Exhibit
10.29


 


 


 


PROMISSORY
NOTE


 


	Principal

$2,000,000.00
	Loan
Date

08-02-2017
	Maturity

08-02-2018
	Loan
    No	Call
/ Coll

803
	Account	Officer

                                         ***
	Initials
	References
    in the boxes above are for Lender’s use only and do not limit the applicability of this document to any particular loan or
    item. 

    Any item above containing “***” has been omitted due to text length limitations.


  


	Borrower:  	Drone Aviation Holding Corp.

11651 Central Parkway, #118 

Jacksonville, FL 32224	 	Lender:  	CITY NATIONAL BANK OF
    FLORIDA

    Private Client Group

    25 W. Flagler Street

    MIAMI, FL 33130




  


 



 


	Principal
    Amount: $2,000,000.00	Date
    of Note: August 2, 2017



 


PROMISE
TO PAY. Drone Aviation Holding Corp. (“Borrower”) promises to pay to CITY NATIONAL BANK OF FLORIDA (“Lender”),
or order, in lawful money of the United States of America, the principal amount of Two Million & 00/100 Dollars ($2,000,000.00)
or so much as may be outstanding, together with interest on the unpaid outstanding principal balance of each advance. Interest
shall be calculated from the date of each advance until repayment of each advance.


 


PAYMENT.
Borrower will pay this loan in one payment of all outstanding principal plus all accrued unpaid interest on August 2, 2018. In
addition, Borrower will pay regular monthly payments of all accrued unpaid interest due as of each payment date, beginning September
2, 2017, with all subsequent interest payments to be due on the same day of each month after that. Unless otherwise agreed or
required by applicable law, payments will be applied first to any accrued unpaid interest; then to principal; then to any late
charges; and then to any unpaid collection costs. Borrower will pay Lender at Lender’s address shown above or at such other place
as Lender may designate in writing.


 


VARIABLE
INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an independent index
which is the Wall Street Journal Prime Rate (the “Index”). The Index is not necessarily the lowest rate charged by Lender
on its loans. If the Index becomes unavailable during the term of this loan, Lender may designate a substitute index after notifying
Borrower. Lender will tell Borrower the current Index rate upon Borrowers request. The interest rate change will not occur more
often than each day. Borrower understands that Lender may make loans based on other rates as well. Interest on the unpaid principal
balance of this Note will be calculated as described in the “INTEREST CALCULATION METHOD” paragraph using a rate of
0.250 percentage points over the Index. NOTICE: Under no circumstances will the effective rate of interest on this Note be more
than the maximum rate allowed by applicable law.


 


INTEREST
CALCULATION METHOD. Interest on this Note is computed on a 365/360 basis; that is, by applying the ratio of the interest rate
over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal
balance is outstanding. All interest payable under this Note is computed using this method. This calculation method results in
a higher effective interest rate than the numeric interest rate stated in this Note.


 


PREPAYMENT.
Borrower agrees that all loan fees and other prepaid finance charges are earned fully as of the date of the loan and will
not be subject to refund upon early payment (whether voluntary or as a result of default), except as otherwise required by law.
Except for the foregoing, Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments
will not, unless agreed to by Lender in writing, relieve Borrower of Borrower’s obligation to continue to make payments of accrued
unpaid interest. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked
“paid in full”, “without recourse”, or similar language. If Borrower sends such a payment, Lender may accept
it without losing any of Lender’s rights under this Note, and Borrower will remain obligated to pay any further amount owed to
Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates
that the payment constitutes “payment in full” of the amount owed or that is tendered with other conditions or limitations
or as full satisfaction of a disputed amount must be mailed or delivered to: CITY NATIONAL BANK OF FLORIDA, 25 W Flagler Street
Miami, FL 33130.


 


LATE
CHARGE. If a payment is 10 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled
payment.


  



     


    	 	PROMISSORY NOTE
 (Continued)
	Page  2



    




 



 


INTEREST
AFTER DEFAULT. Upon default, including failure to pay upon final maturity, Lender, at its option, may, if permitted under
applicable law, increase the variable interest rate on this Note to the extent that the increase does not cause the interest rate
to exceed the maximum rate permitted by applicable law.


  


DEFAULT.
Each of the following shall constitute an event of default (“Event of Default”) under this Note:


 


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


 


Other
Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this
Note or in any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained
in any other agreement between Lender and Borrower.


 


Default
in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase
or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower’s
property or Borrower’s ability to repay this Note or perform Borrower’s obligations under this Note or any of the related documents.


 


False
Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrowers behalf, or made
by Guarantor, or any other guarantor, endorser, surety, or accommodation party, under this Note or the related documents in connection
with the obtaining of the loan evidenced by this Note or any security document directly or indirectly securing repayment of this
Note is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading
at any time thereafter.


 


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


 


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


  


Execution;
Attachment. Any execution or attachment is levied against the Collateral, and such execution or attachment is not set aside,
discharged or stayed within thirty (30) days after the same is levied.


 


Change
in Zoning or Public Restriction. Any change in any zoning ordinance or regulation or any other public restriction is enacted,
adopted or implemented, that limits or defines the uses which may be made of the Collateral such that the present or intended
use of the Collateral, as specified in the related documents, would be in violation of such zoning ordinance or regulation or
public restriction, as changed.


 


Default
Under Other Lien Documents. A
default occurs under any other mortgage, deed of trust or security agreement covering all or any portion of the Collateral.


 


Judgment.
Unless adequately covered by insurance in the opinion of Lender, the entry of a final judgment for the payment of money involving
more than ten thousand dollars ($10,000.00) against Borrower and the failure by Borrower to discharge the same, or cause it to
be discharged, or bonded off to Lender’s satisfaction, within thirty (30) days from the date of the order, decree or process under
which or pursuant to which such judgment was entered.


 


Events
Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor, or any other guarantor, endorser, surety,
or accommodation party of any of the indebtedness or any Guarantor, or any other guarantor, endorser, surety, or accommodation
party dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness
evidenced by this Note.


  



     


    	 	PROMISSORY NOTE
 (Continued)
	Page  3



    




 



 


Change
In Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower.


 


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


 


Insecurity.
Lender in good faith believes itself insecure.


 


Cure
Provisions. If any default, other than a default in payment, is curable and if Borrower has not been given a notice of a breach
of the same provision of this Note within the preceding twelve (12) months, it may be cured if Borrower, after Lender sends written
notice to Borrower demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires
more than fifteen (15) days, immediately initiates steps which Lender deems in Lender’s sole discretion to be sufficient to cure
the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon
as reasonably practical.


 


LENDER’S
RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest
immediately due, and then Borrower will pay that amount.


 


ATTORNEYS’
FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay
Lender the amount of these costs and expenses, which includes, subject to any limits under applicable law, Lender’s reasonable
attorneys’ fees and Lender’s legal expenses whether or not there is a lawsuit, including reasonable attorneys’ fees and legal
expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. If
not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law.


 


JURY
WAIVER. Lender and Borrower hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either
Lender or Borrower against the other.


 


GOVERNING
LAW. This Note will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws
of the State of Florida without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State
of Florida.


 


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


 


COLLATERAL.
Borrower acknowledges this Note is secured by a first security interest in all of the accounts, inventory and equipment of
Drone Aviation Holding Corp., whether now owned or existing or hereafter acquired or arising, wheresoever located, together with
any and all proceeds and/or products thereof and Demand Deposit Account #1955078786 in the name of Borrower and held with Lender
with an approximate balance of $90,000.00.


 


LINE
OF CREDIT. This Note evidences a revolving line of credit. Advances under this Note may be requested only in writing by Borrower
or by an authorized person. All communications, instructions, or directions by telephone or otherwise to Lender are to be directed
to Lender’s office shown above. Borrower agrees to be liable for all sums either: (A) advanced in accordance with the instructions
of an authorized person or (B) credited to any of Borrower’s accounts with Lender. The unpaid principal balance owing on this
Note at any time may be evidenced by endorsements on this Note or by Lender’s internal records, including daily computer print-outs.
Lender will have no obligation to advance funds under this Note if: (A) Borrower or any guarantor is in default under the terms
of this Note or any agreement that Borrower or any guarantor has with Lender, including any agreement made in connection with
the signing of this Note; (B) Borrower or any guarantor ceases doing business or is insolvent; (C) any guarantor seeks, claims
or otherwise attempts to limit, modify or revoke such guarantor’s guarantee of this Note or any other loan with Lender; (D) Borrower
has applied funds provided pursuant to this Note for purposes other than those authorized by Lender; or (E) Lender in good
faith believes itself insecure.


 


FINANCIAL
STATEMENTS. Borrower agrees to provide Lender with such financial statements and other related information at such frequencies
and in such detail as Lender may reasonably request.


 


BORROWER’S
OWNERSHIP COVENANT. Borrower shall not sell or convey more than twenty-five percent (25%) of its stock or any of its assets,
except for assets sold in the normal and ordinary course of business, including any merger, consolidation, or reorganization,
and there shall be no change in the ownership or management of Borrower, with the exception of estate planning purposes, unless
consented to in writing by Lender, which may be given or withheld in the sole and absolute discretion of the Lender.


 


ANNUAL
REVIEWS BY LENDER. This loan is subject to annual reviews by Lender.


   



     


    	 	PROMISSORY NOTE
 (Continued)
	Page  4



    







 



 


DEPOSITORY
RELATIONSHIP. In consideration for Lender’s agreement to make the Loan, and other terms agreed to by Lender, the
Borrower shall maintain its primary operating account(s) with Lender, at all times during the term of the Loan. Such
depository account(s) with Lender shall maintain a minimum average ledger balance of $600,000.00 for each calendar year
during the term of the Loan. The minimum average ledger balances shall be tested annually based on the average of the
Borrower’s monthly bank statements for all such depository account(s) for that year. Notwithstanding the foregoing, Borrowers
may maintain other depository accounts with other banking institutions with written approval from Lender (that shall not be
unreasonably withheld, conditioned or delayed) where reasonably required to meet Borrower’s petty cash needs in geographic
areas where Lender does not maintain branch offices. Should Borrower fail to comply with the minimum depository covenant for
any quarterly period, Borrower shall be charged a fee equal to two percent (2%) per annum of the deficiency in the minimum
average ledger balance. This fee shall be charged automatically, without any notice to Borrower. This fee shall not be deemed
to be or constitute additional interest under the Loan, as it relates specifically and directly to the required deposit
balances. Lender may (i) exercise its offset rights to collect the fee, or (ii) send a written demand that the fee be paid
within 10 days of written notice thereof. Failure to pay the required fee shall constitute an Event of Default
hereunder.


 


LIQUIDITY
MAINTENANCE. Borrower and Guarantor, together, so long as the indebtedness hereby guaranteed is outstanding and unpaid, shall
together maintain unencumbered liquidity of no less than $6,000,000.00 by maintaining in their names only, in the form of unrestricted
unencumbered cash accounts, maintained by a recognized financial institution or licensed brokerage firm, approved by Lender; repurchase
agreements, certificates of deposit or marketable securities acceptable to Lender. Borrower and Guarantor shall furnish Lender
proof of said liquidity annually, commencing on July 31, 2018, which proof shall be in the form of bank statements, account statements
or such other proof acceptable to Lender. The failure of Borrower and Guarantor to maintain the said liquidity or provide proof
thereof, in the time and manner set forth herein, shall automatically constitute a default, and Lender shall be entitled to exercise
any remedy available to it as, and for a default hereunder, including the right of acceleration.


 


BORROWER’S
FINANCIAL STATEMENTS. BORROWER AGREES TO FURNISH LENDER WITH THE FOLLOWING:.


 


Tax
Returns. As soon as available, but in no event later than sixty (60) days after the applicable filing date for the tax reporting
period ended, Borrower’s originally signed copies of Federal and other governmental tax returns, including K-1 schedules, prepared
by certified public accountant satisfactory to Lender, commencing July 31, 2018. If an extension is filed, a copy of the extension
must be provided to Lender.


 


All
financial reports required to be provided under this Note shall be prepared in accordance with GAAP, applied on a consistent basis,
and certified by Borrower as being true and correct.


 


SUCCESSOR
INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower’s heirs, personal representatives, successors
and assigns, and shall inure to the benefit of Lender and its successors and assigns.


 


GENERAL
PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Borrower does not
agree or intend to pay, and Lender does not agree or intend to contract for, charge, collect, take, reserve or receive (collectively
referred to herein as “charge or collect”), any amount in the nature of interest or in the nature of a fee for this
loan, which would in any way or event (including demand, prepayment, or acceleration) cause Lender to charge or collect more for
this loan than the maximum Lender would be permitted to charge or collect by federal law or the law of the State of Florida (as
applicable). Any such excess interest or unauthorized fee shall, instead of anything stated to the contrary, be applied first
to reduce the principal balance of this loan, and when the principal has been paid in full, be refunded to Borrower. Lender may
delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor.
Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether
as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may
renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair,
fail to realize upon or perfect Lender’s security interest in the collateral; and take any other action deemed necessary by Lender
without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of
or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several.


 


PRIOR
TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.
BORROWER AGREES TO THE TERMS OF THE NOTE.


 


BORROWER
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.


 


BORROWER:


  


DRONE AVIATION HOLDING CORP.


 


	By:		 	By:	 
	 	Daniyel Erdberg, President of Drone Aviation Holding Crop.	 	 	Jay Nussbaum, Chief Executive Officer of Drone

    Aviation Holding Corp.



 


 


 


LaserPro,
Ver. 17.1.10.015 Copr. D+H USA Corporation 1997, 2017. All Rights Reserved. • FL I:\CFIWIN\CFI\LPL\D20.FC
TR-15841 PR-35


  



     


     


    

 


 


 


COMMERCIAL
SECURITY AGREEMENT


 


	Principal

$2,000,000.00
	Loan
Date

08-02-2017
	Maturity

08-02-2018
	Loan
    No	Call
                                         / Coll
 803
	Account	Officer

    ***	Initials

	References
                                         in the boxes above are for Lender’s use only and do not limit the applicability of this
                                         document to any particular loan or item.

        Any
        item above containing “***” has been omitted due to text length limitations.



 


	Grantor:  	Drone Aviation Holding Corp.

11651 Central Parkway, #118 

Jacksonville, FL 32224	 	Lender:  	CITY NATIONAL BANK OF
    FLORIDA

    Private Client Group

    25 W. Flagler Street

    MIAMI, FL 33130


 





 



 


THIS
COMMERCIAL SECURITY AGREEMENT dated August 2, 2017, is made and executed between Drone Aviation Holding Corp. (“Grantor”)
and CITY NATIONAL BANK OF FLORIDA (“Lender”).


 


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


 


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


 


All
Inventory, Chattel Paper, Accounts, Equipment and General Intangibles, as such terms are defined by the Uniform Commercial Code


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 



     


    	 	COMMERCIAL
                                         SECURITY AGREEMENT
 (Continued)
	Page  2



    







 






 


GRANTOR’S
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With respect to the Collateral, Grantor represents and promises
to Lender that:


 


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


  


Notices
to Lender. Grantor will promptly notify Lender in writing at Lender’s address shown above (or such other addresses as Lender
may designate from time to time) prior to any (1) change in Grantor’s name; (2) change in Grantor’s assumed business name(s);
(3) change in the management of the Corporation Grantor; (4) change in the authorized signer(s); (5) change in Grantor’s principal
office address; (6) change in Grantor’s state of organization; (7) conversion of Grantor to a new or different type of business
entity; or (8) change in any other aspect of Grantor that directly or indirectly relates to any agreements between Grantor and
Lender. No change in Grantor’s name or state of organization will take effect until after Lender has received notice.


 


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


 


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


  


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


 


Removal
of the Collateral. Except in the ordinary course of Grantor’s business, including the sales of inventory, Grantor shall not
remove the Collateral from its existing location without Lender’s prior written consent. To the extent that the Collateral consists
of vehicles, or other titled property, Grantor shall not take or permit any action which would require application for certificates
of title for the vehicles outside the State of Florida, without Lender’s prior written consent. Grantor shall, whenever requested,
advise Lender of the exact location of the Collateral.


 


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


  



     


    	 	COMMERCIAL
                                         SECURITY AGREEMENT
 (Continued)
	Page  3



    




 






 


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


 


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


 


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


 


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


 


Compliance
with Governmental Requirements. Grantor shall comply promptly with all laws, ordinances, rules and regulations of all governmental
authorities, now or hereafter in effect, applicable to the ownership, production, disposition, or use of the Collateral, including
all laws or regulations relating to the undue erosion of highly-erodible land or relating to the conversion of wetlands for the
production of an agricultural product or commodity. Grantor may contest in good faith any such law, ordinance or regulation and
withhold compliance during any proceeding, including appropriate appeals, so long as Lender’s interest in the Collateral, in Lender’s
opinion, is not jeopardized.


 


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


 


Maintenance
of Casualty Insurance. Grantor shall procure and maintain all risks insurance, including without limitation fire, theft and
liability coverage together with such other insurance as Lender may require with respect to the Collateral, in form, amounts,
coverages and basis reasonably acceptable to Lender and issued by a company or companies reasonably acceptable to Lender. Grantor,
upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory
to Lender, including stipulations that coverages will not be cancelled or diminished without at least ten (10) days’ prior written
notice to Lender and not including any disclaimer of the insurer’s liability for failure to give such a notice. Each insurance
policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act,
omission or default of Grantor or any other person. In connection with all policies covering assets in which Lender holds or is
offered a security interest, Grantor will provide Lender with such loss payable or other endorsements as Lender may require. If
Grantor at any time fails to obtain or maintain any insurance as required under this Agreement, Lender may (but shall not be obligated
to) obtain such insurance as Lender deems appropriate, including if Lender so chooses “single interest insurance,” which
will cover only Lender’s interest in the Collateral.


 


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


  



     


    	 	COMMERCIAL
                                         SECURITY AGREEMENT
 (Continued)
	Page  4



    







 



  


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


 


Insurance
Reports. Grantor, upon request of Lender, shall furnish to Lender reports on each existing policy of insurance showing such
information as Lender may reasonably request including the following: (1) the name of the insurer; (2) the risks insured; (3)
the amount of the policy; (4) the property insured; (5) the then current value on the basis of which insurance has been obtained
and the manner of determining that value; and (6) the expiration date of the policy. In addition, Grantor shall upon request by
Lender (however not more often than annually) have an independent appraiser satisfactory to Lender determine, as applicable, the
cash value or replacement cost of the Collateral.


 


Financing
Statements. Grantor authorizes Lender to file a UCC financing statement, or alternatively, a copy of this Agreement to perfect
Lender’s security interest. At Lender’s request, Grantor additionally agrees to sign all other documents that are necessary to
perfect, protect, and continue Lender’s security interest in the Property. Grantor will pay all filing fees, title transfer fees,
and other fees and costs involved unless prohibited by law or unless Lender is required by law to pay such fees and costs. Grantor
irrevocably appoints Lender to execute documents necessary to transfer title if there is a default. Lender may file a copy of
this Agreement as a financing statement.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


  



     


    	 	COMMERCIAL
                                         SECURITY AGREEMENT
 (Continued)
	Page  5



    




 



  


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


 


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


 


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


 


Events
Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or Guarantor
dies or becomes incompetent or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness.


 


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


  


Insecurity.
Lender in good faith believes itself insecure.


 


Cure
Provisions. If any default, other than a default in payment, is curable and if Grantor has not been given a notice of a breach
of the same provision of this Agreement within the preceding twelve (12) months, it may be cured if Grantor, after Lender sends
written notice to Grantor demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires
more than fifteen (15) days, immediately initiates steps which Lender deems in Lender’s sole discretion to be sufficient to cure
the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon
as reasonably practical.


 


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


 


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


 


Assemble
Collateral. Lender may require Grantor to deliver to Lender all or any portion of the Collateral and any and all certificates
of title and other documents relating to the Collateral. Lender may require Grantor to assemble the Collateral and make it available
to Lender at a place to be designated by Lender. Lender also shall have full power to enter upon the property of Grantor to take
possession of and remove the Collateral. If the Collateral contains other goods not covered by this Agreement at the time of repossession,
Grantor agrees Lender may take such other goods, provided that Lender makes reasonable efforts to return them to Grantor after
repossession.


 


Sell
the Collateral. Lender shall have full power to sell, lease, transfer, or otherwise deal with the Collateral or proceeds thereof
in Lender’s own name or that of Grantor. Lender may sell the Collateral at public auction or private sale. Unless the Collateral
threatens to decline speedily in value or is of a type customarily sold on a recognized market, Lender will give Grantor, and
other persons as required by law, reasonable notice of the time and place of any public sale, or the time after which any private
safe or any other disposition of the Collateral is to be made. However, no notice need be provided to any person who, after Event
of Default occurs, enters into and authenticates an agreement waiving that person’s right to notification of sale. The requirements
of reasonable notice shall be met if such notice is given at least ten (10) days before the time of the sale or disposition. All
expenses relating to the disposition of the Collateral, including without limitation the expenses of retaking, holding, insuring,
preparing for sale and selling the Collateral, shall become a part of the Indebtedness secured by this Agreement and shall be
payable on demand, with interest at the Note rate from date of expenditure until repaid.


  



     


    	 	COMMERCIAL
                                         SECURITY AGREEMENT
 (Continued)
	Page  6



    




 






 


Appoint
Receiver. In the event of a suit being instituted to foreclose this Agreement, Lender shall be entitled to apply at any time
pending such foreclosure suit to the court having jurisdiction thereof for the appointment of a receiver of any or all of the
Collateral, and of all rents, incomes, profits, issues and revenues thereof, from whatsoever source. The parties agree that the
court shall forthwith appoint such receiver with the usual powers and duties of receivers in like cases. Such appointment shall
be made by the court as a matter of strict right to Lender and without notice to Grantor, and without reference to the adequacy
or inadequacy of the value of the Collateral, or to Grantor’s solvency or any other party defendant to such suit. Grantor hereby
specifically waives the right to object to the appointment of a receiver and agrees that such appointment shall be made as an
admitted equity and as a matter of absolute right to Lender, and consents to the appointment of any officer or employee of Lender
as receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Collateral,
with the power to protect and preserve the Collateral, to operate the Collateral preceding foreclosure or sale, and to collect
the rents from the Collateral and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The
receiver may serve without bond if permitted by law. Lender’s right to the appointment of a receiver shall exist whether or not
the apparent value of the Collateral exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify
a person from serving as a receiver.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


   



     


    	 	COMMERCIAL
                                         SECURITY AGREEMENT
 (Continued)
	Page  7



    




 



 


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


 


Governing
Law. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the
laws of the State of Florida without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in
the State of Florida.


 


No
Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in
writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of
such right or any other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver
of Lender’s right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior
waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender’s rights or
of any of Grantor’s obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement,
the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such
consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender.


 


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


 


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


 


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


 


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


 


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


 


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


 


Waive
Jury. All parties to this Agreement hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought
by any party against any other party.


 


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


 


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


 


Borrower.
The word “Borrower” means Drone Aviation Holding Corp. and includes all co-signers and co-makers signing the Note
and all their successors and assigns.


  



     


    	 	COMMERCIAL
                                         SECURITY AGREEMENT
 (Continued)
	Page  8



    




 



 


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


 


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


 


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


 


Event
of Default. The words “Event of Default” mean any of the events of default set forth in this Agreement in the default
section of this Agreement.


 


Grantor.
The word “Grantor” means Drone Aviation Holding Corp..


 


Guarantor.
The word “Guarantor” means any guarantor, surety, or accommodation party of any or all of the Indebtedness.


 


Guaranty.
The word “Guaranty” means the guaranty from Guarantor to Lender, including without limitation a guaranty of all
or part of the Note.


 


Hazardous
Substances. The words “Hazardous Substances” mean materials that, because of their quantity, concentration or physical,
chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when
improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words “Hazardous


  


Substances”
are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste
as defined by or listed under the Environmental Laws. The term “Hazardous Substances” also includes, without limitation,
petroleum and petroleum by-products or any fraction thereof and asbestos.


 


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


 


Lender.
The word “Lender” means CITY NATIONAL BANK OF FLORIDA, its successors and assigns.


 


Note.
The word “Note” means the Note dated August 2, 2017 and executed by Drone Aviation Holding Corp. in the principal
amount of $2,000,000.00, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and
substitutions for the note or credit agreement.


 


Property.
The word “Property” means all of Grantor’s right, title and interest in and to all the Property as described in
the “Collateral Description” section of this Agreement.


 


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


 


GRANTOR
HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED
AUGUST 2, 2017.


 


GRANTOR:


 


DRONE AVIATION HOLDING
CORP.


 


	By:		 	By:	 
	 	Daniyel Erdberg, President of Drone Aviation Holding

 Crop.	 	 	Jay Nussbaum, Chief Executive Officer of Drone

    Aviation Holding Corp.


 


 


LaserPro,
Ver. 17.1.10.015 Copr. D+H USA Corporation 1997, 2017. All Rights Reserved. • FL I:\CFIWIN\CFI\LPL\E40.FC
TR-15841 PR-35