[LOGO OF SANWA BANK APPEARS HERE]
EXHIBIT 10.11
PROMISSORY NOTE
Principal Plus Interest -- Equal Principal Installment Payments
Variable Interest Rate
August 22, 1994 Mountain View, California
FOR VALUE RECEIVED, the undersigned (the "Borrower") hereby promises to pay to
the order of SANWA BANK CALIFORNIA (the "Bank"), at its Mountain View Office or
at such other place or to such other parties as the holder of this Note may
from time to time designate in writing, the principal sum of Two Million Five
Hundred Twenty Thousand & 00/100 Dollars ($2,520,000.00) with interest thereon
as set forth below.
Interest shall accrue and principal and interest shall be payable as follows:
1. INTEREST RATE. Interest shall accrue on the outstanding principal balance
under this Note at a variable rate equal to the Bank's "Reference Rate," as it
may change from time to time, where the "Reference Rate" is defined as an index
for a variable interest rate which is quoted, published or announced from time
to time by the Bank as its reference rate (and as to which loans may be made by
the Bank at, below or above such reference rate). Such interest rate shall be
adjusted concurrently with any change in the Reference Rate. Interest shall be
calculated on the basis of 360 days per year but charged on the actual number
of days elapsed.
2. PAYMENT OF INTEREST. The Borrower hereby promises and agrees to pay interest
monthly on the first day of each month, commencing on September 1, 1994. If
interest is not paid as it becomes due, without waiving any Event of Default
occasioned by such non-payment, the Bank may, at its option but without any
obligation to do so, add such unpaid interest to principal and it shall
thereafter become and be treated as part of the principal and shall thereafter
bear like interest.
3. REPAYMENT OF PRINCIPAL. Unless sooner due in accordance with the terms of
this Note, the Borrower hereby promises and agrees to pay principal in 119
monthly installments of $21,000.00 per installment, commencing on September 1,
1994 and continuing on the first day of each month thereafter.
On August 1, 2004 the Borrower hereby promises and agrees to pay to the Bank in
full the aggregate unpaid principal balance then outstanding, together with all
accrued and unpaid interest thereon.
The acceptance by the holder of any payment under this Note after the date that
such payment is due shall not constitute a waiver of the right to require prompt
payment when due of future or succeeding payments or to declare a default as
herein provided for any failure to so pay. The acceptance by the holder of the
payment of a portion of any installment at any time that such installment is due
and payable in its entirety shall neither cure nor excuse the default caused by
failure to pay the whole of such installment and shall not constitute a waiver
of the holder's rights to require full payment when due of all future or
succeeding installments. At the Bank's option, any partial payments may first be
applied to pay any late fees or other fees then due and unpaid, and then to
accrued interest then due and unpaid and the remainder thereof (if any) shall be
applied to reduce principal.
4. LATE FEE. If any payment of principal or interest, or any portion thereof,
under this Note is not paid within ten (10) calendar days after it is due, a
late payment charge equal to five percent (5%) of such past due payment may be
assessed and shall be immediately payable.
5. PREPAYMENT. The Borrower shall be permitted to repay, without penalty or
charge, all or any portion of the principal balance of this Note prior to the
maturity date of this Note. Any prepayments shall first be applied to pay
accrued interest and the remaining portion of such prepayments shall then be
applied to reduce the outstanding principal balance.
6. TERMS AND CONDITIONS INCORPORATED BY REFERENCE. The Note shall be subject to
all the terms and conditions set forth in the following described credit
agreement between the Bank and the Borrower (the "Prior Agreement"): That
certain Equipment Purchase Line of Credit Agreement dated August 22, 1994. The
Borrower hereby re-confirms all representations and warranties and re-affirms
all covenants and agreements set forth in the Prior Agreement as if such
representations, warranties, covenants, and agreements were set forth in and
made a part of this Note. To the extent the Borrower has granted the Bank a
security interest in any collateral to secure the obligations under the Prior
Agreement (whether such grant is contained in the Prior Agreement or in a
separate document), the Borrower hereby grants to the Bank a security interest
in such collateral to additionally secure all of the obligations of the Borrower
to the Bank pursuant to this Note.
7. EVENTS OF DEFAULT. Any one or more of the following described events shall
constitute an Event of Default under this Note:
A. The Borrower shall fail to pay any amount under this Note when due.
B. There shall occur a default under any other indebtedness owed by the
Borrower (or any one or more of them) to the Bank or under any agreement
securing, guarantying or relating to such other indebtedness or the
indebtedness evidenced by this Note.
C. Any representation or warranty made by the Borrower under or in
connection with this Note or any financial statement given by the Borrower
or any guarantor of this Note shall prove to have been incorrect in any
material respect when made or given or when deemed to have been made or
given.
D. The Borrower or any guarantor of this Note shall; (i) become insolvent
or be unable to pay its debts as they mature; (ii) make an assignment for
the benefit of creditors or to an agent authorized to liquidate any
substantial amount of its properties or assets; (iii) file a voluntary
petition in bankrupt or seeking reorganization or to effect a plan or
other arrangement with creditors; (iv) file an answer admitting the
material allegations of an involuntary petition relating to bankruptcy or
reorganization or join in any such petition; (v) become or be adjudicated a
bankruptcy; or (vi) apply for or consent to the appointment of, or consent
that an order be made, appointing any receiver, custodian or trustee for
itself or any of its properties, assets or businesses.
E. Any guaranty of this Note shall be revoked or limited or its
enforceability or validity shall be contested by any guarantor, by
operation of law, legal proceeding or otherwise or any guarantor who is a
natural person shall die.
F. The Borrower shall voluntarily suspend the transaction of business or
allow to be suspended, terminated, revoked or expired any permit, license
or approval of any governmental body necessary to conduct the Borrower's
business as now conducted, or any Borrower who is a natural person shall
die.
Upon the occurrence of any Event of Default described above, the holder of this
Note, at its election, may declare the entire balance of principal and interest
thereon immediately due and payable, together with all costs of collection,
including, but not limited to, reasonable attorneys' fees and all expenses
incurred in connection with the protection of, or realization on, the security
for this Note. Interest thereafter on the unpaid principal balance, accrued
interest and costs incurred shall be payable at a rate which is 3% per annum in
excess of the rate otherwise charged according to the terms of this Note.
8. ASSUMPTION. This Note is not assumable without the express prior written
consent of the holder.
9. ATTORNEYS' FEES. In the event that an action is instituted to enforce or
collect this Note, or any portion hereof, or attorneys are engaged in connection
with the protection of or realization on any security for this Note, the
Borrower promises to pay all costs in connection therewith, including but not
limited to reasonable attorneys' fees, court costs and such other sums as the
court, may establish.
10. DISPUTE RESOLUTION.
A. DISPUTES. It is understood and agreed that, upon the request of any
party to this Note, any dispute, claim or controversy of any kind, whether
in contract or in tort, statutory or common law, legal or equitable, now
existing or hereinafter arising between the parties in any way arising out
of, pertaining to or in connection with: (i) this Note, or any related
agreements, documents or instruments, (ii) all past and present loans,
credits, accounts, deposit accounts (whether demand deposits or time
deposits), safe deposit boxes, safekeeping agreements, guarantees, letters
of credit, goods or services, or other transactions, contracts or
agreements of any kind, (iii) any incidents, omissions, acts, practices, or
occurrences causing injury to any party whereby another party or its
agents, employees or representatives may be liable, in whole or in part, or
(iv) any aspect of the past or present relationships of the parties, shall
be resolved through a two-step dispute resolution process administered by
the Judicial Arbitration & Mediation Services, Inc. ("JAMS") as follows:
B. STEP I - MEDIATION. At the request of any party to the dispute, claim
or controversy, the matter shall be referred to the nearest office of JAMS
for mediation, which is an informal, non-binding conference or conferences
between the parties in which a retired judge or justice from the JAMS panel
will seek to guide the parties to a resolution of the case.
C. STEP II - ARBITRATION (CONTRACTS NOT SECURED BY REAL PROPERTY). Should
any dispute, claim or controversy remain unresolved at the conclusion of
the Step I Mediation Phase, then (subject to the restriction at the end of
this subparagraph) all such remaining matters shall be resolved by final
and binding arbitration before a different judicial panelist, unless the
parties shall agree to have the mediator panelist act as arbitrator. The
hearing shall be conducted at a location determined by the arbitrator in
Los Angeles, California (or such other city as may be agreed upon by the
parties) and shall be administered by and in accordance with the then
existing Rules of Practice and Procedure of JAMS and judgement upon any
award rendered by the arbitrator may be entered by any State or Federal
Court having jurisdiction thereof. The arbitrator shall determine which is
the prevailing party and shall include in the award that party's reasonable
attorneys' fees and costs. This subparagraph shall apply only if, at the
time of the submission of the matter to JAMS, the dispute or issues
involved do not arise out of any transaction which is secured by real
property collateral or, if so secured, all parties consent to such
submission.
As soon as practicable after selection of the arbitrator, the arbitrator,
or the arbitrator's designated representative, shall determine a reasonable
estimate of anticipated fees and costs of the arbitrator, and render a
statement to each party setting forth that party's pro-rata share of said
fees and costs. Thereafter, each party shall, within 10 days of receipt of
said statement, deposit said sum with the arbitrator. Failure of any party
to make such a deposit shall result in a forfeiture by the non-depositing
party of the right to prosecute or defend the claim which is the subject of
the arbitration, but shall not otherwise serve to abate, stay or suspend
the arbitration proceedings.
D. STEP II - TRIAL BY COURT REFERENCE (CONTRACTS SECURED BY REAL
PROPERTY). If the dispute, claim or controversy is not one required or
agreed to be submitted to arbitration, as provided in the above
subparagraph, and has not been resolved by Step I mediation, then any
remaining dispute, claim or controversy shall be submitted for
determination by a trial on Order of Reference conducted by a retired judge
or justice from the panel of JAMS appointed pursuant to the provisions of
Section 638(1) of the California Code of Civil Procedure, or any amendment,
addition or successor section thereto, to hear the case and report a
statement of decision thereon. The parties intend this general reference
agreement to be specifically enforceable in accordance with said section.
If the parties are unable to agree upon a member of the JAMS panel to act
as referee, then one shall be appointed by the Presiding Judge of the
county wherein the hearing is to be held. The parties shall pay in advance,
to the referee, the estimated reasonable fees and costs of the reference,
as may be specified in advance by the referee. The parties shall initially
share equally, by paying their proportionate amount of the estimated fees
and costs of the reference. Failure of any party to make such a fee deposit
shall result in a forfeiture by the non-depositing party of the right to
prosecute or defend any cause of action which is the subject of the
reference, but shall not otherwise serve to abate, stay or suspend the
reference proceeding.
E. PROVISIONAL REMEDIES, SELF HELP AND FORECLOSURE. No provision of, or
the exercise of any rights under any portion of this Dispute Resolution
provision, shall limit the right of any party to exercise self help
remedies such as set off, foreclosure against any real or personal property
collateral, or the obtaining of provisional or ancillary remedies, such as
injunctive relief or the appointment of a receiver, from any court having
jurisdiction before, during or after the pendency of any arbitration. At
the Bank's option, foreclosure under the a deed of trust or mortgage may be
accomplished either by exercise of power of sale under the deed of trust or
mortgage, or by judicial foreclosure. The institution and maintenance of an
action for provisional remedies, pursuit of provisional or ancillary
remedies or exercise of self help remedies shall not constitute a waiver of
the right of any party to submit the controversy or claim to arbitration.
11. WAIVER. The liability of the undersigned is joint and several. The makers,
endorsers and/or guarantors hereof do hereby severally waive presentment,
demand, protest and notice of protest, dishonor and non-payment. Such parties
expressly consent to the extension of time for the performance of any obligation
hereunder and the release of any party liable for the obligation. The release of
any party liable hereon shall not operate to release any other party liable
hereon.
12. SEVERABILITY. Every provision hereof is intended to be several. If any
provision of this Note is determined by a court of competent jurisdiction to be
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall not affect the other provisions hereof, which shall
remain binding and enforceable.
13. JURISDICTION. This Note is made in the State of California, and it is
mutually agreed that California law shall apply to the interpretation of the
terms and conditions of this Note.
14. ENTIRE AGREEMENT. This Note and all documents, instruments and agreements
mentioned herein constitute the entire and complete understanding of the
parties with respect to the transactions contemplated hereunder. All previous
conversations, memoranda and writings between the parties pertaining to the
transactions contemplated hereunder not incorporated or referenced in this Note
or in such documents, instruments and agreements are superseded hereby.
15. REAL PROPERTY SECURITY. This Note is secured by a certain deed of trust
dated August 22, 1994, encumbering the real property described therein and
located in Santa Clara County, State of California, (the "Deed of Trust"). In
the event the Borrower, or any holder of title to or any interest in the real
property encumbered by the Deed of Trust, sells, conveys, alienates, assigns,
transfers or disposes of the real property, or any part thereof or any interest
therein, or becomes divested of its title or any interest herein in any manner
or way, or enters into a master lease covering all or any portion thereof or an
undivided interest therein, whether voluntary, involuntary or otherwise, or
enters into an agreement to do so, without the prior written consent of the
holder of this Note, the holder may, at its election, declare this Note,
irrespective of the maturity date specified herein or in any written agreement
pertaining to this Note, immediately due and payable without notice. No waiver
of this right shall be effective unless in writing. Consent by the holder of
this Note to one such transaction shall not constitute or be deemed to be a
waiver of the rights of the holder provided herein as to future or succeeding
transactions.
BORROWER:
ISE LABS, INC.
By: /s/ Saeed A malik
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Saeed A. Malik, President
By: /s/ Alex M. Barrios
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Alex M. Barrios, Vice President
By: /s/ Laurence F. Jorstad
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Laurence F. Jorstad, Vice President
ADDRESS:
2095 Ringwood Avenue
San Jose, CA 95131
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