On February 10, 2015, Talon OP, L.P., a Minnesota limited partnership and the entity through which Talon Real Estate Holding Corp. conducts substantially all of its business, entered into a promissory note with US Income Partners, LLC, to borrow up to $2,000,000 in aggregate principal with an interest rate of 16% and a maturity date of March 1, 2016. The loan is secured by a second mortgage on certain property at 10301 Bren Road West, Minnetonka, MN held by Talon Bren Road, LLC, a wholly owned subsidiary of Talon OP.

The loan documents contain events of default that are customary for loans of this type. The foregoing description of the terms and conditions of the loan documents does not purport to be complete and is qualified in its entirety by the Promissory Note executed by Talon OP in favor of US Income Partners, LLC, dated February 10, 2015 and the Mortgage, Assignment of Leases and Rents, Security Agreement, and Fixture Filing Statement executed by Talon Bren Road, LLC in favor of USIP, dated February 10, 2015. The obligations of Talon OP under the loan are guaranteed by both Talon Real Estate Holding Corp.

and Thomas E. Masaschi. In consideration for Mr. Masaschi providing the guaranty, Talon Real Estate Holding Corp. issued Mr. Masaschi 460,000 shares of the its common stock.

The foregoing description of the terms and conditions of these agreements does not purport to be complete and is qualified in its entirety by the Guaranty Agreement executed by Talon Real Estate Holding Corp. in favor of USIP, effective as of February 10, 2015.