Document:

AGREEMENT
      AND PLAN OF MERGER

    

    THIS
      AGREEMENT AND PLAN OF MERGER
      is made
      as of the 2nd
      day of
      July,
      2007

    

    AMONG:

    

    TECH
      LABORATORIES, INC.,
      a
      corporation formed pursuant to the laws of the State of New Jersey and having
      an
      office for business located at 1818 North Farwell Avenue, Milwaukee, Wisconsin
      53202

    

    (“TLBT”)

    

    AND:

    

    BSI
      ACQUISITIONS, INC.,
      a body
      corporate formed pursuant to the laws of the State of Nevada and a wholly owned
      subsidiary of TLBT

    

    (the
      "Acquirer")

    

    AND:

    

    BIODIESEL
      SOLUTIONS, INC.,
      a body
      corporate formed pursuant to the laws of the State of Nevada and having an
      office for business located at 1395 Greg Street, Suite #102, Sparks, Nevada
      89431

    

    ("BSI")

    

    AND:

    

    RUDOLF
      WIEDEMANN,
      an
      individual having an address at 572 Echo Ridge Court, Reno, NV
      89511

     

    (“Wiedemann”)

    

    AND:

    

    GREGORY
      SPRINGER,
      an
      individual having an address at 7026 Poco Bueno Court, Sparks, NV 89436

    

    (“Springer”)

    

    AND:

    

    KEN
      THOMAS AND MARYANNE HARZHEIM, TRUSTEES OF THE THOMAS- HARZHEIM
      TRUST,
      having
      an address at 48867 Chenin Blanc Drive, Fremont, CA 94539

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (the
“BSI
      Preferred Shareholder” and together with Springer and Wiedemann, the “BSI
      Shareholders”)

    

    WHEREAS:

    

    A. BSI
      is a
      Nevada corporation engaged in the development
      and marketing of equipment used to produce biodiesel fuels;

    

    B. The
      BSI
      Shareholders own an aggregate of 7,773,794 BSI Common Shares (of which Wiedemann
      owns 7,000,000 shares and Springer owns 773,794 shares) and the BSI Preferred
      Shareholder owns 50,000 BSI Preferred Shares, being 100% of the presently issued
      and outstanding equity of BSI;

    

    C. TLBT
      is a
      reporting company whose common stock is quoted on the NASD “Bulletin Board” and
      which is engaged in the business of producing personal-scale biodiesel
      production equipment;

    

    D. The
      respective Boards of Directors of TLBT, BSI and the Acquirer deem it advisable
      and in the best interests of TLBT, BSI and the Acquirer that the Acquirer merge
      with and into BSI (the "Merger") pursuant to this Agreement and the Certificate
      of Merger, and the applicable provisions of the laws of the State of Delaware
      and the State of Nevada; and

    

    E. It
      is
      intended that the Merger shall qualify for United States federal income tax
      purposes as a reorganization within the meaning of Section 368(a)(1)(A) of
      the
      Internal Revenue Code of 1986, as amended.

    

    NOW
      THEREFORE THIS AGREEMENT WITNESSETH THAT
      in
      consideration of the premises and the mutual covenants, agreements,
      representations and warranties contained herein, and other good and valuable
      consideration, the receipt and sufficiency of which is hereby acknowledged,
      the
      parties hereto hereby agree as follows:

    

    ARTICLE
      1

    DEFINITIONS
      AND INTERPRETATION

    

    Definitions

    

    1.1 In
      this
      Agreement the following terms will have the following meanings:

    

    
      	 	
              (a)

            	
              “Acquisition
                Shares”
                means the 49,000,000 TLBT Common Shares and (ii) the 1,000,000 BSI
                New
                Preferred Shares, which shares are to be issued and delivered to
                the BSI
                Shareholders at Closing pursuant to the terms of the
                Merger;

            

    

    

    
      	 	
              (b)

            	
              “Agreement”
                means this Agreement and Plan of Merger among TLBT, the Acquirer,
                BSI, and
                the BSI Shareholders;

            

    

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    
 

    
      	 	
              (c)

            	
              “BSI
                Accounts Payable and Liabilities”
                means all accounts payable and liabilities of BSI, due and owing
                or
                otherwise constituting a binding obligation of BSI (other than a
                BSI
                Material Contract) as of May 31, 2007 as set forth in Schedule “A”
                hereto;

            

    

    

    
      	 	
              (d)

            	
              “BSI
                Accounts Receivable”
                means all accounts receivable and other debts owing to BSI, as of
                May 31,
                2007 as set forth in Schedule “B”
hereto;

            

    

    

    
      	 	
              (e)

            	
              “BSI
                Assets”
                means all the property and assets of the BSI Business of every kind
                and
                description wheresoever situated including, without limitation, BSI
                Equipment, BSI Material Contracts, BSI Accounts Receivable, BSI Cash,
                BSI
                Intangible Assets, BSI Goodwill, BSI Unlisted Inventory, and all
                credit
                cards, charge cards and banking cards issued to
                BSI;

            

    

    

    
      	 	
              (f)

            	
              “BSI
                Bank Accounts”
                means all of the bank accounts, lock boxes and safety deposit boxes
                of BSI
                or relating to the BSI Business as set forth in Schedule “C” hereto;
                

            

    

    

    
      	 	
              (g)

            	
              “BSI
                Business”
                means all aspects of the business conducted by
                BSI;

            

    

    

    
      	 	
              (h)

            	
              “BSI
                Cash”
                means all cash on hand or on deposit to the credit of BSI on the
                Closing
                Date;

            

    

    

    
      	 	
              (i)

            	
              “BSI
                Debt to Related Parties”
                means the debts owed by BSI and its subsidiaries to any of the BSI
                Shareholders or to any family member thereof, or to any affiliate,
                director or officer of BSI or the BSI Shareholders as described in
                Schedule “D”;

            

    

    

    
      	 	
              (j)

            	
              “BSI
                Equipment”
                means all machinery, equipment, furniture, and furnishings used in
                the BSI
                Business, including, without limitation, the items more particularly
                described in Schedule “E” hereto;

            

    

    

    
      	 	
              (k)

            	
              “BSI
                Financial Statements”
                means collectively, the financial statements of BSI for the years
                ended
                December 31, 2005 and 2006, and the period ended March 31, 2007,
                all of
                which were prepared on an accrual
                basis in accordance with United States generally accepted accounting
                principles (other than the treatment of the BSI Unlisted Inventory),
                true
                copies of which are attached as Schedule “F”
                hereto;

            

    

    

    
      	 	
              (l)

            	
              “BSI
                Goodwill”
                means the goodwill of the BSI Business together with the exclusive
                right
                of TLBT to represent itself as carrying on the BSI Business in succession
                of BSI subject to the terms hereof, and the right to use any words
                indicating that the BSI Business is so carried on including the right
                to
                use the name "BSI” or “BSI International" or any variation thereof as part
                of the name of or in connection with the BSI Business or any part
                thereof
                carried on or to be carried on by BSI, the right to all corporate,
                operating and trade names associated with the BSI Business, or any
                variations of such names as part of or in connection with the BSI
                Business, all telephone listings and telephone advertising contracts,
                all
                lists of customers, books and records and other information relating
                to
                the BSI Business, all necessary licenses and authorizations and any
                other
                rights used in connection with the BSI
                Business;

            

    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
 

    
      	 	
              (m)

            	
              “BSI
                Insurance Policies”
                means the public liability insurance and insurance against loss or
                damage
                to BSI Assets and the BSI Business as described in Schedule “G”
                hereto;

            

    

    

    
      	 	
              (n)

            	
              “BSI
                Intangible Assets”
                means all of the intangible assets of BSI, including, without limitation,
                BSI Goodwill, all trademarks, logos, copyrights, designs, licenses,
                patents, and other intellectual and industrial property of BSI and
                its
                subsidiaries;

            

    

    

    
      	 	
              (o)

            	
              “BSI
                Material Contracts”
                means the burden and benefit of and the right, title and interest
                of BSI
                in, to and under all trade and non-trade contracts, engagements or
                commitments, whether written or oral, to which BSI is entitled in
                connection with the BSI Business whereunder BSI is obligated to pay
                or
                entitled to receive the sum of $10,000 or more including, without
                limitation, any pension plans, profit sharing plans, bonus plans,
                loan
                agreements, security agreements, indemnities and guarantees, any
                agreements with employees, lessees, licensees, managers, accountants,
                suppliers, agents, distributors, officers, directors, attorneys or
                others
                which cannot be terminated without liability on not more than one
                month's
                notice, and those contracts listed in Schedule “I” hereto;
                and

            

    

    

    
      	 	
              (p)

            	
              “BSI
                Common Shares”
                means the common stock, $0.001 par value per share, of
                BSI;

            

    

    

    
      	 	
              (q)

            	
              “BSI
                New Preferred Shares”
                means the Series B Preferred Stock, $0.001 par value per share, of
                BSI;

            

    

    

    
      	 	
              (r)

            	
              “BSI
                Preferred Shares”
                means the Series A Preferred Stock, $0.001 par value per share, of
                BSI;

            

    

    

    
      	 	
              (s)

            	
              “BSI
                Shares”
                means collectively, all of the issued and outstanding BSI Common
                Shares;

            

    

    

    
      	
            	(t)	
              “NGCL”
                means the Nevada General Corporation
                Law;

            

    

    

    
      	 	
              (u)

            	
              “Closing”
                means the completion, on the Closing Date, of the transactions
                contemplated hereby in accordance with Article 9
                hereof;

            

    

    

    
      	 	
              (v)

            	
              “Closing
                Date”
                means the day on which all conditions precedent to the completion
                of the
                transaction as contemplated hereby have been satisfied or
                waived;

            

    

    

    
      	
            	(w)	
              “Commission”
                means the Securities and Exchange Commission;

            

    

    

    
      	 	
              (x)

            	
              “Effective
                Time”
                means the date of the filing of an appropriate Certificate of Merger
                in
                the form required by the State of Delaware and the State of Nevada,
                which
                provide that the Merger shall become effective upon such
                filings;

            

    

    

    
      	 	
              (y)

            	
              “Employment
                Agreements”
                means the employment agreements to be entered into on the Closing
                Date
                between BSI and Wiedemann and Springer in the forms attached hereto
                as
                Exhibit “A” and “B”, respectively;

            

    

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    
 

    
      	 	
              (z)

            	
              “Exchange
                Act”
                means the Securities Exchange Act of 1934, as
                amended;

            

    

    

    
      	 	
              (aa)

            	
              “Lock
                Up Agreement”
                means the Lock Up Agreement to be entered into on the Closing Date
                between
                TLBT and the BSI Shareholders in respect of the Acquisition Shares
                in the
                form attached hereto as Exhibit
“F”;

            

    

    

    
      	 	
              (bb)

            	
              “Merger”
                means the merger, at the Effective Time, of BSI and the Acquirer
                pursuant
                to this Agreement and Plan of
                Merger;

            

    

    

    
      	 	
              (cc)

            	
              “Place
                of Closing”
                means the offices of Sichenzia Ross Friedman Ference LLP, 61 Broadway,
                New
                York, New York 10006, or such other place as TLBT and BSI may mutually
                agree upon;

            

    

    

    
      	 	
              (dd)

            	
              “Registration
                Rights Agreement”
                means the Registration Rights Agreement to be entered into on the
                Closing
                Date between TLBT and the BSI Shareholders in respect of the Acquisition
                Shares in the form attached hereto as Exhibit
                “C”;

            

    

    

    
      	 	
              (ee)

            	
              “SEC
                Reports”
                means all forms, reports and documents filed and required to be filed
                by
                TLBT with the Commission under the Exchange
                Act;

            

    

    

    
      	 	
              (ff)

            	
              “Securities
                Act”
                means the Securities Act of 1933, as amended;

            

    

    

    
      	 	
              (gg)

            	
              “Surviving
                Company”
                means BSI following the Merger with the
                Acquirer;

            

    

    

    
      	 	
              (hh)

            	
              “TLBT
                Business”
                means all aspects of any business conducted by TLBT and its
                subsidiaries;

            

    

    

    
      	 	
              (ii)

            	
              “TLBT
                Common Shares”
                means the Common Stock, $0.01 par value per share, of TLBT;
                and

            

    

    

    
      	 	
              (jj)

            	
              “TLBT
                Financial Statements”
                means, collectively, the audited consolidated financial statements
                of TLBT
                for the fiscal years ended December 31, 2005 and 2006, together with
                the
                unqualified auditors’ report thereon, and the unaudited financial
                statements for the three month periods ended March 31, 2007 and 2006,
                true
                copies of which are attached as Schedule “I”
                hereto.

            

    

    

    Any
      other
      terms defined within the text of this Agreement will have the meanings so
      ascribed to them.

    

    Captions
      and Section Numbers

    

    1.2 The
      headings and section references in this Agreement are for convenience of
      reference only and do not form a part of this Agreement and are not intended
      to
      interpret, define or limit the scope, extent or intent of this Agreement or
      any
      provision thereof.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    Section
      References and Schedules

    

    1.3 Any
      reference to a particular “Article”, “section”, “paragraph”, “clause” or other
      subdivision is to the particular Article, section, clause or other subdivision
      of this Agreement and any reference to a Schedule or Exhibit by letter will
      mean
      the appropriate Schedule or Exhibit attached to this Agreement and by such
      reference the appropriate Schedule or Exhibit is incorporated into and made
      part
      of this Agreement. The Schedules and Exhibits to this Agreement are as
      follows:

    

    Information
      concerning BSI

    

    BSI
      Disclosure Letter, including the following Schedules appurtenant
      thereto:

    

    Schedule
      “A” BSI
      Accounts Payable and Liabilities

    Schedule
      “B” BSI
      Accounts Receivable

    Schedule
      “C” BSI
      Bank
      Accounts

    
      
        Schedule
          “D” BSI
          Debts
          to Related Parties 

      

    

    Schedule
      “E” BSI
      Equipment

    Schedule
      “F” BSI
      Financial Statements

    Schedule
      “G” BSI
      Insurance Policies

    Schedule
      “H” BSI
      Material Contracts

     

    Information
      concerning TLBT

    

    Schedule
      “I” TLBT
      Financial Statements

    

    Ancillary
      Agreements

    

    Exhibit
      “A” Form
      of
      Employment Agreement for Wiedemann

    Exhibit
      “B” Form
      of
      Employment Agreement for Springer

    Exhibit
      “C” Form
      of
      Registration Rights Agreement

    Exhibit
      “D” BSI
      Milestones

    Exhibit
      “E” Form
      of
      Option

    Exhibit
      “F” Form
      of
      Lock-Up Agreement

    

    Severability
      of Clauses

    

    1.4 If
      any
      part of this Agreement is declared or held to be invalid for any reason, such
      invalidity will not affect the validity of the remainder which will continue
      in
      full force and effect and be construed as if this Agreement had been executed
      without the invalid portion, and it is hereby declared the intention of the
      parties that this Agreement would have been executed without reference to any
      portion which may, for any reason, be hereafter declared or held to be
      invalid.

    

    ARTICLE
      2

    THE
      MERGER

    

    The
      Merger

    

    2.1 The
      Acquirer shall be merged with and into BSI pursuant to this Agreement and Plan
      of Merger and the separate corporate existence of the Acquirer shall cease
      and
      BSI, as it exists from and after the Closing, shall be the Surviving Company.
      At
      Closing, Articles of Merger shall be filed with the Secretary of State of Nevada
      in accordance with Chapter 92A of the NGCL. The merger shall become effective
      upon the filing of the Articles of Merger with the Secretary of State of Nevada,
      which date and time is sometimes herein referred to as the “Effective
      Time”.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

    Effect
      of the Merger

    

    2.2 The
      Merger shall have the effect provided therefor by the NGCL. Without limiting
      the
      generality of the foregoing, and subject thereto, at the Effective Time (i)
      all
      the rights, privileges, immunities, powers and franchises, of a public as well
      as of a private nature, and all property, real, personal and mixed, and all
      debts due on whatever account, including without limitation subscriptions to
      shares, and all other choses in action, and all and every other interest of
      or
      belonging to or due to BSI or the Acquirer, as a group, subject to the terms
      hereof, shall be taken and deemed to be transferred to, and vested in, the
      Surviving Company without further act or deed; and all property, rights and
      privileges, immunities, powers and franchises and all and every other interest
      shall be thereafter as effectually the property of the Surviving Company, as
      they were of BSI and the Acquirer, as a group, and (ii) all debts, liabilities,
      duties and obligations of BSI and the Acquirer, as a group, subject to the
      terms
      hereof, shall become the debts, liabilities and duties of the Surviving Company
      and the Surviving Company shall thenceforth be responsible and liable for all
      debts, liabilities, duties and obligations of BSI and the Acquirer, as a group,
      and neither the rights of creditors nor any liens upon the property of BSI
      or
      the Acquirer, as a group, shall be impaired by the Merger, and may be enforced
      against the Surviving Company. 

    

    Articles
      of Incorporation; Bylaws; Directors and Officers

    

    2.3 The
      Articles of Incorporation of the Surviving Company from and after the Closing
      shall be the Articles of Incorporation of BSI until thereafter amended in
      accordance with the provisions therein and as provided by the applicable
      provisions of the NGCL. The Bylaws of the Surviving Company from and after
      the
      Closing shall be the Bylaws of BSI as in effect immediately prior to the
      Closing, continuing until thereafter amended in accordance with their terms,
      the
      Articles of Incorporation of the Surviving Company and as provided by the NGCL.
      The Directors of the Surviving Company at the Effective Time shall be John
      King,
      David Marks and Rudi Wiedemann.

    

    Conversion
      of Securities

    

    2.4 At
      the
      Effective Time, by virtue of the Merger and without any action on the part
      of
      the Acquirer, BSI or the BSI Shareholders, the shares of capital stock of each
      of BSI and the Acquirer shall be converted as follows:

    

    
      	 	
              (a)

            	
              Capital
                Stock of the Acquirer.
                Each issued and outstanding share of the Acquirer's capital stock
                shall
                continue to be issued and outstanding and shall be converted into
                one
                share of validly issued, fully paid, and non-assessable common stock
                of
                the Surviving Company. Each stock certificate of the Acquirer evidencing
                ownership of any such shares shall continue to evidence ownership
                of such
                shares of capital stock of the Surviving
                Company.

            

    

    

    
      	 	
              (b)

            	
              Conversion
                of BSI Shares.
                Each BSI Share that is issued and outstanding at the Effective Time
                shall
                automatically be cancelled and extinguished and converted, without
                any
                action on the part of the holder thereof, into the right to receive
                at the
                time and in the amounts described in this Agreement an amount of
                Acquisition Shares equal to (a) in the case of Wiedemann, 44,023,061
                TLBT
                Common Shares and all 1,000,000 of the BSI New Preferred Shares and
                (b) in
                the case of Springer, 4,976,939 TLBT Common Shares. All such BSI
                Shares,
                when so converted, shall no longer be outstanding and shall automatically
                be cancelled and retired and shall cease to exist, and each holder
                of a
                certificate representing any such shares shall cease to have any
                rights
                with respect thereto, except the right to receive the Acquisition
                Shares
                paid in consideration therefor upon the surrender of such certificate
                in
                accordance with this Agreement.

            

    

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    
 

    
      	 	
              (c)

            	
              Cancellation
                of BSI Preferred Shares.
                Each BSI Preferred Share that is issued and outstanding at the Effective
                Time shall automatically be cancelled and extinguished, without any
                action
                on the part of the holder thereof, in exchange for the right to receive
                the Liquidation Consideration (as defined below) at the Closing.
                All such
                BSI Preferred Shares shall no longer be outstanding and shall
                automatically be cancelled and retired and shall cease to exist,
                and each
                holder of a certificate representing any such shares shall cease
                to have
                any rights with respect thereto, except the right to receive the
                Liquidation Consideration paid in consideration therefor upon the
                surrender of such certificate in accordance with this
                Agreement.

            

    

    

    Additional
      Consideration

    

    2.5 (a) In
      addition to the Acquisition Shares, TLBT shall pay the BSI Shareholders
      additional consideration in the amount of $375,000 (“Cash
      Consideration”).
      The
      Cash Consideration shall be paid to the applicable BSI Shareholders on the
      Closing Date by certified check, bank check or wire transfer. Of such amount,
      $275,000 shall be paid to Wiedemann and $100,000 shall be paid to
      Springer.

    

    (b) In
      addition, TLBT shall pay the BSI Preferred Shareholder additional consideration
      in the amount of $125,000 (“Liquidation Consideration”)
      as a
      liquidation payment in connection with the cancellation of the BSI Preferred
      Shares at the Closing. The Liquidation Consideration shall be paid to the BSI
      Preferred Shareholder on the Closing Date by certified check, bank check or
      wire
      transfer

    

    2.6 The
      BSI
      Shareholders acknowledge that foregoing allocation of merger consideration
      amongst them has been specifically negotiated and agreed to, and consent to
      such
      allocation for all intents and purposes and waive any claims arising from any
      disparate allocation of the merger consideration relative to any other document
      or BSI’s Articles of Incorporation or Bylaws.

    

    Adherence
      with Applicable Securities Laws

    

    
      	
              2.7

            	
              The
                BSI Shareholders agree that they are acquiring the Acquisition Shares
                for
                investment purposes and will not offer, sell or otherwise transfer,
                pledge
                or hypothecate any of the Acquisition Shares issued to them (other
                than
                pursuant to an effective registration statement under the Securities
                Act)
                directly or indirectly unless:

            

    

    

    
      	
            	(a)	
              the
                sale is to TLBT;

            

    

    

    
      	 	
              (b)

            	
              the
                sale is made pursuant to the exemption from registration under the
                Securities
                Act,
                provided by Rule 144 thereunder; or

            

    

    

    
      	 	
              (c)

            	
              the
                Acquisition Shares are sold in a transaction that does not require
                registration under the Securities
                Act,
                or
                any applicable United States state laws and regulations governing
                the
                offer and sale of securities, and, if requested by TLBT, the seller
                has
                furnished to TLBT an opinion of counsel to that effect or such other
                written opinion as may be reasonably required by
                TLBT.

            

    

     

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    The
      BSI
      Shareholders acknowledge that the certificates representing the Acquisition
      Shares shall bear the following legend:

    

    THE
      SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT. THEY
      MAY
      NOT BE MORTGAGED, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED WITHOUT AN
      EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT OF
      1933 AND OTHER APPLICABLE SECURITIES LAWS OR AN OPINION OF COUNSEL FOR THE
      COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND OTHER APPLICABLE
      SECURITIES LAWS. THE HOLDER MAY BE REQUIRED TO PROVIDE AN OPINION AT THE
      HOLDER’S COST TO THE COMPANY THAT SUCH TRANSFER IS PERMITTED WITHOUT
      REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS, WHICH OPINION MUST BE
      ACCEPTABLE TO THE COMPANY’S COUNSEL.

    

    ARTICLE
      3

    REPRESENTATIONS
      AND WARRANTIES

    OF
      TLBT

    

    Representations
      and Warranties

    

    3.1 TLBT
      represents and warrants to BSI and the BSI Shareholders, with the intent that
      BSI and the BSI Shareholders will rely thereon in entering into this Agreement
      and in approving and completing the transactions contemplated hereby,
      that:

    

    TLBT
      - Corporate Status and Capacity

    

    
      	 	
              (a)

            	
              Incorporation.
                TLBT and each of its subsidiaries is a corporation duly organized,
                validly
                existing and in good standing under the laws of the state of its
                incorporation, has the corporate power and authority to own, operate
                and
                lease its properties and to carry on its business as now conducted
                or as
                proposed to be conducted, and is qualified as a foreign corporation
                in
                each jurisdiction in which a failure to be so qualified could reasonably
                be expected to have a material adverse effect on its present or expected
                operations or financial condition.

            

    

    

    
      	 	
              (b)

            	
              Power
                and Capacity.
                Each of TLBT and Acquirer has the right, power, legal capacity and
                authority to enter into and perform its obligations under this Agreement,
                and all agreements to which TLBT and/or Acquirer is or will be a
                party
                that are required to be executed pursuant to this Agreement (the
                “TLBT
                Ancillary Agreements”).
                The execution, delivery and performance of this Agreement and the
                TLBT
                Ancillary Agreements have been duly and validly approved and authorized
                by
                the respective Boards of Directors of TLBT and Acquirer, and the
                stockholder of Acquirer, as required by applicable law and their
                respective certificates of incorporation and
                bylaws.

            

    

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    
 

    
      	 	
              (c)

            	
              No
                Filings.
                No filing, authorization or approval, governmental or otherwise,
                is
                necessary to enable TLBT and Acquirer to enter into, and to perform
                their
                respective obligations under, this Agreement and the TLBT Ancillary
                Agreements, except for (a) the filing of the Certificate of Merger
                with the Delaware and Nevada Secretaries of State and the filing
                of
                appropriate documents with the relevant authorities of other states
                in
                which TLBT is qualified to do business, if any, and (b) such filings
                as may be required to comply with federal and state securities
                laws.

            

    

    

    
      	 	
              (d)

            	
              Binding
                Obligation.
                This Agreement and the TLBT Ancillary Agreements are, or when executed
                by
                TLBT and/or Acquirer (as applicable) will be, valid and binding
                obligations of TLBT and Acquirer enforceable in accordance with their
                respective terms, except as to the effect, if any, of (a) applicable
                bankruptcy and other similar laws affecting the rights of creditors
                generally, and (b) rules of law governing specific performance, injunctive
                relief and other equitable remedies

            

    

    

    
      	 	
              (e)

            	
              Reporting
                Status; Listing.
                TLBT’s common stock is registered under Section 12(b) or 12(g) of the
                Exchange Act and TLBT is required to file current reports with the
                Commission pursuant to section 13(a) of the Exchange Act. The TLBT
                Common
                Shares are quoted on the NASD "Bulletin Board” under the symbol
                “TLBT”;

            

    

     

    Acquirer
      - Corporate Status and Capacity

    

    
      	 	
              (f)

            	
              Carrying
                on Business.
                Other than corporate formation and organization, the Acquirer has
                not
                carried on any business activities to
                date.

            

    

    

    TLBT
      - Capitalization

    

    
      	 	
              (g)

            	
              Authorized
                Capital.
                The authorized capital of TLBT consists of 3,000,000,000 TLBT Common
                Shares, $0.01 par value and 20,000,000 shares of preferred stock.
                $0.001
                par value, of which 357,076,887 TLBT Common Shares and no shares
                of Series
                A Convertible Preferred Stock, are presently issued and outstanding;
                

            

    

    

    
      	 	
              (h)

            	
              No
                Option.
                Except as disclosed herein or in the TLBT SEC Reports, no person,
                firm or
                corporation has any agreement, warrant or option or any right capable
                of
                becoming an agreement, warrant or option for the acquisition of any
                capital stock or equity interest in TLBT, except for the outstanding
                shares of Series A Convertible Preferred
                Stock;

            

    

    

    
      	 	
              (i)

            	
              Agreements
                Concerning TLBT Capital Stock.
                Except as disclosed herein or in the TLBT SEC Reports, there are
                no
                restrictions on the transfer, sale or other disposition of any capital
                stock of TLBT contained in the charter documents of TLBT or under
                any
                other agreements. There are no stockholder agreements, investor rights
                agreements, co-sale agreements, right of first refusal agreements,
                voting
                agreements, registration rights agreements or any other similar type
                of
                agreement to which TLBT, any subsidiary of TLBT or any officer or
                director
                of TLBT (or any subsidiary of TLBT) is a party.

            

    

     

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    Acquirer
      - Capitalization

    

    
      	 	
              (j)

            	
              Authorized
                Capital.
                The authorized capital of the Acquirer consists of 100 shares of
                common
                stock, $0.001 par value, of which one share of common stock is presently
                issued and outstanding;

            

    

    

    
      	 	
              (k)

            	
              No
                Option.
                No person, firm or corporation has any agreement, warrant or option
                or any
                right capable of becoming an agreement, warrant or option for the
                acquisition of any capital stock or equity interest in
                Acquirer;

            

    

    

    TLBT
      - Records and Financial Statements

    

    
      	 	
              (l)

            	
              Charter
                Documents.
                The charter documents of TLBT and the Acquirer have not been altered
                since
                the incorporation of each, respectively, except as filed in the record
                books of TLBT or the Acquirer, as the case may be, copies of which
                have
                been provided to BSI;

            

    

    

    
      	 	
              (m)

            	
              TLBT
                Financial Statements.
                The TLBT Financial Statements present fairly, in all material respects,
                the assets and liabilities (whether accrued, absolute, contingent
                or
                otherwise) of TLBT, on a consolidated basis, as of the respective
                dates
                thereof, and the results of operations and statement of cash flows
                of TLBT
                during the periods covered thereby, in all material respects and
                have been
                prepared in accordance with generally accepted accounting principles
                consistently applied throughout the periods
                indicated;

            

    

    

    
      	 	
              (n)

            	
              TLBT
                has previously delivered or made available to BSI true and complete
                copies
                of (a) its Annual Report on Form 10-K for the fiscal year ended
                December 31, 2006, (b) its Quarterly Reports on Form 10-Q for the
                fiscal
                quarter ended March 31, 2007, and (c) its Definitive Proxy Statement
                on
                Schedule 14A as filed on May 23, 2007, with the Securities and Exchange
                Commission pursuant to the Securities Exchange Act of 1934, as amended
                (the "Exchange
                Act").
                As of their respective dates, such reports and proxy statement
                (collectively, the "Public
                Filings")
                (i) complied with all applicable provisions, rules and regulations of
                federal securities laws and (ii) did not contain any untrue statement
                of a material fact or omit to state a material fact required to be
                stated
                therein or necessary to make the statements contained therein, in
                light of
                the circumstances in which such statements were made, not
                misleading.

            

    

    

    
      	 	
              (o)

            	
              Since
                the date of the balance sheet included in TLBT’s most recently filed
                report on Form 10-Q, TLBT has conducted its business in the ordinary
                course and there has not occurred: (a) any material adverse change in
                the financial condition, liabilities, assets or business of TLBT;
                (b) any amendment or change in the certificate of incorporation or
                bylaws of TLBT, or any proposal to so amend; (c) any damage to,
                destruction of or loss of any assets of TLBT (whether or not covered
                by
                insurance) that materially and adversely affects, or could reasonably
                be
                expected to materially and adversely affect, the financial condition
                or
                business of TLBT; or (d) any sale of a material amount of property of
                TLBT, except in the ordinary course of
                business;

            

    

     

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    
TLBT
      - Applicable Laws and Legal Matters

    

    
      	 	
              (p)

            	
              Pending
                or Threatened Litigation.
                There is no material litigation or administrative or governmental
                proceeding pending or, to TLBT’s knowledge, threatened against or relating
                to TLBT, its subsidiaries, or the TLBT Business nor does TLBT have
                any
                knowledge of any act, fact or omission that would form any material
                basis
                for any such action or proceeding;

            

    

    

    
      	 	
              (q)

            	
              No
                Bankruptcy.
                Neither TLBT nor its subsidiaries have made any voluntary assignment
                or
                proposal under applicable laws relating to insolvency and bankruptcy
                and
                no bankruptcy petition has been filed or presented against TLBT or
                its
                subsidiaries and no order has been made or a resolution passed for
                the
                winding-up, dissolution or liquidation of TLBT or its subsidiaries;
                

            

    

    

    
      	 	
              (r)

            	
              Finder's
                Fees.
                Neither TLBT nor its subsidiaries are party to any agreement which
                provides for the payment of finder's fees, brokerage fees, commissions
                or
                other fees or amounts which are or may become payable to any third
                party
                in connection with the execution and delivery of this Agreement and
                the
                transactions contemplated herein;

            

    

    

    Execution
      and Performance of Agreement

    

    
      	 	
              (s)

            	
              No
                Violation or Breach.
                The execution and performance of this Agreement will
                not:

            

    

    

    
      	 	
              (i)

            	
              violate
                the charter documents of TLBT or the Acquirer or result in any breach
                of,
                or default under, any loan agreement, mortgage, deed of trust, or
                any
                other agreement to which TLBT or its subsidiaries are
                party,

            

    

    

    
      	 	
              (ii)

            	
              give
                any person any right to terminate or cancel any agreement or any
                right or
                rights enjoyed by TLBT or its
                subsidiaries,

            

    

    

    
      	 	
              (iii)

            	
              result
                in any alteration of TLBT’ or its subsidiaries’ obligations under any
                agreement to which TLBT or its subsidiaries are
                party,

            

    

    

    
      	 	
              (iv)

            	
              result
                in the creation or imposition of any lien, encumbrance or restriction
                of
                any nature whatsoever in favor of a third party upon or against the
                assets
                of TLBT,

            

    

    

    
      	 	
              (v)

            	
              result
                in the imposition of any tax liability to TLBT or its subsidiaries
                relating to the assets of TLBT, or

            

    

    

    
      	 	
              (vi)

            	
              violate
                any court order or decree to which either TLBT or its subsidiaries
                are
                subject;

            

    

     

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    TLBT
      - Acquisition Shares

    

    
      	 	
              (t)

            	
              Acquisition
                Shares.
                The Acquisition Shares when delivered to the holders of BSI Shares
                or as
                directed thereby pursuant to the Merger shall be validly issued and
                outstanding as fully paid and non-assessable shares and the Acquisition
                Shares shall be transferable upon the books of TLBT, in all cases
                subject
                to the provisions and restrictions of all applicable securities laws;
                and

            

    

    

    
      	 	
              (u)

            	
              Securities
                Law Compliance.
                Except as set forth in the SEC Reports, TLBT has not issued any shares
                of
                its common stock (or securities convertible into or exercisable for
                shares
                of common stock) since March 31, 2007. The issuance of the Acquisition
                Shares (including any shares of TLBT common stock issuable upon conversion
                of the BSI New Preferred Shares) will be exempt from registration
                under
                applicable federal and state securities
                laws.

            

    

    

    Non-Merger
      and Survival

    

    3.2 The
      representations and warranties of TLBT contained herein will be true at and
      as
      of Closing in all material respects as though such representations and
      warranties were made as of such time. Notwithstanding the completion of the
      transactions contemplated hereby, the waiver of any condition contained herein
      (unless such waiver expressly releases a party from any such representation
      or
      warranty) or any investigation made by the BSI Shareholders, the representations
      and warranties of TLBT shall survive the Closing for a period of eighteen (18)
      months. 

    

    Indemnity
      

    

    3.3 TLBT
      agrees to indemnify and save harmless BSI and the BSI Shareholders from and
      against any and all claims, demands, actions, suits, proceedings, assessments,
      judgments, damages, costs, losses and expenses, including any payment made
      in
      good faith in settlement of any claim (subject to the right of TLBT to defend
      any such claim) and reaonsable attorneys fees and expenses (collectively,
“Losses and Expenses”), resulting from the breach by it of any representation,
      warranty or covenant made under this Agreement or from any misrepresentation
      in
      or omission from any certificate or other instrument furnished or to be
      furnished by TLBT to BSI or the BSI Shareholders hereunder provided that there
      shall be no indemnification obligation until aggregate Losses and Expenses
      exceed $10,000 and, in such event, the indemnifying party shall be required
      to
      pay the entire amount of such Losses and Expenses in excess of $10,000. In
      addition, TLBT agrees to indemnify the BSI Shareholders from and against any
      and
      all Losses and Expenses arising from the business operations of the Surviving
      Company after the Closing of the Merger or on account of personal guarantees
      or
      personal indemnity agreements entered into by the BSI Shareholders in connection
      with the obligations of BSI (which Losses and Expenses shall be recoverable
      without reference to the $10,000 threshold set forth in the preceding
      sentence).

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

    ARTICLE
      4

    COVENANTS
      OF TLBT

    

    Covenants

    

    4.1 TLBT
      covenants and agrees with BSI and the BSI Shareholders that it
      will:

    

    
      	 	
              (a)

            	
              Conduct
                of Business.
                Until the Closing, conduct its business diligently and in the ordinary
                course consistent with the manner in which it generally has been
                operated
                up to the date of execution of this Agreement;

            

    

    

    
      	 	
              (b)

            	
              Access.
                Until the Closing, give the BSI Shareholders and their representatives
                full access to all of the properties, books, contracts, commitments
                and
                records of TLBT, and furnish to the BSI Shareholders and their
                representatives all such information as they may reasonably request,
                and
                following the Closing, give the BSI Shareholders and their representatives
                full access to all of the properties, books, contracts, commitments
                and
                records of BSI and TLBT, and furnish to the BSI Shareholders and
                their
                representatives all such information as they may reasonably request
                in
                connection with their indemnification obligations under Section 5.3
                below;

            

    

    

    
      	 	
              (c)

            	
              Procure
                Consents.
                Take all reasonable steps required to obtain, prior to Closing, any
                and
                all third party consents required to permit the
                Merger;

            

    

    

    
      	 	
              (d)

            	
              Tech
                Labs Development Corp.
                Upon achievement of the milestones set forth on Exhibit “D,” TLBT shall
                incorporate “Tech Labs Development Corp.,” or a variation thereof, and
                appoint Weidemann as its chief executive officer. TLBT will fund
                such
                entity at an appropriate level necessary to achieve its goals and
                shall
                provide Weidemann with appropriate compensation for the services
                to be
                provided.

            

    

    

    
      	 	
              (e)

            	
              Renewal
                Fuels.
                At a reasonable time subsequent to the Closing Date, TLBT shall retain
                a
                general manager for its subsidiary, Renewal Fuels, Inc., with oversight
                by
                BSI; provided, however, that notwithstanding any oversight, management
                or
                legal affiliation between the entities, Renewal Fuels, Inc. and BSI
                shall
                maintain separate accounting records, with each entity reporting
                results
                and financial information to TLBT.

            

    

    

    
      	 	
              (f)

            	
              Additional
                Financing.
                TLBT further agrees to provide BSI with an aggregate of $1,500,000
                for
                working capital purposes in accordance with the following
                schedule:

            

    

    

    
      	
            	(1)	
              Upon
                the Closing, TLBT shall automatically forgive that certain loan made
                to
                BSI in the principal amount of $200,000 on May 24,
                2007;

            

    

     

    
      	
            	(2)	
              On
                the Closing Date TLBT shall provide BSI with $500,000;
                

            

    

     

    
      	
            	(3)	
              Within
                seventy-five days of the Closing Date, shall provide BSI with $400,000;
                and

            

    

     

    
      	
            	(4)	
              Shall
                provide BSI with the remaining $400,000 within 10 business days of
                the
                unconditional booking (and receipt of 50% deposit) for the sale of
                the
                first BiodieselMaster unit by BSI. 

            

    

    

    
      	 	
              (g)

            	
              Employee
                Securities.
                TLBT shall grant an aggregate of 1,000,000 TLBT Common Shares and
                an
                aggregate of 2,000,000 options to purchase TLBT Common Shares to
                the
                individuals, other than officers of BSI, employed by BSI prior to
                the
                Closing Date. Such options shall be in the form attached hereto as
                Exhibit
                “E” and shall be granted, along with the TLBT Common Shares, on the
                Closing Date in the amounts to be mutually agreed upon by TLBT and
                BSI.

            

    

     

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    
 

    
      	 	
              (h)

            	
              Delivery
                of Registration Rights Agreement.
                On the Closing Date, TLBT will deliver the executed Registration
                Rights
                Agreement to the BSI Shareholders.

            

    

    

    
      	 	
              (i)

            	
              Employment
                Agreements.
                On the Closing Date, TLBT shall cause the Surviving Company to execute
                and
                deliver the Employment Agreements to Wiedemann and
                Springer.

            

    

    

    
      	 	
              (j)

            	
              Conversion
                Shares.
                Upon conversion of any of the BSI New Preferred Shares in accordance
                with
                the Certificate of Designation to be filed by BSI on or about the
                Closing,
                TLBT will promptly issue and deliver to the converting holder thereof
                a
                stock certificate representing the appropriate number of shares of
                TLBT
                Common Stock into which BSI New Preferred Shares have been
                converted.

            

    

    

    Authorization

    

    4.2   TLBT
      hereby agrees to authorize and direct any and all federal, state, municipal,
      foreign and international governments and regulatory authorities having
      jurisdiction respecting TLBT and its subsidiaries to release any and all
      information in their possession respecting TLBT and its subsidiaries to BSI.
      TLBT shall promptly execute and deliver to BSI any and all consents to the
      release of information and specific authorizations which BSI reasonably requires
      to gain access to any and all such information.

    

    Survival

    

    4.3 The
      covenants set forth in this Article shall survive the Closing for the benefit
      of
      the BSI Shareholders.

    

    ARTICLE
      5

    REPRESENTATIONS
      AND WARRANTIES OF

    BSI
      AND THE PRINCIPAL STOCKHOLDERS

    

    Representations
      and Warranties

    

    5.1 BSI,
      Wiedemann and Springer, jointly and severally, represent and warrant to TLBT
      and
      the Acquirer, with the intent that they will rely thereon in entering into
      this
      Agreement and in approving and completing the transactions contemplated hereby,
      that, except as disclosed in the BSI Disclosure Letter: 

    

    BSI
      - Corporate Status and Capacity

    .

    
      	 	
              (a)

            	
              Incorporation.
                BSI is a corporation duly organized, validly existing and in good
                standing
                under the laws of the state of its incorporation, has the corporate
                power
                and authority to own, operate and lease its properties and to carry
                on its
                business as now conducted or as proposed to be conducted, and is
                qualified
                as a foreign corporation in each jurisdiction in which a failure
                to be so
                qualified could reasonably be expected to have a material adverse
                effect
                on its present or expected operations or financial
                condition.

            

    

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    
 

    
      	 	
              (b)

            	
              Power
                and Capacity.
                BSI has the right, power, legal capacity and authority to enter into
                and
                perform its obligations under this Agreement, and all agreements
                to which
                BSI is or will be a party that are required to be executed pursuant
                to
                this Agreement (the “BSI
                Ancillary Agreements”).
                The execution, delivery and performance of this Agreement and the
                BSI
                Ancillary Agreements has been duly and validly approved and authorized
                by
                the Board of Directors and stockholders of BSI, as required by applicable
                law and its articles of incorporation and bylaws. Each of the BSI
                Shareholders has the right, power, legal capacity and authority to
                enter
                into and perform their obligations under this Agreement, and all
                agreements to which they will be a party that are required to be
                executed
                pursuant to this Agreement

            

    

    

    
      	 	
              (c)

            	
              No
                Filings.
                No filing, authorization or approval, governmental or otherwise,
                is
                necessary to enable BSI to enter into, and to perform its obligations
                under, this Agreement and the BSI Ancillary Agreements, except for
                (a) the filing of the Agreement of Merger with the Delaware and
                Nevada Secretaries of State, the recording of the Agreement of Merger
                in
                the office of the Recorder of the Delaware county in which TLBT’s
                registered office is located, and the filing of appropriate documents
                with
                the relevant authorities of other states in which BSI is qualified
                to do
                business, if any, (b) such filings as may be required to comply with
                federal and state securities laws, and (c) certain third-party consents,
                which have been disclosed in BSI’s Disclosure
                Letter.

            

    

    

    
      	 	
              (d)

            	
              Binding
                Obligation.
                This Agreement and the BSI Ancillary Agreements are, or when executed
                by
                BSI will be, valid and binding obligations of BSI enforceable in
                accordance with their respective terms, except as to the effect,
                if any,
                of (a) applicable bankruptcy and other similar laws affecting the
                rights
                of creditors generally, and (b) rules of law governing specific
                performance, injunctive relief and other equitable remedies. This
                Agreement and the BSI Ancillary Agreements are, or when executed
                by each
                BSI Shareholders will be, valid and binding obligations of such person,
                enforceable in accordance with their respective terms, except as
                to the
                effect, if any, of (a) applicable bankruptcy and other similar laws
                affecting the rights of creditors generally, and (b) rules of law
                governing specific performance, injunctive relief and other equitable
                remedies.

            

    

    

    BSI
      - Capitalization

    

    
      	 	
              (e)

            	
              Authorized
                Capital.
                The authorized capital of BSI consists of 40,000,000 shares of common
                stock, $0.001 par value per share and 10,000,000 shares of preferred
                stock, $0.001 par value per share;

            

    

    

    
      	 	
              (f)

            	
              Ownership
                of BSI Shares.
                The issued and outstanding share capital of BSI will on Closing consist
                of
                7,773,794 shares of common stock (being the BSI Shares) and 50,000
                BSI
                Preferred Shares, which shares on Closing shall be validly issued
                and
                outstanding as fully paid and non-assessable shares. The BSI Shareholders
                will be at Closing the registered and beneficial owner of the BSI
                Shares.
                The BSI Shares owned by the BSI Shareholders will on Closing be free
                and
                clear of any and all liens, charges, pledges, encumbrances, restrictions
                on transfer and adverse claims
                whatsoever;

            

    

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    
 

    
      	 	
              (g)

            	
              No
                Option.
                No person, firm or corporation has any agreement, warrant or option
                or any
                right capable of becoming an agreement, warrant or option for the
                acquisition of any capital stock or equity interest in
                BSI;

            

    

    

    
      	 	
              (h)

            	
              No
                Restrictions.
                There are no restrictions on the transfer, sale or other disposition
                of
                BSI Shares contained in the charter documents of BSI or under any
                agreement that would prohibit the consummation of the transactions
                contemplated herein;

            

    

    

    BSI
      - Records and Financial Statements

    

    
      	 	
              (i)

            	
              Charter
                Documents.
                The charter documents of BSI have not been altered since its incorporation
                date, except as filed in the record books of
                BSI;

            

    

    

    
      	 	
              (j)

            	
              Corporate
                Minute Books. The
                corporate minute books of BSI are complete and each of the minutes
                contained therein accurately reflect the actions that were taken
                at a duly
                called and held meeting or by consent without a meeting. All actions
                by
                BSI which required director or shareholder approval are reflected
                on the
                corporate minute books of BSI. BSI is not in violation or breach
                of, or in
                default with respect to, any term of its Articles of Incorporation
                (or
                other charter documents) or by-laws, except where such breach or
                default
                would not have a material adverse effect upon
                BSI;

            

    

    

    
      	 	
              (k)

            	
              BSI
                Financial Statements.
                The BSI Financial Statements present fairly, in all material respects,
                the
                assets and liabilities (whether accrued, absolute, contingent or
                otherwise) of BSI as of the respective dates thereof, and the results
                of
                operations and statement of cash flows of BSI during the periods
                covered
                thereby, in all material respects, and were prepared on an accrual
                basis in accordance with generally accepted accounting principles
                consistently applied throughout the periods indicated, except for
                (i) the
                treatment of the BSI Unlisted Inventory and (ii) footnote
                disclosure;

            

    

    

    
      	 	
              (l)

            	
              BSI
                Accounts Payable and Liabilities.
                There are no material liabilities, contingent or otherwise, of BSI
                which
                are not disclosed in Schedule “A” hereto or the BSI Disclosure Letter or
                reflected in the BSI Financial Statements except those incurred in
                the
                ordinary course of business since the date of the said schedule and
                the
                BSI Financial Statements, and BSI has not guaranteed or agreed to
                guarantee any debt, liability or other obligation of any person,
                firm or
                corporation. Without limiting the generality of the foregoing, all
                accounts payable and liabilities of BSI as of May 31, 2007 are described
                in Schedule “A” hereto;

            

    

    

    
      	 	
              (m)

            	
              BSI
                Accounts Receivable.
                All BSI Accounts Receivable result from bona fide business transactions
                and services actually rendered without, to the knowledge and belief
                of
                BSI, any claim by the obligor for set-off or
                counterclaim;

            

    

     

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    
 

    
      	 	
              (n)

            	
              BSI
                Bank Accounts.
                All of the BSI Bank Accounts, their location, numbers and the authorized
                signatories thereto are as set forth in Schedule “C”
                hereto;

            

    

    

    
      	 	
              (o)

            	
              No
                Debt to Related Parties.
                BSI is not, or on Closing will not be, materially indebted to the
                BSI
                Shareholders nor to any family member thereof, nor to any affiliate,
                director or officer of BSI or the BSI Shareholders except accounts
                payable
                on account of bona fide business transactions of BSI incurred in
                normal
                course of BSI Business, including employment agreements with the
                BSI
                Shareholders and attached to Schedule “D” hereto is an accounts payable
                aging ledger;

            

    

    

    
      	 	
              (p)

            	
              No
                Related Party Debt to BSI.
                Neither the BSI Shareholders nor any director, officer or affiliate
                of BSI
                are now indebted to or under any financial obligation to BSI on any
                account whatsoever, except for advances on account of travel and
                other
                expenses not exceeding $5,000 in
                total;

            

    

    

    
      	 	
              (q)

            	
              No
                Dividends.
                No dividends or other distributions on any shares in the capital
                of BSI
                have been made, declared or authorized since the date of the BSI
                Financial
                Statements (which for all purposes under this Agreement shall mean
                March
                31, 2007);

            

    

    

    
      	 	
              (r)

            	
              No
                Payments.
                No payments of any kind have been made or authorized since the date
                of the
                BSI Financial Statements to or on behalf of the BSI Shareholders
                or to or
                on behalf of officers, directors, shareholders or employees of BSI,
                except
                payments made in the ordinary course of business and at the regular
                rates
                of salary or other remuneration payable to
                them;

            

    

    

    
      	 	
              (s)

            	
              No
                Pension Plans.
                There are no pension, profit sharing, group insurance or similar
                plans or
                other deferred compensation plans affecting
                BSI;

            

    

    

    
      	 	
              (t)

            	
              No
                Adverse Events.
                Since the date of the BSI Financial
                Statements:

            

    

    

    
      	
            	(i)	
              there
                has not been any material adverse change in the properties, results
                of
                operations, financial position or condition of BSI, its liabilities
                or the
                BSI Assets or any damage, loss or other change in circumstances materially
                affecting BSI, the BSI Business or the BSI Assets or BSI’s right to carry
                on the BSI Business, other than changes in the ordinary course of
                business, 

            

    

    

    
      	
            	(ii)	
              there
                has not been any damage, destruction, loss or other event (whether
                or not
                covered by insurance) materially and adversely affecting BSI, the
                BSI
                Business or the BSI Assets,

            

    

    

    
      	
            	(iii)	
              there
                has not been any material increase in the compensation payable or
                to
                become payable by BSI to the BSI Shareholders or to any of BSI's
                officers,
                employees or agents or any bonus, payment or arrangement made to
                or with
                any of them,

            

    

    

    
      	
            	(iv)	
              the
                BSI Business has been and continues to be carried on in the ordinary
                course,

            

    

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    
      	
            	(v)	
              BSI
                has not waived or surrendered any right of material
                value,

            

    

    

    
      	
            	(vi)	
              BSI
                has not discharged or satisfied or paid any lien or encumbrance or
                obligation or liability other than current liabilities in the ordinary
                course of business, and 

            

    

    

    
      	
            	(vii)	
              no
                capital expenditures in excess of $10,000 individually or $30,000
                in total
                have been authorized or made;

            

    

    

    BSI
      - Income Tax Matters

    

    
      	 	
              (u)

            	
              Tax
                Returns.
                All tax returns and reports of BSI required by law to be filed have
                been
                filed based on a cash
                basis, and are true, complete and correct, and any taxes payable
                in
                accordance with any return filed by BSI or in accordance with any
                notice
                of assessment or reassessment issued by any taxing authority have
                been so
                paid;

            

    

    

    
      	 	
              (v)

            	
              Current
                Taxes.
                Adequate provisions have been made for taxes payable for the current
                period for which tax returns are not yet required to be filed and
                there
                are no agreements, waivers, or other arrangements providing for an
                extension of time with respect to the filing of any tax return by,
                or
                payment of, any tax, governmental charge or deficiency by BSI. BSI
                is not
                aware of any contingent tax liabilities or any grounds which would
                prompt
                a reassessment;

            

    

    

    BSI
      - Applicable Laws and Legal Matters

    

    
      	 	
              (w)

            	
              Licenses.
                BSI holds all licenses and permits as may be requisite for carrying
                on the
                BSI Business in the manner in which it has heretofore been carried
                on,
                which licenses and permits have been maintained and continue to be
                in good
                standing except where the failure to obtain or maintain such licenses
                or
                permits would not have a material adverse effect on the BSI
                Business;

            

    

    

    
      	 	
              (x)

            	
              Applicable
                Laws.
                BSI has not been charged with or received notice of breach of any
                laws,
                ordinances, statutes, regulations, by-laws, orders or decrees to
                which it
                is subject or which applies to it the violation of which would have
                a
                material adverse effect on the BSI Business, and, to BSI’s knowledge, BSI
                is not in breach of any laws, ordinances, statutes, regulations,
                by-laws,
                orders or decrees the contravention of which would result in a material
                adverse impact on the BSI Business;

            

    

    

    
      	 	
              (y)

            	
              Pending
                or Threatened Litigation.
                There is no material litigation or administrative or governmental
                proceeding pending or, to BSI’s knowledge, threatened against or relating
                to BSI, the BSI Business, or any of the BSI Assets, nor does BSI
                have any
                knowledge of any act, fact or omission that would form any material
                basis
                for any such action or proceeding;

            

    

    

    
      	 	
              (z)

            	
              No
                Bankruptcy.
                BSI has not made any voluntary assignment or proposal under applicable
                laws relating to insolvency and bankruptcy and no bankruptcy petition
                has
                been filed or presented against BSI and no order has been made or
                a
                resolution passed for the winding-up, dissolution or liquidation
                of
                BSI;

            

    

     

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    
 

    
      	 	
              (aa)

            	
              Labor
                Matters.
                BSI is not a party to any collective agreement relating to the BSI
                Business with any labor union or other association of employees and
                no
                part of the BSI Business has been certified as a unit appropriate
                for
                collective bargaining or, to the knowledge of BSI, has made any attempt
                in
                that regard and BSI has no reason to believe that any current employees
                will leave BSI's employ as a result of this
                Merger;

            

    

    

    
      	 	
              (bb)

            	
              Finder's
                Fees.
                BSI is not a party to any agreement which provides for the payment
                of
                finder's fees, brokerage fees, commissions or other fees or amounts
                which
                are or may become payable to any third party in connection with the
                execution and delivery of this Agreement and the transactions contemplated
                herein;

            

    

    

    Execution
      and Performance of Agreement

    

    
      	 	
              (cc)

            	
              No
                Violation or Breach.
                The execution and performance of this Agreement will
                not

            

    

    

    
      	 	
              (i)

            	
              violate
                the charter documents of BSI or result in any breach of, or default
                under,
                any loan agreement, mortgage, deed of trust, or any other agreement
                to
                which BSI is a party,

            

    

    

    
      	 	
              (ii)

            	
              give
                any person any right to terminate or cancel any agreement including,
                without limitation, BSI Material Contracts, or any right or rights
                enjoyed
                by BSI,

            

    

    

    
      	 	
              (iii)

            	
              result
                in any material alteration of BSI's obligations under any agreement
                to
                which BSI is a party including, without limitation, the BSI Material
                Contracts,

            

    

    

    
      	 	
              (iv)

            	
              result
                in the creation or imposition of any material lien, encumbrance or
                restriction of any nature whatsoever in favor of a third party upon
                or
                against the BSI Assets,

            

    

    

    
      	 	
              (v)

            	
              result
                in the imposition of any tax liability to BSI relating to BSI Assets
                or
                the BSI Shares, or

            

    

    

    
      	 	
              (vi)

            	
              violate
                any court order or decree to which either BSI is subject;
                

            

    

    

    BSI
      Assets - Ownership and Condition

    

    
      	 	
              (dd)

            	
              Business
                Assets.
                The BSI Assets comprise all of the property and assets of the BSI
                Business, and neither the BSI Shareholders nor any other person,
                firm or
                corporation owns any assets used by BSI in operating the BSI Business,
                whether under a lease, rental agreement or other
                arrangement;

            

    

    

    
      	 	
              (ee)

            	
              Title.
                Other than to the extent of any leased assets, BSI is the legal and
                beneficial owner of the BSI Assets, free and clear of all mortgages,
                liens, charges, pledges, security interests, encumbrances or other
                claims
                whatsoever;

            

    

     

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    
 

    
      	 	
              (ff)

            	
              No
                Option.
                No person, firm or corporation has any agreement or option or a right
                capable of becoming an agreement for the purchase of any of the BSI
                Assets;

            

    

    

    
      	 	
              (gg)

            	
              BSI
                Insurance Policies.
                BSI maintains the public liability insurance and insurance against
                loss or
                damage to the BSI Assets and the BSI Business as described in Schedule
“G”
                hereto;

            

    

    

    
      	 	
              (hh)

            	
              BSI
                Material Contracts.
                The BSI Material Contracts listed in Schedule “H” constitute all of the
                material contracts of BSI;

            

    

    

    
      	 	
              (ii)

            	
              No
                Default.
                There has not been any default in any material obligation of BSI
                or to the
                knowledge of BSI any other party to be performed under any of BSI
                Material
                Contracts, each of which to the knowledge of BSI is in good standing
                and
                in full force and effect and unamended, and BSI is not aware of any
                default in the obligations of any other party to any of the BSI Material
                Contracts;

            

    

    

    
      	 	
              (jj)

            	
              No
                Compensation on Termination.
                There are no agreements, commitments or understandings relating to
                severance pay or separation allowances on termination of employment
                of any
                employee of BSI. BSI is not obliged to pay benefits or share profits
                with
                any employee after termination of employment except as required by
                law;

            

    

    

    BSI
      Assets - BSI Equipment

    

    
      	 	
              (kk)

            	
              BSI
                Equipment.
                The BSI Equipment has been maintained in a manner consistent with
                that of
                a reasonably prudent owner and to the knowledge of BSI such equipment
                is
                in good working condition;

            

    

    

    BSI
      Assets - BSI Goodwill and Other Assets

    

    
      	 	
              (ll)

            	
              BSI
                Goodwill.
                BSI carries on the BSI Business only under the name "Biodiesel Solutions,
                Inc." and variations thereof and under no other business or trade
                names.
                BSI does not have any knowledge of any infringement by BSI of any
                patent,
                trademark, copyright or trade
                secret;

            

    

    

    The
      Business of BSI

    

    
      	 	
              (mm)

            	
              Maintenance
                of Business.
                Since the date of the BSI Financial Statements, the BSI Business
                has been
                carried on in the ordinary course and BSI has not entered into any
                material agreement or commitment except in the ordinary course;
                and

            

    

    

    
      	 	
              (nn)

            	
              Subsidiaries.
                BSI does not own any subsidiaries and does not otherwise own, directly
                or
                indirectly, any shares or interest in any other corporation, partnership,
                joint venture or firm and BSI does not own any subsidiary and does
                not
                otherwise own, directly or indirectly, any shares or interest in
                any other
                corporation, partnership, joint venture or
                firm.

            

    

    

    Non-Merger
      and Survival

    

    5.2 The
      representations and warranties of BSI contained herein will be true at and
      as of
      Closing in all material respects as though such representations and warranties
      were made as of such time. Notwithstanding the completion of the transactions
      contemplated hereby, the waiver of any condition contained herein (unless such
      waiver expressly releases a party from any such representation or warranty)
      or
      any investigation made by TLBT, the representations and warranties of BSI shall
      survive the Closing for a period of eighteen (18) months. 

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    

    Indemnity

    

    5.3 Wiedemann
      and Springer jointly and severally agree to indemnify and save harmless TLBT
      from and against any and all Losses and Expenses resulting from the breach
      by
      BSI of any representation, warranty or covenant of BSI made under this Agreement
      or from any misrepresentation in or omission from any certificate or other
      instrument furnished or to be furnished by BSI or the BSI Shareholders to TLBT
      hereunder provided that (i) there shall be no indemnification obligation until
      aggregate Losses and Expenses exceed $10,000 and, in such event, the
      indemnifying party shall be required to pay the entire amount of such Losses
      and
      Expenses in excess of $10,000, (ii) neither Wiedemann nor Springer will be
      liable to the extent that any such claims exceed the amount of merger
      consideration actually received by such BSI Shareholder hereunder, other than
      to
      the extent of claims based on fraud by such BSI Shareholder, for which there
      shall be no dollar limit, and (iii) the obligations of Wiedemann and/or
      Springer may be satisfied in cash or surrender of Acquisition Shares (valued
      consistent with the method used to calculate the number of shares of such
      security issued at Closing - which in the case of TLBT Common Shares shall
      be
      equal to. the greater of (a) the average closing price of TLBT Common Shares
      for
      the 10 trading days immediately preceding the Closing Date, or (b) $0.05 per
      share, and in the case of the BSI New Preferred Shares shall be their State
      Value as set forth in the applicable Certificate of Designation for such
      shares), or any combination thereof, at the election of the applicable BSI
      shareholder.

    

    ARTICLE
      6

    COVENANTS
      OF BSI AND

    THE
      BSI SHAREHOLDERS

     

    Covenants

    

    6.1 BSI,
      Wiedemann and Springer covenant and agree with TLBT that they will:

    

    
      	 	
              (a)

            	
              Conduct
                of Business.
                Until the Closing, conduct the BSI Business diligently and in the
                ordinary
                course consistent with the manner in which the BSI Business generally
                has
                been operated up to the date of execution of this Agreement and will
                not
                enter into any material obligations or compensatory arrangements
                without
                the prior consent of TLBT; 

            

    

    

    
      	 	
              (b)

            	
              Preservation
                of Business.
                Until the Closing, use their best efforts to preserve the BSI Business
                and
                the BSI Assets and, without limitation, preserve for TLBT BSI’s
                relationships with their suppliers, customers and others having business
                relations with them;

            

    

    

    
      	 	
              (c)

            	
              Access.
                Until the Closing, give TLBT and its representatives full access
                to all of
                the properties, books, contracts, commitments and records of BSI
                relating
                to BSI, the BSI Business and the BSI Assets, and furnish to TLBT
                and its
                representatives all such information as they may reasonably
                request;

            

    

     

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    
 

    
      	 	
              (d)

            	
              Procure
                Consents.
                Until the Closing, take all reasonable steps required to obtain,
                prior to
                Closing, any and all third party consents required to permit the
                Merger
                and to preserve and maintain the BSI Assets, including the BSI Material
                Contracts, notwithstanding the change in control of BSI arising from
                the
                Merger;

            

    

    

    
      	 	
              (e)

            	
              Delivery
                of Registration Rights Agreement.
                On the Closing Date, the BSI Shareholders will deliver the executed
                Registration Rights Agreement to
                TLBT;

            

    

    

    
      	 	
              (f)

            	
              Employment
                Agreements.
                On the Closing Date, Wiedemann and Springer will deliver the executed
                Employment Agreements to TLBT; and

            

    

    

    
      	 	
              (g)

            	
              Delivery
                of Lock Up Agreement.
                On the Closing Date, the BSI Shareholders will deliver the executed
                Lock
                Up Agreement to TLBT.

            

    

    

    Authorization

    

    6.2 BSI
      hereby agrees to authorize and direct any and all federal, state, municipal,
      foreign and international governments and regulatory authorities having
      jurisdiction respecting BSI to release any and all information in their
      possession respecting BSI to TLBT. BSI shall promptly execute and deliver to
      TLBT any and all consents to the release of information and specific
      authorizations which TLBT reasonably require to gain access to any and all
      such
      information.

    

    Survival

    

    6.3 The
      covenants set forth in this Article shall survive the Closing for the benefit
      of
      TLBT. 

    

    ARTICLE
      7

    CONDITIONS
      PRECEDENT

    

    Conditions
      Precedent in favor of TLBT

    

    7.1 TLBT’s
      obligations to carry out the transactions contemplated hereby are subject to
      the
      fulfillment of each of the following conditions precedent on or before the
      Closing:

    

    
      	 	
              (a)

            	
              all
                documents or copies of documents required to be executed and delivered
                to
                TLBT by BSI or the BSI Shareholders under Section 9.2 will have been
                so
                executed and delivered;

            

    

    

    
      	 	
              (b)

            	
              all
                of the terms, covenants and conditions of this Agreement to be complied
                with or performed by BSI or the BSI Shareholders at or prior to the
                Closing will have been complied with or
                performed;

            

    

    

    
      	 	
              (c)

            	
              TLBT
                shall have completed its review and inspection of the books and records
                of
                BSI and shall be satisfied with same in all material
                respects;

            

    

    

    
      	 	
              (d)

            	
              title
                to the BSI Shares held by the BSI Shareholders and to the BSI Assets
                will
                be free and clear of all mortgages, liens, charges, pledges, security
                interests, encumbrances or other claims
                whatsoever;

            

    

     

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    
 

    
      	 	
              (e)

            	
              the
                Articles of Merger shall be executed by BSI in form acceptable for
                filing
                with the Nevada Secretary of State;

            

    

    

    
      	 	
              (f)

            	
              subject
                to Article 8 hereof, there will not have
                occurred

            

    

    

    
      	 	
              (i)

            	
              any
                material adverse change in the financial position or condition of
                BSI, its
                liabilities or the BSI Assets or any damage, loss or other change
                in
                circumstances materially and adversely affecting the BSI Business
                or the
                BSI Assets or BSI's right to carry on the BSI Business, other than
                (i)
                changes described in the Schedule “A” hereto and (ii) changes in the
                ordinary course of business, none of which has been materially adverse,
                or

            

    

    

    
      	 	
              (ii)

            	
              any
                damage, destruction, loss or other event, including changes to any
                laws or
                statutes applicable to BSI or the BSI Business (whether or not covered
                by
                insurance) materially and adversely affecting BSI, the BSI Business
                or the
                BSI Assets; 

            

    

    

    
      	 	
              (i)

            	
              BSI
                debt obligations shall consist of no more than $100,000 of unsecured
                bank
                debt and $72,000 in unsecured vendor debt, such amounts to be reduced
                by
                any payments made using the $200,000 previously loaned to BSI by
                TLBT;

            

    

    

    
      	 	
              (j)

            	
              BSI
                cash assets shall consist of no less than $200,000, such amount to
                be
                reduced by any payments made to debt referenced in
                7.1(i);

            

    

    

    
      	 	
              (g)

            	
              TLBT
                shall have received satisfactory confirmation that the customer
                relationships of BSI shall not be negatively impacted by the Merger;
                and

            

    

    

    
      	 	
              (h)

            	
              the
                transactions contemplated hereby shall have been approved by all
                other
                regulatory authorities having jurisdiction over the subject matter
                hereof,
                if any.

            

    

     

    Waiver
      by TLBT

    

    7.2 The
      conditions precedent set out in the preceding section are inserted for the
      exclusive benefit of TLBT and any such condition may be waived in whole or
      in
      part by TLBT at or prior to Closing by delivering to BSI and the BSI
      Shareholders a written waiver to that effect signed by TLBT. In the event that
      the conditions precedent set out in the preceding section are not satisfied
      on
      or before the Closing, TLBT shall be released from all obligations under this
      Agreement.

    

    Conditions
      Precedent in Favor of BSI and the BSI Shareholders

    

    7.3 The
      obligations of BSI and the BSI Shareholders to carry out the transactions
      contemplated hereby is subject to the fulfillment of each of the following
      conditions precedent on or before the Closing:

    

    
      	 	
              (a)

            	
              all
                documents or copies of documents required to be executed and delivered
                to
                BSI or the BSI Shareholder by TLBT or Acquirer under Section 9.3
                will have
                been so executed and delivered;

            

    

     

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    
 

    
      	 	
              (b)

            	
              all
                of the terms, covenants and conditions of this Agreement to be complied
                with or performed by TLBT at or prior to the Closing will have been
                complied with or performed;

            

    

    

    
      	 	
              (c)

            	
              BSI
                shall have completed its review and inspection of the books and records
                of
                TLBT and its subsidiaries and shall be satisfied with same in all
                material
                respects;

            

    

    

    
      	 	
              (d)

            	
              TLBT
                will have delivered the Acquisition Shares to be issued pursuant
                to the
                terms of the Merger to the BSI Shareholders at the Closing and the
                Acquisition Shares will be registered on the books of TLBT in the
                name of
                the BSI Shareholders at the Effective
                Time;

            

    

    

    
      	 	
              (e)

            	
              title
                to the Acquisition Shares will be free and clear of all mortgages,
                liens,
                charges, pledges, security interests, encumbrances or other claims
                whatsoever;

            

    

    

    
      	 	
              (f)

            	
              payment
                of the Cash Consideration required to be paid as of the Closing Date
                shall
                have been made;

            

    

    

    
      	 	
              (g)

            	
              the
                Articles of Merger shall be executed by the Acquirer in form acceptable
                for filing with the Nevada Secretary of State;

            

    

    

    
      	 	
              (h)

            	
              subject
                to Article 8 hereof, there will not have
                occurred

            

    

    

    
      	 	
              (i)

            	
              any
                material adverse change in the financial position or condition of
                TLBT,
                its subsidiaries, their assets of liabilities or any damage, loss
                or other
                change in circumstances materially and adversely affecting TLBT or
                the
                TLBT Business or TLBT’ right to carry on the TLBT Business, other than
                changes in the ordinary course of business, none of which has been
                materially adverse, or

            

    

    

    
      	 	
              (ii)

            	
              any
                damage, destruction, loss or other event, including changes to any
                laws or
                statutes applicable to TLBT or the TLBT Business (whether or not
                covered
                by insurance) materially and adversely affecting TLBT, its subsidiaries
                or
                its assets; and

            

    

    

    
      	 	
              (i)

            	
              the
                transactions contemplated hereby shall have been approved by all
                other
                regulatory authorities having jurisdiction over the subject matter
                hereof,
                if any. 

            

    

     

    Waiver
      by BSI and the BSI Shareholders

    

    7.4 The
      conditions precedent set out in the preceding section are inserted for the
      exclusive benefit of BSI and the BSI Shareholders and any such condition may
      be
      waived in whole or in part by BSI or the BSI Shareholders at or prior to the
      Closing by delivering to TLBT a written waiver to that effect signed by BSI
      and
      the BSI Shareholders. In the event that the conditions precedent set out in
      the
      preceding section are not satisfied on or before the Closing BSI and the BSI
      Shareholders shall be released from all obligations under this
      Agreement.

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    

    Termination

    

    7.6 Notwithstanding
      any provision herein to the contrary, if the Closing does not occur on or before
      June 30, 2007, this Agreement will be at an end and will have no further force
      or
      effect, unless otherwise agreed upon by the parties in writing.

    

    Confidentiality

    

    7.7 Notwithstanding
      any provision herein to the contrary, the parties hereto agree that the
      existence and terms of this Agreement are confidential and that if this
      Agreement is terminated pursuant to the preceding section the parties agree
      to
      return to one another any and all financial, technical and business documents
      delivered to the other party or parties in connection with the negotiation
      and
      execution of this Agreement and shall keep the terms of this Agreement and
      all
      information and documents received from BSI and TLBT and the contents thereof
      confidential and not utilize nor reveal or release same, provided, however,
      that
      TLBT may be required to issue news releases regarding the execution and
      consummation of this Agreement and file a Current Report on Form 8-K with the
      Securities and Exchange Commission respecting the proposed Merger contemplated
      hereby together with such other documents as are required to maintain the
      currency of TLBT’ filings with the Securities and Exchange
      Commission.

    

    No-Shop
      Provision

    

    7.8 From
      the
      date hereof until the close of business on June 30, 2007, the parties hereto
      agree that they shall not, nor will they cause their directors, officers,
      employees, agents and representatives to, directly or indirectly, solicit or
      entertain offers from, hold meetings or discussions with, or in any manner
      encourage, accept or consider any proposal of, any other person relating to
      the
      acquisition of BSI, shares of BSI’s capital stock, securities convertible into
      or exchangeable for shares of BSI’s capital stock, or BSI’s assets or business,
      in whole or in part, whether directly or indirectly, through purchase, merger,
      consolidation, original issuance, or otherwise. BSI and the BSI Shareholders
      will immediately notify TLBT in writing regarding any such contact from the
      date
      hereof until the close of business on June 30, 2007.

    

    ARTICLE
      8

    RISK

    

    Material
      Change in the Business of BSI

    

    8.1 If
      any
      material loss or damage to the BSI Business occurs prior to Closing and such
      loss or damage, in TLBT' reasonable opinion, cannot be substantially repaired
      or
      replaced within sixty (60) days, TLBT shall, within two (2) days following
      any
      such loss or damage, by notice in writing to BSI, at its option,
      either:

    

    
      	 	
              (a)

            	
              terminate
                this Agreement, in which case no party will be under any further
                obligation to any other party; or

            

    

    

    
      	 	
              (b)

            	
              elect
                to complete the Merger and the other transactions contemplated hereby,
                in
                which case the proceeds and the rights to receive the proceeds of
                all
                insurance covering such loss or damage will, as a condition precedent
                to
                TLBT' obligations to carry out the transactions contemplated hereby,
                be
                vested in BSI or otherwise adequately secured to the satisfaction
                of TLBT
                on or before the Closing Date.

            

    

     

     

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    Material
      Change in the TLBT Business

    

    8.2 If
      any
      material loss or damage to the TLBT Business occurs prior to Closing and such
      loss or damage, in BSI's reasonable opinion, cannot be substantially repaired
      or
      replaced within sixty (60) days, BSI shall, within two (2) days following any
      such loss or damage, by notice in writing to TLBT, at its option,
      either:

    

    
      	 	
              (a)

            	
              terminate
                this Agreement, in which case no party will be under any further
                obligation to any other party; or

            

    

    

    
      	 	
              (b)

            	
              elect
                to complete the Merger and the other transactions contemplated hereby,
                in
                which case the proceeds and the rights to receive the proceeds of
                all
                insurance covering such loss or damage will, as a condition precedent
                to
                BSI's obligations to carry out the transactions contemplated hereby,
                be
                vested in TLBT or otherwise adequately secured to the satisfaction
                of BSI
                on or before the Closing Date.

            

    

    

    ARTICLE
      9

    CLOSING

    

    Closing

    

    9.1 The
      Merger and the other transactions contemplated by this Agreement will be closed
      at the Place of Closing in accordance with the closing procedure set out in
      this
      Article.

    

    Documents
      to be Delivered by BSI

    

    9.2 On
      or
      before the Closing, BSI, Wiedemann and Springer will deliver or cause to be
      delivered to TLBT:

    

    
      	 	
              (a)

            	
              the
                original or certified copies of the charter documents of BSI and
                all
                corporate records documents and instruments of BSI, the corporate
                seal of
                BSI and all books and accounts of
                BSI;

            

    

    

    
      	 	
              (b)

            	
              all
                reasonable consents or approvals required to be obtained by BSI for
                the
                purposes of completing the Merger and preserving and maintaining
                the
                interests of BSI under any and all BSI Material Contracts and in
                relation
                to BSI Assets;

            

    

    

    
      	 	
              (c)

            	
              certified
                copies of such resolutions of the shareholders and directors of BSI
                as are
                required to be passed to authorize the execution, delivery and
                implementation of this Agreement;

            

    

    

    
      	 	
              (d)

            	
              an
                acknowledgement from BSI and the BSI Shareholders of the satisfaction
                of
                the conditions precedent set forth in section 7.3
                hereof;

            

    

    

    
      	 	
              (e)

            	
              the
                Employment Agreements, duly executed by BSI, Wiedemann and
                Springer;

            

    

    

    
      	 	
              (f)

            	
              the
                Articles of Merger, duly executed by BSI;

            

    

    

    
      	 	
              (g)

            	
              the
                Registration Rights Agreement, duly executed by the BSI
                Shareholders;

            

    

     

     

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    
 

    
      	 	
              (h)

            	
              the
                Lock Up Agreement, duly executed by the BSI Shareholders;
                and

            

    

    

    
      	 	
              (i)

            	
              such
                other documents as TLBT may reasonably require to give effect to
                the terms
                and intention of this Agreement.

            

    

    

    Documents
      to be Delivered by TLBT

    

    9.3 On
      or
      before the Closing, TLBT shall deliver or cause to be delivered to BSI and
      the
      BSI Shareholders:

    

    
      	 	
              (a)

            	
              share
                certificates representing the Acquisition Shares duly registered
                in the
                names of the BSI Shareholders;

            

    

    

    
      	 	
              (b)

            	
              the
                Cash Consideration due to be paid on the Closing
                Date;

            

    

    

    
      	 	
              (c)

            	
              certified
                copies of such resolutions of the directors of TLBT as are required
                to be
                passed to authorize the execution, delivery and implementation of
                this
                Agreement;

            

    

    

    
      	 	
              (d)

            	
              a
                certified copy of a resolution of the directors of BSI dated as of
                the
                Closing Date, approving the Employment
                Agreements;

            

    

    

    
      	 	
              (e)

            	
              an
                acknowledgement from TLBT of the satisfaction of the conditions precedent
                set forth in section 7.1 hereof;

            

    

    

    
      	 	
              (f)

            	
              the
                Employment Agreements, duly executed by TLBT:

            

    

    

    
      	 	
              (g)

            	
              the
                Registration Rights Agreement, duly executed by TLBT;
                

            

    

    

    
      	 	
              (h)

            	
              the
                Articles of Merger, duly executed by the
                Acquirer;

            

    

    

    
      	 	
              (i)

            	
              such
                other documents as BSI may reasonably require to give effect to the
                terms
                and intention of this Agreement.

            

    

     

    ARTICLE
      10

    POST-CLOSING
      MATTERS

    

    Forthwith
      after the Closing, TLBT, BSI and the BSI Shareholders agree to use all their
      best efforts to:

    

    
      	 	
              (a)

            	
              file
                the Articles of Merger with Secretary of State of
                Nevada;

            

    

    

    
      	 	
              (b)

            	
              cause
                the directors of BSI to be John King, David Marks and Rudi Wiedemann
                and
                to cause the appointment of an additional director to be chosen by
                John
                King and David Marks;

            

    

    

    
      	 	
              (c)

            	
              issue
                a news release reporting the
                Closing;

            

    

     

    
      	 	
              (d)

            	
              file
                reports on Form 3 (and Form 13D, where applicable) with the Securities
                and
                Exchange Commission disclosing the acquisition of the Acquisition
                Shares
                by the BSI Shareholders.

            

    

     

     

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

     

    ARTICLE
      11

    GENERAL
      PROVISIONS

    

    Submission
      to Jurisdiction; Consent to Service of Process.

    

    11.1 The
      parties hereto hereby irrevocably submit to the exclusive jurisdiction of any
      federal or state court located within the State of Nevada over any dispute
      arising out of or relating to this Agreement or any of the transactions
      contemplated hereby and each party hereby irrevocably agrees that all claims
      in
      respect of such dispute or any suit, action proceeding related thereto may
      be
      heard and determined in such courts. The parties hereby irrevocably waive,
      to
      the fullest extent permitted by applicable Law, any objection which they may
      now
      or hereafter have to the laying of venue of any such dispute brought in such
      court or any defense of inconvenient forum for the maintenance of such dispute.
      Each of the parties hereto agrees that a judgment in any such dispute may be
      enforced in other jurisdictions by suit on the judgment or in any other manner
      provided by law.

    

    11.2 Each
      of
      the parties hereto hereby consents to process being served by any party to
      this
      Agreement in any suit, action or proceeding by the mailing of a copy thereof
      in
      accordance with the provisions of Section 11.6.

    

    Procedure
      for Indemnity Claims

    

    11.3 In
      the
      event that any legal proceedings shall be instituted or that any claim or demand
      (“Claim”) shall be asserted by any person in respect of which payment may be
      sought under this Agreement, the indemnified party shall reasonably and promptly
      cause written notice of the assertion of any Claim of which it has knowledge
      which is covered by this indemnity to be forwarded to the indemnifying party.
      The indemnifying party shall have the right, at its sole option and expense,
      to
      be represented by counsel of its choice, which must be reasonably satisfactory
      to the indemnified party, and to defend against, negotiate, settle or otherwise
      deal with any Claim which relates to any Losses and Expenses with respect to
      which indemnification is provided hereunder. If the indemnifying party elects
      to
      defend against, negotiate, settle or otherwise deal with any Claim which relates
      to any Losses and Expenses indemnified against hereunder, it shall within five
      (5) days (or sooner, if the nature of the Claim so requires) notify the
      indemnified party of its intent to do so. If the indemnifying party elects
      not
      to defend against, negotiate, settle or otherwise deal with any Claim which
      relates to any Losses and Expenses indemnified against hereunder, fails to
      notify the indemnified party of its election as herein provided or contests
      its
      obligation to indemnify the indemnified party for such Losses and Expenses
      under
      this Agreement, the indemnified party may defend against, negotiate, settle
      or
      otherwise deal with such Claim. If the indemnified party defends any Claim,
      then
      the indemnifying party shall reimburse the indemnified party for the Losses
      and
      Expenses of defending such Claim upon submission of periodic bills. If the
      indemnifying party shall assume the defense of any Claim, the indemnified party
      may participate, at his or its own expense, in the defense of such Claim;
      provided, however, that such indemnified party shall be entitled to participate
      in any such defense with separate counsel at the expense of the indemnifying
      party if, (i) so requested by the indemnifying party to participate or (ii)
      in
      the reasonable opinion of counsel to the indemnifying party, a conflict or
      potential conflict exists between the indemnified party and the indemnifying
      party that would make such separate representation advisable; and provided,
      further, that the indemnifying party shall not be required to pay for more
      than
      one such counsel for all indemnified parties in connection with any Claim.
      The
      parties hereto agree to cooperate fully with each other in connection with
      the
      defense, negotiation or settlement of any such Claim. Any settlement of any
      Claim by the indemnifying party shall provide for a full release of Claims
      against the indemnified party and any settlement of any Claim by the indemnified
      party is subject to the reasonable consent of the indemnified
      party.

     

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    

    11.4 After
      any
      final judgment or award shall have been rendered by a court, arbitration board
      or administrative agency of competent jurisdiction and the expiration of the
      time in which to appeal therefrom, or a settlement shall have been consummated,
      or the indemnified party and the indemnifying party shall have arrived at a
      mutually binding agreement with respect to a Claim hereunder, the indemnified
      party shall forward to the indemnifying party notice of any sums due and owing
      by the indemnifying party pursuant to this Agreement with respect to such matter
      and the indemnifying party shall be required to pay all of the sums so due
      and
      owing to the indemnified party by wire transfer of immediately available funds
      within 10 business days after the date of such notice.

    

    11.5 The
      failure of the indemnified party to give reasonably prompt notice of any Claim
      shall not release, waive or otherwise affect the indemnifying party’s
      obligations with respect thereto except to the extent that the indemnifying
      party can demonstrate actual loss and prejudice as a result of such
      failure.

    

    Notice

    

    11.6 Any
      notice required or permitted to be given by any party will be deemed to be
      given
      when in writing and delivered to the address for notice of the intended
      recipient by personal delivery, prepaid single certified or registered mail,
      or
      Facsimile. Any notice delivered by mail shall be deemed to have been received
      on
      the fourth business day after and excluding the date of mailing, except in
      the
      event of a disruption in regular postal service in which event such notice
      shall
      be deemed to be delivered on the actual date of receipt. Any notice delivered
      personally or by Facsimile shall be deemed to have been received on the actual
      date of delivery.

    

    Addresses
      for Service

    

    11.5 The
      address for service of notice of each of the parties hereto is as
      follows:

    

    (a) TLBT
      or
      the Acquirer:

    

    Tech
      Laboratories, Inc.

    1818
      North Farwell Avenue

    Milwaukee,
      Wisconsin 53202

    Attention:
      John King, Chief Executive Officer

    Telephone:
      (414) 283-2616

    Facsimile:
      (312) 873-3739

     

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

    

    Copy
      to:

    

    Thomas
      A.
      Rose, Esq.

    Sichenzia
      Ross Friedman Ference LLP

    61
      Broadway

    New
      York,
      New York 10006

    Phone:
      (212) 930-9700

    Facsimile:
      (212) 930-9725

    

    (b) BSI
      or
      the BSI Shareholders

    

    Biodiesel
      Solutions, Inc.

    1395
      Greg
      Street, Suite #102

    Sparks,
      Nevada 89431

    Attention:
      Rudi Wiedemann, President and Chief Executive Officer

    Telephone:
      (775) 358-6400

    Facsimile:
      (775) 358-6499

    

    Copy
      to:

    

    Hale
      Lane

    5441
      Kietzke Lane, Second Floor 

    Reno,
      Nevada 89511

    Attention:
      David A. Garcia, Esq.

    Telephone:
      (775) 327-3000

    Facsimile:
      (775) 786-6179

    

    Change
      of Address

    

    11.6 Any
      party
      may, by notice to the other parties change its address for notice to some other
      address in North America and will so change its address for notice whenever
      the
      existing address or notice ceases to be adequate for delivery by hand. A post
      office box may not be used as an address for service.

    

    Further
      Assurances

    

    11.7 Each
      of
      the parties will execute and deliver such further and other documents and do
      and
      perform such further and other acts as any other party may reasonably require
      to
      carry out and give effect to the terms and intention of this
      Agreement.

    

    Time
      of the Essence

    

    11.8 Time
      is
      expressly declared to be the essence of this Agreement.

    

    Entire
      Agreement

    

    11.9 The
      provisions contained herein constitute the entire agreement among BSI, the
      BSI
      Shareholders, the Acquirer and TLBT respecting the subject matter hereof and
      supersede all previous communications, representations and agreements, whether
      verbal or written, among BSI, the BSI Shareholders, the Acquirer and TLBT with
      respect to the subject matter hereof.

     

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    

    Successors
      and Assigns

    

    11.10 This
      Agreement will inure to the benefit of and be binding upon the parties hereto
      and their respective heirs, executors, administrators, successors and permitted
      assigns.

    

    Assignment

    

    11.11 This
      Agreement is not assignable without the prior written consent of the parties
      hereto. 

    

    Counterparts

    

    11.12 This
      Agreement may be executed in counterparts, each of which when executed by any
      party will be deemed to be an original and all of which counterparts will
      together constitute one and the same Agreement. Delivery of executed copies
      of
      this Agreement by Facsimile will constitute proper delivery, provided that
      originally executed counterparts are delivered to the parties within a
      reasonable time thereafter.

    

    Applicable
      Law

    

    11.13 This
      Agreement is subject to the laws of the State of Nevada.

    

    [Remainder
      of page intentionally left blank.]

    

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF
      the
      parties have executed this Agreement effective as of the day and year first
      above written.

     

    
      	 	 	 
	 	TECH LABORATORIES,
              INC.
	 
 	 
 	 
 
	
            	By:  	/s/ John King 
	 	
              
John
              King, CEO

       

      
        	 	 	 
	 	BSI ACQUISITIONS,
                INC.
	 
 	 
 	 
 
	
              	By:  	/s/ John King 
	 	
                
John
                King, CEO

        
           

          
            	 	 	 
	 	BIODIESEL SOLUTIONS,
                    INC.
	 
 	 
 	 
 
	
                  	By:  	/s/ Rudolf Wiedemann 
	 	
                    
Rudolf
                    Wiedemann, President

            
               

              
                	 	 	 
	
                      	
                      	/s/ Rudolf Wiedemann
	 	
                        
Rudolf
                        Wiedemann

                
                   

                  
                    	 	 	 
	
                          	
                          	/s/ Gregory
                            Springer
	 	
                            
Gregory
                            Springer

                     

                  

                

              

            

          

        

        
          	 	 	 
	 	
                  KEN
                    THOMAS AND

                  MARYANNE
                    HARZHEIM,

                  TRUSTEES
                    OF THE THOMAS-

                  HARZHEIM
                    TRUST

                
	 
 	 
 	 
 
	
                	By:  	/s/ Ken Thomas
	 	 	
                  

                
	 	 	 
	 	By: 	/s/ Maryanne Harzheim 
	 	
                  
Name:
	 	Title:Trustee

      

    

     

      

    
      
         

      

      
        33SECURITIES
      PURCHASE AGREEMENT

    

    THIS SECURITIES
      PURCHASE AGREEMENT
      (this
“Agreement”),
      dated
      as of July 2, 2007, by and among TECH
      LABORATORIES, INC.,
      a New
      Jersey corporation (the “Company”),
      and
      the Buyers listed on Schedule I attached hereto (individually, a
“Buyer”
or
      collectively “Buyers”).

     

    WITNESSETH

    

    WHEREAS,
      the
      Company and the Buyer(s) are executing and delivering this Agreement in reliance
      upon an exemption from securities registration pursuant to Section 4(2) and/or
      Rule 506 of Regulation D (“Regulation
      D”)
      as
      promulgated by the U.S. Securities and Exchange Commission (the “SEC”)
      under
      the Securities Act of 1933, as amended (the “Securities
      Act”);

     

    WHEREAS,
      the
      parties desire that, upon the terms and subject to the conditions contained
      herein, the Company shall issue and sell to the Buyer(s), as provided herein,
      and the Buyer(s) shall purchase (i) up to Two Million Seven Hundred Thousand
      Dollars ($2,700,000) of secured convertible debentures in the form attached
      hereto as “Exhibit
      A”
(the
      “Convertible
      Debentures”),
      which
      shall be convertible into shares of the Company’s common stock, par value $0.01
      (the “Common
      Stock”)
      (as
      converted, the “Conversion
      Shares”)
      and
      (ii) Warrants in the form attached hereto as “Exhibit
      A”
(the
      “Warrants”)
      to
      purchase additional shares of Common Stock (the “Warrant
      Shares”)
      in the
      amounts set forth next to each Buyer’s name on Schedule I, of which Two Million
      Dollars ($2,000,000) shall be purchased on the date hereof (the “First
      Closing”)
      and
      Seven Hundred Thousand Dollars ($700,000) shall be purchased within two (2)
      day’s after the satisfaction of the conditions set forth in Section 7(b) hereof
      (the “Second
      Closing”)
      (individually referred to as a “Closing”
      collectively referred to as the “Closings”)
      for a
      total purchase price of up to Two Million Seven Hundred Thousand Dollars
      ($2,700,000), (the “Purchase
      Price”)
      in the
      respective amounts set forth opposite each Buyer(s) name on Schedule I (the
      “Subscription
      Amount”);
      

     

    WHEREAS,
      contemporaneously with the execution and delivery of this Agreement, the parties
      hereto are executing and delivering an amendment to the Registration Rights
      Agreement between the parties hereto dated as of April __, 2007 (the
“Registration
      Rights Agreement”)
      pursuant to which the Company has agreed to provide certain registration rights
      under the Securities Act and the rules and regulations promulgated there under,
      and applicable state securities laws; 

     

    WHEREAS,
      all the
      obligations of the Company shall be secured by a security interest pursuant
      to
      the Restated Security Agreement dated April __, 2007, as amended (“Security
      Agreement”)
      and
      all of the assets of the Company identified therein and perfected via the
      corresponding UCC-1 No.: 22395825 filed with the New Jersey Secretary of State
      UCC Division on June 1, 2004, as well as a security interest in all of the
      assets of Renewal Fuels, Inc., incorporated and existing under the laws of
      Delaware and a subsidiary of the Company (“Renewal
      Fuels”),
      and
      all other subsidiaries of the Company;

     

    WHEREAS,
      all the
      obligations of the Company are further secured by a security interest in the
      shares of capital stock of Renewal Fuels owned by the Company as set forth
      in
      the Pledge and Escrow Agreement dated April 20, 2007 herewith (the “Pledge
      and Escrow Agreement”)
      by and
      between the Company and the Buyers;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    WHEREAS,
      all the
      obligations of the Company are further secured by a security interest in Patent
      Collateral, as this term is defined in the Patent Security Agreement (the
“Patent
      Security Agreement”)
      to be
      entered into on or before the date hereof by and between the Company, Renewal
      Fuels and the Buyers as evidenced by the Patent Security Agreement (the Security
      Agreement, the Pledge and Escrow Agreement, and the Patent Security Agreement
      are collectively referred to as the “Security
      Documents”);
      

     

    WHEREAS,
      contemporaneously with the execution and delivery of this Agreement, the parties
      hereto are executing and delivering Irrevocable Transfer Agent Instructions
      (the
“Irrevocable
      Transfer Agent Instructions”);
      and

     

    WHEREAS,
      the
      Convertible Debentures, the Conversion Shares, the Warrants, and the Warrants
      Shares collectively are referred to herein as the “Securities”).
      

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants and other agreements contained in this
      Agreement the Company and the Buyer(s) hereby agree as follows:

     

    1. PURCHASE
      AND SALE OF CONVERTIBLE DEBENTURES.

     

    (a) Purchase
      of Convertible Debentures.
      Subject
      to the satisfaction (or waiver) of the terms and conditions of this Agreement,
      each Buyer agrees, severally and not jointly, to purchase at each Closing and
      the Company agrees to sell and issue to each Buyer, severally and not jointly,
      at each Closing, Convertible Debentures in amounts corresponding with the
      Subscription Amount set forth opposite each Buyer’s name on Schedule I hereto
      and the Warrants to acquire up that number of Warrant Shares as set forth
      opposite such Buyer’s name in column (5) on Schedule I . 

     

    (b) Closing
      Dates.
      The
      First Closing of the purchase and sale of the Convertible Debentures shall
      take
      place at 10:00 a.m. Eastern Standard Time on the date hereof, subject to
      notification of satisfaction of the conditions to the First Closing set forth
      herein and in Sections 6 and 7 below (or such later date as is mutually agreed
      to by the Company and the Buyer(s)) (the “First
      Closing Date”)
      and
      the Second Closing of the purchase and sale of the Convertible Debentures shall
      take place at 4:00 p.m. Eastern Standard Time on the second (2nd) business
      day
      following the date of satisfaction of all the conditions to the Second Closing
      set forth herein and in Sections 6 and 7 below (or such later date as is
      mutually agreed to by the Company and the Buyer(s)) (the “Second
      Closing Date”)
      (collectively referred to a the “Closing
      Dates”).
      The
      Closings shall occur on the respective Closing Dates at the offices of Yorkville
      Advisors, LLC, 3700 Hudson Street, Suite 3700, Jersey City, New Jersey 07302
      (or
      such other place as is mutually agreed to by the Company and the Buyer(s)).
      

     

    (c) Form
      of Payment.
      Subject
      to the satisfaction of the terms and conditions of this Agreement, on each
      Closing Date, (i) the Buyers shall deliver to the Company such aggregate
      proceeds for the Convertible Debentures to be issued and sold to such Buyer
      at
      such Closing, minus the fees to be paid directly from the proceeds of such
      Closing as set forth herein, and (ii) the Company shall deliver to each
      Buyer, Convertible Debentures which such Buyer is purchasing at such Closing
      in
      amounts indicated opposite such Buyer’s name on Schedule I, duly executed on
      behalf of the Company.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    2. BUYER’S
      REPRESENTATIONS AND WARRANTIES.

     

    Each
      Buyer represents and warrants, severally and not jointly, that:

     

    (a) Investment
      Purpose.
      Each
      Buyer is acquiring the Securities for its own account for investment only and
      not with a view towards, or for resale in connection with, the public sale
      or
      distribution thereof, except pursuant to sales registered or exempted under
      the
      Securities Act; provided, however, that by making the representations herein,
      such Buyer reserves the right to dispose of the Securities at any time in
      accordance with or pursuant to an effective registration statement covering
      such
      Securities or an available exemption under the Securities Act. Such Buyer does
      not presently have any agreement or understanding, directly or indirectly,
      with
      any Person to distribute any of the Securities. 

     

    (b) Accredited
      Investor Status.
      Each
      Buyer is an “Accredited
      Investor”
as
      that
      term is defined in Rule 501(a) (3) of Regulation D.

     

    (c) Reliance
      on Exemptions.
      Each
      Buyer understands that the Securities are being offered and sold to it in
      reliance on specific exemptions from the registration requirements of United
      States federal and state securities laws and that the Company is relying in
      part
      upon the truth and accuracy of, and such Buyer’s compliance with, the
      representations, warranties, agreements, acknowledgments and understandings
      of
      such Buyer set forth herein in order to determine the availability of such
      exemptions and the eligibility of such Buyer to acquire the
      Securities.

     

    (d) Information.
      Each
      Buyer and its advisors (and his or, its counsel), if any, have been furnished
      with all materials relating to the business, finances and operations of the
      Company and information he deemed material to making an informed investment
      decision regarding his purchase of the Securities, which have been requested
      by
      such Buyer. Each Buyer and its advisors, if any, have been afforded the
      opportunity to ask questions of the Company and its management. Neither such
      inquiries nor any other due diligence investigations conducted by such Buyer
      or
      its advisors, if any, or its representatives shall modify, amend or affect
      such
      Buyer’s right to rely on the Company’s representations and warranties contained
      in Section 3 below. Each Buyer understands that its investment in the Securities
      involves a high degree of risk. Each Buyer is in a position regarding the
      Company, which, based upon employment, family relationship or economic
      bargaining power, enabled and enables such Buyer to obtain information from
      the
      Company in order to evaluate the merits and risks of this investment. Each
      Buyer
      has sought such accounting, legal and tax advice, as it has considered necessary
      to make an informed investment decision with respect to its acquisition of
      the
      Securities.

     

    (e) No
      Governmental Review.
      Each
      Buyer understands that no United States federal or state agency or any other
      government or governmental agency has passed on or made any recommendation
      or
      endorsement of the Securities, or the fairness or suitability of the investment
      in the Securities, nor have such authorities passed upon or endorsed the merits
      of the offering of the Securities.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (f) Transfer
      or Resale.
      Each
      Buyer understands that except as provided in the Registration Rights Agreement:
      (i) the Securities have not been and are not being registered under the
      Securities Act or any state securities laws, and may not be offered for sale,
      sold, assigned or transferred unless (A) subsequently registered thereunder,
      (B)
      such Buyer shall have delivered to the Company an opinion of counsel, in a
      generally acceptable form, to the effect that such Securities to be sold,
      assigned or transferred may be sold, assigned or transferred pursuant to an
      exemption from such registration requirements, or (C) such Buyer provides the
      Company with reasonable assurances (in the form of seller and broker
      representation letters) that such Securities can be sold, assigned or
      transferred pursuant to Rule 144, Rule 144(k), or Rule 144A promulgated under
      the Securities Act, as amended (or a successor rule thereto) (collectively,
      “Rule
      144”),
      in
      each case following the applicable holding period set forth therein; (ii) any
      sale of the Securities made in reliance on Rule 144 may be made only in
      accordance with the terms of Rule 144 and further, if Rule 144 is not
      applicable, any resale of the Securities under circumstances in which the
      seller (or the person through whom the sale is made) may be deemed to be an
      underwriter (as that term is defined in the Securities Act) may require
      compliance with some other exemption under the Securities Act or the rules
      and
      regulations of the SEC thereunder; and (iii) neither the Company nor any other
      person is under any obligation to register the Securities under the Securities
      Act or any state securities laws or to comply with the terms and conditions
      of
      any exemption thereunder. 

     

    (g) Legends.
      Except
      as provided herein, each Buyer agrees to the imprinting, on each document
      evidencing the Securities so long as is required by this Section 2(g), of a
      restrictive legend in substantially the following form:

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
      SECURITIES HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A
      VIEW
      TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
      IN
      THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
      THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR
      AN
      OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
      REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS. 

     

    Certificates
      evidencing the Conversion Shares or Warrant Shares shall not contain any legend
      (including the legend set forth above), (i) while a registration statement
      (including the Registration Statement) covering the resale of such security
      is
      effective under the Securities Act, (ii) following any sale of such Conversion
      Shares or Warrant Shares pursuant to Rule 144, (iii) if such Conversion Shares
      or Warrant Shares are eligible for sale under Rule 144(k), or (iv) if such
      legend is not required under applicable requirements of the Securities Act
      (including judicial interpretations and pronouncements issued by the staff
      of
      the SEC). The Company shall cause its counsel to issue a legal opinion to the
      Company’s transfer agent promptly after the effective date (the “Effective
      Date”)
      of a
      Registration Statement (as defined in the registration Rights Agreement) if
      required by the Company’s transfer agent to effect the removal of the legend
      hereunder. If all or any portion of the Convertible Debentures or Warrants
      are
      exercised by a Buyer that is not an Affiliate of the Company (a “Non-Affiliated
      Buyer”)
      at a
      time when there is an effective registration statement to cover the resale
      of
      the Conversion Shares or the Warrant Shares, such Conversion Shares or Warrant
      Shares shall be issued free of all legends. The Company agrees that following
      the Effective Date or at such time as such legend is no longer required under
      this Section 2(g), it will, no later than three (3) Trading Days following
      the
      delivery by a Non-Affiliated Buyer to the Company or the Company’s transfer
      agent of a certificate representing Conversion Shares or Warrant Shares, as
      the
      case may be, issued with a restrictive legend (such third Trading Day, the
      “Legend
      Removal Date”),
      deliver or cause to be delivered to such Non-Affiliated Buyer a certificate
      representing such shares that is free from all restrictive and other legends.
      The Company may not make any notation on its records or give instructions to
      any
      transfer agent of the Company that enlarge the restrictions on transfer set
      forth in this Section. Each Buyer acknowledges that the Company’s agreement
      hereunder to remove all legends from Conversion Shares or Warrant Shares is
      not
      an affirmative statement or representation that such Conversion Shares or
      Warrant Shares are freely tradable. Each Buyer, severally and not jointly with
      the other Buyers, agrees that the removal of the restrictive legend from
      certificates representing Securities as set forth in this Section 3(g) is
      predicated upon the Company’s reliance that the buyer will sell any Securities
      pursuant to either the registration requirements of the Securities Act,
      including any applicable prospectus delivery requirements, or an exemption
      therefrom, and that if Securities are sold pursuant to a Registration Statement,
      they will be sold in compliance with the plan of distribution set forth
      therein.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (h) Authorization,
      Enforcement.
      This
      Agreement has been duly and validly authorized, executed and delivered on behalf
      of such Buyer and is a valid and binding agreement of such Buyer enforceable
      in
      accordance with its terms, except as such enforceability may be limited by
      general principles of equity or applicable bankruptcy, insolvency,
      reorganization, moratorium, liquidation and other similar laws relating to,
      or
      affecting generally, the enforcement of applicable creditors’ rights and
      remedies.

     

    (i) Receipt
      of Documents.
      Each
      Buyer and his or its counsel has received and read in their entirety: (i) this
      Agreement and each representation, warranty and covenant set forth herein and
      the Transaction Documents (as defined herein); (ii) all due diligence and other
      information necessary to verify the accuracy and completeness of such
      representations, warranties and covenants; (iii) the Company’s Form 10-KSB for
      the fiscal year ended December 31, 2006; (iv) the Company’s Form 10-QSB for the
      fiscal quarter ended March 31, 2007 and (v) answers to all questions each Buyer
      submitted to the Company regarding an investment in the Company; and each Buyer
      has relied on the information contained therein and has not been furnished
      any
      other documents, literature, memorandum or prospectus.

     

    (j) Due
      Formation of Corporate and Other Buyers.
      If the
      Buyer(s) is a corporation, trust, partnership or other entity that is not an
      individual person, it has been formed and validly exists and has not been
      organized for the specific purpose of purchasing the Securities and is not
      prohibited from doing so.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (k) No
      Legal Advice From the Company.
      Each
      Buyer acknowledges, that it had the opportunity to review this Agreement and
      the
      transactions contemplated by this Agreement with his or its own legal counsel
      and investment and tax advisors. Each Buyer is relying solely on such counsel
      and advisors and not on any statements or representations of the Company or
      any
      of its representatives or agents for legal, tax or investment advice with
      respect to this investment, the transactions contemplated by this Agreement
      or
      the securities laws of any jurisdiction. 

     

    3. REPRESENTATIONS
      AND WARRANTIES OF THE COMPANY.

     

    Except
      as
      set forth under the corresponding section of the Disclosure Schedules which
      Disclosure Schedules shall be deemed a part hereof and to qualify any
      representation or warranty otherwise made herein to the extent of such
      disclosure, the Company hereby makes the representations and warranties set
      forth below to each Buyer: 

     

    (a) Subsidiaries.
      All of
      the direct and indirect subsidiaries of the Company are set forth on
Schedule
      3(a).
      The
      Company owns, directly or indirectly, all of the capital stock or other equity
      interests of each subsidiary free and clear of any liens, and all the issued
      and
      outstanding shares of capital stock of each subsidiary are validly issued and
      are fully paid, non-assessable and free of preemptive and similar rights to
      subscribe for or purchase securities.

     

    (b) Organization
      and Qualification.
      The
      Company and its subsidiaries are corporations duly organized and validly
      existing in good standing under the laws of the jurisdiction in which they
      are
      incorporated, and have the requisite corporate power to own their properties
      and
      to carry on their business as now being conducted. Each of the Company and
      its
      subsidiaries is duly qualified as a foreign corporation to do business and
      is in
      good standing in every jurisdiction in which the nature of the business
      conducted by it makes such qualification necessary, except to the extent that
      the failure to be so qualified or be in good standing would not have or
      reasonably be expected to result in (i) a material adverse effect on the
      legality, validity or enforceability of any Transaction Document, (ii) a
      material adverse effect on the results of operations, assets, business or
      condition (financial or otherwise) of the Company and the subsidiaries, taken
      as
      a whole, or (iii) a material adverse effect on the Company’s ability to perform
      in any material respect on a timely basis its obligations under any Transaction
      Document (any of (i), (ii) or (iii), a “Material
      Adverse Effect”)
      and no
      proceeding has been instituted in any such jurisdiction revoking, limiting
      or
      curtailing or seeking to revoke, limit or curtail such power and authority
      or
      qualification.

     

    (c) Authorization,
      Enforcement, Compliance with Other Instruments.
      (i) The Company has the requisite corporate power and authority to enter
      into and perform its obligations under this Agreement, the Convertible
      Debentures, the Warrants, the Security Documents, the Registration Rights
      Agreement, the Irrevocable Transfer Agent Instructions, and each of the other
      agreements entered into by the parties hereto in connection with the
      transactions contemplated by this Agreement (collectively the “Transaction
      Documents”)
      and to
      issue the Securities in accordance with the terms hereof and thereof, (ii)
      the
      execution and delivery of the Transaction Documents by the Company and the
      consummation by it of the transactions contemplated hereby and thereby,
      including, without limitation, the issuance of the Securities, the reservation
      for issuance and the issuance of the Conversion Shares, and the reservation
      for
      issuance and the issuance of the Warrant Shares, have been duly authorized
      by
      the Company’s Board of Directors and no further consent or authorization is
      required by the Company, its Board of Directors or its stockholders, (iii)
      the
      Transaction Documents have been duly executed and delivered by the Company,
      (iv)
      the Transaction Documents constitute the valid and binding obligations of the
      Company enforceable against the Company in accordance with their terms, except
      as such enforceability may be limited by general principles of equity or
      applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
      or
      similar laws relating to, or affecting generally, the enforcement of creditors’
rights and remedies. The authorized officer of the Company executing the
      Transaction Documents knows of no reason why the Company cannot file the
      Registration Statement as required under the Registration Rights Agreement
      or
      perform any of the Company’s other obligations under the Transaction Documents.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (d) Capitalization.
      The
      authorized capital stock of the Company consists of 3,000,000,000 shares of
      Common Stock and 20,000,000 shares of Preferred Stock, par value $0.01
      (“Preferred
      Stock”)
      of
      which 10,100,210 shares of Common Stock and zero shares of Preferred Stock
      are
      issued and outstanding. All of the outstanding shares of capital stock of the
      Company are validly issued, fully paid and nonassessable, have been issued
      in
      compliance with all federal and state securities laws, and none of such
      outstanding shares was issued in violation of any preemptive rights or similar
      rights to subscribe for or purchase securities. Except as disclosed in Schedule
      3(d): (i) none of the Company's capital stock is subject to preemptive rights
      or
      any other similar rights or any liens or encumbrances suffered or permitted
      by
      the Company; (ii) there are no outstanding options, warrants, scrip, rights
      to
      subscribe to, calls or commitments of any character whatsoever relating to,
      or
      securities or rights convertible into, or exercisable or exchangeable for,
      any
      capital stock of the Company or any of its subsidiaries, or contracts,
      commitments, understandings or arrangements by which the Company or any of
      its
      subsidiaries is or may become bound to issue additional capital stock of the
      Company or any of its subsidiaries or options, warrants, scrip, rights to
      subscribe to, calls or commitments of any character whatsoever relating to,
      or
      securities or rights convertible into, or exercisable or exchangeable for,
      any
      capital stock of the Company or any of its subsidiaries; (iii) there are no
      outstanding debt securities, notes, credit agreements, credit facilities or
      other agreements, documents or instruments evidencing indebtedness of the
      Company or any of its subsidiaries or by which the Company or any of its
      subsidiaries is or may become bound; (iv) there are no financing statements
      securing obligations in any material amounts, either singly or in the aggregate,
      filed in connection with the Company or any of its subsidiaries; (v) there
      are
      no outstanding securities or instruments of the Company or any of its
      subsidiaries which contain any redemption or similar provisions, and there
      are
      no contracts, commitments, understandings or arrangements by which the Company
      or any of its subsidiaries is or may become bound to redeem a security of the
      Company or any of its subsidiaries; (vi) there are no securities or instruments
      containing anti-dilution or similar provisions that will be triggered by the
      issuance of the Securities; (vii) the Company does not have any stock
      appreciation rights or "phantom stock" plans or agreements or any similar plan
      or agreement; and (viii) the Company and its subsidiaries have no liabilities
      or
      obligations required to be disclosed in the SEC Documents but not so disclosed
      in the SEC Documents, other than those incurred in the ordinary course of the
      Company's or its subsidiaries' respective businesses and which, individually
      or
      in the aggregate, do not or would not have a Material Adverse Effect. The
      Company has furnished to the Buyers true, correct and complete copies of the
      Company's Certificate of Incorporation, as amended and as in effect on the
      date
      hereof (the “Certificate
      of Incorporation”),
      and
      the Company's Bylaws, as amended and as in effect on the date hereof (the
“Bylaws”),
      and
      the terms of all securities convertible into, or exercisable or exchangeable
      for, shares of Common Stock and the material rights of the holders thereof
      in
      respect thereto. No further approval or authorization of any stockholder, the
      Board of Directors of the Company or others is required for the issuance and
      sale of the Securities. There are no stockholders agreements, voting agreements
      or other similar agreements with respect to the Company’s capital stock to which
      the Company is a party or, to the knowledge of the Company, between or among
      any
      of the Company’s stockholders. 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (e) Issuance
      of Securities.
      The
      issuance of the Convertible Debentures and the Warrants is duly authorized
      and
      free from all taxes, liens and charges with respect to the issue thereof. Upon
      conversion in accordance with the terms of the Convertible Debentures or
      exercise in accordance with the Warrants, as the case may be, the Conversion
      Shares and Warrant Shares, respectively, when issued will be validly issued,
      fully paid and nonassessable, free from all taxes, liens and charges with
      respect to the issue thereof. The Company has reserved from its duly authorized
      capital stock the appropriate number of shares of Common Stock as set forth
      in
      this Agreement. 

     

    (f) No
      Conflicts.
      The
      execution, delivery and performance of the Transaction Documents by the Company
      and the consummation by the Company of the transactions contemplated hereby
      and
      thereby (including, without limitation, the issuance of the Convertible
      Debentures and the Warrants, and reservation for issuance and issuance of the
      Conversion Shares and the Warrant Shares) will not (i) result in a violation
      of
      any certificate of incorporation, certificate of formation, any certificate
      of
      designations or other constituent documents of the Company or any of its
      subsidiaries, any capital stock of the Company or any of its subsidiaries or
      bylaws of the Company or any of its subsidiaries or (ii) conflict with, or
      constitute a default (or an event which with notice or lapse of time or both
      would become a default) in any respect under, or give to others any rights
      of
      termination, amendment, acceleration or cancellation of, any agreement,
      indenture or instrument to which the Company or any of its subsidiaries is
      a
      party, or (iii) result in a violation of any law, rule, regulation, order,
      judgment or decree (including foreign, federal and state securities laws and
      regulations and the rules and regulations of the National Association of
      Securities Dealers Inc.’s OTC Bulletin Board) applicable to the Company or any
      of its subsidiaries or by which any property or asset of the Company or any
      of
      its subsidiaries is bound or affected; except in the case of each of clauses
      (ii) and (iii), such as could
      not, individually or in the aggregate, have or reasonably be expected to result
      in a Material Adverse Effect.
      The
      business of the Company and its subsidiaries is not being conducted, and shall
      not be conducted in violation of any material law, ordinance, or regulation
      of
      any governmental entity. Except as specifically contemplated by this Agreement
      and as required under the Securities Act and any applicable state securities
      laws, the Company is not required to obtain any consent, authorization or order
      of, or make any filing or registration with, any court or governmental agency
      in
      order for it to execute, deliver or perform any of its obligations under or
      contemplated by this Agreement or the Registration Rights Agreement in
      accordance with the terms hereof or thereof. All consents, authorizations,
      orders, filings and registrations which the Company is required to obtain
      pursuant to the preceding sentence have been obtained or effected on or prior
      to
      the date hereof. The Company and its subsidiaries are unaware of any facts
      or
      circumstance, which might give rise to any of the foregoing.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (g) SEC
      Documents; Financial Statements.
      The
      Company has filed all reports, schedules, forms, statements and other documents
      required to be filed by it with the SEC under the Securities Exchange Act of
      1934, as amended (the “Exchange
      Act”),
      for
      the two years preceding the date hereof (or such shorter period as the Company
      was required by law or regulation to file such material) (all of the foregoing
      filed prior to the date hereof or amended after the date hereof and all exhibits
      included therein and financial statements and schedules thereto and documents
      incorporated by reference therein, being hereinafter referred to as the
“SEC
      Documents”)
      on
      timely basis or has received a valid extension of such time of filing and has
      filed any such SEC Document prior to the expiration of any such extension.
      The
      Company has delivered to the Buyers or their representatives, or made available
      through the SEC’s website at http://www.sec.gov., true and complete copies of
      the SEC Documents. To the best knowledge of the current management of the
      Company, as of their respective dates, the SEC Documents complied in all
      material respects with the requirements of the Exchange Act and the rules and
      regulations of the SEC promulgated thereunder applicable to the SEC Documents,
      and none of the SEC Documents, at the time they were filed with the SEC,
      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 the light of the circumstances under which they were made, not
      misleading. As of their respective dates, the financial statements of the
      Company included in the SEC Documents complied as to form in all material
      respects with applicable accounting requirements and the published rules and
      regulations of the SEC with respect thereto. Such financial statements have
      been
      prepared in accordance with generally accepted accounting principles,
      consistently applied, during the periods involved (except (i) as may be
      otherwise indicated in such financial statements or the notes thereto, or (ii)
      in the case of unaudited interim statements, to the extent they may exclude
      footnotes or may be condensed or summary statements) and fairly present in
      all
      material respects the financial position of the Company as of the dates thereof
      and the results of its operations and cash flows for the periods then ended
      (subject, in the case of unaudited statements, to normal year-end audit
      adjustments). No other information provided by or on behalf of the Company
      to
      the Buyers which is not included in the SEC Documents, including, without
      limitation, information referred to in Section 2(i) of this Agreement, contains
      any untrue statement of a material fact or omits to state any material fact
      necessary in order to make the statements therein, in the light of the
      circumstance under which they are or were made and not misleading. 

     

    (h) 10(b)-5.
      The SEC
      Documents do not include any untrue statements of material fact, nor do they
      omit to state any material fact required to be stated therein necessary to
      make
      the statements made, in light of the circumstances under which they were made,
      not misleading.

     

    (i) Absence
      of Litigation.
      There
      is no action, suit, proceeding, inquiry or investigation before or by any court,
      public board, government agency, self-regulatory organization or body pending
      against or affecting the Company, the Common Stock or any of the Company’s
      subsidiaries, wherein an unfavorable decision, ruling or finding would have
      a
      Material Adverse Effect.

     

    (j) Acknowledgment
      Regarding Buyer’s Purchase of the Convertible Debentures.
      The
      Company acknowledges and agrees that each Buyer is acting solely in the capacity
      of an arm’s length purchaser with respect to this Agreement and the transactions
      contemplated hereby. The Company further acknowledges that each Buyer is not
      acting as a financial advisor or fiduciary of the Company (or in any similar
      capacity) with respect to this Agreement and the transactions contemplated
      hereby and any advice given by each Buyer or any of their respective
      representatives or agents in connection with this Agreement and the transactions
      contemplated hereby is merely incidental to such Buyer’s purchase of the
      Securities. The Company further represents to each Buyer that the Company’s
      decision to enter into this Agreement has been based solely on the independent
      evaluation by the Company and its representatives.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (k) No
      General Solicitation.
      Neither
      the Company, nor any of its affiliates, nor any person acting on its or their
      behalf, has engaged in any form of general solicitation or general advertising
      (within the meaning of Regulation D under the Securities Act) in connection
      with
      the offer or sale of the Securities.

     

    (l) No
      Integrated Offering.
      Neither
      the Company, nor any of its affiliates, nor any person acting on its or their
      behalf has, directly or indirectly, made any offers or sales of any security
      or
      solicited any offers to buy any security, under circumstances that would require
      registration of the Securities under the Securities Act or cause this offering
      of the Securities to be integrated with prior offerings by the Company for
      purposes of the Securities Act.

     

    (m) Employee
      Relations.
      Neither
      the Company nor any of its subsidiaries is involved in any labor dispute or,
      to
      the knowledge of the Company or any of its subsidiaries, is any such dispute
      threatened. None of the Company’s or its subsidiaries’ employees is a member of
      a union and the Company and its subsidiaries believe that their relations with
      their employees are good.

     

    (n) Intellectual
      Property Rights.
      The
      Company and its subsidiaries own or possess adequate rights or licenses to
      use
      all trademarks, trade names, service marks, service mark registrations, service
      names, patents, patent rights, copyrights, inventions, licenses, approvals,
      governmental authorizations, trade secrets and rights necessary to conduct
      their
      respective businesses as now conducted. The Company and its subsidiaries do
      not
      have any knowledge of any infringement by the Company or its subsidiaries of
      trademark, trade name rights, patents, patent rights, copyrights, inventions,
      licenses, service names, service marks, service mark registrations, trade secret
      or other similar rights of others, and, to the knowledge of the Company there
      is
      no claim, action or proceeding being made or brought against, or to the
      Company’s knowledge, being threatened against, the Company or its subsidiaries
      regarding trademark, trade name, patents, patent rights, invention, copyright,
      license, service names, service marks, service mark registrations, trade secret
      or other infringement; and the Company and its subsidiaries are unaware of
      any
      facts or circumstances which might give rise to any of the
      foregoing.

     

    (o) Environmental
      Laws.
      The
      Company and its subsidiaries are (i) in compliance with any and all applicable
      foreign, federal, state and local laws and regulations relating to the
      protection of human health and safety, the environment or hazardous or toxic
      substances or wastes, pollutants or contaminants (“Environmental
      Laws”),
      (ii)
      have received all permits, licenses or other approvals required of them under
      applicable Environmental Laws to conduct their respective businesses and (iii)
      are in compliance with all terms and conditions of any such permit, license
      or
      approval.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (p) Title.
      All
      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.

     

    (q) Insurance.
      The
      Company and each of its subsidiaries is insured by insurers of recognized
      financial responsibility against such losses and risks and in such amounts
      as
      management of the Company believes to be prudent and customary in the businesses
      in which the Company and its subsidiaries are engaged. Neither the Company
      nor
      any such subsidiary has been refused any insurance coverage sought or applied
      for and neither the Company nor any such subsidiary has any reason to believe
      that it will not be able to renew its existing insurance coverage as and when
      such coverage expires or to obtain similar coverage from similar insurers as
      may
      be necessary to continue its business at a cost that would not materially and
      adversely affect the condition, financial or otherwise, or the earnings,
      business or operations of the Company and its subsidiaries, taken as a
      whole.

     

    (r) Regulatory
      Permits.
      The
      Company and its subsidiaries possess all material certificates, authorizations
      and permits issued by the appropriate federal, state or foreign regulatory
      authorities necessary to conduct their respective businesses, and neither the
      Company nor any such subsidiary has received any notice of proceedings relating
      to the revocation or modification of any such certificate, authorization or
      permit.

     

    (s) Internal
      Accounting Controls.
      The
      Company and each of its subsidiaries maintains a system of internal accounting
      controls sufficient to provide reasonable assurance that (i) transactions are
      executed in accordance with management’s general or specific authorizations,
      (ii) transactions are recorded as necessary to permit preparation of financial
      statements in conformity with generally accepted accounting principles and
      to
      maintain asset accountability, and (iii) the recorded amounts for assets are
      compared with the existing assets at reasonable intervals and appropriate action
      is taken with respect to any differences.

     

    (t) No
      Material Adverse Breaches, etc.
      Neither
      the Company nor any of its subsidiaries is subject to any charter, corporate
      or
      other legal restriction, or any judgment, decree, order, rule or regulation
      which in the judgment of the Company’s officers has or is expected in the future
      to have a Material Adverse Effect on the business, properties, operations,
      financial condition, results of operations or prospects of the Company or its
      subsidiaries. Neither the Company nor any of its subsidiaries is in breach
      of
      any contract or agreement which breach, in the judgment of the Company’s
      officers, has or is expected to have a Material Adverse Effect on the business,
      properties, operations, financial condition, results of operations or prospects
      of the Company or its subsidiaries.

     

    (u) Tax
      Status.
      The
      Company and each of its subsidiaries has made and filed all federal and state
      income and all other tax returns, reports and declarations required by any
      jurisdiction to which it is subject and (unless and only to the extent that
      the
      Company and each of its subsidiaries has set aside on its books provisions
      reasonably adequate for the payment of all unpaid and unreported taxes) has
      paid
      all taxes and other governmental assessments and charges that are material
      in
      amount, shown or determined to be due on such returns, reports and declarations,
      except those being contested in good faith and has set aside on its books
      provision reasonably adequate for the payment of all taxes for periods
      subsequent to the periods to which such returns, reports or declarations apply.
      There are no unpaid taxes in any material amount claimed to be due by the taxing
      authority of any jurisdiction, and the officers of the Company know of no basis
      for any such claim.

     

    
      
        
        

      

      
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    (v) Certain
      Transactions.
      Except
      for arm’s length transactions pursuant to which the Company makes payments in
      the ordinary course of business upon terms no less favorable than the Company
      could obtain from third parties and other than the grant of stock options
      disclosed in the SEC Documents, none of the officers, directors, or employees
      of
      the Company is presently a party to any transaction with the Company (other
      than
      for services as employees, officers and directors), including any contract,
      agreement or other arrangement providing for the furnishing of services to
      or
      by, providing for rental of real or personal property to or from, or otherwise
      requiring payments to or from any officer, director or such employee or, to
      the
      knowledge of the Company, any corporation, partnership, trust or other entity
      in
      which any officer, director, or any such employee has a substantial interest
      or
      is an officer, director, trustee or partner.

     

    (w) Fees
      and Rights of First Refusal.
      The
      Company is not obligated to offer the securities offered hereunder on a right
      of
      first refusal basis or otherwise to any third parties including, but not limited
      to, current or former shareholders of the Company, underwriters, brokers, agents
      or other third parties.

     

    (x) Investment
      Company.
      The
      Company is not, and is not an affiliate of, and immediately after receipt of
      payment for the Securities, will not be or be an affiliate of, an “investment
      company” within the meaning of the Investment Company Act of 1940, as amended.
      The Company shall conduct its business in a manner so that it will not become
      subject to the Investment Company Act.

     

    (y) Registration
      Rights.
      To the
      best knowledge of the current management of the Company, other than each of
      the
      Buyers, no Person has any right to cause the Company to effect the registration
      under the Securities Act of any securities of the Company. There are no
      outstanding registration statements not yet declared effective and there are
      no
      outstanding comment letters from the SEC or any other regulatory
      agency.

     

    (z) Private
      Placement.
      Assuming the accuracy of the Buyers’ representations and warranties set forth in
      Section 2, no registration under the Securities Act is required for the offer
      and sale of the Securities by the Company to the Buyers as contemplated hereby.
      The issuance and sale of the Securities hereunder does not contravene the rules
      and regulations of the Primary Market (as defined in section 4(f) herein).
      

     

    (aa) Listing
      and Maintenance Requirements.
      The
      Company’s Common Stock is registered pursuant to Section 12(b) or 12(g) of the
      Exchange Act, and the Company has taken no action designed to terminate, or
      which to its knowledge is likely to have the effect of, terminating the
      registration of the Common Stock under the Exchange Act nor has the Company
      received any notification that the SEC is contemplating terminating such
      registration. The Company has not, in the twelve (12) months preceding the
      date
      hereof, received notice from any Primary Market on which the Common Stock is
      or
      has been listed or quoted to the effect that the Company is not in compliance
      with the listing or maintenance requirements of such Primary 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 listing and maintenance
      requirements.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (bb) Manipulation
      of Price. 
      The Company has not, and to its knowledge no one acting on its behalf has,
      (i)
      taken, directly or indirectly, any action designed to cause or to result in
      the
      stabilization or manipulation of the price of any security of the Company to
      facilitate the sale or resale of any of the Securities, (ii) sold, bid for,
      purchased, or, paid any compensation for soliciting purchases of, any of the
      Securities, or (iii) paid or agreed to pay to any Person any compensation for
      soliciting another to purchase any other securities of the Company, other than,
      in the case of clauses (ii) and (iii), compensation paid to the Company’s
      placement agent in connection with the placement of the Securities.

     

    (cc) Dilutive
      Effect.
      The
      Company understands and acknowledges that the number of Conversion Shares
      issuable upon conversion of the Convertible Debentures and the Warrant Shares
      issuable upon exercise of the Warrants will increase in certain circumstances.
      The Company further acknowledges that its obligation to issue Conversion Shares
      upon conversion of the Convertible Debentures in accordance with this Agreement
      and the Convertible Debentures and its obligation to issue the Warrant Shares
      upon exercise of the Warrants in accordance with this Agreement and the
      Warrants, in each case, is absolute and unconditional regardless of the dilutive
      effect that such issuance may have on the ownership interests of other
      stockholders of the Company.

     

    (dd) Acquisition
      of BioDiesel Solutions, Inc.
      The
      Company has entered into a definitive merger agreement with BioDiesel Solutions,
      Inc. (“BSI”)
      dated
      July 2, 2007 (the “Merger
      Agreement”)
      pursuant to which BSI shall merge into a wholly owned subsidiary of the Company
      (the “Merger”).
      

     

    4. COVENANTS.

     

    (a) Best
      Efforts.
      Each
      party shall use its best efforts to timely satisfy each of the conditions to
      be
      satisfied by it as provided in Sections 6 and 7 of this Agreement.

     

    (b) Form
      D.
      The
      Company agrees to file a Form D with respect to the Securities as required
      under
      Regulation D and to provide a copy thereof to each Buyer promptly after such
      filing. The Company shall, on or before the Closing Date, take such action
      as
      the Company shall reasonably determine is necessary to qualify the Securities,
      or obtain an exemption for the Securities for sale to the Buyers at the Closing
      pursuant to this Agreement under applicable securities or “Blue Sky” laws of the
      states of the United States, and shall provide evidence of any such action
      so
      taken to the Buyers on or prior to the Closing Date.

     

    (c) Reporting
      Status.
      Until
      the earlier of (i) the date as of which the Buyer(s) may sell all of the
      Securities without restriction pursuant to Rule 144(k) promulgated under the
      Securities Act (or successor thereto), or (ii) the date on which (A) the Buyers
      shall have sold all the Securities and (B) none of the Convertible Debentures
      or
      Warrants are outstanding (the “Registration
      Period”),
      the
      Company shall file in a timely manner all reports required to be filed with
      the
      SEC pursuant to the Exchange Act and the regulations of the SEC thereunder,
      and
      the Company shall not terminate its status as an issuer required to file reports
      under the Exchange Act even if the Exchange Act or the rules and regulations
      thereunder would otherwise permit such termination.

     

    
      
        
        

      

      
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    (d) Use
      of
      Proceeds.
      The
      Company will use the proceeds from the sale of the Convertible Debentures to
      acquire BioDiesel Solutions, Inc. and working capital related to the acquisition
      of BioDiesel Solutions, Inc.

     

    (e) Reservation
      of Shares.
      On the
      date hereof, the Company shall reserve for issuance to the Buyers 200,000,000
      shares for issuance upon conversions of the Convertible Dentures and issuance
      upon exercise of the Warrants (collectively, the “Share
      Reserve”).
      The
      Company represents that it has sufficient authorized and unissued shares of
      Common Stock available to create the Share Reserve after considering all other
      commitments that may require the issuance of Common Stock. The Company shall
      take all action reasonably necessary to at all times have authorized, and
      reserved for the purpose of issuance, such number of shares of Common Stock
      as
      shall be necessary to effect the full conversion of the Convertible Debentures
      and the full exercise of the Warrants. If at any time the Share Reserve is
      insufficient to effect the full conversion of the Convertible Debentures or
      the
      full exercise of the Warrants, the Company shall increase the Share Reserve
      accordingly. If the Company does not have sufficient authorized and unissued
      shares of Common Stock available to increase the Share Reserve, the Company
      shall call and hold a special meeting of the shareholders within sixty (60)
      days
      of such occurrence, for the sole purpose of increasing the number of shares
      authorized. The Company’s management shall recommend to the shareholders to vote
      in favor of increasing the number of shares of Common Stock authorized.
      Management shall also vote all of its shares in favor of increasing the number
      of authorized shares of Common Stock.

     

    (f) Listings
      or Quotation.
      The
      Company’s Common Stock shall be listed or quoted for trading on any of (a) the
      American Stock Exchange, (b) New York Stock Exchange, (c) the Nasdaq Global
      Market, (d) the Nasdaq Capital Market, or (e) the Nasdaq OTC Bulletin Board
      (“OTCBB”)
      (each,
      a “Primary
      Market”).
      The
      Company shall promptly secure the listing of all of the Registrable Securities
      (as defined in the Registration Rights Agreement) upon each national securities
      exchange and automated quotation system, if any, upon which the Common Stock
      is
      then listed (subject to official notice of issuance) and shall maintain such
      listing of all Registrable Securities from time to time issuable under the
      terms
      of the Transaction Documents.

     

    (g) Fees
      and Expenses.
      

     

    (i) Each
      of
      the Company and the Buyer(s) shall pay all costs and expenses incurred by such
      party in connection with the negotiation, investigation, preparation, execution
      and delivery of the Transaction Documents. The Company shall pay Yorkville
      Advisors, LLC a fee equal to ten percent (10%) of the Purchase Price which
      shall
      be paid pro rata directly from the gross proceeds of each Closing. 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (ii) The
      Company shall pay a structuring fee to Yorkville Advisors, LLC of Twenty Five
      Thousand Dollars ($25,000), directly from the proceeds of the First Closing.
      

     

    (iii) The
      Company shall pay Yorkville Advisors, LLC a non-refundable due diligence fee
      of
      Five Thousand Dollars ($5,000) which shall be paid directly from the proceeds
      of
      the First Closing.

     

    (iv) Fully
      Earned.
      The
      Warrant shall be deemed fully earned as of the date hereof. 

     

    (v) Registration
      Rights.
      The
      Warrant Shares shall have “piggy-back” registration rights as set forth in the
      Registration Rights Agreement.

     

    (h) Corporate
      Existence.
      So long
      as any of the Convertible Debentures remain outstanding, the Company shall
      not
      directly or indirectly consummate any merger, reorganization, restructuring,
      reverse stock split consolidation, sale of all or substantially all of the
      Company’s assets or any similar transaction or related transactions (each such
      transaction, an “Organizational
      Change”)
      unless, prior to the consummation an Organizational Change, the Company obtains
      the written consent of each Buyer. In any such case, the Company will make
      appropriate provision with respect to such holders’ rights and interests to
      insure that the provisions of this Section 4(h) will thereafter be applicable
      to
      the Convertible Debentures.

     

    (i) Transactions
      With Affiliates.
      So long
      as any Convertible Debentures are outstanding, the Company shall not, and shall
      cause each of its subsidiaries not to, enter into, amend, modify or supplement,
      or permit any subsidiary to enter into, amend, modify or supplement any
      agreement, transaction, commitment, or arrangement with any of its or any
      subsidiary’s officers, directors, person who were officers or directors at any
      time during the previous two (2) years, stockholders who beneficially own five
      percent (5%) or more of the Common Stock, or Affiliates (as defined below)
      or
      with any individual related by blood, marriage, or adoption to any such
      individual or with any entity in which any such entity or individual owns a
      five
      percent (5%) or more beneficial interest (each a “Related
      Party”),
      except for (a) customary employment arrangements and benefit programs on
      reasonable terms, (b) any investment in an Affiliate of the Company, (c) any
      agreement, transaction, commitment, or arrangement on an arms-length basis
      on
      terms no less favorable than terms which would have been obtainable from a
      person other than such Related Party, (d) any agreement, transaction,
      commitment, or arrangement which is approved by a majority of the disinterested
      directors of the Company; for purposes hereof, any director who is also an
      officer of the Company or any subsidiary of the Company shall not be a
      disinterested director with respect to any such agreement, transaction,
      commitment, or arrangement. “Affiliate”
for
      purposes hereof means, with respect to any person or entity, another person
      or
      entity that, directly or indirectly, (i) has a ten percent (10%) or more equity
      interest in that person or entity, (ii) has ten percent (10%) or more common
      ownership with that person or entity, (iii) controls that person or entity,
      or
      (iv) shares common control with that person or entity. “Control”
or
      “controls”
for
      purposes hereof means that a person or entity has the power, direct or indirect,
      to conduct or govern the policies of another person or entity.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (j) Transfer
      Agent.
      The
      Company covenants and agrees that, in the event that the Company’s agency
      relationship with the transfer agent should be terminated for any reason while
      any Convertible Debentures remain outstanding, the Company shall immediately
      appoint a new transfer agent and shall require that the new transfer agent
      execute and agree to be bound by the terms of the Irrevocable Transfer Agent
      Instructions (as defined herein).

     

    (k) Restriction
      on Issuance of the Capital Stock.
      So long
      as any Convertible Debentures are outstanding, the Company shall not, without
      the prior written consent of the Buyer(s), (i) issue or sell shares of Common
      Stock or Preferred Stock without consideration or for a consideration per share
      less than the bid price of the Common Stock determined immediately prior to
      its
      issuance, (ii) issue any preferred stock, warrant, option, right, contract,
      call, or other security or instrument granting the holder thereof the right
      to
      acquire Common Stock without consideration or for a consideration less than
      such
      Common Stock’s Bid Price determined immediately prior to it’s issuance, or (iii)
      register on a Form S-8 registration statement in excess of fifteen million
      (15,000,000) shares of Common Stock in connection with a bona fide stock option
      plan for employees of the Company.

     

    (l) No
      Short Position.
      Neither
      the Buyer(s) nor any of its affiliates have an open short position in the Common
      Stock of the Company, and the Buyer(s) agrees that it shall not, and that it
      will cause its affiliates not to, engage in any short sales of or hedging
      transactions with respect to the Common Stock as long as any Convertible
      Debentures shall remain outstanding. 

     

    (m) Rights
      of First Refusal.
      So
      long
      as any portion of Convertible Debentures are outstanding, if the Company intends
      to raise additional capital by the issuance or sale of capital stock of the
      Company, including without limitation shares of any class of common stock,
      any
      class of preferred stock, options, warrants or any other securities convertible
      or exercisable into shares of common stock (whether the offering is conducted
      by
      the Company, underwriter, placement agent or any third party) the Company shall
      be obligated to offer to the Buyers such issuance or sale of capital stock,
      by
      providing in writing the principal amount of capital it intends to raise and
      outline of the material terms of such capital raise, prior to the offering
      such
      issuance or sale of capital stock  to any third parties including, but not
      limited to, current or former officers or directors, current or former
      shareholders and/or investors of the obligor, underwriters, brokers, agents
      or
      other third parties.  The Buyers shall have ten (10) business days from
      receipt of such notice of the sale or issuance of capital stock to accept or
      reject all or a portion of such capital raising offer. 

     

    (n) Lock
      Up Agreements.
      On the
      date hereof, the Company shall obtain from each officer and director a lock
      up
      agreement in the form attached hereto as Exhibit
      C.

     

    (o) Additional
      Registration Statements.
      Until
      the effective date of the initial Registration Statement, the Company will
      not
      file a registration statement under the Securities Act relating to securities
      that are not the Securities, except as set forth in Section 4(k).

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    (p) Review
      of Public Disclosures.
      All SEC
      filings (including, without limitation, all filings required under the Exchange
      Act, which include Forms 10-Q and 10-QSB, 10-K and 10K-SB, 8-K, etc) and other
      public disclosures made by the Company, including, without limitation, all
      press
      releases, investor relations materials, and scripts of analysts meetings and
      calls, shall be reviewed and approved for release by the Company’s attorneys
      and, if containing financial information, the Company’s independent certified
      public accountants.

     

    (q) Disclosure
      of Transaction.
      Within
      four (4) business days following the date of this Agreement, the Company shall
      file a Current Report on Form 8-K describing the terms of the transactions
      contemplated by the Transaction Documents in the form required by the Exchange
      Act and attaching the material Transaction Documents (including, without
      limitation, this Agreement, the form of the Convertible Debenture, the form
      of
      Warrant and the form of the Registration Rights Agreement) as exhibits to such
      filing.

     

    (r) Merger
      Filings.
      Not
      later than simultaneous with the First Closing, the Company will complete the
      Merger pursuant to the Merger Agreement and shall make any and all state and
      federal filings in connection with such Merger, including, but not limited,
      to
      the filing of articles of merger with the New Jersey Secretary of State and
      provided proof of such filing to the Buyer(s).

     

    (s) 8-K
      with Audited Financials.
      The
      Company shall file a Form 8-K in connection with the Merger with BSI, including
      an 8-K which shall include the financial statements of BSI. within the time
      periods prescribed by the SEC for such filings. 

     

    (t) Consent
      to Stock Subdivisions and/or Splits.
      So long
      as any portion of Convertible Debentures are outstanding, the Company shall
      not
      effect any subdivision and/or split of its authorized Common Stock into a
      smaller or larger number of shares without the prior written consent of the
      Buyers.

     

    5. TRANSFER
      AGENT INSTRUCTIONS.

     

    (a) The
      Company shall issue the Irrevocable Transfer Agent Instructions to its transfer
      agent, and any subsequent transfer agent, irrevocably appointing David Gonzalez,
      Esq. as the Company’s agent for purpose instructing its transfer agent to issue
      certificates or credit shares to the applicable balance accounts at The Deposity
      Trust Company (“DTC”),
      registered in the name of each Buyer or its respective nominee(s), for the
      Conversion Shares and the Warrant Shares issued upon conversion of the
      Convertible Debentures or exercise of the Warrants as specified from time to
      time by each Buyer to the Company upon conversion of the Convertible Debentures
      or exercise of the Warrants. The Company shall not change its transfer agent
      without the express written consent of the Buyers, which may be withheld by
      the
      Buyers in their sole discretion. The Company warrants that no instruction other
      than the Irrevocable Transfer Agent Instructions referred to in this Section
      5,
      and stop transfer instructions to give effect to Section 2(g) hereof (in the
      case of the Conversion Shares or Warrant Shares prior to registration of such
      shares under the Securities Act) will be given by the Company to its transfer
      agent, and that the Securities shall otherwise be freely transferable on the
      books and records of the Company as and to the extent provided in this Agreement
      and the other Transaction Documents. If a Buyer effects a sale, assignment
      or
      transfer of the Securities in accordance with Section 2(f), the Company shall
      promptly instruct its transfer agent to issue one or more certificates or credit
      shares to the applicable balance accounts at DTC in such name and in such
      denominations as specified by such Buyer to effect such sale, transfer or
      assignment and, with respect to any transfer, shall permit the transfer. In
      the
      event that such sale, assignment or transfer involves Conversion Shares or
      Warrant Shares sold, assigned or transferred pursuant to an effective
      registration statement or pursuant to Rule 144, the transfer agent shall issue
      such Securities to the Buyer, assignee or transferee, as the case may be,
      without any restrictive legend. Nothing in this Section 5 shall affect in any
      way the Buyer’s obligations and agreement to comply with all applicable
      securities laws upon resale of Conversion Shares. The Company acknowledges
      that
      a breach by it of its obligations hereunder will cause irreparable harm to
      the
      Buyer by vitiating the intent and purpose of the transaction contemplated
      hereby. Accordingly, the Company acknowledges that the remedy at law for a
      breach of its obligations under this Section 5 will be inadequate and agrees,
      in
      the event of a breach or threatened breach by the Company of the provisions
      of
      this Section 5, that the Buyer(s) shall be entitled, in addition to all
      other available remedies, to an injunction restraining any breach and requiring
      immediate issuance and transfer, without the necessity of showing economic
      loss
      and without any bond or other security being required.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    6. CONDITIONS
      TO THE COMPANY’S OBLIGATION TO SELL.

     

    The
      obligation of the Company hereunder to issue and sell the Convertible Debentures
      to the Buyer(s) at the Closings is subject to the satisfaction, at or before
      the
      Closing Dates, of each of the following conditions, provided that these
      conditions are for the Company’s sole benefit and may be waived by the Company
      at any time in its sole discretion:

     

    (a) Each
      Buyer shall have executed the Transaction Documents and delivered them to the
      Company.

     

    (b) The
      Buyer(s) shall have delivered to the Company the Purchase Price for the
      Convertible Debentures and Warrants in the respective amounts as set forth
      next
      to each Buyer as set forth on Schedule I attached hereto, minus any fees to
      be
      paid directly from the proceeds the Closings as set forth herein, by wire
      transfer of immediately available U.S. funds pursuant to the wire instructions
      provided by the Company.

     

    (c) The
      representations and warranties of the Buyer(s) shall be true and correct in
      all
      material respects as of the date when made and as of the Closing Dates as though
      made at that time (except for representations and warranties that speak as
      of a
      specific date), and the Buyer(s) shall have performed, satisfied and complied
      in
      all material respects with the covenants, agreements and conditions required
      by
      this Agreement to be performed, satisfied or complied with by the Buyer(s)
      at or
      prior to the Closing Dates. 

     

    7. CONDITIONS
      TO THE BUYER’S OBLIGATION TO PURCHASE.

     

    (a) The
      obligation of the Buyer(s) hereunder to purchase the Convertible Debentures
      at
      the Closing is subject to the satisfaction, at or before the First Closing
      Date,
      of each of the following conditions:

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    (i) The
      Company shall have executed the Transaction Documents and delivered the same
      to
      the Buyers.

     

    (ii) The
      Common Stock shall be authorized for quotation or trading on the Primary Market,
      trading in the Common Stock shall not have been suspended for any reason, and
      all the Conversion Shares issuable upon the conversion of the Convertible
      Debentures shall be approved for listing or trading on the Primary Market.
      

     

    (iii) The
      representations and warranties of the Company shall be true and correct in
      all
      material respects (except to the extent that any of such representations and
      warranties is already qualified as to materiality in Section 3 above, in which
      case, such representations and warranties shall be true and correct without
      further qualification) as of the date when made and as of the Closing Date
      as
      though made at that time (except for representations and warranties that speak
      as of a specific date) and the Company shall have performed, satisfied and
      complied in all material respects with the covenants, agreements and conditions
      required by this Agreement to be performed, satisfied or complied with by the
      Company at or prior to the Closing Date

     

    (iv) The
      Company shall have executed and delivered to the Buyer(s) the Convertible
      Debentures and Warrants in the respective amounts set forth opposite each
      Buyer’s name on Schedule I attached hereto.

     

    (v) The
      Buyers shall have received an opinion of counsel from counsel to the Company
      in
      a form satisfactory to the Buyers.

     

    (vi) The
      Company shall have provided to the Buyers a true copy of a certificate of good
      standing evidencing the formation and good standing of the Company from the
      secretary of state (or comparable office) from the jurisdiction in which the
      Company is incorporated, as of a date within ten (10) days of the Closing
      Date.

     

    (vii) The
      Company shall have delivered to the Buyers a certificate, executed by the
      Secretary of the Company and dated as of the Closing Date, as to (i) the
      resolutions consistent with Section 3(c) as adopted by the Company's Board
      of
      Directors in a form reasonably acceptable to such Buyer, (ii) the Certificate
      of
      Incorporation and (iii) the Bylaws, each as in effect at the
      Closing.

     

    (viii) The
      Company shall have filed such amendment to the UCC-1 or such other forms as
      may
      be required to perfect the Buyer’s interest in the Pledged Property as detailed
      in the Security Agreement dated the date hereof and provided proof of such
      filing to the Buyer(s).

     

    (ix) The
      Company shall have provided to the Buyer an acknowledgement, to the satisfaction
      of the Buyer, from the Company’s independent certified public accountants as to
      its ability to provide all consents required in order to file a registration
      statement in connection with this transaction.

     

    (x) The
      Company shall have created the Share Reserve. 

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    (xi) The
      Irrevocable Transfer Agent Instructions, in form and substance satisfactory
      to
      the Buyer, shall have been delivered to and acknowledged in writing by the
      Company’s transfer agent.

     

    (xii) The
      Company shall have certified, in a certificate executed by at least two
      executive officers of the Company, dated as of the First Closing, that the
      Merger has been consummated subject only the Company’s receipt of the net
      proceeds of the First Closing. 

     

    (xiii) All
      filings with the Patent and Trademark Office necessary to perfect the Buyer’s
      security interest in the Patent Collateral shall have been filed. 

     

    (xiv) The
      Company shall have delivered to the Buyer all of its shares in the subsidiary
      that shall be the surviving entity of the Merger as well as properly executed
      stock powers. 

     

    (xv) The
      Company shall have executed and delivered the Pledge and Escrow Agreement to
      the
      Buyers and the Company shall deliver the shares of capital stock of BioDiesel
      Solutions, Inc. together with a stock power executed in blank with a Medallion
      guarantee, as set forth in the Pledge and Escrow Agreement, to David Gonzalez,
      Esq.

     

    (b) The
      obligation of the Buyer(s) hereunder to accept the Convertible Debentures at
      the
      Second Closing is subject to the satisfaction, at or before the Second Closing
      Date, of each of the following conditions:

     

    (i) The
      Common Stock shall be authorized for quotation on the OTCBB, trading in the
      Common Stock shall not have been suspended for any reason, and all the
      Conversion Shares issuable upon the conversion of the Convertible Debentures
      shall be approved by the OTCBB. 

     

    (ii) The
      representations and warranties of the Company shall be true and correct in
      all
      material respects (except to the extent that any of such representations and
      warranties is already qualified as to materiality in Section 3 above, in which
      case, such representations and warranties shall be true and correct without
      further qualification) as of the date when made and as of the Second Closing
      Date as though made at that time (except for representations and warranties
      that
      speak as of a specific date) and the Company shall have performed, satisfied
      and
      complied in all material respects with the covenants, agreements and conditions
      required by this Agreement to be performed, satisfied or complied with by the
      Company at or prior to the Second Closing Date. 

     

    (iii) The
      Company shall have executed and delivered to the Buyer(s) the Convertible
      Debentures in the respective amounts set forth opposite each Buyer(s) name
      on
      Schedule I attached hereto.

     

    (iv) The
      Company shall have unconditionally booked and received at least a 50% deposit
      for the sale of at least one BioDieselMaster Unit. 

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    (v) The
      Company shall have made such filing with United States Patent and Trademark
      Office or such other forms as may be required to perfect the Buyer’s interest in
      the Pledged Property as detailed in the Patent Security Agreement dated the
      date
      hereof and provided proof of such filing to the Buyer(s).

     

    (vi) The
      Company shall have made all state and federal filings in connection with the
      Merger including but not limited to the filing of articles of merger with the
      New Jersey Secretary of State and provided proof of such filing to the
      Buyer(s).

     

    (vii) The
      Company shall have filed a Form 8-K in
      connection with the Merger which shall include the
      financial statements of BSI as required pursuant to rules of the
      SEC.

     

    (viii) The
      Company shall have converted all of its deposit accounts that it maintains
      into
      Blocked Accounts (as defined in the Security Agreement).

     

    (ix) The
      Company shall have certified, in a certificate executed by two officers of
      the
      Company and dated as of the Second Closing Date, that all conditions to the
      Second Closing have been satisfied.

     

    8. INDEMNIFICATION.

     

    (a) In
      consideration of the Buyer’s execution and delivery of this Agreement and
      acquiring the Convertible Debentures and the Conversion Shares hereunder, and
      in
      addition to all of the Company’s other obligations under this Agreement, the
      Company shall defend, protect, indemnify and hold harmless the Buyer(s) and
      each
      other holder of the Convertible Debentures and the Conversion Shares, and all
      of
      their officers, directors, employees and agents (including, without
      limitation, those retained in connection with the transactions contemplated
      by
      this Agreement) (collectively, the “Buyer
      Indemnitees”)
      from
      and against any and all actions, causes of action, suits, claims, losses, costs,
      penalties, fees, liabilities and damages, and expenses in connection therewith
      (irrespective of whether any such Buyer Indemnitee is a party to the action
      for
      which indemnification hereunder is sought), and including reasonable attorneys’
fees and disbursements (the “Indemnified
      Liabilities”),
      incurred by the Buyer Indemnitees or any of them as a result of, or arising
      out
      of, or relating to (a) any misrepresentation or breach of any representation
      or
      warranty made by the Company in this Agreement, the Convertible Debentures
      or
      the other Transaction Documents or any other certificate, instrument or document
      contemplated hereby or thereby, (b) any breach of any covenant, agreement or
      obligation of the Company contained in this Agreement, or the other Transaction
      Documents or any other certificate, instrument or document contemplated hereby
      or thereby, or (c) any cause of action, suit or claim brought or made against
      such Buyer Indemnitee and arising out of or resulting from the execution,
      delivery, performance or enforcement of this Agreement or any other instrument,
      document or agreement executed pursuant hereto by any of the parties hereto,
      any
      transaction financed or to be financed in whole or in part, directly or
      indirectly, with the proceeds of the issuance of the Convertible Debentures
      or
      the status of the Buyer or holder of the Convertible Debentures the Conversion
      Shares, as a Buyer of Convertible Debentures in the Company. To the extent
      that
      the foregoing undertaking by the Company may be unenforceable for any reason,
      the Company shall make the maximum contribution to the payment and satisfaction
      of each of the Indemnified Liabilities, which is permissible under applicable
      law.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    (b) In
      consideration of the Company’s execution and delivery of this Agreement, and in
      addition to all of the Buyer’s other obligations under this Agreement, the Buyer
      shall defend, protect, indemnify and hold harmless the Company and all of its
      officers, directors, employees and agents (including, without limitation, those
      retained in connection with the transactions contemplated by this Agreement)
      (collectively, the “Company
      Indemnitees”)
      from
      and against any and all Indemnified Liabilities incurred by the Indemnitees
      or
      any of them as a result of, or arising out of, or relating to (a) any
      misrepresentation or breach of any representation or warranty made by the
      Buyer(s) in this Agreement, instrument or document contemplated hereby or
      thereby executed by the Buyer, (b) any breach of any covenant, agreement or
      obligation of the Buyer(s) contained in this Agreement, the Transaction
      Documents or any other certificate, instrument or document contemplated hereby
      or thereby executed by the Buyer, or (c) any cause of action, suit or claim
      brought or made against such Company Indemnitee based on material
      misrepresentations or due to a material breach and arising out of or resulting
      from the execution, delivery, performance or enforcement of this Agreement,
      the
      Transaction Documents or any other instrument, document or agreement executed
      pursuant hereto by any of the parties hereto. To the extent that the foregoing
      undertaking by each Buyer may be unenforceable for any reason, each Buyer shall
      make the maximum contribution to the payment and satisfaction of each of the
      Indemnified Liabilities, which is permissible under applicable law.

     

    9. GOVERNING
      LAW: MISCELLANEOUS.

     

    (a) Governing
      Law.
      This
      Agreement shall be governed by and interpreted in accordance with the laws
      of
      the State of New Jersey without regard to the principles of conflict of laws.
      The parties further agree that any action between them shall be heard in Hudson
      County, New Jersey, and expressly consent to the jurisdiction and venue of
      the
      Superior Court of New Jersey, sitting in Hudson County and the United States
      District Court for the District of New Jersey sitting in Newark, New Jersey
      for
      the adjudication of any civil action asserted pursuant to this
      Paragraph.

     

    (b) Counterparts.
      This
      Agreement may be executed in two or more identical counterparts, all of which
      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.
      In
      the event any signature page is delivered by facsimile transmission, the party
      using such means of delivery shall cause four (4) additional original executed
      signature pages to be physically delivered to the other party within five (5)
      days of the execution and delivery hereof.

     

    (c) Headings.
      The
      headings of this Agreement are for convenience of reference and shall not form
      part of, or affect the interpretation of, this Agreement.

     

    (d) Severability.
      If any
      provision of this Agreement shall be invalid or unenforceable in any
      jurisdiction, such invalidity or unenforceability shall not affect the validity
      or enforceability of the remainder of this Agreement in that jurisdiction or
      the
      validity or enforceability of any provision of this Agreement in any other
      jurisdiction.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    (e) Entire
      Agreement, Amendments.
      This
      Agreement supersedes all other prior oral or written agreements between the
      Buyer(s), the Company, their affiliates and persons acting on their behalf
      with
      respect to the matters discussed herein, and this Agreement and the instruments
      referenced herein contain the entire understanding of the parties with respect
      to the matters covered herein and therein and, except as specifically set forth
      herein or therein, neither the Company nor any Buyer makes any representation,
      warranty, covenant or undertaking with respect to such matters. No provision
      of
      this Agreement may be waived or amended other than by an instrument in writing
      signed by the party to be charged with enforcement.

     

    (f) Notices.
      Any
      notices, consents, waivers, or other communications required or permitted to
      be
      given under the terms of this Agreement must be in writing and will be deemed
      to
      have been delivered (i) upon receipt, when delivered personally; (ii) upon
      confirmation of receipt, when sent by facsimile; (iii) three (3) days after
      being sent by U.S. certified mail, return receipt requested, or (iv) one (1)
      day
      after deposit with a nationally recognized overnight delivery service, in each
      case properly addressed to the party to receive the same. The addresses and
      facsimile numbers for such communications shall be:

     

    
      	
              If
                to the Company, to:

            	
              Tech
                Laboratories, Inc.

            
	 	
              1818
                North Farwell Avenue

            
	 	
              Milwaukee,
                WI 53202

            
	 	
              Attention: John
                King

            
	 	
              Telephone: (414)
                283-2616

            
	 	
              Facsimile: (312)
                873-3739

            
	 	 
	
              With
                a copy to:

            	
              Sichenzia
                Ross Friedman Ference LLP

            
	 	
              61
                Broadway

            
	 	
              New
                York, New York 10006

            
	 	
              Attention: Thomas
                A. Rose, Esq.

            
	 	
              Telephone: (212)
                930-9700

            
	 	
              Facsimile: (212)
                930-9725

            
	 	 

    

    If
      to the
      Buyer(s), to its address and facsimile number on Schedule I, with copies to
      the
      Buyer’s counsel as set forth on Schedule I. Each party shall provide five (5)
      days’ prior written notice to the other party of any change in address or
      facsimile number.

     

    (g) Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their respective successors and assigns. Neither the Company nor any Buyer
      shall
      assign this Agreement or any rights or obligations hereunder without the prior
      written consent of the other party hereto.

     

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

     

    (i) Survival.
      Unless
      this Agreement is terminated under Section 9(l), the representations and
      warranties of the Company and the Buyer(s) contained in Sections 2 and 3, the
      agreements and covenants set forth in Sections 4, 5 and 9, and the
      indemnification provisions set forth in Section 8, shall survive the Closing
      for
      a period of two (2) years following the date on which the Convertible Debentures
      are converted in full. The Buyer(s) shall be responsible only for its own
      representations, warranties, agreements and covenants hereunder.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    (j) Publicity.
      The
      Company and the Buyer(s) shall have the right to approve, before issuance any
      press release or any other public statement with respect to the transactions
      contemplated hereby made by any party; provided, however, that the Company
      shall
      be entitled, without the prior approval of the Buyer(s), to issue any press
      release or other public disclosure with respect to such transactions required
      under applicable securities or other laws or regulations (the Company shall
      use
      its best efforts to consult the Buyer(s) in connection with any such press
      release or other public disclosure prior to its release and Buyer(s) shall
      be
      provided with a copy thereof upon release thereof).

     

    (k) Further
      Assurances.
      Each
      party shall do and perform, or cause to be done and performed, all such further
      acts and things, and shall execute and deliver all such other agreements,
      certificates, instruments and documents, as the other party may reasonably
      request in order to carry out the intent and accomplish the purposes of this
      Agreement and the consummation of the transactions contemplated
      hereby.

     

    (l) Termination.
      In the
      event that the First Closing shall not have occurred with respect to the Buyers
      on or before five (5) business days from the date hereof due to the Company’s or
      the Buyer’s failure to satisfy the conditions set forth in Sections 6 and 7
      above (and the non-breaching party’s failure to waive such unsatisfied
      condition(s)), the non-breaching party shall have the option to terminate this
      Agreement with respect to such breaching party at the close of business on
      such
      date without liability of any party to any other party; provided, however,
      that
      if this Agreement is terminated by the Company pursuant to this Section 9(l),
      the Company shall remain obligated to reimburse the Buyer(s) for the fees and
      expenses of Yorkville Advisors LLC described in Section 4(g) above.

     

    (m) Brokerage.
      The
      Company represents that no broker, agent, finder or other party has been
      retained by it in connection with the transactions contemplated hereby and
      that
      no other fee or commission has been agreed by the Company to be paid for or
      on
      account of the transactions contemplated hereby. 

     

    (n) No
      Strict Construction.
      The
      language used in this Agreement will be deemed to be the language chosen by
      the
      parties to express their mutual intent, and no rules of strict construction
      will
      be applied against any party.

    

    [REMAINDER
      PAGE INTENTIONALLY LEFT BLANK]

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF,
      each
      Buyer and the Company have caused their respective signature page to this
      Securities Purchase Agreement to be duly executed as of the date first written
      above.

     

    
      	 	 	 
	 	
              COMPANY:

            
	 	
              TECH
                LABORATORIES, INC.  

            
	 
 	 
 	 
 
	
            	By:  	/s/ John King
	 	
              

              Name: John
                King

            
	 	
              Title: Director
                and Chief Executive Officer

            

    

    

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      each
      Buyer and the Company have caused their respective signature page to this
      Securities Purchase Agreement to be duly executed as of the date first written
      above.

     

    
      	 	 	 
	 	
              BUYERS:

            
	 	
              CORNELL
                CAPITAL PARTNERS, L.P. 

            
	 	 	 
	 	By:  	Yorkville Advisors, LLC  
	 	
              Its:  

            	Investment Manager 
	 
 	 
 	 
 
	
            	By:  	/s/ Mark Angelo
	 	
              

              Name: Mark
                Angelo

            
	 	
              Its:
                Portfolio Manager 

            

    

    

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    

    SCHEDULE
      I

     

    SCHEDULE
      OF BUYERS

    

    
      	
              (1)

            	 	
              (2)

            	 	
              (3)

            	 	
              (4)

            	 	
              (6)

            	 	
              (7)

            	 	
              (8)

            
	
               

            	 	
              Subscription
                Amount

            	 	
              Warrants

            	 	 	 	
              Legal
                Representative’s Address and Facsimile 

            
	
              Buyer

            	 	
              First
                Closing

            	 	
              Second
                Closing

            	 	 	 	
              First
                Closing

            	 	 	 	
              Number

            
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Cornell
                Capital Partners, L.P.

               

              101
                Hudson Street, Suite 3700

              Jersey
                City, NJ 07303

              Attention:
                Mark Angelo

              Telephone:
                (201) 985-8300

              Facsimile:
                (201) 985-8266

              Residence:
                Cayman Islands

            	 	
              $2,000,000

            	 	
              $700,000

            	 	 	 	
              33,750,000
                shares at an Exercise Price of $0.06 per share

            	 	 	 	
              David
                Gonzalez, Esq.

              101
                Hudson Street, Suite 3700

              Jersey
                City, New Jersey 07302 

              Telephone:
                (201) 985-8300 

              Facsimile:
                (201) 985-8266

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