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EXHIBIT 10.11
REVOLVING LINE OF CREDIT NOTE
$6,000,000.00 Woodland Hills, California
August 1, 1995
FOR VALUE RECEIVED, the undersigned DIODES INCORPORATED ("Borrower")
promises to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank")
at its office at Warner Ranch RCBO, 6001 Topanga Canyon Blvd., Suite #205,
Woodland Hills, California, or at such other place as the holder hereof may
designate, in lawful money of the United States of America and in immediately
available funds, the principal sum of Six Million Dollars ($6,000,000.00), or
so much thereof as may be advanced and be outstanding, with interest thereon,
to be computed on each advance from the date if its disbursement (computed on
the basis of a 360-day year, actual days elapsed) either (i) at a fluctuating
rate per annum equal to Prime Rate in effect from time to time or (ii) at a
fixed rate per annum determined by Bank to be one and one quarter percent
(1.25%) above Bank's LIBOR in effect on the first day of the applicable Fixed
Rate Term. When interest is determined in relation to the Prime Rate, each on
the date each Prime Rate change is announced within Bank. With respect to each
LIBOR option selected hereunder, Bank is hereby authorized to note the date,
principal amount, interest rate and Fixed Rate Term applicable thereto and any
payments made thereon on Bank's books and records (either manually or by
electronic entry) and/or on any schedule attached to this Note, which notations
shall be prima facie evidence of the accuracy of the information noted.
A. DEFINITIONS:
As used herein, the following terms shall have the meanings set forth
after each:
1. "Business Day" means any day except a Saturday, Sunday or any
other day designated as a holiday under Federal or California statute or
regulation.
2. "Fixed Rate Term" means a period commencing on a Business Day
and continuing for not less than thirty (30) days, as designated by Borrower,
during which all or a portion of the outstanding principal balance of this Note
bears interest determined in relation to Bank's LIBOR; provided however, that
no Fixed Rate Term may be selected for a principal amount less than Two Hundred
Fifty Thousand Dollars ($250,000.00); and provided further, that no Fixed Rate
Term shall extend beyond the scheduled maturity date hereof. If any Fixed Rate
Term would end on a day which is not a Business Day, then such Fixed Rate Term
shall be extended to the next succeeding Business Day.
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3. "LIBOR" means the rate per annum (rounded upward, if necessary
to the nearest whole 1/8 of 1%) and determined pursuant to the following
formula:
LIBOR = Base LIBOR
-------------------------------
100% - LIBOR Reserve Percentage
(a) "Base LIBOR" means the rate per annum for United States dollar
deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the
understanding that such rate is quoted by Bank for the purpose of calculating
effective rates of interest for loans making reference thereto, on the first
day of a Fixed Rate Term for delivery of funds on said date for a period of
time approximately equal to the principal amount to which such Fixed Rate Term
applies. Borrower understands and agrees that Bank may base its quotation of
the Inter-Bank Market Offered Rate upon such offers or other market indicators
of the Inter-Bank Market as Bank in its discretion deems appropriate including,
but not limited to, the rate offered for U.S. dollar deposits on the London
Inter-Bank Market.
(b) "LIBOR Reserve Percentage" means the reserve percentage
prescribed by the Board of Governors or the Federal Reserve System (or any
successor) for "Eurocurrency Liabilities" (as defined in Regulation D of the
Federal Reserve Board, as amended), adjusted by Bank for expected changes in
such reserve percentage during the applicable Fixed Rate Term.
4. "Prime Rate" means at any time the rate of interest most
recently announced within Bank at its principal office in San Francisco as its
Prime Rate, with the understanding that the Prime Rate is one of Bank's base
rates and serves as the basis upon which effective rates of interest are
calculated for those loans making reference thereto, and is evidenced by the
recording thereof after its announcement in such internal publication or
publications as Bank may designate.
B. INTEREST:
1. Payment of Interest. Interest accrued on this Note shall be
payable on the first day of each month, commencing September 1, 1995
2. Selection of Interest Rate Options. At any time any portion of
the outstanding principal balance of this Note bears interest undetermined in
relation to Bank's LIBOR, it may be continued by Borrower at the end of the
Fixed Rate Term applicable thereto so that it bears interest determined in
relation to the Prime Rate or in relation to Bank's LIBOR for a new Fixed Rate
Term designated by Borrower. At any time any portion of the outstanding
principal balance of this Note bears interest determined in relation to the
Prime Rate, Borrower may convert all or a portion thereof so that it bears
interest determined in relation to Bank's LIBOR for a Fixed Rate Term
designated by Borrower. At the time each advance is requested hereunder of
Borrower wishes to select the LIBOR option for all or a portion of the
outstanding principal balance hereof, and at the end of
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each Fixed Rate Term, Borrower shall give Bank notice specifying (a) the
interest rate option selected by Borrower, (b) the principal amount subject
thereto, and (c) if the LIBOR option is selected, the length of the applicable
Fixed Rate Term. Any such notice may be given by telephone so long as, with
respect to each LIBOR option selected by Borrower, (i) Bank received written
confirmation from Borrower not later than three (3) Business Days after such
telephone notice is given, and (ii) such notice is given to Bank prior to 10:00
a.m., California time, on the first day of the Fixed Rate Term. For each LIBOR
option requested hereunder, Bank with quote the applicable fixed rate to
Borrower at approximately 10:00 a.m., California time, on the first day of the
Fixed Rate Term. If Borrower does not immediately accept the rate quoted by
Bank, any subsequent acceptance by Borrower shall be subject to a
redetermination by Bank of the applicable fixed rate; provided however, that if
Borrower fails to accept any such rate by 11:00 a.m., California time, on the
Business Day such quotation is given, then the quoted rate shall expire and
Bank shall have no obligation to permit a LIBOR option to be selected on such
day. If no specific designation of interest is made at the time any advance is
requested hereunder or at the end of any Fixed Rate Term, Borrower shall be
deemed to have made a Prime Rate interest selection for such advance or the
principal amount to which such Fixed Rate Term applied.
3. Additional LIBOR Provisions.
(a) If Bank at any time shall determine that for any reason adequate
and reasonable means do not exist for ascertaining Bank's LIBOR, then Bank
shall promptly give notice thereof to Borrower. If such notice is given and
until such notice has been withdrawn by Bank, then (I) no new LIBOR option may
be selected by Borrower, and (ii) any portion of the outstanding principal
balance hereof which bears interest determined in relation to Bank's LIBOR,
subsequent to the end of the Fixed Rate Term applicable thereto, shall bear
interest determined in relation to the Prime Rate.
(b) If any law, treaty, rule, regulation or determination of a court
or governmental authority of any change therein or in the interpretation or
application thereof (each, a "Change in Law") shall make it unlawful for Bank
(i) to make LIBOR options available hereunder, or (ii) to maintain interest
rates based on Bank's LIBOR, then in the former event, any obligation of Bank
to make available such unlawful LIBOR options shall immediately be canceled,
and in the latter event, any such unlawful LIBOR-based interest rates then
outstanding shall be converted, at Bank's option, so that interest on the
portion of the outstanding principal balance subject thereto is determined in
relation to the Prime Rate; provided however, that if any such Change in Law
shall permit any LIBOR-based interest rates to remain in effect until the
expiration of the Fixed Rate Term applicable thereto, then such permitted
LIBOR-based interest rates shall continue in effect until the expiration of
such Fixed Rate Term. Upon the occurrence of any of the foregoing events,
Borrower shall pay to Bank immediately upon demand such amounts as may be
necessary to compensate Bank for any fines, fees, charges, penalties or other
costs incurred or payable by Bank as a result thereof and which are
attributable to any LIBOR
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options made available to Borrower hereunder, and any reasonable allocation
made by Bank among its operations shall be conclusive and binding upon
Borrower.
(c) If any Change in Law or compliance by Bank with any request or
directive (whether or not having the force of law) from any central bank or
other governmental authority shall:
(i) subject Bank to any tax, duty or other charge with respect to
any LIBOR options, or change the basis of taxation of payments
to Bank of principal, interest, fees or any other amount
payable hereunder (except for changes in the rate of tax on the
overall net income of Bank); or
(ii) impose, modify or hold applicable any reserve, special deposit,
compulsory loan 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 any office of
Bank; or
(iii) impose on Bank any other condition;
and the result of any of the foregoing is to increase the cost to Bank of
making, renewing or maintaining any LIBOR options hereunder and/or to reduce
any amount receivable by Bank in connection therewith, then in any such case,
Borrower shall pay to Bank immediately upon demand such amounts as may be
necessary to compensate Bank for any additional costs incurred by Bank and/or
reduction in amounts received by Bank which are attributable to such LIBOR
options. In determining which costs incurred by Bank and/or reductions in
amounts received by Bank are attributable to any LIBOR options made available
to Borrower hereunder, any reasonable allocation made by Bank among its
operations shall be conclusive and binding upon Borrower.
4. Default Interest. From and after the maturity date of this
Note, or such earlier date as all principal owing hereunder becomes due and
payable by acceleration or otherwise, the outstanding principal balance of this
Note shall bear interest until paid in full at an increased rate per annum
(computed on the basis of a 360-day year, actual days elapsed) equal to four
percent (4%) above the rate of interest from time to time applicable to this
Note.
C. BORROWING AND REPAYMENT:
1. Borrowing and Repayment. Borrower may from time to time during
the term of this Note borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions of this Note and of any document executed in connection with this
Note; provided however, that the total outstanding borrowings under this Note
shall not at any time exceed the principal amount stated above. The unpaid
principal balance of this obligation at any time shall be the total amounts
advanced hereunder by the holder hereof less the amount of principal payments
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made hereon by or for any Borrower, which balance may be endorsed hereon from
time to time by the holder. The outstanding principal balance of this Note
shall be due and payable in full on November 1, 1995.
2. Advances. Advances hereunder, to the total amount of the
principal sum stated above, may be made by the holder at the oral or written
request of (a) Pedro Morillas or Joseph Liu or Carl Wertz, any one acting
alone, who are authorized to request advances and direct the disposition of any
advances until written notice of the revocation of such authority is received
by the holder at the office designated above, or (b) any person, with respect
to advanced deposited to the credit of any account of any Borrower with the
holder, which advances, when so deposited, shall be conclusively presumed to
have been made to or for the benefit of each Borrower regardless of the fact
that persons other than those authorized to request advances may have authority
to draw against such account. The holder shall have no obligation to determine
whether any person requesting an advance is or has been authorized by any
Borrower.
3. Application of Payments. Each payment made on this Note shall
be credited first, to any interest then due and second, to the outstanding
principal balance hereof. All payments credited to principal shall be applied
first, to the outstanding principal balance of this Note which bears interest
determined in relation to the Prime Rate, if any, and second, to the
outstanding principal balance of this Note which bears interest determined in
relation to Bank's LIBOR, with such payments applied to the oldest Fixed Rate
Term first.
4. Prepayment.
(a) Prime Rate. Borrower may prepay principal on any portion of
this Note which bears interest determined in relation to Bank's LIBOR at any
time and in the minimum amount of Fifty Thousand Dollars ($50,000.00); provided
however, that if the outstanding principal balance of such portion of this Note
is less than said amount, the minimum prepayment amount shall be the entire
outstanding principal balance thereof. In consideration of Bank providing this
prepayment option to Borrower, or if any such portion of this Note shall become
due and payable at any time prior to the last day of the Fixed Rate Term
applicable thereto by acceleration or otherwise, Borrower shall pay to Bank
immediately upon demand a fee which is the sum of the discounted monthly
differences for each month from the month of prepayment through the month in
which such Fixed Rate Term matures, calculated as follows for each such month:
(i) Determine the amount of interest which would have accrued each
month on the amount prepaid at the interest rate applicable to
such amount had it remained outstanding until the last day of
the Fixed Rate Term applicable thereto.
(ii) Subject from the amount determined in (I) above the amount of
interest which would have accrued for the same month on the
amount prepaid for the remaining term of such Fixed Rate Term
at Bank's LIBOR in effect on the date
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of prepayment for new loans made for such term and in a
principal amount equal to the amount prepaid.
(iii) If the result obtained in (ii) for any month is greater than
zero, discount that difference by Bank's LIBOR used in (ii)
above.
Each Borrower acknowledges that prepayment of such amount will result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Each Borrower, therefore, agrees to pay the above described
prepayment of the prepayment costs, expenses and/or liabilities of Bank. If
Borrower fails to pay any prepayment fee when due, the amount of such
prepayment fee shall thereafter bear interest until paid at a rate per annum
two percent (2%) above the Prime Rate in effect from time to time (computed on
the basis of a 360-day year, actual days elapsed).
D. EVENTS OF DEFAULT:
This Note is made pursuant to and is subject to the terms and conditions
of that certain Credit Agreement between Borrower and Bank dated as of March 1,
1994, as amended from time to time. Any default in the payment or performance
of any obligation, or any defined event of default, under said Credit Agreement
shall constitute an "Event of Default" under this Note.
E. MISCELLANEOUS:
1. Remedies. Upon occurrence of any Event of Default, the holder
of this Note, at the holder's option, may declare all sums of principal and
interest outstanding hereunder to be immediately due and payable without
presentment, demand, protest or notice of dishonor, all of which are expressly
waived by each Borrower and the obligation, if any, of the holder to extend any
further credit hereunder shall immediately cease and terminate. Each Borrower
shall pay to the holder immediately upon demand the full amount of all
payments, advances, charges, costs and expenses, including reasonable
attorneys' fees (to include outside counsel fees and all allocated costs of the
holder's in-house counsel), incurred by the holder in connection with the
enforcement of the holder's rights and/or the collection of any amounts which
become due to the holder under this Note, and the prosecution or defense of any
action in any way related to this Note, including without limitation, any
action for declaratory relief, and including any of the foregoing incurred in
connection with any bankruptcy proceeding relating to any Borrower.
2. Obligations Joint and Several. Should more than one person or
entity sign this Note as a Borrower, the obligations of each such Borrower
shall be joint and several.
3. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the Sate of California except to the extent Bank
has greater rights or remedies under Federal law, whether as a national bank or
otherwise, in which case such
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choice of California law shall not be deemed to deprive Bank of any such rights
and remedies as may be available under Federal Law.
DIODES INCORPORATED
By: /s/ Pedro Morillas
Title: Executive Vice President
By: /s/ Joseph Liu
Title: VP Operations & CFO
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