Document:

TERM LOAN AGREEMENT

 

THIS TERM LOAN AGREEMENT (“AGREEMENT”)
IS ENTERED INTO ON THIS 25th DAY OF JULY, 2012 BY AND BETWEEN, GE CF MEXICO, S.A. DE C.V., AS LENDER (“LENDER”)
AND NEXUS MAGNETICOS DE MEXICO, S. DE R.L. DE C.V., AS BORROWER ( “BORROWER”).

 

RECITALS 

 

I.             Borrower makes the following representations:

 

		(a)	It is a Mexican mercantile company legally in existence pursuant to the laws of Mexico;

 

		(b)	The execution and performance of this agreement does not violate (i) its bylaws, (ii) any contract,
agreement, license or order, (iii) any law, regulation, or order whether judicial or administrative;

 

		(c)	Its legal representatives possess sufficient and proper authority to bind it to the terms of this
agreement;

 

		(d)	As of the date hereof, there are no pending or threatened claims or proceedings, whether judicial
or extrajudicial, which affect or could affect the validity of this agreement; and

 

		(e)	The resources which it uses for its operations derive from legal means.

 

II.           Lender makes
the following representations:

 

		(a)	It is a Mexican mercantile company legally in existence pursuant to the laws of Mexico;

 

		(b)	The execution and performance of this agreement does not violate (i) its bylaws, (ii) any contract,
agreement, license or order, (iii) any law, regulation, or order whether judicial or administrative;

 

		(c)	Its legal representatives possess sufficient and proper authority to bind it to the terms of this
agreement;

 

Pursuant to the foregoing, the parties
agree as follows:

 

ARTICLES

 

FIRST.- Defined Terms.

 

 

“Asset or Assets”
means, with respect to any Person, the sum of their assets and rights, including but not limited to the plant, equipment, machinery,
and real property.

 

“Affiliate”
means, with respect to any Person, any other Person which directly or indirectly controls or
is controlled by or is under common control with said Person. For purposes of this Agreement, control means the authority to determine
the administration and the policies of said Person, directly or indirectly, whether by means of controlling voting stock, of having
the authority to designate most of the members of the board of administration by contract or any other manner.

 

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“Governmental
Authority” means any agency which exercises administrative, executive, legislative, judicial or regulatory authority
of or relating to the government.

 

“Trust Assets”
means the machinery contributed in accordance with the Trust Agreement to secure the Loan.

 

“Substantially
Adverse Change” means any change of any nature which substantially and adversely affects the financial or operating condition
or the results, business or property of said Person, as well as the fact that this Agreement or any Loan Document becomes illegal,
null or not exercisable, and as a result of such, it would be impossible for the Borrower to
perform its obligations in accordance with this Agreement or any Loan Document.

 

“Net Worth”
means with respect to any Person, the difference between the Assets of said Person, and the Total Liabilities of said Person.

 

“Trust Agreement”
means the irrevocable guaranty trust agreement, which is or shall be executed by the Borrower and Jefferson Electric, Inc., as
trustors, Banco Invex, Sociedad Anónima, Institución de Banca Múltiple, Invex Grupo Financiero, Fiduciario,
as trustee, and Lender as primary trust beneficiary, by means of which the Borrower and Jefferson Electric, Inc. transfer title
to the Trust Assets in favor of the trustee, in order to guaranty each and every one of the Secured Obligations.

 

“Loan”
means the term loan that the Lender shall put at the disposition of the Borrower during the Availability Period, in one or several
disbursements of Funding, pursuant to the terms of this Agreement, in a total principal sum of up to $1,652,805.00 U.S.
Dollars (One Million Six Hundred Fifty-two Thousand Eight Hundred Five 00/100 Dollars); with the understanding that said
amount does not include any amounts of interest, commission, expenses or any other amounts (aside from the unpaid principal balance)
payable by the Borrower to the Lender in accordance with this Agreement, the Promissory Notes or any
Loan Documents.

 

“Work Day”
means any day that is not Saturday or Sunday, a holiday or any other day that the banks located in New York City, New York, United
States of America, or Mexico City, Federal District, Mexico are authorized or required to close.

 

“Funding”
means each one of the disbursements of money which the Borrower makes and adds to the Loan during the Availability Period, which
collectively make up the Loan.

 

“Loan Documents”
means this Agreement, the Promissory Notes, the Trust Agreement, as well as any other contract, agreement, document, instrument
or certificate relating to the same or which shall be signed and delivered to the Lender in accordance with the same.

 

“Dollars”
or “U.S.D. $” means Dollars, legal currency of the United States of America.

 

“Cash Equivalent”
means bank deposits and other accounts receivable with a maximum term of 90 days or other values which can be sold within thirty
(30) days.

 

“Date of Funding”
means the date on which the Borrower makes the disbursements of Funding of the Loan within the Availability Period as long as each
and every one of the conditions in Clause Eleven of this Agreement has been satisfied.

 

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“Date of Execution”
means the date of execution of this Agreement.

 

“Due Date of
Interest Payment” means the due date of interest payment of any Funding which shall occur on the 1st day of each calendar
month, beginning with the 1st day of the month following the date of the respective Funding.

 

“Capital Expenditures”
means with respect to any person and for any period, the sum of all expenses not financed during said period, that pursuant to
GAAP, are required to be included or should be reflected in the balance sheet of such Person with respect to the equipment, Assets,
real estate or improvements, or for replacement or substitution of such or additions to the same.

 

“Encumbrance”
means, with respect to any Asset, any mortgage, encumbrance, pledge, trust, real guaranty, affectation
or limitation of ownership of any kind with respect to said Asset. It shall be understood that an asset is subject to an Encumbrance
if it has been acquired by means of a conditional purchase agreement, when the condition has not been satisfied, a purchase agreement
with a reservation of ownership so long as the reservation continues, a financial lease so long as the option to acquire the asset
has not been exercised or a similar agreement regarding said Asset which means that ownership has not been acquired in an irrevocable
and unconditional manner.

 

“Taxes”
means the contributions, advantages and other accessories of the same, as defined in articles 2 and
3 of the Fiscal Code of the Federation and which are determined by the treasury authorities in Mexico, as well as any other tax,
contribution, or fiscal charge which is determined by the fiscal authorities or any jurisdiction other than Mexico; with the understanding
that only for purposes of Clause Eighth, the term “Taxes” excludes income taxes or other taxes on the world-wide
income of Lender.

 

“Investments”
means any advance, loan, expenditure, extension of credit or contribution to capital or acquisition of shares, membership interests
or debt instruments or long term values or any other interest or any other long-term investment in any Person.

 

“Secured Obligations”
means each and every one of the payment or other obligations of the Borrower arising from or relating to the Loan Documents.

 

“Promissory
Note” means each promissory note executed by Borrower in favor of Lender, documenting the obligation of the Borrower
to pay the Lender the principal amount of each disbursement of Funding and the corresponding interest, utilizing the form of the
promissory note attached hereto as Exhibit “A”.

 

“Total Liabilities”
means at any time and in accordance with GAAP, the Assets less Net Worth of the respective Person.

 

“GAAP”
means at any time, the generally accepted accounting principles in the United States of America which are effective on such date
and applied consistently.

 

“Availability
Period” means the period of time in which the Borrower may make a disbursement of Funding of the Loan subject to the
terms and conditions of this Agreement, which begins on the Date of Execution and ends on July 30, 2012.

 

“Interest Period”
means, with respect to any Funding, (a) initially the period which began on the Date of Funding applicable to said disbursement
of Funding and ends on the last day of the calendar month immediately following the Date of Funding; and (b) thereafter, each period
that starts on the last day of the immediately preceding Interest Period and which ends one month after said date; with the understanding
that no Interest Period shall end after the last Due Date of Principal Payment of the respective disbursement of Funding.

 

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“Person”
means any individual or entity, trust, Governmental Authority or any other entity of any other nature.

 

“Interest Rate”
means, with respect to each Interest Period, an annual rate equivalent to 6.93%.

 

“LIBOR Rate”
means, on the date of the corresponding determination, the applicable interbank rate of London for deposits in Dollars for a one
(1) one month period, that appears in the Wall Street Journal or in the absence on Page 3750 of the Tielnate Service (or any other
page that replaces Page 3750) as of 11:00 a.m. London time of the first day of any Interest Period;

 

SECOND.- Issuance of the Loan.
In accordance with the terms of this Agreement and subject to the satisfaction of the conditions mentioned herein, Lender agrees
to put the Loan at the Borrower’s disposition, in one or several disbursements of Funding, on any Work Day within the Availability
Period; with the understanding that (i) the principal amount of the Loan does not include any amount whatsoever for interest, commissions,
expenses or any other amounts (other than the outstanding principal balance) payable by the Borrower
to the Lender in accordance with this Agreement or the Promissory Notes; (ii) the principal amount of the Funding shall at no time
exceed the amount of the  Loan; (iii) Borrower shall not dispose, again, of any principal amount of the Loan which had already
been paid to the Lender (whether on the maturity date, upon acceleration or in any other manner) in accordance with this Agreement;
(iv) once the Availability Period has terminated, any unused portion of the Loan shall be cancelled as well as the rights of the
Borrower to utilize said portion of the Loan; and (v) Borrower agrees to invest such amount of the Loan exclusively to extend a
loan to its Affiliate, Jefferson Electric, Inc., so that it can pay off the entire balance of a Term Loan issued by Johnson Bank
and make a payment in its capacity as borrower, in accordance with a Revolver Note, such loans which were granted by Johnson Bank
to Jefferson Electric, Inc., being described and defined in that certain Loan and Security Agreement dated January 2, 2008, as
such agreement has been modified and amended from time to time. The funding obtained from such Term Loan and said Revolver Note
were utilized by Jefferson Electric, Inc. principally to provide the required equipment, working capital and to finance other aspects
of the maquiladora operations of Nexus Magnéticos de México, S. de R.L. de C.V. in Reynosa, Tamaulipas, México.

 

THIRD.- Terms and Conditions
for the Request for Funding. (a) The Borrower shall, within the Availability Period and on the day that the Borrower would
like to receive a disbursement of Funding of the Loan or prior to such period if the parties agree to something different (hereinafter
the “Date of Funding”), submit a written request to Lender (the “Request for Funding”), which shall
be prepared in accordance with the form attached hereto as Exhibit “B”.

 

(b)          If all of the conditions precedent
in Article Eleven of this Agreement have been performed and satisfied, the Lender shall put at the Borrower’s disposition,
on the Date of Funding, the principal amount of the disbursement of Funding of the Loan requested pursuant to said Request for
Funding by means of an electronic transfer of funds in Dollars immediately available and in the bank account of the Borrower listed
in the Request for Funding.

 

(c)          Each Request for Funding shall be
irrevocable and binding on the Borrower, and the Borrower shall reimburse the Lender for expenses, if any, incurred by the Lender
if the Borrower does not utilize the portion of the Loan which was requested on the Date of Funding stated in the respective Request
for Funding (including if such disbursement of Funding cannot be made because the Borrower did not satisfy one of the conditions
precedent in Clause Eleven of this Agreement) such as amounts paid or payable by Lender to finance such Funding.

 

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FOURTH.- Documentation and Payment
of the Disbursements of Funding. (a) Each disbursement of Funding made by Lender to Borrower pursuant to this Agreement shall
be evidenced by means of a Promissory Note signed by Borrower in favor of Lender. Borrower acknowledges and agrees that the execution
of a Promissory Note shall not be considered as payment of the Funding.

 

(b)          Borrower
shall pay Lender the total principal balance of the Funding of the Loan in sixty (60) consecutive monthly amortized payments
in the amounts and on the dates indicated in the respective Promissory Notes (each one being a “Due Date of Principal Payment”).

 

FIFTH.- Advance Payments of the
Loan. Once the Availability Period has expired, Borrower may, at any time thereafter, make advance payments on the Loan, whether
total or partial payments, by means of an irrevocable notice delivered by Borrower to Lender at least ninety (90) calendar days
in advance of such advance payment. Such notice shall specify the date and amount of such advance payment toward the Loan (“Notice
of Advanced Payment”). Notwithstanding the foregoing, in the event that Borrower desires to make an advance payment within
a period of time of less than ninety (90) calendar days from the date of the Notice of Advanced Payment, Borrower shall specify
the desired date of payment in the Notice of Advanced Payment and Lender shall exercise its best efforts to provide Borrower with
all required information to accept such advanced payment within the period specified by Borrower. Such advanced payment shall be
payable and may be demanded on a Due Date of Interest Payment; with the understanding that:

 

		(i)	any advanced payment must be at least $100,000.00 US Dollars (One Hundred Thousand 00/100
Dollars or in multiples of $100,000 US Dollars (One Hundred Thousand 00/100 Dollars) in excess of such amount;

 

		(ii)	along with such advanced payment, Borrower must also pay Lender all interest accrued but not paid
on the principal amount of the Loan on the date of such payment; and

 

		(iii)	Along with the advanced payment, Borrower shall also pay Lender the costs of breaking the sources
of financing for the Lender, if such is the case, and a prepayment commission of (w) 3% of the principal amount of the Loan
paid in advance on such date in the event that such advanced payment is made within the first year of the Date of Execution of
this Agreement; (x) 2% of the principal amount of the Loan paid in advance on such date in the event that such advanced
payment is made within the second year of the Date of Execution of this Agreement; (y) 1% of the principal amount of the
Loan paid in advance on such date in the event that such advanced payment is made within the third year of the Date of Execution
of this Agreement; and (z) 0.5% of the principal amount of the Loan paid in advance on such date in the event that such
advanced payment is made within the fourth year of the Date of Execution of this Agreement. There will be no commission due for
an advanced payment made within the fifth year of the Date of Execution of this Agreement.

 

Borrower shall pay Lender, for
cost of breaking the funding, an amount equivalent to the difference between: (i) the net present value of the outstanding balance
of the amortizations of principal and interest on the Loan, at the LIBOR Rate which is published on the date that the corresponding
advanced payment is made; less (ii) the net present value of the outstanding balance of the amortizations of principal and interest
on the Loan, at the LIBOR rate which is published on the corresponding Date of Funding; with the understanding that costs of breaking
funding are only incurred when the calculation mentioned above results in a positive number.

  

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SIXTH.- Interest. (a) The
outstanding principal balance on the Funding of the Loan shall bear interest as of the corresponding Date of Funding and until
the date that the unpaid principal balance of the disbursements of Funding are paid in full, at the applicable Interest Rate, which
shall be payable on each Due Date of Interest Payment, plus Taxes which are incurred. Upon receiving such payments, Lender shall
issue receipts to Borrower that comply with all applicable fiscal requirements and all applicable Legal Provisions.

 

(b)          The amount of any matured, unpaid
principal from any Funding of the Loan or of any other amount (excluding taxes) which Borrower owes Lender in accordance with this
Agreement or the Promissory Notes, shall accrue default interest from the date following the date of maturity until the date that
said amounts are paid in full (during each day that such amount is unpaid), at an Interest Rate of 0.07% (zero point zero seven
percentage points) per day. The default interests shall be payable on demand, along with the taxes incurred, if any.

 

(c)          All interest due and payable in
accordance with this Agreement or the Promissory Notes shall be calculated based on a three hundred sixty (360) day year and a
thirty (30) day month.

 

SEVENTH.- Payments. (a) All
payments to be made by Borrower to Lender pursuant to this Agreement and the Promissory Notes shall be made without offset, deduction,
or withholding of any kind, prior to 11:00 am (Mexico City time) on the date that such payments are due in accordance with this
Agreement and the Promissory Notes, in Dollars and in immediately available funds, by means of deposit
in or electronic transfer of funds to the Lender’s account in Dollars.-50257541, ABA 021001033 in Deutsche Bank Trust
Company Americas, in New York City, New York, United States of America (hereinafter “Lender’s Account”),
or in any other manner or place of which Lender notifies Borrower in writing.

 

(b)          In the event that a payment due
date under this Agreement or the Promissory Notes falls on a day that is not a Work Day, then such payment shall be due on the
Work Day immediately prior.

 

(c)          The parties agree that all payments
made pursuant to this Agreement or any Loan Document shall be make exclusively by means of electronic transfers from loan institutions
or international bank institutions or by means of check deposits, both from an account in the name of Borrower, and that no cash
payments shall be accepted or payments made by means of checks issued by a third party (not Borrower) or transfers from money exchange
businesses.

 

EIGHTH.- Taxes. (a)Principal,
interest and all amounts payable by Borrower pursuant to this Agreement, the Promissory Note or any other Loan Document, shall
be made without any deductions for any Taxes due on such amounts. If at any time any Governmental Authority imposes, determines
or charges any Taxes on this Agreement, the Promissory Note or any other Loan Document, or on the amounts payable by Borrower pursuant
to his Agreement, the Promissory Note or any other Loan Document, Borrower shall (i) make prompt payment to such Governmental Authority,
on behalf of Lender, of the amount of such Tax, (ii) make prompt payment to Lender for additional amounts required to ensure that
Lender receives that full amount that it would have received if such Taxes had not been paid, and (iii) immediately deliver to
Lender the original receipts and other satisfactory evidence of the payment of any Tax.

 

(b)          Lender
shall immediately notify Borrower of any requirement, notice, demand for payment or any other notice that it receives from any
authority relating to any Taxes, so that Borrower can attend to such requirement, notice or demand for payment promptly and pay
said Tax and hold Lender free of said requirement, notice or demand, with the understanding that, upon prior written request
by Borrower, Lender shall deliver to Borrower any document that Lender possesses and which Borrower requires with respect to any
proceeding relating to said requirement, notice or demand for payment.

 

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(c)          Borrower’s obligations under
this Article shall remain in full force and effect for 5 years from the date of the corresponding fiscal loan.

 

NINTH.- Commissions. Borrower
shall deduct from the Loan to be granted to Lender, the following Commissions, which Borrower shall retain as payment:

 

		(a)	One the Date of Execution, an initiation commission of $16,528.05 US Dollars (Sixteen Thousand
Five Hundred Twenty-Eight and 05/100 Dollars), corresponding to 1% (one percent) of the total amount of the Loan, plus the value
added tax.

 

Upon withholding or receipt of payment
for any commission due pursuant to this Article Nine, Lender shall issue an invoice to Borrower which complies with all applicable
fiscal requirements and all applicable Legal Provisions.

 

TENTH.- Legal Requirement; Illegality;
Indemnification. (a) If after the Date of Execution (1) there is a modification to or passage of any law, regulation, circular,
decree or any other legal provision which is obligatory for Lender or for any of its offices which handle the administration and
financing of the Loan ( “Legal Provisions”); or (2) the interpretation of the Legal Provisions changes, and as a result
it is illegal for Lender to Fund the Loan or to legally maintain the Loan, the parties will negotiate in good faith beginning on
the Work Day following the date on which the Lender notifies the Borrower in writing that one of the conditions in items (1) or
(2) has occurred, so that within thirty (30) calendar days (“Negotiation Period”) the terms and conditions of the Loan
or this Agreement can be modified as necessary in order to eliminate such illegality. If the parties do not reach an agreement
on the modification of the Loan or this Agreement within the Negotiation Period, Borrower agrees, upon the request of Lender, to
pay, in advance, the unpaid balance of the Loan (without payment of the advanced payment commission referenced in section (iii)
of the first paragraph of Article Fifth of this Agreement), along with the accrued interest and the Lender’s costs of breaking
the source of financing, if any, within one hundred and twenty (120) calendar days following the date on which the Negotiation
Period ends. Likewise, if the Availability Period has not expired, the obligations of the Lender to Fund the Loan shall expire
without notice or liability to Lender.

 

(b)          If after the Date of Execution,
any Legal Provision is modified or the interpretation of any Legal Provision is changed by any competent Governmental Authority
or if any event not caused by Lender (subject or not to Borrower’s control) and as a result of any of the foregoing, Lender’s
costs of Funding or maintaining the Loan, or if the amounts received or to be received by Lender are decreased, as a result of
1) Lender being subjected to a tax of any kind whatsoever with respect to this Agreement or the Loan Documents or a change in the
basis of taxation to Lender of principal, fees, interest or, any other amount payable hereunder or under the Loan Documents (except
for changes in the rate of tax on the overall net income of Lender by the jurisdiction in which it maintains its principal office);
2) any additional reserve, special deposit, assessment or similar requirement being imposed on Lender; or 3) any other condition
being imposed on Lender with respect to this Agreement or any other Loan Document, Borrower shall pay, upon Lender’s written
request, on the last day of the effective Interest Period, the additional amounts required to compensate Lender for said increase
in costs or decrease in revenue. Lender shall specify the causes of the increase in costs or decrease in revenues in the written
request by Lender referenced in this Article Tenth, subsection (b), as well as the respective calculations, which shall be binding
on Borrower, except for a manifested error. Borrower may at its option exercisable in its sole discretion upon receipt of any such
written request by Lender make a total or one or more partial advance payments on the Loan in accordance with the provisions of
Article Fifth of this Agreement, provided, however, that i) such advanced payment does not necessarily have to be payable on a
Due Date of Interest Payment; ii) the minimum advance period for delivery of the notice of Advanced Payment shall be thirty (30)
calendar days, or less, if so specified in Borrower’s notice, subject to Lender’s ability to provide any required information
and accept the advanced payment in such shorter period in the exercise of its best efforts; and iii) provided further, that the
provisions of subparagraph i) and iii) of Article FIFTH shall not apply and accordingly, the Lender acknowledges that no prepayment
penalty of any kind or character will apply if Borrower elects to make a total advance payment or a series of partial advance payments
in view of Lender’s written request for additional amounts required to compensate Lender for an increase in costs or decrease
in revenue under this Article Tenth.

 

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(c)          Lender shall make all commercially
reasonable efforts to avoid an illegality or increase or costs or decrease in revenue, by means of a change in administrative offices
of the Loan, without any cost to Lender

 

ELEVENTH.- Conditions Precedent
to Funding the Loan. The parties expressly agree that the obligation of the Lender to put the Loan at the Borrower’s
disposition and the Borrower’s right to the first disbursement of Funding of the Loan pursuant to this agreement are conditioned
upon the total and timely completion and satisfaction (in a manner acceptable to Lender) of the following conditions precedent:

 

		(a)	Security. On the Date of Execution and at any time thereafter upon the request of Lender,
Borrower shall issue the security in accordance with Article Twelfth of this Agreement or any Loan Document; with the understanding
that the Trust Assets shall be subject to a security interest given by Borrower in favor of Lender no later than the Work Day following
the respective Date of Funding the Loan.

 

		(b)	Loan Documents. On the Date of Execution Lender shall have received the following from Borrower:

 

		(i)	An original of this Agreement, signed by Borrower.

		(ii)	An original of the Promissory Note, signed by Borrower.

		(iii)	An original of the Trust Agreement.

 

		(c)	Financial Statements. On or prior to the Date of Execution, Lender shall have received the
following from Borrower:

 

		(i)	a copy of the audited financial statements of Jefferson Electric, Inc.
for fiscal year 2011, including the notes on the same, the general balance, the statements of results, the statement of changes
in net worth and the statement of changes in the financial situation for said fiscal year, if applicable; and

 

		(ii)	a copy of the quarterly unaudited financial statements of Jefferson
Electric, Inc. through March 31, 2012, including the general balance, the statements of results (including the amount of
depreciation and amortization), the statement of changes in the financial situation for said period,
establishing comparative figures with the same period of the preceding fiscal year, certified by the principal financial officer
of Jefferson Electric, Inc., as complete, correct and adequate in all important aspects, as being
the financial situation of Jefferson Electric, Inc., and as being up to date (subject to the normal audit adjustments at year end).

 

		(d)	Absence of an Event of Default. On and after the Date of Funding and Event of Default shall
not occur or continue.

 

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		(e)	Insurance Policies. On the Date of Funding, Lender shall have received from Borrower a copy
of the insurance policies maintained by Borrower in accordance with the terms of this Agreement as well as in relation to Trust
Assets which are given as security for this Loan, with endorsements in favor or Lender as a preferred beneficiary.

 

		(f)	Request for Funding. On the Date of Funding Lender shall have received from Borrower one
Request for Funding for the Funding of the Loan which the Borrower desires to make.

 

		(g)	Promissory Note. On the Date of Funding Lender shall have received from Borrower the original
Promissory Note signed by Borrower in favor of Lender, documenting the amount of the first disbursement of Funding of the Loan.

 

		(h)	Commissions; Fees and Expenses. On the Date of Execution Lender shall have received from
Borrower payment for (1) all of the commissions described in Article Ninth of this Agreement, (2) all costs and expenses of the
Lender relating to the issuance, administration, processing and implementation of the Loan, including expenses relating to appraisals
and environmental studies or engineering and (3) all expenses and legal fees of advisors of Lender, which the Lender hereby acknowledges
having received to its complete satisfaction.

 

		(i)	Other Documents. On the Date of Funding, Lender shall have received from Borrower all other
documents and authorizations which are reasonably required in writing by Lender in relation to this Agreement and the other Loan
Documents.

 

TWELFTH.- Pledge of Cash.
As security for the full and timely payment of each and every one of the Secured Obligations, and in accordance with section I
of article 334 of the General Law of Instruments and Credit Transactions, Borrower gives, in favor of Lender, a pledge on cash
(“Pledge of Cash”) in the amount of $165,280.50 US Dollars (One Hundred Sixty-five Thousand Two Hundred
Eighty and 50/100 Dollars), which Borrower herein retains by means of a deduction of such sum from the Loan to be granted by Lender
to Borrower. The Pledge of Cash shall be transferable property in terms of article 336 of the General Law of Instruments and Credit
Transactions. Borrower expressly agrees and accepts that the Pledge of Cash (a) will not generate interest and may be comingled
with the general funds of the Lender in the manner in which the Lender deems reasonable; and (b) it
will not release, reduce or in any way modify the obligations of the Borrower (whether of payment or of any other nature) in accordance
with this Agreement, the Promissory Notes or any other Loan Document, nor cure any default by Borrower based on the same. Borrower
expressly and irrevocably authorizes Lender to apply the Pledge of Cash to the payment of any past due obligation of the Borrower
in accordance with this Agreement, the Promissory Notes or any other Loan Document. In accordance with article 337 of the
General Law of Instruments and Credit Transactions, the parties agree that the execution of this Agreement shall serve as a receipt
by the Lender of the Pledge of Cash. The Pledge of Cash created
in this Article has been issued in accordance with section I of article 334 of the Law and it shall be governed by the provisions
contained in Title Two Chapter IV Section Sixth of said Law. Likewise, Borrower and Lender acknowledge and agree that the provisions
contained in Title Two Chapter IV Section Seventh of the Law shall not apply to this Agreement. In the event Lender applies part
of the Pledge of Cash pursuant to this paragraph, Borrower shall within ten (10) Work Days following
the date the Pledge of Cash was applied to the past due payment, restore an additional amount,
until the total amount of the Pledge of Cash is equal to the amount indicated in this Clause
Twelfth. Once each and every one of the Borrower’s obligations, pursuant to this Agreement, the
Promissory Notes or any Loan Document have been performed in their totality and subject to there being no default with respect
to the same, Lender shall reimburse to Borrower any remaining balance of the Pledge of Cash within the ten (10) Work Days following
the date of full performance of each and every one of said obligations.

 

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THIRTEENTH.- Obligations to be
Performed. From the Date of Execution and until such time as (1) each and every one of the disbursements
of Loan Funding have been paid, in their entirety; and (2) each and every one of the obligations arising from, relating to or in
accordance with this Agreement, the Promissory Note or the other Loan Documents have been satisfied and completed in their entirety,
the Borrower agrees (unless Lender has agreed otherwise), to:

 

(a)          Information. Deliver to Lender:

 

		(1)	as soon as possible, within five (5) Work Days following the occurrence
of any Event of Default, a certification signed by the principal financial officer of the Borrower, with a description of the
nature and scope of the same, as well as the actions or measures taken or proposed in order to cure said Event of Default; and

 

		(2)	as soon as it is initiated, but in all events within five (5) Work Days
following the summons or notice of any action, demand or proceeding in which the Borrower is involved and which it has or
which can be expected to have with the passage of time, a Substantially Adverse Change in the Borrower, a
certification signed by an authorized officer of the Borrower, with a description of the nature and scope of said action,
demand or proceeding and the actions or measures taken or proposed with respect to the same.

 

		(b)	Accounting; Inspection. Keep and maintain adequate books and accounting ledgers in which
complete, true and correct entries shall be made in accordance with GAAP. Lender (or any person
or persons designated by Lender) shall have the right to visit any business place of the Borrower, once a year, during Work Days
and during regular office hours, by means of at least five (5) days advance written notice to borrower, when it is reasonably necessary,
(except in the event of an existing Event of Default, in which case advance notice shall not be required and to the extent that
it be reasonably necessary, Lender [or any person or persons designated by Lender] shall have the right to visit any business place
of the Borrower, in case that an Event of Default occurs or continues, during Work Days and during regular office hours), without
interfering with or hindering the operations of the Borrower, to examine, inspect and review all and any part of the assets, books,
ledgers, or any other information of Borrower, being able to obtain copies of any of the Borrower’s information with respect
to said property or business; with the understanding nonetheless that each and every one of the reasonable costs and expenses,
as evidenced by means of corresponding receipts and/or documentation, arising from or related to the foregoing shall be paid exclusively
by Borrower.

 

		(c)	Corporate Situation; Rights; Authorizations. Maintain in full force and effect its legal
existence and corporate organization as a Mexican mercantile company, as well as all of the rights (whether from statutes or laws),
licenses, authorizations, permits, notices, registrations and franchises which are considered relevant for its respective businesses.

 

		(d)	Compliance with Laws. Observe and comply with all applicable
laws, regulations, circulars, orders, decrees, and other rules, as well as with all applicable judgments,
orders or restrictions imposed by any Governmental Authority.

 

		(e)	Taxes. Present on time and in correct form, each and every Taxes return which shall be filed
by Borrower in accordance with applicable legislation and pay, in its entirety, all Taxes, except for Taxes which are contested
in good faith by means of appropriate proceedings and for which adequate reserves have been established in accordance with applicable
law.

 

    	10

    	 

    
 

		(f)	Maintenance of Trust Assets; Insurance. Obtain and maintain
adequate insurance policies with nationally or internationally recognized insurance companies, with respect to all of its Assets,
covering risks and for the amounts required in accordance with good business practices, considering the nature of the business
they conduct and the location of its Assets; with the understanding that as relates to the insurance policies relating to the Trust
Assets, Borrower shall notify the corresponding insurance companies in accordance with articles 109 and 110 of the Insurance Contract
Law, indicating that said Trust Assets have been given as security for the Loan and therefore, such policies shall be endorsed
in favor of Lender (or the Person indicated by Lender) for up to the total amount of the unpaid balance of the Loan and its accessories.

 

In the event that Borrower does
not obtain the insurance policies pursuant to the preceding paragraph, Lender may, but is not obligated to, obtain such insurance
policies and pay the corresponding premiums, and Borrower shall reimburse Lender for the expenses of paying such insurance premiums
within five (5) Work Days following the date that Lender requests the reimbursement in of the premiums in writing. In the event
Borrower does not pay Lender any amount due in accordance with this paragraph, Borrower shall pay default interest upon such amounts
at the Interest Rate agreed upon in subsection (b) of Article Sixth of this Agreement.

 

		(g)	Evidence of Filing of the Security Interests; Defense and Perfection
of the Security Interest. (1) Deliver to Lender as soon as possible, within ninety (90) calendar days following the date of
execution of the Trust Agreement, the original first testimony of the deed which contains and evidences such Trust
Agreement with the seal or proof of filing from the Sole Registry of Security Interests in Personal Property, whichever applies;
(2) defend the ownership of the Trust Assets given to secure the Loan in favor of the Lender in accordance with the Loan
Documents, as well as the rights of the Lender arising from the Loan Documents; (3) execute and deliver to Lender those documents,
and undertake any action that is reasonably necessary, that Lender requests in relation to the Trust
Agreement in order to perfect, protect, and maintain the security established in accordance with the
Trust Agreement, and (4) pay all costs and expenses, fees and filing fees arising from or in relating to the issuance and
perfection of the security interests of the Loan or, the defense of the Trust Assets or rights which form part of the security
for the Loan, given in accordance with the Trust Agreement.

 

		(h)	Additional Acts. Execute and deliver to Lender those documents
and undertake any action with respect to this Agreement or with the other Loan Documents, which Lender requests, in a reasonable
manner, in order to perfect, protect and maintain the rights or interests of the Lender in accordance with this Agreement or in
accordance with any other Loan Document, as well as pay all costs arising from or relating the foregoing.

 

FOURTEENTH.- Prohibited Actions.
As of the Date of Execution and until such time as (1) each and every one of the disbursements of Loan
Funding have been paid, in their entirety; and (2) each and every one of the obligations arising from, relating to or in accordance
with this Agreement, the Promissory Note or the other Loan Documents have been satisfied and completed in their entirety, the Borrower
agrees (unless Lender has not agreed otherwise), to: 

 

		(a)	Merger; Spin-off. Not to spin-off, merge, reorganize or consolidate with any other Person,
not proceed to dissolution or liquidation, without prior written authorization from Lender, except for those mergers, reorganizations
or consolidations between Borrower and its Affiliates.

 

		(b)	Changes in the Nature of its Business. Not conduct or allow and change in the nature of
or corporate purpose of its business without prior written authorization from Lender.

 

    	11

    	 

    
 

		(c)	Sale of Assets. Not to sell, lease, assign, transfer or in any other way dispose of its
Assets (tangible or intangible), whether present or future, without the prior written consent of Lender,
except as follows:

 

		(1)	the sale or disposition in the ordinary course of business of (i) obsolete or worn out Assets;
and (ii) other obsolete Assets for the renovation of the same;

 

		(2)	the sale of inventory in the ordinary course of business; and

 

		(3)	sales between Borrower and its Affiliates in the ordinary course of business.

 

		(d)	Encumbrances. Not create, establish or permit the existence of
any Encumbrance on its property, real property or assets, whether present or future, without the prior written authorization
of Lender, except for those Encumbrances with respect to Taxes which are not past due or which are contested
in good faith by means of appropriate proceedings and for which corresponding reserves have been established in accordance with
applicable law.

 

		(e)	Liabilities. Not create, issue, incur, assume or permit the existence
of Liabilities without the prior written authorization of Lender, except for those Liabilities incurred in the ordinary
course of business of Borrower. 

 

		(f)	Distributions of Profit. Not declare or distribute profit or
reimburse capital to its members or authorize or effectuate any other distribution, payment or delivery of property or cash
to its members, nor amortize, withdraw, buy or in any other manner acquire, directly or indirectly,
for any price, membership interests of any class of its capital or interests of any of its members
or partners, now outstanding or which may be issued in the future, nor create or reserve funds for any
of the aforementioned purposes, without prior written notice delivered to Lender at least five (5) days in advance.

 

		(g)	Investments. Not purchase, maintain or in any way make any Investment
when such amount exceeds Two Hundred Thousand 00/100 Dollars ($200,000.00 US Dollars), in any Person, without the prior
written authorization of Lender.

 

		(h)	Capital Expenditures. Not incur, make, or in any other way undertake
any Capital Expenditures, without the prior written authorization of Lender, except those which arise in the ordinary course
of business of Borrower. 

 

		(i)	Transactions with Affiliates. Not enter into any transaction
with Affiliates, without the prior written authorization of Lender, if such transactions
are not upon fair market value conditions and terms, including any purchase, sale, lease or exchange of property, the rendering
of any service or the payment of any administrative commission, consulting or similar commissions. Notwithstanding the foregoing,
Lender recognizes and accepts that concurrently with the execution of this Agreement on the Date of Execution, Borrower enters
into an inter-company loan agreement with its Affiliate, Jefferson Electric, Inc., for purposes of extending a term loan to such
Affiliate for the purposes described in Clause Second of this Agreement.

 

FIFTEENTH.- Events of Default.
If any of the events described as follows (each one an “Event of Default”) occurs or continues, Lender, may by means
of a written notice delivered to Borrower (i) immediately accelerate the Loan and terminate its obligations to Fund the Loan in
favor of Borrower pursuant to this Agreement; (ii) immediately accelerate the principal balance of the funded Loan pursuant to
this Agreement, and accrued and unpaid interest for such and all other amounts payable pursuant to this Contract and the Promissory
Note, or if applicable, any Loan Document which will become due and will be immediately payable, without the requirement of notice,
presentation, demand, request, protest or any of the notifications of any nature, which Borrower herein expressly waives:

 

    	12

    	 

    
 

		(a)	If the Borrower does not pay, when due or within five (5) Work Days following the due date, the
principal amount and interest of any withdrawal from the Loan or of any Promissory Note or any other amount payable pursuant to
this Contract; or

 

		(b)	If any certification or document that the Borrower has delivered in compliance with its obligations
arising from this Agreement or any other Loan Document that is false or incorrect at the time made and such falsehood is not cured
within fifteen (15) Work Days from the date that Lender notifies Borrower; or

 

		(c)	If (1) Borrower fails to comply with or abide by any of the terms, pacts, conditions, obligations
or covenants contained under this Agreement, in the Promissory Note or in any other Loan Document that is not expressly provided
for in any other subsection of this clause and if such noncompliance is not cured within ten (10) Work Days following the date
it occurred; or (2) if Borrower fails to comply or observe any of the terms, pacts, conditions, obligations or covenants contained
in any other contract, agreement or instrument executed by the Borrower with the Lender or any of its Affiliates in Mexico or abroad,
and such breach is not cured within the cure period set forth in such contract, agreement or instrument, if any, for the loan or
all or part of the Borrower’s goods or assets; or

 

		(d)	If (1) Borrower breaches any of its payment obligations agreed upon or with respect to any liability,
which amount is in excess of One Hundred Thousand 00/100 Dollars ($100,000.00 US Dollars), and
if such breach is not cured within ten (10) Work Days following the date of such event or (2)
Borrower stops complying with or abiding by any of the material terms, pacts, conditions, obligations or covenants contained in
any other contract, agreement or instrument executed with any other Person which amount is in excess
of One Hundred Thousand 00/100 Dollars ($100,000.00 US Dollars), and if such breach is not cured within ten (10)
Work Days following the date of such event; or

 

		(e)	If Borrower admits in writing its inability to pay its debts, or should it make a general assignment
of goods for the benefit of creditors, or if Borrower is served and/or notified and has personal knowledge of such service of citation
and/or notice, with respect to the filing of an action by or against Borrower of any bankruptcy proceeding, insolvency or similar
proceeding. Notwithstanding the foregoing, Borrower shall have a period of sixty (60) Work Days following the date that it acquires
personal knowledge of said service of citation and/or notice in order to cure such Event of Default; or

 

		(f)	If any government authority or other Person (other than Lender) (1) confiscates, expropriates,
seizes or assumes the custody or the control of all or part of the Trust Assets or all or an important part of the property or
Assets of Borrower and Borrower has personal knowledge of such confiscation, expropriation, seizure or assumption of custody or
control; or (2) displacement of the administration of Borrower or substantial limitation of the authority to operate its respective
businesses and Borrower has personal knowledge of such displacement or limitation. Notwithstanding the foregoing, Borrower shall
have a period of sixty (60) Work Days following the date that it acquires personal knowledge of such situation in order to cure
such Event of Default; or

 

    	13

    	 

    
 

		(g)	If any franchise, license, authorization or concession which is important to Borrower is terminated
or modified substantially and said termination or substantial modification has or with the passage of
time can have a Substantially Adverse Change on Borrower or a Substantially Adverse Change
on the rights, actions and exceptions of the Lender in accordance with this Agreement or the other Loan Documents; or

 

		(h)	If Borrower challenges the legality, validity or enforceability of this Agreement, of any Promissory
Note, or of any other Loan Document, or if any third party challenges the legality, validity or enforceability of this Agreement,
of any Promissory Note or of any other Loan Document and Borrower is served with citation and/or notified and has personal knowledge
of such service of citation and/or notification. Notwithstanding the foregoing, Borrower shall have a period of sixty (60) Work
Days following the date that it acquires personal knowledge of such challenge in order to cure such Event of Default; or

 

		(i)	If Borrower stops paying, without justified reason, any Tax or fiscal Liability or the corresponding
fees due to the Mexican Social Security Institute, or the National Housing Institute Fund for Workers or to the Retirement Savings
Program or equivalent authorities in any relevant jurisdiction and if such default is not cured within ten (10) Work Days following
such event; or

 

		(j)	If any strike is initiated against Borrower and Borrower has personal knowledge of said strike.
Notwithstanding the foregoing, Borrower shall have a period of sixty (60) Work Days following the date that it acquires personal
knowledge of such strike in order to cure such Event of Default; or

 

		(k)	If at any time the Borrower’s members stop being, directly or indirectly, the owners of the
membership interests which represent at least 51% (fifty-one percent) of the corporate capital of Borrower.

 

SIXTEENTH.-
General Provisions. (a) Lender reserves the right to restrict the Availability Period of the Loan or the amount of
the Loan or both at the same time by means of a simple written notification addressed to the Borrower and thereby the right of
such is to make use of the unused balance is limited or cancelled as of the date the notification is received.

 

(b)          Confidential
Information. Borrower herein, expressly authorizes and empowers Lender to transfer, report or share all Confidential
Information with any of the companies, entities, home office and all other affiliates and subsidiaries that form the financial
and accounting organization of General Electric Company, both in Mexico and abroad, for referenced purposes of processes, approvals,
monitoring, evaluating, statistics, financial projections, internal reports, and any other process related to whatever results
necessary.

 

Lender herein agrees that it cannot disclose
the Confidential Information, either partially or totally, to third parties, nor to any of its Affiliates
of subsidiaries that do not form part of its financial and accounting organization, including
but not limited to GE Energy, without prior written approval of Borrower, except as otherwise provided for in the preceding
paragraph.

 

Confidential Information will be understood
as the commercial or financial information that belongs to the Borrower, that has been disclosed in an oral, written, graphic or
electromagnetic manner, and that is provided to Lender, including, but not limited to, the procedures, strategies, technical, financial
and business information, customer lists or current potential members, business proposals, investment projects, plans, reports,
marketing project or any other information that is private property  but excluding industrial secrets.

 

    	14

    	 

    
 

The term Confidential Information excludes
such information that (1) has been obtained by Lender from a source that, after having made a reasonable investigation, has not
been found to be subject to confidentiality restrictions; (2) has been developed independently or acquired by Lender without violating
the provisions of this Contract; (3) has been disclosed by Lender with a prior written authorization from Borrower; and (4) is
of public domain. 

 

(c)          Addresses and Notices. The
parties indicate the following notice addresses for all purposes relating to this Agreement and the Loan Documents:

 

Lender:

 

GE CF México, S.A. de C.V.

Avenida Antonio Dovalí Jaime 70,
Torre A, Piso 5

Colonia Santa Fe

C.P. 01210, México, Distrito Federal

 

Attention:          Pedro Joe Isla Treviño,
Legal Representative/Director of Risk Management

 

Borrower:

 

Nexus Magnéticos de México,
S. de R.L. de C.V.

Sección 44 A Tercera Unidad del
Bajo Río San Juan SN

Parque Industrial Reynosa,
Reynosa Tamaulipas 88780

 

Attention:          Nathan J. Mazurek, Sole Administrator

 

With copy to:

 

Jefferson Electric, Inc.

9650 South Franklin Drive,

Franklin, WI, 53132-8847

 

Attention: Thomas David Klink, President

 

And with copy to:

 

Pioneer Power Solutions, Inc.

400 Kelby Street, 9th Floor,

Fort Lee, NJ, 07024, United States of America

 

Attention:           Andrew Minkow, CFO

 

All notices between the parties shall be
in writing and delivered as follows (i) personally, with proof of receipt; (ii) by means of specialized couriers; or (iii) by certified
mail, return receipt requested. All notices shall be given at the addresses and to the facsimile numbers indicated hereinabove,
and shall be effective upon personal delivery or within three (3) Work Days following the date it was sent.

 

(d)          Costs
and Expenses. Borrower agrees to pay all costs, expenses, and fees relating directly or indirectly or in relation to the preparation,
execution, registration, perfection and amendment to this Agreement or the other Loan Documents.

 

    	15

    	 

    
 

(e)           Assignment.
Borrower may not transfer or assign its rights or obligations under this Agreement of the other Loan Documents. Lender may assign
this Agreement or any of the rights and obligations herein, upon prior written notice to Borrower with at least thirty (30) Work
Days prior to the effective date of such assignment, by means of which Lender indicates the third party who will be the new lender
under the Agreement.

 

(f)          Applicable Law and Jurisdiction.
With respect to all matters relating to the interpretation or performance of this Agreement, it’s Exhibits or other documents
relating hereto, the parties submit themselves to the applicable laws of Mexico and to the jurisdiction of the courts in Mexico
City, the Federal District, waiving any other applicable jurisdiction.

 

The parties execute this agreement on the
date indicated hereinabove.

 

 

	
        Borrower:

         

        NEXUS MAGNETICOS DE MEXICO, S. DE R.L.
        DE C.V.

         

         

        By: /s/ Francisco José
        Peña Valdés

        Name: Francisco José Peña
        Valdés

        Title: Attorney-in-Fact

         
	
        Lender:

         

        GE CF MEXICO, S.A. DE C.V.

         

         

        By: /s/ Pedro José Isla
        Treviño

        Name: Pedro José Isla Treviño

        Title: Attorney-in-Fact

         

 

    	16

    	 

    
 

EXHIBIT “A”

PROMISSORY NOTE

$1,652,805.00 USD

(One Million Six Hundred Fifty-two Thousand
Eight Hundred and Five and 00/100 Dollars)

 

The undersigned borrower, NEXUS MAGNETICOS
DE MEXICO, S. DE R.L. DE C.V. (the “Borrower”), a limited liability variable capital company duly established
and validly existing in accordance with the laws of Mexico (“México”), by means of this promissory note
(hereinafter the “Promissory Note”) unconditionally promises to pay to the order of GE CF MÉXICO, S.A.
DE C.V. (the “Beneficiary”) in Beneficiary’s bank account number 50279310,
ABA 021001033 that Beneficiary has at Deutsche Bank Trust Company Americas, in New York City, New York, United States of America
(the “Beneficiary’s Bank Account”) or in any other account or place that Lender instructs in writing to Borrower,
the principal amount of $1,652,805.00 US Dollars (One Million Six Hundred Fifty-two Thousand Eight Hundred and Five and
00/100 Dollars), which payments shall be made in sixty (60) consecutive monthly installments in the amounts and on the dates
indicated herein below, (each a “Principal Payment Due Date”):

 

 

	Number of Payments	
        Due Date of Principal Payment 

        (Month/Day/Year)
	
        Amount of Principal Payment Due

        (in US Dollars)

	1	09/01/2012	$23,128.01
	2	10/01/2012	$23,261.58
	3	11/01/2012	$23,395.91
	4	12/01/2012	$23,531.02
	5	01/01/2012	$23,666.91
	6	02/01/2013	$23,803.59
	7	03/01/2013	$23,941.06
	8	04/01/2013	$24,079.32
	9	05/01/2013	$24,218.37
	10	06/01/2013	$24,358.24
	11	07/01/2013	$24,498.90
	12	08/01/2013	$24,640.39
	13	09/01/2013	$24,782.68
	14	10/01/2013	$24,925.80
	15	11/01/2013	$25,069.75
	16	12/01/2013	$25,214.53
	17	01/01/2013	$25,360.14
	18	02/01/2014	$25,506.60
	19	03/01/2014	$25,653.90
	20	04/01/2014	$25,802.05
	21	05/01/2014	$25,951.06
	22	06/01/2014	$26,100.92
	23	07/01/2014	$26,251.66
	24	08/01/2014	$26,403.26
	25	09/01/2014	$26,555.74
	26	10/01/2014	$26,709.10
	27	11/01/2014	$26,863.34
	28	12/01/2014	$27,018.48

 

    	17

    	 

    
 

	39	01/01/2014	$27,174.51
	30	02/01/2015	$27,331.44
	31	03/01/2015	$27,489.28
	32	04/01/2015	$27,648.03
	33	05/01/2015	$27,807.70
	34	06/01/2015	$27,968.29
	35	07/01/2015	$28,129.81
	36	08/01/2015	$28,292.26
	37	09/01/2015	$28,455.64
	38	10/01/2015	$28,619.97
	39	11/01/2015	$28,785.25
	40	12/01/2015	$28,951.49
	41	01/01/2015	$29,118.68
	42	02/01/2016	$29,286.84
	43	03/01/2016	$29,455.98
	44	04/01/2016	$29,626.08
	45	05/01/2016	$29,797.18
	46	06/01/2016	$29,969.25
	47	07/01/2016	$30,142.33
	48	08/01/2016	$30,316.40
	49	09/01/2016	$30,491.48
	50	10/01/2016	$30,667.56
	51	11/01/2016	$30,844.67
	52	12/01/2016	$31,022.80
	53	01/01/2016	$31,201.95
	54	02/01/2017	$31,382.15
	55	03/01/2017	$31,563.38
	56	04/01/2017	$31,745.66
	57	05/01/2017	$31,928.99
	58	06/01/2017	$32,113.38
	59	07/01/2017	$32,298.83
	60	08/01/2017	$32,485.43

 

Borrower
extends the time in which this Promissory Note may be presented for payment to six months after the date of the last Due Date of
Principal Payment, in the terms of Article 128 of the General Law
of Negotiable Instruments and Credit Transactions, without prejudice to the Beneficiary’s right to present this Promissory
Note for payment prior to said date.

 

Borrower unconditionally agrees to pay,
on each Due Date of Interest Payment (as defined herein below), from the date of the execution hereof to the date that the principal
is paid in its entirety, interest upon the unpaid principal balance, at an annual interest rate of 6.93% (Six point Ninety-three
percentage points) per annum, plus taxes which may be incurred as a result of the same.

 

Likewise, Borrower agrees to pay a default
interest on matured unpaid principal amounts as of the date of such default in payment of principal or interest herein, as provided
herein, and until such principal or interest payment is due, and continuing until said unpaid principal balance is paid in its
entirety, at an annual interest rate of 0.07% (Zero point Zero Seven percentage points), which interest will be payable on demand
plus taxes which may be incurred as a result of the same.

 

    	18

    	 

    
 

Interest under this Promissory Note is
calculated based on a three hundred sixty (360) day year and thirty (30) day months.

 

All payments to be made by Borrower to
the Beneficiary or holder hereof, in accordance with the provisions of this Promissory Note, whether toward principal, interest
or for any other reason, shall be made without any offset or deductions, prior to 11:00 am (Mexico City time) on the date such
payments are due in accordance with this Promissory Note, in US Dollars, legal currency of the United States of America, and in
immediately available funds, to the Beneficiary’s Account or in any other account or place specified in writing by the Beneficiary
or the holder hereof. The obligation of the Borrower to pay the principal of this Promissory Note, together with accrued interest
and any other sums payable under it shall be fulfilled only by payment in Dollars, legal currency of the United States of America,
outside the territory of Mexico, under the terms provided in this Promissory Note.

 

In the event that any payment to be made
by the Borrower under this Promissory Note is due and payable on a day not a Work Day (as such term is defined below), then the
expiration date of such payment shall be the Work Day immediately preceding such.

 

All payments to be made by the Borrower
under this Promissory Note shall be free of and without deduction or withholding for or on account of, any taxes, fees, charges,
assessments, charges, quotas, deductions or withholdings, present or future, assessed, imposed, collected, or retained by any governmental
authority of any jurisdiction (the "Taxes"). If any such taxes are withheld from any amounts payable to the holder hereof,
such amounts will be increased as necessary so that the holder of this Promissory Note receives (after payment of Taxes) interest
or such other sums payable at the interest rates or in the amounts specified in this Promissory Note.

 

As used in this Promissory Note, the following
terms have the following meanings:

 

“Work Day”
means any day that is not Saturday or Sunday, a holiday or any other day that the banks located in New York City, New York, United
States of America or Mexico City, Federal District, are authorized or required by law to remain closed.

 

“Due Date
of Interest Payment” means the last day of each Interest Period.

 

“Interest
Period” means (a) initially the period beginning the 25th day of July, 2012 and ending on the 1st day of August, 2012;
and (b) thereafter, each period which begins on the last day of the immediately preceding Interest Period and which ends one (1)
month after said date; with the understanding that (i) if any Interest Period ends on a day that is not a Work Day, said Interest
Period shall end on the immediately preceding work day; and (ii) no Interest Period will end after the last Due Date of Principal
Payment.

 

Borrower’s notice address for all
purposes related to this Promissory Note: Sección 44 A Tercera Unidad del Bajo Río San
Juan SN Parque Industrial Reynosa Tamaulipas 88780.

 

For all matters relating to the interpretation
and enforcement of this Promissory Note, the parties herein are subject, expressly and irrevocably, to the applicable laws of the
United Mexican States, and the jurisdiction of the competent courts in the Federal District, and waive, expressly and irrevocably,
any other jurisdiction that may correspond to their respective domiciles, present or future, the location of their property or
for any other reason.

 

    	19

    	 

    
 

 

Signed in Reynosa, Tamaulipas, on the 25th
day of July, 2012

 

Borrower

NEXUS MAGNETICOS DE MEXICO, S. DE R.L.
DE C.V.

 

 

 

By: /s/ Francisco José Peña
Valdés

Name: Francisco José Peña
Valdés

Title: Attorney-in-Fact

 

    	20

    	 

    

 

EXHIBIT “B”

 

FORM
FOR REQUEST FOR FUNDING

 

[*] day of July 2012

 

 

GE CF México, S.A. de C.V.

Avenida Antonio Dovalí Jaime 70,
Torre A Piso 5

Colonia Santa Fe

C.P. 01210, México, Distrito Federal

 

Attention: Director of
Risk Management

 

Re:Request for Funding

 

With respect to the term loan agreement
dated, 25th day of July 2012 (“Loan Agreement”), entered into by and between NEXUS MAGNETICOS DE MEXICO, S. DE R.L.
DE C.V., as borrower (“Borrower”), and GE CF México, S.A. de C.V., as lender (“Lender”). Capitalized
terms which are not expressly defined herein shall have the defined meaning in the Loan Agreement.

 

Borrower hereby notifies Lender, in accordance
with Clause Third, subsection (a) of the Loan Agreement that it desires to request Funding of the Loan in accordance with the Loan
Agreement subject to deductions and withholdings by the Lender with respect to the origination fee, the value added tax on the
origination fee and the Pledge of Cash, in accordance with Clauses Ninth and Twelfth of the Loan Agreement and hereinbelow is the
information relating to such disbursement of Funding:

 

		(i)	Principal amount of Disposition requested:
$1,652,805.00 US Dollars (One Million Six Hundred Fifty-two Thousand Eight Hundred and Five and 00/100 Dollars), which
includes the deduction and withholding by the Lender of the origination fee in the amount of $16,528.05 US Dollars (Sixteen Thousand
Five Hundred Twenty-eight 05/100 Dollars), the value added tax on the origination fee in the amount of $2,644.49 US Dollars (Two
Thousand Six Hundred Forty-four 49/100 Dollars) and the Pledge of Cash in the amount of $162,280.50 US Dollars (One Hundred Sixty-two
Thousand Two Hundred Eighty 50/100 Dollars);

 

		(ii)	Date of Funding requested: 25th day of July, 2012;

 

		(iii)	Bank account information where Borrower desires the principal amount of the loan minus the amount
of the origination fee, minus the value-added tax of the origination fee and minus the amount of the Pledge of Cash, leaving a
balance to be received of $1,471,351.96 US Dollars (One Million Four Hundred Seventy-one Thousand Three Hundred Fifty-one 96/100
Dollars) to be deposited:

 

	 	Account Holder:	Nexus Magneticos de Mexico, S. de R.L. de C.V.
	 	Bank:	Banco Mercantil del Norte, S.A.
	 	Account Number:	072823006105691332
	 	SWIFT:	MENOMXMT

 

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	 	Address:	Av. Revolucion #3000
	 	 	Col. Primavera
	 	 	Monterrey, N.L.
	 	 	Mexico, C.P. 64830

  

Borrower herein certifies as follows: (a)
each and every one of the conditions precedent mentioned in Article Eleven of the Loan Agreement have been completed and satisfied
as of the date hereof or will be completed and performed s; and (b) no Event of Default has occurred or exists, nor shall result
from the requested Funding.

 

Sincerely,

 

[*]

 

 

By: ________________________________________

Name: [*]

Title: Attorney-in-Fact

 

    	22TO BE ISSUED BY MEANS OF A PUBLIC INSTRUMENT
AND REGISTERED

IN THE PUBLIC REGISTRY
OF PROPERTY

 

IRREVOCABLE TRANSFER OF TITLE
AND GUARANTY TRUST AGREEMENT

 

THIS IRREVOCABLE TRANSFER OF TITLE AND
GUARANTY TRUST AGREEMENT NUMBER 1297, IS ENTERED INTO ON THIS 25th DAY OF JULY, 2012 (HEREINAFTER THE “AGREEMENT”
OR THE “TRUST”), BY AND AMONG, NEXUS MAGNETICOS DE MEXICO, S. DE R.L. DE C.V., IN ITS CAPACITY AS TRUSTOR
AND SECONDARY TRUST BENEFICIARY (HEREINAFTER REFERRED TO INDISTINCTIVELY AS “TRUSTOR A” OR “SECONDARY
BENEFICIARY A”, AS REQUIRED BY THE CONTEXT), REPRESENTED HEREIN BY FRANCISCO JOSE PEÑA VALDES, JEFFERSON ELECTRIC,
INC. IN ITS CAPACITY AS TRUSTOR AND SECONDARY TRUST BENEFICIARY (HEREINAFTER REFERRED TO INDISTINCTIVELY AS “TRUSTOR
B” OR “SECONDARY BENEFICIARY B”, AS REQUIRED BY THE CONTEXT” AND JOINLTY WITH TRUSTOR A, SHALL
BE REFERRED TO AS THE “TRUSTOR”, AS REQUIRED BY THE CONTEXT), REPRESENTED HEREIN BY FRANCISCO JOSE PEÑA VALDES,
GE CF MÉXICO, S.A. DE C.V., IN ITS CAPACITY AS PRIMARY BENEFICIARY (HEREINAFTER, THE “PRIMARY BENEFICIARY”),
REPRESENTED HEREIN BY PEDRO JOSÉ ISLA TREVIÑO; AND BANCO INVEX, S.A., MULTIPLE BANKING INSTITUTION,INVEX FINANCIAL
GROUP, TRUSTEE, IN ITS CAPACITY AS TRUSTEE (HEREINAFTER THE “TRUSTEE”), REPRESENTED HEREIN BY ITS FIDUCIARY DELEGATE,
MR. NABOR MEDINA GARZA, IN ACCORDANCE WITH THE FOLLOWING RECITALS, REPRESENTATIONS AND WARRANTIES AND ARTICLES.

 

RECITALS

 

I.On the same date hereof, but prior
to the execution of this Agreement, Trustor, as pledge guarantor, executed with Johnson Bank, in its capacity as pledge creditor
an agreement to terminate a stock pledge agreement without transfer of possession, dated December 8, 2009, by means of which such
was terminated and the security in first place on the Trust Assets (as defined herein below) was released, such document which
is pending registration in the Public Registry of Property and Commerce in Reynosa, Tamaulipas, being that is was recently executed.

 

II.On July 25, 2012, Trustor A, in
its capacity as borrower, and the Primary Beneficiary, in its capacity as lender, entered into a term loan agreement, (hereinafter
the “Loan Agreement”), by means of which the Primary Beneficiary, subject to the terms and conditions established
in said Loan Agreement, agreed to issue a term loan to Trustor A in a principal amount up to $1,652,805.00 (One Million Six
Hundred Fifty-two Thousand Eight Hundred Five and 00/100 Dollars) (the “Loan”), in accordance with the terms and
conditions of the Loan Agreement. A copy of the Loan Agreement is attached hereto as Exhibit “A”; and

 

    	1

    	 

    
 

III.The Loan Agreement has been or
shall be documented by means of a promissory note signed by Trustor A in favor of the Primary Beneficiary, (the “Note”).

 

REPRESENTATIONS AND WARRANTIES

 

		I.	Trustor A and Secondary Beneficiary A represent and warrant the following, by means of their legal
representative:

 

(a)That it is a company legally established
and validly existing in accordance with the laws of Mexico and it is authorized to execute this Agreement, as evidenced by public
instrument number 4,104, dated October 15, 2004, issued before Alfonso Salinas Flores, Notary Public number 135 of Reynosa, the
first testimony of which was registered in the Public Registry of Commerce in Reynosa, under Number 853 Volume 2-018, Book First,
on October 21, 2004;

 

(b)The execution, signature and performance
of this Agreement and the contribution of Trust Assets A to this Trust do not violate (i) any provision in the bylaws or other
formation documents of Trustor A; (ii) any agreement, contract, license, resolution, or order in which Trustor A is a party or
to which Trustor A or any of its assets or property are subject, or (iii) any law, regulation, circular, order or decree of any
Governmental Authority, whether judicial or administrative;

 

(c)Its representatives possess sufficient
authority to execute this Agreement, the same which as of the date hereof has not been revoked, modified or limited in any manner
whatsoever;

 

(d)It does not require any authorization
or approval in order to execute this Agreement or to transfer Trust Assets A in favor of Trustee and for the benefit of the Primary
Beneficiary, nor to perform or undertake the obligations assumed by the same pursuant to the terms of this Agreement and applicable
law;

 

(e)That it is the sole and legitimate
owner of Trust Assets A, the same which are described in Exhibit “B-1” and described in detail in the appraisal
attached hereto as Exhibit “B-3” of this Agreement (hereinafter and jointly with Trust Assets B contributed
by Trustor B, they shall be referred to as the “Trust Assets”), the same which are free of Encumbrances, options
or any other limitations on ownership or preferential rights of any nature, in accordance with the laws of the United Mexican States
(hereinafter, “Mexico”), for which it possesses all authorizations, permits and licenses issued by the competent
authorities;

 

(f)Trust Assets A are insured with
financially solid insurance companies of internationally recognized prestige, with coverage against loss and damages of the type
which are generally insured by companies which are in the same line of business as Trustor A or in a similar line of business,
said insurance being in an amount not less than those amounts that such other companies are accustomed to obtaining under the same
circumstances. Trustor A has paid all of the insurance premiums which have become due and payable with respect to such coverage,
and such premiums and coverage are currently in effect;

 

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(g)as of the date hereof, there is
no pending and, to the best of its knowledge, threatened action, lawsuit, claim, requirement or proceeding before any court, governmental
agency, or arbitrator that affects or could affect the legality, validity or enforceability of this Agreement, or the legitimate
ownership by Trustor A of Trust Assets A; and

 

(h)it acknowledges and agrees that
the validity and enforceability (i) of the transfer of Trust Assets A to the Trust Estate, as security for the Loan pursuant to
the terms of this Agreement; and (ii) this Agreement, including without limitation, the procedure for the extrajudicial sale and
distribution of the Trust Estate as set forth in Article Twelfth hereof, constitute an essential inducement for the Primary Beneficiary
and Trustor A to enter into the Loan Agreement and provide the corresponding funds to Trustor
A.

 

		II.	Trustor B and Secondary Beneficiary B represent and warrant the following, by means of their legal
representative:

 

(a)That it is a company legally established
and validly existing in accordance with the laws of the State of Delaware, United States of America and it is authorized to execute
this Agreement, as evidenced by a copy of the articles of incorporation of Jefferson Electric, Inc. dated April 30, 2010;

 

(b)The execution, signature and performance
of this Agreement and the contribution of Trust Assets B to this Trust do not violate (i) any provision in the bylaws or other
formation documents of Trustor B; (ii) any agreement, contract, license, resolution, or order in which Trustor B is a party or
to which Trustor B or any of its assets or property are subject, or (iii) any law, regulation, circular, order or decree of any
Governmental Authority, whether judicial or administrative;

 

(c)Its representatives possess sufficient
authority to execute this Agreement, the same which as of the date hereof has not been revoked, modified or limited in any manner
whatsoever;

 

(d)It does not require any authorization
or approval in order to execute this Agreement or to transfer Trust Assets B in favor of Trustee and for the benefit of the Primary
Beneficiary, nor to perform or undertake the obligations assumed by the same pursuant to the terms of this Agreement and applicable
law;

 

(e)That it is the sole and legitimate
owner of Trust Assets B, the same which are described in Exhibit “B-2” and described in detail in the appraisal
attached hereto as Exhibit “B-3” of this Agreement, the same which are free of Encumbrances, options or any
other limitations on ownership or preferential rights of any nature, in accordance with the laws of Mexico, for which it
possesses all authorizations, permits and licenses issued by the competent authorities;

 

    	3

    	 

    
 

(f)Trust Assets B are insured with
financially solid insurance companies of internationally recognized prestige, with coverage against loss and damages of the type
which are generally insured by companies which are in the same line of business as Trustor B or in a similar line of business,
said insurance being in an amount not less than those amounts that such other companies are accustomed to obtaining under the same
circumstances. Trustor B has paid all of the insurance premiums which have become due and payable with respect to such coverage,
and such premiums and coverage are currently in effect;

 

(g)as of the date hereof, there is
no pending and, to the best of its knowledge, threatened action, lawsuit, claim, requirement or proceeding before any court, governmental
agency, or arbitrator that affects or could affect the legality, validity or enforceability of this Agreement, or the legitimate
ownership by Trustor B of the Trust Assets B;

 

(h)it acknowledges and agrees that
the validity and enforceability (i) of the transfer of Trust Assets B to the Trust Estate, as security for the Loan pursuant to
the terms of this Agreement; and (ii) this Agreement, including without limitation, the procedure for the extrajudicial sale and
distribution of the Trust Estate as set forth in Article Twelfth hereof, constitute an essential inducement for the Primary Beneficiary
and Trustor B to enter into the Loan Agreement and provide the corresponding funds to Trustor
B; and

 

(i)Trustor B has complied with all
of the applicable legal provisions and with all procedures in order to perform the importation of Trust Assets B into the United
Mexican States.

 

III. The Primary Beneficiary represents
and warrants the following, by means of its legal representative:

 

(a)That it is a company legally established
and validly existing in accordance with the laws of Mexico and it is authorized to execute this Agreement, as evidenced by public
instrument number 157,217, dated March 3, 1993, issued before José María Morera González, Notary Public number
102 of the Federal District, the first testimony of which was registered in the Public Registry of Commerce of the Federal District,
under mercantile folio 174572;

 

(b)Its representative possesses sufficient
authority to execute this Agreement, the same which as of the date hereof has not been revoked, modified or limited in any manner
whatsoever;

 

(c)In accordance with the foregoing
recitals, it agrees to enter into this agreement and perform the obligations contained in this Agreement.

 

III.Trustee represents and warrants
the following, by means of its fiduciary delegate:

 

(a)  That it is a corporation legally
established and validly existing in accordance with the laws of Mexico and it is authorized by the Treasury and Public Credit Department
to operate as a multiple banking institution and to provide the services mentioned in section XV fifteenth of article 46 forty-six
of the Law of Credit Institutions, as evidenced by public instrument number 157,391 one hundred fifty-seven thousand three hundred
ninety-one, dated February 23, 1994, issued before Fausto Rico Álvarez, Notary Public number 6, the first testimony of which
was registered in the Public Registry of Commerce of the Federal District on May 18, 1994, under mercantile folio 187,201 one hundred
eighty-seven thousand two hundred one;

 

    	4

    	 

    
 

(b) It desires to enter into this Agreement
and to accept its designation as Trustee, and to carry out any and all actions that are necessary or convenient in order to satisfy
and fulfill the Purposes of the Trust, as well as to comply with its obligations as provided for in this Agreement;

 

(c) it does not require any authorization
or approval in order to execute this Agreement, or to perform and comply with its obligations herein, which are legal, valid and
enforceable against the Trustee in accordance with the terms of this Agreement;

 

(d) its Fiduciary Delegate possesses sufficient
power and authority, as well as the necessary corporate authority to execute this Agreement on its behalf and that such powers,
authority and corporate authorizations have not been revoked, modified or limited in any manner as evidenced in public instrument
17,849 seventeen thousand eight hundred forty-nine, dated February 18, 2009, issued before Fernando Dávila Rebollar, Notary
Public number 235 two hundred thirty-five of Mexico City, Federal District, the first testimony of which was registered in the
Public Registry of Property and Commerce of the Federal District, on March 12, 2009, under mercantile folio number 187,201 one
hundred eighty-seven thousand two hundred one.

 

(e) That for the purposes established in
item 5.5 of the provisions issued by (Banco de México) by means of circular 1/2005, on the subject matter of trusts, Trustee
makes the other parties to this Agreement aware of the text of the following articles which establish prohibitions on the fiduciary
institution in the execution of trusts:

 

FROM THE GENERAL
LAW OF INSTRUMENTS AND CREDIT OPERATIONS:

 

Article 382.
..“...A trust established in favor of the TRUSTEE is null, except as provided for in the following paragraph, and other
applicable legal provisions.

 

The fiduciary
institution may be a trustee in Trusts in which the purpose is to serve as an instrument for the payment of unsatisfied obligations,
in the event of loans issued by such institution for the performance of business activities. For the purposes thereof, the parties
must establish the terms and conditions to resolve potential conflicts of interest...”

 

Article 394. Prohibited matters: 

I. Secret Trusts; 

 

    	5

    	 

    
 

II. Those in which the benefit is granted
successively to different persons which must be substituted by the death of the prior one, except in the case in which the substitution
is made in favor of persons that are alive or already conceived, upon the death of the Trustors; and 

III. Those
in which the duration is more than fifty (50) years, when a legal entity that is not an entity under public law or a charitable
institution, is named as a beneficiary. Nonetheless, a Trust with a duration of more than 50 years can be established when the
purpose of the Trust is the maintenance of a non-profit scientific or artistic museum...”.

 

FROM THE LAW
OF CREDIT INSTITUTIONS:

 

“ARTICLE 106. Credit institutions
shall be prohibited from:

XIX.- In the undertaking of operations
that are referred to in subsection XV of article 46 of this Law:

a) Repealed

b) Being liable to the Trustor, grantors,
and principals for the breach of payment obligations for the loans issued, or the grantors, for the values that are acquired, unless
it is their fault, according to that set forth in the final part of Article 391 of the General Law of Instruments and Credit Operations,
or guarantee the return of funds that are entrusted to them. If at the end of the trust, mandate or commission established for
the granting of loans, such have not been liquidated by the debtors, the institution shall transfer them to the trustee or trustor,
as the case may be, or to the principal, abstaining from covering their payment. In the trust, mandate, or commission agreements,
there will be inserted in a conspicuous manner that set forth in this subsection together with a statement from the fiduciary to
the effect that its content was unequivocally provided to the persons who have received property or rights with respect to the
trust;

c) Acting as trustees, principals or
commission agents in trusts, agencies or commissions, respectively, that directly or indirectly, receive public funds by means
of any act that causes either a direct or an indirect liability, with the exception of those trusts established by the Federal
Government through the Treasury and Public Credit Department, and trusts in which securities that are registered in the National
Securities Registry pursuant to that set forth in the Securities Market Law are registered;

d) Carry out trusts, agencies or commissions
referenced in the second paragraph of article 88 of the Investment Association Law; 

e) Acting in trusts, agencies or commissions
by means of which limitations and prohibitions contained in financial laws are evaded;

f) Utilizing funds or securities from
the trusts, agencies or commissions dedicated for the issuance of loans, in which the trustee has discretionary authority, in the
granting of such to undertake operations by virtue of which result or could result in the following becoming debtors: their fiduciary
delegates, the members of the board of directors or advisory board, as the case may be, owners and alternates, whether they are
in office or not; the institution’s employees and officers, owners who are inspectors or alternate inspectors, whether in
office or not; the external auditors of the institution, the members of the respective technical trust committee, relatives of
the first degree or spouses of the aforementioned persons, the meetings of companies in which said persons constitute a majority
or the same institutions, as well as those persons which the Bank of Mexico determines by means of dispositions of a general nature;

 

    	6

    	 

    
 

g) Managing rustic properties, unless
they have received management for the distribution of the assets among heirs, beneficiaries, associates or creditors, or to pay
any obligation or to guarantee its compliance with the value of said property or its products, and in these cases without the term
of the management exceeding two years, except in the event of a production trust or a guaranty trust;

h) Enter into trusts which manage amounts
of money which are periodically contributed by groups of consumers integrated by means of commercialization systems, earmarked
for the acquisition of certain properties or services, as those listed in the Federal Consumer Protection Law.

Any agreement
contrary to that set forth in the preceding subsections shall be null.”

 

FROM THE 1/2005 CIRCULAR FROM BANK OF MEXICO
(BANCO DE MÉXICO)

 

“...6.1 In the execution of Trusts,
Fiduciary Institutions are prohibited from doing the following: 

a) Charging the Trust Estate prices
which are different from those agreed upon when the transaction in question was agreed upon;

b) Guaranteeing the returns or prices
of the funds whose investment is entrusted to it, and 

c) Undertaking transactions that are
contrary to its internal policies and prudent financial practices.

6.2 Fiduciary Institutions cannot execute
transactions with securities, credit instruments or any other financial instruments that do not comply with the specifications
agreed upon in the corresponding Trust Agreement.

6.3 Fiduciary Institutions cannot undertake
Trusts that are of a type which they are not authorized to execute in accordance with the laws and provisions that regulate the
same. 6.4 In no event may any Fiduciary Institution charge against the Trust Assets entrusted to them for payment of any sanction
that is imposed on them by any authority. 

6.5 In Guaranty Trusts, Financial Institutions
and SOFOLES (Special Purpose Non-Bank Financial Institutions) shall only receive goods or rights for purposes of guarantying the
obligations involved.

6.6 Fiduciary Institutions must follow
that set forth in article 106 of subsection XIX of Credit Institutions Law, 103 section IX of the Security Markets Law, 62 section
VI of the General Law of Mutual Insurance Institutions and Associations, 60 section VI Bis of the Federal Financial Institution
Law, and 16 of the Organizational Law of Rural Finance, as the case may be for each institution...”.

 

NOW, THEREFORE, based on the Recitals,
Representations and Warranties contained herein, which constitute inducement for the Primary Beneficiary to execute this Agreement,
the Parties hereto agree as follows:

 

    	7

    	 

    
 

ARTICLES

 

FIRST.- DEFINED TERMS.

 

As used in this Agreement, the following
terms when capitalized shall have the following meanings:

 

“Affiliate”
means, with respect to any Party, any other person which directly or indirectly controls or is
controlled by or is under common control with said Party. For purposes of this Agreement, control means the authority to determine
the administration and the policies of said Party, directly or indirectly, whether by means of controlling voting stock, of having
the authority to designate most of the members of the board of management by contract or any other manner.

 

“Distribution Notice”,
shall have the meaning indicated in subsection (b) of Article Eleventh of this Agreement.

 

“Trustee’s Notice”,
shall have the meaning indicated in subsection (e) of Clause Twelfth of this Agreement.

 

“Designated Assets”,
shall have the meaning indicated in subsection (f) of Clause Twelfth of this Agreement.

 

“Trust Assets”,
means Trust Assets A and Trust Assets B, jointly, which Trustor contributes to this Trust on the date of execution of this Agreement
in order to secure the Loan.

 

“Trust Assets A”, means
the machinery that Trustor A and Secondary Beneficiary A contribute to this Trust on the date of execution of this Agreement in
order to secure the Loan.

 

“Trust Assets B”, means
the machinery that Trustor B and Secondary Beneficiary B contribute to this Trust on the date of execution of this Agreement in
order to secure the Loan.

 

“Event of Default”,
shall have the meaning assigned to such term in the Loan Agreement; with the understanding that the term “Event of Default”
shall also include, without limitation, breach by Trustor with respect to its obligations pursuant to this Agreement.

 

“Loan Agreement”, shall
have the meaning indicated in Recital II of this Agreement.

 

“Loan”, shall have the
meaning indicated in Recital II of this Agreement.

 

“Deposit”, shall have
the meaning indicated in subsection (f)(iii) of Clause Twelfth of this Agreement.

 

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“Funding Distribution”,
means the funding of the Loan made by Trustor A, in its capacity as borrower, pursuant to the terms of the Loan Agreement.

 

"Business Day", means
any day of the year, except Saturdays and Sundays, holidays or any other day that the commercial banks located in New York City,
New York, United States of America, or Mexico City, Federal District, Mexico are authorized or required by law to close.

 

“Dollars” o “USD
$”, means Dollars, legal currency of the United States of America.

 

“Loan Documents” means
collectively the loan agreement, the Promissory Notes, this Agreement, as well as any other exhibit, contract, agreement, document
or instrument relating to the same (as may be modified, amended or restated at any time in accordance with the terms of the same).

 

“Date of Notice”, shall
have the meaning indicated in subsection (b) of Article Twelfth of this Agreement.

 

“Primary Beneficiary”,
means GE CF México, S.A. de C.V. or any of its successors or permitted assigns.

 

“Trustor A or Secondary
Beneficiary A”, means Nexus Magnéticos de México, S. de R.L. de C.V. or any of its successors or permitted
assigns.

 

“Trustor B or Secondary
Beneficiary B”, means Jefferson Electric, Inc. or any of its successors or permitted assigns.

 

“Trustor” or “Secondary
Beneficiary”, means Nexus Magnéticos de México, S. de R.L. de C.V. or any of its successors or permitted
assigns, and Jefferson Electric, Inc. or any of its successors or permitted assigns, jointly.

 

“Trustee”, means Banco
Invex, S.A., Institución de Banca Múltiple, Invex Grupo Financiero, Fiduciario or any of its successors or permitted
assigns.

 

“Purposes of the Trust”,
shall have the meaning indicated in Article Fourth of this Agreement.

 

“Guaranty Trust”, shall
have the meaning indicated in Article Sixth of this Agreement.

 

“Encumbrance”, means
any mortgage, encumbrance, pledge, charge or any other guaranty or any agreement regarding preference over a property or asset
which has the practical effect of creating a security interest or encumbrance on said property or asset.

 

“Taxes on the Trust Estate”,
shall have the meaning indicated in subsection (c) of Article Eighth of this Agreement.

 

    	9

    	 

    
 

“Continuation Notice”,
shall have the meaning indicated in subsection (d) of Clause Twelfth of this Agreement.

 

“Suspension Notice”,
shall have the meaning indicated in subsection (d) of Clause Twelfth of this Agreement.

 

“Law”, means the General
Law of Instruments and Credit Operations.

 

“Highest Bidder”, shall
have the meaning indicated in subsection (f)(iii) of Clause Twelfth of this Agreement.

 

“Notice of Compliance”,
shall have the meaning indicated in subsection (e) of Clause Twelfth of this Agreement.

 

“Notice of Termination”,
shall have the meaning indicated in Article Fifth of this Agreement.

 

“Secured Obligations”,
means, jointly or separately, as the context may require, (i) any and all obligations, whether payment obligations or those of
any other nature, to be performed by Trustor, arising from or related to the Loan Documents; and (ii) any and all obligations of
any nature to be performed by Trustor, arising from or related to this Agreement.

 

“Note”, shall have the
meaning indicated in Recital III of this Agreement.

 

“Parties”, means Trustor
A, Trustor B, Primary Beneficiary, and the Trustee, collectively.

 

“Trust Estate”, means
the collective reference to the Trust Assets, whether present or future, that Trustor transfers to Trustee pursuant to the terms
of this Agreement, as well as any other property of any nature transferred or which shall be transferred in the future in accordance
with this Agreement.

 

“Pesos” or “$”,
means the legal currency in the United Mexican States.

 

“Definite Term”, shall
have the meaning indicated in subsection (e) of Clause Twelfth of this Agreement.

 

SECOND.- ESTABLISHMENT OF THE TRUST;
PERFECTION AND TRUSTEE APPOINTMENT; REVERSION.

 

(a) Establishment of Trust. In order
to secure the timely and total performance, payment, and satisfaction of any and all of the Secured Obligations, the Trustor hereby
irrevocably transfers in trust, the Trust Assets, in favor of Trustee, for the Purposes of the Trust, with everything that corresponds
to the Trust Assets by law or in fact, free and clear of any Encumbrances or reservation of ownership limitations of any kind.

 

    	10

    	 

    
 

Pursuant to the foregoing, Trustor A herein
delivers to Trustee, the original invoices endorsed in favor or Trustee, which covers the Trust Assets A. Likewise, Trustor B herein
delivers to Trustee, the original invoices endorsed in favor of Trustee, which covers the Trust Assets B.

 

(b)Trust Assets. The Parties
expressly recognize that the transfer of the Trust Assets shall be fully effective before third parties by means of (1) the execution
of this Agreement, (2) the delivery by Trustor A of the original invoices endorsed in favor of Trustee which covers the Trust Assets
A and the delivery by Trustor B of the original invoices endorsed in favor of Trustee which covers the Trust Assets B, and 3) the
virtual or judicial delivery of the Trust Assets to Trustee;

 

Notwithstanding the foregoing, Trustor
agrees with the Primary Beneficiary and Trustee to record this Agreement in the Sole Registry of Personal Property Security Interests
within ninety (90) calendar days following the date of execution of this Agreement. For purposes of the foregoing, Trustor may
instruct a notary public of its selection in Mexico, to conduct the recordation in the aforementioned Registry. In either case,
Trustor is obligated to cover the necessary costs for the recordation.

 

Therefore, the Primary Beneficiary and
Trustor herein acknowledge and agree that Trustee does not have any obligation whatsoever to register this Trust in the corresponding
Sole Registry of Personal Property Security Interests. Such obligation is solely that of Trustor. By means of the execution of
this document, Trustor releases Trustee from any liability, whether present or future, which may arise from this obligation.

 

(c)Acceptance of Designation of
Trustee. Trustee herein (1) accepts its designation as trustee of this Agreement and agrees to faithfully perform the Purposes
of the Trust and all of its obligations pursuant to this Agreement and applicable legislation (2) recognizes and accepts ownership
of the Trust Estate for the benefit of Primary Beneficiary and for the benefit of Secondary Beneficiary A and Secondary Beneficiary
B, and it agrees to maintain such ownership for the Purposes of the Trust. Trustee is authorized by means hereof to take any and
all actions which are necessary for the Purposes of the Trust, in accordance with this Agreement, and agrees that it will not take
or fail to take actions that may hinder the Purposes of the Trust.

 

This Agreement is registered before Trustee,
under number 1,297 (one thousand two hundred ninety-seven) for corresponding administrative and accounting purposes. It is stipulated
that all instructions directed to Trustee shall contain such reference number.

 

(d)Reversion. On the other hand,
Trustor declares that it does not reserve the right to revoke this Trust, therefore the same may not be terminated in accordance
with article 392, section VI, of the General Law of Instruments and Credit Operations. Notwithstanding the foregoing, subject to
the terms and conditions stated herein below, Trustor shall have the right to require the title and ownership of the Trust Assets
that it transferred to Trustee and contributed to the Trust Estate of this Trust, in such a way that said transfer shall not be
considered a transfer for fiscal purposes, according to article 14 of the Federal Fiscal Code.

 

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THIRD.- PARTIES TO THE TRUST.

 

The following are the parties to this Agreement:

 

	Primary
Beneficiary:	GE CF MEXICO, S.A. DE C.V.
	 	 
	Trustor
A and	 
	Secondary
Beneficiary A:	NEXUS MAGNETICOS DE MEXICO, S. DE R.L. DE C.V.
	 	 
	Trustor
B and	 
	Secondary
Beneficiary B:	JEFFERSON ELECTRIC, INC.
	 	 
	Trustee:	BANCO INVEX, S.A., MULTIPLE BANKING INSTITUTION, INVEX FINANCIAL GROUP, TRUSTEE

 

THIRD BIS.- TRUST ESTATE. The Trust
Estate consists of the following:

 

		1)	The Trust Assets.

 

		2)	All of the property and rights that may be contributed in the future by a Trustor or any third
party, to the Trust Estate for the purposes of the same, under any legal circumstance.

 

		3)	The resources obtained which arise out of the investment of the liquid assets which exist or which
may exist in the Trust Estate, with the understanding that said liquid assets shall be invested in any of the financial entities
belonging to INVEX Grupo Financiero, S.A. de C.V.

 

		4) 	The
resources obtained in the event of a sale of the Trust Assets, according to the extrajudicial sale and distribution proceeding
agreed upon in the Special Section of this Trust Agreement, in accordance with Article Twelfth herein below.

 

The Parties agree that the summary above
constitutes the inventory of the Trust Estate, without prejudice to the other rights or assets which may be added to the Trust
Estate.

 

FOURTH.- PURPOSES OF THE TRUST.

 

The purposes of this Agreement (the “Purposes
of the Trust”) are to secure the due and timely payment, performance and satisfaction of any and all of the Secured Obligations
in favor of the Primary Beneficiary; allow for Trustor A to have possession and use of the Trust Estate in accordance with the
terms of Article Seventh of this Agreement, and once each and every one of the Secured Obligations have been paid, revert ownership
and title in the Trust Estate in accordance with Article Fifth of this Agreement.

 

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For such purposes, Trustee:

 

(a)is and shall be the sole legal owner
(único y legítimo propietario) of, and hold good and clear title to, the Trust Estate (as the same may be
reduced or increased pursuant to the terms of this Agreement) free from all Encumbrances and without reservation or ownership limitations
of any kind, throughout the term of this Agreement, and in any event, until the Primary Beneficiary shall have delivered a Notice
of Termination to Trustee after the timely and due performance, payment and satisfaction of each and every one of the Secured Obligations;

 

(b) upon
receipt of a Distribution Notice from the Primary Beneficiary, shall carry out the procedure for the extrajudicial sale and distribution
of the Trust Estate provided for in Article Twelfth of this Agreement and in accordance with the prior written instructions of
the Primary Beneficiary in accordance with the terms of Article Twelfth of this Agreement;

 

(c)upon its receipt of a Termination
Notice, revert title to the Trust Estate to the Trustor, solely and exclusively in accordance with the written instructions given
by the Primary Beneficiary in the Termination Notice, pursuant to the terms of Article Fifth of this Agreement;

 

(d)shall deliver to the Primary Beneficiary,
any information or document received by the Trustee from the Trustor, within 2 (two) Business Days following receipt by the Trustee,
unless a different delivery period is expressly provided for in this Agreement;

 

(e)shall grant to Trustor A, the possession
of the Trust Assets (in the event that the procedure for the extrajudicial sale and transfer of the Trust Estate provided for in
Article Twelfth of this Agreement is not exercised); with the understanding that Trustor A shall be considered a depository of
title in favor of Trustee for the benefit of the Primary Beneficiary, from the moment that the procedure for the extrajudicial
sale and transfer is initiated;

 

(f)shall generally, carry out any and
all actions, comply and follow all instructions delivered by the Primary Beneficiary or Trustor, as the case may be, in accordance
with the express provisions of this Agreement;

 

(g)shall receive from Trustor, as part
of the Trust Estate, those other assets which shall replace the Trust Assets pursuant to articles 400 and 401 of the Law;

 

(h)shall open investment accounts or
accounts of any other type, and shall enter into necessary contracts with Banco Invex, S.A., Multiple Banking Institution, Invex
Financial Group or at any institution which is a part of Invex Grupo Financiero, S.A. de C.V. in the event that some of the Trust
Estate consists of liquid assets; and

 

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(i)shall invest the amounts of money
that exist in the Trust Estate, in any of the companies that are a part of Invex Grupo Financiero, S.A. de C.V. in accordance with
the written instructions which it shall receive from the Primary Beneficiary, in debt instruments which are issued, secured or
guaranteed by the Federal Government, or in bank debt securities, in both cases at maturity or repurchase, in shares representative
of the corporate capital of investment companies, as well as in those high credit quality instruments of debt, in all cases, such
investments shall be conducted for time periods necessary to ensure that an adequate level of liquidity is maintained in order
to timely comply with resulting payments, transfers or expenses charged to the Trust Estate. In the event that the Trustee does
not receive instructions from the Primary Beneficiary, the Trustee, without any liability, shall, at its discretion, invest the
liquid assets in the aforementioned instruments.

 

For purposes of the investment referenced
in the preceding paragraph, the Trustee submits itself, in all cases, to the legal or administrative provisions regulating investments
of trust resources and covering the Trust Estate, the commissions and expenses which arise from it being contracted.

 

The purchase of securities or of investment
instruments shall be subject to the disposition and liquidity of the same and to the market conditions existing at the time they
are made. Likewise, the parties hereto expressly release Trustee from any liability arising from the purchase of securities or
of investment instruments, as well as from losses that may affect the subject matter of the Trust as a consequence of the investments
made by the Trustee, pursuant to the terms of this subsection.

 

FIFTH.- TERM OF THIS AGREEMENT.

 

This Agreement shall remain in full force
and effect until: (a) the occurrence of an Event of Default, the Primary Beneficiary delivers to Trustee a Distribution Notice,
as defined in Article Eleventh of this agreement, by means of which it requests that Trustee proceed with the procedure for the
extrajudicial sale and distribution of the Trust Estate and the Trust Estate is distributed in its entirety in accordance with
the distribution procedure in Article Twelfth of this Agreement; (b) the occurrence of any of the events set forth in article 392
of the Law (with the exception of section VI of such article 392) which is compatible with the nature of this Agreement; or (c)
Primary Beneficiary delivers to Trustee a notice of termination ratified before a Mexican notary public (hereinafter the “Termination
Notice”). The Termination Notice shall (i) be substantially in the form attached hereto as Exhibit “C”;
and (ii) be delivered by Primary Beneficiary to Trustee (with copy to Trustor), ratified before a Mexican notary public within
ten (10) Business Days following the date on which the Secured Obligations have been duly and timely paid, performed and satisfied.
This Agreement shall terminate upon delivery of the Termination Notice by the Primary Beneficiary to the Trustee as contemplated
in this Article and Trustee reverts ownership and title in the Trust Estate to the corresponding Trustor in accordance with the
same.

 

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SIXTH.- ESTABLISHMENT OF GUARANTY TRUST.

 

The Trustor herein establishes a guaranty
trust (hereinafter the “Guaranty Trust”) in favor of the Primary Beneficiary in order to guaranty the full and
timely fulfillment of the Secured Obligations, by means of the affectation of the Trust Assets.

 

Once Trustor A, in its capacity as borrower,
has paid the full amount of the Loan and its accessories, including without limitation, interest, commission, and expenses, in
accordance with the Loan Agreement, the Guaranty Trust shall be extinguished and the Primary Beneficiary agrees to sign all documents
which are necessary in order to document such release.

 

SEVENTH.- USE OF THE TRUST ESTATE; RIGHT
TO INSPECT.

 

(a)To the extent expressly permitted
and in accordance with the terms of the Loan Agreement and this Agreement, and so long as an Event of Default does not occur and
continue, or the procedure mentioned in Article Twelfth of this Agreement is not commenced, Trustor A shall be authorized to do
the following:

 

		(i)	take possession of and use the Trust Assets; with the understanding that Trustor A shall have possession
of the Trust Assets, such Trust Assets shall be located in Mexico, at the facilities and domicile of Trustor A;

 

		(ii)	combine them with assets and utilize them in the manufacturing of other items, when their nature
permits, so long as, in these two last scenarios, their value is not decreased and the Trust Assets, once combined with other items
(with the exception of the property, fruits and products which as produced, the same which do not enter into the Guaranty Trust)
form part of the Trust Assets; and

 

		(iii)	receive, utilize and dispose of the fruits and products of the Trust Assets, in the ordinary course
of business.

 

(b)In the event that an Event of Default
occurs and continues, and such Event of Default is not cured within the time period provided to cure such Event of Default in accordance
with the terms of the Loan Agreement, and Trustee has received a Distribution Notice from the Primary Beneficiary, all of the rights
granted to Trustor A, in accordance with the immediately preceding subsection (a), shall terminate and upon the receipt of a Distribution
Notice from the Primary Beneficiary, Trustee shall follow the procedure established in Article Twelfth of this Agreement.

 

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(c)In accordance with that provided
for in article 401 of the Law, Trustee and the Primary Beneficiary (or any person or persons designated by such) shall have, at
is sole discretion, the right to visit, once per year, any place of business of Trustor on Business Days and during regular office
hours, upon prior written notice to Trustor A at least 5 (five) Business Days in advance, on such occasions as are reasonably necessary
(except in the event of a continuing Event of Default, in which case prior notice shall not be required but with the understanding
that such visits shall be made on Business Days and during regular office hours), without interfering with or hindering the operations
of Trustor A, and to examine, inspect and audit each and every part of the Trust Estate and to examine, inspect, audit and revise
and obtain copies and excerpts from the books, records, publications, orders, receipts and correspondence or any other information
of Trustor A in relation to the Trust Estate or the Trust, and each one shall be authorized to discuss the matters, finances and
accounts of Trustor A with their respective officers or directors and with their respective independent certified accountants (if
Trustor A desires, representatives of Trustor A may be present at such discussions). Likewise, Trustee and the Primary Beneficiary
shall be authorized, if deemed necessary or convenient, to conduct appraisals of the Trust Assets, the same which in all cases
shall be charged to Trustor A.

 

(d) In view of the foregoing, Trustor
and the Primary Beneficiary agree that Trustee shall not have any liability arising from the deposit of the Trust Assets in favor
of Trustor A, and that Trustor A shall be the only and exclusive party liable for the deposit of the Trust Assets.

 

EIGHTH.- OBLIGATIONS OF TRUSTOR.

 

(a)During the term of this Agreement,
Trustor agrees to do the following: (i) to defend the title and right of the Trustee and the Primary Beneficiary in and to the
Trust Estate against any claims and actions of any person other than the Trustee and the Primary Beneficiary; (ii) not to create,
incur, assume or permit the existence of any Encumbrance or options in favor of, or any claim of any person in connection with,
the Trust Estate or any portion thereof; (iii) not to sell, transfer, assign, pledge, deliver, transfer in trust, grant, usufruct
or dispose in any manner, or give any option with respect to the Trust Estate or any portion thereof, except as stated in Article
Seventh of this Agreement and in the measure expressly permitted in accordance with the Loan Agreement; and (iv) to execute and
deliver to the Trustee or the Primary Beneficiary those documents and carry out any action which is reasonably necessary in connection
with this Agreement or the Trust Estate, that the Trustee (acting in accordance with and pursuant to the instructions of the Primary
Beneficiary) or the Primary Beneficiary request in writing in order to protect and maintain the Trust Estate, as well as to pay
any and all costs and expenses arising from or relating to the foregoing, upon prior delivery of the corresponding documents to
Trustor.

 

(b)In accordance with article 401 of
the Law, Trustor expressly acknowledges that, being that Trustor A shall maintain possession of the Trust Assets, all risks of
loss, damages or decrease in the value of the Trust Assets put in trust by Trustor A, shall be solely and exclusively the obligation
of Trustor.

 

(c)Likewise, and in accordance with
article 400 of the Law, the parties agree that Trustor A shall maintain possession of the Trust Assets in its capacity as depositary,
and therefore, Trustor A shall be obligated to (i) preserve the Trust Assets put in trust by Trustor as if they belonged to Trustor
itself; (ii) not utilize them for purposes other than those mentioned in Article Seventh of this Agreement; and (iii) be responsible
for damages to third parties caused by their use. Trustor shall pay each and every cost and expense which is necessary and convenient
for the due preservation, repair, administration, and collection of the Trust Estate.

 

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(d)Trustor shall deliver to Trustee
and to the Primary Beneficiary, an electronic file (.txt or .xls) which contains a description of the following information relating
to the Trust Assets (or any portion of the same), within ten (10) Business Days following the date of execution of this Agreement:
(i) name of the machinery, (ii) location, (iii) date of the last appraisal and effectiveness, (iv) appraisal value, (v) currency
used in the appraisal and any other observation, if applicable.

 

(e) In accordance with that provided
for in Article 401 of the Law, if the fair market value of the Trust Estate devalues in such as way that it no longer covers the
Secured Obligations, Trustor shall contribute additional assets to the Trust which are sufficient to restore the original proportional
value of the Trust Assets in relation to the Loan. If Trustor does not do so, the Secured Obligations may be considered to be in
Default, in which case the Primary Beneficiary must notify the Trustor of such either judicially or by means of notary public,
with a copy to Trustee and pursuant to the terms of Clause Eleventh of this Agreement.

 

Trustor shall be the only party responsible
for determining the fair market value of the Trust Estate, without any liability to Trustee. The Primary Beneficiary, in its discretion,
may request for Trustor to provide a statement certifying to the best of its knowledge, the values requested by the Primary Beneficiary,
the fair market value of the Trust Estate in the event that Trustor is in Default.

 

NINTH.- DEFENSE OF THE TRUST ESTATE;
INDEMNITY.

 

(a)Trustee shall not be responsible
for facts, acts or omissions of authorities of the Trustor, of the Primary Beneficiary or of third parties which impede or make
the performance of the Purposes of the Trust difficult.

 

(b)Trustee shall always act in good
faith and shall not abandon, leave unguarded or cause or permit any damage to the Trust Assets for which it possesses legal title
in accordance with this Agreement, as long as it has knowledge of any event or fact which may directly affect the Trust Estate,
and taking into consideration that the Trust Assets are in the possession of Trustor A.

 

(c)In case the defense of the Trust
Estate is required before any third party, the Trustee shall grant powers of attorney for lawsuits and collections (which shall
not in any case be irrevocable) to the person or persons designated in writing by the Trustor, unless there is an existing Event
of Default and the Primary Beneficiary has delivered a Distribution Notice to the Trustee, in which case the Primary Beneficiary
shall have the exclusive authority to instruct Trustee in writing to revoke any powers of attorney previously granted and to grant
powers of attorney to the person or persons designated by the Primary Beneficiary for such purposes. However, Trustee shall not
assume any liability whatsoever with respect to the actions carried out by any of such attorneys-in-fact, and a provision stating
the same shall be included in the powers of attorney granted by the Trustee. Likewise, the attorneys-in-fact designated for the
defense of the Trust Estate shall accept that any and all costs, fees and expenses incurred by such attorneys-in-fact in the granting
or exercise of such powers of attorney shall be covered solely and exclusively by the Trustor, and that the Trustee shall have
no liability in connection therewith.

 

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All costs, fees and expenses incurred by
the designated attorneys-in-fact or incurred in the respective lawsuits shall be charged to Trustor, and Trustee shall not assume
responsibility of any kind for such matters. Notwithstanding the foregoing, in the event that the costs, fees and expenses relating
to the lawsuits are not paid by the Trustor, the Primary Beneficiary shall make payment for the same in order not to delay attention
to the referenced processes and proceedings, and Trustor agrees to reimburse the Primary Beneficiary within fifteen (15) Business
Days following said payment, for the corresponding amounts, upon prior delivery of the receipts and/or corresponding documentation
to Trustor.

 

In light of the foregoing, when Trustee
received any notice, lawsuit, or any claim which may in some way affect the Trust Estate, it shall make Trustor and Primary Beneficiary
aware of the same, as applicable, in order to proceed with the proceeding mentioned hereinabove, ceasing any liability to Trustee
by means of this notice.

 

(d)Trustor shall pay, on time, any
taxes, rights, contributions, impositions or charges of any kind which are determined or taxes by any governmental authority on
the Trust Estate, including its accessories (hereinafter the “Taxes on the Trust Estate”) which correspond in
accordance with applicable laws. Trustor shall deliver to Primary Beneficiary and to Trustee, when requested in writing, all of
the documents necessary in order to prove that the Taxes on the Trust Estate have been paid on time, in the proper manner, and
in their entirety.

 

(e)In the event of an emergency, Trustee
shall take such actions as are necessary in order to preserve the Trust Estate and the rights relating to the same, without assuming
any liability to Trustor and Primary Beneficiary for the results of its action, except in the event of negligence or bad faith
by Trustee. The foregoing is without prejudice to the obligation of the Trustor or the Primary Beneficiary, in case of an Event
of Default and a Distribution Notice, to instruct Trustee to issue sufficient powers of attorney and to initiate to the defense
of the Trust Estate pursuant to the terms of this Trust.

 

(f)Trustor hereby agrees to indemnify,
defend, and hold harmless Trustee, Primary Beneficiary, and their respective shareholders, officers, fiduciary delegates, directors,
employees, advisors and agents from and against any and all claims, demands, actions, obligations, damages, losses, liabilities,
costs and expenses (including reasonable attorneys’ fees) arising out of or relating to an Event of Default of this Agreement
by Trustor, or with respect to the Trust Estate or other agreements in which Trustor is a party when the rights of the Primary
Beneficiary and the Trustee under this Agreement or the Trust Estate are affected, except if it arose directly from negligence,
duress or bad faith. In the event that the Primary Beneficiary is responsible for such negligence, duress or bad faith, it shall
indemnify, defend, and hold harmless the other Parties, as well as their respective shareholders, officers, fiduciary delegates,
directors, employees, advisors and agents from and against any and all claims, demands, actions, obligations, damages, losses,
liabilities, costs and expenses (including reasonable attorneys’ fees), unless they arise directly from negligence, duress
or bad faith.

 

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TENTH.- WARRANTY OF TITLE.

 

Trustor shall be obligated and responsible
for the warranty of title of the Trust Estate or any portion of the same in accordance with applicable law.

 

Trustor herein authorizes Trustee and Primary
Beneficiary to assign, transfer or convey, in any manner, the rights arising from this Article and to be liable to any third party
who is an assignee of the Primary Beneficiary or to any third party who acquires an interest in the Trust Estate.

 

The rights arising from this Article shall
remain in full force and effect during the entire term in which the Secured Obligations remain outstanding.

 

ELEVENTH.- EVENTS OF DEFAULT.

 

(a)In the event of a continuing Event
of Default, (after the expiration of the applicable cure period available to cure the Event of Default, in accordance with the
Loan Agreement) and Trustee has received a Distribution Notice from the Primary Beneficiary, all of Trustor’s rights, in
accordance with Article Seventh or any other rights that Trustor shall have a right to exercise in accordance with this Agreement,
shall cease and shall subsequently be exercised by Trustee (in accordance with the instructions received in advance from the Primary
Beneficiary).

 

(b)Trustor herein expressly and irrevocably
accepts and authorizes Trustee so that upon Trustee’s receipt of a notice from the Primary Beneficiary it may (i) certify
that an Event of Default has occurred (the “Distribution Notice”); and (ii) request for Trustee to transfer,
pursuant to Article Twelfth of the Trust, and proceed with the procedure for an extrajudicial sale and distribution of the Trust
Estate in accordance with Article Twelfth of this Agreement. The Distribution Notice shall be prepared substantially in the form
of notice attached hereto as Exhibit “D”.

 

(c)Trustor shall give notice to Trustee
and the Primary Beneficiary within the Business Day following the date on which it becomes aware of the existence of an Event of
Default or of any event which constitutes or which by means of notice or by the lapse of time or both, may constitute an Event
of Default.

 

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(d)Trustor expressly acknowledges that
the Primary Beneficiary has executed the Loan Agreement and has issued or will issue the Loan and has funded or will fund such
amount to Trustor A in accordance with the Loan Agreement and that the essential inducement to the Primary Beneficiary is, among
others, the agreement of the Trustor and its express and irrevocable authorization to the Trustee to follow the procedure for the
extrajudicial sale and distribution of the Trust Estate set forth in Article Twelfth of this Agreement and in accordance with article
83 of the Law of Credit Institutions. Trustor hereby irrevocably agrees to abstain from filing, and hereby waives any right it
may have or which it may hereinafter acquire, to file any claim or lawsuit in connection with the validity, legality or enforceability
of the procedure for the extrajudicial sale and distribution of the Trust Estate set forth in Article Twelfth of this Agreement
and applicable laws. Trustor and the Primary Beneficiary hereby expressly agree that the matters set forth herein, which have been
expressly acknowledged by the Trustor, shall have the effect of a transaction to prevent future disputes, in accordance with Title
XVI of the Second Part of Book Four of the Federal Civil Code.

 

SPECIAL SECTION

EXTRAJUDICIAL SALE AND DISTRIBUTION

 

TWELFTH.-
PROCEDURE FOR THE EXTRAJUDICIAL SALE AND DISTRIBUTION OF THE TRUST ESTATE.

 

(a) Pursuant to article 403 of the Law,
the parties hereby expressly and irrevocably agree that at any time that a continuing Event of Default occurs, (after the expiration
of the applicable cure period available to cure the Event of Default, in accordance with the Loan Agreement) and Trustee has received
a Distribution Notice in accordance with this Agreement, Trustee shall proceed with the extra-judicial sale and distribution of
all of the Trust Assets in accordance with the procedure described in this Article.

 

(b) The Distribution Notice shall include
the outstanding payment due on the Loan, including its accessories, whether interest, commissions, expenses or other amounts which
are due and payable in accordance with the Loan and which have been incurred up to the date of the Distribution Notice (the date
that the Distribution Notice is delivered to Trustee shall hereinafter be referred to as the “Notice Date”),
as well as a description of the breach or breaches of the Loan by Trustor and a description of the Designated Assets (as such term
is defined herein below).

 

(c) Trustor shall pay Trustee, in advance,
the reasonable amounts required by such, to pay the costs and expenses that Trustee must pay in order to conduct the execution
procedure described in this article, to conduct the sale of the Trust Assets. Upon non-payment by Trustor, the Primary Beneficiary
shall pay such amounts, and in the event that there are not sufficient funds, Trustee may abstain from implementing such procedure.
Under no circumstance shall Trustee cover the aforementioned costs and expenses with its own resources. For such purposes, Trustee
shall send a notice to Trustor and the Primary Beneficiary, specifying the amount required by the Trustee in order to pay such
items. Trustee shall register and retain proof or receipts or other evidence of the expenses incurred. Any amount paid by and of
the aforementioned Parties shall be deducted from the amount obtained from the sale of the Trust Assets and paid to the respective
party.

 

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(d) The Primary Beneficiary will be entitled,
at any time (following the delivery of a Distribution Notice), by means of a written notice delivered to Trustee (each such notice,
a “Suspension Notice”), to instruct Trustee to suspend, in whole or in part, and with as much diligence as possible,
the procedure for the extrajudicial sale and distribution of the Trust Estate initiated pursuant to such Distribution Notice, provided,
however, that such suspension shall cease to be effective, in whole or in part, from the date Trustee receives from the
Primary Beneficiary, one or more instructions in writing (each such notice, a “Continuation Notice”) instructing
Trustee to continue, in whole or in part, with the suspended procedure for the extrajudicial sale and distribution of the Trust
Estate .

 

Once Trustee receives the corresponding
Continuation Notice, Trustee shall continue with the procedure for the extrajudicial sale and distribution of the Trust Estate
in accordance with this Special Section and the written instructions of the Primary Beneficiary.

 

(e) Trustee shall give written notice to
Trustor (the "Trustee Notice"), with copy to the Primary Beneficiary, indicating that it has received a Distribution
Notice and attach a copy of the same, as soon as possible but in any event no later than the Business Day immediately following
the date on which the Trustee receives the Distribution Notice by means of a notary public, public courier or via voluntary jurisdiction
at those addresses indicated in Article Eighteenth of this Agreement. Additionally, in the Trustee Notice, Trustee shall instruct
Trustor to deliver the physical possession and/or to put it at the disposition of the person designated by the Primary Beneficiary
in the Distribution Notice, each and every one of the Trust Assets that make up the Trust Estate no later than forty-five (45)
calendar days following the expiration of the Definite Term (as such term is defined herein below). The person that has been designated
by the Primary Beneficiary for the purposes indicated herein, shall be the depositary of the Trust Assets. Within 3 (three) Business
Days after the date the Trustor receives the Trustee Notice (or the date on which the publication referred to in the last paragraph
of this subsection (e) was conducted) (the "Definite Term"), Trustor shall be entitled to present documentation
demonstrating to the satisfaction of the Trustee and the Primary Beneficiary, (i) that it has cured and/or has complied with the
obligations giving rise to the Event of Default described in the Distribution Notice attached to the Trustee Notice and to present
written proof to the Primary Beneficiary, and/or (ii) compliance with the full payment of the amount due in the manner and pursuant
to the terms agreed upon in the Loan Agreement and/or (iii) submit to Primary Beneficiary (and to the Trustee) documentation to
verify the renewal, extension of time or temporary waiver of the obligation(s) which gave rise to the Event of Default or, alternatively,
deliver to the Trustee the amount indicated in the Distribution Notice (such notice, a "Notice of Compliance").

 

If the Definite Term expires and the Event
of Default continues without the Trustor delivering to Trustee and the Primary Beneficiary a Notice of Compliance, the Trustor
shall comply with the instructions issued by the Trustee in the Trustee's Notice, in accordance with the preceding paragraph.

 

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If Trustor conducts acts or omissions or
prevents or hinders in any way delivery of the Trustee’s Notice by Trustee, so that Trustee is prevented from delivering
such, Trustee shall give notice of the Trustee’s Notice by means of publication as soon as possible, in a notice in the newspaper
"Reforma" or a notice in the newspaper "El Informador" or in the Official Daily Gazette of the Federation,
or if such newspapers cease to be published, in any of the major newspapers in Mexico City, Federal District.

 

(f) Once the Trustor
delivers such Trust Assets that make up the Trust Estate, Trustee shall proceed as directed in writing by the Primary Beneficiary
for such purposes, with the extrajudicial sale, for consideration, of all or part of the Trust Estate, as such assets are specifically
designated by the Primary Beneficiary in the Distribution Notice (the "Designated Assets"). In connection with such sale,
the Trustee shall, upon receipt of the corresponding Distribution Notice from the Primary Beneficiary, proceed as follows:

 

(i)                
The Primary Beneficiary shall first deliver to the Trustee, without the intervention of Trustor, a list of potential purchasers
of the Designated Assets.

 

(ii) Trustee shall, in accordance
with written instructions from the Primary Beneficiary, privately deliver a notice of sale for the auction of the Designated Assets
to prospective purchasers indicated by the Primary Beneficiary (a "Notice of Sale"). The Notice of Sale shall
be delivered by Trustee as soon as possible but no later than 10 (ten) Business Days prior to the expected date of the auction.
The Notice of Sale shall be prepared substantially in terms of the form attached hereto as Exhibit "F"
and shall indicate, among other things, the place and time that the auction will be held, the Reference Price (as defined in the
following paragraph), and establish that the sale is the result of the extrajudicial sale and distribution of the Trust Estate
pursuant to the terms of this Agreement.

 

The Reference Price stated in
the Notice of Sale (hereinafter the "Reference Price") shall be in Dollars and will be determined by an expert
appraiser approved by a lending institution designated by the Primary Beneficiary by means of an appraisal reflected in Dollars,
of the Designated Goods that make up the Guaranty Trust. Once the Trustee receives the Reference Price of the Designated Assets,
the Trustee shall notify the Trustor and the Primary Beneficiary. The cost of such appraisal shall be borne by the Trustor or,
if applicable, the Primary Beneficiary in terms of subsection (c) above.

 

(iii)Also, the Notice of
Sale shall provide that (i) any person interested in participating in the auction shall deposit with the Trustee an amount at least
equal to 10% (ten percent) of the Reference Price set out in the Notice of Sale, by means of certificates of deposit issued by
authorized credit institutions, at least 2 (two) Business Days prior to the date of the auction (the "Deposit"),
(ii) any bid shall not be accepted or considered valid unless the Deposit is established in the terms and within the period referred
to above, and (iii) the bids of participants must be at least equal to the applicable Reference Price. The Trustee, upon prior
instructions from Primary Beneficiary, shall transfer the Designated Assets in favor of the bidder who has offered the highest
bid (the "Highest Bidder"), which in any case must be at least an amount equal to the applicable Reference Price.
In case two or more persons have submitted equal bids and they are the highest bids, the Primary Beneficiary in its discretion
shall designate a person to whom the Trustee will transfer the Designated Assets and such will be considered, for this purpose,
as the Highest Bidder.

 

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(iv)The Highest Bidder shall
pay to the Trustee (in immediately available funds), the balance of its bids (which in any case must be at least equivalent to
the applicable Reference Price) at the time that the transfer of the Designated Assets are transferred to the Highest Bidder pursuant
to applicable law. In the event that the transfer of the Designated Goods is not carried out for any reason attributable to the
Highest Bidder, (x) the Highest Bidder will lose the Deposit delivered to the Trustee for the benefit of the Trust Estate; and
(y) the Trustee will sell the Designated Assets in accordance with the instructions of the Primary Beneficiary, to the next Highest
Bidder, to the extent that its bid is at least equal to the applicable Reference Price. This paragraph (iv) must be transcribed
word for word in the Notice of Sale.

 

(v)In
the event that the Trustee is unable to carry out the sale of the Designated Assets in the first auction, then, in accordance with
written instructions from the Primary Beneficiary, the Trustee shall deliver to prospective purchasers of the Designated Assets,
who shall be designated by the Primary Beneficiary in terms of subsection (f) (i) above. The original Reference Price in the Notice
of Sale will be reduced by 2.5% (two point five percent) every 60 (sixty) calendar days in case the sale is not conducted. In this
regard, the corresponding Notice of Sale shall provide that the Trustee shall not offer the Designated Goods for less than the
reduced Reference Price, as appropriate (upon receiving an offer from a good faith purchaser). If within a period of 12 (twelve)
months, there shall be a new assessment, in Dollars, of the Designated Assets that constitute the Guaranty Trust, by an expert
appraiser authorized by a lending institution designated by the Primary Beneficiary. The value provided by the new appraisal will
be considered, for all purposes, as the Reference Price. Once the Trustee receives the new Reference Price of the Designated Assets,
it shall notify Trustor and the Primary Beneficiary. If the Reference Price is adjusted so that it is equal to or less than the
balance of the Guaranteed Obligations and accessories, the Primary Beneficiary shall have the right to ask Trustee to adjust the
Designated Assets pertaining to the Guaranty Trust to pay the balance of the Guaranteed Obligations and accessories. The second
or subsequent Notices of Sale for the Designated Assets shall be given in accordance with and subject to the provisions of paragraphs
(i), (ii), (iii) (iv) and (v) of this subsection (f).

 

(g) The contract of sale to be entered
into by and between Trustee and the Highest Bidder who will acquire all of the Trust Assets, or where appropriate, the Designated
Assets, must establish that payment of the price shall be in Dollars and shall be made upon execution.

 

    	23

    	 

    
 

The amounts received by the Trustee for
the sale of all of the Trust Assets or, where applicable, the Designated Assets, which constitute the Guaranty Trust shall be applied
as follows: (i) first to the payment of any and all taxes that are generated from such transfer, (ii) second to the outstanding
trust fees, in accordance with the provisions of Article Fifteenth of the Agreement, (iii) third, to payment or reimbursement of
costs of implementation of the Guaranty Trust, (iv) fourth, to pay the amount indicated by the Primary Beneficiary in the Distribution
Notice, which, once made, shall release Trustor from the Guaranteed Obligations whenever the amount of resources obtained from
the sale and distribution of the Guaranty Trust are sufficient to liquidate the Guaranteed Obligations, being that if they were
insufficient, Trustor A would not be released from the Secured Obligations under the Loan Agreement; and (v) fifth, the remainder
of the funds obtained from the sale and distribution of the Guaranty Trust shall be returned to Trustor in relation to the assets
transferred to this Trust.

 

(h) It is expressly agreed between
the Parties in the event that the proceeds from the sale of the Trust Estate are not sufficient to fully cover the Guaranteed Obligations
or any other amount owed to the Primary Beneficiary or Trustee under this Agreement, including without limitation, any fees and
expenses incurred by the Primary Beneficiary or Trustee in connection with this Agreement or in connection with the sale of the
Trust Estate, the Primary Beneficiary and the Trustee expressly reserve any and all rights which they may have to exercise to receive
full payment of any such amounts.

 

(i) The Trustor agrees to perform or
cause to be carried out, all acts or initiate any and all procedures necessary or convenient in order for the Trustee (acting in
accordance with written instructions from the Primary Beneficiary) to carry out the extrajudicial sale and distribution of the
Trust Estate (or any part thereof) in the manner provided in this article. The Grantor further agrees to perform or cause to be
carried out all acts necessary or appropriate to expedite the sale, assignment or transfer of all or any part of the Trust Estate,
and to execute and deliver any documents and take any other action that the Trustee (acting under the instructions of the Primary
Beneficiary) or the Primary Beneficiary deems necessary or desirable for the purpose of such sale, assignment or transfer to be
is made in accordance with applicable law.

 

(j) Being that the Secured Obligations
consist of monetary obligations denominated in Dollars, for payment of such Secured Obligations, the proceeds of the extrajudicial
sale and distribution of the Trust Estate or any portion thereof must be received in Dollars.

 

In accordance with the provisions of Article
403 (four hundred and three) of the General Law of Instruments and Credit Operations, the Parties signed the text of this Special
Section in a separate document, in addition to signing this Agreement, expressing their express consent and irrevocable instruction
to the Trustee to follow the procedure for extrajudicial sale and distribution of the Trust Estate under this Special Section,
which is attached hereto as Exhibit "E".

 

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THIRTEENTH.- LEGAL PROHIBITIONS.-
For the purposes stated in item 5.5 of the provisions that Bank of Mexico (Banco de México)
issued on the subject matter of Trusts, by means of circular 1/2005, Trustee makes the other parties to this Agreement
aware of the text of the following articles which establish prohibitions on the fiduciary institution in the execution of trusts:

 

--- From
The General Law of Instruments and Credit Operations:

 

---Article
382. .“...A trust established in favor of the TRUSTEE is null, except that which is provided for in the following paragraph,
and other applicable legal provisions.

---The
fiduciary institution may be a trustee in Trusts in which the purpose is to serve as an instrument for the payment of unsatisfied
obligations, in the event of loans issued by such institution for the performance of business activities. For the purposes thereof,
the parties must establish the terms and conditions to resolve potential conflicts of interest...”

 

---Article 394. “Prohibited
matters: 

 

---I.
Secret Trusts; 

---II.
Those in which the benefit is granted successively to different persons which must
be substituted by the death of the prior one, except in the case in which the substitution is made in favor of persons that are
alive or already conceived, upon the death of the Trustors; and 

---III.
Those in which the duration is more than fifty (50) years, when a legal entity that is not an entity under public law or a charitable
institution, is named as a beneficiary. Nonetheless, a Trust with a duration of more than 50 years can be established when the
purpose of the Trust is the maintenance of a non-profit scientific or artistic museum...”.

 

---From
The Law Of Credit Institutions:

 

“ARTICLE
106. Credit institutions shall be prohibited from:

---XIX.-
In the undertaking of operations that are referred to in subsection XV of article 46
of this Law:

---a)
Repealed

---b)
Being liable to the Trustor, grantors, and principals for the breach of payment obligations
for the loans issued, or the grantors, for the values that are acquired, unless it is their fault, according to that set forth
in the final part of Article 391 of the General Law of Instruments and Credit Operations, or guarantee the return of funds that
are entrusted to them. 

---If
at the end of the trust, mandate or commission established for the granting of loans, such have not been liquidated by the debtors,
the institution shall transfer them to the trustee or trustor, as the case may be, or to the principal, abstaining from covering
their payment.

 

    	25

    	 

    
 

---In
the trust, mandate, or commission agreements, there will be inserted in a conspicuous manner that set forth in this subsection
together with a statement from the fiduciary to the effect that its content was unequivocally provided to the persons who have
received property or rights with respect to the trust;

---c)
Acting as trustees, principals or commission agents in trusts, agencies or commissions,
respectively, that directly or indirectly, receive public funds by means of any act that causes either a direct or an indirect
liability, with the exception of those trusts established by the Federal Government through the Treasury and Public Credit Department,
and trusts in which securities are issued that are registered in the National Securities Registry pursuant to that set forth in
the Securities Market Law;

---d)
Carry out trusts, agencies or commissions referenced in the second paragraph of article 88 of the Investment Association Law;

---e)
Acting in trusts, agencies or commissions by means of which limitations and prohibitions contained in financial laws are evaded;

---f)
Utilizing funds or securities from the trusts, agencies or commissions dedicated for
the issuance of loans, in which the trustee has discretionary authority, in the granting of such to undertake operations by virtue
of which result or could result in the following becoming debtors: their fiduciary delegates, the members of the board of directors
or advisory board, as the case may be, owners and alternates, whether they are in office or not; the institution’s employees
and officers, owners who are inspectors or alternate inspectors, whether in office or not; the external auditors of the institution,
the members of the respective technical trust committee, relatives of the first degree or spouses of the aforementioned persons,
the meetings of companies in which said persons constitute a majority or the same institutions, as well as those persons which
the Bank of Mexico determines by means of dispositions of a general nature;

---g)
Managing rustic properties, unless they have received management for the distribution
of the assets among heirs, beneficiaries, associates or creditors, or to pay any obligation or to guarantee its compliance with
the value of said property or its products, and in these cases without the term of the management exceeding two years, except
in the event of a production trust or a guarantee trust;

---h)
Enter into trusts which manage amounts of money which are periodically contributed by groups of consumers integrated by means
of commercialization systems, earmarked for the acquisition of certain properties or services, as those listed in the Federal
Consumer Protection Law.------

---Any
agreement contrary to that set forth in the preceding subsections shall be null.”------

  

    	26

    	 

    
 

---FROM
THE 1/2005 CIRCULAR FROM BANK OF MEXICO (BANCO DE MÉXICO)

---“...6.1
In the execution of Trusts, Fiduciary Institutions are prohibited from doing the following:

---a)
Charging the Trust Estate prices different from those agreed upon when the operation
in question was agreed upon;

---b)
Guaranteeing the returns or prices of the funds whose investment is entrusted to it,
and 

---c)
Undertaking transactions that are contrary to its internal policies and prudent financial
practices.

---6.2
Fiduciary Institutions cannot execute transactions with securities, credit instruments
or any other financial instruments that do not comply with the specifications agreed upon in the corresponding Trust Agreement.

---6.3
Fiduciary Institutions cannot undertake Trusts that are of a type which they are not authorized to execute in accordance with
the laws and provisions that regulate the same.

----6.4 In no event may any Fiduciary Institution charge against the Trust Assets
entrusted to them for payment of any sanction that is imposed on them by any authority. 

---6.5
In Guaranty Trusts, Financial Institutions and SOFOLES (Special Purpose Non-Bank Financial Institutions) they shall only receive
goods or rights for purposes of guarantying the obligations involved.

---6.6
Fiduciary Institutions must follow that set forth in article 106 of subsection XIX of Credit Institutions Law, 103 section IX
of the Security Markets Law, 62 section VI of the General Law of Mutual Insurance Institutions and Associations, 60 section VI
Bis of the Federal Financial Institution Law, and 16 of the Organizational Law of Rural Finance, as the case may be for each institution...”.

 

 

FOURTEENTH.- TAXES AND EXPENSES.

 

(a)All taxes, costs, expenses, commissions,
Taxes on the Trust Estate and fees arising from the preparation and execution of this Agreement, and in connection with any amendment
hereof in accordance with Article Seventeenth of this Agreement, as well as by any action or document, which must be carried out,
prepared, executed or notified pursuant to this Agreement, including, without limitation, reasonable attorneys fees of the legal
advisors of Primary Beneficiary and Trustee, as well as any and all reasonable costs and expenses incurred by Primary Beneficiary
and Trustee in the fulfillment of their respective obligations, in the exercise of their respective rights in accordance with this
Agreement and in the distribution of the Trust Estate, shall be fully and exclusively covered by the Trustor.

 

(b)In the event that for any reason
the Primary Beneficiary pays, on the account of the Trustor (or any of them), any such fees, costs or expenses, Trustor agrees
to immediately reimburse the Primary Beneficiary, as applicable, upon Trustor’s request, the amounts paid along with a penalty
on such amounts upon the prior delivery to Trustor of the corresponding receipts and/or documentation. The penalty shall be calculated
by multiplying the amount of the fees, costs and expenses paid by the Primary Beneficiary by 0.003 by the number of calendar days
from the date of payment until it is reimbursed.

 

(c) Trustor shall indemnify and hold harmless
Trustee in the event of a fiscal contingency arising from the transaction in this Agreement, as long as the same does not arise
from the fault or negligence of Trustee or of the Primary Beneficiary (including reasonable fees and expenses, duly documented,
from fiscal and legal advisors).

 

    	27

    	 

    
 

(d) Trustor herein represents that based
on article sixteen (16) of the Fixed Rate Corporate Tax Law published in the Official Daily Gazette of the Federation on October
1, 2007, it shall comply with the obligations established in such law, releasing Trustee from all liability relating to the performance
of the same, being that they are the strict responsibility of Trustor.

 

(e) In accordance with section II second
of rule I.11.2 of the Miscellaneous Fiscal Resolution in effect and for purposes of the Tax on Cash Deposits, in the event that
such arise, Trustor A herein declares and represents that the deposits received in the accounts opened in the name of the Agreement
shall be considered its own. For purposes of the foregoing, it desires for the proof of the withholdings of such tax to be issued
with tax ID (RFC) NMM041015IZA for all accounts opened by Trustee for such purpose.

 

(f) If in the event for any reason, the
fiscal authorities require the payment of any contribution to Trustee, it will provide timely notice of the same to Trustor within
two (2) Business Days following the date on which Trustee receives notice from the corresponding authority, with copy to the Primary
Beneficiary, so that in compliance with this responsibility, Trustor can carry out the necessary transactions and payments.

 

FIFTEENTH.- TRUSTEE FEES.

As consideration for its services in accordance
with this Agreement, Trustor shall pay Trustee the fees established as follows, with the understanding that such amounts do not
include the corresponding value added tax:

 

		a)	Fees for acceptance of the position of Trustee: $2,149.00 USD (Two Thousand One Hundred
Forty-nine and 00/100 Dollars), plus the corresponding value added tax (VAT), payable in one lump sum upon the execution of this
Agreement.

 

		b)	Fees for Management of the Trust. $3,471.00 USD (Three Thousand Four Hundred Seventy-one
and 00/100 Dollars) annually or its corresponding portion, plus the corresponding value added tax (VAT), payable on an annual basis,
in advance, with the understanding that the first annual payment shall be paid upon the execution of this Agreement.

 

		c)	Fees in the Event of Distribution: 1.5% (One point five percent) on the value of the Trust
Estate, plus the corresponding value added tax (VAT), payable at the beginning of the distribution process.

 

		d)	Fees for Amendments to the Trust. $500.00 USD (Five Hundred and 00/100 Dollars), plus the
corresponding value added tax on each occasion on which this Agreement is amended. The following shall be understood to be amendments,
cases in which amendment agreements must be signed, without these going beyond the purposes originally agreed upon. In the event
that there are changes to the purposes agreed upon, including but not limited to an increase in the assets in Trust or the amount
of the loan which it secures, the Parties, upon mutual agreement, shall agree upon the new Trustee fees.

 

    	28

    	 

    
 

		e)	Fees for the granting of powers. $250.00 USD (Two Hundred and Fifty and 00/100 Dollars),
for each instrument signed by Trustee, plus the corresponding value added tax.

 

		f)	Fees for public or private instruments in which Trustee is involved. $500.00 USD (Five Hundred
and 00/100 Dollars), plus the corresponding value added tax.

 

		g)	Trustee Fees for the execution of acts different from those provided in this proposal, shall
be established by Trustee, upon prior approval by the Parties, in accordance with the terms and conditions of each particular case,
establishing the minimum fee of $250.00 USD (Two Hundred and Fifty and 00/100 Dollars), plus the corresponding value added tax.

 

The trustee fees referenced in the foregoing
subsections b), d), e), f) and g) shall be adjusted annually, based on variations in the Investment Unit (UDI) that is in effect
published by Bank of Mexico (Banco de México) in the Official Daily Gazette of the Federation.

 

All of the costs arising from the banking
or financial services that are incurred for purposes of the transaction contemplated by this Agreement, shall be charged to the
estate of the same, in accordance with the effective fees of the institutions with which the mentioned financial services are contracted.

 

Trustor and the Primary Beneficiary expressly
grant their agreement and authorization so that, in the event that resources exist, the trustee fees shall be applied and paid
out of the Trust Estate automatically.

 

Trustor and the Primary Beneficiary, by
means of the execution of this Agreement, expressly grant their agreement and authorization so that in the event of a default in
payment of the Trustee’s fees it shall proceed in the following manner:

 

		A)	Not process any instructions relating to the Agreement until such time as the fees are paid in
full, without liability to Trustee for ceasing to comply with the Purposes of the Trust or for the possible damages, losses or
inconveniences that arise as a result of ceasing to comply with such purposes, for which Trustor and the Primary Beneficiary release
Trustee from said liability and personally assume the same.

 

		B)	If the default in the payment of fees continues for six (6) calendar months, the Parties agree
to consider said default for purposes of this Agreement, as a serious cause so that Trustee can excuse itself and resign from its
position before a Judge of First Instance, requesting that another institution be named in order to serve as a substitute or that
the Trust be terminated in accordance with articles 391 and 385 of the General Law of Securities and Credit Operations, without
prejudice to the actions that may be exercised by Trustee for the collection of the outstanding fees.

 

    	29

    	 

    
 

Trustee shall charge penalty interest on
the unpaid balance from the date of default and until they are paid in full, at an annual interest rate equivalent to double the
Interbank Interest Rate for a period of twenty-eight (28) days (TIIE), published in the Official Daily Gazette of the Federation
by Bank of Mexico (Banco de México) on the date of commencement of the Default Interest Period, plus 5 (five) percentage
points.

 

For purposes of this Agreement, the “Default
Interest Period” shall mean: Each of the periods for the calculation of default interest on the principal (amount of
debt for fees), twenty-eight calendar days each, based on which the default interest accruing on the unpaid principal balance is
calculated, with the understanding that the first Default Interest Period shall commence on the date of default and shall terminate
twenty-eight calendar days later, the second interest period starts on the day on which the immediately preceding Interest Period
expires and ending twenty-eight calendar days later and so on until the date of full payment, in which case the last Default Interest
Period shall be adjusted to the payment date.

 

The calculation of Default Interest shall
be made using the procedure of calendar days actually elapsed divided by 360 (three hundred sixty).

 

All taxes, fees and reasonable expenses
(including travel expenses and per diem if applicable) shall be paid in advance to the Trustee for and on behalf of Trustor.

 

Similarly, the Parties that sign this Agreement
acknowledge and agree that the following is the information of the person who should be invoiced for the trustee fees referenced
in this article:

 

Name or Corporate Name of the person to
whom the invoice(s) will be issued: Nexus Magnéticos de México, S. de R.L. de C.V.

 

Federal Taxpayer Identification Number
(RFC): NMM041015IZA

 

Physical Address: Sección 44-A Tercera Unidad del Bajo
Río San Juan SN Parque Industrial Reynosa, Reynosa, Tamaulipas, 88780.

 

SIXTEENTH.- ASSIGNMENT.

 

The rights and obligations derived from
this Agreement shall not be assigned or transferred by Trustor or Trustee to any third party without the prior written consent
of the Primary Beneficiary. The Primary Beneficiary may assign or transfer, in whole or in part, its rights derived from this Agreement
upon prior written notice to Trustee and Trustor at least thirty (30) Business Days in advance of the effective date of such assignment,
by means of which the Primary Beneficiary shall indicate the third party who will be the new Primary Beneficiary, without requiring
the consent of Trustee or the Trustor in order to undertake such assignment or transfer.

 

    	30

    	 

    
 

In the event that the Trustor or Primary
Beneficiary transfer or assign their rights to third parties that do not meet the requirements and institutional policies of the
Trustee, the Trustee shall notify the parties of its resignation pursuant to the terms of subparagraph b) of Article Twenty-fourth
of this Agreement.

 

SEVENTEENTH.- AMENDMENT.

 

This Agreement shall only be amended upon
the written consent of the Trustor, Primary Beneficiary, and Trustee.

 

EIGHTEENTH.- NOTICES.

 

All notices among the parties shall be
given in writing, in Spanish, and shall be delivered in one of the follow manners (i) personally, return receipt requested; (ii)
by courier, return receipt requested; or (iii) via facsimile, followed by courier or personal delivery, return receipt requested.
All notices shall be submitted to the following addresses and facsimile numbers, and shall take full effect when the original notice
is delivered in accordance with the form and manners established herein:

 

To Trustor A:

 

Nexus Magnéticos
de México, S. de R.L. de C.V:

Sección 44-A Tercera Unidad
del Bajo Río San Juan

(SN) Parque Industrial,

Reynosa,
Tamaulipas C.P.88780.

Attention: Nathan
Jacob Mazurek, Sole Manager

 

To Trustor B:

 

Designates the following as its
notice address solely for the purpose of receiving notices. Additionally, a copy shall be sent via facsimile to the number indicated
herein below:

 

Jefferson Electric,
Inc.

Sección 44-A Tercera Unidad
del Bajo Río San Juan

(SN) Parque Industrial,

Reynosa, Tamaulipas
C.P.88780.

Facsimile: (414) 209-1621Attention: Thomas
David Klink, President

 

With a courtesy copy via facsimile to:

 

Pioneer Power Solutions, Inc.

400 Kelby Street, 9th Floor,

Fort Lee, NJ, 07024, United States of America

Facsimile: (212) 867-1325

Attention: Andrew Minkow,
CFO and Director

 

    	31

    	 

    
 

To Primary Beneficiary:

 

GE CF México, S.A. de C.V.

Antonio Dovalí Jaime No.
70, Torre A, Piso 5

Colonia Santa Fe, Delegación
Álvaro Obregón

C.P. 01210,
México, Distrito Federal

Attention: Director of Risk

 

To Trustee:

 

Banco Invex, S.A.,
Institución de Banca Múltiple,

Invex Grupo Financiero,
Trustee

Torre ING, Ave. Batallón
de San Patricio 111-1202, Piso 12

Colonia Valle Oriente,
San Pedro Garza García, N.L., C.P. 66269

Attention: Lic. Mario
Rafael Esquivel Perpuli and/or Lic. Nabor Medina Garza

 

NINETEENTH.- EXHIBITS AND HEADINGS.

 

All of the documents attached as exhibits
to this Agreement form an integral part of this Agreement as if they were inserted verbatim herein. The titles and headings included
in this Agreement shall be utilized only for purposes of convenience and shall not affect the interpretation of this Agreement.

 

TWENTIETH.- ADDITIONAL OBLIGATIONS.

 

Trustor agrees, upon the request of Trustee
or the Primary Beneficiary, and upon prior review and approval by Trustor, to sign and deliver or cause the signature and delivery
to Trustee or the Primary Beneficiary, of each and every one of the agreements, contracts, instruments, notifications, notices
and other documents which are necessary or reasonably convenient for Trustee or the Primary Beneficiary, including but not limited
to, supplements to this Agreement, to effect (i) perfection and protection of the transfer of title in the Trust Assets, whether
present or future, which make up the Trust Estate, in favor of Trustee, and protect and preserve the rights and actions of Trustee
and the Primary Beneficiary under this Agreement; and (ii) comply with the terms and give full effect to the objective of this
Agreement.

 

TWENTY-FIRST.- CONFIDENTIAL INFORMATION.

 

Trustor herein
expressly authorizes and empowers Trustee or the Primary Beneficiary to dispose, transfer, report or share any Confidential Information
with any companies, organizations, headquarters and other affiliates and subsidiaries that make up the financial and accounting
organization of General Electric Company, both in Mexico and abroad for purposes relating to processes, approvals, monitoring,
statistical evaluations, financial projections, internal reports, audits and any related processes that are necessary.

 

    	32

    	 

    
 

Trustee and the
Primary Beneficiary hereby agree that the Confidential Information shall not be disclosed, in whole or in part, to third
parties or any of its Affiliates or subsidiaries that are not part of their financial and accounting organization, including but
not limited to GE Energy, without the prior written consent of Trustor, except as provided in the preceding paragraph.

 

The term "Confidential Information"
shall mean the commercial or financial information owned by Trustor that was disclosed in an oral, written, graphic or electromagnetic
manner, and is provided to Trustee or the Primary Beneficiary, including but not limited to procedures, strategies, technical,
financial and business information, customer lists or current or potential partners, business proposals, investment projects, plans,
reports, marketing projects or any other proprietary information, but excluding trade secrets.

 

The term Confidential Information excludes
information that: (1) Trustee and/or the Primary Beneficiary has obtained from a source that, after doing a reasonable investigation,
has not been found to be subject to confidentiality restrictions, (2) is independently developed or acquired by the Trustee and/or
the Primary Beneficiary without violating the provisions of this Agreement, (3) is disclosed by the Trustee and/or the Primary
Beneficiary upon prior written consent of the Trustor, and (4 ) is in the public domain.

 

TWENTY-SECOND.- JURISDICTION AND GOVERNING
LAW.

 

This Agreement shall be governed by and
interpreted in accordance with the laws of the United Mexican States. Trustor, the Primary Beneficiary and Trustee irrevocably
submit to the jurisdiction of the competent courts in Mexico, Federal District, Mexico, with respect to matters arising from or
relating to this Agreement. Trustor, the Primary Beneficiary and Trustee waive any other jurisdiction or venue which may correspond
by reason of their present of any future domiciles or for any other reason.

 

Trustor, the Primary Beneficiary and Trustee
agree that (i) they shall be subject to the exclusive jurisdiction of the courts located in Mexico, Federal District, Mexico, with
respect to this Agreement, the contemplated transactions and arising from the same and therefore, they may not be sued or judicially
required in other courts or jurisdictional agencies and, (ii) Trustee also shall not be subject to a lawsuit in a court outside
of Mexico, with respect to this Agreement, relating to the transactions contemplated by and arising from this Agreement.

 

    	33

    	 

    
 

TWENTY-THIRD.- RECORDATION.

 

Trustor shall undertake the recordation
of this Agreement in the Sole Registry of Personal Property Security Interests, in accordance with the applicable rules and provide
evidence of the same to Trustee and the Primary Beneficiary. For such purpose, it shall deliver to Trustee and Primary Beneficiary
a letter issued by the undersigned Notary in charge of conducting such recordation, which certifies that no later than within five
(5) Business Days following the date that it receives instructions from Trustor and the Primary Beneficiary to record this Agreement
in accordance with this paragraph, the recordation of the Agreement shall be delivered to the referenced Registry.

 

Trustor agrees to deliver to Trustee, with
copy to the Primary Beneficiary, as soon as possible but no later than within 90 (ninety) calendar days following the date of execution
of this Agreement, the first testimony (original) of this Agreement with the proof of recordation in the Sole Registry of Personal
Property Security Interests in accordance with this Article.

 

With respect to the applicable law on the
subject matter, the Primary Beneficiary authorizes Trustor to conduct the recordation of this Trust in the Sole Registry of Personal
Property Security Interests pursuant to the terms of this Article Twenty-third.

 

TWENTY-FOURTH.- RESIGNATION
AND SUBSTITUTION OF TRUSTEE.

 

(a) Removal from the position of
trustee. In accordance with the third paragraph of article 385 of the Law, Trustee may be removed from its position by the
Primary Beneficiary. In the event of removal, the Primary Beneficiary shall request the same in writing at least 20 (twenty) Business
Days prior to the date that such removal is to be effective.

 

(b)Resignation from the position
of Trustee. In accordance with the third paragraph of article 385 of the Law, Trustee may resign from its position in the following
circumstances: (i) when it is not paid its fees and expenses pursuant to the terms of this Agreement, (ii) in the event that Trustor
or the Primary Beneficiary assign or transfer their rights to third parties which do not comply with the institutional requirements
and policies of Trustee, (iii) in the event that during the term of this Agreement, any of the parties to this Agreement cease
to comply with the institutional requirements and policies of Trustee, (iv) in the event that Trustor or the Primary Beneficiary
require that it conduct activities that are contrary to or greater than those contemplated by this agreement, or (v) in the event
that any of the Parties have made a false representation.

 

Trustee shall notify the parties of its
resignation in writing. Such resignation shall not be effective until 45 (forty-five) calendar days following the notice, during
this time period Trustee agrees to assist the parties in order to substitute the trustee; with the understanding that the resignation
will not be effective until the new trustee takes its position and possession of the Trust Assets has been transferred to said
new trustee.

 

(c)Upon the designation of the substitute
trustee, it shall acquire title to all of the Trust Assets, and it shall possess all of the authority, rights, powers and obligations
in accordance with this Agreement.

 

    	34

    	 

    
 

TWENTY-FIFTH.- INDEMNIFICATION OF TRUSTEE.

 

Trustor and the Primary Beneficiary shall,
defend, and hold harmless Trustee, as well as its shareholders, fiduciary delegates, officers, employees, advisors and attorneys-in-fact
from and against any and all liabilities, damages, obligations, lawsuits, judgments, transactions, requirements, reasonable costs
and expenses of any nature including reasonable attorneys’ fees, obtained, resulting from, imposed upon, or incurred by,
for purposes of or as a consequence of, actions taken by Trustee for the performance of the Purposes of the Trust, and the defense
of the Trust Estate (except if they are a consequence of the duress, negligence or bad faith of Trustee or when Trustee undertakes
any act that is not expressly authorized by this Agreement) or for fines, penalties or any other debt of any kind in relation to
the Trust Estate or this Agreement, whether before administrative, judicial, or arbitral authorities or of any other nature, whether
local or federal, domestic or foreign (except if they are a result of duress, negligence or bad faith by Trustee or when Trustee
undertakes any action which is not expressly authorized by this Agreement).

 

With the exception of those provisions
specifically established in this Agreement, Trustee shall not be obligated to confirm or verify the authenticity of any report
or certificate that Trustor and/or the Primary Beneficiary delivers in accordance with this Agreement. Trustee does not assume
liability with respect to any representation made by any of the parties in this Agreement or in the documents relating to the same.

 

Trustee shall be liable up to the limits
and scope of the Trust Estate, without personal liability of any kind in the event that such is not sufficient to cover the obligations
arising from the Trust in accordance with the terms of this Agreement.

 

Trustee shall have civil responsibility
for the damages and losses incurred by the breach of its obligations assumed in the Trust, so long as they are caused by duress,
bad faith and/or negligence.

 

Trustee shall not be obliged to exercise
any action under this Agreement that exposes it or its officers to liability, that is against its estate, or that is contrary to
this Agreement or applicable laws.

 

It is expressly agreed that Trustee shall
incur no liability for acting pursuant to any notice, consent, certificate or other written instrument that it considers to be
genuine and signed by the corresponding party or parties, or based on a statement that it considers to have been made by Trustor
or the Primary Beneficiary.

 

TWENTY-SIXTH.- DELIVERY OF ONE COPY
OF THE TRUST. Trustor and the Primary Beneficiary herein represent that they have received from Trustee, by means of the notary
before whom this Trust is being executed, a copy of the Agreement, which they declare for corresponding legal effects.

 

    	35

    	 

    
 

TWENTY-SEVENTH.- TRANSACTIONS
WITH THE TRUSTEE INSTITUTION. For purposes of that provided for in rule 5.4 of Circular 1/2005 issued by Bank of Mexico (Banco
de México), the Parties agree that in order to avoid conflicts of interest, they authorize Trustee to enter into investment
transactions and open accounts for the management of the assets, with the same institution, as long as it acts on its own behalf
without interfering with the area of the Trustee, recognizing that there is no hierarchical relationship among the departments
that are involved in such transactions.

 

Notwithstanding the foregoing, Trustee
shall require written authorization from Trustor and Primary Beneficiary in order to enter into any other type of agreement with
its own institution other than those not established in the preceding paragraph, for the purpose of avoiding conflicts of interest.

 

Trustee acts for and on behalf of the parties
to this Trust, so that in transactions that it enters into with its own institution there shall not be extinction because of confusion
over the rights and obligations arising out of contracts with the institution and with Trustee in view of Trustee acting in order
to accomplish the purposes of this Trust and in accordance with the instructions from the Trustor and/or the Primary Beneficiary.

 

TWENTY-EIGHTH.- RENDITION OF
ACCOUNTS AND RESPONSIBILITY OF TRUSTEE. Trustee shall prepare and issue, on a monthly basis and to the address indicated
by Trustor and the Primary Beneficiary in this Agreement, the statement of account that states the activity in this Trust during
the corresponding period.

 

The parties agree that Trustor and the
Primary Beneficiary shall have a period of fifteen (15) Business Days following the date that it is sent, the same which shall
run from the last cut-off date referenced in the statement of account, in order to make clarifications to the same, if applicable.
After the expiration of such time period, said statements of account shall be deemed approved.

 

PURSUANT TO THE FOREGOING, the Parties
execute and enter into this Agreement by means of their authorized legal representatives on the date indicated hereinabove.

 

 

TRUSTOR A AND SECONDARY BENEFICIARY
A:

NEXUS MAGNETICOS DE MEXICO, S. DE R.L.
DE C.V.

 

 

___/s/ Francisco Jose Peña Valdes 

By: Francisco Jose Peña Valdes

Title: Attorney-in-fact

 

    	36

    	 

    

 

TRUSTOR B AND SECONDARY BENEFICIARY
B:

 

JEFFERSON ELECTRIC, INC.

 

____/s/ Francisco Jose Peña Valdes __

By: Francisco Jose Peña Valdes

Title: Attorney-in-fact

 

 

PRIMARY BENEFICIARY:

 

GE CF MÉXICO, S.A. DE C.V.

 

 

By: ___/s/ Pedro José Isla Treviño ____

Name: Pedro José Isla Treviño

Title: Attorney-in-fact

 

 

TRUSTEE:

 

BANCO INVEX, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE,

INVEX GRUPO FINANCIERO, FIDUCIARIO

 

By: ___/s/ Mario Raphael Esquivel Perpuli ________

Name: Mario Raphael Esquivel Perpuli

Title: Fiduciary Delegate

 

    	37

    	 

    
 

EXHIBIT “A”

 

COPY
OF THE LOAN AGREEMENT

 

[A
copy is attached hereto]

 

    	38

    	 

    

 

EXHIBIT
“B-1”

 

LIST OF TRUST ASSETS A

 

    	39

    	 

    

 

EXHIBIT
“B-2”

 

LIST OF TRUST ASSETS B

 

    	40

    	 

    

 

EXHIBIT
“B-3”

 

APPRAISAL DETAILING THE TRUST ASSETS

 

    	41

    	 

    
  

EXHIBIT “C”

 

NOTICE OF TERMINATION

[Date]

 

________________________________________

Attention: Lic. Mario Esquivel Perpuli and/or 

Nabor Medina Garza

 

Gentlemen:

 

We make reference to the irrevocable transfer
of title and guaranty trust agreement number 1927 (hereinafter the “Trust Agreement”) for the benefit of GE CF Mexico,
S.A de C.V (hereinafter the “Primary Beneficiary”) executed on July 25, 2012, by Nexus Magneticos de Mexico, S.A. de
C.V., as Trustor A and Secondary Beneficiary A. (hereinafter the “Trustor A” or “Secondary Beneficiary A”),
Jefferson Electric, Inc. as Trustor B and Secondary Beneficiary B (hereinafter the “Trustor B” or “Secondary
Beneficiary B”), GE CF Mexico S.A. de C.V. as Primary Beneficiary and Banco Invex, S.A. de C.V. Multiple Banking Institution,
Invex Financial Group, Trustee, as trustee (hereinafter the “Trustee”). Capitalized terms used herein and not otherwise
defined herein shall have the meaning set forth in the Trust Agreement.

 

By means hereof, the Primary Beneficiary
instructs the Trustee so that pursuant to the Trust Agreement, it terminate the Trust Agreement and consequentially revert the
Title of the Trust Estate in favor of the Trustor.

 

By means hereof, the Primary Beneficiary
hereby certifies that each and every one of the conditions required for the termination of the Trust Agreement have been entirely
complied with by virtue of the fact that the Guaranteed Obligations have been paid and satisfied.

 

Sincerely,

GE CF México, S.A de C.V.

 

By:__________________

Name:

Title:

 

    	42

    	 

    
 

Exhibit “D”

 

DISTRIBUTION NOTICE

[DATE]_____________________

 

 

ATTENTION: Lic. Mario Esquivel Perpuli and/ or

Lic. Nabor Medina Garza

 

Gentlemen:

 

We make reference to the Irrevocable Transfer
of Title and Guaranty Trust Agreement number 1297 (Contrato de Fideicomiso Irrevocable Traslativo de Dominio Y Garantia Numero
1297) (hereinafter the “Trust Agreement”) that for the benefit of GE CF (hereinafter the “Primary Beneficiary”),
was executed on July 25, 2012, by Nexus Magneticos, S.A. de C. V., as Trustor A and Secondary Beneficiary (hereinafter “Trustor
A” or “Secondary Beneficiary A”), Jefferson Electric, Inc., as Trustor B and Secondary Beneficiary B (hereinafter
“Trustor B” or “Secondary Beneficiary”), GE CF Mexico, S.A. de C.V. as Primary Beneficiary and Invex, Multiple
Banking Institution, Invex Financial Group, as Trustee (hereinafter the “Trustee”). The capitalized terms used herein
and not expressly defined herein, shall have the meaning set forth in the Trust Agreement.

 

Pursuant to that provided for in paragraph
(b) of Clause Twelve of the Trust Agreement, the undersigned hereby certifies that:

 

		(i)	An Event of Default has occurred pursuant to the terms provided for in the Trust Agreement, consisting
of:
	 	 	 
	 	 	[Include a detailed
description of the Event of Default]
	 	(ii)	The undersigned
has declared the Loan due and payable pursuant to the terms of the Loan Agreement.

 

Consequentilly, the Primary Beneficiary
hereby instructs the Trustee that pursuant to the Trust Agreement, it immediately proceed to initiate the procedure for carrying
out the sale and distribution of the Trust Estate as provided for in Clause Twelfth of the Trust Agreement.

 

Pursuant to the terms in Clause Twelfth,
the outstanding balance of the Guaranteed Obligations, including the respective charges, whether interest, commissions or expenses,
generated to date are $______.

 

    	43

    	 

    
 

The Trustee is requested to issue the Trustee’s
Notice, in which it indicates that it has received the Distribution Notice from the Primary Beneficiary, with a copy attached,
and instructs the Trustor and the Secondary Beneficiary to deliver the physical possession to [*] and place at the disposal of
such person each and every one the Trust Assets that make up the Trust Estate no later than 45 (forty-five) calendar days after
the termination of Definite Term, therefore [*] will continue in its capacity as depository for such purposes.

 

Lastly, pursuant to the terms of subsection
(f) of Clause Twelfth of the Trust, the Primary Beneficiary designates as Designated Assets the assets described in the document
attached hereto as Exhibit “A”.

 

Sincerely,

GE CF de México, S.A. de C.V.

 

By:____________

Name:____________

 

    	44

    	 

    

 

EXHIBIT “E”

 

DOCUMENT THAT CONTAINS THE TEXT OF THE EXTRAJUDICIAL
SALE AND 

DISTRIBUTION PROCEDURE SIGNED BY THE TRUSTOR

 

(a) Pursuant to article 403 of the Law,
the parties hereby expressly and irrevocably agree that at any time that a continuing Event of Default occurs, (after the expiration
of the applicable cure period available to cure the Event of Default, in accordance with the Loan Agreement) and Trustee has received
a Distribution Notice in accordance with this Agreement, Trustee shall proceed with the extra-judicial sale and distribution of
all of the Trust Assets in accordance with the procedure described in this Article.

 

(b) The Distribution Notice shall include
the outstanding payment due on the Loan, including its accessories, whether interest, commissions, expenses or other amounts which
are due and payable in accordance with the Loan and which have been incurred up to the date of the Distribution Notice (the date
that the Distribution Notice is delivered to Trustee shall hereinafter be referred to as the “Notice Date”),
as well as a description of the breach or breaches of the Loan by Trustor and a description of the Designated Assets (as such term
is defined herein below).

 

(c) Trustor shall pay Trustee, in advance,
the reasonable amounts required by such, to pay the costs and expenses that Trustee must pay in order to conduct the execution
procedure described in this article, to conduct the sale of the Trust Assets. Upon non-payment by Trustor, the Primary Beneficiary
shall pay such amounts, and in the event that there are not sufficient funds, Trustee may abstain from implementing such procedure.
Under no circumstance shall Trustee cover the aforementioned costs and expenses with its own resources. For such purposes, Trustee
shall send a notice to Trustor and the Primary Beneficiary, specifying the amount required by the Trustee in order to pay such
items. Trustee shall register and retain proof or receipts or other evidence of the expenses incurred. Any amount paid by and of
the aforementioned Parties shall be deducted from the amount obtained from the sale of the Trust Assets and paid to the respective
party.

 

(d) The Primary Beneficiary will be entitled,
at any time (following the delivery of a Distribution Notice), by means of a written notice delivered to Trustee (each such notice,
a “Suspension Notice”), to instruct Trustee to suspend, in whole or in part, and with as much diligence as possible,
the procedure for the extrajudicial sale and distribution of the Trust Estate initiated pursuant to such Distribution Notice, provided,
however, that such suspension shall cease to be effective, in whole or in part, from the date Trustee receives from the
Primary Beneficiary, one or more instructions in writing (each such notice, a “Continuation Notice”) instructing
Trustee to continue, in whole or in part, with the suspended procedure for the extrajudicial sale and distribution of the Trust
Estate.

 

    	45

    	 

    
 

Once Trustee receives the corresponding
Continuation Notice, Trustee shall continue with the procedure for the extrajudicial sale and distribution of the Trust Estate
in accordance with this Special Section and the written instructions of the Primary Beneficiary.

 

(e) Trustee shall give written notice to
Trustor (the "Trustee Notice"), with copy to the Primary Beneficiary, indicating that it has received a Distribution
Notice and attach a copy of the same, as soon as possible but in any event no later than the Business Day immediately following
the date on which the Trustee receives the Distribution Notice by means of a notary public, public courier or via voluntary jurisdiction
at those addresses indicated in Article Eighteenth of this Agreement. Additionally, in the Trustee Notice, Trustee shall instruct
Trustor to deliver the physical possession and/or to put it at the disposition of the person designated by the Primary Beneficiary
in the Distribution Notice, each and every one of the Trust Assets that make up the Trust Estate no later than forty-five (45)
calendar days following the expiration of the Definite Term (as such term is defined herein below). The person that has been designated
by the Primary Beneficiary for the purposes indicated herein, shall be the depositary of the Trust Assets. Within 3 (three) Business
Days after the date the Trustor receives the Trustee Notice (or the date on which the publication referred to in the last paragraph
of this subsection (e) was conducted) (the "Definite Term"), Trustor shall be entitled to present documentation
demonstrating to the satisfaction of the Trustee and the Primary Beneficiary, (i) that it has cured and/or has complied with the
obligations giving rise to the Event of Default described in the Distribution Notice attached to the Trustee Notice and to present
written proof to the Primary Beneficiary, and/or (ii) compliance with the full payment of the amount due in the manner and pursuant
to the terms agreed upon in the Loan Agreement and/or (iii) submit to Primary Beneficiary (and to the Trustee) documentation to
verify the renewal, extension of time or temporary waiver of the obligation(s) which gave rise to the Event of Default or, alternatively,
deliver to the Trustee the amount indicated in the Distribution Notice (such notice, a "Notice of Compliance").

 

If the Definite Term expires and the Event
of Default continues without the Trustor delivering to Trustee and the Primary Beneficiary a Notice of Compliance, the Trustor
shall comply with the instructions issued by the Trustee in the Trustee's Notice, in accordance with the preceding paragraph.

 

If Trustor conducts acts or omissions or
prevents or hinders in any way delivery of the Trustee’s Notice by Trustee, so that Trustee is prevented from delivering
such, Trustee shall give notice of the Trustee’s Notice by means of publication as soon as possible, in a notice in the newspaper
"Reforma" or a notice in the newspaper "El Informador" or in the Official Daily Gazette of the Federation,
or if such newspapers cease to be published, in any of the major newspapers in Mexico City, Federal District.

 

(f) Once the Trustor
delivers such Trust Assets that make up the Trust Estate, Trustee shall proceed as directed in writing by the Primary Beneficiary
for such purposes, with the extrajudicial sale, for consideration, of all or part of the Trust Estate, as such assets are specifically
designated by the Primary Beneficiary in the Distribution Notice (the "Designated Assets"). In connection with such sale,
the Trustee shall, upon receipt of the corresponding Distribution Notice from the Primary Beneficiary, proceed as follows:

 

    	46

    	 

    
 

		(i)	The Primary Beneficiary shall first deliver to the Trustee, without the intervention of Trustor,
a list of potential purchasers of the Designated Assets.

 

(ii) Trustee shall, in accordance
with written instructions from the Primary Beneficiary, privately deliver a notice of sale for the auction of the Designated Assets
to prospective purchasers indicated by the Primary Beneficiary (a "Notice of Sale"). The Notice of Sale shall
be delivered by Trustee as soon as possible but no later than 10 (ten) Business Days prior to the expected date of the auction.
The Notice of Sale shall be prepared substantially in terms of the form attached hereto as Exhibit "F"
and shall indicate, among other things, the place and time that the auction will be held, the Reference Price (as defined in the
following paragraph), and establish that the sale is the result of the extrajudicial sale and distribution of the Trust Estate
pursuant to the terms of this Agreement.

 

The Reference Price stated in
the Notice of Sale (hereinafter the "Reference Price") shall be in Dollars and will be determined by an expert
appraiser approved by a lending institution designated by the Primary Beneficiary by means of an appraisal reflected in Dollars,
of the Designated Goods that make up the Guaranty Trust. Once the Trustee receives the Reference Price of the Designated Assets,
the Trustee shall notify the Trustor and the Primary Beneficiary. The cost of such appraisal shall be borne by the Trustor or,
if applicable, the Primary Beneficiary in terms of subsection (c) above.

 

(iii)Also, the Notice of
Sale shall provide that (i) any person interested in participating in the auction shall deposit with the Trustee an amount at least
equal to 10% (ten percent) of the Reference Price set out in the Notice of Sale, by means of certificates of deposit issued by
authorized credit institutions, at least 2 (two) Business Days prior to the date of the auction (the "Deposit"),
(ii) any bid shall not be accepted or considered valid unless the Deposit is established in the terms and within the period referred
to above, and (iii) the bids of participants must be at least equal to the applicable Reference Price. The Trustee, upon prior
instructions from Primary Beneficiary, shall transfer the Designated Assets in favor of the bidder who has offered the highest
bid (the "Highest Bidder"), which in any case must be at least an amount equal to the applicable Reference Price.
In case two or more persons have submitted equal bids and they are the highest bids, the Primary Beneficiary in its discretion
shall designate a person to whom the Trustee will transfer the Designated Assets and such will be considered, for this purpose,
as the Highest Bidder.

 

(iv)The Highest Bidder shall
pay to the Trustee (in immediately available funds), the balance of its bids (which in any case must be at least equivalent to
the applicable Reference Price) at the time that the transfer of the Designated Assets are transferred to the Highest Bidder pursuant
to applicable law. In the event that the transfer of the Designated Goods is not carried out for any reason attributable to the
Highest Bidder, (x) the Highest Bidder will lose the Deposit delivered to the Trustee for the benefit of the Trust Estate; and
(y) the Trustee will sell the Designated Assets in accordance with the instructions of the Primary Beneficiary, to the next Highest
Bidder, to the extent that its bid is at least equal to the applicable Reference Price. This paragraph (iv) must be transcribed
word for word in the Notice of Sale.

 

    	47

    	 

    
 

(v)In
the event that the Trustee is unable to carry out the sale of the Designated Assets in the first auction, then, in accordance with
written instructions from the Primary Beneficiary, the Trustee shall deliver to prospective purchasers of the Designated Assets,
who shall be designated by the Primary Beneficiary in terms of subsection (f) (i) above. The original Reference Price in the Notice
of Sale will be reduced by 2.5% (two point five percent) every 60 (sixty) calendar days in case the sale is not conducted. In this
regard, the corresponding Notice of Sale shall provide that the Trustee shall not offer the Designated Goods for less than the
reduced Reference Price, as appropriate (upon receiving an offer from a good faith purchaser). If within a period of 12 (twelve)
months, there shall be a new assessment, in Dollars, of the Designated Assets that constitute the Guaranty Trust, by an expert
appraiser authorized by a lending institution designated by the Primary Beneficiary. The value provided by the new appraisal will
be considered, for all purposes, as the Reference Price. Once the Trustee receives the new Reference Price of the Designated Assets,
it shall notify Trustor and the Primary Beneficiary. If the Reference Price is adjusted so that it is equal to or less than the
balance of the Guaranteed Obligations and accessories, the Primary Beneficiary shall have the right to ask Trustee to adjust the
Designated Assets pertaining to the Guaranty Trust to pay the balance of the Guaranteed Obligations and accessories. The second
or subsequent Notices of Sale for the Designated Assets shall be given in accordance with and subject to the provisions of paragraphs
(i), (ii), (iii) (iv) and (v) of this subsection (f).

 

(g) The contract of sale to be entered
into by and between Trustee and the Highest Bidder who will acquire all of the Trust Assets, or where appropriate, the Designated
Assets, must establish that payment of the price shall be in Dollars and shall be made upon execution.

 

The amounts received by the Trustee for
the sale of all of the Trust Assets or, where applicable, the Designated Assets, which constitute the Guaranty Trust shall be applied
as follows: (i) first to the payment of any and all taxes that are generated from such transfer, (ii) second to the outstanding
trust fees, in accordance with the provisions of Article Fifteenth of the Agreement, (iii) third, to payment or reimbursement of
costs of implementation of the Guaranty Trust, (iv) fourth, to pay the amount indicated by the Primary Beneficiary in the Distribution
Notice, which, once made, shall release Trustor from the Guaranteed Obligations whenever the amount of resources obtained from
the sale and distribution of the Guaranty Trust are sufficient to liquidate the Guaranteed Obligations, being that if they were
insufficient, Trustor A would not be released from the Secured Obligations under the Loan Agreement; and (v) fifth, the remainder
of the funds obtained from the sale and distribution of the Guaranty Trust shall be returned to Trustor in relation to the assets
transferred to this Trust.

 

    	48

    	 

    
 

(h) It is expressly agreed between
the Parties in the event that the proceeds from the sale of the Trust Estate are not sufficient to fully cover the Guaranteed Obligations
or any other amount owed to the Primary Beneficiary or Trustee under this Agreement, including without limitation, any fees and
expenses incurred by the Primary Beneficiary or Trustee in connection with this Agreement or in connection with the sale of the
Trust Estate, the Primary Beneficiary and the Trustee expressly reserve any and all rights which they may have to exercise to receive
full payment of any such amounts.

 

(i) The Trustor agrees to perform or
cause to be carried out, all acts or initiate any and all procedures necessary or convenient in order for the Trustee (acting in
accordance with written instructions from the Primary Beneficiary) to carry out the extrajudicial sale and distribution of the
Trust Estate (or any part thereof) in the manner provided in this article. The Grantor further agrees to perform or cause to be
carried out all acts necessary or appropriate to expedite the sale, assignment or transfer of all or any part of the Trust Estate,
and to execute and deliver any documents and take any other action that the Trustee (acting under the instructions of the Primary
Beneficiary) or the Primary Beneficiary deems necessary or desirable for the purpose of such sale, assignment or transfer to be
is made in accordance with applicable law.

 

(j) Being that the Secured Obligations
consist of monetary obligations denominated in Dollars, for payment of such Secured Obligations, the proceeds of the extrajudicial
sale and distribution of the Trust Estate or any portion thereof must be received in Dollars.

 

In accordance with the provisions of Article 403 (four hundred
and three) of the General Law of Instruments and Credit Operations, the Parties signed the text of this Special Section in a separate
document, in addition to signing this Agreement, expressing their express consent and irrevocable instruction to the Trustee to
follow the procedure for extrajudicial sale and distribution of the Trust Estate under this Special Section.

 

 

THE TRUSTOR A AND SECONDARY
BENEFICIARY A:

NEXUS MAGNETICS DE MEXICO, S.DE
R.L. DE C.V.

 

___ /s/ Francisco José
Peña Valdés___ 

By: Francisco José Peña
Valdés

Title: Attorney In-Fact

 

    	49

    	 

    

 

THE TRUSTOR B AND SECONDARY
BENEFICIARY A:

JEFFERSON ELECTRIC, INC.

 

___ /s/ Francisco José
Peña Valdés___

By: Francisco José Peña
Valdés

Title: Attorney In-Fact

 

 

THE PRIMARY BENEFICIARY:

GE CF MEXICO, S.A. DE C.V.

 

By:__/s/ Pedro Jose Isla
Trevino___ 

Name: Pedro Jose Isla Trevino

Title: Attorney In-Fact

 

 

THE TRUSTEE:

BANCO INVEX, S.A. MULTIPLE BANKING
INSTITUTION,

INVEX FINANCIAL GROUP, TRUSTEE

 

By: __/s/ Nabor Medina Garza
___

Name: Nabor Medina Garza

Title: Fiduciary Delegate

 

    	50

    	 

    
 

EXHIBIT “F”

 

Irrevocable Transfer of Title and
Guaranty

Trust Agreement No. No. 1297

Form of Notice of Sale]

[on Letterhead of Trustee]

Notice of Sale for Private Offer

 

[First] Auction

 

On [insert date of auction]
at [__:__p.m./a.m.], in [insert place of auction], the assets described below will be privately sold:

 

[Include
a detailed description of the Designated Assets] (the “Designated Assets”)

 

This private
auction is the result of a foreclosure procedure set forth in the Irrevocable Transfer of Title and Guaranty Trust Agreement 1297
(Contrato de Fideicomiso Irrevocable Translativo de Domino y de Garantia No. 1297) dated July 25, 2012 for the Benefit of
GE CF Mexico, S.A. de C.V. (hereinafter the “PRIMARY BENEFICIARY”) was executed on July 25, 2012 by Nexus Magneticos
de Mexico, S.A. de C.V. as TRUSTOR “A” and SECONDARY BENEFICIARY “A” (hereinafter “TRUSTOR A”
or “SECONDARY BENEFICIARY A”) Jefferson Electric, Inc, as “TRUSTOR B” and SECOND BENEFICIARY “B”
(hereinafter the “TRUSTOR B” or “SECONDARY BENEFICIARY B”) GE CF, MEXICO, S.A. DE C.V. as Primary Beneficiary
and Banco Invex, Multiple Banking Institution, Trustee as Trustee (hereinafter the “TRUSTEE”).

 

The private auction will be carried
out in accordance with the extrajudicial foreclosure procedure set forth in the Special Section of Clause Twelve of the Trust Agreement.

 

The Reference Price for the sale
of the Designated Assets is the amount of $[_____].00([_____] dollars, lawful currency of the United States of America])
(the “Reference Price”), provided, however, that the interested participants shall deliver to the Trustee,
at the address set forth in the preamble of the Notice of Sale, at least 2 (two) business days prior to the date of the bid process:

 

a)                 
a written document with the following information: (i) name of the person or legal entity submitting the bid; (ii) its tax
identification registry number; (iii) address; (iv) nationality; and (v) amount of bid; and

 

b)                 
a certificate of deposit issued by an authorized credit institution, in favor of the Trustee, in an amount equal to at least
10% (ten percent) of the Reference Price.

 

    	51

    	 

    

 

The Trustee shall return the certificate
of deposit delivered by any unsuccessful participant, immediately after the auction.

 

No bid shall be admitted or considered
valid except for those that (i) are submitted in the terms and conditions set forth herein; and (ii) are at least an amount equal
to the Reference Price. The Trustee shall transfer the Designated Assets to the participant who offers the highest bid (which shall
in any event be at least equal to the applicable Reference Price), (hereinafter the Highest Bidder) concurrently with the payment
thereof in full in immediately available funds, provided, however, that in the event that (i) two or more participants have
made equal bids which are the highest, the Primary Beneficiary at its discretion will designate the participant to which the Trustee
will transfer the Designated Assets (a situation that the bidders accept as of the moment that they have carried the actions described
in the foregoing subsections (a) and (b), to the participant that will be considered for all purposes to be the Highest Bidder;
(ii) in the event the transfer if the Designated Assets is not consumed for causes attributable to such highest bidder, such highest
bidder (x) shall forfeit the Deposit delivered to the Trustee for the benefit of the Trust Estate, and (y) the Trustee will, as
instructed by the Beneficiary, sell the Designated Assets to the next highest bidder, to the extent its bid is at least equal to
the Reference Price, in accordance with Subsection f (IV) of the Special Section contained in Clause Twelve of the Trust Agreement
transcribed below:

 

“The
Highest Bidder shall pay to the Trustee (in immediately available funds) the price of its bid (which shall in any event be at least
equal to the applicable Reference Price) concurrently with the transfer and delivery of the Designated Assets by the Trustee to
the Highest Bidder in accordance with the applicable law. In the event the transfer of the Designated Assets is not consummated
for causes attributable to the Highest Bidder: (x) the Highest Bidder shall forfeit the Deposit delivered to the Trustee for the
benefit of the Trust Estate, and (y) the Trustee will, as instructed by the Beneficiary, sell the Designated Assets to the next
highest bidder, to the extent its bid is at least equal to the applicable Reference Price. This paragraph (iv) shall be transcribed
in the Call.” 

 

The Trustee reserves the right,
at any time and for any reason whatsoever and without being obligated to express such reasons, to cancel or suspend the private
auction referred to herein pursuant to the instructions of the Primary Beneficiary, without any liability whatsoever, in which
case the Trustee shall be obligated to return to the participants and certificate of deposit received by the Trustee from each
of such participants.

 

    	52

    	 

    

 

[Insert date of Notice
of Sale]

Sincerely,

 

THE TRUSTEE:

BANCO INVEX, S.A. DE C. V. MULTIPLE
BANKING INSTITUTION,

INVEX FINANCIAL GROUP, TRUSTEE

 

By: ____________________________________________

Name: [*]

Title: Fiduciary Delegate

 

    	53

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