Exhibit 10.4


    
      
        
          

        

        Exhibit
          10.4


      

       

      SECURITY
        AGREEMENT

       

      1.            
        Identification.

      


      This
        Security Agreement (the “Agreement”), dated as of February ____, 2007, is
        entered into by and between The Medical Exchange Inc., a Nevada corporation
        (“Debtor”), and Sheldon S. Traube, as collateral agent acting in the manner and
        to the extent described in the Collateral Agent Agreement defined below (the
        “Collateral Agent”), for the benefit of the parties identified on Schedule A
        hereto (collectively, the “Lenders”).

      


      2.            
        Recitals.

      


      2.1      
        The
        Lenders have made or are making loans and will make additional loans to Debtor
        (the “Loans”). It is beneficial to Debtor that the Loans were made, are being
        made and will be made.

      


      2.2      
        The
        Loans
        are evidenced by one or more convertible promissory notes (each a “Convertible
        Note”) issued by Debtor on or about the date of this Agreement, pursuant to one
        or more subscription agreements (each a “Subscription Agreement”) to which
        Debtor and Lenders are parties. The Notes are further identified on Schedule
        A
        hereto and were and will be executed by Debtor as “Borrower” or “Debtor” for the
        benefit of each Lender as the “Holder” or “Lender” thereof. The foregoing
        notwithstanding, Schedule A may be amended to include such other Lenders
        and
        additional Obligations as hereinafter defined pursuant to the Subscription
        Agreement and Transaction Documents.

      


      2.3      
        In
        consideration of the Loans made by Lenders to Debtor and for other good and
        valuable consideration, and as security for the performance by Debtor of
        its
        obligations under the Notes and as security for the repayment of the Loans
        and
        all other sums due from Debtor to Lenders arising under the Notes presently
        outstanding or to be outstanding in the future, Subscription Agreement, and
        any
        of the other Transaction Documents (as defined in the Subscription Agreement)
        (collectively, the “Obligations”), Debtor, for good and valuable consideration,
        receipt of which is acknowledged, has agreed to grant to the Collateral Agent,
        for the benefit of the Lenders, a security interest in the Collateral (as
        such
        term is hereinafter defined), on the terms and conditions hereinafter set
        forth.
        Obligations include all future advances by Lenders to Debtor advanced on
        a pro
        rata basis by all Lenders on substantially the same terms as contained in
        the
        Notes.

      


      2.4      
        The
        Lenders have appointed Sheldon S. Traube as Collateral Agent pursuant to
        that
        certain Collateral Agent Agreement dated at or about February ___, 2007
        (“Collateral Agent Agreement”), among the Lenders and Collateral
        Agent.

      


      2.5     
         The
        following defined terms which are defined in the Uniform Commercial Code
        in
        effect in the State of New York on the date hereof are used herein as so
        defined: Accounts, Chattel Paper, Documents, Equipment, General Intangibles,
        Instruments, Inventory and Proceeds.

      


      3.              
        Grant
        of General Security Interest in Collateral.

      


      3.1    
As
        security for the Obligations of Debtor, Debtor hereby grants the Collateral
        Agent, for the benefit of the Lenders, a security interest in the
        Collateral.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      
        3.2     “Collateral”
          shall mean all of the following property of Debtor:



      (A)   
All
        now
        owned and hereafter acquired right, title and interest of Debtor in, to and
        in
        respect of all Accounts, Goods, real or personal property, all present and
        future books and records relating to the foregoing and all products and Proceeds
        of the foregoing, and as set forth below:

      


      (i)   
Accounts:
        All now
        owned and hereafter acquired right, title and interest of Debtor in, to and
        in
        respect of all: Accounts, interests in goods represented by Accounts, returned,
        reclaimed or repossessed goods with respect thereto and rights as an unpaid
        vendor; contract rights; Chattel Paper; investment property; General Intangibles
        (including but not limited to, tax and duty claims and refunds, registered
        and
        unregistered patents, trademarks, service marks, certificates, copyrights
        trade
        names, applications for the foregoing, trade secrets, goodwill, processes,
        drawings, blueprints, customer lists, licenses, whether as licensor or licensee,
        chooses in action and other claims, and existing and future leasehold interests
        in equipment, real estate and fixtures); Documents; Instruments; letters
        of
        credit, bankers’ acceptances or guaranties; cash moneys, deposits; securities,
        bank accounts, deposit accounts, credits and other property now or hereafter
        owned or held in any capacity by Debtor, as well as its affiliates, agreements
        or property securing or relating to any of the items referred to
        above;

      


      (ii)       
        Goods:
        All now
        owned and hereafter acquired right, title and interest of Debtor in, to and
        in
        respect of goods, including, but not limited to:

       

      (a)    
        All
        Inventory, wherever located, whether now owned or hereafter acquired, of
        whatever kind, nature or description, including all raw materials,
        work-in-process, finished goods, and materials to be used or consumed in
        Debtor’
business; finished goods, timber cut or to be cut, oil, gas, hydrocarbons,
        and
        minerals extracted or to be extracted, and all names or marks affixed to
        or to
        be affixed thereto for purposes of selling same by the seller, manufacturer,
        lessor or licensor thereof and all Inventory which may be returned to Debtor
        by
        its customers or repossessed by Debtor and all of Debtor’ right, title and
        interest in and to the foregoing (including all of Debtor’ rights as a seller of
        goods);

      


      (b)    
        All
        Equipment and fixtures, wherever located, whether now owned or hereafter
        acquired, including, without limitation, all machinery, motor vehicles,
        furniture and fixtures, and any and all additions, substitutions, replacements
        (including spare parts), and accessions thereof and thereto (including, but
        not
        limited to Debtor’ rights to acquire any of the foregoing, whether by exercise
        of a purchase option or otherwise);

      


      (iii)     
         Property:
        All now
        owned and hereafter acquired right, title and interests of Debtor in, to
        and in
        respect of any real or other personal property in or upon which Debtor has
        or
        may hereafter have a security interest, lien or right of setoff; 

      


      (iv)     
        Books
        and Records:
        All
        present and future books and records relating to any of the above including,
        without limitation, all computer programs, printed output and computer readable
        data in the possession or control of the Debtor, any computer service bureau
        or
        other third party; and

      


      (v)      
        Products
        and Proceeds:
        All
        products and Proceeds of the foregoing in whatever form and wherever located,
        including, without limitation, all insurance proceeds and all claims against
        third parties for loss or destruction of or damage to any of the
        foregoing.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      (B)     
All
        now
        owned and hereafter acquired right, title and interest of Debtor in, to and
        in
        respect of the following:


      (i)        the
        shares of stock, partnership interests, member interests or other equity
        interests at any time and from time to time acquired by Debtor of any and
        all
        entities now or hereafter existing, all or a portion of such stock or other
        equity interests which are acquired by such entities at any time (such entities,
        together with the existing issuers, being hereinafter referred to collectively
        as the “Pledged Issuers” and individually as a “Pledged Issuer”), the
        certificates representing such shares, partnership interests, member interests
        or other interests all options and other rights, contractual or otherwise,
        in
        respect thereof and all dividends, distributions, cash, instruments, investment
        property and other property from time to time received, receivable or otherwise
        distributed in respect of or in exchange for any or all of such shares,
        partnership interests, member interests or other interests;

       

      (ii)       all
        additional shares of stock, partnership interests, member interests or other
        equity interests from time to time acquired by Debtor, of any Pledged Issuer,
        the certificates representing such additional shares, all options and other
        rights, contractual or otherwise, in respect thereof and all dividends,
        distributions, cash, instruments, investment property and other property
        from
        time to time received, receivable or otherwise distributed in respect of
        or in
        exchange for any or all of such additional shares, interests or equity; and
        

      


      (iii)     
        all
        security entitlements of Debtor in, and all Proceeds of any and all of the
        foregoing in each case, whether now owned or hereafter acquired by Debtor
        and
        howsoever its interest therein may arise or appear (whether by ownership,
        security interest, lien, claim or otherwise).

      


      3.3     
         The
        Collateral Agent is hereby specifically authorized, after the Maturity Date
        (defined in the Notes) accelerated or otherwise, or after an Event of Default
        (as defined herein) and the expiration of any applicable cure period, to
        transfer any Collateral into the name of the Collateral Agent and to take
        any
        and all action deemed advisable to the Collateral Agent to remove any transfer
        restrictions affecting the Collateral.

      


      4.            
        Perfection
        of Security Interest.

      


      4.1      
        Debtor
        shall prepare, execute and deliver to the Collateral Agent UCC-1 Financing
        Statements covering the Collateral. The Collateral Agent is instructed to
        prepare and file at Debtor’s cost and expense, financing statements in such
        jurisdictions deemed advisable to the Collateral Agent, including but not
        limited to the State of Nevada. The Financing Statements are deemed to have
        been
        filed for the benefit of the Collateral Agent and Lenders identified on Schedule
        A hereto.

       

      5.            
        Distribution
        on Liquidation.

      


      5.1      
        If
        any
        sum is paid as a liquidating distribution on or with respect to the Collateral,
        Debtor shall deliver same to the Collateral Agent to be applied to the
        Obligations, then due, in accordance with the terms of the Convertible
        Notes.

      


      5.2      
        So
        long
        as no Event of Default exists, Debtor shall be entitled (i) to exercise all
        voting power pertaining to any of the Collateral, provided such exercise
        is not
        contrary to the interests of the Lenders and does not impair the Collateral
        and
        (ii) may receive and retain any and all dividends, interest payments or other
        distributions paid in respect of the Collateral.

      


      5.3.     
        Upon
        the
        occurrence and during the continuation of an Event of Default, all rights
        of
        Debtor, upon notice given by Collateral Agent, to exercise the voting power
        and
        receive payments, which it would otherwise be entitled to pursuant to Section
        5.2, shall cease and all such rights shall thereupon become
        vested in Collateral Agent, which shall thereupon have the sole right to
        exercise such voting power and receive such payments.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      
        5.4      
          All
          dividends, distributions, interest and other payments which are received
          by
          Debtor contrary to the provisions of Section 5.3 shall be received in trust
          for
          the benefit of Collateral Agent, shall be segregated from other funds of
          Debtor,
          and shall be forthwith paid over to Collateral Agent as Collateral in the
          exact
          form received with any necessary endorsement and/or appropriate stock powers
          duly executed in blank, to be held by Collateral Agent as Collateral and
          as
          further collateral security for the Obligations.

      

       

      6.            
        Further
        Action By Debtor; Covenants and Warranties.

      


      6.1      
        Collateral
        Agent at all times shall have a perfected security interest in the Collateral.
        Subject only to the security interests described on Schedule 6.1 hereto,
        Debtor
        has and will continue to have full title to the Collateral free from any
        liens,
        leases, encumbrances, judgments or other claims. Collateral Agent's security
        interest in the Collateral constitutes and will continue to constitute a
        first,
        prior and indefeasible security interest in favor of Collateral Agent. Debtor
        will do all acts and things, and will execute and file all instruments
        (including, but not limited to, security agreements, financing statements,
        continuation statements, etc.) reasonably requested by Collateral Agent to
        establish, maintain and continue the perfected security interest of Collateral
        Agent in the Collateral, and will promptly on demand, pay all costs and expenses
        of filing and recording, including the costs of any searches reasonably deemed
        necessary by Collateral Agent from time to time to establish and determine
        the
        validity and the continuing priority of the security interest of Collateral
        Agent, and also pay all other claims and charges that, in the opinion of
        Collateral Agent, exercised in good faith, are reasonably likely to materially
        prejudice, imperil or otherwise affect the Collateral or Collateral Agent’s or
        Lenders’ security interests therein.

      


      6.2      
        Other
        than in the ordinary course of business, and except for Collateral which
        is
        substituted by assets of identical or greater value or which has become obsolete
        or is of inconsequential in value, Debtor will not sell, transfer, assign
        or
        pledge those items of Collateral (or allow any such items to be sold,
        transferred, assigned or pledged), without the prior written consent of
        Collateral Agent other than a transfer of the Collateral to a wholly-owned
        subsidiary on prior notice to Collateral Agent, and provided the Collateral
        remains subject to the security interest herein described. Although Proceeds
        of
        Collateral are covered by this Agreement, this shall not be construed to
        mean
        that Collateral Agent consents to any sale of the Collateral, except as provided
        herein. Sales of Collateral in the ordinary course of business shall be free
        of
        the security interest of Lenders and Collateral Agent and Lenders and Collateral
        Agent shall promptly execute such documents (including without limitation
        releases and termination statements) as may be required by Debtor to evidence
        or
        effectuate the same.

      


      6.3     
         Debtor
        will, at all reasonable times and upon reasonable notice, allow Collateral
        Agent
        or its representatives free and complete access to the Collateral and all
        of
        Debtor's records which in any way relate to the Collateral, for such inspection
        and examination as Collateral Agent reasonably deems necessary.

      


      6.4      
        Debtor,
        at its sole cost and expense, will protect and defend this Security Agreement,
        all of the rights of Collateral Agent and Lenders hereunder, and the Collateral
        against the claims and demands of all other persons.

      


      6.5      
        Debtor
        will promptly notify Collateral Agent of any levy, distraint or other seizure
        by
        legal process or otherwise of any part of the Collateral, and of any threatened
        or filed claims or 

       

      proceedings
        that are reasonably likely to affect or
        impair any of the rights of Collateral Agent under this Security Agreement
        in
        any material respect.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      6.6      
        Debtor,
        at its own expense, will obtain and maintain in force insurance policies
        covering losses or damage to those items of Collateral which constitute physical
        personal property. The insurance policies to be obtained by Debtor shall
        be in
        form and amounts reasonably acceptable to Collateral Agent. Debtor shall
        make
        the Collateral Agent first a loss payee thereon to the extent of its interest
        in
        the Collateral. Collateral Agent is hereby irrevocably (until the Obligations
        are paid in full) appointed Debtor’ attorney-in-fact to endorse any check or
        draft that may be payable to Debtor so that Collateral Agent may collect
        the
        proceeds payable for any loss under such insurance. The proceeds of such
        insurance (subject to the rights of senior secured parties), less any costs
        and
        expenses incurred or paid by Collateral Agent in the collection thereof,
        shall
        be applied either toward the cost of the repair or replacement of the items
        damaged or destroyed, or on account of any sums secured hereby, whether or
        not
        then due or payable.

      


      6.7     
         Collateral
        Agent may, at its option, and without any obligation to do so, pay, perform
        and
        discharge any and all amounts, costs, expenses and liabilities herein agreed
        to
        be paid or performed by Debtor.  Upon
        Debtor’s
        failure
        to do
        so,
        all
        amounts expended by Collateral Agent in so doing shall become part of the
        Obligations secured hereby, and shall be immediately due and payable by Debtor
        to Collateral Agent upon demand and
        shall
        bear interest at the lesser of 15% per annum or the highest legal amount
        from
        the dates of such expenditures until paid.

      


      6.8     
         Upon
        the
        request of Collateral Agent, Debtor will furnish to Collateral Agent within
        five
        (5) business days thereafter, or to any proposed assignee of this Security
        Agreement, a written statement in form reasonably satisfactory to Collateral
        Agent, duly acknowledged, certifying the amount of the principal and interest
        and any other sum then owing under the Obligations, whether to its knowledge
        any
        claims, offsets or defenses exist against the Obligations or against this
        Security Agreement, or any of the terms and provisions of any other agreement
        of
        Debtor securing the Obligations. In connection with any assignment by Collateral
        Agent of this Security Agreement, Debtor hereby agrees to cause the insurance
        policies required hereby to be carried by Debtor, if any, to be endorsed
        in form
        satisfactory to Collateral Agent or to such assignee, with loss payable clauses
        in favor of such assignee, and to cause such endorsements to be delivered
        to
        Collateral Agent within ten (10) calendar days after request therefor by
        Collateral Agent.

      


      6.9      
        Debtor
        will, at its own expense, make, execute, endorse, acknowledge, file and/or
        deliver to the Collateral Agent from time to time such vouchers, invoices,
        schedules, confirmatory assignments, conveyances, financing statements, transfer
        endorsements, powers of attorney, certificates, reports and other reasonable
        assurances or instruments and take further steps relating to the Collateral
        and
        other property or rights covered by the security interest hereby granted,
        as the
        Collateral Agent may reasonably require to perfect its security interest
        hereunder.

      


      6.10    
        Debtor
        represents and warrants that it is the true and lawful exclusive owner of
        the
        Collateral, free and clear of any liens and encumbrances.

      


      6.11    
        Debtor
        hereby agrees not to divest itself of any right under the Collateral except
        as
        permitted herein absent prior written approval of the Collateral Agent, except
        to a subsidiary organized and located in the United States on prior notice
        to
        Collateral Agent provided the Collateral remains subject to the security
        interest herein described.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      6.12    
        Debtor
        shall use best commercial efforts to cause each Subsidiary of Debtor not
        in
        existence on the date hereof to execute and deliver to Collateral Agent promptly
        and in any event within 10 days after the formation, acquisition or change
        in
        status thereof (A) a guaranty guaranteeing the Obligations, (B) a security
        and
        pledge agreement substantially in the form of this Agreement such other
        agreements, instruments, approvals, legal opinions or other documents reasonably
        requested by Collateral Agent in order to create, perfect, establish the
        first
        priority of or otherwise protect any lien purported to be covered by any
        such
        pledge and security agreement or otherwise to effect the intent that all
        property and assets of such Subsidiary shall become Collateral for the
        Obligations. For purposes of this Agreement, “Subsidiary”
means,
        with respect to any entity at any date, any corporation, limited or general
        partnership, limited liability company, trust, estate, association, joint
        venture or other business entity) of which more than 50% of (i) the
        outstanding capital stock having (in the absence of contingencies) ordinary
        voting power to elect a majority of the board of directors or other managing
        body of such entity, (ii) in the case of a partnership or limited liability
        company, the interest in the capital or profits of such partnership or limited
        liability company or (iii) in the case of a trust, estate, association,
        joint venture or other entity, the beneficial interest in such trust, estate,
        association or other entity business is, at the time of determination, owned
        or
        controlled directly or indirectly through one or more intermediaries, by
        such
        entity.

      


      7.            
        Power
        of Attorney.

      


      After
        the
        occurrence and during the uncured continuation of an Event of Default, as
        defined in Section 9 below, Debtor hereby irrevocably constitutes and appoints
        the Collateral Agent as the true and lawful attorney of Debtor, with full
        power
        of substitution, in the place and stead of Debtor and in the name of Debtor
        or
        otherwise, at any time or times, in the discretion of the Collateral Agent,
        to
        take any action and to execute any instrument or document which the Collateral
        Agent may deem necessary or advisable to accomplish the purposes of this
        Agreement. This power of attorney is coupled with an interest and is irrevocable
        until the Obligations are satisfied.

      


      8.            
        Performance
        By The Collateral Agent.

      


      If
        Debtor
        fails to perform any material covenant, agreement, duty or obligation of
        Debtor
        under this Agreement, the Collateral Agent may, after any applicable cure
        period, at any time or times in its discretion, take action to effect
        performance of such obligation. All reasonable expenses of the Collateral
        Agent
        incurred in connection with the foregoing authorization shall be payable
        by
        Debtor as provided in Paragraph 12.1 hereof. No discretionary right, remedy
        or
        power granted to the Collateral Agent under any part of this Agreement shall
        be
        deemed to impose any obligation whatsoever on the Collateral Agent with respect
        thereto, such rights, remedies and powers being solely for the protection
        of the
        Collateral Agent.

      


      9.            
        Event
        of Default.

      


      An
        event
        of default (“Event of Default”) shall be deemed to have occurred hereunder upon
        the occurrence of any event of default as defined and described in this
        Agreement, or in the Notes, Subscription Agreement, and any other agreement
        to
        which Debtor and a Lender are parties. Upon and after any Event of Default,
        after the applicable cure period, if any, any or all of the Obligations shall
        become immediately due and payable at the option of the Collateral Agent,
        for
        the benefit of the Lenders, and the Collateral Agent may dispose of Collateral
        as provided below. A default by Debtor of any of its material obligations
        pursuant to this Agreement shall be an Event of Default hereunder and an
        event
        of default as defined in the Notes, and Subscription Agreement.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      10.          
        Disposition
        of Collateral.

      


      Upon
        and
        after any Event of Default which is then continuing,

      


      10.1    
        The
        Collateral Agent may exercise its rights with respect to each and every
        component of the Collateral, without regard to the existence of any other
        security or source of payment for the Obligations. In addition to other rights
        and remedies provided for herein or otherwise available to it, the Collateral
        Agent shall have all of the rights and remedies of a lender on default under
        the
        Uniform Commercial Code then in effect in the State of New York.

      


      10.2    
        In
        the
        event of any sale or other disposition of Collateral is to occur, the Collateral
        Agent shall provide Debtor with at least five business (5) days prior written
        notice (which Debtor agrees is reasonable notice within the meaning of Section
        9.612(a) of the Uniform Commercial Code) of the time and place of any sale
        of
        Collateral which Debtor hereby agrees may be by private sale. The rights
        granted
        in this Section are in addition to any and all rights available to Collateral
        Agent under the Uniform Commercial Code.

      


      10.3     The
        Collateral Agent is authorized, at any such sale, if the Collateral Agent
        deems
        it advisable to do so, in order to comply with any applicable securities
        laws,
        to restrict the prospective bidders or purchasers to persons who will represent
        and agree, among other things, that they are purchasing the Collateral for
        their
        own account for investment, and not with a view to the distribution or resale
        thereof, or otherwise to restrict such sale in such other manner as the
        Collateral Agent deems advisable to ensure such compliance. Sales made subject
        to such restrictions shall be deemed to have been made in a commercially
        reasonable manner.

      


      10.4   
         All
        proceeds received by the Collateral Agent for the benefit of the Lenders
        in
        respect of any sale, collection or other enforcement or disposition of
        Collateral, shall be applied (after deduction of any amounts payable to the
        Collateral Agent pursuant to Paragraph 12.1 hereof) against the Obligations
        pro
        rata among the Lenders in proportion to their interests in the Obligations.
        Upon
        payment in full of all Obligations, Debtor shall be entitled to the return
        of
        all Collateral, including cash, which has not been used or applied toward
        the
        payment of Obligations or used or applied to any and all costs or expenses
        of
        the Collateral Agent incurred in connection with the liquidation of the
        Collateral (unless another person is legally entitled thereto). Any assignment
        of Collateral by the Collateral Agent to Debtor shall be without representation
        or warranty of any nature whatsoever and wholly without recourse. To the
        extent
        allowed by law, each Lender may purchase the Collateral and pay for such
        purchase by offsetting up to such Lender’s pro rata portion of the purchase
        price with sums owed to such Lender by Debtor arising under the Obligations
        or
        any other source.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      
 

      11.          
        Waiver
        of Automatic Stay.
        Debtor
        acknowledges and agrees that should a proceeding under any bankruptcy or
        insolvency law be commenced by or against Debtor, or if any of the Collateral
        should become the subject of any bankruptcy or insolvency proceeding, then
        the
        Collateral Agent should be entitled to, among other relief to which the
        Collateral Agent or Lenders may be entitled under the Note, Subscription
        Agreement and any other agreement to which the Debtor, Lenders or Collateral
        Agent are parties, (collectively “Loan Documents”) and/or applicable law, an
        order from the court granting immediate relief from the automatic stay pursuant
        to 11 U.S.C. Section 362 to permit the Collateral Agent to exercise all of
        its
        rights and remedies pursuant to the Loan Documents and/or applicable law.
        Debtor
        EXPRESSLY WAIVES THE BENEFIT OF THE AUTOMATIC STAY IMPOSED BY 11 U.S.C. SECTION
        362. FURTHERMORE, Debtor EXPRESSLY ACKNOWLEDGES AND AGREES THAT NEITHER 11
        U.S.C. SECTION 362 NOR ANY OTHER SECTION OF THE BANKRUPTCY CODE OR OTHER
        STATUTE
        OR RULE (INCLUDING, WITHOUT LIMITATION, 11 U.S.C. SECTION 105)
        SHALL STAY, INTERDICT, CONDITION, REDUCE OR INHIBIT IN ANY WAY THE ABILITY
        OF
        THE COLLATERAL AGENT TO ENFORCE ANY OF ITS RIGHTS AND REMEDIES UNDER THE
        LOAN
        DOCUMENTS AND/OR APPLICABLE LAW. Debtor hereby consents to any motion for
        relief
        from stay which may be filed by the Collateral Agent in any bankruptcy or
        insolvency proceeding initiated by or against Debtor, and further agrees
        not to
        file any opposition to any motion for relief from stay filed by the Collateral
        Agent. Debtor represents, acknowledges and agrees that this provision is
        a
        specific and material aspect of this Agreement, and that the Collateral Agent
        would not agree to the terms of this Agreement if this waiver were not a
        part of
        this Agreement. Debtor further represents, acknowledges and agrees that this
        waiver is knowingly, intelligently and voluntarily made, that neither the
        Collateral Agent nor any person acting on behalf of the Collateral Agent
        has
        made any representations to induce this waiver, that Debtor has been represented
        (or has had the opportunity to be represented) in the signing of this Agreement
        and in the making of this waiver by independent legal counsel selected by
        Debtor
        and that Debtor has had the opportunity to discuss this waiver with
        counsel.

      


      12.          
        Miscellaneous.

      


      12.1    
        Expenses.
        Debtor
        shall pay to the Collateral Agent, on demand, the amount of any and all
        reasonable expenses, including, without limitation, attorneys' fees, legal
        expenses and brokers' fees, which the Collateral Agent may incur in connection
        with (a) sale, collection or other enforcement or disposition of Collateral;
        (b)
        exercise or enforcement of any the rights, remedies or powers of the Collateral
        Agent hereunder or with respect to any or all of the Obligations upon breach
        or
        threatened breach; or (c) failure by Debtor to perform and observe any
        agreements of Debtor contained herein which are performed by the Collateral
        Agent.

      


      12.2   
         Waivers,
        Amendment and Remedies.
        No
        course of dealing by the Collateral Agent and no failure by the Collateral
        Agent
        to exercise, or delay by the Collateral Agent in exercising, any right, remedy
        or power hereunder shall operate as a waiver thereof, and no single or partial
        exercise thereof shall preclude any other or further exercise thereof or
        the
        exercise of any other right, remedy or power of the Collateral Agent. No
        amendment, modification or waiver of any provision of this Agreement and
        no
        consent to any departure by Debtor therefrom, shall, in any event, be effective
        unless contained in a writing signed by the Collateral Agent, and then such
        waiver or consent shall be effective only in the specific instance and for
        the
        specific purpose for which given. The rights, remedies and powers of the
        Collateral Agent, not only hereunder, but also under any instruments and
        agreements evidencing or securing the Obligations and under applicable law
        are
        cumulative, and may be exercised by the Collateral Agent from time to time
        in
        such order as the Collateral Agent may elect.

      


      12.3    
        Notices.
        All
        notices or other communications given or made hereunder shall be in writing
        and
        shall be personally delivered or deemed delivered the first business day
        after
        being faxed (provided that a copy is delivered by first class mail) to the
        party
        to receive the same at its address set forth below or to such other address
        as
        either party shall hereafter give to the other by notice duly made under
        this
        Section:

       

      

        
          	
                  To
                    Debtor:

                	 	 	
                  The
                    Medical Exchange Inc.

                
	 	 	 	
                  17
                    State Street

                	 
	 	 	 	
                  New
                    York, NY 10004

                	 
	 	 	 	 	 
	
                  With
                    a copy by telecopier only to:

                	 	 
	 	 	 	
                  Aboudi
                    & Brounstein

                
	 	 	 	
                  3
                    Gavish St.

                
	 	 	 	 	 


        

      

      


      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      
        Kfar
          Saba
          Israel

        Fax:
          972-9-762-4833

      

      

        
          	
                  To
                    Lenders:

                	
                  To
                    the addresses and telecopier numbers set forth

                
	 	
                  on
                    Schedule A 

                


        

                               
          

                    To
          the Collateral
          Agent:                                        
Sheldon
          S. Traube

      

                  17
        State Street, 22nd
        Floor

                 
        New York, NY 10004

      
              
        With an additional copy to:           
        Grushko
& Mittman, P.C. 

                  
                                              
        551 Fifth Avenue, Suite 1601

                 
        New York, New York 10176

                 
        Fax: (212) 697-3575

      Any
        party
        may change its address by written notice in accordance with this
        paragraph.

      


      12.4   
        Term;
        Binding Effect.
        This
        Agreement shall (a) remain in full force and effect until payment and
        satisfaction in full of all of the Obligations; (b) be binding upon Debtor,
        and
        its successors and permitted assigns; and (c) inure to the benefit of the
        Collateral Agent, for the benefit of the Lenders and their respective successors
        and assigns. All the rights and benefits granted by Debtor to the Collateral
        Agent and Lenders in the Loan Documents and other agreements and documents
        delivered in connection therewith are deemed granted to both the Collateral
        Agent and Lenders.

      


      12.5   
        Captions.
        The
        captions of Paragraphs, Articles and Sections in this Agreement have been
        included for convenience of reference only, and shall not define or limit
        the
        provisions hereof and have no legal or other significance
        whatsoever.

       

      
        12.6   
          Governing
          Law; Venue; Severability.
          This
          Agreement shall be governed by and construed in accordance with the laws
          of the
          State of New York without
          regard to conflicts
          of laws principles
          that
          would result in the application of the substantive laws of another
          jurisdiction,
          except
          to the extent that the perfection of the security interest granted hereby
          in
          respect of any item of Collateral may be governed by the law of another
          jurisdiction. Any legal action or proceeding against Debtor with respect
          to this
          Agreement may be brought in the courts in the State of New York or of
          the
          United
          States for the Southern District of New York, and, by execution and delivery
          of
          this Agreement, Debtor hereby irrevocably accepts for itself and in respect
          of
          its property, generally and unconditionally, the jurisdiction of the aforesaid
          courts. Debtor hereby irrevocably waives any objection which they may now
          or
          hereafter have to the laying of venue of any of the aforesaid actions or
          proceedings arising out of or in connection with this Agreement brought
          in the
          aforesaid courts and hereby further irrevocably waives and agrees not to
          plead
          or claim in any such court that any such action or proceeding brought in
          any
          such court has been brought in an inconvenient forum. If any provision
          of this
          Agreement, or the application thereof to any person or circumstance, is
          held
          invalid, such invalidity shall not affect any other provisions which can
          be
          given effect without the invalid provision or application, and to this
          end the
          provisions hereof shall be severable and the remaining, valid provisions
          shall
          remain of full force and effect.

      

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      12.7   
         Entire
        Agreement.
        This
        Agreement contains the entire agreement of the parties and supersedes all
        other
        agreements and understandings, oral or written, with respect to the matters
        contained herein.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      


      12.8   
         Counterparts/Execution.
        This
        Agreement may be executed in any number of counterparts and by the different
        signatories hereto on separate counterparts, each of which, when so executed,
        shall be deemed an original, but all such counterparts shall constitute but
        one
        and the same instrument. This Agreement may be executed by facsimile signature
        and delivered by facsimile transmission.

       

      [THIS
        SPACE INTENTIONALLY LEFT BLANK]

      


      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      


      IN
        WITNESS WHEREOF, the
        undersigned have executed and delivered this Security Agreement, as of the
        date
        first written above.

      


      
        	
                 ''DEBTOR''

                THE
                  MEDICAL EXCHANGE INC.

                a
                  Nevada corporation

              	 	 	 “THE
                COLLATERAL AGENT”
	 	 	 	 
	By: 	 	 	 
	
                
                  

                

              	 	 	
                
SHELDON
                S. TRAUBE
	Its:
                _____________________________________	 	 	
              


      

       

      
        APPROVED
          BY “LENDERS”:

      

       

      
        	 Name
                of Lender (Print):	 	 	 Name
                of Lender (Print):
	 	 	 	 
	
                

              	 	 	
                

              


        	 	 	 	 
	By:	 	 	By:
	
                
                  

                

              	 	 	
                
                  

                

              
	
                
                  
                    Print
                      Name of
                      Signator:________________________________

                  

                

              	 	 	
                Print
                  Name of
                  Signator:________________________________

              




      This
        Security Agreement may be signed by facsimile signature
        and

      delivered
        by confirmed facsimile transmission.

      


      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      


      SCHEDULE
        A TO SECURITY AGREEMENT

       

      
        
          	
                  LENDER

                	
                  PURCHASE
                    PRICE

                
	 	 
	 	 
	
                  TOTAL

                	 


        

      

      


      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      


      ANNEX
        I

       

      TO

       

      SECURITY
        AGREEMENT

       

      PLEDGE
        AMENDMENT

       

      This
        Pledge Amendment, dated _________ __ 200_, is delivered pursuant to Section
        4.3
        of the Security Agreement referred to below. The undersigned hereby agrees
        that
        this Pledge Amendment may be attached to the Security Agreement, dated February
        ___, 2007, as it may heretofore have been or hereafter may be amended, restated,
        supplemented or otherwise modified from time to time and that the shares
        listed
        on this Pledge Amendment shall be hereby pledged and assigned to Collateral
        Agent and become part of the Collateral referred to in such Security Agreement
        and shall secure all of the Obligations referred to in such Security
        Agreement.

      

        
          	
                  Name
                    of Issuer

                	
                  Number

                  of
                    Shares

                	
                  Class

                	
                  Certificate

                  Number(s)

                
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 


        

      

       

      
        	 	 	 
	 	
                THE
                  MEDICAL EXCHANGE INC.

              
	 
 	 
 	 
 
	 	By:  	 
	 	
                

              


      

       

    

    
      
        
        

      

      
        14