EX-10.1






NOTE AND SECURITY AGREEMENT




FOR VALUE RECEIVED, NON-INVASIVE MONITORING SYTEMS, INC., a Florida corporation with offices
at 4400 Biscayne Boulevard, Miami, Florida 33137 (“NIMS” or “Borrower”), pursuant
to this Note and Security Agreement (this “Note”) dated as of March 31, 2010, hereby
promises to pay to FROST GAMMA INVESTMENTS TRUST (“Frost Gamma”), and HSU GAMMA
INVESTMENTS, L.P., a Delaware limited partnership (“Hsu Gamma” and, together with Frost
Gamma, “Lender”), at such place as Lender may designate from time to time in writing, in
lawful money of the United States of America, the principal amount of $1,000,000, or such lesser
amount as shall equal the outstanding principal balance of the loan (the “Loan”) made to
Borrower by Lender pursuant to this Note, and to pay all other amounts due with respect to the Loan
on the dates and in the amounts set forth in this Note. Frost Gamma will fund an aggregate amount
equal to 50.00% of the Loan, and Hsu Gamma will fund an aggregate amount equal to 50.00% of the
Loan; and Borrower shall repay the Loan to each of Frost Gamma and Hsu Gamma in proportion to such
funding percentages, respectively.



1. Definitions. The terms set forth below shall have the following meanings:



(a) “Advances” means amounts advanced under the Note upon prior written notice to the
Lender by the Borrower not later than 3:00 p.m., Eastern Standard Time, on the third business day
prior to the date of any advance of credit pursuant hereto. Any such notice shall be in the form
of the Borrowing Notice (as hereafter defined), shall be certified by the president of Borrower and
shall set forth the aggregate amount of the requested Advance. Upon receiving a request for an
Advance to which Borrower is entitled hereunder, the Lender shall make the requested Advance
available to Borrower by wire transfer of immediately available funds to a bank account designated
by Borrower.



(b) “Affiliate” means any Person that owns or controls directly or indirectly ten
percent (10%) or more of the stock of another entity, any Person that controls or is controlled by
or is under common control with such Persons or any Affiliate of such Persons and each of such
Person’s officers, directors, joint venturers or partners.



(c) “Available Amount” means One Million Dollars ($1,000,000).



(d) “Borrowing Notice” means the Notice of Borrowing set forth as Exhibit A to this
Note.



(e) “Code” means the Uniform Commercial Code as adopted and in effect in the State of
Florida, as amended from time to time; provided that if by reason of mandatory
provisions of law, the creation and/or perfection or the effect of perfection or non-perfection of
the security interest in any Collateral is governed by the Uniform Commercial Code as in effect in
a jurisdiction other than Florida, then the term “Code” shall also mean the Uniform
Commercial Code as in effect from time to time in such jurisdiction for purposes of the provisions
hereof relating to such creation, perfection or effect of perfection or non-perfection.



(f) “Default Rate” shall mean a rate that shall be five percent (5.0%) in excess of
the Interest Rate but not more than the maximum rate allowed by law. The Default Rate is imposed
as liquidated damages for the purpose of defraying the Lender’s expenses incident to the handling
of delinquent payments, but are in addition to, and not in lieu of, the Lender’s exercise of any
rights and remedies hereunder or under applicable law, and any fees and expenses of any agents or
attorneys which the Lender may employ in respect of such rights and remedies. In addition, the
Default Rate reflects the increased credit risk to the Lender of carrying a loan that is in
default. Borrower agrees that the Default Rate is a reasonable forecast of just compensation for
anticipated and actual harm incurred by the Lender in the event of Borrower’s default hereunder,
and that the actual harm incurred by the Lender cannot be estimated with certainty and without
difficulty.



(g) “Equity Securities” of Borrower means (1) all common stock, preferred stock,
participations, shares, partnership interests, membership interests or other equity interests in
and of Borrower (regardless of how designated and whether or not voting or non-voting) and (2) all
warrants, options and other rights to acquire any of the foregoing.



(h) “Event of Default” shall mean the occurrence of one or more of the following
events:



(1) Borrower shall fail to make any payment due to Lender under this Note when the same shall
become due and payable, whether at maturity, by acceleration or otherwise, within five (5) days
after receipt of written notice from Lender that such payment is due and unpaid.



(2) Borrower violates any of the covenants contained in Sections 7 and 8 of this Note and
fails to remedy such violation within ten (10) days after receipt of written notice from Lender
that such a violation has occurred.



(3) Any material portion of Borrower’s assets is attached, seized, subjected to a writ or
distress warrant, or is levied upon, or comes into the possession of any trustee, receiver or
person acting in a similar capacity and such attachment, seizure, writ or distress warrant or levy
has not been removed, discharged or rescinded within ten (10) days, or if Borrower is enjoined,
restrained, or in any way prevented by court order from continuing to conduct all or any material
part of its business affairs, or if a judgment or other claim becomes a lien or encumbrance upon
any material portion of Borrower’s assets, or if a notice of lien, levy, or assessment is filed of
record with respect to any of Borrower’s assets by the United States Government, or any department,
agency, or instrumentality thereof, or by any state, county, municipal or governmental agency, and
the same is not paid within ten (10) days after Borrower receives notice thereof; provided that
none of the foregoing shall constitute an Event of Default where such action or event is stayed or
an adequate bond has been posted pending a good faith contest by Borrower.



(4) One or more defaults shall exist under any agreement with any third party or parties which
consists of the failure to pay any Indebtedness at maturity or which results in a right by such
third party or parties, whether or not exercised, to accelerate the maturity of Indebtedness in an
aggregate amount in excess of One Hundred Fifty Thousand Dollars ($150,000).



(5) A judgment or judgments for the payment of money in an amount, individually or in the
aggregate, of at least One Hundred Fifty Thousand Dollars ($150,000) shall be rendered against
Borrower and shall remain unsatisfied and unstayed for a period of ten (10) days or more.



(6) Any material misrepresentation or material misstatement that exists now or hereafter in
any warranty, representation, statement, certification or report made to Lender by Borrower or any
officer, employee, agent or director of Borrower.



(7) Any document executed in connection with the Loan ceases to be, or Borrower asserts that
such document is not, in any material respect, a legal, valid and binding obligation of Borrower
enforceable in accordance with its terms.



(8) A proceeding shall have been instituted in a court having jurisdiction in the premises
seeking a decree or order for relief in respect of Borrower in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or for the
appointment of a receiver, liquidator, assignee, custodian, trustee (or similar official) of
Borrower or for any substantial part of its property, or for the winding-up or liquidation of its
affairs, and such proceeding shall remain undismissed or unstayed and in effect for a period of
sixty (60) consecutive days or such court shall enter a decree or order granting the relief sought
in such proceeding.



(9) Borrower commences a voluntary case under any applicable bankruptcy, insolvency or other
laws affecting creditors’ rights generally now or hereafter in effect, consents to the entry of an
order for relief in an involuntary case under any such law, or consents to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee, custodian (or other similar
official) of Borrower or for any substantial part of its property, or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any corporate action in furtherance of any of the foregoing.



(i) “Indebtedness” means, with respect to Borrower, the aggregate amount of, without
duplication, (a) all obligations of Borrower for borrowed money, (b) all obligations of Borrower
evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of Borrower
to pay the deferred purchase price of property or services (excluding trade payables aged less than
one hundred eighty (180) days), (d) all capital lease obligations of Borrower, (e) all obligations
or liabilities of others secured by a Lien on any asset of Borrower, whether or not such obligation
or liability is assumed, (f) all obligations or liabilities of others guaranteed by Borrower, and
(g) any other obligations or liabilities which are required by GAAP to be shown as debt on the
balance sheet of Borrower.



(j) “Interest Rate” shall be 11% per annum.



(k) “Intellectual Property” means all of Borrower’s right, title and interest in and
to patents, patent rights (and applications and registrations therefor), trademarks and service
marks (and applications and registrations therefor), inventions, copyrights, mask works (and
applications and registrations therefor), trade names, trade styles, software and computer
programs, source code, object code, trade secrets, methods, processes, know how, drawings,
specifications, descriptions, and all memoranda, notes, and records with respect to any research
and development, all whether now owned or licensed to, or subsequently acquired or developed by or
licensed to Borrower and whether in tangible or intangible form or contained on magnetic media
readable by machine together with all such magnetic media (but not including embedded computer
programs and supporting information included within the definition of “goods” under the Code) and
including all licenses and sublicenses with respect to any of the foregoing granted to or otherwise
acquired by Borrower or to which Borrower is a successor or assignee.



(l) “Lender’s Expenses” means all reasonable attorneys’ fees, costs and expenses
incurred in amending (except as contemplated hereby), enforcing or defending the Note (including
fees and expenses of appeal or review), including the exercise of any rights or remedies afforded
under the Note or under applicable law, whether or not suit is brought, whether before or after
bankruptcy or insolvency, including without limitation all fees and costs incurred by Lender in
connection with Lender’s enforcement of its rights in a bankruptcy or insolvency proceeding filed
by or against Borrower or its property.



(m) “Lien” means any voluntary or involuntary security interest, pledge, bailment,
lease, mortgage, hypothecation, conditional sales and title retention agreement, encumbrance or
other lien with respect to any property of the Borrower in favor of any person.



(n) “Obligations” shall mean actual indebtedness, principal, interest, fees, charges,
expenses and reasonable attorneys’ fees and costs and other amounts, obligations, covenants and
duties owing by Borrower to the Lender (or any permitted assignee) of any kind and description
(whether pursuant to or evidenced by this Note), whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, including Lender’s Expenses,
in each case as then outstanding hereunder.



(o) “Permitted Indebtedness” means and includes:



(1) Indebtedness of Borrower to Lender;



(2) Indebtedness arising from the endorsement of instruments in the ordinary course of
business;



(3) Indebtedness existing on the date hereof;



(4) Indebtedness of Borrower in an aggregate original principal amount not to exceed $250,000
which is secured by Liens permitted under clause (5) of the definition of Permitted Liens;



(5) Other Indebtedness in an aggregate amount not exceeding $100,000 at any time; and



(6) Extensions, refinancings, modifications, amendments and restatements of any items of
Permitted Indebtedness above, provided that the principal amount thereof is not increased or the
terms thereof are not modified to impose more burdensome terms upon Borrower.



(p) “Permitted Investments” means and includes any of the following investments:



(1) Deposits and deposit accounts with commercial banks organized under the laws of the United
States or a state thereof to the extent: (i) the deposit accounts of each such institution are
insured by the Federal Deposit Insurance Corporation up to the legal limit; and (ii) each such
institution has an aggregate capital and surplus of not less than One Hundred Million Dollars
($100,000,000).



(2) Investments in marketable obligations issued or fully guaranteed by the United States and
maturing not more than one (1) year from the date of issuance.



(3) Investments in open market commercial paper rated at least “A1” or “P1” or
higher by a national credit rating agency and maturing not more than one (1) year from the creation
thereof.



(4) Investments pursuant to or arising under currency agreements or interest rate agreements
entered into in the ordinary course of business.



(5) Investments, not requiring the use of cash or the assumption of liabilities, in joint
ventures, partnerships or similar business arrangements entered into in the ordinary course of
business in substantially the same industry and growth stage as Borrower.



(6) Other investments aggregating not in excess of Five Hundred Thousand Dollars ($500,000)
at any time.



(q) “Permitted Liens” means:



(1) The Lien created by this Note.



(2) Liens for fees, taxes, levies, imposts, duties or other governmental charges of any kind
which are not yet delinquent or which are being contested in good faith by appropriate proceedings
which suspend the collection thereof (provided that such appropriate proceedings do
not involve any substantial danger of the sale, forfeiture or loss of any material item of
Collateral or Collateral which in the aggregate is material to Borrower and that Borrower has
adequately bonded such Lien or reserves sufficient to discharge such Lien have been provided on the
books of Borrower).



(3) Liens existing as of the date of this Note.



(4) Carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other similar Liens
arising in the ordinary course of business and which are not delinquent or remain payable without
penalty or which are being contested in good faith and by appropriate proceedings (provided
that such appropriate proceedings do not involve any substantial danger of the sale,
forfeiture or loss of any material item of Collateral or Collateral which in the aggregate is
material to Borrower and that Borrower has adequately bonded such Lien or reserves sufficient to
discharge such Lien have been provided on the books of Borrower).



(5) Liens upon any equipment or other personal property acquired by Borrower after the date
hereof to secure (i) the purchase price of such equipment or other personal property, or (ii) lease
obligations or indebtedness incurred solely for the purpose of financing the acquisition of such
equipment or other personal property; provided that such Liens are confined solely to the equipment
or other personal property so acquired and the proceeds thereof and the amount secured does not
exceed the acquisition price thereof.



(6) Licenses of Intellectual Property entered into in the ordinary course of business (whether
as licensor or licensee);



(7) Bankers’ liens, rights of setoff and similar Liens incurred on deposits made in the
ordinary course of business and Liens in favor of financial institutions arising in connection with
Borrower’s deposit accounts or securities accounts held at such institutions to secure customary
fees and charges;



(8) Any judgment, attachment or similar Lien not resulting in an Event of Default hereunder;
and



(9) Liens incurred in the extension, renewal or refinancing of the indebtedness secured by
Liens described above but any extension, renewal or replacement Lien must be limited to the
property encumbered by the existing Lien and the principal amount of the indebtedness may not
increase.



(r) “Person” means and includes any individual, any partnership, any corporation, any
business trust, any joint stock company, any limited liability company, any unincorporated
association or any other entity and any domestic or foreign national, state or local government,
any political subdivision thereof, and any department, agency, authority or bureau of any of the
foregoing.



(s) “Subsidiary” means any corporation or other entity of which a majority of the
outstanding equity securities entitled to vote for the election of directors or other governing
body (otherwise than as the result of a default) is owned by Borrower directly or indirectly
through Subsidiaries.



2. Advances Under the Note and Obligations. From time to time prior to the Maturity
Date, subject to the provisions below, the Lender may make Advances to the Borrower, which the
Borrower shall repay to the Lender and, the Borrower after such Advances, may reborrow, so long as
the aggregate amount of Advances outstanding at any one time shall not exceed the Available Amount,
which the Borrower shall again repay to the Lender. Notwithstanding the face amount of the Note,
Borrower’s liability under the Note shall include the Obligations. Lender may determine to include
Obligations other than interest payable at the Interest Rate in calculating the Available Amount.
The obligation of the Lender to make Advances shall be subject to the Lender’s receipt of a
completed Borrowing Notice and such documents as the Lender may reasonably request and the absence
of any continuing Event of Default. Prior to making the first Advance and as a condition to such
Advance, Borrower shall provide Lender with a certificate of the duly authorized Secretary of
Borrower as to its Bylaws and resolutions adopted by its board of directors authorizing this Note
and the transactions contemplated hereby, and a certified copy of Borrower’s Certificate of
Incorporation, as well as any and all third-party consents which are required to be procured by
Borrower before it can incur the indebtedness evidenced by this Note and otherwise commit itself to
its obligations hereunder.



3. Payments of Obligations, including Principal and Interest. The principal amount of
the Loan evidenced hereby, together with any accrued and unpaid interest, and any and all the
Obligations, including unpaid costs, fees and expenses accrued, such as Lender’s Expenses, shall be
due and payable in full on March 31, 2011 (the “Maturity Date”).



4. Interest. All amounts outstanding from time to time hereunder shall bear interest
until such amounts are paid at the Interest Rate. Following any Event of Default (including before
or after any judgment is entered) and after the Maturity Date, the principal balance outstanding
hereunder, together with all such other amounts outstanding hereunder, shall bear interest at the
Default Rate.



5. Prepayments. Borrower may prepay in cash, at any time or from time to time, all or
any portion of the amounts due hereunder, without penalty or premium; provided,
however, that any prepayment (whether voluntary or involuntary) shall be applied first to
accrued and unpaid interest and second to outstanding principal and other Obligations due
hereunder. Prepayments of all or any portion of the Obligations shall not reduce the Available
Amount, and funds may be reborrowed hereunder up to the Available Amount, subject to the provision
hereof and the Note. If Borrower makes a payment or payments and such payment or payments, or any
part thereof, are subsequently invalidated, declared to be fraudulent or preferential, set aside or
are required to be repaid to a trustee, receiver, or any other person under any bankruptcy act,
state, provincial or federal law, common law or equitable cause, then to the extent of such payment
or payments, the obligations or part thereof hereunder intended to be satisfied shall be revived
and continued in full force and effect as if said payment or payments had not been made.




6. Security Interest.



(a) Grant of Security Interest. Borrower grants to Lender a valid and continuing
first priority security interest in all presently existing and hereafter acquired or arising
Collateral in order to secure prompt, full and complete payment of the amounts due hereunder and in
order to secure prompt, full and complete performance by Borrower of each of its covenants and
duties under this Note. “Collateral” shall mean and include all right, title, interest,
claims and demands of Borrower in and to all personal property of Borrower, including without
limitation, all of the following:



(1) All goods (and embedded computer programs and supporting information included within the
definition of “goods” under the Code) and equipment now owned or hereafter acquired,
including, without limitation, all laboratory equipment, computer equipment, office equipment,
machinery, fixtures, vehicles (including motor vehicles and trailers), and any interest in any of
the foregoing, and all attachments, accessories, accessions, replacements, substitutions,
additions, and improvements to any of the foregoing, wherever located.



(2) All inventory now owned or hereafter acquired, including, without limitation, all
merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and
finished products including such inventory as is temporarily out of Borrower’s custody or
possession or in transit and including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the foregoing and any
documents of title representing any of the above, and Borrower’s books relating to any of the
foregoing.



(3) All contract rights and general intangibles, now owned or hereafter acquired, including,
without limitation, goodwill, license agreements, franchise agreements, blueprints, drawings,
purchase orders, customer lists, route lists, infringements, claims, software, computer programs,
computer disks, computer tapes, literature, reports, catalogs, design rights, income tax refunds,
payment intangibles, commercial tort claims, payments of insurance and rights to payment of any
kind.



(4) All now existing and hereafter arising accounts, contract rights, royalties, license
rights, license fees and all other forms of obligations owing to Borrower arising out of the sale
or lease of goods, the licensing of technology or the rendering of services by Borrower (subject,
in each case, to the contractual rights of third parties to require funds received by Borrower to
be expended in a particular manner), whether or not earned by performance, and any and all credit
insurance, guaranties, and other security therefor, as well as all merchandise returned to or
reclaimed by Borrower and Borrower’s books relating to any of the foregoing.



(5) All documents, cash, deposit accounts, letters of credit (whether or not the letter of
credit is evidenced by a writing), certificates of deposit, instruments, promissory notes, chattel
paper (whether tangible or electronic) and investment property, including, without limitation, all
securities, whether certificated or uncertificated, security entitlements, securities accounts,
commodity contracts and commodity accounts, and all financial assets held in any securities account
or otherwise, wherever located, now owned or hereafter acquired and Borrower’s books relating to
the foregoing.



(6) All Intellectual Property of the Borrower.



(7) Any and all claims, rights and interests in any of the above and all substitutions for,
additions and accessions to and proceeds thereof, including, without limitation, insurance,
condemnation, requisition or similar payments and proceeds of the sale or licensing of Intellectual
Property to the extent such proceeds no longer constitute Intellectual Property.



(b) After-Acquired Property. If Borrower shall at any time acquire a commercial tort
claim, as defined in the Code, Borrower shall immediately notify Lender in writing signed by
Borrower of the brief details thereof and grant to Lender in such writing a security interest
therein and in the proceeds thereof, all upon the terms of this Note, with such writing to be in
form and substance satisfactory to Lender.



(c) Duration of Security Interest. Lender’s security interest in the Collateral shall
continue until the payment in full and the satisfaction of all obligations of Borrower under this
Note, and the termination of any commitment to fund any Loan, whereupon such security interest
shall terminate. Lender shall, at Borrower’s sole cost and expense, execute such further documents
and take such further actions as may be reasonably necessary to make effective the release
contemplated by this Section 6(c), including duly executing and delivering termination statements
for filing in all relevant jurisdictions under the Code.



(d) Location and Possession of Collateral. The Collateral is and shall remain in the
possession of Borrower at its location at 4400 Biscayne Boulevard, Miami, Florida 33137 and such
other locations that the Borrower shall lawfully occupy in the normal conduct of its business.
Borrower shall remain in full possession, enjoyment and control of the Collateral (except only as
may be otherwise required by Lender for perfection of its security interest therein) and so long as
no Event of Default has occurred and is continuing, shall be entitled to manage, operate and use
the same and each part thereof with the rights and franchises appertaining thereto;
provided that the possession, enjoyment, control and use of the Collateral shall at
all time be subject to the observance and performance of the terms of this Note.



(e) Delivery of Additional Documentation Required. Borrower shall from time to time
execute and deliver to Lender, at the request of Lender, all financing statements and other
documents Lender may reasonably request, in form satisfactory to Lender, to perfect and continue
Lender’s perfected security interests in the Collateral and in order to consummate fully all of the
transactions contemplated under this Note.



(f) Right to Inspect. Lender (through any of its officers, employees, or agents)
shall have the right, upon reasonable prior notice, from time to time during Borrower’s usual
business hours, to inspect Borrower’s books and records and to make copies thereof and to inspect,
test, and appraise the Collateral in order to verify Borrower’s financial condition or the amount,
condition of, or any other matter relating to, the Collateral.



(g) Protection of Intellectual Property. Borrower shall use its commercially
reasonable efforts to (i) protect, defend and maintain the validity and enforceability of its
material Intellectual Property and promptly advise Lender in writing of material infringements
which become known to Borrower and (ii) not allow any Intellectual Property material to Borrower’s
business to be abandoned, forfeited or dedicated to the public except in the ordinary course of
Borrower’s business. Specifically but without limitation, Borrower shall cause the Creighton
License to remain in full force and effect at all times while this Note is in effect.



7. Affirmative Covenants. Borrower covenants that, so long as any amounts are due and
payable hereunder to Lender or any commitment to make any Loan still exists, Borrower shall:



(a) Maintain its corporate existence and its good standing in its jurisdiction of
incorporation and maintain qualification in each jurisdiction in which the failure to so qualify
could reasonably be expected to have a material adverse effect on the financial condition,
operations or business of Borrower. Borrower shall maintain in force all licenses, approvals and
agreements, the loss of which could reasonably be expected to have a material adverse effect on its
financial condition, operations or business.



(b) Comply with all statutes, laws, ordinances and government rules and regulations to which
it is subject, noncompliance with which could reasonably be expected to materially adversely affect
the financial condition, operations or business of Borrower.



(c) Deliver to Lender: (i) as soon as available, but in any event within forty five (45) days
after the end of each month, a company prepared balance sheet, income statement and cash flow
statement covering Borrower’s operations during such period, certified by Borrower’s president,
treasurer or chief financial officer (each, a “Responsible Officer”); (ii) as soon as
available, but in any event within one hundred twenty (120) days after the end of Borrower’s fiscal
year, audited financial statements of Borrower prepared in accordance with GAAP, together with an
unqualified opinion on such financial statements of a nationally recognized or other independent
public accounting firm reasonably acceptable to Lender; and (iii) as soon as available, but in any
event within ninety (90) days after the end of Borrower’s fiscal year or the date of Borrower’s
board of directors’ adoption, Borrower’s operating budget and plan for the next fiscal year; and
(iv) such other financial information as Lender may reasonably request from time to time. For so
long as Borrower is a publicly reporting company, promptly as they are available and in any event:
(x) at the time of filing of Borrower’s Form 10-K with the Securities and Exchange Commission after
the end of each fiscal year of Borrower, the financial statements of Borrower filed with such Form
10-K; and (y) at the time of filing of Borrower’s Form 10-Q with the Securities and Exchange
Commission after the end of each of the first three fiscal quarters of Borrower, the financial
statements of Borrower filed with such Form 10-Q. In addition, Borrower shall deliver to Lender:
(i) promptly upon becoming available, copies of all statements, reports and notices sent or made
available generally by Borrower to its security holders; (ii) immediately upon receipt of notice
thereof, a report of any material legal actions pending or threatened against Borrower or the
commencement of any action, proceeding or governmental investigation involving Borrower is
commenced that is reasonably expected to result in damages or costs to Borrower of One Hundred
Fifty Thousand Dollars ($150,000) or more; and (iii) such other financial information as Lender may
reasonably request from time to time.



(d) Each time financial statements are furnished pursuant to Section 7(c) above, deliver to
Lender an Officer’s Certificate signed by a Responsible Officer in form satisfactory to Lender,
certifying such financial statements, Borrower’s compliance with the terms of this Note and that no
default or Event of Default has occurred under this Note.



(e) As soon as possible, and in any event within five (5) days after the discovery of a
default or an Event of Default, provide Lender with an Officer’s Certificate setting forth the
facts relating to or giving rise to such default or Event of Default and the action which Borrower
proposes to take with respect thereto.



(f) Make due and timely payment or deposit of all federal, state, and local taxes,
assessments, or contributions required of it by law or imposed upon any property belonging to it,
and will execute and deliver to Lender, on demand, appropriate certificates attesting to the
payment or deposit thereof; and Borrower will make timely payment or deposit of all tax payments
and withholding taxes required of it by applicable laws, including those laws concerning F.I.C.A.,
F.U.T.A., state disability, and local, state, and federal income taxes, and will, upon request,
furnish Lender with proof satisfactory to Lender indicating that Borrower has made such payments or
deposits; provided that Borrower need not make any payment if the amount or validity of such
payment is contested in good faith by appropriate proceedings which suspend the collection thereof
(provided that such proceedings do not involve any substantial danger of the sale, forfeiture or
loss of any material item of Collateral or Collateral which in the aggregate is material to
Borrower and that Borrower has adequately bonded such amounts or reserves sufficient to discharge
such amounts have been provided on the books of Borrower).



(g) Keep and maintain all items of equipment and other similar types of personal property that
form any significant portion or portions of the Collateral in good operating condition and repair
and shall make all necessary replacements thereof and renewals thereto so that the value and
operating efficiency thereof shall at all times be maintained and preserved. Borrower shall not
permit any such material item of Collateral to become a fixture to real estate or an accession to
other personal property, without the prior written consent of Lender. Borrower shall not permit
any such material item of Collateral to be operated or maintained in violation of any applicable
law, statute, rule or regulation. With respect to items of leased equipment (to the extent Lender
has any security interest in any residual Borrower’s interest in such equipment under the lease),
Borrower shall keep, maintain, repair, replace and operate such leased equipment in accordance with
the terms of the applicable lease.



(h) Keep its business and the Collateral insured for risks and in amounts as Lender may
reasonably request. Insurance policies shall be in a form, with companies, and in amounts that are
satisfactory to Lender. All property policies shall have a lender’s loss payable endorsement
showing Lender as an additional loss payee and all liability policies shall show Lender as an
additional insured and all policies shall provide that the insurer must give Lender at least thirty
(30) days notice before canceling its policy. At Lender’s request, Borrower shall deliver
certified copies of policies and evidence of all premium payments. Proceeds payable under any
policy shall, at Lender’s option, be payable to Lender on account of the Obligations.
Notwithstanding the foregoing, so long as no Event of Default has occurred and is continuing,
Borrower shall have the option of applying the proceeds of any casualty policy, toward the
replacement or repair of destroyed or damaged property; provided that (i) any such replaced or
repaired property (a) shall be of equal or like value as the replaced or repaired Collateral and
(b) shall be deemed Collateral in which Lender has been granted a security interest and (ii) after
the occurrence and during the continuation of an Event of Default all proceeds payable under such
casualty policy shall, at the option of Lender, be payable to Lender, on account of the
Indebtedness evidenced by this Note. If Borrower fails to obtain insurance as required under this
Section 7(h) or to pay any amount or furnish any required proof of payment to third persons and
Lender, Lender may make all or part of such payment or obtain such insurance policies required in
this Section 7(h) and take any action under the policies Lender deems prudent. On or prior to the
Initial Closing Date and prior to each policy renewal, Borrower shall furnish to Lender
certificates of insurance or other evidence reasonably satisfactory to Lender that insurance
complying with all of the above requirements is in effect.



(i) Assuming the proper filing of one or more financing statement(s) identifying the
Collateral with the proper state and/or local authorities, the security interests in the Collateral
granted to Lender pursuant to this Note (i) constitute and will continue to constitute first
priority security interests (except to the extent any Permitted Liens may have a superior priority
to Lender’s Lien under this Note) and (ii) are and will continue to be superior and prior to the
rights of all other creditors of Borrower (except to the extent of such Permitted Liens).



(j) At any time and from time to time Borrower shall execute and deliver such further
instruments and take such further action as may reasonably be requested by Lender to make effective
the purposes of this Note, including without limitation, the continued perfection and priority of
Lender’s security interest in the Collateral.



8. Negative Covenants. Borrower covenants that so long as any amounts are due and
payable hereunder to Lender or any commitment to make any Loan still exists, without the prior
approval of Lender, Borrower shall not:



(a) Change its name, jurisdiction of incorporation or principal place of business without
thirty (30) days prior written notice to Lender.



(b) Subject to its rights under Section 8(d), remove any items of Collateral from the
Collateral location(s) specified in this Note.



(c) Create, incur, assume or suffer to exist any Lien of any kind upon any of Borrower’s
property, whether now owned or hereafter acquired, except Permitted Liens.



(d) Convey, sell, lease or otherwise dispose of all or any part of the Collateral to any
Person (collectively, a “Transfer”), except for: (i) Transfers of inventory in the ordinary
course of business; or (ii) Transfers of worn-out or obsolete equipment.



(e) (i) Pay any dividends or make any distributions on its Equity Securities; (ii) purchase,
redeem, retire, defease or otherwise acquire for value any of its Equity Securities (other than
repurchases pursuant to the terms of employee stock purchase plans, employee restricted stock
agreements or similar arrangements in an aggregate amount not to exceed One Hundred Thousand
Dollars ($100,000)); (iii) return any capital to any holder of its Equity Securities as such; (iv)
make any distribution of assets, Equity Securities, obligations or securities to any holder of its
Equity Securities as such; or (v) set apart any sum for any such purpose; provided,
however, that Borrower may pay dividends payable solely in common stock.



(f) Engage in or permit any of its Subsidiaries to engage in any business other than the
businesses currently engaged in by Borrower or reasonably related thereto.



(g) Enter into any contractual obligation with any Affiliate or engage in any other
transaction with any Affiliate except upon terms at least as favorable to Borrower as an
arms-length transaction with persons who are not Affiliates of Borrower.



(h) (i) Prepay, redeem, purchase, defease or otherwise satisfy in any manner prior to the
scheduled repayment thereof any Indebtedness for borrowed money (other than amounts due or
permitted to be prepaid under this Note) or lease obligations, (ii) amend, modify or otherwise
change the terms of any Indebtedness for borrowed money or lease obligations so as to accelerate
the scheduled repayment thereof or (iii) repay any notes to officers, directors or shareholders.



(i) Create, incur, assume or permit to exist any Indebtedness except Permitted Indebtedness.



(j) Make any investment except for Permitted Investments.



(k) Become an “investment company” or a company controlled by an “investment
company” under the Investment Company Act of 1940 or undertake as one of its important
activities extending credit to purchase or carry margin stock, or use the proceeds of any Loan for
that purpose; fail to meet the minimum funding requirements of the Employment Retirement Income
Security Act of 1974, and its regulations, as amended from time to time (“ERISA”), permit a
Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the
Federal Fair Labor Standards Act or violate any other law or regulation, if the violation could
reasonably be expected to have a material adverse effect on Borrower’s business or operations or
could reasonably be expected to cause a material adverse change, or permit any of its Subsidiaries
to do so.



(l) Create, incur, assume or suffer to exist any Lien of any kind upon any Intellectual
Property or Transfer any Intellectual Property, whether now owned or hereafter acquired, other than
licenses of Intellectual Property entered into in the ordinary course of business.




9. Lender’s Rights and Remedies.



(a) Rights and Remedies. Upon the occurrence of an Event of Default, while such Event
of Default is continuing (provided that an Event of Default shall be continuing at all times after
any cure period therefor expires), Lender shall not have any further obligation to advance money or
extend credit to or for the benefit of Borrower. In addition, upon the occurrence and during the
continuance of an Event of Default, the entire unpaid principal sum hereunder, plus any and all
interest accrued thereon, plus all other sums due and payable to Lender hereunder shall, at the
option of Lender, become due and payable immediately without presentment, demand, notice of
nonpayment, protest, notice of protest, or other notice of dishonor, all of which are hereby
expressly waived by Borrower. Lender shall have the rights, options, duties and remedies of a
secured party as permitted by applicable law and, in addition to and without limitation of the
foregoing, Lender may, at its election, without notice of election and without demand, do any one
or more of the following, all of which are authorized by Borrower:



(1) Make such payments and do such acts as Lender considers necessary or reasonable to protect
Lender’s security interest in the Collateral. Borrower agrees to assemble the Collateral if Lender
so requires and to make the Collateral available to Lender as Lender may designate. Borrower
authorizes Lender and its designees and agents to enter the premises where the Collateral is
located, to take and maintain possession of the Collateral, or any part of it, and to pay,
purchase, contest, or compromise any Lien which in Lender’s determination appears or is claimed to
be prior or superior to its security interest and to pay all expenses incurred in connection
therewith. With respect to any of Borrower’s owned premises, Borrower hereby grants Lender a
license to enter into possession of such premises and to occupy the same, without charge, for up to
one hundred twenty (120) days in order to exercise any of Lender’s rights or remedies provided
herein, at law, in equity, or otherwise;



(2) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for
sale, and sell (in the manner provided for herein) the Collateral. Lender and its agents and any
purchasers at or after foreclosure are hereby granted a non-exclusive, irrevocable, perpetual,
fully paid, royalty-free license or other right, solely pursuant to the provisions of this Section
8, to use, without charge, Borrower’s Intellectual Property, including without limitation, labels,
patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks, service
marks and advertising matter, or any property of a similar nature, now or at any time hereafter
owned or acquired by Borrower or in which Borrower now or at any time hereafter has any rights;
provided that such license shall only be exercisable in connection with the
disposition of Collateral upon Lender’s exercise of its remedies hereunder;



(3) Sell the Collateral at either a public or private sale, or both, by way of one or more
contracts or transactions, for cash or on terms, in such manner and at such places (including
Borrower’s premises) as Lender determines are commercially reasonable; and



(4) Credit bid and purchase all or any portion of the Collateral at any public sale.



Any deficiency that exists after disposition of the Collateral as provided above will be paid
immediately by Borrower.



(b) Set Off Right. Lender may set off and apply to the obligations hereunder any and
all indebtedness at any time owing to or for the credit or the account of Borrower or any other
assets of Borrower in Lender’s possession or control.



(c) Effect of Sale. Upon the occurrence of an Event of Default and during the
continuation thereof, to the extent permitted by applicable law, Borrower covenants that it will
not at any time insist upon or plead, or in any manner whatsoever claim or take any benefit or
advantage of, any stay or extension law now or at any time hereafter in force, nor claim, take nor
insist upon any benefit or advantage of or from any law now or hereafter in force providing for the
valuation or appraisement of the Collateral or any part thereof prior to any sale or sales thereof
to be made pursuant to any provision herein contained, or to the decree, judgment or order of any
court of competent jurisdiction; nor, after such sale or sales, claim or exercise any right under
any statute now or hereafter made or enacted by any state or otherwise to redeem the property so
sold or any part thereof, and, to the full extent legally permitted, except as to rights expressly
provided herein, hereby expressly waives for itself and on behalf of each and every Person, except
decree or judgment creditors of Borrower, acquiring any interest in or title to the Collateral or
any part thereof subsequent to the date of this Note, all benefit and advantage of any such law or
laws, and covenants that it will not invoke or utilize any such law or laws or otherwise hinder,
delay or impede the execution of any power herein granted and delegated to Lender, but will suffer
and permit the execution of every such power as though no such power, law or laws had been made or
enacted. Any sale, whether under any power of sale hereby given or by virtue of judicial
proceedings, shall operate to divest all right, title, interest, claim and demand whatsoever,
either at law or in equity, of Borrower in and to the property sold, and shall be a perpetual bar,
both at law and in equity, against Borrower, its successors and assigns, and against any and all
Persons claiming the property sold or any part thereof under, by or through Borrower, its
successors or assigns.



(d) Power of Attorney in Respect of the Collateral. Borrower does hereby irrevocably
appoint Lender (which appointment is coupled with an interest), the true and lawful attorney in
fact of Borrower with full power of substitution, for it and in its name to file any notices of
security interests, financing statements and continuations and amendments thereof pursuant to the
Code or federal law, as may be necessary to perfect, or to continue the perfection of Lender’s
security interests in the Collateral. Borrower does hereby irrevocably appoint Lender (which
appointment is coupled with an interest) on the occurrence of an Event of Default and during the
continuation thereof, the true and lawful attorney in fact of Borrower with full power of
substitution, for it and in its name: (a) to ask, demand, collect, receive, receipt for, sue for,
compound and give acquittance for any and all rents, issues, profits, avails, distributions,
income, payment draws and other sums in which a security interest is granted under Section 6 with
full power to settle, adjust or compromise any claim thereunder as fully as if Lender were Borrower
itself; (b) to receive payment of and to endorse the name of Borrower to any items of Collateral
(including checks, drafts and other orders for the payment of money) that come into Lender’s
possession or under Lender’s control; (c) to make all demands, consents and waivers, or take any
other action with respect to, the Collateral; (d) in Lender’s discretion to file any claim or take
any other action or proceedings, either in its own name or in the name of Borrower or otherwise,
which Lender may reasonably deem necessary or appropriate to protect and preserve the right, title
and interest of Lender in and to the Collateral; (e) endorse Borrower’s name on any checks or other
forms of payment or security; (f) sign Borrower’s name on any invoice or bill of lading for any
account or drafts against account debtors; (g) make, settle, and adjust all claims under Borrower’s
insurance policies; (h) settle and adjust disputes and claims about the accounts directly with
account debtors, for amounts and on terms Lender determines reasonable; (i) transfer the Collateral
into the name of Lender or a third party as the Code permits; and (j) to otherwise act with respect
thereto as though Lender were the outright owner of the Collateral.




10. Remedies Cumulative, Etc.



(a) No right or remedy conferred upon or reserved to Lender hereunder or now or hereafter
existing at law or in equity is intended to be exclusive of any other right or remedy, and each and
every such right or remedy shall be cumulative and concurrent, and in addition to every other such
right or remedy, and may be pursued singly, concurrently, successively or otherwise, at the sole
discretion of Lender, and shall not be exhausted by any one exercise thereof but may be exercised
as often as occasion therefor shall occur.



(b) Borrower hereby waives presentment, demand, notice of nonpayment, protest, notice of
protest, notice of dishonor and any and all other notices in connection with any default in the
payment of, or any enforcement of the payment of, all amounts due under this Note. To the extent
permitted by law, Borrower waives the right to any stay of execution and the benefit of all
exemption laws now or hereafter in effect.



(c) Costs and Expenses. Following the occurrence of any Event of Default, Borrower
shall pay upon demand all costs and expenses (including reasonable attorneys’ fees and expenses)
incurred by Lender in the exercise of any of its rights, remedies or powers under this Note and any
amount thereof not paid promptly following demand therefor shall be added to the principal sum
hereunder and shall bear interest at the Default Rate from the date of such demand until paid in
full.



11. Indemnification and Waiver. Whether or not the transactions contemplated hereby
shall be consummated:



(a) General Indemnity. Borrower agrees upon demand to pay or reimburse Lender for all
liabilities, obligations and out-of-pocket expenses, including Lender’s expenses and reasonable
fees and expenses of counsel for Lender from time to time arising in connection with the
enforcement or collection of sums due under this Note, and in connection with any amendment or
modification of such documents or any “work-out” in connection with such documents.
Borrower shall indemnify, reimburse and hold Lender and each of its respective successors, assigns,
agents, attorneys, officers, directors, shareholders, servants, agents and employees (each an
“Indemnified Person”) harmless from and against all liabilities, losses, damages, actions,
suits, demands, claims of any kind and nature (including claims relating to environmental
discharge, cleanup or compliance), all costs and expenses whatsoever to the extent they may be
incurred or suffered by such Indemnified Person in connection therewith (including reasonable
attorneys’ fees and expenses), fines, penalties (and other charges of any applicable governmental
authority), licensing fees relating to any item of Collateral, damage to or loss of use of property
(including consequential or special damages to third parties or damages to Borrower’s property), or
bodily injury to or death of any person (including any agent or employee of Borrower) (each, a
“Claim”), directly or indirectly relating to or arising out of the use of the proceeds of
the Loans or otherwise, the falsity of any representation or warranty of Borrower or Borrower’s
failure to comply with the terms of this Note. The foregoing indemnity shall cover, without
limitation, (i) any Claim in connection with a design or other defect (latent or patent) in any
item of equipment or product included in the Collateral, (ii) any Claim for infringement of any
patent, copyright, trademark or other intellectual property right, (iii) any Claim resulting from
the presence on or under or the escape, seepage, leakage, spillage, discharge, emission or release
of any Hazardous Substances on the premises owned, occupied or leased by Borrower, including any
Claims asserted or arising under any environmental law, or (iv) any Claim for negligence or strict
or absolute liability in tort; provided, however, Borrower shall not indemnify
Lender for any liability incurred by Lender as a direct and sole result of Lender’s gross
negligence or willful misconduct. Such indemnities shall continue in full force and effect,
notwithstanding the expiration or termination of this Note. Upon Lender’s written demand, Borrower
shall assume and diligently conduct, at its sole cost and expense, the entire defense of Lender,
each of its partners, and each of their respective, agents, employees, directors, officers,
shareholders, successors and assigns against any indemnified Claim described in this Section.
Borrower shall not settle or compromise any Claim against or involving Lender without first
obtaining Lender’s written consent thereto, which consent shall not be unreasonably withheld.



12. Notices1.1 . All notices required or permitted under this Note shall be
in writing, reference this Note and be deemed given when: (i) delivered personally; (ii) when sent
and received by confirmed telex, confirmed electronic mail or facsimile; or (iii) seven (7) days
after having been sent by registered or certified air mail, return receipt requested, postage
prepaid with verification of receipt. All communications will be sent to the addresses set forth
below or such other address designated pursuant to this Section Error! Reference source not found.:




NIMS:


Non-Invasive Monitoring Systems, Inc.


4400 Biscayne Blvd


Miami, FL 33137


Attention: Steven B. Mrha, Chief Operating Officer


Electronic Mail: smrha@nims-inc.com


Fax: 305-575-4201




With a copy to:


Non-Invasive Monitoring Systems, Inc.


4400 Biscayne Blvd


Miami, FL 33137


Attention: Joshua Weingard Chief Legal Officer


Electronic Mail: Jweingard@nims-inc.com


Fax: 305-575-6444




Frost Gamma:


Frost Gamma Investments Trust


4400 Biscayne Blvd


Miami, FL 33137


Attention: Steven D. Rubin


Electronic Mail: sr@thefrostgrp.com


Fax: 305-575-6444




With a copy to:


Frost Administrative Services, Inc.


4400 Biscayne Blvd


Miami, FL 33137


Attention: AnneMarie Pascual, Controller


Electronic Mail: Apascual@thefrostgrp.com


Fax: 305-575-6518




Hsu Gamma:


Hsu Gamma Investments, L.P.


4400 Biscayne Blvd


Miami, FL 33137


Attention: Jane H. Hsiao, General Partner


Electronic Mail: jh@thefrostgrp.com


Fax: 305-575-6016



Such notice shall be deemed to be given when received. Any notice of any change in such
address shall also be given in the manner set forth above. Whenever the giving of notice is
required, the giving of such notice may be waived in writing by the party entitled to receive such
notice.



13. Severability. In the event that any provision of this Note is held to be invalid,
illegal or unenforceable in any respect or to any extent, such provision shall nevertheless remain
valid, legal and enforceable in all such other respects and to such extent as may be permissible.
Any such invalidity, illegality or unenforceability shall not affect any other provisions of this
Note, but this Note shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.



14. Successors and Assigns. This Note inures to the benefit of Lender and binds
Borrower, and their respective successors and assigns, and the words “Borrower” and
“Lender” whenever occurring herein shall be deemed and construed to include such respective
successors and assigns; provided, however, neither this Note nor any rights hereunder may be
assigned by Borrower without Lender’s prior written consent, which consent may be granted or
withheld in Lender’s sole discretion.



15. Governing Law. This Note shall be governed by and construed in accordance with
the laws of the State of Florida. Borrower agrees that any action or proceeding against it to
enforce the Note may be commenced in state or federal court in any county in the State of Florida,
and Borrower waives personal service of process and agrees that a summons and complaint commencing
an action or proceeding in any such court shall be properly served and shall confer personal
jurisdiction if served by registered or certified mail in accordance with the notice provisions set
forth herein.




16. Entire Agreement; Construction; Amendments and Waivers.



(a) Entire Agreement. This Note and each of the related loan documents dated as of
the date hereof, taken together, constitute and contain the entire agreement between Borrower and
Lender with respect to the subject matter hereof and supersede any and all prior agreements,
negotiations, correspondence, understandings and communications between the parties, whether
written or oral, with respect to such subject matter. Borrower acknowledges that it is not relying
on any representation or agreement made by Lender or any employee, attorney or agent thereof, other
than the specific agreements set forth in this Note and the related loan documents.



(b) Construction. This Note is the result of negotiations between and has been
reviewed by each of Borrower and Lender as of the date hereof and their respective counsel;
accordingly, this Note shall be deemed to be the product of the parties hereto, and no ambiguity
shall be construed in favor of or against Borrower or Lender. Borrower and Lender agree that they
intend the literal words of this Note and the related loan documents and that no parol evidence
shall be necessary or appropriate to establish Borrower’s or Lender’s actual intentions.



(c) Amendments and Waivers. Any and all amendments, modifications, discharges or
waivers of, or consents to any departures from any provision of this Note or of any of the related
loan documents shall not be effective without the written consent of Lender and Borrower. Any
waiver or consent with respect to any provision of such loan documents shall be effective only in
the specific instance and for the specific purpose for which it was given. No notice to or demand
on Borrower in any case shall entitle Borrower to any other or further notice or demand in similar
or other circumstances. Any amendment, modification, waiver or consent affected in accordance with
this Section shall be binding upon Lender and on Borrower.



17. Reliance by Lender. All covenants, agreements, representations and warranties
made herein by Borrower shall be deemed to be material to and to have been relied upon by Lender,
notwithstanding any investigation by Lender.



18. No Set-Offs by Borrower. All sums payable by Borrower pursuant to this Note or
any of the related loan documents shall be payable without notice or demand and shall be payable in
United States Dollars without set-off or reduction of any manner whatsoever.



19. Survival. All covenants, representations and warranties made in this Note shall
continue in full force and effect so long as any obligations hereunder or commitment to fund remain
outstanding. The obligations of Borrower to indemnify Lender with respect to the expenses,
damages, losses, costs and liabilities described in Section 11 shall survive until all applicable
statute of limitations periods with respect to actions that may be brought against Lender have run.



20. WAIVER OF TRIAL BY JURY. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO TRIAL BY JURY.



[SIGNATURE PAGE FOLLOWS]





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IN WITNESS WHEREOF, Borrower has duly executed this Note and Security Note as of the
day and year first above written.



	 	 	 
	 	 	NON-INVASIVE MONITORING SYSTEMS, INC.
	
 
	 	By: /s/ Adam S. Jackson
	
 
	 	 
	
 
	 	Name: Adam S. Jackson

Title: Chief Financial Officer
	Agreed and Accepted:

	 	

	FROST GAMMA INVESTMENTS TRUST

	 	

	By: /s/ Phillip Frost, M.D.

	 	

	 

	 	

	Name: Phillip Frost, M.D.

Title: Trustee

	 	



	HSU GAMMA INVESTMENTS, L.P.

	 	

	By: /s/ Jane H. Hsiao, Ph.D.

	 	

	 

	 	

	Name: Jane H. Hsiao, Ph.D.

Title: General Partner

	 	









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NOTICE OF BORROWING




     , 2010



FROST GAMMA INVESTMENTS TRUST


4400 Biscayne Boulevard


Suite 1500


Miami, FL 33137



HSU GAMMA INVESTMENTS, L.P.


4400 Biscayne Boulevard


Suite 1500


Miami, FL 33137



RE: NOTICE OF BORROWING



Dear All:



Pursuant to the terms of the Note and Security Agreement (the “Note”) dated as of March 31,
2010 by and between Non-Invasive Monitoring Systems, Inc. (“NIMS”) and the creditors listed above
(collectively, the “Lender”), NIMS hereby requests an advance from the Lender in the amount of
$     .       (       Dollars and        cents). Such aggregate advance shall be funded as follows in
accordance with the terms of the Note:



	 	 	 	 	 
	Frost Gamma Investments Trust (50.00%):
	 	$	—	 
	Hsu Gamma Investments, L.P. (50.00%):
	 	$	—	 






Funding instructions are attached herewith.



This notice constitutes a reaffirmation by the undersigned that the representations and
warranties in the Note are true, correct and accurate in all material respects as if the date
hereof was the date the Note was executed and that it is in compliance with the Note in all
material respects as of the date of this Notice of Borrowing.



Capitalized terms used but not defined herein shall have the meanings ascribed to them in the
Note.



Very Truly Yours,



NON-INVASIVE MONITORING SYSTEMS, INC.



	 	 	 	 	 
	By:
	 	 	—	 
	Name:
	 	 	—	 
	Title:
	 	 	—	 







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