Rev. 6
Exhibit 10.21
Joint Venture Agreement for
Kopin Corporation, Bright LED, and
KTC
12 November 2004
The parties entering into this Joint Venture
Agreement:
1. Kopin Corporation of Massachusetts, U.S.A.
(Kopin)
2. Bright LED Electronics Corporation of Taiwan
(Bright LED)
3. KTC of Taiwan (KTC)
Whereas Kopin has substantial InGaN LED die
manufacturing technology and capacity in the U.S.A., and
Whereas Bright LED, being one of the largest LED
packaging manufacturers in Taiwan, has an extensive China operation
management experience, and low-cost manufacturing management
know-how, and
While KTC has existing epitaxial wafer
manufacturing facility and experience, and
Now that Kopin, Bright LED, and KTC want to form
a Joint Venture (JV) company to start LED Die Manufacturing with
Die manufacturing in China and Epi Manufacturing in Taiwan to
address the high-volume Blue and Green LED demand.
Here within are the terms agreed among the three
parties:
A. Business Model and Investment
Scale
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1.
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Kopin, Bright
LED, and KTC will form a JV company in an oversea location such as
Hong Kong, Bermuda, or British Virgin Island. This JV company will
wholly own a LED Die Manufacturing company in China, and Epi
Manufacturing company in Taiwan.
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2.
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The initial
investment will be US$13M, of which Kopin and Bright LED will each
contribute US$3M, and KTC will contribute $2M. The remaining US$5M
will be invested by invited investors from outside. Kopin will hold
3M shares, Bright LED will hold 3M shares, KTC will hold 2M shares
and the outside investors will hold 3.5M shares of the
JV.
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3.
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The JV will set up the InGaN LED
Die Manufacturing line in China to
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Rev. 6
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produce blue and green LED dies,
starting with a capacity of about 30M dies per month. The JV will
set up the InGaN Epi Manufacturing at KTC factory in Taiwan, with
the equipments consigned to KTC. The JV will purchase the Epi
wafers from KTC as OEM order.
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4.
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As Bright LED
is consuming a large quantity of LED dies each month, Bright LED
may purchase a reasonable quantity of LED dies from the JV. This
will help to bring up the production capacity and give initial
business to the JV. Again, to ensure competitiveness of all
parties, this relationship is not compulsory. The JV is also free
to sell LED dies to other customers.
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5.
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In case the
cost structure of the JV is not competitive on the market, the
three parties shall work closely to find a solution to lower the
cost and make JV competitive on the market. The solution may
involve technical aspects as well as management aspects.
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6.
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The JV should
use a company name neutral to and mutually accepted by Kopin,
Bright LED, and KTC.
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7.
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A Management
Council, consisting at least of Chairman of Bright LED, Chairman of
Kopin, Chairman of KTC and the President / General Manager of the
JV, shall be formed to resolve the future product transfer pricing
issues. The Management Council shall meet quarterly. However, in
the first year of operation, the Council shall meet once every two
months. The basic principle is that the JV shall sell the LED dies
to Bright LED at fair market prices. The buying and sourcing shall
also be open to the external customers and suppliers to make all
involved parties competitive.
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B. Kopin’s Contribution and
Obligations
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1.
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In addition to
its cash contribution as described under A.2 above, Kopin will
contribute to the JV the InGaN LED Die Process and Epi know-how and
technology free of charge. However, the JV will pay for the actual
cost incurred during the process of transferring the technology to
the JV’s China and Taiwan operation.
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2.
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Kopin has the
responsibility for identifying technical and senior management
candidates to be recruited to run the new operation. The final
personnel decision will be mutual between Bright LED, KTC and
Kopin.
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3.
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Kopin will
transfer the InGaN epitaxial wafer production process and
equipments to JV to be located at KTC in Taiwan. KTC will
setup
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