Exhibit 10.7


                               SECURITY AGREEMENT

         THIS SECURITY AGREEMENT is dated as of the 1 day of AUG. 2003, by THIRD
MILLENNIUM INDUSTRIES, INC., a Nevada corporation, having an address of 4933 Hwy
60, Rogersville, MO 65742 ("Grantor") for the benefit of collectively Philip E,
Tearney, an individual having an address of 10801 Mastin, Suite 920, Overland
Park Kansas 66210 (the "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, 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 Agreement:

         ALL EQUIPMENT INVENTORY, FIXTURES, MATERIALS, FURNITURE, OFFICE
         EQUIPMENT, OFFICE SUPPLIES AND ANY FIXED ASSET (ALL DEFINED TERMS SHALL
         HAVE THE DEFINITION GIVEN THEM IN THE UNIFORM COMMERCIAL CODE IN EFFECT
         IN THE STALE OF MISSOURI)

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

         (A) All accessions, attachments, accessories, tools, parts, supplies,
         replacements 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, or other
         disposition of any of the property described in this Collateral
         section.

         (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.

COLLATERAL. With respect to the Collateral, Grantor represents and warrants to
Lender that:

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         PERFECTION OF SECURITY INTEREST. Grantor hereby authorizes Lender to
         file with the appropriate filing office, now or hereafter from time to
         time, financing statements covering all assets of the Grantor,
         including, but not limited to any specific listing, identification or
         type of all or any portion of the assets of the Grantor. The Grantor
         acknowledges and agrees by evidence of its signature below, this
         authorization is sufficient to satisfy the requirements of Revised
         Article 9 of the Uniform Commercial Code, July 1, 2001 revisions.
         Grantor also agrees to execute such documents and to take whatever
         other 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 if not delivered to Lender for
         possession by Lender.

         NOTICES TO LENDER. Grantor will 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 Grantor, (4) change in the authorized signer(s), (5)
         change in Grantor's principal office address. (6) conversion of Grantor
         to a new or different type of business entity, or (7) 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 will
         take effect until alter Lender has been notified.

         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.

         REMOVAL OF THE COLLATERAL. Grantor shall not remove the Collateral from
         its existing location without Lender's prior written consent. Grantor
         shall, whenever requested, advise Lender of the exact location of the
         Collateral.

         TRANSACTIONS INVOLVING COLLATERAL. Grantor shall not sell, offer to
         sell, or otherwise transfer or dispose of the Collateral. 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 persons.

         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

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         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 Collateral

         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 Leader as
         an additional obliges 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. 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.

         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 thirty (30) 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.

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         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 within
         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.

         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 coat of the
         Collateral.

GRANTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until default and except
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 lime 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
Indebtedness.

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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 will be payable on demand. The Collateral 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.

REINSTATEMENT OF SECURITY INTEREST. If payment is made by Grantor, whether
voluntarily or otherwise, or by guarantor or by any third party, on the
Indebtedness and thereafter Lender is forced to remit the amount of that payment
(A) to Grantor's trustee in bankruptcy or to any similar person under any
federal or state bankruptcy law or law for the relief of debtors, (B) by reason
of any judgment, decree or order of any court or administrative body having
jurisdiction over Lender or any of Lender's property, or (C) by reason of any
settlement or compromise of any claim made by Lender with any claimant
(including without limitation Grantor), the Indebtedness shall be considered
unpaid for the purpose of enforcement of this Agreement and this Agreement shall
continue to be effective or shall be reinstated, as the case may be,
notwithstanding any cancellation of this Agreement or of any note or other
installment or agreement evidencing the Indebtedness and the Collateral will
continue to secure the amount repaid or recovered to the same extent as if that
amount never had been originally received by Lender, and Grantor shall be bound
by any judgment, decree, order, settlement or compromise relating to the
Indebtedness or to this Agreement.

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

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

         OTHER DEFAULTS. Grantor or Borrower 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 Borrower or Grantor.

         FALSE STATEMENTS. Any warranty, representation or statement made or
         furnished to Lender by Grantor or on Grantor's behalf under this
         Agreement, the Note, or any related document 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.

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

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party under the Missouri Uniform Commercial Code. In addition and without
limitation. Lender may exercise any one or more of the following rights and
remedies:

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

         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 reasonable notice of the
         time after which any private sale or any other intended disposition of
         the Collateral is to be made. The requirements of reasonable notice
         shall be met if such notice is given at least fifteen (15) 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

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         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 will not bar 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 amendment.

         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 proceedings (including efforts
         to modify or vacate any automatic stay or injunction), and appeals.
         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, construed and
         enforced in accordance with federal law and the laws of the State of
         Missouri. This Agreement has been accepted by Lender in the State of
         Missouri.

         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.

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         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, not 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 or to continue the security interest granted in
         this Agreement. 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 Collateral.

         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.

         SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations,
         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.

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

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:

         ACCOUNT. The word "Account" means a trade account, account receivable,
         other receivable, or other right to payment for goods sold or services
         rendered owing to Grantor (or to a third party grantor acceptable to
         Lender).

         AGREEMENT. The word "Agreement" means this Security Agreement, as this
         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.

         INDEBTEDNESS. The word "Indebtedness" means and includes without
         limitation all indebtedness evidenced by the Note or Related Documents,
         together with all other obligations, debts and liabilities of Borrower
         to Lender, as well as all claims by Lender against Borrower, whether
         now or hereafter existing, voluntary or involuntary, due or not due,
         absolute or contingent, liquidated or unliquidated; whether Borrower
         may be liable individually or jointly with others, whether Borrower may
         be obligated as a guarantor, surety, or otherwise; whether recovery
         upon such Indebtedness may be or hereafter may become harred by any
         statute of limitations; and whether such Indebtedness may be or
         hereafter may become otherwise enforceable.

         NOTE. The word "Note" means that certain Promissory Note dated _______,
         2003 in the original principal amount of $165,000 from Borrower to
         Lender, together with all renewals of, extensions of, modifications of,
         refinancings of, consolidations of, and substitutions for such
         promissory notes.

         RELATED DOCUMENTS. The words "Related Documents" mean all promissory
         notes, credit agreements, loan agreements, environmental agreements,
         guaranties, 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.

GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY
AGREEMENT AND AGREES TO ITS TERMS.

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<PAGE>

GRANTOR:

THIRD MILLENNIUM INDUSTRIES, INC.

By: Dennis N. Depevest
   ------------------------------
Name: DENNIS N. DEPEVEST
Title: PRESIDENT

LENDER:

Philip E. Tearney
---------------------------------
Philip E. Tearney

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