Document:

Amended and Restated Equipment Loan and Security Agreement No. 24-01110

 Exhibit 10.39 
 AMENDED AND RESTATED EQUIPMENT LOAN AND SECURITY AGREEMENT NO. 24-01110 
 This Amended and Restated Equipment Loan
and Security Agreement No. 24-01110 (the “Loan Agreement”), is made as of November 12, 2003 by and between HELLER FINANCIAL LEASING, INC., (“Lender”), a Delaware corporation with its principal place of business
at 500 West Monroe, Chicago, Illinois 60661 and Alien Technology Corporation (“Borrower”), a California corporation, with its principal place of business at 18220 Butterfield Boulevard, Morgan Hill, CA 95037. This Loan Agreement
amends and restates that certain Equipment Loan and Security Agreement No. 24-01110 dated December 11, 2002 (the “Prior Loan Agreement”), and replaces said Prior Loan Agreement as if originally entered into. Each advance made by
Lender to Borrower evidenced by promissory notes entered under the Prior Loan Agreement will be deemed made and entered under this Loan Agreement, provided however that the Commencement Date, Loan Interest Rate, Terminal Payment and the Term of
financing of each such promissory notes shall not be amended or restated hereby. 
 Now therefore, in consideration of the promises set forth herein, Lender
and Borrower agree upon the upon the following terms and conditions: 
  

	1.	General Definitions 

 The following words, terms and /or
phrases shall have the meanings set forth thereafter and such meanings shall be applicable to the singular and plural form thereof giving effect to the numerical difference: 
 A. “Account” means any “account,” as such term is defined in the UCC, now owned or hereafter acquired by Borrower or in which
Borrower now holds or hereafter acquires any interest and, in any event, shall include all accounts receivable, book debts, rights to payment, and other forms of obligations now owned or hereafter received or acquired by or belonging or owing to
Borrower (including under any trade name, style or division thereof), whether or not arising out of goods or software sold or services rendered by Borrower or from any other transaction (including any such obligation that may be characterized as an
account or contract right under the UCC), and all of Borrower’s rights in, to and under all purchase orders or receipts now owned or hereafter acquired by it for goods or services, and all of Borrower’s rights to any goods represented by
any of the foregoing (including unpaid seller’s rights of rescission, replevin, reclamation and stoppage in transit and rights to returned, reclaimed or repossessed goods), and all monies due or to become due to Borrower under all purchase
orders and contracts for the sale of goods or the performance of services or both by Borrower or in connection with any other transaction (whether or not yet earned by performance on the part of Borrower), now in existence or hereafter occurring,
including the right to receive the proceeds of said purchase orders and contracts, and all collateral security and guarantees of any kind given by any Person with respect to any of the foregoing. 
 B. “Borrower’s Liabilities” means all obligations and liabilities of Borrower to Lender (including without limitation all debts, claims,
and indebtedness), excluding the Transamerica Loans (as hereinafter defined), whether primary, secondary, direct, contingent, fixed or otherwise, heretofore, now and/or from time to time hereafter owing, due or payable, however evidenced, created,
incurred, acquired or owing and however arising, whether under this Loan Agreement and/or promissory note issued pursuant hereto or the “Other Agreements” (hereinafter defined), or by operation of law or otherwise. 
 C. “Cash” means all cash, money, currency, and liquid funds, wherever held, in which Borrower now or hereafter acquires any right, title, or
interest. 
 D. “Charges” means all national, federal, state, county, city, municipal and/or other governmental taxes, levies,
assessments, charges, liens, claims or encumbrances upon and/or relating to the Collateral (hereinafter defined), Borrower’s Liabilities, Borrower’s business, Borrower’s ownership and/or use of any of its assets, and/or
Borrower’s income and/or gross receipts. 
 E. “Chattel Paper” means any “chattel paper,” as such term is defined in
the UCC, now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest. 
 F. “Copyright
License” means any written agreement granting any right to use any Copyright or 

  

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Copyright registration, now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest. 
 G. “Copyrights” means all of the following property, now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter
acquires any interest: (i) all copyrights, whether registered or unregistered, held pursuant to the laws of the United States, any State thereof, or of any other country; (ii) all registrations, applications and recordings in the United
States Copyright Office or in any similar office or agency of the United States, of any State thereof, or of any other country; (iii) all continuations, renewals or extensions thereof; and (iv) all registrations to be issued under any
pending applications. 
 H. “Deposit Accounts” means any “deposit accounts,” as such term is defined in the UCC, and
includes any checking account, savings account, or certificate of deposit now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest. 
 I. “Documents” means any “documents,” as such term is defined in the UCC, now owned or hereafter acquired by Borrower or in which
Borrower now holds or hereafter acquires any interest. 
 J. “Equipment” shall be as defined in the UCC, including but not limited
to machinery, assembly lines, and related production equipment as well as computers and peripherals, networking equipment, switching and backbone equipment, servers and routers and other hardware including disk drives and laser printers, office
furniture, fixtures and office equipment, test and other equipment, and software, and all accessions, additions, attachments, accessories and improvements thereof and all replacements and/or substitutions therefore and all proceeds and products
thereof. 
 K. “Equipment Cost” means (i) for Equipment acquired within less than 90 days of the invoice date, the
manufacturer’s net invoice price, and (ii) for Equipment acquired within 90 days or more from the invoice date (and if deemed eligible for funding by Lender), the depreciated value of the Equipment based on a 3 year straight line
depreciation method as applied to the manufacturer’s net invoice price at the invoice date and a zero residual value at three years subsequent. 
 L. “Financials” means those financial statements described in Article 7 hereof. 
 M.
“Fixtures” means any “fixtures,” as such term is defined in the UCC, together with all right, title and interest of Borrower in and to all extensions, improvements, betterments, accessions, renewals, substitutes, and replacements
of, and all additions and appurtenances to any of the foregoing property, and all conversions of the security constituted thereby, immediately upon any acquisition or release thereof or any such conversion, as the case may be, now owned or hereafter
acquired by Borrower or in which Borrower now holds or hereafter acquires any interest. 
 N. “General Intangibles” means any
“general intangibles,” as such term is defined in the UCC, and, in any event, shall include all right, title and interest which Borrower may now or hereafter have in or under any rights to payment; payment intangibles; software;
proprietary or confidential information; business records and materials; customer lists; interests in partnerships, joint ventures, business associations, corporations, and limited liability companies; permits; claims in or under insurance policies
(including unearned premiums and retrospective premium adjustments); and rights to receive tax refunds and other payments and rights of indemnification now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires
any interest. 
 O. “Goods” means any “goods,” as such term is defined in the UCC, now owned or hereafter acquired by
Borrower or in which Borrower now holds or hereafter acquires any interest. 
 P. “Instruments” means any “instrument,”
as such term is defined in the UCC, now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest. 
 Q. “Intellectual Property” means all Copyrights; Trademarks; Patents; Licenses; source codes developed by Borrower; trade secrets; inventions (whether or not patented or patentable); technical information, procedures, processes,
designs, knowledge, and know how; data bases; models; drawings; skill, expertise, and experience; websites, domain names, and URL’s; and applications therefor and reissues, extensions, or renewals thereof; and goodwill associated with any of
the foregoing; together with rights to sue for past, present and future infringement of Intellectual Property and the goodwill associated therewith. 
 R. “Inventory” means any “inventory,” as such term is defined in the UCC, now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest, and, in any
event, shall include all Goods and personal property that are held by or on behalf of Borrower for sale or lease or are furnished 

  

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or are to be furnished under a contract of service, or that constitute raw materials, work in process or materials used or consumed or to be used or consumed
in Borrower’s business, or the processing, packaging, promotion, delivery or shipping of the same, and all finished goods, whether or not the same is in transit or in the constructive, actual or exclusive possession of Borrower or is held by
others for Borrower’s account, including all property covered by purchase orders and contracts with suppliers and all Goods billed and held by suppliers and all such property that may be in the possession or custody of any carriers, forwarding
agents, truckers, warehousemen, vendors, selling agents or other Persons. 
 S. “Investment Property” means all “investment
property,” as such term is defined in the UCC, and includes any certificated security, uncertificated security, money market funds, bonds, mutual funds, and U.S. Treasury bills or notes, now owned or hereafter acquired by Borrower or in which
Borrower now holds or hereafter acquires any interest. 
 T. “Letter of Credit Rights” means any “letter of credit
rights,” as such term is defined in the UCC, now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest, including any right to payment or performance under any letter of credit. 
 U. “License” means any Copyright License, Patent License, Trademark License or other license of rights or interests now held or hereafter
acquired by Borrower or in which Borrower now holds or hereafter acquires any interest and any renewals or extensions thereof. 
 V.
“Other Agreements” means all agreements, instruments and documents, including, without limitation, any guaranties, letters of credit, mortgages, deeds of trust, pledges, powers of attorney, consents, assignments, contracts, notices,
security agreements, leases, warrants, account pledge agreements, financing statements and all other written matter heretofore, now and/or from time to time hereafter executed by and/or on behalf and/or for the benefit of Borrower and delivered to
Lender, provided however that certain Master Loan and Security Agreement dated May 8, 2001, as amended by that certain First Amendment dated February 22, 2002, and all proposals, amendments and modifications related thereto (collectively
the “Transamerica Loans”), made by and between Borrower and Transamerica Commercial Finance Corporation shall not be included within the definition of Other Agreements and not considered part of Borrower’s Liabilities or any other
liability, responsibility, debt or obligation owed by Borrower hereunder. 
 W. “Patent License” means any written agreement
granting any right with respect to any invention on which a Patent is in existence or a Patent application is pending, in which agreement Borrower now holds or hereafter acquires any interest. 
 X. “Patents” means all of the following property, now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter
acquires any interest: (a) all letters patent of, or rights corresponding thereto, in the United States or in any other county, all registrations and recordings thereof, and all applications for letters patent of, or rights corresponding
thereto, in the United States or any other country, including registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other
country; (b) all reissues, continuations, continuations-in-part or extensions thereof; (c) all petty patents, divisionals, and patents of addition; and (d) all patents to be issued under any such applications. 
 Y. “Permitted Liens” means: 
  

	 	1.	Any liens which were existing as of December 11, 2002, granted in the ordinary course of Borrower’s business and disclosed to the Lender under Schedule A attached
hereto and made a part hereof, which liens were in relation to specific Goods or Equipment and none of which liens were or are intended to be or constitute a lien in all or substantially all of the assets of the Borrower; 

 

	 	2.	Liens for taxes, fees, assessments or other governmental charges or levies, provided the same have no priority over any of Lender’s security interests and which are either not
delinquent or are being contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves are maintained to the extent required by generally accepted accounting principles; 

 

	 	3.	Liens in favor of customs and revenue authorities arising as a matter of law to secure payments of custom duties in connection with the importation of goods and which are either not
delinquent or are being contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves are maintained to the extent required by generally accepted accounting principles; 

 

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	 	4.	Deposits in the ordinary course of business under worker’s compensation, unemployment insurance, social security and other similar laws, or to secure the performance of bids,
tenders or contracts (other than for the repayment of borrowed money) or to secure indemnity, performance or other similar bonds for the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure
statutory obligations (other than liens arising under ERISA or environmental liens) or surety or appeal bonds, or to secure indemnity, performance or other similar bonds, provided that all of the foregoing do not exceed One Hundred Thousand Dollars
($100,000) in the aggregate at any given time; 

  

	 	5.	Liens not prior to the liens of Lender, arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under this Agreement;

  

	 	6.	Easements, reservations, rights-of-ways, restrictions, minor defects or irregularities in title and other similar charges or encumbrances affecting real property not constituting a
material adverse effect; 

  

	 	7.	Liens of materialmen, mechanics, warehousemen, carriers, artisan’s or other similar Liens arising in the ordinary course of Borrower’s business or by operation of law,
which are not past due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves are maintained to the extent required by generally accepted accounting principles; 

  

	 	8.	Liens incurred in connection with all Loans pursuant to Section 2.1 and Section 2.2 (including any additional financing following Lender’s failure to Exercise its
right of first refusal during the First Refusal Period); 

  

	 	9.	Liens incurred in connection with secured convertible debt incurred pursuant to Section 7.1(e), which Liens shall be subordinated to Lender’s Lien on Collateral hereunder
on terms and conditions reasonably acceptable to Lender; 

  

	 	10.	Liens on personal property located in North Dakota (or other state determined by Borrower as the manufacturing facility state subject to consent of Lender, such consent not to be unreasonably withheld, hereinafter the “Manufacturing Facility State”), incurred in connection
the financing of a manufacturing facility in the Manufacturing Facility State, with one or more notes or leases entered into by Borrower in the maximum aggregate amount of $11,500,000 under a financing program offered by the Manufacturing Facility
State or municipalities therein. 

  

	 	11.	Liens on accounts receivables and proceeds thereof incurred specifically in connection with an accounts receivable financing line of credit. 

  

	 	12.	Liens incurred in connection with the extension, renewal or refinancing of the indebtedness secured by Liens of the type described in clauses (1) through (11) above,
provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and shall not secure an amount in excess of the amount owing at the time of such extension, renewal or refinancing.

 Z. “Person” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated
organization, association, corporation, institution, entity, party or government (whether national, federal, state, county, city, municipal or otherwise, including without limitation, any instrumentality, division, agency, body or department
thereof). 
 AA. “Proceeds” means “proceeds,” as such term is defined in the UCC. 
 BB. “Receivables” means (i) all of Borrower’s Accounts, Instruments, Documents, Chattel Paper, Supporting Obligations, letters of
credit, proceeds of any letter of credit, and Letter of Credit Rights, and (ii) all customer lists, software, and business records related thereto. 
 CC. “Soft Costs” means taxes, freight and installation costs associated with the purchase, shipment and installation of Equipment, provided that Soft Costs shall not include the purchase of operating
software so long as such software is an integral part of the Equipment to be specifically financed hereunder and the aggregate amount of such software to be so purchased shall not exceed $300,000. 
 DD. “Supporting Obligations” means any “supporting obligations,” as such term is defined in the UCC, now owned or hereafter acquired
by Borrower or in which Borrower now holds or hereafter acquires any interest. 
 EE. “Takedown Period” shall mean any time during
the period from December 11, 2002 to February 7, 2004, 

  

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or during any extension of such period by Lender (which extension shall not incur additional cost to Borrower), during which no material adverse change in
the financial condition of Borrower has occurred. 
 FF. “Terminal Payment” shall mean any payment requirement designated as a
Terminal Payment on any note, such payment being equal to: 
  

	 	(i)	ten percent (10%) of the principal amount of each promissory note funded by Lender to Borrower under the Prior Loan Agreement; or 

  

	 	(ii)	twelve and one-half percent (12.5%) of the principal amount of each promissory note funded by Lender to Borrower beginning on and after November 12, 2003.

 GG. “Trademark License” means any written agreement granting any right to use any Trademark or Trademark
registration, now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest. 
 HH.
“Trademarks” means all of the following property, now owned or hereafter acquired by Borrower or in which Borrower now holds or hereafter acquires any interest: (a) all trademarks, tradenames, corporate names, business names, trade
styles, service marks, logos, other source or business identifiers, prints and labels on which any of the foregoing have appeared or appear, and designs of like nature, now existing or hereafter adopted or acquired, all registrations and recordings
thereof, and any applications in connection therewith, including registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, and (b) all reissues, extensions or renewals thereof. 
 II. “UCC” shall mean
the Uniform Commercial Code as in effect from time to time in the State of Illinois, provided that if by reason of mandatory provisions of law, the perfection, the effect of perfection or non-perfection or the priority of the security interest
granted hereunder in any Collateral (as hereinafter defined) or the availability of any remedy hereunder is governed by the Uniform Commercial Code as in effect on or after the date hereof in other jurisdiction(s), then “UCC” means the
Uniform Commercial Code as in effect on or after the date hereof in such other jurisdiction(s) for the purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection, or priority or availability of such remedy.

  

	2.	The Loan 

 2.1 Equipment Loan. During the Takedown
Period Lender shall loan to Borrower pursuant to the terms and conditions hereof, those amount(s) listed on one or more Funding Requests submitted to Lender in such form and substance acceptable to the Lender, setting forth a request for funding and
attaching thereto a “Schedule B” describing in detail that portion of the Borrower’s goods, Soft Costs and Equipment against which an advance is to be made hereunder; provided, Soft Costs shall comprise no more than 15% of any
advance. Advances shall be made for 100% of Equipment Cost, provided no Equipment with an Equipment Cost of less than $1,000 shall be required to be financed by Lender, provided, further, purchases of operating system software shall be
reviewed for loan eligibility at a loan value that is mutually acceptable. Such Funding Requests shall be no more than once per calendar month, for a minimum amount to be advanced of (a) $100,000 prior to November 12, 2003, and
(b) $250,000 on and after November 12, 2003. Except as otherwise provided herein, the aggregate amount of the advances made hereunder shall not exceed Seven Million Dollars ($7,000,000). This is not a revolving line of credit and Borrower
may not repay and re-borrow the amounts advanced or to be advanced hereunder. 
 2.2 Syndication Rights. During the Takedown Period, Lender shall use
best efforts to identify and obtain additional sources of funding in the amount of an additional $5,000,000 for Borrower, the terms of which funding shall be acceptable to Borrower. In furtherance thereof, Lender will obtain Borrower’s
authorization prior to approaching potential participants and will require that the prospective participants execute a Non-Disclosure Agreement (“NDA”) that is mutually acceptable to Borrower and such participant. Upon receipt of the
signed NDA and the required Borrower authorization, Lender may disclose to such prospective purchaser(s), but only on a confidential basis, information relative to Borrower or this transaction that has been obtained by Lender. Upon receipt of formal
credit approval from a participant or participants, Lender will assist in documenting all syndications and facilitate the disbursements of funds to Borrower. For any such syndicated amounts advanced to Borrower, Lender shall be entitled to a $50,000
Syndication Fee, which shall be earned and payable pro-rata with each funding of such syndicated amounts. 
  

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 For the period beginning November 12, 2003 and ending December 31, 2005 (the “First Refusal Period”),
Borrower hereby agrees that Lender has and shall provide Lender with a right of first refusal with respect to additional financing of Goods and/or Equipment. During the First Refusal Period, in the event Borrower seeks to obtain additional
financing, Borrower shall provide Lender with no less than thirty (30) days prior written notice, and upon receipt of said notice, Lender shall have fifteen (15) days to deliver Lender’s written acceptance (“Exercise”) of
such commercially reasonable terms to Borrower. In the event Lender does not Exercise its right of first refusal, Borrower may proceed to obtain alternate additional financing on terms substantially similar to those presented to Lender, and any
lien(s) arising therein shall be a Permitted Lien hereunder. Notwithstanding anything to the contrary herein, Borrower may grant a first security interest on Goods and/or Equipment, specific to the Goods and/or Equipment financed thereby and
proceeds thereof, for which Lender has not Exercised Lender’s right of first refusal. 
 2.3 Evidence and Nature of the Loan. Each advance to be
made by Lender to Borrower pursuant to this Loan Agreement will be evidenced by one or more promissory notes or other instruments issued or made by Borrower to Lender to be executed and delivered by Borrower to Lender before or concurrently with
Lender’s disbursement of said advance(s) to or for the account of Borrower. All of Borrower’s Liabilities under this Loan Agreement shall constitute one Loan secured by Lender’s security interest in the Collateral and by all other
security interests, liens, claims and encumbrances now and/or from time to time hereafter granted by Borrower to Lender, whether hereunder or under the Other Agreements. 
 2.4 Use of Proceeds. Borrower warrants and represents to Lender that Borrower shall use the proceeds of the Loan made by Lender to Borrower pursuant to this Loan Agreement and any advances made pursuant to the
Other Agreements solely for legal and proper corporate purposes (duly authorized by its Board of Directors) and consistent with all applicable laws and statutes. 
 2.5 Direction to Remit. Borrower hereby authorizes and directs Lender to disburse, for and on behalf of Borrower and for Borrower’s account, the proceeds of the Loan made by Lender to Borrower pursuant to this Loan Agreement to
such Person or Persons as a Chief Executive Officer or Chief Financial Officer of Borrower shall direct, whether in writing or orally. 
 2.6 Conditions
Precedent to All Loans. The following conditions precedent must be met before any advance is made hereunder: (a) Payment of all fees required under the Loan Agreement or Other Agreements; (b) Receipt by Lender of satisfactory release
documents from any and all conflicting secured creditors as reasonably required by Lender; (c) Receipt by Lender of appropriate filings and other means of first perfected security position on the Collateral, (subject to Permitted Liens);
(d) Receipt by Lender of adequate proof of free and clear ownership of the Equipment, including but not limited to paid in full invoices and cancelled checks or other means of payment for said invoices; (e) Execution by Borrower and
acceptable financial institution(s) of any required account pledge agreements for the benefit of Lender; (f) No material adverse change in financial condition, management and/or business prospects of the Borrower; and (g) Such other
conditions precedent that Lender may reasonably impose from time to time. 
  

	3.	Interest and Repayment 

 3.1 Interest. The Loan made
pursuant to this Agreement shall bear interest payable monthly, calculated on a 360 day year comprised of twelve (12) thirty day months at a per annum rate equal to the Loan Interest Rate specified in the related Promissory Note (the
“Note”). The “Commencement Date” of each Note will occur at the election of Lender, either on the fifteenth day of the same month as, or on the first day of the calendar month following Borrower’s funding request. The Loan
Interest Rate on any Note which has a funding date on or after November 12, 2003 shall be as follows: 
 a per annum interest rate
equal to the greater of (a) 7.25% or (b) the sum of (x) four-year Treasury Notes at time of documentation of the Note plus (y) 371 basis points. 
 If the note(s) so provide, the interest thereunder may be precomputed for the period ending when payments 

  

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thereunder are due and on the assumption that all payments will be made on their respective due dates. Payments due under any note and not made by their
scheduled due date due for a period in excess of five (5) business days after their due date shall be overdue and shall be subject to a service charge in an amount equal to two percent (2%) per month applied to the amount of the overdue
payments from the date due until paid, but not more than the maximum rate permitted by law, whichever is less. 
 3.2 Repayment. Borrower’s
Liabilities under this Loan Agreement shall be evidenced by notes or other instruments issued and/or made by Borrower to Lender specifically containing provisions respecting the repayment of principal, interest, and any other amounts therein
specified. Any and all costs, fees and expenses payable pursuant to this Loan Agreement or any of the Other Agreements shall be payable by Borrower to Lender or to such other person or persons designated by Lender, on demand. All payments to Lender
shall be payable at Lender’s principal place of business specified at the beginning of this Loan Agreement or at such other place or places as Lender may designate in writing to Borrower. All payments to Persons other than Lender shall be
payable at such place or places as Lender may designate in writing to Borrower. 
 3.3 Term and Term Adjustment. The Term of financing under this Loan
Agreement shall be as follows: 
  

	 	(i)	For Notes funded under the Prior Loan Agreement, a term of 36 months; and 

  

	 	(ii)	For Notes funded on or after November 12, 2003, the “Initial Term” of each Note shall be for 48 months, and shall be subject to adjustment as of the quarter ending
June 30, 2005 (the “Determination Date”) as follows: In the event Borrower does not achieve at least two of the following three financial covenants as measured on the Determination Date, then the remaining months of the term of each
outstanding Note under this Loan Agreement shall be restated in its entirety as if the Note had a term of 36 months from the its inception (e.g. future monthly payment amounts will be recalculated under each such note, however no additional amounts
shall be due from Borrower as a result of this calculation for sums owing prior to the Determination Date); provided, however that each such restated Note will use the same Terminal Payment percentage (as stated on the original of such Note) and
same economic yield (as the reflected in the economic structure of such Note) and Lender shall provide Borrower with evidence confirming that the same economic yield results from the restated monthly payments therein. In the event that Borrower
satisfies at least two of the three following financial covenants as measured on the Determination Date, then each Note to which the Determination Date evaluation applies shall remain unchanged. The Determination Date shall not apply to any Notes
made or funded by Lender to Borrower prior to November 12, 2003. The financial covenants to be satisfied as of the Determination Date are as follows: 

  

	 	(a)	Borrower’s posted revenues plus documented backlog must be at least 80% of the revenues shown in Borrower’s New Projections for the quarter ending June 30, 2005,
which New Projections are quarterly revenues of twenty four million dollars ($24,000,000) the quarter ended June 30, 2005; 

  

	 	(b)	Borrower’s Cash on Hand must be at least 80% of the ten million dollars ($10,000,000) cash forecast for quarter ended June 30, 2005; and 

  

	 	(c)	Borrower’s Total Liabilities-to-Equity must be less than or equal to 120% of the projected 0.93:1 Total Liabilities-to-Equity ratio for quarter ending June 30, 2005.

 3.4 Application of Payments. Provided that an “Event of Default” (hereinafter defined) does not exist, the application of
payments received by Lender pursuant to this Agreement shall be applied first to any and all late charges, fees and expenses then due and payable; second to interest then due and payable hereunder; third to the principal of the Loan; and finally the
remainder of the payments received shall be applied against the Terminal Payment, if any. From and during the continuance of an Event of Default, Lender shall have the continuing and exclusive right to apply or reverse and reapply any and all such
payments to any portion of Borrower’s Liabilities in accordance with the terms of the applicable documents, subject to one reversal or reapplication per payment absent manifest error, including to any of Borrower’s Liabilities arising
under any of the Other Agreements. Notwithstanding the preceding sentence, if an Event of Default has been waived by Lender, then, with respect to payments received by Lender prior to the date of Lender’s waiver of the Event of Default (the
“Waiver Date”), the period of time during which Lender shall have the continuing and exclusive right to apply or reverse and reapply any and all such payments to any portion of Borrower’s Liabilities in accordance with the terms of
the applicable documents shall expire ninety (90) days after Waiver Date. Solely for the purpose of computing interest earned by Lender, payments received by Lender shall be applied as aforesaid on the business day following receipt by Lender.
Checks or other items of payment received after 2:00 p.m. shall be deemed received the following business day. 
  

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 3.5 Accuracy of Statements. Each statement of account by Lender delivered to Borrower relating to Borrower’s
Liabilities shall be presumed correct and accurate and shall constitute an account stated between Borrower and Lender unless thereafter waived in writing by Lender, in Lender’s reasonable discretion. Any objection to the statement that Borrower
may have must be delivered to Lender, by registered or certified mail, within thirty (30) days after Borrower’s receipt of said statement. 
  

	4.	Term and Prepayment 

 4.1 Term. This Loan Agreement
shall be in effect until the indefeasible payment in full to Lender of all of Borrower’s Liabilities. 
 4.2 Prepayment. Borrower has the right
to prepay its Liabilities under this Agreement in whole but not in part, and only under the following terms and conditions: 
  

	 	(a)	Borrower shall give Lender thirty days’ prior written notice of its intent to prepay its Liabilities; and 

  

	 	(b)	Prepayment shall be in the full amount of principal, earned but unpaid interest accrued to the date of prepayment, any outstanding fees, costs or other reimbursements (including any
indemnities) owing to Lender and the amount of any Terminal Payment if any is so required by the terms of any Note (in the aggregate, the “Prepayment Amount”). 

  

	 	(c)	In addition to the above Prepayment Amount, Borrower shall pay the following premium as follows: For 36-month Notes funded prior to November 12, 2003: 

 

	 	(i)	If the prepayment is made in the first twelve (12) months after the date hereof, a premium of three percent (3%) of the outstanding principal amount of all the notes being
prepaid; 

  

	 	(ii)	If the prepayment is made after the end of the twelfth (12th) month and before the end of the twenty-fourth (24th) month after the date hereof, a premium of two percent
(2%) of the outstanding principal amount of all the notes being prepaid; 

  

	 	(iii)	If the prepayment is made after the end of the twenty-fourth (24th) month and the end of the thirty-sixth (36th) month after the date hereof, a premium of one percent
(1%) of the outstanding principal amount of all the notes being prepaid; 

  

	 	(iv)	If the prepayment is made after the end of the thirty-sixth (36th) month after the date hereof, no premium shall be payable. 

 For 48-month Notes funded on or after November 12, 2003 and such Notes with their terms adjusted to 36 months pursuant to
Section 3.3 following the Determination Date: 
  

	 	(v)	If the prepayment is made in the first twelve (12) months after the date hereof, a premium of four percent (4%) of the outstanding principal amount of all the notes being
prepaid; 

  

	 	(vi)	If the prepayment is made after the end of the twelfth (12th) month and before the end of the twenty-fourth (24th) month after the date hereof, a premium of three percent
(3%) of the outstanding principal amount of all the notes being prepaid; 

  

	 	(vii)	If the prepayment is made after the end of the twenty-fourth (24th) month and the end of the thirty-sixth (36th) month after the date hereof, a premium of two percent
(2%) of the outstanding principal amount of all the notes being prepaid; 

  

	 	(viii)	If the prepayment is made after the end of the thirty-sixth (36th) month and the end of the forty-eighth (48th) month after the date hereof, a premium of one percent
(1%) of the outstanding principal amount of all the notes being prepaid; 

  

	 	(ix)	If the prepayment is made after the end of the forty-eighth (48th) month after the date hereof, no premium shall be payable. 

  

	5.	Collateral and Security 

 5.1 Grant of Security Interest. To further secure to Lender the prompt full and faithful payment of Borrower’s 

  

 8 

 
Liabilities and the prompt, full and complete performance by Borrower of each of its covenants and duties under this Agreement and the Other Agreements,
Borrower grants, subject to Permitted Liens, a valid, first priority continuing security interest in and lien upon all of the following, whether now owned or hereafter acquired and wherever located: 
  

	 	(a)	All Receivables; 

  

	 	(b)	All Equipment; 

  

	 	(c)	All Fixtures; 

  

	 	(d)	All General Intangibles; 

  

	 	(e)	All Inventory; 

  

	 	(f)	All Investment Property; 

  

	 	(g)	All Deposit Accounts; 

  

	 	(h)	All Cash; 

  

	 	(i)	All other Goods and tangible and intangible personal property of Borrower, whether now or hereafter owned or existing, leased, consigned by or to, or acquired by, Borrower and
wherever located; and 

 To the extent not otherwise included, all Proceeds of each of the foregoing and all accessions to, substitutions and
replacements for, and rents, profits and products of each of the foregoing and all attachments, accessories, accessions, replacements, substitutions, additions or improvements to any of the foregoing, wherever located and all products and proceeds
of the foregoing including without limitation proceeds of insurance policies insuring the foregoing and all books and records with respect thereto (all of the foregoing personal property is hereinafter sometimes individually and sometimes
collectively referred to as “Collateral”). Borrower shall make appropriate entries upon its financial statements and its books and records disclosing Lender’s security interest in the Collateral. 
 Notwithstanding anything herein contained or construed to the contrary, Borrower is not granting to Lender, and Lender is not receiving from Borrower, any grant of a
security interest in any of Borrower’s now owned or hereafter acquired intellectual property or Borrower’s rights in software licenses; provided, however, that software, firmware and operating systems that cannot be removed from the
collateral without rendering the collateral inoperable shall be deemed to be part of the “collateral” unless such construction is prohibited by or inconsistent with any relevant license or other agreement respecting such software, firmware
or operating system, and Lender shall have no rights with respect to the intellectual property rights in any of the aforementioned collateral to the extent prohibited by or inconsistent with any such license or other agreement regarding such
intellectual property rights. 
 Except related to Permitted Liens, Borrower hereby further agrees to the following additional negative covenants regarding
the granting of security interests: 
 (x) that Borrower shall not (i) grant a security interest in or pledge its Intellectual Property
to any other Person; 
 (y) that Borrower shall not enter into any agreement with any other Person to the effect that Borrower will not grant
a security interest in or pledge of its Intellectual Property to any other Person; and 
 (z) at no time shall there be more than one hundred
thousand United States dollars (USD 100,000) in gross book value of Borrower assets outside the United States of America (or such other amount as Borrower may request consent of Lender, such consent not to be unreasonably withheld), and all other
Borrower assets must remain at either Borrower’s principal office in Morgan Hill, California or the Manufacturing Facility State. 
 Lender agrees that
in the event that Borrower obtains a line of credit to be secured solely by Borrower’s Accounts, then in that event, Lender will enter into a subordination agreement under such terms and conditions reasonably acceptable to Lender with such
other credit provider in respect of the Borrower’s Accounts. 
 5.2 Further Assurances. Borrower shall execute and/or deliver to Lender, at any
time and from time to time hereafter at the request of Lender, all agreements, instruments, UCC financing statements (or other required perfection instruments), documents and other written matter (hereinafter individually and/or collectively,
referred to as “Additional Documentation”) that Lender reasonably may request, in a form and substance acceptable to Lender, to perfect and maintain Lender’s perfected security interest in the Collateral and to consummate the
transactions contemplated in or by this Loan Agreement and the Other Agreements. For the limited purpose of Lender perfecting its security interest following Borrower’s failure to reasonably comply with its obligations set forth in this
Section 5.2, Borrower, irrevocably, (a) hereby makes, constitutes and appoints Lender (and all Persons designated by Lender for that purpose) as Borrower’s true and lawful attorney (and agent-in-fact) to sign the name of Borrower on
the Additional Documentation and to deliver the Additional Documentation to such Persons as Lender, in its sole and absolute discretion, may elect, (b) authorizes completion and filing of any such Additional Documentation by Lender or its
agents, whether paper or electronic, (c) hereby ratifies and confirms the completion and filing of Additional Documentation by Lender or its agent, paper or electronic, occurring prior to the date hereof, and (d) declares that Borrower has
the present intention to authenticate and process any such Additional Documentation, 

  

 9 

 
whether paper or electronic, and whether or not completed and filed by Lender or its agents before or after the date hereof. 
 5.3 Inspection of Collateral. Lender (by any of its officers, employees and/or agents) shall have the right, at any time or times upon no less than 3 business
days prior written notice (such notice to be required only so long as no Event of Default has occurred and is continuing) during Borrower’s usual business hours, to inspect the Collateral and all related records (and the premises upon which it
is located) and to verify the amount and condition of or any other and all financial records and matter relating to the Collateral; provided however, if no Event of Default has occurred, Lender shall limit such inspections to no more than two per
year. After an Event of Default, all costs, fees and expenses incurred by Lender, or for which Lender has become obligated, in connection with such inspection and/or verification shall be payable by Borrower to Lender. Borrower agrees to use its
best efforts to cause its employees and agents to cooperate with Lender in all inspections. 
 5.4 Disposition of Collateral. All proceeds arising
from the disposition of any Collateral by Borrower shall be delivered to Lender within one Business Day after receipt by Borrower, in their original form, duly endorsed to Lender, to be applied to Borrower’s Liabilities in such order as
specified in Section 3.3 so long as no Event of Default has occurred and is continuing, otherwise, the monies may be applied in such order as Lender shall determine. Borrower agrees that it will not commingle proceeds of Collateral with any of
Borrower’s other funds or property, but will hold such proceeds separate and apart from such other funds and property and in an express trust for Lender. Nothing in this Section limits the restrictions on disposition of Collateral set forth
elsewhere in this Loan Agreement. 
 5.5 Third Party Claims. Lender, in its sole and absolute discretion, without waiving or releasing any obligation,
liability or duty of Borrower under this Loan Agreement or the Other Agreements or any Event of Default, may (but shall be under no obligation) at any time or times hereafter, to pay, acquire and/or accept an assignment of any security interest,
lien, encumbrance or claim asserted by any Person against the Collateral. All sums paid by Lender in respect thereof and all costs, fees and expenses, including reasonable attorneys’ fees, court costs, expenses and other charges relating
thereto incurred by Lender on account thereof shall be payable by Borrower to Lender. 
 5.6 Insurance. Borrower shall at all times throughout the
term of this Agreement and any extension hereof procure and maintain at its own expense the following minimum insurance coverages which shall be provided by insurance carriers with an AM Best rating of A, Class X or as otherwise acceptable to Lender
and with such deductibles and exclusions as approved by Lender: (1) All risk property damage insurance covering the Collateral which shall include but not be limited to fire and extended coverage and where applicable mechanical breakdown and
electrical malfunction, and which shall be written in amount not less than the greater of (x) the outstanding loan balance or (y) the current replacement cost; and, (2) Commercial general liability insurance which may include excess
liability insurance written on occurrence basis with a limit of not less than $3,000,000; and, (3) Workers’ compensation insurance in accordance with statutory limits and employers’ liability coverage which may include excess
liability in an amount not less than $3,000,000. Any insurance carried and maintained in accordance with this Agreement by Borrower shall be endorsed to provide that: (i) Lender shall be additional insured and loss payee with respect to the
property insurance described in subsection (1) of the prior paragraph (and such insurance shall provide that the interest of Lender shall not be invalidated by any act or neglect of Lender, Borrower or other person), and Lender shall be an
additional insured with respect to the liability insurance described in subsection (2) of the prior paragraph; and, (ii) The insurers thereunder waive all rights of subrogation against Lender, any right of setoff and counterclaim and any
other right to deduction due to outstanding premiums, whether by attachment or otherwise; and, (iii) Such insurance shall be primary without right of contribution of any other insurance carried by or on behalf of Lender; and, (iv) Inasmuch
as such policies are written to cover more than one insured, all terms, conditions, insuring agreements and endorsements (other than the limits of liability) shall operate in the same manner as if there were a separate policy covering each insured;
and, (v) If such insurance is canceled for any reason whatsoever, including nonpayment of premium, or any substantial change is made in the coverage that affects the interests of Lender, such cancellation or change shall not be effective as to
Lender until thirty (30) days after receipt by Lender of written notice sent by registered mail from such insurer of such cancellation or change; providing, however, that such thirty (30) day period shall be reduced to ten (10) days
in the case where cancellation results from the nonpayment of premiums. Borrower, irrevocably, appoints Lender as Borrower’s true and lawful attorney (and agent-in fact) for the purpose of making, settling and adjusting claims under such
policies, endorsing the name of Borrower on any check, draft, instrument or other item of payment for the proceeds of such policies and for 

  

 10 

 
making all determinations and decisions with respect to such policies, and such appointment will be immediately effective upon the occurrence of an Event of
Default hereunder. 
 On or before the funding by Lender hereunder of each Funding Request, and at each policy anniversary date, Borrower shall arrange to
furnish Lender with appropriate Certificates of Insurance. Such Certificates of Insurance shall be executed by each insurer or by an authorized representative of each insurer, and shall identify insurers, the type of insurance, the insurance limits
and the policy term and shall specifically list the special endorsements (i) through (v) above. If the Borrower fails to provide the appropriate Certificates of Insurance, whether originally or at each policy anniversary date, then
Borrower agrees to pay Lender a non-compliance fee equal to $1,000 each month until such Certificates of Insurance are provided to Lender. Such fee does not procure or constitute insurance coverage for Borrower. 
 In case of the failure to procure or maintain such insurance, Lender shall have the right, but not the obligation, to obtain such insurance and any premium paid by
Lender shall be immediately due and payable by Borrower to Lender. The maintenance of any policy or policies of insurance pursuant to this Section shall not limit any obligation or liability of Borrower pursuant to any other Sections or provisions
of this Agreement. 
 5.7 Charges on Collateral. Borrower shall not permit any Charges to arise, or to remain, except for those which constitute
Permitted Liens, and Borrower shall pay promptly when due, and discharge, all Charges. In the event Borrower, at any time or times hereafter, shall fail to pay the Charges or to obtain such discharges, Borrower shall so advise Lender thereof in
writing. Lender may, without waiving or releasing any obligation or liability of Borrower hereunder or Event of Default, in its sole and absolute discretion, at any time or times thereafter, make such payment, or any part thereof, or obtain such
discharge and take any other action with respect thereto which Lender deems advisable. All sums so paid by Lender and any expenses, including reasonable attorneys’ fees, court costs, expenses and other charges relating thereto, shall be payable
by Borrower to Lender upon demand. 
 5.8 Equipment Ownership and Maintenance. Borrower, immediately on demand by Lender, shall deliver to Lender any
and all evidence of ownership of, including without limitation, certificates of title to and applications for title to, any of the Equipment. Borrower shall keep and maintain the Equipment in good operating condition and repair and shall make all
necessary replacements thereof and renewals thereto so that the value and operating efficiency thereof shall at all times be maintained and preserved. Borrower shall use commercially reasonable efforts to not permit any such items to become a
fixture to real estate or accession to other personal property. 
  

	6.	Warranties and Representations 

  

	6.1	Borrower Representations. Borrower warrants and represents to Lender, as of the date hereof and as of the date of any Loan made hereunder, that: 

  

	(a)	Borrower is and at all times hereafter shall be a Person having that legal name and organizational structure as set forth above, duly organized and existing and in good standing
under the laws of the state of its organization as set forth above and qualified or licensed to do business in all other states in which the laws require Borrower to be so qualified and/or licensed, except where the failure to be qualified or
licensed could not reasonably be expected to have a material adverse effect; 

  

	(b)	Borrower is duly authorized and empowered to enter into, execute, deliver and perform this Loan Agreement and the Other Agreements and the execution, delivery and/or performance by
Borrower of this Loan Agreement and the Other Agreements shall not, by the lapse of time, the giving of notice or otherwise, constitute a violation of any applicable law or a breach of any provision contained in Borrower’s organizational
documents or contained in any material agreement, instrument or document to which Borrower is now or hereafter a party or by which it is or may become bound, except where such violation or breach could not reasonably be expected to have a material
adverse effect; 

  

	(c)	Except as disclosed to Lender in writing, there are no actions or proceedings which are pending, or to its knowledge threatened, against Borrower, nor is Borrower a party to any
contract or agreement or subject to any charge, restriction, judgment, decree or order, which might result in any material and adverse change in its financial condition or materially affect its assets or the Collateral, nor is Borrower in default
with respect to any material indenture, security agreement, mortgage, deed or other similar agreement relating to the borrowing of monies to which it is a party or by which it is bound; 

  

 11 

	(d)	To Borrower’s knowledge, Borrower has and is in good standing with respect to all licenses, patents, copyrights, trademarks, and trade names and Borrower has all governmental
permits, certificates, consents and franchises necessary to continue to conduct its business as previously conducted by it and to own or lease and operate its properties as now owned or leased by it, except where the failure to have such permits,
certificates, consents and franchises could not reasonably be expected to have a material adverse effect; 

  

	(e)	The Financials fairly and accurately present in all material respects the assets, liabilities and financial conditions and results of operations of Borrower as of the date when the
Financials were prepared and have been prepared in accordance with generally accepted accounting principles, consistently applied, provided that monthly financial statements are subject to year-end adjustments and the absence of footnotes and there
has been no material adverse change in the assets, liabilities or financial condition of Borrower since the date of the Financials. 

  

	(f)	As to the Equipment and Collateral, (i) Borrower has and at all times hereafter shall have good, indefeasible and merchantable title to and ownership of the Collateral free and
clear of all liens, claims, security interests and encumbrances except Permitted Liens; (ii) Borrower has and at all times hereafter shall have good, indefeasible and merchantable title to and ownership of the Equipment described and/or listed
on any certificate or schedule relating to Equipment and delivered to Lender, free and clear of all liens, claims, security interests and encumbrances except under subsections 2, 3 and 7 of the definition of Permitted Liens; (iii) the Equipment
and Collateral shall be kept and/or maintained solely at the addresses identified in writing to Lender; (iv) Borrower, immediately on demand by Lender, shall deliver to Lender any and all evidence of ownership of, including without limitation,
vendor invoices and proofs of payment thereof, certificates of title to and applications for title to, any of the Equipment and Collateral; (v) Borrower shall keep and maintain the Equipment and Collateral in good operating condition and repair
and shall make all necessary replacements thereof and renewals thereto so that the value and operating efficiency thereof shall at all times be maintained and preserved; and (vi) Borrower shall not permit any such items to become a fixture to
real estate or accession to other personal property. 

  

	(g)	As to Lender’s security interest, (i) Subject to all required filings and Permitted Liens, Lender’s security interest in the Collateral is now and at all times
hereafter shall be perfected and have a first priority, and subject to all required filings, Lender’s security interest in the Equipment described and/or listed on any certificate or schedule relating to Equipment and delivered to Lender is now
and at all times hereafter shall be perfected and have a first priority except under subsections 2, 3, 7, 8, 10, 11, and 12 of the definition of Permitted Liens; (ii) the offices and/or locations where Borrower keeps the Collateral and
Borrower’s books and records concerning the Collateral are at the locations identified to Lender in writing and Borrower shall not remove such books and records and/or the Collateral therefrom to any other location unless Borrower gives Lender
written notice thereof at least thirty (30) days prior thereto and the same is within the contiguous forty-eight (48) states of the United States of America; and (iii) the addresses identified to Lender in writing as Borrower’s
chief executive office and principal place(s) of business are Borrower’s principal offices and place(s) of business, and Borrower, by written notice delivered to Lender at least thirty (30) days prior thereto, shall advise Lender of any
change thereto. 

  

	7.	Affirmative and Negative Covenants 

 7.1 Negative
Covenants. Borrower covenants with Lender that Borrower shall not: (a) grant a security interest in, assign, sell or transfer any of the Collateral to any person or permit, grant, or suffer or permit a lien, claim or encumbrance upon any of
the Collateral, except those which constitute Permitted Liens and the sale of obsolete or unneeded Equipment in the ordinary course of business, upon Lender’s prior written consent and with the payment to Lender of any and all proceeds of such
disposition if such Equipment was included on any Schedule A to any Funding Request; (b) permit or suffer any levy, attachment, restraint or Charges to attach to or affect any of the Collateral except Permitted Liens; (c) permit or suffer
any receiver, trustee or assignee for the benefit of creditors to be appointed to take possession of any of the Collateral; (d) merge or consolidate with or acquire any Person except in a transaction in which the Borrower is the surviving
Person and the current shareholders of the Borrower hold at least 51% of all capital stock of the surviving Person unless the tangible net worth (according to GAAP) of the surviving entity is greater than or equal to $20,000,000; (e) enter into
any transaction not in the ordinary course of 

  

 12 

 
its business, or make any material change in Borrower’s capital structure (except for the sale of Borrower’s securities for capital raising
purposes, the price for which is paid in good funds and which sale may include the issuance by the company of unsecured convertible or secured non-convertible debt, provided that any secured convertible debt shall be subordinated to Borrower’s
obligations hereunder on terms and conditions reasonably acceptable to Lender), internal organization or management or in any of its business objectives, purposes and operations, which materially and adversely affects the Collateral or
Borrower’s ability to repay Borrower’s Liabilities or any other of Borrower’s debt; (f) incur additional debt other than (x) an accounts receivable financing line of credit secured by accounts receivables and proceeds
thereof, and (y) Permitted Liens as described herein; and (g) make any change in its legal name or state of formation or organization without providing at least thirty (30) days prior written notice to Lender. 
 7.2 Covenants regarding Financial Statements. Borrower shall cause to be furnished to Lender, (i) the audited fiscal year end financial statements of
Borrower no later than 120 days after the related fiscal year end, (ii) the internally prepared monthly financial statements of Borrower (and of any guarantor), certified by Borrower’s (or such guarantor’s) chief financial officer, no
later than 30 days after the related month end, each containing a profit and loss statement, balance sheet and statement of cash flows, (iii) summary monthly bank statements (upon written request of lender), no later than 30 days after the
related month end, reflecting month-end cash balances, and (iv) such other financial statements of Borrower as Lender may reasonably require, including such other financial and operating performance data as is provided to its outside investors
or commercial lenders and, if applicable, required to be provided to shareholders by the Security and Exchange Commission. Each financial statement to be furnished to Lender must be prepared in accordance with generally accepted accounting
principles, consistently applied. Borrower also agrees to promptly provide to Lender such other data and information (financial and otherwise) at any time and from time to time relating to any material adverse change in or related to the Collateral
or to Borrower’s credit standing, financial condition, management and/or business prospects. 
 7.3 Indemnification and Liability. Borrower
hereby agrees to indemnify Lender and hold Lender harmless from and against any and all claims, debts, liabilities, demands, obligations, actions, causes of action, penalties, reasonable costs and expenses (including reasonable attorneys’
fees), of every nature, character and description, which Lender may sustain or incur based upon or arising out of the Collateral, any of Borrower’s Liabilities, any relationship or agreement between Lender and Borrower, or any other matter,
cause or thing whatsoever occurred, done, omitted or suffered to be done by Lender relating to Borrower or Borrower’s Liabilities (except any such actual damage amounts sustained or incurred by Borrower as the result of the gross negligence or
willful misconduct of Lender). Should any third-party suit or proceeding be instituted by or against Lender with respect to any Collateral or relating to Borrower, Borrower shall, without expense to Lender, make available Borrower and its officers,
employees and agents and Borrower’s books and records, to the extent that Lender may deem them reasonably necessary in order to prosecute or defend any such suit or proceeding. 
  

	8.	Default 

 8.1 Events of Default. The occurrence of any
one of the following events shall constitute a default (“Event of Default”) by Borrower under this Agreement, and upon an Event of Default, all of Borrower’s Liabilities shall be due and payable, forthwith: (a) if Borrower fails
to pay Borrower’s Liabilities when due and payable or declared due and payable after giving effect to any applicable grace period and fails to pay the same within ten (10) days following Lender’s issuance of written notice (said
notice transmitted by both e-mail and overnight mail) indicating the amounts of unpaid Borrower’s Liabilities; (b) if any material statement, report or certificate made or delivered by Borrower, or any of its officers, to Lender under this
Loan Agreement is not true and correct in all material respects; (c) if Borrower fails or neglects to perform, keep or observe (“Failure”) any term, provision, condition, covenant, warranty or representation contained in this
Agreement or in the Other Agreements, which is required to be performed, kept or observed by Borrower, other than the payment of Borrower’s Liabilities, and the same is not cured within twenty (20) business days after written notice
thereof from Lender to Borrower, or such longer other period as is commercially reasonable given the nature of the Failure as agreed in writing by the Lender and Borrower; (d) if the Collateral or any other of Borrower’s assets are
attached, seized, subjected to a writ or distress warrant, or are levied upon, or come within the possession of any receiver, trustee, custodian or assignee for the benefit of creditors and Borrower is unable to dismiss the same or to reclaim
possession of such Collateral or other Borrower’s assets within the (10) days thereafter; (e) if Borrower’s balance of cash and cash equivalents are equal to or less than three months cash burn and Borrower does not have an
executed term sheet from a bonafide equity 

  

 13 

 
source providing for additional liquidity which upon funding would result in Borrower attaining an amount of cash and cash equivalents greater than three
months cash burn, or if the present CEO and/or CFO and/or their successors cease employment with Borrower and are not replaced within six months of their respective departure date(s) and/or Borrower’s contract with Gillette is terminated and is
not replaced with a comparable contract within thirty business days of the cancellation date; (f) if a petition under any section or chapter of the Bankruptcy Act or any similar law or regulation shall be filed by or against Borrower or if
Borrower shall make an assignment for the benefit of its creditors or if any case or proceeding is filed by Borrower for its dissolution or liquidation, which is not dismissed within fifteen (15) business days (however the cure period shall be
five (5) days if Lender has filed against Borrower or participated in a filing against Borrower in a commercially reasonable manner); (g) if Borrower is enjoined, restrained or in any way prevented by court order from conducting all or any
material part of its business affairs for a period in excess of ten (10) days; (h) if an application is made by Borrower or any Person for the appointment of a receiver, trustee or custodian for the Collateral or any other of
Borrower’s assets, which is not dismissed within fifteen (15) business days from the date of such application or appointment (however the cure period shall be five (5) days if Lender has applied for such application in a commercially
reasonable manner); (i) if a notice of lien, levy, assessment or other Charges are filed of record in an aggregate amount greater than $250,000 with respect to all or any of Borrower’s assets by any Person, which is not dismissed within
thirty (30) days from the date of such lien, levy, assessment or other Charges; or (j) if Borrower is in default under the Prior Loan Agreement or is in default in the payment of any of Borrower’s debt instruments or other writings or
lease obligations to any Person other than Lender where me aggregate original principal amount of such debt instruments or other writings or lease obligations in default is greater than $250,000 and such default is not cured within the time, if any,
specified therefore in any agreement governing the same. 
 8.2 Lender’s Rights and Remedies. Upon the occurrence and during the continuance of
an Event of Default, without notice by Lender to or demand by Lender of Borrower, all of Borrower’s Liabilities shall be accelerated and shall be due and payable forthwith, and Lender may, in its sole and absolute discretion: (a) exercise
any one or more of the rights and remedies accruing to a Lender under the Uniform Commercial Code or other applicable law of the relevant state or states or other applicable jurisdiction, and in equity, and under any other instrument or agreement
now or in the future entered into between Lender and Borrower, including under this Loan Agreement and the Other Agreements; (b) enter, with or without process of law and without breach of the peace, any premises where the Collateral or the
books and records of Borrower related thereto is or may be located, and without charge or liability to Lender therefor seize and remove the Collateral (and copies of Borrower’s books and records relating to the Collateral) from said premises
and/or remain upon said premises and use the same (together with said books and records) for the purpose of collecting, preparing and disposing of the Collateral; (c) sell, lease, license or otherwise dispose of the Collateral or any part
thereof by one or more contracts at one or more public or private sales for cash or credit, provided, however, that Borrower shall be credited with the net proceeds of such sale(s) only when such proceeds are actually received by Lender; and
(d) require the Borrower to assemble the Collateral and make it available to Lender at a place or places to be designated by Lender which is reasonably convenient to Lender and Borrower. Interest shall be payable on all of Borrower’s
Liabilities hereunder from the date of the Event of Default until the date payment in full is received by Lender at two percent (2%) per month or the highest rate permitted by law, whichever is less. All of Lender’s rights and remedies
under this Loan Agreement and the Other Agreements are cumulative and non-exclusive. Exercise or partial exercise by Lender of one or more of its rights or remedies shall not be deemed an election, nor bar Lender from subsequent exercise or partial
exercise of any other rights or remedies. Lender agrees to give notice of any sale to Borrower at least ten days prior to any public sale or at least ten days before the time after which any private sale may be held. Borrower agrees that Lender may
if Lender deems it reasonable, postpone or adjourn any such sale from time to time by an announcement at the time and place of sale or by announcement at the time and place of such postponed or adjourned sale, without being required to give a new
notice of sale. Borrower agrees that Lender has no obligation to preserve rights against prior parties to the Collateral. 
 8.3 Power of Attorney.
Upon the occurrence and during the continuance of any Event of Default, without limiting Lender’s other rights and remedies, for the purpose of effecting or enforcing Lender’s rights in accordance with the terms of this Loan Agreement,
Borrower grants to Lender an irrevocable power of attorney coupled with an interest (in addition to such other powers of attorney granted to Lender elsewhere in this Loan Agreement), authorizing and permitting Lender at any time, at its option, but
without obligation, with or without notice to Borrower, and at Borrower’s expense, execute on behalf of Borrower any Additional Documentation, or such other instruments or documents as may be reasonably necessary in order to exercise a right of
Borrower or Lender under this Agreement, including but not limited to the execution of any proof of claim in bankruptcy, any Notice of Lien, claim of mechanic’s or other lien, or assignment or satisfaction of mechanic’s or other lien, or
to take control in any 

  

 14 

 
manner of any cash or non-cash proceeds of Collateral and take any action or pay any sum required of Borrower pursuant to this Loan Agreement and any Other
Agreement. In no event shall Lender’s rights under the foregoing power of attorney or any of Lender’s other rights under this Loan Agreement be deemed to indicate that Lender is in control of the business, management or properties of
Borrower. 
  

	9.	General Provisions 

 9.1 Notices. All notices, demands
or other communications required or permitted to be given or delivered under or by reason of the provisions hereof shall be in writing and shall be deemed to have been given when (i) delivered personally to the recipient, (ii) sent via
facsimile transmission, (iii) the next business day after having been sent to the recipient by reputable overnight courier service (charges prepaid) or (iv) four business days after having been mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid. Such notices, demands and other communications shall he sent to the parties hereunder at their respective addresses and transmission numbers indicated on the signature page hereof, or to
such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party. 
 9.2
Severability. Should any provision of this Loan Agreement be held by any court of competent jurisdiction to be void or unenforceable, such defect shall not affect the remainder of this Loan Agreement, which shall continue in full force and
effect. 
 9.3 Integration; Modification. This Loan Agreement, the Other Agreements and such other written agreements, documents and instruments as
may be executed in connection herewith or pursuant hereto are the final, entire and complete agreement between Borrower and Lender and supersede all prior and contemporaneous negotiations and oral representations and agreements, all of which are
merged and integrated in this Loan Agreement and the Other Agreements. There are no oral understandings, representations or agreements between the parties which are not set forth in this Loan Agreement or the Other Agreements or in other written
instruments, documents or agreements signed by the parties in connection herewith. If any provision contained in this Loan Agreement is in conflict with, or inconsistent with, any provision in the Other Agreements, the provision contained in this
Loan Agreement shall govern and control, it being the intent of the parties, however, that the terms of each of the Loan Agreement and the Other Agreements shall be remain in full force and effect. This Loan Agreement and the Other Agreements may
not be modified, altered or amended except by an agreement in writing signed by Borrower and Lender. For the avoidance of doubt, for purposes of this Section 9.4, the term “Other Agreements” shall only include Other Agreements
executed in connection with this Loan Agreement and shall not include the First Loan Agreement or any of the Other Agreements executed in connection therewith. 
 9.4 Time of Essence. Time is of the essence in the performance by Borrower of each and every obligation under this Agreement. 
 9.5
Attorneys Fees and Other Costs. Borrower shall reimburse Lender for all out of pocket costs and expenses, including but not limited to reasonable attorneys’ fees and all filing, recording, search, title insurance, appraisal, audit, and
other reasonable costs incurred by Lender, pursuant to, or in connection with, or relating to this Loan Agreement, including, but not limited to preparing this Loan Agreement and all related documents; seeking to enforce any of its rights hereunder
against Borrower or the Collateral, including in bankruptcy; enforcing Lender’s security interest in the Collateral, and representing Lender in all such matters. In any action predicated on a breach of this Loan Agreement, the prevailing party
in such action shall be entitled to recover its reasonable costs and expenses, including without limitation court costs and reasonable attorneys’ fees. Borrower shall also pay Lender’s standard charges for returned checks in effect from
time to time. 
 9.6 Benefit of Agreement; Assignment. The provisions of this Loan Agreement shall be binding upon and inure to the benefit of the
respective successors, assigns, heirs, beneficiaries and representatives of Borrower and Lender; provided, however, that Borrower may not assign or transfer any of its rights under this Loan Agreement without the prior written consent of Lender, and
any prohibited assignment shall be void. Borrower hereby consents to Lender’s sale, assignment, transfer or other disposition, at any time and from time to time hereafter, of this Loan Agreement, or the Other Agreements, or of any portion
thereof, including without limitation Lender’s rights, titles, interests, remedies, powers and/or duties. 
  

 15 

 9.7 Joint and Several Liability. If Borrower consists of more than one Person, their liability shall be joint and
several, and the compromise of any claim with, or the release of, any Borrower shall not constitute a compromise with, or a release of, any other Borrower. 
 9.8 Paragraph Headings. Paragraph headings are only used in this Loan Agreement for convenience. The term “including”, whenever used in this Loan Agreement, shall mean “including but not limited to”. This Loan
Agreement has been fully reviewed and negotiated between the parties and no uncertainty or ambiguity in any term or provision of this Loan Agreement shall be construed strictly against Lender or Borrower under any rule of construction or otherwise.

 9.9 Interest Laws. Notwithstanding any provision to the contrary contained in this Agreement or any Other Document, Borrower shall not be required
to pay, and Lender shall not be permitted to collect, any amount of interest in excess of the maximum amount of interest permitted by applicable law (“Excess Interest”). If any Excess Interest is provided for or determined by a court of
competent jurisdiction to have been provided for in this Agreement or in any Other Document, then in such event: (1) the provisions of this subsection shall govern and control; (2) Borrower shall not be obligated to pay any Excess
Interest; (3) any Excess Interest that Lender may have received hereunder shall be, at such Lender’s option, (a) applied as a credit against the outstanding principal balance of the Borrower’s Liabilities or accrued and unpaid
interest (not to exceed the maximum amount permitted by law), (b) refunded to the payor thereof, or (c) any combination of the foregoing; (4) the interest rate(s) provided for herein shall be automatically reduced to the maximum
lawful rate allowed from time to time under applicable law (the “Maximum Rate”), and this Agreement and the Other Documents shall be deemed to have been and shall be, reformed and modified to reflect such reduction; and (5) Borrower
shall not have any action against Lender for any damages arising out of the payment or collection of any Excess Interest. 
 9.10 No Implied Waivers.
Lender’s failure at any time or times hereafter to exercise any rights or remedies or to require strict performance by Borrower of any provision of this Loan Agreement shall not waive, affect or diminish any right of Lender thereafter to demand
strict compliance and performance therewith and all rights and remedies shall continue in full force and effect until all of Borrower’s Liabilities have been fully and indefeasibly paid and performed. Any suspension or waiver by Lender of an
Event of Default by Borrower under this Loan Agreement or the Other Agreements shall not suspend, waive or affect any other Event of Default by Borrower under this Loan Agreement or the Other Agreements, whether the same is prior or subsequent
thereto and whether of the same or of a different type. Any waiver by Lender of any Event of Default or of any of the undertakings, agreements, warranties, covenants and representations of Borrower contained in this Loan Agreement or the Other
Agreements shall be effective unless specifically waived by an instrument in writing signed by an officer of Lender. 
 9.11 Acceptance by Lender.
This Loan Agreement become effective upon acceptance by Lender, in writing, at its principal place of business in as set forth above. If so accepted by Lender, this Loan Agreement and the Other Agreements shall be deemed to have been made at said
place of business. 
 9.12 LAW AND VENUE. THIS LOAN AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS AND DECISIONS OF THE
STATE OF ILLINOIS. BORROWER CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF COOK, STATE OF ILLINOIS. BORROWER WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION
BROUGHT AGAINST BORROWER BY LENDER OR TO ASSERT THAT ANY ACTION INSTITUTED BY LENDER OR BORROWER IN SUCH COURT IS AN IMPROPER VENUE OR SUCH ACTION SHOULD BE TRANSFERRED TO A MORE CONVENIENT FORUM. 
 9.13 WAIVER OF TRIAL BY JURY. BORROWER AND LENDER EACH WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY
RELATING TO, THIS LOAN AGREEMENT WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. 
 Signature Page Follows: 
  

 16 

 In Witness Whereof, this Equipment Loan and Security Agreement has been duly executed as of the day and year first
above written. 
  

									
					
	Borrower:	    	Alien Technology Corporation	 		 	Accepted	    	
		    		 		 	By:	    	
	By:	    	/s/ John Hemingway	 		 	Lender:	    	 Heller Financial Leasing, Inc.

					
	Title:	    	 CFO
	 		 	By:	    	/s/ Charles Arkin
					
	Attest:	    	 John Hemingway
	 		 	Title:	    	 AVP

					
	 Address for
 notices:
	    	 1. Alien Technology Corporation
 18220 Butterfield Boulevard
 Morgan Hill, CA 95037
	 		 	 Address
 for
 Notices:
	    	 500 West Monroe
 Chicago, IL 60661
 Attention: GE Technology Finance

	 [Notices to
	    	 Attention: Chief Executive Officer
	 		 		    	
	 be sent by
	    	 E-mail:
	 		 		    	
	 both e-mail
	    	 SProdromou@AlienTechnology.com
	 		 	Facsimile:	    	 312-876-2593

	 and
	    		 		 		    	
	 overnight
	    	 and
	 		 		    	
	 mail]
	    		 		 		    	
		    	 2. Alien Technology Corporation
 18220 Butterfield Boulevard
 Morgan Hill, CA 95037
 Attention: VP and General Counsel
 E-mail:
 Daaron@AlienTechnology.com
	 		 		    	
					
	Facsimile:	    	 408-782-3912
	 		 		    	

  

 17 

 SCHEDULE A 
 Liens existing on the date hereof and granted in the ordinary course of Borrower’s business, and included in the definition of Permitted Liens under the Loan Agreement: 
 Attach updated Schedule A 
  

 18 

 SCHEDULE A 
 Liens existing on the date hereof and granted in the ordinary course of Borrower’s business, and included in the definition of Permitted Liens under the Loan Agreement: 
 UCC Lien Search on Alien Technology Corporation in California 
  

							
	 UCC-1 Financing
 Statement
Filing
 Number
	  	 Filing Date
	  	 Secured Party (Parties)
	  	 Collateral

				
	 9815560265
	  	June 2, 1998	  	NATIONSCREDIT COMMERCIAL CORP	  	Leased equipment described therein
				
	 9824560245
	  	August 28, 1998	  	SILICON VALLEY BANK	  	Leased equipment described therein
				
	 9826660487
	  	September 22, 1998	  	COMDISCO, INC.	  	Leased equipment described therein
				
	 9907860148
	  	March 10, 1999	  	NATIONSCREDIT COMMERCIAL CORP.	  	Leased equipment described therein
				
	 9908560801
	  	March 26, 1999	  	COMDISCO, INC.	  	Leased equipment described therein
				
	 9917460377
	  	June 18, 1999	  	COMDISCO, INC.	  	Leased equipment described therein
				
	 9927960941
	  	September 29, 1999	  	COMDISCO, INC.	  	Leased equipment described therein
				
	 0001360313
	  	January 6, 2000	  	IMPERIAL BANK, PENTECH FINANCIAL SERVICES, INC. A CALIFORNIA CORPORATION PFF BANK AND TRUST BANK	  	Leased equipment described therein
				
	 0001860621
	  	January 10, 2000	  	BCL CAPITAL	  	Leased equipment described therein
				
	 0004860568
	  	February 14, 2000	  	BCL CAPITAL	  	Leased equipment described therein
				
	 0009060324
	  	March 24, 2000	  	FIDELITY LEASING INC.	  	Leased equipment described therein
				
	 0012560849
	  	April 27, 2000	  	 PENTECH FINANCIAL SERVICES, INC.
 THE CIT
GROUP
	  	Leased equipment described therein
				
	 0012660954
	  	May 1, 2000	  	PENTECH FINANCIAL SERVICES, INC., A CALIFORNIA CORPORATION PFF BANK AND TRUST	  	Leased equipment described therein

  

 19 

							
	 UCC-1 Financing
 Statement
Filing
 Number
	  	 Filing Date
	  	 Secured Party (Parties)
	  	 Collateral

				
	 0013860150
	  	 May 11, 2000
	  	 PENTECH FINANCIAL SERVICES, INC.
 THE CIT
GROUP
	  	Leased equipment described therein
				
	 0019460463
	  	 July 6, 2000
	  	 IMPERIAL BANK
 PENTECH FINANCIAL
 SERVICES, INC., A
 CALIFORNIA CORPORATION
 THE CIT GROUP
	  	Leased equipment described therein
				
	 0028460545
	  	 September 28, 2000
	  	 IMPERIAL BANK
 PENTECH FINANCIAL
 SERVICES, INC.
 THE CIT GROUP
	  	Leased equipment described therein
				
	 0028560183
	  	 September 28, 2000
	  	 PENTECH FINANCIAL SERVICES, INC.
 THE CIT
GROUP
	  	Leased equipment described therein
				
	 0102460269
	  	 January 17, 2001
	  	 IMPERIAL BANK
 PENTECH FINANCIAL
 SERVICES, INC.
 PFF BANK. AND TRUST
	  	Leased equipment described therein
				
	 0108060449
	  	 March 15, 2001
	  	THE CIT GROUP	  	Leased equipment described therein
				
	 0113460501
	  	 May 8, 2001
	  	COMDISCO, INC.	  	Leased equipment described therein
				
	 0114960957
	  	 May 23, 2001
	  	 TRANSAMERICA
 COMMERCIAL FINANCE
 CORPORATION
	  	Equipment described therein
				
	 0117661341
	  	 June 21, 2001
	  	 TRANSAMERICA
 COMMERCIAL FINANCE
 COMPANY
	  	Equipment described therein
				
	 0206360646
	  	 March 4, 2002
	  	 TRANSAMERICA
 COMMERCIAL FINANCE
 CORPORATION
	  	Equipment described therein

  

 20 

 SCHEDULE B 
 FUNDING REQUEST NO.                      
 FOR 
 AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT NO. 24-01110

 BY AND BETWEEN 
 HELLER FINANCIAL LEASING, INC. AS LENDER 
 AND 
 ALIEN TECHNOLOGY CORPORATION, AS BORROWER 
 Borrower hereby
requests an advance under the terms of the above described Loan and Security Agreement (the 

	“Loan	Agreement”) in the original principal amount of
                                       
  Dollars
($                                    
    ). 

 Borrower hereby acknowledges and agrees that the representations and warranties as set forth in the
Loan Agreement are as if fully set forth herein, and further agrees that any and all Conditions Precedent to the
making of an advance by the Lender set forth in the Loan Agreement either have been satisfied or will be satisfied as a result of the making by Lender of this advance. Borrower represents and warrants that there has been no material adverse change
in the financial condition, internal organization and/or business prospects of the Borrower since the later of the date of the Loan Agreement or the date of the last advance made by the Lender thereunder. 
 The advance hereby requested hereby shall be secured by the Collateral as defined in the Loan Agreement, including but not limited to the Equipment described in the
attached Schedule A. 
 The undersigned certifies that the undersigned is a duly authorized signatory of the Borrower, and that as such the
undersigned is authorized to execute this request on behalf of the Borrower. 
  

			
	 Alien Technology Corporation

	 Borrower

		
	 By:
	 	 _________________________________________

		
	 Name:
	 	 _________________________________________

		
	 Its:
	 	 _________________________________________

		
	Date:	 	 _________________________________________

  

 21Promissory Note

 Exhibit 10.40 
 

 
 PROMISSORY NOTE 
  

															
	 Principal
 $2,000,000.00
	 	 Loan Date
 03-21-2005
	 	 Maturity
 03-16-2012
	 	 Loan No
 1463857517
	 	Call/Col	 	Account	 	Officer	 	Initials
	
	References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any
particular loan or item. Any item above
containing “* * *” has been omitted due to text length limitations.

  

									
	Borrower:	  	Alien Technology Corporation	  		  	Lender:	  	Wells Fargo Bank, National Association
		  	18220 Butterfield Blvd	  		  		  	Moorhead Center
		  	Morgan Hill, CA 95037	  		  		  	730 Center Avenue
		  		  		  		  	Moorhead, MN 56560

  

					
	Principal Amount:    $2,000,000.00	  	Initial Rate:    6.750%	  	Date of Note:    March 21, 2005

 PROMISE TO PAY. Alien Technology Corporation (“Borrower”) premises to pay to Wells Fargo Bank,
National Association (“Lender”), or order, in lawful money of the United States of America, the principal amount of Two Million & 00/100 Dollars ($2,000,000.00), together with interest on the unpaid principal balance from March 21,
2005, until paid in full. 
 PAYMENT. Subject to any payment changes resulting from changes in the Index, Borrower will pay this loan in 83 payments
of $30,008.00 each payment and an irregular last payment estimates at $30,007.89. Borrower’s first payment is due April 15, 2005, and all subsequent payments are due on the same day of each month after that Borrower’s final payment will be
due on March 16, 2012, and will be for all principal and all accrued interest not yet paid. Payments include principal and interest. Unless otherwise agreed or required by applicable law, payments will be applied first to any accrued unpaid
interest; then to principal; and than to any late charges. The annual interest rate for this Note is computed on a 365,360 basis: that is, by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding
principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender’s address shown above or at such other place as Lender may designate in writing. 
 VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an index which is the adjustable rate equal to
the Prime Rate set from time to time by Lender that serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto (the “Index”). The Index is not necessarily the lowest rate charged by
Lender on its loans and is set by Lender in its sole discretion. If the Index becomes unavailable during the term of this loan, Lender may designate a substitute Index after notifying Borrower. Lender will tell Borrower the current Index rate upon
Borrower’s request. The interest rate change will not occur more often than each month. The interest rate will be adjusted on the first day of each month following any change in the Index. Based upon the Index in effect one business day before
such date plus the spread which is added to the Index as described below. Each change in the Index shall become effective on the date each Prime Rate change is announced within Lender. The “initial rate” is the rate per annum which
Borrower and Lender agree shall be the initial rate of this Note, and the “Index currently” is the Index amount upon which said initial rate is based; they do not necessarily reflect the Index in effect on the date of this Note. Borrower
understands that Lender may make loans based on other rates as well. The Index currently is 4.00% per annum. The interest rate to be applied to the unpaid principal balance of this Note will be at a rate of 2.750 percentage points over the Index,
resulting in an initial rate of 6.750% per annum. NOTICE: Under no circumstances will the interest rate on this Note to more than the maximum rate allowed by applicable law. Whenever increases occur in the interest rate, Lender, at its option, may
do one or more of the following: (A) increase Borrower’s payments to ensure Borrower’s loan will pay off by its original final maturity date, (B) increase Borrower’s payments to cover accruing Interest, (C) increase the number of
Borrower’s payments, and (D) continue Borrower’s payments at the same amount and increase Borrower’s final payment. 
 PREPAYMENT.
Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower’s obligation to continue to make payments under the
payment schedule. Rather, early payments will reduce the principal balance due and may result in Borrower’s making fewer payments. Borrower agrees not to send Lender payments marked “paid in full”, “without recourse”, or
similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender’s rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning
disputed amounts, including any check or other payment instrument that indicates that the payment constitutes “payment in full” of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a
disputed amount must be mailed or delivered to: Wells Fargo Bank, National Association; Moorhead Center; 730 Center Avenue; Moorhead, MN 56560. 
 LATE
CHARGE. If a payment is 10 days or more late, Borrower will be charged 6.000% of the unpaid portion of the regularly scheduled payment. 
 INTEREST
AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the total sum due under this Note will bear interest from the date of acceleration or maturity at the variable Interest rate on this Note. The interest rate will not
exceed the maximum rate permitted by applicable law. 
 DEFAULT. Each of the following shall constitute an event of default (“Event of
Default”) under this Note: 
 Payment Default. Borrower fails to make any payment when due under this Note. 
 Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of
the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower. 
 Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor
or person that may materially affect any of Borrower’s property or Borrower’s ability to repay this Note or perform Borrower’s obligations under this Note or any of the related documents. 
 False Statements. Any Warranty, representation or statement made or furnished to Lender by Borrower or on Borrower’s behalf under this Note or
the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. 
 Insolvency. The dissolution or termination of Borrower’s existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower’s property, any assignment
for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. 

					
		 	PROMISSORY NOTE	  	
	Loan No.: 146385715	 	(Continued)	  	 Page 
 2

  

 Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings,
whether by judicial proceeding, self-help, repossession or any other method, or any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment of any of Borrower’s accounts,
including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if
Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate
reserve or bond for the dispute. 
 Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor,
endorser, surety, or accommodation party of any of the Indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes this validity of, or liability under, any guaranty of the indebtedness
evidenced by this Note. 
 Change In Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of
Borrower. 
 Adverse Change. A material adverse change occurs in Borrower’s financial condition, or Lender believes the prospect
of payment or performance of this Notes is impaired. 
 Insecurity. Lender in good faith believes itself insecure. 
 LENDER’S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance on this Note and all accrued unpaid interest immediately due, and then
Borrower will pay that amount. 
 ATTORNEYS’ FEES: EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not
pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender’s reasonable attorney’s fees and Lender’s legal expenses, whether or not there is a law suit, including reasonable
attorneys’ fees, expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other
sums provided by law. 
 WHEN FEDERAL LAW APPLIES. When SBA is the holder, this Note will be interpreted and enforced under federal law, including SBA
regulations. Lender or SBA may use state or local procedures for filing papers, recording documents, giving notices for closing liens, and other purposes. By using such procedures, SBA does not waive any federal immunity from state or local control,
penalty, tax, or liability. As to this Note, Borrower may not claim or assert against SBA any local or state law to deny any obligation, defeat any claim of SBA, or preempt federal law. 
 COLLATERAL. Borrower acknowledges this Note is secured by the following collateral described in the security instrument listed herein: equipment described in a Commercial Security Agreement dated March 21,
2005. 
 LOAN FEE AUTHORIZATION. Borrower shall pay to Lender any and all fees as specified in the “Disbursement Request and Authorization”
executed by Borrower in connection with this Note. Such fees are non-refundable and shall be due and payable in full immediately upon Borrower’s execution of this Note. 
 APPLICATION OF PAYMENT. Notwithstanding the application of payment provided in the Payment action of this Note. Unless otherwise agreed all sums received from Borrower may be applied to interest, fees,
principal, or any other amounts due to Lender in any order at Lender’s sole discretion. If a final payment amount is set out in the Payment action of this Note, Borrower understands that it is an estimate, and that two actual final payment
amount will depend upon when payments are received and other factors. 
 PAYMENT DUE DATE DEFERRAL. Payment invoices will be sent on a date the
“billing date” I which is prior to each payment due date. If this Note is booked after the billing date for the first scheduled payment. Lender may defer each scheduled payment date and the maturity dates by one month. 
 ADDITIONAL SECURITY. Notwithstanding anything to the contrary in this or any related agreement, to further secure the indebtedness and obligations of the Note and
related loan documents, Borrower pledges and grants to Lender a contractual right of offset and security interest in Borrower’s accounts with Lender and Borrower’s accounts with any Wells Fargo Affiliate, whether checking, savings,
investment, or some other account, including without limitation, accounts held jointly with others and accounts opened in the future, excluding however all IRAs. Keogh accounts, and trust accounts to the extent a security Interest would be invalid
or prohibited by law. As used herein, “Wells Fargo Affiliate” means any present or future subsidiary of Wells Fargo & Company, and any subsidiary thereof, and any successors of such financial serves companies. 
 EXTENSION AND RENEWAL. Lender may, at Lender’s discretion, renew or extend this Note by written notice (“Renewal Notice”) to Borrower. Such renewal
or extension shall be effective as of the maturity date of the Note, and may be conditioned among other things on modification of Borrower’s obligations hereunder, including but not limited to a decreases in the amount available under this
Note, an increase in the interest rate applicable to this Note and/or payment of a fees for such renewal or extension. In addition, Lender may increase the principal amount available under the Note at any time. Borrower shall be deemed to have
accepted the terms of each Renewal Notice, including any notice of an increase in availability, if Borrower does not deliver to Lender written rejection of such renewal or extension within 10 days following receipt of such Renewal Notice, or if
Borrower draws additional funds following the date of notification. After any renewal or extension of Borrower’s obligations under this Note, the term “maturity date” as used in this Note shall mean the new maturity date set forth in
the Renewal Notice. This Note may be renewed and extended repeatedly in this manner. 
 FINANCIAL STATEMENTS. Borrower agrees to provide to Lender,
upon request, financial statements prepared in a manner and form acceptable to Lender, and copies of such tax returns and other financial information and statements as may be requested by Lender. Borrower shall also furnish such information
regarding Borrower or the Collateral as may be requested by lender. Borrower warrants that all financial statements and information provided to Lender are and will be accurate, correct and complete. 
 CREDIT BUREAU INQUIRIES. The parties hereto, and each individual signing below in a representative capacity, agree that Lender may obtain business and/or personal
credit reports and tax returns on each of them in their individual capacities. 
 ADDITIONAL EVENTS OF DEFAULT. If the Borrower is a partnership, in
addition to the Events of Default described above, the following shall also be an Event of Default: (a) the resignation or expulsion of any general partner which an ownership interest of twenty-five percent (25%) or more in any Borrower which is a
partnership or (b) if any general partner of Borrower is generally not paying its debts as they become due. 
 FURTHER ASSURANCES. The parties hereto
agree to do all things deemed necessary by Lender in order to fully document the loan evidenced by this Note and any related agreements, and will fully cooperate concerning the execution and delivery of security agreements, stock powers,
instructions and/or other documents pertaining to any collateral Intended to secure the indebtedness. The undersigned agree to assist in the cure of any defects in the execution, delivery or substance of the Note and related agreements, and in the
creation and perfection of any liens, security interests or other collateral rights securing the Note. 
 CONSENT TO SELL LOAN. The parties hereto
agree: (a) Lender may sail or transfer all or part of this loan to one or more purchasers, whether 

					
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related or unrelated to Lender; (b) Lender may provide to any purchaser, or potential purchaser, any information or knowledge Lender may have about the
parties or about any other matter relating to this loan obligation, and the parties waive any rights to privacy it may have with respect to such matters; (c) the purchaser of a loan will be considered its absolute owner and will have all the rights
granted under the loan documents or agreements governing the sale of the loan; and (d) the purchaser of a loan may enforce its interests irrespective of any claims or defenses that the parties may have against Lender. 
 FACSIMILE AND COUNTERPART. This document may be signed in any number of separate copies, each of which shall be effective as an original, but all of which
taken together shall constitute a single document. An electronic transmission or other facsimile of this document or any related document shall be deemed an original and shall be admissible as evidence of the document and the signer’s
execution. 
 ARBITRATION AGREEMENT. Arbitration - Binding Arbitration. Lender and each party to this agreement hereby agree, upon demand by
any party, to submit any Dispute to binding arbitration in accordance with the terms of this Arbitration Program. A “Dispute” shall include any dispute, claim or controversy of any kind, whether in contract or in tort, Legal or equitable,
now existing or hereafter arising, relating in any way to this Agreement or any related agreement incorporating this Arbitration Program (the “Documents”), or any past, present, or future loans, transactions, contracts, agreements,
relationships, incidents or injuries of any kind whatsoever relating to or involving Business Banking, Regional Banking, or any successor group or department of Lender. DISPUTES SUBMITTED TO ARBITRATION ARE NOT RESOLVED IN COURT BY A JUDGE OR JURY.

 Governing Rules. Any arbitration proceeding will: (i) 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 (ii) be conducted by the AAA (American Arbitration Association), 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 end the Rules, the terms and procedures set forth herein shall control. Arbitration proceedings hereunder shall be conducted at a location mutually agreeable to the parties,
or if they cannot forth herein shall control. Arbitration proceedings hereunder shall be conducted at a location mutually agreeable to the parties, or if they cannot agree, then at a location selected by the AAA in the state of the applicable
substantive law primarily governing the Credit. 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 competing arbitration of any Dispute.
Arbitration may be demanded at any time, and may be compelled by summary proceedings in Court. 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 subtraction if any other party contests such action for judicial relief. The arbitrator shall award all costs and expenses of the arbitration proceeding. 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. 
 No Waiver of Provisional Remedies, Self-Help and Foreclosures. 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. 
 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 much actively participate in all hearings and deliberations. Every arbitrator must be a practicing attorney or a retired
member of the state or federal judiciary, in either case with a minimum of ten years experience in the substantive law applicable to the subject matter of the Dispute. 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 discretions 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 applicable substantive law 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 applicable State Rules of Civil Procedure, or other applicable law. Judgment upon the award rendered by the arbitrator may be entered
in any court having jurisdiction. 
 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 request 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. 
 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. The resolution of any Dispute shall be determined by a separate arbitration proceeding and such Dispute shall not be consolidated with other disputes
or included in any class proceeding. 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 documents between the parties or the subject matter of
the Dispute shall control. This arbitration provision shall survive termination, amendment or expiration of any of the documents or any relationship between the parties. 
 State-Specific Provisions. 
 If California law governs the Dispute, the following provision is included: 

Real Property 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 the holder of the mortgage, lien or security interest specifically effects in writing to proceed with the arbitration. If any such Dispute is not
submitted to arbitration, the Dispute shall at the election of any party, be referred to a referee in accordance with California Code of Civil Procedure Section 638 at 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. 

					
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 If Idaho law governs the Dispute, the following provision is included: 
 Real Property 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 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 Idaho, 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 Montana law governs the Dispute, the following provision is included:

 Real Property 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 effects in writing to proposed 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 section rule statute of Montana, 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 Nevada law governs the
Dispute, the following provision is included: 
 Real Property 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 Nevada, 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 Utah law
governs the Dispute, the following provision is included: 
 Real Property Collateral; Judicial Reference. Notwithstanding anything herein to the
contrary, no Dispute shall be submitted to arbitration if the Disputes concern indebtedness secured directly or indirectly, in whole or in part, by any real property unless the holder of the mortgage, lien or security interest specifically elects in
writing to proceed with the arbitration. If any such Dispute is not submitted to arbitration, the Dispute shall, at the election of any party, be referred to a master in accordance with Utah Rule of Civil Procedure _3, and this general reference
agreement is intended to be specifically enforceable. A master with the qualifications required herein for arbitrators shall be selected pursuant to the AAA’s selection procedures. Judgment upon the decision rendered by a master shall be
entered in the court in which such proceeding was commenced in accordance with Utah Rule of Civil Procedure 53(a). 
 EXPRESS ANNUAL FEE. Borrower
will pay to Bank a non-refundable annual fee of one half of one percent (0.50%) of the total commitment amount or two hundred fifty dollars is $250.00 whichever is greater. 
 LINE OF CREDIT. This Note evidences a straight line of credit. Once the total amount of principal has been advanced. Borrower is not entitled to further loan advances. Advances under this Note may be requested
either orally or in writing by Borrower or an authorized person. Lender may, but need not, require that all oral requests be confirmed in writing. All communications, instructions, or directions by telephone or otherwise to Lender are to be directed
to Lender’s office shown above. Borrower agrees to be liable for all sums either: (A) advanced in accordance with the instructions of an authorized person or (B) credited to any of Borrower’s accounts with Lender. The unpaid principal
balance owing on this Note at any time may be evidenced by endorsements on this Note if: (A) Borrower or any guarantor is in default under the terms of this Note or any agreement that Borrower or any guarantor has with Lender, including any
agreement made in connection with the signing of this Note; (B) Borrower or any guarantor ceases doing business or is insolvent; (C) any guarantor seeks, claims or otherwise attempts to limit, modify or revoke such guarantor’s guarantee of this
Note or any other loan with Lender; (D) Borrower has applied funds provided pursuant to this Note for purposes other than those authorized by Lender; or (E) Lender in good faith believes itself insecure. 
 LINE ADVANCES. Notwithstanding anything to the contrary, requests for advances communicated to any office of Lender by any person, believed by Lender in good
faith to be authorized to make the request, whether written, verbal, telephonic or electronic, may be acted upon by Lender, and Borrower will be liable for sums advanced by Lender pursuant to such request. Such requests for advances shall be deemed
authorized by Borrower, and Lender shall not be liable for such advances made in good faith, and with respect to advances deposited to the credit by any deposit account of Borrower, such advances, when so deposited, shall be conclusively presumed to
have been made to or for the benefit of Borrower regardless of the fact that persons other than those authorized to request advances may have authority to draw against such account. Borrower agrees to indemnify and hold Lender harmless from and
against all damages, liabilities, costs and expenses (including attorney’s fees) arising out of any claim by Borrower or any third party against Lender in connection with Lender’s performance of transfers as described above. 
 GOVERNING LAW. This Note will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of Minnesota
without regard to its conflicts of law provisions. This Note has been accepted by lender in the State of Minnesota. 
 SUCCESSOR INTERESTS. The terms
of this Note shall be binding upon Borrower, and upon Borrower’s heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and its successors and assigns. 
 GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorsee this Note, to the extent, allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs
this Note, whether as major, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for length of time) this loan or release any party or guarantor or
collateral; or impair, fail to realize upon or perfect Lender’s security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may
modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. 
 SECTION DISCLOSURE. To the extent not preempted by federal law, this loan is made under Minnesota Statutes, Section 47.59. 

					
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 PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE
INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE. 
 BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE. 

BORROWER: 
  

			
	 ALIEN TECHNOLOGY CORPORATION

		
	 By:
	 	/s/ Stavro Prodromou
		 	Stavro Prodromou CEO/Director of Alien Technology Corporation

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