Document:

Exhibit 10.40

    Exhibit
      10.40

     

    SECURITY
      AGREEMENT

    

    SECURITY
      AGREEMENT (this “Agreement”),
      dated
      as of March 13, 2006, by and among DNAPrint Genomics, Inc., a Utah corporation
      (“Company”),
      and
      Dutchess Private Equities Fund, LP, a Delaware Limited partnership, as the
      secured parties signatory hereto and their respective endorsees, transferees
      and
      assigns (collectively, the “Secured
      Party”).
      

    

    W
      I T N E
      S S E T H:

    

    WHEREAS,
      pursuant to Note Agreement, dated the date hereof between Company and the
      Secured Party (the “Note
      Agreement”),
      and
      the prior Note between the Company and the Holder Note Number October 2006
      101
      and the Notes between the Company and Dutchess Private Equities Fund, II, LP,
      number August 2006 101 and December 2006 101, the Company has agreed to issue
      to
      the Secured Party and the Secured Party has agreed to purchase from Company
      certain of Company’s 0% Secured Notes, due one year from the date of issue (the
“Note”)

    

    WHEREAS,
      in order to induce the Secured Party to purchase the Notes, the Company has
      agreed to execute and deliver to the Secured Party this Agreement for the
      benefit of the Secured Party and to grant to it a first priority security
      interest in certain property of Company to secure the prompt payment,
      performance and discharge in full of all of Company’s obligations under the
      Notes.

    

    NOW,
      THEREFORE, in consideration of the agreements herein contained and for other
      good and valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, the parties hereto hereby agree as follows:

    

    1.  Certain
      Definitions.
      As used
      in this Agreement, the following terms shall have the meanings set forth in
      this
      Section 1. Terms used but not otherwise defined in this Agreement that are
      defined in Article 9 of the UCC (such as “general
      intangibles”
and
      “proceeds”)
      shall
      have the respective meanings given such terms in Article 9 of the
      UCC.

    (a)  “Collateral”
means
      the collateral in which the Secured Party is granted a security interest by
      this
      Agreement and which shall include the following, whether presently owned or
      existing or hereafter acquired or coming into existence, and all additions
      and
      accessions thereto and all substitutions and replacements thereof, and all
      proceeds, products and accounts thereof, including, without limitation, all
      proceeds from the sale or transfer of the Collateral and of insurance covering
      the same and of any tort claims in connection therewith:

    (i)  All
      Goods
      of the Company, including, without limitations, all machinery, equipment,
      computers, motor vehicles, trucks, tanks, boats, ships, appliances, furniture,
      special and general tools, fixtures, test and quality control devices and other
      equipment of every kind and nature and wherever situated, together with all
      documents of title and documents representing the same, all additions and
      accessions thereto, replacements therefor, all parts therefor, and all
      substitutes for any of the foregoing and all other items used and useful in
      connection with the Company’s businesses and all improvements thereto
      (collectively, the “Equipment”);
      and

     

    (ii)  All
      Inventory of the Company; and

     

    (iii)  All
      of
      the Company’s contract rights and general intangibles, including, without
      limitation, all partnership interests, stock or other securities, licenses,
      distribution and other agreements, computer software development rights, leases,
      franchises, customer lists, quality control procedures, grants and rights,
      goodwill, trademarks, service marks, trade styles, trade names, patents, patent
      applications, copyrights, deposit accounts, and income tax refunds
      (collectively, the “General
      Intangibles”);
      and

     

    (iv)  All
      Receivables of the Company including all insurance proceeds, and rights to
      refunds or indemnification whatsoever owing, together with all instruments,
      all
      documents of title representing any of the foregoing, all rights in any
      merchandising, goods, equipment, motor vehicles and trucks which any of the
      same
      may represent, and all right, title, security and guaranties with respect to
      each Receivable, including any right of stoppage in transit; and

     

    (v)  All
      of
      the Company’s documents, instruments and chattel paper, files, records, books of
      account, business papers, computer programs and the products and proceeds of
      all
      of the foregoing Collateral set forth in clauses (i)-(iv) above.

    

     

    (b)  “Company”
shall
      mean, collectively, Company and all of the subsidiaries of Company, a list
      of
      which is contained in Schedule
      A,
      attached hereto.

     

    (c)  “Obligations”
means
      all of the Company’s obligations under this Agreement and the Notes, in each
      case, whether now or hereafter existing, voluntary or involuntary, direct or
      indirect, absolute or contingent, liquidated or unliquidated, whether or not
      jointly owed with others, and whether or not from time to time decreased or
      extinguished and later decreased, created or incurred, and all or any portion
      of
      such obligations or liabilities that are paid, to the extent all or any part
      of
      such payment is avoided or recovered directly or indirectly from the Secured
      Party as a preference, fraudulent transfer or otherwise as such obligations
      may
      be amended, supplemented, converted, extended or modified from time to
      time.

     

    (d)  “UCC”
means
      the Uniform Commercial Code, as currently in effect in the Commonwealth of
      Massachusetts.

     

    2.  Grant
      of Security Interest.
      As an
      inducement for the Secured Party to purchase the Notes and to secure the
      complete and timely payment, performance and discharge in full, as the case
      may
      be, of all of the Obligations, the Company hereby, unconditionally and
      irrevocably, pledges, grants and hypothecates to the Secured Party, a continuing
      security interest in, a continuing first lien upon, an unqualified right to
      possession and disposition of and a right of set-off against, in each case
      to
      the fullest extent permitted by law, all of the Company’s right, title and
      interest of whatsoever kind and nature in and to the Collateral (the
“Security
      Interest”).

     

    3.  Representations,
      Warranties, Covenants and Agreements of the Company.
      The
      Company represents and warrants to, and covenants and agrees with, the Secured
      Party as follows: 

     

    (a)  The
      Company has the requisite corporate power and authority to enter into this
      Agreement and otherwise to carry out its obligations thereunder. The execution,
      delivery and performance by the Company of this Agreement and the filings
      contemplated therein have been duly authorized by all necessary action on the
      part of the Company and no further action is required by the Company. This
      Agreement constitutes a legal, valid and binding obligation of the Company
      enforceable in accordance with its terms, except as enforceability may be
      limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
      affecting the enforcement of creditor’s rights generally.

     

    (b)  The
      Company represents and warrants that it has no place of business or offices
      where its respective books of account and records are kept (other than
      temporarily at the offices of its attorneys or accountants) or places where
      Collateral is stored or located, except as set forth on Schedule
      A
      attached
      hereto;

     

    (c)  The
      Company is the sole owner of the Collateral (except for non-exclusive licenses
      granted by the Company in the ordinary course of business), free and clear
      of
      any liens, security interests, encumbrances, rights or claims, and is fully
      authorized to grant the Security Interest in and to pledge the Collateral.
      There
      is not on file in any governmental or regulatory authority, agency or recording
      office an effective financing statement, security agreement, license or transfer
      or any notice of any of the foregoing (other than those that have been filed
      in
      favor of the Secured Party pursuant to this Agreement) covering or affecting
      any
      of the Collateral. So long as this Agreement shall be in effect, the Company
      shall not execute and shall not knowingly permit to be on file in any such
      office or agency any such financing statement or other document or instrument
      (except to the extent filed or recorded in favor of the Secured Party pursuant
      to the terms of this Agreement).

     

    (d)  No
      part
      of the Collateral has been judged invalid or unenforceable. No written claim
      has
      been received that any Collateral or the Company’s use of any Collateral
      violates the rights of any third party. There has been no adverse decision
      to
      the Company’s claim of ownership rights in or exclusive rights to use the
      Collateral in any jurisdiction or to the Company’s right to keep and maintain
      such Collateral in full force and effect, and there is no proceeding involving
      said rights pending or, to the best knowledge of the Company, threatened before
      any court, judicial body, administrative or regulatory agency, arbitrator or
      other governmental authority. 

     

    (e)  The
      Company shall at all times maintain its books of account and records relating
      to
      the Collateral at its principal place of business and its Collateral at the
      locations set forth on Schedule
      A
      attached
      hereto and may not relocate such books of account and records or tangible
      Collateral unless it delivers to the Secured Party at least 30 days prior to
      such relocation (i) written notice of such relocation and the new location
      thereof (which must be within the United States) and (ii) evidence that
      appropriate financing statements and other necessary documents have been filed
      and recorded and other steps have been taken to perfect the Security Interest
      to
      create in favor of the Secured Party valid, perfected and continuing first
      priority liens in the Collateral. 

     

    (f)  This
      Agreement creates in favor of the Secured Party a valid security interest in
      the
      Collateral securing the payment and performance of the Obligations and, upon
      making the filings described in the immediately following sentence, a perfected
      first priority security interest in such Collateral. Except for the filing
      of
      financing statements on Form-1 under the UCC with the jurisdictions indicated
      on
Schedule
      B,
      attached hereto, no authorization or approval of or filing with or notice to
      any
      governmental authority or regulatory body is required either (i) for the grant
      by the Company of, or the effectiveness of, the Security Interest granted hereby
      or for the execution, delivery and performance of this Agreement by the Company
      or (ii) for the perfection of or exercise by the Secured Party of its rights
      and
      remedies hereunder. 

     

    (g)  On
      the
      date of execution of this Agreement, the Company will deliver to the Secured
      Party one or more executed UCC financing statements on Form-1 with respect
      to
      the Security Interest for filing with the jurisdictions indicated on
Schedule
      B,
      attached hereto and in such other jurisdictions as may be requested by the
      Secured Party.

     

    (h)  The
      execution, delivery and performance of this Agreement does not conflict with
      or
      cause a breach or default, or an event that with or without the passage of
      time
      or notice, shall constitute a breach or default, under any agreement to which
      the Company is a party or by which the Company is bound. No consent (including,
      without limitation, from stock holders or creditors of the Company) is required
      for the Company to enter into and perform its obligations
      hereunder.

     

    (i)  The
      Company shall at all times maintain the liens and Security Interest provided
      for
      hereunder as valid and perfected first priority liens and security interests
      in
      the Collateral in favor of the Secured Party until this Agreement and the
      Security Interest hereunder shall terminate pursuant to Section 11. The Company
      hereby agrees to defend the same against any and all persons. The Company shall
      safeguard and protect all Collateral for the account of the Secured Party.
      At
      the request of the Secured Party, the Company will sign and deliver to the
      Secured Party at any time or from time to time one or more financing statements
      pursuant to the UCC (or any other applicable statute) in form reasonably
      satisfactory to the Secured Party and will pay the cost of filing the same
      in
      all public offices wherever filing is, or is deemed by the Secured Party to
      be,
      necessary or desirable to effect the rights and obligations provided for herein.
      Without limiting the generality of the foregoing, the Company shall pay all
      fees, taxes and other amounts necessary to maintain the Collateral and the
      Security Interest hereunder, and the Company shall obtain and furnish to the
      Secured Party from time to time, upon demand, such releases and/or
      subordinations of claims and liens which may be required to maintain the
      priority of the Security Interest hereunder. 

     

    (j)  The
      Company will not transfer, pledge, hypothecate, encumber, license (except for
      non-exclusive licenses granted by the Company in the ordinary course of
      business), sell or otherwise dispose of any of the Collateral without the prior
      written consent of the Secured Party.

     

    (k)  The
      Company shall keep and preserve its Equipment, Inventory and other tangible
      Collateral in good condition, repair and order and shall not operate or locate
      any such Collateral (or cause to be operated or located) in any area excluded
      from insurance coverage.

     

    (l)  The
      Company shall, within ten (10) days of obtaining knowledge thereof, advise
      the
      Secured Party promptly, in sufficient detail, of any substantial change in
      the
      Collateral, and of the occurrence of any event which would have a material
      adverse effect on the value of the Collateral or on the Secured Party’s security
      interest therein.

     

    (m)  The
      Company shall promptly execute and deliver to the Secured Party such further
      deeds, mortgages, assignments, security agreements, financing statements or
      other instruments, documents, certificates and assurances and take such further
      action as the Secured Party may from time to time request and may in its sole
      discretion deem necessary to perfect, protect or enforce its security interest
      in the Collateral including, without limitation, the execution and delivery
      of a
      separate security agreement with respect to the Company’s intellectual property
      (“Intellectual
      Property Security Agreement”)
      in
      which the Secured Party has been granted a security interest hereunder,
      substantially in a form acceptable to the Secured Party, which Intellectual
      Property Security Agreement, other than as stated therein, shall be subject
      to
      all of the terms and conditions hereof.

     

    (n)  The
      Company shall permit the Secured Party and its representatives and agents to
      inspect the Collateral at any time, and to make copies of records pertaining
      to
      the Collateral as may be requested by the Secured Party from time to
      time.

     

    (o)  The
      Company will take all steps reasonably necessary to diligently pursue and seek
      to preserve, enforce and collect any rights, claims, causes of action and
      accounts receivable in respect of the Collateral.

     

    (p)  The
      Company shall promptly notify the Secured Party in sufficient detail upon
      becoming aware of any attachment, garnishment, execution or other legal process
      levied against any Collateral and of any other information received by the
      Company that may materially affect the value of the Collateral, the Security
      Interest or the rights and remedies of the Secured Party hereunder.

     

    (q)  All
      information heretofore, herein or hereafter supplied to the Secured Party by
      or
      on behalf of the Company with respect to the Collateral is accurate and complete
      in all material respects as of the date furnished.

     

    (r)  Schedule
      A
      attached
      hereto contains a list of all of the subsidiaries of Company.

    

     

    4.  Defaults.
      The
      following events shall be “Events
      of Default”:

     

    (a)  The
      occurrence of an Event of Default (as defined in the Transaction Documents)
      under the Transaction Documents, or breach of the terms of the Transaction
      Documents.

     

    (b)  Any
      representation or warranty of the Company in this Agreement or in the
      Intellectual Property Security Agreement shall prove to have been incorrect
      in
      any material respect when made; 

     

    (c)  The
      failure by the Company to observe or perform any of its obligations hereunder
      or
      in the Intellectual Property Security Agreement for ten (10) days after receipt
      by the Company of notice of such failure from the Secured Party.

     

    5.  Duty
      To Hold In Trust.
      Upon
      the occurrence of any Event of Default and at any time thereafter, the Company
      shall, upon receipt by it of any revenue, income or other sums subject to the
      Security Interest, whether payable pursuant to the Notes or otherwise, or of
      any
      check, draft, note, trade acceptance or other instrument evidencing an
      obligation to pay any such sum, hold the same in trust for the Secured Party
      and
      shall forthwith endorse and transfer any such sums or instruments, or both,
      to
      the Secured Party for application to the satisfaction of the
      Obligations.

     

    6.  Rights
      and Remedies Upon Default.
      Upon
      occurrence of any Event of Default and at any time thereafter, the Secured
      Party
      shall have the right to exercise all of the remedies conferred hereunder and
      under the Notes, and the Secured Party shall have all the rights and remedies
      of
      a secured party under the UCC and/or any other applicable law (including the
      Uniform Commercial Code of any jurisdiction in which any Collateral is then
      located). Without limitation, the Secured Party shall have the following rights
      and powers:

     

    (a)  The
      Secured Party shall have the right to take possession of the Collateral and,
      for
      that purpose, enter, with the aid and assistance of any person, any premises
      where the Collateral, or any part thereof, is or may be placed and remove the
      same, and the Company shall assemble the Collateral and make it available to
      the
      Secured Party at places which the Secured Party shall reasonably select, whether
      at the Company’s premises or elsewhere, and make available to the Secured Party,
      without rent, all of the Company’s respective premises and facilities for the
      purpose of the Secured Party taking possession of, removing or putting the
      Collateral in saleable or disposable form.

     

    (b)  The
      Secured Party shall have the right to operate the business of the Company using
      the Collateral and shall have the right to assign, sell, lease or otherwise
      dispose of and deliver all or any part of the Collateral, at public or private
      sale or otherwise, either with or without special conditions or stipulations,
      for cash or on credit or for future delivery, in such parcel or parcels and
      at
      such time or times and at such place or places, and upon such terms and
      conditions as the Secured Party may deem commercially reasonable, all without
      (except as shall be required by applicable statute and cannot be waived)
      advertisement or demand upon or notice to the Company or right of redemption
      of
      the Company, which are hereby expressly waived. Upon each such sale, lease,
      assignment or other transfer of Collateral, the Secured Party may, unless
      prohibited by applicable law which cannot be waived, purchase all or any part
      of
      the Collateral being sold, free from and discharged of all trusts, claims,
      right
      of redemption and equities of the Company, which are hereby waived and
      released.

     

    7.  Applications
      of Proceeds.
      The
      proceeds of any such sale, lease or other disposition of the Collateral
      hereunder shall be applied first, to the expenses of retaking, holding, storing,
      processing and preparing for sale, selling, and the like (including, without
      limitation, any taxes, fees and other costs incurred in connection therewith)
      of
      the Collateral, to the reasonable attorneys’ fees and expenses incurred by the
      Secured Party in enforcing its rights hereunder and in connection with
      collecting, storing and disposing of the Collateral, and then to satisfaction
      of
      the Obligations, and to the payment of any other amounts required by applicable
      law, after which the Secured Party shall pay to the Company any surplus
      proceeds. If, upon the sale, license or other disposition of the Collateral,
      the
      proceeds thereof are insufficient to pay all amounts to which the Secured Party
      is legally entitled, the Company will be liable for the deficiency, together
      with interest thereon, at the rate of 18% per annum (the “Default
      Rate”),
      and
      the reasonable fees of any attorneys employed by the Secured Party to collect
      such deficiency. To the extent permitted by applicable law, the Company waives
      all claims, damages and demands against the Secured Party arising out of the
      repossession, removal, retention or sale of the Collateral, unless due to the
      gross negligence or willful misconduct of the Secured Party.

     

    8.  Costs
      and Expenses.The
      Company agrees to pay all out-of-pocket fees, costs and expenses incurred in
      connection with any filing required hereunder, including without limitation,
      any
      financing statements, continuation statements, partial releases and/or
      termination statements related thereto or any expenses of any searches
      reasonably required by the Secured Party. The Company shall also pay all other
      claims and charges which in the reasonable opinion of the Secured Party might
      prejudice, imperil or otherwise affect the Collateral or the Security Interest
      therein. The Company will also, upon demand, pay to the Secured Party the amount
      of any and all reasonable expenses, including the reasonable fees and expenses
      of its counsel and of any experts and agents, which the Secured Party may incur
      in connection with (i) the enforcement of this Agreement, (ii) the custody
      or
      preservation of, or the sale of, collection from, or other realization upon,
      any
      of the Collateral, or (iii) the exercise or enforcement of any of the rights
      of
      the Secured Party under the Notes. Until so paid, any fees payable hereunder
      shall be added to the principal amount of the Notes and shall bear interest
      at
      the Default Rate.

     

    9.  Responsibility
      for Collateral.
      The
      Company assumes all liabilities and responsibility in connection with all
      Collateral, and the obligations of the Company hereunder or under the
      Transaction Documents shall in no way be affected or diminished by reason of
      the
      loss, destruction, damage or theft of any of the Collateral or its
      unavailability for any reason. 

     

    10.  Security
      Interest Absolute.
      All
      rights of the Secured Party and all Obligations of the Company hereunder, shall
      be absolute and unconditional, irrespective of: (a) any lack of validity or
      enforceability of this Agreement, the Notes, or any agreement entered into
      in
      connection with the foregoing, or any portion hereof or thereof; (b) any change
      in the time, manner or place of payment or performance of, or in any other
      term
      of, all or any of the Obligations, or any other amendment or waiver of or any
      consent to any departure from the Notes, or any other agreement entered into
      in
      connection with the foregoing; (c) any exchange, release or nonperfection of
      any
      of the Collateral, or any release or amendment or waiver of or consent to
      departure from any other collateral for, or any guaranty, or any other security,
      for all or any of the Obligations; (d) any action by the Secured Party to
      obtain, adjust, settle and cancel in its sole discretion any insurance claims
      or
      matters made or arising in connection with the Collateral; or (e) any other
      circumstance which might otherwise constitute any legal or equitable defense
      available to the Company, or a discharge of all or any part of the Security
      Interest granted hereby. Until the Obligations shall have been paid and
      performed in full, the rights of the Secured Party shall continue even if the
      Obligations are barred for any reason, including, without limitation, the
      running of the statute of limitations or bankruptcy. The Company expressly
      waives presentment, protest, notice of protest, demand, notice of nonpayment
      and
      demand for performance. In the event that at any time any transfer of any
      Collateral or any payment received by the Secured Party hereunder shall be
      deemed by final order of a court of competent jurisdiction to have been a
      voidable preference or fraudulent conveyance under the bankruptcy or insolvency
      laws of the United States, or shall be deemed to be otherwise due to any party
      other than the Secured Party, then, in any such event, the Company’s obligations
      hereunder shall survive cancellation of this Agreement, and shall not be
      discharged or satisfied by any prior payment thereof and/or cancellation of
      this
      Agreement, but shall remain a valid and binding obligation enforceable in
      accordance with the terms and provisions hereof. The Company waives all right
      to
      require the Secured Party to proceed against any other person or to apply any
      Collateral which the Secured Party may hold at any time, or to marshal assets,
      or to pursue any other remedy. The Company waives any defense arising by reason
      of the application of the statute of limitations to any obligation secured
      hereby.

     

    11.  Term
      of Agreement.
      This
      Agreement and the Security Interest shall terminate on the date on which all
      payments under the Notes have been made in full and all other Obligations of
      the
      Company have been paid or discharged. Upon such termination, the Secured Party,
      at the request and at the expense of the Company, will join in executing any
      termination statement with respect to any financing statement executed and
      filed
      pursuant to this Agreement. 

     

    12.  Power
      of Attorney; Further Assurances.

     

    (a)  The
      Company authorizes the Secured Party, and does hereby make, constitute and
      appoint it, and its respective officers, agents, successors or assigns with
      full
      power of substitution, as the Company’s true and lawful attorney-in-fact, with
      power, in its own name or in the name of the Company, to, after the occurrence
      and during the continuance of an Event of Default (i) endorse any notes, checks,
      drafts, money orders, or other instruments of payment (including payments
      payable under or in respect of any policy of insurance) in respect of the
      Collateral that may come into possession of the Secured Party; (ii) to sign
      and
      endorse any UCC financing statement or any invoice, freight or express bill,
      bill of lading, storage or warehouse receipts, drafts against debtors,
      assignments, verifications and notices in connection with accounts, and other
      documents relating to the Collateral; (iii) to pay or discharge taxes, liens,
      security interests or other encumbrances at any time levied or placed on or
      threatened against the Collateral; (iv) to demand, collect, receipt for,
      compromise, settle and sue for monies due in respect of the Collateral; and
      (v)
      generally, to do, at the option of the Secured Party, and at the Company’s
      expense, at any time, or from time to time, all acts and things which the
      Secured Party deems necessary to protect, preserve and realize upon the
      Collateral and the Security Interest granted therein in order to effect the
      intent of this Agreement, and the Notes, all as fully and effectually as the
      Company might or could do; and the Company hereby ratifies all that said
      attorney shall lawfully do or cause to be done by virtue hereof. This power
      of
      attorney is coupled with an interest and shall be irrevocable for the term
      of
      this Agreement and thereafter as long as any of the Obligations shall be
      outstanding.

     

    (b)  On
      a
      continuing basis, the Company will make, execute, acknowledge, deliver, file
      and
      record, as the case may be, in the proper filing and recording places in any
      jurisdiction, including, without limitation, the jurisdictions indicated on
      Schedule
      B,
      attached hereto, all such instruments, and take all such action as may
      reasonably be deemed necessary or advisable, or as reasonably requested by
      the
      Secured Party, to perfect the Security Interest granted hereunder and otherwise
      to carry out the intent and purposes of this Agreement, or for assuring and
      confirming to the Secured Party the grant or perfection of a security interest
      in all the Collateral.

     

    (c)  The
      Company hereby irrevocably appoints the Secured Party as the Company’s
      attorney-in-fact, with full authority in the place and stead of the Company
      and
      in the name of the Company, from time to time in the Secured Party’s discretion,
      to take any action and to execute any instrument which the Secured Party may
      deem necessary or advisable to accomplish the purposes of this Agreement,
      including the filing, in its sole discretion, of one or more financing or
      continuation statements and amendments thereto, relative to any of the
      Collateral without the signature of the Company where permitted by
      law.

     

    13.  Notices.
      All
      notices, requests, demands and other communications hereunder shall be in
      writing, with copies to all the other parties hereto, and shall be deemed to
      have been duly given when (i) if delivered by hand, upon receipt, (ii) if sent
      by facsimile, upon receipt of proof of sending thereof, (iii) if sent by
      nationally recognized overnight delivery service (receipt requested), the next
      business day or (iv) if mailed by first-class registered or certified mail,
      return receipt requested, postage prepaid, four days after posting in the U.S.
      mails, in each case if delivered to the following addresses:

     

    If
      to the
      Company:  Attn:
      Richard Gabriel

    DNAPrint
      Genomics

    900
      Cocoanut Avenue

    Sarasota,
      FL 34236

    Telephone:
      (941) 366-3400

    Fax:
      (210) 249-4130

    

    If
      to the
      Secured Party: Dutchess
      Capital Management, LLC 

    Douglas
      Leighton

    50
      Commonwealth Ave, Suite 2

    Boston,
      MA 02116

    (617)
      301-4700

    (617)
      249-0947

    

    14.  Other
      Security.
      To the
      extent that the Obligations are now or hereafter secured by property other
      than
      the Collateral or by the guarantee, endorsement or property of any other person,
      firm, corporation or other entity, then the Secured Party shall have the right,
      in its sole discretion, to pursue, relinquish, subordinate, modify or take
      any
      other action with respect thereto, without in any way modifying or affecting
      any
      of the Secured Party’s rights and remedies hereunder.

     

    15.  Miscellaneous.

     

    (a)  No
      course
      of dealing between the Company and the Secured Party, nor any failure to
      exercise, nor any delay in exercising, on the part of the Secured Party, any
      right, power or privilege hereunder or under the Notes shall operate as a waiver
      thereof; nor shall any single or partial exercise of any right, power or
      privilege hereunder or thereunder preclude any other or further exercise thereof
      or the exercise of any other right, power or privilege.

     

    (b)  All
      of
      the rights and remedies of the Secured Party with respect to the Collateral,
      whether established hereby or by the Notes or by any other agreements,
      instruments or documents or by law shall be cumulative and may be exercised
      singly or concurrently.

     

    (c)  This
      Agreement constitutes the entire agreement of the parties with respect to the
      subject matter hereof and is intended to supersede all prior negotiations,
      understandings and agreements with respect thereto. Except as specifically
      set
      forth in this Agreement, no provision of this Agreement may be modified or
      amended except by a written agreement specifically referring to this Agreement
      and signed by the parties hereto.

     

    (d)  In
      the
      event that any provision of this Agreement is held to be invalid, prohibited
      or
      unenforceable in any jurisdiction for any reason, unless such provision is
      narrowed by judicial construction, this Agreement shall, as to such
      jurisdiction, be construed as if such invalid, prohibited or unenforceable
      provision had been more narrowly drawn so as not to be invalid, prohibited
      or
      unenforceable. If, notwithstanding the foregoing, any provision of this
      Agreement is held to be invalid, prohibited or unenforceable in any
      jurisdiction, such provision, as to such jurisdiction, shall be ineffective
      to
      the extent of such invalidity, prohibition or unenforceability without
      invalidating the remaining portion of such provision or the other provisions
      of
      this Agreement and without affecting the validity or enforceability of such
      provision or the other provisions of this Agreement in any other
      jurisdiction.

     

    (e)  No
      waiver
      of any breach or default or any right under this Agreement shall be considered
      valid unless in writing and signed by the party giving such waiver, and no
      such
      waiver shall be deemed a waiver of any subsequent breach or default or right,
      whether of the same or similar nature or otherwise.

     

    (f)  This
      Agreement shall be binding upon and inure to the benefit of each party hereto
      and its successors and assigns.

     

    (g)  Each
      party shall take such further action and execute and deliver such further
      documents as may be necessary or appropriate in order to carry out the
      provisions and purposes of this Agreement.

     

    (h)  The
      validity, terms, performance and enforcement of this Note shall be governed
      and
      construed by the provisions hereof and in accordance with the laws of the
      Commonwealth of Massachusetts applicable to agreements that are negotiated,
      executed, delivered and performed solely in the
      Commonwealth of Massachusetts.

     

    (i)  All
      disputes arising under this agreement shall be governed by and interpreted
      in
      accordance with the laws of the Commonwealth of Massachusetts, without regard
      to
      principles of conflict of laws. The parties to this agreement will submit all
      disputes arising under this agreement to arbitration in Boston, Massachusetts
      before a single arbitrator of the American Arbitration Association (“AAA”). The
      arbitrator shall be selected by application of the rules of the AAA, or by
      mutual agreement of the parties, except that such arbitrator shall be an
      attorney admitted to practice law in the Commonwealth of Massachusetts. No
      party
      to this agreement will challenge the jurisdiction or venue provisions as
      provided in this section. 

     

    (j)  This
      Agreement may be executed in any number of counterparts, each of which when
      so
      executed shall be deemed to be an original and, all of which taken together
      shall constitute one and the same Agreement. In the event that any signature
      is
      delivered by facsimile transmission, such signature shall create a valid binding
      obligation of the party executing (or on whose behalf such signature is
      executed) the same with the same force and effect as if such facsimile signature
      were the original thereof.

     

                  
      (k)  This
      Agreement shall supersede the prior executed Security Agreement dated October
      21, 2005, and upon execution of this Agreement, the prior Security Agreement
      shall be void.

     

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Security Agreement to
      be
      duly executed on the day and year first above written.

    

     DNAPRINT
      GENOMICS, INC. 

    

    By:/s/
      Richard Gabriel    

    Name: Richard
      Gabriel

    Title:
       Chief
      Executive Officer

    

    

    DUTCHESS
      PRIVATE EQUITIES FUND, L.P.

    BY
      ITS
      GENERAL PARTNER DUTCHESS 

    CAPITAL
      MANAGEMENT, LLC 

     

    

    By:
      /s/
      Douglas H. Leighton         

                                                               
      Name: Douglas H. Leighton

    Title:
      A
      Managing Member 

     

    

    
      
         

         

      

      
        
          

        

      

       

    

    SCHEDULE
      A

     

    Principal
      Place of Business of the Company:

    

    Locations
      Where Collateral is Located or Stored:

     

    List
      of Subsidiaries of the Company and EIN:

     

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    

    SCHEDULE
      B

     

    Jurisdictions:ex101

    SEPARATION
      AGREEMENT AND RELEASE

    

    THIS
      SEPARATION AGREEMENT AND RELEASE (the “Agreement”) is made and entered into by
      and between Parrish Medley (“Employee”) and Davi Skin, Inc. on behalf of itself
      and all of its subsidiaries, affiliates, divisions, predecessors, successors
      and
      assigns (hereinafter referred to collectively as the “Company””).

     

    In
      consideration of the premises and mutual promises herein contained, it is agreed
      by and between Employee and the Company as follows:

     

    1.  Termination
      Date and Resignation:
      Employee agrees that his employment with the Company terminated as of March
      17,
      2006 (the “Effective Date”). In consideration of these premises, Employee agrees
      that from and after the Effective Date, he will no longer be, nor hold himself
      out as, an employee or agent of the Company. In addition, Employee resigns
      as a
      director of the Company effective immediately. Employee further agrees that
      as
      of this date, he is not owed any money from the Company other than provided
      herein.

     

    2.  Consulting
      Payment:
      As and
      for Employee’s continued consulting services over the next six months, the
      Company shall pay to the Employee the total sum of $80,000.00 upon execution
      of
      this Agreement
      in one
      lump sum as an independent contractor to the Company providing on going advice
      and support with investors on an as needed basis.

     

    3.  Insurance
      Benefits:
      Employee will be eligible pursuant to COBRA for continued health insurance
      coverage at his own expense for up to eighteen (18) months following the
      Effective Date. If Employee elects to continue his health insurance

     

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

     

    coverage
      pursuant to COBRA, he must make appropriate payments to the Company for the
      cost
      of same in a timely manner so as to be received by the Company in sufficient
      time so as to allow the Company to make the timely necessary payments to the
      carrier. 

     

    4.  Full
      Discharge of Obligations:
      Employee understands and agrees that he is not entitled to, and will not
      receive, any payments or benefits of any kind from the Company other than those
      set forth herein above. In addition, Employee understands and agrees that after
      the Effective Date, he will not accrue any further benefits under any of the
      Company’s applicable plans. 

     

    5. 
Release:
      In
      consideration for all the covenants provided herein, Employee and the Company
      hereby forever release and discharge each other and each of their predecessors,
      successors, assigns, partners, members, officers, managers, employees,
      representatives, attorneys, agents, divisions, subsidiaries, affiliates (and
      past and present partners, members, shareholders, officers, managers, employees,
      agents, representatives and attorneys of such divisions, subsidiaries, and
      affiliates), and all persons acting by, through, under or in concert with any
      of
      them, from any and all charges, complaints, claims, liabilities, obligations,
      promises, agreements, controversies, damages, actions, causes of action, suits,
      rights, demands, costs, losses, debts and expenses (including attorneys’ fees
      and costs actually incurred) of any nature whatsoever, in law or equity, known
      or unknown, suspected or unsuspected, that either party, their successors,
      agents, executors, administrators, or assigns, ever had, now has or hereafter
      can, shall or may have, for, upon, or by reason of any matter, cause or thing
      whatsoever through the date of this Agreement, including but not limited to,
      any

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

     

    claims
      arising out of Employee’s employment by the Company and the cessation of such
      employment, including any claims for unpaid wages, back pay, commissions,
      bonuses, incentive pay, vacation pay, legal fees, severance or other
      compensation, or any claims arising under any contracts, express or implied,
      or
      any covenant of good faith and fair dealing, express or implied, or any tort,
      including without limitation intentional infliction of emotional distress,
      defamation, fraud and breach of duty, or any legal restrictions on the Company’s
      right to terminate employees, and any federal, state or other governmental
      statute, regulation, or ordinance, including without limitation: Title VII
      of
      the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967,
      the New York State and New York City Human Rights Laws, the Americans With
      Disabilities Act, the Equal Pay Act, the Employee Retirement Income Security
      Act, and the Rehabilitation Act of 1973; provided, however, that the foregoing
      does not affect any right to file an administrative charge with the Equal
      Employment Opportunity Commission (“EEOC”), subject to the restriction that if
      any such charge is filed, Employee agrees not to violate the
      confidentiality provisions of this Agreement and Employee further agrees
      and covenants that should he or any other person, organization, or other
      entity file, charge, claim, sue or cause or permit to be filed any charge with
      the EEOC, civil action, suit or legal proceeding against the Company involving
      any matter occurring at any time in the past, Employee will not seek or
      accept any personal relief (including, but not limited to, monetary award,
      recovery, relief or settlement) in such charge, civil action, suit or
      proceeding.

     

    6.  No
      Actions:
      Employee, for himself, his issue, heirs, representatives, 

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

     

    successors,
      agents, executors, administrators or assigns, hereby covenants and represents
      that he has not instituted, and will not institute, any complaints, claims,
      charges or lawsuits, with any governmental agency or any court or other
      tribunal, against the Company, by reason of any claim present or future, known
      or unknown, arising from or related in any way to his employment with the
      Company or the termination of such employment, or any relationship, association,
      or transaction to date between the parties hereto or any of their predecessors
      or their respective agents, employees or officers. The Company, for itself,
      its
      agents and management hereby covenants and represents that it has not
      instituted, and will not institute, any complaints, claims, charges or lawsuits,
      with any governmental agency or any court or other tribunal, against Employee,
      by reason of any claim present or future, known or unknown, arising from or
      related in any way to his employment with the Company or the termination of
      such
      employment, or any relationship, association, or transaction to date between
      the
      parties hereto or any of their predecessors or their respective agents,
      employees or officers. This covenant shall not apply to actions for breach
      of
      this Agreement. 

     

    7.  Confidentiality:
      In
      consideration of the above-described payments and benefits, Employee further
      agrees to the following: Employee recognizes that any knowledge or information
      of any type whatsoever of a confidential nature relating to the business of
      the
      Company or any of its subsidiaries, divisions or affiliates, including, without
      limitation, all types of trade secrets, client lists or information, employee
      lists or information, information regarding product development, marketing
      plans, management 

     

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

     

    organization,
      operating policies or manuals, performance results, business plans, financial
      records, or other financial, commercial, business or technical information
      and
      agreements (collectively “Confidential Information”), must be protected as
      confidential, not copied, disclosed or used other than for the benefit of the
      Company at any time unless and until such knowledge or information is in the
      public domain through no wrongful act by Employee. Employee further agrees
      not
      to divulge to anyone (other than the Company), publish or make use of any such
      Confidential Information without the prior written consent of the Company,
      except by an order of a court having competent jurisdiction or under subpoena
      from an appropriate government agency. 

     

    8.  Return
      of Company Property:
      As of
      the Effective Date, Employee will return to the Company all confidential
      information, files, memoranda and records, cardkey passes, door and file keys,
      computer access codes, software and other property, which he received, acquired
      or prepared in connection with his employment with the Company, and Employee
      will not retain any copies, duplicates, reproductions or excerpts thereof.
      Employee will vacate the offices of the Company no later than 5:00 PM March
      22,
      2006, provided that the Company has arranged in writing to have Employee removed
      from all liability under the existing lease of the Company’s premises, or
      alternatively has deposited $33,333 with the Company’s securities counsel with
      irrevocable instructions to hold the funds in trust until Employee is no longer
      liable on the lease and then to return the funds to the Company as it directs;
      or, in the event the Company defaults on the lease and Employee becomes liable
      thereon, to use the funds to pay any such liability on Employee’s
      behalf.

     

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

     

    9.  Non-Disparagement:
      Employee agrees not to disparage, or make any disparaging remark or send any
      disparaging communications concerning, the Company, its reputation, its
      business, and/or its directors, partners, members, officers, managers,
      shareholders and employees, and likewise the Company’s senior management agrees
      not to disparage, or make any disparaging remark or send any disparaging
      communications concerning Employee his reputation and/or his business.

     

    10. 
Rule
      of Ambiguities:
      It is
      agreed and understood that the general rule that ambiguities are to be construed
      against the drafter shall not apply to this Agreement. In the event that any
      language in this Agreement is found or claimed to be ambiguous, each party
      shall
      have the same opportunity to present evidence as to the actual intent of the
      parties with respect to any such ambiguous language without any inference or
      presumption being drawn against the drafter. In the event that one or more
      of
      the provisions of this Agreement shall become invalid, illegal or unenforceable
      in any respect, the validity, legality and enforceability of the remaining
      provisions contained herein shall not be affected thereby.

     

    11.  Non-Admission
      of Liability:
      This
      Agreement is not, and shall not in any way be construed as, an admission by
      the
      Company that it has acted wrongfully with respect to Employee or any other
      person, or that Employee has any rights whatsoever against the Company except
      as
      set forth herein, and the Company specifically disclaims any liability to or
      wrongful acts against Employee or any other person, on the part of itself,
      its
      employees or its agents.

     

    12.  Representation:
      Employee acknowledges that he was advised by the 

     

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

     

    Company
      to consult with an attorney of his own choosing concerning the waivers contained
      in this Agreement, and that the waivers Employee has made herein are knowing,
      conscious and with full appreciation that Employee is forever foreclosed from
      pursuing any of the rights so waived.

    
       
13.  No
      Modification:
      No
      waiver or modification of this Agreement or any term hereof shall be binding
      unless it is in writing and signed by the parties hereto or their expressly
      authorized representatives.

     

    14.  Choice
      of Law:
      This
      Agreement shall be construed in accordance with the laws of the State of
      California and Employee agrees to submit to the exclusive jurisdiction of the
      state and/or federal courts located within the State of California for the
      resolution of any dispute which may arise hereunder. The Company and Employee
      each hereby waive, as against the other, trial by jury in any judicial
      proceeding to which they are both parties involving, directly or indirectly,
      any
      matter in any way arising out of, related to or connected with this
      Agreement.

     

    15.  Injunctive
      Relief:
      Employee agrees and acknowledges that the Company will be irreparably harmed
      by
      any breach, or threatened breach, by him of Paragraph 7 of this Agreement and
      that monetary damages would be grossly inadequate. Accordingly, he agrees that
      in the event of a breach, or threatened breach, by him of this Agreement the
      Company shall be entitled to apply for immediate injunctive or other preliminary
      or equitable relief, as appropriate, in addition to all other remedies available
      at law and equity.

     

    16.  Non-Compete,
      Non-Solicit: As
      material inducement for the Company to 

     

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

     

    enter
      into this Agreement and to give Employee the payments and benefits described
      above, Employee who is still a shareholder of the Company agrees that for the
      either the period of the time he is a shareholder of the Company or two (2)
      years from this Agreement, whichever period is longer (the "Restricted Period")
      Employee will not i) either as a principal, director, employee or consultant
      of
      another entity compete with the Company, ii) will not solicit or attempt to
      solicit from the Company any employee of the Company who was an employee during
      this restricted period 

     

    17.  No
      Disclosure:
      Employee agrees not to disclose to anyone, other than his immediate family,
      accountant and attorney, the existence of this Agreement, the circumstances
      surrounding it, its terms, conditions or negotiation, including the dollar
      amounts set forth herein, and then only upon their express agreement not to
      disclose such subject matter to another person, except as required by
      law.

     

    18.  Entire
      Agreement:
      This
      Agreement sets forth the entire agreement between the parties hereto, and fully
      supersedes and replaces any and all prior agreements or understandings (whether
      oral or written) between the parties hereto pertaining to the subject matter
      hereof. Employee acknowledges and agrees that in signing this Agreement he
      has
      not relied upon any representation, promise or inducement that is not expressly
      set forth in this Agreement.

     

    19.  Voluntary
      Execution:
      Employee hereby acknowledges that he has read and that he understands the
      foregoing Agreement and that he has affixed his signature hereto voluntarily
      and
      without coercion.

     

    20.  Consultant
      Services: Employee
      shall upon the Company's request during 

     

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

     

    the
      2
      months following the execution of this Agreement, assist and cooperate with
      the
      Company in regard to Employee's termination and transition of responsibilities
      and projects. Employee will make himself reasonably available to the Company,
      on
      reasonable notice to the Employee for such services, for an amount of time
      equal
      up to no more than 20 hours per month over the 6 month period following the
      Effective Date. Employee shall be compensated as provided above.

     

    PLEASE
      READ CAREFULLY. THIS SEPARATION AGREEMENT AND RELEASE INCLUDES A RELEASE OF
      ALL
      KNOWN AND UNKNOWN CLAIMS.

     

    
      
        	
                Executed,
                  this 21st day 

                of
                  March, 2006

              	
                /s/
                  Parrish Medley

                PARRISH
                  MEDLEY

                 

                 

                 

              
	
                Executed,
                  this 23rd day

                of
                  March, 2006

              	DAVI
                SKIN INC. 
                

                By: /s/
                  Joseph Spellman

                JOSEPH
                  SPELLMAN

              

      

       

      No:
        1367551

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