Document:

Supply Agreement for Dorzolamide Hydrochloride with Ragactives S.L.U.

 EXHIBIT 10.9 
 Confidential Treatment has been requested for portions of this agreement. Those portions have been marked [Redacted]. 
 SUPPLY
AGREEMENT for DORZOLAMIDE HYDROCHLORIDE 
 This AGREEMENT, effective as of 18th July 2008, is made by and between: 
 HI-TECH PHARMACAL CO. INC, a company organized and existing under the laws of Delaware, USA, having its legal seat at 369 Bayview Avenue, Amityville, New York 11701, USA (hereinafter referred to as “CLIENT”), 
 and 
 RAGACTIVES S.L.U., a company organized and existing under the laws of
Spain, having its legal seat at Parque Tecnológico, Parcelas 2 y 3, 47151.Boecillo (Valladolid), Spain (hereinafter referred to as “RAGACTIVES”). 
 RECITALS 
 WHEREAS, RAGACTIVES manufactures Dorzolamide Hydrochloride (hereinafter referred to as “Product”). 
 WHEREAS, RAGACTIVES is the holder of the granted Patent US 2003/0220509. 
 WHEREAS, RAGACTIVES submitted on May 31st 2005
a Drug Master File (“DMF”) Number 18385 with US Food and Drug Administration (“FDA”). 
 WHEREAS, RAGACTIVES can supply the Product to
the CLIENT. The Product may be invoiced to the CLIENT by RAGACTIVES or any other company designated by RAGACTIVES. 
 WHEREAS, CLIENT has already established
facilities for manufacturing finished dosage forms, distribution and marketing of pharmaceutical products in the Territory, as hereinafter defined. 
 NOW,
THEREFORE, in consideration of the premises and the covenants contained herein, the parties hereto have agreed as follows: 
 ARTICLE
I-DEFINITIONS 
 Whenever used in this Agreement, the following terms shall have the following meanings: 
 1.1. “Product” as used in this Agreement shall mean the active ingredient Dorzolamide Hydrochloride. 
  

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 1.2. “Scientific and Technical Information” shall mean all scientific and technical data possessed by
RAGACTIVES relating to the Product. 
 1.3. “Territory” shall mean Canada and the United States of America. 
 ARTICLE II-DISCLOSURE OF SCIENTIFIC AND TECHNICAL INFORMATION / CONFIDENTIALITY 
 2.1. RAGACTIVES will deliver to the CLIENT free of charge all the technical documentation in the possession of RAGACTIVES which CLIENT needs for registration purposes. 
 2.2. During the term of this Agreement and at any time subsequent thereto, CLIENT shall keep confidential and secret all Scientific and Technical Information which is
disclosed to it by RAGACTIVES under this Agreement. 
 2.3. CLIENT shall not reveal or disclose to third parties any of said Scientific and Technical
Information and other information it may develop without the prior written consent of RAGACTIVES. Scientific and Technical information shall include, but not be limited to, all technical information and other pertinent information, except any
portion thereof which: 
 a ) is in the public domain at the time of disclosure; 
 b ) is published or otherwise becomes part of the public domain through no fault of the parties; 
 c ) is known by CLIENT before receipt for under this Agreement, as shown by prior written records; or 
 d ) becomes available from a third party who has the right to disclose it. 
 Nothing contained in the above paragraphs shall be construed to restrict CLIENT from disclosing the Scientific and the Technical Information as may be required for purposes of compliance with governmental,
administrative or regulatory laws, regulations, orders or requests. In such event CLIENT shall take such reasonable measures as may be available to ensure that no unauthorized use or disclosure is made by others to whom access to confidential
information is granted. 
 ARTICLE III-SUPPLY OF THE PRODUCT 
 3.1. During the term of this Agreement, CLIENT shall purchase the Product in bulk from RAGACTIVES, and RAGACTIVES shall sell such requirements of the Product to CLIENT upon and subject to the terms of this Art 3.
Nothing herein shall restrict CLIENT from purchasing the Product from another source of supply. However, during the term of this Agreement, CLIENT will consider RAGACTIVES as its preferential supplier for the Product and therefore will communicate
to RAGACTIVES any offer for the Product which may have received from other equivalent manufacturer with approved DMF in USA, enabling 

  

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RAGACTIVES to align its price to such of other equivalent manufacturer (“equivalent manufacturer” means in this contract any third party with a
Drug Master File approved by the FDA selling the Product). In this respect CLIENT shall buy from RAGACTIVES at least 75% of its annual consumption of the Product as long as RAGACTIVES price is not over 10% of other equivalent manufacturer’s
price. 
 3.2. CLIENT agrees to provide a rolling forecast of its Product requirements on a quarterly basis to RAGACTIVES so as to facilitate RAGACTIVES to
carry out production planning of the Product for sale and supply pursuant to the terms of this Agreement. The rolling forecast on this basis will be communicated to RAGACTIVES three (3) months prior to the commencement of the relevant calendar
year during the term of this Agreement and will be updated on a quarterly basis. CLIENT shall submit firm purchase orders setting forth specific Product quantities and shipping instructions for each shipment at least one hundred and twenty
(120) days prior to required delivery dates, and RAGACTIVES shall acknowledge receipt thereof and confirm said terms. RAGACTIVES shall supply CLIENT with the quantities set forth on such firm purchase orders and such additional amounts that
CLIENT may order in excess of CLIENT’s forecasted amounts constituting firm purchase orders; provided that RAGACTIVES shall have confirmed and accepted such additional orders within ten (10) days of RAGACTIVES’ receipt of any such
additional orders. RAGACTIVES agrees to use its best efforts to meet any such additional orders. RAGACTIVES covenants to maintain capacity to manufacture on an annualized basis 120% of the forecasted requirements of CLIENT set forth in any forecast
submitted by CLIENT in accordance with this Agreement. 
 3.3. RAGACTIVES shall supply the Product in accordance with the Product Specifications as stated in
Annex 1. CLIENT shall be responsible for analytical controls made by it on the Product purchased from RAGACTIVES. 
 3.4. CLIENT shall have thirty
(30) days from the date of delivery of the Product to reject all or any part of the Product which is damaged or does not conform with the Product Specifications. In the event of notice of such non-conformity, RAGACTIVES shall, to the exclusion
of any other remedy, replace the defective Product at no cost to CLIENT. In the event that RAGACTIVES does not agree with CLIENT’s statement of nonconformity, RAGACTIVES shall submit a sample of the allegedly nonconforming Product to an
independent qualified laboratory for testing as to the Product conformity with the Product Specifications, which laboratory shall have been approved by CLIENT. The decision of the independent qualified laboratory shall be final and all reasonable
costs associated with the analysis shall be borne by the losing party. 
 ARTICLE IV-PRODUCT PRICES AND PAYMENT TERMS 
 4.1. The confidential portion has been omitted and filed separately with the Securities and Exchange Commission. 
 4.2. Terms of Payment shall be thirty (30) days after invoice date upon shipment of the Product and receipt of Invoice. Product shall be shipped to CLIENT CIF New
York, USA. Additional orders will not be shipped until previous one has been fully paid. 
  

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 ARTICLE V-QUALITY AND CONTROLS 
 5.1. RAGACTIVES guarantees that the quality of the Product supplied under this Agreement shall meet, at the time of delivery to CLIENT, all Specifications as stated in Annex 1. RAGACTIVES shall enclose a certificate
of analysis for each batch of the shipment proving that the Product meets such quality standards. 
 5.2. The Product supplied to CLIENT shall be
manufactured in compliance with RAGACTIVE’s DMF filed with the US FDA and shall be manufactured in compliance with all applicable laws and regulations, including but not limited to the FDA Current Good Manufacturing Practices
(“cGMP”). Upon request, RAGACTIVES will make its best efforts to provide CLIENT with any substantive impurities from the synthesis process whenever it is possible to isolate them by chemical conventional means. 
 5.3. RAGACTIVES will supply CLIENT with copies of all governmental inspections, approvals and Drug Master Files in connection with the Product in the Territory.
Summaries of quality test results of the Product will be available to CLIENT. The CLIENT or its representatives will have the right at reasonable times during normal business hours, to inspect the facilities where the Product is manufactured upon
advance written notice to RAGACTIVES for the purposes of quality control and to assure compliance with cGMP, applicable laws and the terms of this Agreement. In the event that the facilities used to manufacture the Product are the subject of an
audit or inspection by the FDA or a similar regulatory authority, which audit or inspection is directly or indirectly related to the Product, RAGACTIVES shall notify CLIENT. 
 ARTICLE VI-REPRESENTATIONS & WARRANTIES 
 6.1.
Warranties by RAGACTIVES. RAGACTIVES warrants that Product delivered for shipment to CLIENT under this Agreement shall, at the time of delivery for shipment, be free of defects, meet all Specifications in Annex 1 and have been processed and stored
by RAGACTIVES in compliance with cGMPs and all applicable FDA regulations. 
 ARTICLE VII-INDEMNITY & RECALLS 
 7.1. Indemnification by CLIENT. CLIENT shall defend, indemnify, and hold RAGACTIVES harmless from and against any and all claims, liability, damage, loss, cost and
expenses (including reasonable attorney’s fees) arising from any third party claims made or brought or any proceedings of any sort initiated against RAGACTIVES which: 
  

	 	7.1.1.	Arise out of CLIENT’s breach of any obligations or warranty under this Agreement; 

  

	 	7.1.2.	Arise out of the promotion, distribution, sale or use by CLIENT or any third party of Product, including without limitation any product liability claim (except to the extent CLIENT
is at fault); or 

  

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	 	7.1.3.	Arise out of any or are based upon any claim of violation by CLIENT of any patent, trade secret or other intellectual property rights of any person or entity.

  

	 	    	In no event shall CLIENT be liable for consequential or punitive damages. 

 7.2. Indemnification by RAGACTIVES. RAGACTIVES will defend, indemnify, and hold CLIENT harmless from and against any and all claims, liabilities, damages, losses, costs and expenses (including reasonable attorney’s fees) resulting from
any third party claims made or brought against, or proceedings of any sort initiated against CLIENT which: 
  

	 	7.2.1.	Arise out of RAGACTIVES’s breach of any obligation or warranty under this Agreement; 

  

	 	7.2.2.	Arise out of the promotion, distribution, sale or use by RAGACTIVES or any third party of Product, including without limitation any product liability claim (except to the extent
RAGACTIVES is at fault); or 

  

	 	7.2.3.	Arise out of any or are based upon any claim of violation by RAGACTIVES of any patent, trade secret or other intellectual property rights of any person or entity.

  

	 	    	In no event shall RAGACTIVES be liable for consequential or punitive damages. 

 Conditions. Each party’s indemnity obligations (the “Indemnifying Party”) under Sections 7.1 and 7.2 are conditioned upon the other party (the “Indemnified Party”) promptly notifying the Indemnifying Party of any
such claim or proceeding in writing, giving the Indemnifying Party the opportunity to defend or settle such a claim or proceeding at its expense and cooperating with the Indemnifying Party (at the expense of the Indemnifying Party) in defending or
settling any such claim or proceeding. 
 ARTICLE VIII-TERM AND TERMINATION 
 8.1. This Agreement commences on the effective date set forth above and ends ten (10) years after said date. Thereafter it shall be automatically renewed for
successive two (2) year periods unless terminated by either party by written notice to the other party no later than one hundred and eighty (180) days prior to the then current term. 
 8.2. Furthermore, this Agreement may be terminated by either party prior to the termination date upon the occurrence of any of the following events: 
 i ) ninety (90) days’ notice by either party to the other in the event that the other party materially breaches any provision of this Agreement
and fails to remedy the breach prior to the expiration of such ninety (90) days period; 
 ii) immediately upon notice by either party
to the other upon: 
  

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 (A) the insolvency of either party to this Agreement, or the appointment of a receiver for a party or
for all or any substantial part of its properties, but only if such receiver is not discharged within sixty (60) days of its appointment; or 
 (B) the admission by either party in writing of its inability to pay its debts as they become due or the execution by the other party of an assignment for the benefit of its creditors; or 
 (C) the filing by either party of a petition to be adjudged a bankrupt, or a petition or answer admitting the material allegations of a petition filed
against the other party in any bankruptcy preceding, or the act of the other party in instituting or voluntarily being or becoming a party to any other judicial proceeding intended to effect a discharge of the debts of such other party in whole or
in part or the adjudication of such other party as a bankrupt. 
 ARTICLE IX-RIGHTS AND DUTIES AFTER TERMINATION 
 9.1. Upon termination of this Agreement CLIENT shall maintain confidentiality and shall not disclose or use any Scientific and Technical Information unless it has become
public knowledge. 
 ARTICLE X-FORCE MAJEURE 
 10.1. Failure of either party to perform its obligations hereunder (except for the obligation to make payments) shall not subject either party, as the case may be, to any liability to other party if such failure is caused by act of God or
the public enemy, fire, flood, drought, war, riot, insurrection, sabotage, embargo, strike or other labor trouble, compliance with any order, regulation or request of any governmental agency which the affected party could not reasonably have
avoided. The affected party promptly shall notify the other party in writing setting forth the details of the occurrence of Force Majeure, its expected duration, and how that party performance is affected. A party whose performance of obligations
has been delayed by Force Majeure shall use its best efforts to overcome the effect of the Force Majeure as soon as possible. 
 ARTICLE
XI-MISCELLANEOUS 
 11.1 All notices and other communications shall be in writing and shall be deemed to be given when dispatched by registered or
certified mail, fax or courier, to the following addresses of the respective parties: 
 HI-TECH PHARMACAL CO., INC.

 369 Bayview Avenue 
 Amityville, New York 11701, USA 
 PHONE: (631) 789-8228 
 FAX: (631) 789-8824 
 Attn.: David Seltzer, President & CEO 
  

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 RAGACTIVES S.L.U. 
 Parque Tecnológico, Parcelas 2 y 3 
 47151 Boecillo (Valladolid), Spain 
 PHONE: ++ 34 983 548110 
 FAX: ++ 34 983 548118 
 Attn: Javier Gallo, Sales Director 
 Either party may change its address for notices and other communication upon notice to the other parties.

 11.2. This Agreement may not be amended or otherwise modified except by a writing signed by all parties. Either party may waive compliance by the other
party with any provision of this Agreement required to be performed by such other party. Such waiver must be written and shall not be construed as a waiver of subsequent compliance with any other provision of this Agreement by such other party.

 11.3. Each provision of this Agreement is severable. If any provision hereof is invalid or unenforceable under the laws of Spain or of the Territory, the
remaining provisions shall remain valid and binding unless the provision or provisions which are invalid or unenforceable as aforesaid shall substantially adversely affect the rights, licenses or benefits granted to either party hereunder.

 11.4. This Agreement constitutes the entire understanding between the parties and supersedes all prior oral or written understandings between the parties
with respect to the subject matter of this Agreement. 
 11.5. RAGACTIVES and CLIENT may not assign or transfer rights or obligations under this Agreement or
any document relating to this Agreement to any other entity or company or person, with the exception of those of the same group, without the prior written consent of RAGACTIVES and CLIENT respectively. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and assigns. 
 11.6. Independent Contractor. Each party shall at all times during the term be
an independent contractor, maintaining sole and exclusive control over its personnel and operation. At no time will either party hold itself out to be the agent, employee, lessee, sublessee, partner, or joint venturer of the other, and it is further
understood and agreed between the parties that the full and exclusive relationship between them is that of an independent contractor. Nothing in this Agreement shall be construed to create any agency, employment, partnership, joint venture or
similar relationship between the parties. Neither Party shall have any right or authority whatsoever to incur any liability or obligation, express or implied, or otherwise act in any manner in the name or on the behalf of the other, or to make any
promise, warranty or representation binding on the other. Each party agrees not to use the name of or refer to the other 

  

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without prior written permission, in any public statements, whether oral or written, related to this Agreement. 
 11.7. Insurance; Liability to Third Persons. Each party at its own expense, shall obtain and thereafter maintain workers’ compensation and comprehensive general
liability (bodily injury and property damage) insurance, with respect to performance under this Agreement. Each party shall give the other or its representative immediate notice of any suit or action filed, or prompt notice of any claim made,
against them arising out of the performance of this Agreement. 
 11.8. Product Liability. The parties reciprocally agree, each at their own respective
expense, to maintain Product Liability insurance coverage sufficient to cover the exposures associated with the services contemplated under this Agreement in an amount no less than $2 million in the aggregate and $1 million per occurrence. The
coverage may be procured through a combination of primary and excess or umbrella policies. The carriers providing such coverage must be financially sound and are subject to commercially reasonable acceptance by the parties. Upon request, each party
agrees to provide evidence of such coverage in the form of a certificate of insurance. The Products Liability coverage will remain in effect during the term that services are rendered under this Agreement and shall be maintained for a period of no
less than 6 years after the last date of services. If such Product Liability insurance is written on a claims made basis, the parties agree that any change in carrier(s) during the term will require the purchase of “prior acts” coverage to
ensure that coverage will be uninterrupted. 
 ARTICLE XII-GOVERNING LAW AND ARBITRATION 
 12.1. This Agreement shall be governed and interpreted under laws of Switzerland, without giving effect to the principles of conflict of law thereof. Any dispute or
claim arising out of or in connection to this Agreement or breach thereof, its interpretation or validity shall be settled first by presentation of the positions of each party, being made to the authorized representatives of the other party
(non-lawyers) in the presence of an agreed-upon neutral adviser, if desired, so that such representatives may confer with each other in an endeavor to amicably resolve the dispute. 
 12.2. If the parties are unable to find amicably an acceptable settlement, the dispute shall be settled by arbitration according to the rules of the International Chamber of Commerce, Geneva. The Arbitration Court
shall apply the arbitration provisions of the new Swiss Private International Law as in effect of January 1st, 1989 and Swiss law for the substance of the Agreement. The arbitration shall take place in Geneva, Switzerland, and in the English
language. 
 12.3. The award to be rendered shall be final and conclusive and binding upon all parties without any right to appeal or other review. Judgment
upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. 
 IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed in duplicate by their duly authorized officers as of the day and year first written above. 
  

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	 For and on behalf of
 HI-TECH PHARMACAL CO.,
INC.
	 		 	 For and on behalf of
 RAGACTIVES
S.L.U.

			
	/s/David Seltzer	 		 	/s/Gerardo Gutiérrez
	 David Seltzer
 President & Chief Executive
Officer
	 		 	 Gerardo Gutiérrez
 General
Manager

  

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 ANNEX 1 
 SPECIFICATIONS 
 The confidential portion has been omitted and filed separately with the Securities and Exchange
Commission. 
  

 10First Amd. to Revolving Line of Credit Note, Security Agreement

 Exhibit 10.36 
  

			
	WELLS FARGO	  	REVOLVING LINE OF CREDIT NOTE
		
	$7,500,000.00	  	 San Jose, California
 March 11, 2009

 FOR VALUE RECEIVED, the undersigned Magma Design Automation, Inc. (“Borrower”) promises to pay to
the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at its office at Santa Clara Valley RCBO, 121 Park Center Plaza, 2nd Floor, San Jose, CA 95113, or at such other place as the holder hereof may designate, in lawful money
of the United States of America and in immediately available funds, the principal sum of $7,500,000.00, or so much thereof as may be advanced and be outstanding, with interest thereon, to be computed on each advance from the date of its
disbursement as set forth herein. 
 1. DEFINITIONS: 
 As used herein, the following terms shall have the meanings set forth after each, and any other term defined in this Note shall have the meaning set forth at the place defined: 
 1.1 “Business Day” means any day except a Saturday, Sunday or any other day on which commercial banks in California are authorized or required by law to close.

 1.2 “Fixed Rate Term” means a period commencing on a Business Day and continuing for 1 month, as designated by Borrower, during
which all or a portion of the outstanding principal balance of this Note bears interest determined in relation to LIBOR; provided however, that no Fixed Rate Term may be selected for a principal amount less than $100,000.00; and
provided further, that no Fixed Rate Term shall extend beyond the scheduled maturity date hereof. If any Fixed Rate Term would end on a day which is not a Business Day, then such Fixed Rate Term shall be extended to the next succeeding Business
Day. 
 1.3 “LIBOR” means the rate per annum (rounded upward, if necessary, to the nearest whole 1/8 of 1%) determined by dividing Base LIBOR by a
percentage equal to 100% less any LIBOR Reserve Percentage. 
 (a) “Base LIBOR” means the rate per annum for United States dollar
deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the understanding that such rate is quoted by Bank for the purpose of calculating effective rates of interest for loans making reference thereto, on the first day of a Fixed Rate
Term for delivery of funds on said date for a period of time approximately equal to the number of days in such Fixed Rate Term and in an amount approximately equal to the principal amount to which such Fixed Rate Term applies. Borrower understands
and agrees that Bank may base its quotation of the Inter-Bank Market Offered Rate upon such offers or other market indicators of the Inter-Bank Market as Bank in its discretion deems appropriate including, but not limited to, the rate offered for
U.S. dollar deposits on the London Inter-Bank Market. 
 (b) “LIBOR Reserve Percentage” means the reserve percentage prescribed by
the Board of Governors of the Federal Reserve System (or any successor) for “Eurocurrency Liabilities” (as defined in Regulation D of the Federal Reserve Board, as amended), adjusted by Bank for expected changes in such reserve percentage
during the applicable Fixed Rate Term. 
 1.4 “Prime Rate” means at any time the rate of interest most recently announced within Bank at its
principal office as its Prime Rate, with the understanding that the Prime Rate is one of Bank’s base rates and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto, and is evidenced
by the recording thereof after its announcement in such internal publication or publications as Bank may designate. 
  

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 2. INTEREST: 
 2.1 Interest. The outstanding principal balance of this Note shall bear interest (computed on the basis of a 360-day year, actual days elapsed) either (a) at a fluctuating rate per annum 3.50000% above the Prime Rate in effect
from time to time, or (b) at a fixed rate per annum determined by Bank to be 3.50000% above LIBOR in effect on the first day of the applicable Fixed Rate Term. When interest is determined in relation to the Prime Rate, each change in the rate
of interest hereunder shall become effective on the date each Prime Rate change is announced within Bank. With respect to each LIBOR selection option selected hereunder, Bank is hereby authorized to note the date, principal amount, interest rate and
Fixed Rate Term applicable thereto and any payments made thereon on Bank’s books and records (either manually or by electronic entry) and/or on any schedule attached to this Note, which notations shall be prima facie evidence of the accuracy of
the information noted. 
 2.2 Selection of Interest Rate Options. At any time any portion of this Note bears interest determined in relation to LIBOR,
it may be continued by Borrower at the end of the Fixed Rate Term applicable thereto so that all or a portion thereof bears interest determined in relation to the Prime Rate or to LIBOR for a new Fixed Rate Term designated by Borrower. At any time
any portion of this Note bears interest determined in relation to the Prime Rate, Borrower may convert all or a portion thereof so that it bears interest determined in relation to LIBOR for a Fixed Rate Term designated by Borrower. At such time as
Borrower requests an advance hereunder or wishes to select a LIBOR option for all or a portion of the outstanding principal balance hereof, and at the end of each Fixed Rate Term, Borrower shall give Bank notice specifying: (a) the interest
rate option selected by Borrower; (b) the principal amount subject thereto; and (c) for each LIBOR selection, the length of the applicable Fixed Rate Term. Any such notice may be given by telephone (or such other electronic method as Bank
may permit) so long as, with respect to each LIBOR selection, (i) if requested by Bank, Borrower provides to Bank written confirmation thereof not later than 3 Business Days after such notice is given, and (ii) such notice is given to Bank
prior to 10:00 a.m. on the first day of the Fixed Rate Term, or at a later time during any Business Day if Bank, at it’s sole option but without obligation to do so, accepts Borrower’s notice and quotes a fixed rate to Borrower. If
Borrower does not immediately accept a fixed rate when quoted by Bank, the quoted rate shall expire and any subsequent LIBOR request from Borrower shall be subject to a redetermination by Bank of the applicable fixed rate. If no specific designation
of interest is made at the time any advance is requested hereunder or at the end of any Fixed Rate Term, Borrower shall be deemed to have made a Prime Rate interest selection for such advance or the principal amount to which such Fixed Rate Term
applied. 
 2.3 Taxes and Regulatory Costs. Borrower shall pay to Bank immediately upon demand, in addition to any other amounts due or to become due
hereunder, any and all (a) withholdings, interest equalization taxes, stamp taxes or other taxes (except income and franchise taxes) imposed by any domestic or foreign governmental authority and related in any manner to LIBOR, and
(b) future, supplemental, emergency or other changes in the LIBOR Reserve Percentage, assessment rates imposed by the Federal Deposit Insurance Corporation, or similar requirements or costs imposed by any domestic or foreign governmental
authority or resulting from compliance by Bank with any request or directive (whether or not having the force of law) from any central bank or other governmental authority and related in any manner to LIBOR to the extent they are not included in the
calculation of LIBOR. In determining which of the foregoing are attributable to any LIBOR option available to Borrower hereunder, any reasonable allocation made by Bank among its operations shall be conclusive and binding upon Borrower. 

2.4 Payment of Interest. Interest accrued on this Note shall be payable on the last day of each month, commencing March 31, 2009.

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

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 3. BORROWING AND REPAYMENT: 
 3.1 Borrowing and Repayment. Borrower may from time to time during the term of this Note borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject to all of the limitations, terms and
conditions of this Note and of the Credit Agreement between Borrower and Bank defined below; provided however, that the total outstanding borrowings under this Note shall not at any time exceed the principal amount stated above. The unpaid principal
balance of this obligation at any time shall be the total amounts advanced hereunder by the holder hereof less the amount of principal payments made hereon by or for Borrower, which balance may be endorsed hereon from time to time by the holder. The
outstanding principal balance of this Note shall be due and payable in full on December 31, 2009. 
 3.2 Advances. Advances
hereunder, to the total amount of the principal sum available hereunder, may be made by the holder at the oral or written request of (a) Peter Teshima or Greg S. Wagenhoffer, any one acting alone, who are authorized to request
advances and direct the disposition of any advances until written notice of the revocation of such authority is received by the holder at the office designated above, or (b) any person, with respect to advances deposited to the credit of any
deposit account of Borrower, which advances, when so deposited, shall be conclusively presumed to have been made to or for the benefit of Borrower regardless of the fact that persons other than those authorized to request advances may have authority
to draw against such account. The holder shall have no obligation to determine whether any person requesting an advance is or has been authorized by Borrower. 
 3.3 Application of Payments. Each payment made on this Note shall be credited first, to any interest then due and second, to the outstanding principal balance hereof. All payments credited to principal shall be applied first, to the
outstanding principal balance of this Note which bears interest determined in relation to the Prime Rate, if any, and second, to the outstanding principal balance of this Note which bears interest determined in relation to LIBOR, with such payments
applied to the oldest Fixed Rate Term first. 
 4. PREPAYMENT: 
 4.1 Prime Rate. Borrower may prepay principal on any portion of this Note which bears interest determined in relation to the Prime Rate at any time, in any amount and without penalty. 
 4.2 LIBOR. Borrower may prepay principal on any portion of this Note which bears interest determined in relation to LIBOR at any time and in the minimum amount of
$100,000.00; provided however, that if the outstanding principal balance of such portion of this Note is less than said amount, the minimum prepayment amount shall be the entire outstanding principal balance thereof. In consideration
of Bank providing this prepayment option to Borrower, or if any such portion of this Note shall become due and payable at any time prior to the last day of the Fixed Rate Term applicable thereto by acceleration or otherwise, Borrower shall pay to
Bank immediately upon demand a fee which is the sum of the discounted monthly differences for each month from the month of prepayment through the month-in-which such Fixed Rate Term matures, calculated as follows for each such month: 
 (a) Determine the amount of interest which would have accrued each month on the amount prepaid at the interest rate applicable to such amount had
it remained outstanding until the last day of the Fixed Rate Term applicable thereto. 
 (b) Subtract from the amount determined in
(a) above the amount of interest which would have accrued for the same month on the amount prepaid for the remaining term of such Fixed Rate Term at LIBOR in effect on the date of prepayment for new loans made for such term and in a principal
amount equal to the amount prepaid. 
 (c) If the result obtained in (b) for any month is greater than zero, discount that difference by
LIBOR used in (b) above. 
  

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 Borrower acknowledges that prepayment of such amount may result in Bank incurring additional costs, expenses and/or
liabilities, and that it is difficult to ascertain the full extent of such costs, expenses and/or liabilities. Borrower, therefore, agrees to pay the above-described prepayment fee and agrees that said amount represents a reasonable estimate of the
prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to pay any prepayment fee when due, the amount of such prepayment fee shall thereafter bear interest until paid at a rate per annum 2.000% above the Prime Rate in effect
from time to time (computed on the basis of a 360-day year, actual days elapsed). 
 5. EVENTS OF DEFAULT: 
 This Note is made pursuant to and is subject to the terms and conditions of that certain Credit Agreement between Borrower and Bank dated as of
October 31, 2008, as amended from time to time (the “Credit Agreement”). Any default in the payment or performance of any obligation under this Note, or any defined event of default under the Credit Agreement, shall
constitute an “Event of Default” under this Note. 
 6. MISCELLANEOUS: 
 6.1 Remedies. Upon the occurrence of any Event of Default, the holder of this Note, at the holder’s option, may declare all sums of principal and interest outstanding hereunder to be immediately due and
payable without presentment, demand, notice of nonperformance, notice of protest, protest or notice of dishonor, all of which are expressly waived by Borrower, and the obligation, if any, of the holder to extend any further credit hereunder shall
immediately cease and terminate. Borrower shall pay to the holder immediately upon demand the full amount of all payments, advances, charges, costs and expenses, including reasonable attorneys’ fees (to include outside counsel fees and all
allocated costs of the holder’s in-house counsel), expended or incurred by the holder in connection with the enforcement of the holder’s rights and/or the collection of any amounts which become due to the holder under this Note, and the
prosecution or defense of any action in any way related to this Note, including without limitation, any action for declaratory relief, whether incurred at the trial or appellate level, in an arbitration proceeding or otherwise, and including any of
the foregoing incurred in connection with any bankruptcy proceeding (including without limitation, any adversary proceeding, contested matter or motion brought by Bank or any other person) relating to Borrower or any other person or entity.

 6.2 Obligations Joint and Several. Should more than one person or entity sign this Note as a Borrower, the obligations of each such Borrower shall
be joint and several. 
 6.3 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of California.

 IN WITNESS WHEREOF the undersigned has executed this Note as of the date first written above. 
  

			
	Magma Design Automation, Inc.
		
	By:	 	 /s/    Peter Teshima

		 	Peter Teshima, Chief Financial Officer
		
	By:	 	 /s/    Roy Jewell

		 	Roy Jewell, President

  

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	WELLS FARGO	  	REVOLVING LINE OF CREDIT NOTE
		
	$7,500,000.00	  	 San Jose, California
 March 11, 2009

 FOR VALUE RECEIVED, the undersigned Magma Design Automation, Inc. (“Borrower”) promises to pay to
the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at its office at Santa Clara Valley RCBO, 121 Park Center Plaza, 2nd Floor, San Jose, CA 95113, or at such other place as the holder hereof may designate, in lawful
money of the United States of America and in immediately available funds, the principal sum of $7,500,000.00, or so much thereof as may be advanced and be outstanding, with interest thereon, to be computed on each advance from the date
of its disbursement as set forth herein. 
 1. DEFINITIONS: 
 As used herein, the following terms shall have the meanings set forth after each, and any other term defined in this Note shall have the meaning set forth at the place defined: 
 1.1 “Business Day” means any day except a Saturday, Sunday or any other day on which commercial banks in California are authorized or required by law to close.

 1.2 “Fixed Rate Term” means a period commencing on a Business Day and continuing for 1 month, as designated by Borrower, during
which all or a portion of the outstanding principal balance of this Note bears interest determined in relation to LIBOR; provided however, that no Fixed Rate Term may be selected for a principal amount less than $100,000.00; and
provided further, that no Fixed Rate Term shall extend beyond the scheduled maturity date hereof. If any Fixed Rate Term would end on a day which is not a Business Day, then such Fixed Rate Term shall be extended to the next succeeding Business Day.

 1.3 “LIBOR” means the rate per annum (rounded upward, if necessary, to the nearest whole 1/8 of 1%) determined by dividing Base LIBOR by a
percentage equal to 100% less any LIBOR Reserve Percentage. 
 (a) “Base LIBOR” means the rate per annum for United States dollar
deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the understanding that such rate is quoted by Bank for the purpose of calculating effective rates of interest for loans making reference thereto, on the first day of a Fixed Rate
Term for delivery of funds on said date for a period of time approximately equal to the number of days in such Fixed Rate Term and in an amount approximately equal to the principal amount to which such Fixed Rate Term applies. Borrower understands
and agrees that Bank may base its quotation of the Inter-Bank Market Offered Rate upon such offers or other market indicators of the Inter-Bank Market as Bank in its discretion deems appropriate including, but not limited to, the rate offered for
U.S. dollar deposits on the London Inter-Bank Market. 
 (b) “LIBOR Reserve Percentage” means the reserve percentage prescribed by
the Board of Governors of the Federal Reserve System (or any successor) for “Eurocurrency Liabilities” (as defined in Regulation D of the Federal Reserve Board, as amended), adjusted by Bank for expected changes in such reserve percentage
during the applicable Fixed Rate Term. 
 1.4 “Prime Rate” means at any time the rate of interest most recently announced within Bank at its
principal office as its Prime Rate, with the understanding that the Prime Rate is one of Bank’s base rates and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto, and is evidenced
by the recording thereof after its announcement in such internal publication or publications as Bank may designate. 
  

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 2. INTEREST: 
 2.1 Interest. The outstanding principal balance of this Note shall bear interest (computed on the basis of a 360-day year, actual days elapsed) either (a) at a fluctuating rate per annum 1.50000% above the Prime
Rate in effect from time to time, or (b) at a fixed rate per annum determined by Bank to be 1.50000% above LIBOR in effect on the first day of the applicable Fixed Rate Term. When interest is determined in relation to the Prime Rate,
each change in the rate of interest hereunder shall become effective on the date each Prime Rate change is announced within Bank. With respect to each LIBOR selection option selected hereunder, Bank is hereby authorized to note the date, principal
amount, interest rate and Fixed Rate Term applicable thereto and any payments made thereon on Bank’s books and records (either manually or by electronic entry) and/or on any schedule attached to this Note, which notations shall be prima facie
evidence of the accuracy of the information noted. 
 2.2 Selection of Interest Rate Options. At any time any portion of this Note bears interest
determined in relation to LIBOR, it may be continued by Borrower at the end of the Fixed Rate Term applicable thereto so that all or a portion thereof bears interest determined in relation to the Prime Rate or to LIBOR for a new Fixed Rate Term
designated by Borrower. At any time any portion of this Note bears interest determined in relation to the Prime Rate, Borrower may convert all or a portion thereof so that it bears interest determined in relation to LIBOR for a Fixed Rate Term
designated by Borrower. At such time as Borrower requests an advance hereunder or wishes to select a LIBOR option for all or a portion of the outstanding principal balance hereof, and at the end of each Fixed Rate Term, Borrower shall give Bank
notice specifying: (a) the interest rate option selected by Borrower; (b) the principal amount subject thereto; and (c) for each LIBOR selection, the length of the applicable Fixed Rate Term. Any such notice may be given by telephone
(or such other electronic method as Bank may permit) so long as, with respect to each LIBOR selection, (i) if requested by Bank, Borrower provides to Bank written confirmation thereof not later than 3 Business Days after such notice is given,
and (ii) such notice is given to Bank prior to 10:00 a.m. on the first day of the Fixed Rate Term, or at a later time during any Business Day if Bank, at it’s sole option but without obligation to do so, accepts Borrower’s notice and
quotes a fixed rate to Borrower. If Borrower does not immediately accept a fixed rate when quoted by Bank, the quoted rate shall expire and any subsequent LIBOR request from Borrower shall be subject to a redetermination by Bank of the applicable
fixed rate. If no specific designation of interest is made at the time any advance is requested hereunder or at the end of any Fixed Rate Term, Borrower shall be deemed to have made a Prime Rate interest selection for such advance or the principal
amount to which such Fixed Rate Term applied. 
 2.3 Taxes and Regulatory Costs. Borrower shall pay to Bank immediately upon demand, in addition to
any other amounts due or to become due hereunder, any and all (a) withholdings, interest equalization taxes, stamp taxes or other taxes (except income and franchise taxes) imposed by any domestic or foreign governmental authority and related in
any manner to LIBOR, and (b) future, supplemental, emergency or other changes in the LIBOR Reserve Percentage, assessment rates imposed by the Federal Deposit Insurance Corporation, or similar requirements or costs imposed by any domestic or
foreign governmental authority or resulting from compliance by Bank with any request or directive (whether or not having the force of law) from any central bank or other governmental authority and related in any manner to LIBOR to the extent they
are not included in the calculation of LIBOR. In determining which of the foregoing are attributable to any LIBOR option available to Borrower hereunder, any reasonable allocation made by Bank among its operations shall be conclusive and binding
upon Borrower. 
 2.4 Payment of Interest. Interest accrued on this Note shall be payable on the last day of each month, commencing
March 31, 2009. 
 2.5 Default Interest. From and after the maturity date of this Note, or such earlier date as all principal owing
hereunder becomes due and payable by acceleration or otherwise, the outstanding principal balance of this Note shall bear interest until paid in full at an increased rate per annum (computed on the basis of a 360-day year, actual days
elapsed) equal to 4% above the rate of interest from time to time applicable to this Note. 
  

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 3. BORROWING AND REPAYMENT: 
 3.1 Borrowing and Repayment. Borrower may from time to time during the term of this Note borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject to all of the limitations, terms and
conditions of this Note and of the Credit Agreement between Borrower and Bank defined below; provided however, that the total outstanding borrowings under this Note shall not at any time exceed the principal amount stated above. The unpaid principal
balance of this obligation at any time shall be the total amounts advanced hereunder by the holder hereof less the amount of principal payments made hereon by or for Borrower, which balance may be endorsed hereon from time to time by the holder. The
outstanding principal balance of this Note shall be due and payable in full on December 31, 2009. 
 3.2 Advances. Advances
hereunder, to the total amount of the principal sum available hereunder, may be made by the holder at the oral or written request of (a) Peter Teshima or Greg S. Wagenhoffer, any one acting alone, who are authorized to request
advances and direct the disposition of any advances until written notice of the revocation of such authority is received by the holder at the office designated above, or (b) any person, with respect to advances deposited to the credit of any
deposit account of Borrower, which advances, when so deposited, shall be conclusively presumed to have been made to or for the benefit of Borrower regardless of the fact that persons other than those authorized to request advances may have authority
to draw against such account. The holder shall have no obligation to determine whether any person requesting an advance is or has been authorized by Borrower. 
 3.3 Application of Payments. Each payment made on this Note shall be credited first, to any interest then due and second, to the outstanding principal balance hereof. All payments credited to principal shall be applied first, to the
outstanding principal balance of this Note which bears interest determined in relation to the Prime Rate, if any, and second, to the outstanding principal balance of this Note which bears interest determined in relation to LIBOR, with such payments
applied to the oldest Fixed Rate Term first. 
 4. PREPAYMENT: 
 4.1 Prime Rate. Borrower may prepay principal on any portion of this Note which bears interest determined in relation to the Prime Rate at any time, in any amount and without penalty. 
 4.2 LIBOR. Borrower may prepay principal on any portion of this Note which bears interest determined in relation to LIBOR at any time and in the minimum amount of
$100,000.00; provided however, that if the outstanding principal balance of such portion of this Note is less than said amount, the minimum prepayment amount shall be the entire outstanding principal balance thereof. In consideration
of Bank providing this prepayment option to Borrower, or if any such portion of this Note shall become due and payable at any time prior to the last day of the Fixed Rate Term applicable thereto by acceleration or otherwise, Borrower shall pay to
Bank immediately upon demand a fee which is the sum of the discounted monthly differences for each month from the month of prepayment through the month in which such Fixed Rate Term matures, calculated as follows for each such month: 
 (a) Determine the amount of interest which would have accrued each month on the amount prepaid at the interest rate applicable to such amount had
it remained outstanding until the last day of the Fixed Rate Term applicable thereto. 
 (b) Subtract from the amount determined in
(a) above the amount of interest which would have accrued for the same month on the amount prepaid for the remaining term of such Fixed Rate Term at LIBOR in effect on the date of prepayment for new loans made for such term and in a principal
amount equal to the amount prepaid. 
 (c) If the result obtained in (b) for any month is greater than zero, discount that difference by
LIBOR used in (b) above. 
  

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 Borrower acknowledges that prepayment of such amount may result in Bank incurring additional costs, expenses and/or
liabilities, and that it is difficult to ascertain the full extent of such costs, expenses and/or liabilities. Borrower, therefore, agrees to pay the above-described prepayment fee and agrees that said amount represents a reasonable estimate of the
prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to pay any prepayment fee when due, the amount of such prepayment fee shall thereafter bear interest until paid at a rate per annum 2.000% above the Prime Rate in effect
from time to time (computed on the basis of a 360-day year, actual days elapsed). 
 5. EVENTS OF DEFAULT: 
 This Note is made pursuant to and is subject to the terms and conditions of that certain Credit Agreement between Borrower and Bank dated as of
October 31, 2008, as amended from time to time (the “Credit Agreement”). Any default in the payment or performance of any obligation under this Note, or any defined event of default under the Credit Agreement, shall
constitute an “Event of Default” under this Note. 
 6. MISCELLANEOUS: 
 6.1 Remedies. Upon the occurrence of any Event of Default, the holder of this Note, at the holder’s option, may declare all sums of principal and interest outstanding hereunder to be immediately due and
payable without presentment, demand, notice of nonperformance, notice of protest, protest or notice of dishonor, all of which are expressly waived by Borrower, and the obligation, if any, of the holder to extend any further credit hereunder shall
immediately cease and terminate. Borrower shall pay to the holder immediately upon demand the full amount of all payments, advances, charges, costs and expenses, including reasonable attorneys’ fees (to include outside counsel fees and all
allocated costs of the holder’s in-house counsel), expended or incurred by the holder in connection with the enforcement of the holder’s rights and/or the collection of any amounts which become due to the holder under this Note, and the
prosecution or defense of any action in any way related to this Note, including without limitation, any action for declaratory relief, whether incurred at the trial or appellate level, in an arbitration proceeding or otherwise, and including any of
the foregoing incurred in connection with any bankruptcy proceeding including without limitation, any adversary proceeding, contested matter or motion brought by Bank or any other person) relating to Borrower or any other person or entity.

 6.2 Obligations Joint and Several. Should more than one person or entity sign this Note as a Borrower, the obligations of each such Borrower shall
be joint and several. 
 6.3 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of California

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

			
	Magma Design Automation, Inc.
		
	By:	 	 /s/    Peter Teshima

		 	Peter Teshima, Chief Financial Officer
		
	By:	 	 /s/    Roy Jewell

		 	Roy Jewell, President

  

 Page 4 

			
	WELLS FARGO	  	 SECURITY AGREEMENT
 SPECIFIC RIGHTS TO PAYMENT

 1. GRANT OF SECURITY INTEREST. For valuable consideration, the undersigned Magma Design Automation,
Inc., or any of them (“Debtor”), hereby grants and transfers to WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) a security interest in the following accounts, deposit accounts, chattel paper (whether electronic
or tangible), instruments, promissory notes, documents, general intangibles, payment intangibles, software, letter of credit rights, health-care insurance receivables and other rights to payment (collectively called “Collateral”):

 All funds, including both principal and interest, evidenced by Wells Fargo Bank certificate of deposit #6834998673, dated November 21, 2008, in
the amount of $7,500,000.00, and all renewals thereof, whether or not any such renewal is evidenced by a certificate of deposit 
 and all renewals
thereof, including all securities, guaranties, warranties, indemnity agreements, insurance policies, supporting obligations and other agreements pertaining to the same or the property described therein, together with whatever is receivable or
received when any of the Collateral or proceeds thereof are sold, collected, exchanged or otherwise disposed of, whether such disposition is voluntary or involuntary, including without limitation, all rights to payment, including returned premiums,
with respect to any insurance relating to any of the foregoing, and all rights to payment with respect to any claim or cause of action affecting or relating to any of the foregoing (hereinafter called “Proceeds”). 
 2. OBLIGATIONS SECURED. The obligations secured hereby are the payment and performance of: (a) all present and future Indebtedness of Debtor to Bank; (b) all
obligations of Debtor and rights of Bank under this Agreement; and (c) all present and future obligations of Debtor to Bank of other kinds. The word “Indebtedness” is used herein in its most comprehensive sense and includes any and
all advances, debts, obligations and liabilities of Debtor, or any of them, heretofore, now or hereafter made, incurred or created, whether voluntary or involuntary and however arising, whether due or not due, absolute or contingent, liquidated or
unliquidated, determined or undetermined, including under any swap, derivative, foreign exchange, hedge, deposit, treasury management or other similar transaction or arrangement, and whether Debtor may be liable individually or jointly, or whether
recovery upon such Indebtedness may be or hereafter becomes unenforceable. 
 3. TERMINATION. This Agreement will terminate upon the performance of all
obligations of Debtor to Bank, including without limitation, the payment of all Indebtedness of Debtor to Bank, and the termination of all commitments of Bank to extend credit to Debtor, existing at the time Bank receives written notice from Debtor
of the termination of this Agreement. 
 4. OBLIGATIONS OF BANK. Bank has no obligation to make any loans hereunder. Any money received by Bank in respect of
the Collateral may be deposited, at Bank’s option, into a non-interest bearing account over which Debtor shall have no control, and the same shall, for all purposes, be deemed Collateral hereunder. 
 5. REPRESENTATIONS AND WARRANTIES. Debtor represents and warrants to Bank that: (a) Debtor’s legal name is exactly as set forth on the first page of this
Agreement, and all of Debtor’s organizational documents or agreements delivered to Bank are complete and accurate in every respect; (b) Debtor is the owner and has possession or control of the Collateral and Proceeds; (c) Debtor has
the exclusive right to grant a security interest in the Collateral and Proceeds; (d) all Collateral and Proceeds are genuine, free from liens, adverse claims, setoffs, default, prepayment, defenses and conditions precedent of any kind or
character, except the lien created hereby or as otherwise agreed to by Bank, or heretofore disclosed by Debtor to Bank, in writing; (e) all statements contained herein and, where applicable, in the Collateral are true and complete in all
material respects; (f) no financing statement covering any of the Collateral or Proceeds, and naming any secured party other than Bank, is on file in any public office; (g) all persons appearing to be obligated on Collateral and Proceeds
have authority and capacity to contract and are bound as they appear to be; (h) all property subject to 
  

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 chattel paper has been properly registered and filed in compliance with law and to perfect the interest of Debtor in such
property; and (i) all Collateral and Proceeds comply with all applicable laws concerning form, content and manner of preparation and execution, including where applicable Federal Reserve Regulation Z and any State consumer credit laws.

 6. COVENANTS OF DEBTOR. 
 6.1 Debtor Agrees in general:
(a) to pay Indebtedness secured hereby when due; (b) to indemnify Bank against all losses, claims, demands, liabilities and expenses of every kind caused by property subject hereto; (c) to permit Bank to exercise its powers;
(d) to execute and deliver such documents as Bank deems necessary to create, perfect and continue the security interests contemplated hereby; (e) not to change its name, and as applicable, its chief executive office, its principal
residence or the jurisdiction in which it is organized and/or registered without giving Bank prior written notice thereof; (f) not to change the places where Debtor keeps any Collateral or Debtor’s records concerning the Collateral and
Proceeds without giving Bank prior written notice of the address to which Debtor is moving same; and (g) to cooperate with Bank in perfecting all security interests granted herein and in obtaining such agreements from third parties as Bank
deems necessary, proper or convenient in connection with the preservation, perfection or enforcement of any of its rights hereunder. 
 6.2 Debtor agrees
with regard to the Collateral and Proceeds, unless Bank agrees otherwise in writing: (a) that Bank is authorized to file financing statements in the name of Debtor to perfect Bank’s security interest in Collateral and Proceeds;
(b) where applicable, to insure the Collateral with Bank named as loss payee, in form, substance and amounts, under agreements, against risks and liabilities, and with insurance companies satisfactory to Bank; (c) not to permit any
security interest in or lien on the Collateral or Proceeds, except in favor of Bank; (d) not to sell, hypothecate or otherwise dispose of, nor permit the transfer by operation of law of, any of the Collateral or Proceeds or any interest
therein, nor withdraw any funds from any deposit account pledged to Bank hereunder; (e) to keep, in accordance with generally accepted accounting principles, complete and accurate records regarding all Collateral and Proceeds, and to permit
Bank to inspect the same and make copies thereof at any reasonable time; (f) if requested by Bank, to receive and use reasonable diligence to collect Proceeds, in trust and as the property of Bank, and to immediately endorse as appropriate and
deliver such Proceeds to Bank daily in the exact form in which they are received together with a collection report in form satisfactory to Bank; (g) not to commingle Collateral or Proceeds, or collections thereunder, with other property;
(h) in the event Bank elects to receive payments of Collateral or Proceeds hereunder, to pay all expenses incurred by Bank in connection therewith, including expenses of accounting, correspondence, collection efforts, reporting to account or
contract debtors, filing, recording, record keeping and expenses incidental thereto; and (i) to provide any service and do any other acts which may be necessary to keep all Collateral and Proceeds free and clear of all defenses, rights of offset and
counterclaims. 
 7. POWERS OF BANK. Debtor appoints Bank its true attorney-in-fact to perform any of the following powers, which are coupled with an
interest, are irrevocable until termination of this Agreement and may be exercised from time to time by Bank’s officers and employees, or any of them, whether or not Debtor is in default: (a) to perform any obligation of Debtor hereunder
in Debtor’s name or otherwise; (b) to give notice to account debtors or others of Bank’s rights in the Collateral and Proceeds, to enforce or forebear from enforcing the same and make extension or modification agreements with respect
thereto; (c) to release persons liable on Collateral or Proceeds and to give receipts and acquittances and compromise disputes in connection therewith; (d) to release or substitute security; (e) to resort to security in any order;
(f) to prepare, execute, file, record or deliver notes, assignments, schedules, designation statements, financing statements, continuation statements, termination statements, statements of assignment, applications for registration or like
papers to perfect, preserve or release Bank’s interest in the Collateral and Proceeds; (g) to receive, open and read mail addressed to Debtor; (h) to take cash, instruments for the payment of money and other property to which Bank is
entitled; (i) to verify facts concerning the Collateral and Proceeds by inquiry of obligors thereon, or otherwise, in its own name or a fictitious name; (j) to endorse, collect, deliver and receive payment under instruments for the payment
of money constituting or relating to Proceeds; (k) to prepare, adjust, execute, deliver and receive payment under insurance claims, and to collect and receive payment of and endorse any instrument in payment of loss or returned premiums or any
other insurance refund or return, and to apply such amounts received by Bank, at Bank’s sole option, toward repayment of the Indebtedness; (I) to exercise all rights, powers and remedies which Debtor would 
  

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 have, but for this Agreement, with respect to all Collateral and Proceeds subject hereto; (m) to make withdrawals
from and to close deposit accounts or other accounts with any financial institution, wherever located, into which Proceeds may have been deposited, and to apply funds so withdrawn to payment of the Indebtedness; (n) to preserve or release the
interest evidenced by chattel paper to which Bank is entitled hereunder and to endorse and deliver any evidence of title incidental thereto; and (o) to do all acts and things and execute all documents in the name of Debtor or otherwise, deemed
by Bank as necessary, proper and convenient in connection with the preservation, perfection or enforcement of its rights hereunder. 
 8. PAYMENT OF
PREMIUMS, TAXES, CHARGES, LIENS AND ASSESSMENTS. Debtor agrees to pay, prior to delinquency, all insurance premiums, taxes, charges, liens and assessments against the Collateral and Proceeds, and upon the failure of Debtor to do so, Bank at its
option may pay any of them and shall be the sole judge of the legality or validity thereof and the amount necessary to discharge the same. Any such payments made by Bank shall be obligations of Debtor to Bank, due and payable immediately upon
demand, together with interest at a rate determined in accordance with the provisions of this Agreement, and shall be secured by the Collateral and Proceeds, subject to all terms and conditions of this Agreement. 
 9. EVENTS OF DEFAULT. The occurrence of any of the following shall constitute an “Event of Default” under this Agreement: (a) any default in the payment
or performance of any obligation, or any defined event of default, under (i) any contract or instrument evidencing any Indebtedness, or (ii) any other agreement between Debtor and Bank, including without limitation any loan agreement,
relating to or executed in connection with any Indebtedness; (b) any representation or warranty made by Debtor herein shall prove to be incorrect, false or misleading in any material respect when made; (c) Debtor shall fail to observe or
perform any obligation or agreement contained herein; (d) any impairment of the rights of Bank in any Collateral or Proceeds or any attachment or like levy on any property of Debtor; and (e) Bank, in good faith, believes any or all of the
Collateral and/or Proceeds to be in danger of misuse, dissipation, commingling, loss, theft, damage or destruction, or otherwise in jeopardy or unsatisfactory in character or value. 
 10. REMEDIES. Upon the occurrence of any Event of Default, Bank shall have the right to declare immediately due and payable all or any Indebtedness secured hereby and to terminate any commitments to make loans or
otherwise extend credit to Debtor. Bank shall have all other rights, powers, privileges and remedies granted to a secured party upon default under the California Uniform Commerical Code or otherwise provided by law, including without limitation, the
right (a) to contact all persons obligated to Debtor on any Collateral or Proceeds and to instruct such persons to deliver all Collateral and/or Proceeds directly to Bank, and (b) to sell, lease, license or otherwise dispose of any or all
Collateral. All rights, powers, privileges and remedies of Bank shall be cumulative. No delay, failure or discontinuance of Bank in exercising any right, power, privilege or remedy hereunder shall affect or operate as a waiver of such right, power,
privilege or remedy; nor shall any single or partial exercise of any such right, power, privilege or remedy preclude, waive or otherwise affect any other or further exercise thereof or the exercise of any other right, power, privilege or remedy. Any
waiver, permit, consent or approval of any kind by Bank of any default hereunder, or any such waiver of any provisions or conditions hereof, must be in writing and shall be effective only to the extent set forth in writing. It is agreed that public
or private sales or other dispositions, for cash or on credit, to a wholesaler or retailer or investor, or user of property of the types subject to this Agreement, or public auctions, are all commercially reasonable since differences in the prices
generally realized in the different kinds of dispositions are ordinarily offset by the differences in the costs and credit risks of such dispositions. 
 While an Event of Default exists: (a) Debtor will deliver to Bank from time to time, as requested by Bank, current lists of all Collateral and Proceeds; (b) Debtor will not dispose of any Collateral or Proceeds except on terms
approved by Bank; (c) Bank may, at any time and at Bank’s sole option, liquidate any time deposits pledged to Bank hereunder and apply the Proceeds thereof to payment of the Indebtedness, whether or not said time deposits have matured and
notwithstanding the fact that such liquidation may give rise to penalties for early withdrawal of funds; and (d) at Bank’s request, Debtor will assemble and deliver all Collateral and Proceeds, and books and records pertaining thereto, to
Bank at a reasonably convenient place designated by Bank. Debtor further agrees that Bank shall have no obligation to process or prepare any Collateral for sale or other disposition. 
  

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 11. DISPOSITION OF COLLATERAL AND PROCEEDS; TRANSFER OF INDEBTEDNESS. In disposing of Collateral hereunder, Bank may
disclaim all warranties of title, possession, quiet enjoyment and the like. Any proceeds of any disposition of any Collateral or Proceeds, or any part thereof, may be applied by Bank to the payment of expenses incurred by Bank in connection with the
foregoing, including reasonable attorneys’ fees, and the balance of such proceeds may be applied by Bank toward the payment of the Indebtedness in such order of application as Bank may from time to time elect. Upon the transfer of all or any
part of the Indebtedness, Bank may transfer all or any part of the Collateral or Proceeds and shall be fully discharged thereafter from all liability and responsibility with respect to any of the foregoing so transferred, and the transferee shall be
vested with all rights and powers of Bank hereunder with respect to any of the foregoing so transferred; but with respect to any Collateral or Proceeds not so transferred Bank shall retain all rights, powers, privileges and remedies herein given.

 12. STATUTE OF LIMITATIONS. Until all Indebtedness shall have been paid in full and all commitments by Bank to extend credit to Debtor have been
terminated, the power of sale or other disposition and all other rights, powers, privileges and remedies granted to Bank hereunder shall continue to exist and may be exercised by Bank at any time and from time to time irrespective of the fact that
the Indebtedness or any part thereof may have become barred by any statute of limitations, or that the personal liability of Debtor may have ceased, unless such liability shall have ceased due to the payment in full of all Indebtedness secured
hereunder. 
 13. MISCELLANEOUS. When there is more than one Debtor named herein: (a) the word “Debtor” shall mean all or any one or more of
them as the context requires; (b) the obligations of each Debtor hereunder are joint and several; and (c) until all indebtedness shall have been paid in full, no Debtor shall have any right of subrogation or contribution, and each Debtor
hereby waives any benefit of or right to participate in any of the Collateral or Proceeds or any other security now or hereafter held by Bank. Debtor hereby waives any right to require Bank to (i) proceed against Debtor or any other person,
(ii) marshal assets or proceed against or exhaust any security 
 from Debtor or any other person, (iii) perform any obligation of Debtor with
respect to any Collateral or Proceeds, and (d) make any presentment or demand, or give any notice of nonpayment or nonperformance, protest, notice of protest or notice of dishonor hereunder or in connection with any Collateral or Proceeds.
Debtor further waives any right to direct the application of payments or security for any Indebtedness of Debtor or indebtedness of customers of Debtor. 
 14. NOTICES. All notices, requests and demands required under this Agreement must be in writing, addressed to Bank at the address specified in any other loan documents entered into between Debtor and Bank and to Debtor at the address of its
chief executive office (or principal residence, if applicable) specified below or to such other address as any party may designate by written notice to each other party, and shall be deemed to have been given or made as follows: (a) if
personally delivered, upon delivery; (b) if sent by mail, upon the earlier of the date of receipt or 3 days after deposit in the U. S. mail, first class and postage prepaid; and (c) if sent by telecopy, upon receipt. 
 15. COSTS, EXPENSES AND ATTORNEYS’ FEES. Debtor shall pay to Bank immediately upon demand the full amount of all payments, advances, charges, costs and expenses,
including reasonable attorneys’ fees (to include outside counsel fees and all allocated costs of Bank’s in-house counsel), expended or incurred by Bank in connection with (a) the perfection and preservation of the Collateral or
Bank’s interest therein, and (b) the realization, enforcement and exercise of any right, power, privilege or remedy conferred by this Agreement, whether incurred at the trial or appellate level, in an arbitration proceeding or otherwise,
and including any of the foregoing incurred in connection with any bankruptcy proceeding (including without limitation, any adversary proceeding, contested matter or motion brought by Bank or any other person) relating to Debtor or in any way
affecting any of the Collateral or Bank’s ability to exercise any of its rights or remedies with respect thereto. All of the foregoing shall be paid by Debtor with interest from the date of demand until paid in full at a rate per annum equal to
the greater of ten percent (10%) or Bank’s Prime Rate in effect from time to time. 
 16. SUCCESSORS; ASSIGNS; AMENDMENT. This Agreement shall be
binding upon and inure to the benefit of the heirs, executors, administrators, legal representatives, successors and assigns of the parties, and may be amended or modified only in writing signed by Bank and Debtor. 
  

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 17. OBLIGATIONS OF MARRIED PERSONS. Any married person who signs this Agreement as Debtor hereby expressly agrees that
recourse may be had against his or her separate property for all his or her Indebtedness to Bank secured by the Collateral and Proceeds under this Agreement. 
 18. SEVERABILITY OF PROVISIONS. If any provision of this Agreement shall be held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or any remaining provisions of this Agreement. 
 19. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California. 
 Debtor warrants that Debtor is an organization registered under the laws of Delaware.

 Debtor warrants that its chief executive office (or principal residence, if applicable) is located at the following address: 1650 Technology Dr, San
Jose, CA 95110 
 IN WITNESS WHEREOF, this Agreement has been duly executed as of March 11, 2009. 
  

			
	Magma Design Automation, Inc.
		
	By:	 	 /s/    Peter Teshima

		 	Peter Teshima, Chief Financial Officer
		
	By:	 	 /s/    Roy Jewell

		 	Roy Jewell, President

  

 Page 5 

 FIRST AMENDMENT TO CREDIT AGREEMENT 
 THIS AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of March 11, 2009, by and between MAGMA DESIGN AUTOMATION, INC.,
a Delaware corporation (“Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”). 
 RECITALS 

WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and conditions of that certain Credit Agreement between Borrower and Bank dated
as of October 31, 2008, as amended from time to time (“Credit Agreement”). 
 WHEREAS, Bank and Borrower have agreed to
certain changes in the terms and conditions set forth in the Credit Agreement and have agreed to amend the Credit Agreement to reflect said changes. 
 NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Credit Agreement shall be amended as follows: 
 1. Section 1.1. (a) is hereby amended by deleting “Fifteen Million Dollars ($15,000,000.00)” as the maximum principal amount available under
the Line of Credit, and by substituting for said amount “Seven Million Five Hundred Thousand Dollars ($7,500,000.00),” with such change to be effective upon the execution and delivery to Bank of a promissory note dated as of March 11,
2009 (which promissory note shall replace and be deemed the Line of Credit Note defined in and made pursuant to the Credit Agreement) and all other contracts, instruments and documents required by Bank to evidence such change. 
 2. The first sentence of Section 1.1. (b) is hereby deleted in its entirety, and the following substituted therefor: 
 “Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed
an aggregate of eighty percent (80%) of Borrower’s eligible accounts receivable (the “Borrowing Base”) plus an additional amount not to exceed (i) $2,000,000.00 up to and including May 3, 2009, (ii) $1,000,000.00
from May 4, 2009 up to and including August 2, 2009 and (ii) zero thereafter.” 
 3. Section 1.1. (c) is hereby
deleted in its entirety, and Section 1.1(d) is hereby renamed Section 1.1. (c). 
 4. The following is hereby added to the
Credit Agreement as Section 1.1.1.: 
 “SECTION 1.1.1. LINE OF CREDIT B. 
 (a) Line of Credit B. Subject to the terms and conditions of this Agreement, Bank hereby agrees to make advances to Borrower from
time to time up to and including December 31, 2009, not to exceed at any time the aggregate 
  

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 principal amount of Seven Million Five Hundred Thousand Dollars ($7,500,000.00) (“Line of Credit
B”), the proceeds of which shall be used first, to refinance Borrower’s existing debt with Bank and second, for Borrower’s working capital requirements. Borrower’s obligation to repay advances under Line of Credit B shall be
evidenced by a promissory note dated as of March 11, 2009 (“Line of Credit Note B”), all terms of which are incorporated herein by this reference. 
 (b) Letter of Credit Reserve. Two existing Letters of Credit numbered 584969 and 587968 for $200,000.00 and $1,500,000.00,
respectively, have been previously issued by Bank and are deemed to have been issued under Line of Credit B. The undrawn amount of such Letters of Credit shall be reserved under Line of Credit B and shall not be available for borrowings thereunder.
If Line of Credit B terminates for any reason prior to the expiration of any such Letters of Credit, Borrower shall pledge cash collateral maintained at Bank equal to 100% of the stated amount of each such outstanding Letter of Credit. Each Letter
of Credit is subject to the additional terms and conditions of the Letter of Credit agreements, applications and any related documents that were or may be required by Bank in connection with the issuance thereof. Each drawing paid under a Letter of
Credit shall be deemed an advance under Line of Credit B and shall be repaid by Borrower in accordance with the terms and conditions of this Agreement applicable to such advances; provided however, that if advances under Line of Credit B are not
available, for any reason, at the time any drawing is paid, then Borrower shall immediately pay to Bank the full amount drawn, together with interest thereon from the date such drawing is paid to the date such amount is fully repaid by Borrower, at
the rate of interest applicable to advances under Line of Credit B. In such event Borrower agrees that Bank, in its sole discretion, may debit any account maintained by Borrower with Bank for the amount of any such drawing. 
 (c) Borrowing and Repayment. Borrower may from time to time during the term of Line of Credit B borrow, partially or wholly repay
its outstanding borrowings, and reborrow, subject to all of the limitations, terms and conditions contained herein or in Line of Credit Note B; provided however, that the total outstanding borrowings under Line of Credit B shall not at any time
exceed the maximum principal amount available thereunder, as set forth above.” 
 5. Section 1.4 is hereby amended by deleting the
second paragraph thereof without substitution. 
  

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 6. Sections 4.3. (c) and (d) are hereby deleted in their entirety, and the following
substituted therefor: 
 “(c) not later than 15 days after and as of the end of each calendar month, a financial
statement of Borrower, prepared by Borrower, to include balance sheet; 
 (d) not later than 15 days after and as of the end
of each calendar month, a detailed aged listing of accounts receivable and accounts payable, by invoice date and due date, with Borrowing Base Certificate (“BBC”). The BBC shall include schedule of memo items showing disbursements to
accounts receivable account debtors;” 
 (e) not later than 15 days after and as of the end of each fiscal year, a list
of all names, addresses and phone numbers of all Borrower’s account debtors; 
 (f) from time to time such other
information as Bank may reasonably request.” 
 7. Section 4.9. is hereby deleted in its entirety, and the following substituted
therefor: 
 “SECTION 4.9. FINANCIAL CONDITION. Maintain Borrower’s consolidated financial condition as follows
using generally accepted accounting principles consistently applied and used consistently with prior practices (except to the extent modified by the definitions herein) as per Exhibit A attached hereto and by reference made a part hereof.”

 8. Section 5.1. is hereby deleted in its entirety, and the following substituted therefor: 
 “SECTION 5.1. USE OF FUNDS. Use any of the proceeds of any credit extended hereunder except for the purposes stated in Article I
hereof. Without limiting the foregoing, Borrower shall not use any proceeds extended hereunder to make any payment on any of Borrower’s convertible debt.” 
 9. In consideration of the changes set forth herein and as a condition to the effectiveness hereof, immediately upon signing this Amendment Borrower shall pay to Bank a non-refundable fee of $37,500.00. 
 10. Except as specifically provided herein, all terms and conditions of the Credit Agreement remain in full force and effect, without waiver or
modification. All terms defined in the Credit Agreement shall have the same meaning when used in this Amendment. This Amendment and the Credit Agreement shall be read together, as one document. 
  

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 11. Borrower hereby remakes all representations and warranties contained in the Credit Agreement and
reaffirms all covenants set forth therein. Borrower further certifies that as of the date of this Amendment there exists no Event of Default as defined in the Credit Agreement, nor any condition, act or event which with the giving of notice
or the passage of time or both would constitute any such Event of Default. 
 IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed as of the day and year first written above. 
  

											
	MAGMA DESIGN AUTOMATION, INC.	 		 		 	WELLS FARGO BANK, NATIONAL ASSOCIATION
						
	By:	 	 /s/    Peter Teshima
	 		 		 	By:	 	 /s/    Debra Bowman

		 	 Peter Teshima
 Chief Financial Officer
	 		 		 		 	 Debra Bowman
 Vice President

						
	By:	 	 /s/    Roy Jewell
	 		 		 		 	
		 	 Roy Jewell
 President
	 		 		 		 	

  

 -4- 

 EXHIBIT A 
 (a) Borrower shall maintain unrestricted liquid assets (“liquid assets” defined as cash and cash equivalents), on deposit with Bank, exclusive of those maintained to comply with 4.9(b)), not less than
(i) $15,000,000.00 as of the end of the fourth fiscal quarter of year 2009 ending May 3, 2009, (ii) $14,000,000.00 as of the end of the first fiscal quarter of year 2010 ending August 2, 2009 and (iii) $13,000,000.00
thereafter. 
 (b) Borrower shall maintain liquid assets on deposit with Bank in a blocked account, in an amount at all times equal to or
greater than the maximum commitment amount under Line of Credit B. 
 (c) Minimum fiscal-year-to-date bookings of not less than 85% of
Borrower’s projected bookings for the applicable fiscal year-to-date period (based on projections dated February 25, 2009 delivered to Bank prior to the date hereof), to be (i) $26,350,000.00 as of the end of the fourth fiscal quarter
of year 2009 ending May 3, 2009, (ii) $15,300,000.00 as of the end of the first fiscal quarter of year 2010 ending August 2, 2009 and (iii) $23,800,000.00 as of the end of the second fiscal quarter of year 2010 ending
November 1, 2009. 
 (d) Non-GAAP Operating lncome/(Loss) in each fiscal quarter, determined as of the end of each of the following
fiscal quarters of (i) not less than $1,800,000.00 as of the end of the fourth fiscal quarter of year 2009 ending May 3, 2009, (ii) not less than $2,200,000.00 as of the end of the first fiscal quarter of year 2010 ending August 2,
2009, and (iii) not less than $1,900,000.00 as of the end of the second fiscal quarter of year 2010 ending November 1, 2009. “Non-GAAP Operating Income” is defined as GAAP operating income less the following adjustments (only to
the extent already included in GAAP operating income): (1) amortization of intangible assets; (2) amortization of developed technology; (3) in-process research and development charge; (4) stock-based compensation;
(5) acquisition-related expenses (only if taken in the quarter of such acquisition), and (6) restructuring expenses related to headcount reduction of no greater than $3,000,000.00 for the fourth fiscal quarter of year 2009 ending
May 3, 2009. 
  

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