Municipal LED Lighting Hugh Martin Chairman & CEO Xeralux Corporation

Declining revenue – Decreased state and federal dollars – Reduced property taxes from declining property values – Reduced business and sales taxes from sluggish economy Rapidly increasing operational costs – Rising energy costs – Pressure on staffing City Services on the ropes – Fewer people to do more work Limited funds languishing in investments making 1-2% per annum City Issues Streetlight Outages Crime and gang activities Streetlight Outages Crime and gang activities How about a no-risk investment with 20% ROI (or more) that also makes the city more attractive to businesses?

Beautiful, safe, and clean light without UV or IR. Maintenance free, reliable and durable. Energy efficient and controllable. No toxic waste when disposed. LED Lighting Promises 3

Better Lighting! Where would you rather live and work? HPS Lighting LED Lighting

Fast Payback < 3 year total < 5 year energy-only IRR 25% - 50% Save on: Energy Maintenance Disposal 60% - 80% 67% average Reduce associated Greenhouse Gasses Eliminate mercury pollution Brighter Whiter Safer BETTER LIGHT Xeralux Promises 5

Payback in < 3 years IRR of 25-50% Huge Long Term Savings 6 Typical Customer

Economic Development – Immediate shot-in-the-arm to local contractors for installation – Safer, more attractive city due to better lighting with fewer outages Reduced Operational Costs – Immediate & long-term energy savings – Better performance in other areas of city maintenance from liberated maintenance staff City Prestige – Green solution that is press-worthy Happy Citizens! Benefits to City

Prototype testing at CLTC Fully LM-79 tested in DOE CALiPER-certified, nationally recognized testing labs (NRTLs) Test results reviewed and approved by DLC Highest quality Philips Lumileds and Cree LEDs UL/cUL Recognized components System tested to UL compliance at MET Labs in Oakland, CA LED boards, drivers, and systems assembled in California Engineered, Tested Quality 8

Corporate Headquarters – Nikon Precision, Belmont – Hewlett-Packard, Palo Alto – Mentor Graphics, Fremont – DPR Construction, Redwood City – Applied Materials, Santa Clara – Travis Credit Union, Vacaville – Silicon Valley Micro, Santa Clara – Michelin Tire, Greensboro SC – Trucksite.com, Sacramento Higher Education – Menlo College, Menlo Park – Santa Clara U, Santa Clara – UC Davis – San Francisco State – UC San Francisco – UC Santa Cruz Healthcare – Banner Health/Good Sam, Phoenix – John Muir Hospital, Walnut Creek – Sutter Hospital, Davis – Kaiser Permanente: Santa Clara, Oakland, Fremont – Good Samaritan Hospital, San Jose – Tri-City Health Center, Fremont K-12 Schools – St. Francis HS, Mountain View – Fremont Unified School District – King’s Canyon School District – Denver Academy, Denver – Hillbrook Academy, Los Gatos Governmental – Caltrans, San Francisco – HP Pavilion, San Jose – Sacramento International Airport – City of Modesto, (ARRA) – Vermont Dept. of Corrections Other – Waste Connections, San Luis Obispo – Country Club Lanes, Sacramento – Amber Grove HOA, San Jose – Tracy Toyota, Tracy – San Antonio Shopping Center, Mountain View – Hines Property, Pleasanton Over 75 Customers 9