NOTE 7 - LONG-TERM BORROWINGS

Long-term borrowings consist of the following:

	October 30, 2016		November 1, 2015

3.25% convertible senior notes due in April 2019	$	57,500	$	57,500

3.25% convertible senior notes due in April 2016		-		57,500

2.77% capital lease obligation payable through July 2018		10,067		15,346

3.09% capital lease obligation payable through March 2016		-		2,269

		67,567		132,615
Less current portion		5,428		65,495
	$	62,139	$	67,120

In April 2016 $57.5 million of the Company’s senior convertible notes matured. The Company repaid $50.1 million to noteholders and issued approximately 0.7 million shares to noteholders that elected to convert their notes to common stock. The notes were exchanged at the rate of approximately 96 shares per $1,000 note principle, equivalent to a conversion rate of $10.37 per share.

In January 2015 the Company privately exchanged $57.5 million in aggregate principal amount of its 3.25% convertible senior notes with a maturity date of April 1, 2016, for new 3.25% convertible senior notes with an aggregate principal amount of $57.5 million with a maturity date of April 1, 2019. The conversion rate of the new notes is the same as that of the exchanged notes, which were issued in March 2011 with a conversion rate of approximately 96 shares of common stock per $1,000 note principal, equivalent to a conversion price of $10.37 per share of common stock, and is subject to adjustment upon the occurrence of certain events, which are described in the indenture dated January 22, 2015. Note holders may convert each $1,000 principal amount of notes at any time prior to the close of business on the second scheduled trading day immediately preceding April 1, 2019, and the Company is not required to redeem the notes prior to their maturity date. Interest on the notes accrues in arrears, and is paid semiannually through the notes’ maturity date.

The Company’s credit facility, which expires in December 2018, has a $50 million limit with an expansion capacity to $75 million, and is secured by substantially all of the Company’s assets located in the United States and common stock the Company owns in certain of its foreign subsidiaries. The credit facility precludes the Company from paying cash dividends, and is subject to a minimum interest coverage ratio, total leverage ratio and minimum unrestricted cash balance financial covenants, all of which the Company was in compliance with at October 30, 2016. The Company had no outstanding borrowings against the credit facility at October 30, 2016, and $50 million was available for borrowing. The interest rate on the credit facility (1.78% at October 30, 2016) is based on the Company’s total leverage ratio at LIBOR plus a spread, as defined in the credit facility.

In August 2013 a $26.4 million principal amount, five year capital lease commenced to fund the purchase of a high-end lithography tool. Payments under the capital lease, which bears interest at 2.77%, are $0.5 million per month through July 2018. The lease is subject to a cross default with cross acceleration provision related to certain nonfinancial covenants incorporated in the Company’s credit facility. As of October 30, 2016, the total amount payable through the end of the lease term was $10.3 million, of which $10.1 million represented principal and $0.2 million represented interest.

In April 2011 the Company entered into a five year, $21.2 million capital lease for manufacturing equipment. Payments under the lease, which bore interest at 3.09%, were $0.4 million per month through March 2016. The lease included a cross default with cross acceleration provision related to certain non-financial covenants incorporated in the Company's credit facility. In March 2016 the Company paid the final installment on this lease and assumed ownership of the related equipment.

As of October 30, 2016, minimum lease payments under the Company's capital lease obligation was as follows:

Fiscal Years:

2017	$	5,638
2018		4,698
		10,336
Less interest		269
Net minimum lease payments under capital lease		10,067
Less current portion of net minimum lease payments		5,428
Long-term portion of minimum lease payments	$	4,639

Interest payments were $3.2 million, $4.4 million, and $6.3 million in fiscal years 2016, 2015 and 2014, respectively, and included deferred financing cost payments of $0.3 million in fiscal year 2014.