Document:

Continuing Arrangement Agreement

  
 Exhibit 10.24

  
 CONTINUING ARRANGEMENT AGREEMENT 
  
 THIS CONTINUING ARRANGEMENT AGREEMENT (the “Agreement”) is made as
of this 14th day of January, 2005 by and between Jeffrey Yordon (the “Executive”) and American Pharmaceutical Partners, Inc., a corporation incorporated under the laws of Delaware (the “Company”). 
  
 WITNESSETH: 
  
 WHEREAS, the Executive has been employed by the Company as its Co-Chief Operating Officer and has been a member of the Board
of Directors of the Company (the “Board”); and 
  
 WHEREAS, the parties wish to provide for the orderly transition of Executive’s responsibilities and position with American Pharmaceutical Partners, Inc. and to ensure Executive’s continued dedication and efforts in such event
without undue concern for Executive’s personal financial and employment security; and 
  
 WHEREAS, in order to induce Executive to remain in the employ of the Company, and to transition his knowledge and experience to other Company personnel, the company desires to enter into this Agreement with Executive;

  
 NOW, THEREFORE, the parties agree as follows: 
  

	1.	TERM OF AGREEMENT. 

  
 This Agreement shall commence as the date hereof (the “Effective Date”) and shall continue in effect until March 31, 2006 (the “Continuing
Period”), at which time it is terminated. Provided, however, that if the Company exercises its post-employment option set forth in Section 11 below, then this Agreement shall continue to that extent, but only to the extent set forth in said
Section 11. 
  

	2.	DEFINITIONS. 

  
 2.1 Accrued Compensation. “Accrued Compensation” shall mean an amount which shall include all amounts earned or accrued through
the Termination Date (as hereinafter defined) but not paid as of the Termination Date, including, without limitation, (i) base salary, (ii) reimbursement for reasonable and necessary expenses incurred by Executive on behalf of the Company during the
period ending on the Termination Date, and (iii) vacation pay. 
  
 2.2 2004 Bonus Amount. “2004 Bonus Amount” shall mean the amount, if any, of bonus for the Company’s 2004 fiscal year determined in accordance with Exhibit B hereto. 
  
 2.3 2005 Bonus Amount. “2005 Bonus Amount” shall mean the
amount, if any, of bonus for the Company’s 2005 fiscal year determined in accordance with Exhibit B hereto. 
  

 1 

 2.4 2006 Bonus Amount. “2006 Bonus Amount” shall mean the amount, if any, of bonus for
the Company’s 2006 fiscal year determined in accordance with Exhibit B hereto. 
  
 2.5 Cause. A termination of employment is for “Cause” (i) if Executive has been convicted of (or plead guilty or nolo contendere to) a felony involving fraud or dishonesty; or (ii) the
termination is evidenced by a resolution adopted in good faith by the Board to the effect that Executive has engaged in willful misconduct under this Agreement that is demonstrably and materially injurious to the Company. For purposes of this
definition, no act or failure to act will be considered “willful” unless done, or omitted to be done, by him in bad faith and without reasonable belief that his action or omission was in the interests of the Company or not opposed to the
interests of the Company. 
  
 2.6 Company. The
“Company” shall mean American Pharmaceutical Partners, Inc. and shall include its “Successors and Assigns” (as hereinafter defined). 
  
 2.7 Disability. “Disability” shall mean a physical or mental infirmity which impairs Executive’s ability to substantially
perform Executive’s duties with the Company for a period of one hundred eighty (180) consecutive days. 
  
 2.8 Good Reason. “Good Reason” shall mean the occurrence of any of the events or conditions described in subsection (i) or (ii)
hereof: 
  
 (i) a material breach by the Company,
or any Successors and Assigns, of any obligations under this Agreement; or 
  
 (ii) the Company’s assigning Executive to travel in connection with the Company’s business which requires Executive to be based or to perform an excessive amount of work at any place outside a 50-mile radius
from Executive’s residence without Executive’s written consent (provided, excessive shall mean more than 7 days in total within a 30 day consecutive rolling day period). 
  
 If Executive determines that Good Reason exists, Executive must notify the Company in writing, within thirty (30) days following
Executive’s knowledge of the first event which Executive determines constitutes Good Reason, or such event shall not constitute Good Reason under the terms of this Agreement. In addition, with respect to the Good Reason provision of subsection
(ii) above, Executive must notify the Company in advance of travel becoming excessive, and the Company must have a reasonable opportunity to cure such travel requirements, or such excessive travel will not constitute Good Reason under the terms of
this Agreement. If the Company remedies such event within fifteen (15) days following receipt of such notice, Executive may not terminate employment for Good Reason as a result of such event. 
  
 2.9 Notice of Termination. “Notice of
Termination” shall mean a written notice from the Company or Executive of termination of Executive’s employment. 
  

 2 

 2.10 Successors and Assigns. “Successors and Assigns” shall mean a corporation or
other entity acquiring all or substantially all the assets and business of the Company (including this Agreement), whether by operation of law or otherwise. 
  
 2.11 Termination Date. “Termination Date” shall mean (i) in the case of Executive’s death, Executive’s date of death,
(ii) in all other cases, the earlier of the date specified in the Notice of Termination or March 31, 2006; provided, that if Executive’s employment is terminated by the Company for Cause or due to Disability, the date specified in the Notice of
Termination shall be at least thirty (30) days from the date the Notice of Termination is given to Executive, and provided, further, that in the case of Disability, Executive shall not have returned to the full-time performance of Executive’s
duties during such period of at least thirty (30) days. 
  

	3.	EXECUTIVE OBLIGATIONS. 

  
 In order to facilitate an orderly transition of the Executive’s position and responsibilities at the Company, Executive is hereby resigning as an
officer and director of the Company and all of its subsidiaries and affiliates upon execution of this Agreement and intends to and will retire from the Company at the end of the Continuing Period. 
  
 During the term of this Agreement, and excluding any periods of vacation and
leave due to sickness or Disability to which Executive is entitled, Executive agrees to provide such assistance and general advice to the Company’s CEO and to the Board as they may reasonably request, consistent with Executive’s reasonable
other commitments. It is expected that Executive’s exclusive role during the Continuing Period will be to work at developing, with and/or at the direction of the Company’s CEO, new business opportunities for the Company. During the term of
this Agreement, Executive will not, without the written authorization of the Company’s CEO, have the authority to bind the Company or any of its subsidiaries or affiliates. Executive will principally work during the Continuing Period from his
residence, and it is contemplated that Executive shall not be required to work more than a 50 mile radius from his residence without Executive’s written consent, for more than 5 days in total within a 45 consecutive rolling day period.

  

	4.	EXECUTIVE COMPENSATION AND BENEFITS. 

  
 4.1 Compensation. Subject to Section 5 below, during the Continuing Period: 
  
 (a) The Company will continue to pay Executive his annual base salary as was in effect as of September 1,
2004, payable in accordance with the Company’s standard payroll procedures. 
  
 (b) The Company will also pay Executive the 2004 Bonus Amount, the 2005 Bonus Amount and the 2006 Bonus Amount, in each case at the same
time as bonuses for the applicable fiscal paid to the Company’s executive officers. 
  

 3 

 4.2. Benefits and Perquisites. The Executive will continue to participate in the
Company’s general employee benefit plans during the Continuing Period on the same terms as do other active employees of the Company. The Executive will also generally continue to receive those executive perquisites that are generally available
to senior executives of the Company. 
  
 4.3 Equity
Plans. 
  
 (a) Executive will continue
to vest in any unvested stock option according to the terms of the applicable plan and grant documents (subject to Sections 5(b)(iv) and 5(c) below). For the avoidance of doubt, the Company and Executive acknowledge and agree that (i) upon
termination of Executive’s employment for any reason (other than by the Company without Cause or by Executive for Good Reason), the Executive shall be vested in his stock option awards as of the date of such termination to the extent provided
for in the applicable plan and grant documents and (ii) upon termination of Executive’s employment by the Company without Cause or by Executive for Good Reason, the accelerated vesting provisions of Section 5(b)(iv) shall apply (subject to
Section 5(c)). 
  
 (b) Executive will continue to
vest in any unvested restricted stock bonus award according to the terms of the applicable plan and award document (subject to Section 5(b)(iv) below); provided, that upon Executive’s execution and non-revocation the release attached as Exhibit
A on or after March 31, 2006, the restrictions on the restricted stock bonus award granted to Executive on February 26, 2003 shall lift in all respects, and the Executive shall become 100% vested in such stock, effective as of the passage of the
revocation period set forth in the release. 
  
 (c) Executive will not receive any equity awards during the term of this Agreement. 
  

	5.	TERMINATION OF EMPLOYMENT. 

  
 5.1 Termination Benefits. If, during the term of this Agreement, Executive’s employment with the Company shall be terminated, Executive
shall be entitled to the following compensation and benefits: 
  
 (a) If Executive’s employment with the Company shall be terminated (i) by the Company for Cause or Disability, (ii) by reason of Executive’s death, or (iii) by Executive other than for Good Reason, the
Company shall pay to Executive the Accrued Compensation. 
  
 (b) If Executive’s employment with the Company shall be terminated for any reason other than as specified in Section 5.1(a) (including, but not limited to, Executive’s termination for Good Reason), Executive
shall be entitled to the following: 
  
 (i) the
Company shall pay Executive all Accrued Compensation; and 
  
 (ii) the Company shall pay Executive as severance pay, and in lieu of any further compensation, the amounts set forth in Sections 4.1 and 4.2 which Executive would have 

  

 4 

 
received through the end of the Continuing Period had the Executive’s employment not been terminated; 
  
 (iii) until March 31, 2006, Executive shall continue to have
such rights with respect to benefits provided by the Company, including without limitation life insurance, disability, medical, dental and hospitalization benefits and pension and retirement benefits as the Company’s senior executives; and

  
 (iv) the restrictions on any outstanding
incentive awards (including restricted stock and granted performance shares or units) granted to Executive under the Company’s stock option and other stock incentive plans or under any other incentive plan or arrangement shall lapse and such
incentive award shall become 100% vested, all stock options and stock appreciation rights granted to Executive shall become immediately exercisable and shall become 100% vested and all performance units granted to Executive shall become 100% vested.

  
 (c) The payments and vesting set forth in
Sections 5.1(b) (ii through iv) shall be and are expressly conditioned on Executive’s execution of, on or after the Termination Date, and non-revocation of the release, attached as Exhibit A, and shall be effective only as of the passage of the
revocation period. The amounts provided for in Sections 5.1(a) and 5.1(b)(i) and (ii) shall be paid in a single lump sum cash payment within thirty (30) days after the Termination Date (or earlier, if required by applicable law). 
  
 (d) The Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment or otherwise and, except as set forth in Section 5.1(b)(iii), no such payment shall be offset or reduced by the amount of any compensation or benefits provided to
Executive in any subsequent employment. 
  
 5.2
Cooperation. Notwithstanding anything to the contrary contained in this Agreement, payment of the amounts specified in Section 5.1(b)(ii) hereof is conditional upon Executive’s compliance with the provisions of Section 9.

  

	6.	OTHER BENEFIT POLICIES. 

  
 The severance pay and benefits provided for in Section 5 shall be in lieu of any other severance or termination pay to which Executive may be entitled
under any Company severance or termination plan, program, practice or arrangement. The Executive’s entitlement to any other compensation or benefits shall be determined in accordance with the Company’s employee benefit plans and other
applicable programs, policies and practices then in effect. 
  

	7.	NON-ADMISSION/GENERAL RELEASE. 

  
 Executive and the Company agree that, in exchange for the Company entering into this Agreement and the payments and other terms described herein, the
Company is not admitting to any wrongdoing or unlawful action in its dealing with Executive and, except as provided in this Agreement, Executive hereby releases and discharges the Company and any subsidiaries or affiliates thereof (including
American Bioscience, Inc.), and their respective directors, officers, 

  

 5 

 
employees, benefit plans and administrators, successors and assigns from any and all claims, obligations, and liabilities, whether known or unknown, at law
or in equity, arising out of Executive’s employment with the Company and the termination. Provided, this shall not include release of any equity interests, grants, rights or entitlements, or any other accrued benefits under any agreement, Plan
or Policy, or to any Accrued Compensation. Subject to those benefits and rights and the rights hereunder, this Agreement is to be broadly construed so as to resolve all pending or potential disputes including, but without limiting the generality of
the foregoing, any and all claims under the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act of 1990, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Employee Retirement
Income Security Act of 1974, the Equal Pay Act, the Family and Medical Leave Act, the discrimination and wage payment laws of the State of Illinois, and any other statute, regulation, or ordinance, and any and all claims based upon alleged wrongful
or retaliatory discharge, negligence, intentional infliction of emotional distress, defamation, invasion of privacy, other torts, harassment, employment discrimination or breach of contract (express or implied). Notwithstanding the foregoing,
Executive does not waive any rights Executive may have to enforce the terms of this Agreement, to benefits available after termination under any Company-sponsored equity or employee benefit plan, to insurance protection and/or indemnification for
actions taken by the Executive while an employee, officer and/or director of the Company or to make any claims for workers’ compensation. 
  
 Executive acknowledges and agrees that: 
  
 (a) Executive has read and understands this Agreement in its entirety; 
  
 (b) Executive has been advised in writing to consult with an attorney concerning this Agreement before
signing it. This subparagraph constitutes such written advice; Executive has twenty-one (21) calendar days after receipt of this Agreement to consider its terms before signing it; 
  
 (c) Executive has the right to revoke this Agreement in full within seven (7) calendar days of executing it.
Any revocation must be personally delivered to General Counsel, or his designee, or mailed to American Pharmaceutical Partners, Inc., 1501 Woodfield Road, Suite 300 East, Schaumburg, IL 60173, and postmarked within seven (7) calendar days of the
date of execution of this Agreement. None of the terms and provisions of this Agreement shall become effective or be enforceable until such revocation period has expired; 
  
 (d) Nothing contained in this Agreement waives any claim that may arise after the date of its execution;

  
 (e) Executive executes this Agreement
knowingly and voluntarily, without duress or reservation of any kind, and after having given the matter full and careful consideration; and 
  

 6 

 (f) Except as expressly set forth herein, Executive is not entitled to any equity
interest in the Company or any of its subsidiaries or affiliates thereof (including American Bioscience, Inc.),. 
  

	8.	NOTICE OF TERMINATION. 

  
 Any purported termination of Executive’s employment by the Company shall be communicated by Notice of Termination to Executive. For purposes of this
Agreement, no such purported termination shall be effective without such Notice of Termination. The Company may condition the payment to Executive of severance benefits pursuant to Section 5.1(b) (ii) upon Executive’s delivery of a Release in
favor of the Company in the form of Exhibit A. 
  

	9.	CONFIDENTIAL INFORMATION. 

  
 9.1 Confidence. Executive shall hold in confidence for the benefit of the Company all secret or confidential information, knowledge or data
relating to the Company and its businesses, which shall have been obtained by Executive in the course of Executive’s employment by the Company and which shall not be public knowledge (other than by acts by Executive in violation of this
Agreement) (“Confidential Information”). Confidential Information shall include, without limitation, all business contacts, business opportunities, plans or other business ideas pursued, considered, or discussed under or pursuant to this
Agreement during the Continuing Period, which Executive hereby assigns to the Company. Whether before or after termination of the Executive’s employment with the Company, Executive shall not, without the prior written consent of the Company,
communicate, use or divulge any Confidential Information, other than to the Company and to those persons or entities designated by the Company or as otherwise is reasonably necessary for Executive to carry out his or her responsibilities as an
executive of the Company. Confidential Information shall not include information which is required to be disclosed pursuant to law, provided Executive uses reasonable efforts to give the Company reasonable notice of such required disclosure. This
Section 9 shall survive termination of this Agreement. 
  
 9.2
Remedies. Executive agrees that any breach or threatened breach by Executive of this Section 9 will entitle the Company to defer or withhold any amounts otherwise payable to Executive under this Agreement until an arbitrator has ruled
on said matter. Provided, that in the event the arbitrator determines the withholding was without substantial justification, the Company shall be ordered to pay twice the amount withheld as liquidated damages. 
  

	10.	COVENANT NOT TO COMPETE. 

  
 10.1 Non-Competition. During the Continuing Period and the Restriction Period (if applicable), Executive agrees that Executive will not,
directly or indirectly, engage in any business activity that is or may reasonably be found to be in competition with the business of the Company and its subsidiaries as such business may exist at any time during such period; provided, that nothing
in this Agreement shall be deemed to prohibit Executive from owning not more than five percent (5%) of any class of publicly traded securities of a competitor. 
  

 7 

 10.2 Non-Solicitation. During the Continuing Period and the Restriction Period (if applicable),
Executive will not: 
  
 (a) Solicit, raid, entice
or induce any employee of the Company to be employed by any competitor of the Company (except to the extent that such employee has first responded to a general advertisement or general employment search by Executive’s place of employment at the
time); 
  
 (b) Solicit business for any
competitor from, or transact such business for any competitor with, any person, firm or corporation which was, at any time during Executive’s employment hereunder, a customer or vendor of the Company; or 
  
 (c) Assist a competitor in taking such action. 

 
 10.3 Remedies. Executive agrees that any breach or
threatened breach by Executive of any provision of this Section 10 will entitle the Company, in addition to any other legal remedies available to it, to apply to any court of competent jurisdiction to enjoin the breach or threatened breach, it being
acknowledged and agreed that any such material breach will cause irreparable injury to the Company and that any damages will not provide adequate remedies to the Company. 
  

	11.	RESTRICTIVE COVENANT OPTION. 

  
 On or before the earlier of (i) the date that is six months prior to the end of the Continuation Period or (ii) the date that the Notice of
Termination is delivered by the Company, the Company has the option to give the Executive written notice of its intention to exercise this Restrictive Covenant Option. If the Company so elects, then until December 31, 2006 (the “Restriction
Period”), and notwithstanding any termination of Executive’s employment for any reason (other than for death), the Executive will continue to comply with the restrictions set forth in Sections 10 and 16.2, and the Company agrees that
during the Restriction Period it will continue to pay Executive the compensation and benefits set forth in Section 4 above (including the 2006 Bonus Amount) until the earlier to occur of (i) the end of the Restriction Period or (ii) the
Executive’s death. Sections 10 and 16.2 shall survive termination of this Agreement for the duration of the Restriction Period. 
  

	12.	SUCCESSORS; BINDING AGREEMENT. 

  
 12.1 Binding Effect. This Agreement shall be binding upon and inure to the benefit of Executive’s executors, administrators, legal representatives,
heirs and legatees and on the Company and its subsidiaries, affiliates, agents, employees, officers and their respective successors and assigns. The Company shall require any Successors and Assigns to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession or assignment had taken place. 
  
 12.2 Neither this Agreement nor any right or interest hereunder shall be assignable or transferable by Executive or Executive’s beneficiaries or
legal representatives, except by will or 

  

 8 

 
by the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal personal representative.

  

	13.	FEES AND EXPENSES AND INDEMNIFICATION. 

  
 13.1. Indemnification. The Company agrees to indemnify and hold harmless, to the full extent permitted by law, all legal fees and expenses which
Executive may reasonably incur as a result of any action threatened or filed against Executive arising from or on account of his employment by the Company. The Company shall pay all reasonable legal fees and related expenses (including the
reasonable costs of experts, evidence and counsel) incurred by Executive as they become due as a result of such obligation. 
  
 13.2 Cooperation. If Executive is requested or asked by the Company to assist it or its counsel or is otherwise subpoenaed or called as a witness,
at trial or otherwise, the Company will advance Executive the expenses related thereto and if Executive is not otherwise receiving compensation under this agreement during the period in question. The Company will provide Executive with reasonable
compensation for Executive’s time. 
  
 13.3 Upon execution of
this Agreement by Executive, the Company shall deliver to Executive a check in the amount of $15,000 (with no deductions or withholding) for and as reimbursement to the Executive for attorneys’ fees incurred by Executive in connection with
advice and counsel with respect to this new arrangement with the Company, including negotiating this Agreement. 
  

	14.	NOTICE. 

  
 Notices and all other communications provided for in this Agreement (including the Notice of Termination) shall be in writing and shall be deemed to have
been duly given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, addressed to the respective addresses last given by each party to the other; provided, that all notices to the Company shall be directed
to the attention of the Board with a copy to the Secretary of the Company. All notices and communications shall be deemed to have been received on the date of delivery thereof or on the third business day after the mailing thereof, except that
notice of change of address shall be effective only upon receipt. 
  

	15.	SETTLEMENT OF CLAIMS. 

  
 The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected
by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Company may have against Executive or others. 
  

	16.	MISCELLANEOUS. 

  
 16.1 Waiver/Modification. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by 

  

 9 

 
Executive and the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreement or representation, oral or otherwise, express or
implied, with respect to the subject matter hereof has been made by either party which is not expressly set forth in this Agreement. 
  
 16.2 No Disparagement. The parties agree that they will not, directly or indirectly, individually or in concert with others, engage in any conduct
or make any statement calculated or likely to have the effect of undermining, disparaging or otherwise reflecting poorly upon the other (including, in the Company’s case, its employees, officers and directors), though each (in the
Company’s case, through representatives) may give truthful testimony if properly subpoenaed to testify under oath. 
  
 16.3 Effect on Compensation Protection Agreement. Executive acknowledges that the Compensation Protection Agreement between him and the Company,
dated November 20, 2001 (the “CPA”), expired at 11:59 pm on November 19, 2004. 
  

	17.	GOVERNING LAW; ARBITRATION. 

  
 (a) This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Illinois without giving
effect to the conflict of laws principles thereof. 
  
 (b) Any controversy or claim arising out of, relating to or in connection with this Agreement, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association (“AAA”) in accordance with
its then existing Commercial Arbitration rules and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. 
  

(c) It is the express agreement of the parties that the provisions of this Section, including the rules of the AAA, as modified by the
terms of this Section 16, shall govern the arbitration of any disputes arising pursuant to this Agreement. In the event of any conflict between the law of the State of Illinois, the law of the arbitral location, and the U.S. Arbitration Act (Title
9, U.S. Code), with respect to any arbitration conducted pursuant to this Agreement, to the extent permissible, it is the express intent of the parties that the law of Illinois, as modified herein, shall prevail. To the extent this Section 17 is
deemed a separate agreement, independent from this Agreement, Sections 16, 17 and 18 are incorporated herein by reference. Either party (the “Initiating Party”) may commence arbitration by submitting a Demand for Arbitration under the AAA
Rules and by notice to the other Party (the “Respondent”) in accordance with Section 14. Such notice shall set forth in reasonable detail the basic operative facts upon which the Initiating Party seeks relief and specific reference to the
clauses of this Agreement, the amount claimed, if any, and any non-monetary relief sought against the Respondent. After the initial list of issues to be resolved has been submitted, the Arbitrators shall permit either party to propose additional
issues for resolution in the pending proceedings. 
  

 10 

 (d) The place of arbitration shall be Chicago, Illinois, or any other place selected by
mutual agreement. 
  
 (e) The parties shall
attempt, by agreement, to nominate a sole arbitrator for confirmation by the AAA If the parties fail so to nominate a sole arbitrator within 30 days from the date when the Initiating Party’s Demand for Arbitration has been communicated to the
other party, a board of three arbitrators shall be appointed by the parties jointly or, if the parties cannot agree as to three arbitrators within 30 days after the commencement of the arbitration proceeding, then one arbitrator shall be appointed
by each of Executive and the Company within 60 days after the commencement of the arbitration proceeding and the third arbitrator shall be appointed by mutual agreement of such two arbitrators. If such two arbitrators shall fail to agree within 75
days after commencement of the arbitration proceeding upon the appointment of the third arbitrator, the third arbitrator shall be appointed by the AAA in accordance with its then existing rules. Notwithstanding the foregoing, if any party shall fail
to appoint an arbitrator within the specified time period, such arbitrator and the third arbitrator shall be appointed by the AAA in accordance with its then existing rules. For purposes of this Section 16, the “commencement of the arbitration
proceeding” shall be deemed to be the date upon which the Demand for Arbitration has been received by the AAA. Any award shall be rendered by a majority of the members of the board of arbitration. 
  
 (f) An award rendered in connection with arbitration
pursuant to this Section 16 shall be final and binding upon the parties, and any judgment upon such an award may be entered and enforced in any court of competent jurisdiction. 
  
 (g) The parties agree that the award of the arbitral tribunal will be the sole and exclusive remedy between
them regarding any and all claims between them with respect to the subject matter of the arbitrated dispute. The parties hereby waive all jurisdictional defenses in connection with any arbitration hereunder or the enforcement of any order or award
rendered pursuant thereto (assuming that the terms and conditions of this arbitration clause have been complied with). 
  
 (h) With respect to any award issued by the arbitrators pursuant to this Agreement, the parties expressly agree (i) that such order shall
be conclusive proof of the validity of the determination(s) of the arbitrators underlying such order; and (ii) any federal court sitting in Chicago, Illinois, or any other court having jurisdiction, may enter judgment upon and enforce such order,
whether pursuant to the U.S. Arbitration Act, or otherwise. 
  
 (i) The arbitrators shall issue a written explanation of the reasons for the award and a full statement of the facts as found and the rules of law applied in reaching their decision to both parties. The arbitrators
shall apportion to each party all costs (other than attorneys’ fees) incurred in conducting the arbitration in accordance with what the arbitrators deem just and equitable under the circumstances. Any provisional remedy which would be available
to a court of law shall be available from the arbitrators pending arbitration of the dispute. Either party may make an application to the arbitrators seeking injunctive or other interim relief, and the arbitrators may take whatever interim measures
they deem necessary in 

  

 11 

 
respect of the subject matter of the dispute, including measures to maintain the status quo until such time as the arbitration award is rendered or the
controversy is otherwise resolved. The arbitrator shall have the authority to award any remedy or relief that a court of the State of Illinois could order or grant, including, without limitation, specific performance of any obligation created under
this Agreement, the issuance of an injunction, or the imposition of sanctions for abuse or frustration of the arbitration process, but specifically excluding punitive damages (the parties specifically agree that punitive damages shall not be
available in the event of any dispute). 
  
 (j)
The parties may file an application in any proper court for a provisional remedy in connection with an arbitrable controversy, but only upon the ground that the award to which the application may be entitled may be rendered ineffectual without
provisional relief. 
  
 (k) If Executive is found
by the Arbitrator to be the prevailing party with respect to such controversy or claim, Executive shall be entitled to be reimbursed for his reasonable attorneys fees and costs incurred in connection therewith. 
  

	18.	SEVERABILITY. 

  
 The provisions of this Agreement shall be deemed severable, and the invalidity or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. 
  

	19.	ENTIRE AGREEMENT. 

  
 This Agreement constitutes the entire agreement between the parties hereto and supersedes all prior agreements, if any, understandings and arrangements,
oral or otherwise, between the parties hereto with respect to the subject matter hereof. 
  
 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and Executive has executed this Agreement as of the day and year first above written. 
  

			
	AMERICAN PHARMACEUTICAL PARTNERS, INC.
		
	By:	 	 /s/ Alan Heller

	 Name:
	 	 Alan Heller

	 Title:
	 	 Chief Executive Officer

	
	 /s/ Jeffrey Yordon

	 JEFFREY YORDON

  

 12 

 EXHIBIT A 
  
 RELEASE 
  
 In consideration for the benefits described in the Continuing Arrangement Agreement, Executive hereby releases and discharges American Pharmaceutical
Partners, Inc., and any subsidiaries or affiliates (including American Bioscience, Inc.) thereof (collectively the “Company”), and their respective directors, officers, employees, benefit plans and administrators, successors and assigns
from any and all claims, obligations, and liabilities, whether known or unknown, at law or in equity, arising out of Executive’s employment with the Company and the termination thereof, except for the compensation and benefits and those matters
reserved from release in the Continuing Arrangement Agreement. Except for the compensation and benefits and those matters reserved from release in the Continuing Arrangement Agreement this Release is to be broadly construed so as to resolve all
other pending or potential disputes including, but without limiting the generality of the foregoing, any and all claims under the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act of 1990, Title VII of the
Civil Rights Act of 1964, the Americans with Disabilities Act, the Employee Retirement Income Security Act of 1974, the Equal Pay Act, the Family and Medical Leave Act, the discrimination and wage payment laws of the State of Illinois, and any other
statute, regulation, or ordinance, and any and all claims based upon alleged wrongful or retaliatory discharge, negligence, intentional infliction of emotional distress, defamation, invasion of privacy, other torts, harassment, employment
discrimination or breach of contract (express or implied). Notwithstanding the foregoing, Executive does not waive any rights Executive may have to enforce the terms of the Continuing Arrangement Agreement or those matters reserved from release in
said agreement, to benefits available after termination under any Company-sponsored employee benefit plan, to insurance protection and/or indemnification for actions taken by the Executive while an employee, officer and/or director of the Company or
to make any claims for workers’ compensation. 
  
 Executive acknowledges and
agrees that: 
  
 Executive has read and understands this Release
in its entirety; 
  
 (a) Executive has been
advised in writing to consult with an attorney concerning this Release before signing it. This subparagraph constitutes such written advice; 
  
 (b) Executive has twenty-one (21) calendar days after receipt of this Release to consider its terms before signing it; 
  
 (c) Executive has the right to revoke this Release in full
within seven (7) calendar days of executing it. Any revocation must be personally delivered to General Counsel or his designee, or mailed to American Pharmaceutical Partners, Inc., 1501 Woodfield Road, Suite 300 East, Schaumburg, IL 60173, and
postmarked within seven (7) calendar days of the date of execution of this Release. None of the terms and provisions of this Release shall become effective or be enforceable until such revocation period has expired; 
  

 1 

 (e) Nothing contained in this Release waives any claim that may arise after the date of
its execution; and 
  
 (f) Executive executes
this Release knowingly and voluntarily, without duress or reservation of any kind, and after having given the matter full and careful consideration. 
  

 2 

 EXHIBIT B 
  
 BONUS CALCULATION 
  

	A.	2004 BONUS AMOUNT 

  
 In general, the 2004 Bonus Amount shall be determined in accordance with the Company’s bonus plan in effect with respect to executive for the 2004
fiscal year, except that with respect to the determination of the “discretionary” increase or decrease in the bonus amount, such amount for Executive shall be equal (in terms of percentage of salary) to the amount of average increase or
decrease for the Company’s executive officers at the level of vice president or above (but excluding the Chief Executive Officer, Co-Chief Operating Officer or Chairman). 
  

	B.	2005 BONUS AMOUNT 

  
 The 2005 Bonus Amount shall be determined in accordance with business development targets and objectives established with respect to fiscal 2005, as
mutually agreed to in writing by Executive and the Company. 
  

	C.	2006 BONUS AMOUNT 

  
 1. If the Company does not elect its option under Section 11 to extend Executive’s employment through the Restriction Period, the 2006 Bonus Amount
shall be equal to 25% of the 2005 Bonus Amount. 
  
 2. If the
Company elects its option under Section 11 to extend Executive’s employment through the Restriction Period, then the 2006 Bonus Amount for 2006 shall be determined in accordance with business development targets and objectives established with
respect to fiscal 2006, as mutually agreed to in writing by Executive and the Company; provided, that if after March 31, 2006 but prior to December 31, 2006 the Executive’s employment is terminated (A) by the Company for Cause or Disability,
(B) by reason of Executive’s death or (C) by Executive other than for Good Reason, then the 2006 Bonus Amount shall be the 2005 Bonus Amount pro rated over the number of days of employment in 2006. 
  

 1Credit Agreement

 EXHIBIT 10.1 
  
 CREDIT AGREEMENT 
  
 THIS CREDIT AGREEMENT (this “Agreement”) is entered into as of May 1, 2005, by and between INTERLINK ELECTRONICS, INC., a Delaware corporation
(“Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”). 
  
 RECITALS 
  
 Borrower has requested that
Bank extend or continue credit to Borrower as described below, and Bank has agreed to provide such credit to Borrower on the terms and conditions contained herein. 
  
 NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Bank and Borrower hereby agree as
follows: 
  
 ARTICLE I 
 CREDIT TERMS 
  
 SECTION 1.1 LINE OF CREDIT. 
  

	(a)	Line of Credit. Subject to the terms and conditions of this Agreement, Bank hereby agrees to make advances to Borrower from time to time up to and including June 1, 2007, not
to exceed at any time the aggregate principal amount of Three Million and 00/100 Dollars ($3,000,000.00) (“Line of Credit”), the proceeds of which shall be used to finance Borrower’s working capital requirements. Borrower’s
obligation to repay advances under the Line of Credit shall be evidenced by a promissory note dated as of May 1, 2005 (“Line of Credit Note”), all terms of which are incorporated herein by this reference. 

  

	(b)	 Letter of Credit Subfeature As a subfeature under the Line of Credit, Bank agrees from time to time during the term thereof to issue or cause an affiliate to
issue standby and/or sight commercial letters of credit for the account of Borrower to finance the purchase of raw materials (each, a “Letter of Credit” and collectively, “Letters of Credit”); provided however, that the aggregate
undrawn amount of all outstanding Letters of Credit shall not at any time exceed Two Million Dollars ($2,000,000.00). The form and substance of each Letter of Credit shall be subject to approval by Bank, in its sole discretion. Each Letter of Credit
shall be issued for a term not to exceed one hundred twenty (120) days, as designated by Borrower; provided however, that no Letter of Credit shall have an expiration date subsequent to the maturity date of the Line of Credit. The undrawn amount of
all Letters of Credit shall be reserved under the Line of Credit and shall not be available for borrowings thereunder. Each Letter of Credit shall be subject to the additional terms and conditions of the Letter of Credit agreements, applications and
any related documents required by Bank in connection with the issuance thereof. Each drawing paid under a Letter of Credit shall be deemed an advance under the Line of Credit and shall be repaid by Borrower in accordance with the terms and
conditions of this Agreement applicable to such advances; provided however, that if advances under the Line of Credit are not available, for any reason, at the time any drawing is paid, then Borrower shall immediately pay to Bank the full amount
drawn, together with interest thereon from the date such drawing is paid to the date such amount is fully repaid by Borrower, at the rate of interest applicable to advances under the Line of 

  

	 	 
Credit. In such event Borrower agrees that Bank, in its sole discretion, may debit any account maintained by Borrower with Bank for the amount of any such
drawing. 

  

	(c)	Borrowing and Repayment. Borrower may from time to time during the term of the Line of Credit borrow, partially or wholly repay its outstanding borrowings, and reborrow,
subject to all of the limitations, terms and conditions contained herein or in the Line of Credit Note; provided however, that the total outstanding borrowings under the Line of Credit shall not at any time exceed the maximum principal amount
available thereunder, as set forth above. 

  
 SECTION 1.2
INTEREST/FEES. 
  

	(a)	Interest. The outstanding principal balance of each credit subject hereto shall bear interest at the rate of interest set forth in each promissory note or other instrument or
document executed in connection therewith. 

  

	(b)	Computation and Payment. Interest shall be computed on the basis of a 360-day year, actual days elapsed. Interest shall be payable at the times and place set forth in each
promissory note or other instrument or document required hereby. 

  

	(c)	Commitment Fee. Borrower shall pay to Bank a non-refundable commitment fee for the Line of Credit equal to One Thousand Dollars ($1,000.00), which fee shall be due and
payable in full upon the execution of this Agreement. 

  

	(d)	Unused Commitment Fee. Borrower shall pay to Bank a fee equal to one-quarter percent (0.25%) per annum (computed on the basis of a 360-day year, actual days elapsed) on the
average daily unused amount of the Line of Credit, which fee shall be calculated on a quarterly basis by Bank and shall be due and payable by Borrower in arrears on each March 31, June 30, September 30 and December 31. 

  

	(e)	Letter of Credit Fees. Borrower shall pay to Bank fees upon the issuance of each Letter of Credit, upon the payment or negotiation of each drawing under any Letter of Credit
and upon the occurrence of any other activity with respect to any Letter of Credit (including without limitation, the transfer, amendment or cancellation of any Letter of Credit) determined in accordance with Bank’s standard fees and charges
then in effect for such activity. 

  
 SECTION 1.3 COLLECTION OF
PAYMENTS. Borrower authorizes Bank to collect all interest and fees due under each credit subject hereto by charging Borrower’s deposit account number 4796-018083 with Bank, or any other deposit account maintained by Borrower with Bank, for the
full amount thereof. Should there be insufficient funds in any such deposit account to pay all such sums when due, the full amount of such deficiency shall be immediately due and payable by Borrower. 
  

 SECTION 1.4 COLLATERAL. 
  
 As security for all indebtedness of Borrower to Bank subject hereto, Borrower hereby grants to Bank security interests of first priority in all Borrower’s accounts
receivable and other rights to payment, general intangibles, inventory, equipment and Wells Fargo Brokerage Account No. 12561247 maintained with Wells Fargo Institutional Brokerage & Sales. 
  
 All of the foregoing shall be evidenced by and subject to the terms of such security
agreements, financing statements, deeds or mortgages, and other documents as Bank shall reasonably require, all in form and substance satisfactory to Bank. Borrower shall reimburse Bank immediately upon demand for all costs and expenses incurred by
Bank in connection with any of the foregoing security, including without limitation, filing and recording fees and costs of appraisals, audits and title insurance. 
  
 ARTICLE II 
 REPRESENTATIONS AND WARRANTIES 
  
 Borrower makes the following
representations and warranties to Bank, which representations and warranties shall survive the execution of this Agreement and shall continue in full force and effect until the full and final payment, and satisfaction and discharge, of all
obligations of Borrower to Bank subject to this Agreement. 
  
 SECTION 2.1 LEGAL
STATUS. Borrower is a corporation, duly organized and existing and in good standing under the laws of Delaware, and is qualified or licensed to do business (and is in good standing as a foreign corporation, if applicable) in all
jurisdictions in which such qualification or licensing is required or in which the failure to so qualify or to be so licensed could have a material adverse effect on Borrower. 
  
 SECTION 2.2 AUTHORIZATION AND VALIDITY. This Agreement and each promissory note, contract, instrument and other document required hereby or
at any time hereafter delivered to Bank in connection herewith (collectively, the “Loan Documents”) have been duly authorized, and upon their execution and delivery in accordance with the provisions hereof will constitute legal, valid and
binding agreements and obligations of Borrower or the party which executes the same, enforceable in accordance with their respective terms. 
  
 SECTION 2.3 NO VIOLATION. The execution, delivery and performance by Borrower of each of the Loan Documents do not violate any provision of any law or regulation, or
contravene any provision of the Articles of Incorporation or By-Laws of Borrower, or result in any breach of or default under any contract, obligation, indenture or other instrument to which Borrower is a party or by which Borrower may be bound.

  
 SECTION 2.4 LITIGATION. There are no pending, or to the best of
Borrower’s knowledge threatened, actions, claims, investigations, suits or proceedings by or before any governmental authority, arbitrator, court or administrative agency which could have a material adverse effect on the financial condition or
operation of Borrower other than those disclosed by Borrower to Bank in writing prior to the date hereof. 
  

 SECTION 2.5 CORRECTNESS OF FINANCIAL STATEMENT. The financial statement of Borrower dated December 31, 2004, a true copy
of which has been delivered by Borrower to Bank prior to the date hereof, (a) is complete and correct and presents fairly the financial condition of Borrower, (b) discloses all liabilities of Borrower that are required to be reflected or reserved
against under generally accepted accounting principles, whether liquidated or unliquidated, fixed or contingent, and (c) has been prepared in accordance with generally accepted accounting principles consistently applied. Since the date of such
financial statement there has been no material adverse change in the financial condition of Borrower, nor has Borrower mortgaged, pledged, granted a security interest in or otherwise encumbered any of its assets or properties except in favor of Bank
or as otherwise permitted by Bank in writing. 
  
 SECTION 2.6 INCOME TAX RETURNS.
Borrower has no knowledge of any pending assessments or adjustments of its income tax payable with respect to any year. 
  
 SECTION 2.7 NO SUBORDINATION. There is no agreement, indenture, contract or instrument to which Borrower is a party or by which Borrower may be bound that requires the
subordination in right of payment of any of Borrower’s obligations subject to this Agreement to any other obligation of Borrower. 
  
 SECTION 2.8 PERMITS, FRANCHISES. Borrower possesses, and will hereafter possess, all permits, consents, approvals, franchises and licenses required and rights to all
trademarks, trade names, patents, and fictitious names, if any, necessary to enable it to conduct the business in which it is now engaged in compliance with applicable law. 
  
 SECTION 2.9 ERISA. Borrower is in compliance in all material respects with all applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended or recodified from time to time (“ERISA”); Borrower has not violated any provision of any defined employee pension benefit plan (as defined in ERISA) maintained or contributed to by Borrower (each, a
“Plan”); no Reportable Event as defined in ERISA has occurred and is continuing with respect to any Plan initiated by Borrower; Borrower has met its minimum funding requirements under ERISA with respect to each Plan; and each Plan will be
able to fulfill its benefit obligations as they come due in accordance with the Plan documents and under generally accepted accounting principles. 
  
 SECTION 2.10 OTHER OBLIGATIONS. Borrower is not in default on any obligation for borrowed money, any purchase money obligation or any other material lease, commitment,
contract, instrument or obligation. 
  
 SECTION 2.11 ENVIRONMENTAL MATTERS. Except
as disclosed by Borrower to Bank in writing prior to the date hereof, Borrower is in compliance in all material respects with all applicable federal or state environmental, hazardous waste, health 

  

 
and safety statutes, and any rules or regulations adopted pursuant thereto, which govern or affect any of Borrower’s operations and/or properties,
including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Superfund Amendments and Reauthorization Act of 1986, the Federal Resource Conservation and Recovery Act of 1976, and the Federal
Toxic Substances Control Act, as any of the same may be amended, modified or supplemented from time to time. None of the operations of Borrower is the subject of any federal or state investigation evaluating whether any remedial action involving a
material expenditure is needed to respond to a release of any toxic or hazardous waste or substance into the environment. Borrower has no material contingent liability in connection with any release of any toxic or hazardous waste or substance into
the environment. 
  
 ARTICLE III 
 CONDITIONS 
  
 SECTION 3.1 CONDITIONS OF INITIAL EXTENSION OF CREDIT. The obligation of Bank to extend any credit contemplated by this Agreement is subject to the fulfillment to
Bank’s satisfaction of all of the following conditions: 
  

	(a)	Approval of Bank Counsel. All legal matters incidental to the extension of credit by Bank shall be satisfactory to Bank’s counsel. 

  

	(b)	Documentation. Bank shall have received, in form and substance satisfactory to Bank, each of the following, duly executed: 

  

	 	(i)	This Agreement and each promissory note or other instrument or document required hereby. 

  

	 	(ii)	Certificate of Incumbency. 

  

	 	(iii)	Corporate Resolution: Borrowing. 

  

	 	(iv)	Continuing Security Agreement: Rights to Payment and Inventory. 

  

	 	(v)	Security Agreement: Equipment. 

  

	 	(vi)	Security Agreement: Securities Account. 

  

	 	(vii)	Addendum to Security Agreement: Securities Account. 

  

	 	(viii)	Securities Account Control Agreement (Wells Fargo Affiliate Intermediary). 

  

	 	(ix)	Statement of Purpose. 

  

	 	(x)	UCC Financing Statement. 

  

	 	(xi)	Such other documents as Bank may require under any other Section of this Agreement. 

  

	(c)	Financial Condition. There shall have been no material adverse change, as determined by Bank, in the financial condition or business of Borrower, nor any material decline, as
determined by Bank, in the market value of any collateral required hereunder or a substantial or material portion of the assets of Borrower. 

  

	(d)	Insurance. Borrower shall have delivered to Bank evidence of insurance coverage on all Borrower’s property, in form, substance, amounts, covering risks and issued by
companies satisfactory to Bank, and where required by Bank, with loss payable endorsements in favor of Bank. 

  
 SECTION 3.2 CONDITIONS OF EACH EXTENSION OF CREDIT. The obligation of Bank to make each extension of credit requested by Borrower hereunder shall be subject to the
fulfillment to Bank’s satisfaction of each of the following conditions: 
  

	(a)	Compliance. The representations and warranties contained herein and in each of the other Loan Documents shall be true on and as of the date of the signing of this Agreement
and on the date of each extension of credit by Bank pursuant hereto, with the same effect as though such representations and warranties had been made on and as of each such date, and on each such date, no Event of Default as defined herein, and no
condition, event or act which with the giving of notice or the passage of time or both would constitute such an Event of Default, shall have occurred and be continuing or shall exist. 

  

	(b)	Documentation. Bank shall have received all additional documents which may be required in connection with such extension of credit. 

  
 ARTICLE IV 
 AFFIRMATIVE COVENANTS 
  
 Borrower covenants that so long as Bank remains committed to extend credit to Borrower pursuant hereto, or any liabilities (whether direct or contingent, liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents remain
outstanding, and until payment in full of all obligations of Borrower subject hereto, Borrower shall, unless Bank otherwise consents in writing: 
  
 SECTION 4.1 PUNCTUAL PAYMENTS. Punctually pay all principal, interest, fees or other liabilities due under any of the Loan Documents at the times and place and in the
manner specified therein. 
  
 SECTION 4.2 ACCOUNTING RECORDS. Maintain adequate
books and records in accordance with generally accepted accounting principles consistently applied, and permit any representative of Bank, at any reasonable time, to inspect, audit and examine such books and records, to make copies of the same, and
to inspect the properties of Borrower. 
  
 SECTION 4.3 FINANCIAL STATEMENTS.
Provide to Bank all of the following, in form and detail satisfactory to Bank: 
  

	(a)	not later than 120 days after and as of the end of each fiscal year, a 10K report of Borrower filed with the Securities Exchange Commission, prepared by an independent certified
public accountant acceptable to Bank, to include balance sheet, income statement, statement of cash flow and all supporting schedules; 

  

	(b)	not later than 120 days after and as of the end of each fiscal quarter, a 10Q report of Borrower filed with the Securities Exchange Commission, prepared by Borrower, to include
balance sheet, income statement, statement of cash flow and all supporting schedules; 

  

	(c)	from time to time such other information as Bank may reasonably request. 

  
 SECTION 4.4 COMPLIANCE. Preserve and maintain all licenses, permits, governmental approvals, rights, privileges and franchises necessary for the conduct of its business;
and comply with the provisions of all documents pursuant to which Borrower is organized and/or which govern Borrower’s continued existence and with the requirements of all laws, rules, regulations and orders of any governmental authority
applicable to Borrower and/or its business. 
  
 SECTION 4.5 INSURANCE. Maintain
and keep in force insurance of the types and in amounts customarily carried in lines of business similar to that of Borrower, including but not limited to fire, extended coverage, public liability, flood, property damage and workers’
compensation, with all such insurance carried with companies and in amounts satisfactory to Bank, and deliver to Bank from time to time at Bank’s request schedules setting forth all insurance then in effect. 
  
 SECTION 4.6 FACILITIES. Keep all properties useful or necessary to Borrower’s business
in good repair and condition, and from time to time make necessary repairs, renewals and replacements thereto so that such properties shall be fully and efficiently preserved and maintained. 
  
 SECTION 4.7 TAXES AND OTHER LIABILITIES. Pay and discharge when due any and all indebtedness,
obligations, assessments and taxes, both real or personal, including without limitation federal and state income taxes and state and local property taxes and assessments, except such (a) as Borrower may in good faith contest or as to which a bona
fide dispute may arise, and (b) for which Borrower has made provision, to Bank’s satisfaction, for eventual payment thereof in the event Borrower is obligated to make such payment. 
  
 SECTION 4.8 LITIGATION. Promptly give notice in writing to Bank of any litigation pending or threatened against Borrower with a claim in
excess of $100,000.00. 
  
 SECTION 4.9 NOTICE TO BANK. Promptly (but in no event
more than five (5) days after the occurrence of each such event or matter) give written notice to Bank in reasonable detail of: (a) the occurrence of any Event of Default, or any condition, event or act which with the giving of notice or the passage
of time or both would constitute an Event of Default; (b) any change in the name or the organizational structure of Borrower; (c) the occurrence and nature of any Reportable Event or Prohibited Transaction, each as defined in ERISA, or any funding
deficiency with respect to any Plan; or (d) any termination or cancellation of any insurance policy 

  

 
which Borrower is required to maintain, or any uninsured or partially uninsured loss through liability or property damage, or through fire, theft or any
other cause affecting Borrower’s property. 
  
 ARTICLE V

 NEGATIVE COVENANTS 
  
 Borrower further covenants that so long as Bank remains committed to extend credit to Borrower pursuant hereto, or any liabilities (whether direct or contingent,
liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents remain outstanding, and until payment in full of all obligations of Borrower subject hereto, Borrower will not without Bank’s prior written consent: 
  
 SECTION 5.1 USE OF FUNDS. Use any of the proceeds of any credit extended hereunder except for
the purposes stated in Article I hereof. 
  
 SECTION 5.2 CAPITAL EXPENDITURES.
Make any additional investment in fixed assets in any fiscal year in excess of an aggregate of $1,500,000.00. 
  
 SECTION 5.3 LEASE EXPENDITURES. Incur operating lease expense in any fiscal year in excess of an aggregate of $500,000.00. 
  
 SECTION 5.4 OTHER INDEBTEDNESS. Create, incur, assume or permit to exist any indebtedness or liabilities resulting from borrowings, loans or advances, whether secured or
unsecured, matured or unmatured, liquidated or unliquidated, joint or several, except (a) the liabilities of Borrower to Bank, and (b) any other liabilities of Borrower existing as of, and disclosed to Bank prior to, the date hereof. 
  
 SECTION 5.5 MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Merge into or consolidate with any
other entity; make any substantial change in the nature of Borrower’s business as conducted as of the date hereof; acquire all or substantially all of the assets of any other entity; nor sell, lease, transfer or otherwise dispose of all or a
substantial or material portion of Borrower’s assets except in the ordinary course of its business. 
  
 SECTION 5.6 GUARANTIES. Guarantee or become liable in any way as surety, endorser (other than as endorser of negotiable instruments for deposit or collection in the ordinary course of business), accommodation endorser
or otherwise for, nor pledge or hypothecate any assets of Borrower as security for, any liabilities or obligations of any other person or entity, except any of the foregoing in favor of Bank. 
  
 SECTION 5.7 LOANS, ADVANCES, INVESTMENTS. Make any loans or advances to or investments in any
person or entity, except any of the foregoing existing as of, and disclosed to Bank prior to, the date hereof. 
  
 SECTION 5.8 DIVIDENDS, DISTRIBUTIONS. Declare or pay any dividend or distribution either in cash, stock or any other property on Borrower’s stock now or 

  

 
hereafter outstanding, nor redeem, retire, repurchase or otherwise acquire any shares of any class of Borrower’s stock now or hereafter outstanding.

  
 SECTION 5.9 PLEDGE OF ASSETS. Mortgage, pledge, grant or permit to exist a
security interest in, or lien upon, all or any portion of Borrower’s assets now owned or hereafter acquired, except any of the foregoing in favor of Bank or which is existing as of, and disclosed to Bank in writing prior to, the date hereof.

  
 ARTICLE VI 
 EVENTS OF DEFAULT 
  
 SECTION 6.1 The occurrence of any of the following shall constitute an “Event of Default” under this Agreement: 
  

	(a)	Borrower shall fail to pay when due any principal, interest, fees or other amounts payable under any of the Loan Documents. 

  

	(b)	Any financial statement or certificate furnished to Bank in connection with, or any representation or warranty made by Borrower or any other party under this Agreement or any other
Loan Document shall prove to be incorrect, false or misleading in any material respect when furnished or made. 

  

	(c)	Any default in the performance of or compliance with any obligation, agreement or other provision contained herein or in any other Loan Document (other than those referred to in
subsections (a) and (b) above), and with respect to any such default which by its nature can be cured, such default shall continue for a period of twenty (20) days from its occurrence. 

  

	(d)	Any default in the payment or performance of any obligation, or any defined event of default, under the terms of any contract or instrument (other than any of the Loan Documents)
pursuant to which Borrower, any guarantor hereunder, or any general partner or joint venturer in any Borrower which is a partnership or a joint venture (with each such guarantor, general partner and/or joint venturer referred to herein as a
“Third Party Obligor”) has incurred any debt or other liability to any person or entity, including Bank. 

  

	(e)	The filing of a notice of judgment lien against Borrower or any Third Party Obligor, or the recording of any abstract of judgment against Borrower or any Third Party Obligor in any
county in which Borrower or any Third Party Obligor has an interest in real property; or the service of a notice of levy and/or of a writ of attachment or execution, or other like process, against the assets of Borrower or any Third Party Obligor;
or the entry of a judgment against Borrower or any Third Party Obligor. 

  

	(f)	 Borrower or any Third Party Obligor shall become insolvent, or shall suffer or consent to or apply for the appointment of a receiver, trustee, custodian or
liquidator of itself or any of its property, or shall generally fail to pay its debts as they become 

  

	 	 
due, or shall make a general assignment for the benefit of creditors; Borrower or any Third Party Obligor shall file a voluntary petition in bankruptcy, or
seeking reorganization, in order to effect a plan or other arrangement with creditors or any other relief under the Bankruptcy Reform Act, Title 11 of the United States Code, as amended or recodified from time to time (“Bankruptcy Code”),
or under any state or federal law granting relief to debtors, whether now or hereafter in effect; or any involuntary petition or proceeding pursuant to the Bankruptcy Code or any other applicable state or federal law relating to bankruptcy,
reorganization or other relief for debtors is filed or commenced against Borrower or any Third Party Obligor, or Borrower or any Third Party Obligor shall file an answer admitting the jurisdiction of the court and the material allegations of any
involuntary petition; or Borrower or any Third Party Obligor shall be adjudicated a bankrupt, or an order for relief shall be entered against Borrower or any Third Party Obligor by any court of competent jurisdiction under the Bankruptcy Code or any
other applicable state or federal law relating to bankruptcy, reorganization or other relief for debtors. 

  

	(g)	There shall exist or occur any event or condition which Bank in good faith believes impairs, or is substantially likely to impair, the prospect of payment or performance by Borrower
of its obligations under any of the Loan Documents. 

  

	(h)	The death or incapacity of any individual Borrower or Third Party Obligor. The dissolution or liquidation of any Borrower or Third Party Obligor which is a corporation, partnership,
joint venture or other type of entity; or any such Borrower or Third Party Obligor, or any of its directors, stockholders or members, shall take action seeking to effect the dissolution or liquidation of such Borrower or Third Party Obligor.

  

	(i)	Any change in ownership of an aggregate of twenty-five percent (25%) or more of the common stock in Borrower. 

  
 SECTION 6.2 REMEDIES. Upon the occurrence of any Event of Default: (a) all indebtedness of
Borrower under each of the Loan Documents, any term thereof to the contrary notwithstanding, shall at Bank’s option and without notice become immediately due and payable without presentment, demand, protest or notice of dishonor, all of which
are hereby expressly waived by each Borrower; (b) the obligation, if any, of Bank to extend any further credit under any of the Loan Documents shall immediately cease and terminate; and (c) Bank shall have all rights, powers and remedies available
under each of the Loan Documents, or accorded by law, including without limitation the right to resort to any or all security for any credit subject hereto and to exercise any or all of the rights of a beneficiary or secured party pursuant to
applicable law. All rights, powers and remedies of Bank may be exercised at any time by Bank and from time to time after the occurrence of an Event of Default, are cumulative and not exclusive, and shall be in addition to any other rights, powers or
remedies provided by law or equity. 
  

 ARTICLE VII 
 MISCELLANEOUS 
  
 SECTION 7.1 NO WAIVER. No
delay, failure or discontinuance of Bank in exercising any right, power or remedy under any of the Loan Documents shall affect or operate as a waiver of such right, power or remedy; nor shall any single or partial exercise of any such right, power
or remedy preclude, waive or otherwise affect any other or further exercise thereof or the exercise of any other right, power or remedy. Any waiver, permit, consent or approval of any kind by Bank of any breach of or default under any of the Loan
Documents must be in writing and shall be effective only to the extent set forth in such writing. 
  
 SECTION 7.2 NOTICES. All notices, requests and demands which any party is required or may desire to give to any other party under any provision of this Agreement must be in writing delivered to each party at the
following address: 
  

			
	BORROWER:	  	Interlink Electronics, Inc.
	 	  	546 Flynn Road
	 	  	Camarillo, CA 93012-8027
		
	BANK:	  	WELLS FARGO BANK, NATIONAL ASSOCIATION
	 	  	Ventura LPO
	 	  	601 Daily Drive, STE #110
	 	  	Camarillo, CA 93010

  
 or to such other address as any party
may designate by written notice to all other parties. Each such notice, request and demand shall be deemed given or made as follows: (a) if sent by hand delivery, upon delivery; (b) if sent by mail, upon the earlier of the date of receipt or three
(3) days after deposit in the U.S. mail, first class and postage prepaid; and (c) if sent by telecopy, upon receipt. 
  
 SECTION 7.3 COSTS, EXPENSES AND ATTORNEYS’ FEES. Borrower shall pay to Bank immediately upon demand the full amount of all payments, advances, charges, costs and
expenses, including reasonable attorneys’ fees (to include outside counsel fees and all allocated costs of Bank’s in-house counsel), expended or incurred by Bank in connection with (a) the negotiation and preparation of this Agreement and
the other Loan Documents, Bank’s continued administration hereof and thereof, and the preparation of any amendments and waivers hereto and thereto, (b) the enforcement of Bank’s rights and/or the collection of any amounts which become due
to Bank under any of the Loan Documents, and (c) the prosecution or defense of any action in any way related to any of the Loan Documents, including without limitation, any action for declaratory relief, whether incurred at the trial or appellate
level, in an arbitration proceeding or otherwise, and including any of the foregoing incurred in connection with any bankruptcy proceeding (including without limitation, any adversary proceeding, contested matter or motion brought by Bank or any
other person) relating to any Borrower or any other person or entity. 
  

 SECTION 7.4 SUCCESSORS, ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the heirs,
executors, administrators, legal representatives, successors and assigns of the parties; provided however, that Borrower may not assign or transfer its interest hereunder without Bank’s prior written consent. Bank reserves the right to sell,
assign, transfer, negotiate or grant participations in all or any part of, or any interest in, Bank’s rights and benefits under each of the Loan Documents. In connection therewith, Bank may disclose all documents and information which Bank now
has or may hereafter acquire relating to any credit subject hereto, Borrower or its business, or any collateral required hereunder. 
  
 SECTION 7.5 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other Loan Documents constitute the entire agreement between Borrower and Bank with respect to each credit
subject hereto and supersede all prior negotiations, communications, discussions and correspondence concerning the subject matter hereof. This Agreement may be amended or modified only in writing signed by each party hereto. 
  
 SECTION 7.6 NO THIRD PARTY BENEFICIARIES. This Agreement is made and entered into for the
sole protection and benefit of the parties hereto and their respective permitted successors and assigns, and no other person or entity shall be a third party beneficiary of, or have any direct or indirect cause of action or claim in connection with,
this Agreement or any other of the Loan Documents to which it is not a party. 
  
 SECTION 7.7 TIME. Time is of the essence of each and every provision of this Agreement and each other of the Loan Documents. 
  
 SECTION 7.8 SEVERABILITY OF PROVISIONS. If any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective
only to the extent of such prohibition or invalidity without invalidating the remainder of such provision or any remaining provisions of this Agreement. 
  
 SECTION 7.9 COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which when executed and delivered shall be deemed to be an original, and
all of which when taken together shall constitute one and the same Agreement. 
  
 SECTION 7.10 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of California. 
  
 SECTION 7.11 ARBITRATION. 
  

	(a)	 Arbitration. The parties hereto agree, upon demand by any party, to submit to binding arbitration all claims, disputes and controversies between or among
them 

  

	 	 
(and their respective employees, officers, directors, attorneys, and other agents), whether in tort, contract or otherwise arising out of or relating to in
any way (i) the loan and related Loan Documents which are the subject of this Agreement and its negotiation, execution, collateralization, administration, repayment, modification, extension, substitution, formation, inducement, enforcement, default
or termination; or (ii) requests for additional credit. 

  

	(b)	Governing Rules. Any arbitration proceeding will (i) proceed in a location in California selected by the American Arbitration Association (“AAA”); (ii) be governed
by the Federal Arbitration Act (Title 9 of the United States Code), notwithstanding any conflicting choice of law provision in any of the documents between the parties; and (iii) be conducted by the AAA, or such other administrator as the parties
shall mutually agree upon, in accordance with the AAA’s commercial dispute resolution procedures, unless the claim or counterclaim is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and costs in which case the arbitration
shall be conducted in accordance with the AAA’s optional procedures for large, complex commercial disputes (the commercial dispute resolution procedures or the optional procedures for large, complex commercial disputes to be referred to, as
applicable, as the “Rules”). If there is any inconsistency between the terms hereof and the Rules, the terms and procedures set forth herein shall control. Any party who fails or refuses to submit to arbitration following a demand by any
other party shall bear all costs and expenses incurred by such other party in compelling arbitration of any dispute. Nothing contained herein shall be deemed to be a waiver by any party that is a bank of the protections afforded to it under 12
U.S.C. §91 or any similar applicable state law. 

  

	(c)	No Waiver of Provisional Remedies, Self-Help and Foreclosure. The arbitration requirement does not limit the right of any party to (i) foreclose against real or personal
property collateral; (ii) exercise self-help remedies relating to collateral or proceeds of collateral such as setoff or repossession; or (iii) obtain provisional or ancillary remedies such as replevin, injunctive relief, attachment or the
appointment of a receiver, before during or after the pendency of any arbitration proceeding. This exclusion does not constitute a waiver of the right or obligation of any party to submit any dispute to arbitration or reference hereunder, including
those arising from the exercise of the actions detailed in sections (i), (ii) and (iii) of this paragraph. 

  

	(d)	 Arbitrator Qualifications and Powers. Any arbitration proceeding in which the amount in controversy is $5,000,000.00 or less will be decided by a single
arbitrator selected according to the Rules, and who shall not render an award of greater than $5,000,000.00. Any dispute in which the amount in controversy exceeds $5,000,000.00 shall be decided by majority vote of a panel of three arbitrators;
provided however, that all three arbitrators must actively participate in all hearings and deliberations. The arbitrator will be a neutral attorney licensed in the State of California or a neutral retired judge of the state or federal judiciary of
California, in either case with a minimum of ten years experience in the substantive law applicable to the subject matter of the dispute to be arbitrated. The arbitrator will determine 

  

	 	 
whether or not an issue is arbitratable and will give effect to the statutes of limitation in determining any claim. In any arbitration proceeding the
arbitrator will decide (by documents only or with a hearing at the arbitrator’s discretion) any pre-hearing motions which are similar to motions to dismiss for failure to state a claim or motions for summary adjudication. The arbitrator shall
resolve all disputes in accordance with the substantive law of California and may grant any remedy or relief that a court of such state could order or grant within the scope hereof and such ancillary relief as is necessary to make effective any
award. The arbitrator shall also have the power to award recovery of all costs and fees, to impose sanctions and to take such other action as the arbitrator deems necessary to the same extent a judge could pursuant to the Federal Rules of Civil
Procedure, the California Rules of Civil Procedure or other applicable law. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction. The institution and maintenance of an action for judicial relief or
pursuit of a provisional or ancillary remedy shall not constitute a waiver of the right of any party, including the plaintiff, to submit the controversy or claim to arbitration if any other party contests such action for judicial relief.

  

	(e)	Discovery. In any arbitration proceeding discovery will be permitted in accordance with the Rules. All discovery shall be expressly limited to matters directly relevant to
the dispute being arbitrated and must be completed no later than 20 days before the hearing date and within 180 days of the filing of the dispute with the AAA. Any requests for an extension of the discovery periods, or any discovery disputes, will
be subject to final determination by the arbitrator upon a showing that the request for discovery is essential for the party’s presentation and that no alternative means for obtaining information is available. 

  

	(f)	Class Proceedings and Consolidations. The resolution of any dispute arising pursuant to the terms of this Agreement shall be determined by a separate arbitration proceeding
and such dispute shall not be consolidated with other disputes or included in any class proceeding. 

  

	(g)	Payment Of Arbitration Costs And Fees. The arbitrator shall award all costs and expenses of the arbitration proceeding. 

  

	(h)	 Real Properly Collateral; Judicial Reference. Notwithstanding anything herein to the contrary, no dispute shall be submitted to arbitration if the dispute
concerns indebtedness secured directly or indirectly, in whole or in part, by any real property unless (i) the holder of the mortgage, lien or security interest specifically elects in writing to proceed with the arbitration, or (ii) all parties to
the arbitration waive any rights or benefits that might accrue to them by virtue of the single action rule statute of California, thereby agreeing that all indebtedness and obligations of the parties, and all mortgages, liens and security interests
securing such indebtedness and obligations, shall remain fully valid and enforceable. If any such dispute is not submitted to arbitration, the dispute shall be referred to a referee in accordance with California Code of Civil Procedure Section 638
et seq., and this general reference 

  

	 	 
agreement is intended to be specifically enforceable in accordance with said Section 638. A referee with the qualifications required herein for arbitrators
shall be selected pursuant to the AAA’s selection procedures. Judgment upon the decision rendered by a referee shall be entered in the court in which such proceeding was commenced in accordance with California Code of Civil Procedure Sections
644 and 645. 

  

	(i)	Miscellaneous. To the maximum extent practicable, the AAA, the arbitrators and the parties shall take all action required to conclude any arbitration proceeding within 180
days of the filing of the dispute with the AAA. No arbitrator or other party to an arbitration proceeding may disclose the existence, content or results thereof, except for disclosures of information by a party required in the ordinary course of its
business or by applicable law or regulation. If more than one agreement for arbitration by or between the parties potentially applies to a dispute, the arbitration provision most directly related to the Loan Documents or the subject matter of the
dispute shall control. This arbitration provision shall survive termination, amendment or expiration of any of the Loan Documents or any relationship between the parties. 

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

			
	Interlink Electronics, Inc.
		
	 By:
	 	 /s/ Paul D. Meyer

		
	 Title:
	 	 Chief Financial Officer

	
	WELLS FARGO BANK, NATIONAL ASSOCIATION
		
	 By:
	 	 /s/ John E. Ray

	 	 	 John E. Ray, Relationship Manager

  

 Revolving Line of Credit Note 
  

			
	$3,000,000.00	 	Camarillo, California
	 	 	May 1, 2005

  
 FOR VALUE RECEIVED, the undersigned
Interlink Electronics, Inc. (“Borrower”) promises to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at its office at Ventura LPO, 601 Daily Drive, STE #110, Camarillo, CA 93010, or at such other
place as the holder hereof may designate, in lawful money of the United States of America and in immediately available funds, the principal sum of $3,000,000.00, or so much thereof as may be advanced and be outstanding, with interest thereon,
to be computed on each advance from the date of its disbursement as set forth herein. 
  

	1.	INTEREST: 

  
 1.1 Interest. The outstanding principal balance of this Note shall bear interest (computed on the basis of a 360-day year, actual days elapsed) at a rate per annum equal to the Prime Rate in
effect from time to time. The “Prime Rate” is a base rate that Bank from time to time establishes and which serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto. Each change in
the rate of interest hereunder shall become effective on the date each Prime Rate change is announced within Bank. 
  
 1.2 Payment of Interest. Interest accrued on this Note shall be payable on the 1st day of each month, commencing June 1, 2005. 
  
 1.3 Default Interest. From and after the maturity date of this Note, or such earlier
date as all principal owing hereunder becomes due and payable by acceleration or otherwise, the outstanding principal balance of this Note shall bear interest until paid in full at an increased rate per annum (computed on the basis of a
360-day year, actual days elapsed) equal to 4% above the rate of interest from time to time applicable to this Note. 
  

	2.	BORROWING AND REPAYMENT: 

  
 2.1 Borrowing and Repayment. Borrower may from time to time during the term of this Note borrow, partially or wholly repay its outstanding borrowings, and
reborrow, subject to all of the limitations, terms and conditions of this Note and of the Credit Agreement between Borrower and Bank defined below; provided however, that the total outstanding borrowings under this Note shall not at any time exceed
the principal amount stated above. The unpaid principal balance of this obligation at any time shall be the total amounts advanced hereunder by the holder hereof less the amount of principal payments made hereon by or for any Borrower, which balance
may be endorsed hereon from time to time by the holder. The outstanding principal balance of this Note shall be due and payable in full on June 1, 2007. 
  

2.2 Advances. Advances hereunder, to the total amount of the principal sum available hereunder, may be made by the holder at the oral or written request of (a)
Paul Meyer, Sharon McCracken, any one acting alone, who are authorized to request advances and 

  

 
direct the disposition of any advances until written notice of the revocation of such authority is received by the holder at the office designated above, or
(b) any person, with respect to advances deposited to the credit of any deposit account of any Borrower, which advances, when so deposited, shall be conclusively presumed to have been made to or for the benefit of each Borrower regardless of the
fact that persons other than those authorized to request advances may have authority to draw against such account. The holder shall have no obligation to determine whether any person requesting an advance is or has been authorized by any Borrower.

  
 2.3 Application of Payments. Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding principal balance hereof. 
  

	3.	EVENTS OF DEFAULT: 

  
 This Note is made pursuant to and is subject to the terms and conditions of that certain Credit Agreement between Borrower and Bank dated as of May 1, 2005, as amended from time to time (the “Credit
Agreement”). Any default in the payment or performance of any obligation under this Note, or any defined event of default under the Credit Agreement, shall constitute an “Event of Default” under this Note. 
  

	4.	MISCELLANEOUS: 

  
 4.1 Remedies. Upon the occurrence of any Event of Default, the holder of this Note, at the holder’s option, may declare all sums of principal and interest outstanding hereunder to be immediately due and
payable without presentment, demand, notice of nonperformance, notice of protest, protest or notice of dishonor, all of which are expressly waived by each Borrower, and the obligation, if any, of the holder to extend any further credit hereunder
shall immediately cease and terminate. Each Borrower shall pay to the holder immediately upon demand the full amount of all payments, advances, charges, costs and expenses, including reasonable attorneys’ fees (to include outside counsel fees
and all allocated costs of the holder’s in-house counsel), expended or incurred by the holder in connection with the enforcement of the holder’s rights and/or the collection of any amounts which become due to the holder under this Note,
and the prosecution or defense of any action in any way related to this Note, including without limitation, any action for declaratory relief, whether incurred at the trial or appellate level, in an arbitration proceeding or otherwise, and including
any of the foregoing incurred in connection with any bankruptcy proceeding (including without limitation, any adversary proceeding, contested matter or motion brought by Bank or any other person) relating to any Borrower or any other person or
entity. 
  
 4.2 Obligations Joint and Several. Should more than one person
or entity sign this Note as a Borrower, the obligations of each such Borrower shall be joint and several. 
  
 4.3 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of California. 
  

 IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first written above. 
  

			
	 Interlink Electronics, Inc.

		
	 By:
	 	 /s/ Paul D. Meyer

		
	 Title:
	 	 Chief Financial Officer

  

 Security Agreement Securities Account 
  
 1. GRANT OF SECURITY INTEREST. For valuable consideration, the undersigned Interlink
Electronics, Inc., or any of them (“Debtor”), hereby grants and transfers to WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) a security interest in (a) Debtor’s account no. 12561247 (whether held in Debtor’s
name or as a Bank collateral account for the benefit of Debtor), any sub-account thereunder or consolidated therewith, and all replacements or substitutions therefor, including any account resulting from a renumbering or other administrative
re-identification thereof (collectively, the “Securities Account”) maintained with Wells Fargo Institutional Brokerage & Sales (“Intermediary”), (b) all financial assets credited to the Securities Account, (c) all
security entitlements with respect to the financial assets credited to the Securities Account, and (d) any and all other investment property or assets maintained or recorded in the Securities Account (with all the foregoing defined as
“Collateral”), together with whatever is receivable or received when any of the Collateral or proceeds thereof are sold, collected, exchanged or otherwise disposed of, whether such disposition is voluntary or involuntary, including without
limitation, (i) all rights to payment, including returned premiums, with respect to any insurance relating to any of the foregoing, (ii) all rights to payment with respect to any claim or cause of action affecting or relating to any of the
foregoing, and (iii) all stock rights, rights to subscribe, stock splits, liquidating dividends, cash dividends, dividends paid in stock, new securities or other property of any kind which Debtor is or may hereafter be entitled to receive on account
of any securities pledged hereunder, including without limitation, stock received by Debtor due to stock splits or dividends paid in stock or sums paid upon or in respect of any securities pledged hereunder upon the liquidation or dissolution of the
issuer thereof (hereinafter called “Proceeds”). Except as otherwise expressly permitted herein, in the event Debtor receives any such Proceeds, Debtor will hold the same in trust on behalf of and for the benefit of Bank and will
immediately deliver all such Proceeds to Bank in the exact form received, with the endorsement of Debtor if necessary and/or appropriate undated stock powers duly executed in blank, to be held by Bank as part of the Collateral, subject to all terms
hereof. As used herein, the terms “security entitlement,” “financial asset” and “investment property” shall have the respective meanings set forth in the California Uniform Commercial Code. 
  
 2. OBLIGATIONS SECURED. The obligations secured hereby are the payment and performance of:
(a) all present and future Indebtedness of Debtor to Bank; (b) all obligations of Debtor and rights of Bank under this Agreement; and (c) all present and future obligations of Debtor to Bank of other kinds. The word “Indebtedness” is used
herein in its most comprehensive sense and includes any and all advances, debts, obligations and liabilities of Debtor, or any of them, heretofore, now or hereafter made, incurred or created, whether voluntary or involuntary and however arising,
whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, and whether Debtor may be liable individually or jointly, or whether recovery upon such Indebtedness may be or hereafter becomes unenforceable.

  
 3. TERMINATION. This Agreement will terminate upon the performance of all
obligations of Debtor to Bank, including without limitation, the payment of all Indebtedness of Debtor to Bank, and the termination of all commitments of Bank to 

  

 
extend credit to Debtor, existing at the time Bank receives written notice from Debtor of the termination of this Agreement. 
  
 4. OBLIGATIONS OF BANK. Bank has no obligation to make any loans hereunder. Any money
received by Bank in respect of the Collateral may be deposited, at Bank’s option, into a non-interest bearing account over which Debtor shall have no control, and the same shall, for all purposes, be deemed Collateral hereunder. Bank shall have
no duty to take any steps necessary to preserve the rights of Debtor against prior parties, or to initiate any action to protect against the possibility of a decline in the market value of the Collateral or Proceeds. Bank shall not be obligated to
take any action with respect to the Collateral or Proceeds requested by Debtor unless such request is made in writing and Bank determines, in its sole discretion, that the requested action would not unreasonably jeopardize the value of the
Collateral and Proceeds as security for the Indebtedness. 
  
 5. REPRESENTATIONS
AND WARRANTIES. Debtor represents and warrants to Bank that: (a) Debtor’s legal name is exactly as set forth on the first page of this Agreement, and all of Debtor’s organizational documents or agreements delivered to Bank are complete and
accurate in every respect; (b) Debtor is the owner of the Collateral and Proceeds; (c) Debtor has the exclusive right to grant a security interest in the Collateral and Proceeds; (d) all Collateral and Proceeds are genuine, free from liens, adverse
claims, setoffs, default, prepayment, defenses and conditions precedent of any kind or character, except the lien created hereby or as otherwise agreed to by Bank, or heretofore disclosed by Debtor to Bank, in writing; (e) all statements contained
herein and, where applicable, in the Collateral, are true and complete in all material respects; (f) no financing statement or control agreement covering any of the Collateral or Proceeds, and naming any secured party other than Bank, exists or is
on file in any public office or remains in effect; (g) no person or entity, other than Debtor, Bank and Intermediary, has any interest in or control over the Collateral; and (h) specifically with respect to Collateral and Proceeds consisting of
investment securities, instruments, chattel paper, documents, contracts, insurance policies or any like property, (i) all persons appearing to be obligated thereon have authority and capacity to contract and are bound as they appear to be, and (ii)
the same comply with applicable laws concerning form, content and manner of preparation and execution. 
  
 6. COVENANTS OF DEBTOR. 
  
 6.1 Debtor Agrees in
general: (a) to pay Indebtedness secured hereby when due; (b) to indemnify Bank against all losses, claims, demands, liabilities and expenses of every kind caused by property subject hereto; (c) to pay all costs and expenses, including reasonable
attorneys’ fees, incurred by Bank in the perfection and preservation of the Collateral or Bank’s interest therein and/or the realization, enforcement and exercise of Bank’s rights, powers and remedies hereunder; (d) to permit Bank to
exercise its powers; (e) to execute and deliver such documents as Bank deems necessary to create, perfect and continue the security interests contemplated hereby; (f) not to change its name, and as applicable, its chief executive office, its
principal residence or the jurisdiction in which it 

  

 
is organized and/or registered without giving Bank prior written notice thereof; (g) not to change the places where Debtor keeps any Collateral or
Debtor’s records concerning the Collateral and Proceeds without giving Bank prior written notice of the address to which Debtor is moving same; and (h) to cooperate with Bank in perfecting all security interests granted herein and in obtaining
such agreements from third parties as Bank deems necessary, proper or convenient in connection with the preservation, perfection or enforcement of any of its rights hereunder. 
  
 6.2 Debtor agrees with regard to the Collateral and Proceeds, unless Bank agrees otherwise in writing: (a) that Bank is authorized to file
financing statements in the name of Debtor to perfect Bank’s security interest in Collateral and Proceeds; (b) not to permit any security interest in or lien on the Collateral or Proceeds, except in favor of Bank and except liens in favor of
Intermediary to the extent expressly permitted by Bank in writing; (c) not to hypothecate or permit the transfer by operation of law of any of the Collateral or Proceeds or any interest therein; (d) to keep, in accordance with generally accepted
accounting principles, complete and accurate records regarding all Collateral and Proceeds, and to permit Bank to inspect the same and make copies thereof at any reasonable time; (e) if requested by Bank, to receive and use reasonable diligence to
collect Proceeds, in trust and as the property of Bank, and to immediately endorse as appropriate and deliver such Proceeds to Bank daily in the exact form in which they are received together with a collection report in form satisfactory to Bank;
(f) in the event Bank elects to receive payments of Proceeds hereunder, to pay all expenses incurred by Bank in connection therewith, including expenses of accounting, correspondence, collection efforts, filing, recording, record keeping and
expenses incidental thereto; (g) to provide any service and do any other acts which may be necessary to keep all Collateral and Proceeds free and clear of all defenses, rights of offset and counterclaims; and (h) if the Collateral or Proceeds
consists of securities and so long as no Event of Default exists, to vote said securities and to give consents, waivers and ratifications with respect thereto, provided that no vote shall be cast or consent, waiver or ratification given or action
taken which would impair Bank’s interests in the Collateral and Proceeds or be inconsistent with or violate any provisions of this Agreement. Debtor further agrees that any party now or at any time hereafter authorized by Debtor to advise or
otherwise act with respect to the Securities Account shall be subject to all terms and conditions contained herein and in any control, custodial or other similar agreement at any time in effect among Bank, Debtor and Intermediary relating to the
Collateral. 
  
 7. POWERS OF BANK. Debtor appoints Bank its true attorney-in-fact
to perform any of the following powers, which are coupled with an interest, are irrevocable until termination of this Agreement and may be exercised from time to time by Bank’s officers and employees, or any of them, whether or not Debtor is in
default: (a) to perform any obligation of Debtor hereunder in Debtor’s name or otherwise; (b) to notify any person obligated on any security, instrument or other document subject to this Agreement of Bank’s rights hereunder; (c) to collect
by legal proceedings or otherwise all dividends, interest, principal or other sums now or hereafter payable upon or on account of the Collateral or Proceeds; (d) to enter into any extension, modification, reorganization, deposit, merger or
consolidation agreement, or any other agreement relating to or 

  

 
affecting the Collateral or Proceeds, and in connection therewith to deposit or surrender control of the Collateral and Proceeds, to accept other property in
exchange for the Collateral and Proceeds, and to do and perform such acts and things as Bank may deem proper, with any money or property received in exchange for the Collateral or Proceeds, at Bank’s option, to be applied to the Indebtedness or
held by Bank under this Agreement; (e) to make any compromise or settlement Bank deems desirable or proper in respect of the Collateral and Proceeds; (f) to insure, process and preserve the Collateral and Proceeds; (g) to exercise all rights, powers
and remedies which Debtor would have, but for this Agreement, with respect to all Collateral and Proceeds subject hereto; and (h) to do all acts and things and execute all documents in the name of Debtor or otherwise, deemed by Bank as necessary,
proper and convenient in connection with the preservation, perfection or enforcement of its rights hereunder. To effect the purposes of this Agreement or otherwise upon instructions of Debtor, or any of them, Bank may cause any Collateral and/or
Proceeds to be transferred to Bank’s name or the name of Bank’s nominee. If an Event of Default has occurred and is continuing, any or all Collateral and/or Proceeds consisting of securities may be registered, without notice, in the name
of Bank or its nominee, and thereafter Bank or its nominee may exercise, without notice, all voting and corporate rights at any meeting of the shareholders of the issuer thereof, any and all rights of conversion, exchange or subscription, or any
other rights, privileges or options pertaining to such Collateral and/or Proceeds, all as if it were the absolute owner thereof. The foregoing shall include, without limitation, the right of Bank or its nominee to exchange, at its discretion, any
and all Collateral and/or Proceeds upon the merger, consolidation, reorganization, recapitalization or other readjustment of the issuer thereof, or upon the exercise by the issuer thereof or Bank of any right, privilege or option pertaining to any
shares of the Collateral and/or Proceeds, and in connection therewith, the right to deposit and deliver any and all of the Collateral and/or Proceeds with any committee, depository, transfer agent, registrar or other designated agency upon such
terms and conditions as Bank may determine. All of the foregoing rights, privileges or options may be exercised without liability on the part of Bank or its nominee except to account for property actually received by Bank. Bank shall have no duty to
exercise any of the foregoing, or any other rights, privileges or options with respect to the Collateral or Proceeds and shall not be responsible for any failure to do so or delay in so doing. 
  
 8. PAYMENT OF PREMIUMS, TAXES, CHARGES, LIENS AND ASSESSMENTS. Debtor agrees to pay, prior to
delinquency, all insurance premiums, taxes, charges, liens and assessments against the Collateral and Proceeds, and upon the failure of Debtor to do so, Bank at its option may pay any of them and shall be the sole judge of the legality or validity
thereof and the amount necessary to discharge the same. Any such payments made by Bank shall be obligations of Debtor to Bank, due and payable immediately upon demand, together with interest at a rate determined in accordance with the provisions of
this Agreement, and shall be secured by the Collateral and Proceeds, subject to all terms and conditions of this Agreement. 
  
 9. EVENTS OF DEFAULT. The occurrence of any of the following shall constitute an “Event of Default” under this Agreement: (a) any default in the payment or
performance of any obligation, or any defined event of default, under (i) any contract or 

  

 
instrument evidencing any Indebtedness, (ii) any other agreement between Debtor and Bank, including without limitation any loan agreement, relating to or
executed in connection with any Indebtedness, or (iii) any control, custodial or other similar agreement in effect among Bank, Debtor and Intermediary relating to the Collateral; (b) any representation or warranty made by Debtor herein shall prove
to be incorrect, false or misleading in any material respect when made; (c) Debtor shall fail to observe or perform any obligation or agreement contained herein; (d) any impairment of the rights of Bank in any Collateral or Proceeds or any
attachment or like levy on any property of Debtor; and (e) Bank, in good faith, believes any or all of the Collateral and/or Proceeds to be in danger of misuse, dissipation, commingling, loss, theft, damage or destruction, or otherwise in jeopardy
or unsatisfactory in character or value. 
  
 10. REMEDIES. Upon the occurrence of
any Event of Default, Bank shall have the right to declare immediately due and payable all or any Indebtedness secured hereby and to terminate any commitments to make loans or otherwise extend credit to Debtor. Bank shall have all other rights,
powers, privileges and remedies granted to a secured party upon default under the California Uniform Commercial Code or otherwise provided by law, including without limitation, the right (a) to contact all persons obligated to Debtor on any
Collateral or Proceeds and to instruct such persons to deliver all Collateral and/or Proceeds directly to Bank, and (b) to sell, lease, license or otherwise dispose of any or all Collateral. All rights, powers, privileges and remedies of Bank shall
be cumulative. No delay, failure or discontinuance of Bank in exercising any right, power, privilege or remedy hereunder shall affect or operate as a waiver of such right, power, privilege or remedy; nor shall any single or partial exercise of any
such right, power, privilege or remedy preclude, waive or otherwise affect any other or further exercise thereof or the exercise of any other right, power, privilege or remedy. Any waiver, permit, consent or approval of any kind by Bank of any
default hereunder, or any such waiver of any provisions or conditions hereof, must be in writing and shall be effective only to the extent set forth in writing. It is agreed that public or private sales or other dispositions, for cash or on credit,
to a wholesaler or retailer or investor, or user of property of the types subject to this Agreement, or public auctions, are all commercially reasonable since differences in the prices generally realized in the different kinds of dispositions are
ordinarily offset by the differences in the costs and credit risks of such dispositions. 
  
 While an Event of Default exists: (a) Debtor will not dispose of any Collateral or Proceeds except on terms approved by Bank; (b) Bank may appropriate the Collateral and apply all Proceeds toward repayment of the
Indebtedness in such order of application as Bank may from time to time elect; (c) Bank may take any action with respect to the Collateral contemplated by any control, custodial or other similar agreement then in effect among Bank, Debtor and
Intermediary; and (d) at Bank’s request, Debtor will assemble and deliver all books and records pertaining to the Collateral or Proceeds to Bank at a reasonably convenient place designated by Bank. For any Collateral or Proceeds consisting of
securities, Bank shall have no obligation to delay a disposition of any portion thereof for the period of time necessary to permit the issuer thereof to register such securities for public sale under any applicable state or Federal law, even if the
issuer 

  

 
thereof would agree to do so. Debtor further agrees that Bank shall have no obligation to process or prepare any Collateral for sale or other disposition.

  
 11. DISPOSITION OF COLLATERAL AND PROCEEDS; TRANSFER OF INDEBTEDNESS. In
disposing of Collateral hereunder, Bank may disclaim all warranties of title, possession, quiet enjoyment and the like. Any proceeds of any disposition of any Collateral or Proceeds, or any part thereof, may be applied by Bank to the payment of
expenses incurred by Bank in connection with the foregoing, including reasonable attorneys’ fees, and the balance of such proceeds may be applied by Bank toward the payment of the Indebtedness in such order of application as Bank may from time
to time elect. Upon the transfer of all or any part of the Indebtedness, Bank may transfer all or any part of the Collateral or Proceeds and shall be fully discharged thereafter from all liability and responsibility with respect to any of the
foregoing so transferred, and the transferee shall be vested with all rights and powers of Bank hereunder with respect to any of the foregoing so transferred; but with respect to any Collateral or Proceeds not so transferred Bank shall retain all
rights, powers, privileges and remedies herein given. 
  
 12. STATUTE OF
LIMITATIONS. Until all Indebtedness shall have been paid in full and all commitments by Bank to extend credit to Debtor have been terminated, the power of sale or other disposition and all other rights, powers, privileges and remedies granted to
Bank hereunder shall continue to exist and may be exercised by Bank at any time and from time to time irrespective of the fact that the Indebtedness or any part thereof may have become barred by any statute of limitations, or that the personal
liability of Debtor may have ceased, unless such liability shall have ceased due to the payment in full of all Indebtedness secured hereunder. 
  
 13. MISCELLANEOUS. When there is more than one Debtor named herein: (a) the word “Debtor” shall mean all or any one or more of them as the context requires; (b)
the obligations of each Debtor hereunder are joint and several; and (c) until all Indebtedness shall have been paid in full, no Debtor shall have any right of subrogation or contribution, and each Debtor hereby waives any benefit of or right to
participate in any of the Collateral or Proceeds or any other security now or hereafter held by Bank. Debtor hereby waives any right to require Bank to (i) proceed against Debtor or any other person, (ii) proceed against or exhaust any security from
Debtor or any other person, (iii) perform any obligation of Debtor with respect to any Collateral or Proceeds, and (d) make any presentment or demand, or give any notice of nonpayment or nonperformance, protest, notice of protest or notice of
dishonor hereunder or in connection with any Collateral or Proceeds. Debtor further waives any right to direct the application of payments or security for any Indebtedness of Debtor or indebtedness of customers of Debtor. 
  
 14. NOTICES. All notices, requests and demands required under this Agreement must be in
writing, addressed to Bank at the address specified in any other loan documents entered into between Debtor and Bank and to Debtor at the address of its chief executive office (or principal residence, if applicable) specified below or to such other
address as any party may designate by written notice to each other party, and shall be 

  

 
deemed to have been given or made as follows: (a) if personally delivered, upon delivery; (b) if sent by mail, upon the earlier of the date of receipt or 3
days after deposit in the U. S. mail, first class and postage prepaid; and (c) if sent by telecopy, upon receipt. 
  
 15. COSTS, EXPENSES AND ATTORNEYS’ FEES. Debtor shall pay to Bank immediately upon demand the full amount of all payments, advances, charges, costs and expenses,
including reasonable attorneys’ fees (to include outside counsel fees and all allocated costs of Bank’s in-house counsel), expended or incurred by Bank in exercising any right, power, privilege or remedy conferred by this Agreement or in
the enforcement thereof, whether incurred at the trial or appellate level, in an arbitration proceeding or otherwise, and including any of the foregoing incurred in connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other person) relating to Debtor or in any way affecting any of the Collateral or Bank’s ability to exercise any of its rights or remedies with respect thereto. All of the
foregoing shall be paid by Debtor with interest from the date of demand until paid in full at a rate per annum equal to the greater of ten percent (10%) or Bank’s Prime Rate in effect from time to time. 
  
 16. SUCCESSORS; ASSIGNS; AMENDMENT. This Agreement shall be binding upon and inure to the
benefit of the heirs, executors, administrators, legal representatives, successors and assigns of the parties, and may be amended or modified only in writing signed by Bank and Debtor. 
  
 17. OBLIGATIONS OF MARRIED PERSONS. Any married person who signs this Agreement as Debtor hereby expressly agrees that recourse may be had
against his or her separate property for all his or her Indebtedness to Bank secured by the Collateral and Proceeds under this Agreement. 
  
 18. SEVERABILITY OF PROVISIONS. If any provision of this Agreement shall be held to be prohibited by or invalid under applicable law, such provision shall be ineffective
only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or any remaining provisions of this Agreement. 
  
 19. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of California. 
  
 20. ADDENDUM. Additional terms and conditions relating to the Securities Account are set
forth in an Addendum attached hereto and incorporated herein by this reference. 
  
 Debtor warrants that Debtor is an organization registered under the laws of Delaware. 
  
 Debtor warrants that its chief executive office (or principal residence, if applicable) is located at the following address: 546 Flynn Road, Camarillo, CA 93012-8027 
  

 IN WITNESS WHEREOF, this Agreement has been duly executed as of May 1, 2005. 
  

			
	Interlink Electronics, Inc.
		
	By:	 	 /s/ Paul D. Meyer

			
		
	 Title:
	 	 Chief Financial Officer

  

 Securities Account Control Agreement 
  
 THIS SECURITIES ACCOUNT CONTROL AGREEMENT (this “Agreement”) is entered into as of
May 1, 2005, by and among Interlink Electronics, Inc. (“Customer”), Wells Fargo Institutional Brokerage and Sales (“Intermediary”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Secured Party”). 

 
 RECITALS 
  
 A. Customer maintains that certain account no. 12561247, and may now or hereafter
maintain sub-accounts thereunder or consolidated therewith (collectively, the “Securities Account”) with Intermediary pursuant to an agreement between Intermediary and Customer dated as of October 12, 2000 (the “Account
Agreement”), and Customer has granted to Secured Party a security interest in the Securities Account and all financial assets and other property now or at any time hereafter held in the Securities Account. 
  
 B. Secured Party, Customer and Intermediary have agreed to enter into this Agreement to
perfect Secured Party’s security interests in the Collateral, as defined below. 
  
 NOW, THEREFORE, in consideration of their mutual covenants and promises, the parties agree as follows: 
  
 21. DEFINITIONS. As used herein: 
  
 21.1 the term “Collateral” shall mean: (a) the Securities Account; (b) all financial assets credited to the Securities Account; (c) all security entitlements
with respect to the financial assets credited to the Securities Account; (d) any and all other investment property or assets maintained or recorded in the Securities Account; and (e) all replacements or substitutions for, and proceeds of the sale or
other disposition of, any of the foregoing, including without limitation, cash proceeds; and 
  
 21.2 the terms “investment property,” “entitlement order,” “financial asset” and “security entitlement” shall have the respective meanings set forth in the California Uniform
Commercial Code. The parties hereby expressly agree that all property, including without limitation, cash, certificates of deposit and mutual funds, at any time held in the Securities Account is to be treated as a “financial asset.”

  
 22. AGREEMENT FOR CONTROL. Intermediary is authorized by Customer and agrees
to comply with all entitlement orders originated by Secured Party with respect to the Securities Account, and all other requests or instructions from Secured Party regarding disposition and/or delivery of the Collateral, without further consent or
direction from Customer or any other party. 
  
 23. CUSTOMER’S RIGHTS WITH
RESPECT TO THE COLLATERAL. 
  
 23.1 Until Intermediary is notified otherwise by
Secured Party: (a) Customer, or any party authorized by Customer to act with respect to the Securities Account, may give trading instructions to Intermediary with respect to Collateral in the Securities Account; 

  

 
and (b) Intermediary may distribute to Customer or any other party in accordance with Customer’s directions only that portion of the Collateral which
consists of interest and/or cash dividends earned on financial assets maintained in the Securities Account. 
  
 23.2 Without Secured Party’s prior written consent, except to the extent permitted by the preceding paragraph: (a) neither Customer nor any party other than Secured Party may withdraw any Collateral from the
Securities Account; and (b) Intermediary will not comply with any entitlement order or request to withdraw any Collateral from the Securities Account given by any party other than Secured Party. 
  
 23.3 Upon receipt of either written or oral notice from Secured Party: (a) Intermediary shall
promptly cease complying with entitlement orders and other instructions concerning the Collateral, including the Securities Account, from all parties other than Secured Party; and (b) Intermediary shall not make any further distributions of any
Collateral to any party other than Secured Party, nor permit any further voluntary changes in the financial assets. 
  
 24. INTERMEDIARY’S REPRESENTATIONS AND WARRANTIES. Intermediary represents and warrants to Secured Party that: 
  
 24.1 The Securities Account is maintained with Intermediary solely in Customer’s name.

  
 24.2 Intermediary has no knowledge of any claim to, security interest in or
lien upon any of the Collateral, except: (a) the security interests in favor of Secured Party; and (b) Intermediary’s liens securing fees and charges, or payment for open trade commitments, as described in the last paragraph of this Section.

  
 24.3 Any claim to, security interest in or lien upon any of the Collateral
which Intermediary now has or at any time hereafter acquires shall be junior and subordinate to the security interests of Secured Party in the Collateral, except for Intermediary’s liens securing: (a) fees and charges owed by Customer with
respect to the operation of the Securities Account; and (b) payment owed to Intermediary for open trade commitments for purchases in and for the Securities Account. 
  
 25. AGREEMENTS OF INTERMEDIARY AND CUSTOMER. Intermediary and Customer agree that: 
  
 25.1 Intermediary shall flag its books, records and systems to reflect Secured Party’s
security interests in the Collateral, and shall provide notice thereof to any party making inquiry as to Customer’s accounts with Intermediary to whom or which Intermediary is legally required or permitted to provide information. 
  
 25.2 Intermediary shall send copies of all statements relating to the Securities Account
simultaneously to Customer and Secured Party. 
  

 25.3 Intermediary shall promptly notify Secured Party if any other party asserts any claim to, security interest in or
lien upon any of the Collateral, and Intermediary shall not enter into any control, custodial or other similar agreement with any other party that would create or acknowledge the existence of any such other claim, security interest or lien.

  
 25.4 Without Secured Party’s prior written consent, Intermediary and
Customer shall not amend or modify the Account Agreement, other than: (a) amendments to reflect ordinary and reasonable changes in Intermediary’s fees and charges for handling the Securities Account; and (b) operational changes initiated by
Intermediary as long as they do not alter any of Secured Party’s rights hereunder. 
  
 25.5 Neither Intermediary nor Customer shall terminate the Account Agreement without giving 30 days’ prior written notice to Secured Party. 
  
 26. MISCELLANEOUS. 
  
 26.1 This Agreement shall not create any obligation or duty of Intermediary except as expressly set forth herein. 
  
 26.2 As to the matters specifically the subject of this Agreement, in the event of any conflict between this Agreement and the Account Agreement or any other agreement
between Intermediary and Customer, the terms of this Agreement shall control. 
  
 26.3 All notices, requests and demands which any party is required or may desire to give to any other party under any provision of this Agreement must be in writing (unless otherwise specifically provided) and delivered to each party at the
address or facsimile number set forth below its signature, or to such other address or facsimile number as any party may designate by written notice to all other parties. Each such notice, request and demand shall be deemed given or made as follows:
(a) if sent by hand delivery, upon delivery; (b) if sent by facsimile, upon receipt; and (c) if sent by mail, upon the earlier of the date of receipt or 3 days after deposit in the U.S. mail, first class and postage prepaid. 
  
 26.4 This Agreement shall be binding upon and inure to the benefit of the heirs, executors,
administrators, legal representatives, successors and assigns of the parties; provided however, that Intermediary may not assign its obligations hereunder without Secured Party’s prior written consent. This Agreement may be amended or modified
only in writing signed by all parties hereto. 
  
 26.5 This Agreement shall
terminate upon: (a) Intermediary’s receipt of written notice from Secured Party expressly stating that Secured Party no longer claims any security interest in the Collateral; or (b) termination of the Account Agreement pursuant to the terms
hereof, and Intermediary’s delivery of all Collateral to Secured Party or its designee in accordance with Secured Party’s written instructions. 
  
 26.6 This Agreement shall be governed by and construed in accordance with the laws of the State of California. 
  

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above. 
  
 Wells Fargo Institutional Brokerage and Sales WELLS FARGO BANK, NATIONAL ASSOCIATION

  

									
					
	By:	 	 /s/ Kelly Whittle
	 	 	 	By:	 	 /s/ John E. Ray

	 	 	 Kelly Whittle, Operations Manager
	 	 	 	 	 	 John E. Ray, Relationship Manager

  

									
	 Address:
	 	 608 2nd Avenue South
 Minneapolis, MN 55402
	 	 	 	 Address:
	 	 601 Daily Drive, STE #110
 Camarillo, CA 93010

  

			
	 Interlink Electronics, Inc.

		
	By:	 	 /s/ Paul D. Meyer

			
		
	 Title:
	 	 Chief Financial Officer

			
		
	 Address:
	 	 546 Flynn Rd
 Camarillo, CA 93012-8027

  

 ADDENDUM TO SECURITY AGREEMENT: SECURITIES ACCOUNT 
  
 THIS ADDENDUM is attached to and made a part of that certain Security Agreement: Securities
Account executed by INTERLINK ELECTRONICS, INC. (“Debtor”) in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”), dated as of May 1, 2005 (the “Agreement”). 
  
 The following provisions are hereby incorporated into the Agreement: 
  
 1. Securities Account Activity. So long as no Event of Default exists, Debtor, or any
party authorized by Debtor to act with respect to the Securities Account, may (a) receive payments of interest and/or cash dividends earned on financial assets maintained in the Securities Account, and (b) trade financial assets maintained in the
Securities Account. Without Bank’s prior written consent, except as permitted by the preceding sentence, neither Debtor nor any party other than Bank may withdraw or receive any distribution of any Collateral from the Securities Account. The
Collateral Value of the Securities Account shall at all times be equal to or greater than one hundred percent (100%) of the outstanding principal balance of the Indebtedness, including the amount of all issued and outstanding letters of credit if
any, secured hereby. In the event that the Collateral Value, for any reason and at any time, is less than the required amount, Debtor shall promptly make a principal reduction on the Indebtedness or deposit additional assets of a nature satisfactory
to Bank into the Securities Account, in either case in amounts or with values sufficient to achieve the required Collateral Value. 
  
 2. “Collateral Value” means the percentage set forth below of the lower of the face or market value, or the lower of the face or redemption value, as
appropriate, for each type of investment property held in the Securities Account at the time of computation, with such value and the classification of any particular investment property in all instances determined by Bank in its sole discretion, and
excluding from such computation (a) all WF Securities and Collective Investment Funds, (b) any stock with a market value of $10.00 or less, and (c) all investment property from an issuer if Bank determines such issuer to be ineligible. 

 

						
	 Type of Investment Property

	  	Percentage

	 
	 Cash and Cash Equivalents
	  	100	%
		
	 U.S. Government Bills, Notes and U.S. Government
 Sponsored Agency Securities:
	  	 	 
			
	 (a)
	  	with maturities less than or equal to 5 years	  	90	%
			
	 (b)
	  	with maturities greater than 5 years but less than or equal to 10 years	  	85	%
			
	 (c)
	  	with maturities greater than 10 years	  	80	%
		
	 Corporate and Municipal Bonds and Notes:
	  	 	 
			
	 (a)
	  	rated AAA/Aaa, AA/Aa or SP-1 by a nationally recognized rating agency with maturities less than or equal to 5 years	  	85	%
			
	 (b)
	  	rated AAA/Aaa, AA/Aa or SP-1 by a nationally recognized rating agency with maturities greater than 5 years but less than or equal to 10 years	  	80	%
			
	 (c)
	  	rated AAA/Aaa, AA/Aa or SP-1 by a nationally recognized rating agency with maturities greater than 10 years	  	75	%
			
	 (d)
	  	rated A, Baa, BBB or SP-2 by a nationally recognized rating agency with maturities less than or equal to 5 years	  	80	%

  

						
	 (e)
	  	rated A, Baa, BBB or SP-2 by a nationally recognized rating agency with maturities greater than 5 years but less than or equal to 10 years	  	75	%
			
	 (f)
	  	rated A, Baa, BBB or SP-2 by a nationally recognized rating agency with maturities greater than 10 years	  	70	%
		
	 Commercial Paper:
	  	 	 
			
	 (a)
	  	rated Al or P1 by a nationally recognized rating agency	  	80	%
			
	 (b)
	  	rated A2 or P2 by a nationally recognized rating agency	  	70	%
		
	 Common and Preferred Stock:
	  	 	 
			
	 (a)
	  	traded on the New York Stock Exchange	  	75	%
			
	 (b)
	  	traded on NASDAQ, the American Stock Exchange or a regional exchange:	  	 	 
			
	 	  	 (i)     with a market capitalization greater than $7.5B and
	  	 	 
			
	 	  	 ** rated A+, A or A- by a nationally recognized rating agency
	  	75	%
	 	  	 ** rated B+ by a nationally recognized rating agency
	  	60	%
	 	  	 ** rated B, B- or C by a nationally recognized rating agency
	  	50	%
			
	 	  	 (ii)    with a market capitalization greater than $1B but less than or equal to $7.5B and
	  	 	 
			
	 	  	 ** rated A+, A or A- by a nationally recognized rating agency
	  	60	%
	 	  	 ** rated B+ by a nationally recognized rating agency
	  	50	%
	 	  	 ** rated B, B- or C by a nationally recognized rating agency
	  	40	%
			
	 	  	 (iii)  with a market capitalization greater than or equal to $500MM but less than $1B and
	  	 	 
			
	 	  	 ** rated A+, A or A- by a nationally recognized rating agency
	  	50	%
	 	  	 ** rated B+ by a nationally recognized rating agency
	  	40	%
	 	  	 ** rated B, B- or C by a nationally recognized rating agency
	  	30	%
		
	 Mutual Funds:
	  	 	 
			
	 (a)
	  	Listed Money Market	  	95	%
			
	 (b)
	  	Short Term Taxable or Tax Exempt Bonds	  	90	%
			
	 (c)
	  	Intermediate Term Taxable or Tax Exempt Bonds	  	85	%
			
	 (d)
	  	General Taxable Bonds	  	80	%
			
	 (e)
	  	Municipal Bonds, Single State Bonds or Long Term Corporate Taxable Bonds	  	75	%

  

						
	 (f)
	  	Balanced Stock and Bond Funds (includes flexible portfolio)	  	75	%
			
	 (g)
	  	Domestic Large Cap Stock	  	70	%
			
	 (h)
	  	Domestic Equity Income Stock	  	70	%
			
	 (i)
	  	Domestic Mortgage Taxable Bonds	  	70	%
			
	 (j)
	  	Multi Cap Growth, Value and Core Stock	  	60	%
			
	 (k)
	  	Mid Cap Growth, Value and Core Stock	  	60	%
			
	 (l)
	  	Small Cap Growth, Value and Core Stock	  	50	%
			
	 (m)
	  	Specialty Equity Stock	  	50	%
			
	 (n)
	  	Sector, International, High Yield Taxable and Tax Exempt Stocks and Bonds	  	50	%
			
	 (o)
	  	Listed NASDAQ Mutual Funds	  	50	%

  
 3. Exclusion from Collateral.
Notwithstanding anything herein to the contrary, the terms “Collateral” and “Proceeds” do not include, and Bank disclaims a security interest in all WF Securities and Collective Investment Funds now or hereafter maintained in the
Securities Account. 
  
 4. “Collective Investment Funds” means
collective investment funds as described in 12 CFR 9.18 and includes, without limitation, common trust funds maintained by Bank for the exclusive use of its fiduciary clients. 
  
 5. “WF Securities” means stock, securities or obligations of Wells Fargo & Company or of any affiliate thereof (as the term
affiliate is defined in Section 23A of the Federal Reserve Act (12 USC 371(c), as amended from time to time). 
  
 IN WITNESS WHEREOF, this Addendum has been executed as of the same date as the Agreement. 
  

									
	 INTERLINK ELECTRONICS, INC.
	 	 	 	 WELLS FARGO BANK,
 NATIONAL ASSOCIATION

					
	 By:
	 	 /s/ Paul D. Meyer
	 	 	 	 By:
	 	 /s/ John E. Ray

	 	 	 	 	 	 	 	 	 John E. Ray

	 Title:
	 	 Chief Financial Officer
	 	 	 	 	 	 Vice President

  

 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM 
 Statement of Purpose for an Extension of Credit Secured By Margin Stock 
  
 (Federal Reserve Form U-1) 
  
 Wells Fargo Bank, National Association 
 Name of Bank 
  
 This report is required by law (15 U.S.C.
§§78g and 78w; 12 CFR 221). 
  
 The Federal Reserve may not conduct or
sponsor, and an organization (or a person) is not required to respond to, a collection of information unless it displays a currently valid OMB control number. 
  

Public reporting burden for this collection of information is estimated to average 10 minutes per response, including the time to gather and maintain in the required
form and to review instructions and complete the information collection. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to: Secretary, Board of
Governors of the Federal Reserve System, 20th and C Streets, N. W., Washington, DC 20551; and to the Office of Management and Budget, Paperwork Reduction Project (7100-0011), Washington, DC 20503. 
  
 INSTRUCTIONS 
  

	1.	This form must be completed when a bank extends credit in excess of $100,000.00 secured directly or indirectly, in whole or in part, by any margin stock. 

 

	2.	The term “margin stock” is defined in Regulation U (12 CFR 221) and includes, principally: (1) stocks that are registered on a national securities exchange; (2) debit
securities (bonds) that are convertible into margin stocks; (3) any over-the-counter security designated as qualified for trading in the National Market System under a designation plan approved by the Securities and Exchange Commission (NMS
security); and (4) shares of most mutual funds, unless 95 per cent of the assets of the fund are continuously invested in U.S. government, agency, state, or municipal obligations 

  

	3.	Please print or type (if space is inadequate, attach separate sheet.) 

  
 PART I. To be completed by borrower(s). 
  

	1.	What is the amount of the credit being extended? $ 3,000,000.00 

  

	2.	Will any part of this credit be used to purchase or carry margin stock?  ̈
Yes  x No 

  

 If the answer is “no”, describe the specific purpose of the credit. To finance Borrower’s working capital
requirements. 
  
 I (We) have read this form and certify that to the best of my
(our) knowledge and belief the information given is true, accurate, and compete, and that the margin stock and any other securities collateralizing this credit are authentic, genuine, unaltered, and not stolen, forged, or counterfeit. 
  

													
	 Signed: Interlink Electronics, Inc.
	 	 	 	 Signed:

							
	 	 	 	 	May 1, 2005	 	 	 	 	 	 	 	 
	 By:
	 	 Paul D. Meyer
	 	Date	 	 	 	 	 	 Borrower’s signature
	 	Date
							
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Title:	 	 Chief Financial Officer
	 	 	 	 	 	 	 	 Print or type name
	 	Date
							
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 Borrower’s signature
	 	Date	 	 	 	 	 	 Borrower’s signature
	 	Date
							
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 Print or type name
	 	 	 	 	 	 	 	 Print or type name
	 	 

  
 This form should not
be signed if blank. 
  
 A borrower who falsely certifies the purpose of a
credit on this form or otherwise willfully or intentionally evades the provisions of Regulation U will also violate Federal Reserve Regulation X, “Borrowers of Securities Credit.” 
  

 FEDERAL RESERVE FORM U-1 
 (Continued) 
  
 Loan No.3792917406 
  
 PART II. To be completed by bank only if the purpose of the credit is to purchase or carry
margin stock ( Part I (2) answered “yes”). 
  

	1.	List the margin stock securing this credit; do not include debt securities convertible into margin stock. The maximum loan value of margin stock is 50 per cent of its current market
value under the current supplement to Regulation U. 

  

									
	No. of
Shares

	  	Issue

	  	 Market Price
 per share

	  	 Date and source
 of valuation
 (See note below)

	  	 Total Market
 value per issue

	 	  	 	  	 	  	 	  	 

  

	2.	List the debt securities convertible into margin stock securing this credit. The maximum loan value of such debt securities is 50 per cent of the current market value under the
current Supplement to Regulation U. 

  

									
	Principal
amount

	  	Issue

	  	Market
Price

	  	Date and source
of valuation
(See note below)

	  	Total Market
value per issue

	 	  	 	  	 	  	 	  	 

  

	3.	List other collateral including nonmargin stock securing this credit. 

  

							
	 Describe briefly

	  	Market Price

	  	Date and source
of valuation
(See note below)

	  	Good faith
loan value

	 	  	 	  	 	  	 

  
 Note: Bank need not complete
‘Date and source of valuation’ if the market value was obtained from regularly published information in a journal of general circulation or an automated quotation system. 
  

 PART III. To be signed by a bank officer in all instances. 
  
 I am a duly authorized representative of the bank and understand that this credit secured by margin stock may be subject to the credit
restrictions of Regulation U. I have read this form and any attachments, and I have accepted the customer’s statement in Part I in good faith as required by Regulation U*, and I certify that to the best of my knowledge and belief, all the
information given is true, accurate, and complete. I also certify that if any securities that directly secure the credit are not or will not be registered in the name of the borrower or its nominee, I have or will cause to have examined the written
consent of the registered owner to pledge such securities. I further certify that any securities that have been or will be physically delivered to the bank in connection with this credit have been or will be examined, that all validation procedures
required by bank policy and the Securities Exchange Act of 1934 (section 17(f), as amended) have been or will be performed, and that I am satisfied to the best of my knowledge and belief that such securities are genuine and not stolen or forged and
their faces have not been altered. 
  

					
	 	 	 	 	 Signed:

			
	 May 1, 2005
	 	 	 	 /s/ John E. Ray

	 Date
	 	 	 	 Bank officer’s signature

			
	 Vice President
	 	 	 	 John E. Ray

	 Title
	 	 	 	 Print or type name

  

	*	To accept the customer’s statement in good faith, the officer of the bank must be alert to the circumstances surrounding the credit and, if in possession of any information
that would cause a prudent person not to accept the statement without inquiry, most have investigated and be satisfied that the statement is truthful. Among the facts which would require such investigation are receipt of the statement through the
mail or from a third party. 

  
 This form must be
retained by the lender for three years after the credit is extinguished.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00084-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00084-of-00352.parquet"}]]