b. Except for the Permitted Pari Passu Notes, Debtor will not, without the prior writtenconsent of the Secured Party, borrow from anyone on the security of the Collateral, or otherwisepermit any liens, encumbrances, security interests, or adverse claims against the Collateral, andwill not permit the Collateral to be levied upon under any legal process.c. Debtor authorizes the Secured Party to file financing statements, including amendments orcontinuations thereof, describing the Collateral, and from time to time at the request of theSecured Party, will execute such other documents, and will do such other acts and things, all asthe Secured Party may reasonably request, to establish and maintain a valid perfected securityinterest in the Collateral and to enable the Secured Party to enforce its rights and remedieshereunder with respect to the Collateral.3**. Representations and Warranties.**Debtor represents and warrants to the Secured Party asfollows:a. Debtor is a corporation duly organized, validly existing, and in good standing and activestatus under the laws of the state of Delaware;b. Debtor has all requisite power to own and operate its properties and to carry on itsbusiness as now being conducted, and has all necessary rights to conduct its business;c. Debtor has the power, authority, and legal right to execute and deliver this SecurityAgreement, and to perform its obligations hereunder, and has taken all action necessary toauthorize the execution, delivery, and performance of this Security Agreement and to authorize thetransactions contemplated hereby;d. The execution, delivery, and performance by Debtor of this Security Agreement will not (i)contravene, conflict with, result in the breach of, or constitute a violation of or default underthe organizational documents of Debtor, any applicable law, rule, regulation, judgment, order,writ, injunction, or decree of any court or governmental authority, or any agreement or instrumentto which Debtor is a party or by which Debtor or its property may be bound or affected, or (ii)result in the creation of any lien, charge, or encumbrance upon any property or assets of Debtorpursuant to any of the foregoing, except the liens created by this Security Agreement;e. This Security Agreement constitutes a legal, valid, and binding agreement enforceableagainst Debtor and the Collateral in accordance with its terms and, without limiting the foregoing,this Security Agreement grants the Secured Party a valid, perfected security interest in theCollateral; andf. Debtor is the owner of the Collateral free and clear of all liens, encumbrances, securityinterests, and adverse claims whatsoever, except for the security interestgranted to the Subordinated Creditor and in respect of the security interest granted in thisSecurity Agreement.
 
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4. **Default.**Each of the following shall, after receipt by Debtor of written notice from theSecured Party and after a cure period of five (5) business days with respect to Section 4a. below,and thirty (30) days with respect to Sections 4b. through 4d. below, constitute an event of defaultunder this Security Agreement (each, an “Event of Default”):a. The occurrence of a default under the Note, or a breach of the assurances set forth inSection 2 of this Security Agreement, or any other Liability is not paid when due (and suchnonpayment continues beyond the expiration of any applicable grace or cure period);b. Any representation or warranty made by any Debtor under this Security Agreement or anyreport, certificate, financial statement, or other information provided by Debtor to the SecuredParty in connection herewith is false or misleading in any material respect when made or deemedmade; andc. Debtor fails to fully and promptly perform when due any agreement or covenant under thisSecurity Agreement or any related document (and such failure continues beyond the expiration of anyapplicable grace or cure period).In the event that Debtor substantially cures such default within the applicable cure period, suchdefault shall not constitute an Event of Default.5. **Remedies upon the occurrence of an Event of a Default.**a. Upon the occurrence and continuance of an Event of Default under this Security Agreement,the Secured Party will have the right at any time and from time to time, without further notice ordemand to Debtor to exercise the rights and remedies upon default that are granted to a securedparty under the Uniform Commercial Code and/or that are otherwise available to the Secured Partyunder this Security Agreement, the Note, or otherwise available to secured creditors at law and/orin equity under applicable law, including without limitation:(i) Enforce Debtor’s rights against account debtors and notify any and all account debtors orother parties against which Debtor has a claim under the Collateral that such Collateral has beenassigned by Debtor and that the Secured Party has a security interest therein and, if desired bythe Secured Party, that all payments should be made to the Secured Party;(ii) Receive and endorse the name of Debtor upon any instruments of payment (includingpayments made under any policy of insurance) that may come into the possession of the SecuredParty;(iii) Sell, assign, demand, sue for, collect, compromise, or settle payment of all or any partof the Collateral in the name of Debtor or in its own name, or make any other disposition of theCollateral, or any part thereof, which disposition may be for cash, credit, or any combinationthereof, or make exchanges, substitutions, surrenders, or discharges of any of the Collateral;
 
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(iv) Purchase all or any part of the Collateral at public or, if permitted by law, privatesale, and in lieu of actual payment of such purchase price, to set off the amount of such priceagainst the Liabilities; and(v) Do all things that the Secured Party may reasonably deem necessary or advisable toaccomplish the purposes of this Security Agreement;granting to the Secured Party, as the attorney-in-fact of Debtor, full power of substitution andfull power to do any and all things necessary to be done in and about the premises as fully andeffectually as Debtor might or could do but for this appointment, and hereby ratifying all thatsaid attorney-in-fact shall lawfully do or cause to be done by virtue of this Security Agreement.This power of attorney is coupled with an interest and shall be irrevocable until the Liabilitieshave been paid in full.b. Upon the occurrence and continuance of an Event of Default:(i) the Secured Party may direct the disposition of the Collateral and any other collateralfor the Liabilities, in such order or manner as the Secured Party may in its sole discretiondetermine;(ii) the Secured Party shall have the right to enter and remain upon the premises of Debtor,without any obligation to pay rent to Debtor or others, or any other place or places where any ofthe Collateral is located or kept, and: (1) remove Collateral therefrom, in order to maintain,sell, collect, and liquidate the Collateral; or (2) use such premises, together with materials,supplies, books, and records of Debtor, to maintain possession of and the condition of theCollateral, and to prepare the Collateral for selling, liquidating, or collecting.(iii) the Secured Party may require Debtor, at Debtor’s expense, to assemble the Collateraland make it available to the Secured Party at a place to be designated by the Secured Party, whichis reasonable and convenient to all parties.c. The net proceeds realized by the Secured Party upon a sale or other disposition of theCollateral, or any part thereof, after deduction of the expenses of retaking, holding, preparingfor sale, selling or the like, and reasonable attorneys’ fees and other expenses incurred by theSecured Party, shall be applied to payment of (or held as a reserve against) the Liabilities,whether or not then due, and in such order of application as the Secured Party may from time totime elect.6. **Termination.** This Security Agreement and the security interest granted pursuant to thisSecurity Agreement shall terminate when all the Liabilities have been paid in full. Upon suchtermination, the Secured Party’s consent to the filing by Debtor of all documents necessary toterminate all effective financing statements in the Secured Party’s favor that are then on file orrecorded with respect to the Collateral described in this Security Agreement.7. **Right to Inspect.**If Debtor is in default under this Security Agreement, Debtor willpermit representatives of the Secured Party to have full access to all premises, properties, books,records, tax records, or documents of or pertaining to the Collateral in order to enable theSecured Party to have access to the Collateral and the premises, properties, books, records,tax records and documents related thereto.
 
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8. **Assignment.**Neither this Security Agreement nor any of the rights, interests, orobligations arising under this Security Agreement may be assigned by Debtor without the priorwritten consent of the Secured Party.9. **Binding Effect.**Subject to Section 8, this Security Agreement shall be binding upon andinure to the benefit of the Secured Party, its respective successors and assigns, and shall bebinding upon Debtor and its successors and assigns and shall bind all persons who become bound as aDebtor to this Security Agreement.10. **Severability.**Any provision of this Security Agreement which is prohibited orunenforceable in any jurisdiction shall, as to such jurisdiction only, be ineffective only to theextent of such prohibition or unenforceability without invalidating the remaining provisions ofthis Security Agreement or affecting the validity or enforceability of such provision in any otherjurisdiction. If any provision of this Security Agreement is so broad as to be unenforceable, theprovision shall be interpreted to be only as broad as is enforceable.11. **Titles.**The titles and headings preceding the text of the sections of this SecurityAgreement have been inserted solely for convenience of reference and do not constitute a part ofthis Security Agreement or affect its meaning, interpretation, or effect.12. **Waiver.**The failure of any party to insist in any one or more instances upon performanceof any terms or conditions of this Security Agreement shall not be construed as a waiver of futureperformance of any such term, covenant, or condition, and the obligations of either party withrespect to such term, covenant, or condition shall continue in full force and effect.13. **Entire Agreement.**This Security Agreement contains the final, complete, and exclusiveexpression of the understanding of Debtor and the Secured Party with respect to the transactionscontemplated in this Security Agreement, and supersedes any prior or other contemporaneousagreement or representation by or among the parties related to the subject matter of this SecurityAgreement.14. **Amendment.**This Security Agreement may not be amended, modified, or changed in anyrespect and no waiver of any requirement hereof will be effective except by an agreement in writingsigned by Debtor and the Secured Party.
 
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15. **Notices.**All notices, requests, demands, claims and other communications under thisSecurity Agreement will be in writing. Any notice, request, demand, claim or other communicationunder this Security Agreement shall be deemed duly given if it is sent: (a) by personal delivery,or (b) by commercial delivery or overnight courier service that requires a signature as evidence ofdelivery, and, in each case, addressed to the intended recipient as set forth below, or to anyother or additional persons and addresses as the Parties may from time to time designate in awriting delivered in a writing in accordance with this Section 15:If to the Secured Party:As set forth below the signature of such Secured Party on the signature pages hereofIf to Debtor:Steel Vault Corporation1690 South Congress Avenue, Suite 200Delray Beach, Florida 33445Attn: William J. Caragol16. **Governing Law/Venue.**The validity, construction, enforcement, and interpretation of thisSecurity Agreement are governed by the laws of the State of Florida and the federal laws of theUnited States of America, excluding the laws of those jurisdictions pertaining to resolution ofconflicts with laws of other jurisdictions. The Debtor and the Secured Party (a) consent to thepersonal jurisdiction of the state and federal courts having jurisdiction in Palm Beach County,Florida, (b) stipulate that the proper, exclusive, and convenient venue for any legal proceedingarising out of this Security Agreement is Palm Beach County, Florida, for state court proceedings,and the Southern District of Florida, for federal district court proceedings, and (c) waive anydefense, whether asserted by a motion or pleading, that Palm Beach County, Florida, or the SouthernDistrict of Florida, is an improper or inconvenient venue.17. **Relationship.**This Security Agreement does not create or evidence a partnership or jointventure between Debtor and the Secured Party.18. **Interpretation.**Neither this Security Agreement nor any uncertainty or ambiguity in thisSecurity Agreement shall be construed or resolved against any party, whether under any rule ofconstruction or otherwise. No party to this Security Agreement shall be considered the draftsman.The parties acknowledge and agree that this Security Agreement has been reviewed, negotiated, andaccepted by all the parties and their attorneys and shall be construed and interpreted according tothe ordinary meaning of the words used so as to fairly accomplish the purposes and intentions ofthe parties.
 
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19. **Time.**Time shall be of the essence with respect to all of the provisions of this SecurityAgreement.20. **Counterparts.**This Security Agreement may be executed (including by facsimiletransmission) in two or more counterparts, each of which shall be deemed to be an original, but allof which together shall constitute one and the same instrument.21. **Enforcement of Security Agreement.**The parties agree that irreparable damage will occurif any of the provisions of this Security Agreement are not performed in accordance with itsspecific terms or are otherwise breached. It is therefore agreed that the parties shall beentitled to an injunction or injunctions to prevent breaches of this Security Agreement and tospecifically enforce the terms and provisions of this Security Agreement in any court of the UnitedStates or any state having jurisdiction, in addition to any other remedy to which they areentitled.22. **Remedies Cumulative.**The rights and remedies provided in this Security Agreement arecumulative and not exclusive of any rights or remedies provided by law, and the warranties,representations, covenants, and other provisions of this Security Agreement shall be cumulative.[The next page is the signature page.]
 
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IN WITNESS WHEREOF, the undersigned have executed this Security Agreement as of the date andyear first above written.      STEEL VAULT CORPORATION