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| 1.  | AMOUNT      AND TERMS OF THE LINE OF CREDIT AND TERMLOAN |
|----------|----------------------------------------------------------|

| 1.1  | Line      of Credit; Limitations on Borrowings; Termination Date; Use of      Proceeds. |
|-----------|-----------------------------------------------------------------------------------------|

| (a) | Line of Credit and      Limitations on Borrowing. Wells Fargo shall make Advances to      Company under the Line of Credit that, together with the L/C Amount, shall      not at any time exceed in the aggregate the lesser of (i)      $2,500,000.00 (the "Maximum Line Amount"), or (ii) the Borrowing Base      limitations described in Section 1.2. Within these limits, Company may      periodically borrow, prepay in whole or in part, and reborrow. Wells Fargo has no obligation      to make an Advance during a Default Period or at any time Wells Fargo      believes that an Advance would result in an Event of      Default. |
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| (b) | Maturity and      Termination Dates. Company may request Line of Credit Advances from      the date that the conditions set forth in Section 3 are satisfied until      the earlier of: (i) November 30, 2011 (the "Maturity Date"), (ii) the date      Company terminates the Line of Credit, or (iii) the date Wells Fargo      terminates the Line of Credit following an Event of Default. (The earliest      of these dates is the "TerminationDate.") |
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| (c) | Use of Line of Credit      Proceeds. Company shall use the proceeds of each Line of Credit      Advance and each Letter of Credit for ordinary working capital      purposes. |
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| (d) | Revolving Note.      Company's obligation to repay Line of Credit Advances, regardless of how      initiated under Section 1.3, shall be evidenced by a revolving promissory      note (as renewed, amended or replaced from time to time, the "Revolving      Note"). |
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| 1.2  | Borrowing      Base; Mandatory Prepayment. |
|-----------|--------------------------------------------|

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| (b) | Mandatory Prepayment;      Overadvances. If unreimbursed Line of Credit Advances evidenced by      the Revolving Note plus the L/C Amount exceed the Borrowing Base or the      Maximum Line Amount at any time, then Company shall immediately prepay the      Revolving Note in an amount sufficient to eliminate the excess, and if      payment in full of the Revolving Note is insufficient to eliminate this      excess and the L/C Amount continues to exceed the Borrowing Base, then      Company shall deliver cash to Wells Fargo in an amount equal to the      remaining excess for deposit to the Special Account, unless in each case,      Wells Fargo has delivered to Company an Authenticated Record consenting to      the Overadvance prior to its      occurrence, in which event the Overadvance shall be temporarily permitted      on such terms and conditions as Wells Fargo in its sole discretion may      deem appropriate, including the payment of additional fees or interest, or      both. |
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| 1.3  | Procedures      for Line of Credit Advances. |
|-----------|----------------------------------------------|

| (a) | Advances to Operating      Account. Line of Credit Advances shall be credited to Company's      demand deposit account maintained with Wells Fargo (the "Operating      Account"), unless the parties agree in a Record Authenticated by both of      them to disburse to anotheraccount. |
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| (b) | Protective Advances;      Advances to Pay Indebtedness Due. Wells Fargo may initiate a      Floating Rate Advance on the Line of Credit in its sole discretion for any      reason at any time, without Company's compliance with any of the      conditions of this Agreement, and (i) disburse the proceeds directly to      third Persons in order to protect Wells Fargo's interest in Collateral or      to perform any of Company's obligations under this Agreement, or (ii)      apply the proceeds to the amount of any Indebtedness then due and payable      to Wells Fargo. |
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| 1.4  | Collection      of Accounts and Application to RevolvingNote. |
|-----------|---------------------------------------------------------------|

| (a) | The Collection      Account. Company has granted a security interest to Wells Fargo in      the Collateral, including all Accounts. Except as otherwise agreed by both      parties in an Authenticated Record, all Proceeds of Accounts and other      Collateral, upon receipt or collection, shall be deposited each Business      Day into the Collection Account. Funds so deposited ("Account Funds") are      the property of Wells Fargo, and may only be withdrawn from the Collection      Account by Wells Fargo. |
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| (b) | Payment of Accounts by      Company's Account Debtors. Company shall instruct all account      debtors to make payments, as Lender shall designate, either directly to      the Lockbox for deposit by Wells Fargo directly to the Collection Account,      or instruct them to deliver such payments to Wells Fargo by wire transfer,      ACH, or other means as Wells Fargo may direct for deposit to the      Collection Account or for direct application to the Line of Credit. If      Company receives a payment or the Proceeds of Collateral directly, Company      will promptly deposit the payment or Proceeds into the Collection Account.      Until deposited, it will hold all such payments and Proceeds in trust for      Wells Fargo without commingling with other funds or property. All deposits      held in the Collection Account shall constitute Proceeds of Collateral and      shall not constitute the payment of  Indebtedness. |
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| (c) | Application of      Payments to Revolving Note. Wells Fargo will withdraw Account Funds      deposited to the Collection Account and pay down borrowings on the Line of      Credit by applying them to the Revolving Note on the first Business Day      following the Business Day of deposit to the Collection Account, or, if      payments are received by Wells Fargo that are not first deposited to the      Collection Account pursuant to any treasury management service provided to      Company by Wells Fargo, such payments shall be applied to the Revolving      Note as provided in the Master Agreement for Treasury Management Services      and the relevant servicedescription. |
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| 1.5  | Real      Estate Loan. |
|-----------|------------------------|

| (a) | Real Estate      Loan. Wells Fargo shall extend the Real Estate Loan to Company      through a single Advance in the amount of  $5,000,000.00. |
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| (b) | Real Estate Term      Note. Company's obligation to repay the Real Estate Loan shall be      evidenced by an installment promissory note (as renewed, amended, or      replaced from time to time, the "Real Estate Term  Note"). |
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| (c) | Real Estate Loan      Advance and Disbursement. Subject to the terms and conditions of      this Agreement, the Real Estate Loan Advance shall be made on the same      date as the initial Advance on the Line of  Credit. |
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| (d) | Reserve; Cash      Collateralization. Concurrently with the Real Estate Loan Advance,      Lender shall reserve $1,500,000.00 from the proceeds Real Estate Loan      Advance (including any interest or profits thereon, the "Cash      Collateral"), which Cash Collateral shall be deposited in an account with      Lender. The Cash Collateral shall be held by Lender as collateral for the      payment and performance of the obligations of Company under this      Agreement. Lender shall have exclusive dominion and control, including the      exclusive right of withdrawal, over such account. Other than any interest      earned on the investment of such deposits, which investments shall be made      at the option and sole discretion of Lender and at Company's risk and      expense, such deposits shall not bear interest. Interest or profits, if      any, on such investments shall accumulate in such account. The Cash      Collateral in such account may be applied by Lender to reimburse Lender      for expenses recoverable under the Loan Documents, and to the extent not      so applied, shall be held for the satisfaction of the Obligations of the      Company. Lender agrees to release the Cash Collateral to Company upon      delivery to Lender of publicly filed financial statements for Company,      reflecting debt service coverage in excess of 1.0 for a period of three      rolling quarters, and provided that no default or Event of Default exists      and provided that the Company's unadvanced amount under the Line of Credit      is greater than $350,000.00. |
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| (e) | Setoff.      Whenever an Event of Default shall have occurred and be continuing on      account of which Lender shall have the right to exercise any of its rights      hereunder, Company hereby irrevocably authorizes Lender to set off the      Obligations under this Agreement and the other Loan Documents or otherwise      owed to Lender against the Cash Collateral and all deposits and credits of      Company with, and any all claims of Company against, Lender, but only to      the extent that said Liabilities of Company to Lender shall be then due,      whether by acceleration orotherwise |
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| (f) | Payments and      Adjustments to Payments. The unpaid principal amount of the Real      Estate Term Note shall be amortized over a 120 month period, but shall be      due and payable in equal monthly principal installments of $41,667.00,      beginning on February 1, 2009, and on the first calendar day of each      succeeding month until the earlier of December 31, 2018 or, if Lender      elects, the Termination Date, when the unpaid principal and interest      evidenced by the Real Estate Term Note shall be fully due and payable.      Additionally, accrued and unpaid interest shall be due and payable      monthly, beginning on January 1, 2009 and on the first calendar day of      each succeeding month until the earlier of December 31, 2018 or, if Lender      elects, the Termination Date. Payments shall be collected by Wells Fargo      through a debit to the Real Estate Term Note and a simultaneous Line of      Credit Advance in the same amount, or by such other method as the parties      may agree. Proceeds from the liquidation of Collateral acquired with Real      Estate Loan proceeds will be applied first to the Real Estate Term Note,      then to the Term Loan and Line of Credit in such order as Lender may      elect. |
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| (g) | Prepayments and      Mandatory Prepayments. Company may prepay the Real Estate Loan at      any time. If Wells Fargo obtains an appraisal of the Real Estate at any      time as permitted under this Agreement, and the appraisal shows the      aggregate unpaid principal amount of the Real Estate Term Note to exceed      sixty-three percent (63%) of the appraised value of the Real Estate, then      Company, shall immediately prepay the unpaid principal of the Real Estate      Term Note in the amount of suchexcess. |
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| (h) | Collection of      Prepayments and Related Fees. All Real Estate Loan prepayments,      including mandatory prepayments and prepayments due on the Termination      Date, must be accompanied by any prepayment and breakage fees payable      under this Agreement, which will be applied to the most remote principal      installments then due and payable. Any prepayment of principal and any      related fees shall be collected by Wells Fargo through a debit to the Real      Estate Term Note and a simultaneous Line of Credit Advance in the same      amount, or by such other method as the parties may  agree. |
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| 1.6 | Term      Loan |
|-----|----------------|

| (a) | Term Loan.      Wells Fargo shall extend the Term Loan to Company through a single Advance      in an amount not in excess of the lesser of (i)      $2,500,000.00, (ii) ninety percent (90%) of the Net Forced Liquidation      Value of Company's Eligible Equipment, or (iii) eighty percent (80%) of      the Net Orderly Liquidation Value of Company's Eligible      Equipment. |
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| (b) | Term Note.      Company's obligation to repay the Term Loan and each Term Loan Advance      shall be evidenced by an installment promissory note (as renewed, amended,      or replaced from time to time, the "TermNote"). |
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| (c) | Term Loan Advance and      Disbursement. The Term Loan Advance shall be made no later than      June 30, 2010, and only upon satisfaction of the conditions in Section      3.3. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | Payments and      Adjustments to Payments. The unpaid principal amount of the Term      Note shall be amortized over a 36 month period, but shall be due and      payable in equal monthly installments of principal and interest beginning      on the first calendar day of the first calendar month after Lender makes      the Term Loan Advance, and on the first calendar day of each succeeding      month until the earlier of November 30, 2011 or the Termination Date, when      the unpaid principal and interest evidenced by the Term Note shall be      fully due and payable. Payments shall be collected by Wells Fargo through      a debit to the Term Note and a simultaneous Line of Credit Advance in the      same amount, or by such other method as the parties may agree. Proceeds      from the liquidation of Collateral acquired with Term Loan proceeds will      be applied first to the Term Note, then to the Real Estate Loan and Line      of Credit in such order as Lender mayelect. |
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| (e) | Prepayments and      Mandatory Prepayments. Company may prepay the Term Loan at any      time. If Wells Fargo obtains an appraisal of the Equipment at any time as      permitted under this Agreement, and the appraisal shows the aggregate      unpaid principal amount of the Term Note to exceed (i) ninety percent      (90%) of the Net Forced Liquidation Value of Company's Eligible Equipment,      or (ii) eighty percent (80%) of the Net Orderly Liquidation Value of      Company's Eligible Equipment, then Company, shall immediately prepay the      unpaid principal of the Term Note in the amount of such      excess. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f) | Collection of      Prepayments and Related Fees. All Term Loan prepayments, including      mandatory prepayments and prepayments due on the Termination Date, must be      accompanied by any prepayment and breakage fees payable under this      Agreement, which will be applied to the most remote principal installments      then due and payable. Any prepayment of principal and any related fees      shall be collected by Wells Fargo through a debit to the Term Note and a      simultaneous Line of Credit Advance in the same amount, or by such other      method as the parties may agree. |
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| 1.7  | Interest      and Interest Related Matters. |
|-----------|---------------------------------------------|

| (a) | Interest Rates      Applicable to Line of Credit and Term Loan. Except as otherwise      provided in this Agreement, the unpaid principal amount of each Line of      Credit Advance evidenced by the Revolving Note, the Real Estate Loan      Advance evidenced by the Real Estate Term Note, and the Term Loan Advance      evidenced by the Term Note, shall accrue interest at an annual interest      rate calculated as follows: |
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| (b) | Minimum Interest      Charge. Notwithstanding the other terms of Section 1.7 to the      contrary, and except as limited by the usury savings provision of Section      1.7(e), Company shall pay Wells Fargo at least $10,000.00 of interest each      calendar month (the "Minimum Interest Charge") during the term of this      Agreement, and Company shall pay any deficiency between the Minimum      Interest Charge and the amount of interest otherwise payable on first day      of each month and on the TerminationDate. |
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| (c) | Default Interest      Rate. Commencing on the day an Event of Default occurs, through and      including the date identified by Wells Fargo in a Record as the date that      the Event of Default has been waived (each such period a "Default      Period"), or during a time period specified in Section 1.10, or at any      time following the Termination Date, in Wells Fargo's sole discretion and      without waiving any of its other rights or remedies, the principal amount      of the Revolving Note, the Real Estate Term Note, and the Term Note shall      bear interest at a rate that is three percent (3.0%) above the contractual      rate set forth in Section 1.7(a) (the "Default Rate"), or any lesser rate      that Wells Fargo may deem appropriate, starting on the first day of the      month in which the Default Period begins through the last day of that      Default Period, or any shorter time period to which Wells Fargo may agree      in an Authenticated Record. |
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| (d) | Interest Accrual on      Payments Applied to Revolving Note. Payments received by Wells      Fargo shall be applied to the Revolving Note as provided in Section      1.4(c), but the principal amount paid down shall continue to accrue      interest through the end of the second Business Day following the Business      Day that the payment was applied to the Revolving  Note. |
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| (e) | Usury. No      interest rate shall be effective which would result in a rate greater than      the highest rate permitted by law. Payments in the nature of interest and      other charges made under any Loan Documents or any other document or      agreement described in or related to this Agreement that are later      determined to be in excess of the limits imposed by applicable usury law      will be deemed to be a payment of principal, and the Indebtedness shall be      reduced by that amount so that such payments will not be deemed      usurious. |
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| 1.8  | Fees. |
|-----------|-------|

| (a) | Origination      Fee. Company shall pay Wells Fargo a one time origination fee of      $100,000.00, which fee shall be fully earned and payable upon the      execution of this Agreement. |
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| (b) | Unused Line      Fee. Company shall pay Wells Fargo an annual unused line fee of one      quarter of one percent (0.25%) of the daily average of the Maximum Line      Amount reduced by outstanding Advances and the L/C Amount, from the date      of this Agreement to and including the Termination Date (the "Unused      Amount"), which unused line fee shall be payable monthly in arrears on the      first day of each month and on the Termination  Date. |
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| (c) | Facility Fee.      Company shall pay Wells Fargo an annual facility fee of $25,000.00, which      facility fee shall be payable annually on each the fifteenth of December      each year, commencing December 15,2009. |
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| (d) | Collateral Exam      Fees. Company shall pay Wells Fargo fees in connection with any      collateral exams, audits or inspections conducted by or on behalf of Wells      Fargo at the current rates established from time to time by Wells Fargo as      its collateral exam fees (which fees are currently $1,000.00 per day per      collateral examiner), together with all actual out-of-pocket costs and      expenses incurred in conducting any collateral examination or      inspection. |
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| (e) | Credit Facility      Termination and/or Reduction Fees. If (i) Wells Fargo terminates      the Line of Credit, the Real Estate Loan and the Term Loan (collectively,      the "Credit Facility") during a Default Period, or if (ii) Company      terminates or prepays all or any portion of the Credit Facility on a date      prior to the Maturity Date, or if (iii) Company and Wells Fargo agree to      reduce the Maximum Line Amount, then Company shall pay Wells Fargo as      liquidated damages a termination or reduction fee in an amount equal to      the percentage of the Maximum Line Amount plus the      principal balance outstanding on the Real Estate Loan, calculated as      follows: (A) three percent (3.0%) if the termination or reduction occurs      on or before the first anniversary of the first Line of Credit Advance;      (B) two percent (2.0%) if the termination or reduction occurs after the      first anniversary of the first Line of Credit Advance, but on or before      the second anniversary of the first Line of Credit Advance; and (C) one      percent (1.0%) if the termination or reduction occurs after the second      anniversary of the first Line of CreditAdvance. |
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| (f) | Overadvance      Fees. Company shall pay a $500.00 Overadvance fee for each day that      an Overadvance exists which was not agreed to by Wells Fargo in an      Authenticated Record prior to its occurrence; provided that Wells Fargo's      acceptance of the payment of such fees shall not constitute either consent      to the Overadvance or waiver of the resulting Event of Default; and      following an Event of Default, this fee shall increase to $1,000.00 for      each day that an Overadvance exists, commencing on the first day of the      month in which the Default Period begins and continuing through the last      day of such Default Period, or any shorter time period that Wells Fargo in      its sole discretion may deem appropriate, without waiving any of its other      rights and remedies. Company shall pay additional Overadvance fees and      interest in such amounts and on such terms as Wells Fargo in its sole      discretion may consider appropriate for any Overadvance to which Wells      Fargo has specifically consented in an Authenticated Record prior to its      occurrence. |
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| (g) | Treasury Management      Fees. Company will pay service fees to Wells Fargo for treasury      management services provided pursuant to the Master Agreement for Treasury      Management Services or any other agreement entered into by the parties, in      the amount prescribed in Wells Fargo's current service fee      schedule. |
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| (h) | Letter of Credit      Fees. Company shall pay a fee with respect to each Letter of Credit      issued by Wells Fargo of three percent (3.0%) of the aggregate undrawn      amount of the Letter of Credit (the "Aggregate Face Amount") accruing      daily from and including the date the Letter of Credit is issued until the      date that it either expires or is returned, which shall be payable monthly      in arrears on the first day of each month and on the date that the Letter      of Credit either expires or is returned; and following an Event of      Default, this fee shall increase to six percent (6.0%) of the Aggregate      Face Amount, commencing on the first day of the month in which the Default      Period begins and continuing through the last day of such Default Period,      or any shorter time period that Wells Fargo in its sole discretion may      deem appropriate, without waiving any of its other rights and      remedies. |
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| (i) | Letter of Credit      Administrative Fees. Company shall pay all administrative fees      charged by Wells Fargo in connection with the honoring of drafts under any      Letter of Credit, and any amendments to or transfers of any Letter of      Credit, and any other activity with respect to the Letters of Credit at      the current rates published by Wells Fargo for such services rendered on      behalf of its customers generally. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (j) | Other Fees and      Charges. Wells Fargo may impose additional fees and charges during      a Default Period for (i) waiving an Event of Default, or for (ii) the      administration of Collateral by Wells Fargo. All such fees and charges      shall be imposed at Wells Fargo's sole discretion following oral notice to      Company on either an hourly, periodic, or flat fee basis, and in lieu of      or in addition to imposing interest at the Default Rate, and Company's      request for an Advance following such notice shall constitute Company's      agreement to pay such fees andcharges. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (k) | Termination and      Prepayment Fees Following Transfer Between Wells Fargo Operating      Divisions. If the Loan Documents, following Company's request and      the consent of Wells Fargo Business Credit (which consent may be withheld      by Wells Fargo Business Credit in its sole discretion), are transferred at      any time after the expiration of 24 months from the date of this      Agreement, to an operating division of Wells Fargo other than Wells Fargo      Business Credit, the transfer will not be deemed a termination or      prepayment resulting in the payment of termination and/or prepayment fees,      provided that Company agrees, at the time of transfer, to the payment of      comparable fees in an amount not less than that set forth in this      Agreement, in the event that any facilities extended under this Agreement      are terminated early or prepaid after the  transfer. |
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| 1.9 | Interest      Accrual; Principal and Interest Payments;  Computation. |
|-----|-----------------------------------------------------------------------|

| (a) | Interest Payments and      Interest Accrual. Accrued and unpaid interest under the Revolving      Note, the Real Estate Term Note, the Term Note on Floating Rate Advances      shall be due and payable on the first day of each month (each an "Interest      Payment Date") and on the Termination Date, and shall be paid in the      manner provided in Section 1.4(c) and Section 1.5(f). Interest shall      accrue from the most recent date to which interest has been paid or, if no      interest has been paid, from the date of Advance to the Interest Payment      Date. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Payment of Revolving      Note, Real Estate Term Note, and Term Note Principal. The principal      amount of the Revolving Note, Real Estate Term Note, and Term Note shall      be paid from time to time as provided in this Agreement, and shall be      fully due and payable on the TerminationDate. |
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| (c) | Payments Due on      Non-Business Days. If an Interest Payment Date or the Termination      Date falls on a day which is not a Business Day, payment shall be made on      the next Business Day, and interest shall continue to accrue during that      time period. |
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| (d) | Computation of      Interest and Fees. Interest accruing on the unpaid principal amount      of the Revolving Note and fees payable under this Agreement shall be      computed on the basis of the actual number of days elapsed in a year of      360 days. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| (e) | Liability      Records. Wells Fargo shall maintain accounting and bookkeeping      records of all Advances and payments with respect to the Indebtedness in      such form and content as Wells Fargo in its sole discretion deems      appropriate. Wells Fargo's calculation of the amount of the Indebtedness      shall be presumed correct unless proven otherwise by Company. Upon      request, Company will admit and certify to Wells Fargo in a Record the      exact unpaid principal amount of Indebtedness that Company then believes      to be due and payable to Wells Fargo. Any billing statement or accounting      provided by Wells Fargo shall be conclusive and binding unless Company      notifies Wells Fargo in a detailed Record of its intention to dispute the      billing statement or accounting within 30 days of  receipt. |
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| 1.10 | Termination,      Reduction or Non-Renewal of Line of Credit by Company;    Notice. |
|------|-------------------------------------------------------------------------------------|

| (a) | Termination or      Reduction by Company after Advance Notice. Company may terminate or      reduce the Line of Credit, or terminate the Real Estate Loan or Term Loan,      at any time prior to the Maturity Date, if it (i) delivers an      Authenticated Record notifying Wells Fargo of its intentions at least 90      days prior to the proposed Termination Date, (ii) pays Wells Fargo the      termination fee set forth in Section 1.8(e), and (iii) pays the      Indebtedness in full or down to the reduced Maximum Line Amount. Any      reduction in the Maximum Line Amount shall be in multiples of      $100,000.00. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Termination or      Reduction by Company without Advance Notice. If Company fails to      deliver Wells Fargo timely notice of its intention to terminate the Line      of Credit, Real Estate Loan or Term Loan, or reduce the Maximum Line      Amount as provided in Section 1.10(a), Company may nevertheless terminate      the Line of Credit, Real Estate Loan or Term Loan, or reduce the Maximum      Line Amount and pay the Indebtedness in full or down to the reduced      Maximum Line Amount if it (i) pays the termination fee set forth in      Section 1.8(e), and (ii) pays additional interest for each day that the      notice was short of the required 90 days notice, which interest shall be      in an amount that is equal to the greater of (A) interest calculated at      the Default Rate based on the Company's average borrowings under the Line      of Credit for the two months prior to the date that Wells Fargo receives      delivery of an Authenticated Record giving it actual notice of Company's      intention to terminate or reduce the Line of Credit, or (B) the unused      line fee for the 3 months prior to the date that Wells Fargo receives      delivery of an Authenticated Record giving it actual notice of Company's      intention to terminate any portion of the Credit Facility or reduce the      Line of Credit, calculated as provided in Section 1.8(b) of this      Agreement. |
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| (c) | Non-Renewal by      Company; Notice. If Company does not wish Wells Fargo to consider      renewal of the Line of Credit on the next Maturity Date, Company shall      deliver an Authenticated Record to Wells Fargo at least 90 days prior to      the Maturity Date notifying Wells Fargo of its intention not to renew. If      Company fails to deliver to Wells Fargo such timely notice, then the      Revolving Note shall accrue interest at the Default Rate commencing on the      90th      day prior to the Maturity Date and continuing through the date that Wells      Fargo receives delivery of an Authenticated Record giving it actual notice      of Company's intention not torenew. |
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| 1.11 | Letters      of Credit. |
|------|-------------------------|

| (a) | Issuance of Letters of      Credit; Amount. Wells Fargo, subject to the terms and conditions of      this Agreement, shall issue, on or after the date that Wells Fargo is      obligated to make its first Advance under this Agreement and prior to the      Termination Date, one or more irrevocable standby letters of credit (each,      a "Letter of Credit", and collectively, "Letters of Credit") for Company's      account. Wells Fargo will not issue any Letter of Credit if the face      amount of the Letter of Credit would exceed the lesser of: (i) $250,000.00      less the L/C Amount, or (ii) the Borrowing Base, less an amount equal to      aggregate unreimbursed Line of Credit Advances plus the L/C      Amount. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Additional Letter of      Credit Documentation. Prior to requesting issuance of a Letter of      Credit, Company shall first execute and deliver to Wells Fargo a Standby      Letter of Credit Agreement or a Commercial Letter of Credit Agreement, as      applicable, an L/C Application, and any other documents that Wells Fargo      may request, which shall govern the issuance of the Letter of Credit and      Company's obligation to reimburse Wells Fargo for any related Letter of      Credit draws (the "Obligation of  Reimbursement"). |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | Expiration. No      Letter of Credit shall be issued that has an expiry date that is later      than one year from the date of issuance, or the Maturity Date in effect on      the date of issuance, whichever isearlier. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | Obligation of      Reimbursement During Default Periods. If Company is unable, due to      the existence of a Default Period or for any other reason, to obtain an      Advance to pay any Obligation of Reimbursement, Company shall pay Wells      Fargo on demand and in immediately available funds, the amount of the      Obligation of Reimbursement together with interest, accrued from the date      presentment of the underlying draft until reimbursement in full at the      Default Rate. Wells Fargo is authorized, alternatively and in its sole      discretion, to make an Advance in an amount sufficient to discharge the      Obligation of Reimbursement and pay all accrued but unpaid interest and      fees with respect to the Obligation of  Reimbursement. |
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| 1.12 | Special      Account. If the Line of Credit is terminated for any reason while a      Letter of Credit is outstanding, or if after prepayment of the Revolving      Note the L/C Amount continues to exceed the Borrowing Base, then Company      shall promptly pay Wells Fargo in immediately available funds for deposit      to the Special Account, an amount equal, as the case may be, to either (a)      the L/C Amount plus any anticipated fees and costs, or (b) the amount by      which the L/C Amount exceeds the Borrowing Base. If Company fails to pay      these amounts promptly, then Wells Fargo may in its sole discretion make      an Advance to pay these amounts and deposit the proceeds to the Special      Account. The Special Account shall be an interest bearing account      maintained with Wells Fargo or any other financial institution acceptable      to Wells Fargo. Wells Fargo may in its sole discretion apply amounts on      deposit in the Special Account to the Indebtedness. Company may not      withdraw amounts deposited to the Special Account until the Line of Credit      has been terminated and all outstanding Letters of Credit have either been      returned to Wells Fargo or have expired and the Indebtedness has been      fully paid. |
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| 2. | SECURITY      INTEREST AND OCCUPANCY OF COMPANY'SPREMISES |
|----|-----------------------------------------------------------|

| 2.1 | Grant of Security Interest.      Company hereby pledges, assigns and grants to Wells Fargo, for the      benefit of Wells Fargo and as agent for Wells Fargo Merchant Services,      L.L.C., a Lien and security interest (collectively referred to as the      "Security Interest") in the Collateral, as security for the payment and      performance of all Indebtedness. Following request by Wells Fargo, Company      shall grant Wells Fargo, for the benefit of Wells Fargo and as agent for      Wells Fargo Merchant Services, L.L.C., a Lien and security interest in all      commercial tort claims that it may have against any  Person. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.2 | Notifying Account Debtors and      Other Obligors; Collection of Collateral. Wells Fargo may at any      time (whether or not a Default Period then exists) deliver a Record giving      an account debtor or other Person obligated to pay an Account, a General      Intangible, or other amount due, notice that the Account, General      Intangible, or other amount due has been assigned to Wells Fargo for      security and must be paid directly to Wells Fargo. Company shall join in      giving such notice and shall Authenticate any Record giving such notice      upon Wells Fargo's request. After Company or Wells Fargo gives such      notice, Wells Fargo may, but need not, in Wells Fargo's or in Company's      name, demand, sue for, collect or receive any money or property at any      time payable or receivable on account of, or securing, such Account,      General Intangible, or other amount due, or grant any extension to, make      any compromise or settlement with or otherwise agree to waive, modify,      amend or change the obligations (including collateral obligations) of any      account debtor or other obligor. Wells Fargo may, in Wells Fargo's name or      in Company's name, as Company's agent and attorney-in-fact, notify the      United States Postal Service to change the address for delivery of      Company's mail to any address designated by Wells Fargo, otherwise      intercept Company's mail, and receive, open and dispose of Company's mail,      applying all Collateral as permitted under this Agreement and holding all      other mail for Company's account or forwarding such mail to Company's last      known address. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.3 | Assignment of Insurance.      As additional security for the Indebtedness, Company hereby assigns      to Wells Fargo and to Wells Fargo Merchant Services, L.L.C., all rights of      Company under every policy of insurance covering the Collateral and all      business records and other documents relating to it, and all monies      (including proceeds and refunds) that may be payable under any policy, and      Company hereby directs the issuer of each policy to pay all such monies      directly to Wells Fargo. At any time, whether or not a Default Period then      exists, Wells Fargo may (but need not), in Wells Fargo's or Company's      name, execute and deliver proofs of claim, receive payment of proceeds and      endorse checks and other instruments representing payment of the policy of      insurance, and adjust, litigate, compromise or release claims against the      issuer of any policy. Any monies received under any insurance policy      assigned to Wells Fargo, other than liability insurance policies, or      received as payment of any award or compensation for condemnation or      taking by eminent domain, shall be paid to Wells Fargo and, as determined      by Wells Fargo in its sole discretion, either be applied to prepayment of      the Indebtedness or disbursed to Company under staged payment terms      reasonably satisfactory to Wells Fargo for application to the cost of      repairs, replacements, or restorations which shall be effected with      reasonable promptness and shall be of a value at least equal to the value      of the items or property destroyed. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 2.4 | Company's      Premises |
|-----|-------------------------|

| (a) | Wells Fargo's Right to      Occupy Company's Premises. Company hereby grants to Wells Fargo the      right, at any time during a Default Period and without notice or consent,      to take exclusive possession of all locations where Company conducts its      business or has any rights of possession, including the locations      described on Exhibit B (the      "Premises"), until the earlier of (i) payment in full and discharge of all      Indebtedness and termination of the Line of Credit, or (ii) final sale or      disposition of all items constituting Collateral and delivery of those      items to purchasers. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Wells Fargo's Use of      Company's Premises. Wells Fargo may use the Premises to store,      process, manufacture, sell, use, and liquidate or otherwise dispose of      items that are Collateral, and for any other incidental purposes deemed      appropriate by Wells Fargo in goodfaith. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | Company's Obligation      to Reimburse Wells Fargo. Wells Fargo shall not be obligated to pay      rent or other compensation for the possession or use of any Premises, but      if Wells Fargo elects to pay rent or other compensation to the owner of      any Premises in order to have access to the Premises, then Company shall      promptly reimburse Wells Fargo all such amounts, as well as all taxes,      fees, charges and other expenses at any time payable by Wells Fargo with      respect to the Premises by reason of the execution, delivery, recordation,      performance or enforcement of any terms of this  Agreement. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.5 | License. Without      limiting the generality of any other Security Document, Company hereby      grants to Wells Fargo a non-exclusive, worldwide and royalty-free license      to use or otherwise exploit all Intellectual Property Rights of Company      for the purpose of: (a) completing the manufacture of any in-process      materials during any Default Period so that such materials become saleable      Inventory, all in accordance with the same quality standards previously      adopted by Company for its own manufacturing and subject to Company's      reasonable exercise of quality control; and (b) selling, leasing or      otherwise disposing of any or all Collateral during any Default      Period. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.6  | Financing      Statements. |
|-----------|----------------------------|

| (a) | Authorization to      File. Company authorizes Wells Fargo to file financing statements      describing Collateral to perfect Wells Fargo's Security Interest in the      Collateral, and Wells Fargo may describe the Collateral as "all personal      property" or "all assets" or describe specific items of Collateral      including commercial tort claims as Wells Fargo may consider necessary or      useful to perfect the Security Interest. All financing statements filed      before the date of this Agreement to perfect the Security Interest were      authorized by Company and are hereby  re-authorized. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Termination.      Wells Fargo shall, at Company's expense, release or terminate any filings      or other agreements that perfect the Security Interest, provided that      there are no suits, actions, proceedings or claims pending or threatened      against any Indemnitee under this Agreement with respect to any      Indemnified Liabilities, upon Wells Fargo's receipt of the following, in      form and content satisfactory to Wells Fargo: (i) cash payment in full of      all Indebtedness and a completed performance by Company with respect to      its other obligations under this Agreement, (ii) evidence that the      commitment of Wells Fargo to make Advances under the Line of Credit or      under any other facility with Company has been terminated, (iii) a release      of all claims against Wells Fargo by Company relating to Wells Fargo's      performance and obligations under the Loan Documents, and (iv) an      agreement by Company, any guarantor, and any new lender to Company to      indemnify Wells Fargo for any payments received by Wells Fargo that are      applied to the Indebtedness as a final payoff that may subsequently be      returned or otherwise not paid for anyreason. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 2.7 | Setoff. Wells Fargo may      at any time, in its sole discretion and without demand or notice to      anyone, setoff any liability owed to Company by Wells Fargo against any      Indebtedness, whether or not due. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.8 | Collateral Related Matters.      This Agreement does not contemplate a sale of Accounts or chattel      paper, and, as provided by law, Company is entitled to any surplus and      shall remain liable for any deficiency. Wells Fargo's duty of care with      respect to Collateral in its possession (as imposed by law) will be deemed      fulfilled if it exercises reasonable care in physically keeping such      Collateral, or in the case of Collateral in the custody or possession of a      bailee or other third Person, exercises reasonable care in the selection      of the bailee or third Person, and Wells Fargo need not otherwise      preserve, protect, insure or care for such Collateral. Wells Fargo shall      not be obligated to preserve rights Company may have against prior      parties, to liquidate the Collateral at all or in any particular manner or      order or apply the Proceeds of the Collateral in any particular order of      application. Wells Fargo has no obligation to clean-up or prepare      Collateral for sale. Company waives any right it may have to require Wells      Fargo to pursue any third Person for any of the    Indebtedness. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.9 | Notices Regarding Disposition      of Collateral. If notice to Company of any intended disposition of      Collateral or any other intended action is required by applicable law in a      particular situation, such notice will be deemed commercially reasonable      if given in the manner specified in Section 7.4 at least ten calendar days      before the date of intended disposition or other  action. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3. | CONDITIONS      PRECEDENT |
|----|---------------------------|

| 3.1 | Conditions      Precedent to Initial Advance and Issuance of Initial Letter of      Credit. |
|-----|---------------------------------------------------------------------------------------------|

----

| 3.2 | Additional Conditions Precedent      to All Advances and Letters of Credit. Wells Fargo's obligation to      make any Advance (including the initial Advance) or issue any Letter of      Credit shall be subject to the further additional conditions: (a) that the      representations and warranties described in Exhibit D are      correct on the date of the Advance or the issuance of the Letter of      Credit, except to the extent that such representations and warranties      relate solely to an earlier date; and (b) that no event has occurred and      is continuing, or would result from the requested Advance or issuance of      the Letter of Credit that would result in an Event of    Default. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.3 | Additional Conditions Precedent      to Term Loan Advance. Wells Fargo's obligation to make the Term      Loan Advance shall be subject to the further additional condition that      Company shall have provided to Lender an appraisal of Company's equipment      in form and substance acceptable to Lender, as well as evidence      satisfactory to Lender in its sole and absolute discretion, that (i)      Company's operations have produced a positive cash flow for at least 3      rolling fiscal quarters as determined in accordance with GAAP, and (ii)      Company is current with its tradevendors. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.  | REPRESENTATIONS      AND WARRANTIES |
|----------|-------------------------------------|

| 5.  | COVENANTS |
|----------|-----------|

| 5.1 | Reporting Requirements.      Company shall deliver to Wells Fargo the following information,      compiled where applicable using GAAP consistently applied, in form and      content acceptable to Wells Fargo: |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a) | Annual Financial      Statements. As soon as available and in any event within 90 days      after Company's fiscal year end, Company's audited financial statements      prepared by an independent certified public accountant acceptable to Wells      Fargo, which shall include Company's balance sheet, income statement, and      statement of retained earnings and cash flows prepared on a consolidated      and consolidating basis to include Company's Affiliates. The annual      financial statements shall be accompanied by a certificate (the      "Compliance Certificate") in the form of Exhibit E that      is signed by Company's chief financialofficer. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (b) | Interim Financial      Statements. So long as the principal outstanding on the Line of      Credit is less than $500,000.00, as soon as available and in any event      within 40 days of each calendar quarter, a Company prepared balance sheet,      income statement, and statement of retained earnings prepared for that      quarter and for the year-to-date period then ended, prepared, if requested      by Wells Fargo, on a consolidated and consolidating basis to include      Company's Affiliates, and stating in comparative form the figures for the      corresponding date and periods in the prior fiscal year, subject to      year-end adjustments. For any month in which the principal outstanding on      the Line of Credit is at any time $500,000.00 or greater, as soon as      available and in any event within 30 days after the end of such month, a      Company prepared balance sheet, income statement, and statement of      retained earnings prepared for that month and for the year-to-date period      then ended, prepared, if requested by Wells Fargo, on a consolidated and      consolidating basis to include Company's Affiliates, and stating in      comparative form the figures for the corresponding date and periods in the      prior fiscal year, subject to year-end adjustments. In each case, the      financial statements shall be accompanied by a Compliance Certificate in      the form of Exhibit E that      is signed by Company's chief financialofficer. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | Collateral      Reports. No later than 15 days after each month end (or more      frequently if Wells Fargo shall request it), a Borrowing Base certificate,      detailed agings of Company's accounts receivable and accounts payable, a      detailed inventory report, and a calculation of Company's Accounts,      Eligible Accounts, Inventory and Eligible Inventory as of the end of that      month or shorter time period requested by Wells  Fargo. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | Projections. No      later than 30 days prior to each fiscal year end, Company's projected      balance sheet and income statement and statement of cash flows for each      month of the next fiscal year, certified as accurate by Company's chief      financial officer and accompanied by a statement of assumptions and      supporting schedules andinformation. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e) | Supplemental      Reports. When an Advance made pursuant to an Advance request of the      Company is outstanding, weekly, or more frequently if Wells Fargo      requests, standard form "daily collateral report," together with      receivables schedules, collection reports, and copies of invoices in      excess of $50,000.00, shipment documents and delivery receipts for goods      sold to account debtors in excess of$50,000.00. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f) | Litigation. No      later than three days after discovery, a Record notifying Wells Fargo of      any litigation or other proceeding before any court or governmental agency      which seeks a monetary recovery against Company in excess of      $10,000.00. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (g) | Intellectual      Property, (i) No later than 30 days before it acquires material      Intellectual Property Rights, a Record notifying Wells Fargo of Company's      intention to acquire such rights; (ii) except for transfers permitted      under Section 5.18, no later than 30 days before it disposes of material      Intellectual Property Rights, a Record notifying Wells Fargo of Company's      intention to dispose of such rights, along with copies of all proposed      documents and agreements concerning the disposal of such rights as      requested by Wells Fargo; (iii) promptly upon discovery, a Record      notifying Wells Fargo of (A) any Infringement of Company's Intellectual      Property Rights by any Person, (B) claims that Company is Infringing      another Person's Intellectual Property Rights and (C) any threatened      cancellation, termination or material limitation of Company's Intellectual      Property Rights; and (iv) promptly upon receipt, copies of all      registrations and filings with respect to Company's Intellectual Property      Rights. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (h) | Defaults. No      later than three days after learning of the probable occurrence of any      Event of Default, a Record notifying Wells Fargo of the Event of Default      and the steps being taken by Company to cure the Event of      Default. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i) | Disputes.      Promptly upon discovery, a Record notifying Wells Fargo of (i) any      disputes or claims by Company's customers exceeding $5,000.00 individually      or $10,000.00 in the aggregate during any fiscal year; (ii) credit memos      not previously reported in Section 5.1(e); and (iii) any goods returned to      or recovered by Company outside of the ordinary course of business or in      the ordinary course of business but with a value in an amount in excess of      $50,000.00. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (j) | Changes in Officers      and Directors. Promptly following occurrence, a Record notifying      Wells Fargo of any change in the persons constituting Company's Officers      and Directors. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (k) | Collateral.      Promptly upon discovery, a Record notifying Wells Fargo of any loss of or      material damage to any Collateral or of any substantial adverse change in      any Collateral or the prospect of itspayment. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (l) | Commercial Tort      Claims. Promptly upon discovery, a Record notifying Wells Fargo of      any commercial tort claims brought by Company against any Person,      including the name and address of each defendant, a summary of the facts,      an estimate of Company's damages, copies of any complaint or demand letter      submitted by Company, and such other information as Wells Fargo may      request. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (m) | Reports to      Owners. Promptly upon distribution, copies of all financial      statements, reports and proxy statements which Company shall have sent to      its Owners. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (n) | Tax Returns of      Company. No later than five days after they are required to be      filed, copies of Company's signed and dated state and federal income tax      returns and all related schedules, and copies of any extension      requests. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (o) | Violations of      Law. No later than three days after discovery of any violation, a      Record notifying Wells Fargo of Company's violation of any law, rule or      regulation, the non­compliance with which could have a Material      Adverse Effect on Company. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (p) | Pension Plans,      (i) Promptly upon discovery, and in any event within 30 days after Company      knows or has reason to know that any Reportable Event with respect to any      Pension Plan has occurred, a Record authenticated by Company's chief      financial officer notifying Wells Fargo of the Reportable Event in detail      and the actions which Company proposes to take to correct the deficiency,      together with a copy of any related notice sent to the Pension Benefit      Guaranty Corporation; (ii) promptly upon discovery, and in any event      within 10 days after Company fails to make a required quarterly Pension      Plan contribution under Section 412(m) of the IRC, a Record authenticated      by Company's chief financial officer notifying Wells Fargo of the failure      in detail and the actions that Company will take to cure the failure,      together with a copy of any related notice sent to the Pension Benefit      Guaranty Corporation; and (iii) promptly upon discovery, and in any event      within 10 days after Company knows or has reason to know that it may be      liable or may be reasonably expected to have liability for any withdrawal,      partial withdrawal, reorganization or other event under any Multiemployer      Plan under Sections 4201 or 4243 of ERISA, a Record authenticated by      Company's chief financial officer notifying Wells Fargo of the details of      the event and the actions that Company proposes to take in      response. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (q) | Other Reports.      From time to time, with reasonable promptness, all customer lists,      receivables schedules, inventory reports, collection reports, deposit      records, equipment schedules, invoices to account debtors, shipment      documents and delivery receipts for goods sold, and such other materials,      reports, records or information as Wells Fargo may  request. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.2 | Financial Covenants.      Company agrees to comply with the financial covenants described      below, which shall be calculated using GAAP consistently applied, except      as they may be otherwise modified by the following capitalized      definitions, and which shall be if requested by Wells Fargo, calculated on      a consolidated and consolidating basis to include Company's      Affiliates: |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a) | Minimum Quarterly Net      Income. Company shall achieve, for each period described below, Net      Income of not less than the amount set forth for each such period (numbers      appearing between "< >" are negative):   |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Quarter Ending          | Minimum Net Income     |
|------------------------------|-----------------------------|
| December      31, 2008  | <$3,000,000.00>  |

----

| Quarter Ending               |   | Minimum Quarterly CumulativeNet Income Step Up |
|------------------------------|--------|------------------------------------------------|
| Each      March 31, 2009     |   | <$1,000,000.00>                          |
| Each      June 30, 2009      |   | <$500,000.00>                            |
| Each      September 30, 2009 |   | $750,000.00                                    |
| Each      December 31, 2009  |   | $2,000,000.00                                  |

| 5.3  | Other      Liens and Permitted Liens. |
|-----------|---------------------------------------|

| (a) | Other Liens; Permitted      Liens. Company shall not create, incur or suffer to exist any Lien      upon any of its assets, now owned or later acquired, as security for any      indebtedness, with the exception of the following (each a "Permitted      Lien"; collectively, "Permitted Liens"): (i) In the case of real property,      covenants, restrictions, rights, easements and minor irregularities in      title which do not materially interfere with Company's business or      operations as presently conducted; (ii) Liens in existence on the date of      this Agreement that are described in Exhibit F and      secure indebtedness for borrowed money permitted under Section 5.4; (iii)      The Security Interest and Liens created by the Security Documents; and      (iv) Purchase money Liens relating to the acquisition of Equipment not      exceeding the lesser of cost or fair market value, not exceeding      $500,000.00 for any one purchase or $1,000,000.00 in the aggregate during      any fiscal year, and so long as no Default Period is then in existence and      none would exist immediately after such  acquisition. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Financing      Statements. Company shall not authorize the filing of any financing      statement by any Person as Secured Party with respect to any of Company's      assets, other than Wells Fargo. Company shall not amend any financing      statement filed by Wells Fargo as Secured Party except as permitted by      law. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 5.4 | Indebtedness. Company      shall not incur, create, assume or permit to exist any indebtedness or      liability on account of deposits or letters of credit issued on Company's      behalf, or advances or any indebtedness for borrowed money of any kind,      whether or not evidenced by an instrument, except: (a) Indebtedness      described in this Agreement; (b) indebtedness of Company described in      Exhibit      F; and (c) indebtedness secured by Permitted  Liens. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.5 | Guaranties. Company      shall not assume, guarantee, endorse or otherwise become directly or      contingently liable for the obligations of any Person, except: (a) the      endorsement of negotiable instruments by Company for deposit or collection      or similar transactions in the ordinary course of business; and (b)      guaranties, endorsements and other direct or contingent liabilities in      connection with the obligations of other Persons in existence on the date      of this Agreement and described in Exhibit      F. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.6 | Investments and Subsidiaries.      Company shall not make or permit to exist any loans or advances to,      or make any investment or acquire any interest whatsoever in, any Person      or Affiliate, including any partnership or joint venture, nor purchase or      hold beneficially any stock or other securities or evidence of      indebtedness of any Person or Affiliate, except: |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a) | Investments      in direct obligations of the United States of America or any of its      political subdivisions whose obligations constitute the full faith and      credit obligations of the United States of America and have a maturity of      one year or less, commercial paper issued by U.S. corporations rated "A-l"      or "A-2" by Standard & Poor's Ratings Services or "P-1" or "P-2" by      Moody's Investors Service or certificates of deposit or bankers'      acceptances having a maturity of one year or less issued by members of the      Federal Reserve System having deposits in excess of $100,000,000.00 (which      certificates of deposit or bankers' acceptances are fully insured by the      Federal Deposit InsuranceCorporation); |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Travel      advances or loans to Company's Officers and employees not exceeding at any      one time an aggregate of$10,000.00; |
|-----|---------------------------------------------------------------------------------------------------------------------------------|

| (c)  | Prepaid      rent not exceeding one month or security deposits;  and |
|-----------|----------------------------------------------------------------------|

| (d) | Current      investments in those Subsidiaries in existence on the date of this      Agreement which are identified on Exhibit      D. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------|

| 5.7 | Dividends and Distributions.      Company shall not declare or pay any dividends (other than      dividends payable solely in stock or membership interests of Company, as      applicable) on any class of its stock or membership interests, or make any      payment on account of the purchase, redemption or retirement of any shares      of its stock or membership interests, or other securities or evidence of      its indebtedness or make any distribution regarding its stock or      membership interests, either directly or  indirectly. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.8 | Salaries. Company shall      not pay excessive or unreasonable salaries, bonuses, commissions,      consultant fees or other compensation. Company shall not increase the      salary, commissions, consultant fees or other compensation of any      Director, Officer or consultant, or any member of their families, by more      than 20% in any one year, either individually or for all such Persons in      the aggregate, or pay such an increase from any source other than profits      earned in the year of payment; provided however, that the restriction in      this sentence shall not apply to existing employment contracts that have      been approved by Company's board of directors. No bonuses shall be paid      that would result in the occurrence of an Event of  Default. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 5.9  | Books      and Records; Collateral Examination; Inspection and      Appraisals. |
|-----------|---------------------------------------------------------------------------------|

| (a) | Books and Records;      Inspection. Company shall keep complete and accurate books and      records with respect to the Collateral and Company's business and      financial condition and any other matters that Wells Fargo may request, in      accordance with GAAP. Company shall permit any employee, attorney,      accountant or other agent of Wells Fargo to audit, review, make extracts      from and copy any of its books and records at any time during ordinary      business hours, and to discuss Company's affairs with any of its      Directors, Officers, employees, Owners or  agents. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Authorization to      Company's Agents to Make Disclosures to Wells Fargo. Company      authorizes all accountants and other Persons acting as its agent to      disclose and deliver to Wells Fargo's employees, accountants, attorneys      and other Persons acting as its agent, at Company's expense, all financial      information, books and records, work papers, management reports and other      information in their possession regarding Company, other than materials      subject to attorney-clientprivilege. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | Collateral Exams and      Inspections. Company shall permit Wells Fargo's employees,      accountants, attorneys or other Persons acting as its agent, to examine      and inspect any Collateral or any other property of Company at any time      during ordinary business hours. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | Collateral      Appraisals. Wells Fargo may also obtain, from time to time, at      Company's expense, an appraisal of Company's Collateral, by an appraiser      acceptable to Wells Fargo in its sole  discretion. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.10  | Account      Verification; Payment of PermittedLiens. |
|------------|-------------------------------------------------------|

| (a) | Account      Verification. Wells Fargo or its agents may (i) contact account      debtors and other obligors at any time to verify Company's Accounts; and      (ii) require Company to send requests for verification of Accounts or send      notices of assignment of Accounts to account debtors and other      obligors. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Covenant to Pay      Permitted Liens. Company shall pay when due each account payable      due to any Person holding a Permitted Lien (as a result of such payable)      on any Collateral. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.11  | Compliance      with Laws. |
|------------|----------------------------|

| (a) | General Compliance      with Applicable Law; Use of Collateral. Company shall (i) comply,      and cause each Subsidiary to comply, with the requirements of applicable      laws and regulations, the non-compliance with which would have a Material      Adverse Effect on its business or its financial condition and (ii) use and      keep the Collateral, and require that others use and keep the Collateral,      only for lawful purposes, without violation of any federal, state or local      law, statute or ordinance. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (b) | Compliance with      Federal Regulatory Laws. Company shall (i) prohibit, and cause each      Subsidiary to prohibit, any Person that is an Owner or Officer from being      listed on the Specially Designated Nationals and Blocked Person List or      other similar lists maintained by the Office of Foreign Assets Control      ("OFAC"), the Department of the Treasury or included in any Executive      Orders, (ii) not permit the proceeds of the Line of Credit or any other      financial accommodation extended by Wells Fargo to be used in any way that      violates any foreign asset control regulations of OFAC or other applicable      law, (iii) comply, and cause each Subsidiary to comply, with all      applicable Bank Secrecy Act laws and regulations, as amended from time to      time, and (iv) otherwise comply with the USA Patriot Act and Wells Fargo's      related policies and procedures. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | Compliance with      Environmental Laws. Company shall (i) comply, and cause each      Subsidiary to comply, with the requirements of applicable Environmental      Laws and obtain and comply with all permits, licenses and similar      approvals required by them, and (ii) not generate, use, transport, treat,      store or dispose of any Hazardous Substances in such a manner as to create      any material liability or obligation under the common law of any      jurisdiction or any EnvironmentalLaw. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.12 | Payment of Taxes and Other      Claims. Company shall pay or discharge, when due, and cause each      Subsidiary to pay or discharge, when due, (a) all taxes, assessments and      governmental charges levied or imposed upon it or upon its income or      profits, upon any properties belonging to it (including the Collateral) or      upon or against the creation, perfection or continuance of the Security      Interest, prior to the date on which penalties attach, (b) all federal,      state and local taxes required to be withheld by it, and (c) all lawful      claims for labor, materials and supplies which, if unpaid, might by law      become a Lien upon any properties of Company, although Company 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 proper reserves have been  made. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.13  | Maintenance      of Collateral and Properties. |
|------------|------------------------------------------------|

| (a) | Company      shall keep and maintain the Collateral and all of its other properties      necessary or useful in its business in good condition, repair and working      order (normal wear and tear excepted) and will from time to time replace      or repair any worn, defective or broken parts, although Company may      discontinue the operation and maintenance of any properties if Company      believes that such discontinuance is desirable to the conduct of its      business and not disadvantageous in any material respect to Wells Fargo.      Company shall take all commercially reasonable steps necessary to protect      and maintain its Intellectual PropertyRights. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Company      shall defend the Collateral against all Liens, claims and demands of all      third Persons claiming any interest in the Collateral. Company shall keep      all Collateral free and clear of all Liens except Permitted Liens. Company      shall take all commercially reasonable steps necessary to prosecute any      Person Infringing its Intellectual Property Rights and to defend itself      against any Person accusing it of Infringing any Person's Intellectual      Property Rights. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 5.14 | Insurance. Company shall      at all times maintain insurance with insurers acceptable to Wells Fargo,      in such amounts and on such terms (including deductibles) as Wells Fargo      in its sole discretion may require and including, as applicable and      without limitation, business interruption insurance (including force      majeure coverage), hazard coverage on an "all risks" basis for all      tangible Collateral, and theft and physical damage coverage for Collateral      consisting of motor vehicles. All insurance policies must contain an      appropriate lender's interest endorsement or clause, and name Wells Fargo      as an additional insured. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.15 | Preservation of Existence.      Company shall preserve and maintain its existence and all of its      rights, privileges and franchises necessary or desirable in the normal      conduct of its business and shall conduct its business in an orderly,      efficient and regular manner. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.16 | Delivery of Instruments, etc.      Upon request by Wells Fargo, Company shall promptly deliver to      Wells Fargo in pledge all instruments, documents and chattel paper      constituting Collateral, endorsed or assigned by  Company. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.17 | Sale or Transfer of Assets;      Suspension of Business Operations. Company shall not sell, lease,      assign, transfer or otherwise dispose of (a) the stock of any Subsidiary,      (b) all or a substantial part of its assets, or (c) any Collateral or any      interest in Collateral (whether in one transaction or in a series of      transactions) to any other Person other than the sale of Equipment not      exceeding $250,000.00 in the aggregate or Inventory in the ordinary course      of business and shall not liquidate, dissolve or suspend business      operations. Company shall not transfer any part of its ownership interest      in any Intellectual Property Rights and shall not permit its rights as      licensee of Licensed Intellectual Property to lapse, except that Company      may transfer such rights or permit them to lapse if it has reasonably      determined that such Intellectual Property Rights are no longer useful in      its business. If Company transfers any Intellectual Property Rights for      value, Company shall pay the Proceeds to Wells Fargo for application to      the Indebtedness. Company shall not license any other Person to use any of      Company's Intellectual Property Rights, except that Company may grant      licenses in the ordinary course of its business in connection with sales      of Inventory or the provision of services to its  customers. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.18 | Consolidation and Merger; Asset      Acquisitions. Company shall not consolidate with or merge into any      other entity, or permit any other entity to merge into it, 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  entity. |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.19 | Sale and Leaseback.      Company shall not enter into any arrangement, directly or      indirectly, with any other Person pursuant to which Company shall sell or      transfer any real or personal property, whether owned now or acquired in      the future, and then rent or lease all or part of such property or any      other property which Company intends to use for substantially the same      purpose or purposes as the property being sold or    transferred. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 5.20 | Restrictions on Nature of      Business. Company will not engage in any line of business      materially different from that presently engaged in by Company, and will      not purchase, lease or otherwise acquire assets not related to its      business. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.21 | Accounting. Company will      not adopt any material change in accounting principles except as required      by GAAP, consistently applied. Company will not change its fiscal      year. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.22 | Discounts, etc. After      notice from Wells Fargo, Company will not grant any discount, credit or      allowance to any customer of Company or accept any return of goods sold.      Company will not at any time modify, amend, subordinate, cancel or      terminate any Account. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.23 | Pension Plans. Except as      disclosed to Wells Fargo in a Record prior to the date of this Agreement,      neither Company nor any ERISA Affiliate will (a) adopt, create, assume or      become party to any Pension Plan, (b) become obligated to contribute to      any Multiemployer Plan, (c) incur any obligation to provide      post-retirement medical or insurance benefits with respect to employees or      former employees (other than benefits required by law) or (d) amend any      Plan in a manner that would materially increase its funding      obligations. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.24 | Place of Business; Name.      Company will not transfer its chief executive office or principal      place of business, or move, relocate, close or sell any business Premises.      Company will not permit any tangible Collateral or any records relating to      the Collateral to be located in any state or area in which, in the event      of such location, a financing statement covering such Collateral would be      required to be, but has not in fact been, filed in order to perfect the      Security Interest. Company will not change its name or jurisdiction of      organization. |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.25 | Constituent Documents; S      Corporation Status. Company will not amend its Constituent      Documents. Company will not become an S  Corporation. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.26 | Performance by Wells Fargo.      If Company fails to perform or observe any of its obligations under      this Agreement at any time, Wells Fargo may, but need not, perform or      observe them on behalf of Company and may, but need not, take any other      actions which Wells Fargo may reasonably deem necessary to cure or correct      this failure; and Company shall pay Wells Fargo upon demand the amount of      all costs and expenses (including reasonable attorneys' fees and legal      expense) incurred by Wells Fargo in performing these obligations, together      with interest on these amounts at the Default  Rate. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5.27 | Wells Fargo Appointed as      Company's Attorney in Fact. To facilitate Wells Fargo's performance      or observance of Company's obligations under this Agreement, Company      hereby irrevocably appoints Wells Fargo and Wells Fargo's agents, as      Company's attorney in fact (which appointment is coupled with an interest)      with the right (but not the duty) to create, prepare, complete, execute,      deliver, endorse or file on behalf of Company any instruments, documents,      assignments, security agreements, financing statements, applications for      insurance and any other agreements or any Record required to be obtained,      executed, delivered or endorsed by Company in accordance with the terms of      this Agreement. |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 6.  | EVENTS      OF DEFAULT AND REMEDIES |
|----------|-------------------------------------|

| 6.1 | Events of Default. An      "Event of Default" means any of thefollowing: |
|-----|--------------------------------------------------------------------------|

| (a) | Company      fails to pay the amount of any Indebtedness on the date that it becomes      due and payable; |
|-----|------------------------------------------------------------------------------------------------------------|

| (b) | Company      fails to observe or perform any covenant or agreement of Company set forth      in this Agreement, or in any of the Loan Documents, or in any other      document or agreement described in or related to this Agreement or to any      Indebtedness, or any covenant in Section 5.2 becomes inapplicable due to      the lapse of time, and Company and Wells Fargo fail to come to an      agreement acceptable to Wells Fargo in Wells Fargo's sole discretion to      amend the covenant to apply to futureperiods; |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | An      Overadvance arises as the result of any reduction in the Borrowing Base,      or arises in any manner or on terms not otherwise approved of in advance      by Wells Fargo in a Record that it has  Authenticated; |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | An      event of default or termination event (however defined) occurs under any      swap, derivative, foreign exchange, hedge or any similar transaction or      arrangement entered into between Company and Wells  Fargo; |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)  | A      Change of Control shall occur; |
|-----------|---------------------------------------|

| (f) | Company      or any Guarantor becomes insolvent or admits in a Record an inability to      pay debts as they mature, or Company or any Guarantor makes an assignment      for the benefit of creditors; or Company or any Guarantor applies for or      consents to the appointment of any receiver, trustee, or similar officer      for the benefit of Company or any Guarantor, or for any of their      properties; or any receiver, trustee or similar officer is appointed      without the application or consent of Company or such Guarantor; or any      judgment, writ, warrant of attachment or execution or similar process is      issued or levied against a substantial part of the property of Company or      any Guarantor; |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (g) | Company      or any Guarantor files a petition under any chapter of the United States      Bankruptcy Code or under the laws of any other jurisdiction naming Company      or such Guarantor as debtor; or any such petition is instituted against      Company or any such Guarantor; or Company or any Guarantor institutes (by      petition, application, answer, consent or otherwise) any bankruptcy,      insolvency, reorganization, debt arrangement, dissolution, liquidation or      similar proceeding under the laws of any jurisdiction; or any such      proceeding is instituted (by petition, application or otherwise) against      Company or any such Guarantor. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (h) | Any      representation or warranty made by Company in this Agreement or by any      Guarantor in any Guaranty, or by Company (or any of its Officers) or any      Guarantor in any agreement, certificate, instrument or financial statement      or other statement delivered to Wells Fargo in connection with this      Agreement or pursuant to such Guaranty is untrue or misleading in any      material respect when delivered to WellsFargo; |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i) | A      final, non-appealable arbitration award, judgment, or decree or order for      the payment of money in an amount in excess of $10,000.00 is entered      against Company, which is not insured, subject to indemnity, immediately      stayed or appealed, or paid immediately without resulting in an Event of      Default; |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (j) | Company      is in default with respect to any bond, debenture, note or other evidence      of material indebtedness issued by Company that is held by any third      Person other than Wells Fargo, or under any instrument under which any      such evidence of indebtedness has been issued or by which it is governed,      or under any material lease or other contract, and the applicable grace      period, if any, has expired, regardless of whether such default has been      waived by the holder of suchindebtedness; |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (k) | Company      liquidates, dissolves, terminates or suspends its business operations or      otherwise fails to operate its business in the ordinary course, or merges      with another Person; or sells or attempts to sell all or substantially all      of its assets; |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (1) | Company      fails to pay any indebtedness or obligation owed to Wells Fargo which is      unrelated to the Line of Credit or this Agreement as it becomes due and      payable; |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (m) | Any      Guarantor repudiates or purports to revoke the Guarantor's Guaranty, or      fails to perform any obligation under such Guaranty, or any individual      Guarantor dies or becomes incapacitated, or any other Guarantor ceases to      exist for any reason; |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (n) | Company      engages in any act prohibited by any Subordination Agreement, or makes any      payment on Subordinated Indebtedness (as defined in the Subordination      Agreement) that the Subordinated Creditor was not contractually entitled      to receive; |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (o) | Any      event or circumstance occurs that Wells Fargo in good faith believes may      impair the prospect of payment of all or a material part of the      Indebtedness, or Company's ability to perform any of its material      obligations under any of the Loan Documents, or any other document or      agreement described in or related to this Agreement, or there occurs any      Material Adverse Change. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (p) | Any      Director or Officer of Company is indicted for a felony offence under      state or federal law, or Company hires an Officer or appoints a Director      who has been convicted of any such felony  offense. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (q) | Any      Reportable Event, which Wells Fargo in good faith believes to constitute      sufficient grounds for termination of any Pension Plan or for the      appointment of a trustee to administer any Pension Plan, has occurred and      is continuing 30 days after Company gives Wells Fargo a Record notifying      it of the Reportable Event; or a trustee is appointed by an appropriate      court to administer any Pension Plan; or the Pension Benefit Guaranty      Corporation institutes proceedings to terminate or appoint a trustee to      administer any Pension Plan; or Company or any ERISA Affiliate files for a      distress termination of any Pension Plan under Title IV of ERISA; or      Company or any ERISA Affiliate fails to make any quarterly Pension Plan      contribution required under Section 412(m) of the IRC, which Wells Fargo      in good faith believes may, either by itself or in combination with other      failures, result in the imposition of a Lien on Company's assets in favor      of the Pension Plan; or any withdrawal, partial withdrawal, reorganization      or other event occurs with respect to a Multiemployer Plan which could      reasonably be expected to result in a material liability by Company to the      Multiemployer Plan under Title IV ofERISA. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 6.2 | Rights and Remedies.      During any Default Period, Wells Fargo may in its discretion      exercise any or all of the following rights and  remedies: |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a) | Wells      Fargo may terminate the Line of Credit and decline to make Advances      including any unfunded Term Loan Advances, if any, and terminate any      services extended to Company under the Master Agreement for Treasury      Management Services; |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Wells      Fargo may declare the Indebtedness to be immediately due and payable and      accelerate payment of the Revolving Note, the Real Estate Term Note, and      the Term Note, and all Indebtedness shall immediately become due and      payable, without presentment, notice of dishonor, protest or further      notice of any kind, all of which Company hereby expressly      waives; |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | Wells      Fargo may, without notice to Company, apply any money owing by Wells Fargo      to Company to payment of theIndebtedness; |
|-----|--------------------------------------------------------------------------------------------------------------------------------------|

| (d) | Wells      Fargo may exercise and enforce any rights and remedies available upon      default to a secured party under the UCC, including the right to take      possession of Collateral, proceeding with or without judicial process      (without a prior hearing or notice of hearing, which Company hereby      expressly waives) and sell, lease or otherwise dispose of Collateral for      cash or on credit (with or without giving warranties as to condition,      fitness, merchantability or title to Collateral, and in the event of a      credit sale, Indebtedness shall be reduced only to the extent that      payments are actually received), and Company will upon Wells Fargo's      demand assemble the Collateral and make it available to Wells Fargo at any      place designated by Wells Fargo which is reasonably convenient to both      parties; |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e) | Wells      Fargo may exercise and enforce its rights and remedies under any of the      Loan Documents and any other document or agreement described in or related      to this Agreement; |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f) | Company      will pay Wells Fargo upon demand in immediately available funds an amount      equal to the Aggregate Face Amount plus any anticipated costs and fees for      deposit to the Special Account pursuant to Section  1.12; |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (g) | Wells      Fargo may for any reason apply for the appointment of a receiver of the      Collateral, to which appointment Company hereby consents;    and |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (h) | Wells      Fargo may exercise any other rights and remedies available to it by law or      agreement. |
|-----|-------------------------------------------------------------------------------------------------------|

| 6.3 | Immediate Default and      Acceleration. Following the occurrence of an Event of Default      described in Section 6.1(f) or (g), the Line of Credit shall immediately      terminate and all of Company's Indebtedness shall immediately become due      and payable without presentment, demand, protest or notice of any      kind. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7. | MISCELLANEOUS |
|----|---------------|

| 7.1 | No Waiver; Cumulative Remedies.      No delay or any single or partial exercise by Wells Fargo of any      right, power or remedy under the Loan Documents, or under any other      document or agreement described in or related to this Agreement, shall      constitute a waiver of any other right, power or remedy under the Loan      Documents or granted by Company to Wells Fargo under other agreements or      documents that are unrelated to the Loan Documents. No notice to or demand      on Company in any circumstance shall entitle Company to any additional      notice or demand in any other circumstances. The remedies provided in the      Loan Documents or in any other document or agreement described in or      related to this Agreement are cumulative and not exclusive of any remedies      provided by law. Wells Fargo may comply with applicable law in connection      with a disposition of Collateral, and such compliance will not be      considered to adversely affect the commercial reasonableness of any sale      of the Collateral. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.2 | Amendments; Consents and      Waivers; Authentication. No amendment or modification of any Loan      Documents, or any other document or agreement described in or related to      this Agreement, or consent to or waiver of any Event of Default, or      consent to or waiver of the application of any covenant or representation      set forth in any of the Loan Documents, or any other document or agreement      described in or related to this Agreement, or any release of Wells Fargo's      Security Interest in any Collateral, shall be effective unless it has      been agreed to by Wells Fargo and memorialized in a Record that: (a)      specifically states that it is intended to amend or modify specific Loan      Documents, or any other document or agreement described in or related to      this Agreement, or waive any Event of Default or the application of any      covenant or representation of any terms of specific Loan Documents, or any      other document or agreement described in or related to this Agreement, or      is intended to release Wells Fargo's Security Interest in specific      Collateral; and (b) is Authenticated by the signature of an authorized      employee of both parties, or by an authorized employee of Wells Fargo with      respect to a consent or waiver. The terms of an amendment, consent or      waiver memorialized in any Record shall be effective only to the extent,      and in the specific instance, and for the limited purpose to which Wells      Fargo has agreed. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.3 | Execution in Counterparts;      Delivery of Counterparts. This Agreement and all other Loan      Documents, or any other document or agreement described in or related to      this Agreement, and any amendment or modification to them may be      Authenticated by the parties in any number of counterparts, each of which,      once authenticated and delivered in accordance with the terms of this      Section 7.3, will be deemed an original, and all such counterparts, taken      together, shall constitute one and the same instrument. Delivery by fax or      by encrypted e-mail or e-mail file attachment of any counterpart to any      Loan Document Authenticated by an authorized signature will be deemed the      equivalent of the delivery of the original Authenticated instrument.      Company shall send the original Authenticated counterpart to Wells Fargo      by first class U.S. mail or by overnight courier, but Company's failure to      deliver a Record in this form shall not affect the validity,      enforceability, and binding effect of this Agreement or the other Loan      Documents, or any other document or agreement described in or related to      this Agreement. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 7.4 | Notices, Requests, and      Communications; Confidentiality. Except as otherwise expressly      provided in this Agreement: |
|-----|-----------------------------------------------------------------------------------------------------------------------------|

| (a) | Delivery of Notices,      Requests and Communications. Any notice, request, demand, or other      communication by either party that is required under the Loan Documents,      or any other document or agreement described in or related to this      Agreement, to be in the form of a Record (but excluding any Record      containing information Company must report to Wells Fargo under Section      5.1) may be delivered (i) in person, (ii) by first class U.S. mail, (iii)      by overnight courier of national reputation, or (iv) by fax, or the Record      may be sent as an Electronic Record and delivered (v) by an encrypted      e-mail, or (vi) through Wells Fargo's Commercial Electronic Office®      ("CEO®") portal or other secure electronic channel to which the      parties have agreed. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Addresses for      Delivery. Delivery of any Record under this Section 7.4 shall be made to the      appropriate address set forth on the last page of this Agreement (which      either party may modify by a Record sent to the other party), or through      Wells Fargo's CEO      portal or other secure electronic channel to which the parties have      agreed. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | Date of      Receipt. Each Record sent pursuant to the terms of this Section      7.4 will be deemed      to have been received on (i) the date of delivery if delivered in person,      (ii) two business days after the date deposited in the mail if sent by      mail, (iii) one business day after the date delivered to the courier if      sent by overnight courier, (iv) the date of transmission if sent by fax,      or (v) the date of transmission, if sent as an Electronic Record by      electronic mail or through Wells Fargo's CEO portal or similar      secure electronic channel to which the parties have agreed; except that any      request for an Advance or any other notice, request, demand or other      communication from Company required under Section 1, and any request for      an accounting under Section 9-210 of the UCC, will not be deemed to have      been received until actual receipt by Wells Fargo on a Business Day by an      authorized employee of Wells Fargo. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | Confidentiality of      Unencrypted E-mail. Company acknowledges that if it sends an      Electronic Record to Wells Fargo without encryption by e-mail or as an      e-mail file attachment, there is a risk that the Electronic Record may be      received by unauthorized Persons, and that by so doing it will be deemed      to have accepted this risk and the consequences of any such unauthorized      disclosure. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.5 | Company Information Reporting;      Confidentiality. Except as otherwise expressly provided in this      Agreement: |
|-----|---------------------------------------------------------------------------------------------------------------------|

----

| (a) | Delivery of Company      Information Records. Any information that Company is required to      deliver under Section 5.1 in the form of a Record may be delivered to      Wells Fargo (i) in person, or by (ii) first class U.S. mail, (iii)      overnight courier of national reputation, or (iv) fax, or the Record may      be sent as an Electronic Record (v) by encrypted e-mail, or (vi) through      the file upload service of Wells Fargo's CEO portal or other      secure electronic channel to which the parties have  agreed. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Addresses for      Delivery. Delivery of any Record to Wells Fargo under this Section      7.5 shall be made to the appropriate address set forth on the last page of      this Agreement (which Wells Fargo may modify by a Record sent to Company),      or through Wells Fargo's CEO portal or other      secure electronic channel to which the parties have  agreed. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | Date of      Receipt. Each Record sent pursuant to this Section will be deemed      to have been received on (i) the date of delivery to an authorized      employee of Wells Fargo, if delivered in person, or by U.S. mail,      overnight courier, fax, or e-mail; or (ii) the date of transmission, if      sent as an Electronic Record through Wells Fargo's CEO portal or similar      secure electronic channel to which the parties have  agreed. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | Authentication of      Company Information Records. Company shall Authenticate any Record      delivered (i) in person, or by U.S. mail, overnight courier, or fax, by      the signature of the Officer or employee of Company who prepared the      Record; (ii) as an Electronic Record sent via encrypted e-mail, by the      signature of the Officer or employee of Company who prepared the Record by      any file format signature that is acceptable to Wells Fargo, or by a      separate certification signed and sent by fax; or (iii) as an Electronic      Record via the file upload service of Wells Fargo's CEO portal or similar      secure electronic channel to which the parties have agreed, through such      credentialing process as Wells Fargo and Company may agree to under the      CEO      agreement. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e) | Certification of      Company Information Records. Any Record (including any Electronic      Record) Authenticated and delivered to Wells Fargo under this Section 7.5      will be deemed to have been certified as materially true, correct, and      complete by Company and each Officer or employee of Company who prepared      and Authenticated the Record on behalf of Company, and may be legally      relied upon by Wells Fargo without regard to method of delivery or      transmission. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f) | Confidentiality of      Company Information Records Sent by Unencrypted E-mail. Company      acknowledges that if it sends an Electronic Record to Wells Fargo without      encryption by e-mail or as an e-mail file attachment, there is a risk that      the Electronic Record may be received by unauthorized Persons, and that by      so doing it will be deemed to have accepted this risk and the consequences      of any such unauthorized disclosure. Company acknowledges that it may      deliver Electronic Records containing Company information to Wells Fargo      by e-mail pursuant to any encryption tool acceptable to Wells Fargo and      Company, or through Wells Fargo's CEO portal file upload      service without risk of unauthorizeddisclosure. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.6 | Further Documents.      Company will from time to time execute, deliver, endorse and      authorize the filing of any instruments, documents, conveyances,      assignments, security agreements, financing statements, control agreements      and other agreements that Wells Fargo may reasonably request in order to      secure, protect, perfect or enforce the Security Interest or Wells Fargo's      rights under the Loan Documents, or any other document or agreement      described in or related to this Agreement (but any failure to request or      assure that Company executes, delivers, endorses or authorizes the filing      of any such item shall not affect or impair the validity, sufficiency or      enforceability of the Loan Documents, or any other document or agreement      described in or related to this Agreement, and the Security Interest,      regardless of whether any such item was or was not executed, delivered or      endorsed in a similar context or on a prior  occasion). |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 7.7 | Costs and Expenses.      Company shall pay on demand all costs and expenses, including      reasonable attorneys' fees, incurred by Wells Fargo in connection with the      Indebtedness, this Agreement, the Loan Documents, or any other document or      agreement described in or related to this Agreement, and the transactions      contemplated by this Agreement, including all such costs, expenses and      fees incurred in connection with the negotiation, preparation, execution,      delivery, amendment, administration, performance, collection and      enforcement of the Indebtedness and all such documents and agreements and      the creation, perfection, protection, satisfaction, foreclosure or      enforcement of the SecurityInterest. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.8 | Indemnity. In addition      to its obligation to pay Wells Fargo's expenses under the terms of this      Agreement, Company shall indemnify, defend and hold harmless Wells Fargo,      its parent Wells Fargo & Company, and any of its affiliates and      successors, and all of their present and future Officers, Directors,      employees, attorneys and agents (each an "Indemnitee") for, from and      against any of the following (collectively, "Indemnified      Liabilities"): |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a) | Any      and all transfer taxes, documentary taxes, assessments or charges made by      any governmental authority by reason of the execution and delivery of the      Loan Documents, or any other document or agreement described in or related      to this Agreement, or the making of the  Advances; |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Any      claims, loss or damage to which any Indemnitee may be subjected if any      representation or warranty contained in Exhibit D      proves to be incorrect in any respect or as a result of any violation of      the covenants contained in Section 5.12;and |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | Any      and all other liabilities, losses, damages, penalties, judgments, suits,      claims, costs and expenses of any kind or nature whatsoever (including the      reasonable fees and disbursements of counsel) in connection with this      Agreement and any other investigative, administrative or judicial      proceedings, whether or not such Indemnitee shall be designated a party to      such proceedings, which may be imposed on, incurred by or asserted against      any such Indemnitee, in any manner related to or arising out of or in      connection with the making of the Advances and the Loan Documents, or any      other document or agreement described in or related to this Agreement, or      the use or intended use of the proceeds of the Advances, with the      exception of any Indemnified Liability caused by the gross negligence or      willful misconduct of anIndemnitee. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 7.9 | Retention of Company's Records.      Wells Fargo shall have no obligation to maintain Electronic Records      or retain any documents, schedules, invoices, agings, or other Records      delivered to Wells Fargo by Company in connection with the Loan Documents,      or any other document or agreement described in or related to this      Agreement for more than 30 days after receipt by Wells Fargo. If there is      a special need to retain specific Records, Company must notify Wells Fargo      of its need to retain or return such Records with particularity, which      notice must be delivered to Wells Fargo in accordance with the terms of      this Agreement at the time of the initial delivery of the Record to Wells      Fargo. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.10 | Binding Effect; Assignment;      Complete Agreement. The Loan Documents, or any other document or      agreement described in or related to this Agreement, shall be binding upon      and inure to the benefit of Company and Wells Fargo and their respective      successors and assigns, except that Company shall not have the right to      assign its rights under this Agreement or any interest in this Agreement      without Wells Fargo's prior consent, which must be confirmed in a Record      Authenticated by Wells Fargo. To the extent permitted by law, Company      waives and will not assert against any assignee any claims, defenses or      set-offs which Company could assert against Wells Fargo. This Agreement      shall also bind all Persons who become a party to this Agreement as a      borrower. This Agreement, together with the Loan Documents, or any other      document or agreement described in or related to this Agreement, comprises      the complete and integrated agreement of the parties on the subject matter      of this Agreement and supersedes all prior agreements, whether oral or      evidenced in a Record. To the extent that any provision of this Agreement      contradicts other provisions of the Loan Documents other than this      Agreement, or any other document or agreement described in or related to      this Agreement, this Agreement shallcontrol. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.11 | Sharing of Information.      Wells Fargo may share any Confidential Information that it may have      regarding Company and its Affiliates with its accountants, lawyers, and      other advisors, and with each business unit and line of business within      Wells Fargo and each direct and indirect subsidiary of Wells Fargo &      Company. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.12 | Severability of Provisions.      Any provision of this Agreement which is prohibited or      unenforceable shall be ineffective to the extent of such prohibition or      unenforceability without invalidating the remaining terms of this      Agreement. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 7.13 | Headings. Section and      subsection headings in this Agreement are included for convenience of      reference only and shall not constitute a part of this Agreement for any      other purpose. |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7.14 | Governing Law; Jurisdiction,      Venue; Waiver of Jury Trial. The Loan Documents (other than real      estate related documents, if any) shall be governed by and construed in      accordance with the substantive laws (other than conflict laws) of the      State of Arizona. The parties to this Agreement (a) consent to the      personal jurisdiction of the state and federal courts located in the State      of Arizona in connection with any controversy related to this Agreement;      (b) waive any argument that venue in any such forum is not convenient; (c)      agree that any litigation initiated by Wells Fargo or Company in      connection with this Agreement or the other Loan Documents may be venued      in either the state or federal courts located in the City of Phoenix,      County of Maricopa, State of Arizona; and (d) agree that a final judgment      in any such suit, action or proceeding shall be conclusive and may be      enforced in other jurisdictions by suit on the judgment or in any other      manner provided by law. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| COMPANY      AND WELLS FARGO WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION AT LAW OR      IN EQUITY OR IN ANY OTHER PROCEEDING BASED ON OR PERTAIING TO THIS      AGREEMENT OR ANY OTHER LOANDOCUMENT. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| NutraCea, a California      corporation By:      /s/ Bradley D.      EdsonName:      Bradley D.      EdsonIts:      CEO                            | Address: 5090      N. 40th      Street, Suite 400 Phoenix, Arizona 85018 Attention:      Olga      LonganFax:      602-522-7575Email:      olongan@nutracea.comFederal      EIN: 87-0673375Org.      ID No.       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| NutraPhoenix, LLC, a      Delaware limited liability company By:      /s/ Bradley D.      EdsonName:      Bradley D.      EdsonIts:      President | Address: 5090      N. 40th      Street, Suite 400 Phoenix, Arizona 85018 Attention:      Olga      LonganFax:      602-522-7575Email:      olongan@nutracea.comFederal      EIN: 26-2233062Org.      ID No.  |

| With      a copy to: | Shawn      M. Kent, Esq. |
|----------------------|--------------------------|

----

| Wells      Fargo Bank, National Association | Address:                                   |
|---------------------------------------------|--------------------------------------------|
|                                        |                                       |
| By:      /s/ Shane      Luke                | 100      W Washington St., 15th Floor      |
| Name:      Shane Luke                       | MAC      S4101-158, Phoenix, Arizona 85003 |
| Its:      Vice President                    | Attention:      Shane Luke                 |
|                                        | Fax:      602-378-6215                     |
|                                        | Email:      lukesha@wellsfargo.com         |

----

| $2,500,000.00 | December 18, 2008 |
|---------------|-------------------|

|   | NUTRACEA,      a California corporation                      |
|--------|--------------------------------------------------------------|
|   |                                                         |   |
|   | By:                                                          | /s/ Bradley D. Edson |
|   | Name:                                                        | Bradley D Epson |
|   | Its:                                                         | C.E.O |
|   |                                                         |   |
|   |                                                         |   |
|   | NUTRAPHOENIX,      LLC, a Delaware limited liability company |
|   |                                                         |   |
|   | By:                                                          | /s/ Bradley D. Edson |
|   | Name:                                                        | Bradley D Epson |
|   | Its:                                                         | CEO |

----

| $5,000,000.00 | December      18,      2008 |
|---------------|-----------------------------|

|   | NUTRACEA,      a California corporation                      |
|--------|--------------------------------------------------------------|
|   |                                                         |   |
|   | By:                                                          | /s/      Bradley D. Edson |
|   | Name:                                                        | Bradley      D. Edson |
|   | Its:                                                         | C.E.O. |
|   |                                                         |   |
|   | NUTRAPHOENIX,      LLC, a Delaware limited liability company |
|   |                                                         |   |
|   | By:                                                          | /s/      Bradley D. Edson |
|   | Name:                                                        | Bradley      D. Edson |
|   | Its:                                                         | C.E.O. |

----

| $2,500,000.00 | December 18, 2008 |
|---------------|-------------------|

|   | NUTRACEA,      a California corporation                      |
|--------|--------------------------------------------------------------|
|   |                                                         |   |
|   | By:                                                          | /s/      Bradley D. Edson |
|   | Name:                                                        | Bradley      D. Edson |
|   | Its:                                                         | C.E.O. |
|   |                                                         |   |
|   | NUTRAPHOENIX,      LLC, a Delaware limited liability company |
|   |                                                         |   |
|   | By:                                                          | /s/      Bradley D. Edson |
|   | Name:                                                        | Bradley      D. Edson |
|   | Its:                                                         | C.E.O. |

----

----

| (a) | Any      Person or "group" (as such term is used in Sections 13(d) and 14(d) of the      Securities Exchange Act of 1934) who does not have an ownership interest      in Company on the date of the initial Advance is or becomes the      "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the      Securities Exchange Act of 1934, except that any such Person, entity or      group will be deemed to have "beneficial ownership" of all securities that      such Person, entity or group has the right to acquire, whether such right      is exercisable immediately or only after the passage of time), directly or      indirectly, of more than ten percent (10%) of the voting power of all      classes of ownership of Company; |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | During      any consecutive two-year period, individuals who at the beginning of such      period constituted the board of Directors of Company (together with any      new Directors whose election to such board of Directors, or whose      nomination for election by the Owners of Company, was approved by a vote      of two thirds of the Directors then still in office who were either      Directors at the beginning of such period or whose election or nomination      for election was previously so approved) cease for any reason to      constitute a majority of the board of Directors of Company then in      office. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (a)  | That      portion of Accounts unpaid 90 days or more after the invoice      date; |
|-----------|-----------------------------------------------------------------------------------|

| (b) | That      portion of Accounts related to goods or services with respect to which      Company has received notice of a claim or dispute, which are subject to a      claim of offset or a contra account, or which reflect a reasonable reserve      for warranty claims or returns; |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | That      portion of Accounts not yet earned by the final delivery of goods or that      portion of Accounts not yet earned by the final rendition of services by      Company to the account debtor, including with respect to both goods and      services, progress billings, and that portion of Accounts for which an      invoice has not been sent to the applicable account  debtor; |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (d) | Accounts      constituting (i) Proceeds of copyrightable material unless such      copyrightable material shall have been registered with the United States      Copyright Office, or (ii) Proceeds of patentable inventions unless such      patentable inventions have been registered with the United States Patent      and Trademark Office; |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e) | Accounts      owed by any unit of government, whether foreign or domestic (except that      there shall be included in Eligible Accounts that portion of Accounts owed      by such units of government for which Company has provided evidence      satisfactory to Wells Fargo that (i) Wells Fargo's Security Interest      constitutes a perfected first priority Lien in such Accounts, and (ii)      such Accounts may be enforced by Wells Fargo directly against such unit of      government under all applicablelaws); |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (f)  | Accounts      denominated in any currency other than United States    Dollars; |
|-----------|--------------------------------------------------------------------------------|

| (g) | Accounts      owed by an account debtor located outside the United States or Canada      which are not (i) backed by a bank letter of credit naming Wells Fargo as      beneficiary or assigned to Wells Fargo, in Wells Fargo's possession or      control, and with respect to which a control agreement concerning the      letter-of-credit rights is in effect, and acceptable to Wells Fargo in all      respects, in its sole discretion, or (ii) covered by a foreign receivables      insurance policy acceptable to Wells Fargo in its sole      discretion; |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (h) | Accounts      owed by an account debtor who is insolvent or is the subject of bankruptcy      proceedings or who has gone out ofbusiness; |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------|

| (j) | Accounts      not subject to the Security Interest or which are subject to any Lien in      favor of any Person other than WellsFargo; |
|-----|----------------------------------------------------------------------------------------------------------------------------------------|

| (l) | That      portion of Accounts that constitutes advertising, finance charges, service      charges or sales or excise taxes; |
|-----|-----------------------------------------------------------------------------------------------------------------------------|

| (m) | Accounts      owed by an account debtor and its affiliates, regardless of whether      otherwise eligible, to the extent that the aggregate balance of such      Accounts exceeds 15% of the aggregate amount of all Eligible      Accounts; |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (n) | Accounts      owed by an account debtor and its affiliates, regardless of whether      otherwise eligible, if 25% or more of the total amount of Accounts due      from such debtor is ineligible under clauses (a), (b), or (k) above;      and |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (o) | Accounts,      or portions of Accounts, otherwise deemed ineligible by Wells Fargo in its      sole discretion. |
|-----|-----------------------------------------------------------------------------------------------------------------|

----

| (e) | Equipment      that is not covered by standard "all risk" hazard insurance for an amount      equal to its forced liquidationvalue; |
|-----|-------------------------------------------------------------------------------------------------------------------------------------|

| (f) | Equipment      that requires proprietary software in order to operate in the manner in      which it is intended when such software is not freely assignable to Wells      Fargo or any potential purchaser of such  Equipment; |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (a) | Inventory      that is: in-transit; located at any warehouse, job site or other premises      not approved by Wells Fargo in an Authenticated Record delivered to      Company; not subject to a perfected first priority Lien in Wells Fargo's      favor; covered by any negotiable or non-negotiable warehouse receipt, bill      of lading or other document of title; on consignment from any consignor;      or on consignment to any consignee or subject to any bailment unless the      consignee or bailee has executed an agreement with Wells      Fargo; |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | Inventory      that is damaged, defective, obsolete, slow moving or not currently      saleable in the normal course of Company's operations, or the amount of      such Inventory that has been reduced by  shrinkage; |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e) | Inventory      that Company has returned, has attempted to return, is in the process of      returning or intends to return to the vendor of the    Inventory; |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (g) | Inventory      manufactured by Company pursuant to a license unless the applicable      licensor has agreed in a Record that has been Authenticated by licensor to      permit Wells Fargo to exercise its rights and remedies against such      Inventory; |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (i) | Except      as expressly agreed by Borrower and Lender, inventory stored at locations      holding less than 10% of the aggregate value of Company's Inventory;      and |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

| (a) | A      material adverse effect on the business, operations, results of      operations, prospects, assets, liabilities or financial condition of      Company; |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | A      material adverse effect on the ability of Company to perform its      obligations under the Loan Documents, or any other document or agreement      related to this Agreement; |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | A      material adverse effect on the ability of Wells Fargo to enforce the      Indebtedness or to realize the intended benefits of the Security      Documents, including a material adverse effect on the validity or      enforceability of any Loan Document or of any rights against any      Guarantor, or on the status, existence, perfection, priority (subject to      Permitted Liens) or enforceability of any Lien securing payment or      performance of the Indebtedness; or |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | Any      claim against Company or threat of litigation which if determined      adversely to Company would result in the occurrence of an event described      in clauses (a), (b) and (c) above. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

----

| A.  | Loan      Documents to be Executed byCompany: |
|----------|-----------------------------------------------|

| (1)  | The      Revolving Note, the Real Estate Term Note, and the Term    Note. |
|-----------|---------------------------------------------------------------------------|

| (2)  | The      Credit and Security Agreement. |
|-----------|-----------------------------------------|

| (3) | The      Master Agreement for Treasury Management Services, the Acceptance of      Services, and the related Service Description for each deposit or treasury      management related product or service that Company will subscribe to,      including without limitation the Collection Account Service      Description. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)  | The      Deed of Trust. |
|-----------|-------------------------|

| (5) | A      Standby Letter of Credit Agreement and the Commercial Letter of Credit      Agreement, and a separate L/C Application for each Letter of Credit that      Company has requested that Wells Fargoissue. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| B.  | Loan      Documents to be Executed by ThirdParties: |
|----------|-----------------------------------------------------|

| (1) | A      Subordination Agreement, if applicable, pursuant to which each      Subordinated Creditor shall unconditionally subordinate payment of any      indebtedness of Company held by the Subordinated Creditor to the full and      prompt payment of all Company's Indebtedness, and subordinates any Lien in      favor of Subordinated Creditor to the Lien of Wells  Fargo. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | An      Acknowledgement of Warehouseman from each warehouse where Company stores      Inventory, pursuant to which the warehouseman waives its Lien in the      Inventory. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | An      Acknowledgement of Subcontractor from each subcontractor or consignee of      Company's Inventory, pursuant to which the subcontractor waives its Lien      in the Inventory. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | A      copy of each Notice of      Ownership of Goods sent to each Person to whom tangible Collateral      has been delivered but who will not be taking ownership of such property,      notifying each such Person of the continued ownership interest of Company      in such property and the Lien being retained by Wells Fargo in such      Collateral. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | A      Waiver of Setoff Rights      from each account debtor to Company pursuant to which the account      debtor waives its rights to exercise its rights to setoff against such      Account any amounts owed by Company to the account  debtor. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (6) | A      Landlord's Disclaimer and      Consent to each lease entered into by Company and that Landlord      with respect to the Premises, pursuant to which the Landlord waives its      Lien in any goods or other Inventory of Company located on the      Premises. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | Certificates Insurance      required under this Agreement, with all hazard insurance containing      a lender's interest endorsement in Wells Fargo's favor and with all      liability insurance naming Wells Fargo as additional    insured. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| C.  | Documents      Related to the Premises |
|----------|----------------------------------------|

| (1)  | Any      leases pursuant to which Company is leasing the Premises from a      lessor. |
|-----------|---------------------------------------------------------------------------------------|

| (2) | Any      mortgages or deeds of trust pursuant to which Company or the landlord to      Company has encumbered thePremises. |
|-----|----------------------------------------------------------------------------------------------------------------------------|

| (3) | Every      bailment or consignment pursuant to which any property of Company is in      the possession of a third Person such as a consignee or subcontractor,      together with, in the case of any goods held by such Person for resale,      UCC financing statements sufficient to protect Company's and Wells Fargo's      interests in such goods. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| D.  | Federal      Tax, State Tax, Judgment, UCC and Intellectual Property Lien      Searches |
|----------|-----------------------------------------------------------------------------------------|

| (1) | Current      searches of Company in appropriate filing offices showing that (i) no      Liens have been filed and remain in effect against Company and Collateral      except Permitted Liens or Liens held by Persons who have agreed in an      Authenticated Record that upon receipt of proceeds of the initial      Advances, they will satisfy, release or terminate such Liens in a manner      satisfactory to Wells Fargo, and (ii) Wells Fargo has filed all UCC      financing statements necessary to perfect the Security Interest, to the      extent the Security Interest is capable of being perfected by      filing. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Current      searches of Third Persons in appropriate filing offices with respect to      any of the Collateral that is in the possession of a Person other than      Company that is held for resale, showing that (i) UCC financing statements      sufficient to protect Company's and Wells Fargo's interests in such      Collateral have been filed, and (ii) no other secured party has filed a      financing statement against such Person and covering property similar to      Company's, other than Company, or if there exists any such secured party,      evidence that each such party has received notice from Company and Wells      Fargo sufficient to protect Company's and Wells Fargo's interests in      Company's goods from any claim by such secured  party. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| E.  | Constituent      Documents: |
|----------|-----------------------------|

| (1) | The      Certificate of Authority of Company, which shall include as part of the      Certificate or as exhibits to the Certificate, (i) the Resolution of      Company's Directors and, if required, Owners, authorizing the execution,      delivery and performance of those Loan Documents and other documents or      agreements described in or related to this Agreement to which Company is a      party, (ii) an Incumbency Certificate containing the signatures of      Company's Officers or agents authorized to execute and deliver those      instruments, agreements and certificates referenced in (i) above, as well      as Advance requests, on |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (2) | Evidence      that Company is licensed or qualified to transact business 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. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | An      Officer's Certificate of an appropriate Officer of Company confirming, in      his or her personal capacity, the representations and warranties set forth      in this Agreement. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | A      Customer Identification Information Form and such other forms and      verification as Wells Fargo may need to comply with the U.S.A. Patriot      Act. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| F. | Real      Estate Related Documents: |
|----|-------------------------------------|

| (1) | An      appraisal ordered by Wells Fargo or its agent of said real property and      all improvements thereon, conforming to Uniform Standards of Professional      Appraisal Practice. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | An      American Land Title Association policy of title insurance, with such      endorsements as Wells Fargo may require, issued by an insurer in such      amounts as Wells Fargo may require, insuring Wells Fargo's first priority      lien on said real estate, subject only to such exceptions as Wells Fargo      in its discretion may approve, together with such evidence relating to the      payment of liens or potential liens as Wells Fargo may      require. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | An      American Land Title Association survey certified to Wells Fargo and to the      title company. |
|-----|--------------------------------------------------------------------------------------------------------|

| (4) | A      current environmental site assessment indicating that the real property is      subject to no "recognized environmental conditions", as that term is      defined by the American Society for Testing and Materials, in its      standards for environmental due diligence, and is not in need of remedial      action to avoid subjecting its owner to any present or future liability or      contingent liability with respect to the release of toxic or hazardous      wastes or substances. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | A      flood hazard determination form, confirming whether or not the parcel is      in a flood hazard area and whether or not flood insurance must be      obtained, and, if the real estate is located in a flood hazard area, a      policy of flood insurance. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Copies      of management services and maintenance contracts, fire, health and safety      reports, certificates of occupancy, leases and rent  rolls. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| G. | Miscellaneous      Matters or Documents: |
|----|------------------------------------------|

| (1) | Payment      of fees and reimbursable costs and expenses due under this Agreement      through the date of initial Advance or issuance of a Letter of Credit,      including all legal expenses incurred through the date of the closing of      this Agreement. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Evidence      that after making the initial Advance, satisfying all obligations owed to      Company's prior lender, paying all trade payables older than 60 days from      invoice date, and paying all book overdrafts and closing costs,      availability under the Line of Credit is not less than      $8,000,000.00. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Any      documents or other agreements entered into by Company and Wells Fargo that      relate to any swap, derivative, foreign exchange, hedge, deposit, treasury      management or similar product or transaction extended to Company by Wells      Fargo not already provided pursuant to the requirements of (A)-(F)      above. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)  | Such      other documents as Wells Fargo in its sole discretion may      require. |
|-----------|-----------------------------------------------------------------------------------|

----

| (a) | Existence and Power;      Name: Chief Executive Office: Inventory and Equipment Locations; Federal      Employer Identification Number and Organizational Identification      Number. NutraCea is a corporation organized, validly existing and      in good standing under the laws of the State of California, and      NutraPhoenix, LLC is a limited liability company organized, validly      existing and in good standing under the laws of the State of Delaware, and      each entity is licensed or qualified to transact business 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. Company has all requisite power and authority to      conduct its business, to own its properties and to execute and deliver,      and to perform all of its obligations under, those Loan Documents and any      other documents or agreements that it has entered into with Wells Fargo      related to this Agreement. During its existence, Company has done business      solely under the names set forth below in addition to its correct legal      name. Company's chief executive office and principal place of business is      located at the address set forth below, and all of Company's records      relating to its business or the Collateral are kept at that location. All      Inventory and Equipment is located at that location or at one of the other      locations set forth below. Company's name, Federal Employer Identification      Number and Organization Identification Number are correctly set forth at      the end of the Agreement next to Company's  signature. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Trade      Names                                                                                  |
|---------------------------------------------------------------------------------------------------|
|                                                                                              |
| None.                                                                                             |
|                                                                                              |
|                                                                                              |
| Chief      Executive Office / Principal Place of Business                                         |
|                                                                                              |
|  5090      N. 40th      Street, Suite 400Phoenix, Arizona 85018                              |
|                                                                                              |
| Other      Inventory and Equipment Locations                                                      |
|                                                                                              |
| NutraCea,      Corporate Offices5090      North 40th      Street, Suite 400Phoenix,      AZ 85018 |
|                                                                                              |
| NutraCea,      Phoenix Plant4502      W. MonterosaPhoenix,      AZ 85031                          |
|                                                                                              |
| ADM      Arbuckle, CA1603 Old Highway 99  West                                                    |

----

| Arbuckle,      CA 95912                                                                                                                                                             |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                |
| NutraCea,      TX Office200      West 2nd,      Suite 205Freeport,      TX 77541                                                                                                    |
|                                                                                                                                                                                |
| NutraCea,      TX Plant505      Port Road, Building 2BFreeport,      TX 77541                                                                                                       |
|                                                                                                                                                                                |
| NutraCea,      Paradise Warehouse820      County Road 229Freeport,      TX 77541                                                                                                    |
|                                                                                                                                                                                |
| Delta      Western Indianola, MS1842      Highway 82 WestIndianola,      MS 38751                                                                                                   |
|                                                                                                                                                                                |
| NutraCea,      Lake Charles Plant6029      Joe Spears RoadIowa,      LA 70647                                                                                                       |
|                                                                                                                                                                                |
| NutraCea,      MermentauLA      Plant170      S. 13th      StreetMermentau,      LA 70556NutraCea      (RiceX Nutrients)MT      Plant3512      East Bench RoadDillon,      MT 59725 |
|                                                                                                                                                                                |
| NutraCea,      West Sacramento Warehouse Facility2928      Ramco, Suite 120West      Sacramento, 95691                                                                              |
|                                                                                                                                                                                |
| MWD      Sacramento, CA4840      Lang AvenueMcClennan,      CA 95652                                                                                                                |
|                                                                                                                                                                                |
| NutraCea,      Idaho office1901      Conant AvenueBurley,ID      83318                                                                                                              |
|                                                                                                                                                                                |
| PT      Panganmas Inti NusantaraKantor      Taman E 3.3, No. D8,JI.      Mega Kuningan Log 8.6-7Kawasan      Mega Kuningan JakartaIndonesia                                         |

----

| Irgovel      - Industria Riograndense De oleos Vegetais Ltda.Avenida      Presidente Joao Goulart7351,      Distrito Industrial,CEP      96-040-000Pelotas,      Rio Grande do SulFederative      Republic of Brazil |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Capitalization.      The Capitalization Chart below constitutes a correct and complete list of      all ownership interests of Company and all rights to acquire ownership      interests, including the record holder, number of interests and percentage      interests on a fully diluted basis, and the Organizational Chart below      shows the ownership structure of all Subsidiaries of    Company. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Capitalization      Chart                               |   |
|--------------------------------------------------------------|--------|
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NutraCea,      IncEquity      ScheduleDecember      10, 2008 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                         |   | Number      of Shares |   |   | Par      Value |   |   | Warrants      and Options |   |   | Combined      Beneficial |   |   | Percentage      Ownership Fully Diluted |   |
| Preferred      Stock (1)                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Series      D - (8% dividend, quarterly beginning 1/1/09)    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Midsummer      Investments                                   |   |   | 1,945 |   |   |   | 1,945,000 |   |   |   | 2,000 |   |   |   |   |   |   |   |
| Cranshire                                                    |   |   | 3,000 |   |   |   | 3,000,000 |   |   |   | 3,000 |   |   |   |   |   |   |   |
| Total      preferred stock outstanding                       |   |   | 4,945 |   |   |   | 4,945,000 |   |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Warrants      to purchase Preferred Stock outstanding        |   |   |   |   |   |   |   |   |   |   | 5,000 |   |   |   |   |   |   |   |
| Common      Stock                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 5%      or greater holders (2)                               |   |   | 0 |   |   |   |   |   |   |   | 0 |   |   |   | 0 |   |   |   | 0.00 | % |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Board      of directors and officers                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Officers                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Brad      Edson                                              |   |   | 255,000 |   |   |   |   |   |   |   | 7,000,000 |   |   |   | 7,255,000 |   |   |   | 3.18 | % |
| Olga      Hernandez-Longan                                   |   |   | 0 |   |   |   |   |   |   |   | 600,000 |   |   |   | 600,000 |   |   |   | 0.26 | % |
| Leo      Gingras                                             |   |   | 53,000 |   |   |   |   |   |   |   | 600,000 |   |   |   | 653,000 |   |   |   | 0.29 | % |
| Todd      Crow                                               |   |   | 9,700 |   |   |   |   |   |   |   | 1,662,942 |   |   |   | 1,672,642 |   |   |   | 0.73 | % |
| Kody      Newland                                            |   |   | 26,700 |   |   |   |   |   |   |   | 600,000 |   |   |   | 626,700 |   |   |   | 0.27 | % |
| Board      of directors                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| David      Bensol                                            |   |   | 52,500 |   |   |   |   |   |   |   | 205,000 |   |   |   | 257,500 |   |   |   | 0.11 | % |
| James      Lintzenich                                        |   |   | 1,396,411 |   |   |   |   |   |   |   | 1,691,608 |   |   |   | 3,088,019 |   |   |   | 1.35 | % |
| Edward      McMillan                                         |   |   | 17,740 |   |   |   |   |   |   |   | 281,798 |   |   |   | 299,538 |   |   |   | 0.13 | % |
| Kenneth      Shropshire                                      |   |   | 0 |   |   |   |   |   |   |   | 205,000 |   |   |   | 205,000 |   |   |   | 0.09 | % |
| Steven      Saunders                                         |   |   | 1,368,802 |   |   |   |   |   |   |   | 612,192 |   |   |   | 1,980,994 |   |   |   | 0.87 | % |
| Wesley      Clark                                            |   |   | 0 |   |   |   |   |   |   |   | 170,000 |   |   |   | 170,000 |   |   |   | 0.07 | % |
| Total      board of directors and officers                   |   |   | 3,179,853 |   |   |   |   |   |   |   | 13,628,540 |   |   |   | 16,808,393 |   |   |   |   |   |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      shares outstanding                                |   |   | 164,944,701 |   |   |   |   |   |   |   |   |   |   |   | 164,944,701 |   |   |   | 72.30 | % |
| Total      common stock outstanding                          |   |   | 168,124,554 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| Other      options and warrants to purchase common stock |   |   | 46,389,994  |   |   |   | 46,389,994  |   |   |   | 20.33  | %      |
|----------------------------------------------------------|--------|--------|-------------|--------|--------|--------|-------------|--------|--------|--------|--------|--------|
|                                                     |   |   |        |   |   |   |        |   |   |   |   |   |
| Options      and warrants to purchase common stock       |   |   | 60,018,534  |   |   |   |        |   |   |   |   |   |
|                                                     |   |   |        |   |   |   |        |   |   |   |   |   |
| Fully      diluted                                       |   |   | 228,143,088 |   |   |   | 228,143,088 |   |   |   | 100.00 | %      |

| (1) | Preferred      stock is not included in the fully diluted calculation as the conversion      ratio is subject      to current stock price (and other factors) at the time of      conversion |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | 5%      or greater amounts would be 8,406,227 shares basic or 11,407,154 on a fully diluted      basis |
|-----|--------------------------------------------------------------------------------------------------------|

| Organizational      Chart                     |
|-----------------------------------------------|
|                                          |
| See      attached organizational chart.  |

| (c) | Authorization of      Borrowing; No Conflict as to Law or Agreements. The execution,      delivery and performance by Company of the Loan Documents and any other      documents or agreements described in or related to this Agreement, and all      borrowing under the Line of Credit have been authorized and do not (i)      require the consent or approval of Company's Owners; (ii) require the      authorization, consent or approval by, or registration, declaration or      filing with, or notice to, any governmental agency or instrumentality,      whether domestic or foreign, or any other Person, except to the extent      obtained, accomplished or given prior to the date of this Agreement; (iii)      violate any provision of any law, rule or regulation (including Regulation      X of the Board of Governors of the Federal Reserve System) or of any      order, writ, injunction or decree presently in effect having applicability      to Company or of Company's Constituent Documents; (iv) result in a breach      of or constitute a default or event of default under any indenture or loan      or credit agreement or any other material agreement, lease or instrument      to which Company is a party or by which it or its properties may be bound      or affected; or (v) result in, or require, the creation or imposition of      any Lien (other than the Security Interest) upon or with respect to any of      the properties now owned or subsequently acquired by    Company. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | Legal      Agreements. This Agreement, the other Loan Documents, and any other      document or agreement described in or related to this Agreement, will      constitute the legal, valid and binding obligations of Company,      enforceable against Company in accordance with their respective      terms. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (e)  | Subsidiaries.      Except as disclosed below, Company has no  Subsidiaries. |
|-----------|-----------------------------------------------------------------------------|

| Subsidiaries                                              |
|----------------------------------------------------------------|
| NutraCea (Tax ID Number 87-0673375) List of      Subsidiaries: |
|                                                           |   |
| 1.                                                             | NutraGlo      Incorporated, a Nevada corporation wholly owned by NutraStar Technologies      Incorporated. April 5, 2000(43-1960638) |

----

| 2.     | NutraStar      Technologies Incorporated, a Nevada corporation wholly owned by NutraCea,      February 4, 2000 (68-0445761)                                                             |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                    |
| 3.     | NutraStarSport,      Inc., a Nevada corporation, owned by NutraStar Technologies Incorporated      and Chris Basio, April 26, 2001                                                      |
|   |                                                                                                                                                                                    |
| 4.     | The      RiceX Company, a Delaware corporation wholly owned by NutraCea, August 4,      1998 (68-0412200)                                                                               |
|   |                                                                                                                                                                                    |
| 5.     | RiceX      Nutrients, Inc., a Montana corporation wholly owned by The RiceX Company,      August 9, 2004 (68-0397535)                                                                   |
|   |                                                                                                                                                                                    |
| 6.     | Global      Nutra, Inc., a Nevada corporation wholly-owned by NutraCea, December 13,      2006                                                                                          |
|   |                                                                                                                                                                                    |
| 7.     | Nutramercials,      Inc., a Nevada corporation wholly-owned by NutraCea, December 13, 2006      (26-0888871)                                                                            |
|   |                                                                                                                                                                                    |
| 8.     | Infomaxx,      LLC, a Delaware limited liability company, owned by Nutramercials,      December 12, 2006 (20-8083718)                                                                   |
|   |                                                                                                                                                                                    |
| 9.     | NutraCea      Brazil Ltda., a Brazilian corporation and subsidiary of      NutraCea                                                                                                     |
|   |                                                                                                                                                                                    |
| 10.    | Grain      Enhancement LLC, a Delaware limited liability company, owned by NutraCea      and Pacific Advisors Holdings Limited, June 30, 2007                                           |
|   |                                                                                                                                                                                    |
| 11.    | Medan,      LLC, a Delaware limited liability company, owned by NutraCea, January 23,      2008 (26-1809684)                                                                            |
|   |                                                                                                                                                                                    |
| 12.    | Rice      Rx, LLC, a Delaware limited liability company, owned by NutraCea and      HerbalScience Singapore Pte. Ltd., December 26, 2007      (26-1644643)                              |
|   |                                                                                                                                                                                    |
| 13.    | Rice      Science, LLC, a Delaware limited liability company, owned by NutraCea and      HerbalScience Singapore Pte. Ltd., December 26, 2007      (26-1644685)                         |
|   |                                                                                                                                                                                    |
| 14.    | NutraPhoenix,      LLC, a Delaware limited liability company owned by NutraCea, January 15,      2008 (26-2233062)                                                                      |
|   |                                                                                                                                                                                    |
| 15.    | NutraSA,      LLC, a Delaware limited liability company owned by NutraCea, January 11,      2008 (26-3258449)                                                                           |
|   |                                                                                                                                                                                    |
| 16.    | Irgovel      - Industria Riograndens De Oleos Vegetais Ltda., a limited liability      company organized under the laws of the Federative Republic of Brazil      owned by NutraSA, LLC |
|   |                                                                                                                                                                                    |
| 17.    | PT      Panganmas Inti Nusantara, an Indonesian company owned by Medan, LLC (51%)      and Fortune BVI                                                                                  |
|   |                                                                                                                                                                                    |
| 18.    | NutraCea/Cura,      LLC, a Delaware limited liability company owned by NutraCea (90%) and Cura      Pharamceutical Co., Inc. (10%), August 15, 2007    (26-0851100)                     |

----

| 19.    | NutraCea      Offshore LTD., an exempted company organized under the laws of the Cayman      Islands owned by NutraCea |
|--------|------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                   |
| 20.    | Global      Nutra Solutions LLC, a Delaware limited liability company owned by      NutraCea, December 12, 2006        |
|   |                                                                                                                   |
| 21.    | Grainovation,      Inc., a Tennessee corporation, Incorporated January 22, 1988 (acquired      5/1/2007) (62-1340914)  |

| (f) | Financial Condition;      No Adverse Change. Company has furnished to Wells Fargo its audited      financial statements for its fiscal year ended December 31, 2007 and      unaudited financial statements for the fiscal-year-to-date period ended      September 30, 2008, and those statements fairly present Company's      financial condition as of those dates and the results of Company's      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 Effect in Company's      business, properties or condition (financial or otherwise). The Company      has disclosed to Wells Fargo that in connection with the standard three      year review of filings by the Securities Exchange Commission ("SEC"), the      SEC provided a comment letter and requested that the Company elaborate on      its accounting for certain transactions during the three year period      ending December 31, 2007. Based on its review, the SEC may require the      Company to make revisions to the financial statements under review.      However, the Company believes that the requested revisions, if any, will      not materially effect the Company's balance sheet or financial condition s      of September 30, 2008. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (g) | Litigation.      There are no actions, suits or proceedings pending or, to Company's      knowledge, threatened against or affecting Company or any of its      Affiliates or the properties of Company or any of its Affiliates before      any court or governmental department, commission, board, bureau, agency or      instrumentality, domestic or foreign, which, if determined adversely to      Company or any of its Affiliates, would result in a final judgment or      judgments against Company or any of its Affiliates in an amount in excess      of $10,000, apart from those matters specifically disclosed      below. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Litigation      Matters in Excess of $10,000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| NutraCea v. Vital Living                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| On      September 3, 2008, NutraCea filed a complaint in Arizona State Superior      Court, County of Maricopa, against Vital Living, Inc. ("Vital Living")      seeking to enforce certain notes secured by a Security Agreement pledging      all of the assets of Vital Living as collateral for the notes. In its      complaint, NutraCea alleges causes of action for breach of contract,      common counts, money lent, foreclosure on collateral, specific performance      and permanent injunctive relief. The complaint was served upon Vital      Living in Palm Beach County, Florida on September 10, 2008. Vital Living has yet to appear in the      lawsuit. |

----

| NutraCea      v. Dennis Ledesma                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| NutraCea      has filed a lawsuit against former employee Dennis Ledesma for defamation      and breach of contract, etc. alleging that Mr. Ledesma made false      statements about NutraCea causing damages to NutraCea and its business.      Mr. Ledesma failed to respond to the complaint and the Court entered      default against him. We are now in the process of moving the Court for a      default judgment against Mr. Ledesma based on the harm to NutraCea's      business and reputation.                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Litigation involving  Irgovel                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| On      January 31, 2008, NutraCea entered into a Quotas Purchase and Sale      Agreement (the "Irgovel Agreement") with all the owners ("Sellers") of      Irgovel -Industria Riograndens De Oleos Vegetais Ltda., a limited      liability company organized under the laws of the Federative Republic of      Brazil. Pursuant to the agreement, NutraCea deposited into an escrow      account approximately $2,000,000 to cover contingent liabilities owed by      Irgovel as described on Schedule H and I of the Irgovel Agreement. Some of      the contingent liabilities listed on Schedule H and I are for lawsuits      filed against Irgovel. The estimated costs and expenses for these lawsuits      were included in the amounts set aside in the escrow account to cover      these contingencies. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| On      October 7, 2008, Irgovel was served with notice of a suit filed by David      Zigart Resyng against Irgovel and Osmar Brito (a "Seller" in the January      31, 2008 transaction between NutraCea and the Sellers of Irgovel) claiming      that (i) Osmar Brito and Irgovel, represented by Osmar Brito, willfully      misled David Zigart Resyng into executing a settlement with regard to his      ownership of Irgovel with the other Sellers and (ii) that due to this      settlement and the subsequent sale of Irgovel to NutraCea, David Zigart      Resyng has suffered financial damages. An injunction has been granted to      cease any distributions of assets in the escrow account established in      connection with the transaction.                                                   |

----

| Intellectual Property      Disclosures                        |
|--------------------------------------------------------------------|
|                                                               |
| See      trademark and patent schedules on subsequent pages.  |

----

| Title                                  | Type                      | Application/Registration      No.              | Issue/Reg.      Date | Filing      Date | Name      of Registrant/Applicant |
|----------------------------------------|---------------------------|------------------------------------------------|----------------------|------------------|-----------------------------------|
| FIBERICE                               | Registered      Trademark | Assigned      by Farmers Rice to      NutraCea | 12/1/2008            |             |                              |
| RISOLUBLES                             | Registered      Trademark | 2,461,604                                      | 6/19/2001            | 5/10/2000        | NutraCea                          |
| MISCELLANEOUS      DESIGN ("Caduceus") | Registered      Trademark | 2,461,745                                      | 6/19/2001            | 6/15/2000        | NutraCea                          |
| CEA      100                           | Registered      Trademark | 2,979,145                                      | 7/26/2005            | 8/18/2003        | NutraCea,      Inc                |
| NUTRACEA                               | Registered      Trademark | 2,658,784                                      | 12/10/2002           | 9/17/2001        | NutraCea                          |
| LIVERBOOST                             | Registered      Trademark | 2,512,728                                      | 11/27/2001           | 4/5/2001         | NutraCea                          |
| RICEMUCIL                              | Registered      Trademark | 2,537,997                                      | 2/12/2002            | 11/13/2000       | NutraCea                          |
| RICE      PATTY                        | Registered      Trademark | 3,171,168                                      | 11/14/2006           | 11/28/2005       | NutraCea,      Inc                |
| EQUINE      SHINE (& design)       | Registered      Trademark | 2,659,543                                      | 12/10/2002           | 7/24/2001        | NutraCea                          |
| THE      RICEPATTY COLLECTION          | Registered      Trademark | 3,229,286                                      | 4/17/2007            | 12/20/2005       | NutraCea,      Inc                |
| MAX-E-BRAN      SRB                    | Registered      Trademark | 3,375,242                                      | 1/29/2008            | 5/22/2007        | NutraCea                          |
| SERVING      MANKIND                   | Registered      Trademark | 3,410,639                                      | 4/8/2008             | 1/13/2006        | NutraCea,      Inc                |
| RICE      X                            | Registered      Trademark | 3,317,370                                      | 10/23/2007           | 12/8/2005        | NutraCea                          |
| SATIN      FINISH                      | Registered      Trademark | 1,803,034                                      | 11/9/1993            | 12/10/1992       | NutraCea                          |
| NATURAL      GLO                       | Registered      Trademark | 3,501,738                                      | 9/16/2008            | 2/25/2008        | NutraCea                          |
| NATURAL      GLO (& design)        | Registered      Trademark | 1,927,481                                      | 10/17/1995           | 6/8/1994         | NutraCea                          |

----

| NUTRACEA      (& design) | Registered      Trademark        | 3,501,581  | tab | 9/16/2008  | NutraCea  |
|------------------------------|----------------------------------|------------|-----|------------|-----------|
| RISPORT                      | Trademark      Application       | 77/484,373 | tba | 5/27/2008  | NutraCea  |
| RITRAINER                    | Trademark      Application       | 77/484,375 | tba | 5/27/2008  | NutraCea  |
| RIBUILDER                    | Trademark      Application       | 77/484.384 | tba | 5/27/2008  | NutraCea  |
| IRGOVEL                      | Trademark      Application       | 77/555,244 | tba | 8/25/2008  | \NutraCea |
| PELOTAS                      | Trademark      Application       | 77/597,273 | tba | 10/21/2008 | NutraCea  |
| GASTROBIOTICS                | Trademark      Application       | 78/799,457 | tba | 1/25/2006  | NutraCea  |
| RIBALANCE                    | Trademark      Application       | 77/383.574 | tba | 1/29/2008  | NutraCea  |
| LIVING      VITAMINS         | Trademark      Application (ITU) | 77/155,596 | tba | 4/12/2007  | NutraCea  |

| NutraCea Issued Patents To      Date                                                         | Issue      Date | Patent      No | Country |
|----------------------------------------------------------------------------------------------|-----------------|----------------|---------|
|                                                                                         |            |           |    |
| US Patents                                                                                   |            |           |    |
|                                                                                         |            |           |    |
| 1.      "Production of Beta-Glucan and Beta-Glucan Product"                                  | 05.12.1994      | 5512287        | US      |
|                                                                                         |            |           |    |
| 2.      "Process for Obtaining Micronutrient Enriched Rice Bran    Oil"                      | 11.16.1999      | 5985344        | US      |
|                                                                                         |            |           |    |
| 3."Method      for Treating Hypercholesterolemia, Hyperlipidemia, and      Atherosclerosis"  | 10.03.2000      | 6126943        | US      |
|                                                                                         |            |           |    |
| 4.      "Supportive Therapy for Diabetes, Hyperglycemia and      Hypoglycemia"               | 10.16.2001      | 02.26.2002     | US      |
|                                                                                         |            |           |    |
| 5.      "Method for Controlling Serum Glucose"                                               | 6303586         | 6350473        | US      |
|                                                                                         |            |           |    |
| 6.      "Method for Treating Hypercholesterolemia, Hyperlipidemia, and      Atherosclerosis" | 05.06.2003      | 6558714        | US      |
|                                                                                         |            |           |    |
| 7.      "Method for Treating Hypercholesterolemia, Hyperlipidemia, and      Atherosclerosis" | 05.11.2004      | 6733799        | US      |
|                                                                                         |            |           |    |
| 8.      "Method for Treating Joint Inflammation, Pain, and Loss of      Mobility"            | 06.07.2005      | 6902739        | US      |

----

| International      Patents                                                                 |       |       |             |
|--------------------------------------------------------------------------------------------|------------|------------|------------------|
|                                                                                       |       |       |             |
| 1.      Supportive Therapy for Diabetes, Hyperglycemia and      Hypoglycemia               | 03.28.2002 | 71377      | Singapore        |
|                                                                                       |       |       |             |
| 2.      Supportive Therapy for Diabetes, Hyperglycemia and      Hypoglycemia               | 12.05.2002 | 751704     | Australia        |
|                                                                                       |       |       |             |
| 3.      Supportive Therapy for Diabetes, Hyperglycemia and      Hypoglycemia               | 02.03.2003 | 503648     | New      Zealand |
|                                                                                       |       |       |             |
| 4.      Supportive Therapy for Diabetes, Hyperglycemia and      Hypoglycemia               | 07.16.2003 | 98810675.2 | Canada           |
|                                                                                       |       |       |             |
| 5.      "Process for Obtaining Micronutrient Enriched Rice Bran    Oil"                    | 10.22.2004 | 15162B1    | Argentina        |
|                                                                                       |       |       |             |
| 6.      Supportive Therapy for Diabetes, Hyperglycemia and      Hypoglycemia               | 12.06.2005 | 232655     | Mexico           |
|                                                                                       |       |       |             |
| 7.      A Method for Treating Diabetes, Hyperglycemia and    Hypoglycemia                  | 05.18.2006 | 583211     | Korea            |
|                                                                                       |       |       |             |
| 8.      "Method for Treating Joint Inflammation, Pain, and Loss of      Mobility"          | 10.18.2007 | 2002315558 | Australia        |
|                                                                                       |       |       |             |
| 9.      "Diabetic Food Kit Comprising Enzyme Treated Stabilized Rice Bran      Derivative" | 06.23.2008 | 221444     | India            |

| (i) | Taxes.      Company and its Affiliates have paid or caused to be paid to the proper      authorities when due all federal, state and local taxes required to be      withheld by each of them. Company and its Affiliates have filed all      federal, state and local tax returns which to the knowledge of the      Officers of Company or any Affiliate, as the case may be, are required to      be filed, and Company and its Affiliates have paid or caused to be paid to      the respective taxing authorities all taxes as shown on these returns or      on any assessment received by any of them to the extent such taxes have      become due. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (j) | Titles and      Liens. Company has good and absolute title to all Collateral free      and clear of all Liens other than Permitted Liens. No financing statement      naming Company as debtor is on file in any office except to perfect only      Permitted Liens. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (k) | No Defaults.      Company is in compliance with all provisions of all agreements,      instruments, decrees and orders to which it is a party or by which it or      its property is bound or affected, the breach or default of which could      have a Material Adverse Effect on Company's financial condition,      properties or operations. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (l) | Submissions to Wells      Fargo. All financial and other information provided to Wells Fargo      by or on behalf of Company in connection with Company's request for the      credit facilities contemplated hereby is (i) true, correct and complete in      all material respects, (ii) does not omit any material fact that would      cause such information to be misleading, and (iii) as to projections,      valuations or proforma financial statements, present a good faith opinion      as to such projections, valuations and proforma condition and      results. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (m) | Financing      Statements. Company has previously authorized the filing of      financing statements sufficient when filed to perfect the Security      Interest and other Liens created by the Security Documents. When such      financing statements are filed, Wells Fargo will have a valid and      perfected security interest in all Collateral capable of being perfected      by the filing of financing statements. None of the Collateral is or will      become a fixture on real estate, unless a sufficient fixture filing has      been filed with respect to suchCollateral. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (n) | Rights to      Payment. Each right to payment and each instrument, document,      chattel paper and other agreement constituting or evidencing Collateral is      (or, in the case of all future Collateral, will be when arising or issued)      the valid, genuine and legally enforceable obligation, subject to no      defense, setoff or counterclaim of the account debtor or other obligor      named in that instrument. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (o)  | Employee Benefit      Plans. |
|-----------|------------------------------|

----

| Employee      Benefit Plans           |
|---------------------------------------|
|                                  |
|  See      subsequent page.  |

----

| BENEFIT                             |   | DESCRIPTION                                                                                                                                                                                                                 |   | EFF.      DATE |
|-------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|
|                                |   |                                                                                                                                                                                                                        |   |           |
| Aetna      PPO Plan                 |   | Employee      health insurance - all locations except MontanaBasic      80/20 plan with $500/$ 1000 deductible for in network;Out      of network is 60/40 with $1000/$2000 deductibles                                     |   | 6/1/2007       |
|                                |   |                                                                                                                                                                                                                        |   |           |
| Aetna      Traditional Choice Plan  |   | Employee      health insurance - Montana onlyPays      80% for basic services; $500/$ 1000 deductible                                                                                                                       |   | 6/1/2007       |
|                                |   |                                                                                                                                                                                                                        |   |           |
| MetLife      Dental Plan            |   | Dental      plan                                                                                                                                                                                                            |   | 6/1/2006       |
|                                |   |                                                                                                                                                                                                                        |   |           |
| Lincoln      National               |   | Life      Insurance PlanClass      1 - management - lx base salary up to $150,000 maxClass      2 - all other employees - $50,000Benefits      also include $2000 per child benefit to age 19 and$10,000      spousebenefit |   | 6/1/2007       |
|                                |   |                                                                                                                                                                                                                        |   |           |
| Lincoln      National               |   | Long      Term Disability PlanPays      60% of basic monthly income up to $1 Ok/month, after a90      day waiting period                                                                                                    |   | 6/1/2008       |
|                                |   |                                                                                                                                                                                                                        |   |           |
| Health      Reimbursement Plan      |   | For      employees with 1+ year of serviceCo.      funds $1500 for single medical coverage/$3000 forfamily      coverage/yr                                                                                                 |   | 1/1/2006       |
|                                |   |                                                                                                                                                                                                                        |   |           |
| 401(k)      and Profit Sharing Plan |   | Safe      harbor plan - co. contributes 3% of base comp to plan Annual discretionary      match or profit sharing at year end                                                                                               |   | 4/1/2006       |
|                                |   |                                                                                                                                                                                                                        |   |           |
| Product      Discounts              |   | 30%      off cost OR whatever special is running (whichever is lowest      price)                                                                                                                                           |   |           |

----

| (p)  | Environmental      Matters. |
|-----------|-----------------------------|

| Environmental      Matters |
|----------------------------|
|                       |
| None      known.      |

----

| To: | Wells      Fargo Bank, National Association |
|-----|---------------------------------------------|

| Date: | [________,      200_] |
|-------|-----------------------|

| Subject: | Financial      Statements |
|----------|---------------------------|

|   | o | Company      has not, since the date of the Credit Agreement, changed its name or      jurisdiction of organization, nor has it consolidated or merged with      another Person. |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Company      has, since the date of the Credit Agreement, either changed its name or      jurisdiction of organization, or both, or has consolidated or merged with      another Person, which change, consolidation or merger: o was consented to      in advance by Wells Fargo in an Authenticated Record, and/or o is more fully      described in the statement of facts attached to this      Certificate. |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | I      have no knowledge of the occurrence of an Event of Default under the      Credit Agreement, except as previously reported to Wells Fargo in a      Record. |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | I      have knowledge of an Event of Default under the Credit Agreement not      previously reported to Wells Fargo in a Record, as more fully described in      the statement of facts attached to this Certificate, and further, I      acknowledge that Wells Fargo may under the terms of the Credit Agreement      impose the Default Rate at any time during the resulting Default      Period. |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | D. | Litigation Matters. I      certify that: |
|--------|----|------------------------------------------|

----

|   | o | I      have no knowledge of any material adverse change to the litigation      exposure of Company or any of its Affiliates or of any      Guarantor. |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | I      have knowledge of material adverse changes to the litigation exposure of      Company or any of its Affiliates or of any Guarantor not previously      disclosed in Exhibit D, as      more fully described in the statement of facts attached to this      Certificate. |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | E. | Financial Covenants. I      further certify that: |
|--------|----|---------------------------------------------------|

| Quarter Ending         | Minimum Net Income    |
|------------------------|-----------------------|
|                   |                  |
| December      31, 2008 | <$3,000,000.00> |

| Ouarter      Ending          | Minimum      Quarterly Cumulative |
|------------------------------|-----------------------------------|
|                         | Net      Income Step Up           |
| Each      March 31, 2009     | <$1,000,000.00>             |
| Each      June 30, 2009      | <$500,000.00>               |
| Each      September 30, 2009 | $750,000.00                       |
| Each      December 31, 2009  | $2,000,000.00                     |

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|   | NUTRACEA,      a California corporation                      |
|--------|--------------------------------------------------------------|
|   |                                                         |   |
|   | By:                                                          |   |
|   |                                                         | Its      Chief Financial Officer |
|   |                                                         |   |
|   | NUTRAPHOENIX,      LLC, a Delaware limited liability company |
|   |                                                         |   |
|   | By:                                                          |   |
|   |                                                         | Its      Chief Financial Officer |

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