Document:

LOAN
      AGREEMENT

     

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

     

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

     

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

     

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

     

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

     

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

     

    ARTICLE
      I

     

    ISSUANCE
      OF NOTES; LOANS

     

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

     

    1.2 Procedure
      for Lending.

     

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

     

    
      
         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

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

     

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

     

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

     

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

     

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

     

    
      
         

        
        

      

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

     

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

     

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

     

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

     

    ARTICLE
      II

     

    REPRESENTATIONS
      AND WARRANTIES

     

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

     

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

     

    
      
         

        
        

      

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

     

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

     

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

     

    
      
         

        
        

      

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

     

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

     

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

     

    
      
         

        
        

      

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

     

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

     

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

     

    
      
         

        
        

      

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

     

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

     

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

     

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

     

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

     

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

     

    
      
         

        
        

      

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

     

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

     

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

     

    (t) Security
      Documents.

     

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

     

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

     

    
      
         

        
        

      

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

     

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

     

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

     

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

     

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

     

    
      
         

        
        

      

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

     

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

     

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

     

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

     

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

     

    
      
         

        
        

      

      
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    ARTICLE
      III

     

    OTHER
      AGREEMENTS OF THE PARTIES

     

    3.1 Transfer
      Restrictions.

     

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

     

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

     

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

    

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

    
      
         

        
        

      

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

     

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

     

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

     

    
      
         

        
        

      

      
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    3.5 Reservation
      and Listing of Underlying Shares.

     

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

     

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

     

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

     

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

     

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

     

     

    
      
         

        
        

      

      
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    3.9 Right
      of First Refusal; Subsequent Registrations.

     

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

     

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

     

    
      
         

        
        

      

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

     

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

     

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

     

    
      
         

        
        

      

      
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    ARTICLE
      IV

    NEGATIVE
      COVENANTS

     

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

    

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

     

    (a) Indebtedness
      under the Transaction Documents;

     

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

     

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

     

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

     

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

     

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

     

    (b) any
      Lien
      created under the Transaction Documents;

     

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

     

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

     

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

     

    
      
         

        
        

      

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

     

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

     

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

     

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

     

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

     

    (ii) Permitted
      Investments.

     

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

     

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

     

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

     

     

    
      
         

        
        

      

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
         

        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

    ARTICLE
      V

    DEFINITIONS

     

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    
      
         

        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    
 

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

    

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

    

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

    

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

    

    “Permitted
      Investments” shall mean:

    

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

     

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

     

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

     

    
      
         

        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

     

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

    

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

    

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

    

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

    

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

    

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

    

    “Subsidiary”
      shall mean any subsidiary of the Company.

    

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

    

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

    

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

    

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

    

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

    
      
         

        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      VI

    MISCELLANEOUS

     

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

     

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

     

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

     

    
       

      
        	
                 If
                  to the Company:

              	
                Bio
                  Solutions Manufacturing, Inc.

              
	 	
                4440
                  Arville Street # 6

              
	 	
                Las
                  Vegas, NV 89103

              
	 	
                Facsimile
                  No.: (702) 222-9126

              
	 	
                Attn:
                  Secretary

              

      

       

    

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

     

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

     

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

     

    
      
         

        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

     

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
         

        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

     

     

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

     

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

     

    .

     

    
      	 BIO SOLUTIONS MANUFACTURING,
              INC
	 
	 
	 
	  By:
               /s/
              David S. Bennett    
	 Name: David S. Bennett
	 Title:
              President

    

    

     

     

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK

    INVESTOR
      SIGNATURE PAGES FOLLOWS]

     

    

     

    

     

    

     

     

     

    
      
         

        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

    INVESTORS:

     

    [INTENTIONALLY
      OMITTED]SECURITY
      AGREEMENT

    

    SECURITY
      AGREEMENT, effective as of November 29, 2006, is by and among Bio Solutions
      Manufacturing, Inc., a New York corporation (the “Company” or “BSLM”), Bio
      Solutions Production, Inc., a Nevada corporation (“BSP”), Bio Extraction
      Services, Inc., a New York corporation (“BESI”, and together with BSP, the
“Guarantors,” and together with BSLM, the “Obligors”) and the parties set forth
      on the signature page hereto and their endorsees, transferees, and assigns
      (the
“Secured Parties”).

     

    W I T N E S S E T H

     

    WHEREAS,
      pursuant to the Loan Agreement dated the date hereof between BSLM and the
      Secured Parties, (i) the Secured Parties have agreed to amend and restate
      certain obligations relating to advances previously made by Secured Parties
      on
      behalf of BSLM (the “Amended Notes”) and (ii) the Secured Parties have agreed
      from time to time to loan to BSLM certain principal amounts (collectively,
      the
“Loans”), which shall be evidenced by a secured convertible promissory note (the
“Note”, together with the Amended Notes, the “Notes”). The principal amount
      outstanding and interest payable under the Notes is convertible into shares
      of
      BSLM’s common stock, $0.001 par value (the “Common Stock”). In connection with
      the transactions contemplated by the Loan Agreement, BSLM and the Secured
      Parties have entered into the Loan Agreement, dated the date hereof (the “Loan
      Agreement”); and 

     

    WHEREAS,
      the Guarantors have jointly and severally and absolutely and unconditionally
      guaranteeing the full and punctual payment and performance of all of the
      obligations of BSLM to the Secured Parties pursuant to that certain Guaranty
      Agreement dated as of even date herewith (the “Guaranty”); and 

     

    WHEREAS,
      in order to induce the Secured Parties to enter into the Loan Agreement make
      the
      Loan to BSLM, the Obligors have agreed to execute and deliver to the Secured
      Parties this Agreement for the benefit of the Secured Parties and to grant
      to
      them a first priority security interest in certain property of the Obligors
      to
      secure the prompt payment, performance, and discharge in full of the Obligors
      obligations under the Transaction Documents (as defined below).

     

    NOW,
      THEREFORE, in consideration of the agreements herein contained and for other
      good and valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, the parties hereto hereby agree as follows:

     

    1. Certain
      Definitions.
      As used
      in this Agreement, the following terms shall have the meanings set forth in
      this
      Section 1. Terms used but not otherwise defined in this Agreement that are
      defined in Article 9 of the UCC (such as “general intangibles” and “proceeds”)
      shall have the respective meanings given such terms in Article 9 of the
      UCC.

     

    (a) “Collateral”
      means the collateral in which the Secured Parties are granted a security
      interest by this Agreement and which shall include the following, whether
      presently owned or existing or hereafter acquired or coming into existence,
      and
      all additions and accessions thereto and all substitutions and replacements
      thereof, and all proceeds, products and accounts thereof, including, without
      limitation, all proceeds from the sale or transfer of the Collateral and of
      insurance covering the same and of any tort claims in connection
      therewith:

     

    
      
         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (i) All
      Goods
      of the Obligors, including, without limitations, all machinery, equipment,
      computers, motor vehicles, trucks, tanks, boats, ships, furniture, special
      and
      general tools, fixtures, test and quality devices and other equipment of every
      kind and nature and wherever situated, together with all documents of title
      and
      documents representing the same, all additions and accessions thereto,
      replacements therefor, all parts therefor, and all substitutes for any of the
      foregoing and all other items used and useful in connection with the Obligors’
businesses and all improvements thereto (collectively, the “Equipment”);
      and

     

    (ii) All
      Inventory of the Obligors; and 

     

    (iii) All
      of
      the Obligors’ contract rights and general intangibles, including, without
      limitation, all partnership interests, stock or other securities, licenses,
      distribution and other agreements, computer software development rights, leases,
      franchises, customer lists, quality control procedures, grants and rights,
      goodwill, trademarks, service marks, trade styles, trade names, patents, patent
      applications, copyrights, deposit accounts, and income tax refunds
      (collectively, the “General Intangibles”); and

     

    (iv) All
      Receivables of the Obligors including all insurance proceeds, and rights to
      refunds or indemnification whatsoever owing, together with all instruments,
      all
      documents of title representing any of the foregoing, all rights in any
      merchandising, goods, equipment, motor vehicles and trucks which any of the
      same
      may represent, and all right, title, security and guaranties with respect to
      each Receivable, including any right of stoppage in transit; and

     

    (v) All
      of
      the Obligors’ documents, instruments and chattel paper, files, records, books of
      account, business papers, computer programs and the products and proceeds of
      all
      of the foregoing Collateral set forth in clauses (i)-(iv) above.

     

    (b) “Company”
      shall mean, collectively, BSLM and all of its subsidiaries.

     

    (c) “Obligations”
      means all of the Obligors’ obligations under this Agreement, the Notes, and the
      Transaction Documents in each case, whether now or hereafter existing, voluntary
      or involuntary, direct or indirect, absolute or contingent, liquidated or
      unliquidated, whether or not jointly owed with others, and whether or not from
      time to time decreased or extinguished and later increased, created or incurred,
      and all or any portion of such obligations or liabilities that are paid, to
      the
      extent all or any part of such payment is avoided or recovered directly or
      indirectly from the Secured Parties as a preference, fraudulent transfer or
      otherwise as such obligations may be amended, supplemented, converted, extended
      or modified from time to time.

     

    (d) “Transaction
      Documents” shall have the meaning set forth in the Loan Agreement.

     

    (e) “UCC”
      means the Uniform Commercial Code, as currently in effect in the State of New
      York.

     

    
      
         
          

        

        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

     

    2. Grant
      of Security Interest.
      As an
      inducement for the Secured Parties to enter into the Loan Agreement and make
      the
      Loans to BSLM and to secure the complete and timely payment, performance and
      discharge in full, as the case may be, of all of the Obligations, the Obligors
      hereby, unconditionally and irrevocably, pledge, grant and hypothecate to the
      Secured Parties, a continuing security interest in, a first lien upon and a
      right of set-off against all of the Obligor’s right, title and interest of
      whatsoever kind and nature in and to the Collateral (the “Security
      Interest”).

     

    3. Representations
      Warranties Covenants and Agreements of the Obligors.
      Each
      Obligor represents and warrants to, and covenants and agrees with, the Secured
      Parties as follows:

     

    (a) Each
      Obligor has the requisite corporate power and authority to enter into this
      Agreement and otherwise to carry out its obligations thereunder. The execution,
      delivery and performance by the Obligor of this Agreement and the filings
      contemplated therein have been duly authorized by all necessary action on the
      part of the Obligor and no further action is required by the
      Obligor.

     

    (b) The
      Obligor represents and warrants that it has no place of business or offices
      where its respective books of account and records are kept (other than
      temporarily at the offices of its attorneys or accountants) or places where
      Collateral is stored or located, except as set forth on Schedule A attached
      hereto;

     

    (c) The
      Obligor is the sole owner of the Collateral (except for non-exclusive licenses
      granted by the Obligor in the ordinary course of business), free and clear
      of
      any liens, security interests, encumbrances, rights or claims, and is fully
      authorized to grant the Security Interest in and to pledge the Collateral.
      There
      is not on file in any governmental or regulatory authority, agency or recording
      office an effective financing statement, security agreement, license or transfer
      or any notice of any of the foregoing (other than those that have been filed
      in
      favor of the Secured Parties pursuant to this Agreement) covering or affecting
      any of the Collateral. So long as this Agreement shall be in effect, the
      Obligors shall not execute and shall not knowingly permit to be on file in
      any
      such office or agency any such financing statement or other document or
      instrument (except to the extent filed or recorded in favor of the Secured
      Party
      pursuant to the terms of this Agreement).

     

    (d) No
      part
      of the Collateral has been judged invalid or unenforceable. No written claim
      has
      been received that any Collateral or any Obligor’s use of any Collateral
      violates the rights of any third party. There has been no adverse decision
      to
      any Obligor’s claim of ownership rights in or exclusive rights to use the
      Collateral in any jurisdiction or to the Obligor’s right to keep and maintain
      such Collateral in full force and effect, and there is no proceeding involving
      said rights pending or, to the best knowledge of any Obligor, threatened before
      any court, judicial body, administrative or regulatory agency, arbitrator or
      other governmental authority.

     

    
      
         
          

        

        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (e) Each
      Obligor shall at all times maintain its books of account and records relating
      to
      the Collateral at its principal place of business and its Collateral at the
      locations set forth on Schedule A attached hereto and may not relocate such
      books of account and records or tangible Collateral unless it delivers to the
      Secured Parties at least 30 days prior to such relocation (i) written notice
      of
      such relocation and the new location thereof (which must be within the United
      States) and (ii) evidence that appropriate financing statements and other
      necessary documents have been filed and recorded and other steps have been
      taken
      to perfect the Security Interest to create in favor of the Secured Party valid,
      perfected and continuing first priority liens in the Collateral.

     

    (f) This
      Agreement creates in favor of the Secured Parties a valid security interest
      in
      the Collateral securing the payment and performance of the Obligations and,
      upon
      making the filings described in the immediately following sentence, a perfected
      first priority security interest in such Collateral. Except for the filing
      of
      financing statements on Form UCC-I under the UCC with the jurisdictions
      indicated on Schedule B, attached hereto, no authorization or approval of or
      filing with or notice to any governmental authority or regulatory body is
      required either (i) for the grant by any Obligor of, or the effectiveness of,
      the Security Interest granted hereby or for the execution, delivery and
      performance of this Agreement by the Obligors or (ii) for the perfection of
      or
      exercise by the Secured Parties of its rights and remedies
      hereunder.

     

    (g) On
      the
      date of execution of this Agreement, each Obligor will deliver to the Secured
      Party one or more executed UCC financing statements on Form UCC-1 under the
      UCC
      with respect to the Security Interest for filing with the jurisdictions
      indicated on Schedule B, attached hereto and in such other jurisdictions as
      may
      be requested by the Secured Parties.

     

    (h) The
      execution, delivery, and performance of this Agreement does not conflict with
      or
      cause a breach or default, or an event that with or without the passage of
      time
      or notice, shall constitute a breach or default, under any agreement to which
      any Obligor is a party or by which any Obligor is bound. No consent (including,
      without limitation, from stockholders or creditors of any Obligor) is required
      for any Obligor to enter into and perform its obligations
      hereunder.

     

    (i) Each
      Obligor shall at all times maintain the liens and Security Interest provided
      for
      hereunder as valid and perfected first priority liens and security interests
      in
      the Collateral in favor of the Secured Parties until this Agreement and the
      Security Interest hereunder shall be terminated pursuant to Section 11 hereof.
      Each Obligor hereby agrees to defend the same against any and all persons.
      The
      Obligors shall safeguard and protect all Collateral for the account of the
      Secured Parties. At the request of the Secured Parties, the Obligors will sign
      and deliver to the Secured Parties at any time or from time to time one or
      more
      financing statements pursuant to the UCC (or any other applicable statute)
      in
      form reasonably satisfactory to the Secured Parties and will pay the cost of
      filing the same in all public offices wherever filing is, or is deemed by the
      Secured Party to be, necessary or desirable to effect the rights and obligations
      provided for herein. Without limiting the generality of the foregoing, the
      Obligors shall pay all fees, taxes and other amounts necessary to maintain
      the
      Collateral and the Security Interest hereunder, and the Obligors shall obtain
      and furnish to the Secured Party from time to time, upon demand, such releases
      and/or subordinations of claims and liens which may be required to maintain
      the
      priority of the Security Interest hereunder.

     

    
      
         
          

        

        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

     

    (j) The
      Obligors will not transfer, pledge, hypothecate, encumber, license (except
      for
      non-exclusive licenses granted by the Obligor in the ordinary course of
      business), sell or otherwise dispose of any of the Collateral without the prior
      written consent of the Secured Parties. 

     

    (k) The
      Obligors shall keep and preserve their Equipment, Inventory, and other tangible
      Collateral in good condition, repair and order and shall not operate or locate
      any such Collateral (or cause to be operated or located) in any area excluded
      from insurance coverage. 

     

    (l) Each
      Obligor shall, within ten (10) days of obtaining knowledge thereof, advise
      the
      Secured Parties promptly, in sufficient detail, of any substantial change in
      the
      Collateral, and of the occurrence of any event which would have a material
      adverse effect on the value of the Collateral or on the Secured Party’s security
      interest therein.

     

    (m) Each
      Obligor shall promptly execute and deliver to the Secured Parties such further
      deeds, mortgages, assignments, security agreements, financing statements or
      other instruments, documents, certificates and assurances and take such further
      action as the Secured Party may from time to time request and may in its sole
      discretion deem necessary to perfect, protect or enforce its security interest
      in the Collateral including, without limitation, the execution and delivery
      of a
      separate security agreement with respect to any Obligor’s intellectual property
      (“Intellectual Property Security Agreement”) in which the Secured Parties has
      been granted a security interest hereunder, substantially in a form acceptable
      to the Secured Party, which Intellectual Property Security Agreement, other
      than
      as stated therein, shall be subject to all of the terms and conditions
      hereof.

     

    (n) Each
      Obligor shall permit the Secured Parties and its representatives and agents
      to
      inspect the Collateral at any time, and to make copies of records pertaining
      to
      the Collateral as may be requested by the Secured Parties from time to
      time.

     

    (o) Each
      Obligor will take all steps reasonably necessary to diligently pursue and seek
      to preserve, enforce and collect any rights, claims, causes of action and
      accounts receivable in respect of the Collateral.

     

    (p) Each
      Obligor shall promptly notify the Secured Parties in sufficient detail upon
      becoming aware of any attachment, garnishment, execution or other legal process
      levied against any Collateral and of any other information received by the
      Company that may materially affect the value of the Collateral, the Security
      Interest or the rights and remedies of the Secured Parties
      hereunder.

     

    (q) All
      information heretofore, herein or hereafter supplied to the Secured Parties
      by
      or on behalf of the Obligors with respect to the Collateral is accurate and
      complete in all material respects as of the date furnished.

     

     

    
      
         
          

        

        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    4. Defaults.
      The
      following events shall be “Events of Default”:

     

    (a) The
      occurrence of a Triggering Event (as defined in the Notes) under the
      Notes;

     

    (b) Any
      representation or warranty of any Obligor in this Agreement or in any other
      Transaction Document, shall prove to have been incorrect in any material respect
      when made; and

     

    (c) The
      failure by any Obligor to observe or perform any of its obligations hereunder
      or
      in any other Transaction Document, for five (5) days after receipt by such
      Obligor of notice of such failure from the Secured Party.

     

    5. Duty
      To Hold In Trust.
      Upon
      the occurrence of any Event of Default and at any time thereafter, each Obligor
      shall, upon receipt by it of any revenue, income or other sums subject to the
      Security Interest, whether payable pursuant to the Note or otherwise, or of
      any
      check, draft, note, trade acceptance or other instrument evidencing an
      obligation to pay any such sum, hold the same in trust for the Secured Parties
      and shall forthwith endorse and transfer any such sums or instruments, or both,
      to the Secured Parties for application to the satisfaction of the
      Obligations.

     

    6. Rights
      and Remedies Upon Default.
      Upon
      the occurrence of any Event of Default and at any time thereafter, the Secured
      Parties shall have the right to exercise all of the remedies conferred hereunder
      and under the Notes, and the Secured Parties shall have all the rights and
      remedies of a secured party under the UCC and/or any other applicable law
      (including the Uniform Commercial Code of any jurisdiction in which any
      Collateral is then located). Without limitation, the Secured Parties shall
      have
      the following rights and powers:

     

    (a) The
      Secured Parties shall have the right to take possession of the Collateral and,
      for that purpose, enter, with the aid and assistance of any person, any premises
      where the Collateral, or any part thereof, is or may be placed and remove the
      same, and the Obligors shall assemble the Collateral and make it available
      to
      the Secured Parties at places which the Secured Parties shall reasonably select,
      whether at the Obligor’s premises or elsewhere, and make available to the
      Secured Parties, without rent, all of the Obligor’s respective premises and
      facilities for the purpose of the Secured Parties taking possession of, removing
      or putting the Collateral in saleable or disposable form.

     

    (b) The
      Secured Parties shall have the right to operate the business of the Obligors
      using the Collateral and shall have the right to assign, sell, lease or
      otherwise dispose of and deliver all or any part of the Collateral, at public
      or
      private sale or otherwise, either with or without special conditions or
      stipulations, for cash or on credit or for future delivery, in such parcel
      or
      parcels and at such time or times and at such place or places, and upon such
      terms and conditions as the Secured Parties may deem commercially reasonable,
      all without (except as shall be required by applicable statute and cannot be
      waived) advertisement or demand upon or notice to the Obligors or right of
      redemption of the Obligors, which are hereby expressly waived. Upon each such
      sale, lease, assignment or other transfer of Collateral, the Secured Parties
      may, unless prohibited by applicable law which cannot be waived, purchase all
      or
      any part of the Collateral being sold, free from and discharged of all trusts,
      claims, right of redemption and equities of the Obligors, which are hereby
      waived and released.

     

    
      
         
          

        

        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    7. Applications
      of Proceeds.
      The
      proceeds of any such sale, lease or other disposition of the Collateral
      hereunder shall be applied first, to the expenses of retaking, holding, storing,
      processing and preparing for sale, selling, and the like (including, without
      limitation, any taxes, fees and other costs incurred in connection therewith)
      of
      the Collateral, to the reasonable attorneys’ fees and expenses incurred by the
      Secured Parties in enforcing their rights hereunder and in connection with
      collecting, storing and disposing of the Collateral, and then to satisfaction
      of
      the Obligations, and to the payment of any other amounts required by applicable
      law, after which the Secured Parties shall pay to the Obligors any surplus
      proceeds. If, upon the sale, license or other disposition of the Collateral,
      the
      proceeds thereof are insufficient to pay all amounts to which the Secured
      Parties is legally entitled, the Obligors will be liable for the deficiency,
      together with interest thereon, at the rate of 17% per annum or such lesser
      amount permitted by applicable law (the “Default Rate”), and the reasonable fees
      of any attorneys employed by the Secured Parties to collect such deficiency.
      To
      the extent permitted by applicable law, the Obligors waive all claims, damages
      and demands against the Secured Party arising out of the repossession, removal,
      retention or sale of the Collateral, unless due to the gross negligence or
      willful misconduct of the Secured Parties.

     

    8. Costs
      and Expenses.
      The
      Obligors agree to pay all out-of-pocket fees, costs, and expenses incurred
      in
      connection with any filing required hereunder, including without limitation,
      any
      financing statements, continuation statements, partial releases and/or
      termination statements related thereto or any expenses of any searches
      reasonably required by the Secured Parties. The Obligors shall also pay all
      other claims and charges which in the reasonable opinion of the Secured Party
      might prejudice, imperil or otherwise affect the Collateral or the Security
      Interest therein. The Obligors will also, upon demand, pay to the Secured Party
      the amount of any and all reasonable expenses, including the reasonable fees
      and
      expenses of its counsel and of any experts’ and agents, which the Secured Party
      may incur in connection with (i) the enforcement of this Agreement, (ii) the
      custody or preservation of, or the sale of, collection from, or other
      realization upon, any of the Collateral, or (iii) the exercise or enforcement
      of
      any of the rights of the Secured Parties under the Notes. Until so paid, any
      fees payable hereunder shall be added to the principal amount of the Notes
      and
      shall bear interest at the Default Rate.

     

    9. Responsibility
      for Collateral.
      Each
      Obligor assumes all liabilities and responsibility in connection with all
      Collateral, and the obligations of the Obligors hereunder or under the Note
      shall in no way be affected or diminished by reason of the loss, destruction,
      damage or theft of any of the Collateral or its unavailability for any
      reason.

     

    
      
         
          

        

        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    10. Security
      Interest Absolute.
      All
      rights of the Secured Parties and all Obligations of the Obligors hereunder,
      shall be absolute and unconditional, irrespective of: (a) any lack of validity
      or enforceability of this Agreement, the Notes or any agreement entered into
      in
      connection with the foregoing, or any portion hereof or thereof; (b) any change
      in the time, manner, or place of payment or performance of, or in any other
      term
      of, all or any of the Obligations, or any other amendment or waiver of or any
      consent to any departure from the Note, the Transaction Documents or any other
      agreement entered into in connection with the foregoing; (c) any exchange,
      release or nonperfection of any of the Collateral, or any release or amendment
      or waiver of or consent to departure from any other collateral for, or any
      guaranty, or any other security, for all or any of the Obligations; (d) any
      action by the Secured Parties to obtain, adjust, settle and cancel in its sole
      discretion any insurance claims or matters made or arising in connection with
      the Collateral; or (e) any other circumstance which might otherwise constitute
      any legal or equitable defense available to the Obligors, or a discharge of
      all
      or any part of the Security Interest granted hereby. Until the Obligations
      shall
      have been paid and performed in full, the rights of the Secured Parties shall
      continue even if the Obligations are barred for any reason, including, without
      limitation, the running of the statute of limitations or bankruptcy. Each
      Obligor expressly waives presentment, protest, notice of protest, demand, notice
      of nonpayment and demand for performance. In the event that at any time any
      transfer of any Collateral or any payment received by the Secured Parties
      hereunder shall be deemed by final order of a court of competent jurisdiction
      to
      have been a voidable preference or fraudulent conveyance under the bankruptcy
      or
      insolvency laws of the United States, or shall be deemed to be otherwise due
      to
      any party other than the Secured Parties, then, in any such event, the Obligors’
obligations hereunder shall survive cancellation of this Agreement, and shall
      not be discharged or satisfied by any prior payment thereof and/or cancellation
      of this Agreement, but shall remain a valid and binding obligation enforceable
      in accordance with the terms and provisions hereof. The Obligors waive all
      right
      to require the Secured Parties to proceed against any other person or to apply
      any Collateral which the Secured Parties may hold at any time, or to marshal
      assets, or to pursue any other remedy. The Obligors waive any defense arising
      by
      reason of the application of the statute of limitations to any obligation
      secured hereby.

     

    11. Term
      of Agreement.
      This
      Agreement and the Security Interest shall terminate on the date on which all
      payments under the Notes have been made in full and all other Obligations have
      been paid or discharged. Upon such termination, the Secured Parties, at the
      request and at the expense of the Obligors, will join in executing any
      termination statement with respect to any financing statement executed and
      filed
      pursuant to this Agreement.

     

    12. Power
      of Attorney; Further Assurances.
      

     

    (a) The
      Obligors authorize the Secured Parties, and does hereby make, constitute and
      appoint it, and its respective officers, agents, successors or assigns with
      full
      power of substitution, as each Obligor’s true and lawful attorney-in-fact, with
      power, in its own name or in the name of the Obligors, to, after the occurrence
      and during the continuance of an Event of Default, (i) endorse any notes,
      checks, drafts, money orders, or other instruments of payment (including
      payments payable under or in respect of any policy of insurance) in respect
      of
      the Collateral that may come into possession of the Secured Party; (ii) to
      sign
      and endorse any UCC financing statement or any invoice, freight or express
      bill,
      bill of lading, storage or warehouse receipts, drafts against debtors,
      assignments, verifications and notices in connection with accounts, and other
      documents relating to the Collateral; (iii) to pay or discharge taxes, liens,
      security interests or other encumbrances at any time levied or placed on or
      threatened against the Collateral; (iv) to demand, collect, receipt for,
      compromise, settle and sue for monies due in respect of the Collateral; and
      (v)
      generally, to do, at the option of the Secured Party, and at the Obligors’
expense, at any time, or from time to time, all acts and things which the
      Secured Party deems necessary to protect, preserve and realize upon the
      Collateral and the Security Interest granted therein in order to effect the
      intent of this Agreement, the Note and the Transaction Documents all as fully
      and effectually as the Obligors might or could do; and each Obligor hereby
      ratifies all that said attorney shall lawfully do or cause to be done by virtue
      hereof. This power of attorney is coupled with an interest and shall be
      irrevocable for the term of this Agreement and thereafter as long as any of
      the
      Obligations shall be outstanding.

     

    
      
         
          

        

        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (b) On
      a
      continuing basis, each Obligor will make, execute, acknowledge, deliver, file
      and record, as the case may be, in the proper filing and recording places in
      any
      jurisdiction, including, without limitation, the jurisdictions indicated on
      Schedule B, attached hereto, all such instruments, and take all such action
      as
      may reasonably be deemed necessary or advisable, or as reasonably requested
      by
      the Secured Parties, to perfect the Security Interest granted hereunder and
      otherwise to carry out the intent and purposes of this Agreement, or for
      assuring and confirming to the Secured Party the grant or perfection of a
      security interest in all the Collateral.

     

    (c) Each
      Obligor hereby irrevocably appoints the Secured Parties as the Company’s
      attorney-in-fact, with full authority in the place and stead of the Obligor
      and
      in the name of the Obligor, from time to time in the Secured Party’s discretion,
      to take any action and to execute any instrument which the Secured Parties
      may
      deem necessary or advisable to accomplish the purposes of this Agreement,
      including the filing, in its sole discretion, of one or more financing or
      continuation statements and amendments thereto, relative to any of the
      Collateral without the signature of the Obligor where permitted by
      law.

     

    13. Notices.
      All
      notices, requests, demands and other communications hereunder shall be in
      writing, with copies to all the other parties hereto, and shall be deemed to
      have been duly given when (i) if delivered by hand, upon receipt, (ii) if sent
      by facsimile, upon receipt of proof of sending thereof, (iii) if sent by
      nationally recognized overnight delivery service (receipt requested), the next
      business day or (iv) if mailed by first-class registered or certified mail,
      return receipt requested, postage prepaid, four days after posting in the U.S.
      mails, in each case if delivered to the following addresses:

     

     

    
      
        	
                If
                  to any Obligor: 

              	 4440
                Arville Street # 6
	 	 Las Vegas, NV 89103
	 	 Facsimile No.: (702)
                222-9126
	 	 Attention:
                Secretary

      

    

     

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

    

    14. Other
      Security.
      To the
      extent that the Obligations are now or hereafter secured by property other
      than
      the Collateral or by the guarantee, endorsement or property of any other person,
      firm, corporation or other entity, then the Secured Parties shall have the
      right, in its sole discretion, to pursue, relinquish, subordinate, modify or
      take any other action with respect thereto, without in any way modifying or
      affecting any of the Secured Parties’ rights and remedies
      hereunder.

     

    
      
         
          

        

        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    15. Miscellaneous.

     

    (a) No
      course
      of dealing between the Obligors and the Secured Parties, nor any failure to
      exercise, nor any delay in exercising, on the part of the Secured Parties,
      any
      right, power or privilege hereunder or under the Notes shall operate as a waiver
      thereof; nor shall any single or partial exercise of any right, power or
      privilege hereunder or thereunder preclude any other or further exercise thereof
      or the exercise of any other right, power or privilege.

     

    (b) All
      of
      the rights and remedies of the Secured Parties with respect to the Collateral,
      whether established hereby or by the Note or by any other agreements,
      instruments or documents or by law shall be cumulative and may be exercised
      singly or concurrently.

     

    (c) This
      Agreement constitutes the entire agreement of the parties with respect to the
      subject matter hereof and is intended to supersede all prior negotiations,
      understandings and agreements with respect thereto. Except as specifically
      set
      forth in this Agreement, no provision of this Agreement may be modified or
      amended except by a written agreement specifically referring to this Agreement
      and signed by the parties hereto.

     

    (d) In
      the
      event that any provision of this Agreement is held to be invalid, prohibited
      or
      unenforceable in any jurisdiction for any reason, unless such provision is
      narrowed by judicial construction, this Agreement shall, as to such
      jurisdiction, be construed as if such invalid, prohibited or unenforceable
      provision had been more narrowly drawn so as not to be invalid, prohibited
      or
      unenforceable. If, notwithstanding the foregoing, any provision of this
      Agreement is held to be invalid, prohibited or unenforceable in any
      jurisdiction, such provision, as to such jurisdiction, shall be ineffective
      to
      the extent of such invalidity, prohibition or unenforceability without
      invalidating the remaining portion of such provision or the other provisions
      of
      this Agreement and without affecting the validity or enforceability of such
      provision or the other provisions of this Agreement in any other
      jurisdiction.

     

    (e) No
      waiver
      of any breach or default or any right under this Agreement shall be considered
      valid unless in writing and signed by the party giving such waiver, and no
      such
      waiver shall be deemed a waiver of any subsequent breach or default or right,
      whether of the same or similar nature or otherwise.

     

    (f) This
      Agreement shall be binding upon and inure to the benefit of each party hereto
      and its successors and assigns.

     

    (g) Each
      party shall take such further action and execute and deliver such further
      documents as may be necessary or appropriate in order to carry out the
      provisions and purposes of this Agreement.

     

    
      
         
          

        

        
        

      

      
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    (h) This
      Agreement shall be construed in accordance with the laws of the State of New
      York except to the extent the validity, perfection or enforcement of a security
      interest hereunder in respect of any particular Collateral which are governed
      by
      a jurisdiction other than the State of New York in which case such law shall
      govern. Each of the parties hereto irrevocably submits to the exclusive
      jurisdiction of any New York State or United States Federal court sitting in
      the
      county of New York over any action or proceeding arising out of or relating
      to
      this Agreement, and the parties hereto hereby irrevocably agree that all claims
      in respect of such action or proceeding may be heard and determined in such
      New
      York State or Federal court. The parties hereto agree that a final judgment
      in
      any such action or proceeding shall be conclusive and may be enforced in other
      jurisdictions by suit on the judgment or in any other inner provided by law.
      The
      parties hereto further waive any objection to venue in the State of New York
      and
      any objection to an action or proceeding in the State of New York on the basis
      of forum non convenient.

     

    (i) EACH
      PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF
      ANY
      CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. THE SCOPE
      OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY DISPUTES THAT MAY
      BE
      FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT,
      INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS
      AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES
      THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO A
      BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY RELIED ON THIS WAIVER IN
      ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY ON THIS
      WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND
      REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
      SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS TO A JURY TRIAL FOLLOWING
      SUCH CONSULTATION. THIS WAIVER IS IRREVOCABLE, MEANING THAT, NOTWITHSTANDING
      ANYTHING HEREIN TO THE CONTRARY, IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
      WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS
      AND
      SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF LITIGATION,
      THIS
      AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
      COURT.

     

    (j) This
      Agreement may be executed in any number of counterparts, each of which when
      so
      executed shall be deemed to be an original and, all of which taken together
      shall constitute one and the same Agreement in the event that any signature
      is
      delivered by facsimile transmission, such signature shall create a valid binding
      obligation of the party executing (or on whose behalf such signature is
      executed) the same with the same force and effect as if such facsimile signature
      were the original thereof.

     

    ************

     

    
      
         
          

        

        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Security Agreement to
      be
      duly executed on the day and year first above written.

    

     

    
 

    
      	 BIO SOLUTIONS MANUFACTURING,
              INC.
	 
	 
	
               By:/s/
                David S. Bennett

            
	 Name: David S. Bennett
	 Title: President
	 
	 
	 BIO SOLUTIONS PRODUCTION,
              INC.
	 
	 
	
               By:/s/
                David S. Bennett

            
	 Name: David S. Bennett
	 Title: President
	 
	 
	 BIO EXTRACTION SERVICES,
              INC.
	 
	 
	
               By:/s/
                David S. Bennett

            
	 Name: David S. Bennett
	 Title:
              President

    

     

        

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK

    INVESTOR
      SIGNATURE PAGES FOLLOWS]

     

    

     

    

     

    

     

     

     

    
      
         
          

        

        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    SECURED
      PARTIES:

     

    [INTENTIONALLY
      OMITTED]

     

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    SCHEDULE
      A

    

    Principal
      Place of Business of the Obligors:

    

    440
      S.
      Arville, #6, Las Vegas, NV 

    1161
      James Street, Hattiesburg, MS

    

    

    

    Locations
      Where Collateral is Located or Stored:

    

    440
      S.
      Arville, #6, Las Vegas, NV 

    1161
      James Street, Hattiesburg, MS

    
      
         
          

        

        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    SCHEDULE
      B

    

    
      

Jurisdictions:

     

    New
      York

     

    Nevada

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