Exhibit 10.1

AMENDED AND RESTATED CREDIT AGREEMENT

(LINE OF CREDIT)

(LETTER OF CREDIT SUB-FACILITY)

This Agreement (this “Agreement”) is made and entered into as of December 6,
2013, by and between BANK OF THE WEST (the “Bank”) and IXYS CORPORATION (the
“Borrower”).

The Bank and the Borrower are parties to that certain Credit Agreement dated as
of November 13, 2009, as amended by that certain First Amendment to Credit
Agreement dated as of February 17, 2010 and that certain Second Amendment to
Credit Agreement dated as of December 29, 2010 (as amended, the “Existing Credit
Agreement”).

The Bank and the Borrower wish to amend and restated the Existing Credit
Agreement in its entirety, on the terms and conditions that follow:

SECTION

1

DEFINITIONS

1.1   Certain Defined Terms: Unless elsewhere defined in this Agreement, the
following terms shall have the following meanings (such meanings to be generally
applicable to the singular and plural forms of the terms defined):

  1.1.1   “Advance”: shall mean an advance to the Borrower under the credit
facility described in Section 2 hereof.

  1.1.2   “Alternate Base Rate”: shall mean, for any day, a rate per annum equal
to the greatest of (a) the Prime Rate in effect on such day or, (b) the Federal
Funds Rate in effect on such day plus 0.5% or (c) the Applicable Floating Rate
on such day (or, if such day is not a Business Day, the immediately preceding
Business Day). Any change in the Alternate Base Rate due to a change in the
Prime Rate or, the Federal Funds Rate or the Applicable Floating Rate shall be
effective from and including the effective date of such change in the Prime Rate
or, the Federal Funds Rate or the Applicable Floating Rate, respectively.

  1.1.3   “Alternate Base Rate Advance”: shall have the meaning set forth in
Section 2.1.4(i) hereof.

  1.1.4   “Applicable Floating Rate”: shall mean, as of any date:

  (i)   With respect to Alternate Base Rate Advances (a) the One-Month LIBOR
Rate on such day multiplied by the Statutory Reserve Rate plus (b) 1.00%, where
“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board of Governors of the Federal Reserve System with respect
to the One-Month LIBOR Rate for Eurocurrency funding (currently referred to as
“Eurocurrencies Liabilities” in Regulation D of the Board of Governors of the
Federal Reserve System), including those reserve percentages imposed pursuant to
Regulation D, adjusted automatically and as of the effective date of any change
in any reserve percentage.

  (ii)   With respect to Applicable Floating Rate Advances, the One-Month LIBOR
Rate on such day multiplied by the Statutory Reserve Rate where “Statutory
Reserve Rate” means a fraction (expressed as a decimal), the numerator of which
is the number one and the denominator of which is the number one minus the
aggregate of the maximum reserve percentages (including any marginal, special,
emergency or supplemental reserves) expressed as a decimal established by the
Board of Governors of the Federal Reserve System with respect to the One-Month
LIBOR Rate for Eurocurrency funding (currently referred to as “Eurocurrencies
Liabilities” in Regulation D of the Board of Governors of the Federal Reserve
System), including those reserve percentages Imposed pursuant to Regulation D,
adjusted automatically and as of the effective date of any change in any reserve
percentage.

  1.1.5   “Applicable Floating Rate Advance”: shall have the meaning set forth
in Section 2.1.4(ii) hereof.

  1.1.6   “Applicable Margin”: means, from time to time, the following
percentages per annum (expressed in basis points) based upon the Pricing
Leverage Ratio as calculated based on financial statements delivered to the Bank
pursuant to Section 5.1(i) and Section 5.1(ii) hereof:

                                              Applicable                    
Margin (LIBOR   Applicable                 Advances and   Margin                
Applicable   (Alternate Base   Applicable Margin             Floating Rate  
Rate   (Unused Tier   Pricing Leverage Ratio   Advances)   Advances)  
Commitment Fee)   1    
Less than 0.50 to 1.00
    175.00       75.00       25.00          
 
                          2    
Greater than or equal
to 0.50 to 1.00 but
less than 1.00 to
1.00
  200.00

  100.00

  37.50

       
 
                          3    
Greater than or equal
to 1.00 to 1.00 but
less than 1.50 to
1.00
  225.00

  125.00

  50.00

       
 
                          4    
Greater than or equal
to 1.50 to 1.00
  250.00

  150.00

  62.50

       
 
                       

Any increase or decrease in the Applicable Margin resulting from a change in the
Pricing Leverage Ratio shall become effective as of the date that is the earlier
of: (a) the last date by which the Borrower is otherwise required to deliver the
financial statements in accordance with Section 5.1(i) or Section 5.1(ii) hereof
for a given period (each such date, a “calculation date”); and (b) the date that
is two (2) Business Days after the date (prior to the related calculation date)
on which the Borrower actually delivers the financial statements in accordance
with Section 5.1(i) or Section 5.1(ii) hereof for such period; provided that the
Applicable Margin in effect from the Closing Date to the date that is two (2)
Business Days following receipt by the Bank of the timely delivered financial
statements with respect to the fiscal quarter ending September 30, 2013 shall be
determined based upon Tier 2; provided further that, if any financial statements
required to be delivered in accordance with Section 5.1(i) or Section 5.1(ii)
hereof for any given period are not delivered to the Bank on or before the
related calculation date, then Tier 4 shall apply, effective on the related
calculation date until two (2) Business Days after such financial statements are
actually received by the Bank. Notwithstanding anything in the foregoing to the
contrary, in the event the Borrower or the Bank determines, in good faith, that
the calculation of the Pricing Leverage Ratio on which any Applicable Margin for
any particular period is inaccurate and as a consequence thereof any Applicable
Margin as determined based thereon was lower than it would have been had the
Pricing Leverage Ratio been calculated accurately, (a) the Borrower shall
promptly (but in any event no later than two (2) Business Days after the
Borrower discovers such inaccuracy or is otherwise notified by the Bank of such
inaccuracy), deliver to the Bank corrected financial statements for such period
(and if such financial statements are not accurately restated and delivered
within ten (10) days after the first discovery of such inaccuracy by the
Borrower or such notice, as the case may be, then Tier 4 shall apply
retroactively for such period until such time as the corrected financial
statements are delivered and, from and after the delivery of such corrected
financial statements to the Bank, the corrected Applicable Margin shall apply
for such period), (b) the Bank shall determine and notify the Borrower of the
amount of interest that would have been due in respect of any outstanding
Obligations during such period had the Applicable Margin been determined based
on an accurate Pricing Leverage Ratio (or, to the extent applicable, Tier 4 if
such corrected financial statements were not timely delivered as provided for
herein) and (c) the Borrower shall promptly pay to the Bank the difference, if
any, between that amount and the amount actually paid in respect of such period.
The foregoing shall in no way limit the rights of the Bank to impose the default
interest rate specified in Section 8.2 hereof or to exercise any other remedy
available at law or as provided hereunder.

  1.1.7   “Business Day”: shall mean a day, other than a Saturday or Sunday, on
which commercial banks are open for business in California.

  1.1.8   “Contingent Collateral Agreement”: shall mean a contingent collateral
agreement in form and substance reasonably satisfactory to the Bank.

  1.1.9   “Current Liabilities”: shall mean, as of any date of determination
thereof, current liabilities of the Borrower and its Subsidiaries as determined
in accordance with United States generally accepted accounting principles.

  1.1.10   “Domestic Cash”: shall mean the aggregate amount of all cash
maintained by the Borrower and its Subsidiaries in accounts located in the
United States.

  1.1.11   “EBITDA”: shall mean, for any period, the sum of the following
determined on a consolidated basis, without duplication, for the Borrower and
its Subsidiaries: (a) net income (or loss) for such period plus (b) the sum of
the following to the extent deducted in determining net income for such period
(i) interest expense for such period, (ii) taxes for such period,
(iii) depreciation and amortization expense for such period, (iv) non-cash stock
compensation expense for such period, and (v) extraordinary, non-recurring
non-cash losses during such period less (c) extraordinary, non-recurring
non-cash gains during such period.

  1.1.12   “Environmental Claims”: shall mean all claims, however asserted, by
any governmental authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law or for release or injury
to the environment or threat to public health, personal injury (including
sickness, disease or death), property damage, natural resources damage, or
otherwise alleging liability or responsibility for damages (punitive or
otherwise), cleanup, removal, remedial or response costs, restitution, civil or
criminal penalties, injunctive relief, or other type of relief, resulting from
or based upon (a) the presence, placement, discharge, emission or release
(including intentional and unintentional, negligent and non-negligent, sudden or
non-sudden, accidental or non-accidental placement, spills, leaks, discharges,
emissions or releases) of any Hazardous Material at, in, or from property,
whether or not owned by the Borrower, or (b) any other circumstances forming the
basis of any violation, or alleged violation, of any Environmental Law.

  1.1.13   “Environmental Laws”: shall mean all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any governmental
authorities, in each case relating to environmental, health, safety and land use
matters; including but not limited to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (“CERCLA”), the Clean Air Act, the
Federal Water Pollution Control Act of 1972, the Solid Waste Disposal Act, the
Federal Resource Conservation and Recovery Act, the Toxic Substances Control
Act, the Emergency Planning and Community Right-to-Know Act, the California
Hazardous Waste Control Law, the California Solid Waste Management, Resource,
Recovery and Recycling Act, the California Water Code and the California Health
and Safety Code.

  1.1.14   “Environmental Permits”: shall have the meaning set forth in
Section 4.12 hereof.

  1.1.15   “ERISA”: shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, including (unless the context otherwise
requires) any rules or regulations promulgated thereunder.

  1.1.16   “Event of Default”: shall have the meaning set forth in Section 6
hereof.

  1.1.17   “Expiration Date”: shall mean November 30, 2015, or the date of
termination of the Bank’s commitment to lend under this Agreement pursuant to
Section 7 hereof, whichever shall occur first.

  1.1.18   “Federal Funds Rate”: shall mean, for any day, the weighted average
(rounded upwards, if necessary to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Bank from three Federal funds brokers of recognized
standing selected by it.

  1.1.19   “Guarantor”: shall mean each of IXYS USA, INC. and IXYS INTEGRATED
CIRCUITS DIVISION INC. (fka, CLARE, INC.)

  1.1.20   “Guaranty”: shall mean a continuing guaranty agreement of the
Obligations, in form and substance reasonably satisfactory to the Bank.

  1.1.21   “Hazardous Materials”: shall mean all those substances which are
regulated by, or which may form the basis of liability under, any Environmental
Law, including all substances identified under any Environmental Law as a
pollutant, contaminant, hazardous waste, hazardous constituent, special waste,
hazardous substance, hazardous material, or toxic substance, or petroleum or
petroleum derived substance or waste.

  1.1.22   “Indebtedness”: shall mean, with respect to the Borrower or any of
its Subsidiaries, all (a) indebtedness for borrowed money or for the deferred
purchase price of property or services for which the Borrower or any of its
Subsidiaries is liable, contingently or otherwise, or in respect of which the
Borrower or any of its Subsidiaries otherwise assures a creditor against loss,
(b) obligations under capital leases, determined in accordance with United
States generally accepted accounting principles as in effect on November 1,
2013, for which the Borrower or any of its Subsidiaries is liable, contingently
or otherwise, or in respect of which the Borrower or any of its Subsidiaries
otherwise assures a creditor against loss, and (c) obligations arising under an
arrangement with any Person providing for the leasing by the Borrower or any of
its Subsidiaries of real or personal property that has been sold or otherwise
transferred to such Person; provided, however, that for each of the foregoing
clauses (a), (b) and (c) any indebtedness or other obligation solely between or
among the Borrower and/or any of its Subsidiaries shall be excluded. The word
“Indebtedness” also includes expenses incurred by the Bank to enforce
obligations of the Borrower under this Agreement, together with interest on such
amounts as provided in this Agreement, and all other obligations, debts, and
liabilities of the Borrower to the Bank as well as all claims by the Bank
against the Borrower that are now or hereafter existing, voluntary or
involuntary, due or not due, absolute or contingent, liquidated or unliquidated,
whether the Borrower may be liable individually or jointly with others, whether
recovery upon such Indebtedness may be or hereafter may become barred by any
statute of limitations, and whether such Indebtedness may be or hereafter may
become otherwise unenforceable.

  1.1.23   “Leverage Ratio”: shall mean, as of any date of determination
thereof, the ratio of Total Funded Indebtedness as at such date to EBITDA for
the four (4) fiscal quarters ended on such date.

      1.1.24
1.1.25
1.1.26
1.1.27
1.1.28  
“LIBOR Advance”: shall have the meaning set forth in Section 2.1.4(iii) hereof.
“LIBOR Interest Period”: shall have the meaning set forth in Section 2.1.4(iii)
hereof.
“LIBOR Rate”: shall have the meaning set forth in Section 2.1.4(iii) hereof.
“Line Account”: shall have the meaning set forth in Section 2.3 hereof.
“Line of Credit”: shall mean the credit facility described as such in Section 2
hereof.

  1.1.29   “Loan Documents”: shall mean this Agreement, the Guaranties, the
Notices of Negative Pledge, the Contingent Collateral Agreement and all other
documents delivered by any Loan Party to the Bank in connection herewith.

  1.1.30   “Loan Parties”: shall mean, collectively, the Borrower and the
Guarantors.

  1.1.31   “Material Adverse Change”: shall mean any of the following: (a) a
material adverse change in, or a material adverse effect upon, the operations,
business, properties or condition (financial or otherwise) of the Borrower and
its Subsidiaries, taken as a whole; (b) a material impairment of the ability of
the Borrower to perform its payment obligations under any of the Loan Documents;
or (c) a material adverse effect upon the legality, validity, binding effect or
enforceability of any Loan Document.

  1.1.32   “Notice of Negative Pledge”: shall mean a notice of negative pledge,
substantially in the form attached hereto as Exhibit A, which notice shall, by
its terms, expire on the Expiration Date.

  1.1.33   “Obligations”: shall mean all amounts owing by the Borrower to the
Bank pursuant to this Agreement Including, but not limited to, the unpaid
principal amount of any loans or advances.

  1.1.34   “One-Month LIBOR Rate”: shall mean, for any day, the rate of interest
per annum that is equal to the one month LIBOR rate appearing on Reuters Screen
LIBOR01 Page (or on any successor or substitute page of such page) at
approximately 11:00 a.m. London time on such day.

  1.1.35   “Ordinary Course of Business”: shall mean, with respect to any
transaction involving the Borrower or any of its Subsidiaries or affiliates, the
ordinary course of the Borrower’s business, as conducted by the Borrower in
accordance with past practice and undertaken by the Borrower in good faith and
not for the purpose of evading any covenant or restriction in this Agreement or
in any other document, instrument or agreement executed in connection herewith.

  1.1.36   “Permitted Liens”: shall mean: (a) liens and security interests
securing Indebtedness owed by the Borrower or any of its Subsidiaries to the
Bank; (b) liens for taxes, assessments or similar charges not yet due; (c) liens
of materialmen, mechanics, warehousemen, or carriers or other like liens arising
in the Ordinary Course of Business and securing obligations which are not yet
delinquent; (d) purchase money liens or purchase money security interests upon
or in any property acquired or held by the Borrower or any of its Subsidiaries
in the Ordinary Course of Business to secure Indebtedness of the Borrower or its
Subsidiaries outstanding on the date hereof or permitted by Section 5.18 hereof;
(e) liens and security interests which, as of the date hereof, have been
disclosed to and approved by the Bank in writing; (f) those liens and security
interests which in the aggregate constitute an immaterial and insignificant
monetary amount with respect to the net value of the assets of the Borrower or
any of its Subsidiaries; and (g) liens and security interests securing
Indebtedness of the Borrower or its Subsidiaries permitted by Section 5.11
hereof.

  1.1.37   “Person”: shall mean any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership or
other entity.

  1.1.38   Pricing Leverage Ratio”: shall mean, as of any date of determination
thereof, the ratio of total liabilities (excluding any outstanding letters of
credit) of the Borrower and its Subsidiaries to Total Net Worth.

  1.1.39   “Prime Rate”: shall mean an index for a variable interest rate which
is quoted, published or announced by the Bank as its prime rate and as to which
loans may be made by the Bank at, above or below such rate.

  1.1.40   “Real Property”: shall mean the real property located at the
following addresses: 1590 Buckeye Drive, Milpitas, CA, 78 Cherry Hill Drive,
Beverly, MA, 145 Columbia, Aliso Viejo, CA and 3540 Bassett Drive, Santa Clara,
CA.

  1.1.41   “Samsung Agreement”: shall mean that certain Asset Purchase Agreement
dated May 25, 2013 by and among Samsung Electronics Co., LTD., IXYS Intl
(Cayman) Limited, and the Borrower.

  1.1.42   “Solvent”: shall mean, as to any Person at any time, that: (a) the
fair value of the property of such Person on a going concern basis is greater
than the amount of such Person’s liabilities (including contingent liabilities),
as such value is established and such liabilities are evaluated for purposes of
Section 101(32) of the Bankruptcy Code and, in the alternative, for purposes of
the California Uniform Fraudulent Transfer Act or any similar state statute
applicable to the Borrower or any Subsidiary thereof; (b) the present fair
salable value of the property of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its debts as
they become absolute and matured; (c) such Person is able to realize upon its
property and pay its debts and other liabilities (including contingent
liabilities) as they mature in the normal course of business; (d) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person’s
property would constitute unreasonably small capital.

  1.1.43   “Subsidiary”: of a Person shall mean a corporation, partnership,
joint venture, limited liability company or other business entity of which a
majority of the shares of securities or other interests having ordinary voting
power for the election of directors or other governing body (other than
securities or interests having such power only by reason of the happening of a
contingency) are at the time beneficially owned, or the management of which is
otherwise controlled, directly or indirectly, through one or more
intermediaries, or both, by such Person. Unless otherwise specified, all
references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a
Subsidiary or Subsidiaries of the Borrower.

  1.1.44   “Total Funded Indebtedness”: shall mean, as of any date of
determination thereof, all (a) indebtedness for borrowed money or for the
deferred purchase price of property or services for which the Borrower or any of
its Subsidiaries is liable, contingently or otherwise, or in respect of which
the Borrower or any of its Subsidiaries otherwise assures a creditor against
loss, (b) obligations under capital leases, determined in accordance with United
States generally accepted accounting principles as in effect on November 1,
2013, for which the Borrower or any of its Subsidiaries is liable, contingently
or otherwise, or in respect of which the Borrower or any of its Subsidiaries
otherwise assures a creditor against loss, and (c) obligations arising under an
arrangement with any Person providing for the leasing by the Borrower or any of
its Subsidiaries of real or personal property that has been sold or otherwise
transferred to such Person; provided, however, that for each of the foregoing
clauses (a), (b) and (c) any indebtedness or other obligation solely between or
among the Borrower and/or any of its Subsidiaries shall be excluded.

  1.1.45   “Total Net Worth”: shall mean as of any date of determination
thereof, the stated net worth of the Borrower and its Subsidiaries.

1.2   Accounting Terms: All references to financial statements, assets,
liabilities, and similar accounting items not specifically defined herein shall
mean such financial statements or such items prepared or determined in
accordance with United States generally accepted accounting principles
consistently applied and, except where otherwise specified, all financial data
submitted pursuant to this Agreement shall be prepared in accordance with such
principles.

1.3   Other Terms: Other terms not otherwise defined shall have the meanings
attributed to such terms in the Uniform Commercial Code as in effect on July 1,
2001 and from time to time thereafter.

SECTION

2

CREDIT FACILITIES

2.1   THE LINE OF CREDIT

  2.1.1   The Line of Credit: On terms and conditions as set forth herein, the
Bank agrees to make Advances to the Borrower from time to time from the date
hereof to the Expiration Date; provided the aggregate amount of such Advances
outstanding at any time does not exceed $50,000,000.00 (the “Line of Credit”).
Within the foregoing limits, the Borrower may borrow, partially or wholly
prepay, and reborrow under this Section 2.1. Proceeds of the Line of Credit
shall be used to assist with the general working capital and other general
corporate needs of the Borrower’s operations, including acquisitions permitted
by Section 5.5 hereof.

  2.1.2   Making Line Advances: Each Advance shall be conclusively deemed to
have been made at the request of and for the benefit of the Borrower (i) when
credited to any deposit account of the Borrower maintained with the Bank or
(ii) when paid in accordance with the Borrower’s written instructions. Subject
to the requirements of Section 3 hereof and provided such request is made in a
timely manner as provided in Section 2.1.5 hereof, Advances shall be made by the
Bank under the Line of Credit.

  2.1.3   Repayment: On the Expiration Date, the Borrower hereby promises and
agrees to pay to the Bank in full the aggregate unpaid principal amount of all
Advances then outstanding, together with all accrued and unpaid interest
thereon.

  2.1.4   Interest on Advances: Interest shall accrue from the date of each
Advance under the Line of Credit at one of the following rates, as quoted by the
Bank and as elected by the Borrower below:

  (i)   Alternate Base Rate Advances: Alternate Base Rate Advances shall bear
interest at the Alternate Base Rate plus the Applicable Margin. Interest shall
be adjusted concurrently with any change in the Alternate Base Rate. An Advance
based upon the Alternate Base Rate is hereinafter referred to as an “Alternate
Base Rate Advance”.

  (ii)   Applicable Floating Rate Advances: Applicable Floating Rate Advances
shall bear interest at the Applicable Floating Rate plus the Applicable Margin.
Interest shall be adjusted concurrently with any change in the Applicable
Floating Rate. An Advance based upon the Applicable Floating Rate is herein
referred to as an “Applicable Floating Rate Advance”.

  (iii)   LIBOR Advances: LIBOR Advances shall bear interest at the LIBOR Rate
plus the Applicable Margin. As used herein, “LIBOR Rate” means a fixed rate
quoted by the Bank for one, two, three or six month periods or for such other
period of time that the Bank may quote and offer (provided that any such period
of time does not extend beyond Expiration Date) (the “LIBOR Interest Period”)
for Advances in the minimum amount of $100,000.00. The LIBOR Rate shall be the
rate determined by the Bank’s Treasury Desk as being the arithmetic mean
(rounded upwards, if necessary, to the nearest whole multiple of 1/16%) of
Reuters Screen LIBOR01 Page (or on any successor or substitute page of such
page) as of 11:00 a.m. (London time), on that day, or, if such day is not a
Business Day, on the immediately preceding Business Day prior to the first day
of such period (adjusted for any and all assessments, surcharges and reserve
requirements). An Advance based upon the LIBOR Rate is hereinafter referred to
as a “LIBOR Advance”.

Interest on any Advance shall be computed on the basis of 360 days per year, but
charged on the actual number of days elapsed.

The Borrower hereby promises and agrees to pay interest in arrears on Alternate
Base Rate Advances, Applicable Floating Rate Advances and LIBOR Advances on the
last day of each month.

If Interest is not paid as and when it is due, it shall be added to the
principal, become and be treated as a part thereof, and shall thereafter bear
like interest.

  2.1.5   Notice of Borrowing: Upon written or telephonic notice which shall be
received by the Bank at or before 2:00 p.m. (Pacific time) on a Business Day,
the Borrower may borrow under the Line of Credit by requesting:

  (i)   Alternate Base Rate Advances. An Alternate Base Rate Advance may be made
on the day notice is received by the Bank; provided, however, that if the Bank
shall not have received notice at or before 2:00 p.m. on the day such Advance is
requested to be made, such Alternate Base Rate Advance may, at the Bank’s
option, be made on the next Business Day.

  (ii)   Applicable Floating Rate Advances. An Applicable Floating Rate Advance
may be made on the day notice is received by the Bank; provided, however, that
if the Bank shall not have received notice at or before 2:00 p.m. on the day
such Advance is requested to be made, such Applicable Floating Rate Advance may,
at the Bank’s option, be made on the next Business Day.

  (iii)   LIBOR Advances. Notice of any LIBOR Advance shall be received by the
Bank no later than two (2) Business Days prior to the day (which shall be a
Business Day) on which the Borrower request such LIBOR Advance to be made.

In the event the Borrower makes no election at the time of any Advance, such
Advance shall bear interest at the Applicable Floating Rate as determined for
Alternate Base Rate Advances.

  2.1.6   Notice of Election to Adjust Interest Rate: The Borrower may elect:

  (i)   That interest on an Alternate Base Rate Advance shall be adjusted to
accrue at the LIBOR Rate or the Applicable Floating Rate; provided, however,
that such notice shall be received by the Bank no later than two (2) Business
Days prior to the day (which shall be a Business Day) on which the Borrower
requests that interest be adjusted to accrue at the Applicable Floating Rate.

  (ii)   That interest on an Applicable Floating Rate Advance shall be adjusted
to accrue at the LIBOR Rate or Alternate Base Rate; provided, however, that such
notice shall be received by the Bank no later than two (2) Business Days prior
to the day (which shall be a Business Day) on which the Borrower requests that
interest be adjusted to accrue at the LIBOR Rate or Alternate Base Rate.

  (iii)   That interest on a LIBOR Advance shall continue to accrue at a newly
quoted LIBOR Rate or shall be adjusted to commence to accrue at the Alternate
Base Rate or Applicable Floating Rate; provided, however, that such notice shall
be received by the Bank no later than two (2) Business Days prior to the last
day of the LIBOR Interest Period pertaining to such LIBOR Advance. If the Bank
shall not have received notice (as prescribed herein) of the Borrower’s election
that interest on any LIBOR Advance shall continue to accrue at the newly quoted
LIBOR Rate, the Borrower shall be deemed to have elected that interest thereon
shall be adjusted to accrue at the Alternate Base Rate upon the expiration of
the LIBOR Interest Period pertaining to such Advance.

  2.1.7   Prepayment: The Borrower may prepay any Advance in whole or in part,
at any time and without penalty, provided, however, that: (i) any partial
prepayment shall first be applied, at the Bank’s option, to accrued and unpaid
interest and next to the outstanding principal balance; and (ii) during any
period of time in which interest is accruing on any Advance on the basis of the
LIBOR Rate, no prepayment shall be made except on a day which is the last day of
the LIBOR Interest Period pertaining thereto. If the whole or any part of any
LIBOR Advance is prepaid by reason of acceleration or otherwise, the Borrower
shall, upon the Bank’s request, promptly pay to and indemnify the Bank for all
costs, expenses and any loss actually incurred by the Bank and any loss
(including loss of profit resulting from the re-employment of funds) deemed
sustained by the Bank as a consequence of such prepayment.

The Bank shall be entitled to fund all or any portion of its Advances in any
manner it may determine in its sole discretion, but all calculations and
transactions hereunder shall be conducted as though the Bank actually funded all
Advances through the purchase of dollar deposits bearing interest at the same
rate as U.S. Treasury securities in the amount of the relevant Advance and in
maturities corresponding to the date of such purchase to the Expiration Date
hereunder.

  2.1.8   Indemnification for LIBOR Rate Costs or One-Month LIBOR Rate Costs:
During any period of time in which interest on any Advance is accruing on the
basis of the LIBOR Rate or One-Month LIBOR Rate, the Borrower shall, upon the
Bank’s request, promptly pay to and reimburse the Bank for all costs incurred
and payments made by the Bank by reason of any future assessment, reserve,
deposit or similar requirement or any surcharge, tax or fee imposed upon the
Bank or as a result of the Bank’s compliance with any directive or requirement
of any regulatory authority pertaining or relating to funds used by the Bank in
quoting and determining the LIBOR Rate or One-Month LIBOR Rate.

  2.1.9   Conversion from One-Month LIBOR Rate or LIBOR Rate: In the event that
the Bank shall at any time determine that the accrual of interest on the basis
of the LIBOR Rate or One-Month LIBOR Rate (i) is infeasible because the Bank is
unable to determine the LIBOR Rate or One-Month LIBOR Rate due to the
unavailability of U.S. dollar deposits, contracts or certificates of deposit in
an amount approximately equal to the amount of the relevant Advance and for a
period of time approximately equal to the relevant LIBOR Interest Period or
(ii) is or has become unlawful or infeasible by reason of the Bank’s compliance
with any new law, rule, regulation, guideline or order, or any new
interpretation of any present law, rule, regulation, guideline or order, then
the Bank shall give telephonic notice thereof (confirmed in writing) to the
Borrower, in which event any Advance bearing interest at the LIBOR Rate or the
One-Month LIBOR Rate shall thereupon immediately accrue interest at the greater
of the Prime Rate or Federal Funds Rate plus the Applicable Margin for Alternate
Base Rate Advances.

  2.1.10   Commitment Fee: The Borrower agrees to pay to the Bank a commitment
fee equal to the Applicable Margin (Unused Commitment Fee) in effect on such
date 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 the Bank and shall be due and payable by the Borrower in
arrears on each December 31, March 31, June 30 and September 30, beginning on
December 31, 2013.

2.2   LETTER OF CREDIT SUB-FACILITY

  2.2.1   Letter of Credit Sub-Facility: The Bank agrees to issue commercial
and/or standby letters of credit (each a “Letter of Credit”) on behalf of the
Borrower of up to $3,000,000.00. At no time, however, shall the total principal
amount of all Advances outstanding under the Line of Credit, together with the
total face amount of all Letters of Credit outstanding, less any partial draws
paid by the Bank, exceed the Line of Credit.

  (i)   Upon the Bank’s request, the Borrower shall promptly pay to the Bank
issuance fees and such other fees, commissions, costs and any out-of-pocket
expenses charged or incurred by the Bank with respect to any Letter of Credit.

  (ii)   The commitment by the Bank to issue Letters of Credit shall, unless
earlier terminated in accordance with the terms of this Agreement, automatically
terminate on the Expiration Date of the Line of Credit and no Letter of Credit
shall expire on a date which is after the Expiration Date.

  (iii)   Each Letter of Credit shall be in form and substance satisfactory to
the Bank and in favor of beneficiaries satisfactory to the Bank; provided that
the Bank may refuse to issue a Letter of Credit due to the nature of the
transaction or its terms or in connection with any transaction where the Bank,
due to the beneficiary or the nationality or residence of the beneficiary, would
be prohibited by any applicable law, regulation or order from issuing such
Letter of Credit.

  (iv)   Prior to the issuance of each Letter of Credit, but in no event later
than 10:00 a.m. (California time) on the day such Letter of Credit is to be
issued (which shall be a Business Day), the Borrower shall deliver to the Bank a
duly executed form of the Bank’s standard form of application for issuance of a
Letter of Credit with proper insertions.

  (v)   The Borrower shall, upon the Bank’s request, promptly pay to and
reimburse the Bank for all costs incurred and payments made by the Bank by
reason of any future assessment, reserve, deposit or similar requirement or any
surcharge, tax or fee imposed upon the Bank or as a result of the Bank’s
compliance with any directive or requirement of any regulatory authority
pertaining or relating to any Letter of Credit. The Borrower shall, upon the
Bank’s request, promptly pay to and reimburse the Bank for all costs incurred
and payments made by the Bank by reason of any future assessment, reserve,
deposit or similar requirement or any surcharge, tax or fee imposed upon the
Bank or as a result of the Bank’s compliance with any directive or requirement
of any regulatory authority pertaining or relating to any Letter of Credit. In
addition to any fees otherwise due hereunder, the Borrower shall pay to the Bank
(1) a non-refundable Letter of Credit fee equal to the Applicable Margin (LIBOR
Advances) in effect on the payment date referenced below computed on the basis
of a 360-day year, actual days elapsed, pro rata subject at all times, to the
Bank’s standard minimum fees in effect from time to time, of the amount of any
standby Letter of Credit, payable (A) at the time of issuance of such standby
Letter of Credit and (B) in advance on the last day of each quarter or year
thereafter, as applicable, and (2) a non-refundable Letter of Credit fee equal
to the Bank’s standard minimum fees in effect from time to time upon the
issuance of any commercial Letter of Credit.

The Borrower shall immediately reimburse the Bank in the event any Letter of
Credit is drawn on in an amount equal to the full drawn amount together with
interest thereon at the One-Month LIBOR Rate plus any the Bank fees, costs and
expenses relating to such drawing. In the event that the Borrower fails to
reimburse any drawing under any Letter of Credit or the balances in the
depository account or accounts maintained by the Borrower with the Bank are
insufficient to pay such drawing, without limiting the rights of the Bank
hereunder or waiving any Event of Default caused thereby, the Bank may, and the
Borrower hereby authorizes the Bank to create an Advance bearing interest at the
rate or rates provided in Section 8.2 hereof to pay such drawing.

2.3   Line Account: The Bank shall maintain on its books a record of account in
which the Bank shall make entries for each Advance and such other debits and
credits as shall be appropriate in connection with the credit facilities granted
hereunder (the “Line Account”). The Bank shall provide the Borrower with a
statement of the Borrower’s Line Account, which statement shall be considered to
be correct and conclusively binding on the Borrower unless the Borrower notifies
the Bank to the contrary within thirty (30) days after the Borrower’s receipt of
any such statement which it deems to be incorrect.

2.4   Authorization to Charge Account(s): The Borrower hereby authorizes the
Bank to charge, from time to time, against any or all of the Borrower’s deposit
accounts with the Bank any amount so due under this Agreement, including, but
not limited to, account # 184008555 maintained with the Bank. Notwithstanding
this authorization, the Borrower shall be in default for nonpayment as provided
in this Agreement until and unless the default is cured by payment, whether
initiated by the Bank or by the Borrower.

2.5   Payments: If any payment required to be made by the Borrower hereunder
becomes due and payable on a day other than a Business Day, the due date thereof
shall be extended to the next succeeding Business Day and interest thereon shall
be payable at the then applicable rate during such extension. All payments
required to be made hereunder shall be made to the office of the Bank designated
for the receipt of notices herein or such other office as the Bank shall from
time to time designate.

2.6   Late Payment: In addition to any other rights the Bank may have hereunder,
if any payment of principal or interest or any portion thereof, under this
Agreement is not paid within fifteen (15) days of when due, a late payment
charge equal to 5% of such past due payment may be assessed and shall be
immediately payable.

2.7   Costs and Expenses: The Borrower shall pay to the Bank immediately upon
demand, in addition to any other amounts due or to become due hereunder, any and
all (i) 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 the One Month LIBOR Rate or
the LIBOR Rate, and (ii) future, supplemental, emergency or other changes in the
any One Month LIBOR Rate or LIBOR Rate reserve percentages, 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 the 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 the One Month LIBOR Rate or LIBOR Rate to the extent
they are not included in the calculation of the One Month LIBOR Rate or LIBOR
Rate. In determining which of the foregoing are attributable to any One Month
LIBOR Rate or LIBOR Rate available to the Borrower hereunder, any reasonable
allocation made by the Bank among its operations shall be conclusive and binding
upon the Borrower.

SECTION

3

CONDITIONS PRECEDENT

3.1   Conditions Precedent to the Initial Extension of Credit: The obligation of
the Bank to make the initial Advance or the first extension of credit, as the
case may be, to or on account of the Borrower hereunder is subject to the
conditions precedent that the Bank shall have received before the date of such
initial Advance or such first extension of credit all of the following, in form
and substance satisfactory to the Bank:

  (i)   Authority to Borrow. Evidence that the execution, delivery and
performance by the Borrower of this Agreement and any document, instrument or
agreement required hereunder have been duly authorized.

  (ii)   Guarantors. A Guaranty in favor of the Bank executed by each of the
Guarantors, together with evidence that the execution, delivery and performance
by the Guarantors has been duly authorized.

  (iii)   Negative Pledges. Notices of Negative Pledge with respect to all Real
Property executed by the owner of such Real Property for recordation in the
appropriate real estate records.

  (iv)   Contingent Collateral Agreement. A Contingent Collateral Agreement
executed by the Borrower and the Guarantors.

  (v)   Lien Searches. The results of lien searches, in form and substance
satisfactory to the Bank, under the Uniform Commercial Code as in effect in the
relevant jurisdictions, and of the United States Patent and Trademark Office and
United States Copyright Office and preliminary title reports with respect to the
Real Property.

  (vi)   Fees. Payment of all of the Bank’s out-of-pocket expenses (including
the Bank’s counsel’s fees and expenses) in connection with the preparation and
negotiation of this Agreement.

  (vii)   Miscellaneous. Such other evidence as the Bank may request to
establish the consummation of the transaction contemplated hereunder and
compliance with the conditions of this Agreement.

3.2   Conditions Precedent to All Extensions of Credit: The obligation of the
Bank to make each Advance or each other extension of credit, as the case may be,
to or on account of the Borrower (including the initial Advance and the first
extension of credit) shall be subject to the further conditions precedent that,
on the date of each Advance or each extension of credit and after the making of
such Advance or extension of credit:

  (i)   Reporting Requirements. The Bank shall have received the documents set
forth in Section 5.1 hereof.

  (ii)   Subsequent Approvals. The Bank shall have received such supplemental
approvals, opinions or documents as the Bank may reasonably request.

  (iii)   Representations and Warranties. The representations contained in
Section 4 hereof and in any other document, instrument or certificate delivered
to the Bank hereunder are true, correct and complete.

  (iv)   Event of Default. No event has occurred and is continuing which
constitutes, or with the lapse of time or giving of notice or both, would
constitute an Event of Default.

The Borrower’s acceptance of the proceeds of any loan, Advance or extension of
credit or the Borrower’s execution of any document or instrument evidencing or
creating any Obligation hereunder shall be deemed to constitute the Borrower’s
representation and warranty that all of the above statements are true and
correct.

SECTION

4

REPRESENTATIONS AND WARRANTIES

The Borrower hereby makes the following representations and warranties to the
Bank, which representations and warranties are continuing:

4.1   Status: The Borrower’s correct legal name is as stated in this Agreement
and the Borrower is a corporation duly organized and validly existing under the
laws of the state of Delaware and with its chief executive office in the state
of California and is properly licensed and is qualified to do business and is in
good standing in, and, where necessary to maintain the Borrower’s rights and
privileges, and has complied with the fictitious name statute of every
jurisdiction in which the Borrower is doing business.

4.2   Authority: (a) Each of the Loan Parties is a corporation, partnership or
limited liability company duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, organization or
formation (subject to such changes after the date hereof as are permitted under
the Loan Documents); and (b) the execution, delivery and performance by the
Borrower of this Agreement, and each Loan Party of each Loan Document to which
it is a party, and any instrument, document or agreement required hereunder or
thereunder have been duly authorized and do not and will not: (i) violate any
provision of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award presently in effect having application to the
Borrower or such Loan Party; (ii) result in a breach of or constitute a default
under any material indenture or loan or credit agreement or other material
agreement, lease or instrument to which the Borrower or such Loan Party is a
party or by which it or its properties may be bound or affected; or
(iii) require any consent or approval of its stockholders or violate any
provision of its articles of incorporation or by-laws; or violate any provision
of its partnership agreement, or require any consent or approval of its members
or violate any provision of its articles of organization or operating agreement,
each as the case may be applicable herein.

4.3   Governmental Approvals: No approval, consent, exemption, authorization, or
other action by, or notice to, or filing with, any Governmental Authority is
necessary or required in connection with the execution and delivery by the
Borrower or any Loan Party of, or the performance by the Borrower or any Loan
Party of its obligations under, any Loan Document to which it is a party other
than such as have been obtained or made and are in full force and effect.

4.4   Legal Effect: Each Loan Document to which any Loan Party is a party
constitutes the legal, valid and binding obligations of such Person, enforceable
against each such Person in accordance with its terms.

4.5   Fictitious Trade Names: There are no fictitious trade names, fictitious
trade styles, assumed business names or trade names (defined herein as “Trade
Name”) used by any Loan Party in connection with their business operations other
than Massachusetts Clare, Inc. The Borrower shall notify the Bank not less than
thirty (30) days prior to effecting any change in the matters described herein
or prior to using any other Trade Name at any future date, indicating the Trade
Name and State(s) of its use.

4.6   Financial Statements: All financial statements, information and other data
which may have been or which may hereafter be submitted by the Borrower to the
Bank are true, accurate and correct and have been or will be prepared in
accordance with United States generally accepted accounting principles
consistently applied and accurately represent the financial condition or, as
applicable, the other information disclosed therein. Since the most recent
submission of such financial information or data to the Bank, the Borrower
represents and warrants that no Material Adverse Change in the Borrower’s
financial condition or operations has occurred which has not been fully
disclosed to the Bank in writing.

4.7   Litigation: Except as have been disclosed to the Bank in writing, there
are no actions, suits or proceedings pending or, to the knowledge of the
Borrower, threatened against or affecting any Loan Party or any Loan Party’s
properties before any court or administrative agency which, if determined
adversely to such Loan Party could reasonably be expected to have a Material
Adverse Change.

4.8   Title to Assets: Each Loan Party has good and marketable title to all of
its assets and the same are not subject to any security interest, encumbrance,
lien or claim of any third Person except for Permitted Liens.

4.9   ERISA: If any Loan Party has a pension, profit sharing or retirement plan
subject to ERISA, such plan has been and will continue to be funded in
accordance with its terms and otherwise complies with and continues to comply
with the requirements of ERISA.

4.10   Taxes: Each Loan Party has filed all tax returns required to be filed and
paid all taxes shown thereon to be due, including interest and penalties, other
than such taxes which are currently payable without penalty or interest or those
which are being duly contested in good faith.

4.11   Margin Stock. The proceeds of any loan or advance hereunder will not be
used to purchase or carry margin stock as such term is defined under
Regulation U of the Board of Governors of the Federal Reserve System.

4.12   Environmental Compliance. The operations of each Loan Party comply, and
during the term of this Agreement will at all times comply, in all respects with
all Environmental Laws; each Loan Party has obtained all licenses, permits,
authorizations and registrations required under any Environmental Law
(“Environmental Permits”) and necessary for its ordinary course operations, all
such Environmental Permits are in good standing, and each Loan Party is in
compliance with all material terms and conditions of such Environmental Permits;
each Loan Party and its present property or operations is not subject to any
outstanding written order from or agreement with any governmental authority nor
subject to any judicial or docketed administrative proceeding, respecting any
Environmental Law, Environmental Claim or Hazardous Material; there are no
Hazardous Materials or other conditions or circumstances existing, or arising
from operations prior to the date of this Agreement with respect to any property
of any Loan Party that would reasonably be expected to give rise to
Environmental Claims; provided, however, that with respect to property leased
from an unrelated third party, the foregoing representation is made to the best
knowledge of the Borrower. In addition, (i) no Loan Party has any underground
storage tanks that are not properly registered or permitted under applicable
Environmental Laws, or that are leaking or disposing of Hazardous Materials
off-site, and (ii) each Loan Party has notified all of their employees of the
existence, if any, of any health hazard arising from the conditions of their
employment and have met all notification requirements under Title III of CERCLA
and all other Environmental Laws.

4.13   Regulated Entitles: No Loan Party is an “investment company” within the
meaning of the Investment Company Act of 1940. The Borrower is not subject to
regulation under the Federal Power Act, any state public utilities code or any
other Federal or state statute or regulation limiting its ability to incur
Indebtedness.

4.14   Solvency: The Borrower is Solvent and as of the date hereof the Borrower
does not intend to, and does not believe that it will, incur debts beyond the
Borrower’s ability to pay as such debts mature. The Borrower is not about to
engage in a transaction, after giving effect to which the Borrower’s remaining
property would constitute unreasonably small capital for the business conducted
or transactions engaged in by the Borrower.

SECTION

5

COVENANTS

The Borrower covenants and agrees that, during the term of this Agreement, and
so long thereafter as the Borrower is indebted to the Bank under this Agreement
(unless the Bank shall otherwise consent in writing), the Borrower:

5.1   Reporting and Certification Requirements: Shall deliver or cause to be
delivered to the Bank in form and detail satisfactory to the Bank:

  (i)   Not later than ninety (90) days after the end of each of the Borrower’s
fiscal years, a copy of the annual audited financial report on form 10K of the
Borrower for such year, prepared by a firm of certified public accountants
acceptable to the Bank and accompanied by an unqualified opinion of such firm.

  (ii)   Not later than forty-five (45) days after the end of each of the first
three fiscal quarters of each fiscal year, a copy of the Borrower’s financial
statement on form 10Q as of the end of such period.

  (iii)   Not later than one hundred twenty (120) days after the end of each of
the Borrower’s fiscal years, a copy of the Borrower’s internally prepared
financial projections for the next fiscal year.

  (iv)   Concurrently with the delivery of the financial reports required
hereunder, a compliance certificate, in form and substance satisfactory to the
Bank, setting forth the calculation of the covenants contained in Section 5.2
hereof, stating that, to the best of the Borrower’s knowledge after due inquiry,
the Borrower is in compliance with the covenants contained in Section 5.2
hereof, and certified to by the chief financial officer or corporate controller
of the Borrower or any other signatory on the deposit account maintained by the
Borrower with the Bank.

  (v)   Promptly upon the Bank’s request, such other information pertaining to
the Borrower or any Loan Party or any guarantor hereunder as the Bank may
reasonably request.

            5.2    
For the purposes of Section 5.1(i) and Section 5.1(ii) hereof, such financial
statements shall be deemed delivered when
publicly available on the Borrower’s website or the website of the United States
Securities and Exchange Commission.
Financial Condition: Shall maintain at all times on a consolidated basis:

  (i)   As at the end of each fiscal quarter, a minimum Total Net Worth of at
least (a) $225,000,000.00 plus (b) 50% of the Borrower’s net income earned in
each fiscal quarter ending on or after September 30, 2013 (after deducting all
cash dividends paid in respect of the Borrower’s stock during such fiscal
quarter) but only if such amount is greater than $0.00.

  (ii)   A ratio of the sum of cash, cash equivalents and accounts receivable to
Current Liabilities of not less than 1.50 to 1.00 as at the end of each fiscal
quarter.

  (iii)   A Leverage Ratio of not more than (a) 2.50 to 1.00 as at the end of
the fiscal quarter ending September 30, 2013, (b) 2.25 to 1.00 as at the end of
the fiscal quarter ending December 31, 2013, and (c) 2.00 to 1.00 as of the end
of each fiscal quarter ending thereafter.

  (iv)   A minimum net profit after tax of at least $1.00 as at the end of each
fiscal quarter.

  (v)   Minimum Domestic Cash of at least $20,000,000.00 at all times.

5.3   Preservation of Existence; Compliance with Applicable Laws: (i) Shall, and
shall cause each of the other Loan Parties to, maintain and preserve its
existence and all rights and privileges now enjoyed; and (ii) conduct its
business and operations in accordance with all applicable laws, rules and
regulations.

5.4   Merge or Consolidate: Shall not, and shall not suffer or permit any of the
other Loan Parties to, liquidate or dissolve, merge or consolidate with or into
any other business organization.

5.5   Acquisitions: Shall not, and shall not suffer or permit any of its
Subsidiaries to, acquire any other business organization unless, (i) after
taking such proposed acquisition into effect, the Borrower shall be in pro forma
compliance with all financial covenants contained in Section 5.2 hereof (with
EBITDA of the Borrower and its Subsidiaries calculated on a trailing
twelve-month basis ending as of the most recent month for which financial
statements have been delivered in accordance with Section 5.1 hereof and Total
Funded Indebtedness calculated as of the date of the proposed acquisition after
giving effect to any Indebtedness incurred in connection therewith), and (ii) in
the case of any proposed acquisition with respect to which the cash or debt
portion of the acquisition consideration is equal to or greater than $7,000,000,
no less than fifteen (15) days prior to the proposed closing date of such
acquisition, the Borrower shall have delivered to the Bank (a) written notice of
such acquisition together with a copy of the acquisition agreement and a summary
of the structure of the acquisition and (b) a compliance certificate, in form
and substance satisfactory to the Bank, setting forth the pro forma calculation
of the covenants contained in Section 5.2 hereof.

5.6   Maintenance of Insurance: Shall, and shall cause each of its Subsidiaries
to, maintain insurance in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Borrower or any Subsidiary operates and
maintain such other insurance and coverages as may be required by the Bank. All
such Insurance shall be in form and amount and with companies satisfactory to
the Bank.

5.7   Payment of Obligations and Taxes: Shall, and shall cause each of its
Subsidiaries to, make timely payment of all material assessments and taxes and
all of its material liabilities and obligations including, but not limited to,
trade payables, unless the same are being contested in good faith and any
obligations arising under any Indebtedness of the Borrower or any of its
Subsidiaries. For purposes hereof, the Borrower or any Subsidiary’s issuance of
a check, draft or similar instrument without delivery to the intended payee
shall not constitute payment.

5.8   Depository Relationships: Shall maintain Its primary business depository
relationship with the Bank, including general, operating and administrative
deposit accounts, cash management services, foreign exchange, investment and
ancillary services.

5.9   Inspection Rights and Accounting Records: Shall maintain adequate books
and records in accordance with United States generally accepted accounting
principles consistently applied and in a manner otherwise acceptable to the
Bank, and, at any reasonable time and from time to time, permit the Bank or any
representative thereof to examine and make copies of the records and visit the
properties of the Borrower and each other Loan Party and discuss the business
and operations of the Borrower and each other Loan Party with any employee or
representative thereof. If any Loan Party shall maintain any records (including,
but not limited to, computer generated records or computer programs for the
generation of such records) in the possession of a third party, such Loan Party
hereby agrees to notify such third party to permit the Bank free access to such
records at all reasonable times and to provide the Bank with copies of any
records which it may request, all at such Loan Party’s expense, the amount of
which shall be payable immediately upon demand.

5.10   Redemption or Repurchase of Stock: Shall not redeem or repurchase any
class of the Borrower’s stock now or hereafter outstanding, except in an
aggregate amount of up to $35,000,000.00 during the term of this Agreement.

5.11   Additional Indebtedness: Shall not, and shall not suffer or permit any of
its Subsidiaries to, after the date hereof, create, incur or assume, directly or
indirectly, any additional Indebtedness other than (i) Indebtedness owed or to
be owed to the Bank, (ii) capital leases, seller or vendor carry-back notes or
acquired or assumed Indebtedness in an aggregate amount not to exceed
$10,000,000.00 in any fiscal year, (iii) cash-secured letters or credit, or (iv)
the obligations of the Borrower and IXYS Intl (Cayman) Limited under the Samsung
Agreement.

5.12   Transfer Assets: Shall not, and shall not suffer or permit any of its
Subsidiaries to, after the date hereof, sell, contract for sale, convey,
transfer, assign, lease or sublet, any of its assets except (i) in the Ordinary
Course of Business and, then, only for full, fair and reasonable consideration
or (ii) in an aggregate amount not to exceed $5,000,000.00 in any fiscal year.

5.13   Change in Nature of Business: Shall not, and shall not suffer or permit
any of its Subsidiaries to, make any material change in the nature of its
business as existing or conducted as of the date hereof.

5.14   Maintenance of Jurisdiction: Shall maintain, and shall cause each of the
other Loan Parties to maintain, the jurisdiction of its organization and chief
executive office, or if applicable, principal residence, as set forth herein and
not change such jurisdiction name or form of organization without thirty
(30) days prior written notice to the Bank.

5.15   Compensation of Employees: Shall compensate, and shall cause each of its
Subsidiaries to compensate, its employees for services rendered at an hourly
rate at least equal to the minimum hourly rate prescribed by any applicable
federal or state law or regulation.

5.16   Notice: Shall give the Bank prompt written notice of any and all
(i) Events of Default; (ii) material litigation, arbitration or administrative
proceedings to which the Borrower or any other Loan Party is a party; and
(iii) other matters which have resulted in, or might result in a Material
Adverse Change.

5.17   Environmental Compliance: Shall conduct, and shall cause each of its
Subsidiaries to conduct, its operations and keep and maintain all of its
property in material compliance with all Environmental Laws and, upon the
written request of the Bank, the Borrower shall submit to the Bank, at the
Borrower’s sole cost and expense, at reasonable intervals, a report providing
the status of any environmental, health or safety compliance, hazard or
liability.

5.18   Liens: Shall not, and shall not permit any of the other Loan Parties to,
directly or indirectly, make, create, incur, assume or suffer to exist any lien
upon or with respect to any part of its property, whether now owned or hereafter
acquired, other than Permitted Liens.

5.19   ERISA: Shall, and cause each of its Subsidiaries to, if the Borrower or
such Subsidiary has a pension, profit sharing or retirement plan subject to
ERISA, continue to fund such plan in accordance with its terms and shall ensure
that such plan continues to materially comply with the requirements of ERISA.

5.20   Further Assurances: The Borrower shall, and shall cause each of the other
Loan Parties to, take such further acts (including the acknowledgement,
execution, delivery, recordation, filing and registering of documents) as may
reasonably be required from time to time to: (a) carry out more effectively the
purposes of this Agreement; and (b) better assure, convey, grant, assign,
transfer, preserve, protect and confirm to the Bank the rights, remedies and
privileges existing or granted or now or hereafter intended to be granted to
such Persons under this Agreement or other document executed in connection
therewith.

SECTION

6

EVENTS OF DEFAULT

Any one or more of the following described events shall constitute an event of
default (an “Event of Default”) under this Agreement:

6.1   Non-Payment: The Borrower fails to pay the principal amount of any
Obligations when due or interest on the Obligations within five (5) days of when
due.

6.2   Specified Defaults Under This Agreement: The Borrower fails to perform or
observe any term, covenant or agreement contained in Sections 5.2(i), 5.2(ii),
5.2(iii), 5.2(iv), 5.2(vi), 5.3(i), 5.4, 5.5, 5.10 or 5.12 hereof.

6.3   Specified Defaults Under This Agreement: The Borrower fails to perform or
observe any term, covenant or agreement contained in Section 5.2(v) hereof and
any such failure shall continue unremedied for more than ten (10) Business Days
after written notice from the Bank to the Borrower of the existence and
character of such Event of Default.

6.4   Performance Under This Agreement: Other than as set forth in Section 6.2
or 6.3 hereof, the Borrower or any other Loan Party shall fail in any material
respect to perform or observe any term, covenant or agreement contained in this
Agreement or in any document, instrument or agreement relating to this Agreement
or any other document or agreement executed by the Borrower or any other Loan
Party with or in favor of the Bank and any such failure shall continue
unremedied for more than thirty (30) days after written notice from the Bank to
the Borrower of the existence and character of such Event of Default.

6.5   Representations and Warranties; Financial Statements: Any representation
or warranty made by any Loan Party under or in connection with this Agreement or
any financial statement given by the Borrower or any guarantor shall prove to
have been incorrect in any material respect when made or given or when deemed to
have been made or given.

6.6   Other Agreements: If (a) the Borrower, any other Loan Party or any
material Subsidiary of the Borrower shall default in the payment of any material
Indebtedness (other than the Obligations), including the Samsung Agreement,
beyond the period of grace, if any, provided in the instrument or agreement
under which such Indebtedness was created or (b) the Borrower, any other Loan
Party or any material Subsidiary of the Borrower shall default in the
performance of any other agreement or condition relating to any material
Indebtedness (other than the Obligations), including the Samsung Agreement,
resulting in a right by the holder or holders of such Indebtedness (or a trustee
or agent on behalf of such holder or holders), whether or not exercised, to
accelerate the maturity of such Indebtedness.

6.7   Insolvency: (a) The Borrower, measured on a consolidated basis shall
become insolvent or be unable to pay its debts as they mature, or (b) the
Borrower or any Subsidiary shall: (i) make an assignment for the benefit of
creditors or to an agent authorized to liquidate any substantial amount of its
properties and assets; (ii) file a voluntary petition in bankruptcy or seeking
reorganization or to effect a plan or other arrangement with creditors;
(iii) file an answer admitting the material allegations of an involuntary
petition relating to bankruptcy or reorganization or join in any such petition;
(iv) become or be adjudicated a bankrupt; (v) apply for or consent to the
appointment of, or consent that an order be made, appointing any receiver,
custodian or trustee, for itself or any of its properties, assets or businesses;
or (vi) in an involuntary proceeding, any receiver, custodian or trustee shall
have been appointed for all or a substantial part of the Borrower’s or such
other Loan Party’s properties, assets or businesses and shall not be discharged
within thirty (30) days after the date of such appointment.

6.8   Execution: Any writ of execution or attachment or any judgment lien
relating to a judgment or judgments in an aggregate amount of $2,000,000 or more
shall be issued against any property of any Loan Party and shall not be
discharged or bonded against or released within thirty (30) days after the
issuance or attachment of such writ or lien.

6.9   Suspension: The Borrower or any Subsidiary shall voluntarily suspend the
transaction of business or allow to be suspended, terminated, revoked or expired
any permit, license or approval of any governmental body necessary to conduct
the Borrower’s or such Subsidiary’s business as now conducted.

6.10   Material Adverse Change: If there occurs a Material Adverse Change.

6.11   Change in Ownership: There shall occur a sale, transfer, disposition or
encumbrance (whether voluntary or involuntary), or an agreement shall be entered
into to do so, with respect to more than 10% of the issued and outstanding
capital stock of the Borrower.

6.12   Judgments: One or more non-interlocutory judgments, non-interlocutory
orders, decrees or arbitration awards is entered against any Loan Party
involving in the aggregate a liability (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage) as to
any single or related series of transactions, incidents or conditions, of
$2,000,000 or more, and the same shall remain unsatisfied, unvacated and
unstayed pending appeal for a period of thirty (30) consecutive days after the
entry thereof.

6.13   Other Judgments: Any non-monetary judgment, order or decree is entered
against the Borrower or any Subsidiary that does or could reasonably be expected
to have a Material Adverse Change, and there shall be any period of thirty
(30) consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect.

SECTION

7

REMEDIES ON DEFAULT

Upon the occurrence of any Event of Default, the Bank may, at its sole and
absolute election, without demand and only upon such notice as may be required
by law:

7.1   Acceleration: Declare any or all of the Borrower’s Indebtedness owing to
the Bank, whether under this Agreement or any other document, instrument or
agreement, immediately due and payable, whether or not otherwise due and
payable.

7.2   Cease Extending Credit: Cease making Advances or otherwise extending
credit to or for the account of the Borrower under this Agreement or under any
other agreement now existing or hereafter entered into between the Borrower and
the Bank.

7.3   Termination: Terminate this Agreement as to any future obligation of the
Bank without affecting the Borrower’s obligations to the Bank or the Bank’s
rights and remedies under this Agreement or under any other document, instrument
or agreement.

7.4   Letters of Credit: Require the Borrower to pay immediately to the Bank,
for application against drawings under any outstanding Letters of Credit, the
outstanding principal amount of any such Letters of Credit which have not
expired. Any portion of the amount so paid to the Bank which is not applied to
satisfy draws under any such Letters of Credit or any other obligations of the
Borrower to the Bank shall be repaid to the Borrower without interest.

7.5   Non-Exclusivity of Remedies: Exercise one or more of the Bank’s rights set
forth herein or seek such other rights or pursue such other remedies as may be
provided by law, in equity or in any other agreement now existing or hereafter
entered into between the Borrower and the Bank, or otherwise.

SECTION

8

MISCELLANEOUS

8.1   Amounts Payable on Demand: If the Borrower shall fail to pay on demand any
amount so payable under this Agreement, the Bank may, at its option and without
any obligation to do so and without waiving any default occasioned by the
Borrower having so failed to pay such amount, create an Advance under this
Agreement in an amount equal to the amount so payable, which Advance shall
thereafter bear interest as provided hereunder.

8.2   Default Interest Rate: If an Event of Default, or an event which, with
notice or passage of time could become an Event of Default, has occurred or is
continuing, the Borrower shall pay to the Bank interest on any Indebtedness or
amount payable under this Agreement at a rate which is 5% in excess of the rate
or rates then in effect under this Agreement

8.3   Right of Setoff: To the extent permitted by applicable law, the Bank
reserves a right of setoff in the Borrower’s accounts with the Bank (whether
checking, savings, or some other account). This includes all accounts the
Borrower holds jointly with someone else and all accounts the Borrower may open
in the future. The Borrower authorizes the Bank, to the extent permitted by
applicable law, to charge or setoff all sums owing on the debt against any and
all such accounts, and, at the Bank’s option, to administratively freeze all
such accounts to allow the Bank to protect the Bank’s charge and setoff rights
provided in this paragraph.

8.4   Reliance and Further Assurances: Each warranty, representation, covenant,
obligation and agreement contained in this Agreement shall be conclusively
presumed to have been relied upon by the Bank regardless of any investigation
made or information possessed by the Bank and shall be cumulative and in
addition to any other warranties, representations, covenants and agreements
which the Borrower now or hereafter shall give, or cause to be given, to the
Bank. The Borrower agrees to execute all documents and instruments and to
perform such acts as the Bank may reasonably deem necessary to confirm and
secure to the Bank all rights and remedies conferred upon the Bank by this
agreement and all other documents related thereto.

8.5   Attorneys’ Fees: The Borrower shall pay to the Bank all costs and
expenses, including but not limited to reasonable attorneys fees, incurred by
the Bank in connection with the administration, enforcement, including any
bankruptcy, at trial and on appeal or the enforcement of any judgment or any
refinancing or restructuring of this Agreement or any document, instrument or
agreement executed with respect to, evidencing or securing the Indebtedness
hereunder.

8.6   Notices: All notices, payments, requests, information and demands which
either party hereto may desire, or may be required to give or make to the other
party hereto, shall be given or made to such party by hand delivery or through
deposit in the United States mail, postage prepaid, or by facsimile delivery, or
to such other address as may be specified from time to time in writing by either
party to the other.

     
To the Borrower:
  To the Bank:
IXYS CORPORATION
1590 Buckeye Drive
Milpitas, CA 95035
Attn Nathan Zommer
Chief Executive Officer or
Uzi Sasson
Chief Financial Officer
FAX: (408) 715-2503
  BANK OF THE WEST
San Jose Office (NBO)
95 South Market Street, Suite 100
San Jose, CA 95113
Attn: Helen Huang
Vice President and Senior
Relationship Manager
FAX: (408) 292-4092

8.7   Waiver: Neither the failure nor delay by the Bank in exercising any right
hereunder or under any document, instrument or agreement mentioned herein shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right hereunder or under any other document, instrument or agreement mentioned
herein preclude other or further exercise thereof or the exercise of any other
right; nor shall any waiver of any right or default hereunder, or under any
other document, instrument or agreement mentioned herein, constitute a waiver of
any other right or default or constitute a waiver of any other default of the
same or any other term or provision.

8.8   Conflicting Provisions: To the extent the provisions contained in this
Agreement are inconsistent with those contained in any other document,
instrument or agreement executed pursuant hereto, the terms and provisions
contained herein shall control. Otherwise, such provisions shall be considered
cumulative.

8.9   Binding Effect; Assignment: This Agreement shall be binding upon and inure
to the benefit of the Borrower and the Bank and their respective successors and
assigns, except that the Borrower shall not have the right to assign their
rights hereunder or any interest herein without the prior written consent of the
Bank. The Bank may sell, assign or grant participation in all or any portion of
its rights and benefits hereunder. The Borrower agrees that, in connection with
any such sale, grant or assignment, the Bank may deliver to the prospective
buyer, participant or assignee financial statements and other relevant
information relating to the Borrower and any guarantor.

8.10   Jurisdiction: This Agreement, any notes issued hereunder, the rights of
the parties hereunder, and any documents, instruments or agreements mentioned or
referred to herein shall be governed by and construed according to the laws of
the State of California without regard to conflict of law principles, to the
jurisdiction of whose courts the parties hereby submit.

8.11   Waiver Of Jury Trial: THE BORROWER AND BANK ACKNOWLEDGE THAT THE RIGHT TO
TRIAL BY JURY IS A CONSTITUTIONAL RIGHT, AND THAT IT MAY BE WAIVED UNDER CERTAIN
CIRCUMSTANCES. TO THE EXTENT PERMITTED BY LAW EACH PARTY, AFTER CONSULTING (OR
HAVING THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS CHOICE, WAIVES ANY RIGHT
TO TRIAL BY JURY IN THE EVENT OF LITIGATION RELATED TO THIS AGREEMENT OR ANY
OTHER DOCUMENT, INSTRUMENT OR TRANSACTION BETWEEN THE PARTIES.

8.12   Judicial Reference Provision: In the event the above Jury Trial Waiver is
unenforceable, the parties elect to proceed under this Judicial Reference
Provision. With the exception of the items specified below, any controversy,
dispute or claim between the parties relating to this Agreement or any other
document, instrument or transaction between the parties (each, a Claim), will be
resolved by a reference proceeding in California pursuant to Sections 638 et
seq. of the California Code of Civil Procedure, or their successor sections,
which shall constitute the exclusive remedy for the resolution of any Claim,
including whether the Claim is subject to reference. Venue for the reference
will be the Superior Court in the County where real property involved in the
action, if any, is located, or in a County where venue is otherwise appropriate
under law (the Court). The following matters shall not be subject to reference:
(i) nonjudicial foreclosure of any security interests in real or personal
property, (ii) exercise of self-help remedies (including without limitation
set-off), (iii) appointment of a receiver, and (iv) temporary, provisional or
ancillary remedies (including without limitation writs of attachment, writs of
possession, temporary restraining orders or preliminary injunctions). The
exercise of, or opposition to, any of the above does not waive the right to a
reference hereunder.

The referee shall be selected by agreement of the parties. If the parties do not
agree, upon request of any party a referee shall be selected by the Presiding
Judge of the Court. The referee shall determine all issues in accordance with
existing case law and statutory law of the State of California, including
without limitation the rules of evidence applicable to proceedings at law. The
referee is empowered to enter equitable and legal relief, and rule on any motion
which would be authorized in a court proceeding, including without limitation
motions for summary judgment or summary adjudication. The referee shall issue a
decision, and pursuant to CCP §644 the referee’s decision shall be entered by
the Court as a judgment or order in the same manner as if tried by the Court.
The final judgment or order from any decision or order entered by the referee
shall be fully appealable as provided by law. The parties reserve the right to
findings of fact, conclusions of law, a written statement of decision, and the
right to move for a new trial or a different judgment, which new trial if
granted, will be a reference hereunder. AFTER CONSULTING (OR HAVING THE
OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS CHOICE, EACH PARTY AGREES THAT ALL
CLAIMS RESOLVED UNDER THIS REFERENCE PROVISION WILL BE DECIDED BY A REFEREE AND
NOT A JURY.

8.13   Counterparts: This Agreement may be executed in any number of
counterparts and all such counterparts taken together shall be deemed to
constitute one and the same instrument.

8.14   Headings: The headings herein set forth are solely for the purpose of
identification and have no legal significance.

8.15   Entire Agreement and Amendments: This Agreement and all documents,
instruments and agreements mentioned herein constitute the entire and complete
understanding of the parties with respect to the transactions contemplated
hereunder. All previous conversations, memoranda and writings between the
parties pertaining to the transactions contemplated hereunder not incorporated
or referenced in this Agreement or in such documents, instruments and agreements
are superseded hereby. This Agreement may be amended only by an instrument in
writing signed by the Borrower and the Bank.

8.16   Amendment and Restatement; No Novation: This Agreement constitutes an
amendment and restatement of the Existing Credit Agreement. The execution and
delivery of this Agreement shall not constitute a novation of any Indebtedness
or other obligations owing to the Bank under the Existing Credit Agreement and
all loans and other obligations of the Borrower outstanding on the date hereof
under the Existing Credit Agreement shall be deemed to be loans and obligations
outstanding under the corresponding facilities described herein without any
further action by any Person.

[Signatures to follow on next page.]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first hereinabove written.

      BANK:  
BORROWER:
BANK OF THE WEST
BY: /s/ Helen Huang  
IXYS CORPORATION
BY: /s/ Uzi Sasson
   
 
NAME: Helen Huang, Vice President  
NAME: Uzi Sasson, President, Chief
Financial Officer and Secretary

Exhibit A

Form of Notice of Negative Pledge

This document prepared by
and after recording return to:

Helen Huang
Bank of the West
95 South Market Street, Suite 100
San Jose, California 95113

NOTICE OF NEGATIVE PLEDGE

This Notice of Negative Pledge is made as of December 6, 2013, by and between
Bank of the West, having an office at 95 South Market Street, Suite 100, San
Jose, California 95113 (together with its successors, assigns or participants,
the “Bank”), and [      ], a [      ] corporation, having its principal place of
business at [      ] (the “Pledgor”).

Pursuant to that certain Amended and Restated Credit Agreement dated as of
December 6, 2013 (the “Credit Agreement”), by and between the Pledgor and the
Bank, the Pledgor has agreed that it shall not create or incur or suffer to be
created or incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction, or other security interest of any kind upon any property or assets
of any character (including personal property and real property), whether now
owned or hereafter acquired, or upon the income or profits therefrom, except
those in favor of the Bank and those otherwise permitted by the Bank in writing.
Any violation of these restrictions will be a breach of the Credit Agreement.

The restrictions set forth above relating to real property apply to the
Pledgor’s property in the [      ], which is more fully described in Exhibit A
attached hereto.

This Notice of Negative Pledge expires November 30, 2015 and shall be void and
without effect after such date.

[Signature Page to Follow]

In Witness Whereof, the undersigned has executed this Notice of Negative Pledge
on the date first set forth above.

      “The Pledgor”

      [      ]

By

Name:

      Title:

State of                               )

                                             )      SS.

County of                            )

I, the undersigned, a Notary Public in and for said County, in the State
aforesaid, do hereby certify that        is        of the Pledgor, a [      ]
corporation, who is personally known to me to be the same person whose name is
subscribed to the foregoing instrument, appeared before me this day in person
and acknowledged that he signed and delivered the said instrument as his own
free and voluntary act and as the free and voluntary act of said company for the
uses and purposes therein set forth.

Given under my hand and notarial seal, this        day of December, 2013.

Notary Public

(Type of Print Name)

(Seal)

Commission Expires:

      

Exhibit A

Legal Description

[See Attached]