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Commercial Security Agreement - City National Bank and Daily Journal Corp.

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                         COMMERCIAL SECURITY AGREEMENT

  Principal          Loan Date         Maturity         Loan No       Call     Collateral       Account       Officer       Initials
$4,000,000.00        01-02-2001       01-31-2002         38058                                  648112          SST           /s/JS
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular loan
                                                             or item.
                         Any item above containing "***" has been omitted due to text length limitations.
Borrower:  DAILY JOURNAL CORPORATION,        Lender:   City National Bank, NA
           A SOUTH CAROLINA CORPORATION                Downtown Los Angeles Commercial Banking Center
           SUSTAIN TECHNOLOGIES, INC.,                 #034000
           A VIRGINIA CORPORATION                      633 West Fifth Street, Tenth Floor
           915 EAST 1ST STREET                         Los Angeles, CA  90071
           LOS ANGELES, CA  90012

           915 EAST 1ST STREET
           LOS ANGELES, CA  90012

THIS COMMERCIAL SECURITY AGREEMENT dated January 2, 2001, is made and executed
INC., A VIRGINIA CORPORATION ("Borrower"); and City National Bank, NA

GRANT OF SECURITY INTEREST.  For valuable consideration, Grantor grants to
Lender a security interest in the Collateral to secure the Indebtedness and
agrees that Lender shall have the rights stated in this Agreement with respect
to the Collateral, in addition to all other rights which Lender may have by law.

COLLATERAL DESCRIPTION.  The word "Collateral" as used in this Agreement means
the following described property, whether now owned or hereafter acquired,
whether now existing or hereafter arising, and wherever located, in which
Grantor is giving to Lender a security interest for the payment of the
Indebtedness and performance of all other obligations under the Note and this

   All Inventory, Chattel Paper, Accounts, Equipment and General Intangibles

In addition, the word "Collateral" also includes all the following, whether now
owned or hereafter acquired, whether now existing or hereafter arising, and
wherever located:

   (A)  All accessions, attachments, accessories, tools, parts, supplies,
   replacements and additions to any of the collateral described herein, whether
   added now or later.

   (B)  All products and produce of any of the property described in this
   Collateral section.

   (C)  All accounts, general intangibles, instruments, rents, monies, payments,
   and all other rights, arising out of a sale, lease, or other disposition of
   any of the property described in this Collateral section.

   (D)  All proceeds (including insurance proceeds) from the sale, destruction,
   loss, or other disposition of any of the property described in this
   Collateral section, and sums due from a third party who has damaged or
   destroyed the Collateral or from that party's insurer, whether due to
   judgment, settlement or other process.

   (E)  All records and data relating to any of the property described in this
   Collateral section, whether in the form of a writing, photograph, microfilm,
   microfiche, or electronic media, together with all of Grantor's right, title,
   and interest in and to all computer software required to utilize, create,
   maintain, and process any such records or data on electronic media.

Despite any other provision of this Agreement, Lender is not granted, and will
not have, a nonpurchase money security interest in household goods, to the
extent such a security interest would be prohibited by applicable law.  In
addition, if because of the type of any Property, Lender is required to give a
notice of the right to cancel under Truth in Lending for the Indebtedness, then
Lender will not have a security interest in such Property unless and until such
a notice is given.

CROSS-COLLATERALIZATION.  In addition to the Note, this Agreement secures all
obligations, debts and liabilities, plus interest thereon, of Borrower to
Lender, or any one or more of them, as well as all claims by Lender against
Borrower or any one or more of them, whether now existing or hereafter arising,
whether related or unrelated to the purpose of the Note, whether voluntary or
otherwise, whether due or not due, direct or indirect, absolute or contingent,
liquidated or unliquidated and whether Borrower may be liable individually or
jointly with others, whether obligated as guarantor, surety, accommodation party
or otherwise, and whether recovery upon such amounts may be or hereafter may
become barred by any statute of limitations, and whether the obligation to repay
such amounts may be or hereafter may become otherwise unenforceable.

BORROWER'S WAIVERS AND RESPONSIBILITIES.  Except as otherwise required under
this Agreement or by applicable law, (A) Borrower agrees that Lender need not
tell Borrower about any action or inaction Lender takes in connection with this
Agreement; (B) Borrower assumes the responsibility for being and keeping
informed about the Collateral; and (C) Borrower waives any defenses that may
arise because of any action or inaction of Lender, including without limitation
any failure of Lender to realize upon the Collateral or any delay by Lender in
realizing upon the Collateral; and Borrower agrees to remain liable under the
Note no matter what action Lender takes or fails to take under this Agreement.

Agreement is executed at Borrower's request and not at the request of Lender;
(B) Grantor has the full right, power and authority to enter into this Agreement
and to pledge the Collateral to Lender; (C) Grantor has established adequate
means of obtaining from Borrower on a continuing basis information about
Borrower's financial condition; and (D) Lender has made no representation to
Grantor about Borrower or Borrower's creditworthiness.

GRANTOR'S WAIVERS.  Except as prohibited by applicable law, Grantor waives any
right to require Lender to (A)  make any presentment, protest, demand, or notice
of any kind, including notice of change of any terms of repayment of the
Indebtedness, default by Borrower or any other guarantor or surety, any action
or nonaction taken by Borrower, Lender, or any other guarantor or surety of
Borrower, or the creation of new or additional

                         COMMERCIAL SECURITY AGREEMENT
                                                                          Page 2

Indebtedness; (B) proceed against any person, including Borrower, before
proceeding against Grantor; (C) proceed against any collateral for the
Indebtedness, including Borrower's collateral, before proceeding against
Grantor; (D) apply any payments or proceeds received against the Indebtedness in
any order; (E) give notice of the terms, time, and place of any sale of any
collateral pursuant to the Uniform Commercial Code or any other law governing
such sale; (F) disclose any information about the Indebtedness, the Borrower,
any collateral, or any other guarantor or surety, or about any action or
nonaction of Lender; or (G) pursue any remedy or course of action in Lender's
power whatsoever.

Grantor also waives any and all rights or defenses arising by reason of (A)  any
disability or other defense of Borrower, any other guarantor or surety or any
other person; (B)  the cessation from any cause whatsoever, other than payment
in full, of the indebtedness; (C)  the application of proceeds of the
Indebtedness by Borrower for purposes other than the purposes understood and
intended by Grantor and Lender; (D)  any act of omission or commission by Lender
which directly or indirectly results in or contributes to the discharge of
Borrower or any other guarantor or surety, or the Indebtedness, or the loss or
release of any collateral by operation of law or otherwise; (E)  any statute of
limitations in any action under this Agreement or on the Indebtedness; or (F)
any modification or change in terms of the Indebtedness, whatsoever, including
without limitation, the renewal, extension, acceleration, or other change in the
time payment of the Indebtedness is due and any change in the interest rate.
Until all Indebtedness is paid in full, Grantor shall have no right of
subrogation, and Grantor waives any defense Grantor may have based upon any
election of remedies by Lender which limits or destroys Grantor's subrogation
rights or Grantor's rights to seek reimbursement from Borrower or any other
guarantor or surety, including without limitation, any loss of rights Grantor
may suffer by reason of any rights or protections of Borrower in connection with
any anti-deficiency laws or other laws limiting or discharging the Indebtedness
or Borrower's obligations (including, without limitation, Sections 726, 580b,
and 580d of the California Code of Civil Procedure).  Until all Indebtedness is
paid in full, Grantor waives any right to enforce any remedy Lender may have
against Borrower or any other guarantor, surety, or other person, and further,
Grantor waives any right to participate in any collateral for the Indebtedness
now or hereafter held by Grantor.

RIGHT OF SETOFF.  To the extent permitted by applicable law, Lender reserves a
right of setoff in all Grantor's accounts with Lender (whether checking,
savings, or some other account).  This includes all accounts Grantor holds
jointly with someone else and all accounts Grantor may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law.  Grantor authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
Indebtedness against any and all such accounts.

respect to the Collateral, Grantor represents and warrants to Lender that:

   Perfection of Security Interest.  Grantor agrees to execute financing
   statements and to take whatever other actions are requested by Lender to
   perfect and continue Lender's security interest in the Collateral.  Upon
   request of Lender, Grantor will deliver to Lender any and all of the
   documents evidencing or constituting the Collateral, and Grantor will note
   Lender's interest upon any and all chattel paper if not delivered to Lender
   for possession by Lender.  This is a continuing Security Agreement and will
   continue in effect even though all or any part of the Indebtedness is paid in
   full and even though for a period of time Borrower may not be indebted to

   Notices to Lender.  Grantor will notify Lender in writing at Lender's address
   shown above (or such other addresses as Lender may designate from time to
   time) prior to any (1) change in Grantor's name, (2) change in Grantor's
   assumed business name(s), (3) change in the management of Grantor, (4) change
   in the authorized signer(s), (5) change in Grantor's principal office
   address, (6) conversion of Grantor to a new or different type of business
   entity, or (7)  change in any other aspect of Grantor that directly or
   indirectly relates to any agreements between Grantor and Lender.  No change
   in Grantor's name will take effect until after Lender has been notified.

   No Violation.  The execution and delivery of this Agreement will not violate
   any law or agreement governing Grantor or to which Grantor is a party, and
   its certificate or articles of incorporation and bylaws do not prohibit any
   term or condition of this Agreement.

   Enforceability of Collateral.  To the extent the Collateral consists of
   accounts, chattel paper, or general intangibles, as defined by the Uniform
   Commercial Code, the Collateral is enforceable in accordance with its terms,
   is genuine, and fully complies with all applicable laws and regulations
   concerning form, content and manner of preparation and execution, and all
   persons appearing to be obligated on the Collateral have authority and
   capacity to contract and are in fact obligated as they appear to be on the
   Collateral.  At the time any Account becomes subject to a security interest
   in favor of Lender, the Account shall be a good and valid account
   representing an undisputed, bona fide indebtedness incurred by the account
   debtor, for merchandise held subject to delivery instructions or previously
   shipped or delivered pursuant to a contract of sale, or for services
   previously performed by Grantor with or for the account debtor.  So long as
   this Agreement remains in effect, Grantor shall not, without Lender's prior
   written consent, compromise, settle, adjust, or extend payment under or with
   regard to any such Accounts.  There shall be no setoffs or counterclaims
   against any of the Collateral, and no agreement shall have been made under
   which any deductions or discounts may be claimed concerning the Collateral
   except those disclosed to Lender in writing.

   Location of the Collateral.  Except in the ordinary course of Grantor's
   business, Grantor agrees to keep the Collateral (or to the extent the
   Collateral consists of intangible property such as accounts or general
   intangibles, the records concerning the Collateral) at Grantor's address
   shown above or at such other locations as are acceptable to Lender.  Upon
   Lender's request, Grantor will deliver to Lender in form satisfactory to
   Lender a schedule of real properties and Collateral locations relating to
   Grantor's operations, including without limitation the following:  (1) all
   real property Grantor owns or is purchasing; (2) all real property Grantor is
   renting or leasing; (3) all storage facilities Grantor owns, rents, leases,
   or uses; and (4) all other properties where Collateral is or may be located.

   Removal of the Collateral.  Except in the ordinary course of Grantor's
   business, including the sales of inventory, Grantor shall not remove the
   collateral from its existing location without Lender's prior written consent.
   Grantor shall, whenever requested, advise Lender of the exact location of the

   Transactions Involving Collateral.  Except for inventory sold, licenses
   granted or accounts collected in the ordinary course of Grantor's business,
   Grantor shall not sell, offer to sell, or otherwise transfer or dispose of
   the Collateral.  While Grantor is not in default under this Agreement,
   Grantor may sell inventory, but only in the ordinary course of its business
   and only to buyers who qualify as a buyer in the ordinary course of business.
   A sale in the ordinary course of Grantor's business does not include a
   transfer in partial or total satisfaction of a debt or any bulk sale.
   Grantor shall not pledge, mortgage, encumber or otherwise permit the
   Collateral to be subject to any lien, security interest, encumbrance, or
   charge, other than the security interest provided for in this Agreement and
   any other security interests or liens granted by Grantor to Lender or any
   affiliate of Lender, without the prior written consent of Lender.  This
   includes security interests even if junior in right to the security interests
   granted under this Agreement.  Unless waived by Lender, all proceeds from any
   disposition of the Collateral (for whatever

                         COMMERCIAL SECURITY AGREEMENT
                                                                          Page 3

   reason) shall be held in trust for Lender and shall not be commingled with
   any other funds; provided, however, this requirement shall not constitute
   consent by Lender to any sale or other disposition. Upon receipt, Grantor
   shall immediately deliver any such proceeds to Lender.

   Title.  Grantor represents and warrants to Lender that Grantor holds good and
   marketable title to the Collateral, free and clear of all liens and
   encumbrances except for the lien of this Agreement and any other security
   interests or liens granted by Grantor to Lender or any affiliate of Lender.
   No financing statement covering any of the Collateral is on file in any
   public office other than those which reflect the security interest created by
   this Agreement or to which Lender has specifically consented.  Grantor shall
   defend Lender's rights in the Collateral against the claims and demands of
   all other persons.

   Repairs and Maintenance.  Grantor agrees to keep and maintain, and to cause
   others to keep and maintain, the Collateral in good order, repair and
   condition at all times while this Agreement remains in effect.  Grantor
   further agrees to pay when due all claims for work done on, or services
   rendered or material furnished in connection with the Collateral so that no
   lien or encumbrance may ever attach to or be filed against the Collateral.

   Inspection of Collateral.  Lender and Lender's designated representatives and
   agents shall have the right at all reasonable times to examine and inspect
   the Collateral wherever located.

   Taxes, Assessments and Liens.  Grantor will pay when due all taxes,
   assessments and liens upon the Collateral, its use or operation, upon this
   Agreement, upon any promissory note or notes evidencing the Indebtedness, or
   upon any of the other Related Documents.  Grantor may withhold any such
   payment or may elect to contest any lien if Grantor is in good faith
   conducting an appropriate proceeding to contest the obligation to pay and so
   long as Lender's interest in the Collateral is not jeopardized in Lender's
   sole opinion.  If the Collateral is subjected to a lien other than a lien in
   favor of Lender or one or more of its affiliates which is not discharged
   within fifteen (15) days, Grantor shall deposit with Lender cash, a
   sufficient corporate surety bond or other security satisfactory to Lender in
   an amount adequate to provide for the discharge of the lien plus any
   interest, costs, attorneys' fees or other charges that could accrue as a
   result of foreclosure or sale of the Collateral.  In any contest Grantor
   shall defend itself and Lender shall satisfy any final adverse judgment
   before enforcement against the Collateral.  Grantor shall name Lender as an
   additional obligee under any surety bond furnished in the contest
   proceedings.  Grantor further agrees to furnish Lender with evidence that
   such taxes, assessments, and governmental and other charges have been paid in
   full and in a timely manner.  Grantor may withhold any such payment or may
   elect to contest any lien if Grantor is in good faith conducting an
   appropriate proceeding to contest the obligation to pay and so long as
   Lender's interest in the Collateral is not jeopardized.

   Compliance with Governmental Requirements.  Grantor shall comply promptly
   with all laws, ordinances, rules and regulations of all governmental
   authorities, now or hereafter in effect, applicable to the ownership,
   production, disposition, or use of the Collateral.  Grantor may contest in
   good faith any such law, ordinance or regulation and withhold compliance
   during any proceeding, including appropriate appeals, so long as Lender's
   interest in the Collateral, in Lender's opinion, is not jeopardized.

   Hazardous Substances.  Grantor represents and warrants that the Collateral
   never has been, and never will be so long as this Agreement remains a lien on
   the Collateral, used in violation of any Environmental Laws or for the
   generation, manufacture, storage, transportation, treatment, disposal,
   release or threatened release of any Hazardous Substance.  The
   representations and warranties contained herein are based on Grantor's due
   diligence in investigating the Collateral for Hazardous Substances.  Grantor
   hereby (1) releases and waives any future claims against Lender for indemnity
   or contribution in the event Grantor becomes liable for cleanup or other
   costs under any Environmental Laws, and (2) agree to indemnify and hold
   harmless Lender against any and all claims and losses resulting from a breach
   of this provision of this Agreement.  This obligation to indemnify shall
   survive the payment of the Indebtedness and the satisfaction of this

   Maintenance of Casualty Insurance.  Grantor shall procure and maintain all
   risks insurance, including without limitation fire, theft and liability
   coverage together with such other insurance as Lender may require with
   respect to the Collateral, in form, amounts, coverages and basis reasonably
   acceptable to Lender and issued by a company or companies reasonably
   acceptable to Lender.  Grantor, upon request of Lender, will deliver to
   Lender from time to time the policies or certificates of insurance in form
   satisfactory to Lender, including stipulations that coverages will not be
   cancelled or diminished without at least seven (7) days' prior written notice
   to Lender and not including any disclaimer of the insurer's liability for
   failure to give such a notice.  Each insurance policy also shall include an
   endorsement providing that coverage in favor of Lender will not be impaired
   in any way by any act, omission or default of Grantor or any other person.
   In connection with all policies covering assets in which Lender holds or is
   offered a security interest, Grantor will provide Lender with such loss
   payable or other endorsements as Lender may require.  If Grantor at any time
   fails to obtain or maintain any insurance as required under this Agreement,
   Lender may (but shall not be obligated to) obtain such insurance as Lender
   deems appropriate, including if Lender so chooses "single interest
   insurance," which will cover only Lender's interest in the Collateral.

   Application of Insurance Proceeds.  Grantor shall promptly notify Lender of
   any loss or damage to the Collateral.  Lender may make proof of loss if
   Grantor fails to do so within fifteen (15) days of the casualty.  All
   proceeds of any insurance on the Collateral, including accrued proceeds
   thereon, shall be held by Lender as part of the Collateral.  If Lender
   consents to repair or replacement of the damaged or destroyed Collateral,
   Lender shall, upon satisfactory proof of expenditure, pay or reimburse
   Grantor from the proceeds for the reasonable cost of repair or restoration.
   If Lender does not consent to repair or replacement of the Collateral, Lender
   shall retain a sufficient amount of the proceeds to pay all of the
   Indebtedness, and shall pay the balance to Grantor.  Any proceeds which have
   not been disbursed within six (6) months after their receipt and which
   Grantor has not committed to the repair or restoration of the Collateral
   shall be used to prepay the Indebtedness.

   Insurance Reserves.  Lender may require Grantor to maintain with Lender
   reserves for payment of insurance premiums, which reserves shall be created
   by monthly payments from Grantor of a sum estimated by Lender to be
   sufficient to produce, at least fifteen (15) days before the premium due
   date, amounts at least equal to the insurance premiums to be paid.  If
   fifteen (15) days before the payment is due, the reserve funds are
   insufficient, Grantor shall upon demand pay any deficiency to Lender.  The
   reserve funds shall be held by Lender as a general deposit and shall
   constitute a non-interest-bearing account which Lender may satisfy by payment
   of the insurance premiums required to be paid by Grantor as they become due.
   Lender does not hold the reserve funds in trust for Grantor, and Lender is
   not the agent of Grantor for payment of the insurance premiums required to be
   paid by Grantor.  The responsibility for the payment of premiums shall remain
   Grantor's sole responsibility.

   Insurance Reports.  Grantor, upon request of Lender, shall furnish to Lender
   reports on each existing policy of insurance showing such information as
   Lender may reasonably request including the following:  (1) the name of the
   insurer; (2) the risks insured; (3) the amount of the policy; (4) the
   property insured; (5) the then current value on the basis of which insurance
   has been obtained and the manner of determining that

                         COMMERCIAL SECURITY AGREEMENT
                                                                          Page 4

   value; and (6) the expiration date of the policy. In addition, Grantor shall
   upon request by Lender (however not more often than annually) have an
   independent appraiser satisfactory to Lender determine, as applicable, the
   cash value or replacement cost of the Collateral.

as otherwise provided below with respect to accounts, Grantor may have
possession of the tangible personal property and beneficial use of all the
Collateral and may use it in any lawful manner not inconsistent with this
Agreement or the Related Documents, provided that Grantor's right to possession
and beneficial use shall not apply to any Collateral where possession of the
Collateral by Lender is required by law to perfect Lender's security interest in
such Collateral.  Until otherwise notified by Lender, Grantor may collect any of
the Collateral consisting of accounts.  At any time and even though no Event of
Default exists, Lender may exercise its rights to collect the accounts and to
notify account debtors to make payments directly to Lender for application to
the Indebtedness.  If Lender at any time has possession of any Collateral,
whether before or after an Event of Default, Lender shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral if
Lender takes such action for that purpose as Grantor shall request or as Lender,
in Lender's sole discretion, shall deem appropriate under the circumstances, but
failure to honor any request by Grantor shall not of itself be deemed to be a
failure to exercise reasonable care.  Lender shall not be required to take any
steps necessary to preserve any rights in the Collateral against prior parties,
nor to protect, preserve or maintain any security interest given to secure the

LENDER'S EXPENDITURES.  If any action or proceeding is commenced that would
materially affect Lender's interest in the Collateral or if Grantor fails to
comply with any provision of this Agreement or any Related Documents, including
but not limited to Grantor's failure to discharge or pay when due any amounts
Grantor is required to discharge or pay under this Agreement or any Related
Documents, Lender on Grantor's behalf may (but shall not be obligated to) take
any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interests, encumbrances and
other claims, at any time levied or placed on the Collateral and paying all
costs for insuring, maintaining and preserving the Collateral.  All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Grantor.  All such expenses will become a
part of the Indebtedness and, at Lender's option, will (A) be payable on demand;
(B) be added to the balance of the Note and be apportioned among and be payable
with any installment payments to become due during either (1) the term of any
applicable insurance policy; or (2) the remaining term of the Note; or (C) be
treated as a balloon payment which will be due and payable at the Note's
maturity.  The Collateral also will secure payment of these amounts.  Such right
shall be in addition to all other rights and remedies to which Lender may be
entitled upon Default.

DEFAULT.  Each of the following shall constitute an Event of Default under this

   Payment Default.  Borrower fails to make any payment when due under the

   Other Defaults.  Borrower or Grantor fails to comply with or to perform any
   other term, obligation, covenant or condition contained in this Agreement or
   in any of the Related Documents or to comply with or to perform any term,
   obligation, covenant or condition contained in any other agreement between
   Lender and Borrower or Grantor.

   Default in Favor of Third Parties.  Should Borrower or any Grantor default
   under any loan, extension of credit, security agreement, purchase or sales
   agreement, or any other agreement, in favor of any other creditor or person
   that may materially affect any of Borrower's property or Borrower's or any
   Grantor's ability to repay the Indebtedness or perform their respective
   obligations under this Agreement or any of the Related Documents.

   False Statements.  Any warranty, representation or statement made or
   furnished to Lender by Borrower or Grantor or on Borrower's or Grantor's
   behalf under this Agreement, the Note, or the Related Documents is false or
   misleading in any material respect, either now or at the time made or
   furnished or becomes false or misleading at any time thereafter.

   Defective Collateralization.  This Agreement or any of the Related Documents
   ceases to be in full force and effect (including failure of any collateral
   document to create a valid and perfected security interest or lien) at any
   time and for any reason.

   Insolvency.  The dissolution or termination of Borrower's or Grantor's
   existence as a going business, the insolvency of Borrower or Grantor, the
   appointment of a receiver for any part of Borrower's or Grantor's property,
   any assignment for the benefit of creditors, any type of creditor workout, or
   the commencement of any proceeding under any bankruptcy or insolvency laws by
   or against Borrower or Grantor.

   Creditor or Forfeiture Proceedings.  Commencement of foreclosure or
   forfeiture proceedings, whether by judicial proceeding, self-help,
   repossession or any other method, by any creditor of Borrower or Grantor or
   by any governmental agency against any collateral securing the Indebtedness.
   This includes a garnishment of any of Borrower's or Grantor's accounts,
   including deposit accounts, with Lender.  However, this Event of Default
   shall not apply if there is a good faith dispute by Borrower or Grantor as to
   the validity or reasonableness of the claim which is the basis of the
   creditor or forfeiture proceeding and if Borrower or Grantor gives Lender
   written notice of the creditor or forfeiture proceeding and deposits with
   Lender monies or a surety bond for the creditor or forfeiture proceeding, in
   an amount determined by Lender, in its sole discretion, as being an adequate
   reserve or bond for the dispute.

   Events Affecting Guarantor.  Any of the preceding events occurs with respect
   to guarantor, endorser, surety, or accommodation party of any of the
   Indebtedness or guarantor, endorser, surety, or accommodation party dies or
   becomes incompetent.

   Adverse Change.  A material adverse change occurs in Borrower's or Grantor's
   financial condition, or Lender believes the prospect of payment or
   performance of the Indebtedness is impaired.

RIGHTS AND REMEDIES ON DEFAULT.  If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a secured
party under the California Uniform Commercial Code.  In addition and without
limitation, Lender may exercise any one or more of the following rights and

   Accelerate Indebtedness.  Lender may declare the entire Indebtedness,
   including any prepayment penalty which Borrower would be required to pay,
   immediately due and payable, without notice of any kind to Borrower or

   Assemble Collateral.  Lender may require Grantor to deliver to Lender all or
   any portion of the Collateral and any and all certificates of title and other
   documents relating to the Collateral.  Lender may require Grantor to assemble
   the Collateral and make it available to Lender at a place to be designated by
   Lender.  Lender also shall have full power to enter upon the property of
   Grantor to take possession of and remove Collateral.  If

                         COMMERCIAL SECURITY AGREEMENT
                                                                          Page 5

   the Collateral contains other goods not covered by this Agreement at the time
   of repossession, Grantor agrees Lender may take such other goods, provided
   that Lender makes reasonable efforts to return them to Grantor after

   Sell the Collateral.  Lender shall have full power to sell, lease, transfer,
   or otherwise deal with the Collateral or proceeds thereof in Lender's own
   name or that of Grantor.  Lender may sell the Collateral at public auction or
   private sale.  Unless the Collateral threatens to decline speedily in value
   or is of a type customarily sold on a recognized market, Lender will give
   Grantor reasonable notice of the time after which any private sale or any
   other intended disposition of the Collateral is to be made.  The requirements
   of reasonable notice shall be met if such notice is given at least fifteen
   (15) days, or such lesser time as required by state law, before the time of
   the sale or disposition.  All expenses relating to the disposition of the
   Collateral, including without limitation the expenses of retaking, holding,
   insuring, preparing for sale and selling the Collateral, shall become a part
   of the Indebtedness secured by this Agreement and shall be payable on demand,
   with interest at the Note rate from date of expenditure until repaid.

   Appoint Receiver.  Lender shall have the right to have a receiver appointed
   to take possession of all or any part of the Collateral, with the power to
   protect and preserve the Collateral, to operate the Collateral preceding
   foreclosure or sale, and to collect the Rents from the Collateral and apply
   the proceeds, over and above the cost of the receivership, against the
   Indebtedness.  The receiver may serve without bond if permitted by law.
   Lender's rights to the appointment of a receiver shall exist whether or not
   the apparent value of the Collateral exceeds the Indebtedness by a
   substantial amount.  Employment by Lender shall not disqualify a person from
   serving as a receiver.

   Collect Revenues, Apply Accounts.  Lender, either itself or through receiver,
   may collect the payments, rents, income, and revenues from the Collateral.
   Lender may at any time in Lender's discretion transfer any Collateral into
   Lender's own name or that of Lender's nominee and receive the payments,
   rents, income, and revenues therefrom and hold the same as security for the
   Indebtedness or apply it to payment of the Indebtedness in such order of
   preference as Lender may determine.  Insofar as the Collateral consists of
   accounts, general intangibles, insurance policies, instruments, chattel
   paper, choses in action, or similar property, Lender may demand, collect,
   receipt for, settle, compromise, adjust, sue for, foreclose, or realize on
   the Collateral as Lender may determine, whether or not Indebtedness or
   Collateral is then due.  For these purposes, Lender may, on behalf of and in
   the name of Grantor, receive, open and dispose of mail addressed to Grantor;
   change any address to which mail and payments are to be sent; and endorse
   notes, checks, drafts, money orders, documents of title, instruments and
   items pertaining to payment, shipment, or storage of any Collateral.  To
   facilitate collection, Lender may notify account debtors and obligors on any
   Collateral to make payments directly to Lender.

   Obtain Deficiency.  If Lender chooses to sell any or all of the Collateral,
   Lender may obtain a judgment against Borrower for any deficiency remaining on
   the Indebtedness due to Lender after application of all amounts received from
   the exercise of the rights provided in this Agreement.  Borrower shall be
   liable for a deficiency even if the transaction described in this subsection
   is a sale of accounts or chattel paper.

   Other Rights and Remedies.  Lender shall have all the rights and remedies of
   a secured creditor under the provisions of the Uniform Commercial Code, as
   may be amended from time to time.  In addition, Lender shall have and may
   exercise any or all other rights and remedies it may have available at law,
   in equity, or otherwise.

   Election Remedies.  Except as may be prohibited by applicable law, all of
   Lender's rights and remedies, whether evidenced by this Agreement, the
   Related Documents, or by any other writing, shall be cumulative and may be
   exercised singularly or concurrently.  Election by Lender to pursue any
   remedy will not bar any other remedy, and an election to make expenditures or
   to take action to perform an obligation of Grantor under this Agreement,
   after Grantor's failure to perform, shall not affect Lender's right to
   declare a default and exercise its remedies.

MISCELLANEOUS PROVISIONS.  The following miscellaneous provisions are a part of
this Agreement:

   Amendments.  This Agreement, together with any Related Documents, constitutes
   the entire understanding and agreement of the parties as to the matters set
   forth in this Agreement.  No alteration of or amendment to this Agreement
   shall be effective unless given in writing and signed by the party or parties
   sought to be charged or bound by the alteration or amendment.

   Attorneys' Fees; Expenses.  Grantor agrees to pay upon demand all of Lender's
   costs and expenses, including Lender's attorneys' fees and Lender's legal
   expenses, incurred in connection with the enforcement of this Agreement.
   Lender may hire or pay someone else to help enforce this Agreement, and
   Grantor shall pay the costs and expenses of such enforcement.  Costs and
   expenses include Lender's attorneys' fees and legal expenses whether or not
   there is a lawsuit, including attorneys' fees and legal expenses for
   bankruptcy proceedings (including efforts to modify or vacate any automatic
   stay or injunction), appeals, and any anticipated post-judgment collection
   services.  Grantor also shall pay all court costs and such additional fees as
   may be directed by the court.

   Caption Headings.  Caption headings in this Agreement are for convenience
   purposes only and are not to be used to interpret or define the provisions of
   this Agreement.

   Governing Law.  This Agreement will be governed by, construed and enforced in
   accordance with federal law and the laws of the State of California.  This
   Agreement has been accepted by Lender in the State of California.

   Choice of Venue.  If there is a lawsuit, Grantor agrees upon Lender's request
   to submit to the jurisdiction of the courts of LOS ANGELES County, State of

   Joint and Several Liability.  All obligations of Borrower and Grantor under
   this Agreement shall be joint and several, and all references to Grantor
   shall mean each and every Grantor, and all references to Borrower shall mean
   each and every Borrower.  This means that each Borrower and Grantor signing
   below is responsible for all obligations in this Agreement.  Where any one or
   more of the parties is a corporation, partnership, limited liability company
   or similar entity, it is not necessary for Lender to inquire into the powers
   of any of the officers, directors, partners, members, or other agents acting
   or purporting to act on the entity's behalf, and any obligations made or
   created in reliance upon the professed exercise of such powers shall be
   guaranteed under this Agreement.

   Preference Payments.  Any monies Lender pays because of an asserted
   preference claim in Borrower's or Grantor's bankruptcy will become a part of
   the Indebtedness and, at Lender's option, shall be payable by Borrower and
   Grantor as provided in this Agreement.

   No Waiver by Lender.  Lender shall not be deemed to have waived any rights
   under this Agreement unless such waiver is given in writing and signed by
   Lender.  No delay or omission on the part of Lender in exercising any right
   shall operate as a waiver of such right or any other right.  A waiver by
   Lender of a provision of this Agreement shall not prejudice or constitute a
   waiver of Lender's right otherwise to demand strict

                         COMMERCIAL SECURITY AGREEMENT
                                                                          Page 6

   compliance with that provision or any other provision of this Agreement. No
   prior waiver by Lender, nor any course of dealing between Lender and Grantor,
   shall constitute a waiver of any of Lender's rights or of any of Grantor's
   obligations as to any future transactions. Whenever the consent of Lender is
   required under this Agreement, the granting of such consent by Lender in any
   instance shall not constitute continuing consent to subsequent instances
   where such consent is required and in all cases such consent may be granted
   or withheld in the sole discretion of Lender.

   Notices.  Any notice required to be given under this Agreement shall be given
   in writing, and shall be effective with actually delivered, when actually
   received by telefacsimile (unless otherwise required by law), when deposited
   with a nationally recognized overnight courier, or, if mailed, when deposited
   in the United States mail, as first class, certified or registered mail
   postage prepaid, directed to the addresses shown near the beginning of this
   Agreement. Any party may change its address for notices under this Agreement
   by giving formal written notice to the other parties, specifying that the
   purpose of the notice is to change the party's address.  For notice purposes,
   Grantor agrees to keep Lender informed at all times of Grantor's current
   address.  Unless otherwise provided or required by law, if there is more than
   one Grantor, any notice given by Lender to any Grantor is deemed to be notice
   given to all Grantors.

   Power of Attorney.  Grantor hereby appoints Lender as Grantor's irrevocable
   attorney-in-fact for the purpose of executing any documents necessary to
   perfect or to continue the security interest granted in this Agreement.
   Lender may at any time, and without further authorization from Grantor, file
   a carbon, photographic or other reproduction of any financing statement or of
   this Agreement for use as a financing statement.  Grantor will reimburse
   Lender for all expenses for the perfection and the continuation of the
   perfection of Lender's security interest in the Collateral.

   Waiver of Co-Obligor's Rights.  If more than one person is obligated for the
   Indebtedness, Grantor irrevocably waives, disclaims and relinquishes all
   claims against such other person which Grantor has or would otherwise have by
   virtue of payment of the Indebtedness or any part thereof, specifically
   including but not limited to all rights of indemnity, contribution or

   Severability.  If a court of competent jurisdiction finds any provision of
   this Agreement to be illegal, invalid, or unenforceable as to any
   circumstance, that finding shall not make the offending provision illegal,
   invalid, or unenforceable as to any other circumstance.  If feasible, the
   offending provision shall be considered modified so that it becomes legal,
   valid and enforceable.  If the offending provision cannot be so modified, it
   shall be considered deleted from this Agreement. Unless otherwise required by
   law, the illegality, invalidity, or unenforceability of any provision of this
   Agreement shall not affect the legality, validity or enforceability of any
   other provision of this Agreement.

   Successors and Assigns.  Subject to any limitations stated in this Agreement
   on transfer of Grantor's interest, this Agreement shall be binding upon and
   inure to the benefit of the parties, their successors and assigns.  If
   ownership of the Collateral becomes vested in a person other than Grantor,
   Lender, without notice to Grantor, may deal with Grantor's successors with
   reference to this Agreement and the Indebtedness by way of forbearance or
   extension without releasing Grantor from the obligations of this Agreement or
   liability under the Indebtedness.

   Survival of Representations and Warranties.  All representations, warranties,
   and agreements made by Grantor in this Agreement shall survive the execution
   and delivery of this Agreement, shall be continuing in nature, and shall
   remain in full force and effect until such time as Borrower's Indebtedness
   shall be paid in full.

   Time is of the Essence.  Time is of the essence in the performance of this

DEFINITIONS.  The following capitalized words and terms shall have the following
meanings when used in this Agreement.  Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money of
the United States of America.  Words and terms used in the singular shall
include the plural, and the plural shall include the singular, as the context
may require.  Words and terms not otherwise defined in this Agreement shall have
the meanings attributed to such terms in the Uniform Commercial Code:

   Account.  The word "Account" means a trade account, account receivable, other
   receivable, or other right to payment for goods sold or services rendered
   owing to Grantor (or to a third party grantor acceptable to Lender).

   Agreement.  The word "Agreement" means this Commercial Security Agreement, as
   this Commercial Security Agreement may be amended or modified from time to
   time, together with all exhibits and schedules attached to this Commercial
   Security Agreement from time to time.

   Borrower.  The word "Borrower" means DAILY JOURNAL CORPORATION, A SOUTH
   and all other persons and entities signing the Note in whatever capacity.

   Collateral.  The word "Collateral" means all of Grantor's right, title and
   interest in and to all the Collateral as described in the Collateral
   Description section of this Agreement.

   Default.  The word "Default" means the Default set forth in this Agreement in
   the section titled "Default".

   Environmental Laws.  The words "Environmental Laws" mean any and all state,
   federal and local statutes, regulations and ordinances relating to the
   protection of human health or the environment, including without limitation
   the Comprehensive Environmental Response, Compensation, and Liability Act of
   1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund
   Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the
   Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the
   Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq.,
   Chapters 6.5 through 7.7 of Division 20 of the California Health and Safety
   Code, Section 25100, et seq., or other applicable state or federal laws,
   rules, or regulations adopted pursuant thereto.

   Event of Default.  The words "Event of Default" mean any of the Events of
   Default set forth in this Agreement in the Default section of this Agreement.

   Grantor.  The word "Grantor" means DAILY JOURNAL CORPORATION, A SOUTH

   Hazardous Substances.  The words "Hazardous Substances" mean materials that,
   because of their quantity, concentration or physical, chemical or infectious
   characteristics, may cause or pose a present or potential hazard to human
   health or the environment when improperly used, treated, stored, disposed of,
   generated, manufactured, transported or otherwise handled.  The words
   "Hazardous Substances" are used in their very broadest sense and include
   without limitation any and all hazardous or toxic substances, materials or
   waste as defined by or listed under the Environmental Laws.  The term
   "Hazardous Substances" also includes, without limitation, petroleum and
   petroleum by-products or any fraction thereof and asbestos.

                         COMMERCIAL SECURITY AGREEMENT
                                                                          Page 7

   Indebtedness.  The word "Indebtedness" means the indebtedness evidenced by
   the Note or Related Documents, including all principal and interest together
   with all other indebtedness and costs and expenses for which Borrower is
   responsible under this Agreement or under any of the Related Documents.

   Lender.  The word "Lender" means City National Bank, NA, its successors and

   Note.  The word "Note" means the Note executed by Borrower in the principal
   amount of $4,000,000.00 dated January 2, 2001, together with all renewals of,
   extensions of, modifications of, refinancings of, consolidations of, and
   substitutions for the note or credit agreement.

   Related Documents.  The words "Related Documents" mean all promissory notes,
   credit agreements, loan agreements, environmental agreements, guaranties,
   security agreements, mortgages, deeds of trust, security deeds, collateral
   mortgages, and all other instruments, agreements and documents, whether now
   or hereafter existing, executed in connection with the Indebtedness.

                         COMMERCIAL SECURITY AGREEMENT
                                                                          Page 8

JANUARY 2, 2001.



By: /s/ Gerald L. Salzman



By: /s/ Gerald L. Salzman
    GERALD L. SALZMAN, President/CFO/Treasurer of


By: /s/ Gerald L. Salzman