Document:

DEBENTURE

     

    THE
SECURITIES OFFERED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF
ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY SECTION 3(b) OF
THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER (THE "1933 ACT"), AND RULE 504 OF REGULATION D
PROMULGATED THEREUNDER AND SECTION 551.23(8)(g) OF THE WISCONSIN UNIFORM
SECURITIES LAW.

    

    THE
SECURITIES OFFERED HEREBY ARE OFFERED PURSUANT TO AN EXEMPTION FOR OFFERINGS TO
ACCREDITED INVESTORS ONLY UNDER THE RULES OF THE WISCONSIN DEPARTMENT OF
FINANCIAL INSTITUTIONS, SECURITIES DIVISION.  THE WISCONSIN DEPARTMENT
OF FINANCIAL INSTITUTIONS, SECURITIES DIVISION, HAS NEITHER REVIEWED NOR
APPROVED ITS FORM OR CONTENT.  THE SECURITIES DESCRIBED HEREIN MAY
ONLY BE PURCHASED BY "ACCREDITED INVESTORS" AS DEFINED BY RULE 504 OF SEC
REGULATION D AND THE RULES OF THE WISCONSIN DEPARTMENT OF FINANCIAL
INSTITUTIONS, SECURITIES DIVISION.

    

    
      	
              Series  A-3

            	
              US
      $40,000

            

    

    

    AMERICAN
SCIENTIFIC RESOURCES, INC.

    

    8%
CONVERTIBLE REDEEMABLE DEBENTURE

    DUE
SEPTEMBER 29, 2010

     

    THIS DEBENTURE of American Scientific
Resources, Inc. ("Company"), designated
as its Series A 8% Convertible Redeemable Debenture Due September 29,
2010.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    FOR VALUE RECEIVED, the Company
promises to pay to Blaydon Capital, LLC and its authorized successors and
permitted assigns ("Holder"), the
aggregate principal face amount of forty thousand dollars (U.S. $40,000) on
September 29, 2010 ("Maturity Date") and
to pay interest on the principal amount outstanding hereunder at the rate of 8%
per annum commencing on October 29, 2008.  Interest will be paid to
the Holder in whose name this Debenture is registered on the records of the
Company regarding registration and transfers of this Debenture ("Debenture Register");
provided, however, that the Company's obligation to a transferee of this
Debenture arises only if such transfer, sale or other disposition is made in
accordance with the terms and conditions of the Securities Sale Agreement dated
as of September 29, 2008 between the Company and the Holder ("Sale
Agreement").  The principal of, and interest on, this Debenture
are payable at 200 South Executive Drive, Suite 101, Brookfield, WI 53005
initially, and if changed, last appearing on the Debenture Register of the
Company as designated in writing by the Holder hereof from time to
time.  The Company will pay the outstanding principal due upon this
Debenture before or on the Maturity Date, less any amounts required by law to be
deducted or withheld, to the Holder of this Debenture by check if paid more than
10 days prior to the Maturity Date or, if paid 10 days or less prior to the
Maturity Date, by wire transfer and addressed to such Holder at the last address
appearing on the Debenture Register.  The forwarding of such check or
wire transfer shall constitute a payment of outstanding principal hereunder and
shall satisfy and discharge the liability for principal on this Debenture to the
extent of the sum represented by such check or wire
transfer.  Interest shall be payable in Common Stock (as defined
below) pursuant to paragraph 4(b) herein.

    

    This Debenture is issued pursuant to
the Sale Agreement and the Company hereby confirms that all of the
representations and warranties of the Company set forth in the Sale Agreement
are true and correct as of the date hereof

    

    This Debenture is subject to the
following additional provisions:

    

    1.           This
Debenture is issuable or assignable to a Holder in denominations of Five
Thousand Dollars (US$5,000) and integral multiples thereof.  This
Debenture is exchangeable for an equal aggregate principal amount of Debentures
of different authorized denominations, as requested by the Holders surrendering
the same, but not less than U.S. $5,000.  No service charge will be
made for such registration or transfer or exchange, except that Holder shall pay
any tax or other governmental charges payable in connection
therewith.

    

    2.           The
Company shall be entitled to withhold from all payments any amounts required to
be withheld under applicable laws.

    

    3.           This
Debenture may be transferred or exchanged only in compliance with the Securities
Act of 1933, as amended ("Act") and applicable
state securities laws.  Prior to due presentment for transfer of this
Debenture, the Company and any agent of the Company may treat the person in
whose name this Debenture is duly registered on the Company's Debenture Register
as the owner hereof for all other purposes, whether or not this Debenture be
overdue, and neither the Company nor any such agent shall be affected or bound
by notice to the contrary.  Any Holder of this Debenture electing to
exercise the right of conversion set forth in Section 4(a) hereof, in addition
to the requirements set forth in Section 4(a), and any prospective transferee of
this Debenture, are also required to give the Company written confirmation that
this Debenture is being converted ("Notice of
Conversion"). The date of receipt (including receipt by telecopy) of such
Notice of Conversion shall be the Conversion Date.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    4.           (a)           The
Holder of this Debenture is entitled, at its option, at any time following
delivery of this Debenture, to convert all or any
amount over $100 of the principal face amount of this Debenture then outstanding
into shares of the Company's common stock (the "Common Stock")
without restrictive legend of any nature, at a conversion price ("Conversion Price")
for each share of Common Stock equal to 60% of the lowest closing bid price of
the Common Stock as reported on the National Quotations Bureau Pink Sheets on
which the Company’s shares are traded or any exchange upon which the Common
Stock may be traded in the future ("Exchange") for (i)
any of the three trading days prior to the day upon which a Notice of Conversion
is received by the Company, provided such Notice of Conversion is delivered by
fax to the Company between the hours of 4 P.M. Eastern Standard or Daylight
Savings Time and 7 P.M. Eastern Standard or Daylight Savings Time, or (ii) the
trading day on which a Notice of Conversion is received by the Company provided
such Notice of Conversion is delivered by fax to the Company between the hours
of 4 P.M. Eastern Standard or Daylight Savings Time and 7 P.M. Eastern Standard
or Daylight Savings Time.  If the number of resultant shares of Common
Stock would as a matter of law or pursuant to regulatory authority require the
Company to seek shareholder approval of such issuance, the Company shall, as
soon as practicable, take the necessary steps to seek such
approval.  Such conversion shall be effectuated by the Company
delivering the shares of Common Stock to the Holder within 3 business days of
receipt by the Company of the Notice of Conversion.  Once the Holder
has received such shares of Common Stock, the Holder shall surrender this
Debentures to the Company, executed by the Holder evidencing such Holder's
intention to convert this Debenture or a specified portion hereof, and
accompanied by proper assignment hereof in blank.  Accrued but unpaid
interest shall be subject to conversion.  No fractional shares or
scrip representing fractions of shares will be issued on conversion, but the
number of shares issuable shall be rounded to the nearest whole
share.

    

    (b)           Interest
on any unpaid principal balance of this Debenture shall be paid at the rate of
8% per annum.  Interest shall be paid by the Company in Common Stock
("Interest Shares").  The Holder may, at any time, send in a Notice of
Conversion to the Company for Interest Shares based on the formula provided in
Section 4(a) above.  The dollar amount converted into Interest Shares
shall be all or a portion of the accrued interest calculated on the unpaid
principal balance of this Debenture to the date of such
notice.  Interest Shares shall be issued under the exemption from
registration provided by Rule 504 of Regulation D.

    

    (c)           At
any time the Company shall have the option to redeem this Debenture and pay to
the Holder 150% of the unpaid principal amount of this Debenture, in full. The
Company shall give the Holder 5 days written notice and the Holder during such 5
days shall have the option to convert this Debenture or any part thereof into
shares of Common Stock at the Conversion Price set forth in paragraph 4(a) of
this Debenture.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (d)           Upon
(i) a transfer of all or substantially all of the assets of the Company to any
person in a single transaction or series of related transactions, (ii) a
reclassification, capital reorganization or other change or exchange of
outstanding shares of the Common Stock, or (iii) any consolidation or merger of
the Company with or into another person or entity in which the Company is not
the surviving entity (other than a merger which is effected solely to change the
jurisdiction of incorporation of the Company and results in a reclassification,
conversion or exchange of outstanding shares of Common Stock solely into shares
of Common Stock) (each of items (i), (ii) and (iii) being referred to as a "Sale
Event"), then, in each case, the Company shall, upon request of the Holder,
redeem this Debenture in cash for 150% of the principal amount, plus accrued but
unpaid interest through the date of redemption, or at the election of the
Holder, such Holder may convert the unpaid principal amount of this Debenture
(together with the amount of accrued but unpaid interest) into shares of Common
Stock immediately prior to such Sale Event at the Conversion Price.

    

    (e)           In
case of any Sale Event in connection with which this Debenture is not redeemed
or converted, the Company shall cause effective provision to be made so that the
Holder of this Debenture shall have the right thereafter, by converting this
Debenture, to purchase or convert this Debenture into the kind and number of
shares of stock or other securities or property (including cash) receivable upon
such reclassification, capital reorganization or other change, consolidation or
merger by a holder of the number of shares of Common Stock that could have been
purchased upon exercise of the Debentures and at the same Conversion Price, as
defined in this Debenture, immediately prior to such Sale Event. The foregoing
provisions shall similarly apply to successive Sale Events. If the consideration
received by the holders of Common Stock is other than cash, the value shall be
as determined by the Board of Directors of the Company or successor person or
entity acting in good faith.

    

    5.           This
Debenture is secured by all assets of the Company.

    

    6.           No
provision of this Debenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of, and interest on,
this Debenture at the time, place, and rate, and in the form, herein
prescribed.

    

    7.           The
Company hereby expressly waives demand and presentment for payment, notice of
non-payment, protest, notice of protest, notice of dishonor, notice of
acceleration or intent to accelerate, and diligence in taking any action to
collect amounts called for hereunder and shall be directly and primarily liable
for the payment of all sums owing and to be owing hereto.

    

    8.           The
Company agrees to pay all costs and expenses, including reasonable attorneys'
fees, which may be incurred by the Holder in collecting any amount due under
this Debenture.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    9.           If
one or more of the following described "Events of Default" shall occur and
continue for five (5) days, unless a different time frame is noted
below:

    

    (a)           The
Company shall default in the payment of principal or interest on this Debenture
or any other debenture issued pursuant to the Sale Agreement; or

    

    (b)           Any
of the representations or warranties made by the Company herein, in the Sale
Agreement, or in any certificate or financial or other written statements
heretofore or hereafter furnished by or on behalf of the Company in connection
with the execution and delivery of this Debenture or the Sale Agreement shall be
false or misleading in any material respect at the time made or the Company
shall violate any covenants in the Sale Agreement including but not limited to
Section 5(b) or 10; or

    

    (c)           The
Company shall fail to perform or observe, in any material respect, any other
covenant, term, provision, condition, agreement or obligation of the Company
under this Debenture or the Sale Agreement; or

    

    (d)           The
Company shall (1) become insolvent; (2) admit in writing its inability to pay
its debts generally as they mature; (3) make an assignment for the benefit of
creditors or commence proceedings for its dissolution; (4) apply for or consent
to the appointment of a trustee, liquidator or receiver for its or for a
substantial part of its property or business; (5) file a petition
for  bankruptcy relief, consent to the filing of such petition or have
filed against it an involuntary petition for bankruptcy relief, all under
federal or state laws as applicable; or

    

    (e)           A
trustee, liquidator or receiver shall be appointed for the Company or for a
substantial part of its property or business without its consent and shall not
be discharged within thirty (30) days after such appointment; or

    

    (f)           Any
governmental agency or any court of competent jurisdiction at the instance of
any governmental agency shall assume custody or control of the whole or any
substantial portion of the properties or assets of the Company; or

    

    (g)           One
or more money judgments, writs or warrants of attachment, or similar process, in
excess of One Hundred Thousand Dollars ($100,000) in the aggregate, shall be
entered or filed against the Company or any of its properties or other assets
and shall remain unpaid, unvacated, unbonded or unstayed for a period of fifteen
(15) days or in any event later than five (5) days prior to the date of any
proposed sale thereunder; or

    

    (h)           Bankruptcy,
reorganization, insolvency or liquidation proceedings, or other proceedings for
relief under any bankruptcy law or any law for the relief of debtors shall be
instituted voluntarily by or involuntarily against the Company; or

    

    (i)           If
listed, the Company shall have its Common Stock delisted from an Exchange or, if
the Common Stock trades on an Exchange, then trading in the Common Stock shall
be suspended for more than five (5) consecutive days; or

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (j)

            	
              The
      Company shall not deliver or cause to be delivered to the Holder the
      Common Stock pursuant to paragraph 4 herein without restrictive legend
      within five (5) business days of its receipt of a Notice of Conversion;
      or

            

    

    

    
      	
               
      

            	
              (k)

            	
              The
      Company shall not, on or prior to October 29, 2008, increase its
      authorized Common Stock and deliver to Robert C. Laskowski, escrow agent
      (the “Escrow Agent’), such number of additional shares of the Common Stock
      as shall cause the number of shares of the Common Stock held by the Escrow
      Agent to equal the outstanding amount of this Debenture at such date,
      divided by the best bid price for the Common Stock shown on the pink
      sheets on such date, times four.

            

    

    

    Then, or
at any time thereafter, unless cured, and in each and every such case, unless
such Event of Default shall have been waived in writing by the Holder (which
waiver shall not be deemed to be a waiver of any subsequent default) at the
option of the Holder and in the Holder's sole discretion, the Holder may
consider 150% of all amounts outstanding under this Debenture immediately due
and payable, without presentment, demand, protest or (further) notice of any
kind (other than notice of acceleration), all of which are hereby expressly
waived, anything herein or in any note or other instruments contained to the
contrary notwithstanding, and the Holder may immediately, and without expiration
of any period of grace, enforce any and all of the Holder's rights and remedies
provided herein or any other rights or remedies afforded by law.  Upon
an Event of Default, interest shall be accrue at a default interest rate of 24%
per annum or, if such rate is usurious or not permitted by current law, then at
the highest rate of interest permitted by law.

    

    10.           This
Debenture represents a prioritized obligation of the
Company.  However, no recourse shall be had for the payment of the
principal of, or the interest on, this Debenture, or for any claim based hereon,
or otherwise in respect hereof, against any incorporator, shareholder, officer
or director, as such, past, present or future, of the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the
issuance hereof, expressly waived and released.

    

    11.           In
case any provision of this Debenture is held by a court of competent
jurisdiction to be excessive in scope or otherwise invalid or unenforceable,
such provision shall be adjusted rather than voided, if possible, so that it is
enforceable to the maximum extent possible, and the validity and enforceability
of the remaining provisions of this Debenture will not in any way be affected or
impaired thereby.

    

    12.           This
Debenture and the agreements referred to in this Debenture constitute the full
and entire understanding and agreement between the Company and the Holder with
respect to the subject matter hereof.  Neither this Debenture nor any
term hereof may be amended, waived, discharged or terminated other than by a
written instrument signed by the Company and the Holder.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    13.           This
Debenture shall be governed by and construed in accordance with the laws of
Wisconsin applicable to contracts made and wholly to be performed within the
State of Wisconsin and shall be binding upon the successors and assigns of each
party hereto.  The Holder and the Company hereby mutually waive trial
by jury and consent to exclusive jurisdiction and venue in the courts of the
State of Wisconsin.  At the Holder's election, any dispute between the
parties may be arbitrated rather than litigated in the courts, before the
American Arbitration Association in Milwaukee, Wisconsin and pursuant to its
rules.  Upon demand made by the Holder to the Company, the Company
agrees to submit to and participate in such arbitration.  This
Agreement may be executed in counterparts, and the facsimile transmission of an
executed counterpart to this Agreement shall be effective as an
original.

     

    {REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK}

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the Company has
caused this Debenture to be duly executed by an officer thereunto duly
authorized.

     

    Dated: September
29, 2008

     

    
      
        
          
            
              
                
                  	
                          AMERICAN
      SCIENTIFIC RESOURCES,
      INC.

                        
	 
      	 
      
	
                          By:

                        	
                          

                        
	
                          Name:  Christopher
      F. Tirotta, MD, MBA

                        
	
                          Title:
      CEO/Chairman of the
BoardSECURITIES SALE
AGREEMENT

    

    THIS SECURITIES SALE AGREEMENT, dated
as of September 29, 2008 ("Agreement"), by and
between Blaydon Capital,
LLC, a limited liability company organized under the laws of the State of
Wisconsin ("Buyer") and American Scientific Resources, Inc.,
a Nevada corporation (“Seller”).

    

    Pursuant to and in reliance upon the
exemption from registration afforded by Rule 504 promulgated under Regulation D
by the Securities and Exchange Commission ("SEC"), under the
Securities Act of 1933, as amended, Seller is agreeing to sell, and Buyer shall
have the right to purchase, in a private placement, up to $999,999 principal
amount of Seller’s 8% Series A Convertible Redeemable Debentures (the “Debentures”).  Capitalized
terms used herein and not defined shall have the meanings given to them in Rule
504 and Regulation D.

    

    THE
SECURITIES OFFERED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF
ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY SECTION 3(b) OF
THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER (THE "1933 ACT"), AND RULE 504 OF REGULATION D
PROMULGATED THEREUNDER AND SECTION 551.23(8)(g) OF THE WISCONSIN UNIFORM
SECURITIES LAW.

    

    THE
SECURITIES OFFERED HEREBY ARE OFFERED PURSUANT TO AN EXEMPTION FOR OFFERINGS TO
ACCREDITED INVESTORS ONLY UNDER THE RULES OF THE WISCONSIN DEPARTMENT OF
FINANCIAL INSTITUTIONS, SECURITIES DIVISION.  THE WISCONSIN DEPARTMENT
OF FINANCIAL INSTITUTIONS, SECURITIES DIVISION, HAS NEITHER REVIEWED NOR
APPROVED ITS FORM OR CONTENT.  THE SECURITIES DESCRIBED HEREIN MAY
ONLY BE PURCHASED BY "ACCREDITED INVESTORS" AS DEFINED BY RULE 504 OF SEC
REGULATION D AND THE RULES OF THE WISCONSIN DEPARTMENT OF FINANCIAL
INSTITUTIONS, SECURITIES DIVISION.

    

    1.           Right to Subscribe; Purchase
Price.

    

    (a)           Subscription.  The
Seller agrees that the Buyer shall have a right of first refusal on the same the
terms set forth for in that certain Right of First Refusal Agreement between the
Seller and The Tripod Group, LLC, dated as of February 28, 2008 to subscribe for
and purchase up to $999,999 principal amount of the Debentures at a purchase
price equal to the face amount of each Debenture ("Purchase
Price").  Each Debenture will be substantially in the form of
the Debenture attached as Exhibit
A hereto.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (b)           Payment.  The Purchase
Price shall be payable at a Closing in accordance with the terms and conditions
of Section 2 below.

    

    (c)           Closing. There shall be one or more
closings, at which the Debentures will be purchased (“Closing”).  Subject
to the satisfaction of the conditions set forth in Sections 7, 8 and 10 below,
each Closing shall take place when (i) Seller delivers the original executed
Debenture to the Buyer, (ii) Seller delivers all accompanying transaction
documents including appropriate resolutions of its Board of Directors to Buyer’s
counsel, (iii) Seller delivers the Conversion Shares (as hereinafter defined)
relating to such Debenture to the Escrow Agent (as hereinafter defined) and (iv)
Buyer delivers the Purchase Price for the Debenture to the Escrow
Agent.

    

    2.           Buyer Representations and
Covenants; Access to
Information                          .

    

    In connection with the purchase and
sale of the Debentures, Buyer represents and warrants to, and covenants and
agrees with, Seller as follows:

    

    (a)           Buyer
is not, and on the closing date will not be, an affiliate of
Seller;

    

    (b)           Buyer
is an “accredited investor” as defined in Rule 501 of Regulation D promulgated
under the 1933 Act, and will purchasing Debentures for its own account and Buyer
is qualified to purchase the Debentures under the laws of the State of
Wisconsin;

    

    (c)           All
offers and sales of Debentures by Buyer shall be made in compliance with any
applicable securities laws of any state or local authority having jurisdiction
and in accordance with Rule 504, as applicable, of Regulation D or pursuant to
registration of securities under the 1933 Act or pursuant to an exemption from
registration;

    

    (d)           Buyer
understands that the Debentures are not registered under the 1933 Act and are
being offered and sold to it in reliance on specific exemptions from the
registration requirements of Federal and State securities laws, and that Seller
is relying upon the truth and accuracy of the representations, warranties,
agreements, acknowledgments and understandings of Buyer set forth herein in
order to determine the applicability of such exemptions and the suitability of
Buyer and any subsequent purchaser from Buyer to acquire the
Debentures;

    

    (e)           Buyer
shall comply with Rule 504 promulgated under Regulation D and all state
securities laws and regulations of the State of Wisconsin;

    

    (f)           Buyer
has the full right, power and authority to enter into this Agreement and to
consummate the transactions contemplated herein.  This Agreement has
been duly authorized, validly executed and delivered on behalf of Buyer and is a
valid and binding agreement in accordance with its terms, subject to general
principles of equity and to bankruptcy or other laws affecting the enforcement
of creditors' rights generally;

    
      
         

      

      
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    (g)           The
execution and delivery of this Agreement and the consummation of the purchase of
Debentures and the transactions contemplated by this Agreement do not and will
not conflict with or result in a breach by Buyer of any of the terms or
provisions of, or constitute a default under, the articles of incorporation or
by-laws (or similar constitutive documents) of Buyer or any indenture, mortgage,
deed of trust, or other material agreement or instrument to which Buyer is a
party or by which it or any of its properties or assets are bound, or any
existing applicable law, rule or regulation of the United States or any State
thereof or any applicable decree, judgment or order of any Federal or State
court, Federal or State regulatory body, administrative agency or other United
States governmental body having jurisdiction over Buyer or any of its properties
or assets;

    

    (h)           All
invitations, offers and sales of, or in respect of, all or any portion of the
Debentures or the Common Stock (as hereinafter defined) into which the
Debentures are convertible by Buyer, and any distribution by Buyer of any
documents relating to any invitation, offer or sale by it of all or any portion
of the Debentures or such Common Stock will be in compliance with applicable
laws and regulations, will be made in such a manner that no prospectus need be
filed and no other filing need be made by Seller with any regulatory authority
or stock exchange in any country or any political sub-division of any country,
and Buyer will make no misrepresentations nor omissions of material fact in the
invitation, offer, sale or resale of the Debentures or such Common
Stock;

    

    (i)           The
Buyer has been advised to consult its own legal and tax advisors with respect to
applicable resale restrictions and applicable tax considerations and it is
solely responsible (and the Seller is not in any way responsible) for compliance
with applicable resale restrictions and applicable tax legislation;

    

    (j)           Buyer
understands that no Federal or State or foreign government agency has passed on
or made any recommendation or endorsement of the Debentures;

    

    (k)           Buyer
has had an opportunity to receive and review all material information and
financial data and to discuss with the officers of Seller all matters relating
to the securities, financial condition, operations and prospects of Seller and
any questions raised by Buyer have been answered to Buyer's
satisfaction.

    

    (l)           Buyer
acknowledges that the purchase of the Debentures involves a high degree of
risk.  Buyer has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
purchasing the Debentures. Buyer understands that the Debentures are not being
registered under the 1933 Act, or under any state securities laws, and
therefore, Buyer must bear the economic risk of this investment for an
indefinite period of time;

    

    (m)           Buyer
is not a "10-percent Shareholder" (as defined in Section 871(h)(3)(B)of the U.S.
Internal Revenue Code) of Seller;

    

    (n)           Buyer
acknowledges and agrees that the transactions contemplated by this Agreement
have taken place solely and exclusively within the State of Wisconsin;
and

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    (o)           Buyer
has received true copies of the Form D in the form and content which the Seller
represents will be filed with the SEC.

    

    3.           Seller Representations and
Covenants.

    

    (a)           Seller
is a corporation duly organized and validly existing under the laws of the State
of Nevada and is in good standing under such laws.  The Seller has all
requisite corporate power and authority to own, lease and operate its properties
and assets, and to carry on its business as presently conducted.  The
Seller is qualified to do business as a foreign corporation in each jurisdiction
in which the ownership of its property or the nature of its business requires
such qualification, except where failure to so qualify would not have a material
adverse effect on the Seller.  As set forth in Exhibit B, being a
copy of the Resolution of the Board of Directors of the Seller, the Seller has
the full right, power and authority to enter into this Agreement and to
consummate the transaction contemplated herein.

    

    (b)           The
Seller's capital structure consists of 250,000,000 authorized shares of common
stock, par value $0.0001 per share (the “Common Stock”), of
which 220,739,928 shares are issued and outstanding.

    

    (c)           Seller
has outstanding 855,000 warrants to purchase shares of Common Stock at $0.10 per
share and 855,000 warrants to purchase shares of Common Stock at $0.25 per
share.

    

    (d)           Seller
has outstanding $855,000 principal amount of convertible promissory notes, which
are convertible into shares of Common Stock at $0.10 per share and at other
prices under certain circumstances.

    

    (e)           The
execution and delivery of this Agreement do not, and the consummation of the
transactions contemplated hereby will not, conflict with or result in any
violation of, or default (with or without notice or lapse of time, or both), or
give rise to a right of termination, cancellation or acceleration of any
obligation or to a loss of a material benefit, under any provision of the
Articles of Incorporation (and any amendments thereto), By-Laws, Stockholders
Agreements (and any amendments thereto) of the Seller or any material mortgage,
indenture, lease or other agreement or instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law ordinance, rule or
regulation applicable to the Seller, its properties or assets.  There
is no action, suit or proceeding pending, or to the knowledge of the Seller,
threatened against the Seller, before any court or arbitrator or any government
body, agency or official, which would have a material adverse effect on Seller’s
operations or financial condition.

    

    (f)           The
Seller is not subject to the reporting requirements of Sections 13 or 15(d) of
the Securities and Exchange Act and is not an investment company or a
developmental stage company that either has no specific business plan or no
purpose. The Debentures and Common Stock to be issued upon conversion of the
Debentures ("Conversion Shares"),
when issued, will be issued in compliance with all applicable U.S. federal and
state securities laws.  The Seller understands and acknowledges that,
in certain circumstances, the issuance of the Conversion Shares could dilute the
ownership interests of other stockholders of the Seller.  The
execution and delivery by the Seller of this Agreement and the issuance of the
Conversion Shares will not contravene or constitute a default under any
provision of applicable law or regulation.  The Seller is in
compliance with and conforms to all statutes, laws, ordinances, rules,
regulations, orders, restrictions and all other legal requirements of any
domestic or foreign government or any instrumentality thereof having
jurisdiction over the conduct of its businesses or the ownership of its
properties.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    (g)           There
is no fact known to the Seller that has not been publicly disclosed by the
Seller or disclosed in writing to the Buyer which could reasonably be expected
to have a material adverse effect on the condition (financial or otherwise) or
in the earnings, business affairs, properties or assets of the Seller, or could
reasonably be expected to materially and adversely affect the ability of the
Seller to perform its obligations pursuant to this Agreement.  The
information furnished by the Seller to Buyer for purposes of or in connection
with this Agreement, or any transaction contemplated hereby, does not contain
any untrue statement of material fact or omit to state a material fact necessary
in order to make the statements contained therein, in light of the circumstances
under which they are made, not misleading.

    

    (h)           No
consent, approval or authorization of or designation, declaration or filing with
any governmental authority on the part of the Seller is required in connection
with the valid execution and delivery of this Agreement, or the offer, sale or
issuance of the Debentures or the Conversion Shares, or the consummation of any
other transaction contemplated hereby, except the filing with the SEC of Form
D.

    

    (i)           There
is no action, proceeding or investigation pending, or to the Seller's knowledge,
threatened, against the Seller which might result, either individually or in the
aggregate, in any material adverse change in the business, prospects,
conditions, affairs or operations of the Seller.  The Seller is not a
party to or subject to the provisions of any order, writ, injunction, judgment
or decree of any court or government agency or instrumentality.  There
is no action, suit, proceeding or investigation by the Seller currently pending
or which the Seller intends to initiate.  The SEC has not issued any
order suspending trading in the Seller's Common Stock and the Seller is not
under investigation by the SEC or the National Association of Securities
Dealers, and there are no proceedings pending or threatened before either
regulatory body.

    

    (j)           The
Seller has not sold any securities within the 12 month period prior to the date
hereof in violation of Section 5 of the Securities Act;

    

    (k)           The
issuance, sale and delivery of the Debentures have been duly authorized by all
required corporate action on the part of the Seller.  Prior to the
purchase of any Debenture, certificates representing the Conversion Shares in an
amount equal to the lesser of (i) 9.99% of the outstanding Conversion Shares or
(ii) no less than four (4) times the number of Conversion Shares into which such
Debenture is convertible, will be delivered to Robert C. Laskowski, as escrow
agent (the “Escrow
Agent”), under an Escrow Agreement being executed by the parties and the
Escrow Agent simultaneously with issuance of each Debenture.  In
addition, prior to the purchase of any Debenture, the Company will (i) cause its
transfer agent to reserve for issuance to the Escrow Agent such number of
Conversion Shares as shall cause the aggregate number of Conversion Shares held
by the Escrow Agent and reserved for issuance to the Escrow Agent by its
transfer agent to equal no less than four (4) times the number of Conversion
Shares into which such Debenture is convertible, and (ii) instruct its transfer
agent promptly to issue to the Escrow Agent such number of Conversion Shares as
shall cause the Escrow Agent to hold the lesser of 9.99% of the outstanding
Conversion Shares or such number of Conversion Shares as shall be equal to no
less than four (4) times the number of Conversion Shares into which such
Debenture is convertible.  The Conversion Shares, upon issuance in
accordance with the terms of the Debentures, shall be duly and validly issued,
fully paid, and non-assessable.  There are no pre-emptive rights of
any shareholder of Seller.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    (l)           This
Agreement has been duly authorized, validly executed and delivered on behalf of
Seller and is a valid and binding agreement in accordance with its terms,
subject to general principles of equity and to bankruptcy or other laws
affecting the enforcement of creditors' rights generally.  The Seller
has all requisite right, power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby.  All
corporate action on the part of the Seller, its directors and shareholders
necessary for the authorization, execution, delivery and performance of this
Agreement and the Debentures has been taken.  Upon their issuance to
the Buyer, the Debentures and Conversion Shares (when issued) will be validly
issued and nonassessable, and will be free of any liens or
encumbrances.

    

    (m)           Seller
acknowledges and agrees that the transactions contemplated by this

    Agreement
have taken place solely and exclusively within the State of
Wisconsin.

    

    (n)           Seller
has provided to Buyer true copies of the Form D in the form and content which
the Seller will file with the SEC.

    

    (o)           Seller
has made information about the Seller publicly available in compliance with all
federal and state securities laws, rules and regulations and self-regulatory
bodies including but not limited to the N.A.S.D.

    

    (p)           Seller
will take such actions as are necessary to assure that no shares of preferred
stock are converted into Common Stock and that no shares of preferred stock are
redeemed for so long as any Debenture is outstanding.

    

    (q)           Seller’s
obligations hereunder and under all Debentures will be secured by a lien on all
of its assets.

    

    4.           Exemption; Reliance on
Representations.

    

    Buyer understands that the offer and
sale of the Securities are not being registered under the 1933
Act.  Seller and Buyer are relying on the rules governing offers and
sales made pursuant to Rule 504 promulgated under Regulation D. The offer and
sale of the Debentures are made
solely within Wisconsin.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    5.           Issuance of Conversion
Shares.

    Upon the conversion of any Debenture,
the Buyer or holder shall give a notice of conversion to the Escrow Agent and
the Seller and the Escrow Agent shall deliver one or more certificates, without
restrictive legend except as provided in such Debenture, representing that
number of shares of Common Stock into which such Debenture is convertible in
accordance with the provisions regarding conversion set forth in such
Debenture.  The Seller shall act as registrar for the Debentures and
shall maintain an appropriate ledger containing the necessary conversion
information.  Upon execution of any Debenture and at any subsequent
time as may be necessary, Seller shall also instruct its attorney to issue and
render any legal opinion which is required at any time by Seller’s transfer
agent to permit Seller’s transfer agent to issue any and all stock certificates
without a restrictive legend as required by this
Agreement.   Seller shall cause the Escrow Agent to have in its
possession at all times certificates representing Conversion Shares, in an
amount equal to no less than four (4) times the number of Conversion Shares into
which all outstanding Debentures are at any time convertible, and Interest
Shares (in each case, on a pre- or post-split basis, as appropriate) to comply
with the terms of the outstanding Debentures.  If, for any reason, the
Escrow Agent does not issue shares upon receipt of a notice of conversion as
required by the Debentures, Seller shall cause its transfer agent to issue such
shares.

    

    6.           Registration.

    

    If, upon
any conversion of any Debenture into Conversion Shares by the Buyer or a request
for Interest Shares (as such term is defined in the Debentures) by the Buyer,
the Seller fails or refuses to cause stock certificates without restrictive
legend to be delivered to the Buyer, then the Seller shall be required, at the
request of the Buyer and at the Seller's expense, to effect the registration of
the Conversion Shares and/or Interest Shares (the “Shares”) under the
Act and relevant state laws as promptly as is practicable.  The Seller
and the Buyer shall cooperate in good faith in connection with the furnishing of
information required for such registration and the taking of such other actions
as may be legally or commercially necessary in order to effect such
registration.  The Seller shall file such a registration statement
(“Registration
Statement”) within 30 days of Buyer's demand and shall use its good faith
diligent efforts to cause the Registration Statement to become effective as soon
as practicable thereafter.  Such good faith diligent efforts shall
include, but not be limited to, promptly responding to all comments received
from the staff of the SEC, providing Buyer's counsel with a contemporaneous copy
of all written communications from and to the staff of the SEC with respect to
such registration statement and promptly preparing and filing amendments to the
Registration Statement which are responsive to the comments received from the
staff of the SEC.  Once declared effective by the SEC, the Seller
shall cause such registration statement to remain effective until the earlier of
(i) the sale by the Buyer of all Shares registered or (ii) 120 days after the
effective date of such registration statement.  In the event the
Seller undertakes to file a Registration Statement in connection with the
Shares, upon the effectiveness of such registration, Buyer shall have the option
to sell the Shares pursuant thereto.

    

    7.           Conditions To Seller's
Obligation To Sell.

    

    Seller's obligation to sell any
Debenture is conditioned upon:

    

    (a)           The
receipt and acceptance by Seller of this Agreement as executed by
Buyer.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

    (b)           All
of the representations and warranties of the Buyer contained in this Agreement
shall be true and correct on the date of the Closing with the same force and
effect as if made on and as of the Closing.  The Buyer shall have
performed or complied with all agreements and satisfied all conditions on its
part to be performed, complied with or satisfied at or prior to the
Closing.

    

    (c)           No
order asserting that the transactions contemplated by this Agreement are subject
to the registration requirements of the Act shall have been issued, and no
proceedings for that purpose shall have been commenced or shall be pending or,
to the knowledge of the Seller, be contemplated. No stop order suspending the
sale of the Debentures or Common Stock or Shares shall have been issued, and no
proceedings for that purpose shall have been commenced or shall be pending or,
to the knowledge of the Seller, be contemplated.

    

    8.           Conditions To Buyer's
Obligation To Purchase.

    

    Buyer's obligation to purchase any
Debenture is conditioned upon:

    

    (a)           The
confirmation of receipt and acceptance by Seller of this Agreement as evidenced
by execution of this Agreement by a duly authorized officer of
Seller.

    

    (b)           All
of the representations and warranties of the Seller contained in this Agreement
shall be true and correct on the date of the Closing with the same force and
effect as if made on and as of the Closing.  The Seller shall have
performed or complied with all agreements and satisfied all conditions on its
part to be performed, complied with or satisfied at or prior to the
Closing.

    

    (c)           No
order asserting that the transactions contemplated by this Agreement are subject
to the registration requirements of the Act shall have been issued, and no
proceedings for that purpose shall have been commenced or shall be pending or,
to the knowledge of the Buyer, be contemplated. No stop order suspending the
sale of the Debentures or Common Stock or Shares shall have been issued, and no
proceedings for that purpose shall have been commenced or shall be pending or,
to the knowledge of the Buyer, be contemplated.  No proceeding or
investigation involving the Seller or its officers, directors, professionals or
employees, shall have been commenced by the SEC, the N.A.S.D., the State of
Wisconsin or any other regulatory body

    

    (d)           Delivery
of the Debenture to the Buyer.

    

    9.           No Shareholder Approval and
No Dilution.

    

    (a)           Seller
hereby agrees that from the first Closing until the issuance of all Conversion
Shares, Seller will not take any action which would require Seller to seek
shareholder approval of such issuance.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    (b)           For
so long as any Debenture, or any debentures issued by Seller from a series which
predates the Debentures, remain outstanding and unpaid, then the Seller shall
not split or reverse split the Common Stock, nor consolidate the outstanding
number of shares of Common Stock into a smaller number of shares, or issue any
convertible securities, nor otherwise take any action, directly or indirectly,
which would have a material adverse effect on the value of the Debentures or the
trading price of the Common Stock.

    

    10.           Security, Conversion, and
Subsequent Purchases.

    

    (a)           Resolutions and
Instructions.  Simultaneously with the execution of this
Agreement, Seller shall deliver to the Buyer (i) resolutions of the Board of
Directors of Seller in the form annexed hereto as Exhibit
B, hereto and
(ii) Irrevocable Instructions, in the form annexed hereto as Exhibit
C, signed by the Seller and Seller’s transfer agent ("Transfer
Agent").  The resolution with respect to the Transfer Agent
(“TA Resolution”) may be delivered by the Buyer to the Transfer Agent in the
event that, for any reason whatsoever, the Escrow Agent fails to deliver
Conversion Shares in response to any Notice of Conversion as provided in this
Agreement, the Escrow Agreement and the Debentures or in the event that the
Seller changes or attempts to change its transfer agent from the Transfer Agent
without the express written consent of the Buyer.  Delivery of the TA
Resolution to the Transfer Agent and the issuance of shares by the Transfer
Agent in accordance with the Resolution shall not preclude the Buyer from
exercising any and all other remedies available to the Buyer against the Seller
for a breach of this Agreement or the Debentures.

    

    (b)           Conversion
Limit.  Notwithstanding the conversion rights under the
Debentures, unless the last sentence in this Section 10(b) is applicable, in no
event shall the Buyer be entitled to convert any portion of the Debentures which
would result in the number of shares of Common Stock beneficially owned by the
Buyer and its Affiliates (other than shares of Common Stock which may be deemed
beneficially owned through the ownership of the unconverted portion of the
Debentures) exceeding 4.999% of the then issued and outstanding shares of Common
Stock.  For purposes of this Section 10(b), beneficial ownership shall
be determined in accordance with Rule 13d-3 of the Exchange Act and Regulations
13 D-G thereunder, except as otherwise provided in this Section
10(b).  The foregoing limitation shall not apply and shall be of no
further force or effect (i) immediately preceding and upon the occurrence of any
voluntary or mandatory redemption or repayment transaction described herein or
in the Debentures (ii) on the Maturity Date or (iii) following the occurrence of
any Event of Default which is not cured within the greater of the applicable
time period specified in either (A) such written notice of Buyer or (B) Section
8 of the Debentures.

    

    (c)           Liquidated Damages.
If Seller fails timely to deliver Certificates, as provided in Section 10(b)
above, then Seller shall pay to Buyer $250 per day for each day late in
delivering Certificates up to and including the 10th late day, and $500 per day
for each day late in delivering the Certificates after the 10th late day ("Liquidated
Damages").  Any Liquidated Damages incurred by Seller shall be
payable immediately and in cash upon demand in writing made by Buyer, or the
agent of either, to Seller.  Notwithstanding anything contained in
this Agreement to the contrary, including but not limited to the provisions of
Section 6 regarding the registration of restricted Conversion Shares, Seller
shall be required to pay the Liquidated Damages set forth in this Section
10(c).

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

    (d)           Bankruptcy.  In
the event any proceeding under the Bankruptcy Laws of the United States or any
proceedings under any state laws for the protection of debtors or creditors, are
filed, voluntarily or involuntarily, by or on behalf of Seller, then all Notices
of Conversion given by Buyer shall nonetheless continue to be enforceable and
honored but Buyer shall have no further obligation to purchase any Debentures
under this Agreement.

    

    11.           Miscellaneous.

    

    (a)           Entire
Agreement.  This Agreement, together with the Debentures and
any and all accompanying documentation, constitutes the entire agreement between
the parties, and no party shall be liable or bound to the others in any manner
by any warranties, representations or covenants except as specifically set forth
herein.  Any previous agreement among the parties related to the
transactions described herein is superseded hereby.  The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties hereto.  Nothing
in this Agreement, express or implied, is intended to confer upon any party,
other than the parties hereto, and their respective successors and assigns, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided herein.

    

    (b)           Independent
Contractor.  Buyer is an independent contractor and is not the
agent of Seller.  Buyer is not authorized to bind Seller or to make
any representations or warranties on behalf of Seller.

    

    (c)           Survival.  All
representations and warranties contained in this Agreement by Seller and Buyer
shall survive the closing of the transactions contemplated by this
Agreement.

    

    (d)           Governing
Law.  This Agreement shall be construed in accordance with the
laws of Wisconsin applicable to contracts made and wholly to be performed within
the State of Wisconsin and shall be binding upon the successors and assigns of
each party hereto.  Buyer and Seller hereby mutually waive trial by
jury and consent to exclusive jurisdiction and venue in the courts of the State
of Wisconsin.  At Buyer's election, any dispute between the parties
may be arbitrated rather than litigated in the courts, before the arbitration
board of the American Arbitration Association in Milwaukee, Wisconsin and pursuant
to its rules.  Upon demand made by the Buyer to the Seller, Seller
agrees to submit to and participate in such arbitration.

    

    (e)           Seller
Indemnification.  Seller agrees to indemnify and hold Buyer
harmless from any and all claims, damages and liabilities arising from Seller's
breach of its representations and/or covenants set forth herein.

    

    (f)           Filings of
Forms.  Seller shall file all forms required to be filed by the
SEC in accordance with the requirements of such commission, but in any event, no
later than upon the Closing of the transaction.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    (g)           Notices.  All
notices, requests, consents and other communications hereunder shall be in
writing, shall be delivered by hand or sent by Fedex for next day
delivery.  Each such notice or other communication shall for all
purposes of this Agreement be treated as effective or having been given when
delivered, if delivered personally, or, if sent by overnight express mail
service, 1 day after the same has been deposited with Fedex.

    

    If to
Seller:

    

    American
Scientific Resources, Inc.

    c/o
Christopher F. Tirotta, MD, MBA CEO/Chairman of the Board

    1115
Weston Road, Unit 278

    Weston,
FL  33332

    Phone:
845-255-2200

    Fax:
845-255-3299

    Email:
docbip@kidzmed.com

    

    with copy
to:

    

    Tomer
Tal, Esq.

    New
Venture Attorneys, P.C.

    5 Sierra
Gate Plaza #330

    Roseville,
CA 95678

    Phone:
1.916.782.1424

    Fax:
1.916.782.1474

    Email:
tomer@newventureattorneys.com

    

    
      If to
Buyer:

    

    

    Blaydon
Capital, LLC

    200 South
Executive Drive, Suite 101

    Brookfield,
WI   53005

    Attn:
Samuel Eisenberg

    Facsimile:
262-785-7995

    E-mail;
blaydoncapital@yahoo.com

    

    with copy
to:

    

    Novack
Burnbaum Crystal LLP

    300 East
42nd
Street

    New York,
New York 10017

    Attn:
Martha M. Dwyer

    Phone:  212-682-4002

    Facsimile:
212-986-2907

    mdwyer@nbclaw.com

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, and both such counterparts shall constitute one
Agreement.  Delivery of an executed counterpart of a signature page to
this Agreement by facsimile transmission or e-mail in pdf format shall be
effective as delivery of a manually executed counterpart.  A party so
delivering this Agreement shall promptly deliver a manually executed
counterpart, provided that any failure to do so shall not affect the validity of
the counterpart executed by facsimile or e-mail transmission.

    

    Signatures
to this Securities Sale Agreement begin and end on the next
page

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    

    IN WITNESS WHEREOF, the undersigned has
executed this Agreement as of the date first set forth above.

    

    
      
        
          
            
              
                
                  	 	American
      Scientific Resources, Inc.
	 	 
      	 
      
	 	
                          By:

                        	
                          

                        
	 	
                          Name:

                        	
                          Christopher
      F. Tirotta, MD, MBA

                        
	 	
                          Title:

                        	
                          CEO/Chairman
      of the Board

                        
	 	 
      	 
      
	

                          Accepted
      as of the 29th day of September, 2008

                        	
                            
      

                        	    
      
	 	 
      	 
      
	 	
                          Blaydon
      Capital, LLC

                        
	 	 
      	 
      
	 	
                          By:

                        	 
      
	 	
                          Name:

                        	
                          Samuel
      Eisenberg

                        
	 	
                          Title:

                        	
                          Managing
      Member

                        

                

              

            

          

        

      

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    EXHIBIT
A

    

    DEBENTURE

    

    THE
SECURITIES OFFERED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF
ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY SECTION 3(b) OF
THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER (THE "1933 ACT"), AND RULE 504 OF REGULATION D
PROMULGATED THEREUNDER AND SECTION 551.23(8)(g) OF THE WISCONSIN UNIFOM
SECURITIES LAW.

    

    THE
SECURITIES OFFERED HEREBY ARE OFFERED PURSUANT TO AN EXEMPTION FOR OFFERINGS TO
ACCREDITED INVESTORS ONLY UNDER THE RULES OF THE WISCONSIN DEPARTMENT OF
FINANCIAL INSTITUTIONS, SECURITIES DIVISION.  THE WISCONSIN DEPARTMENT
OF FINANCIAL INSTITUTIONS, SECURITIES DIVISION, HAS NEITHER REVIEWED NOR
APPROVED ITS FORM OR CONTENT.  THE SECURITIES DESCRIBED HEREIN MAY
ONLY BE PURCHASED BY "ACCREDITED INVESTORS" AS DEFINED BY RULE 504 OF SEC
REGULATION D AND THE RULES OF THE WISCONSIN DEPARTMENT OF FINANCIAL
INSTITUTIONS, SECURITIES DIVISION.

    

    
      
        
          
            	
                    Series  A-      
      

                  	
                     US$                              
      

                  

          

        

      

    

    

    AMERICAN
SCIENTIFIC RESOURCES, INC.

    

    8%
CONVERTIBLE REDEEMABLE DEBENTURE

    DUE                                

    

    THIS DEBENTURE of American Scientific
Resources, Inc. ("Company"), designated
as its Series A 8% Convertible Redeemable Debenture Due.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    FOR VALUE RECEIVED, the Company
promises to pay to Blaydon Capital, LLC and its authorized successors and
permitted assigns ("Holder"), the
aggregate principal face amount of thousand dollars (U.S. $) on , 20  [two years
from date of issuance] ("Maturity Date") and
to pay interest on the principal amount outstanding hereunder at the rate of 8%
per annum commencing on , 20  [one month
from date of issuance].  Interest will be paid to the Holder in whose
name this Debenture is registered on the records of the Company regarding
registration and transfers of this Debenture ("Debenture Register");
provided, however, that the Company's obligation to a transferee of this
Debenture arises only if such transfer, sale or other disposition is made in
accordance with the terms and conditions of the Securities Sale Agreement dated
as of September 29, 2008 between the Company and the Holder ("Sale
Agreement").  The principal of, and interest on, this Debenture
are payable at 200 South Executive Drive Suite 101, Brookfield, WI 53005
initially, and if changed, last appearing on the Debenture Register of the
Company as designated in writing by the Holder hereof from time to
time.  The Company will pay the outstanding principal due upon this
Debenture before or on the Maturity Date, less any amounts required by law to be
deducted or withheld, to the Holder of this Debenture by check if paid more than
10 days prior to the Maturity Date or, if paid 10 days or less prior to the
Maturity Date, by wire transfer and addressed to such Holder at the last address
appearing on the Debenture Register.  The forwarding of such check or
wire transfer shall constitute a payment of outstanding principal hereunder and
shall satisfy and discharge the liability for principal on this Debenture to the
extent of the sum represented by such check or wire
transfer.  Interest shall be payable in Common Stock (as defined
below) pursuant to paragraph 4(b) herein.

    

    This Debenture is issued pursuant to
the Sale Agreement and the Company hereby confirms that all of the
representations and warranties of the Company set forth in the Sale Agreement
are true and correct as of the date hereof

    

    This Debenture is subject to the
following additional provisions:

    

    1.           This
Debenture is issuable or assignable to a Holder in denominations of Five
Thousand Dollars (US$5,000) and integral multiples thereof.  This
Debenture is exchangeable for an equal aggregate principal amount of Debentures
of different authorized denominations, as requested by the Holders surrendering
the same, but not less than U.S. $5,000.  No service charge will be
made for such registration or transfer or exchange, except that Holder shall pay
any tax or other governmental charges payable in connection
therewith.

    

    2.           The
Company shall be entitled to withhold from all payments any amounts required to
be withheld under applicable laws.

    

    3.           This
Debenture may be transferred or exchanged only in compliance with the Securities
Act of 1933, as amended ("Act") and applicable
state securities laws.  Prior to due presentment for transfer of this
Debenture, the Company and any agent of the Company may treat the person in
whose name this Debenture is duly registered on the Company's Debenture Register
as the owner hereof for all other purposes, whether or not this Debenture be
overdue, and neither the Company nor any such agent shall be affected or bound
by notice to the contrary.  Any Holder of this Debenture electing to
exercise the right of conversion set forth in Section 4(a) hereof, in addition
to the requirements set forth in Section 4(a), and any prospective transferee of
this Debenture, are also required to give the Company written confirmation that
This Debenture is being converted ("Notice of
Conversion"). The date of receipt (including receipt by telecopy) of such
Notice of Conversion shall be the Conversion Date.

    
      
         

      

      
        ii

        
          

        

      

      
         

      

    

    4.           (a)           The
Holder of this Debenture is entitled, at its option, at any time following
delivery of this Debenture, to convert all or any
amount over $100 of the principal face amount of this Debenture then outstanding
into shares of the Company's common stock (the "Common Stock")
without restrictive legend of any nature, at a conversion price ("Conversion Price")
for each share of Common Stock equal to 60% of the lowest closing bid price of
the Common Stock as reported on the National Quotations Bureau Pink Sheets on
which the Company’s shares are traded or any exchange upon which the Common
Stock may be traded in the future ("Exchange") for (i)
any of the three trading days prior to the day upon which a Notice of Conversion
is received by the Company, provided such Notice of Conversion is delivered by
fax to the Company between the hours of 4 P.M. Eastern Standard or Daylight
Savings Time and 7 P.M. Eastern Standard or Daylight Savings Time, or (ii) the
trading day on which a Notice of Conversion is received by the Company provided
such Notice of Conversion is delivered by fax to the Company between the hours
of 4 P.M. Eastern Standard or Daylight Savings Time and 7 P.M. Eastern Standard
or Daylight Savings Time.  If the number of resultant shares of Common
Stock would as a matter of law or pursuant to regulatory authority require the
Company to seek shareholder approval of such issuance, the Company shall, as
soon as practicable, take the necessary steps to seek such
approval.  Such conversion shall be effectuated by the Company
delivering the shares of Common Stock to the Holder within 3 business days of
receipt by the Company of the Notice of Conversion.  Once the Holder
has received such shares of Common Stock, the Holder shall surrender this
Debentures to the Company, executed by the Holder evidencing such Holder's
intention to convert this Debenture or a specified portion hereof, and
accompanied by proper assignment hereof in blank.  Accrued but unpaid
interest shall be subject to conversion.  No fractional shares or
scrip representing fractions of shares will be issued on conversion, but the
number of shares issuable shall be rounded to the nearest whole
share.

    

    (b)           Interest
on any unpaid principal balance of this Debenture shall be paid at the rate of
8% per annum.  Interest shall be paid by the Company in Common Stock
("Interest Shares").  The Holder may, at any time, send in a Notice of
Conversion to the Company for Interest Shares based on the formula provided in
Section 4(a) above.  The dollar amount converted into Interest Shares
shall be all or a portion of the accrued interest calculated on the unpaid
principal balance of this Debenture to the date of such
notice.  Interest Shares shall be issued under the exemption from
registration provided by Rule 504 of Regulation D.

    

    (c)           At
any time the Company shall have the option to redeem this Debenture and pay to
the Holder 150% of the unpaid principal amount of this Debenture, in full. The
Company shall give the Holder 5 days written notice and the Holder during such 5
days shall have the option to convert this Debenture or any part thereof into
shares of Common Stock at the Conversion Price set forth in paragraph 4(a) of
this Debenture.

    

    (d)           Upon
(i) a transfer of all or substantially all of the assets of the Company to any
person in a single transaction or series of related transactions, (ii) a
reclassification, capital reorganization or other change or exchange of
outstanding shares of the Common Stock, or (iii) any consolidation or merger of
the Company with or into another person or entity in which the Company is not
the surviving entity (other than a merger which is effected solely to change the
jurisdiction of incorporation of the Company and results in a reclassification,
conversion or exchange of outstanding shares of Common Stock solely into shares
of Common Stock) (each of items (i), (ii) and (iii) being referred to as a "Sale
Event"), then, in each case, the Company shall, upon request of the Holder,
redeem this Debenture in cash for 150% of the principal amount, plus accrued but
unpaid interest through the date of redemption, or at the election of the
Holder, such Holder may convert the unpaid principal amount of this Debenture
(together with the amount of accrued but unpaid interest) into shares of Common
Stock immediately prior to such Sale Event at the Conversion
Price.

    
      
         

      

      
        iii

        
          

        

      

      
         

      

    

    

    (e)           In
case of any Sale Event in connection with which this Debenture is not redeemed
or converted, the Company shall cause effective provision to be made so that the
Holder of this Debenture shall have the right thereafter, by converting this
Debenture, to purchase or convert this Debenture into the kind and number of
shares of stock or other securities or property (including cash) receivable upon
such reclassification, capital reorganization or other change, consolidation or
merger by a holder of the number of shares of Common Stock that could have been
purchased upon exercise of the Debentures and at the same Conversion Price, as
defined in this Debenture, immediately prior to such Sale Event. The foregoing
provisions shall similarly apply to successive Sale Events. If the consideration
received by the holders of Common Stock is other than cash, the value shall be
as determined by the Board of Directors of the Company or successor person or
entity acting in good faith.

    

    5.           This
Debenture is secured by all assets of the Company.

    

    6.           No
provision of this Debenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of, and interest on,
this Debenture at the time, place, and rate, and in the form, herein
prescribed.

    

    7.           The
Company hereby expressly waives demand and presentment for payment, notice of
non-payment, protest, notice of protest, notice of dishonor, notice of
acceleration or intent to accelerate, and diligence in taking any action to
collect amounts called for hereunder and shall be directly and primarily liable
for the payment of all sums owing and to be owing hereto.

    

    8.           The
Company agrees to pay all costs and expenses, including reasonable attorneys'
fees, which may be incurred by the Holder in collecting any amount due under
this Debenture.

    

    9.           If
one or more of the following described "Events of Default" shall occur and
continue for five (5) days, unless a different time frame is noted
below:

    

    (a)           The
Company shall default in the payment of principal or interest on this Debenture
or any other debenture issued pursuant to the Sale Agreement; or

    

    (b)           Any
of the representations or warranties made by the Company herein, in the Sale
Agreement, or in any certificate or financial or other written statements
heretofore or hereafter furnished by or on behalf of the Company in connection
with the execution and delivery of this Debenture or the Sale Agreement shall be
false or misleading in any material respect at the time made or the Company
shall violate any covenants in the Sale Agreement including but not limited to
Section 5(b) or 10; or

    
      
         

      

      
        iv

        
          

        

      

      
         

      

    

    

    (c)           The
Company shall fail to perform or observe, in any material respect, any other
covenant, term, provision, condition, agreement or obligation of the Company
under this Debenture or the Sale Agreement; or

    

    (d)           The
Company shall (1) become insolvent; (2) admit in writing its inability to pay
its debts generally as they mature; (3) make an assignment for the benefit of
creditors or commence proceedings for its dissolution; (4) apply for or consent
to the appointment of a trustee, liquidator or receiver for its or for a
substantial part of its property or business; (5) file a petition
for  bankruptcy relief, consent to the filing of such petition or have
filed against it an involuntary petition for bankruptcy relief, all under
federal or state laws as applicable; or

    

    (e)           A
trustee, liquidator or receiver shall be appointed for the Company or for a
substantial part of its property or business without its consent and shall not
be discharged within thirty (30) days after such appointment; or

    

    (f)           Any
governmental agency or any court of competent jurisdiction at the instance of
any governmental agency shall assume custody or control of the whole or any
substantial portion of the properties or assets of the Company; or

    

    (g)           One
or more money judgments, writs or warrants of attachment, or similar process, in
excess of One Hundred Thousand Dollars ($100,000) in the aggregate, shall be
entered or filed against the Company or any of its properties or other assets
and shall remain unpaid, unvacated, unbonded or unstayed for a period of fifteen
(15) days or in any event later than five (5) days prior to the date of any
proposed sale thereunder; or

    

    (h)           Bankruptcy,
reorganization, insolvency or liquidation proceedings, or other proceedings for
relief under any bankruptcy law or any law for the relief of debtors shall be
instituted voluntarily by or involuntarily against the Company; or

    

    (i)           If
listed, the Company shall have its Common Stock delisted from an Exchange or, if
the Common Stock trades on an Exchange, then trading in the Common Stock shall
be suspended for more than five (5) consecutive days; or

    

    (j)           The
Company shall not deliver or cause to be delivered to the Holder the Common
Stock pursuant to paragraph 4 herein without restrictive legend within five (5)
business days of its receipt of a Notice of Conversion.

    

    Then, or
at any time thereafter, unless cured, and in each and every such case, unless
such Event of Default shall have been waived in writing by the Holder (which
waiver shall not be deemed to be a waiver of any subsequent default) at the
option of the Holder and in the Holder's sole discretion, the Holder may
consider 150% of all amounts outstanding under this Debenture immediately due
and payable, without presentment, demand, protest or (further) notice of any
kind (other than notice of acceleration), all of which are hereby expressly
waived, anything herein or in any note or other instruments contained to the
contrary notwithstanding, and the Holder may immediately, and without expiration
of any period of grace, enforce any and all of the Holder's rights and remedies
provided herein or any other rights or remedies afforded by law.  Upon
an Event of Default, interest shall be accrue at a default interest rate of 24%
per annum or, if such rate is usurious or not permitted by current law, then at
the highest rate of interest permitted by law.

    
      
         

      

      
        v

        
          

        

      

      
         

      

    

    

    10.           This
Debenture represents a prioritized obligation of the
Company.  However, no recourse shall be had for the payment of the
principal of, or the interest on, this Debenture, or for any claim based hereon,
or otherwise in respect hereof, against any incorporator, shareholder, officer
or director, as such, past, present or future, of the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the
issuance hereof, expressly waived and released.

    

    11.           In
case any provision of this Debenture is held by a court of competent
jurisdiction to be excessive in scope or otherwise invalid or unenforceable,
such provision shall be adjusted rather than voided, if possible, so that it is
enforceable to the maximum extent possible, and the validity and enforceability
of the remaining provisions of this Debenture will not in any way be affected or
impaired thereby.

    

    12.           This
Debenture and the agreements referred to in this Debenture constitute the full
and entire understanding and agreement between the Company and the Holder with
respect to the subject matter hereof.  Neither this Debenture nor any
term hereof may be amended, waived, discharged or terminated other than by a
written instrument signed by the Company and the Holder.

    

    13.           This
Debenture shall be governed by and construed in accordance with the laws of
Wisconsin applicable to contracts made and wholly to be performed within the
State of Wisconsin and shall be binding upon the successors and assigns of each
party hereto.  The Holder and the Company hereby mutually waive trial
by jury and consent to exclusive jurisdiction and venue in the courts of the
State of Wisconsin.  At the Holder's election, any dispute between the
parties may be arbitrated rather than litigated in the courts, before the
American Arbitration Association in Milwaukee, Wisconsin and pursuant to its
rules.  Upon demand made by the Holder to the Company, the Company
agrees to submit to and participate in such arbitration.  This
Agreement may be executed in counterparts, and the facsimile transmission of an
executed counterpart to this Agreement shall be effective as an
original.

    

    {REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK}

    
      
         

      

      
        vi

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the Company has
caused this Debenture to be duly executed by an officer thereunto duly
authorized.

    

    Dated:                                           

    

    
      
        
          
            
              
                
                  	
                          AMERICAN
      SCIENTIFIC RESOURCES, INC.

                        
	 
      	 
      
	
                          By:

                        	 
      
	
                          Name:

                        	 
      
	
                          Title:

                        	 
      

                

              

            

          

        

      

    

    
      
         

      

      
        vii

        
          

        

      

      
         

      

    

    EXHIBIT
B

    

    ACTION
IN LIEU OF A

    SPECIAL
MEETING OF THE BOARD OF DIRECTORS

    OF

    AMERICAN
SCIENTIFIC RESOURCES, INC.

    

    The
undersigned, comprising the entire board of directors of American Scientific
Resources, Inc. (the “Corporation”),
pursuant to Section 78.315 of the Nevada Revised Statues, hereby adopt the
following resolutions as of September 29, 2008:

    

    WHEREAS,
the Corporation wishes to enter into a Securities Sale Agreement ( the “Agreement”) with the
Blaydon Capital, LLC (the “Purchaser”) and to
sell and issue up to $999,999 of its Series A 8% Convertible Redeemable
Debentures (the “Debentures”) to the
Purchaser;

    

    NOW
THEREFORE, it is.

    

    RESOLVED:
that the officers of the Corporation are authorized to enter into the Agreement
and to cause the Corporation to issue Debentures in the principal face value of
up to $999,999 to Purchaser upon the terms and conditions set forth in the form
of Debenture presented to this Board of Directors, and enter into all such
necessary accompanying documentation in order to consummate the transactions
contemplated by the foregoing documents.

    

    RESOLVED
FURTHER:  That the officers of the Corporation are authorized
to enter into one or more escrow agreements among the Corporation, the Purchaser
and Robert Laskowski (the “Escrow Agent”) under which the Escrow Agent will hold
shares of the Company’s Common Stock in escrow pending conversion of the
Debentures.

    

    RESOLVED
FURTHER: that the
Corporation shall deliver to the Purchaser this original Resolution, which may
in turn be delivered to the Escrow Agent and the Corporation’s transfer agent,
Stalt, Inc. (the “Transfer Agent”), and
the Escrow Agent and the Transfer Agent are hereby instructed to release and
deliver to the Purchaser, in accordance with each notice of conversion given to
the Escrow Agent, without restrictive legend of any kind, shares of the
Corporation’s common stock having an aggregate price per share, determined as
provided in the Debentures, subject to the terms of the Debentures. The
Purchaser shall provide the Escrow Agent with the calculation of the shares to
be delivered in each notice of conversion and the Escrow Agent shall have the
right to rely on the Purchaser’s calculation and direction. This resolution may
be invoked by the Purchaser on as many occasions as necessary to effectuate the
purpose of the Agreement.

    

    RESOLVED
FURTHER:, that these resolutions and the directions and instructions
contained herein shall be effective through the date on which all Debentures
shall have been paid or converted, and shall be irrevocable and shall not be
superseded, amended, suspended or revoked by any other resolution, direction,
instruction or action of the Corporation or its shareholders.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    RESOLVED
FURTHER:, that the Corporation shall not change the Escrow Agent or the
Transfer Agent without the express written consent of the Purchaser through (and
including) the date on which all Debentures shall have been paid or converted,
and that neither the Escrow Agent nor the Transfer Agent shall honor any request
of the Corporation to cooperate, or provide documentation or records, in order
to change to another escrow agent or transfer agent unless approved in writing
by the Purchaser.

    

    RESOLVED
FURTHER:, that the shares should be issued to Robert Laskowski, Escrow
Agent and sent to Robert Laskowski, Escrow Agent, at such address as shall be
provided by the Escrow Agent.

    
      
         

      

      
        ii

        
          

        

      

      
         

      

    

    EXHIBIT
C

    

    TRANSFER
AGENT INSTRUCTIONS

     

    
      TO:             
Stalt, Inc.

        
671 Oak Grove Avenue, Suite C

        
Menlo Park, CA 94025

    

     

    FROM:       AMERICAN
SCIENTIFIC RESOURCES, INC.

    

    Ladies
and Gentlemen:

    

    Reference is made to that certain
Securities Sale Agreement (the “Sale Agreement”)
between Freedom Financial Holdings, Inc. (the “Company”), and The
Tripod Group, LLC (the "Holder"), dated as of
September 19, 2008, pursuant to which the Company is issuing to the Holder its
Series A 8% Convertible Redeemable Debentures (the “Debentures”) which
are convertible into the common stock of the Company (the “Common Shares”),
pursuant to Regulation D of the Securities Act of 1933, and Rule 504 promulgated
thereunder, and the Wisconsin securities laws.

    

    You are hereby irrevocably authorized
and instructed to issue to Robert C. Laskowski, escrow agent, 22,000,000 Common
Shares and to reserve for issuance such number of Common Shares, in order that
the aggregate number of Common shares held by Robert C. Laskowski, escrow agent,
plus the number of shares reserved for issuance shall at all times provide four
to one coverage under each Debenture issued pursuant to the Sale Agreement for
issuance upon full conversion of such Debenture in accordance with the terms
thereof.  You are also hereby irrevocably authorized and directed
promptly to issue to Robert C. Laskowski, as escrow agent, such number of Common
Shares as shall cause Robert C. Laskowski, as escrow agent, to hold the lesser
of 9.99% of the outstanding Common Shares or such number of Common Shares as
shall at all times provide four to one coverage under each Debenture issued
pursuant to the Sale Agreement for issuance upon full conversion of such
Debenture in accordance with the terms thereof.  You are hereby
further irrevocably authorized and directed to issue a new share certificate or
share certificates free of any restrictive legend to the Holder upon delivery by
the Holder to you of one or more notices of conversion.  Upon receipt
by you of any such notice of conversion you are to issue and deliver Common
Shares in accordance with the direction of the Holder.  These
instructions and this authorization may not be revoked or countermanded by the
Company at any time and you are instructed and directed to accept the
instructions of the Holder only.

    

    Copies of a form of Debenture and
related escrow agreement are attached hereto.  You should familiarize
yourself with your issuance and delivery obligations contained
therein.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Please be advised that the Holder has
relied upon this letter as an inducement to enter into the Sale Agreement and
purchase the Debentures and, accordingly, the Holder is a third party
beneficiary to these Instructions.  The Company hereby undertakes
neither to withdraw nor change these Instructions which are irrevocable in
nature.  If you receive any notification from the Company in the
future which contradicts these instructions in any way, including but not
limited to, any instructions or direction not to issue Common Shares to the
Holder free of restrictive legend as provided above, you shall ignore any such
further instructions and directions and abide in full only with these
instructions.

    

    The Company hereby covenants and agrees
to indemnify you and your employees and agents and hold them harmless from and
against any and all claims, demands, assessments, interest, penalties, actions,
suits, proceedings, liabilities, losses, damages, costs and expenses (including,
without limitation, counsel fees) of any nature whatsoever arising from, in
connection with or relating to this instruction letter and/or the authorizations
and directions herein.

    

    
      
        
          
            
              	 
      	
                      Very
      truly yours,

                    
	 
      	 
      	 
      
	 
      	
                      AMERICAN
      SCIENTIFIC RESOURCES, INC.

                    
	 
      	 
      	 
      
	 
      	
                      By:

                    	 
      
	 
      	
                      Name:

                    	
                      Christopher
      F. Tirotta, MD, MBA

                    
	 
      	
                      Title:

                    	
                      CEO/Chairman
      of the
Board

                    

            

          

        

      

    

    

    Acknowledged
and agreed:

    

    By affixing its signature hereto,
Stalt, Inc. agrees to abide by the directions set forth in this letter and
understands that these instructions may not be modified, either orally or in
writing, by any officer or director of American Scientific Resources, Inc. at
any time without the written consent of the Holder.  Further, Stalt,
Inc. hereby acknowledges that, other than the documentation described herein, no
other documentation will be required to issue certificates of Common Shares free
of restrictive legend as provided herein to the Holder.

    

    
      
        
          
            
              	
                      By:

                    	 
      
	
                      Name:

                    	 
      
	
                      Title:

                    	 
      

            

          

        

      

    

    

    Dated: as
of September 29, 2008

    
      
         

      

      
        ii

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