Document:

EX-10.33

 Exhibit 10.33 
 CREDIT FACILITY AGREEMENT 
 THIS CREDIT FACILITY AGREEMENT (the
“Agreement”) is made as of the 14th day of June, 2013, by and between Marrone Bio Innovations, Inc., a Delaware corporation (the “Company”), and the Investors listed on the Schedule of Investors attached hereto as
Exhibit A (the “Investors”). 
 The parties hereby agree as follows: 

1. Notes; Advances. 
 1.1. Purchase of Notes. Subject to the terms and conditions of this Agreement, the Company agrees to sell to each Investor, and each Investor agrees, severally and not jointly, to purchase from the
Company, a Promissory Note in substantially the form attached hereto as Exhibit B (a “Note”) in the respective commitment amounts (the “Commitment Amounts”) set forth opposite each Investor’s name
on Exhibit A hereto. The purchase price of each Note shall be equal to 100% of the principal amount of such Note. The Company’s agreements with each of the Investors are separate agreements, and the sales of the Notes to each of the
Investors are separate sales. 
 1.2. Advances. During the term of this Agreement, the Investors agree, severally and not
jointly, to make advances (“Advances”) to the Company in an amount not to exceed, as to any one Investor the amount of such Investor’s Commitment Amount, and as to all of the Investors the aggregate Commitment Amounts, all
subject to the terms and conditions of this Agreement. At any time and from time to time during the term of this Agreement, the Company may request Advances hereunder by making a written request to the Investors (an “Advance
Request”). Each such Advance Request shall be sent in the manner prescribed for notices below, and shall set forth the amount of such Advance and the date requested for payment of such Advance (which date shall be at least sixty
(60) days after the date of the Advance Request for the initial such Advance Request and at least thirty (30) days after the date of the Advance Request for any subsequent Advance Request); provided that each such Advance shall equal one
quarter (1/4) of the aggregate Commitment Amounts and apply pro rata, as nearly as reasonably possible, to each Investor. After receipt of such Advance Request, each Investor shall deliver to the Company, on the date requested in such Advance
Request payment in full for the amount (set forth in such Advance Request) of one quarter (1/4) of such Investor’s Commitment Amount by wire transfer of funds to the Company, and thereafter the Company will deliver to such Investor a duly
executed Note in the principal amount of such Advance. 
 1.3. Warrants. Promptly after execution this Agreement, the
Company shall issue to each Investor (including any subsequent Investors pursuant to Section 1.4) a Warrant in substantially the form attached hereto as Exhibit C (each a “Warrant”). 

1.4. Additional Commitments. The Company may obtain commitments from additional investors acceptable to the Company, up to an
aggregate Commitment Amount 

 
(including Commitment Amounts as of the date hereof) of $7,000,000.00, and such additional investors shall become party to this Agreement and have the rights and obligations hereunder by
executing and delivering to the Company an additional counterpart signature page to this Agreement. The representations and warranties of such additional investors shall speak as of the date of such additional execution and deliver. Any such
additional investor shall be considered an “Investor” for purposes of this Agreement, and any Notes so acquired by such additional investor shall be considered “Notes” for purposes of this Agreement and all other
agreements contemplated hereby. Exhibit A to this Agreement automatically shall be amended to add all such subsequent Investors and their Commitment Amounts. 
 1.5. Defined Terms Used in this Agreement. In addition to the terms defined above or otherwise defined herein, the following terms used in this Agreement shall be construed to have the meanings set
forth or referenced below. 
 “Acquired Indebtedness” means Indebtedness of a Person whose assets or stock is
acquired by the Company in a Permitted Acquisition. 
 “Acquisition” shall have the meaning ascribed to such
term in the Warrante. 
 “Affiliate” means, with respect to any specified Person, any other Person who or
which, directly or indirectly, controls, is controlled by, or is under common control with such specified Person, including, without limitation, any general partner, officer, director or manager of such Person and any venture capital fund now or
hereafter existing that is controlled by one or more general partners or managing members of, or shares the same management company with, such Person. 
 “Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP. 
 “Code” means the Internal Revenue Code of 1986, as amended. 

“Environmental Laws” means all former, current and future federal, state, local and foreign laws (including common law),
treaties, regulations, rules, ordinances, codes, decrees, judgments, directives, orders (including consent orders), and agreements in each case, relating to protection of the environment, natural resources, human health and safety or the presence,
Release of, or exposure to, Hazardous Materials, or the generation, manufacture, processing, distribution, use, treatment, storage, transport, recycling or handling of, or the arrangement for such activities with respect to, Hazardous Materials.

 “Equity Interests” means shares, shares of capital stock, partnership interests, membership interests in a
limited liability company, beneficial interests in a trust or other equity interests in any Person. 
 “GAAP”
means United States generally accepted accounting principles. 

  
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 “Guarantee” of or by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any
obligation of such Person, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any
security for the payment of such Indebtedness or other obligation, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment of such Indebtedness or
other obligation or (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation. 

“Hazardous Materials” means (a) any petroleum products or byproducts and all other hydrocarbons, coal ash, radon
gas, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, chlorofluorocarbons and all other ozone-depleting substances and (b) any chemical, material, substance or waste that is prohibited, limited or regulated by or pursuant
to any Environmental Law. 
 “Hedging Agreement” means any interest rate protection agreement, foreign currency
exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement. 
 “Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property or assets purchased by such Person, (d) all obligations of such Person issued or
assumed as the deferred purchase price of property or services (excluding trade accounts payable and accrued obligations incurred in the ordinary course of business), which purchase price is due more than 90 days after the purchase of such property
or service, (e) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (f) all Guarantees by such Person of Indebtedness of others, (g) all Capital Lease Obligations and Synthetic Lease Obligations of such Person, (h) all obligations of such Person as an
account party in respect of letters of credit, (i) all obligations of such Person in respect of bankers’ acceptances, (j) all obligations of such Person under or in respect of Hedging Agreements, and (k) all earn-out or similar
obligations of such Person. For purposes of determining the amount of Indebtedness of any Person under clause (j) of the preceding sentence, the amount of the obligations of such Person in respect of any Hedging Agreement at any time
shall be the maximum aggregate amount (giving effect to any netting agreements) that such Person would be required to pay if such Hedging Agreement were terminated at such time. The Indebtedness of any Person shall include the Indebtedness of any
partnership in which such Person is a general partner to the extent such Person is liable therefor by contract, as a matter of law or otherwise. 

  
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 “Investor Rights Agreement” means that certain Second Amended and Restated
Investor Rights Agreement, dated as of March 5, 2010, among the Company and the stockholders of the Company party thereto, as in effect on the date hereof. 
 “Knowledge,” including the phrase “to the Company’s Knowledge,” means the actual knowledge, after reasonable inquiry, of either Pam Marrone or Don Glidewell, CEO and
CFO of the Company respectively. 
 “Lien” means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having
substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities. 

“Majority of the Investors” shall mean Investors holding at least a majority in interest of the aggregate principal
amount of the Notes then outstanding or, if no Notes are then outstanding, Investors representing a majority in interest of the aggregate Commitment Amounts. 
 “Margin Stock” shall have the meaning assigned to such term in Regulation U. 
 “Material Adverse Effect” means (i) a material adverse effect on the business, assets (including intangible assets), liabilities, financial condition, prospects, property or results
of operations of the Company and its Subsidiaries, taken as a whole, or (ii) any material limitation on the ability of the Company to perform its material obligations under, or the legality, validity or enforceability of, any Transaction
Agreement; provided, however, that no such effect resulting from or arising out of the following shall be considered when determining if a Material Adverse Effect has occurred: (a) changes in conditions in the U.S., foreign or
global economy or capital or financial markets generally, including changes in interest or exchange rates; (b) changes in general legal, tax, regulatory, political or business conditions in the countries in which the Company does business;
(c) acts of war, armed hostilities, sabotage or terrorism, or any escalation or worsening of any such acts of war, armed hostilities, sabotage or terrorism threatened or underway as of the date of this Agreement; or (d) earthquakes,
hurricanes, floods, or other natural disasters. 
 “Michigan Facility” means the Company’s plant facility
located in Bangor, Michigan. 
 “MMM” means Marrone Michigan Manufacturing, LLC, a Subsidiary of the Company.

 “Obligations” means the due and punctual payment of (i) the principal of and interest (including
interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Notes, when and as due, whether at maturity, by acceleration, upon
one or more dates set for prepayment or otherwise, (ii) each payment required to be made by the Company under the Notes or this Agreement, when and as due, and (iii) all other monetary obligations of the Company to the Investors under this
Agreement and each of the other 

  
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Transaction Agreements, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the
pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), when and as due. 
 “Permitted Acquisition” means any acquisition by the Company or a Subsidiary of the Company of all or substantially all the assets of a Person or line of business of such Person or all or
substantially all of the outstanding Equity Interests of a Person, in each case, so long as: 
 (i) no Event of Default shall
have occurred and be continuing or would result from the consummation of the proposed acquisition and the proposed acquisition is consensual; and 
 (ii) no Indebtedness will be incurred, assumed, or would exist with respect to the Company or any of its Subsidiaries as a result of such acquisition, other than Indebtedness permitted under
Section 6.1(b) and no Liens will be incurred, assumed, or would exist with respect to the assets of the Company or any of its Subsidiaries as a result of such acquisition other than Liens permitted pursuant to Section 6.1(c).

 “Person” means any individual, corporation, joint venture, association, joint stock company, partnership,
trust, trustee, limited liability company, unincorporated organization, or other entity, including, without limitation, a governmental authority. 
 “Purchase Money Indebtedness” means Indebtedness incurred to finance the acquisition of fixed assets, capital assets (whether pursuant to a loan, a capitalized lease or otherwise) or
other assets (including manufacturing plants), including the development, furnishing and operation hereof. 

“Regulation T” means Regulation T of the Board of Governors of the Federal Reserve System of the United States of
America as from time to time in effect and all official rulings and interpretations thereunder or thereof. 

“Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System of the United States of
America as from time to time in effect and all official rulings and interpretations thereunder or thereof. 

“Regulation X” means Regulation X of the Board of Governors of the Federal Reserve System of the United States
of America as from time to time in effect and all official rulings and interpretations thereunder or thereof. 

“Release” means any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge,
dispersal, leaching or migration into or through the environment or within or upon any building, structure, facility or fixture. 
 “Securities” shall mean the Notes, the Warrants and the equity securities issuable upon exercise of the Warrants (and the securities issuable upon conversion of such equity securities).

  
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 “Securities Act” means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder. 
 “Subordinated Debt” means any Indebtedness of the Company
subordinated to the Obligations and subject to a Subordination Agreement. 
 “Subordination Agreement” means
any subordination agreement with respect to Subordinated Debt among the Company, the applicable creditor(s) and the Investors, in form and substance reasonably satisfactory to the Investors. 

“Subsidiary” means, with respect to any Person (herein referred to as the “Parent”), any corporation,
company, limited liability company, partnership, association or other business entity of which securities or other ownership interests representing more than 50% of the ordinary voting power are, at the time any determination is being made, owned,
controlled or held, by the Parent or one or more Subsidiaries of the Parent or by the Parent and one or more Subsidiaries of the Parent. 
 “Synthetic Lease” means, as to any Person, any lease (including leases that may be terminated by the lessee at any time) of any property (whether real, personal or mixed) (a) that is
accounted for as an operating lease under GAAP and (b) in respect of which the lessee retains or obtains ownership of the property so leased for U.S. federal income tax purposes, other than any such lease under which such Person is the lessor.

 “Synthetic Lease Obligations” means, as to any Person, an amount equal to the sum of (a) the
obligations of such Person to pay rent or other amounts under any Synthetic Lease which are attributable to principal and, without duplication, (b) the amount of any purchase price payment under any Synthetic Lease assuming the lessee exercises
the option to purchase the leased property at the end of the lease term. 
 “Transaction Agreements” means this
Agreement, the Notes and the Warrants. 
 “UCC” means the California Uniform Commercial Code, as in effect from
time to time. 
 2. Representations and Warranties of the Company. The Company hereby represents and warrants to the
Investors that the following representations are true and complete as of the date hereof, except as otherwise indicated. For the purposes of the representations and warranties set forth in this Section 2, unless the context shall
otherwise explicitly require, the term “Company” shall include the Company and each of its Subsidiaries. 
 2.1.
Organization, Good Standing, Corporate Power and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority
(i) to carry on its business as presently conducted, (ii) to enter into this Agreement and the other Transaction Agreements and to perform its obligations hereunder and thereunder, and (iii) to issue, sell and deliver the Notes to be
issued, sold and delivered to the Investors at any Advance. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a Material Adverse Effect. 

  
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 2.2. Capitalization. 

(a) The authorized capital stock of the Company, immediately prior to the date hereof, consists of (i) 40,600,000 shares of Common
Stock, par value $0.00001 per share, 4,021,102 shares of which are issued and outstanding, and (ii) 27,690,392 shares of Preferred Stock, par value $0.00001 per share, of which 4,673,827 are designated Series A Preferred Stock, 4,655,770 of
which are issued and outstanding, of which 7,066,565 are designated Series B Preferred Stock, 7,036,465 of which are issued and outstanding, and of which 15,950,000 are designated Series C Preferred Stock, 14,997,104 of which are issued and
outstanding. 
 (b) Under the Company’s 2011 Stock Plan (the “Plan”), (i) no shares of Common Stock
have been issued pursuant to restricted stock purchase agreements, (ii) options to purchase 3,595,852 shares of Common Stock have been granted and are currently outstanding and (iii) 796,583 shares of Common Stock remain available for
future issuance to officers, directors, employees and consultants of the Company. 
 (c) All issued and outstanding Common
Stock, Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock of the Company (i) have been duly authorized and validly issued and are fully paid and nonassessable, and (ii) were issued in compliance with all
applicable state and federal laws concerning the issuance of securities. 
 2.3. Subsidiaries. The Company has no
Subsidiaries other than MMM. The Company does not own or control any equity security or other interest of any other corporation, partnership, limited liability company or other business entity. Since its inception, the Company has not consolidated
or merged with, acquired all or substantially all of the assets of, or acquired the stock of or any interest in any corporation, partnership, limited liability company or other business entity. The Company is not a participant in, and does not hold
any interest in, any joint venture, partnership or similar arrangement. 
 2.4. Authorization. All corporate action
required to be taken by the Company’s board of directors and stockholders in order to authorize the Company to enter into and perform the Transaction Agreements and to issue the Notes and Warrants pursuant to this Agreement, has been taken or
will be taken prior to any Advance, except for any federal and state securities laws filings which will be made in compliance with applicable law following such Advance. All action on the part of the officers of the Company necessary for the
execution and delivery of the Transaction Agreements, the performance of all obligations of the Company under the Transaction Agreements and the issuance and delivery of the Notes and Warrants pursuant to this Agreement has been taken or will be
taken prior to any Advance except for any federal and state securities laws filings which will be made in compliance with applicable law following such Advance. The Transaction Agreements, when executed and delivered by the Company, shall constitute
valid and legally binding obligations of the Company, enforceable against the Company in accordance with their respective terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or
other laws of general application relating to or affecting the enforcement of creditors’ rights generally, or (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies.

  
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 2.5. Valid Issuance. The Notes, when issued, sold and delivered in accordance with
the terms and for the consideration set forth in this Agreement, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under the Transaction Agreements, applicable state and
federal securities laws and liens or encumbrances created by or imposed by the Investors. Assuming the accuracy of the representations of the Investors in Section 3 of this Agreement and subject to the filings described in
Section 2.6 below, the Notes and Warrants will be issued in compliance with all applicable federal and state securities laws and it is not necessary in connection with the offer, sale and delivery of the Notes and Warrants in the manner
contemplated by this Agreement to register the Notes under any applicable federal or state securities laws. 
 2.6.
Governmental Consents and Filings. Assuming the accuracy of the representations made by the Investors in Section 3 of this Agreement, no consent, approval, order or authorization of, or registration, qualification, designation,
declaration or filing with, any federal, state or local governmental authority is required on the part of the Company in connection with the consummation of the transactions contemplated by this Agreement, the entry by the Company into the
Transaction Agreements and the issuance of the Notes and Warrants hereunder, except for filings pursuant to Regulation D of the Securities Act, and applicable state securities laws, which have been made or will be made in a timely manner.

 2.7. Litigation. There is no action, suit, proceeding or investigation pending or, to the Company’s Knowledge,
currently threatened against the Company, including any such action, suit, proceeding or investigation that questions the validity of this Agreement or the Transaction Agreements, or the right of the Company to enter into any of such agreements, or
to consummate the transactions contemplated hereby or thereby, or which would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. The foregoing includes, without limitation, actions, suits, proceedings
or investigations pending or, to the Company’s Knowledge, threatened involving the prior employment of any of the Company’s employees, their use in connection with the Company’s business of any information or techniques allegedly
proprietary to any of their former employers, or their obligations under any agreements with prior employers. The Company is not a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government
agency or instrumentality. There is no action, suit, proceeding or investigation by the Company currently pending or which the Company intends to initiate (including, without limitation, a petition in bankruptcy or insolvency). 

2.8. Intellectual Property. 
 (a) To the Company’s Knowledge, the Company owns or possesses or can obtain on commercially reasonable terms sufficient legal rights to all patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information and other proprietary rights and processes that are material to its business as now conducted. 
 (b) To the Company’s Knowledge, the Company has not misappropriated and is not infringing upon the patents, trademarks, service marks, trade names, copyrights, trade secrets, or other proprietary
rights of any party. To the Company’s Knowledge, none of the patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, 

  
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information and other proprietary rights owned by the Company is being infringed by activities, products or services of, or is being misappropriated by, any third party. The Company has not
received any written or, to its Knowledge, other communications alleging that the Company has violated or, the Company by conducting its business as currently proposed to be conducted, would violate any of the patents, trademarks, service marks,
trade names, copyrights or trade secrets or other proprietary rights of any other Person or entity. 
 (c) The Company is not
aware that any of its employees is obligated under any contract, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with their duties to the Company or that would conflict with the Company’s
business as currently proposed to be conducted. 
 2.9. Compliance with Law and Other Instruments. The Company is not in
violation or default (i) of any provisions of its Certificate of Incorporation or Bylaws, (ii) of any judgment, order, writ or decree, (iii) of any material provision of any note, indenture or mortgage, material agreement or
instrument to which it is a party or by which it is bound, or (iv) of any material provision of federal or state statute, rule, regulation, ordinance, principle of common law or any other law applicable to the Company. The execution, delivery
and performance of the Transaction Agreements, the consummation of the transactions contemplated by the Transaction Agreements and the issuance and delivery of the Notes at any Advance will not result in any such violation or be in conflict with or
constitute, with or without the passage of time and giving of notice, either (x) a default under, or violation of, any material provision, instrument, judgment, order, writ, decree, law, contract or agreement referred to in clause
(i) through (iv) above or (y) an event which results in the creation of any Lien, charge or encumbrance upon any assets of the Company or the suspension, revocation, forfeiture, or nonrenewal of any material permit or
license applicable to the Company. 
 2.10. Changes. Since May 31, 2013, there has not been: 

(a) Any resignation or termination of any officer, key employee or group of employees of the Company; 

(b) Any damage, destruction or loss, whether or not covered by insurance, materially and adversely affecting the properties, business or
prospects or financial condition of the Company; 
 (c) Any written or, to the Company’s Knowledge, other waiver by the
Company of a material right or debt owed to it; 
 (d) To the Company’s Knowledge, any labor organization activity related
to the Company; 
 (e) Any sale, assignment, or exclusive license or transfer of any patents, trademarks, copyrights, trade
secrets or other intangible assets of the Company; 
 (f) Any material amendment to any agreement to which the Company is or was
a party or by which it is bound; 

  
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 (g) Any other event or condition that, either individually or cumulatively, has materially
and adversely affected the business, material assets, material liabilities, financial condition or operations of the Company; 

(h) Any declaration, setting aside for payment or other distribution in respect of any of the Company’s capital stock, or any direct
or indirect redemption, purchase or other acquisition of any of such capital stock by the Company; 
 (i) Any satisfaction or
discharge of any Lien or payment of any obligation by the Company, except in the ordinary course of business and that is not material to the assets, properties, financial condition, operating results or business of the Company; 

(j) Any termination or material reduction (or to the Knowledge of the Company, any threat thereof) of customer or supplier purchases from
or provision of products to the Company; or 
 (k) Any arrangement or commitment by the Company to do any of the acts described
in subsection (a) through (j) above. 
 2.11. Employee Matters. 

(a) To the Company’s Knowledge, no employee of the Company, nor any consultant with whom the Company has contracted, is in material
violation of any term of any employment contract, proprietary information agreement or any other agreement relating to the right of any such individual to be employed by, or to contract with, the Company; and to the Company’s Knowledge the
continued employment by the Company of its present employees, and the performance of the Company’s contracts with its independent contractors, will not result in any such violation. The Company has not received any written or, to the
Company’s Knowledge, other notice alleging that any such violation has occurred. The Company is not aware that any officer, key employee or group of employees intends to terminate his, her or their employment with the Company, nor does the
Company have a present intention to terminate the employment of any officer, key employee or group of employees. There are no actions pending, or to the Company’s Knowledge, threatened, by any former or current employee concerning such
person’s employment by the Company. 
 (b) Each officer and key employee of the Company is currently devoting all of his or
her business time to the conduct of the business of the Company. The Company is not aware that any officer or key employee of the Company is planning to work less than full time at the Company in the future. No officer or key employee is currently
working or, to the Company’s Knowledge, plans to work for a competitive enterprise, whether or not such officer or key employee is or will be compensated by such enterprise. 

2.12. Tax Returns and Payments. The Company has never filed an S Corporation election with the Internal Revenue Service. The
Company has timely filed or has obtained presently effective extensions with respect to all tax returns (federal, state and local) required to be filed by it as of the date of this Agreement. All such tax returns are true, correct and complete in
all material respects. All taxes shown to be due and payable on such returns, any assessments imposed, and to the Company’s Knowledge all other taxes due and payable by 

  
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the Company on or before the date hereof, have been paid or will be paid prior to the time they become delinquent. The Company has not been advised (a) that any of its returns, federal,
state or other, have been or are being audited as of the date hereof, or (b) of any deficiency in assessment or proposed judgment to its federal, state or other taxes. The Company has withheld or collected from each payment made to each of its
employees, the amount of all taxes (including, but not limited to, federal income taxes, Federal Insurance Contribution Act taxes and Federal Unemployment Tax Act taxes) required to be withheld or collected therefrom, and has paid the same to the
proper tax receiving officers or authorized depositories. 
 2.13. Insurance. The Company has in place general
commercial, product liability, fire and casualty insurance policies in such amounts and covering such risks as the Company reasonably believes to be adequate for the conduct of its business (subject to reasonable deductibles), to allow it to replace
any of its material tangible properties that might be damaged or destroyed and in all other respects customary for similarly situated companies. The Company carries directors’ and officers’ liability insurance and such other policies of
similar insurance approved from time to time by the board of directors of the Company, issued by nationally recognized, financially sound and reputable insurers, with such coverage and in such amounts as are customary for similar companies.

 2.14. Permits. The Company has all franchises, permits, licenses and any similar authority necessary for the conduct
of its business, the lack of which would have a Material Adverse Effect. 
 2.15. Environmental and Safety Laws. To the
Company’s Knowledge, the Company is not in violation in any material respect of any Environmental Law, and, to the Company’s Knowledge, no material expenditures are or will be required in order to comply with any such Environmental Law.

 2.16. Disclosure. The Company has made available to the Investors all the information reasonably available to the
Company that the Investors have requested for deciding whether to acquire the Notes. To the Company’s knowledge, no representation or warranty of the Company contained in the Transaction Agreements contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements contained herein or therein not misleading in light of the circumstances under which they were made. It is understood that this representation is qualified by the fact
that the Company has not delivered to the Investors, and has not been requested to deliver, a private placement or similar memorandum or any written disclosure of the types of information customarily furnished to Investors of securities. 

2.17. USA PATRIOT Act and Other Regulations. To the Company’s Knowledge, the Company is in compliance, in all material
respects, with (a) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or
executive order relating thereto and (b) the USA PATRIOT Act. No part of the proceeds of the Notes hereunder will be used by the Company, directly or indirectly, to the Company’s Knowledge, for any payments to any governmental official or
employee, political party, official of a political party, candidate for political office, or anyone else acting in an 

  
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official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended. Neither the
Company nor, to the Knowledge of the Company, any director, officer, agent, employee or Affiliate of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department
(“OFAC”); and the Company will not directly or indirectly, to the Company’s Knowledge, use the proceeds of the Notes or otherwise make available such proceeds to any Person, for the purpose of financing the activities of any
Person currently subject to any U.S. sanctions administered by OFAC. 
 2.18. Investment Company. The Company is not an
“investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended. 
 2.19. Federal Reserve Regulations. The Company is not engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying Margin
Stock. No part of the proceeds of the Notes will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose that entails a violation of, or that is inconsistent with, the provisions of the
regulations of the Board of Governors of the Federal Reserve System of the United States of America, including Regulation T, U or X. 
 2.20. Real Property Holding Company. The Company is not a “real property holding company” within the meaning of Section 897 of the Code. 

2.21. No Solicitation or Advertisement. Neither the Company nor any Person or entity acting on its behalf has engaged, in
connection with the offering of the Notes and Warrants, in any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act. 
 3. Representations and Warranties of the Investors. Each Investor hereby represents and warrants, severally and not jointly, and only with respect to itself, to the Company that: 

3.1. Authorization. The Investor has full power and authority to enter into the Transaction Agreements. Each of the Transaction
Agreements to which the Investor is a party, when executed and delivered by the Investor, will constitute valid and legally binding obligations of the Investor, enforceable in accordance with their terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies. 
 3.2. Purchase Entirely for Own Account. This Agreement is made with
the Investors in reliance upon each of the Investors’ representation to the Company, which by each of the Investors’ execution of this Agreement, the Investor hereby confirms, that the Notes and Warrants will be acquired for investment for
the Investor’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that none of the Investors has any present intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, each Investor further represents that the 

  
 12 

 
Investor does not presently have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations to such Person or to any third Person, with respect
to the Notes or the Warrants. The Investor has not been formed for the specific purpose of acquiring the Notes or the Warrants. 

3.3. Disclosure of Information. The Investor has had an opportunity to discuss the Company’s business, management, financial
affairs and the terms and conditions of the offering of the Notes and the Warrants with the Company’s management and has had an opportunity to review the Company’s facilities. 

3.4. Restricted Securities. The Investor understands that the Notes and the Warrants have not been, and will not be, registered
under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Investors’
representations as expressed herein. The Investor understands that the Notes and Warrants are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, the Investor must hold the
Notes and the Warrants indefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available. The Investor further
acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Note and the Warrants, and on
requirements relating to the Company which are outside of the Investor’s control, and which the Company is under no obligation and may not be able to satisfy. 
 3.5. No Public Market. The Investor understands that no public market now exists for the Notes or the Warrants, and that the Company has made no assurances that such a public market will ever
exist. 
 3.6. Legends. The Investors understands that the Notes and the Warrants may bear one or all of the following
legends: 
 (a) “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.” 
 (b) Any legend set
forth in, or required by, the other Transaction Agreements. 
 (c) Any legend required by the securities laws of any state to
the extent such laws are applicable to the Notes or the Warrants represented by the certificate so legended. 

  
 13 

 3.7. Accredited Investor. The Investor is an accredited investor as defined in Rule
501(a) of Regulation D promulgated under the Securities Act. 
 3.8. Regulation S. If the Investor is not a “U.S.
Person” (as defined in Rule 902(o) under the Securities Act), such Investor further hereby represents, warrants and agrees that (a) its principal address is outside the United States and it was located outside the United States at the time
any offer to acquire the Notes or Warrants was made to it, (b) it is not a “U.S. Person”, (c) it will not resell the Notes or Warrants unless such resale is in compliance with Regulation S under the Securities Act or any other
applicable exemption under the Securities Act and (d) it will not engage in hedging transactions involving the Notes or Warrants unless in compliance with the Securities Act. 

4. Conditions to the Investor’s Obligations. The obligations of each of the Investors to purchase the Notes at any Advance
are subject to the fulfillment, on or before such Advance, of each of the following conditions, unless otherwise waived: 
 4.1.
Representations and Warranties. The representations and warranties of the Company contained in Section 2 shall be true and correct in all respects as of such Advance. 

4.2. Performance. The Company shall have performed and complied with all covenants, agreements, obligations and conditions
contained in this Agreement that are required to be performed or complied with by the Company on or before such Advance. 
 4.3.
$5 Million in Commitments. The Company shall have obtained aggregate Commitment Amounts of at least $5,000,000.00. 
 5.
Conditions of the Company’s Obligations. The obligations of the Company to sell the Notes to the Investors at any Advance are subject to the fulfillment, on or before such Advance, of each of the following conditions, unless otherwise
waived: 
 5.1. Representations and Warranties. The representations and warranties of the Investors contained in
Section 3 shall be true and correct in all respects as of such Advance. 
 5.2. Performance. The Investors
shall have performed and complied with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by the Investors on or before such Advance. 

6. Covenants. 
 6.1. Notes. For so long as the Notes remain outstanding, the Company hereby covenants and agrees that it shall comply with the following covenants: 

(a) Financial Statements and Inspection Rights. The Company shall deliver to the Investors the financial statements and other
reports and information as set forth in, and within the time periods specified in, Section 3.1 of the Investor Rights Agreement and shall provide the Investors with the inspection rights as set forth in Section 3.2 of the Investor Rights
Agreement, in each case, as if the Investors was a “Major Investor” under the Investor Rights Agreement. 

  
 14 

 (b) Indebtedness. The Company will not, and will not permit any of its Subsidiaries
to, create, assume or incur, or become at any time liable in respect of, any Indebtedness for borrowed money other than: 
 (i) Indebtedness arising under or in connection with the Notes; 

(ii)  (A) Indebtedness of the Company existing on the date hereof, and (B) any extensions, renewals and
refinancings of any Indebtedness permitted pursuant to the foregoing clause (A) (“Refinancing Indebtedness”), provided, that, (v) such Refinancing Indebtedness is in an aggregate principal amount not greater
than the aggregate principal amount of the Indebtedness being extended, renewed or refinanced, plus the amount of any reasonable premiums or penalties required to be paid thereon plus any reasonable fees and expenses associated therewith,
(w) such Refinancing Indebtedness has a later or equal final maturity and a longer or equal weighted average life to maturity than the Indebtedness being extended, renewed or refinanced, (x) if the Indebtedness being extended, renewed or
refinanced is subordinated to the Obligations, the Refinancing Indebtedness is subordinated to the Obligations on terms no less favorable to the Investors than the Indebtedness being extended, renewed or refinanced, and (y) only the obligors in
respect of the Indebtedness being extended, renewed or refinanced may become obligated with respect to such Refinancing Indebtedness; 
 (iii) unsecured trade, utility or non-extraordinary accounts payable arising in the ordinary course of business; 
 (iv) Purchase Money Indebtedness with respect to MMM in respect of the Michigan Facility; 
 (v) cash management agreements in the ordinary course of business; 

(vi) Indebtedness arising from judgments or decrees in an aggregate principal amount outstanding at any time not to exceed
$100,000; 
 (vii) sales rebates issued by the Company and its Subsidiaries to customers in the ordinary course
of business; 
 (viii) grants provided by the United States government in exchange for the Company’s
obligation to purchase equipment specified by such grants or to fund research and development efforts specified in such grants; 
 (ix) Indebtedness consisting of guarantees resulting from endorsement of negotiable instruments for collection by the Company and its Subsidiaries in the ordinary course of business; 

(x) interest rate swaps, currency swaps and similar financial products that are entered into or obtained in the ordinary
course of business; 

  
 15 

 (xi) Indebtedness of (x) the Company to or from any wholly owned
Subsidiary and (y) MMM owed to the Company; 
 (xii)  (x) Indebtedness incurred in connection with
a Permitted Acquisition solely for the purpose of consummating such Permitted Acquisition so long as no Event of Default has occurred and is continuing or would result therefrom, and (y) Acquired Indebtedness; 

(xiii) Subordinated Debt; 
 (xiv) Capital Lease Obligations and Synthetic Lease Obligations in an aggregate principal amount not to exceed $5,000,000 at any time outstanding; 

(xv) Indebtedness of the Company pursuant to a working capital facility secured by a first priority security interest in
the Company’s Accounts (as such term is defined in the UCC) and Inventory (as such term is defined in the UCC); and 
 (xvi) additional Indebtedness of the Company and its Subsidiaries not otherwise described above in an aggregate principal amount not to exceed $2,000,000 at any time outstanding. 

(c) Liens. The Company will not, and will not permit any of its Subsidiaries to, create, incur, suffer or permit to exist Liens,
other than: 
 (i) Liens of the Company existing as of the date hereof or incurred in connection with the
extension, renewal or refinancing of the Indebtedness secured by such existing Liens, provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the
Indebtedness being extended, renewed or refinanced does not increase; 
 (ii) Liens for taxes, fees, assessments
or other governmental charges or levies (A) not yet due or as to which the period of grace, if any, related thereto has not expired, or (B) which are being contested in good faith by appropriate proceedings and which are adequately
reserved for in accordance with GAAP; 
 (iii) attachments, judgments, and other similar Liens arising in
connection with court proceedings; provided, however, that the execution or other enforcement of such Liens is effectively stayed and claims secured thereby are being actively contested in good faith by appropriate proceedings;

 (iv) Liens of materialmen, mechanics, warehousemen, repairmen, carriers or employees or other similar Liens
provided for by mandatory provisions of law (A) which are not filed or recorded for a period of more than sixty days, or (B) which are being contested in good faith by appropriate proceedings and which are adequately reserved for in
accordance with GAAP; 

  
 16 

 (v) pledges or deposits made or Liens in incurred in the ordinary course of
business in connection with workers’ compensation, unemployment insurance and other social security or employment or insurance legislation; 
 (vi) Liens consisting of deposits or pledges to secure the performance of bids, trade contracts, leases, public or statutory obligations, or other obligations of a like nature incurred in the ordinary
course of business; 
 (vii) easements, rights-of-way, restrictions and other similar encumbrances affecting real
property which, in the aggregate, do not materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the Company; 

(viii) Liens arising from precautionary UCC financing statements regarding operating leases; 

(ix) Liens in favor of financial institutions in the ordinary course of business in connection with, and which solely
encumber, deposit, disbursement or concentration accounts maintained with such financial institutions on funds and other items in such accounts; 
 (x) Liens securing Indebtedness permitted pursuant to Section 6.1(b)(iv); 
 (xi) Liens solely on any cash earnest money deposits made by the Company in connection with any letter of intent or purchase agreement with respect to a Permitted Acquisition; 

(xii) Liens securing Indebtedness permitted pursuant to Section 6.1(b)(xii); 

(xiii) Liens securing Indebtedness permitted pursuant to Section 6.1(b)(xiv); and 

(xiv) Liens on the Company’s Accounts (as such term is defined in the UCC) and Inventory (as such term is defined in
the UCC) securing Indebtedness permitted pursuant to Section 6.1(b)(xv). 
 (d) Restrictions on
Distributions. The Company will not, and will not permit any of its Subsidiaries to, pay any dividends, in cash or otherwise, or make any other distributions in respect of its capital stock or other Equity Interest, or any option, warrant or
other right to acquire such capital stock or other Equity Interest, or purchase, redeem or otherwise acquire any of its outstanding capital stock or other Equity Interests, or any option, warrant or other right to acquire such capital stock or other
Equity Interest, other than (A) repurchases of outstanding equity interests from employees, directors and consultants upon the termination of such employee’s, director’s or consultant’s employment or engagement by the Company at
a repurchase price equal to the lesser of (x) the original price paid to the Company in respect of 

  
 17 

 
such equity interests or (y) the fair market value of such equity interests pursuant to agreements entered in connection with the grant of such equity interests, (B) any such dividend
or distribution by a Subsidiary of the Company to the Company or any wholly-owned Subsidiary of the Company, (C) any stock dividends, combinations, splits, recapitalizations and the like to the extent that such dividends or distributions are
made solely in the form of additional shares of capital stock of the Company or (D) in connection with any Acquisition. 

(e) Restrictive Agreements. The Company will not, and will not permit any of its Subsidiaries (other than MMM) to, enter into,
incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon the ability of any Subsidiary (other than MMM) to pay dividends or other distributions with respect to any of its Equity Interests or
to make or repay loans or advances to the Company or any other Subsidiary or to Guarantee Indebtedness of Company or any Subsidiary; provided, that the foregoing shall not apply to restrictions and conditions imposed by applicable law,
regulation or order of any Governmental Authority. 
 (f) Transactions with Affiliates. Unless otherwise consented
to in writing by a Majority of the Investors (which consent shall not be unreasonably withheld or delayed) and except for transactions exclusively among the Company and a Subsidiary or exclusively among Subsidiaries, the Company will not, and will
not permit any of its Subsidiaries to, sell or transfer any property or assets to, or purchase or acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except that (a) the Company or any
Subsidiary may engage in any of the foregoing transactions in the ordinary course of business at prices and on terms and conditions not less favorable to the Company or such Subsidiary than could be obtained on an arm’s-length basis from
unrelated third parties, (b) dividends may be paid to the extent provided in this Section 6.1, (c) securities may be issued and other payments, awards or grants (in cash, securities or otherwise) may be made pursuant to, or
with respect to the funding of, employment arrangements, stock or share options and stock or share ownership plans for the benefit of employees approved by the board of directors of the Company, and (d) reasonable fees and compensation may be
paid to, and reasonable indemnities may be provided on behalf of, officers, directors and employees of the Company or any Subsidiary, as determined by the board of directors of the Company in good faith. 

(g) Business of the Company and the Subsidiaries. The Company will not, and will not permit any of its Subsidiaries to,
engage at any time in any business or business activity other than the business currently conducted by the Company and Subsidiaries and similar, related, ancillary or complementary businesses. 

(h) Additional Information. The Company will furnish to the Investors: (i) promptly after the Company has Knowledge or
becomes aware thereof, notice of the occurrence of any Event of Default; (ii) prompt written notice of all actions, suits and proceedings before any governmental agency or authority or arbitrator pending, or to the Company’s Knowledge,
threatened against or affecting the Company or any of its Subsidiaries, which would reasonably be expected to result in a Material Adverse Effect. 

  
 18 

 (i) Corporate Existence. The Company shall maintain its corporate existence, rights
and franchises in full force and effect. 
 (j) Maintenance of Insurance. The Company will, and will cause each of its
Subsidiaries to, carry and maintain in full force and effect insurance in such amounts, with such deductibles and covering such risks as is customarily carried by companies engaged in the same or similar businesses and owning similar properties in
the localities where the Company operates. 
 (k) Keeping of Records and Books of Account. The Company will, and will
cause each of its Subsidiaries to, keep adequate records and books of account, in which entries will be made in accordance with GAAP. 
 (l) Compliance with Laws, Etc. The Company will, and will cause each of its Subsidiaries to, comply in all material respects with the requirements of all applicable material laws, rules,
regulations and orders of any governmental agency or authority, including all Environmental Laws and ERISA, and the terms of any contract or other instrument to which it may be a party or under which it may be bound. 

(m) Maintenance of Properties, Etc. The Company will, and will cause each of its Subsidiaries to, maintain and preserve all of its
material properties necessary or useful in the proper conduct of its business in good working order and condition in accordance with the general practice of other Persons of similar character and size, ordinary wear and tear excepted. 

(n) Exchange or Reissuance of Note. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of a Note, the Company shall deliver to the holder of the Note a new Note of like tenor for the principal amount of the Note so lost, stolen, destroyed or mutilated, subject to reasonable indemnity or similar undertaking by
such holder. 
 (o) Ranking. The Indebtedness represented by the Notes shall constitute senior unsecured indebtedness of
the Company and, accordingly, shall rank (x) equal in right of payment with all of the Company’s existing and future senior unsecured Indebtedness; and (y) senior in right of payment to all of the Company’s existing and future
subordinated Indebtedness. 
 7. Events of Default and Remedies. 

7.1. Events of Default. Each of the following events or occurrences shall constitute an “Event of Default”:

 (a) the Company, or any Subsidiary of the Company, shall (i) make a general assignment for the benefit of its creditors,
(ii) generally not pay its debts as they become due (other than unsecured trade accounts payable paid in the ordinary course of business), (iii) file a voluntary case or petition in bankruptcy, (iv) file a petition or answer seeking
for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future applicable bankruptcy or similar law pertinent to such circumstances,

  
 19 

 
(v) file any answer admitting or not contesting the material allegations of a bankruptcy, insolvency or similar petition filed against the Company or any Subsidiary of the Company, (vi) seek
or consent to, or acquiesce in, the appointment of any trustee, receiver, or liquidator of the Company or any Subsidiary of the Company, (vii) suffer or permit to continue unstayed and in effect for sixty (60) consecutive days any
judgment, decree or order, entered by a court or governmental commission of competent jurisdiction, that assumes custody or control of the Company or any Subsidiary of the Company, approves a petition seeking its reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any present or future applicable bankruptcy or similar law without such action being dismissed or without all orders or proceedings thereunder affecting the operations or
the business of the Company or any Subsidiary of the Company being stayed, or if a stay of any such order or proceedings is thereafter set aside and the action setting it aside is not timely appealed, (viii) suffer or permit to continue
unstayed and in effect for sixty (60) consecutive days, the appointment, without the consent or acquiescence of the Company or any Subsidiary of the Company of any trustee, receiver or liquidator thereof or of all or any substantial part of the
assets and properties of the Company or any Subsidiary of the Company without such appointment being vacated, (ix) liquidate, wind up or dissolve or suspend its operations other than in the ordinary course of business or other than in
connection with a Acquisition, or (x) take any action to authorize any of the foregoing; 
 (b) a default shall occur in
the observance or performance by the Company of any covenant or agreement contained in this Agreement or the Notes, which default continues for a period of thirty (30) days after the Company receives written notice specifying the default from a
Majority of the Investors; 
 (c) a representation or warranty made herein or in any certificate or other instrument furnished
by or on behalf of the Company in connection with this Agreement or the Notes shall prove to have been false or misleading when made in any material respect; 
 (d) an uncured default or defaults occur under the terms of one or more instruments or agreements evidencing Indebtedness of the Company or any Subsidiary of the Company in an aggregate principal amount
in excess of $100,000; 
 (e) the rendering of a final judgment or judgments against the Company or any Subsidiary of the
Company in an amount of more than $500,000 which remains undischarged or unstayed for a period of sixty (60) days; or 

(f) the Company shall fail to pay any amount (whether for principal, interest or otherwise) that becomes due under the Notes or this
Agreement when such amount becomes due. 
 7.2. Remedies. 

(a) Action in Bankruptcy. If any Event of Default described in Section 7.1(a) shall occur, the outstanding principal
amount of the Notes, and all accrued and unpaid interest thereon, shall automatically become immediately due and payable, without notice, demand or presentment. 

  
 20 

 (b) Action if Other Event of Default. If any Event of Default described in
Sections 7.1(b) through 7.1(f) shall occur for any reason, whether voluntary or involuntary, and be continuing, the Majority of the Investors may, by written notice to the Company, declare all or any portion of the outstanding
principal amount of the Notes, and all accrued and unpaid interest thereon, immediately due and payable, without further notice, demand or presentment. 
 (c) Other Rights and Remedies. In addition to the foregoing and subject to the limitations set forth herein, the holders of the Notes shall be entitled to exercise such other rights and remedies
available at law or in equity. 
 8. Miscellaneous. 

8.1. Survival of Warranties. Unless otherwise set forth in this Agreement, the representations and warranties of the Company and
the Investors contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Advances and shall in no way be affected by any investigation or knowledge of the subject matter thereof made by or on
behalf of the Investors or the Company. 
 8.2. Successors and Assigns. The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. The Investors shall not be entitled to transfer any rights or obligations under this Agreement or
any other Transaction Agreement without the prior written consent of the Company. The Company shall not be entitled to transfer any of its rights or obligations under this Agreement or any other Transaction Agreement without the prior written
consent of the Majority of the Investors. 
 8.3. Governing Law. This Agreement and any controversy arising out of or
relating to this Agreement shall be governed by and construed in accordance with the internal laws of State of California, without regard to conflict of law principles that would result in the application of any law other than the law of the State
of California. 
 8.4. Counterparts; Facsimile. This Agreement may be executed and delivered by facsimile or other
electronic signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
 8.5. Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 

8.6. Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be
deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient, and if not so confirmed, then on the next
business day, (c) five (5) days after having been sent by registered or certified mail, return 

  
 21 

 
receipt requested, postage prepaid, or (d) one business (1) day after deposit with a nationally recognized overnight courier, specifying next business day delivery, with written
verification of receipt. All communications shall be sent to the respective parties at their address as set forth on their signature page hereto or on Exhibit A, or to such e-mail address, facsimile number or address as subsequently modified
by written notice given in accordance with this Section 8.6. 
 8.7. No Finder’s Fees. Each party
represents that it neither is nor will be obligated for any finder’s fee or commission in connection with this transaction. The Investors agree to indemnify and to hold harmless the Company from any liability for any commission or compensation
in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which the Investors or any of its officers, employees, or
representatives is responsible. The Company agrees to indemnify and hold harmless the Investors from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the
costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible. 
 8.8. Fees and Expenses. Each party shall pay its own costs and expenses incurred in connection with the negotiation, execution, delivery and performance of this Agreement and the other Transaction
Agreements. 
 8.9. Attorney’s Fees. If any action at law or in equity (including arbitration) is necessary to
enforce or interpret the terms of any of the Transaction Agreements, the prevailing party shall be entitled to reasonable attorney’s fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

 8.10. Amendments and Waivers. Except as expressly provided herein, neither this Agreement, the Notes nor any term
hereof or thereof may be amended, waived, discharged or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge or termination is sought; provided, however, that the
Majority of the Investors may, with the Company’s written consent, waive, modify or amend any provisions of this Agreement and of the Notes. 
 8.11. Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. 

8.12. Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement,
upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the
extent specifically set forth in such writing. All remedies, 

  
 22 

 
either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative. 
 8.13. Entire Agreement. This Agreement (including the Exhibits hereto) and the other Transaction Agreements constitute the full and entire understanding and agreement between the parties with
respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties are expressly canceled. 
 8.14. Commitment Fee. Promptly after execution this Agreement, the Company shall pay to each Investor (including any subsequent Investors pursuant to Section 1.4) a commitment fee in an amount
equal to two percent (2%) of their respective Commitment Amounts. 
 8.15. Term. This Agreement shall continue in full
force and effect for a term ending on June 30, 2014. 
 [Remainder of Page Intentionally Left Blank] 

  
 23 

 IN WITNESS WHEREOF, the parties have executed this Credit Facility Agreement as of the date
first written above. 
  

			
	 COMPANY:
  

MARRONE BIO INNOVATIONS, INC.

		
	By:	 	/s/ Pamela G. Marrone
	Name: Pamela G. Marrone
	Title: President and CEO
	
	 Address: 2121 Second Street, Suite B-107
 Davis, CA 95616

	email: pmarrone@marronebio.com

 IN WITNESS WHEREOF, the parties have executed this Credit Facility Agreement as of the date
first written above. 
  

			
	INVESTORS:
	
	Saffron Hill Ventures LLP
		
	By:	 	/s/ Ranjeet Bhatia
	Name: Ranjeet Bhatia
	Title: Samel Partner

 IN WITNESS WHEREOF, the parties have executed this Credit Facility Agreement as of the date
first written above. 
  

			
	INVESTORS:
	
	One Earth Capital
		
	By:	 	/s/ Joseph S. Hudson
	Name: Joseph S. Hudson
	Title: M. D.

 IN WITNESS WHEREOF, the parties have executed this Credit Facility Agreement as of the date
first written above. 
  

			
	INVESTORS:
	
	Lawrence A. Hough
		
	By:	 	/s/ Lawrence A. Hough
	Name:
	Title:

 IN WITNESS WHEREOF, the parties have executed this Credit Facility Agreement as of the date
first written above. 
  

			
	INVESTORS:
	
	Arthur Bernot
		
	By:	 	/s/ Arthur Bernot
	Name:
	Title:

 IN WITNESS WHEREOF, the parties have executed this Credit Facility Agreement as of the date
first written above. 
  

			
	INVESTORS:
	
	Martin Panchand
		
	By:	 	/s/ Martin Panchand
	Name: Martin Panchand
	Title:

 IN WITNESS WHEREOF, the parties have executed this Credit Facility Agreement as of the date
first written above. 
  

			
	INVESTORS:
	
	Ueberroth Family Trust
		
	By:	 	/s/ Peter V. Ueberroth – TF
	Name: Peter V. Ueberroth – TF
	Title: Trustee

 IN WITNESS WHEREOF, the parties have executed this Credit Facility Agreement as of the date
first written above. 
  

			
	INVESTORS:
	
	The Whildey Family Revocable Trust, Date of June 17, 1988
		
	By:	 	/s/ Richard Whildey – TF
	Name: Richard Whildey
	Title: Trustee

 IN WITNESS WHEREOF, the parties have executed this Credit Facility Agreement as of the date
first written above. 
  

			
	INVESTORS:
	
	 Timothy & Patrician Fogarty 2011 Trust

		
	By:	 	/s/ Timothy T. Fogarty
	Name: Timothy T. Fogarty
	Title: Trustee

 IN WITNESS WHEREOF, the parties have executed this Credit Facility Agreement as of the date
first written above. 
  

			
	INVESTORS:
	
	Spalding FT Family Trust
		
	By:	 	/s/ Tom Spalding
	Name: Tom Spalding
	Title: Trustee

 EXHIBIT A 
 SCHEDULE OF INVESTORS 
  

					
	Name and Address	  	Commitment
Amount	 
	 Saffron Hill Ventures 2, L.P.

Third Floor, 24 Chiswell Street

London, EC1Y 4YX
 email: rbhatia@saffronhill.com
	  	$	2,000,000	  
	 One Earth Capital, LLC

201 Entrada Drive

Santa Monica, CA 90402

email: joe@oneearthcapital.com
	  	$	750,000	  
	 Stuart Mill Venture Partners, L.P.

Attn: Lawrence Hough

252 North Washington Street

Falls Church, VA 22046

email: lhough@stuartmillcap.com
	  	$	750,000	  
	 Arthur Berndt

P.O. Box 99
 426 Haverick Farm Rd
 Sharon, Utah 05065

email: lhough@stuartmillcap.com
	  	$	250,000	  
	 Martin Panchaud

P.O. Box 68
 CH-1183 Bursins
 Switzerland

email: martin@panchaud.com
	  	$	250,000	  
	 Peter V. Ueberroth and Virginia

M. Ueberroth Trustees of

Ueberroth Family Trust

5 San Joaquin Plaza, Suite 330

Newport Beach, CA 92660

email: ginnyu@cox.net
	  	$	200,000	  
	 The Whilden Family Revocable Trust,

Dated June 17, 1988

106 So. Poinsettia Avenue

Manhattan Beach, CA 90266

email: rdwhildent@gmail.com
	  	$	200,000	  

					
	 Timothy and Patricia Fogarty 2011 Trust,

Dated August 1, 2011

579 S. Morningstar Dr.

Anaheim, CA 92808

email: t.fogarty@sbcglobal.net
	  	$	100,000	  
	 Spalding FT Family Trust

1104 Stovak Ct.
 Reno, NV 89511
 email:
tom@spalding-labs.com
	  	$	200,000	  
	 Lawrence A. Hough

11105 Stuart Mill Ct.

Oakton, VA 22124
 email: lhough@stuartmillcap.com
	  	$	300,000	  
		  	  
	  
	 
		  	$	5,000,000	  

  

 EXHIBIT B 
 FORM OF NOTE  
 THE SECURITIES REPRESENTED BY THIS NOTE, AND ISSUABLE PURSUANT TO
THE TERMS HEREOF, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN, AND WILL BE, ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE EFFECTED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933. 

PROMISSORY NOTE 
  

							
	[$            ] 	  		  		  	[                     , 2013]
		  		  		  	Davis, California

 No. [N-            ] 

FOR VALUE RECEIVED, MARRONE BIO INNOVATIONS, INC., a Delaware corporation (the “Company”), hereby promises to pay to the
order of [            ] (the “Holder”), in lawful money of the United States of America and in immediately available funds, the principal sum of
[$            ], together with accrued and unpaid interest on the unpaid principal balance of this Note from time to time outstanding, each due and payable on the date and in the manner set
forth below. 
 This Promissory Note is one of a series of promissory notes issued by the Company (the “Notes”)
pursuant to the Credit Facility Agreement, dated as of June [        ], 2013, (as the same may from time to time be amended, modified or supplemented or restated, the “Facility Agreement”).
Additional rights of the Holder are set forth in the Facility Agreement. Capitalized terms used herein without definition shall have the meanings given to such terms in the Facility Agreement. 

Principal Repayment. Subject to acceleration as provided herein or in the Facility Agreement, the outstanding principal amount of
this Note and all unpaid accrued interest shall be fully due and payable in cash on June 30, 2014 (the “Maturity Date”). 
 Interest Rate. 
 (a) Interest Rate. The outstanding principal
amount of this Note shall bear interest at a rate equal to ten percent (10%) per annum from the date hereof to (and including) the date on which the entire principal amount of this Note is paid in full, regardless of the commencement of any
bankruptcy or insolvency proceedings against the Company. All accrued and unpaid interest hereunder shall be due and payable on the Maturity Date. Interest shall be calculated on the basis of a 360-day year for the actual number of days elapsed.

 (b) Default Interest. From and after the occurrence of, and during the continuance
of, any Event of Default, the outstanding principal amount of this Note shall bear interest at the interest rate per annum under clause (a) above, plus 4% per annum. 

Place of Payment. All amounts payable hereunder shall be payable at the office of the Holder, unless another place of payment
shall be specified in writing by the Holder. 
 Prepayment. The Company may not prepay this Note in whole or in part
prior to the Maturity Date without the consent of the Majority of the Investors. 
 Application of Payments. Any payments
made by the Company under this Note shall be made on a pro rata basis with payments made under the other Notes issued under the Facility Agreement in proportion to the principal amount each such Note represents in the aggregate principal amount of
the Notes issued thereunder. Payments on this Note shall be applied first to accrued interest, and thereafter to the outstanding principal balance hereof. 
 Waiver. The Company waives presentment and demand for payment, notice of dishonor, protest and notice of protest of this Note, and shall pay all costs of enforcement and collection when incurred,
including, without limitation, reasonable attorneys’ fees, costs and other expenses. 
 Governing Law. This Note and
any controversy arising out of or relating to this Note shall be governed by and construed in accordance with the internal laws of State of California, without regard to conflict of law principles that would result in the application of any law
other than the law of the State of California. 
 Successors and Assigns. Subject to the restrictions on transfer
described in the following sentence, the provisions of this Note shall inure to the benefit of and be binding on any successor to the parties. Neither this Note nor any of the rights, interests or obligations hereunder may be assigned, by operation
of law or otherwise, in whole or in part, by either party without the prior written consent of the other party. 

Amendment. This Note is the Note issued by the Company pursuant to the Facility Agreement. Any term of this Note may be amended or
waived (either generally or in a particular instance and either retroactively or prospectively) only in accordance with [Section 8.10] of the Facility Agreement. No waivers of any term, condition or provisions of this Note, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision. 

Remedies. The Holder shall have the rights and remedies in respect of this Note as set forth in Section 7 of the Facility
Agreement. 
 Usury. In the event any interest is paid on this Note which is deemed to be in excess of the then legal
maximum rate, then that portion of the interest payment representing an amount in excess of the then legal maximum rate shall be deemed a payment of principal and applied against the principal of this Note. 

[Signatures Follow] 

 IN WITNESS WHEREOF, Company has executed this Promissory Note on the date first above
written. 
  

	
	MARRONE BIO INNOVATIONS, INC.
	
	  
	 Name:

Title:

 EXHIBIT C 
 FORM OF WARRANT  
 THIS WARRANT AND THE SHARES OF STOCK WHICH MAY BE PURCHASED
UPON THE EXERCISE OF THIS WARRANT HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH SALE, OFFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF THE ACT AND OF ANY APPLICABLE STATE SECURITIES LAWS UNLESS SOLD PURSUANT TO RULE 144 OF THE ACT. 

MARRONE BIO INNOVATIONS, INC. 
 STOCK PURCHASE WARRANT  
 Void after June
[            ], 2023 
 WARRANT TO PURCHASE SHARES OF STOCK

 THIS CERTIFIES THAT, for value received, and subject to the provisions and upon the terms and conditions hereinafter set
forth below, as of the Exercise Date, [            ] (the “Holder”) is entitled to subscribe for and purchase the number of shares of the fully paid and nonassessable
shares of the capital stock (the “Shares”) of Marrone Bio Innovations, Inc., a Delaware corporation (the “Company”) as set forth below under the definition of Warrant Shares (as may be adjusted pursuant to
Section 3 hereof). The capitalized terms used in this Warrant shall, to the extent not defined where first used, have the meanings given to them in Section 20 of this Warrant. This Warrant is issued by the Company pursuant to the Credit
Facility Agreement dated as of June [__], 2013 (as amended, modified or supplemented, the “Facility Agreement”). 
 Method of Exercise; Payment. 
 Cash Exercise. The purchase rights
represented by this Warrant may be exercised by the Holder, in whole or in part, after the Exercise Date by the surrender of this Warrant (with the notice of exercise form attached hereto as Exhibit A duly executed) at the principal
office of the Company, and by the payment to the Company, by certified, cashier’s or other check acceptable to the Company, of an amount equal to the aggregate Exercise Price of the Shares being purchased. 

Net Issue Exercise. In lieu of exercising this Warrant, the Holder shall have the right to convert this Warrant (or any portion
thereof) by surrender of this Warrant at the principal 

 
office of the Company together with notice of such conversion on the form attached hereto as Exhibit A, in which event the Company shall issue to the Holder a number of Shares
computed using the following formula: 
 X = Y (A-B)  

A 
 Where X =
the number of the Shares to be issued to the Holder. 
 Y = the number of the Shares purchasable under this Warrant in respect
of which the net issue exercise election is made pursuant to this Section 1(b). 
 A = the fair market value of one share
of the Shares. 
 B = the Exercise Price on the date of conversion (as adjusted to the date of such conversion). 

Fair Market Value. For purposes of this Section 1, the per share fair market value of the Shares shall mean: 

(i) If the Company’s Common Stock is publicly traded, the per share fair market value of the Shares shall be the average of the
closing prices of the Common Stock as quoted on the Nasdaq National Market or the principal exchange on which the Common Stock is listed, or if not so listed then the fair market value shall be the average of the closing bid and asked prices of the
Common Stock as published in The Wall Street Journal, in each case for the ten trading days prior to the date of determination of fair market value. 
 (ii) If the Company’s Common Stock is not publicly traded, the per share fair market value of the Shares shall be such fair market value as is determined by a majority of the Board of Directors in
good faith upon a review of relevant factors, including due consideration of Holder’s determination of fair market value, it being further understood that the exercise of this Warrant pursuant to the net exercise provision contained in
Section 1 shall be delayed until such determination is made. 
 Stock Certificates. In the event of any exercise of
the rights represented by this Warrant, certificates for the Shares so purchased shall be delivered to the Holder within a reasonable time. Notwithstanding any delay in the delivery of the certificates for the Shares, the Company agrees that Shares
purchased under this Warrant shall be and are deemed to be issued to the Holder hereof as the record owner of such Shares as of the close of business on the date on which this Warrant shall be been surrendered, the completed exercise form and the
payment of the purchase price has been delivered (or, in the alternative the conversion notice specified in Section 1(b) has been delivered) to the Company. 
 (e) For the avoidance of doubt, once the first of the IPO, the Qualified Financing or the Acquisition occurs, this Warrant shall be exercisable for the Warrant Shares, and at the Exercise Price,
applicable to such first to occur event and not for any other securities or at any other price even in the event of an occurrence of a subsequent such event. 

 Stock Fully Paid. All of the Shares issuable upon the exercise of the rights
represented by this Warrant will, upon issuance and receipt of the Exercise Price therefor, be fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issue thereof. 

Adjustments. The number and kind of securities purchasable upon the exercise of this Warrant and the Exercise Price therefor shall
be subject to adjustment from time to time upon the occurrence of certain events, as follows: 
 Reclassification. In
case of any reclassification or change of the Company’s Common Stock (other than a change in par value, or as a result of a subdivision or combination), the Company shall execute a new Warrant, providing that the holder of this Warrant shall
have the right to exercise such new Warrant, and procure upon such exercise and payment of the same aggregate Exercise Price, in lieu of the shares of the Common Stock theretofore issuable upon exercise of this Warrant, the kind and amount of shares
of stock, other securities, money and property receivable upon such reclassification or change, by a holder of an equivalent number of shares of Common Stock. Such new Warrant shall provide for adjustments which shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Section 3. The provisions of this subsection (a) shall similarly apply to successive reclassifications or changes. 

Stock Splits, Dividends and Combinations. In the event that the Company shall at any time subdivide the outstanding shares of
Common Stock or shall issue a stock dividend on its outstanding shares of Common Stock the number of shares issuable upon exercise of this Warrant immediately prior to such subdivision or to the issuance of such stock dividend shall be
proportionately increased, and the Exercise Price shall be proportionately decreased, and in the event that the Company shall at any time combine the outstanding shares of Common Stock the number of shares issuable upon exercise of this Warrant
immediately prior to such combination shall be proportionately decreased, and the Exercise Price shall be proportionately increased, effective at the close of business on the date of such subdivision, stock dividend or combination, as the case may
be. 
 Notice of Adjustments. Whenever the number of shares purchasable hereunder or the Exercise Price thereof shall be
adjusted pursuant to Section 3 hereof, the Company shall promptly provide notice to the Holder setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was
calculated, and the number and class of shares which may be purchased and the Exercise Price therefor after giving effect to such adjustment. 
 Fractional Shares. This Warrant may not be exercised for fractional shares. In lieu of fractional shares the Company shall make a cash payment therefor based upon the Exercise Price then in effect.

 Representations of the Company. The Company represents to Holder that all corporate actions on the part of the
Company, its officers, directors and shareholders necessary for the sale and issuance of this Warrant and the performance of the Company’s obligations hereunder were taken, or will be taken, prior to and are, or will be, effective as of the
Exercise Date. 

 Representations and Warranties by the Holder. The Holder represents and warrants to
the Company as follows: 
 This Warrant and the Shares issuable upon exercise thereof are being acquired for its own
account, for investment and not with a view to, or for resale in connection with, any distribution or public offering thereof within the meaning of the Securities Act of 1933, as amended (the “Act”). Upon exercise of this Warrant,
the Holder shall, if so requested by the Company, confirm in writing, in a form satisfactory to the Company, that the securities issuable upon exercise of this Warrant are being acquired for investment and not with a view toward distribution or
resale. 
 The Holder understands that the Warrant and the Shares have not been registered under the Act by reason of their
issuance in a transaction exempt from the registration and prospectus delivery requirements of the Act pursuant to Section 4(2) thereof, and that they must be held by the Holder indefinitely, and that the Holder must therefore bear the economic
risk of such investment indefinitely, unless a subsequent disposition thereof is registered under the Act or is exempted from such registration. The Holder further understands that the Shares have not been qualified under any state securities law by
reason of their issuance in a transaction exempt from the qualification requirements thereof, which exemption depends upon, among other things, the bona fide nature of the Holder’s investment intent expressed above. 

The Holder has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of
the purchase of this Warrant and the Shares purchasable pursuant to the terms of this Warrant and of protecting its interests in connection therewith. 
 The Holder is able to bear the economic risk of the purchase of the Shares pursuant to the terms of this Warrant. 
 Restrictive Legend. 
 The Shares (unless registered under the Act) shall be
stamped or imprinted with a legend in substantially the following form: 
 THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT. COPIES OF THE AGREEMENT COVERING THE
PURCHASE OF THESE SHARES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE 

  

 
TO THE SECRETARY OF THE COMPANY AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY. 
 IPO or Acquisition. 
 (a) Upon receipt of a written notice of the
Company’s intention to raise capital by selling shares of Common Stock in an IPO, which notice shall be delivered to Holder at least thirty (30) but not more than ninety (90) days before the anticipated date of the consummation of the
IPO, the Holder shall, within 10 days of receipt of such notice, notify the Company whether or not the Holder will exercise this Warrant as part of the consummation of the IPO. If Holder has elected to exercise this Warrant as provided in this
Section 9 in connection with an IPO and the IPO is not consummated, then Holder’s exercise of this Warrant shall not be effective. 
 (b) Upon receipt of a written notice of the Company’s intention to consummate an Acquisition, which notice shall be delivered to Holder at least thirty (30) but not more than ninety
(90) days before the anticipated date of the consummation of the Acquisition, the Holder shall, within 10 days of receipt of such notice, notify the Company whether or not the Holder will exercise this Warrant as part of the consummation of the
Acquisition. If Holder has elected to exercise this Warrant as provided in this Section 9 in connection with an Acquisition and the Acquisition is not consummated, then Holder’s exercise of this Warrant shall not be effective. 

Rights of Shareholders. No holder of this Warrant shall be entitled, as a Warrant holder, to vote or receive dividends or be
deemed the holder of the Shares or any other securities of the Company which may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the holder of this Warrant, as such, any
of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change of par value, consolidation, merger, conveyance, or otherwise) or, except as provided in Section 11 below, to receive notice of meetings, or to receive dividends or
subscription rights or otherwise until the Warrant shall have been exercised and the Shares purchasable upon the exercise hereof shall have become deliverable, as provided herein. 

Notices of Record Date. In the event: 
 (a) the Company shall declare any dividend or distribution upon any of its capital stock; 
 (b) there shall be any capital reorganization, reclassification of the capital stock of the Company or an Acquisition; or 
 (c) there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; 
 the Company shall give to the Holder of this Warrant written notice of any relevant record, payment, effective and exchange dates and the amount and nature of any dividend, distribution or right. Such
notice shall be given at least 10 days prior to any record date for distribution or voting and also at least 20 days prior to the effective date of the transactions referred to in (b)

 
and (c) above. Failure to so give notice or any defect in any certification or notice given under this Warrant shall not affect the validity or legality of any transaction giving rise
thereto so long as such failure or defect does not result in the termination of Holder’s rights under this Warrant. 

Expiration of Warrant. This Warrant shall expire and shall no longer be exercisable upon the earlier to occur of: 

5:00 p.m., California local time, on June [        ], 2023; and 

An Acquisition, provided that the Company has complied with Section 9(b) in all material respects. 

Notices. All notices and other communications required or permitted hereunder shall be in writing, shall be effective when given,
and shall in any event be deemed to be given upon receipt or, if earlier, (a) five (5) days after deposit with the U.S. Postal Service or other applicable postal service, if delivered by first class mail, postage prepaid, (b) upon
delivery, if delivered by hand, (c) one business day after the business day of deposit with Federal Express or similar overnight courier, freight prepaid or (d) one business day after the business day of facsimile transmission, if
delivered by facsimile transmission with copy by first class mail, postage prepaid, and shall be addressed (i) if to the Holder, at
[                                        ] and
(ii) if to the Company, at the address of its principal corporate offices (attention: President), or at such other address as a party may designate by advance written notice to the other party pursuant to the provisions above. 

“Market Stand-Off” Agreement. Holder agrees not to sell or otherwise transfer or dispose of any Common Stock (or other
securities) of the Company held by Holder during a period of time determined by the Company and its underwriters not to exceed eighteen (18) months following the effective date of the Company’s initial registration statement. If requested
by the Company, Holder agrees to enter into a separate agreement consistent with the foregoing with any underwriter of the Company’s securities. Such agreement shall be in writing in a form reasonably satisfactory to the Company and such
underwriter. The Company may impose stop-transfer instructions with respect to the securities subject to the foregoing restriction until the end of said period. 
 Governing Law. This Warrant and all actions arising out of or in connection with this Agreement shall be governed by and construed in accordance with the internal laws of the State of California,
without regard to the conflicts of law provisions thereof. 
 Exchange of Warrants. On surrender for exchange of this
Warrant, properly endorsed, the Company at its expense, but on payment by the Holder of any applicable transfer taxes, shall issue and deliver to or on the order of the Holder a new Warrant or Warrants of like tenor, for the same aggregate number of
Shares as called for by the Warrant surrendered. 
 Replacement of Warrants. In the case of the loss, theft or
destruction of a Warrant then held by Holder or his assigns, an affidavit of an officer of such Holder stating the loss, theft or destruction, as the case may be, shall constitute evidence satisfactory to the Company and no indemnity or security
shall be required for replacement other than the Holder’s written agreement to indemnify the Company. 

 No Impairment. The Company shall not, by amendment of its Certificate of
Incorporation or bylaws, or through reorganization, consolidation, merger, dissolution, issue or sale of securities, sale of assets or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but shall at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder of this Warrant against impairment.

 Severability. If any term, provision, covenant or restriction of this Warrant is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Warrant shall remain in full force and effect and shall in no way be affected, impaired or invalidated. 

Certain Definitions. As used in this Warrant the following terms shall have the following respective meanings: 

“Acquisition” shall mean (a) the acquisition of the Company by another entity by means of any transaction or series
of related transactions (including, without limitation, any transfer of more than 50% of the voting power of the Company, reorganization, merger or consolidation, but excluding any merger effected exclusively for the purpose of changing the domicile
of the Company); or (b) a sale of all or substantially all of the assets of the Company; unless the Company’s stockholders of record as constituted immediately prior to such acquisition or sale will, immediately after such acquisition or
sale (by virtue of securities issued as consideration for the Company’s acquisition or sale or otherwise) hold at least fifty percent (50%) of the voting power of the surviving or acquiring entity. 

“Exercise Date” shall mean the first to occur of: (a) if this Warrant is to be exercised as part of the
consummation of or at any time after the IPO, the date immediately prior to the consummation of the IPO;(b) if this Warrant is to be exercised as part of the consummation of or at any time after the Qualified Financing, the date immediately prior to
the consummation of the Qualified Financing; and (c) if this Warrant is to be exercised as part of the consummation of an Acquisition as provided in Section 9(b), the date immediately prior to the consummation of the Acquisition.

 “Exercise Price” shall mean the first to occur of: (a) if this Warrant is exercised as part of the
consummation of or at any time after the IPO, the exercise price of a Share will be seventy percent (70%) of the price at which one share of the Company’s Common Stock is sold to the public in the IPO; (b) if this Warrant is exercised
as part of the consummation of or at any time after the Qualfied Financing, the exercise price of a Share will be seventy percent (70%) of the value of one share of Common Stock equivalents (the number of shares of equity securities convertible
into one share of the Company’s Common Stock) sold in the Qualified Financing; and (c) if this Warrant is exercised as part of the consummation of an Acquisition as provided in Section 9(b), the exercise price of a Share will be
seventy percent (70%) of the value of one share of the Company’s Common Stock sold or valued in the Acquisition. 

“IPO” shall mean the Company’s firmly underwritten public offering pursuant to a registration statement under the
Securities Act of 1933, as amended, covering the offer and sale 

 
of Common Stock of the Company for the account of the Company in which the gross cash proceeds to the Company (before underwriting discounts, commissions and fees) are at least $30,000,000.

 “Qualified Financing” shall mean the first equity financing (or substantially concurrent equity financings),
primarily for equity financing purposes, occurring after the date hereof which results in immediately available gross proceeds to the Company, excluding proceeds from any indebtedness of the Company that converts into equity in such financing, of at
least $20 million; provided, that, in order for any such equity financing to constitute a “Qualified Financing,” at least 50% of the amount invested in such equity financing must be made by persons who are not (i) a holder of Common
Stock or Common Stock equivalents (any equity security convertible into or exchangeable for Common Stock and any warrant or option to acquire Common Stock or any such convertible or exchangeable security) of the Company, (ii) an affiliate of
the Company, (iii) any strategic investor or (iv) an affiliate of any of the persons identified in clauses (i), (ii) or (iii) above; and provided, further, that the term Qualified Financing shall excude the
issuance of any “Excluded Securities” of the type specified in clauses (a) through (g) and clauses (i) through (k) of Section 4.6 of the Second Amended and Restated Investor Rights Agreement, dated as of
March 5, 2010, among the Company and the stockholders of the Company party thereto (the “Investor Rights Agreement”). 
 “Warrant Shares” shall mean as to the Holder the first to occur of: (a) if this Warrant is exercised as part of or at any time after the consummation of the IPO, the number of Shares
as is equal to the quotient (rounded to the nearest whole number) obtained by dividing (i) the product obtained by multiplying the original principal amount of such Holder’s Commitment Amount (as defined in the Facility Agreement) by 0.10,
by (ii) seventy percent (70%) of the price at which one share of Common Stock is sold to the public in the IPO; (b) if this Warrant is exercised as part of the consummation of or at any time after the Qualfied Financing, the number of
Shares as is equal to the quotient (rounded to the nearest whole number) obtained by dividing (i) the product obtained by multiplying the original principal amount of such Holder’s Commitment Amount (as defined in the Facility Agreement)
by 0.10, by (ii) seventy percent (70%) of the value of one share of Common Stock equivalents (the number of shares of equity securities convertible into one share of Common Stock) sold in the Qualified Financing; or (c) if this
Warrant is exercised as part of the consummation of an Acquisition as provided in Section 9(b), the number of Shares as is equal to the quotient (rounded to the nearest whole number) obtained by dividing (i) the product obtained by
multiplying the original principal amount of such Holder’s Commitment Amount (as defined in the Facility Agreement) by 0.10, by (ii) seventy percent (70%) of the value of one share of Common Stock sold or valued in the Acquisition.

 Issued as of June [        ], 2013. 

[Signature page follows] 

 [Signature page to Stock Purchase Warrant] 

 

			
	MARRONE BIO INNOVATIONS, INC.
		
	By:	 	 
	Name:	 	Pamela G. Marrone
	Title:	 	President and CEO

 EXHIBIT A 

NOTICE OF EXERCISE 
 TO:     Marrone Bio Innovations, Inc. 

    2121 Second Street, Ste. B-107 

    Davis, CA 95618 

    Attention: President 
 1. The undersigned hereby elects to purchase             shares of Marrone Bio Innovations, Inc. pursuant to the terms of the attached Warrant.

 2. Method of Exercise (Please initial the applicable blank): 

            The undersigned elects to exercise the attached
Warrant by means of a cash payment, and tenders herewith payment in full for the purchase price of the Shares being purchased, together with all applicable transfer taxes, if any. 

            The undersigned elects to exercise the attached
Warrant by means of the net exercise provisions of Section 1(b) of the Warrant. 
 3. Please issue a certificate or
certificates representing said Shares in the name of the undersigned or in such other name as is specified below: 
  

 
 (Name)

  
  

 
  

(Address) 
 4.
The undersigned hereby represents and warrants that the aforesaid Shares are being acquired for the account of the undersigned for investment and not with a view to, or for resale, in connection with the distribution thereof, and that the
undersigned has no present intention of distributing or reselling such shares and all representations and warranties of the undersigned set forth in Section 7 of the attached Warrant are true and correct as of the date hereof. 

 

							
		 		 	(Signature)
				
		 		 	Title:	 	 
		 		 		 	
	(Date)AMENDED AND RESTATED EMPLOYMENT
AGREEMENT 

     THIS AMENDED
AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) dated as of June 30, 2013,
amends and restates the Amended and Restated Employment Agreement, dated as of
March 11, 2011, among Krispy Kreme Doughnut Corporation, a North Carolina
corporation (“KKDC”), Krispy Kreme Doughnuts, Inc., a North Carolina corporation (the
“Company”
and, together with KKDC, the “Companies”), and James H. Morgan (the
“Executive”). 

    
The parties hereto agree as follows: 

ARTICLE 1 

DEFINITIONS 

    
SECTION 1.01 Definitions. For purposes of this
Agreement, in addition to other terms defined herein, the following terms have
the meanings set forth below: 

    
“Average Annual Bonus” means the average of the annual cash bonuses paid, if any,
by the Company to the Executive for the three most recently completed fiscal
years prior to the fiscal year during which the Executive terminates
employment.

    
“Base Salary” has the meaning set forth in Section 4.01. 

    
“Board” means the Board of Directors of the Company. 

    
“Cause” shall mean (a) the Executive’s failure or refusal to perform the
Executive’s lawful and proper duties hereunder (other than as a result of total
or partial incapacity due to physical or mental illness or a court or
governmental order), (b) the Executive’s conviction of or plea of
nolo contendere to any felony (other than a traffic infraction), (c) an act or acts on
the Executive’s part constituting fraud, theft or embezzlement or that otherwise
constitutes a felony under the laws of the United States or any state thereof
which results or was intended to result directly or indirectly in gain or
personal enrichment by the Executive at the expense of the Companies, or (d) the
Executive’s willful violation of any material provision of the code of ethics of
the Companies applicable to the Executive. In the case of any item described in
the previous sentence, the Executive shall be given written notice of the
alleged act or omission constituting Cause, which notice shall set forth in
reasonable detail the reason or reasons that the Board believes the Executive is
to be terminated for Cause, including any act or omission that is the basis for
the decision to terminate the Executive. In the case of an act or omission
described in clause (a) or (d) of the definition of Cause, (i) if reasonably
capable of being cured, the Executive shall be given 30 days from the date of
such notice to effect a cure of such alleged act or omission constituting
“Cause” which, upon such cure to the reasonable satisfaction of the Board, shall
no longer constitute a basis for Cause, and (ii) the Executive shall be given an
opportunity to make a presentation to the Board (accompanied by counsel or other
representative, if the Executive so desires) at a meeting of the Board held
promptly following such 30-day cure period if the Board intends to determine
that no cure has occurred. At or following such meeting, the Board shall
determine whether or not to terminate the Executive for “Cause” and shall notify
the Executive in writing of its determination and the effective date of such
termination (which date may be no earlier than the date of the aforementioned
Board meeting). 

     “Change in Control” means any of the following events: 

    
(a) the acquisition by any Person of “beneficial ownership” (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%)
or more of the combined voting power of the Company’s then outstanding voting
securities; provided, however, that a Change in Control shall not be deemed to
occur solely because fifty percent (50%) or more of the combined voting power of
the Company’s then outstanding securities is acquired by (i) a trustee or other
fiduciary holding securities under one or more employee benefit plans maintained
by the Company or any of its Subsidiaries, or (ii) any Person, which,
immediately prior to such acquisition, is owned directly or indirectly by the
shareholders of the Company in the same proportion as their ownership of stock
in the Company immediately prior to such acquisition; 

    
(b) the consummation of (i) a merger or consolidation involving the Company
if the shareholders of the Company, immediately before such merger or
consolidation, do not, as a result of such merger or consolidation, own,
directly or indirectly, more than fifty percent (50%) of the combined voting
power of the then outstanding voting securities of the corporation resulting
from such merger or consolidation in substantially the same proportion as their
ownership of the combined voting power of the voting securities of the Company
outstanding immediately before such merger or consolidation, or (ii) a sale or
other disposition of all or substantially all of the assets of the Company other
than to a Person which is owned directly or indirectly by the shareholders of
the Company in the same proportion as their ownership of stock in the Company;

    
(c) a
change in the composition of the Board such that the individuals who, as of the
Effective Date, constitute the Board (such Board shall be hereinafter referred
to as the “Incumbent Board”) cease for any reason to constitute at least a majority of
the Board; provided, however, for purposes of this definition, that any
individual who becomes a member of the Board subsequent to the Effective Date
whose election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of those individuals who are members
of the Board and who were also members of the Incumbent Board (or deemed to be
such pursuant to this proviso) shall be considered as though such individual
were a member of the Incumbent Board; provided further, however, that any such
individual whose initial assumption of office occurs as a result of either an
actual or threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act, including any successor to
such Rule), or other actual or threatened solicitation or proxies or consents by
or on behalf of a Person other than the Board, shall not be so considered as a
member of the Incumbent Board; or 

    
(d) the approval by shareholders of the Company of a complete liquidation or
dissolution of the Company; 

provided, however, that, if and to the extent required under Section 409A of
the Code or any regulations and guidelines promulgated thereunder (collectively,
“Section 409A”), an event will be treated as a “Change in Control” for purposes of
this Agreement only if it is also a “change in control event” (as defined in
Treas. Reg. Section 1.409A-3(i)(5)) with respect to the Company. 

    
“Code” means the Internal Revenue Code of 1986, as amended. 

    
“Confidential
Information” means information that is not
generally known to the public and that was or is used, developed or obtained by
the Company or its Subsidiaries in connection with the business of the Company
and its Subsidiaries and which constitutes trade secrets or information which
they have attempted to protect, which may include, but is not limited to, trade
“know-how”, customer information, supplier information, cost and pricing
information, marketing and sales techniques, strategies and programs, computer
programs and software and financial information. It shall not include
information (a) required to be disclosed by court or administrative order; (b)
lawfully obtainable from other sources or which is in the public domain through
no fault of the Executive; or (c) the disclosure of which is consented to in
writing by the Company. 

2 

     “Date of Termination” has the meaning set forth in Section 5.07. 

    
“Effective Date” has the meaning set forth in Section 2.01. 

    
“Employment Period” has the meaning set forth in Section 2.01. 

    
“Exchange Act” means the Securities Exchange Act of 1934, as amended.

    
“Good Reason” shall mean the occurrence of any of the following without the
Executive’s consent: (a) the failure of the Companies to pay any material amount
of compensation to the Executive when due hereunder; (b) the Executive no longer
serves as (X) the most senior executive officer (that is, the Chief Executive
Officer), or (Y) both the most senior executive officer and the executive
chairman of the Board or board (as the case may be), provided, however, that it shall not
constitute an event of Good Reason if the Executive no longer serves as the most
senior executive officer but he serves as executive chairman (that is, an
employee serving as chair) of the Board, or board, as the case may be, of (i)
both the Company and KKDC, or (ii) in the event of a merger, consolidation or
other business combination involving the Company, the successor to the Company’s
business or assets or (iii) if all or substantially all of the voting stock of
the Company is held by another company, such company; (c) the assignment to the
Executive of any duties or responsibilities materially inconsistent with the
Executive’s status under clause (b) of this sentence or his failure at any time
to report directly to the board of directors of the applicable company described
in such clause (b); (d) the failure of the Executive to be appointed or elected
(or reelected) to the Board, other than due to Executive’s decision not to stand
for election or reelection, or his removal from the Board not for Cause and not
due to his Permanent Disability or death; (e) any failure by the Companies to
maintain the Executive’s principal place of employment and the executive offices
of the Companies within 25 miles of the Winston-Salem, North Carolina area; or
(f) any material breach by the Companies of this Agreement; provided, however,
that for any of the foregoing to constitute Good Reason, the Executive must
provide written notification of his intention to resign within 60 days after the
Executive knows or has reason to know of the occurrence of any such event, and
the Companies shall have 30 days (10 days in the case of a material breach
related to payment of any amounts due hereunder) from the date of receipt of
such notice to effect a cure of the condition constituting Good Reason, and,
upon cure thereof by the Companies, such event shall no longer constitute Good
Reason.

    
“Notice of Termination” has the meaning set forth in Section 5.06. 

    
“Permanent Disability” means the Executive becomes permanently disabled within the
meaning of the long-term disability plan of the Companies applicable to the
Executive, and the Executive commences to receive benefits under such plan.

    
“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, an estate, a trust, a joint
venture, an unincorporated organization or a governmental entity or any
department, agency or political subdivision thereof. 

    
“Reimbursable Expenses” has the meaning set forth in Section 4.04. 

    
“Securities Act” means the Securities Act of 1933, as amended. 

3 

     “Subsidiary” or “Subsidiaries” means, with respect to any Person, any corporation,
partnership, limited liability company, association or other business entity of
which (a) if a corporation, 50 percent or more of the total voting power of
shares of stock entitled (without regard to the occurrence of any contingency)
to vote in the election of directors, managers or trustees thereof is at the
time owned or controlled, directly or indirectly, by that Person or one or more
of the other Subsidiaries of that Person or combination thereof; or (b) if a
partnership, limited liability company, association or other business entity, 50
percent or more of the partnership or other similar ownership interests thereof
are at the time owned or controlled, directly or indirectly, by any Person or
one or more Subsidiaries of that Person or a combination thereof. For purposes
of this definition, a Person or Persons will be deemed to have a 50 percent or
more ownership interest in a partnership, limited liability company, association
or other business entity if such Person or Persons are allocated 50 percent or
more of partnership, limited liability company, association or other business
entity gains or losses or control the managing director or member or general
partner of such partnership, limited liability company, association or other
business entity. 

ARTICLE 2 

EMPLOYMENT 

    
SECTION 2.01 Employment. The Companies shall employ
(or continue to employ) the Executive, and the Executive shall accept employment
(or continue to accept employment) with the Companies, upon the terms and
conditions set forth in this Agreement for the period beginning June 30, 2013
(the “Effective Date”) and ending as provided in Section 5.01 (the
“Employment Period”). It is acknowledged that the Executive began service to the Companies
prior to the date of this Agreement, with continued service contingent upon the
preparation of this Agreement in a form mutually acceptable to both the
Executive and the Companies. 

ARTICLE 3 

POSITION AND DUTIES 

    
SECTION 3.01 Position and
Duties. During the Employment Period, the
Executive shall serve as (i) Chief Executive Officer and President of the
Company reporting directly to the Board and shall be the Company’s most senior
executive officer, and (ii) Chief Executive Officer and President of KKDC
reporting directly to the board of KKDC and shall be KKDC’s most senior
executive officer. The Executive shall also serve as Chairman of the Board of
the Company and Chairman of the board of KKDC for as long as the Board or KKDC
board, as the case may be, desires. The Executive shall have such
responsibilities, powers and duties as may from time to time be prescribed by
the Board; provided that such responsibilities, powers and duties are substantially
consistent with those customarily assigned to individuals serving in the most
senior executive officer position at comparable companies or as may be
reasonably required for the proper conduct of the business of the Companies.
During the Employment Period, the Executive shall devote substantially all of
his working time and efforts to the business and affairs of the Company and its
Subsidiaries. The Executive shall not directly or indirectly render any services
of a business, commercial or professional nature to any other person or
organization not related to the business of the Company or its Subsidiaries,
whether for compensation or otherwise, without the prior approval of the Board;
provided, however, the Executive may serve on the board of directors of one
for-profit corporation with the prior approval of the Board, which will not be
unreasonably withheld, and the Executive may serve as a director of
not-for-profit organizations or engage in other charitable, civic or educational
activities, so long as the activities described in this proviso do not interfere
with the Executive’s performance of his duties hereunder or result in any
conflict of interest with the Companies. 

4 

ARTICLE 4 

BASE SALARY AND BENEFITS 

     SECTION 4.01
Base Salary. During the Employment Period, the Executive will receive base salary
from the Companies equal to $742,630
per annum (the “Base Salary”). The Base Salary will be
payable in accordance with the normal payroll practices of the Companies.
Annually during the Employment Period the Company shall review with the
Executive his job performance and compensation, and if deemed appropriate by the
Board or its Compensation Committee, in their discretion, the Executive’s Base
Salary may be increased but not decreased. After any such increase, the term
“Base Salary” as used in this Agreement will thereafter refer to the increased
amount. The Executive shall not receive additional compensation for service as a
Director on the Company’s Board (other than reimbursement of reasonable
expenses). 

    
SECTION 4.02 Bonuses. In addition to Base Salary, the Executive shall be eligible
to be considered for an annual bonus, and the Executive’s annual target bonus
shall be equal to 100% of Base Salary. The Compensation Committee of the Board
and the Board shall set targets with respect to and otherwise determine the
Executive’s bonus in accordance with the Company’s then current incentive
plans.

    
SECTION 4.03 Benefits. During the Employment Period, the Executive shall be entitled
to participate in all employee benefit, perquisite and fringe benefit plans and
arrangements made available by the Companies to their executives and key
management employees upon the terms and subject to the conditions set forth in
the applicable plan or arrangement. Such benefits shall include medical, life
and disability insurance provided in accordance with the policies of the
Companies. The Executive also shall be provided an executive allowance of $2,500
per month, and the Executive shall be entitled to four weeks of paid vacation
annually during the Employment Period. 

    
SECTION 4.04 Expenses. The Companies shall reimburse the Executive for all
reasonable expenses incurred by him in the course of performing his duties under
this Agreement which are consistent with the Companies’ policies in effect from
time to time with respect to travel, entertainment and other business expenses
(“Reimbursable Expenses”), subject to the Companies’ requirements with respect to
reporting and documentation of expenses and the provisions of Section 13.14.

    
SECTION 4.05 Equity
Awards. On or prior to April 30, 2014, and
subject to the Executive’s continued employment through the grant date, the
Company shall grant to the Executive an equity award (the “2014 Equity Award”) with an
aggregate fair value of $1,000,000, as determined on or as close in time as
practicable to the grant date. The Compensation Committee shall have discretion
to determine the type or types of such equity awards, which may include a
combination of awards. The 2014 Equity Award shall be subject to such
performance and/or service vesting and other criteria as may be determined by
the Compensation Committee and shall be granted under, and subject to the terms
of, the Company’s 2012 Stock Incentive Plan or other applicable stock plan (the
“Stock Plan”) and applicable award agreement(s). The Executive agrees and
acknowledges that the future grant of equity awards (other than the 2014 Equity
Award), if any, and the terms of any such equity awards shall be subject to the
discretion of the Compensation Committee of the Board and the Stock Plan and
applicable award agreement(s). 

    
SECTION 4.06 Compliance with
Compensation and Equity Policies. The
Executive agrees to comply with the Company’s Equity Retention Policy,
Compensation Recovery Policy and Stock Ownership Guidelines, each as in effect
from time to time, with respect to annual or long-term incentive or other
compensation, as applicable, including the compensation provided pursuant to
this Agreement. The terms of the Company’s Equity Retention Policy, Compensation
Recovery Policy and Stock Ownership Guidelines, each as in effect from time to
time, are hereby incorporated by reference into this Agreement. 

5 

ARTICLE 5 

TERM AND TERMINATION 

     SECTION 5.01
Term. The
Employment Period will terminate on June 30, 2016 unless sooner terminated as
hereinafter provided. 

    
SECTION 5.02 Termination Due to Death
or Permanent Disability. If the Employment
Period shall be terminated due to death or Permanent Disability of the
Executive, the Executive (or his estate or legal representative) shall be
entitled solely to the following: (a) Base Salary through the Date of
Termination (paid on the Companies’ normal payroll payment date); (b) any vested
stock options will remain exercisable for the earlier of two years after the
Date of Termination or the end of the applicable option period (subject to the
Companies’ discretion to cash out these awards in connection with a Change in
Control), and (c) medical benefits as provided in Section 5.05 below. The
Executive’s entitlements under any other benefit plan or program shall be as
determined thereunder. In addition, promptly following any such termination, the
Executive (or his estate or legal representative) shall be reimbursed for all
Reimbursable Expenses incurred by the Executive prior to such termination in
accordance with Section 4.04 and Section 13.14 herein.

    
SECTION 5.03 Termination for Good
Reason or Without Cause. Except as otherwise
set forth in Section 5.09 below, if the Employment Period shall be terminated
(a) by the Executive for Good Reason, or (b) by the Companies not for Cause
(such termination, a “Qualifying
Termination”), provided the Executive has
executed, on or before the date that is fifty (50) days following the date of
his termination of employment, an irrevocable (except to the extent required by
law to be revocable) general release of claims in the form attached hereto as
Exhibit A, and does not revoke such release prior to the end of the seven-day
statutory revocation period, the Executive shall be entitled solely to the
following: (i) Base Salary through the Date of Termination, paid on the
Companies’ normal payroll payment date; (ii) an amount equal to the lesser of
(A) two times the sum of Base Salary and the Executive’s Average Annual Bonus
for the year of termination (or the Base Salary or Average Annual Bonus for the
prior year if reduction of the Executive’s Base Salary or target annual bonus,
or both, was the event giving rise to Good Reason) or (B) the “Remaining Contract Value”
(as defined below), provided that, the Executive shall be entitled to any unpaid
amounts only if the Executive has not breached and does not breach the
provisions of Sections 6.01, 7.01, 8.01 or Article 9 below; (iii) a bonus for
the year of termination of employment equal to the Executive’s actual annual
bonus for such year pro rated for the number of full months during the bonus
year prior to the Date of Termination, to be paid, subject to Section 13.14
below (including but not limited to any delay in payment due to application of
the Delay Period), sixty (60) days following such termination of employment;
(iv) notwithstanding anything to the contrary in any equity award agreement, all
of the restricted stock, restricted stock units and stock options held by the
Executive shall vest and/or become exercisable on the Date of Termination; and
(v) medical benefits as provided in Section 5.05 below. For the purposes herein,
the “Remaining Contract Value” shall mean the aggregate amount of the unpaid Base Salary
and bonus for the remainder of the term of the Employment Period following the
date of the Executive’s termination of employment (that is, the unpaid balance
of Base Salary and bonus), treating for this purpose the amount of bonus for any
remaining year(s) of the Employment Period as being equal to the Average Annual
Bonus as determined at the time of the Executive’s termination of
employment. Further, except as otherwise set forth in Section 5.09 below or herein,
the provisions of this Section 5.03, including the rights and obligations of the
Executive stated herein, apply if (A) the Qualifying Termination occurs on or
within two (2) years following a Change in Control or (B) on or within two (2)
years following a Change in Control of the Company or following the Company’s
shares ceasing to be publicly traded, the Executive terminates his employment
because of the failure of the Executive to be both a member of the board of
directors and chief executive officer of the successor or acquiring entity
(including the ultimate parent of such entity); provided, however, that the Base
Salary and bonus payments provided for in clause (ii) of the first sentence in
this Section 5.03 shall be equal to two times the Executive’s Base Salary and
Average Annual Bonus and shall not be determined by reference to the Remaining
Contract Value. The Executive’s entitlements under any other benefit plan or
program shall be as determined thereunder, except that duplicative severance
benefits shall not be payable under any other plan or program. Amounts described
in clause (ii) above will be paid, subject to Section 13.14 below (including,
but not limited to, any delay in payment due to application of the Delay
Period), in twelve (12) equal monthly installments, the first two (2) of which
shall be paid on the date that is two (2) months following the Date of
Termination and the next ten (10) of which will be paid in ten (10) equal
monthly installments commencing on the date that is three (3) months following
the Date of Termination and continuing on each of the next nine (9) monthly
anniversaries of the Date of Termination. In addition, the Executive shall be
reimbursed for all Reimbursable Expenses incurred by the Executive prior to such
termination in accordance with Section 4.04 and Section 13.14 herein.

6 

     SECTION 5.04
Termination for Cause or Other Than Good
Reason. If the Employment Period shall be
terminated (a) by the Companies for Cause, or (b) as a result of the Executive’s
resignation or leaving of his employment other than for Good Reason, the
Executive shall be entitled to receive solely Base Salary through the Date of
Termination (paid on the Companies’ normal payroll payment date) and
reimbursement of all Reimbursable Expenses incurred by the Executive prior to
such termination (in accordance with Section 4.04 and Section 13.14 herein). The
Executive’s rights under the benefit plans and programs shall be as determined
thereunder. A voluntary resignation by the Executive shall not be deemed to be a
breach of this Agreement.

    
SECTION 5.05 Benefits. If the Employment Period is terminated as a result of a
termination of employment as specified in Section 5.02, 5.03 or 5.09, the
Executive and his covered dependents shall continue to receive medical insurance
coverage benefits from the Companies, with the same contribution toward such
coverage from the Executive or his estate as was given during the Employment
Period, for a period equal to the lesser of (a) 18 months following the Date of
Termination, or (b) until the Executive is provided by another employer with
benefits substantially comparable to the benefits provided by the Companies’
medical plan. Furthermore, in the event of the Executive’s Permanent Disability,
insurance benefits will continue under the Companies’ long term disability plan
in accordance with its terms. 

    
SECTION 5.06 Notice of
Termination. Any termination by the Companies
for Permanent Disability or Cause or without Cause or by the Executive with or
without Good Reason shall be communicated by written Notice of Termination to
the other party hereto. For purposes of this Agreement, a “Notice of Termination”
shall mean a notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of employment under
the provision indicated. 

    
SECTION 5.07 Date of
Termination. “Date of Termination” shall mean (a) if
the Employment Period is terminated as a result of a Permanent Disability, five
days after a Notice of Termination is given, (b) if the Employment Period is
terminated as a result of his death, the date of his death, (c) if the
Employment Period terminates due to expiration of the term of this Agreement,
the date the term expires, and (d) if the Employment Period is terminated for
any other reason, the later of the date of the Notice of Termination and the end
of any applicable correction period. 

    
SECTION 5.08 No Duty to
Mitigate. The Executive shall have no duty to
seek new employment or other duty to mitigate following a termination of
employment as described in this Article 5, and no compensation or benefits
described in this Article 5 shall be subject to reduction or offset on account
of any subsequent compensation, other than as provided in Section 5.05.

7 

     SECTION 5.09
Change in Control. All stock options, restricted stock and restricted stock units held by
the Executive will become vested in full upon a Change in Control;
provided,
however,
that, the vesting of the restricted stock, restricted stock units and stock
options held by the Executive shall not be accelerated where (a) the Executive
continues as the chief executive officer of the parent corporation of the
parent/subsidiary affiliated group that includes the Companies (the
“Surviving Entity”), (b) either the Company’s common stock remains outstanding or
replacement equity awards are granted by the Surviving Entity, (c) the terms of
this Agreement are expressly assumed and continued by the Surviving Entity, and
(d) the Executive has not elected to properly terminate this Agreement for Good
Reason (and the terms of such equity award agreements are hereby deemed amended
to conform with this Section 5.09).

    
SECTION 5.10 Separation From Service.
Notwithstanding any provision of this
Agreement to the contrary, for purposes of Section 5.03, the Executive will be
deemed to have terminated his employment on the date of his “separation from
service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the
Companies, the Employment Period will be deemed to have ended on the date of his
“separation from service” with the Companies, and the Date of Termination will
be deemed to be the date of his “separation from service” with the Companies if
and to the extent required under Section 409A. Further, to the extent required
under Section 409A, references to “termination of employment” or words of
similar import shall be deemed to refer to, and shall be defined in accordance
with, a “separation from service” as defined under Section 409A.

ARTICLE 6 

CONFIDENTIAL INFORMATION 

    
SECTION 6.01 Nondisclosure and Nonuse
of Confidential Information. The Executive
will not disclose or use at any time during or after the Employment Period any
Confidential Information of which the Executive is or becomes aware, whether or
not such information is developed by him, except to the extent he reasonably
believes that such disclosure or use is directly related to and appropriate in
connection with the Executive’s performance of duties assigned to the Executive
pursuant to this Agreement. Under all circumstances and at all times, the
Executive will take all appropriate steps to safeguard Confidential Information
in his possession and to protect it against disclosure, misuse, espionage, loss
and theft. The Executive also agrees to execute and comply with such other
confidentiality agreements or provisions as required of executive officers of
the Company. 

ARTICLE 7 

INTELLECTUAL PROPERTY 

    
SECTION 7.01 Ownership of Intellectual
Property. In the event that the Executive as
part of his activities on behalf of the Companies generates, authors or
contributes to any invention, design, new development, device, product, method
of process (whether or not patentable or reduced to practice or comprising
Confidential Information), any copyrightable work (whether or not comprising
Confidential Information) or any other form of Confidential Information relating
directly or indirectly to the business of the Company or its Subsidiaries as now
or hereafter conducted (collectively, “Intellectual Property”), the Executive
acknowledges that such Intellectual Property is the sole and exclusive property
of the Company and its Subsidiaries and hereby assigns all right, title and
interest in and to such Intellectual Property to the Company or its designated
Subsidiary. Any copyrightable work prepared in whole or in part by the Executive during the
Employment Period will be deemed “a work made for hire” under Section 201(b) of
the Copyright Act of 1976, as amended, and the Company or its designated
Subsidiary will own all of the rights comprised in the copyright therein. The
Executive will promptly and fully disclose all Intellectual Property and will
cooperate with the Companies to protect their interests in and rights to such
Intellectual Property (including providing reasonable assistance in securing
patent protection and copyright registrations and executing all documents as
reasonably requested by the Companies, whether such requests occur prior to or
after termination of the Executive’s employment hereunder). 

8 

ARTICLE 8 

DELIVERY OF MATERIALS UPON TERMINATION
OF EMPLOYMENT 

     SECTION 8.01
Delivery of Materials upon Termination of
Employment. As requested by the Companies
from time to time, and upon the termination of the Executive’s employment with
the Companies for any reason, the Executive will promptly deliver to the
Companies all property of the Company or its Subsidiaries, including, without
limitation, all copies and embodiments, in whatever form or medium, of all
Confidential Information in the Executive’s possession or within his control
(including written records, notes, photographs, manuals, notebooks,
documentation, program listings, flow charts, magnetic media, disks, diskettes,
tapes and all other materials containing any Confidential Information)
irrespective of the location or form of such material and, if requested by the
Companies, will provide the Companies with written confirmation that to the best
of his knowledge all such materials have been delivered to the Companies or
destroyed. 

ARTICLE 9 

NON-COMPETITION AND NONSOLICITATION

    
SECTION 9.01 Noncompetition. The Executive
acknowledges that, during his employment with the Companies, he will become
familiar with trade secrets and other Confidential Information concerning the
Company and its Subsidiaries and his services will be of special, unique and
extraordinary value to the Companies. In addition, the Executive hereby agrees
that at any time during the Noncompetition Period (as defined below), he will
not own, manage, control, consult with, or become employed by or render services
in an executive or management capacity to any business listed on Exhibit B
hereto in the Territory. During the Noncompetition Period, the Company shall
have the right to, in good faith, add other entities which are in substantial
competition with the Companies to the list of businesses on Exhibit B, subject
to the consent of the Executive which shall not be unreasonably withheld. It
shall not be considered a violation of this Section 9.01 for the Executive to be
a passive owner of not more than 2% of the outstanding stock of any class of any
corporation which is publicly traded, so long as the Executive has no active
participation in the business of such corporation.

    
SECTION 9.02 Nonsolicitation. The Executive hereby
agrees that (a) during the Nonsolicitation Period (as defined below), the
Executive will not, directly or indirectly through another Person, induce or
attempt to induce any employee of the Company or its Subsidiaries to leave the
employ of the Company or its Subsidiaries, or in any way interfere with the
relationship between the Company or its Subsidiaries and any person employed by
them at any time during such Nonsolicitation Period, and (b) during the
Nonsolicitation Period, the Executive will not induce or attempt to induce any
customer, supplier, client or other business relation of the Company or its
Subsidiaries to cease doing business with or reduce the volume of business done
with the Company or its Subsidiaries.

9 

     SECTION 9.03
Definitions. It is agreed that the “Territory,” for purposes of this
Article 9, shall mean: 

    
(a) The entire United States and any other country where the Company or any
of its Subsidiaries, joint venturers, franchisees or affiliates has operated a
retail facility at which the Companies’ products have been sold at any time in
the one-year period ending on the last day of the Executive’s employment with
the Companies; 

    
(b) In
the event that the preceding clause shall be determined by judicial action to
define too broad a territory to be enforceable, then “Territory” shall mean the
entire United States; 

    
(c) In
the event that the preceding clauses shall be determined by judicial action to
define too broad a territory to be enforceable, then “Territory” shall mean the
states in the United States where the Company or any of its Subsidiaries, joint
venturers, franchisees or affiliates has operated a retail facility at which the
Companies’ products have been sold at any time in the one-year period ending on
the last day of Executive’s employment with the Companies;

    
(d) In
the event that the preceding clauses shall be determined by judicial action to
define too broad a territory to be enforceable, then “Territory” shall mean the
area that includes all of the areas that are within a 50-mile radius of any
retail store location in the United States at which the Companies’ products have
been sold at any time in the one-year period ending on the last day of the
Executive’s employment with the Companies; and 

    
(e) In
the event that the preceding clauses shall be determined by judicial action to
define too broad a territory to be enforceable, then “Territory” shall mean the
entire state of North Carolina. 

    
It is also agreed that “Noncompetition
Period,” for purposes hereof, shall mean:

    
(a) The Employment Period and a period ending one year after the Date of
Termination; and 

    
(b) In
the event that the preceding clause shall be determined by judicial action to
define too long a period to be enforceable, “Noncompetition Period” shall mean
the Employment Period and a period ending six months after the Date of
Termination. 

    
It is also agreed that “Nonsolicitation
Period,” for purposes hereof, shall mean:

    
(a) The Employment Period and a period ending two years after the Date of
Termination; 

    
(b) In
the event that the preceding clause shall be determined by judicial action to
define too long a period to be enforceable, “Nonsolicitation Period” shall mean
the Employment Period and a period ending eighteen months after the Date of
Termination; 

    
(c) In
the event that the preceding clauses shall be determined by judicial action to
define too long a period to be enforceable, “Nonsolicitation Period” shall mean
the Employment Period and a period ending one year after the Date of
Termination; and 

    
(d) In
the event that the preceding clauses shall be determined by judicial action to
define too long a period to be enforceable, “Nonsolicitation Period” shall mean
the Employment Period and a period ending six months after the Date of
Termination. 

10 

ARTICLE 10 

EQUITABLE RELIEF 

     SECTION 10.01
Equitable Relief. The Executive acknowledges that (a) the covenants contained herein are
reasonable, (b) the Executive’s services are unique, and (c) a breach or
threatened breach by him of any of his covenants and agreements with the
Companies contained in Sections 6.01, 7.01, 8.01 or Article 9 could cause
irreparable harm to the Companies for which they would have no adequate remedy
at law. Accordingly, and in addition to any remedies which the Companies may
have at law, in the event of an actual or threatened breach by the Executive of
his covenants and agreements contained in Sections 6.01, 7.01, 8.01 or Article
9, the Companies shall have the absolute right to apply to any court of
competent jurisdiction for such injunctive or other equitable relief, without
the necessity to post bond, as such court may deem necessary or appropriate in
the circumstances. 

ARTICLE 11 

EXECUTIVE REPRESENTATION AND
INDEMNIFICATION 

    
SECTION 11.01 Executive
Representation. The Executive hereby
represents and warrants to the Companies that (a) the execution, delivery and
performance of this Agreement by the Executive does not and will not conflict
with, breach, violate or cause a default under any contract, agreement,
instrument, order, judgment or decree to which the Executive is a party or by
which he is bound, (b) the Executive is not a party to or bound by any
employment agreement, noncompetition agreement or confidentiality agreement with
any other Person, and (c) upon the execution and delivery of this Agreement by
the Companies, this Agreement will be the valid and binding obligation of the
Executive, enforceable in accordance with its terms. Notwithstanding Section
11.02 below, in the event that any action is brought against the Executive
involving any breach of any employment agreement, noncompetition agreement or
confidentiality agreement with any other Person, the Executive shall bear his
own costs incurred in defending such action, including but not limited to court
fees, arbitration costs, mediation costs, attorneys’ fees and disbursements.

    
SECTION 11.02 General
Indemnification. The Companies, jointly and
severally, agree that if the Executive is made a party, or is threatened to be
made a party, to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (each, a “Proceeding”), by reason of the fact
that he is or was a director, officer or employee of the Company or any of its
Subsidiaries or is or was serving at the request of the Company or any of its
Subsidiaries as a director, officer, member, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, whether or not the basis of such
Proceeding is the Executive’s alleged action in an official capacity while
serving as a director, officer, member, employee or agent, the Executive shall
be indemnified and held harmless by the Companies to the fullest extent
permitted or authorized by applicable law and their bylaws, against all cost,
expense, liability and loss (including, without limitation, advancement of
attorneys’ and other fees and expenses) reasonably incurred or suffered by the
Executive in connection therewith. The Company agrees to use its best efforts to
maintain a directors’ and officers’ liability insurance policy covering the
Executive during the Employment Period and for at least four years thereafter to
the extent available on commercially reasonable terms.

11 

ARTICLE 12 

LIMITATION ON CERTAIN PAYMENTS
CONTINGENT ON CHANGE IN CONTROL 

     SECTION 12.01
Limitation on Certain Payments Contingent on
Change In Control. 

    
(a) Anything in this Agreement to the contrary notwithstanding, in the event
it shall be determined that (i) any payment, award, benefit or distribution (or
any acceleration of any payment, award, benefit or distribution) by the
Companies (or any of their affiliated entities) or any entity which effectuates
a Change in Control (or any of its affiliated entities) to or for the benefit of
the Executive (whether pursuant to the terms of this Agreement or otherwise)
(the “Payments”) would be subject to the excise tax imposed by Section 4999 of the Code
(the “Excise Tax”), and (ii) the reduction of the amounts payable to the Executive under
this Agreement to the maximum amount that could be paid to the Executive without
giving rise to the Excise Tax (the “Safe
Harbor Cap”) would provide the Executive with
a greater after-tax amount than if such amounts were not reduced, then the
amounts payable to the Executive under this Agreement shall be reduced (but not
below zero) to the Safe Harbor Cap. Unless the Companies and the Executive agree
otherwise, the reduction of the amounts payable hereunder, if applicable, shall
be made to the extent necessary in the following order: (i) first, any such Payments
that became fully vested prior to the Change in Control and that pursuant to
paragraph (b) of Treas. Reg. § 1.280G-1, Q/A 24, are treated as contingent
compensation payments solely by reason of the acceleration of their originally
scheduled dates of payment will be reduced, by cancellation of the acceleration
of their vesting; (ii) second, any severance payments or benefits, performance-based cash
or equity incentive awards, or other contingent compensation payments the full
amounts of which are treated as contingent on the Change in Control pursuant to
paragraph (a) of Treas. Reg. § 1.280G-1, Q/A 24, will be reduced; and (iii)
third, any
cash or equity incentive awards, or nonqualified deferred compensation amounts,
that vest solely based on the Executive’s continued service with the Companies,
and that pursuant to paragraph (c) of Treas. Reg. § 1.280G-1, Q/A 24, are
treated as contingent on the Change in Control because they become vested as a
result of the Change in Control, will be reduced, first by cancellation of any
acceleration of their originally scheduled dates of payment (if payment with
respect to such items is not treated as automatically occurring upon the vesting
of such items for purposes of Section 280G of the Code) and then, if necessary,
by canceling the acceleration of their vesting. In each case, the amounts of the
contingent compensation payments will be reduced in the inverse order of their
originally scheduled dates of payment or vesting, as applicable, and will be so
reduced only to the extent necessary to achieve the required reduction. For
purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable
under this Agreement (and no other Payments) shall be reduced. If the reduction
of the amounts payable hereunder would not result in a greater after-tax result
to the Executive, no amounts payable under this Agreement shall be reduced
pursuant to this provision.

    
(b) All determinations required to be made under this Section 12.01 shall be
made by the public accounting firm that is retained by the Companies as of the
date immediately prior to the Change in Control (the “Accounting Firm”), which shall provide
detailed supporting calculations both to the Companies and the Executive within
fifteen (15) business days of the receipt of notice from the Companies or the
Executive that there has been a Payment, or such earlier time as is requested by
the Companies. Notwithstanding the foregoing, in the event (i) the Board shall
determine prior to the Change in Control that the Accounting Firm is precluded
from performing such services under applicable auditor independence rules or
(ii) the Audit Committee of the Board determines that it does not want the
Accounting Firm to perform such services because of auditor independence
concerns or (iii) the Accounting Firm is serving as accountant or auditor for
the person(s) effecting the Change in Control, the Board shall appoint another
nationally recognized public accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees, costs and expenses (including, but not limited to,
the costs of retaining experts) of the Accounting Firm
shall be borne by the Companies. If payments are reduced to the Safe Harbor Cap
or the Accounting Firm determines that no Excise Tax is payable by the Executive
without a reduction in payments, the Accounting Firm shall provide a written
opinion to the Executive to such effect, that the Executive is not required to
report any Excise Tax on the Executive’s federal income tax return, and that the
failure to report the Excise Tax, if any, on the Executive’s applicable federal
income tax return will not result in the imposition of a negligence or similar
penalty. The determination by the Accounting Firm shall be binding upon the
Companies and the Executive (except as provided in Section 12.01(c) below).

12 

     (c) If
it is established pursuant to a final determination of a court or an Internal
Revenue Service (the “IRS”) proceeding, which has been finally and conclusively
resolved, that Payments have been made to, or provided for the benefit of, the
Executive by the Companies, which are in excess of the limitations provided in
this Section 12.01 (referred to hereinafter as an “Excess Payment”), the Executive shall
repay the Excess Payment to the Companies on demand, together with interest on
the Excess Payment at the applicable federal rate (as defined in Section 1274(d)
of the Code) from the date of the Executive’s receipt of such Excess Payment
until the date of such repayment. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the determination, it is
possible that Payments which will not have been made by the Companies should
have been made (an “Underpayment”), consistent with the
calculations required to be made under this Section 12.01. In the event that it
is determined (i) by the Accounting Firm, the Companies (which shall include the
position taken by the Companies, or together with their consolidated group, on
their federal income tax returns) or the IRS or (ii) pursuant to a determination
by a court, that an Underpayment has occurred, the Companies shall pay an amount
equal to such Underpayment to the Executive within ten (10) days of such
determination together with interest on such amount at the applicable federal
rate from the date such amount would have been paid to the Executive until the
date of payment. The Executive shall cooperate, to the extent the
Executive’s expenses are reimbursed by the Companies, with any reasonable requests by
the Companies in connection with any contests or disputes with the IRS in
connection with the Excise Tax or the determination of the Excess Payment.
Notwithstanding the foregoing, in the event that amounts payable under this
Agreement were reduced pursuant to Section 12.01(a) and the value of stock
options is subsequently re-determined by the Accounting Firm within the context
of Treasury Regulation §1.280G-1 Q/A 33 that reduces the value of the Payments
attributable to such options, the Companies shall promptly pay to the Executive
any amounts payable under this Agreement that were not previously paid solely as
a result of Section 12.01(a), subject to the Safe Harbor Cap.

ARTICLE 13 

MISCELLANEOUS 

    
SECTION 13.01 Binding
Arbitration. The parties agree that, except
as provided in Articles 9 and 10 above, any disputes under this Agreement shall
be settled exclusively by arbitration conducted in Winston-Salem, North
Carolina. Except to the extent inconsistent with this Agreement, such
arbitration shall be conducted in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association then
in effect at the time of the arbitration and otherwise in accordance with
principles which would be applied by a court of law or equity. The arbitrator
shall be acceptable to both the Companies and the Executive. If the parties
cannot agree on an acceptable arbitrator, the dispute shall be decided by a
panel of three arbitrators, one appointed by each of the parties and the third
appointed by the other two arbitrators or if the two arbitrators do not agree,
appointed by the American Arbitration Association. The costs of arbitration
incurred by the Executive (or his beneficiaries) will be borne by the Companies
(including, without limitation, reasonable attorneys’ fees and other reasonable
charges of counsel) (a) if the arbitration occurs prior to a Change in Control,
if the Executive prevails on a majority of the material issues in the dispute,
and (b) if the arbitration occurs after a Change in Control, if the Executive
prevails on at least one material issue in the dispute. Judgment upon the final
award rendered by such arbitrator(s) may be entered in
any court having jurisdiction thereof. Following the final determination of the
dispute in which, based on the outcome of the dispute, the Executive is, in
accordance with this Section 13.01, entitled to have his costs borne by the
Companies, the Companies shall pay all such reasonable costs within ten (10)
days following written demand therefor (supported by documentation of such
costs) by the Executive, and the Executive shall make such written demand within
sixty (60) days following the final determination of the dispute;
provided, however, that such payment shall be made no later than on or prior to the end of
the calendar year following the calendar year in which the costs are incurred.
Notwithstanding the foregoing, in the event a final determination of the dispute
has not been made by December 20 of the year following the calendar year in
which the costs are incurred, the Companies shall, within ten (10) days after
such December 20, reimburse such reasonable costs (supported by documentation of
such costs) incurred in the prior taxable year; provided, however, that the Executive
shall return such amounts to the Companies within ten (10) business days
following the final determination if (i) in the case of an arbitration prior to
a Change in Control, the Executive does not prevail on a majority of the
material issues in the dispute, or (ii) in the case of an arbitration after a
Change in Control, the Executive does not prevail on at least one material issue
in the dispute. The amount of any costs eligible for payment under this Section
13.01 during a calendar year will not affect the amount of any costs eligible
for payment under this Section 13.01 in any other taxable year.

13 

     SECTION 13.02
Consent to Amendments; No
Waivers. The provisions of this Agreement may
be amended or waived only by a written agreement executed and delivered by the
Companies and the Executive. Notwithstanding the foregoing, the Companies shall
have unilateral authority to amend this Agreement (without Executive consent) to
the extent necessary to comply with applicable laws, rules or regulations
(including but not limited to Section 409A) or changes to applicable laws, rules
or regulations. No other course of dealing between the parties to this Agreement
or any delay in exercising any rights hereunder will operate as a waiver of any
rights of any such parties. 

    
SECTION 13.03 Successors and
Assigns. All covenants and agreements
contained in this Agreement by or on behalf of any of the parties hereto will
bind and inure to the benefit of the respective successors, assigns, heirs,
executors and estates of the parties hereto whether so expressed or not,
provided that the Executive may not assign his rights or delegate his
obligations under this Agreement without the written consent of the Companies
(other than to his estate or heirs) and the Company may assign this Agreement
only to a successor to all or substantially all of the assets of the Company.

    
SECTION 13.04 Severability. Whenever possible, each
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
is held to be prohibited by or invalid under applicable law, such provision will
be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement. 

    
SECTION 13.05 Counterparts. This Agreement may be
executed simultaneously in two or more counterparts, any one of which need not
contain the signatures of more than one party, but all of which counterparts
taken together will constitute one and the same agreement. 

    
SECTION 13.06 Descriptive
Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement. 

14 

    
SECTION 13.07 Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when delivered personally to the
recipient, two business days after the date when sent to the recipient by
reputable express courier service (charges prepaid) or four business days after
the date when mailed to the recipient by certified or registered mail, return
receipt requested and postage prepaid. Such notices, demands and other
communications will be sent to the Executive and to the Companies at the
addresses set forth below. 

	      	If to the Executive:	                 
    	To the last address delivered to the
      Companies
	 			by the Executive in the manner set forth
      herein.
		  
		If to the Companies:		Krispy Kreme Doughnuts, Inc.
				Krispy Kreme Doughnut
  Corporation
				Suite 500
				370 Knollwood Street
				Winston-Salem, NC 27103
		 
				Attn: Senior Vice President-Human Resources
      and
				Organizational
  Development

or to such other address or to the
attention of such other person as the recipient party has specified by prior
written notice to the sending party. 

     SECTION 13.08
Withholding. The Companies may withhold from any amounts payable under this Agreement
such federal, state, local or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation. 

    
SECTION 13.09 No Third Party
Beneficiary. This Agreement will not confer
any rights or remedies upon any person other than the Companies, the Executive
and their respective heirs, executors, successors and assigns. 

    
SECTION 13.10 Entire
Agreement. This Agreement (including any
other documents referred to herein) constitutes the entire agreement among the
parties and supersedes any prior understandings, agreements or representations
by or among the parties, written or oral, including the Employment Agreement
dated February 27, 2008, the Amendment to Employment Agreement dated December
15, 2008, and the Amended and Restated Employment Agreement dated March 11,
2011, that may have related in any way to the subject matter hereof. 

    
SECTION 13.11 Construction. The language used in
this Agreement will be deemed to be the language chosen by the parties to
express their mutual intent, and no rule of strict construction will be applied
against any party. Any reference to any federal, state, local or foreign statute
or law will be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. 

    
SECTION 13.12 Survival. Sections 6.01, 7.01, 8.01 and Articles 5, 9, 11, 12 and 13
will survive and continue in full force in accordance with their terms
notwithstanding any termination of the Employment Period, and the Agreement
shall otherwise remain in full force to the extent necessary to enforce any
rights and obligations arising hereunder during the Employment
Period.

    
SECTION 13.13 GOVERNING
LAW. ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT WILL BE GOVERNED BY
THE INTERNAL LAW OF NORTH CAROLINA, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF
LAWS. 

15 

     SECTION 13.14 Section 409A. It is intended that this
Agreement will comply with Section 409A, to the extent the Agreement is subject
thereto, and the Agreement shall be interpreted on a basis consistent
with such intent. If an amendment of this Agreement is necessary in order for it
to comply with Section 409A, the parties hereto will negotiate in good faith to
amend the Agreement in a manner that preserves the original intent of the
parties to the extent reasonably possible. Notwithstanding any provision to the
contrary in this Agreement, if the Executive is deemed on the date of his
“separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) to be a “specified employee” (within the meaning of Treas. Reg. Section
1.409A-1(i)), then with regard to any payment that is required to be delayed
pursuant to Section 409A(a)(2)(B) of the Code, the portion, if any, of such
payment so required to be delayed shall not be made prior to the earlier of (i)
the expiration of the six (6)-month period measured from the date of his
“separation from service”, or (ii) the date of his death (the “Delay Period”). Upon the
expiration of the Delay Period, all payments delayed pursuant to this Section
shall be paid to the Executive in a lump sum, and any remaining payments shall
be made as provided in the Agreement and in a manner in accordance with Section
409A. The Companies shall not have any obligation to indemnify or otherwise
protect the Executive from any obligation to pay any taxes pursuant to Section
409A. In the event that this Agreement or any compensation payable hereunder
shall be deemed not to comply with (or be exempt from) Section 409A, then
neither the Companies, the Board, the Board of Directors of KKDC, nor its or
their designees or agents, shall be liable to the Executive or other persons for
actions, decisions or determinations made in good faith. 

    
With respect to any reimbursement or in-kind benefit arrangements of the
Companies and their subsidiaries that constitute deferred compensation for
purposes of Section 409A, except as otherwise permitted by Section 409A, the
following conditions shall be applicable: (a) the amount eligible for
reimbursement, or in-kind benefits provided, under any such arrangement in one
calendar year may not affect the amount eligible for reimbursement, or in-kind
benefits to be provided, under such arrangement in any other calendar year
(except that the health and dental plans may impose a limit on the amount that
may be reimbursed or paid), (b) any reimbursement must be made on or before the
last day of the calendar year following the calendar year in which the expense
was incurred, and (c) the right to reimbursement or in-kind benefits is not
subject to liquidation or exchange for another benefit. Whenever a payment under
this Agreement specifies a payment period with reference to a number of days
(e.g.,
“payment shall be made within thirty (30) days after termination of
employment”), the actual date of payment within the specified period shall be
within the sole discretion of the Companies. Whenever payments under this
Agreement are to be made in installments, each such installment shall be deemed
to be a separate payment for purposes of Section 409A. Any reimbursement by the
Company pursuant to Section 12.01(c) herein shall be made to the Executive not
later than the end of the Executive’s taxable year following the taxable year in
which he remits the related taxes.

    
SECTION 13.15 Representations of the
Companies. The Companies represent and
warrant that (a) the execution, delivery and performance of this Agreement by
the Companies has been fully and validly authorized by all necessary corporate
action, (b) the officer(s) signing this Agreement on behalf of the Companies is
duly authorized to do so, (c) the execution, delivery and performance of this
Agreement does not violate any applicable law, regulation, order, judgment or
decree or any agreement, plan or corporate governance document to which the
Companies are a party or by which they are bound, and (d) upon execution and
delivery of this Agreement by the parties hereto, it will be a valid and binding
obligation of the Companies enforceable against the Companies and their
successors and assigns in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors’ rights generally. 

[remainder of page left intentionally
blank] 

16 

     IN WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the date and year
first above written. 

	 	KRISPY KREME DOUGHNUTS,
      INC.
		 
		 
		By:      
	/s/
      Douglas R. Muir
			Douglas R. Muir
			Chief Financial Officer
		 
		 
		 
		KRISPY KREME DOUGHNUT
      CORPORATION
		 
		 
		By:	/s/
      Kenneth J. Hudson
			Kenneth J. Hudson
			Senior Vice President – Human
      Resources
			and Organizational Development
		 
		 
		 
		EXECUTIVE
		 
		 
		/s/ James H. Morgan
		James H.
  Morgan

 

 

[Signature Page to Amended and Restated
Employment Agreement] 

Exhibit A 

MUTUAL RELEASE 

This mutual release (this “Release”) is
entered into as of this ____ day of ______, ____ (the “Release Date”) among
Krispy Kreme Doughnut Corporation, a North Carolina corporation (“KKDC”), Krispy
Kreme Doughnuts, Inc., a North Carolina corporation (the “Company” and, together
with KKDC, the “Companies”) and James H. Morgan (the “Executive”). 

1. Reference is hereby made to the
amended and restated employment agreement dated as of June 30, 2013 (the “Employment Agreement”) by the parties hereto
setting forth the agreements among the parties regarding the termination of the
employment relationship between the Executive and the Companies. Capitalized
terms used but not defined herein have the meanings ascribed to them in the
Employment Agreement. 

2. The Executive, for himself, his
spouse, heirs, executors, administrators, successors and assigns, hereby
releases and discharges the Companies and its respective direct and indirect
parents and subsidiaries, and other affiliated companies, and each of their
respective past and present officers, directors, agents and employees, from any
and all actions, causes of action, claims, demands, grievances and complaints,
known and unknown, which the Executive or his spouse, heirs, executors,
administrators, successors or assigns ever had or may have at any time through
the Release Date. The Executive acknowledges and agrees that this Release is
intended to and does cover, but is not limited to, (i) any claim of employment
discrimination of any kind whether based on a federal, state or local statute or
court decision, including the Age Discrimination in Employment Act with
appropriate notice and rescission periods observed; (ii) any claim, whether
statutory, common law or otherwise, arising out of the terms or conditions of
the Executive’s employment at the Companies and/or the Executive’s separation
from the Companies; enumeration of specific rights, claims and causes of action
being released shall not be construed to limit the general scope of this
Release. It is the intent of the parties that by this Release the Executive is
giving up all rights, claims and causes of action occurring prior to the Release
Date, whether or not any damage or injury therefrom has yet occurred. The
Executive accepts the risk of loss with respect to both undiscovered claims and
with respect to claims for any harm hereafter suffered arising out of conduct,
statements, performance or decisions occurring before the Release Date.

     It is
understood that the Executive has been advised to consult with an attorney prior
to executing this Release; that he in fact has consulted a knowledgeable,
competent attorney regarding this Release; that he may, before executing this
Release, consider this Release for a period of 21 calendar days; and that the
consideration he receives for this Release is in addition to amounts to which he
was already entitled. If the Executive is signing this Release prior to the
expiration of such 21-day period, the Executive is waiving his right to review
the Release for such full 21-day period prior to signing it. It is further
understood that the Executive may revoke this Release within seven calendar days
from the date of execution hereof. If the Executive revokes this Release within
such seven-day period, no severance benefit will be payable to him under the
Employment Agreement and he shall return to the Company any such payment
received prior to that date.

3. The Companies hereby release and
discharge the Executive, his spouse, heirs, executors, administrators,
successors and assigns, from any and all actions, causes of actions, claims,
demands, grievances and complaints, known and unknown, which the Companies ever
had or may have at any time through the Release Date. The Companies acknowledge
and agree that this Release is intended to and does cover, but is not limited
to, (i) any claim, whether statutory, common law or otherwise, arising out of
the terms or conditions of the Executive’s employment at the Companies and/or
the Executive’s separation from the Companies, and (ii) any claim for attorneys’
fees, costs, disbursements or other like expenses. The
enumeration of specific rights, claims and causes of action being released shall
not be construed to limit the general scope of this Release. It is the intent of
the parties that by this Release the Companies are giving up all of their
respective rights, claims and causes of action occurring prior to the Release
Date, whether or not any damage or injury therefrom has yet occurred. The
Companies accept the risk of loss with respect to both undiscovered claims and
with respect to claims for any harm hereafter suffered arising out of conduct,
statements, performance or decisions occurring before the Release Date.

4. This Release shall in no event (i)
apply to any claim by either the Executive or the Companies arising from any
breach by the other party of its obligations under the Employment Agreement
occurring on or after the Release Date, (ii) waive the Executive’s claim with
respect to compensation or benefits earned or accrued prior to the Release Date
to the extent such claim survives termination of the Executive’s employment
under the terms of the Employment Agreement, (iii) waive the Executive’s right
to indemnification under the charters and by-laws of the Companies, or (iv)
waive the Executive’s rights as a shareholder. 

5. This Mutual Release shall be
effective as of the Release Date and only if executed by both parties.

6. All questions concerning the
construction, validity and interpretation of this Mutual Release will be
governed by the internal law of North Carolina, without regard to principles of
conflict of laws. 

     IN WITNESS
WHEREOF, each party hereto, intending to be legally bound, has executed this
Mutual Release on the date indicated above. 

	 	KRISPY KREME DOUGHNUTS,
      INC.
		 
		 
		By: 	  
		  
		  
		KRISPY KREME DOUGHNUT
      CORPORATION
		  
		  
		By:	  
		  
		  
		EXECUTIVE
		  
		  
		James H.
  Morgan

Exhibit B 

The following businesses, together with
their Subsidiaries, are the businesses for purposes of Section 9.01 hereof:

Dunkin Brands Inc.
Tim Hortons,
Inc.
George Weston Limited
Interstate Bakeries Corporation
Flowers
Foods, Inc. 
McKee Foods
Inc.
Starbucks
Dewey’s Bakery
Salem Baking Company
Dawn Food
Products, Inc.
CSM Baking Products

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