                                   a Delaware corporation


                                   By  /s/ Walter Buchanan
                                        Walter Buchanan, President



                                      -58-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.31
<SEQUENCE>3
<FILENAME>a68061ex10-31.txt
<DESCRIPTION>EXHIBIT 10.31
<TEXT>

<PAGE>   1
                                  EXHIBIT 10.31

                            Volume Purchase Agreement
                Lite-On Power Semiconductor Corp. / FabTech, Inc.

        This agreement ("Agreement") is made and entered into the 25th day of
        October, 2000, by and between Lite-On Power Semiconductor Corp. with
        it's principal place of business at 28-1 Wu Shin St. Ta Wu Lung, Keelung
        Taiwan, R.O.C. (herein referred to as "LPSC"), and FabTech, Inc., with
        it's principal place of business at 777 N.W. Blue Parkway, Lee's Summit,
        Missouri, 64086 (herein referred to as "FabTech").

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 FabTech will sell to LPSC, and LPSC will purchase from
         FabTech, Discrete Schottky Semiconductor die in wafer form. This
         agreement does not constitute an order. LPSC Purchase Orders ("PO")
         (per paragraph 5) will be required to purchase any Products from
         FabTech.

2.   DEFINITIONS

     2.1.     Wafer(s): Completed Discrete Schottky Semiconductor Products
              through Wafer Probe electrical testing.

     2.2.     Product(s): All Schottky Barrier Diodes manufactured by FabTech
              and purchased as die in wafer form as set forth on Attachment 1.

     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 2.3 above.

     2.5.     Wafer 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 are set forth on
              Attachment 1.

     2.7.     Change in the Consumer Price Index: A percentage equal to the
              overall percentage change in the Consumer Price Index-- All Urban
              Consumers for the geographic area containing Kansas City, Missouri
              published by or acknowledged by the U.S. Department of Labor (or,
              if unavailable, a successor



                                      -59-
<PAGE>   2
              or comparable index in the Lessor's reasonable discretion) from
              and after the year 2000.

3.   TERM

     3.1.     The term of this agreement shall be effective as of the date of
              signature and continue for a period of four years from that date
              (the "Initial Term") unless terminated earlier as otherwise
              provided herein. After the Initial Term, the Agreement shall be
              automatically renewed for additional two-year periods on a
              period-to-period basis (each a "Renewal Term"). Either PARTY may
              terminate this Agreement by providing written notice to the other
              PARTY of it's intent to cancel at least ninety (90) days prior to
              the start of any Renewal Term.

     3.2.     Except as otherwise provided in this Agreement, upon termination
              of this Agreement the parties shall complete performance of all
              POs issued, released and accepted by FabTech prior to the
              effective date of termination that require delivery within the six
              (6) month period, maximum, from the effective date of termination.
              Any portion of an accepted and acknowledged PO outstanding on the
              effective date of termination that does not require delivery
              within such time shall be void. Any portion of an accepted and
              acknowledged PO outstanding on the effective date of termination
              that requests delivery within such six-month period shall remain
              in effect, subject to the terms and conditions herein.

4.   PURCHASE RIGHTS AND OBLIGATIONS

     4.1.     During the Initial Term of this Agreement, LPSC has the right to
              purchase, and FabTech, upon receipt of a duly completed PO, shall
              sell to LPSC up to the Maximum number of Wafers per month during
              the calendar quarter set forth on Attachment 2 attached hereto and
              identified on the table titled Monthly Wafer Maximum/Minimum Order
              by LPSC.

     4.2.     During the Initial Term of this Agreement, LPSC shall purchase
              from FabTech at least the number of Wafers per month during the
              calendar quarter set forth on Attachment 2 attached hereto and
              identified on the table titled Monthly Wafer Maximum/ Minimum
              Order by LPSC, and as specified in the row of the table labeled as
              "Minimum". In any event, LPSC shall purchase from FabTech at least
              90% of the total Wafers purchased by LPSC from all parties
              including FabTech, providing FabTech is competitive on Product
              pricing and Product quality.

     4.3.     The parties presently anticipate that LPSC shall purchase Wafers
              in the proportions set forth on Attachment 2 in the table titled
              LPSC Sky Wafers Volume by Calendar Quarter.



                                      -60-
<PAGE>   3
     4.4.     Ninety days prior to the beginning of each Renewal Term, the
              parties shall negotiate in good faith to determine the minimum and
              maximum purchase quantities applicable during such Renewal Term.

5.   FORECASTING AND PURCHASE ORDER PLACEMENT

     5.1.     LPSC will provide a six (6) month rolling forecast of actual and
              planned purchases to FabTech on or before the 25th day of each
              month (the "Forecast Date"). The forecast shall be provided in die
              quantity by Device Type. The current month is noted as Month 0 in
              the tables and examples herein.

     5.2.     LPSC shall issue to FabTech at firm Purchase Orders each month as
              follows:

              5.2.1. A Purchase Order shall be issued for purchase of remaining
                     quantities for the second month forward (Month +2) not
                     placed in the preceding month. For instance, on the June
                     25th forecast date, LPSC would place a Purchase Order for
                     50% of the orders for August. The amount ordered for August
                     could increase the total volume forecast for August (in the
                     May Forecast) by 20%, but will not be less than the volume
                     forecast for August (in the May forecast).

              5.2.2. A Purchase Order shall be issued for purchase of at least
                     50% of the forecast quantity in the third month forward
                     from the current month (Month +3). For instance, on the
                     June 25th forecast date, LPSC would place a Purchase Order
                     for 50% of the orders for September.

     5.3.     FabTech will show acceptance of each PO by transmitting to LPSC a
              Sales Order Acknowledgement for each PO accepted by FabTech.

     5.3      Month-to-month changes from the previous forecast will be limited
              as follows (Month 0 is the current month, containing the Forecast
              Date). Variations above or below contract limit quantities may be
              accepted by FabTech on a "commercial best effort" basis:



                                      -61-
<PAGE>   4
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
  PRESENT       QUANTITY     PART TYPE
 FORECAST       CHANGES*      CHANGES*                    DELIVERIES & SHIPMENTS
- ------------------------------------------------------------------------------------------------------
<S>             <C>           <C>          <C>
                                           Already committed and mostly shipped.  This forecast and PO
Month 0           None          None       cycle starts on the 25th of this month.
- ------------------------------------------------------------------------------------------------------
Month +1          None          None       Already committed.
- ------------------------------------------------------------------------------------------------------
                                           50% committed via P.O. last month.  New PO for 50%
                                           (or more) on this month.  Volume for month can be
Month +2        +20%/-0%        50%        increased by 20%
- ------------------------------------------------------------------------------------------------------
                                           New PO for 50% of committed volume for this month.  The
Month +3        +/- 20%         50%        remainder will still be on the forecast until next month.
- ------------------------------------------------------------------------------------------------------
                Contract      Contract
Month +4         Limits        Limits      For substrate purchases
- ------------------------------------------------------------------------------------------------------
                Contract      Contract
Month +5         Limits        Limits      Information Only
- ------------------------------------------------------------------------------------------------------
                Contract      Contract
Month +6         Limits        Limits      Information Only
- ------------------------------------------------------------------------------------------------------
</TABLE>


6.   PRICE AND PAYMENT

     6.1.     Prices currently in effect will continue to be in effect through
              March, 2001, excepting specific price modifications as allowed
              herein.

     6.2.     New Device Types will be added from time-to-time and prices will
              be negotiated at the time of initial offering for sale by FabTech.

     6.3.     The prices at which FabTech agrees to sell the Products to LPSC
              pursuant to this Agreement are inclusive of epitaxial substrate
              costs, wafer processing costs, electrical testing per FabTech
              standard procedures, packaging costs per standard FabTech
              procedures, and any applicable United States sales taxes.

     6.4.     Delivery of the Products will be F.O.B. FabTech's facility in
              Lee's Summit, MO (Origin). It shall be the responsibility of LPSC,
              at its own expense, to insure any shipments against damage to or
              loss of the Products. Unless otherwise specified by LPSC,
              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 standard
              practices. Any special packaging requested by LPSC shall be made
              at LPSC expense.

     6.5.     All prices may be subject to re-negotiation every year, and will
              become effective on April 1 of each year.

     6.6.     LPSC shall make payment in full for any and all FabTech invoices
              within forty-five days of the last day of the month in which the
              Product is shipped and invoiced. In the event LPSC fails to comply
              with this provision, FabTech reserves the right to suspend or
              delay shipments, or alter payment terms. A finance charge equal to
              the lesser of 1.0 percent per month (12 percent APR) or the
              highest rate permitted by law will be assessed on all past due
              accounts. In



                                      -62-
<PAGE>   5
              any event, exercising this provision shall not be considered a
              breach of this Agreement, nor in any way alter LPSC
              responsibilities to abide by the terms of this Agreement.

     6.7.     At all times, LPSC will receive the best price offered by FabTech
              to commercial accounts purchasing comparable wafer quantities,
              excepting special discounts or other short-term promotional
              prices. In the event FabTech offers special discounts or other
              short-term promotional pricing for specific Products, LPSC shall
              have first and equal opportunity to purchase FabTech Products
              under such promotions and at the promotional prices.

              6.7.1. LPSC represents and warrants that FabTech Products
                     (including wafers) purchased under this agreement are for
                     assembly by LPSC into a higher level of assembly, and are
                     expressly NOT for resale as die in wafer form or any other
                     form. LPSC agrees that it shall not resell Products
                     purchased from FabTech, in wafer or die form, without prior
                     written consent by FabTech, which shall not be unreasonably
                     withheld. In addition to any other remedies available to
                     FabTech, breach of this Section 6.7 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 LPSC customer requests. Non-recurring
              expense ("NRE") charges may be assessed by FabTech for development
              of products to LPSC specifications. Payment of NRE charges by LPSC
              to FabTech shall not convey to LPSC any ownership interest in or
              any license or right to produce existing or developed FabTech
              products or processes.

8.   WARRANTIES

     8.1.     All Products sold by FabTech under this Agreement shall have Wafer
              Lot traceability using a lot number assigned by FabTech. Any and
              all communications between LPSC and FabTech concerning warranty
              issues shall reference this lot number.

     8.2.     Any deviations from accepted specifications must be approved in
              writing by LPSC and FabTech. Products shipped by FabTech to LPSC
              shall be electrically tested per specifications in effect at time
              of purchase.

     8.3.     LPSC shall promptly inspect FabTech Schottky Products upon
              delivery of the Products to a designated LPSC facility. LPSC shall
              complete all inspections within 30 days of delivery.



                                      -63-
<PAGE>   6
     8.4.     If any Schottky Product is claimed to be defective by LPSC, LPSC
              may, before the end of the inspection period, submit a Corrective
              Action Request ("CAR") to FabTech for FabTech evaluation and/or
              analysis of the claimed defective product. Failure by LPSC to
              deliver a CAR to FabTech within thirty days after delivery of the
              Products shall constitute acceptance of the Products by LPSC.

     8.5.     Upon receipt of a CAR tracking number, LPSC shall promptly return
              SAMPLES exhibiting the claimed defect to FabTech 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 FabTech
              rejecting the return shipment.

     8.6.     Upon completion of FabTech analysis, FabTech will judge the claim
              as either Valid or Invalid. If FabTech agrees the defect as
              claimed is Valid, a Returned Material Authorization ("RMA") number
              will be provided by FabTech 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 FabTech rejecting the return
              shipment.

     8.7.     If FabTech determines that the defect as claimed is Invalid, then
              LPSC 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, FabTech will
              issue a Credit Memo to LPSC for adjustment of the amount invoiced
              to LPSC.

     8.9.     FabTech's indemnification on warranty of FabTech products shall be
              strictly limited as set forth in Article 10 below. 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 therof which has been subject to misuse,
              negligence or accident or that has been altered by anyone other
              than FabTech nor to normal deterioration of any Product or part
              thereof due to wear, usage or exposure. In addition, FabTech is
              not responsible for damages of whatever nature resulting form
              improper installation or operations beyond design capability,
              whether intentional or accidental.

     8.11.    EXCEPT AS SPECIFICALLY STATED IN THIS SECTION, FABTECH 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.



                                      -64-
<PAGE>   7
9.   PRODUCT CHANGES AND APPROVALS

     9.1.     After FabTech Products sold under this Agreement have been
              qualified and released (in accordance with the parties' course of
              performance) by both LPSC and FabTech, all major manufacturing
              processes shall remain unchanged unless both parties agree via the
              procedure below to modify said process.

              9.1.1. FabTech will provide LPSC with written notice of any
                     proposed major process change, accompanied by appropriate
                     data to support the change.

              9.1.2. LPSC will have fourteen (14) working days to accept or
                     reject the proposed change in writing. In the event LPSC
                     fails to reply within the fourteen day period, the proposed
                     change will be considered as accepted by LPSC and may be
                     fully implemented by FabTech.

              9.1.3. LPSC shall have the right to require re-qualification of
                     FabTech Product where there has been a major process
                     change. Upon LPSC acceptance of the proposed change, the
                     newer process shall be deemed qualified and may be fully
                     implemented by FabTech. FabTech shall, through lot
                     traceability, be able to identify Product processed under
                     the both old and new processes.

              9.1.4. If LPSC rejects a proposed major process change, LPSC shall
                     identify to FabTech the reason for such rejection of the
                     proposed change. FabTech shall have the option, in
                     FabTech's sole discretion, to (a) continue to manufacture
                     for LPSC hereunder using the previously qualified process;
                     (b) eliminate such product, offering LPSC the opportunity
                     to place a last-time buy; or (c) a combination of (a) and
                     (b) or other alternatives as may be proposed by FabTech.

     9.2.     LPSC may, at any time, submit written requests for change to
              FabTech Products regarding specifications, designs, drawings,
              features, or other characteristics of Products covered by this
              Agreement. FabTech may, at its sole discretion, notify LPSC in
              writing that implementation of said change(s) renders FabTech
              unable to comply with its obligations hereunder. Both parties
              hereby agree that any and all change requests shall be acted upon
              by FabTech 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.

              9.2.1. FabTech will reply to all change requests submitted by LPSC
                     in writing, indicating FabTech's response to the requested
                     change. If the requested change is accepted by FabTech in
                     writing, such change is assumed to be a written amendment
                     to this Agreement, executed by both parties.

     9.3.     Any Changes to FabTech Products made in compliance with this
              Agreement shall not relieve FabTech of any of FabTech's
              obligations hereunder unless



                                      -65-
<PAGE>   8
              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.    FabTech hereby agrees to indemnify LPSC 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 FabTech that is the result of negligence of FabTech.

     10.2.    LPSC shall at all times defend, indemnify and hold harmless
              FabTech, 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 LPSC or of any personnel employed or otherwise
              engaged by the LPSC, including (i) injury and/or death to persons
              including LPSC'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 LPSC using the Products
              (unless the alleged infringement or violation was directed by
              FabTech). FabTech shall provide LPSC (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 LPSC's expense) in the
              defense or settlement thereof. Notwithstanding the foregoing,
              FabTech may be represented in, but may not control, such action,
              suit, or proceeding at its own expense and by its own counsel.

     10.3.    FabTech shall not in any circumstances be liable to LPSC for
              anything whatsoever other than the direct loss to LPSC (excluding
              any loss of use, revenue or profit by LPSC or the amount of
              damages awarded against LPSC in favor of, or monies paid by LPSC
              by way of settlement to, any third party and any costs or expenses
              of LPSC in connection with the same) due to the failure of the
              Products or defective Products.

     10.4.    At all times and under all conditions, FabTech's liability for
              direct loss or damages is strictly limited to the value of the
              product shipped and invoiced, and at no time shall FabTech's
              liability exceed the value of the original amount invoiced by
              FabTech or paid by LPSC, 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



                                      -66-
<PAGE>   9
              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 DAMAGES WAS
              DISCLOSED TO OR REASONABLY COULD HAVE BEEN FORESEEN BY SUCH PARTY.

     10.6.    No action for breach of this Agreement may be commenced more than
              one 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.

     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



                                      -67-
<PAGE>   10
              assignment for the benefit of its creditors. Such proceedings
              shall be conducted in the English language.

14.  PARAGRAPH TITLES

     The paragraph tittles 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.    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 30 days, all disputes shall be
              submitted to arbitration in Kansas City, Missouri before and under
              the rules of the American Arbitration Association. The
              arbitrator's decision shall be written and shall be final,
              conclusive, and binding, and judgment on any arbitration award or
              decision may be entered in any court of competent jurisdiction.

     15.2.    The parties agree that after arbitration the State of Missouri
              shall have jurisdiction to determine the validity, construction
              and performance of this Agreement and the legal relations between
              the parties. All disputes are subject to venue of the State and
              Federal courts in Missouri, and the parties consent to the
              personal and exclusive jurisdiction and venue of those courts.

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.

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 mail (registered or certified), postage prepaid.



                                      -68-
<PAGE>   11
19.  PUBLICITY

     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.


SIGNED,

LITE-ON POWER SEMICONDUCTOR CORP.      FABTECH, INC.

BY:  /S/ M.K. LU                       /S/ WALTER BUCHANAN
M.K. Lu, President                     Walter Buchanan, President



                                      -69-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.32
<SEQUENCE>4
<FILENAME>a68061ex10-32.txt
<DESCRIPTION>EXHIBIT 10.32
<TEXT>

<PAGE>   1

                                  EXHIBIT 10.32

                                CREDIT AGREEMENT

        THIS CREDIT AGREEMENT (this "Agreement") is made and entered into as of
December 1, 2000, by and between DIODES INCORPORATED, a Delaware corporation
("Borrower"), with its principal place of business located at 3050 East
Hillcrest Drive, Westlake Village, California 91362-3154, and UNION BANK OF
CALIFORNIA, N.A., a national banking association ("Bank"), with an office
located at 5855 Topanga Canyon Boulevard, Suite 200, Woodland Hills, California
91367.

                                    RECITALS:

        A. Borrower and Bank previously entered into that certain Business Loan
Agreement dated as of June 30, 2000 (the "Prior Agreement"), pursuant to which
Bank agreed to (i) make available to Borrower a revolving line of credit,
providing for revolving loans by Bank to Borrower in the aggregate principal
amount at any one time outstanding not to exceed Nine Million Dollars
($9,000,000), (ii) make various term loans to Borrower in the respective
original principal amounts set forth in Schedule 2.3 annexed hereto, and (iii)
make available to Borrower a non-revolving line of credit, providing for
non-revolving loans by Bank to Borrower in the aggregate principal amount not to
exceed Ten Million Dollars ($10,000,000).

        B. Pursuant to the Prior Agreement, Borrower was permitted to advance
the proceeds of the non-revolving loans made by Bank to Borrower under the
non-revolving line of credit described in clause (iii) of Recital A to Shanghai
Kaihong Electronics, Co., Ltd., a joint venture organized and existing under the
laws of The People's Republic of China ("SKE"). Borrower holds a ninety-five
percent (95%) joint venture interest in SKE.

        C. Pursuant to the terms and conditions of that certain Stock Purchase
Agreement dated as of November 28, 2000 (as in effect on the date hereof, and
including all schedules and exhibits thereto, the "Stock Purchase Agreement"),
by and among Borrower, as buyer, Lite-On Power Semiconductor Corp., a Taiwan
corporation, as seller ("Seller"), and, with respect only to certain provisions
of the Stock Purchase Agreement, FabTech, Inc., a Delaware corporation
("FabTech"), Seller has agreed to sell to Borrower, and Borrower has agreed to
purchase from Seller, at the Closing (as such term is defined in the Stock
Purchase Agreement), all of the issued and outstanding shares of the capital
stock of FabTech, consisting of 4,000,000 shares of Series A Convertible
Preferred Stock and 1,000 shares of common stock, all as more particularly
described in the Stock Purchase Agreement (the "Stock Purchase").



                                      -70-
<PAGE>   2

After giving effect to the Stock Purchase, FabTech shall be a wholly-owned
subsidiary of Borrower.

        D. Borrower has requested that Bank agree to (i) continue to make
available to Borrower the revolving line of credit described in clause (i) of
Recital A hereof, up to Four Million Dollars ($4,000,000) of the proceeds of
which shall be used by Borrower to finance the Stock Purchase and the remaining
proceeds of which shall be used by Borrower for its general working capital
purposes, (ii) continue to make available to Borrower the term loans described
in clause (ii) of Recital A hereof, (iii) make a new acquisition term loan to
Borrower in the principal sum of Ten Million Dollars ($10,000,000), the proceeds
of which shall be used by Borrower to consummate the Stock Purchase, which new
acquisition term loan shall replace the non-revolving line of credit described
in clause (iii) of Recital A hereof, and (iv) amend the terms and conditions of
the Prior Agreement in certain respects. Bank is willing to continue to make
available to Borrower such revolving line of credit, to continue to make
available to Borrower such term loans, to make such new acquisition term loan to
Borrower and to so amend the terms and conditions of the Prior Agreement,
subject, however, to the terms and conditions set forth hereinbelow.


                                   AGREEMENT:

        In consideration of the foregoing recitals and of the mutual covenants,
conditions and provisions hereinafter set forth, Borrower and Bank hereby agree
to amend and restate the Prior Agreement as follows, which covenants, conditions
and provisions shall amend, restate and supersede the terms and conditions of
the Prior Agreement.

SECTION 1.  DEFINITIONS

        As used herein, initially capitalized terms shall have the respective
meanings set forth below or set forth in the Section or subsection defining such
terms:

"ACQUISITION LOAN COMMITMENT" shall have the meaning assigned to that term in
Section 2.2 hereof.

"ACQUISITION NOTE" shall have the meaning assigned to that term in Section 2.2
hereof.

"AFFILIATE" shall mean, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially or as a trustee,
guardian or other fiduciary, ten percent (10%) or more of the stock having
ordinary voting power in the election of directors of such Person, (b) each
Person that controls, is controlled by or is



                                      -71-
<PAGE>   3

under common control with such Person or any Affiliate of such Person and (c)
each of such Person's officers, directors, joint venturers, members and
partners; provided, however, that in no case shall Bank be deemed to be an
Affiliate of Borrower for purposes of this Agreement. For the purpose of this
definition, "control" of a Person means the ability, directly or indirectly, to
direct or cause the direction of its management or policies, whether through the
ownership of voting securities, by contract or otherwise.

"ALTERNATIVE DISPUTE RESOLUTION AGREEMENTS" and "ALTERNATIVE DISPUTE RESOLUTION
Agreement" shall mean, respectively, (a) the Alternative Dispute Resolution
Agreements, each on Bank's standard form therefor, duly executed by Borrower,
Guarantor and Subordinating Creditor, respectively, in favor of and with Bank,
and (b) any one of such Alternative Dispute Resolution Agreements.

"BANK EXPENSES" shall mean (a) with respect to the costs and expenses paid or
advanced by Bank on the account of Borrower prior to the date of this Agreement,
the sum of Thirty Thousand Dollars ($30,000) only, and (b) from and after the
date of this Agreement: (i) all reasonable costs and expenses paid or advanced
by Bank which are required to be paid by Borrower or any of its Subsidiaries
under this Agreement or any of the other Loan Documents; (ii) reasonable
expenses incurred by Bank in auditing or examining the books and records of
Borrower or any of its Subsidiaries and the Collateral following the occurrence
and continuation of an Event of Default; (iii) taxes and insurance premiums of
every nature and kind of Borrower or any of its Subsidiaries paid by Bank; (iv)
appraisal, filing, recording, documentation, publication and search fees paid or
incurred by Bank on behalf of Borrower or any of its Subsidiaries to correct any
default or enforce any provision of this Agreement or any other Loan Document,
or, if an Event of Default has occurred and is continuing, in gaining possession
of, maintaining, handling, preserving, storing, shipping, appraising, selling,
preparing for sale and/or advertising to sell the Collateral, whether or not a
sale is consummated; (v) costs and expenses of any suit or arbitration
proceeding incurred by Bank in enforcing or defending this Agreement or any
other Loan Document, or any portion thereof, and (vi) reasonable attorneys' fees
and expenses incurred by Bank in amending, terminating, enforcing, defending or
concerning this Agreement or any other Loan Document, or any portion thereof,
whether or not suit is brought, such attorneys' fees to include the reasonable
estimate of the allocated costs and expenses of in-house legal counsel and
staff. All Bank Expenses paid or incurred by Bank shall be considered to be, and
shall become a part of the Obligations and be secured by the Collateral, are
payable upon demand, and if not reimbursed, shall immediately thereafter bear
interest, together with all other amounts to be paid by Borrower pursuant hereto
at the default rate provided for herein or in the Notes.



                                      -72-
<PAGE>   4

"BORROWER SECURITY AGREEMENT" shall mean that certain Security Agreement dated
July 19, 1996, duly executed by Borrower in favor of Bank pursuant to the terms
and conditions of the Prior Agreement.

"BUSINESS DAY" shall mean a day other than a Saturday, a Sunday or a day on
which commercial banks in the State of California are authorized or required by
law to close.

"CAPITAL EXPENDITURES" shall mean all payments due (whether or not paid) during
a fiscal period of Borrower and its Subsidiaries in respect of the cost of any
fixed asset or improvement, or any replacement, substitution or addition thereto
and which have a useful life of more than one (1) year, including without
limitation those arising in connection with the direct or indirect acquisition
of such assets by way of increased product or service charges or offset items or
in connection with capital leases.

"CAPITAL LEASE OBLIGATIONS" shall mean, for any Person, all obligations of such
Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) property to the extent such obligations are required
to be classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP and, for purposes of this Agreement, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP.

"CASH" shall mean, when used in connection with any Person, all monetary and
non-monetary items owned by such Person that are treated as cash in accordance
with GAAP, consistently applied.

"COLLATERAL" shall mean the security provided by Borrower and Guarantor pursuant
to Sections 3.1 and 3.2 hereof.

"DEBT SERVICE", as of any date of calculation, shall mean the sum, without
duplication, of (a) the amount of all scheduled principal payments in respect of
Indebtedness of Borrower and its Subsidiaries during the four (4) consecutive
fiscal quarters ended on that date, plus (b) interest expense of Borrower and
its Subsidiaries paid or payable during such fiscal period plus (c) the
aggregate amount of dividends declared or paid by Borrower and its Subsidiaries
during such fiscal period plus (d) the aggregate amount paid by Borrower and its
Subsidiaries to their shareholders in respect of treasury stock during such
fiscal period.

"DISPOSITION" shall mean the sale, transfer or other disposition in any single
transaction or series of related transactions of any asset, or group of related
assets, of Borrower or any of its Subsidiaries (a) which asset or assets
constitute a line of business or substantially all of the assets of Borrower or
such Subsidiary, or (b) the aggregate amount of the Net Cash Sales Proceeds of
such assets is more than Five



                                      -73-
<PAGE>   5

Hundred Thousand Dollars ($500,000), other than (i) inventory or other assets
sold or otherwise disposed of in the ordinary course of business of Borrower or
such Subsidiary, (ii) equipment sold or otherwise disposed of where
substantially similar equipment in replacement thereof has theretofore been
acquired, or thereafter within ninety (90) days is acquired, by Borrower or such
Subsidiary and (iii) obsolete assets no longer useful in the business of
Borrower or any of its Subsidiaries, whose carrying value on the books of
Borrower or such Subsidiary is zero or de minimus.

"EBITDA" shall mean, with respect to any fiscal period of Borrower and its
Subsidiaries, the sum of (a) the net income of Borrower and its Subsidiaries for
such fiscal period, plus (b) any non-operating non-recurring loss reflected in
such net income, minus (c) any non-operating non-recurring gain reflected in
such net income, plus (d) interest expense of Borrower and its Subsidiaries for
such fiscal period, plus (e) the aggregate amount of federal and state taxes on
or measured by income of Borrower and its Subsidiaries for that fiscal period
(whether or not payable during such fiscal period), minus (f) the aggregate
amount of federal and state credits against taxes on or measured by income of
Borrower and its Subsidiaries for that fiscal period (whether or not usable
during that fiscal period), plus (g) depreciation, amortization and all other
non-cash expenses of Borrower and its Subsidiaries for that fiscal period, in
each case as determined in accordance with GAAP.

"EXCESS CASH FLOW" shall mean, for any fiscal period, the difference of (a) the
EBITDA of Borrower and its Subsidiaries for such fiscal period less (b) the sum
of (i) interest paid during such fiscal period plus (ii) taxes paid in cash by
Borrower and its Subsidiaries during such fiscal period plus (iii) the current
portion of the long-term Indebtedness of Borrower and its Subsidiaries paid
during such fiscal period plus (iv) non-financed Capital Expenditures of
Borrower and its Subsidiaries paid during such fiscal period, in each case as
determined in accordance with GAAP.

"FABTECH" shall have the meaning assigned to that term in Recital C of this
Agreement.

"FINANCIAL STATEMENTS" shall mean, with respect to any accounting period of any
Person, statements of income and cash flow of such Person for such period, and
balance sheets of such Person as of the end of such period, setting forth in
each case in comparative form figures for the corresponding period in the
preceding fiscal year or, if such period is a full fiscal year, corresponding
figures from the preceding annual audit, all prepared in reasonable detail and
in accordance with GAAP. "Financial Statements" shall include the notes and
schedules thereto.

"FIXED CHARGE COVERAGE RATIO" shall mean, as of the last day of any fiscal
quarter, calculated for Borrower and its Subsidiaries (other than SKE, in the
case of Section 6.7



                                      -74-
<PAGE>   6

hereof only) on a consolidated basis, the ratio of (a) EBITDA for the fiscal
period consisting of the four (4) consecutive fiscal quarters ended on that date
less non-financed Capital Expenditures during such fiscal period less federal
and state income tax expense during such fiscal period to (b) Debt Service for
such fiscal period.

"GAAP" shall mean generally accepted accounting principles in the United States
of America in effect from time to time.

"GUARANTOR" shall mean FabTech.

"GUARANTOR SECURITY AGREEMENT" shall mean that certain Security Agreement, on
Bank's standard form therefor, duly executed by Guarantor in favor of Bank.

"GUARANTY" shall mean that certain Continuing Guaranty, on Bank's standard form
therefor, duly executed by Guarantor in favor of and with Bank, pursuant to
which Guarantor shall unconditionally guarantee the payment by Borrower of the
Obligations, provided, however, that Guarantor's liability thereunder for
Obligations representing principal shall not exceed Twenty-Six Million Two
Hundred Eighty-Eight Thousand Three Hundred Thirty-Three and 38/100 Dollars
($26,288,333.38).

"GUARANTY OBLIGATION" shall mean , as to any Person, any (a) guarantee by such
Person of Indebtedness of, or other obligation performable by, any other Person
or (b) assurance given by such Person to an obligee of any other Person with
respect to the performance of an obligation by, or the financial condition of,
such other Person, whether direct, indirect or contingent, including any
purchase or repurchase agreement covering such obligation or any collateral
security therefor, any agreement to provide funds (by means of loans, capital
contributions or otherwise) to such other Person, any agreement to support the
solvency or level of any balance sheet item of such other Person or any
"keep-well" or other arrangement of whatever nature given for the purpose of
assuring or holding harmless such obligee against loss with respect to any
obligation of such other Person; provided, however, that the term "Guaranty
Obligation" shall not include endorsements of instruments for deposit or
collection in the ordinary course of business and customary indemnities given in
connection with asset sales in the ordinary course of business.

"INDEBTEDNESS" shall mean, as to any Person (without duplication), (a)
indebtedness of such Person for borrowed money or for the deferred purchase
price of property (excluding (i) Subordinated Indebtedness and (ii) trade and
other accounts payable in the ordinary course of business in accordance with
ordinary trade terms and accrued liabilities incurred in the ordinary course of
business, including any contingent obligation of such Person for any such
indebtedness), (b) indebtedness of such Person of the nature described in clause
(a) that is non-recourse to the credit of such Person



                                      -75-
<PAGE>   7

but is secured by assets of such Person, to the extent of the fair market value
of such assets as determined in good faith by such Person, (c) Capital Lease
Obligations of such Person, (d) indebtedness of such Person arising under
bankers' acceptance facilities or under facilities for the discount of accounts
receivable of such Person, (e) any direct or contingent obligations of such
Person under letters of credit issued for the account of such Person and (f) any
net obligations of such Person under any interest rate protection agreements.

"INSOLVENCY PROCEEDING" shall mean and include any proceeding commenced by or
against Borrower or any of its Subsidiaries under any provision of the
Bankruptcy Code, or under any other bankruptcy or insolvency law, including, but
not limited to, assignments for the benefit of creditors, formal or informal
moratoriums, and compositions or extensions with some or all creditors.

"LEVERAGE RATIO" shall mean, as of the last day of any fiscal quarter,
determined for Borrower and its Subsidiaries on a consolidated basis, the ratio
of (a) all Indebtedness of Borrower and its Subsidiaries on that date to (b)
EBITDA for the fiscal period consisting of the four (4) consecutive fiscal
quarters ended on that date.

"LIEN" shall mean any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest).

"LOAN DOCUMENTS" shall mean and include this Agreement, the Notes, the Guaranty,
the Security Agreements, the Alternative Dispute Resolution Agreements, the
Subordination Agreement and all other documents, instruments and agreements, and
all related riders, exhibits, resolutions, authorizations, financing statements
and certificates delivered to Bank in connection with this Agreement.

"LOANS" and "LOAN" shall mean, respectively, (a) the loans to be made by Bank to
Borrower pursuant to Section 2 hereof and (b) any one of such Loans.

"NET CASH ISSUANCE PROCEEDS" shall mean, with respect to the issuance of any
debt security or equity security by Borrower or any of its Subsidiaries, the
Cash proceeds received by or for the account of Borrower or any of its
Subsidiaries in consideration of such issuance, net of (a) underwriting
discounts and commissions actually paid to any Person not an Affiliate of
Borrower and (b) professional fees and disbursements actually paid in connection
therewith.

"NET CASH SALES PROCEEDS" shall mean, with respect to any Disposition, the sum
of (a) the Cash proceeds received by or for the account of Borrower and its
Subsidiaries from



                                      -76-
<PAGE>   8

such Disposition plus (b) the amount of Cash received by or for the account of
Borrower and its Subsidiaries upon the sale, collection or other liquidation of
any proceeds that are not Cash from such Disposition, in each case net of (i)
any amount required to be paid to any Person owning an interest in the assets
disposed of, (ii) any amount applied to the repayment of Indebtedness secured by
a Lien permitted under Section 7.1 hereof on the asset disposed of, (iii) any
transfer tax, income tax or other taxes payable as a result of such Disposition,
(iv) professional fees and expenses, fees due to any governmental agency,
brokers' commissions and other out-of-pocket costs of sale actually paid to any
Person that is not an Affiliate of Borrower attributable to such Disposition,
and (v) any reserves established in accordance with GAAP in connection with such
Disposition.

"NET PROFIT AFTER TAXES" shall mean, for any fiscal period, the after-tax income
of Borrower and its Subsidiaries for such fiscal period, as determined in
accordance with GAAP.

"NOTES" and "NOTE" shall mean, respectively, (a) the Revolving Note, the
Acquisition Note and the Term Notes, and (b) any of such Notes.

"OBLIGATIONS" shall mean and include all loans, advances, debts, liabilities and
obligations, howsoever arising, owed by Borrower or any of its Subsidiaries to
Bank of every kind and description (whether or not evidenced by any note or
instrument and whether or not for the payment of money), direct or indirect,
absolute or contingent, due or to be come due, now existing or hereafter arising
pursuant to the terms of this Agreement, any other Loan Document or any other
agreement or instrument, including without limitation any Indebtedness of
Borrower which Bank obtains by assignment or otherwise, and all Bank Expenses.

"PERMITTED GUARANTY OBLIGATIONS" shall mean:

           (a) Guaranty Obligations existing on the date of this Agreement, and
refinancings, renewals, extensions or amendments that do not increase the amount
thereof;

           (b) Guaranty Obligations under the Loan Documents; and

           (c) Guaranty Obligations owed to Borrower or any of its Subsidiaries.

"PERMITTED INDEBTEDNESS" shall mean:

           (a) the Obligations;



                                      -77-
<PAGE>   9

           (b) Indebtedness owed to Borrower or any of its Subsidiaries;

           (c) trade payables and other contractual obligations to suppliers and
customers incurred in the ordinary course of business;

           (d) Indebtedness of Borrower or any of its Subsidiaries incurred to
finance the purchase of equipment constituting a Capital Expenditure permitted
by Section 7.10 of this Agreement;

           (e) other Indebtedness existing on the date of this Agreement and
reflected in the Financial Statement of Borrower and its Subsidiaries for the
nine (9) month fiscal period ended September 30, 2000 (including, without
limitation, Indebtedness of SKE existing on the date of this Agreement and
disclosed in Schedule 7.3 annexed hereto), and refinancings, renewals,
extensions or amendments that do not increase the amount thereof;

           (f) Indebtedness of Guarantor reflected in the Financial Statement of
Guarantor for the ten (10) month fiscal period ended October 31, 2000, and
refinancings, renewals, extensions or amendments that do not increase the amount
thereof;

           (g) lease obligations permitted under Section 7.12 of this Agreement;

           (h) the Subordinated Indebtedness;

           (i) Indebtedness consisting of debt securities for which the Net Cash
Issuance Proceeds will be applied as a mandatory prepayment pursuant to Section
2.7(a) of this Agreement; and

           (j) other Indebtedness not referred to hereinabove; provided,
however, that the aggregate outstanding principal amount of such Indebtedness
shall not exceed Five Million Dollars ($5,000,000) at any time.

"PERMITTED LIENS" shall mean:

        (a) Liens for taxes not yet payable or Liens for taxes being contested
in good faith and by proper proceedings diligently pursued, provided that
adequate reserves shall have been made therefor on the applicable Financial
Statement, the Lien shall have no effect on the priority of Bank's security
interest in the Collateral and a stay of enforcement of any such Lien shall be
in effect;

        (b) Liens in favor of Bank;



                                      -78-
<PAGE>   10

        (c) Liens upon equipment granted in connection with the acquisition of
such equipment by Borrower or any of its Subsidiaries after the date hereof
(including, without limitation, pursuant to capital leases); provided, however,
that (i) the cost of such acquisition constitutes a Capital Expenditure
permitted by Section 7.10 of this Agreement, (ii) the Indebtedness incurred to
finance each such acquisition is permitted by this Agreement, and (iii) each
such Lien attaches only to the equipment acquired with the Indebtedness secured
thereby, and the proceeds and products thereof;

        (d) a security interest in all or substantially all of its assets
granted by Guarantor in favor of Citibank, N.A. prior to the date of this
Agreement; provided, however, that such security interest shall be terminated as
provided for in Section 4.2 of this Agreement;

        (e) reservations, exceptions, encroachments, easements, rights of way,
covenants, conditions, restrictions, leases and other similar title exceptions
or encumbrances affecting real property which do not in the aggregate materially
detract from the value of the real property or materially interfere with their
use in the ordinary conduct of the business of Borrower or any of its
Subsidiaries;

        (f) deposits under workmen's compensation, unemployment insurance,
social security and other similar laws applicable to Borrower or any of its
Subsidiaries; and

        (g) Liens relating to statutory obligations of Borrower or any of its
Subsidiaries with respect to surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary course of business.

"PERSON" shall mean any natural person, corporation, partnership, joint venture,
limited liability company, firm, association, government, governmental agency,
court or any other entity.

"PRIOR AGREEMENT" shall have the meaning assigned to such term in Recital A of
this Agreement.

"REVOLVING CREDIT COMMITMENT" shall have the meaning assigned to that term in
Section 2.1 hereof.

"REVOLVING NOTE" shall have the meaning assigned to that term in Section 2.1
hereof.

"SECURITY AGREEMENTS" shall mean respectively, (a) the Borrower Security
Agreement and the Guarantor Security Agreement, and (b) either of such Security
Agreements.



                                      -79-
<PAGE>   11

"SELLER" shall have the meaning assigned to such term in Recital C of this
Agreement.

"SKE" shall have the meaning assigned to such term in Recital B of this
Agreement.

"STOCK PURCHASE" shall have the meaning assigned to such term in Recital C of
this Agreement.

"STOCK PURCHASE AGREEMENT" shall have the meaning assigned to such term in
Recital C of this Agreement.

"SUBORDINATED INDEBTEDNESS" shall mean Guarantor's obligations to Subordinating
Creditor under the Subordinated Note, which obligations shall be subordinated in
right of payment to the obligations and liabilities of Guarantor to Bank under
the Guaranty pursuant to the terms of the Subordination Agreement.

"SUBORDINATED NOTE" shall mean that certain Subordinated Promissory Note dated
December 1, 2000, executed by Guarantor in favor of Subordinating Creditor, in
the original principal amount of Thirteen Million Five Hundred Forty-Nine
Thousand Dollars ($13,549,000), as such Subordinated Promissory Note is in
effect on the date of this Agreement.

"SUBORDINATING CREDITOR" shall mean Seller.

"SUBORDINATION AGREEMENT" shall mean that certain Subordination Agreement, on
Bank's standard form therefor or otherwise in form and substance acceptable to
Bank, duly executed by Subordinating Creditor in favor of Bank.

"SUBSIDIARY" of a Person shall mean any corporation, association, partnership,
limited liability company, joint venture or other business entity, whether
foreign or domestic, of which more than fifty percent (50%) of the voting stock
or other equity interests (in the case of Persons other than corporations), is
owned or controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the context
otherwise requires, (a) references herein to a "Subsidiary" shall refer to a
Subsidiary of Borrower and (b) references to "Subsidiaries" shall not include
Guarantor to the extent that they relate to dates or periods prior to the
consummation by Borrower of the Stock Purchase. SKE shall be deemed to be a
Subsidiary of Borrower.

"TANGIBLE NET WORTH" shall mean, for any fiscal period of Borrower and its
Subsidiaries, the net worth of Borrower and its Subsidiaries, decreased by
patents, trademarks, trade names, goodwill and other similar intangible assets
of Borrower and its Subsidiaries.



                                      -80-
<PAGE>   12

"TERM NOTES" and "TERM NOTE" shall have the meanings assigned to such terms in
Section 2.3 hereof.


SECTION 2.  AMOUNT AND TERMS OF CREDIT

     2.1 REVOLVING CREDIT COMMITMENT. Subject to the terms and conditions of
this Agreement, from the date of this Agreement to but excluding July 1, 2002
(the "Revolving Credit Commitment Termination Date"), provided that no Event of
Default then has occurred and is continuing, Bank will make loans (collectively,
the "Revolving Loans" and individually, a "Revolving Loan") to Borrower as
Borrower may request from time to time; provided, however, that the aggregate
principal amount of all such Revolving Loans outstanding at any one time shall
not exceed Nine Million Dollars ($9,000,000) (the "Revolving Credit
Commitment"). Within the limits of time and amount set forth in this Section
2.1, Borrower may borrow, repay and reborrow Revolving Loans under the Revolving
Credit Commitment. All Revolving Loans shall be requested before the Revolving
Credit Commitment Termination Date, on which date all unpaid principal of and
accrued interest on all Revolving Loans shall be due and payable. Borrower's
obligation to repay the principal amount of all Revolving Loans, together with
accrued interest thereon, shall be evidenced by a promissory note issued by
Borrower in favor of Bank (the "Revolving Note") on the standard form used by
Bank to evidence its commercial loans. The Revolving Note shall replace and
supersede that certain Promissory Note (Base Rate) dated June 10, 2000, issued
by Borrower in favor of Bank pursuant to the Prior Agreement. Bank shall enter
the amount of each Revolving Loan, and any payments thereof, in its books and
records, and such entries shall be prima facie evidence of the amount
outstanding under the Revolving Credit Commitment. The failure of Bank to make
any notation in its books and records shall not discharge Borrower of its
obligation to repay in full with interest all amounts borrowed hereunder. The
proceeds of the Revolving Loans shall be disbursed for the purposes set forth in
Section 2.4(a) hereof pursuant to disbursement instructions provided to Bank on
Bank's standard form therefor.

    2.2 ACQUISITION LOAN COMMITMENT. Subject to the terms and conditions of this
Agreement, during the period from the date of this Agreement to but excluding
December 29, 2000, provided that no Event of Default then has occurred and is
continuing, Bank will make a term loan (the "Acquisition Loan") to Borrower in a
single disbursement as Borrower may request in the principal amount of Ten
Million Dollars ($10,000,000) (the "Acquisition Loan Commitment"). Borrower's
obligation to repay the principal amount of the Acquisition Loan, together with
accrued interest thereon, shall be evidenced by a promissory note issued by
Borrower in favor of Bank (the "Acquisition Note") on the standard form used by
Bank to evidence its



                                      -81-
<PAGE>   13

commercial loans. The Acquisition Note shall replace and supersede that certain
Promissory Note (Base Rate) dated June 12, 2000, issued by Borrower in favor of
Bank pursuant to the Prior Agreement. The Acquisition Note shall provide for
payments of principal and interest as set forth therein. On the Business Day
that is exactly four (4) years after the date of the Acquisition Loan (the
"Acquisition Loan Maturity Date"), all unpaid principal of and accrued but
unpaid interest on the Acquisition Loan shall be due and payable. The proceeds
of the Acquisition Loan shall be disbursed for the purposes set forth in Section
2.4(b) hereof pursuant to disbursement instructions provided to Bank on Bank's
standard form therefor.

    2.3 TERM LOANS. Pursuant to the terms and conditions of the Prior Agreement,
Bank made various term loans (collectively, the "Term Loans" and individually, a
"Term Loan") to Borrower in the respective original principal amounts set forth
in Schedule 2.3 annexed hereto. The respective outstanding principal amounts and
maturity dates of the Term Loans on the date of this Agreement are also set
forth in Schedule 2.3 annexed hereto. From and after the date of this Agreement,
Borrower's obligation to repay the principal amount of the Term Loans, together
with accrued interest thereon, shall be evidenced by those certain promissory
notes, each on Bank's standard form therefor, issued by Borrower in favor of
Bank (collectively, the "Term Notes" and individually, a "Term Note"). The Term
Notes shall replace and supersede the promissory notes issued by Borrower in
favor of Bank pursuant to the Prior Agreement. The Term Notes shall provide for
payments of principal and interest, and mature on the dates, set forth therein.
The proceeds of the Term Loans were disbursed for the purposes provided for in
the Prior Agreement. Borrower shall provide Bank with new disbursement
instructions with respect to the Term Notes, each on Bank's standard form
therefor.

    2.4  PURPOSES OF THE LOANS.

           (a) No more than Four Million Dollars ($4,000,000) of the proceeds of
the Revolving Loans shall be used by Borrower to consummate the Stock Purchase,
and the remaining proceeds of the Revolving Loans shall be used for Borrower's
general working capital purposes only.

           (b) The proceeds of the Acquisition Loan shall be used by Borrower to
consummate the Stock Purchase.

           (c) The proceeds of the Term Loans were used by Borrower for the
purposes provided for in the Prior Agreement.



                                      -82-
<PAGE>   14

    2.5  INTEREST.

           (a) Each Loan shall bear interest at the rate or rates provided for
in the corresponding Note and selected by Borrower.

           (b) Interest on the Loans shall be computed on the basis of the
actual number of days during which the principal is outstanding thereunder
divided by 360 which shall, for the purposes of computing interest, be
considered one (1) year.

           (c) Interest shall be payable on the outstanding principal amount of
each Loan as set forth in the corresponding Note in accordance with Section 2.10
hereof.

    2.6 VOLUNTARY PREPAYMENT. The principal Indebtedness evidenced by the Notes
may, at any time and from time to time, voluntarily be paid or prepaid in whole
or in part without penalty or premium in accordance with the terms of the Notes,
except that, with respect to any voluntary prepayment under this Section 2.6,
(a) the amount of any partial prepayment of a Loan shall not be less than One
Hundred Thousand Dollars ($100,000) and shall be in an integral multiple of
Fifty Thousand Dollars ($50,000) in excess thereof and (b) any payment or
prepayment of all or any part of any Base Interest Rate Loan under and as
defined in any Note on a day, other than the last day of the applicable Interest
Period under and as defined in such Note, shall be subject to the payment of a
prepayment fee as provided for in such Note. Principal sums so paid or prepaid
shall be applied to those installments scheduled to repay the outstanding
principal amount of the applicable Loan in the inverse order of maturity, but
shall not postpone the due date or change the amount of any subsequent principal
installment unless Bank shall otherwise agree in writing.

    2.7  MANDATORY PREPAYMENTS.

           (a) The principal Indebtedness evidenced by the Notes shall be
prepaid on or before the fifth Business Day following the receipt by Borrower or
any of its Subsidiaries of (i) Net Cash Sales Proceeds from Dispositions, by an
amount equal to one hundred percent (100%) of such Net Cash Sales Proceeds, (ii)
Net Cash Issuance Proceeds from the issuance of debt securities of Borrower or
any of its Subsidiaries (other than Indebtedness permitted by subsections (a)
through (h) and subsection (j) of the definition of Permitted Indebtedness
hereinabove), by an amount equal to one hundred percent (100%) of such Net Cash
Issuance Proceeds and (iii) Net Cash Issuance Proceeds from the issuance of
equity securities of Borrower or any of its Subsidiaries (except any issuance of
equity securities to Borrower or to any of its Subsidiaries or to employees or
former employees, directors and officers of Borrower pursuant to an exercise of
stock options with respect to equity in Borrower), by an amount equal to one
hundred percent (100%) of such Net Cash Issuance Proceeds.



                                      -83-
<PAGE>   15

           (b) On or before the date that is one hundred twenty (120) days after
the close of each fiscal year of Borrower, commencing with the fiscal year
ending December 31, 2001, Borrower shall prepay the principal Indebtedness
evidenced by the Acquisition Note by an amount equal to fifty percent (50%) of
Excess Cash Flow for such fiscal year. Principal sums so prepaid shall be
applied to those installments scheduled to repay the outstanding principal
amount of the Acquisition Loan in the inverse order of maturity, but shall not
postpone the due date or change the amount of any subsequent principal
installment unless Bank shall otherwise agree in writing.

    2.8 DEFAULT RATE. If all or any portion of the principal amount of any Loan
made under this Agreement shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue principal amount, and to
the extent permitted by law overdue interest thereon, shall be payable on demand
at a rate per annum equal to the rate which would otherwise be applicable plus
five percent (5%), effective from the date that such amounts become overdue
until paid in full.

    2.9 ACQUISITION LOAN COMMITMENT AND DOCUMENTATION FEE. On or before the date
of this Agreement, Borrower shall pay to Bank a fee in connection with the
Acquisition Loan Commitment and the documentation of this Agreement and the
other Loan Documents in the amount of Thirty Thousand Dollars ($30,000). The
payment of such fee shall constitute the payment in full by Borrower of all of
the Bank Expenses due to Bank for the period prior to the date of this
Agreement.

    2.10 BANK'S RIGHT TO CHARGE DEPOSIT ACCOUNT. Borrower authorizes Bank
(irrevocably until the Obligations are paid in full and Bank's commitment to
extend the Loans hereunder is terminated) from time to time to charge against
account number 3030152777 maintained by Borrower with Bank any principal and/or
interest due or past due in respect of the Obligations under this Agreement;
provided that Bank shall not have any obligation to charge past due payments
against such deposit account.


SECTION 3.  COLLATERAL

    3.1 SECURITY PROVIDED BY BORROWER. Pursuant to the terms and conditions of
the Prior Agreement, Borrower executed and delivered the Borrower Security
Agreement to Bank, pursuant to which Borrower granted to Bank a security
interest in all of Borrower's accounts, deposit accounts, instruments, chattel
paper, documents, general intangibles, inventory, equipment and furniture,
whether then owned or thereafter acquired by Borrower, all proceeds and
insurance proceeds of the foregoing, all guaranties and other security therefor,
and all of Borrower's present and future books and records relating thereto
(including computer-stored information and all software



                                      -84-
<PAGE>   16

relating thereto), and all contract rights with third parties relating to the
maintenance of any such books, records and information, as security for the
payment and performance of all obligations and liabilities of Borrower to Bank
under the Prior Agreement and all documents, instruments and agreements executed
by Borrower in connection therewith. Borrower hereby confirms its grant of such
security interest to Bank pursuant to the Borrower Security Agreement and agrees
that the Borrower Security Agreement shall remain in full force and effect. The
security interest granted to Bank pursuant to the Borrower Security Agreement
shall be a first priority security interest, or such lesser priority as may be
permitted by this Agreement. Each classification of personal property used
hereinabove shall have the meaning given to it in the California Commercial
Code. Nothing contained in this Section 3.1 or in the Borrower Security
Agreement shall be deemed to grant Bank or confirm in favor of Bank a security
interest in the assets of any Subsidiary of Borrower.

    3.2 SECURITY PROVIDED BY GUARANTOR. Borrower shall cause Guarantor to
execute and deliver the Guarantor Security Agreement to Bank, pursuant to which
Guarantor shall grant to Bank, as security for the payment and performance of
all Obligations of Guarantor to Bank under the Guaranty, a security interest in
all of Guarantor's accounts, deposit accounts, instruments, chattel paper,
documents, general intangibles, inventory, equipment, furniture and fixtures,
whether now owned or hereafter acquired by Guarantor, all proceeds and insurance
proceeds of the foregoing, all guaranties and other security therefor, and all
of Guarantor's present and future books and records relating thereto (including
computer-stored information and all software relating thereto), and all contract
rights with third parties relating to the maintenance of any such books, records
and information. The security interest granted to Bank pursuant to the Guarantor
Security Agreement shall be a first priority security interest, or such lesser
priority as may be permitted by this Agreement.

    3.3 POWER OF ATTORNEY. Until the Obligations of Borrower are paid in full
and Bank has no commitment to extend further Loans hereunder, Borrower hereby
irrevocably makes, constitutes and appoints Bank (and any officers, employees or
agents of Bank designated by Bank) as Borrower's true and lawful attorney, with
power to sign Borrower's name on any documents or instruments which Bank
believes should be executed, recorded and/or filed in order to perfect, or
continue the perfection, of Bank's security interest in the Collateral or to
liquidate or realize value from the Collateral after the occurrence of an Event
of Default.



                                      -85-
<PAGE>   17

SECTION 4. CONDITIONS PRECEDENT

    4.1 CONDITIONS PRECEDENT TO INITIAL LOAN. The obligation of Bank to make its
initial Loan hereunder is subject to the fulfillment, to the satisfaction of
Bank and its counsel, of each of the following conditions:

           (a) NOTES. Bank shall have received the Notes, duly executed by
Borrower to the order of Bank;

           (b)  AUTHORIZATIONS TO OBTAIN CREDIT.

                  (i) Bank shall have received an Authorization to Obtain
Credit, on Bank's standard form therefor, duly executed by the secretary of
Borrower, attesting to the resolution of the board of directors of Borrower
authorizing the execution and delivery of this Agreement, the Notes and all
other Loan Documents required hereunder to which Borrower is a party and
authorizing specific responsible officers of Borrower to execute same;

                  (ii) Bank shall have received an Authorization to Obtain
Credit, on Bank's standard form therefor, duly executed by the secretary of
Guarantor, attesting to the resolution of the board of directors of Guarantor
authorizing the execution and delivery of the Guaranty and all other Loan
Documents required hereunder to which Guarantor is a party and authorizing
specific responsible officers of Guarantor to execute same; and

                  (iii) Bank shall have received an Authorization to Obtain
Credit, on Bank's standard form therefor, duly executed by the secretary of
Subordinating Creditor, attesting to the resolution of the board of directors of
Subordinating Creditor authorizing the execution and delivery of the
Subordination Agreement and all other Loan Documents required hereunder to which
Subordinating Creditor is a party and authorizing specific responsible officers
of Subordinating Creditor to execute same;

           (c) ALTERNATIVE DISPUTE RESOLUTION AGREEMENTS. Bank shall have
received the Alternative Dispute Resolution Agreements;

           (d) NO MATERIAL ADVERSE CHANGE. No material adverse change shall have
occurred in the business, operations, assets, prospects, earnings or condition
(financial or otherwise) of Borrower;

           (e) AUTHORIZATIONS TO DISBURSE. Bank shall have received executed
Authorizations to Disburse, each on Bank's standard form therefor, duly executed
by Borrower, directing Bank to disburse the proceeds of the Loans as provided
for herein;



                                      -86-
<PAGE>   18

           (f) GUARANTY. Bank shall have received the Guaranty, duly executed by
Guarantor;

           (g) COLLATERAL DOCUMENTS. Bank shall have received the Guarantor
Security Agreement, together with such UCC financing statements, fixture
filings, UCC searches, tax lien and litigation searches, insurance certificates,
waivers and consents, and other similar documents as Bank may require, and in
such form as Bank may require, in order to evidence, perfect (in the priority
required hereunder) and assure Bank's security interest in the Collateral;

           (h) SUBORDINATION AGREEMENT. Bank shall have received the
Subordination Agreement, duly executed by Subordinating Creditor. The
Subordination Agreement shall provide, among other things, that so long as (i)
Borrower and Guarantor have made each and every payment of principal and
interest due and owing to Bank, (ii) no Event of Default has occurred and is
then continuing and (iii) none of such payments would result in an Event of
Default, then Subordinating Creditor shall be entitled to receive (A) regularly
scheduled payments (but not prepayments or payments resulting from acceleration)
of interest on the Subordinated Indebtedness and (B) the regularly scheduled
payment (but not a prepayment or a payment resulting from acceleration) of
principal in the amount of Three Million Five Hundred Forty-Nine Thousand
Dollars ($3,549,000) on the Subordinated Indebtedness that is due and payable on
March 31, 2001. The Subordination Agreement shall further provide that, so long
as any of the obligations and liabilities of Guarantor to Bank under the
Guaranty remain unpaid, Subordinating Creditor shall in no event be entitled to
receive any payments or prepayments of principal on the Subordinated
Indebtedness (other than as provided for hereinabove) without Bank's prior
written consent, which Bank may give or withhold in its sole discretion;

           (i) SUBORDINATED NOTE. Bank shall have received the original
Subordinated Note, legended as provided for in the Subordination Agreement;

           (j) ACQUISITION LOAN COMMITMENT AND DOCUMENTATION FEE. Bank shall
have received the fee in respect of the Acquisition Loan Commitment and the
documentation of this Agreement and the other Loan Documents, as provided for in
Section 2.9 hereof;

           (k) STOCK PURCHASE AGREEMENT. Bank shall have received a copy of the
duly executed Stock Purchase Agreement, and same shall be in substantially the
form of the draft of the Stock Purchase Agreement dated November 27, 2000
provided to Bank prior to the date of this Agreement;



                                      -87-
<PAGE>   19

           (l) INITIAL PURCHASE PRICE. Bank shall have determined that the
Initial Purchase Price (as such term is defined in the Stock Purchase Agreement)
to be paid by Borrower in connection with the Stock Purchase will not exceed
Twenty-Five Million Dollars ($25,000,000); and

           (m) OTHER DOCUMENTS. Bank shall have received such other documents,
instruments and agreements as Bank may reasonably require in order to effect
fully the transactions contemplated by this Agreement.

    4.2 CONDITION SUBSEQUENT. The obligation of Bank to extend credit to
Borrower hereunder is subject to Bank's receipt, within thirty (30) days after
the date of this Agreement, of a UCC-2 termination statement, executed by
Citibank, N.A., whereby Citibank, N.A. shall terminate its security interest in
those assets of Guarantor in which Citibank, N.A. has a security interest on the
date of this Agreement.

    4.3 CONDITIONS PRECEDENT TO SUBSEQUENT LOANS. The obligation of Bank to make
each Loan hereunder subsequent to the initial Loan is subject to the
fulfillment, at or prior to the time of the making of such Loan, of each of the
following further conditions:

           (a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in this Agreement shall be true, complete and accurate in
all material respects on and as of such date (except to the extent that such
representations and warranties relate solely to any earlier date); and

           (b) NO EVENT OF DEFAULT. No Event of Default or event which, with the
lapse of time or notice, or both, would be an Event of Default shall have
occurred and be continuing on the date of such Loan, nor shall either result
from the making of such Loan.


SECTION 5.  REPRESENTATIONS AND WARRANTIES

    Borrower represents and warrants that:

    5.1 PRINCIPAL BUSINESS ACTIVITY. The principal business of Borrower is the
manufacturing and distribution of discrete semiconductor devices primarily for
manufacturers in the automotive, computer and telecommunications industries.

    5.2 AUTHORITY TO BORROW. The execution, delivery and performance of this
Agreement, the Notes and all other Loan Documents to which Borrower is a party
are



                                      -88-
<PAGE>   20

not in contravention of any of the terms of any indenture, agreement or
undertaking to which Borrower is a party or by which it or any of its property
is bound or affected.

    5.3  FINANCIAL STATEMENTS.

           (a) The consolidated Financial Statement of Borrower and its
Subsidiaries as at September 30, 2000, for the nine (9) month fiscal period of
Borrower and its Subsidiaries ended on such date, has heretofore been furnished
to Bank, and is true and complete and fairly represents the financial condition
of Borrower and its Subsidiaries for the fiscal period covered thereby. Since
September 30, 2000, there has been no material adverse change in the business,
operations, assets, prospects, earnings or condition (financial or otherwise) of
Borrower and its Subsidiaries, taken as a whole.

           (b) The Financial Statement of Guarantor as at October 31, 2000, for
the ten (10) month fiscal period of Guarantor ended on such date, has heretofore
been furnished to Bank, and is true and complete and fairly represents the
financial condition of Guarantor for the fiscal period covered thereby. Since
October 31, 2000, there has been no material adverse change in the business,
operations, assets, prospects, earnings or condition (financial or otherwise) of
Guarantor.

    5.4 ADVERSE CHANGE. Except for assets which may have been disposed of in the
ordinary course of business, Borrower and its Subsidiaries have good and
marketable title to all of the property reflected in the Financial Statement of
Borrower and its Subsidiaries as at September 30, 2000 and to all property
acquired by it since that date, free and clear of all Liens except those
specifically set forth therein.

    5.5 NO LITIGATION. There is no litigation or proceeding pending or
threatened against Borrower or any of its Subsidiaries, or any of their
respective properties, the results of which, if decided adversely, are likely to
have a material adverse effect on the financial condition, property or business
of Borrower or any of its Subsidiaries or result in liability in excess of the
insurance coverage of Borrower or any of its Subsidiaries.

    5.6 NO EVENT OF DEFAULT. Borrower is not now in default in the payment of
any of its material obligations, and there exists no event, condition or act
which constitutes an Event of Default and no event, condition or act which with
notice, the lapse of time, or both, would constitute an Event of Default.

    5.7 ORGANIZATION. Each of Borrower and Guarantor is duly organized and
existing under the laws of the State of Delaware, without limitation as to its
existence, and has the power and authority to carry on the business in which it
is engaged and proposes to engage.



                                      -89-
<PAGE>   21

    5.8 POWER AND AUTHORITY. Borrower has the corporate power and authority to
enter into this Agreement and to execute and deliver the Notes and all of the
other Loan Documents to which it is a party. Guarantor has the corporate power
and authority to execute and deliver the Guaranty and any other Loan Document to
which it is a party.

    5.9 QUALIFICATION. Each of Borrower and Guarantor is duly qualified and in
good standing as a foreign corporation wherever such qualification is required,
except in those jurisdictions where the failure to so qualify would not have a
material adverse effect on the business, operations, assets, prospects, earnings
or condition (financial or otherwise) of Borrower or Guarantor.

    5.10 ERISA. The defined benefit pension plans (as such term is defined in
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) of
Borrower and Guarantor, meet, as of the date hereof, the minimum funding
standards of section 302 of ERISA, and no Reportable Event (as such term is
defined in ERISA) or Prohibited Transaction (as such term is defined in ERISA)
has occurred with respect to any such plan.

    5.11 REGULATION U. No action has been taken or is currently planned by
Borrower, or any agent acting on its behalf, which would cause this Agreement or
any Loan to violate Regulation U or any other regulation of the Board of
Governors of the Federal Reserve System or to violate the Securities and
Exchange Act of 1934, in each case as in effect now or as the same may hereafter
be in effect. Borrower is not engaged principally, or as one of its most
important activities, in the business of extending credit for the purpose of
purchasing or carrying "margin stock" as that term is defined in Regulation U
and none of the proceeds of any Loan hereunder have been or shall be used for
the purpose, directly or indirectly, of purchasing or carrying any such margin
stock.

    5.12 NO CURRENT LIMITATION ON REPATRIATION OF CASH PROFITS. On the date of
this Agreement, there is no limitation on the repatriation by Borrower of Cash
from profits generated by its foreign Subsidiaries.


SECTION 6.  AFFIRMATIVE COVENANTS

    Borrower covenants and agrees that, so long as this Agreement shall be in
effect and until payment in full of all Obligations, including, without
limitation, any accrued and unpaid interest thereon, and any other amounts due
hereunder, Borrower shall perform each and all of the following covenants
applicable to it:



                                      -90-
<PAGE>   22

    6.1 PAYMENT OF OBLIGATIONS. Borrower shall promptly pay and discharge, and
cause each of its Subsidiaries to promptly pay and discharge, all taxes,
assessments and other governmental charges and claims levied or imposed upon it
or its property, or any part thereof; provided, however, that Borrower and its
Subsidiaries shall have the right in good faith to contest any such taxes,
assessments, charges or claims and, pending the outcome of such contest, to
delay or refuse payment thereof, provided that such reserves as may be required
by GAAP are established by them to pay and discharge any such taxes,
assessments, charges and claims.

    6.2 MAINTENANCE OF EXISTENCE. Each of Borrower and its Subsidiaries shall
maintain and preserve its existence and assets and all rights, franchises and
other authority necessary for the conduct of its business and shall maintain and
preserve its property, equipment and facilities in good order, condition and
repair. Bank may, at reasonable times, visit and inspect any of the properties
of Borrower and its Subsidiaries.

    6.3 RECORDS. Each of Borrower and its Subsidiaries shall keep and maintain
full and accurate accounts and records of its operations in accordance with GAAP
and shall permit Bank to have access thereto, to make examination thereof, and
to audit same during regular business hours.

    6.4 INFORMATION FURNISHED. Borrower shall furnish or cause to be furnished
to Bank:

           (a) QUARTERLY FINANCIAL STATEMENTS. Within sixty (60) days after the
close of each fiscal quarter, except for the last fiscal quarter of each fiscal
year, a copy of the unaudited consolidated Financial Statements of Borrower and
its Subsidiaries, on Form 10-Q, as of the close of such fiscal quarter, prepared
in accordance with GAAP (except that such unaudited Financial Statements need
not include footnotes and other informational disclosures);

           (b) ANNUAL FINANCIAL STATEMENTS. Within one hundred twenty (120) days
after the close of each fiscal year of Borrower, a copy of the consolidated
Financial Statements of Borrower and its Subsidiaries, on Form 10-K, as of the
close of such fiscal year, prepared on an audited basis in accordance with GAAP
by an independent certified public accountant selected by Borrower and
reasonably satisfactory to Bank;

           (c) COMPLIANCE CERTIFICATES. With each quarterly and annual Financial
Statement furnished to Bank pursuant to Sections 6.4(a) and 6.4(b), a
certificate of Borrower's chief financial officer or controller (i) setting
forth in reasonable detail the calculations required to establish that Borrower
was in compliance with its covenants



                                      -91-
<PAGE>   23

set forth in Sections 6.5 through 6.8 and Section 7.8 hereof during the period
covered by such Financial Statement and (ii) stating that, except as explained
in reasonable detail in such certificate, (A) all of the representations,
warranties and covenants of Borrower contained in this Agreement and the other
Loan Documents are correct and complete as at the date of such certificate,
except for those representations and warranties which relate to a particular
date and (B) no Event of Default then exists or existed during the period
covered by such Financial Statement. If such certificate discloses that a
representation or warranty is not correct or complete, that a covenant has not
been complied with, or that an Event of Default exists or existed, such
certificate shall set forth the action, if any, that Borrower has taken or
proposes to take with respect thereto;

           (d) NOTICE OF LIMITATION ON REPATRIATION OF CASH PROFITS. Within
thirty (30) days after obtaining knowledge of any change in law which would
limit or otherwise restrict the repatriation by Borrower of Cash from profits
generated by its foreign Subsidiaries, written notice of such change in law; and

           (e) OTHER INFORMATION. Such other financial statements and
information as Bank may reasonably request from time to time.

    6.5 LEVERAGE RATIO. Borrower and its Subsidiaries shall maintain a Leverage
Ratio of not greater than (a) 2.0 to 1.0 as of the last day of the fiscal
quarter ending December 31, 2000 and (b) 1.75 to 1.0 as of the last day of each
fiscal quarter ending thereafter.

    6.6 FIXED CHARGE COVERAGE RATIO. Borrower and its Subsidiaries shall
maintain a Fixed Charge Coverage Ratio of not less than (a) 1.25 to 1.0 as of
the last day of the fiscal quarter ending December 31, 2000, and (b) 1.75 to 1.0
as of the last day of each fiscal quarter ending thereafter.

    6.7 FIXED CHARGE COVERAGE RATIO (EXCLUDING SKE). Borrower and its
Subsidiaries (excluding SKE) shall maintain a Fixed Charge Coverage Ratio of not
less than 1.0 to 1.0 as of the last day of each fiscal quarter.

    6.8 NET PROFIT AFTER TAXES. Borrower and its Subsidiaries shall achieve Net
Profit After Taxes of not less than Five Hundred Thousand Dollars for each
fiscal quarter.

    6.9 INSURANCE. Each of Borrower and Guarantor shall keep all of its
insurable property, whether real, personal or mixed, insured by good and
responsible companies selected by Borrower or Guarantor and approved by Bank
against fire and such other risks as are customarily insured against by
companies conducting similar business with



                                      -92-
<PAGE>   24

respect to like properties. Each of Borrower and Guarantor shall furnish to Bank
a statement of its insurance coverage, shall promptly furnish other or
additional insurance deemed reasonably necessary by and upon the reasonable
request of Bank to the extent that such insurance may be available and hereby
assigns to Bank, as security for the payment of its Obligations, the proceeds of
any such insurance. Bank will be named loss payee on all policies insuring the
Collateral. Each of Borrower and Guarantor will maintain adequate worker's
compensation insurance and adequate insurance against liability for damage to
persons or property. Each policy shall require ten (10) days' written notice to
Bank before such policy may be altered or cancelled.

    6.10 BANK EXPENSES. Borrower shall pay or reimburse Bank for all Bank
Expenses as and when such Bank Expenses become due.

    6.11 BROKERAGE FEES. Neither Borrower nor any of its Subsidiaries shall pay,
directly or indirectly, any fee, commission or compensation of any kind to any
Person for any services in connection with this Agreement.

    6.12 NOTICE OF DEFAULT. Borrower shall give prompt written notice to Bank of
any Event of Default under this Agreement and of any default under any other
Loan Document, and shall give prompt written notice to Bank of any change in
management, change in name, liquidation and of any other matter which has
resulted in, or might result in, a material adverse change in the business,
operations, assets, prospects, earnings or condition (financial or otherwise) of
Borrower or any of its Subsidiaries.

    6.13 EXECUTION OF OTHER DOCUMENTS. Borrower shall promptly, and shall cause
each of its Subsidiaries to promptly, upon demand by Bank, execute all such
additional agreements, contracts, documents and instruments in connection with
this Agreement as Bank may reasonably request in order to effect fully the
purposes hereof.

    6.14 REPORTS UNDER PENSION PLANS. Borrower shall furnish to Bank, as soon as
possible and in any event within fifteen (15) days after Borrower knows or has
reason to know that any event or condition described in Section 5.10 hereof has
occurred, a statement of a responsible officer of Borrower describing such event
or condition and the action, if any, which Borrower proposes to take with
respect thereto.


SECTION 7.  NEGATIVE COVENANTS

    Borrower covenants and agrees that, so long as this Agreement shall be in
effect and until payment in full of all Obligations, including, without
limitation, any accrued



                                      -93-
<PAGE>   25

and unpaid interest thereon, and any other amounts due hereunder, Borrower shall
perform each and all of the following covenants applicable to it:

    7.1 LIENS. Borrower shall not create, incur, assume or permit to exist, or
permit any of its Subsidiaries to create, incur, assume or permit to exist,
directly or indirectly, any Lien on or with respect to any of its property,
whether real, personal or mixed, and whether now owned or hereafter acquired, or
upon the income or profits therefrom, except for Permitted Liens.

    7.2 DISPOSITIONS. Borrower shall not make, or permit any of its Subsidiaries
to make, any Disposition of its property, whether now owned or hereafter
acquired, except (a) a Disposition by Borrower to any of its Subsidiaries and
(b) a Disposition for which the Net Cash Sales Proceeds, when added to the
aggregate Net Cash Sales Proceeds of all Dispositions made during the term of
this Agreement, do not exceed Five Hundred Thousand Dollars ($500,000).

    7.3 INDEBTEDNESS. Borrower shall not create, incur or assume, or permit any
of its Subsidiaries to create, incur or assume, any Indebtedness, other than
Permitted Indebtedness.

    7.4 GUARANTY OBLIGATIONS. Borrower shall not create, incur or assume, or
permit any of its Subsidiaries to create, incur or assume, any Guaranty
Obligations, other than Permitted Guaranty Obligations.

    7.5 LIQUIDATION OR MERGER. Without the prior written consent of Bank, which
consent shall not be unreasonably withheld, Borrower shall not, and shall not
permit any of its Subsidiaries to, liquidate, dissolve or enter into any
consolidation, merger, partnership or other combination, or purchase or lease
all or the greater part of the assets or business of another Person, except that
Borrower may consummate the Stock Purchase in accordance with the terms and
conditions of the Stock Purchase Agreement.

    7.6 LOANS AND ADVANCES. Without the prior written consent of Bank, which
consent shall not be unreasonably withheld, Borrower shall not make, or permit
any of its Subsidiaries to make, any loans or advances or otherwise extend
credit to any other Person, except that Borrower may extend trade credit in the
ordinary course of business as currently conducted to any of its Subsidiaries.

    7.7 INVESTMENTS. Borrower shall not purchase the debt or equity of another
Person except (a) for savings accounts and certificates of deposit of Bank, (b)
direct U.S. Government obligations and commercial paper issued by corporations
with the top ratings of Moody's Investors Service, Inc. or the Standard & Poor's
Ratings



                                      -94-
<PAGE>   26

Division of McGraw-Hill, Inc., provided that all such permitted investments
shall mature within one (1) year of purchase and (c) that Borrower may
consummate the Stock Purchase in accordance with the terms and conditions of the
Stock Purchase Agreement.

    7.8 PAYMENT OF DIVIDENDS. Except for dividends paid by foreign Subsidiaries
of Borrower to Borrower, Borrower shall not declare or pay, or permit any of its
Subsidiaries to declare or pay, directly or indirectly, any dividends, in cash,
return of capital or any other form (other than dividends payable in its own
common stock), or authorize or make any other distribution with respect to any
of its stock now or hereafter outstanding.

    7.9 RETIREMENT OF STOCK. Borrower shall not redeem or retire, or permit any
of its Subsidiaries to redeem or retire, any share of its capital stock.

    7.10 CAPITAL EXPENDITURES. Borrower and its Subsidiaries shall not in any
fiscal year make or incur any Capital Expenditure if after giving effect
thereto, the aggregate amount of all Capital Expenditures by Borrower and its
Subsidiaries in such fiscal year would exceed (a) Twenty Million Dollars
($20,000,000) for the fiscal year ending December 31, 2000 or (b) Eighteen
Million Five Hundred Thousand Dollars ($18,500,000) for any fiscal year
thereafter.

    7.11 TRANSACTIONS WITH AFFILIATES. Borrower shall not directly or indirectly
enter into or permit to exist any transaction (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of ten percent (10%) or more of any class of equity
securities of Borrower or with any Affiliate of Borrower on terms that are less
favorable to Borrower or its Affiliates, as the case may be, than those terms
which might be obtained at the time from third parties, or otherwise not
obtained through good faith negotiation on an arm's length basis. Nothing
contained in this Section 7.11 shall be deemed to prohibit or in any manner
restrict Borrower from consummating the Stock Purchase in accordance with the
terms and conditions of the Stock Purchase Agreement.

    7.12 OPERATING LEASE OBLIGATIONS. Borrower and its Subsidiaries shall not
permit their lease payments, as lessees, under existing and future operating
leases to exceed Three Million Dollars ($3,000,000) in the aggregate in any one
fiscal year. Each of such operating leases shall be of equipment or real
property needed by Borrower or any of its Subsidiaries in the ordinary course of
its business.



                                      -95-
<PAGE>   27

SECTION 8.  EVENTS OF DEFAULT

    8.1 EVENTS OF DEFAULT. The occurrence of any one or more of the following
events, acts or occurrences shall constitute an event of default (collectively,
"Events of Default" and individually, an "Event of Default") hereunder:

           (a) FAILURE TO MAKE PAYMENTS WHEN DUE. Borrower shall fail to pay any
amount owing under this Agreement or under any other Loan Document (including
principal, interest, fees and Bank Expenses) when such amount is due, whether at
stated maturity, as a result of any mandatory repayment or prepayment
requirement, by acceleration, by notice of prepayment or otherwise; or

           (b) BREACH OF REPRESENTATION OR WARRANTY. Any representation or
warranty made by Borrower or any of its Subsidiaries under this Agreement or any
other Loan Document, or in any certificate or financial or other statement
heretofore or hereafter furnished by Borrower or any of its Subsidiaries, shall
prove to have been false, incorrect or incomplete in any material respect when
made, effective or reaffirmed, as the case may be; or

           (c) VIOLATION OF COVENANTS. Borrower or any of its Subsidiaries shall
fail or neglect to perform, keep or observe any term, provision, condition,
covenant, agreement, warranty or representation contained in this Agreement or
any other Loan Document, and such failure shall not be cured within any
applicable grace period provided for therein; or

           (d) INSOLVENCY PROCEEDING. Borrower or any of its Subsidiaries shall
become insolvent or shall fail generally to pay its Indebtedness as such
Indebtedness becomes due; or an Insolvency Proceeding shall be commenced by or
against Borrower or any of its Subsidiaries and, in the case of an involuntary
petition against Borrower or any of its Subsidiaries, such petition shall not be
dismissed or discharged within ninety (90) days of commencement; or

           (e) DISSOLUTION OR LIQUIDATION. Borrower or any of its Subsidiaries
shall voluntarily dissolve, liquidate or suspend its business in whole or in
part; or there shall be commenced against Borrower or any of its Subsidiaries
any proceeding for the dissolution or liquidation of Borrower or such Subsidiary
and such proceeding shall not be dismissed or discharged within sixty (60) days
of commencement; or

           (f) APPOINTMENT OF RECEIVER. Borrower or any of its Subsidiaries
shall apply for or consent to the appointment, or commence any proceeding for
the appointment, of a receiver, trustee, custodian or similar official for all
or substantially all of its property; or any proceeding for the appointment of a
receiver, trustee,



                                      -96-
<PAGE>   28

custodian or similar official for all or substantially all of the property of
Borrower or any of its Subsidiaries shall be commenced against Borrower or such
Subsidiary and shall not be dismissed or discharged within sixty (60) days of
commencement; or

           (g) JUDGMENTS AND ATTACHMENTS. Borrower or any of its Subsidiaries,
or any of their respective properties shall suffer any money judgment, writ,
warrant of attachment or similar process involving the payment of money in
excess of Five Hundred Thousand Dollars ($500,000) and such judgment, writ,
warrant of attachment or similar process shall remain undischarged in accordance
with its terms and the enforcement thereof shall be unstayed and either (i) an
enforcement proceeding shall have been commenced and be pending by any creditor
thereon or (ii) there shall have been a period of sixty (60) consecutive
calendar days during which stays of such judgment, writ, warrant of attachment
or similar process, by reason of pending appeals or otherwise, were not in
effect; or

           (h) FAILURE TO COMPLY. Borrower or any of its Subsidiaries shall fail
to comply with any order, non-monetary judgment, injunction, decree, writ or
demand of any court or other public authority, and such order, non-monetary
judgment, injunction, decree, writ or demand shall continue unsatisfied and in
effect for a period of thirty (30) days without being vacated, discharged,
satisfied or stayed or bonded pending appeal; or

           (i) NOTICE REGARDING TAXES. A notice of levy, notice to withhold or
other legal process for taxes (other than property taxes) shall be filed or
recorded against Borrower or any of its Subsidiaries, or against the property of
Borrower or any of its Subsidiaries, and such notice or other legal process
shall not be released, stayed, vacated, bonded or otherwise dismissed within
sixty (60) days after the date of its filing or recording; or

           (j) BORROWER CHANGE OF CONTROL. Subordinating Creditor shall at any
time cease to be the owner of at least twenty percent (20%) of the issued and
outstanding common stock of Borrower; or

           (k) BREACH OF ANY LOAN DOCUMENT. Any Loan Document shall be breached
or become ineffective, or Borrower or any of its Subsidiaries shall disavow or
attempt to revoke or terminate any Loan Document to which it is a party; or

           (l) DEFAULT UNDER OTHER AGREEMENTS. Borrower or any of its
Subsidiaries shall (i) fail under any agreement, document or instrument to pay
the principal, or any principal installment, of any present or future
Indebtedness for borrowed money of Five Hundred Thousand Dollars ($500,000) or
more, or any guaranty of present or future Indebtedness for borrowed money of
Five Hundred Thousand Dollars



                                      -97-
<PAGE>   29

($500,000) or more, when due (or within any stated grace period), whether at the
stated maturity, upon acceleration, by reason of required prepayment or
otherwise or (ii) fail to perform or observe any other term, covenant or other
provision of any agreement, document or instrument binding upon Borrower or such
Subsidiary if, as a result of such failure, any Person has the right to
accelerate the indebtedness of Borrower or such Subsidiary in an amount in
excess of Five Hundred Thousand Dollars ($500,000) or otherwise require the
payment of any amount in excess of Five Hundred Thousand Dollars ($500,000) to
be paid prior to the date when such amount would otherwise become due; or

           (m) INSECURITY. A material deterioration in the financial condition
of Borrower or any of its Subsidiaries shall occur which results in Bank deeming
itself, in good faith, insecure.

    8.2 REMEDIES. Upon the occurrence of an Event of Default, unless such Event
of Default shall have been remedied or waived in writing by Bank, Bank may, at
its option, without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived, do one or more of the following at any time
or times and in any order: (a) reduce the amount of or refuse to make any Loan
under this Agreement; (b) declare any and all Obligations outstanding under this
Agreement to be immediately due and payable, notwithstanding anything contained
herein or in any Note or other Loan Document to the contrary (provided, however,
that upon the occurrence of any Event of Default described in Section 8.1(d),
(e) or (f) hereof, all Obligations shall automatically become due and payable);
and (c) enforce payment of all Obligations of Borrower under this Agreement and
the other Loan Documents. Notwithstanding anything to the contrary contained
herein, Bank shall have no obligation to make any Loan to Borrower during any
cure period provided for in Section 8.1 hereof.


SECTION 9.  MISCELLANEOUS PROVISIONS

    9.1 ADDITIONAL REMEDIES. The rights, powers and remedies given to Bank
hereunder shall be cumulative and not alternative and shall be in addition to
all rights, powers and remedies given to Bank by law against Borrower or any
other Person, including but not limited to Bank's rights of setoff or banker's
lien.

    9.2 NONWAIVER. Any forbearance or failure or delay by Bank in exercising any
right, power or remedy hereunder shall not be deemed a waiver thereof and any
single or partial exercise of any right, power or remedy shall not preclude the
further exercise thereof. No waiver shall be effective unless it is in writing
and signed by an officer of Bank.



                                      -98-
<PAGE>   30

    9.3 INUREMENT. The benefits of this Agreement shall inure to the successors
and assigns of Bank and the permitted successors and assigns of Borrower.
Borrower shall not assign any of its rights or obligations under this Agreement
to any Person without Bank's prior written consent, and any assignment attempted
without Bank's prior written consent shall be void.

    9.4 APPLICABLE LAW; JURISDICTION. This Agreement and all other Loan
Documents shall be governed and construed in accordance with the laws of the
State of California. Borrower and Bank hereby submit to the jurisdiction of any
court having jurisdiction in the matter in accordance with the Alternative
Dispute Resolution Agreement executed by and between Borrower and Bank.

    9.5 SEVERABILITY. Should any one or more provisions of this Agreement be
determined to be illegal or unenforceable, all other provisions nevertheless
shall be effective.

    9.6 INTEGRATION CLAUSE. Except for the other Loan Documents to which
Borrower is a party, this Agreement constitutes the entire agreement between
Bank and Borrower, and all prior communications, whether verbal or written,
between Borrower and Bank shall be of no further effect or evidentiary value.

    9.7 CONSTRUCTION. The Section and subsection headings herein are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

    9.8 AMENDMENTS. This Agreement may be amended only in writing signed by all
parties hereto.

    9.9 DOCUMENTATION. All documentation evidencing or pertaining to the
Obligations under this Agreement and the other Loan Documents shall be on Bank's
standard forms or otherwise in form and content acceptable to Bank. To the
extent that the terms or conditions of this Agreement are inconsistent with the
terms or conditions of such documentation, the terms and conditions of this
Agreement shall prevail.

    9.10 COUNTERPARTS. This Agreement may be executed in as many counterparts as
may be deemed necessary or convenient, and by the different parties hereto on
separate counterparts each of which, when so executed, shall be deemed an
original but all such counterparts shall constitute but one and the same
agreement. This Agreement shall become effective upon the receipt by Bank and
Borrower of executed counterparts signed by each of them.



                                      -99-
<PAGE>   31

    9.11 SETOFF. Borrower hereby acknowledges and specifically grants Bank a
security interest in, banker's lien upon, and right of recoupment and setoff
respecting any and all deposit or other accounts maintained by Borrower with
Bank, whether held in a general or special account or deposited for safekeeping
or otherwise, and regardless of how such account may be titled, and any other
property of Borrower held in the possession or custody of Bank or its agents.
Borrower further acknowledges that the exercise of setoff, if any, shall
require, and only be deemed to occur upon, the affirmative action of Bank. Bank
agrees to notify Borrower promptly after any such setoff and application;
provided, however, that the failure to give such notice shall not affect the
validity of such setoff and application.


SECTION 10.  NOTICES

    10.1 NOTICES. Any notice or other communication provided for or allowed
hereunder shall be considered to have been validly given if delivered
personally, and evidenced by a receipt signed by an authorized agent or
addressee, or 72 hours after being deposited in the United States mail,
registered or certified, postage prepaid, return receipt requested, or 48 hours
after being sent by Federal Express or other courier service, or, in the case of
telecopied notice, when telecopied, receipt acknowledged, and addressed as
provided below.

If to Borrower:           Diodes Incorporated
                          3050 East Hillcrest Drive
                          Westlake Village, California 91362-3154
                          Attention: Carl Wertz
                                     Chief Financial Officer

                          Telephone No.: (805) 446-4800
                          Facsimile No.: (805) 381-3825

With a copy to:           Rosenthal & Smith
                          6345 Balboa Boulevard, Building 2, Suite 330
                          Encino, California 91316
                          Attention: Jerome B. Smith, Esq.

                          Telephone No.: (818) 344-9900
                          Facsimile No.: (818) 344-9986


If to Bank:               Union Bank of California, N.A.



                                     -100-
<PAGE>   32

                          Commercial Banking Group--Greater Los Angeles Division
                          445 South Figueroa Street, 10th Floor
                          Los Angeles, California 90071
                          Attention: John C. Kase
                                     Vice President

                          Telephone No.: (213) 236-7329
                          Facsimile No.: (213) 236-7635

    10.2 CHANGE OF ADDRESS. The addresses to which notices or demands are to be
given may be changed from time to time by notice served as provided above.

    THIS AGREEMENT is duly executed on behalf of the parties hereto as of the
date first above written.

"Borrower"

DIODES INCORPORATED

By:  /s/ Carl Wertz

Title:  Chief Financial Officer



"Bank"

UNION BANK OF CALIFORNIA, N.A.

By:  /s/ John Case

Title:  Vice President



                                     -101-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.33
<SEQUENCE>5
<FILENAME>a68061ex10-33.txt
<DESCRIPTION>EXHIBIT 10.33
<TEXT>

<PAGE>   1

                                  EXHIBIT 10.33


                             SUBORDINATION AGREEMENT


To:     Union Bank of California, N.A.
        Commercial Banking Group
        Greater Los Angeles Division
        445 South Figueroa Street, 10th Floor
        Los Angeles, California 90071

        Attention:  John C. Kase
                     Vice President

        The undersigned, Lite-On Power Semiconductor Corp., a Taiwan corporation
("Creditor"), is interested in the financial success of FabTech, Inc., a
Delaware corporation ("Guarantor"), and acknowledges that Union Bank of
California, N.A., a national banking association ("Bank"), has extended various
credit facilities to Diodes Incorporated, a Delaware corporation ("Borrower").
In connection with the extension of such credit facilities to Borrower,
Guarantor has executed and delivered to Bank, or is about to execute and deliver
to Bank, that certain Continuing Guaranty dated as of December 1, 2000, in the
principal amount of Twenty-Six Million Five Hundred Twenty-Eight Thousand Three
Hundred Thirty-Three and 38/100 Dollars ($26,528,333.38) (exclusive of accrued
interest and Bank Expenses (as such term is defined in the Credit Agreement
referred to hereinbelow) (the "Guaranty"). Creditor agrees that the financing
arrangements between Bank and Borrower, and Bank and Guarantor, are in
Borrower's, Guarantor's and Creditor's best interests and, in order to induce
Bank to continue such financing arrangements with Borrower, including the
financing arrangements evidenced by that certain Credit Agreement dated as of
December 1, 2000 (as at any time amended, supplemented or otherwise modified or
restated, the "Credit Agreement"), Creditor agrees as follows:

1. The term "Obligations" is used in this Subordination Agreement (this
"Agreement") in its broadest and most comprehensive sense and shall mean all
present and future indebtedness of Guarantor which may be, from time to time,
incurred by Guarantor, including, but not limited to, any negotiable instruments
evidencing the same, all guaranties (including the Guaranty), debts, demands,
monies, indebtedness, liabilities and obligations owed or to become owing,
including interest, principal, costs and other charges, whether incurred before,
during or after any bankruptcy, reorganization, insolvency, receivership or
similar proceeding, and all claims, rights, causes of action, judgments,
decrees, remedies or other obligations of any kind whatsoever and howsoever
arising, whether voluntary, involuntary, absolute,



                                     -102-
<PAGE>   2

contingent, direct, indirect or by operation of law, together with all expenses
of, for and incidental to collection, including reasonable attorneys' fees.

2. The term "Creditor Obligations" shall mean all of the Obligations owing at
any time by Guarantor to Creditor under the terms of that certain Subordinated
Promissory Note dated December 1, 2000, in the principal amount of Thirteen
Million Five Hundred Forty-Nine Thousand Dollars ($13,549,000), issued by
Guarantor to Creditor, together with any amendments, modifications,
restatements, reissuances or rollovers of such Subordinated Promissory Note.

3. Except as provided in Section 5, below, the Creditor Obligations are hereby
subordinated and subject, in the manner and to the extent described below, to
any and all Obligations owed by Guarantor to Bank, including, but not limited
to, those Obligations arising pursuant to the Guaranty or any other agreement or
agreements between Bank and Guarantor, whether now or hereafter existing, and
whether matured or not (the "Bank Obligations"), so long as any of the Bank
Obligations shall remain unpaid, in whole or in part, or Bank is committed or
otherwise obligated to extend credit to Borrower.

4. So long as any of the Bank Obligations remain unpaid, in whole or in part, or
so long as Bank is committed or otherwise obligated to extend credit to
Borrower, Creditor agrees that, except to the extent that payments under the
Creditor Obligations are permitted under Section 5 below, Creditor shall not:
(a) collect, or receive payment upon, by setoff or in any other manner, all or
any portion of the Creditor Obligations now or hereafter existing; (b) sell,
assign, transfer, pledge or give a security interest in the Creditor Obligations
(except subject expressly to this Agreement); (c) declare or in any other manner
find or hold Guarantor in default under the Creditor Obligations; (d) enforce or
apply any security, now or hereafter existing for the Creditor Obligations; (e)
commence, prosecute or participate in any administrative, legal, or equitable
action against Guarantor concerning the Creditor Obligations; (f) join in any
petition for bankruptcy, assignment for the benefit of creditors, or creditors'
agreement; (g) take, maintain or enforce any lien or security, which is senior
to Bank's interest, in any property, real or personal, to secure the Creditor
Obligations; or (h) incur any obligation to, or receive any loans, advances,
dividends, payments of any kind or gifts from, Guarantor.

5. Notwithstanding the preceding Section, so long as Borrower and Guarantor have
made each and every payment of principal and interest due and owing to Bank, are
not in default under any of Borrower's or Guarantor's agreements with Bank or
Bank has waived such default, and none of the following payments would cause
such default, then Creditor shall be entitled to receive (a) regularly scheduled
payments (but not prepayments or payments resulting from acceleration) of
interest on the Creditor



                                     -103-
<PAGE>   3

Obligations and (b) the regularly scheduled payment (but not a prepayment or a
payment resulting from acceleration) of principal in the amount of Three Million
Five Hundred Forty-Nine Thousand Dollars ($3,549,000) on the Creditor
Obligations that is due and payable on March 31, 2001. In no event shall
Creditor be entitled to receive any payments or prepayments of principal on the
Creditor Obligations (other than the regularly scheduled payment of principal
permitted in the preceding sentence) without Bank's prior written consent, which
Bank may give or withhold in its sole discretion.

6. Except as otherwise expressly agreed to herein, all of the Bank Obligations
now or hereafter existing shall be first paid by Guarantor before any payment
shall be made by Guarantor on the Creditor Obligations. This priority of payment
shall apply at all times until all of the Bank Obligations have been repaid in
full. In the event of any assignment by Guarantor for the benefit of Guarantor's
creditors, any bankruptcy proceedings instituted by or against Guarantor, the
appointment of any receiver for Guarantor or Guarantor's business or assets, or
any dissolution or other winding up of the affairs of Guarantor or of
Guarantor's business, and in all such cases, the officers of Guarantor and any
assignee, trustee in bankruptcy, receiver or other person or persons in charge,
respectively, are hereby directed to pay to Bank the full amount of the Bank
Obligations before making any payments to Creditor.

7. Creditor agrees that it shall place or cause to be placed a legend on the
face of the Subordinated Note evidencing the Creditor Obligations stating that
the payment thereof is subordinated pursuant to the terms of this Agreement, and
any amendments or modifications hereto. Prior to the date of this Agreement,
Creditor agrees to deliver the original Subordinate Note evidencing the Creditor
Obligations to Bank. Creditor agrees to mark all books of account in such manner
as to indicate that payment thereof is subordinated pursuant to the terms of
this Agreement. Creditor agrees to execute any recordable subordination
agreements, financing statement amendments or other documents reasonably
required by Bank to provide notice to others of this Agreement, and agrees to
the recording of any such documents as Bank may require.

8. Creditor agrees that Bank shall have absolute power and discretion, without
notice to Creditor, to deal in any manner with the Bank Obligations, including,
interest, costs and expenses payable by Guarantor to Bank, and any security
therefor including, but not limited to, release, surrender, extension, renewal,
acceleration, compromise or substitution. Creditor hereby waives the right, if
any, to require that Bank marshal, or otherwise proceed to dispose of or
foreclose upon, collateral Bank may have in any manner or order.

9. If, at any time hereafter, Bank shall, in its own judgment, determine to
discontinue the extension of credit to or on behalf of Borrower, Bank may do so,
but only in accordance with the terms of the Credit Agreement. This Agreement,
the



                                     -104-
<PAGE>   4

obligations of Creditor owing to Bank hereunder, and Bank's rights and
privileges hereunder shall continue until payment in full of all of the
Obligations owing to Bank by Guarantor notwithstanding any action or non-action
by Bank with respect to the Obligations or with respect to any collateral
therefor or any guaranties thereof. All rights, powers and remedies hereunder
shall apply to all past, present and future Bank Obligations, including under
successive transactions, any of which may continue, renew, increase, decrease or
from time to time create new Bank Obligations and notwithstanding that from time
to time Bank Obligations theretofore existing may have been paid in full.

10. Creditor further agrees that in case Creditor should, contrary to Section 4
above, take or receive any additional security interest in, or additional lien
by way of attachment, execution or otherwise on any property, whether real or
personal, of Guarantor, or should take or join in any other measure or advantage
contrary to this Agreement, at any time prior to the payment in full of all of
the Bank Obligations, Bank shall be entitled to have the same vacated, dissolved
and set aside by such proceedings at law, or otherwise, as Bank may deem proper,
and this Agreement shall be and constitute full and sufficient grounds therefor
and shall entitle Bank to become a party to any proceedings at law, or
otherwise, initiated by Bank or by any other party, in or by which Bank may deem
it proper to protect its interests hereunder. Creditor agrees that if Creditor
violates this Agreement, Creditor shall be liable to Bank for all losses and
damages sustained by Bank by reason of such breach, including attorneys' fees
and costs incurred by Bank in any such legal action.

11. Except as otherwise expressly agreed to herein, if Creditor shall receive
any payments, security interests or other rights in any property of Guarantor in
violation of this Agreement, such payment or property shall be received by
Creditor in trust for Bank and shall forthwith be delivered and transferred to
Bank.

12. Creditor represents and warrants that Creditor has not previously
subordinated the Creditor Obligations for the benefit of any other person or
entity, and agrees that any such subordinations hereafter executed shall be
expressly made subject and subordinate to the terms of this Agreement. Creditor
further warrants that it has established with Guarantor adequate means of
obtaining, on an ongoing basis, such information as Creditor may require which
may affect the ultimate satisfaction by Guarantor of the Creditor Obligations.
Bank shall have no duty to provide any such information to Creditor.

13. This Agreement shall be binding upon the successors and assigns of Creditor,
and shall inure to the benefit of Bank's successors and assigns.



                                     -105-
<PAGE>   5

14. This Agreement and all rights and liabilities of the parties hereto shall be
governed as to validity, interpretation, enforcement and effect by the laws of
the State of California.

15. In the event of any dispute under this Agreement, the prevailing party shall
be entitled to recover its reasonable attorneys' fees and costs, whether or not
suit is brought.

16. This Agreement shall remain in full force and effect until and unless
Creditor delivers to Bank written notice that this Agreement has been revoked as
to credit granted by Bank subsequent to the delivery of such notice, but
delivery of such notice shall not affect any of Creditor's obligations hereunder
with respect to credit granted by Bank prior to such delivery.

17. This Agreement hereby incorporates any alternative dispute resolution
agreement previously, concurrently or hereafter executed between Creditor and
Bank.

Dated:  December 1, 2000

"Creditor"
LITE-ON POWER SEMICONDUCTOR CORP.
By: /s/ M.K. Lu
        M.K. Lu
        President


Address:

Lite-On Power Semiconductor Corp.
28-1 Wu Chin Street
Ta Wu Lung Ind. Zone Keelung
Taiwan, R.O.C.
Attention:  M.K. Lu
            President

with a copy to:

Lien Cheng International Law Office
13 F-1, Sec. 4, Jen Ai Road
Taipei, Taiwan
Attention: Curtis T.Y. Hsieh, Esquire



                                     -106-
<PAGE>   6

              ACKNOWLEDGMENT AND CONSENT OF GUARANTOR AND BORROWER

        Each of the undersigned hereby waives its confidentiality rights with
respect to the foregoing Subordination Agreement, accepts and consents to such
Subordination Agreement, and agrees to be bound by all of the provisions thereof
and to recognize all priorities and other rights granted thereby to Union Bank
of California, N.A.

Dated:  December 1, 2000

"Guarantor"
FABTECH, INC.
By:  /s/ Walter Buchanan
Title:  President


"Borrower"
DIODES INCORPORATED

By:  Carl Wertz

Title:  Chief Financial Officer



                                     -107-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.34
<SEQUENCE>6
<FILENAME>a68061ex10-34.txt
<DESCRIPTION>EXHIBIT 10.34
<TEXT>

<PAGE>   1

                                  EXHIBIT 10.34

THIS NOTE IS SUBORDINATED PURSUANT TO THE TERMS OF A SUBORDINATION AGREEMENT IN
FAVOR OF UNION BANK OF CALIFORNIA, N.A., DATED AS OF DECEMBER 1, 2000, AND ANY
AMENDMENTS OR MODIFICATIONS THERETO.



                          SUBORDINATED PROMISSORY NOTE


U.S. $13,549,000.00                                             December 1, 2000


    FOR VALUE RECEIVED, the undersigned, FABTECH, INC., a Delaware corporation
    (the "Debtor"), hereby promises to pay to LITE-ON POWER SEMICONDUCTOR CORP.,
    a Taiwan corporation (the "Payee"), the principal sum of Thirteen Million
    Five Hundred Forty-Nine Thousand United States Dollars (U.S.
    $13,549,000.00), together with interest from the date hereof on the unpaid
    principal balance from time to time outstanding at the rate of LIBOR plus
    1.0% (computed on the basis of a 360-day year), principal and interest to be
    payable as follows:

               (a) The amount of U.S. $3,549,000.00, together with interest
accrued thereon, shall be payable on March 31, 2001.

               (b) The principal balance of U.S. $10,000,000.00 shall be payable
in four (4) equal quarterly installments of U.S. $2,500,000.00 each, together
with interest accrued thereon, on June 30, September 30, and December 31, 2001
and March 31, 2002.

The principal of and interest on this Note shall be paid in lawful money of the
United States of America at the principal office of the Debtor, 777 Northwest
Blue Parkway, Lee's Summit, Missouri, or at such other place as, from time to
time, may be designated by the Payee by written notice to the Debtor.

               The Debtor reserves the right at any time and from time to time
to prepay all or any portion of this Note without penalty or premium, but any
such prepayment shall be applied first against interest which has accrued as of
the date thereof and then against the unpaid principal balance.



                                     -108-
<PAGE>   2

    This Note is the promissory note referred to in Section 6.8 of the Stock
    Purchase Agreement dated as of November 28, 2000, among the Debtor and the
    Payee, among others, and is entitled to all of the benefits thereunder. The
    principal of this Note represents U.S. $11,770,000.00 advanced by the Payee
    to the Debtor, together with U.S. $1,779,000.00 in interest accrued thereon
    to the date hereof.

               1.     Subordination.

               The Debtor and the Payee hereby covenant and agree that
notwithstanding anything to the contrary contained in this Note, the payment of
the principal of and interest on this Note expressly hereby is subordinated in
right of payment to the prior payment or provision for payment in full of all
present and future Senior Indebtedness of the Debtor and all renewals,
extensions and refundings of any such Senior Indebtedness. As used herein, the
term "Senior Indebtedness" shall mean the principal of, and interest on, and all
other amounts due on or in connection with, any liability of the Debtor for
money borrowed from a bank or other financial institution, whether now existing
or hereafter incurred. The Payee shall take such further actions, including the
execution of additional subordination agreements, as may be required by any bank
or other financial institution in order to provide further assurances of the
subordination of this Note to all Senior Indebtedness.

               In the event of any distribution of assets of the Debtor upon the
dissolution, liquidation, winding up or reorganization of the Debtor, whether
voluntary or involuntary, and whether in bankruptcy, insolvency or receivership
proceedings, or upon the assignment for the benefit of creditors, sale of all or
substantially all of the assets of the Debtor or the marshalling of the assets
and liabilities of the Debtor, no amount shall be paid by the Debtor hereunder
to the Payee, unless and until all other indebtedness to which this Note is
subordinated shall have been paid in full, or otherwise discharged, or provision
for payment shall have been otherwise made, together with all interest thereon
and all other amounts payable in respect thereof, and the Debtor and any
receiver or trustee in bankruptcy of the Debtor shall make any payments to which
the Payee would otherwise be entitled but for the subordination provisions
hereof directly to the holders of such other indebtedness ratably and to the
extent necessary to pay in full all such other indebtedness, together with
interest thereon and other amounts payable in respect thereof.

               Upon the happening of an event of default (or if an event of
default would result upon any payment with respect to this Note) with respect to
any Senior Indebtedness, as such event of default is defined therein or in the
instrument under which it is outstanding, permitting the holders to accelerate
the maturity thereof, and if the default is other than default in payment of the
principal of or interest on such Senior Indebtedness, upon written notice
thereof given to the undersigned by the



                                     -109-
<PAGE>   3

holders of such Senior Indebtedness or their representative, then, unless and
until such event of default shall have been cured or waived or shall have ceased
to exist, no payment shall be made by the Debtor with respect to the principal
of or interest on this Note.

               In the event the Payee shall receive payment, from any source or
in any manner, of any amount in respect of the principal of or interest on this
Note, or in respect of a transfer or assignment of this Note to the Debtor or
any subsidiary of the Debtor, at a time when, pursuant to the subordination
provisions hereof, the Payee is not entitled to receive payment of such amount,
the Payee shall receive and hold such payment in trust for the holders of all
other indebtedness to which this Note is subordinated and shall on demand pay to
or for the account of the holders of all such other indebtedness ratably and to
the extent necessary to pay in full all such other indebtedness, together with
interest thereon and other amounts payable in receipt thereof, the amount, but
not to exceed the amount, so received.

               Subject to the payment in full of all indebtedness of the Debtor
to which this Note is subordinate, the Payee shall be subrogated to the rights
of the holders of such other indebtedness to receive payment or distribution of
assets of the Debtor applicable to such other indebtedness until this Note shall
be paid in full, and no such payments or distributions to the holders of such
other indebtedness to which this Note is subordinate shall, as between the
Debtor and the Payee, be deemed to be a payment by the Debtor to, or on account
of, this Note, it being understood that the subordination provisions of this
Note are, and are intended solely for the purpose of, defining the relative
rights of the Payee, on the one hand, and the holder of other indebtedness to
which this Note is subordinate, on the other hand, and nothing contained herein
is intended to or shall impair, as between the Debtor and the Payee, the
obligation of the Debtor, which is unconditional and absolute, to pay to the
Payee the principal of and interest on this Note as and when the same shall
become due and payable in accordance with the terms hereof.

               The Payee, by acceptance hereof, acknowledges and agrees that
each holder of indebtedness to which this Note is subordinated shall be deemed
to have acquired such indebtedness in reliance upon the subordination provisions
of this Note.

               3.     Waivers.

               The Debtor, for itself and its legal representatives, successors
and assigns, expressly waives presentment, protest, demand, notice of dishonor,
notice of nonpayment, notice of maturity, notice of protest, presentment for the
purpose of accelerating maturity, and diligence in collection of every kind and
to the fullest extent permitted by law, the right to plead any statute of
limitations as a defense of any



                                     -110-
<PAGE>   4

demand hereunder, and consents that the Payee may extend the time for payment or
otherwise modify the terms of payment of any part or the whole of the debt
evidenced hereby.

               4.     Governing Law.

               This Note in all respects shall be governed by and construed
under the laws of the State of California applicable to contracts made and to be
performed wholly within that state.

               5.     Assignment.

               The Payee may assign its right, title and interest in and to this
Note to any person who controls, is controlled by or is under common control
with the Payee in connection with its own liquidation and dissolution, and the
term "Payee" shall be deemed to include any such person.

               Executed at Los Angeles, California as of the 1st day of
December, 2000.

                                       FABTECH, INC.

                                       By: /s/ Walter Buchanan, President



                                     -111-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.17
<SEQUENCE>7
<FILENAME>a68061ex99-17.txt
<DESCRIPTION>EXHIBIT 99.17
<TEXT>

<PAGE>   1

                                  EXHIBIT 99.17

November 28, 2000


Independent Committee of the Board of Directors of
Diodes Incorporated

Gentlemen:

               Duff & Phelps, LLC ("Duff & Phelps") has been engaged by the
Independent Committee of the Board of Directors of Diodes Incorporated ("Diodes"
or the "Company") as independent financial advisor. Specifically, Duff & Phelps
has been engaged to provide an opinion (the "Opinion") as to whether the
Proposed Transaction (as defined below) is fair to the Company and its
shareholders from a financial point of view.


Diodes is a leading manufacturer of discrete semiconductors that are used by the
electronics, automotive, computing and telecommunications industries in North
America and Asia. Diodes' largest shareholder is Lite-On Power Semiconductor
Corporation ("LPSC"), a unit of the Lite-On Group of the Republic of China. The
Lite-On Group, a Taiwanese consortium with worldwide sales exceeding $4.5
billion, is a leading manufacturer of semiconductors, computer peripherals and
communication products. Pursuant to the Stock Purchase Agreement dated November
28, 2000, by and among Diodes, LPSC and FabTech, Inc. ("FabTech"), Diodes
proposes to acquire all of FabTech's issued and outstanding capital stock, which
is currently held by LPSC, for a purchase price of up to $55 million, consisting
of the "Initial Purchase Price" and the "Earnout," each as defined below (the
"Proposed Transaction").

The Initial Purchase Price is equal to the amount, if any, by which $25 million
exceeds the sum of the following two components:

        1.  The outstanding principal balance and accrued interest of FabTech's
            indebtedness to Diodes, LPSC and Citibank, on the closing date of
            the Proposed Transaction; and,

        2.  Any liabilities of FabTech as of the closing date of the Proposed
            Transaction, except liabilities disclosed or reserved against on
            FabTech's October 31, 2000 balance sheet and other than liabilities
            which arise in the ordinary course of business.

The Earnout of up to $30 million will be determined over the fiscal years ending
December 31, 2001 through December 31, 2004, and will be calculated in
accordance with the following table, based upon FabTech's actual earnings before
interest and taxes (EBIT) as a percent of the EBIT forecast prepared by FabTech
management. The Earnout will be payable in cash on or before March 31 following
the close of each fiscal year.



                                     -112-
<PAGE>   2

<TABLE>
<CAPTION>
                                   Percent of EBIT Forecast Realized
Fiscal         EBIT          --------------------------------------------
Year         Forecast         130%         100%         70%          40%
- ----         --------        ------       ------       ------       -----
                                            Earnout Amount
                             --------------------------------------------
<S>          <C>            <C>          <C>          <C>           <C>
2001           $7,326        $ 4,000     $ 2,667      $ 1,333          $0
2002           11,887          6,500       4,333        2,167           0
2003           15,622          9,000       6,000        3,000           0
2004           19,110         10,500       7,000        3,500           0
                              ------       -----        -----       -----

                             $30,000     $20,000      $10,000          $0
                             =======     =======      =======       =====
</TABLE>

The Earnout for each year will be computed in increments of 1% on EBIT levels
achieved between 40% and 130% of FabTech management's EBIT forecasts.
Accordingly, the Earnout will increase from $0 at 40% of the EBIT forecast, to
$20.0 million at 100% of FabTech's EBIT forecast. These increments will continue
up to a maximum of 130% of FabTech's EBIT forecast at which point the cumulative
Earnout payments would total $30.0 million. The Earnout with respect to any
fiscal year will be reduced by the Management Incentive (as defined below) for
that year, and will be computed based upon FabTech's actual EBIT for that year,
without any deduction (or credit) due to any shortfall (or overage) in any prior
or subsequent year. A portion of the Earnout for each fiscal year shall be
deemed to be imputed interest at a rate equal to the lowest applicable federal
rate for the 3-month period ending on the last day of the calendar month in
which the closing date occurs. For the Earnout payable with respect to 2001,
2002 or 2003, the applicable short-term federal rate shall be used. For the
Earnout payable with respect to any subsequent year, the applicable mid-term
federal rate shall be used.

In the event the Earnout payable with respect to any year is less than the
Management Incentive, LPSC shall indemnify Diodes for the amount by which the
Management Incentive exceeds the Earnout for such fiscal year.

Pursuant to the Proposed Transaction, FabTech has entered into a management
incentive agreement with certain members of FabTech's management team (the
"Management Incentive Agreements") pursuant to which FabTech is obligated to pay
such members, as mutually agreed upon by LPSC and Diodes, a management incentive
pool (the "Management Incentive") which will consist of (i) an amount equal to
$975,000 to be paid on or before June 30, 2001, to be recorded on FabTech's
income statement as an expense and accrued liability in the month the management
incentive agreement is signed; plus (ii) $1.5 million to be paid in four equal
annual installments of $375,000 payable on each of March 31, 2002, 2003, 2004
and 2005; plus (iii) an amount based on FabTech's EBIT that shall not exceed
$50,000 in 2001, $175,000 in 2002, $300,000 in 2003 and $375,000 in 2004,
payable on each March 31, 2002, 2003, 2004 and 2005.

In contemplation of the Proposed Transaction, LPSC has entered into a Volume
Purchase Agreement with FabTech, dated October 25, 2000, which specifies LPSC's
obligation to purchase from FabTech, and FabTech's obligation to manufacture and
sell to LPSC, certain minimum unit volumes of products for each of the four
years ending December 31, 2001 to 2004. The purchase price for these purchases
is the best price offered by FabTech to its commercial accounts purchasing
comparable quantities of products. In the event FabTech offers special discounts
or other short-term promotional pricing for specific products, LPSC shall have
first and equal opportunity to purchase FabTech products under such promotions
and at the promotional prices. Further, LPSC has agreed not to compete, directly
or indirectly, with the schottky wafer business of FabTech for a four-year
period.



                                     -113-
<PAGE>   3

For purposes of our Opinion and in connection with our review of the Proposed
Transaction, we have, among other things:

1.  Met with various members of FabTech's management to discuss the history,
    current operations and future outlook of FabTech as well as the Proposed
    Transaction.

2.  Met with the Independent Committee of the Board of Directors of Diodes to
    discuss the Proposed Transaction.

3.  Held discussions with various members of Diodes' management, including: C.H.
    Chen, Chief Executive Officer; Carl Wertz, Chief Financial Officer; Mark
    King, Vice President, Sales & Marketing; Larry Katz, Financial Analyst; and,
    Michael R. Giordano, member of the Board of Directors.

4.  Toured FabTech's facilities in Lee's Summit, Missouri, in April 2000 and
    August 2000.

5.  Reviewed FabTech's financial statements including: audited financial
    statements from 1996 through 1999; interim unaudited financial statements
    for the nine months ended September 30, 2000; and, current financial
    projections for 2000 through 2005, as prepared by FabTech management.

6.  Reviewed FabTech's presentation to Diodes' management, dated July 10, 2000,
    and FabTech's management report to LPSC for July 2000.

7.  Reviewed FabTech's board minutes for the last three years, as well as
    FabTech's articles of incorporation and bylaws.

8.  Reviewed FabTech's loan agreements with Diodes and LPSC.

9.  Reviewed the Stock Purchase Agreement by and among Diodes, LPSC and FabTech,
    dated November 28, 2000.

10. Reviewed the Volume Purchase Agreement between LPSC and FabTech, dated
    October 25, 2000, as well as the Management Incentive Agreements between
    FabTech and certain members of its management team.

11. Reviewed applicable industry and economic information.

12. Identified comparable public companies to FabTech and reviewed their SEC
    filings, analyst reports and historical stock prices.

13. Performed such other review and analyses as we deemed necessary.



                                     -114-
<PAGE>   4

Our Opinion is based upon an analysis of the foregoing in light of our
assessment of the general, economic and financial market conditions as they can
be evaluated by us as of the date hereof. Events occurring after the date hereof
could materially affect the assumptions used in preparing our Opinion. We have
not undertaken to reaffirm or revise the Opinion or otherwise comment upon any
events occurring after the date hereof.

In connection with our Opinion, with your permission and without any independent
verification, we have relied on the accuracy and completeness of all the
financial and other information reviewed by us, furnished, or otherwise
communicated to us by FabTech or obtained by us from publicly available sources.
Any inaccuracies in the information on which we relied could materially affect
our Opinion. Duff & Phelps has previously served as financial advisor to the
Company.

In rendering our Opinion, we have assumed that the Proposed Transaction occurs
on terms that are described in the Stock Purchase Agreement dated November 28,
2000. Nonetheless, it should be recognized that we are not making any
recommendation as to whether Diodes' Independent Committee of the Board of
Directors should vote in favor of the Proposed Transaction.

This Opinion is for the information of the Independent Committee of the Board of
Directors of Diodes and is not to be used, circulated, quoted or otherwise
referred to for any other purpose, except in each case with our prior written
consent which shall not be unreasonably withheld.

Based upon the foregoing, it is our Opinion that consideration to be paid by the
Company in the Proposed Transaction is fair to the Company and its shareholders
from a financial point of view.

                                       Respectfully submitted,
                                       /s/ Duff  Phelps, LLC


                                       Duff & Phelps, LLC



                                     -115-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.18
<SEQUENCE>8
<FILENAME>a68061ex99-18.txt
<DESCRIPTION>EXHIBIT 99.18
<TEXT>

<PAGE>   1

                                  EXHIBIT 99.18



DIODES INCORPORATED

FOR IMMEDIATE RELEASE

       DIODES, INC. ANNOUNCES SUCCESSFUL COMPLETION OF FABTECH ACQUISITION
          C.H. Chen Discusses Expectations for Fourth Quarter and 2001

               WESTLAKE VILLAGE, CALIFORNIA -- DECEMBER 5, 2000 -- Diodes
Incorporated (Nasdaq: DIOD), a leading manufacturer and supplier of high quality
discrete semiconductors, primarily to the communications, computing, electronics
and automotive industries, today announced that it has completed the acquisition
of FabTech, Inc., a 5-inch wafer foundry, specializing in Schottky products.

               FabTech, based in Lee's Summit, Missouri, operates out of a
70,000 square foot, state-of-the-art manufacturing facility that includes a
16,000 sq. ft. clean room. At a senior level, the company boasts eight engineers
with a combined 190 years experience in the semiconductor industry. FabTech
currently has eight patents pending in technologies from ruggedized Schottky
devices to thirty-five hundred volt Ultra-Fast devices.

               The acquisition of FabTech significantly advances Diodes'
strategy of becoming a total solution provider for the discrete semiconductor
industry, covering the full range of manufacturing and product development.
FabTech will also enable the Company to intensify R&D initiatives aimed at
developing innovative products in the areas of miniaturization, integrated
discretes, and developing chip-scale discretes.

               Commenting on the acquisition, C.H. Chen, President and CEO of
Diodes Incorporated said, "We are delighted to announce the completion of this
important strategic purchase for our Company. The addition of FabTech will
enable us to accelerate our drive into higher-margin, proprietary product lines
and will make a significant contribution toward our goal of positioning Diodes
as a vertically integrated manufacturer and supplier of discrete semiconductors
at the forefront of next-generation discrete technology."

               FabTech was acquired from Lite-On Power Semiconductor Corporation
(LPSC) for approximately $25 million, which includes the assumption of
approximately $19 million in debt, and a cash payment to LPSC of approximately
$6 million. LPSC, which is part of the $4.5 billion Lite-On Group, owns
approximately 38% of Diodes' outstanding shares. The deal includes an additional
earn-out for meeting specified earnings targets over a four-year period.

               The acquisition was financed internally through bank credit
facilities, and is expected to be accretive to earnings in 2001.

               Mr. Chen also provided guidance on the Company's expectations for
the remainder of year 2000, as well as an update for 2001.

               "As we discussed during our third quarter conference call, we
believe that this acquisition and the continued expansion of our Chinese
manufacturing facility will position us to outperform the discrete semiconductor
industry in 2001, consistent with our record over the past five years," said Mr.
Chen. "However, inventory adjustments among several of our key distributors have
led us to revise our top-line expectations for the fourth quarter. We now
anticipate fourth-quarter revenue to be in the range of $28 to $30 million, as
compared to $23.2 million in the fourth quarter of 1999."

               Mr. Chen noted that based upon stable gross margins and
reductions of SG&A expenses, expectations for year 2000 earnings per share are
in the range of $1.75 to $1.80. The fourth quarter will assure a



                                     -116-
<PAGE>   2

record year for Diodes, with revenues increasing approximately 50% and net
income approximately 200% from last year.

               "Moving forward into 2001, we believe that our competitive cost
structure, superior customer service and quality products, and continued
introduction of value-added product lines will position the Company to continue
to capture market share, while building value for our shareholders," concluded
Mr. Chen.

               ABOUT DIODES INCORPORATED

               Diodes, Inc. (Nasdaq: DIOD) is a leading manufacturer and
supplier of high-quality discrete semiconductor products, serving the
communications, computer, electronics and automotive markets. The Company
operates two Far East subsidiaries, Diodes-China (QS-9000 & ISO-14001 certified)
in Shanghai and Diodes-Taiwan (ISO-9000 certified) in Taipei. Diodes-China's
manufacturing focus is on surface-mount devices destined for wireless devices,
notebook computers, pagers, PCMCIA cards and modems, among others. Diodes-Taiwan
is our Asia-Pacific sales, logistics and distribution center. The Company's
newly acquired 5" wafer foundry, Diodes-FabTech, specializes in Schottky
products and is located just outside Kansas City, Missouri. The Company's
ISO-9000 corporate sales, marketing, engineering and logistics headquarters is
located in Southern California. For further information, visit the Company's
website at http://www.diodes.com.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of
1995: Any statements set forth above that are not historical facts are
forward-looking statements that involve risks and uncertainties that could cause
actual results to differ materially from those in the forward-looking
statements. Potential risks and uncertainties include, but are not limited to,
such factors as the Company's ability to successfully integrate FabTech within
its existing operations, the Company's ability to develop and market new
discrete technologies, management's expectations with regards to future
financial performance, fluctuations in product demand, the introduction of new
products, the Company's ability to maintain customer and vendor relationships,
technological advancements in the semiconductor industry, impact of competitive
products and pricing, growth in targeted markets, risks of foreign operations,
and other information detailed from time to time in the Company's filings with
the United States Securities and Exchange Commission.

Source:  Diodes Incorporated

CONTACT:  Crocker Coulson, Account Executive, Coffin Communications Group;

               (818) 789-0100 e-mail: crocker.coulson@coffincg.com or Carl
Wertz, Chief Financial Officer, Diodes Incorporated; (805) 446-4800

Recent news releases, annual reports, and SEC filings are available at the
Company's website: http://www.diodes.com. Written requests may be sent to
Investor Relations, Diodes Incorporated, 3050 E. Hillcrest Drive, Westlake
Village, CA 91362, or they may be e-mailed to: diodes-fin@diodes.com.


                                      # # #



                                     -117-
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
