Exhibit 10.18


 


WARRANTY AGREEMENT


 


This Warranty Agreement (the “Agreement”) is
entered into effective as of March 13th , 2009 (the “Effective Date”) between
Semi-Photonics Co., Ltd., a company with offices at 7F, No. 13 Ke
Jung Rd., Chu-Nan Site, Hsinchu Science Park, Chu-Nan 350, Taiwan (“Company”),
and LiteOn Technology Corporation  , a
company with business address at 12F, 392, Ruey Kuang Road, Neihu, Taipei,114,
Taiwan, R.O.C. (“Customer”).


 


WHEREAS, Company is the manufacturer of the
Products (described below), and Customer desires to purchase the Products from
the Company; and


 


WHEREAS, the parties desire to enter into this
Agreement to set forth the terms and conditions of the warranty obligations
relating to the sale and purchase of the Products.


 


NOW, THEREFORE, in consideration of the mutual
promises and covenants set forth below, the parties agree as follows:


 


1.             Definitions.


 


(a)           “IP
Claim” has the meaning as set forth in Section 2(a).


 


(b)           “Excluded
Claim” shall have the meaning as set forth in Section 2(b).


 


(c)           “IP
Rights” means any Japan, Korea, Taiwan, China, European Union and US patent
issued as of the date hereof.


 


(d)           “Products”
means the Company’s LED devices as set forth in Exhibit A that are
manufactured solely to the Company’s specifications.


 


2.             Company’s Warranty.


 


(a)           Subject
to the terms and conditions herein set forth and so long as Customer is not in
breach of its obligations, if a third party makes a claim against Customer that
the Products sold to Customers directly infringes on any IP Rights of such
third party (“IP Claim”), the Company will defend, indemnify and hold Customer
and its affiliates harmless against all damages and costs based on such claim
of infringement which are finally awarded against Lite-On in any such suit or
proceeding or paid by way of settlement against the IP Claim; provided that: (a) Customer
promptly notifies Company in writing no later than ten days after Customer’s
receipt of notification of the IP Claim; (b) Customer allows the Company
to assume sole control of the defense of such IP Claim and all related
settlement negotiations; and (c) Customer provides the Company, at the
Company’s request, with the assistance, information and authority necessary to
defend the IP Claim.  As used herein, affiliates
shall mean all entities which are controlled by Customer through ownership of
securities representing more than fifty percent (50 %) of the voting capital
stock. Customer may participate in the defense or settlement of any such claim
at its own expense.  The Company agrees
that it will not settle any claim which would impose any obligation on Customer
without the Customer’s prior written consent.


 


(b)           If
the Products become, or in the Company’s opinion is likely to become, the
subject of an infringement claim, the Company may, at its sole discretion, (a) procure
for Customer the right to continue using the Products, (b) modify or
replace the Products so that there is no infringement, or (c) if neither
of the foregoing options are reasonably available to the Company, accept the
return of the


 


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infringed Products and refund to the Customer the
amounts paid for the infringed Products. Notwithstanding the foregoing, the
Company shall have no liability or obligation for any claim arising out of or
related to (i) the Company’s compliance with the Customer’s instructions,
drawings, designs or functional specifications, (ii) any products or
components not supplied by the Company to Customer, (iii) the combination
of any Products with any other products, components, process or material not
provided by the Company if such claim would not have occurred without such
combination; provided however, if the cause of infringement arises from any IP
Rights directly related to package of the Products, Company’s indemnification
obligation shall be excluded, (iv) any modification to the Products not
made by the Company, (iv) the failure to use replacement or modified
Products provided by the Company, or (v) any use of the Product in a
manner other than in accordance with the Company’s specifications
(collectively, the “Excluded Claim”). 
The foregoing states the Company’s sole obligation for any claim based
upon or related to any alleged infringement of any patent or other intellectual
property rights.


 


(c)           The
Company’s aggregate liability in connection with the sales and purchase of the
Products, regardless of the form of action giving rise to such liability
(whether expressed or implied, and whether in contract, tort, infringement or
otherwise), and including without limitation any liability under Section 2,
shall not exceed the purchase amount paid by Customer for the infringed
Products during the ten year period prior to the IP Claim final consequential
or incidental damages of any kind (including without limitation lost profits),
even if it has been advised of the possibility of damages.  The Company specifically disclaims any and
all warranties, either express or implied, including without limitation
warranties of fitness of a particular purpose, of merchantability or against
infringement.  No action, regardless of
form, arising out of or in any way connected with this Agreement or products
furnished by the Company may be brought by Customer more than fifteen year
after the cause of action accrued.  The
limitations of liability contained in this Agreement are fundamental part of
the basis of each party’s bargain hereunder, and neither party would enter into
this Agreement absent such limitations. 
The Company’s obligations hereunder shall be void if any provision under
this Agreement is breached.


 


3.             Confidential
Information.  This Agreement, including its existence as
well as the contents thereof, shall be deemed the Company’s “Confidential
Information.” Without prior written consent of the Company, Customer shall not
disclose the Confidential Information to any person within or without Customer’s
company other than to its employees, executive officers and Board members on a
need-to-know basis.


 


4.             General
Provisions.  This Agreement shall in all respected be
governed by Taiwan, R.O.C. law. Venue shall be Taipei, Taiwan, and all
proceedings shall be conducted in English. 
Any notice hereunder shall be deemed duly given if delivered personally,
the next day if by facsimile with receipt acknowledged mailed to the other by
prepaid registered mail, or after five days if sent by international express
carrier.  This Agreement shall be
effective from the Effective Date until the second anniversary, unless earlier
terminated by written notice by either party. 
Notwithstanding the foregoing, Company’s liabilities and obligations
under this Agreement shall survive any expiration or termination pursuant to
the governing law of this Agreement. This Agreement constitutes the entire
agreement and final understanding of the parties with respect to the subject
matter hereof supersedes and terminates any and all prior communications and
understandings.


 


[Signature Page Follows]


 


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IN WITNESS WHEREOF, the parties have executed this
Warranty Agreement effective as of the Effective Date.


 




	
  SEMI-PHOTONICS CO., LTD.

  	
   

  	
  LiteOn Technology Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Chuong Tran

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Chuong Tran

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  President & COO

  	
   

  	
  Title:

  	
   

  






 


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