false0000817720SYNAPTICS Inc00008177202023-07-282023-07-28

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 28, 2023

 

 

SYNAPTICS INCORPORATED

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware			000-49602	77-0118518
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
1109 McKay Drive
San Jose, California				95131
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: 408 904-1100

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $.001 per share		SYNA		NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

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Item 1.01 Entry into a Material Definitive Agreement

On July 28, 2023, Synaptics Incorporated (the “Company”) and Wells Fargo Bank, National Association, as the administrative agent (the “Administrative Agent”), and the revolving credit lenders party thereto entered into a Third Amendment (the “Third Amendment”) to the Company’s Second Amended and Restated Credit Agreement (as amended, the “Credit Agreement”), dated as of March 11, 2021, among the Company, as borrower, the lenders party thereto, and the Administrative Agent.

 

Pursuant to the terms of the Third Amendment, the parties agreed that the consolidated interest coverage ratio financial covenant will only apply to the Company if, as of the last day of any fiscal quarter, the Company’s aggregate cash and cash equivalents are less than $450 million.

 

The foregoing description of the Third Amendment and the Credit Agreement does not purport to be complete and is subject to and qualified in its entirety by reference to the Third Amendment, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.

Item 2.02 Results of Operations and Financial Condition.

On August 3, 2023, the Company issued a press release announcing the Company’s financial results for the fiscal fourth quarter and full fiscal year ended June 24, 2023, and posted supplemental earnings materials to the investor section of the Company’s website at www.synaptics.com. The press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

This information (including Exhibit 99.1) is furnished pursuant to Item 2.02 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any registration document or other document filed by the Company.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On July 31, 2023, Craig Stein voluntarily resigned from his position as Senior Vice President and General Manager, Mobile and IoT Division, of the Company effective as of September 23, 2023.

Item 9.01 Financial Statements and Exhibits.

(a)	Financial Statements of Business Acquired. Not applicable.
(b)	Pro Forma Financial Information. Not applicable.
(c)	Shell Company Transactions. Not applicable.
(d)	Exhibits.

 

Exhibit Number	Exhibit
10.1	Third Amendment, dated as of July 28, 2023, by and among Synaptics Incorporated, Wells Fargo Bank, National Association, as Administrative Agent, and the revolving credit lenders party thereto
99.1	Press release from Synaptics Incorporated, dated August 3, 2023, titled “Synaptics Reports Fourth Quarter Fiscal 2023 Results”
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			SYNAPTICS INCORPORATED
Date:	August 3, 2023	By:	/s/ Dean Butler
			Dean Butler Senior Vice President and Chief Financial Officer

 

 

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Exhibit 10.1

Execution Version

THIRD AMENDMENT
TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT

Third Amendment, dated as of July 28, 2023 (this “Amendment”), by and among Synaptics Incorporated (the “Borrower”), the Revolving Credit Lenders party hereto and Wells Fargo Bank, National Association, as the Administrative Agent.

WHEREAS, reference is hereby made to that certain Second Amended and Restated Credit Agreement, dated as of March 11, 2021, among the Borrower, the lenders from time to time parties thereto (the “Lenders”) and Wells Fargo Bank, National Association, as Administrative Agent for the Lenders (in such capacity, together with any successor in such capacity, the “Administrative Agent”) and as the Swingline Lender and Issuing Lender (as amended by the First Amendment and Lender Joinder Agreement dated as of December 2, 2021, as amended by the Second Amendment dated as of March 16, 2023, and as further amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Existing Credit Agreement” and, as amended by this Amendment, the “Amended Credit Agreement”).

WHEREAS, pursuant to Section 9.15 of the Credit Agreement, except with the written consent of the Required Revolving Credit Lenders, the Borrower is required to comply with each financial covenant set forth therein (each, a “Financial Covenant”; the Financial Covenant set forth in clause (b) thereof, the “ICR Financial Covenant”).

WHEREAS, clause (viii) of the proviso to Section 12.2 of the Existing Credit Agreement permits the Borrower and the Required Revolving Credit Lenders to waive, amend, supplement or otherwise modify Section 9.15 (or any defined term used therein solely affecting the calculation or formulation of the Financial Covenants set forth therein); and

WHEREAS, the Borrower and the Revolving Credit Lenders party hereto, who constitute Required Revolving Credit Lenders, desire to effect certain modifications to the ICR Financial Covenant and related terms pursuant to the terms hereto.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows:

 

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2

 

 

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3

 

 

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[signature pages follow]

 

4

 

 

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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Amendment to be duly executed and delivered as of the date first above written.

SYNAPTICS INCORPORATED,
as the Borrower

By: /s/ Dean Butler
Name: Dean Butler
Title: Senior Vice President and
Chief Financial Officer

 

[Signature Page to Third Amendment]

 

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WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent and Revolving Credit Lender

By: /s/ Spencer Ferry
Name: Spencer Ferry
Title: Director

 

 

[Signature Page to Third Amendment]

 

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Barclays Bank PLC, as a Revolving Credit Lender

By: /s/ Sean Duggan
Name: Sean Duggan
Title: Director

 

[Signature Page to Third Amendment]

 

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BMO Harris Bank N.A., as a Revolving Credit Lender

By: /s/ Joshua Hovermale
Name: Joshua Hovermale
Title: Managing Director

 

[Signature Page to Third Amendment]

 

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MUFG Bank, LTD., as a Revolving Credit Lender

By: /s/ Colin Donnarumma
Name: Colin Donnarumma
Title: Authorized Signer

 

[Signature Page to Third Amendment]

 

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HSBC Bank USA, N.A., as a Revolving Credit Lender

By: /s/ Richard Barnsley
Name: Richard Barnsley
Title: SVP. Corporate Banker

[Signature Page to Third Amendment]

 

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Exhibit A

 

 

Amended Credit Agreement

[Attached.]

 

 

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Exhibit A

 

Composite copy reflecting amendments made pursuant

to the First Amendment and Lender Joinder Agreement dated as of December 2, 2021,

the Second Amendment dated as of March 16, 2023 and

the Third Amendment dated as of July 28, 2023

Published CUSIP Number: 87159JAF1
Revolving Credit CUSIP Number: 87159JAG9
 

$250,000,000

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

dated as of March 11, 2021,

as amended December 2, 2021,

as amended March 16, 2023,

as amended July 28, 2023,

by and among

SYNAPTICS INCORPORATED,
as Borrower,

the Lenders from time to time party hereto,

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent,
Swingline Lender and Issuing Lender

WELLS FARGO SECURITIES, LLC,

as Joint Lead Arranger and Joint Bookrunner

 

MUFG UNION BANK, N.A.

and

BMO CAPITAL MARKETS CORP.
as Joint Lead Arrangers, Joint Bookrunners and Co-Syndication Agents
 

 

 

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Table of Contents

 

 

 

 

 

			Page
ARTICLE I DEFINITIONS			1
SECTION 1.1.		Definitions	1
SECTION 1.2.		Other Definitions and Provisions	49
SECTION 1.3.		Accounting Terms	50
SECTION 1.4.		UCC Terms	50
SECTION 1.5.		Rounding	50
SECTION 1.6.		References to Agreement and Laws	51
SECTION 1.7.		Times of Day	51
SECTION 1.8.		Letter of Credit Amounts	51
SECTION 1.9.		Guarantees	51
SECTION 1.10.		Covenant Compliance Generally	51
SECTION 1.11.		Rates	52
SECTION 1.12.		Divisions	52
SECTION 1.13.		Limited Condition Transactions	52
ARTICLE II REVOLVING CREDIT FACILITY			54
SECTION 2.1.		Revolving Credit Loans	54
SECTION 2.2.		Swingline Loans	54
SECTION 2.3.		Procedure for Advances of Revolving Credit Loans and Swingline Loans	56
SECTION 2.4.		Repayment and Prepayment of Revolving Credit and Swingline Loans.	57
SECTION 2.5.		Permanent Reduction of the Revolving Credit Commitment	58
SECTION 2.6.		Termination of Revolving Credit Facility; Swingline Facility	59
ARTICLE III LETTER OF CREDIT FACILITY			59
SECTION 3.1.		L/C Facility	59
SECTION 3.2.		Procedure for Issuance of Letters of Credit	60
SECTION 3.3.		Commissions and Other Charges	61
SECTION 3.4.		L/C Participations	61
SECTION 3.5.		Reimbursement Obligation of the Borrower	62
SECTION 3.6.		Obligations Absolute	63
SECTION 3.7.		Effect of Letter of Credit Application	63
SECTION 3.8.		Reporting of Letter of Credit Information and L/C Commitment	63
SECTION 3.9.		Letters of Credit Issued for Restricted Subsidiaries	64
SECTION 3.10		Provisions Related to Extended Revolving Credit Commitments	64
ARTICLE IV TERM LOAN FACILITY			64
SECTION 4.1.		Incremental Term Commitments	64
SECTION 4.2.		Procedure for Advance of Term Loan	65

 

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Table of Contents

(continued)

Page

 

SECTION 4.3.		Repayment of Term Loans	65
SECTION 4.4.		Prepayments of Term Loans	66

 

ARTICLE V GENERAL LOAN PROVISIONS			69
SECTION 5.1.		Interest	69
SECTION 5.2.		Notice and Manner of Conversion or Continuation of Loans	70
SECTION 5.3.		Fees	71
SECTION 5.4.		Manner of Payment	72
SECTION 5.5.		Evidence of Indebtedness	72
SECTION 5.6.		Sharing of Payments by Lenders	73
SECTION 5.7.		Administrative Agent’s Clawback	74
SECTION 5.8.		Changed Circumstances	75
SECTION 5.9.		Indemnity	77
SECTION 5.10.		Increased Costs.	78
SECTION 5.11.		Taxes.	79
SECTION 5.12.		Mitigation Obligations; Replacement of Lenders	83
SECTION 5.13.		Incremental Loans	84
SECTION 5.14.		Cash Collateral	89
SECTION 5.15.		Defaulting Lenders	90
SECTION 5.16.		Extensions of Loans and Revolving Credit Commitments.	92
ARTICLE VI CONDITIONS OF CLOSING AND BORROWING			96
SECTION 6.1.		Conditions to Closing and Initial Extensions of Credit	96
SECTION 6.2.		Conditions to All Extensions of Credit (including any Extensions of Credit on the Closing Date)	99
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES			100
SECTION 7.1.		Organization; Power; Qualification	100
SECTION 7.2.		Ownership	100
SECTION 7.3.		Authorization; Enforceability	100
SECTION 7.4.		Compliance of Agreement, Loan Documents and Borrowing With Laws, Etc	101
SECTION 7.5.		Compliance With Law; Governmental Approvals	101
SECTION 7.6.		Tax Returns and Payments.	101
SECTION 7.7.		Intellectual Property Matters	102
SECTION 7.8.		Environmental Matters	102
SECTION 7.9.		Employee Benefit Matters	103
SECTION 7.10.		Margin Stock	103
SECTION 7.11.		Government Regulation	103
SECTION 7.12.		Material Contracts	103
SECTION 7.13.		Financial Statements	104
SECTION 7.14.		No Material Adverse Change	104
SECTION 7.15.		Solvency	104
SECTION 7.16.		Title to Properties	104

 

	-ii-

 

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Table of Contents

(continued)

Page

 

SECTION 7.17.		Litigation	104
SECTION 7.18.		Anti-Terrorism; Anti-Money Laundering; Anti-Corruption	105
SECTION 7.19.		Senior Indebtedness Status	105
SECTION 7.20.		Disclosure	105
ARTICLE VIII AFFIRMATIVE COVENANTS			106
SECTION 8.1.		Financial Statements and Budgets	106
SECTION 8.2.		Certificates; Other Reports	107
SECTION 8.3.		Notice of Litigation and Other Matters	108
SECTION 8.4.		Preservation of Corporate Existence and Related Matters	109
SECTION 8.5.		Maintenance of Property and Licenses	109
SECTION 8.6.		Insurance	109
SECTION 8.7.		Accounting Methods and Financial Records	110
SECTION 8.8.		Payment of Taxes and Other Obligations	110
SECTION 8.9.		Compliance with Laws and Approvals	110
SECTION 8.10.		Environmental Laws	110
SECTION 8.11.		Compliance with ERISA	110
SECTION 8.12.		Visits and Inspections	111
SECTION 8.13.		Additional Subsidiaries; Immaterial Subsidiaries	111
SECTION 8.14.		Designation of Subsidiaries	113
SECTION 8.15.		Use of Proceeds	113
SECTION 8.16.		Further Assurances	114
SECTION 8.17.		Compliance with Anti-Corruption Laws, Anti-Money Laundering Laws and Sanctions; Beneficial Ownership Regulation	114
ARTICLE IX			114
NEGATIVE COVENANTS			114
SECTION 9.1.		Indebtedness	114
SECTION 9.2.		Liens	117
SECTION 9.3.		Investments	120
SECTION 9.4.		Fundamental Changes	122
SECTION 9.5.		Asset Dispositions	123
SECTION 9.6.		Restricted Payments	124
SECTION 9.7.		Transactions With Affiliates	124
SECTION 9.8.		Accounting Changes; Organizational Documents	125
SECTION 9.9.		Payments and Modifications of Subordinated Indebtedness; Prepayments	125
SECTION 9.10.		No Further Negative Pledges; Restrictive Agreements	126
SECTION 9.11.		Nature of Business	127
SECTION 9.12.		Sanctions; Anti-Corruption	127
SECTION 9.13.		[Reserved]	127
SECTION 9.14.		[Reserved]	127

 

	-iii-

 

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Table of Contents

(continued)

Page

 

SECTION 9.15.		Financial Covenants	127
SECTION 9.16.		Disposal of Subsidiary Interests	128
ARTICLE X DEFAULT AND REMEDIES			128
SECTION 10.1.		Events of Default	128
SECTION 10.2.		Remedies	130
SECTION 10.3.		Rights and Remedies Cumulative; Non-Waiver; etc	131
SECTION 10.4.		Crediting of Payments and Proceeds	132
SECTION 10.5.		Administrative Agent May File Proofs of Claim	133
SECTION 10.6.		Credit Bidding	133
SECTION 10.7.		Exclusion of Immaterial Domestic Subsidiaries and Immaterial Foreign Subsidiaries	134
ARTICLE XI THE ADMINISTRATIVE AGENT			134
SECTION 11.1.		Appointment and Authority	134
SECTION 11.2.		Rights as a Lender	135
SECTION 11.3.		Exculpatory Provisions	135
SECTION 11.4.		Reliance by the Administrative Agent	137
SECTION 11.5.		Delegation of Duties	137
SECTION 11.6.		Resignation of Administrative Agent	137
SECTION 11.7.		Non-Reliance on Administrative Agent and Other Lenders	139
SECTION 11.8.		No Other Duties, etc	139
SECTION 11.9.		Collateral and Guaranty Matters	139
SECTION 11.10.		Secured Hedge Agreements and Secured Cash Management Agreements	141
ARTICLE XII MISCELLANEOUS			141
SECTION 12.1.		Notices	141
SECTION 12.2.		Amendments, Waivers and Consents	144
SECTION 12.3.		Expenses; Indemnity.	146
SECTION 12.4.		Right of Setoff	149
SECTION 12.5.		Governing Law; Jurisdiction, etc	150
SECTION 12.6.		Waiver of Jury Trial	150
SECTION 12.7.		Reversal of Payments	150
SECTION 12.8.		Injunctive Relief	151
SECTION 12.9.		Successors and Assigns; Participations.	151
SECTION 12.10.		Treatment of Certain Information; Confidentiality	157
SECTION 12.11.		Performance of Duties	158
SECTION 12.12.		All Powers Coupled with Interest	158
SECTION 12.13.		Survival	159
SECTION 12.14.		Titles and Captions	159
SECTION 12.15.		Severability of Provisions	159
SECTION 12.16		Counterparts; Integration; Effectiveness; Electronic Execution	159
SECTION 12.17.		Term of Agreement	160

 

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SECTION 12.18.		USA PATRIOT Act	161
SECTION 12.19.		Independent Effect of Covenants	161
SECTION 12.20.		No Advisory or Fiduciary Responsibility	161
SECTION 12.21.		Inconsistencies With Other Documents	162
SECTION 12.22.		Consent Regarding Convertible Debt	162
SECTION 12.23.		Acknowledgement and Consent to Bail-In of Affected Financial Institutions	163
SECTION 12.24.		Certain ERISA Matters	163
SECTION 12.25.		Acknowledgement Regarding Any Supported QFCs	164
SECTION 12.26.		Release of Conexant Systems, LLC	166

 

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EXHIBITS
Exhibit A-1	-	Form of Revolving Credit Note
Exhibit A-2	-	Form of Swingline Note
Exhibit B	-	Form of Notice of Borrowing
Exhibit C	-	Form of Notice of Account Designation
Exhibit D	-	Form of Notice of Prepayment
Exhibit E	-	Form of Notice of Conversion/Continuation
Exhibit F	-	Form of Officer’s Compliance Certificate
Exhibit G	-	Form of Assignment and Assumption
Exhibit H-1	-	Form of U.S. Tax Compliance Certificate (Non-Partnership Foreign Lenders)
Exhibit H-2	-	Form of U.S. Tax Compliance Certificate (Non-Partnership Foreign Participants)
Exhibit H-3	-	Form of U.S. Tax Compliance Certificate (Foreign Participant Partnerships)
Exhibit H-4	-	Form of U.S. Tax Compliance Certificate (Foreign Lender Partnerships)
Exhibit I		Form of Affiliate Assignment Agreement
Exhibit J		Form of Solvency Certificate
SCHEDULES
Schedule 1.1	-	Commitments and Commitment Percentages
Schedule 7.1	-	Jurisdictions of Organization of Credit Parties and Restricted Subsidiaries
Schedule 7.2	-	Subsidiaries and Capitalization
Schedule 7.6	-	Tax Matters
Schedule 7.8		Environmental Matters
Schedule 7.12	-	Material Contracts
Schedule 7.16	-	Real Property
Schedule 7.17		Litigation
Schedule 9.1	-	Existing Indebtedness
Schedule 9.2	-	Existing Liens
Schedule 9.3	-	Existing Loans, Advances and Investments
Schedule 9.7	-	Transactions With Affiliates

 

 

 

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SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 11, 2021, by and among SYNAPTICS INCORPORATED, a Delaware corporation, as Borrower, the lenders who are party to this Agreement and the lenders who may become a party to this Agreement pursuant to the terms hereof, as Lenders, and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as Administrative Agent for the Lenders. WELLS FARGO SECURITIES, LLC has been given the titles of joint lead arranger and joint bookrunner in connection with this Agreement; and MUFG UNION BANK, N.A. and BMO CAPITAL MARKETS CORP. have each been given the titles of joint lead arranger, joint bookrunner and co-syndication agent in connection with this Agreement.

STATEMENT OF PURPOSE

The Borrower, the lenders party thereto and the Administrative Agent entered into an Amended and Restated Credit Agreement dated as of September 27, 2017 (as amended prior to the date hereof, the “Existing Credit Agreement”) pursuant to which the Borrower incurred Revolving Credit Commitments.

The Borrower, the Lenders and the Administrative Agent have agreed to amend and restate the Existing Credit Agreement to, inter alia, (a) increase the aggregate amount of Revolving Credit Commitments to $250,000,000 and (b) extend the Revolving Credit Maturity Date.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, such parties hereby agree as follows:

“2029 Notes” means those senior unsecured notes issued by the Company on the Closing Date.

“Acceleration Event” has the meaning assigned thereto in Section 10.2(a).

“Adjusted Term SOFR” means, for purposes of any calculation, the rate per annum equal to (a) Term SOFR for such calculation plus (b) the Term SOFR Adjustment; provided that if Adjusted Term SOFR as so determined shall ever be less than (x) 0% with respect to Loans other than the First Incremental Term Loans, then Adjusted Term SOFR shall be deemed to be 0% and (y) 0.50% with respect to the First Incremental Term Loans, then Adjusted Term SOFR shall be deemed to be 0.50%.

“Administrative Agent” means Wells Fargo, in its capacity as Administrative Agent hereunder, and any successor thereto appointed pursuant to Section 11.6.

“Administrative Agent’s Office” means the office of the Administrative Agent specified in or determined in accordance with the provisions of Section 12.1(c).

“Administrative Questionnaire” means an administrative questionnaire in a form supplied by the Administrative Agent.

 

 

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“Affected Financial Institution” means (a) any EEA Financial Institution, or (b) any UK Financial Institution.

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Affiliate Assignment Agreement” means an assignment and assumption agreement substantially in the form of Exhibit I, with such amendments or modifications as may be approved by Administrative Agent.

“Agreement” means this Second Amended and Restated Credit Agreement, together with all schedules and exhibits hereto, as amended by the First Amendment, and as further amended, restated, supplemented or otherwise modified from time to time.

“Anti-Terrorism Laws” has the meaning assigned thereto in Section 7.18.

“Applicable Law” means all applicable provisions of constitutions, laws, statutes, ordinances, rules, treaties, regulations, permits, licenses, approvals, interpretations and orders of courts or Governmental Authorities and all orders and decrees of all courts and arbitrators.

“Applicable Margin” means

(a) other than with respect to the First Amendment Incremental Term Loans, the corresponding percentages per annum as set forth below based on the Consolidated Total Leverage Ratio:

Pricing Level	Consolidated Total Leverage Ratio	Term SOFR Loans	Base Rate Loans	Commitment Fee
I	Less than 1.50 to 1.00	1.00%	0.25%	0.175%
II	Greater than or equal to 1.50 to 1.00, but less than 2.00 to 1.00	1.25%	0.50%	0.20%
III	Greater than or equal to 2.00 to 1.00, but less than 2.50 to 1.00	1.50%	0.75%	0.20%
IV	Greater than or equal to 2.50 to 1.00	1.75%	1.00%	0.25%

 

(b) with respect to the First Amendment Incremental Term Loans, the corresponding percentages per annum as set forth below based on the Consolidated Total Leverage Ratio:

Pricing Level	Consolidated Total Leverage Ratio	Term SOFR Loans	Base Rate Loans
I	Less than 1.30 to 1.00	2.00%	1.00%

 

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II	Greater than or equal to 1.30 to 1.00	2.25%	1.25%

 

The Applicable Margin shall be determined and adjusted quarterly on the date five Business Days after the day on which the Borrower provides an Officer’s Compliance Certificate pursuant to Section 8.2(a) for the most recently ended Fiscal Quarter of the Borrower (each such date, a “Calculation Date”); provided that (x) other than with respect to the First Amendment Incremental Term Loans (a) the Applicable Margin shall be based on Pricing Level IV until the Calculation Date after the Fiscal Quarter ending March 27, 2021 and, thereafter the Pricing Level shall be determined by reference to the Consolidated Total Leverage Ratio as of the last day of the most recently ended Fiscal Quarter of the Borrower preceding the applicable Calculation Date as reflected in the applicable Officer’s Compliance Certificate, and (b) if the Borrower fails to provide an Officer’s Compliance Certificate when due as required by Section 8.2(a) for the most recently ended Fiscal Quarter of the Borrower preceding the applicable Calculation Date, the Applicable Margin from the date on which such Officer’s Compliance Certificate was required to have been delivered shall be based on Pricing Level IV until such time as such Officer’s Compliance Certificate is delivered, at which time the Pricing Level shall be determined by reference to the Consolidated Total Leverage Ratio as of the last day of the most recently ended Fiscal Quarter of the Borrower preceding such Calculation Date and (y) with respect to the First Amendment Incremental Term Loans (a) the Applicable Margin shall be based on Pricing Level II until the Calculation Date after the Fiscal Quarter ending December 31, 2021 and, thereafter the Pricing Level shall be determined by reference to the Consolidated Total Leverage Ratio as of the last day of the most recently ended Fiscal Quarter of the Borrower preceding the applicable Calculation Date as reflected in the applicable Officer’s Compliance Certificate, and (b) if the Borrower fails to provide an Officer’s Compliance Certificate when due as required by Section 8.2(a) for the most recently ended Fiscal Quarter of the Borrower preceding the applicable Calculation Date, the Applicable Margin from the date on which such Officer’s Compliance Certificate was required to have been delivered shall be based on Pricing Level II until such time as such Officer’s Compliance Certificate is delivered, at which time the Pricing Level shall be determined by reference to the Consolidated Total Leverage Ratio as of the last day of the most recently ended Fiscal Quarter of the Borrower preceding such Calculation Date. The applicable Pricing Level shall be effective from one Calculation Date until the next Calculation Date. Any adjustment in the Applicable Margin shall be applicable to all Extensions of Credit then existing or subsequently made or issued.

Notwithstanding the foregoing, in the event that any financial statement or Officer’s Compliance Certificate delivered pursuant to Section 8.1 or 8.2(a) is shown to be inaccurate (regardless of whether (i) this Agreement is in effect, (ii) any commitments under this Agreement or the other Loan Documents are in effect, or (iii) any Obligation is outstanding when such inaccuracy is discovered or such financial statement or Officer’s Compliance Certificate was delivered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any period (an “Applicable Period”) than the Applicable Margin applied for such Applicable Period, then (A) the Borrower shall promptly deliver to the Administrative Agent a corrected Officer’s Compliance Certificate for such Applicable Period, (B) the Applicable Margin for such Applicable Period shall be determined as if the Consolidated Total Leverage Ratio in the corrected Officer’s Compliance Certificate were applicable for such Applicable Period, and (C) the

 

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Borrower shall, within five Business Days of demand thereof by the Administrative Agent, be obligated to pay to the Administrative Agent the accrued additional interest and fees owing as a result of such increased Applicable Margin for such Applicable Period, which payment shall be promptly applied by the Administrative Agent in accordance with Section 5.4 Nothing in this paragraph shall limit the rights of the Administrative Agent and Lenders with respect to Sections 5.1(b) and 10.2 nor any of their other rights under this Agreement or any other Loan Document. The Borrower’s obligations under this paragraph shall survive the termination of the Commitments and the repayment of all other Obligations hereunder.

The Applicable Margins set forth above shall be increased as, and to the extent, required by Section 5.13.

Notwithstanding the foregoing, (x) the Applicable Margin in respect of any Class of Extended Revolving Credit Loans or any Extended Term Loans shall be the applicable percentages per annum set forth in the relevant Extension Amendment and (y) the Applicable Margin in respect of any Class of Incremental Term Loans shall be the applicable percentages per annum set forth in the relevant Lender Joinder Agreement.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Arranger” means Wells Fargo Securities, LLC, in its capacity as sole lead arranger and sole bookrunner as of the Closing Date.

“Asset Disposition” means the sale, transfer, license, lease or other disposition of any Property (including any disposition of Equity Interests and any sale-leaseback) by any Credit Party or any Restricted Subsidiary thereof (or the granting of any option or other right to do any of the foregoing), and any issuance of Equity Interests by any Restricted Subsidiary of the Borrower to any Person that is not a Credit Party or any Restricted Subsidiary thereof. The term “Asset Disposition” shall not include (a) the sale of inventory in the ordinary course of business, (b) the transfer of assets to the Borrower or any Subsidiary Guarantor pursuant to any other transaction permitted pursuant to Section 9.4, (c) the write-off, discount, sale or other disposition of defaulted or past-due receivables and similar obligations in the ordinary course of business and not undertaken as part of an accounts receivable financing transaction, (d) the disposition of any Hedge Agreement, (e) dispositions of Investments in cash and Cash Equivalents, (f) the transfer by any Credit Party of its assets to any other Credit Party, (g) the transfer by any Non-Credit Party of its assets to any Credit Party (provided that in connection with any new transfer, such Credit Party shall not pay more than an amount equal to the fair market value of such assets as determined in good faith by the applicable Credit Party or Restricted Subsidiary at the time of such transfer) (h) the transfer by any Non-Credit Party of its assets to any other Non-Credit Party, (i) the abandonment of intellectual property determined by the Borrower and its Subsidiaries to no longer be used or useful in the conduct of their business and (j) any sale, transfer or other disposition of any Property having a fair market value of less than $5,000,000.

 

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“Asset Sale Prepayment Percentage” means 100%; provided, that from the First Amendment Effective Date until the date that is six (6) months after the First Amendment Effective Date, the Asset Sale Prepayment Percentage means 0%; provided, further that that any Net Cash Proceeds from any Asset Disposition not required to be applied as a result of the foregoing proviso shall be permitted to be retained by the Borrower for general corporate purposes (other than the making of any Restricted Payments).

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 12.9), and accepted by the Administrative Agent, in substantially the form attached as Exhibit G or any other form approved by the Administrative Agent.

“Attributable Indebtedness” means, on any date of determination, (a) in respect of any Capital Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease, the capitalized amount or principal amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a Capital Lease.

“Auction” has the meaning assigned thereto in Section 12.9(e)(i).

“Auction Manager” means (a) either the Administrative Agent or the Arranger, as determined by Borrower, or any of their respective Affiliates or (b) any other financial institution or advisor agreed by Borrower and the Administrative Agent (whether or not an affiliate of the Administrative Agent) to act as an arranger in connection with any repurchases pursuant to Section 12.9(e).

“Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, (x) if the then-current Benchmark is a term rate, any tenor for such Benchmark (or component thereof) that is or may be used for determining the length of an interest period pursuant to this Agreement or (y) otherwise, any payment period for interest calculated with reference to such Benchmark (or component thereof) that is or may be used for determining any frequency of making payments of interest calculated with reference to such Benchmark, in each case, as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to Section 5.8(c)(iv).

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.

“Bail-In Legislation” means, (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, rule, regulation or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution

 

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of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).

“Base Rate” means, at any time, the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) Adjusted Term SOFR for an Interest Period of one month plus 1%; each change in the Base Rate shall take effect simultaneously with the corresponding change or changes in the Prime Rate, the Federal Funds Rate or Adjusted Term SOFR (provided that clause (c) shall not be applicable during any period in which Adjusted Term SOFR is unavailable or unascertainable). Notwithstanding the foregoing, if the Base Rate shall be less than 1%, the Base Rate shall be deemed to be 1% for purposes of this Agreement.

“Base Rate Loan” means any Loan bearing interest at a rate based upon the Base Rate as provided in Section 5.1(a).

“Benchmark” means, initially, the Term SOFR Reference Rate; provided that if a Benchmark Transition Event has occurred with respect to the Term SOFR Reference Rate or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 5.8(c)(i).

“Benchmark Replacement” means, with respect to any Benchmark Transition Event for any then-current Benchmark, the sum of: (A) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower as the replacement for the then-current Benchmark giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for Dollar-denominated syndicated credit facilities at such time and (B) the related Benchmark Replacement Adjustment; provided that, if such Benchmark Replacement as so determined would be less than the Floor, such Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.

“Benchmark Replacement Adjustment” means, with respect to any replacement of any then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Available Tenor, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for Dollar-denominated syndicated credit facilities.

“Benchmark Replacement Conforming Changes” means, with respect to the use or administration of an initial Benchmark or the use, administration, adoption or implementation of any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate,” the definition of “Business Day,” the definition of “RFR Business Day,” the definition of “Interest Period” or any similar or analogous definition (or the addition of a concept of “interest period”), timing and frequency of determining rates and making

 

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payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of breakage provisions and other technical, administrative or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of any such rate or to permit the use and administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of any such rate exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

“Benchmark Replacement Date” means the earliest to occur of the following events with respect to the then-current Benchmark:

 

For the avoidance of doubt, the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).

“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the then-current Benchmark:

 

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For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).

“Benchmark Transition Start Date” means, with respect to the then-current Benchmark, in the case of a Benchmark Transition Event, the earlier of (a) the applicable Benchmark Replacement Date and (b) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90th day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 90 days after such statement or publication, the date of such statement or publication).

“Benchmark Unavailability Period” means the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 5.8(c) and (y) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 5.8(c).

“Beneficial Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” means 31 CFR § 1010.230.

“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in and subject to Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

“Board of Directors” means (a) with respect to a corporation, the board of directors of such corporation or, except in the context of the definition of “Change in Control”, any duly authorized committee thereof; and (b) with respect to any other entity, the board of directors or similar body of the general partner of such entity or the managers of such entity, any duly authorized committee thereof or any Person, board or committee serving a similar function.

“Borrower” means Synaptics Incorporated, a Delaware corporation.

 

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“Borrower Materials” has the meaning assigned thereto in Section 8.2.

“Business Day” means any day that (a) is not a Saturday, Sunday or other day on which the Federal Reserve Bank of New York is closed and (b) is not a day on which commercial banks in San Francisco, California and New York, New York are open for the conduct of their commercial banking business.

“Calculation Date” has the meaning assigned thereto in the definition of Applicable Margin.

“Capital Expenditures” means, with respect to the Borrower and its Restricted Subsidiaries on a Consolidated basis, for any period, (a) the additions to property, plant and equipment and other capital expenditures that are (or would be) set forth in a consolidated statement of cash flows of such Person for such period prepared in accordance with GAAP and (b) Capital Lease Obligations during such period, but excluding expenditures for the restoration, repair or replacement of any fixed or capital asset that was destroyed or damaged, in whole or in part, to the extent financed by the proceeds of an insurance policy maintained by or on behalf of such Person.

“Capital Leases” means all leases that have been or should be, in accordance with GAAP, recorded as capital leases.

“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

“Capital Stock” of any Person means any and all shares, interests (including general or limited partnership interests, limited liability company or membership interests or limited liability partnership interests), participations or other equivalents of or interests in (however designated) equity of such Person, including any preferred stock; provided that equity‑based compensation awards that by their terms may only be settled in cash will not be deemed to be Capital Stock.

“Cash Collateralize” means, to pledge and deposit with, or deliver to the Administrative Agent, or directly to the applicable Issuing Lender (with notice thereof to the Administrative Agent), for the benefit of one or more of the Issuing Lenders, the Swingline Lender or the Lenders, as collateral for L/C Obligations or obligations of the Lenders to fund participations in respect of L/C Obligations or Swingline Loans, cash or deposit account balances or, if the Administrative Agent and the applicable Issuing Lender and the Swingline Lender shall agree, in their sole discretion, other credit support, in each case pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent, such Issuing Lender and the Swingline Lender, as applicable.

“Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

“Cash Equivalents” means:

 

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(a) United States dollars and such local currencies held by the Borrower or any Restricted Subsidiary from time to time in the ordinary course of business;

(b) securities issued or directly and fully Guaranteed or insured by the United States government or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof), maturing not more than 365 days from the date of acquisition;

(c) deposits, certificates of deposit and time deposits, money market accounts, bankers’ acceptances with maturities not exceeding 365 days and overnight bank deposits, in each case, with any commercial bank organized under the laws of the United States or any state, commonwealth or territory thereof or Canada or any province or territory thereof having capital and surplus in excess of $500,000,000 and a rating at the time of acquisition thereof of P‑1 or better from Moody’s or A‑1 or better from S&P;

(d) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (b) and (c) above entered into with any financial institution meeting the qualifications specified in clause (c) above;

(e) commercial paper having one of the two highest ratings obtainable from Moody’s or S&P and in each case maturing within nine months after the date of acquisition;

(f) securities issued and fully guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, rated at least “A” by Moody’s or S&P and having maturities of not more than 365 days from the date of acquisition;

(g) money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (f) of this definition; and

(h) solely with respect to any Foreign Subsidiary, substantially similar investments to those outlined in clauses of (a) through (g) above, of comparable credit quality (taking into account the jurisdiction where such Foreign Subsidiary conducts business), denominated in the currency of any jurisdiction in which such Person conducts business.

“Cash Management Agreement” means any agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card (including non-card electronic payables), purchasing cards, electronic funds transfer and other cash management arrangements.

“Cash Management Bank” means any Person that, (a) at the time it enters into a Cash Management Agreement with a Credit Party, is a Lender, an Affiliate of a Lender, the Administrative Agent or an Affiliate of the Administrative Agent, or (b) at the time it (or its Affiliate) becomes a Lender (including on the Closing Date), is a party to a Cash Management

 

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Agreement with a Credit Party, in each case in its capacity as a party to such Cash Management Agreement.

“Change in Control” means an event or series of events by which any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of such person or its Subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a “person” or “group” shall be deemed to have “beneficial ownership” of all Equity Interests that such “person” or “group” has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of more than 35% of the Equity Interests of the Borrower entitled to vote in the election of members of the Board of Directors of the Borrower.

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any Applicable Law, (b) any change in any Applicable Law or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law, but if not having the force of law, with respect to any Person, being of a type with which such Person customarily complies) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“Class” means, when used in reference to any Loan, whether such Loan is a Revolving Credit Loan, Swingline Loan, Incremental Term Loan (of the same tranche), Extended Term Loans (of the same Extension Series), Extended Revolving Credit Loans (of the same Extension Series) and, when used in reference to any Commitment, whether such Commitment is a Revolving Credit Commitment, an Extended Revolving Credit Commitment (of the same Extension Series) or an Incremental Term Loan Commitment (of the same tranche).

“Closing Date” means the date of this Agreement.

“Closing Date Convertible Debt” means the Convertible Debt of the Borrower outstanding on the Closing Date.

“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral” means the collateral security for the Secured Obligations pledged or granted pursuant to the Security Documents. For the avoidance of doubt, the Collateral shall not include the Excluded Assets (as defined in the Security Documents).

 

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“Collateral Agreement” means the collateral agreement dated as of September 30, 2014 herewith executed by the Credit Parties in favor of the Administrative Agent, for the benefit of the Secured Parties.

“Commitment Fee” has the meaning assigned thereto in Section 5.3(a).

“Commitment Percentage” means, as to any Lender, such Lender’s Revolving Credit Commitment Percentage or Term Loan Percentage, as applicable.

“Commitments” means, with respect to each Lender (to the extent applicable), such Lender’s Revolving Credit Commitment, Extended Revolving Credit Commitment or Incremental Term Loan Commitment.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.).

“Competitor” means any operating company directly engaged in substantially similar business operations as Borrower or any of its Subsidiaries.

“Consolidated” means, when used with reference to financial statements or financial statement items of any Person, such statements or items on a consolidated basis in accordance with applicable principles of consolidation under GAAP.

“Consolidated EBITDA” means, for any period, the sum of the following determined on a Consolidated basis, without duplication, for the Borrower and its Restricted Subsidiaries in accordance with GAAP: (a) Consolidated Net Income for such period plus (b) the sum of the following, without duplication, to the extent deducted in determining Consolidated Net Income for such period: (i) income and franchise taxes accrued during such period, (ii) Consolidated Interest Expense for such period, (iii) amortization and depreciation for such period, (iv) charges to operating expenses during such period in connection with earn-outs and other contingent consideration obligations with respect to acquisitions consummated prior to the Closing Date and Permitted Acquisitions, (v) other non‑cash charges and any other non-cash items decreasing Consolidated Net Income for such period (except to the extent that such non-cash charges are reserved for cash charges to be taken in the future), including the non-cash portion of net periodic defined benefit, defined contribution and compensation costs, bad debt expense net of cash recoveries, deferred rent, amortization of debt financing costs and asset retirement obligations, (vi) extraordinary, unusual and non-recurring charges or losses during such period, (vii) Transaction Costs during such period and out-of-pocket cash costs in respect of Permitted Acquisitions, (viii) Indebtedness-related fees during such period, including commitment fees, agency fees, the write-off of deferred financing fees and the payment of any prepayment or redemption premium in respect of any Indebtedness, (ix) restructuring charges or reserves and severance, retention and relocation expenses during such period in an aggregate amount not to exceed, when taken together with amounts added back pursuant to clauses (x) and (xi) below, 30% of Consolidated EBITDA for such period, (x) integration costs during such period for Permitted Acquisitions (including any bonus, retention or success payments) and other Investments in an aggregate amount not to exceed, when taken together with amounts added back pursuant to clause (ix) above and clause (xi) below, 30% of Consolidated EBITDA for such period, (xi) pro forma “run rate” cost savings, operating

 

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expense reductions and synergies (“Cost Savings”) related to Permitted Acquisitions, Asset Dispositions and other specified restructurings or cost savings initiatives that are reasonably identifiable, factually supportable, projected by the Borrower in good faith to result from actions that have been taken or with respect to which substantial steps have been taken or initiated and, in each case, are disclosed in reasonable itemization and detail to the Administrative Agent; provided that (1) such Cost Savings are realized or reasonably expected to be realized within 12 months after such Permitted Acquisition, Asset Disposition or other specified restructuring, cost savings initiative or other initiative, (2) such prospective Cost Saving are calculated net of the amount of actual benefits realized during such period from such actions and (3) the aggregate amount of Cost Savings added back under this clause (xi), when taken together with amounts added back pursuant to clauses (ix) and (x) above, shall not exceed 30% of Consolidated EBITDA for such period, (xii) losses from the early extinguishment of Indebtedness during such period or from any Permitted A/R Financing and (xiii) equity or equity-based non-cash expenses associated with the stock plans and similar arrangements of the Borrower and its Restricted Subsidiaries, less (c) (i) interest income during such period, (ii) any extraordinary gains during such period, (iii) non-cash gains or non-cash items increasing Consolidated Net Income during such period and (iv) gains or income from the early extinguishment of Indebtedness during such period or from any Permitted A/R Financing. For purposes of this Agreement, Consolidated EBITDA shall be adjusted on a Pro Forma Basis in connection with Specified Transactions as set forth in the definition of Pro Forma Basis.

“Consolidated Interest Coverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated EBITDA for the period of four consecutive Fiscal Quarters ending on or immediately prior to such date to (b) Consolidated Interest Expense for the period of four consecutive Fiscal Quarters ending on or immediately prior to such date.

“Consolidated Interest Coverage Ratio Testing Condition” means, as of the last day of any Fiscal Quarter, that the aggregate amount of cash and Cash Equivalents held by the Borrower and its Restricted Subsidiaries on such date shall have been less than $450,000,000.

“Consolidated Interest Expense” means, for any period, the sum of the following determined on a Consolidated basis, without duplication, for the Borrower and its Restricted Subsidiaries in accordance with GAAP, interest expense (including interest expense attributable to Capital Lease Obligations and all net payment obligations pursuant to Hedge Agreements) for such period.

“Consolidated Net Income” means, for any period, the net income (or loss) of the Borrower and its Restricted Subsidiaries for such period, determined on a Consolidated basis, without duplication, in accordance with GAAP; provided that in calculating Consolidated Net Income of the Borrower and its Restricted Subsidiaries for any period, there shall be excluded:

(a) the net income (or loss) of any Person (other than a Non-Credit Party that shall be subject to clause (c) below), in which the Borrower or any of its Restricted Subsidiaries has a joint interest with a third party, except to the extent such net income is actually paid in cash to the Borrower or any of its Restricted Subsidiaries by dividend or other distribution during such period;

 

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(b) the net income (or loss) of any Person accrued prior to the date it becomes a Restricted Subsidiary of the Borrower or any of its Restricted Subsidiaries or is merged into or consolidated with the Borrower or any of its Restricted Subsidiaries or that Person’s assets are acquired by the Borrower or any of its Restricted Subsidiaries, except to the extent included pursuant to the foregoing clause (a); and

(c) the net income (if positive), of any Non-Credit Party to the extent that the declaration or payment of dividends or similar distributions by such Non-Credit Party to a Credit Party of such net income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Non-Credit Party.

“Consolidated Total Indebtedness” means, as of any date of determination, the aggregate principal amount of Indebtedness of the Borrower and its Restricted Subsidiaries outstanding on such date, determined on a Consolidated basis without duplication, consisting only of (i) Indebtedness for borrowed money, (ii) obligations under drawn Letters of Credit that have not been reimbursed after one Business Day, (iii) obligations in respect of Capital Leases and purchase money indebtedness, (iv) debt obligations evidenced by promissory notes or similar instruments (including, for the avoidance of doubt, any seller notes or similar deferred purchase price arrangements that are or are required to be treated in the same manner as seller notes in accordance with GAAP, in each case, entered into in connection with a Permitted Acquisition or similar permitted Investment (other than items described in clause (v)), (v) earnouts and other contingent acquisition consideration, in each case of this clause (v) solely to the extent past due, (vi) Indebtedness of the type referred to in clauses (i) through (v) hereof of any other Person Guaranteed by the Borrower or any Restricted Subsidiary and (vii) if positive, the aggregate unpaid amount of accounts receivable transferred in connection with all Permitted A/R Financings outstanding at any time in excess of $100,000,000.

“Consolidated Total Leverage Ratio” means, as of any date of determination, the ratio of (a) (x) Consolidated Total Indebtedness on such date minus (y) the amount of Qualified Cash on such date to (b) Consolidated EBITDA for the period of four consecutive Fiscal Quarters ending on or immediately prior to such date. Notwithstanding the foregoing, when calculating the Consolidated Total Leverage Ratio for determining the Applicable Margin at any time, clause (a)(y) above (i.e. the subtraction of Qualified Cash) shall be disregarded.

“Consolidated Total Secured Indebtedness” means, as of any date of determination with respect to the Borrower and its Restricted Subsidiaries on a Consolidated basis without duplication, Consolidated Total Indebtedness on such date which is secured by a Lien on any Property of the Borrower or its Restricted Subsidiaries.

“Consolidated Total Secured Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Total Secured Indebtedness on such date to (b) Consolidated EBITDA for the period of four consecutive Fiscal Quarters ending on or immediately prior to such date.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting

 

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power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

“Control Agreement” means a control agreement among the Borrower or a Subsidiary Guarantor, a depository bank, a securities intermediary or a commodity intermediary, as the case may be, and the Administrative Agent, in form and substance reasonably acceptable to the Administrative Agent.

“Convertible Debt” has the meaning assigned thereto in Section 12.22, and shall include Closing Date Convertible Debt.

“Convertible Debt and Related Instruments” has the meaning assigned thereto in Section 12.22.

“Convertible Related Derivatives” has the meaning assigned thereto in Section 12.22.

“Credit Facility” means, collectively, the Revolving Credit Facility, the Term Loan Facility, the Swingline Facility and the L/C Facility.

“Credit Parties” means, collectively, the Borrower and the Subsidiary Guarantors.

“Debt Issuance” means the issuance of any Indebtedness for borrowed money by any Credit Party or any of its Restricted Subsidiaries.

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.

“Default” means any event specified in Section 10.1 that after notice or passage of time, or both, would constitute an Event of Default.

“Defaulting Lender” means, subject to Section 5.15(b), any Lender that (a) has failed to (i) fund all or any portion of the Revolving Credit Loans, any Term Loan, participations in L/C Obligations or participations in Swingline Loans required to be funded by it hereunder within two Business Days of the date such Loans or participations were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, any Issuing Lender, the Swingline Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swingline Loans) within two Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent, any Issuing Lender or the Swingline Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition

 

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precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the FDIC or any other state or federal regulatory authority acting in such a capacity, or (iii) become the subject of a Bail-in Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 5.15(b)) upon delivery of written notice of such determination to the Borrower, each Issuing Lender, the Swingline Lender and each Lender.

“Disqualified Equity Interests” means any Equity Interests that, by their terms (or by the terms of any security or other Equity Interest into which they are convertible or for which they are exchangeable) or upon the happening of any event or condition, (a) mature or are mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments), (b) are redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests) (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments), in whole or in part, (c) provide for the scheduled payment of dividends in cash or (d) are or become convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is 91 days after the Latest Maturity Date; provided that if such Equity Interests are issued pursuant to a plan, agreement or similar arrangement for the benefit of the Borrower or its Restricted Subsidiaries or by any such plan, agreement or similar arrangement to officers, directors, employees or consultants, such Equity Interests shall not constitute Disqualified Equity Interests solely because they may be required to be repurchased by the Borrower or its Restricted Subsidiaries in order to satisfy applicable statutory or regulatory obligations or upon a change in control or termination of employment or service.

 

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“Disqualified Institutions” means (a) certain banks, financial institutions and other Persons that have been specified to the Administrative Agent by the Borrower in writing at any time prior to the Closing Date, (b) any Competitor, or direct or indirect holding company thereof or a controlled affiliate of such Competitor, in each case, which has been specified to the Administrative Agent by Borrower in writing at any time prior to the Closing Date, which list in this clause (b) may be updated from time to time by written notice to the Administrative Agent; provided that no addition to the list shall apply retroactively to disqualify any parties that have previously acquired an assignment or participation interest, or (c) any Person that is an Affiliate of the Persons described in clauses (a) and (b) that is identified in writing to the Administrative Agent or reasonably identifiable as an Affiliate of such Persons on the basis of such Person’s name; provided that (x) no bona-fide debt fund shall be a Disqualified Institution unless specifically included in clause (a) above and (y) no Disqualified Institutions may become Lenders or otherwise participate in any Facility without the Borrower’s consent.

“Dollars” or “$” means, unless otherwise qualified, dollars in lawful currency of the United States.

“Domestic Subsidiary” means any Restricted Subsidiary organized under the laws of any political subdivision of the United States that is not a Subsidiary of a Foreign Subsidiary.

“ECF Percentage” means 50%; provided, that (a) the ECF Percentage shall be reduced to 25% if the Consolidated Total Leverage Ratio as of the last day of the relevant Fiscal Year is less than or equal to 1.25 to 1.00 but greater than 1.00 to 1.00 and (b) the ECF Percentage shall be reduced to 0% if the Consolidated Total Leverage Ratio as of the last day of the relevant Fiscal Year is less than or equal to 1.00 to 1.00, in each cases of (a) and (b), determined on a Pro Forma Basis (giving pro forma effect to the subject Excess Cash Flow prepayment).

“ECF Threshold” has the meaning assigned thereto in Section 4.4(b)(iv).

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“Electronic Record” has the meaning assigned to that term in, and shall be interpreted in accordance with, 15 U.S.C. 7006.

 

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“Electronic Signature” has the meaning assigned to that term in, and shall be interpreted in accordance with, 15 U.S.C. 7006.

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 12.9(b)(iii), (v) and (vi) (subject to such consents, if any, as may be required under Section 12.9(b)(iii)).

“Employee Benefit Plan” means (a) any employee benefit plan within the meaning of Section 3(3) of ERISA that is maintained for employees of any Credit Party or any ERISA Affiliate or (b) any Pension Plan or Multiemployer Plan that has at any time within the preceding seven years been maintained, funded or administered for the employees of any Credit Party or any current or former ERISA Affiliate.

“Environmental Claims” means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, accusations, allegations, orders, notices of noncompliance, violation, liability or potential liability, investigations (other than internal reports prepared by any Person in the ordinary course of business and not in response to any third party action or request of any kind) or proceedings relating in any way to any actual or alleged violation of or liability under any Environmental Law or relating to any permit issued, any approval given or any notice provided or other Governmental Approval, under any such Environmental Law, including any and all claims, orders, directives, notices or actions by Governmental Authorities for enforcement, cleanup, removal, response, remedial, investigation, monitoring, mitigation, management or other actions or damages, natural resource damages, contribution, indemnification, cost recovery, compensation or injunctive relief relating to Hazardous Materials or arising from alleged injury or threat of injury to human health and safety (with respect to Hazardous Materials) or the environment.

“Environmental Laws” means any and all current and future international, federal, foreign, state, provincial, regional and local laws, common law, statutes, ordinances, codes, rules, standards and regulations, permits, licenses, approvals, binding agency guidance, binding interpretations and orders of courts or Governmental Authorities, relating to (i) the protection of human health and safety (with respect to Hazardous Materials) or the environment, (ii) liability for or costs of other actual or threatened danger to human health and safety (with respect to Hazardous Materials) or the environment, (iii) requirements pertaining to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation, handling, reporting, licensing, permitting, investigation or remediation of Hazardous Materials, or (iv)imposing conditions or requirements in connection with permits or other authorization for lawful activity with respect to the protection of human health and safety (with respect to Hazardous Materials) or the environment, including but not limited to the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, 42 USC Sections 9601 to 9675, as amended.

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt securities that are convertible into, or exchangeable for, Capital Stock).

 

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“ERISA” means the Employee Retirement Income Security Act of 1974, and the rules and regulations thereunder.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Borrower or any Subsidiary, is treated as a single employer under Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 or 430 of the Code or Section 302 or 303 of ERISA).

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Pension Plan (other than an event for which the 30-day notice period is waived); (b) the failure to satisfy the “minimum funding standard” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived, with respect to any Pension Plan; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Pension Plan, the failure to make by its due date a required installment of a material amount under Section 430(j) of the IRC with respect to any Pension Plan or the failure to make any required contribution of a material amount to a Multiemployer Plan; (d) the incurrence by the Borrower or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Pension Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Pension Plan or Pension Plans or to appoint a trustee to administer any Pension Plan; (f) the incurrence by the Borrower or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal of the Borrower or any ERISA Affiliate from any Pension Plan or Multiemployer Plan; (g) the determination that a Pension Plan is considered an at-risk plan or a plan in endangered or critical status within the meaning of Sections 430, 431 and 432 of the IRC or Sections 303, 304 and 305 of ERISA or (h) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition upon the Borrower or any ERISA Affiliate of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor thereto), as in effect from time to time.

“Event of Default” means any of the events specified in Section 10.1; provided that any requirement for passage of time, giving of notice, or any other condition, has been satisfied.

“Excess Cash Flow” means, for any Fiscal Year of the Borrower, the excess, if any, of:

(a) the sum, without duplication, of (i) Consolidated Net Income for such Fiscal Year, (ii) the amount of all non-cash charges (including depreciation and amortization) deducted in arriving at such Consolidated Net Income, (iii) decreases in Working Capital for such Fiscal Year and (iv) the aggregate net amount of non-cash loss on the disposition of property by the Borrower and its Restricted Subsidiaries during such Fiscal Year (other than sales of inventory in the ordinary course of business), to the extent deducted in arriving at such Consolidated Net Income; over

 

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(b) the sum, without duplication, of (i) the amount of all non-cash income included in arriving at such Consolidated Net Income, (ii) the aggregate amount of Restricted Payments made by the Borrower in cash during such Fiscal Year or, at the Borrower’s option, after such Fiscal Year and prior to the Excess Cash Flow Application Date, pursuant to Section 9.6 (other than pursuant to Section 9.6(a), (d) or (e)) (excluding the principal amount of Indebtedness (other than revolving Indebtedness) incurred in connection with such Restricted Payments and any Restricted Payments made with proceeds of any issuance of Equity Interests of the Borrower), (iii) the aggregate amount of cash consideration paid by the Borrower and the Restricted Subsidiaries during such Fiscal Year or, at the Borrower’s option, after such Fiscal Year and prior to the Excess Cash Flow Application Date, to make Investments (including Permitted Acquisitions) permitted by Section 9.3 (excluding (A) any such Permitted Acquisitions or other Investments financed with the proceeds or any issuance of Equity Interests of the Borrower or the issuance of any Indebtedness (other than revolving Indebtedness), (B) Investments in cash or Cash Equivalents and (C) Investments in any Subsidiary) and Capital Expenditures, (iv) without duplication of amounts deducted from Excess Cash Flow in prior periods, the aggregate cash consideration (X) required to be paid pursuant to binding contracts, planned, or budgeted to be paid, in each case by the Borrower or any Restricted Subsidiary, relating to Permitted Acquisitions and other Investments permitted by Section 9.3 (other than Investments in (A) cash or Cash Equivalents and (B) any Subsidiary) (the “Planned Investment Amounts”) and (Y) required to be paid pursuant to binding contracts, planned, or budgeted to be paid in connection with planned Capital Expenditures of the Borrower and its Restricted Subsidiaries as represented by the Borrower to the Administrative Agent in good faith in writing (the “Planned Expenditures”), in each case following the end of the applicable Fiscal Year for which Excess Cash Flow is being calculated (except to the extent financed with the proceeds of Indebtedness (other than revolving Indebtedness) or the proceeds of any issuance of Equity Interests of the Borrower); provided that to the extent the aggregate amount of cash actually utilized to finance such Investments, Permitted Acquisitions or Capital Expenditures during such period is less than the Planned Investment Amounts and the Planned Expenditures, the amount of such shortfall shall be added to the calculation of Excess Cash Flow for the immediately succeeding Fiscal Year, (v) increases in Working Capital for such Fiscal Year and (vi) the aggregate amount of all principal payments of Indebtedness of the Borrower and its Subsidiaries (including (A) scheduled principal payments with respect to Indebtedness pursuant to Section 4.3 of this Agreement and voluntary prepayments of First Amendment Incremental Term Loans pursuant to Section 4.4 of this Agreement (other than prepayments of First Amendment Incremental Term Loans deducted pursuant to Section 4.4(b)(iv)(y)(i) of this Agreement) and (B) the principal component of payments in respect of Capital Leases.

“Excess Cash Flow Application Date” has the meaning assigned thereto in Section 4.4(b)(iv).

“Exchange Act” means the Securities Exchange Act of 1934.

“Excluded Subsidiary” means (a) any Domestic Subsidiary that is not a Wholly-Owned Subsidiary, (b) any Immaterial Domestic Subsidiary and any Receivables SPV, (c) any Foreign Subsidiary Holdco, (d) any Domestic Subsidiary that is owned directly or indirectly by a “controlled foreign corporation” within the meaning of Section 957 of the Code, (e) any Foreign

 

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Subsidiary, (f) any Unrestricted Subsidiary and (g) any other Domestic Subsidiary with respect to which, in the reasonable judgment of the Administrative Agent and the Borrower, the burden or cost of making such Subsidiary a Subsidiary Guarantor outweighs the benefits to the Lenders (including as a result of adverse tax consequences) of the attendant Guarantee.

“Excluded Swap Obligation” means, with respect to any Credit Party, any Swap Obligation if, and to the extent that, all or a portion of the liability of such Credit Party for or the guarantee of such Credit Party of, or the grant by such Credit Party of a security interest to secure, such Swap Obligation (or any liability or guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Credit Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the liability for or the guarantee of such Credit Party or the grant of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guarantee or security interest is or becomes illegal for the reasons identified in the immediately preceding sentence of this definition.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, United States federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 5.12(b)) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 5.11, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 5.11(g) and (d) any United States federal withholding Taxes imposed under FATCA.

“Existing Class” means any Existing Term Loan Class and any Existing Revolving Credit Class.

“Existing Credit Agreement” has the meaning assigned thereto in the Statement of Purpose.

“Existing Revolving Credit Class” has the meaning assigned thereto in Section 5.16(b).

“Existing Revolving Credit Commitment” has the meaning assigned thereto in Section 5.16(b).

 

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“Existing Revolving Credit Loans” has the meaning assigned thereto in Section 5.16(b).

“Existing Term Loan Class” has the meaning assigned thereto in Section 5.16(a).

“Extended Revolving Credit Commitments” has the meaning assigned thereto in Section 5.16(b).

“Extended Revolving Credit Loans” has the meaning assigned thereto in Section 5.16(b).

“Extended Term Loans” has the meaning assigned thereto in Section 5.16(a).

“Extending Lender” has the meaning assigned thereto in Section 5.16(c).

“Extension Amendment” has the meaning assigned thereto in Section 5.16(d).

“Extension Date” has the meaning assigned thereto in Section 5.16(e).

“Extension Election” has the meaning assigned thereto in Section 5.16(c).

“Extension Series” means all Extended Term Loans or Extended Revolving Credit Commitments that are established pursuant to the same Extension Amendment (or any subsequent Extension Amendment to the extent such Extension Amendment expressly provides that the Extended Term Loans or Extended Revolving Credit Commitments, as applicable, provided for therein are intended to be a part of any previously established Extension Series) and that provide for the same interest margins and amortization schedule.

“Extensions of Credit” means, as to any Lender at any time, (a) an amount equal to the sum of (i) the aggregate principal amount of all Revolving Credit Loans made by such Lender then outstanding, (ii) such Lender’s Revolving Credit Commitment Percentage of the L/C Obligations then outstanding, (iii) such Lender’s Revolving Credit Commitment Percentage of the Swingline Loans then outstanding and (iv) the aggregate principal amount of the Term Loans made by such Lender then outstanding, or (b) the making of any Loan or participation in any Letter of Credit by such Lender, as the context requires.

“Fair Market Value” means, with respect to any asset or property, the sale value that would be obtained in an arm’s‑length free‑market Transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy, as determined in good faith by the principal executive officer, the principal financial officer or principal accounting officer of the Borrower.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code, any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to such intergovernmental agreement.

 

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“FDIC” means the Federal Deposit Insurance Corporation.

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System on such day (or, if such day is not a Business Day, for the immediately preceding Business Day), as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that if such rate is not so published for any day which is a Business Day, the average of the quotation for such day on such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by the Administrative Agent.

“Federal Reserve Bank of New York’s Website” means the website of the Federal Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.

“Fee Letter” means, collectively, (a) the fee letter dated October 27, 2020 between the Borrower and the Arranger and (b) any other fee letter, engagement letter, mandate letter or commitment letter executed by the Borrower, the Administrative Agent and/or the Arranger in connection with this Agreement.

“First Amendment” means the First Amendment and Lender Joinder Agreement, dated as of December 2, 2021, among the Borrower, the other Credit Parties party thereto, the Administrative Agent, the Revolving Credit Lenders party thereto and the First Amendment Incremental Term Lenders.

“First Amendment Effective Date” means December 2, 2021.

“First Amendment Incremental Term Lenders” has the meaning assigned thereto in the First Amendment.

“First Amendment Incremental Term Loan” has the meaning assigned thereto in the First Amendment.

“First Amendment Incremental Term Loan Commitment” has the meaning assigned thereto in the First Amendment.

“First Amendment Incremental Term Loan Facility” means the Term Loan Facility established pursuant to the First Amendment.

“First Amendment Incremental Term Loan Maturity Date” means December 2, 2028.

“First Amendment Transactions” means has the meaning assigned to the term “Transactions” in the First Amendment.

“Fiscal Quarter” means each fiscal quarter of the Borrower and its Restricted Subsidiaries ending on the last Saturday of each March, June, September and December.

“Fiscal Year” means the fiscal year of the Borrower and its Restricted Subsidiaries ending on the last Saturday in June.

 

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“Floor” means the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to Adjusted Term SOFR.

“Foreign Lender” means a Lender that is not a U.S. Person.

“Foreign Pledge Agreement” means a pledge agreement, charge agreement or similar agreement in form and substance reasonably acceptable to the Administrative Agent executed by the Borrower or a Subsidiary Guarantor with respect to a pledge (or equivalent thereof) of Equity Interests of a Foreign Subsidiary required by the terms of this Agreement

“Foreign Subsidiary” means any Restricted Subsidiary that is not a Domestic Subsidiary.

“Foreign Subsidiary Holdco” means any Domestic Subsidiary (a) that is disregarded as separate from its owner for United States federal income tax purposes and that owns Equity Interests of one or more Foreign Subsidiaries and/or other Foreign Subsidiary Holdcos or (b) all or substantially all of the assets of which consist of Equity Interests of one or more Foreign Subsidiaries and/or other Foreign Subsidiary Holdcos.

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to any Issuing Lender, such Defaulting Lender’s Revolving Credit Commitment Percentage of the outstanding L/C Obligations with respect to Letters of Credit issued by such Issuing Lender, other than such L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof and (b) with respect to the Swingline Lender, such Defaulting Lender’s Revolving Credit Commitment Percentage of outstanding Swingline Loans other than Swingline Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.

“Fund” means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.

“GAAP” means generally accepted accounting principles in the United States, as set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements (including the Accounting Standards Codification) of the Financial Accounting Standards Board, or such other principles as may be approved by a significant segment of the accounting profession of the United States that are applicable to the circumstances as of the date of determination, consistently applied.

“Governmental Approvals” means all authorizations, consents, approvals, permits, licenses and exemptions of, and all registrations and filings with or issued by, any Governmental Authorities.

“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive,

 

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legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness, (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or (e) for the purpose of assuming in any other manner the obligee in respect of such Indebtedness of the payment or performance thereof or to protect such obligee against loss in respect thereof (whether in whole or in part); provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee shall be deemed to be the lesser of (i) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made or (ii) the maximum amount for which the guarantor may be liable pursuant to the terms of the instrument evidencing such Guarantee, unless the amount of the primary obligation or the maximum amount for which such guarantor may be liable are not stated or determinable, in which case the amount of such Guarantee shall be the guarantor’s maximum reasonably anticipated liability in respect thereof as reasonably determined by the Borrower in good faith.

“Hazardous Materials” means any substances or materials (a) which are or become defined, listed or otherwise classified as hazardous wastes, hazardous substances, extremely hazardous wastes, or words of similar meaning or regulatory effect, pollutants, contaminants or toxic substances under any Environmental Law, (b) which are toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human health and safety or the environment and are or become regulated by any Governmental Authority, (c) the presence or potential presence of which require or may require investigation or remediation under any Environmental Law, (d) the discharge or emission or release of which requires a permit, approval, notice or license under any Environmental Law or other Governmental Approval, or (e) which contain, without limitation, asbestos, lead, polychlorinated biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived substances or waste, crude oil, nuclear fuel, natural gas or synthetic gas.

“Hedge Agreement” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing

 

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(including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement, all as amended, restated, supplemented or otherwise modified from time to time (including the foreign currency transaction(s) entered into by the Borrower on or about the Closing Date).

“Hedge Bank” means any Person that, (a) at the time it enters into a Hedge Agreement with a Credit Party permitted under Article IX, is a Lender, an Affiliate of a Lender, the Administrative Agent or an Affiliate of the Administrative Agent or (b) at the time it (or its Affiliate) becomes a Lender (including on the Closing Date), is a party to a Hedge Agreement with a Credit Party, in each case in its capacity as a party to such Hedge Agreement.

“Hedge Termination Value” means, in respect of any one or more Hedge Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Hedge Agreements, (a) for any date on or after the date such Hedge Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Hedge Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Hedge Agreements (which may include a Lender or any Affiliate of a Lender).

“Immaterial Domestic Subsidiary” means, as of any date of determination, any Domestic Subsidiary that has (a) less than $10,000,000 in tangible assets and owned intellectual property (valued at the greater of book value or Fair Market Value) and (b) less than $10,000,000 in revenues (excluding intercompany revenues) for the period of four consecutive Fiscal Quarters most recently ended for which financial statements have been delivered pursuant to Section 8.1(a) or 8.1(b); provided that any such Subsidiary that is initially an Immaterial Domestic Subsidiary shall cease to be an Immaterial Domestic Subsidiary from and after the date such Subsidiary has (x) tangible assets and owned intellectual property (valued at the greater of book value or Fair Market Value) equal to or greater than $10,000,000 or (y) revenues (excluding intercompany revenues) equal to or greater than $10,000,000 for the period of four consecutive Fiscal Quarters most recently ended for which financial statements have been delivered pursuant to Section 8.1(a) or 8.1(b). As of the Closing Date, Conexant Systems, LLC is an Immaterial Domestic Subsidiary.

“Immaterial Foreign Subsidiary” means, as of any date of determination, any Foreign Subsidiary that, together with its Subsidiaries on a Consolidated basis, has (a) less than $10,000,000 in tangible assets and owned intellectual property (valued at the greater of book value or Fair Market Value) and (b) less than $10,000,000 in revenues (excluding intercompany revenues) for the period of four consecutive Fiscal Quarters most recently ended for which financial statements financial statements have been delivered pursuant to Section 8.1(a) or 8.1(b); provided that any such Subsidiary that is initially an Immaterial Foreign Subsidiary shall cease to be an Immaterial Foreign Subsidiary from and after the date such Subsidiary, together with its Subsidiaries on a Consolidated basis, has (x) tangible assets and owned intellectual property (valued at the greater of book value or Fair Market Value) equal to or greater than $10,000,000 or

 

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(y) revenues (excluding intercompany revenues) equal to or greater than $10,000,000 for the period of four consecutive Fiscal Quarters most recently ended for which financial statements have been delivered pursuant to Section 8.1(a) or 8.1(b).

“Increased Amount Date” has the meaning assigned thereto in Section 5.13(a).

“Incremental Facility Amount” has the meaning assigned thereto in Section 5.13(a).

“Incremental Lender” has the meaning assigned thereto in Section 5.13(a).

“Incremental Loan Commitments” has the meaning assigned thereto in Section 5.13(a)(ii).

“Incremental Loans” has the meaning assigned thereto in Section 5.13(a)(ii).

“Incremental Revolving Credit Commitment” has the meaning assigned thereto in Section 5.13(a)(ii).

“Incremental Revolving Credit Increase” has the meaning assigned thereto in Section 5.13(a)(ii).

“Incremental Term Loan” has the meaning assigned thereto in Section 5.13(a)(i).

“Incremental Term Loan Commitment” has the meaning assigned thereto in Section 5.13(a)(i).

“Incremental Term Loan Maturity Date” means the date on which an Incremental Term Loan matures (including, for the avoidance of doubt, the First Amendment Incremental Term Loan Maturity Date).

“Incur” means, with respect to any Indebtedness, to incur, create, issue, assume, Guarantee or otherwise become directly or indirectly liable for or with respect to, or become responsible for, the payment of, contingently or otherwise, such Indebtedness (and “Incurrence” and “Incurred” will have meanings correlative to the foregoing); provided that any Indebtedness of a Person existing at the time such Person becomes a Restricted Subsidiary will be deemed to be Incurred by such Person at the time it becomes a Restricted Subsidiary.

“Indebtedness” means, with respect to any Person at any date and without duplication, the sum of the following:

(a) all liabilities, obligations and indebtedness for borrowed money including obligations evidenced by bonds, debentures, notes or other similar instruments of any such Person;

(b) all obligations to pay the deferred purchase price of property or services of any such Person (including all obligations under non-competition, purchase price adjustments, earn-out or similar agreements entered in connection with a Permitted Acquisition), except trade payables arising in the ordinary course of business and repayable in accordance with customary trade practices, or that are currently being contested in good faith by appropriate proceedings and

 

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with respect to which reserves in conformity with GAAP have been provided for on the books of such Person;

(c) the Attributable Indebtedness of such Person with respect to such Person’s Capital Lease Obligations and Synthetic Leases (regardless of whether accounted for as indebtedness under GAAP);

(d) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person to the extent of the value of such property (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business);

(e) all Indebtedness of any other Person secured by a Lien on any asset owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements except trade payables arising in the ordinary course of business), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse (but if not assumed, limited to the lesser of such Indebtedness or the value of the assets subject to such Lien);

(f) all obligations, contingent or otherwise, of any such Person relative to the face amount of letters of credit, whether or not drawn, including any Reimbursement Obligation, and banker’s acceptances issued for the account of any such Person;

(g) all obligations of any such Person in respect of Disqualified Equity Interests;

(h) all net obligations of such Person under any Hedge Agreements (excluding any Convertible Related Derivatives), unless constituting interest expense (other than with respect to rate swaps); and

(i) all Guarantees of any such Person with respect to any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is non-recourse to such Person. The amount of any net obligation under any Hedge Agreement on any date shall be deemed to be the Hedge Termination Value thereof as of such date.

Notwithstanding the foregoing, Indebtedness shall not include any indebtedness that has been defeased in accordance with GAAP or defeased pursuant to the deposit of cash, U.S. government obligations and Cash Equivalents (sufficient to satisfy all obligations relating thereto at maturity or redemption, as applicable) in a trust or account created or pledged for the sole benefit of the holders of such indebtedness, in accordance with the terms of the instruments governing such indebtedness.

The amount of any Indebtedness outstanding as of any date will be the outstanding balance at such date of all unconditional obligations as described above and, with respect to contingent

 

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obligations, the maximum liability upon the occurrence of the contingency giving rise to the obligation. The amount of any Indebtedness described in clause (a) above will be:

(1) the accreted value thereof, in the case of any Indebtedness issued with original issue discount; and

(2) the principal amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness.

For purposes of determining any particular amount of Indebtedness, Guarantees, Liens or obligations with respect to letters of credit supporting Indebtedness otherwise included in the determination of such particular amount shall not be included.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Credit Party under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.

“Initial Issuing Lender” means Wells Fargo.

“Insurance and Condemnation Event” means the receipt by any Credit Party or any of its Restricted Subsidiaries of any cash insurance proceeds or condemnation award in excess of $5,000,000 payable by reason of theft, loss, physical destruction or damage, taking or similar event with respect to any of their respective Property.

“Interest Period” means, as to each Term SOFR Loan, the period commencing on the date such Term SOFR Loan is disbursed or converted to or continued as a Term SOFR Loan and ending on the date one, three or six months, in each case as selected by the Borrower in its Notice of Borrowing or Notice of Conversion/Continuation and subject to availability; provided that:

(a) the Interest Period shall commence on the date of advance of or conversion to any Term SOFR Loan and, in the case of immediately successive Interest Periods, each successive Interest Period shall commence on the date on which the immediately preceding Interest Period expires;

(b) if any Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day; provided that if any Interest Period with respect to a Term SOFR Loan would otherwise expire on a day that is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the immediately preceding Business Day;

(c) any Interest Period with respect to a Term SOFR Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the relevant calendar month at the end of such Interest Period;

(d) no Interest Period shall extend beyond the applicable Maturity Date, and Interest Periods shall be selected by the Borrower so as to permit the Borrower to make the quarterly

 

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principal installment payments pursuant to Section 4.3 without payment of any amounts pursuant to Section 5.9; and

(e) there shall be no more than ten Interest Periods in effect at any time.

“IRS” means the United States Internal Revenue Service.

“ISDA Definitions” means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time by the International Swaps and Derivatives Association, Inc. or such successor thereto.

“ISP98” means the International Standby Practices (1998 Revision, effective January 1, 1999), International Chamber of Commerce Publication No. 590.

“Issuing Lender” means (a) the Initial Issuing Lender and (b) any other Revolving Credit Lender to the extent it has agreed in its sole discretion to act as an “Issuing Lender” hereunder and has been approved in writing by the Borrower and the Administrative Agent (such approval by the Administrative Agent not to be unreasonably delayed or withheld) as an “Issuing Lender” hereunder, in each case in its capacity as issuer of any Letter of Credit.

“Latest Maturity Date” means the latest maturity date of any Class of Loan or Commitment hereunder.

“L/C Commitment” means, as to any Issuing Lender, the obligation of such Issuing Lender to issue Letters of Credit for the account of the Borrower or one or more of its Restricted Subsidiaries from time to time in an aggregate amount equal to (a) for the Initial Issuing Lender, $20,000,000 and (b) for any other Issuing Lender becoming an Issuing Lender after the Closing Date, such amount as separately agreed to in a written agreement between the Borrower and such Issuing Lender (which such agreement shall be promptly delivered to the Administrative Agent upon execution), in each case of clauses (a) and (b) above, any such amount may be changed after the Closing Date in a written agreement between the Borrower and such Issuing Lender (which such agreement shall be promptly delivered to the Administrative Agent upon execution).

“L/C Facility” means the letter of credit facility established pursuant to Article III.

“L/C Obligations” means at any time, an amount equal to the sum of (a) the aggregate undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit that have not then been reimbursed pursuant to Section 3.5.

“L/C Participants” means, with respect to any Letter of Credit, the collective reference to all the Revolving Credit Lenders other than the applicable Issuing Lender.

“L/C Sublimit” means the lesser of (a) $20,000,000 and (b) the Revolving Credit Commitment. The L/C Sublimit is a part of, and not in addition to, the Revolving Credit Commitment.

 

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“LCT Test Date” has the meaning assigned thereto in Section 1.13.

“Lender” means each Person executing this Agreement as a Lender on the Closing Date and any other Person that shall have become a party to this Agreement as a Lender pursuant to an Assignment and Assumption or pursuant to Section 5.13, other than any Person that ceases to be a party hereto as a Lender pursuant to an Assignment and Assumption. Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender.

“Lender Joinder Agreement” means a joinder agreement in form and substance reasonably satisfactory to the Administrative Agent delivered in connection with Section 5.13.

“Lending Office” means, with respect to any Lender, the office of such Lender maintaining such Lender’s Extensions of Credit.

“Letter of Credit Application” means an application, in the form specified by the applicable Issuing Lender from time to time, requesting such Issuing Lender to issue a Letter of Credit.

“Letters of Credit” means the collective reference to letters of credit issued pursuant to Section 3.1. Notwithstanding anything to the contrary contained herein, a letter of credit issued by any Issuing Lender (other than Wells Fargo at any time it is also acting as Administrative Agent) shall not be a “Letter of Credit” for purposes of the Loan Documents until such time as the Administrative Agent has been notified in writing of the issuance thereof by the applicable Issuing Lender.

“Letter of Credit Expiration Date” means the date that is 30 days prior to the Revolving Credit Maturity Date (or if such day is not a Business Day, the next preceding Business Day).

“Lien” means, with respect to any asset, any mortgage, leasehold mortgage, lien, pledge, charge, security interest, hypothecation or encumbrance of any kind in respect of such asset.

“Limited Condition Transaction” means any Specified Transaction that (a) is not prohibited hereunder, (b) is not conditioned on the availability of, or on obtaining, third-party financing, and (c) is completed within 120 days of the execution of the Limited Condition Transaction Agreement for such Specified Transaction.

“Limited Condition Transaction Agreement” has the meaning assigned thereto in Section 1.13.

“Limited Condition Transaction Provisions” has the meaning assigned thereto in Section 1.13.

“Loan Documents” means, collectively, this Agreement, each Note, the Letter of Credit Applications, the Security Documents, the Reaffirmation Agreement, the Reaffirmation of Foreign Pledge Agreement, the Subsidiary Guaranty Agreement and the Fee Letter, all as may be amended, restated, supplemented or otherwise modified from time to time, but for the avoidance of doubt excluding any Secured Hedge Agreement and any Secured Cash Management Agreement.

 

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“Loans” means the collective reference to the Revolving Credit Loans, the Term Loans and the Swingline Loans (including any Incremental Loans, any Extended Term Loans, any Extended Revolving Credit Loans and, for the avoidance of doubt, the First Amendment Incremental Term Loans) and “Loan” means any of such Loans.

“Material Acquisition” means a Permitted Acquisition the aggregate consideration for which equals or exceeds $150,000,000.

“Material Adverse Effect” means, with respect to the Borrower and its Restricted Subsidiaries, a material adverse effect on (a) the business, assets or financial condition of such Persons, taken as a whole, (b) the ability of such Persons, taken as a whole, to perform their payment obligations under the Loan Documents or (c) the rights and remedies, taken as a whole, of the Administrative Agent (on behalf of the Secured Parties) under the Loan Documents (other than as a result of any action or inaction on the part of any Secured Party).

“Material Contract” means any “material contracts” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) with respect to the Borrower or any of its Subsidiaries.

“Material First Tier Foreign Subsidiary” means any Foreign Subsidiary that is (a) directly owned by a Credit Party and (b) not an Immaterial Foreign Subsidiary. On the Closing Date, Synaptics GmbH and DisplayLink (UK) Limited are the only Material First Tier Foreign Subsidiaries.

“Maturity Date” means an Incremental Term Loan Maturity Date (including, for the avoidance of doubt, the First Amendment Incremental Term Loan Maturity Date) or the Revolving Credit Maturity Date, as applicable.

“Minimum Collateral Amount” means, at any time, (a) with respect to Cash Collateral consisting of cash or deposit account balances, an amount equal to 103% of the sum of (i) the Fronting Exposure of each applicable Issuing Lender with respect to Letters of Credit issued and outstanding at such time and (ii) the Fronting Exposure of the Swingline Lender with respect to all Swingline Loans outstanding at such time and (b) otherwise, an amount reasonably determined by the Administrative Agent and each of the applicable Issuing Lenders that is entitled to Cash Collateral hereunder.

“MNPI” means material non-public information within the meaning of the United States federal securities laws.

“Moody’s” means Moody’s Investors Service, Inc.

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which any Credit Party or any ERISA Affiliate is making, or is accruing an obligation to make, or has accrued an obligation to make contributions within the preceding seven years.

“Net Cash Proceeds” means, as applicable, (a) with respect to any Asset Disposition or Insurance and Condemnation Event, the gross proceeds received by any Credit Party or any of its Restricted Subsidiaries therefrom (including any cash, Cash Equivalents, deferred payment

 

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pursuant to, or by monetization of, a note receivable or otherwise, as and when received) less the sum of (i) in the case of an Asset Disposition, all income taxes and other taxes assessed by, or reasonably estimated to be payable to, a Governmental Authority as a result of such transaction (provided that if such estimated taxes exceed the amount of actual taxes required to be paid in cash in respect of such Asset Disposition, the amount of such excess shall constitute Net Cash Proceeds), (ii) all reasonable and customary out-of-pocket fees and expenses incurred in connection with such transaction or event and (iii) the principal amount of, premium, if any, and interest on any Indebtedness secured by a Lien on the asset (or a portion thereof) disposed of, which Indebtedness is required to be repaid in connection with such transaction or event, and (b) with respect to any Debt Issuance or equity issuance, the gross cash proceeds received by any Credit Party or any of its Restricted Subsidiaries therefrom less all reasonable and customary out-of-pocket legal, underwriting and other fees and expenses incurred in connection therewith.

“Non-Consenting Lender” means any Lender that does not approve any consent, waiver, amendment, modification or termination that (a) requires the approval of all Lenders or all affected Lenders in accordance with the terms of Section 12.2 and (b) has been approved by the Required Lenders.

“Non-Credit Party” means any Restricted Subsidiary of the Borrower that is not a Subsidiary Guarantor.

“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.

“Non-Pledged Subsidiaries” means, at any time, (i) all Immaterial Domestic Subsidiaries who are not Subsidiary Guarantors and (ii) all Immaterial Foreign Subsidiaries that are directly owned by a Credit Party who are not Pledged Foreign Subsidiaries.

“Notes” means the collective reference to the Revolving Credit Notes, the Swingline Note and the Term Loan Notes.

“Notice of Account Designation” has the meaning assigned thereto in Section 2.3(b).

“Notice of Borrowing” has the meaning assigned thereto in Section 2.3(a).

“Notice of Conversion/Continuation” has the meaning assigned thereto in Section 5.2.

“Notice of Prepayment” has the meaning assigned thereto in Section 2.4(c).

“Obligations” means, in each case, whether now in existence or hereafter arising: (a) the principal of and interest on (including interest accruing after the filing of any bankruptcy or similar petition) the Loans, (b) the L/C Obligations and (c) all other fees and commissions (including attorneys’ fees), charges, indebtedness, loans, liabilities, financial accommodations, obligations, covenants and duties owing by the Credit Parties to the Lenders, the Issuing Lenders or the Administrative Agent, in each case under any Loan Document, with respect to any Loan or Letter of Credit of every kind, nature and description, direct or indirect, absolute or contingent, due or to become due, contractual or tortious, liquidated or unliquidated, and whether or not evidenced by

 

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any note and including interest and fees that accrue after the commencement by or against any Credit Party of any proceeding under any Debtor Relief Laws, naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control.

“Officer’s Compliance Certificate” means a certificate of the chief executive officer, controller, chief financial officer or the treasurer of the Borrower substantially in the form attached as Exhibit F.

“Operating Lease” means, as to any Person, any lease of Property (whether real, personal or mixed) by such Person as lessee that is not a Capital Lease.

“Original Indebtedness” has the meaning specified in the definition of “Permitted Refinancing Indebtedness”.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” means all present or future stamp, court, documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 5.12).

“Participant” has the meaning assigned thereto in Section 12.9(d).

“Participant Register” has the meaning assigned thereto in Section 12.9(d).

“PATRIOT Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).

“PBGC” means the Pension Benefit Guaranty Corporation or any successor agency.

“Periodic Term SOFR Determination Date” has the meaning assigned thereto in the definition of “Term SOFR”.

“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or Section 412 of the Code and which (a) is maintained, funded or administered for the employees of any Credit Party or any ERISA Affiliate

 

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or (b) has at any time within the preceding seven years been maintained, funded or administered for the employees of any Credit Party or any current or former ERISA Affiliates.

“Permitted Acquisition” means any acquisition by the Borrower or any Restricted Subsidiary in the form of the acquisition of all or substantially all of the assets, business or a line of business, or at least a majority of the outstanding Equity Interests which have the ordinary voting power for the election of directors of the Board of Directors (whether through purchase, merger or otherwise), of any other Person if each such acquisition meets all of the following requirements (and subject to the Limited Condition Transaction Provisions in the case of a Limited Condition Transaction):

(a) no less than five Business Days (or such shorter period as shall be permitted by the Administrative Agent in its sole discretion) prior to the proposed closing date of such acquisition, the Borrower shall have delivered written notice of such acquisition to the Administrative Agent and the Lenders, which notice shall include the proposed closing date of such acquisition (but such acquisition is not required to close on such date);

(b) the Borrower shall have certified in writing on or before the closing date of such acquisition that such acquisition has been approved by the Board of Directors of the Person to be acquired;

(c) the Person or business to be acquired shall be in a line of business permitted pursuant to Section 9.11 or, in the case of an acquisition of assets, assets useful in the business of the Borrower and its Subsidiaries;

(d) the Borrower shall have delivered to the Administrative Agent all documents required to be delivered pursuant to, and in accordance with, Section 8.13;

(e) for any Material Acquisition, no later than three Business Days (or such shorter period as shall be permitted by the Administrative Agent in its sole discretion) prior to the proposed closing date of such acquisition, the Borrower shall have delivered to the Administrative Agent an Officer’s Compliance Certificate for the most recent Fiscal Quarter end preceding such acquisition for which financial statements have been delivered pursuant to Section 8.1(a) or 8.1(b) demonstrating, in form and substance reasonably satisfactory to the Administrative Agent, that the Borrower is in compliance on a Pro Forma Basis (as of the date of the acquisition and after giving effect thereto and any Indebtedness Incurred in connection therewith) with each covenant contained in Section 9.15;

(f) no Specified Event of Default shall have occurred and be continuing both before and after giving effect to such acquisition and any Indebtedness Incurred in connection therewith; and

(g) for any Material Acquisition, the Borrower shall have (i) delivered to the Administrative Agent a certificate of a Responsible Officer certifying that all of the requirements set forth above have been satisfied or will be satisfied on or prior to the consummation of such purchase or other acquisition and (ii) provided such other documents and other information as may

 

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be reasonably requested by the Administrative Agent in connection with such purchase or acquisition.

“Permitted Acquisition Documents” means with respect to any acquisition proposed by the Borrower, any Subsidiary Guarantor or any Pledged Foreign Subsidiary, final copies or substantially final drafts if not executed at the required time of delivery of the purchase agreement, sale agreement, merger agreement or other agreement evidencing such acquisition, including all legal opinions and each other document executed, delivered, contemplated by or prepared in connection therewith and any amendment, modification or supplement to any of the foregoing.

“Permitted A/R Financing” means a financing of a Credit Party’s accounts receivable (including by way of advance, sale or other means, and either directly or through a special purpose vehicle of a Credit Party) with an unaffiliated third party on an arm’s length basis that is consummated no fewer than 85 days since the date of any prior Permitted A/R Financing, provided that (x) the aggregate unpaid amount of accounts receivable transferred in connection with all Permitted A/R Financings outstanding at any time shall not exceed the greater of (1) $100,000,000 and (2) 50% of the amount of all accounts receivable of the Credit Parties and their Restricted Subsidiaries at such time, (y) any Liens incurred in a Permitted A/R Financing shall not encumber the Property of any Credit Party (other than customary precautionary fall-back Liens covering only the accounts receivable and Related Assets subject to such Permitted A/R Financing) and (z) no such financing shall be consummated during the continuance of a Default or Event of Default.

“Permitted Liens” means the Liens permitted pursuant to Section 9.2.

“Permitted Refinancing Indebtedness” means any Indebtedness that is the result of a modification, refinancing, refunding, replacement, renewal or extension of Indebtedness permitted under Section 9.1(c), (d), (e), (i), (o), (p), (q), (r), (s) or (t) (the “Original Indebtedness”); provided that (a) the principal amount (or accreted value, if applicable) thereof does not exceed the outstanding principal amount (or accreted value, if applicable) of the Original Indebtedness so modified, refinanced, refunded, replaced, renewed or extended except by an amount equal to unpaid accrued interest, penalties and premiums (including tender premiums) plus other amounts and fees (including commitment, underwriting, arrangement and similar fees, and other reasonable and customary fees), commissions and expenses in each case incurred, in connection with such modification, refinancing, refunding, replacement, renewal or extension (including upfront fees, original issue discount or initial yield payments), (b) the Indebtedness resulting from such modification, refinancing, refunding, replacement, renewal or extension has a final maturity date equal to or later than the final maturity date of, and has a weighted average life to maturity equal to or greater than the weighted average life to maturity of, the Original Indebtedness being modified, refinanced, refunded, replaced, renewed or extended, (c) the representations, covenants and events of default of the Indebtedness resulting from such modification, refinancing, refunding, replacement, renewal or extension are not, taken as a whole, materially less favorable to the Credit Parties or the Lenders than the terms and conditions of the Indebtedness being modified, refinanced, refunded, replaced, renewed or extended (except for covenants or other provisions applicable exclusively to periods commencing after the Latest Maturity Date at the time such Indebtedness is incurred), as reasonably determined in good faith by the Borrower, (d) such Indebtedness is not guaranteed by any entity that is not a Loan Party (unless such Person shall

 

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substantially concurrently become a Loan Party hereunder pursuant to Section 8.3) and (e)(i) such Indebtedness may only be secured by the assets that secured the Original Indebtedness (and any proceeds and products thereof, accessions, replacements or additions thereto and/or improvements thereon) (it being understood that secured Original Indebtedness may be refinanced with unsecured Indebtedness), (ii) such Indebtedness is incurred by the obligor or obligors in respect of the applicable Original Indebtedness, and (iii) if such Original Indebtedness was contractually subordinated to the Obligations in right of payment (or the Liens securing such Original Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Secured Obligations), such Indebtedness is contractually subordinated to the Obligations in right of payment (or the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Secured Obligations), in each case on terms at least as favorable to the Lenders as those contained in the documentation governing the Original Indebtedness and subject to a subordination or intercreditor agreement in form and substance reasonably acceptable to the Administrative Agent.

“Permitted Stock Repurchase” means any repurchase of the Qualified Equity Interests of the Borrower permitted under Section 9.6(d).

“Person” means any individual, natural person, company, corporation, limited liability company, partnership, joint venture, trust, unincorporated organization or other business entity (including a division or series of any of the foregoing) or government or any agency or political subdivision thereof.

“Platform” has the meaning assigned thereto in Section 8.2.

“Pledged Foreign Subsidiary” means a Foreign Subsidiary of the Borrower or any Subsidiary Guarantor for which the Administrative Agent has received a Foreign Pledge Agreement from the Borrower or such Subsidiary Guarantor, as applicable, with respect to 65% of the total outstanding voting Equity Interests (and 100% of the non-voting Equity Interests) of such Foreign Subsidiary and such Foreign Pledge Agreement is in full force and effect and the Borrower or such Subsidiary Guarantor, as applicable, shall have satisfied all actions and requirements related to such Foreign Pledge Agreement (including delivery of stock certificates, where applicable).

“Prime Rate” means, at any time, the rate of interest per annum publicly announced from time to time by the Administrative Agent as its prime rate. Each change in the Prime Rate shall be effective as of the opening of business on the day such change in such prime rate occurs. The parties hereto acknowledge that the rate announced publicly by the Administrative Agent as its prime rate is an index or base rate and shall not necessarily be its lowest or best rate charged to its customers or other banks.

“Pro Forma Basis” means with respect to any determination of the Consolidated Total Leverage Ratio, the Consolidated Total Secured Leverage Ratio, the Consolidated Interest Coverage Ratio or Consolidated EBITDA (including, in each case, component definitions thereof) that all Specified Transactions and the following transactions in connection therewith shall be deemed to have occurred as of the first day of the applicable period with respect to any test or

 

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covenant for which such calculation is being made: (a) income statement items (whether positive or negative) attributable to the property or Person subject to such Specified Transaction, (i) in the case of a Specified Disposition or any designation of a Restricted Subsidiary as an Unrestricted Subsidiary, shall be excluded, and (ii) in the case of a Permitted Acquisition or designation of an Unrestricted Subsidiary as a Restricted Subsidiary described in the definition of the term “Specified Transaction”, shall be included, (b) any retirement or repayment of Indebtedness (other than normal fluctuations in revolving Indebtedness Incurred for working capital purposes) and (c) any Indebtedness Incurred or assumed by the Borrower or any of its Restricted Subsidiaries in connection therewith, provided that, (x) if such Indebtedness has a floating or formula rate, such Indebtedness shall have an implied rate of interest for the applicable period for purposes of this definition determined by utilizing the rate that is or would be in effect with respect to such Indebtedness at the relevant date of determination (taking into account any interest hedging arrangements applicable to such Indebtedness), (y) interest on any obligations with respect to Capital Leases shall be deemed to accrue at an interest rate reasonably determined by a Responsible Officer of the Borrower to be the rate of interest implicit in such obligation in accordance with GAAP and (z) interest on any Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate or other rate shall be determined to have been based upon the rate actually chosen, or if none, then based upon such optional rate chosen as the Borrower or such Restricted Subsidiary may designate. Any calculation of the Consolidated Total Leverage Ratio or the Consolidated Total Secured Leverage Ratio on a Pro Forma Basis shall be made using Consolidated Total Indebtedness as of such date of calculation and any calculation of the Consolidated Total Leverage Ratio, the Consolidated Total Secured Leverage Ratio or the Consolidated Interest Coverage Ratio on a Pro Forma Basis shall be made using Consolidated EBITDA for the four consecutive Fiscal Quarter period most recently ended for which the Borrower has delivered financial statements pursuant to Section 8.1(a) or 8.1(b).

“Property” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including Equity Interests.

“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

“Public Lenders” has the meaning assigned thereto in Section 8.2.

“Qualified Cash” means, as of any date of determination, the aggregate amount of cash and Cash Equivalents, excluding cash and Cash Equivalents that are “restricted” (in accordance with GAAP) on the consolidated balance sheet of the Borrower and its Restricted Subsidiaries as of such date but including the aggregate amount of cash and Cash Equivalents restricted in favor of the Credit Facilities (which may also include Cash and Cash Equivalents securing other Indebtedness that is secured by a Lien on the Collateral along with the Credit Facilities, so long as an applicable intercreditor agreement is in effect with respect thereto).

“Qualified Equity Interests” means any Equity Interests that are not Disqualified Equity Interests.

 

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“Rating Agencies” means (a) S&P and Moody’s and (b) any other nationally recognized U.S. rating agency or agencies, as the case may be, approved by the Borrower.

“Reaffirmation Agreement” means that certain Reaffirmation Agreement, dated as of the Closing Date, by and between the Credit Parties and the Administrative Agent.

“Reaffirmation of Foreign Pledge Agreement” means that certain Reaffirmation of Foreign Pledge Agreement, dated as of the Closing Date, by and between Synaptics International, Inc. and the Administrative Agent.

“Receivables SPV” means a special purpose vehicle formed by a Credit Party for the exclusive purpose of effecting a Permitted A/R Financing, which entity has no assets other than those necessary to effect such Permitted A/R Financing.

“Recipient” means (a) the Administrative Agent, (b) any Lender and (c) any Issuing Lender, as applicable.

“Register” has the meaning assigned thereto in Section 12.9(c).

“Reimbursement Obligation” means the obligation of the Borrower to reimburse any Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters of Credit issued by such Issuing Lender.

“Related Assets” means any assets that are customarily sold, transferred and/or pledged or in respect of which security interests are customarily granted in connection with accounts receivable securitizations or accounts receivables purchase or factoring transactions and any collections or proceeds of any of the foregoing (including guaranties, collateral security, lock-boxes, deposit accounts, records in respect of accounts receivable and collections in respect of accounts receivable).

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.

“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.

“Repricing Transaction” means (a) any prepayment of First Amendment Incremental Term Loans with the proceeds of a substantially concurrent incurrence of syndicated term B loan Indebtedness by the Borrower or any of its Subsidiaries (other than any such incurrence in connection with a Change in Control or a Transformative Acquisition) in respect of which the all-in yield is, on the date of such prepayment, lower than the all-in yield on such First Amendment Incremental Term Loans (with the all-in yield calculated by taking into account any interest rate floors, the Applicable Margin hereunder and the interest rate spreads under such Indebtedness, and any original issue discount and upfront fees payable generally to all lenders applicable to or payable in respect of such First Amendment Incremental Term Loans (with the

 

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original issue discount and upfront fees being equated to interest rate assuming a four-year life to maturity of such Indebtedness) but excluding arrangement, structuring, ticking, commitment, unused line, underwriting, amendment and similar fees (in each case, regardless of whether paid in whole or in part to all lenders) or any other fees not paid or payable generally to all lenders) and (b) any amendment, amendment and restatement or other modification to this Agreement that reduces the all-in yield (calculated as set forth in clause (a) above) of the First Amendment Incremental Term Loans (other than any such amendment, amendment and restatement or other modification effected in connection with a Change in Control or a Transformative Acquisition), in each case where the primary purpose of such prepayment or amendment is to reduce the all-in yield of the First Amendment Incremental Term Loans (including through such substantially concurrent incurrence of Indebtedness the proceeds of which are used to prepay the First Amendment Incremental Term Loans).

 

“Required Lenders” means, at any time, Lenders having Total Credit Exposures representing more than 50% of the Total Credit Exposures of all Lenders. The Total Credit Exposure of any Defaulting Lender shall be disregarded in determining Required Lenders at any time. Notwithstanding the foregoing, Required Lenders shall comprise no less than two such Lenders that are not Affiliates of one another, unless (x) all Lenders that are not Defaulting Lenders are Affiliates of one another or (y) there is only one Lender that is not a Defaulting Lender, at such time.

“Required Revolving Credit Lenders” means, at any date, any combination of Revolving Credit Lenders holding more than 50% of the sum of the aggregate amount of the Revolving Credit Commitment or, if the Revolving Credit Commitment has been terminated, any combination of Revolving Credit Lenders holding more than 50% of the aggregate Extensions of Credit under the Revolving Credit Facility; provided that the Revolving Credit Commitment of, and the portion of the Extensions of Credit under the Revolving Credit Facility, as applicable, held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Revolving Credit Lenders. Notwithstanding the foregoing, Required Revolving Credit Lenders shall comprise no less than two such Revolving Credit Lenders that are not Affiliates of one another, unless (x) all Revolving Credit Lenders that are not Defaulting Lenders are Affiliates of one another or (y) there is only one Revolving Credit Lender that is not a Defaulting Lender, at such time.

“Responsible Officer” means, as to any Person, the chief executive officer, president, vice president, chief financial officer, secretary or assistant secretary, controller, treasurer or assistant treasurer of such Person or any other officer of such Person designated in writing by the Borrower and reasonably acceptable to the Administrative Agent. Any document delivered hereunder or under any other Loan Document that is signed by a Responsible Officer of a Person shall be conclusively presumed to have been authorized by all necessary corporate, limited liability company, partnership and/or other action on the part of such Person and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Person.

“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.

 

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“Restricted Payment” has the meaning assigned thereto in Section 9.6.

“Restricted Subsidiary” means any Subsidiary of the Borrower that is not an Unrestricted Subsidiary.

“Revolving Credit Commitment” means (a) as to any Revolving Credit Lender, the obligation of such Revolving Credit Lender to make Revolving Credit Loans to, and to purchase participations in L/C Obligations and Swingline Loans for the account of, the Borrower hereunder in an aggregate principal amount at any time outstanding not to exceed the amount set forth opposite such Revolving Credit Lender’s name on the Register, as such amount may be modified at any time or from time to time pursuant to the terms hereof (including Section 5.13) and (b) as to all Revolving Credit Lenders, the aggregate commitment of all Revolving Credit Lenders to make Revolving Credit Loans, as such amount may be modified at any time or from time to time pursuant to the terms hereof (including Section 5.13). The aggregate Revolving Credit Commitment of all the Revolving Credit Lenders on the Closing Date is $250,000,000. The initial Revolving Credit Commitment of each Revolving Credit Lender is set forth opposite the name of such Lender on Schedule 1.1.

“Revolving Credit Commitment Percentage” means, with respect to any Revolving Credit Lender at any time, the percentage of the total Revolving Credit Commitments of all the Revolving Credit Lenders represented by such Revolving Credit Lender’s Revolving Credit Commitment. If the Revolving Credit Commitments have terminated or expired, the Revolving Credit Commitment Percentages shall be determined based upon the Revolving Credit Commitments most recently in effect, giving effect to any assignments. The initial Revolving Credit Commitment Percentage of each Revolving Credit Lender is set forth opposite the name of such Lender on Schedule 1.1.

“Revolving Credit Exposure” means, as to any Revolving Credit Lender at any time, the aggregate principal amount at such time of its outstanding Revolving Credit Loans and such Revolving Credit Lender’s participation in L/C Obligations and Swingline Loans at such time.

“Revolving Credit Extension Request” has the meaning assigned thereto in Section 5.16(b).

“Revolving Credit Facility” means the revolving credit facility established pursuant to Article II (including any increase in such revolving credit facility established pursuant to Section 5.13 and each Extension Series of Extended Revolving Credit Commitments).

“Revolving Credit Lenders” means, collectively, all of the Lenders with a Revolving Credit Commitment.

“Revolving Credit Loan” means any revolving loan made to the Borrower pursuant to Section 2.1 (including any Extended Revolving Credit Loans), and all such revolving loans collectively as the context requires.

“Revolving Credit Maturity Date” means (a) for any Revolving Credit Loans that are not Extended Revolving Credit Loans, March 11, 2026 and (b) the final maturity date as specified in the applicable Extension Amendment for any tranche of Extended Revolving Credit Loans.

 

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“Revolving Credit Note” means a promissory note made by the Borrower in favor of a Revolving Credit Lender evidencing the Revolving Credit Loans made by such Revolving Credit Lender, substantially in the form attached as Exhibit A-1, and any amendments, supplements and modifications thereto, and any substitutes therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part.

“Revolving Credit Outstandings” means the sum of (a) with respect to Revolving Credit Loans and Swingline Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Revolving Credit Loans and Swingline Loans, as the case may be, occurring on such date; plus (b) with respect to any L/C Obligations on any date, the aggregate outstanding amount thereof on such date after giving effect to any Extensions of Credit occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements of outstanding unpaid drawings under any Letters of Credit or any reductions in the maximum amount available for drawing under Letters of Credit taking effect on such date.

“RFR Business Day” means, for any Obligations, interest, fees, commissions or other amounts denominated in, or calculated with respect to, Dollars, any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities; provided, that for purposes of notice requirements in Sections 2.3(a), 2.4(c), 4.4(a) and 5.2, in each case, such day is also a Business Day.

“S&P” means Standard & Poor’s Financial Services LLC, a part of McGraw-Hill Financial and any successor thereto.

“Sanctioned Country” means a country subject to a sanctions program identified on the list maintained by OFAC and available at http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx, or as otherwise published from time to time.

“Sanctioned Person” means (a) a Person named on the “Specially Designated Nationals List” maintained by OFAC available at http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx, or as otherwise published from time to time, (b) a Person named on the sanctions lists maintained by the United Nations Security Council available at http://www.un.org/sc/committees/list_compend.shtml, or as otherwise published from time to time, (c) a Person named on the lists maintained by the European Union available at http://eeas.europa.eu/cfsp/sanctions/consol-list_en.htm, or as otherwise published from time to time, (d) a Person named on the lists maintained by Her Majesty’s Treasury available at http://www.hm-treasury.gov.uk/fin_sanctions_index.htm, or as otherwise published from time to time, or (e) to the extent explicitly or implicitly covered by a sanctions program administered by OFAC, (i) an agency of the government of a Sanctioned Country, (ii) an organization controlled by a Sanctioned Country, or (iii) a person resident in a Sanctioned Country.

“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

 

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“Secured Cash Management Agreement” means any Cash Management Agreement between or among any Credit Party and any Cash Management Bank.

“Secured Hedge Agreement” means any Hedge Agreement between or among any Credit Party and any Hedge Bank.

“Secured Obligations” means, collectively, (a) the Obligations and (b) all existing or future payment and other obligations owing by any Credit Party under (i) any Secured Hedge Agreement (other than an Excluded Swap Obligation) and (ii) any Secured Cash Management Agreement.

“Secured Parties” means, collectively, the Administrative Agent, the Lenders, the Issuing Lenders, the Swingline Lender, the Hedge Banks that are parties to Secured Hedge Agreements, the Cash Management Banks that are parties to Secured Cash Management Agreements, each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to Section 11.5, any other holder from time to time of any of any Secured Obligations and, in each case, their respective successors and permitted assigns.

“Security Documents” means the collective reference to the Collateral Agreement, each Foreign Pledge Agreement, each Control Agreement and each other agreement or writing pursuant to which any Credit Party pledges or grants a security interest in any Property or assets securing the Secured Obligations.

“SOFR” means a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.

“SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).

“Solvent” and “Solvency” mean, with respect to any Person on any date of determination, that on such date (a) the sum of the debt and liabilities (including contingent liabilities) of the Person and its Subsidiaries, taken as a whole, does not exceed the present fair saleable value of the assets (at a fair valuation) of the Person and its Subsidiaries, taken as a whole; (b) the capital of the Person and its Subsidiaries, taken as a whole, is not unreasonably small in relation to the business of the Person and its Subsidiaries, taken as a whole, contemplated as of the date hereof; and (c) the Person and its Subsidiaries, taken as a whole, do not intend to incur, or believe that they will incur, debts or liabilities including current obligations beyond their ability to pay such debt as they come due. For the purposes hereof, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).

“Specified Acquisition Agreement Representations” means, with respect to any Limited Condition Transaction, the representations and warranties made by or with respect to the targets in the applicable Limited Condition Transaction Agreement as are material to the interests of the Lenders, but only to the extent that the Borrower or its Affiliates have the right (taking into account

 

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any right to cure) to terminate their obligations under such Limited Condition Transaction Agreement or to decline to consummate such Limited Condition Transaction thereunder as a result of a breach of one or more of such representations and warranties in such Limited Condition Transaction Agreement.

“Specified Disposition” means any disposition of all or substantially all of the assets or Equity Interests of any Restricted Subsidiary of the Borrower or any division, business unit, product line or line of business.

“Specified Event of Default” means an Event of Default pursuant to Section 10.1(a), (b), (i) or (j).

“Specified Leverage” means, as of any date of determination, one quarter (0.25) turn inside the financial covenant set forth in Section 9.15(a) in effect as of the First Amendment Effective Date.

“Specified Representations” means the representations and warranties made by the Credit Parties in Section 7.1, Section 7.2(b) (solely with respect to Liens (i) in the Equity Interests of any Domestic Subsidiary of the Borrower and (ii) in other assets with respect to which a Lien may be perfected by the filing of a financing statement under the Uniform Commercial Code or the filing of a security agreement with the United States Copyright Office or the United States Patent and Trademark Office), Section 7.3, Section 7.4(a), Section 7.4(b), Section 7.10, Section 7.11, Section 7.15 and Section 7.18.

“Specified Transactions” means (a) any Specified Disposition, (b) any Permitted Acquisition, (c) the Transactions, (d) any designation of a Subsidiary as a Restricted Subsidiary or an Unrestricted Subsidiary and (e) any other event that by the terms of the Loan Documents requires pro forma compliance with a test or covenant hereunder or requires such test or covenant to be calculated on a Pro Forma Basis.

“Subordinated Indebtedness” means the collective reference to any Indebtedness Incurred by the Borrower or any of its Restricted Subsidiaries that is subordinated in right and time of payment to the Obligations on terms and conditions reasonably satisfactory to the Administrative Agent.

“Subsidiary” means as to any Person, any corporation, partnership, limited liability company or other entity of which more than 50% of the outstanding Equity Interests having ordinary voting power to elect a majority of the Board of Directors or other managers of such corporation, partnership, limited liability company or other entity is at the time owned by (directly or indirectly) or the management is otherwise controlled by (directly or indirectly) such Person (irrespective of whether, at the time, Equity Interests of any other class or classes of such corporation, partnership, limited liability company or other entity shall have or might have voting power by reason of the happening of any contingency). Unless otherwise qualified, references to “Subsidiary” or “Subsidiaries” herein shall refer to those of the Borrower.

 

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“Subsidiary Guarantors” means, collectively, all direct and indirect Domestic Subsidiaries of the Borrower (other than Excluded Subsidiaries) in existence on the Closing Date or which become a party to the Subsidiary Guaranty Agreement pursuant to Section 8.13.

“Subsidiary Guaranty Agreement” means the unconditional guaranty agreement dated as of September 30, 2014 executed by the Subsidiary Guarantors in favor of the Administrative Agent, for the benefit and the Secured Parties.

“Swap Obligation” means, with respect to any Subsidiary Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

“Swingline Commitment” means the lesser of (a) $25,000,000 and (b) the Revolving Credit Commitment.

“Swingline Facility” means the swingline facility established pursuant to Section 2.2.

“Swingline Lender” means Wells Fargo in its capacity as swingline lender hereunder or any successor thereto.

“Swingline Loan” means any swingline loan made by the Swingline Lender to the Borrower pursuant to Section 2.2, and all such swingline loans collectively as the context requires.

“Swingline Maturity Date” means the date that is five Business Days prior to the Revolving Credit Maturity Date.

“Swingline Note” means a promissory note made by the Borrower in favor of the Swingline Lender evidencing the Swingline Loans made by the Swingline Lender, substantially in the form attached as Exhibit A-2, and any substitutes therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part.

“Synaptics GmbH” means Synaptics Holding GmbH, a Swiss Gesellschaft mit beschränkter Haftung.

“Synthetic Lease” means any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product where such transaction is considered borrowed money indebtedness for tax purposes but is classified as an Operating Lease in accordance with GAAP.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, fines, additions to tax or penalties applicable thereto.

“Term Loan Extension Request” has the meaning assigned thereto in Section 5.16(b).

“Term Loan Facility” means any new term loan facility established pursuant to Section 5.13, including, for the avoidance of doubt, the First Amendment Incremental Term Loan Facility.

 

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“Term Loan Lender” means any Lender with an Incremental Term Loan Commitment and/or outstanding Term Loans, including, for the avoidance of doubt, each First Amendment Incremental Term Lender with a First Amendment Incremental Term Loan Commitment and/or outstanding First Amendment Incremental Term Loans.

“Term Loan Note” means any promissory note made by the Borrower in favor of a Term Loan Lender evidencing the portion of the Incremental Term Loans made by such Term Loan Lender, in such form as the Borrower and such Term Loan Lender may agree, and any amendments, supplements and modifications thereto, any substitutes therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part.

“Term Loan Percentage” means, with respect to any Term Loan Lender at any time, the percentage of the total outstanding principal balance of the Term Loans represented by the outstanding principal balance of such Term Loan Lender’s Term Loans.

“Term Loans” means, if applicable, the Incremental Term Loans, including the First Amendment Incremental Term Loans, and Extended Term Loans and “Term Loan” means any of such Term Loans.

“Term SOFR” means,

(a) for any calculation with respect to a Term SOFR Loan, the Term SOFR Reference Rate for a tenor comparable to the applicable Interest Period on the day (such day, the “Periodic Term SOFR Determination Day”) that is two (2) RFR Business Days prior to the first day of such Interest Period, as such rate is published by the Term SOFR Administrator; provided, however, that if as of 5:00 p.m. (Eastern time) on any Periodic Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding RFR Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding RFR Business Day is not more than three (3) RFR Business Days prior to such Periodic Term SOFR Determination Day, and

(b) for any calculation with respect to a Base Rate Loan on any day, the Term SOFR Reference Rate for a tenor of one month on the day (such day, the “Base Rate Term SOFR Determination Day”) that is two (2) RFR Business Days prior to such day, as such rate is published by the Term SOFR Administrator; provided, however, that if as of 5:00 p.m. (Eastern time) on any Base Rate Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding RFR Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding RFR Business Day is not more than three (3) RFR Business Days prior to such Base Rate SOFR Determination Day.

“Term SOFR Adjustment” means, for any calculation with respect to a Base Rate Loan or a Term SOFR Loan, a percentage per annum as set forth below for the applicable type of such Loan and (if applicable) Interest Period therefor:

 

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Base Rate Loans:

0.11448%

Term SOFR Loans:

Interest Period	Percentage
One month	0.11448%
Three months	0.26161%
Six months	0.42826%

 

“Term SOFR Administrator” means CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Administrative Agent in its reasonable discretion).

“Term SOFR Loan” means any Loan that bears interest at a rate based on Adjusted Term SOFR other than pursuant to clause (c) of the definition of “Base Rate”.

“Term SOFR Reference Rate” means the forward-looking term rate based on SOFR.

“Test Period” means, as of any date of determination, the four consecutive Fiscal Quarter period most recently ended for which the Borrower has delivered financial statements pursuant to Section 8.1(a) or 8.1(b).

“Threshold Amount” means $65,000,000.

“Total Credit Exposure” means, as to any Lender at any time, the unused Commitments, Revolving Credit Exposure and Term Loans of such Lender at such time.

“Trade Date” has the meaning assigned thereto in Section 12.9(g)(i).

“Transaction Costs” means all transaction fees, charges, premiums and other amounts related to (a) the Transactions, (b) any Permitted Acquisitions or (c) other Investments, Asset Dispositions, issuances of Equity Interests or incurrences of Indebtedness (including any financing fees, merger and acquisition fees, legal fees and expenses, due diligence fees or any other fees and expenses in connection therewith or in connection with any amendment or other modification (or proposed amendment or modification) of any document in connection with the foregoing), in each case to the extent paid within one year of the Closing Date or closing of the relevant transaction and, in each case, regardless of whether or not such transaction was actually consummated if such transaction would have been permitted under this Agreement.

 

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“Transactions” means, collectively, (a) the transactions contemplated by this Agreement, (b) the initial Extensions of Credit, and (c) the payment of the Transaction Costs incurred in connection with the foregoing.

“Transformative Acquisition” means any acquisition or Investment by the Borrower or any Restricted Subsidiary that is either (a) not permitted by the terms of this Agreement immediately prior to the consummation of such acquisition or Investment or (b) if permitted by the terms of this Agreement immediately prior to the consummation of such acquisition or Investment, would not provide the Borrower and its Restricted Subsidiaries with adequate flexibility under this Agreement for the continuation and/or expansion of their combined operations following such consummation (as determined by the Borrower acting in good faith).

“UCC” means the Uniform Commercial Code as in effect in the State of New York.

“UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person subject to IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.

“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.

“Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the Benchmark Replacement Adjustment.

“Uniform Customs” means the Uniform Customs and Practice for Documentary Credits (2007 Revision), effective July, 2007 International Chamber of Commerce Publication No. 600.

“United States” means the United States of America.

“Unrestricted Subsidiary” means any Subsidiary of the Borrower designated by the Borrower as an Unrestricted Subsidiary pursuant to Section 8.14 subsequent to the Closing Date.

“U.S. Borrower” means any Borrower that is a U.S. Person.

“U.S. Person” means any Person that is a “United States person” as defined in Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning assigned thereto in Section 5.11(g).

“Wells Fargo” means Wells Fargo Bank, National Association, a national banking association.

“Wholly-Owned Subsidiary” means, with respect to any specified Person, a Restricted Subsidiary of such Person all of the outstanding Equity Interests of which (other than directors’

 

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qualifying shares) are, directly or indirectly, owned or controlled by such Person or by one or more Wholly Owned Subsidiaries of such Person.

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

“Withholding Agent” means any Credit Party and the Administrative Agent.

“Working Capital” means, at any date, the excess of current assets of the Borrower and its Restricted Subsidiaries on such date (excluding cash and Cash Equivalents) over current liabilities of the Borrower and its Restricted Subsidiaries on such date (excluding current liabilities in respect of Indebtedness), all determined on a consolidated basis in accordance with GAAP.

“Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.

 

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The foregoing provisions are collectively referred to as the “Limited Condition Transaction Provisions”, and shall apply with similar effect during the pendency of multiple Limited Condition Transactions such that each of the possible scenarios is separately tested.

 

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Each Credit Party consents to the foregoing and agrees, to the extent it may effectively do so under Applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against each Credit Party rights of setoff and counterclaim with respect to such

 

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participation as fully as if such Lender were a direct creditor of each Credit Party in the amount of such participation.

 

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and the result of any of the foregoing shall be to increase the cost to such Lender, the applicable Issuing Lender or such other Recipient of making, converting to, continuing or maintaining any Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender, such Issuing Lender or such other Recipient of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender, such Issuing Lender or such other Recipient hereunder (whether of principal, interest or any other amount) then, upon written request of such Lender, such Issuing Lender or other Recipient, the Borrower shall, within 30 days pay to any such Lender, such Issuing Lender or other Recipient, as the case may be, such additional amount or amounts necessary to compensate such Lender, such Issuing Lender or other Recipient, as the case may be, for such additional costs incurred or reduction suffered, as set forth in such certificate (absent manifest error).

 

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Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.

 

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A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply and such Lender has notified the Borrower thereof in writing. Each Lender hereby grants to the Administrative Agent an irrevocable power of attorney (which power is coupled with an interest) to execute and deliver, on behalf of such Lender as assignor, any Assignment and Assumption necessary to effectuate any assignment of such Lender’s interests hereunder in the circumstances contemplated by this Section 5.12(b).

 

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provided that (1) the total aggregate principal amount for all such Incremental Loan Commitments incurred after the Closing Date shall not (as of any date of Incurrence thereof) exceed the greater of (x) the greater of (i) $150,000,000 and (ii) 25.0% of Consolidated EBITDA for the most recently ended Test Period and (y) subject to the Limited Condition Transaction Provisions in the case of a Limited Condition Transaction, the maximum amount of additional Indebtedness that would cause the Consolidated Total Secured Leverage Ratio as of the four consecutive Fiscal Quarter period most recently ended for which financial statements have been delivered pursuant to Section 8.1(a) or 8.1(b) prior to the proposed Increased Amount Date, calculated on a Pro Forma Basis after giving effect to the incurrence of such additional Indebtedness (and assuming any Incremental Revolving Credit Increase is fully drawn), to not exceed 3.50:1.00 (such amount, the “Incremental Facility Amount”) and (2) the total aggregate amount for each Incremental Loan Commitment (and the Incremental Loans made thereunder) shall not be less than a minimum principal amount of $10,000,000 or, if less, the remaining amount permitted pursuant to the foregoing clause (1). Each such notice shall specify the date (each, an “Increased Amount Date”) on which the Borrower proposes that any Incremental Loan Commitment shall be effective, which shall be a date not less than 5 Business Days after the date on which such notice is delivered to Administrative Agent. The Borrower may invite any Lender, any Affiliate of any Lender and/or any Approved Fund, and/or any other Person reasonably satisfactory to the Administrative Agent, to provide an Incremental Loan Commitment (any such Person, an “Incremental Lender”). Any proposed Incremental Lender offered or approached to provide all or a portion of any Incremental Loan Commitment may elect or decline, in its sole discretion, to provide such Incremental Loan Commitment. Any Incremental Loan Commitment shall become effective as of such Increased Amount Date; provided that:

 

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(x) such Incremental Term Loan will not have a maturity date earlier than the Latest Maturity Date; provided, that this clause (x) shall not apply to any Incremental Term Loans in aggregate principal amount outstanding not in excess of $150,000,000;

(y) subject to clause (x) above, the pricing, interest rate margins, discounts, premiums, rate floors and fees and maturity and amortization schedule applicable to such Incremental Term Loan shall be determined by the Borrower and the applicable Incremental Lenders; provided, that, in the event that the all-in-yield (whether in the form of interest rate margins, original issue discount, upfront fees or other similar fees paid to all lenders or interest rate floors, in each case payable by the Borrower generally to lenders, but excluding arrangement fees, structuring fees, ticking fees, commitment fees, unused line fees, underwriting fees, any amendment and similar fees (in each case, regardless of whether paid in whole or in part to all lenders) or any other fees not paid or payable generally to all lenders by the Borrower)) applicable to any future Dollar denominated floating rate Incremental Term Loans that are pari passu in right of payment with the First Amendment Incremental Term Loans and secured by a Lien on the Collateral on a pari passu basis with the Lien on the Collateral securing the First Amendment Incremental Term Loans incurred prior to the date that is

 

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twelve (12) months after the First Amendment Effective Date shall be more than 50 basis points higher than the corresponding all in yield for any then existing First Amendment Incremental Term Loans as determined by the Borrower in good faith, then the all in yield with respect to the outstanding First Amendment Incremental Term Loans shall be increased to the amount necessary so that the difference between the all in yield with respect to such Incremental Term Loans and the all in yield with respect to the outstanding First Amendment Incremental Term Loans is equal to 50 basis points; provided, that to the extent any interest rate floor applicable to such Incremental Term Loans is greater than the interest rate floor applicable to the First Amendment Incremental Term Loans, such increased amount shall be equated to interest rate margin for purposes of determining whether an increase to the applicable interest rate margin under the First Amendment Incremental Term Loans shall be required, to the extent an increase in the interest rate floor in the First Amendment Incremental Term Loans would cause an increase in the interest rate then in effect thereunder, and in such case the increase in the all in yield shall be effected solely by increasing the interest rate floor (but not the interest rate margin) applicable to the First Amendment Incremental Term Loans; and

(z) except as provided above, all other terms and conditions applicable to such Incremental Term Loan shall be determined by the Borrower and the applicable Incremental Lenders; provided that such terms and conditions must be (i) not materially more restrictive to the Borrower and its Restricted Subsidiaries (as determined by the Borrower in good faith) than the terms and conditions applicable to the Revolving Credit Facility (other than covenants and provisions applicable only to periods after the Latest Maturity Date) or (ii) reasonably acceptable to the Administrative Agent;

(x) such Incremental Revolving Credit Increase shall mature on the Revolving Credit Maturity Date, shall bear interest and be entitled to fees (other than upfront fees), in each case at the rate applicable to the Revolving Credit Loans, and shall be subject to the same terms and conditions as the Revolving Credit Loans;

(y) the outstanding Revolving Credit Loans and Revolving Credit Commitment Percentages of Swingline Loans and L/C Obligations will be reallocated by the Administrative Agent on the applicable Increased Amount Date among the Revolving Credit Lenders (including the Incremental Lenders providing such Incremental Revolving Credit Increase) in accordance with their revised Revolving Credit Commitment

 

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Percentages (and the Revolving Credit Lenders (including the Incremental Lenders providing such Incremental Revolving Credit Increase) agree to make all payments and adjustments necessary to effect such reallocation and the Borrower shall pay any and all costs required pursuant to Section 5.9 in connection with such reallocation as if such reallocation were a repayment); and

(z) except as provided above, all of the other terms and conditions applicable to such Incremental Revolving Credit Increase shall, except to the extent otherwise provided in this Section 5.13, be identical to the terms and conditions applicable to the Revolving Credit Facility;

 

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Without limiting the generality of the provisions of the last paragraph of Section 11.3, for purposes of determining compliance with the conditions specified in this Section 6.1, the Administrative

 

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Agent and each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

 

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To induce the Administrative Agent and Lenders to enter into this Agreement and to induce the Lenders to make Extensions of Credit, the Credit Parties hereby represent and warrant to the Administrative Agent and the Lenders both before and after giving effect to the Transactions and other transactions contemplated hereunder, which representations and warranties shall be deemed made on the Closing Date and as otherwise set forth in Section 6.2, that:

 

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Until all of the Obligations (other than contingent indemnification obligations not then due) have been paid and satisfied in full in cash, all Letters of Credit have been terminated or expired (or been Cash Collateralized) and the Commitments terminated, each Credit Party will, and will cause each of its Restricted Subsidiaries to:

 

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Documents required to be delivered pursuant to Sections 8.1(a), 8.1(b), 8.2(b) or 8.2(c) (to the extent any such documents are included in materials otherwise filed with the SEC) or Section 8.1(c) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the website address listed in Section 12.1; or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that the Borrower shall

 

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notify the Administrative Agent (by electronic mail), which upon receipt shall promptly notify each Lender, of the posting of any such documents and provide to the Administrative Agent by electronic mail electronic versions of such documents. Except for such Officer’s Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

The Borrower hereby acknowledges that (a) the Administrative Agent and/or the Arranger will make available to the Lenders and the Issuing Lenders materials and/or information provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on Debt Domain, IntraLinks, SyndTrak Online or another similar electronic system (the “Platform”) and (b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive MNPI with respect to the Borrower or its securities) (each, a “Public Lender”). The Borrower hereby agrees that it will use commercially reasonable efforts to identify that portion of the Borrower Materials that may be distributed to the Public Lenders and that (w) all such Borrower Materials shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, means that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent, the Arranger, the Issuing Lenders and the Lenders to treat such Borrower Materials as not containing any material non-public information (although it may be sensitive and proprietary) with respect to the Borrower or its securities for purposes of United States Federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 12.10); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor;” and (z) the Administrative Agent and the Arranger shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.” Notwithstanding the foregoing, the Borrower shall be under no obligation to mark any Borrower Materials “PUBLIC”.

 

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Each notice pursuant to Section 8.3 shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto. Each notice pursuant to Section 8.3(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.

 

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NEGATIVE COVENANTS

Until all of the Obligations (other than contingent, indemnification obligations not then due) have been paid and satisfied in full in cash, all Letters of Credit have been terminated or expired (or been Cash Collateralized) and the Commitments terminated, the Credit Parties will not, and will not permit any of their respective Restricted Subsidiaries to.

 

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(v) Liens to secure Permitted Refinancing Indebtedness; provided that the scope of any such Lien shall not be increased, or otherwise expanded, to cover any additional property or type

 

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of asset, as applicable, beyond that which secures the applicable Original Indebtedness, except for products and proceeds of the foregoing.

(vi) Investments made after the Closing Date by any Credit Party in any Non-Credit Party in an aggregate principal amount at any time outstanding not to exceed the greater of (i) $50,000,000 and (ii) 17.5% of Consolidated EBITDA for the most recently ended Test Period, determined as of the date of such Investment (provided that any Investments in the form of loans or advances made by any Credit Party to any Non-Credit Party pursuant to this clause (vi) shall be evidenced by a demand note in form and substance reasonably satisfactory to the Administrative Agent and shall be pledged and delivered to the Administrative Agent pursuant to the Security Documents);

 

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For purposes of determining the amount of any Investment outstanding for purposes of this Section 9.3, such amount shall be deemed to be the amount of such Investment when made, purchased or acquired (without adjustment for subsequent increases or decreases in the value of such Investment) less any amount realized in respect of such Investment upon the sale, collection or return of capital (not to exceed the original amount invested).

 

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First, to payment of that portion of the Secured Obligations constituting fees, indemnities, expenses and other amounts, including attorney fees, payable to the Administrative Agent in its capacity as such, the Issuing Lenders in their capacity as such and the Swingline Lender in its capacity as such, ratably among the Administrative Agent, the Issuing Lenders and Swingline Lender in proportion to the respective amounts described in this clause First payable to them;

Second, to payment of that portion of the Secured Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders under the Loan Documents, including attorney fees, ratably among the Lenders in proportion to the respective amounts described in this clause Second payable to them;

Third, to payment of that portion of the Secured Obligations constituting accrued and unpaid interest on the Loans and Reimbursement Obligations, ratably among the Lenders in proportion to the respective amounts described in this clause Third payable to them;

Fourth, to payment of that portion of the Secured Obligations constituting unpaid principal of the Loans, Reimbursement Obligations and payment obligations then owing under Secured Hedge Agreements and Secured Cash Management Agreements, ratably among the Lenders, the Issuing Lenders, the Hedge Banks and the Cash Management Banks in proportion to the respective amounts described in this clause Fourth payable to them;

Fifth, to the Administrative Agent for the account of the Issuing Lenders, to Cash Collateralize any L/C Obligations then outstanding; and

Last, the balance, if any, after all of the Secured Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by Applicable Law.

 

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Notwithstanding the foregoing, Secured Obligations arising under Secured Cash Management Agreements and Secured Hedge Agreements shall be excluded from the application described above if the Administrative Agent has not received written notice thereof, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case may be. Each Cash Management Bank or Hedge Bank not a party to this Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of the Administrative Agent pursuant to the terms of Article XI for itself and its Affiliates as if a “Lender” party hereto.

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and each Issuing Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the Issuing Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 3.3, 5.3 and 12.3.

 

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Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Subsidiary Guarantor from its obligations under the Subsidiary Guaranty Agreement pursuant to this Section 11.9. In each case as specified in this Section 11.9, the Administrative Agent will, at the Borrower’s expense, execute and deliver to the applicable Credit Party such documents as such Credit Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Security Documents or to subordinate its interest in such item, or to release such Subsidiary Guarantor from its obligations under the Subsidiary Guaranty Agreement, in each case in accordance with the terms of the Loan Documents and this Section 11.9. In the case of any such sale, transfer or disposal of any property constituting Collateral in a transaction constituting an Asset Disposition permitted pursuant to Section 9.5, the Liens created by any of the Security Documents on such property shall be automatically released without need for further action by any person.

 

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If to the Borrower:

Synaptics Incorporated
1251 McKay Dr.
San Jose, CA 95131
Attention of: General Counsel
Telephone No.: (408) 904-2741
E-mail: legal@synaptics.com

Website: www.synaptics.com

With copies to (which shall not constitute notice):

 

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Goodwin Procter LLP
The New York Times Building

620 Eighth Avenue

New York, NY 10018
Attention of: Nick Caro
Telephone No.: (212) 459-7079
E-mail: ncaro@goodwinlaw.com

 

If to Wells Fargo as
Administrative
Agent:

Wells Fargo Bank, National Association
MAC D1109-019
1525 West W.T. Harris Blvd.
Charlotte, NC 28262
Attention of: Syndication Agency Services
Telephone No.: (704) 590-2703

E-mail: agencyservices.requests@wellsfargo.com

With copies to:

Wells Fargo Bank, National Association

550 California Street, 14th Floor

San Francisco, CA 94104
Attention of:
Telephone No.:
E-mail:

 

If to any Lender:

To the address set forth on the Register

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices delivered through electronic communications to the extent provided in paragraph (b) below, shall be effective as provided in said paragraph (b).

 

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provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by each affected Issuing Lender in addition to the Lenders required above, affect the rights or duties of such Issuing Lender under this Agreement or any Letter of Credit Application relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Swingline Lender in addition to the Lenders required above, affect the rights or duties of the Swingline Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; (iv) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto, (v) each Letter of Credit Application may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto; provided that a copy of such amended Letter of Credit Application shall be promptly delivered to the Administrative Agent upon such amendment or waiver, (vi) any waiver, amendment or modification of this Agreement that by its terms affects the rights or duties under this Agreement of Lenders holding Loans or Commitments of a particular Class (but not the Lenders holding Loans or Commitments of any other Class) may be effected by an agreement or agreements in writing entered into by the Borrower and the requisite percentage in interest of the affected Class of Lenders that would be required to consent thereto under this Section if such Class

 

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of Lenders were the only Class of Lenders hereunder at the time, (vii) the Administrative Agent and the Borrower shall be permitted to amend any provision of the Loan Documents (and such amendment shall become effective without any further action or consent of any other party to any Loan Document if the same is not objected to in writing by the Required Lenders to the Administrative Agent within five Business Days following receipt of notice thereof) if the Administrative Agent and the Borrower shall have jointly identified an obvious error or any error or omission of a purely technical or immaterial nature in any such provision, (viii) any waiver, amendment, supplement or other modification with respect to Section 9.15 (or any defined term used therein solely affecting the calculation or formulation of the financial covenants set forth therein) and any waiver of an Event of Default arising solely from a default in the observance or performance of a financial covenant set forth in Section 9.15 shall require the written consent solely of the Borrower and the Required Revolving Credit Lenders and (ix) the Administrative Agent and the Borrower may, without the consent of any Lender, enter into amendments or modifications to this Agreement or any of the other Loan Documents or to enter into additional Loan Documents as the Administrative Agent reasonably deems appropriate in order to implement any Benchmark Replacement or any Benchmark Replacement Conforming Changes or otherwise effectuate the terms of Section 5.8(c) in accordance with the terms of Section 5.8(c). Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Revolving Credit Commitment of such Lender may not be increased or extended without the consent of such Lender.

Notwithstanding anything in this Agreement to the contrary each Lender hereby irrevocably authorizes the Administrative Agent on its behalf, and without further consent, to enter into amendments or modifications to this Agreement (including amendments to this Section 12.2) or any of the other Loan Documents or to enter into additional Loan Documents as the Administrative Agent reasonably deems appropriate in order to effectuate the terms of Section 5.13 and Section 5.16; provided that no amendment or modification shall result in any increase in the amount of any Lender’s Commitment or any increase in any Lender’s Commitment Percentage, in each case, without the written consent of such affected Lender.

 

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Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section, from and after the effective date specified in each Assignment and Assumption,

 

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the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 5.8, 5.9, 5.10, 5.11 (subject to the requirements and limitations therein, including the requirements under Section 5.11(g)) and 12.3 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided that, except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (d) of this Section (other than a purported assignment to a natural Person, Disqualified Institution, or the Borrower or any of the Borrower’s Subsidiaries or Affiliates, which shall be null and void except as provided in Section 12.9(e)).

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such

 

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agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver or modification described in Section 12.2(b), (c), (d) or (e) that directly and adversely affects such Participant and could not be effected by a vote of the Required Lenders. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 5.9, 5.10 and 5.11 (subject to the requirements and limitations therein, including the requirements under Section 5.11(g) (it being understood that the documentation required under Section 5.11(g) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Section 5.12 as if it were an assignee under paragraph (b) of this Section (without duplication of any benefits that would otherwise be owed to the Lender with respect to the Loans subject to such participation); and (B) shall not be entitled to receive any greater payment under Sections 5.10 or 5.11, with respect to any participation, than its participating Lender would have been entitled to receive unless the participation was made with the Borrower’s prior written consent. Each Lender that sells a participation agrees, at the Borrower’s request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 5.12(b) with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 12.4 as though it were a Lender; provided that such Participant agrees to be subject to Section 5.6 as though it were a Lender.

Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts of (and stated interest on) each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103‑1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

 

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(g) Disqualified Institutions. (i) Notwithstanding anything to the contrary contained in this Agreement, no assignment or participation shall be made to any Person that was a Disqualified Institution as of the date (the “Trade Date”) on which the assigning Lender entered into a binding agreement to sell and assign or participate all or a portion of its rights and obligations under this Agreement to such Person (unless the Borrower has consented to such assignment or participation in writing in its sole and absolute discretion, in which case such Person will not be considered a Disqualified Institution for the purpose of such assignment or participation). For the avoidance of doubt, with respect to any assignee that becomes a Disqualified Institution after the applicable Trade Date (including as a result of the delivery of a notice pursuant to, and/or the

 

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expiration of the notice period referred to in, the definition of “Disqualified Institution”), (A) such assignee shall not retroactively be disqualified from becoming a Lender and (B) the execution by the Borrower of an Assignment and Assumption with respect to such assignee will not by itself result in such assignee no longer being considered a Disqualified Institution. Any assignment in violation of this clause (g)(i) shall be null and void.

(ii) If any assignment or participation is made to any Person that becomes a Disqualified Institution after the applicable Trade Date, the Borrower may, at its sole expense and effort, upon notice to the applicable Disqualified Institution and the Administrative Agent, (A) terminate any Revolving Credit Commitment of such Disqualified Institution and repay all obligations of the Borrower owing to such Disqualified Institution in connection with such Revolving Credit Commitment, (B) in the case of outstanding Term Loans held by Disqualified Institutions, purchase or prepay such Term Loan by paying the lesser of (x) the principal amount thereof and (y) the amount that such Disqualified Institution paid to acquire such Term Loans, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable to it hereunder and/or (C) require such Disqualified Institution to assign, without recourse (in accordance with and subject to the restrictions contained in this Section 12.9), all of its interest, rights and obligations under this Agreement to one or more Eligible Assignees at the lesser of (x) the principal amount thereof and (y) the amount that such Disqualified Institution paid to acquire such interests, rights and obligations, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable to it hereunder.

(iii) Notwithstanding anything to the contrary contained in this Agreement, Disqualified Institutions will not (A) have the right to receive information, reports or other materials provided to Lenders by the Borrower, the Administrative Agent or any other Lender, (B) attend or participate in meetings attended by the Lenders and the Administrative Agent, or (C) access any electronic site established for the Lenders or confidential communications from counsel to or financial advisors of the Administrative Agent or the Lenders.

 

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“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

“Covered Entity” means any of the following:

“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

 

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[Signature pages to follow]

 

 

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Exhibit 99.1

 

 

Synaptics Reports Fourth Quarter Fiscal 2023 Results

Q4’23 Financial Results and Recent Business Highlights

SAN JOSE, Calif., – August 3, 2023– Synaptics Incorporated (Nasdaq: SYNA), today reported financial results for its fourth quarter and full year of fiscal 2023 ended June 24, 2023.

Net revenue for the fourth quarter of fiscal 2023 was $227.3 million. GAAP net loss for the fourth quarter of fiscal 2023 was $23.4 million, or a loss of $0.59 per basic share. Non-GAAP net income for the fourth quarter of fiscal 2023 was $19.5 million, or $0.49 per diluted share.

 

For the full year fiscal 2023, net revenue was $1.36 billion. Synaptics’ products continue to garner strong gross margin with GAAP gross margin for fiscal 2023 of 52.8 percent compared to 54.2 percent in the prior year; and non-GAAP gross margin of 60.1 percent compared to 60.0 percent in the prior year. GAAP net income for the recently completed fiscal year was $73.6 million or $1.83 per diluted share. Non-GAAP net income for the recently completed fiscal year was $326.4 million or $8.12 per diluted share.

 

“After a strong start to our fiscal 2023, the last three quarters were impacted by excess customer inventories. We believe our business bottomed out this quarter and we will begin a climb upward in early calendar 2024. Earlier this week, we announced a key strategic deal with Broadcom, one that will be a cornerstone for our IoT business as we return to growth. We believe our roadmaps and design wins position us well for the years to come.” said Michael Hurlston, Synaptics’ President and CEO.

 

Business Outlook
Dean Butler, Chief Financial Officer of Synaptics, added, “As we enter the September quarter, we see continued stabilization of our demand signals and good momentum in reducing channel inventory. With shorter than normal lead times and inventory levels not quite at equilibrium, we expect the coming quarter’s revenue to be relatively flat to our June results. The company’s balance sheet is in great shape, affording us the flexibility to invest in the business while continuing our recent buyback program.”

 

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For the first quarter of fiscal 2024, the company expects:

 

	GAAP	Non-GAAP Adjustment	Non-GAAP
Revenue	$215M to $245M	N/A	N/A
Gross Margin*	43.5 percent to 47.5 percent	$18M	52.0 percent to 55.0 percent
Operating Expense**	$139M to $147M	$42M to $47M	$97M to $100M

*Projected Non-GAAP gross margin excludes $17.0 million of intangible asset amortization and $1.0 million of share-based compensation.

 

**Projected Non-GAAP operating expense excludes $29.0 million to $31.0 million of share-based compensation, $7.0 million to $10.0 million restructuring costs, and $6.0 million of intangible asset amortization.

 

Earnings Call and Supplementary Materials
The Synaptics fourth quarter 2023 teleconference and webcast is scheduled to begin at 2:00 p.m. PT (5:00 p.m. ET), on Thursday, August 3, 2023, during which the company will provide forward-looking information.

Speakers:

To participate on the live call, analysts and investors should pre-register at Synaptics Q4 FY2023 Earnings Call Registration.

(https://register.vevent.com/register/BI5a3eff8ce0da44579b5f35232b748089). Supplementary slides, a copy of the prepared remarks, and a live and archived webcast of the conference call will be accessible from the “Investor Relations” section of the company’s Website at https://investor.synaptics.com/.

 

About Synaptics Incorporated:
Synaptics (Nasdaq: SYNA) is changing the way humans engage with connected devices and data, engineering exceptional experiences throughout the home, at work, in the car and on the go. Synaptics is the partner of choice for the world’s most innovative intelligent system providers who are integrating multiple experiential technologies into platforms that make our digital lives more productive, insightful, secure and enjoyable. These customers are combining Synaptics’ differentiated technologies in touch, display and biometrics with a new

 

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generation of advanced connectivity and AI-enhanced video, vision, audio, speech and security processing. Follow Synaptics on LinkedIn, Twitter and Facebook, or visit synaptics.com.

 

Use of Non-GAAP Financial Information

In evaluating its business, Synaptics considers and uses Non-GAAP Net Income, which we define as net income excluding share-based compensation, acquisition related costs, and certain other non-cash or recurring and non-recurring items the company does not believe are indicative of its core operating performance as a supplemental measure of operating performance. Non-GAAP Net Income is not a measurement of the company’s financial performance under GAAP and should not be considered as an alternative to GAAP net income. The company presents Non-GAAP Net Income because it considers it an important supplemental measure of its performance since it facilitates operating performance comparisons from period to period by eliminating potential differences in net income caused by the existence and timing of share-based compensation charges, acquisition related costs, and certain other non-cash or recurring and non-recurring items. Non-GAAP Net Income has limitations as an analytical tool and should not be considered in isolation or as a substitute for the company’s GAAP net income. The principal limitations of this measure are that it does not reflect the company’s actual expenses and may thus have the effect of inflating its net income and net income per share as compared to its operating results reported under GAAP. In addition, the company presents components of Non-GAAP Net Income, such as Non-GAAP Gross Margin, Non-GAAP operating expenses and Non-GAAP operating margin, for similar reasons.

As presented in the “Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures” tables that follow, Non-GAAP Net Income and each of the other Non-GAAP financial measures excludes one or more of the following items:

Acquisition related costs

Acquisition related costs primarily consist of:

These acquisition related costs are not factored into the company’s evaluation of its ongoing business operating performance or potential acquisitions, as they are not considered as part of the company’s principal operations. Further, the amount of these costs can vary significantly from period to period based on the terms of an earn-out arrangement, revisions to assumptions that went into developing the estimate of the contingent consideration associated with an earn-out arrangement, the size and timing of an acquisition, the lives assigned to the acquired intangible assets, and the maturity of the business acquired. Excluding acquisition related costs from Non-GAAP measures provides investors with a basis to compare Synaptics against the performance of other companies

 

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without the variability and potential earnings volatility associated with purchase accounting and acquisition related items.

Share-based compensation

Share-based compensation expense relates to employee equity award programs and the vesting of the underlying awards, which includes stock options, deferred stock units, market stock units, performance stock units, phantom stock units and the employee stock purchase plan. Share-based compensation settled with stock, which includes stock options, deferred stock units, market stock units, performance stock units and the employee stock purchase plan, is a non-cash expense, while share-based compensation settled with cash, which includes phantom stock units, is a cash expense. Settlement of all employee equity award programs whether settled with cash or stock varies in amount from period to period and is dependent on market forces that are often beyond the company’s control. As a result, the company excludes share-based compensation from its internal operating forecasts and models. The company believes that Non-GAAP measures reflecting adjustments for share-based compensation provide investors with a basis to compare the company’s principal operating performance against the performance of peer companies without the variability created by share-based compensation resulting from the variety of equity-linked compensatory awards used by other companies and the varying methodologies and assumptions used.

Amortization of prepaid development costs

Amortization of prepaid development costs represents the amortization of the estimated cost to develop certain future roadmap devices designed in advance process nodes in connection with an acquisition. The amortization of prepaid development costs represents a non-cash charge. As a result, the company excludes amortization of prepaid development costs from its internal operating forecasts and models when evaluating its ongoing business performance. The company believes that Non-GAAP measures reflecting adjustments for amortization of prepaid development costs provide investors with a basis to compare the company’s principal operating performance against the performance of other companies without the variability created by the amortization of prepaid development costs.

Restructuring costs

Restructuring costs are costs incurred to address cost structure inefficiencies of acquired or existing business operations and consist primarily of employee termination and office closure costs, including the reversal of such costs. These costs are generally cash-based. As a result, the company excludes restructuring costs from its internal operating forecasts and models when evaluating its ongoing business performance. The company believes that Non-GAAP measures reflecting adjustments for restructuring costs provide investors with a basis to compare the company’s principal operating performance against the performance of other companies without the variability created by restructuring costs designed to address cost structure inefficiencies of acquired or existing business operations.

Gain on sale and leaseback transaction

Gain on sale and leaseback transaction, includes the gain on the sale of our San Jose headquarters buildings and land. Excluding the gain on sale and leaseback transaction from our Non-GAAP measures provides investors with

 

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a basis to compare the company’s principal operating performance against the performance of other companies without the variability created by infrequent transactions that are not considered to be part of our core business.

Gain on supplier settlement

Gain on supplier settlement, represents a settlement with a supplier to resolve a business matter. Excluding gain on supplier settlement from our Non-GAAP measures provides investors with a basis to compare the company’s principal operating performance against the performance of other companies without the variability created by infrequent transactions that are not considered to be part of our core business.

Other non-cash items

Other non-cash items include non-cash amortization of debt discount and issuance costs. These items are excluded from Non-GAAP results as they are non-cash. Excluding other non-cash items from Non-GAAP measures provides investors with a basis to compare Synaptics against the performance of other companies without the variability associated with other non-cash items.

Loss on extinguishment of debt

Loss on extinguishment of debt represents a non-cash item based on the difference in the carrying value of the debt and the fair value of the debt when extinguished. Loss on extinguishment of debt is excluded from Non-GAAP results as it is non-cash. Excluding loss on extinguishment of debt from Non-GAAP measures provides investors with a basis to compare Synaptics against the performance of other companies without the variability associated with loss on extinguishment of debt.

Equity investment gain or loss

Equity investment gain represents a gain on the sale of an equity investment in a minority owned company. Equity investment loss represents an adjustment in the book value of an equity investment in a minority owned company. The equity investment loss is a non-cash item. The company excludes equity investment gain or loss from its internal operating forecasts and models when evaluating its ongoing business performance. The company believes that Non-GAAP measures reflecting adjustments for equity investment gain or loss provide investors with a basis to compare the company’s principal operating performance against the performance of other companies without the variability created by equity investment gain or loss.

Vendor settlement accruals

Vendor settlement accruals represent our estimated cost of settling vendor claims that are unusual or infrequent. As a result, the company will exclude vendor settlement accruals from its internal operating forecasts and models when evaluating its ongoing business performance. The company believes that non-GAAP measures reflecting an adjustment for vendor settlement accruals provide investors with a basis to compare the company’s principal operating performance against the performance of other companies without the variability created by unusual or infrequent vendor settlement accruals designed to address non-recurring or non-routine costs.

Non-GAAP tax adjustments

The company forecasts its long-term Non-GAAP tax rate in order to provide investors with improved long-term modeling accuracy and consistency across financial reporting periods by eliminating the effects of certain items

 

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in our Non-GAAP net income and Non-GAAP net income per share, including the type and amount of share-based compensation, the taxation of post-acquisition intercompany intellectual property cross-licensing or transfer transactions, and the impact of other acquisition items that may or may not be tax deductible. The company intends to evaluate its long-term Non-GAAP tax rate annually for significant events, including material tax law changes in the major tax jurisdictions in which the company operates, corporate organizational changes related to acquisitions or tax planning opportunities, and substantive changes in our geographic earnings mix.

Forward-Looking Statements
This press release contains forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business, and can be identified by the fact that they do not relate strictly to historical or current facts. Such forward-looking statements may include words such as “expect,” “anticipate,” “intend,” “believe,” “estimate,” “plan,” “target,” “strategy,” “continue,” “may,” “will,” “should,” variations of such words, or other words and terms of similar meaning. All forward-looking statements reflect our best judgment and are based on several factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Such factors include, but are not limited to, the risk that our business, results of operations and financial condition and prospects may be materially and adversely affected by the temporary reduction in demand for our products resulting from accumulated inventories held by our customers and channel partners; the risks as identified in the “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business” sections of our most recent Annual Report on Form 10-K and our most recent Quarterly Report on Form 10-Q; and other risks as identified from time to time in our Securities and Exchange Commission reports. Forward-looking statements are based on information available to us on the date hereof, and we do not have, and expressly disclaim, any obligation to publicly release any updates or any changes in our expectations, or any change in events, conditions, or circumstances on which any forward-looking statement is based. Our actual results and the timing of certain events could differ materially from the forward-looking statements. These forward-looking statements do not reflect the potential impact of any mergers, acquisitions, or other business combinations that had not been completed as of the date of this release.

For more information contact:
Munjal Shah

Head of Investor Relations

munjal.shah@synaptics.com

 

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SYNAPTICS INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
		June 2023				June 2022
ASSETS
Current Assets:
Cash and cash equivalents		$	924.7			$	824.0
Short-term investments			9.6				52.0
Accounts receivable, net			163.9				322.1
Inventories, net			137.2				169.7
Prepaid expenses and other current assets			36.6				35.6
Total current assets			1,272.0				1,403.4
Property and equipment at cost, net			66.4				62.9
Goodwill			816.4				806.6
Purchased intangibles, net			298.5				390.0
Non-current other assets			158.1				195.2
		$	2,611.4			$	2,858.1
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable		$	45.8			$	141.8
Accrued compensation			45.9				90.6
Income taxes payable			54.0				79.7
Other accrued liabilities			108.4				145.3
Current portion of debt			6.0				6.0
Total current liabilities			260.1				463.4
Long-term debt			972.0				975.7
Other long-term liabilities			135.9				152.6
Total liabilities			1,368.0				1,591.7
Stockholders' Equity:
Common stock and additional paid-in capital			1,009.3				924.2
Treasury stock			(878.0	)			(694.5	)
Accumulated other comprehensive income			—				(1.8	)
Retained earnings			1,112.1				1,038.5
Total stockholders' equity			1,243.4				1,266.4
		$	2,611.4			$	2,858.1

 

 

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SYNAPTICS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)
		Three Months Ended								Year Ended
		June 2023				June 2022				June 2023				June 2022
Net revenue		$	227.3			$	476.4			$	1,355.1			$	1,739.7
Acquisition related costs (1)			24.5				23.7				95.0				97.0
Cost of revenue			101.6				186.6				544.2				699.6
Gross margin			101.2				266.1				715.9				943.1
Operating expenses:
Research and development			84.5				94.1				351.2				367.3
Selling, general, and administrative			46.2				38.3				175.0				168.4
Acquired intangibles amortization (2)			8.5				9.1				35.4				38.7
Restructuring costs (3)			—				0.5				—				18.3
Total operating expenses			139.2				142.0				561.6				592.7
Operating income			(38.0	)			124.1				154.3				350.4
Interest and other expense, net			(6.3	)			(8.9	)			(28.3	)			(29.0	)
Gain on sale and leaseback transaction			—				—				—				5.4
Gain on supplier commitment			—				—				—				1.8
Loss on redemption of convertible notes			—				—				—				(8.1	)
Income before provision for income taxes and equity investment gain			(44.3	)			115.2				126.0				320.5
Provision for income taxes			(20.9	)			32.3				52.4				64.6
Equity investment gain			—				—				—				1.6
Net income (loss)		$	(23.4	)		$	82.9			$	73.6			$	257.5
Net income per share:
Basic		$	(0.59	)		$	2.09			$	1.86			$	6.60
Diluted		$	(0.59	)		$	2.04			$	1.83			$	6.33
Shares used in computing net income per share:
Basic			39.4				39.6				39.6				39.0
Diluted			39.8				40.6				40.2				40.7
(1) These acquisition related costs consist primarily of amortization of acquired intangible assets and inventory fair value adjustments associated with acquisitions.
(2)These acquisition related costs consist primarily of amortization associated with certain acquired intangible assets.
(3) Restructuring costs primarily include severance related costs and facility consolidation costs associated with operational restructurings and acquisitions.

 

 

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SYNAPTICS INCORPORATED
Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures
(In millions, except per share data)
(Unaudited)
		Three Months Ended								Year Ended
		June 2023				June 2022				June 2023				June 2022
GAAP gross margin		$	101.2			$	266.1			$	715.9			$	943.1
Acquisition related costs			24.5				23.7				95.0				97.0
Share-based compensation			1.0				1.0				4.0				4.2
Non-GAAP gross margin		$	126.7			$	290.8			$	814.9			$	1,044.3
GAAP gross margin - percentage of revenue			44.5	%			55.9	%			52.8	%			54.2	%
Acquisition related costs - percentage of revenue			10.8	%			4.9	%			7.0	%			5.6	%
Share-based compensation - percentage of revenue			0.4	%			0.2	%			0.3	%			0.2	%
Non-GAAP gross margin - percentage of revenue			55.7	%			61.0	%			60.1	%			60.0	%
GAAP research and development expense		$	84.5			$	94.1			$	351.2			$	367.3
Share-based compensation			(13.2	)			(12.3	)			(52.7	)			(69.7	)
Amortization prepaid development costs			—				(2.5	)			(5.8	)			(10.0	)
Non-GAAP research and development expense		$	71.3			$	79.3			$	292.7			$	287.6
GAAP selling, general, and administrative expense		$	46.2			$	38.3			$	175.0			$	168.4
Share-based compensation			(16.0	)			(13.4	)			(65.9	)			(59.1	)
Vendor settlement accrual			(4.0	)			—				(4.0	)			—
Acquisition/divestiture related costs			—				—				(1.8	)			(4.5	)
Non-GAAP selling, general, and administrative expense		$	26.2			$	24.9			$	103.3			$	104.8
GAAP operating income (loss)		$	(38.0	)		$	124.1			$	154.3			$	350.4
Acquisition and integration related costs			33.0				32.8				132.2				140.2
Share-based compensation			30.2				26.7				122.6				133.0
Vendor settlement accrual			4.0				—				4.0				—
Restructuring costs			—				0.5				—				18.3
Amortization prepaid development costs			—				2.5				5.8				10.0
Non-GAAP operating income		$	29.2			$	186.6			$	418.9			$	651.9
GAAP net income (loss)		$	(23.4	)		$	82.9			$	73.6			$	257.5
Acquisition and integration related costs			33.0				32.8				132.2				140.2
Share-based compensation			30.2				26.7				122.6				133.0
Restructuring costs			—				0.5				—				18.3
Amortization prepaid development costs			—				2.5				5.8				10.0
Vendor settlement accrual			4.0				—				4.0				—
Gain on supplier settlement			—				—				—				(1.8	)
Other non-cash items			0.6				0.7				2.6				3.5
Gain on sale and leaseback transaction			—				—				—				(5.4	)
Loss on extinguishment of debt			—				—				—				8.1
Equity investment gain			—				—				—				(1.6	)
Non-GAAP tax adjustments			(24.9	)			10.9				(14.4	)			(10.6	)
Non-GAAP net income		$	19.5			$	157.0			$	326.4			$	551.2
GAAP net income (loss) per share - diluted		$	(0.59	)		$	2.04			$	1.83			$	6.33
Acquisition/divestiture and integration related costs			0.84				0.81				3.29				3.44
Share-based compensation			0.77				0.66				3.05				3.27
Restructuring costs			—				0.01				—				0.45
Amortization prepaid development costs			—				0.06				0.14				0.24
Vendor settlement accrual			0.10				—				0.10				—
Gain on supplier settlement			—				—				—				(0.04	)
Other non-cash items			0.02				0.02				0.06				0.09
Gain on sale and leaseback transaction			—				—				—				(0.13	)
Loss on extinguishment of debt			—				—				—				0.20
Equity investment gain			—				—				—				(0.04	)
Non-GAAP tax adjustments			(0.64	)			0.27				(0.35	)			(0.27	)
Share adjustment			(0.01	)			—				—				—
Non-GAAP net income per share - diluted		$	0.49			$	3.87			$	8.12			$	13.54

 

 

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SYNAPTICS INCORPORATED
CONDENSED CONSOLIDATED CASH FLOWS
(In millions)
(Unaudited)
		Year Ended
		June 2023				June 2022
Net income		$	73.6			$	257.5
Non-cash operating items			290.6				224.1
Changes in working capital			(32.7	)			(18.9	)
Provided by operating activities			331.5				462.7
Acquisition and investments			(15.5	)			(501.1	)
Advance payment on intangible assets			—				(30.0	)
Net proceeds from sale of property and equity investment			—				60.9
Net proceeds from maturities and sales of short-term investments and other			44.6				18.6
Purchase of property and equipment and other			(35.1	)			(31.1	)
Used in investing activities			(6.0	)			(482.7	)
Proceeds from debt, net of issuance costs			—				588.8
Repurchases of common stock			(183.4	)			—
Payment for redemption of convertible			—				(505.6	)
Equity compensation, net			(36.9	)			(52.1	)
Payment of debt obligations			(6.0	)			(3.0	)
Refundable deposit received from (paid to) vendor, net			5.0				(13.8	)
Provided by (used in) financing activities			(221.3	)			14.3
Effect of exchange rate changes on cash and cash equivalents			(3.5	)			(6.6	)
Net change in cash and cash equivalents			100.7				(12.3	)
Cash and cash equivalents at beginning of period			824.0				836.3
Cash and cash equivalents at end of period		$	924.7			$	824.0

 

 

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