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                                                                   EXHIBIT 10.11

                                                          Customer Number: 33141
                                                            Lessee Number: 33143

                                                MASTER EQUIPMENT LEASE AGREEMENT

         THIS MASTER EQUIPMENT LEASE AGREEMENT dated as of November 28, 2000 is
made by and between KEYCORP LEASING, A DIVISION OF KEY CORPORATE CAPITAL INC.,
having an address at 54 State Street, Albany, New York 12207 ("Lessor"), and
SYNAPTICS INCORPORATED, a California corporation with its principal place of
business at 2381 BERING DRIVE, SAN JOSE, CA 95131 ("Lessee").

                          TERMS AND CONDITIONS OF LEASE

1. LEASE. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor,
the Equipment, subject to and upon the terms set forth herein. Each Equipment
Schedule shall constitute a separate and enforceable lease incorporating all the
terms of this Master Equipment Lease Agreement as if such terms were set forth
in full in such Equipment Schedule. In the event that any term of any Equipment
Schedule conflicts with or is inconsistent with any term of this Master
Equipment Lease Agreement, the terms of the Equipment Schedule shall govern.

2. DISCLAIMER OF WARRANTIES. LESSOR MAKES NO (AND SHALL NOT BE DEEMED TO HAVE
MADE ANY) WARRANTIES, EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER,
INCLUDING, WITHOUT LIMITATION, THE DESIGN, OPERATION OR CONDITION OF, OR THE
QUALITY OF THE MATERIAL, EQUIPMENT OR WORKMANSHIP IN, THE EQUIPMENT, ITS
MERCHANTABILITY OR ITS FITNESS FOR ANY PARTICULAR PURPOSE, THE STATE OF TITLE
THERETO OR OF ANY COMPONENT THEREOF, THE ABSENCE OF LATENT OR OTHER DEFECTS
(WHETHER OR NOT DISCOVERABLE), AND LESSOR HEREBY DISCLAIMS THE SAME; IT BEING
UNDERSTOOD THAT THE EQUIPMENT IS LEASED TO LESSEE "AS IS" AND ALL SUCH RISKS, IF
ANY, ARE TO BE BORNE BY LESSEE. NO DEFECT IN, OR UNFITNESS OF, THE EQUIPMENT, OR
ANY OF THE OTHER FOREGOING MATTERS, SHALL RELIEVE LESSEE OF THE OBLIGATION TO
PAY RENT OR OF ANY OTHER OBLIGATION HEREUNDER. LESSEE HAS MADE THE SELECTION OF
THE EQUIPMENT FROM THE SUPPLIER BASED ON ITS OWN JUDGMENT AND EXPRESSLY
DISCLAIMS ANY RELIANCE UPON ANY STATEMENTS OR REPRESENTATIONS MADE BY LESSOR.
LESSOR IS NOT RESPONSIBLE FOR ANY REPAIRS, SERVICE, MAINTENANCE OR DEFECT IN THE
EQUIPMENT OR THE OPERATION THEREOF. IN NO EVENT SHALL LESSOR BE LIABLE FOR ANY
INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES (WHETHER UNDER THE UCC OR OTHERWISE),
INCLUDING, WITHOUT LIMITATION, ANY LOSS, COST OR DAMAGE TO LESSEE OR OTHERS
ARISING FROM ANY OF THE FOREGOING MATTERS, INCLUDING, WITHOUT LIMITATION,
DEFECTS, NEGLIGENCE, DELAYS, FAILURE OF DELIVERY OR NON-PERFORMANCE OF THE
EQUIPMENT. ANY WARRANTY BY THE SUPPLIER IS HEREBY ASSIGNED TO LESSEE BY LESSOR
FOR THE TERM OF THE LEASE WITHOUT RECOURSE. SUCH WARRANTY SHALL NOT RELEASE
LESSEE FROM ITS OBLIGATION TO LESSOR TO PAY RENT, TO PERFORM ALL OTHER
OBLIGATIONS HEREUNDER AND TO KEEP, MAINTAIN AND SURRENDER THE EQUIPMENT IN THE
CONDITION REQUIRED BY SECTIONS 12 AND 13 HEREOF. Lessee's execution and delivery
of a Certificate of Acceptance shall be conclusive evidence as between Lessor
and Lessee that the Items of Equipment described therein are in all of the
foregoing respects satisfactory to Lessee, and Lessee shall not assert any claim
of any nature whatsoever against Lessor based on any of the foregoing matters;
provided, however, that nothing contained herein shall in any way bar, reduce or
defeat any claim that Lessee may have against the Supplier or any other person
(other than Lessor).

3. NON-CANCELABLE LEASE. THIS LEASE IS A NET LEASE AND LESSEE'S OBLIGATION TO
PAY RENT AND PERFORM ITS OBLIGATIONS HEREUNDER ARE ABSOLUTE, IRREVOCABLE AND
UNCONDITIONAL UNDER ANY AND ALL CIRCUMSTANCES WHATSOEVER (INCLUDING WITHOUT
LIMITATION THE BANKRUPTCY OF LESSOR) AND SHALL NOT BE SUBJECT TO ANY RIGHT OF
SET OFF, COUNTERCLAIM, DEDUCTION, DEFENSE OR OTHER RIGHT WHICH LESSEE MAY HAVE
AGAINST THE SUPPLIER, LESSOR OR ANY OTHER PARTY. LESSEE SHALL

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HAVE NO RIGHT TO TERMINATE (EXCEPT AS EXPRESSLY PROVIDED HEREIN) OR CANCEL THIS
LEASE OR TO BE RELEASED OR DISCHARGED FROM ITS OBLIGATION HEREUNDER FOR ANY
REASON WHATSOEVER, INCLUDING, WITHOUT LIMITATION, DEFECTS IN, DESTRUCTION OF,
DAMAGE TO OR INTERFERENCE WITH ANY USE OF THE EQUIPMENT (FOR ANY REASON
WHATSOEVER, INCLUDING, WITHOUT LIMITATION, WAR, ACT OF GOD, STRIKE OR
GOVERNMENTAL REGULATION), THE INVALIDITY, ILLEGALITY OR UNENFORCEABILITY (OR ANY
ALLEGATION THEREOF) OF THIS LEASE OR ANY PROVISION HEREOF, OR ANY OTHER
OCCURRENCE WHATSOEVER, WHETHER SIMILAR OR DISSIMILAR TO THE FOREGOING, WHETHER
FORESEEN OR UNFORESEEN.

4. DEFINITIONS. Unless the context otherwise requires, as used in this Lease,
the following terms shall have the respective meanings indicated below and shall
be equally applicable to both the singular and the plural forms thereof:
"Applicable Law" shall mean all applicable Federal, state, local and foreign
laws, ordinances, judgments, decrees, injunctions, writs, rules, regulations,
orders, licenses and permits of any Governmental Authority.
"Appraisal Procedure" shall mean the following procedure for obtaining an
appraisal of the Fair Market Sales Value or the Fair Market Rental Value. Lessor
shall provide Lessee with the names of three independent Appraisers. Within ten
(10) business days thereafter, Lessee shall select one of such Appraisers to
perform the appraisal. The selected Appraiser shall be instructed to perform its
appraisal based upon the assumptions specified in the definition of Fair Market
Sales Value or Fair Market Rental Value, as applicable, and shall complete its
appraisal within twenty (20) business days after such selection. Any such
appraisal shall be final, binding and conclusive on Lessee and Lessor and shall
have the legal effect of an arbitration award. Lessee shall pay the fees and
expenses of the selected Appraiser.
"Appraiser" shall mean a person engaged in the business of appraising property
who has at least ten (10) years' experience in appraising property similar to
the Equipment.
"Authorized Signer" shall mean any officer of Lessee, set forth on an incumbency
certificate (in form and substance satisfactory to Lessor) delivered by Lessee
to Lessor, who is authorized and empowered to execute the Lease Documents.
"Certificate of Acceptance" shall mean a certificate of acceptance, in form and
substance satisfactory to Lessor, executed and delivered by Lessee in accordance
with Section 7 hereof.
"Default" shall mean any event or condition which, with the passage of time or
the giving of notice, or both, would constitute an Event of Default.
"Default Rate" shall mean an annual interest rate equal to the lesser of 18% or
the maximum interest rate permitted by Applicable Law.
"Equipment" shall mean an item or items of property designated from time to time
by Lessee which are described on an Equipment Schedule and which are being or
will be leased by Lessee pursuant to this Lease, together with all replacement
parts, additions and accessories incorporated therein or affixed thereto
including, without limitation, any software that is a component or integral part
of, or is included or used in connection with, any Item of Equipment, but with
respect to such software, only to the extent of Lessor's interest therein, if
any.
"Equipment Group" shall consist of all Items of Equipment listed on a particular
Equipment Schedule.
"Equipment Location" shall mean the location of the Equipment, as set forth on
an Equipment Schedule, or such other location (approved in writing by Lessor) as
Lessee shah from time to time specify in writing.
"Equipment Schedule" shall mean each equipment lease schedule from time to time
executed by Lessor and Lessee with respect to an Equipment Group, pursuant to
and incorporating by reference all of the terms of this Master Equipment Lease
Agreement.
"Event of Default" shall have the meaning specified in Section 22 hereof.
"Fair Market Rental Value" or "Fair Market Sale Value" shall mean the value of
each Item of Equipment for lease or sale, unless otherwise specified herein as
determined between Lessor and Lessee, or, if Lessor and Lessee are unable to
agree, pursuant to the Appraisal Procedure, which would be obtained in an
arms-length transaction between an informed and willing lessor or seller (under
no compulsion to lease or sell) and an informed and willing lessee or buyer
(under no compulsion to lease or purchase). In determining the Fair Market
Rental Value or Fair Market Sale Value of the Equipment, (a) such Fair Market
Rental Value or Fair Market Sale Value shall be calculated on the assumption
that the Equipment is in the condition and repair required by Sections 12 and 13

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hereof, and (b) there shall be excluded from the calculation thereof the value
of any Upgrade made pursuant to Section 14 hereof in which the Lessor does not
hold an interest.
"GAAP" shall have the meaning specified in Section 31 hereof.
"Governmental Action" shall mean all authorizations, consents, approvals,
waivers, filings and declarations of any Governmental Authority, including,
without limitation, those environmental and operating permits required for the
ownership, lease, use and operation of the Equipment.
"Governmental Authority" shall mean any foreign, Federal, state, county,
municipal or other governmental authority, agency, board or court.
"Guarantor" shall mean any guarantor of Lessee's obligations hereunder.
"Initial Term Expiration Date" shall have the meaning set forth in the Equipment
Schedule associated therewith. "Item of Equipment" shall mean each Item of the
Equipment.
"Lease", "hereof", "herein" and "hereunder" shall mean, with respect to an
Equipment Group, this Master Equipment Lease Agreement and the Equipment
Schedule on which such Equipment Group is described, including all addenda
attached thereto and made a part thereof.
"Lease Documents" shall mean this Lease and all other documents prepared by
Lessor and now or hereafter executed in connection therewith.
"Lessor Assignee" shall have the meaning specified in Section 15 hereof.
"Lessor Expense" shall have the meaning specified in Section 26 hereof.
"Lessor Transfer" shall have the meaning specified in Section 15 hereof.
"Liability" shall have the meaning specified in Section 24 hereof.
"Lien" shall mean all mortgages, pledges, security interests, liens,
encumbrances, claims or other charges of any kind whatsoever.
"Loss" shall have the meaning specified in Section 16 hereof.
"Purchase Agreement" shall mean any purchase agreement or other contract entered
into between the Supplier and Lessee for the acquisition of the Equipment to be
leased hereunder.
"Related Equipment Schedule" shall have the meaning specified in Section 27
hereof.
"Remedy Date" shall have the meaning specified in Section 22 hereof.
"Rent" shall mean the periodic rental payments due hereunder for the leasing of
the Equipment, as set forth on the Equipment Schedules, and, where the context
hereof requires, all such additional amounts as may from time to time be payable
under any provision of this Lease.
"Rent Commencement Date" shall mean, with respect to an Equipment Group, (a) the
date on which Lessor receives an executed Certificate of Acceptance for such
Equipment from Lessee or (b) the date on which Lessor disburses funds for the
purchase of such Equipment Group, as determined by Lessor in its sole
discretion.
"Rent Payment Date" with respect to an Equipment Group, shall have the meaning
set forth in the Equipment Schedule associated therewith.
"Required Alteration" shall have the meaning specified in Section 11 hereof.
"Stipulated Loss Value" shall mean, as of any Rent Payment Date and with respect
to an Item of Equipment, the amount determined by multiplying the Total Cost for
such Item of Equipment by the percentage specified in the applicable Stipulated
Loss Value Supplement opposite such Rent Payment Date.
"Stipulated Loss Value Supplement" with respect to an Equipment Group, shall
have the meaning set forth in the Equipment Schedule associated therewith.
"Supplier" shall mean the manufacturer or the vendor of the Equipment, as set
forth on each Equipment Schedule.
"Term" shall mean the Initial Term or any Renewal Term, each as defined in
Section 8 hereof, and any Extended Lease Term or Interim Term as defined in an
Equipment Schedule.
"Total Cost" shall mean, with respect to an Item of Equipment, (a) the
acquisition cost of such Item of Equipment (including Lessor's capitalized
costs), as set forth on the Equipment Schedule on which such Item of Equipment
is described, or (b) if no such acquisition cost is specified, the Supplier's
invoice price for such Item of Equipment plus Lessor's capitalized costs, or (c)
if no such acquisition cost is specified and no such invoice price is
obtainable, an allocated price for such Item of Equipment based on the Total
Cost of all Items of Equipment set forth on the Equipment Schedule on which such
Item of Equipment is described, as determined by Lessor in its sole discretion.
"Upgrade" shall have the meaning specified in Section 14 hereof.

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5. SUPPLIER NOT AN AGENT. LESSEE UNDERSTANDS AND AGREES THAT (a) NEITHER THE
SUPPLIER, NOR ANY SALES REPRESENTATIVE OR OTHER AGENT OF THE SUPPLIER, IS (1) AN
AGENT OF LESSOR OR (2) AUTHORIZED TO MAKE OR ALTER ANY TERM OR CONDITION OF THIS
LEASE, AND (b) NO SUCH WAIVER OR ALTERATION SHALL VARY THE TERMS OF THIS LEASE
UNLESS EXPRESSLY SET FORTH HEREIN.

6. ORDERING EQUIPMENT. Lessee has selected and ordered the Equipment from the
Supplier and, if appropriate, has entered into a Purchase Agreement with respect
thereto. Lessor may accept an assignment from Lessee of Lessee's rights, but
none of Lessee's obligations, under any such Purchase Agreement. Lessee shall
arrange for delivery of the Equipment so that it can be accepted in accordance
with Section 7 hereof. If an Item of Equipment is subject to an existing
Purchase Agreement between Lessee and the Supplier, Lessee warrants that such
Item of Equipment has not been delivered to Lessee as of the date of the
Equipment Schedule applicable thereto. If Lessee causes the Equipment to be
modified or altered, or requests any additions thereto prior to the Rent
Commencement Date, Lessee (a) acknowledges that any such modification,
alteration or addition to an Item of Equipment may affect the Total Cost, taxes,
purchase and renewal options (if any), Stipulated Loss Value and Rent with
respect to such Item of Equipment, and (b) hereby authorizes Lessor to adjust
such Total Cost, taxes, purchase and renewal options (if any), Stipulated Loss
Value and Rent as appropriate. Lessee hereby authorizes Lessor to complete each
Equipment Schedule with the serial numbers and other identification data of the
Equipment Group associated therewith, as such data is received by Lessor.

7. DELIVERY AND ACCEPTANCE. Upon Lessee's acceptance for lease of any Equipment
delivered to Lessee and described in any Equipment Schedule, Lessee shall
execute and deliver to Lessor a Certificate of Acceptance. LESSOR SHALL HAVE NO
OBLIGATION TO ADVANCE FUNDS FOR THE PURCHASE OF THE EQUIPMENT UNLESS AND UNTIL
LESSOR SHALL HAVE RECEIVED A CERTIFICATE OF ACCEPTANCE RELATING THERETO EXECUTED
BY LESSEE. Such Certificate of Acceptance shall constitute Lessee's
acknowledgment that such Equipment (a) was received by Lessee, (b) is
satisfactory to Lessee in all respects and is acceptable to Lessee for lease
hereunder, (c) is suitable for Lessee's purposes, (d) is in good order, repair
and condition, (e) has been installed and operates properly, and (f) is subject
to all of the terms of this Lease (including, without limitation, Section 2
hereof).

8. TERM; SURVIVAL. With respect to any Item of Equipment, unless otherwise
specified on an Equipment Schedule, the initial term of this Lease (the "Initial
Term") shall commence on the date on which such Item of Equipment is delivered
to Lessee, and, unless earlier terminated as provided herein, shall expire on
the Initial Term Expiration Date for such Item of Equipment. With respect to an
Item of Equipment, any renewal term of this Lease (individually, a "Renewal
Term"), as contemplated hereby, shah commence immediately upon the expiration of
the Initial Term or any prior Renewal Term, as the case may be, and, unless
earlier terminated as provided herein, shall expire on the date on which the
final payment of Rent is due and paid hereunder. Obligations of Lessee under the
lease relating to Rent and other payment obligations, tax indemnification,
general indemnification and return and maintenance of equipment, as applicable,
shall survive the expiration, cancellation or other termination of the Term
hereof.

9. RENT. Lessee shall pay the Rent set forth on the Equipment Schedule
commencing on the Rent Commencement Date, and, unless otherwise set forth on
such Equipment Schedule, on the same day of each payment period thereafter for
the balance of the Term. Rent shall be due whether or not Lessee has received
any notice that such payments are due. All Rent shall be paid to Lessor at its
address set forth on the Equipment Schedule, or as otherwise directed by Lessor
in writing.

10. LOCATION; INSPECTION; LABELS. The Equipment shall be delivered to the
Equipment Location and shall not be removed therefrom without Lessor's prior
written consent. Lessor shall have the right to enter upon the Equipment
Location and inspect the Equipment at any reasonable time. Lessor may, with
reasonable notice to Lessee, remove the Equipment if the Equipment is, in the
opinion of Lessor, being used beyond its capacity or is in any manner improperly
cared for, abused or misused. At Lessor's request, Lessee shall affix permanent
labels

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indicating Lessor's interest in the Equipment in a prominent place on the
Equipment and shall keep such labels in good repair and condition.

11. USE; ALTERATIONS. Lessee shall use the Equipment lawfully and only in the
manner for which it was designed and intended and so as to subject it only to
ordinary wear and tear. Lessee shall comply with all Applicable Law. Lessee
shall immediately notify Lessor in writing of any existing or threatened
investigation, claim or action by any Governmental Authority in connection with
any Applicable Law or Governmental Action which could adversely affect the
Equipment or this Lease. Lessee, at its own expense, shall make such
alterations, additions or modifications or improvements (each, a "Required
Alteration") to the Equipment as may be required from time to time to meet the
requirements of Applicable Law or Governmental Action. All such Required
Alterations shall immediately, and without further act, be deemed to constitute
Items of Equipment and be fully subject to this Lease as if originally leased
hereunder, and shall be free and clear of all Liens. Except as otherwise
permitted herein, Lessee shall not make any alterations to the Equipment without
Lessor's prior written consent.

12. REPAIRS AND MAINTENANCE. Lessee, at Lessee's own cost and expense, shall (a)
keep the Equipment in good repair, good operating condition and working order
and in compliance with the manufacturer's specifications and Lessee's standard
practices (but with respect to the latter, in no event less than industry
practices), and (b) to maintain, service and repair the Equipment as otherwise
required herein. Lessee, at its own cost and expense and within a reasonable
period of time, shall replace any part of any Item of Equipment that becomes
unfit or unavailable for use from any cause, with a replacement part of the same
manufacture, value, remaining useful life and utility as the replaced part
immediately preceding the replacement (assuming that such replaced part was in
the condition required by this Lease). Such replacement part shall immediately,
and without further act, be deemed to constitute an Item of Equipment and be
fully subject to this Lease as if originally leased hereunder, and shall be free
and clear of all Liens.

13. RETURN OF EQUIPMENT. Upon the expiration (subject to Section 32 hereof and
except as otherwise provided in an Equipment Schedule) or earlier termination of
this Lease, Lessee, at its sole expense, shall assemble and return the Equipment
to Lessor by delivering such Equipment F.A.S. or F.O.B. to such location or such
carrier (packed for shipping) as Lessor shall specify. Lessee agrees that the
Equipment, when returned, shall be in the condition required by Section 12
hereof. All components of the Equipment shall have been properly serviced,
following the manufacturer's written operating and servicing procedures, such
that the Equipment is eligible for a manufacturer's standard, full service
maintenance contract without Lessor's incurring any expense to repair or
rehabilitate the Equipment. If, in the opinion of Lessor, any Item of Equipment
fails to meet the standards set forth above, Lessee agrees to pay on demand all
costs and expenses incurred in connection with repairing such Item of Equipment
and restoring it so as to meet such standards. If Lessee fails to return any
Item of Equipment as required hereunder, then, all of Lessee's obligations under
this Lease (including, without limitation, Lessee's obligation to pay Rent for
such Item of Equipment at the rental then applicable under this Lease) shall
continue in full force and effect until such Item of Equipment shall have been
returned in the condition required hereunder.

14. EQUIPMENT UPGRADES/ATTACHMENTS. In addition to the requirements of Section
11 hereof, Lessee, at its own expense, may from time to time add or install
upgrades or attachments (each an "Upgrade") to the Equipment during the Term;
provided, that such Upgrades (a) are readily removable without causing material
damage to the Equipment, (b) do not materially adversely affect the Fair Market
Sale Value, the Fair Market Rental Value, residual value, productive capacity,
utility or remaining useful life of the Equipment, and (c) do not cause such
Equipment to become "limited use property" within the meaning of Revenue
Procedure 76-30, 1976-2 C.B. 647 (or such other successor tax provision), as of
the date of installation of such Upgrade. Any such Upgrades which can be removed
without causing damage to or adversely affecting the condition of the Equipment,
or reducing the Fair Market Sale Value, the Fair Market Rental Value, residual
value, productive capacity, utility or remaining useful life of the Equipment
shall remain the property of Lessee; and upon the expiration or earlier
termination of this Lease and provided that no Event of Default exists, Lessee
may, at its option, remove any such Upgrades and, upon such removal, shall
restore the Equipment to the condition required hereunder.

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15.SUBLEASE AND ASSIGNMENT. (a) WITHOUT LESSOR'S PRIOR WRITTEN CONSENT, LESSEE
SHALL NOT (1) ASSIGN, TRANSFER, PLEDGE, HYPOTHECATE OR OTHERWISE DISPOSE OF THIS
LEASE, THE EQUIPMENT OR ANY INTEREST THEREIN, OR (2) SUBLET OR LEND THE
EQUIPMENT TO, OR PERMIT THE EQUIPMENT TO BE USED BY, ANYONE OTHER THAN LESSEE.
(b) Lessor, at any time with or without notice to Lessee, may sell, transfer,
assign and/or grant a security interest, in all or any part of Lessor's interest
in this Lease, any Equipment Schedule or any Item of Equipment (each, a "Lessor
Transfer"), provided that no such Lessor Transfer will increase Lessee's burdens
or risks hereunder. In the event of a Lessor Transfer, any purchaser,
transferee, assignee or secured party (each a "Lessor Assignee") shall, from the
date of such Lessor Transfer, have all of Lessor's obligations hereunder and
shall have and may exercise all of Lessor's rights hereunder with respect to the
items to which any such Lessor Transfer relates, and LESSEE SHALL NOT ASSERT
AGAINST ANY SUCH LESSOR ASSIGNEE ANY DEFENSE, COUNTERCLAIM OR OFFSET THAT LESSEE
MAY HAVE AGAINST LESSOR ARISING FROM ANY ACTIONS OR OMISSIONS OF OR BY THE
LESSOR. Lessee acknowledges that no such sale, transfer, assignment and/or
security interest will change Lessee's duties hereunder or increase its burdens
or risks hereunder. Lessee agrees that upon written notice to Lessee of any such
sale, transfer, assignment and/or security interest, Lessee shall acknowledge
receipt thereof in writing and shall comply with the directions and demands of
any such Lessor Assignee.

16. RISK OF LOSS; DAMAGE TO EQUIPMENT. (a) Lessee shall bear the entire risk of
loss (including without limitation, theft, destruction, disappearance of or
damage to any and all Items of Equipment ("Loss") from any cause whatsoever),
whether or not insured against, during the Term hereof until the Equipment is
returned to Lessor in accordance with Section 13 hereof. No Loss shall relieve
Lessee of the obligation to pay Rent or of any other obligation under this
Lease.
         (b) In the event of Loss to any Item of Equipment, Lessee shall
immediately notify Lessor of same, and at the option of Lessor, Lessee shall
within thirty (30) days following such Loss: (1) place such Item of Equipment in
good condition and repair, in accordance with the terms hereof; (2) replace such
Item of Equipment with replacement equipment (acceptable to Lessor) in as good
condition and repair, and with the same value, remaining useful economic life
and utility, as such replaced Item of Equipment immediately preceding the Loss
(assuming that such replaced Item of Equipment was in the condition required by
this Lease), which replacement equipment shall immediately, and without further
act, be deemed to constitute Items of Equipment and be fully subject to this
Lease as if originally leased hereunder and shall be free and clear of all
Liens; or (3) pay to Lessor the sum of (i) all Rent due and owing hereunder with
respect to such Item of Equipment (at the time of such payment) plus (ii) the
Stipulated Loss Value as of the Rent Payment Date next following the date of
such Loss with respect to such Item of Equipment. Upon Lessor's receipt of the
payment required under subsection (3) above, Lessee shall be entitled to
Lessor's interest in such Item of Equipment, in its then condition and location,
"as is" and "where is", without any warranties, express or implied and, as
applicable, Lessor will file all necessary UCC forms releasing its interest in
such Item of Equipment.

17. INSURANCE. (a) Lessee shall, at all times during the Term hereof (until the
Equipment shall have been received by Lessor) and at Lessee's own cost and
expense, maintain (1) insurance against all risks of physical loss or damage to
the Equipment (which shall include theft and collision for Equipment consisting
of motor vehicles, but shall not exclude loss resulting from flood or
earthquake) in an amount not less than the greater of the full replacement value
thereof or the Stipulated Loss Value thereof if applicable, and (2) commercial
general liability insurance (including blanket contractual liability coverage
and products liability coverage) for personal and bodily injury and property
damage in an amount satisfactory to Lessor.
         (b) All insurance policies required hereunder shall (1) require thirty
(30) days' prior written notice of cancellation or material change in coverage
to Lessor (any such cancellation or change, as applicable, not being effective
until the thirtieth (30th) day after the giving of such notice); (2) name
"KeyCorp and its subsidiaries and affiliated companies, including Key Corporate
Capital Inc., their successors and assigns" as an additional insured under the
public liability policies and name Lessor as joint loss payee under the property
insurance policies related in any way to the Equipment leased hereunder; (3) not
require contributions from other policies held by Lessor; (4) waive any right of
subrogation against Lessor related in any way to the Equipment leased hereunder;

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(5) in respect of any liability of Lessor, except for the insurers' salvage
rights in the event of a loss, waive the right of such insurers to set-off, to
counterclaim or to any other deduction, whether by attachment or otherwise, to
the extent of any monies due Lessor under such policies; (6) not require that
Lessor pay or be liable for any premiums with respect to such insurance covered
thereby; (7) be in full force and effect throughout any geographical areas at
any time traversed by any Item of Equipment; and (8) contain breach of warranty
provisions providing that, in respect of the interests of Lessor in such
policies, the insurance shall not be invalidated by any action or inaction of
Lessee or any other person (other than Lessor) and shall insure Lessor
regardless of any breach or violation of any warranty, declaration or condition
contained in such policies by Lessee or by any other person (other than Lessor).
Prior to the first date of delivery of any Item of Equipment hereunder, and
thereafter not less than 15 days prior to the expiration dates of the expiring
policies theretofore delivered pursuant to this Section, Lessee shall deliver to
Lessor a certificate of insurance (or in the case of blanket policies,
certificates thereof issued by the insurers thereunder) for the insurance
maintained pursuant to this Section.

18. GENERAL TAX INDEMNIFICATION. Lessee shall pay when due and shall indemnify
and hold Lessor harmless from and against (on an after-tax basis) any and all
taxes, fees, withholdings, levies, imposts, duties, assessments and charges of
any kind and nature arising out of or related to this Lease (together with
interest and penalties thereon and including, without limitation, sales, use,
gross receipts, personal property, real property, real estate excise, ad
valorem, business and occupational, franchise, value added, leasing, leasing
use, documentary, stamp or other taxes) imposed upon or against Lessor, any
Lessor Assignee, Lessee or any Item of Equipment by any Governmental Authority
with respect to any Item of Equipment or the manufacturing, ordering, sale,
purchase, shipment, delivery, acceptance or rejection, ownership, titling,
registration, leasing, subleasing, possession, use, operation, removal, return
or other dispossession thereof or upon the rents, receipts or earnings arising
therefrom or upon or with respect to this Lease, excepting only all Federal,
state and local taxes on or measured by Lessor's net income (other than income
tax resulting from making any alterations, improvements, modifications,
additions, upgrades, attachments, replacements or substitutions by Lessee made
without consent of Lessor). Whenever this Lease terminates as to any Item of
Equipment, Lessee shall, upon written request by Lessor and concurrence by
Lessee, whose concurrence shall not be unreasonably withheld, advance to Lessor
the amount estimated by Lessor to be the personal property or other taxes on
said item which are not yet payable, but for which Lessee is responsible. Lessor
shall, at Lessee's request, provide Lessee with Lessor's method of computation
of any estimated taxes.

19. LESSOR'S RIGHT TO PERFORM FOR LESSEE. If Lessee fails to perform any of its
obligations contained herein, Lessor may (but shall not be obligated to) perform
such obligations, and the amount of the reasonable costs and expenses of Lessor
incurred in connection with such performance, together with interest on such
amount at the Default Rate, shall be payable by Lessee to Lessor upon demand. No
such performance by Lessor shall be deemed a waiver of any rights or remedies of
Lessor, or be deemed to cure the default of Lessee hereunder.

20. DELINQUENT PAYMENTS. If Lessee fails to pay any Rent or other sums under
this Lease within five (5) days of the date when the same becomes due, Lessee
shall pay to Lessor a late charge equal to the lesser of five percent (5%) of
such delinquent amount or the maximum amount permitted under Applicable Law.
Such late charge shall be payable by Lessee upon demand by Lessor and shall be
deemed Rent hereunder.

21. PERSONAL PROPERTY; LIENS. Lessor and Lessee hereby agree that the Equipment
is, and shall at all times remain, personal property notwithstanding the fact
that any Item of Equipment may now be, or hereafter become, in any manner
affixed or attached to real property or any improvements thereon. Lessee shall
at all times keep the Equipment free and clear from all Liens. Lessee shall (a)
give Lessor immediate written notice of any such Lien, (b) promptly, at Lessee's
sole cost and expense, take such action as may be necessary to discharge any
such Lien, and (c) indemnify and hold Lessor, on an after-tax basis, harmless
from and against any loss or damage caused by any such Lien.

22. EVENTS OF DEFAULT; REMEDIES. (a) As used herein, the term "Event of Default"
shall mean any of the following events: (1) Lessee fails to pay any Rent within
ten (10) days after the same shall have become due; (2)

                                                                    Page 7 of 13
<PAGE>   8
Lessee or any Guarantor becomes insolvent or makes an assignment for the benefit
of its creditors; (3) a receiver, trustee, conservator or liquidator of Lessee
or any Guarantor or of all or a substantial part of Lessee's or such Guarantor's
assets is appointed with or without the application or consent of Lessee or such
Guarantor, respectively; (4) a petition is filed by or against Lessee or any
Guarantor under any bankruptcy, insolvency or similar legislation; (5) Lessee or
any Guarantor violates or fails to perform any provision of either this Lease or
any other loan, lease or credit agreement or any acquisition or purchase
agreement with Lessor or any other party; (6) Lessee violates or fails to
perform any covenant or representation made by Lessee herein; (7) any
representation or warranty made herein or in any certificate, financial
statement or other statement furnished to Lessor (or Lessor's parent,
subsidiaries or affiliates) shall prove to be false or misleading in any
material respect as of the date on which the same was made; (8) Lessee makes a
bulk transfer of furniture, furnishings, fixtures or other equipment or
inventory; (9) there is a material adverse change in Lessee's or any Guarantor's
financial condition since the first Rent Commencement Date of any Equipment
Schedule executed in connection herewith; (10) Lessee merges or consolidates
with any other corporation or entity, or sells, leases or disposes of all or
substantially all of its assets without the prior written consent of Lessor,
which consent shall not be unreasonably withheld; (11) a change in control
occurs in Lessee or any Guarantor that adversely impacts the Lessee's or
Guarantor's ability to perform its obligations hereunder; or (12) the death or
dissolution of Lessee or any Guarantor. An Event of Default with respect to any
Equipment Schedule hereunder shall, at Lessor's option, constitute an Event of
Default for all Equipment Schedules hereunder and any other agreements between
Lessor and Lessee.

         (b) Upon the occurrence of an Event of Default, Lessor may do one or
more of the following as Lessor in its sole discretion shall elect: (1) proceed
by appropriate court action or actions, either at law or in equity, to enforce
performance by Lessee of the applicable covenants of this Lease or to recover
damages for the breach thereof; (2) sell any Item of Equipment at public or
private sale and, Lessor shall apply to or offset any amounts received pursuant
to such sale; (3) hold, keep idle or lease to others any Item of Equipment as
Lessor in its sole discretion may determine and if leased, Lessor shall apply to
or offset any amounts received pursuant to such lease; (4) by notice in writing
to Lessee, cancel or terminate this Lease, without prejudice to any other
remedies hereunder; (5) demand that Lessee, and Lessee shall, upon written
demand of Lessor and at Lessee's expense forthwith return all Items of Equipment
to Lessor in the manner and condition required by Section 13 hereof, provided,
however, that Lessee shall remain and be liable to Lessor for any amounts
provided for herein or other damages resulting from the Equipment not being in
the condition required by Section 12 hereof, and otherwise in accordance with
all of the provisions of this Lease, except those provisions relating to periods
of notice; (6) enter upon the premises of Lessee or other premises where any
Item of Equipment may be located and, without notice to Lessee and with or
without legal process, take possession of and remove all or any such Items of
Equipment without liability to Lessor by reason of such entry or taking
possession, and without such action constituting a cancellation or termination
of this Lease unless Lessor notifies Lessee in writing to such effect except
Lessor shall apply to or offset any amounts if received from the sale, rents,
lease or such Items of Equipment; (7) by written notice to Lessee specifying a
payment date (the "Remedy Date"), demand that Lessee pay to Lessor, and Lessee
shall pay to Lessor, on the Remedy Date, as liquidated damages for loss of a
bargain and not as a penalty, any unpaid Rent due prior to the Remedy Date plus
whichever of the following amounts Lessor, in its sole discretion, shall specify
in such notice (together with interest on such amount at the Default Rate from
the Remedy Date to the date of actual payment): (i) an amount, with respect to
an Item of Equipment, equal to the Rent payable for such Item of Equipment for
the remainder of the then current Term thereof, after discounting such Rent to
present worth as of the Remedy Date on the basis of a per annum rate of discount
equal to five percent (5%) from the respective dates upon which such Rent would
have been paid had this Lease not been canceled or terminated; or (ii) the
Stipulated Loss Value, computed as of the Remedy Date or, if the Remedy Date is
not a Rent Payment Date, the Rent Payment Date next following the Remedy Date
(provided, however, that, with respect to any proceeds actually received by
Lessor for any Item of Equipment returned to or repossessed by Lessor, Lessor
agrees that it shall first apply such proceeds to satisfy Lessee's obligation to
pay the Stipulated Loss Value or, if Lessor has received payment in full of the
Stipulated Loss Value from Lessee, Lessor shall remit such proceeds to Lessee
(after first deducting any Lessor Expense) up to the amount of the Stipulated
Loss Value; (8) cause Lessee, at its expense, to promptly assemble any and all
Items of Equipment and return the same to Lessor at such place located within
the United States as Lessor may designate in writing; and (9) exercise any other
right or remedy

                                                                    Page 8 of 13
<PAGE>   9
available to Lessor under Applicable Law or proceed by appropriate court action
to enforce the terms hereof or to recover damages for the breach hereof or to
rescind this Lease. In addition, Lessee shall be liable, except as otherwise
provided above, for any and all unpaid Rent due hereunder before or during the
exercise of any of the foregoing remedies, and for reasonable legal fees and
other costs and expenses incurred by reason of the occurrence of any Event of
Default or the exercise of Lessor's remedies with respect thereto. If an Event
of Default occurs, Lessee hereby agrees that ten (10) days prior notice to
Lessee of (A) any public sale or (B) the time after which a private sale may be
negotiated shall be conclusively deemed reasonable and, to the extent permitted
by Applicable Law, Lessee waives all rights and defenses with respect to such
disposition of the Equipment and, Lessor shall apply to or offset any amounts
received from such sale. None of Lessor's rights or remedies hereunder are
intended to be exclusive of, but each shall be cumulative and in addition to any
other right or remedy referred to hereunder or otherwise available to Lessor at
law or in equity, and no express or implied waiver by Lessor of any Event of
Default shall constitute a waiver of any other Event of Default or a waiver of
any of Lessor's rights.

23. NOTICES. All notices and other communications hereunder shall be in writing
and shall be transmitted by hand, overnight courier or certified mail (return
receipt requested), postage prepaid. Such notices and other communications shall
be addressed to the respective party at the address set forth above or at such
other address as any party may from time to time designate by notice duly given
in accordance with this Section. Such notices and other communications shall be
effective upon the earlier of receipt or three (3) days after mailing if mailed
in accordance with the terms of this Section.

24. GENERAL INDEMNIFICATION. (a) Lessee shall pay, and shall indemnify and hold
Lessor harmless on an after-tax basis from and against, any and all liabilities,
causes of action, claims, suits, penalties, damages, losses, costs or expenses
(including reasonable attorneys' fees), obligations, liabilities, demands and
judgments, and Liens, of any nature whatsoever (collectively, a "Liability")
arising out of or in any way related to: (1) the Lease Documents, (2) the
manufacture, purchase, ownership, selection, acceptance, rejection, possession,
lease, sublease, operation, use, maintenance, documenting, inspection, control,
loss, damage, destruction, removal, storage, surrender, sale, use, condition,
delivery, nondelivery, return or other disposition of or any other matter
relating to any Item of Equipment or any part or portion thereof (including, in
each case and without limitation, latent or other defects, whether or not
discoverable, any claim for patent, trademark or copyright infringement) and any
and all Liabilities in any way relating to or arising out of injury to persons,
properties or the environment or any and all Liabilities based on strict
liability in tort, negligence, breach of warranties or violations of any
regulatory law or requirement, (3) a failure to comply fully with Applicable Law
and (4) Lessee's failure to perform any covenant, or Lessee's breach of any
representation or warranty, hereunder; provided, that the foregoing indemnity
shall not extend to the Liabilities to the extent resulting solely from the
gross negligence or willful misconduct of Lessor.

         (b) Lessee shall promptly deliver to Lessor (1) copies of any documents
received from the United States Environmental Protection Agency or any state,
county or municipal environmental or health agency and (2) copies of any
documents submitted by Lessee or any of its subsidiaries to the United States
Environmental Protection Agency or to any state, county or municipal
environmental or health agency concerning the Equipment or its operation.

25. SEVERABILITY; CAPTIONS. Any provision of this Lease or any Equipment
Schedule which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability shall not invalidate or render
unenforceable such provision in any other jurisdiction. Captions are intended
for convenience or reference only, and shall not be construed to define, limit
or describe the scope or intent of any provisions hereof.

26. LESSOR'S EXPENSE. Lessee shall pay all reasonable costs and expenses of
Lessor, including, without limitation, reasonable attorneys' and other
professional fees, the fees of any collection agencies and appraisers and all
other costs and expenses related to any sale or re-lease of the Equipment
(including storage costs), incurred by

                                                                    Page 9 of 13
<PAGE>   10
Lessor in enforcing any of the terms, conditions or provisions hereof or in
protecting Lessor's rights hereunder (each a "Lessor Expense").

27. RELATED EQUIPMENT SCHEDULES. In the event that any Item of Equipment covered
under any Equipment Schedule hereunder may become attached or affixed to, or
used in connection with, Equipment covered under another Equipment Schedule
hereunder (a "Related Equipment Schedule"), Lessee agrees that, if Lessee elects
to exercise a purchase or renewal option under any such Equipment Schedule, or
if Lessee elects to return the Equipment under any such Equipment Schedule
pursuant to Section 13 hereof, then Lessor, in its sole discretion, may require
that all Equipment leased under all Related Equipment Schedules be similarly
disposed of.

28. FINANCIAL AND OTHER DATA. During the Term hereof, Lessee shall furnish
Lessor (a) as soon as available, and in any event within 120 days after the last
day of each fiscal year, financial statements of Lessee and each Guarantor and
(b) from time to time as Lessor may reasonably request, other financial reports,
information or data (including federal and state income tax returns) and
quarterly or interim financial statements of Lessee and each Guarantor. All
annual information shall be audited by an independent certified public
accountant.

29.      [RESERVED]

30.      [RESERVED]

31. REPRESENTATIONS AND WARRANTIES OF LESSEE. Lessee represents and warrants
that: (a) Lessee is a corporation duly organized and validly existing in good
standing under the laws of the state of its incorporation; (b) the execution,
delivery and performance of this Lease and all related instruments and
documents: (1) have been duly authorized by all necessary corporate action on
the part of Lessee, (2) do not require the approval of any stockholder, partner,
trustee, or holder of any obligations of Lessee except such as have been duly
obtained, and (3) do not and will not contravene any law, governmental rule,
regulation or order now binding on Lessee, or the charter or by-laws of Lessee,
or contravene the provisions of, or constitute a default under, or result in the
creation of any lien or encumbrance upon the property of Lessee under, any
indenture, mortgage, contract or other agreement to which Lessee is a party or
by which it or its property is bound; (c) the Lease Documents, when entered
into, will constitute legal, valid and binding obligations of Lessee enforceable
against Lessee in accordance with the terms thereof; (d) there are no actions or
proceedings to which Lessee is a party, and there are no other threatened
actions or proceedings of which Lessee has knowledge, before any Governmental
Authority, which, either individually or in the aggregate, would adversely
affect the financial condition of Lessee, or the ability of Lessee to perform
its obligations hereunder; (e) Lessee is not in default under any obligation for
the payment of borrowed money, for the deferred purchase price of property or
for the payment of any rent under any lease agreement which, either individually
or in the aggregate, would have the same such effect; (f) under the laws of the
state(s) in which the Equipment is to be located, the Equipment consists solely
of personal property and not fixtures; (g) the financial statements of Lessee
(copies of which have been furnished to Lessor) have been prepared in accordance
with generally acceptable accounting principles consistently applied ("GAAP"),
and fairly present Lessee's financial condition and the results of its
operations as of the date of and for the period covered by such statements, and
since the date of such statements there has been no material adverse change in
such conditions or operations; (h) the address stated above is the chief place
of business and chief executive office, or in the case of individuals, the
primary residence, of Lessee; (i) Lessee does not conduct business under a
trade, assumed or fictitious name except as set forth in the attached Appendix
A; (j) the Equipment is being leased hereunder solely for business purposes and
that no item of Equipment will be used for personal, family or household
purposes; and (k) except as previously disclosed in writing to Lessor, neither
Lessee nor any of its officers or directors (if a corporation), partners (if a
partnership) or members (if a limited liability company) has, directly or
indirectly, any financial interest in the Supplier.

32. RENEWAL AND PURCHASE OPTIONS. With respect to an Equipment Schedule and the
Equipment Group set forth thereon, Lessee shall have the purchase and renewal
options set forth in such Equipment Schedule.

                                                                   Page 10 of 13
<PAGE>   11
33. LESSEE'S WAIVERS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, LESSEE (a)
WAIVES ANY AND ALL RIGHTS AND REMEDIES CONFERRED UPON A LESSEE BY SECTIONS
2A-508 THROUGH 2A-522 OF THE UNIFORM COMMERCIAL CODE AND (b) ANY RIGHTS NOW OR
HEREAFTER CONFERRED BY STATUTE OR OTHERWISE TO RECOVER INCIDENTAL OR
CONSEQUENTIAL DAMAGES FROM LESSOR FOR ANY BREACH OF WARRANTY OR FOR ANY OTHER
REASON OR TO SETOFF OR DEDUCT ALL OR ANY PART OF ANY CLAIMED DAMAGES RESULTING
FROM LESSOR'S DEFAULT, IF ANY, UNDER THIS LEASE PROVIDED, HOWEVER, THAT NO SUCH
WAIVER SHALL PRECLUDE LESSEE FROM ASSERTING ANY SUCH CLAIM AGAINST LESSOR IN A
SEPARATE CAUSE OF ACTION INCLUDING ANY CLAIM ARISING AS A RESULT OF LESSOR'S
BREACH OF SECTION 38 HEREOF.

34. UCC FILINGS. LESSEE HEREBY APPOINTS LESSOR OR ITS ASSIGNEE AS ITS TRUE AND
LAWFUL ATTORNEY IN FACT, IRREVOCABLY AND COUPLED WITH AN INTEREST, TO EXECUTE
AND FILE ON BEHALF OF LESSEE ALL UCC FINANCING STATEMENTS WHICH IN LESSOR'S SOLE
DISCRETION ARE DEEMED NECESSARY OR PROPER TO SECURE LESSOR'S INTEREST IN THE
EQUIPMENT IN ALL APPLICABLE JURISDICTIONS. Lessee hereby ratifies, to the extent
permitted by law, all that Lessor shall lawfully and in good faith do or cause
to be done by reason of and in compliance with this paragraph.

35. MISCELLANEOUS. Time is of the essence with respect to this Lease. ANY
FAILURE OF LESSOR TO REQUIRE STRICT PERFORMANCE BY LESSEE OR ANY WAIVER BY
LESSOR OF ANY PROVISION HEREIN SHALL NOT BE CONSTRUED AS A CONSENT OR WAIVER OF
ANY PROVISION OF THIS LEASE. This Lease and each Equipment Schedule shall be
binding upon, and inure to the benefit of, the parties hereto, their permitted
successors and assigns. This Lease will be binding upon Lessor only if executed
by a duly authorized officer or representative of Lessor at Lessor's address set
forth above. The Lease Documents shall be executed on Lessee's behalf by an
Authorized Signer of Lessee. THIS LEASE IS BEING DELIVERED IN THE STATE OF NEW
YORK AND SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAWS
PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION)
THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE
STATE OF NEW YORK.

36. JURY TRIAL WAIVER. LESSOR AND LESSEE HEREBY EACH WAIVE THEIR RESPECTIVE
RIGHTS TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR RELATED TO THE LEASE, THE LEASE DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION OR PROCEEDING TO WHICH LESSOR OR
LESSEE MAY BE PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR
OTHERWISE. LESSEE AND LESSOR AGREE THAT THEIR RESPECTIVE RIGHT TO JURY TRIAL IS
WAIVED AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE
OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY, OF THIS AGREEMENT OR
THE OTHER LEASE DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER IS
MADE KNOWINGLY, WILLINGLY AND VOLUNTARILY BY LESSOR AND LESSEE WHO EACH
ACKNOWLEDGE THAT NO REPRESENTATIONS HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE
THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THE LEASE AND THE LEASE DOCUMENTS.

37. MORE THAN ONE LESSEE. If more than one person or entity executes the Lease
Documents as "Lessee," the obligations of "Lessee" contained herein and therein
shall be deemed joint and several and all references to "Lessee" shah apply both
individually and jointly.

                                                                   Page 11 of 13
<PAGE>   12
38. QUIET ENJOYMENT. So long as no Default or Event of Default has occurred and
is continuing, Lessee shall peaceably hold and quietly enjoy the Equipment
without interruption by Lessor or any person or entity claiming through Lessor.

39. ENTIRE AGREEMENT. This Lease, together with all other Lease Documents
constitute the entire understanding or agreement between Lessor and Lessee with
respect to the leasing of the Equipment, and there is no understanding or
agreement, oral or written, which is not set forth herein or therein. Neither
this Lease nor any Equipment Schedule may be amended except by a writing signed
by Lessor and Lessee.

                                             Lessee's Initials:   /s/ RJK
                                                               _________________

40. EXECUTION IN COUNTERPARTS. This Master Equipment Lease Agreement may be
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.

IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease as of the day and
year first above written.

LESSOR:                                        LESSEE:

KEYCORP LEASING,                               SYNAPTICS INCORPORATED
A DIVISION OF KEY CORPORATE CAPITAL INC.

By:      /s/ Ronald M. Bruzdzinski Jr.         By:      /s/ R. J. Knittel
   _____________________________________          ______________________________
Name:    Ronald M. Bruzdzinski Jr.             Name:    R. J. Knittel
Title:   Regional Lease Contract Manager       Title:   CFO

                                                                   Page 12 of 13
<PAGE>   13
                                   APPENDIX A

                                SYNAPTICS UK LTD

                                SYNAPTICS TAIWAN

                                                                   Page 13 of 13
<PAGE>   14
                                                          Customer Number: 33141
                                                             Lease Number: 33143
                                                       Lessee Number: 8800020138

                                                       EQUIPMENT SCHEDULE NO. 01

                                                                    STANDARD CSA

         EQUIPMENT SCHEDULE NO. 01 dated as of November 28, 2000 (this
"Schedule") between KEYCORP LEASING, A DIVISION OF KEY CORPORATE CAPITAL INC.
("Lessor"), and SYNAPTICS INCORPORATED, a California corporation ("Lessee").

                            I N T R O D U C T I O N:

         Lessor and Lessee have heretofore entered into that certain Master
Equipment Lease Agreement dated as of November 28, 2000 (the "Master Lease"; the
Master Lease and this Schedule are hereinafter collectively referred to as, this
"Lease"). Unless otherwise defined herein, capitalized terms used herein shall
have the meanings specified in the Master Lease. The Master Lease provides for
the execution and delivery of a Schedule substantially in the form hereof for
the purpose of confirming the acceptance and lease of the Equipment under this
Lease as and when this Lease is delivered by Lessor to Lessee in accordance with
the terms thereof and hereof.

         NOW, THEREFORE, in consideration of the premises and other good and
sufficient consideration, Lessor and Lessee hereby agree as follows:

         1. EQUIPMENT. Pursuant to the terms and conditions of this Lease,
Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the
equipment listed on Exhibit A attached hereto (the "Equipment"). The aggregate
Total Cost of such Equipment is $499,030.24.

         2. TERM. The Initial Term of this Lease with respect to the Equipment
described on this Schedule shall commence on the date on which Lessor disburses
funds to Lessee in the amount specified on this schedule, and, unless earlier
terminated as provided herein, shall expire on a date which is thirty six (36)
months after the Rent Commencement Date (the "Initial Term Expiration Date").

         3. RENT PAYMENT DATES; RENT. Lessee hereby agrees to pay Rent for the
Equipment throughout the Initial Term in thirty six (36) consecutive monthly
installments payable in advance on the Rent Commencement Date and on the same
day each month thereafter (each, a "Rent Payment Date"). Each such installment
of Rent shall be in an amount equal to $15,646.69.

         4. EQUIPMENT LOCATION; BILLING ADDRESS. The Equipment described on this
Schedule shall be located at, and except as otherwise provided in this Lease,
shall not be removed from, the following address: 2381 Bering, San Jose, CA
95134. The billing address of Lessee is as follows: SYNAPTICS INCORPORATED, 2381
Bering, San Jose, CA 95134.

         5. LESSEE'S PURCHASE, RENEWAL AND OPTION TERMS.

                                                                     Page 1 of 6
<PAGE>   15
         (a) Dollar Purchase Option. With respect to the Equipment described on
this Schedule, Section 32 of the Master Lease ("Renewal and Purchase Options")
is hereby deleted in its entirety and the following is substituted in its place:

         On the Initial Term Expiration Date and so long as no Default or Event
         of Default shall have occurred and be continuing, Lessee shall pay to
         Lessor an amount equal to $1.00. Upon payment in full by Lessee of all
         Rent (and all other sums) payable to Lessor hereunder, Lessor shall
         promptly release its interest in the Equipment and, as applicable, by
         filing all necessary UCC forms to affect such releases.

         6. NATURE OF TRANSACTION; SECURITY AGREEMENT. (a) General. To secure
the prompt payment and performance as and when due of all obligations and
indebtedness of Lessee, now existing or hereafter created, to Lessor pursuant to
this Lease or otherwise, Lessee hereby grants to Lessor a security interest in
the Equipment and all accessions, substitutions and replacements thereto and
therefor, and proceeds (cash and non-cash), including, without limitation,
insurance proceeds thereof (but without power of sale). In furtherance of the
foregoing, Lessee shall execute and deliver to Lessor, to be filed at Lessee's
expense not to exceed ONE HUNDRED DOLLARS AND ZERO CENTS ($100.00), Uniform
Commercial Code financing statements, statements of amendment and statements of
continuation as reasonably may be required by Lessor to perfect and maintain
perfected the security interest granted by Lessee herein.

         (b) Personal Property Tax. Lessee recognizes that, pursuant to Section
18 of the Master Lease, it is Lessee's responsibility to pay any property tax
bills. Lessor and Lessee acknowledge that personal property tax policies vary
from state to state and that, where uncertainty exists as to a particular
state's policies, Lessee shall contact its attorneys or financial advisors (who
may be familiar with such state's personal property tax policy) for advice.
Unless otherwise directed in writing by Lessor or otherwise required by
Applicable Law, Lessee will list itself as owner of all Items of Equipment for
property tax purposes and will promptly pay all such taxes when due. In those
jurisdictions in which Lessor is required to list itself as owner of all such
Items of Equipment, upon receipt by Lessee of any property tax bill pertaining
to such Items of Equipment, Lessee will promptly forward to Lessor such property
tax bill and related payment. Upon receipt by Lessor of any such property tax
bill (whether from Lessee or directly from the taxing authority), Lessor will
pay such tax and will invoice Lessee for the expense if Lessee has not submitted
its payment with such bill. Upon receipt of said invoice (if any), Lessee shall
promptly reimburse Lessor for such expense.

         (c) Disclaimer. LESSEE HEREBY ACKNOWLEDGES THAT LESSOR HAS NOT MADE,
AND HEREBY DISCLAIMS ANY ADVICE, REPRESENTATIONS, WARRANTIES AND COVENANTS,
EITHER EXPRESSED OR IMPLIED, WITH RESPECT TO ANY LEGAL, ECONOMIC, ACCOUNTING,
TAX OR OTHER EFFECTS OF THE LEASE AND THE TRANSACTION(S) CONTEMPLATED THEREBY,
AND LESSEE HEREBY DISCLAIMS ANY RELIANCE ON ANY SUCH WARRANTIES, STATEMENTS OR
REPRESENTATIONS MADE BY LESSOR WITH RESPECT THERETO.

         7. STIPULATED LOSS VALUE; DISCOUNT RATE. (a) There are no Stipulated
Loss Values or Stipulated Loss Value Supplements applicable to the Equipment
described on this Schedule.

         (b) Any provision of this Lease to the contrary notwithstanding, all
present value calculations to be made with respect to the Equipment described on
this Schedule shall be made using a discount rate equal to five percent (5%).

         8. MODIFICATIONS TO MASTER LEASE. With respect to the Equipment
described on this Schedule, the Master Lease shall be modified as follows:

         (a)      Section 6 of the Master Lease ("Ordering Equipment") is hereby
                  deleted in its entirety and the following is substituted in
                  its place:

                                                                     Page 2 of 6
<PAGE>   16
                  Lessee has selected and ordered the Equipment from the
                  Supplier and, if appropriate, has entered into a Purchase
                  Agreement with respect thereto, Lessor may accept an
                  assignment from Lessee of Lessee's rights, but none of
                  Lessee's obligations, under any such Purchase Agreement.
                  Lessee shall arrange for delivery of the Equipment so that it
                  can be accepted in accordance with Section 7 hereof. If an
                  Item of Equipment is subject to an existing Purchase Agreement
                  between Lessee and the Supplier, Lessee warrants that such
                  Item of Equipment has been delivered to Lessee as of the date
                  of the Equipment Schedule applicable thereto. If Lessee causes
                  the Equipment to be modified or altered, or requests any
                  additions thereto prior to the Rent Commencement Date, Lessee
                  (a) acknowledges that any such modification, alteration or
                  addition to an Item of Equipment may affect the Total Cost,
                  taxes, purchase and renewal options (if any), Stipulated Loss
                  Value and Rent with respect to such Item of Equipment, and (b)
                  hereby authorizes Lessor to adjust such Total Cost, taxes,
                  purchase and renewal options (if any), Stipulated Loss Value
                  and Rent as appropriate. Lessee hereby authorizes Lessor to
                  complete each Equipment Schedule with the serial numbers and
                  other identification data of the Equipment Group associated
                  therewith, as such data is received by Lessor.

         (b)      Section 13 of the Master Lease is hereby deleted in its
                  entirety and the following is substituted in its place:

                  [RESERVED]

         (c)      Section 16(b)(3) of the Master Lease is hereby deleted in its
                  entirety and the following is substituted in its place:

                  pay to Lessor an amount, with respect to such Item of
                  Equipment, equal to the Rent then due and owing for such Item
                  of Equipment, plus the Rent payable for such Item of Equipment
                  for the remainder of the Term, after discounting such Rent to
                  present worth on the basis of a per annum rate of discount
                  equal to five percent (5%) from the respective dates upon
                  which such Rent would have been paid had the Loss or Damage
                  not occurred.

         (d)      Section 17(a) of the Master Lease ("Insurance") is hereby
                  amended to delete subsection "(1)" and substitute the
                  following in its place:

                  insurance against all risks of physical loss or damage to the
                  Equipment (including theft and collision for Equipment
                  consisting of motor vehicles) in an amount not less than the
                  full replacement cost thereof.

         (e)      Section 17(b) of the Master Lease ("Insurance") is hereby
                  amended to delete subsection "(8)" and substitute the
                  following in its place:

                  Prior to the first date of delivery of any Item of Equipment
                  hereunder, and thereafter not less than 15 days prior to the
                  expiration dates of the expiring policies theretofore
                  delivered pursuant to this Section, Lessee shall deliver to
                  Lessor a certificate of insurance (or in the case of blanket
                  policies, certificates thereof issued by the insurers
                  thereunder) for the insurance maintained pursuant to this
                  Section.

         (f)      [RESERVED]

         (g)      Section 22(a) of the Master Lease ("Events of Default") is
                  hereby amended to delete subsection "(5)" and substitute the
                  following in its place:

                                                                     Page 3 of 6
<PAGE>   17
                  Lessee or any Guarantor violates or fails to perform any
                  provision of either this Lease or any other loan, lease or
                  credit agreement or any acquisition or purchase agreement with
                  Lessor, its parent, subsidiaries or affiliates

         (h)      Section 22(b) of the Master Lease ("Events of Default") is
                  hereby amended to delete subsection "(7)" and substitute the
                  following in its place:

                  by written notice to Lessee specifying a payment date (the
                  "Remedy Date"), may demand that Lessee pay to Lessor, and
                  Lessee shall pay to Lessor, on the Remedy Date, as liquidated
                  damages for loss of a bargain and not as a penalty, any unpaid
                  Rent due prior to the Remedy Date plus the following amount
                  which Lessor shall specify in such notice (together with
                  interest on such amount at the Default Rate from the Remedy
                  Date to the date of actual payment): an amount, with respect
                  to an Item of Equipment, equal to the Rent payable for such
                  Item of Equipment for the remainder of the then current Term
                  thereof, after discounting such Rent to present worth as of
                  the Remedy Date on the basis of a per annum rate of discount
                  equal to five percent (5%) from the respective dates upon
                  which such Rent would have been paid had this Lease not been
                  canceled or terminated.

         (i)      Section 31(j) of the Master Lease is hereby deleted in its
                  entirety and the following is substituted in its place:

                  the Equipment is being leased hereunder solely for business
                  purposes and that no item of Equipment will be used for
                  personal, family or household purposes. Lessee allows its
                  employees from time to time to use those items of equipment
                  designated as laptop computers for limited personal use. This
                  in no way alters the Lessee's intent to consider such
                  equipment as being solely for business purposes; and

         9. GOVERNING LAW. This Schedule is being delivered in the State of New
York and shall be governed by, and construed in accordance with, the laws of the
State of New York, including all matters of construction, validity and
performance without giving effect to any choice of law or conflict of laws
provision or rule (whether of the State of New York or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of New York.

         10. COUNTERPARTS. This Schedule may be executed in any number of
counterparts, each executed counterpart constituting an original but all
together one and the same instrument.

         11.      MORE THAN ONE LESSEE. If more than one person or entity
                  executes this Schedule, or any other Lease Documents executed
                  in connection herewith, as "Lessee," the obligations of
                  "Lessee" contained herein and therein shall be deemed joint
                  and several and all references to "Lessee" shall apply both
                  individually and jointly.

         12. RELATIONSHIP TO MASTER LEASE; FURTHER ASSURANCES. This Schedule
         shall be construed in connection with and as part of this Lease, and
         all terms contained in the Master Lease are hereby incorporated herein
         by reference with the same force and effect as if such terms were fully
         stated herein. By execution of this Schedule, Lessee and Lessor
         reaffirm all terms of the Master Lease except as they may be modified
         hereby. To the extent that any of the terms of this Schedule are
         contrary to or inconsistent with any terms of the Master Lease, the
         terms of this Schedule shall govern. LESSEE HEREBY CERTIFIES TO LESSOR
         THAT THE REPRESENTATIONS AND WARRANTIES MADE BY LESSEE IN THE MASTER
         LEASE (INCLUDING, WITHOUT LIMITATION, SECTION 31 THEREOF) ARE TRUE AND
         CORRECT IN ALL MATERIAL RESPECTS AS OF THE DATE OF THIS SCHEDULE WITH
         THE SAME EFFECT AS THOUGH MADE ON AND AS OF SUCH DATE. Lessee, at
         Lessor's expense shall

                                                                     Page 4 of 6
<PAGE>   18
         take such additional actions and execute and deliver such additional
         documents as Lessor shall deem necessary from time to time to
         effectuate the terms of this Lease.

(The remainder of this page has been intentionally left blank)

                                                                     Page 5 of 6
<PAGE>   19
         13. POWER OF ATTORNEY. LESSEE HEREBY APPOINTS LESSOR OR ITS ASSIGNEE AS
ITS TRUE AND LAWFUL ATTORNEY IN FACT, IRREVOCABLY AND COUPLED WITH AN INTEREST,
TO EXECUTE AND FILE ON BEHALF OF LESSEE ALL UCC FINANCING STATEMENTS WHICH IN
LESSOR'S SOLE DISCRETION ARE NECESSARY OR PROPER TO SECURE LESSOR'S INTEREST IN
THE EQUIPMENT IN ALL APPLICABLE JURISDICTIONS. Lessee hereby ratifies, to the
extent permitted by law, all that Lessor shall lawfully and in good faith do or
cause to be done by reason of and in compliance with this paragraph.

         IN WITNESS WHEREOF, Lessor and Lessee have caused this Schedule to be
duly executed and delivered on the day and year first above written.

LESSOR:                                       LESSEE:

KEYCORP LEASING,                              SYNAPTICS INCORPORATED
A DIVISION OF KEY CORPORATE CAPITAL INC.

By:      /s/ Ronald M. Bruzdzinski Jr.        By:      /s/ R. J. Knittel
   ___________________________________           _______________________________
Name:    Ronald M. Bruzdzinski Jr.            Name:    R. J. Knittel
Title:   Regional Lease Contract Manager      Title:   CFO

COUNTERPART NO. 1 OF 1 SERIALLY NUMBERED MANUALLY EXECUTED COUNTERPARTS. TO THE
EXTENT THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL
CODE, NO SECURITY INTEREST MAY BE CREATED THROUGH THE TRANSFER AND POSSESSION OF
ANY COUNTERPART OTHER THAN COUNTERPART NO. 1.

                                                                     Page 6 of 6
<PAGE>   20
                                                          Customer Number: 33141
                                                            Lessee Number: 33143
                                                       Lessee Number: 8800020138

                                                                AMENDMENT NO. 01
                                                    TO EQUIPMENT SCHEDULE NO. 01

         THIS AMENDMENT dated as of December 20, 2000 amends that certain
Equipment Schedule No. 01 dated as of November 28, 2000 (the "Schedule") which
incorporates by reference the Master Equipment Lease Agreement dated as of
November 28, 2000 (the "Master Lease"), both between KEYCORP LEASING, A DIVISION
OF KEY CORPORATE CAPITAL INC., as Lessor, and SYNAPTICS INCORPORATED, as Lessee.
Unless otherwise specified herein, all capitalized terms shall have the meanings
ascribed to them in the Master Lease.

         Lessor and Lessee hereby agree that from and after the date hereof, the
Schedule will be amended as follows:

         MODIFICATIONS TO SCHEDULE:

               1.   Changes to Total Cost and Rent: (a) The last sentence of
                    Section 1 ("Equipment") shall be deleted in its entirety and
                    replaced with the following new sentence:

                    The aggregate Total Cost of such Equipment is $499,030.24.

                    (b) The last sentence of Section 3 ("Rent Payment Dates;
                    Rent") shall be deleted in its entirety and replaced with
                    the following new sentence:

                    Each such installment of Rent shall be in an amount equal to
                    $15,545.03.

         EXCEPT AS MODIFIED HEREBY, ALL OF THE TERMS, COVENANTS AND CONDITIONS
OF THE MASTER LEASE AND THE SCHEDULE SHALL REMAIN IN FULL FORCE AND EFFECT AND
ARE IN ALL RESPECTS HEREBY RATIFIED AND AFFIRMED.

         IN WITNESS WHEREOF, Lessor and Lessee have executed this Amendment as
of the date first above written.

LESSOR:                                       LESSEE:

KEYCORP LEASING,                              SYNAPTICS INCORPORATED
A DIVISION OF KEY CORPORATE CAPITAL INC.

By:      /s/ Ronald M. Bruzdzinski Jr.        By:      /s/ R. J. Knittel
________________________________________        ________________________________
Name:    Ronald M. Bruzdzinski Jr.            Name:    R. J. Knittel
Title:   Regional Lease Contract Manager      Title:   CFO

                                                                     Page 1 of 1<PAGE>   1
                                                                   EXHIBIT 10.12

$1,500,000.00                                                    August 12, 1997
                                                            San Jose, California

                             SYNAPTICS INCORPORATED

                 SUBORDINATED SECURED NON-RECOURSE PROMISSORY NOTE

      For good and valuable consideration, the receipt of which is hereby
acknowledge, SYNAPTICS INCORPORATED, a California corporation (the "Company"),
promises to pay to the order of National Semiconductor Corporation (the
"Holder"), the principal sum of One Million Five Hundred Thousand Dollars
($1,500,000.00), plus interest thereon, as set forth below, on the earliest to
occur of (i) the tenth anniversary date of this Note, (ii) when declared due and
payable by the Holder upon the occurrence of an Event of Default (as defined
below), or (iii) upon the sale or liquidation by the Company of any shares of
the capital stock of Foveonics, Inc. held by the Company to the extent of, but
not exceeding, the amount of cash proceeds received by the Company upon each
such sale or liquidation of Foveonics, Inc. capital stock.

      The following is a statement of the rights of the Holder of this Note and
the conditions to which this Note is subject:

      1.    Definitions. As used in this Note, the following temps, unless the
context otherwise requires, have the following meanings:

            1.1   "Company" shall mean Synaptics Incorporated, a California
corporation, and shall include any corporation which shall succeed to or assume
the obligations of the Company under this Note.

            1.2   "Noteholder," "Holder," or similar terms, when the context
refers to a holder of a note shall mean any person who shall at the time be the
holder of this Note.

      2.    Interest. Interest shall accrue from the date of this Note on the
unpaid principal amount at the rote of six percent (6%) per annum until paid,
compounded annually.

      3.    Prepayment. The Company may prepay the principal of or interest on
this Note at any time without premium or penalty.

      4.    Events of Default. If any of the events specified in this Section 4
shall occur (herein individually referred to as an "Event of Default"), the
Holder of the Note may, so long as such condition exists, declare the entire
principal and unpaid accrued interest hereon immediately due and payable, by
notice in writing to the Company:

            (i)   Payment of principal or interest on this Note shall be
delinquent for a period of 10 days or more and such delinquency has not been
cured by the Company within five days after the Holder has given the Company
written notice of such default; or
<PAGE>   2
            (ii)  If the Company shall fail materially to observe any covenant
or other provision contained in this Note (other than with respect to payment)
and such failure of observance shall be continuing for 10 days after the Holder
has given written notice thereof; or

            (iii) The institution by the Company of proceedings to be
adjudicated as bankrupt or insolvent, or the consent by it to institution of
bankruptcy or insolvency proceedings against it or the filing by it of a
petition or answer or consent seeking reorganization or release under the
federal Bankruptcy Act, or any other applicable federal or state law, or the
consent by it to the filing of any such petition or the appointment of a
receiver, liquidator, assignee, trustee or other similar official of the
Company, or of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the taking of corporate action by
the Company in furtherance of any such action; or

            (iv)  If, within 60 days after the commencement of an action against
the Company (and service of process in connection therewith on the Company)
seeking any bankruptcy, insolvency, reorganization, liquidation, dissolution or
similar relief under any present or future statute, law or regulation, such
action shall not have been resolved in favor of the Company or all orders or
proceedings thereunder affecting the operations or the business of the Company
stayed, or if the stay of any such order or proceeding shall thereafter be set
aside, or if, within 60 days after the appointment without the consent or
acquiescence of the Company of any trustee, receiver or liquidator of the
Company or of all or any substantial part of the properties of the Company, such
appointment shall not have been vacated; or

            (v)   Any declared default of the Company under any Senior
Indebtedness (as defined below) that gives the holder thereof the right to
accelerate such Senior Indebtedness, and such Senior Indebtedness is in fact
accelerated by the holder.

      5.    Subordination. The indebtedness evidenced by this Note is hereby
expressly subordinated, to the extent and in the manner hereinafter set forth,
in right of payment to the prior payment in full of all the Company's Senior
Indebtedness, as hereinafter defined.

            5.1   Senior Indebtedness. As used in this Note, the term "Senior
Indebtedness" shall mean the principal of and unpaid accrued interest on (i)
indebtedness of the Company or with respect to which the Company is a guarantor
to banks, insurance companies, lease financing institutions or other financial
institutions regularly engaged in the business of lending money, which is for
money borrowed (or purchase or lease of equipment in the case of lease
financing) by the Company (whether or not secured) in the ordinary course of
business, and (ii) any such indebtedness or any debentures, notes or other
evidence of indebtedness issued in exchange for such Senior Indebtedness, or any
indebtedness arising from the satisfaction of such Senior Indebtedness by a
guarantor.

            5.2   Default on Senior Indebtedness. If there should occur any
receivership, insolvency, assignment for the benefit of creditors, bankruptcy,
reorganization or arrangements with creditors (whether or not pursuant to
bankruptcy or other insolvency laws) sale of all or substantially all of the
assets, dissolution, liquidation or any other marshaling of the assets and
liabilities of the Company, or if this Note shall be declared due and payable
upon the occurrence

                                      -2-
<PAGE>   3
of an event of default with respect to any Senior Indebtedness, then (i) no
amount shall be paid by the Company in respect of the principal of or interest
on this Note at the time outstanding, unless and until the principal of and
interest on the Senior Indebtedness then outstanding shall be paid in full,
except that the Holder shall have the right to proceed against and receive the
Securities pledged by the Company as security for this Note pursuant to the
Security Agreement between the Company and the Holder dated as of the same date
as this Note, and (ii) no claim or proof of claim shall be filed with the
Company by or on behalf of the Holder of this Note that shall assert any right
to receive any payments in respect of the principal of and interest on this
Note, except subject to the payment in full of the principal of and interest on
all of the Senior Indebtedness then outstanding. If there occurs an event of
default that has been declared in writing with respect to any Senior
Indebtedness, or in the instrument under which any Senior Indebtedness is
outstanding, permitting the holder of such Senior Indebtedness to accelerate the
maturity thereof, then, unless and until such event of default shall have been
cured or waived or shall have ceased to exist, or all Senior Indebtedness shall
have been paid in full, no payment shall be made in respect of the principal of
or interest on this Note, unless within 90 days after the happening of such
event of default, the maturity of such Senior Indebtedness shall not have been
accelerated.

            5.3   Effect of Subordination. Subject to the rights, if any, of the
holders of Senior Indebtedness under this Section 5 to receive cash, securities
or other properties otherwise payable or deliverable to the Holder of this Note,
nothing contained in this Section 5 shall impair, as between the Company and the
Holder, the obligation of the Company, subject to the terms and conditions
hereof, to pay to the Holder the principal hereof and interest hereon as and
when the same become due and payable, or shall prevent the Holder of this Note,
upon default hereunder, from exercising all rights, powers and remedies
otherwise provided herein or by applicable law.

            5.4   Subrogation. Subject to the payment in full of all Senior
Indebtedness and until this Note shall be paid in full, the Holder shall be
subrogated to the rights of the holders of Senior Indebtedness (to the extent of
payments or distributions previously made to such holders of Senior Indebtedness
pursuant to the provisions of Section 5 above) to receive payments or
distributions of assets of the Company applicable to the Senior Indebtedness. No
such payments or distributions applicable to the Senior Indebtedness shall, as
between the Company and its creditors, other than the holders of Senior
Indebtedness and the Holder, be deemed to be a payment by the Company to or on
account of this Note; and for the purposes of such subrogation, no payments or
distributions to the holders of Senior Indebtedness to which the Holder would be
entitled except for the provisions of this Section 5 shall, as between the
company and its creditors, other than the holders of Senior Indebtedness and the
Holder, be deemed to be a payment by the Company to or on account of the Senior
Indebtedness.

            5.5   Undertaking. By its acceptance of this Note, the Holder agrees
to execute and deliver such documents as may be reasonably requested from time
to time by the Company or the lender of any Senior Indebtedness in order to
implement the foregoing provisions of this Section 5.

                                      -3-
<PAGE>   4
      6.    Security Agreement. The Company will additionally execute and
deliver the Security Agreement in the form attached hereto as Exhibit A (the
"Security Agreement") as security for the Company's obligation to repay the
principal amount and accrued interest on this Note.

      7.    Non-Recourse. If the Company fails to pay when due the principal of
or interest on this Note, or otherwise fails to comply with any of the
provisions of this Note, the Holder's sole remedy shall be to retain the
Collateral (as defined in the Security Agreement), and the Company shall have no
further obligation to the Holder under this Note or otherwise.

      8.    Miscellaneous.

            8.1   The rights and remedies herein reserved to any party shall be
cumulative and in addition to any other or further rights and remedies available
at law or in equity. The waiver by any party hereto of any breach of any
provision of this Note shall not be deemed to be a waiver of the breach of any
other provision or any subsequent breach of the same provision.

            8.2   This Note shall be governed by and construed in accordance
with the laws of the State of California applicable to contracts entered into
and wholly to be performed in the State of California by California residents.

            8.3   This Note and its terms may be changed, waived or amended by
the written consent of the Company and the Holder.

            8.4   In case any provision contained herein (or part thereof) shall
for any reason be held to be invalid, illegal, or unenforceable in any respect,
such invalidity, illegality, or other unenforceability shall not affect any
other provision (or the remaining part of the affected provision) hereof; but
this Note shall be construed as if such invalid, illegal, or unenforceable
provision (or part thereof) had never been contained herein, but only to the
extent that such provision is invalid, illegal, or unenforceable.

            8.5   Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given on the date of service if served personally or by facsimile, or five days
after the date of mailing if mailed, by first class mail, registered or
certified, postage prepaid. Notices shall be addressed as follows:

            To Holder at:     National Semiconductor Corporation
                              2900 Semiconductor Drive
                              Santa Clara, CA 95051
                              Attention: General Counsel

                                      -4-
<PAGE>   5
            To Company at:    Synaptics Incorporated
                              2698 Orchard Parkway
                              San Jose, CA 95134
                              Attention: Federico Faggin

or to such other address as a party has designated by notice in writing to the
other party in the manner provided by this Section. 8.5.

                             SIGNATURE PAGE FOLLOWS

                                      -5-
<PAGE>   6
      The Company has caused this Note to be duly executed and delivered by its
authorized officer as of the date first above written.

                                    SYNAPTICS INCORPORATED

                                    By:    /s/ Federico Faggin
                                       -----------------------------------------

                                    --------------------------------------------
                                    Name:  Federico Faggin
                                         ---------------------------------------
                                    Title: President
                                          --------------------------------------

                                      -6-

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