Document:

SECURITY AGREEMENT

 

This Security Agreement
(the “Security Agreement”) is entered into on October 30, 2013 by and among TREBOR INDUSTRIES, INC., a
Florida company (the “Debtor”) and MIKKEL PITZNER (the “Secured Party”).

 

RECITALS

 

A.The Debtor, Brownie’s
Marine Group, Inc. and the Secured Party are parties to a Loan Agreement (the “Loan Agreement”) and Secured
Promissory Note in the principal amount of $85,000 (the “Note”), each dated even herewith.

 

B.To induce Secured
Party to enter into the Loan Agreement and to secured the obligations of the Debtor under the Note and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Debtor has agreed to grant a security interest
in certain Collateral (as hereinafter defined) as security for the secured obligations set forth in the Note.

 

NOW, THEREFORE, in
consideration of the mutual covenants, agreements and conditions, and upon acknowledgement of each of the parties of the receipt
of valuable consideration, the parties herein agree as follows:

 

1)Recitals.
The foregoing recitals are true, correct and are herein incorporated by reference.

 

2)Grant of Security
Interest. Upon the “Effective Date” of the Loan Agreement (as defined under the Loan Agreement), the Debtor
hereby grants to the Secured Party a security interest up to $200,000 in and to all of the Debtor’s right, title and interest
in and to all of the assets listed on Schedule A attached hereto (the “Collateral”) to secure the prompt and
complete payment, when due, of all amounts outstanding under the Note, such grant junior to Branch Banking and Trust Company (the
“Senior Creditor”) until such time as the Debtor and Senior Creditor settle the deficiency judgment held by
Senior Creditor as filed in the Circuit Court of the Seventeen Judicial Circuit in and for Broward County, Florida (the “BBT
Judgment”). Secured Party also acknowledges the UCC filing recorded on the Florida Secured Transaction Registry in favor
of Dex Imaging, Inc.

 

3)Representations
and Warranties. The Debtor represents and warrants to the Secured Party as follows:

 

a)The Debtor has,
and has duly exercised, all requisite capacity, power and authority to enter into the Note, this Security Agreement, to pledge
the Collateral, and to carry out the transactions contemplated herein.

 

b)The execution,
delivery and performance of this Security Agreement by the Debtor will not result in a violation of any mortgage, instrument or
other agreement or any order, law, rule or regulation to which the Debtor is subject, or be in conflict with, or result in a breach
of or constitute a default under any such mortgage, instrument or agreement.

 

    	 

    	 

    

 

c)This Security Agreement
constitutes the legal, valid and binding obligation of the Debtor, enforceable in accordance with its terms, except as limited
by bankruptcy, insolvency and similar laws affecting the rights of creditors.

 

d)The Debtor is the
sole legal, record and beneficial owner of the Collateral and has good title to it, free and clear of any lien, hypothecation,
security interest, option or other charge or encumbrance, except (i) as contemplated by the Note, (ii) the security interest created
by this Security Agreement and (iii) the Senior Creditor security interests, and has full right to pledge, assign, transfer and
deliver the Collateral and any proceeds thereof.

 

e)Other than a filing
of a financing statement, no authorization, approval or other action by, and no notice to or filing with, any governmental or regulatory
agency or authority is required (i) for the grant by the Debtor of the security interest granted hereby; or (ii) for the execution,
delivery or performance of this Security Agreement by the Debtor; or (iii) for the perfection of or the exercise by the Secured
Party of his rights and remedies hereunder.

 

4)Further Assurances.

 

a)The Debtor agrees
that from time to time, at the expense of the Debtor, to promptly execute and deliver all further instruments and documents, and
take all further action, that may be necessary or desirable, or that Secured Party may reasonably request, in order to perfect
and protect any security interest granted or purported to be granted hereby or to enable Secured Party to exercise and enforce
his rights and remedies hereunder with respect to any Collateral. At any time and from time to time at the request of the Secured
Party, the Debtor shall execute and deliver to the Secured Party all such financing statements and other instruments and documents
in form and substance satisfactory to the Secured Party as shall be necessary or desirable to fully perfect, when filed and/or
recorded, the security interest in the Collateral granted to the Secured Party. The Debtor hereby authorizes the Secured Party,
without notice to the Debtor, to file any financing statement and amendments thereof or continuations thereof, naming the Debtor
as “debtor” and the Secured Party as “creditor”.

 

b)The Secured Party
agrees that to the extent required by any bank or third party providing accounts receivable financing and/or acquisition line financing
to the Debtor (each a “Bank”, and together the “Banks”), Secured Party’s Note will
be junior in payment and right, title and interest to all amounts due pursuant to secured loans made by such Bank(s) to the Debtor.
The Secured Party shall enter into such subordination agreement as may be reasonably requested by any such Bank or Banks.

 

c)The Debtor shall
use its best efforts to settle the BBT Judgment and terminate all Uniform Commercial Code (“UCC”) filings in
favor of the Senior Creditor with ten (10) business days of the date of this Security Agreement.

 

5)Transfer and
Other Liens. The Debtor shall not:

 

a)Sell, assign or
otherwise dispose of any of the Collateral, except in the ordinary course of business.

 

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b)Except for accounts
receivable financing, acquisition line financing or statutory liens in the ordinary course of business, create or suffer to exist
any lien upon or with respect to any of the Collateral to secure debt of any person.

 

6)Secured Party’s
Duties; Preservation of Rights. The powers conferred on Secured Party hereunder are solely to protect the Secured Party’s
interest in the Collateral and shall not impose any duty upon the Secured Party to exercise any such powers. The Secured Party
shall not be required to take steps necessary to preserve any rights against prior parties to any of the Collateral.

 

7)Remedies.
If any Event of Default (as defined in the Note) shall have occurred, then during the continuance of such Event of Default:

 

a)The Secured Party
may exercise in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available
to the Secured Party, all the rights and remedies of a secured party on default under the Uniform Commercial Code (the “Code”)
(whether or not the Code applies to the affected Collateral) and also may (i) require the Debtor to, and the Debtor hereby agrees
that it will at its expense and upon the request of the Secured Party forthwith, assemble all or part of the Collateral as directed
by Secured Party and make it available to Secured Party at a place to be designated by Secured Party which is reasonably convenient
to both parties; and (ii) to enter the premises where any of the Collateral is located and take and carry away the same, by any
of its representatives, with or without legal process, to Secured Party’s place of storage; and (iii) without notice except
as specified below, sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of Secured
Party’s offices or elsewhere, for cash, on credit or for future delivery and upon such other terms as the Secured Party may
deem commercially reasonable. The Debtor agrees that, to the extent notice of sale shall be required by law, at least ten days’
notice to the Debtor of the time and place of any public or private sale is to be made shall constitute reasonable notification.
The Secured Party shall not be obligated to make any sale of Collateral regardless of notice of sale having been given. Secured
Party may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place it was so adjourned.

 

b)All cash proceeds
received by Secured Party in respect of any sale of, collection from, or other realization upon all or any part of the Collateral
may, in the discretion of Secured Party, be held by Secured Party as collateral for, all or any part of the amounts due under the
Note in such order as Secured Party shall elect. Any surplus of such cash or cash proceeds held by Secured Party and remaining
after payment in full of all the amounts due under the Note shall be paid over to the Debtor. If the proceeds of the sale of the
Collateral are insufficient to pay all of the amounts due under the Note the Debtor agrees to pay upon demand any deficiency to
Secured Party.

 

8)Indemnity
and Expenses.

 

a)The Debtor agrees
to indemnify the Secured Party from and against any and all claims, losses and liabilities arising out of or resulting from this
Security Agreement (including, without limitation, enforcement of this Security Agreement), except claims, losses or liabilities
resulting from Secured Party’s gross negligence or willful misconduct.

 

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b)The Debtor will,
upon demand by Secured Party, pay to Secured Party the amount of any and all expenses, including the reasonable fees and out of
pocket disbursements of its counsel and of any experts and agents, which Secured Party may incur in connection with (i) filing
or recording fees incurred in connection with this Security Agreement; (ii) the custody, preservation, use or operation of, or
the sale of, collection from, or other realization upon, any of the Collateral; (iii) the exercise or enforcement of any of the
rights of Secured Party; or (iv) the failure by the Debtor to perform or observe any of the provisions hereof.

 

9)Continuing
Security Interest; Transfer of Note. This Security Agreement shall create a continuing security interest in the Collateral
and shall (a) remain in full force and effect until payment in full of the Note; (b) be binding upon the Debtor, its successors
and assigns; and (c) inure to the benefit of the Secured Party and its successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), Secured Party may not assign or otherwise transfer all or any portion of its rights and
obligations under the Note to any other person without the consent of the Debtor, its successors or assigns and then upon such
permitted transfer, such other person shall become vested with all the benefits in respect thereof granted to Secured Party herein
or otherwise.

 

10)Termination.
Upon the payment in full of the Note, the security interest granted hereby shall terminate and all rights to the Collateral shall
revert to the Debtor, its successors or assigns. Upon any such termination, Secured Party will, at the Debtor‘s expense,
execute and deliver to the Debtor, its successors or assigns such UCC termination statements and such other documentation as the
Debtor, its successors or assigns shall reasonably request to effect the termination and release of the liens on the Collateral.

 

11)Miscellaneous.

 

a)No Third-Party
Beneficiaries. Except as contemplated herein and by the Merger Agreement, this Security Agreement shall not confer any rights
or remedies upon any person other than the parties and their respective successors and permitted assigns.

 

b)Succession.
This Security Agreement shall be binding upon and inure to the benefit of the parties named herein and their respective successors
and permitted assigns.

 

c)Assignment.
The Secured Party may not assign either this Security Agreement or any of his rights, interests, or obligations hereunder without
the prior written approval of the Debtor. The Debtor may assign any or all of its rights, interests, obligations and duties hereunder.

 

d)Amendments and
Waivers. No amendment of any provision of this Security Agreement shall be valid unless the same shall be in writing and signed
by both the Debtor and the Secured Party. No waiver by any party of any default, misrepresentation, or breach of warranty or covenant
hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach
of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

 

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e)Notices.
All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (i) upon personal delivery
to the party to be notified, (ii) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient,
if not, then on the next business day; (iii) five days after having been sent by registered or certified mail, return receipt requested,
postage prepaid; or (iv) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the parties as set forth below, or at such other address as
such party may designate by ten days’ advance written notice to the other parties hereto:

 

	 	If to the Debtor:	to the address as set forth in the Loan Agreement.
	 	 	 
	 	If to the Secured Party:	to the address as set forth in the Loan Agreement.
	 	 	 

f)Construction.
The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting
this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Security Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue
of the authorship of any of the provisions of this Security Agreement.

 

g)Severability.
If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable
in accordance with its terms.

 

h)Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of the State of Florida without giving effect to
any choice or conflict of law provision or rule (whether of the State of Florida or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Florida. Each of the Parties hereto expressly and irrevocably
agrees that any legal suit, action or proceeding arising out of or relating to this Security Agreement will be instituted exclusively
in Broward County, Florida.

 

i)Entire Agreement.
This Security Agreement, together with the attached schedules and exhibits, and the documents referred to herein constitute the
entire agreement among the parties.

 

j)Counterparts;
Facsimile/PDF Signatures. This Security Agreement may be executed in two or more counterparts, and by facsimile signatures
or portable document format (.pdf or similar format), each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

 

k)Effectiveness.
This Security Agreement shall be deemed effective upon the Effective Date of the Loan Agreement (as defined therein).

 

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IN WITNESS WHEREOF,
each of the Parties hereto has caused this Security Agreement to be signed individually or by its respective duly authorized officer
as of the date first written above.

 

 

	DEBTOR:	TREBOR INDUSTRIES, INC.	 
	 	 	 
	 	/S/ROBERT CARMICHAEL	 
	 	Robert Carmichael, Chief Executive Officer	 
	 	 	 
	 	 	 
	SECURED PARTY:	MIKKEL PITZNER	 
	 	 	 
	 	/S/MIKKEL PITZNER	 
	 	Mikkel Pitzner, individually	 
	 	 	 
	 	 	 

  

 

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SCHEDULE A

 

Collateral

 

“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 Debtor, including, without limitations, machinery, equipment, computers, appliances,
furniture, fixtures, 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 Debtor’s businesses and all improvements
thereto; and

 

		(ii)	All inventory of the Debtor; and

 

		(iii)	All receivables of the Debtor 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, and equipment 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

 

		(iv)	All of the Debtor’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)-(iii)
above.STOCK
OPTION AGREEMENT

 

THIS STOCK OPTION AGREEMENT
(the “Agreement”) is made and entered into on October 30, 2013, by and between Brownie’s Marine Group,
Inc., a Nevada corporation (the “Company”) and Mikkel Pitzner (“Optionee”).

 

RECITALS

 

WHEREAS, the
Company has agreed to issue options to purchase shares of common stock of the Company to Optionee pursuant to that certain Loan
Agreement dated even herewith (the “Loan Agreement”).

 

NOW, THEREFORE,
in consideration of the foregoing provisions, the mutual covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereto
agree as follows:

 

1.Grant of
Option. The Company hereby grants, bargains, sells, conveys and delivers unto Optionee an option (the “Option”)
to purchase One Million Eight Hundred Two Thousand Five Hundred Sixty-Five (1,802,565) shares of the Company’s common stock
(the “Option Shares”), exercisable at the time and in the manner set forth below.

 

1.1.Option
Price. The price that Optionee shall pay for the Option Shares in the exercise of the Option shall be One Cent ($0.01)
per share (the “Option Price”), as adjusted.

 

1.2.Option
Period. The Option may be exercised at any time and from time to time commencing on the effective date of the Loan Agreement
and ending two (2) years from the date hereof (the “Option Period”).

 

1.3.Vesting
of Option. This right to purchase the Option Shares is immediately vested.

 

1.4.Exercise
of Option. The Option to acquire the Option Shares may be exercised by Optionee during the Option Period by delivery to
the Company of the Option Price in certified or good funds or other funds as accepted by the Company, along with a written notice,
substantially in the Exercise Form attached hereto, indicating that Optionee is electing to exercise the Option to acquire the
Option Shares. This Option may also be exercised at such time by means of a “cashless exercise” in which the Optionee
shall be entitled to receive a certificate for the number of Option Shares equal to the quotient obtained by dividing [(A-B) (X)]
by (A), where:

 

(A) =
the closing price on the trading day immediately preceding the date of such election;

 

(B) =
the Option Price of the Options as adjusted; and

 

(X) =
the number of Option Shares issuable upon exercise of the Option in accordance with the terms of this Option.

 

    	 

    	 

    

 

2.Termination
of Option. To the extent not exercised, the Option shall terminate upon the end of the Option Period.

 

3.Securities
Laws. The Option and the Option Shares have not been registered under the Securities Act of 1933, as amended (the “Act”).
The Company has no obligations to ever register the Option or the Option Shares. All shares of common stock acquired upon the exercise
of the Option shall be “restricted securities” as that term is defined in Rule 144 promulgated under the Act. The certificate
representing the shares shall bear an appropriate legend restricting their transfer. Such shares cannot be sold, transferred, assigned
or otherwise hypothecated without registration under the Act or unless a valid exemption from registration is then available under
applicable federal and state securities laws and the Company has been furnished with an opinion of counsel satisfactory in form
and substance to the Company that such registration is not required.

 

4.Reclassification,
Consolidation or Merger. If and to the extent that the number of issued common shares of the Company shall be increased
or reduced by a change in par value, combination, subdivision, reclassification, distribution of a dividend payable in shares,
or the like, the number of shares subject to Option and the Option Price for them shall be proportionately adjusted. If the Company
is reorganized or consolidated or merged with another corporation, Optionee shall be entitled to receive options covering shares
of such reorganized, consolidated or merged company in the same proportion at an equivalent price, and subject to the same conditions.
The new Option or assumption of the old Option shall not give Optionee additional benefits, which he did not have under the old
Option.

 

5.Rights
Prior to Exercise of Option. The Option is nontransferable by Optionee without prior consent of the Company, and during
Optionee’s lifetime is exercisable only by Optionee. In the event of Optionee’s death, his personal representative
may exercise the Option as to any Option Shares not previously exercised during his lifetime until the end of the Option Period.
Optionee shall have no rights as a shareholder in the Option Shares until payment of the Option Price and delivery to him of such
shares as herein provided.

 

6.Consultation
With Counsel. The Optionee has consulted with such independent legal counsel or other advisory he deems appropriate to
assist him in the consummation of this Agreement.

 

7.Notices.
All notices, waivers, demands and instructions given in connection with this Agreement shall be made in writing, with a copy to
each party, and shall be deemed to have been duly given and delivered (a) five (5) days after posting if mailed by U.S. Mail, certified
or registered, return receipt requested, postage prepaid, or (b) upon receipt if sent by overnight courier maintaining records
of receipt by addresses, by hand or by telecopy, with the original notice being sent the same day by one of the foregoing methods,
addressed provided under the Loan Agreement (or to such other address as a party may from time to time designate by notice to all
other parties as aforesaid).

 

8.Further
Assurances. Each of the parties hereto shall execute such other instruments, documents and papers and shall take such further
actions, as may be reasonably required or appropriate to carry out the provisions hereof.

 

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9.Entire
Agreement. This Agreement constitutes the full and complete understanding of the parties with respect to its subject matter,
is an exclusive statement of the terms and conditions of their agreement in relation hereto, and supersedes all prior negotiations,
understandings and agreements, whether written or oral, between the parties with respect hereto.

 

10.Governing
Law. This Agreement shall be governed by, construed under, and enforced in accordance with the laws of the State of Florida
without regard to any conflict-of-laws provisions to the contrary. All questions concerning the construction, validity, enforcement
and interpretation of this Option shall be determined in accordance with the provisions of the Loan Agreement.

 

11.Counterparts.
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which, when taken
together shall constitute one and the same instrument.

 

12.Effectiveness.
This Agreement shall be deemed effective upon the Effective Date of the Loan Agreement (as defined therein).

 

IN WITNESS WHEREOF,
the parties have executed this Agreement as of the date first above written.

 

THE COMPANY:

 

BROWNIE’S MARINE GROUP, INC.

 

By:  /s/ROBERT CARMICHAEL

Name:  Robert Carmichael

Its:  Chief Executive Officer

 

OPTIONEE:

 

/s/MIKKEL PITZNER

Mikkel Pitzner

 

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EXERCISE
FORM

 

Brownie’s Marine Group, Inc.

940 N.W. 1st Street

Fort Lauderdale, Florida 33311

 

The undersigned, pursuant to the provisions
set forth in the attached Option, hereby irrevocably elects to purchase (check applicable box):

 

o
__________ shares of the Common Stock covered by such Option; or

 

		o	the maximum number of shares of Common Stock covered by such Option pursuant to the cashless exercise
procedure set forth in the Option.

 

The undersigned herewith makes payment
of the full purchase price for such shares at the price per share provided for in such Option, which is $_________. Such payment
takes the form of (check applicable box or boxes):

 

		o	$___________ in lawful money of the United States; and/or

 

		o	the cancellation of such number of shares of Common Stock as is necessary, in accordance with the
formula set forth in Section 1.4 to exercise this Option with respect to the maximum number of shares of Common Stock purchasable
pursuant to the cashless exercise procedure set forth in Section 1.4.

 

The undersigned requests that the certificates
for such shares be issued in the name of, and delivered to ___________________________________________, whose address
is _______________________________________________.

 

The undersigned requests and warrants that
all offers and sales by the undersigned of the securities issuable upon exercise of the within Option shall be made pursuant to
registration of the Common Stock under the Securities Act of 1933, as amended (the “Securities Act”) or pursuant to
an exemption from registration under the Securities Act.

 

	Dated:  	 	 	 	 
	 	 	 	(Signature must conform to name of holder as	 
	 	 	 	Specified on the face of the Option)	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	(Address)

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