exv10w2



 






Exhibit 10.2




(translated from German)




 




 




IXYS Semiconductor GmbH

Management

Edisonstr. 15

68623 Lampertheim



2 June 2005




Dear Sirs,


with reference to our conversations, we would like to offer you a loan (loan 1):




	 	 	 
	Nominal loan value

	 	€10,000,000.00
	 
	 	 
	Payout ratio

	 	100%
	 
	 	 
	Interest rate

	 	EURIBOR (EURO Interbank Offered Rate) in addition to an
initial interest rate markup of 0.75% p.a. for interest
periods of 3 months.
	 
	 	 
	EURIBOR

	 	means the EURIBOR interest rate per annum published on the
Reuters page Euribor 01 at 11.00 hours Brussels time two Target
days prior to the beginning of the respective interest period. If
the EURIBOR rate is not announced on the respective fixing day,
we shall be entitled to determine the interest rate, taking
appropriate account of you interests.
	 
	 	 
	Target days

	 	are days on which Target payments are performed in the
TransEuropean Automated Realtime Gross Settlement System
(Target). Payments cannot be performed on Saturdays, Sundays
and on Target holidays. At present Target holidays are New
Year’s Day, Good Friday, Easter Monday, 1 May, Christmas Day
and 26 December. There are no further Target holidays at
present.
	 
	 	 
	Interest period

	 	means each period of time beginning on the day of payment
or on the last day of the previous interest period and
expires on the day which numerically corresponds to the
first day of the respective interest period in the
3rd month afterwards; however considering that







	 	•	 	if there is no numerically corresponding day, the
interest period shall expire on the last Target day of
the respective month; or





 









 











	 	•	 	if the respective day is no Target day, the
interest period shall expire on the following Target day
or on the previous Target day if the following Target day
would fall into the next calendar month; and
	 
	 	•	 	an interest period must not exceed the next
redemption date and shall expire on that redemption date.





	 	 	 
	 

	 	The first interest period shall, notwithstanding the
provision above, be selected so that an interest period
shall expire on the 1st redemption date.
	 
	 	 
	Redemption date

	 	interest shall be payable subsequently on the last day of
an interest period.
	 
	 	 
	Interest calculation method

	 	the actual number of calendar days elapsed
divided by 360. Since the last day of an
interest period is the first day of the next
interest period, the last day of an interest
period is not taken into account in the
calculation.
	 
	 	 
	Right of premature redemption

	 	to the end of an interest period
with a 10-day period of notice. In
the event of termination, the
outstanding loan amount shall be
payable in addition to interest on
the termination date.
	 
	 	 
	Redemption

	 	60 redemption installments; 59 installments in the amount of

€166,666.67 and one final installment in the amount of

€166,666.47, payable on the interest dates on a quarterly
basis.
	 
	 	 
	 

	 	first installment on 30 September 2005

last installment on 30 June 2020
	 
	 	 
	Interest on defaulted payment

	 	If payments are not received in due
time, we shall charge interest for
the respective amount at 5% above
the applicable base interest rate
p.a. in accordance with Section 247
of the German Civil Code.
	 
	 	 
	Availability

	 	The payment obligation shall expire on 30 June 2005.
	 
	 	 
	 
	 	 
	 
	 	 
	Security

	 	The loan shall be secured by:
	 
	 	 
	 

	 	the land charges (Grundschulden) registered in the Land Register (Grundbuch) of
Lampertheim (Local Court (Amstgericht) Lampertheim) on Sheet 16794 in Div. III
under






 









 






	 	 	 
	 

	 	numbers 1 and 2 amounting to DEM 13,250,000.00 shall be assigned to us,
the IKB Deutsche Industriebank Aktiengesellschaft, Düsseldorf und Berlin, by
the COMMERZBANK Aktiengesellschaft, branch Mannheim situated at Mannheim in a
notarized form; we presume in this context that contractual or statutory claims
for deletion of the land charges do not exist.
	 
	 	 
	Payment

	 	The credit shall be paid out as soon as we receive the following:







	 	•	 	declaration of consent in accordance with the enclosed
draft;
	 	•	 	opening of an account in accordance with the draft you
have received;
	 	•	 	power of representation in accordance with the draft you
have received;
	 	•	 	opinion on fair market value for real property at
Lampertheim, Edisonstr. 15.





	 	 	 
	Conditions for
granting of the loan

	 	During the term of the loan, you shall be obliged to
conduct legal transactions only in the course of
ordinary business activities and not with affiliated
third parties in the sense of Section 15 of the German
Stock Corporations Act (AktG) at customary conditions.
	 
	 	 
	 

	 	A further condition for granting of the loan is the
legally binding creation of the aforementioned land
charges by 15 July 2005 by submission of the following
documents:







	 	•	 	the notarized declaration of assignment made by
COMMERZBANK Aktiengesellschaft, branch Mannheim in
Mannheim in favor of IKB Deutsche Industriebank
Aktiengesellschaft, Düsseldorf und Berlin with respect
to the amount of DEM 13,250,000.00 in accordance with
the enclosed form, in addition to all copies of land
charge creation deeds (Gurndschuldbestellungsurkunden)
and a certified copy of the Land Register sheet made on
a date after execution of the assignment in the Land
Register, on which we can identify the agreed rank at
the time of assignment; instead of the aforementioned copy of the Land Register
sheet, we shall be satisfied with an advance
confirmation by the assignor that the land charges in
the rank negotiated by us shall be held in trust by us
until the assignment has been executed in the Land
Register; if required, a legally effective waiver of
any claims for deletion shall be made; the declaration
of assignment in addition to all copies of land charge
creation deeds must be submitted to us by 20 June 2005,
so that we can initiate the transfer of land charges by
15 July 2005; the land charge transfer costs will be
invoiced separately.





 









 











	 
	 	•	 	the signed and legally binding security
agreement for the land charges in accordance with the
enclosed draft; please sign both copies and return them
to us. We will countersign the second copy and send it
back to you.
	 	•	 	the signed and legally binding authorization to
accept service in accordance with the enclosed
declaration;
	 	•	 	confirmation by the in-house lawyer of IXYS Corporation or an American attorney with the following
content:

 — the IXYS Corporation has been founded in a legally
effective manner;

 — the persons who signed the security agreement and the
authorization to accept service are authorized to affix
their legally binding signature on behalf of IXYS
Corporation;

 — the required approvals (Board resolution) for making
the aforementioned declarations were either given or
not necessary in accordance with the IXYS Corporation
statutes.

This confirmation may also be prepared in English.
	 	•	 	a letter acceptable to us by IXYS Corporation
written in English, reflecting the essential content of
the security agreement and authorization to accept
service and confirming that the undersigning persons
have understood the content of the agreements prepared
in German.





	 	 	 
	Additional prerequisites
for granting of the
loan / right of
termination / interest
rate markup

	 	Our decision to grant a loan is based, among
others, on the following financial key figures
calculated from the preliminary annual statement as
at 31 March 2005 that you have submitted to us, and
we presume that the final figures as at 31 March
2005 will not deviate significantly from the
preliminary figures:







	 	1.	 	Equity capital quota of 39.5%
	 	2.	 	Debt equity ratio of 0.5 years





	 	 	 
	 

	 	The calculation and definition of these financial
key figures are shown in detail in Annex 1.
	 
	 	 
	 

	 	The calculated debt equity ratio mentioned above
results in an interest rate markup of initially
0.75% p.a.
	 
	 	 
	 

	 	Changes in the debt equity ratio calculated on the
basis of the annual statements you are obliged to
submit to us will result in the following changes
of the interest rate markup:






 









 






	 	 	 
	 

	 	Interest rate markup of
	 
	 	 
	 

	 	Debt equity ratio of
	 
	 	 
	 

	 	0.70 % p.a.

0.4 and less
	 
	 	 
	 

	 	0.75 % p.a.

0.5 to 2.5
	 
	 	 
	 

	 	0.90 % p.a.

2.6 to 4.7
	 
	 	 
	 

	 	1.25 % p.a.

4.8 and more
	 
	 	 
	 

	 	Upon submission of your annual statement, we
will calculate the debt equity ratio and inform you
about the respective interest rate markup in
writing without delay. This interest rate markup
shall apply starting the interest period following
the interest period in which we notify you about a
change of the interest rate markup based on your
annual statement submitted to us.
	 
	 	 
	 

	 	During the term of the loan, you shall be obliged to







	 	•	 	maintain an equity capital quota of at
least 25%, and equity capital in the amount of at
least €10,000,000.00, and
	 	•	 	a debt equity ratio of max. 5.5 years.





	 	 	 
	 

	 	Falling below the equity capital quota, the equity capital or exceeding the
debt equity ratio shall each constitute good cause for termination without
notice. Furthermore, the termination provisions set forth in Item 19 of our
General Terms of Business shall apply.
	 
	 	 
	Duty to inform / contract adaptation

	 	During the term of the loan, you
shall continue to apply the
accounting principles of the annual
statement as at 31 March 2004, you
shall not alter the options
regarding approach and valuation
and maintain the profit-and-loss
format (expenditure type format /cost-of-sales
format) as well as
the present legal structure. You
shall inform us immediately in case
of any deviations and stipulate an
adaptation of the financial key
figure calculation or the above
mentioned debt equity ratio and
interest rate adaptation,
respectively, if we deem this to be
appropriate.






 









 






	 	 	 
	Reporting dates

	 	You must submit your annual statement including auditor’s
report at the latest 5 months after the end of your
fiscal year.
	 
	 	 
	Further duty to inform /auditing
and inspection rights

	 	For the duration of our business
relationship, you shall grant us
the right to inspect your books and
records as well as your business
operation.
	 
	 	 
	 

	 	You shall inform us about the
current economic and financial
situation in writing on a quarterly
basis by submitting managerial
analyses (including profit-and-loss
statement and balance sheet) as
well as an overview of loans and
collaterals at the latest 6 weeks
after the end of the quarter.
	 
	 	 
	Further parts of the contract

	 	our General Terms of Business as enclosed.
	 
	 	 
	Data transmission within the Group

	 	To ensure optimum service within
the IKB Group, we request your
consent to company-wide data
access. Please sign the declaration
of consent and return it to us.
	 
	 	 
	Other documents to be submitted

	 	In order to obtain the customary
letters of trust, we kindly ask you
to send us
	 
	 	 
	 

	 	a copy of the current fire insurance policy for the building on the company premises at Lampertheim.
	 
	 	 
	 

	 	In addition, we kindly request that you provide documentation of your insurance
cover for the risks of business interruption and business liability by
submission of copies of the respective insurance policies.
	 
	 	 
	Assignment / transfer of the credit
risk to third parties, disclosure
of information

	 	We may, to ease the equity capital
strain or to diversify the risk,
transfer the economic risk wholly
or in part to third parties; this
may be by means of credit
derivatives, disposal of loan
claims or credit subparticipation;
in this context, loan claims,
including the pertaining
collaterals, if applicable, may
also be assigned or pledged. The
disposal of rights arising
hereunder can also be used for
refinancing purposes. We shall be
permitted to disclose the
information required for this
purpose to the third party as well
as to any persons involved in
handling the transfer for technical
or legal reasons, e.g. rating
agencies or auditors. In this
respect, you shall also release us
from the banking secrecy. Moreover,
we shall be allowed to transfer the
economic risk arising from the
granting of the loan in an
anonymous form wholly or in part to
an acquirer (e.g. in context with
asset-backed securities
transactions).
	 
	 	 
	 

	 	The third party may be a member of
the European system of Central
Banks, a credit institution, a
financial services institution, a
finance company, an insurance
company, a company pension system,
a pension fund, an investment
company or an institutional
investor.






 









 






	 	 	 
	 

	 	Prior to disclosing any
information, we shall require the
third party or, if applicable, any
other persons set forth in the
first paragraph above, to enter
into a confidentiality agreement,
unless the obligation to
confidentiality is already given
due to legal or professional
regulations. Confidentiality
includes keeping all
customer-related data and
valuations secret which they become
aware of on the occasion of credit
risk transfer, and to only use the
information transmitted to the
extent this is necessary to
implement the respective measures.
Prior to transferring any rights
hereunder or disclosing any
information, we shall require the
addressee of the credit risk to
enter into corresponding
confidentiality agreements with any
further addressees.
	 
	 	 
	Direct debit collection

	 	To simplify payment procedure, we recommend
direct debit collection. Please sign the direct
debit authorization and return it to us.
	 
	 	 
	Turnover tax information

	 	Services rendered in context with the granting of loans are
tax-exempt pursuant to Section 4 no. 8 of the German
Turnover Tax Law (UStG).
	 
	 	 
	Acceptance

	 	until 20 June 2005 using the enclosed declaration of consent.





We are looking forward to establishing business contacts with you through the
present loan.




Sincerely



IKB Deutsche Industriebank AG



 



 



Deselaers                    Georgiadis



Enclosures



Appendix 1



a) The Financial Covenants are calculated as follows:




	 	 	 
	Equity-Ratio =

	 	Equity * 100
	 

	 	Adjusted Balance Sheet Total
	 
	 	 
	Degree of Indebtedness =

	 	Net Indebtedness
	 

	 	Cash-Flow






 









 






b) The components of the above-mentioned terms are calculated as follows:



(Basis: preliminary annual accounts per 31.03.2005 of IXYS Semiconductor GmbH)




E Q U I T Y




	 	 	 	 	 
	 	 	Amount in TEUR	 
	Description	 	per 31.03.05	 
	+ Nominal capital

(Subscribed capital; ordinary capital; capital stock; fixed
capital accounts; limited liability capital)
	 	 	2,556	 
	+ Reserves

(Capital reserves; legal reserve; reserves for own holdings;
statutory reserves; other revenue reserves)
	 	 	7,637	 
	+ Inappropriate net income

(Profit brought forward; loss carried forward)
	 	 	- 1,300	 
	+ Result for the Year

(Profit/Loss for the year)
	 	 	3,456	 
	+ Minority interest third parties
	 	 	—	 
	+ Difference deriving from capital consolidation (group) > 0
	 	 	—	 
	+ Shareholder loans

(Liabilities to shareholder; variable capital accounts with
positive balance)
	 	 	1,687	 
	+ Profit-sharing rights outstanding
	 	 	—	 
	+ Dormant partner capital
	 	 	—	 
	+ Jouissance right capital
	 	 	—	 
	+ Special reserve item * 50%
	 	 	—	 
	./. Own shares
	 	 	—	 
	./. Not paid-in capital
	 	 	—	 
	./. Balance
between intercompany financial receivables —
intercompany financial liabilities excluding liabilities to
IKB (positive Balance of financial liabilities is not
considered)
	 	 	./. 1,811	 






..2




E Q U I T Y




	 	 	 	 	 
	 	 	Amount in TEUR	 
	Description	 	per 31.03.2005	 
	./. Claims on partners / shareholders

(Loans to shareholders; variable capital accounts < 0)
	 	 	—	 
	./. Goodwill
	 	 	—	 
	./. Deferred taxes
	 	 	—	 
	./. Capitalized start-up and expansion expenses
	 	 	—	 
	./. Pension reserves not carried as liabilities
	 	 	—	 
	TOTAL
	 	 	12,225	 






 









 





Adjusted  B A L A N C E   S H E E T   T O T A L




	 	 	 	 	 
	 	 	Amount in TEUR	 
	Description	 	per 31.03.2005	 
	+ Fixed assets
	 	 	1,281	 
	+ Current assets
	 	 	29,583	 
	+ Capitalized Prepaid expenses
	 	 	15	 
	./. Own shares
	 	 	—	 
	./. Not paid-in capital
	 	 	—	 
	./. Claims on partners / shareholders
(Loans to shareholders; variable capital accounts < 0)
	 	 	—	 
	./. Goodwill
	 	 	—	 
	./. Deferred taxes
	 	 	—	 
	./. Pension reserves not carried as liabilities
	 	 	—	 
	TOTAL
	 	 	30,879	 






C A S H – F L O W




	 	 	 	 	 
	 	 	Amount in TEUR	 
	Description	 	per 31.03.2005	 
	+ Operating and Financial Results
	 	 	5,457	 
	+ Ordinary depreciation / Amortization on all
assets
	 	 	345	 
	TOTAL
	 	 	5,802	 






 









 





..3




O P E R A T I N G   A N D   F I N A N C I A L   R E S U L T S




	 	 	 	 	 
	 	 	Amount in TEUR	 
	Description	 	per 31.03.2005	 
	+ Profit or loss on ordinary activities
(including deviations due to converted
currencies)
	 	 	5,457	 
	./. Income not relating to the period under
review
(income from the disposal of investments; income
from claims charged off; payments and
reimbursements for previous years)
	 	 	—	 
	+ Expenses not related to the period under review
(book loss from disposal of investments;
expenses not related to the period under review)
	 	 	—	 
	+ Special depreciation on current asset items
	 	 	—	 
	+ Depreciation on current asset items
	 	 	—	 
	+ Depreciation on financial investments
	 	 	—	 
	+ Depreciation / Amortization of goodwill
	 	 	—	 
	+ Cancellation of long-term provisions
	 	 	—	 
	+ Profit & Loss statement relevant allocation to
special items with provisions component
	 	 	—	 
	./. Other taxes
	 	 	—	 
	./. Profit & Loss statement relevant release of
special items with provision component
	 	 	—	 
	TOTAL
	 	 	5,457	 






N E T   I N D E B T E D N E S S




	 	 	 	 	 
	 	 	Amount in TEUR	 
	Description	 	per 31.03.2005	 
	+ Adjusted Balance Sheet Total
	 	 	30,879	 
	./. Equity
	 	 	./. 12,225	 
	./. Balance between intercompany financial
receivables — intercompany financial liabilities
excluding liabilities to IKB (positive Balance of
financial liabilities is not considered)
	 	 	./.   1,811	 
	./. Trade receivables
	 	 	./.   8,103	 
	./. Other assets
	 	 	./.   1,426	 
	./. Liquid Assets

(Cheques / cash assets / cash in banks; cash in accounts
of Deutsche Bundesbank)
	 	 	./.   4,176	 
	TOTAL
	 	 	3,138	 






..4




Thus the Equity-Ratio per 31.03.2005 is calculated as follows:




	 	 	 	 	 	 	 	 	 
	Equity-Ratio

	 	=
	 	Equity * 100	 	 	 	 
	 

	 	 	 	Adjusted Balance Sheet Total	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	=
	 	TEUR 12,225.* 100
	 	=
	 	39.5 %
	 

	 	 	 	TEUR 30,879	 	 	 	 






 









 





Thus the Degree of Indebtedness per 31.03.2005 is calculated as follows:




	 	 	 	 	 	 	 	 	 
	Degree of Indebtedness

	 	=
	 	Net Indebtedness	 	 	 	 
	 

	 	 	 	Cash-Flow	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	=
	 	TEUR 3,138
	 	=
	 	0.5 Years
	 

	 	 	 	TEUR 5,802	 	 	 	 






Declaration of Approval




KD 161153



We do hereby confirm our approval of your commitment regarding the




     Loan no. 1 dated 02 June 2005


which shall be subject to your General Terms and Conditions which we are aware of.



Would you please be as kind as to transfer the proceeds of the loan at our expense and risk into
the account specified below as soon as the conditions of payments are fulfilled:



Account no.

Sort code

Account holder




Lampertheim, 6 June 05


(Company seal,

legally binding signatures)