Document:

ex1019.htm

    Exhibit
10.19

    Loan
Agreement with Frost Bank for $241,932.71 due March 4, 2011

     

    
      	
              Principal

              $241,932.71

            	
              Loan
      Date

              03-04-2008

            	
              Maturity

              03-04-2011

            	
              Loan
      No.

              9002

            	
              Call/Coll

               

            	
              Account

              4149431

            	
              Officer

              792

            	
              Intitials

            

    

    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:

                LABWIRE,
      INC, (TIN: 37-1501818)

                14133
      MEMORIAL STE 1

                HOUSTON,
      TX 77079

              	
                Lender:
      THE FROST NATIONAL BANK

                BELLAIRE
      FINANCIAL CENTER

                P.O.
      BOX 1600

                SAN
      ANTONIO, TX 78298

                 

              

      

    

     

    Principal
Amount: $241,932.71 Date of Note: March 4, 2008 PROMISE TO PAY. LABWIRE, INC.
(“Borrower”) promises to pay to THE FROST NATIONAL BANK (“Lender”), or order in
lawful money of the United States of America the principal amount of Two Hundred
Forty-One Thousand Nine Hundred Thirty-two & 71/100 Dollars $241,932.71
together with interest on the unpaid principal balance from March 4, 2008, until
maturity.

     

    PAYMENT, Subject to any
payment changes resulting from changes in the Index, Borrower will pay this loan
in 36 payments of $7,482.43 each payment. Borrower’s first payment is due April
4. 2008, and all subsequent payments are due on the same day of each month after
that. Borrower’s final payment will be due on March 4, 2011 and
will be for all principal and all accrued Interest not yet paid. Payments
Include principal and interest. Unless otherwise agreed or required by
applicable law, payments will be applied first to any unpaid collection costs:
then to any accrued unpaid Interest: then to principal and then to any late
charges. The annual interest rate for this Note is computed on a 365/360 basis;
that is by applying the ratio of the annual 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 unless such calculation
would result in a usurious rate in which case Interest shall be calculated on a
per diem basis of a year of 365 or 366 days as the case may be. Borrower will
pay Lender at Lender’s address shown above or lit 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 index which is Lender’s Prime Rate (the “Index”), This is the rate
Lender charges, or would charge, on 90-day unsecured loans to the most
creditworthy corporate customers. This rate may or may not be the lowest rate
available from Lender at any given time. Lender will tell Borrower the current
Index rate upon Borrower’s 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. The interest rate to be applied prior to maturity to the
unpaid principal balance during this Note will be at a rate of 1.000 percentage
point over the Index. NOTICE: Under no circumstances will the interest rate on
this Note be more than the maximum rate allowed by applicable law. For purposes
of this Note, the “maximum rate allowed by applicable law· means the greater of
(A) the maximum rate of interest permitted under federal or other law applicable
to the indebtedness evidenced by this Note, or (B) the “Weekly Ceiling” as
referred to In Sections 303.002 and 303.003 of the Texas Finance Code. Whenever
Increases occur in the interest rate, Lender at its option, may do one or more
of the following: (A) increase Borrower’s payments to ensure Borrower’s loan
will payoff by its original final maturity date, (B) Increase Borrower’s
payments to cover accruing interest, (C) increase the number of Borrower’s
payments and (D) continue Borrower’s payments at the same amount and increase
Borrower’s final payment.

     

    PREPAYMENT. Borrower may pay
without penalty all or a portion of the amount owed earlier than it is due.
Prepayment In full shall consist of payment of the remaining unpaid principal
balance together with all accrued and unpaid interest and ell other amounts,
costs and expenses for which Borrower is responsible under this Note or any
other agreement with Lender pertaining to this loan, and in no event will
Borrower ever be required to pay any unearned interest. Early payments will not,
unless agreed to by Lender in writing, relieve Borrower of Borrower’s obligation
to continue to make payments under the payment schedule. Rather, early payments
will reduce the principal balance due and may result in Borrower’s making fewer
payments. 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: THE
FROST NATIONAL BANK, P.O. BOX 1600 SAN ANTONIO, TX 78296.

     

    LATE CHARGE. If a payment is
11 days or more late, Borrower will be charged 5.000% of the unpaid portion of
the regularly scheduled payment or $250.00, whichever is less.

     

    POST MATURITY RATE. The Post
Maturity Rate on this Note is the lesser of (A) the maximum rate allowed by law
or (B) 18.000% per annum. Borrower will pay interest on all sums due after final
maturity whether by acceleration or otherwise, at that rate.

     

    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 Borrower’s behalf under this Note 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.

     

    Insolvency. The dissolution or
termination of Borrower’s existence as a going business the Insolvency of
Borrower, the appointment at a

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    

    
      
        
          	
                  Loan
      No: 9002

                	
                  PROMISSORY
      NOTE

                  (Continued)

                	
                  Page
      2

                

        

      

    

     

    receiver
for any party 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, sell-help, repossession or any
other method, by any creditor of Borrower or by any governmental agency against
all 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 sale 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 any Guarantor dies or becomes incompetent or revokes or
disputes the validity 01. or liability under, any guaranty of the indebtedness
evidenced by this Note.

     

    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.

     

    LENDER’S RIGHTS. Upon default,
Lender may declare the entire indebtedness.  Including the unpaid
principal balance under this Note, all accrued unpaid interest, and all other
amounts. costs and expenses for which Borrower is responsible under this Note or
any other agreement with Lender pertaining to this loan, immediately due,
without notice, end then Borrower will pay that amount.

     

    ATTORNEYS’ FEES, EXPENSES.
Lender may hire an attorney to help collect this Note if Borrower does not pay
and Borrower will pay Lender’s reasonable Attorneys’ fees. Borrower also will
pay Lender all other amounts Lender actually incurs as court costs, lawful fees
for tiling, recording, releasing to any public office any instrument securing
this Note; the reasonable cost actually expended for repossessing, storing,
preparing for sale, and selling any security; and fees for noting a lien on or
transferring a certificate of title to any motor vehicle offered as security for
this Note, or premiums or Identifiable charges received In connect/on with the
sale of authorized insurance.

     

    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 Texas without regard to its conflicts
of Law provisions. This Note has been accepted by Lender in the State of
Texas.

     

    CHOICE OF VENUE. It there is a
lawsuit, and if the transaction evidenced by this Note occurred in BEXAR County,
Borrower agrees upon Lender’s request to submit to the jurisdiction of the
courts of BEXAR County, State of Texas.

     

    RIGHT OF SETOFF. To the extent
permit led by applicable law, Lander 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 authorized Lender, to the extent permitted by
applicable law to charge or setoff all sums owing on the Indebtedness against
any and all such accounts.

     

    DISHONORED CHECK CHARGE. In
the event a check offered in full or partial payment on this loan is returned
unpaid. Lender may charge a fee for the purpose of defraying the expense
incident to handling such returned check and Borrower agrees to pay such fee.
The fee shall not exceed the maximum amount permitted under applicable
low.

     

    FINANCIAL INFORMATION.
Borrower agrees to promptly furnish and cause any other person who signs,
guarantees or endorses this Note or any other document executed in connection
with this Note, to furnish such financial Information and statements, including
financial statements in a format acceptable to Lender. lists of assets and
liabilities, agings of receivables and payables, inventory schedules, budgets,
forecasts, tax returns, and other reports with respect to Borrower’s or such
person’s financial condition and business operations as Lender may request from
time to time. This provision shall not alter the obligation to deliver to lender
any other financial statements or reports pursuant to the terms of any other
loan documents executed in connection with this Note,

     

    INSURANCE. Borrower agrees to
maintain insurance of such types. Including public liability Insurance, and in
such amounts as are satisfactory to Lender and to furnish Lender upon request
with a detailed list, in form and substance satisfactory to Lender, of all
insurance then in effect.

     

    FACSIMILE DOCUMENTS AND
SIGNATURES. For purposes of negotiating and finalizing this document, if
this document is transmitted by facsimile machine (“fax”), it shall be treated
for all purposes as an original document. Additionally, the signature of any
party on this document transmitted by way of a fax machine shall be considered
for all purposes as an original signature. Any such faxed document shall be
considered to have the same binding legal effect as an original document. Upon
request of Lender any faxed document shall be re-executed by each signatory
party In an original form.

     

    WAIVER OF
RIGHT TO TRIAL BY JURY. THE UNDERSIGNED HEREBY WAIVES TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT TO ENFORCE THIS AGREEMENT, TO COLLECT
DAMAGES FOR THE BREACH OF THIS AGREEMENT. OR WHICH IN ANY OTHER WAY ARISE OUT
OF, ARE CONNECTED TO OR ARE RELATED TO THIS AGREEMENT OR THE SUBJECT MATTER OF
THIS AGREEMENT. ANY SUCH ACTION SHALL BE TRIED BY THE JUDGE WITHOUT A
JURY,

     

    PAYMENT ADJUSTMENT LANGUAGE.
The monthly payments of principal and interest on this Note have been calculated
on the basis 01 an amortization of the principal balance hereof over a period of
three (3) years from the date hereof at an Interest rate of 7.00% per annum. It
is intended by Lender and Borrower that the monthly payments hereon shall always
be sufficient to pay all accrued interest and some principal on this Note,
Because of possible Index changes from time to time which may cause an Increase
or decrease in the interest rate on this Note, Lender Is given the option, in
its sale discretion, and notwithstanding the last sentence 01 the paragraph
entitled “VARIABLE INTEREST RATE” set forth above, to adjust the monthly payment
amount every year during the term hereof, beginning one (1) year from the date
hereof. The payment amount may be adjusted by Lender to en amount satisfactory,
in Lender’s sale discretion, to pay (i) all accrued, unpaid interest hereof;
(ii) the principal reduction required by Lender during the one 11 year period
following a payment adjustment and (iii) all interest anticipated to accrue on
the Note during the one (1) year period following a payment adjustment. Lender
may choose not to change the payments on this Note in any year throughout the
term hereof.

     

    SUCCESSOR INTERESTS. The terms
of this Note shall be binding upon Borrower and upon Borrower’s heirs, personal
representatives successors and assigns, and shall insure 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

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    

    
      
        
          	
                  Loan
      No: 9002

                	
                  PROMISSORY
      NOTE

                  (Continued)

                	
                  Page
      3

                

        

      

    

     

    ·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 Texas (if 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 lull, be refunded to Borrower. The right to accelerate maturity of sums due
under this Note does not include the right to accelerate any interest which has
not otherwise accrued on the date of such acceleration, and Lender does not
intend to charge or collect any unearned Interest in the event of acceleration.
All sums paid or agreed to be paid to Lender for the use, forbearance or
detention of sums due hereunder shall, to the extent permitted by applicable
law, be amortized, prorated, allocated and spread throughout the lull term of
the loan evidenced by this Note until payment in full so that the rate or amount
of interest on account of the lone evidenced hereby does not exceed the
applicable usury ceiling. Lender may delay or largo 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, notice of dishonor, notice of intent to
accelerate the maturity of this Note, and notice of acceleration of the maturity
of this Note. 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 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 end 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 OFA COMPLETED COPY OF THIS PROMISSORY NOTE.

     

    BORROWER:

    LABWIRE,
INC.

     

    

    By:           //s//
George D
Morris            

    George D.
Morris, President of LABWIRE, INC.ex1020.htm

    

      COMMERCIAL
SECURITY AGREEMENT

       

      
        	
                Principal

              	
                Loan
      Date

              	
                Maturity

              	
                Loan
      No

              	
                Call/Coll

              	
                Account

              	
                Officer

              	
                Initials

              
	
                $300,000.00

              	
                03-04-2008

              	
                02-13-2010

              	
                9001

              	
                500

              	
                4149431

              	
                792

              	 
      

      

      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:

              	
                Labwire,
      Inc. (TIN: 37-1501818)

                14133
      Memorial Ste 1

                Houston,
      Tx 77079

              	 
      	
                Lender:

              	
                The
      Frost National Bank

                Bellaire
      Financial Center

                PO
      Box 1600

                San
      Antonio, Tx 78296

              

      

       

      

       

      THIS COMMERCIAL SECURITY
AGREEMENT dated February 13, 2007, is made and executed between Ben LAB
WIRE, INC. (“Grantor”) and THE FROST NATIONAL BANK (“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
Accounts

       

      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, 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 ell
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.

       

      CROSS·COLLATERALIZATION. In
addition to the Note, this Agreement secures all obligations, debts and
liabilities, plus interest thereon, of Grantor to Lender, or any one or more of
them, as well as all claims by Lender against Grantor or anyone or more of them,
whether now existing or hereafter arising, whether related or unrelated to the
purpose of the Note, whether voluntary or otherwise, whether due or not due,
direct or indirect, determined or undetermined, absolute or contingent,
Liquidated or unliquidated, whether Grantor may be liable individually or
jointly with others, whether obligated as guarantor, surety, accommodation party
or otherwise.

       

      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.

       

      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 II 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.

      
        
           

        

        
           

          
            

          

        

        
           

          
            
              	
                      Loan
      No: 9001

                    	
                      COMMERCIAL
      SECURITY AGREEMENT

                      
                        (Continued)

                      

                    	
                      Page
      2 of 6

                    

            

            

          

        

      

      

       

       

      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 end manner of preparation and
execution, and all persons appearing to be obligated on the Collateral hove
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 e 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 reel 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, Grantor shall not
remove the Collateral from its existing location 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. Grantor shell 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,

       

      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 official 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 end 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 sale opinion. In any contest Grantor shall defend itself and Lender and
shell 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 end 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 on 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 broach 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 end maintain all risks Insurance,
including without limitation fire, theft end 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 it Grantor at any time fails
to obtain or maintain any insurance as required under this Agreement, Lender may
(but shell 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.

      
        
           

        

        
           

          
            

          

        

        
           

          
            
              	
                      Loan
      No: 9001

                    	
                      COMMERCIAL
      SECURITY AGREEMENT

                      
                        (Continued)

                      

                    	
                      Page 3
      of 6

                    

            

            

          

        

      

       

      

       

      All
proceeds of any insurance on the Collateral, including accrued proceeds thereon,
shall be held by Lender as part of the Collateral. It 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.

       

      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 (151 days
before the premium due date, amounts at least equal to the Insurance premiums to
be paid. If fifteen (15) days before payment is duo, 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, 8S appl1cable, 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. If Grantor changes Grantor’s name or
address, or the name or address of any person granting a security interest under
this Agreement changes. Grantor will promptly notify the Lender of such
change.

       

      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
right to collect the accounts and to notify account debtors to make payments
directly to Lender for application to the Indebtedness. II Lander 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 sale 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 paid by Lender for such
purposes will then bear Interest at the Note rate from the date 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. Should Borrower or any Grantor default 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 Grantor’s property or Grantor’s or any Grantor’s ability to repay the
Indebtedness or 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.

       

      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

      
        
           

        

        
           

          
            

          

        

        
           

          
            
              	
                      Loan
      No: 9001

                    	
                      COMMERCIAL
      SECURITY AGREEMENT

                      
                        (Continued)

                      

                    	
                      Page 4
      of 6

                    

            

            

          

        

      

       

      

       

      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 Landor 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.

       

      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 B secured party under the Nevada
Uniform Commercial Code. In addition and without limitation, Lender may exercise
anyone 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
end 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
shell 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 sale or any other disposition of the Collateral la 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.

       

      Appoint 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 B 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, chases 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 e 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 en 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.

       

      WAIVER OF RIGHT TO TRIAL BY
JURY. THE UNDERSIGNED HEREBY WAIVES TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT TO ENFORCE THIS AGREEMI:NT, TO COLLECT
DAMAGES FOR THE BREACH OF THIS AGREEMENT, OR WHICH IN ANY OTHER WAY ARISE OUT
OF, ARE CONNECTED TO OR ARE RELATED TO THIS AGREEMENT OR THE SUBJECT MANNER OF
THIS AGREEMENT. ANY SUCH ACTION SHALL BE TRIED BY THE JUDGE WITHOUT A
JURY.

       

      FACSIMILE DOCUMENTS AND
SIGNATURES. For purposes of negotiating and finalizing this document, it
this document is transmitted by facsimile machine (“fax”). It shall be treated
for all purposes as an original document. Additionally, the signature of any
party on this document transmitted by way of a fax machine shall be considered
for all purposes as an original signature. Any such faxed document shall be
considered to have the same binding legal effect as an original document. At the
request of any party, any faxed document shall be re-executed by each signatory
party in an original form.

       

      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.

       

      
        
           

        

        
           

          
            

          

        

        
           

          
            
              	
                      Loan
      No: 9001

                    	
                      COMMERCIAL
      SECURITY AGREEMENT

                      
                        (Continued)

                      

                    	
                      Page
      5 of 6

                    

            

            

          

        

      

      

       

       

      Attorneys’ Fees; Expenses.
Grantor agrees to pay upon demand all of Lender’s costs and expenses, including
Lender’s reasonable attorneys’ fees and Lander’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
Lender’s 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.

       

      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. With respect to
procedural matters related to the perfection and enforcement of Lender’s rights
against the Collateral. This Agreement will be governed by federal law
applicable to Lender and to tile extent not preempted by federal law the laws of
the State of Nevada. In all other respects, 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 Texas without regard to its conflicts of law
provisions. However, if there ever is a question about whether any provision of
this Agreement is valid or enforceable, the provision that is questioned will be
governed by whichever state or federal law would find the provision to be valid
and enforceable. The loan transaction that is evidenced by the Note and this
Agreement has been applied for, considered, approved and made, and all necessary
loan documents have been accepted by Lender in the State of Texas.

       

      Choice of Venue. If there Is a
lawsuit, and if the transaction evidenced by this Agreement occurred in BEXAR
County, Grantor agrees upon

       

      Lender’s
request to submit to the jurisdiction of the courts of BEXAR County, State of
Texas. (Initial
Here                                                                                                                                           )

       

      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 sale 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 tele facsimile
(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 formal 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.

       

      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, end 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 LABWIRE, INC. and includes all co-signers end co-makers signing the Note
and all their successors and assigns.

       

      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 esq., the Resource Conservation and Recovery Act, 42
U.S,C. Section 6901, et esq., or other applicable state or federal laws, rules,
or regulations adopted pursuant thereto.

       

      

      
        
           

        

        
           

          
            

          

        

        
           

          
            
              	
                      Loan
      No: 9001

                    	
                      COMMERCIAL
      SECURITY AGREEMENT

                      
                        (Continued)

                      

                    	
                      Page
      6 of 6

                    

            

            

          

        

      

       

      

       

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

       

      Grantor.
The word “Grantor” means LABWIRE, INC.

       

      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” lire 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 traction 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. Specifically, without
limitation, Indebtedness includes all amounts that may be indirectly secured by
the Cross-Collateralization provision of this Agreement.

       

      Lender. The word “Lender”
means THE FROST NATIONAL BANK, its successors and assigns.

       

      Note. The word” Note” means
the Note executed by LABWIRE, INC. in the principal amount of $300,000.00 dated
February 13, 2007 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 FEBRUARY 13, 2007.

       

      GRANTOR:

       

      

       

      LABWIRE,
INC.

       

      

       

      By:    //s//
Dexter
Morris                             

       

      George D.
Morris, President of LABWIRE, INC.

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