Document:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, ASSIGNED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION
FROM REGISTRATION AND OTHERWISE IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT
BETWEEN THE ISSUER AND THE ORIGINAL OWNER OF THE SECURITIES, A COPY OF WHICH IS
ON FILE AT THE PRINCIPAL EXECUTIVE OFFICE OF THE ISSUER.

                            HEALTHRENU MEDICAL, INC.

                                  WARRANT FORM

      This Warrant is issued in connection with that certain Subscription
Agreement (the "Subscription Agreement") by and among HEALTHRENU MEDICAL, INC.,
a Nevada corporation (the "Company"), and _____________ (the "Investor").
Capitalized terms used herein, but not otherwise defined, shall have the meaning
given to them in the Subscription Agreement and the Note (the "Note") issued in
connection with the Subscription Agreement. In the event of a conflict between
the Subscription Agreement and the Note, the Subscription Agreement shall
govern.

      THIS CERTIFIES THAT, for value received, or its registered assigns is
entitled to purchase from the Company at any time or from time to time during
the period specified in Paragraph 2 hereof [two (2)/three(3)] fully paid and
nonassessable share of the Company's Common Stock, $.001 par value per share
(the "Common Stock") for each share of common stock issued upon conversion of
the Notes pursuant to the Subscription Agreement (the "Notes"), at an exercise
price per share equal to [the Conversion Price of the Notes for two
warrants/125% of the conversion price of the Notes for three warrants/150% of
the conversion price of the Notes for three warrants] (the "Exercise Price").

      The term "Warrant Shares," as used herein, refers to the shares of Common
Stock purchasable hereunder. The Warrant Shares and the Exercise Price are
subject to adjustment as provided in Paragraph 4 hereof. This Warrant is subject
to the following terms, provisions, and conditions:

      1. Manner of Exercise; Issuance of Certificates; Payment for Shares.
Subject to the provisions hereof, this Warrant may be exercised by the holder
hereof, in whole or in part, by the surrender of this Warrant, together with a
completed exercise agreement in the form attached hereto (the "Exercise
Agreement"), to the Company during normal business hours on any business day at
the Company's principal executive offices (or such other office or agency of the
Company as it may designate by notice to the holder hereof), and upon payment to
the Company in cash, by certified or official bank check or by wire transfer for
the account of the Company of the Exercise Price for the Warrant Shares
specified in the Exercise Agreement for the Warrant Shares specified in the
Exercise Agreement. The Warrant Shares so purchased shall be deemed to be issued
to the holder hereof or such holder's designee, as the record owner of such
shares, as of the close of business on the date on which this Warrant shall have
been surrendered, the completed Exercise Agreement shall have been delivered,
and payment shall have been made for such shares as set forth above.
Certificates for the Warrant Shares so purchased, representing the aggregate
number of shares specified in the Exercise Agreement, shall be delivered to the
holder hereof within a reasonable time after this Warrant shall have been so
exercised. The certificates so delivered shall be in such denominations as may
be requested by the holder hereof and shall be registered in the name of such
holder or such other name as shall be designated by such holder. If this Warrant
shall have been exercised only in part, then, unless this Warrant has expired,
the Company shall, at its expense, at the time of delivery of such certificates,
deliver to the holder a new Warrant representing the number of shares with
respect to which this Warrant shall not then have been exercised.

                                      1
<PAGE>

      2. Period of Exercise. This Warrant is exercisable at any time or from
time to time on or after the date on which this Warrant is issued and delivered
pursuant to the terms of the Subscription Agreement and before 5:00 p.m., New
York, New York time on October 31, 2009 (the "Exercise Period")

      3. Certain Agreements of the Company. The Company hereby covenants and
agrees as follows:

      (a) Shares to be Fully Paid. All Warrant Shares will, upon issuance in
      accordance with the terms of this Warrant, be validly issued, fully paid,
      and nonassessable and free from all taxes, liens, and charges with respect
      to the issue thereof.

      (b) Reservation of Shares. During the Exercise Period, the Company shall
      at all times have authorized, and reserved for the purpose of issuance
      upon exercise of this Warrant, a sufficient number of shares of Common
      Stock to provide for the exercise of this Warrant.

      (c) Listing. The Company shall promptly secure the listing of the shares
      of Common Stock issuable upon exercise of the Warrant upon each national
      securities exchange or automated quotation system, if any, upon which
      shares of Common Stock are then listed (subject to official notice of
      issuance upon exercise of this Warrant) and shall maintain, so long as any
      other shares of Common Stock shall be so listed, such listing of all
      shares of Common Stock from time to time issuable upon the exercise of
      this Warrant.

      (d) Successors and Assigns. This Warrant will be binding upon any entity
      succeeding to the Company by merger, consolidation, or acquisition of all
      or substantially all the Company's assets.

      4. Adjustment and Antidilution Provisions.1. On or after the date of
issuance of this Warrant, the Warrant Exercise Price and number of shares
issuable pursuant to this Warrant shall be subject to adjustment as follows:

                                      2
<PAGE>

      (a) In case the Company shall (i) declare a dividend or make a
      distribution on its outstanding shares of Common Stock in shares of Common
      Stock, (ii) subdivide or reclassify its outstanding shares of Common Stock
      into a greater number of shares, or (iii) combine or reclassify its
      outstanding shares of Common Stock into a smaller number of shares, the
      Exercise Price in effect at the time of the record date for such dividend
      or distribution or of the effective date of such subdivision, combination
      or reclassification shall be adjusted so that it shall equal the price
      determined by multiplying the Exercise Price by a fraction, the
      denominator of which shall be the number of shares of Common Stock
      outstanding after giving effect to such action, and the numerator of which
      shall be the number of shares of Common Stock immediately prior to such
      action. Such adjustment shall be made each time any event listed above
      shall occur.

      (b) Whenever the Exercise Price payable upon exercise of each Warrant is
      adjusted pursuant to Subsection (a) above, the number of shares
      purchasable upon exercise of this Warrant shall simultaneously be adjusted
      by multiplying the number of shares initially issuable upon exercise of
      this Warrant by the Exercise Price in effect on the date hereof and
      dividing the product so obtained by the Exercise Price, as adjusted.

      (c) All calculations under this Section 4 shall be made to the nearest
      cent or to the nearest one-hundredth of a share, as the case may be.
      Anything in this Section 4 to the contrary notwithstanding, the Company
      shall be entitled, but shall not be required, to make such changes in the
      Exercise Price in addition to those required by this Section 4, as it
      shall determine, in its sole discretion, to be advisable in order that any
      dividend or distribution in shares of Common Stock, or any subdivision,
      reclassification or combination of Common Stock, hereafter made by the
      Corporation shall not result in any Federal Income tax liability to the
      holders of the Common Stock or securities convertible into Common Stock
      (including warrant).

      (d) Whenever the Exercise Price is adjusted, as herein provided, the
      Corporation shall promptly cause a notice setting forth the adjusted
      Exercise Price and adjusted number of shares issuable upon exercise of
      each Warrant to be mailed to the Holder, at its last address appearing in
      the Company's Warrant Register. The Company may retain a firm of
      independent certified public accountants selected by the Board of
      Directors (who may be the regular accountants employed by the Company) to
      make any computation required by this Section 4, and a certificate signed
      by such firm shall be conclusive evidence of the correctness of such
      adjustment.

      5. Issue Tax. The issuance of certificates for Warrant Shares upon the
exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.

      6. No Rights or Liabilities as a Shareholder. This Warrant shall not
entitle the holder hereof to any voting rights or other rights as a shareholder
of the Company. No provision of this Warrant, in the absence of affirmative
action by the holder hereof to purchase Warrant Shares, and no mere enumeration
herein of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Exercise Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.

                                      3
<PAGE>

      7. Transfer, Exchange, and Replacement of Warrant.

      (a) Restriction on Transfer. This Warrant and the rights granted to the
      holder hereof are transferable, in whole or in part, upon surrender of
      this Warrant, together with a properly executed assignment in the form
      attached hereto, at the office or agency of the Company referred to in
      Paragraph 7(e) below, provided, however, that any transfer or assignment
      shall be subject to the conditions set forth in Paragraph 7(f) hereof.
      Until due presentment for registration of transfer on the books of the
      Company, the Company may treat the registered holder hereof as the owner
      and holder hereof for all purposes, and the Company shall not be affected
      by any notice to the contrary.

      (b) Warrant Exchangeable for Different Denominations. This Warrant is
      exchangeable, upon the surrender hereof by the holder hereof at the office
      or agency of the Company referred to in Paragraph 7(e) below, for new
      Warrant of like tenor representing in the aggregate the right to purchase
      the number of shares of Common Stock which may be purchased hereunder,
      each of such new Warrant to represent the right to purchase such number of
      shares as shall be designated by the holder hereof at the time of such
      surrender.

      (c) Replacement of Warrant. Upon receipt of evidence reasonably
      satisfactory to the Company of the loss, theft, destruction, or mutilation
      of this Warrant and, in the case of any such loss, theft, or destruction,
      upon delivery of an indemnity agreement reasonably satisfactory in form
      and amount to the Company, or, in the case of any such mutilation, upon
      surrender and cancellation of this Warrant, the Company, at its expense,
      will execute and deliver, in lieu thereof, a new Warrant of like tenor.

      (d) Cancellation; Payment of Expenses. Upon the surrender of this Warrant
      in connection with any transfer, exchange, or replacement as provided in
      this Paragraph 7, this Warrant shall be promptly canceled by the Company.
      The Company shall pay all taxes (other than securities transfer taxes) and
      all other expenses (other than legal expenses, if any, incurred by the
      holder or transferees) and charges payable in connection with the
      preparation, execution, and delivery of Warrant pursuant to this Paragraph
      7.

      (e) Register. The Company shall maintain, at its principal executive
      offices (or such other office or agency of the Company as it may designate
      by notice to the holder hereof), a register for this Warrant, in which the
      Company shall record the name and address of the person in whose name this
      Warrant has been issued, as well as the name and address of each
      transferee and each prior owner of this Warrant.

                                      4
<PAGE>

      (f) Exercise or Transfer Without Registration. If, at the time of the
      surrender of this Warrant in connection with any exercise, transfer, or
      exchange of this Warrant, this Warrant (or, in the case of any exercise,
      the Warrant Shares issuable hereunder), shall not be registered under the
      Securities Act of 1933, as amended (the "Securities Act") and under
      applicable state securities or blue sky laws, the Company may require, as
      a condition of allowing such exercise, transfer, or exchange, (i) that the
      holder or transferee of this Warrant, as the case may be, furnish to the
      Company a written opinion of counsel, which opinion and counsel are
      acceptable to the Company, to the effect that such exercise, transfer, or
      exchange may be made without registration under said Act and under
      applicable state securities or blue sky laws, (ii) that the holder or
      transferee execute and deliver to the Company an investment letter in form
      and substance acceptable to the Company and (iii) that the transferee be
      an "accredited investor" as defined in Rule 501(a) promulgated under the
      Securities Act; provided that no such opinion, letter or status as an
      "accredited investor" shall be required in connection with a transfer
      pursuant to Rule 144 under the Securities Act. The first holder of this
      Warrant, by taking and holding the same, represents to the Company that
      such holder is acquiring this Warrant for investment and not with a view
      to the distribution thereof.

      8. Registration Rights. The initial holder of this Warrant (and certain
assignees thereof) shall have registration rights as set forth in Section 5 of
the Subscription Agreement.

      9. Notices. All notices, requests, and other communications required or
permitted to be given or delivered hereunder to the holder of this Warrant shall
be in writing, and shall be personally delivered, or shall be sent by certified
or registered mail or by recognized overnight mail courier, postage prepaid and
addressed, to such holder at the address shown for such holder on the books of
the Company, or at such other address as shall have been furnished to the
Company by notice from such holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at 12777 Jones Road, Suite
481, Houston, TX 77070, Attention: Chief Executive Officer, or at such other
address as shall have been furnished to the holder of this Warrant by notice
from the Company. Any such notice, request, or other communication may be sent
by facsimile, but shall in such case be subsequently confirmed by a writing
personally delivered or sent by certified or registered mail or by recognized
overnight mail courier as provided above. All notices, requests, and other
communications shall be deemed to have been given either at the time of the
receipt thereof by the person entitled to receive such notice at the address of
such person for purposes of this Paragraph 9, or, if mailed by registered or
certified mail or with a recognized overnight mail courier upon deposit with the
United States Post Office or such overnight mail courier, if postage is prepaid
and the mailing is properly addressed, as the case may be.

      10. Governing Law. THIS WARRANT SHALL BE ENFORCED, GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK,
NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS
ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT
SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
THIS WARRANT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH SUCH
DISPUTE.

                                      5
<PAGE>

      11. Miscellaneous.

      (a) Amendments. This Warrant and any provision hereof may only be amended
      by an instrument in writing signed by the Company and the holder hereof.

      (b) Descriptive Headings. The descriptive headings of the several
      paragraphs of this Warrant are inserted for purposes of reference only,
      and shall not affect the meaning or construction of any of the provisions
      hereof.

      (c) Remedies. The Company acknowledges that a breach by it of its
      obligations hereunder will cause irreparable harm to the holder, 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 Warrant will be inadequate and agrees, in
      the event of a breach or threatened breach by the Company of the
      provisions of this Warrant, that the holder shall be entitled, in addition
      to all other available remedies at law or in equity, and in addition to
      the penalties assessable herein, to an injunction or injunctions
      restraining, preventing or curing any breach of this Warrant and to
      enforce specifically the terms and provisions thereof, without the
      necessity of showing economic loss and without any bond or other security
      being required.

                                      6
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.

                                         HEALTHRENU MEDICAL, INC.

                                         By:
                                             --------------------
                                             Robert W. Prokos
                                             President & Chief Executive Officer

Dated as of _________________, 2006

                                      7
<PAGE>

                           FORM OF EXERCISE AGREEMENT

                                                       Dated:  ________ __, 200_

To: ______________________

      The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to purchase ________ shares of Common Stock covered by
such Warrant, and makes payment herewith in full therefor at the price per share
provided by such Warrant in cash or by certified or official bank check in the
amount of $________. Please issue a certificate or certificates for such shares
of Common Stock in the name of and pay any cash for any fractional share to:

                                     Name:
                                          --------------------------------

                                     Signature:
                                     Address:
                                             -----------------------------

                                             -----------------------------
                                     Note: The above signature should correspond
                                           exactly with the name on the face of
                                           the within Warrant, if applicable.

and, if said number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of said undersigned covering the balance of the shares purchasable thereunder
less any fraction of a share paid in cash.

                                      8
<PAGE>

                               FORM OF ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
all the rights of the undersigned under the within Warrant, with respect to the
number of shares of Common Stock covered thereby set forth hereinbelow, to:

Name of Assignee                      Address                      No. of Shares
----------------                      -------                      -------------

      , and hereby irrevocably constitutes and appoints ______________________
as agent and attorney-in-fact to transfer said Warrant on the books of the
within-named corporation, with full power of substitution in the premises.

Dated: ________ __, 200_

In the presence of:
                                          --------------------------------
                                     Name:
                                          --------------------------------

                                     Signature:
                                               ----------------------------
                                     Title of Signing Officer or Agent (if any):

                                     Address:
                                             -----------------------------

                                             -----------------------------

                                             -----------------------------

                                     Note: The above signature should correspond
                                           exactly with the name on the face of
                                           the within  Warrant, if applicable.

                                      9SECURITY AGREEMENT

      THIS SECURITY AGREEMENT (this "Agreement") is made and entered into as of
_________, 2006 by and between HEALTHRENU MEDICAL, INC., a Nevada corporation,
having offices at 12777 Jones Road, Suite 481, Houston, TX 77070 ("Debtor"), and
______________, having an address at _______________________________ ("Secured
Party"). This Agreement is made with reference to the following facts:

      WHEREAS, Secured Party has provided a loan to Debtor in the aggregate
amount of $_________ (the "Loan") pursuant to the terms and conditions of that
certain Subscription Agreement and Promissory Note dated as of even date
herewith and in accordance with the terms of the private placement offering as
described in the Debtor's Confidential Offering Memorandum dated February 8,
2006; and

      WHEREAS, Secured Party has agreed to make the Loan to Debtor provided that
Debtor grants a security interest to Secured Party in substantially all of the
assets of Debtor.

      NOW, THEREFORE, in consideration for Secured Party making the Loan to
Debtor, and in consideration of the foregoing recitals, and the mutual promises
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

      1. Grant of Security Interest. Debtor hereby grants to Secured Party a
continuing lien on and security interest in the property described or referred
to in Paragraph 2 below (the "Collateral") to secure prompt payment and full
performance of the liabilities described in Paragraph 3 below (collectively, the
"Liabilities"). The security interest described herein shall be subordinate to
the existing security interests set forth on Exhibit B attached hereto, as well
as any security interests held by any purchase money security interest holder,
any bank or any financial institution which requests a security interest in the
Debtor's assets for the purpose of financing the Debtor's operations or
purchasing inventory (together, the "Prior Security Holders").

      2. Collateral. The Collateral consists of all of Debtor's assets, now
owned and hereafter acquired, disclosed in Exhibit A attached hereto and made a
part hereof.

      3. Liabilities. The liabilities ("Liabilities") secured under this
Agreement are all liabilities of Debtor to Secured Party as set forth above.

      4. Title to Collateral. Debtor has good and marketable title to the
Collateral free and clear of any and all liens or other security interests
except as set forth on Exhibit B attached hereto. Debtor agrees to defend, at
its cost and expense, any action which may affect the Secured Party's security
interest in the Collateral.

<PAGE>

      5. Proceeds of Collateral. Subject to the rights of the Prior Security
Holders, upon the occurrence of an Event of Default (defined below) under this
Security Agreement, any cash proceeds of the Collateral received by Debtor shall
be immediately paid or delivered to the Secured Party, and any non-cash proceeds
shall be endorsed over, assigned and delivered to the Secured Party, to be
applied against the Liabilities due. Upon the occurrence of an Event of Default
hereunder, and subject to the rights of the Prior Security Holders, the Secured
Party shall have the right, in addition to its rights and remedies available at
law or in equity, to notify the account debtors of the Secured Party's security
interest in the Collateral and direct the account debtor(s) to remit all
subsequent payments on account of the collateral directly to the Secured Party.
Debtor covenants and agrees to execute such documents or instruments as may be
reasonably necessary or appropriate to confirm and perfect the Secured Party's
security interest in any proceeds of Collateral.

      6. Debtor's Covenants. Debtor covenants and agrees to:

            (a) appear in and defend, at Debtor's own expense, any action or
proceeding which may affect Debtor's title to or Secured Party's interest in the
Collateral;

            (b) procure or execute and deliver, from time to time, in form and
substance satisfactory to Secured Party, any endorsements, assignments,
financing statements or other writings deemed necessary or appropriate by
Secured Party to perfect, maintain or protect Secured Party's security interest
in the Collateral, and take such other action and deliver such other documents,
instruments and agreements pertaining to the Collateral as Secured Party may
request to effectuate the intent of this Agreement;

            (c) keep accurate and complete records of the Collateral and provide
Secured Party during normal business hours and upon reasonable notice with
access thereto and to Debtor's financial records, in each case with the right to
make extracts therefrom;

            (d) provide Secured Party during normal business hours and upon
reasonable notice with access to the Collateral, and with such other information
as Secured Party may reasonably request from time to time; and

            (e) maintain and preserve its corporate existence, and all rights,
privileges, franchises and other authority necessary for the conduct of its
business.

      7. Debtor's Principal Places of Business. Debtor represents and warrants
that its chief executive office and principal place of business is located at
12777 Jones Road, Suite 481, Houston, TX 77070. Debtor further represents and
warrants that all of the records of Debtor relating to the Collateral, and the
other books, records, journals, orders, receipts and correspondence of Debtor,
are located at and shall only be kept at Debtor's chief executive office. Debtor
will promptly notify Secured Party in writing at least thirty (30) days prior to
any proposed change of Debtor's place of business or chief executive office and
will execute such documents as may be necessary or appropriate to protect
Secured Party's security interest in the Collateral.

                                      2
<PAGE>

      8. Debtor's Books and Records. Debtor shall promptly make, stamp or record
such entries or legends on Debtor's internal books and records to indicate and
disclose that the Secured Party has a security interest in the Collateral.

      9. Perfection of Security Interest.

            (a) Simultaneously with the execution of this Agreement, Debtor
shall deliver or cause to be delivered to Secured Party any and all documents
evidencing ownership of the Collateral, which shall be held by Secured Party
until all Liabilities are satisfied by Debtor.

            (b) Debtor shall execute and/or hereby consents to the execution and
filing by Secured Party of such further instruments and documents, including
Uniform Commercial Code financing statements, as may be required by Secured
Party in order to render effective the terms and conditions of this Agreement.
Any such Uniform Commercial Code financing statements are to be filed in such
locations as Secured Party may require, at Debtor's sole expense. Debtor shall
provide Secured Party with satisfactory evidence that any common law or
statutory liens affecting the Collateral have been subordinated in favor of
Secured Party's security interest. Debtor shall also provide Secured Party with
true copies of all documents (negotiable or non-negotiable) which evidence
bailments together with evidence that all bailees have acknowledged that they
hold the Collateral for the benefit of Secured Party if required by Secured
Party.

      10. Authorized Action By Secured Party.

            (a) After the occurrence of any "Event of Default" (as defined
below) and while it is continuing, Debtor hereby irrevocably appoints Secured
Party as its attorney-in-fact to do (but Secured Party shall not be obligated to
and shall not incur any liability to Debtor or any third party for failure so to
do) any act which Debtor is obligated by this Security Agreement to do, and to
exercise such rights and powers as Debtor might exercise with respect to the
Collateral, including, without limitation, the right to:

                  (i) collect by legal proceedings or otherwise and endorse,
receive and receipt for all payments, proceeds and other sums and property now
or hereafter payable on or on account of the Collateral;

                  (ii) enter into any extension, deposit or other agreement
pertaining to, or deposit, surrender, accept, hold or apply other property in
exchange for, the Collateral;

                  (iii) discharge taxes, liens, interest, or perform or cause to
be performed on behalf of Debtor any actions, obligations, or covenants which
Debtor has failed or refused to perform;

                  (iv) process and preserve the Collateral; and

                  (v) make any compromise, settlement or adjustment, and take
any action it deems advisable, with respect to the Collateral.

                                      3
<PAGE>

            (b) Debtor agrees to reimburse Secured Party upon demand for any
costs and expenses, including attorneys' fees, Secured Party may incur while
acting as Debtor's attorney-in-fact hereunder, all of which costs and expenses
are included in the Liabilities secured hereby and are payable upon demand, with
interest thereon at the rate applicable to the obligations under the Note.

            (c) It is further agreed and understood between the parties hereto
that such care as Secured Party gives to the safekeeping of its own property of
like kind shall constitute reasonable care of the Collateral when in Secured
Party's possession; provided, however, that Secured Party shall not be required
to make any presentment, demand or protest, or give any notice and need not take
any action to preserve any rights against any prior party or any other person in
connection with the Liabilities or with respect to the Collateral.

            (d) Whether or not Debtor is in default, Debtor agrees that Secured
Party may at any time send verification requests, and so long as an Event of
Default has not occurred, such requests will not identify Secured Party to any
account debtor on any Collateral.

            (e) If Debtor's records are prepared or retained by a computer
service company or any accountant or accounting service, so long as any
Liabilities are outstanding, Debtor grants Secured Party the absolute and
irrevocable right, with reasonable notice to Debtor, to inspect such records
(including Debtor's internal work papers), receive duplicate copies of all
information furnished to Debtor and prepared by such company, accountant or
accounting service, and agrees to furnish such consents as may be necessary to
effectuate the same. Debtor further agrees to promptly notify Secured Party of
the name and address of such company, accountant or accounting service and of
any change in respect thereof.

            (f) All the foregoing powers authorized herein, being coupled with
an interest, are irrevocable so long as any Liabilities are outstanding.

      11. Default. The occurrence of any of the following events or conditions
(herein "Events of Default") shall constitute an Event of Default hereunder:

            (a) Debtor fails to perform, keep or observe any covenant (other
than for payment of Liabilities) within five (5) calendar days of the date
Debtor is required to perform, keep or observe such covenant;

            (b) non-payment of any of the Liabilities as and when due and
payable to Secured Party; or

            (c) the Collateral or any portion thereof shall have been sold or
transferred (other than in the ordinary course of business) or subject to any
other liens or encumbrances, without prior written consent of Secured Party; or

                                      4
<PAGE>

            (d) any bankruptcy or other insolvency proceeding is commenced by
Debtor, or any such proceeding is commenced against Debtor and remains
undischarged or unstayed for forty-five (45) days.

      12. Remedies. Upon the occurrence and during the continuation of any Event
of Default, Secured Party may, at its option, without notice to or demand on
Debtor, declare all Liabilities immediately due and payable, and Secured Party
shall have all the default rights and remedies of a secured party under the
California Uniform Commercial Code and other applicable law as well as the
following rights and remedies, all of which may be exercised with or without
further notice to Debtor subject to the rights of the Prior Security Holders:

            (a) to the extent permitted by law, to notify any and all obligors
and account debtors on the Collateral that the same has been assigned to Secured
Party and that all payments thereon are to be made directly to Secured Party;

            (b) to settle, compromise or release, on terms acceptable to Secured
Party, in whole or in part, any amounts owing on the Collateral, and to extend
the time of payment, make allowances and adjustments and to issue credits in
Secured Party's name or in the name of Debtor in respect thereof;

            (c) to enter any premises where any Collateral may be located and to
take possession of and remove the Collateral, with or without judicial process;

            (d) to sell or otherwise dispose of the Collateral or any part
thereof, for cash, on credit or otherwise, with or without representations or
warranties, and upon such terms as shall be acceptable to Secured Party;

            (e) to remove from any premises where the same may be located, any
and all documents, instruments, files and records relating to the collateral,
and Secured Party may, at Debtor's expense, use the supplies and space of Debtor
at its places of business as may be necessary to properly administer and control
the Collateral or the handling of collections and realizations thereon;

            (f) to endorse Debtor's name on all checks, notes, drafts, money
orders or other forms of payment of or security for the Collateral;

            (g) prepare and file any bankruptcy proofs of claim or similar
documents against any account debtor;

            (h) prepare and file any notice, assignment, satisfaction or release
of lien, UCC termination statement or similar document.

                                      5
<PAGE>

            (i) receive, open and dispose of all mail addressed to Debtor and
notify postal authorities to change the address for delivery thereof to such
address as Secured Party may designate; and

            (j) take or bring, in Secured Party's name or in the name of Debtor,
all steps, actions, suits or proceedings deemed by Secured Party necessary or
desirable to effect collection of or to realize upon the Collateral; all at
Secured Party's sole option and as Secured Party in its sole discretion may deem
advisable.

      13. Application of Proceeds of Collateral. The net cash proceeds resulting
from the collection, liquidation, sale or other disposition of the Collateral,
subject to the rights of the Prior Security Holders, shall be applied first to
the expenses (including all attorneys' fees) of retaking, holding, processing
and preparing for sale, selling, collecting, liquidating and the like, and then
to the satisfaction of all Liabilities secured hereby, application as to any
particular obligation or indebtedness or against principal or interest to be in
Secured Party's discretion. The balance, if any, shall be paid in accordance
with applicable law or as a court of competent jurisdiction may direct. Debtor
shall be liable to Secured Party and shall pay to Secured Party on demand any
deficiency which may remain after such sale, disposition, collection or
liquidation of Collateral.

      14. Cumulative Rights. The rights, powers and remedies of Secured Party
under this Agreement shall be in addition to all rights, powers and remedies
given to Secured Party under any statute or rule of law or any other document,
instrument or agreement, all of which rights, powers and remedies shall be
cumulative and may be exercised successively or concurrently.

      15. Waiver. Any forbearance, failure or delay by Secured Party in
exercising any right, power or remedy shall not preclude the further exercise
thereof, and every right, power or remedy of Secured Party shall continue in
full force and effect until such right, power or remedy is specifically waived
in a writing executed by Secured Party. Debtor waives any right to require
Secured Party to proceed against any person or to exhaust any Collateral or to
pursue any remedy in Secured Party's power prior to pursuing Debtor in respect
of the Liabilities.

      16. Setoff. Debtor agrees that Secured Party may exercise its rights of
setoff with respect to the Liabilities in the same manner as if the Liabilities
were unsecured.

      17. Binding Upon Successors. All rights of Secured Party under this
Agreement shall inure to the benefit of Secured Party and its successors and
assigns, and all obligations of Debtor shall bind the Debtor and its successors
and assigns.

      18. Entire Agreement; Severability. This Agreement contains the entire
security agreement between Secured Party and Debtor with respect to the
Collateral. If any of the provisions of this Agreement shall be held invalid or
unenforceable, this Agreement shall be construed as if not containing those
provisions and the rights and obligations of the parties hereto shall be
construed and enforced accordingly.

                                      6
<PAGE>

      19. Further Assurances. Debtor agrees that it shall, upon request, execute
and deliver any financing statement, continuation statement or other agreement
in writing necessary to evidence, preserve, protect or enforce the Secured
Party's rights and interests in the Collateral.

      20. References. The captions or titles of the paragraphs of this Agreement
are for convenience of reference only and shall not define or limit the
provisions hereof.

      21. Choice of Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of New York, and, where applicable and
except as otherwise defined herein, terms used herein shall have the meanings
given them in the New York Uniform Commercial Code.

                  DEBTOR IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO
            THE JURISDICTION OF THE SUPERIOR COURT OF THE STATE OF NEW
            YORK FOR THE COUNTY OF NEW YORK OR THE UNITED STATES
            DISTRICT COURT FOR THE DISTRICT OF NEW YORK, AS SECURED
            PARTY MAY DEEM APPROPRIATE, OR IF REQUIRED, THE MUNICIPAL
            COURT OF THE STATE OF NEW YORK FOR THE COUNTY OF NEW YORK
            IN CONNECTION WITH ANY LEGAL ACTION OR PROCEEDING ARISING
            OUT OF OR RELATING TO THIS AGREEMENT, AND DEBTOR WAIVES
            ANY OBJECTION RELATING TO THE BASIS FOR PERSONAL OR IN REM
            JURISDICTION OR TO VENUE WHICH IT MAY NOW OR HEREAFTER
            HAVE IN ANY SUCH SUIT, ACTION OR PROCEEDING. DEBTOR WAIVES
            ALL RIGHTS TO TRIAL BY JURY TO THE EXTENT PERMITTED BY
            LAW.

      22. Attorneys' Fees. If any legal action or proceeding shall be commenced
at any time by any party to this Agreement in connection with the interpretation
of this Agreement or the enforcement of any rights or remedies hereunder, the
prevailing party or parties in such action or proceeding shall be entitled to
reimbursement of its reasonable attorneys' fees and costs in connection
therewith, in addition to all other relief to which the prevailing party or
parties may be entitled.

      23. Notice. Any written notice, consent or other communication provided
for in this Agreement shall be delivered personally (effective upon delivery),
via overnight courier (effective the next day after dispatch) or via U.S. Mail
(effective 3 days after mailing, postage prepaid, first class) to each party at
its address set forth next to its signature below, or to such other address as
either party shall specify to the other; provided, that all notices to Secured
Party shall be copied to any assignee of Secured Party's rights hereunder.

      24. Counterparts. This Agreement may be executed in any number of
counterparts, and by the parties hereto in separate counterparts, each of which
when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.

                                      7
<PAGE>

      IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

Address for Notices:                      DEBTOR:

12777 Jones Road
Suite 481
Houston, TX 77070                         By:
                                             --------------------
                                             Robert W. Prokos
                                             President & Chief Executive Officer

Address for Notices:                      SECURED PARTY:

---------------------------               -----------------------------

---------------------------               -----------------------------

                                      8
<PAGE>

                                    EXHIBIT A

                     Debtor:  HealthRenu Medical, Inc.

                     Secured Party:
                                   -------------------

      "Collateral" shall mean the following:

      (a) all of Debtor's inventory, including, but not limited to, all goods
intended for sale or lease by Debtor, or for display or demonstration, all work
in process, all raw materials and other materials and supplies of every nature
and description used or which might be used in connection with the manufacture,
printing, packing, shipping, advertising, selling, leasing or furnishing of such
goods or otherwise used or consumed in Debtor's business, and all documents
evidencing and general intangibles relating to any of the foregoing, whether now
owned or hereafter acquired by Debtor; and

      (b) all present and future accounts receivable.

<PAGE>

                                    EXHIBIT B

                     Schedule of Existing Security Interests

                                [To be provided]

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