Exhibit 10.3
 
SECURITY AGREEMENT
 
This SECURITY AGREEMENT dated as of June 10, 2011 (the “Security Agreement”), is
executed by and among DIAMEDIX CORPORATION, a Florida corporation, whose address
is 2140 North Miami Avenue, Miami, Florida 33127 (the “Debtor”), and CITY
NATIONAL BANK OF FLORIDA, whose address is 25 West Flagler Street, Miami,
Florida 33130 (the “Bank”).
 
RECITALS:
 
A.           The Debtor has requested and the Bank has agreed to make a
revolving line of credit in the maximum principal amount of NINE HUNDRED
SEVENTY-FIVE THOUSAND AND NO/100 DOLLARS ($975,000.00) to the Debtor, which
shall be used to finance the Debtor’s working capital requirements.
 
B.           As a condition to the Bank's loaning funds or providing other
financial accommodations to the Debtor, the Bank requires that the Debtor enter
into this Security Agreement in order to secure the obligations and performance
of the Debtor under such loans or financial accommodations.
 
NOW THEREFORE, in consideration of the premises, and the mutual covenants and
agreements set forth herein, the Debtor and the Bank hereby agree as follows:
 
AGREEMENTS:
 
Section 1                      DEFINITIONS.
 
1.1           Defined Terms.  For the purposes of this Security Agreement, the
following capitalized words and phrases shall have the meanings set forth below.
 
“Affiliate” of the Bank shall mean (a) any entity which, directly or indirectly,
controls or is controlled by or is under common control with the Bank, and (b)
any entity administered or managed by the Bank, or an Affiliate or investment
advisor thereof and which is engaged in making, purchasing, holding or otherwise
investing in commercial loans.  An entity shall be deemed to be “controlled by”
another entity if such other entity possesses, directly or indirectly, power to
direct or cause the direction of the management and policies of such entity
whether by contract, ownership of voting securities, membership interests or
otherwise.
 
“Bank Product Agreements” shall mean those certain cash management service
agreements entered into from time to time by the Debtor or any Subsidiary of the
Debtor with the Bank or any Affiliate of the Bank concerning Bank Products.
 
“Bank Product Obligations” shall mean all obligations, liabilities, contingent
reimbursement obligations, fees, and expenses owing by the Debtor or any
Subsidiary of the Debtor to the Bank or any Affiliate of the Bank pursuant to or
evidenced by the Bank Product Agreements and irrespective of whether for the
payment of money, whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising.
 
“Bank Products” shall mean any service or facility extended to the Debtor or any
Subsidiary of the Debtor by the Bank or any Affiliate of the Bank,
including:  (a) credit cards, (b) credit card processing services, (c) debit
cards, (d) purchase cards, (e) ACH transactions, (f) cash management, including
controlled disbursement, accounts or services, or (g) Hedging Agreements.
 
 
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“Bankruptcy Code” shall mean the United States Bankruptcy Code, as now existing
or hereafter amended.
 
“Business Day” shall mean any day except a Saturday, Sunday and any day which is
in Miami, Florida, a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close.
 
“Capital Lease” shall mean, as to any Person, a lease of any interest in any
kind of property or asset, whether real, personal or mixed, or tangible or
intangible, by such Person, as lessee, that is, or should be, in accordance with
Financial Accounting Standards Board Statement No. 13, as amended from time to
time, or, if such statement is not then in effect, such statement of GAAP as may
be applicable, recorded as a “capital lease” on the financial statements of such
Person prepared in accordance with GAAP.
 
“Capital Securities” shall mean, with respect to any Person, all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital, whether now outstanding or
issued or acquired after the date hereof, including common shares, preferred
shares, membership interests in a limited liability company, limited or general
partnership interests in a partnership or any other equivalent of such ownership
interest.
 
“Capitalized Lease Obligations” shall mean, as to any Person, all rental
obligations of such Person, as lessee under a Capital Lease which are or will be
required to be capitalized on the books of such Person.
 
“Collateral” shall have the meaning set forth in Section 2.1 hereof.
 
“Collateral Access Agreement” shall mean an agreement in form and substance
reasonably satisfactory to the Bank pursuant to which a mortgagee or lessor of
real property on which Collateral is stored or otherwise located, or a
warehouseman, processor or other bailee of Inventory or other property owned by
the Debtor of any Subsidiary, acknowledges the Liens of the Bank and waives any
Liens held by such Person on such property, and, in the case of any such
agreement with a mortgagee or lessor, permits the Bank reasonable access to and
use of such real property following the occurrence and during the continuance of
an Event of Default to assemble, complete and sell any collateral stored or
otherwise located thereon.
 
“Default Rate” shall mean a per annum rate of interest equal to the highest rate
authorized by applicable law.
 
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
 
“Event of Default” shall have the meaning set forth in the Loan Agreement.
 
“GAAP” shall mean generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination, provided, however, that interim financial statements or reports
shall be deemed in compliance with GAAP despite the absence of footnotes and
fiscal year-end adjustments as required by GAAP.
 
 
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“Hedging Agreements” shall mean any interest rate, currency or commodity swap
agreement, cap agreement or collar agreement, and any other agreement or
arrangement designed to protect a Person against fluctuations in interest rates,
currency exchange rates or commodity prices.
 
“Hedging Obligation” shall mean, with respect to any Person, any liability of
such Person under any Hedging Agreement.
 
“Letter of Credit” and “Letters of Credit” shall mean, respectively, a letter of
credit and all such letters of credit issued by the Bank, in its sole
discretion, for the account of the Debtor.
 
“Lien” shall mean, with respect to any Person, any interest granted by such
Person in any real or personal property, asset or other right owned or being
purchased or acquired by such Person (including an interest in respect of a
Capital Lease) which secures payment or performance of any obligation and shall
include any mortgage, lien, encumbrance, title retention lien, charge or other
security interest of any kind, whether arising by contract, as a matter of law,
by judicial process or otherwise.
 
“Loan Documents” shall mean each of the agreements, documents, instruments and
certificates from time to time executed and delivered by an Obligor or any of
their Subsidiaries for the benefit of the Bank in connection with the
Obligations, and all amendments, restatements, supplements and other
modifications thereto.
 
“Material Adverse Effect” shall mean any event, circumstance, development, state
of facts, occurrence, change or effect that has a material adverse effect on the
(i) business, assets, financial condition or results of operations of the
Debtor, any Guarantor (as defined in the Loan Agreement by and between the
Debtor and the Bank) or their Subsidiaries (ii) ability of the Debtor or any
Guarantor to perform its obligations under the Loan Documents, or (iii) rights
and/or remedies of the Bank under any of the Loan Documents; provided, that none
of the following shall in and of itself constitute, and no event, circumstance,
development, state of facts, occurrence, change or effect resulting from any of
the following shall constitute, a Material Adverse Effect or be considered in
determining whether a Material Adverse Effect has occurred: (1) any failure in
and of itself (as distinguished from any change or event giving rise or
contributing to such failure) by the Debtor, any Guarantor or their Subsidiaries
to meet any internal projections or forecasts, or (2) any event, circumstance,
development, state of facts, occurrence, change or effect set forth on Schedule
1.1 attached hereto; provided, further, that whether or not any event,
circumstance, development, state of facts, occurrence, change or effect has a
Material Adverse Effect shall take into account any insurance, indemnities,
rights of contribution and/or similar rights and claims available to the Debtor,
any Guarantor and their respective Subsidiaries.
 
“Obligations” shall mean all loans, advances and other financial accommodations,
including, without limitation, those arising pursuant to (i) that certain
Revolving Promissory Note dated as of even date herewith from the Debtor to the
order of the Bank in the principal amount of $975,000.00, (ii) that certain
Mortgage, Assignment of Rents and Security Agreement dated as of even date
herewith, from the Debtor in favor of the Bank, to be recorded in the Public
Records of Miami-Dade County, Florida and (iii) that certain Loan Agreement
dated as of even date herewith by and between the Debtor and the Bank, all
interest accrued thereon (including interest which would be payable as
post-petition in connection with any bankruptcy or similar proceeding, whether
or not permitted as a claim thereunder), any fees due the Bank under the Loan
Documents, any expenses incurred by the Bank under the Loan Documents and any
and all other liabilities and obligations of the Debtor to the Bank, including
any reimbursement obligations of the Debtor to the Bank in respect of Letters of
Credit and surety bonds, all Hedging Obligations of the Debtor which are owed to
the Bank or any Affiliate of the Bank, and all Bank Product Obligations of the
Debtor, all in each case howsoever created, arising or evidenced, whether direct
or indirect, absolute or contingent, now or hereafter existing, or due or to
become due, together with any and all renewals or extensions thereof.
 
 
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“Obligor” shall mean the Debtor, any Subsidiary of the Debtor, any guarantor,
accommodation endorser, third party pledgor, or any other party liable with
respect to the Obligations.
 
“Organizational Identification Number” means, with respect to the Debtor, the
organizational identification number assigned to the Debtor by the applicable
governmental unit or agency of the jurisdiction of organization of the Debtor.
 
“Permitted Liens” shall mean (a) Liens for Taxes, assessments or other
governmental charges not at the time delinquent or thereafter payable without
penalty or being contested in good faith by appropriate proceedings and, in each
case, for which it maintains adequate reserves in accordance with GAAP; (b)
Liens arising in connection with Capitalized Lease Obligations (and attaching
only to the property being leased); (c) Liens in respect of property or assets
imposed by law, which were incurred in the ordinary course of business and do
not secure indebtedness for borrowed money, such as carriers’, warehousemen’s,
materialmen’s and mechanics’ liens and other similar Liens arising in the
ordinary course of business; (d) Liens placed upon equipment or machinery
acquired after the date hereof and used in the ordinary course of business of
and placed at the time of the acquisition thereof by the acquirer or within
ninety (90) days thereafter to secure indebtedness incurred to pay all or a
portion of the purchase price thereof or to secure indebtedness incurred solely
for the purpose of financing the acquisition of any such equipment or machinery
or extensions, renewals or replacements of any of the foregoing for the same or
a lesser amount; (e) easements, rights-of-way, restrictions, encroachments and
other similar charges or encumbrances, and minor title deficiencies, in each
case not materially interfering with the conduct of the business of the Debtor
and not in violation of any terms of the Mortgage; (f) Liens arising from
precautionary UCC financing statement filings regarding operating leases entered
into in the ordinary course of business; (g) Liens arising out of the existence
of judgments or awards in respect of which the Debtor or any of its Subsidiaries
shall in good faith be prosecuting an appeal or proceedings for review and in
respect of which there shall have been secured a subsisting stay of execution
pending such appeal or proceedings and which Lien does not otherwise create an
Event of Default under the Loan Documents; (h) statutory and common law
landlords’ liens under leases to which the Debtor or any of its Subsidiaries is
a party, provided, however, such landlord agrees to subordinate such lien(s) to
the Bank; (i) Liens (other than Liens imposed under ERISA) incurred in the
ordinary course of business in connection with workers compensation claims,
unemployment insurance and social security benefits; (j) Liens (x) incurred in
the ordinary course of business in connection with the purchase or shipping of
goods or assets (or the related assets and proceeds thereof), which Liens are in
favor of the seller or shipper of such goods or assets and only attach to such
goods or assets, and (y) in favor of customs and revenue authorities arising as
a matter of law to secure payment of customs duties in connection with the
importation of goods; and (k) Liens granted to the Bank hereunder and under the
Loan Documents.
 
“Person” shall mean any natural person, partnership, limited liability company,
corporation, trust, joint venture, joint stock company, association,
unincorporated organization, government or agency or political subdivision
thereof, or other entity, whether acting in an individual, fiduciary or other
capacity.
 
 
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“Subsidiary” and “Subsidiaries” shall mean, respectively, with respect to any
Person, each and all such corporations, partnerships, limited partnerships,
limited liability companies, limited liability partnerships, joint ventures or
other entities of which or in which such Person owns, directly or indirectly,
such number of outstanding Capital Securities having more than fifty percent
(50.00%) of the ordinary voting power for the election of directors or other
managers of such corporation, partnership, limited liability company or other
entity.  Unless the context otherwise requires, each reference to Subsidiaries
herein shall be a reference to Subsidiaries of the Debtor.
 
“Taxes” shall mean any and all present and future taxes, duties, levies,
imposts, deductions, assessments, charges or withholdings, and any and all
liabilities (including interest and penalties and other additions to taxes) with
respect to the foregoing.
 
“UCC” shall mean the Uniform Commercial Code in effect in the state of Florida
from time to time.
 
1.2           Other Terms Defined in UCC.  All other capitalized words and
phrases used herein and not otherwise specifically defined herein shall have the
respective meanings assigned to such terms in the UCC, to the extent the same
are used or defined therein.
 
1.3           Other Interpretive Provisions.
 
(a)           The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.  Whenever the context so
requires, the neuter gender includes the masculine and feminine, the single
number includes the plural, and vice versa, and in particular the word “Debtor”
shall be so construed.
 
(b)           Section and Schedule references are to this Security Agreement
unless otherwise specified.  The words “hereof”, “herein” and “hereunder” and
words of similar import when used in this Security Agreement shall refer to this
Security Agreement as a whole and not to any particular provision of this
Security Agreement.
 
(c)           The term “including” is not limiting, and means “including,
without limitation”.
 
(d)           In the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and including”; the words “to”
and “until” each mean “to but excluding”, and the word “through” means “to and
including”.
 
(e)           Unless otherwise expressly provided herein, (i) references to
agreements (including this Security Agreement and the other Loan Documents) and
other contractual instruments shall be deemed to include all subsequent
amendments, restatements, supplements and other modifications thereto, but only
to the extent such amendments, restatements, supplements and other modifications
are not prohibited by the terms of any Loan Document, and (ii) references to any
statute or regulation shall be construed as including all statutory and
regulatory provisions amending, replacing, supplementing or interpreting such
statute or regulation.
 
(f)           To the extent any of the provisions of the other Loan Documents
are inconsistent with the terms of this Security Agreement, the provisions of
this Security Agreement shall govern.
 
 
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(g)           This Security Agreement and the other Loan Documents may use
several different limitations, tests or measurements to regulate the same or
similar matters.  All such limitations, tests and measurements are cumulative
and each shall be performed in accordance with its terms.
 
Section 2                      SECURITY FOR THE OBLIGATIONS.
 
2.1           Security for Obligations.  As security for the payment and
performance of the Obligations, the Debtor does hereby pledge, assign, transfer,
deliver and grant to the Bank, for its own benefit, a continuing and
unconditional first priority security interest in and to any and all property of
the Debtor, of any kind or description, tangible or intangible, wheresoever
located and whether now existing or hereafter arising or acquired, including the
following (all of which property, along with the products and proceeds
therefrom, are individually and collectively referred to as the “Collateral”):
 
(a)           all property of, or for the account of, the Debtor now or
hereafter coming into the possession, control or custody of, or in transit to,
the Bank or any agent or bailee for the Bank or any parent or Affiliate of the
Bank or any participant with the Bank in the Obligations (whether for
safekeeping, deposit, collection, custody, pledge, transmission or otherwise),
including all earnings, dividends, interest, or other rights in connection
therewith and the products and proceeds therefrom, including the proceeds of
insurance thereon; and
 
(b)           the additional property of the Debtor, whether now existing or
hereafter arising or acquired, and wherever now or hereafter located, together
with all additions and accessions thereto, substitutions, betterments and
replacements therefor, products and Proceeds therefrom, and all of the Debtor's
books and records and recorded data relating thereto (regardless of the medium
of recording or storage), together with all of the Debtor'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, identified and set
forth as follows:
 
(i)       All Accounts and all Goods whose sale, lease or other disposition by
the Debtor has given rise to Accounts and have been returned to, or repossessed
or stopped in transit by, the Debtor, or rejected or refused by an Account
Debtor;
 
(ii)       All Inventory, including raw materials, work-in-process and finished
goods;
 
(iii)       All Goods (other than Inventory), including embedded software,
Equipment, vehicles, furniture and Fixtures;
 
(iv)       All Software and computer programs;
 
(v)       All Securities, Investment Property, Financial Assets and Deposit
Accounts;
 
(vi)      All Chattel Paper, Electronic Chattel Paper, Instruments, Documents,
Letter of Credit Rights, all proceeds of letters of credit,
Health-Care-Insurance Receivables, Supporting Obligations, notes secured by real
estate, Commercial Tort Claims and General Intangibles, including Payment
Intangibles; and
 
 
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(vii)     All Proceeds (whether Cash Proceeds or Noncash Proceeds) of the
foregoing property, including all insurance policies and proceeds of insurance
payable by reason of loss or damage to the foregoing property, including
unearned premiums, and of eminent domain or condemnation awards.
 
2.2           Possession and Transfer of Collateral.  Except as otherwise set
forth herein, the Debtor shall be entitled to possession or use of the
Collateral (other than Instruments or Documents (including Tangible Chattel
Paper and Investment Property consisting of certificated securities) and other
Collateral required to be delivered to the Bank pursuant to this Section 2. The
cancellation or surrender of any promissory note evidencing an Obligation, upon
payment or otherwise, shall not affect the right of the Bank to retain the
Collateral for any other of the Obligations.  The Debtor shall not sell, assign
(by operation of law or otherwise), license, lease or otherwise dispose of, or
grant any option with respect to any of the Collateral, except that the Debtor
may sell, replace or substitute any Collateral in the ordinary course of the
Debtor’s business.
 
2.3           Financing Statements.  The Debtor shall, at the Bank's request, at
any time and from time to time, execute and deliver to the Bank such financing
statements, amendments and other documents and do such acts as the Bank deems
necessary in order to establish and maintain valid, attached and perfected first
priority security interests in the Collateral in favor of the Bank, for its own
benefit, free and clear of all Liens and claims and rights of third parties
whatsoever, except Permitted Liens.  The Debtor hereby irrevocably authorizes
the Bank at any time, and from time to time, to file in any jurisdiction any
initial financing statements and amendments thereto without the signature of the
Debtor that (a) indicate the Collateral (i) is comprised of all assets of the
Debtor or words of similar effect, regardless of whether any particular asset
comprising a part of the Collateral falls within the scope of Article 9 of the
Uniform Commercial Code of the jurisdiction wherein such financing statement or
amendment is filed, or (ii) as being of an equal or lesser scope or within
greater detail as the grant of the security interest set forth herein, and (b)
contain any other information required by Section 5 of Article 9 of the Uniform
Commercial Code of the jurisdiction wherein such financing statement or
amendment is filed regarding the sufficiency or filing office acceptance of any
financing statement or amendment, including (i) whether the Debtor is an
organization, the type of organization and any Organizational Identification
Number issued to the Debtor, and (ii) in the case of a financing statement filed
as a fixture filing or indicating Collateral as as-extracted collateral or
timber to be cut, a sufficient description of the real property to which the
Collateral relates. The Debtor hereby agrees that a photogenic or other
reproduction of this Security Agreement is sufficient for filing as a financing
statement and the Debtor authorizes the Bank to file this Security Agreement as
a financing statement in any jurisdiction. The Debtor agrees to furnish any such
information reasonably requested by the Bank to the Bank promptly upon
request.  The Debtor further ratifies and affirms its authorization for any
financing statements and/or amendments thereto, executed and filed by the Bank
in any jurisdiction prior to the date of this Security Agreement.  In addition,
the Debtor shall make appropriate entries on its books and records disclosing
the security interests of the Bank, for its own benefit, in the Collateral.
 
 
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2.4           Preservation of the Collateral.  The Bank may, but is not
required, to take such actions from time to time as the Bank deems appropriate
to maintain or protect the Collateral. The Bank shall have exercised reasonable
care in the custody and preservation of the Collateral if the Bank takes such
action as the Debtor shall reasonably request in writing which is not
inconsistent with the Bank's status as a secured party, but the failure of the
Bank to comply with any such request shall not be deemed a failure to exercise
reasonable care; provided, however, the Bank's responsibility for the
safekeeping of the Collateral shall (i) be deemed reasonable if such Collateral
is accorded treatment substantially equal to that which the Bank accords its own
property, and (ii) not extend to matters beyond the control of the Bank,
including acts of God, war, insurrection, riot or governmental actions.  In
addition, any failure of the Bank to preserve or protect any rights with respect
to the Collateral against prior or third parties, or to do any act with respect
to preservation of the Collateral, not so requested by the Debtor, shall not be
deemed a failure to exercise reasonable care in the custody or preservation of
the Collateral.  The Debtor shall have the sole responsibility for taking such
action as may be necessary, from time to time, to preserve all rights of the
Debtor and the Bank in the Collateral against prior or third parties.  Without
limiting the generality of the foregoing, where Collateral consists in whole or
in part of securities, the Debtor represents to, and covenants with, the Bank
that the Debtor has made arrangements for keeping informed of changes or
potential changes affecting the securities (including rights to convert or
subscribe, payment of dividends, reorganization or other exchanges, tender
offers and voting rights), and the Debtor agrees that the Bank shall have no
responsibility or liability for informing the Debtor of any such or other
changes or potential changes or for taking any action or omitting to take any
action with respect thereto.
 
2.5           Other Actions as to any and all Collateral. The Debtor further
agrees to take any other action reasonably requested by the Bank to ensure the
attachment, perfection and first priority of, and the ability of the Bank to
enforce, the security interest of the Bank, for its own benefit, in any and all
of the Collateral including (a) causing the Bank’s name to be noted as secured
party on any certificate of title for a titled good if such notation is a
condition to attachment, perfection or priority of, or ability of the bank to
enforce, the security interest of the Bank, for its own benefit, in such
Collateral, (b) complying with any provision of any statute, regulation or
treaty of the United States as to any Collateral if compliance with such
provision is a condition to attachment, perfection or priority of, or ability of
the Bank to enforce, the security interest of the Bank, for its own benefit, in
such Collateral, (c) obtaining governmental and other third party consents and
approvals, including any consent of any licensor, lessor or other Person
obligated on Collateral, (d) obtaining waivers from mortgagees and landlords in
form and substance satisfactory to the Bank, and (e) taking all actions required
by the UCC in effect from time to time or by other law, as applicable in any
relevant UCC jurisdiction, or by other law as applicable in any foreign
jurisdiction.  The Debtor further agrees to indemnify and hold the Bank harmless
against claims of any Persons not a party to this Security Agreement concerning
disputes arising over the Collateral.
 
2.6           Collateral in the Possession of a Warehouseman or Bailee.  If any
of the Collateral at any time is in the possession of a warehouseman or bailee,
the Debtor shall promptly notify the Bank thereof, and shall promptly obtain a
Collateral Access Agreement.
 
2.7           Letter-of-Credit Rights.  If the Debtor at any time is a
beneficiary under a letter of credit now or hereafter issued in favor of the
Debtor, the Debtor shall promptly notify the Bank thereof and, at the request
and option of the Bank, the Debtor shall, pursuant to an agreement in form and
substance satisfactory to the Bank, either (i) arrange for the issuer and any
confirmer of such letter of credit to consent to an assignment to the Bank, for
its own benefit, of the proceeds of any drawing under the letter of credit, or
(ii) arrange for the Bank, for its own benefit, to become the transferee
beneficiary of the letter of credit, with the Bank agreeing, in each case, that
the proceeds of any drawing under the letter to credit are to be applied as
provided in this Security Agreement.
 
2.8           Commercial Tort Claims.  If the Debtor shall at any time hold or
acquire a Commercial Tort Claim, the Debtor shall immediately notify the Bank in
writing signed by the Debtor of the details thereof and grant to the Bank, for
its own benefit, in such writing a security interest therein and in the proceeds
thereof, all upon the terms of this Security Agreement, in each case in form and
substance satisfactory to the Bank, and shall execute any amendments hereto
deemed reasonably necessary by the Bank to perfect the security interest of the
Bank, for its own benefit, in such Commercial Tort Claim.
 
 
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2.9           Electronic Chattel Paper and Transferable Records.  If the Debtor
at any time holds or acquires an interest in any electronic chattel paper or any
“transferable record”, as that term is defined in Section 201 of the federal
Electronic Signatures in Global and National Commerce Act, or in Section 16 of
the Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction, the Debtor shall promptly notify the Bank thereof and, at the
request of the Bank, shall take such action as the Bank may reasonably request
to vest in the Bank control under Section 9-105 of the UCC of such electronic
chattel paper or control under Section 201 of the federal Electronic Signatures
in Global and National Commerce Act or, as the case may be, §16 of the Uniform
Electronic Transactions Act, as so in effect in such jurisdiction, of such
transferable record. The Bank agrees with the Debtor that the Bank will arrange,
pursuant to procedures satisfactory to the Bank and so long as such procedures
will not result in the Bank's loss of control, for the Debtor to make
alterations to the electronic chattel paper or transferable record permitted
under Section 9-105 of the UCC or, as the case may be, Section 201 of the
federal Electronic Signatures in Global and National Commerce Act or Section 16
of the Uniform Electronic Transactions Act for a party in control to make
without loss of control.
 
Section 3                      REPRESENTATIONS AND WARRANTIES.
 
The Debtor makes the following representations and warranties to the Bank:
 
3.1           Debtor Organization and Name.  The Debtor is a corporation duly
organized, existing and in good standing under the laws of the State of Florida,
with full and adequate power to carry on and conduct its business as presently
conducted and each of its Subsidiaries is validly existing and in good standing
under the laws of the jurisdiction of its organization.  The Debtor and each of
its Subsidiaries are duly licensed or qualified in all foreign jurisdictions
wherein the nature of its activities requires such qualification or licensing,
except where such failure to be qualified or licensed would not reasonably be
expected to have a Material Adverse Effect. The Organizational Identification
Number of the Debtor is 59-2536113.  The exact legal name of the Debtor is as
set forth in the first paragraph of this Security Agreement, and the Debtor and
its Subsidiaries currently do not conduct, nor have they, during the last five
(5) years, conducted business under any other name or trade name.
 
3.2           Authorization.  The Debtor has full right, power and authority to
enter into this Security Agreement and to perform all of its duties and
obligations under this Security Agreement.  The execution and delivery of this
Security Agreement and the other Loan Documents to which the Debtor is a party
will not, nor will the observance or performance of any of the matters and
things herein or therein set forth, violate or contravene any provision of law
or of the articles/certificate of incorporation or bylaws of the Debtor.  All
necessary and appropriate action has been taken on the part of the Debtor to
authorize the execution and delivery of this Security Agreement.
 
3.3           Validity and Binding Nature.  This Security Agreement is the
legal, valid and binding obligation of the Debtor, enforceable against the
Debtor in accordance with its terms, subject to bankruptcy, insolvency and
similar laws affecting the enforceability of creditors' rights generally and to
general principles of equity.
 
3.4           Consent; Absence of Breach.  The execution, delivery and
performance of this Security Agreement and any other documents or instruments to
be executed and delivered by the Debtor in connection herewith, do not and will
not (a) require any consent, approval, authorization, or filings with, notice to
or other act by or in respect of, any governmental authority or any other Person
(other than any consent or approval which has been obtained and is in full force
and effect), except for any consents, approvals, authorizations, filings, notice
or other acts the failure of which to obtain or complete (in the aggregate)
would not reasonably be expected to have a Material Adverse Effect; (b) conflict
with (i) any provision of law or any applicable regulation, order, writ,
injunction or decree of any court or governmental authority, (ii) the articles
of incorporation or bylaws of the Debtor or any of its Subsidiaries, or (iii)
any material agreement, indenture, instrument or other document, or any
judgment, order or decree, which is binding upon the Debtor or any of its
Subsidiaries or any of its /their respective properties or assets, except for
such conflicts (in the aggregate) which would not reasonably be expected to have
a Material Adverse Effect; or (c) require, or result in, the creation or
imposition of any Lien on any asset of the Debtor or any of its Subsidiaries,
other than Liens in favor of the Bank created pursuant to this Security
Agreement.
 
 
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3.5           Ownership of Collateral; Liens.  The Debtor is the sole owner or
has other rights in all of the Collateral, free and clear of all Liens, charges
and claims (including infringement claims with respect to patents, trademarks,
service marks, copyrights and the like), other than Permitted Liens.
 
3.6           Adverse Circumstances.  There is no Event of Default, and no event
has occurred and is continuing which with notice, or the passage of time, or
either, would reasonably be expected to constitute an Event of Default.  Since
December 31, 2010, no event or circumstance has occurred that has had a Material
Adverse Effect.
 
3.7           Security Interest.  This Security Agreement creates a valid
security interest in favor of the Bank in the Collateral and, when properly
perfected by filing in the appropriate jurisdictions, or by possession or
Control of such Collateral by the Bank or delivery of such Collateral to the
Bank, shall constitute a valid, perfected, first-priority security interest in
such Collateral to the extent a security interest in such Collateral may be
perfected under Article 9 of the UCC.
 
3.8           Place of Business.  The principal place of business and books and
records of the Debtor is set forth in the preamble to this Security Agreement,
and the location of all Collateral, if other than at such principal place of
business, is as set forth on the Debtor’s Certificate provided in connection
herewith, and the Debtor shall promptly notify the Bank of any change in such
locations.  The Debtor will not remove or permit the Collateral to be removed
from such locations without the prior written consent of the Bank, except for
Inventory sold in the usual and ordinary course of the Debtor's business.
 
3.9           Complete Information.  All factual information (taken as a whole)
furnished by or on behalf of the Debtor in writing to the Bank for purposes of
or in connection with this Security Agreement and the other Loan Documents is,
and all other such factual information (taken as a whole) hereafter furnished by
or on behalf the Debtor in writing to the Bank will be, true, correct and
complete in all material respects on the date as of which such information is
dated or certified, it being understood and agreed that such factual information
shall not include any projections, and none of such information (taken as a
whole) is or will be incomplete by omitting to state any material fact necessary
to make such information not misleading in light of the circumstances under
which made on the date as of which such information is dated or certified (it
being recognized by the Bank that any projections and forecasts provided by the
Debtor are based on good faith estimates and assumptions believed by the Debtor
to be reasonable as of the date of the applicable projections or assumptions and
that actual results during the period or periods covered by any such projections
and forecasts may differ from projected or forecasted results).
 
Section 4                      AFFIRMATIVE COVENANTS.
 
4.1           Debtor Existence.  The Debtor shall at all times preserve and
maintain its (a) its existence and good standing in the jurisdiction of its
organization, and (b) its qualification to do business and good standing in each
jurisdiction where the nature of its business makes such qualification necessary
(other than such jurisdictions in which the failure to be qualified or in good
standing could not reasonably be expected to have a Material Adverse Effect),
and shall at all times continue as a going concern in the business which the
Debtor is presently conducting.  If the Debtor does not have an Organizational
Identification Number and later obtains one, the Debtor shall promptly notify
the Bank of such Organizational Identification Number.
 
 
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4.2           Compliance With Laws.  The Debtor shall comply, and cause each
Subsidiary to comply, in all respects, including the conduct of its business and
operations and the use of the Collateral, with all applicable laws, rules,
regulations, decrees, orders, judgments, licenses and permits, except where
failure to comply could not reasonably be expected to have a Material Adverse
Effect.
 
4.3           Payment of Taxes and Liabilities. The Debtor shall pay and
discharge when due, and before subject to penalty or further charge, and
otherwise satisfy before maturity or delinquency, all obligations, debts, taxes,
and liabilities of whatever nature or amount, except (i) those which the Debtor
in good faith disputes or (ii) for such non-payment and performance (in the
aggregate) as would not reasonably be expected to have a Material Adverse
Effect.
 
4.4           Maintain Property.  The Debtor will keep all property necessary to
the business of the Debtor in good working order and condition in accordance
with the past practices of the Debtor, ordinary wear and tear excepted and
subject to the occurrence of casualty events.
 
4.5           Maintain Insurance.  The Debtor shall maintain and keep in full
force and effect during the term of the this Security Agreement adequate
insurance coverage, with all premiums paid thereon and without notice or demand,
with respect to its properties and business against loss or damage of the kinds
and in the amounts customarily insured against by companies of established
reputation engaged in the same or similar businesses in accordance with the
terms of the Loan Agreement, dated as of even date herewith, by and between the
Debtor and the Bank.  Not less than thirty (30) days prior to the expiration
date of any insurance policy, if requested by the Bank, the Debtor shall deliver
to the Bank the original (or certified copy), or the original certificate, as
applicable, of each renewal policy, together with receipts or other evidence
that the premiums therefor have been paid.
 
           In the event the Debtor either fails to provide the Bank with
evidence of the insurance coverage required by this Section or at any time
hereafter shall fail to obtain or maintain any of the policies of insurance
required above, or to pay any premium in whole or in part relating thereto, then
the Bank, without waiving or releasing any obligation or default by the Debtor
hereunder, may at any time (but shall be under no obligation to so act), obtain
and maintain such policies of insurance and pay such premiums and take any other
action with respect thereto, which the Bank deems advisable.  This insurance
coverage (a) may, but need not, protect the Debtor’s interests in such property,
including the Collateral, and (b) may not pay any claim made by, or against, the
Debtor in connection with such property, including the Collateral.  The Debtor
may later cancel any such insurance purchased by the Bank, but only after
providing the Bank with evidence that the Debtor has obtained the insurance
coverage required by this Section.  If the Bank purchases insurance for the
Collateral, the Debtor will be responsible for the costs of that insurance,
including interest and any other charges that may be imposed with the placement
of the insurance, until the effective date of the cancellation or expiration of
the insurance.  The costs of the insurance may be added to the principal amount
of the Loans owing hereunder.  The costs of the insurance may be more than the
cost of the insurance the Debtor may be able to obtain on its own.
 
 
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4.6           Field Audits The Debtor shall allow the Bank, or its agents, after
reasonable prior notice and during reasonable normal business hours, to access
the Debtor’s books, records and such other documents, and allow the Bank to
inspect, audit and examine the same and to make extracts therefrom and to make
copies thereof. The Bank shall be entitled to a field exam, audit and inventory
and collateral appraisal on an annual basis at the Debtor’s sole expense
throughout the term of the Loan or at any time during the existence of an Event
of Default. The Bank shall be entitled to conduct, at the Bank’s own expense,
additional field exams, audits and inventory appraisals as the Bank deems
necessary.
 
4.7           Collateral Records.  The Debtor shall keep full and accurate books
and records relating to the Collateral and shall mark such books and records to
indicate the Bank's Lien in the Collateral including placing a legend, in form
and content acceptable to the Bank, on all Chattel Paper created by the Debtor
indicating that the Bank has a Lien in such Chattel Paper.
 
Section 5                      REMEDIES.
 
Except as otherwise set forth in Section 5.6, upon the occurrence of an Event of
Default (as defined in the Loan Agreement) beyond the expiration of any
applicable grace or cure periods (if any), the Bank shall have all rights,
powers and remedies set forth in this Security Agreement or the other Loan
Documents or in any other written agreement or instrument relating to any of the
Obligations or any security therefor, as a secured party under the UCC or as
otherwise provided at law or in equity. Without limiting the generality of the
foregoing, the Bank may, at its option upon the occurrence and continuance of an
Event of Default, declare its commitments to the Debtor to be terminated and all
Obligations to be immediately due and payable, or, if provided in the Loan
Documents, all commitments of the Bank to the Debtor shall immediately terminate
and all Obligations shall be automatically due and payable, all without demand,
notice or further action of any kind required on the part of the Bank. The
Debtor hereby waives any and all presentment, demand, notice of dishonor,
protest, and all other notices and demands in connection with the enforcement of
Bank's rights under the Loan Documents, and hereby consents to, and waives
notice of release, with or without consideration, of any Collateral,
notwithstanding anything contained herein or in the Loan Documents to the
contrary.  In addition to the foregoing:
 
5.1           Possession and Assembly of Collateral.  The Bank may, without
notice, demand or legal process of any kind, take possession of any or all of
the Collateral (in addition to Collateral of which the Bank already has
possession), wherever it may be found, and for that purpose may pursue the same
wherever it may be found, and may at any time enter into any of the Debtor's
premises where any of the Collateral may be or is supposed to be, and search
for, take possession of, remove, keep and store any of the Collateral until the
same shall be sold or otherwise disposed of and the Bank shall have the right to
store and conduct a sale of the same in any of the Debtor's premises without
cost to the Bank.  At the Bank's request, the Debtor will, at the Debtor's sole
expense, assemble the Collateral and make it available to the Bank at a place or
places to be designated by the Bank which is reasonably convenient to the Bank
and the Debtor.
 
5.2           Sale of Collateral.  The Bank may sell any or all of the
Collateral at public or private sale, upon such terms and conditions as the Bank
may deem proper, and the Bank may purchase any or all of the Collateral at any
such sale.  The Debtor acknowledges that the Bank may be unable to effect a
public sale of all or any portion of the Collateral because of certain legal
and/or practical restrictions and provisions which may be applicable to the
Collateral and, therefore, may be compelled to resort to one or more private
sales to a restricted group of offerees and purchasers.  The Debtor consents to
any such private sale so made even though at places and upon terms less
favorable than if the Collateral was sold at public sale. The Bank shall have no
obligation to clean-up or otherwise prepare the Collateral for sale.  The Bank
may apply the net proceeds, after deducting all costs, expenses, attorneys' and
paralegals' fees incurred or paid at any time in the collection, protection and
sale of the Collateral and the Obligations, to the payment of the Obligations,
returning the excess proceeds, if any, to the Debtor.  The Debtor shall remain
liable for any amount remaining unpaid after such application, with interest at
the Default Rate.  Any notification of intended disposition of the Collateral
required by law shall be conclusively deemed reasonably and properly given if
given by the Bank at least ten (10) calendar days before the date of such
disposition.  The Debtor hereby confirms, approves and ratifies all acts and
deeds of the Bank relating to the foregoing, and each part thereof, and
expressly waives any and all claims of any nature, kind or description which it
has or may hereafter have against the Bank or its representatives, by reason of
taking, selling or collecting any portion of the Collateral.  The Debtor
consents to releases of the Collateral at any time (including prior to default)
and to sales of the Collateral in groups, parcels or portions, or as an
entirety, as the Bank shall deem appropriate.  The Debtor expressly absolves the
Bank from any loss or decline in market value of any Collateral by reason of
delay in the enforcement or assertion or nonenforcement of any rights or
remedies under this Security Agreement.
 
 
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5.3           Standards for Exercising Remedies. To the extent that applicable
law imposes duties on the Bank to exercise remedies in a commercially reasonable
manner, the Debtor acknowledges and agrees that it is not commercially
unreasonable for the Bank (a) to fail to incur expenses reasonably deemed
significant by the Bank to prepare Collateral for disposition or otherwise to
complete raw material or work-in-process into finished goods or other finished
products for disposition, (b) to fail to obtain third party consents for access
to Collateral to be disposed of, or to obtain or, if not required by other law,
to fail to obtain governmental or third party consents for the collection or
disposition of Collateral to be collected or disposed of, (c) to fail to
exercise collection remedies against Account Debtors or other Persons obligated
on Collateral or to remove liens or encumbrances on or any adverse claims
against Collateral, (d) to exercise collection remedies against Account Debtors
and other Persons obligated on Collateral directly or through the use of
collection agencies and other collection specialists, (e) to advertise
dispositions of Collateral through publications or media of general circulation,
whether or not the Collateral is of a specialized nature, (f) to contact other
Persons, whether or not in the same business as the Debtor, for expressions of
interest in acquiring all or any portion of the Collateral, (g) to hire one or
more professional auctioneers to assist in the disposition of Collateral,
whether or not the collateral is of a specialized nature, (h) to dispose of
Collateral by utilizing internet sites that provide for the auction of assets of
the types included in the Collateral or that have the reasonable capability of
doing so, or that match buyers and sellers of assets, (i) to dispose of assets
in wholesale rather than retail markets, (j) to disclaim disposition warranties,
including any warranties of title, (k) to purchase insurance or credit
enhancements to insure the Bank against risks of loss, collection or disposition
of Collateral or to provide to the Bank a guaranteed return from the collection
or disposition of Collateral, or (l) to the extent deemed appropriate by the
Bank, to obtain the services of other brokers, investment bankers, consultants
and other professionals to assist the Bank in the collection or disposition of
any of the Collateral.  The Debtor acknowledges that the purpose of this section
is to provide non-exhaustive indications of what actions or omissions by the
Bank would not be commercially unreasonable in the Bank's exercise of remedies
against the Collateral and that other actions or omissions by the Bank shall not
be deemed commercially unreasonable solely on account of not being indicated in
this section.  Without limitation upon the foregoing, nothing contained in this
section shall be construed to grant any rights to the Debtor or to impose any
duties on the Bank that would not have been granted or imposed by this Security
Agreement or by applicable law in the absence of this section.
 
5.4           UCC and Offset Rights.  The Bank may exercise, from time to time,
any and all rights and remedies available to it under the UCC or under any other
applicable law in addition to, and not in lieu of, any rights and remedies
expressly granted in this Security Agreement or in any other agreements between
the Debtor and the Bank, and may, without demand or notice of any kind,
appropriate and apply toward the payment of such of the Obligations, whether
matured or unmatured, including reasonable costs of collection and reasonable
attorneys' and paralegals' fees, and in such order of application as the Bank
may, from time to time, elect, any indebtedness of the Bank to the Debtor,
however created or arising, including balances, credits, deposits, accounts or
moneys of such Obligor in the possession, control or custody of, or in transit
to the Bank.  The Debtor hereby waives the benefit of any law that would
otherwise restrict or limit the Bank in the exercise of its right, which is
hereby acknowledged, to appropriate at any time hereafter any such indebtedness
owing from the Bank to the Debtor.
 
 
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5.5           Additional Remedies.  The Bank shall have the right and power to:
 
(a)           instruct the Debtor, at its own expense, to notify any parties
obligated on any of the Collateral, including any Account Debtors, to make
payment directly to the Bank of any amounts due or to become due thereunder, or,
the Bank may directly notify such obligors of the security interest of the Bank,
and/or of the assignment to the Bank of the Collateral and direct such obligors
to make payment to the Bank of any amounts due or to become due with respect
thereto, and thereafter, collect any such amounts due on the Collateral directly
from such Persons obligated thereon;
 
(b)           enforce collection of any of the Collateral, including any
Accounts, by suit or otherwise, or make any compromise or settlement with
respect to any of the Collateral, or surrender, release or exchange all or any
part thereof, or compromise, extend or renew for any period (whether or not
longer than the original period) any indebtedness thereunder;
 
(c)           take possession or control of any proceeds and products of any of
the Collateral, including the proceeds of insurance thereon;
 
(d)           extend, renew or modify for one or more periods (whether or not
longer than the original period) the Obligations or any obligation of any nature
of any other obligor with respect to the Obligations;
 
(e)           grant releases, compromises or indulgences with respect to the
Obligations, any extension or renewal of any of the Obligations, any security
therefor, or to any other obligor with respect to the Obligations;
 
(f)           transfer the whole or any part of securities which may constitute
Collateral into the name of the Bank or the Bank's nominee without disclosing,
if the Bank so desires, that such securities so transferred are subject to the
security interest of the Bank, and any corporation, association, or any of the
managers or trustees of any trust issuing any of such securities, or any
transfer agent, shall not be bound to inquire, in the event that the Bank or
such nominee makes any further transfer of such securities, or any portion
thereof, as to whether the Bank or such nominee has the right to make such
further transfer, and shall not be liable for transferring the same;
 
(g)           vote the Collateral;
 
(h)           make an election with respect to the Collateral under Section 1111
of the Bankruptcy Code or take action under Section 364 or any other section of
the Bankruptcy Code; provided, however, that any such action of the Bank as set
forth herein shall not, in any manner whatsoever, impair or affect the liability
of the Debtor hereunder, nor prejudice, waive, nor be construed to impair,
affect, prejudice or waive the Bank's rights and remedies at law, in equity or
by statute, nor release, discharge, nor be construed to release or discharge,
the Debtor, any guarantor or other Person liable to the Bank for the
Obligations; and
 
 
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(i)           at any time, and from time to time, accept additions to, releases,
reductions, exchanges or substitution of the Collateral, without in any way
altering, impairing, diminishing or affecting the provisions of this Security
Agreement, the Loan Documents, or any of the other Obligations, or the Bank's
rights hereunder, under the Obligations.
 
The Debtor hereby ratifies and confirms whatever the Bank may do with respect to
the Collateral and agrees that the Bank shall not be liable for any error of
judgment or mistakes of fact or law with respect to actions taken in connection
with the Collateral.
 
5.6           Attorney-in-Fact.  The Debtor hereby irrevocably makes,
constitutes and appoints the Bank (and any officer of the Bank or any Person
designated by the Bank for that purpose) as the Debtor's true and lawful proxy
and attorney-in-fact (and agent-in-fact) in the Debtor's name, place and stead,
with full power of substitution, to (i) take such actions as are permitted in
this Security Agreement, (ii) execute such financing statements and other
documents and to do such other acts as the Bank may require to perfect and
preserve the Bank's security interest in, and to enforce such interests in the
Collateral, and (iii) carry out any remedy provided for in this Security
Agreement, including endorsing the Debtor's name to checks, drafts, instruments
and other items of payment, and proceeds of the Collateral, executing change of
address forms with the postmaster of the United States Post Office serving the
address of the Debtor, changing the address of the Debtor to that of the Bank,
opening all envelopes addressed to the Debtor and applying any payments
contained therein to the Obligations.  The Debtor hereby acknowledges that the
constitution and appointment of such proxy and attorney-in-fact are coupled with
an interest and are irrevocable.  The Debtor hereby ratifies and confirms all
that such attorney-in-fact may do or cause to be done by virtue of any provision
of this Security Agreement; provided that the rights of the Bank and any such
attorney-in-fact set forth in this Section 5.6 may only be enforced (and taken)
during the continuance of an Event of Default.
 
5.7           No Marshaling.  The Bank shall not be required to marshal any
present or future collateral security (including this Security Agreement and the
Collateral) for, or other assurances of payment of, the Obligations or any of
them or to resort to such collateral security or other assurances of payment in
any particular order.  To the extent that it lawfully may, the Debtor hereby
agrees that it will not invoke any law relating to the marshaling of collateral
which might cause delay in or impede the enforcement of the Bank's rights under
this Security Agreement or under any other instrument creating or evidencing any
of the Obligations or under which any of the Obligations is outstanding or by
which any of the Obligations is secured or payment thereof is otherwise assured,
and, to the extent that it lawfully may, the Debtor hereby irrevocably waives
the benefits of all such laws.
 
5.8           Application of Proceeds.  The Bank will within three (3) Business
Days after receipt of cash or solvent credits from collection of items of
payment, proceeds of Collateral or any other source, apply the whole or any part
thereof against the Obligations secured hereby. The Bank shall further have the
exclusive right to determine how, when and what application of such payments and
such credits shall be made on the Obligations, and such determination shall be
conclusive upon the Debtor.  Any proceeds of any disposition by the Bank of all
or any part of the Collateral may be first applied by the Bank to the payment of
expenses incurred by the Bank in connection with the Collateral, including
attorneys' fees and legal expenses as provided for in Section 7 hereof.
 
5.9           No Waiver.  No Event of Default shall be waived by the Bank except
in writing.  No failure or delay on the part of the Bank in exercising any
right, power or remedy hereunder shall operate as a waiver of the exercise of
the same or any other right at any other time; nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy
hereunder.  There shall be no obligation on the part of the Bank to exercise any
remedy available to the Bank in any order.  The remedies provided for herein are
cumulative and not exclusive of any remedies provided at law or in equity.  The
Debtor agrees that in the event that the Debtor fails to perform, observe or
discharge any of its Obligations or liabilities under this Security Agreement or
any other agreements with the Bank, no remedy of law will provide adequate
relief to the Bank, and further agrees that the Bank shall be entitled to
temporary and permanent injunctive relief in any such case without the necessity
of proving actual damages.
 
 
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Section 6                      MISCELLANEOUS.
 
6.1           Entire Agreement.  This Security Agreement and the other Loan
Documents (i) are valid, binding and enforceable against the Debtor and the Bank
in accordance with their respective provisions and no conditions exist as to
their legal effectiveness; (ii) constitute the entire agreement between the
parties with respect to the subject matter hereof and thereof; and (iii) are the
final expression of the intentions of the Debtor and the Bank.  No promises,
either expressed or implied, exist between the Debtor and the Bank, unless
contained herein or therein.  This Security Agreement, together with the other
Loan Documents, supersedes all negotiations, representations, warranties,
commitments, term sheets, discussions, negotiations, offers or contracts (of any
kind or nature, whether oral or written) prior to or contemporaneous with the
execution hereof with respect to any matter, directly or indirectly related to
the terms of this Security Agreement and the other Loan Documents.  This
Security Agreement and the other Loan Documents are the result of negotiations
among the Bank, the Debtor and the other parties thereto, and have been reviewed
(or have had the opportunity to be reviewed) by counsel to all such parties, and
are the products of all parties.  Accordingly, this Security Agreement and the
other Loan Documents shall not be construed more strictly against the Bank
merely because of the Bank's involvement in their preparation.
 
6.2           Amendments; Waivers.  No delay on the part of the Bank in the
exercise of any right, power or remedy shall operate as a waiver thereof, nor
shall any single or partial exercise by the Bank of any right, power or remedy
preclude other or further exercise thereof, or the exercise of any other right,
power or remedy.  No amendment, modification or waiver of, or consent with
respect to, any provision of this Security Agreement or the other Loan Documents
shall in any event be effective unless the same shall be in writing and
acknowledged by the Bank, and then any such amendment, modification, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
 
6.3           FORUM SELECTION AND CONSENT TO JURISDICTION.  ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS SECURITY AGREEMENT
OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE
COURTS OF MIAMI-DADE COUNTY, THE STATE OF FLORIDA OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHHERN DISTRICT OF FLORIDA; PROVIDED THAT NOTHING IN
THIS SECURITY AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE BANK FROM
BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION.  THE
DEBTOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF MIAMI-DADE COUNTY, STATE OF FLORIDA AND OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF FLORIDA FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE.  THE DEBTOR FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE
WITHIN OR WITHOUT THE STATE OF FLORIDA.  THE DEBTOR HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
 
 
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6.4           WAIVER OF JURY TRIAL.  THE BANK AND THE DEBTOR, AFTER CONSULTING
OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, EACH KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE IRREVOCABLY, ANY RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS SECURITY
AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT, ANY OF THE OTHER OBLIGATIONS, THE
COLLATERAL, OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR
WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR
ARISING FROM ANY LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE
FOREGOING, OR ANY COURSE OF CONDUCT OR COURSE OF DEALING IN WHICH THE BANK AND
THE DEBTOR ARE ADVERSE PARTIES, AND EACH AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.  THIS PROVISION
IS A MATERIAL INDUCEMENT FOR THE BANK GRANTING ANY FINANCIAL ACCOMMODATION TO
THE DEBTOR.
 
6.5           Assignability.  The Bank may at any time assign the Bank's rights
in this Security Agreement, the other Loan Documents, the Obligations, or any
part thereof and transfer the Bank's rights in any or all of the Collateral, and
the Bank thereafter shall be relieved from all liability with respect to such
Collateral. This Security Agreement shall be binding upon the Bank and the
Debtor and their respective legal representatives and successors.  All
references herein to the Debtor shall be deemed to include any successors.
 
6.6           Binding Effect.  This Security Agreement shall become effective
upon execution by the Debtor and the Bank.  If this Security Agreement is not
dated or contains any blanks when executed by the Debtor, the Bank is hereby
authorized, without notice to the Debtor, to date this Security Agreement as of
the date when it was executed by the Debtor, and to complete any such blanks
according to the terms upon which this Security Agreement is executed.
 
6.7           Governing Law.  This Security Agreement shall be delivered and
accepted in and shall be deemed to be a contract made under and governed by the
internal laws of the State of Florida (but giving effect to federal laws
applicable to national banks) applicable to contracts made and to be performed
entirely within such state, without regard to conflict of laws principles.
 
6.8           Enforceability.  Wherever possible, each provision of this
Security Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Security Agreement
shall be prohibited by, unenforceable or invalid under any jurisdiction, such
provision shall as to such jurisdiction, be severable and be ineffective to the
extent of such prohibition or invalidity, without invalidating the remaining
provisions of this Security Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.
 
6.9           Time of Essence.  Time is of the essence in making payments of all
amounts due the Bank under this Security Agreement and in the performance and
observance by the Debtor of each covenant, agreement, provision and term of this
Security Agreement.
 
6.10           Counterparts; Facsimile Signatures.  This Security Agreement may
be executed in any number of counterparts and by the different parties hereto on
separate counterparts and each such counterpart shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same Security Agreement.  Receipt of an executed signature page to this Security
Agreement by facsimile or other electronic transmission shall constitute
effective delivery thereof. Electronic records of executed Loan Documents
maintained by the Bank shall be deemed to be originals thereof.
 
 
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6.11           Notices.  Except as otherwise provided herein, the Debtor waives
all notices and demands in connection with the enforcement of the Bank's rights
hereunder.  All notices, requests, demands and other communications provided for
hereunder from the Debtor to the Bank and the Bank to the Debtor required or
permitted by any provision of this Agreement shall be in writing and sent by
registered or certified mail or nationally recognized overnight delivery service
and addressed as follows:
 
If to the Debtor:  
DIAMEDIX CORPORATION

 
2140 North Miami Avenue

 
Miami, Florida 33127

 
Attention:  Arthur R. Levine, Chief Financial Officer and Secretary

 
 
If to the Bank:
CITY NATIONAL BANK OF FLORIDA

 
25 West Flagler Street

 
Miami, Florida 33130

 
Attention:  Senior Commercial Loan Officer

 
WITH A COURTESY
STEARNS WEAVER MILLER WEISSLER

 
COPY TO:
ALHADEFF & SITTERSON, P.A.

 
150 West Flagler Street, Suite 2200

 
Miami, Florida 33130

 
Attention: David M. Seifer, Esq.

The courtesy copy referenced above shall not, under any circumstance, constitute
notice or service of process for purposes hereof.  In addition, the Bank’s
failure to provide such courtesy copy to the Debtor’s counsel shall not be
deemed to be a failure to provide proper notice to the Debtor.
 
Such addresses may be changed by such notice to the other party in accordance
with the terms hereof.  Notice given as hereinabove provided shall be deemed
given on the date of its deposit in the United States Mail and, unless sooner
actually received, shall be deemed received by the party to whom it is addressed
on the third (3rd) calendar day following the date on which said notice is
deposited in the mail, or if a courier system is used, on the date of delivery
of the notice. Notwithstanding the foregoing, no notice of change of address
shall be effective except upon actual receipt.
 
 
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6.12           Costs, Fees and Expenses.  The Debtor shall pay or reimburse the
Bank for all reasonable costs, fees and expenses incurred by the Bank or for
which the Bank becomes obligated in connection with the enforcement of this
Security Agreement, including reasonable attorneys' fees and time charges of
counsel to the Bank, which shall also include attorneys' fees and time charges
of attorneys who may be employees of the Bank or any Affiliate of the Bank, plus
costs and expenses of such attorneys or of the Bank; search fees, costs and
expenses; and all taxes payable in connection with this Security Agreement.  In
furtherance of the foregoing, the Debtor shall pay any and all stamp and other
taxes, UCC search fees, filing fees and other costs and expenses in connection
with the execution and delivery of this Security Agreement and the other Loan
Documents to be delivered hereunder, and agrees to save and hold the Bank
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such costs and expenses.  That
portion of the Obligations consisting of costs, expenses or advances to be
reimbursed by the Debtor to the Bank pursuant to this Security Agreement or the
other Loan Documents which are not paid on or prior to the date hereof shall be
payable by the Debtor to the Bank on demand.  If at any time or times hereafter
the Bank: (a) employs counsel for advice or other representation (i) with
respect to this Security Agreement or the other Loan Documents, (ii) to
represent the Bank in any litigation, contest, dispute, suit or proceeding or to
commence, defend, or intervene or to take any other action in or with respect to
any litigation, contest, dispute, suit, or proceeding (whether instituted by the
Bank, the Debtor, or any other Person) in any way or respect relating to this
Security Agreement, or (iii) to enforce any rights of the Bank against the
Debtor or any other Person under of this Security Agreement; (b) takes any
action to protect, collect, sell, liquidate, or otherwise dispose of any of the
Collateral; and/or (c) attempts to or enforces any of the Bank's rights or
remedies under this Security Agreement, and reasonable expenses incurred by the
Bank in any manner or way with respect to the foregoing, shall be part of the
Obligations, payable by the Debtor to the Bank on demand.
 
6.13           Termination.  Upon the full repayment of all Obligations and the
termination or expiration of the Bank’s obligation to make the Loan, this
Security Agreement shall terminate, and the Bank will promptly execute and
deliver to the Debtor a proper instrument or instruments (including UCC
termination statements on form UCC-3) acknowledging the satisfaction and
termination of this Security Agreement, and will duly assign, transfer and
deliver to the Debtor (without recourse and without any representation or
warranty) such of the Collateral as may be in the possession of the Bank and as
has not theretofore been sold or otherwise applied or released pursuant to this
Security Agreement.

 
 
[EXECUTIONS ON FOLLOWING PAGE]
 
 
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IN WITNESS WHEREOF, the Debtor and the Bank have executed this Security
Agreement as of the date first above written.
 
 

  DEBTOR:          
DIAMEDIX CORPORATION, a Florida corporation
         
 
By:
/s/ Arthur R. Levine       Arthur R. Levine, Chief Financial Officer
and Secretary                

 

 
BANK:
         
CITY NATIONAL BANK OF FLORIDA
         
 
By:
/s/ Angel M. Solorio       Angel M. Solorio, Vice President                

 
 
[CONTINUES ON THE FOLLOWING PAGE]
 
 
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STATE OF FLORIDA
)
   
)
 SS:
COUNTY OF MIAMI-DADE
)
 

The foregoing instrument was sworn to and subscribed before me this _____ day of
June, 2011, by Arthur R. Levine, as Chief Financial Officer and Secretary of
DIAMEDIX CORPORATION, a Florida corporation, on behalf of the corporation. He is
personally known to me or has produced a ______________________ as
identification, and took an oath.
 
 

 
_____________________________________
Print or Stamp Name: ___________________
Notary Public, State of Florida
Commission No.:_______________________
My Commission Expires: ________________

 
 

STATE OF FLORIDA
)
   
)
 SS:
COUNTY OF MIAMI-DADE
)
 

The foregoing instrument was acknowledged before me this __ day of June, 2011,
by Angel M. Solorio, as Vice President of CITY NATIONAL BANK OF FLORIDA, on
behalf of the bank. He is personally known to me or has
produced___________________________ as identification.
 
 

 
_____________________________________
Print or Stamp Name: ___________________
Notary Public, State of Florida
Commission No.:_______________________
My Commission Expires: ________________

 
 
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