RadiSys Corporation (NasdaqGS:RSYS) announced that it has entered into a note purchase agreement for a private placement of senior secured promissory notes for gross proceeds of $17,000,000 with Hale Capital Partners and CIDM LendCo, LLC on January 3, 2017. The notes will carry an interest rate equal to the prime rate plus 5.75% currently 10.25% per year payable monthly in arrears and will mature on January 3, 2021. For any interest payment date occurring on or prior to August 31, 2018, the monthly interest payment will be paid in the form of additional notes unless an event of default has occurred and is continuing, in which case all interest shall be paid in cash. Thereafter, the interest will be payable monthly in cash in arrears. Interest on the notes will be computed on the basis of a 360-day year comprising twelve 30-day months. During the continuance of a default or event of default, the notes will bear interest at a rate 5% above the otherwise applicable interest rate. The company will also issue warrants to purchase up to 6,006,667 shares. Each warrant can be exercisable at $1 per share for seven years from the closing date. The company is required to redeem the notes in principal installments of $1,500,000 payable on August 31, 2018, $1,750,000 payable on the last day of the fiscal quarter ending September 30, 2018, $1,250,000 payable on the last day of the fiscal quarter ending December 31, 2018 and $1,500,000 payable on the last day of each fiscal quarter beginning with the fiscal quarter ending March 31, 2019 and continuing through the last full fiscal quarter prior to the term maturity date. In addition, the company will be required to redeem all of the notes upon a change of control and will be required to make certain mandatory redemptions of the notes with the net proceeds of any voluntary or involuntary sale or disposition of assets including casualty losses and condemnation awards, subject to certain exceptions and 33% of the net proceeds from the issuance or sale of any equity unless an event of default exists under the note purchase agreement, in which case it will be 100% of the net proceeds, subject to certain exceptions and limitations. The company may also redeem to notes in whole or in part at any time. All redemptions of the notes whether mandatory, optional or as result of the acceleration of the notes are subject to a prepayment fee as follows: if a prepayment is on or before January 3, 2020, 5% of the principal prepaid; and if prepayment is on or after January 4, 2020 and on or before January 2, 2021, 3% of the principal prepaid. The company will issue the warrants pursuant to exemption provided under Section 4(2). The company will pay $330,000 as expenses in the transaction.