Document:

Unassociated Document

     

    EXHIBIT
10.3

     

    GUARANTY

    

    

    NewAlliance
Bank

    195
Church Street

    New
Haven, CT 06510

    

    Gentlemen:

    

    To induce
NewAlliance Bank (hereinafter referred to as the "Lender") to enter into a
Third Modification Agreement (“Third Modification”) dated of
even date herewith with CAS Medical Systems, Inc.  (hereinafter
referred to as the “Borrower”)
modifying  a Revolving Loan to Borrower evidenced by a Commercial
Revolving Promissory Note dated February 11, 2008  from Borrower in
favor of Lender in the amount of ten million dollars ($10,000,000.00), as
modified by Debt Modification Agreement (the “First Modification”) from
Borrower dated December 31, 2008, as further modified by Second Modification
Agreement executed April 3, 2009 (the “Second Modification”) reducing
the principal amount outstanding at anytime to five million dollars
($5,000,000.00), and as further modified by Third Modification (said Commercial
Revolving Promissory Note, as modified by the First Modification, Second
Modification and Third Modification, and as the same may be further amended
and/or restated from time to time, the “Note,” and the loan evidenced
by the Note, herein called the “Loan, and the Commercial Loan
Agreement dated February 11, 2008 between Borrower and Lender, as modified by
the First Modification, the Second Modification and the Third Modification, and
as the same may be further amended and/or restated from time to time, herein
called the “Loan
Agreement"”) and, in consideration thereof and of any loans, advances or
financial accommodations heretofore or hereafter granted by the Lender to or for
the account of the Borrower in connection with the Loan, the undersigned (the
"Guarantor")
unconditionally guarantees by this agreement (the "Guaranty") the payment and
performance from or by the Borrower of any and all Obligations (as hereafter
defined). The term "Obligations," as used herein,
shall mean the Loan, all amounts advanced and/or outstanding from time to time
under or pursuant to the Loan Agreement and/or the Note, and any and all
principal, interest, commissions, fees, amounts, obligations, liabilities,
indebtedness, charges and expenses now or hereafter chargeable against the
Borrower by the Lender or owing by the Borrower to the Lender under, pursuant to
or in connection with the Note, the Loan Agreement, and/or the Loan, whether any
of the foregoing are direct or indirect, joint or several, absolute or
contingent, due or to become due, now existing or hereafter arising no matter
how or when arising under any present or future agreement or instrument between
the Borrower and the Lender or otherwise, and the performance and fulfillment by
the Borrower of all of the terms, conditions, promises, covenants, agreements
and provisions contained in said Note, the Loan Agreement and/or in any present
or future documents or agreements now or hereafter evidencing, relating to,
executed in connection with, or securing the Loan (said documents and
agreements, including, without limitation, the Note and Loan Agreement, herein
called the “Loan
Documents”).

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    The Guarantor also
agrees:  to indemnify the Lender and hold the Lender harmless against
all losses in any way suffered, incurred or paid by the Lender as a result of or
in any way arising out of, or following, or consequential to transactions with
the Borrower, with respect to the Note,  including all costs of
collection and expenses including reasonable attorneys’ fees incurred by the
Lender to collect the Obligations from any party liable for the payment thereof
whether as maker, endorser, guarantor, surety or otherwise (hereinafter the
“Parties”), or in
protecting, enforcing or realizing upon Lender’s rights in connection with any
collateral securing the Obligations, or any guaranty thereof; that said costs,
expenses and attorneys’ fees enumerated above shall expressly include those as
may be incurred by the Lender to collect the Obligations from any of the Parties
after judgment in favor of the Lender by any court of competent jurisdiction
including those incurred by the Lender to foreclose any judgment lien, or to
realize upon any collateral or to otherwise obtain payment and satisfaction of
such judgment from any of the Parties; that the obligation to pay the reasonable
attorneys’ fees of the Lender in connection with the protecting, enforcing or
realizing of the rights and remedies above described shall exist whether or not
proceedings are instituted or legal appearances made in any court of competent
jurisdiction on behalf of Lender; that this Guaranty shall not be impaired by
any modification, extension, renewal, compromise, release, substitution,
surrender, exchange or other alteration of any of the Loan Documents,
Obligations or agreements whatever with the Borrower or anyone else including
but not limited to the release, substitution, surrender, exchange or other
alteration to all or any part of the collateral securing the Obligations or the
release of any other guarantor of the Obligations; that this Guaranty shall not
be impaired by the Lender’s obtaining additional security for any of the
Obligations; that the liability of the Guarantor hereunder is direct and
unconditional and may be enforced without requiring the Lender first to resort
to any other right, remedy or security; that no Guarantor shall have any right
of subrogation, reimbursement or indemnity whatsoever, nor any right of recourse
to security for the debts and Obligations of the Borrower to the Lender and the
Guarantor hereby expressly waives any and all of said rights of subrogation,
reimbursement, indemnity, and recourse to security; that the Guarantor shall not
be deemed a “creditor” of the Borrower with respect to the Obligations as said
term “creditor” is defined in the U.S. Bankruptcy Code, as amended; and this
Guaranty is, and shall be as to the Guarantor continuing, and shall not
terminate unless and until all of the Obligations have been paid in full and any
obligation of the Lender to make, or right of Borrower to obtain advances under
any of  the Loan Documents shall have terminated; and that if there is
more than one guarantor of the Obligations, whether hereunder or under any
separate instrument of guaranty, the liability of the Guarantor and any and all
other guarantors shall be joint and several.

    

    The Guarantor represents and warrants
that as of the date of this Guaranty:

    

    A.           The
Guarantor is generally paying its debts as such debts become due, the fair
market value of its assets exceeds its liabilities and no bankruptcy or
insolvency proceedings are pending or contemplated by or against the
Guarantor.

    

    B.           All
reports, statements and other data furnished by the Guarantor to the Lender in
connection with the Loan are true, correct and complete in all material respects
and do not omit any fact or circumstance which would make the statements
contained therein misleading; present fairly the financial position of the
Guarantor as of the date stated therein, and the results of the Guarantor's
operation and changes in financial position for the years then ended and the

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    statements
are prepared in conformity with generally accepted accounting principles applied
on a consistent basis; and that no material adverse change has occurred in the
financial condition of the Guarantor since the date of said financial
statement.

    

    C.           The
Guarantor is a duly organized validly existing corporation under the laws of the
State of Delaware and has the authority to execute and deliver this Guaranty;
this Guaranty is a valid and binding obligation of the Guarantor enforceable in
accordance with its terms.

    

    D.           There
is no action, suit or proceeding pending, or to the knowledge of the Guarantor,
threatened against or materially affecting the Guarantor or which involves the
possibility of any judgment or liability not fully covered by insurance or
which, in the Guarantor's opinion, might result in any adverse change in the
business, assets or operations of the Guarantor which would, in any way,
materially and adversely affect the validity or enforceability of this
Guaranty.

    

    E.           The
Guarantor is not a party to or bound by any contract, agreement or other
instrument, or subject to any charter or other restriction or any judgment,
order, writ, injunction, decree, rule or regulation which now or in the future
may materially and adversely affect the business, operations, properties, assets
or condition, financial or otherwise, of the Guarantor.

    

    F.           The
Guarantor has filed all required federal, state and local tax returns, and no
claims have been asserted and/or are unpaid with respect to such
taxes.

    

    G.           The
Guarantor is not in default under the terms of any instrument evidencing or
securing any indebtedness of the Guarantor and there has occurred no event which
would, if uncured or uncorrected, constitute a default under any such instrument
with the giving of notice, passage of time, or both.

    

    H.           The
assumption by the Guarantor of the Obligations hereunder will result in a
financial benefit to the Guarantor.

    

    I.           The
Guarantor is duly qualified to transact business, as a foreign corporation, in
Florida and in all jurisdictions in which the character of the properties owned
or the nature of the activities conducted by such corporation requires its
qualification as a foreign corporation.

    

    Guarantor hereby covenants and agrees
that Guarantor shall (a) furnish or cause to be furnished to Lender annually,
within 90 days following the end of Borrower’s fiscal year ( i ) the financial
statement of Guarantor, in form, substance, and detail satisfactory to Lender;
and (ii) a copy of the annual federal and state income tax returns of Guarantor,
for the year most recently ended; provided, however, that so long
as the Guarantor’s tax returns and financial statements are included within the
financial statements and tax returns which the Borrower is obligated to provide
and does provide to Lender in accordance with the terms of Borrower’s agreements
with Lender, Guarantor need not provide such tax returns and financial
statements of Guarantor; and

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)
deliver to Lender, within ten (10) days following Lender’s request therefor,
such financial reports and information with respect to the Guarantor, as the
Lender may request from time to time, in form and detail satisfactory to
Lender.

    

    The Guarantor hereby gives the Lender a
lien and right of setoff for all the Guarantor’s obligations hereunder and the
Borrower’s Obligations upon and against the deposits, credits and property of
the Guarantor now or hereafter in the Lender’s possession or control or in
transit to the Lender.  The Lender may at any time apply the same or
any part thereof to any of the Guarantor’s obligations hereunder and/or the
Borrower’s Obligations, though unmatured, without notice and without first
resorting to any other collateral.

    

    The Guarantor waives:  notice
of acceptance hereof; presentment and protest of any instrument, and notice
thereof; notice of default; and all other notices to which the Guarantor might
otherwise be entitled.

    

    This Guaranty shall continue to be
effective or be reinstated, as the case may be, if at any time payment of all or
any part of the Obligations is rescinded or otherwise must be restored by the
Lender to the Borrower or to the creditors of the Borrower or any representative
of the Borrower or representative of the Borrower’s creditors upon the
insolvency, bankruptcy or reorganization of the Borrower, or to the Guarantor or
to the creditors of the Guarantor or any representative of the Guarantor or
representative of the creditors of the Guarantor upon the insolvency, bankruptcy
or reorganization of any Guarantor, or otherwise, all as though such payments
had not been made.

    

    Any and all present and future debts
and obligations of the Borrower or any other guarantor to the Guarantor are
hereby waived and postponed in favor of, and subordinated to payment in full of,
the Obligations by the Borrower to the Lender.  As security for this
Guaranty, the Guarantor hereby assigns to the Lender all claims of any nature
which the Guarantor may now or hereafter have against the
Borrower.  This assignment shall terminate upon payment and
performance of the Obligations in full and the termination of any obligation of
the Lender to make, or right of Borrower to obtain, advances under any
of  the Loan Documents.

    

    The Lender may from time to time,
whether before or after any discontinuance of this Guaranty, without notice to
the Guarantor, assign or transfer any or all of the Obligations or any interest
therein; and, notwithstanding any such assignment or transfer or any subsequent
assignment or transfer thereof, such Obligations shall be and remain Obligations
for the purposes of this Guaranty, and each and every immediate and successive
assignee or transferee of any of the Obligations or of any interest therein
shall, to the extent of the interest of such assignee or transferee in the
Obligations, be entitled to the benefits of this Guaranty to the same extent as
if such assignee or transferee were the Lender; provided, however, that unless
the Lender shall otherwise consent in writing, the Lender shall have an
unimpaired right, prior and superior to that of any such assignee or transferee,
to enforce this Guaranty, for the benefit of the Lender, as to those of the
Obligations which the Lender has not assigned or transferred.

    

    THE GUARANTOR ACKNOWLEDGES THAT THE
TRANSACTION OF WHICH THIS GUARANTY IS A PART IS A COMMERCIAL TRANSACTION, AND
HEREBY WAIVES THE RIGHT TO NOTICE AND HEARING UNDER CONNECTICUT

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    GENERAL STATUTE SECTION 52-278a
ET SEQ. AS AMENDED OR UNDER ANY OTHER STATE
OR FEDERAL LAW, WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE LENDER, ITS
SUCCESSORS OR ASSIGNS MAY DESIRE TO EMPLOY TO ENFORCE ITS RIGHTS AND REMEDIES
HEREUNDER AS WELL AS
GUARANTOR’S RIGHT TO
REQUEST THAT LENDER POST A BOND IN CONNECTION WITH ANY SUCH PREJUDGMENT
REMEDY. MORE
SPECIFICALLY, THE GUARANTOR ACKNOWLEDGES THAT LENDER’S ATTORNEY MAY, PURSUANT TO
CONNECTICUT GENERAL STATUTES, SECTION 52-278f, ISSUE A WRIT FOR A PREJUDGMENT
REMEDY WITHOUT SECURING A COURT ORDER.

    

    THE GUARANTOR HEREBY WAIVES TRIAL BY
JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT IN WHICH AN
ACTION MAY BE COMMENCED ARISING OUT OF THIS GUARANTY, OR ANY ASSIGNMENT
THEREOF.

    

    THE GUARANTOR AND THE LENDER HEREBY
AGREE THAT THE FOLLOWING COURTS:

    

    

    
      	
               
      

            	
              STATE
      COURT -

            	
              ANY
      STATE OR LOCAL COURT OF THE STATE
OF

            

    

    
      	
               
      

            	
              CONNECTICUT

            

    

    

    
      	
               
      

            	
              FEDERAL
      COURT -

            	
              UNITED
      STATES DISTRICT COURT FOR THE

            

    

    
      	
               
      

            	
              DISTRICT
      OF CONNECTICUT

            

    

     

    

    OR AT THE OPTION OF THE LENDER, ANY
COURT IN WHICH THE LENDER SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND
WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY
(COLLECTIVELY REFERRED TO AS THE “COURTS”), SHALL HAVE EXCLUSIVE JURISDICTION
TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE GUARANTOR AND THE
LENDER PERTAINING DIRECTLY OR INDIRECTLY TO THIS GUARANTY OR TO ANY MATTER
ARISING THEREFROM.  THE GUARANTOR EXPRESSLY SUBMITS AND CONSENTS IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH
COURTS, HEREBY WAIVING PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT, OR OTHER
PROCESS OR PAPERS ISSUED THEREIN, AND AGREEING THAT SERVICE OF SUCH SUMMONS AND
COMPLAINT, OR OTHER PROCESS OR PAPERS, MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL ADDRESSED TO THE GUARANTOR AT THE ADDRESS SET FORTH
BELOW.  SHOULD THE GUARANTOR FAIL TO APPEAR OR ANSWER ANY SUMMONS,
COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN THIRTY (30) DAYS AFTER THE MAILING
THEREOF, IT SHALL BE DEEMED IN DEFAULT AND AN 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ORDER AND/OR JUDGMENT MAY BE ENTERED
AGAINST IT AS DEMANDED OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT, PROCESS OR
PAPERS.  THE EXCLUSIVE CHOICE OF FORUM SET FORTH IN THIS PARAGRAPH
SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT OBTAINED IN SUCH
FORUM OR THE TAKING OF ANY ACTION UNDER THIS GUARANTY TO ENFORCE THE SAME IN ANY
APPROPRIATE JURISDICTION.

    

    This Guaranty, all acts and
transactions hereunder, and the rights and obligations of the parties hereto
shall be governed, construed and interpreted according to the laws of the State
of Connecticut, shall be binding upon the heirs, executors, administrators,
successors and assigns of the Guarantor and shall inure to the benefit of the
Lender’s successors and assigns. If there be more  than one Guarantor
hereunder, any reference to or covenant, representation, or acknowledgement made
by “the Guarantor” shall apply to each and any Guarantor, and the undersigned
shall be jointly and severally liable hereunder.

    

    Dated:  March
11, 2010

     

    
      	 	      
              GUARANTOR

              STATCORP,
      INC.

              

              

              By:  /s/ Jeffery A.
      Baird

                    
                
      

              Jeffery
      A. Baird

              Its
      Vice President, Treasurer and Secretary

              Address:  14476
      Duval Place West

              Suite
      303

              Jacksonville,
      FL 32218

            

    

     

    
      	
              STATE OF
      CONNECTICUT

               

              COUNTY OF NEW HAVEN 

            	
              ) 

              )

              )

            	ss.  New
      Haven 

    

     

    On this
the 11th day
of March, 2010, before me, the undersigned officer, personally appeared Jeffery
A. Baird, who acknowledged himself to be the Vice President, Treasurer and
Secretary of STATCORP, Inc., a Delaware corporation, and that he as such Vice
President, Treasurer and Secretary being authorized so to do, executed the
foregoing instrument for the purposes therein contained, by signing the name of
such corporation by himself as Vice President, Treasurer and
Secretary.

    

    In witness whereof, I hereunto set my
hand.

     

    
    

     

    
      	 	      
              /s/ Christian M. McNamara
      
                
      

              Christian
      M. McNamara

              Commissioner
      of the Superior CourtUnassociated Document

    EXHIBIT 10.4

    
      
 

      SECURITY
AGREEMENT

      

      The
undersigned, STATCORP,
INC. (the "Debtor"), being a corporation organized and existing under the
laws of the State of Delaware and having its chief executive office and
principal place of business at 14476 Duval Place West, Suite 303, Jacksonville,
Florida 32218 , hereby grants to NEWALLIANCE BANK ,with a place
of business at 195 CHURCH STREET, NEW HAVEN, CONNECTICUT 06510 (the "Bank" or
“Secured Party”), a security interest in all of the Debtor's present and future
right, title and interest in and to any and all of the following property,
whether now existing or hereafter created (all of which is hereinafter called
the "Collateral"):

      

      All
Equipment and Fixtures, as these terms are defined in the Uniform Commercial
Code as in effect in Connecticut as amended from time to time and all machinery,
tools, parts, furniture, furnishings, motor vehicles and other personal
property, tangible or intangible, presently owned or hereafter acquired by the
Debtor, together with additions and accessions thereto and substitutions and
replacements therefor, and the products and Proceeds (including insurance and
condemnation proceeds) thereof;

      

      All
Inventory and Goods, as these terms are defined in the Uniform Commercial Code
as in effect in Connecticut as amended from time to time, whether presently
owned or hereafter acquired, including, without limitation, all Inventory in the
possession of others or in transit, all Goods held for sale or lease or to be
furnished under contacts for service or which have been so furnished, raw
materials, work in process, and materials used or consumed or to be used or
consumed in the business of the Debtor, and completed and unshipped merchandise,
and the products and Proceeds ( including insurance and condemnation proceeds)
of the foregoing;

      

      All
Accounts, Chattel Paper (whether tangible or electronic), Instruments,
Documents, Investment Property (including, without limitation, Certificated
Securities, Uncertificated Securities and Security Entitlements), Letter of
Credit Rights (including rights to draw under letters of credit, to effect which
rights a power of attorney is hereby granted by the Debtor to the Bank) and
General Intangibles (including, without limitation, Payment Intangibles), as
these terms are defined in the Uniform Commercial Code as in effect in
Connecticut as amended from time to time, including those now existing and those
hereafter arising or coming into existence, and including, without limitation,
all rights of payment for goods sold or leased or services rendered or to be
rendered, for a policy of insurance issued or to be issued, for a secondary
obligation incurred or to be incurred, for energy provided or to be provided,
for the use or hire of a vessel under charter or other contract, arising out of
the use of a credit card or for information contained on or for use with the
card, as winnings in a lottery or other game of chance operated or sponsored by
a state, governmental unit or properly authorized person, or health care
insurance receivables, all rights of payment under contracts whether or not
currently due or not yet earned by performance and accounts receivable arising
or to arise there from, and all rights of the Debtor in and to the goods
represented thereby including returned and repossessed goods, and all rights the
Debtor may have or acquire for securing or enforcing the forgoing, including
without limitation, Supporting Obligations of every nature, the rights to
reserves, deposits, income tax refunds, choses in action, judgments or insurance
proceeds, and the products and proceeds of all of the foregoing;

      
        
          
          

        

        
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      All
goodwill, trade secrets, computer programs, Software, customer lists, trade
names, service names or marks, trademarks and trademark applications, copyrights
and copyright applications, franchises, licenses and patents, patent licenses
and patent applications, and the proceeds thereof, including, without limitation
the rights to sue and recover for infringement thereof;

      

      All books
and records relating to the conduct of Debtor's business;

      

      All
Deposit Accounts maintained by the Debtor with the Bank or other bank, trust
company, investment firm or fund or any similar institution or organization and
the proceeds thereof;

      

      Any
deposits, credits, collateral or property of the Debtor at any time now or
hereafter in the possession, custody, safekeeping or control of the Bank or any
entity under the control of the Bank or in transit to any of them and the
proceeds thereof (the "Deposits and Securities");

      

      All
licenses, permits and agreements of any kind or nature pursuant to which
(a) the Debtor operates or has authority to operate; (b) the Debtor
possesses, uses or has authority to possess or use property (whether tangible or
intangible) of others; or (c) others possess, use or have authority to
possess or use property (whether tangible or intangible) of the Debtor to secure
the payment and performance of all liabilities, obligations, indebtedness,
duties, covenants and guaranties now or hereafter owing from the Debtor to the
Bank of whatever kind or nature, whether or not contemplated at the time of this
Agreement, whether direct or indirect, absolute or contingent or due or to
become due, including all obligations of the Debtor, actual or contingent, in
respect of letters of credit or banker's acceptances issued by the Bank for the
account of or guaranteed by the Debtor and all obligations of any partnership or
joint venture as to which Debtor is or may become personally liable (the "Obligations", which term shall
also include, without limitation, all accrued interest and costs, including
reasonable attorney's fees, costs and expenses relating to the appraisal and/or
valuation of assets and all costs and expenses incurred or paid by the Bank in
exercising, preserving, defending, enforcing, collecting, administrating or
protecting any of its rights under the Obligations or hereunder or with respect
to the Collateral or in any litigation arising out of the transactions evidenced
by the Obligations).  The Obligations, include without limitation, all
liabilities, obligations and indebtedness of Debtor to Bank at any time due or
owing  under its guaranty of even date herewith, as the same may be
amended and/or restated from time to time (the “Guaranty”) with respect to a
Revolving Loan from Secured Party to CAS Medical Systems, Inc. (“CAS”) evidenced by a
Commercial Revolving Promissory Note  from CAS to Bank dated February
11, 2008 in the principal amount of ten million dollars, as modified by a Debt
Modification Agreement (the “First Modification”) from CAS
dated December 31, 2008, and as further modified by Second Modification
Agreement executed April 3, 2009 by CAS (the “Second Modification”) reducing
the maximum principal amount of the Revolving Loan to five million dollars, as
further modified by Third Modification Agreement from CAS dated of even date
herewith (the “Third
Modification”) (said Commercial Revolving Promissory Note, as modified by
the First Modification, Second Modification and Third Modification, and as the
same may be further amended and/or restated from time to time, herein called the
"Note" and the loan
evidenced by the Note, herein called the “Loan,” and the First
Modification, the Second Modification and the Third Modification shall sometimes
herein collectively be called the “Modification”).  The
Bank shall have the unrestricted right from time to time to apply (or to change
any application already made) the proceeds of any of the Collateral to any
Obligations in such manner and such order of priority as the Bank, in its sole
discretion, may determine.

      
        
          
          

        

        
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      The
Debtor expressly acknowledges that the security interest granted hereunder shall
remain as security for payment and performance of the Obligations, whether now
existing or which may hereafter be incurred by future loans or otherwise. The
notice of the continuing grant of this security interest therefor shall not be
required to be stated on the face of any document representing any such
Obligations, or otherwise identify it as being secured hereby. All collateral
which the Bank may at any time acquire from the Debtor or any other source in
connection with any of the Obligations shall constitute collateral for each and
every Obligation, without apportionment or designation as to particular
Obligations, and the Bank shall have the right, in its sole discretion, to
determine the order in which the Bank's rights in, or remedies against, any
Collateral are to be exercised, and which type or which portions of Collateral
are to be proceeded against and the order of application of any proceeds of
collateral as against particular Obligations.

      

      The
Debtor acknowledges and agrees that this security agreement grants, and is
intended to grant, a security interest in all assets of the Debtor and that, in
addition to its other legal rights, the Bank is expressly authorized to
authenticate and to file or transmit a financing statement or other record to
perfect such security interest which describes the Collateral as “all personal
property” or “all assets” of the Debtor.

      

      The
Debtor further hereby grants to the Bank a security interest in and
non-exclusive license and right to use any and all patents, copyrights,
tradenames, trademarks, service marks, and all applications therefor, and
licenses to Bank any and all patents, copyrights,
tradenames,  rademarks or service marks that Debtor now owns and/or
has the right to use or may hereafter own or acquire the right to
use.  The Bank’s security interest and non-exclusive license set forth
in this paragraph shall specifically include all rights of the Debtor which may
be necessary in order for the Bank to exercise or to get the full benefit and
value from the security interest granted in or under this
Agreement.

      

      I.
Representations and Warranties of Debtor

      

      The
Debtor hereby represents and warrants that except as set forth in Schedule A attached
hereto and made a part hereof:

      

      (a) The
exact legal name of the Debtor is stated hereinbelow.  Debtor is a
corporation duly organized and validly existing under the laws of the State of
Delaware and is in good standing under the laws of said State. Debtor is
qualified to do business in every state in which the nature of its business
conducted or the character of its property owned in such state would require
such qualification.

      

      (b)
Debtor has the power to execute, deliver and perform this Agreement and to
borrow from the Bank. The execution, delivery and performance of this Agreement
and any notes, guaranties or other documents, instruments or agreements
evidencing Debtor's obligations to the Bank have been duly authorized, if the
Debtor is a limited liability company, limited liability partnership,

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      corporation,
partnership, trust or other legal entity, will not violate the articles of
organization, certificate of incorporation, partnership agreement, declaration
of trust or other or similar organizational documents or the bylaws of the
Debtor, if Debtor is a limited liability company, limited liability partnership,
corporation, partnership, trust or other legal entity, or any law, regulation or
court order, and will not result in a default under any agreement or indenture
to which the Debtor is a party.

      

      (c)
Debtor has furnished to the Bank such tax returns, financial statements and
other information about the Debtor's financial condition as the Bank shall have
requested. These financial statements, tax returns or other information fairly
present the financial condition of the Debtor in all material respects. There
has been no material adverse change in the assets, liabilities, financial
condition or business of Debtor since the date of the last financial statements,
tax returns or other information delivered to the Bank.

      

      (d)
Debtor has good and marketable title to the property and assets which are
reflected on its financial statements, tax returns or other information
furnished to the Bank. All of the Collateral is owned by the Debtor free and
clear of all liens, pledges, security interests and mortgages, except for liens,
pledges, security interests or mortgages in favor of the Bank or liens, pledges,
security interests or mortgages set forth on Schedule I (d)
attached hereto and incorporated herein (collectively “Permitted Liens”). No
effective financing statement covering the Collateral or any proceeds thereof is
on file in any public office, except as set forth on Schedule I(d).

      

      (e) There
is no suit or proceeding at law or in equity affecting the Debtor or any of its
properties which, if adversely determined, would materially impair the rights of
the Debtor to carry on its business substantially as it is now being conducted
or would have a materially adverse effect upon the assets, liabilities,
financial condition or business of the Debtor. The Debtor is not a party to any
document, agreement or instrument, and is not subject to any charge, order or
other restriction, materially and adversely affecting its assets, liabilities,
financial condition or business, except as previously disclosed to the Bank in
writing.

      

      (f)
Debtor has filed all federal, state and local tax returns and other reports it
is required by law to file and has paid all taxes and other charges that are due
and payable.

      

      (g)
Debtor is not in default in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in any document, agreement or
instrument to which Debtor is a party, except for minor defaults in purchase or
sale orders or other agreements which neither individually nor in the aggregate
have a materially adverse effect on the Debtor.

      

      (h)
Debtor has not, during the preceding five (5) years, changed its name, been a
party to a merger, or used any other corporate or fictitious name except as
previously described to the Bank in writing.

      

      (i) The
place where Debtor keeps its records concerning the Collateral, the Debtor's
principal place of business and the Debtor's chief executive office, or if the
Debtor is an individual with no place of business, its residence, is the
location set forth at the beginning of this Agreement. The 

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      Collateral
is now and will continue to be kept at such location and at the following
additional locations until such time as the written consent of the Bank to a
change in location is received:

      

      ___________________________________________________________________________

      

      

      (j) If
any of the Collateral is to be attached to real estate, descriptions of said
real estate have been delivered to the Bank and/or are attached to this
Agreement and the name and address of each record owner is as
follows:

      

      BRC
Florida Holdings, L.L.C.  14476-701 Duval Place West, Jacksonville, FL
32218

      

      (k)
Debtor is in compliance in all material respects with all laws, ordinances,
rules or regulations applicable to it, of all federal, state or local
governments or any instrumentality or agency thereof, including, without
limitation, the Employee Retirement Income Security Act of 1974, the United
States Occupational Safety and Health Act of 1970 and all federal, state and
municipal laws, ordinances, rules and regulations relating to the environment,
as such may be amended.

      

      II.
Covenants of Debtor

      

      The
Debtor hereby agrees and covenants that except as set forth in Schedule B attached
hereto and incorporated herein:

      

      (a)
Debtor will keep the Collateral free from all liens, security interests and
encumbrances except for the security interest granted herein or those
specifically permitted in writing by the Bank and will defend the Collateral
against all demands of all persons at any time claiming any interest therein.
The Debtor will not sell or otherwise transfer the Collateral or any interest
therein except in the ordinary course of Debtor’s business as presently
conducted.  Debtor acknowledges and agrees that any security interest,
sale or transfer of Collateral without the express authorization of Bank will
violate the rights of the Bank and the Bank may note this fact on any financing
statement, fixture filing or other record filed by the Bank.

      

      (b)
Debtor will not change its name without giving the Bank thirty (30) days prior
written notice in which it sets forth its new name and the date on which the new
name shall first be used. Debtor shall not change its principal place of
business and chief executive office from that address set forth in the beginning
of this Agreement, without giving the Bank at least thirty (30) days prior
written notice of the new address for same, and provided that such new location
(and address) shall be in the United States of America.  Debtor shall,
at all times, keep the Bank accurately informed in writing of each location
where the Debtor's assets are kept and of each of its places of business and
Debtor shall not remove any records to another state or change the location or
open or close, move or change any existing or new place of business without
giving the Bank at least thirty (30) days' prior written notice
thereof.

      

      (c)
Debtor will, at its expense, furnish to the Bank upon its demand such further
information, will execute and deliver to the Bank such financing statements and
other agreements, instruments or 

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      documents,
and will do all such acts as the Bank may, at any time or from time to time,
reasonably request, or as may be necessary or appropriate to establish and
maintain a valid and enforceable first priority security interest of the Bank in
the Collateral.  Notwithstanding the foregoing, the Bank is hereby
authorized to authenticate and to file Financing Statements, Fixture Filings or
similar records naming the Debtor or any other party being or becoming bound by
this security agreement (whether as a new debtor, a transferee of Collateral
subject to Bank’s security interest or becoming a party to this agreement) as
the debtor and indicating the Collateral.  Debtor shall not file a
Correction Statement relating to the Collateral or to any Financing Statement or
Fixture Filing filed by the Bank without the Bank’s prior written
consent.  If the Debtor is a corporation, limited liability company,
limited partnership or other Registered Organization (as that term is defined in
Article 9 of the Uniform Commercial Code as in effect in Connecticut) the Debtor
shall, at its expense, furnish to Bank a certified copy of Debtor’s organization
documents verifying its correct legal name or, at Bank’s election, shall permit
the Bank to obtain such certified copy at Debtor’s expense.  From time
to time, at Bank’s election, the Bank may obtain a certified copy of Debtor’s
organization documents and a search of such Uniform Commercial Code filing
offices as it shall deem appropriate, at Debtor’s expense, to verify Debtor’s
compliance with the terms of this Agreement.

      

      (d)
Debtor will keep the Collateral (to the extent that it consists of tangible
property) at all times insured against risks of loss or damage by fire
(including so-called extended coverage), theft and such other casualties as the
Bank may reasonably require, including collision in the case of any motor
vehicle, all in such amounts, under such forms of policies, under such terms,
for such periods and written by such companies or underwriters as the Bank may
approve, which approval may not be unreasonably withheld, losses in all cases to
be payable first to the Bank "as its interest may appear." All policies of
insurance shall provide for at least thirty (30) days' prior written notice of
cancellation to the Bank, and the Debtor shall furnish the Bank with
certificates of such insurance or other evidence satisfactory to the Bank as to
compliance with the provisions of this paragraph. Debtor hereby irrevocably
appoints the Bank to act as attorney-in-fact for the Debtor in making, adjusting
and settling claims under such policies of insurance or endorsing the Debtor's
name on any drafts drawn by insurers of the Collateral or any other documents to
effect collection.  Such insurance maintained by the Debtor shall
include, without limitation, insurance coverage on Collateral in the possession
of the Bank or its agent or contractor.  Debtor, and any other Obligor
by becoming bound by the Obligations, hereby indemnifies the Bank against any
loss or damage to Collateral not insured by Debtor and for any deficiency in any
effective insurance coverage required to be maintained by Debtor pursuant to
this section, which indemnification obligation shall constitute part of the
Obligations.

      

      (e)
Debtor will notify the Bank in writing promptly upon its learning of any event,
condition, loss, damage, litigation, administrative proceeding or other
circumstance which may materially and adversely affect the assets, liabilities,
financial condition or business of the Debtor or the Bank's security interest in
the Collateral.

      

      (f)
Debtor will keep the Collateral in good order and repair, ordinary wear and tear
excepted, and will not waste or destroy the Collateral or any part thereof and
will not use the Collateral in violation of any applicable statute, ordinance or
policy of insurance thereon. The Bank may 

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      examine
and inspect the Collateral, the Debtor's books and records and any documents or
instruments relating to the Collateral at any reasonable time or times wherever
located.

      

      (g)
Debtor will preserve and keep in force its existence in the state of
organization specified in subsection (a) above and will promptly pay all lawful
taxes and assessments. Unless the Bank consents in writing, the Debtor will not
(i) sell any of its assets other than inventory in the ordinary course of its
business, (ii) incur, create or assume or suffer to exist any security interest,
mortgage, pledge, lien or other encumbrance on its assets other than those in
favor of the Bank, (ii) guarantee or otherwise in any way become liable for
obligations of others, except for the minor endorsement of instruments for
deposit or collection in the ordinary course of business, or (iv)merge with any
other entity or change its type of organization or change its state of
organization.

      

      (h) If it
is a corporation, the Debtor will not merge or enter into any reorganization or
consolidation without prior approval of the Bank.

      

      (i) At
its option, but without obligation to do so, the Bank may discharge taxes,
liens, security interest or other encumbrances at any levied or placed on the
Collateral; may place and pay for insurance on the Collateral; may order and pay
for the repair, maintenance and preservation of the Collateral; and may pay any
fees for filing or recording such instruments or documents as may be necessary
or desirable to perfect the security interest granted herein. The Debtor agrees
to reimburse the Bank on demand for any payment made or any expense incurred by
the Bank pursuant to the foregoing authorization, and all such payments and
expenses shall constitute part of the principal amount of Obligations hereby
secured and shall bear inters at the highest rate payable on the Obligations of
the Debtor to the Bank.

      

      (j) If
the Debtor shall create, assume or permit to exist any lien, pledge, security
interest, mortgage or encumbrance upon any of its property or assets whether now
owned or hereafter acquired, other than Permitted Liens, or liens, pledges,
security interests, mortgages or encumbrances  permitted  in
any agreement related to the Obligations, it will secure the Obligations or
cause them to be secured by any such lien, pledge, security interest, mortgage
or encumbrance equally and ratably with any and all indebtedness thereby
secured, provided, that nothing contained herein shall be construed or
interpreted to permit the Debtor to create, assume or permit to exist any lien,
pledge, security interest, mortgage or encumbrance not otherwise agreed to in
writing by the Bank.  In the event that any other security interest or
lien attaches to the Collateral, other than Permitted Liens or the security
interest to the Bank, Debtor hereby grants to Bank a power of attorney to, in
the name of the Debtor, request and to enforce any right of Debtor to obtain,
accountings and information from such other secured party or lienor relating to
the obligations secured and collateral securing such security interest or lien,
which power, being coupled with an interest, shall not be revocable by
Debtor.  Debtor agrees to pay or reimburse Bank upon demand for any
charges resulting from such requests for information.

      

      (k) If
any part of the Collateral is a Fixture, the Debtor will, on demand, furnish the
Bank with a disclaimer or release signed by all persons having an interest in
the real estate or any interest in the Collateral which is recorded or filed, or
which may be, prior to the Bank's interest.

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      

      (l)
Intentionally omitted.

      

      (m) All
representations now or hereafter made by the Debtor to the Bank, whether in this
Agreement or in any supporting or supplemental documentation or statement are,
will be, and shall continue to be true and correct in all material
respects.

      

      (n) In
the event that Collateral is in the possession of a bailee or other third party,
Debtor shall, at Bank’s election (and in form and content reasonably
satisfactory to the Bank), either: (i) cause a Document of title, in form
and content satisfactory to the Bank, to be issued in the name of the Bank or
(ii) obtain the written acknowledgement of the bailee or third party that it is
holding such Collateral for the benefit of the Bank.

      

      (o) With
respect to any Collateral which is subject to a Certificate of Title, the Debtor
shall: (i) cause a Certificate of Title to be issued perfecting the security
interest of the Bank, unless such collateral is Inventory held for sale in the
ordinary course of Debtor’s business by the Debtor and until such Collateral
ceases to be such Inventory; and (ii) not cause or permit a Certificate of
Title to be issued in another state which does not list the Bank’s security
interest.

      

      (p) If
the Debtor shall at any time acquire a Commercial Tort Claim, as defined in
Article 9, the Debtor shall immediately notify the Bank, in a writing signed by
the Debtor, of the brief details of the Commercial Tort Claim and shall grant to
the Bank a security interest therein and in all proceeds thereof in accordance
with the terms of this Agreement.  All terms and provisions of such
written notification and grant of such security interests shall be in form and
content reasonably satisfactory to the Bank.

      

      III.
Events of Default

      

      The
occurrence of any one or more of the following events shall constitute an "Event
of Default" under this Security Agreement:

      

      (a) The
failure of the Debtor to pay when due to be paid all or any part of the
Obligations; (b) default by the Debtor in the payment of any indebtedness or
obligation in excess of $250,000 (other than to the Bank) or if any such
indebtedness or obligation shall be accelerated, or if there exists any event of
default (beyond the expiration of any applicable grace or cure period) under any
instrument, document or agreement evidencing, governing or securing such other
indebtedness or obligation; (c) the occurrence of a material adverse change in
the condition or affairs (financial or otherwise) of Debtor, or a material
adverse change (financial or otherwise) in the Collateral,
which  change causes the Secured Party, in good faith, to deem
itself
insecure with respect to the repayment and performance of any of the
Obligations; or the Bank believes that any material adverse change in the
assets, liabilities, financial condition or business of the Debtor has occurred
since the date of any financial statements delivered to the Bank before or after
the date hereof; (d) failure by the Debtor to comply with the terms of this
Agreement or any existing or future note, mortgage, guaranty, loan agreement or
other agreement or document from Debtor in favor of Bank, including any document
which may now or hereafter evidence, govern or secure all or a portion of the
Obligations;  provided that Debtor shall have a period of 15 days
following notice from Bank to cure any such failure to comply other than a
payment 

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      failure,
before the same shall constitute an Event of Default (Cure Right), provided that
such Cure Right shall not be applicable to any of the other Events of Default
set forth in (a)-(c) or (e)- (m) of this paragraph; (e) any representation or
warranty made by the Debtor herein or in any existing or future agreement from
Debtor in favor of Bank shall be incorrect or untrue in any material respect as
of the date when made, or any statement, certificate or data furnished by the
Debtor in connection with the Obligations, or any said existing or future
agreement shall be incorrect or untrue in any material respect as of the date
thereof or as of the date specified therein, as the case may be; (f) the
occurrence of any material loss, theft, substantial damage or destruction of or
to any Collateral or to a material portion of the property or assets of the
Debtor; (g) sale or other disposition of or encumbrance on, any property of the
Debtor, except Permitted Liens or as permitted by any note or other agreement or
document evidencing, governing or securing all or a portion of the Obligations;
(h) the making or issuance of any levy, seizure, attachment, execution or
similar process against any property of Debtor or CAS; or (i) dissolution of,
termination of the existence of, insolvency of, business failure of, application
for or appointment of a receiver, trustee, conservator or liquidator of any part
of the property of, assignment for the benefit of the creditors by, or the
commencement of any case or any other proceeding (whether for the purpose of
liquidation or rehabilitation or otherwise) under any bankruptcy or insolvency
laws, by or against the Debtor, CAS or of, by or against any Obligor, guarantor,
endorser or surety for any Obligations (herein, a "Guarantor"); (j) demand for
the payment of, or the occurrence of an

      Event of
Default (as defined therein) or a default under, that certain Commercial Loan
Agreement dated February 11, 2008 between CAS and Bank, as modified by the First
Modification, the Second Modification and the Third Modification, and as the
same may be further amended and/or restated from time to time (the "CAS Revolving Loan Agreement")
or any other existing or future agreement from CAS in favor of Secured Party;
(k) the failure to maintain insurance required herein or in any other existing
or future  agreement executed by Debtor in favor of Bank; (l) the
occurrence of a Default or an Event of Default (as defined therein) under the
Commercial Loan and Security Agreement among Debtor, CAS and Bank dated March
16, 2005 as the same has been or may be amended and/or restated from time to
time (“Term Loan
Agreement”); (m) the failure to comply with Section VII hereof; (n) the
transfer, sale encumbrance or other disposition of any stock in the Debtor
without the prior written consent of the Bank; or (o) any merger or
consolidation of Debtor with or into another entity or any spinoff or
reorganization of Debtor.

      

      IV.
Remedies

      

      Upon and
after the occurrence of any Event of Default or if the Bank shall in good faith
believe that the prospect of payment or performance is impaired, all of the
Obligations shall, at the option of the Bank or automatically, as the case may
be as provided in the instrument or agreement evidencing the defaulted
Obligations, without demand, notice or legal process of any kind, accelerate and
become immediately due and payable.

      

      Upon and
after an Event of Default, the Bank shall have the following additional rights
and remedies (which the Debtor , and, by becoming bound by the Obligations or
this Agreement, all other Obligors, Guarantors and any New Debtors accept and
agree upon):

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      

      (a) All
of the rights and remedies of a secured party under the Uniform Commercial Code
or any other applicable law or at equity, all of which rights and remedies shall
be cumulative and non-exclusive, to the extent permitted by law, in addition to
any other rights and remedies contained in this Security Agreement or in any
other agreement, document or instrument evidencing, governing or securing the
Obligations.

      

      (b) The
right to (i) take possession of the Collateral, without resort to legal process
and without prior notice to Debtor, and for the purpose Debtor hereby
irrevocably appoints the Bank its attorney-in-fact to enter upon any premises on
which the Collateral or any part thereof may be situated and remove the
Collateral therefrom, (ii) require the Debtor to assemble the Collateral and
make it available to Bank in a place to be designated by the Bank, in its sole
discretion, or (iii) the right to locate, disable or to take possession of the
Collateral by electronic, digital, magnetic or wireless optical electromagnetic
or similar means after giving any notices required under applicable law. The
Debtor shall make available to the Bank all premises, locations and facilities
necessary for the Bank's taking possession of the Collateral or for removing or
putting the Collateral in saleable form.

      

      (c) The
right to sell or otherwise dispose of all or any part of the Collateral by
public or private sale or sales. Unless the Collateral is perishable or
threatens to decline speedily in value or is of a type customarily sold on a
recognized market, the Bank will give the Debtor at least five (5) days prior
written notice of the time and place of any public sale thereof or of the time
after which any private sale or any other intended disposition (which may
include, without limitation, a public sale or lease of a all or part of the
Collateral) is to be made. The Debtor agrees that 5 days is a reasonable time
for such notice. The Bank, its employees, attorneys and agents may bid and
become purchasers at any such sale, if public, and may purchase at any private
sale of the Collateral that is of a type customarily sold on a recognized market
or which is subject to widely distributed standard price quotations. A public or
private sale of the Collateral or any portion thereof may be accomplished by
digital or electronic means, such as through use of the internet or other
telecommunications means.

      

      At any
public or private sale the Collateral shall be sold “as is” with no warranties
by the Bank, whether express or implied.  Any public or private sale
shall be free from any right of redemption which the Debtor waives and releases
and which Debtor and any Guarantors agree that they will confirm in a separate
written agreement after any default. If there is a deficiency after such sale
and the application of the net proceeds from such sale, the Debtor shall be
responsible for the same, with interest at the maximum rate allowable by law,
and the costs and expenses of collection of such deficiency, including without
limitation, attorney's fees.

      

      (d) The
right (and Debtor irrevocably appoints the Bank as attorney-in-fact for the
Debtor for this purpose, such appointment being coupled with an interest),
without prior notice to Debtor and without resort to legal process, to notify
the persons liable for payment of the Accounts, Chattel Paper, Instruments and
General Intangibles at any time and direct such persons to make payments
directly to the Bank, and to perform all acts the Debtor could take to collect
on such Accounts, Chattel Paper, 

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      Instruments
and General Intangibles, including, but without limitation, the right to notify
postal authorities to change the address for delivery, open mail, endorse
checks, bring collection suits, and realize upon Collateral securing such
Accounts, Chattel Paper, Instruments and General Intangibles. At the Bank's
request, all bills and statements sent by the Debtor to the persons liable for
payment of such Accounts, Chattel Paper, Instruments and General intangibles
shall state that they have been assigned to, and solely payable to, the Bank,
and Debtor shall direct persons liable for the payment of such Accounts, Chattel
Paper, Instruments and General Intangibles to pay directly to the Bank any sums
due or to become due on account thereof.

      

      (e) The
right from time to time without demand or notice, to apply and set off any or
all of the Deposits and Securities against, any and all Obligations even though
such Obligations be unmatured.

      

      (f) The
Bank shall not be required to apply non-cash Proceeds of any disposition of
Collateral until cash is actually received by the Bank.

      

      V.
General

      

      (a) No
waiver by the Bank of any default shall be effective unless in writing nor
operate as a waiver of any other default or of the same default on a future
occasion, nor shall the failure of delay of the Bank to exercise, or the partial
exercise of, any right, power or privilege provided for hereunder in any
circumstances preclude the full exercise of such right, power or privilege in
the same or similar circumstances in the future or the exercise of any other
right or remedy.

      

      (b) This
Security Agreement is intended as the final, complete and exclusive statement of
the provisions contained in this Security Agreement. No amendment, modification,
termination or waiver of any provisions of this Security Agreement or consent to
any departure by the Debtor therefrom shall, in any event, be effective unless
the same shall be in writing and signed by the Bank. Any waiver of, or consent
to any departure from, any provision of this Security Agreement shall be
effective only in the specific purpose for which it is given, and shall not be
deemed to extend to similar situations or to the same situation at a subsequent
time. No notice to or demand upon the Debtor shall in any case entitle Debtor to
any other or further notice or demand in similar or other
circumstances.

      

      (c) All
rights of the Bank hereunder shall inure to the benefit of its successors and
assigns, and all obligations of the Debtor shall bind the heirs, legal
representatives, successors and assigns of Debtor.

      

      (d)
Debtor will pay to the Bank on demand any and all costs and expenses, including
attorney's fees, costs and expenses relating to the appraisal and/or valuation
of assets and all costs and expenses incurred or paid by the Bank in
establishing, exercising, collecting, defending, preserving, protecting,
administering or enforcing its rights in the Collateral or under any of the
Obligations.

      

      (e) This
Security Agreement and the security interest created hereby shall be governed by
and construed in accordance with the laws of the State of Connecticut (but not
its conflicts of law provisions).

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      

      (f)
Whenever possible, each provision of this Security Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Security Agreement shall to any extent be held
invalid or unenforceable, then only such provision shall be deemed ineffective
and the remainder of this Security Agreement shall not be affected
thereby.

      

      (g)  Intentionally
omitted.

      

      (h)
Debtor hereby acknowledges receipt of a fully-completed copy of this Security
Agreement.

      

      (i) If
not otherwise defined herein, the terms contained herein which are defined in
Article 9 of the Uniform Commercial Code as enacted in the State of Connecticut
(“Article 9”) shall have the meanings ascribed to them in Article 9, whether or
not such terms are capitalized herein.

      

      (j) To
the extent any of the provisions of the Term Loan Agreement with respect to the
obligations of Debtor concerning the Debtor’s “Collateral,” as defined therein,
or concerning the rights or remedies of Bank with respect to the Debtor’s
“Collateral,” as defined therein, conflict with the provisions of this Security
Agreement as to such “Collateral,” the terms of this Security Agreement shall
control.

      

      VI.
Waivers

      

      (a)
DEBTOR HEREBY (I) ACKNOWLEDGES THAT THIS AGREEMENT IS PART OF A COMMERCIAL
TRANSACTION AND (II) TO THE EXTENT PERMITTED BY ANY STATE OR FEDERAL LAW
(INCLUDING, BUT NOT LIMITED TO CHAPTER 903a OF THE CONNECTICUT GENERAL
STATUTES), WAIVES ANY RIGHT IT MAY HAVE TO PRIOR NOTICE OF AND A HEARING ON THE
RIGHT OF THE BANK, ITS SUCCESSORS OR ASSIGNS TO ANY REMEDY OR COMBINATION OF
REMEDIES THAT ENABLES THE BANK, ITS SUCCESSORS OR ASSIGNS, BY WAY OF ATTACHMENT,
FOREIGN ATTACHMENT, GARNISHMENT OR REPLEVIN TO DEPRIVE DEBTOR OF ITS PROPERTY AT
ANY TIME PRIOR TO FINAL JUDGMENT IN ANY LITIGATION INSTITUTED IN CONNECTION WITH
THIS AGREEMENT AND ANY TRANSACTIONS SECURED HEREBY, AND FURTHER WAIVES ALL
RIGHTS TO REQUEST THAT THE BANK POST A BOND, WITH OR WITHOUT SURETY, TO PROTECT
DEBTOR AGAINST DAMAGES THAT MAY BE CAUSED BY ANY SUCH REMEDY OR
REMEDIES.

      

      (b)
DEBTOR AND THE BANK IRREVOCABLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY
PROCEEDINGS HEREAFTER INSTITUTED BY OR AGAINST THE DEBTOR OR THE BANK IN RESPECT
OF THIS AGREEMENT, ANY DOCUMENT, INSTRUMENT OR AGREEMENT EVIDENCING, GOVERNING
OR SECURING THE OBLIGATIONS HEREBY SECURED OR THE COLLATERAL.

      

      (c) THE
DEBTOR WAIVES NOTICE OF NON-PAYMENT, DEMAND, PRESENTMENT, PROTEST OR NOTICE OF
PROTEST OF THE COLLATERAL AND ALL OTHER NOTICES, CONSENTS TO ANY RENEWALS OR
EXTENSIONS OF TIME OF PAYMENT THEREOF AND GENERALLY WAIVES ANY AND ALL
SURETYSHIP DEFENSES AND 

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      DEFENSES
IN THE NATURE THEREOF, INCLUDING WITHOUT LIMITATION, IMPAIRMENT OF
COLLATERAL.

      

      VII.  Reporting
and CAS Revolving Loan Agreement.

      

      Debtor
acknowledges and agrees that its Guaranty extends to and covers the obligations
of CAS under the CAS Revolving Loan Agreement. For the purposes of this Section
VII, capitalized terms not otherwise defined in this Agreement, shall have the
meaning set forth in the CAS Revolving Loan Agreement.  Debtor
acknowledges and agrees that Bank may or will be relying on certain of the
Debtor’s Collateral in extending loans to CAS pursuant to the CAS Revolving Loan
Agreement.  Accordingly Debtor hereby agrees as follows:

      

      A.  As used herein, “Eligible
Inventory” means that Inventory (as defined in the Uniform Commercial Code as in
effect in Connecticut as amended from time to time) (valued at the lesser of
cost to the Debtor or market value) which continually meets the following
requirements:  a) it is in first-class condition and is saleable
through normal trade channels; b) it is new and unused; c) it is owned by the
Debtor and is not subject to any lien or security interest whatsoever other than
that of the Bank; d) it is not in the Debtor’s possession based upon
consignment, guaranteed sale, or other terms by reason of which the payment may
be conditional; e) it at all times strictly complies with all of Debtor's
warranties and representations to the Bank; f) it is not obsolete or
unmerchantable, in Bank’s reasonable discretion; g) it meets all standards
imposed by any governmental agency or authority;  h) it is at all
times subject to Bank’s duly perfected, first priority security
interest;  i) it is in Debtor’s possession and control and situated at
the location known as 14476-701 Duval Place West, Jacksonville, FL 32218, or
other location as may be approved by the Bank in its sole and absolute
discretion;  j) it is not in the hands of any third party, including a
warehouseman, finisher, consignee, etc., k) it is not subject to any license or
other agreement that limits, conditions, or restricts Debtor’s or Bank’s right
to sell or otherwise dispose of such Inventory;  and l) it is not of
any class, type or category which the Bank, acting in the Bank's reasonable
discretion, shall have notified the Debtor, is not deemed to constitute
Inventory eligible for the purposes of this Agreement.  Eligible
Inventory shall not include work-in-process, other than raw materials and
finished goods which would otherwise comply with a) through l)
above.

       
 

      B.  As
used herein,  “Eligible Receivables” means the net amount of those
accounts (as defined in the Uniform Commercial Code as in effect in Connecticut
as amended from time to time) which continually meet the following requirements:
a) the account is due and payable not more than ninety (90) days from the date
of the invoice evidencing the account and is not past due;  b) the
account arose from the performance of services by the Debtor which have been
fully and satisfactorily performed or from the absolute sale of goods by the
Debtor in which the Debtor had the sole and complete ownership and the goods
have been shipped or delivered to the account debtor evidencing which the Debtor
or the Bank has the possession of shipping and delivery receipts; c) the account
is not subject to any prior or subsequent assignment, claim, lien or security
interest other than that of the Bank; d) the account is not subject to setoff,
counterclaim, defense, allowance or adjustment other than discounts for prompt
payment shown on the invoice, or to dispute, objection or complaint by the
account debtor concerning his liability on the account, and the goods, the sale
of which gave rise to the account, have not been 

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      returned,
rejected, lost or damaged; e) the account arose in the ordinary course of
Debtor’s business; f) no petition or other application for relief under the
Bankruptcy Code or other insolvency law has been filed with respect to the
customer or account debtor; and the customer or account debtor has not made an
assignment for the benefit of creditors, become insolvent, or suspended or
terminated business; and the account debtor is generally paying its debts as
they become due; g) the account debtor is not the United States of America or
any department, agency or instrumentality thereof, unless Debtor assigns its
right to payment of such account to Bank pursuant to and complies with the
Assignment of Claims Act of 1940 as amended (31 U.S.C. Sub-section 203 et seq.); h) the
account debtor on the account is not a subsidiary of, related to, or affiliated
with Debtor; i) any covenant, representation or warranty contained in this
Agreement with respect to such account has not been breached; j)  the
account debtor is not also Debtor's creditor or supplier; k) the account is not from an account
debtor located outside of the United States, unless supported by foreign credit
insurance or a letter of credit which has been assigned to Bank,
in both instances
acceptable to the Bank, in its sole and absolute discretion, or unless otherwise
agreed to by Bank; l) the sale to the account debtor is not on a
bill-and-hold, sale on approval, consignment or another repurchase or return
basis, and is not evidenced by chattel paper, unless Bank has been advised of
such goods and consented to the account arising therefrom being an Eligible
Receivable; m) it is not an account from an account debtor where fifty percent
(50.00%) or more of all of the accounts owed by that account debtor are past due
more than the 90 days from the invoice date; and  n) the Bank, has not
notified the Debtor that, in the Bank's reasonable discretion, the account or
account debtor is not acceptable to the Bank.

      

      

      C.  As used in this
Agreement, the term "Affiliate" shall mean any person, corporation or entity
which directly or indirectly controls, or is controlled by, or is under common
control with the Debtor.  As used herein "control" shall mean the
possession, directly or indirectly, of the power to direct the management or
policies of any person, corporation or entity and shall include the holder of
50% or more of any stock or other interest in any person, corporation or entity,
whether such holding is direct or indirect.

      

      

      D.
Without limiting the foregoing, in order to verify the validity of any Borrowing
Base Certificate and Report delivered by CAS under or pursuant to the CAS
Revolving Loan Agreement, Debtor shall, upon the request of Bank, promptly
furnish Bank with copies of Debtor's purchase orders, sales journals, invoices,
chattel paper, customer's purchase orders, or the equivalent, and original
shipping or delivery receipts for all Inventory purchased and goods sold, and
Debtor shall warrant the genuineness thereof.

      

      E. Debtor’s accounts receivable agings
shall be provided to Bank from time to time upon request of the Bank, in form
and detail satisfactory to the Bank.

      

      F.  The
Bank shall have the right to perform examinations and audits of the Collateral
for the Loan, from time to time at the Debtor’s expense, including without
limitation, Debtor’s books and records, accounts, purchase orders, sales
journals, invoices, chattel paper, customer's purchase orders, or the
equivalent, and original shipping or delivery receipts for all inventory
purchased and goods sold. In addition, the Bank shall have the right to require
the establishment of a lockbox by Debtor at the Bank and a blocked account for
the collection of Debtor’s accounts 

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      and other
receivables, on terms satisfactory to the Bank and at the expense of the Debtor.
The Bank shall also have the right upon or at any time after the occurrence of
an Event of Default, to notify account debtors of Debtor to pay accounts and
other receivables directly to the Bank.  Debtor shall to the Bank upon
demand, all fees, costs and expenses incurred or charged by Bank in connection
with any such examination, audit, lockbox, and notification.

      

      G.  The Debtor shall furnish
to Bank upon the Bank's written demand, such information about the financial
condition or operations of the Debtor as Bank may, from time to time, reasonably
request.

      

      H.  Debtor
shall maintain its primary operating account, if any, at the Bank.

      

      IN
WITNESS WHEREOF, Debtor has duly authorized and executed this Agreement as a
sealed agreement this 11th day
of March, 2010.

       

       

      
 

      WITNESSES:

      DEBTOR:

      STATCORP,
INC.

      

      

      /s/ Judy K.
Weinstein                                                         By: /s/ Jeffery A.
Baird 

      Judy K.
Weinstein                                                               Name:
Jeffery A. Baird

      Its  Vice
President, Treasurer and Secretary

       
 

      /s/ Christian M.
McNamara

      Christian
M. McNamara

      

      

      

      SECURED
PARTY:

      NEWALLIANCE
BANK

      

      

      /s/ Judy K.
Weinstein                                                        
By: /s/ Dante S.
Fazzina

      Judy K.
Weinstein                                                               Name:
Dante S. Fazzina

      Its: Vice President

      /s/ Christian M.
McNamara

      Christian
M. McNamara

      

      

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      

      

      

      STATE OF
CONNECTICUT)

                                                       )  ss:           New
Haven

      COUNTY OF
NEW HAVEN)

      

      On this
11th day
of March, 2010 before me, the undersigned officer, personally appeared Dante S.
Fazzina, who acknowledged himself to be a Vice President of NewAlliance Bank,
and that he, as such officer, being authorized so to do, executed the foregoing
instrument for the purposes therein contained as his free act and deed and the
free act and deed of said Bank, by signing the name of said Bank by himself as
such officer.

      

      In
Witness Whereof I hereunto set my hand.

      

      

      

      /s/ Judy K.
Weinstein

      Judy K.
Weinstein

      Commissioner
of the Superior Court

      

      

      STATE OF
CONNECTICUT)

                                                       )  ss:
New Haven

      COUNTY OF
NEW HAVEN)

      

      On this
the 11th day
of March, 2010 before me, the undersigned officer, personally appeared Jeffery
Baird who acknowledged himself to be the Vice President, Treasurer and Secretary
of STATCORP, Inc., a Delaware corporation, and that he, as such officer, being
authorized so to do, executed the foregoing instrument for the purposes therein
contained as his free act and deed and the free act and deed of said
corporation.

      

      In
Witness Whereof I hereunto set my hand.

      

      

       
 

      /s/ Christian M.
McNamara

      Christian
M. McNamara

      Commissioner
of the Superior Court

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

      

      Schedule
A-Exceptions to Section I

      

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

      

      Schedule
B- Exceptions to Section II  Covenants

      

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

      Schedule
I (d) Permitted Liens

      

      1.  Liens
for taxes not yet due and payable, or which are being contested in good faith by
appropriate proceedings with appropriate reserves in accordance with generally
accepted accounting principals.

      

      2.  Pledges
or deposits in connection with or to secure worker’s compensation, unemployment
insurance, pensions, or other employee benefits.

      

      3.  Purchase
money security interests in the maximum aggregate sum of up to $150,000.00 at
any one time.

      

      4.  UCC
Financing Statement in favor of NewAlliance Bank filed on May 18, 2005 as Filing
No. 51628297.

      

      5.  UCC
Financing Statement in favor of Raymond Leasing Corporation filed on April 26,
2006 as Filing No. 61393214 (freight equipment).

      

      6.  UCC
Financing Statement in favor of Toyota Motor Credit Corporation filed on January
26, 2009 as Filing No. 90258639 (forklift).

      

      7.  UCC
Financing Statement in favor of Phoenix Funding Group, LLC filed on October 3,
2005 as Filing No. 20050082034X.

      

      
        
           

        

        
          19

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