Schechter & Co. Limited
12 Charles Street, Suite B
Mayfair, London W1J 5DR
United Kingdom
23 April 2007

Bio Solutions Manufacturing, Inc.
4440 South Arville, # 6
Las Vegas, Nevada 89103
USA

For the attention of Mr David Bennett, President & CEO
 
Dear Sirs
 

     
1.
This letter sets forth the basis of understanding between Bio Solutions
Manufacturing, Inc. and its affiliated companies (collectively “BSLM” or the
“Company”) and Schechter & Co. Limited (“Schechter”) and affiliated companies
(“Schechter Group”), whereby Schechter will act as BSLM’s lead financial adviser
in seeking to arrange an initial private placement of approximately $30 million
of Project Finance Notes to construct a series of 12 Bio-Diesel Production
Plants at an approximate cost of $2.5 million per plant (the “Transaction”).
     
In acting as your financial adviser, Schechter:
       
(i)
will prepare, and advise in relation to, a confidential memorandum
(“Memorandum”) containing all the information that Schechter may deem necessary
to effect the successful placement of the financing. This Memorandum will be
submitted to the Company for approval by its management that its contents are
true and accurate and not misleading in anyway before it is distributed to any
third party and the Company shall afford to Schechter and its representatives
full co-operation in its preparation;
       
(ii)
has an exclusive right in relation to a secured private placement, for a period
of 120 days from the time the Company has approved the final Memorandum, to
arrange the Transaction and will exert its reasonable efforts to do so. The
private placement of such securities is subject to the terms and form of this
financing being mutually agreeable to both the Company, at its sole discretion,
and the investors (“Note Purchasers”). Schechter will contact potential Note
Purchasers and assist in the negotiations and the structuring of the
Transaction;
       
(iii)
acknowledges, with respect to the aforementioned exclusivity, that the following
investors have already been approached independently and fall outside the scope
of this agreement:

Tel: +44 (0)20 7629 7729 Fax: +44 (0)20 7629 3196
Website: www.schechterco.com E-mail: larry@schechterco.com Mobile: +44 (0)7909
990 178

Company No. 4396905. Registered in England and Wales. Registered office as
above.
VAT Registration No. 801985424
Regulated by the Financial Services Authority.
 

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Schechter & Co. Limited
- Highland Capital Management, L.P.;
- ACI Capital;
- Warburg Pincus;
- Laurus Funds;
- EnTrust Capital; and
- Wachovia Bank NA;

For clarity, a municipal deal fully funded out of a revenue bond also falls
outside the scope of this agreement.

With respect to the aforementioned exclusivity, the Company acknowledges that no
other potential Note Purchasers other than those listed in (iii) above have been
contacted about the Transaction and further acknowledges that any and all Note
Purchasers that participate in the placement fall inside the scope of this
agreement.

(The “Engagement”).

For the avoidance of doubt, Schechter will be acting as the Company’s agent in
arranging the private placement but shall not be entitled to bind the Company.
Schechter may, as appropriate, involve other members of the Schechter Group or
other registered broker dealers in the Engagement, provided that as between the
Company and Schechter, Schechter shall remain fully responsible for the acts and
omissions of the other members of the Group or broker dealers so involved.

Fees and Expenses

2.
As compensation for the services to be performed by Schechter pursuant to the
Engagement, the Company hereby agrees to pay Schechter the following fees.

A cash fee equal to 5.0% (five per cent.) of the principal amount of funds
raised (“the Funds”). The fee is payable at the time the Funds are received by
the Company or the acceptance of the Funds is foregone by the Company after the
execution of a definitive agreement between the Company and the Note purchasers,
whether or not the Funds are drawn down immediately or a delayed takedown is
secured.

For clarity, the cash fee is payable when the first dollar is drawn down per
project and will be paid out of the proceeds of each funding.

If the Notes are sold with warrants, in addition to the cash fee, Schechter will
receive warrants equal to 5.0% (five per cent.) of the warrants issued pro rata
for each investor on the same terms and conditions as the investor. Schechter
may keep such warrants in its own name or nominee’s name at its discretion.
If the Notes are sold without warrants, in addition to the cash fee, Schechter
will receive pure common stock or net profit interest equal to 5.0% (five per
cent.) issued pro rata for each investor on the plants financed.

(Collectively, the “Fees”).

The Company has represented its intention to construct 60 Bio Diesel plants over
five years. Provided that the same investor group commits to fund future plants
beyond the initial Transaction, Schechter will receive the same Fees mentioned
above less 1.0% (one per cent for
 
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Schechter & Co. Limited

the next 12 plants to be financed. In other words, if a new facility is
committed for future plants 13-24, Schechter will receive 4.0% (four per cent.)
of the above Fees, if a new facility is committed for future plants 25-36,
Schechter will receive 3.0% (three per cent.) on the above Fees, and so on. This
clause shall survive any termination of the agreement and arrangements contained
in this letter.

BSLM undertakes that it will promptly reimburse Schechter for all reasonable
out-of-pocket costs and expenses properly incurred by it in relation to the
Engagement, provided that total expenses, including any legal fees for
Schechter’s legal advisors, do not exceed $25,000 without the Company’s written
consent. No individual expense in excess of $2,500 will be incurred without the
Company’s approval.

In the event that Schechter fails to perform and investor due diligence confirms
Company representations, out-of-pocket expenses will be borne by Schechter. For
clarity, in the event that an offer of funding is made by an investor, all
out-of-pocket expenses will be paid by the Company regardless of whether the
offer is accepted or not.

Schechter understands that VAT is not applicable to the services it renders to
BSLM. However, the Company will pay to Schechter, if applicable, any additional
VAT chargeable in respect of payments made by BSLM to us (including under clause
4).

BSLM represents and warrants that it has not agreed that any person is entitled
directly or indirectly to make any claim against Schechter in respect of making
the introduction between Schechter and the Company.

If Schechter is successful in this Engagement, the Company will grant Schechter
a right of first refusal to finance non-US facilities. Such right of first
refusal will expire 90 days from the notification to install sites outside of
the United States.

Provision of Information

3.
BSLM will provide Schechter with all material information in its possession
relevant for the purposes of the Engagement and will ensure that such
information is, to the best of its knowledge (having made due enquiry), true and
accurate in all material respects and not misleading. BSLM confirms that it has
the right to supply such information to Schechter and that the supply of such
information by the Company and its receipt and use by Schechter for the purposes
of the Engagement, will not infringe any rights held by any third party, involve
the unauthorized use of confidential information belonging to a third party or
result in a breach by BSLM or Schechter of any law, regulatory obligation,
fiduciary duty owed to any third party, intellectual property rights or
agreement. BSLM accepts that any advice given to it by Schechter will be on the
basis that Schechter has been supplied with all information relevant to it for
the purposes of the Engagement. Schechter will agree appropriate arrangements
and procedures to ensure that any information disclosed between BSLM and
Schechter is kept confidential and BSLM and Schechter shall comply with such
arrangements and procedures.

The Company undertakes that it will, at all times, keep Schechter fully informed
of all strategies, developments and discussions relevant to the Engagement and
that no initiatives relevant to the Transaction will be taken without prior
consultation with Schechter.
 
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Schechter & Co. Limited

Schechter undertakes that it will, at all times, keep the Company promptly and
fully informed of all material questions, comments or responses from potential
Note Purchasers and shall not provide any confidential information or
documentation provided to Schechter by or on behalf of the Company (other than
the Memorandum) to such potential Note Purchasers without the prior written
consent of the Company.

Indemnity

4.
BSLM agrees with Schechter (for itself and on trust and as agent for the other
persons mentioned below):

 
(a)
that BSLM will indemnify Schechter and each other member of the Schechter Group
and each of its and their respective directors, partners, officers, employees
and agents (each of the foregoing an “Indemnified Person”) against any and all
actions, claims, losses, liabilities, damages, costs, charges and expenses which
it or they may suffer or incur in any jurisdiction or which may be made or taken
against them arising as a result of a legal action by a third party against any
Indemnified Person under, out of, or in connection with, the Engagement or
Schechter’s role in connection therewith or the Transaction (including any
reasonable and proper costs, charges and expenses (including legal fees)
involved in investigating, preparing for or defending the relevant claim whether
or not in connection with pending or threatened litigation in which Schechter or
any other Indemnified Person is or may be a party) save to the extent that the
same shall have arisen from such Indemnified Person’s negligence, default or
breach of the terms of this letter (other than any such breach which has arisen
as a result of any matter or event beyond the Indemnified Person’s reasonable
control) or that the same shall have arisen from such Indemnified Person’s
negligent non-compliance with the applicable laws, rules and regulations in the
applicable jurisdiction.
       
(b)
No claims will be made against any Indemnified Person by BSLM or any director,
employee, agent, subsidiary or affiliate of the Company in respect of any and
all actions, claims, losses, liabilities, damages, costs, charges and expenses
which BSLM or any director, employee, agent, subsidiary or affiliate of the
Company may suffer relating to the Engagement or Schechter’s role in connection
therewith or the Transaction or arising from the arrangements contemplated
hereby or requested pursuant hereto (“Client Losses”) save to the extent that
the same shall have arisen directly as a result of such Indemnified Person’s
negligence or default or breach of the terms of this letter (other than any such
breach which has arisen as a result of any matter or event beyond the
Indemnified Person’s reasonable control), or that the same shall have arisen
from such Indemnified Person’s negligent non-compliance with the applicable
laws, rules and regulations in the applicable jurisdiction.
       
(c)
Notwithstanding anything in clause 4(b) above, where any Indemnified Person is
the subject of a claim alleging liability in respect of any Client Losses
arising from or in any way connected with the Engagement or Schechter’s role in
connection therewith or the Transaction, then the total amount of such Client
Losses recoverable from any such Indemnified Persons shall be limited to such
proportion of the Client Losses as is finally determined to be just and
equitable, having regard to the relative responsibility of (i) each Indemnified
Person so liable and

 
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Schechter & Co. Limited

 
(ii)
any other person (including for the avoidance of doubt, both BSLM (and any
director, employee, agent, subsidiary or affiliate of the Company) and any other
person unrelated to the Company) who is jointly or severally liable for the
Client Losses or any part thereof (a “Third Party”). For the avoidance of doubt,
any limitation or exclusion or restriction on the liability of any Third Party
under any jurisdiction, whether arising under statute or contract or resulting
from death, bankruptcy or insolvency (a “Liability Limitation”) shall be ignored
for the purposes of determining the extent of responsibility of that Third Party
under (ii) above.

 

 
(d)
Without prejudice to clause 4(c) above, where:

 

   
(i)
notwithstanding anything in clause 4(b) above, it has been fully determined that
one or more Indemnified Persons is liable to BSLM for any Client Losses in any
way connected with the Engagement, or Schechter’s role in connection therewith
or the Transaction; and
           
(ii)
any Third Party has the benefit of a limitation or exclusion or restriction of
liability arising under a contract with BSLM (the “Contractual Liability
Limitation”);

then the total liability of any such Indemnified Person to the Company in
respect of the Client Losses shall not exceed the maximum amount which it could
recover from such Indemnified Person after deducting such sums as that
Indemnified Person would have been entitled to recover from any Third Party in
respect of the Client Losses, but is prevented from recovering as a result of
the Contractual Liability Limitation.

 
(e)
Nothing in this letter shall be taken to exclude or restrict any duty or
liability to BSLM which Schechter has under the Financial Services & Market Act
2000 (“FSMA”) or under the regulatory system (as defined in the rules and
regulations (the “Rules of the FSA”) of the Financial Services Authority Limited
(“FSA”) or the Securities Act 1933, as amended.
       
(f)
Schechter shall, so far as permitted by law and/or our insurers, comply with any
reasonable request that BSLM may make in relation to any relevant action or
claim brought or made against the Company, subject to the Company indemnifying
and securing Schechter in a manner reasonably satisfactory to Schechter against
any and all costs, charges and expenses incurred by it in complying with any
such request. Where Schechter reasonably believes that any of the circumstances
giving rise to the indemnity set out in clause 4(a) above might apply, BSLM will
co-operate, so far as it is able, with any reasonable request from Schechter in
relation to such circumstances, and, in particular, BSLM will promptly provide
copies of, or access to, all documents so requested.
       
(g)
These paragraphs (a) to (g) and clause 7 shall be without prejudice to any other
rights or remedies Schechter may have and shall survive any termination of the
agreement and arrangements contained in this letter.

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Schechter & Co. Limited

 
FSA Rules and other Applicable Laws and Regulations

5.
All services provided by Schechter are subject to the Rules of the FSA and may
constitute corporate finance business (as defined in the Rules of the FSA); they
are also subject to the extent applicable, to regulation by the Financial
Services Authority. In providing such services to BSLM, Schechter is proposing
to treat the Company as a non-private customer within the meaning of the Rules
of the FSA.

 
BSLM agrees that it will comply with, and will ensure that its subsidiaries,
directors and employees all comply with, all applicable laws, rules and
regulations in England and other relevant overseas territories in relation to
the Transaction including, in particular, in respect of all announcements made
or documents published in connection therewith. BSLM acknowledges that no member
of the Schechter Group is responsible for advising the Company in respect of any
of the foregoing laws, rules and regulations and, without prejudice to clause
4(b) above, acknowledges that Schechter shall not incur any liability to the
Company in respect of any breach of applicable laws or regulations where
Schechter has acted in good faith in the absence of, or in accordance with, any
advice you have received and communicated to Schechter.
 
Communications

6.
All announcements and documents made or published by BSLM or on its behalf, or
by Schechter or on Schechter’s behalf in relation to the Transaction, will only
be made or published after consultation between BSLM and Schechter in respect of
the wording of such announcements and documents made or published. Except as may
be required by law, no communication, information or advice rendered by BSLM or
Schechter in writing or otherwise in connection with the Transaction will be
quoted, nor will any such communication or advice or the Company’s name or the
name of Schechter be referred to, in any report, document, statement, press
release or other communication (“Communication”) without BSLM’s and Schechter’s
prior written authorization.

 
Except where required by law or the Rules of the FSA, Schechter shall not be
responsible for ensuring the truth, accuracy, completeness or fairness of any
Communication made by or on behalf of BSLM in connection with the Transaction
(including any such communication Schechter has approved for the purposes of the
FSA).
If, for any reason, any such Communication is made without the consent of the
Company or Schechter, or if the Company or Schechter subsequently becomes aware
of information which renders such Communication untrue or misleading in any
material respect, the parties to this letter agreement mutually acknowledge that
the Company or Schechter shall be entitled to publish any documents, statements
or communications as it thinks fit in the Company’s or Schechter’s interest
without reference or liability to the other.

Termination

7.
Subject to clause 4, Schechter reserves the right to terminate the Engagement
and cease acting for BSLM in connection with the Transaction at any time and
without prejudice to either rights accrued and obligations incurred by either
Schechter or BSLM prior to Schechter’s ceasing to act, except that following any
such termination or expiration of the Engagement, Schechter shall remain
entitled to any fees accrued and/or expenses incurred pursuant to clause 2 above
but not yet paid prior to termination or expiration.

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Schechter & Co. Limited

BSLM has the right to terminate the Engagement in connection with the
Transaction at any time and without prejudice to either rights accrued or
obligations incurred by either Schechter or BSLM prior to Schechter’s ceasing to
act. Following any such termination by BSLM or expiration of the Engagement,
Schechter shall remain entitled to any fees accrued and/or expenses incurred
pursuant to clause 2 above but not yet paid prior to termination or expiration.
In addition, in the case of termination by BSLM, where such termination is not
as a result of Schechter’s failure to perform its obligations under this
Engagement in any material respect, Schechter shall remain entitled to full
payment of all fees contemplated by paragraph 2 hereof in respect of any
Transaction announced or resulting from negotiations commenced during the period
from the date hereof until the date twelve months following such termination.
The Company agrees to pay any and all legal or court costs from any dispute
which may arise in connection with the Transaction prior to or post Termination.
In any event, the Engagement shall terminate on the date which is the later of
(a) twelve months after the date of this letter or (b) twelve months after
Schechter’s substantive work on the Engagement ceases, and any obligations
Schechter may have under this letter shall thereupon terminate automatically
without further notice. In the event of any such termination, Schechter shall,
subject to clause 6 and 8 (Communications and Material Interests), be free to
act for any other person in connection with the subject matter of the
Engagement. The provisions of clauses 6 and 8 shall survive the termination of
the Engagement.

Material Interests

8.
The business of Schechter may give rise to situations where members of the
Schechter Group might have a client whose interest may conflict with your
interests or may be regarded as having interests which conflict with your
interests in relation to the Transactions or investment concerned or might have
some other interest, relationship or arrangement that is material (“Material
Interest”). Schechter has established practices and procedures designed to
ensure that your interests are not prejudiced by any such Material Interest.
 
BSLM hereby acknowledges and accepts, so as expressly to override any duties,
obligations or restrictions which would otherwise be implied by law or by the
rules of any regulatory authorities, and exchanges, any other member of the
Schechter Group may be prohibited from disclosing, or it may be inappropriate
for any member of the Schechter Group to disclose, information to BSLM, in
particular about Material Interests.

Confidentiality

9.
Schechter undertakes to keep confidential within the Schechter Group any
information relating to BSLM or its business which has been provided to
Schechter by or on behalf of BSLM and which is not public knowledge, provided
that Schechter may disclose such confidential information or details relating to
the Engagement or this letter if required by law or its insurers (subject to
such insurers agreeing in writing to keep such information confidential) or the
rules and regulations of the FSA, the Panel on Take-overs and Mergers or any
other relevant regulatory authority or exchange. BSLM hereby authorizes and
consents to such disclosure and authorizes Schechter to co-operate with and/or
report to such authorities and exchanges. BSLM agrees that Schechter’s duties to
the Company will not restrict Schechter’s freedom to take all steps which it
considers to be necessary to comply with the laws, rules and regulations
applicable to it.

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Schechter & Co. Limited
Communications, Documents and Records

10.
All correspondence and other papers created by Schechter relating to the
Engagement or the subject matter of the Engagement (other than copies of such
documentation provided to BSLM in the course of the Engagement) shall be
Schechter’s sole property. No announcements or communications relating to the
Transaction or the other party hereto shall be made without the prior written
consent of the other party.

General

11.
Schechter will not act as an employee of the Company or be responsible for
providing it with or obtaining or reviewing on its behalf, any specialist
advice, for the avoidance of doubt including but not limited to legal,
accounting, actuarial, environmental or information technology advice, although
Schechter would be happy to discuss with BSLM the implications of any such
advice the Company receives
   
12.
In this letter “Schechter” means Schechter & Co. Limited and “Schechter Group”
means Stephen L. Schechter & Co., Incorporated and its subsidiary and associated
undertakings (as defined respectively in Section 258 and paragraph 20(1) of
Schedule 4A of the Companies Act 1985) together with any subsidiary or
associated undertakings of any such undertaking and Charles Penn Longview
Associates Ltd.
   
13.
A person who is not a party to this letter shall have no rights under the
Contracts (Third Parties) Act 1999 to enforce any of its items.
   
14.
This letter shall be governed by and construed in accordance with New York law.
 
Both Schechter and BSLM agree that the Courts of New York will have exclusive
jurisdiction to settle any dispute which may arise in connection with this
letter. Alternatively, disputes may be settled by independent arbitration upon
agreement of both parties.

Please indicate the Company’s agreement by signing and returning this letter.
Yours sincerely
 
 

                  
For and on behalf of
 
SCHECHTER & CO. LIMITED
 
We agree to the foregoing
 

 
 

                                                 
For and on behalf of
 
Date
BIO SOLUTIONS MANUFACTURING, INC.
   

 
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