Summary of Terms & Conditions 10-Year Term Loan Facility, dated May 6, 2020, between Super Micro Computer Inc. Taiwan and CTBC Bank
EX-10.28 3 smci-ex10282020630x10k.htm EXHIBIT 10.28 Exhibit
PRIVATE & CONFIDENTIAL
6 May 2020
ATTENTION: SUPER MICRO COMPUTER, INC. TAIWAN
TWD 1,200 Million 10-Year Term Loan Facility
Summary of Terms & Conditions
According to Super Micro’s needs of debt finance, CTBC Bank CO., LTD. Would like to propose the indicative bank facilities and terms below:
Super Micro Computer, Inc. Taiwan（美超微電腦股份有限公司）
To finance the construction cost of Bade Factory phase 1 expansion.
CTBC Bank Co., Ltd. ("CTBC")
Bade Factory, and its buildings after phase 1 expansion completed.
Serial No.: 桃園市八德區大安段 483-1 、484 建號
Land Serial No.: 桃園市八德區大安段 422-1、422-3、422-4、422-6、422-13、422-14、422-15、422-17 、422-18、422-21 、429、429-1、429-2、429-3 、430 、430-1、430-2、431 、431-1 、431-2 、431-4 、434 、434-2 、434-3 、434-4 、434-5 、538 、538-1 、538-3
TWD1,200,000,000only (CTBC facility no.: TW00129786)
Program loan-long term, non-revolving
120 months from the Initial Drawdown Date
2-year term floating rate of postal saving interest rate (2YR POSR) + 0.105%
Commission fee subsidy from National Development Fund
Loan Facility operates and governed in accordance with the guidelines of the National Development Fund ("NDF") "Loans for Accelerated Investment by Domestic Corporation" (根留台灣企業加速
投資專案貸款), the interest rate bearing could be deducted directly with such subsidy.
(For example: the approved commission fee rate is 0.50% for the first 5 years, therefore the actual interest rate bearing for the Borrower will be "2YR POSR - 0.395%" for the first 5 years, and "2YR POSR + 0.105%" for the last 5 years)
1. Drawdown application against commercial invoices issued within 6 months by the contractor. Each utilization amount is up to 80% of each invoice amount. Invoices payables paid by the Borrower are accepted. The invoice numbers which are financed shall be monitored in avoidance of multiple financing. Facility drawdowns are subject to pay and transfer to the contractor's account, except for those paid payables by the Borrower.
2. The portion of drawdown amount shall be draw according to the progree of construction. The identification of each progres of construction based on each verifciation letter issued by SGS Taiwan Limited.
Progress of Construction
For item 17~21, the order of drawdown could vary based on construction situation. The cumulative drawdown amount shall be constrained up to 71% of the Facility before the structure of the building is constructed.
Available for drawdown by the Borrower within 24 months from the Initial Drawdown Date Any undrawn facility amount shall be cancelled automatically at the end of the relevant Availability Period.
Subject to a grace period of 36 months after the Initial Drawdown Date, the total principal
outstanding under the Facility shall be amortized monthly from the 37th month.
Scheduled repayment day is set on the 15th day of each month.
Conditions Precedent for Initial Drawdown
Obtain a waiver from the USD250M Syndication arranged by Bank of America for Super Micro Computer, Inc. which is about limitation on debt facilities ceiling of the Borrower.
Delivery of copies of construction license of BaDe Factory phase 1 expansion
Delivery of copies of signed construction contract
Delivery of copies of investment plan for "Action Plan for Accelerated Investment by Domestic Corporations" (根留台灣企業加速投資專案貸款).
Delivery of copies of consent letter of qualification for "Action Plan for Accelerated Investment by Domestic Corporations " (根留台灣企業加速投資專案貸款).
Delivery of written consent form by the contractor who agrees to unconditionally waive any contractor's lien thereto and the rights to request for the lien registration.
Delivery of warranty by the Borrower of mortgage of unregistered buildings.
Delivery of warranty by the Borrower that shall not change the identity of project applicant (起造人).
Collateral shared mortgage with CTBC facility no. TW00026207 (ie: Short-Term revolver TWD 700 million). Total mortgage amount shall be no less than TWD 2,280 million via change of registration rights.
Immediately mortgage the buildings constructed on the land lots to CTBC at the first priority lien within 1 month after the completion of the construction and registration.
Delivery a collateral appraisal report from certified appraiser in form and substance satisfactory to CTBC within 2 months after the completion of the construction and registration.
In case the Borrower violates guidelines of "Action Plan for Accelerated Investment by Domestic Corporations" (根留台灣企業加速投資專案貸款), or the NDF ceases the commission fee subsidy, the applicable interest rate shall restore to "2YR POSR + 0.105%"
Major Covenants and Undertakings
The ultimate parent company Super Micro Computer, Inc. shall all times maintain, directly and indirectly, 100% of the Borrower's equity capital.
The Borrower shall keep accurate and complete accounting records and vouchers. In case the Borrower violates guidelines, the Borrower shall return all the commission fees paid by the NDF for the case.
The Borrower warrants that, during the period of construction by the project applicant, it shall not grant junior liens on the collateral to any third party.
The Borrower as the project applicant warrants that it shall not change the identity of the project applicant or any reduction of construction area without obtaining prior written consent from CTBC.
The following financial covenants shall be tested semi-annually based on the Borrower's financial statements:
(1) Current Ratio (Current Assets / Current Liabilities ) ≥ 100% ;
(2) Debt Service Coverage Ratio (EBITDA / (Current Portion of Long-Term Debt + Interest Expense ) ) ≥ 130% ;
(3) Financial Debt Ratio ( Total Financial Debts / Tangible Net Worth ) ≤ 180%
The above financial covenants shall be renegotiated whenever the Borrower engages phase 2 land acquisition plans.
For and on behalf of
CTBC BANK CO., LTD.
CTBC BANK CO., LTD.