Exhibit
10.1


 


UNI-PIXEL,
INC.


UNI-PIXEL
DISPLAYS, INC.


 


WESTERN
ALLIANCE BANK


 


LOAN
AND SECURITY AGREEMENT


 






    	 		 



    	 		 



    







 


This
Loan And Security Agreement is entered into as of October 18, 2016, by and
between WESTERN ALLIANCE BANK (“Bank”) and UNI-PIXEL, INC. (“Parent”), and UNI-PIXEL DISPLAYS, INC. (“Uni-Pixel
Displays”). Parent and Uni-Pixel Displays are each referred to herein as a (“Borrower”, and collectively, as
the “Borrowers”).


 


Recitals


 


Borrowers
wish to obtain credit from time to time from Bank, and Bank desires to extend credit to Borrowers. This Agreement sets forth the
terms on which Bank will advance credit to Borrowers, and Borrowers 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 a 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 a 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 a Borrower and such Borrower’s
Books relating to any of the foregoing.


 


“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.


 


“Atmel
Intellectual Property License Agreement” means that certain XSense Intellectual Property License Agreement dated as of April
16, 2015 by and between Atmel Corporation and Uni-Pixel Displays.


 


“Atmel
Patent License Agreement” means that certain XSense Patent License Agreement dated as of April 16, 2015 by and between Atmel
Corporation and Uni-Pixel Displays.


 


“Bank
Expenses” means all: costs or expenses (including reasonable attorneys’ fees and expenses) incurred in connection
with the preparation, negotiation, administration, and enforcement of the Loan Documents; 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
Agreement” means the Export-Import Bank of the United States Working Capital Guarantee Program Borrower Agreement between
Bank and Borrowers.


 


“Borrower’s
Books” means all of a Borrower’s books and records including: ledgers; records concerning a 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.


 


“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.


 






    	 		 



    	 		 



    

 


“Change
in Control” shall mean a transaction in which (i) 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 a 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 a Borrower, who did not have such power before such transaction,
or (ii) Parent ceases to own all of the capital stock of Uni-Pixel Displays, Inc.


 


“CIT
Intellectual Property License Agreement” means that certain FLT Intellectual Property License Agreement dated as of April
16, 2015 by and between CIT Technology Ltd and Uni-Pixel Displays.


 


“CIT
Patent License Agreement” means that certain FLT Patent License Agreement dated as of April 16 2015 by and between CIT Technology
Ltd and Uni-Pixel Displays, Inc.


 


“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 EXIM Advance, use of the International Sublimit, or any other extension of credit by Bank for the
benefit of Borrowers hereunder.


 


“Daily
Balance” means the amount of the Obligations owed at the end of a given day.


 


“Economic
Impact Certification” means the Economic Impact Certification as defined in the Borrower Agreement.


 


“Eligible
Export-Related Accounts” means Eligible Export-Related Accounts Receivable as defined in the Borrower Agreement.


 


“Equipment”
means all present and future machinery, equipment, tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments
in which a Borrower has any interest.


 


“Equity
Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests
in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital
stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or
acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such
Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares,
warrants, options, rights or other interests are outstanding on any date of determination.


 






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“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.


 


“EXIM”
means the Export Import Bank of the United States.


 


“EXIM
Advance” means a cash advance or cash advances under the EXIM Facility.


 


“EXIM
Borrowing Base” means an amount equal to ninety percent (90%) of Eligible Export-Related Accounts, as determined by Bank
with reference to the most recent EXIM Borrowing Base Certificate delivered by Borrowers; provided however, that the EXIM Borrowing
Base may be revised from time to time by Bank following each Collateral audit or as Bank deems necessary in Bank’s reasonable
judgment and upon notification thereof to Borrowers.


 


“EXIM
Facility” means the facility under which Borrowers may request Bank to issue EXIM Advances, as specified in Section 2.1(a)
hereof.


 


“EXIM
Line” means a Credit Extension of up to Two Million Five Hundred Thousand Dollars ($2,500,000).


 


“EXIM
Maturity Date” means the second anniversary of the Closing Date.


 


“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, 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 a 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 all as more specifically
set forth on the exhibits attached to the intellectual property security agreement between Borrowers and Bank dated as of the
date hereof and as amended from time to time, 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.


 


“International
Sublimit” means a sublimit for export related foreign exchange services, commercial letters of credit, and standby letters
of credit under the EXIM Line not to exceed Four Hundred Thousand Dollars ($400,000).


 


“Inventory”
means all inventory in which a 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 a 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 a
Borrower’s Books relating to any of the foregoing.


 






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“Investment”
means any beneficial ownership of Equity Interests of any Person, or any loan, advance or capital contribution or transfer of
any assets to any Person.


 


“IP
Indebtedness Agreements” means the Atmel Patent License Agreement and the CIT Patent License Agreement.


 


“Letter
of Credit” or “Letters of Credit” is defined in Section 2.1(b)(ii) hereof.


 


“Lien”
means any mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance.


 


“Loan
Documents” means, collectively, this Agreement, the Borrower Agreement, any note or notes, and any other documents, instruments
or agreements entered into by a Borrower or any guarantor or other third party 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, condition (financial or otherwise) or prospects
of a Borrower or (ii) the ability of Borrowers 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 a Borrower is a beneficiary, notes, drafts, instruments, securities, documents
of title, and chattel paper, and such each Borrower’s Books relating to any of the foregoing.


 


“Obligations”
means all debt, principal, interest, Bank Expenses and other amounts owed to Bank by Borrowers 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 Borrowers
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.


 


“Periodic
Payments” means all installments or similar recurring payments that Borrowers 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 Borrowers and
Bank.


 


“Permitted
Indebtedness” means:


 


(a)
Indebtedness of Borrowers in favor of Bank arising under this Agreement or any other Loan Document;


 


(b)
unsecured Indebtedness owing to trade creditors in the ordinary course of business;


 


(c)
Indebtedness existing on the Closing Date and disclosed in the Schedule;


 


(d)
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 $500,000 in the aggregate at any given time;


 






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(e)
Indebtedness whether now existing or hereafter arising under the Atmel Intellectual Property License Agreement and/or the
Atmel Patent License Agreement as each are in effect on the date hereof;


 


(f)
Indebtedness whether now existing or hereafter arising under the CIT Intellectual Property License Agreement and/or the CIT
Patent License Agreement as each are in effect on the date hereof; and


 


(g)
Subordinated Debt.


 


“Permitted
Investment” means:


 


(a)
Investments existing on the Closing Date disclosed in the Schedule;


 


(b)
(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; and


 


(c)
Investments in a to be formed joint development company with General Interface Solution Ltd. (a subsidiary of Foxconn Technology
Group) (the “JV Entity”) to which Borrowers shall own fifty percent (50%) of the voting Equity Interests of such JV
Entity, and that does not (i) require Borrowers to assume or otherwise become liable for the obligations of such JV Entity or
any third party related to or arising out of such arrangement, (ii) require Borrowers to transfer ownership of or contribute any
cash or other property, other than (A) the property listed on Schedule 4.6 attached hereto (as such Schedule may be modified by
Borrower and accepted by Bank) and such other tangible property collectively with an aggregate book value in excess of $1,000,000
and (B) the non-exclusive license of Borrowers’ Intellectual Property to the JV Entity that could not result in any legal
transfer of title of the licensed property.


 


“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 Borrowers or any of its Subsidiaries
to secure the purchase price of such equipment or indebtedness incurred solely for the purpose of financing the acquisition or
leasing of such equipment, or (ii) existing on such equipment at the time of its acquisition or lease, provided that the Lien
is confined solely to the property so acquired or leased and improvements thereon, and the proceeds of such equipment;


 


(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; and


 


(e)
Liens upon Collateral incurred as contemplated in connection with and arising under the IP Indebtedness Agreements and granted
in connection with the indebtedness permitted under clauses (e) and (f) of the definition of Permitted Indebtedness, to the extent
such Lien is subject to a subordination agreement in form and substance satisfactory to Bank.


 






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“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 greater of three and one half percent (3.50%) per year, or the variable rate of interest, per annum,
most recently announced by Bank, as its “prime rate”, whether or not such announced rate is the lowest rate available
from Bank.


 


“Responsible
Officer” means each of the Chief Executive Officer, the Chief Financial Officer and the Vice President of Finance of each
Borrower.


 


“Schedule”
means the schedule of exceptions attached hereto and approved by Bank, if any.


 


“Shares”
is one hundred percent (100%) of the issued and outstanding capital stock, membership units or other securities owned or held
of record by a Borrower or any Subsidiary of Borrower, in any direct or indirect Subsidiary.


 


“Subordinated
Debt” means any debt incurred by Borrowers that is subordinated to the debt owing by Borrowers to Bank on terms acceptable
to Bank (and identified as being such by Borrowers and Bank), pursuant to a subordination agreement in form and substance satisfactory
to Bank.


 


“Subsidiary”
means, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation,
partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly
through one or more intermediaries (including any Affiliate), or both, by such Person. Unless the context otherwise requires,
each reference to a Subsidiary herein shall be a reference to a Subsidiary of Borrower. For the avoidance of doubt, the JV Entity
is not a Subsidiary for any purpose under this Agreement.


 


“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 Borrowers 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.


 


Each
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 Borrowers hereunder. Borrowers shall also pay interest on the unpaid principal
amount of such Credit Extensions at rates in accordance with the terms hereof.


 


(a)
EXIM Advances.


 


(i)
Subject to and upon the terms and conditions of this Agreement, Borrower may request EXIM Advances in an aggregate outstanding
amount not to exceed the lesser of (A) the EXIM Line or (B) the EXIM Borrowing Base, minus in each case the aggregate amounts
outstanding under the International Sublimit. Amounts borrowed pursuant to this Section 2.1(a) may be repaid and reborrowed at
any time prior to the EXIM Maturity Date, at which time all EXIM Advances under this Section 2.1(a) shall be immediately due and
payable. Borrower may prepay any EXIM Advances without penalty or premium.


 






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(ii)
Whenever Borrower desires an EXIM Advance, Borrower will notify Bank by facsimile transmission of an advance request in substantially
the form of Exhibit B hereto no later than noon Pacific Time on the Business Day that is one (1) Business Day prior to the Business
Day on which an EXIM Advance is made. Bank is authorized to make EXIM Advances under this Agreement, based upon instructions received
from a Responsible Officer or a designee of a Responsible Officer. Bank will credit the amount of EXIM Advances made under this
Section 2.1(a) to a Borrower’s deposit account at Bank.


 


(iii)
Borrower shall pay interest on the aggregate outstanding principal amount of the EXIM Advances on the tenth day of each month
for so long as any EXIM Advances are outstanding. All EXIM Advances shall be due and payable on the EXIM Maturity Date.


 


(b)
International Sublimit.


 


(i)
Letters of Credit. Subject to the terms and conditions of this Agreement, at any time prior to the EXIM 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”), provided, however, the aggregate outstanding face amount of all Letters of Credit shall not exceed the International
Sublimit outstanding, and for purposes of determining availability under the EXIM Line, the aggregate outstanding face amount
of all Letters of Credit (whether drawn or undrawn) shall decrease, on a dollar-for-dollar basis, the amount available for other
Advances. 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 fees. On any drawn but unreimbursed Letter of Credit,
the unreimbursed amount shall be deemed an EXIM Advance under Section 2.1(a). 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, 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.


 


(ii)
If at any time the EXIM Facility is terminated or otherwise ceases to exist, Borrower shall immediately secure in cash all
obligations under the International Sublimit on terms reasonably acceptable to Bank.


 


2.2
Overadvances. If the aggregate amount of the outstanding EXIM Advances plus the aggregate amounts outstanding under the International
Sublimit exceeds the lesser of the EXIM Line or the EXIM Borrowing Base at any time (as determined by Bank with reference to the
most recent EXIM Borrowing Base Certificate delivered by Borrowers), Borrowers shall immediately pay to Bank, in cash, the amount
of such excess.


 


2.3
Interest Rates, Payments, and Calculations.


 


(a)
Interest Rates.


 


(i)
EXIM Advances. Except as set forth in Section 2.3(b), the EXIM Advances shall bear interest, on the outstanding Daily Balance
thereof, at a rate equal to one and one quarter percent (1.25%) above the Prime Rate.


 


(b)
Late Fee; Default Rate. If any payment is not made within ten (10) days after the date such payment is due, Borrowers 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, not in any case to be less than $25.00. At Bank’s election, 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.


 






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(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 EXIM 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.


 


(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 Borrowers specify. 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 and Expenses. Borrowers shall pay to Bank the following:


 


(a)
Facility Fees. On the Closing Date and on the first anniversary of the Closing Date, a fee with respect to the EXIM Facility
equal to $25,000, each of which are fully earned and nonrefundable;


 


(b)
EXIM Fees. Such fees as EXIM may charge from time to time, including a $100 application fee payable on the Closing Date; and


 


(c)
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 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 13.7, 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.


 






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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 Statements;


 


(d)
an intellectual property security agreement;


 


(e)
agreement to provide insurance;


 


(f)
current financial statements of Borrowers;


 


(g)
an audit of the Collateral, the results of which shall be satisfactory to Bank;


 


(h)
EXIM approval;


 


(i)
the fully executed Borrower Agreement and other related EXIM documents requested by Bank;


 


(j)
an Economic Impact Certification;


 


(k)
the EXIM Guarantee;


 


(l)
evidence of the termination of Lien in favor of Atmel Corporation;


 


(m)
payment of the fees and Bank Expenses then due specified in Section 2.5 hereof; and


 


(n)
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 Advance Request Form as provided in Section 2.1;


 


(b)
with respect to any EXIM Advance request, an EXIM Borrowing Base Certificate signed by a Responsible Officer in substantially
the form of Exhibit C hereto; and


 


(c)
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 Advance Request 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. Each 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 such Borrower of each of its covenants and duties under the Loan Documents. 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.


 






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4.2
Delivery of Additional Documentation Required. Borrowers 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. Borrowers from time to time may deposit with Bank specific time
deposit accounts to secure specific Obligations. Each Borrower authorizes Bank to hold such balances in pledge and to decline
to honor any drafts thereon or any request by a 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 Borrowers’ usual business hours but no more than twice a year (unless an Event of Default has occurred
and is continuing), to inspect a Borrower’s Books and to make copies thereof and to check, test, and appraise the Collateral
in order to verify each Borrower’s financial condition or the amount, condition of, or any other matter relating to, the
Collateral


 


4.4
EXIM. EXIM has agreed to guarantee the EXIM Advances pursuant to certain guarantee agreements and other documents and instruments
(collectively, the “EXIM Guarantee”).


 


(a)
If, at any time after the EXIM Guarantee has been entered into by Bank, for any reason other than due to any action or inaction
of a Borrower under the EXIM Guarantee, (i) the EXIM Guarantee shall cease to be in full force and effect, or (ii) if EXIM declares
the EXIM Guarantee void or revokes any obligations thereunder or denies liability thereunder, and any overadvance results from
either of the foregoing, Bank shall provide notice of such overadvance to Borrowers, and Borrowers shall immediately pay the amount
of the excess to Bank or provide additional Collateral in such amounts as the Bank deems reasonably necessary to cure such overadvance.


 


(b)
If, at any time after the EXIM Guarantee has been entered into by Bank, for any reason other than the one described in Section
4.4(a), (i) the EXIM Guarantee shall cease to be in full force and effect, or (ii) the EXIM declares the EXIM Guarantee void or
revokes any obligations thereunder or denies liability thereunder, any such event shall constitute an Event of Default under this
Agreement.


 


(c)
Nothing in any confidentiality provision in this Agreement or in any other agreement shall restrict Bank’s right to
make disclosures and provide information to the EXIM in connection with the EXIM Guarantee. Upon the occurrence and continuation
of an Event of Default, in the event EXIM seeks to exercise remedies with respect to the Collateral, Bank may assign such portion
of its security interest in the Loan Documents and the Collateral as EXIM reasonably requests to effect such exercise. The terms
of the Borrower Agreement shall control in the event of any conflict between the terms of this Agreement and the Borrower Agreement.


 


4.5
Pledge of Shares. Each Borrower hereby pledges, assigns and grants to Bank, a security interest in all the Shares, together
with all proceeds and substitutions thereof, all cash, stock and other moneys and property paid thereon, all rights to subscribe
for securities declared or granted in connection therewith, and all other cash and noncash proceeds of the foregoing, as security
for the performance of the Obligations. Within ten (10) days of the Closing Date, or, to the extent not certificated as of the
Closing Date, within ten (10) days of the certification of any Shares, the certificate or certificates for the Shares will be
delivered to Bank, accompanied by an instrument of assignment duly executed in blank by Borrowers. To the extent required by the
terms and conditions governing the Shares, Borrowers shall cause the books of each entity whose Shares are part of the Collateral
and any transfer agent to reflect the pledge of the Shares. Upon the occurrence of an Event of Default hereunder, Bank may effect
the transfer of any securities included in the Collateral (including but not limited to the Shares) into the name of Bank and
cause new (as applicable) certificates representing such securities to be issued in the name of Bank or its transferee. Borrowers
will execute and deliver such documents, and take or cause to be taken such actions, as Bank may reasonably request to perfect
or continue the perfection of Bank’s security interest in the Shares. Unless an Event of Default shall have occurred and
be continuing, Borrowers shall be entitled to exercise any voting rights with respect to the Shares and to give consents, waivers
and ratifications in respect thereof, provided that no vote shall be cast or consent, waiver or ratification given or action taken
which would be inconsistent with any of the terms of this Agreement or which would constitute or create any violation of any of
such terms. All such rights to vote and give consents, waivers and ratifications shall terminate upon the occurrence and continuance
of an Event of Default.


 






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4.6
Release of Collateral. Upon providing evidence satisfactory to Bank of the creation and consummation of the JV Entity, Bank’s
security interest in the assets listed on Schedule 4.6 (as such Schedule may be modified by Borrower and accepted by Bank) (the
“Released Collateral”) shall terminate automatically and upon Borrower’s request, Bank shall file a UCC Financing
Statement amendment in the appropriate filing office deleting the Released Collateral from the Bank’s previously filed UCC
Financing Statement. Bank consents to the transfer of the Released Collateral to the JV Entity without further notice to the Bank.


 


5.
Representations and Warranties.


 


Each
Borrower represents and warrants as follows:


 


5.1
Due Organization and Qualification. Each 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.


 


5.2
Due Authorization; No Conflict. The execution, delivery, and performance of the Loan Documents are within each Borrower’s
powers, have been duly authorized, and are not in conflict with nor constitute a breach of any provision contained in a Borrower’s
Certificate/Articles of Incorporation or Bylaws, nor will they constitute an event of default under any material agreement to
which a Borrower is a party or by which a Borrower is bound. No Borrower is in default under any material agreement to which it
is a party or by which it is bound.


 


5.3
No Prior Encumbrances. Each Borrower has good and marketable title to its property, free and clear of Liens, except for Permitted
Liens.


 


5.4
Bona Fide Accounts. The Accounts are bona fide existing obligations. The property giving rise to such Accounts has been delivered
to the account debtor or to the account debtor’s agent for immediate shipment to and unconditional acceptance by the account
debtor. Any services giving rise to such Accounts have been provided to the account debtor.


 


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. Each Borrower is the sole owner of the Intellectual Property Collateral, except for non-exclusive
licenses granted by a Borrower to its customers in the ordinary course of business. Each of the Patents owned or licensed by a
Borrower is valid and enforceable, and no part of the Intellectual Property Collateral owned or licensed by a Borrower 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
owned or licensed by a Borrower violates the rights of any third party. Except as set forth in the Schedule, each 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, no Borrower is a party to, or bound by, any agreement that restricts the grant by such Borrower
of a security interest in such Borrower’s rights under such agreement.


 


5.7
Name; Location of Chief Executive Office. Except as disclosed in the Schedule, no Borrower has done business under any name
other than that specified on the signature page hereof. The chief executive office of each Borrower is located at the address
indicated in Section 10 hereof. All of Borrowers’ Inventory and Equipment is located only at the locations 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 a Borrower or any
Subsidiary before any court or administrative agency.


 






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5.9
No Material Adverse Change in Financial Statements. All consolidated and consolidating financial statements related to Borrowers
and any Subsidiary that Bank has received from Borrowers fairly present in all material respects Borrowers’ financial condition
as of the date thereof and Borrowers’ 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 Borrowers since the date
of the most recent of such financial statements submitted to Bank.


 


5.10
Solvency, Payment of Debts. Borrowers on a consolidated basis are solvent and able to pay their debts (including trade debts)
as they mature.


 


5.11
Regulatory Compliance. Each 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 a Borrower’s failure to comply with
ERISA that could result in Borrower’s incurring any material liability thereunder. No Borrower is an “investment company”
or a company “controlled” by an “investment company” within the meaning of the Investment Company Act
of 1940. No Borrower is engaged principally, or as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulations T and U of the Board of Governors of the Federal
Reserve System). Each Borrower has complied with all the provisions of the Federal Fair Labor Standards Act. No Borrower has violated
any statutes, laws, ordinances or rules applicable to it, violation of which could have a Material Adverse Effect.


 


5.12
Environmental Condition. None of Borrowers’ or any Subsidiary’s properties or assets has ever been used by a Borrower
or any Subsidiary or, to the best of Borrowers’ 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 Borrowers’ knowledge, none of Borrowers’ 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 a 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 a Borrower or any Subsidiary resulting in the releasing,
or otherwise disposing of hazardous waste or hazardous substances into the environment.


 


5.13
Taxes. Each 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. Except as set forth on the Schedule, no Borrower owns any stock, partnership interest or other equity securities
of any Person, except for Permitted Investments.


 


5.15
Government Consents. Each 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 such Borrower’s business as currently conducted.


 


5.16
Accounts. As of the Closing Date, all of Borrowers’ and any Subsidiary’s operating, depository or investment accounts
maintained or invested with a Person other than Bank are set forth on the Schedule. On and after the 60th day following
the Closing Date, none of a Borrower’s nor any Subsidiary’s operating, depository or investment accounts are maintained
or invested with a Person other than Bank, except as permitted under Section 6.8.


 


5.17
Shares. Each Borrower has full power and authority to create a first lien on the Shares and no disability or contractual obligation
exists that would prohibit such Borrower from pledging the Shares pursuant to this Agreement. To Borrowers’ knowledge, there
are no subscriptions, warrants, rights of first refusal or other restrictions on transfer relative to, or options exercisable
with respect to the Shares. The Shares have been and will be duly authorized and validly issued, and are fully paid and non-assessable.
To Borrowers’ knowledge, the Shares are not the subject of any present or threatened suit, action, arbitration, administrative
or other proceeding, and Borrower knows of no reasonable grounds for the institution of any such proceedings.


 






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5.18
Full Disclosure. No representation, warranty or other statement made by a 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.


 


Each
Borrower shall do all of the following:


 


6.1
Good Standing. Each 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. Each 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. Each 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. Borrowers shall deliver the following to Bank: (a) as soon as available, but
in any event within thirty (30) days after the last day of each month, with aged listings of accounts receivable and accounts
payable by invoice date, along with due date aging for export related accounts receivable; (b) as soon as available, but in any
event within thirty (30) days after the last day of each month, an EXIM Borrowing Base Certificate signed by a Responsible Officer
in substantially the form of Exhibit C hereto and a Compliance Certificate signed by a Responsible Officer in substantially the
form of Exhibit D hereto; (c) as soon as available, but in any event within forty five (45) days after the end of each calendar
quarter, a company prepared consolidated balance sheet, income statement, and cash flow statement covering Borrowers’ consolidated
operations during such period, prepared in accordance with GAAP, consistently applied, in a form acceptable to Bank and certified
by a Responsible Officer, together with a Compliance Certificate signed by a Responsible Officer in substantially the form of
Exhibit D hereto; (d) as soon as available, but in any event within one hundred eighty (180) days after the end of each Borrower’s
fiscal year, audited consolidated financial statements of each Borrower prepared in accordance with GAAP, consistently applied,
together with an unqualified opinion on such financial statements of an independent certified public accounting firm reasonably
acceptable to Bank; (e) as soon as available, but in any event within five (5) days of filing, Borrowers’ tax returns with
schedules, prepared by an independent certified public accounting firm reasonably acceptable to Bank; (f) as soon as available,
but in any event no later than (1) the earlier to occur of thirty (30) days following the beginning of each fiscal year or the
date of review by such Borrower’s board of directors/managers, an annual operating budget and financial projections (including
income statements, balance sheets and cash flow statements) for such fiscal year, presented in a monthly format, reviewed by such
Borrower’s board of directors/managers, and in form and substance acceptable to Bank (each, a “Financial Plan”);
(g) copies of all statements, reports and notices sent or made available generally by a Borrower to its members or stockholders
or to any holders of Subordinated Debt and, if applicable, all reports on Forms 10-Q and 10-K filed with the Securities and Exchange
Commission (acknowledging that Bank’s timely receipt of Borrower’s Form 10-Q and Form 10-K shall satisfy Borrower’s
obligation to deliver financial statements under Section 6.3(c) and Section 6.3(d), respectively); (h) promptly upon receipt of
notice thereof, a report of any legal actions pending or threatened in writing against a Borrower or any Subsidiary that could
result in damages or costs to a Borrower or any Subsidiary of One Hundred Twenty Five Thousand Dollars ($125,000) or more; (i)
upon Bank’s request (but no more frequently than quarterly), a report of Borrowers’ adjusted EBITDA; (j) copies of
any financial statements or other reporting with respect to the JV Entity when such is available; and (k) such budgets, sales
projections, operating plans or other financial information as Bank may reasonably request from time to time.


 






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6.4
Audits. Bank shall have a right from time to time hereafter to audit a Borrower’s Accounts and appraise Collateral at
such Borrower’s expense, provided that such audits will be conducted no more often than every six (6) months (or as frequently
as is required by EXIM) unless an Event of Default has occurred and is continuing. Audit costs may range from $800-1,200 per day
plus expenses, with the duration and scope of each audit to be determined at the time of such audit.


 


6.5
Inventory; Returns. Borrowers shall keep all Inventory in good and marketable condition and free from all material defects,
except for Inventory for which adequate reserves have been made. Returns and allowances, if any, as between Borrowers and its
account debtors shall be on the same basis and in accordance with the usual customary practices of Borrowers, as they exist at
the time of the execution and delivery of this Agreement. Borrowers 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 Fifty Thousand Dollars ($50,000).


 


6.6
Taxes. Borrowers shall make, and shall cause each Subsidiary to make, due and timely payment or deposit of all 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 Borrowers will make, and will cause each Subsidiary to make, timely
payment or deposit of all 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 Borrowers.


 


6.7
Insurance.


 


(a)
Borrowers, at their 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 a Borrower’s business is conducted on the date hereof. Borrowers shall also maintain insurance relating
to Borrowers’ business, ownership and use of the Collateral in amounts and of a type that are customary to businesses similar
to Borrowers’.


 


(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 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.


 


6.8
Accounts. Borrowers shall maintain and shall cause each of their Subsidiaries to maintain its primary domestic depository,
operating, and investment accounts with Bank; provided however that Borrowers shall have forty-five (45) days from the Closing
Date to transition and close its accounts maintained outside of Bank. Borrowers shall endeavor to utilize and shall cause each
of their Subsidiaries to endeavor to utilize Bank’s International Banking Division for any international banking services
required by Borrowers, including, but not limited to, foreign currency wires, hedges, swaps, foreign exchange contracts, and Letters
of Credit. For each deposit, operating, or investment domestic account that a Borrower maintains outside of Bank on and after
the 60th day following the Closing Date, such Borrower shall cause the applicable bank or financial institution at
or with which any such account is maintained to execute and deliver an account control agreement or other appropriate instrument
in form and substance satisfactory to Bank. Notwithstanding the foregoing, Borrowers may maintain a deposit account at Fubon Bank
in Taiwan without compliance with the foregoing sentence as long as the average daily balance (measured monthly) of the aggregate
deposits in such account does not exceed $50,000 (or such greater amount as Bank may agree to from time to time).


 






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6.9
Financial Covenants. 


 


(a)
Asset Coverage Ratio. Borrowers shall maintain at all times a ratio of Borrowers’ unrestricted cash maintained in accounts
at Bank plus Eligible Export-Related Accounts to all Obligations owing to Bank with respect to the EXIM Facility (including under
the International Sublimit) of at least 1.50 to 1.00.


 


6.10
Intellectual Property Rights.


 


(a)
Borrowers 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. Borrowers shall (i) give Bank not less than 30 days prior written notice of 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) prior
to the filing of any such applications or registrations, shall execute such documents as Bank may reasonably request for Bank
to maintain its perfection in such intellectual property rights to be registered by Borrowers, 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, Borrowers 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 Borrowers’ Intellectual Property Collateral to confirm compliance with this Section, provided such audit
may not occur more often than twice per year, unless an Event of Default has occurred and is continuing. Bank shall have the right,
but not the obligation, to take, at Borrowers’ sole expense, any actions that Borrowers are required under this Section
to take but which Borrowers fail to take, after 15 days’ notice to Borrowers. Borrowers shall reimburse and indemnify Bank
for all costs and expenses incurred in the exercise of its rights under this Section.


 


6.11
Notices of Commercial Tort Claims; Event of Default. Without limiting or contradicting any other more specific provision of
this Agreement, promptly (and in any event within three (3) Business Days) upon a Borrower becoming aware of the existence of
any Event of Default or event described in Section 8 which, with the giving of notice or passage of time, or both, would constitute
an Event of Default, such Borrower shall give written notice to Bank of such occurrence, which such notice shall include a reasonably
detailed description of such Event of Default or event which, with the giving of notice or passage of time, or both, would constitute
an Event of Default. If a Borrower shall acquire a commercial tort claim (as defined in the Code), such Borrower shall promptly
notify Bank in writing of the general details thereof and grant to the Bank in such writing a security interest therein and in
the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory
to the Bank.


 


6.12
Formation or Acquisition of Subsidiaries. Notwithstanding and without limiting the negative covenants contained in Sections
7.3 and 7.7 hereof, at the time that Borrower forms any direct or indirect Subsidiary or acquires any direct or indirect Subsidiary,
Borrower shall (a) cause such new Subsidiary to provide to Bank a joinder to this Agreement to cause such Subsidiary to become
a co-borrower hereunder, together with such appropriate financing statements and/or control agreements, all in form and substance
satisfactory to Bank (including being sufficient to grant Bank a first priority Lien (subject to Permitted Liens) in and to the
assets of such newly formed or acquired Subsidiary), (b) provide to Bank appropriate certificates and powers and financing statements,
pledging all of the direct or beneficial ownership interest in such new Subsidiary, in form and substance satisfactory to Bank,
and (c) provide to Bank all other documentation in form and substance satisfactory to Bank that in its opinion is appropriate
with respect to the execution and delivery of the applicable documentation referred to above.


 


6.13
Post-Closing Covenants. On the earlier to occur of thirty (30) days following the renewal of Borrower’s existing lease
on its Colorado Springs, Colorado location or October 31, 2017 (or such longer period as Bank may agree to in writing), Borrowers
shall deliver to Bank, a landlord consent with respect to Borrowers’ leased location in Colorado Springs, Colorado, in form
and substance reasonably satisfactory to Bank, or such other agreements, documents, instruments and/or the provision of such other
arrangements as Bank may require in lieu of receipt of such landlord consent.


 






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6.14
Further Assurances. At any time and from time to time Borrowers 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.


 


Borrowers
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: (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 a Borrower
or its Subsidiaries in the ordinary course of business; or (iii) Transfers of worn-out or obsolete Equipment which was not financed
by Bank.


 


7.2
Change in Business 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 Borrowers as of the Closing Date; 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
Change in Control/Mergers or Acquisitions. (i) 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; or (ii) suffer or permit a Change in Control; provided however, only advance
written notice to the Bank will be required for any action restricted by this Section 7.3 if all Obligations are paid in full
in cash out of the proceeds of the initial closing of such action and such payment is listed as a condition to the consummation
of such action. Notwithstanding the foregoing, a Subsidiary may merge or consolidate with or into another Borrower with written
notice to Bank.


 


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 (including without limitation,
its Intellectual Property Collateral), or assign or otherwise convey any right to receive income, including the sale of any Accounts,
or permit any of its Subsidiaries to do so, 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 (including without limitation, its Intellectual Property Collateral),
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, except that (i) Parent 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; and (ii) any Subsidiary may make distributions to Parent without restriction at any time;
or


 


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 Borrowers.


 






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7.8
Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any Affiliate
of Borrowers except for transactions that are in the ordinary course of Borrowers’ business, upon fair and reasonable terms
that are no less favorable to Borrowers 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.


 


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.


 


7.12
Capital Expenditures. Make or contract to make, without Bank’s prior written consent, capital expenditures (including
leasehold improvements) or incur liability for rentals of property (including both real and personal property) in an aggregate
amount in any fiscal year in excess of $500,000, or such greater amount as may be approved by Borrower’s board of directors
and set forth in Borrower’s Financial Plan acceptable to Bank.


 


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 Borrowers fail to pay, when due, any of the Obligations;


 


8.2
Covenant Default.


 


(a)
If a 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 a 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 a 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
thirty days after a Borrower receives notice thereof or any officer of a 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 Borrowers be cured
within such thirty day period, and such default is likely to be cured within a reasonable time, then Borrowers 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;


 






    	 	17	 



    	 		 



    

 


8.4
Attachment. If any portion of a 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, bonded, discharged or rescinded within twenty (20) days, or if
a 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 a Borrower’s
assets, or if a notice of lien, levy, or assessment is filed of record with respect to any of a 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 twenty (20) days after a 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 Borrowers (provided that no Credit Extensions will be required to be made during such cure period);


 


8.5
Insolvency. If a Borrower becomes insolvent, or if an Insolvency Proceeding is commenced by a Borrower, or if an Insolvency
Proceeding is commenced against a 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 (a) in any credit, loan or financing agreement to which
a 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 One Hundred Twenty Five Thousand Dollars ($125,000) (other than trade
amounts payable incurred in the ordinary course of business that are not more than 60 days past due); or (b) in any other agreement
to which a Borrower is a party or by which it is bound that could reasonably be expected to result in a Material Adverse Effect;


 


8.7
Judgments. If a judgment or judgments for the payment of money in an amount, individually or in the aggregate, of at least
One Hundred Twenty Five Thousand Dollars ($125,000) (not covered by independent third-party insurance as to which liability has
been accepted by such insurance carrier) shall be rendered against a Borrower and shall remain unsatisfied and unstayed for a
period of twenty (20) days (provided that no Credit Extensions will be made prior to the satisfaction or stay of such judgment);


 


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; or


 


8.9
EXIM Defaults. (a) If the EXIM Guarantee ceases for any reason to be in full force and effect or if EXIM declares the EXIM
Guarantee void or revokes any obligations under the EXIM Guarantee, or (b) if any default occurs under the Borrower Agreement.


 


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 Borrowers:


 


(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 Borrowers under this Agreement or under any other agreement
between Borrowers and Bank;


 






    	 	18	 



    	 		 



    

 


(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.
Borrowers agree to assemble the Collateral if Bank so requires, and to make the Collateral available to Bank as Bank may designate.
Each 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 a Borrower’s owned premises, each 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 Borrowers held by Bank, or (ii) indebtedness
at any time owing to or for the credit or the account of Borrowers 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, solely pursuant to the provisions of this Section
9.1, to use, without charge, a 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, Borrowers’ 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 Borrowers’ 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 Borrowers.


 


9.2
Power of Attorney. Effective only upon the occurrence and during the continuance of an Event of Default, each Borrower hereby
irrevocably appoints Bank (and any of Bank’s designated officers, or employees) as such 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 such Borrower’s name on any checks or other forms of payment or security that may come into Bank’s
possession; (c) sign such 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 such 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 each 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 Borrowers
of Bank’s security interest in such funds and verify the amount of such Account. Borrowers shall collect for Bank all amounts
owing to Borrowers, receive in trust all such 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.


 






    	 	19	 



    	 		 



    

 


9.4
Bank Expenses. If Borrowers fail 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 Borrowers:
(a) make payment of the same or any part thereof; (b) set up such reserves under the 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 6.7 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 Borrowers.


 


9.6
Shares. Borrowers recognize that Bank may be unable to effect a public sale of any or all the Shares, by reason of certain
prohibitions contained in federal securities laws and applicable state and provincial securities laws or otherwise, and may be
compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among
other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale
thereof. Borrowers acknowledge and agree that any such private sale may result in prices and other terms less favorable than if
such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have
been made in a commercially reasonable manner. Bank shall be under no obligation to delay a sale of any of the Shares for the
period of time necessary to permit the issuer thereof to register such securities for public sale under federal securities laws
or under applicable state and provincial securities laws, even if such issuer would agree to do so. Upon the occurrence of an
Event of Default which continues, Bank shall have the right to exercise all such rights as a secured party under the Code as it,
in its sole judgment, shall deem necessary or appropriate, including without limitation the right to liquidate the Shares and
apply the proceeds thereof to reduce the Obligations. Effective only upon the occurrence and during the continuance of an Event
of Default, each Borrower hereby irrevocably appoints Bank (and any of Bank’s designated officers, or employees) as such
Borrower’s true and lawful attorney to enforce such Borrower’s rights against any Subsidiary, including the right
to compel any Subsidiary to make to the Bank or a Borrower any payments or distributions respecting the Shares which are owing
to such Borrower.


 


9.7
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 a 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.


 


9.8
Demand; Protest. Each 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 Borrowers may in any way be liable.


 






    	 	20	 



    	 		 



    

 


10.
Notices.


 


All
notices, consents, requests, approvals, demands, or other communication by any party to this Agreement or any other Loan Document
must be in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt
and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested,
with proper postage prepaid; (b) upon transmission, when sent by electronic mail or facsimile transmission; (c) one (1) Business
Day after deposit with a reputable overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered by messenger,
all of which shall be addressed to the party to be notified and sent to the address, facsimile number, or email address indicated
below. Bank or a Borrower may change its mailing or electronic mail address or facsimile number by giving the other party written
notice thereof in accordance with the terms of this Section 10.


 


	 	If
    to Borrowers:	UNI-PIXEL,
    INC.
	 	 	4699
    Old Ironsides Drive, Suite 300
	 	 	Santa
    Clara, CA 95054
	 	 	Attn:
    Christine Russell
	 	 	FAX:
    (____) _______________
	 	 	EMAIL:
    crussel@unipixel.com
	 	 	 
	 	If
    to Bank:	Bridge
    Bank, a division of Western Alliance Bank
	 	 	55
    Almaden Blvd.
	 	 	San
    Jose, CA 95113
	 	 	Attn:
    Note Department
	 	 	FAX:
    (408) 282-1681
	 	 	EMAIL:
    notedepartment@bridgebank.com


 


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 and all other Loan Documents (except as otherwise expressly provided in any of the Loan Documents) 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. Borrowers and Bank each hereby submits to the exclusive jurisdiction of the state and Federal courts located in the County
of Santa Clara, State of California. BORROWERS 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.


 


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 a Borrower
without Bank’s prior written consent, which consent may be granted or withheld in Bank’s sole discretion. Bank shall
have the right after the occurrence of an Event of Default without the consent of or notice to Borrowers to sell, transfer, negotiate,
or grant participation in all or any part of, or any interest in, Bank’s obligations, rights and benefits hereunder. Prior
to the occurrence of an Event of Default, Bank may sell, transfer, negotiate, or grant participation in all or any part of, or
any interest in, Bank’s obligations, rights and benefits hereunder with the consent of the Borrowers which consent shall
not be unreasonably withheld; provided however no such consent shall be required if such sale, transfer negotiation or participation
(i) is in connection with the sale or disposition of Bank or all or a portion of Bank’s loan portfolio or (ii) does not
result in Western Alliance Bank (or any Affiliate thereof) no longer acting as “Bank” hereunder.


 


12.2
Indemnification. Each 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 a Borrower whether under this Agreement,
or otherwise (including without limitation attorneys’ fees and expenses), except for losses caused by Bank’s gross
negligence or willful misconduct.


 






    	 	21	 



    	 		 



    

 


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 Borrowers. The obligations
of each 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 each Borrower, (ii) to prospective transferees or purchasers of any interest in
the Credit Extensions who are subject to comparable confidentiality obligations in favor of Borrowers, (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 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 Notice. Bank hereby notifies Borrowers that, pursuant to the requirements of the USA Patriot Act, Title III of
Pub. L. 107-56 (signed into law on October 26, 2001) (the “Patriot Act”), it is required to obtain, verify and record
information that identifies the Borrowers, which information includes names and addresses and other information that will allow
Bank, as applicable, to identify the Borrowers in accordance with the Patriot Act.


 


13.
Co-Borrowers.


 


13.1
Co-Borrowers. Borrowers are jointly and severally liable for the Obligations and Bank may proceed against one Borrower to
enforce the Obligations without waiving its right to proceed against any other Borrower. This Agreement and the Loan Documents
are a primary and original obligation of each Borrower and shall remain in effect notwithstanding future changes in conditions,
including any change of law or any invalidity or irregularity in the creation or acquisition of any Obligations or in the execution
or delivery of any agreement between Bank and any Borrower. Each Borrower shall be liable for existing and future Obligations
as fully as if all of the Credit Extensions were advanced to such Borrower. Bank may rely on any certificate or representation
made by any Borrower as made on behalf of, and binding on, all Borrowers, including without limitation advance request forms and
compliance certificates. Each Borrower appoints each other Borrower as its agent with all necessary power and authority to give
and receive notices, certificates or demands for and on behalf of all Borrowers, to act as disbursing agent for receipt of any
Credit Extensions on behalf of each Borrower and to apply to Bank on behalf of each Borrower for any Credit Extension, any waivers
and any consents. This authorization cannot be revoked, and Bank need not inquire as to one Borrower’s authority to act
for or on behalf of another Borrower.


 






    	 	22	 



    	 		 



    

 


13.2
Subrogation and Similar Rights. Notwithstanding any other provision of this Agreement or any other Loan Document, each Borrower
irrevocably waives, until all Obligations are paid in full and Bank has no further obligation to make Credit Extensions to Borrowers,
all rights that it may have at law or in equity (including, without limitation, any law subrogating a Borrower to the rights of
Bank under the Loan Documents) to seek contribution, indemnification, or any other form of reimbursement from any other Borrower,
or any other Person now or hereafter primarily or secondarily liable for any of the Obligations, for any payment made by a Borrower
with respect to the Obligations in connection with the Loan Documents or otherwise and all rights that it might have to benefit
from, or to participate in, any security for the Obligations as a result of any payment made by a Borrower with respect to the
Obligations in connection with the Loan Documents or otherwise. Any agreement providing for indemnification, reimbursement or
any other arrangement prohibited under this Section shall be null and void. If any payment is made to a Borrower in contravention
of this Section, such Borrower shall hold such payment in trust for Bank and such payment shall be promptly delivered to Bank
for application to the Obligations, whether matured or unmatured.


 


13.3
Waivers of Notice. Each Borrower waives, to the extent permitted by law, notice of acceptance hereof; notice of the existence,
creation or acquisition of any of the Obligations; notice of an Event of Default except as set forth herein; notice of the amount
of the Obligations outstanding at any time; notice of any adverse change in the financial condition of any other Borrower or of
any other fact that might increase a Borrower’s risk; presentment for payment; demand; protest and notice thereof as to
any instrument; and all other notices and demands to which a Borrower would otherwise be entitled by virtue of being a co-borrower
or a surety. Each Borrower waives any defense arising from any defense of any other Borrower, or by reason of the cessation from
any cause whatsoever of the liability of any other Borrower. Bank’s failure at any time to require strict performance by
any Borrower of any provision of the Loan Documents shall not waive, alter or diminish any right of Bank thereafter to demand
strict compliance and performance therewith. Each Borrower also waives any defense arising from any act or omission of Bank that
changes the scope of a Borrower’s risks hereunder. Each Borrower hereby waives any right to assert against Bank any defense
(legal or equitable), setoff, counterclaim, or claims that such Borrower individually may now or hereafter have against another
Borrower or any other Person liable to Bank with respect to the Obligations in any manner or whatsoever.


 


13.4
Subrogation Defenses. Until all Obligations are paid in full and Bank has no further obligation to make Credit Extensions
to Borrowers, each Borrower hereby waives any defense based on impairment or destruction of its subrogation or other rights against
any other Borrower and waives all benefits which might otherwise be available to it under California Civil Code Sections 2809,
2810, 2819, 2839, 2845, 2848, 2849, 2850, 2899, and 3433 and California Code of Civil Procedure Sections 580a, 580b, 580d and
726, as those statutory provisions are now in effect and hereafter amended, and under any other similar statutes now and hereafter
in effect.


 


13.5
Right to Settle, Release.


 


(a)
The liability of Borrowers hereunder shall not be diminished by (i) any agreement, understanding or representation that any
of the Obligations is or was to be guaranteed by another Person or secured by other property, or (ii) any release or unenforceability,
whether partial or total, of rights, if any, which Bank may now or hereafter have against any other Person, including another
Borrower, or property with respect to any of the Obligations.


 


(b)
Without notice to any given Borrowers and without affecting the liability of any given Borrowers hereunder, Bank may (i) compromise,
settle, renew, extend the time for payment, change the manner or terms of payment, discharge the performance of, decline to enforce,
or release all or any of the Obligations with respect to any other Borrower by written agreement with such other Borrower, (ii)
grant other indulgences to another Borrower in respect of the Obligations, (iii) modify in any manner any documents relating to
the Obligations with respect to any other Borrower by written agreement with such other Borrower, (iv) release, surrender or exchange
any deposits or other property securing the Obligations, whether pledged by a Borrower or any other Person, or (v) compromise,
settle, renew, or extend the time for payment, discharge the performance of, decline to enforce, or release all or any obligations
of any guarantor, endorser or other Person who is now or may hereafter be liable with respect to any of the Obligations.


 


13.6
Subordination. All indebtedness of a Borrower now or hereafter arising held by another Borrower is subordinated to the Obligations
and a Borrower holding the indebtedness shall take all actions reasonably requested by Bank to effect, to enforce and to give
notice of such subordination.


 


14.
Notice of Final Agreement. NOTICE OF FINAL AGREEMENT.
BY SIGNING THIS AGREEMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN
THE PARTIES, (B) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (C) THIS WRITTEN AGREEMENT MAY NOT BE CONTRADICTED
BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.


 


[signature
page follows]


 






    	 	23	 



    	 		 



    







 


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


 


	 	BORROWERS:
	 	UNI-PIXEL,
    INC.
	 	 	 
	 	By:	/s/
    Christine Russell
	 	Name:	Christine
    Russell
	 	Title:	CFO
	 	 	 
	 	UNI-PIXEL
    DISPLAYS, INC.
	 	 	 
	 	By:	/s/
    Christine Russell
	 	Name:	Christine
    Russell
	 	Title:	CFO
	 	 	 
	 	BANK:
	 	WESTERN
    ALLIANCE BANK
	 	 	 
	 	By:	/s/
    Kelly Cook
	 	Name:	Kelly
    Cook
	 	Title:	Senior
    Vice President


 






    	 	24	 



    	 		 



    







 


EXHIBIT
A


 


	DEBTOR:	UNI-PIXEL,
    INC. and UNI-PIXEL DISPLAYS, INC.
	 	 
	SECURED
    PARTY:	WESTERN
    ALLIANCE BANK


 


COLLATERAL
DESCRIPTION ATTACHMENT

TO LOAN AND SECURITY AGREEMENT


 


All
personal property of each 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), commercial
tort claims, deposit accounts, documents (including negotiable documents), equipment (including all accessions and additions thereto),
general intangibles (including 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; and


 


(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.


 






    	 		 



    	 		 



    







 


Exhibit
B


 


EXIM
ADVANCE REQUEST FORM


 


	To:	WESTERN
    ALLIANCE BANK	 
	 	 	 
	Fax:	(408)
    282-1681	 
	 	 	 
	Date:	 	 
	 	 	 
	From:	UNI-PIXEL,
    INC. and UNI-PIXEL DISPLAYS, INC.	 
	 	Borrower’s
    Name	 
	 	 	 
	 	 	 
	 	Authorized
    Signature	 
	 	 	 
	 	 	 
	 	Authorized
    Signer’s Name (please print)	 
	 	 	 
	 	 	 
	 	Phone
    Number	 


 


	To
    Account #	 	 


 


Borrowers
hereby request funding of an EXIM Advance in the amount of $ _______ in accordance with the EXIM Facility as defined in the Loan
and Security Agreement dated October __, 2016 and as amended from time to time (the “Loan Agreement”).


 


Borrowers
hereby authorize Bank to rely on facsimile stamp signatures and treat them as authorized by Borrowers for the purpose of requesting
the above advance.


 


All
representations and warranties of Borrowers stated in the Loan Agreement are true, correct and complete in all material respects
as of the date of this EXIM Advance Request Form; provided that those representations and warranties expressly referring
to another date shall be true, correct and complete in all material respects as of such date.


 


Capitalized
terms used herein and not otherwise defined have the meanings set forth in the Loan Agreement.


 






    	 		 



    	 		 



    







 


EXHIBIT
C


EXIM
BORROWING BASE CERTIFICATE


BRIDGE
BANK


55
Almaden Boulevard, San Jose, CA 95113


 


	BORROWER: UNI-PIXEL, INC. and UNI-PIXEL DISPLAYS, INC.	 		 	 		 
	 	 	 	 	 	 	 
	EXPORT-RELATED
                                         ACCOUNTS RECEIVABLES


	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	1.	Foreign Accounts Receivable Book Value as of : ____________________	 	 	 	 	 	$	______	 
	2.	Additions (please explain on reverse)	 	 	 	 	 	$	______	 
	3.	Total Export-Related Accounts Receivables	 	 	 	 	 	$	______	 
	 	 	 	 	 	 	 	 	 	 
	DEDUCTIONS:	 	 	 	 	 	 	 	 
	4.	Less: Accounts with product US Content less than 50%	 	$	_______	 	 	 	 	 
	5.	Less: Accounts with terms of sale greater than 120 days	 	$	_______	 	 	 	 	 
	6.	Less: Accounts for whom more than 50% of the A/Rs with terms of sales longer than N120	 	$	_______	 	 	 	 	 
	7.	Less: Accounts over 60 days past original due date (90 days if insured through EXIM Bank insurance)	 	$	_______	 	 	 	 	 
	8.	Less: Accounts with 35% over 60 days past invoice due date	 	$	_______	 	 	 	 	 
	9.	Less: Accounts over 35% concentration of total foreign accounts	 	$	_______	 	 	 	 	 
	10.	Less: Accounts backed by LCs, not negotiated by Bank or the L/C proceeds not assigned to the
    Bank	 	$	_______	 	 	 	 	 
	11.	Less: Military accounts, or arising from sales of defense articles	 	$	_______	 	 	 	 	 
	12.	Less: Accounts associated with nuclear power, enrichment, reprocessing, research or heavy water
    production facilities	 	$	_______	 	 	 	 	 
	13.	Less: Contra Accounts, customer deposits or credit accounts	 	$	_______	 	 	 	 	 
	14.	Less: Promotion, Demo or Consignment Accounts, Bill and Hold, or any account where payment is
    conditional or subject to acceptance (Retainage Accounts)	 	$	_______	 	 	 	 	 
	15.	Less: Inter-company/Employee and Affiliate Accounts	 	$	_______	 	 	 	 	 
	16.	Less: Disputed Accounts	 	$	_______	 	 	 	 	 
	17.	Less: Accounts excluded under the EXIM Borrower Agreement or the Loan and Security Agreement	 	$	_______	 	 	 	 	 
	18.	Less: Arising from inventory not originally located in and shipped from the US	 	$	_______	 	 	 	 	 
	19.	Less: Accounts not subject to a perfected first priority security interest	 	$	_______	 	 	 	 	 
	20.	Less: Accounts from sales not in the ordinary course of business	 	$	_______	 	 	 	 	 
	21.	Less: Accounts not owned by Borrower or with offsetting claims	 	$	_______	 	 	 	 	 
	22.	Less: Accounts without invoices or export orders	 	$	_______	 	 	 	 	 
	23.	Less: Accounts billed and collected outside U.S. (except as may be approved in writing by EXIM
    Bank)	 	$	_______	 	 	 	 	 
	24.	Less: Accounts billed in non U.S. currency	 	$	_______	 	 	 	 	 
	25.	Less: Accounts in countries prohibited by EXIM as designated in the most current Country Limitation
    Schedule	 	$	_______	 	 	 	 	 
	26.	Less: Accounts backed by L/C, goods have not been shipped or services have not been delivered	 	$	_______	 	 	 	 	 
	27.	Less: Accounts determined doubtful or Buyer is insolvent or in Bankruptcy	 	$	_______	 	 	 	 	 
	28.	Less: Accounts covering items which have been returned, rejected, or repossessed	 	$	_______	 	 	 	 	 
	29.	Less: Any deduction of sales price arising from sales contracts or agreements	 	$	_______	 	 	 	 	 
	30.	Less: Accounts covering goods or service which have not been accepted or which do not represent
    final sales for any reason.	 	$	_______	 	 	 	 	 
	31.	Less: Accounts included as eligible receivable under any other credit facility to which Borrower
    is a party	 	$	_______	 	 	 	 	 
	32.	Less: Accounts from sales of Capital Goods	 	$	_______	 	 	 	 	 
	33.	Less: Others	 	 	 	 	 	 	 	 
	34.	Add: Lines 4 through 33 - Total Ineligible Export- Related Accounts Receivables	 	 	 	 	 	$	_______	 
	 	 	 	 	 	 	 	 	 	 
	35.	NET ELIGIBLE EXPORT-RELATED ACCOUNTS RECEIVABLE	 	 	 	 	 	 	 	 
	36.	Export-Related Account Receivable Advance Rate	 	 	90	%	 	 	 	 
	37.	TOTAL EXIM A/R BORROWING BASE	 	$	_______	 	 	 	 	 
	38.	MAXIMUM EXIM LOAN AMOUNT	 	$	2,500,000	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	39.	Less: Current Loan Outstanding on EXIM Line of Credit	 	 	 	 	 	 	 	 
	40.	Less: Reserves under International Sublimit	 	 	 	 	 	$	______	 
	 	 	 	 	 	 	 	 	 	 
	41.	AVAILABLE FOR DRAW/NEED TO PAY	 	 	 	 	 	$	______	 
	 	 	 	 	 	 	 	 	 	 
	 	If line #41 is a negative number, this amount must be
    remitted to the Bank immediately to bring loan balance into compliance.	 	 	 	 	 	 	 	 



 






    	 		 



    	 		 



    

 


The
undersigned represents and warrants that as of the date hereof the foregoing is true, complete and correct, that the information
reflected in this EXIM Borrowing Base Certificate complies with the representations and warranties set forth in the Loan and
Security Agreement, between Borrower and Bank, and the EXIM Borrower Agreement, executed by Borrower and acknowledged by Bank,
each dated October __, 2016, as may be amended from time to time, as if all representations and warranties were made as
of the date hereof, and that Borrower is, and shall remain, in full compliance with its agreements, covenants, and obligations
under such agreements. Such representations and warranties include, without limitation, the following: Borrower is using disbursements
only for the purpose of enabling Borrower to finance the cost of manufacturing, purchasing or selling items intended for export.
Borrower is not using disbursements for the purpose of: (a) servicing any of Borrower’s unrelated pre-existing or future
indebtedness; (b) acquiring fixed assets or capital goods for the use of Borrower’s business; (c) acquiring, equipping,
or renting commercial space outside the United States; or (d) paying salaries of non-U.S. citizens or non-U.S. permanent residents
who are located in the offices of the United States. Additionally, disbursements are not being used to finance the manufacture,
purchase or sale of all of the following: (a) Items to be sold to a buyer located in a country in which the Export Import Bank
of the United States is legally prohibited from doing business; (b) that part of the cost of the items which is not U.S. Content
unless such part is not greater than fifty percent (50%) of the cost of the items and is incorporated into the items in the United
States; (c) defense articles or defense services or items directly or indirectly destined for use by military organizations designed
primarily for military use (regardless of the nature or actual use of the items); or (d) any items to be used in the construction,
alteration, operation or maintenance of nuclear power, enrichment, reprocessing, research or heavy water production facilities.


 


Capitalized
terms used herein and not otherwise defined have the meanings set forth in the Loan and Security Agreement.


 


Borrower
hereby request funding in the amount of $___________in accordance with this EXIM Borrowing Base Certificate. 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 this EXIM Borrowing Base Certificate; provided that those representations and warranties expressly referring
to another date shall be true, correct, and complete in all material respects as of such date.


 


The
undersigned also certifies that any interest in any copyrights (whether registered, or unregistered), patents or trademarks, and
licenses have been specifically disclosed to the Bank in writing.


 


	 	 	Date:	 	 
	Prepared
    By:	 	 	 	 
	 	 	 	 	 
	 	 	Date:	 	 
	Bank
    Reviewed:	 	 	 	 


 






    	 	2	 



    	 		 



    







 


Exhibit
D


 


Compliance
Certificate


 


	TO:	WESTERN
                                         ALLIANCE BANK
	 	 
	FROM:	UNI-PIXEL,
                                         INC. and UNI-PIXEL DISPLAYS, INC.



 


The
undersigned authorized officer of UNI-PIXEL, INC., on behalf of itself and all other
Borrowers, hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement between Borrowers
and Bank (the “Agreement”), (i) each Borrower is in complete compliance for the period ending _______________ with
all required covenants except as noted below and (ii) all representations and warranties of Borrowers stated in the Agreement
are true and correct as of the date hereof. Attached herewith are the required documents supporting the above certification, if
applicable. The Officer further certifies that the financial statements and financial information provided hereunder 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
	 	 	 	 	 	 	 
	A/R
    & A/P Agings by invoice date	 	Monthly
    within 30 days	 	Yes	 	No
	Aged
    listing by due date aging for export Related A/R	 	Monthly
    within 30 days	 	Yes	 	No
	EXIM
    Borrowing Base Certificate	 	Monthly
    within 30 days	 	Yes	 	No
	Consolidated
    financial statements (with Compliance Certificate)	 	Quarterly
    within 45 days	 	Yes	 	No
	Compliance
    Certificate	 	Monthly
    within 30 days	 	Yes	 	No
	Annual
    audited financial statements	 	FYE
    within 180 days	 	Yes	 	No
	Tax
    Returns with Schedules	 	Within
    5 days of filing	 	Yes	 	No
	Annual
    operating budget, sales projections and operating plans reviewed by board of directors	 	Annually
    no later than 30 days after the beginning of each fiscal year	 	Yes	 	No
	 	 	 	 	 	 	 
	A/R
    Audit	 	Initial
    and Semi-Annual	 	Yes	 	No
	 	 	 	 	 	 	 
	More
    than 50% US content of product costs	 	(Quarterly
    certification)	 	Yes	 	No


 


	Deposit balances with Bank	 	$	___________________	 
	 	 	 	 	 
	Deposit balance outside Bank	 	$	___________________	 



 


	Financial Covenant	 	Required	 	 	Actual	 	 	Complies
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Minimum Asset Coverage Ratio	 	 	1.50
                                         : 1.00	 	 	 	_____:1.00	 	 	Yes	 	No



 


	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