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4818-8339-4824.5

LOAN AGREEMENT

by and among

UNION BANK, N.A., as Lender,

CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY, as Issuer,

and

DACON PROPERTIES, LLC, as Borrower

This instrument constitutes a security agreement under the California Uniform Commercial Code.

Dated as of December 1, 2010

Section 1.01. Section 1.02. Section 1.03.

Section 2.0 1. Section 2.02. Section 2.03. Section 2.04. Section 2.05. Section 2.06. Section 2.07. Section 2.08. Section 2.09. Section 2.10. Section 2.11. Section 2.12. Section 2.13. Section 2.14.

ARTICLE I DEFINITIONS AND EXHIBITS

Definitions ....................................................................................................... 2 Exhibits .......................................................................................................... 12 Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

ARTICLE II FINANCING OF PROJECT AND TERMS OF LOAN

Construction of Project .................................................................................. 13 Loan and Note ................................................................................................ 13 Fees ................................................................................................................ 13 Interest ........................................................................................................... 14 Payments; Assignment. .................................................................................. 15 Payment on Non-Business Days .................................................................... 17 Borrower Loan Payments To Be Unconditional ........................................... 17 Prepayments ................................................................................................... 18 Limited Obligations of Issuer ........................................................................ 19 Additional Payments and Issuer Payments .................................................... 19 Security .......................................................................................................... 20 Recording of Real Estate Instruments ........................................................... 20 Reserved ........................................................................................................ 21 Establishment of Project Fund ....................................................................... 21

ARTICLE III

CONDITIONS PRECEDENT ..................................................................................................... 21

ARTICLE IV

REPRESENTATIONS, WARRANTIES AND COVENANTS OF ISSUER ............................ 23

ARTICLEV REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER

Section 5.01. General ........................................................................................................... 25

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF LENDER .................................................... 33

4818-8339-4824.5

ARTICLE VII TITLE TO PROJECT

Section 7.01.

Section 7.02. Section 7.03. Section 7.04.

Section 8.01. Section 8.02. Section 8.03. Section 8.04. Section 8.05. Section 8.06. Section 8.07. Section 8.08. Section 8.09. Section 8.10. Section 8.11. Section 8.12. Section 8.13.

Section 8.14. Section 8.15. Section 8.16. Section 8.17.

Section 9.01. Section 9.02. Section 9.03. Section 9.04. Section 9.05. Section 9.06. Section 9.07. Section 9.08. Section 9.09. Section 9.10. Section 9.11. Section 9.12. Section 9.13. Section 9.14.

4818-83394824.5

Change in Name or Corporate Structure of Borrower; Change in Location of Borrower's Principal Place of Business ........................................................ 33 Liens and Encumbrances to Title .................................................................. 33 Assignment of Insurance ............................................................................... 33 Agreement as Financing Statement ............................................................... 34

ARTICLE VIII AFFIRMATIVE COVENANTS OF BORROWER

Reporting Requirements ................................................................................ 34 Books and Records; Inspection and Examination ......................................... 36 Payment of Taxes and Other Claims ............................................................. 36 Maintenance of Project .................................................................................. 37 Insurance ........................................................................................................ 37 Preservation of Existence .............................................................................. 38 Issuer's Right to Enforce Tax Regulatory Agreement .................................. 38 Limitations of Liability .................................................................................. 38 Non-Liability of Issuer .................................................................................. 38 Expenses ........................................................................................................ 38 No Personal Liability ..................................................................................... 38 Indemnification .............................................................................................. 39 Covenant to Enter into Agreement or Contract to Provide Ongoing Disclosure ....................................................................................................................... 40

Reserved ........................................................................................................ 40 Deposit Relationship ...................................................................................... 40 Lessee Debt Service Coverage Ratio ............................................................. 41 Covenants of the Borrower Required by the California Debt Limit Allocation Committee ...................................................................................................... 41

ARTICLE IX NEGATIVE COVENANTS OF BORROWER

Lien ................................................................................................................ 41 Sale of Assets ................................................................................................. 41 Consolidation and Merger ............................................................................. 42 Accounting ..................................................................................................... 42 Use of Funds .................................................................................................. 42 Other Indebtedness ........................................................................................ 42 Reserved ........................................................................................................ 42 Reserved ........................................................................................................ 42 Use of Project ................................................................................................ 43 Guaranties ...................................................................................................... 43 Pledge of Assets ............................................................................................. 43 Maintenance of Business ............................................................................... 43 Restrictive Agreements .................................................................................. 43 Patriot Act Compliance .................................................................................. 43

- ii -

ARTICLE X

RESERVED ................................................................................................................................. 43

Section 11.0 1. Section 11.02.

Section 12.01. Section 12.02. Section 12.03. Section 12.04. Section 12.05.

Section 13.01. Section 13.02. Section 13.03. Section 13.04. Section 13.05. Section 13.06. Section 13.07. Section 13.08. Section 13 .09. Section 13.10. Section 13 .11. Section 13.12. Section 13.13. Section 13.14. Section 13.15.

ARTICLE XI ASSIGNMENT, SUBLEASING AND SELLING

Assignment by Lender ................................................................................... 44 No Sale or Assignment by Borrower. ............................................................ 44

ARTICLE XII EVENTS OF DEFAULT AND REMEDIES

Events of Default ........................................................................................... 44 Remedies on Default. ..................................................................................... 46 Lender's Right to Perform the Obligations ................................................... 47 No Remedy Exclusive ................................................................................... 48 Late Charge .................................................................................................... 48

ARTICLE XIII MISCELLANEOUS

Costs and Expenses of Lender and Issuer. ..................................................... 48 Disclaimer of Warranties ............................................................................... 49 Notices ........................................................................................................... 49 Further Assurance and Corrective Instruments ............................................. 50 Binding Effect; Time of the Essence ............................................................. 50 Severability .................................................................................................... 50

Amendments···································································-····························· 50 Execution in Counterparts ............................................................................. 50 Applicable Law; Venue ................................................................................. 50 Captions ......................................................................................................... 51 Entire Agreement ........................................................................................... 51 Usury .............................................................................................................. 51 No Third Party Beneficiaries ......................................................................... 51 Waiver of Jury Trial. ...................................................................................... 51 USA Patriot Act Notice ................................................................................. 52

EXHIBIT A OPINION OF COUNSEL TO BORROWER EXHIBIT B-1 FORM OF INVESTOR'S LETTER OF REPRESENTATION EXHIBIT B-2 FORM OF QUALIFIED INSTITUTIONAL BUYER'S LETTER OF REPRESENTATION EXHIBIT C LEGAL DESCRIPTION OF PROPERTY EXHIBIT D LIST OF PERMITTED ENCUMBRANCES EXHIBIT E FORM OF NOTE EXHIBIT F FORM OF PROJECT FUND REQUISITION EXHIBIT G SCHEDULE OF PRINCIPAL COMPONENTS

111

4818-8339-4824.5

LOAN AGREEMENT

THIS LOAN AGREEMENT dated for reference purposes only as of December 1, 2010 but effective as of the Closing Date (this "Agreement"), by and among UNION BANK, N.A., as lender (with its successors and assigns, "Lender"), the CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY, a public entity duly organized and validly existing under the laws of the State of California (the "State"), as issuer ("Issuer"), and DACON PROPERTIES, LLC, a California limited liability company, as borrower ("Borrower").

WHEREAS, Issuer was established pursuant to the provisions of the Joint Powers Act, comprising Articles 1, 2, 3 and 4 of Chapter 5 of Division 7 of Title 1 (commencing with Section 6500) of the Government Code of the State of California (the "Act") and a Joint Exercise of Powers Agreement, dated June 1, 2006 (the "JPA Agreement"), among the cities of Eureka, Lancaster and Selma and other public agencies who have and may subsequently become associate members of Issuer; and

WHEREAS, Issuer is authorized by the JPA Agreement and the Act to issue bonds, notes or other evidences of indebtedness, or certificates of participation in leases or other agreements, or enter into loan agreements for the purpose of assisting members of Issuer in stimulating or expanding local economies, promoting opportunities for the creation or retention of employment, stimulating economic activity and increasing the tax base; and

WHEREAS, pursuant to the provisions of the Act, the public agencies which are members of Issuer are authorized to jointly exercise any power common to such public agency members, including, without limitation, the power to acquire and dispose of property, both real and personal; and

WHEREAS, the City of Industry (the "City") is an associate member of Issuer and is authorized to acquire and dispose of property, both real and personal; and

WHEREAS, pursuant to the provisions of the Act, the Issuer may, at its option, issue bonds, rather than certificates of participation, and enter into a loan agreement for the purposes of promoting economic development; and

WHEREAS, in furtherance of the purposes of the Act set forth above, the Issuer proposes to fmance, refmance or reimburse the Borrower for (1) the cost of construction, installation and equipping of an approximately 200,000 square foot manufacturing and distribution facility located at 14508 Nelson Avenue, City of Industry, California 91744 (the "Property") described in Exhibit C hereto, and (2) certain costs of issuance related to such fmancing or refmancing; and

WHEREAS, to accomplish such financing pursuant to this Agreement, the Issuer intends to obtain a loan from Lender (the "Issuer Loan"), the interest with respect to which shall be excluded from income of Lender for Federal income tax purposes and exempt from State personal income taxes, and lend the proceeds thereof to Borrower (the "Borrower Loan"); and

WHEREAS, Borrower proposes to use the proceeds of the Borrower Loan upon the terms and conditions set forth herein to finance a portion of the costs of the Project; and

4818-8339-4824.5

WHEREAS, Issuer will assign the payments due under the Borrower Loan pursuant to this Agreement (except Issuer Payments) to Lender to satisfy Issuer's obligations under the Issuer Loan; and

WHEREAS, the repayment of principal, premium, if any, and the interest on the Issuer Loan (the "Issuer Loan Payments") shall be made solely from the revenues to be received by Lender (as assignee of Issuer) from Borrower's payments under the Borrower Loan (except Issuer Payments) (the "Borrower Loan Payments"); and

WHEREAS, Borrower holds a fee title interest in the; and

WHEREAS, Borrower shall make the Borrower Loan Payments directly to Lender as assignee of Issuer and holder of the Note (as hereinafter defined), pursuant to the terms set forth in this Agreement; and

WHEREAS, this Agreement, the Note and the Issuer Loan shall not be deemed to constitute a debt or liability or obligation of the State or any political subdivision thereof, or a pledge of the faith and credit or taxing power of the State or any political subdivision thereof, but shall be a special obligation payable solely from the Borrower Loan Payments payable by Borrower to Lender as assignee of Issuer and holder of the Note;

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, and in consideration of the premises contained in this Agreement, Lender, Issuer and Borrower agree as follows:

ARTICLE I

DEFINITIONS AND EXHIBITS

Section 1.01. Definitions. The following terms used herein will have the meanings indicated below unless the context clearly requires otherwise:

"Accredited Investor" has the meaning ascribed thereto in Rule 501 of Regulation D of the Securities Act of 1933, as amended ("Rule 501"), other than as defined in paragraph (a)(4), (a)(5) or (a)(6) of Rule 501.

"Act" means Chapter 5 of Division 7 of Title 1 of the California Government Code (Commencing with Section 6500), as amended.

"Actual Occupancy" shall mean occupancy of some or all of the Property by one or more tenants who are unaffiliated with the Borrower and who are financially capable of performing their obligations under one or more leases with the Borrower that contains terms acceptable to Lender in its sole discretion, reasonably exercised, including rent at the then current market rate (if not greater), and where the tenant(s) under such lease(s) has taken occupancy of the demised premises and commenced payment of rent.

"Additional Payments" shall have the meaning ascribed thereto in Section 2.10 hereof.

4818-8339-4824.5 2

"Affiliate" means any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, another Person. A Person shall be deemed to control another Person for purposes of this definition if such Person possesses, directly or indirectly, the power to direct, or cause the direction of, the management and policies of the other Person, whether through the ownership of voting securities, common directors, trustees or officers, by contract or otherwise; provided that, in any event for purposes of this definition, any Person that owns, directly or indirectly, 20% or more of the securities having the ordinary voting power for the election of directors or governing body of a corporation or 20% or more of the partnership or other ownership interests of any other Person (other than as a limited partner of such other Person) will be deemed to control such corporation or other Person.

"Agreement" means this Agreement, including all exhibits and schedules hereto, as any of the same may be supplemented or amended from time to time in accordance with the terms hereof.

"Applicable Margin" means 0.96%.

"Appraisal" means an appraisal conducted by a MAl certified appraiser chosen and engaged by Lender, complying with Lender's appraisal policy and to be performed at Borrower's expense.

"Authorized Borrower Representative" means the Managing Member of Borrower or any other person designated in writing by the Managing Member of Borrower to Lender and Issuer.

"Base Rate" means for any day a fluctuating rate per annum equal to LIBOR then in effect multiplied by 64.72%.

"Borrower" means Dacon Properties, LLC, a limited liability company duly organized and validly existing under the laws of the State of California.

"Borrower Loan" means the loan from Issuer to Borrower pursuant to this Agreement.

"Borrower Loan Payments" means the loan payments payable by Borrower under the Borrower Loan pursuant to the provisions of this Agreement and the Note, together with any Additional Payments and Issuer Payments. As provided in Article II hereof, Borrower Loan Payments (except Issuer Payments) shall be payable by Borrower directly to Lender, as assignee of Issuer and holder of the Note, in the amounts and at the times as set forth in Section 2.05 hereto.

"Borrower Obligations" means and includes all obligations of Borrower owing to Lender (including as assignee of Issuer) under this Agreement, the Note or any other Loan Document, or of Borrower owing to any Lender Affiliate in respect of any rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions or other hedging transactions entered into in connection with this Agreement or any of the other Loan Documents.

"Business Day" means a day, other than a Saturday or Sunday, on which banks in the State are open for business for the funding of corporate draws; provided, however, that when

4818-8339-4824.5 3

used in connection with the determination of any LIBOR Rate, "Business Day" means a day which is also a London Banking Day and a New York Banking Day.

"Closing Date" means December 30, 2010.

"Code" means the Internal Revenue Code of 1986, as amended, and United States Treasury regulations promulgated thereunder.

"Collateral" shall have the meaning ascribed thereto in Section 2.11 hereof.

"Construction Loan Agreement" shall mean that certain Construction Loan Agreement, dated January 12, 2010, between Borrower and Lender.

"Costs of Issuance" means all items of expense directly or indirectly payable by or reimbursable to Issuer, Lender or Borrower and related to the authorization, issuance, sale and delivery of the Note, including but not limited to costs of preparation and reproduction of documents, printing expenses, filing and recording fees, legal fees and charges, fees and disbursements of consultants and professionals, rating agency fees, fees and charges for preparation, execution and safekeeping of the Note and any other cost, charge or fee in connection with the original issuance of the Note which constitutes a "cost of issuance" within the meaning of Section 147(g) of the Code; provided, however, that that aggregate amount of the Costs of Issuance paid with the proceeds of the Issuer Loan shall not exceed 2% of the principal amount of the Issuer Loan.

"Debt Service Coverage Ratio" shall mean the ratio of (i) the underwritable cash flow for the Property, after taking into account for purposes of such calculation, reserves for capital expenditures, leasing commissions and tenant improvements, all as determined by Lender in accordance with its then applicable underwriting standards and criteria, to (ii) the combined interest and principal payment that would be required to be paid under the Note and this Agreement during the period of calculation, assuming for purposes of such calculation (x) a principal amount equal to the then current indebtedness evidenced by the Note, (y) a per annum rate of interest equal to (A) in the event the Borrower has entered into an interest rate swap transaction with Lender with respect to all of the Borrower Loan for the remaining term of the Borrower Loan (hereinafter referred to as the "Interest Rate Swap Transaction") and the Interest Rate Swap Transaction is then still in full force and effect, the fixed rate synthetically created with respect to the Note by the Interest Rate Swap Transaction, or (B) in the event the Borrower has not entered into an Interest Rate Swap Transaction or an Interest Rate Swap Transaction, if entered into, is then no longer in full force and effect, Lender's then current underwriting interest rate for loans similar to the Borrower Loan on real properties similar in nature and type to that of the Property, and (z) equal monthly payments of principal and interest in an amount which would fully amortize the then outstanding principal amount of the indebtedness evidenced by the Note over the remaining term of the initial amortization period provided for in this Agreement.

"Deed of Trust" means the Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated as of December 1, 2010, executed by Borrower in favor of Lender, as assignee of Issuer, relating to the Property.

4818-8339-4824.5 4

"Default' means an event that, with giving of notice or passage of time or both, would constitute an Event of Default as provided in Article XII hereof.

"Default Rate" means 5% above the Effective Rate.

"Effective Rate" means, for each Interest Period, a per annum rate equal to the Base Rate in effect for such Interest Period plus the Applicable Margin.

"Environmental Indemnity" means the Environmental Compliance Agreement in form and substance acceptable to Lender and executed by the Borrower in favor of Lender.

"Environmental Laws" means any federal, state or local law (whether imposed by statute, or administrative or judicial order, or common law), now or hereafter enacted, governing health, safety, industrial hygiene, the environment or natural resources, or Hazardous Materials, including, such laws governing or regulating the use, generation, storage, removal, recovery, treatment, handling, transport, disposal, control, discharge of, or exposure to, Hazardous Materials.

"Event of Taxability" means the occurrence of either of the following events: (1) any holder or former holder of the Issuer Loan shall have notified Borrower, Lender and Issuer in writing that the Internal Revenue Service has assessed all or any portion of the interest on the Issuer Loan as includable in the federal gross income of such holder or former holder (other than by virtue of the fact that such holder or former holder is or was a "substantial user" of the Project or a "related person" as such terms are used in Section 147(a)(2) of the Code, or any successor provision) and such holder or former holder shall have given Borrower the opportunity, at Borrower's expense, to contest such assessment and such contest, if made, has been finally determined; or (2) any holder or former holder of the Issuer Loan shall have notified Borrower, Lender and Issuer in writing that such holder or former holder has determined, in good faith, that all or any portion of the interest thereon is includable in such holder's or former holder's federal gross income (other than by virtue of the fact that such holder or former holder is or was a "substantial user" of the Project or a "related person," as such terms are used in Section 147(a)(2) of the Code, or any successor provision) based upon an opinion of Independent Counsel that such holder or former holder may not reasonably exclude or was not reasonable in excluding such interest from its federal gross income; provided, however, that if an Event of Taxability shall have occurred under clause (2) above after a holder or former holder of the Issuer Loan shall have received the assessment referred to in clause (1) above, then any proceeding contesting such assessment shall be promptly discontinued at the request of such holder or former holder; and provided, further, that no Event of Taxability under either clause ( 1) or clause (2) above shall be deemed to have occurred if, in the opinion of Independent Counsel, the events giving rise to such purported Event of Taxability were caused in substantial part by the affirmative act of such holder or former holder, disregarding for the purposes of this proviso clause any act committed by such holder or former holder at the written request, or with the written consent, of Borrower.

"Final Appraisal" means the appraisal conducted by an MAl certified appraiser chosen and engaged by Lender.

4818-8339-4824.5 5

"GAAP" means generally accepted accounting principles in the United Sates of America.

"Government Obligations" means and includes any of the following securities, if and to the extent the same are non-callable and not subject to redemption at the option of the issuer, at the time legal for investment: direct obligations of, or obligations the full and timely payment of principal of and interest on which are unconditionally guaranteed by, the United States of America, including obligations issued or held in book-entry form on the books of the Department of the Treasury of the United States of America and including a receipt, certificate or any other evidence of a direct ownership interest of future payments in an obligation of, or unconditionally guaranteed by, the United States of America, or in specified portions thereof held by a custodian in safekeeping for the holders of such receipt, certificate or any other evidence of ownership (which may consist of specified portions of interest thereon) which is rated or assessed in the highest rating category of Moody's and S&P, but excluding any share or interest in any unitary investment trust or mutual fund unless such unitary investment trust or mutual fund is rated or assessed in the highest rating category of Moody's and S&P.

"Gross-Up Rate" means, with respect to any Interest payment (including payments made prior to the Event of Taxability), the rate necessary to calculate an additional payment in an amount sufficient such that the sum of the Interest payment plus the additional payments would, after being reduced by the federal income tax applicable to the holder or former holder, as applicable, of the Issuer Loan (including interest and penalties accrued through the date Borrower commences payment at the Gross-Up Rate, but not including the effect of alternative minimum tax, environmental tax or other similar tax effect) actually imposed thereon, equal the amount of the Interest payment if such payment were not included in the calculation of federal income tax of the holder or former holder, as applicable, of the Issuer Loan.

"Hazardous Materials" means (a) petroleum or chemical products, whether in liquid, solid, or gaseous form, or any fraction or by-product thereof, (b) asbestos or asbestos-containing materials, (c) polychlorinated biphenyls (pcbs), (d) radon gas, (e) underground storage tanks, (f) any explosive or radioactive substances, (g) lead or lead-based paint or (h) any other substance, material, waste or mixture which is or shall be listed, defined, or otherwise determined by any governmental authority to be hazardous, toxic, dangerous or otherwise regulated, controlled or giving rise to liability under any Environmental Laws.

"Independent Counsel" shall mean the law firm of Kutak Rock LLP; provided, however, that if such firm shall be unable or unwilling to render, within a reasonable time after being requested to do so, by a holder or former holder of the Issuer Loan, a written opinion as to the matters referred to in this Agreement, then such holder or former holder may select, with the consent of Borrower (which consent shall not be unreasonably withheld), another independent, nationally recognized bond or tax counsel to act as Independent Counsel hereunder.

"Individual Guarantor" means David Littman.

"Interest" means the portion of any payment from Issuer to Lender under the Issuer Loan designated as and comprising interest as provided in Section 2.04 hereof.

4818-8339-4824.5 6

"Interest Periocf' means a period which commences on the first day of a calendar month and ends on (but excludes) the first day of the immediately following calendar month; provided, however, that if the Prepayment Date falls on a day which is not a Business Day, then the Interest Period which ends on the Prepayment Date shall end on the next succeeding Business Day.

"Interest Rate Detennination Date" means the date which is two (2) Business Days before the first day of each calendar month, commencing with January 2011.

"Investment Securities" means (a) obligations described in Section 103 of the Code, the interest on which is Tax-exempt, including certificates or units of or in any entity that (i) is treated as a "grantor trust" under Subchapter J, Part I, Subpart E of the Code in which the certificate holders or unit holders are treated as the owners of all assets owned by such trust; and (ii) invests solely in obligations described in Section 103 of the Code, the interest on which is Tax-exempt; and (b) stock of a "qualified regulated investment company" as such term is defined in Section (a)(2) of Notice 87-22 of the Internal Revenue Service, including qualified temporary investments relating to Tax-exempt obligations pursuant to paragraph (a)(5) of Notice 87-22 but shall not include securities issued by the Issuer or the Borrower. At the time of investment, Investment Securities shall be legal investments under the laws of the State for the moneys proposed to be invested therein. No investment shall constitute an Investment Security for purposes hereof if not rated in one of the top two ratings for such type of security by S&P or Moody's.

"Issuer" means California Enterprise Development Authority, a public entity duly organized and validly existing under the laws of the State, its successors and assigns.

"Issuer Documents" means this Agreement and the Tax Regulatory Agreement.

"Issuer Loan" means the loan from Lender to Issuer pursuant to this Agreement.

"Issuer Loan Payments" means the loan payments payable by Issuer to Lender under the Issuer Loan pursuant to the provisions of this Agreement. As provided in Article II hereof, Issuer Loan Payments shall be paid solely from Borrower Loan Payments to Lender (as assignee of Issuer) under the Borrower Loan in the amounts and at the times set forth in Section 2.05 hereto and, if applicable following Lender's exercise of remedies hereunder, Collateral proceeds.

"Issuer Payments" shall have the meaning ascribed thereto in Section 2.10 hereof.

"Lease Agreement" means that certain Lease Agreement, dated as of December 1, 2010, between Borrower and Lessee with respect to the Project, as may be amended from time to time in accordance with the terms thereof.

"Lessee" means Troy-CSL Lighting, Inc., a New York corporation.

"Lessee Loan Agreement" means that certain Amended and Restated Loan Agreement, dated as of December 10, 2010, by between Lender and Lessee.

4818-8339-4824.5 7

"Lender" means (a) Union Bank, N.A., acting as lender under this Agreement, (b) any surviving, resulting or transferee corporation of Union Bank, N.A., and (c) except where the context requires otherwise, any assignee(s) of Lender.

"Lender Affiliate" means an affiliate of Lender or any related entity 100% of whose common stock is directly or indirectly owned by Lender or its parent.

"LIBOR" shall mean, as of any given date, a per annum rate of interest equal to the rate for U.S. Dollar deposits for a period of one month which appears on the Reuters Screen LIBOR01 Page as of 11:00 a.m., London time, on the day that is two (2) Business Days preceding such date and for an amount equal to the unpaid principal balance of the Borrower Loan. The LIBOR rate for any Interest Period shall be determined on the date which is two (2) Business Days immediately preceding the first day of each Interest Period. No LIBOR rate may be changed, altered or otherwise modified until the expiration of the then current Interest Period. At the commencement of each Interest Period, the Effective Rate shall be automatically adjusted to reflect the LIBOR rate in effect for such Interest Period. In no event shall any Interest Period extend beyond the Prepayment Date without the Lender's prior written consent. Should the LIBOR rate not be available for any reason for any Interest Period, then such rate shall be replaced for such Interest Period by a rate which, in the sole discretion of Lender, most closely approximates the unavailable LIBOR rate.

"Littman Guaranty Agreement" means the Continuing Guaranty, dated as of December 1, 2010, executed by the Individual Guarantor in favor of Lender.

"Loan Documents" means, collectively, this Agreement, the Schedules, the Note, the Deed of Trust, the Tax Regulatory Agreement, the Environmental Indemnity, the Troy Guaranty Agreement, the Littman Guaranty Agreement and each other document, agreement or instrument executed by Borrower in connection with any of the foregoing.

"Loan Proceeds" means the total amount of money to be advanced pursuant to Section 2.02 hereof by Lender (on behalf of Issuer) to Borrower.

"Loan to Value Ratio" shall mean the ratio of (i) the outstanding indebtedness evidenced by the Note and, in the event the Borrower has entered into an Interest Rate Swap Transaction, Borrower's aggregate and potential exposure remaining under such Interest Rate Swap Transaction as determined by Lender in accordance with its customary procedures for determining such exposure, to (ii) the "as is" market value of the Property as determined by Lender in its business judgment, reasonably exercised, based upon a current Appraisal.

"London Banking Day" means a day on which dealings in U.S. Dollar deposits are carried on by banks in London, England.

"Maturity Date" means December 1, 2035.

"Net Proceeds" means the amount remaining from the gross proceeds of any insurance claim or condemnation award received in respect of the premises after deducting all expenses (including reasonable attorneys' fees and costs) incurred in the collection of such claim or award.

4818-8339-4824.5 8

"New York Banking Day" means a day on which banks in New York, New York are open for business for the funding of corporate loans.

"Note" means the Note, dated December 30, 2010, executed by the Borrower in the form attached as Exhibit E hereto and in the principal amount of $11,325,000 evidencing the obligation of the Borrower to make Borrower Loan Payments.

"Permitted Encumbrances" means the items set forth in Exhibit D.

"Permitted Investments" means Treasury Funds, Government Obligations and Investment Securities; provided that no Permitted Investment shall have a maturity greater than six months from the date of purchase without the consent of the Lender.

"Permitted Lease" has the meaning set forth in the Deed of Trust

"Person" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, governmental entity, agency or authority, including any joint powers agency, or other entity.

"Prepayment Amount" means the sum of (1) the principal portion of the Note being prepaid before the end of an Interest Period; and (2) interest accrued and unpaid on such principal being prepaid before the end of an Interest Period; and (3) an amount equal to the present value of the product of: (i) the difference (but not less than zero) between (a) the Taxable Equivalent Rate at the time of prepayment, and (b) the return which Lender could obtain if it used the amount of such prepayment of principal to purchase at bid price regularly quoted securities issued by the United States having a maturity date most closely coinciding with the end of the current Interest Period and such securities were held by Lender until the end of such Interest Period ("Yield Rate"); (ii) a fraction, the numerator of which is the number of days in the period between the date of prepayment and the end of such Interest Period and the denominator of which is 360; and (iii) the amount of the principal so prepaid. Present value under the Note is determined by discounting the above product to present value using the Yield Rate as the annual discount factor. In no event shall Lender be obligated to make any payment or refund to Borrower, nor shall Borrower be entitled to any setoff or other claim against Lender, should the return which Lender could obtain under this prepayment formula exceed the interest that Lender would have received if no prepayment had occurred. All prepayments shall include payment of accrued interest on the principal amount so prepaid and shall be applied to payment of interest before application to principal. A determination by Lender as to the prepayment fee amount due under clause (3) above, if any, shall be given in writing to Borrower in advance of a prepayment by Borrower and shall be conclusive in the absence of manifest error. Lender shall provide Borrower a statement of the amount payable on account of prepayment. Borrower acknowledges that (i) Lender establishes the Effective Rate upon the understanding that it will apply to the Borrower Loan for the entire Interest Period, and (ii) Lender would not issue the Issuer Loan without Borrower's express agreement to pay Lender the prepayment fee described above.

"Prepayment Date" means January 1, 2018, unless such Prepayment Date is extended pursuant to Section 2.05(i), in which case, the Prepayment Date shall mean the Prepayment Date determined pursuant to the provisions of Section 2.05(i).

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"Principal" means the portion of any Borrower Loan Payment designated as principal in this Agreement.

"Project" means the manufacturing facility and related improvements located on the Property.

"Project Fund' means the fund established and held by Lender pursuant to Section 2.14 hereof.

"Project Fund Requisition" has the meaning assigned to such term in Section 2.14.

"Property" means the real property described in Exhibit C hereto.

"Qualified Costs" means and shall be deemed to include all of the costs of the design, development, construction, installation and equipping of the Project, to the extent permitted by the Tax Regulatory Agreement, whether incurred prior to (subject to the provisions below), on or after the Closing Date, including, but not limited to the following:

(a) the cost of construction, improvement, repair and reconstruction;

(b) the cost of permits, licenses, credits, fees, governmental approvals and other development costs of the Project;

(c) the cost of machinery, equipment and furnishings, of engineering and architectural services, surveys and plans, and specifications and of transportation and storage until the Project is operational;

(d) the cost of agents or consultants, including, without limitation, legal, financial, engineering, accounting, and auditing, necessary or incident to the Project and of the determination as to the feasibility or practicability of undertaking the Project;

(e) the cost of financing the Project (including, without limitation, the loan in the original principal amount of $11,325,000 pursuant to the certain Construction Loan Agreement), and the reimbursement to any governmental entity or agency, or any Person, of expenditures made by or on behalf of such entity, agency or Person in connection with the Project; provided, that Borrower shall at its own expense insure, repair, and maintain the Project, pay such taxes with respect to the Borrower's interest in the Property, and pay such assessments and other public charges on the Project in accordance with the terms of this Agreement; and

(f) an amount not exceeding 2% of the Issuer Loan for Costs of Issuance.

provided, however, that (i) such costs are paid after the earlier of 60 days prior to the date of a declaration of "official intent" to reimburse costs paid with respect to the Project (within the meaning of §1.150-2 of the United States Treasury Regulations) or the Closing Date, and (ii) if project costs were previously paid and are to be reimbursed with proceeds of the Issuer Loan, such costs were (A) costs of issuance of the Issuer Loan, (B) preliminary capital expenditures (within the meaning of United States Treasury Regulations §1.150-2(f)(2)) with respect to the

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Project (such as architectural, engineering and soil testing services) incurred before commencement of construction of the Project that do not exceed 20% of original principal balance, or the "issue price," of the Issuer Loan (as defined in United States Treasury Regulations § 1.148-1 ), or (C) were capital expenditures with respect to the Project that are reimbursed no later than 18 months after the later of the date the expenditure was paid or the date the Project is placed in service (but in no event later than three years after the expenditure is paid).

"Qualified Institutional Buyer" shall have the meaning ascribed thereto in Rule 144A of the Securities Act of 1933, as amended.

"Retained Rights" means the rights of the Issuer under the Issuer Documents to opinions, notices, indemnification and Issuer Payments.

"Scheduled Payments" means the regularly scheduled payments of principal and interest payable by Borrower under the Note pursuant to Section 2.05. The principal component due on any Scheduled Payment Date shall equal the amount specified for such Scheduled Payment Date as set forth in Exhibit G hereto and in Schedule 1 to the Note.

"Scheduled Payment Date" means the first Business Day of each calendar month, commencing on February 1, 2011, if on such date any Borrower Loan is outstanding.

"Site Assessment" means an environmental engineering report for the Property prepared by an engineer engaged by Lender at Borrower's expense, and in a manner satisfactory to Lender, based upon an investigation relating to and making appropriate inquiries concerning the existence of Hazardous Materials on or about the Property, and the past or present discharge, disposal, release or escape of any such substances, all consistent with good customary and commercial practice.

"Stabilized Occupancy" shall mean the occupancy percentage and rents set forth in the Appraisal upon stabilization of the Property as set forth therein.

"State" means the State of California.

"Tax Regulatory Agreement" means the Tax Regulatory Agreement dated the Closing Date between Borrower and Issuer, as such Tax Regulatory Agreement may be amended from time to time in accordance with its terms.

"Taxable Equivalent Rate" means, with respect to any interest payment (including payments made prior to an Event of Taxability) due under the Note, an annual interest rate equal to the Effective Rate (as in effect from time to time) plus One and One Quarter Percent (1.25%).

"Title Policy" means the policy of title insurance referred to in Article III clause ( q) hereof.

"Treasury Funds" means (a) any investment portfolio consisting of direct obligations of the United States Treasury Department and, with the consent of the Lender, repurchase agreements in respect of those obligations, including any such investment portfolio maintained

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by the Lender; (b) any investment or security permitted pursuant to Section 53601 of the California Government Code, including any investment or security portfolio consisting of any one or more of such investments or securities, rated in one of the top two rating categories by S&P or Moody's applicable thereto; and (c) any other investment or security permitted by law and approved by the Lender.

"Troy Guaranty Agreemenf' means the Troy Guaranty Agreement, dated as of December 1, 2010, hereof, executed by the Lessee in favor of Lender.

hereof:

"UCC' means the Uniform Commercial Code as adopted and in effect in the State.

Section 1.02. Exhibits. The following exhibits are attached hereto and made a part

Exhibit A:

Exhibit B:

ExhibitC:

Exhibit D:

Exhibit E:

Exhibit F:

Exhibit G:

Form of opinion of counsel to Borrower.

Form of Investor's Letter of Representation (B-1 ), Form of Qualified Institutional Buyer's Letter of Representation (B-2).

Legal Description of Property.

List of Permitted Encumbrances.

Form of Note.

Form of Requisition for Project Fund.

Schedule of Principal Components

Section 1.03. Rules of Construction.

(a) The singular form of any word used herein, including the terms defined in Section 1.01 hereof, shall include the plural, and vice versa. The use herein of a word of any gender shall include correlative words of all genders.

(b) Unless otherwise specified, references to Articles, Sections and other subdivisions of this Agreement are to the designated Articles, Sections and other subdivision of this Agreement as originally executed. The words "hereof," "herein," "hereunder" and words of similar import refer to this Agreement as a whole. The word "including" means "including but not limited to."

(c) The headings or titles of the several articles and sections shall be solely for convenience of reference and shall not affect the meaning, construction or effect of the provisions hereof.

(d) References to Interest or the Issuer Loan as "tax exempt" or the tax exempt status of the Issuer Loan are to the exclusion of Interest from gross income for federal income tax purposes pursuant to Section 103(a) of the Code.

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(e) Accounting terms not specifically defined herein shall be construed and all computations herein provided for shall be made in accordance with GAAP in the United States as set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

ARTICLE II

FINANCING OF PROJECT AND TERMS OF LOAN

Section 2.01. Construction of Project. Borrower has constructed, installed and equipped or shall construct, install and equip the Project. As between Borrower and Lender, Borrower shall remain liable to any contractor, manufacturer, vendor or seller of any component of the Project, as well as the agents or dealers of a manufacturer, from whom Borrower has purchased or is purchasing any component of the Project, in respect of its duties and obligations and shall bear the risk of loss with respect to any loss or claim relating to any portion of the Project, and neither Lender nor Issuer shall assume any such liability or risk of loss. Borrower covenants and agrees to pay or cause to be paid such amounts as may be necessary to complete the construction, installation and equipping of the Project and to ensure that the Project is operational to the extent that the Loan Proceeds are insufficient to cause such construction, installation and equipping.

Section 2.02. Loan and Note. Lender hereby agrees, subject to the terms and conditions of this Agreement, to make the Issuer Loan in the amount of $11,325,000; Issuer hereby agrees, subject to the terms and conditions of this Agreement, to borrow such amount from Lender and to lend such amount to Borrower under the Borrower Loan and Note; and Borrower hereby agrees to borrow such amount from Issuer, as evidenced by this Agreement and the Note. The Note shall be executed and delivered to the Lender, as Issuer's assignees, by the Borrower concurrently with the execution and delivery of this Agreement. Lender shall, on behalf of Borrower, disburse the Loan Proceeds as follows:

(a) $11,325,000.00 of the Loan Proceeds shall be deposited into the Project Fund and be used to pay the Qualified Costs on the Closing Date.

Section 2.03. Fees.

(a) Appraisal and Environmental Review Fee. As of the Closing Date, Borrower shall have paid Lender a non-refundable appraisal and environmental review fee with respect to the appraisal and environmental review of the Project.

(b) Other Lender Fees. Upon Lender's request, Borrower shall pay Lender all of Lender's out-of-pocket expenses associated with the Project or any transaction contemplated by the Loan Documents, including without limitation expenses relating to

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review of environmental reports, title insurance, escrows and recording of documents, as itemized to Borrower by Lender prior to the Closing Date.

Section 2.04. Interest.

(a) The principal amount of the Issuer Loan and the Borrower Loan hereunder outstanding from time to time shall bear interest at the Effective Rate then in effect, subject Section 2.05(g). Interest shall be payable on each Scheduled Payment Date and the Effective Rate for each Interest Period will be calculated on the Interest Rate Determination Date immediately preceding such Interest Period, subject to the terms hereinafter set forth. The initial interest rate for the period from the Closing Date through December 31, 2010, will be determined by Lender prior to the Closing Date and shall be prepaid by Borrower on the Closing Date. All interest hereunder shall be calculated on the basis of a year of 360 days and for the actual number of days elapsed. Interest accruing on the principal balance of such loans outstanding from time to time shall be payable monthly on each Scheduled Payment Date and upon earlier demand in accordance with the terms hereof or prepayment in accordance with Section 2.08 hereof and the Note. Upon the occurrence of an Event of Taxability, Borrower shall, with respect to future interest payments, begin making Borrower Loan Payments calculated at the Gross-Up Rate. In addition, within 5 Business Days following demand of Lender, Borrower shall make a payment to Lender sufficient to supplement prior Borrower Loan Payments to the Gross-Up Rate, if and to the extent the interest component of prior Issuer Loan Payments (satisfied by such Borrower Loan Payments) is being treated as taxable income as the result of the occurrence of an Event of Taxability.

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(b) If

(i) the adoption of any applicable law, rule or regulation, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by Lender with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall subject Lender to any tax (including without limitation any United States interest equalization or similar tax, however named), duty or other charge with respect to the computation of interest on the outstanding principal balance of the Borrower Loan, or shall change the basis of taxation of payments to Lender of the principal of or interest on the outstanding principal balance of the Issuer Loan (except for changes in the rate of the tax on the overall net income of the imposed by the United States or the jurisdiction in which Lender's principal executive office is located, and except for changes in the Bank's tax liability in connection with Sections 55 through 59 of the Code or any similar tax imposed by the federal government on tax preferences of similar items) or

(ii) any governmental authority, central bank or other comparable authority shall at any time impose, modify or deem applicable any reserve (including, without limitation, any reserve imposed by the Board of Governors of

14

the Federal Reserve System), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, Lender, or shall impose on Lender any condition affecting the computation of the interest on the outstanding principal balance of the Borrower Loan; and the result of the foregoing is to reduce the amount of any sum received or receivable by Lender under the Borrower Loan by an amount deemed by Lender to be material,

then within 5 Business Days following demand by Lender, Borrower shall pay to Lender such additional amount or amounts as will compensate Lender for such increased cost or reduction. Lender will promptly notify Borrower in writing of any event of which it has knowledge, occurring after the date hereof, which will entitle Lender to compensation pursuant to this paragraph. A certificate of Lender claiming compensation under this paragraph and setting forth the additional amount or amounts to be paid to Lender hereunder along with reasonably detailed documentation shall be conclusive in the absence of manifest error.

(c) If the adoption of any applicable law, rule or regulation, or any change therein, or in the interpretation of administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by Lender with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency, or for any other reason, results in Lender's inability to utilize the benefits of the tax-exempt interest on the Issuer Loan, Borrower shall, with respect to future interest payments, begin making Borrower Loan Payments calculated at the Gross-Up Rate on the portion of the outstanding principal affected by such adoption of law, rule, regulation or similar change therein. In addition, within 5 Business Days following demand of Lender or any other holder or former holder of the Issuer Loan, Borrower shall make a payment to Lender or such other holder or former holder sufficient to supplement prior Borrower Loan Payments to the Gross-Up Rate, if and to the extent that Lender or such other holder or former holder has not been able to utilize the benefits of tax-exempt interest on the Issuer Loan.

(d) If Lender at any time shall determine that for any reason adequate and reasonable means do not exist for ascertaining the LffiOR rate, or Lender shall determine at any time that the making or maintaining of the Issuer Loan or the Borrower Loan at the LIDOR rate shall be unlawful, then Lender shall give telephonic notice (promptly confirmed in writing) to Borrower of such determination and shall advise Borrower of the replacement rate, which, in the sole discretion of Lender, most closely approximates the LIBOR rate.

Section 2.05. Payments; Assignment.

(a) Issuer shall pay the principal of and interest on the Issuer Loan, but only out of the Borrower Loan Payments to be made by Borrower to Issuer under the Borrower Loan pursuant to this Agreement and the Note.

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(b) As security for Issuer's obligation to pay the principal of, premium, if any in accordance with Section 2.07 hereof, and interest on the Issuer Loan, Issuer assigns to Lender the Note, all of Issuer's right to receive Borrower Loan Payments from Borrower hereunder (except Issuer Payments) and under the Note, all of Issuer's other rights hereunder and under the Note (except Retained Rights) and all of Issuer's right, title and interest in and to the Project. Issuer irrevocably constitutes and appoints Lender and any present or future officer or agent of Lender as its lawful agent, with full power of substitution and resubstitution, and in the name of Issuer or otherwise, to collect the Borrower Loan Payments and any other payments due Lender hereunder and to sue, as assignee of Issuer hereunder and under the Note, in any court for such Borrower Loan Payments or other payments due to Lender hereunder as assignee of Issuer, and to withdraw or settle any claims, suits or proceedings pertaining to or arising out of this Agreement or the Note upon any terms. Notwithstanding the previous sentence, Lender shall have no right to represent Issuer, settle any claims or suits in any matter concerning the Tax Regulatory Agreement, the tax-exempt status of the Issuer Loan and pursue any indemnity rights granted to the Issuer herein. The foregoing power is coupled with an interest and is irrevocable. Borrower Loan Payments (except Issuer Payments) and other payments due Lender hereunder shall be made by Borrower directly to Lender, as Issuer's assignee, and shall be credited against Issuer's payment obligations under the Issuer Loan and under the Note. All Issuer Payments due to Issuer hereunder shall be made by Borrower directly to Issuer. No provision, covenant or agreement contained in this Agreement or any obligation imposed on Issuer herein, or the breach thereof, shall constitute or give rise to or impose upon Issuer or the State a pecuniary liability, a charge upon its general credit or taxing powers or a pledge of its general revenues. No recourse shall be had by Lender or Borrower for any claim based on this Agreement or the Tax Regulatory Agreement against Issuer or any director, officer, employee, counsel or agent of Issuer.

(c) Borrower agrees to pay when due all Scheduled Payments and other amounts due under this Agreement, the Note and the other Loan Documents, in lawful money of the United States of America, to Lender (other than Issuer Payments) on the dates and in such amounts as provided below. All Scheduled Payments and other amounts payable hereunder and under the Note to Lender shall be made in immediately available funds at Lender's address above or such other place as Lender shall specify in writing. All payments to Lender shall become due at 1:00 p.m., Los Angeles time, on the day when due without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived.

(d) Lender and Borrower may modify the Scheduled Payments without the consent of the Issuer.

(e) At all times that the Borrower Loan is outstanding, Borrower agrees to pay all accrued interest on the Borrower Loan monthly in arrears, on each Scheduled Payment Date.

(f) The principal amount of the Borrower Loan shall be payable in 300 consecutive monthly installments of Scheduled Payments, each due on each Scheduled

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Payment Date, commencing February 1, 2011, subject to a final payment due on the Prepayment Date (subject to Section 2.05(i)). The principal component of each Scheduled Payment is set forth in Exhibit G hereto. Subject to Section 2.05(i), the Scheduled Payment due on the Prepayment Date shall include all outstanding principal and all accrued and unpaid interest.

(g) Borrower authorizes Lender to collect when due all Scheduled Payments and other amounts owing to Lender under the Borrower Loan Documents by charging any deposit account at any time maintained by Borrower with Lender or any Lender Affiliate, for the full amount thereof. Should there be insufficient funds in any such deposit account(s) to pay all of such sums when due, the full amount of such deficiency shall be immediately due and payable by Borrower without notice or demand, all of which are expressly waived by Borrower.

(h) Any Borrower Loan Payment made after an Event of Default shall accrue interest at the Default Rate from and after the due date thereof to the date of payment by the Borrower.

(i) Subject to Section 2.05(f), on the Prepayment Date, Borrower shall pay the entire unpaid principal amount of the Borrower Loan, together with all unpaid and accrued interest on the Borrower Loan to the Prepayment Date together with any Additional Payments then due in accordance with the provisions of this Section and the Note and all other amounts payable in accordance with this Loan Agreement. Not later than 60 days prior to the Prepayment Date, Borrower may in writing request an extension of the Prepayment Date. Lender shall, not later than 30 days following receipt of Borrower's written request for an extension of the Prepayment Date, provide a written response to Borrower indicating whether such extension is approved and the new Prepayment Date. Failure of Lender to respond within such 30-day period shall constitute disapproval of the request for an extension on the Prepayment Date.

Section 2.06. Payment on Non-Business Days. Whenever any payment to be made hereunder shall be stated to be due on a day which is not a Business Day, such payment may be made on the next succeeding Business Day.

Section 2.07. Borrower Loan Payments To Be Unconditional. The obligations of Borrower to make the Borrower Loan Payments required under this Article II and the Note and to make other payments hereunder and to perform and observe the covenants and agreements contained herein, including the obligation to make all Additional Payments and Issuer Payments, shall be absolute and unconditional in all events, without abatement, diminution, deduction, setoff or defense for any reason, including (without limitation) any failure of any component of the Project to be delivered or installed, any defects, malfunctions, breakdowns or infirmities in the Project or any accident, condemnation, destruction or unforeseen circumstances. Notwithstanding any dispute between Borrower and any of Issuer, Lender or any other Person, Borrower shall make all Borrower Loan Payments, including Additional Payments and Issuer Payments when due and shall not withhold any Borrower Loan Payments, including Additional Payments and Issuer Payments pending final resolution of such dispute, nor shall Borrower

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assert any right of set-off or counterclaim against its obligation to make such payments required under this Agreement.

Section 2.08. Prepayments.

(a) Amounts outstanding under the Note may be prepaid in whole or in part, at Borrower's option, provided Borrower has given Lender not less than five (5) Business Days prior written notice of Borrower's intention to make such prepayment and pays to Lender the Prepayment Amount, if any due as a result. The Prepayment Amount shall be paid, if Lender, for any other reason, including acceleration or foreclosure, receives all or any portion of the principal of the Note prior to the end of the then current Interest Period. For the avoidance of doubt, except as set forth in Section 2.08(b) below, no Prepayment Amount shall be due as a result of a prepayment of any amount outstanding under the Note unless such prepayment is made before the end of an Interest Period.

(b) Borrower shall prepay the Borrower Loan and the Note in whole or in part at any time pursuant to Article X hereof by paying the applicable Prepayment Amount together with any Additional Payments and Issuer Payments then due.

(c) Borrower shall prepay the Borrower Loan and the Note in full immediately upon written demand of Lender after the occurrence and during the continuance of an Event of Default by paying the entire outstanding Principal and Interest on the Borrower Loan together with any Additional Payments and Issuer Payments then due.

(d) Borrower shall prepay the Borrower Loan and the Note in full within thirty (30) days upon demand of either Lender or Issuer after the occurrence of an Event of Taxability by paying the applicable Prepayment Amount plus an amount necessary to supplement the prior Borrower Loan Payments to the Gross-Up Rate together with any Additional Payments and Issuer Payments then due.

(e) Borrower shall prepay the Borrower Loan and the Note in full on the Prepayment Date, in accordance with Section 2.05(i).

(f) Upon any prepayment in part of any of the Borrower Loan, the prepayment shall be applied first to interest accrued on the Borrower Loan and next to the principal portion of the Borrower Loan Payments in the inverse order of maturity. Any prepayment in part of the Borrower Loan and interest thereon shall be applied by Lender to prepay the corresponding portion of the Issuer Loan and interest thereon.

(g) The covenants made by Borrower in the Tax Regulatory Agreement and Borrower's obligations hereunder shall survive the termination of this Agreement, the payment in full of the Note and any payment by Borrower hereunder.

(h) Borrower and Lender hereby agree that any interest rate swap transaction entered into between Borrower and Lender in connection with the Borrower Loan shall, upon the making of any prepayment of amounts outstanding under the Borrower Loan, be

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terminated as and to the extent more particularly provided in the documents and agreements evidencing such interest rate swap transaction. Any amounts (which may be substantial) payable by Borrower to Lender or by Lender to Borrower in respect of such full or partial termination of such interest rate swap transaction shall be determined under the terms and conditions of the documents and agreements evidencing such interest rate swap transaction and are separate from and independent of any amounts which may be payable under this Loan Agreement. Borrower hereby acknowledges and agrees that unless Lender, in its sole discretion, otherwise consents, any amount which may be payable by Lender to Borrower in respect of such full or partial termination of such interest rate swap transaction shall be applied to reduce the principal amount outstanding under the Borrower Loan (with application to payments due in the inverse order of their maturity) after first satisfying all accrued but unpaid interest and prepayment fees, if any, on the amount prepaid.

Section 2.09. Limited Obligations of Issuer. The Issuer Loan, as provided herein, together with premium, if any, and interest thereon, shall not be deemed to constitute a debt, liability or general obligation of the State or any agency or instrumentality of the State or the lending of credit of the State or any political subdivision thereof or a pledge of the faith and credit or taxing power of the State or any agency or instrumentality of the State, but shall be payable solely from the funds provided therefor pursuant to this Agreement. The Issuer Loan, as provided herein, is only a special, limited obligation of Issuer as provided by the Act, and Issuer shall under no circumstances be obligated to pay the principal of, premium, if any, or interest on the Issuer Loan as provided herein, or other costs incident thereto except from Borrower Loan Payments under the Borrower Loan. Neither the State nor any agency or instrumentality of the State is in any manner obligated to make any appropriation for such payments. No tax funds or governmental revenue may be used to pay the principal of, premium, if any, or interest on the Issuer Loan. The Issuer has no taxing powers.

Section 2.10. Additional Payments and Issuer Payments. Borrower shall pay to Lender the following "Additional Payments" in addition to the Borrower Loan Payments payable by Borrower: such amounts incurred by Lender after the Closing Date as shall be required by Lender in payment of any reasonable costs and expenses incurred in connection with the enforcement of the Loan Documents following any default by Borrower hereunder, including but not limited to: (a) indemnification payments pursuant to Section 8.03 and 8.13 hereof; (b) the reasonable fees and expenses of such accountants, consultants, attorneys and other experts as may be engaged by Lender to prepare audits, financial statements, reports or opinions or to provide such other services required under the Loan Documents, or otherwise in connection with the enforcement of the Borrower Loan and the Issuer Loan following such default; (c) insurance premiums not paid by Borrower hereunder; and (d) all other reasonable, direct and necessary administrative costs of Lender and such other charges required to be paid in order to enforce its rights under this Agreement following such default.

Borrower shall pay to Issuer the following "Issuer Payments": (a) all taxes and assessments of any type or character charged to the Issuer affecting the amount available to the Issuer from payments to be received hereunder or in any way arising due to the transactions contemplated hereby (including taxes and assessments assessed or levied by any public agency

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or governmental authority of whatsoever character having power to levy taxes or assessments) but excluding any taxes based upon the capital and/or income of any person other than the Borrower; provide, however, that the Borrower shall have the right to protest any such taxes or assessments assessed or levied upon it and that the Borrower shall have the right to withhold payment of any such taxes or assessments pending disposition of any such protest or contest for which Borrower maintains adequate reserves in accordance with GAAP unless such withholding, protest or contest would materially adversely affect the rights or interests of the Issuer; (b) the reasonable fees and expenses of such accountants, consultants, attorneys and other experts as may be engaged by the Issuer to prepare audits, financial statements or opinions or provide such other services as are reasonably required under or in connection with the Loan Documents; (c) the annual fee of the Issuer in the amount of $1,000, so long as the principal amount of the Borrower Loan outstanding is equal to or greater than $10,000,000 and $500, so long as the principal amount of the Borrower Loan outstanding is less than $10,000,000.00, which annual fee shall be payable on July 1 of each year in which the Borrower Loan is outstanding, commencing July 1, 2011; (d) reasonable expenses of the Issuer and any consultant, agent or designee selected by the Issuer to act on its behalf in connection with the Loan Documents or any other document or certificate contemplated hereby or thereby, including without limitation reasonable expenses incurred by attorneys (including attorneys who are employees of the Issuer) representing the Issuer in connection with any questions, claims or controversy arising under the Loan Documents; and (e) such amounts as may be necessary to satisfy the rebate requirements in accordance with the Tax Regulatory Agreement and to pay the cost of calculation of such rebate requirements and other amounts payable in accordance with the terms of the Tax Regulatory Agreement.

Such Additional Payments and Issuer Payments shall be billed to Borrower by Lender and Issuer, respectively, as the case may be, from time to time, together with a statement certifying that the amount so billed has been paid for one or more of the items described, or that such amount is then payable for such items. Amounts so billed shall be due and payable by Borrower within 30 days after receipt of the bill by Borrower.

Section 2.11. Security. The obligations of Borrower to make the Borrower Loan Payments required under this Article II and to make other payments to Lender in accordance with the Loan Documents and to perform and observe the covenants and agreements contained herein for the benefit of Lender shall be secured pursuant to the Deed of Trust creating a lien on the Property and the Project and the other collateral described the Deed of Trust (collectively, the "Collateral").

Section 2.12. Recording of Real Estate Instruments. The Borrower shall, at its expense, record the Deed of Trust and all amendments thereto in the Official Records of the Office of the County of Los Angeles, California. Within 10 days after request for any confirmation of any filing required by this Section, the Borrower shall deliver to Lender the signed documents requested or evidence satisfactory to Lender to the effect that such filing has been duly accomplished. The Borrower shall file such financing statements as may be necessary to perfect Lender's security in a form satisfactory to Lender. The Borrower hereby authorizes Lender to file any such financing statements without the signature of the Borrower.

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Section 2.13. Reserved

Section 2.14. Establishment of Project Fund.

Borrower shall establish a special fund with Lender designated as the "Troy-CSL Lighting, Inc. Project Fund" (the "Project Fund"). Lender shall keep such Project Fund separate and apart from all other funds and moneys held by it and shall administer such Project Fund as provided in this Loan Agreement.

Subject to Borrower's prior satisfaction of all applicable conditions to disbursement set forth in Section 4 of the Construction Loan Agreement, Lender shall disburse the moneys in the Project Fund to pay Qualified Costs, upon receipt with respect thereto of a Project Fund Requisition in the form attached hereto as Exhibit F-2, executed by Borrower, fully completed and with supporting documents attached thereto. Lender may conclusively rely upon the signed Project Fund Requisition and shall not be responsible to review the supporting documents attached thereto. Upon receipt of a Project Fund Requisition with respect to any portion of the costs of issuance, an amount equal to the Qualified Costs as shown therein shall be paid directly to the person or entity entitled to payment as specified therein. Any moneys remaining in the Project Fund on June 1, 2011 shall be transferred to the Lender and applied towards the next Scheduled Payment Date.

ARTICLE III

CONDITIONS PRECEDENT

Lender's agreement to make the Issuer Loan hereunder and to disburse the Loan Proceeds to the Borrower shall be subject to the condition precedent that Lender and Issuer shall have received all of the following, each in form and substance satisfactory to Lender and Issuer:

(a) this Agreement, properly executed on behalf of Issuer, Borrower and Lender, and each of the Exhibits hereto properly completed;

(b) the Tax Regulatory Agreement, properly executed on behalf of Issuer, Borrower and Lessee;

(c) the Note, properly executed on behalf of Borrower;

(d) the Endorsement and Assignment of the Note, properly executed on behalf of the Issuer;

(e) the Acknowledgment of Endorsement and Assignment of the Note, properly executed on behalf of the Borrower;

(f)

(g) Lender;

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the Deed of Trust, properly executed on behalf of Borrower;

the Troy Guaranty Agreement, properly executed by the Lessee in favor of

21

(h) the Littman Guaranty Agreement, properly executed by the Individual Guarantor in favor of Lender;

(i) the Environmental Indemnity, properly executed on behalf of Borrower;

(j) the Lease Agreement, properly executed on behalf of Borrower and Lessee;

(k) a Subordination Agreement in form acceptable to Lender executed by Lender and the Lessee;

(1) certificate of Borrower, certifying as to (i) the resolutions of the members of Borrower, authorizing the execution, delivery and performance of the Loan Documents and any related documents, (ii) the operating agreement of Borrower, and (iii) the signatures of the officers or agents of Borrower authorized to execute and deliver the Loan Documents and other instruments, agreements and certificates on behalf of Borrower;

(m) currently certified copies of the Articles of Organization of Borrower;

(n) a certificate of good standing issued as to Borrower by the Secretary of State of the state of Borrower's organization to be dated not more than 25 days prior to the Closing Date;

( o) a certificate of good standing or exemption issued as to Borrower and Lessee by the Franchise Tax Board of the State of the State of California to be dated not more than 25 days prior to the Closing Date;

(p) certificate of Lessee, certifying as to (i) the resolutions of the board of directors of Lessee, authorizing the execution, delivery and performance of the Loan Documents and any related documents, (ii) the Bylaws of Lessee, and (iii) the signatures of the officers or agents of Lessee authorized to execute and deliver the Lease Agreement, the Troy Guaranty Agreement, the Subordination Agreement and other instruments, agreements and certificates on behalf of Lessee;

( q) a certificate of good standing issued as to Lessee by the Secretary of State of the state of Lessee's organization to be dated not more than 25 days prior to the Closing Date;

(r) a certificate of good standing or exemption issued as to Lessee by the Franchise Tax Board of the State of the State of California to be dated not more than 25 days prior to the Closing Date;

(s) a certificates of the insurance required hereunder;

(t) an ALTA extended coverage loan policy of title insurance (2006 policy form) with coverage in an amount equal to the initial principal amount of the Borrower Loan, with reinsurance and endorsements as Lender may require, containing no

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exceptions to title (printed or otherwise) which are unacceptable to Lender, and insuring that the Deed of Trust is a first-priority lien on the Property and related collateral;

(u) current Site Assessment and Appraisal, each which has been completed and approved by Lender;

(v) a completed and executed Form 8038 or evidence of filing thereof with the Internal Revenue Service;

(w) evidence that the financing of the Project has been approved by the "applicable elected representative" of the City of Industry after a public hearing held upon reasonable notice and that such financing of the Project has been approved for purposes of the Act;

(x) a resolution adopted by the Issuer authorizing the Borrower Loan and the Issuer Loan and the transactions contemplated hereunder;

(y) a closing certificate of Issuer;

(z) an opinion of counsel to Borrower, addressed to Lender and Issuer, in the form attached hereto as Exhibit A;

(aa) an opinion of counsel to Issuer, addressed to Issuer and Lender, in form and substance acceptable to Lender and Issuer;

(bb) an opinion of special counsel, addressed to Issuer and Lender, in form and substance acceptable to Issuer and Lender;

( cc) payment of Lender's fees required by Section 2.03 hereof;

( dd) payment of Issuer's fees and expenses, including, but not limited to, the fees and expenses of Issuer's counsel, incurred in connection with this Agreement and the transactions contemplated hereby;

(ee) an investor letter of representation executed by Lender and addressed to Issuer, in the form attached hereto as Exhibit B-1; and

(ff) any other documents or items required by Lender or Issuer.

ARTICLE IV

REPRESENTATIONS, WARRANTIES AND COVENANTS OF ISSUER

Issuer represents, warrants and covenants for the benefit of Lender and Borrower, as follows:

(a) The Issuer is a public entity duly organized and validly existing under the laws of the State. Under the provisions of the Act, the Issuer has the power to enter into

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the transactions contemplated by this Agreement and to carry out its obligations hereunder. By proper action, the Issuer has been duly authorized to execute, deliver and duly perform its obligations under the Issuer Documents.

(b) Issuer has duly authorized the execution and delivery of the Issuer Documents under the terms and provisions of the resolution adopted by its Board of Directors, and further represents, covenants and warrants that all requirements have been met and procedures have occurred in order to ensure the enforceability against Issuer of the Issuer Documents. Issuer has taken all necessary action and has complied with all provisions of the Act, including but not limited to the making of the findings required by the Act, required to make the Issuer Documents the valid and binding obligations of Issuer.

(c) The Issuer Documents are valid and binding obligations of Issuer, enforceable in accordance with their respective terms, except to the extent limited by bankruptcy, reorganization or other laws of general application relating to or affecting the enforcement of creditors' rights, to the application of equitable principles and to the limitations on enforcement remedies against public entities in the State.

(d) Issuer has assigned to Lender all of Issuer's rights (except Retained Rights) in the Project, this Agreement, the Note, the Borrower Loan Payments and any other documents executed by Borrower except the Tax Regulatory Agreement (other than Issuer Payments), including the assignment of all rights in the security interest granted to Issuer by Borrower.

(e) None of the execution and delivery of the Issuer Documents, the consummation of the transactions contemplated hereby or thereby or the fulfillment of or compliance with the terms and conditions of the Issuer Documents to which Issuer is a party violates any law, rule, regulation or order, conflicts with or results in a breach of any of the terms, conditions or provisions of any restriction or any agreement or instrument to which Issuer is now a party or by which it is bound or constitutes a default under any of the foregoing or results in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of Issuer under the terms of any instrument or agreement.

(f) To the best of Issuer's knowledge, there is no action, suit, proceeding, claim, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body pending or threatened against or affecting Issuer, challenging Issuer's authority to enter into the Issuer Documents or any other action wherein an unfavorable ruling or finding would adversely affect the enforceability of the Issuer Documents, or the exclusion of the Interest from gross income for federal tax purposes under the Code, or would materially and adversely affect any of the transactions contemplated by this Agreement.

(g) Issuer will submit or cause to be submitted to the Internal Revenue Service a Form 8038 (or other information reporting statement) at the time and in the form required by the Code.

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(h) To the best knowledge of Issuer, no member, officer or other official of the Issuer has any financial interest whatsoever in the Borrower or in the transactions contemplated by this Agreement.

ARTICLEV

REPRESENTATIONS, WARRANTIES ANDCOVENANTSOFBORROWER

Section 5.01. General. Borrower represents, warrants and covenants for the benefit of Lender and Issuer, as follows:

(a) Borrower is a limited liability company, duly organized, validly existing and in good standing under the laws of the State, is not in violation of any provision of any of its articles of incorporation or bylaws or other organic documents, has full power and authority to enter into the Loan Documents and, by proper corporate action, has duly authorized the execution and delivery of the Loan Documents. Borrower has for the previous two years (except as previously disclosed to Lender in writing) had the legal name and form of business organization in the state described above. Borrower is and shall remain in good standing and is and shall remain duly licensed or qualified to transact business in the State and in all jurisdictions where the character of the property owned or leased or the nature of the business transacted by it makes such licensing or qualification necessary except for jurisdictions in which the failure to so qualify would not have a material adverse effect on Borrower's financial condition, results or operation.

(b) Borrower's chief executive office and notice address, taxpayer identification number and any organizational identification number are as described with its execution of this Agreement below.

(c) Borrower has been fully authorized to execute and deliver the Loan Documents under the terms and provisions of the resolution of Borrower and further represents, covenants and warrants that all requirements have been met and procedures have occurred in order to ensure the enforceability of the Loan Documents and the Loan Documents have been duly authorized, executed and delivered.

(d) The Authorized Representative of Borrower executing the Loan Documents and any related documents is duly and properly in office and has been duly authorized to execute and deliver the Loan Documents and such related documents under the terms and provisions of a resolution of Borrower.

(e) The Loan Documents constitute valid and legally binding obligations of Borrower, enforceable against Borrower in accordance with their respective terms, except to the extent limited by bankruptcy, insolvency, reorganization, moratorium or other laws and equitable principles of general application relating to or affecting the enforcement of creditors' rights.

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(f) The execution and delivery of the Loan Documents, the consummation of the transactions contemplated hereby and thereby and the fulfillment of the terms and conditions hereof and thereof do not and will not (i) violate any law, rule, regulation or order if such violation would have a material adverse effect on the Borrower, its properties and assets, or its financial condition, (ii) conflict with or result in a breach of any of the terms or conditions of the articles of incorporation or bylaws of Borrower or of any corporate restriction or of any agreement or instrument to which Borrower is now a party and do not and will not constitute a default (or would constitute a default with due notice or the passage of time or both) under any of the foregoing or (iii) result in the creation or imposition of any liens, charges or encumbrances of any nature upon any of the property or assets of Borrower contrary to the terms of any instrument or agreement.

(g) The authorization, execution, delivery and performance of this Agreement by Borrower do not require submission to, approval, authorization or consent of (except such consents, authorizations or approvals as have been obtained), or other action by any governmental, public or quasi-public body or authority or agency of the United States or of any state or any department or subdivision thereof other than that which has been obtained and routine filings, approvals and actions taken and obtained in the ordinary course of business.

(h) There is no action, suit, proceeding, claim, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body pending or, to the best of Borrower's knowledge, threatened against or affecting Borrower, challenging Borrower's authority to enter into the Loan Documents to which Borrower is a party or any other action wherein an unfavorable ruling or finding would adversely affect the enforceability of the Loan Documents or any other transaction of Borrower which is similar hereto, or the exclusion of the Interest from gross income for federal tax purposes under the Code, or would materially and adversely affect any of the transactions contemplated by this Agreement or any of the other Loan Documents.

(i) No event or condition that constitutes, or with the giving of notice or the lapse of time or both would constitute, an Event of Default exists at the Closing Date.

(j) The Property and Project are properly zoned for their current and anticipated use and the use of the Property and Project will not violate in any material respects any applicable zoning, land use, environmental or similar law or restriction. Borrower has or will obtain, or caused or will cause to be obtained, in due course all licenses and permits to use the Project.

(k) No condemnation has been commenced or, to Borrower's knowledge, is contemplated with respect to all or any portion of the Project or for the relocation of roadways providing access to the Project.

(1) The Property has adequate rights of access to public ways and is served by adequate water, sewer, sanitary sewer and storm drain facilities. All access to public utilities necessary to the use and enjoyment of the Property are located in the public right­of-way abutting the Property, and all such utilities are connected so as to serve the

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Property without passing over other property, except to the extent such other property is subject to a perpetual easement for such utility benefiting the Property. All roads necessary for the full utilization of the Project for its current purpose have been completed and dedicated to public use and accepted by all governmental authorities.

(m) The Project is used by the Borrower and Lessee, and Borrower and Lessee will be the exclusive operator, manager and "principal user" of the Project for federal income tax purposes, except as otherwise permitted under Section 5.01(bb).

(n) The Project consists and will consist of those facilities described in Exhibit A and the Borrower shall not make any changes to the Project or to the operation thereof which would affect the qualification of the Project under the Act or would cause interest on the Issuer Loan not to be tax-exempt until the principal of, premium, if any, and interest on the Issuer Loan has been paid. The Borrower intends to own the Project and cause the Lessee to operate the Project. The Borrower covenants and agrees to operate the Project or cause the Project to be operated in accordance with the limitations specified in the Tax Regulatory Agreement until the principal of, the premium, if any, and the interest on the Borrower Loan shall have been paid.

( o) Borrower will not take any action that would cause the Interest to become includable in gross income of the recipient for federal income tax purposes under the Code (including, without limitation, intentional acts under Treas. Reg. § 1.148-2(c) or deliberate action within the meaning of Treas. Reg.§ 1.141-2(d)), and Borrower will take and will cause its officers, employees and agents to take all affirmative actions legally within its power necessary to ensure that the Interest does not become includable in gross income of the recipient for federal income tax purposes under the Code (including, without limitation, the calculation and payment of any rebate required to preserve such exclusion).

(p) Borrower has heretofore furnished to Lender the complete financial statements of Borrower for its fiscal year ended December 31, 2009, and those statements fairly present in all material respects the financial condition of Borrower on the dates thereof and the results of its operations and cash flows for the periods then ended and were prepared in accordance with GAAP. Since the date of the most recent financial statements, there has been no material adverse change in the business, properties or condition (financial or otherwise) of Borrower.

( q) Borrower has kept, and until payment in full of all of the obligations of Borrower owing to Lender or Issuer pursuant to any of the Loan Documents, shall keep, its books and records in accordance with GAAP, and shall deliver to Lender (i) all financial statements, tax returns and other information required under Section 8.01 and (ii) such other financial statements and information as Lender may reasonably request. Credit information relating to Borrower may be disseminated among Lender and any of its affiliates and any of their respective successors and assigns. Borrower shall not change its fiscal year without the prior written consent of Lender.

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(r) Borrower is solvent, able to pay its debts as they become due, and has sufficient capital to carry on its business and all businesses in which it is engaged or is about to engage.

(s) Borrower is not in default under the terms of any covenant, indenture or agreement of or affecting Borrower or any of its respective properties or any of the Collateral, which default if uncured could reasonably be expected to have or result in a material adverse effect on Borrower, its properties or assets, its financial condition or results of operation.

(t) Borrower has paid or caused to be paid to the proper authorities when due all federal, state and local taxes required to be withheld by it other than those taxes which are being contested in good faith and for which Borrower maintains adequate reserves in accordance with GAAP. Borrower has filed all federal, state and local tax returns which are required to be filed, and Borrower has paid or caused to be paid to the respective taxing authorities all taxes as shown on said returns or on any assessment received by it to the extent such taxes have become due other than those taxes which are being contested in good faith and for which Borrower maintains adequate reserves in accordance with GAAP.

(u) Borrower has or will have good title to the Project and the Property and all proceeds thereof, free and clear of all mortgages, security interests, liens and encumbrances (i) subject to the terms of Section 3.4 of the Deed of Trust and (ii) except for the security interest created pursuant to this Agreement, the liens created pursuant to the Deed of Trust and the Permitted Encumbrances.

(v) All financial and other information (other than projections and forward looking statements), exhibits and reports provided to Lender and Issuer by or on behalf of Borrower in connection with Borrower's request for the Borrower Loan contemplated hereby and the negotiation of this Agreement or any other Loan Document are true and correct in all material respects and Borrower has not failed to provide Lender or Issuer with any information which Borrower believes would be material to Lender's or Issuer's decision to enter into this Agreement and, as to projections, valuations or pro forma financial statements, present a good faith opinion as to such projections, valuations and pro forma condition and results; it being understood that any projections and forward looking statements are based on Borrower's good faith opinion and estimates as of the Closing Date, but no assurances may be given as to actual performance, results or outcomes which may differ materially from such projections and forward looking statements.

(w) Borrower will aid and assist Issuer in connection with preparing and submitting to the Internal Revenue Service a Form 8038 (or other applicable information reporting statement) at the time and in the form required by the Code.

(x) Borrower will comply fully at all times with the Tax Regulatory Agreement, and Borrower will not take any action, or omit to take any action, which, if taken or omitted, respectively, would violate the Tax Regulatory Agreement, and the

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information, representations and warranties contained in the Tax Regulatory Agreement are true and correct. The estimated cost of the Project is as set forth in the Tax Regulatory Agreement and has been determined in accordance with sound engineering, construction, and accounting principles.

(y) The Loan Proceeds will be used only to pay Qualified Costs in connection with the Project, which at all times shall consist of land or property that is subject to the allowance for depreciation provided in Section 167 of the Code, and substantially all (95% or more) of the Borrower Loan (including interest earned on the Project Fund and any other proceeds of investment thereof), shall be used to pay Qualified Costs chargeable to the capital account of a Borrower under GAAP, and which were paid not earlier than 60 days before February 5, 2010 (unless eligible for reimbursement under United States Treasury Regulation §1.150-2(t)(2)). The Borrower shall allocate the Loan Proceeds to Qualified Costs no later than 18 months after the later of the date the original expenditure is paid or the date the Project is placed in service or abandoned, but in no event more than three years after the original expenditure is paid.

(z) Expenses for work done by officers or employees of Borrower in connection with the Project will be included as a cost of the Project, if at all, only to the extent (i) such persons were specifically employed for such particular purpose, (ii) the expenses do not exceed the actual cost thereof and (iii) such expenses are treated or capable of being treated (whether or not so treated) on the books of Borrower as a capital expenditure in conformity with the GAAP applied on a consistent basis.

(aa) No part of the Loan Proceeds will be used to refinance inventory or will be used for working capital or to finance any other cost not constituting a cost of the Project or a Cost of Issuance.

(bb) The Borrower shall occupy all rentable portions of the Property itself or use its best efforts to keep all rentable portions of the Property not so occupied leased to others. Except as otherwise permitted in this Section 5.01(bb), the Borrower shall maintain the mix of tenants such that the portion of the net rentable area of the building located on the Property occupied by itself and Lessee and any of their respective Affiliates is at all times fifty percent (50%) or more of the total net rentable area of the building located on the Property (such occupancy defined herein as "Owner-Occupied").

The Borrower shall have the right to reduce the percentage of the Property occupied by itself and Lessee to less than that required to qualify as Owner-Occupied, subject to satisfaction of each of the following conditions, as determined by Lender in its sole discretion, reasonably exercised:

(i) Prior Written Notice. Lender shall have received not less than ninety (90) days prior written notice from the Borrower of its desire to lease, together with Lessee, less than fifty percent (50%) of the total net rentable area of the Property, which notice shall identify the portion(s) of the Property which the Borrower and/or Lessee no longer desires to occupy such that the Property would no longer qualify as Owner-Occupied ("Borrower's Notice"), provided, however, that the Borrower shall not

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terminate, modify, amend or otherwise alter or change in any way any lease with Lessee, the effect of which would cause the Property to no longer qualify as Owner-Occupied, until such time as Lender has consented in writing to such termination, modification, amendment, alteration or change, which Lender shall have no obligation to do unless and until the conditions set forth in this Section 5.01(bb) have been satisfied, as determined by Lender in its sole discretion, reasonably exercised;

(ii) Lender's Approval of New or Replacement Leases. Concurrently with the Borrower's delivery of Borrower's Notice to Lender, the Borrower shall provide Lender with copies of all proposed new or replacement leases (individually, "Replacement Lease", and collectively "Replacement Leases"), the effect of which, if entered into by the Borrower and upon the commencement of the term( s) thereof, would result in the Property no longer qualifying as Owner-Occupied, for Lender's review and written approval;

(iii) No Default. As of the date of Borrower's Notice and as of the commencement date of any Replacement Lease, no default or Event of Default shall then exist, or would exist with the giving of notice or the passage of time, or both, under this Agreement or any of the other Loan Documents;

(iv) Debt Service Coverage Ratio. As of the date on which any Replacement Lease commences (provided such Replacement Lease has been approved in writing by Lender), the Property shall have a Debt Service Coverage Ratio of not less than 1.25 to 1.00 based on Stabilized Occupancy and 1.00 to 1.00 based on Actual Occupancy (as defined in subparagraph 2.1 below);

(v) Loan to Value Ratio. As of the date on which any Replacement Lease commences, the Loan to Value Ratio for the Property shall not exceed fifty percent (50%);

(vi) Maximum Loan Amount. As of the date on which any Replacement Lease commences, the outstanding principal balance of the Borrower Loan shall not exceed Seven Million Dollars ($7,000,000) (the "Maximum Loan Amount");

(vii) No Material Adverse Change. As of the date of Borrower's Notice and as of the date on which any Replacement Lease commences: (A) there shall have been (1) no material change in the Property's physical condition from that which existed as of the Closing Date, and (2) no material deterioration in the fmancial condition of the Borrower, the Lessee or the Individual Guarantor from that which existed as of the Closing Date, and (ii) the Borrower shall have delivered, or cause to be delivered, all financial statements and other documents requested by Lender in order for Lender to make the foregoing determinations regarding the Borrower's, Lessee's and the Individual Guarantor's financial condition; and

(viii) Fees, Costs and Expenses. Lender shall have received payment of all fees, costs and expenses, including attorney's fees and the allocated costs of Lender's in-house counsel and legal staff, incurred by Lender in connection with the review of any

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Replacement Lease and the determination of the Debt Service Coverage Ratios set forth in clause (iv) above and the Loan Value Ratio set forth in clause (v) above.

In no event shall Lender have any obligation to grant the Borrower's request to enter into a Replacement Lease, the effect of which would cause the Property to no longer qualify as Owner-Occupied, if (i) the Debt Service Coverage Ratios are less than, or the Loan to Value Ratio is greater than, the ratios set forth above, (ii) the outstanding principal balance of the Borrower Loan exceeds the Maximum Loan Amount, or (iii) any other condition set forth above is not complied with to the satisfaction of Lender in its sole discretion, reasonably exercised. In the event the Debt Service Coverage Ratios or the Loan to Value Ratio set forth above are not satisfied, or the outstanding principal balance of the Borrower Loan exceeds the Maximum Loan Amount, the Borrower shall have the right to partially prepay the Borrower Loan in accordance with terms hereof in order to satisfy the foregoing requirements. To assist Lender in determining the Debt Service Coverage Ratios, the Borrower shall provide Lender with current certified operating statements for the Property showing all elements of income and expense related to the operation of the Property during the relevant time period, together with a current certified rent roll.

In the event Bank approves a Replacement Lease the effect of which would cause the Property to no longer qualify as Owner-Occupied, the Applicable Margin shall be increased by fifty basis points, or one-half of one percent (0.50% ), effective as of the first Scheduled Payment Date following the date on which such Replacement Lease commences.

( cc) The Project (other than the Property) is property of the character subject to the allowance for depreciation under Section 167 of the Code.

(dd) To the best of Borrower's knowledge, after due inquiry, (i) the Project and the operation thereof comply in all material respects with all legal requirements, including that all requisite certificates of occupancy, building permits, and other licenses, certificates, approvals or consents required of any governmental authority have been or will be issued without variance or condition, and (ii) there is no litigation, action, citation, injunctive proceedings, or like matter pending or, to the Borrower's knowledge, threatened with respect to the validity of such matters.

(ee) No adverse zoning or usage change proceeding has occurred or, to the Borrower's knowledge, has been threatened against the Property; the Property has not suffered any significant damage by fire or other casualty which has not been repaired in all material respects; no law, regulation, ordinance, moratorium, injunctive proceeding, restriction, litigation, action, citation or similar proceeding or matter has been enacted, adopted, or, to Borrower's knowledge, threatened by any governmental authority, which will have a material adverse effect on Borrower or the Project.

(ff) Borrower is in compliance in all material respects with all applicable provisions of the Employee Retirement Income Security Act of 1974, as amended or recodified from time to time ("ERISA"); Borrower has not violated any provision of any

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defined employee pension benefit plan (as defined in ERISA) maintained or contributed to by Borrower (each, a "Plan"); no Reportable Event as defined in ERISA has occurred and is continuing with respect to any Plan initiated by Borrower; Borrower has met its minimum funding requirements under ERISA with respect to each Plan; and each Plan will be able to fulfill its benefit obligations as they come due in accordance with the Plan documents and under generally accepted accounting principles.

(gg) There are no material contracts or agreements (either oral or written) affecting the Collateral or the Property, including, without limitation, leases, tenancies or other contracts or agreements relating to the maintenance, development or management thereof, except as previously disclosed to Lender in writing.

(hh) Except as disclosed by Borrower to Lender in writing prior to the Closing Date, with respect to any Collateral:

(i) All taxes, governmental assessments, insurance premiums, and water, sewer and municipal charges, and rents (if any) which previously became due and owing in respect thereof have been paid as of the Closing Date other than those which are being contested in good faith and for which Borrower maintains adequate reserves in accordance with GAAP.

(ii) There are no mechanics' or similar liens or claims which have been filed for work, labor or material (and no rights are outstanding that under law could give rise to any such lien) which affect all or any interest in the Property and which are equal or may be prior to the lien thereon in favor of Lender as of the Closing Date.

(iii) None of the improvements which were included for purpose of determining the appraised value of any such real property lies outside of the boundaries and/or building restriction lines thereof, and no improvements on adjoining properties materially encroach upon any such real property.

(ii) The Project is consistent with any existing local or regional comprehensive plans.

(jj) The information contained in the Borrower's application for financing to the Issuer is true and accurate in all material respects.

(kk) To the extent Borrower Loan proceeds are used for construction purposes, the Borrower shall certify that the contractors engaged to construct the Project are properly licensed by the Contractors' State License Board.

(ll) The Project shall comply in all material respects with the requirements of the Act and other applicable State laws, and Borrower is in compliance with the requirements of all federal, state and local laws, rules and regulations applicable to or pertaining to the Project, its property or business operations (including, without limitation, the Occupational Safety and Health Act of 1970, the Americans with

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Disabilities Act of 1990 and Environmental Laws), non-compliance with which, individually or in the aggregate, could reasonably be expected to have or result in a material adverse change on Borrower, its financial condition, its properties or other assets. Borrower has not received notice to the effect that its operations are not in compliance with any of the requirements of applicable federal, state or local relating to the Project or any Environmental Laws.

(mm) Borrower agrees to retain all records established pursuant to the requirements of this Agreement until four years after the earlier of (i) the repayment of the Borrower Loan and (ii) the Maturity Date.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF LENDER

Lender represents and warrants for the benefit of Issuer and Borrower, that Lender is a national banking association, has power to enter into the Loan Documents to which Lender is a party and by proper corporate action has duly authorized the execution and delivery of the Loan Documents to which Lender is a party.

ARTICLE VII

TITLE TO PROJECT

Section 7.01. Change in Name or Corporate Structure of Borrower; Change in Location of Borrower's Principal Place of Business. Borrower's chief executive office is located at the address set forth on the first page hereof, and all of Borrower's records relating to its business are kept at such location or at the Property. Borrower hereby agrees to provide written notice to Lender and Issuer of any change or proposed change in its name, corporate structure, state of its incorporation or organization, place of business or chief executive office. Such notice shall be provided 30 days in advance of the date that such change or proposed change is planned to take effect.

Section 7.02. Liens and Encumbrances to Title. Borrower shall not, directly or indirectly, create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect to the Project or the Property (together, "Liens") other than (i) as set forth in Section 3.4 of the Deed of Trust, (ii) the rights of Lender or Issuer as herein provided and (iii) the Permitted Encumbrances. Subject to Section 3.4 of the Deed of Trust, Borrower shall promptly, at its own expense, take such action as may be necessary duly to discharge or remove any such Lien. Borrower shall reimburse Lender for any expenses incurred by Lender to discharge or remove any Lien.

Section 7.03. Assignment of Insurance. As additional security for the payment and performance of Borrower's obligations hereunder, Borrower hereby assigns to Lender, as assignee of Issuer, any and all moneys (including, without limitation, proceeds of insurance and refunds of unearned premiums) due or to become due under, and all other rights of Borrower with respect to, any and all policies of insurance now or at any time hereafter covering the

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Project or any evidence thereof or any business records or valuable papers pertaining thereto, and Borrower hereby directs the issuer of any such policy to pay all such moneys directly to Lender. Borrower hereby assigns to Lender, as assignee of Issuer, any and all moneys due or to become due with respect to any condemnation proceeding affecting the Project. At any time, whether before or after the occurrence of any Event of Default, Lender may (but need not), in Lender's name or in Borrower's name, execute and deliver proof of claim, receive all such moneys, endorse checks and other instruments representing payment of such moneys, and adjust, litigate, compromise or release any claim against the issuer of any such policy or party in any condemnation proceeding.

Section 7.04. Agreement as Financing Statement. To the extent permitted by applicable law, a carbon, photographic or other reproduction of this Agreement or of any financing statements is sufficient as a financing statement in any state to perfect the security interests granted in this Agreement. Pursuant to Section 5451 of the Government Code of the State of California, the pledge of Borrower Loan Payments by Issuer for the repayment of the principal of, premium, if any, and interest on the Issuer Loan constitutes a first lien and security interest which immediately attaches to such Borrower Loan Payments, and is effective and binding against Issuer, Borrower, their successors, creditors and all others asserting rights therein irrespective of whether those parties have notice of the pledge, irrespective of whether such amounts are or may be deemed to be a fixture and without the need for physical delivery, recordation, filing or further act.

ARTICLE VIII

AFFIRMATIVE COVENANTS OF BORROWER

So long as the Borrower Loan shall remain unpaid, Borrower will comply with the following requirements:

Section 8.01. Reporting Requirements. Borrower will deliver, or cause to be delivered, to Lender and to the Issuer if requested by the Issuer, each of the following, which shall be in form and detail reasonably acceptable to Lender and Issuer, as to information requested by Issuer:

(a) each year, a copy of Borrower's, Lessee's and Individual Guarantor's federal tax return for such year, not later than thirty (30) days after the filing thereof;

(b) promptly upon knowledge thereof, notice of the occurrence and nature of any Reportable Event or Prohibited Transaction, each as defined in ERISA, or any funding deficiency with respect to any Plan;

(c) promptly upon knowledge thereof, notice of any material loss or destruction of or damage to any portion of Project or of any material adverse change in any portion of the Project;

(d) promptly after the amending thereof, copies of any and all amendments to Borrower's articles of organization or operating agreement;

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(e) promptly upon receipt of knowledge thereof by an Authorized Borrower Representative, notice of the violation by Borrower of any law, rule or regulation, the violation of which would have a material adverse effect on the financial or operating condition of Borrower;

(f) notice of any termination or cancellation of any insurance policy which Borrower is required to maintain, or any uninsured or partially uninsured loss through liability or property damage, or through fire, theft or any other cause affecting Borrower's property;

(g) as promptly as practicable (but in any event not later than 5 Business Days) after an Authorized Borrower Representative obtains knowledge of the occurrence of any event that constitutes a Default or an Event of Default under the Loan Documents, notice of such occurrence, together with a detailed statement by an Authorized Borrower Representative of the steps being taken by Borrower to cure the effect of such Default or Event of Default;

(h) promptly upon knowledge thereof, any event or circumstance that is reasonably likely to cause or result in the Interest to be or to become ineligible for the exclusion from gross income of the owner or owners thereof for federal income tax purposes;

(i) promptly upon knowledge thereof, any material breach by any Person of any material contract affecting or with respect to the Project or any Collateral;

G) any litigation pending or threatened in writing against Borrower regarding the Project or that could reasonably be expected to result in liability to Borrower in excess of $50,000.00; and

(k) from time to time such other information as Lender may reasonably request, including, without limitation, other information with respect to any real property collateral required hereby.

In addition, Borrower will deliver, or cause to be delivered, to Lender and to Issuer, if requested by Issuer, each of the following, which shall be in form and detail reasonably acceptable to Lender or Issuer (such request, each and every time made, shall provide reasonable notice for Borrower to comply):

(1) not later than 120 days after and as of the end of each fiscal year, financial statements of Lessee, audited by independent certified public accountants selected by Borrower and reasonably acceptable to Lender and certified, without any qualifications, by such accountants to have been prepared in accordance with GAAP, with any exceptions thereto clearly documented. Such financial statements shall included a balance sheet, profit and loss statement and cash flow statement, and, if prepared, such accountants' letter to management;

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(m) as soon as available and in any event within 45 days after the end of each fiscal quarter, unaudited internal balance sheet and statements of income, retained earnings and cash flow (whether showing such titles or not) and changes in net worth of Lessee, as at the end of and for such fiscal quarter and for the year to date period then ended, in reasonable detail and stating in comparative form the figures for the corresponding date and periods in the previous year, all prepared in accordance with GAAP, with any exceptions thereto clearly documented, applied on a basis consistent with the accounting practices reflected in the financial statements referred hereof and certified by an authorized officer of Lessee;

(n) not later than 120 days after and as of the end of each fiscal year, unaudited internal balance sheet and statements of income, retained earnings and cash flow (whether showing such titles or not) and changes in net worth of Borrower, as at the end of and for such fiscal year to date period then ended, in reasonable detail and stating in comparative form the figures for the corresponding date and periods in the previous year, in form and detail reasonably acceptable to Lender;

(o) not later than 90 days after December 31 of each year, a personal financial statement for Individual Guarantor in form and detail reasonably acceptable to Lender; and

(p) such other financial statements or other information relating to Borrower and Lessee as Lender may reasonably request from time to time.

Section 8.02. Books and Records; Inspection and Examination. Borrower will keep accurate books of record and account for itself separate and apart from those of its Affiliates, including its officers, pertaining to the Project and pertaining to Borrower's business and financial condition and such other matters as Lender and/or Issuer may from time to time reasonably request in which true and complete entries will be made in accordance with GAAP consistently applied and, upon request of Lender not more than once per calendar year, at any time after the occurrence of an Event of Default or as often as Lender deems necessary to determine whether Borrower has complied with Environmental Laws, will permit any officer, employee, attorney or accountant for Lender and/or Issuer to audit, review, make extracts from, or copy any and all organization and financial books, records and properties of Borrower at all times during ordinary business hours, and to discuss the affairs of Borrower with any of its officers, employees or agents. Borrower will permit Lender, Issuer and their respective employees, accountants, attorneys or agents, to examine and copy any or all of its records and to examine and inspect the Project at any time during Borrower's business hours within 2 Business Days of Lender's or Issuer's request and at any time after the occurrence of an Event of Default.

Section 8.03. Payment of Taxes and Other Claims. Subject to Section 3.4 of the Deed of Trust, Borrower will (a) pay or discharge, when due, all taxes, assessments and governmental charges levied or imposed upon it or upon its income or profits, upon any properties belonging to it (including, without limitation, the Project) or upon or against the creation, perfection or continuance of the security interest created pursuant to this Agreement, prior to the date on which penalties attach thereto, (b) withhold all federal, state and local taxes required to be withheld by it, and (c) pay or discharge, when due, all lawful claims for labor, materials and

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supplies which, if unpaid, might by law become a lien or charge upon any properties of Borrower; provided, that Borrower shall not be required to pay any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings and for which Borrower maintains adequate reserves in accordance with GAAP. Borrower will pay, as the same respectively come due, all gas, water, steam, electricity, heat, power, telephone, utility and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Project.

Section 8.04. Maintenance of Project.

(a) Borrower shall, at its own expense, maintain, preserve and keep the Project in good repair, working order and condition, and shall from time to time make all repairs and replacements necessary to keep the Project in such condition, and in compliance in all material respects with state and federal laws, ordinary wear and tear excepted. Subject to Article X, in the event that any parts or accessories forming part of any item or items of Project become worn out, lost, destroyed, damaged beyond repair or otherwise rendered unfit for use, Borrower, at its own expense and expeditiously, will replace or cause the replacement of such parts or accessories by replacement parts or accessories free and clear of all liens and encumbrances (other than Permitted Encumbrances and as permitted under Section 3.4 of the Deed of Trust) and with a value and utility at least equal to that of the parts or accessories being replaced (assuming that such replaced parts and accessories were otherwise in good working order and repair). All such replacement parts and accessories shall be deemed to be incorporated immediately into and to constitute an integral portion of the Project and, as such, shall be subject to the terms of this Agreement. Lender shall have no responsibility in any of these matters, or for the making of improvements or additions to the Project.

(b) Subject to Section 3.4 of the Deed of Trust, Borrower will defend the Project against all claims or demands of all Persons (other than Lender and holders of Permitted Encumbrances) claiming the Project or any interest therein.

Section 8.05. Insurance. Borrower shall, at its own expense, maintain and keep in force insurance of the types and in amounts customarily carried in lines of business similar to that of Borrower, including but not limited to fire, extended coverage, flood (if Borrower's property is located in a flood zone), property damage in the amount equal to the full replacement cost of the Project), and during the construction of the Project, ); liability coverage of $11,325,000 and workers' compensation in the amount of $1,000,000 if Borrower has workers on the payroll, with all such insurance carried with companies satisfactory to Lender, and deliver to Lender from time to time at Lender's written request schedules setting forth all insurance then in effect. All policies of insurance (except those of public liability and property damage) pertaining to Lender's collateral shall contain a 438BFU lender's loss payable endorsement, or an equivalent endorsement in a form satisfactory to Lender, showing Lender as loss payee thereof, and shall contain a waiver of warranties, and shall specify that the insurer must give at least 10 days' prior written notice to Lender before canceling its policy for any reason. Borrower shall deliver to Lender certified copies of such policies of insurance and/or certificates of insurance. All proceeds payable under any such policy shall be payable as provided in Article X.

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Section 8.06. Preservation of Existence. Borrower will preserve and maintain its existence and all of its rights, privileges and franchises necessary in the normal conduct of its business; and shall conduct its business in an orderly, efficient and regular manner. Borrower shall hold itself out to the public as a legal entity separate and distinct from any other entity (including any Affiliate thereof). Borrower will be qualified to transact business in the State for the duration of this Agreement.

Section 8.07. Issuer's Right to Enforce Tax Regulatory Agreement. Notwithstanding anything herein to the contrary, Issuer shall have the right to enforce Borrower's covenants, agreements and representations in the Tax Regulatory Agreement against Borrower pursuant to the terms thereof.

Section 8.08. Limitations of Liability. In no event, whether as a result of breach of contract, warranty, tort (including negligence or strict liability), indemnity or otherwise, shall any of the parties, their assignees or agents be liable for any special, consequential, incidental, punitive or penal damages including, but not limited to, loss of profit or revenue, loss of use of the Project or any associated equipment, service materials or software, damage to associated equipment, service materials or software, cost of capital, cost of substitute property, service materials or software, facilities, services or replacement power or down time costs.

Section 8.09. Non-Liability of Issuer. Issuer shall not be obligated to pay the Principal, or premium, if any, or Interest on the Issuer Loan, except from Borrower Loan Payments under the Borrower Loan. Borrower and Lender hereby acknowledge that Issuer's sole source of moneys to repay the Issuer Loan will be provided by the payments made by the Borrower pursuant to this Agreement, and Borrower hereby agrees that if the payments to be made hereunder shall ever prove insufficient to pay all Principal, and premium, if any, and Interest on the Issuer Loan, any Additional Payments and any Issuer Payments, as the same shall become due (whether by maturity, redemption, acceleration or otherwise), then Borrower shall pay such amounts as are required from time to time to prevent any deficiency or default in the payment of such Principal, premium or Interest, any Additional Payments and any Issuer Payments, including, but not limited to, any deficiency caused by acts, omissions, nonfeasance or malfeasance on the part of the Borrower, Lender, Issuer or any third party.

Section 8.10. Expenses. Borrower covenants and agrees to pay Issuer Payments, as more particularly set forth in Section 2.10. The Borrower agrees that it will pay the fee of the California Debt Limit Allocation Committee upon the issuance of the Issuer Loan.

Section 8.11. No Personal Liability. Notwithstanding anything to the contrary contained herein or in the Tax Regulatory Agreement or in any other instrument or document executed by or on behalf of Issuer or the State in connection with this Agreement, no stipulation, covenant, agreement or obligation contained herein or therein shall be deemed or construed to be a stipulation, covenant, agreement or obligation of any present or future officer, member, employee or agent of Issuer or the State, or of any member, officer, employee or agent of any successor to Issuer, in any such person's individual capacity, and no such person, in an individual capacity, shall be liable personally for any breach or nonobservance of or for any failure to perform, fulfill or comply with any such stipulations, covenants, agreements or obligations, nor shall any recourse be had for the payment of the principal of, premium, if any, or

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interest on the Issuer Loan or for any claim based thereon or on any such stipulation, covenant, agreement or obligation, against any such person, in an individual capacity, either directly or through Issuer, the State or any successor to Issuer, under any rule of law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such person, in any individual capacity, is hereby expressly waived and released.

Section 8.12. Indemnification. Borrower will pay Costs of Issuance and all other expenses incurred by the Issuer and Lender in connection with this Agreement in accordance with Sections 2.10 and 13.10 hereof.

Borrower further covenants and agrees as follows:

(a) to indemnify, to the extent permitted by law, the Issuer, the State, Lender and Lender Affiliates, their respective incorporators, members, commissioners, directors, officers, agents and employees against all liability, losses, damages, all costs and charges (including reasonable fees and disbursements of attorneys, accountants, consultants and other experts), taxes, causes of action, suits, claims, demands and judgments of every conceivable kind, character and nature whatsoever, by or on behalf of any Person arising in any manner from the transaction of which this Agreement is a part or arising in any manner in connection with the Project or the financing or refinancing of the Project, including, but not limited to, losses, claims, damages, liabilities or reasonable expenses arising out of, resulting from or in any way connected with (i) the work done on the Project or the operation of the Project during the term of this Agreement, including, without limitation, any liability for any loss or damage to property or any injury to or death of any person that may be occasioned by any cause whatsoever pertaining to the Project; (ii) any violation of contract, agreement (including this Agreement and the Tax Regulatory Agreement) or restriction relating to the Project; (iii) any violation of law, ordinance or regulation affecting the Project or any part thereof or the ownership or occupancy or use thereof; or (iv) the carrying out of any of the transactions contemplated by this Agreement and all related documents;

(b) promptly after receipt by an Indemnified Person (as defined below) of notice of the commencement of any action in respect of which indemnification may be sought under Section 8.13(a), the Person in respect of which indemnification may be sought (the "Indemnified Person") shall promptly notify Borrower in writing, but the omission to so notify Borrower will not relieve Borrower from any liability which it may have to any Indemnified Person under this Section 8.13 other than to the extent of prejudice caused directly or indirectly by such omission nor affect any rights it may have to participate in and/or assume the defense of any action brought against any Indemnified Person. In case such claim or action is brought against Lender or any Lender Affiliate, or their respective incorporators, members, commissioners, directors, officers, agents or employees, and such Indemnified Person notifies Borrower of the commencement thereof, Borrower will be entitled to participate in and, to the extent that it chooses so to do, to assume control of the investigation and defense thereof (including the employment of counsel reasonably satisfactory to Lender), and Borrower shall assume the payment of all fees and expenses relating to such investigation and defense and shall have the right to

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negotiate and consent to the settlement thereof. Lender, Lender Affiliates and their respective incorporators, members, commissioners, directors, officers, agents or employees shall have the right to employ separate counsel in any such action and to participate in the defense thereof, and after notice from Borrower of its election to assume the defense thereof, the fees and expenses of such separate counsel shall be at the expense of such Indemnifying Party if Lender, Lender Affiliates or their respective incorporators, members, commissioners, directors, officers, agents or employees reasonably determines that a conflict of interest exists or could develop between such party and Borrower in connection with such action. With respect to any claim made or action brought against the Issuer or the State, or any officer, agent, employee, advisor or attorney of the Issuer or the State, as the case may be, the Issuer or the State shall be entitled to retain separate counsel in connection with the defense of any such claim or action and the Borrower shall pay the fees and expenses of such counsel. Borrower shall not be liable for any settlement of any such action effected without its consent, but, if settled with the consent of Borrower or if there be a final judgment for the plaintiff in any such action as to which Borrower has received notice in writing as hereinabove required, Borrower agrees to indemnify and hold harmless the Indemnified Person from and against any loss or liability by reason of such settlement or judgment to the extent provided in Section 8.13; and

(c) notwithstanding the previous provisions of this Section 8.13, Borrower is not liable for or obligated to indemnify or hold harmless Issuer, the State, Lender or any Issuer Affiliate or Lender Affiliate (or any of their respective incorporators, members, commissioners, officers, employees or agents) against any loss or damage to property or injury or death to any person or any other loss or liability if and to the extent such loss, damage, liability, injury or death or other loss or liability arises out of or results from the gross negligence or willful misconduct of the Indemnified Person seeking such indemnification.

All indemnifications by Borrower shall survive the termination of this Agreement and payment of the indebtedness hereunder.

Section 8.13. Covenant to Enter into Agreement or Contract to Provide Ongoing Disclosure. Borrower and Lender hereby agree that this Agreement is exempt from the requirements of Paragraph (b)(5)(i) of the Securities and Exchange Commission Rule 15c2-12 under the Securities Exchange Act of 1934, as amended (17 CFR Part 240, § 240.15c2-12) (the "Rule"). Borrower hereby covenants and agrees that if this Agreement ceases to be exempt under the Rule, Borrower will enter into an agreement or contract, constituting an undertaking, to provide ongoing disclosure as may be necessary to comply with the Rule as then in effect.

Section 8.14. Reserved.

Section 8.15. Deposit Relationship. Borrower shall maintain its primary operating account at Lender at all times during the term of this Loan Agreement, and Borrower hereby grants Lender a security interest in such account (or any successor account held by Lender) and all amounts from time to time deposited therein.

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Section 8.16. Lessee Debt Service Coverage Ratio. Borrower shall cause Lessee maintain a ratio of EBITDA (as defined in this Section 8.16), less unfinanced capital expenditures, taxes, and an amount equal to 40% of net profit for such period to Debt Service (as defined in this Section 8.16) of not less than 1.25: 1.0. Compliance with this Section 8.16 shall be measured at the end of each fiscal quarter of Lessee but shall apply at all times.

For purposes of this Section 8.16: (i) "EBITDA" shall mean net income plus interest, taxes, depreciation, amortization, and any non-cash expenses minus any non-cash income for the twelve (12) month period preceding the date of calculation; and (ii) "Debt Service" shall mean: (1) the current portion of long term debt as of the date of calculation (excluding the obligations of Lessee under the Troy Guaranty Agreement), plus (2) interest expense during the twelve (12) months preceding the date of calculation.

Section 8.17. Covenants of the Borrower Required by the California Debt Limit Allocation Committee. The Borrower covenants and represents for the sole benefit of California Debt Limit Allocation Committee (the "Committee") that it reasonably expects and will use reasonable efforts to achieve the following within two years of the completion of the Project:

(a) The creation of 60 new jobs; and

(b) A weighted average hourly wage of $21.24 for new jobs created within two years of completion of the Project.

The Issuer, Lender and the Borrower further agree that notwithstanding anything to the contrary contained herein or in any of the other Loan Documents, (i) the covenants set forth in this Section are for the sole benefit of the Committee and that the Committee shall be deemed a third-party beneficiary of this Agreement for the purpose of enforcing the Borrower's compliance with the covenants set forth in this Section, (ii) the Committee shall have the exclusive right, in its discretion, to enforce the covenants contained in this Section by an action for specific performance or any other available remedy, and (iii) any failure by the Borrower to comply with this Section shall not be deemed a default or an Event of Default under this Agreement or any of the other Loan Documents enforceable by the Lender.

ARTICLE IX

NEGATIVE COVENANTS OF BORROWER

So long as the Borrower Loan shall remain unpaid, Borrower agrees that:

Section 9.01. Lien. Subject to Section 3.4 of the Deed of Trust, Borrower will not create, incur or suffer to exist any mortgage, deed of trust, pledge, lien, security interest, assignment or transfer upon or of any of the Project except for the security interest created pursuant to this Agreement and the Permitted Encumbrances.

Section 9.02. Sale of Assets. Borrower will not sell, lease (except under the Lease Agreement or a Permitted Lease), assign, transfer or otherwise dispose of all or a substantial part

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of its assets (other than inventory and obsolete equipment which is replaced in accordance with Section 8.05) or of any of the Project or any interest therein (whether in one transaction or in a series of transactions) without the prior written consent of Lender (which consent will not be unreasonably withheld in the case of transfers proposed to be made to an Affiliate of Borrower, and without such consent, if permitted by the Deed of Trust) and the delivery to Issuer and Lender of an opinion of Independent Counsel to the effect that any such sale, lease, assignment, transfer or other disposition will not cause the interest on Issuer Loan to be included in gross income of the owners thereof. Notwithstanding the previous sentence, the Issuer Loan and the Borrower Loan shall become due and payable upon the sale, assignment, transfer or other disposition of all of the Project. Borrower shall provide Issuer and Lender with prior written notice of its intention to sell, lease, assign, transfer or otherwise dispose of the Project or any interest therein and shall agree in writing to remain liable under the Loan Documents. In the event of a sale, assignment or transfer of the Project to an Affiliate of Borrower, such purchaser, assignee or transferee shall assume in writing Borrower's obligations under the Loan Documents.

Section 9.03. Consolidation and Merger. Borrower will not consolidate with or merge into any Person, or permit any other Person to merge into it without the prior written consent of Lender, or acquire (in a transaction analogous in purpose or effect to a consolidation or merger) all or substantially all of the assets of any other Person without the prior written consent of Lender (which consent will not be unreasonably withheld), unless Borrower is not in default following such acquisition and Borrower has delivered a certificate certifying that no Event of Default exists under the Loan Documents.

Section 9.04. Accounting. Borrower will not adopt, permit or consent to any material change in accounting principles other than as required by GAAP or adopt, permit or consent to any change in its fiscal year unless Borrower provides Lender restated financial statements prepared internally in comparative form.

Section 9.05. Use of Funds. Borrower will not, without Lender's written consent, use any of the Loan Proceeds except for the purposes contemplated by the Loan Documents.

Section 9.06. Other Indebtedness. Borrower shall not create, incur, assume or permit to exist any indebtedness or liabilities resulting from borrowings, loans or advances, whether secured or unsecured, matured or unmatured, liquidated or unliquidated, joint or several, except (a) the liabilities under the Loan Documents and any liabilities to Lender, (b) additional debts and lease obligations for business purposes which do not exceed a total principal amount of $100,000 outstanding at any one time, (c) indebtedness owed to Lessee, not to exceed $675,000, (d) any other liabilities or indebtedness of Borrower existing as of, and disclosed to, Lender prior to the Closing Date, and (e) liabilities or indebtedness under any facilities with any Lender Affiliate.

Section 9.07. Reserved.

Section 9.08. Reserved.

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Section 9.09. Use of Project. Borrower will not install, use, operate or maintain the Project, or allow the Project to be installed, used, operated or maintained, improperly, carelessly, in violation in any material respect of any applicable law or in a manner contrary to that contemplated by this Agreement or the Tax Regulatory Agreement.

Section 9.10. Guaranties. Borrower shall not guarantee or become liable in any way as surety, endorser (other than as endorser of negotiable instruments for deposit or collection in the ordinary course of business), accommodation endorser or otherwise for, nor pledge or hypothecate any assets of Borrower as security for, any liabilities or obligations of any other Person, except any of the foregoing in favor of Lender or which is existing as of, and disclosed to Lender in writing prior to, the Closing Date.

Section 9.11. Pledge of Assets. Borrower shall not mortgage, pledge, grant or permit to exist a security interest in, or lien upon, all or any portion of Borrower's assets now owned or hereafter acquired, except as permitted under Section 9.01 herein.

Section 9.12. Maintenance of Business. Borrower shall not change its business activities in any material respect from the business activities conducted by Borrower as of the Closing Date.

Section 9.13. Restrictive Agreements. Borrower shall not enter into any agreement containing any provision which would be violated or breached by the performance by Borrower of its obligations hereunder or under any other Loan Documents or any instrument or document delivered or to be delivered by Borrower in connection herewith. In addition, all now existing or hereafter arising agreements or arrangements entered into by Borrower involving any form of credit accommodations shall not, at any time, contain any material terms, conditions or covenants that are more restrictive in any material respect than the terms, conditions and covenants set forth in this Agreement.

Section 9.14. Patriot Act Compliance. Borrower shall not (i) be or become subject at any time to any law, regulation, or list of any government agency (including, without limitation, the U.S. Office of Foreign Asset Control list) that prohibits or limits Lender from making any advance or extension of credit to Borrower or from otherwise conducting business with Borrower, or (ii) fail to provide documentary and other evidence of the identity of Borrower as may be reasonably requested by Lender, and to the extent such requested evidence is within the possession or control of Borrower, at any time to enable Lender to verify the identity of Borrower or to comply with any applicable law or regulation, including, without limitation, Section 326 of the USA Patriot Act of2001, 31 U.S.C. Section 5318.

ARTICLE X

RESERVED

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ARTICLE XI

ASSIGNMENT, SUBLEASING AND SELLING

Section 11.01. Assignment by Lender. Subject to the conditions contained herein, this Agreement, and the right to receive payments of principal of, premium, if any and interest on the Issuer Loan and Borrower Loan Payments, as assignee of Issuer, directly from Borrower, may be transferred, assigned and reassigned in whole by Lender without the consent of Issuer or Borrower, to a Lender Affiliate or Qualified Institutional Buyer or an Accredited Investor. In the event of a sale or transfer to a Lender Affiliate, Lender shall certify to Issuer and Borrower that such transferee is a Lender Affiliate. In the event of a sale or transfer to a Qualified Institutional Buyer or an Accredited Investor, Lender shall provide to Issuer and Borrower a written statement representing that such transferee is a Qualified Institutional Buyer or an Accredited Investor and such transferee shall deliver to Issuer and Borrower a letter of representations executed by such transferee in the form of Exhibit B-2 hereto which shall contain a certification that the transferee is a Qualified Institutional Buyer or an Accredited Investor as provided in this Agreement. Upon assignment, Borrower will reflect in a book-entry the assignee designated in the written request of assignment or in a written certification of a Lender Affiliate delivered to Issuer and Borrower pursuant to this Section, and shall agree to make all payments to the assignee designated in such written request, notwithstanding any claim, defense, setoff or counterclaim whatsoever (whether arising from a breach of this Agreement or otherwise) that Issuer and Borrower may from time to time have against Lender or the assignee. Issuer agrees to execute all documents, including notices of assignment, which may be reasonably requested by Lender or its assignee to protect their interest in the Project and in this Agreement. Lender or assignee shall pay all reasonable expenses of Issuer, including reasonable fees and expenses of counsel, in connection with such transfer and assignment.

Section 11.02. No Sale or Assignment by Borrower. Subject to Section 3.4 of the Deed of Trust, this Agreement and the interest of Borrower in the Project (including without limitation through the sale or transfer of more than 10% of the ownership interests in Borrower) may not be sold, assumed, assigned or encumbered by Borrower, except for the Permitted Encumbrances and transfers permitted by the Deed of Trust, without the prior written consent of Lender.

ARTICLE XII

EVENTS OF DEFAULT AND REMEDIES

Section 12.01. Events of Default. The following constitute "Events of Default" under this Agreement:

(a) failure by Borrower to pay to Lender, as assignee of Issuer, any interest or principal payment comprising Borrower Loan Payment to be paid hereunder or under the Note within five (5) days after the date when due (except at maturity, as a result of acceleration or in connection with a prepayment hereunder);

4818-8339-4824.5 44

(b) failure of Borrower to make any other payment to Lender or Issuer in accordance with the Loan Documents (or any other agreement between Borrower and Lender or made by Borrower in favor of Lender) within five (5) Business Days after the same becomes due and payable by submission of an invoice to Borrower reflecting a date on which such payment is due and payable, or by other notice to the Borrower reflecting a date on which such payment is due and payable;

(c) any default by Borrower in the performance of or compliance with any obligation, agreement or other provision contained herein or in any other Loan Document or Issuer Document (other than those referred to in subsections (a) and (b) above), and, with respect to any such default which by its nature can be cured, such default shall continue for a period of thirty (30) days after the earlier of written notice thereof to Borrower or the date on which such default is known to Borrower (or such longer period, if any, as may reasonably be required for the remedying of such default if the Borrower has commenced to cure such default within such 30-day period and diligently pursued the curing thereof thereafter; provided that, in no event shall such extended period exceed 60 days; provided further that, if a different notice or cure period is specified under any provision of any Loan Document (or any other agreement between Borrower and Lender or made by Borrower in favor of Lender) or Issuer Document, then such specific provision shall control;

(d) any financial statement or certificate furnished to Lender in connection with, or any representation or warranty made by Borrower under this Agreement or any other Loan Document shall prove to be false or misleading in any material respect when furnished or made;

(e) Lessee or individual Guarantor fails to comply after any applicable period of grace with all terms and conditions of the Lessee Loan Agreement, the Troy Guaranty Agreement, the Littman Guaranty Agreement or any other agreement with Lender or any Lender Affiliates;

(f) the revocation of the Troy Guaranty Agreement by Lessee or the revocation of the Littman Guaranty Agreement by Individual Guarantor;

(g) the failure of Borrower, Lessee or Individual Guarantor to comply with order, judgment, injunction, decree, writ or demand of any court or other public authority, and such failure shall continue for thirty (30) days after the entry or effectiveness thereof;

(h) the default by Borrower or Lessee on any obligation concerning the borrowing of money;

(i) the default by Individual Guarantor on any obligation owed to Lender concerning the borrowing of money;

(j) an Event of Taxability shall occur;

4818-8339-4824.5 45

(k) except to the extent permitted hereunder, any property of Borrower is attached, garnished, or similarly levied and such action is not dismissed within thirty (30) days;

(1) a petitiOn is filed by Borrower, Lessee or Individual Guarantor, or Borrower, Lessee or Individual Guarantor admits to any material allegations with respect to any petition filed against Borrower, under the Bankruptcy Code (Title 11 of the United States Code, as amended), or any other law relating to bankruptcy, insolvency, reorganization, or other relief for debtors, or any order for relief is entered against Borrower, Lessee or Individual Guarantor in any proceeding under any such law, or Borrower, Lessee or Individual Guarantor acquiesces to the appointment of a receiver, trustee, custodian or other similar Person with respect to any material portion of its property or business;

(m) a petition is filed against Borrower under the Bankruptcy Code (Title 11 of the United States Code, as amended), or any other law relating to bankruptcy, insolvency, reorganization, or other relief for debtors and such petition is not dismissed within 60 days of the filing of such petition;

(n) a receiver, trustee, custodian, or liquidator of any assets or property of Borrower, Lessee or Individual Guarantor is appointed and such event shall continue for 60 days without having been dismissed or discharged;

(o) Borrower, Lessee or Individual Guarantor becomes insolvent, or makes a general assignment for the benefit of creditors, or is generally not paying debts as they become due; or

(p) the dissolution or liquidation of Borrower or Lessee; or Borrower or Lessee, or any of its members or managers or shareholders or directors, taking any action seeking to effect the dissolution or liquidation of Borrower or Lessee.

Section 12.02. Remedies on Default. Whenever any Event of Default shall have occurred and be continuing, Lender, as assignee of Issuer, shall have the right, at its sole option (unless such right has been retained by Issuer under this Agreement, in which case Issuer shall have the right) without any further demand or notice, to take any one or any combination of the following remedial steps or any other rights otherwise accorded to Lender, as assignee of Issuer, by applicable law:

(a) by written notice to Issuer and Borrower, declare the entire unpaid principal amount of the Borrower Loan then outstanding, all interest accrued and unpaid thereon and all amounts payable under this Agreement and the other Loan Documents to be forthwith due and payable, whereupon the Borrower Loan, all such accrued interest and all such amounts shall become and be forthwith due and payable, without presentment, notice of dishonor, protest or further notice of any kind, all of which are hereby expressly waived by Borrower;

4818-8339-4824.5 46

(b) proceed by appropriate court action to enforce specific performance by Issuer or Borrower of the applicable covenants of the Loan Documents or to recover from Borrower for the breach thereof, including the payment of all amounts due from Borrower;

(c) exercise all rights and remedies under the Deed of Trust or otherwise available to Lender under the UCC;

(d) take whatever action at law or in equity may appear necessary or desirable to enforce its rights with respect to the Project and the Property.

Borrower shall pay or repay to Lender and Issuer all costs of such action or court action, including, without limitation, reasonable attorneys' fees and expenses. Notwithstanding any other remedy exercised hereunder, Borrower shall remain obligated to pay to Lender any unpaid portion of the Prepayment Amount.

Upon the declaration by Lender that the Borrower Loan is due and payable in accordance with any applicable provision of this Agreement, the Issuer Loan shall concurrently become due and payable and shall be paid solely from amounts received under this Agreement from the exercise of remedies available to Lender.

Section 12.03. Lender's Right to Perform the Obligations. If Borrower shall fail, refuse or neglect to make any payment or perform any act required by the Loan Documents to which it is a party, then while any Event of Default exists, and without notice to or demand upon Borrower and without waiving or releasing any other right, remedy or recourse Lender or Issuer may have because of such Event of Default, Lender may (but shall not be obligated to) make such payment or perform such act for the account of and at the expense of Borrower and interest on such payment shall accumulate from the date of the advance at the Default Rate until such advance is paid, and shall have the right to enter upon the Project for such purpose and to take all such action thereon and with respect to the Project as it may deem necessary or appropriate. If Lender shall elect to pay any sum due with reference to the Project, Lender may do so in reliance on any bill, statement or assessment procured from the appropriate governmental authority or other issuer thereof without inquiring into the accuracy or validity thereof. Similarly, in making any payments to protect the security intended to be created by this Agreement and the Deed of Trust, Lender shall not be bound to inquire into the validity of any apparent or threatened adverse title, lien, encumbrance, claim or charge before making an advance for the purpose of preventing or removing the same. Additionally, if any Hazardous Materials affect or threaten to affect the Project and Lender reasonably concludes that Borrower is not in a position to satisfactorily remedy the situation, Lender may (but shall not be obligated to) give such notices and take such actions as it deems necessary or advisable in order to abate the discharge of any Hazardous Materials or remove the Hazardous Materials. Borrower shall indemnify, defend and hold Lender and Issuer harmless from and against any and all losses, liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or disbursements of any kind or nature whatsoever, including reasonable attorneys' fees, incurred or accruing by reason of any acts performed by Lender pursuant to the provisions of this Section, except as a result of Lender's negligence or willful misconduct.

4818-8339-4824.5 47

To facilitate the performance or observance by Lender of such covenants of Borrower, Borrower hereby irrevocably appoints Lender, or the delegate of Lender, acting alone, as the attorney in fact of Borrower, with a limited power of attorney, with the right (but not the duty) from time to time after the occurrence or during the continuation of an Event of Default to create, prepare, complete, execute, deliver, endorse or file in the name and on behalf of Borrower any and all instruments, documents, assignments, security agreements, financing statements, applications for insurance and other agreements and writings relating to the Property required to be obtained, executed, delivered or endorsed by Borrower under this Agreement.

Section 12.04. No Remedy Exclusive. No remedy herein conferred upon or reserved to Lender or Issuer is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement, the Note or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any Event of Default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient. In order to entitle Lender or Issuer to exercise any remedy reserved to it in this Article, it shall not be necessary to give any notice other than such notice as may be required by this Article. All remedies herein conferred upon or reserved to Lender or Issuer shall survive the termination of this Agreement.

Section 12.05. Late Charge. Any Borrower Loan Payment, Additional Payment or Issuer Payment not paid by Borrower on the due date thereof shall, to the extent permissible by law, bear a late charge equal to the lesser of $0.02 per dollar of the delinquent amount or the lawful maximum, and Borrower shall be obligated to pay the same immediately upon receipt of Lender's or Issuer's written invoice therefore.

ARTICLE XIII

MISCELLANEOUS

Section 13.01. Costs and Expenses of Lender and Issuer. Borrower shall pay to Lender and Issuer, as Additional Payments or Issuer Payments, such amounts in each year as shall be required by Lender or Issuer in payment of any reasonable costs and expenses incurred by Lender and Issuer in connection with the execution, performance or enforcement of this Agreement, including but not limited to payment of all reasonable fees, costs and expenses and administrative costs of Lender and Issuer in connection with the Project, expenses (including, without limitation, attorneys' fees and disbursements of attorneys, accountants, consultants and other experts), fees of auditors or attorneys, insurance premiums not otherwise paid hereunder and all other direct and necessary administrative costs of Lender and Issuer or charges required to be paid by it in order to comply with the terms of, or to enforce its rights under, the Loan Documents. Such costs and expenses shall be billed to Borrower by Lender or Issuer, as the case may be, from time to time, together with a statement certifying that the amount so billed has been paid by Lender or Issuer, as the case may be, for one or more of the items above described, or that such amount is then payable by Lender or Issuer, as the case may be, for such items. Amounts so billed shall be due and payable by Borrower within 30 days after receipt of the bill by Borrower. Nothing in this Section shall be construed to require Borrower to pay or reimburse

4818-8339-4824.5 48

Lender for routine, on-going costs associated with administration or maintenance of the Issuer Loan or the Borrower Loan.

Section 13.02. Disclaimer of Warranties. LENDER AND ISSUER MAKE NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, TITLE, CONDITION, PERFORMANCE, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR FITNESS FOR USE OF THE PROJECT, OR ANY PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENTS, OR ANY OTHER WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT THERETO. In no event shall Lender or Issuer be liable for any loss or damage in connection with or arising out of this Agreement, the Project or the existence, furnishing, functioning or Borrower's use of any item or products or services provided for in the Loan Documents.

Section 13.03. Notices. All notices, certificates, requests, demands and other communications provided for hereunder or under any other Loan Document shall be in writing and shall be (a) personally delivered, (b) sent by first-class United States mail, (c) sent by overnight courier of national reputation, or (d) transmitted by telecopy or facsimile, in each case addressed to the party to whom notice is being given at its address as set forth below and, if by facsimile or telecopy, transmitted to that party at its facsimile or telecopy number set forth below or, as to each party, at such other address or facsimile or telecopier number as may hereafter be designated by such party in a written notice to the other party complying as to delivery with the terms of this Section and followed by deposit in the United States mail (first-class delivery) no later than the immediately succeeding Business Day. All such notices, requests, demands and other communications shall be deemed to have been given on (i) the date received if personally delivered, (ii) three days after being deposited in the mail if delivered by mail, (iii) the next Business Day after the date sent if sent by overnight courier, or (iv) the date of transmission if delivered by telecopy or facsimile during recipient's normal business hours, and, if not, on the immediately following Business Day. If notice to Borrower of any intended disposition of the Project or any other intended action is required by law in a particular instance, such notice shall be deemed commercially reasonable if given (in the manner specified in this Section) at least 10 calendar days prior to the date of intended disposition or other action.

If to Lender:

If to Issuer:

4818-8339-4824.5

Union Bank, N.A. 17800 Castleton Street, Suite 500 City of Industry, California 91748 Attention: George Plazola Telephone: (626) 810-6554 Telecopier: (626) 810-6558

California Enterprise Development Authority 550 Bercut Drive, Suite G Sacramento, California 95814 Attention: Executive Director

49

If to Borrower: Dacon Properties, LLC 14508 Nelson A venue City of fudustry, California 91744 Attention: David Littman Telephone: (626) 934-4267 Telecopier: (626) 934-6438

Section 13.04. Further Assurance and Corrective Instruments. The parties hereto hereby agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such further acts, instruments, conveyances, transfers and assurances, as any of them reasonably deems necessary or advisable for the implementation, correction, confirmation or perfection of this Agreement, the Deed of Trust or the Tax Regulatory Agreement and any rights of such party hereunder or thereunder.

Section 13.05. Binding Effect; Time of the Essence. This Agreement shall inure to the benefit of and shall be binding upon Lender, Issuer, Borrower and their respective successors and assigns. Time is of the essence.

Section 13.06. Severability. fu the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.

Section 13.07. Amendments. To the extent permitted by law, the terms of this Agreement shall not be waived, altered, modified, supplemented or amended in any manner whatsoever except by written instrument signed by the parties hereto, and then such waiver, consent, modification or change shall be effective only in the specific instance and for the specific purpose given.

Notwithstanding the foregoing, Borrower, Issuer and Lender hereby agree that Borrower and Lender may amend or waive compliance with the covenants contained in Sections 5.01(cc), 8.01, 8.16, 8.17, 9.04, 9.06, 9.07, 9.10 and 9.11 of this Agreement without the consent of Issuer. Such amendment shall be effected by written instrument signed by Borrower and Lender, with written notice provided to Issuer. Issuer's agreement to the amendment referred to in this paragraph shall not be required.

Section 13.08. Execution in Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart.

Section 13.09. Applicable Law; Venue.

(a) This Agreement is a contract made under the laws of the State, and shall be governed by and construed in accordance with the Constitution and the laws applicable to contracts made and performed in the State.

4818-8339-4824.5 50

(b) ANY AND ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH

THIS AGREEMENT, ANY ISSUER DOCUMENT OR ANY LOAN DOCUMENT SHALL BE TRIED

AND LITIGATED ONLY IN THE STATE, COUNTY OF SACRAMENTO AND, TO THE EXTENT

PERMITTED BY APPLICABLE LAWS, FEDERAL, COURTS LOCATED IN THE STATE,

COUNTY OF SACRAMENTO, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT LENDER'S OPTION, IN THE COURTS OF ANY STATE JURISDICTION WHERE LENDER

ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY

MAY BE FOUND. BORROWER W AlVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAWS, ANY RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS

OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN

ACCORDANCE WITH THIS SECTION 13.09.

Section 13.10. Captions. The captions or headings in this Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Agreement.

Section 13.11. Entire Agreement. The Loan Documents and the exhibits hereto and thereto constitute the entire agreement among Lender, Issuer and Borrower. There are no understandings, agreements, representations or warranties, express or implied, not specified herein or in such documents regarding this Agreement and the Project financed hereby.

Section 13.12. Usury. It is the intention of the parties hereto to comply with any applicable usury laws; accordingly, it is agreed that, notwithstanding any provisions to the contrary in this Agreement or any other Loan Document, in no event shall this Agreement or the Note require the payment or permit the collection of interest or any amount in the nature of interest or fees in excess of the maximum permitted by applicable law. If necessary to give effect to these provisions, Lender, on behalf of Issuer, will, at Lender's option, in accordance with applicable law, either refund any amount to Borrower to the extent of interest in excess of that allowed by applicable law, or credit such excess amount against the then unpaid principal balance under the Note.

Section 13.13. No Third Party Beneficiaries. This Agreement is made and entered into for the sole protection and benefit of the parties hereto and their respective permitted successors and assigns, and, except as expressly set forth in this Agreement, no other Person shall be a third party beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any of the other Loan Documents to which it is not a party.

Section 13.14. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY LAW, BORROWER AND LENDER HEREBY WAIVE THEIR RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS AGREEMENT, ANY LOAN DOCUMENT OR ANY RELATED DOCUMENTS, ANY DEALINGS BETWEEN LENDER AND BORROWER RELATING TO THE SUBJECT MATTER OF THE TRANSACTIONS CONTEMPLATED BY ANY OF THE FOREGOING OR ANY RELATED TRANSACTIONS, OR ANY RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN LENDER AND BORROWER. THE SCOPE OF THIS WANER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES

4818-8339-4824.5 51

THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS) (COLLECTIVELY, "CLAIMS"). THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, ANY LOAN DOCUMENT OR ANY RELATED DOCUMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, ANY LOAN DOCUMENT OR ANY RELATED TRANSACTIONS.

IF AND TO THE EXTENT THAT THE FOREGOING WAIVER OF THE RIGHT TO A JURY TRIAL IS UNENFORCEABLE FOR ANY REASON IN THE APPLICABLE FORUM, BORROWER AND LENDER HEREBY CONSENT TO THE ADJUDICATION OF ALL CLAIMS PURSUANT TO JUDICIAL REFERENCE AS PROVIDED IN CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638 (OR ANY COMPARABLE PROVISIONS OF FEDERAL LAW, IF APPLICABLE). THE JUDICIAL REFEREE SHALL OVERSEE DISCOVERY AND MAY ENFORCE ALL DISCOVERY RULES AND ORDER APPLICABLE TO JUDICIAL PROCEEDINGS IN THE SAME MANNER AS A TRIAL COURT JUDGE. BORROWER AND LENDER AGREE THAT THE SELECTED OR APPOINTED JUDICIAL REFEREE SHALL HAVE THE POWER TO DECIDE ALL ISSUES IN THE ACTION OR PROCEEDING, WHETHER OF FACT OR OF LAW, AND SHALL REPORT A STATEMENT OF DECISION THEREON PURSUANT TO THE CALIFORNIA CODE OF CIVIL PROCEDURE § 644(A). NOTHING IN THIS PARAGRAPH SHALL LIMIT THE RIGHT OF LENDER AT ANY TIME TO EXERCISE SELF-HELP REMEDIES, FORECLOSE AGAINST COLLATERAL, OR OBTAIN PROVISIONAL REMEDIES. THE JUDICIAL REFEREE SHALL ALSO DETERMINE ALL ISSUES RELATING TO THE APPLICABILITY, INTERPRETATION, AND ENFORCEABILITY OF THIS SECTION. EACH OF BORROWER AND LENDER REPRESENT THAT IT HAS REVIEWED THIS WAIVER AND CONSENT AND KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS AND CONSENTS TO JUDICIAL REFERENCE FOLLOWING CONSULTATION WITH LEGAL COUNSEL ON SUCH MATTERS. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT OR TO JUDICIAL REFERENCE UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638 AS PROVIDED HEREIN.

Section 13.15. USA Patriot Act Notice. Lender hereby notifies Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Patriot Act"), Lender is required to obtain, verify and record information that identifies Borrower, which information includes the name and address of Borrower and other information that will allow Lender to identify Borrower in accordance with the Patriot Act.

4818-8339-4824.5 52

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in their respective corporate names by their duly authorized officers, all as of the date first written above.

Lender:

Issuer:

Borrower:

UNION SANK, N.A. ~ l

By

CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY

By __________________________ __

Wayne Schell, Chair

DACON PROPERTIES, LLC

By ________________________ __

David Littman, Manager

[Signature Page to Loan Agreement]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in their respective corporate names by their duly authorized officers, all as of the date first written above.

Lender:

Issuer:

Borrower:

UNION BANK, N.A.

By ____________________________ __

Authorized Officer

CALIFORNIA ENTERPRISE DEVELOPMENT AUTHO TY

DACON PROPERTIES, LLC

By ________________________ __

David Littman, Manager

[Signature Page to Loan Agreement]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in their respective corporate names by their duly authorized officers, all as of the date first written above.

Lender:

Issuer:

Borrower:

UNION BANK, N.A.

Authorized Officer

CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY

By __________________________ _

Wayne Schell, Chair

DACON PROPERTIES, LLC

By D-?J

[Signature Page to Loan Agreement]

EXHIBIT A

OPINION OF COUNSEL TO BORROWER

December [_], 2010

California Enterprise Development Authority 550 Bercut Drive, Suite G Sacramento, California 95814

Union Bank, N.A. 17800 Castleton Street, Suite 500 City of Industry, California 917 48

Re: $11,325,000 LOAN AGREEMENT, DATED AS OF DECEMBER [ l, 2010, BY AND AMONG CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY, DACON PROPERTIES, LLC AND UNION BANK, N.A.

Ladies and Gentlemen:

We have acted as special counsel for Dacon Properties, LLC, a California limited liability company ("Borrower"), in connection with the transactions contemplated by the Loan Agreement dated as of December 1, 2010 (the "Loan Agreement"), among Borrower, Union Bank, N.A., as lender ("Lender"), and the California Enterprise Development Authority, as issuer ("Issuer"). Unless otherwise defined herein or unless the context otherwise requires, terms defined in the Loan Agreement shall have the same meanings herein.

In connection with this opinion, we have examined the original or a copy certified or otherwise identified to our satisfaction as a true copy of each of the following documents: (a) executed counterparts of the Loan Agreement; (b) executed copy of the Note dated December 30, 2010, issued by Borrower in favor of Lender in the aggregate principal amount of Eleven Million Three Hundred Twenty Five Thousand Dollars ($11,325,000); (c) executed counterparts of the Environmental Compliance Agreement dated as of December 1, 2010 by Borrower and Troy-CSL Lighting, Inc. ("Operator") for the benefit of Lender; (d) executed copy of the Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing, dated as of December 1, 2010 (the "Deed of Trust") by Borrower in favor of Union BanCal Mortgage Corporation, a California corporation, as trustee, for the benefit of Lender, (e) executed counterparts of the Subordination of Lease dated as of December 1, 2010 by Borrower and Operator and (f) executed counterparts of the Tax Regulatory Agreement dated as of December 1, 2010 by Issuer and Borrower (the documents referred to in clauses (a) through (f) are collectively referred to herein as the "Loan Documents").

In our examination, we have assumed the genuineness of all signatures, the authenticity of documents submitted to us as originals, the conformity with authentic original documents of all documents submitted to us as copies and, in the case of documents executed prior to the date

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California Enterprise Development Authority

Union Bank, N.A. December [_], 2010 Page2

of this opinion letter, that there has been no course of conduct that would alter the terms of these documents from those reviewed by us. As to relevant facts, we have relied upon statements of governmental officials and upon representations made in or pursuant to the Loan Documents and certificates of appropriate representatives of Borrower.

In rendering the opinions expressed below, we have assumed (except, to the extent set forth below, as to Borrower) that all of the documents referred to in this opinion have been duly authorized by, have been or will be duly executed and delivered by, and constitute legal, valid, binding and enforceable obligations of, all of the parties to those documents, that all signatories to those documents have been duly authorized and that all such parties are duly organized and validly existing and have the power and authority (corporate, partnership, company, trust or other) or, in the case of individuals, the legal capacity, to execute, deliver and perform those documents. We have further assumed that Lender is a bank incorporated or organized under, or a foreign bank licensed to conduct a banking business through an agency or branch located in the United States of America pursuant to, the laws of the United States of America or any state of the United States of America, within the meaning of Section 1 of Article XV of the California Constitution and Section 1716 of the California Financial Code.

Based on the foregoing and subject to the assumptions, limitations, and qualifications set forth herein, we are of the opinion that as of the date hereof:

1. Borrower is a limited liability company organized, validly existing and based solely on a certificate of good standing from the California Secretary of State, in good standing under the laws of the State of California.

2. The execution and delivery of, and the performance by Borrower of its obligations under, each Loan Document to which it is a party (i) have been duly authorized by all necessary limited liability company action of Borrower and (ii) will not violate any provision of Borrower's articles of organization or operating agreement, including all amendments thereto to the date hereof.

3. The execution and delivery of, and the performance by Borrower of its obligations under, the Loan Documents to which it is a party, or the borrowing by Borrower under the Loan Agreement, will not (a) result in a breach or acceleration of any indebtedness pursuant to the terms of, or constitute a default under, any agreement listed on Schedule [3] attached hereto (collectively, the "Material Borrower Contracts"), (b) result in any violation by the Borrower of any judgment, order or decree of any court or governmental body which to our knowledge, is applicable to Borrower, or (c) result in the violation of any Applicable Law applicable to Borrower. For purposes of our opinion in clause (a) above, we have assumed that (i) there are no agreements or understandings, written or oral, among the parties to any of the Material Borrower Contracts that would alter the plain meaning thereof, (ii) that none of the Material Borrower Contracts have been modified except as specified on Schedule [3] hereto, and (iii) each of the Material Borrower Contracts would be interpreted as written in accordance with

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California Enterprise Development Authority

Union Bank, N.A. December[_], 2010 Page 3

its plain meaning. For purposes of clause (b), the phrase "to our knowledge" is intended to indicate that, during the course of our representation of Borrower, no information that would give us knowledge of the inaccuracy of the statements made in that clause has come to the attention of those attorneys in this firm who have rendered legal services on behalf of Borrower in connection with the Loan Documents and that we have obtained, discussed with appropriate representatives of Borrower the contents of and relied, as stated above, upon certificates of appropriate representatives of Borrower as to the matters covered by those certificates. Except to the extent otherwise set forth above, however, we have not undertaken any independent inquiry to determine the accuracy of any such statements in clause (b); no inference as to our knowledge of any matters bearing on the accuracy of any such statements should be drawn from the fact of our representation of Borrower.

4. No authorization, consent, license, permit, approval, registration, declaration or other filing with, any Governmental Authority is required for the execution and delivery by Borrower of each Loan Document to which it is a party, or for the performance by Borrower of its obligations under the Loan Documents (a) except for such authorizations, consents, licenses, permits, approvals, registrations, declarations and other filings as have been obtained, and (b) except as otherwise may be necessary for the creation, perfection or priority of the liens of the Loan Documents, including, without limitation, the recordation of the Deed of Trust in the Official Records of the County of Los Angeles in the State of California.

5. Each Loan Document to which Borrower is a party has been duly executed and delivered by Borrower and constitutes the legal, valid and binding obligation of Borrower, enforceable against Borrower in accordance with its respective terms, in each case except as may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or transfer or other similar laws relating to or affecting the rights of creditors generally and except as the enforceability of those Loan Documents is subject to the application of general principles of equity (regardless of whether considered in a proceeding in equity or at law), including without limitation (a) the possible unavailability of specific performance, injunctive relief or any other equitable remedy and (b) concepts of materiality, reasonableness, good faith and fair dealing.

6. The Deed of Trust is in proper form for recordation under the law of the State of California in the Official Records of the County of Los Angeles in the State of California, and the Deed of Trust is in proper form sufficient to create a valid lien on such of the Trust Estate (as defined in the Deed of Trust) that constitutes real property (including fixtures, to the extent the same constitutes real property).

7. The recording of the Deed of Trust in the Official Records of the County of Los Angeles in the State of California is the only recording or filing necessary to give constructive notice of the contents of the Deed of Trust with respect to the real property described therein as of the date of that recording to subsequent purchasers and mortgagees of that real property in that county.

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California Enterprise Development Authority

Union Bank, N.A. December [_], 2010 Page4

8. The Deed of Trust is effective to create a valid security interest under the California Commercial Code (the "Code") in all of the right, title and interest of Borrower in, to and under that portion of the personal property purported to be covered by the Deed of Trust in which a security interest may be created under Division 9 of the California Commercial Code (the "UCC Collateral") as collateral security for the payment when due of obligations specified to be secured in the Deed of Trust (except that the security interest in any UCC Collateral in which Borrower acquires rights after the commencement of a case against it under the Federal Bankruptcy Code will be limited by Section 552 of the Federal Bankruptcy Code), and upon its creation that security interest will, assuming that Borrower is and will remain located in California, be and remain perfected upon the due filing of the financing statement shown on the attached Schedule [8] as to be filed with the California Secretary of State with respect to Borrower (the "Financing Statement") with the California Secretary of State in accordance with the Code~ except to the extent that such UCC Collateral consists of (1) property subject to Section 9311 of the Code, (2) goods covered by a certificate of title, (3) deposit accounts, ( 4) investment property (other than investment property to be perfected by filing), (5) letter-of-credit rights, (6) money, (7) an insurance policy or any claim in or under an insurance policy, including unearned premiums, (8) fixtures, (9) timber to cut, (10) as-extracted collateral or (11) farm products and except that, to the extent that such UCC Collateral consists of negotiable documents, goods, instruments, money or tangible chattel paper, the law of the jurisdiction in which that UCC Collateral is located at any time will govern the effect of perfection or nonperfection and the priority of a nonpossessory security interest in that UCC Collateral.

We advise you that, to our knowledge, there are no actions or proceedings against Borrower pending in any court or by or before any Governmental Authority or arbitrator, which seeks to affect the enforceability of the Loan Documents, except for those matters set forth on Annex A attached hereto. For purposes of the preceding sentence, the phrase "to our knowledge" is intended to indicate that, during the course of our representation of Borrower, no information that would give us knowledge of the inaccuracy of the statements made in that sentence has come to the attention of those attorneys in this firm who have rendered legal services on behalf of Borrower in connection with the Loan Documents and that we have obtained, discussed with appropriate representatives of Borrower the contents of and relied, as stated above, upon certificates of appropriate representatives of Borrower as to the matters covered by those certificates. Except to the extent otherwise set forth above, however, we have not undertaken any independent inquiry to determine the accuracy of any such statement~ no inference as to our knowledge of any matters bearing on the accuracy of any such statement should be drawn from the fact of our representation of Borrower.

The foregoing opinions are subject to the following comments and qualifications:

(a) Certain remedial or procedural provisions contained in the Loan Documents may be limited or rendered unenforceable by applicable law, but those limitations do not, in our opinion, make the remedies and procedures that are available to Lender inadequate for the

4818-8339-4824.5 A-4

California Enterprise Development Authority

Union Bank, N.A. December [_], 2010 Page 5

practical realization of the principal benefits purported to be provided to them by the Loan Documents.

(b) The enforceability of certain provisions of the Loan Documents may be limited by laws rendering unenforceable (1) the release of a party from, or the indemnification of a party against, liability for its own wrongful or negligent acts under certain circumstances and (2) indemnification contrary to United States of America or state securities laws and the public policy underlying those laws.

(c) The enforceability of certain provisions of the Loan Documents may be limited under certain circumstances to the extent that those provisions impose compensation for funding losses or late payment charges or an increase in interest rates upon delinquency in payment or the occurrence of a default.

(d) The enforceability of provisions in the Loan Documents to the effect that terms may not be waived or modified except in writing may be limited under certain circumstances.

(e) We express no opinion as to (1) any provision of the Loan Documents that purports to waive any provision of the Code that may not, pursuant to Section 9602 of the Code or any similar requirement under other applicable law, be waived before default or at all, (2) the effect of the laws of any jurisdiction in which any Lender is located (other than California) that limits the interest, fees or other charges it may impose, (3) Section [2.07] of the Loan Agreement and comparable provisions of the Loan Documents in so far as those provisions related to waiving Borrower's right of set off, and (4) the provisions of Section [13.09] of the Loan Agreement and the comparable provisions of the other Loan Documents insofar as those provisions relate to (A) the subject matter jurisdiction of any United States District Court to adjudicate any controversy related to the Loan Documents or (B) the waiver of inconvenient forum with respect to proceedings in any United States District Court.

(f) We express no opinion as to (i) any federal or state securities laws or (ii) any provision of the Internal Revenue Code of 1986, as amended, the United States Treasury regulations promulgated thereunder or any other regulations of the United States Internal Revenue Service or the United States Department of the Treasury.

(g) California law may limit the amount of attorneys' fees that can be recovered under certain circumstances and provides that, where a contract permits one party to the contract to recover attorneys' fees, the prevailing party in any action to enforce any provision of the contract shall be entitled to recover its reasonable attorneys' fees.

(h) We express no opinion as to the ownership of or title or rights to or the power to transfer any property (including, without limitation, any UCC Collateral) or except as expressly provided in paragraphs [6 and 8] above, as to the creation, perfection or priority of any liens (including without limitation the liens of the Loan Documents). Further, we have, for the

4818-8339-4824.5 A-5

California Enterprise Development Authority

Union Bank, N.A. December[_], 2010 Page6

purposes of those opinions, assumed that: (1) the Financing Statements will be filed no later than 10 days after the first extension of credit under the Loan Agreement and (2) the UCC Collateral does not include obligations of the government of the United States of America or its agencies or instrumentalities other than obligations subject to 31 C.P.R. §357, 12 C.P.R. §615, 12 C.P.R. §§910 and 912, 24 C.P.R. §81, 12 C.P.R. §1511 and 31 C.P.R. §354. We wish also to point out that the attachment of the security interests of the Deed of Trust to any UCC Collateral acquired after the date of the Borrower Loan under the Loan Agreement may constitute a voidable preference under Section 547 of the Federal Bankruptcy Code.

(i) In connection with our opinions in paragraph [8] above, we wish to call your attention to the provisions of (1) Sections 9315, 9316, 9317(b), (c) and (d), 9320, 9321, 9330, 9331 and 9332 of the Code as to limitations on the continuation of a created security interest or the effect of perfection and (2) Sections 9508 and 9515 of the Code as to actions (including without limitation the filing of continuation statements) that may be necessary in the future to continue perfection following the lapse of time or a change in circumstances.

(j) Section 726 of the California Code of Civil Procedure provides that any action to recover on a debt or other right secured by a deed of trust or mortgage on real property must comply with the provisions of that section, which provisions relate to and specify the procedures for the sale of encumbered property, the application of proceeds, the rendition in certain cases of a deficiency judgment and other related matters. We advise you that in such an action or proceeding, the debtor may require the creditor to exhaust all of its security before a personal judgment may be obtained against the debtor for a deficiency. We also advise you that failure to comply with the provisions of Section 726 (including an attempt to exercise a right of set-off with respect to any funds of the debtor that may be deposited with a Lender from time to time) may result in the loss of your liens on real and personal property, the loss of your right to a deficiency judgment and the loss of your right to pursue Borrower under the Loan Agreement. In our opinion, however, the limitations of Section 726 do not prevent enforcement of your rights with respect to the real property that is subject to the Deed of Trust nor do such limitations prevent enforcement of your rights with respect to any personal property or fixtures in which you have a security interest and as to which you proceed in accordance with your rights and remedies as permitted under Division 9 of the Code, provided that in each case you proceed in accordance with California law.

(k) Section 580d of the California Code of Civil Procedure provides that no deficiency judgment shall be rendered upon a note secured by a deed of trust or mortgage on real property after sale of the real property under the power of sale contained in any such deed of trust or mortgage.

(1) Section 2924c of the California Civil Code provides that whenever the maturity of an obligation secured by a deed of trust or mortgage on real property is accelerated by reason of a default in the payment of interest, principal or other sums secured by such an instrument or by reason of failure of the trustor or mortgagor to pay taxes, assessments or insurance premiums, the

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California Enterprise Development Authority

Union Bank, N.A. December [_], 2010 Page 7

trustor or mortgagor and certain other entitled persons have the right, at any time during the reinstatement period described in that section, to cure each such default by paying the entire amount then due (including, without limitation, certain reasonable costs and expenses incurred in enforcing such obligations but excluding any portion of principal that would not then be due had no default occurred) and thereby to reinstate that deed of trust or mortgage and the obligations secured by it to the same effect as if no acceleration had occurred. If the power of sale in the deed of trust or mortgage is not exercised, that reinstatement right may be exercised at any time prior to entry of the decree of foreclosure.

(m) Sections 2903 through 2905 of the California Civil Code grant certain redemption rights to persons having an interest in property subject to a lien and prevent the parties to a contract from forfeiting rights or restraining the rights of redemption from a lien.

(n) Section 2954.5 of the California Civil Code imposes, among other things, certain notice requirements as a condition precedent to the right of a real property secured lender to assess default, delinquency or late payment charges on a delinquent loan payment.

( o) The use of insurance or condemnation proceeds by the beneficiary under a deed of trust or mortgage is limited by Section 1265.225 of the Code of Civil Procedure (in the case of condemnation awards) and by California case law (in the case of both condemnation and insurance awards).

(p) Section 882.020 of the California Civil Code provides that a deed of trust or mortgage becomes unenforceable: (1) ten years after the last date fixed for payment of the debt or performance of the obligation ascertainable from the record or (2) if the last date for performance of the obligation cannot be ascertained from the record, 60 years after having been recorded, in either case subject to certain other provisions more fully set forth in the statute.

(q) We express no opinion as to the applicability to the obligations of Borrower (or the enforceability of any such obligations) of Section 548 of the Federal Bankruptcy Code, Sections 3429 to 3439.12, inclusive, of the California Civil Code or any other provision of law relating to fraudulent conveyances, transfers or obligations.

(r) For the purposes of this opinion letter, (i) the term "Governmental Authority" means any United States Federal or State of California administrative, judicial or other governmental agency, authority, tribunal or body and (ii) the term "Applicable Law" means laws, rules and regulations of any Governmental Authority which, in our experience, are customarily recognized to apply to transactions of the kind contemplated by the Loan Documents; provided that no opinion is given hereunder with respect to any provision of the Internal Revenue Code of 1986, as amended, the United States Treasury regulations promulgated thereunder, any other regulations of the United States Internal Revenue Service or the United States Department of the Treasury, or any administrative, judicial or other governmental agency, authority, tribunal or body regulating the same.

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California Enterprise Development Authority

Union Bank, N.A. December [_], 2010 Page 8

The foregoing opinions are limited to matters involving the laws of the State of California and the United States of America and we do not express any opinion as to the laws of any other jurisdiction.

This opinion letter is provided to you by us as counsel to Borrower pursuant to clause [(z)] of Article III of the Loan Agreement and may not be relied upon by any other person or for any purpose other than in connection with the transactions contemplated by the Loan Documents without our prior written consent in each instance.

Respectfully submitted,

4818-8339-4824.5 A-8

EXHIBITB-1

FORM OF INVESTOR'S LETTER OF REPRESENTATION

California Enterprise Development Authority 550 Bercut Drive, Suite G Sacramento, California 95814

Re: Loan Agreement, dated as of December [_], 2010 (the "Loan Agreement"), by and among Union Bank, N.A. ("Lender"), California Enterprise Development Authority ("Issuer") and Dacon Properties, LLC ("Borrower")

Ladies and Gentlemen:

The undersigned, as Lender under the Loan Agreement, hereby represents and warrants to you that:

1. The Lender has duly authorized, by all necessary action, the making of the Loan contemplated pursuant to the terms and provisions of the Loan Agreement. The Lender is authorized to execute and deliver this letter.

2. The Lender has sufficient knowledge and experience in financial and business matters, including purchase and ownership of municipal and other tax-exempt obligations, to be able to evaluate the risks and merits of the investment represented by the Issuer Loan Payments, the Borrower Loan Payments and the Loan Agreement. The Lender is able to bear the economic risks of such investment.

3. The Lender understands that the obligations of Issuer to make payments of principal of, premium, if any and interest on the Issuer Loan are special, limited obligations payable solely out of the Borrower Loan Payments to be made by Borrower to Issuer under the Borrower Loan pursuant to the Loan Agreement and the Note. Lender acknowledges that the Issuer Loan will never represent or constitute a general obligation or a pledge of the faith and credit of the Issuer and that the liability of the Issuer with respect to the Issuer Loan is subject to the limitations as set forth in the Loan Agreement.

4. The Lender has either been supplied with or have been given access to information, including financial statements and other financial information which the Lender has requested from the Borrower, and we have had the opportunity to ask questions and receive answers concerning Borrower, the Issuer, the Loan Agreement, the payments of principal of, premium, if any, and interest on the Issuer Loan and the Borrower Loan Payments and the security therefor, so that the Lender has been able to make the decision to make the Loan Proceeds available in accordance with the provisions of the Loan Agreement in exchange for the right to receive the payments of principal of, premium, if any, and interest on the Issuer Loan and the Borrower Loan Payments and enter into an perform its obligations under this Agreement. The Lender has not relied upon Issuer for any information in connection with the Borrower Loan, except as set forth in Article IV of the Loan Agreement.

4818-8339-4824.5

5. The Lender is familiar with the conditions, financial and otherwise, of the Borrower. Further, the Lender understands that Borrower Loan and the Issuer Loan involves a high degree of risk. Specifically, the Lender understands and acknowledges that, among other risks, the Issuer Loan is payable solely from Borrower Loan Payments and other amounts derived from the Collateral. The Lender has made such inquiry with respect to all of the foregoing as it believed to be desirable for its purposes.

6. The Lender understands that the Loan Agreement (including the right to receive Issuer Loan Payments and Borrower Loan Payments under the terms of the Loan Agreement) (a) is not being registered or otherwise qualified for sale under the "Blue Sky" laws and regulations of any state, (b) will not be listed in any stock or other securities exchange, (c) will not carry a rating from any rating service and (d) is currently exempt for the requirements of Rule 15c2-12 of the Securities Exchange Act of 1934.

7. The Lender understands that the Loan Agreement (including the right to Issuer Loan Payments and Borrower Loan Payments under the terms of the Loan Agreement), and the Note have not been registered under the Securities Act of 1933, as amended. The Lender represents that it is purchasing the Borrower Loan for its own account and not with a present view toward resale or the distribution thereof, in that it does not intend to resell or otherwise dispose of all or any part of our interests in the Borrower Loan. Except for a transfer of the Borrower Loan to an Accredited Investor, Qualified Institutional Buyer or Lender Affiliate as provided in the Loan Agreement, Lender agrees not to sell, transfer or otherwise dispose of all or part of our interest in the Borrower Loan except in accordance with the requirements of Loan Agreement.

8. The Lender agrees to indemnify and hold harmless Issuer with respect to any claim asserted against Issuer that is based upon our sale, transfer or other disposition of Lender's interests in the Loan Agreement in violation of the provisions hereof or of the Loan Agreement, other than any claim that is based upon the gross negligence or willful misconduct of Issuer

9. The Lender has executed and delivered this letter in connection with the execution and delivery of the Loan Agreement as an inducement to Issuer to cause the execution and delivery of the Loan Agreement to us. Only the Issuer may rely upon this letter.

10. The Loan Documents to which the Lender is a party constitute valid and legally binding obligations of the Lender, enforceable against the Lender in accordance with their respective terms, except to the extent limited by bankruptcy, reorganization or other laws of general application relating to effecting the enforcement of creditors' rights.

11. The execution and delivery of the Loan Documents to which the Lender is a party, the consummation of the transactions contemplated hereby and thereby and the fulfillment of the terms and conditions hereof and thereof do not and will not violate any law, rule, regulation or order, conflict with or result in a breach of any of the terms or conditions of the articles or certificate of incorporation or bylaws of the Lender or of any corporate restriction or of any agreement or instrument to which the Lender is now a party and do not and will not constitute a default under any of the foregoing or result in the creation or imposition of any liens,

4818-8339-4824.5

charges or encumbrances of any nature upon any of the property or assets of the Lender contrary to the terms of any instrument or agreement.

12. There is no action, suit, proceeding, claim, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body pending or, to the best of the Lender's knowledge, threatened against or affecting the Lender, challenging the Lender's authority to enter into the Loan Documents to which the Lender is a party or any other action wherein an unfavorable ruling or finding would adversely affect the enforceability of the Loan Documents to which the Lender is a party, or the exclusion of Interest from gross income for federal income tax purposes under the Code or would materially and adversely affect any of the transactions contemplated by the Loan Agreement.

Capitalized terms used in this Investor's Letter of Representation but not otherwise defined herein shall have the meaning ascribed to such term in the Loan Agreement.

UNION BANK, N.A.

By ________________________________ ___

George Plazola, Vice President

4818-8339-4824.5

EXIDBITB-2

FORM OF QUALIFIED INSTITUTIONAL BUYER'S LETTER OF REPRESENTATION

California Enterprise Development Authority 550 Bercut Drive, Suite G Sacramento, California 95814

Dacon Properties, LLC 14508 Nelson Avenue City of Industry, California 91744

Re: Loan Agreement, dated as of December[_], 2010, by and among Union Bank, N.A. ("Lender"), California Enterprise Development Authority ("Issuer") and Dacon Properties, LLC ("Borrower")

Ladies and Gentlemen:

The undersigned, as assignee of Lender under the Loan Agreement described above (the "Loan Agreement"), hereby represents and warrants to you that:

1. The undersigned is a Qualified Institutional Buyer or an Accredited Investor as defined the Loan Agreement.

2. The undersigned has duly authorized, by all necessary action, the assumption of the obligations of Lender under the Loan Agreement (capitalized terms used herein and not otherwise defined shall have the meanings given such terms in the Loan Agreement) and the assumption of the Issuer Loan contemplated pursuant to the terms and provisions of the Loan Agreement. The undersigned is authorized to execute and deliver this letter.

3. We have sufficient knowledge and experience in financial and business matters, including purchase and ownership of municipal and other tax-exempt obligations, to be able to evaluate the risks and merits of the investment represented by the Issuer Loan Payments, the Borrower Loan Payments and the Loan Agreement. We are able to bear the economic risks of such investment.

4. We understand that the obligations of Issuer to make payments under the Loan Agreement are special, limited obligations payable solely from amounts paid to Issuer from Borrower pursuant to the terms of the Loan Agreement (the "Borrower Loan Payments") and that notwithstanding anything to the contrary contained in the Loan Agreement, Issuer shall not be obligated to make Issuer Loan Payments, or pay any portion of the costs of the Project or make any other payment or advance any moneys or be liable for any other costs or expenses in connection with the Project, the Issuer Loan Payments, the Borrower Loan Payments or the Loan Agreement, except from the amounts paid to Issuer from Borrower Loan Payments pursuant to the Loan Agreement, and no such payment shall constitute a charge against the general credit of

4818-8339-4824.5 B-2-1

Issuer. We further understand that Issuer shall not be directly or indirectly or contingently or morally obligated to use any other moneys or assets of Issuer to pay Issuer Loan Payments or any portion of the costs of the Project or for all or any portion of such other costs or expenses.

5. We acknowledge that we have either been supplied with or have been given access to information, including financial statements and other financial information which we have requested from the Borrower, and we have had the opportunity to ask questions and receive answers concerning Borrower, the Issuer Loan Payments, the Borrower Loan Payments, the Loan Agreement and the security therefor, so that we have been able to make the Borrower Loan on the terms as set forth in the Loan Agreement. We acknowledge that we have not relied upon Issuer for any information in connection with the Borrower Loan.

6. We have made our own inquiry and analysis with respect to the Loan Agreement, the Issuer Loan Payments, the Borrower Loan Payments and the security therefor, and other material factors affecting the security and payment of such payments set forth in the Loan Agreement. We are aware that the business of Borrower involves certain economic variables and risks that could adversely affect the security for the Issuer Loan Payments. We have examined the legal documents relating to the Loan Agreement.

7. We understand that the Loan Agreement (including the right to receive Issuer Loan Payments and Borrower Loan Payments under the terms of the Loan Agreement) (a) is not being registered or otherwise qualified for sale under the "Blue Sky" laws and regulations of any state, (b) will not be listed in any stock or other securities exchange, (c) will not carry a rating from any rating service and (d) will be delivered in a form which may not be readily marketable.

8. We understand that the Loan Agreement (including the right to Issuer Loan Payments and Borrower Loan Payments under the terms of the Loan Agreement) has not been registered under the Securities Act of 1933, as amended. We represent to you that we are purchasing the Borrower Loan for investment for our own account and not with a present view toward resale or the distribution thereof, in that we do not intend to resell or otherwise dispose of all or any part of our interests in the Borrower Loan, except for sale to a Lender Affiliate, Accredited Investor or a Qualified Institutional Buyer in accordance with the terms of the Loan Agreement. Except for a transfer to a Lender Affiliate, Accredited Investor or a Qualified Institutional Buyer as provided in the Loan Agreement, we agree not to sell, transfer or otherwise dispose of all or part of our interest in the Borrower Loan except in accordance with the requirements of Loan Agreement.

9. We agree to indemnify and hold harmless Issuer with respect to any claim asserted against Issuer that is based upon our sale, transfer or other disposition of our interests in the Loan Agreement in violation of the provisions hereof or of the Loan Agreement, other than any claim that is based upon the gross negligence or willful misconduct of Issuer.

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10. We have executed and delivered this letter in connection with the transfer of the obligations under the Loan Agreement to us pursuant to the provisions of Section 11.01 of the Loan Agreement. Only the addressees hereof may rely upon this letter.

[NAME OF TRANSFEREE]

By ____________________________ _

Authorized Officer

4818-8339-4824.5 B-2-3

EXHIBITC

LEGAL DESCRIPTION OF PROPERTY

ASSESSOR'S PARCEL NUMBER:

8203-032-014

LEGAL DESCRIPTION:

All the certain real property located in the County of Los Angeles, State of California, described as follows:

THAT PORTION OF LOT 441 OF TRACT NO. 606, IN THE CITY OF INDUSTRY, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 15 PAGES 142 AND 143 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIDED AS FOLLOWS:

BEGINNING AT A POINT IN THE NORTHEASTERLY LINE OF SAID LOT, DISTANT SOUTH 48 DEGREES 07' 00" EAST 459.25 FEET FROM THE MOST NORTHERLY CORNER OF SAID LOT~ THENCE ALONG SAID NORTHEASTERLY LINE, NORTH 48 DEGREES 07' 00" WEST 459.22 FEET TO THE MOST NORTHERLY CORNER; THENCE ALONG THE NORTHWESTERLY LINE OF SAID LOT, SOUTH 41 DEGREES 53' 00" WEST 950.73 FEET TO THE MOST WESTERLY CORNER OF SAID LOT~ THENCE ALONG THE SOUTHWESTERLY LINE OF SAID LOT, SOUTH 50 DEGREES 04' 00" EAST 459.22 FEET; THENCE NORTH 41 DEGREES 53' 00" EAST 935.10 FEET TO THE POINT OF BEGINNING.

EXCEPT THEREFROM THE NORTHWESTERLY 70.00 FEET OF THE NORTHEASTERLY 430.00 FEET OF SAID LOT 441 OF TRACT NO. 606.

ALSO EXCEPT THEREFROM THE "PRECIOUS METALS AND ORES THEREOF" AS EXCEPTED FROM THE PARTITION BETWEEN JOHN ROWLAND, SR. AND WILLIAM WORKMAN, IN THE PARTITION DEED RECORDED IN BOOK 10 PAGE 39 OF DEEDS.

4818-8339-4824.5

EXHIBITD

LIST OF PERMITTED ENCUMBRANCES

"Permitted Encumbrances" means (a) liens and security interests securing indebtedness owed by Borrower to Lender; (b) liens for taxes, assessments, or similar charges either not yet due or being contested in good faith; (c) purchase money liens or purchase money security interests upon or in any property acquired or held by Borrower in the ordinary course of business to secure indebtedness outstanding on the date of this Loan Agreement or permitted to be incurred under Section 9.06; (d) liens, encumbrances or exceptions to title shown on Part I of Schedule B of the Title Policy, (e) liens and security interests which, as of the Closing Date, have been disclosed to and approved by Lender in writing, (f) security interest or liens on assets acquired after the date of this Loan Agreement (except assets that are acquired with the proceeds of the Borrower Loan or acquired in substitution for or as replacement for assets pledged to secure Borrower's obligations hereunder) that are consented to in writing by Lender, which consent shall not be unreasonably withheld and (g) any taxes, assessments, claims, demands, liens, charges or encumbrances being contested by Borrower in accordance with Section 3.4 of the Deed of Trust.

4818-8339-4824.5

$11,325,000

EXIDBITE

FORM OF NOTE

TillS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED

NOTE

December [_], 2010 No.1

DACON PROPERTIES, LLC, a limited liability company duly organized and validly existing under the laws of the State of California ("Borrower"), for value received, hereby promises to pay to the order of the California Enterprise Development Authority, a public entity duly organized and validly existing under the laws of the State of California ("Issuer"), the (a) principal sum of ELEVEN MILLION THREE HUNDRED TWENTY FIVE THOUSAND DOLLARS ($11,325,000), (b) interest on the unpaid balance of such principal sum from and after the date of this Note at the interest rate on the Borrower Loan (as hereinafter defined) and (c) interest on overdue principal, and to the extent permitted by law, on overdue interest, at the interest rate provided under the terms of the Loan Agreement.

This Note has been executed and delivered by Borrower pursuant to a certain Loan Agreement, dated as of December[_], 2010 (as amended, restated or otherwise modified from time to time, the "Loan Agreement"), by and among Issuer, Borrower and Union Bank, N.A. ("Lender"). Terms used but not defined in this Note shall have the meanings ascribed to such terms in the Loan Agreement.

Issuer has loaned to Borrower (the "Borrower Loan") the amount of $11,325,000 received from Lender pursuant to the terms of the Loan Agreement. Proceeds of the Borrower Loan will be used by Borrower to finance, refinance or reimburse the Borrower for (1) the cost of construction, acquisition, installation and equipping of an approximately 200,000 square foot manufacturing and distribution facility located at 14508 Nelson Avenue, City of Industry, California 91746 (the "Property"), and (2) certain costs of issuance related to such financing or refinancing (collectively, the "Project"), in each case, as more particularly set forth in the Loan Agreement. Borrower has agreed to repay such Borrower Loan by making Borrower Loan Payments at the times and in the amounts set forth in the Loan Agreement. The Borrower Loan has been made concurrently with the execution and delivery of this Note.

The principal amount of the loan from Lender to Issuer (the "Issuer Loan") and the Borrower Loan outstanding from time to time shall bear interest at the Effective Rate. Interest accruing on the principal balance of the Borrower Loan outstanding from time to time shall be payable monthly and upon earlier demand in accordance with the terms of the Loan Agreement or prepayment in accordance with the Loan Agreement.

4815-0242-5345.4

Borrower shall pay to Lender, as assignee of Issuer, Borrower Loan Payments, with respect to the principal of the Borrower Loan and interest on the Borrower Loan as provided in Section 2.05 of the Loan Agreement. The principal component of each Scheduled Payment is set forth in Schedule 1 hereto. All payments to Lender shall become due at 1:00 p.m., Los Angeles time, on the day when due without presentment, demand, protest or notice of any kind. Such Borrower Loan Payments shall be made in lawful money of the United States of America.

The obligations of Borrower to make the Borrower Loan Payments required under the Loan Agreement and to make other payments under the Loan Agreement and this Note and to perform and observe the covenants and agreements contained tin the Loan Agreement, including the obligation to make all Additional Payments and Issuer Payments, shall be absolute and unconditional in all events, without abatement, diminution, deduction, setoff or defense for any reason, including (without limitation) any failure of any component of the Project to be delivered or installed, any defects, malfunctions, breakdowns or infirmities in the Project or any accident, condemnation, destruction or unforeseen circumstances.

The obligations of Borrower under this Note are secured by certain collateral, including real property collateral, as set forth in this Loan Agreement.

Borrower may, and in certain instances, shall be required to, prepay the Borrower Loan and this Note in accordance with the terms of the Loan Agreement.

Borrower hereby certifies that all acts, conditions and things required to exist, to happen and be performed precedent to and in the issuance of this Note, exist, have happened and have been performed, and that the issuance of this Note has been duly authorized by Borrower.

4818-8339-4824.5 E-2

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

DACON PROPERTIES, LLC

Ian Wilcox,

[Signature Page to Note]

4818-8339-4824.5 E-3

DATE

4818-8339-4824.5

SCHEDULE!

SCHEDULED PAYMENTS (PRINCIPAL COMPONENT)

NUMBER

PRINCIPAL

PAYMENT

E-4

PRINCIPAL BALANCE

ENDORSEMENT AND ASSIGNMENT

FOR VALUE RECEIVED, the CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY ("Issuer"), hereby endorses and sells, assigns and transfers to the order of UNION BANK, N.A., as lender ("Lender") under the Loan Agreement, dated as of December[_], 2010 (as amended, restated, or otherwise modified from time to time, the "Loan Agreement"), by and among Lender, Issuer and DACON PROPERTIES, LLC, the within Note and all of Issuer's right, title and interest under the Loan Agreement, except Issuer's Retained Rights, as defined in the Loan Agreement.

IN WITNESS WHEREOF, the undersigned has set his hand as of the [_] day of December, 20 l 0.

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CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY

By ______________________________ __

Wayne Schell, Chair

E-5

ACKNOWLEDGMENT OF ENDORSEMENT AND ASSIGNMENT

DACON PROPERTIES, LLC, a corporation duly organized and validly existing under the laws of the State of California ("Borrower"), has made and delivered to the CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY ("Issuer") or its order that certain promissory note dated December[_], 2010 in the original principal sum of ELEVEN MILLION THREE HUNDRED TWENTY FIVE THOUSAND DOLLARS ($11,325,000) (as amended, restated, or otherwise modified from time to time, the "Note"). Borrower hereby acknowledges that Issuer has endorsed and sold, assigned and transferred to the order of UNION BANK, N.A. the Note and all obligations evidenced thereunder and rights and security relating thereto, except Issuer's Retained Rights (as defined in the Loan Agreement dated as of December [_], 2010 by and among Lender, Issuer and Borrower, amended, restated, or otherwise amended from time to time).

Dated: December [_], 2010

DACON PROPERTIES, LLC

Ian Wilcox,

4818-8339-4824.5 E-6

EXHIBIT F

FORM OF PROJECT FUND REQUISITION

Requisition No. __ _

DACON PROPERTIES, LLC, a corporation duly organized and validly existing under the laws of the State of California (the "Borrower"), as Borrower under that certain Loan Agreement, dated as of December [_], 2010 (the "Loan Agreement"), by and among CALIFORNIA ENTERPRISE DEVELOPMENT AUTHORITY (the "Authority"), UNION BANK, N.A. ("Lender") and Borrower, hereby requests Lender under the Loan Agreement to make payment from the Project Fund (as defined in the Loan Agreement) to the party or parties listed on Schedule A hereto:

In connection therewith, the undersigned officer of Borrower hereby certifies as follows:

1. All of the provisions of the Loan Agreement are incorporated herein by reference and capitalized terms used herein and not defined shall have the meanings assigned to them in the Loan Agreement.

2. The obligations in the stated amounts are a proper charge against the Project Fund and have not been previously paid.

3. All of Borrower's representations, covenants and warranties contained in the Loan Agreement were true and accurate in all material respects as of the date made, and remain true and accurate in all material respects as of the date of this Requisition, and Borrower has fully and satisfactorily performed all of its covenants and obligations to date required under the Loan Agreement.

4. This request for payment contains no items representing payment on account of any retained percentage entitled to be retained by Borrower at the date hereof.

06-7833.8

5. The undersigned has reviewed the provisions of the Tax Regulatory Agreement, and the payment of this requisition will not result in any proceeds of the obligation evidenced by the Loan Agreement being expended in violation of the provisions of the Tax Regulatory Agreement.

Dated: ___ _

DACON PROPERTIES, LLC

David Littman

APPROVED BY LENDER:

UNION BANK, N.A.

By ________________________ __

George Plazola, Vice President

4818-8339-4824.5 F-2

Payee

4818-8339-4824.5

SCHEDULE A

Address

F-3

Amount To Be Paid

Cost of Issuance Description

EXIDBITG

SCHEDULE OF PRINCIPAL COMPONENTS

See Attached

4818-8339-4824.5

SCHEDULE I

Outstanding Notional Balance Schedule USD 11,325,000.00 Swap Transaction between Union Bank, N.A. and Dacon Properties, LLC.

Calculation Calculation Pa1:ment Notional Notional Period(s} Period(s}

Date Amount Reduction Beginning Ending

111/2011 211/2011 2/1/2011 11,325,000.00 25,039.07 2/1/2011 311/2011 3/1/2011 11,299,960.93 25,103.75 3/1/2011 4/1/2011 411/2011 11,274,857.18 25,168.61 4/1/2011 5/1/2011 5/2/2011 11,249,688.57 25,233.62 5/1/2011 611/2011 611/2011 11,224,454.95 25,298.81 6/1/2011 7/1/2011 711/2011 11,199,156.14 25,364.17

7/1/2011 8/1/2011 811/2011 11,173,791.97 25,429.69

811/2011 911/2011 9/1/2011 11,148,362.28 25,495.38

9/1/2011 10/1/2011 10/3/2011 11,122,866.90 25,561.25

10/1/2011 1111/2011 11/1/2011 11,097,305.65 25,627.28 1111/2011 12/112011 12/1/2011 11,071,678.37 25,693.48

1211/2011 111/2012 1/3/2012 11,045,984.89 25,759.86

11112012 2/1/2012 2/1/2012 11,020,225.03 25,826.41

2/1/2012 311/2012 3/1/2012 10,994,398.62 25,893.12

3/1/2012 4/1/2012 4/2/2012 10,968,505.50 25,960.01 411/2012 5/112012 5/1/2012 10,942,545.49 26,027.08

511/2012 611/2012 6/112012 10,916,518.41 26,094.31

6/1/2012 7/112012 7/2/2012 10,890,424.10 26,161.72 7/112012 8/1/2012 8/1/2012 10,864,262.38 26,229.31

8/1/2012 9/112012 9/4/2012 10,838,033.07 26,297.07 9/112012 10/1/2012 10/1/2012 10,811,736.00 26,365.00

1011/2012 1111/2012 1111/2012 10,785,371.00 26,433.11

1111/2012 1211/2012 12/3/2012 10,758,937.89 26,501.40

12/1/2012 1/1/2013 112/2013 10,732,436.49 26,569.86

1/1/2013 2/1/2013 2/1/2013 10,705,866.63 26,638.50

2/1/2013 311/2013 3/1/2013 10,679,228.13 26,707.31

3/112013 411/2013 4/112013 10,652,520.82 26,776.31

411/2013 5/112013 511/2013 10,625,744.51 26,845.48

5/112013 6/1/2013 6/3/2013 10,598,899.03 26,914.83

6/112013 7/112013 7/1/2013 10,571,984.20 26,984.36 7/1/2013 8/1/2013 8/1/2013 10,544,999.84 27,054.07 8/1/2013 9/1/2013 9/3/2013 10,517,945.77 27,123.96 9/112013 10/1/2013 10/1/2013 10,490,821.81 27,194.03 10/112013 11/1/2013 11/1/2013 10,463,627.78 27,264.28 11/112013 12/1/2013 12/2/2013 10,436,363.50 27,334.71 12/112013 111/2014 1/2/2014 10,409,028.79 27,405.33

1/112014 2/112014 2/3/2014 10,381,623.46 27,476.13 2/1/2014 3/1/2014 3/3/2014 10,354,147.33 27,547.11

3/1/2014 4/1/2014 4/1/2014 10,326,600.22 27,618.27 411/2014 511/2014 5/1/2014 10,298,981.95 27,689.62

5/112014 6/1/2014 6/2/2014 10,271,292.33 27,761.15 6/1/2014 711/2014 7/1/2014 10,243,531.18 27,832.86

7/1/2014 8/1/2014 8/1/2014 10,215,698.32 27,904.77

8/1/2014 9/112014 9/2/2014 10,187,793.55 27,976.85

9/1/2014 10/1/2014 10/1/2014 10,159,816.70 28,049.13

10/1/2014 11/1/2014 11/3/2014 10,131,767.57 28,121.59

11/1/2014 12/1/2014 12/1/2014 10,103,645.98 28,194.23

12/1/2014 1/1/2015 1/2/2015 10,075,451.75 28,267.07

111/2015 2/1/2015 2/2/2015 10,047,184.68 28,340.09

211/2015 3/1/2015 3/2/2015 10,018,844.59 28,413.30

3/112015 4/1/2015 4/1/2015 9,990,431.29 28,486.71

411/2015 5/1/2015 5/1/2015 9,961,944.58 28,560.30

511/2015 6/1/2015 611/2015 9,933,384.28 28,634.08

6/1/2015 7/112015 7/1/2015 9,904,750.20 28,708.05

7/1/2015 8/112015 8/3/2015 9,876,042.15 28,782.21

8/1/2015 9/1/2015 9/1/2015 9,847,259.94 28,856.57

9/1/2015 10/1/2015 10/1/2015 9,818,403.37 28,931.11

10/1/2015 11/1/2015 11/2/2015 9,789,472.26 29,005.85

11/1/2015 12/1/2015 12/1/2015 9,760,466.41 29,080.78

12/1/2015 1/1/2016 1/4/2016 9,731,385.63 29,155.91

1/112016 2/1/2016 2/1/2016 9,702,229.72 29,231.23

2/112016 3/1/2016 3/1/2016 9,672,998.49 29,306.74

311/2016 4/112016 4/1/2016 9,643,691.75 29,382.45

4/1/2016 5/112016 5/2/2016 9,614,309.30 29,458.35

5/112016 6/1/2016 6/1/2016 9,584,850.95 29,534.46 611/2016 7/1/2016 7/1/2016 9,555,316.49 29,610.75

711/2016 8/112016 8/1/2016 9,525,705.74 29,687.25

8/112016 9/112016 9/1/2016 9,496,018.49 29,763.94

9/1/2016 10/112016 10/3/2016 9,466,254.55 29,840.83

10/112016 11/1/2016 1111/2016 9,436,413.72 29,917.92

11/112016 12/1/2016 12/1/2016 9,406,495.80 29,995.21

12/112016 111/2017 1/3/2017 9,376,500.59 30,072.69

11112017 2/1/2017 2/1/2017 9,346,427.90 30,150.38

2/1/2017 3/1/2017 3/1/2017 9,316,277.52 30,228.27

3/1/2017 4/1/2017 4/3/2017 9,286,049.25 30,306.36

4/112017 5/1/2017 5/1/2017 9,255,742.89 30,384.65

5/1/2017 6/112017 6/1/2017 9,225,358.24 30,463.14

6/1/2017 7/1/2017 7/3/2017 9,194,895.10 30,541.84

7/1/2017 8/1/2017 8/112017 9,164,353.26 30,620.74

8/1/2017 9/112017 9/1/2017 9,133,732.52 30,699.84

9/1/2017 10/1/2017 10/2/2017 9,103,032.68 30,779.15

10/112017 11/1/2017 11/1/2017 9,072,253.53 30,858.67

11/1/2017 12/1/2017 12/112017 9,041,394.86 30,938.38

12/112017 112/2018 112/2018 9,010,456.48 9,010,456.48