Document:

EX-10.1

Exhibit 10.1

AMENDED AND RESTATED CREDIT AGREEMENT

(LINE OF CREDIT)

(LETTER OF CREDIT SUB-FACILITY)

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

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

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

SECTION

1

DEFINITIONS

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

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

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

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

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

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

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

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

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

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Applicable	 	 	 	 
	 	 	 	 	 	 	Margin (LIBOR	 	Applicable	 	 
	 	 	 	 	 	 	Advances and	 	Margin	 	 
	 	 	 	 	 	 	Applicable	 	(Alternate Base	 	Applicable Margin
	 	 	 	 	 	 	Floating Rate	 	Rate	 	(Unused
	Tier	 	Pricing Leverage Ratio	 	Advances)	 	Advances)	 	Commitment Fee)
	 	1	 	 	Less than 0.50 to 1.00

	 	 	175.00	 	 	 	75.00	 	 	 	25.00	 
	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	2	 	 	Greater than or equal

to 0.50 to 1.00 but

less than 1.00 to

1.00

	 	200.00

	 	100.00

	 	37.50

	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	3	 	 	Greater than or equal

to 1.00 to 1.00 but

less than 1.50 to

1.00

	 	225.00

	 	125.00

	 	50.00

	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	4	 	 	Greater than or equal

to 1.50 to 1.00

	 	250.00

	 	150.00

	 	62.50

	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

	 	 	 
	1.1.24

1.1.25

1.1.26

1.1.27

1.1.28
	 	“LIBOR Advance”: shall have the meaning set forth in Section 2.1.4(iii) hereof.

“LIBOR Interest Period”: shall have the meaning set forth in Section 2.1.4(iii) hereof.

“LIBOR Rate”: shall have the meaning set forth in Section 2.1.4(iii) hereof.

“Line Account”: shall have the meaning set forth in Section 2.3 hereof.

“Line of Credit”: shall mean the credit facility described as such in Section 2 hereof.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SECTION

2

CREDIT FACILITIES

	2.1	 	THE LINE OF CREDIT

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

	 	2.1.10	 	Commitment Fee: The Borrower agrees to pay to the Bank a commitment fee equal to the
Applicable Margin (Unused Commitment Fee) in effect on such date computed on the basis
of a 360-day year, actual days elapsed, on the average daily unused amount of the Line
of Credit which fee shall be calculated on a quarterly basis by the Bank and shall be
due and payable by the Borrower in arrears on each December 31, March 31, June 30 and
September 30, beginning on December 31, 2013.

	2.2	 	LETTER OF CREDIT SUB-FACILITY

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

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

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

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

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

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

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

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

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

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

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

	2.7	 	Costs and Expenses: The Borrower shall pay to the Bank immediately upon demand, in addition
to any other amounts due or to become due hereunder, any and all (i) withholdings, interest
equalization taxes, stamp taxes or other taxes (except income and franchise taxes) imposed by
any domestic or foreign governmental authority and related in any manner to the One Month
LIBOR Rate or the LIBOR Rate, and (ii) future, supplemental, emergency or other changes in the
any One Month LIBOR Rate or LIBOR Rate reserve percentages, assessment rates imposed by the
Federal Deposit Insurance Corporation, or similar requirements or costs imposed by any
domestic or foreign governmental authority or resulting from compliance by the Bank with any
request or directive (whether or not having the force of law) from any central bank or other
governmental authority and related in any manner to the One Month LIBOR Rate or LIBOR Rate to
the extent they are not included in the calculation of the One Month LIBOR Rate or LIBOR Rate.
In determining which of the foregoing are attributable to any One Month LIBOR Rate or LIBOR
Rate available to the Borrower hereunder, any reasonable allocation made by the Bank among its
operations shall be conclusive and binding upon the Borrower.

SECTION

3

CONDITIONS PRECEDENT

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SECTION

4

REPRESENTATIONS AND WARRANTIES

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SECTION

5

COVENANTS

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

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

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

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

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

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

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

	 	 	 	 	 
	 	5.2	 	 	For the purposes of Section 5.1(i) and Section 5.1(ii) hereof, such financial statements shall be deemed delivered when

publicly available on the Borrower’s website or the website of the United States Securities and Exchange Commission.

Financial Condition: Shall maintain at all times on a consolidated basis:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SECTION

6

EVENTS OF DEFAULT

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SECTION

7

REMEDIES ON DEFAULT

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

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

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

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

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

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

SECTION

8

MISCELLANEOUS

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

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

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

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

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

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

	 	 	 
	To the Borrower:

	 	To the Bank:
	IXYS CORPORATION

1590 Buckeye Drive

Milpitas, CA 95035

Attn Nathan Zommer

Chief Executive Officer or

Uzi Sasson

Chief Financial Officer

FAX: (408) 715-2503

	 	BANK OF THE WEST

San Jose Office (NBO)

95 South Market Street, Suite 100

San Jose, CA 95113

Attn: Helen Huang

Vice President and Senior

Relationship Manager

FAX: (408) 292-4092

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

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

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

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

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

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

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

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

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

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

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

[Signatures to follow on next page.]

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

	 	 	 
	BANK:
	 	BORROWER:

	BANK OF THE WEST

BY: /s/ Helen Huang
	 	IXYS CORPORATION

BY: /s/ Uzi Sasson

	 
	 	 

	NAME: Helen Huang, Vice President
	 	NAME: Uzi Sasson, President, Chief

Financial Officer and Secretary

Exhibit A

Form of Notice of Negative Pledge

This document prepared by

and after recording return to:

Helen Huang

Bank of the West

95 South Market Street, Suite 100

San Jose, California 95113

NOTICE OF NEGATIVE PLEDGE

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

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

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

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

[Signature Page to Follow]

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

	 	 	 	“The Pledgor”

	 	 	 	[      ]

By

Name:

	 	 	 	Title:

State of                               )

                                             )      SS.

County of                            )

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

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

Notary Public

(Type of Print Name)

(Seal)

Commission Expires:

      

Exhibit A

Legal Description

[See Attached]pbio_ex41.htm

Exhibit 4.1

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is dated as of December 12, 2013, between Pressure BioSciences, Inc., a Massachusetts corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).

 

WHEREAS, the Company has determined that it is in its best interests to obtain equity financing through the issuance and sale of units (the “Units”), each comprised of (i) one share of Preferred Stock (as defined below) and (ii) a warrant to purchase 500 shares of Common Stock (as defined below); and

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, the number of Units set forth on such Purchaser’s signature page hereto, as more fully described in this Agreement.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:

 

ARTICLE I.

 

DEFINITIONS

 

1.1 Definitions.  In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings set forth in this Section 1.1:

 

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule 144 under the Securities Act.

 

“Articles of Amendment” means the Articles of Amendment to the Company’s Restated Articles of Organization, as amended, in the form of Exhibit A attached hereto, that includes a Certificate of Designation setting forth the rights, preferences, powers, privileges, restrictions, qualifications and limitations of the Preferred Stock.

 

“Business Day” means any day except Saturday, Sunday, any day which shall be a federal legal holiday in the United States, or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

 

“Closing” and “Closings” means each of the closings of the purchase and sale of the Units pursuant to Section 2.2.  In the event there is more than one closing, the term “Closing” shall apply to each such closing unless otherwise specified.

 

“Closing Date” means the date on which the Company closes the purchase and sale of the Units.  In the event there is more than one Closing, the term “Closing Date” shall apply to each such Closing unless otherwise specified.

 

“Commission” means the Securities and Exchange Commission.

 

“Common Stock” means the common stock of the Company, par value $.01 per share, and any other class of securities into which such securities may hereafter be reclassified or changed into.

 

“Common Stock Equivalents” means any securities of the Company or its Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants, stock appreciation rights, restricted stock units, or other instrument that are at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

 

“Company Counsel” means Szaferman Lakind Blumstein & Blader, PC, with offices located at 101 Grovers Mill Road, Second Floor, Lawrenceville, NJ 08648.

 

  

1

  

“Conversion Shares” means such shares of Common Stock which, from time to time, have been issued, or may be issuable, upon conversion of the Preferred Stock.

 

“Disclosure Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.

 

“Effectiveness Date” has the meaning set forth in the Registration Rights Agreement.

 

 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Liens” means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

“Majority Purchasers” shall have the meaning assigned to such term in Section 5.4.

 

“Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).

 

“Per Unit Purchase Price” means an amount equal to the greater of (a) (i) $250.00 and (b) (i) one thousand (1,000) times the VWAP of the Common Stock for the five trading days as reported by the Trading Market on the Trading Day immediately preceding the Closing Date with respect to which the particular Units are being purchased.

 

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency  or subdivision thereof), or other entity of any kind.

 

“Preferred Stock” means the Series K Convertible Preferred Stock of the Company, $.01 par value, issued or issuable to each Purchaser pursuant to this Agreement with such rights, preferences, powers, privileges, restrictions, qualifications and limitations as are set forth in the Certificate of Designation included in the Articles of Amendment.

 

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

“Registration Rights Agreement” means the Registration Rights Agreement, dated the date hereof, among the Company and the Purchasers, in the form of Exhibit B attached hereto.

 

“Registration Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale by the Purchasers of the Warrant Shares under the circumstances and conditions set forth in the Registration Rights Agreement.

 

“Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e).

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such rule.

 

“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).

 

“Securities” means, as the context requires, the Preferred Stock, the Warrants, the Conversion Shares, the Warrant Shares, and any combination of the foregoing or all of the foregoing.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Subscription Amount” means, as to each Purchaser, the aggregate amount to be paid for Units purchased hereunder as specified on such Purchaser’s signature page to this Agreement next to the heading “Subscription Amount,” payable in United States dollars and in immediately available funds, or at the sole election of the Company, through conversion of outstanding indebtedness of the Company to the Purchaser.

 

  

2

  

“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership, association or other business entity of which (i) if a corporation, a majority 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 a combination thereof, or (ii) if a limited liability company, partnership, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof.  For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association or other business entity if such Person or Persons shall be allocated a majority of limited liability company, partnership, association or other business entity gains or losses or shall be or control any managing member or general partner of such limited liability company, partnership, association or other business entity.

 

“Trading Day” means a day on which the Common Stock is traded on a Trading Market.

 

“Trading Market” means the OTC QB Market or if the OTC QB Market is not the primary market on which the Common Stock is then traded, such other primary market or exchange on which the Common Stock is listed or quoted for trading on the date in question.

 

“Transaction Documents” means this Agreement, the Registration Rights Agreement and any other documents or agreements executed in connection with the transactions contemplated hereunder.

 

“Transfer Agent” means Computershare Trust Company, with a mailing address of 350 Indiana Street, Suite 800, Golden, Colorado 80401 and a telephone number of (303) 262-0600.

 

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a)  if the OTC QB Market is the Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC QB Market, (b) if the Common Stock is then listed or quoted on a Trading Market other than the OTC QB Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on such Trading Market as reported by Bloomberg Financial L.P. or if not reported by Bloomberg Financial L.P., as reported by another nationally-recognized business news service, (c) if the Common Stock is not then listed or quoted for trading on a Trading Market and if prices for the Common Stock are then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

“Warrants” means the warrants to purchase Common Stock issued to the Purchasers pursuant to this Agreement, which warrants shall be in the form of Exhibit C attached hereto.

 

“Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrants.

 

ARTICLE II.

 

PURCHASE AND SALE

 

2.1 [Reserved]

 

2.2 Articles of Amendment.  On or before the initial Closing, the Company shall adopt and file with the Secretary of the Commonwealth of Massachusetts the Articles of Amendment.

 

2.3 Closing.

 

(a) Upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and each Purchaser, severally and not jointly, agrees to purchase, at the Per Unit Purchase Price, that number of Units set forth below such Purchaser’s name on such Purchaser’s signature page to this Agreement (calculated by dividing such Purchaser’s Subscription Amount by the Per Unit Purchase Price).  At or prior to the Closing, each Purchaser shall deliver to the Company its Subscription Amount for the Units being purchased by such Purchaser at the Closing and the Company shall record in the name of each Purchaser its respective shares of Preferred Stock comprising such Units and shall deliver to each Purchaser its respective Warrants comprising such Units, and the Company and each Purchaser shall deliver the other items set forth in Section (b) deliverable at the Closing.  Upon satisfaction of the conditions set forth in Section (b) and Section 2.5, the Closing shall occur at the offices of the Company Counsel, remotely via the exchange of documents and signatures or at such other location or by such other means as the parties shall mutually agree.

 

  

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(b) The initial Closing of the purchase and sale of the Units will take place on December 12, 2013.  After the initial Closing and from time to time as the Company may determine in its sole discretion, the Company may sell, on the same terms and conditions as those contained in this Agreement, an amount of Units, together with Units sold in all prior Closings, having an aggregate purchase price of up to $1,500,000, which amount may be increased by the Company in its sole discretion, with the Per Unit Purchase Price being determined on the basis of such subsequent Closing Date.

 

2.4 Closing Deliveries.

 

(a) On or prior to each Closing (except as otherwise required below), the Company shall deliver or cause to be delivered to each Purchaser purchasing Units at such Closing the following:

 

	
(i)  

	
this Agreement duly executed by the Company;

 

	
(ii)  

	
in the discretion of the Company, either (A) a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver, on an expedited basis, a certificate evidencing the number of shares of Preferred Stock contained in such Purchaser’s Units, or (B) a certificate evidencing the number of shares of Preferred Stock contained in such Purchaser’s Units, (in each case determined by dividing such Purchaser’s Subscription Amount by the Per Unit Purchase Price), and in each case registered in the name of such Purchaser;

 

	
(iii)  

	
a Warrant, registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to either (A) five hundred (500) times the number of shares of Preferred Stock purchased by such Purchaser if purchased on the date hereof at the first Closing or (B) five hundred (500) times the number of shares of Preferred Stock purchased by such Purchaser if purchased after the date hereof at a Closing after the first Closing, in each case with an exercise price equal to (0.00125) of the Per Unit Purchase Price, subject to adjustment therein (such Warrant certificate shall be delivered within three Trading Days of the Closing Date); and

 

	
(iv)  

	
the Registration Rights Agreement duly executed by the Company.

 

(b) On or prior to the Closing, each Purchaser purchasing Units at such Closing shall deliver or cause to be delivered to the Company the following:

 

	
(i)  

	
this Agreement duly executed by such Purchaser;

 

	
(ii)  

	
such Purchaser’s Subscription Amount by wire transfer or check to the account as specified by the Company;

 

	
(iii)  

	
the Registration Rights Agreement duly executed by such Purchaser; and

 

	
(iv)  

	
if the Purchaser is a U.S. citizen, resident for U.S. federal income tax purposes, or otherwise subject to U.S. federal income tax, an IRS Form W-9 completed with respect to such Purchaser in accordance with the instructions accompanying such form.

 

2.5 Closing Conditions.

 

(a) The obligations of the Company hereunder in connection with the sale of Units to each Purchaser at the Closing are subject to the following conditions being met:

 

(i) the accuracy in all material respects when made and on the Closing Date of the representations and warranties of such Purchaser contained herein;

 

(ii) all obligations, covenants and agreements of such Purchaser required to be performed at or prior to the Closing Date shall have been performed; and

 

(iii) the delivery by the Purchaser of the items set forth in Section 2.4(b) of this Agreement.

 

(b) The respective obligations of each Purchaser hereunder in connection with the Closing are subject to the following conditions being met:

 

  

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(i) the accuracy in all material respects when made and on the Closing Date (as if made on the Closing Date) of the representations and warranties of the Company contained herein (except that the representations and warranties of the Company contained herein that are qualified by materiality or Material Adverse Effect shall be true and correct in all respects when made and on the Closing Date (as if made on the Closing Date));

 

(ii) all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed; and

 

(iii) the delivery by the Company of the items set forth in Section 2.4(a) of this Agreement.

 

ARTICLE III.

 

REPRESENTATIONS AND WARRANTIES

 

3.1 Representations and Warranties of the Company.  Except as set forth in the Disclosure Schedules or disclosed in the SEC Reports, which Disclosure Schedules shall be deemed a part hereof and shall qualify the representations made herein, the Company hereby makes the following representations and warranties to each Purchaser:

 

(a) Subsidiaries.  All of the direct and indirect Subsidiaries of the Company are set forth on Schedule 3.1(a).  The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.

 

(b) Organization and Qualification.  Each of the Company and its Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.  Neither the Company nor any Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents.  Each of the Company and its Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not, individually or in the aggregate, have or reasonably be expected to result in (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”).

 

(c) Authorization; Enforcement.  The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.  The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of the Company and no further action is required by the Company, its board of directors or its stockholders in connection therewith other than the Required Approvals.  Each Transaction Document has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

(d) No Conflicts.  The execution, delivery, and performance of the Transaction Documents by the Company, the issuance and sale of the Units, and the consummation by the Company of the other transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Company  Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any such Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any such Subsidiary is a party or by which any property or asset of the Company or any such Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Company Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or such a Subsidiary is bound or affected, except in the case of each of clauses (ii) and (iii), such as would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.

 

(e) Filings, Consents and Approvals.  The Company is not required to obtain any consent, waiver, authorization, or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery, and performance by the Company of the Transaction Documents, other than (i) the filing of the Articles of Amendment with, and the acceptance of such filing by, the Secretary of the Commonwealth of Massachusetts, (ii) filings required pursuant to Section 4.3 of this Agreement, (iii) the filing with, and the declaration of effectiveness by, the Commission of the Registration Statement, (iv) application(s) and notification(s) to each applicable Trading Market for the listing of the Common Stock for trading thereon in the time and manner required thereby, (v) the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws and (vi) those set forth on Schedule 3.1(g) hereof (collectively, the “Required Approvals”).

 

  

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(f) Issuance of Units.  The shares of Preferred Stock constituting a part of the Units are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents, applicable federal and state securities laws and Liens created by or imposed by a Purchaser.  The Warrants have been duly authorized and constitute the binding obligation of the Company enforceable against the Company in accordance with its terms except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.  The Conversion Shares and the Warrant Shares have in each case been duly reserved for issuance, and upon issuance in accordance with the terms of the Company’s Restated Articles of Organization, as amended, and the terms of the Warrants, as applicable, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under the Transaction Documents, applicable federal and state securities laws and Liens created by or imposed by a Purchaser.

 

(g) Capitalization.  The number of shares and type of all authorized, issued and outstanding capital stock of the Company as of September 30, 2013 is set forth on Schedule 3.1(g).  Since such date, the Company has not issued any capital stock other than pursuant to (i) this Agreement, the conversion of any Preferred Stock, or the exercise of any Warrants, (ii) the exercise of employee stock options under the Company’s stock option plans, if any, (iii) the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plan, if any, and (iv) the conversion or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act.  Except as set forth on Schedule 3.1(g), no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents.  Except as set forth on Schedule 3.1(g), or as a result of the purchase and sale of the Units pursuant to the terms of this Agreement, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights, or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents.  Except as set forth on Schedule 3.1(g), the issuance and sale of the Units will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities.

 

(h) SEC Reports; Financial Statements.  The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension.  As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing.  Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments and absence of footnotes thereto.

 

(i) Material Changes; Undisclosed Events, Liabilities or Developments.  Except as set forth on Schedule 3.1(i), since the date of the latest Annual Report on Form 10-K or, if filed subsequent to the latest Annual Report on Form 10-K, the latest Quarterly Report on Form 10-Q or Current Report on Form 8-K, filed by the Company prior to the date hereof, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, and (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock.

 

(j) Certain Fees.  No brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents.

 

(k) Listing and Maintenance Requirements.  The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration.

 

(l) Private Placement. Assuming the accuracy of each Purchaser’s representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.

 

  

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(m) Disclosure.  All disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company, its business and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, with respect to the representations and warranties made herein are true and correct with respect to such representations and warranties and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

 

3.2 Representations and Warranties of Each Purchaser.  Each Purchaser, for itself, himself or herself and for no other Purchaser, hereby represents and warrants as follows:

 

(a) Organization; Authority.  If a corporation, partnership, limited liability company, trust or other entity, (i) such Purchaser is an entity duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization with full right, corporate, partnership or limited liability company, power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder; and (ii) the execution, delivery, and performance by such Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or similar action on the part of such Purchaser.  If an individual, such Purchaser has full legal capacity to execute and deliver this Agreement and the other Transaction Documents to which he or she is a party and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out his or her obligations hereunder and thereunder.  Each Transaction Document to which such Purchaser is a party has been duly executed by the Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against such Purchaser in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

(b) Own Account.  Such Purchaser understands that the Securities are “restricted securities” and have not been registered under the Securities Act or any applicable state or other securities law and is acquiring the Securities as principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state or other securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state or other securities law, and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities  in violation of the Securities Act or any applicable state or other securities law.

 

(c) Purchaser Status.  At the time such Purchaser was offered the Securities such Purchaser was, on the date hereof it is, and on the applicable Closing Date it will be, an “accredited investor” as defined in Rule 501(a) under the Securities Act.

 

(d) Experience of Such Purchaser.  Such Purchaser, either alone or together with such Purchaser’s representatives, has such knowledge, sophistication, and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment.  Such Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

 

(e) General Solicitation.  Such Purchaser is not purchasing the Securities as a result of any advertisement, article, notice, or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

 

(f) Provision of Information. Such Purchaser has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the Securities and the finances, operations and business of the Company; and (ii) the opportunity to request such additional information which the Company possesses or can acquire without unreasonable effort or expense.  All of such Purchaser’s questions have been answered to its satisfaction and such Purchaser has received all of such requested additional information.

 

(g) Certain Fees.  No brokerage or finder’s fees or commissions are or will be payable by such Purchaser to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank, or other Person with respect to the transactions contemplated by the Transaction Documents.

 

(h) Residency.  The residence or principal place of business of such Purchaser is set forth on such Purchaser’s signature page to this Agreement, and all communications between such Purchaser and the Company regarding the transactions contemplated by this Agreement took place within or from the state of such residence or principal place of business.

 

(i) Acknowledgement.  Such Purchaser acknowledges that the Company has relied upon the representations and warranties of such Purchaser set forth in this Section 3.2 in its determination that no registration under the Securities Act is required for the offer and sale of the Securities by the Company to such Purchaser as contemplated by this Agreement.

 

  

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(j) Transactions in Common Stock.

 

(i) Each Purchaser represents, warrants and covenants that, at no time in the thirty (30) days preceding the date hereof and through the date of any Closing in which such Purchaser participates, such Purchaser and, to the Purchaser’s knowledge, its Affiliates have not engaged in, directed or otherwise participated in, and shall not engage in, direct or otherwise participate in, any transactions, whether directly or indirectly through or with another Person, involving securities of the Company (including without limitation the Common Stock) to maintain or otherwise affect, or that are intended to maintain or otherwise affect, the trading price of the Common Stock.

 

(ii) Each Purchaser represents, warrants and covenants that, at no time in the thirty (30) days preceding the date hereof and through the date of any Closing in which such Purchaser participates, such Purchaser and, to such Purchaser’s knowledge, its Affiliates have not engaged, and shall not engage, in any short-selling of Common Stock, and that such Purchaser shall not use any of the Securities acquired pursuant to this Agreement to cover any short position in the Common Stock if doing so would be in violation of any applicable federal or state securities laws.  For the six (6) months following the Closing, such Purchaser shall not, and shall cause it Affiliates not to, engage in any short selling of Common Stock.

 

(iii) Each Purchaser shall indemnify the Company for any and all losses, damages, costs and expenses (including attorneys’ fees) that the Company may incur as a result of any breach by the Purchaser of this Section 3.2(j).

 

ARTICLE IV.

 

OTHER AGREEMENTS OF THE PARTIES

 

4.1 Transfer Restrictions.

 

(a) The Securities may only be disposed of in compliance with state and federal securities laws.  In connection with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, or to the Company, the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act.  As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights of a Purchaser under this Agreement.

 

(b) Certificates evidencing any Securities will contain the following legend or such other legend as may be reasonably appropriate under the Securities Act so long as is required by this Section 4.1:

 

THE OFFER AND SALE OF THIS SECURITY HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, SUCH SECURITY MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

 

(c) If the Purchaser or other holder of the Securities is not an Affiliate of the Company, certificates evidencing the Securities shall not contain any legend (including the legend set forth in Section 4.1(b), (i) while a registration statement (including the Registration Statement) covering the resale of such Security is effective under the Securities Act, (ii) following any sale of such Securities pursuant to Rule 144, (iii) if such Securities are eligible for sale under Rule 144 without volume limitations, or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission).  The Company agrees that at such time as such legend is no longer required with respect to Securities under this Section 4.1(c), it will, no later than five Trading Days following the delivery by a Purchaser to the Transfer Agent of a certificate representing such Securities, cause to be delivered to such Purchaser a certificate representing such Securities that is free from all restrictive and other legends.  The Company may not make any notation on its records or give instructions to any Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4.1.  Certificates for Securities subject to legend removal hereunder may be transmitted by the Transfer Agent to the applicable Purchaser by crediting the account of such Purchaser’s prime broker with the Depository Trust Company System through its Deposit Withdrawal Agent Commission system if the Company is a participant in such system, and otherwise by the Company or by the Transfer Agent by physical delivery to such Purchaser as provided in the notice section of this Agreement.

4.2 Furnishing of Information.  As long as any Purchaser owns Securities and the Company remains subject to the requirements of the Exchange Act, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act.  As long as any Purchaser owns Securities, if the Company is not required to file reports pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and make publicly available in accordance with Rule 144(c) such information as is required for the Purchasers to sell the Securities under Rule 144, and will take such further action as any holder of Securities may reasonably request, to the extent required from time to time to enable such Person to sell such Securities without registration under the Securities Act within the requirements of the exemption provided by Rule 144.

 

  

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4.3 Securities Laws Disclosure; Publicity.  Promptly following the Closing and in accordance with federal securities laws and regulations, the Company shall file a Current Report on Form 8-K, disclosing the material terms of the transactions contemplated hereby and filing the Transaction Documents as exhibits thereto.  The Company intends to and may issue press releases with respect to the transactions contemplated hereby without the prior consent of each Purchaser.  Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (i) as required by federal securities law in connection with (A) any registration statement contemplated by the Registration Rights Agreement, (B) the Current Report on Form 8-K required by this Section 4.3, (C) any filing required by the Commission, (D) any filing required by federal or state securities laws and regulations as set forth in Section 4.5, and (E) the filing of final Transaction Documents (including signature pages thereto) with the Commission and (ii) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (ii).  No Purchaser shall issue any press release or otherwise make any public statement with respect to the transactions contemplated hereby without the prior consent of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the Purchaser shall promptly provide the Company with prior notice of such public statement or communication.

 

4.4 Use of Proceeds.  The Company shall use the net proceeds from the sale of the Securities hereunder for general corporate working capital and corporate purposes, including, but not limited to accounts payable, accrued expenses, sales and marketing expenses, general and administrative expenses, applications and product development expenses, repayment of indebtedness and the expenses of the transaction contemplated by the Transaction Documents.

 

4.5 Form D; Blue Sky Filings.  The Company shall timely file a Form D with respect to the Securities as required under Regulation D under the Securities Act and shall provide a copy thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers at the Closing under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly upon request of any Purchaser.  Each Purchaser shall take all commercially reasonable actions that are reasonably requested by the Company related to, or to effectuate, the filing of a Form D or any filing required pursuant to the “Blue Sky” laws of the states of the United States which, for purposes of clarity, shall not include the payment of any fees by such Purchaser.

 

4.6 Reservation of Common Stock. The Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue the Conversion Shares pursuant to the conversion of the Preferred Stock, and the Warrant Shares pursuant to any exercise of the Warrants.

 

ARTICLE V.

 

MISCELLANEOUS

 

5.1 Fees and Expenses.  Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.  The Company shall pay all Transfer Agent fees, stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.

 

5.2 Entire Agreement.  The Transaction Documents (including the confidentiality agreements by and between the Company and any one or more of the Purchasers) contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

 

5.3 Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile or e-mail at the facsimile number or e-mail address set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile or e-mail at the facsimile number or e-mail address set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second Trading Day following the date of mailing, if sent by internationally recognized overnight courier service for next business day delivery, or (d) upon actual receipt by the party to whom such notice is required to be given.  The address for such notices and communications shall be as set forth on the signature pages attached hereto.

 

5.4 Amendments; Waivers.  No provision of this Agreement may be waived, amended, modified or terminated except in a written instrument signed, by the Company, and by Purchasers holding a majority of the shares of Preferred Stock purchased as part of the Units (the “Majority Purchasers”), provided such waiver, amendment, modification, termination or waiver applies equally and proportionately to all of the Purchasers.  Any such waiver, amendment modification or termination shall be binding on each Purchaser even if such Purchaser does not sign such written consent.  No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

 

  

9

  

5.5 Headings.  The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

 

5.6 Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.  The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Majority Purchasers.  Subject to compliance with federal and state securities laws and the restrictions on transfers and assignments under the exemptions from registration upon which the Company is relying to offer, issue and sell the Securities, any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the Purchasers.

 

5.7 No Third Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

 

5.8 Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the Commonwealth of Massachusetts, without regard to the principles of conflicts of law thereof.  Each party agrees that all Proceedings concerning the interpretations, enforcement, and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees, or agents) shall be commenced exclusively in the state and federal courts sitting in the Commonwealth of Massachusetts. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of Boston for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Proceeding is improper or is an inconvenient venue for such Proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.  The parties hereby waive all rights to a trial by jury.  If a party shall commence a Proceeding to enforce any provisions of the Transaction Documents, then the prevailing party in such Proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.

 

5.9 Execution.  This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement, and shall become effective against the Company and each Purchaser when counterparts have been signed by the Company and such Purchaser and delivered to each other, it being understood that the Company and such Purchaser need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

 

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

 

5.11 Remedies.  In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents.  The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agrees to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

 

5.12 Independent Nature of Purchasers’ Obligations and Rights.  The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document.  Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents.  Subject to Section 5.4, each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose.  Each Purchaser has been represented by its own separate legal counsel in their review and negotiation of the Transaction Documents.

 

5.13 Construction. The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments hereto.

 

5.14 Rescission and Withdrawal Right.  Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever a Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

 

[signature pages follow]

 

  

10

  

           

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

	
Pressure BioSciences, Inc.

 

 

	
Address for Notice:

	
By:__________________________________________

     Name:  Richard T. Schumacher

     Title:  President and Chief Executive Officer

 

	
14 Norfolk Avenue

Easton, MA  02375

Facsimile:  (508) 580-1829

Attention:  Richard T. Schumacher

	
With a copy to (which shall not constitute notice):

 

Szaferman Lakind

101 Grovers Mill Road

Second Floor

Lawrenceville, NJ 08648

(T) 609-275-0400

(F) 609-275-4511

Attention:  Gregg E. Jaclin, Esq., Partner

 

	  

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

  

11

  

 

[PURCHASER SIGNATURE PAGES TO PRESSURE BIOSCIENCES, INC. SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

 

	FOR INDIVIDUALS:	 	 	 
	Name of Purchaser:	 	 	 
	Signature of Purchaser:	 	 	 
	FOR ENTITIES:	 	 	 
	Name of Purchaser:	 	 	 
	Signature of Authorized Signatory of Purchaser:	 	 	 
	Name of Authorized Signatory:	 	 	 
	Title of Authorized Signatory:	 	 	 
	FOR ALL PURCHASERS:	 	 	 
	Email Address of Purchaser: 	 	 	 
	Fax Number of Purchaser:	 	 	 
	Address for Notice of Purchaser:	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	Address for Delivery of Units for Purchaser (if not same as address for notice):	 	 
	 	 	 	 
	 	 	 	 

 

Subscription Amount: $__________________

 

Units: _______________________  [TO BE COMPLETED BY THE COMPANY AT THE CLOSING.  NUMBER EQUALS SUBSCRIPTION AMOUNT DIVIDED BY THE PER UNIT PURCHASE PRICE]

Taxpayer Identification Number:  [PROVIDE THIS UNDER SEPARATE COVER]

[SIGNATURE PAGES CONTINUE]

 

  

12

  

 

Schedule 3.1(a) Subsidiaries.

PBI BIOSEQ, INC.

PBI SOURCE SCIENTIFIC, INC.

 

  

13

  

Schedule 3.1(g) Capitalization.

	
Stock Type

	 	
Authorized

	 	 	
Outstanding

	 
	
Common

	 	 	50,000,000	 	 	 	11,949,267	 
	
Undesignated Preferred Stock

	 	 	26,086	 	 	 	0	 
	
Series A Convertible Preferred Stock

	 	 	313,960	 	 	 	0	 
	
Series B Convertible Preferred Stock

	 	 	279,256	 	 	 	0	 
	
Series C Convertible Preferred Stock

	 	 	88,098	 	 	 	0	 
	
Series D Convertible Preferred Stock

	 	 	850	 	 	 	300	 
	
Series E Convertible Preferred Stock

	 	 	500	 	 	 	0	 
	
Series G Convertible Preferred Stock

	 	 	240,000	 	 	 	145,320	 
	
Series H Convertible Preferred Stock

	 	 	10,000	 	 	 	10,000	 
	
Series J Convertible Preferred Stock

	 	 	6,250	 	 	 	5,087.5	 
	
Series K Convertible Preferred Stock

	 	 	15,000	 	 	 	 	 
	
Series A Junior Participating Preferred Stock

	 	 	20,000	 	 	 	0	 

The number outstanding in the above tables does not include shares issuable upon the conversion or exercise of any preferred stock, warrants, options or similar securities.  The Company has issued and outstanding warrants to purchase 12,034,599 shares of Common Stock, subject to adjustment in accordance with the terms of the warrants.  The Company has issued and outstanding incentive and non-qualified stock options to purchase 1,793,750 shares of Common Stock and has reserved an additional 39,250 shares of Common Stock for future issuance under the Company’s equity incentive plans.

The Company currently has an outstanding Convertible Promissory Notes issued to the following creditors, in the original principal amount set forth opposite its name:

	
Lender

	 	
Original

Principal Amount

	 	
Current Outstanding Principal Amount

(as of October 1, 2013)

	 	
Maturity Date

	
JMJ Financial

	 	
$125,000

	 	
$125,000

	 	
4/11/14

	
JMJ Financial

	 	
$50,000

	 	
$50,000

	 	
6/26/14

	
Redwood Mgmt.

	 	
$250,000

	 	
$250,000

	 	
6/5/14

	
Iliad Research and Trading LP

	 	
$200,000

	 	
$200,000

	 	
12/4/15

 

The Company currently has outstanding additional debt owed to the following creditors. Clayton A. Struve intends to convert his note into Units in full satisfaction and cancellation of such debt:

 

	
Lender

	 	
Original and Current Outstanding

Principal Amount

	 	
Maturity Date

	  	 	  	 	  
	
Avi Mirman

	 	
$75,000

	 	
none

 

The Company currently owes the following members of the Company’s Board of Directors fees for their service on the Board of Directors in the amounts set forth opposite their names, which fees the Company and each respective director intend to convert into Units in full satisfaction of such fees:

 

	
Director

	 	
Fees Owed

	
Jeffrey N. Peterson

	 	
None

	
Kevin A. Pollack

	 	
None

	
Vito J. Mangiardi

	 	
None

	
Michael S. “Mickey” Urdea

	 	
None

 

Schedule 3.1(i) Material Changes; Undisclosed Events, Liabilities or Developments.

14

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