Document:

EX-4.1

 Exhibit 4.1 

TEXAS INSTRUMENTS INCORPORATED 

Officers’ Certificate 

May 4, 2017 

Reference is made to the Indenture dated as of May 23, 2011 (the “Indenture”) by and between Texas Instruments
Incorporated (the “Issuer”) and U.S. Bank National Association, as trustee (the “Trustee”). The Trustee is the trustee for any and all securities issued under the Indenture. Pursuant to Section 2.04(c) of the
Indenture, the undersigned officers do hereby certify, in connection with the issuance of $300,000,000 aggregate principal amount of 2.750% Notes due 2021 (the “Additional 2021 Notes” and, together with the Existing 2021 Notes (as
defined below), the “2021 Notes”) and $300,000,000 aggregate principal amount of 2.625% Notes due 2024 (the “2024 Notes” and, together with the Additional 2021 Notes, the “Notes”), that (i) the
form and terms of the Notes have been established pursuant to Section 2.01 and Section 2.03 of the Indenture and comply with the Indenture, and (ii) the terms of the Notes are as follows: 

Capitalized terms used but not otherwise defined herein shall have the meanings specified in the Indenture. 

The Additional 2021 Notes 
  

			
	Title:	  	2.750% Notes due 2021.
		
	Issuer:	  	Texas Instruments Incorporated.
		
	Trustee, Registrar, Transfer Agent, Authenticating Agent, and Paying Agent:	  	U.S. Bank National Association.
		
	Aggregate Principal Amount at Maturity:	  	$300,000,000. The Additional 2021 Notes offered hereby are a further issuance of and form a single series with the $250 million aggregate principal amount of the existing 2.750% Notes due 2021 issued by the Issuer on
March 12, 2014 (the “Existing 2021 Notes”). The Additional 2021 Notes offered hereby will have the same terms (other than issue date, price to public and initial interest payment date) and will vote together as a single class,
with the same CUSIP number as, and be fungible with, the Existing 2021 Notes. Upon completion of this offering, the Issuer will have $550,000,000 aggregate principal amount outstanding of 2021 Notes.

  
 1 

					
	Principal Payment Date:	  	March 12, 2021.
		
	Interest:	  	2.750% per annum.
		
	Date from which Interest will Accrue:	  	March 12, 2017.
		
	Interest Payment Dates:	  	March 12 and September 12, commencing on September 12, 2017.
		
	Redemption:	  	At any time prior to February 12, 2021 (one month prior to their maturity date) the Issuer may at its option redeem the 2021 Notes in whole or in part, at any time or from time to time prior to their maturity, on at
least 30 days, but not more than 60 days, prior notice mailed to the registered address of each holder of the 2021 Notes, at a redemption price, calculated by the Issuer, equal to the greater of:
			
		  	 (i)
	    	100% of the principal amount of the 2021 Notes being redeemed; and
			
		  	 (ii)
	    	the sum of the present values of the remaining scheduled payments of principal and interest thereon (exclusive of interest accrued as of the date of redemption) discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) of the 2021 Notes being redeemed at the Treasury Rate (as defined in the 2021 Notes) plus 12.5 basis points;
		
		  	 plus, in each case, accrued interest thereon to the date of redemption.

 
 At any time on or after February 12, 2021 (one month prior to their maturity date), the
Issuer may at its option redeem the 2021 Notes in whole or in part, at any time or from time to time prior to their maturity, on at least 30 days, but not more than 60 days, prior notice mailed to the registered holder of the 2021 Notes, at a
redemption price equal to 100% of the principal amount of the 2021 Notes being redeemed plus accrued interest thereon to the date of redemption.

  
 2 

			
	 Conversion:
	  	None.
		
	 Sinking Fund:
	  	None.
		
	 Denominations:
	  	$2,000 and multiples of $1,000 thereafter.
		
	 Miscellaneous:
	  	The terms of the Additional 2021 Notes shall include such other terms as are set forth in the form of 2021 Notes attached hereto as Exhibit A and in the Indenture.

 The 2024 Notes 
  

			
	Title:	  	2.625% Notes due 2024.
		
	Issuer:	  	Texas Instruments Incorporated.
		
	Trustee, Registrar, Transfer Agent, Authenticating Agent, and Paying Agent:	  	U.S. Bank National Association.
		
	Aggregate Principal Amount at Maturity:	  	$300,000,000.
		
	Principal Payment Date:	  	May 15, 2024.
		
	Interest:	  	2.625% per annum.
		
	Date from which Interest will Accrue:	  	May 4, 2017.
		
	Interest Payment Dates:	  	May 15 and November 15, commencing on November 15, 2017.
		
	Redemption:	  	 Prior to March 15, 2024 (the date that is two months prior to the maturity date of the 2024 Notes), the Issuer may at its option redeem
the 2024 Notes, in whole or in part at any time, or from time to time, on at least 30 days, but not more than 60 days, prior notice mailed to the registered address of each holder of the 2024 Notes, at a redemption price, calculated by the Issuer,
equal to the greater of:
  
 (i) 100% of the principal amount of the 2024 Notes to be
redeemed; and

  
 3 

			
		  	 (ii) the sum of the present values of the principal amount of such 2024 Notes and the scheduled payments of interest thereon (not
including any portion of such payments of interest accrued as of the date of redemption) from the date of redemption to March 15, 2024 (the date that is two months prior to the maturity date of the 2024 Notes), in each case discounted to the
date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined in the 2024 Notes), plus 10 basis
points;
  
 plus, in each case, accrued interest thereon to the date of redemption.

 
 At any time on or after March 15, 2024 (the date that is two months prior to the
maturity date of the 2024 Notes), the Issuer may at its option redeem the 2024 Notes, in whole or in part at any time and from time to time, on at least 30 days, but not more than 60 days, prior notice mailed to the registered address of each holder
of the 2024 Notes, at a redemption price equal to 100% of the principal amount of the 2024 Notes to be redeemed plus accrued interest thereon to the date of redemption.

		
	Conversion:	  	None.
		
	Sinking Fund:	  	None.
		
	Denominations:	  	$2,000 and multiples of $1,000 in excess thereof.
		
	Miscellaneous:	  	The terms of the 2024 Notes shall include such other terms as are set forth in the form of 2024 Notes attached hereto as Exhibit B and in the Indenture.

 Subject to the representations, warranties and covenants described in the Indenture, as amended or
supplemented from time to time, the Issuer shall be entitled, subject to authorization by the Board of Directors of the Issuer and an Officers’ Certificate, to issue additional notes from time to time under each series of notes issued hereby.
Any such additional notes of a series shall have identical terms as the 2021 Notes, or the 2024 Notes, as the case may be, issued on the issue date, other than with respect to the date of issuance and the issue price (together, the
“Additional Notes”). The Additional Notes of a series will have the same CUSIP number as the applicable series of Notes; provided that any additional notes that are not fungible with the applicable series of Notes for U.S.
federal income tax purposes will be issued under a separate CUSIP number. Any Additional Notes will be issued in accordance with Section 2.03 of the Indenture. 

  
 4 

 The undersigned officers have read and understand the provisions of the Indenture and the
definitions relating thereto. The statements made in this Officers’ Certificate are based upon the examination of the provisions of the Indenture and upon the relevant books and records of the Issuer. In the opinion of each undersigned officer,
such officer has made such examination or investigation as is necessary to enable such officer to express an informed opinion as to whether or not the covenants and conditions of such Indenture relating to the issuance and authentication of the
Notes have been complied with. In such officer’s opinion, such covenants and conditions have been complied with. 
 [Signature page
follows] 

  
 5 

 IN WITNESS WHEREOF, the undersigned officers of the Issuer have duly executed this certificate as
of the date first set forth above. 
  

					
	TEXAS INSTRUMENTS INCORPORATED
		
	By:	 	 /s/ Rafael R. Lizardi

		 	Name:	 	Rafael R. Lizardi
		 	Title:	 	 Senior Vice President and
 Chief Financial
Officer

		
	By:	 	 /s/ Alan C. Boyd

		 	Name:	 	Alan C. Boyd
		 	Title:	 	Vice President and Treasurer

  
 [Signature Page to
Officers’ Certificate Pursuant to the Indenture] 

 EXHIBIT A 

[FORM OF NOTES DUE 2021] 
 UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS A BENEFICIAL INTEREST HEREIN. 

TRANSFERS OF THIS NOTE ARE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE TRANSFER PROVISIONS OF THE INDENTURE. 

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS. 

  
 A-1 

 TEXAS INSTRUMENTS INCORPORATED 

2.750% Notes due 2021 
  

			
	No. 2	  	CUSIP No.: 882508 AY0
		  	ISIN No.: US882508AY08
		
		  	$300,000,000

 TEXAS INSTRUMENTS INCORPORATED, a Delaware corporation (the “Issuer”), for value received
promises to pay to CEDE & CO. or registered assigns the principal sum of $300,000,000 on March 12, 2021. 
 Interest Payment
Dates: March 12 and September 12 (each, an “Interest Payment Date”), commencing on September 12, 2017. 

Interest Record Dates: March 1 and September 1 (each, an “Interest Record Date”). 

Reference is made to the further provisions of this Note contained herein, which will for all purposes have the same effect as if set forth at
this place. 

  
 A-2 

 IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by facsimile by its
duly authorized officers under its corporate seal. 
  

					
	TEXAS INSTRUMENTS INCORPORATED
		
	By:	 	  

		 	Name:	 	Rafael R. Lizardi
		 	Title:	 	 Senior Vice President and
 Chief Financial
Officer

		
	By:	 	  

		 	Name:	 	Alan C. Boyd
		 	Title:	 	Vice President and Treasurer

 [Seal of Texas Instruments Incorporated] 

Attest: 
  

					
	By:	 	  

		 	Name:	 	Muriel C. McFarling
		 	Title:	 	Assistant Secretary

  
 A-3 

 This is one of the Notes of the series designated herein and referred to in the within-mentioned
Indenture. 
 Dated: May 4, 2017 
  

					
	 U.S. BANK NATIONAL ASSOCIATION,

as Trustee

		
	By:	 	  

		 	Name:	 	Mauri J. Cowen
		 	Title:	 	Vice President

  
 A-4 

 (REVERSE OF NOTE) 

TEXAS INSTRUMENTS INCORPORATED 

2.750% Notes due 2021 
  

	 	1.	Interest. 

 Texas Instruments Incorporated (the “Issuer”) promises to pay
interest on the principal amount of this Note at the rate per annum described above. Cash interest on the Notes will accrue from March 12, 2017. Interest on this Note will be paid to but excluding the relevant Interest Payment Date. The Issuer
will pay interest semi-annually in arrears on each Interest Payment Date, commencing on September 12, 2017 to the person in whose name the Note is registered at the close of business on the preceding Interest Record Date. Interest will be
computed on the basis of a 360-day year consisting of twelve 30-day months in a manner consistent with Rule 11620(b) of the FINRA Uniform Practice Code. 

The Issuer shall pay interest on overdue principal from time to time on demand at the rate borne by the Notes and on overdue installments of
interest (without regard to any applicable grace periods) to the extent lawful. 
  

	 	2.	Paying Agent. 

 Initially, U.S. Bank National Association (the “Trustee”) will
act as paying agent. The Issuer may change any paying agent without notice to the Holders. 
  

	 	3.	Indenture; Defined Terms. 

 This Note is one of the 2.750% Notes due 2021 (the
“Notes”) issued under an indenture dated as of May 23, 2011 (the “Base Indenture”) by and between the Issuer and the Trustee, and established pursuant to an Officers’ Certificate dated May 4, 2017,
issued pursuant to Section 2.01 and Section 2.03 thereof (together, the “Indenture”). This Note is a “Security” and the Notes are “Securities” under the Indenture. 

For purposes of this Note, unless otherwise defined herein, capitalized terms herein are used as defined in the Indenture. The terms of the
Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) (the “TIA”) as in effect on the date on which the Indenture was
qualified under the TIA. Notwithstanding anything to the contrary herein, the Notes are subject to all such terms, and Holders of Notes are referred to the Indenture and the TIA for a statement of them. To the extent the terms of the Indenture and
this Note are inconsistent, the terms of the Indenture shall govern. 

  
 A-5 

	 	4.	Denominations; Transfer; Exchange. 

 The Notes are in registered form, without coupons, in
denominations of $2,000 and multiples of $1,000 thereafter. A Holder shall register the transfer or exchange of Notes in accordance with the Indenture. The Issuer may require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay certain transfer taxes or similar governmental charges payable in connection therewith as permitted by the Indenture. The Issuer need not issue, authenticate, register the transfer of or exchange any Notes or portions
thereof for a period of fifteen (15) days before the mailing of a notice of redemption, nor need the Issuer register the transfer or exchange of any Note selected for redemption in whole or in part. 

 

	 	5.	Amendment; Supplement; Waiver. 

 Subject to certain exceptions, the Notes and the provisions of
the Indenture relating to the Notes may be amended or supplemented and any existing default or Event of Default or compliance with certain provisions may be waived with the written consent of the Holders of at least a majority in aggregate principal
amount of all series of Outstanding Securities (including the Notes) under the Indenture that are affected by such amendment, supplement or waiver (voting together as a single class). Without notice to or consent of any Holder, the parties thereto
may amend or supplement the Indenture and the Notes to, among other things, cure any ambiguity, omission, defect or inconsistency or comply with any requirements of the Commission in connection with the qualification of the Indenture under the TIA,
or make any other change that does not adversely affect the rights of any Holder of a Note in any material respect. 
  

	 	6.	Redemption. 

 (a) At any time before February 12, 2021, the Issuer may at its option redeem
any of the Notes in whole or in part at any time, each at a redemption price calculated by the Issuer equal to the greater of: 

(i)    100% of the principal amount of the Notes to be redeemed; and 

(ii)    the sum of the present values of the remaining scheduled payments of principal and interest thereon (not including
any portion of such payments of interest accrued as of the date of redemption), discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below) plus 12.5 basis points, 
 plus in each case accrued interest
thereon to the date of redemption. 
 (b) At any time on or after February 12, 2021, the Issuer may at its option redeem any of the
Notes in whole or in part at any time, each at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus accrued interest thereon to the date of redemption. 

  
 A-6 

 Notwithstanding the foregoing, installments of interest on Notes that are due and payable on
interest payment dates falling on or prior to a redemption date will be payable on the interest payment date to the registered Holders as of the close of business on the relevant record date according to the Notes and the Indenture. 

“Comparable Treasury Issue” means the United States Treasury security selected by the Quotation Agent as having a maturity
comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Notes. 
 “Comparable Treasury Price” means, with respect to any redemption date, (i) the
average of three Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Quotation Agent obtains fewer than three such Reference Treasury
Dealer Quotations, the average of all such quotations, or (iii) if only one Reference Treasury Dealer Quotation is received, such quotation. 

“Quotation Agent” means the Reference Treasury Dealer appointed by the Issuer. 

“Reference Treasury Dealer” means (i) Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Mizuho Securities USA Inc. (or their respective affiliates that are Primary Treasury Dealers) and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government
securities dealer in New York City (a “Primary Treasury Dealer”), the Issuer will substitute therefor another Primary Treasury Dealer, and (ii) any other Primary Treasury Dealer selected by the Issuer. 

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the
average, as determined by the Quotation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Quotation Agent by such Reference Treasury Dealer
at 5:00 p.m., New York City time, on the third business day preceding such redemption date. 
 “Treasury Rate” means, with
respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal
to the Comparable Treasury Price for such redemption date. 
 Notice of any redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each Holder of the Notes to be redeemed. Unless the Issuer defaults in payment of the redemption price, on and after the 

  
 A-7 

 
redemption date, interest will cease to accrue on the Notes or portions thereof called for redemption. If less than all of the Notes are to be redeemed, the Notes to be redeemed shall be selected
by lot by the Depositary, in the case of Notes represented by a Global Note, or by the Trustee by a method the Trustee deems to be fair and appropriate, in the case of Notes that are not represented by a Global Note. 

 

	 	7.	Defaults and Remedies. 

 If an Event of Default (other than certain bankruptcy Events of Default
with respect to the Issuer) under the Indenture occurs with respect to the Notes and is continuing, then the Trustee may and, at the direction of the Holders of at least 25% in principal amount of the outstanding Notes, shall by written notice,
require the Issuer to repay immediately the entire principal amount of the Outstanding Notes, together with all accrued and unpaid interest and premium, if any. If a bankruptcy Event of Default with respect to the Issuer occurs and is continuing,
then the entire principal amount of the Outstanding Notes will automatically become due immediately and payable without any declaration or other act on the part of the Trustee or any Holder. Holders of Notes may not enforce the Indenture or the
Notes except as provided in the Indenture. The Trustee is not obligated to enforce the Indenture or the Notes unless it has received indemnity as it reasonably requires. The Indenture permits, subject to certain limitations therein provided, Holders
of a majority in aggregate principal amount of the Notes then outstanding to direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of Notes notice of certain continuing defaults or Events of Default if it
determines that withholding notice is in their interest. 
  

	 	8.	Authentication. 

 This Note shall not be valid until the Trustee manually signs the certificate
of authentication on this Note. 
  

	 	9.	Abbreviations and Defined Terms. 

 Customary abbreviations may be used in the name of a Holder
of a Note or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act). 
  

	 	10.	CUSIP Numbers. 

 Pursuant to a recommendation promulgated by the Committee on Uniform Security
Identification Procedures, the Issuer has caused CUSIP numbers to be printed on the Notes as a convenience to the Holders of the Notes. No representation is made as to the accuracy of such numbers as printed on the Notes and reliance may be placed
only on the other identification numbers printed hereon. 

  
 A-8 

	 	11.	Governing Law. 

 The laws of the State of New York shall govern the Indenture and this Note
thereof. 

  
 A-9 

 ASSIGNMENT FORM 

To assign this Note, fill in the form below: 
 I or we assign
and transfer this Note to 
 (Print or type assignee’s name, address and zip code) 

(Insert assignee’s soc. sec. or tax I.D. No.) 

and irrevocably appoint                      agent to
transfer this Note on the books of the Issuer. The agent may substitute another to act for him. 
  

	
	  
  

Date:
                     Your Signature:
                                         
                   

  
  

Sign exactly as your name appears on the other side of this Note. 
  

							
		 		 		 	  
 Signature

				
	Signature Guarantee:	 		 		 	
				
	  
 Signature must be
guaranteed
	 		 		 	  
 Signature

 Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the
Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to,
or in substitution for, STAMP, all in accordance with the United States Securities Exchange Act of 1934, as amended. 

  
 A-10 

 SCHEDULE OF EXCHANGES OF NOTES 

The following exchanges of a part of this Global Note for Physical Notes or a part of another Global Note have been made: 

 

									
	 Date of Exchange
	 	
Amount of decrease
in principal amount
of this Global Note
	 	
Amount of increase
in principal amount
of this Global Note
	  	
Principal amount of
this Global Note
following such
decrease (or

increase)
	  	
Signature of
authorized officer of
Trustee

		 		 		  		  	
		 		 		  		  	

  
 A-11 

 EXHIBIT B 

[FORM OF NOTES DUE 2024] 
 UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS A BENEFICIAL INTEREST HEREIN. 

TRANSFERS OF THIS NOTE ARE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE TRANSFER PROVISIONS OF THE INDENTURE. 

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS. 

  
 B-1 

 TEXAS INSTRUMENTS INCORPORATED 

2.625% Notes due 2024 
  

			
	No. 1	  	  CUSIP No.: 882508 BB9
		  	ISIN   No.: US882508BB95
		
		  	                      $300,000,000

 TEXAS INSTRUMENTS INCORPORATED, a Delaware corporation (the “Issuer”), for value received
promises to pay to CEDE & CO. or registered assigns the principal sum of $300,000,000 on May 15, 2024. 
 Interest Payment
Dates: May 15 and November 15 (each, an “Interest Payment Date”), commencing on November 15, 2017. 

Interest Record Dates: May 1 and November 1 (each, an “Interest Record Date”). 

Reference is made to the further provisions of this Note contained herein, which will for all purposes have the same effect as if set forth at
this place. 

  
 B-2 

 IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by facsimile by its
duly authorized officers under its corporate seal. 
  

					
	TEXAS INSTRUMENTS INCORPORATED
		
	By:	 	  

		 	Name:	 	Rafael R. Lizardi
		 	Title:	 	 Senior Vice President and
 Chief Financial
Officer

		
	By:	 	  

		 	Name:	 	Alan C. Boyd
		 	Title:	 	Vice President and Treasurer

 [Seal of Texas Instruments Incorporated] 

Attest: 
  

					
	By:	 	  

		 	Name:	 	Muriel C. McFarling
		 	Title:	 	Assistant Secretary

  
 B-3 

 This is one of the Notes of the series designated herein and referred to in the within-mentioned
Indenture. 
 Dated: May 4, 2017 
  

					
	U.S. BANK NATIONAL ASSOCIATION, as Trustee
		
	By:	 	  

		 	Name:	 	Mauri J. Cowen
		 	Title:	 	Vice President

  
 B-4 

 (REVERSE OF NOTE) 

TEXAS INSTRUMENTS INCORPORATED 

2.625% Notes due 2024 
  

	 	1.	Interest. 

 Texas Instruments Incorporated (the “Issuer”) promises to pay
interest on the principal amount of this Note at the rate per annum described above. Cash interest on the Notes will accrue from the most recent date to which interest has been paid; or, if no interest has been paid, from May 4, 2017. Interest
on this Note will be paid to but excluding the relevant Interest Payment Date. The Issuer will pay interest semi-annually in arrears on each Interest Payment Date, commencing on November 15, 2017 to the person in whose name the Note is
registered at the close of business on the preceding Interest Record Date. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months in
a manner consistent with Rule 11620(b) of the FINRA Uniform Practice Code. 
 The Issuer shall pay interest on overdue principal from time
to time on demand at the rate borne by the Notes and on overdue installments of interest (without regard to any applicable grace periods) to the extent lawful. 
  

	 	2.	Paying Agent. 

 Initially, U.S. Bank National Association (the “Trustee”) will
act as paying agent. The Issuer may change any paying agent without notice to the holders (the “Holders”). 
  

	 	3.	Indenture; Defined Terms. 

 This Note is one of the 2.625% Notes due 2024 (the
“Notes”) issued under an indenture dated as of May 23, 2011 (the “Base Indenture”) by and between the Issuer and the Trustee, and established pursuant to an Officers’ Certificate dated May 4, 2017,
issued pursuant to Section 2.01 and Section 2.03 thereof (together, the “Indenture”). This Note is a “Security” and the Notes are “Securities” under the Indenture. 

For purposes of this Note, unless otherwise defined herein, capitalized terms herein are used as defined in the Indenture. The terms of the
Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) (the “TIA”) as in effect on the date on which the Indenture was
qualified under the TIA. Notwithstanding anything to the contrary herein, the Notes are subject to all such terms, and Holders of Notes are referred to the Indenture and the TIA for a statement of them. To the extent the terms of the Indenture and
this Note are inconsistent, the terms of the Indenture shall govern. 

  
 B-5 

	 	4.	Denominations; Transfer; Exchange. 

 The Notes are in registered form, without coupons, in
denominations of $2,000 and multiples of $1,000 in excess thereof. A Holder shall register the transfer or exchange of Notes in accordance with the Indenture. The Issuer may require a Holder, among other things, to furnish appropriate endorsements
and transfer documents and to pay certain transfer taxes or similar governmental charges payable in connection therewith as permitted by the Indenture. The Issuer need not issue, authenticate, register the transfer of or exchange any Notes or
portions thereof for a period of fifteen (15) days before the mailing of a notice of redemption, nor need the Issuer register the transfer or exchange of any Note selected for redemption in whole or in part. 

 

	 	5.	Amendment; Supplement; Waiver. 

 Subject to certain exceptions, the Notes and the provisions of
the Indenture relating to the Notes may be amended or supplemented and any existing default or Event of Default or compliance with certain provisions may be waived with the written consent of the Holders of at least a majority in aggregate principal
amount of all series of Outstanding Securities (including the Notes) under the Indenture that are affected by such amendment, supplement or waiver (voting together as a single class). Without notice to or consent of any Holder, the parties thereto
may amend or supplement the Indenture and the Notes to, among other things, cure any ambiguity, omission, defect or inconsistency or comply with any requirements of the Commission in connection with the qualification of the Indenture under the TIA,
or make any other change that does not adversely affect the rights of any Holder of a Note in any material respect. 
  

	 	6.	Redemption. 

 (a) Prior to March 15, 2024 (the date that is two months prior to the
maturity date of the Notes), the Issuer may at its option redeem the Notes, in whole or in part at any time, or from time to time, on at least 30 days but not more than 60 days prior notice, at a redemption price calculated by the Issuer equal to
the greater of: 
 (i)    100% of the principal amount of the Notes to be redeemed; and 

(ii)    the sum of the present values of the principal amount of such Notes and the scheduled payments of interest thereon
(not including any portion of such payments of interest accrued as of the date of redemption) from the date of redemption to March 15, 2024 (the date that is two months prior to the maturity date of the Notes), in each case discounted to the
date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below), plus 10 basis points,

 plus in each case accrued interest thereon to the date of redemption. 

(b) At any time on or after March 15, 2024 (the date that is two months prior to the maturity date of the Notes), the Issuer may at its
option redeem the Notes, in whole or in part at any time and from time to time, on at least 30 days but not more than 60 days prior notice, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus accrued interest
thereon to the date of redemption. 

  
 B-6 

 Notwithstanding the foregoing, installments of interest on Notes that are due and payable on
interest payment dates falling on or prior to a redemption date will be payable on the interest payment date to the registered Holders as of the close of business on the relevant record date according to the Notes and the Indenture. 

“Comparable Treasury Issue” means the United States Treasury security selected by the Quotation Agent as having a maturity
comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Notes. 
 “Comparable Treasury Price” means, with respect to any redemption date, (i) the
average of three Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Quotation Agent obtains fewer than three such Reference Treasury
Dealer Quotations, the average of all such quotations, or (iii) if only one Reference Treasury Dealer Quotation is received, such quotation. 

“Quotation Agent” means the Reference Treasury Dealer appointed by the Issuer. 

“Reference Treasury Dealer” means (i) Citigroup Global Markets Inc. and Morgan Stanley & Co. LLC (or their
respective affiliates that are Primary Treasury Dealers) and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a “Primary Treasury
Dealer”), the Issuer will substitute therefor another Primary Treasury Dealer, and (ii) any other Primary Treasury Dealer selected by the Issuer. 

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the
average, as determined by the Quotation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Quotation Agent by such Reference Treasury Dealer
at 5:00 p.m., New York City time, on the third business day preceding such redemption date. 
 “Treasury Rate” means, with
respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal
to the Comparable Treasury Price for such redemption date. 
 Notice of any redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each Holder of the Notes to be redeemed. Unless the Issuer defaults in payment of the redemption price, on and after the redemption date, interest will cease to accrue on the Notes or portions thereof called for
redemption. If less than all of the Notes are to be redeemed, the Notes to be redeemed shall be selected by lot by the Depositary, in the case of Notes represented by a Global Note, or by the Trustee by a method the Trustee deems to be fair and
appropriate, in the case of Notes that are not represented by a Global Note. 

  
 B-7 

	 	7.	Defaults and Remedies. 

 If an Event of Default (other than certain bankruptcy Events of Default
with respect to the Issuer) under the Indenture occurs with respect to the Notes and is continuing, then the Trustee may and, at the direction of the Holders of at least 25% in principal amount of the outstanding Notes, shall by written notice,
require the Issuer to repay immediately the entire principal amount of the Outstanding Notes, together with all accrued and unpaid interest and premium, if any. If a bankruptcy Event of Default with respect to the Issuer occurs and is continuing,
then the entire principal amount of the Outstanding Notes will automatically become due immediately and payable without any declaration or other act on the part of the Trustee or any Holder. Holders of Notes may not enforce the Indenture or the
Notes except as provided in the Indenture. The Trustee is not obligated to enforce the Indenture or the Notes unless it has received indemnity as it reasonably requires. The Indenture permits, subject to certain limitations therein provided, Holders
of a majority in aggregate principal amount of the Notes then outstanding to direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of Notes notice of certain continuing defaults or Events of Default if it
determines that withholding notice is in their interest. 
  

	 	8.	Authentication. 

 This Note shall not be valid until the Trustee manually signs the certificate
of authentication on this Note. 
  

	 	9.	Abbreviations and Defined Terms. 

 Customary abbreviations may be used in the name of a Holder
of a Note or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act). 
  

	 	10.	CUSIP Numbers. 

 Pursuant to a recommendation promulgated by the Committee on Uniform Security
Identification Procedures, the Issuer has caused CUSIP numbers to be printed on the Notes as a convenience to the Holders of the Notes. No representation is made as to the accuracy of such numbers as printed on the Notes and reliance may be placed
only on the other identification numbers printed hereon. 
  

	 	11.	Governing Law. 

 The laws of the State of New York shall govern the Indenture and this Note
thereof. 

  
 B-8 

 
ASSIGNMENT FORM 
 To assign this Note, fill in the form below: 

I or we assign and transfer this Note to 

(Print or type assignee’s name, address and zip code) 

(Insert assignee’s soc. sec. or tax I.D. No.) 

and irrevocably appoint                      agent to
transfer this Note on the books of the Issuer. The agent may substitute another to act for him. 
  

 
 Date:
                         Your Signature:
                                         
                    
  

 
 Sign exactly as your name appears on the other side of
this Note. 
  

					
		 		 	  
 Signature

			
	Signature Guarantee:	 		 	
			
	  
 Signature must be
guaranteed
	 		 	  
 Signature

 Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the
Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to,
or in substitution for, STAMP, all in accordance with the United States Securities Exchange Act of 1934, as amended. 

  
 B-9 

 SCHEDULE OF EXCHANGES OF NOTES 

The following exchanges of a part of this Global Note for Physical Notes or a part of another Global Note have been made: 

 

									
	 Date of Exchange
	 	
Amount of decrease in
principal amount of 
this
Global Note
	 	
Amount of increase in
principal amount of 
this
Global Note
	  	
Principal amount of this
Global Note following
such 
decrease (or
increase)
	  	
Signature of authorized
officer of Trustee

		 		 		  		  	
		 		 		  		  	

  
 B-10ex10-1.htm

Exhibit 10.1

 

FIRST AMENDMENT TO LOAN AND PLEDGE AGREEMENT

 

This FIRST AMENDMENT TO LOAN AND PLEDGE AGREEMENT (this “Amendment”) is dated as of March 17, 2017 (“First Amendment Date”) by and between (i) ENERGY RECOVERY, INC., a Delaware corporation (“Borrower”), and (ii) CITIBANK, N.A., a national banking association (“Citibank” or “Lender”).

 

RECITALS

 

A.     Pursuant to that certain Loan and Pledge Agreement dated as of January 27, 2017, by and between Lender and Borrower (the “Loan Agreement”), Lender made available to Borrower a committed revolving line of credit in the amount of Sixteen Million Dollars ($16,000,000) and an uncommitted revolving line of credit in the amount of Four Million Dollars ($4,000,000). All capitalized terms used herein and not otherwise defined shall have the meanings given to such terms in the Loan Agreement.

 

B.     Borrower has requested, and Lender has agreed, to (i) increase the amount of permitted indebtedness allowable for the issuance of cash secured letters of credit from Four Million One Hundred Thousand Dollars ($4,100,000) to Five Million One Hundred Thousand Dollars ($5,100,000), and (ii) modify the Revolving Credit Loan to add a Prime Rate option, in each case subject to the terms and conditions set forth herein below. 

 

AGREEMENT

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree to amend the Loan Documents as follows:

 

1.     Modification of Loan Agreement. The Loan Agreement is hereby modified as provided below.

 

(a)     Section 1.1 of the Loan Agreement is amended by adding the following definitions in their appropriate alphabetical order:

 

“Base Rate Advance” means an Advance that bears interest as provided in Section 4.1(a).

 

“Convert,” “Conversion” and “Converted” each refers to conversion of Advances of one Type into Advances of another Type pursuant to Section 2.2(c).

 

“LIBOR Rate Advance” means an Advance that bears interest as provided in Section 4.1(b).

 

“Notice of Continuation/Conversion” has the meaning specified in Section 2.2(b). 

 

(b)     Section 1.1 of the Loan Agreement is further amended by amending and restating the following definitions as follows:

 

“Advance” means a Base Rate Advance or a LIBOR Rate Advance of funds made by Lender to Borrower under the Revolving Credit Loan.

 

-1-

 

 

“Interest Period” means the period commencing on the date of a Borrowing or a Continuation of a LIBOR Rate Advance and ending one (1), two (2), three (3) or six (6) months thereafter as selected by Borrower; provided, however, that (i) Borrower may not select any Interest Period that ends after the Termination Date; (ii) whenever the last day of an Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, except that, if such extension would cause the last day of such Interest Period to occur in the next following calendar month, then the last day of such Interest Period shall occur on the next preceding Business Day; and (iii) if there is no corresponding date of the month that is one (1), two (2), three (3) or six (6) months, as the case may be, after the first day of an Interest Period, such Interest Period shall end on the last Business Day of such first, second, third or sixth month, as the case may be.

 

“Type” means a Base Rate Advance or a LIBOR Rate Advance.

 

(c)     Section 1.1 of the Loan Agreement is further amended by deleting the definition of “Adjusted Base Rate” appearing therein.

 

(d)     Section 2.2 of the Loan Agreement is amended and restated as follows:

 

“(a)     Each Advance under the Revolving Credit Loan (each, a ‘Borrowing’) shall be made on notice, given not later than 12:00 Noon (New York time) on the third Business Day prior to the date of the proposed Borrowing in the case of a LIBOR Rate Advance, and not later than 12:00 Noon (New York time) on the date of the proposed Borrowing in the case of a Base Rate Advance, by Borrower to Lender. Unless otherwise agreed in writing by Lender, each such notice of a Borrowing shall be by telephone, confirmed immediately in writing (by telecopier, e-mail or otherwise as permitted hereunder), substantially in the form of Exhibit C (a ‘Notice of Borrowing’), specifying therein the requested (i) date of such Borrowing, (ii) Type of Advance comprising such Borrowing, (iii) aggregate principal amount of such Borrowing, and (iv) the Interest Period, in the case of a LIBOR Rate Advance. Each Borrowing (including any Conversion or Continuation) shall be in an amount equal to One Million Dollars ($1,000,000) or a whole multiple of Five Hundred Thousand Dollars ($500,000) in excess thereof.

 

-2-

 

 

(b)     With respect to any Borrowing consisting of a LIBOR Rate Advance, Borrower may, subject to the provisions of Section 2.2(d) and so long as all the conditions set forth in Article V have been fulfilled, elect to maintain such Borrowing or any portion thereof as a LIBOR Rate Advance by selecting a new Interest Period for such Borrowing, which new Interest Period shall commence on the last day of the Interest Period then ending. Each selection of a new Interest Period (a ‘Continuation’) shall be made by notice given not later than 12:00 Noon (New York time) on the third Business Day prior to the date of any such Continuation by Borrower to Lender. Unless otherwise agreed in writing by Lender, such notice by Borrower of a Continuation shall be by telephone, confirmed immediately in writing (by telecopier, e-mail or otherwise as permitted hereunder), substantially in the form of Exhibit C-I (a ‘Notice of Continuation/Conversion’), specifying whether the Advance subject to the requested Continuation comprises part (or all) of the Revolving Credit Loan and the requested (i) date of such Continuation, (ii) Interest Period and (iii) aggregate amount of the Advance subject to such Continuation, which shall comply with all limitations on the Advances hereunder. Unless, on or before 12:00 Noon (New York time) of the third Business Day prior to the expiration of an Interest Period, Lender shall have received a Notice of Continuation/Conversion from Borrower for the entire Borrowing consisting of the LIBOR Rate Advance outstanding during such Interest Period, any amount of such Advance comprising such Borrowing remaining outstanding at the end of such Interest Period (or any unpaid portion of such Advance not covered by a timely Notice of Continuation/Conversion) shall, upon the expiration of such Interest Period, be Converted to a Base Rate Advance.

 

(c)     Borrower may on any Business Day upon giving a Notice of Continuation/Conversion to Lender, and subject to the provisions of Section 2.4(d), Convert the entire amount of or a portion of an Advance of one Type into an Advance of another Type; provided, however, that any Conversion of a LIBOR Rate Advance into a Base Rate Advance shall be made on, and only on, the last day of an Interest Period for such LIBOR Rate Advance. Each such Notice of Conversion shall be given not later than 12:00 Noon (New York time) on the Business Day prior to the date of any proposed Conversion into a Base Rate Advance and on the third Business Day prior to the date of any proposed Conversion into a LIBOR Rate Advance. Subject to the restrictions specified above, each Notice of Continuation/Conversion shall be by telephone, confirmed immediately in writing (by telecopier or otherwise as permitted hereunder), specifying (i) the requested date of such Conversion, (ii) the Type of Advance to be Converted, (iii) the requested Interest Period, in the case of a Conversion into a LIBOR Rate Advance, and (iv) the amount of such Advance to be Converted. 

 

(d)     Anything in subsection (b) or (c) above to the contrary notwithstanding,

 

(i)     if, at least one (1) Business Day before the date of any requested LIBOR Rate Advance, the introduction of or any change in or in the interpretation of any law or regulation makes it unlawful, or any central bank or other Governmental Authority asserts that it is unlawful, for Lender or any of its Affiliates to perform its obligations hereunder to make a LIBOR Rate Advance or to fund or maintain a LIBOR Rate Advance hereunder (including in the case of a Continuation or a Conversion), Lender shall promptly give written notice of such circumstance to Borrower, and the right of Borrower to select a LIBOR Rate Advance for such Borrowing or any subsequent Borrowing (including a Continuation or a Conversion) shall be suspended until the circumstances causing such suspension no longer exist, and any Advance comprising such requested Borrowing shall be a Base Rate Advance;

 

-3-

 

 

(ii)     if, at least one (1) Business Day before the first day of any Interest Period, Lender is unable to determine the LIBOR Rate for LIBOR Rate Advances comprising any requested Borrowing, Continuation or Conversion, Lender shall promptly give written notice of such circumstance to Borrower, and the right of Borrower to select or maintain LIBOR Rate Advances for such Borrowing or any subsequent Borrowing shall be suspended until Lender shall notify Borrower that the circumstances causing such suspension no longer exist, and any Advance comprising such Borrowing shall be a Base Rate Advance;

 

(iii)     if Lender shall, at least one (1) Business Day before the date of any requested Borrowing or Continuation of, or Conversion into, a LIBOR Rate Advance, notify Borrower that the LIBOR Rate for Advances comprising such Borrowing, Continuation or Conversion will not adequately reflect the cost to Lender of making or funding Advances for such Borrowing, the right of Borrower to select LIBOR Rate Advances shall be suspended until Lender shall notify Borrower that the circumstances causing such suspension no longer exist, and any Advance comprising such Borrowing shall be a Base Rate Advance;

 

(e)     Each Notice of Borrowing, Notice of Continuation and Notice of Conversion shall be irrevocable and binding on Borrower. Borrower agrees to indemnify Lender against any loss, cost or expense incurred by Lender as a result of (i) default by Borrower in making a Borrowing of, Conversion into or Continuation of a LIBOR Rate Advance after Borrower has given notice requesting the same, (ii) default by Borrower in payment when due of the principal amount of or interest on any LIBOR Rate Advance or (iii) the making of a payment or prepayment of a LIBOR Rate Advance on a day which is not the last day of an Interest Period with respect thereto, including, without limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by Lender to fund such Advance.

 

(f)      Promptly after its receipt of a Notice of Borrowing, and subject to all other terms and conditions hereof, Lender shall make the amount of such requested Borrowing available to Borrower in same day funds, on the Borrowing Date requested by Borrower by wire transferring to the Borrower’s Loan Account the amount thereof on the requested Borrowing Date.”

 

(e)     Section 2.3(b) of the Loan Agreement is amended and restated as follows:

 

“(b)     Borrower may, at any time and from time to time, prepay any outstanding Advances, in whole or in part, upon at least two (2) days’ irrevocable written notice by Borrower to Lender, specifying the date and amount of prepayment, provided that to the extent any LIBOR Rate Advances are optionally prepaid on a date that is not the last day of any Interest Period with respect thereto, such prepayment shall be accompanied by any amounts due pursuant to Section 2.2(e). If such notice is given, Borrower shall make such prepayment, and the payment amount specified in such notice shall be due and payable, on the date specified therein accompanied by the amount of accrued and unpaid interest thereon.”

 

-4-

 

 

(f)     Section 4.1 of the Loan Agreement is amended and restated as follows:

 

“SECTION 4.1     Interest. Borrower shall pay to Lender interest on the Advances, payable monthly in arrears on the first day of each month, commencing with the month immediately following the Closing Date, and on the Termination Date, at the following rates per annum:

 

(a)     Base Rate Advances. If such Advance is a Base Rate Advance, at a fluctuating rate which is equal to the Base Rate then in effect, each change in such fluctuating rate to take effect simultaneously with the corresponding change in the Base Rate. 

 

(b)     LIBOR Rate Advances. If such Advance is a LIBOR Rate Advance, at a rate which is equal at all times during the Interest Period for such LIBOR Rate Advance to (i) the LIBOR Rate for the Interest Period selected by Borrower corresponding to such LIBOR Rate Advances, plus (ii) the Margin.”

 

(g)     Section 7.2(e)(iv) of the Loan Agreement is amended and restated as follows:

 

“(iv)     obligations pursuant to cash secured letters of credit (exclusive of the Letters of Credit provided hereunder) not to exceed $5,100,000; and”

 

(h)     All references in the Loan Agreement to “Notice of Continuation” shall mean and refer to “Notice of Continuation/Conversion.”

 

(i)     Schedule I to Exhibit B to the Loan Agreement is hereby added to the Loan Agreement in the form of Schedule I attached hereto.

 

2.     Ratification of Loan Documents and Collateral. Borrower hereby ratifies and affirms each of the Loan Documents, as amended hereby, and agrees to perform each obligation set forth in each of the Loan Documents, as amended hereby. Except as specifically modified and amended herein, all terms, warranties, representations, conditions and covenants contained in the Loan Agreement and the other Loan Documents shall remain in full force and effect. Any property or rights to or interests in property granted as security in the Loan Documents shall remain as security for the Obligations. The terms of this Amendment are not intended to and do not serve as a novation as to the Loan Agreement or the indebtedness evidenced thereby. It is the express intention to affirm the Loan Agreement and the security thereby and any property or rights to or interests in property granted as security in the Loan Documents shall remain as security for all Obligations.

 

-5-

 

 

3.     Borrower Representations and Warranties. Borrower represents and warrants to Lender as of the First Amendment Date that:

 

(a)     The representations, warranties, certifications and agreements contained in the Loan Documents are true, complete and accurate in all material respects as of the date hereof; provided, however, that those representations and warranties expressly referring to a specified date shall have been true, correct and complete in all material respects as of such date.

 

(b)     No Default or Event of Default currently exists under the Loan Documents and Borrower has no knowledge of any event which with the giving of notice, the passage of time or both would constitute a Default or an Event of Default under the Loan Documents.

 

(c)     As of the date hereof, Borrower does not have any claim against Lender and no offset or defense to the payment or performance of the Obligations or any counterclaim or right to rescission to enforcement of any of the terms of the Loan Documents. 

 

(d)     No voluntary actions or, to Borrower’s knowledge, involuntary actions are pending against Borrower under the bankruptcy or insolvency laws of the United States or any state thereof.

 

(e)     Borrower’s execution, delivery and performance of this Amendment will not violate or conflict with any laws, rules, regulations or orders of any Governmental Authority applicable to Borrower, or violate or conflict with, result in a breach of, or constitute a default (with due notice or lapse of time or both) under any material contract or organizational documents of Borrower. 

 

(f)     Borrower has the requisite corporate power and authority to enter into, to deliver and to perform this Amendment and Borrower has all material permits, licenses, consents and agreements of all Persons necessary or required for the Borrower to execute and deliver this Amendment and perform its obligations under this Amendment.

 

(g)     The Loan Documents, as any of the same have been modified, amended and restated (including, without limitation, pursuant to this Amendment), are the valid and legally binding obligation of Borrower subject only to bankruptcy, insolvency, reorganization, moratorium, or similar laws at the time in effect affecting the enforceability or rights of creditors generally and by general equitable principles which may limit the right to obtain equitable remedies. 

 

4.     Covenants of Borrower. Borrower covenants to Lender as follows:

 

(a)     Borrower shall cause to be executed, delivered and performed such additional agreements, documents and instruments as may from time to time be reasonably required by Lender to effectuate the intent of this Amendment.

 

(b)     In consideration of the willingness of Lender to enter into this Amendment, Borrower fully, finally and forever releases and discharges Lender, together with its respective successors, assigns, directors, officers, employees, agents and representatives, from any and all actions, causes of action, claims, debts, demands, liabilities, obligations and suits, of whatever kind or nature, in law or in equity (collectively, the “Claims” and each individually, a “Claim”), that Borrower has or in the future may have, whether known or unknown, but only with respect to those Claims for which both of the following are true: (i) the Claim is in respect to the Revolving Credit Loan, the Loan Documents or the actions or omissions of Lender in respect to the Revolving Credit Loan or the Loan Documents, and (ii) the Claim arises from events occurring prior to or on the First Amendment Date. It is the intention of Borrower that the above release shall be effective as a full and final release of each and every matter specifically and generally referred to above. 

 

-6-

 

 

5.     Costs and Expenses. Borrower agrees to promptly pay all reasonable out-of-pocket fees, charges, costs and expenses (including reasonable attorneys’ fees and expenses) incurred by Lender in connection with this Amendment and the matters contemplated herein in connection with the negotiation, preparation, execution and delivery of this Amendment and all related documents. 

 

6.     Conditions Precedent. The effectiveness of this Amendment is subject to: (a) the receipt by Lender of this Amendment, duly executed and delivered by Borrower; and (b) the receipt by Lender of payment of all reasonable costs and expenses of Lender in connection with this Amendment pursuant to Section 5 hereof.

 

7.     Miscellaneous.

 

(a)     The Loan Documents as modified herein contain the entire understanding and agreement of Borrower and Lender with respect to the subject matter hereof and supersede all prior representations, warranties, agreements, arrangements and understandings. Except for actions expressly permitted to be taken by Lender as specifically set forth in the Loan Agreement or in any other Loan Document, no amendment, modification, termination or waiver of any provision of the Loan Documents as modified herein, or any consent to any departure by Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by Borrower and Lender. 

 

(b)     All references in the Loan Documents to the Loan Agreement shall mean the Loan Agreement as hereby modified and amended. This Amendment shall also constitute a Loan Document and all terms and conditions of the Loan Agreement (as modified herein) including, without limitation, events of default and the miscellaneous provisions set forth therein (including, without limitation, consent to jurisdiction, applicable law and waiver of jury) are incorporated herein as though set forth in full and Lender shall be entitled to the benefits thereof with respect to this Amendment. 

 

(c)     This Amendment may be executed in any number of counterparts, including by facsimile, .pdf or other electronic signature, with the same effect as if all parties hereto had signed the same document. All such counterparts shall be construed together and shall constitute one instrument, but in making proof hereof it shall only be necessary to produce one such counterpart.

 

[SIGNATURE PAGE FOLLOWS]

 

-7-

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to Loan and Pledge Agreement to be executed by their proper and duly authorized officers as of the date first set forth above.

 

	 	
			BORROWER:

			 

			ENERGY RECOVERY, INC.,

			a Delaware corporation

			 

			 

			By:       /s/Chris Gannon                                   

			Name:  Chris Gannon

			Title: Chief Financial Officer

			

 

 

 

	 	
			LENDER:

			 

			CITIBANK, N.A.,

			a national banking association

			 

			 

			By:     /s/ Nanci Dias                                        

			Name: Nanci Dias

			Title:SVP

			

 

 

 

[Signature Page to

First Amendment to Loan and Pledge Agreement]

 

 

 

SCHEDULE I

 

BORROWING BASE CALCULATION

 

Borrower:  Energy Recovery, Inc.

 

	I.	CALCULATION OF ELIGIBLE ASSETS
	 	1.	Total fair market value of all Eligible Assets in Pledged Account(s)	$	 
	 	 	 	 	 	 	 	 
	 	2.	LESS, each of the following:	 	 
	 	 	a)	Equity collateral in which the Loanable Value of a single issuer is greater than 5 days’ average daily trading volume for the last 6 months	$	 	 	 
	 	 	b)	
			Equity collateral with a share price of not more than $5.00                         

				$	 	 	 
	 	 	c)	
			Equity collateral with an equity position that represents 5% or more of total shares outstanding of any single issuer               

				$	 	 	 
	 	 	d)	
			Equity collateral that cannot be sold on a daily basis by Lender of any Business Day without restriction or volume limitation           

				$	 	 	 
	 	 	e)	
			Equity collateral in which the Loanable Value of the common stock of any single issuer comprises more than 25% of the aggregate Loanable Value of all Eligible Assets

				$	 	 	 
	 	 	f)	
			Debt collateral other than U.S. Treasury or U.S. government-guaranteed obligations with an issue size of less than $300 million          

				$	 	 	 
	 	 	g)	
			Debt collateral other than U.S. Treasury or U.S. government-guaranteed obligations that are pledged in an amount greater than the lesser of (i) $25 million or (ii) 2% of outstanding issue                         

				$	 	 	 
	 	 	h)	
			Debt collateral other than U.S. Treasury or U.S. government-guaranteed obligations that is not rated BBB or higher by Standard & Poor’s Rating Service, a division of McGraw-Hill, Inc., Baa by Moody’s Investor Services, Inc., or other equivalent rating by a rating agency acceptable to Lender

				$	 	 	 
	 	 	i)	
			Debt collateral other than U.S. Treasury or U.S. government-guaranteed obligations the sale of which would be subject to restrictions if sold by Lender

				$	 	 	 
	 	 	j)  	
			Debt collateral other than U.S. Treasury or U.S. government-guaranteed obligations in which the Loanable Value of notes or bonds issued by a single issuer comprise more than 25% of the aggregate Loanable Value of all Eligible Assets  

				$	 	 	 
	 	 	k)	TOTAL Ineligible Assets	 	 	 	 
	 	 	 	sum a through j above)	$	 	 	 

 

S-I-1

 

 

	 	3.	TOTAL ELIGIBLE ASSETS (Line 1 less Line 2(k))	 	 	$	 
	 	 	 	 	 	 	 	 

	II.	CALCULATION OF BORROWING BASE
	 	 	 	 	 	 	 	 
	 	4. 	
			Cash, cash equivalents, and certificates of deposit held at Citibank with maturities less than 5 years, or money market or mutual funds whose investments are limited to those types of investments described above,

				$	 	 x 100% =  $	 

 

	 	5.  	
			US Federal government debt instruments  

			(US treasury bills, notes and bonds)

				$	 	 x 90% = $	 
	 	 	 	 	 	 	 	 
	 	6.  	US Federal government agency debt instruments 	$	 	 x 85% = $	 
	 	 	 	 	 	 	 	 
	 	7. 	
			State, Municipal and Corporate Bonds which are rated greater or equal to BBB 

				$	 	 x 70% = $	 
	 	 	 	 	 	 	 	 
	 	8.	NYSE traded equities	$	 	 x 70% = $	 
	 	 	 	 	 	 	 	 
	 	9.	
			NYSE MKT formerly American Stock Exchange) traded equities                  

				$	 	 x 60% = $	 
	 	 	 	 	 	 	 	 
	 	10. 	NASDAQ traded equities	$	 	 x 50% = $	 
	 	 	 	 	 	 	 	 
	 	11.   	TOTAL BORROWING BASE	 	 	$	 
	 	 	(sum of Lines 4 through 10 above)	 	 	 

 

 

 

The undersigned hereby represents and warrants to Lender that the information set forth above is true and correct as of the date set forth below, and based upon the information set forth in Borrower’s books and records.

 

	 	
			ENERGY RECOVERY, INC.,

			a Delaware corporation

			
	 	 
	 	 
	 	By:	 	 
	 	
			Name:

			Title:

			

 

 

S-I-2

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