Document:

Form of Compensation Warrant

 Exhibit 4.1 
 FORM OF WARRANT 
 THE REGISTERED HOLDER OF THIS PURCHASE WARRANT BY ITS ACCEPTANCE HEREOF, AGREES
THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE WARRANT EXCEPT AS HEREIN PROVIDED AND THE REGISTERED HOLDER OF THIS PURCHASE WARRANT AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE WARRANT FOR A PERIOD OF
ONE YEAR IMMEDIATELY FOLLOWING THE CLOSING DATE (DEFINED BELOW) OF THE PUBLIC OFFERING TO ANYONE OTHER THAN A BONA FIDE OFFICER OR PARTNER OF AEGIS CAPITAL CORP. IN ACCORDANCE WITH FINRA CONDUCT RULE 5110(G)(1). 

COMMON STOCK PURCHASE WARRANT 
 For the Purchase of Shares of Common Stock 
 of 

Superconductor Technologies Inc. 

1. Purchase Warrant. THIS CERTIFIES THAT, in consideration of funds duly paid by or on behalf of
                    (“Holder”), as registered owner of this Purchase Warrant, to Superconductor Technologies Inc., a Delaware
corporation (the “Company”), Holder is entitled, at any time or from time to time from December     , 2013, the date that is one year (the “Exercise Date”) immediately following the closing date
of sales of the public offering (the “Closing Date”) (provided that in no event will the Warrant be exercisable prior to 180 days after the effectiveness or commencement of sales of the public offering, the “Commencement
Date”), and at or before 5:00 p.m., Eastern time, on December     , 2016, the date that is four years from the Closing Date (the “Expiration Date”), but not thereafter, to subscribe for, purchase
and receive, in whole or in part, up to                 shares of Common Stock of the Company, par value $0.001 per share (the “Shares”), subject to
adjustment as provided in Section 6 hereof. If the Expiration Date is a day on which banking institutions are authorized by law to close, then this Purchase Warrant may be exercised on the next succeeding day which is not such a day in
accordance with the terms herein. This Purchase Warrant is initially exercisable at $0.40 per Share (125% of the price of the Shares sold in the public offering); provided, however, that upon the occurrence of any of the events
specified in Section 6 hereof, the rights granted by this Purchase Warrant, including the exercise price per Share and the number of Shares to be received upon such exercise, shall be adjusted as therein specified. The term “Exercise
Price” shall mean the initial exercise price or the adjusted exercise price, depending on the context. 
 2. Exercise.

 2.1 Exercise Form. In order to exercise this Purchase Warrant, the exercise form attached hereto must be duly
executed and completed and delivered to the Company, together with this Purchase Warrant and payment of the Exercise Price for the Shares being purchased payable in cash by wire transfer of immediately available funds to an account designated by the
Company or by check. If the subscription rights represented hereby shall not be exercised at or before 5:00 p.m., Eastern time, on the Expiration Date, this Purchase Warrant shall become and be void without further force or effect, and all rights
represented hereby shall cease and expire. 

  
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 2.2 Legend. Each certificate for the securities purchased under this Purchase
Warrant shall bear a legend as follows unless such securities have been registered under the Securities Act of 1933, as amended (the “Act”): 
 “The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Act”), or applicable state law. Neither the securities nor
any interest therein may be offered for sale, sold or otherwise transferred except pursuant to an effective registration statement under the Act, or pursuant to an exemption from registration under the Act and applicable state law which, in the
opinion of counsel to the Company, is available.” 
 3. Transfer. 

3.1 General Restrictions. The registered Holder of this Purchase Warrant agrees by his, her or its acceptance hereof, that
such Holder will not: (a) sell, transfer, assign, pledge or hypothecate this Purchase Warrant for a period of one year following the Closing Date to anyone other than: a bona fide officer or partner of Aegis, in each case in accordance with
FINRA Conduct Rule 5110(g)(1), or (b) cause this Purchase Warrant or the securities issuable hereunder to be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of
this Purchase Warrant or the securities hereunder, except as provided for in FINRA Rule 5110(g)(2). On and after that date that is one year after the Closing Date, transfers to others may be made subject to compliance with or exemptions from
applicable securities laws. In order to make any permitted assignment, the Holder must deliver to the Company the assignment form attached hereto duly executed and completed, together with the Purchase Warrant and payment of all transfer taxes, if
any, payable in connection therewith. The Company shall within five (5) Business Days transfer this Purchase Warrant on the books of the Company and shall execute and deliver a new Purchase Warrant or Purchase Warrants of like tenor to the
appropriate assignee(s) expressly evidencing the right to purchase the aggregate number of Shares purchasable hereunder or such portion of such number as shall be contemplated by any such assignment. 

3.2 Restrictions Imposed by the Act. The securities evidenced by this Purchase Warrant shall not be transferred unless and
until: (i) the Company has received the opinion of counsel for the Holder that the securities may be transferred pursuant to an exemption from registration under the Act and applicable state securities laws, the availability of which is
established to the reasonable satisfaction of the Company, or (ii) a registration statement or a post-effective amendment to the Registration Statement relating to the offer and sale of such securities has been filed by the Company and declared
effective by the U.S. Securities and Exchange Commission (the “Commission”) and compliance with applicable state securities law has been established. 
 4. Registration Rights. 
 4.1 “Piggy-Back”
Registration. 
 4.1.1. Grant of Right. The Company shall include the Shares (registered for re-sale on a
secondary basis) in the next registration statement it files for a primary underwritten offering for which Aegis Capital Corp. serves as an underwriter; provided that such registration right shall expire on the fifth anniversary of the Commencement
Date. 
 4.1.2. Terms. The Company shall bear all fees and expenses attendant to registering the Shares pursuant to
Section 4.2.1 hereof. 
 4.2 General Terms. 

4.2.1. Indemnification. The Company shall indemnify the Holder(s) of the Shares to be sold pursuant to any registration
statement hereunder and each person, if any, who controls such Holders within the meaning of Section 15 of the Act or Section 20 (a) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), against all loss,
claim, damage, expense or liability (including all reasonable 

  
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attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which any of them may become subject under the Act, the
Exchange Act or otherwise, arising from such registration statement but only to the same extent and with the same effect as the provisions pursuant to which the Company has agreed to indemnify the Placement Agent contained in Section 6(a) of
the Placement Agent Agreement between the Placement Agent and the Company, dated as of December 13, 2012. The Holder(s) of the Shares to be sold pursuant to such registration statement, and their successors and assigns, shall severally, and not
jointly, indemnify the Company, against all loss, claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to
which they may become subject under the Act, the Exchange Act or otherwise, arising from information furnished by or on behalf of such Holders, or their successors or assigns, in writing, for specific inclusion in such registration statement.

 4.2.2. Exercise of Purchase Warrants. Nothing contained in this Purchase Warrant shall be construed as requiring
the Holder(s) to exercise their Purchase Warrants prior to or after the initial filing of any registration statement or the effectiveness thereof. 
 5. New Purchase Warrants to be Issued. 
 5.1 Partial Exercise
or Transfer. Subject to the restrictions in Section 3 hereof, this Purchase Warrant may be exercised or assigned in whole or in part. In the event of the exercise or assignment hereof in part only, upon surrender of this Purchase Warrant
for cancellation, together with the duly executed exercise or assignment form and funds sufficient to pay any Exercise Price and/or transfer tax if exercised pursuant to Section 2.1 hereto, the Company shall cause to be delivered to the Holder
without charge a new Purchase Warrant of like tenor to this Purchase Warrant in the name of the Holder evidencing the right of the Holder to purchase the number of Shares purchasable hereunder as to which this Purchase Warrant has not been exercised
or assigned. 
 5.2 Lost Certificate. Upon receipt by the Company of evidence satisfactory to it of the loss, theft,
destruction or mutilation of this Purchase Warrant and of reasonably satisfactory indemnification or the posting of a bond, the Company shall execute and deliver a new Purchase Warrant of like tenor and date. Any such new Purchase Warrant executed
and delivered as a result of such loss, theft, mutilation or destruction shall constitute a substitute contractual obligation on the part of the Company. 
 6. Adjustments. 
 6.1 Adjustments to Exercise Price and Number
of Securities. The Exercise Price and the number of Shares underlying the Purchase Warrant shall be subject to adjustment from time to time as hereinafter set forth: 
 6.1.1 Share Dividends; Split Ups. If, after the date hereof, and subject to the provisions of Section 6.3 below, the number of outstanding Shares is increased by a stock dividend payable
in Shares or by a split up of Shares or other similar event, then, on the effective day thereof, the number of Shares purchasable hereunder shall be increased in proportion to such increase in outstanding shares, and the Exercise Price shall be
proportionately decreased. 
 6.1.2 Aggregation of Shares. If, after the date hereof, and subject to the provisions
of Section 6.3 below, the number of outstanding Shares is decreased by a consolidation, combination or reclassification of Shares or other similar event, then, on the effective date thereof, the number of Shares purchasable hereunder shall be
decreased in proportion to such decrease in outstanding shares and the Exercise Price shall be proportionately increased. 

  
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 6.1.3 Replacement of Securities upon Reorganization, etc. In case of any
reclassification or reorganization of the outstanding Shares other than a change covered by Section 6.1.1 or 6.1.2 hereof or that solely affects the par value of such Shares, or in the case of any share reconstruction or amalgamation or
consolidation of the Company with or into another corporation (other than a consolidation or share reconstruction or amalgamation in which the Company is the continuing corporation and that does not result in any reclassification or reorganization
of the outstanding Shares), or in the case of any sale or conveyance to another corporation or entity of the property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Holder of this
Purchase Warrant shall have the right thereafter (until the expiration of the right of exercise of this Purchase Warrant) to receive upon the exercise hereof, for the same aggregate Exercise Price payable hereunder immediately prior to such event,
the kind and amount of shares of stock or other securities or property (including cash) (“Consideration”) receivable upon such reclassification, reorganization, share reconstruction or amalgamation, or consolidation, or upon a dissolution
following any such sale or transfer, by a Holder of the number of Shares of the Company obtainable upon exercise of this Purchase Warrant immediately prior to such event; and if any reclassification also results in a change in Shares covered by
Section 6.1.1 or 6.1.2, then such adjustment shall be made pursuant to Sections 6.1.1, 5.1.2 and this Section 6.1.3. The provisions of this Section 6.1.3 shall similarly apply to successive reclassifications, reorganizations, share
reconstructions or amalgamations, or consolidations, sales or other transfers. Notwithstanding the foregoing, in any case covered by this Section 6.1.3 in which the Consideration is solely cash and/or securities registered under the Act on Form
S-4 or other appropriate SEC form and which securities are listed for trading on any national securities exchange, then the unexercised portion of this Purchase Warrant will (unless it has already expired) be deemed automatically exercised in full
(and this Purchase Warrant shall be terminated) in connection with the transaction giving rise to the payment of the Consideration, the resulting Shares shall receive (and be converted into) the applicable per Share Consideration, and the applicable
Exercise Price shall be netted against such Consideration in the manner provided for in the applicable transaction agreements. 

6.1.4 Changes in Form of Purchase Warrant. This form of Purchase Warrant need not be changed because of any change pursuant
to this Section 6.1, and Purchase Warrants issued after such change may state the same Exercise Price and the same number of Shares as are stated in the Purchase Warrants initially issued pursuant to this Agreement. The acceptance by any Holder
of the issuance of new Purchase Warrants reflecting a required or permissive change shall not be deemed to waive any rights to an adjustment occurring after the Commencement Date or the computation thereof. 

6.2 Substitute Purchase Warrant. Except when the last sentence of Section 6.1.3 applies, in case of any consolidation of
the Company with, or share reconstruction or amalgamation of the Company with or into, another corporation (other than a consolidation or share reconstruction or amalgamation which does not result in any reclassification or change of the outstanding
Shares), the corporation formed by such consolidation or share reconstruction or amalgamation shall execute and deliver to the Holder a supplemental Purchase Warrant providing that the holder of each Purchase Warrant then outstanding or to be
outstanding shall have the right thereafter (until the stated expiration of such Purchase Warrant) to receive, upon exercise of such Purchase Warrant, the kind and amount of shares of stock and other securities and property receivable upon such
consolidation or share reconstruction or amalgamation, by a holder of the number of Shares of the Company for which such Purchase Warrant might have been exercised immediately prior to such consolidation, share reconstruction or amalgamation, sale
or transfer. Such supplemental Purchase Warrant shall provide for adjustments which shall be identical to the adjustments provided for in this Section 6. The above provision of this Section 6 shall similarly apply to successive
consolidations or share reconstructions or amalgamations. 
 6.3 Elimination of Fractional Interests. The Company
shall not be required to issue certificates representing fractions of Shares upon the exercise of the Purchase Warrant, nor shall it be 

  
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required to issue scrip or pay cash in lieu of any fractional interests, it being the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up or down,
as the case may be, to the nearest whole number of Shares or other securities, properties or rights. 
 7. Reservation and Listing.
The Company shall at all times reserve and keep available out of its authorized Shares, solely for the purpose of issuance upon exercise of the Purchase Warrants, such number of Shares or other securities, properties or rights as shall be issuable
upon the exercise thereof. The Company covenants and agrees that, upon exercise of the Purchase Warrants and payment of the Exercise Price therefor, in accordance with the terms hereby, all Shares and other securities issuable upon such exercise
shall be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any shareholder. As long as the Purchase Warrants shall be outstanding, the Company shall use its commercially reasonable efforts to cause all
Shares issuable upon exercise of the Purchase Warrants to be listed (subject to official notice of issuance) on all national securities exchanges (or, if applicable, on the OTC Bulletin Board or any successor trading market) on which the Shares
issued to the public in the Offering may then be listed and/or quoted. 
 8. Certain Notice Requirements. 

8.1 Holder’s Right to Receive Notice. Nothing herein shall be construed as conferring upon the Holders the right to vote
or consent or to receive notice as a shareholder for the election of directors or any other matter, or as having any rights whatsoever as a shareholder of the Company. If, however, at any time prior to the expiration of the Purchase Warrants and
their exercise, any of the events described in Section 8.2 shall occur, then, in one or more of said events, the Company shall give written notice of such event at least fifteen days prior to the date fixed as a record date or the date of
closing the transfer books (the “Notice Date”) for the determination of the shareholders entitled to such dividend, distribution, conversion or exchange of securities or subscription rights, or entitled to vote on such proposed
dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date of the closing of the transfer books, as the case may be. Notwithstanding the foregoing, the Company shall deliver to each Holder a copy of each
notice given to the other shareholders of the Company at the same time and in the same manner that such notice is given to the shareholders. 
 8.2 Events Requiring Notice. The Company shall be required to give the notice described in this Section 8 upon one or more of the following events: (i) if the Company shall take a
record of the holders of its Shares for the purpose of entitling them to receive a dividend or distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise than out of retained earnings, as indicated by the
accounting treatment of such dividend or distribution on the books of the Company, (ii) the Company shall offer to all the holders of its Shares any additional shares of capital stock of the Company or securities convertible into or
exchangeable for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor, or (iii) a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or share
reconstruction or amalgamation) or a sale of all or substantially all of its property, assets and business shall be proposed. 

8.3 Notice of Change in Exercise Price. The Company shall, promptly after an event requiring a change in the Exercise Price
pursuant to Section 6 hereof, send notice to the Holders of such event and change (“Price Notice”). The Price Notice shall describe the event causing the change and the method of calculating same and shall be certified as being
true and accurate by the Company’s Chief Financial Officer. 
 8.4 Transmittal of Notices. All notices,
requests, consents and other communications under this Purchase Warrant shall be in writing and shall be deemed to have been duly made (1) when hand delivered, (2) when mailed by express mail or private courier service or (3) when the
event requiring 

  
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notice is disclosed in all material respects and filed in a current report on Form 8-K or in a definitive proxy statement on Schedule 14A prior to the Notice Date: (i) if to the registered
Holder of the Purchase Warrant, to the address of such Holder as shown on the books of the Company, or (ii) if to the Company, to following address or to such other address as the Company may designate by notice to the Holders: 

If to the Holder: 
 Aegis Capital Corp. 
 810 Seventh Avenue, 11th Floor 

New York, New York 10019 
 Attn: Mr. David Bocchi, Managing Director of Investment Banking 
 Fax No.:
(212) 813-1047 
 With a copy (which shall not constitute notice) to: 

Blank Rome LLP 

405 Lexington Avenue 
 New York, NY 10174 
 Attn: Brad L. Shiffman, Esq. 

Fax No.: (917) 332-3725 
 If to the Company: 
 Superconductor Technologies Inc. 

9101 Wall Street 

Austin, Texas 78754 Attention: Jeffrey A. Quiram, CEO 
 Fax No.: (805) 967-0342 
 With a copy (which shall not constitute notice) to:

 Mannatt, Phelps & Phillips, LLP 
 11355 West Olympic Boulevard 
 Los Angeles, California, 90064 

Attention: Ben Orlanski, Esq. and Matthew O’Loughlin, Esq. 

Fax No.: (310) 312-4224 

9. Miscellaneous. 

9.1 Amendments. The Company and Aegis may from time to time supplement or amend this Purchase Warrant without the approval of
any of the Holders in order to cure any ambiguity, to correct or supplement any provision contained herein that may be defective or inconsistent with any other provisions herein, or to make any other provisions in regard to matters or questions
arising hereunder that the Company and Aegis may deem necessary or desirable and that the Company and Aegis deem shall not adversely affect the interest of the Holders. All other modifications or amendments shall require the written consent of and
be signed by the party against whom enforcement of the modification or amendment is sought. 
 9.2 Headings. The
headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Purchase Warrant. 

  
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 9.3. Entire Agreement. This Purchase Warrant (together with the other agreements
and documents being delivered pursuant to or in connection with this Purchase Warrant) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings of the
parties, oral and written, with respect to the subject matter hereof. 
 9.4 Binding Effect. This Purchase Warrant
shall inure solely to the benefit of and shall be binding upon, the Holder and the Company and their permitted assignees, respective successors, legal representative and assigns, and no other person shall have or be construed to have any legal or
equitable right, remedy or claim under or in respect of or by virtue of this Purchase Warrant or any provisions herein contained. 
 9.5 Governing Law; Submission to Jurisdiction. This Purchase Warrant shall be governed by and construed and enforced in accordance with the laws of the State of Delaware, without giving effect
to conflict of laws principles thereof. The Company hereby agrees that any action, proceeding or claim against it arising out of, or relating in any way to this Purchase Warrant shall be brought and enforced in the New York Supreme Court, County of
New York, or in the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and
that such courts represent an inconvenient forum. Any process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the
address set forth in Section 8 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim. The Company and the Holder agree that the prevailing party(ies) in any such
action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor. 

9.6 Waiver, etc. The failure of the Company or the Holder to at any time enforce any of the provisions of this Purchase
Warrant shall not be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this Purchase Warrant or any provision hereof or the right of the Company or any Holder to thereafter enforce each and every
provision of this Purchase Warrant. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Purchase Warrant shall be effective unless set forth in a written instrument executed by the party or parties against
whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment. 

9.7 Execution in Counterparts. This Purchase Warrant may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement, and shall become effective when one or more counterparts has been signed by each
of the parties hereto and delivered to each of the other parties hereto. Such counterparts may be delivered by facsimile transmission or other electronic transmission. 
 9.8 Exchange Agreement. As a condition of the Holder’s receipt and acceptance of this Purchase Warrant, Holder agrees that, at any time prior to the complete exercise of this Purchase
Warrant by Holder, if the Company and Aegis enter into an agreement (“Exchange Agreement”) pursuant to which they agree that all outstanding Purchase Warrants will be exchanged for securities or cash or a combination of both, then Holder
shall agree to such exchange and become a party to the Exchange Agreement. 
 [Remainder of page intentionally left blank]

  
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 IN WITNESS WHEREOF, the Company has caused this Purchase Warrant to be signed by its duly
authorized officer as of the      day of December, 2012. 
  

			
	Superconductor Technologies Inc.
		
	By:	 	  

	Name:	 	William J. Buchanan
	Title:	 	Chief Financial Officer

 Agreed to and accepted by: 
  

			
	 Aegis Capital Corp.

		
	 By:
	 	  

	 Name:
	 	
	 Title:
	 	

  
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 Form to be used to exercise Purchase Warrant: 

Date:             ,
20             
 The undersigned hereby elects
irrevocably to exercise the Purchase Warrant for                 Shares of Superconductor Technologies Inc., a Delaware corporation (the “Company”) and hereby
makes payment of $         (at the rate of $         per Share) in payment of the Exercise Price pursuant thereto. Please issue the Shares as to which this Purchase
Warrant is exercised in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the number of Shares for which this Purchase Warrant has not been exercised. 

Please issue the Shares as to which this Purchase Warrant is exercised in accordance with the instructions given below
and, if applicable, a new Purchase Warrant representing the number of Shares for which this Purchase Warrant has not been converted. 
 Signature 
 Signature Guaranteed 

INSTRUCTIONS FOR REGISTRATION OF SECURITIES 

Name: 
 (Print in Block Letters) 

Address: 
 NOTICE: The
signature to this form must correspond with the name as written upon the face of the Purchase Warrant without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or
by a firm having membership on a registered national securities exchange. 

 [Form to be used to assign Purchase Warrant:] 
 ASSIGNMENT 
 (To be executed by the registered Holder to effect a transfer of the within Purchase
Warrant): 
 FOR VALUE RECEIVED,
                     does hereby sell, assign and transfer unto the right to purchase shares of Superconductor Technologies Inc., a Delaware
corporation (the “Company”) evidenced by the Purchase Warrant and does hereby authorize the Company to transfer such right on the books of the Company. 
 Dated:             , 20     
 Signature 
 Signature Guaranteed 

NOTICE: The signature to this form must correspond with the name as written upon the face of the within Purchase Warrant without
alteration or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national securities exchange.Amended Plea Agreement, Entered into on December 14, 2012

 Exhibit 10.1 

 

			
	

	 	 U.S. Department of Justice

 
 Carmen M. Ortiz

United States Attorney
 District of Massachusetts

  

			
	Main Reception: (617) 748-3100	  	John Joseph Moakley United States Courthouse
		  	1 Courthouse Way
		  	Suite 9200
		  	Boston, Massachusetts 02210

 June 5, 2012 
 Brien T. O’Connor 
 Ropes & Gray, LLP 

800 Boylston Street 
 Boston, MA 02199

  

	 	Re:	United States v. Orthofix, Inc., 

 Dear
Mr. O’Connor: 
 This letter sets forth the Agreement between the United States Attorney for the District of
Massachusetts (“the U.S. Attorney”) and the Department of Justice (collectively, the United States Department of Justice and the U.S. Attorney will be referred to as the “United States”) and your client, Orthofix, Inc.
(“Defendant” or “Orthofix”), in the above-referenced case. The Agreement is as follows: 
 1. Change of
Plea 
 At the earliest practicable date, Defendant shall waive indictment and plead guilty to the Information attached to
this Agreement as Exhibit A charging it with: Obstruction of Federal Audit in violation of 18 U.S.C. §1516. Defendant expressly and unequivocally admits that it committed the crime charged in the Information, did so knowingly and intentionally,
with an intent to deceive or defraud the United States, and is in fact guilty of that offense. Defendant also agrees to waive venue and any legal or procedural defects in the Information. 

 2. Penalties  

With respect to the count of conviction, Defendant faces the following maximum penalties: 

 

	 	a.	A fine of $500,000, or twice the gross gain/loss, whichever is greater. 18 U.S.C. §§3571(c) and (d). The gross gain resulting from the offense is $6,471,448.
Thus the maximum fine is $12,942,896. 

  

	 	b.	A term of probation of not more than five (5) years. 18 U.S.C. §3561(c)(1); 

 

	 	c.	Restitution to any victims of the offense. See 18 U.S.C. §3563(b)(2); and 

 

	 	d.	With respect to the count of conviction, Defendant shall pay a mandatory special assessment of $400. 18 U.S.C. §3013. 

3. Fed. R. Crim. P. 11(c)(1)(B) Plea 
 This plea agreement is made pursuant to Fed. R. Crim. P. 11(c)(1)(B), and Defendant’s plea will be tendered pursuant to that provision. 

4. Sentencing Guidelines 
 The parties agree jointly to take the following positions at sentencing under the United States Sentencing Guidelines: 
  

	 	a.	The parties agree that the Guideline Manual in effect as of November 1, 2010 should be used in determining Defendant’s sentence. See U.S.S.G.
§§1B1.11(a). 

  

	 	b.	The parties agree that the base fine is $6,471,448, in that such amount was the pecuniary gain to Defendant from the offense. See U.S.S.G.
§§8C2.4(a)(2). 

  

	 	c.	Pursuant to U.S.S.G. §8C2.5, the culpability score is 6 as determined as follows: 

 

	 	(1)	Base culpability score is five (5) pursuant to U.S.S.G. §8C2.5(a); 

 

	 	(2)	Add three (3) points pursuant to U.S.S.G. §8C2.5(b)(3)(A), in that the organization had 200 or more employees and an individual within high-level personnel of
the organization participated in, condoned, or was willfully ignorant of the offense; 

  

	 	(3)	Deduct two (2) points pursuant to U.S.S.G. §8C2.5(g)(2). 

  

	 	d.	Pursuant to U.S.S.G. §8C2.6, the appropriate multiplier range associated with a culpability score of 6 is 1.2 to 2.4. 

 

	 	e.	Thus, the Guideline Fine Range is $7,765,737 to $12,942,896. See 18 U.S.C. §§3571(c) and (d) (maximum fine is twice the gross gain or gross loss).

  

	 	f.	The parties agree that: (1) disgorgement pursuant to U.S.S.G. §8C2.9 is not necessary; (2) there is no basis for a downward departure or deviation under
the U.S.S.G.; and (3) a fine within the guideline range will result in a reasonable sentence taking into consideration all of the factors set forth in 18 U.S.C. §§3553(a), 3572. 

  
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 The U.S. Attorney may, at her sole option, be released from her commitments under this
Agreement, including, but not limited to, her agreement that Paragraph 5 constitutes the appropriate disposition of this case, if at any time between Defendant’s execution of this Agreement and sentencing, Defendant: 

 

	 	(a)	Fails to admit a complete factual basis for the plea; 

  

	 	(b)	Fails to truthfully admit its conduct in the offenses of conviction; 

  

	 	(c)	Falsely denies, or frivolously contests, relevant conduct for which Defendant is accountable under U.S.S.G. §1B1.3; 

 

	 	(d)	Fails to provide truthful information about its financial status; 

  

	 	(e)	Gives false or misleading testimony in any proceeding relating to the criminal conduct charged in this case and any relevant conduct for which Defendant is accountable
under U.S.S.G. §1B1.3; 

  

	 	(f)	Engages in acts which form a basis for finding that Defendant has obstructed or impeded the administration of justice under U.S.S.G. §3C1.1;

  

	 	(g)	Commits a crime; or 

  

	 	(h)	Attempts to withdraw its guilty plea. 

 5. Agreed Disposition 
 Pursuant to Fed. R. Crim. P. 11(c)(1)(B), the U.S.
Attorney and Defendant agree that the following is a reasonable and appropriate disposition of this case: 
  

	 	(a)	a criminal fine in the amount of $7,765,737, to be paid within two business days of the date of sentencing; 

 

	 	(b)	a mandatory special assessment in the amount of $400; 

  

	 	(c)	 in light of the pending civil actions, including United States ex rel. Bierman v. Orthofix International, N.V., et al, C.A.
No. 05-10557-EFH (District of Massachusetts), and the Civil Settlement Agreement between Orthofix and others and the United States relating to the civil action, which is being signed contemporaneously with this plea agreement, and attached
hereto as Exhibit B, which requires payment of $34,234,263 plus interest, the parties agree that the complication and prolongation of the sentencing process that would result

  
 3 

	 	
from an attempt to fashion a restitution order outweighs the need to provide restitution to the non-federal victims, if any, in this case. See, 18 U.S.C. §3663(a)(1)(B)(ii). Therefore
the United States agrees that it will not seek a separate restitution order as to Orthofix as part of the resolution of the Information and the Parties agree that the appropriate resolution of this case does not include a restitution order.

  

	 	(d)	The United States agrees that it will not seek a term of probation in light of the Corporate Integrity Agreement entered into between Orthofix and the Office of
Inspector General of the Department of Health and Human Services, attached as Exhibit C. 

 6. No Further
Prosecution of Orthofix 
 Pursuant to Fed. R. Crim. P. 11(c)(1)(A), the United States agrees that, other than the charge in
the attached Information, it shall not further prosecute Orthofix for any additional federal criminal charges with respect to the conduct: (a) covered by the Information; or (b) was the subject of the investigation of Orthofix by the
federal grand jury in Massachusetts; or (c) currently known to the United States regarding illegal sales, promotion and marketing practices in connection with Orthofix bone growth stimulators (Spinal-Stim, Physio-Stim and Cervical-Stim) during
the period 1999 through 2010. 
 This declination is expressly contingent on: 

(1) the guilty plea of Orthofix being accepted by the Court and not withdrawn; 

(2) Orthofix’s performance of all of its obligations, including without limitation its cooperation obligations, as set forth in this
Agreement. If Orthofix’s guilty plea is not accepted by the Court or is withdrawn for any reason, or if Orthofix should fail to perform an obligation under this Agreement, this declination of prosecution shall be null and void. 

The United States reserves the right to prosecute any individual, including but not limited to present and former officers, directors,
employees, and agents of Orthofix, in connection with the conduct encompassed by this plea agreement, within the scope of the grand jury investigation, or known to the U.S. Attorney. 

7. Payment of Mandatory Special Assessment 
 Defendant agrees to pay the mandatory special assessment to the Clerk of the Court on or before the date of sentencing. 

  
 4 

 8. Cooperation 

Orthofix acknowledges that its prior, ongoing, and future cooperation is important and a material factor underlying the decision by the
United States to enter into this Agreement, and therefore, Orthofix agrees to continue to cooperate fully and actively with the United States, and any other agency of the government designated by the United States regarding any matter about which
Orthofix has knowledge or information in any ongoing investigation, trial, or other proceeding arising out of any ongoing federal investigation of its current and former officers, agents, and employees on the subject matters identified in paragraphs
6(a)-(c) above. Orthofix’s above cooperation shall include, but not be limited to the following: 
 (a) Completely and
truthfully disclosing all non-privileged information in its possession about which the United States may inquire, including but not limited to all information about activities of Orthofix and present and former officers, directors, employees and
agents of Orthofix; 
 (b) Assembling, organizing and providing all non-privileged documents, records, and other evidence in
Orthofix’s possession, custody, or control as may be requested by the United States; 
 (c) Using its reasonable best
efforts to make available its present and former officers, directors and employees to provide information and/or testimony as requested by the United States, including testimony before a grand jury, a trial court, other court proceeding, as well as
interviews with law enforcement authorities. Cooperation under this paragraph shall include identification of witnesses who, to Orthofix’s knowledge, obtained in the ordinary course of business, auditing or monitoring, have material information
concerning any criminal prosecution and/or trial, civil trial, or other legal proceedings brought by the United States against any present or former officer, director, or employee of Orthofix; 

(d) Providing testimony or information necessary to identify or establish the original location, authenticity, or other basis for
admission into evidence of documents or physical evidence in any criminal or other proceeding as requested by the United States; and 
 (e) Providing active assistance, including assistance by current counsel (including undersigned counsel) and/or successor counsel, internal or external, in connection with any investigation, criminal
prosecution, and/or trial, civil trial, or other legal proceeding brought by the United States against any present or former officer, director, or employee of Orthofix. 
 However, notwithstanding any provision of this agreement, Orthofix is not required to: (1) request of its current or former officers, agents, or employees that they forego seeking the advice of an
attorney nor that they act contrary to that advice; (2) take any action against its officers, agents, or employees for following their attorney’s advice; and (3) waive any claim of privilege or work product protection. 

9. Probation Department Not Bound By Agreement 
 The sentencing disposition agreed upon by the parties and their respective calculations under the Sentencing Guidelines are not binding upon the United States Probation Office. 

  
 5 

 10. Civil and Administrative Liability 

By entering into this Agreement, the U.S. Attorney does not compromise any civil or administrative liability, including but not limited to
any False Claims Act or tax liability, which Orthofix may have incurred or may incur as a result of Orthofix’s conduct and its plea of guilty to the charges specified in Paragraph 1 of this Agreement. 

Orthofix’s civil liability to the United States in connection with certain of the matters under investigation by the United States
is resolved in the Civil Settlement Agreement, attached as Exhibit B, according to the terms set forth in that Agreement. 
 11.
Waiver of Defenses 
 If Orthofix’s guilty plea is not accepted by the Court for whatever reason, or is later
withdrawn for whatever reason, or if Orthofix breaches this Agreement, Orthofix hereby waives, and agrees it will not interpose, if charges are filed within six months of the date on which such guilty plea is rejected or withdrawn or a breach is
declared by the USAO, any defense to any charges brought against it which it might otherwise have under the Constitution for pre-indictment delay, any statute of limitations, or the Speedy Trial Act, except any such defense that
Orthofix may already have for conduct occurring before November 13, 2004. 
 12. Breach of Agreement 

If the U.S. Attorney determines that Orthofix has failed to comply with any material provision of this Agreement, the United States may,
at its sole option, be released from its commitments under this Agreement in its entirety by notifying Orthofix, through counsel or otherwise, in writing. The United States may also pursue all remedies available under the law, even if it elects not
to be released from its commitments under this Agreement. Orthofix recognizes that no such breach by Orthofix of an obligation under this Agreement shall be grounds for withdrawal of its guilty plea. Orthofix understands that should it breach any
material provision of this Agreement, the U.S. Attorney will have the right to use against Orthofix before any grand jury, at any trial or hearing, or for sentencing purposes, any statements which may be made by Orthofix, and any information,
materials, documents or objects which may be provided by it to the government subsequent to this Agreement, without any limitation. 
 Orthofix understands and agrees that this Rule 11(c)(1)(B) plea agreement and its agreed upon criminal disposition: 
  

	 	a.	are wholly dependent upon Orthofix’s timely compliance with the provisions of the attached Civil Settlement Agreement, including the requirement in the agreement
that Orthofix pay to the United States the amount of $34,234,263, plus interest continuing until and including the day before complete payment is made in accord with the terms of the Civil Settlement Agreement; and that 

 

	 	b.	failure by Orthofix to comply fully with the terms of this Agreement or the attached Civil Settlement Agreement will constitute a breach of this Agreement; provided,
however, that a breach of the Corporate Integrity Agreement (CIA) attached hereto as Exhibit C does not constitute a breach of this Plea Agreement, and any disputes arising under the CIA shall be resolved exclusively through the dispute resolution
provisions of the CIA. 

  
 6 

 In the event Orthofix at any time hereafter breaches any material provision of this
Agreement, Orthofix understands that: (1) the United States will as of the date of that breach be relieved of any obligations it may have in this Agreement and the attached Civil Settlement Agreement, including but not limited to the promise
not to further prosecute Orthofix as set forth in this Agreement; and (2) Orthofix will not be relieved of its obligation to make the payments set forth in this Agreement and the attached Civil Settlement Agreement, nor will it be entitled to
return of any monies already paid. Moreover, in the event of a breach, Orthofix hereby waives, and agrees it will not interpose, any defense to any charges brought against it which it might otherwise have under the Constitution for pre-indictment
delay, any statute of limitations, or the Speedy Trial Act, except any such defense that Orthofix may already have for conduct occurring before November 13, 2004. 
 13. Corporate Authorization 
 Orthofix’s acknowledgment of this
Agreement and execution of this Agreement on behalf of the corporation is attached as Exhibit D. Orthofix shall provide to the U.S. Attorney and the Court a certified copy of a resolution of Orthofix, Inc.’s governing authority, affirming that
it has authority to enter into the Plea Agreement and has (1) reviewed the Information in this case and the proposed Plea Agreement; (2) consulted with legal counsel in connection with the matter; (3) voted to enter into the proposed
Plea Agreement; (4) voted to authorize Orthofix to plead guilty to the charge specified in the Information; and (5) voted to authorize the corporate officer identified below to execute the Plea Agreement and all other documents necessary
to carry out the provisions of the Plea Agreement. A copy of the resolution is attached as Exhibit E. Orthofix agrees that either a duly authorized corporate officer or a duly authorized attorney for Orthofix, at the discretion of the Court, shall
appear on behalf of Orthofix and enter the guilty plea and will also appear for the imposition of sentence. 
 14. Who Is
Bound By Agreement 
 This Agreement is binding upon Orthofix and the Office of the United States Attorney for the District
of Massachusetts, the United States Attorney’s Offices for each of the other 93 judicial districts of the United States, the Consumer Protection Branch of the Department of Justice, and the Criminal Division of the United States Department of
Justice on the matters set forth above in Paragraph 6. A copy of the letter to United States Attorney Carmen M. Ortiz from Lanny A. Breuer, Assistant Attorney General, Criminal Division, Department of Justice, authorizing this Agreement is attached
as Exhibit F. Orthofix understands that this Agreement does not bind any state or local prosecutive authorities, the Tax Division of the U.S. Department of Justice, or the Internal Revenue Service of the U.S. Department of the Treasury. 

  
 7 

 15. Complete Agreement 

This letter contains the complete and only agreement between the parties relating to the disposition of this case. No promises,
representations or agreements have been made other than those set forth in this Agreement and its attachments. This Agreement supersedes prior understandings, if any, of the parties, whether written or oral. This Agreement can be modified or
supplemented only in a written memorandum signed by the parties or on the record in court. 
 If this letter accurately reflects
the agreement between the United States and Orthofix, please have the authorized representative of Orthofix, Inc. sign the Acknowledgment of Agreement below. Please also sign as Witness and return the original of this letter to Assistant U.S.
Attorney David Schumacher of the United States Attorney’s Office for the District of Massachusetts. 
  

			
		 	Very truly yours,
		
		 	 /s/ Carmen M. Ortiz

		 	CARMEN M. ORTIZ
		 	UNITED STATES ATTORNEY
		 	DISTRICT OF MASSACHUSETTS
		
	By:	 	 /s/ David S. Schumacher 12/14/12

		 	DAVID S. SCHUMACHER
		 	Assistant U.S. Attorney
		
	By:	 	 /s/ Jeremy M. Sternberg

		 	JEREMY M. STERNBERG
		 	Assistant U.S. Attorney

  
 8 

 ACKNOWLEDGMENT OF PLEA AGREEMENT 

The Board of Directors of Orthofix Inc. (the “Board”) has authorized me to execute this Plea Agreement on behalf of Orthofix
Inc. The Board has read this Plea Agreement and the attached criminal Information, in their entirety and has discussed them fully in consultation with Orthofix Inc.’s attorneys. The Board acknowledges that these documents fully set forth
Orthofix Inc.’s agreement with the United States. The Board further states that no additional promises or representations have been made to Orthofix Inc. by any officials of the United States in connection with the disposition of this matter,
other than those set forth in the Plea Agreement. 
  

							
	Dated: December 14, 2012	 		 		 	 /s/ Jeffrey M. Schumm

		 		 		 	Jeffrey M. Schumm
		 		 		 	Senior Vice President, General Counsel, and
		 		 		 	Corporate Secretary
		 		 		 	Orthofix, Inc.
				
	Dated: December 14, 2012	 		 		 	 /s/ Brien T. O’Connor

		 		 		 	Brien T. O’Connor
		 		 		 	Ropes & Gray, LLP
		 		 		 	Counsel for Orthofix, Inc.

  
 9

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