Document:

SWAP AGREEMENT BETWEEN THE COMPANY AND UNION BANK

Union Bank of California
Global Markets Group
Securities Funding Operations
445 South Figueroa Street G11-101
Los Angeles, CA  90071

Date:          July 24, 2001

To:            Diodes, Inc.
Attn:          Carl Wertz
Phone No:      (805) 446-4800 ext: 125
Fax No:        (805) 446-4850

FROM:          CRISELDA SAMILEY

DERIVATIVES OPERATIONS OFFICER
Phone No:      (213) 236-7958
Fax No.:       (213) 236-7366

RE:     SWAP TRANSACTION

        The purpose of this facsimile (this "Confirmation") is to confirm the
terms and conditions of the Swap Transaction entered into between Union Bank of
California, N.A. ("Party A") and Diodes, Inc. ("Party B") on the Trade Date
specified below.

        The definitions and provisions contained in the 2000 ISDA Definitions,
as published by the International Swaps and Derivatives Association, Inc., are
incorporated into this Confirmation. In the event of any inconsistency between
those definitions and the provisions of this Confirmation, this Confirmation
will govern.

1.      ISDA AGREEMENT

        This Confirmation evidences a complete and binding agreement between us
as to the terms of the Swap Transaction to which this Confirmation relates. In
addition, you and we agree to use all reasonable efforts promptly to negotiate,
execute and deliver an agreement in the form of the ISDA Master Agreement
(Multicurrency -- Cross Border) (the "ISDA" Form"), with such modifications as
you and we will in good faith agree. Upon the execution by you and us of such an
agreement, this Confirmation will supplement, form a part of, and be subject to
that agreement. All provisions contained in or incorporated by reference in that
agreement upon its execution will govern this Confirmation except as expressly
modified below. Until we execute and deliver that agreement, this Confirmation
shall supplement, form a part of, and be subject to an agreement in the form of
the ISDA Form as if we had executed an agreement in such form (but without any
Schedule except for the election of the laws of the State of California as the
governing law and US Dollars as the Termination Currency) on the Trade Date
specified below. In the event of any inconsistency between the provisions of
that agreement and this Confirmation, this Confirmation will prevail for the
purpose of this Swap Transaction.

2.      SWAP TRANSACTION

        The terms of the particular Swap Transaction to which this Confirmation
relates are as follows:

<TABLE>
<S>                                 <C>
Trade Date:                         July 24, 2001
Effective Date:                     July 31, 2001
Termination Date:                   November 30, 2004, subject to adjustment in accordance with the
                                      Modified Following Business Day Convention
Notional Amount:                    USD 7,500,000 amortizing in accordance with the Outstanding Notional
                                      Balance Schedule attached hereto
Business Days:                      New York and London
Calculation Agent:                  Party A
FIXED AMOUNTS:
Fixed Rate Payer:                   Party B
Fixed Rate:                         4.70 percent
Fixed Rate Day Count Fraction:      Actual/360
</TABLE>

                                       56
<PAGE>

<TABLE>
<S>                                 <C>
Fixed Rate Payer Payment Dates:     Last day of each month, from August 31, 2001 to the Termination Date
                                    inclusive, subject to adjustment in accordance with the Modified
                                    Following Business Day Convention

FLOATING AMOUNTS:

Floating Rate Payer:                Party A
Floating Rate Payer Payment Dates:  Last day of each month, from August 31, 2001 to the Termination Date
                                    inclusive, subject to adjustment in accordance with the Modified
                                    Following Business Day Convention
Floating Rate for the
Initial Calculation Period:         To be determined on July 27, 2001
Floating Rate Option:               USD-LIBOR-BBA
Designated Maturity:                1 month
Spread:                             None
Floating Rate Day Count Fraction:   Actual/360

RESET DATES:                        THE FIRST DAY OF EACH CALCULATION PERIOD

Method of Averaging:                Inapplicable
Compounding:                        Inapplicable
</TABLE>

3.      ACCOUNT DETAILS

        Payments to Party A:        PLEASE ADVISE
               Bank:                Union Bank of California, N.A.
               Account Name:        ___________________
               Account Number:      ___________________

        Payments to Party B:        PLEASE ADVISE
               Bank:                Union Bank of California, N.A.
               Account Name:        __________________
               Account Number:      __________________

        PARTY A  OPERATIONS CONTACT
        Name:    Criselda Samiley
        Tel. No: (213) 236-7958
        Fax No:  (213) 236-7366

        PARTY B  OPERATIONS CONTACT
        Name:    Carl Wertz
        Tel. No: (805) 446-4800 ext: 125
        Fax No:  (805) 446-4850

4.      OFFICES

        The Office of Party A for this Swap Transaction is Los Angeles,
        California.

        The Office of Party B for this Swap Transaction is Westlake Village,
        California.

5.      OTHER PROVISIONS

        Each party represents and warrants to the other party that, in
connection with this Swap Transaction, (i) it has and will continue to consult
with its own legal, regulatory, tax, business, investment, financial and
accounting advisors to the extent it deems necessary, and it has and will
continue to make its own investment, hedging and trading decisions (including,
without limitation, decisions regarding the appropriateness and/or suitability
of this Swap Transaction) based upon its own independent judgment and upon any
advice or recommendation from such advisors as it deems necessary, and not in
reliance upon the other party hereto or any of its Affiliates or any of their
respective officers, directors or employees, or any view expressed by any of
them, (ii) it has evaluated and it fully understands all the terms, conditions
and risks of this Swap Transaction, and it is willing to assume (financially and
otherwise) all such risks, (iii) it has and will continue to act as principal
and not agent of any person, and the other party hereto and its Affiliates have
not and will not be acting as fiduciary or financial, investment, commodity
trading or other advisor to it, and (iv) it is entering into this Swap
Transaction in connection with its line of business.

Please confirm that this facsimile correctly sets forth the terms of the Swap
Transaction by executing the copy of this Confirmation for that purpose and
returning it to us by facsimile transmission at (213) 236-7366.

Union Bank of California, N.A.           Diodes, Inc.
By:  /s/    Jeffrey Hiraishi             By: /s/    Carl Wertz
     Name:  Jeffrey Hiraishi                 Name:  Carl Wertz
     Title: Assistant Vice President         Title: CFO

                                       57<PAGE>
                                                                   EXHIBIT 10.39

                           FIRST AMENDMENT AND WAIVER
                               TO CREDIT AGREEMENT

      THIS FIRST AMENDMENT AND WAIVER TO CREDIT AGREEMENT (this "First
Amendment") dated as of August 10, 2001, is made and entered into by and between
DIODES INCORPORATED, a Delaware corporation ("Borrower"), and UNION BANK OF
CALIFORNIA, N.A., a national banking association ("Bank").

                                    RECITALS:

        A. Borrower and Bank are parties to that certain Credit Agreement dated
as of December 1, 2000 (the "Agreement"), pursuant to which Bank agreed to
extend certain credit facilities to Borrower in the amounts provided for
therein.

        B. Borrower and Bank desire to (i) reduce the amount of the Revolving
Credit Commitment (as such term is defined in the Agreement) from Nine Million
Dollars ($9,000,000) to Seven Million Five Hundred Thousand Dollars ($7,500,000)
and (ii) increase the interest rate applicable to the Loans (as such term is
defined in the Agreement) as provided for herein, subject, however, to the terms
and conditions of this First Amendment.

        C. Pursuant to Section 6.7 of the Agreement, Borrower agreed, among
other things, to cause Borrower and its Subsidiaries (excluding SKE) to maintain
a Fixed Charge Coverage Ratio (as such term is defined in the Agreement) of not
less than 1.0 to 1.0 as of the last day of each fiscal quarter. Borrower failed
to cause Borrower and its Subsidiaries (excluding SKE) to maintain a Fixed
Charge Coverage Ratio of not less than 1.0 to 1.0 as of the last day of the
fiscal quarter ended June 30, 2001, which failure constitutes an Event of
Default under Section 8.1(c) of the Agreement. Borrower has requested that Bank
agree to waive such Event of Default. Bank is willing to so waive the
aforementioned Event of Default, subject, however, to the terms and conditions
of this First Amendment.

                                   AGREEMENT:

        In consideration of the above recitals and of the mutual covenants and
conditions contained herein, Borrower and Bank agree as follows:

1. DEFINED TERMS. Initially capitalized terms used herein which are not
otherwise defined shall have the meanings assigned thereto in the Agreement.

2. AMENDMENTS TO THE AGREEMENT.

        (a) Section 1 of the Agreement is hereby amended by adding the
definition of "FIRST AMENDMENT" thereto in the appropriate alphabetical order,
which shall read in full as follows:

            "'FIRST AMENDMENT' shall mean that certain First Amendment and
Waiver to this Agreement dated as of August 10, 2001, by and between Borrower
and Bank."

        (b) The definition of "SUBORDINATED NOTE" appearing in Section 1 of the
Agreement is hereby amended to read in full as follows:

            "'SUBORDINATED NOTE' shall mean that certain Amended and Restated
Subordinated Promissory Note dated June 29, 2001, executed by Guarantor in favor
of Subordinating Creditor, in the original principal amount of Thirteen Million
Forty-Nine Thousand Dollars ($13,049,000), as such Subordinated Promissory Note
is in effect on the date of the First Amendment."

        (c) Section 2.1 of the Agreement is hereby amended by substituting the
amount "Seven Million Five Hundred Thousand Dollars ($7,500,000)" for the amount
"Nine Million Dollars ($9,000,000)" appearing in the seventh and eighth lines
thereof.

3. WAIVER.

        (a) Subject to the terms and conditions set forth in this First
Amendment, Bank hereby waives the Event of Default that occurred under Section
8.1(c) of the Agreement as a result of Borrower's failure, pursuant to Section
6.7 of the Agreement, to

                                       58
<PAGE>
cause Borrower and its Subsidiaries (excluding SKE) to maintain a Fixed
Charge Coverage Ratio of not less than 1.0 to 1.0 as of the last day of the
fiscal quarter ended June 30, 2001.

        (b) The waiver provided for in this Section 3 is limited precisely as
written and shall not be deemed to excuse Borrower's further performance of
Section 6.7 of the Agreement, or of any other condition, covenant or term
contained in the Agreement or any other Loan Document. Any failure or delay on
the part of Bank in the exercise of any right, power or privilege under the
Agreement or any other Loan Document shall not operate as a waiver thereof.

4. EFFECTIVENESS OF THIS FIRST AMENDMENT. This First Amendment shall become
effective as of the date hereof (the "Effective Date") when, and only when, Bank
shall have received all of the following, in form and substance satisfactory to
Bank:

        (a) A counterpart of this First Amendment, duly executed by Borrower and
acknowledged by Guarantor where indicated hereinbelow;

        (b) Replacement Notes, duly executed by Borrower;

        (c) Authorizations to Disburse with respect to the disbursement of the
proceeds of the Loans, each on Bank's standard form therefor, duly executed by
Borrower;

        (d) A First Amendment to Subordination Agreement, duly executed by
Seller, and acknowledged by Guarantor and Borrower;

        (e) A waiver and legal documentation fee in the sum of Fifteen Thousand
Dollars ($15,000); and

        (f) Such other documents, instruments or agreements as Bank may
reasonably deem necessary.

5. RATIFICATION.

        (a) Except as specifically amended hereinabove, the Agreement shall
remain in full force and effect and is hereby ratified and confirmed; and

        (b) Upon the effectiveness of this First Amendment, each reference in
the Agreement to "this Agreement", "hereunder", "herein", "hereof" or words of
like import referring to the Agreement shall mean and be a reference to the
Agreement as amended by this First Amendment and each reference in the Agreement
to the "Notes" or words of like import referring to the Notes shall mean and be
a reference to the replacement Notes issued pursuant to this First Amendment.

6. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants as follows:

        (a) Each of the representations and warranties contained in Section 5 of
the Agreement, as amended hereby, is hereby reaffirmed as of the date hereof,
each as if set forth herein;

        (b) The execution, delivery and performance of this First Amendment and
the execution and delivery of the replacement Notes are within Borrower's
corporate powers, have been duly authorized by all necessary corporate action,
have received all necessary approvals, if any, and do not contravene any law or
any contractual restriction binding on Borrower;

        (c) This First Amendment is, and the replacement Notes when delivered
for value received will be, the legal, valid and binding obligations of
Borrower, enforceable against Borrower in accordance with their respective
terms; and

        (d) No event has occurred and is continuing or would result from this
First Amendment which constitutes an Event of Default under the Agreement, or
would constitute an Event of Default but for the requirement that notice be
given or time elapse or both.

7. GOVERNING LAW. This First Amendment shall be deemed a contract under and
subject to, and shall be construed for all purposes and in accordance with, the
laws of the State of California.

8. COUNTERPARTS. This First Amendment may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.

WITNESS the due execution hereof as of the date first above written.

                                       59
<PAGE>
"Borrower"

DIODES INCORPORATED

By: /s/ Carl Wertz
Carl Wertz
Title: CFO

"Bank"

UNION BANK OF CALIFORNIA, N.A.

By: /s/ John Kase
John Kase
Title: VP

                           Acknowledgment of Guarantor

        The undersigned, as Guarantor pursuant to that certain Continuing
Guaranty dated as of [December 1, 2000] (the "Guaranty"), hereby consents to the
foregoing First Amendment and acknowledges and agrees, without in any manner
limiting or qualifying its obligations under the Guaranty, that payment of the
Obligations (as such term is defined in the Guaranty) and the punctual and
faithful performance, keeping, observance and fulfillment by Borrower of all of
the agreements, conditions, covenants and obligations of Borrower contained in
the Agreement are and continue to be unconditionally guaranteed by the
undersigned pursuant to the Guaranty.

FABTECH, INC.

By: /s/ Walter Buchanan
Walter Buchanan
Title: President

                                       60

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