1
EXHIBIT 10.24
TERM LOAN B FACILITY NOTE
Borrower Name
DIODES INCORPORATED
----------------------------------------------- ------------------------------------
Borrower Address Office Loan Number
0000 Xxxx Xxxxxxxxx Xxxxx 00000
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000-3154
Maturity Date Amount
April 3, 2003 $3,500,000
Woodland Hills, California $3,500,000 Effective as of April 3, 1998
FOR VALUE RECEIVED, on April 3, 2003, the undersigned ("Borrower") promises to
pay to the order of UNION BANK OF CALIFORNIA, N.A. ("Bank"), as indicated below,
the principal sum of Three Million Five Hundred Thousand Dollars ($3,500,000),
or so much thereof as is disbursed, together with interest on the balance of
such principal from time to time outstanding, at the per annum rate or rates and
at the times set forth below.
1. PAYMENTS
PRINCIPAL PAYMENTS. Borrower shall pay principal in installments of Fifty-Eight
Thousand Three Hundred Thirty-Three and 33/100 Dollars ($58,333.33) each on the
last day of each month, commencing April 30, 1998. The availability under this
note shall be reduced on the same day and in the same amount as each scheduled
principal payment.
INTEREST PAYMENTS. Borrower shall pay interest on the outstanding principal
amount hereof on the last day of each month, commencing April 30, 1998. Should
interest not be paid when due, it shall become part of the principal and bear
interest as herein provided. All computations of interest under this note shall
be made on the basis of a year of 360 days, for actual days elapsed.
(a) BASE INTEREST RATE. At Borrower's option, amounts outstanding
hereunder in minimum amounts of at least $100,000 shall bear interest at
a rate, based on an index selected by Borrower, which is Bank's LIBOR
Rate for the Interest Period selected by Borrower plus 1.10% per annum.
The Base Interest Rate may not be changed, altered or otherwise modified
until the expiration of the Interest Period selected by Xxxxxxxx. The
exercise of interest rate options by Xxxxxxxx shall be as recorded in
Bank's records, which records shall be prima facie evidence of the
amount borrowed under either interest option and the interest rate;
provided, however, that failure of Bank to make any such notation in its
records shall not discharge Borrower from its obligations to repay in
full with interest all amounts borrowed. In no event shall any Interest
Period extend beyond the maturity date of this note.
To exercise this option, Borrower may, from time to time with respect to
principal outstanding on which a Base Interest Rate is not accruing, and
on the expiration of any Interest Period with respect to principal
outstanding on which a Base Interest Rate has been accruing, select an
index offered by Bank for a Base Interest Rate Loan and an Interest
Period by telephoning an authorized lending officer of Bank located at
the banking office identified below prior to 10:00 a.m., Pacific time,
on any Business Day and advising that officer of the selected index, the
Interest Period and the Origination Date selected (which Origination
Date, for a Base Interest Rate Loan based on the LIBOR Rate, shall
follow the date of such selection by no more than two (2) Business
Days).
20
2
Bank will mail a written confirmation of the terms of the selection to
Borrower promptly after the selection is made. Failure to send such
confirmation shall not affect Bank's rights to collect interest at the
rate selected. If, on the date of the selection, the index selected is
unavailable for any reason, the selection shall be void. Bank reserves
the right to fund the principal from any source of funds notwithstanding
any Base Interest Rate selected by Borrower.
(b) VARIABLE INTEREST RATE. All principal outstanding hereunder which is
not bearing interest at a Base Interest Rate shall bear interest at a
rate per annum equal to the Reference Rate, which rate shall vary as and
when the Reference Rate changes.
Borrower shall pay all amounts due under this note in lawful money of
the United States at Bank's San Xxxxxxxx Valley Commercial Banking
Office, or such other office as may be designated by Bank from time to
time.
2. LATE PAYMENTS. If any payment required by the terms of this note shall remain
unpaid ten days after same is due, at the option of Bank, Borrower shall pay a
fee of $100 to Bank.
3. INTEREST RATE FOLLOWING DEFAULT. In the event of default, at the option of
Bank, and, to the extent permitted by law, interest shall be payable on the
outstanding principal under this note at a per annum rate equal to five percent
(5%) in excess of the interest rate specified in paragraph 1.b, above,
calculated from the date of default until all amounts payable under this note
are paid in full.
4. PREPAYMENT
(a) Amounts outstanding under this note bearing interest at a rate based
on the Reference Rate may be prepaid in whole or in part at any time,
without penalty or premium. Borrower may prepay amounts outstanding
under this note bearing interest at a Base Interest Rate in whole or in
part provided Borrower has given Bank not less than five (5) Business
Days prior written notice of Xxxxxxxx's intention to make such
prepayment and pays to Bank the liquidated damages due as a result.
Liquidated Damages shall also be paid, if Bank, for any other reason,
including acceleration or foreclosure, receives all or any portion of
principal bearing interest at a Base Interest Rate prior to its
scheduled payment date. Liquidated Damages shall be an amount equal to
the present value of the product of: (i) the difference (but not less
than zero) between (a) the Base Interest Rate applicable to the
principal amount which is being prepaid, and (b) the return which Bank
could obtain if it used the amount of such prepayment of principal to
purchase at bid price regularly quoted securities issued by the United
States having a maturity date most closely coinciding with the relevant
Base Rate Maturity Date and such securities were held by Bank until the
relevant Base Rate Maturity Date ("Yield Rate"); (ii) a fraction, the
numerator of which is the number of days in the period between the date
of prepayment and the relevant Base Rate Maturity Date and the
denominator of which is 360; and (iii) the amount of the principal so
prepaid (except in the event that principal payments are required and
have been made as scheduled under the terms of the Base Interest Rate
Loan being prepaid, then an amount equal to the lesser of (A) the amount
prepaid or (B) 50% of the sum of (1) the amount prepaid and (2) the
amount of principal scheduled under the terms of the Base Interest Rate
Loan being prepaid to be outstanding at the relevant Base Rate Maturity
Date). Present value under this note is determined by discounting the
above product to present value using the Yield Rate as the annual
discount factor.
(b) In no event shall Bank be obligated to make any payment or refund to
Borrower, nor shall Borrower be entitled to any setoff or other claim
against Bank, should the return which Bank could obtain under this
prepayment formula exceed the interest that Bank would have received if
no prepayment had occurred. All prepayments shall include payment of
accrued interest on the principal amount so prepaid and shall be applied
to payment of interest before application to principal. A determination
by Bank as to the prepayment fee amount, if any, shall be conclusive.
21
3
(c) Bank shall provide Borrower a statement of the amount payable on
account of prepayment. Borrower acknowledges that (i) Bank establishes a
Base Interest Rate upon the understanding that it apply to the Base
Interest Rate Loan for the entire Interest Period, and (ii) any
prepayment may result in Bank incurring additional costs, expenses or
liabilities; and Borrower agrees to pay these liquidated damages as a
reasonable estimate of the costs, expenses and liabilities of Bank
associated with such prepayment.
5. DEFAULT AND ACCELERATION OF TIME FOR PAYMENT. Default shall include, but not
be limited to, any of the following: (a) the failure of Borrower to make any
payment required under this note when due; (b) any breach, misrepresentation or
other default by Borrower, any guarantor, co-maker, endorser, or any person or
entity other than Borrower providing security for this note (hereinafter
individually and collectively referred to as the "Obligor") under any security
agreement, guaranty or other agreement between Bank and any Obligor; (c) the
insolvency of any Obligor or the failure of any Obligor generally to pay such
Obligor's debts as such debts become due; (d) the commencement as to any Obligor
of any voluntary or involuntary proceeding under any laws relating to
bankruptcy, insolvency, reorganization, arrangement, debt adjustment or debtor
relief; (e) the assignment by any Obligor for the benefit of such Obligor's
creditors; (f) the appointment, or commencement of any proceeding for the
appointment of a receiver, trustee, custodian or similar official for all or
substantially all of any Obligor's property; (g) the commencement of any
proceeding for the dissolution or liquidation of any Obligor; (h) the
termination of existence or death of any Obligor; (i) the revocation of any
guaranty or subordination agreement given in connection with this note; (j) the
failure of any Obligor to comply with any order, judgment, injunction, decree,
writ or demand of any court or other public authority; (k) the filing or
recording against any Obligor, or the property of any Obligor, of any notice of
levy, notice to withhold, or other legal process for taxes other than property
taxes; (l) the default by any Obligor personally liable for amounts owed
hereunder on any obligation concerning the borrowing of money; (m) the issuance
against any Obligor, or the property of any Obligor, of any writ of attachment,
execution, or other judicial lien; or (n) the deterioration of the financial
condition of any Obligor which results in Bank deeming itself, in good faith,
insecure. Upon the occurrence of any such default, Bank, in its discretion, may
cease to advance funds hereunder and may declare all obligations under this note
immediately due and payable; however, upon the occurrence of an event of default
under d, e, f, or g, all principal and interest shall automatically become
immediately due and payable.
6. ADDITIONAL AGREEMENTS OF BORROWER. If any amounts owing under this note are
not paid when due, Borrower promises to pay all costs and expenses, including
reasonable attorneys' fees, incurred by Bank in the collection or enforcement of
this note. Borrower and any endorsers of this note, for the maximum period of
time and the full extent permitted by law, (a) waive diligence, presentment,
demand, notice of nonpayment, protest, notice of protest, and notice of every
kind; (b) waive the right to assert the defense of any statute of limitations to
any debt or obligation hereunder; and (c) consent to renewals and extensions of
time for the payment of any amounts due under this note. If this note is signed
by more than one party, the term "Borrower" includes each of the undersigned and
any successors in interest thereof; all of whose liability shall be joint and
several. The receipt of any check or other item of payment by Bank, at its
option, shall not be considered a payment on account until such check or other
item of payment is honored when presented for payment at the drawee Bank. Bank
may delay the credit of such payment based upon Bank's schedule of funds
availability, and interest under this note shall accrue until the funds are
deemed collected. In any action brought under or arising out of this note,
Xxxxxxxx and any Obligor, including their successors and assigns, hereby consent
to the jurisdiction of any competent court within the State of California, as
provided in any alternative dispute resolution agreement executed between
Borrower and Bank, and consent to service of process by any means authorized by
said state's law. The term "Bank" includes, without limitation, any holder of
this note. This note shall be construed in accordance with and governed by the
laws of the State of California. This note hereby incorporates any alternative
dispute resolution agreement previously, concurrently or hereafter executed
between Borrower and Bank.
7. CHANGE IN CIRCUMSTANCES
(a) INABILITY TO DETERMINE RATES. If, on or before the first day of any
Interest Period for any Base Interest Rate Loan, Bank determines that
the Base Interest Rate for such Interest Period cannot be adequately and
reasonably determined due to the unavailability of funds in or other
circumstances
22
4
affecting the London interbank market, or the certificate of deposit
market, as the case may be, which determination by Bank shall be
conclusive and binding upon Borrower, Bank shall immediately give notice
thereof to Borrower. After the giving of any such notice and until Bank
shall otherwise notify Borrower that the circumstances giving rise to
such condition no longer exist, Borrower's right to request, and Bank's
obligation to offer, a Base Interest Rate Loan shall be suspended. Any
Base Interest Rate Loan outstanding at the commencement of any such
suspension which affects Base Interest Rate Loans of that type, shall be
converted at the end of the then current Interest Period for that loan
to a Reference Rate Loan unless such suspension has then ended.
(b) ILLEGALITY. If, after the date of this note, the adoption of any
applicable law, rule or regulation, or any change therein, or change in
the interpretation or administration thereof by any governmental
authority, central bank, comparable agency or other Person charged with
the interpretation or administration thereof, or compliance by Bank with
any request or directive (whether or not having the force of law) of any
such authority (a "Change of Law") shall make it unlawful or impossible
for Bank to make or maintain a Base Interest Rate Loan, Bank shall
immediately notify Borrower of such Change of Law. After Borrower's
receipt of such notice, Xxxxxxxx's right to select, and Bank's
obligation to offer, a Base Interest Rate Loan shall be terminated, and
the undersigned shall (i) at the end of the current Interest Period for
any Base Interest Rate Loan then outstanding, convert such loan to a
Reference Rate Loan, or (ii) immediately repay or convert any Base
Interest Rate Loan then outstanding if Bank shall notify Borrower that
Bank may not lawfully continue to fund and maintain such Base Interest
Rate Loan.
(c) INCREASED COSTS. If, after the date of this note, any Change of Law:
(i) shall subject Bank to any tax, duty or other charge with
respect to a Base Interest Rate Loan or its obligation to make
such Base Interest Rate Loan, or shall change the basis of
taxation of payments by Borrower to Bank on such Base Interest
Rate Loan or in respect to such Base Interest Rate Loan under
this note (except for changes in the rate of taxation on the
overall net income of Bank); or
(ii) shall impose, modify or hold applicable any reserve, special
deposit or similar requirement against assets held by, deposits
or other liabilities in or for the account of, advances or loans
by, or any other acquisition of funds by Bank for any Base
Interest Rate Loan (except for any reserve, special deposit or
other requirement included in the determination of the Base
Rate); or
(iii) shall impose on Bank any other condition directly related
to any Base Interest Rate Loan; and the effect of any of the
foregoing is to increase the cost to Bank of making, renewing or
maintaining a Base Interest Rate Loan beyond any adjustment made
by Bank in determining the applicable interest rate for any such
Base Interest Rate Loan, or to reduce the amount receivable by
Bank hereunder; then Borrower shall from time to time, upon
demand by Bank, pay to Bank additional amounts sufficient to
reimburse Bank for such increased costs or reduced amounts. A
certificate as to the amount of such increased costs or reduced
amounts, submitted to the Borrower by Bank, shall, in the absence
of manifest error, be conclusive and binding on Borrower for all
purposes.
(d) CAPITAL ADEQUACY. If Bank shall determine that:
(i) any law, rule or regulation, any interpretation or
application thereof by any governmental authority, central bank,
comparable agency or other Person charged with the interpretation
or administration thereof, any directive, request, assessment
guideline or other guideline issued by such authority, bank,
agency or Person (whether or not having the force of law) or any
change in any of the foregoing which is adopted, issued or
becomes effective after the
23
5
date hereof affects the amount of capital required or expected
to be maintained by Bank or any Person controlling Bank (a
"Capital Adequacy Requirement"); and
(ii) the amount of capital maintained by Bank or such Person
which is attributable to or based upon this note or the amounts
outstanding hereunder must be increased as a result of such
Capital Adequacy Requirement (taking into account Bank's or such
Person's policies with respect to capital adequacy), Borrower
shall pay to Bank or such Person, upon demand of Bank, such
amounts as Bank or such Person shall determine are necessary to
compensate Bank or such Person for the increased costs to Bank or
such Person of such increased capital. A certificate of Bank,
setting forth in reasonable detail the computation of any such
increased costs, delivered by Bank to Borrower shall, in the
absence of manifest error, be conclusive and binding on Borrower
for all purposes.
8. DEFINITIONS. As used herein, the following terms shall have the meanings
respectively set forth below. "BASE INTEREST RATE" means a rate of interest
based on the LIBOR Rate. "BASE INTEREST RATE LOAN" means amounts outstanding
under this note that bear interest at a Base Interest Rate. "BASE RATE MATURITY
DATE" means the last day of the Interest Period with respect to principal
outstanding under a Base Interest Rate Loan. "BUSINESS DAY" means a day on which
Bank is open for business for the funding of corporate loans, and, with respect
to the rate of interest based on the LIBOR Rate, on which dealings in U.S.
dollar deposits outside of the United States may be carried on by Bank.
"INTEREST PERIOD" means with respect to funds bearing interest at a rate based
on the LIBOR Rate, any calendar period of one, two, three, four, five, six, nine
or twelve months. In determining an Interest Period, a month means a period that
starts on one Business Day in a month and ends on and includes the day preceding
the numerically corresponding day in the next month. For any month in which
there is no such numerically corresponding day, then as to that month, such day
shall be deemed to be the last calendar day of such month. Any Interest Period
which would otherwise end on a non-Business Day shall end on the next succeeding
Business Day unless that is the first day of a month, in which event such
Interest Period shall end on the next preceding Business Day. "LIBOR RATE" means
a per annum rate of interest (rounded upward, if necessary, to the nearest 1/100
of 1%) at which dollar deposits, in immediately available funds and in lawful
money of the United States would be offered to Bank, outside of the United
States, for a term coinciding with the Interest Period selected by Borrower and
for an amount equal to the amount of principal covered by Borrower's interest
rate selection, plus Bank's costs, including the cost, if any, of reserve
requirements. "LOAN AGREEMENT" means that certain Loan Agreement dated August 8,
1996 between Bank and Borrower, as amended and as at any time and from time to
time further amended, supplemented, extended, restated or renewed. "ORIGINATION
DATE" means the first day of the Interest Period. "REFERENCE RATE" means the
rate announced by Bank from time to time at its corporate headquarters as its
Reference Rate. The Reference Rate is an index rate determined by Bank from time
to time as a means of pricing certain extensions of credit and is neither
directly tied to any external rate of interest or index nor necessarily the
lowest rate of interest charged by Bank at any given time.
This note is one of the Term Loan B Facility Notes described in the Loan
Agreement.
DIODES INCORPORATED,
a Delaware corporation
By: /s/ XXXXXX XXX
-------------------------------
Xxxxxx Xxx
Title: VP of Operations, CFO
24
