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EXHIBIT 10.23
FIFTH AMENDMENT TO LOAN AGREEMENT
This Fifth Amendment to Loan Agreement (this "Amendment") dated as of the 20th
day of March, 1998, by and between Diodes Incorporated, a Delaware corporation
("Borrower"), and Union Bank of California, N. A. , a national banking
association ("Bank").
Whereas, Borrower and Bank have previously entered into that certain Loan
Agreement, dated August 8, 1996, and Amendments thereto dated November 12, 1996,
January 15, 1997, February 6, 1997, and August 20, 1997 (as so amended, the
"Agreement"), pursuant to which Bank has agreed to make certain loans and
advances to Borrower.
Whereas, Borrower has requested that Bank agree to amend certain provisions
contained in the Agreement; and
Whereas, Borrower and Bank have agreed and intend to hereby amend the Agreement.
Now, therefore, the parties hereby agree as follows:
1. Section 1.1.1 of the Agreement, beginning with "The aggregate
amount available..." and ending with "...the maximum amount
available under the Revolving Loan." is hereby deleted in its
entirety and replaced with "The aggregate amount available to be
drawn under all outstanding Commercial L/Cs and the aggregate
amount of unpaid reimbursement obligations under drawn
Commercial L/Cs shall not exceed Three Million Dollars
($3,000,000) and shall reduce, dollar for dollar, the maximum
amount available under the Revolving Loan."
2. Section 1.1.2 of the Agreement, beginning with "The aggregate
amount available..." and ending with "...the maximum amount
available under the Revolving Loan." is hereby deleted in its
entirety and replaced with: "The aggregate amount available to
be drawn under all outstanding Standby L/Cs and the aggregate
amount of unpaid reimbursement obligations under drawn Standby
L/Cs shall not exceed Three Million Dollars ($3,000,000) and
shall reduce, dollar for dollar, the maximum amount available
under the Revolving Loan."
3. Section 1.1.3 of the Agreement, beginning with "The sum of the
aggregate amount available..." and ending with "...not exceed
Two Million Dollars ($2,000,000) in the aggregate." is hereby
deleted in its entirety and replaced with: "The sum of the
aggregate amount available to be drawn under all outstanding
Commercial L/Cs and Standby L/Cs and the aggregate amount of
unpaid reimbursement obligations under drawn Commercial L/Cs and
drawn Standby L/Cs shall not exceed Three Million Dollars
($3,000,000) in the aggregate."
4. Section 1.2 of the Agreement are hereby deleted in their
entirety and replaced with the following:
"1.2 TERM LOAN A FACILITY. Bank has previously made available to
Borrower that certain term loan ("Term Loan A Facility"). As of
March 20, 1998, the unpaid principal balance of Term Loan A
Facility was $3,916,666.71, together with accrued unpaid
interest in the amount of $17,877.16. Term Loan A Facility shall
be evidenced by and repayable in accordance with the terms and
conditions of that certain promissory note ("Term Loan A
Facility Note"). In the event of a prepayment of principal and
payment of any resulting fees, any prepaid amounts shall be
applied to the scheduled principal payments in the reverse order
of their maturity".
5. Section 1.3 of the Agreement is hereby deleted in its entirety
and replaced with the following:
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"1.3 TERM LOAN B FACILITY. Bank will loan to Borrower the
aggregate sum of TEN MILLION AND NO/100 DOLLARS
($10,000,000.00), at Borrower's request from March 20, 1998
until March 31, 1999, in the form of not more than four (4)
disbursements ("Term Loan B Facility", collectively with Term
Loan A Facility, the "Term Loan Facilities"). Each disbursement
under Term Loan B Facility shall be evidenced by a promissory
note, substantially in the form of Exhibit I, attached hereto
and incorporated herein (each a "Term Loan B Facility Note" and
collectively, the "Term Loan B Facility Notes", collectively
with Term Loan A Facility Note, the "Term Loan Notes") ).
Amounts borrowed and repaid under Term Loan B Facility may not
be reborrowed. In the event of a prepayment of principal and
payment of any resulting fees, any prepaid amounts shall be
applied to the scheduled principal payments in the reverse order
of their maturity".
6. Section 1.5 of the Agreement shall be deleted in its entirety
and replaced with the following:
"Section 1.5 Purpose of Loan. The proceeds of the Revolving Loan
shall be used for general working purposes. The proceeds of the
Term Loans shall be used for the purchase of equipment for
Shanghai Kai Hong Electronics Company, Ltd. and for general
working capital purposes."
7. Section 4.9 of the Agreement shall be deleted in its entirety
and replaced with the following:
"Section 4.9 Fixed Charge Coverage. Borrower will maintain a
ratio of EBITDA to Debt Service of not less than 1:25:1.0.
"EBITDA" shall mean earnings ratio before interest, taxes,
depreciation, and amortization. "Debt Service" shall mean the sum
of that portion of term obligations (including principal and
interest) coming due during the twelve (12) months preceding the
date of calculation plus non-financed capital expenditures during
the twelve (12) months preceding the date of calculation plus
taxes less minority interest distribution in the Joint Venture.
Compliance with this subsection shall be measured quarterly on a
rolling four quarter average."
8. Section 5.8 of the Agreement shall be deleted in its entirety
and replaced with the following:
"Section 5.8 Capital Expenditures. Borrower will not make
unfinanced capital expenditures in excess of Three Million
Dollars ($3,000,000) for the fiscal year end 1998 and Two
Million Dollars ($2,000,000) thereafter, and shall only make
such expenditures as are necessary for Borrower in the conduct
of its ordinary course of business; provided, however, that this
Section 5.8 shall not be construed to prohibit the purchase of
equipment with the proceeds of the Term Loan, as contemplated by
Section 1.5 hereof. Each said expenditure shall be needed by
Borrower in the ordinary course of its business. Expenditures as
used in this subsection shall include the current expense
portion of all leases whether or not capitalized and shall also
include the current portion of any debt used to finance capital
expenditures."
9. Except as modified hereby, the Agreement shall remain otherwise
unchanged and in full force and effect and this Amendment shall
be effective from the date hereof and shall have no retroactive
effect whatsoever.
10. Except as specifically provided herein, all terms and conditions
of the Agreement remain in full force and effect, without waiver
or modification. All terms defined in the Agreement shall have
the same meanings when used in this Amendment, and this
Amendment and the Agreement shall be read together as one
document.
11. Borrower hereby confirms all representations and warranties
contained in the Agreement and reaffirms all covenants set forth
therein. Further, Borrower certifies that, as of the date of
this
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Amendment, there exists no Event of Default as defined in the
Agreement, nor any condition, act or event which with the giving
of notice or the passage of time or both would constitute an
Event of Default.
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In Witness Whereof, Borrower has executed and delivered this Amendment.
"Borrower"
DIODES INCORPORATED
By: /s/ XXXXXX XXX
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Xxxxxx Xxx, CFO/Secretary/VP Operations
"Bank"
UNION BANK OF CALIFORNIA, N.A.
By: /s/ XXXXXX X. XXXXXXXXXXX
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Xxxxxx X. Xxxxxxxxxxx, Vice President
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