Document:

exv10w6

Exhibit 10.6

 

	 	 	 

	Notice of Grant of Stock Options and

	 	CorVel Corporation
	Option Agreement

	 	ID: 33-0282651
	 

	 	2010 Main Street Suite 600
	 

	 	Irvine, California 92614

 

Diane J. Blaha

ID:

You have been granted an option to acquire CorVel Corporation (the “Corporation”) common stock (the
“Common Stock”) as follows:

	 	 	 	 	 

	Non-Qualified Stock Option Grant No.
	 	 	004393	 
	Date of Grant
	 	 	12/6/2010	 
	Stock Option Plan
	 	 	1988	 
	Option Price Per Share
	 	$	46.14	 
	Total Number of Shares Granted
	 	 	2,000.00	 
	Total Price of Shares Granted
	 	$	92,280.00	 
	Expiration Date
	 	 	12/6/2015	 

Provided you continue to be a Service Provider (as defined in the Stock Option Agreement
attached hereto as Exhibit A) Throughout the specified period, the Option will become exercisable
in accordance with Schedule A. Optionee (and Optionee’s spouse) hereby agree(s) that the option is
granted pursuant to and in accordance with the express terms and conditions of the Stock Option
Agreement and the Corporation’s Restated Omnibus Incentive Plan.

	 	 	 	 	 	 	 

	/S/ Daniel J. Starck
 

	 	 
	 	December 13, 2010
 

	 	 
	CorVel Corporation

	 	 	 	Date	 	 
	 
	 	 	 	 	 	 
	/s/ Diane Blaha
 

	 	 
	 	January 3, 2011
 

	 	 
	Diane J. Blaha

	 	 	 	Date	 	 
	 
	 	 	 	 	 	 
	 
 

	 	 
	 	 
 

	 	 
	Spouse

	 	 	 	Date	 	 

	 	 	 

	 

	 	Date: 12/13/2010
	 
	 	 
	 

	 	Time: 10:42:43AM

 

 

Schedule A: Performance Option

CORVEL CORPORATION

Percentage of shares earned by tranche

CY 2011, 2012, 2013

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	CY 2011	 	CY 2012	 	CY 2013
	 	 	 
	EPS Target for each calendar year
	 	$	*.	**	 	$	*.	**	 	$	*.	**
	Percentage of option grant for tranche (totals 100%)
	 	 	30	%	 	 	30	%	 	 	40	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	To earn 100% of tranche (105% of EPS target)
	 	$	*.	**	 	$	*.	**	 	$	*.	**
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	To earn 80% of tranche (100% of EPS target)
	 	$	*.	**	 	$	*.	**	 	$	*.	**
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	To earn 30% of tranche (95% of EPS target)
	 	$	*.	**	 	$	*.	**	 	$	*.	**
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	EPS at Zero (90% of EPS target)
	 	$	*.	**	 	$	*.	**	 	$	*.	**

 

			
	*	 	Confidential treatment requested pursuant to Rule 24b-2 under the Securities Exchange Act of
1934. In accordance with Rule 24b-2, these confidential portions have been omitted from this
exhibit and filed separately with the Securities and Exchange Commission.

 

 

CORVEL CORPORATION

Shares earned by EPS number by Tranche year

CY 2011, 2012, 2013

	 	 	 

	Option Grant

	 	2000 Shares of option grant
	CY 2011 Tranche

	 	600 30% of total grant
	CY 2012 Tranche

	 	600 30% of total grant
	CY 2013 Tranche

	 	800 40% of total grant

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	CY 2011	 	 	CY 2012	 	CY 2013	 
	 	 	 	 	Percentage	 	 	Shares	 	 	 	 	 	 	Percentage	 	 	Shares	 	 	 	 	 	 	Percentage	 	 	Shares	 
	 
	$ 	*.	**	 	 	0.0	%	 	 	0	 	 	$	*.	**	 	 	0.0	%	 	 	0	 	 	$	*.	**	 	 	0.0	%	 	 	0	 
	$ 	*.	**	 	 	2.3	%	 	 	14	 	 	$	*.	**	 	 	2.0	%	 	 	12	 	 	$	*.	**	 	 	1.8	%	 	 	14	 
	$ 	*.	**	 	 	4.6	%	 	 	28	 	 	$	*.	**	 	 	4.0	%	 	 	24	 	 	$	*.	**	 	 	3.5	%	 	 	28	 
	$ 	*.	**	 	 	6.9	%	 	 	42	 	 	$	*.	**	 	 	6.0	%	 	 	36	 	 	$	*.	**	 	 	5.3	%	 	 	42	 
	$ 	*.	**	 	 	9.2	%	 	 	55	 	 	$	*.	**	 	 	8.0	%	 	 	48	 	 	$	*.	**	 	 	7.1	%	 	 	56	 
	$ 	*.	**	 	 	11.5	%	 	 	69	 	 	$	*.	**	 	 	10.0	%	 	 	60	 	 	$	*.	**	 	 	8.8	%	 	 	71	 
	$ 	*.	**	 	 	13.8	%	 	 	83	 	 	$	*.	**	 	 	12.0	%	 	 	72	 	 	$	*.	**	 	 	10.6	%	 	 	85	 
	$ 	*.	**	 	 	16.2	%	 	 	97	 	 	$	*.	**	 	 	14.0	%	 	 	84	 	 	$	*.	**	 	 	12.4	%	 	 	99	 
	$ 	*.	**	 	 	18.5	%	 	 	111	 	 	$	*.	**	 	 	16.0	%	 	 	96	 	 	$	*.	**	 	 	14.1	%	 	 	113	 
	$ 	*.	**	 	 	20.8	%	 	 	125	 	 	$	*.	**	 	 	18.0	%	 	 	108	 	 	$	*.	**	 	 	15.9	%	 	 	127	 
	$ 	*.	**	 	 	23.1	%	 	 	138	 	 	$	*.	**	 	 	20.0	%	 	 	120	 	 	$	*.	**	 	 	17.6	%	 	 	141	 
	$ 	*.	**	 	 	25.4	%	 	 	152	 	 	$	*.	**	 	 	22.0	%	 	 	132	 	 	$	*.	**	 	 	19.4	%	 	 	155	 
	$ 	*.	**	 	 	27.7	%	 	 	166	 	 	$	*.	**	 	 	24.0	%	 	 	144	 	 	$	*.	**	 	 	21.2	%	 	 	169	 
	$ 	*.	**	 	 	30.0	%	 	 	180	 	 	$	*.	**	 	 	26.0	%	 	 	156	 	 	$	*.	**	 	 	22.9	%	 	 	184	 
	$ 	*.	**	 	 	33.8	%	 	 	203	 	 	$	*.	**	 	 	28.0	%	 	 	168	 	 	$	*.	**	 	 	24.7	%	 	 	198	 
	$ 	*.	**	 	 	37.7	%	 	 	226	 	 	$	*.	**	 	 	30.0	%	 	 	180	 	 	$	*.	**	 	 	26.5	%	 	 	212	 
	$ 	*.	**	 	 	41.5	%	 	 	249	 	 	$	*.	**	 	 	33.6	%	 	 	201	 	 	$	*.	**	 	 	28.2	%	 	 	226	 
	$ 	*.	**	 	 	45.4	%	 	 	272	 	 	$	*.	**	 	 	37.1	%	 	 	223	 	 	$	*.	**	 	 	30.0	%	 	 	240	 
	$ 	*.	**	 	 	49.2	%	 	 	295	 	 	$	*.	**	 	 	40.7	%	 	 	244	 	 	$	*.	**	 	 	33.1	%	 	 	265	 
	$ 	*.	**	 	 	53.1	%	 	 	318	 	 	$	*.	**	 	 	44.3	%	 	 	266	 	 	$	*.	**	 	 	36.3	%	 	 	290	 
	$ 	*.	**	 	 	56.9	%	 	 	342	 	 	$	*.	**	 	 	47.9	%	 	 	287	 	 	$	*.	**	 	 	39.4	%	 	 	315	 
	$ 	*.	**	 	 	60.8	%	 	 	365	 	 	$	*.	**	 	 	51.4	%	 	 	309	 	 	$	*.	**	 	 	42.5	%	 	 	340	 
	$ 	*.	**	 	 	64.6	%	 	 	388	 	 	$	*.	**	 	 	55.0	%	 	 	330	 	 	$	*.	**	 	 	45.6	%	 	 	365	 
	$ 	*.	**	 	 	68.5	%	 	 	411	 	 	$	*.	**	 	 	58.6	%	 	 	351	 	 	$	*.	**	 	 	48.8	%	 	 	390	 
	$ 	*.	**	 	 	72.3	%	 	 	434	 	 	$	*.	**	 	 	62.1	%	 	 	373	 	 	$	*.	**	 	 	51.9	%	 	 	415	 
	$ 	*.	**	 	 	76.2	%	 	 	457	 	 	$	*.	**	 	 	65.7	%	 	 	394	 	 	$	*.	**	 	 	55.0	%	 	 	440	 
	$ 	*.	**	 	 	80.0	%	 	 	480	 	 	$	*.	**	 	 	69.3	%	 	 	416	 	 	$	*.	**	 	 	58.1	%	 	 	465	 
	$ 	*.	**	 	 	81.5	%	 	 	489	 	 	$	*.	**	 	 	72.9	%	 	 	437	 	 	$	*.	**	 	 	61.3	%	 	 	490	 
	$ 	*.	**	 	 	83.1	%	 	 	498	 	 	$	*.	**	 	 	76.4	%	 	 	459	 	 	$	*.	**	 	 	64.4	%	 	 	515	 
	$ 	*.	**	 	 	84.6	%	 	 	508	 	 	$	*.	**	 	 	80.0	%	 	 	480	 	 	$	*.	**	 	 	67.5	%	 	 	540	 
	$ 	*.	**	 	 	86.2	%	 	 	517	 	 	$	*.	**	 	 	81.3	%	 	 	488	 	 	$	*.	**	 	 	70.6	%	 	 	565	 
	$ 	*.	**	 	 	87.7	%	 	 	526	 	 	$	*.	**	 	 	82.7	%	 	 	496	 	 	$	*.	**	 	 	73.8	%	 	 	590	 
	$ 	*.	**	 	 	89.2	%	 	 	535	 	 	$	*.	**	 	 	84.0	%	 	 	504	 	 	$	*.	**	 	 	76.9	%	 	 	615	 
	$ 	*.	**	 	 	90.8	%	 	 	545	 	 	$	*.	**	 	 	85.3	%	 	 	512	 	 	$	*.	**	 	 	80.0	%	 	 	640	 
	$ 	*.	**	 	 	92.3	%	 	 	554	 	 	$	*.	**	 	 	86.7	%	 	 	520	 	 	$	*.	**	 	 	81.3	%	 	 	650	 
	$ 	*.	**	 	 	93.8	%	 	 	563	 	 	$	*.	**	 	 	88.0	%	 	 	528	 	 	$	*.	**	 	 	82.5	%	 	 	660	 
	$ 	*.	**	 	 	95.4	%	 	 	572	 	 	$	*.	**	 	 	89.3	%	 	 	536	 	 	$	*.	**	 	 	83.8	%	 	 	670	 
	$ 	*.	**	 	 	96.9	%	 	 	582	 	 	$	*.	**	 	 	90.7	%	 	 	544	 	 	$	*.	**	 	 	85.0	%	 	 	680	 
	$ 	*.	**	 	 	98.5	%	 	 	591	 	 	$	*.	**	 	 	92.0	%	 	 	552	 	 	$	*.	**	 	 	86.3	%	 	 	690	 
	$ 	*.	**	 	 	100.0	%	 	 	600	 	 	$	*.	**	 	 	93.3	%	 	 	560	 	 	$	*.	**	 	 	87.5	%	 	 	700	 
	 	 	 	 	 	 	 	 	 	 	 	 	$	*.	**	 	 	94.7	%	 	 	568	 	 	$	*.	**	 	 	88.8	%	 	 	710	 
	 	 	 	 	 	 	 	 	 	 	 	 	$	*.	**	 	 	96.0	%	 	 	576	 	 	$	*.	**	 	 	90.0	%	 	 	720	 
	 	 	 	 	 	 	 	 	 	 	 	 	$	*.	**	 	 	97.3	%	 	 	584	 	 	$	*.	**	 	 	91.3	%	 	 	730	 
	 	 	 	 	 	 	 	 	 	 	 	 	$	*.	**	 	 	98.7	%	 	 	592	 	 	$	*.	**	 	 	92.5	%	 	 	740	 
	 	 	 	 	 	 	 	 	 	 	 	 	$	*.	**	 	 	100.0	%	 	 	600	 	 	$	*.	**	 	 	93.8	%	 	 	750	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	*.	**	 	 	95.0	%	 	 	760	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	*.	**	 	 	96.3	%	 	 	770	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	*.	**	 	 	97.5	%	 	 	780	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	*.	**	 	 	98.8	%	 	 	790	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	*.	**	 	 	100.0	%	 	 	800	 

Notwithstanding anything to the contrary in this Schedule A or the Stock Option Agreement
to which this Schedule A is attached, the Company shall have the right, in its sole
discretion, with or without the consent of the Optionee, to amend this Schedule A to adjust
any or all of the targets, dates and/or target EPS amounts as it deems equitable to recognize
unusual or non-recurring events, including, but not limited to the Company’s acquisition of another
business entity or assets, a corporate merger or other consolidation, or the sale or
discontinuation of significant business operations or business units of the Company; changes in tax
laws or accounting procedures; and any other extraordinary circumstances.

 

			
	*	 	Confidential treatment requested pursuant to Rule 24b-2 under
the Securities Exchange Act of 1934. In accordance with Rule 24b-2,
these confidential portions have been omitted from this exhibit and
filed separately with the Securities and Exchange Commission.

 

 

Exhibit A

Section 16 Insiders Discretionary Option Grant Program

CorVel Corporation

Stock Option Agreement

     A. The Board has adopted the Plan for the purpose of retaining the services of selected
Employees, non-employee members of the Board (or the board of directors of any Parent or
Subsidiary) and consultants and advisors who provide services to the Company (or any Parent or
Subsidiary).

     B. Optionee is to render valuable services to the Company (or a Parent or Subsidiary), and
this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in
connection with the Company’s grant of an option to Optionee.

     C. All capitalized terms in this Agreement shall have the meaning assigned to them in the
attached Appendix.

          Now, therefore, it is hereby agreed as follows:

          1. Grant of Option. Subject to and upon the terms and conditions set forth in this
Agreement, Optionee is hereby granted, as of the Grant Date, an option to purchase the Option
Shares. The Option Shares shall be purchasable from time to time during the option term at the
Exercise Price.

          2. Option Term. This option shall expire at the close of business on the Expiration
Date, unless sooner terminated in accordance with this Agreement.

          3. Limited Transferability.

               (a) During Optionee’s lifetime, this option shall be exercisable only by Optionee and shall
not be assignable or transferable other than by will, by the laws of descent and distribution
following the Optionee’s death, or to any “Family Member” (as such term is defined in the General
Instructions to Form S-8 (or any successor to such Instructions or such Form) under the Securities
Act), provided that Optionee may not receive any consideration for such transfer, the Family Member
may not make any subsequent transfers other than by will or by the laws of descent and distribution
and the Company receives written notice of such transfer. This assigned portion may only be
exercised by the person or persons who acquire a proprietary interest in the option pursuant to the
assignment. The terms applicable to the assigned portion shall be the same as those in effect for
this option immediately prior to such assignment and shall be set forth in such documents issued to
the assignee as the Company may deem appropriate.

               (b) Should Optionee die while holding this option, then this option shall be transferred in
accordance with Optionee’s will or the laws of inheritance. However, Optionee may designate one or
more persons as the beneficiary or beneficiaries of this
option, and this option shall, in accordance with such designation, automatically be
transferred to such

 

 

beneficiary or beneficiaries upon Optionee’s death while holding this option. Such beneficiary or
beneficiaries shall take the transferred option subject to all the terms and conditions of this
Agreement, including (without limitation) the limited time period during which this option may,
pursuant to Paragraph 5, be exercised following Optionee’s death.

          4. Exercisability. This option shall become exercisable in one or more installments as
specified in the Grant Notice. As the option becomes exercisable for such installments, those
installments shall accumulate, and the option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination of the option term.

          5. Effect of Cessation of Service.

               (a) Should Optionee cease to be a Service Provider for any reason (other than death, Permanent
Disability or Misconduct) while this option is outstanding, then this option shall remain
exercisable until the earlier of (i) the expiration of the three month period commencing with the
date of such cessation of Service Provider status or (ii) the Expiration Date.

               (b) Should Optionee cease to be a Service Provider by reason of Permanent Disability or death
while this option is outstanding, then the option shall remain exercisable until the earlier of (i)
the expiration of the twelve month period commencing with the date of such cessation of Service
Provider status or (ii) the Expiration Date.

               (c) Should Optionee cease to be a Service Provider due to termination for Misconduct, then
this option shall terminate immediately.

               (d) During the limited period of post-service exercisability, this option may not be exercised
in the aggregate for more than the number of Option Shares for which the option is exercisable at
the time Optionee ceased to be a Service Provider. This option shall, immediately when Optionee
ceases to be a Service Provider for any reason, terminate with respect to any Option Shares for
which this option is not otherwise at that time exercisable. Upon the expiration of the limited
post-service exercise period or (if earlier) upon the Expiration Date, this option shall terminate
entirely.

          6. Effect of Corporate Transaction.

               (a) This option, to the extent outstanding at the time of a Corporate Transaction but not
otherwise fully exercisable, shall automatically accelerate so that this option shall, immediately
prior to the effective date of such Corporate Transaction, become exercisable for all of the Option
Shares at the time subject to this option. However, this option shall not become exercisable on
such an accelerated basis, if and to the extent: (i) this option is, in connection with the
Corporate Transaction, to be assumed by the successor corporation (or parent thereof) or to be
replaced with a comparable option to
purchase shares of the capital stock of the successor corporation (or parent thereof) or (ii)
this option is to be replaced with a cash incentive program of the successor corporation which
preserves the spread existing at the time of the Corporate Transaction on any Option Shares for
which this option is not otherwise at that

2

 

time exercisable (the excess of the Fair Market Value of those Option Shares over the aggregate
Exercise Price payable for such shares) and provides for subsequent payout in accordance with the
same exercise schedule for those Option Shares set forth in the Grant Notice.

               (b) Upon the consummation of the Corporate Transaction, this option shall terminate, except to
the extent assumed by the successor corporation (or parent thereof) in connection with the
Corporate Transaction.

               (c) If this option is assumed in connection with a Corporate Transaction, then this option
shall be appropriately adjusted, immediately after such Corporate Transaction, to apply to the
number and class of securities which would have been issuable to Optionee as a result of the
consummation of such Corporate Transaction had the option been exercised immediately prior to such
Corporate Transaction, and appropriate adjustments shall also be made to the Exercise Price,
provided the aggregate Exercise Price shall remain the same.

               (d) This Agreement shall not in any way affect the right of the Company to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or assets.

          7. Adjustment in Option Shares. Should any change be made to the Common Stock by
reason of any stock split, reverse stock split, stock dividend, recapitalization, combination of
shares, exchange of shares, reorganization, merger, consolidation, split-up, spin-off, or other
change affecting the outstanding Common Stock as a class without the Company’s receipt of
consideration, appropriate adjustments shall be made to (a) the total number and/or class of
securities subject to this option and (b) the Exercise Price in order to reflect such change and
thereby preclude a dilution or enlargement of benefits hereunder.

          8. Stockholder Rights. The holder of this option shall not have any stockholder rights
with respect to the Option Shares until such person shall have exercised the option in accordance
with the provisions of Paragraph 9, paid the Exercise Price and become a holder of record of the
purchased shares.

          9. Manner of Exercising Option.

               (a) In order to exercise this option with respect to all or any part of the Option Shares for
which this option is at the time exercisable, Optionee (or any other person or persons exercising
the option) must take the following actions:

               (i) Execute and deliver to the Company (A) a Notice of Exercise, in substantially the form
attached hereto as Exhibit I, that specifies the number of Option Shares for
which the option is being exercised and (B) any additional documents which the Committee may,
in its discretion, deem advisable.

3

 

               (ii) Pay the aggregate Exercise Price for the purchased shares in one or more of the following
forms:

               (A) cash or check payable to the Company’s order;

               (B) shares of Common Stock held by Optionee for the requisite period necessary to avoid a
charge to the Company’s reported earnings and valued at Fair Market Value on the Exercise Date; or

               (C) through a special sale and remittance procedure pursuant to which Optionee is to provide
irrevocable written instructions (1) to a brokerage firm to effect the immediate sale of the
purchased shares and remit to the Company, out of the sale proceeds available on the settlement
date, an amount sufficient to cover the aggregate Exercise Price payable for the purchased shares
plus all applicable Federal and state income and employment taxes required to be withheld by the
Company by reason of such purchase and (2) to the Company to deliver the certificates for the
purchased shares directly to such brokerage firm in order to complete the sale transaction.

               (iii) Furnish to the Company appropriate documentation
that the person or persons exercising the option (if other than Optionee) have the right to
exercise this option.

               (iv) Make appropriate arrangements with the Company (or Parent or Subsidiary employing or
retaining Optionee) for the satisfaction of all Federal, state and local income and employment tax
withholding requirements applicable to the option exercise.

               (b) If payment of the exercise price is made by means of the surrender of shares of Common
Stock which are subject to certain restrictions, the number of shares of Common Stock issued upon
the exercise of the option equal to the number of shares of restricted stock surrendered shall be
subject to the same restrictions as the restricted stock that was surrendered.

               (c) Except to the extent the sale and remittance procedure specified in Paragraph 9(a)(ii)(C)
is utilized in connection with the option exercise, payment of the option price for the purchased
shares must accompany the Notice of Exercise.

               (d) Assuming Optionee does not sell the purchased shares of Common Stock on the Exercise Date,
as soon as practical after the Exercise Date, the Company shall either (i) issue to or on behalf of
Optionee (or any other person or persons exercising this option) a certificate for the purchased
Option Shares, with the appropriate legends affixed thereto, or (ii) instruct the Company’s
transfer agent to make a book-entry reflecting the purchase on its stockholder ledger.

4

 

               (e) In no event may this option be exercised for any fractional shares.

          10. Tax Withholding. The Committee may, in its discretion and upon such terms and
conditions as it may deem appropriate (including the applicable safe-harbor provisions of
Securities and Exchange Commission Rule 16b-3 or any successor rule or regulation) provide Optionee
(if Optionee is an Employee) with the election to surrender previously acquired shares of Common
Stock or have shares withheld in satisfaction of the tax withholding obligations. To the extent
necessary to avoid adverse accounting treatment, the number of shares that may be withheld for this
purpose shall not exceed the minimum number needed to satisfy the applicable income and employment
tax withholding rules. If Common Stock is used to satisfy the Company’s tax withholding
obligations, the shares of Common Stock shall have been held by Optionee for the requisite period
necessary to avoid a charge to the Company’s reported earnings and shall be valued at their Fair
Market Value when the tax withholding is required to be made.

          11. Compliance with Laws and Regulations.

               (a) The exercise of this option and the issuance of the Option Shares upon such exercise shall
be subject to compliance by the Company and Optionee with all applicable requirements of law
relating thereto and with all applicable regulations of any Stock Exchange (or the Nasdaq Stock
Market, if applicable) on which the Common Stock may be listed for trading at the time of such
exercise and issuance.

               (b) The inability of the Company to obtain approval from any regulatory body having authority
deemed by the Company to be necessary to the lawful issuance and sale of any Common Stock pursuant
to this option shall relieve the Company of any liability with respect to the non-issuance or sale
of the Common Stock as to which such approval shall not have been obtained. The Company, however,
shall use reasonable efforts to obtain all such approvals.

          12. Successors and Assigns. Except to the extent otherwise provided in this Agreement,
the provisions of this Agreement shall inure to the benefit of, and be binding upon, the Company
and its successors and assigns and Optionee, Optionee’s assigns, the legal representatives, heirs
and legatees of Optionee’s estate and any beneficiaries of this option designated by Optionee.

          13. Notices. Any notice required to be given or delivered to the Company under the
terms of this Agreement shall be in writing and addressed to the Company at its principal corporate
offices. Any notice required to be given or delivered to Optionee shall be in writing and addressed
to Optionee at the address indicated below Optionee’s signature line on the Grant Notice. All
notices shall be deemed effective upon personal delivery or three days after deposit in the U.S.
mail, postage prepaid and properly addressed to the party to be notified.

          14. Construction. This Agreement and the option evidenced hereby are made and granted
pursuant to the Plan and are in all respects limited by and subject to the terms of
the Plan. In the event of a conflict between the terms and conditions of the Plan and the
terms and conditions of this Agreement, the terms and conditions of this Agreement shall prevail.
All

5

 

decisions of the Committee with respect to any question or issue arising under the Plan or this
Agreement shall be conclusive and binding on all persons having an interest in this option.

          15. Governing Law. The interpretation, performance and enforcement of this Agreement
shall be governed by the laws of the State of Delaware without resort to its conflict-of-laws
rules.

          16. No Employment/Service Contract. Nothing in this Agreement or in the Plan shall
confer upon Optionee any right to continue to be a Service Provider of the Company (or any Parent
or Subsidiary) for any period of specific duration or otherwise interfere with or restrict in any
way the rights of the Company (or such Parent or Subsidiary) or Optionee, which rights are hereby
expressly reserved by each, to terminate Optionee’s Service Provider status at any time and for any
reason whatsoever, with or without cause.

6

 

EXHIBIT I

NOTICE OF EXERCISE OF STOCK OPTION

     I
hereby notify CorVel Corporation (the “Company”) that I,
________________________, elect to
purchase __________ shares of Common Stock of the Corporation (the “Purchased
Shares”) at an option price of $ __________ per share (the “Option Price”) pursuant to the option
(the “Option”) granted to me on ____________.

          My option was granted as a non-qualified stock option. I will need to report taxable income at
the time I exercise this Option and pay the corresponding withholding tax (the “Withholding Tax”)
to the Corporation. The Withholding Tax is computed on the difference between the Option Price and
the Fair Market Value of the stock on the date I exercise the Option.

          Concurrently with the delivery of the Exercise Notice to the Chief Financial Officer of the
Corporation, I shall hereby pay to the Corporation the Option Price and Withholding Tax for the
Purchased Shares in accordance with the provisions of my agreement with the Corporation evidencing
the Option and shall deliver whatever additional documents may be required by such agreement as a
condition for exercise.

	 	 	 	 	 
	 
	Date	 	Optionee’s Signature
	 
	 	 	 	 
	If applicable, print name in exact manner it

is to appear on the stock certificate:

	 	 
	 
	 	 	 	 
	Optionee’s Mailing Address:

	 	 
	 

	 	 
	 
	 	 	 	 
	Address to which certificate is to be sent, if

different from address above:

	 	 
	 

	 	 
	 
	 	 	 	 
	Brokerage
Account Information

	 	 
	(Broker Name, Contact Info., Account #)

	 	 	 
	 

	 	 
	 
	 	 	 	 

A-1

 

APPENDIX

          The following definitions shall be in effect under this Agreement:

     A. Agreement shall mean this Stock Option Agreement.

     B. Board shall mean the Board of Directors of the Company.

     C. Common Stock  shall mean shares of the Company’s common stock, $0.0001 par value.

     D. Code shall mean the Internal Revenue Code of 1986, as amended.

     E. Committee shall mean a committee designated by the Board to administer the Plan,
which initially shall be the compensation committee of the Board. The Committee shall be comprised
of at least two directors but not less than such number of directors as shall be required to permit
awards granted under the Plan to qualify under Rule 16b-3 under the Securities Act and Section
162(m) of the Code, and each member of the Committee shall be a “Non-Employee Director” within the
meaning of Rule 16b-3 under the Securities Act and an “Outside Director” within the meaning of
Section 162(m) of the Code.

     F. Company shall mean CorVel Corporation, a Delaware corporation, or any corporate
successor which shall assume the Plan.

     G. Corporate Transaction shall mean any of the following transactions for which the
approval of the Company’s stockholders is obtained:

     (i) a merger or acquisition in which the Company is not the surviving entity, except for a
transaction the principal purpose of which is to change the state of the Company’s incorporation,

     (ii) the sale, transfer or other disposition of all or substantially all of the assets of the
Company to any entity other than a parent or subsidiary of the Company, or

     (iii) any reverse merger in which the Company is the surviving entity but in which fifty
percent (50%) or more of the Company’s outstanding voting stock is transferred to holders different
from those who held such fifty percent (50%) or greater interest immediately prior to such merger.

     H. Employee shall mean an individual for whom the Company or one or more of its Parent
or Subsidiaries reports his or her earnings on a Form W-2.

     I. Exercise Date shall mean the date on which the option shall have been exercised in
accordance with Paragraph 9.

A-2

 

     J. Exercise Price shall mean the exercise price per Option Share as specified in the
Grant Notice.

     K. Expiration Date shall mean the date on which the option expires as specified in the
Grant Notice.

     L. Fair Market Value per share of Common Stock on any relevant date shall be
determined in accordance with the following provisions:

     (i) If the Common Stock is at the time listed on the Nasdaq National Market or the Nasdaq
Capital Market, then the Fair Market Value shall be the closing selling price per share of Common
Stock on the date in question, as such price is reported by the National Association of Securities
Dealers on the Nasdaq National Market or the Nasdaq Capital Market and published in The Wall Street
Journal.

     (ii) If the Common Stock is at the time listed on any Stock Exchange, then the Fair Market
Value shall be the closing selling price per share of Common Stock on the date in question on the
Stock Exchange determined by the Committee to be the primary market for the Common Stock, as such
price is officially quoted in the composite tape of transactions on such exchange and published in
The Wall Street Journal.

     (iii) If the Common Stock is not listed on the Nasdaq National Market, Nasdaq Capital Market
or a national securities exchange, the Fair Market Value shall be the average of the closing bid
and ask prices of the Common Stock on that day as reported by the Nasdaq bulletin board or any
comparable system on that day.

     (iv) If the Common Stock is not traded included in the Nasdaq bulletin board or any comparable
system, the Fair Market Value shall be the average of the closing bid and ask prices on that day as
furnished by any member of the National Association of Securities Dealers, Inc. selected from time
to time by the Company for that purpose.

     (v) If the date in question is not a trading day, then the Fair Market Value shall be
determined based on prices for the trading day prior to the date in question.

     M. Grant Date shall mean the date of grant of the option as specified in the Grant
Notice.

     N. Grant Notice shall mean the Notice of Grant of Stock Option accompanying this
Agreement, pursuant to which Optionee has been informed of the basic terms of the option evidenced
hereby.

     O. Misconduct shall mean any of the following:

          (i) Optionee’s intentional misconduct or continuing gross neglect of duties which materially
and adversely affects the business and operations of the Company or any Parent or Subsidiary
employing Optionee;

A-3

 

          (ii) Optionee’s unauthorized use or disclosure of (or attempt to use or disclose) confidential
information or trade secrets of the Company or any Parent or Subsidiary; or

          (iii) Optionee’s commission of an act involving embezzlement, theft, fraud, falsification of
records, destruction of property or commission of a crime or other offense involving money or other
property of the Company or any Parent or Subsidiary employing Optionee.

               The reasons for termination of Optionee as a Service Provider set forth in this subparagraph
are not intended to be an exclusive list of all acts or omissions which the Company (or any Parent
or Subsidiary) may deem to constitute misconduct or other grounds for terminating Optionee (or any
other individual).

     P. Non-Statutory Option shall mean an option not intended to satisfy the requirements
of Code Section 422.

     Q. Notice of Exercise shall mean the notice of exercise in the form attached hereto as
Exhibit I.

     R. Option Shares shall mean the number of shares of Common Stock subject to the option
as specified in the Grant Notice.

     S. Optionee shall mean the person to whom the option is granted as specified in the
Grant Notice.

     T. Parent shall mean any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, provided each such corporation in the unbroken chain (other
than the Company) owns, at the time of the determination, stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the other corporations in
such chain.

     U. Permanent Disability shall have the meaning assigned to “permanent and total
disability” as set forth in Code Section 22(e)(3).

     V. Plan shall mean the CorVel Corporation Restated Omnibus Incentive Plan (Formerly
The Restated 1988 Executive Stock Option Plan).

     W. Securities Act shall mean the Securities Act of 1933, as amended.

     X. Service Provider shall mean an individual who renders service on a periodic basis
to the Company, its Parent and/or any of its Subsidiaries as an Employee, a non-Employee member of
the board of directors or a consultant or independent advisor.

     Y. Stock Exchange shall mean the American Stock Exchange or the New York Stock
Exchange, or any other national stock exchange.

A-4

 

     Z. Subsidiary shall mean any corporation (other than the Company) in an unbroken chain
of corporations beginning with the Company, provided such corporation (other than the last
corporation in the unbroken chain) owns, at the time of determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain. For purposes of all Non-Statutory Option grants under the Plan
and all Corporate Transaction provisions of the Plan, the term “Subsidiary” shall also include any
partnership, joint venture or other business entity of which the Company owns, directly or
indirectly through another entity, more than a fifty percent (50%) interest in voting power,
capital or profits.

A-5exv10w1

Exhibit 10.1

SUPERCONDUCTOR TECHNOLOGIES INC.

PLACEMENT AGENT AGREEMENT

February 3, 2011

MDB Capital Group LLC

401 Wilshire Boulevard, Suite 1020

Santa Monica, California 90401

Ladies and Gentlemen:

     Pursuant to the terms of the Common Stock Purchase Agreements in the form of Exhibit A
attached hereto (the “Purchase Agreements”), Superconductor Technologies Inc., a Delaware
corporation (the “Company”), proposes to sell to the Purchasers identified therein (each a
“Purchaser” and, collectively, the “Purchasers”), an aggregate of 5,443,000 shares
of Common Stock, $0.001 par value (the “Common Stock”), of the Company. The aggregate of
5,443,000 shares so proposed to be sold is hereinafter referred to as the “Shares.” Any
capitalized terms used but not specifically defined herein shall have the meanings set forth in the
form of Purchase Agreement attached hereto as Exhibit A. Pursuant to this Placement Agent
Agreement (this “Agreement”), the Company hereby confirms its agreement with MDB Capital
Group LLC (“MDB”) as follows:

     1. Agreement to Act as Placement Agent; Placement of Securities. On the basis of the
representations, warranties and agreements of the Company herein contained, and subject to all the
terms and conditions of this Agreement:

          (a) The Company hereby authorizes MDB to act as its exclusive agent (in such capacity, the
“Placement Agent”) to solicit offers for the purchase of all or part of the Shares from the
Company in connection with the proposed public offering of the Shares (the “Offering”).
Until August 3, 2011, the Company shall not, without the prior consent of the Placement
Agent, solicit or accept offers to purchase Shares otherwise than through the Placement Agent.

          (b) The Placement Agent shall make commercially reasonable efforts to assist the Company in
obtaining performance by each Purchaser whose offer to purchase Shares has been solicited by the
Placement Agent and accepted by the Company, but the Placement Agent shall not, except as otherwise
provided in this Agreement, be obligated to disclose the identity of any potential purchaser or
have any liability to the Company in the event any such purchase is not consummated for any reason.
Under no circumstances will the Placement Agent be obligated to purchase any Shares for its own
account and, in soliciting purchases of Shares, the Placement Agent shall act solely as the
Company’s agent and not as principal.

          (c) The Company shall have the sole right to accept offers to purchase the Shares and may
reject any such offer, in whole or in part. The Placement Agent shall have the right, in its
discretion reasonably exercised, without notice to the Company, to reject any offer to purchase
Shares received by it, in whole or in part, and any such rejection shall not be deemed a breach of
its agreement contained herein.

 

 

          (d) The purchases of the Shares by the Purchasers shall be evidenced by the execution of the
Purchase Agreements.

          (e) As compensation for services rendered, on each Closing Date the Company shall pay to the
Placement Agent by wire transfer of immediately available funds to an account or accounts
designated by the Placement Agent, an amount equal to six percent (6%) of the gross proceeds
received by the Company from the sale of the Shares on such Closing Date.

          (f) No Shares which the Company has agreed to sell pursuant to the Purchase Agreements shall
be deemed to have been purchased and paid for, or sold by the Company, until such Shares shall have
been delivered to the Purchaser thereof against payment by such Purchaser. If the Company shall
default in its obligations to deliver Shares to a Purchaser whose offer it has accepted, the
Company shall indemnify and hold the Placement Agent harmless against any loss, claim or damage
arising from or as a result of such default by the Company.

          (g) The Placement Agent shall make reasonable efforts to obtain a communication from the
Financial Industry Regulatory Authority (“FINRA”) indicating that FINRA shall have raised
no objection to the fairness and reasonableness of the placement agent terms and arrangements.

     2. The Closing. The time and date of closing and delivery of the documents required
to be delivered to the Placement Agent will be as set forth in the Purchase Agreements.

     3. Representations and Warranties of the Company. The Company hereby makes the same
representations and warranties to the Placement Agent as those made to the Purchasers under the
Purchase Agreements.

     4. Representations and Warranties of the Placement Agent. The Placement Agent hereby
represents and warrants to the Company that it has all necessary licenses to act as Placement Agent
hereunder.

     5. Covenants of the Company. The Company hereby agrees with the Placement Agent that:

          (a) The Company consents to the use by the Placement Agent of the Registration Statement and
Prospectus and any issuer free writing prospectus or any amendment or supplement thereto and any
issuer information used or referred to in any Permitted Free Writing Prospectus (as defined below)
in connection with the Offering.

          (b) The Company will make “generally available” (as such term is described in Rule 158(b) of
the Act) to its security holders and to the Placement Agent as soon as practicable, but in any
event not later than twelve months after the effective date of the Registration Statement (as
defined in Rule 158(c) under the Act), an earnings statement of the Company and the Subsidiaries
which need not be audited, complying with Section 11(a) of the Act (including, at the option of the
Company, Rule 158 under the Act).

          (c) The Company will take all action required in connection with the qualification of the
Shares under the securities or blue sky laws of such jurisdictions as the

2

 

Placement Agent may request and continue such qualification in effect so long as reasonably
required; provided, the Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction where it is not now so qualified
or required to file such a consent.

          (d) Whether or not the Offering or any of the transactions contemplated in this Agreement or
the Registration Statement and Prospectus are consummated or this Agreement is terminated, to pay
(i) all costs, expenses, fees and taxes incidental to and in connection with: (A) the preparing,
printing, filing and distributing of the Registration Statement, any Preliminary Prospectus, the
Prospectus and any issuer free writing prospectus and all amendments and supplements thereto
(including, without limitation, financial statements and exhibits), and all other agreements,
memoranda, correspondence and other documents prepared and delivered in connection herewith, (B)
negotiating, printing, processing and distributing (including, without limitation, word processing
and duplication costs) and delivering, each of the Preliminary Prospectus, the Prospectus and any
issuer free writing prospectus and all amendments and supplements thereto (including, without
limitation, financial statements and exhibits), and all other agreements, memoranda, correspondence
and other documents prepared and delivered in connection herewith, (C) the preparing, issuing and
delivering the Shares, (D) qualifying the Shares for offer and sale under the securities or blue
sky laws of the several states and (E) furnishing such copies of the Registration Statement, any
Preliminary Prospectus and the Prospectus, and all amendments and supplements thereto, as may
reasonably be requested for use by the Placement Agent, (ii) all reasonable fees and expenses of
the counsel, accountants and any other experts or advisors retained by the Company, (iii) all fees
and expenses (including reasonable fees and expenses of counsel) of the Company in connection with
approval of the Shares by the Depository Trust Company for “book-entry” transfer, (iv) any listing
fees of the Shares on the NASDAQ Stock Market, (v) the registration, issue, sale and delivery of
the Shares including any stock or transfer taxes and stamp or similar duties payable upon the sale,
issuance or delivery of the Shares to the Placement Agent, (vi) all fees, disbursements and
out-of-pocket expenses incurred by the Placement Agent in connection with its services to be
rendered hereunder including, without limitation, reasonable travel and lodging expenses,
reasonable expenses associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show presentations, travel, lodging
and other expenses incurred by any such consultants, word processing charges, messenger and
duplicating services, facsimile expenses and other customary expenditures, including (subject to
the following sentence) reasonable legal fees, (vii) the fees of FINRA in connection with its
review of the Offering, and (viii) all other costs and expenses incident to the performance by the
Company of its obligations hereunder. The Placement Agent will not incur any costs to be
reimbursed hereunder without the prior written consent of the Company; provided, at Closing, the
Company shall reimburse the Placement Agent’s reasonable legal fees and expenses incurred by it in
connection with the Offering, up to a maximum aggregate of $30,000; provided, further, that such
reimbursement payment will fully satisfy all obligations of the Company to reimburse the Placement
Agent’s legal fees for the Placement Agent’s selling efforts for the Offering through and including
the Closing. The parties hereto agree that there are no outstanding reimbursable expenses or fees
owing to the Placement Agent in respect of prior offerings of securities by the Company.

3

 

          (e) Not to, and to ensure that no “affiliate” (as defined in Rule 501(b) of the Act) of the
Company will, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of
any “security” (as defined in the Act) that would be integrated with the sale of the Shares and
cause a violation of federal securities laws.

          (f) Not to, and not to authorize or permit any person acting on its behalf to, distribute any
offering material in connection with the offer and sale of the Shares other than the Registration
Statement, any issuer free writing prospectus permitted to be distributed and the Prospectus and
any amendments and supplements thereto or to the Registration Statement and the Prospectus prepared
in compliance with this Agreement.

          (g) The Company will not take and will cause its controlled affiliates (within the meaning of
Rule 144 under the Act) not to take, directly or indirectly, any action designed to or which has
constituted or which might reasonably be expected to cause or result, under the Exchange Act or
otherwise, in stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares in violation of applicable law.

          (h) To pay all stamp, documentary and transfer taxes and other duties, if any, which may be
imposed by the United States or any political subdivision thereof or taxing authority thereof or
therein with respect to the issuance of the Shares or the sale thereof to the subscribers.

     6. Mutual Covenants. The Company agrees that, unless it obtains the prior written
consent of the Placement Agent, and the Placement Agent agrees with the Company that, unless it has
obtained or will obtain, as the case may be, the prior written consent of the Company, it has not
made and will not make any offer relating to the Shares that would constitute an issuer free
writing prospectus or that would otherwise constitute a free writing prospectus required to be
filed by the Company with the Commission or retained by the Company under Rule 433 under the Act.
Any such free writing prospectus consented to by the Placement Agent or the Company is hereinafter
referred to as a “Permitted Free Writing Prospectus.” The Company agrees that (x) it has
treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an issuer
free writing prospectus and (y) it has complied and will comply, as the case may be, with the
requirements of Rules 164 and 433 under the Act applicable to any Permitted Free Writing
Prospectus, including in respect of timely filing with the Commission, legending and record
keeping. If at any time after the date hereof any events shall have occurred as a result of which
any issuer free writing prospectus, as then amended and supplemented, would conflict with the
information in the Registration Statement, the Prospectus or would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading, or, if for any other
reason it shall be necessary to amend or supplement any issuer free writing prospectus, the Company
agrees to notify the Placement Agent and, upon the Placement Agent’s request, to file such document
and prepare and furnish without charge to the Placement Agent as many copies as the Placement Agent
may from time to time reasonably request of an amended or supplemented issuer free writing
prospectus that will correct such conflict, statement or omission or effect such compliance.

     7. Indemnification and Contribution.

4

 

          (a) The Company agrees to indemnify and hold harmless the Placement Agent, and each person, if
any, who controls the Placement Agent within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, against any losses, claims, damages or liabilities of any kind to which, jointly
or severally, the Placement Agent or such controlling person may become subject under the Act, the
Exchange Act or otherwise, insofar as any such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue
statement of any material fact contained in (A) the Registration Statement, the Prospectus or any
issuer free writing prospectus, or in any amendment thereof or supplement thereto, (B) any “issuer
information” used or referred to in any “free writing prospectus” (as defined in Rule 405 under the
Act) used or referred to by the Placement Agent, or (C) any blue sky application or other document
prepared or executed by the Company (or based upon an written information furnished by the Company)
specifically for the purpose of qualifying any or all of the Shares under the securities laws of
any state or other jurisdiction (the documents referred to in subclauses (A), (B) and (C) hereof
being referred to collectively as the “Indemnity Documents”); or (ii) the omission or
alleged omission to state in any of the Indemnity Documents a material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading, including any losses, claims, damages or liabilities arising out of or
based upon the Company’s failure to perform its obligations under the Purchase Agreements, and,
subject to the provisions hereof, will reimburse, as incurred, the Placement Agent and each such
controlling person for any legal or other expenses reasonably incurred by the Placement Agent or
such controlling person in connection with investigating, defending against or appearing as a
third-party witness in connection with any such loss, claim, damage, liability or action in respect
thereof; provided, however, that the Company will not be liable in any such case to the extent (but
only to the extent) that any such loss, claim, damage or liability resulted from any untrue
statement or alleged untrue statement or omission or alleged omission made in any of the Indemnity
Documents in reliance upon and in conformity with the Placement Agent Information. This indemnity
agreement will be in addition to any liability that the Company may otherwise have to the
indemnified parties.

          (b) The Placement Agent agrees to indemnify and hold harmless each of the Company, and its
respective directors, officers and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act against any losses, claims, damages or
liabilities of any kind to which the Company or any such director, officer or controlling person
may become subject under the Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) resulted from (i) any untrue statement or
alleged untrue statement of any material fact contained in any of the Indemnity Documents, or (ii)
the omission or the alleged omission to state therein a material fact required to be stated in any
of the Indemnity Documents or necessary to make the statements therein not misleading, in each case
to the extent (but only to the extent) that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with the Placement Agent
Information; and, subject to the limitation set forth immediately preceding this clause, will
reimburse, as incurred, any legal or other expenses incurred by the Company or any of its
directors, officers or controlling persons in connection with any such loss, claim, damage,
liability or action in respect thereof. This indemnity agreement will be in addition to any
liability that the Placement Agent may otherwise have to such indemnified parties.

5

 

          (c) As promptly as reasonably practical after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action for which such indemnified party is entitled
to indemnification under this Section 7, such indemnified party will, if a claim in respect thereof
is to be made against the indemnifying party under this Section 7, notify the indemnifying party of
the commencement thereof in writing; but the omission to so notify the indemnifying party (i) will
not relieve such indemnifying party from any liability under paragraph (a) or (b) above unless and
only to the extent it is materially prejudiced as a result thereof and (ii) will not, in any event,
relieve the indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraphs (a) and (b) above. In case any such action is
brought against any indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to the extent that it
may determine, jointly with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party; provided, however, that if
(i) the use of counsel chosen by the indemnifying party to represent the indemnified party would
present such counsel with a conflict of interest, (ii) the defendants in any such action include
both the indemnified party and the indemnifying party, and the indemnified party shall have been
advised by counsel in writing that there may be one or more legal defenses available to it and/or
other indemnified parties that are different from or additional to those available to the
indemnifying party, or (iii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within a reasonable time
after receipt by the indemnifying party of notice of the institution of such action, then, in each
such case, the indemnifying party shall not have the right to direct the defense of such action on
behalf of such indemnified party or parties and such indemnified party or parties shall have the
right to select separate counsel to defend such action on behalf of such indemnified party or
parties at the expense of the indemnifying party. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and approval by such indemnified
party of counsel appointed to defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 7 for any legal or other expenses, other than reasonable costs
of investigation, subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel in accordance with
the proviso to the immediately preceding sentence (it being understood, however, that in connection
with such action the indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general allegations or
circumstances, designated by the Placement Agent in the case of paragraph (a) of this Section 7 or
the Company in the case of paragraph (b) of this Section 7, representing the indemnified parties
under such paragraph (a) or paragraph (b), as the case may be, who are parties to such action or
actions) or (ii) the indemnifying party has authorized in writing the employment of counsel for the
indemnified party at the expense of the indemnifying party. After such notice from the indemnifying
party to such indemnified party, the indemnifying party will not be liable for the costs and
expenses of any settlement of such action effected by such indemnified party without the prior
written consent of the indemnifying party (which consent shall not be unreasonably withheld),
unless such indemnified party waived in writing its rights under this Section 7, in which case the
indemnified party may effect such a settlement without such consent.

6

 

          (d) No indemnifying party shall be liable under this Section 7 for any settlement of any claim
or action (or threatened claim or action) effected without its written consent, which shall not be
unreasonably withheld, but if a claim or action is settled with its written consent, or if there be
a final judgment for the plaintiff with respect to any such claim or action, each indemnifying
party, jointly and severally, agrees, subject to the exceptions and limitations set forth above, to
indemnify and hold harmless each indemnified party from and against any and all losses, claims,
damages or liabilities (and legal and other expenses as set forth above) incurred by reason of such
settlement or judgment. No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld), effect any settlement or
compromise of any pending or threatened proceeding in respect of which the indemnified party is or
could have been a party, or indemnity could have been sought hereunder by the indemnified party,
unless such settlement (A) includes an unconditional written release of the indemnified party, in
form and substance satisfactory to the indemnified party, from all liability on claims that are the
subject matter of such proceeding and (B) does not include any statement as to an admission of
fault, culpability or failure to act by or on behalf of the indemnified party.

          (e) In circumstances in which the indemnity agreement provided for in the preceding paragraphs
of this Section 7 is unavailable to, or insufficient to hold harmless, an indemnified party in
respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to
therein, each indemnifying party, in order to provide for just and equitable contributions, shall
contribute to the amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect (i) the relative benefits received by the indemnifying party or parties, on the one
hand, and the indemnified party, on the other, from the Offering or (ii) if the allocation provided
by the foregoing clause (i) is not permitted by applicable law, not only such relative benefits but
also the relative fault of the indemnifying party or parties, on the one hand, and the indemnified
party, on the other, in connection with the statements or omissions or alleged statements or
omissions that resulted in such losses, claims, damages or liabilities (or actions in respect
thereof). The relative benefits received by the Company, on the one hand, and the Placement Agent,
on the other, shall be deemed to be in the same proportion as the total proceeds from the Offering
(before deducting expenses) received by the Company bear to the total discounts, commissions and
fees received by the Placement Agent. The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to information supplied by the
Company, on the one hand, or the Placement Agent, on the other, the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission
or alleged statement or omissions, and any other equitable considerations appropriate in the
circumstances.

          (f) The Company and the Placement Agent agree that it would not be equitable if the amount of
such contribution determined pursuant to the immediately preceding paragraph (e) were determined by
pro rata or per capita allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the first sentence of the immediately preceding
paragraph (e). Notwithstanding any other provision of this Section 7, the Placement Agent shall not
be obligated to make contributions hereunder, or make any other payments under this Section 7, that
in the aggregate exceed the total discounts,

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commissions, fees and other compensation received by such Placement Agent under this Agreement
less the aggregate amount of any damages that such Placement Agent has otherwise been required to
pay by reason of the untrue or alleged untrue statements or the omissions or alleged omissions to
state a material fact. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For purposes of the immediately preceding paragraph (e), each
person, if any, who controls the Placement Agent within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the Placement Agent,
and each director and officer of the Company and each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, shall have the same
rights to contribution as the Company.

     8. Successors; Persons Entitled To Benefit Of Agreement. This Agreement shall inure
to the benefit of and be binding upon the Placement Agent, the Company, and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to
give any person other than the persons mentioned in the preceding sentence any legal or equitable
right, remedy or claim under or in respect of this Agreement, or any provisions herein contained,
this Agreement and all conditions and provisions hereof being intended to be and being for the sole
and exclusive benefit of such persons and for the benefit of no other person; except that the
representations, warranties, covenants, agreements and indemnities of the Company contained in this
Agreement shall also be for the benefit of the Placement Agent Indemnified Parties and the
indemnities of the Placement Agent shall also be for the benefit of the Company Indemnified
Parties. It is understood that the Placement Agent’s responsibilities to the Company are solely
contractual in nature and the Placement Agent does not owe the Company, or any other party, any
fiduciary duty as a result of this Agreement.

     9. Survival Of Indemnities, Representations, Warranties, Etc. The respective
indemnities, covenants, agreements, representations, warranties and other statements of the Company
and the Placement Agent, as set forth in this Agreement or made by them respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any investigation made by or
on behalf of the Placement Agent, the Company, or any person controlling any of them and shall
survive delivery of and payment for the Shares.

     10. Information Supplied by the Placement Agent. The name of the Placement Agent set
forth on the front and back cover and the information within the heading “Plan of Distribution” in
the Prospectus (to the extent such statements relate to the Placement Agent) (the “Placement
Agent Information”) constitute the only information furnished by such Placement Agent as to
itself to the Company for the purposes hereof.

     11. Miscellaneous.

          (a) THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH
HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.

8

 

          (b) EACH OF THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY (I) SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF THE FEDERAL AND STATE COURTS SITTING IN THE COUNTY OF LOS ANGELES, STATE OF
CALIFORNIA IN ANY SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY; AND (II) WAIVES (A) ITS RIGHT TO A TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE
PLACEMENT AGENT AND FOR ANY COUNTERCLAIM RELATED TO ANY OF THE FOREGOING AND (B) ANY OBJECTION
WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN
ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.

          (c) This Agreement may be signed in various counterparts which together shall constitute one
and the same instrument.

          (d) The headings in this Agreement are for convenience of reference only and shall not limit
or otherwise affect the meaning hereof.

          (e) If any term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full force and effect and
shall in no way be affected, impaired or invalidated, and the parties hereto shall use their
commercially reasonable efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the parties that they
would have executed the remaining terms, provisions, covenants and restrictions without including
any of such that may be hereafter declared invalid, illegal, void or unenforceable.

          (f) This Agreement may be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may be given, provided that the same are in writing and
signed by all of the signatories hereto. This Agreement constitutes the entire agreement of the
parties hereto with respect to the subject matter hereof. This Agreement supersedes in full all
previous oral or written agreements between the parties with respect to the subject matter hereof.
There are no oral or written collateral representations, agreements, or understandings except as
provided herein.

          (g) In the course of its services under this Agreement, the Placement Agent will have access
to Confidential Information (as defined below) concerning the Company. The Placement Agent agrees
that all Confidential Information will be treated by the Placement Agent as confidential in all
respects. The Placement Agent hereby agrees that it and its dealers, affiliates and representatives
shall: (i) use the Confidential Information solely for the purposes of its engagement hereunder;
and (ii) not disclose any Confidential Information to any other party except to those Placement
Agent representatives who need to know such information for the purposes of the Placement Agent’s
engagement hereunder and who have been advised of such

9

 

confidentiality restrictions. The term “Confidential Information” shall mean all
information, whether written or oral, which is or has been disclosed by the Company or their
respective affiliates, agents or representatives to the Placement Agent or any of its
representatives in connection with the transactions contemplated hereby, which is not in the public
domain, but shall not include: (i) information which is publicly disclosed other than by the
Placement Agent in violation of this Agreement; (ii) information which is obtained by the Placement
Agent from a third party that (x) has not violated, or obtained such information in violation of,
any obligation to the Company or its affiliates with respect to such information, and (y) does not
require the Placement Agent to refrain from disclosing such information; and (iii) information
which is required to be disclosed by the Placement Agent or its outside counsel under compulsion of
law (whether by oral question, interrogatory, subpoena, civil investigative demand or otherwise) or
by order of any court or governmental or regulatory body to whose supervisory authority the
Placement Agent is subject; provided that, in such circumstance, the Placement
Agent will give the Company prior written notice promptly following Placement Agent’s knowledge or
determination of such requirement of disclosure and cooperate with the Company to minimize the
scope of any such disclosure. The Placement Agent’s obligation under this section shall continue
after the date of expiration, termination or completion of this Agreement or the Placement Agent’s
engagement hereunder.

[Signature Page Follows]

10

 

	 	 	 	 	 
	 	Very truly yours,

SUPERCONDUCTOR TECHNOLOGIES INC.

 	 
	 	By:  	/S/ Jeffrey A. Quiram
 	 
	 	 	Name:  	Jeffrey A. Quiram 	 
	 	 	Title:  	President and CEO 	 
	 

	 	 	 	 	 
	ACCEPTED AND AGREED TO AS OF

THE DATE FIRST ABOVE WRITTEN:

MDB CAPITAL GROUP LLC

 	 	 
	By:  	/S/ Anthony DiGiandomenico
 	 	 
	 	Name:  	Anthony DiGiandomenico 	 	 
	 	Title:  	Managing Principal 	 	 

11

 

	 	 	 	 	 

EXHIBIT A

FORM OF COMMON STOCK PURCHASE AGREEMENT

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