Exhibit 10.4

MORTGAGE AND SECURITY AGREEMENT

THIS AGREEMENT is made this twenty-fifth day of June, 2008, by and between
Action Products International, Inc., a Florida Corporation, whose address is 344
Cypress Road, Ocala, Florida 34472, (hereinafter called “Mortgagor”), and
Presidential Financial Corporation, whose address is 1979 Lakeside Parkway Suite
400, Tucker, GA 30084 (hereinafter called “Mortgagee”).

W I T N E S S E T H:

Mortgagor, in consideration of the sum of Ten and No/100 Dollars ($10.00) and
other valuable consideration to Mortgagor paid by Mortgagee, receipt whereof is
hereby acknowledged, does hereby grant, bargain, sell, assign, transfer, convey
and confirm unto Mortgagee the following property, situated in Marion County,
Florida, described as:

See exhibit “A” attached

Together with all buildings, structures, and other improvements and all
fixtures, furniture, and furnishings, equipment, carpeting, appliances, and all
other personality now on such land or that may hereafter be erected or placed
thereon or acquired therefor, including but not limited to, all heating,
lighting, plumbing, ventilating, air conditioning, sprinkling, water and power
systems, appliances and fixtures; and all substitutions and replacements thereof
and all proceeds thereof, including insurance proceeds . The real and personal
property described herein is sometimes hereafter collectively called “the
property” or the “mortgaged property.”

Mortgagor also hereby grants, assigns, transfers, and conveys to Mortgagee all
rents, issues, income and profits from the property, which are hereby
specifically assigned and pledged to Mortgagee as Security for the payment of
the debt herein referred to and Mortgagor’s performance of all of Mortgagor’s
covenants and Agreements herein contained.

Mortgagor also hereby grants, assigns, transfers, and conveys to Mortgagee all
and singular the ways, easements, riparian and other rights, and all tenements,
hereditaments, and appurtenances belonging to the property or in anywise
appertaining thereto.

Mortgagor hereby grants to Mortgagee a mortgage and security interest in all of
the property described in this Agreement and in addition to the rights of a
mortgagee, Mortgagee shall have all of the rights of a secured party under the
Florida Uniform Commercial Code.

TO HAVE AND TO HOLD the above described property unto Mortgagee forever.

Mortgagor hereby covenants with Mortgagee that Mortgagor is indefeasibly seized
with the absolute and fee simple title to the property; that Mortgagor has full
power and lawful authority to sell, convey, assign, transfer, and mortgage the
same; that it shall be lawful for Mortgagee at any time hereafter peaceably and
quietly to enter upon, have, hold, and enjoy the property and every part
thereof; that the property is free and discharged from all liens, encumbrances,
and claims of every kind, except for all taxes and assessments not yet due and
payable and governmental regulations.

Mortgagor covenants that Mortgagor, at Mortgagor’s own expense, will execute
such other and further instruments and assurances to vest a first priority
mortgage and security interest to the property in Mortgagee that may be
requested by Mortgagee; and that Mortgagor will warrant and defend the title to
the property unto Mortgagee against the lawful claims and demands of all persons
whomsoever.

This mortgage, inter alia, is given to secure to Mortgagee payment of that
certain promissory note in the amount of Two Million and No/100 Dollars
($2,000,000.00) by Mortgagor, accruing interest at the rate in said note on the
principal amounts remaining from time to time unpaid (said note is incorporated
herein by reference and hereinafter referred to as the “Note”). The Note is
payable to the order of Mortgagee at:

1979 Lakeside Parkway Suite 400, Tucker, GA 30084

 

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Until full payment of the Note or any extensions, renewals, modifications, or
replacements thereof, in whole or in part, and until payment of all other
indebtedness or liability that may become due or owing hereunder and secured
hereby, if Mortgagor shall faithfully and promptly comply with and perform each
every obligation herein on the part of Mortgagor to be compiled with and
performed, then this agreement shall be void.

Mortgagor agrees that any additional sum or sums advanced by the then holder of
the Note secured hereby to or for the benefit of Mortgagor or Borrower, whether
such advances are obligatory or made at the option of Mortgagee, or otherwise,
at any time within twenty (20) years from the date of this mortgage, with
interest thereon at the rate agreed upon at the time of each additional loan or
advance, shall be equally secured with and have the same priority as the
original indebtedness secured hereby and all such sums shall be subject to all
of the terms and provisions of this mortgage, whether or not such additional
loan or advance is evidenced by a promissory note and whether or not identified
by a recital that it is secured by this mortgage; provided that the aggregate
amount of equity for the principal indebtedness outstanding at any one time
shall not exceed the sum of $2,000,000.00, plus travel and expenses; and
provided further that it is understood and agreed that this future advance
provision shall not be construed to obligate Mortgagee to make any such
additional loans or advances. It is further agreed that any additional note or
notes executed and delivered under this future advance provision shall be
included in the word “Note” wherever it appears in the context of this mortgage.

And Mortgagor hereby further covenants to the following obligations:

To pay, with interest and service charges, the Note and any extensions or
renewals thereof, in whole or in part, and all other indebtedness or liability
hereby secured, however created or evidenced, promptly when the same
respectively becomes due; to pay and/or discharge any other amounts,
indebtedness and/or liability that may in the future become due, owing or
outstanding from Mortgagor to Mortgagee, however the same may be or may have
been contracted, evidenced or accrued; to pay all taxes and assessments levied
or assessed upon the property before the same become delinquent, and in no event
to permit the property, or any part thereof, to be sold for nonpayment of taxes
or assessments; to keep the property in good repair and to permit, commit or
suffer no waste, impairment or deterioration thereof; to comply strictly with
all laws and governmental regulations and rules affecting the property or its
operation; and to pay all taxes that may be levied or assessed on this mortgage
or the moneys secured hereby; to permit no mechanic’s or other liens arising
either by contract or by law, to be created or rest upon all or any part of the
property for ten days without the same being paid or released, and discharge of
the property therefrom procured; and to pay all costs and expenses incurred or
paid by Mortgagee in collecting the moneys hereby secured or in enforcing or
protecting the rights and security of the Mortgagee hereunder, including
reasonable attorney’s fees incurred out of court, at trial, on appeal, or in
bankruptcy proceedings, in the event the mortgage and the note or other evidence
of indebtedness or liability be placed in the hands of an attorney for
collection.

Mortgagor further covenants to keep the building, structures and other
improvements now or hereafter erected or placed on the premises and constituting
a part of the mortgage security constantly insured against all loss or damage
for the full insurable value of the property for fire, windstorm and extended
coverage in insurance companies satisfactory to Mortgagee which policies shall
provide for not less than ten days written notice of cancellation to Mortgagee,
and to pay promptly all premiums for such insurance (with a copy to Mortgagee),
the policies representing which shall be delivered to Mortgagee as additional
security for the payment of the indebtedness and liability security hereby. All
sums recoverable on any such insurance policies shall be made payable to
Mortgagee by a loss payable clause satisfactory to Mortgagee. In the event any
such insurance policy shall expire during the life hereof, Mortgagor agrees to
procure and pay for renewal thereof, with the above requirements, replacing such
expired policy, and deposit the same with Mortgagee, together with receipts
showing payment in full of premiums therefor, ten days prior to the expiration
date of such policy.

It is further covenanted the Mortgagee may (but shall not be obligated so to do)
advance moneys that should have been paid by Mortgagor hereunder in order to
protect the lien or security hereof, and Mortgagor agrees without demand to
forthwith repay such money, which amount shall bear interest from the date so
advanced until paid at the rate in the Note and shall be considered as so much
additional indebtedness secured hereby; but no payment by Mortgagee of any such
moneys shall be deemed a waiver of Mortgagee’s right to declare the principal
sum due hereunder by reason of the default or violation of Mortgagor in any of
the Mortgagor’s covenants hereunder.

 

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The Mortgagor further covenants and agrees that a sale, transfer, assignment, or
conveyance of all or any part of the legal or equitable title to the property or
any part of or interest in the property, whether voluntarily or by operation of
law shall not occur without the consent of Mortgagee.

Mortgagor further agrees not to create or permit the creation of any other
mortgage, charge, lien or encumbrance against the mortgaged property without
obtaining the written consent of Mortgagee. Mortgagor agrees that a default by
Mortgagor in any term, covenant or provision of any mortgage, whether junior or
senior to this Mortgage, that may now or hereafter encumber the mortgaged
property, or any part hereof, shall constitute a default hereunder.

Mortgagor further agrees not to crate or permit the creation of any other
mortgage, charge, lien, or encumbrance against the mortgaged property without
obtaining the written consent of Mortgagee. Mortgagor further covenants that
granting any extension or extensions of the time payment of any part of all of
the total indebtedness or liability secured hereby, or taking other or
additional security for payment thereof, shall not affect this mortgage or the
rights of Mortgagee hereunder, or operate as a release from any liability upon
any part of the indebtedness hereby secured under any covenant herein contained.

It is further stipulated and agreed by and between the parties that the
Mortgagee shall have the right to exercise any option or privilege herein given
or reserved and to enforce any duty of the Mortgagor at any time without further
or other notice regardless of any prior waiver by Mortgagee or default of
Mortgagor or delay by Mortgagee in exercising any right, option, or privilege or
enforcing such duty of Mortgagor, and no waiver by Mortgagee of default of
Mortgagor nor delay of Mortgagee in exercising any right, privilege or option or
in enforcing any duty of Mortgagor shall be deemed, held, or construed to be a
waiver of any of the terms or provisions of this mortgage or of any subsequent
or continuing default.

The mortgagor further covenants and agrees to make all payments and perform all
conditions and covenants called for in any prior mortgages now encumbering the
property and in the event of default in any such payment or payments, conditions
or stipulations, the Mortgagee, without waiving the option to foreclose, herein
reserves the right to make such payments. Any and all such sums paid or expenses
incurred on behalf of the Mortgagor, together with interest thereon from the
date of payment at the rate of interest prescribed in the note underlying this
mortgage, shall be added to the mortgage indebtedness and be secured by this
mortgage.

It is further covenanted and agreed that if at any time in the opinion of
Mortgagee a receivership may be necessary to protect the mortgaged property, or
its rents, issues, profits, crops, or produce whether before or after maturity
of the indebtedness hereby secured or at the time of or after the institution of
suit to collect such indebtedness, or to enforce the mortgage, Mortgagee shall,
as a matter of strict right and regardless of the value of the mortgage security
for the amounts due hereunder or secured hereby, or of the solvency of any party
bound for the payment of such indebtedness, have the right to the appointment on
ex parte application, and without notice to anyone, by any Court having
jurisdiction, of a receiver to take charge of, manage, preserve, protect, or
operate the property.

It is further covenanted and made of the essence hereof that in case of default
for ten (10) days in the performance of any of the covenants, agreements, terms,
provisions, duties or obligations on the part of Mortgagor herein, on the part
of the Borrower in the Note, or on the part of the Borrower or Mortgagor in any
other instrument relating to or securing the Note, then it shall be optional
with Mortgagee to consider all unmatured indebtedness or liability secured
hereby, and accrued interest thereof, as immediately due and payable, without
demand and without notice or declaration of said option, and Mortgagee shall
have the right forthwith to institute proceedings to enforce the collection of
all moneys secured hereby and/or to foreclose the lien hereof.

In the event that any of the covenants, agreements, terms, or provisions
contained in the Note, this Mortgage or any other instrument relating to or
securing the Note shall be invalid, illegal, or unenforceable in any respect,
the validity of the remaining covenants, agreements, terms or provisions
contained herein, in the Note, or in any other instrument relating to or
securing the Note, shall be in no way affected, prejudiced, or disturbed
thereby.

Notwithstanding any provision contained herein, the total liability of Borrower
or Mortgagor for payment of interest including service charges, penalties and
any other fees pursuant to the Note, this Mortgage or any other instrument
relating to or securing the Note, shall not exceed the maximum amount of such
interest permitted by applicable law to be charged, and if any payments by
Mortgagor or Borrower include interest in excess of such maximum amount,
Mortgagee shall apply such excess to the reduction of the unpaid principal
amount due pursuant hereto.

 

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BORROWER AND LENDER KNOWINGLY, VOLUNTARILY AND INTENTIONALLY BY EXECUTING THIS
AGREEMENT OR ANY OTHER DOCUMENT IN CONNECTION HEREWITH, WAIVE THEIR RIGHTS TO A
TRIAL BY JURY IN ANY ACTION, WHETHER ARISING IN CONTRACT OR TORT, BY STATUTE OR
OTHERWISE, IN ANY WAY RELATED TO THIS AGREEMENT AND ANY AGREEMENT CONTEMPLATED
TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF EITHER PARTY, OR
ANY OF THEM. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER ENTERING INTO
THIS AGREEMENT AND NO WAIVER OR LENDER ENTERING INTO THIS AGREEMENT AND NO
WAIVER OR LIMITATION OF LENDER’S RIGHT UNDER THIS PARAGRAPH SHALL BE EFFECTIVE
UNLESS IN WRITING AND MANUALLY SIGNED ON LENDER’S BEHALF.

IN WITNESS WHEREOF, Mortgagors have executed this mortgage the 25th day of June,
2008.

Signed, sealed and delivered

in the presence of:

 

    Action Products International, Inc., a Florida Corporation

/s/ Raymond Alberti

    By:  

/s/ Robert Burrows

Name printed: Raymond Alberti       Robert Burrows, Chief Financial Officer

/s/ Tomario Causey

      Name printed: Tomario Causey      

 

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