Document:

exv10w11

Exhibit 10.11

AVIV REIT, INC.

RESTRICTED STOCK AWARD AGREEMENT

     Aviv REIT, Inc.
(the “Company”), hereby grants to                                     
(the “Participant”), a
non-employee member of the board of directors of the Company (the “Board”), as of                   , 2009
(the “Grant Date”), pursuant to the provisions of the Aviv REIT, Inc. 2009 Long-Term
Incentive Plan (the “Plan”), a Restricted Stock Award (the “Award”) with respect to
                   (                  ) shares of the Company’s Common Stock (“Shares”), upon and subject to the restrictions,
terms and conditions set forth below and in the Plan. Capitalized terms not defined herein shall
have the meanings specified in the Plan.

     1. Award Subject to Agreement. The Award shall be subject to the terms and conditions
of this Agreement.

     2. Rights as a Stockholder. During the Restriction Period (as defined below), the
Participant shall have the right to vote the Shares subject to the Award, to receive any dividends
and other distributions with respect to such Shares (less applicable Required Tax Payments (as
defined below)), at the time such dividends are paid to other holders of the Company’s Common
Stock, with it being understood that such dividends will generally be taxable as ordinary
compensation income during such Restriction Period, and to any other privileges of ownership with
respect to such Shares, unless and until such Shares are forfeited pursuant to Section 3 hereof.

     3. Restriction Period and Vesting.

     (a) Subject to subsections (b) and (c) below and Section 5.8 of the Plan, the Award shall
become fully vested on the first one-year anniversary of the Grant Date; provided,
that, the Participant does not experience a Termination prior to the applicable vesting
date.

     (b) If the Participant experiences a Termination for any reason prior to the applicable
vesting date, then all rights with respect to the Shares subject to the Award shall be forfeited by
the Participant and such Shares shall be cancelled by the Company.

     (c) If a Change in Control occurs prior to the Participant’s Termination and the Award is
unvested on the date of the Change in Control, then the Award shall become fully vested.

     4. Termination of Award. In the event that the Participant shall forfeit any Shares
subject to the Award, the Participant shall, upon the Company’s request, promptly return this
Agreement to the Company for cancellation. Such cancellation shall be effective upon forfeiture
regardless of whether the Participant is requested to return or returns this Agreement.

     5. Custody and Delivery of Certificates Representing Shares. The Shares subject to the
Award may be held by a custodian in book entry form with the restrictions on such Shares duly noted
or, alternatively, the Company may hold the certificate or certificates representing such Shares,
in either case until the Award shall have vested, in whole or in part, pursuant to Section 3
hereof. As soon as practicable after the Shares shall have vested pursuant to Section 3

 

 

hereof, subject to Section 6.3 hereof, the restrictions shall be removed from those of such
Shares that are held in book entry form, and the Company shall deliver to the Participant any
certificate or certificates representing those of such Shares that are held by the Company and
destroy or return to the Participant the stock power or powers relating to such Shares. The
Company shall pay all original issue or transfer taxes and all fees and expenses incident to the
delivery of any vested Shares subject to the Award, except as otherwise provided in Section 6.3.

     6. Additional Terms and Conditions of Award.

     6.1. Nontransferability of Award. The Award may not be transferred by the Participant
other than by will, the laws of descent and distribution or pursuant to the beneficiary designation
procedures approved by the Company consistent with this Agreement. Except to the extent permitted
by the foregoing, the Shares subject to the Award may not be sold, transferred, assigned, pledged,
hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be
subject to execution, attachment or similar process. Upon any attempt to so sell, transfer,
assign, pledge, hypothecate or encumber, or otherwise dispose of such Shares, the Award shall
immediately become null and void.

     6.2. Investment Representation. The Participant hereby represents and covenants that
(a) any Share acquired upon the vesting of the Award will be acquired for investment and not with a
view to the distribution thereof within the meaning of the Securities Act of 1933, as amended (the
“Securities Act”), unless such acquisition has been registered under the Securities Act and any
applicable state securities law; (b) any subsequent sale of any such Shares shall be made either
pursuant to an effective registration statement under the Securities Act and any applicable state
securities laws, or pursuant to an exemption from registration under the Securities Act and such
state securities laws; and (c) if requested by the Company, the Participant shall submit a written
statement, in form satisfactory to the Company, to the effect that such representation (x) is true
and correct as of the date of acquisition of any Shares hereunder or (y) is true and correct as of
the date of any sale of any such Shares, as applicable. As a further condition precedent to the
delivery to the Participant of any Shares subject to the Award, the Participant shall comply with
all regulations and requirements of any regulatory authority having control of or supervision over
the issuance of such Shares and, in connection therewith, shall execute any documents which the
Board, the Committee or any other committee authorized by the Board shall in its sole discretion
deem necessary or advisable.

     6.3. Withholding Taxes.

     (a) As a condition precedent to the delivery to the Participant of any Shares subject to the
Award, the Participant shall, upon request by the Company, pay to the Company such amount of cash
as the Company may be required, under all applicable federal, state, local or other laws or
regulations, to withhold and pay over as income or other withholding taxes (the “Required Tax
Payments”) with respect to the Award. If the Participant shall fail to advance the Required Tax
Payments after request by the Company, the Company may, in its discretion, deduct any Required Tax
Payments from any amount then or thereafter payable by the Company to the Participant.

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     (b) The Participant may, with the consent of the Company, elect to satisfy the Participant’s
obligation to advance the Required Tax Payments by any of the following means: (1) a cash payment
to the Company pursuant to Section 6.3(a), (2) authorizing the Company to withhold from the Shares
otherwise to be delivered to the Participant pursuant to the Award, a number of whole Shares having
a Fair Market Value, determined as of the date the obligation to withhold or pay taxes first arises
in connection with the Award, equal to the Required Tax Payments or (3) any combination of (1) or
(2). The Committee shall have sole discretion to disapprove of an election pursuant the preceding
sentence. Such Shares to be delivered or withheld may not have a Fair Market Value in excess of
the minimum amount of the Required Tax Payments. Any fraction of a Share which would be required
to satisfy such an obligation shall be disregarded and the remaining amount due shall be paid in
cash by the Participant. No certificate representing a Share subject to the Award shall be
delivered until the Required Tax Payments have been satisfied in full.

     6.4. Adjustment. In the event of any stock split, stock dividend, recapitalization,
reorganization, merger, consolidation, combination, exchange of shares, liquidation, spin-off or
other similar change in capitalization or event, or any distribution to holders of the Company’s
Common Stock other than a regular cash dividend, the number and type of securities subject to the
Award and other terms of the Award shall be appropriately adjusted by the Committee. The decision
of the Committee regarding any such adjustment shall be final, binding and conclusive.

     6.5. Compliance with Applicable Law. The Award is subject to the condition that if
the listing, registration or qualification of the Shares subject to the Award upon any securities
exchange or under any law, or the consent or approval of any governmental body, or the taking of
any other action is necessary or desirable as a condition of, or in connection with, the vesting or
delivery of such Shares hereunder, the Shares subject to the Award shall not vest or be delivered,
in whole or in part, unless such listing, registration, qualification, consent or approval shall
have been effected or obtained, free of any conditions not acceptable to the Company. The Company
agrees to use reasonable efforts to effect or obtain any such listing, registration, qualification,
consent or approval.

     6.6. Award Confers No Rights to Continued Service. In no event shall the granting of
the Award or its acceptance by the Participant give or be deemed to give the Participant any right
to continued service with the Company or any affiliate of the Company.

     6.7. Decisions of Committee. The Committee shall have the right to resolve all
questions which may arise in connection with the Award. Any interpretation, determination or other
action made or taken by the Committee regarding the Plan or this Agreement shall be final, binding
and conclusive.

     6.8. Agreement Subject to the Plan. This Agreement is subject to the provisions of
the Plan and shall be interpreted in accordance therewith. The Participant acknowledges receipt of
a copy of the Plan. The Company reserves the right to amend this Agreement to the extent it
determines in its sole discretion such amendment is necessary or appropriate to comply with
applicable law, including but not limited to section 409A of the Code.

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     7. Miscellaneous Provisions.

     7.1. Meaning of Certain Terms. As used herein, the term “vest” shall mean no longer
subject to forfeiture. References in this Agreement to sections of the Code shall be deemed to
refer to any successor section of the Code or any successor internal revenue law.

     7.2. Successors. This Agreement shall be binding upon and inure to the benefit of any
successor or successors of the Company, AAM and their respective affiliates and any person or
persons who shall, upon the death of the Participant, acquire any rights hereunder in accordance
with this Agreement or the Plan.

     7.3. Notices. All notices, requests or other communications provided for in this
Agreement shall be made, if to the Company, to Aviv REIT, Inc., 303 West Madison Street, Suite
2400, Chicago, Illinois 60606, Attention: Chief Executive Officer, and if to the Participant, to
the Participant’s address set forth in the Company’s records. All notices, requests or other
communications provided for in this Agreement shall be made in writing either (a) by personal
delivery to the party entitled thereto, (b) by facsimile with confirmation of receipt, (c) by
mailing in the United States mails to the last known address of the party entitled thereto or (d)
by express courier service. The notice, request or other communication shall be deemed to be
received upon personal delivery, upon confirmation of receipt of facsimile transmission, or upon
receipt by the party entitled thereto if by United States mail or express courier service;
provided, however, that if a notice, request or other communication is not received
during regular business hours, it shall be deemed to be received on the next succeeding business
day of the Company.

     7.4. Governing Law. This Agreement, the Award and all determinations made and actions
taken pursuant hereto and thereto, to the extent not otherwise governed by the laws of the United
States, shall be governed by the laws of the State of Maryland and construed in accordance
therewith without giving effect to conflicts of laws principles.

     7.5. Arbitration. Any dispute or controversy between the Company or its respective
affiliates (including AAM) on the one hand, and the Participant on the other hand, whether arising
out of or relating to this Agreement, the breach of this Agreement, or otherwise, shall be settled
by final and binding arbitration in Cook County, Illinois administered by the American Arbitration
Association, with any such dispute or controversy arising under this Agreement being so
administered in accordance with its Commercial Rules then in effect, and judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction thereof. The arbitrator
shall have the authority to award any remedy or relief that a court of competent jurisdiction could
order or grant, including, without limitation, the issuance of an injunction. Except as necessary
in court proceedings to enforce this arbitration provision or an award rendered hereunder, or to
obtain interim relief, neither a party nor an arbitrator may disclose the existence, content or
results of any arbitration hereunder without the prior written consent of the Company and the
Participant. The Company and the Participant acknowledge that this Agreement evidences a
transaction involving interstate commerce. Notwithstanding any choice of law provision included in
this Agreement, the United States Federal Arbitration Act shall govern the interpretation and
enforcement of this arbitration provision.

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     7.6. Counterparts. This Agreement may be executed in two counterparts each of which
shall be deemed an original and both of which together shall constitute one and the same
instrument.

     7.7. Compliance With the Code. This Agreement is intended to comply with Section 409A
of the Code, and shall be interpreted and construed accordingly. All references in this Agreement
to the Participant’s Termination shall mean the Participant’s separation from service from AAM and
its affiliates within the meaning of Treasury Regulation § 1.409A-1(h). Each amount payable under
this Agreement shall constitute a “separately identified amount” within the meaning of Treasury
Regulation § 1.409A-2(b)(2). The Participant acknowledges that the Company has encouraged the
Participant to consult his own adviser to determine the tax consequences of the Award and that
neither the Company nor its affiliates are providing the Participant with any tax advice with
respect to Section 409A of the Code or otherwise and are not making any guarantees or other
assurances of any kind to the Participant with respect to the tax consequences or treatment of any
amounts payable to the Participant under this Agreement.

* * *

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	 	AVIV REIT, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Craig M. Bernfield 	 
	 	 	Title:  	Chief Executive Officer and President 	 
	 

Accepted this ___day of ___, 2009.

Restricted Stock Award AgreementEXHIBIT 10.1

 

 

 

 

 

 

 

 

EXHIBIT
10.1

 

	

WELLS FARGO

			REVOLVING LINE OF CREDIT
		NOTE
	

  

			 
	

$1,000,000.00

			Irvine, California 

		November 1, 2009

FOR
VALUE RECEIVED, the undersigned Pro-Dex, Inc. ("Borrower")
promises to pay to the order of WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Bank") at its office at Orange County RCBO, 2030
Main Street, Suite #900, Irvine, CA 92614, or
at such other place as the holder hereof may designate, in lawful money of the United
States of America and in immediately available funds, the principal sum of $1,000,000.00,
or so much thereof as may be advanced and be outstanding, with
interest thereon, to be computed on each advance from the date of its
disbursement as set forth herein.

DEFINITIONS:

As
used herein, the following terms shall have the meanings set forth after each,
and any other term defined in this Note shall have the meaning set forth at the
place defined:

1.1   "Business Day" means any day except a
Saturday, Sunday or any other day on which commercial banks in

California are authorized or required by law to close.

1.2   "Fixed
Rate Term" means a period commencing on a Business Day and continuing for 3
months, as designated by Borrower, during which all or a portion of
the outstanding principal balance of this Note bears interest determined in
relation to LIBOR; provided however, that no Fixed Rate Term may be selected
for a principal amount less than $100,000.00; and provided further, that
no Fixed Rate Term shall extend beyond the scheduled maturity date hereof. If any
Fixed Rate Term would end on a day which is not a Business Day, then such Fixed Rate Term shall be
extended to the next succeeding Business Day.

1.3   "LIBOR" means the rate per annum
(rounded upward, if necessary, to the nearest whole 1/8 of 1%)
determined by dividing Base LIBOR by a percentage equal to 100% less any
LIBOR Reserve Percentage.

(a)       "Base
LIBOR" means the rate per annum for United States dollar deposits quoted
by Bank as the Inter-Bank Market Offered Rate, with the understanding
that such rate is quoted by Bank for the purpose of calculating
effective rates of interest for loans making reference thereto, on the first
day of a Fixed Rate Term for delivery of funds on said date for a period of
time approximately equal to the number of days in such Fixed Rate
Term and in an amount approximately equal to the principal amount to which such
Fixed Rate Term applies. Borrower understands and agrees that Bank may base its
quotation of the Inter-Bank Market Offered Rate upon such offers or other
market indicators of the Inter-Bank Market as Bank in its discretion deems
appropriate including, but not limited to, the rate offered for U.S. dollar
deposits on the London
Inter-Bank Market.

(b)     
"LIBOR Reserve Percentage" means the reserve
percentage prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for "Eurocurrency Liabilities" (as
defined in Regulation D of the Federal Reserve Board, as
amended), adjusted by Bank for expected changes in such reserve percentage during
the applicable Fixed Rate Term.

1.4            "Prime
Rate" means at any time the rate of interest most recently announced
within Bank at its principal office as its Prime Rate, with the understanding
that the Prime Rate is one of Bank's base rates and serves as the basis upon
which effective rates of interest are calculated for those loans making
reference thereto, and is evidenced by the recording thereof after its
announcement in such internal publication or publications as Bank may designate.

 

 

 

 

	
  
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2.          INTEREST:

2.1       Interest. The outstanding
principal balance of this Note shall bear interest (computed on the basis of a 360-day
year, actual days elapsed) either (a) at a fluctuating rate per annum 1.50000%
above the Prime Rate in effect
from time to time, or (b) at a fixed rate per annum determined by Bank to be 2.50000%
above LIBOR in effect on the first
day of the applicable Fixed Rate Term. When interest is determined in relation
to the Prime Rate, each change in the
rate of interest hereunder shall become effective on the date each Prime Rate
change is announced within Bank. With
respect to each LIBOR selection option selected hereunder, Bank is hereby
authorized to note the date, principal amount, interest rate and Fixed Rate
Term applicable thereto and any payments made thereon on Bank's books and
records (either manually or by electronic entry) and/or on any schedule attached to this Note, which notations
shall be prima facie evidence of the accuracy of the information noted.

2.2       Selection of Interest Rate Options.
At any time any portion of this Note bears interest determined in relation to LIBOR, it may be continued by Borrower
at the end of the Fixed Rate Term applicable thereto so that all or a portion
thereof bears interest determined in relation to the Prime Rate or to LIBOR for
a new Fixed Rate Term designated by
Borrower. At any time any portion of this Note bears interest determined in
relation to the Prime Rate, Borrower
may convert all or a portion thereof so that it bears interest determined in
relation to LIBOR for a Fixed Rate
Term designated by Borrower. At such time as Borrower requests an advance hereunder
or wishes to select a LIBOR option
for all or a portion of the outstanding principal balance hereof, and at the
end of each Fixed Rate Term, Borrower
shall give Bank notice specifying: (a) the interest rate option selected by Borrower; (b) the principal amount subject
thereto; and (c) for each LIBOR selection, the length of the applicable Fixed Rate Term. Any such notice may be given by
telephone (or such other electronic method as Bank may permit) so long as, with
respect to each LIBOR selection, (i) if requested by Bank, Borrower provides to
Bank written confirmation thereof not
later than 3 Business Days after such notice is given, and (ii) such notice is
given to Bank prior to 10:00 a.m. on
the first day of the Fixed Rate Term, or at a later time during any Business
Day if Bank, at it's sole option but
without obligation to do so, accepts Borrower's notice and quotes a fixed rate
to Borrower. If Borrower does not immediately accept a fixed rate when quoted
by Bank, the quoted rate shall expire
and any subsequent LIBOR request from Borrower shall be subject to a
redetermination by Bank of the applicable
fixed rate. If no specific designation of interest is made at the time any
advance is requested hereunder or at
the end of any Fixed Rate Term, Borrower shall be deemed to have made a Prime
Rate interest selection for such advance or the principal amount to
which such Fixed Rate Term applied.

2.3       Taxes and Regulatory Costs. Borrower
shall pay to Bank immediately upon demand, in addition to any other amounts due or to become due hereunder, any
and all (a) withholdings, interest equalization taxes, stamp taxes or other taxes (except income and franchise
taxes) imposed by any domestic or foreign governmental authority and related in any manner to LIBOR, and
(b) future, supplemental, emergency or other changes in the LIBOR Reserve Percentage, assessment rates imposed
by the Federal Deposit Insurance Corporation, or similar requirements or costs imposed by any domestic or
foreign governmental authority or resulting from compliance by Bank with any request or directive (whether or
not having the force of law) from any central bank or other governmental authority and related in any manner
to LIBOR to the extent they are not included in the calculation of LIBOR. In determining which of the foregoing are
attributable to any LIBOR option available to Borrower hereunder, any reasonable allocation made by Bank
among its operations shall be conclusive and binding upon Borrower.

2.4       Payment of Interest. Interest accrued on this Note shall be payable on
the 1st day of each month, commencing December 1, 2009.

2.5
      Default Interest. From and after the maturity date of this Note,
or such earlier date as all principal owing hereunder becomes due
and payable by acceleration or otherwise, or at Bank's option upon the
occurrence, and during the continuance of an Event of
Default, the outstanding principal balance of this Note shall bear interest at an
increased rate per annum (computed on the basis of a 360-day year, actual days
elapsed) equal to 4% above the rate of interest from time to time applicable to
this Note.

	
  
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3.          BORROWING AND REPAYMENT:

3.1       Borrowing and Repayment. Borrower
may from time to time during the term of this Note borrow, partially or wholly repay its outstanding borrowings, and
reborrow, subject to all of the limitations, terms and conditions of this Note and of the Credit Agreement between
Borrower and Bank defined below; provided however, that the total outstanding borrowings under this Note shall
not at any time exceed the principal amount stated above. The unpaid principal balance of this obligation at
any time shall be the total amounts advanced hereunder by the holder hereof less the amount of principal payments
made hereon by or for Borrower, which balance may be endorsed hereon from time
to time by the holder. The outstanding principal balance of this Note shall be
due and payable in full on November 1,
2010.

3.2       Advances. Advances hereunder, to
the total amount of the principal sum available hereunder, may be made by the holder at the oral or written request
of (a) Mark P. Murphy or Jeffrey Ritchey, any one acting alone, who are authorized to request advances and direct
the disposition of any advances until written notice of the revocation of such
authority is received by the holder at the office designated above, or (b) any
person, with respect to advances
deposited to the credit of any deposit account of Borrower, which advances,
when so deposited, shall be
conclusively presumed to have been made to or for the benefit of Borrower
regardless of the fact that persons
other than those authorized to request advances may have authority to draw
against such account. The holder shall
have no obligation to determine whether any person requesting an advance is or
has been authorized by Borrower.

3.3       Application
of Payments. Each payment made on this Note shall be credited first, to any
interest then due and second, to the
outstanding principal balance hereof. All payments credited to principal shall
be applied first, to the outstanding principal balance of this Note which bears
interest determined in relation to the Prime Rate, if any, and second, to the outstanding principal
balance of this Note which bears interest determined in relation to LIBOR,
with such payments applied to the oldest Fixed Rate Term first.

4.         PREPAYMENT:

4.1       Prime Rate.
Borrower may prepay principal on any portion of this Note which bears interest
determined in relation to the Prime Rate at any time, in any amount and
without penalty.

4.2       LIBOR. Borrower may prepay
principal on any portion of this Note which bears interest determined in relation to LIBOR at any time and in the minimum
amount of $100,000.00; provided however, that if the outstanding principal balance of such portion of
this Note is less than said amount, the minimum prepayment amount shall be the entire outstanding principal
balance thereof. In consideration of Bank providing this prepayment option to Borrower, or if any such
portion of this Note shall become due and payable at any time prior to the last day of the Fixed Rate Term
applicable thereto by acceleration or otherwise, Borrower shall pay to Bank immediately upon demand a fee which is the sum
of the discounted monthly differences for each month from the month of prepayment through the month in
which such Fixed Rate Term matures, calculated as follows for each such
month:

(a)      
Determine the amount of interest
which would have accrued each month on the amount prepaid at the
interest rate applicable to such amount had it remained outstanding until the
last day of the Fixed Rate Term applicable thereto.

(b)       Subtract from the amount
determined in (a) above the amount of interest which would have accrued for the same
month on the amount prepaid for the remaining term of such Fixed Rate Term at
LIBOR in effect on the date of prepayment for new loans made for such term and in
a principal amount equal to the amount prepaid.

(c)       
If the result obtained in (b) for any month is greater
than zero, discount that difference by LIBOR used in (b) above.

	
  
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Borrower
acknowledges that prepayment of such amount may result in Bank incurring
additional costs, expenses and/or
liabilities, and that it is difficult to ascertain the full extent of such
costs, expenses and/or liabilities. Borrower,
therefore, agrees to pay the above-described prepayment fee and agrees that
said amount represents a reasonable
estimate of the prepayment costs, expenses and/or liabilities of Bank. If
Borrower fails to pay any prepayment
fee when due, the amount of such prepayment fee shall thereafter bear interest
until paid at a rate per annum 2.000%
above the Prime Rate in effect from time to time (computed on the basis of
a 360-day year, actual days elapsed).

5.           EVENTS OF DEFAULT:

This Note is made pursuant to and is subject to
the terms and conditions of that certain Credit Agreement between Borrower and Bank dated as of November
1, 2007, as amended from time to time (the "Credit Agreement"). Any default in the payment or
performance of any obligation under this Note, or any defined event of
default under the Credit Agreement, shall constitute an "Event of
Default" under this Note.

6.          MISCELLANEOUS:

6.1        Remedies. Upon the occurrence of
any Event of Default, the holder of this Note, at the holder's option, may declare all sums of principal and interest
outstanding hereunder to be immediately due and payable without presentment,
demand, notice of nonperformance, notice of protest, protest or notice of
dishonor, all of which are expressly
waived by Borrower, and the obligation, if any, of the holder to extend any
further credit hereunder shall
immediately cease and terminate. Borrower shall pay to the holder immediately
upon demand the full amount of all
payments, advances, charges, costs and expenses, including reasonable
attorneys' fees (to include outside
counsel fees and all allocated costs of the holder's in-house counsel),
expended or incurred by the holder in connection with the enforcement of the
holder's rights and/or the collection of any amounts which become due to the holder under this Note, and the prosecution
or defense of any action in any way related to this Note, including without limitation, any action for
declaratory relief, whether incurred at the trial or appellate level, in an arbitration proceeding or otherwise, and including
any of the foregoing incurred in connection with any bankruptcy proceeding (including without
limitation, any adversary proceeding, contested matter or motion brought
by Bank or any other person) relating to Borrower or any other person or
entity.

6.2        Obligations Joint and Several. Should more than one person or entity sign this Note as a Borrower, the
obligations of each such Borrower shall be joint and several.

6.3        Governing Law. This Note shall
be governed by and construed in accordance with the laws of the State of California.

IN WITNESS WHEREOF, the undersigned has executed
this Note as of the date first written above. Pro-Dex, Inc.

	
  
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FIFTH AMENDMENT TO CREDIT
AGREEMENT

THIS
AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered into as
of November 1, 2009, by and between PRO-DEX, INC., a Colorado corporation
("Borrower"), and WELLS FARGO BANK, NATIONAL ASSOCIATION
("Bank").

RECITALS

WHEREAS, Borrower is currently
indebted to Bank pursuant to the terms and conditions of that certain Credit Agreement between Borrower and
Bank dated as of November 1, 2007, as amended from time to time ("Credit
Agreement").

WHEREAS, Bank and Borrower have
agreed to certain changes in the terms and conditions set forth in the Credit
Agreement and have agreed to amend the Credit Agreement to reflect said
changes.

NOW, THEREFORE, for valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree that the Credit Agreement shall be amended as follows:

1.           Section 1.1. (a) is hereby amended by
deleting "November 1, 2009" as the last day on which Bank will make advances under the Line of Credit, and by
substituting for said date "November 1, 2010," with such change to be
effective upon the execution and delivery to Bank of a promissory note dated as
of November 1, 2009 (which promissory note shall replace and be deemed the Line
of Credit Note defined in and made pursuant to the Credit Agreement) and
all other contracts, instruments and documents required by Bank to evidence
such change.

2.           Section 1.4. (c) is hereby
deleted in its entirety. and the following substituted therefor:

"(c) Unused Commitment Fee. Borrower shall pay to Bank a fee equal to one and one-half percent (1.50%)
per annum (computed on the basis of a 360-day
year, actual days elapsed) on the average daily unused amount of the
Line of Credit, which fee shall be calculated on a quarterly basis by Bank and
shall be due and payable by Borrower in
arrears on each March 31, June 30, September 30 and December 31."

3.           Section 4.9. (c) is hereby
deleted in its entirety, and the following substituted therefor:

"(c)       Net income after taxes not less than $1.00 on
a trailing 12 month basis, determined
as of each fiscal year end, and pre-tax
profit not less than $1.00 on a quarterly basis, determined as of each
fiscal quarter end."

4.           Section 4.9. (d) is hereby deleted in
its entirety, without substitution.

 

	
  
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5.          Section 6.1. is hereby deleted in its entirety, and the
following substituted therefor:

          "SECTION 6.1.             The occurrence of any of the following shall constitute an "Event
of Default" under this Agreement:

(a)                
Borrower shall fail to pay when due
any principal, interest, fees or other amounts payable under any of the Loan
Documents.

(b)                
Any financial statement or
certificate furnished to Bank in connection
with, or any representation or warranty made by Borrower or any other
party under this Agreement or any other Loan Document shall prove to be
incorrect, false or misleading in any material respect when furnished or made.

(c)                
Any
default in the performance of or compliance with any obligation, agreement or other provision contained herein or
in any other Loan Document (other than those specifically described as an
"Event of Default" in this section 6.1), and with respect to any such
default that by its nature can be cured, such default shall continue for a
period of twenty (20) days from its occurrence.

(d)                
Any default in the payment or
performance of any obligation, or any defined event of default, under the terms
of any contract, instrument or document (other than any of the Loan Documents) pursuant to which Borrower, any
guarantor hereunder or any general
partner or joint venturer in Borrower if a partnership or joint venture
(with each such guarantor, general partner and/or joint venturer referred to
herein as a "Third Party Obligor") has incurred any debt or other
liability to any person or entity, including Bank.

(e)                
Borrower or any Third Party
Obligor shall become insolvent, or shall
suffer or consent to or apply for the appointment of a receiver,
trustee, custodian or liquidator of itself or any of its property, or shall generally fail to pay its debts
as they become due, or shall make a
general assignment for the benefit of creditors; Borrower or any Third
Party Obligor shall file a voluntary petition
in bankruptcy, or seeking reorganization, in order to effect a plan or other arrangement with creditors or any
other relief under the Bankruptcy Reform Act, Title 11 of the United
States Code, as amended or recodified from time to time ("Bankruptcy
Code"), or under any state or federal law granting relief to debtors,
whether now or hereafter in effect; or Borrower or any Third Party Obligor
shall file an answer admitting the jurisdiction of the court and the material allegations of any involuntary
petition; or Borrower or any Third
Party Obligor shall be adjudicated a bankrupt, or an order for relief
shall be entered against Borrower

	
  
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or any
Third Party Obligor by any court of competent jurisdiction under the Bankruptcy Code or any other applicable
state or federal law relating to bankruptcy, reorganization or other
relief for debtors.

(f)              
The filing of a notice of judgment
lien against Borrower or any Third Party Obligor; or the recording of any abstract of judgment against Borrower or any Third
Party Obligor in any county in which
Borrower or such Third Party Obligor has an interest in real property; or the service of a notice of levy and/or
of a writ of attachment or execution, or other like process, against the
assets of Borrower or any Third Party Obligor; or the entry of a judgment
against Borrower or any Third Party Obligor; or any involuntary petition or proceeding pursuant to the Bankruptcy Code
or any other applicable state or federal law relating to bankruptcy,
reorganization or other relief for debtors is filed or commenced against
Borrower or any Third Party Obligor.

(g)               
There shall exist or occur any event or condition that Bank in good faith believes impairs, or is
substantially to impair, the prospect of payment or performance by
Borrower, any Third Party Obligor, or the
general partner of either if such entity is a partnership, of its
obligations under any of the Loan Documents.

(h)               
The death or incapacity of Borrower or any Third Party Obligor if an
individual. The dissolution or liquidation of Borrower or any Third
Party Obligor if a corporation, partnership, joint venture or other type of
entity; or Borrower or any such Third Party Obligor, or any of its directors,
stockholders or members, shall take action seeking to effect the dissolution or
liquidation of Borrower or such Third Party Obligor.

(i)                 
Any change in control of Borrower or any entity or combination of
entities that directly or indirectly control Borrower, with
"control" defined as ownership of an aggregate of twenty-five percent
(25%) or more of the common stock, members' equity or other ownership interest (other than a limited partnership interest)."

6.                  
Except as specifically provided
herein, all terms and conditions of the Credit Agreement remain in full force
and effect, without waiver or modification. All terms defined in the Credit
Agreement shall have the same meaning when used in this Amendment. This
Amendment and the Credit Agreement shall be read together, as one document.

7.                  
Borrower hereby remakes all
representations and warranties contained in the Credit Agreement and reaffirms all covenants set forth therein. Borrower
further certifies that as of the date
of this Amendment there exists no Event of Default as defined in the Credit Agreement, nor any condition, act or event which
with the giving of notice or the passage of time or both would
constitute any such Event of Default.

	
  
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IN WITNESS
WHEREOF, the parties hereto have caused this Amendment to be executed as of
the day and year first written above.

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