Document:

Exhibit 10.18

LOAN AND SECURITY
AGREEMENT

by
and between

OMNIVISION
TECHNOLOGIES, INC.

a
Delaware corporation

and

CITIBANK,
N.A., a national banking association

Dated
as of March 16, 2007

Loan and Security
Agreement

	
  

  	
  Borrower:

  	
  OmniVision Technologies, Inc.,

  
	
   

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  1341 Orleans Drive

  
	
   

  	
   

  	
  Sunnyvale, California 94089

  
	
   

  	
   

  	
  Attention: General Counsel

  

 

Date:                    March 16, 2007

THIS LOAN AND SECURITY AGREEMENT (“Agreement”)  is entered into as of the above date between Citibank N.A., a
national banking association (“Lender”),  with offices at 201 West Lexington Drive,
6th Floor, Glendale, California 91203, and the borrower named above (“Borrower”),  whose chief executive office is located at the above address
(“Borrower’s Address”).

1.                         DEFINITIONS
AND INTERPRETATIONS

1.1                               Definitions.  As used in this Agreement, the following
terms have the following meanings:

“Additional Costs” has
the meaning set forth in Section 3.3(a).

“Borrower” has the
meaning set forth in the introduction to this Agreement.

“Borrower’s Address” has
the meaning set forth in the introduction to this Agreement.

“Business Day” means
(i) a day on which Lender is open for business in the State of California, and
(ii) a day on which banks are open for dealings in dollar deposits in the
London interbank market.

“Change of Control” shall
be deemed to have occurred at such time as a “person” or “group” (within the
meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934)
(other than the current holders of the ownership interests in any Borrower)
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934), directly or indirectly, as a result of any single
transaction, of more than fifty percent (50%) of the total voting power of all
classes of stock or other ownership interests then outstanding of any Borrower
normally entitled to vote in the election of directors or analogous governing
body.

“Conversion Date” means
September 30, 2008 or such earlier date as elected by Borrower in writing on at
least five (5) Business Days’ notice to Lender.

“Default” means any
event which, with notice or passage of time or both, would constitute an Event
of Default.

“Dollars or $”
means United States dollars.

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“EBITDA” means, in
any fiscal period, Borrower’s consolidated net income or net loss as determined
by Lender, plus (i) the amount of all interest expense, income tax expense,
depreciation expense and amortization expense of Borrower for such period, [on
a consolidated basis], and plus or minus (as the case may be) (ii) any other
non-cash charges which have been added or subtracted (including non-cash stock
options), as the case may be, in calculating Borrower’s consolidated net income
for such period.

“Event of Default” means
any of the events set forth in Section 9.1.

“GAAP” means
generally accepted accounting principles as in effect from time to time in the
United States, consistently applied.

“Indebtedness” of
any Person shall mean, without duplication, (a) all items which, in accordance
with GAAP, would be included in determining total liabilities as shown on the
liability side of the balance sheet of such Person as of the date as of which Indebtedness
is to be determined, including any lease which, in accordance with GAAP would
constitute Indebtedness, (b) all indebtedness secured by any mortgage, pledge,
security, Lien or conditional sale or other title retention agreement to which
any property or asset owned or held by such Person is subject, whether or not
the indebtedness secured thereby shall have been assumed, (c) all indebtedness
of others which such Person has directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary course of business),
discounted or sold with recourse or agreed (contingently or otherwise) to
purchase or repurchase or otherwise acquire, or in respect of which such Person
has agreed to supply or advance funds (whether by way of loan, stock, equity or
other ownership interest purchase, capital contribution or otherwise) or
otherwise to become directly or indirectly liable.

“Interest Expense” shall
mean, for any period, total interest expense (including attributable to capital
leases in accordance with GAAP) fees with respect to all outstanding
indebtedness including capitalized interest but excluding commissions,
discounts and other fees owed with respect to letters of credit and bankers’
acceptance financing and net costs under Interest Rate Agreements.

“Interest Period” means
for (a) for the first Interest Period hereunder, from the date of initial
funding of either of the Loans through and including March 31, 2007, and (b)
for each Interest Period thereafter commencing April 1, 2007, one calendar
month (i.e., periods ending on the last day of each calendar year).

“Interest Rate Agreement” means
any interest rate swap, cap or collar agreement or other similar agreement or
arrangement designed to hedge the position with respect to interest rates.

“Interest Rate Swap Agreement (Long
Form Trade Confirmation)” means an Interest Rate Agreement
(Long Form Trade Confirmation) with Lender or another party designated by
Borrower that will swap the interest rate hereunder for a fixed interest rate,
which agreement must be in form and substance acceptable to Lender.

“Lender” has the
meaning set forth in the introduction to this Agreement.

“LIBOR Base Rate (Term Loan)” means
the rate per annum for United States dollar deposits quoted by Lender in
accordance with its customary procedures and utilizing such electronic or other
quotation sources as it considers appropriate in its sole discretion as the
London interbank offered rate for a period of thirty (30), sixty (60) or ninety
(90) days with the understanding that such rate is quoted by Lender for the
purpose of calculating effective rates of interest for the loans making
reference thereto. Borrower may designate in writing the election of whether
the period shall be thirty (30), sixty (60) or ninety (90) days, but such
period may only change on the first day of each month (and Borrower must have
provided at least five Business Days advance written request for any change);
provided, however, that such period shall be thirty (30) days from and after
the Conversion Date. The LIBOR Base Rate (Term Loan) shall be adjusted on the
first day of each Interest Period based on the LIBOR Base Rate (Term Loan) on
the applicable LIBOR Determination Date.

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“LIBOR Base Rate (Mortgage Loan)” means
the rate per annum for United States dollar deposits quoted by Lender in
accordance with its customary procedures and utilizing such electronic or other
quotation sources as it considers appropriate in its sole discretion as the
London interbank offered rate for a period of thirty (30) days, with the
understanding that such rate is quoted by Lender for the purpose of calculating
effective rates of interest for the loans making reference thereto. The LIBOR
Base Rate (Mortgage Loan) shall be adjusted on the first day of each Interest
Period based on the LIBOR Base Rate (Mortgage Loan) on the applicable LIBOR
Determination Date.

“LIBOR Determination Date” means,
with respect to each Interest Period, the date that is two (2) Business Days
prior to the first day upon which such Interest Period commences; provided,
however, that in connection with a securitization of the Loan, Lender may, upon
prior written notice to Borrower, change the LIBOR Determination Date to a date
selected by Lender in its sole discretion (whereupon such newly selected LIBOR
Determination Date shall thereafter be effective) and, if requested by Lender,
Borrower shall promptly execute an amendment to this Loan Agreement to evidence
such change.

“LIBOR Rate (Term Loan)” means,
for each Interest Period, the rate per annum (rounded upwards, if necessary, to
the next 1/16%) determined by Lender as the sum of (a) the quotient of (i) the
LIBOR Base Rate (Term Loan) for such Interest Period, divided by  (ii)
100% minus the Reserve
Percentage, plus (b) one and one-quarter percent (1.25%). The LIBOR Rate shall
be adjusted on and as of the effective day of any change in the Reserve
Percentage.

“LIBOR Rate (Mortgage Loan)” means,
for each Interest Period, the rate per annum (rounded upwards, if necessary, to
the next 1/16%) determined by Lender as the sum of (a) the quotient of (i) the
LIBOR Base Rate (Mortgage Loan) for such Interest Period, divided by  (ii)
100% minus the Reserve
Percentage, plus (b) nine-tenths percent (0.90%). The LIBOR Rate (Mortgage
Loan) shall be adjusted on and as of the effective day of any change in the
Reserve Percentage.

“Loan Account” has
the meaning provided to such term in Section 2.2 hereof.

“Loan Borrowing Certificate” means
an irrevocable request from Borrower to Lender, in the form set forth on
Exhibit “A” attached hereto, duly executed by Borrower, specifying the date an
advance under the Term Loan is to be made (which shall be a Business Day.

“Loan Documents” means
this Agreement, the agreements and documents listed in Section 6.1, and
any other agreement, instrument or document executed in connection herewith or
therewith.

“Material Adverse Effect” means
a  material adverse effect on (i)
the business, assets, condition (financial or otherwise) or results of
operations of Borrower of any of the obligations secured by the Deed of Trust
(as defined below), (ii) the ability of Borrower to perform its obligations
under this Agreement (including, without limitation, repayment of the Loans and
all amounts secured by the Deed of Trust as they come due), or (iii) the
validity or enforceability of this Agreement or any other agreement or document
entered into by any party in connection herewith, or the rights or remedies of
Lender hereunder or thereunder.

“Maturity Date (Term Loan)” means
September 30, 2012 or such earlier date as the Term Loan is accelerated by
Lender.

“Maturity Date (Mortgage Loan)” means
March 31, 2017 or such earlier date as the Mortgage Loan is accelerated by
Lender.

“Net Income” means
the net income (or loss) determined in conformity with GAAP, provided that
there shall be excluded (i) the income (or loss) of any Person in which any
other Person (other than Borrower) has a joint interest, except to the extent
of the amount of dividends or other distributions actually paid to a Borrower
by such Person, (ii) the income (or loss) of any Person accrued prior to the
date it becomes a Borrower or is merged into or consolidated with a Borrower or
that Person’s assets are acquired by a Borrower, (iii) the income of any
subsidiary of Borrower to the extent that the declaration or payment of

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dividends or similar distributions of that income by that subsidiary is
not at the time permitted by operation of the terms of the charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that subsidiary, (iv) compensation expense resulting
from the issuance of capital stock, stock options or stock appreciation rights
issued to former or current employees, including officers, of a Borrower, or
the exercise of such options or rights, in each case to the extent the
obligation (if any) associated therewith is not expected to be settled by the
payment of cash by a Borrower or any affiliate thereof, and (v) compensation
expense resulting from the repurchase of capital stock, options and rights
described in clause (iv) of this definition of Net Income.

“Obligations” means
all present and future advances, debts, liabilities, obligations, guaranties,
covenants, duties and indebtedness at any time owing by Borrower to Lender,
whether evidenced by this Agreement or any note or other instrument or
document, whether arising from an extension of credit, opening of a letter of
credit, banker’s acceptance, loan, guaranty, indemnification or otherwise,
whether direct or indirect (including, without limitation, those acquired by
assignment and any participation by Lender in Borrower’s debts owing to
others), absolute or contingent, due or to become due, including, without
limitation, all interest, charges, expenses, fees, attorneys’ fees (including
attorneys’ fees and expenses incurred in bankruptcy), expert witness fees and
expenses, fees and expenses of consultants, audit fees, letter of credit fees,
collateral monitoring fees, closing fees, facility fees, termination fees, and
any other sums chargeable to Borrower under this Agreement or under any other
present or future instrument or agreement between Borrower and Lender,
including under any Interest Rate Agreement.

“Permitted Liens” means
the following:

(a)                       purchase
money security interests in specific items of equipment that are not fixtures
to the Property;

(b)                      leases of
specific items of equipment that are not fixtures to the Property;

(c)                       liens for
taxes not yet payable;

(d)                      security
interests being terminated substantially concurrently with this Agreement;

(e)                       liens of
materialmen, mechanics, warehousemen, carriers, or other similar liens arising
in the ordinary course of business and securing obligations which are not
delinquent;

(f)                         liens
incurred in connection with the extension, renewal or refinancing of the
indebtedness secured by liens of the type described above in clauses (a) or (b)
above, provided that any extension, renewal or replacement lien is limited to
the property encumbered by the existing lien and the principal amount of the
indebtedness being extended, renewed or refinanced does not increase; or

(g)                      liens in
favor of customs and revenue authorities which secure payment of customs duties
in connection with the importation of goods.

“Person” means any
individual, sole proprietorship, general partnership, limited partnership,
limited liability partnership, limited liability company, joint venture, trust,
unincorporated organization, association, corporation, government, or any
agency or political division thereof, or any other entity.

“Property” shall
have the meaning provided in the Deed of Trust.

“Regulatory Change” means,
with respect to Lender, any change on or after the date of this Agreement in
United States federal, state or foreign laws or regulations, including
Regulation D, or the adoption or making on or after such date of any
interpretations, directives or requests applying to a class of lenders
including Lender of or under any United States federal or state, or any
foreign, laws or regulations (whether or not having the force of law) by any
court or governmental or monetary authority charged with the interpretation or
administration thereof.

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“Reserve Percentage” means,
on any day, the maximum percentage prescribed by the Board of Governors of the
Federal Reserve System (or any successor governmental authority) for
determining the reserve requirements (including any basic, supplemental,
marginal, or emergency reserves) that are in effect on such date with respect
to eurocurrency funding (currently referred to as “eurocurrency liabilities”)
of Lender, but so long as Lender is not required or directed under applicable
regulations to maintain such reserves, the Reserve Percentage shall be zero.

“Solvent” means,
with respect to any Person on a particular date, that on such date (a) at fair
valuations, all of the properties and assets of such Person are greater than
the sum of the debts, including contingent liabilities, of such Person, (b) the
present fair salable value of the properties and assets of such Person is not
less than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured, (c) such Person
is able to realize upon its properties and assets and pay its debts and other
liabilities, contingent obligations and other commitments as they mature in the
normal course of business.

“Subordinated Debt” shall
mean any Indebtedness and liabilities of Borrower which have been subordinated
by written agreement to Indebtedness owed by Borrower to Lender in a form and
substance acceptable to Lender.

“Tangible Net Worth” means,
as of the date of determination, all of Borrower’s assets, plus Subordinated
Debt (excluding all assets of a Person that would be treated as intangible assets
on such Person’s balance sheet prepared in accordance with GAAP, i.e.,
goodwill, patents, trademarks, trade names, copyrights, franchises, formulas,
leasehold interests, leasehold improvements, non-compete agreements,
engineering plans, deferred tax benefits, organization costs, prepaid items and
monies due Affiliates, employees and officers), less Total Debt.

“Total Debt” shall
mean the total of all items of Indebtedness, obligations or liability as shown
on a consolidated balance sheet of Borrower as of the date as of which Total
Debt is to be determined, excluding, however, Subordinated Debt.

1.2                       Accounting
Terms and Determinations Unless otherwise specified herein, all accounting
terms used in this Agreement, unless otherwise indicated, shall have the
meanings given to such terms in accordance with GAAP. In addition, unless
otherwise specified herein all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP.

1.3                       Construction.
Unless the context of this Agreement clearly requires otherwise, references
to the plural include the singular and references to the singular include the
plural; references to any gender include any other gender; the part includes
the whole; the term “including” is not limiting, and the term “or” has, except
where otherwise indicated, the inclusive meaning represented by the phrase “and/or”.
The words, “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this
Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement. Article, section, subsection, clause, exhibit and
schedule references are to this Agreement, unless otherwise specified. Any
reference in this Agreement or any of the Loan Documents to this Agreement or
any of the Loan Documents includes any and all permitted alterations,
amendments, changes, extensions, modifications, renewals, or supplements
thereto or thereof, as applicable.

1.4                       Exhibits
and Schedules. All of the exhibits and schedules attached hereto shall be
deemed incorporated herein by reference.

1.5                       No
Presumption Against Any Party. Neither this Agreement, any of the Loan
Documents, any other documents, agreement, or instrument entered into in
connection herewith, nor any uncertainty or ambiguity herein or therein shall
be construed or resolved using any presumption against any party hereto,
whether under any rule of construction or otherwise. On the contrary, this
Agreement, the Loan Documents, and the other documents, instruments, and
agreements entered into in connection herewith have been reviewed by each of
the parties and their counsel and shall be construed and interpreted according
to

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the ordinary meanings of the words used so as to accomplish fairly the
purposes and intentions of all parties hereto.

1.6                       Independence
of Provisions. All agreements and covenants hereunder, under the Loan
Documents and the other documents, instruments, and agreements entered into in
connection herewith shall be given independent effect such that if a particular
action or condition is prohibited by the terms of any such agreement or
covenant, the fact that such action or condition would be permitted within the
limitations of another agreement or covenant shall not be construed as allowing
such action to be taken or condition to exist.

2.                                      CREDIT
FACILITIES

2.1                       Loans.

(a)                                  Mortgage Loan. Lender will make a loan
to Borrower (the “Mortgage Loan”)
in an amount not to exceed Twenty-Seven Million Nine Hundred Twenty-Seven
Thousand Forty-Five and No/100 Dollars ($27,927,045.00) on the terms and
conditions contained herein. The Mortgage Loan shall be made in one advance.
Borrower may not reborrow any amounts advanced under the Mortgage Loan.

(b)                                 Term Loan. Provided no Default or Event
of Default has occurred and is continuing, Lender will make additional advances
to Borrower (collectively, the “Term Loan”;  the Term Loan together with the Mortgage
Loan may be referred to herein, collectively, as the “Loans”) from time to time from the date hereof to and
including the Conversion Date in minimum advances of One Million Dollars
($1,000,000) for the first advance and Two Hundred Fifty Thousand Dollars
($250,000) for subsequent advances in a total aggregate amount not to exceed
Twelve Million Dollars ($12,000,000). Borrower may not reborrow any amounts
advanced under the Term Loan.

2.2                       Loan
Account. Lender shall maintain on its books a record of account (“Loan Account”) in which Lender shall make
entries for each of the Loans and such other debits and credits as shall be
appropriate in connection with the credit facility set forth in this Agreement.
Each of the Loans made by Lender shall be deposited in Borrower’s account
number DDA #600956767 at Lender, or such other account with Lender as
designated in writing by Borrower.

3.                                      TERMS
OF PAYMENT

3.1                       Interest.

(a)                                  Mortgage Loan. The outstanding
principal balance of the Mortgage Loan shall accrue interest at the LIBOR Rate
(Mortgage Loan).

(b)                                 Term Loan. The outstanding principal
balance of the Term Loan shall accrue interest at the LIBOR Rate (Term Loan).
Borrower shall request additional advances from the Term Loan by delivering to
Lender a Loan Borrowing Certificate with respect thereto. The Loan Borrowing
Certificate shall be received by Lender no later than 11:00 a.m. (California
time) at least two (2) Business Days prior to the Business Day such advance
shall occur. Any Loan Borrowing Certificate received by Lender after 11:00 a.m.
(California time) shall not be considered by Lender until the next Business
Day.

3.2                       Payments.

(a)                                  Mortgage Loan.

(i)                            Commencing
with the date of the initial disbursement of funds through the end of the
calendar month in which such disbursement occurs, interest only shall be
payable in advance on the Mortgage Loan at the LIBOR Rate (Mortgage Loan).
Interest for such partial month shall be computed on

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the basis of a 360-day year and shall be equal to the sum of a per diem
interest charge (for each day the principal balance hereof is outstanding
during such partial month) equal to the product of (a) 1/360 and (b) the
Contract Rate and (c) the outstanding principal balance hereunder for the day
in question.

(ii)                               Commencing
on May 1, 2007, and continuing on the first day of each calendar month
thereafter, Borrower shall make monthly payments to Lender of principal and
interest (in arrears) in an amount necessary to fully amortize the Mortgage
Loan over an amortization period ending on April 30, 2032.

(iii)                            The entire balance of
principal and accrued interest and other amounts then outstanding on the
Mortgage Loan are due and payable on the Maturity Date (Mortgage Loan).
Borrower acknowledges that such balance will not equal the monthly payments
specified in Section 3.2(a)(i) and Section 3.2(a)(ii).

(b)                            Term Loan.

(i)                                  Commencing
on April 1, 2007, and continuing on the first day of each calendar month
thereafter, Borrower shall make monthly payments to Lender of all accrued
interest under the Term Loan.

(ii)                               Commencing
on the Conversion Date if such date is the first date of a calendar month and
otherwise on the first date of the next calendar month, and continuing on the
first day of each calendar month thereafter, in addition to interest payable
under the Term Loan, the Term Loan will be repayable in forty-eight (48)
additional equal monthly installments of principal, in an amount sufficient to
cause the Term Loan to be repaid on the Maturity Date (Term Loan).

(iii)                            Unless otherwise repaid,
the entire balance of principal and accrued interest and other amounts then
outstanding on the Term Loan are due and payable on the Maturity Date (Term
Loan). Borrower acknowledges that such balance may not equal the regular
monthly payment specified in Section 3.2(b)(i) and Section 3.2(b)(ii).

(c)                                  Deduction of Amounts Payable. Borrower
agrees that interest and principal payments, and any fees, will be deducted
automatically on the due date from Borrower’s account with Lender, account
number DDA #600956767 or such other of the Borrower’s accounts with Lender as
designated in writing by the Borrower. Borrower will maintain sufficient funds
in the account on the dates the Lender enters debits authorized by the ACH (as
defined below).

3.3                       Additional
Costs and Other Terms.

(a)                                  Borrower
shall pay to Lender, upon demand by Lender, from time to time such amounts as
Lender may determine to be necessary to compensate it for any costs incurred by
Lender that Lender determines are attributable to its making or maintaining of
any amount receivable by Lender hereunder in respect of the Mortgage Loan or
Term Loan relating thereto (such increases in costs and reductions in amounts
receivable being herein called “Additional
Costs”),  in each case
resulting from any Regulatory Change which:

(i)                                  changes
the basis of taxation of any amounts payable to Lender under this Agreement
with respect of the Mortgage Loan or Term Loan (other than changes which affect
taxes measured by or imposed on the overall net income of Lender by the
jurisdiction in which Lender has its principal office); or

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(ii)                               imposes
or modifies any reserve, special deposit or similar requirements relating to
any extensions of credit or other assets of, or any deposits with or other
liabilities of Lender (including the Mortgage Loan or Term Loan or any deposits
referred to in the definition of “LIBOR Base Rate (Mortgage Loan)” or “LIBOR
Base Rate (Term Loan); or

(iii)                            imposes any other condition
affecting the Mortgage Loan or Term Loan.

Lender will notify Borrower of any event occurring after the date of
this Agreement which will entitle Lender to compensation pursuant to this
Section as promptly as practicable after it obtains knowledge thereof and
determines to request such compensation. Lender will furnish Borrower with a
statement setting forth the basis and amount of each request by Lender for
compensation under this Section 3.3. Determinations and allocations by
Lender for purposes of this Section 3.3 of the effect of any Regulatory
Change on its costs of maintaining its obligations to make the Mortgage Loan or
Term Loan or of making or maintaining the Mortgage Loan or Term Loan or on
amounts receivable by it in respect of the Mortgage Loan or Term Loan, and of
the additional amounts required to compensate Lender in respect of any
Additional Costs, shall be conclusive absent manifest error.

(b)                                 If
Borrower requests additional advances, in addition to all other amounts payable
hereunder, Borrower shall pay to Lender, upon the request of Lender, such
amount or amounts as shall be sufficient (in the sole good faith opinion of
such Lender) to compensate it for any loss, costs or expense incurred by it as
a result of any failure by Borrower to borrow any amounts on the date for such
borrowing specified in the relevant notice of borrowing hereunder; provided,
however, that Lender acknowledges that there is no unused line fee in
connection with the Mortgage Loan or the Term Loan.

(c)                                  If
Lender shall determine that the adoption or implementation of any applicable
law, rule, regulation or treaty regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Lender in any respect,
with any directive regarding capital adequacy (whether or not having the force
of law) of any such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on capital of Lender or any
person or entity controlling Lender (a “Parent”)
as a  consequence of its
obligations hereunder to a level below that which Lender (or its Parent) could
have achieved but for such adoption, change or compliance (taking into
consideration its policies with respect to capital adequacy) by an amount
deemed by Lender to be material, then from time to time, within fifteen (15)
days after demand by Lender, Borrower shall pay to Lender such additional
amount or amounts as will compensate Lender for such reduction. A statement of
Lender claiming compensation under this Section and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive,
absent manifest error.

(d)                                 If
at any time Lender, in its sole and absolute discretion, determines that either
the LIBOR Rate (Mortgage Loan) or LIBOR Rate (Term Loan) does not accurately
reflect the cost to Lender of lending the Loan, then Lender shall promptly give
notice thereof to Borrower, and upon the giving of such notice, Lender’s
obligation to make additional advances the Loans shall terminate, unless Lender
and Borrower agree in writing to a different interest rate applicable to Loans.
If it shall become unlawful for Lender to continue to fund or maintain any
Loans, or to perform its obligations hereunder, upon demand by Lender, Borrower
shall prepay the Loans in full with accrued interest thereon and all other
amounts payable by Borrower hereunder (including, without limitation, any
amount payable in connection with such prepayment pursuant to Section 4.3).

4.                                      PAYMENT
OF OBLIGATIONS

4.1                       Maturity
Date. On the Maturity Date, Borrower shall pay and perform in full all
outstanding Loans and Obligations, whether for principal, interest, costs, fees
or otherwise, and whether or not all or any part of such Loans and Obligations
are otherwise then due and payable. Such payment of the outstanding Obligations
shall be withdrawn from Borrower’s Loan Account, or such other account with
Lender as designated in writing by Borrower.

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4.2                       Default
Rate of Interest. Upon the occurrence and during the continuation of an
Event of Default, the rate(s) of interest that would otherwise be applicable at
such time with respect to each of the Loans shall be increased by five (5)
percentage points (the “Past Due Rate”).
In addition, any amount not paid within ten (10) days when due hereunder shall
include a past due charge equal to the greater of (a) five percent (5%) of such
delinquent amount and (b) Fifty Dollars ($50) (but in no event more than the
maximum amount allowed by law) (the “Past Due
Charge”). In
addition, Borrower shall pay a fee to Lender equal to Twenty Dollars ($20) if
Borrower makes any payment hereunder the check or pre-authorized charge with
which Borrower pays is later dishonored.

4.3                       Early
Payment. If for any reason (including voluntary or mandatory prepayment or
acceleration), Lender receives all or part of the principal amount of any of
the Loans prior to the last day of the then applicable Interest Period,
Borrower shall, on demand by Lender, pay Lender the amount (if any) by which
(i) the additional interest which would have been payable on the amount so
received had it not been received until the last day of such Interest Period
exceeds (ii) the interest which would have been recoverable by Lender by
placing the amount so received on deposit in the certificate of deposit markets
or the offshore currency interbank markets or United States Treasury investment
products, as the case may be, for a period starting on the date on which it was
so received and ending on the last day of such Interest Period at the interest
rate determined by Lender in its reasonable discretion. Lender’s determination
as to such amount shall be conclusive absent manifest error.

4.4                       Prepayment.
So long as no Default or Event of Default exists, Borrower shall have the
privilege to prepay the principal of the Mortgage Loan and/or the Term Loan (in
whole only but not in part) upon and subject to the following terms and
conditions:

(a)                                  Concurrently
with such prepayment, Borrower shall pay all accrued and unpaid interest under
the applicable Loan (whether or not then due), all other amounts then due under
this Loan Agreement, the applicable Note and the Deed of Trust.

(b)                                 Any
prepayment shall be made only after not less than forty-five (45) days’ advance
written notice to Lender, which notice in each instance shall specify Borrower’s
election to make such prepayment and the amount of the same and the date of
repayment; provided, however, that such advance written notice period shall be
not less than five (5) Business Days (rather than not less than forty-five (45)
days) for prepayments, if any, required by Lender pursuant to Section
3.3(a)-(d) hereof or for prepayments if made by Borrower within thirty (30)
days of notice by Lender of the imposition of any additional charges under such
sections.

(c)                                  Included
within payment shall be any breakage fees, if any, in connection with any
Interest Rate Agreement (but such amounts shall only be payable if required
under the Interest Rate Agreement and, then, only on the terms and conditions
provided therein).

5.                                      SECURITY
INTEREST. The Loan and all obligations hereunder shall be secured by that
certain Deed of Trust, Assignment of Rents and Leases, Security Agreement and
Fixture Filing, dated as of the date hereof (the “Deed of Trust”) and that certain Stock Pledge Agreement dated
as of even date herewith (the “Stock Pledge
Agreement”).

6.                                      CONDITIONS
PRECEDENT. The obligation of Lender to make the Loans is subject to the
satisfaction, in the sole discretion of Lender, at or prior to the first
advance of funds hereunder, of each, every and all of the following conditions:

6.1                       Documents
and Agreements. Borrower shall deliver to Lender the following documents,
in form and substance satisfactory to Lender in its sole and absolute
discretion: this Agreement; and

(a)                                  the
Deed of Trust;

(b)                                 an
Environmental Indemnity by Borrower in favor of Lender;

 9
 

(c)                                  a
Promissory Note by Borrower evidencing the Mortgage Loan and the Term Loan made
hereunder (each, a “Note”);

(d)                                 the
Authorization Agreement for Pre-Authorized Payments (Debits) (the “ACH”);

(e)                                  the
Stock Pledge Agreement;

(f)                                    Interest
Rate Swap Agreement (Long Form Trade Confirmation);

(g)                                 Authorized
Signatories and MIFT Agreement; and

(h)                                 Alternative
Dispute Resolution Agreement.

6.2                       Organizational
Documents. Lender shall have received copies of Borrower’s articles
certificate of incorporation and all amendments thereto, and a certificate of
good standing, each certified by the Secretary of State of the state of
Borrower’s organization, and dated a recent date prior to the date of the
initial funding of the Loan. Lender shall have received evidence as to the due
authorization, execution and delivery of this Agreement and the other documents
contemplated hereby, and the transactions contemplated hereunder.

6.3                       Certified
Resolutions. Lender shall have received copies of Borrower’s By-laws and
all amendments thereto, and Lender shall have received copies of the
resolutions of the board of directors of Borrower, authorizing the execution
and delivery of this Agreement and the other documents contemplated hereby, and
authorizing the transactions contemplated hereunder and thereunder, and
authorizing specific officers of Borrower to execute the same on behalf of
Borrower, in each case certified by the Secretary or other acceptable officer
of Borrower as of the Closing Date.

6.4                       Due
Diligence. Lender shall have completed its due diligence with respect to
Borrower and the Property.

6.5                       Other
Documents and Agreements. Lender shall have received such other agreements,
instruments and documents as Lender may require in connection with the
transactions contemplated hereby, all in form and substance satisfactory to
Lender in Lender’s sole and absolute discretion (including a title insurance
policy in form, with such endorsements and such exceptions as are acceptable to
Lender).

6.6                       Opinion of
Borrower’s Counsel. Lender shall have received an opinion of Borrower’s
counsel, in form and substance satisfactory to Lender in its sole and absolute
discretion.

6.7                       Default. No
Default or Event of Default shall exist hereunder.

6.8                       Commitment
Fee. Borrower shall have paid to Lender a nonrefundable commitment fee in
the amount of forty-one hundreths percent (.40%) of the maximum possible amount
that may be advanced under the Mortgage Loan and the Term Loan.

7.                                      REPRESENTATIONS,
WARRANTIES AND COVENANTS OF BORROWER. In order to induce Lender to enter
into this Agreement and to make the Loan, Borrower represents and warrants to
Lender as follows, and Borrower covenants that the following representations
will continue to be true, and that Borrower will at all times comply with all
of the following covenants:

7.1                       State of
Organization, Existence and Authority. Borrower is and will continue to be,
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization which is accurately set forth in the heading
to this Agreement. Borrower is and will continue to be qualified and licensed
to do business in all jurisdictions in which any failure to do so would have a
Material Adverse Effect. The execution, delivery and performance by Borrower of
this Agreement, and all other documents contemplated hereby (a) have been duly
and validly authorized, (b) are enforceable against Borrower in

 10
 

accordance with their terms (except as enforcement may be limited by
equitable principles and by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to creditors’ rights generally), and (c) do not
violate Borrower’s operating agreement, or any law or any material agreement or
instrument which is binding upon Borrower or the Property, and (d) do not
constitute grounds for acceleration of any material indebtedness or obligation
under any material agreement or instrument that is binding upon Borrower or the
Property.

7.2                       Validity of
Loan Documents. The execution, delivery and performance by Borrower of the
Loan Documents: (1) are duly authorized and do not require the consent or
approval of any other party or governmental authority which has not been
obtained; and (2) will not violate any law of the United States, including
federal state or local laws (and to Borrower’s knowledge any foreign laws) or
result in the imposition of any lien, charge or encumbrance upon the assets of
any such party, except as contemplated by the Loan Documents. The Loan
Documents constitute the legal, valid and binding obligations of Borrower,
enforceable in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, or similar laws generally affecting the enforcement of
creditors’ rights.

7.3                       Name; Trade
Names and Styles. The name of Borrower set forth in the heading to this
Agreement is its correct name. Borrower has complied, and will in the future
comply, with all laws relating to the conduct of business under a fictitious
business name.

7.4                       Place of
Business. Borrower’s Address set forth in the heading to this Agreement is
the address and location of Borrower’s chief executive office.

7.5                       Books and
Records. Borrower has maintained and will maintain at Borrower’s Address
complete and accurate books and records, comprising an accounting system in
accordance with GAAP.

7.6                       Financial
Condition, Statements and Reports. All financial statements now or in the
future delivered to Lender have been, and will be, prepared in conformity with
GAAP (except, in the case of unaudited financial statements, for the absence of
footnotes and subject to normal year-end adjustments) and now and in the future
will fairly reflect the financial condition of Borrower, at the times and for
the periods therein stated. Between the last date covered by any such statement
provided to Lender and the date hereof, there has been no Material Adverse
Effect. Borrower is now and will continue to be Solvent.

7.7                       Tax Returns
and Payments; Pension Contributions. Borrower has timely filed, and will
timely file, all tax returns and reports required by foreign, federal, state
and local law, and Borrower and each Essential Additional Party has timely
paid, and will timely pay, all foreign, federal, state and local taxes,
assessments, deposits and contributions now or in the future owed by Borrower.
Borrower may, however, defer payment of any contested taxes, provided that
Borrower (a) in good faith contests Borrower’s obligation to pay the taxes by
appropriate proceedings promptly and diligently instituted and conducted, and
(b) posts bonds or takes any other steps required to keep the contested taxes
from becoming a lien upon any of the property of Borrower. As of the date hereof,
Borrower is unaware of any claims or adjustments proposed for any of Borrower’s
prior tax years which could result in additional taxes becoming due and payable
by Borrower. Borrower has paid, and shall continue to pay all amounts necessary
to fund all present and future pension, profit sharing and deferred
compensation plans in accordance with their terms, and Borrower has not and
will not withdraw from participation in, permit partial or complete termination
of, or permit the occurrence of any other event with respect to, any such plan
which could result in any liability of Borrower, including any liability to the
Pension Benefit Guaranty Corporation or its successors or any other
governmental agency.

7.8                       Taxes and
Assessments. To Borrower’s knowledge, the Property is comprised of one or
more parcels, each of which constitutes a separate legal parcel and a separate
tax lot and none of which constitutes a portion of any other tax lot. There are
no pending or, to Borrower’s best knowledge, proposed, special or other
assessments for public improvements or otherwise affecting the Property, nor
are there any contemplated improvements to the Property that may result in such
special or other assessments.

 11
 

7.9                       Compliance
with Law.

(a)                                  Borrower
represents and warrants that any current noncompliance, if any, with any
foreign, federal, state and local laws and regulations relating to Borrower
(including, but not limited to, the Fair Labor Standards Act, and those
relating to Borrower’s ownership of real or personal property, the conduct and
licensing of Borrower’s business, and environmental matters), shall not have a
Material Adverse Effect. Borrower agrees that Borrower shall comply, in all
material respects, with all foreign, federal, state and local laws and regulations
relating to Borrower or the Property, including, but not limited to, the Fair
Labor Standards Act, and those relating to Borrower’s ownership of real or
personal property, the conduct and licensing of Borrower’s business, and
environmental matters.

(b)                                 To
Borrower’s knowledge, Borrower has all requisite licenses, permits, franchises,
qualifications, certificates of occupancy or other governmental authorizations
to own, lease and operate the Property and carry on its business, the Property
is in compliance with all applicable legal requirements and is free of
structural defects, and all building systems contained therein are in good
working order, subject to ordinary wear and tear. Borrower shall cause (i)
Borrower to have all requisite licenses, permits, franchises, qualifications,
certificates of occupancy or other governmental authorizations to own, lease
and operate the Property and carry on its business, and (ii) the Property at
all times to be in compliance with all applicable legal requirements and to be
free of structural defects, and shall cause all building systems contained
therein to be in good working order, subject to ordinary wear and tear. To
Borrowers knowledge, the Property does not constitute, in whole or in part, a
legally nonconforming use under applicable legal requirements;

(c)                                  To
Borrower’s knowledge, no condemnation has been commenced or, is contemplated
with respect to all or any portion of the Property or for the relocation of
roadways providing access to the Property; and

(d)                                 To
Borrower’s knowledge, (i) the Property has adequate rights of access to public
ways and is served by adequate water, sewer, sanitary sewer and storm drain
facilities; (ii) all public utilities necessary or convenient to the full use
and enjoyment of the Property are located in the public right-of-way abutting
the Property, and all such utilities are connected so as to serve the Property
without passing over other property, except to the extent such other property
is subject to a perpetual easement for such utility benefiting the Property;
and (iii) all roads necessary for the full utilization of the Property for its
current purpose have been completed and dedicated to public use and accepted by
all governmental authorities. Borrower shall cause (i) the Property to have
adequate rights of access to public ways and is served by adequate water,
sewer, sanitary sewer and storm drain facilities; (ii) all public utilities
necessary or convenient to the full use and enjoyment of the Property to be
located in the public right-of-way abutting the Property, and all such
utilities to be connected so as to serve the Property without passing over
other property, except to the extent such other property is subject to a
perpetual easement for such utility benefiting the Property; and (iii) all
roads necessary for the full utilization of the Property for its current
purpose to be completed and dedicated to public use and accepted by all
governmental authorities.

7.10                Liabilities;
Litigation.

(a)                                  There
is no claim, suit, litigation, proceeding or investigation pending, or to the
best of Borrower’s knowledge, threatened by or against or affecting Borrower in
any court or before any governmental agency (or any basis therefore known to
Borrower) which may result, either separately or in the aggregate, in a
Material Adverse Effect. Borrower will promptly inform Lender in writing of any
proceeding, litigation or investigation in the future or instituted by or
against Borrower involving any single claim of $10,000,000 or more, or involving
$25,000,000 or more in the aggregate.

(b)                                 Borrower
is not contemplating either the filing of a petition by it under state or
federal bankruptcy or insolvency laws or the liquidation of all or a major
portion of its assets or property, and Borrower has no knowledge of any Person
contemplating the filing of any such petition against it.

7.11                Use of Proceeds.
All proceeds of the Mortgage Loan or Term Loan shall be used solely for lawful
business purposes.

 12
 

8.                                      ADDITIONAL
DUTIES OF THE BORROWER

8.1                       Insurance.
Borrower shall, at all times insure all of the property of Borrower as required
in the Deed of Trust.

8.2                       Reports.
Borrower shall cause to be delivered to Lender copies of the following reports:

(a)                                  Annual
Form 10K Report of Borrower (and its subsidiaries on a consolidated basis),
which will be delivered within ninety (90) days of fiscal year end of Borrower;

(b)                                 Quarterly
Form 10Q Report of Borrower (and its subsidiaries on a consolidated basis),
which will be delivered within forty-five (45) days after the end of each
calendar quarter;

(c)                                  Covenant
Compliance Certificate in the form of Exhibit “B” hereto, which will be
delivered within forty-five days after the end of each calendar quarter;

(d)                                 Covenant
Compliance Certificate in the form of Exhibit “C” hereto, which will be
delivered within ninety (90) days after the end of each calendar year;

(e)                                  Annual
company-prepared consolidating balance sheet and consolidating income statement
showing key entities of the Borrower (as a minimum, needs to show OmniVision
International Holdings Ltd. and OmniVision Technologies (Hong Kong) Company
Limited); and

(f)                                    Quarterly
company-prepared consolidating balance sheet and consolidating income statement
showing key entities of the Borrower (as a minimum, needs to show OmniVision
International Holdings Ltd. and OmniVision Technologies (Hong Kong) Company
Limited).

The financial and operating statements shall be prepared in accordance
with GAAP, and shall be certified as correct by Borrower. Borrower shall keep
books and records of account of all income and expenses of the Property and of
its own financial affairs sufficient to permit the preparation of the financial
and operating statements in accordance with the standards herein contained.
Lender and its designated agents and representatives shall have the absolute
right at all times upon reasonable prior notice to Borrower (unless an Event of
Default exists) to examine, copy, and audit any such books and records.
Borrower shall also furnish to Lender promptly upon request such documents and
instruments as Lender may request in order to verify the accuracy of any of the
information contained in any statement submitted hereunder. All books and
records pertaining to the income, expenses, management or operation of the Property
shall be kept at the Property unless otherwise approved by Lender; and all
books and records pertaining to Borrower’s financial condition shall be kept at
Borrower’s principal place of business or the office of Borrower’s accountants.

8.3                       Negative Covenants.
Borrower shall not, without Lender’s prior written consent, which shall not be
unreasonably withheld, do any of the following:

(a)                                  Except
in cases involving one or more Affiliates of the Borrower, merge or consolidate
with another entity, except in a transaction in which (i) the owners of
Borrower hold at least fifty percent (50%) of the ownership interest in the
surviving entity immediately after such merger or consolidation, and (ii)
Borrower is the surviving entity;

(b)                                 [omitted];

(c)                                  sell,
lease (except as expressly permitted by this Agreement or by any other of the
Loan Documents) or license the Property or grant any other security interest in
any of the property of Borrower other than for Permitted Liens (provided,
however, that in no event may the aggregate amount outstanding under Permitted
Liens exceed Fifty Million Dollars ($50,000,000));

 13
 

(d)                                 make
any change in Borrower’s capital structure which would have a Material Adverse
Effect;

(e)                                  dissolve
or elect to dissolve;

(f)                                    change
the state of its organization; or

(g)                                 change
its legal name without advance notice to Lender.

Transactions permitted by the foregoing provisions of this Section are
only permitted if no Default or Event of Default is continuing or would occur
as a result of such transaction.

8.4                       Litigation
Cooperation.  Should any third-party
suit or proceeding be instituted by or against Lender with respect to the
Property or relating to Borrower, Borrower shall, without expense to Lender,
make available Borrower and its officers, employees and agents and Borrower’s
books and records, to the extent that Lender may deem them reasonably necessary
in order to prosecute or defend any such suit or proceeding.

8.5                       Further
Assurances. Borrower agrees, at its expense, on request by Lender, to
execute all documents and take all actions, as Lender, may deem reasonably
necessary or useful in order to fully consummate the transactions contemplated
by this Agreement.

9.                                      EVENTS
OF DEFAULT AND REMEDIES

9.1                       Events of
Default. The occurrence of any of the following events shall constitute an “Event
of Default” under this Agreement, and Borrower shall give Lender immediate
written notice thereof:

(a)                                  Any
warranty, representation, statement, report or certificate made or delivered to
Lender by Borrower or any of Borrower’s officers, employees or agents, now or
in the future, shall be untrue or misleading and results in a Material Adverse
Effect; or

(b)                                 Borrower
shall fail to pay when due any amounts under the Loans or any interest thereon
or any other monetary Obligation; or

(c)                                  Borrower
shall breach any negative covenant set forth in Section 8.3 above; or

(d)                                 Borrower
shall fail to comply with the financial covenants (if any) set forth in Section
10 or shall fail to perform any other non-monetary Obligation which by its
nature cannot be cured; or

(e)                                  Borrower
shall fail to perform any other non-monetary Obligation, which failure is not
cured within five (5) Business Days after the date due or breaches any other
terms under any of the other Obligations (including under any of the other Loan
Documents) not otherwise mentioned in this definition of Event of Default and
such failure is not cured within thirty (30) days after prior written notice
thereof; or

(f)                                    Any
levy, assessment, attachment, seizure, lien or encumbrance is made on all or
any part of the Property which is not cured within ten (10) days after the
occurrence of the same; or

(g)                                 any
default or event of default occurs under any obligation secured by a Permitted
Lien, which is not cured within any applicable cure period or waived in writing
by the holder of the Permitted Lien; or

(h)                                 any
default or event of default occurs under any unsecured obligation of Borrower
in excess of One Million Dollars ($1,000,000);

 14
 

(i)                                     Borrower
breaches any material contract or obligation, which has or may reasonably be
expected to have a Material Adverse Effect; or

(j)                                     Dissolution,
termination of existence, insolvency or business failure of Borrower; or
appointment of a receiver, trustee or custodian, for all or any part of the
property of, assignment for the benefit of creditors by, or the commencement of
any proceeding by Borrower under any reorganization, bankruptcy, insolvency,
arrangement, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction, now or in the future in effect; or

(k)                                  the
commencement of any proceeding against Borrower under any reorganization,
bankruptcy, insolvency, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, now or in the future in effect,
which is (i) not timely controverted, or (ii) not cured by the dismissal
thereof within thirty (30) days after the date commenced; or

(l)                                     revocation
or termination of, or limitation or denial of liability upon, any guaranty of
the Obligations or any attempt to do any of the foregoing, or commencement of
proceedings by any guarantor of any of the Obligations under any bankruptcy or
insolvency law; or

(m)                               revocation
or termination of, or limitation or denial of liability upon, any pledge of any
certificate of deposit, securities or other property or asset of any kind
pledged by any third party to secure any or all of the Obligations, or any
attempt to do any of the foregoing, or commencement of proceedings by or
against any such third party under any bankruptcy or insolvency law; or

(n)                                 Borrower
makes any payment on account of any indebtedness or obligation which has been
subordinated to the Obligations, other than as permitted in the applicable
subordination agreement, or if any Person who has subordinated such
indebtedness or obligations terminates or in any way limits his subordination
agreement; or

(o)                                 Borrower
shall suffer or experience any Change of Control without Lender’s prior written
consent, which consent shall be in the discretion of Lender in the exercise of
its reasonable business judgment;

(p)                                 Borrower
shall generally not pay its debts as they become due, or Borrower shall
conceal, remove or transfer any part of its property, with intent to hinder,
delay or defraud its creditors, or make or suffer any transfer of any of its
property which may be fraudulent under any bankruptcy, fraudulent conveyance or
similar law; or

(q)                                 Borrower
shall fail to comply with the terms and conditions of any Interest Rate
Agreement with Lender or any other party (including the Interest Rate Swap
Agreement (Long Form Trade Confirmation)) or shall amend, modify, or terminate
any such agreement or waive any rights thereunder; or

(r)                                    Failure
of Borrower to occupy the buildings located at 4275 and 4295 Burton Drive,
Santa Clara, California; or

(s)                                  There
shall be any Material Adverse Effect;

(t)                                    An
“Event of Default” shall occur under that certain Stock Pledge Agreement of
even date herewith by Borrower in favor of Lender; or

(u)                                 A
breach occurs under Section 6.16.1 of the Deed of Trust.

Lender may cease making any advances or extending any credit hereunder
during any of the above-specified cure periods.

 15

9.2                       Remedies.

(a)                                  Upon
the occurrence and during the continuance of any Event of Default, Lender, at
its option, and without notice or demand of any kind (all of which are hereby
expressly waived by Borrower), may do any one or more of the following:

(i)                                     Cease
making additional advances under the Term Loan or otherwise extending credit to
Borrower under this Agreement or any other document or agreement; or

(ii)                                  Accelerate
and declare all or any part of the Obligations to be immediately due, payable
and performable, notwithstanding any deferred or installment payments allowed
by any instrument evidencing or relating to any Obligation; or

(b)                                 All
attorneys’ fees, expenses, costs, liabilities and obligations incurred by
Lender (including attorneys’ fees and expenses incurred in connection with
bankruptcy) with respect to the foregoing shall be due from Borrower to Lender
on demand; or

(c)                                  Exercise
any other remedies available at law or equity

9.3                       Remedies
Cumulative. In addition to the rights and remedies set forth in this
Agreement, Lender shall have all the other rights and remedies accorded a
creditor at law or in equity, and under any other instrument or agreement now
or in the future entered into between Lender and Borrower, and all of such
rights and remedies are cumulative and none is exclusive. Exercise or partial
exercise by Lender of one or more of its rights or remedies shall not be deemed
an election, nor bar Lender from subsequent exercise or partial exercise of any
other rights or remedies. The failure or delay of Lender to exercise any rights
or remedies shall not operate as a  waiver
thereof, but all rights and remedies shall continue in full force and effect
until all of the Obligations (as defined in the Note) have been indefeasibly
paid and performed.

10.                               FINANCIAL
COVENANTS

10.1                Tangible Net
Worth. Borrower will maintain a minimum Tangible Net Worth, calculated
as of the end of each fiscal quarter of Borrower (i.e., the calendar quarters
ending April 30, July 31, October 31, and January 31) of (i) at least Four
Hundred Million Dollars ($400,000,000) for each calendar quarter ending on or
before April 30, 2007, and (ii) for each calendar quarter ending on or after
July 31, 2008, at least the sum of Four Hundred Million Dollars ($400,000,000)
plus, to the extent greater than zero, fifty percent (50%) of any Net Income
incurred in any prior calendar years (commencing with the calendar year ending
April 30, 2007); provided, however, that the required Tangible Net Worth shall
decrease by the amount of Net Profits used to repurchase stock of Borrower (but
such decrease shall not be in excess of an aggregate amount of One Hundred
Million Dollars ($100,000,000)).

10.2                Debt Service
Coverage Ratio. Borrower will maintain a Debt Service Coverage Ratio of
no less than 2.00 to 1.00 for each calendar quarter commencing with the
calendar quarter ending on March 31, 2007. As used in this Section 10.2,
“Debt Service Coverage Ratio” means
the ratio of (a) EBITDA for the previous twelve (12) calendar months over (b)
the sum of (i) Interest Expenses incurred over the previous twelve (12)
calendar months, plus (ii) principal amounts payable hereunder and the current
portion of any other long-term debt of Borrower due over the next twelve (12)
calendar months (under GAAP).

11.                               GENERAL
PROVISIONS

11.1                Application of
Payments. All payments with
respect to the Obligations shall be applied as provided in each [Note].

 16
 

11.2                Charges to
Accounts. Lender may, in its discretion, require that Borrower pay monetary
Obligations in cash to Lender, or charge them to Borrower’s Loan Account, in
which event they will bear interest from the date due to the date paid at the
same rate applicable to the Loan.

11.3                Notices. All
notices to be given under this Agreement shall be in writing and shall be given
either personally or by reputable private delivery service or by regular
first-class mail, facsimile or certified mail return receipt requested. All
notices to Borrower shall be addressed to Borrower at the address shown in the
heading to this Agreement, or at any other address designated in writing by
Borrower to Lender. All notices to Lender shall be addressed to Lender at the
address set forth in the introductory paragraph of this Agreement, to the
attention of the Commercial Banking Division, Manager, Note Department, or at
any other address designated in writing by Lender to Borrower. All notices
shall be deemed to have been given upon delivery in the case of notices
personally delivered, faxed (at time of confirmation of transmission), or at
the expiration of one (1) Business Day following delivery to a private delivery
service, or two (2) Business Days following the deposit thereof in the United
States mail, with postage prepaid.

11.4                Severability.
Should any provision of this Agreement be held by any court of competent
jurisdiction to be void or unenforceable, such defect shall not affect the
remainder of this Agreement, which shall continue in full force and effect.

11.5                Integration. This
Agreement and such other written agreements, documents and instruments as may
be executed in connection herewith are the final, entire and complete agreement
between Borrower and Lender and supersede all prior and contemporaneous
negotiations and oral representations and agreements, all of which are merged and
integrated in this Agreement. There are no oral understandings, representations
or agreements between the parties which are not set forth in this Agreement or
in other written agreements signed by the parties in connection herewith.

11.6                Waivers. The failure
of Lender at any time or times to require Borrower to strictly comply with any
of the provisions of this Agreement or any other present or future agreement
between Borrower and Lender shall not waive or diminish any right of Lender
later to demand and receive strict compliance therewith. Any waiver of any
Default shall not waive or affect any other Default, whether prior or
subsequent, and whether or not similar. None of the provisions of this
Agreement or any other agreement now or in the future executed by Borrower and
delivered to Lender shall be deemed to have been waived by any act or knowledge
of Lender or its agents or employees, but only by a specific written waiver
signed by an authorized officer of Lender and delivered to Borrower. Borrower waives
demand, protest, notice of protest and notice of default or dishonor, notice of
payment and nonpayment, release, compromise, settlement, extension or renewal
of any commercial paper, instrument, account, general intangible (as defined in
the California Uniform Commercial Code), document or guaranty at any time held
by Lender on which Borrower is or may in any way be liable, and notice of any
action taken by Lender, unless expressly required by this Agreement.

11.7                No Liability for
Ordinary Negligence. Neither Lender, nor any of its directors, officers,
employees, agents, attorneys or any other Person affiliated with or
representing Lender shall be liable for any claims, demands, losses or damages,
of any kind whatsoever, made, claimed, incurred or suffered by Borrower or any
other party through the ordinary negligence of Lender, or any of its directors,
officers, employees, agents, attorneys or any other Person affiliated with or
representing Lender, but nothing herein shall relieve Lender from liability for
its own gross negligence or willful misconduct; provided, however, that this
Section 11.7 shall not relieve Lender of any obligation of returning excess
amounts that may have been negligently charged to Borrower under the Term Loan
or the Mortgage Loan.

11.8                Amendment. The
terms and provisions of this Agreement may not be waived or amended, except in
a writing executed by Borrower and a duly authorized officer of Lender.

11.9                Time of Essence. Time
is of the essence in the performance by either party of each and every of their
obligations under this Agreement.

11.10         Attorneys’ Fees, Costs
and Charges. Borrower shall reimburse Lender for all attorneys’ fees
(including attorneys’ fees and expenses incurred pursuant to bankruptcy) and
all filing, recording, search,

 17
 

title insurance, appraisal, audit, and other costs incurred by Lender,
pursuant to, or in connection with, or relating to this Agreement (whether or
not a lawsuit is filed), including, but not limited to, any attorneys’ fees and
costs (including attorneys’ fees and expenses incurred pursuant to Borrower’s
bankruptcy) Lender incurs in order to do the following: prepare and negotiate
this Agreement and the documents relating to this Agreement, obtain legal
advice in connection with this Agreement or Borrower; enforce, or seek to
enforce, any of its rights; commence, intervene in, or defend any action or
proceeding; initiate any complaint to be relieved of the automatic stay in
bankruptcy; file or prosecute any probate claim, bankruptcy claim, third-party
claim, or other claim; examine, audit, copy, and inspect or audit any of
Borrower’s books and records; protect, obtain possession of, lease, dispose of,
or otherwise enforce Lender’s security interest in the Property; and otherwise
represent Lender in any litigation relating to Borrower. If either Lender or
Borrower files any lawsuit against the other predicated on a breach of this
Agreement, the prevailing party in such action shall be entitled to recover its
costs and attorneys’ fees (including attorneys’ fees and expenses incurred
pursuant to bankruptcy), including (but not limited to) attorneys’ fees and
costs incurred in the enforcement of, execution upon or defense of any order,
decree, award or judgment. Borrower shall also pay Lender’s standard charges
for returned checks and for wire transfers, in effect from time to time. All
attorney’s fees, costs and charges (including attorneys’ fees and expenses
incurred pursuant to bankruptcy) and other fees, costs and charges to which
Lender may be entitled pursuant to this Agreement may be charged by Lender to
Borrower’s Loan Account and shall thereafter bear interest at the same rate as
the Mortgage Loan.

11.11                          Benefit
of Agreement. The provisions of this Agreement shall be binding upon and
inure to the benefit of the respective successors, assigns, heirs,
beneficiaries and representatives of Borrower and Lender; provided, however,
that Borrower may not assign or transfer any of its rights under this
Agreement, except as permitted pursuant to the terms and conditions of the Deed
of Trust, without the prior written consent of Lender, and any prohibited
assignment shall be void. No consent by Lender to any assignment shall release
Borrower from its liability for the Obligations. Lender may assign its rights
and delegate its duties hereunder without the consent of Borrower. Lender
reserves the right to syndicate all or a portion of the transaction created
herein or sell, assign, transfer, negotiate, or grant participations in all or
any part of, or any interest in Lender’s rights and benefits hereunder. In
connection with any such syndication, assignment or participation, Lender may
disclose all documents and information which Lender now or hereafter may have
relating to Borrower or Borrower’s business. To the extent that Lender assigns
its rights and obligations hereunder to a third Person, Lender thereafter shall
be released from such assigned obligations to Borrower.

11.12                          Publicity.
Lender is hereby authorized, at its expense and in its sole discretion, to
issue appropriate press releases and to cause a tombstone to be published
announcing the consummation of this transaction and the aggregate amount
thereof.

11.13                          Governing
Law; Jurisdiction; Venue. This Agreement and all acts and transactions
hereunder and all rights and obligations of Lender and Borrower shall be
governed by the internal laws of the State of California, without regard to its
conflicts of law principles. As a material part of the consideration to Lender
to enter into this Agreement, Borrower (a) agrees that all actions and
proceedings relating directly or indirectly to this Agreement shall, at Lender’s
option, be litigated in courts located within California, and that the
exclusive venue therefor shall be in the City and County of San Francisco; (b)
consents to the jurisdiction and venue of any such court and consents to
service of process in any such action or proceeding by personal delivery or any
other method permitted by law; and (c) waives any and all rights Borrower may
have to object to the jurisdiction of any such court, or to transfer or change
the venue of any such action or proceeding.

11.14                          Mutual
Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER AND
LENDER EACH HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING
BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO, THIS AGREEMENT OR ANY
OTHER PRESENT OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN LENDER AND BORROWER, OR
ANY CONDUCT, ACTS OR OMISSIONS OF LENDER OR BORROWER OR ANY OF THEIR DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH
LENDER OR BORROWER, IN ALL OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT
OR TORT OR OTHERWISE. NOTWITHSTANDING THE FOREGOING, ANY CONTROVERSY HEREUNDER
SHALL BE GOVERNED BY THE TERMS AND CONDITIONS OF THAT

 18
 

CERTAIN ALTERNATIVE DISPUTE RESOLUTION AGREEMENT, DATED AS OF THE DATE
HEREOF, BY AND AMONG BORROWER AND LENDER.

 19

IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the date set forth in the
heading to this Agreement.

	
  BORROWER:

  	
   

  	
   

  
	
   

  	
   

  	
  OMNIVISION TECHNOLOGIES,INC.,

  
	
   

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ James He

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  James He

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  COO

  	
   

  

 

	
  

  
	
  LENDER: 

  
	
   

  
	
  CITIBANK, N.A., a national banking association

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Ada Lei Man Wong

  	
   

  
	
  Name:

  	
  Ada Lei Man Wong

  	
   

  
	
  Title:

  	
  VICE PRESIDENT 

  	
   

  
					

 

EXHIBIT A

LOAN
BORROWING CERTIFICATE

The
undersigned hereby certifies as follows:

I, ____________________________,
am the duly elected and acting ________________________ of OMNIVISION
TECHNOLOGIES, INC (“Borrower”).

This
Loan Borrowing Certificate is delivered pursuant to Section 3.1 f that certain
Loan and Security Agreement (the “Loan
Agreement”) dated as of March      , 2007
by and between Borrower and CITIBANK, N.A., a national banking association (“Lender”). The terms used in this Loan
Borrowing Certificate which are defined in the Loan Agreement have the same
meaning herein as ascribed to them therein.

Borrower hereby requests an additional Advance of the
Term Loan as follows:

(a)       The
date on which the Term Loan is to be made is_____________ 20 _____.

(b)       The amount of the Term Loan is to be ___________________
Dollars ($ ____________________).

All
representations and warranties of Borrower set forth in the Loan Agreement are
true, correct and complete in all material respects as of the date of this
request for an advance of the Term Loan Loan; provided, however, that those
representations and warranties expressly referring to another date shall be
true, correct and complete in all material respects as of such date. No Default
or Event of Default exists

IN
WITNESS WHEREOF, this Loan Borrowing Certificate is executed by the undersigned
as of this            
day of ____________________, 20______ .

	
  

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							

 

EXHIBIT B

Quarterly Covenant
Compliance Certificate

Borrower: OMNIVISION
TECHNOLOGIES, INC.,

	
  

  	
   

  	
  As of:

  	
   

  	
   

  
	
  Date

  
	
   

  
	
   

  
	
   

  

Financial
Reporting to be delivered within 45 days of the end of each fiscal quarter of
Borrower

(i.e., the calendar quarters ending April 30, July 31, October 31, and January
31):

	
  

  	
   

  	
  1)   Quarterly Form 10Q Report of
  Borrower (and its subsidiaries on a consolidated basis);

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  In Compliance 

  
	
   

  	
   

  	
   

  	
  (Yes/No)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2)   Quarterly company-prepared
  consolidating balance sheet and consolidating income statement showing key
  entities of the Borrower (as a minimum, needs to show OmniVision
  International Holdings Ltd. and OmniVision Technologies (Hong Kong) Company
  Limited).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  In Compliance 

  
	
   

  	
   

  	
   

  	
  (Yes/No)

  
	
   

  	
   

  	
   

  

Financial
Covenants: (Measured Quarterly—calculated as of the end of
each fiscal quarter of Borrower

(i.e., the calendar quarters ending April 30, July 31, October 31, and January
31))

1)   Tangible Net Worth of (i) at least
Four Hundred Million Dollars ($400,000,000) for each fiscal quarter ending on
or before April 30, 2007, and (ii) for each fiscal quarter ending on or after
July 31, 2008, at least the sum of Four Hundred Million Dollars ($400,000,000)
plus, to the extent greater than zero, fifty percent (50%) of any Net Income
incurred in any prior fiscal years (commencing with the fiscal year ending
April 30, 2007); provided, however, that the required Tangible Net Worth shall
decrease by the amount of Net Profits used to repurchase stock of

The undersigned certifies
that the foregoing (including any attachments) is true, complete and correct,
and that the information reflected in this Compliance certificate complies with
the provisions set forth in the Loan and Security Agreement between Borrower
and Citibank N.A., dated March      , 2007 (the “Loan
Agreement”). The undersigned further certifies that, as of the date hereof, no
Default or Event of Default (each as defined in the Loan Agreement) has
occurred.

	
  

  	
   

  	
  OMNIVISION TECHNOLOGIES, INC.,

  
	
   

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	 

	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  	
   

  
								

 

EXHIBIT C

Annual Covenant
Compliance Certificate

Borrower:                  OMNIVISION
TECHNOLOGIES, INC.,

	
  

  	
   

  	
  As of:

  	
   

  	
   

  
	
   

  
	
  Date

  
	
   

  
	
   

  
	
   

  

Financial Reporting to be
delivered within 90 days of the end of fiscal year end Borrower

(i.e., the fiscal
year ending April 30):

	
  

  	
  1)

  	
  Annual Form 10K Report of Borrower (and its
  subsidiaries on a consolidated basis),

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  In Compliance 

  
	
   

  	
   

  	
   

  	
  (Yes/No)

  
	
   

  	
  2)          (Annual
  company-prepared consolidating balance sheet and consolidating income
  statement showing

  
	
   

  	
  key entities of the Borrower (as a minimum, needs to
  show OmniVision International Holdings Ltd. and OmniVision

  
	
   

  	
  Technologies (Hong Kong) Company Limited

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  In Compliance 

  
	
   

  	
   

  	
   

  	
  (Yes/No)

  
					

Financial Covenants:
(Measured Quarterly—calculated as of the end of each fiscal quarter of Borrower

(i.e., the fiscal quarters ending April 30, July 31, October 31, and January
31))

1) Tangible Net Worth of (i) at least Four Hundred
Million Dollars ($400,000,000) for each fiscal quarter ending on or before
April 30, 2007, and (ii) for each fiscal quarter ending on or after July 31,
2008, at least the sum of Four Hundred Million Dollars ($400,000,000) plus, to
the extent greater than zero, fifty percent (50%) of any Net Income incurred in
any prior fiscal years (commencing with the fiscal year ending April 30, 2007);
provided, however, that the required Tangible Net Worth shall decrease by the
amount of Net Profits used to repurchase stock of Borrower (but such decrease
shall not be in excess of an aggregate amount of One Hundred Million Dollars
($100,000,000)).

2) Minimum Debt Service Coverage Ratio of 2.0:1.0                                                  

The undersigned certifies
that the foregoing (including any attachments) is true, complete and correct,
and that the information reflected in this Compliance certificate complies with
the provisions set forth in the Loan and Security Agreement between Borrower
and Citibank N.A., dated March       , 2007 (the “Loan
Agreement”). The undersigned further certifies that, as of the date hereof, no
Default or Event of Default (each as defined in the Loan Agreement) has
occurred.

	
  

  	
   

  	
  OMNIVISION TECHNOLOGIES, INC.,

  
	
   

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  	 

	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:Exhibit 10.19

	
   

  	
  CONFORMED
  COPY: This document has not been compared with the
  original. SANTA CLARA COUNTY RECORDER

  

RECORDING REQUESTED BY, 

AND WHEN RECORDED, MAIL TO:

	
  Pitcher, Nichols
  & Meeks

  	
   

  
	
  1925 Century
  Park East, Suite 1700

  	
   

  
	
  LOS Angeles, California 90087

  	
   

  
	
  Attention: David
  L. Packer, Esq.

  	
   

  
	
   

  	
   

  
	
   

  	
  (SPACE ABOVE THIS LINE
  FOR RECORDER’S USE ONLY)

  

DEED
OF TRUST,

ASSIGNMENT OF RENTS AND LEASES, SECURITY AGREEMENT

AND FIXTURE FILING

THIS
DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES, SECURITY AGREEMENT AND FIXTURE
FILING (the “Deed of Trust”) is
made as of March 20, 2007 by OMNIVISION TECHNOLOGIES, INC., a Delaware
corporation (“Trustor”), as
trustor, to FIRST AMERICAN TITLE INSURANCE COMPANY (“Trustee”), as trustee, for the benefit of CITIBANK, N.A., a national
banking association (“Beneficiary”),
as beneficiary.

1.                          DEFINITIONS. Certain terms used in this
Deed of Trust are defined below; and certain other terms used in this Deed of
Trust are defined elsewhere in this Deed of Trust. Except as otherwise indicated;
terms defined in the Notes shall have the same meaning when used in this Deed
of Trust or other Loan Documents; and terms defined in the Loan Documents other
than this Deed of Trust shall have the same meaning when used herein or in the
Notes.

“Event of Default” shall have the meaning
provided in the Loan Agreement.

“GAAP” means generally accepted accounting
principles as in effect from time to time in the United States, consistently
applied.

“Good Faith” is used in this Deed of Trust
and the Loan Documents in the manner defined in the Section 1201(19) of the
Uniform Commercial Code.

“Interest Rate Agreement” shall mean any
interest rate swap, cap or collar agreement or other similar agreement or
arrangement designed to hedge the position with respect to interest rates,
including the “Interest Rate Swap Agreement (Long Form Trade Confirmation)” (as
defined in the Loan Agreement) and any confirmation of any of such documents.

“Loan Agreement” means that certain Loan
Agreement of even date herewith between Trustor, as borrower, and Beneficiary,
as Lender

“Loan Documents” means the Notes, the Loan
Agreement, this Deed of Trust and any other agreement, instrument, or document
executed in connection with the Loan Agreement, this Deed of Trust or the
Notes.

 1
 

“Notes”
means, collectively, (i) that certain promissory note evidencing the loan in
the original principal amount of up to $27,927,045.00, payable by Trustor to
Beneficiary or its order (the “Secured Term
Loan”) and any amendments, modifications or supplements thereto or
renewals or replacements thereof (including any new notes upon a split of a
prior note or notes), and (ii) that certain promissory note evidencing the
additional advances in the maximum aggregate principal amount of up to
$12,000,000.00, payable by Trustor to Beneficiary or its order (the “Additional Term Loan”) and any amendments,
modifications or supplements thereto or renewals or replacements thereof
(including any new notes upon a split of a prior note or notes) (the Secured
Term Loan and the Additional Term Loan are herein collectively referred to as
the “Loan”).

“Person” means any individual, sole
proprietorship, general partnership, limited partnership, limited liability
partnership, limited liability company, joint venture, trust, unincorporated
organization, association, corporation, government, or any agency or political
division thereof, or any other entity.

“Personal Property” means all “Accounts”, “Cash
proceeds”, “Chattel paper”, “Collateral”, “Commercial tort claims”, “Deposit
accounts”, “Documents”, “Electronic chattel paper”, “Equipment”, “Fixtures”, “General
intangibles”, “Goods”, “Instruments”, “Inventory”, “Investment property”, “Letter-of-credit
rights”, “Noncash proceeds”, “Payment intangibles”, “Proceeds”, “Software”, “Supporting
Obligations”, and “Tangible chattel paper”, as defined in the Uniform
Commercial Code (as such Uniform Commercial Code may be amended from time to
time) in which Trustor has any interest, whether currently owned or hereafter
acquired, relating to, generated from, arising out of or incidental to the
ownership, development, use or operation of the Real Property (whether or not
subsequently removed from the Real Property (other than that portion of the
Property consisting of the Real Property), including, without limitation, all

(i) machinery and tools;
(ii) rugs, carpets and other floor coverings; (iii) draperies and drapery rods
and brackets, awnings, window shades, Venetian blinds and curtains; (iv) lamps,
chandeliers and other lighting fixtures; (v) office maintenance and other
supplies; (vi) apparatus, appliances, furniture and furnishings, building
service equipment, and building materials, supplies and equipment; (vii)
rights, royalties, rents, security deposits, advance rentals, revenues, profits
and benefits; (viii) leases, lease guarantees, contracts, contract rights,
licenses, permits and certificates; (ix) deposits, funds, money and deposit
accounts (including any accounts, including reserve accounts, established under
any of the Loan Documents); (x) tenements, hereditaments and appurtenances;
(xi) approvals and parcel maps (whether tentative or final), building permits
and certificates of occupancy; (xii) names under or by which the Property or
any of the Improvements may at any time be operated or known and rights to
carry on business under any such names or any variant thereof; (xiii)
trademarks and good will; (xiv) management agreements, service contracts,
supply contracts or other contracts or agreements; (xv) warranties; (xvi) water
stock; (xvii) shares of stock or other evidence of ownership of any part of the
Property or Improvements that is owned by Trustor in common with others, and
all documents of membership in any owners’ or members’ association or similar
group having responsibility for managing, maintaining or operating any part of
the Property or Improvements; (xviii) plans and specifications prepared for
construction of improvements on the Property, or any part thereof, and studies,
data and drawings related thereto, including, without limitation, studies, data
or reports relating to toxic or hazardous wastes or materials located on the
Property and/or Improvements, and contracts and agreements of Trustor relating
to the aforesaid plans and specifications or to the aforesaid studies, data,
reports and drawings or to the construction of improvements on the Property;
(xix) sales agreements, deposit receipts, escrow agreements and other ancillary
documents and agreements entered into respecting the sale to any purchasers of
any part of the Property, and/or Improvements, together with all deposits and
other proceeds of the sale thereof; (xx) damages, royalties and revenue of
every kind, nature and description whatsoever that Trustor may be entitled to
receive from any person or entity owning or having or hereafter acquiring a
right to the oil, gas or mineral rights and reservations of the Property; (xxi)
deposits made with or other security given to utility companies by Trustor with
respect to the Property and/or Improvements; (xxii) advance payments of
insurance premiums made by Trustor with respect to, and all claims or demands
with respect to, insurance; (xxiii) negotiable certificates of deposit of
Trustor in Beneficiary’s possession and all accounts of Trustor maintained with
Beneficiary and each deposit account of Trustor assigned to Beneficiary
pursuant to any agreement;

 2
 

(xxiv) insurance proceeds (including insurance
proceeds for insurance not required under the terms of this Deed of Trust);
(xxv) condemnation awards; (xxvi) causes of action, claims, compensation,
awards and recoveries for any damage or injury to the Property and/or
Improvements or for any loss or diminution in value of the Property and/or
Improvements; (xxvii) books and records relating to the Property, including,
without limitation, all computer records, computer tapes and electronic and
electromagnetic representations and reproductions thereof; (xxviii) guaranties
of and security for any of the foregoing; (xxix) all substitutions, renewals,
improvements, attachments, accessions, additions and replacements to any of the
foregoing; and all “Proceeds” (as such term is defined in the Uniform
Commercial Code), collections, insurance proceeds and products of any of the
property listed in (i) through (xxix) above, including without limitation,
proceeds of any voluntary or involuntary disposition or claim respecting any
part thereof (pursuant to judgment, condemnation award or otherwise) and all
documents, instruments, general intangibles, goods, equipment, inventory, chattel
paper, monies, accounts, deposit accounts and other personal property that may
arise from the sale or disposition of any of the foregoing, all guaranties of
and security for any of the foregoing, and all books and records, including,
without limitation, all computer records, computer tapes and electronic and
electromagnetic representations and reproductions thereof, relating to any of
the foregoing.

“Property” means the real property
described in Exhibit “A”, attached hereto and incorporated herein by reference,
together with all buildings and other improvements (“Improvements”) now or hereafter located thereon, and any and
all right, title or interest of Trustor in any other real property or
improvements comprised in such real property, which right, title or interest is
acquired after the date of this Deed of Trust (such real property, buildings,
improvements and after-acquired interest being hereinafter collectively
referred to as the “Real Property”);
the Personal Property; all easements and other rights now or hereafter made
appurtenant to the Real Property; all additions and accretions to the Real
Property; all fixtures, machinery, equipment, and appliances at any time
attached to, or located in or on the Real Property in which Trustor has an interest;
all rights in or to existing or future streets or public places; all existing
and future minerals, oil, gas and other hydrocarbon substances upon, under or
through the Real Property; all water and water rights, pumps and pumping
plants, and existing and future water stock relating thereto; all existing and
future shares of stock or other evidence of ownership of any part of the
foregoing property and all intangible property and rights relating to the
foregoing property, or the operation thereof or used in connection therewith,
including all options, sales contracts and rights of first refusal of any
nature whatsoever, covering all or any portion of such property, together with
any deposits or other payments made in connection therewith, existing and future
development rights, permits and approvals, air rights and other similar land
use permits, approvals or entitlements; and all proceeds of any of the
foregoing. Any reference in this Deed of Trust to the “Property” shall mean the
Property described in this Section, any part thereof, or any interest therein.

“Taxes and Assessments” means all taxes,
assessments, levies and charges imposed by any public or quasi-public authority
having jurisdiction over the Property which are or may affect, or become a lien
upon, the Property, or the rents, royalties, profits and income of the
Property, or interest therein, or imposed by any public or quasi-public
authority upon Trustor, Trustee or Beneficiary by reason of their respective
interests in the Property or by reason of any payment, or portion thereof, made
to Beneficiary hereunder or pursuant to any obligation secured by this Deed of
Trust or any of the other Loan Documents, other than taxes which are measured
by and imposed upon Beneficiary’s general net income.

“Transfer” means the sale, transfer,
hypothecation, encumbrance, mortgage, conveyance, lease (other than leases
permitted pursuant to the terms and conditions of this Deed of Trust, the Loan
Agreement and any other Loan Document), alienation, assignment, disposition,
divestment, or leasing with option to purchase, or assignment of the Property,
or any portion thereof or interest therein (whether direct or indirect, legal
or equitable, including the issuance, sale, assignment, alienation, conveyance,
divestment, transfer, disposition, hypothecation, mortgage or encumbrance of
any ownership interest in Trustor; or, if any Additional Essential Party is an
entity, the issuance, sale, assignment, alienation, conveyance, divestment,
transfer, disposition, hypothecation, mortgage or encumbrance of any ownership
interest in the Additional Essential Party (whether direct or indirect, legal
or equitable); or entering into any agreement or contract to do any of the
foregoing which is not conditioned on compliance with the terms of the Loan
Documents with respect to Transfers, or undertaking, suffering or causing any
of the foregoing to occur voluntarily, involuntarily or by operation of law.

 3
 

“Uniform
Commercial Code” means the Uniform Commercial Code as enacted
in the State of California.

2.                          GRANT IN TRUST. Trustor does hereby
irrevocably and unconditionally grant and assign the Property to Trustee, in
trust, with power of sale and right of entry and possession, for the benefit of
Beneficiary, for the purposes and upon the terms and conditions hereinafter set
forth.

3.                          ASSIGNMENT OF RENTS. Trustor absolutely,
unconditionally and irrevocably assigns to Beneficiary the rents, royalties,
issues, profits, security deposits and income of the Property for the purposes
and upon the terms and conditions hereinafter set forth (including the license
granted in Section 6.10.1 hereof). The foregoing assignment shall not
impose upon Beneficiary any duty to produce rents from the Property, and such
assignment shall not cause Beneficiary to be a “mortgagee in possession” for
any purpose. This assignment is an absolute and present assignment from Trustor
to Beneficiary and not merely the passing of a security interest, subject only
to the provisions hereinafter contained pertaining to Trustor’s right to
collect the rents, issues and profits of the Property.

4.                          OBLIGATIONS SECURED. 
Trustor makes the foregoing grant and assignment for the
purpose of securing the following in such order of priority as Beneficiary may
determine (the “Obligations”):

4.1                     Payment of
Loan.  Payment to Beneficiary of all
indebtedness evidenced by or arising under the Notes or the Loan Agreement,
together with interest thereon, including sums added to the principal balance
of the Notes in accordance with the terms thereof, and all prepayment, late
charges or other charges or fees payable thereunder, and any and all
modifications, extensions, renewals or substitutions thereof whether or not
evidenced by a new or additional promissory note or notes;

4.2                     Payment of Further Loans.  Payment of such further
indebtedness with interest thereon, and performance of and compliance with such
further obligations as the then record owner of the Property may undertake to
pay, perform or comply with for the benefit of Beneficiary, its successors or
assigns, when such borrowing or obligation is consented to in writing by
Trustor evidenced by a note or by any writing reciting that it or they are so
secured;

4.3                     Performance Under Loan Documents. Performance
of and compliance with each agreement, undertaking, obligation, warranty or
representation of Trustor or any other person contained in any Loan Document,
or incorporated therein by reference, or in any and all documents, leases or
instruments assigned to Beneficiary or executed in Beneficiary’s favor and
delivered thereunder, and payment of all sums, fees, costs and expenses as
therein set forth or which may otherwise be advanced by or due to Trustee or
Beneficiary under any provision of any Loan Document, with interest thereon at
the rate provided therein. However, if any document now or hereafter executed
by Trustor and Beneficiary contains any obligation, covenant, representation or
warranty of Trustor that by its express terms, or by the express terms of such
document, is not intended to be secured by this Deed of Trust, then such
obligation, covenant, representation or warranty shall not be secured by this
Deed of Trust or any other Loan Document (but only to the extent necessary,
with respect to temporal applicability, scope or otherwise, to render the same
unsecured), and to the extent (if any) that such unsecured obligation,
covenant, representation or warranty may be repeated in any provision of this
Deed of Trust or any other Loan Document, it shall be deemed stricken and
excluded from this Deed of Trust and such Loan Document (but only to the extent
necessary, with respect to temporal applicability, scope or otherwise, to
render the same unsecured) from and after the date on which such unsecured
obligation, covenant, representation or warranty arises and becomes effective
under terms of the document in which it is contained.

4.4                     Performance Under Interest Rate Agreements Payment
and performance of all duties and obligations of Trustor owing to “Party A”
under and pursuant to that Interest Rate Swap Transaction Confirmation dated on
or about the date hereof (the “Confirmation Letter”), in which Trustor is
described as Counterparty or “Party B” any amendments or modifications thereto
or any replacements thereof, relative to a “Swap Transaction” or “Transaction”
(as defined in the Confirmation Letter), and compliance with each agreement,
undertaking, obligation, warranty or representation of Trustor contained in

 4
 

any Interest Rate Agreements in favor of Beneficiary or its affiliates.

5.                          SECURITY AGREEMENT AND FIXTURE FILING.

5.1                     Grant of Security Interest.  Trustor hereby grants to
Beneficiary a security interest in the Personal Property to secure all of the
Obligations and all other obligations of Trustor to Beneficiary under any other
Loan Documents. This Deed of Trust constitutes a security agreement with
respect to all personal property in which Beneficiary is granted a security
interest hereunder, and Beneficiary shall have all of the rights and remedies
of a secured party under the Uniform Commercial Code as well as all other
rights and remedies available at law or in equity.

5.2                     Perfection. Trustor will execute,
acknowledge, deliver and cause to be recorded or filed, in the manner and place
required by any present or future law, any instrument that may be requested by
Beneficiary to publish notice or protect, perfect, preserve, continue, extend,
or maintain the security interest and lien, and the priority thereof, of this
Deed of Trust or the interest of Beneficiary in the Property, including,
without limitation, deeds of trust, security agreements, financing statements,
continuation statements, and instruments of similar character, and Trustor
shall pay or cause to be paid (i) all filing and recording taxes and fees
incident to each such filing or recording, (ii) all expenses, including without
limitation, actual attorneys’ fees and costs, incurred by Beneficiary in
connection with the preparation, execution, and acknowledgement of all such
instruments, and (iii) all federal, state, county and municipal stamp taxes and
other taxes, duties, imposts, assessments, and charges arising out of or in
connection with the execution and delivery of such instruments.  Trustor hereby irrevocably constitutes and
appoints Beneficiary as the attorney-in-fact of Trustor, to execute, deliver
and, if appropriate, file with the appropriate filing officer or office any
such instruments if Trustor should fail to do so within five (5) days of
written demand by Beneficiary. In addition, Trustor hereby authorizes
Beneficiary to cause any financing statement or fixture filing to be filed or
recorded without the necessity of any signature of Trustor on such financing
statement or fixture filing.

5.3                     Remedies. Upon the occurrence of any Event
of Default, Beneficiary shall have the right to cause any of the Property that
is Personal Property and subject to the security interest of Beneficiary
hereunder to be sold at any one or more public or private sales as permitted by
applicable law, and Beneficiary shall further have all other rights and
remedies, whether at law, in equity, or by statute, as are available to secured
creditors under applicable law, specifically including, without limitation, the
right to proceed as to both the real property and the personal property
contained within the Property as permitted by Uniform Commercial Code Section
9604(a)(1). Any such disposition may be conducted by an employee or agent of
Beneficiary or Trustee.  Any person,
including both Trustee and Beneficiary, shall be eligible to purchase any part
or all of such property at any such disposition.

5.4                     Expenses. Expenses of retaking, holding,
preparing for sale, selling or the like shall be borne by Trustor and shall
include, without limitation, Beneficiary’s and Trustee’s actual attorneys’ fees
and legal expenses. Trustor, upon demand of Beneficiary, shall assemble the
Personal Property and make it available to Beneficiary at such place as shall
be required by Beneficiary in its sole discretion. Beneficiary shall give
Trustor at least five (5) days’ prior written notice of the time and place of
any public sale or other disposition of such personal property or of the time
of or after which any private sale or any other intended disposition is to be
made, and if such notice is sent to Trustor, at the same address as is provided
for the mailing of notices herein, it is hereby deemed that such notice shall
be and is reasonable notice to Trustor.

5.5                     Place of Business. 
Trustor maintains a place of business, as set forth as the
address of Trustor provided on the Addendum hereto, and Trustor will
immediately notify Beneficiary in writing of any change in its place of
business.

5.6                     Fixtures. This Deed of Trust is also to be
recorded as a “fixture filing” as defined in Uniform Commercial Code Section
9102(a)(40) and covers goods that are or are to become fixtures.

6.                          COVENANTS.

6.1                     Performance of Obligations.   Trustor shall promptly pay when
due all sums

 5
 

secured hereby, together with any interest thereon,
and shall perform and comply with in a timely manner all other obligations
secured by this Deed of Trust. All sums payable by Trustor hereunder shall be
paid without notice, demand, protest, setoff, deduction, defense, abatement or
deferment and all obligations and liabilities of Trustor hereunder shall not be
released, discharged or otherwise affected by reason of any act, claim or
circumstance of any kind or nature, whether or not Trustor has notice or
knowledge thereof.

6.2                     Title.      Trustor warrants and
represents that (a) Trustor lawfully holds and possesses the Property and has
the right to encumber the same; (b) the persons executing this Deed of Trust on
behalf of Trustor have the full right, power and authority so to do on behalf
of Trustor; (c) this Deed of Trust, as so executed and delivered, is a valid
and fully binding obligation of Trustor, enforceable in accordance with its
terms; and (d) Trustor, its authorized employees, agents and representatives,
have all reviewed, approved, and been fully advised with respect to this Deed
of Trust, the loan transaction evidenced by the Notes, and any other document
or instrument executed and delivered in connection therewith or as security
therefor.

6.3                     Taxes and Assessments.

6.3.1            Trustor’s Obligation for Payment of Taxes and
Assessments.  Trustor shall
pay or cause to be paid all Taxes and Assessments prior to delinquency. Trustor
shall deliver promptly to Beneficiary receipts or other reasonable evidence
evidencing such payment (and such evidence shall be furnished by no later than
the date that Taxes and Assessments would otherwise be delinquent), except to
the extent Beneficiary makes payments with deposits under Section 6.5.  Trustor shall not suffer, permit, initiate,
or otherwise cause for any tax purpose, the joint assessment of the real property
described in Exhibit “A” hereto and any personal property located thereon, or
any other procedure whereby the lien of real property taxes and assessments and
the lien of personal property taxes shall be assessed, levied or charged
against such real property as a single lien. 
While any obligation or indebtedness secured by any Loan Document or the
lien of this Deed of Trust remains outstanding on the Property, the Property
shall be segregated on the applicable tax rolls from all other property, both
real and personal.

6.3.2            Effect of Change in Law. If at any time any
law is enacted which deducts from the value of real property, for taxation
purposes, any lien thereon, or changes in any way the laws now in force for the
taxation of deeds of trust or debts secured thereby, or the manner of
collection of any such taxes so as to affect any interest of Beneficiary under
this Deed of Trust then Trustor shall pay such tax if it may lawfully do so. If
Trustor is not permitted by applicable law to pay such tax, or if such payment
would violate any applicable law, then the whole of the principal sum secured
by this Deed of Trust, together with accrued interest thereon, at the option of
Beneficiary, without demand or notice, shall immediately become due and payable.

6.4                     Insurance. For so long as this Deed of
Trust or the Notes is in effect, Trustor shall continuously maintain insurance
in accordance with the following provisions:

6.4.1            Required Coverage. Trustor shall maintain
or cause to be maintained insurance in such amounts and insuring against such
risks as shall be required by Beneficiary from time to time, including the
following:

A.                     All Risk. All risk coverage insurance,
including loss or damage by fire, lightning, windstorm, hail, explosion, riot
attending a strike, civil commotions, aircraft, vehicles, smoke and other risks
from time to time included under “all risks coverage” policies in an amount
equal to one hundred percent (100%) of the full replacement value of all
improvements on the Property, with co-insurance clause, if any, only as
acceptable to Beneficiary;

BENEFICIARY HAS AND HEREBY DISCLOSES TO TRUSTOR IN
WRITING THAT UNDER SECTION 2955.5 OF THE CALIFORNIA CIVIL CODE:

“NO LENDER SHALL REQUIRE A BORROWER, AS A CONDITION OF
RECEIVING OR MAINTAINING A LOAN SECURED BY REAL PROPERTY, TO PROVIDE HAZARD
INSURANCE COVERAGE AGAINST RISKS TO THE IMPROVEMENTS ON THAT

 6
 

REAL PROPERTY IN AN AMOUNT EXCEEDING THE REPLACEMENT
VALUE OF THE IMPROVEMENTS ON THE PROPERTY.”

B.                        Liability. Commercial general liability
insurance with respect to the Property providing for limits of liability of not
less than $10,000,000 for both injury to or death of a person and for
property damage per occurrence, $10,000,000 in the aggregate, and (b)
other liability insurance as reasonably required by Beneficiary.

C.                        Flood. Flood insurance in amount equal to
the lesser of (1) the amount required for one hundred percent (100%) of the
full replacement value of all improvements, with co-insurance clause if any,
only as acceptable to Beneficiary, or (2) the maximum limit of coverage
available with respect to the Property under the National Flood Insurance
Program; provided
that such flood insurance shall not be required if Trustor shall provide
Beneficiary with evidence satisfactory to Beneficiary that the Property is not
situated within an area identified by the Federal Emergency Management Agency (“FEMA”)
(or any other appropriate governmental department, agency, bureau, board, or
instrumentality) as a  “special
flood hazard area”, and that no flood insurance is required on the Property by
any regulations under which the Beneficiary is governed;

D.                       Omitted;

E.                         Mandatory
Insurance. Workers’ compensation and all other insurance, if any, of
whatsoever description and in such amounts as may be required by any ordinance,
law or governmental regulation to be carried or maintained by Trustor or the
owner of all or any part of the Property in connection with Trustor’s operation
of the same or the use of the same by Trustor or any other person, partnership,
corporation or entity, or in connection with the construction, demolition,
maintenance or repair of the Property or any part thereof; and

F.                         Other Insurance Coverages. Such increased
amounts and additional insurance, and in such amounts, as may from time to time
be required by Beneficiary including boiler and machinery insurance,
earthquake, terrorism and leasehold interest income insurance; provided,
however, that earthquake and terrorism insurance shall not be required unless
either (i) such insurance is required by any governmental entities or
regulators of Beneficiary, or (ii) such insurance is being required by other
institutional lenders for comparable properties in the same general vicinity.

6.4.2            General Requirements. The policies of
insurance to be maintained by Trustor under the provisions of this Deed of
Trust shall be issued by responsible insurance carriers with a Best’s rating of
no less than A/VII, licensed to do business in the State of California, who are
acceptable to Beneficiary and shall be in such form and with such endorsements
(including a mortgagee clause in favor of Beneficiary), waivers and deductibles
(in no event to exceed $250,000) as Beneficiary shall designate or approve.
Without limitation on the foregoing:

A.                      Named Insureds. All policies shall name
Trustor as the insured, and (with the exception of policies for workmen’s
compensation insurance) shall name Beneficiary as mortgagee and as an
additional insured (under, if required in writing by Beneficiary, a standard
non-contributing mortgagee protection clause, in form satisfactory to
Beneficiary, attached to such policy or policies whenever applicable, and
providing, among other matters, that all insurance proceeds shall be paid to
Beneficiary).

B.                        Required Provisions. All policies shall
contain: (1) the agreement of the insurer to give Beneficiary at least 30 days’
notice prior to cancellation or expiration of or change in such policies, or
any of them; (2) a waiver of subrogation rights against Beneficiary and, if
available Trustor; (3) an agreement that such policies are primary and, if
required in writing by Beneficiary, non-contributing with any insurance that
may be carried by Beneficiary; (4) a statement that the insurance shall not be
invalidated should any insured waive in writing prior to a loss any or all
right of recovery against any party for loss accruing to the property described
in the insurance policy; and (5) if obtainable, a provision that no act or
omission of Trustor shall affect or limit the obligation of the insurance
carrier to pay the amount of any loss sustained. As of the date hereof, and
subject to any changes in such requirements which Beneficiary may, in its
discretion, make from

 7
 

time to time pursuant to its rights under this Section
6.4, each policy of property insurance hereunder shall contain a lender’s
Loss Payable endorsement (Form 438 B.F.U.), Mortgagee Clause (Form 127B), or
other non-contributory mortgagee clause of similar form and substance
acceptable to Beneficiary in favor of Beneficiary as a first mortgagee.

6.4.3            Delivery of Policies and Renewals. Concurrently
herewith, Trustor shall deliver to Beneficiary original policies or
certificates with premiums prepaid evidencing the insurance required hereunder.
Trustor shall procure and pay for renewals of such insurance (or shall cause
the procurement and payment) from time to time before the expiration thereof,
and Trustor shall deliver to Beneficiary such original renewal policies or
certificates with premiums prepaid at least 10 days after the expiration of any
existing policy.

6.4.4            Adjustment and Distribution of Casualty Insurance
Proceeds. Trustor shall cause any insurance policy in respect of
loss or damage to the Property to provide that any loss (a) shall be adjusted
by Trustor and Beneficiary, and (b) except as provided for herein, shall be
paid to Beneficiary.

6.4.5            Release. Trustor, for itself, and on behalf
of its insurers, hereby releases and waives any right to recover against
Beneficiary or Trustee on any liability for: damages for injury to or death of
persons; any loss or damage to property, including the property of any occupant
of the Property; any loss or damage to buildings or other improvements
comprising the Property; any other direct or indirect loss or damage caused by
fire or other risks, which loss or damage is or would be covered by the
insurance required to be carried hereunder by Trustor, or is otherwise insured;
or claims arising by reason of any of the foregoing, except to the extent
caused solely by the active negligence of Beneficiary or Trustee, respectively.

6.4.6            Miscellaneous. Neither Beneficiary nor
Trustee shall, by reason of accepting, rejecting, obtaining or failing to
obtain insurance, incur any liability for (a) the existence, non-existence,
form, amount or legal sufficiency thereof, (b) the solvency or insolvency of
any insurer, or (c) the payment of losses. All insurance required hereunder or
carried by Trustor shall be procured at Trustor’s sole cost and expense.
Trustor shall deliver to Beneficiary receipts satisfactory to Beneficiary
evidencing full prepayment of the premiums therefor, except to the extent
Beneficiary makes payments with Trustor’s deposits under Section 6.5
(for the periods and payments so covered by such payments). In the event of
foreclosure on, or other transfer of title in lieu of foreclosure of, the
Property, all of Trustor’s interest in and to any and all insurance policies in
force shall pass to Beneficiary, or the transferee or purchaser as the case may
be, and Beneficiary is hereby irrevocably authorized to assign in Trustor’s
name to such purchaser or transferee all such policies, which may be amended or
rewritten to show the interest of such purchaser or transferee.

6.5                     Impound Account. Trustor shall pay to
Beneficiary each month (on the first day thereof, together with the principal
and interest payments under the Notes) an amount estimated by Beneficiary to be
equal to (a) the Taxes and Assessments payable under Section 6.3, and
(b) premiums next due for all insurance carried under Section 6.4, each
such estimate divided by the number of months to lapse preceding the month in
which it will become due and Trustor irrevocably grants and assigns to
Beneficiary a security interest in and to the amounts, if any, so paid by
Trustor. Trustor acknowledges that an initial deposit may be made pursuant to
the terms of the Loan Agreement. Such funds shall not be claimed to be held in
trust and no sums so paid shall bear interest, except to the extent of the
minimum amount of interest, if any, required by law; and Beneficiary shall,
unless Trustor has committed an Event of Default, apply such funds to, or (at
the sole option of Beneficiary) release such funds to Trustor for, payment of
such Taxes and Assessments and premiums. If Trustor has committed an Event of
Default, Beneficiary may, in its sole discretion, apply all or any part of such
sums in order of priority as Beneficiary may determine to any indebtedness
secured by this Deed of Trust. Trustor shall restore all of the amounts so
applied, as well as correct the other events or conditions constituting the
Event of Default not corrected by such application. If the total amount
retained in the impound account exceeds the amount of payments actually applied
by Beneficiary as set forth above, such excess may be credited by Beneficiary
on subsequent payments to be made by Trustor hereunder or, at the option of
Beneficiary, refunded to Trustor; but if the security account shall not be
sufficient to pay the sums required at least thirty (30) days before the same
are due and payable, Trustor shall immediately deposit with Beneficiary the
full amount of any such deficiency. Upon repayment of

 8
 

the amounts evidenced by the Notes and the satisfaction of all other
obligations of Trustor secured hereby, any remaining funds held under this
paragraph shall be released to Trustor.

6.6                     Liens and Encumbrances. Except as is
specifically permitted by this Deed of Trust, Trustor shall not cause, suffer
or create any liens or encumbrances upon the Property; and Trustor shall pay,
or cause to be paid, at or prior to maturity, all obligations secured by or
reducible to liens and encumbrances which now or hereafter shall encumber the
Property, whether senior or subordinate hereto, including all claims for work
or labor performed, or materials or supplies furnished in connection with any
work of improvement upon the Property. Notwithstanding the preceding sentence,
Trustor may contest any such claim of lien without cost or expense to Trustee
or Beneficiary, but only upon posting, and concurrently supplying to
Beneficiary a certified copy of a statutory bond or other security sufficient
under applicable law fully to protect any and all of the Property encumbered by
such claim of lien and otherwise sufficient in Beneficiary’s sole opinion to
protect Trustee and Beneficiary against any judgment in favor of the lien
claimant. If Beneficiary is made a party to any litigation concerning this Deed
of Trust, or the Property or any part thereof or interest therein, or the
occupancy thereof by any person or entity, then Trustor shall indemnify, defend
and hold Beneficiary harmless from all claims and liability by reason of such
litigation, including attorneys’ fees and expenses incurred by Beneficiary
whether or not any such litigation is prosecuted to judgment. Any lien or
encumbrance hereunder shall be paid or fully discharged by Trustor, within five
(5) days after demand by Beneficiary.

6.7                     Disposition of Insurance and Condemnation Proceeds and
Damages.

6.7.1            Beneficiary’s Rights in Proceeds and Damages. Trustor
hereby assigns to Beneficiary (a) any award for damages suffered or
compensation paid by reason of a taking for public use, or an action in eminent
domain, or the exercise of the police power, whether by a condemnation proceeding
or otherwise (such as by inverse condemnation), or any transfer of all or any
part of the Property in avoidance thereof, affecting the Property, (b) all
proceeds of any insurance policies paid by reason of loss sustained to the
Property, and (c) all claims, damages, causes of action, against or from any
party or parties, with respect to the Property, or any funds received or
receivable in connection with any damage to the Property, incurred as a result
of any cause whatsoever. All proceeds of any such claims shall be paid by the
person or entity making payment directly to Beneficiary and Trustor shall do
all things necessary to obtain prompt settlement for each loss or claim covered
by a policy of insurance. After first deducting all costs and expenses of
Beneficiary incurred in connection with the settlement or recovery of any
proceeds hereunder, Beneficiary may, at its option and without regard to the
adequacy of the security hereunder, except as otherwise provided in Section
6.7.2, apply any such sum it retains hereunder to any indebtedness or
obligation secured hereby whether due or not, and in such order or priority as
Beneficiary may determine; however, after deducting its costs and expenses
Beneficiary may, at the sole discretion of Beneficiary and regardless of any
impairment of security or lack thereof, except as otherwise provided in Section
6.7.2, release to Trustor all or any part of the entire amount so collected
for reimbursement for costs and expenses incurred by Trustor for the repair and
restoration of the affected Property upon any conditions Beneficiary chooses.
Application of all or any portion of such funds, or the release thereof, shall
not cure or waive any Event of Default or notice of an Event of Default or
invalidate any acts done pursuant to such notice. Trustor shall execute such
further assignments, documents or instruments as Beneficiary may from time to
time require in order to evidence the assignment hereunder. If, on any loss of
or damage to the Property or on a partial taking or condemnation of the
Property, Beneficiary is not entitled under law to retain the entirety of any
proceeds or award pursuant to this Section 6.7, then Beneficiary shall
be entitled to apply the proceeds or award to the repayment of the Notes and
any other indebtedness secured by any Loan Document to the extent necessary in
Beneficiary’s judgment to reduce the Notes balance and such other indebtedness
by the ratio which the value of the Property remaining encumbered hereby bears
to the value of the Property encumbered hereby immediately prior to such loss,
damage or partial condemnation or taking, as determined by Beneficiary’s
appraiser retained for such purpose. In the event any insurance proceeds or
condemnation awards are applied by Beneficiary against the Notes under this Section
6.7.1, no prepayment premium shall apply.

6.7.2            Use of Insurance Proceeds to Repair Property.

(a)                       In the
event of damage to or destruction of the Property from

 9
 

any cause actually covered under insurance maintained
by Trustor hereunder, then Beneficiary shall make available to Trustor the net
insurance proceeds available as a result of such damage or destruction (after
deducting costs and expenses incurred by Beneficiary in connection with the
settlement or recovery of any proceeds as provided in Section 6.7.1) for
use by Trustor, in the reconstruction and repair of the damaged improvements to
the condition approved by Beneficiary, on the terms and conditions hereinafter
set forth. In the event any of the conditions to Trustor’s right to utilize the
net proceeds set forth in Section 6.7.2(b) below are not satisfied or fulfilled
at any time, then such net proceeds shall be applied as provided in Section
6.7.1.

(b)                      Such net
proceeds shall be made available hereunder only if: (a) no default or an Event
of Default occurs; (b) the Loan is not impaired as a consequence of the
casualty; (c) Beneficiary has reviewed and approved in Trustor’s plans and
specifications for the work of repair and restoration, Trustor’s architect and
any general contractors, subcontractors and material suppliers employed to
perform such work; (d) if so required by Beneficiary in its discretion, all
general contractors, all major subcontractors and material suppliers have
supplied 100% performance and completion bonds and bonds protecting the
Property from the imposition of mechanic’s or other liens; (e) if the net
insurance proceeds or condemnation proceeds available are insufficient for
payment of the full cost of restoration or repair and the payments under the
Notes during the completion period (and re-leasing period, if any), as
estimated by Beneficiary, Trustor has deposited with Beneficiary sufficient
additional funds to insure payment of all such costs, or made arrangements
acceptable to Beneficiary for such sufficient additional funds, such additional
funds to be disbursed for costs incurred in the manner herein specified prior
to the disbursement of any other funds held by Beneficiary; and (f) Trustor
shall have satisfied such other conditions as Beneficiary may in good faith
determine to be appropriate. Disbursement of funds by Beneficiary hereunder
shall be subject to all of Beneficiary’s then customary construction loan
disbursement procedures.

(c)                       Funds held
by Beneficiary hereunder shall bear interest; and Beneficiary shall have no
other duties or obligations with respect thereto, or with respect to the
provisions of this Section 6.7.2, other than that of a construction
lender; and the reasonable costs and expenses of Beneficiary incurred in
connection therewith (including the fees of a construction consultant and
disbursing agent) shall be paid by Trustor (and Beneficiary shall be entitled
to pay such costs and expenses out of the insurance proceeds held by
Beneficiary). Specifically, but without limiting the generality of the
foregoing, no relationship of trust, or any other duty in the nature of
fiduciary duties or otherwise, shall be imposed or implied by the status or
actions of Beneficiary hereunder; and under no circumstances shall Beneficiary become
obligated to take any action to repair or reconstruct any damaged or destroyed
Property. Any net proceeds not disbursed under this Section 6.7.2 shall
be disbursed in accordance with Section 6.7.1.

6.7.3            Waiver of Allocation Rights. Without
limitation of the foregoing, Trustor hereby specifically, unconditionally and
irrevocably waives all rights of a property owner granted under California Code
of Civil Procedure Section 1265.225(a), which provides for allocation of
condemnation proceeds between a property owner and a lienholder, and any other
law or successor statute of similar import.

 10
 

6.8                     Maintenance and Preservation
of the Property.

6.8.1            Trustor’s Obligation for Maintenance of Property and
Security. Trustor shall: (a)
keep the Property in good condition and repair and replace any items comprising
the Property as they become obsolete or worn out with items of at least the
same utility, quality and value, free of any liens or security interests of any
kind or character other than the lien of the Loan Documents; (b) not remove or
demolish the Property; (c) restore promptly and in good and workmanlike manner
any part of the Property which may be damaged or destroyed; (d) comply with and
not suffer violations of laws, ordinances, regulations, covenants, conditions,
restrictions, equitable servitudes and easements, whether public or private, of
every kind and character, and requirements of insurance companies and any
bureau or agency which establishes standards of insurability (“Requirements”);
(e) not commit or permit waste of the Property; (f) do all other acts which
from the character or use of the Property may be reasonably necessary to
maintain and preserve its value or to protect the security hereof; (g) perform
and comply with all obligations required to be performed or complied with in
leases, licenses, concessions, management agreements, or like agreements
affecting the Property or the management, operation, occupation or use thereof;
(h) pay any and all charges, assessments or fees imposed in connection with the
delivery, installation or maintenance of any utility services or installations
on, to or for the Property; (i) not change the character, the nature of the
occupancy or use of the Property, or any portion thereof; (j) not drill for or
extract, or enter into a lease or any other type of agreement for the drilling
for or extraction of, oil, gas or other hydrocarbon substances, or any mineral
of any kind, on, in or under the Property; (k) make no assignment of rents of
the Property except to Beneficiary; and (l) execute and, where appropriate,
acknowledge and deliver, such further documents or instruments as Beneficiary
or Trustee deems necessary or appropriate to preserve, continue and perfect the
security provided for herein.

6.8.2            Beneficiary’s Approval Rights for Work. Trustor shall not undertake or suffer to be
made any alteration, addition, relocation, removal or demolition of, or
structural or other material change in, any building, improvement, fixture,
machinery, or equipment comprising the Property, without the prior written
approval of Beneficiary, unless (a) the aggregate cost of such work does not
exceed $500,000, (b) such work does not affect the roof or the structure of the
building and improvements comprising the Property, or adversely affect or
diminish the value of the Property or arise as a result of any damage or
destruction, and (c) such work is designed by licensed professionals (to the
extent that design services are or are customarily obtained for such work) and
is constructed by licensed contractors, all qualified for such purpose, and in
accordance with all applicable laws, ordinances, regulations, permits and
approvals. The foregoing shall not limit Trustor’s obligations under Section
6.8.1 and accordingly, Trustor shall immediately seek any consent required
under this Section 6.8.2 in connection with its obligations under Section
6.8.1.

6.8.3            Compliance with Laws. Trustor warrants and represents to Beneficiary that Trustor and the
Property currently comply, and will in the future comply, fully with all
applicable laws, ordinances and regulations, and all permits and approvals
issued thereunder, affecting Trustor’s right and qualification to do business,
the construction and installation of the improvements located or to be located
upon the Property, the operation, leasing, financing or sale of the Property
and the occupancy, use and enjoyment thereof. Without limitation on the
foregoing, Trustor represents and warrants to Beneficiary that it has complied
with and shall continue to comply with all applicable laws relating to
accessibility for the handicapped, including The Architectural Barriers Act of
1968, The Rehabilitation Act of 1973, The Fair Housing Act of 1988 and The
Americans With Disabilities Act of 1990. Without the prior written consent of
Beneficiary, Trustor shall not seek, make or consent to any change in the lot
or parcel boundaries, zoning, conditions of use, or any other applicable land
use laws, ordinances, regulations, permits, approvals or licenses pertaining to
the Property, or which would constitute a violation of the warranties and
representations herein contained, or would change the nature of the use or
occupancy of the Property. Trustor shall within ten (10) days after receipt
thereof by Trustor, or its agent or representative, deliver to Beneficiary
copies of any and all approvals, permits and licenses procured by Trustor with
respect to the Property, construction and installation of improvements thereon,
or the occupancy, use and enjoyment thereof, pursuant to applicable laws,
ordinances, or regulations.

6.9                     Defense and Notice of
Actions. Trustor shall,
without liability, cost or expense to Beneficiary or Trustee, protect, preserve
and defend title to the Property, the security hereof and the rights or

 11
 

powers of Beneficiary or
Trustee hereunder, against all adverse claimants to title, or any possessory or
non-possessory interest in the Property. Trustor shall give Beneficiary and
Trustee prompt written notice of the filing or occurrence of any such event,
action or proceeding, including fire or other casualty causing damage to the
Property; notice of condemnation or other taking of the Property; notice from
any governmental agency relating to the Property of any violation of law; a
change in the nature of the occupancy or use of the Property; or the
commencement of any litigation affecting the Property or the title thereto.

6.10               Collection of Rents, Issues and Profits; Approval of Leases.

6.10.1      Trustor’s Authority to Collect and Retain Rents. Beneficiary confers upon Trustor the license
to collect and retain the rents, issues and profits of the Property as they
become due and payable, subject, however, to the right of Beneficiary to revoke
such license at any time following the occurrence of an Event of Default in its
sole discretion and without notice to Trustor. Beneficiary shall have the
absolute right to revoke such authority and collect and retain the rents,
issues and profits assigned herein, without taking possession of all or any
part of the Property. The right to collect rents and profits herein provided
shall not grant to Beneficiary or Trustee the right to possession, except as
expressly herein provided; nor shall such right impose upon Beneficiary or
Trustee the duty to produce rents or profits or maintain the Property in whole
or in part. Possession of the Property by a receiver appointed by a court of
competent jurisdiction shall not be considered possession of the Property by
Beneficiary or Trustee for purposes hereof. Following the occurrence of an
Event of Default, Beneficiary may apply, in its sole discretion and in any
order of priority, any rents, issues and profits collected against the costs of
collection and any indebtedness secured by or obligations of Trustor arising
under the Loan Documents. Collection of any rents, issues and profits by
Beneficiary shall not cure or waive any Event of Default or notice of Event of
Default, or invalidate any acts done pursuant to such notice.

6.10.2      Trustor’s Authority to Enter into Leases. Trustor shall not enter into any lease of the
Property, or any portion thereof, without Beneficiary’s prior written consent
in its sole discretion, or modify or amend or supplement any such lease without
the prior written consent of Beneficiary in its sole discretion unless such
leases are to parties that are not affiliates of Trustor and are for space in
the buildings located at 2240 & 2270 Agnew Road (all such leases of which
shall be subordinate to Beneficiary; provided, however, that the tenants
thereunder shall execute any reasonable form of subordination, nondisturbance
and attornment agreement required by Beneficiary). Trustor shall, on demand,
execute such further assignments to Beneficiary of any or all leases,
agreements, rents, issues or profits of the Property as Beneficiary may
require. Upon request of Beneficiary, Trustor shall promptly deliver to
Beneficiary a copy of the fully executed original of any or all leases or
agreements entered into hereunder. All leases of the Property shall be
subordinate to this Deed of Trust unless Beneficiary elects in writing, at its
sole option, to subordinate this Deed of Trust to a particular lease or leases;
and all such leases shall provide, in a manner approved by Beneficiary, that
the tenant thereunder shall recognize as its lessor and attorn to any person
succeeding to the interest of Trustor upon foreclosure of this Deed of Trust
(or deed in lieu thereof).

6.11               Right of Inspection. Beneficiary, its agents or employees, may enter the Property at any time
for the purpose of inspecting the Property or ascertaining Trustor’s compliance
with the terms of any Loan Document.

6.12               Intentionally omitted.

6.13               Acceptance of Trust. Trustee accepts this trust when this Deed of
Trust, duly executed and acknowledged, becomes a public record as provided by
law. Trustee shall not be obligated to perform any act required of it hereunder
unless the performance of such act is requested in writing and Trustee is
reasonably indemnified against loss, cost, liability and expense.

6.14               Powers of Trustee; Indemnity. From time to time upon written request of
Beneficiary and presentation of this Deed of Trust for endorsement, and without
affecting the liability of any person or entity for payment of any indebtedness
or performance of obligations secured hereby, Trustee may, without liability
therefor and without notice: reconvey all or any part of the Property; consent
to the making of any map or plat thereof; join in granting any easement
thereon; join in any declaration of covenants

 12
 

and restrictions; or join in any extension agreement
or any agreement subordinating the lien or charge hereof. Trustee (or
Beneficiary) may from time to time apply in any Court of competent jurisdiction
for aid and direction in the execution of the trusts and the enforcement of the
rights and remedies available hereunder, and Trustee (or Beneficiary) may
obtain orders or decrees directing, confirming or approving acts in the
execution of such trusts and the enforcement of such remedies. All costs and
expenses of any such proceeding (including attorneys’ fees and costs) shall be
borne by Trustor. Trustee shall not be obligated to notify any party of any
pending sale of the Property, or any portion thereof, under any other deed of
trust or otherwise, or of any action or proceeding in which Trustor,
Beneficiary or Trustee shall be a party, unless Trustee brings such action or
unless held or commenced and maintained by Trustee under this Deed of Trust.
Trustor shall pay to Trustee reasonable compensation and reimbursement for all
services and expenses in the administration of the trusts created hereunder,
including attorneys’ fees and costs. Trustor shall indemnify, defend and hold
Trustee and Beneficiary, and each of them, harmless against any and all losses,
claims, demands, liabilities, costs or expenses (including attorneys’ fees and
costs) which either may incur, in the execution of the trusts created
hereunder, or in the performance of any act or obligation required or permitted
hereunder or by law or otherwise arising out of or in connection with the Notes
or any other Loan Document, except to the extent any of the foregoing results
from the sole gross negligence or willful misconduct of a party indemnified
hereunder, in which event the foregoing indemnity shall not extend (to such
extent) to such indemnified party with respect to such negligence or
misconduct, but shall continue in full force and effect and benefit the other
indemnified party hereunder.

6.15               Substitution of Trustee. From time to time,
by an instrument signed and acknowledged by Beneficiary, referring to this Deed
of Trust filed for record as required by law, Beneficiary may appoint another
trustee to act in the place and stead of Trustee. The recordation of such
instrument shall discharge Trustee herein named and shall appoint the new
trustee as the Trustee hereunder. An instrument so recorded shall be conclusive
proof of the proper substitution of such new trustee, who shall then have all
the title, powers, duties and rights of Trustee hereunder, without necessity of
any conveyance from such predecessor, with the same effect as if originally
named Trustee herein.

6.16               Acceleration Upon Sale or Further Encumbrance.

6.16.1  Obligations of Trustor Regarding Transfers. By
delivery of this Deed of Trust, Trustor acknowledges that the financial
standing and managerial and operational ability of Trustor are substantial and
material considerations to Beneficiary in its agreement to make the loan
evidenced by the Notes and that any encumbrance or transfer of an interest in
the Property will materially impair Beneficiary’s reasonable security
hereunder. In order to induce Beneficiary to make the loan evidenced by the
Notes secured hereby, Trustor agrees Trustor shall not effect a Transfer,
either directly or indirectly, or by operation of law, without in each instance
first obtaining Beneficiary’s prior written consent, which consent may be
withheld for any reason, or given upon such terms and conditions as Beneficiary
deems necessary or appropriate, all within Beneficiary’s sole discretion, to
the extent permitted by applicable law. Upon any Transfer made in violation of
this Section 6.16.1, Beneficiary shall have the absolute right in its
sole discretion, without demand or notice, to declare all sums, indebtedness
and obligations secured hereby to be immediately due and payable (including the
prepayment premium set forth in the Notes, if any), except to the extent that
and in such particular circumstances where exercise of such right by
Beneficiary is prohibited by law. Any Transfer effected pursuant to a consent
or waiver by Beneficiary shall be subject to this Deed of Trust, and any such
direct transferee shall, as a condition of the effectiveness of any such
consent or waiver and as a covenant of Trustor and such transferee, and in form
and substance prescribed by Beneficiary, assume all obligations hereunder and
agree to be bound by all provisions contained herein (and, without limitation,
such assumption shall contain an express acknowledgment of the prepayment
provisions of the Notes and their application if there is an acceleration of
the Notes by reason of a Transfer or otherwise, which acknowledgment shall be
separately initialed by the transferee). Such assumption shall not, however,
release Trustor or any maker or guarantor of the Notes from any liability
thereunder. Except as herein provided, any transaction or event of any kind
effecting a Transfer or further encumbering the Property, or changing the
identity of the parties primarily liable for performance of Trustor’s covenants
under this Deed of Trust except as permitted herein, shall constitute an
impairment of Beneficiary’s reasonable security interests under this Deed of
Trust. Notwithstanding the above provisions of this Section 6.16.1, the
trading of any shares of stock of Trustor that are publicly traded on a
national securities exchange shall not violate the

 13
 

provisions of this paragraph provided that no such
trade (or series of trades) causes a “Change of Control” (as defined in the
Loan Agreement) in Trustor.

6.16.2  Deed of Trust Provisions Control Over Other
Instruments. The provisions of this Section 6.16 shall
prevail notwithstanding any contrary provisions in the Notes or any other
instrument which evidences or secures obligations hereby secured. Trustor shall
notify Beneficiary promptly in writing of, but in any event not later than
thirty (30) days prior to, any transaction or event which may give rise to a
right of acceleration under this Section 6.16.

6.17               Reconveyance. Upon Beneficiary’s written
request, and upon surrender to Trustee for cancellation of this Deed of Trust
and the Notes or instruments setting forth all obligations secured hereby,
Trustee shall reconvey, without warranty, the Property, or that portion thereof
then held hereunder. The recitals of any matters or facts in any reconveyance
executed hereunder shall be conclusive proof of the truthfulness thereof. To
the extent permitted by law, the reconveyance may describe the grantee as “the
person or persons legally entitled thereto.” Neither Beneficiary nor Trustee
shall have any duty to determine the rights of persons claiming to be rightful
grantees of any reconveyance. When the Property has been fully reconveyed, the
last such reconveyance shall operate as a reassignment of all future rents,
issues and profits of the Property to the person or persons legally entitled
thereto, unless such reconveyance expressly provides to the contrary.

6.18               Defense and Indemnity Rights. Whenever,
under any Loan Document, Trustor is obligated to indemnify or defend
Beneficiary or Trustee, or defend or prosecute any action or proceeding, then
Beneficiary and Trustee, and each of them, shall have the right of full
participation in any such action or proceeding, with counsel of Beneficiary’s
choice, and all costs and expenses incurred by Beneficiary or Trustee in
connection with such participation (including reasonable attorneys’ fees and
costs) shall be reimbursed by Trustor to Beneficiary or Trustee immediately
upon demand. Trustor shall give notice to Beneficiary and Trustee of the
initiation of all proceedings prosecuted or required to be defended by Trustor,
or which are subject to Trustor’s indemnity obligations under any Loan Document
promptly after the receipt by Trustor of notice of the existence of any such
proceeding. All costs or expenses required to be reimbursed by Trustor to
Beneficiary hereunder shall, if not paid when due as herein specified, bear
interest at the interest rate of the Notes or at the Past Due Rate if such
Notes contains a Past Due Rate, until paid by Trustor. As used herein, “proceeding”
shall include litigation, arbitration and administrative hearings or
proceedings.

6.19               Destruction of Notes. Trustor shall, if
either of the Notes is mutilated or destroyed by any cause whatsoever, or
otherwise lost or stolen and regardless of whether due to the act or neglect of
Beneficiary or Trustee, execute and deliver to Beneficiary in substitution
therefor a duplicate promissory note within ten (10) days after Beneficiary
notifies Trustor of any such mutilation, destruction, loss or theft of such
Note. Any such new promissory note shall be in full substitution for that Note,
shall not constitute any new or additional indebtedness of Trustor to
Beneficiary, shall constitute solely a substitute evidence of the indebtedness
evidenced by the original Note, and shall not affect in any manner the priority
of any Loan Document.

6.20               Provisions Relating to Hazardous Materials.

6.20.1  Except
for matters disclosed in any environmental reports delivered by Trustor to
Beneficiary, Trustor represents and warrants that: (a) to the best of Trustor’s
knowledge, the Property complies with all Hazardous Materials Law as to use and
conditions on, under or about the Property including soil and groundwater
condition; (b) neither Trustor nor, to the best of Trustor’s knowledge, any
other person, has used, generated, manufactured, stored or disposed of on,
under or about the Property or transported to or from the Property any
Hazardous Materials; and (c) to the best knowledge of Trustor, there are no
Hazardous Materials in, attributable to or affecting the Property in violation
of applicable law (including Hazardous Materials Laws), including from the
presence of lead based paint at the Property. Without limitation on the
foregoing, to the best knowledge of Trustor: (i) the primary potable or
drinking water source and groundwater has never been known to exceed the EPA
Recommended Maximum Contaminant Level Goals set forth under the Safe Drinking
Water Act, and Clean Water Act, as amended; (ii) there is not and has

 14
 

never been landfill containing decomposable material,
petroleum wells, mineral bearing mines, sewage treatment facilities,
underground storage tanks, sinkholes, radon or other toxic emissions within the
Property, and (iii) no electrical transformers, fluorescent light fixtures with
ballasts or other equipment containing polychlorinated biphenyls (PCBs) have
been located on the Property at any time.

6.20.2  Trustor
covenants and agrees that Trustor shall not cause or permit the presence, use,
generation, manufacture, release, discharge, storage or disposal of any
Hazardous Materials on, under, in or about the Property, or the transportation
of any Hazardous Materials to or from the Property in violation of applicable
law (including Hazardous Materials Laws). Without limitation, Trustor shall
cause the Property to be in compliance with all Hazardous Materials Laws,
including those Hazardous Materials Laws relating to lead based paint. Trustor
shall immediately notify Beneficiary in writing of: (a) any enforcement,
cleanup, removal or other governmental or regulatory action instituted,
completed or threatened in connection with any Hazardous Materials; (b) any
claim made or threatened by any third party against Trustor or the Property
relating to damage, contribution, cost recovery, compensation, loss or injury
to persons or property resulting from any Hazardous Materials located on, under
or at the Property; and (c) Trustor’s discovery of any occurrence or condition
on any real property adjoining or in the vicinity of the Property that could
cause all or any portion of the Property to be classified as “border-zone
property” under the provisions of the California Health and Safety Code or any
regulation adopted in accordance therewith, or to be otherwise subject to any
restrictions on the ownership, occupancy, transferability or use of the
Property under Hazardous Materials Law. Without Beneficiary’s prior written
consent, Trustor shall not take any remedial action in response to the presence
of any Hazardous Materials on, in, under or about the Property, nor enter into
any settlement agreement, consent decree or other compromise in respect to any
Hazardous Materials (except that in the case of an emergency, Trustor shall
take such action as may be reasonably required under the circumstances and
shall immediately notify Beneficiary in writing of any such action taken).

6.20.3  Trustor
shall indemnify, defend and hold Beneficiary, its employees, agents, officers
and directors, harmless from and against any claim, action, suit, proceeding,
loss, cost, damage, liability, deficiency, fine, penalty, punitive damage or
expense (including attorneys’, experts’ and consultant fees), directly or
indirectly resulting from, arising out of, or based upon (a) the presence,
release, use, manufacture, generation, discharge, storage or disposal of any
Hazardous Materials on, under, in or about, or the transportation of any such
materials to or from, the Property, or (b) the violation, or alleged violation,
of any Hazardous Materials Law affecting the Property, or the transportation of
Hazardous Materials to or from the Property. This indemnity shall (i) include
any damage, liability, fine, penalty, punitive damage, cost or expense arising
from or out of any claim, action, suit or proceeding for personal injury
(including sickness, disease or death), tangible or intangible property damage,
compensation for lost wages, business income, profits or other economic loss,
damage to the natural resources or the environment, nuisance, pollution,
contamination, leak, spill, release or other adverse effect on the environment,
and the cost of any required or necessary repair, cleanup, treatment or
detoxification of the Property, and the preparation and implementation of any
closure, disposal, remedial or other required actions in connection with the
Property, and (ii) survive foreclosure (whether judicial or nonjudicial) of
this Deed of Trust and the full or partial payment or discharge of all indebtedness
secured hereby except to the extent that the liability relates to conditions
arising after foreclosure. Notwithstanding Section 2941 of the California Civil
Code, Trustor hereby waives its rights to any damages resulting from a delayed
reconveyance of this Deed of Trust pending the identification and liquidation
of Trustor’s liabilities under this Section. Trustor hereby waives any defenses
or limits to the foregoing indemnification of Beneficiary that would otherwise
be available to Trustor under California Code of Civil Procedure Section
736(b)(3).

6.20.4  At
any time during the term of this Deed of Trust, Beneficiary shall have the
right, on seventy-two (72) hours prior written notice to Trustor, at Trustor’s
expense, to enter the Property and to conduct such tests and investigations as
Beneficiary requires, in the event that Beneficiary has a good faith belief
that such tests or investigations are required or advisable, or at any time
following an Event of Default, to determine whether any Hazardous Materials are
present in, under, on or about the Property. Such tests and investigation shall
include underground borings, ground water analyses and borings from the floors,
ceilings and walls of any improvements located on the Property. Without limitation
on any other terms provided herein, Trustor shall, at Trustor’s sole cost and
expense, implement any and all operations and maintenance plans recommended for
asbestos or other matters relating to Hazardous Materials

 15

recommended in any environmental report and shall complete all surveys
and/or questionaires in connection therewith.

6.20.5      “Hazardous
Materials Law”,  for
purposes of this Section 6.20, means any federal, state, or local law,
ordinance or regulation or any rule adopted or guideline promulgated pursuant
thereto, or any order, ruling or directive of any federal, state, local,
executive, judicial, legislative, administrative or other governmental or
public agency, board, body or authority relating to health, industrial hygiene,
the environment, or the occupational or environmental conditions on, under or
about the Property (including ambient air, soil, soil vapor, groundwater,
surface water or land use), whether now or hereafter in force, including those
relating to the release, emission or discharge of Hazardous Materials, those in
connection with the construction, fuel supply, power generation and
transmission, waste disposal or any other operations or processes relating to
the Property. “Hazardous Materials Law” shall include the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Hazardous
Materials Transportation Act, the Resource Conservation and Recovery Act, the
Solid Waste Disposal Act, the Clean Water Act, the Clean Air Act, and the
Carpenter-Presley-Tanner Hazardous Substance Account Act and the California
Health and Safety Code, as the same are now or hereafter amended.

“Hazardous Materials”,
for purposes of this Section 6.20, means any chemical, substance,
object, condition, material or waste that is or may be hazardous to human
health or safety or to the environment, due to its radioactivity, ignitability,
corrosivity, flammability, reproductive toxicity, infectiousness or other
harmful properties or effects, including all chemicals, substances, materials
and wastes that are now or hereafter may be regulated in any manner, classified
as dangerous, hazardous or toxic, or as pollutants or contaminants, or to which
exposure is prohibited or restricted by any federal, state or local government
or public agency, board, body or authority or by any Hazardous Material Law. “Hazardous
Materials” include flammable explosives, radioactive materials, polychlorinated
biphenyls, asbestos, hazardous waste, radon, toxic substances or other related
materials whether in the form of a chemical, element, compound, solution,
mixture or otherwise, including those materials defined as “hazardous
substances”, “hazardous materials”, “toxic substances”, “air pollutants”, “toxic
pollutants”, “hazardous wastes”, “extremely hazardous waste” or “restricted
hazardous waste” by any Hazardous Materials Law.

6.20.6      Nothing herein shall be construed for purposes of
any Hazardous Materials Law as devolving control of the Property or imposing
owner or operator status on the Trustee or Beneficiary.

6.20.7      Notwithstanding anything to the contrary
contained in the Notes, this Deed of Trust or any Loan Document, and without
limitation on any other rights and remedies of Beneficiary, Beneficiary shall
have each and all of the rights and remedies under California Civil Code
Section 2929.5 and California Code of Civil Procedure Sections 564, 726.5 and
736.

6.21         Default Provisions.

6.21.1      Rights and
Remedies. At any time after the occurrence of an Event of Default,
Beneficiary and Trustee and each of them shall have each and all of the
following rights and remedies:

(a)           Immediate Payment of Obligations. With or
without notice, to declare all obligations secured by any Loan Document
immediately due and payable.

(b)           Cure Default. With or without notice, and
without releasing Trustor from any obligation hereunder, to cure any default of
Trustor and, in connection therewith, to enter upon the Property in person, or
by an agent or employee, or by a receiver appointed by a court of competent
jurisdiction, and to do such acts and things as Beneficiary or Trustee may deem
necessary or desirable to protect the security hereof.

(c)           Judicial Proceedings. To commence and
maintain an action or actions in any court of competent jurisdiction to
foreclose this Deed of Trust as a mortgage, or without regard to the adequacy
of any security for the indebtedness secured hereby, to obtain specific
enforcement of the covenants of Trustor hereunder, for an injunction against
any violation of this Deed of Trust, the appointment of a receiver, or for

 16
 

such other equitable relief as may be appropriate, in addition to any
other remedies Beneficiary may otherwise have.

(d)           Manage and Operate Property. To enter upon,
possess, manage and operate the Property, or any part thereof, either in
person, or by an agent or employee, or by a receiver appointed by a court of
competent jurisdiction; to make, terminate, enforce or modify leases of the
Property upon such terms and conditions as Beneficiary deems necessary or
proper and to act in any manner which Beneficiary or Trustee may deem necessary
or desirable in connection therewith; and to make repairs, alterations and
improvements to the Property necessary, in Trustee’s or Beneficiary’s judgment,
to protect or enhance the security hereof. All sums realized by Beneficiary
under this Section 6.21.1(d), less all costs and expenses incurred by it
hereunder, including attorneys’ fees and costs actually incurred, shall be
applied on any indebtedness secured hereby in such order of priority as
Beneficiary shall determine. Neither application of such sums to such
indebtedness, nor any other action taken by Beneficiary under this Section
6.21.1(d), shall cure or waive any Event of Default or notice of Event of
Default or nullify the effect of any such notice.

(e)           Elect to Sell Property. To execute a
written notice of such Event of Default and of the election to cause the
Property to be sold to satisfy the obligations secured hereby, Trustee shall
give and record such notice as the law then requires as a condition precedent
to a trustee’s sale. When the minimum period of time required by law after such
notice has elapsed, Trustee, without notice to or demand upon Trustor except as
otherwise may then be required by law, shall sell the Property at the time and
place of sale fixed by it in the notice of sale, either as a whole or in
separate parcels or through one or more successive sales and in such order as
it or Beneficiary may determine, at public auction to the highest bidder for
cash, in lawful money of the United States, or other form of payment acceptable
to Beneficiary, payable at the time of sale. Trustor shall have no right to
direct the order in which the Property is sold. Beneficiary may, in its sole
discretion, designate the order in which the Property is offered for sale or
sold and determine if the Property shall be sold through a single sale or
through two or more successive sales, or in any other manner Beneficiary deems
to be in its best interest. If Beneficiary elects more than one sale or other
disposition of the Property, Beneficiary may at its option cause the same to be
conducted simultaneously or in such order and at such times as Beneficiary may
deem to be in its best interests, and no such sale shall terminate or otherwise
affect the lien of this Deed of Trust on any part of the Property not then sold
until all indebtedness secured hereby has been fully paid. If Beneficiary
elects to dispose of the Property through more than one sale, Trustor shall pay
the costs and expenses of each such sale and of any judicial proceedings where
the same may be undertaken. Trustee may postpone any such sale by public
announcement at the time and place fixed by the notice of sale, and may
thereafter continue such postponement by like announcements at the time and
place fixed by the preceding postponement, at Beneficiary’s direction and
without necessity of additional notices of sale. Trustee shall deliver to the
purchaser at such sale a deed conveying the Property or portion thereof so
sold, but without any covenant or warranty, express or implied. The recitals in
such deed of any matters or facts shall be conclusive proof of the truthfulness
thereof. Any person, including Trustee, Trustor or Beneficiary, may purchase at
such sale. Notwithstanding anything to the contrary contained herein, Trustee
shall (to the extent permitted by applicable law) allocate or apply the
proceeds of sale (including the amount of any credit bid) in such manner and in
such priority as Beneficiary may elect in its sole and absolute discretion.
Notwithstanding anything to the contrary contained herein, Beneficiary’s rights
and remedies under California Code of Civil Procedure Section 736 shall not be
waived, limited or otherwise adversely affected by virtue of a full or partial
credit bid upon foreclosure of this Deed of Trust.

(f)            Resort to Security. To resort to and
realize upon the security hereunder and any other security now or hereafter
held by Beneficiary in such order and manner as Trustee and Beneficiary, or
either of them, may in their sole discretion determine. Resort to any or all
such security may be taken concurrently or successively and in one or several
consolidated or independent judicial actions or lawfully taken non-judicial
proceedings, or both.

(g)           Appointment of Receiver. To apply to any
court having jurisdiction to appoint a receiver or receivers for the Property,
as a matter of right and without notice to Trustor or anyone claiming under
Trustor, and without regard to the then value of the Property or the adequacy
of any security for the obligations secured hereby, Trustor hereby irrevocably
consents to such appointment and waives notice of any application therefor. Any
such receiver or receivers shall have all the usual powers and duties of
receivers in

 17
 

like or similar cases and all the powers and duties of Beneficiary in
case of entry as provided herein. Trustor agrees to promptly deliver to any
such receiver all leases, rents, issues and profits (including security
deposits), documents, financial data and other information requested by such
receiver in connection with the Property and, without limiting the foregoing,
Trustor hereby authorizes Beneficiary to deliver to any such receiver any or
all of the leases, rents, issues and profits, documents, data and information
in Beneficiary’s possession relating to the Property.

(h)           Exercise Other Rights and Remedies. To
exercise or invoke any and all other rights and remedies as may be available to
Beneficiary or Trustee now or hereafter at law or in equity.

No action taken, or right or remedy invoked, by
Beneficiary or Trustee under this Section 6.21.1, including the
appointment of a receiver for the Property, or the entry into possession of the
Property, or any part thereof, by such receiver, or otherwise, shall be deemed
to make Beneficiary a “mortgagee in possession” or otherwise responsible or
liable in any manner with respect to the Property, or the use, occupancy,
enjoyment or operation of all or any part thereof. In no event shall Beneficiary
be required to accept a cure of any default beyond the applicable grace, notice
and cure periods provided in the Loan Documents, if any, notwithstanding any
statement or provision to the effect that rights or remedies are available
while an Event of Default “exists”, “continues” or is “outstanding”, or during
the “existence” or “continuation” of an Event of Default (or any similar
statement or provision) in any of the Loan Documents, or anything else in the
Loan Documents.

6.21.2      Payment of Costs,
Expenses and Attorneys’ Fees. All costs and expenses incurred by
Trustee and Beneficiary pursuant to Section 6.21.1 (including court
costs and attorneys’ fees and costs, whether or not incurred in litigation and
whether or not foreclosure is concluded, including, without limitation,
attorney’s fees and costs incurred in connection with any judicial or
nonjudicial foreclosure of this Deed of Trust or the other Loan Documents, or
in connection with both judicial and nonjudicial foreclosure, if Beneficiary shall
elect to pursue each such remedy whether concurrently or independently) shall
be secured by this Deed of Trust and shall bear interest at the interest rate
of the Notes or at the Past Due Rate if the Notes contain a Past Due Rate, from
the date of expenditure until such sums have been paid. Beneficiary shall be
entitled to bid, at any sale of the Property held pursuant to Section
6.21.1(e) above, the amount of all such costs, expenses, and interest in
addition to the amount of any other obligations hereby secured by a credit bid
as the equivalent of cash.

6.21.3      Remedies
Cumulative; No Waiver. All rights and remedies of Beneficiary and
Trustee hereunder are cumulative and not alternative, and are in addition to
all rights and remedies otherwise provided by law. No exercise of any right or
remedy by Beneficiary or Trustee shall constitute a waiver of any other right
or remedy. No delay or omission by Trustee or Beneficiary to exercise any
right, power or remedy hereunder shall impair any such right or remedy, or be
construed as a waiver of any Event of Default, or any acquiescence therein. By
accepting payment of any sum secured hereby after its due date or later
performance of any obligation secured hereby, Beneficiary shall not waive its
right against any person obligated directly or indirectly hereunder, or on any
obligation hereby secured, either to require prompt payment when due of all
other sums so secured or to declare an Event of Default for failure to make
such prompt payment or render such performance; and Beneficiary’s acceptance of
partial payment of any sum secured hereby after its due date (which may be
applied to such outstanding payment obligations as Beneficiary may elect,
notwithstanding Trustor’s instructions to the contrary), or acceptance of
partial performance of any obligation secured hereby in default, shall not cure
such payment failure or default, or affect any notice of an Event of Default or
sale heretofore given or recorded, unless such notice is expressly revoked in
writing by Beneficiary.

6.21.4      Releases,
Extensions, Modifications and Additional Security. Without affecting
the liability of any person for payment of any indebtedness secured hereby, or
the lien or priority of this Deed of Trust or any other Loan Document upon the
Property, Beneficiary may, from time to time, with or without notice, do one or
more of the following: release the liability of any person for the payment of
any indebtedness secured hereby; make any agreement or take any action
extending the maturity or otherwise altering the terms or increasing the amount
of any indebtedness secured hereby; and accept additional security, or release
all or a portion of the Property and other security held to secure the
indebtedness secured

 18
 

hereby. If Beneficiary holds any other or additional security for the
payment of any indebtedness or performance of any obligation hereby secured,
then any sale or foreclosure of such security upon any Event of Default, in the
sole discretion of Beneficiary, may be prior to, subsequent to, or
contemporaneous with, any sale or foreclosure hereunder and any property in
which Beneficiary holds a security interest may be sold as a unit with the
Property.

6.21.5      Marshalling of
Assets. Trustor waives all right to require a marshalling of assets
by Trustee or Beneficiary; and Trustor waives the right to require Trustee or
Beneficiary to resort first to any portion of the Property retained by Trustor
before resorting to any other portion of the Property which may have been
transferred or conveyed subject hereto, whether such resort to security is
undertaken by non-judicial sale or through proceedings in judicial foreclosure.

6.22         Amendments. This Deed of Trust may be
amended at any time and from time to time only by an amendment in writing,
executed by Beneficiary and Trustor, and recorded or filed as required by
applicable law for the giving of constructive notice.

6.23         Consents. Any consent or waiver by
Beneficiary to or of any term, covenant or condition under this Deed of Trust,
or of any Event of Default, or failure by Beneficiary to insist upon strict
performance by Trustor of any term, covenant or condition contained in any Loan
Document, shall be effective or binding on Beneficiary only if expressly made
in writing by Beneficiary and no such consent or waiver shall be implied from
any conduct or act of Beneficiary, or any omission by Beneficiary to take
action with respect to any such term, covenant, condition or default. No
express written consent to or waiver of any term, covenant or condition of this
Deed of Trust or Event of Default shall affect any other term, covenant or
condition, or any other matter or Event of Default, or cover any other time
period or event, other than the application of any such term, covenant or
condition to the matter as to which a consent or waiver has been given or the
Event of Default, time period or event specified in such express consent or
waiver.

6.24         Further Assurances. Trustor shall, upon
request by Beneficiary or Trustee, execute, with acknowledgment or affidavit if
required, and deliver, any and all documents and instruments required to
effectuate the provisions hereof.

6.25         Statement of Condition. From time to time
as required by law, Beneficiary shall furnish to Trustor such statements as may
be required by law concerning the condition of the obligations secured hereby.
As a condition to Beneficiary’s obligation to issue any such statement, Trustor
shall pay to Beneficiary such charge as Beneficiary has established for the
issuance of such statements, or the maximum amount allowed by law for each such
statement, if such amount is less than Beneficiary’s charge.

6.26         Intentionally omitted.

6.27         Trustor, Beneficiary and Trustee Defined. As
used in this Deed of Trust, the term “Trustor” includes each original signatory
of this Deed of Trust as Trustor and each of its permitted successors and
assigns; the term “Beneficiary” includes the Beneficiary named herein or any
future owner or holder, including pledgees, of the Notes, notes or instrument
secured hereby, or any participation therein; and the term “Trustee” includes
the original Trustee under this Deed of Trust and its successors and assigns.

6.28         Rules of Construction. When the identity of
the parties or other circumstances make appropriate, the neuter gender shall
include the feminine and masculine, and the singular number shall include the
plural. Specific enumeration of rights, powers and remedies of Trustee and
Beneficiary and of acts which they may do and of acts Trustor must do or not do
shall not exclude or limit the general. The headings of each Section are for
information and convenience and do not limit or construe the contents of any
provision hereof. The provisions of this Deed of Trust shall be construed as a
whole according to their common meaning, not strictly for or against any party
and consistent with the provisions herein contained, in order to achieve the
objectives and purposes of these trusts. The use in this Deed of Trust
(including any Exhibit hereto) of the words “including”, “such as” or words of
similar import when following any general term, statement or matter shall not
be construed to limit such statement, term or matter to the specific items or

 19
 

matters, but rather shall be deemed to refer to all other items or
matters that could reasonably fall within the broadest possible scope of such
statement, term or matter; the use herein of the words “costs” or “expenses”
shall include the cost of title evidence and fees and costs of attorneys for
Beneficiary or Trustee; and the use herein of the word “prompt”, or “immediately”
in any form, or words of similar import, when used with reference to any notice
required to be given or act to be undertaken by Trustor shall mean notice given
or act performed not later than five (5) days after the occurrence of the
specified event for which notice or action is required, unless another time
period is made expressly applicable. If Trustor is composed of more than one
person or entity, then the obligations of Trustor under this Deed of Trust, the
Notes and under the other Loan Documents are joint and several; and each
covenant, warranty, representation and agreement of Trustor hereunder and
thereunder shall be deemed made by each such person or entity comprising
Trustor, both individually and collectively.

6.29         Severability. If any term of this Deed of
Trust, or the application thereof to any person or circumstances, shall to any
extent be invalid or unenforceable, the remainder of this Deed of Trust, or the
application of such term to persons or circumstances other than those as to
which it is invalid or unenforceable, shall not be affected thereby, and each
term of this Deed of Trust shall be valid and enforceable to the fullest extent
permitted by law.

6.30         Successors in Interest. Subject to the limitations
herein contained regarding Transfers, the terms, covenants and conditions
herein contained shall be binding upon and inure to the benefit of the parties,
and their respective heirs, successors and assigns, and shall also be binding
upon all tenants, lessees, occupants or other persons in possession of all, or
any part of, the Property, or holding under Trustor.

6.31         Estoppel Certificates; Information to Third Persons.

6.31.1      Execution of
Estoppel Certificates. Within ten (10) business days after Beneficiary’s
request therefor, Trustor shall deliver a duly acknowledged written statement
setting forth the amount of the indebtedness secured by this Deed of Trust,
stating either that no setoffs or defenses exist against the Deed of Trust, or,
if such setoffs or defenses are alleged to exist, the specific nature thereof,
and attesting to such other matters with respect to this Deed of Trust, or any
indebtedness secured hereby, which Beneficiary may request. Failure of Trustor
to execute, acknowledge and return such statement within the time period herein
specified shall be deemed an admission by Trustor that the information
contained in the statement is true and correct. Trustor acknowledges that any
statement rendered hereunder may be relied upon by any transferee or assignee
of Beneficiary, or any other person or entity participating in the Notes or
this Deed of Trust.

6.31.2      Trustor’s
Obligation to Supply Information to Third Persons. If, at any time,
Beneficiary desires to sell, transfer or grant a participation interest in all
or any portion of the Notes, this Deed of Trust or any other Loan Document to
any third person, Trustor shall furnish in a timely manner any and all
information concerning the Property and leases thereof, and concerning Trustor’s
and the Property’s financial condition, which information is requested by
Beneficiary or such person in connection with any such sale, transfer or
participation. All such financial information shall conform to the standards
set forth in Section 6.12 and shall otherwise be in such form, substance
and detail as Beneficiary, or such person, may require.

6.32         Commingling of Funds. No sums collected or
retained by Beneficiary shall be deemed to be held in trust; and Beneficiary
may commingle any and all such funds or proceeds with its general assets and
shall not be liable for the payment of any interest or other return thereon,
except to the minimum extent required by law.

6.33         Certain Warranties and Representations. All
representations and warranties contained in any Loan Document, and each
representation or warranty of Trustor incorporated by reference therein or
herein, and any modification or amendment thereof, shall survive the closing
and funding of the loan, shall not be deemed to have merged herein or in any
other document or instrument delivered concurrently herewith or hereafter, and
shall remain as continuing representations and warranties of Trustor

 20
 

so long as any portion of the indebtedness secured hereby remains
unpaid.

6.34         Trustor Waiver of Rights. Trustor waives,
to the extent permitted by law, (a) the benefit of all laws now existing or
that may hereafter be enacted providing for any appraisement before sale of any
portion of the Property, (b) all rights of redemption, valuation, appraisement,
stay of execution, notice of election to mature or declare due the whole of the
obligation secured hereby in the event of foreclosure of the liens hereby
created, (c) all rights and remedies which Trustor may have or be able to
assert by reason of the laws of the State of California pertaining to the
rights and remedies of sureties, (d) the right to assert any statute of
limitations as a bar to the enforcement of the lien of this Deed of Trust or to
any action brought to enforce the Notes or any other obligation secured hereby,
and (e) any rights, legal or equitable, to require marshalling of assets or to
require foreclosure sales in a particular order including any rights under
California Civil Code Sections 2899 and 3433. Beneficiary shall have the right
to determine the order in which any or all of the Property shall be subjected
to the remedies provided herein. Beneficiary shall have the right to determine
the order in which any of all portions of the obligations secured hereby are
satisfied from the proceeds realized upon the exercise of the remedies provided
herein. Nothing contained herein shall be deemed to be a waiver of the Trustor’s
rights under Section 2924c of the California Civil Code.

6.35         Effect of Waivers. Trustor acknowledges,
warrants and represents in connection with each waiver of any right or remedy
of Trustor contained in this Deed of Trust, the Notes, or any other Loan
Document, that it has been fully informed with respect to, and represented by
counsel of its choice in connection with, such rights and remedies, and all
such waivers, and after such advice and consultation, has presently and
actually intended, with full knowledge of its rights and remedies otherwise
available at law or in equity, to waive or relinquish such rights and remedies
to the full extent specified in each such waiver.

6.36         Late Charges; Past Due Rate; Prepayment. The
Loan Agreement may contain provisions imposing a late charge and past due rate
of interest if payments are not timely made, and prepayment restrictions and
premiums as more particularly described in such Loan Agreement.

6.37         Status of Trustee. Trustee shall be the
agent of Beneficiary and Trustor hereunder, but only upon and limited solely to
the rights, duties, powers, obligations, terms, covenants and conditions
contained in this Deed of Trust; and Trustee’s rights, duties and obligations
as agent hereunder shall be strictly limited to and construed in accordance
with the terms of this Deed of Trust, Beneficiary and Trustor acknowledging
their intent that no other right, duty or obligation shall be implied as a
result of the agency relationship created hereunder.

6.38         Governing Law. This Deed of Trust shall be
governed by and construed and enforced in accordance with the laws of the State
of California (without regard to conflicts of law), except where federal law is
applicable (including, without limitation, any applicable federal law
preempting state laws).

6.39         Notices. Except when otherwise required by
law, any notice which a party is required or may desire to give the other shall
be in writing and may be sent by personal delivery or by mail (either [i] by
United States registered or certified mail, return receipt requested, postage
prepaid, or [ii] by Federal Express or similar generally recognized overnight
carrier regularly providing proof of delivery), addressed as follows to
Beneficiary and as provided on the Addendum as to Trustor (subject to the right
of a party to designate a different address for itself by notice similarly
given at least 15 days in advance):

To Beneficiary:

Citibank, N.A.

201 West Lexington Drive

Sixth Floor

Glendale, CA 91203

Attention: Commercial Markets Group/Note Department

with a copy to:

 21
 

Citibank, N.A.

One Sansome Street,

21st Floor

San Francisco, California 94104

Attention: Commercial Markets Group

Any notice so given by mail shall be deemed to have been given as of
the date of delivery (whether accepted or refused) established by U.S. Post
Office return receipt or the overnight carrier’s proof of delivery, as the case
may be. Any such notice not so given shall be deemed given upon receipt of the
same by the party to whom the same is to be given. Trustor requests that a copy
of any notice of default and notice of sale hereunder by mailed to Trustor at
the address specified in the Addendum hereto.

6.40         Representation by Legal Counsel. Trustor
acknowledges that it has been advised by Beneficiary to seek the advice of
legal counsel in connection with the negotiation and preparation of the Loan
Documents. If Trustor has chosen not to obtain legal representation, whether
due to cost considerations or for other reasons, the lack of such
representation shall not furnish Trustor with any defense to the enforcement of
Beneficiary’s obligations under the Loan Documents.

6.41         Reimbursement of Expenses. Trustor shall
pay all expenses incurred by Beneficiary in connection with the making or
administration of the Loan, including reasonable fees and expenses of
Beneficiary’s attorneys, environmental, engineering and other consultants, and
fees, charges or taxes for the recording or filing of Loan Documents, audit
costs, attorneys’ fees and costs, and inspection fees, and fees and costs
relating to settlement of condemnation and casualty awards, and premiums for
title insurance and endorsements thereto.

6.43         Management. Beneficiary understands that
there is currently no property manager of the Property. Trustor agrees that
there shall not be a property manager of the Property (nor a change in any
manager of the Property) without the prior written consent of Beneficiary, to
be granted or withheld by Beneficiary in good faith. Trustor shall not
terminate, replace or appoint any manager or terminate, amend or enter into any
management agreement for the Property without Beneficiary’s prior written approval,
to be granted or withheld by Beneficiary in good faith. Each property manager,
if any, shall hold and maintain all necessary licenses, certifications and
permits required by law. Trustor shall fully perform all of its covenants,
agreements and obligations under any management agreement of the Property. Any
management agreement, if any, will be subordinated to Beneficiary’s rights
hereunder.

7.          Waiver
of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY LAW, TRUSTOR AND
BENEFICIARY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO
A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS DEED OF TRUST, THE LOAN, OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER
VERBAL OR WRITTEN) OR ACTION OF BENEFICIARY, TRUSTOR OR TRUSTEE OR ANY EXERCISE
BY ANY PARTY OF THEIR RESPECTIVE RIGHTS UNDER THE LOAN DOCUMENTS OR IN ANY WAY
RELATING TO THE LOAN OR THE PROPERTY. THIS WAIVER IS A MATERIAL INDUCEMENT FOR
BENEFICIARY TO MAKE THE LOAN TO TRUSTOR. NOTWITHSTANDING THE FOREGOING, ANY
CONTROVERSY HEREUNDER SHALL BE GOVERNED BY THE TERMS AND CONDITIONS OF THAT
CERTAIN ALTERNATIVE DISPUTE RESOLUTION AGREEMENT, DATED AS OF THE DATE HEREOF,
BY AND AMONG BORROWER AND LENDER.

[SIGNATURE ARE ON
FOLLOWING PAGE]

 22
 

IN WITNESS WHEREOF, Trustor has executed this Deed of
Trust on the day and year set forth above.

TRUSTOR PLEASE NOTE: IN THE EVENT OF YOUR DEFAULT,
THIS DEED OF TRUST AND APPLICABLE LAW PERMITS THE TRUSTEE TO SELL THE PROPERTY
AT A SALE HELD WITHOUT SUPERVISION BY ANY COURT AFTER EXPIRATION OF A PERIOD
PRESCRIBED BY LAW. SEE SECTION 6.21.1(e) ABOVE FOR A DESCRIPTION OF THIS
PROCEDURE. UNLESS YOU PROVIDE AN ADDRESS FOR THE GIVING OF NOTICE, YOU MAY NOT
BE ENTITLED TO OTHER NOTICE OF THE COMMENCEMENT OF SALE PROCEEDINGS. BY
EXECUTION OF THIS DEED OF TRUST, YOU CONSENT TO THIS PROCEDURE. IF YOU HAVE ANY
QUESTIONS CONCERNING IT, YOU SHOULD CONSULT YOUR LEGAL ADVISOR. BENEFICIARY AND
TRUSTEE URGE YOU TO GIVE BENEFICIARY PROMPT NOTICE OF ANY CHANGE IN YOUR
ADDRESS SO THAT YOU MAY RECEIVE ANY NOTICE OF DEFAULT AND NOTICE OF SALE GIVEN
PURSUANT TO THIS DEED OF TRUST.

	
  

  	
  “TRUSTOR”

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OMNIVISION TECHNOLOGIES, INC.,

  	
   

  
	
   

  	
  a Delaware corporation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James He

  	
   

  
	
   

  	
  Name:

  	
  JAMES HE 

  	
   

  
	
   

  	
  Title:

  	
  COO

  	
   

  

 

 23

	
  State of California

  	
  )

  	
   

  
	
   

  	
  )

  	
  SS.

  
	
  County of Santa Clara

  	
  )

  	
   

  

 

 

On March 16, 2007 before me, a notary public in and
for said State, personally appeared James He, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument, the person(s) or the
entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

 

	
  Signature

  	
  /s/ Ching-Ning S. Chang

  	
   

  	
  (Seal)

  	
   

  
	
   

  	
   

  	
   

  	
  [STAMP]

  
	
  Capacity of Signatory Notary Public

  	
   

  	
   

  

 

CALIFORNIA ALL-PURPOSE
ACKNOWLEDGEMENT

	
  State of California

  
	
   

  
	
  County of Santa Clara

  
	
   

  
	
  On March 16, 2007
  before me,

  	
  Ching-Ning S. Chang

  	
   

  	 

	
   

  	
  Name and Title of Officer (e.g., “Jane Doe, Notary
  Public”)

  
	
   

  	
   

  
	
  Personally appeared 

  	
  James He

  	
   

  	 

	
   

  	
  Name(s) of Signer(s)

  
								

 

	
  o personally
  known to me – OR - x proved
  to me on the basis of satisfactory evidence to be the person(s) whose 

  
	
   

  	
  name(s) is/are subscribed to the within instrument
  and acknowledged to me that he/she/they executed the same in his/her/their
  authorized capacity(ies), and that by his/her/their signature(s) on the
  instrument the person(s), or the entity upon behalf of which the person(s)
  acted, executed the instrument.

  

 

	
  

  	
  WITNESS my hand and official seal.

  
	
   

  	
  [STAMP]

  	
   

  
	
   

  	
  /s/ Ching-Ning S. Chang

  	
   

  
	
   

  	
  Signature of
  Notary Public

  
				

 

Exhibit “A”

Legal Description

EXHIBIT A

LEGAL
DESCRIPTION

PARCEL A:

PARCEL 1, SO DESIGNATED AND DELINEATED ON THE PARCEL MAP RECORDED
SEPTEMBER 27, 1985, IN BOOK 549 OF MAPS, PAGES 53, 54 AND 55, SANTA CLARA
COUNTY RECORDS.

TOGETHER WITH A NON-EXCLUSIVE EASEMENT FOR PEDESTRIAN AND VEHICULAR
INGRESS AND EGRESS OVER ALL WALKWAYS AND PAVED COMMON AREAS WITHIN PARCEL 2, SO
DESIGNATED AND DELINEATED ON SAID PARCEL MAP, AS PROVIDED FOR IN THE
DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS AND DECLARATION OF
EASEMENTS RECORDED DECEMBER 27, 1985 IN BOOK J560, PAGE 919, OFFICIAL RECORDS.

PARCEL B:

PARCEL ONE:

ALL OF PARCEL 2, AS SHOWN UPON THAT CERTAIN MAP ENTITLED, “PARCEL MAP
BEING A RESUBDIVISION OF ‘PARCEL A’ AS SHOWN UPON THAT CERTAIN PARCEL MAP
RECORDED IN BOOK 532 OF MAPS AT PAGE 48 AND 49, RECORDS OF SANTA CLARA COUNTY”,
WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF
SANTA CLARA, STATE OF CALIFORNIA ON SEPTEMBER 27, 1985 IN BOOK 549 OF MAPS, AT
PAGES 53, 54 AND 55.

PARCEL TWO:

A NON-EXCLUSIVE EASEMENT FOR PEDESTRIAN AND VEHICULAR INGRESS AND
EGRESS OVER ALL WALKWAYS AND PAVED COMMON AREAS WITHIN PARCEL 1, AS SHOWN ON
PARCEL MAP ABOVE REFERRED TO, AS PROVIDED FOR IN DECLARATION OF RESTRICTIONS
RECORDED IN BOOK J560 OF OFFICIAL RECORDS, PAGE 919.

APN: 104-13-094 (Affects: Parcel A) and 104-13-095 (Affects: Parcel B)

 1

Exhibit “B”

ADDENDUM
TO DEED OF TRUST

The following provisions are made a part of the Deed
of Trust with Security Agreement, Assignment of Leases and Fixture Filing (the “Deed of Trust”) to which this Addendum is
attached:

1.          Impounds
for Taxes and Insurance. The obligation to make payments under Section
6.5 shall apply only (a) if Trustor fails for any reason to make payment
prior to delinquency of any Taxes and Assessments under Section 6.3, or
(b) if Trustor fails for any reason to make payment prior to when due of any
premium for any policy of insurance carried under Section 6.4 (or fails
to provide timely evidence of such payment of taxes or insurance as provided
herein), or (c) at Beneficiary’s option exercised at any time during the
existence of any Event of Default.

2.          Additional
Essential Party. “Additional Essential Parties” shall mean OmniVision
Technologies (Hong Kong) Company Limited and OmniVision International Holding
Ltd.

3.          Notice.
The address of the Trustor for notice pursuant to Section 6.39 of the
Deed of Trust is as follows:

OmniVision Technologies, Inc. 

Attn: General Counsel 

1341 Orleans Drive 

Sunnyvale, CA 94089

4.          Payment
obligations under the Loan are absolute and unconditional without any right of
rescission, setoff, counterclaim or defense for any reason against Beneficiary.
Trustor is unconditionally and irrevocably obligated to make the payments
required under the Loan Documents notwithstanding any damage to, defects in or
destruction of the Property or any other event, including obsolescence of any
property or improvements.

Table of Contents

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  DEFINITIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  GRANT IN TRUST

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  ASSIGNMENT OF RENTS

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  OBLIGATIONS SECURED

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.1

  	
  Payment of Loan

  	
   

  	
  4

  
	
   

  	
   

  	
  4.2

  	
  Payment of Further Loans

  	
   

  	
  4

  
	
   

  	
   

  	
  4.3

  	
  Performance Under Loan Documents

  	
   

  	
  4

  
	
   

  	
   

  	
  4.4

  	
  Performance Under Interest Rate Agreements

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  SECURITY AGREEMENT AND FIXTURE FILING

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.1

  	
  Grant of Security Interest

  	
   

  	
  5

  
	
   

  	
   

  	
  5.2

  	
  Perfection

  	
   

  	
  5

  
	
   

  	
   

  	
  5.3

  	
  Remedies

  	
   

  	
  5

  
	
   

  	
   

  	
  5.4

  	
  Expenses

  	
   

  	
  5

  
	
   

  	
   

  	
  5.5

  	
  Place of Business

  	
   

  	
  5

  
	
   

  	
   

  	
  5.6

  	
  Fixtures

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  COVENANTS

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.1

  	
  Performance of Obligations

  	
   

  	
  5

  
	
   

  	
   

  	
  6.2

  	
  Title

  	
   

  	
  6

  
	
   

  	
   

  	
  6.3

  	
  Taxes and Assessments

  	
   

  	
  6

  
	
   

  	
   

  	
  6.4

  	
  Insurance

  	
   

  	
  6

  
	
   

  	
   

  	
  6.5

  	
  Impound Account

  	
   

  	
  8

  
	
   

  	
   

  	
  6.6

  	
  Liens and Encumbrances

  	
   

  	
  9

  
	
   

  	
   

  	
  6.7

  	
  Disposition of Insurance and Condemnation Proceeds
  and Damages

  	
   

  	
  9

  
	
   

  	
   

  	
  6.8

  	
  Maintenance and Preservation of the Property

  	
   

  	
  11

  
	
   

  	
   

  	
  6.9

  	
  Defense and Notice of Actions

  	
   

  	
  11

  
	
   

  	
   

  	
  6.10

  	
  Collection of Rents, Issues and Profits; Approval of
  Leases

  	
   

  	
  12

  
	
   

  	
   

  	
  6.11

  	
  Right of Inspection

  	
   

  	
  12

  
	
   

  	
   

  	
  6.13

  	
  Acceptance of Trust

  	
   

  	
  12

  
	
   

  	
   

  	
  6.14

  	
  Powers of Trustee; Indemnity

  	
   

  	
  12

  
	
   

  	
   

  	
  6.15

  	
  Substitution of Trustee

  	
   

  	
  13

  
	
   

  	
   

  	
  6.16

  	
  Acceleration Upon Sale or Further Encumbrance

  	
   

  	
  13

  
	
   

  	
   

  	
  6.17

  	
  Reconveyance

  	
   

  	
  14

  
	
   

  	
   

  	
  6.18

  	
  Defense and Indemnity Rights

  	
   

  	
  14

  
	
   

  	
   

  	
  6.19

  	
  Destruction of Note

  	
   

  	
  14

  
	
   

  	
   

  	
  6.20

  	
  Provisions Relating to Hazardous Materials

  	
   

  	
  14

  
	
   

  	
   

  	
  6.21

  	
  Default Provisions

  	
   

  	
  16

  
	
   

  	
   

  	
  6.22

  	
  Amendments

  	
   

  	
  19

  
	
   

  	
   

  	
  6.23

  	
  Consents

  	
   

  	
  19

  
	
   

  	
   

  	
  6.24

  	
  Further Assurances

  	
   

  	
  19

  
	
   

  	
   

  	
  6.25

  	
  Statement of Condition

  	
   

  	
  19

  
	
   

  	
   

  	
  6.27

  	
  Trustor, Beneficiary and Trustee Defined

  	
   

  	
  19

  
	
   

  	
   

  	
  6.28

  	
  Rules of Construction

  	
   

  	
  19

  

 

 

	
  

  	
   

  	
  6.29

  	
  Severability

  	
   

  	
  20

  
	
   

  	
   

  	
  6.30

  	
  Successors in Interest

  	
   

  	
  20

  
	
   

  	
   

  	
  6.31

  	
  Estoppel Certificates; Information to Third Persons

  	
   

  	
  20

  
	
   

  	
   

  	
  6.32

  	
  Commingling of Funds

  	
   

  	
  20

  
	
   

  	
   

  	
  6.33

  	
  Certain Warranties and Representations

  	
   

  	
  20

  
	
   

  	
   

  	
  6.34

  	
  Trustor Waiver of Rights

  	
   

  	
  21

  
	
   

  	
   

  	
  6.35

  	
  Effect of Waivers

  	
   

  	
  21

  
	
   

  	
   

  	
  6.36

  	
  Late Charges; Past Due Rate; Prepayment

  	
   

  	
  21

  
	
   

  	
   

  	
  6.37

  	
  Status of Trustee

  	
   

  	
  21

  
	
   

  	
   

  	
  6.38

  	
  Governing Law

  	
   

  	
  21

  
	
   

  	
   

  	
  6.39

  	
  Notices

  	
   

  	
  21

  
	
   

  	
   

  	
  6.40

  	
  Representation by Legal Counsel

  	
   

  	
  22

  
	
   

  	
   

  	
  6.41

  	
  Reimbursement of Expenses

  	
   

  	
  22

  
	
   

  	
   

  	
  6.43

  	
  Management

  	
   

  	
  22

  

 

 2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}]]