Sample Business Contracts

Commercial Security Agreement - SheerVision Inc. and Vineyard Bank

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                          COMMERCIAL SECURITY AGREEMENT

 Principal     Loan Date    Maturity      Loan No    Call/Coll   Account   Officer   Initials
$300,000.00   12-07-2005   01-15-2007   0412821880          98   128218      601

  References in the shaded area are for Lender's use only and do not limit the
         applicability of this document to any particular loan or item.
Any item above containing "***" has been omitted due to text length limitations.

Grantor: SHEER VISION, INC.                        Lender: Vineyard Bank
         4030 Palos Verdes Drive North, Suite 104          Diamond Bar
         Rolling Hills, CA 90274                           1200 S. Diamond Bar Boulevard
                                                           Diamond Bar, CA 91765


THIS COMMERCIAL SECURITY AGREEMENT dated December 7, 2005, is made and executed
between SHEER VISION, INC. ("Grantor") and Vineyard Bank ("Lender").

GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender
a security interest in the Collateral to secure the Indebtedness and agrees that
Lender shall have the rights stated in this Agreement with respect to the
Collateral, in addition to all other rights which Lender may have by law.

COLLATERAL DESCRIPTION. The word "Collateral" as used in this Agreement means
the following described property, whether now owned or hereafter acquired,
whether now existing or hereafter arising, and wherever located, in which
Grantor is giving to Lender a security interest for the payment of the
Indebtedness and performance of all other obligations under the Note and this

      All Inventory, Chattel Paper, Accounts, Equipment and General Intangibles

In addition, the word "Collateral" also includes all the following, whether now
owned or hereafter acquired, whether now existing or hereafter arising, and
wherever located:

      (A) All accessions, attachments, accessories, tools, parts, supplies,
      replacements of and additions to any of the collateral described
      herein, whether added now or later.

      (B) All products and produce of any of the property described in this
      Collateral section.

      (C) All accounts, general intangibles, instruments, rents, monies,
      payments, and all other rights, arising out of a sale, lease, consignment
      or other disposition of any of the property described in this Collateral

      (D) All proceeds (including insurance proceeds) from the sale,
      destruction, loss, or other disposition of any of the property described
      in this Collateral section, and sums due from a third party who has
      damaged or destroyed the Collateral or from that party's insurer, whether
      due to judgment, settlement or other process.

      (E) All records and data relating to any of the property described in this
      Collateral section, whether in the form of a writing, photograph,
      microfilm, microfiche, or electronic media, together with all of Grantor's
      right, title, and interest in and to all computer software required to
      utilize, create, maintain, and process any such records or data on
      electronic media.

Despite any other provision of this Agreement, Lender is not granted, and will
not have, a nonpurchase money security interest in household goods, to the
extent such a security interest would be prohibited by applicable law. In
addition, if because of the type of any Property, Lender is required to give a
notice of the right to cancel under Truth in Lending for the Indebtedness, then
Lender will not have a security interest in such Collateral unless and until
such a notice is given.

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

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Grantor's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Grantor holds
jointly with someone else and all accounts Grantor may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Grantor authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
Indebtedness against any and all such accounts.

respect to the Collateral, Grantor represents and promises to Lender that:

      PERFECTION OF SECURITY INTEREST. Grantor agrees to take whatever actions
      are requested by Lender to perfect and continue Lender's security interest
      in the Collateral. Upon request of Lender, Grantor will deliver to Lender
      any and all of the documents evidencing or constituting the Collateral,
      and Grantor will note Lender's interest upon any and all chattel paper and
      instruments if not delivered to Lender for possession by Lender.

      NOTICES TO LENDER. Grantor will promptly notify Lender in writing at
      Lender's address shown above (or such other addresses as Lender may
      designate from time to time) prior to any (1) change in Grantor's name;
      (2) change in Grantor's assumed business name(s); (3) change in the
      management of the Corporation Grantor; (4) change in the authorized
      signer(s); (5) change in Grantor's principal office address; (6) change in
      Grantor's state of organization; (7) conversion of Grantor to a new or
      different type of business entity; or (8) change in any other aspect of
      Grantor that directly or indirectly relates to any agreements between
      Grantor and Lender. No change in Grantor's name or state of organization
      will take effect until after Lender has received notice.

      NO VIOLATION. The execution and delivery of this Agreement will not
      violate any law or agreement governing Grantor or to which Grantor is a
      party, and its certificate or articles of incorporation and bylaws do not
      prohibit any term or condition of this Agreement.

      ENFORCEABILITY OF COLLATERAL. To the extent the Collateral consists of
      accounts, chattel paper, or general intangibles, as defined by the Uniform
      Commercial Code, the Collateral is enforceable in accordance with its
      terms, is genuine, and fully complies with all applicable laws and
      regulations concerning form, content and manner of preparation and
      execution, and all persons appearing to be obligated on the Collateral
      have authority and capacity to contract and are in fact obligated as they
      appear to be on the Collateral. At the time any account becomes subject to
      a security interest in favor of Lender, the account shall be a good and
      valid account representing an undisputed, bona fide indebtedness incurred
      by the account debtor, for merchandise held subject to delivery
      instructions or previously shipped or delivered pursuant to a contract of
      sale, or for services previously performed by Grantor with or for the
      account debtor. So long as this Agreement remains in effect, Grantor shall
      not, without Lender's prior written consent, compromise, settle, adjust,
      or extend payment under or with regard to any such Accounts. There shall
      be no


                               COMMERCIAL SECURITY AGREEMENT
Loan No: 0412821880                    (Continued)                        Page 2

      setoffs or counterclaims against any of the Collateral, and no agreement
      shall have been made under which any deductions or discounts may be
      claimed concerning the Collateral except those disclosed to Lender in

      LOCATION OF THE COLLATERAL. Except in the ordinary course of Grantor's
      business, Grantor agrees to keep the Collateral (or to the extent the
      Collateral consists of intangible property such as accounts or general
      intangibles, the records concerning the Collateral) at Grantor's address
      shown above or at such other locations as are acceptable to Lender. Upon
      Lender's request, Grantor will deliver to Lender in form satisfactory to
      Lender a schedule of real properties and Collateral locations relating to
      Grantor's operations, including without limitation the following: (1) all
      real property Grantor owns or is purchasing; (2) all real property Grantor
      is renting or leasing; (3) all storage facilities Grantor owns, rents,
      leases, or uses; and (4) all other properties where Collateral is or may
      be located.

      REMOVAL OF THE COLLATERAL. Except in the ordinary course of Grantor's
      business, including the sales of inventory, Grantor shall not remove the
      Collateral from its existing location without Lender's prior written
      consent. To the extent that the Collateral consists of vehicles, or other
      titled property, Grantor shall not take or permit any action which would
      require application for certificates of title for the vehicles outside the
      State of California, without Lender's prior written consent. Grantor
      shall, whenever requested, advise Lender of the exact location of the

      TRANSACTIONS INVOLVING COLLATERAL. Except for inventory sold or accounts
      collected in the ordinary course of Grantor's business, or as otherwise
      provided for in this Agreement, Grantor shall not sell, offer to sell, or
      otherwise transfer or dispose of the Collateral. While Grantor is not in
      default under this Agreement, Grantor may sell inventory, but only in the
      ordinary course of its business and only to buyers who qualify as a buyer
      in the ordinary course of business. A sale in the ordinary course of
      Grantor's business does not include a transfer in partial or total
      satisfaction of a debt or any bulk sale. Grantor shall not pledge,
      mortgage, encumber or otherwise permit the Collateral to be subject to any
      lien, security interest, encumbrance, or charge, other than the security
      interest provided for in this Agreement, without the prior written consent
      of Lender. This includes security interests even if junior in right to the
      security interests granted under this Agreement. Unless waived by Lender,
      all proceeds from any disposition of the Collateral (for whatever reason)
      shall be held in trust for Lender and shall not be commingled with any
      other funds; provided however, this requirement shall not constitute
      consent by Lender to any sale or other disposition. Upon receipt, Grantor
      shall immediately deliver any such proceeds to Lender.

      TITLE. Grantor represents and warrants to Lender that Grantor holds good
      and marketable title to the Collateral, free and clear of all liens and
      encumbrances except for the lien of this Agreement. No financing statement
      covering any of the Collateral is on file in any public office other than
      those which reflect the security interest created by this Agreement or to
      which Lender has specifically consented. Grantor shall defend Lender's
      rights in the Collateral against the claims and demands of all other

      REPAIRS AND MAINTENANCE. Grantor agrees to keep and maintain, and to cause
      others to keep and maintain, the Collateral in good order, repair and
      condition at all times while this Agreement remains in effect. Grantor
      further agrees to pay when due all claims for work done on, or services
      rendered or material furnished in connection with the Collateral so that
      no lien or encumbrance may ever attach to or be filed against the

      INSPECTION OF COLLATERAL. Lender and Lender's designated representatives
      and agents shall have the right at all reasonable times to examine and
      inspect the Collateral wherever located.

      TAXES, ASSESSMENTS AND LIENS. Grantor will pay when due all taxes,
      assessments and liens upon the Collateral, its use or operation, upon this
      Agreement, upon any promissory note or notes evidencing the Indebtedness,
      or upon any of the other Related Documents. Grantor may withhold any such
      payment or may elect to contest any lien if Grantor is in good faith
      conducting an appropriate proceeding to contest the obligation to pay and
      so long as Lender's interest in the Collateral is not jeopardized in
      Lender's sole opinion. If the Collateral is subjected to a lien which is
      not discharged within fifteen (15) days, Grantor shall deposit with Lender
      cash, a sufficient corporate surety bond or other security satisfactory to
      Lender in an amount adequate to provide for the discharge of the lien plus
      any interest, costs, attorneys' fees or other charges that could accrue as
      a result of foreclosure or sale of the Collateral. In any contest Grantor
      shall defend itself and Lender and shall satisfy any final adverse
      judgment before enforcement against the Collateral. Grantor shall name
      Lender as an additional obligee under any surety bond furnished in the
      contest proceedings. Grantor further agrees to furnish Lender with
      evidence that such taxes, assessments, and governmental and other charges
      have been paid in full and in a timely manner. Grantor may withhold any
      such payment or may elect to contest any lien if Grantor is in good faith
      conducting an appropriate proceeding to contest the obligation to pay and
      so long as Lender's interest in the Collateral is not jeopardized.

      COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Grantor shall comply promptly
      with all laws, ordinances, rules and regulations of all governmental
      authorities, now or hereafter in effect, applicable to the ownership,
      production, disposition, or use of the Collateral, including all laws or
      regulations relating to the undue erosion of highly-erodible land or
      relating to the conversion of wetlands for the production of an
      agricultural product or commodity. Grantor may contest in good faith any
      such law, ordinance or regulation and withhold compliance during any
      proceeding, including appropriate appeals, so long as Lender's interest in
      the Collateral, in Lender's opinion, is not jeopardized.

      HAZARDOUS SUBSTANCES. Grantor represents and warrants that the Collateral
      never has been, and never will be so long as this Agreement remains a lien
      on the Collateral, used in violation of any Environmental Laws or for the
      generation, manufacture, storage, transportation, treatment, disposal,
      release or threatened release of any Hazardous Substance. The
      representations and warranties contained herein are based on Grantor's due
      diligence in investigating the Collateral for Hazardous Substances.
      Grantor hereby (1) releases and waives any future claims against Lender
      for indemnity or contribution in the event Grantor becomes liable for
      cleanup or other costs under any Environmental Laws, and (2) agrees to
      indemnify and hold harmless Lender against any and all claims and losses
      resulting from a breach of this provision of this Agreement. This
      obligation to indemnify shall survive the payment of the Indebtedness and
      the satisfaction of this Agreement.

      MAINTENANCE OF CASUALTY INSURANCE. Grantor shall procure and maintain all
      risks insurance, including without limitation fire, theft and liability
      coverage together with such other insurance as Lender may require with
      respect to the Collateral, in form, amounts, coverages and basis
      reasonably acceptable to Lender and issued by a company or companies
      reasonably acceptable to Lender. Grantor, upon request of Lender, will
      deliver to Lender from time to time the policies or certificates of
      insurance in form satisfactory to Lender, including stipulations that
      coverages will not be cancelled or diminished without at least ten (10)
      days' prior written notice to Lender and not including any disclaimer of
      the insurer's liability for failure to give such a notice. Each insurance
      policy also shall include an endorsement providing that coverage in favor
      of Lender will not be impaired in any way by any act, omission or default
      of Grantor or any other person. In connection with all policies covering
      assets in which Lender holds or is offered a security interest, Grantor
      will provide Lender with such loss payable or other endorsements as Lender
      may require. If Grantor at any time fails to obtain or maintain any
      insurance as required under this Agreement, Lender may (but shall not be
      obligated to) obtain such insurance as Lender deems appropriate, including
      if Lender so chooses "single interest insurance," which will cover only
      Lender's interest in the Collateral.

      APPLICATION OF INSURANCE PROCEEDS. Grantor shall promptly notify Lender of
      any loss or damage to the Collateral. Lender may make proof of loss if
      Grantor fails to do so within fifteen (15) days of the casualty. All
      proceeds of any insurance on the Collateral, including accrued proceeds
      thereon, shall be held by Lender as part of the Collateral. If Lender
      consents to repair or replacement of the damaged or destroyed Collateral,
      Lender shall, upon satisfactory proof of expenditure, pay or reimburse
      Grantor from the proceeds for the reasonable cost of repair or
      restoration. If Lender does not consent to repair or replacement of the
      Collateral, Lender shall retain a sufficient amount of the proceeds to pay
      all of the Indebtedness, and shall pay the balance to Grantor. Any
      proceeds which have not been disbursed with in six (6) months after their
      receipt and which Grantor has not committed to the repair or restoration
      of the Collateral shall be used to prepay the Indebtedness.


                               COMMERCIAL SECURITY AGREEMENT
Loan No: 0412821880                      (Continued)                      Page 3

      INSURANCE RESERVES. Lender may require Grantor to maintain with Lender
      reserves for payment of insurance premiums, which reserves shall be
      created by monthly payments from Grantor of a sum estimated by Lender to
      be sufficient to produce, at least fifteen (15) days before the premium
      due date, amounts at least equal to the insurance premiums to be paid. If
      fifteen (15) days before payment is due, the reserve funds are
      insufficient, Grantor shall upon demand pay any deficiency to Lender. The
      reserve funds shall be held by Lender as a general deposit and shall
      constitute a non-interest-bearing account which Lender may satisfy by
      payment of the insurance premiums required to be paid by Grantor as they
      become due. Lender does not hold the reserve funds in trust for Grantor,
      and Lender is not the agent of Grantor for payment of the insurance
      premiums required to be paid by Grantor. The responsibility for the
      payment of premiums shall remain Grantor's sole responsibility.

      INSURANCE REPORTS. Grantor, upon request of Lender, shall furnish to
      Lender reports on each existing policy of insurance showing such
      information as Lender may reasonably request including the following:
      (1) the name of the insurer; (2) the risks insured; (3) the amount of the
      policy; (4) the property insured; (5) the then current value on the basis
      of which insurance has been obtained and the manner of determining that
      value; and (6) the expiration date of the policy. In addition, Grantor
      shall upon request by Lender (however not more often than annually) have
      an independent appraiser satisfactory to Lender determine, as applicable,
      the cash value or replacement cost of the Collateral.

      FINANCING STATEMENTS. Grantor authorizes Lender to file a UCC financing
      statement, or alternatively, a copy of this Agreement to perfect Lender's
      security interest. At Lender's request, Grantor additionally agrees to
      sign all other documents that are necessary to perfect, protect, and
      continue Lender's security interest in the Property. Grantor will pay all
      filing fees, title transfer fees, and other fees and costs involved unless
      prohibited by law or unless Lender is required by law to pay such fees and
      costs. Grantor irrevocably appoints Lender to execute documents necessary
      to transfer title if there is a default. Lender may file a copy of this
      Agreement as a financing statement. If Grantor changes Grantor's name or
      address, or the name or address of any person granting a security interest
      under this Agreement changes, Grantor will promptly notify the Lender of
      such change.

as otherwise provided below with respect to accounts, Grantor may have
possession of the tangible personal property and beneficial use of all the
Collateral and may use it in any lawful manner not inconsistent with this
Agreement or the Related Documents, provided that Grantor's right to possession
and beneficial use shall not apply to any Collateral where possession of the
Collateral by Lender is required by law to perfect Lender's security interest in
such Collateral. Until otherwise notified by Lender, Grantor may collect any of
the Collateral consisting of accounts. At any time and even though no Event of
Default exists, Lender may exercise its rights to collect the accounts and to
notify account debtors to make payments directly to Lender for application to
the Indebtedness. If Lender at any time has possession of any Collateral,
whether before or after an Event of Default, Lender shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral if
Lender takes such action for that purpose as Grantor shall request or as Lender,
in Lender's sole discretion, shall deem appropriate under the circumstances, but
failure to honor any request by Grantor shall not of itself be deemed to be a
failure to exercise reasonable care. Lender shall not be required to take any
steps necessary to preserve any rights in the Collateral against prior parties,
nor to protect, preserve or maintain any security interest given to secure the

LENDER'S EXPENDITURES. If any action or proceeding is commenced that would
materially affect Lender's interest in the Collateral or if Grantor fails to
comply with any provision of this Agreement or any Related Documents, including
but not limited to Grantor's failure to discharge or pay when due any amounts
Grantor is required to discharge or pay under this Agreement or any Related
Documents, Lender on Grantor's behalf may (but shall not be obligated to) take
any action that Lender deems appropriate, including but not limited to
discharging or paying all taxes, liens, security interests, encumbrances and
other claims, at any time levied or placed on the Collateral and paying all
costs for insuring, maintaining and preserving the Collateral. All such
expenditures incurred or paid by Lender for such purposes will then bear
interest at the rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Grantor. All such expenses will become a part
of the Indebtedness and, at Lender's option, will (A) be payable on demand;
(B) be added to the balance of the Note and be apportioned among and be payable
with any installment payments to become due during either (1) the term of any
applicable insurance policy; or (2) the remaining term of the Note; or (C) be
treated as a balloon payment which will be due and payable at the Note's
maturity. The Agreement also will secure payment of these amounts. Such right
shall be in addition to all other rights and remedies to which Lender may be
entitled upon Default.

DEFAULT. Each of the following shall constitute an Event of Default under this

      PAYMENT DEFAULT. Grantor fails to make any payment when due under the

      OTHER DEFAULTS. Grantor fails to comply with or to perform any other term,
      obligation, covenant or condition contained in this Agreement or in any of
      the Related Documents or to comply with or to perform any term,
      obligation, covenant or condition contained in any other agreement between
      Lender and Grantor.

      DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor default
      under any loan, extension of credit, security agreement, purchase or sales
      agreement, or any other agreement, in favor of any other creditor or
      person that may materially affect any of Grantor's property or Grantor's
      or any Grantor's ability to repay the Indebtedness or perform their
      respective obligations under this Agreement or any of the Related

      FALSE STATEMENTS. Any warranty, representation or statement made or
      furnished to Lender by Grantor or on Grantor's behalf under this Agreement
      or the Related Documents is false or misleading in any material respect,
      either now or at the time made or furnished or becomes false or misleading
      at any time thereafter.

      DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related
      Documents ceases to be in full force and effect (including failure of any
      collateral document to create a valid and perfected security interest or
      lien) at any time and for any reason.

      INSOLVENCY. The dissolution or termination of Grantor's existence as a
      going business, the insolvency of Grantor, the appointment of a receiver
      for any part of Grantor's property, any assignment for the benefit of
      creditors, any type of creditor workout, or the commencement of any
      proceeding under any bankruptcy or insolvency laws by or against Grantor.

      CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
      forfeiture proceedings, whether by judicial proceeding, self-help,
      repossession or any other method, by any creditor of Grantor or by any
      governmental agency against any collateral securing the Indebtedness. This
      includes a garnishment of any of Grantor's accounts, including deposit
      accounts, with Lender. However, this Event of Default shall not apply if
      there is a good faith dispute by Grantor as to the validity or
      reasonableness of the claim which is the basis of the creditor or
      forfeiture proceeding and if Grantor gives Lender written notice of the
      creditor or forfeiture proceeding and deposits with Lender monies or a
      surety bond for the creditor or forfeiture proceeding, in an amount
      determined by Lender, in its sole discretion, as being an adequate reserve
      or bond for the dispute.

      EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
      respect to any Guarantor of any of the Indebtedness or Guarantor dies or
      becomes incompetent or revokes or disputes the validity of, or liability
      under, any Guaranty of the Indebtedness.

      ADVERSE CHANGE. A material adverse change occurs in Grantor's financial
      condition, or Lender believes the prospect of payment or performance of
      the Indebtedness is impaired.

      CURE PROVISIONS. If any default, other than a default in payment is
      curable and if Grantor has not been given a notice of a breach of the same
      provision of this Agreement within the preceding twelve (12) months, it
      may be cured if Grantor, after receiving written notice from Lender
      demanding cure of such default: (1) cures the default within fifteen (15)
      days: or (2) if the cure requires more than fifteen (15) days, immediately
      initiates steps which Lender deems in Lender's sole discretion to be
      sufficient to cure the default and thereafter continues and completes all


                               COMMERCIAL SECURITY AGREEMENT
Loan No: 0412821880                      (Continued)                      Page 4

      reasonable and necessary steps sufficient to produce compliance as soon as
      reasonably practical.

RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a secured
party under the California Uniform Commercial Code. In addition and without
limitation, Lender may exercise any one or more of the following rights and

      ACCELERATE INDEBTEDNESS. Lender may declare the entire Indebtedness,
      including any prepayment penalty which Grantor would be required to pay,
      immediately due and payable, without notice of any kind to Grantor.

      ASSEMBLE COLLATERAL. Lender may require Grantor to deliver to Lender all
      or any portion of the Collateral and any and all certificates of title and
      other documents relating to the Collateral. Lender may require Grantor to
      assemble the Collateral and make it available to Lender at a place to be
      designated by Lender. Lender also shall have full power to enter upon the
      property of Grantor to take possession of and remove the Collateral. If
      the Collateral contains other goods not covered by this Agreement at the
      time of repossession, Grantor agrees Lender may take such other goods,
      provided that Lender makes reasonable efforts to return them to Grantor
      after repossession.

      SELL THE COLLATERAL. Lender shall have full power to sell, lease,
      transfer, or otherwise deal with the Collateral or proceeds thereof in
      Lender's own name or that of Grantor. Lender may sell the Collateral at
      public auction or private sale. Unless the Collateral threatens to decline
      speedily in value or is of a type customarily sold on a recognized market,
      Lender will give Grantor, and other persons as required by law, reasonable
      notice of the time and place of any public sale, or the time after which
      any private sale or any other disposition of the Collateral is to be made.
      However, no notice need be provided to any person who, after Event of
      Default occurs, enters into and authenticates an agreement waiving that
      person's right to notification of sale. The requirements of reasonable
      notice shall be met if such notice is given at least ten (10) days before
      the time of the sale or disposition. All expenses relating to the
      disposition of the Collateral, including without limitation the expenses
      of retaking, holding, insuring, preparing for sale and selling the
      Collateral, shall become a part of the Indebtedness secured by this
      Agreement and shall be payable on demand, with interest at the Note rate
      from date of expenditure until repaid.

      APPOINT RECEIVER. Lender shall have the right to have a receiver appointed
      to take possession of all or any part of the Collateral, with the power to
      protect and preserve the Collateral, to operate the Collateral preceding
      foreclosure or sale, and to collect the Rents from the Collateral and
      apply the proceeds, over and above the cost of the receivership, against
      the Indebtedness. The receiver may serve without bond if permitted by law.
      Lender's right to the appointment of a receiver shall exist whether or not
      the apparent value of the Collateral exceeds the Indebtedness by a
      substantial amount. Employment by Lender shall not disqualify a person
      from serving as a receiver.

      COLLECT REVENUES, APPLY ACCOUNTS. Lender, either itself or through a
      receiver, may collect the payments, rents, income, and revenues from the
      Collateral. Lender may at any time in Lender's discretion transfer any
      Collateral into Lender's own name or that of Lender's nominee and receive
      the payments, rents, income, and revenues therefrom and hold the same as
      security for the Indebtedness or apply it to payment of the Indebtedness
      in such order of preference as Lender may determine. Insofar as the
      Collateral consists of accounts, general intangibles, insurance policies,
      instruments, chattel paper, choses in action, or similar property, Lender
      may demand, collect, receipt for, settle, compromise, adjust, sue for,
      foreclose, or realize on the Collateral as Lender may determine, whether
      or not Indebtedness or Collateral is then due. For these purposes, Lender
      may, on behalf of and in the name of Grantor, receive, open and dispose of
      mail addressed to Grantor: change any address to which mail and payments
      are to be sent; and endorse notes, checks, drafts, money orders, documents
      of title, instruments and items pertaining to payment, shipment, or
      storage of any Collateral. To facilitate collection, Lender may notify
      account debtors and obligors on any Collateral to make payments directly
      to Lender.

      OBTAIN DEFICIENCY. If Lender chooses to sell any or all of the Collateral,
      Lender may obtain a judgment against Grantor for any deficiency remaining
      on the Indebtedness due to Lender after application of all amounts
      received from the exercise of the rights provided in this Agreement.
      Grantor shall be liable for a deficiency even if the transaction described
      in this subsection is a sale of accounts or chattel paper.

      OTHER RIGHTS AND REMEDIES. Lender shall have all the rights and remedies
      of a secured creditor under the provisions of the Uniform Commercial Code,
      as may be amended from time to time. In addition, Lender shall have and
      may exercise any or all other rights and remedies it may have available at
      law, in equity, or otherwise.

      ELECTION OF REMEDIES. Except as may be prohibited by applicable law, all
      of Lender's rights and remedies, whether evidenced by this Agreement, the
      Related Documents, or by any other writing, shall be cumulative and may be
      exercised singularly or concurrently. Election by Lender to pursue any
      remedy shall not exclude pursuit of any other remedy, and an election to
      make expenditures or to take action to perform an obligation of Grantor
      under this Agreement, after Grantor's failure to perform, shall not affect
      Lender's right to declare a default and exercise its remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

      AMENDMENTS. This Agreement, together with any Related Documents,
      constitutes the entire understanding and agreement of the parties as to
      the matters set forth in this Agreement. No alteration of or amendment to
      this Agreement shall be effective unless given in writing and signed by
      the party or parties sought to be charged or bound by the alteration or

      ARBITRATION. Lender and Grantor agree that all disputes, claims and
      controversies between them whether individual, joint, or class in nature,
      arising from this Agreement or otherwise, including without limitation
      contract and tort disputes, shall be arbitrated pursuant to the financial
      services rules of Endispute, Inc., d/b/a J.A.M.S./ENDISPUTE or its
      successor in effect at the time the claim is filed, upon request of either
      party. No act to take or dispose of any Collateral shall constitute a
      Waiver of this arbitration agreement or be prohibited by this arbitration
      agreement. This includes, without limitation, obtaining injunctive relief
      or a temporary restraining order; invoking a power of sale under any deed
      of trust or mortgage; obtaining a writ of attachment or imposition of a
      receiver; or exercising any rights relating to personal property,
      including taking or disposing of such property with or without judicial
      process pursuant Article 9 of the Uniform Commercial Code. Any disputes,
      claims, or controversies concerning the lawfulness or reasonableness of
      any act, or exercise of any right, concerning any Collateral, including
      any claim to rescind, reform, or otherwise modify any agreement relating
      to the Collateral, shall also be arbitrated, provided however that no
      arbitrator shall have the right or the power to enjoin or restrain any act
      of any party. Grantor and Lender agree that in the event of an action for
      judicial foreclosure pursuant to California Code of Civil Procedure
      Section 726, or any similar provision in any other state, the commencement
      of such an action will not constitute a waiver of the right to arbitrate
      and the court shall refer to arbitration as much of such action, including
      counterclaims, as lawfully may be referred to arbitration. Judgment upon
      any award rendered by any arbitrator may be entered in any court having
      jurisdiction. Nothing in this Agreement shall preclude any party from
      seeking equitable relief from a court of competent jurisdiction. The
      statute of limitations, estoppel, waiver, laches, and similar doctrines
      which would otherwise be applicable in an action brought by a party shall
      be applicable in any arbitration proceeding, and the commencement of an
      arbitration proceeding shall be deemed the commencement of an action for
      these purposes. The Federal Arbitration Act shall apply to the
      construction, interpretation, and enforcement of this arbitration

      ATTORNEYS' FEES; EXPENSES. Grantor agrees to pay upon demand all of
      Lender's costs and expenses, including Lender's attorneys' fees and
      Lender's legal expenses, incurred in connection with the enforcement of
      this Agreement. Lender may hire or pay someone else to help enforce this
      Agreement, and Grantor shall pay the costs and expenses of such
      enforcement. Costs and expenses include Lender's attorneys' fees and legal
      expenses whether or not there is a lawsuit, including attorneys' fees and
      legal expenses for bankruptcy or proceedings (including efforts to


                               COMMERCIAL SECURITY AGREEMENT
Loan No: 0412821880                      (Continued)                      Page 5

      modify or vacate any automatic stay or injunction), appeals, and any
      anticipated post-judgment collection services. Grantor also shall pay all
      court costs and such additional fees as may be directed by the court.

      CAPTION HEADINGS. Caption headings in this Agreement are for convenience
      purposes only and are not to be used to interpret or define the provisions
      of this Agreement.

      GOVERNING LAW. This Agreement will be governed by federal law applicable
      to Lender and, to the extent not preempted by federal law, the laws of the
      State of California without regard to its conflicts of law provisions.
      This Agreement has been accepted by Lender in the State of California.

      PREFERENCE PAYMENTS. Any monies Lender pays because of an asserted
      preference claim in Grantor's bankruptcy will become a part of the
      Indebtedness and, at Lender's option, shall be payable by Grantor as
      provided in this Agreement.

      NO WAIVER BY LENDER. Lender shall not be deemed to have waived any rights
      under this Agreement unless such waiver is given in writing and signed by
      Lender. No delay or omission on the part of Lender in exercising any right
      shall operate as a waiver of such right or any other right. A waiver by
      Lender of a provision of this Agreement shall not prejudice or constitute
      a waiver of Lender's right otherwise to demand strict compliance with that
      provision or any other provision of this Agreement. No prior waiver by
      Lender, nor any course of dealing between Lender and Grantor, shall
      constitute a waiver of any of Lender's rights or of any of Grantor's
      obligations as to any future transactions. Whenever the consent of Lender
      is required under this Agreement, the granting of such consent by Lender
      in any instance shall not constitute continuing consent to subsequent
      instances where such consent is required and in all cases such consent may
      be granted or withheld in the sole discretion of Lender.

      NOTICES. Any notice required to be given under this Agreement shall be
      given in writing, and shall be effective when actually delivered, when
      actually received by telefacsimile (unless otherwise required by law),
      when deposited with a nationally recognized overnight courier, or, if
      mailed, when deposited in the United States mail, as first class,
      certified or registered mail postage prepaid, directed to the addresses
      shown near the beginning of this Agreement. Any party may change its
      address for notices under this Agreement by giving formal written notice
      to the other parties, specifying that the purpose of the notice is to
      change the party's address. For notice purposes, Grantor agrees to keep
      Lender informed at all times of Grantor's current address. Unless
      otherwise provided or required by law, if there is more than one Grantor,
      any notice given by Lender to any Grantor is deemed to be notice given to
      all Grantors.

      POWER OF ATTORNEY. Grantor hereby appoints Lender as Grantor's irrevocable
      attorney-in-fact for the purpose of executing any documents necessary to
      perfect, amend, or to continue the security interest granted in this
      Agreement or to demand termination of filings of other secured parties.
      Lender may at any time, and without further authorization from Grantor,
      file a carbon, photographic or other reproduction of any financing
      statement or of this Agreement for use as a financing statement. Grantor
      will reimburse Lender for all expenses for the perfection and the
      continuation of the perfection of Lender's security interest in the

      WAIVER OF CO-OBLIGOR'S RIGHTS. If more than one person is obligated for
      the Indebtedness, Grantor irrevocably waives, disclaims and relinquishes
      all claims against such other person which Grantor has or would otherwise
      have by virtue of payment of the Indebtedness or any part thereof,
      specifically including but not limited to all rights of indemnity,
      contribution or exoneration.

      SEVERABILITY. If a court of competent jurisdiction finds any provision of
      this Agreement to be illegal, invalid, or unenforceable as to any
      circumstance, that finding shall not make the offending provision illegal,
      invalid, or unenforceable as to any other circumstance. If feasible, the
      offending provision shall be considered modified so that it becomes legal,
      valid and enforceable. If the offending provision cannot be so modified,
      it shall be considered deleted from this Agreement. Unless otherwise
      required by law, the illegality, invalidity, or unenforceability of any
      provision of this Agreement shall not affect the legality, validity or
      enforceability of any other provision of this Agreement.

      SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this
      Agreement on transfer of Grantor's interest, this Agreement shall be
      binding upon and inure to the benefit of the parties, their successors and
      assigns. If ownership of the Collateral becomes vested in a person other
      than Grantor, Lender, without notice to Grantor, may deal with Grantor's
      successors with reference to this Agreement and the Indebtedness by way of
      forbearance or extension without releasing Grantor from the obligations of
      this Agreement or liability under the Indebtedness.

      warranties, and agreements made by Grantor in this Agreement shall survive
      the execution and delivery of this Agreement, shall be continuing in
      nature, and shall remain in full force and effect until such time as
      Grantor's Indebtedness shall be paid in full.

      TIME IS OF THE ESSENCE. Time is of the essence in the performance of this

      WAIVE JURY. All parties to this Agreement hereby waive the right to any
      jury trial in any action, proceeding, or counterclaim brought by any party
      against any other party.

DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Agreement. Unless specifically stated to the
contrary, all references to dollar amounts shall mean amounts in lawful money of
the United States of America. Words and terms used in the singular shall include
the plural, and the plural shall include the singular, as the context may
require. Words and terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code:

      AGREEMENT. The word "Agreement" means this Commercial Security Agreement,
      as this Commercial Security Agreement may be amended or modified from time
      to time, together with all exhibits and schedules attached to this
      Commercial Security Agreement from time to time.

      BORROWER. The word "Borrower" means SHEER VISION, INC. and includes all
      co-signers and co-makers signing the Note.

      COLLATERAL. The word "Collateral" means all of Grantor's right, title and
      interest in and to all the Collateral as described in the Collateral
      Description section of this Agreement.

      DEFAULT. The word "Default" means the Default set forth in this Agreement
      in the section titled "Default".

      ENVIRONMENTAL LAWS. The words "Environmental Laws" mean any and all state,
      federal and local statutes, regulations and ordinances relating to the
      protection of human health or the environment, including without
      limitation the Comprehensive Environmental Response. Compensation, and
      Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.
      ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub.
      L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49
      U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act,
      42 U.S.C. Section 6901, et seq., Chapters 6.5 through 7.7 of Division 20
      of the California Health and Safety Code, Section 25100, et seq., or other
      applicable state or federal laws, rules, or regulations adopted pursuant

      EVENT OF DEFAULT. The words "Event of Default" mean any of the events of
      default set forth in this Agreement in the default section of this

      GRANTOR. The word "Grantor" means SHEER VISION, INC.,

      GUARANTOR. The word "Guarantor" means any guarantor, surety, or
      accommodation party of any or all of the Indebtedness.


                               COMMERCIAL SECURITY AGREEMENT
Loan No: 0412821880                      (Continued)                      Page 6

      GUARANTY. The word "Guaranty" means the guaranty from Guarantor to Lender,
      including without limitation a guaranty of all or part of the Note.

      HAZARDOUS SUBSTANCES. The words "Hazardous Substances" mean materials
      that, because of their quantity, concentration or physical, chemical or
      infectious characteristics, may cause or pose a present or potential
      hazard to human health or the environment when improperly used, treated,
      stored, disposed of, generated, manufactured, transported or otherwise
      handled. The words "Hazardous Substances" are used in their very broadest
      sense and include without limitation any and all hazardous or toxic
      substances, materials or waste as defined by or listed under the
      Environmental Laws. The term "Hazardous Substances" also includes, without
      limitation, petroleum and petroleum by-products or any fraction thereof
      and asbestos.

      INDEBTEDNESS. The word "Indebtedness" means the indebtedness evidenced by
      the Note or Related Documents, including all principal and interest
      together with all other indebtedness and costs and expenses for which
      Grantor is responsible under this Agreement or under any of the Related
      Documents. Specifically, without limitation, Indebtedness includes all
      amounts that may be indirectly secured by the Cross-Collateralization
      provision of this Agreement.

      LENDER. The word "Lender" means Vineyard Bank, its successors and assigns.

      NOTE. The word "Note" means and includes without limitation all of
      Borrower s promissory notes and/or credit agreements evidencing Borrower s
      loan obligations in favor of Lender, together with all renewals of,
      extensions of, modifications of, refinancings of, consolidations of and
      substitutions for promissory notes or credit agreements.

      PROPERTY. The word "Property" means all of Grantor's right, title and
      interest in and to all the Property as described in the "Collateral
      Description" section of this Agreement.

      RELATED DOCUMENTS. The words "Related Documents" mean all promissory
      notes, credit agreements, loan agreements, environmental agreements,
      security agreements, mortgages, deeds of trust, security deeds, collateral
      mortgages, and all other instruments, agreements and documents, whether
      now or hereafter existing, executed in connection with the Indebtedness.




By: /s/ Suzanne Lewsadder
    Suzanne Lewsadder, President of SHEER VISION,

      LASER PRO Lending, Ver. Copr. Harland Financial Solutions,
 Inc. 1997, 2005. All Rights Reserved. - CA F:\LPRO\CFI\LPL\E40.FC TR-4637 PR-26