Term Loan Agreement, dated as of August 20, 2019, by and between Fabrinet Co., Ltd. and Bank of Ayudhya Public Company Limited

Clause

Schedule

Part 1    Financial Information Covenants

Part 2    General Covenants

Signatories

FABRINET CO., LTD., a company incorporated under the laws of Thailand with its registered office located at 5/6 Moo 6 Khlong Nueng Sub-District, Khlong Luang District, Pathum Thani Province, Thailand (the Borrower); and

BANK OF AYUDHYA PUBLIC COMPANY LIMITED, a public company incorporated under the laws of Thailand with its registered office located at 1222 Rama III Road, Khwaeng Bang Phongphang, Khet Yan Nawa, Bangkok, Thailand (the Bank).

DEFINITIONS AND INTERPRETATION

Definitions

an Event of Default; or

an event or circumstance which would be (with the expiry of a grace period, the giving of notice or the making of any determination under the Finance Documents or any combination of them) an Event of Default.

this Agreement;

if the Loan under this Agreement is a secured obligation, the Security Documents; and

any other document designated as such by the Bank and the Borrower.

the business, prospects or financial condition of any Obligor;

the ability of any Obligor to perform its obligations under any Finance Document;

the validity, legality or enforceability of any Finance Document or the priority and ranking of any Security Interest expressed to be created pursuant to any Finance Document; or

the Bank’s rights or remedy under any Finance Document.

any documents stated in Clause 2.11 (Security); and guarantee provided by the Guarantor (s) specified in Clause 2.12 (Guarantor (s)); and

any other document evidencing or creating security over any asset of an Obligor to secure any obligation of any Obligor to the Bank under the Finance Documents

CONSTRUCTION

In this Agreement, unless the contrary intention appears, a reference to:

an amendment includes a supplement, novation, extension (whether of maturity or otherwise), restatement, re-enactment or replacement (however fundamental and whether or not more onerous) and amended will be construed accordingly;

assets includes present and future properties, business, revenues and rights of every description;

an authorisation includes an authorisation, consent, approval, resolution, permit, licence, exemption, filing, registration, permission or notarisation of any governmental or other authority or any other person;

disposal means a sale, transfer, assignment, grant, lease, licence, declaration of trust or other disposal, whether voluntary or involuntary, and dispose will be construed accordingly;

indebtedness includes any obligation (whether incurred as principal or as surety and whether present or future, actual or contingent) for the payment or repayment of money;

a person includes any individual, company, corporation, unincorporated association or body (including a partnership, trust, fund, joint venture or consortium), government, state, agency, organisation or other entity;

a regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but, if not having the force of law, being of a type with which any person to which it applies is accustomed to comply) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

a Default being outstanding means that it has not been remedied or waived;

a provision of law is a reference to that provision as extended, applied, amended or re-enacted and includes any subordinate legislation;

a Clause, a Sub-clause or a Schedule is a reference to a clause or sub-clause of, or a schedule to this Agreement;

a Party or any other person includes its successors in title, permitted assigns and permitted transferees;

a Finance Document or other document or security includes any amendment to that Finance Document or other document or security, including any change in the purpose of, any extension for or any increase in the amount of a facility or any additional facility and

a time of day is a reference to Bangkok time.

Unless the contrary intention appears:

a reference to a Party will not include that Party if it has ceased to be a Party under this Agreement;

a word or expression used in any other Finance Document or in any notice given in connection with any Finance Document has the same meaning in this Agreement; and

the headings in this Agreement do not affect its interpretation.

LOAN DETAILS

Commitment (USD)

60,937,500 (United States Dollar Sixty Million Nine Hundred Thirty Seven Thousand Five Hundred)

Facility type

Term Loan Facility

Purpose

To refinance loan of Fabrinet from Bank of America

Maturity Date

5 (Five) years from the date of first drawdown

The principal repayment of drawdown amount shall be equally repaid on quarterly basis in 20 (Twenty) instalments in the amount of USD 3,046,875 (United States Dollar Three Million Forty Six Thousand Eight Hundred Seventy Five) per instalment; and all the remaining outstanding balance shall be repaid on the last instalment.

The first repayment shall be made on 30 September 2019.

[                         ]

•  Front-end fee

•  Management fee

•  Prepayment fee

•  Cancellation fee

•  Commitment fee

•  Others

1.  Mortgage of lands and constructions on 1) title deed no. 1645, 7132, 1634, 1635 and 1636 located at Khlong Nueng Sub-District, Khlong Luang District, Pathum Thani Province, owned by the Borrower; and 2) title deed no. 54394 located at Khlong Kio Sub-District, Ban Bueng District, Chonburi Province owned by the Borrower, as per details in related mortgage agreements.

2.  Assignment of insurance before the date of first drawdown

Address: 5/6 Moo 6 Khlong Nueng Sub-District, Khlong Luang District, Pathum Thani Province

Tel: 0-2524-9600 ext. 6657 / 6629

Fax: -

E-mail: ***@*** / ***@***

Attention: Ms. Karnjana Srisukho / Mr. Thanatpatara Krueasri

Address: 1222 Rama III Road, Khwaeng Bang Phongphang,

Khet Yan Nawa, Bangkok 10120

Tel: 02 ###-###-####

Fax: 02 ###-###-####

Attention: Ms. Panpijit Srisuwatcharee

-

FACILITY

Subject to the terms of this Agreement, the Bank makes available to the Borrower a term loan facility in an aggregate principal amount equal to the amount specified in Clause 2.1 (Commitment) of this Agreement.

The Loan may only be used for the purposes set forth in Clause 2.3 (Purpose) of this Agreement.

CONDITIONS PRECEDENT AND UTILISATION REQUESTS

Conditions precedent

a Utilisation Request has been given in accordance with the terms of this Agreement;

the representations and warranties given by the Borrower under this Agreement (including those contained in Clause 8 (Representations and Warranties) of this Agreement) remain correct in all material respects;

no Default is outstanding or would result from such Loan; and

there is no event which could be reasonably expected to have a Material Adverse Effect.

Utilisation Requests

it has been signed by the Borrower and is substantially in the form set out in Schedule 1 (Form of Utilisation Request);

the Utilisation Date is a Business Day falling within the Availability Period; and

the amount of the Loan requested does not exceed the balance of the undrawn Commitment as at the Utilisation Date.

Receipt

Common practice of the Bank

Conditions on drawdown

the drawdown shall be made in one lump sum amount;

the drawdown shall be made against completion of mortgage of Borrower’s land and building in Pathum Thani province and/or Chon Buri Province;

the financing amount shall not be higher than 65 (Sixty Five) % of the value of Borrower’s land and building in Pathum Thani province and/or Chon Buri Province;

the Borrower agrees to provide to the Bank a copy of meeting minutes of the Borrower and Fabrinet indicating that purpose of entering banking facilities with the Bank is to repay in full outstanding obligations under the existing credit agreement of Fabrinet; and

the Borrower agrees to provide to the Bank an evidence showing the outstanding balance of term loan owed to Bank of America.

REPAYMENT, PREPAYMENT AND CANCELLATION

Repayment

Voluntary prepayment

Mandatory prepayment – illegality

Cancellation

Miscellaneous provisions

Any notice of prepayment or cancellation is irrevocable and must specify the relevant date and other details relating to the affected Loans.

All prepayments must be made with accrued interest on the amount prepaid, calculated up to the date immediately preceding the date on which each prepayment is made.

No prepayment or cancellation is allowed except in accordance with this Agreement.

Any Commitment cancelled may not subsequently be reinstated.

INTEREST, INTEREST PERIOD AND INTEREST ON OVERDUE AMOUNTS

Interest Rate

Change of Reference Interest Rate

Interest Periods and payment of interest

The first Interest Period in respect of any Loan commences from (and including) the first Utilisation Date and ends on (but excluding) the last day of the first Interest Period. Each subsequent Interest Period will commence from (and including) the last day of the preceding Interest Period and ends on (but excluding) the last day of the subsequent Interest Period.

Interest is calculated on a daily basis based on the actual number of days elapsed of each Interest Period and a year of 365 days, commencing from (and including) the first day of each Interest Period to (but excluding) the interest payment date of such Interest Period. The interest must be payable on the last Business Day of the relevant calendar month.

Interest on overdue amounts

Overdue interest

Market disruption

any event that, in the Bank’s determination, adversely affects the overall financial market, and no appropriate mean exists for ascertaining any interest rates applicable under this Agreement for the affected period; or

if it is impracticable to determine any reference interest rate used in this Agreement or the relevant reference interest is no longer available.

PAYMENTS

Method

Funds

Taxes

Set-off

Business Days

Timing of payments

REPRESENTATIONS AND WARRANTIES

Unless a representation and warranty is expressed to be given at a specific date, the Borrower makes the representations and warranties set out in Schedule 4 (Representations and Warranties) to the Bank on the date of this Agreement. Those representations and warranties shall be deemed to be repeated by the Borrower on each day during the term of this Agreement.

Where a representation or warranty in this Clause 8 (Representations and Warranties) is expressed to apply to any person other than the Borrower, the Borrower shall ensure that the stated position of such representation or warranty is true as at the time of making or repeating of that representation or warranty.

UNDERTAKINGS AND NEGATIVE COVENANTS

EVENTS OF DEFAULT

Event of Default means any of the following events or circumstances:

Non-payment

Breach of other obligations

Misrepresentation

Cross-default

Insolvency

it is unable to pay its debts as they fall due, or is deemed for the purposes of any applicable law to be insolvent ;

it admits its inability to pay its debts as they fall due;

it commences bankruptcy or business rehabilitation proceedings;

it begins negotiations with any creditor for the rescheduling or restructuring of any of its indebtedness; or

any of its indebtedness is subject to a moratorium.

Insolvency proceedings

any step is taken with a view to the suspension of payments, a moratorium or a composition, compromise, assignment or similar arrangement with any of its creditors;

a meeting of its shareholders, directors or other officers is convened for the purpose of considering any resolution for, to petition for or to file documents with a court or any registrar for, its winding-up, administration or dissolution or any such resolution is passed;

any person presents a petition, or files documents with a court or any registrar, for its winding-up, administration or dissolution;

any Security Interest is enforced over any of its assets;

an order for its winding-up, administration, dissolution or reorganisation is made;

an official receiver, liquidator, plan preparer or administrator in business rehabilitation proceedings or similar officer is appointed in respect of it or any of its assets; or

any other analogous step or procedure is taken in any jurisdiction.

Creditors’ process

Any attachment, sequestration, distress or execution affects any asset(s) of any Obligor.

Any legal claim against any Obligor adversely affects its financial condition and is not discharged within the time specified by the Bank.

Cessation of business

Effectiveness of Finance Documents

Any Finance Document is not effective in accordance with its terms or is alleged by an Obligor to be ineffective in accordance with its terms for any reason.

A Security Document (if any) does not create a Security Interest it purports to create.

Material adverse change

Any Obligor carries out its internal reorganisation which, in the opinion of the Bank, has or is reasonably likely to have a Material Adverse Effect.

Any event or series of events occur which, in the opinion of the Bank, has or is reasonably likely to have a Material Adverse Effect.

If an Event of Default under Clause 10.1 is outstanding, the Bank may, by notice to the Borrower:

cancel all or any part of the unutilised Commitment;

declare that all or part of any amounts outstanding under the Finance Documents are immediately due and payable and/or payable on demand by the Bank; and/or

enforce all or any part of the security constituted by the Security Documents.

EXPENSES

The Borrower must pay to the Bank the amount of all actual costs and expenses (including fees relating to the appraisal of security assets and legal fees) incurred by the Bank arising from or in connection with:

the negotiation, preparation, printing and execution of any Finance Document (including any Finance Document entered into after the date of this Agreement);

any amendment, waiver or consent requested by the Borrower or specifically allowed by a Finance Document;

the enforcement of, or the preservation of the Bank’s rights under any Finance Documents; and

any proceedings threatened or instituted by or against the Bank as a consequence of it entering into a Finance Document.

The Borrower agrees to waive its right to claim a refund of all fees, expenses or other amounts paid by it to the Bank after the date of this Agreement if this Agreement becomes unenforceable or the Borrower is unable to draw the full or partial amount of the Commitment under this Agreement for any reason.

INDEMNITIES

The Borrower must indemnify the Bank against any loss or liability which the Bank incurs as a consequence of:

the occurrence of any Event of Default;

any failure by the Borrower to pay any amount due under any Finance Document on its due date (including, but not limited to, fees, costs and expenses arising in connection with a Loan being repaid or prepaid otherwise than on the last day of the Interest Period applicable to it);

(other than by reason of gross negligence or default by the Bank) a Loan not being drawn by the Borrower after a Utilisation Request has been delivered for that Loan;

a Loan (or part of a Loan) not being prepaid in accordance with this Agreement;

the investigation of any event which the Bank reasonably believes to be a Default;

acting or relying on any notice which the Bank reasonably believes to be genuine, correct and appropriately authorised;

obtaining of payment relating to the Borrower’s liability under the Finance Documents in any foreign currency (whether that payment results from a court’s decision or order requiring that the Borrower pay an indemnity or damages in any foreign currency to the Bank); or

the introduction of, or any change in any law or regulation, which affects the granting of a Loan to the Borrower.

The Borrower must pay to the Bank the amount of all fees, costs and expenses (including legal fees) incurred by it in connection with the unwinding of any derivative transaction entered into by the Bank in relation to the Finance Documents or the funding of the Loans under the Finance Documents as a result of the occurrence of a Default by the Borrower.

DISCLOSURE OF INFORMATION

The Bank may disclose information supplied to it by the Borrower in connection with the Finance Documents:-

to its affiliates or related person on a need to know basis;

which is publicly available, other than as a result of a breach by the Bank of this Clause;

in connection with any legal or arbitration proceedings;

if required to do so under any law or regulation;

to a governmental, banking, taxation or other regulatory authority;

to its professional advisers;

to any rating agency;

with the agreement of the Borrower; or

any person with (or through) whom that Bank enters into (or may enter into) any kind of assignment agreement.

This Clause supersedes any previous confidentiality undertaking given by the Bank in connection with this Agreement prior to it becoming a Party.

MISCELLANEOUS

Certificates and determinations

Amendments and Waivers

Any term of any Finance Document may only be amended in writing with the agreement of the Borrower and the Bank.

A waiver of any term of the Finance Documents may be granted in writing by the Bank.

Waivers and remedies cumulative

Assignments and transfers

Set-off

Severability

Notices

Effectiveness

Entire agreement

Governing law

[•]   

We refer to the Agreement. This is a Utilisation Request. Capitalised terms defined in the Agreement have the same meaning in this Utilisation Request unless otherwise defined in this Utilisation Request.

We wish to submit this irrevocable Utilisation Request to the Bank with an intention to drawdown on the following terms:

Utilisation Date: [•]; and

Amount: THB [•];

Our payment instructions are: [•].

We confirm that on the date of this Utilisation Request:

all representations and warranties given by the Borrower under the Agreement (including those contained in Clause 8 (Representations and Warranties) of this Agreement) remain true and correct in all respects;

no Default is outstanding or will result from the Loan; and

there is no event or series of events which could be reasonably expected to have a Material Adverse Effect.

By:

Name:

Title:

[•]   

We refer to the Agreement. This is a Receipt. Capitalised terms defined in the Agreement have the same meaning in this Receipt unless otherwise defined in this Receipt.

We hereby confirm that the Loan made by you has been received by us in accordance with the Utilisation Request dated [•] and such Loan is borrowed and received by us upon the terms and subject to the conditions set out in the Agreement in all respects.

By:

Name:

Title:

A copy of the latest company affidavit, memorandum of association and articles of association of each Obligor (which were issued not more than 30 (thirty) days prior to the date of this Agreement).

A copy of the list of shareholders of each Obligor, of which details are based on its share register and were verified and certified by the Obligor’s share registrar not more than 30 (thirty) days prior to the date of this Agreement, together with a representation of the Borrower that the list of shareholders is true and correct as at the date of this Agreement.

A copy of a resolution of the board of directors of each Obligor approving the terms of, and the transactions contemplated by, the Finance Document to which the Obligor is the party.

A power of attorney of each Obligor appointing any person (other than the authorised directors whose names are listed in the Obligor’s corporate affidavit) to execute and deliver the Finance Documents and other documents as contemplated by the Finance Documents on behalf of the Obligor.

A specimen of the signature of each person authorised on behalf of an Obligor to enter into any Finance Document or to sign or send any document or notice in connection with any Finance Document.

A written consent of the spouse of an Obligor to the entry into the Finance Documents if the Obligor is an individual who is married.

A certificate of an authorised signatory of the Borrower certifying that each copy document specified in this Schedule is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.

A copy of the latest financial statements

The Finance Documents executed by the parties thereto (together with all notices and acknowledgments thereto (if applicable)) and evidence that registrations required to be executed on or prior to the first Utilisation Date in order to effect and perfect any obligation under the Security Documents have been completed.

Evidence that all fees and expenses then due and payable from the Borrower under this Agreement have been or will be paid by the first Utilisation Date.

Evidence that all taxes (including stamp duty) payable in Thailand in connection with the execution and/or enforcement of the Finance Documents have been paid.

A copy of any other authorisation or other document, opinion or assurance which the Bank has notified the Borrower is necessary or desirable in connection with the entry into and performance of, and the transactions contemplated by, any Finance Document or for the validity and enforceability of any Finance Document.

A copy of meeting minutes of the Borrower and Fabrinet indicating that purpose of entering banking facilities with the Bank is to repay in full outstanding obligations under the existing credit agreement of Fabrinet.

Evidence that outstanding balance of term loan owed to Bank of America.

Evidence that the Borrower has appraisal value of collateral accepted by the Bank without any issue or comment before the date of this Agreement with condition that the Borrower’s LTV shall be £ 65 (Sixty Five) % and related insurances shall be received before the date of first drawdown.

Evidence that the Borrower’s NCB is checked with good result before the setup of all facilities for the Borrower.

Original of corporate guarantee from Fabrinet with condition that 1) its Debt Service Coverage Ratio (DSCR) shall be ³ 1.25 times and 2) its Debt to Equity Ratio (D/E) shall be £ 1.0 times; and in case of paying dividend, its Debt Service Coverage Ratio (DSCR) shall be ³ 1.50 times.

Status

Powers and authority

Legal validity

Non-conflict

any law or regulation applicable to such Obligor;

its company affidavit, objectives, memorandum of association and articles of association; or

any document which is binding upon the Obligor or any of its assets.

No default

No Default is outstanding or will result from the entry into of, or the performance of any transaction contemplated by, any Finance Document.

No other event or circumstance is outstanding which constitutes a default under any document which is binding on it or any of its assets to an extent or in a manner which has or is reasonably likely to have a Material Adverse Effect.

Authorisations

Ranking of Security

Litigation

Information

All information supplied by it to the Bank in connection with the Finance Documents is true and accurate in all material respects as at the date at which it is stated to be given; and

The Borrower has not omitted to supply any information which, if disclosed, might make the information supplied untrue or misleading in any material respect.

Financial statements

have been prepared in accordance with GAAP; and

give a true and fair view of its financial condition (consolidated, if applicable) as at the date to which they were drawn up, except, in each case, as disclosed to the contrary in those financial statements.

No material adverse change

Licences

Form of financial statements

Year end

Information - miscellaneous

copies of all documents despatched by the Borrower to its shareholders or any class of them (if the Borrower is a legal entity) or its creditors generally or any class of them at the same time as they are despatched;

promptly upon becoming aware of them, details of any litigation, arbitration or administrative proceedings against any Obligor which are current, threatened or pending and which have or might, if adversely determined, have a Material Adverse Effect;

promptly on request, such further information regarding the financial condition business and operations of any Obligor as the Bank may reasonably request; and

promptly any documentation or other evidence which is reasonably requested by the Bank (whether for itself or on behalf of any prospective transferee) to enable the Bank or prospective transferee to carry out the duty of monitoring status of the Borrower and be satisfied with the results of all applicable customer due diligence requirements.

Notification of Default

Authorisations

Compliance with laws

Pari passu ranking

Negative pledge

any Security Interest constituted by the Security Documents;

any lien arising by operation of law and in the ordinary course of business;

any Security Interest created over goods (or the related documents of title) and/or cash deposits in respect of letters of credit, trust receipt, bank guarantee or similar instruments issued at the request of the relevant Borrower in order to assure payment of raw materials, goods and/or services for operation of their ordinary course of business, provided that the underlying indebtedness is paid when due; and

any other Security Interest created with the prior written consent of the Bank.

Disposals

of assets which is made in the ordinary course of trading of the disposing entity; or

of assets in exchange for other assets comparable or superior as to type, value and quality;

Indebtedness

Loan or guarantee

Change of business

Capital reduction or mergers

Acquisitions or investment in other business

Loan to Value

repay or procure the repayment of such amount of the Loan as is required to restore the Loan to value ratio as determined by the Bank;

mortgage additional property in favour of the Bank on the same terms as those that apply to the Mortgaged Property; or

provide any other asset acceptable to the Bank and create Security Interest over such asset to restore the Loan to value ratio as determined by the Bank.

Insurance

The Borrower shall take out and renew insurance of the Mortgaged Property (if any), whether existing as at the date of this Agreement and/or to be constructed in the future, with one or more reliable insurance companies which is not under punishment pursuant to regulations of competent authority, provided that the Bank is named as a beneficiary as its interest may appear, so that the insurances are maintained in full force and effect throughout the time that the Loan owed by the Borrower to the Bank under the Finance Documents is outstanding. The insured amount shall at least be equal to the amount approved or determined by the Bank, without prejudice to the Bank’s right to increase the insured amount to be higher than the specified amount if it deems appropriate. The Bank shall be named as a beneficiary in respect of each insurance policy. The Borrower shall deliver all insurance policies to the Bank within the time specified by the Bank. In case of any amendment or variation of the insurance policy, prior notice shall be given to the Bank and prior approval from the Bank is required. Within the time specified by the Bank, the Borrower shall deliver the amended policy and/or other evidence showing the amendment or variation of the policy to the Bank.

If the Borrower does not take action as required in paragraph (a) above and/or does not renew any insurance policy, the Bank may immediately take such action at its sole discretion. The Bank shall also have the discretion to advance any payment for the Borrower without prior notice and the Borrower shall be liable to all of the relevant costs and expenses. The Borrower agrees and acknowledges that this Agreement shall constitute a power-of-attorney by which it authorises the Bank as its attorney to do all necessary acts and things relating to the insurances on its behalf, including to execute and/or sign any necessary documents and to appoint a substitute as the Bank thinks fit to do such acts and things on the Bank’s behalf. The Borrower shall not cancel, revoke or withhold those authorisations granted to the Bank by this Agreement for any reason.

Inspection of the Borrower’s business

Further Assurances

the execution of any transfer, conveyance, assignment or assurance of any property, whether to the Bank or to its nominee; or

the giving of any notice, order or direction and the making of any registration.

Purpose of the Loan

Compliance

BANK OF AYUDHYA PUBLIC COMPANY LIMITED

Name:

Witness

Witness