Loan and Security Agreement, dated December 9, 2008



 Exhibit 10.2 
 CHIPX, INCORPORATED 
 BRIDGE BANK, N.A.

 LOAN AND SECURITY AGREEMENT 







 This LOAN AND SECURITY AGREEMENT is entered into as of December 9, 2008, by and
between BRIDGE BANK, N.A. (“Bank”) and CHIPX, INCORPORATED (“Borrower”). 
 RECITALS 

 Borrower wishes to obtain credit from time to time from Bank, and Bank desires to extend credit to Borrower. This Agreement
sets forth the terms on which Bank will advance credit to Borrower, and Borrower will repay the amounts owing to Bank. 
 AGREEMENT 
 The parties agree as follows: 
  

	 	1.	DEFINITIONS AND CONSTRUCTION 

 1.1 Definitions. As used in this Agreement, the following terms shall have the following definitions: 
 “Accounts” means all presently existing and hereafter arising accounts, contract rights, payment intangibles, and all other forms of obligations owing to Borrower arising out of the sale or lease of goods (including, without
limitation, the licensing of software and other technology) or the rendering of services by Borrower, whether or not earned by performance, and any and all credit insurance, guaranties, and other security therefor, as well as all merchandise
returned to or reclaimed by Borrower and Borrower’s Books relating to any of the foregoing. 
 “Advance” or
“Advances” means a cash advance or cash advances under the Revolving Facility. 
 “Affiliate” means, with
respect to any Person, any Person that owns or controls directly or indirectly such Person, any Person that controls or is controlled by or is under common control with such Person, and each of such Person’s senior executive officers,
directors, and partners. 
 “Bank Expenses” means all: reasonable costs or expenses (including reasonable
attorneys’ fees and expenses) incurred in connection with the preparation, negotiation, administration, and enforcement of the Loan Documents; reasonable Collateral audit fees; and Bank’s reasonable attorneys’ fees and expenses
incurred in amending, enforcing or defending the Loan Documents (including fees and expenses of appeal), incurred before, during and after an Insolvency Proceeding, whether or not suit is brought. 
 “Borrower’s Books” means all of Borrower’s books and records including: ledgers; records concerning Borrower’s
assets or liabilities, the Collateral, business operations or financial condition; and all computer programs, or tape files, and the equipment, containing such information. 
 “Borrowing Base” means an amount equal to eighty percent (80%) of Eligible Accounts, as determined by Bank with reference to
the most recent Borrowing Base Certificate delivered by Borrower. 
 “Business Day” means any day that is not a
Saturday, Sunday, or other day on which banks in the State of California are authorized or required to close. 
 “Cash” means unrestricted cash and cash equivalents. 
 “Cash Management Sublimit” means a sublimit
for cash management transactions approved by Bank under the Revolving Line subject to the availability under the Revolving Line and the Borrowing Base in an aggregate amount not to exceed $1,000,000 minus, in each case, any amounts
outstanding under the Letter of Credit Sublimit and the Foreign Exchange Sublimit. 
  

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 “Change in Control” shall mean a transaction in which any “person” or
“group” (within the meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly,
of a sufficient number of shares of all classes of stock then outstanding of Borrower ordinarily entitled to vote in the election of directors, empowering such “person” or “group” to elect a majority of the Board of Directors of
Borrower, who did not have such power before such transaction. 
 “Closing Date” means the date of this Agreement.

 “Code” means the California Uniform Commercial Code. 
 “Collateral” means the property described on Exhibit A attached hereto. 
 “Contingent Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person
with respect to (i) any indebtedness, lease, dividend, letter of credit or other obligation of another; (ii) any obligations with respect to undrawn letters of credit, corporate credit cards, or merchant services issued or provided for the
account of that Person; and (iii) all obligations arising under any agreement or arrangement designed to protect such Person against fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that the term
“Contingent Obligation” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determined amount of the
primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by Bank in good faith; provided, however, that such amount
shall not in any event exceed the maximum amount of the obligations under the guarantee or other support arrangement. 
 “Copyrights” means any and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship and derivative work thereof. 
 “Credit Extension” means each Advance, Letter of Credit, Cash Management Services, FX Contracts, or any other extension of credit
by Bank for the benefit of Borrower hereunder. 
 “Daily Balance” means the amount of the Obligations owed at the end
of a given day. 
 “Eligible Accounts” means those Accounts that arise in the ordinary course of Borrower’s
business that comply with all of Borrower’s representations and warranties to Bank set forth in Section 5.4; provided, that standards of eligibility may be fixed and revised from time to time by Bank in Bank’s reasonable judgment and
upon notification thereof to Borrower in accordance with the provisions hereof. Unless otherwise agreed to by Bank, Eligible Accounts shall not include the following: 
 (a) Accounts that the account debtor has failed to pay within ninety (90) days of invoice date; 
 (b) Accounts with respect to an account debtor, thirty-five percent (35%) of whose Accounts the account debtor has failed to pay within ninety (90) days of invoice date; 
 (c) Accounts with respect to which the account debtor is an officer, employee, or agent of Borrower; 
 (d) Accounts with respect to which goods are placed on consignment, guaranteed sale, sale or return, sale on approval, bill and
hold, or other terms by reason of which the payment by the account debtor may be conditional; 
 (e) Accounts with
respect to which the account debtor is an Affiliate of Borrower; 
 (f) Accounts with respect to which the account
debtor does not have its principal place of business in the United States, except for Eligible Foreign Accounts; 
  

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 (g) Accounts with respect to which the account debtor is the United States or any
department, agency, or instrumentality of the United States, except for Accounts of the United States if the payee has assigned its payment rights to Bank and the assignment has been acknowledged under the Assignment of Claims Act of 1940 (31 U.S.C.
3727); 
 (h) Accounts with respect to which Borrower is liable to the account debtor for goods sold or services
rendered by the account debtor to Borrower or for deposits or other property of the account debtor held by Borrower, but only to the extent of any amounts owing to the account debtor against amounts owed to Borrower; 
 (i) the portion of an Eligible Account held by an account debtor pending its final acceptance of inventory sold to it by Borrower (a
“Retention Account”); 
 (j) Accounts with respect to an account debtor, including Subsidiaries and
Affiliates, whose total obligations to Borrower exceed thirty percent (30%) of all Accounts, to the extent such obligations exceed the aforementioned percentage, except as approved in writing by Bank; 
 (k) Accounts with respect to which the account debtor disputes liability or makes any claim with respect thereto as to which Bank
believes, in its sole discretion, that there may be a basis for dispute (but only to the extent of the amount subject to such dispute or claim), or is subject to any Insolvency Proceeding, or becomes insolvent, or goes out of business; and

 (l) Accounts the collection of which Bank reasonably determines to be doubtful. 
 “Eligible Foreign Accounts” means Accounts with respect to which the account debtor does not have its principal place of business
in the United States or Canada and that (i) are supported by one or more letters of credit in an amount and of a tenor, and issued by a financial institution, acceptable to Bank, or (ii) that Bank approves on a case-by-case basis; Bank
approves as Eligible Foreign Accounts owing by Cisco Systems International, B.V. and DisplayLink Ltd, provided Accounts owing by DisplayLink Ltd must be supported by one or more letters of credit in an amount and of a tenor, and issued by a
financial institution, acceptable to Bank. 
 “Equipment” means all present and future machinery, equipment, tenant
improvements, furniture, fixtures, vehicles, tools, parts and attachments in which Borrower has any interest. 
 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations thereunder. 
 “Event of Default” has the meaning assigned in Article 8. 
 “Foreign Exchange Sublimit” means a
sublimit for foreign exchange contracts under the Revolving Line, subject to the availability under the Revolving Line and the Borrowing Base, in an aggregate amount not to exceed $1,000,000 less, in each case, any amounts outstanding under the
Letter of Credit Sublimit and the Cash Management Sublimit. 
 “GAAP” means generally accepted accounting principles
as in effect from time to time. 
 “Indebtedness” means (a) all indebtedness for borrowed money or the deferred
purchase price of property or services, including without limitation reimbursement and other obligations with respect to surety bonds and letters of credit, (b) all obligations evidenced by notes, bonds, debentures or similar instruments,
(c) all capital lease obligations and (d) all Contingent Obligations. 
 “Insolvency Proceeding” means any
proceeding commenced by or against any person or entity under any provision of the United States Bankruptcy Code, as amended, or under any other bankruptcy or insolvency law,

  

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including assignments for the benefit of creditors, formal or informal moratoria, compositions, extension generally with its creditors, or proceedings seeking reorganization, arrangement, or
other relief. 
 “Intellectual Property Collateral” means all of Borrower’s right, title, and interest in and to
the following: Copyrights, Trademarks and Patents; all trade secrets, all design rights, claims for damages by way of past, present and future infringement of any of the rights included above, all licenses or other rights to use any of the
Copyrights, Patents or Trademarks, and all license fees and royalties arising from such use to the extent permitted by such license or rights; all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents; and all proceeds
and products of the foregoing, including without limitation all payments under insurance or any indemnity or warranty payable in respect of any of the foregoing. 
 “Inventory” means all inventory in which Borrower has or acquires any interest, including work in process and finished products intended for sale or lease or to be furnished under a contract of
service, of every kind and description now or at any time hereafter owned by or in the custody or possession, actual or constructive, of Borrower, including such inventory as is temporarily out of its custody or possession or in transit and
including any returns upon any accounts or other proceeds, including insurance proceeds, resulting from the sale or disposition of any of the foregoing and any documents of title representing any of the above, and Borrower’s Books relating to
any of the foregoing. 
 “Investment” means any beneficial ownership of (including stock, partnership interest or
other securities) any Person, or any loan, advance or capital contribution to any Person. 
 “IRC” means the Internal
Revenue Code of 1986, as amended, and the regulations thereunder. 
 “Letter of Credit” means a commercial or standby
letter of credit or similar undertaking issued by Bank at Borrower’s request in accordance with Section 2.1(b). 
 “Letter of Credit Sublimit” means a sublimit for Letters of Credit under the Revolving Line, subject to the availability under the Revolving Line and the Borrowing Base, in an aggregate amount not to exceed $1,000,000 less, in
each case, any amounts outstanding under the Foreign Exchange Sublimit and the Cash Management Sublimit. 
 “Lien”
means any mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance. 
 “Loan Documents”
means, collectively, this Agreement, any note or notes executed by Borrower, and any other agreement entered into in connection with this Agreement, all as amended or extended from time to time. 
 “Material Adverse Effect” means a material adverse effect on (i) the business operations or condition (financial or
otherwise) of Borrower and its Subsidiaries taken as a whole or (ii) the ability of Borrower to repay the Obligations or otherwise perform its obligations under the Loan Documents or (iii) the value or priority of Bank’s security
interests in the Collateral. 
 “Negotiable Collateral” means all letters of credit of which Borrower is a
beneficiary, notes, drafts, instruments, securities, documents of title, and chattel paper, and Borrower’s Books relating to any of the foregoing. 
 “Obligations” means all debt, principal, interest, Bank Expenses and other amounts owed to Bank by Borrower pursuant to this Agreement or any other agreement, whether absolute or contingent, due
or to become due, now existing or hereafter arising, including any interest that accrues after the commencement of an Insolvency Proceeding and including any debt, liability, or obligation owing from Borrower to others that Bank may have obtained by
assignment or otherwise. 
 “Patents” means all patents, patent applications and like protections including without
limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same. 
  

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 “Periodic Payments” means all installments or similar recurring payments that
Borrower may now or hereafter become obligated to pay to Bank pursuant to the terms and provisions of any instrument, or agreement now or hereafter in existence between Borrower and Bank. 
 “Permitted Indebtedness” means: 
 (a) Indebtedness of Borrower in favor of Bank arising under this Agreement or any other Loan Document; 
 (b) Indebtedness existing on the Closing Date and disclosed in the Schedule; 
 (c) Indebtedness secured by a lien described in clause (c) of the defined term “Permitted Liens,” provided (i) such Indebtedness does not exceed the lesser of the cost or fair market value of the equipment
financed with such Indebtedness and (ii) such Indebtedness does not exceed $100,000 in the aggregate at any given time; 
 (d) Subordinated Debt; 
 (e) Reimbursement obligations under corporate credit cards incurred in the
ordinary course of business; 
 (f) Unsecured Indebtedness to trade creditors incurred in the ordinary course of
business; and 
 (g) Other Indebtedness in an amount not to exceed $100,000 at any time outstanding. 
 “Permitted Investment” means: 
 (a) Investments existing on the Closing Date disclosed in the Schedule. 
 (b) Investments in Borrower’s Subsidiaries in an amount up to that necessary to cover the operating expenses of such Subsidiaries incurred in the ordinary course of business, not in any case to exceed $450,000 per month; and

 (c) (i) marketable direct obligations issued or unconditionally guaranteed by the United States of America or any
agency or any State thereof maturing within one (1) year from the date of acquisition thereof, (ii) commercial paper maturing no more than one (1) year from the date of creation thereof and currently having rating of at least A-2 or
P-2 from either Standard & Poor’s Corporation or Moody’s Investors Service, (iii) certificates of deposit maturing no more than one (1) year from the date of investment therein issued by Bank and (iv) Bank’s
money market accounts. 
 “Permitted Liens” means the following: 
 (a) Any Liens existing on the Closing Date and disclosed in the Schedule or arising under this Agreement or the other Loan
Documents; 
 (b) Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or
being contested in good faith by appropriate proceedings, provided the same have no priority over any of Bank’s security interests; 
 (c) Liens (i) upon or in any equipment which was not financed by Bank acquired or held by Borrower or any of its Subsidiaries to secure the purchase price of such equipment or indebtedness
incurred solely for the purpose of financing the acquisition of such equipment, or (ii) existing on such equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements thereon,
and the proceeds of such equipment; 
  

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 (d) Liens incurred in connection with the extension, renewal or refinancing of the
indebtedness secured by Liens of the type described in clauses (a) through (c) above, provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the
indebtedness being extended, renewed or refinanced does not increase. 
 “Person” means any individual, sole
proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or governmental agency.

 “Prime Rate” means the variable rate of interest, per annum, that appears in The Wall Street Journal on the
date of measurement, whether or not such announced rate is the lowest rate available from Bank. 
 “Responsible
Officer” means each of the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer and the Controller of Borrower. 
 “Revolving Facility” means the facility under which Borrower may request Bank to issue Advances, as specified in Section 2.1(a) hereof. 
 “Revolving Line” means a credit extension of up to Two Million Dollars ($2,000,000). 
 “Revolving Maturity Date” means December     , 2010. 
 “Schedule” means the schedule of exceptions attached hereto and approved by Bank, if any. 
 “Subordinated Debt” means any debt incurred by Borrower that is subordinated to the debt owing by Borrower to Bank on terms
acceptable to Bank (and identified as being such by Borrower and Bank). 
 “Subsidiary” means any corporation, company
or partnership in which (i) any general partnership interest or (ii) more than 50% of the stock or other units of ownership which by the terms thereof has the ordinary voting power to elect the Board of Directors, managers or trustees of
the entity, at the time as of which any determination is being made, is owned by Borrower, either directly or through an Affiliate. 
 “Trademarks” means any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of Borrower connected with
and symbolized by such trademarks. 
 1.2 Accounting Terms. All accounting terms not specifically defined herein shall be
construed in accordance with GAAP and all calculations made hereunder shall be made in accordance with GAAP. When used herein, the terms “financial statements” shall include the notes and schedules thereto. 
  

	 	2.	LOAN AND TERMS OF PAYMENT. 

 2.1 Credit Extensions. 
 Borrower promises to pay to the order of Bank, in lawful money of the United States of
America, the aggregate unpaid principal amount of all Credit Extensions made by Bank to Borrower hereunder. Borrower shall also pay interest on the unpaid principal amount of such Credit Extensions at rates in accordance with the terms hereof.

 (a) Revolving Advances. 
 (i) Subject to and upon the terms and conditions of this Agreement, Borrower may request Advances in an aggregate outstanding amount not to exceed the lesser of (i) the Revolving

  

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Line or (ii) the Borrowing Base, minus, in each case, the aggregate face amount of all outstanding Letters of Credit, any amounts outstanding under the Cash Management Sublimit and
the Foreign Exchange Sublimit. Subject to the terms and conditions of this Agreement, amounts borrowed pursuant to this Section 2.1(a) may be repaid and reborrowed at any time prior to the Revolving Maturity Date, at which time all Advances
under this Section 2.1(a) shall be immediately due and payable. Borrower may prepay any Advances without penalty or premium. 
 (ii) Whenever Borrower desires an Advance, Borrower will notify Bank by facsimile transmission or telephone no later than 3:00 p.m. Pacific time, on the Business Day that the Advance is to be made. Each such notification shall be
promptly confirmed by a Payment/Advance Form in substantially the form of Exhibit B hereto. Bank is authorized to make Advances under this Agreement, based upon instructions received from a Responsible Officer or a designee of a
Responsible Officer, or without instructions if in Bank’s discretion such Advances are necessary to meet Obligations which have become due and remain unpaid. Bank shall be entitled to rely on any telephonic notice given by a person who Bank
reasonably believes to be a Responsible Officer or a designee thereof, and Borrower shall indemnify and hold Bank harmless for any damages or loss suffered by Bank as a result of such reliance. Bank will credit the amount of Advances made under this
Section 2.1(a) to Borrower’s deposit account. 
 (b) Letters of Credit. Subject to the terms and conditions of
this Agreement and the availability under the Revolving Line and the Borrowing Base, at any time prior to the Revolving Maturity Date, Bank agrees to issue letters of credit for the account of Borrower (each, a “Letter of Credit” and
collectively, the “Letters of Credit”) in an aggregate outstanding face amount not to exceed $1,000,000 less any amounts outstanding under the Cash Management Sublimit and the Foreign Exchange Sublimit, and that availability under the
Revolving Line shall be reduced by, the Letters of Credit. All Letters of Credit shall be, in form and substance, acceptable to Bank in its sole discretion and shall be subject to the terms and conditions of Bank’s form of standard application
and letter of credit agreement (the “Application”), which Borrower hereby agrees to execute, including Bank’s standard fee. On any drawn but unreimbursed Letter of Credit, the unreimbursed amount shall be deemed an Advance under
Section 2.1(a). If at any time the Revolving Facility is terminated or otherwise ceases to exist. Borrower shall immediately secure in cash all obligations under any outstanding Letters of Credit on terms acceptable to Bank. The obligation of
Borrower to reimburse Bank for drawings made under Letters of Credit shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, the Application, and such Letters of Credit, under
all circumstances whatsoever. Borrower shall indemnify, defend, protect, and hold Bank harmless from any loss, cost, expense or liability, including, without limitation, reasonable attorneys’ fees, arising out of or in connection with any
Letters of Credit, except for expenses caused by Bank’s gross negligence or willful misconduct. 
 (c) Cash Management
Sublimit. Subject to the terms and conditions of this Agreement and the availability under the Revolving Line and the Borrowing Base, Borrower may request cash management services which may include merchant services, direct deposit of payroll,
business credit card, and check cashing services identified in various cash management services agreements related to such services (the “Cash Management Services”) by delivering to Bank such applications on Bank’s standard forms as
requested by Bank; provided, however, that the total amount of the Cash Management Services shall not exceed $1,000,000 less any amounts outstanding under the Letter of Credit Sublimit and the Foreign Exchange Sublimit, and that availability under
the Revolving Line shall be reduced by the Cash Management Sublimit. In addition, Bank may, in its sole discretion, charge as Advances any amounts that become due or owing to Bank in connection with the Cash Management Services. If at any time the
Revolving Facility is terminated or otherwise ceases to exist. Borrower shall immediately secure to Bank’s satisfaction its obligations with respect to any Cash Management Services, and, effective as of such date, the balance in any deposit
accounts held by Bank and the certificates of deposit issued by Bank in Borrower’s name (and any interest paid thereon or proceeds thereof, including any amounts payable upon the maturity or liquidation of such certificates), shall
automatically secure such obligations to the extent of the then outstanding Cash Management Services. Borrower authorizes Bank to hold such balances in pledge and to decline to honor any drafts thereon or any requests by Borrower or any other Person
to pay or otherwise transfer any part of such balances for so long as the Cash Management Services continue. 
 (d) Foreign
Exchange Sublimit. Subject to and upon the terms and conditions of this Agreement and any other agreement that Borrower may enter into with the Bank in connection with foreign exchange transactions (“FX Contracts”) and subject to the
availability under the Revolving Line and the Borrowing

  

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Base, a Borrower may request Bank to enter into FX Contracts with Borrower due not later than the Revolving Maturity Date unless cash secured on terms satisfactory to Bank. Borrower shall pay any
standard issuance and other fees that Bank notifies Borrower will be charged for issuing and processing FX Contracts for a Borrower. The FX Amount shall at all times be equal to or less than $1,000,000 minus any amounts outstanding under the Letter
of Credit Sublimit and the Cash Management Sublimit. The “FX Amount” shall equal the amount determined by multiplying (i) the aggregate amount, in United States Dollars, of FX Contracts between Borrower and Bank remaining outstanding
as of any date of determination by (ii) the applicable Foreign Exchange Reserve Percentage as of such date. The “Foreign Exchange Reserve Percentage” shall be a percentage as determined by Bank, in its sole discretion from time to
time. If at any time the Revolving Facility is terminated or otherwise ceases to exist. Borrower shall immediately secure in cash all obligations under the Foreign Exchange Sublimit on terms acceptable to Bank. 
 (e) Growth Capital Term Loan. Subject to and upon the terms and conditions of this Agreement, Bank agrees to make an advance to
Borrower on the Closing Date in an aggregate amount not to exceed Two Million Dollars ($2,000,000) (the “Growth Capital Term Loan”), the first proceeds of which shall be paid to Comerica Bank in satisfaction of all amounts that Borrower
owes it. Borrower shall make twenty-four (24) equal monthly installments of principal, plus all accrued interest beginning on January    , 2009 and continuing on the same day of each month thereafter through December
     , 2010 (the “Growth Capital Maturity Date”),. All amounts owing under this Section 2.1(e) and any other amounts owing under this Agreement shall be immediately due and payable on the Growth Capital Maturity
Date. The Growth Capital Term Loan, once repaid, may not be reborrowed. Borrower may prepay all or any part of the Growth Capital Term Loan without penalty or premium. 
 2.2 Overadvances. If the sum of aggregate amount of the outstanding Advances plus any amounts outstanding under the Letter of Credit Sublimit, the Cash Management Sublimit and the Foreign
Exchange Sublimit exceeds the lesser of the Revolving Line or the Borrowing Base at any time, Borrower shall immediately pay to Bank, in cash, the amount of such excess. Unless otherwise agreed by Bank, such payment shall be deemed to be made on
account of the Advances. 
 2.3 Interest Rates, Payments, and Calculations. 
 (a) Interest Rates. 
 (i) Advances. Except as set forth in Section 2.3(b), the Advances shall bear interest, on the outstanding Daily Balance thereof, at a rate equal to the Prime Rate plus 1.0%, provided
however, that for the purpose of this calculation, in no event shall the Prime Rate be less than 4.0% per annum. 
 (ii) Growth Capital Term Loan. Except as set forth in Section 2.3(b), the Growth Capital Term Loan shall bear interest, on the outstanding Daily Balance thereof, at a rate equal to the Prime Rate plus 1.75%, provided
however, that for the purpose of this calculation, in no event shall the Prime Rate be less than 4.0% per annum. 
 (b)
Late Fee; Default Rate. If any payment is not made within ten (10) days after the date such payment is due, Borrower shall pay Bank a late fee equal to the lesser of (i) five percent (5%) of the amount of such unpaid
amount or (ii) the maximum amount permitted to be charged under applicable law. All Obligations shall bear interest, from and after the occurrence and during the continuance of an Event of Default, at a rate equal to five (5) percentage
points above the interest rate applicable immediately prior to the occurrence of the Event of Default. 
 (c) Payments.
Interest hereunder shall be due and payable on the tenth calendar day of each month during the term hereof. Bank shall, at its option, charge such interest, all Bank Expenses, and all Periodic Payments against any of Borrower’s deposit accounts
or against the Revolving Line, in which case those amounts shall thereafter accrue interest at the rate then applicable hereunder. Any interest not paid when due shall be compounded by becoming a part of the Obligations, and such interest shall
thereafter accrue interest at the rate then applicable hereunder. All payments shall be free and clear of any taxes, withholdings, duties, impositions or other charges, to the end that Bank will receive the entire amount of any Obligations payable
hereunder, regardless of source of payment. 
  

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 (d) Computation. In the event the Prime Rate is changed from time to time hereafter,
the applicable rate of interest hereunder shall be increased or decreased, effective as of the day the Prime Rate is changed, by an amount equal to such change in the Prime Rate. All interest chargeable under the Loan Documents shall be computed on
the basis of a three hundred sixty (360) day year for the actual number of days elapsed. 
 2.4 Crediting Payments.
Prior to the occurrence of an Event of Default, Bank shall credit a wire transfer of funds, check or other item of payment to such deposit account or Obligation as Borrower specifies. After the occurrence of an Event of Default, the receipt by Bank
of any wire transfer of funds, check, or other item of payment shall be immediately applied to conditionally reduce Obligations, but shall not be considered a payment on account unless such payment is of immediately available federal funds or unless
and until such check or other item of payment is honored when presented for payment. Notwithstanding anything to the contrary contained herein, any wire transfer or payment received by Bank after 12:00 noon Pacific time shall be deemed to have been
received by Bank as of the opening of business on the immediately following Business Day. Whenever any payment to Bank under the Loan Documents would otherwise be due (except by reason of acceleration) on a date that is not a Business Day, such
payment shall instead be due on the next Business Day, and additional fees or interest, as the case may be, shall accrue and be payable for the period of such extension. 
 2.5 Fees. Borrower shall pay to Bank the following: 
 (a) Facility
Fee. On the Closing Date, a facility fee equal to $10,000 on account of the Revolving Line and $10,000 on account of the Growth Capital Term Loan, which shall be nonrefundable; and 
 (b) Bank Expenses. On the Closing Date, all Bank Expenses incurred through the Closing Date, including reasonable attorneys’
fees and expenses and, after the Closing Date, all Bank Expenses, including reasonable attorneys’ fees and expenses, as and when they are incurred by Bank. 
 2.6 Term. This Agreement shall become effective on the Closing Date and, subject to Section 12.7, shall continue in full force and effect for so long as any Obligations remain
outstanding or Bank has any obligation to make Credit Extensions under this Agreement. Notwithstanding the foregoing, Bank shall have the right to terminate its obligation to make Credit Extensions under this Agreement immediately and without notice
upon the occurrence and during the continuance of an Event of Default. Notwithstanding termination, Bank’s Lien on the Collateral shall remain in effect for so long as any Obligations are outstanding. 
  

	 	3.	CONDITIONS OF LOANS. 

 3.1 Conditions Precedent to Initial Credit Extension. The obligation of Bank to make the initial Credit Extension is subject to the condition precedent that Bank shall have received, in form and substance satisfactory to Bank, the
following: 
 (a) this Agreement; 
 (b) a certificate of the Secretary of Borrower with respect to incumbency and resolutions authorizing the execution and delivery of this Agreement; 
 (c) UCC National Form Financing Statement; 
 (d) an intellectual property security agreement; 
 (e) a warrant to
purchase stock; 
 (f) agreement to provide insurance; 
 (g) a payoff letter and UCC termination statement with respect to the lien in favor of Comerica Bank; 
  

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 (h) unconditional guaranty from each of ChipX, (Israel) Ltd and ChipX, UK Limited;

 (i) payment of the fees and Bank Expenses then due specified in Section 2.5 hereof; 
 (j) current financial statements of Borrower; and 
 (k) such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate. 
 3.2 Conditions Precedent to all Credit Extensions. The obligation of Bank to make each Credit Extension, including the initial Credit Extension, is further subject to the following conditions:

 (a) timely receipt by Bank of the Payment/Advance Form as provided in Section 2.1; and 
 (b) the representations and warranties contained in Section 5 shall be true and correct in all material respects on and as of
the date of such Payment/Advance Form and on the effective date of each Credit Extension as though made at and as of each such date, and no Event of Default shall have occurred and be continuing, or would exist after giving effect to such Credit
Extension. The making of each Credit Extension shall be deemed to be a representation and warranty by Borrower on the date of such Credit Extension as to the accuracy of the facts referred to in this Section 3.2. 
 4. CREATION OF SECURITY INTEREST. 
 4.1 Grant of Security Interest. Borrower grants and pledges to Bank a continuing security interest in all presently existing and hereafter acquired or arising Collateral in order to secure prompt
repayment of any and all Obligations and in order to secure prompt performance by Borrower of each of its covenants and duties under the Loan Documents. Except as set forth in the Schedule, such security interest constitutes a valid, first priority
security interest in the presently existing Collateral, and will constitute a valid, first priority security interest in Collateral acquired after the date hereof. 
 4.2 Delivery of Additional Documentation Required. Borrower shall from time to time execute and deliver to Bank, at the request of Bank, all Negotiable Collateral, all financing statements and
other documents that Bank may reasonably request, in form satisfactory to Bank, to perfect and continue the perfection of Bank’s security interests in the Collateral and in order to fully consummate all of the transactions contemplated under
the Loan Documents. Borrower from time to time may deposit with Bank specific time deposit accounts to secure specific Obligations. Borrower authorizes Bank to hold such balances in pledge and to decline to honor any drafts thereon or any request by
Borrower or any other Person to pay or otherwise transfer any part of such balances for so long as the Obligations are outstanding. 
 4.3 Right to Inspect. Bank (through any of its officers, employees, or agents) shall have the right, upon reasonable prior notice, from time to time during Borrower’s usual business hours but no more than once a year (unless an
Event of Default has occurred and is continuing), to inspect Borrower’s Books and to make copies thereof and to check, test, and appraise the Collateral in order to verify Borrower’s financial condition or the amount, condition of or any
other matter relating to, the Collateral. 
 5. REPRESENTATIONS AND WARRANTIES. 
 Borrower represents and warrants as follows: 
 5.1 Due Organization and Qualification. Borrower and each Subsidiary is a corporation duly existing under the laws of its state of incorporation and qualified and licensed to do business in any
state in which the conduct of its business or its ownership of property requires that it be so qualified. 
  

 10. 








 5.2 Due Authorization; No Conflict. The execution, delivery, and performance of the
Loan Documents are within Borrower’s powers, have been duly authorized, and are not in conflict with nor constitute a breach of any provision contained in Borrower’s Certificate of Incorporation or Bylaws, nor will they constitute an event
of default under any material agreement to which Borrower is a party or by which Borrower is bound. Borrower is not in default under any material agreement to which it is a party or by which it is bound. 
 5.3 No Prior Encumbrances. Borrower has good and marketable title to its property, free and clear of Liens, except for Permitted
Liens. 
 5.4 Bona Fide Eligible Accounts. The Eligible Accounts are bona fide existing obligations. The property and
services giving rise to such Eligible Accounts has been delivered or rendered to the account debtor or to the account debtor’s agent for immediate and unconditional acceptance by the account debtor. Borrower has not received notice of actual or
imminent Insolvency Proceeding of any account debtor that is included in any Borrowing Base Certificate as an Eligible Account. 
 5.5 Merchantable Inventory. All Inventory is in all material respects of good and marketable quality, free from all material defects, except for Inventory for which adequate reserves have been made. 
 5.6 Intellectual Property Collateral. Borrower is the sole owner of the Intellectual Property Collateral, except for non-exclusive
licenses granted by Borrower to its customers in the ordinary course of business. Each of the Patents is valid and enforceable, and no part of the Intellectual Property Collateral has been judged invalid or unenforceable, in whole or in part, and no
claim has been made that any part of the Intellectual Property Collateral violates the rights of any third party. Except as set forth in the Schedule, Borrower’s rights as a licensee of intellectual property do not give rise to more than five
percent (5%) of its gross revenue in any given month, including without limitation revenue derived from the sale, licensing, rendering or disposition of any product or service. Except as set forth in the Schedule, Borrower is not a party to, or
bound by, any material agreement that restricts the grant by Borrower of a security interest in Borrower’s rights under such agreement other than customary anti-assignment provisions. 
 5.7 Name; Location of Chief Executive Office. Except as disclosed in the Schedule, Borrower has not done business under any name
other than that specified on the signature page hereof. The chief executive office of Borrower is located at the address indicated in Section 10 hereof. All Borrower’s Inventory and Equipment is located only at the location set forth in
Section 10 hereof. 
 5.8 Litigation. Except as set forth in the Schedule, there are no actions or proceedings
pending by or against Borrower or any Subsidiary before any court or administrative agency in which an adverse decision could have a Material Adverse Effect, or a material adverse effect on Borrower’s interest or Bank’s security interest
in the Collateral. 
 5.9 No Material Adverse Change in Financial Statements. All consolidated and consolidating
financial statements related to Borrower and any Subsidiary that Bank has received from Borrower fairly present in all material respects Borrower’s financial condition as of the date thereof and Borrower’s consolidated and consolidating
results of operations for the period then ended. There has not been a material adverse change in the consolidated or the consolidating financial condition of Borrower since the date of the most recent of such financial statements submitted to Bank.

 5.10 Solvency, Payment of Debts. Borrower is solvent and able to pay its debts (including trade debts) as they mature.

 5.11 Regulatory Compliance. Borrower and each Subsidiary have met the minimum funding requirements of ERISA with
respect to any employee benefit plans subject to ERISA, and no event has occurred resulting from Borrower’s failure to comply with ERISA that could result in Borrower’s incurring any material liability. Borrower is not an “investment
company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940. Borrower is not engaged principally, or as one of the important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock

  

 11. 








 
(within the meaning of Regulations T and U of the Board of Governors of the Federal Reserve System). Borrower has complied with all the provisions of the Federal Fair Labor Standards Act.
Borrower has not violated any statutes, laws, ordinances or rules applicable to it, violation of which could have a Material Adverse Effect. 
 5.12 Environmental Condition. Except as disclosed in the Schedule, none of Borrower’s or any Subsidiary’s properties or assets has ever been used by Borrower or any Subsidiary or, to the
best of Borrower’s knowledge, by previous owners or operators, in the disposal of, or to produce, store, handle, treat, release, or transport, any hazardous waste or hazardous substance other than in accordance with applicable law; to the best
of Borrower’s knowledge, none of Borrower’s properties or assets has ever been designated or identified in any manner pursuant to any environmental protection statute as a hazardous waste or hazardous substance disposal site, or a
candidate for closure pursuant to any environmental protection statute; no lien arising under any environmental protection statute has attached to any revenues or to any real or personal property owned by Borrower or any Subsidiary; and neither
Borrower nor any Subsidiary has received a summons, citation, notice, or directive from the Environmental Protection Agency or any other federal, state or other governmental agency concerning any action or omission by Borrower or any Subsidiary
resulting in the releasing, or otherwise disposing of hazardous waste or hazardous substances into the environment. 
 5.13
Taxes. Borrower and each Subsidiary have filed or caused to be filed all tax returns required to be filed, and have paid, or have made adequate provision for the payment of, all taxes reflected therein. 
 5.14 Subsidiaries. Borrower does not own any stock, partnership interest or other equity securities of any Person, except for
Permitted Investments. 
 5.15 Government Consents. Borrower and each Subsidiary have obtained all material consents,
approvals and authorizations of, made all declarations or filings with, and given all notices to, all governmental authorities that are necessary for the continued operation of Borrower’s business as currently conducted. 
 5.16 Accounts. None of Borrower’s nor any Subsidiary’s property is maintained or invested with a Person other than Bank.

 5.17 Full Disclosure. No representation, warranty or other statement made by Borrower in any certificate or written
statement furnished to Bank contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained in such certificates or statements not misleading. 
  

	 	6.	AFFIRMATIVE COVENANTS. 

 Borrower shall do all of the following: 
 6.1 Good Standing. Borrower shall maintain its and each of its
Subsidiaries’ corporate existence and good standing in its jurisdiction of incorporation and maintain qualification in each jurisdiction in which it is required under applicable law. Borrower shall maintain, and shall cause each of its
Subsidiaries to maintain, in force all licenses, approvals and agreements, the loss of which could have a Material Adverse Effect. 
 6.2 Government Compliance. Borrower shall meet, and shall cause each Subsidiary to meet, the minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA. Borrower shall comply, and shall cause
each Subsidiary to comply, with all statutes, laws, ordinances and government rules and regulations to which it is subject, noncompliance with which could have a Material Adverse Effect. 
 6.3 Financial Statements, Reports, Certificates. Borrower shall deliver the following to Bank: (a) as soon as available, but in
any event within thirty (30) days after the end of each calendar month, a company prepared consolidated balance sheet, income, and cash flow statement covering Borrower’s consolidated operations during such period, prepared in accordance
with GAAP, consistently applied, in a form acceptable to

  

 12. 








 
Bank and certified by a Responsible Officer, together with a backlog report in form and substance reasonably satisfactory to Bank; (b) as soon as available, but in any event within one
hundred fifty (150) days after the end of Borrower’s fiscal year, audited consolidated financial statements of Borrower prepared in accordance with GAAP, consistently applied, together with an unqualified opinion (other than a
going-concern opinion) on such financial statements of an independent certified public accounting firm reasonably acceptable to Bank; (c) copies of all statements, reports and notices sent or made available generally by Borrower to its security
holders or to any holders of Subordinated Debt and, if applicable, all reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission; (d) promptly upon receipt of notice thereof, a report of any legal actions pending or
threatened against Borrower or any Subsidiary that would reasonably be expected to result in damages or costs to Borrower or any Subsidiary of One Hundred Thousand Dollars ($100,000) or more; (e) as soon as available, but in any event within
thirty (30) days after Borrower’s fiscal year end, the Board-approved operating budget for the following year; and (f) such budgets, sales projections, operating plans or other financial information as Bank may reasonably request from time
to time. 
 On the fifteenth and thirtieth days of each month, Borrower shall deliver to Bank a Borrowing Base Certificate
signed by a Responsible Officer in substantially the form of Exhibit C hereto, together with aged listings of accounts receivable and accounts payable, until Borrower achieves two (2) consecutive quarters of profitability, and thereafter
within thirty days after the end of each calendar month. 
 Borrower shall deliver to Bank with the monthly financial statements
a Compliance Certificate signed by a Responsible Officer in substantially the form of Exhibit D hereto. 
 Bank shall
have a right from time to time hereafter to audit Borrower’s Accounts and appraise Collateral at Borrower’s expense, including an audit prior to the first anniversary of the Closing Date, provided that such audits will be conducted no more
often than every twelve (12) months unless an Event of Default has occurred and is continuing. 
 6.4 Inventory;
Returns. Borrower shall keep all Inventory in good and marketable condition, free from all material defects except for Inventory for which adequate reserves have been made. Returns and allowances, if any, as between Borrower and its account
debtors shall be on the same basis and in accordance with the usual customary practices of Borrower, as they exist at the time of the execution and delivery of this Agreement. Borrower shall promptly notify Bank of all returns and recoveries and of
all disputes and claims, where the return, recovery, dispute or claim involves more than One Hundred Thousand Dollars ($100,000) in the aggregate. 
 6.5 Taxes. Borrower shall make, and shall cause each Subsidiary to make, due and timely payment or deposit of all material federal, state, and local taxes, assessments, or contributions required of
it by law, and will execute and deliver to Bank, on demand, appropriate certificates attesting to the payment or deposit thereof; and Borrower will make, and will cause each Subsidiary to make, timely payment or deposit of all material tax payments
and withholding taxes required of it by applicable laws, including, but not limited to, those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal income taxes, and will, upon request, furnish Bank with proof
satisfactory to Bank indicating that Borrower or a Subsidiary has made such payments or deposits; provided that Borrower or a Subsidiary need not make any payment if the amount or validity of such payment is contested in good faith by appropriate
proceedings and is reserved against (to the extent required by GAAP) by Borrower. 
 6.6 Insurance. 
 (a) Borrower, at its expense, shall keep the Collateral insured against loss or damage by fire, theft, explosion, sprinklers, and all
other hazards and risks, and in such amounts, as ordinarily insured against by other owners in similar businesses conducted in the locations where Borrower’s business is conducted on the date hereof. Borrower shall also maintain insurance
relating to Borrower’s business, ownership and use of the Collateral in amounts and of a type that are customary to businesses similar to Borrower’s. 
 (b) All such policies of insurance shall be in such form, with such companies, and in such amounts as are reasonably satisfactory to Bank. All such policies of property insurance shall contain a
lender’s

  

 13. 








 
loss payable endorsement, in a form satisfactory to Bank, showing Bank as an additional loss payee thereof, and all liability insurance policies shall show the Bank as an additional insured and
shall specify that the insurer must give at least twenty (20) days notice to Bank before canceling its policy for any reason. Upon Bank’s request, Borrower shall deliver to Bank certified copies of such policies of insurance and evidence
of the payments of all premiums therefor. All proceeds payable under any such policy shall, at the option of Bank, be payable to Bank to be applied on account of the Obligations. 
 6.7 Accounts. Borrower shall maintain and shall cause each of its Subsidiaries to maintain all of its depository, operating, and
investment accounts with Bank. 
 6.8 Maximum Loss/Profitability. Borrower may suffer a quarterly loss of no more than
($100,000) for the fourth quarter of FY 2008; no more than ($650,000) for the first quarter of FY 2009; and no more than ($150,000) for the second quarter of FY 2009; thereafter Borrower shall maintain a profit of at least at least $1.00 for each
fiscal quarter. 
 6.9 Asset Coverage Ratio. Borrower shall maintain at all times a ratio of Cash at Bank plus Eligible
Accounts to Indebtedness to Bank of not more than 1.35 to 1.00, measured as at the end of each month. 
 6.10 OKI
Payment. Borrower shall receive payment of $1,215,000 from OKI no later than January 15, 2009. 
 6.11 Intellectual
Property Rights. 
 (a) Borrower shall promptly give Bank written notice of any applications or registrations of
intellectual property rights filed with the United States Patent and Trademark Office, including the date of such filing and the registration or application numbers, if any. Borrower shall (i) give Bank notice no later than thirty
(30) days after the filing of any applications or registrations with the United States Copyright Office, including the title of such intellectual property rights to be registered, as such title will appear on such applications or registrations,
and the date such applications or registrations will be filed, and (ii) no later than thirty (30) days after the filing of any such applications or registrations, shall promptly execute such documents as Bank may reasonably request for
Bank to maintain its perfection in such intellectual property rights to be registered by Borrower, and upon the request of Bank, shall file such documents simultaneously with the filing of any such applications or registrations. Upon filing any such
applications or registrations with the United States Copyright Office, Borrower shall promptly provide Bank with (i) a copy of such applications or registrations, without the exhibits, if any, thereto, (ii) evidence of the filing of any
documents requested by Bank to be filed for Bank to maintain the perfection and priority of its security interest in such intellectual property rights, and (iii) the date of such filing. 
 (b) Bank may audit Borrower’s Intellectual Property Collateral to confirm compliance with this Section, provided such audit may
not occur more often than once per year, unless an Event of Default has occurred and is continuing. Bank shall have the right, but not the obligation, to take, at Borrower’s sole expense, any actions that Borrower is required under this Section
to take but which Borrower fails to take, after 15 days’ notice to Borrower. Borrower shall reimburse and indemnify Bank for all reasonable costs and reasonable expenses incurred in the reasonable exercise of its rights under this Section.

 6.12 Further Assurances. At any time and from time to time Borrower shall execute and deliver such further instruments
and take such further action as may reasonably be requested by Bank to effect the purposes of this Agreement. 
  

	 	7.	NEGATIVE COVENANTS. 

 Borrower will not do any of the following: 
 7.1 Dispositions. Convey, sell, lease, transfer or otherwise
dispose of (collectively, a “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, other than: 
  

 14. 








 
(i) Transfers of Inventory in the ordinary course of business; (ii) Transfers of non-exclusive licenses and similar arrangements for the use of the property of Borrower or its Subsidiaries
in the ordinary course of business; or (iii) Transfers of worn-out, obsolete or unnecessary Equipment which was not financed by Bank. 
 7.2 Change in Business; Change in Control or Executive Office. Engage in any business, or permit any of its Subsidiaries to engage in any business, other than the businesses currently engaged in by
Borrower and any business substantially similar or related thereto (or incidental thereto); or cease to conduct business in the manner conducted by Borrower as of the Closing Date; or suffer or permit a Change in Control; or without thirty
(30) days prior written notification to Bank, relocate its chief executive office or state of incorporation or change its legal name; or without Bank’s prior written consent, change the date on which its fiscal year ends. 
 7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with or into any other
business organization, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person. 
 7.4 Indebtedness. Create, incur, assume or be or remain liable with respect to any Indebtedness, or permit any Subsidiary so to do, other than Permitted Indebtedness. 
 7.5 Encumbrances. Create, incur, assume or suffer to exist any Lien with respect to any of its property, or assign or otherwise
convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries so to do, except for Permitted Liens, or agree with any Person other than Bank not to grant a security interest in, or otherwise encumber, any
of its property, or permit any Subsidiary to do so. 
 7.6 Distributions. Pay any dividends or make any other
distribution or payment on account of or in redemption, retirement or purchase of any capital stock, or permit any of its Subsidiaries to do so (other than with respect to dividends paid by a Subsidiary to Borrower), except that Borrower may
repurchase the stock of former employees pursuant to stock repurchase agreements as long as an Event of Default does not exist prior to such repurchase or would not exist after giving effect to such repurchase. 
 7.7 Investments. Directly or indirectly acquire or own, or make any Investment in or to any Person, or permit any of its Subsidiaries
so to do, other than Permitted Investments; or maintain or invest any of its property with a Person other than Bank or permit any of its Subsidiaries to do so unless such Person has entered into an account control agreement with Bank in form and
substance satisfactory to Bank; or suffer or permit any Subsidiary to be a party to, or be bound by, an agreement that restricts such Subsidiary from paying dividends or otherwise distributing property to Borrower. 
 7.8 Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of
Borrower (other than a Subsidiary of Borrower) except for transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length
transaction with a non-affiliated Person. 
 7.9 Subordinated Debt. Make any payment in respect of any Subordinated Debt,
or permit any of its Subsidiaries to make any such payment, except in compliance with the terms of such Subordinated Debt, or amend any provision contained in any documentation relating to the Subordinated Debt without Bank’s prior written
consent. 
 7.10 Inventory and Equipment. Store the Inventory or the Equipment with a bailee, warehouseman, or other
third party unless the third party has been notified of Bank’s security interest and Bank (a) has received an acknowledgment from the third party that it is holding or will hold the Inventory or Equipment for Bank’s benefit or
(b) is in pledge possession of the warehouse receipt, where negotiable, covering such Inventory or Equipment. Store or maintain any Equipment or Inventory at a location other than the location set forth in Section 10 of this Agreement.

  

 15. 








 7.11 Compliance. Become an “investment company” or be controlled by an
“investment company,” within the meaning of the Investment Company Act of 1940, or become principally engaged in, or undertake as one of its important activities, the business of extending credit for the purpose of purchasing or carrying
margin stock, or use the proceeds of any Credit Extension for such purpose. Fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur, fail to comply with the Federal
Fair Labor Standards Act or violate any law or regulation, which violation could have a Material Adverse Effect, or a material adverse effect on the Collateral or the priority of Bank’s Lien on the Collateral, or permit any of its Subsidiaries
to do any of the foregoing. 
  

	 	8.	EVENTS OF DEFAULT. 

 Any
one or more of the following events shall constitute an Event of Default by Borrower under this Agreement: 
 8.1 Payment
Default. If Borrower fails to pay, when due, any of the Obligations; 
 8.2 Covenant Default. 
 (a) If Borrower fails to perform any obligation under Article 6 or violates any of the covenants contained in Article 7 of this
Agreement; or 
 (b) If Borrower fails or neglects to perform or observe any other material term, provision, condition,
covenant contained in this Agreement, in any of the Loan Documents, or in any other present or future agreement between Borrower and Bank and as to any default under such other term, provision, condition or covenant that can be cured, has failed to
cure such default within ten days after Borrower receives notice thereof or any officer of Borrower becomes aware thereof; provided, however, that if the default cannot by its nature be cured within the ten day period or cannot after diligent
attempts by Borrower be cured within such ten day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional reasonable period (which shall not in any case exceed 30 days) to attempt to cure such
default, and within such reasonable time period the failure to have cured such default shall not be deemed an Event of Default but no Credit Extensions will be made. 
 8.3 Material Adverse Effect. If there occurs any circumstance or circumstances that could have a Material Adverse Effect; 
 8.4 Attachment. If any portion of Borrower’s assets is attached, seized, subjected to a writ or distress warrant, or is levied
upon, or comes into the possession of any trustee, receiver or person acting in a similar capacity and such attachment, seizure, writ or distress warrant or levy has not been removed, discharged or rescinded within ten (10) days, or if Borrower
is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of its business affairs, or if a judgment or other claim becomes a lien or encumbrance upon any material portion of Borrower’s
assets, or if a notice of lien, levy, or assessment is filed of record with respect to any of Borrower’s assets by the United States Government, or any department, agency, or instrumentality thereof, or by any state, county, municipal, or
governmental agency, and the same is not paid within ten (10) days after Borrower receives notice thereof, provided that none of the foregoing shall constitute an Event of Default where such action or event is stayed or an adequate bond has
been posted pending a good faith contest by Borrower (provided that no Credit Extensions will be required to be made during such cure period); 
 8.5 Insolvency. If Borrower becomes insolvent, or if an Insolvency Proceeding is commenced by Borrower, or if an Insolvency Proceeding is commenced against Borrower and is not dismissed or stayed
within thirty (30) days (provided that no Credit Extensions will be made prior to the dismissal of such Insolvency Proceeding); 
 8.6 Other Agreements. If there is a default or other failure to perform in any agreement to which Borrower is a party or by which it is bound resulting in a right by a third party or parties, whether or not exercised, to accelerate
the maturity of any Indebtedness in an amount in excess of Fifty Thousand Dollars ($50,000) or which could have a Material Adverse Effect; 
  

 16. 








 8.7 Judgments. If a judgment or judgments for the payment of money in an amount,
individually or in the aggregate, of at least Fifty Thousand Dollars ($50,000) shall be rendered against Borrower and shall remain unsatisfied and unstayed for a period of ten (10) days (provided that no Credit Extensions will be made prior to
the satisfaction or stay of such judgment); or 
 8.8 Misrepresentations. If any material misrepresentation or material
misstatement exists now or hereafter in any warranty or representation set forth herein or in any certificate delivered to Bank by any Responsible Officer pursuant to this Agreement or to induce Bank to enter into this Agreement or any other Loan
Document. 
 8.9 Guaranty. If any guaranty of all or a portion of the Obligations (a “Guaranty”) ceases for any
reason to be in full force and effect, or any guarantor fails to perform any obligation under any Guaranty or a security agreement securing any Guaranty (collectively, the “Guaranty Documents”), or any event of default occurs under any
Guaranty Document or any guarantor revokes or purports to revoke a Guaranty, or any material misrepresentation or material misstatement exists now or hereafter in any warranty or representation set forth in any Guaranty Document or in any
certificate delivered to Bank in connection with any Guaranty Document, or if any of the circumstances described in Sections 8.3 through 8.8 occur with respect to any guarantor or any guarantor dies or becomes subject to any criminal prosecution, or
any circumstances arise causing Bank, in good faith, to become insecure as to the satisfaction of any of any guarantor’s obligations under the Guaranty Documents. 
  


	 	9.	BANK’S RIGHTS AND REMEDIES. 

 9.1 Rights and Remedies. Upon the occurrence and during the continuance of an Event of Default, Bank may, at its election, without notice of its election and without demand, do any one or more of the following, all of which are
authorized by Borrower: 
 (a) Declare all Obligations, whether evidenced by this Agreement, by any of the other Loan
Documents, or otherwise, immediately due and payable (provided that upon the occurrence of an Event of Default described in Section 8.5, all Obligations shall become immediately due and payable without any action by Bank); 
 (b) Cease advancing money or extending credit to or for the benefit of Borrower under this Agreement or under any other agreement
between Borrower and Bank; 
 (c) Settle or adjust disputes and claims directly with account debtors for amounts, upon
terms and in whatever order that Bank reasonably considers advisable; 
 (d) Make such payments and do such acts as Bank
considers necessary or reasonable to protect its security interest in the Collateral. Borrower agrees to assemble the Collateral if Bank so requires, and to make the Collateral available to Bank as Bank may designate. Borrower authorizes Bank to
enter the premises where the Collateral is located, to take and maintain possession of the Collateral, or any part of it, and to pay, purchase, contest, or compromise any encumbrance, charge, or lien which in Bank’s determination appears to be
prior or superior to its security interest and to pay all expenses incurred in connection therewith. With respect to any of Borrower’s owned premises. Borrower hereby grants Bank a license to enter into possession of such premises and to occupy
the same, without charge, in order to exercise any of Bank’s rights or remedies provided herein, at law, in equity, or otherwise; 
 (e) Set off and apply to the Obligations any and all (i) balances and deposits of Borrower held by Bank, or (ii) indebtedness at any time owing to or for the credit or the account of
Borrower held by Bank; 
 (f) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for
sale, and sell (in the manner provided for herein) the Collateral. Bank is hereby granted a license or other right,

  

 17. 








 
solely pursuant to the provisions of this Section 9.1, to use, without charge, Borrower’s labels, patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks,
service marks, and advertising matter, or any property of a similar nature, as it pertains to the Collateral, in completing production of advertising for sale, and selling any Collateral and, in connection with Bank’s exercise of its rights
under this Section 9.1, Borrower’s rights under all licenses and all franchise agreements shall inure to Bank’s benefit; 
 (g) Dispose of the Collateral by way of one or more contracts or transactions, for cash or on terms, in such manner and at such places (including Borrower’s premises) as Bank determines is
commercially reasonable, and apply any proceeds to the Obligations in whatever manner or order Bank deems appropriate; 
 (h) Bank may credit bid and purchase at any public sale; and 
 (i) Any deficiency that exists after
disposition of the Collateral as provided above will be paid immediately by Borrower. 
 9.2 Power of Attorney. Effective
only upon the occurrence and during the continuance of an Event of Default, Borrower hereby irrevocably appoints Bank (and any of Bank’s designated officers, or employees) as Borrower’s true and lawful attorney to: (a) send requests
for verification of Accounts or notify account debtors of Bank’s security interest in the Accounts; (b) endorse Borrower’s name on any checks or other forms of payment or security that may come into Bank’s possession;
(c) sign Borrower’s name on any invoice or bill of lading relating to any Account, drafts against account debtors, schedules and assignments of Accounts, verifications of Accounts, and notices to account debtors; (d) dispose of any
Collateral; (e) make, settle, and adjust all claims under and decisions with respect to Borrower’s policies of insurance; (f) settle and adjust disputes and claims respecting the accounts directly with account debtors, for amounts and upon
terms which Bank determines to be reasonable; and (g) to file, in its sole discretion, one or more financing or continuation statements and amendments thereto, relative to any of the Collateral. The appointment of Bank as Borrower’s
attorney in fact, and each and every one of Bank’s rights and powers, being coupled with an interest, is irrevocable until all of the Obligations have been fully repaid and performed and Bank’s obligation to provide Credit Extensions
hereunder is terminated. 
 9.3 Accounts Collection. At any time after the occurrence of an Event of Default, Bank may
notify any Person owing funds to Borrower of Bank’s security interest in such funds and verify the amount of such Account. Borrower shall collect all amounts owing to Borrower for Bank, receive in trust all payments as Bank’s trustee, and
immediately deliver such payments to Bank in their original form as received from the account debtor, with proper endorsements for deposit. 
 9.4 Bank Expenses. If Borrower fails to pay any amounts or furnish any required proof of payment due to third persons or entities, as required under the terms of this Agreement, then Bank may do
any or all of the following after reasonable notice to Borrower: (a) make payment of the same or any part thereof; (b) set up such reserves under a loan facility in Section 2.1 as Bank deems necessary to protect Bank from the exposure
created by such failure; or (c) obtain and maintain insurance policies of the type discussed in Section 6.6 of this Agreement, and take any action with respect to such policies as Bank deems prudent. Any amounts so paid or deposited by
Bank shall constitute Bank Expenses, shall be immediately due and payable, and shall bear interest at the then applicable rate hereinabove provided, and shall be secured by the Collateral. Any payments made by Bank shall not constitute an agreement
by Bank to make similar payments in the future or a waiver by Bank of any Event of Default under this Agreement. 
 9.5
Bank’s Liability for Collateral. So long as Bank complies with reasonable banking practices, Bank shall not in any way or manner be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage thereto
occurring or arising in any manner or fashion from any cause; (c) any diminution in the value thereof; or (d) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other person whomsoever. All risk of loss, damage
or destruction of the Collateral shall be borne by Borrower. 
  

 18. 








 9.6 Remedies Cumulative. Bank’s rights and remedies under this Agreement, the
Loan Documents, and all other agreements shall be cumulative. Bank shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise by Bank of one right or remedy shall be deemed an
election, and no waiver by Bank of any Event of Default on Borrower’s part shall be deemed a continuing waiver. No delay by Bank shall constitute a waiver, election, or acquiescence by it. No waiver by Bank shall be effective unless made in a
written document signed on behalf of Bank and then shall be effective only in the specific instance and for the specific purpose for which it was given. 
 9.7 Demand; Protest. Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release,
compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees at any time held by Bank on which Borrower may in any way be liable. 
  

	 	10.	NOTICES. 

 Unless
otherwise provided in this Agreement, all notices or demands by any party relating to this Agreement or any other agreement entered into in connection herewith shall be in writing and (except for financial statements and other informational
documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by a recognized overnight delivery service, certified mail, postage prepaid, return receipt requested, or by telefacsimile to Borrower or to
Bank, as the case may be, at its addresses set forth below: 
  

					
	If to Borrower:	 	CHIPX, INCORPORATED
		 	2323 Owen Street
		 	Santa Clara, CA 95054
		 	Attn:	 	 Amnon Fisher, President & CEO
 Robert Sheffield, CFO

		 	FAX:	 	(408) 988-2445
		
	If to Bank:	 	Bridge Bank, N.A.
		 	 55 Almaden Boulevard, Suite 100
 San Jose, CA 95113

		 	Attn: Chris Hill
		 	FAX: (408)282-1681

 The parties hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other. 
  

	 	11.	CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. 

 This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of California, without regard to principles of conflicts of law. Each of Borrower and Bank hereby
submits to the exclusive jurisdiction of the state and Federal courts located in the County of Santa Clara, State of California. BORROWER AND BANK EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS. AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE
FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. 
 If the jury waiver set forth in Section is not enforceable, then any dispute,
controversy or claim arising out of or relating to this Agreement, the Loan Documents or any of the transactions contemplated therein shall be settled by judicial reference pursuant to Code of Civil Procedure Section 638 et seq. before a
referee sitting without a jury,

  

 19. 








 
such referee to be mutually acceptable to the parties or, if no agreement is reached, by a referee appointed by the Presiding Judge of the California Superior Court for Santa Clara County. This
Section shall not restrict a party from exercising remedies under the Code or from exercising pre-judgment remedies under applicable law. 
  

	 	12.	GENERAL PROVISIONS. 

 12.1 Successors and Assigns. This Agreement shall bind and inure to the benefit of the respective successors and permitted assigns of each of the parties; provided, however, that neither this Agreement nor any rights hereunder may be
assigned by Borrower without Bank’s prior written consent, which consent may be granted or withheld in Bank’s sole discretion. Bank shall have the right without the consent of or notice to Borrower to sell, transfer, negotiate, or grant
participation in all or any part of, or any interest in. Bank’s obligations, rights and benefits hereunder. 
 12.2
Indemnification. Borrower shall defend, indemnify and hold harmless Bank and its officers, employees, and agents against: (a) all obligations, demands, claims, and liabilities claimed or asserted by any other party in connection with the
transactions contemplated by this Agreement; and (b) all losses or Bank Expenses in any way suffered, incurred, or paid by Bank as a result of or in any way arising out of, following, or consequential to transactions between Bank and Borrower
whether under this Agreement, or otherwise (including without limitation reasonable attorneys’ fees and expenses), except for losses caused by Bank’s gross negligence or willful misconduct. 
 12.3 Time of Essence. Time is of the essence for the performance of all obligations set forth in this Agreement. 
 12.4 Severability of Provisions. Each provision of this Agreement shall be severable from every other provision of this Agreement for
the purpose of determining the legal enforceability of any specific provision. 
 12.5 Amendments in Writing,
Integration. Neither this Agreement nor the Loan Documents can be amended or terminated orally. All prior agreements, understandings, representations, warranties, and negotiations between the parties hereto with respect to the subject matter of
this Agreement and the Loan Documents, if any, are merged into this Agreement and the Loan Documents. 
 12.6
Counterparts. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together,
shall constitute but one and the same Agreement. 
 12.7 Survival. All covenants, representations and warranties made in
this Agreement shall continue in full force and effect so long as any Obligations remain outstanding or Bank has any obligation to make Credit Extensions to Borrower. The obligations of Borrower to indemnify Bank with respect to the expenses,
damages, losses, costs and liabilities described in Section 12.2 shall survive until all applicable statute of limitations periods with respect to actions that may be brought against Bank have run. 
 12.8 Confidentiality. In handling any confidential information Bank and all employees and agents of Bank, including but not limited
to accountants, shall exercise the same degree of care that it exercises with respect to its own proprietary information of the same types to maintain the confidentiality of any non-public information thereby received or received pursuant to this
Agreement except that disclosure of such information may be made (i) to the subsidiaries or affiliates of Bank in connection with their present or prospective business relations with Borrower, (ii) to prospective transferees or purchasers
of any interest in the Loans, provided that they have entered into a comparable confidentiality agreement in favor of Borrower and have delivered a copy to Borrower, (iii) as required by law, regulations, rule or order, subpoena, judicial order or
similar order, (iv) as may be required in connection with the examination, audit or similar investigation of Bank and (v) as Bank may determine in connection with the enforcement of any remedies hereunder. Confidential information
hereunder shall not include information that either: (a) is in the public domain or in the knowledge or possession of Bank when disclosed to Bank, or becomes part of the public domain after disclosure to Bank through no fault of Bank: or
(b) is disclosed to

  

 20. 








 
Bank by a third party, provided Bank does not have actual knowledge that such third party is prohibited from disclosing such information. 
 12.9 Patriot Act. To help the government fight the funding of terrorism and money laundering activities, Federal law requires all
financial institutions to obtain, verify, and record information that identifies each person who opens an account. WHAT THIS MEANS FOR YOU: when you open an account, we will ask your name, address, date of birth, and other information that will
allow us to identify you. We may also ask to see your driver’s license or other identifying documents. 
  

 21. 








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

			
	CHIPX, INCORPORATED
		
	By:	 	 /s/ Amnon Fisher

		
	Title:	 	 CEO

	
	BRIDGE BANK, N.A.
		
	By:	 	 /s/ Christopher Hill

		
	Title:	 	 VP



  

 1. 









			
	DEBTOR:	  	CHIPX, INCORPORATED
		
	SECURED PARTY:	  	BRIDGE BANK, N.A.

 EXHIBIT A 
 COLLATERAL DESCRIPTION ATTACHMENT 
 TO LOAN AND
SECURITY AGREEMENT 
 All personal property of Borrower (herein referred to as “Borrower” or “Debtor”)
whether presently existing or hereafter created or acquired, and wherever located, including, but not limited to: 
 (a) all
accounts (including health-care-insurance receivables), chattel paper (including tangible and electronic chattel paper), deposit accounts, documents (including negotiable documents), equipment (including all accessions and additions thereto),
general intangibles (including intellectual property, payment intangibles and software), goods (including fixtures), instruments (including promissory notes), inventory (including all goods held for sale or lease or to be furnished under a contract
of service, and including returns and repossessions), investment property (including securities and securities entitlements), letter of credit rights, money, and all of Debtor’s books and records with respect to any of the foregoing, and the
computers and equipment containing said books and records; 
 (b) any and all cash proceeds and/or noncash proceeds of any of
the foregoing, including, without limitation, insurance proceeds, and all supporting obligations and the security therefor or for any right to payment. All terms above have the meanings given to them in the California Uniform Commercial Code, as
amended or supplemented from time to time. 
 Notwithstanding the foregoing, the “Collateral” does not include more
than 65% of the presently existing and hereafter arising issued and outstanding shares of capital stock owned by Borrower of any foreign subsidiary which shares entitle the holder thereof to vote for directors or any other matter. 
  

 1 








 EXHIBIT B 
 ADVANCE REQUEST FORM 
 LOAN PAYMENT/ADVANCE TELEPHONE
REQUEST FORM 
 DEADLINE FOR SAME DAY PROCESSING IS 3:00 P.M., PACIFIC TIME 
  

			
	 TO:  BRIDGE BANK N.A.
	  	DATE:                     
	        FAX#: (408)282-1681	  	TIME:                     

  

			
	FROM:	  	 CHIPX, INCORPORATED



			
		
	REQUESTED BY:	  	  

		  	AUTHORIZED SIGNER’S NAME


			
		
	AUTHORIZED SIGNATURE:	  	  



			
		
	PHONE NUMBER:	  	  



							
				
	FROM ACCOUNT #	  	  
	  	TO ACCOUNT #	  	  


  

					
	 REQUESTED TRANSACTION TYPE
	  	 REQUEST DOLLAR AMOUNT

		  	$	 	  

	 PRINCIPAL INCREASE (ADVANCE)
	  	$	 	  

	 PRINCIPAL PAYMENT (ONLY)
	  	$	 	  

	 INTEREST PAYMENT (ONLY)
	  	$	 	  

	 PRINCIPAL AND INTEREST (PAYMENT)
	  	$	 	  


  

			
	 OTHER INSTRUCTIONS:
	 	  

	  


 All representations and warranties of Borrower stated in the Loan and Security
Agreement are true, correct and complete in all material respects as of the date of the telephone request for an Advance confirmed by this Borrowing Certificate; provided, however, that those representations and warranties expressly referring to
another date shall be true, correct and complete in all material respects as of such date. 
 BANK USE ONLY 
 TELEPHONE REQUEST: 
 The following person is
authorized to request the loan payment transfer/loan advance on the advance designated account and is known to me. 
  

			
	  
	  	  

	Authorized Requester	  	Phone #
		
	  
	  	  

	Received By (Bank)	  	Phone #

  

					
		  	  
	  	
	        Authorized Signature (Bank)

  

 1 








 EXHIBIT C 
 BORROWING BASE CERTIFICATE 
  
  

			
	Borrower: CHIPX, INCORPORATED	  	Lender: Bridge Bank, N.A
	
	 Commitment Amount: $2,000,000


  

											
	 ACCOUNTS RECEIVABLE
	  			  		
		 	 1.
	  	 Accounts Receivable Book Value as of
            
	  			  	$	                    
		 	 2.
	  	 Additions (please explain on reverse)
	  			  	$	                    
		 	 3.
	  	 TOTAL ACCOUNTS RECEIVABLE
	  			  	$	                    
			
	 ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)
	  			  		
		 	 4.
	  	 Amounts over 90 days due
	  	$	                    	  		
		 	 5.
	  	 Balance of 35% over 90 day accounts
	  	$	                    	  		
		 	 6.
	  	 Concentration Limits
	  			  		
		 	 7.
	  	 Foreign Accounts
	  	$	                    	  		
		 	 8.
	  	 Governmental Accounts
	  	$	                    	  		
		 	 9.
	  	 Contra Accounts
	  	$	                    	  		
		 	 10.
	  	 Demo Accounts
	  	$	                    	  		
		 	 11.
	  	 Intercompany/Employee Accounts
	  	$	                    	  		
		 	 12.
	  	 Other (please explain on reverse)
	  	$	                    	  		
		 	 13.
	  	 TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS
	  			  	$	                    
		 	 14.
	  	 Eligible Accounts (#3 minus #13)
	  			  	$	                    
		 	 15.
	  	 LOAN VALUE OF ACCOUNTS (80% of #14)
	  			  	$	                    
			
	 BALANCES
	  			  		
		 	 16.
	  	 Maximum Loan Amount
	  			  	$	2,000,000
		 	 17.
	  	 Total Funds Available [Lesser of #16 or #15]
	  			  	$	                    
		 	 18.
	  	 Present balance owing on Line of Credit
	  			  	$	                    
		 	 19.
	  	 Outstanding under Sublimits (Letters of Credit, Cash Management, F/X)
	  			  	$	                    
		 	 20.
	  	 RESERVE POSITION (#17 minus #18 and #19)
	  			  	$	                    

 The undersigned represents and warrants that the foregoing is true, complete and correct, and that
the information reflected in this Borrowing Base Certificate complies with the representations and warranties set forth in the Loan and Security Agreement between the undersigned and Bridge Bank, N.A.. 
 CHIPX, INCORPORATED 
  

			
		
	By:	 	 
		 	Authorized Signer

  

 1 








 EXHIBIT D 
 COMPLIANCE CERTIFICATE 
  

			
	TO:	  	BRIDGE BANK, N.A.
		
	FROM:	  	CHIPX, INCORPORATED

 The undersigned authorized officer of CHIPX, INCORPORATED hereby certifies that in
accordance with the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”), (i) Borrower is in complete compliance for the period ending
                     with all required covenants except as noted below and (ii) all representations and warranties of Borrower stated in the
Agreement are true and correct as of the date hereof. Attached herewith are the required documents supporting the above certification. The Officer further certifies that these are prepared in accordance with Generally Accepted Accounting Principles
(GAAP) and are consistently applied from one period to the next except as explained in an accompanying letter or footnotes. 
 Please indicate compliance status by circling Yes/No under “Complies” column. 
  

							
	 Reporting Covenant
	  	 Required
	  	 	  	Complies
				
	 Monthly financial statements, backlog report
	  	Monthly within 30 days	  	Yes	  	No
	 Annual (CPA Audited)
	  	FYE within 150 days	  	Yes	  	No
	 10K and 10Q
	  	(as applicable)	  	Yes	  	No
	 A/R & A/P Agings, Borrowing Base Cert.
	  	Semi-monthly (15th and 30th
days)*	  	Yes	  	No
	 A/R Audit
	  	Annual	  	Yes	  	No
	 IP Report
	  	Quarterly within 30 days	  	Yes	  	No
	  Since the date of the last Compliance Certificate delivered by Borrower to Bank, the Borrower has filed the applications and registrations with the United States Patent
and Trademark Office and the United States	  		  		  	
	 Library of Congress Copyright Office listed on the attachment hereto
	  		  		  	
	 Deposit balances with Bank
	  	$                     	  		  	
	 Deposit balances outside Bank
	  	$                     	  		  	

  

	*	until Borrower achieves 2 consecutive months of profitability, then monthly within 30 days 

  

										
	 Financial Covenant
	  	 Required
	  	Actual	  	 	  	Complies
					
	 Minimum Asset Coverage Ratio
	  	1.35:1.00	  	 	        :1.00	  	Yes	  	No
	 Maximum Loss
	  	($100,000) Q4 2008	  	$	                    	  	Yes	  	No
		  	($650,000) Ql 2009	  	$	                    	  	Yes	  	No
		  	($150,000) Q2 2009	  	$	                    	  	Yes	  	No
		  	Thereafter, $1.00	  	$	                    	  	Yes	  	No
	 OKI Payment
	  	$1,215,000 before	  	$	                    	  	Yes	  	No
		  	01/15/09	  			  		  	

  

											
	Comments Regarding Exceptions: See Attached.	  	BANK USE ONLY
			
		  	Received by:	  	  

	Sincerely,	  		  	AUTHORIZED SIGNER
		  	Date:	  	  

	  
	  	Verified:	  	  

	SIGNATURE	  		  	AUTHORIZED SIGNER
	  
	  	Date:	  	  

	TITLE	  	  
 Compliance Status
	  	Yes	  		  	No
	  
	  		  		  		  		  	
	DATE	  		  		  		  		  	

  

 1