---

> THIS AGREEMENT made effective the 31st
>             day of December, 2004.

BETWEEN:

> Chiropractic USA, Inc., a company incorporated
>             under the laws of the State of Colorado
>           (hereinafter referred to as the "Vendor")

OF THE FIRST PART

AND:

> LSI GROUP, LLC., a company organized under
>             the laws of the State of Louisiana
>           (hereinafter referred to as “LSI” or
>             the "Purchaser")

OF THE SECOND PART

AGREEMENTRE: SALE AND PURCHASE OF ASSETS

WHEREAS:

A.                       The
  Vendor owns and operates three Chiropractic clinics identified in Schedule "A"
  attached hereto (the "Clinics") located in and around Lake Charles, Louisiana;
  and

B.                       The
  Purchaser is desirous of purchasing the Clinics, the Accounts Receivable of
  the Clinics and those assets as located in the premises of the Clinics on the
  terms and conditions hereinafter set forth; and

WITNESS
  THEREFORE that the parties hereto for good and valuable consideration, the sufficiency
  of which is hereby acknowledged by each of the parties hereto, covenant and
  agree each with the others as follows:

ARTICLE I - DEFINITIONS

1.01                      
  In this agreement, unless there is something in the subject matter or context
  inconsistent therewith:

| | (a) | "Closing Date"shall mean December 31st, 2004
| | --- | --------------------------------------------

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| | (b) | "Effective Date"shall mean December
        31st, 2004;                                                                                                                                                                                  
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (c) | "Permitted Encumbrances"shall
        mean the encumbrances permitted to remain on the Assets for thirty (30)
        days subsequent to the Closing Date and are identified on Schedule "B"
        hereto;                             
|
| | (d) | "Premises"shall mean those Chiropractic
        Clinics located and identified as indicated on Schedule "A" attached hereto;                                                                                                             
|
| | (d) | "Purchase Price"shall mean the
        sum of One Million (USD $1,000,000) Dollars;                                                                                                                                                      
|
| | (e) | "Retained Assets"shall mean as
        at the Effective Date:                                                                                                                                                                            
|
| |     | (i)                                                                                                                                                                                                                                      
|
| | (f) | "Transition Period"shall mean
        the month of January, 2005 wherein the Vendor shall manage the Clinics
        pursuant to a management arrangement with the Purchaser, as more clearly
        set out in Article 6.01 below.     
|
| | (g) | "Working Assets"shall mean the
        Clinics as a going concern and all property and assets of the Vendor as
        at the Effective Date including the accounts receivable of the Clinics
        excepting only the Retained Assets.

ARTICLE II - SALE OF ASSETS

2.01Agreement to Sell and Purchase

The
  Vendor agrees to sell to the Purchaser and the Purchaser agrees to purchase
  as of the Effective Date, all of the accounts receivable of the Clinics (the
  “Accounts Receivable”) together with all of the Working Assets,
  which for greater clarity but without in any way restricting the foregoing definition
  of Working Assets, shall include:

| | (a) | Equipment and Leasehold Improvements                                                                                                                                                                                                                                                        
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     | All of the Vendor's leasehold improvements, clinic
        and office equipment, furniture, appliances, implements, tools and furnishings
        currently in use and not attached to the buildings, including each and
        every item set forth and enumerated in Schedule "B" hereto;

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3

| | (b) | Third Party Ownership of Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | Where such equipment
        is not owned directly by the Vendor, the Purchaser undertakes to assume
        any and all leases or hire purchase agreements or conditional sales contracts
        the Vendor is obligated to as related to the Clinics and the operations
        thereof within thirty (30) days of the Closing Date;                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (c) | Stock-in-Trade                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | All of the Vendor's
        stock-in-trade of goods, wares and merchandise on hand for resale including
        each and every item set forth and enumerated in Schedule "C" hereto, as
        well as all other ancillary materials located at the Premises;                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (d) | Goodwill                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | The Clinics is a going concern and the goodwill thereof (the "Goodwill")
      which shall include:                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (e) | Prepaid
        Expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | It is intended
        by the parties hereto that the Purchase Price, as paid to the Vendor pursuant
        to the provisions of Article 4.01 below, shall constitute full and complete
        payment of all prepaid rents and other prepaid expenses for each of the
        Premises of the Clinics and all product inventories and other ancillary
        items located on the premises of the Clinics as at the Closing Date. Yellow
        page advertising contracts not paid for are assumed by the Purchaser.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (f) | Patient
        Records and Files                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | All records and
        files of all patients of the Clinics who have undergone care or visited
        any of the clinics which form any part of the Clinics. During the due
        diligence as carried out by the Purchaser, the Purchaser hereby covenants
        to keep all such patient records and files that come into its possession
        strictly confidential. In the event the                                                                                                                          

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4

| |  | transaction does not close as contemplated herein,
        all such patient records and files, and/or copies thereof in the possession
        of the Purchaser shall be returned to the Vendor.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2.02Accounts Receivable

It
  is intended by the parties hereto that in addition to the Working Assets being
  acquired hereunder by the Purchaser, the Purchaser shall also acquire all of
  the Accounts Receivable of the Clinics. It is agreed that accounts receivable
  of the Clinics shall be included in the Purchase Price and this amount shall
  be allocated as a portion of the Purchase Price as determined by the Vendor
  in its sole discretion. The Purchaser acknowledges that during the Transition
  Period, any amounts collected from the accounts receivable or by the sale of
  any of the inventory by the Vendor as manager of the Clinics shall be fully
  earned by the Vendor as management fees. The Purchaser acknowledges that certain
  overpayments and penalties may have been paid by the Vendor to the IRS related
  to payroll taxes and other assessments regarding the Business. The Vendor is
  currently investigating a refund relating to these penalties and overpayments.
  The Purchaser agrees that any amount recovered by the Vendor for such overpayment
  or penalties will be for the account of the Vendor and shall not form a part
  of the Accounts Receivable being purchased hereunder.

2.03Inventory of Stock-in-Trade

As
  of the Effective Date, in consideration for the Purchase Price, subject to the
  provisions contained in Article 2.02 above, all inventory located at each of
  the Premises shall be transferred and vest with the Purchaser.

2.04Permitted Encumbrances

The
  Working Assets at the Effective Date and on the Closing Date shall be free and
  clear of all mortgages, encumbrances, charges and other third party rights or
  interests, excepting those Permitted Encumbrances as specifically identified
  in Schedule "B" attached hereto.

2.05Liabilities

The
  Purchaser agrees that by this agreement, he, or his assignee, shall be deemed
  to have accepted or assumed all obligations and responsibility for the payment
  of any debt, obligation, liability, claim or demand of whatsoever nature of
  or against the Clinics, their business and the operation thereof, including
  all disclosed rental arrears, tax liabilities and other creditors of the Clinics
  and the directed business thereof to a maximum amount $175,493.13 as set
  out in Schedule D attached hereto (hereinafter referred to as the “Assumed
  Liabilities”). The Vendor agrees that it shall indemnify the Purchaser
  for any amount greater than the total amount of the Assumed

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5

Liabilities. The Vendor agrees that the total amount of the
  Assumed Liabilities, while forming a portion of the Purchase Price hereunder,
  shall be deducted from the total amount due and owing to the Vendor pursuant
  to the payment provisions as hereinafter contained.

ARTICLE III - CONDITIONS

3.01To be Performed by the Vendor

The
  obligations of the Purchaser to close the transaction contemplated by this agreement
  shall be subject to the following conditions:

| | (a) | No Discharge of Prior Encumbrances                                                                                                                                                                                                                                                                                                                                                                                                      
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     | The Purchaser hereby acknowledges that the Vendor
        shall not obtain discharges of all mortgages, liens, charges and encumbrances
        related to the prior operations of the Clinics, and such obligations and
        debts will be assumed by the Purchaser, or his designee, pursuant to this
        agreement with the total amount of these obligations to be credited against
        the amount of the Purchase Price;
|
| | (b) | No Discharge of Permitted Encumbrances                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |     | The Vendor shall not be discharging any of the Permitted
        Encumbrances; and                                                                                                                                                                                                                                                                                                                                                      
|
| | (c) | Warranties True and Correct on Closing Date                                                                                                                                                                                                                                                                                                                                                                                             
|
| |     | The representations and warranties of the Vendor
        contained in Section 5.01 shall be deemed to have been made again on the
        Closing Date by both the Vendor and LSI and shall then be true and correct;                                                                                                                                                                                                                   

ARTICLE IV – PAYMENT/CONDITIONS PRECEDENT

4.01Payment

The
  Purchaser shall pay the amount of the Purchase Price to or for the account of
  the Vendor in the following manner:

| | (a) | One Million ($1,000,000) Dollars, less the amount
        of the Assumed Liabilities shall be paid to the Vendor upon the execution
        hereof by delivery of a Promissory Note, the “Promissory Note”
        in the form attached hereto as “Schedule “E”;                                                      
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | The Promissory Note shall be secured by a General
        Security Agreement (the “GSA”) against all current and future
        acquired assets of the Purchaser, including the assets and accounts receivable
        being acquired hereunder by the Purchaser, in the form attached hereto
        as Schedule “F”.

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6

4.02Conditions Precedent

The
  transaction as contemplated herein is subject to the following condition precedent
  occurring or being satisfied by the Purchaser on or before the Closing Date:

|1. | The Purchaser agrees that it is a material condition
        of this agreement that the Clinics shall become franchisees of the Vendor’s
        franchised operations. As such, the Purchaser agrees to enter into, and
        shall duly execute and be bound by the Vendor’s Standard Franchise
        Agreement for each of the Clinics. The Vendor agrees that the royalty
        provisions of the Standard Franchise Agreement shall not commence until
        January 1, 2006. The Purchaser acknowledges that at that time it shall
        commence royalty payments for the duration of the term of the Standard
        Franchise Agreements.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. | The Purchaser also covenants that it is a material
        term of this Purchase and Sale Agreement, upon which the Vendor is relying,
        that any additional clinics to be opened by the Purchaser or its associated
        companies, shall be franchised clinics of the Vendor and shall enter the
        then current Standard Franchise Agreement of the Vendor.                                                                                                                                                                                                                                                                                 

The Vendor hereby acknowledges that the foregoing conditions
  are inserted for the benefit of the Vendor, and the waiver of any or all of
  the conditions precedent is at the sole discretion of the Vendor. The Vendor
  further acknowledges that if any of the foregoing Conditions Precedent are not
  satisfied by the Purchaser, or his assignee, or any amended time frame mutually
  agreed upon by the parties hereto, the Vendor can then repudiate this Agreement
  with no cost or penalty.

ARTICLE V - REPRESENTATIONS AND WARRANTIES

5.01By Vendor

| |     | The Vendor undertakes, represents and warrants to
        the Purchaser that:                                                                                                                                                                                                                                                                                                                                                 
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (a) | Title                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |     | On the Closing Date the Vendor will have good and
        marketable title to all of the Working Assets, free and clear of all liens,
        mortgages, charges and encumbrances of whatsoever nature, except for the
        Permitted Encumbrances, and will be entitled at law and in equity to sell,
        assign and transfer clear title to the Working Assets, pursuant to the
        provisions of this agreement;
|
| | (b) | Title Held by Third Party                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |     | The Vendor has advised the Purchaser as to various
        debts and creditors of the Clinics, as well as to various leases for equipment
        located in the Clinics that are to be assumed by the Purchaser. The Purchaser
        agrees that, as a material condition of this agreement, all such debts
        and obligations of the Clinics shall be assumed by the Purchaser.                                      

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7

|(c) | Proceedings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | As the Purchaser has been overseeing operations
        of the Clinics for the Vendor for an extended period, the Purchaser is
        aware of the proceedings that may be pending or threatened against the
        Clinics. In particular, there is a pending action by O’Carrol Advertising
        against the Clinics for the recovery of approximately $11,500, of
        which the Purchaser has assumed pursuant to the Schedule of Assumed Liabilities.                                                                                                                                                                                                                                  
|   
|(d) | Vendor Liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|    | A material condition of this
        agreement is that the Purchaser shall assume all of the Vendor’s
        obligations, liabilities and accounts payable of the Clinics and hereafter
        the Purchaser shall be responsible for all debts, claims and other liabilities
        or obligations incurred or arising from the operation of the Clinics prior
        to the Closing Date, including the profit sharing amounts owing to the
        Chiropractors of the Clinics. The total amount of the Assumed Liabilities
        shall hereafter be for the account of the Purchaser, subject to the Vendor’s
        indemnification of any amount greater than the Assumed Liabilities.
|   
|(e) | Other Representations and Warranties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|    | The Vendor further represents and warrants
        to the Purchaser, and acknowledges that the Purchaser is relying upon
        these representations and warranties to conclude the Purchase of the Business
        as contemplated herein, that:                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|    | 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|    | 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|    | 3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|    | 4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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8

|     | 5.                                                                            | There are no actions, suits or disciplinary or other
        proceedings pending or threatened against the Clinics the Premises or
        any of the Chiropractors employed by the Clinics or under contract to
        any of the Clinics.                                                                                                                                                                                               
|---- | ----------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|5.02 | By Purchaser                                                                 
|    
|     | The Purchaser undertakes, represents and
        warrants to the Vendor that:
|    
|     | (a)                                                                           | The Purchaser acknowledges that its principal member,
        Dr. Steven Mertz, has been overseeing the operations of the business on
        behalf of the Vendor and as such is fully aware of the state of condition,
        both financial and operationally, of the Clinics. As such, he has in depth
        knowledge of all facets of the operations of the Clinics and is purchasing
        the Clinics on an “as is’ condition.
|    
|     | (b)                                                                           | The Purchaser also acknowledges that it is aware
        that some or all of the Chiropractors who practice at the Clinics are
        currently not under contract. In the event they are under contract, the
        Vendor agrees to assign such contracts to the Purchaser on the Closing
        Date.                                                                                                                                
|    
|     | (c)                                                                           | Payment of Liabilities Incurred before and
        after Effective Date                                                                                                                                                                                                                                                                                                                                                                    
|    
|     |                                                                               | Following Transition Period the Purchaser shall
        be responsible for all debts, claims and other liabilities or obligations
        incurred in or arising from the operation of the Clinics as well as the
        Assumed Liabilities.                                                                                                                                                                                             
|    
|     | (d)                                                                           | Profit sharing contributions and bonuses for Chiropractors
        practicing at the Clinics that arise from collection of accounts receivable
        generated prior to the expiry of the Transition Period, but collected
        after the Transition Period, shall be the responsibility of Purchaser
        and are not considered a part of the Assumed Liabilities.                                                               

5.03Representations, etc. to Survive Closing

The
  undertakings, representations and warranties set forth in Sections 5.01 and
  5.02 shall survive the closing and shall continue in full force and effect for
  the benefit of the party to which such representations and warranties were delivered.

ARTICLE VI – CLOSING/TRANSITION PERIOD

6.01Transition Period

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The
  transactions contemplated herein shall be closed on the Closing Date. However,
  the parties hereto have agreed, for convenience sake, that the Vendor manages
  the Clinics until the end of the Transition Period, with all revenues and expenses
  during the Transition Period to the account of the Vendor to be allocated as
  a management fee and/or expense, as the case may be.

6.02Vendor's Obligations

At
  the closing the Vendor shall deliver or cause to be delivered to the Purchaser
  the following:

| | (a) | Bill of Sale                                                                                                                                                                                                                                                           
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     | A bill of sale covering all Equipment and Stock-in-Trade,
        which shall be registrable in the appropriate Registry as identified in
        Schedules "B" and “C” hereto, free and clear of all prior
        encumbrances, excepting the Permitted Encumbrances.
|
| | (b) | Assignment of Leases                                                                                                                                                                                                                                                   
|
| |     | An assignment of all Real Property Leases from the
        respective Landlords of each of the Premises of the Clinics, or the delivery
        of new leases for the Premises of the Clinics as contemplated in Article
        6.02 (e) below.                       
|
| | (c) | Assignment of Clinics Licenses                                                                                                                                                                                                                                         
|
| |     | An assignment of the business licenses issued by
        the appropriate authorities authorizing the Vendor to carry on business
        at the Premises of the Clinics;                                                                                               
|
| | (d) | Contracts and Assignments                                                                                                                                                                                                                                              
|
| |     | Executed copies of all contracts, if any, together
        with an assignment thereof in favour of the Purchaser and the consent
        of the parties named in such contracts to the assignment;                                                                     
|
| | (e) | Assignment of Chiropractor Employment Agreements                                                                                                                                                                                                                       
|
| |     | An assignment of all existing employment contracts,
        or independent contractor contracts between any of the Chiropractors of
        the Clinics under contract;                                                                                                
|
| | (f) | Other                                                                                                                                                                                                                                                                  
|
| |     | Executed assignments of all other of the Working
        Assets in such form as the nature of such assets may require.                                                                                                                                                 

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10

6.03Purchaser's Obligations

At
  the closing, or at such time as required pursuant to the provisions of this
  Agreement, the Purchaser shall deliver the following:

| | (a) | Payment and Delivery of Agreement                                                                                                                                                                                                                   
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     | To the Vendor's attorney, the delivery of the duly
        executed Promissory Note in accordance with the provisions of Article
        4.01 (a), together with an executed copy of the within agreement.                                          
|
| | (b) | Franchise Agreements                                                                                                                                                                                                                                
|
| |     | To the Vendor's attorney, the delivery of the duly
        executed Standard Franchise Agreements as called for in accordance with
        the provisions of Article 4.02 (1).                                                                      
|
| | (c) | General Security Agreement                                                                                                                                                                                                                          
|
| |     | To the Vendor's attorney, the delivery of the duly
        executed GSA, securing all current and future acquired assets of the Purchaser,
        including the accounts receivable, in accordance with the provisions of
        Article 4.01 (b).

6.04Possession

Immediately
  upon completion of the closing, and subject to the Transition Period, the Vendor
  shall deliver to the Purchaser physical possession of all of the Working Assets,
  all keys, combinations to safes, miscellaneous title documents and any and all
  other items or indicia of title to enable the Purchaser to assume full and complete
  and unencumbered operation and possession of the Clinics and of the Working
  Assets.

6.05Risk After Closing

Immediately
  following completion of the closing the Working Assets shall be at the sole
  risk of the Purchaser and shall be fully and adequately insured.

ARTICLE VII - ADDITIONAL COVENANTS AND ACKNOWLEDGEMENTS

7.01Condition, Quality, Fitness

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11

Except
  as herein expressly set forth there are no representations or warranties as
  to the present condition of the Working Assets or any part thereof, it being
  hereby expressly acknowledged by the Purchaser that the same are being purchased
  "as is".

7.02Time of the Essence

Time
  shall be of the essence of this agreement.

7.03Further Documents

Each
  of the parties hereto shall at the request and expense of any other party execute
  and deliver any further or additional documents deemed necessary by the attorneys
  for both such parties to properly create or confirm title or security according
  to the true intent and meaning of this agreement.

7.04Amendment

No
  amendment or variation of the terms, conditions, warranties, covenants, agreements
  and undertakings set forth herein shall be of any force or effect unless the
  same shall be reduced to writing duly executed by all parties hereto in the
  same manner and with the same formality as this agreement is executed.

7.05Benefit and Burden

This
  agreement shall enure to the benefit of and be binding upon each of the parties
  hereto and each of their respective personal representatives, successors, administrators
  and assigns.

7.06Each Party to Bear its Own Cost

Each
  party to this agreement shall be responsible for the payment of all costs, expenses,
  legal fees, and disbursements incurred or to be incurred by it or him in negotiating
  and preparing this agreement and all documents required to be delivered pursuant
  to this agreement and in otherwise performing the transactions contemplated
  by this agreement.

7.07Unenforceable Terms

If
  any term, covenant or condition of this Agreement shall be invalid or unenforceable
  to any extent, the remainder of this Agreement shall not be affected thereby
  and each remaining term, covenant or condition of this Agreement will be valid
  and will be enforceable to the fullest extent permitted by law.

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12

7.08Entire Agreement

This
  Agreement constitutes the entire agreement between the parties and supercedes
  all prior agreements, whether verbal or written between the parties.

7.09Assignment

The
  Purchaser shall have the right to assign this Agreement to an affiliated or
  related company, in his sole discretion.

ARTICLE VIII - NOTICES

8.01Method of Giving Notice

All
  notices, requests, demands, elections and other communications hereunder shall
  be in writing and shall be sent to the other party at:

| | To the Vendor:    | Suite 207, 5005 Elbow Drive S.W.
| | ----------------- | --------------------------------
| |                   | Calgary, Alberta, Canada T2S 2T6
| |                   | Fax: 403 287-8803               
| |                   | Email:Cgelmon@telusplanet.net   
| |                   |                                 
| | To the Purchaser: | 10301 Indigo Broom Loop         
| |                   | Austin, Texas 78733             
| |                   | Fax: __________________________ 
| |                   | Email: stevemertzdc@yahoo.com   
| |                   |                                 
| | With a copy to:   | William R. Leighton             
| |                   | Attorney at Law                 
| |                   | 3821 Juniper Trace, Suite 107   
| |                   | Austin, Texas 78738             
| |                   | Fax: (512) 322-0882             
| |                   | Email: wrllaw@aol.com           

8.02When Notices Deemed Given

Any
  writing given in the manner set out in Section 8.01 shall be deemed given if
  and when personally delivered, or if mailed in the manner therein provided,
  shall be deemed given forty-eight (48) hours after posting, or if by fax or
  email upon receipt thereof.

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13

ARTICLE IX - INTERPRETATIONS

9.01Headings and Notes

The
  article headings contained in this agreement are for reference purposes only
  and shall not affect in any way the meaning or interpretation of this agreement.

9.02Governing Law

This
  agreement shall be construed and interpreted in accordance with the laws of
  the State of Colorado.

9.03Counterpart Execution

This
  Agreement may be executed in several counterparts each of which when so executed
  shall be deemed to be an original, and such counterparts shall constitute one
  and the same instrument and notwithstanding the date of execution shall be deemed
  to bear date as of the date of this Agreement. This Agreement shall be considered
  properly executed by any party if executed and transmitted by facsimile to the
  other parties.

(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)

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14

IN
  WITNESS WHEREOF the parties hereto have hereunto executed the within Agreement
  as of the31ST day of DECEMBER, 2004 by their
  duly authorized signing authorities on their behalf.

| | LSI GROUP LLC          | 
| | ---------------------- | 
| |                        | 
| |                        | 
| | Per:                   | 
| |                        | 
| |                        | 
| |                        | 
| | CHIROPRACTIC USA, INC. | 
| |                        | 
| |                        | 
| | Per:                   | 

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15

SCHEDULE "A"

LOCATIONS OF CLINICS BEING PURCHASED

|1. | 2301 East Prien Lake Road 
      Lake Charles, LA 70601
|-- | -------------------------------------------------------
|  
|2. | 1546 East Napolean 
      Sulpher, LA 70663            
|  
|3. | 700 E. Miller Ave.
      Iowa, LA 70647                

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16

SCHEDULE "B"

PERMITTED ENCUMBRANCES

|1. | Office lease for 2301 East Prien Lake Road, Lake Charles,
      LA 70601.
|-- | -------------------------------------------------------------------------
|   |                                                                          
|2. | Office lease for 1546 East Napolean, Sulpher, LA 70663.                  
|   |                                                                          
|3. | Office lease for 700 E. Miller Ave., Iowa, LA 70647.                     
|   |                                                                          
|4. | Equipment leases for the following equipment:                            

| | a. | Pitney Bowes Postage Meter, Model #F8MO, serial
      #0010539
| | -- | --------------------------------------------------------------
| | b. | Xerox copier, Model Copy Centre C35, Serial #L321731          
| | c. | Life Span Stretch Partner (3), Lease #751425                  
| | d. | J-Tech – Range of Motion Equipment                            
| |    | (1)                                                           
| |    | (2)                                                           
| |    | (3)                                                           

---

17

SCHEDULE "C"

VENDOR’S STOCK IN TRADE

All inventory located in the three
  clinics as of December 31, 2004, as reflected in the schedules attached to the
  relevant federal income tax returns for such period.

---

18

SCHEDULE “D”

ASSUMED LIABILITIES

---

SCHEDULE “E”

PROMISSORY NOTE

|$ 824,506.90 | Lake Charles, Louisiana
|------------ | -----------------------
|             | December 31st, 2004    

FOR
  VALUE RECEIVED, the undersigned, LSI GROUP, LLC, a Louisiana limited liability
  company, or assignee, (the “Maker”), promises to pay to Chiropractic
  USA, Inc., a Colorado corporation (together with its permitted successors and
  assigns, the “Payee”), in the manner and at the place hereinafter
  provided, the principal amount of $824,506.90. Such sum will be payable
  in accordance with Section 1 of this Promissory Note (this “Note”).

The
  Maker also promises to pay interest on the unpaid principal amount of this Note
  from September 1st, 2005 and from such other dates as set forth in
  this Note until paid in full at the interest rate of 5.0% per year. Principal
  and Interest will be payable in arrears on the first day of each calendar month
  commencing on September 1st, 2005 (the “Payment Date”).
  Principal and interest amounts will be paid in one hundred and twenty (120)
  equal monthly installments on the Payment Date.

This
  Note is issued pursuant to and subject to the terms and conditions of that Sale
  and Purchase of Assets Agreement dated as of December 31st, 2004
  to which Maker and Payee are parties (the “Agreement”). Terms
  not otherwise defined in this Note shall have the same meaning as in the Agreement.

ARTICLE 1TERMS OF REPAYMENT

1.1               
  Payment.Each monthly installment of principal and interest
  in this Note is due and payable on the Payment Date. Any payment under this
  Note will first be credited against costs, fees and expenses provided for hereunder,
  second to the payment of accrued and unpaid interest, and the remainder will
  be credited against principal. All amounts due hereunder shall be payable in
  legal tender of the United States of America, by check delivered to the Payee
  on or before each of the Payment Dates; provided that any payment postmarked
  at least three business days prior to its due date shall be deemed to be timely
  made. If a payment hereunder otherwise would become due and payable on a Saturday,
  Sunday or legal holiday, the due date thereof will be extended to the next succeeding
  business day, and interest will be payable thereon during such extension.

1.2               
  Prepayments.The Maker may prepay this Note in whole or
  in part at any time without penalty with interest to the date of payment. If
  this Note is prepaid, there is to be no discount from the obligation to pay
  the full principal balance due at the time of prepayment.

1.3               
  Maximum Rate of Interest.In no event will the interest
  rate payable on this Note exceed the maximum rate of interest permitted to be
  charged under applicable law. If any holder of this Note collects monies which
  are deemed to constitute interest which would increase the effective interest
  rate on this Note to a rate in excess of the maximum rate permitted to be charged
  by the laws of any applicable jurisdiction, all such sums deemed to constitute
  interest in excess of such maximum rate shall be credited to the payment of
  the principal amount due hereunder or, to the extent such sums exceed the principal
  balance then outstanding, returned to the Maker.

---

1.4               
  Offset.Offset may not be made against this Note for the breach
  of any provision of the Agreement or any other document, or for any damages
  that may be incurred by Maker or any other party.

ARTICLE 2DEFAULT

2.1               
  Events of Default. Any of the following events will constitute
  an “Event of Default” under this Note:

2.1.1
       failure by the Maker to pay the principal or interest
  of this Note when due and payable, which failure shall continue for five days
  after Payee provides notice to Maker of such failure in the manner provided
  in Section 3.2;

2.1.2
        the entry of an order for relief under the
  Federal Bankruptcy Code as to the Maker or entry of any order appointing a receiver
  or trustee for the Maker, or approving a petition in reorganization or other
  similar relief under bankruptcy or similar laws in the United States of America
  or any other competent jurisdiction, and if such order, if involuntary, is not
  satisfied or withdrawn within 60 days after entry thereof; or the filing of
  a petition by Maker seeking any of the foregoing, or consenting thereto; or
  the filing of a petition to take advantage of any debtor’s act; or making
  a general assignment for the benefit of creditors; or admitting in writing inability
  to pay debts of Maker as they mature;

2.1.3
        the insolvency of Maker; or

2.1.4
        any breach by Maker of any representation,
  warranty, covenant or provision of the Agreement.

ARTICLE 3MISCELLANEOUS

3.1               
  Amendments.No amendment or waiver of any provision of
  this Note, nor consent to any departure by the Maker or Payee from this Note,
  will in any event be effective unless the same will be in writing and signed
  by the Payee and Maker, and then such waiver or consent will be effective only
  in the specific instance and for the specific purpose for which given.

3.2               
  Notices.All notices or other communications required or
  permitted to be given under this Note shall be in writing and shall be considered
  given and delivered when personally delivered to the party to whom such notice
  or communication is addressed, or one business day after posting with an overnight
  courier, or when confirmation is received if sent by fax or five business days
  after deposit in the United States mail, postage prepaid, return receipt requested,
  properly addressed to a party at the address set forth below, or at such other
  address as such party shall have specified by notice given in accordance with
  this Section:

---

| | To Payee: | Chiropractic USA, Inc.     
| | --------- | ---------------------------
| |           | #207, 5005 Elbow Drive S.W.
| |           | Calgary, AB T2S 2T6        
| |           | Attn: Cory Gelmon          
| |           | Fax No.: (403) 287-8804    
| |           |                            
| |           |                            
| | To Maker: | LSI GROUP LLC              
| |           | 10301 Indigo Broom Loop    
| |           | Austin, Texas 78733        
| |           | Attn: Dr. Steven Mertz     
| |           | Fax No.:  _____________    

No Waiver; Remedies.No failure on the part
  of Payee to exercise, and no delay in exercising, any right hereunder will operate
  as a waiver thereof, nor will any single or partial exercise of any right hereunder
  preclude any other or further exercise thereof or the exercise of any other
  right. Any agreement by Payee to any extension or waiver of any provision of
  this Note will be valid only if set forth in an instrument in writing signed
  on behalf of Maker and Payee. A waiver by a Payee of the performance of any
  covenant, agreement, obligation, condition, representation or warranty will
  not be construed as a waiver of any other covenant, agreement, obligation, condition,
  representation or warranty. A waiver by Payee of the performance of any act
  will not constitute a waiver of the performance of any other act or an identical
  act required to be performed at a later time. All rights, powers and remedies
  of Payee in connection with this Note are cumulative and not exclusive, and
  will be in addition to any other rights, powers or remedies provided by law
  or equity.

3.3               
  Severability.Any provision of this Note which is prohibited
  or unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective
  to the extent of such prohibition or unenforceability without invalidating the
  remaining provisions of this Note, and any such prohibition or unenforceability
  in any jurisdiction will not invalidate or render unenforceable such provision
  in any other jurisdiction. To the extent permitted by law, the Maker waives
  any provision of law which renders any such provision prohibited or unenforceable
  in any respect.

3.4               
  Binding Effect; Transfer.This Note will be binding upon
  and inure to the benefit of the Maker and its respective successors and assigns.
  The Maker may not assign or otherwise transfer its rights or obligations hereunder
  or any interest herein without the prior written consent of Payee. Any attempted
  assignment by the Maker in contravention of this paragraph will be null and
  void and of no force or effect.

3.5               
  Time of the Essence.With regard to all dates and time
  periods set forth or referred to in this Note, time is of the essence.

3.6               
  Governing Law.This Note will be governed by and construed
  and enforced in accordance with the internal laws of the State of Colorado without
  reference to its choice of law rules.

3.7               
  Construction and Interpretation. Maker agrees that it has reviewed
  this Agreement and has had the opportunity to have counsel review the same and
  that any rule of construction to the effect that ambiguities are to be resolved
  against the drafting party shall not apply in the interpretation of this Note.
  Whenever the words “include,” “includes,” or “including”
  are used in the Note, they shall be deemed to be followed by the words “without
  limitation.”

---

3.8               
  Expenses.If Maker defaults under this Note, Maker will
  reimburse Payee for all reasonable costs of enforcement and collection, including
  attorneys’ fees and expenses.

[SIGNATURES ON NEXT PAGE]

---

IN
  WITNESS WHEREOF, this Note has been issued on the date first written above.

| | “MAKER”      
| | -------------
| | LSI GROUP LLC
| |              
| | By:          
| | Its:         

AGREED TO AND ACCEPTED  
  this ___________day of _____________ , ____, by:

“PAYEE”

CHIROPRACTIC USA, INC.,  
  A Colorado corporation

|By:  |  | 
|---- |  | 
|     |  | 
|     |  | 
|     |  | 
|     |  | 
|Its: |  | 

---

SCHEDULE F: GENERAL SECURITY AGREEMENT

> GENERAL SECURITY AGREEMENT made as of the
>             31st day of December, 2004.

BETWEEN:

LSI GROUP, LLC a Louisiana limited liability company having its principle office 
  at the City of Lake Charles, in the State of Louisiana (the "Debtor")

AND

Chiropractic USA, Inc. 
  a Colorado corporation having an office
  in the City of Los Angeles, in the State of California (the "Secured Party")

ARTICLE ONEGRANT OF SECURITY INTEREST

1.01
  Security Interest - For consideration and as security for the
  payment and performance of the Obligations referred to in Article 3 hereof,
  the Debtor, subject to the exceptions set out in Article 2, hereby mortgages,
  charges, assigns and transfers to the Secured Party, and grants to the Secured
  Party a security interest in, all the Debtor's right, title and interest in
  and to all presently owned or held and after acquired or held personal property,
  assets and undertakings of the Debtor (other than real property), of whatever
  nature or kind and wheresoever situate and all proceeds thereof and therefrom
  (all of which is hereinafter collectively called the "Collateral") including,
  without limiting the generality of the foregoing:

| | (a) | Accounts:all debts, accounts, claims,
        money and choses in action which now are or which may at any time hereafter
        be due or owing to or owned by the Debtor (hereinafter referred to as
        the "Receivables") and all securities, bills, notes and other documents
        now held or owned or which may be hereafter taken, held or owned by the
        Debtor or anyone on behalf of the Debtor in respect of the Receivables
        or any part thereof, and also all books and papers recording, evidencing
        or relating to the Receivables or any part thereof (hereinafter collectively
        referred to as the "Accounts");
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | Inventory:all inventory of whatever
        kind and wherever situated now owned or hereafter acquired by the Debtor,
        including without limitation, all goods, merchandise, raw materials, goods
        in process, finished goods and other tangible personal property held for
        sale, lease or resale or furnished under contracts for service or used
        or consumed in the business of the Debtor (hereinafter collectively referred
        to as the "Inventory");                                                                                                                                                                       
|
| | (c) | Equipment:all machinery, tools, equipment,
        fixtures, furniture, plant, vehicles and other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

---

| |     | tangible personal property now owned or hereafter
        acquired by the Debtor and not included in subparagraphs (a) and (b) above
        and all parts, components, attachments, accessories, accessions, replacements,
        substitutions, additions and improvements to any of the foregoing (hereinafter
        collectively referred to as the "Equipment");                                                                                                                                
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (d) | Securities:all shares, stock warrants,
        bonds, debentures or other securities now owned or hereafter acquired
        by the Debtor together with all renewals thereof, substitutions therefor,
        accretions thereto and all rights and claims in respect thereof (hereinafter
        collectively referred to as the "Securities");                                                                                                                                                      
|
| | (e) | Intangibles:all contractual rights,
        licenses, goodwill, patents, trademarks, trade names, copyrights and other
        intellectual property of the Debtor, all other choses in action of the
        Debtor of every kind which now are, or which may at any time hereafter
        be, due or owing to or owned by the Debtor, and all other intangible property
        of the Debtor which is not Accounts, chattel paper, instruments, documents
        of title, securities or money; and
|
| | (f) | Proceeds:all personal property in
        any form derived directly or indirectly from any dealing with the Collateral
        or that indemnifies or compensates for Collateral destroyed or damages.                                                                                                                                                                                                                                                                                                  
|

ARTICLE TWO 
  EXCEPTIONS

2.01
  The last ten days of the term created by any lease or agreement therefor are
  hereby excepted out of any charge or security interest created by this Security
  Agreement but the Debtor shall stand possessed of the reversion thereby remaining
  upon trust to assign and dispose thereof to any third party as the Secured Party
  shall direct.

2.02 There
  shall be excluded from the security interests hereby created any consumer goods
  of the Debtor.

ARTICLE THREE 
  OBLIGATIONS SECURED

3.01 This
  Security Agreement and the security interests hereby created are in addition
  to and not in substitution for any other security interest now or hereafter
  held by the Secured Party from the Debtor or from any other person whomsoever
  and shall be general and continuing security for the payment of all indebtedness
  and liability of the Debtor to the Secured Party (including interest thereon),
  present and future, absolute or contingent, joint or several, direct or indirect,
  matured or not, extended or renewed, wheresoever and howsoever incurred, and
  any ultimate balance thereof, including all obligations of the Debtor to the
  Secured Party, whether or not contained in this Security Agreement (all of which
  indebtedness, liability and obligations are hereinafter collectively called
  the "Obligations").

3.02
  Performance of Obligations - If the Debtor fails to perform its
  Obligations hereunder, the Secured Party may, but shall not be obliged to, perform
  any and all of such Obligations without prejudice to any other rights and remedies
  of the Secured Party hereunder, and any payments made and any costs, charges,

---

26

expenses and legal fees and disbursements (on a solicitor
  and his own client basis) incurred in connection therewith shall be payable
  by the Debtor to the Secured Party forthwith with interest until paid at the
  highest rate borne by any of the Obligations and such amounts shall be a charge
  upon and security interest in the Collateral in favour of the Secured Party
  prior to all claims subsequent to this Security Agreement.

ARTICLE FOUR 
  PROHIBITIONS

4.01
  Without the prior written consent of the Secured Party the Debtor shall not
  have power to:

| | (a) | create or permit to exist any security interest
        in, charge, encumbrance or lien over, or claim against any of its property,
        assets, or undertakings which ranks or could in any event rank in priority
        to or pari passu with any security interest created by this Security Agreement,
        or
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | grant, sell or otherwise assign its chattel paper.                                                                                                                                                                                                                                                                       

ARTICLE FIVE 
  ATTACHMENT

5.01 The
  Debtor acknowledges that the security interests hereby created attach upon the
  execution of this Security Agreement (or in the case of any after acquired property,
  upon the date of acquisition thereof), that value has been given, and that the
  Debtor has, or in the case of after acquired property will have, rights in the
  Collateral.

ARTICLE SIXCOVENANTS, REPRESENTATIONS AND WARRANTIES OF DEBTOR

6.01
  Covenants, Representations and Warranties - The Debtor warrants, covenants
  and represents that:

| | (a) | the Debtor, if a company or a partnership, represents
        and warrants that this Security Agreement is granted in accordance with
        resolutions of the directors (and of the shareholders as applicable) or
        of the partners, as the case may be, of the Debtor and all other matters
        and things have been done and performed so as to authorize and make the
        execution and delivery of this Security Agreement, and the performance
        of the Debtor's obligations hereunder, legal, valid and binding;                           
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | the Debtor will defend the Collateral against all
        claims and demands of all persons at any time claiming the same or any
        interest therein;                                                                                                                                                                                                                                                                                                                                                                                                               
|
| | (c) | the Debtor's principal place of business and the
        location of the office where it keeps its records respecting the Accounts
        and keeps its Inventory and Equipment, is that given in the Schedule "A".
        If the Debtor changes its principal place of business or the location
        of the inventory, Securities or Equipment or the location of the office
        where it keeps its records respecting the Accounts, or acquires other
        places of business, it will notify the Secured Party contemporaneously
        with such change;

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27

| | (d) | the Debtor will not give any further or
        other security agreement covering the Collateral or any part thereof to
        any party other than the Secured Party;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (e) | the Debtor shall from time to time forthwith
        on the Secured Party's request furnish to the Secured Party in writing
        all information requested relating to the Collateral and the Secured Party
        shall be entitled from time to time to inspect at any reasonable time
        the Collateral and make copies of all documents relating to Accounts and
        for such purposes the Secured Party shall have access to all premises
        occupied by the Debtor or where the Collateral or any of it may be found;                                                                                                                                                                                                                                                                                                                                                                                        
|
| | (f) | the Debtor shall from time to time forthwith
        on the Secured Party's request do, make and execute all such financing
        statements, further assignments, documents, acts, matters and things as
        may be required by the Secured Party with respect to the Collateral or
        any part thereof or as may be required to give effect to this General
        Security Agreement and the transactions contemplated hereby, and the Debtor
        hereby constitutes and appoints the Secured Party, or any receiver appointed
        by the Court or the Secured Party as hereafter set out, the true and lawful
        attorney of the Debtor irrevocably with full power of substitution to
        do, make and execute all such assignments, documents, acts, matters or
        things with the right to use the name of the Debtor whenever and wherever
        it may be deemed necessary or expedient;
|
| | (g) | that at all times while this Security
        Agreement remains in effect the Debtor will:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| |     | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| |     | (iv)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |     | (v)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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28

| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 1.                                                                                                                                                                                                                             | any change in the information contained herein relating
        to the Debtor, its address, its business or the Collateral;                                                             
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 2.                                                                                                                                                                                                                             | the details of any material acquisition of the Collateral;                                                                                                                              
|
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 3.                                                                                                                                                                                                                             | any material loss or damage to the Collateral;                                                                                                                                          
|
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 4.                                                                                                                                                                                                                             | any material default by any account debtor in payment
        or other performance of his obligations to the Debtor with respect to
        any Accounts; and                           
|
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 5.                                                                                                                                                                                                                             | the return to or repossession by the Debtor of the
        Collateral where such return or repossession of the Collateral is material
        in relation to the business of the Debtor;
|
| |     | (vi)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | prevent the Collateral,
        other than Inventory sold, leased, or otherwise disposed of as permitted
        hereby, from being or becoming an accession to other property not covered
        by this Security Agreement.
|
| | (h) | The Debtor represents and warrants that
        the Debtor lawfully owns and possesses all presently held Collateral and
        has good title thereto, free from all security interests, charges, encumbrances,
        liens and claims, save only the charges or security interests, if any,
        shown in the Schedule hereto and those consented to in writing by the
        Secured Party, and the Debtor has good right and lawful authority to grant
        a security interest in the Collateral as provided by this Security Agreement.

ARTICLE SEVEN
  INSURANCE

7.01
  Insurance -

| | (a) | The Debtor will obtain and maintain, at its own
        expense, insurance against loss and damage to the Collateral, including,
        without limitation, loss by fire (including so-called extended coverage),
        theft, collision and such other risks of loss as are customarily insured
        against on this type of Collateral, in an amount equal to not less than
        the full replacement value thereof, in such form and with such insurers
        as shall be reasonably satisfactory to the Secured Party.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | All such policies shall name the Secured Party as
        an additional insured and loss payee thereof, as the Secured Party's interests
        may appear, and shall provide that the insurer will give the Secured Party
        at least ten days written notice of intended cancellation.                                                                                                                                                                                                                                       
|
| | (c) | At the Secured Party's request, the Debtor shall
        furnish the Secured Party with a copy of the policy of insurance and a
        certificate of insurance or other evidence satisfactory to the Secured
        Party that such insurance coverage is in effect.                                                                                                                                                                                                                                                              
|
| | (d) | The Debtor shall give the Secured Party notice of
        any damage to, or loss of the Collateral, or                                                                                                                                                                                                                                                                                                                                                                                                                               

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29

| |     | any part thereof, forthwith upon the occurrence
        of any such damage or loss.                                                                                                                                                                                                                               
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (e) | Should the Debtor fail to make any payment or do
        any act as provided in this Section the Secured Party shall have the right,
        but not the obligation, without notice or demand upon the Debtor, without
        releasing the Debtor from any obligation hereunder, to make or do the
        same.
|
| | (f) | All sums so incurred or expended by the Secured
        Party shall at the Secured Party's option become immediately due and payable
        by the Debtor.                                                                                                                                                       

ARTICLE EIGHTDEFAULT, REMEDIES AND ENFORCEMENT

8.01
  Default - The Debtor shall be in default under this Security Agreement,
  unless waived by the Secured Party, in any of the following events:

| | (a) | the Debtor makes default in payment when due or
        any indebtedness or liability of the Debtor to the Secured Party; or                                                                                                                                                                                                                                                     
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | the Debtor is in breach of any term, condition,
        obligation or covenant to the Secured Party, or any representation or
        warranty to the Secured Party is untrue, whether or not contained in this
        Security Agreement; or                                                                                                                                   
|
| | (c) | the Debtor makes an assignment for the benefit of
        its creditors, is declared bankrupt, makes a proposal or otherwise takes
        advantage of provisions for relief under the Bankruptcy Act, the Companies
        Creditors' Arrangement Act or similar legislation in any jurisdiction,
        or makes an authorized assignment; or                               
|
| | (d) | a receiver, receiver and manager or receiver-manager
        of all or any part of the Collateral is appointed; or                                                                                                                                                                                                                                                               
|
| | (e) | an order of execution against the Collateral or
        any part thereof remains unsatisfied for a period of 10 days; or                                                                                                                                                                                                                                                         
|
| | (f) | without the prior written consent of the Secured
        Party, the Debtor creates or permits to exist any charge, encumbrance
        or lien on or claim against or any security interest in, any of the Collateral
        which ranks or could in any event rank priority to or pari passu with
        any secured interest or charge created by this Security Agreement; or
|
| | (g) | the holder of any other charge, encumbrance or lien
        on or claim against, or security interest in, any of the Collateral does
        anything to enforce or realize on such charge, encumbrance, lien, claim
        or security interest; or                                                                                                                            
|
| | (h) | if the Debtor is a company or a partnership, an
        order is made or an effective resolution is passed for winding up the
        Debtor; or                                                                                                                                                                                                                                 
|
| | (i) | the Debtor, if a company, enters into any reconstruction,
        reorganization, amalgamation, merger or other similar arrangement with
        any other person; or                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                  
| | (j) | the Debtor, if an individual, dies or is declared
        incompetent by a court of competent jurisdiction; or                                                                                                                                                                                                                                                                   

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30

| | (k) | the Secured Party in good faith believes and has
        commercially reasonable grounds to believe that the prospect of payment
        or performance of any of the Obligations is impaired or that any of the
        Collateral is or is about to be placed in jeopardy.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8.02
  Enforcement and Remedies - Upon any default under this Security
  Agreement of the Secured Party may declare any or all of the Obligations not
  payable on demand to become immediately due and payable and the security hereby
  constituted will immediately become enforceable. To enforce and realize on the
  security constituted by this Security Agreement the Secured Party may take any
  action permitted by law or in equity, as it may deem expedient, and in particular
  without limiting the generality of the foregoing, the Secured Party may do any
  of the following:

| | (a) | the Secured Party may, in addition to any other
        rights, appoint by instrument in writing a receiver, receiver and manager
        or receiver-manager (which person so appointed is hereinafter referred
        to as the "Receiver") for all or any part of the Collateral and may remove
        or replace such Receiver from time to time or may institute proceedings
        in any court of competent jurisdiction for the appointment of such a Receiver.
        Where the Secured Party is hereinafter referred to in this Section 8.02
        the term shall include any Receiver so appointed and the officers, employees
        or agents of such Receiver;                                                        
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | the Debtor will forthwith upon demand assemble and
        deliver to the Secured Party possession of the Collateral at such place
        as may be specified by the Secured Party, provided that the Secured Party
        may take such steps as it considers necessary or desirable to obtain possession
        of all or any part of the Collateral, and the Debtor agrees that the Secured
        Party may at any time enter upon lands and premises for the purpose of
        taking possession of and removing the Collateral or any part thereof with
        power to exclude the Debtor, its agents and its servants therefrom, without
        becoming a mortgagee in possession.                                         
|
| | (c) | the Secured Party may seize, collect, sell, lease,
        license, realize, borrow money on the security of, release to third parties
        or otherwise deal with the Collateral or any part thereof in such manner,
        upon such terms and conditions and at such time or times as may seem to
        it advisable and without notice to the Debtor (except where notice is
        specifically required by law), and may charge on its own behalf and pay
        to others reasonable sums for expenses incurred and services rendered
        (expressly including legal, receivers' and accounting fees and expenses)
        and may add the amount of such sums to the indebtedness of the Debtor
        secured hereby;
|
| | (d) | upon notice to the Debtor in the manner provided
        by the Personal Property Security Act, the Secured Party may elect to
        retain all or any part of the Collateral in satisfaction of the Obligations
        to it of the Debtor;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| | (e) | the Secured Party shall not be liable or accountable
        for any failure to seize, collect, realize, sell or obtain payment of
        the Collateral or any part thereof and shall not be bound to institute
        proceedings for the purpose of seizing, collecting, realizing or obtaining
        possession or payment of the same or for the purpose of preserving any
        rights of the Secured Party, the Debtor or any other person, firm or corporation
        in respect of same;                                                                                                                                                                                                                                   

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31

| | (f) | the Secured Party may grant extensions of time,
        take and give up securities, accept compositions, grant releases and discharges,
        release any part of the Collateral to third parties and otherwise deal
        with the Debtor, debtors of the Debtor, sureties and others and with the
        Collateral and other securities as the Secured Party may see fit without
        prejudice to the liability of the Debtor or the Secured Party's right
        to hold and realize the Collateral;                                                                                                                                                                                                                     
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (g) | all money collected or received by the Secured Party
        in respect of the Collateral may be applied on account of such parts of
        the indebtedness and liability of the Debtor as the Secured Party in its
        sole discretion determines or may be held unappropriated in an collateral
        account or in the discretion of the Secured Party may be released to the
        Debtor, all without prejudice to the Secured Party's claims upon the Debtor;                                                                                                                                                                                                                                                           
|
| | (h) | to facilitate the realization of the Collateral
        the Secured Party may carry on or concur in the carrying on of all or
        any part of the business of the Debtor, enter buildings, plant and undertaking
        of or occupied or used by the Debtor and use all or any of the machinery
        and equipment of the Debtor for such time as the Secured Party determines,
        free of charge, to manufacture or complete the manufacture of any inventory
        and to pack and ship the finished product, and the Secured Party shall
        not be liable to the debtor for any neglect in so doing or in respect
        of any rent, charges, depreciation or damages in connection with such
        actions;
|
| | (i) | the Secured Party may discharge any encumbrance,
        lien, claim or charge that may exist or be threatened against the same
        and in every such case the amounts so paid together with costs, charges
        and expenses incurred in connection therewith shall be added to the Obligations
        of the Debtor to the Secured Party as hereby secured; and                                                                                                                                                                                                                                                                                                                                                               
|
| | (j) | preserve, protect and maintain the Collateral and
        make such replacements thereof and repairs and additions thereto as the
        Secured Party may deem advisable;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| | (k) | sell, lease or otherwise dispose of all or any part
        of the Collateral, whether by public or private sale or lease or otherwise,
        in such manner, at such price as can be reasonably obtained therefor and
        on such terms as to credit and with such conditions of sale and stipulations
        as to title or conveyance or evidence of title or otherwise as to the
        Secured Party may seem reasonable, provided that if any sale is on credit
        the Debtor will not be entitled to be credited with the proceeds of any
        such sale, lease or other disposition until the moneys therefor are actually
        received.                                                                    

8.03
  Receiver - A Receiver appointed pursuant to this Security Agreement
  shall be the agent of the Debtor and not of the Secured Party and, to the extent
  permitted by law or to such lesser extent permitted by its appointment, shall
  have all the powers of the Secured Party hereunder, and in addition shall have
  power to carry on the business of the Debtor and for such purpose from time
  to time to borrow money either secured or unsecured, and if secured by a security
  interest on any of the Collateral; such security interest may rank before or
  pari passu with or behind any secured interest created by this Security Agreement,
  and if it does not so specify such security interest shall rank before the security
  interests created by this Security Agreement.

8.04
  Distribution of Value of Collateral - Subject to the claims, if
  any, of the creditors of the Debtor ranking in priority to this Security Agreement,
  all amounts realized from the disposition of Collateral pursuant to this Security
  Agreement will be applied as the Secured Party, in its absolute discretion,
  may direct as follows:

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32

| | (a) | in payment of all costs, charges and expenses
        (including legal fees and disbursements on a solicitor and his own client
        basis) incurred by the Secured Party in connection with or incidental
        to:
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     | (i)                                                                                                                                                                                                                      
|
| |     | (ii)                                                                                                                                                                                                                     
|
| | (b) | in or toward payment to the Secured Party
        of all principal and other moneys (except interest) due in respect of
        the Obligations;                                                                         
|
| | (c) | in or toward payment to the Secured Party
        of all interest remaining unpaid in respect of the Obligations.                                                                                                        

Subject to applicable law and the claims, if any, of other
  creditors of the Debtor, any surplus will be paid to the Debtor.

8.5
  Deficiency - If the amounts realized from the disposition of the
  Collateral are not sufficient to pay the Obligations in full the Debtor will
  immediately pay to the Secured Party the amount of such deficiency.

ARTICLE NINEDEALING WITH COLLATERAL BY THE DEBTOR

9.01
  Dealing with Collateral by the Debtor -

| | (a) | Provided that the Debtor is not in default under
        this Security Agreement, at any time without the consent of the Secured
        Party the Debtor may lease, sell, license, consign or otherwise deal with
        items of Inventory in the ordinary course of its business and for the
        purposes of carrying on its business, so that the purchaser thereof takes
        title clear of the security interest hereby created, but
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | if such sale or lease results in an account receivable,
        such account receivable is subject to the security interest hereby created;
        and                                                                                                                                                                                                                                                                                            
|
| | (c) | in the event that the Debtor shall collect or receive
        any of the accounts receivable or shall dispose of and be paid for any
        of the other Collateral covered by this General Security Agreement, all
        non-cash proceeds of such disposition shall be subject to the security
        interest hereby created; and                                                                                                           
|
| | (d) | all money so collected or received by the Debtor
        shall be received as trustee for the Secured                                                                                                                                                                                                                                                                                                                                              

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33

| |  | Party and shall be held separate and apart from other
        money of the Debtor, and shall forthwith be paid over to the Secured Party.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------

9.02
  Restriction of Sale or Disposal of Collateral - Except as herein
  provided, without the prior written consent of the Secured Party the Debtor
  will not:

| | (a) | sell, lease or otherwise dispose of the Collateral;                   
| | --- | ----------------------------------------------------------------------
|
| | (b) | release, surrender or abandon possession of the
        Collateral; or
|
| | (c) | move or transfer the Collateral from its present
        location.    

ARTICLE TEN 
  GENERAL

10.01
  Enurement - This Security Agreement shall ensure to the benefit
  of the Secured Party and its successors and assigns, and shall be binding upon
  the respective heirs, executors, personal representatives, successors and permitted
  assigns of the Debtor.

10.02 Entire
  Agreement - This General Security Agreement constitutes the entire agreement
  between the Debtor and the Secured Party with respect to the subject matter
  hereof. There are no representations, warranties, terms, conditions, undertaking
  or collateral agreements, expressed, implied or statutory between such parties
  other than as expressly set forth herein.

10.03
  No Waiver, Remedies - No failure on the part of the Secured Party
  to exercise, and no delay in exercising, any right hereunder shall operate as
  a waiver thereof, nor shall any single or partial exercise thereof or the exercise
  of any other right. The remedies herein provided are cumulative and not exclusive
  of any remedies provided by law.

10.04 Severability
  - If any provision of this General Security Agreement is determined to be invalid
  or unenforceable in whole or in part, such invalidity or unenforceability shall
  attach only to such provision or part thereof and the remaining part of such
  provision and all other provisions hereof shall continue in full force and effect.

10.05
  Notices - Any demand, notice or other communication (hereinafter
  in this Section 10.04 referred to as a "Communication") to be given in connection
  with this General Security Agreement shall be given in writing and may be given
  by personal delivery or by registered mail addressed to the recipient at the
  address shown on the first page of this Agreement, or such other address as
  may be designated by notice by any party to the other. Any Communication given
  by personal delivery shall be conclusively given and, if given by registered
  mail, on the third day following the deposit thereof in the mail. If the party
  giving any Communication knows or ought reasonably to know of any difficulties
  with the postal system which might affect the delivery of mail, any such Communication
  shall not be mailed but shall be given by personal delivery.

10.06
  Governing Law - This General Security Agreement shall be governed
  by and construed in accordance with the laws of the State of Colorado.

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34

10.07
  Rights Cumulative - All rights and remedies of the Secured Party
  set out in this Security Agreement are cumulative and no right or remedy contained
  herein is intended to be exclusive but each will be in addition to every other
  right or remedy contained herein or in any existing or future security agreement
  or now or hereafter existing at law, in equity or by statute, or pursuant to
  any other agreement between the Debtor and the Secured Party that may be in
  effective from time to time.

10.08
  Liability of Secured Party -

| | (a) | The Secured Party shall not be responsible or liable
        for any debts contracted by it, for damages to persons or property or
        for salaries or non-fulfilment of contracts during any period when the
        Secured Party shall manage the Collateral upon entry, as herein provided,
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | nor shall the Secured Party be liable to account
        as mortgagee in possession or for anything except actual receipts or be
        liable for any loss or realization or for any default or omission for
        which a mortgagee in possession may be liable.                              
|
| | (c) | The Secured Party shall not be bound to do, observe
        or perform or to see to the observance or performance by the Debtor of
        any obligations or covenants imposed upon the Debtor,                                                                                                   
|
| | (d) | nor shall the Secured Party, in the case of securities,
        instruments or chattel paper, be obliged to preserve rights against other
        persons,                                                                                                                                         
|
| | (e) | nor shall the Secured Party be obliged to keep any
        of the Collateral identifiable.                                                                                                                                                                                                         
|
| | (f) | The Debtor hereby waives any applicable provision
        of law permitted to be waived by it which imposes higher or greater obligations
        upon the Secured Party than aforesaid.                                                                                                           

10.09
  Appointment of Attorney - The Debtor hereby irrevocably appoints
  the Secured Party or the Receiver, as the case may be, with full power of substitution,
  to be the attorney of the Debtor for and in the name of the Debtor to sign,
  endorse or execute under seal or otherwise any deeds, documents, transfers,
  cheques, instruments, demands, assignments, assurances or consents that the
  Debtor is obliged to sign, endorse or execute and generally to use the name
  of the Debtor and to do all things as may be necessary or incidental to the
  exercise of all or any of the powers, conferred on the Secured Party or the
  Receiver, as the case may be, pursuant to this Security Agreement.

10.01
  Accounts - Notwithstanding any other provision of this Security
  Agreement, the Secured Party may collect, realize, sell or otherwise deal with
  the Accounts or any part thereof in such manner, upon such terms and conditions
  and at such time or times, whether before or after default, as may seem to it
  advisable, and without notice to the Debtor, except in the case of disposition
  after default and then subject to the provisions of Part V of the Act. All moneys
  or other forms of payment received by the Debtor in payment of any Account will
  be received and held by the Debtor in trust for the Secured Party.

10.11
  No Merger - This Security Agreement shall not operate so as to
  create any merger or discharge of any of the Obligations, or any assignment,
  transfer, guarantee, lien, contract, promissory note, bill of exchange or security
  interest of any form held or which may hereafter be held by the Secured Party
  from the Debtor or from any other person whomsoever. The taking of a judgment
  with respect to any of the

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35

Obligations will not operate as a merger of any of the covenants
  contained in this Security Agreement.

10.12
  Assignment - The Secured Party may, without further notice to
  the Debtor, at any time assign, transfer or grant a security interest in this
  Security Agreement and the security interests granted hereby. The Debtor expressly
  agrees that the assignee, transferee or secured party, as the case may be, shall
  have all of the Secured Party's rights and remedies under this Security Agreement
  and the Debtor will not assert any defense, counterclaim, right of set-off or
  otherwise any claim which it now has or hereafter acquires against the Secured
  Party in any action commenced by such assignee, transferee or secured party,
  as the case may be, as the Obligations become due.

10.13
  Satisfaction and Discharge - Any partial payment or satisfaction
  of the Obligations, or any ceasing by the Debtor to be indebted to the Secured
  Party, shall be deemed not to be a redemption or discharge of this Security
  Agreement. The debtor shall be entitled to a release and discharge of this Security
  Agreement upon full payment and satisfaction of all Obligations and upon written
  request by the Debtor and payment to the Secured Party of all costs, charges,
  expenses and legal fees and disbursements (on a solicitor and his own client
  basis) incurred by the Secured Party in connection with the Obligations and
  such release and discharge.

10.14
  Interpretation - In this Security Agreement:

| | (a) | "Collateral" has the meaning set out in Clause 1.01
        hereof and any reference to Collateral shall, unless the context otherwise
        requires, be deemed a reference to Collateral as a whole or any part thereof;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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36

| | (b) | "Debtor" and the personal pronoun "it" or "its"
        and any verb relating thereto and used therewith shall be read and construed
        as required by and in accordance with the context in which such words
        are used depending upon whether the Debtor is one or more individuals,
        corporations or partnerships and, if more than one, shall apply and be
        binding upon each of them severally;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (c) | "the Act" means the Personal Property Security Act
        of Alberta and all regulations thereunder as amended from time to time.                                                                                                                                                                                                                                                                                           

Words
  and expressions used herein that have been defined in the Act shall be interpreted
  in accordance with their respective meanings given in the Act unless otherwise
  defined herein or unless the context otherwise requires.

10.15
  Copy of Agreement and Financing Statement - The Debtor hereby:

| | (a) | acknowledges receiving a copy of this Security Agreement,
        and                                                                                                                                               
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | waives all rights to receive from the Secured Party
        a copy of any financing statement, financing change statement or verification
        statement filed at any time in respect of this Security Agreement.

IN
  WITNESS WHEREOFthe parties have executed this General Security Agreement.

LSI GROUP LLC 
  by its authorized signatory



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