**LOAN
      AGREEMENT**




LOAN
      AGREEMENT, effective as of November 29, 2006, is by and among Bio Solutions
      Manufacturing, Inc., a New York corporation (the “Company”), and each of the
      parties set forth on the signature page hereto (each, an “Investor” and
      collectively, the “Investors”).




WHEREAS,
      the Investors have previously purchased notes or other evidences of indebtedness
      in the aggregate principal amount of Eight Hundred Two Thousand Five Hundred
      Seventy Eight Dollars and Eight Six Cents ($802,857.86) (together with any
      note(s) issued in replacement thereof, the “Prior Notes”), as set forth
      immediately below such Investor’s name on the signature page
      hereto.




WHEREAS,
      the Company has requested that one or more of the Investors extend credit in
      the
      form of a series of term loans (each a “loan” and collectively, the “Loans”) to
      be made to the Company from and after the Closing Date (as defined below) from
      time to time in accordance with the terms hereof in an aggregate principal
      amount of up to $3,000,000.




WHEREAS,
      subject to the terms and conditions set forth in this Agreement, including
      the
      amendment and restatement of the Prior Notes as described under Section 1.1
      below, the Investors are willing to make Loans to the Company, and the Company
      desires to borrow from the Investors from time to time, up to an aggregate
      principal amount of $3,000,000, in an amount per each Investor as set forth
      immediately below such Investor’s name on the signature page
      hereto.




Certain
      capitalized terms used in this Agreement shall have the meanings set forth
      in
      Article V hereof.




NOW,
      THEREFORE, in consideration of the mutual covenants contained in this Agreement
      and for other good and valuable consideration the receipt and adequacy are
      hereby acknowledged, the Company and the Investors agree as
      follows:




**ARTICLE
      I**




**ISSUANCE
      OF NOTES; LOANS**




1.1  Amendment
      and Restatement of Prior Notes .
      At
      Closing, the Company will sign and deliver a series of amended and restated
      convertible promissory notes (the “Amended Notes”) in the form attached hereto
      as “Exhibit A” to each Investor to amend and restate the Prior Note held by such
      Investor. The amendment and restatement of the Prior Notes as set forth herein
      is an express and absolute condition of the Investors’ entering into this
      Agreement.




1.2  Procedure
      for Lending .




(a)  The
      Company shall request that Loans be made hereunder by delivering to the
      Investors a written request for a Loan (each, a “Loan Request”) in the form of
      Annex A to the Note, at any time and from to time up to the fifth Business
      Day
      prior to the Maturity Date. The Company’s initial Loan Request may be made at
      any time on or after the Closing Date. Subsequent Loan Requests may not be
      delivered prior to the third Business Day following the making of a Loan
      hereunder, regardless of the amount of such prior Loan. The amount of a Loan
      requested in a Loan Request may not be less than $5,000 or greater than
      $100,000, and the aggregate amount of all Loans made hereunder will not exceed
      $3,000,000. Delivery of a Loan Request shall constitute a certification by
      the
      Company that (a) the representations and warranties contained in the
      Transaction Documents are true and correct on and as of the date of such Loan
      Request, as if such representations and warranties were first made on the date
      thereof, (b) the Company has complied and is in compliance with all of its
      covenants, agreements and other obligations under the Transaction Documents,
      and
      (c) if effective at such time, the Company has no reason to believe that
      the Conversion Shares Registration Statement (as defined in Section 2.1 (f))
      is
      not effective and available for use by the Investors to resell the Conversion
      Shares.












(b)  The
      Investors shall have the right, in their sole and absolute discretion, to accept
      or reject any Loan Request made hereunder for any or no reason; provided, that,
      the Investors will use their reasonable efforts to indicate whether and to
      what
      extent it has decided to accept or reject a Loan Request within two (2) Business
      Days of its receipt of each such request. An Investor’s decision to reject in
      whole or in part a Loan Request shall not limit or otherwise affect any
      obligation of the Company or any other obligor or guarantor under any
      Transaction Document. A failure to respond shall not be deemed an agreement
      by
      the Investors to extend the Loan requested in any Loan Request.




(c)  If
      an
      Investor shall indicate a willingness to make the Loan requested in a Loan
      Request, it will deliver to the Company an amended Loan Schedule (attached
      to
      the Note as Exhibit B), reflecting the amount of the Loan it has agreed to
      extend and the aggregate principal amount that would be owing under the Note
      (after giving effect to such agreed Loan). It shall be a precondition to an
      Investor’s willingness to make such Loan that the Company attest to such
      calculations by executing where indicated and returning to the Investor a copy
      of such amended Loan Schedule. The Investor will consummate an accepted Loan
      Request by delivering the applicable Loan amount by wire transfer of immediately
      available funds to an account indicated therefor by the Company. The amounts
      indicated on the amended Loan Schedule shall become controlling and enforceable
      upon the Company and the Investor immediately and without further action when
      the Investor receives receipt of a wire reference number for the amount of
      the
      Loan (less any fees for the wire as imposed by the sending and/or receiving
      institution) to the account indicated therefor by the Company. Accordingly,
      the
      principal amount of the Loan outstanding from time to time shall be reflected
      in
      the amended Loan Schedule.




1.3  Deliveries
      of Closing .
      On or
      prior to the Closing Date the Company shall deliver or cause to be delivered
      to
      the Investors the following:




(a)  Duly
      executed original Amended Notes for each Investor.




(b)  A
      duly
      executed Pledge Agreement, and all securities and instruments pledged thereunder
      shall have been duly and validly pledged thereunder to the Investors and
      certificates representing such shares or such instruments accompanied by
      instruments of transfer and stock powers endorsed in blank, shall be in the
      actual possession of the Investors or such other action shall have been taken
      under applicable laws to perfect the pledge.




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(c)  A
      duly
      executed Security Agreement and IP Security Agreement. In addition each document
      (including, without limitation, any Uniform Commercial Code financing
      statements) required under the Security Agreement and IP Security Agreement
      to
      be filed, registered or recorded in order to create, in favor of the Investors,
      a perfected security interest in or Lien upon the Collateral (as defined in
      such
      agreements) shall have been properly filed, registered or recorded in each
      jurisdiction in which the filing, registration or recordation thereof is so
      required or requested, and the Investors shall have received an acknowledgment
      copy, or other evidence satisfactory to it, of each such filing, registration
      or
      recordation and satisfactory evidence of the payment of any necessary, fee,
      tax
      or expense relating thereto.




(d)  A
      duly
      executed original of each other Transaction Document.




(e)  An
      acknowledgment copy of the Transfer Agent Instructions which shall have been
      duly counter executed by the Company’s transfer agent.




(f)  All
      other
      documents, instruments and writings required to have been executed and delivered
      at or prior to the Closing by the Company and its Subsidiaries pursuant to
      this
      Agreement.




**ARTICLE
      II**




**REPRESENTATIONS
      AND WARRANTIES**




2.1  Representations
      and Warranties of the Company .
      The
      Company hereby represents and warrants to the Investors:




(a)  Organization
      and Qualification .
      The
      Company is a corporation duly incorporated, validly existing and in good
      standing under the laws of New York, with the requisite corporate power and
      authority to own and use its properties and assets and to carry on its business
      as currently conducted. The Company has no Subsidiaries other than as set forth
      in Schedule 2.1(a). Each of the Subsidiaries is an entity, duly incorporated
      or
      otherwise organized, validly existing and in good standing under the laws of
      the
      jurisdiction of its incorporation or organization (as applicable), with the
      full
      power and authority to own and use its properties and assets and to carry on
      its
      business as currently conducted. Each of the Company and the Subsidiaries is
      duly qualified to do business and is in good standing as a foreign corporation
      in each jurisdiction in which the nature of the business conducted or property
      owned by it makes such qualification necessary, except where the failure to
      be
      so qualified or in good standing, as the case may be, could not, individually
      or
      in the aggregate, (x) adversely affect the legality, validity or enforceability
      of the Securities (as defined below) or any of the Transaction Documents, (y)
      have or result in a material adverse effect on the results of operations,
      assets, prospects, or condition (financial or otherwise) of the Company and
      the
      Subsidiaries, taken as a whole, or (z) adversely impair the Company’s ability to
      perform fully on a timely basis its obligations under any of the Transaction
      Documents (any of(x), (y) or (z), a “Material Adverse Effect”).




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(b)  Authorization;
      Enforcement .
      The
      Company has the requisite corporate power and authority to enter into and to
      consummate the transactions contemplated by each of the Transaction Documents
      and otherwise to carry out its obligations thereunder. The execution and
      delivery of each of the Transaction Documents by the Company and the
      consummation by it of the transactions contemplated thereby have been duly
      authorized by all necessary action on the part of the Company and no further
      action is required by the Company. Each of the Transaction Documents has been
      duly executed by the Company and, when delivered (or filed, as the case may
      be)
      in accordance with the terms hereof, will constitute the valid and binding
      obligation of the Company enforceable against the Company in accordance with
      its
      terms. Neither the Company nor any Subsidiary is in violation of any of the
      provisions of its respective articles of incorporation, by-laws or other charter
      documents.




(c)  Capitalization .
      The
      authorized capital stock of the Company consists of 100,000,000 shares of Common
      Stock and 10,000,000 shares of preferred stock, no par value (the “Preferred
      Stock”). As of September 15, 2006, there were 34,395,037 shares of Common Stock
      issued and outstanding and no shares of Preferred Stock issued and outstanding.
      No shares of Common Stock or other securities of the company are entitled to
      preemptive or similar rights, nor is any holder of the Company’s securities
      entitled to preemptive or similar rights arising out of any agreement or
      understanding with the Company by virtue of any of the Transaction Documents.
      Except as a result of the issuance of the Amended Notes or any Note pursuant
      to
      any Loan (collectively, the “Notes”), there are no outstanding options,
      warrants, script rights to subscribe to, calls or commitments of any character
      whatsoever relating to, or securities, rights or obligations convertible into
      or
      exchangeable for, or giving any Person any right to subscribe for or acquire,
      any shares of Common Stock, or contracts, commitments, understandings, or
      arrangements by which the Company or any Subsidiary is or may become bound
      to
      issue additional shares of Common Stock, or securities or rights convertible
      or
      exchangeable into shares of Common Stock. To the knowledge of the Company,
      except as specifically disclosed in the SEC Documents (as defined below) or
      Schedule 2.1(c), no Person or group of related Persons beneficially owns (as
      determined pursuant to Rule 13d-3 promulgated under the Exchange Act) or has
      the
      right to acquire by agreement with or by obligation binding upon the Company,
      in
      excess of five percent (5%) of the Common Stock.




(d)  Issuance
      of the Notes .
      The
      Conversion Shares (as defined below) and the Notes are duly authorized and,
      the
      Conversion Shares, when issued and paid for in accordance with the terms hereof
      and the Notes, will be duly and validly issued, fully paid and nonassessable,
      free and clear of all liens, encumbrances and rights of first refusal of any
      kind (collectively, “Liens”). The Company has on the date hereof and will, at
      all times while there is any outstanding principal amount and interest due
      under
      the Notes, maintain an adequate reserve of duly authorized shares of Common
      Stock, reserved for issuance to the holders of the Notes to enable it to perform
      its conversion obligations under the Notes. Such number of reserved and
      available shares of Common Stock is not less than 200% of the number of shares
      of Common Stock which would be issuable upon conversion in full of the principal
      amount available for borrowing and interest thereon under the Notes, assuming
      that the Notes are outstanding for the full term, that such conversion occurred
      at the Conversion Price (as defined in the Notes) on the date hereof and that
      the outstanding principal amount due under the Notes is $1,577,500 (such number
      of shares of Common Stock as contemplated above, the “Initial Minimum”). All
      such authorized shares of Common Stock shall be duly reserved for issuance
      to
      the holders of the Notes. The shares of Common Stock issuable upon conversion
      of
      the Notes are collectively referred to herein as the “Conversion Shares.” When
      issued in accordance with the Notes, the Conversion Shares will be duly
      authorized, validly issued, fully paid and nonassessable, free and clear of
      all
      Liens.




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(e)  No
      Conflicts .
      The
      execution, delivery and performance of the Transaction Documents by the Company
      and the consummation by the Company of the transactions contemplated thereby
      do
      not and will not (i) conflict with or violate any provision of its articles
      of
      incorporation, bylaws or other charter documents (each as amended through the
      date hereof), or (ii) subject to obtaining the Required Approvals (as defined
      below), conflict with, or constitute a default (or an event which with notice
      or
      lapse of time or both would become a default) under, or give to others any
      rights of termination, amendment, acceleration or cancellation (with or without
      notice, lapse of time or both) of, any agreement, loan, credit facility,
      indenture or instrument (evidencing a Company debt or otherwise) or other
      understanding to which the Company or any Subsidiary is a party or by which
      any
      property or asset of the Company or any Subsidiary is bound or affected, or
      (iii) result in a violation of any law, rule, regulation, order, judgment,
      injunction, decree or other restriction of any court or governmental authority
      to which the Company is subject (including Federal and state securities laws
      and
      regulations), or by which any property or asset of the Company is bound or
      affected, except in the case of each of clauses (ii) and (iii), as could not,
      individually or in the aggregate, have or result in a Material Adverse Effect.
      The business of the Company is not being conducted in violation of any law,
      ordinance or regulation of any governmental authority, except for violations
      which, individually or in the aggregate, could not have or result in a Material
      Adverse Effect.




(f)  Filings,
      Consents and Approvals .
      Neither
      the Company nor any Subsidiary is required to obtain any consent, waiver,
      authorization or order of, give any notice to, or make any filing or
      registration with, any court or other Federal, state, local or other govern-
      mental authority or other Person in connection with the execution, delivery
      and
      performance by the Company of the Transaction Documents, other than (i) the
      filings contemplated by the Security Agreement and the IP Security Agreement,
      (ii) the filings required pursuant to Section 3.11 of this Agreement, (iii)
      the filing with the Securities and Exchange Commission (the “Commission”) of one
      or more registration statements meeting the requirements set forth in the
      Registration Rights Agreement and covering the resale of the Conversion Shares
      by the Investors (collectively, the “Conversion Shares Registration Statement”),
      (iv) applicable Blue Sky filings and (v) in all other cases where the failure
      to
      obtain such consent, waiver, authorization or order, or to give such notice
      or
      make such filing or registration could not have or result in, individually
      or in
      the aggregate, a Material Adverse Effect (collectively, the “Required
      Approvals”).




(g)  Litigation
      Proceedings .
      There
      is no action, suit, notice of violation, proceeding or investigation pending
      or,
      to the knowledge of the Company, threatened against or affecting the Company
      or
      any of its Subsidiaries or any of their respective properties before or by
      any
      court, governmental or administrative agency or regulatory authority (Federal,
      state, county, local or foreign) which (i) adversely affects or challenges
      the
      legality, validity or enforceability of any of the Transaction Documents or
      the
      Securities ( as defined in Section 2(i)) or (ii) could, individually or in
      the
      aggregate, have or result in a Material Adverse Effect.




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(h)  No
      Default or Violation .
      Neither
      the Company nor any Subsidiary (i) is in default under or in violation of
      (and no event has occurred which has not been waived which, with notice or
      lapse
      of time or both, would result in a default by the Company or any Subsidiary
      under), nor has the Company or any Subsidiary received notice of a claim that
      it
      is in default under or that it is in violation of, any indenture, loan, or
      credit agreement or any other agreement or instrument to which it is a party
      or
      by which it or any of its properties is bound, (ii) is in violation of any
      order of any court, arbitrator or governmental body, or (iii) is in
      violation of any statute, rule or regulation of any governmental authority,
      in
      each case of clauses (i), (ii) or (iii) above, except as could not individually
      or in the aggregate, have or result in a Material Adverse Effect.




(i)  Private
      Offering .
      Assuming the accuracy of the representations and warranties of the Investors
      set
      forth in Sections 2.2(b)-(g), the offer, issuance, and sale of the Notes and
      the
      Conversion Shares (collectively, the “Securities”) to the Investors as
      contemplated hereby are exempt from the registration requirements of the
      Securities Act. Neither the Company nor any Person acting on its behalf has
      taken any action that could subject the offering, issuance or sale of the
      Securities to the registration requirements of the Securities Act.




(j)  SEC
      Documents; Financial Statements .
      Except
      as set forth on Schedule 2.1.(j), the Company has filed all reports required
      to
      be filed by it under the Exchange Act, including pursuant to Section 13(a)
      or
      15(d) thereof, for the two (2) years preceding the date hereof (or such shorter
      period as the Company was required by law to file such material) (the foregoing
      materials being collectively referred to herein as the “SEC Documents” and,
      together with the Schedules to this Agreement, the “Disclosure Materials”). As
      of their respective dates, the SEC Documents complied in all material respects
      with the requirements of the Securities Act and the Exchange Act and the rules
      and regulations of the Commission promulgated thereunder, and none of the SEC
      Documents, when filed, contained any untrue statement of a material fact or
      omitted to state a material fact required to be stated therein or necessary
      in
      order to make the statements therein, in light of the circumstances under which
      they were made, not misleading. All material agreements to which the Company
      is
      a party or to which the property or assets of the Company are subject have
      been
      filed as exhibits to the SEC Documents as required. The financial statements
      of
      the Company included in the SEC Documents comply in all material respects with
      applicable accounting requirements and the rules and regulations of the
      Commission with respect thereto as in effect at the time of filing. Such
      financial statements have been prepared in accordance with generally accepted
      accounting principles (“GAAP”) applied on a consistent basis during the periods
      involved, except as may be otherwise specified in such financial statements
      or
      the notes thereto, and fairly present in all material respects the financial
      position of the Company and its consolidated subsidiaries as of and for the
      dates thereof and the results of operations and cash flows for the periods
      then
      ended, subject, in the case of unaudited statements, to normal, immaterial,
      year-end audit adjustments. Since July 31, 2006, except as specifically
      disclosed in the SEC Documents, (a) there has been no event, occurrence or
      development that has or that could result in a Material Adverse Effect,
      (b) the Company has not incurred any liabilities (contingent or otherwise)
      other than (x) liabilities incurred in the ordinary course of business
      consistent with past practice and (y) liabilities not required to be reflected
      in the Company’s financial statements pursuant to GAAP or required to be
      disclosed in filings made with the Commission, (c) the Company has not
      altered its method of accounting and (d) the Company has not declared or
      made any payment or distribution of cash or other property to its stockholders
      or officers or directors (other than in compliance with existing Company stock
      option plans) with respect to its capital stock, or purchased, redeemed (or
      made
      any agreements to purchase or redeem) any shares of its capital
      stock.




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(k)  Investment
      Company .
      The
      Company is not, and is not an Affiliate (as defined in Rule 405 under the
      Securities Act) of, an “investment company” within the meaning of the Investment
      Company Act of 1940, as amended.




(l)  Certain
      Fees .
      No fees
      or commissions will be payable by the Company to any broker, financial advisor
      or consultant, finder, placement agent, investment banker, or bank with respect
      to the transactions contemplated by this Agreement. The Investors shall have
      no
      obligation with respect to any fees or with respect to any claims made by or
      on
      behalf of any Person for fees of a type contemplated in this Section that may
      be
      due in connection with the transactions contemplated by this Agreement. The
      Company shall indemnify and hold harmless the Investors, their employees,
      officers, directors, agents, and partners, and their respective Affiliates,
      from
      and against all claims, losses, damages, costs (including the costs of
      preparation and attorney’s fees) and expenses suffered in respect of any such
      claimed or existing fees, as such fees and expenses are incurred.




(m)  Solicitation
      Materials .
      Neither
      the Company nor any Person acting on the Company’s behalf has solicited any
      offer to buy or sell the Securities by means of any form of general solicitation
      or advertising.




(n)  Indebtedness .
      Schedule 2.1(n) sets forth a complete and accurate list of all indebtedness
      of
      the Company or any of its Subsidiaries (other than the indebtedness incurred
      pursuant to this Agreement and the other Transaction Documents), describes
      the
      agreement, note or other instrument evidencing such indebtedness and list the
      parties thereto, and indicates the principal amount outstanding thereunder,
      the
      scheduled maturity thereof and the existence of any Liens in respect thereof.
      No
      indebtedness of the Company or any of its Subsidiaries is senior to the Notes
      in
      right of payment, whether upon liquidation or dissolution, or
      otherwise.




(o)  Listing
      and Maintenance Requirements Compliance .
      Except
      as set forth in the SEC Documents, the Company has not, in the two (2) years
      preceding the date hereof, received notice (written or oral) from any stock
      exchange, market or trading facility on which the Common Stock is or has been
      listed (or on which it has been quoted) to the effect that the Company is not
      in
      compliance with the listing or maintenance requirements of such exchange or
      market. The Company is, and has no reason to believe that it will not in the
      foreseeable future continue to be, in compliance with all such maintenance
      requirements.




(p)  Intellectual
      Property Rights .
      Each of
      the Company and its Subsidiaries owns, or has the legal right to use pursuant
      to
      a valid license in full force and effect or otherwise, all patents, patent
      applications, trademarks, trademark applications, service marks, trade names,
      copyrights, copyright applications, processes and formulae, whether or not
      registered or qualified (collectively, the “Intellectual Property Rights”)
      necessary or material for the conduct of its business as presently conducted
      and
      as presently proposed to be conducted, and which the failure to so have would
      have a Material Adverse Effect. To the best knowledge of the Company all such
      Intellectual Property Rights are enforceable and there is no existing
      infringement by another Person of any of the Intellectual Property Rights.
      No
      claim has been made or, to the Company’s knowledge, has been threatened or is
      reasonably likely to be made, that the use by the Company or any of its
      Subsidiaries of any Intellectual Property Right presently used in the conduct
      of
      its business does or may violate or infringe the rights of any other Person,
      or
      otherwise contesting the validity, enforceability, use or ownership of any
      such
      Intellectual Property Right.




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(q)  Registration
      Rights; Rights of Participation .
      Except
      as set forth on Schedule 6(b) to the Registration Rights Agreement, the Company
      has not granted or agreed to grant to any Person any rights (including
“piggy-back” registration rights) to have any securities of the Company
      registered with the Commission or any other governmental authority which has
      not
      been satisfied. No Person has any right of first refusal, preemptive right,
      right of participation, or any similar right to participate in the transactions
      contemplated by the Transaction Documents.




(r)  Regulatory
      Permits .
      The
      Company and its Subsidiaries possess all certificates, authorizations and
      permits issued by the appropriate Federal, state or foreign regulatory
      authorities necessary to conduct their respective businesses as described in
      the
      SEC Documents, except where the failure to possess such permits could not,
      individually or in the aggregate, have or result in a Material Adverse Effect
      (“Material Permits”), and neither the Company nor any such Subsidiary has
      received any notice of proceedings relating to the revocation or modification
      of
      any Material Permit.




(s)  Ownership
      of Properties .
      The
      Company and the Subsidiaries have good and marketable title in fee simple to
      all
      real property owned by them which is material to the business of the Company
      and
      its Subsidiaries and good and marketable title in all personal property owned
      by
      them which is material to the business of the Company and its Subsidiaries,
      in
      each case free and clear of all Liens, except for Liens as do not materially
      affect the value of such property and do not interfere with the use made and
      proposed to be made of such property by the Company and its Subsidiaries. Any
      real property and facilities held under lease by the Company and its
      Subsidiaries are held by them under valid, subsisting, and enforceable leases
      with such exceptions as are not material and do not interfere with the use
      made
      and proposed to be made of such property and buildings by the Company and its
      Subsidiaries.




(t)  Security
      Documents .




(i)  The
      Pledge Agreement is effective to create in favor of the Secured Parties, a
      legal, valid and enforceable security interest in the Collateral (as defined
      in
      the Pledge Agreement) and, when the Collateral is delivered to the Secured
      Parties (as defined in the Pledge Agreement), the Pledge Agreement shall
      constitute a fully perfected first priority Lien on, and security interest
      in,
      all right, title and interest of the pledgors thereunder in such Collateral,
      in
      each case prior and superior in right to any other Person.




(ii)  The
      Security Agreement is effective to create in favor of the Secured Parties,
      a
      legal valid and enforceable security interest in the Collateral (as defined
      in
      the Security Agreement ) and, when financing statements in appropriate form
      are
      filed in the offices specified on Schedule B to the Security Agreement, the
      Security Agreement shall constitute a fully perfected Lien on, and security
      interest in, all right, title and interest of the grantors thereunder in such
      Collateral, in each case prior and superior in right to any other Person other
      than with respect to Liens expressly permitted by Section 4.2.




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(iii)  When
      the
      IP Security Agreement is filed in the United States Patent and Trademark Office
      and the United States Copyright Office, the IP Security Agreement shall
      constitute a fully perfected Lien on, and security interest in, all right,
      title
      and interest of the grantors thereunder in the Collateral (as defined in the
      IP
      Security Agreement), in each case prior and superior in right to any other
      Person (it being understood that subsequent recordings in the United States
      Patent and Trademark Office and the United States Copyright Office may be
      necessary to perfect a lien on registered trademarks, trademark applications
      and
      copyrights acquired by the grantors after the date hereof).




(u)  Disclosure .
      The
      Company confirms that it has not provided any of the Investors or their agents
      or counsel with any information that constitutes or might constitute material
      non-public information. The Company understands and confirms that the Investors
      shall be relying on the foregoing representations in effecting transactions in
      securities of the Company. All disclosure provided to the Investors regarding
      the Company, its business and the transactions contemplated hereby, including
      the Schedules to this Agreement, furnished by or on behalf of the Company are
      true and correct and do not contain any untrue statement of a material fact
      or
      omit to state any material fact necessary in order to make the statements made
      therein, in light of the circumstances under which they were made, not
      misleading.




2.2  Representations
      and Warranties of the Investors .
      The
      Investors hereby represent and warrant to the Company as follows:




(a)  Organization;
      Authority . If
      the
      Investor is an entity, such Investor is a corporation, limited liability
      company, partnership, or other entity duly incorporated or organized, validly
      existing and in good standing under the laws of the jurisdiction of its
      incorporation or organization. Each Investor has the requisite power and
      authority to enter into and perform this Agreement and the other Transaction
      Documents and to purchase the Securities being sold to it hereunder. The
      execution, delivery, and performance of this Agreement and the other Transaction
      Documents by each Investor and the consummation by it of the transactions
      contemplated hereby and thereby have been duly authorized by all necessary
      corporate or partnership action, and no further consent or authorization of
      each
      Investor or its Board of Directors, stockholders, partners, members, as the
      case
      may be, is required. This Agreement has been duly authorized, executed, and
      delivered by each Investor and constitutes, or shall constitute when executed
      and delivered, a valid and binding obligation of the Investors enforceable
      against the Investors in accordance with the terms thereof.




(b)  Investment
      Intent .
      Each
      Investor is acquiring any Securities offered and sold to it hereunder as
      principal for its own account for investment purposes only and not with a view
      to or for distributing or reselling the Securities or any part thereof or
      interest therein, without prejudice, however, to such Investor’s right, subject
      to the provisions of this Agreement and the Registration Rights Agreement,
      at
      all times to sell or otherwise dispose of all or any part of the Securities
      pursuant to an effective registration statement under the Securities Act and
      in
      compliance with applicable state securities laws or under an exemption from
      such
      registration. By making this representation, the Investors do not represent
      that
      they will hold any acquired Securities for any period of time.




-9-







(c)  Experience
      of the Investors .
      The
      Investors, either alone or together with their respective representatives,
      has
      such knowledge, sophistication and experience in business and financial matters
      so as to be capable of evaluating the merits and risks of the prospective
      investment in the Securities, and has so evaluated the merits and risks of
      such
      investment. Each Investor is an “accredited investor” as defined in Rule 501 (a)
      under the Securities Act.




(d)  Ability
      of the Investors to Bear Risk of Investment .
      Each
      Investor is able to bear the economic risk of an investment in the Securities
      and, at the present time, is able to afford a complete loss of such
      investment.




(e)  Financing .
      The
      Investors have, and will have from the Closing Date through the Maturity Date,
      sufficient funds to consummate the loans in the maximum aggregate principal
      amount contemplated hereby.




(f)  Access
      to Information .
      Each
      Investor has reviewed the Disclosure Materials and has been afforded
      (i) the opportunity to ask such questions as it has deemed necessary of,
      and to receive answers from, representatives of the Company concerning the
      terms
      and conditions of the offering of the Securities and the merits and risks of
      investing in the Securities; (ii) access to information about the Company
      and the Company’s financial condition, results of operations, business,
      properties, management and prospects sufficient to enable it to evaluate its
      investment; and (iii) the opportunity to obtain such additional information
      which the Company possesses or can acquire without unreasonable effort or
      expense that is necessary to make an informed investment decision with respect
      to the investment and to verify the accuracy and completeness of the information
      contained in the Disclosure Materials. Neither such inquiries nor any other
      investigation conducted by or on behalf of the Investors or their respective
      or
      counsel shall modify, amend or affect the Investor’s right to rely on the truth,
      accuracy and completeness of the Disclosure Materials and the Company’s
      representations and warranties contained in the Transaction
      Documents.




(g)  Reliance .
      Each
      Investor understands and acknowledges that (i) the Securities are being
      offered and sold to it without registration under the Securities Act in a
      private placement that is exempt from the registration provisions of the
      Securities Act and (ii) the availability of such exemption, depends in part
      on, and the Company will rely upon the accuracy and truthfulness of, the
      foregoing representations and such Investor hereby consents to such reliance.
      The Company acknowledges and agrees that such Investor does not make nor has
      made any representations or warranties with respect to the transactions
      contemplated hereby other than those specifically set forth in this Section
      2.2.




-10-


**ARTICLE
      III**




**OTHER
      AGREEMENTS OF THE PARTIES**




3.1  Transfer
      Restrictions .




(a)  Securities
      may only be disposed of pursuant to an effective registration statement under
      the Securities Act or pursuant to an available exemption from or in a
      transaction not subject to the registration requirements of the Securities
      Act.
      In connection with any transfer of Securities other than pursuant to an
      effective registration statement or to the Company, except as otherwise set
      forth herein, the Company may require the transferor thereof to provide to
      the
      Company an opinion of counsel selected by the transferor, the form and substance
      of which opinion shall be reasonably satisfactory to the Company, to the effect
      that such transfer does not require registration of such transferred securities
      under the Securities Act. Notwithstanding the foregoing, the Company hereby
      consents to and agrees to register on the books of the Company and with any
      transfer agent for the securities of the Company any transfer of Securities
      by
      an Investor to an Affiliate of an Investor or to one or more funds or managed
      accounts under common management with such Investor, and any transfer among
      any
      such Affiliates or one or more funds or managed accounts, provided that the
      transferee certifies to the Company that it is an “accredited investor” as
      defined in Rule 501 (a) under the Securities Act and that it is acquiring the
      Securities solely for investment purposes (subject to the qualifications
      hereof). Any such transferee shall agree in writing to be bound by the terms
      of
      this Agreement and shall have the rights of such Investor under this Agreement
      and the Registration Rights Agreement.




(b)  Each
      Investor agrees to the imprinting, so long as is required by this Section 3.1
      (b), of the following legend on the Securities:




NEITHER
      THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
      [EXERCISABLE] HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
      OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
      AVAILABLE EXCEPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
      SECURITIES LAWS.





The
      Conversion Shares shall not contain the legend set forth above nor any other
      legend if the conversion of the principal amount and interest due under the
      Notes or other issuances of Conversion Shares as contemplated hereby or by
      the
      Notes occurs at any time while an Conversion Shares Registration Statement
      is
      effective under the Securities Act or, in the event there is not an effective
      Conversion Shares Registration Statement, at such time, in the opinion of
      counsel to the Company, such legend is not required under applicable
      requirements of the Securities Act (including judicial interpretations and
      pronouncements issued by the staff of the Commission). The Company shall cause
      its counsel to issue the legal opinion included in the Transfer Agent
      Instructions to the Company’s transfer agent on the day that the Conversion
      Shares Registration Statement is declared effective by the Commission. The
      Company agrees that, in the event any Conversion Shares are issued with a legend
      in accordance with this Section 3.1 (b), it will, within three (3) Trading
      Days
      after request therefor by any Investor, provide such Investor with a certificate
      or certificates representing such Conversion Shares, free from such legend
      at
      such time as such legend would not have been required under this Section 3.1
      (b)
      had such issuance occurred on the date of such request. The Company may not
      make
      any notation on its records or give instructions to any transfer agent of the
      Company which enlarge the restrictions of transfer set forth in this
      Section.


-11-




3.2  Acknowledgment
      of Dilution .
      The
      Company acknowledges that the issuance of the Conversion Shares upon conversion
      of the principal amount and interest due under the Notes in accordance with
      the
      terms of the Notes will result in dilution of the outstanding shares of Common
      Stock, which dilution may be substantial under certain market conditions. The
      Company further acknowledges that its obligation to issue the Conversion Shares
      upon conversion of the principal amount and interest due under the Notes in
      accordance with the terms of the Notes is unconditional and absolute, subject
      to
      the limitations set forth herein, in the Notes, regardless of the effect of
      any
      such dilution.




3.3  Integration .
      The
      Company shall not, and shall use its best efforts to ensure that, no Affiliate
      of the Company shall, sell, offer for sale or solicit offers to buy or otherwise
      negotiate in respect of any security (as defined in Section 2 of the Securities
      Act) that would be integrated with the offer or sale of the Securities in a
      manner that would require the registration under the Securities Act of the
      sale
      of the Securities to the Investor.




3.4  Increase
      in Authorized Shares .
      If on
      any date the Company would be, if a notice of conversion under the Notes were
      to
      be delivered on such date, precluded from issuing (a) 200% of the number of
      Conversion Shares as would then be issuable upon a conversion in full of the
      outstanding principal amount and interest due under the Notes (the “Current
      Required Minimum”) due to the unavailability of a sufficient number of
      authorized but unissued or reserved shares of Common Stock, then the Board
      of
      Directors of the Company shall promptly (and in any case, within thirty (30)
      Business Days from such date) prepare and mail to the stockholders of the
      Company proxy materials requesting authorization to amend the Company’s articles
      of incorporation to increase the number of shares of Common Stock which the
      Company is authorized to issue to at least such number of shares as reasonably
      requested by the Investors in order to provide for such number of authorized
      and
      unissued shares of Common Stock to enable the Company to comply with
      its  issuance,
      conversion exercise and reservation of shares obligations as set forth in this
      Agreement and the Notes (the sum of (x) the number of shares of Common Stock
      then outstanding plus all shares of Common Stock issuable upon exercise of
      all
      outstanding options, warrants and convertible instruments, and (y) the Current
      Required Minimum, shall be a reasonable number). In connection therewith, the
      Board of Directors shall (a) adopt proper resolutions authorizing such increase,
      (b) recommend to and otherwise use its best efforts to promptly and duly obtain
      stockholder approval to carry out such resolutions (and hold a special meeting
      of the stockholders no later than the 60th day after delivery of the proxy
      materials relating to such meeting) and (c) within five (5) Business Days of
      obtaining such stockholder authorization, file an appropriate amendment to
      the
      Company’s articles of incorporation to evidence such increase.




-12-


3.5  Reservation
      and Listing of Underlying Shares .




(a)  The
      Company shall (i) in the time and mariner required by such other exchange,
      market, or quotation system on which the Common Stock is then traded, prepare
      and file with the such securities exchange or market or trading or quotation
      facility a listing application or other required notice covering a number of
      shares of Common Stock which is not less than the Initial Minimum,
      (ii) take all steps necessary to cause such shares of Common Stock to be
      approved for listing thereunder as soon as possible thereafter, and
      (iii) shall maintain the listing of its Common Stock thereon. If the number
      of Conversion Shares issuable upon conversion in full of the then outstanding
      principal amount and interest due under the Notes exceeds 85% of the number
      of
      Conversion Shares previously listed on account thereof with such exchanges,
      market, or trading or quotation facility, then the Company shall take the
      necessary actions to immediately list a number of Underlying Shares as equals
      no
      less than the then Current Required Minimum.




(b)  The
      Company shall maintain a reserve of shares of Common Stock for issuance upon
      conversion of the outstanding principal amount and interest due under the Notes
      in accordance with this Agreement and the Notes in such amount as may be
      required to fulfill its obligations in full under the Transaction Documents,
      which reserve shall equal no less than the then Current Required
      Minimum.




3.6  Conversion
      and Exercise Procedures .
      The
      Transfer Agent Instructions and Conversion Notice (as defined in the Notes)
      set
      forth the totality of the procedures with respect to the conversion of the
      of
      then outstanding principal amount and interest due under the Notes, including
      the form of legal opinion, if necessary, that shall be rendered to the Company’s
      transfer agent and such other information and instructions as may be reasonably
      necessary to enable the Investors to convert the outstanding principal amount
      and interest due under the Notes.




3.7  Notice
      of Breaches and Defaults . Each
      of
      the Company and the Investors shall give prompt written notice to the other
      of
      (i) any breach by it of any representation, warranty or other agreement
      contained in any Transaction Document, as well as any events or occurrences
      arising after the date hereof which would reasonably be likely to cause any
      representation or warranty or other agreement of such party, as the case may
      be,
      contained therein to be incorrect or breached as of the Closing Date, and
      (ii) the occurrence of a Triggering Event under the Notes. However,
      no disclosure by either party pursuant to this Section shall be deemed to cure
      any breach of any representation, warranty, or other agreement contained in
      any
      Transaction Document or any Triggering Event.




3.8  Conversion
      and Exercise Obligations of the Company .
      The
      Company shall honor conversions of the outstanding principal amount and interest
      accrued thereon under the Notes and shall deliver the Conversion Shares in
      accordance with the respective terms, conditions, and time periods set forth
      in
      the Notes.






-13-


3.9  Right
      of First Refusal; Subsequent Registrations .




(a)  Subject
      to the provisions of Section 4.9, while the Notes are outstanding the Company
      shall not, directly or indirectly, without the prior written consent of the
      Investors, offer, sell, grant any option to purchase, or otherwise dispose
      of
      (or announce any offer, sale, grant or any option to purchase or other
      disposition) any of its or its Affiliates’ equity or equity-equivalent
      securities including the issuance of any debt or other instrument at any time
      over the life thereof convertible into or exchangeable for Common Stock, or
      any
      other transaction intended to be exempt or not subject to registration under
      the
      Securities Act (a “Subsequent Placement”), except (i) the granting of options,
      warrants, or shares to employees, officers and directors, and the issuance
      of
      shares upon exercise of options granted, under any stock incentive plan
      heretofore or hereinafter duly adopted by the Company, (ii) shares of Common
      Stock issuable upon exercise of any currently outstanding warrants and upon
      conversion of any currently outstanding convertible securities of the Company,
      in each case disclosed in Schedule 2.1(c), (iii) shares of Common Stock issuable
      upon conversion of the outstanding principal amount and interest due under
      the
      Notes in accordance with the Notes, unless (A) the Company delivers to the
      Investors a written notice (the “Subsequent Placement Notice”) of its intention
      to effect such Subsequent Placement, which Subsequent Placement Notice shall
      describe in reasonable detail the proposed terms of such Subsequent Placement,
      the amount of proceeds intended to be raised thereunder, the Person with whom
      such Subsequent Placement shall be effected, and attached to which shall be
      a
      term sheet or similar document relating thereto and (B) the Investors shall
      not
      have notified the Company by 5:00 p.m. (New York City time) on the tenth (10th)
      Trading Day after its receipt of the Subsequent Placement Notice of its
      willingness to cause the Investors to provide (or to cause its sole designee
      to
      provide), subject to completion of mutually acceptable documentation, financing
      to the Company on the same terms set forth in the Subsequent Placement Notice.
      If the Investors shall fail to notify the Company of its intention to enter
      into
      such negotiations within such time period, the Company may effect the Subsequent
      Placement substantially upon the terms and to the Persons (or Affiliates of
      such
      Persons) set forth in the Subsequent Placement Notice; provided, that the
      Company shall provide the Investors with a second Subsequent Placement Notice,
      and the Investors shall again have the right of first refusal set forth above
      in
      this paragraph (a), if the Subsequent Placement subject to the initial
      Subsequent Placement Notice shall not have been consummated for any reason
      on
      the terms set forth in such Subsequent Placement Notice within thirty (30)
      Trading Days after the date of the initial Subsequent Placement Notice with
      the
      Person (or an Affiliate of such Person) identified in the Subsequent Placement
      Notice.




3.10  Certain
      Securities Laws Disclosures; Publicity .
      The
      Company shall (i) file with the Commission a Current Report on Form 8-K
      disclosing the transactions contemplated hereby and attaching as exhibits
      thereto the Transaction Documents within four (4) Business Days after the
      Closing Date (or, alternatively, provide disclosure of this transaction in
      an
      annual report on Form 10-KSB or a quarterly report on Form 10-QSB), and
      (ii) if required, timely file with the Commission a Form D promulgated
      under the Securities Act as required under Regulation D promulgated under the
      Securities Act. The Company and the Investors shall consult with each other
      in
      issuing any press releases or otherwise making public statements or filings
      and
      other communications with the Commission or any regulatory agency or stock
      market or trading facility with respect to the transactions contemplated hereby
      and neither party shall issue any such press release or otherwise make any
      such
      public statement, filings or other communications without the prior written
      consent of the other, which consent shall not be unreasonably withheld or
      delayed, except that no prior consent shall be required if such disclosure
      is
      required by law, in which such case the disclosing party shall provide the
      other
      party with prior notice of such public statement, filing or other communication.
      Notwithstanding the foregoing and except pursuant to the Conversion Shares
      Registration Statement, the Company shall not publicly disclose the name of
      the
      Investors, or include the name of the Investors in any filing with the
      Commission, or any regulatory agency, trading facility or stock market without
      the prior written consent of the Investors, except to the extent such disclosure
      (but not any disclosure as to the Controlling Persons thereof) is required
      by
      law, in which case the Company shall provide the Investors with prior notice
      of
      such disclosure.




-14-







3.11  Transfer
      of Assets or Intellectual Property Rights .
      Except
      in connection with a bona fide licensing arrangement in the ordinary course
      of
      the Company’s business, the Company shall not transfer, sell or otherwise
      dispose of any assets, including the Intellectual Property Rights, or allow
      any
      of the Intellectual Property Rights to become subject to any Liens, or fail
      to
      renew such Intellectual Property Rights (if renewable and it would otherwise
      lapse if not renewed), without the prior written consent of the
      Investors.




3.12  Use
      of
      Proceeds .
      The
      Company shall use the net proceeds from any Loans made hereunder to complete
      products to meet sales demands and for working capital and general corporate
      purposes only and not for the satisfaction of any Company debt (which, for
      such
      purposes, shall include accounts payable) without the prior written consent
      of
      the Investors.




3.13  Reimbursement .
      If any
      Investor, other than by reason of its gross negligence or willful misconduct,
      becomes involved in any capacity in any action, proceeding or investigation
      brought by or against any Person, including stockholders of the Company, in
      connection with or as a result of the consummation of the transactions
      contemplated by Transaction Documents, the Company will reimburse such Investor
      for its reasonable legal and other expenses (including the  cost
      of
      any investigation and preparation) incurred in connection therewith, as such
      expenses are incurred. In addition, other than with respect to any matter in
      which any Investor is a named party, the Company will pay such Investor the
      charges, as reasonably determined by such Investor, for the time of any officers
      or employees of such Investor devoted to appearing and preparing to appear
      as
      witnesses, assisting in preparation for hearings, trials or pretrial matters,
      or
      otherwise with respect to inquiries, hearings, trials, and other proceedings
      relating to the subject matter of this Agreement. The reimbursement obligations
      of the Company under this paragraph shall be in addition to any liability which
      the Company may otherwise have, shall extend upon the same terms and conditions
      to any Affiliates of any Investor who are actually named in such action,
      proceeding or investigation, and partners, directors, agents, employees and
      Controlling Persons (if any), as the case may be, of such Investor and any
      such
      Affiliate, and shall be binding upon and inure to the benefit of any successors,
      assigns, heirs and personal representatives of the Company, such Investor and
      any such Affiliate and any such Person. The Company also agrees that neither
      the
      Investors nor any such Affiliates, partners, directors, agents, employees or
      Controlling Persons shall have any liability to the Company or any Person
      asserting claims on behalf of or in right of the Company in connection with
      or
      as a result of the consummation of the Transaction Documents except to the
      extent that any losses, claims, damages, liabilities or expenses incurred by
      the
      Company result from the gross negligence or willful misconduct of the Investors
      or entity in connection with the transactions contemplated by this
      Agreement.




-15-







**ARTICLE
      IV**


**NEGATIVE
      COVENANTS**




The
      Company covenants and agrees that from and after the Closing Date and so long
      as
      any amount may be borrowed hereunder or remains unpaid (including interest
      thereon) on account of any Notes or Loans, or the Company shall have any other
      obligation remaining hereunder or pursuant hereto, the Company shall not, and
      shall not permit its Subsidiaries to, without the prior written consent of
      the
      Investors in each instance:





4.1  Indebtedness .
      Incur,
      create, assume, guarantee or suffer to exist, or become or remain liable,
      directly or indirectly, for or on account of any Indebtedness,
      except:




(a)  Indebtedness
      under the Transaction Documents;




(b)  Existing
      Indebtedness as set forth on Schedule 2.1(a) (including any extensions or
      renewals thereof, provided there is no increase in the principal amount thereof
      or other significant change in the terms thereof);




(c)  Subordinated
      Debt in an aggregate principal amount which does not exceed $100,000; provided,
      that it shall be a precondition of the Investors’ consent to such debt that the
      Company and the lender thereunder agree to make the repayment of such debt
      subject to subordination provisions including, without limitation, stand-still
      provisions, acceptable to the Investors in their sole discretion;
      and




(d)  Indebtedness
      evidence by Capital Lease Obligations, so long as the aggregate principal amount
      of all such Indebtedness outstanding under this paragraph (c) does not exceed
      $50,000.




4.2  Liens .
      Create,
      incur, assume or suffer to exist any Lien on any property or assets (including,
      without limitation, the Collateral and including stock or other securities
      of
      any Person, including any Subsidiary), tangible or intangible, now owned or
      hereafter acquired, or agree or become liable to do so, except:




(a)  Liens
      on
      property or assets of the Company and its Subsidiaries existing on the date
      hereof and set forth in Schedule 4.2(a); provided that such Liens shall secure
      only those obligations which they secure on the date hereof;




(b)  any
      Lien
      created under the Transaction Documents;




(c)  Liens
      for
      taxes not yet due or which are being contested in good faith for which adequate
      reserves have been established;




(d)  carriers’,
      warehousemen’s, mechanic’s, materialmen’s, repairmen’s or other like Liens
      arising in the ordinary course of business and securing obligations that are
      not
      due and payable or which are being contested in good faith for which adequate
      reserves have been established;




(e)  pledges
      and deposits made in the ordinary course of business in compliance with
      workmen’s compensation, unemployment insurance and other social security laws or
      regulations;




-16-


(f)  deposits
      to secure the performance of bids, trade contracts (other than for
      Indebtedness), leases (other than Capital Lease Obligations), statutory
      obligations, surety and appeal bonds, performance bonds and other obligations
      of
      a like nature incurred in the ordinary course of business; and




(g)  zoning
      restrictions, easements, rights-of-way, restrictions on use of real property
      and
      other similar encumbrances incurred in the ordinary course of business which,
      in
      the aggregate, are not substantial in amount and do not materially detract
      from
      the value of the- property subject thereto or interfere with the ordinary
      conduct of the business of the Company or any of its Subsidiaries.




4.3  Guaranties .
      Directly or indirectly, become or be liable in respect of any Guaranty, or
      assume, guarantee, become surety for, endorse or otherwise agree, become or
      remain directly or contingently liable upon or with respect to any obligation
      or
      liability of any other Person, except for Guaranties of Indebtedness of the
      Company permitted hereunder.




4.4  Loans
      and Investments .
      Make or
      suffer to remain outstanding any loan or advance to, or purchase, acquire or
      own
      any stock, bonds, notes or securities of, or any partnership interest (whether
      general or limited) or limited liability company interest in, or any other
      investment or interest in, or make any capital contribution to, any other
      Person, or agree, become or remain liable to do any of the foregoing,
      except:




(i)  trade
      credit extended on usual and customary terms in the ordinary course of business;
      and




(ii)  Permitted
      Investments.




4.5  Liquidations,
      Mergers Consolidations, Acquisitions .
      Dissolve, liquidate or wind- up its affairs, or become a party to any merger
      or
      consolidation, or acquire by purchase, lease or otherwise all or substantially
      all of the assets or capital stock of any other Person, provided,
      that:




(i)  any
      Subsidiary may consolidate or merge into another Subsidiary or the Company,
      and




(ii)  the
      Company or any of its Subsidiaries may acquire, whether by purchase or by
      merger, (A) all of the ownership interests of another Person or (B)
      substantially all of assets of another Person or of a business or division
      of
      another Person, provided that the Investors have given prior written
      consent.






-17-


4.6  Dispositions
      of Assets or Subsidiaries .
      Sell,
      convey, assign, lease, abandon or otherwise transfer or dispose of, voluntarily
      or involuntarily, any of its properties or assets, tangible or intangible
      (including sale, assignment, discount or other disposition of accounts, contract
      rights, chattel paper, equipment or general intangibles with or without recourse
      or of capital stock, shares of beneficial interest, partnership interests or
      limited liability company interests of a Subsidiary of the Company),
      except:




(i)  transactions
      involving the sale of inventory in the ordinary course of business and for
      usual
      and ordinary prices;




(ii)  any
      sale,
      transfer or lease of assets by any wholly owned Subsidiary to the Company or
      another Subsidiary;




(iii)  any
      sale,
      transfer or lease of assets in the ordinary course of business which are
      replaced by substitute assets acquired or leased, provided such substitute
      assets are subject to the Investors’ Prior Security Interest; or




(iv)  any
      sale,
      transfer or lease of assets, other than those specifically excepted pursuant
      to
      clauses (i) through (iv) above, the fair market value of which does not exceed
      $50,000 in the aggregate during the term o f this Agreement.




4.7  Subsidiaries;
      Partnerships and Joint Ventures .
      Own or
      create, directly or indirectly, any Subsidiaries other than (i) any
      Subsidiary which has joined this Agreement as Guarantor on the Closing Date;
      and
      (ii) any Subsidiary formed after the Closing Date which joins this
      Agreement as a Guarantor, provided that the Investors shall have consented
      to
      such formation and joinder and that such Subsidiary and the Company and its
      Subsidiaries, as applicable, shall grant and cause to be perfected first
      priority Liens to the Investors in the assets held by, and stock of or other
      ownership interests in, such Subsidiary. Each of the Company and its
      Subsidiaries shall not become or agree to become (1) a general or limited
      partner in any general or limited partnership, except that the Company and
      its
      Subsidiaries may be general or limited partners in other Loan parties,
      (2) a member or manager of, or hold a limited liability  company
      interest in, a limited liability company, except that the Company and its
      Subsidiaries may be members or managers of, or hold limited liability company
      interests in, other Loan parties, or (3) a joint venturer or hold a joint
      venture interest in any joint venture.




4.8  Issuance
      of Stock .
      Issue
      any additional shares of its capital stock or any options, warrants or other
      rights in respect thereof.




4.9  Changes
      in Organizational Documents .
      Amend
      in any respect its articles of incorporation (including any provisions or
      resolutions relating to capital stock), by-laws, certificate of limited
      partnership, partnership agreement, certificate of formation, limited liability
      company agreement or other organizational documents without providing at least
      thirty (30) calendar days’ prior written notice to the Investors and, in the
      event such change would be adverse to the Investors as determined by the
      Investors in their sole discretion, obtaining the prior written consent of
      the
      Investors.




4.10  Leases .
      Create,
      incur, assume or suffer to exist, or permit any of its Subsidiaries to create,
      incur, assume or suffer to exist, any obligation as lessee for the rental or
      hire of any real or personal property, except: (i) leases (inclusive of
      capital leases and operating leases) existing on the date of this Agreement
      and
      any extensions or renewals thereof; (ii) leases (other than capital leases)
      which do not in the aggregate require the Company and its Subsidiaries, on
      a
      consolidated basis, to make payments (including taxes, insurance, maintenance
      and similar expenses required under the terms of any lease) in any fiscal year
      of the Company in excess of $50,000, and (iii) capital leases permitted by
      Section 4.1.




4.11  Affiliates .
      Enter
      into or permit any Subsidiary to enter into any transaction (including without
      limitation, the purchase, sale or exchange of securities or other property
      or
      the rendering of any service) with any Affiliate, except in the ordinary course
      of and pursuant to the reasonable requirements of its business upon fair and
      reasonable terms no less favorable to it as it would obtain in an arm’s length
      transaction with a Person not an Affiliate.




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4.12  Use,
      Operation, etc. of Collateral .
      Use,
      service, repair, operate or locate (or cause to be used, serviced, repaired
      or
      operated) any of the Collateral in violation of any law, rule, regulation,
      order, or ordinance of any Person having jurisdiction of the
      Collateral.




4.13  Use
      of
      Proceeds .
      Use the
      proceeds of the Loans for any purpose other than as set forth in Section
      2.l(v).




4.14  Nature
      of Business .
      Make
      any material change in the nature or scope of the Company’s or any of its
      Subsidiaries’ businesses, including, without limitation, material changes in
      accounting policies and practices and changes in the fiscal year of any of
      such
      parties.




**ARTICLE
      V**


**DEFINITIONS**




“Affiliate”
      shall mean, when used with respect to a specified Person, another Person that
      directly, or indirectly through one or more intermediaries, Controls or is
      Controlled by or is under common Control with the Person specified.





“Business
      Day” shall mean any day (other than a day which is a Saturday, Sunday or legal
      holiday in the State of New York) on which banks are open for business in New
      York City.





“Capital
      Lease Obligations” of any Person shall mean the obligations of such Person to
      pay rent or other amounts under any lease of (or other arrangement conveying
      the
      right to use) real or personal property, or a combination thereof, which
      obligations are required to be classified and accounted for as capital leases
      on
      a balance sheet of such Person under GAAP and, for the purposes of this
      Agreement, the amount of such obligations at any time shall be the capitalized
      amount thereof at such time determined in accordance with GAAP.





“Closing
      Date” shall mean the date of this Agreement.





“Common
      Stock” shall mean the shares of common stock, $0.001 par value, of the Company,
      or such securities that such stock shall hereafter be reclassified
      into.





“Control”
      shall mean the possession, directly or indirectly, of the power to direct or
      cause the direction of the management or policies of a Person, whether through
      the ownership of voting securities, by contract or otherwise, and “Controlling”
and “Controlled” shall have meanings correlative thereto.





“Default”
      shall mean any event or condition which upon notice, lapse of time or both
      would
      constitute an Event of Default.





“Exchange
      Act” shall mean the Securities Exchange Act of 1934, as
      amended.


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“Guarantee”
      of or by any Person shall mean any obligation, contingent or otherwise, of
      such
      Person guaranteeing or having the economic effect of guaranteeing any
      Indebtedness of any other Person (the “primary obligor”) in any manner, whether
      directly or indirectly, and including any obligation of such Person, direct
      or
      indirect, (a) to purchase or pay (or advance or supply funds for the purchase
      or
      payment of) such Indebtedness or to purchase (or to advance or supply funds
      for
      the purchase of) any security for the payment of such Indebtedness, (b) to
      purchase property, securities or services for the purpose of assuring the owner
      of such Indebtedness of the payment of such Indebtedness or (c) to maintain
      working capital, equity capital or other financial statement condition or
      liquidity of the primary obligor so as to enable the primary obligor to pay
      such
      Indebtedness; provided, however, that the term Guarantee shall not include
      endorsements for collection or deposit, in either case in the ordinary course
      of
      business.





“Indebtedness”
      of any Person shall mean, without duplication, (a) all obligations of such
      Person for borrowed money or with respect to deposits or advances of any kind,
      (b) all obligations of such Person evidenced by bonds, debentures, notes or
      similar instruments, (c) all obligations of such Person upon which interest
      charges are customarily paid, (d) all obligations of such Person under
      conditional sale or other title retention agreements relating to property or
      assets purchased by such Person, (e) all obligations of such Person issued
      or
      assumed as the deferred purchase price of property or services, (f) all
      Indebtedness of others secured by (or for which the holder of such Indebtedness
      has an existing right, contingent or otherwise, to be secured by) any Lien
      on
      property owned or acquired by such Person, whether or not the obligations
      secured thereby have been assumed, (g) all Guarantees by such Person of
      Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
      all obligations of such Person in respect of interest rate protection
      agreements, foreign currency exchange agreements or other interest or exchange
      rate hedging arrangements and (j) all obligations of such Person as an account
      party in respect of letters of credit and bankers’ acceptances. The Indebtedness
      of any Person shall include the Indebtedness of any partnership in which such
      Person is a general partner.





“IP
      Security Agreement” shall mean the Intellectual Property Security Agreement, in
      the form of Exhibit C, between the Company and the Investors for the benefit
      of
      the Investors.





“Note”
      shall mean the Secured Convertible Promissory Note, in the form of Exhibit
      A,
      made by the Company in favor of the Investors evidencing the Loans made
      hereunder.





“Permitted
      Investments” shall mean:





(a)  direct
      obligations of, or obligations the principal of and interest on which are
      unconditionally guaranteed by, the United States of America (or by any agency
      thereof to the extent such obligations are backed by the full faith and credit
      of the United States of America), in each case maturing within three (3) months
      from the date of acquisition thereof;




(b)  investments
      in commercial paper maturing within 90 days from the date of acquisition thereof
      and having, at such date of acquisition, the highest credit rating obtainable
      from Standard & Poor’s Corporation or from Moody’s Investors Service, Inc.;
      and




(c)  investments
      in certificates of deposit, banker’s acceptances and time deposits maturing
      within three (3) months from the date of acquisition thereof issued or
      guaranteed by or placed with, and money market deposit accounts issued or
      offered by, any domestic office of any commercial bank organized under the
      laws
      of the United States of America or any State thereof which has a combined
      capital and surplus and undivided profits of not less than
      $250,000,000.




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“Person”
      shall mean any natural person, corporation, business trust, joint venture,
      association, company, partnership or other business entity or government, or
      any
      agency or political subdivision thereof.





“Registration
      Rights Agreement” shall mean the Registration Rights Agreement, in the form of
      Exhibit F, between the Company and the Investors.





“Securities
      Act” shall mean the Securities Act of 1933, as amended.





“Security
      Agreement” shall mean the Security Agreement, in the form of Exhibit B, between
      the Company, the Subsidiaries, and the Investors for the benefit of the
      Investors.





“Stock
      Pledge Agreement” shall mean the Pledge Agreement, in the form of Exhibit D,
      between the Company and the Investors.





“subsidiary”
      shall mean, with respect to any Person (herein referred to as the “parent”), any
      corporation, partnership, association or other business entity (a) of which
      securities or other ownership interests representing more than 50% of the equity
      or more than 50% of the ordinary voting power or more than 50% of the general
      partnership interests are, at the time any determination is being made, owned,
      Controlled or held, or (b) which is, at the time any determination is made,
      otherwise Controlled by the parent or one or more subsidiaries of the parent
      or
      by the parent and one or more subsidiaries of the parent.





“Subsidiary”
      shall mean any subsidiary of the Company.





“Subsidiary
      Guaranty” shall mean a Subsidiary Guaranty, in the form of Exhibit E, made by
      the Subsidiary Guarantors in favor and for the benefit of the
      Investors.





“Subsidiary
      Guarantor” shall mean each Subsidiary listed on Schedule 2.1(a), and each other
      Subsidiary that is or becomes a party to the Subsidiary Guaranty in accordance
      therewith.





“Trading
      Day” shall have the meaning ascribed to it in Section 16 of the
      Note.





“Transaction
      Documents” shall mean this Agreement, the Notes, the Registration Rights
      Agreement, the Security Agreement, the IP Security Agreement, the Pledge
      Agreement, the Subsidiary Guaranty, and the Transfer Agent
      Instructions.





“Transfer
      Agent Instructions” shall mean the irrevocable transfer agent instructions, in
      the form of Exhibit G, delivered to and acknowledged by the Company’s transfer
      agent.


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**ARTICLE
      VI**


**MISCELLANEOUS**




6.1  Fees
      and Expenses .
      At the
      Closing, the Company shall reimburse the Investors for all of their legal fees
      and expenses incurred in connection with the preparation and negotiation of
      the
      Transaction Documents. The Company shall pay all stamp and other taxes and
      duties levied in connection with the issuance of the Securities.




6.2  Entire
      Agreement .
      The
      Transaction Documents, together with the Exhibits and Schedules thereto, and
      the
      Transfer Agent Instructions and other ancillary documents set forth in this
      Agreement contain the entire understanding of the parties with respect to the
      subject matter hereof and supersede all prior agreements and understandings,
      oral or written, with respect to such matters, which the parties acknowledge
      have been merged into such documents, exhibits and schedules.




6.3  Notices .
      Any and
      all notices or other communications or deliveries required or permitted to
      be
      provided hereunder shall be in writing and shall be deemed given and effective
      on the earliest of (i) the date of transmission, if such notice or communication
      is delivered via facsimile at the facsimile telephone number specified in this
      Section prior to 6:30 p.m. (New York City time) on a Business Day, (ii) the
      Business Day after the date of transmission, if such notice or communication
      is
      delivered via facsimile at the facsimile telephone number specified in this
      Agreement later than 6:30 p.m. (New York City time) on any date and earlier
      than
      11:59 p.m. (New York City time) on such date, (iii) the Business Day following
      the date of mailing, if sent by nationally recognized overnight courier service,
      or (iv) upon actual receipt by the party to whom such notice is required to
      be
      given. The address for such notices and communications shall be as
      follows:




If
                  to the Company:
              Bio
                  Solutions Manufacturing, Inc.4440
                  Arville Street # 6Las
                  Vegas, NV 89103Facsimile
                  No.: (702) 222-9126Attn:
                  Secretary


If
      to the
      Investors:  At
      the
      address set forth opposite their name on the signature page




or
      such
      other address as may be designated in writing hereafter, in the same manner,
      by
      such Person.




6.4  Amendments;
      Waivers .
      No
      provision of this Agreement may be waived or amended except in a written
      instrument signed, in the case of an amendment, by the Company and the
      Investors, in the case of a waiver, by the party against whom enforcement of
      any
      such waiver is sought. No waiver of any default with respect to any provision,
      condition or requirement of this Agreement shall be deemed to be a continuing
      waiver in the future or a waiver of any other provision, condition or
      requirement hereof, nor shall any delay or omission of either party to exercise
      any right hereunder in any manner impair the exercise of any such fight accruing
      to it thereafter.




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6.5  Headings .
      The
      headings herein are for convenience only, do not constitute a part of this
      Agreement and shall not be deemed to limit or affect any of the provisions
      hereof.




6.6  Successors
      and Assigns .
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their successors and permitted assigns. The Company may not assign this
      Agreement or any rights or obligations hereunder without the prior written
      consent of the Investors. This provision shall not limit the Investors’ right to
      transfer securities or transfer or assign rights under the Registration Rights
      Agreement.




6.7  No
      Third-Party Beneficiaries .
      This
      Agreement is intended for the benefit of the parties hereto and their respective
      successors and permitted assigns and is not for the benefit of, nor may any
      provision hereof be enforced by, any other Person.




6.8  Governing
      Law .
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be governed by and construed and enforced in accordance
      with the internal laws of the State of New York, without regard to the
      principles of conflicts of law thereof. Each party hereby irrevocably submits
      to
      the exclusive jurisdiction of the state and federal courts sitting in the County
      of New York, for the adjudication of any dispute hereunder or in connection
      herewith or with any transaction contemplated hereby or discussed herein
      (including with respect to the enforcement of the any of the Transaction
      Documents), and hereby irrevocably waives, and agrees not to assert in any suit,
      action or proceeding, any claim that it is not personally subject to the
      jurisdiction of any such court, that such suit, action or proceeding is
      improper. Each party hereby irrevocably waives personal service of process
      and
      consents to process being served in any such suit, action or proceeding by
      mailing a copy thereof via registered or certified mail or overnight delivery
      (with evidence of delivery) to such party at the address in effect for notices
      to it under this Agreement and agrees that such service shall constitute good
      and sufficient service of process and notice  thereof.
      Nothing contained herein shall be deemed to limit in any way any right to serve
      process in any manner permitted by law.




6.9  Survival .
      The
      representations, warranties, agreements and covenants contained herein shall
      survive the Closing and the delivery and conversion of the principal amount
      and
      interest due under the Notes.




6.10  Execution .
      This
      Agreement may be executed in two or more counterparts, all of which when taken
      together shall be considered one and the same agreement and shall become
      effective when counterparts have been signed by each party and delivered to
      the
      other party, it being understood that both parties need not sign the same
      counterpart. In the event that any signature is delivered by facsimile
      transmission, such signature shall create a valid and binding obligation of
      the
      party executing (or on whose behalf such signature is executed) the same with
      the same force and effect as if such facsimile signature page were an original
      thereof.




6.11  Severability .
      In case
      any one or more of the provisions of this Agreement shall be invalid or
      unenforceable in any respect, the validity and enforceability of the remaining
      terms and provisions of this Agreement shall not in any way be affected or
      impaired thereby and the parties will attempt to agree upon a valid and
      enforceable provision which shall be a reasonable substitute therefor, and
      upon
      so agreeing, shall incorporate such substitute provision in this
      Agreement.




-23-






6.12  Remedies .
      In
      addition to being entitled to exercise all rights provided herein or granted
      by
      law, including recovery of damages, the Investors will be entitled to specific
      performance of the obligations of the Company under the Transaction Documents.
      The Company and the Investors agree that monetary damages may not be adequate
      compensation for any loss incurred by reason of any breach of its obligations
      described in the foregoing sentence and hereby agrees to waive in any action
      for
      specific performance of any such obligation the defense that a remedy at law
      would be adequate.




IN
      WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be duly
      executed by their respective authorized signatories as of the date first
      indicated above.




.




BIO SOLUTIONS MANUFACTURING,
              INCBy:/s/
              David S. BennettName: David S. BennettTitle:
              President











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