SECURITY AGREEMENT

Avnet Partner Solutions, a division of Avnet, Inc. ("AVNET"), enters into this Security Agreement (this "Agreement") with SANZ INC. ("Debtor") as of the 12 day of October, 2005 (“Effective Date”).

Debtor agrees that in order to secure the full, prompt and satisfactory performance of each and every obligation of Debtor to AVNET for the goods sold by AVNET to Debtor, including but not limited to Debtor's obligation to make full and timely payment of the invoices issued by AVNET, but subject to the limitation set forth in the fifth unnumbered paragraph of this Agreement (the “Obligations”), Debtor grants to AVNET a first position security interest and continuing lien on all Debtor's right, title and interest (the "Security Interest") (such priority being subject to the fourth unnumbered paragraph of this Agreement and the final unnumbered paragraph of this Agreement) in and to the following described collateral:

The goods sold by AVNET to Debtor (in which AVNET shall be deemed to have a first priority purchase money security interest), as well as all other Debtor goods, inventory, chattel paper, deposit accounts, accounts, accounts receivable, rights to payment of every kind, general intangibles, instruments, equipment and machinery, accessions, furnishings, and fixtures of Debtor, together with all related proceeds, attachments, additions and substitutions, as each of those terms are defined by the Uniform Commercial Code of the State of Arizona in effect as of the date of this Agreement, now existing or hereafter arising out of the business of the Debtor and regardless as to whether such collateral is in the possession of Debtor, warehouseman, bailee, or any other third party (collectively, the "Collateral").

With regards to any first priority security interest held by Wells Fargo Bank, N.A. or any successor-in-interest thereto or assignee (collectively, the “Bank”) in the Collateral, or any first priority security interest held by any agreed substitute lender as contemplated by the final unnumbered paragraph of this Agreement, the Security Interest granted herein shall be deemed a second position priority interest to the Bank’s interest(s).

The Obligations secured by the Security Interest shall be that portion (if any) of the total obligations of Debtor to AVNET outstanding from time to time that exceed $1,000,000. For the avoidance of doubt, if the Debtor’s total obligations to AVNET are hereafter reduced to an amount less than $1,000,000 and are thereafter increased once again to an amount greater than $1,000,000, such excess shall constitute Obligations and shall be secured by the Security Interest without re-execution of this Agreement, re-filing of financing statements, or any other action by any person. Except in connection with the termination of this Agreement, in no event shall AVNET have to withdraw any UCC filing or other financing statements once filed, such documents and related Security Interest remaining effective regardless of the amount of outstanding Obligations.

The Security Interest granted shall at all times be valid, perfected and enforceable against the Debtor and all third parties, in accordance with the terms hereof, as security for the unpaid Obligations owing to

AVNET as provided above and, subject to the terms of this Agreement, the Collateral shall not at any time be subject to any other lien(s) without the prior written approval of AVNET. AVNET hereby grants its prior approval of the lien in favor of the Bank and all other rights of the Bank under its loan/line of credit agreements between the Debtor and the Bank.

Upon mutual agreement of the parties, such agreement not to be unreasonably withheld, and if all Obligations have been paid, AVNET, within fifteen (15) days of such agreement, shall execute any and all instruments and documents, including but not limited to termination statements to any financing statements filed to evidence or perfect the Security Interest that are necessary to evidence the release of the Security Interest in and to the Collateral (the “Release Documents”); thereafter, this Agreement shall terminate. Thereafter, Debtor shall not incur any additional Obligations from AVNET without signing a subsequent Security Agreement.  

Debtor warrants, covenants and agrees: (1) to pay and perform all of the obligations secured by this Agreement (including but not limited to AVNET's cost of enforcement, collection and attorney's fees), to defend title to the Collateral, to keep the Collateral free and clear, except with respect to the Bank, of all mortgages, liens, pledges, charges, encumbrances, further security interests, taxes and assessments and to keep, at its sole expense, the Collateral in good repair and condition; (2) to keep the Collateral insured (with insurance companies providing coverage under this Agreement must be rated by A.M. Best with at least an A- rating and a financial size category of at least Class VII) against loss by fire, theft and other hazards in an amount equal to at least one hundred percent (100%) of the replacement value of the Collateral and eviden