Modification of Construction Trust Deed


    EXHIBIT
      10.3.5

    


    RECORDATION
      REQUESTED BY:

    Cathay
      Bank

    Real
      Estate Department

    250
      S.
      Atlantic Blvd., 2nd Floor

    Monterey
      Park, CA 91754

    


    


    WHEN
      RECORDED MAIL TO:

    Cathay
      Bank

    Real
      Estate Department

    250
      S.
      Atlantic Blvd., 2nd Floor

    Monterey
      Park, CA 91754

    Attn:
      Angela Hui

    Re: 
      Loan No.
      RE-610050161

    


    SPACE
      ABOVE THIS LINE IS FOR RECORDER’S USE ONLY

    ________________________________________________________________________________________________________________

    


    MODIFICATION
      OF CONSTRUCTION TRUST DEED

    


    THIS
      MODIFICATION OF CONSTRUCTION TRUST DEED IS DATED AS OF April 5, 2006,
between
      DICON FIBEROPTICS, INC., a California corporation, whose address is 1689 Regatta
      Blvd., Richmond, CA 94804 (referred to below as “Trustor”), and CATHAY BANK, a
      California banking corporation, whose address is 777 North Broadway, Los
      Angeles, CA 90012 (referred to below as “Lender”). The purpose of this
      Modification is to reflect the extension of the term of the loan secured by
      the
      Deed of Trust (as defined below), a decrease in the interest rate to be applied
      to the unpaid principal balance of the Note (as defined below), and an agreement
      between Trustor and Lender with respect to the conditions under which Lender
      will release and reconvey a portion of the Real Property (as defined
      below).

    


    Deed
      of Trust. Trustor
      executed in favor of Lender as beneficiary a Construction Trust Deed dated
      August 24, 2000 that was recorded in the Official Records of the County of
      Contra Costa, California (the “Official Records”), on August 25, 2000 as
      Document Number 2000-0182834-00, as modified by a Modification of Construction
      Trust Deed dated November 20, 2001 and recorded in the Official Records on
      November 27, 2001 as Document Number 2001-0361073-00 and a Modification of
      Construction Trust Deed dated June 28, 2004 and recorded in the Official Records
      on September 3, 2004 as Document No. 2004-0342993-00 (such Construction Trust
      Deed as so modified, the “Deed of Trust”), covering that certain real property
      located in the City of Richmond, County of Contra Costa, State of California,
      as
      more particularly described on Exhibit “A” attached
      hereto (the “Real Property”). Capitalized terms used but not defined herein
      shall have the respective meanings assigned to them in the Deed of
      Trust.

    


    Modifications.
      Trustor
      and Lender hereby modify and amend the Deed of Trust as follows:

    


    1. Agreement
      for Partial Release. Notwithstanding
      anything to the contrary in the Deed of Trust or in the Term Loan Agreement
      between Trustor and Lender dated November 20, 2001, as amended by that certain
      Loan Modification and Extension Agreement and Amendment to Promissory Note
      between the parties dated June 28, 2004 and that certain Loan Modification
      and
      Extension Agreement and Amendment to Promissory Note dated as of even date
      herewith (such Term Loan Agreement as so amended, the “Term Loan Agreement”),
      simultaneously with the execution and delivery of this Modification Lender
      will
      grant partial reconveyance from the lien or charge of the Deed of Trust for
      the
      approximately 5.88 acres of vacant land described on Exhibit
“B” attached hereto, together with all appurtances thereto.
      Trustor shall
      pay all costs of executing and recording the partial reconveyance.

    


    2. Definition
      of Note.
      The
      definition of the term “Note” is modified to read in its entirety as follows:
      The word “Note” means the promissory note dated November 20, 2001, in the
      principal amount of $27,000,000.00 from Trustor to Lender, which note is an
      extension and renewal of the Construction Loan Promissory Note dated August
      24,
      2000, as such promissory note is amended and extended by that certain Loan
      Modification and Extension Agreement and Amendment to Promissory Note dated
      June
      28, 2004 and that certain Loan Modification and Extension Agreement and
      Amendment to Promissory Note dated as of even date herewith; together with
      all
      renewals, extensions, modifications, refinancings, and substitutions for such
      promissory note as so amended and extended. NOTICE
      TO TRUSTOR: THE PROMISSORY NOTE CONTAINS A VARIABLE INTEREST
      RATE.

    


    3. Securing
      Clause. The
      “securing” clause of the Deed of Trust is modified to include the obligations of
      the Note and the Term Loan Agreement as defined in paragraph 1 above among
      the
      obligations secured by the Deed of Trust.

    


    4. Continuing
      Validity. Except
      as
      expressly modified above, the terms of the Deed of Trust shall remain unchanged
      and in full force and effect. Consent by Lender to this Modification does not
      waive Lender’s right to require strict performance of the Deed of Trust as
      modified above nor obligate Lender to make any future modifications. Nothing
      herein shall constitute a satisfaction of the promissory note or loan agreement
      secured by the Deed of Trust.

    


    TRUSTOR
      ACKNOWLEDGES HAVING READ ALL OF THE PROVISIONS OF THIS MODIFICATION OF
      CONSTRUCTION TRUST DEED AND AGREES TO ITS TERMS. This
      Modification is dated as of the date first set forth above.

    


    


    TRUSTOR:

    DICON
      FIBEROPTICS, INC.,

    a
      California corporation

    


    


    


    By:
      /s/
      Ho-Shang Lee 

    Name:
      Ho-Shang Lee

    Title:
      President

    



    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    


    


    


    __________________________________________________________________________

    CERTIFICATE
      OF ACKNOWLEDGEMENT

    


    STATE
      OF
      CALIFORNIA  )

    )
      ss.

    COUNTY
      OF
      _______________) 

     

    


    On
      this
      _____ day of ________, 2006, before me, ____________________, the undersigned
      Notary Public, personally appeared Ho-Shang Lee, personally known to me or
      proved to me on the basis of satisfactory evidence to be the person whose name
      is subscribed to the within instrument and acknowledged to me that he executed
      the same in his authorized capacity, and that by his signature on the instrument
      the person, or the entity upon behalf of which the person acted, executed the
      instrument.

     

    WITNESS
      my hand and official seal.

    


    


    


    __________________________

    Notary
      Public


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

       

      EXHIBIT
        “A” 

       

      (Legal
        Description of the Real Property) 

       

       

      PARCEL
        ONE 

       

      Lot
        1 and
        2, of Parcel Map MS 753-04 Filed December 14, 2005, Book 195 of Maps, page
        26
        Contra Costa Records. 

       

      PARCEL
        TWO 

       

      A
        Non-Exclusive Easement For Irrigation Water Lines And Fire Lines, Appurtenant
        To
        Parcel One Hereinabove Described Over Undefined Portions of Lot 3 of Said
        Parcel
        Map And As Said Easement Is More Particularly Defined In The Owner’s Statement
        on Said Parcel Map 

       

      PARCEL
        THREE 

       

      A
        Non-Exclusive Easement For Telecommunication Facilities, Appurtenant To Parcel
        One Hereinabove Described Over That Portion of Lot 3 of Said Parcel Map
        Designated As “15’ Private Utility Easement” on Said Parcel Map MS 753-04


       

      PARCEL
        FOUR 

       

      A
        Non-Exclusive Easement For Private Sanitary Sewers, Appurtenant To Parcel
        One
        Hereinabove Described Over That Portion of Lot 3 of Said Parcel Map Designated
        As “10’ P.S.S.E.” on Said Parcel Map MS 753-04 

       

       

      
      


       



    
      
         

      

      
         

        
          

        

      

      
         

      

    


     

    EXHIBIT
      “B” 

     

    (Legal
      Description of the Release Property) 

     

    PARCEL
      ONE 

     

    Lot
      1, of
      Parcel Map MS 753-04 Filed December 14, 2005, Book 195 of Maps, page 26 Contra
      Costa Records. 

     

    PARCEL
      TWO 

     

    A
      Non-Exclusive Easement For Irrigation Water Lines And Fire Lines, Appurtenant
      To
      Parcel One Hereinabove Described Over Undefined Portions of Lot 3 of Said Parcel
      Map And As Said Easement Is More Particularly Defined In The Owner’s Statement
      on Said Parcel Map 

     

    PARCEL
      THREE 

     

    A
      Non-Exclusive Easement For Telecommunication Facilities, Appurtenant To Parcel
      One Hereinabove Described Over That Portion of Lot 3 of Said Parcel Map
      Designated As “15’ Private Utility Easement” on Said Parcel Map MS 753-04


     

    PARCEL
      FOUR 

     

    A
      Non-Exclusive Easement For Private Sanitary Sewers, Appurtenant To Parcel One
      Hereinabove Described Over That Portion of Lot 3 of Said Parcel Map Designated
      As “10’ P.S.S.E.” on Said Parcel Map MS 753-04