THIS CREDIT AGREEMENT
(this “Agreement”) is entered into as of August 17, 2011, by and
between SYNAPTICS INC
ORPORATED, a Delaware
corporation (“Borrower”), and WELLS FARGO BANK,
NATIONAL ASSOCIATION (“Bank”).
Borrower has requested that Bank extend or continue credit to Borrower as described below,
and Bank has agreed to provide such credit to Borrower on the terms and conditions contained
THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Bank and Borrower hereby agree as follows:
SECTION 1.1. LINE OF CREDIT.
(a) Line of Credit. Subject to the terms and conditions of this Agreement, Bank hereby agrees
to make advances to Borrower from time to time up to and including September 1, 2012, not to exceed
at any time the aggregate principal amount of Fifty Million Dollars ($50,000,000.00) (“Line of
Credit”), the proceeds of which shall be used to finance Borrower’s working capital requirements.
Borrower’s obligation to repay advances under the Line of Credit shall be evidenced by a promissory
note dated as of August 17, 2011 (“Line of Credit Note”), all terms of which are incorporated
herein by this reference.
(b) Letter of Credit Subfeature
. As a subfeature under the Line of Credit, Bank agrees from
time to time during the term thereof to issue or cause an affiliate to issue standby letters of
credit for the account of Borrower (each, a “Letter of Credit” and collectively, “Letters of
Credit”); provided however, that the aggregate undrawn amount of all outstanding Letters of Credit
shall not at any time exceed Five Million Dollars ($5,000,000.00). The form and substance of each
Letter of Credit shall be subject to approval by Bank, in its sole discretion. Each Letter of
Credit shall be issued for a term not to exceed three hundred sixty-five (365) days, as designated
by Borrower; provided, however, that in the event that the Line of Credit is not renewed or
extended beyond its then applicable maturity date, Borrower shall deliver to Bank cash or cash
equivalents in an amount equal to the amount available to be drawn under then outstanding Letters
of Credit, which amount shall be maintained in an account with Bank as collateral for Borrower’s
obligations under such Letters of Credit. The undrawn amount of all Letters of Credit shall be
reserved under the Line of Credit and shall not be available for borrowings thereunder. Each Letter
of Credit shall be subject to the additional terms and conditions of the Letter of Credit
s, applications and any related documents required by Bank in connection with the issuance
thereof. Each drawing paid under a Letter of Credit shall be deemed an advance under the Line of
Credit and shall be repaid by Borrower in accordance with the terms and conditions of this
Agreement applicable to such advances; provided however, that if advances under the Line of Credit
are not available, for any reason, at the time any drawing is paid, then Borrower shall immediately
pay to Bank the full amount drawn, together with interest thereon from the date such drawing is
paid to the date such amount is fully repaid by Borrower, at the rate of interest applicable to
advances under the Line of Credit. In
such event Borrower agrees that Bank, in its sole discretion, may debit any account maintained by
Borrower with Bank for the amount of any such drawing.
(c) Borrowing and Repayment. Borrower may from time to time during the term of the Line of
Credit borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject to all
of the limitations, terms and conditions contained herein or in the Line of Credit Note; provided
however, that the total outstanding borrowings under the Line of Credit shall not at any time
exceed the maximum principal amount available thereunder, as set forth above.
SECTION 1.2. INTEREST/FEES.
(a) Interest. The outstanding principal balance of each credit subject hereto shall bear
interest, and the amount of each drawing paid under any Letter of Credit shall bear interest from
the date such drawing is paid to the date such amount is fully repaid by Borrower, at the rate of
interest set forth in each promissory note or other instrument or document executed in connection
(b) Computation and Payment. Interest shall be computed on the basis of a 360-day year,
actual days elapsed. Interest shall be payable at the times and place set forth in each promissory
note or other instrument or document required hereby.
(c) Letter of Credit Fees. Borrower shall pay to Bank fees upon the issuance of each Letter of
Credit, upon the payment or negotiation of each drawing under any Letter of Credit and upon the
occurrence of any other activity with respect to any Letter of Credit (including without
limitation, the transfer, amendment or cancellation of any Letter of Credit) determined in
accordance with Bank’s standard fees and charges then in effect for such activity.
SECTION 1.3. COLLECTION OF PAYMENTS. Borrower authorizes Bank to collect all principal,
interest and fees due under each credit subject hereto by charging Borrower’s deposit account
number 4121528574 with Bank, or any other deposit account maintained by Borrower with Bank, for the
full amount thereof. Should there be insufficient funds in any such deposit account to pay all such
sums when due, the full amount of such deficiency shall be immediately due and payable by Borrower.
SECTION 1.4. CERTAIN DEFINED TERMS.
“Loan Documents” means this Agreement and each promissory note, contract, instrument and other
document required hereby or at any time hereafter delivered to Bank in connection herewith.
“Material Adverse Effect” means (a) a material adverse effect on the business, properties,
operations or condition (financial or otherwise) of the Borrower and its Subsidiaries taken as a
whole, (b) an material impairment of Borrower’s ability to repay its obligations to Bank, (c) a
material adverse effect on the legality, validity or enforceability of this Agreement or the other
“Other Assets” means all assets now owned or hereafter acquired by Borrower or any of its
Subsidiaries, excluding Restricted Assets.
“Permitted Liens” means such of the following as to which no enforcement, collection,
execution, levy or foreclosure proceeding shall have been commenced: (a) liens described on
Schedule 1 attached hereto and incorporated herein by reference, (b) liens for taxes,
assessments and governmental charges or levies not yet due and payable; (c) liens imposed by law,
such as materialmen’s, mechanics, carriers, workmen’s and repairmen’s liens and other similar liens
arising in the ordinary course of Borrower’s business securing obligations that are not overdue for
a period of more than 30 days; (d) pledges or deposits to secure obligations under workers’
compensation laws or similar legislation or to secure public or statutory obligations; (e)
easements, rights of way and other encumbrances on title to real property that do not render title
to the property encumbered thereby unmarketable or materially adversely affect the use of such
property for its present purposes, and (f) purchase money liens on Other Assets acquired by
Borrower or any Subsidiary in the ordinary course of business provided that each such lien attaches
to the acquired property concurrently with its acquisition and the principal amount of all
indebtedness secured by such purchase money liens shall not exceed in the aggregate of
“Permitted Acquisition” means the acquisition by Borrower or a Subsidiary of (a) all or
substantially all the assets of another entity, of a division of another entity or of an
identifiable line of business of another entity, or (b) more than 50% of the common stock of
another corporation or of the equity interests of any other form of entity, provided that, in each
case (i) such acquisition is approved by the Board of Directors (or other governing body) of the
corporation or other entity whose assets or equity interests are being acquired, (ii) Borrower is
in compliance with all terms and conditions of this Agreement prior to such acquisition and would
remain in pro forma compliance therewith following such acquisition, as evidenced by a certificate
of pro forma compliance delivered to Bank prior to such acquisition (which shall also demonstrate
pro forma compliance with the Required Liquidity Level), (iii) the assets acquired are used in or
the entity acquired is in generally the same line(s) of business as Borrower and its Subsidiaries
as of the date of this Agreement, and (iv) immediately following such acquisition, the Required
Liquidity Level would be and is maintained.
“Required Liquidity Level” means Borrower’s unrestricted and unencumbered cash, cash
equivalents and marketable securities of not less than $125,000,000.00 plus an amount equal to the
outstanding balance of the Line of Credit on the applicable date of determination.
“Restricted Assets” means all accounts receivable, inventory and intellectual property now
owned or hereafter acquired by Borrower or any of its Subsidiaries.
“Subsidiary” means, in respect of Borrower, a corporation or other business entity the shares
constituting a majority of the outstanding capital stock (or other form of ownership) or
constituting a majority of the voting power in any election of directors (or shares constituting
both majorities) of which are (or upon the exercise of any outstanding warrants, options or other
rights would be) owned directly or indirectly at the time in question by such entity or another
subsidiary of such entity or any combination of the foregoing. As of the date hereof, the entities
named in Schedule II hereto are the only Subsidiaries of Borrower.
REPRESENTATIONS AND WARRANTIES
Borrower makes the following representations and warranties to Bank, which representations and
warranties shall survive the execution of this Agreement and shall continue in full force and
effect until the full and final payment, and satisfaction and discharge, of all obligations of
Borrower to Bank subject to this Agreement.
SECTION 2.1. LEGAL STATUS. Borrower and each Subsidiary is duly organized and existing and in
good standing under the laws of its respective jurisdiction of organization, and is qualified or
licensed to do business (and is in good standing as a foreign corporation, if applicable) in all
jurisdictions in which such qualification or licensing is required or in which the failure to so
qualify or to be so licensed could have a Material Adverse Effect.
SECTION 2.2. AUTHORIZATION AND VALIDITY. The Loan Documents have been duly authorized, and
upon their execution and delivery in accordance with the provisions hereof will constitute legal,
valid and binding agreements and obligations of Borrower or the party which executes the same,
enforceable in accordance with their respective terms.
SECTION 2.3. NO VIOLATION. The execution, delivery and performance by Borrower or its
Subsidiaries, as applicable, of each of the Loan Documents executed by such party do not violate
any provision of any law or regulation, or contravene any provision of the Articles of
Incorporation or By-Laws or other operative formation or governing documents of Borrower or such
Subsidiaries, or result in any breach of or default under any contract, obligation, indenture or
other instrument to which Borrower or any Subsidiary is a party or by which Borrower or any
Subsidiary may be bound.
SECTION 2.4. LITIGATION. There are no pending, or to the best of Borrower’s knowledge
threatened, actions, claims, investigations, suits or proceedings by or before any governmental
authority, arbitrator, court or administrative agency which could have a Material Adverse Effect,
other than those disclosed by Borrower to Bank in writing prior to the date hereof.
SECTION 2.5. CORRECTNESS OF FINANCIAL STATEMENT. The annual consolidated financial statement
of Borrower dated June 30, 2011, and all interim financial statements delivered to Bank since said
date, true copies of which have been delivered by Borrower to Bank prior to the date hereof, (a)
are complete and correct and present fairly the financial condition of Borrower and its
Subsidiaries on a consolidated basis, (b) disclose all liabilities of Borrower that are required to
be reflected or reserved against under generally accepted accounting principles, whether liquidated
or unliquidated, fixed or contingent, and (c) have been prepared in accordance with generally
accepted accounting principles consistently applied. Since the dates of such financial statements
there has been no Material Adverse Effect, nor has Borrower or any Subsidiary mortgaged, pledged,
granted a security interest in or otherwise encumbered any of its assets or properties except in
favor of Bank or as otherwise permitted by Bank in writing.
SECTION 2.6. INCOME TAX RETURNS. Borrower has no knowledge of any pending assessments or
adjustments of its or any Subsidiary’s income tax payable with respect to any year.
SECTION 2.7. NO SUBORDINATION. There is no agreement, indenture, contract or instrument to
which Borrower or any Subsidiary is a party or by which Borrower or any Subsidiary may be bound
that requires the subordination in right of payment of any of Borrower’s or any Subsidiary’s
obligations subject to this Agreement or any other Loan Document to any other obligation of
Borrower or any Subsidiary.
SECTION 2.8. PERMITS, FRANCHISES. Borrower and each Subsidiary possesses, and will hereafter
possess, all permits, consents, approvals, franchises and licenses required and rights to all
trademarks, trade names, patents, and fictitious names, if any, necessary to enable it to conduct
the business in which it is now engaged in compliance with applicable law.
SECTION 2.9. ERISA. Borrower is in compliance in all material respects with all applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended or recodified from
time to time (“ERISA”); Borrower has not violated any provision of any defined employee pension
benefit plan (as defined in ERISA) maintained or contributed to by Borrower (each, a “Plan”); no
Reportable Event as defined in ERISA has occurred and is continuing with respect to any Plan
initiated by Borrower; Borrower has met its minimum funding requirements under ERISA with respect
to each Plan; and each Plan will be able to fulfill its benefit obligations as they come due in
accordance with the Plan documents and under generally accepted accounting principles.
SECTION 2.10. OTHER OBLIGATIONS. Neither Borrower nor any Subsidiary is in default on any
obligation for borrowed money, any purchase money obligation or any other material lease,
commitment, contract, instrument or obligation.
SECTION 2.11. ENVIRONMENTAL MATTERS. Except as disclosed by Borrower to Bank in writing prior
to the date hereof, Borrower and each domestic Subsidiary is in compliance in all material respects
with all applicable federal or state environmental, hazardous waste, health and safety statutes,
and any rules or regulations adopted pursuant thereto, which govern or affect any of Borrower’s or
any Subsidiary’s operations and/or properties, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act of 1986, the Federal Resource Conservation and Recovery Act of 1976, and the
Federal Toxic Substances Control Act, as any of the same may be amended, modified or supplemented
from time to time. None of the operations of Borrower or any Subsidiary is the subject of any
federal or state investigation evaluating whether any remedial action involving a material
expenditure is needed to respond to a release of any toxic or hazardous waste or substance into the
environment. Neither Borrower nor any Subsidiary has any material contingent liability in
connection with any release of any toxic or hazardous waste or substance into the environment.
SECTION 3.1. CONDITIONS OF INITIAL EXTENSION OF CREDIT. The obligation of Bank to extend any
credit contemplated by this Agreement is subject to the fulfillment to Bank’s satisfaction of all
of the following conditions:
(a) Approval of Bank Counsel. All legal matters incidental to the extension of credit by Bank
shall be satisfactory to Bank’s counsel.
(b) Documentation. Bank shall have received, in form and substance satisfactory to Bank,
each of the following, duly executed:
||This Agreement and each promissory note or other instrument or document required
||Certificate of Incumbency.
||Corporate Resolution: Borrowing.
||Such other documents as Bank may require under any other Section of this Agreement.
(c) Financial Condition. There shall have been no material adverse change, as determined by
Bank, in the financial condition or business of Borrower or any guarantor hereunder, nor any
material decline, as determined by Bank, in the market value of any collateral required hereunder
or a substantial or material portion of the assets of Borrower or any such guarantor.
SECTION 3.2. CONDITIONS OF EACH EXTENSION OF CREDIT. The obligation of Bank to make each
extension of credit requested by Borrower hereunder shall be subject to the fulfillment to Bank’s
satisfaction of each of the following conditions:
(a) Compliance. The representations and warranties contained herein and in each of the other
Loan Documents shall be true on and as of the date of the signing of this Agreement and on the date
of each extension of credit by Bank pursuant hereto, with the same effect as though such
representations and warranties had been made on and as of each such date, and on each such date, no
Event of Default as defined herein, and no condition, event or act which with the giving of notice
or the passage of time or both would constitute such an Event of Default, shall have occurred and
be continuing or shall exist.
(b) Documentation. Bank shall have received all additional documents which may be required in
connection with such extension of credit.
(c) Additional Letter of Credit Documentation
. Prior to the issuance of each Letter of Credit,
Bank shall have received a Letter of Credit Agreement
, properly completed and duly executed by
Borrower covenants that so long as Bank remains committed to extend credit to Borrower
pursuant hereto, or any liabilities (whether direct or contingent, liquidated or unliquidated) of
Borrower to Bank under any of the Loan Documents remain outstanding, and until payment in full of
all obligations of Borrower subject hereto, Borrower shall, and shall cause each Subsidiary to,
unless Bank otherwise consents in writing:
SECTION 4.1. PUNCTUAL PAYMENTS. Punctually pay all principal, interest, fees or other
liabilities due under any of the Loan Documents at the times and place and in the manner specified
SECTION 4.2. ACCOUNTING RECORDS. Maintain adequate books and records in accordance with
generally accepted accounting principles consistently applied, and permit any representative of
Bank, at any reasonable time, to inspect, audit and examine such books and records, to make copies
of the same, and to inspect the properties of Borrower or any Subsidiary.
SECTION 4.3. FINANCIAL STATEMENTS. Provide to Bank all of the following, in form and detail
satisfactory to Bank:
(a) not later than 120 days after and as of the end of each fiscal year, a 10K report filed
with the Security Exchange Commission;
later than 60 days after and as of the end of each fiscal quarter, a 10Q report
filed with the Security Exchange Commission;
(c) from time to time such other information as Bank may reasonably request.
SECTION 4.4. COMPLIANCE. Preserve and maintain all licenses, permits, governmental approvals,
rights, privileges and franchises necessary for the conduct of its business; and comply with the
provisions of all documents pursuant to which Borrower or any Subsidiary is organized and/or which
govern Borrower’s or such Subsidiaries’ continued existence and with the requirements of all laws,
rules, regulations and orders of any governmental authority applicable to Borrower, Borrower’s
Subsidiaries and/or their respective businesses.
SECTION 4.5. INSURANCE. Maintain and keep in force, for each business in which Borrower and
each Subsidiary is engaged, insurance of the types and in amounts customarily carried in similar
lines of business, including but not limited to fire, extended coverage, public liability, flood,
property damage and workers’ compensation, with all such insurance carried with companies and in
amounts satisfactory to Bank, and deliver to Bank from time to time at Bank’s request schedules
setting forth all insurance then in effect.
SECTION 4.6. FACILITIES. Keep all properties useful or necessary to Borrower’s and each
Subsidiary’s business in good repair and condition, and from time to time make necessary repairs,
renewals and replacements thereto so that such properties shall be fully and efficiently preserved
SECTION 4.7. TAXES AND OTHER LIABILITIES. Pay and discharge when due any and all indebtedness,
obligations, assessments and taxes, both real or personal, including without limitation federal and
state income taxes and state and local property taxes and assessments, except (a) such as Borrower
or any Subsidiary may in good faith contest or as to which a bona fide dispute may arise, and (b)
for which Borrower or any Subsidiary has made provision, to Bank’s satisfaction, for eventual
payment thereof in the event Borrower or any Subsidiary is obligated to make such payment.
SECTION 4.8. LITIGATION. Promptly give notice in writing to Bank of any litigation pending or
threatened against Borrower or any Subsidiary that could have a Material Adverse Effect.
SECTION 4.9. FINANCIAL CONDITION. Maintain Borrower’s consolidated financial condition as
follows using generally accepted accounting principles consistently applied and used consistently
with prior practices (except to the extent modified by the definitions herein), with compliance
determined commencing with Borrower’s financial statements for the period ending September 30,
(a) Tangible Net Worth not less than ninety percent (90%) of actual Tangible Net Worth as of
fiscal year ending June 30, 2011 (minus, on a cumulative basis, the amount paid by Borrower for
stock repurchases since June 30, 2011, subject to, and as permitted under the terms of Section 5.8
below), plus one hundred percent (100%) of the net proceeds from any equity offerings after June
30, 2011, plus on a cumulative basis, ninety percent (90%) of current
quarterly net income (excluding losses) measured quarterly, with “Tangible Net Worth” defined as
the aggregate of total stockholders’ equity less any intangible assets.
SECTION 4.10. NOTICE TO BANK. Promptly (but in no event more than five (5) days after the
occurrence of each such event or matter) give written notice to Bank in reasonable detail of: (a)
the occurrence of any Event of Default, or any condition, event or act which with the giving of
notice or the passage of time or both would constitute an Event of Default; (b) any change in the
name or the organizational structure of Borrower; (c) the occurrence and nature of any Reportable
Event or Prohibited Transaction, each as defined in ERISA, or any funding deficiency with respect
to any Plan; or (d) any termination or cancellation of any insurance policy which Borrower or any
Subsidiary is required to maintain, or any uninsured or partially uninsured loss through liability
or property damage, or through fire, theft or any other cause affecting Borrower’s or any
Borrower further covenants that so long as Bank remains committed to extend credit to Borrower
pursuant hereto, or any liabilities (whether direct or contingent, liquidated or unliquidated) of
Borrower to Bank under any of the Loan Documents remain outstanding, and until payment in full of
all obligations of Borrower subject hereto, Borrower will not, and will not permit any Subsidiary
to, without Bank’s prior written consent:
SECTION 5.1. USE OF FUNDS. Use any of the proceeds of any credit extended hereunder except
for the purposes stated in Article I hereof.
SECTION 5.2. CAPITAL EXPENDITURES. Make any additional investment in fixed assets in any
fiscal year in excess of an aggregate of $15,000,000.00, provided, however, that in addition to the
foregoing, Borrower may make an additional expenditure in an amount not to exceed $15,000,000.00
in order to purchase real property, provided further that (a) prior to such additional expenditure
Borrower shall deliver to Bank a compliance certificate which demonstrates pro forma compliance
with the Required Liquidity Level, and (b) immediately following such expenditure, the Required
Liquidity Level would be and is maintained.”
SECTION 5.3. OTHER INDEBTEDNESS. Create, incur, assume or permit to exist any indebtedness or
liabilities resulting from borrowings, loans or advances, whether secured or unsecured, matured or
unmatured, liquidated or unliquidated, joint or several, except (a) the liabilities of Borrower or
any Subsidiary to Bank, (b) any other liabilities of Borrower or any Subsidiary existing as of, and
disclosed to Bank prior to, the date hereof, (c) indebtedness which is subordinated to Borrower’s
indebtedness to Bank on terms acceptable to Bank and which may not be prepaid except as set forth
in the next sentence, and (d) purchase money indebtedness in an aggregate amount not to exceed
$5,000,000.00 outstanding at any time. Borrower may prepay existing convertible subordinated debt
in an amount not to exceed $2,305,000.00 as long as (a) prior to such prepayment Borrower shall
deliver to Bank a compliance certificate which demonstrates pro forma compliance with the Required
Liquidity Level, and (b) immediately following such prepayment, the Required Liquidity Level would
be and is maintained.
SECTION 5.4. MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Merge into or consolidate with any
other entity other than as part of a Permitted Acquisition, provided that in no event shall
Borrower merge into or consolidate with another entity unless Borrower is the
surviving entity; make any substantial change in the nature of Borrower’s or any Subsidiary’s
business as conducted as of the date hereof; acquire all or substantially all of the assets
(including intellectual property) of any other entity other than Permitted Acquisitions; nor sell,
lease, transfer or otherwise dispose of all or a substantial or material portion of Borrower’s or
any Subsidiary’s assets except in the ordinary course of such entities’ business.
SECTION 5.5. GUARANTIES. Guarantee or become liable in any way as surety, endorser (other
than as endorser of negotiable instruments for deposit or collection in the ordinary course of
business), accommodation endorser or otherwise for, nor pledge or hypothecate any assets of
Borrower or any Subsidiary as security for, any liabilities or obligations of any other person
or entity, except any of the foregoing in favor of Bank.
SECTION 5.6. LOANS, ADVANCES, INVESTMENTS. Make any loans or advances to or investments in any
person or entity, except (a) any of the foregoing existing as of, and disclosed to Bank prior to,
the date hereof, (B) investments consisting of Permitted Acquisitions, and (c) additional loans and
advances to employees and officers and additional investments in an aggregate amount not to exceed
$5,000,000 outstanding at any time.
SECTION 5.7. PLEDGE OF ASSETS. Mortgage, pledge, grant or permit to exist a security interest
in, or lien upon, or permit the foregoing in respect of any Subsidiary, to all or any portion of
Borrower’s or any Subsidiary’s assets now owned or hereafter acquired, except any of the foregoing
in favor of Bank or which constitute Permitted Liens, nor agree or allow any Subsidiary to agree
with any other creditor to prohibit, encumber or condition the granting of a security interest in
any of Borrower’s or any Subsidiary’s assets now owned or hereafter acquired.
SECTION 5.8. DIVIDENDS, DISTRIBUTIONS. Declare or pay any dividend or distribution either in
cash, stock or any other property on Borrower’s stock now or hereafter outstanding, nor redeem,
retire, repurchase or otherwise acquire any shares of any class of Borrower’s stock now or
hereafter outstanding, except stock repurchases by Borrower from and including June 30, 2011 up to
September 1, 2012 that shall be permitted so long as (a) prior to such repurchase, Borrower shall
deliver to Bank a compliance certificate which demonstrates pro forma compliance with the Required
Liquidity Level, (b) immediately following such repurchase, the Required Liquidity Level would be
and is maintained, and (c) total repurchase as permitted herein does not exceed an aggregate amount
EVENTS OF DEFAULT
SECTION 6.1. The occurrence of any of the following shall constitute an “Event of Default”
under this Agreement:
(a) Borrower or any Subsidiary shall fail to pay when due any principal, interest, fees or
other amounts payable under any of the Loan Documents.
(b) Any financial statement or certificate furnished to Bank in connection with, or any
representation or warranty made by Borrower or any other party under this Agreement or any other
Loan Document shall prove to be incorrect, false or misleading in any material respect when
furnished or made.
(c) Any default in the performance of or compliance with any obligation, agreement or other
provision contained herein or in any other Loan Document (other than those referred to in
subsections (a) and (b) above), and with respect to any such default which by its nature can be
cured, such default shall continue for a period of twenty (20) days from its occurrence.
(d) Any default in the payment or performance of any obligation, or any defined event of
default, under the terms of any contract or instrument (other than any of the Loan Documents)
pursuant to which Borrower, any Subsidiary or any guarantor hereunder has incurred any debt or
other liability to any person or entity, including Bank.
(e) The filing of a notice of judgment lien against Borrower, any Subsidiary or any guarantor;
or the recording of any abstract of judgment against Borrower, any Subsidiary or any guarantor in
any county in which Borrower, any Subsidiary or any guarantor has an interest in real property; or
the service of a notice of levy and/or of a writ of attachment or execution, or other like process,
against the assets of Borrower, any Subsidiary or any guarantor; or the entry of a judgment against
Borrower, any Subsidiary or any guarantor.
(f) Borrower, any Subsidiary or any guarantor shall become insolvent, or shall suffer or
consent to or apply for the appointment of a receiver, trustee, custodian or liquidator of itself
or any of its property, or shall generally fail to pay its debts as they become due, or shall make
a general assignment for the benefit of creditors; Borrower, any Subsidiary or any guarantor shall
file a voluntary petition in bankruptcy, or seeking reorganization, in order to effect a plan or
other arrangement with creditors or any other relief under the Bankruptcy Reform Act, Title 11 of
the United States Code, as amended or recodified from time to time (“Bankruptcy Code”), or under
any state or federal law granting relief to debtors, whether now or hereafter in effect; or any
involuntary petition or proceeding pursuant to the Bankruptcy Code or any other applicable state or
federal law relating to bankruptcy, reorganization or other relief for debtors is filed or
commenced against Borrower, any Subsidiary or any guarantor, or Borrower, any Subsidiary or any
guarantor shall file an answer admitting the jurisdiction of the court and the material allegations
of any involuntary petition; or Borrower, any Subsidiary or any guarantor shall be adjudicated a
bankrupt, or an order for relief shall be entered against Borrower, any Subsidiary or any guarantor
by any court of competent jurisdiction under the Bankruptcy Code or any other applicable state or
federal law relating to bankruptcy, reorganization or other relief for debtors.
(g) There shall exist or occur any event or condition which Bank in good faith believes
impairs, or is substantially likely to impair, the prospect of payment or performance by Borrower
of its obligations under any of the Loan Documents.
(h) The dissolution or liquidation of Borrower, any Subsidiary or any guarantor; or Borrower,
any Subsidiary or any guarantor, or any of its directors, stockholders or members, shall take
action seeking to effect the dissolution or liquidation of Borrower, any Subsidiary or any
(i) Any change in ownership of an aggregate of twenty-five percent (25%) or more of the common
stock of Borrower in any single transaction or set of related transactions.
SECTION 6.2. REMEDIES. Upon the occurrence of any Event of Default: (a) all indebtedness of
Borrower under each of the Loan Documents, any term thereof to the contrary notwithstanding, shall
at Bank’s option and without notice become immediately due and payable without presentment, demand,
protest or notice of dishonor, all of which are hereby expressly waived by Borrower; (b) the
obligation, if any, of Bank to extend any further credit under any of
the Loan Documents shall immediately cease and terminate; and (c) Bank shall have all rights,
powers and remedies available under each of the Loan Documents, or accorded by law, including
without limitation the right to resort to any or all security for any credit subject hereto and to
exercise any or all of the rights of a beneficiary or secured party pursuant to applicable law. All
rights, powers and remedies of Bank may be exercised at any time by Bank and from time to time
after the occurrence of an Event of Default, are cumulative and not exclusive, and shall be in
addition to any other rights, powers or remedies provided by law or equity.
SECTION 7.1. NO WAIVER. No delay, failure or discontinuance of Bank in exercising any right,
power or remedy under any of the Loan Documents shall affect or operate as a waiver of such right,
power or remedy; nor shall any single or partial exercise of any such right, power or remedy
preclude, waive or otherwise affect any other or further exercise thereof or the exercise of any
other right, power or remedy. Any waiver, permit, consent or approval of any kind by Bank of any
breach of or default under any of the Loan Documents must be in writing and shall be effective only
to the extent set forth in such writing.
SECTION 7.2. NOTICES. All notices, requests and demands which any party is required or may
desire to give to any other party under any provision of this Agreement must be in writing
delivered to each party at the following address:
3120 Scott Blvd.
Santa Clara, CA 95054
||WELLS FARGO BANK, NATIONAL ASSOCIATION
Santa Clara Technology Regional Commercial Banking Office
121 S. Market Street, 2nd Floor
San Jose, CA 95113
or to such other address as any party may designate by written notice to all other parties.
Each such notice, request and demand shall be deemed given or made as follows: (a) if sent by hand
delivery, upon delivery; (b) if sent by mail, upon the earlier of the date of receipt or three (3)
days after deposit in the U.S. mail, first class and postage prepaid; and (c) if sent by telecopy,
SECTION 7.3. COSTS, EXPENSES AND ATTORNEYS’ FEES. Borrower shall pay to Bank immediately upon
demand the full amount of all payments, advances, charges, costs and expenses, including reasonable
attorneys’ fees (to include outside counsel fees and all allocated costs of Bank’s in-house
counsel), expended or incurred by Bank in connection with (a) the enforcement of Bank’s rights
and/or the collection of any amounts which become due to Bank under any of the Loan Documents and
(b) the prosecution or defense of any action in any way related to any of the Loan Documents,
including without limitation, any action for declaratory relief, whether incurred at the trial or
appellate level, in an arbitration proceeding or otherwise, and including any of the foregoing
incurred in connection with any bankruptcy proceeding (including without limitation, any adversary
proceeding, contested matter or motion brought by Bank or any other person) relating to Borrower or
any other person or entity.
SECTION 7.4. SUCCESSORS, ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the heirs, executors, administrators, legal representatives, successors and assigns of
the parties; provided however, that Borrower may not assign or transfer its interests or rights
hereunder without Bank’s prior written consent. Bank reserves the right to sell, assign, transfer,
negotiate or grant participations in all or any part of, or any interest in, Bank’s rights and
benefits under each of the Loan Documents. In connection therewith, Bank may disclose all documents
and information which Bank now has or may hereafter acquire relating to any credit subject hereto,
Borrower or its business, any guarantor hereunder or the business of such guarantor, or any
collateral required hereunder.
SECTION 7.5. ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other Loan Documents
constitute the entire agreement between Borrower and Bank with respect to each credit subject
hereto and supersede all prior negotiations, communications, discussions and correspondence
concerning the subject matter hereof. This Agreement may be amended or modified only in writing
signed by each party hereto.
SECTION 7.6. NO THIRD PARTY BENEFICIARIES. This Agreement is made and entered into for the
sole protection and benefit of the parties hereto and their respective permitted successors and
assigns, and no other person or entity shall be a third party beneficiary of, or have any direct
or indirect cause of action or claim in connection with, this Agreement or any other of the Loan
Documents to which it is not a party.
SECTION 7.7. TIME. Time is of the essence of each and every provision of this Agreement
and each other of the Loan Documents.
SECTION 7.8. SEVERABILITY OF PROVISIONS. If any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity without invalidating the remainder of such provision or
any remaining provisions of this Agreement.
SECTION 7.9. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each
of which when executed and delivered shall be deemed to be an original, and all of which when taken
together shall constitute one and the same Agreement.
SECTION 7.10. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
SECTION 7.11. ARBITRATION.
(a) Arbitration. The parties hereto agree, upon demand by any party, to submit to
binding arbitration all claims, disputes and controversies between or among them (and their
respective employees, officers, directors, attorneys, and other agents), whether in tort, contract
or otherwise in any way arising out of or relating to (i) any credit subject hereto, or any of the
Loan Documents, and their negotiation, execution, collateralization, administration, repayment,
modification, extension, substitution, formation, inducement, enforcement, default or termination;
or (ii) requests for additional credit.
(b) Governing Rules. Any arbitration proceeding will (i) proceed in a location in
California selected by the American Arbitration Association (“AAA”); (ii) be governed by the
Federal Arbitration Act (Title 9 of the United States Code), notwithstanding any conflicting choice
of law provision in any of the documents between the parties; and (iii) be conducted by
the AAA, or such other administrator as the parties shall mutually agree upon, in accordance
the AAA’s commercial dispute resolution procedures, unless the claim or counterclaim is at
least $1,000,000.00 exclusive of claimed interest, arbitration fees and costs in which case the
arbitration shall be conducted in accordance with the AAA’s optional procedures for large, complex
commercial disputes (the commercial dispute resolution procedures or the optional procedures for
large, complex commercial disputes to be referred to herein, as applicable, as the “Rules”). If
there is any inconsistency between the terms hereof and the Rules, the terms and procedures set
forth herein shall control. Any party who fails or refuses to submit to arbitration following a
demand by any other party shall bear all costs and expenses incurred by such other party in
compelling arbitration of any dispute. Nothing contained herein shall be deemed to be a waiver by
any party that is a bank of the protections afforded to it under 12 U.S.C. §91 or any similar
applicable state law.
(c) No Waiver of Provisional Remedies, Self-Help and Foreclosure. The arbitration
requirement does not limit the right of any party to (i) foreclose against real or personal
property collateral; (ii) exercise self-help remedies relating to collateral or proceeds of
collateral such as setoff or repossession; or (iii) obtain provisional or ancillary remedies such
as replevin, injunctive relief, attachment or the appointment of a receiver, before during or after
the pendency of any arbitration proceeding. This exclusion does not constitute a waiver of the
right or obligation of any party to submit any dispute to arbitration or reference hereunder,
including those arising from the exercise of the actions detailed in sections (i), (ii) and (iii)
of this paragraph.
(d) Arbitrator Qualifications and Powers. Any arbitration proceeding in which the
amount in controversy is $5,000,000.00 or less will be decided by a single arbitrator selected
according to the Rules, and who shall not render an award of greater than $5,000,000.00. Any
dispute in which the amount in controversy exceeds $5,000,000.00 shall be decided by majority vote
of a panel of three arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations. The arbitrator will be a neutral attorney licensed
in the State of California or a neutral retired judge of the state or federal judiciary of
California, in either case with a minimum of ten years experience in the substantive law applicable
to the subject matter of the dispute to be arbitrated. The arbitrator will determine whether or not
an issue is arbitratable and will give effect to the statutes of limitation in determining any
claim. In any arbitration proceeding the arbitrator will decide (by documents only or with a
hearing at the arbitrator’s discretion) any pre-hearing motions which are similar to motions to
dismiss for failure to state a claim or motions for summary adjudication. The arbitrator shall
resolve all disputes in accordance with the substantive law of California and may grant any remedy
or relief that a court of such state could order or grant within the scope hereof and such
ancillary relief as is necessary to make effective any award. The arbitrator shall also have the
power to award recovery of all costs and fees, to impose sanctions and to take such other action as
the arbitrator deems necessary to the same extent a judge could pursuant to the Federal Rules of
Civil Procedure, the California Rules of Civil Procedure or other applicable law. Judgment upon the
award rendered by the arbitrator may be entered in any court having jurisdiction. The institution
and maintenance of an action for judicial relief or pursuit of a provisional or ancillary remedy
shall not constitute a waiver of the right of any party, including the plaintiff, to submit the
controversy or claim to arbitration if any other party contests such action for judicial relief.
(e) Discovery. In any arbitration proceeding, discovery will be permitted in
accordance with the Rules. All discovery shall be expressly limited to matters directly relevant to
the dispute being arbitrated and must be completed no later than 20 days before the hearing date.
Any requests for an extension of the discovery periods, or any discovery disputes, will be subject
final determination by the arbitrator upon a showing that the request for discovery is
essential for the party’s presentation and that no alternative means for obtaining information is
(f) Class Proceedings and Consolidations. No party hereto shall be entitled to join or
consolidate disputes by or against others in any arbitration, except parties who have executed any
Loan Document, or to include in any arbitration any dispute as a representative or member of a
class, or to act in any arbitration in the interest of the general public or in a private attorney
(g) Payment Of Arbitration Costs And Fees. The arbitrator shall award all costs and
expenses of the arbitration proceeding.
Property Collateral; Judicial Reference. Notwithstanding anything herein to
the contrary, no dispute shall be submitted to arbitration if the dispute concerns indebtedness
secured directly or indirectly, in whole or in part, by any real property unless (i) the holder of
the mortgage, lien or security interest specifically elects in writing to proceed with the
arbitration, or (ii) all parties to the arbitration waive any rights or benefits that might accrue
to them by virtue of the single action rule statute of California, thereby agreeing that all
indebtedness and obligations of the parties, and all mortgages, liens and security interests
securing such indebtedness and obligations, shall remain fully valid and enforceable. If any such
dispute is not submitted to arbitration, the dispute shall be referred to a referee in accordance
with California Code of Civil Procedure Section 638 et seq., and this general reference agreement
is intended to be specifically enforceable in accordance with said Section 638. A referee with the
qualifications required herein for arbitrators shall be selected pursuant to the AAA’s selection
procedures. Judgment upon the decision rendered by a referee shall be entered in the court in which
such proceeding was commenced in accordance with California Code of Civil Procedure Sections 644
(i) Miscellaneous. To the maximum extent practicable, the AAA, the arbitrators and the
parties shall take all action required to conclude any arbitration proceeding within 180 days of
the filing of the dispute with the AAA. No arbitrator or other party to an arbitration proceeding
may disclose the existence, content or results thereof, except for disclosures of information by a
party required in the ordinary course of its business or by applicable law or regulation. If more
than one agreement for arbitration by or between the parties potentially applies to a dispute, the
arbitration provision most directly related to the Loan Documents or the subject matter of the
dispute shall control. This arbitration provision shall survive termination, amendment or
expiration of any of the Loan Documents or any relationship between the parties.
(j) Small Claims Court. Notwithstanding anything herein to the contrary, each party
retains the right to pursue in Small Claims Court any dispute within that court’s jurisdiction.
Further, this arbitration provision shall apply only to disputes in which either party seeks to
recover an amount of money (excluding attorneys’ fees and costs) that exceeds the jurisdictional
limit of the Small Claims Court.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day
and year first written above.
||WELLS FARGO BANK,
||/s/ Russell J. Knittel
||/s/ Karen Byler
||Russell J. Knittel,
||Interim President and CEO
||/s/ Kathleen Bayless
||Chief Financial Officer
||REVOLVING LINE OF CREDIT NOTE
||San Jose, California
||August 17, 2011
RECEIVED, the undersigned SYNAPTICS INC
ORPORATED (“Borrower”) promises to pay to the
order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at its office at Santa Clara Technology
RCBO, 121 S. Market St 2nd Floor, San Jose, CA 95113, or at such other place as the holder hereof
may designate, in lawful money of the United States of America and in immediately available funds,
the principal sum of $50,000,000.00, or so much thereof as may be
advanced and be outstanding, with
interest thereon, to be computed on each advance from the date of its disbursement as set forth
used herein, the following terms shall have the meanings set forth after each, and any
other term defined in this Note shall have the meaning set forth at the place defined:
1.1 “Business Day” means any day except a Saturday, Sunday or any other day on which
commercial banks in California are authorized or required by law to close.
1.2 “Fixed Rate Term” means a period commencing on a Business Day and continuing for 1, 2 or 3
months, as designated by Borrower, during which all or a portion of the outstanding principal
balance of this Note bears interest determined in relation to LIBOR; provided however, that no Fixed
Rate Term may be selected for a principal amount less than $100,000.00; and provided further, that
no Fixed Rate Term shall extend beyond the scheduled maturity date hereof. If any Fixed Rate Term
would end on a day which is not a Business Day, then such Fixed Rate Term shall be extended to the
next succeeding Business Day.
1.3 “LIBOR” means the rate per annum (rounded upward, if necessary, to the nearest whole 1/8 of
1%) determined by dividing Base LIBOR by a percentage equal to 100% less any LIBOR Reserve
(a) “Base LIBOR” means the rate per annum for United States dollar deposits quoted by
Bank as the Inter-Bank Market Offered Rate, with the understanding that such rate is quoted
by Bank for the purpose of calculating effective rates of interest for loans making reference
thereto, on the first day of a Fixed Rate Term for delivery of funds on said date for a
period of time approximately equal to the number of days in such Fixed Rate Term and in an
amount approximately equal to the principal amount to which such Fixed Rate Term applies.
Borrower understands and agrees that Bank may base its quotation of the Inter-Bank Market
Offered Rate upon such offers or other market indicators of the Inter-Bank Market as Bank in
its discretion deems appropriate including, but not limited to, the rate offered for U.S.
dollar deposits on the London Inter-Bank Market.
(b) “LIBOR Reserve Percentage” means the reserve percentage prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for “Eurocurrency Liabilities” (as
defined in Regulation D of the Federal Reserve Board, as amended), adjusted by Bank for
expected changes in such reserve percentage during the applicable Fixed Rate Term.
1.4 “Prime Rate” means at any time the rate of interest most recently announced within Bank at
its principal office as its Prime Rate, with the understanding that the Prime Rate is one of Bank’s
base rates and serves as the basis upon which effective rates of interest are calculated for those
loans making reference thereto, and is evidenced by the recording thereof after its announcement in
such internal publication or publications as Bank may designate.
2.1 Interest. The outstanding principal balance of this Note shall bear interest
(computed on the basis of a 360-day year, actual days elapsed) either (a) at a fluctuating rate per
annum equal to the Prime Rate in effect from time to time, or (b) at a fixed rate per annum
determined by Bank to be 2.50000% above LIBOR in effect on the first day of the applicable Fixed
Rate Term. When interest is determined in relation to the Prime Rate, each change in the rate of
interest hereunder shall become effective on the date each Prime Rate change is announced within
Bank. With respect to each LIBOR selection option selected hereunder, Bank is hereby authorized to
note the date, principal amount, interest rate and Fixed Rate Term applicable thereto and any
payments made thereon on Bank’s books and records (either
manually or by electronic entry) and/or
on any schedule attached to this Note, which notations shall be prima facie evidence of the
accuracy of the information noted.
2.2 Selection of Interest Rate Options. At any time any portion of this Note bears
interest determined in relation to LIBOR, it may be continued by Borrower at the end of the Fixed
Rate Term applicable thereto so that all or a portion thereof bears interest determined in relation
to the Prime Rate or to LIBOR for a new Fixed Rate Term designated by Borrower. At any time any
portion of this Note bears interest determined in relation to the Prime Rate, Borrower may convert
all or a portion thereof so that it bears interest determined in relation to LIBOR for a Fixed Rate
Term designated by Borrower. At such time as Borrower requests an advance hereunder or wishes to
select a LIBOR option for all or a portion of the outstanding principal balance hereof, and at the
end of each Fixed Rate Term, Borrower shall give Bank notice specifying: (a) the interest rate
option selected by Borrower; (b) the principal amount subject thereto; and (c) for each LIBOR
selection, the length of the applicable Fixed Rate Term. Any such notice may be given by telephone
(or such other electronic method as Bank may permit) so long as, with respect to each LIBOR
selection, (i) if requested by Bank, Borrower provides to Bank written confirmation thereof not
later than 3 Business Days after such notice is given, and (ii) such notice is given to Bank prior
to 10:00 a.m. on the first day of the Fixed Rate Term, or at a later time during any Business Day
if Bank, at it’s sole option but without obligation to do so, accepts Borrower’s notice and quotes
a fixed rate to Borrower. If Borrower does not immediately accept a fixed rate when quoted by Bank,
the quoted rate shall expire and any subsequent LIBOR request from Borrower shall be subject to a
redetermination by Bank of the applicable fixed rate. If no specific designation of interest is
made at the time any advance is requested hereunder or at the end of any Fixed Rate Term, Borrower
shall be deemed to have made a Prime Rate interest selection for such advance or the principal
amount to which such Fixed Rate Term applied.
2.3 Taxes and Regulatory Costs. Borrower shall pay to Bank immediately upon demand, in
addition to any other amounts due or to become due hereunder, any and all (a) withholdings,
interest equalization taxes, stamp taxes or other taxes (except income and franchise taxes) imposed
by any domestic or foreign governmental authority and related in any manner to LIBOR, and (b)
future, supplemental, emergency or other changes in the LIBOR Reserve Percentage, assessment rates
imposed by the Federal Deposit Insurance Corporation, or similar requirements or costs imposed by
any domestic or foreign governmental authority or resulting from compliance by Bank with any
request or directive (whether or not having the force of law) from any central bank or other
governmental authority and related in any manner to LIBOR to the extent they are not included in the
calculation of LIBOR. In determining which of the foregoing are attributable to any LIBOR option
available to Borrower hereunder, any reasonable allocation made by Bank among its operations shall
be conclusive and binding upon Borrower.
2.4 Payment of Interest. Interest accrued on this Note shall be payable on the 1st day
of each month, commencing October 1, 2011.
2.5 Default Interest. From and after the maturity date of this Note, or such earlier
date as all principal owing hereunder becomes due and payable by acceleration or otherwise, or at
Bank’s option upon the occurrence, and during the continuance of an Event of Default, the
outstanding principal balance of this Note shall bear interest at an increased rate per annum
(computed on the basis of a 360-day year, actual days elapsed) equal to 4% above the rate of
interest from time to time applicable to this Note.
3. BORROWING AND REPAYMENT:
Borrowing and Repayment
. Borrower may from time to time during the term of this
Note borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject to all of
the limitations, terms and conditions of this Note and of the Credit Agreement
between Borrower and
Bank defined below; provided however, that the total outstanding borrowings under this Note shall
not at any time exceed the principal amount stated above. The unpaid principal balance of this
obligation at any time shall be the total amounts advanced hereunder by the holder hereof less the
amount of principal payments made hereon by or for Borrower, which balance may be endorsed hereon
from time to time by the holder. The outstanding principal balance of this Note shall be due and
payable in full on September 1, 2012.
3.2 Advances. Advances hereunder, to the total amount of the principal sum available
hereunder, may be made by the holder at the oral or written request of (a) Kathleen Bayless or
Kermit Nolan, any one acting alone, who are authorized to request advances and direct the
disposition of any advances until written notice of the revocation of such authority is received by
the holder at the office designated above, or (b) any person, with respect to advances deposited to
the credit of any deposit account of Borrower, which advances, when so deposited, shall be
conclusively presumed to have been made to or for the benefit of Borrower regardless of the fact
that persons other than those authorized to request advances may have authority to draw against
such account. The holder shall have no obligation to determine whether any person requesting an
advance is or has been authorized by Borrower.
3.3 Application of Payments. Each payment made on this Note shall be credited first,
to any interest then due and second, to the outstanding principal balance hereof. All payments
credited to principal shall be applied first, to the outstanding principal balance of this Note
which bears interest determined in relation to the Prime Rate, if any, and second, to the
outstanding principal balance of this Note which bears interest
determined in relation to LIBOR,
with such payments applied to the oldest Fixed Rate Term first.
4.1 Prime Rate. Borrower may prepay principal on any portion of this Note which bears
interest determined in relation to the Prime Rate at any time, in any amount and without penalty.
4.2 LIBOR. Borrower may prepay principal on any portion of this Note which bears
interest determined in relation to LIBOR at any time and in the minimum amount of $100,000.00;
provided however, that if the outstanding principal balance of such portion of this Note is less
than said amount, the minimum prepayment amount shall be the entire outstanding principal balance
thereof. In consideration of Bank providing this prepayment option to Borrower, or if any such
portion of this Note shall become due and payable at any time prior to the last day of the Fixed
Rate Term applicable thereto by acceleration or otherwise, Borrower shall pay to Bank immediately
upon demand a fee which is the sum of the discounted monthly differences for each month from the
month of prepayment through the month in which such Fixed Rate Term matures, calculated as follows
for each such month:
(a) Determine the amount of interest which would have accrued each month on the amount
prepaid at the interest rate applicable to such amount had it remained outstanding until the
last day of the Fixed Rate Term applicable thereto.
(b) Subtract from the amount determined in (a) above the amount of interest
which would have accrued for the same month on the amount prepaid for the remaining term of
such Fixed Rate Term at LIBOR in effect on the date of prepayment for new loans made for such
term and in a principal amount equal to the amount prepaid.
(c) If the result obtained in (b) for any month is greater than zero, discount that
difference by LIBOR used in (b) above.
Borrower acknowledges that prepayment of such amount may result in Bank incurring additional
costs, expenses and/or liabilities, and that it is difficult to ascertain the full extent of such
costs, expenses and/or liabilities. Borrower, therefore, agrees to pay the above-described
prepayment fee and agrees that said amount represents a reasonable estimate of the prepayment
costs, expenses and/or liabilities of Bank. If Borrower fails to pay any prepayment fee when due,
the amount of such prepayment fee shall thereafter bear interest until paid at a rate per annum
2.000% above the Prime Rate in effect from time to time (computed on the basis of a 360-day year,
actual days elapsed).
This Note is made pursuant to and is subject to the terms and conditions of that certain
between Borrower and Bank dated as of August 17, 2011, as amended from time to
time (the “Credit Agreement
”). Any default in the payment or performance of any obligation under
this Note, or any defined event of default under the Credit Agreement
, shall constitute an “Event
of Default” under this Note.
6.1 Remedies. Upon the occurrence of any Event of Default, the holder of this Note, at
the holder’s option, may declare all sums of principal and interest outstanding hereunder to be
immediately due and payable without presentment, demand, notice of nonperformance, notice of
protest, protest or notice of dishonor, all of which are expressly waived by Borrower, and the
obligation, if any, of the holder to extend any further credit hereunder shall immediately cease
and terminate. Borrower shall pay to the holder immediately upon demand the full amount of all
payments, advances, charges, costs and expenses, including reasonable attorneys’ fees (to include
outside counsel fees and all allocated costs of the holder’s in-house counsel), expended or
incurred by the holder in connection with the enforcement of the holder’s rights and/or the
collection of any amounts which become due to the holder under this Note, and the prosecution or
defense of any action in any way related to this Note, including without limitation, any action for
declaratory relief, whether incurred at the trial or appellate level, in an arbitration proceeding
or otherwise, and including any of the foregoing incurred in connection with any bankruptcy
proceeding (including without limitation, any adversary proceeding, contested matter or motion
brought by Bank or any other person) relating to Borrower or any other person or entity.
6.2 Obligations Joint and Several. Should more than one person or entity sign this Note as
a Borrower, the obligations of each such Borrower shall be joint and several.
6.3 Governing Law. This Note shall be governed by and construed in accordance with the
laws of the State of California.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first written above.
||/s/ Russell J. Knittel
||Russell J. Knittel, Interim President and CEO
||/s/ Kathleen Bayless
||Kathleen Bayless, Chief Financial Officer