Document:

DEBENTURE AGREEMENT

DEBENTURE AGREEMENT

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SUCH LAWS.  THE SECURITIES ARE SUBJECT TO RESTRICTIONS OF TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SUCH LAWS PURSUANT TO REGISTRATION OR AN EXEMPTION THEREFROM.  THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE OFFERING MATERIALS.  ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

FACE AMOUNT

$250,000

PRICE 

$250,000

DEBENTURE NUMBER

May 2007-101

ISSUANCE DATE

May 7, 2007

MATURITY DATE

November 7, 2007

     FOR VALUE RECEIVED, Genesis BioVentures, Inc., a New York corporation (the "Company"), hereby promises to pay EFUND SMALL CAP FUND II, LP (the "Holder") by November 2, 207 (the "Maturity Date"), the principal amount of Two Hundred Fifty Thousand Dollars ($250,000)U.S., and to pay interest and redemption on the principal amount hereof, and any accrued penalties, in such amounts, at such times and on such terms and conditions as are specified herein.

 Article 1     Interest

The Company shall pay a twelve percent (12%) annual coupon on the unpaid Face Amount of this Debenture (this "Debenture") at such times and in such amounts as determined by the Holder.  The Holder shall have the right to request interest payments on the Face Amount anytime after closing and each month thereafter.  The Holder shall submit to the Company a notice requesting a payment in the amount equal to the interest accruing for that month on the balance of the Debenture.  The Interest shall be compounded daily.

     Any monies paid to the Holder in excess of the interest due when paid shall be credited toward the Redemption of the Face Amount of the Debenture.

Article 2     Method of Payment

Section 2.1     Cash Payments

If requested by the Holder, the Company will make amortizing payments to the Holder (a "Payment," or collectively, the "Payments") on a monthly basis on the first business day of each month while there is an outstanding balance on the Debenture, in an amount to be determined by the Holder and the Company based on the Company's then current financial position.  ("Payment Amount" or collectively, the "Payment Amounts").  In no event, shall the Payment be less than the Interest accruing on the outstanding balance of the Debenture.

     Section 2.2     Conversion Payments

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     The Holder, at its sole option, shall be entitled to either i) request a Payment from the Company in the amounts set forth in Section 2.1, above; or, ii) the Holder may elect to convert a portion of the Debenture pursuant to Article 3, below, in an amount equal to or greater than the Payment Amount.   In the event the Holder is unable to convert that portion of the debenture equal to the Payment Amount during a calendar month, the Company shall make a Payment in cash in an amount equal to the difference between the amount converted by the Holder and the Payment Amount due for that month.

Nothing contained in this Article 2 shall limit the amount the Holder can elect to convert during a calendar month except as defined in Section 3.2 (i), below.

     All Payments made under Article 2, shall be applied toward the Redemption Amount as outlined in Article 14, herein.

     Section 2.3 No Penalty for Prepayment.

The Company may make additional payments toward Redemption ("Prepayment") without any penalties. 

Section 2.4 Accelerated Repayments in the Event of a Subsequent Financing by a Third Party.

If, at any time after Closing, the Company receives financing from a third party (excluding the Holder), the Company is required to pay to the Holder 100% of the proceeds raised from the third party in excess of an aggregate amount of $750,000 (the “Threshold Amount") until such time as the Face Amount of the Debenture has been paid in full.  The Threshold Amount shall also pertain to any assets sold, transferred or disposed of by the Company.  The Company agrees to pay one hundred percent (100%) of any proceeds raised by the Company over the Threshold Amount toward the accelerated repayment of the Debenture with Interest until such time as the Face Amount of the Debenture has been paid in full.  The accelerated Repayment shall be made to the Holder upon the Company's receipt of the financing. Failure to do so will result in an Event of Default as set forth herein.

Article 3     Conversion

     Section 3.1     Conversion Privilege

     (a)     The Holder of this Debenture shall have the right to convert any and all amounts owing under this Debenture into shares of Common Stock at any time following the Closing Date and which is before the close of business on the Maturity Date, except as set forth in Section 3.2(c) below.  The number of shares of Common Stock issuable upon the conversion of this Debenture is determined pursuant to Section 3.2 and rounding the result to the nearest whole share.

     (b)     This Debenture may not be converted, whether in whole or in part, except in accordance with this Article 3.

     (c)     In the event all or any portion of this Debenture  remains outstanding on the Maturity Date, the unconverted portion of such Debenture will automatically be converted into shares of Common Stock on such date in the manner set forth in Section 3.2.

     Section 3.2     Conversion Procedure

     (a)     Conversion Procedures.  The unpaid Face Amount of and accrued interest on this Debenture may be converted, in whole or in part, at any time following the Closing Date.  Such conversion shall be effectuated by the Holder sending to the Company a facsimile or electronic mail version of the signed Notice of Conversion which evidences the Holder's intention to convert the Debenture indicated.  The date on which the Notice of Conversion is delivered ("Conversion Date") shall be deemed to be the date on which the Holder has delivered to the Company a facsimile or electronic mail of the signed Notice of Conversion.  Notwithstanding the above, any Notice of Conversion received by 5:00 P.M. EST, shall be deemed to have been received the previous business day, with receipt being via a confirmation of time of facsimile of the Holder.

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     (b)     Common Stock to be issued.     Upon the Holder's conversion of any Debenture, the Company shall issue the number of shares of Common Stock equal to the Conversion.  If,  at the time of conversion, the Registration Statement has been  declared  effective, the Company shall instruct its transfer agent to issue stock  certificates without restrictive legend (other than a legend referring to the  registration  statement  and prospectus delivery requires) or stop transfer instructions.  If at the time of Holder's conversion, the Registration Statement has not been declared effective, the Company shall instruct the transfer agent to issue the certificates with an appropriate legend.  The Company shall act as Registrar  and  shall  maintain  an  appropriate ledger containing the necessary information  with  respect  to  each  Debenture.  The  Company  warrants that no instructions, other than these instructions, have been given or will be given to the  transfer  agent and that the Common Stock shall otherwise be freely resold, except  as  may  be  otherwise  set  forth  herein.

(c)     Conversion Price.  Holder is entitled to convert the unpaid Face Amount of this Debenture, plus accrued interest and penalties, any time following a Closing Date, at the lesser of (i) 75% of the lowest closing bid price of the Common Stock for the fifteen trading day period prior to a Conversion; or, (ii) at eight cents ($.08).  The lower of (i) or (ii) being referred to as a "Conversion Price".  No fractional shares or scrip representing fractions of shares will be issued on conversion, but the number of shares issuable shall be rounded up, as the case may be, to the nearest whole share.  The Holder shall retain all rights of conversions during any partial trading days.

     (d)     Maximum Interest.  Nothing contained in this Debenture shall be deemed to establish or require the Company to pay interest to the Holder at a rate in excess of the maximum rate permitted by governing law.  In the event that the rate of interest required to be paid exceeds the maximum rate permitted by governing law, the rate of interest required to be paid there under shall be automatically reduced to the maximum rate permitted under the governing law and such excess, if so ordered, shall be credited on any remaining balances due to the Holder with reasonable promptness by the Holder to the Company.  In the event this Section 3.2 (d) applies, the Parties agree that the terms of this Debenture remain in full force and effect except as is necessary to make the interest rate comply with applicable law.

     (e)     Opinion Letter.  It shall be the Company's responsibility to take all necessary actions and to bear all such costs to issue the Common Stock as provided herein, including the responsibility and cost for delivery of an opinion letter to the transfer agent, if so required.  The person or entity in whose name the certificate of Common Stock is to be registered shall be treated as a shareholder of record on and after the conversion date. Upon surrender of any Debentures that are to be converted in part, the Company shall issue to the Holder a new Debenture equal to the unconverted amount, if so requested in writing by Holder.

     (f)     Delivery of Shares.  Within three (3) business days after receipt of the documentation referred to above in Section 3.2(a), the Company shall deliver a certificate, in accordance with Section 3.2(c) for the number of shares of Common Stock issuable upon the conversion.  In the event the Company does not make delivery of the Common Stock, as instructed by Holder, within three (3) business days after the Conversion Date, the Company shall pay to Holder in cash, as liquidated damages, an additional three percent (3%) per day of the dollar value of the Debentures being converted.

     If the failure of the Company to issue the Common Stock pursuant to this Section 3.2 (f) is due to the unavailability of authorized shares of Common Stock, the provisions of this Section 3.2 (f) shall not apply, but instead the provisions of Section 3.2 (k) shall apply.

              The Company shall make any payments required under this Section 3.2(f) in immediately available funds within three (3) business days from the date the Common Stock is fully delivered.  Nothing herein shall limit the Holder's right to pursue actual damages or cancel the conversion for the Company's failure to issue and deliver Common Stock to the Holder within three (3) business days after the Conversion Date.

     The Company shall at all times reserve (or make alternative written arrangements for reservation or contribution of shares) and have available all Common Stock necessary to meet conversion of the Debentures by Holder of the entire amount of Debentures then outstanding.  If, at any time, the Holder submits a Notice of Conversion and the Company does not have sufficient authorized but unissued shares of Common Stock (or alternative shares of Common Stock as may be contributed by Stockholders) available to effect, in full, a conversion of the Debentures (a 

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"Conversion Default", the date of such default being referred to herein as the "Conversion Default Date"), the Company shall issue to the Holder all of the shares of Common Stock which are available.  Any Convertible Debentures or any portion thereof, which cannot be converted due to the Company’s lack of sufficient authorized common stock (the "Unconverted Debentures"), may be deemed null and void upon written notice sent by the Holder to the Company.  The Company shall provide notice of such Conversion Default ("Notice of Conversion Default") to the Holder, by facsimile, within one (1) business days of such default.

     In the event of Conversion Default, the Company will pay to the Holder the amount of (N/365) x (.48) x the initial issuance price of the outstanding and/or tendered but not converted Debentures held by each Holder where N = the number of days from the Conversion Default Date to the date that the Company authorizes a sufficient number of shares of Common Stock to effect conversion of all remaining Debentures (the "Authorization Date").  The Company shall send notice to Holder of outstanding Debenture that additional shares of Common Stock have been authorized; stating the Authorization Date and the amount of Holder's accrued Conversion Default  Payments ("Authorization Notice").  The accrued Conversion Default shall  be  paid in cash or shall be convertible into Common Stock at the Conversion  Rate, upon written notice sent by the Holder to the Company, as follows:   (i) in the event the Holder elects to take such payment in cash, cash  payment shall be made to the Holder within five (5) business days, or (ii) in the event Holder elects to take such payment in stock, the Holder may convert at the conversion rate set forth in the first sentence of this  paragraph within five (5) business days until the expiration of the conversion period.

     The Company acknowledges that its failure to maintain a sufficient number of authorized but unissued shares of Common Stock to effect in full a conversion of the Debenture will cause the Holder to suffer irreparable harm, and those damages will be difficult to ascertain.  Accordingly, the parties agree that it is appropriate to include in this Agreement a provision for liquidated damages.

The parties acknowledge and agree that the liquidated damages provision set forth in this section represents the parties' good faith effort to quantify such damages and, as such, agree that the form and amount of such liquidated damages are reasonable and will not constitute a penalty.  The payment of liquidated damages shall not relieve the Company from its obligations to deliver the Common Stock pursuant to the terms of this Debenture.  Nothing herein shall limit the Holder’s right to pursue actual damages for the Company's failure to maintain a sufficient number of authorized shares of Common Stock.

     If,  by the third (3rd) business day after the Conversion Date, any portion of the shares of the Convertible Debentures have not been delivered to the Holder and the Holder purchases, in an open market transaction or otherwise, shares of Common Stock (the "Covering Shares") necessary to make delivery of shares which would have been delivered if the full amount of the shares to be converted and delivered to the Holder, then the Company shall pay to the Holder, in addition to any other  amounts due to Holder pursuant to this Convertible Debenture, and not  in lieu thereof, the Buy-In Adjustment Amount (as defined below).  The "Buy  In  Adjustment Amount" is the amount equal to the excess, if any, of (x) the Holder's total purchase price (including brokerage commissions, if any) for  the Covering Shares over (y) the net proceeds (after brokerage commissions, if any) received by the Holder from the sale of the Sold Shares.

The Company shall pay the Buy-In Adjustment Amount to the Holder in immediately available funds within five (5) business days of written demand by the Holder. By way of illustration and not in limitation of the foregoing, if the Holder purchases shares of Common Stock having a total purchase price (including brokerage commissions) of $11,000 to cover a Buy-In with respect to shares of Common Stock it sold for net proceeds of $10,000, the Buy-In Adjustment Amount which the Company will be required to pay to the Holder will be $1,000.

     (g)     Prospectus and Other Documents. The Company shall furnish to Holder such number of prospectuses and other documents incidental to the registration of the shares of Common Stock underlying the Debentures, including any amendment of or supplements thereto.  Any filings submitted via EDGAR will constitute fulfillment of the Company’s obligation under this Section.

     (h)     Limitation on Issuance of Shares. If the Company's Common Stock becomes listed on the Nasdaq SmallCap Market after the issuance of the Debenture, the Company may be limited in the number of shares of 

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Common Stock it may issue by virtue of (A) the number of authorized shares or (B) the applicable rules and regulations of the principal securities market on which the Common Stock is listed or traded, including, but not necessarily limited to, NASDAQ Rule 4310(c)(25)(H)(i) or Rule 4460(i)(1), as may be applicable (collectively, the  "Cap Regulations").  Without limiting the other provisions thereof; (i) the Company will take all steps reasonably necessary to be in a position to issue shares of Common Stock on conversion of the Debentures without violating the Cap Regulations and (ii)  if, despite taking such steps, the Company still cannot issue such shares  of Common Stock without violating the Cap Regulations, the Holder cannot convert as result of the Cap Regulations (each such Debenture, an "Unconverted  Debenture") shall have the right to elect either of the following remedies: (x) if permitted by the Cap Regulations, require the Company to issue shares of Common Stock in accordance with the Holder's Notice of Conversion at a conversion purchase price equal to the average of the closing bid price per share of Common Stock for any five (5) consecutive Trading Days (subject to certain equitable adjustments for certain events occurring during such period) during the sixty (60) Trading Days immediately preceding the Conversion Date; or(y) require the Company to redeem each Unconverted Debenture for an amount (the "Redemption Amount"), payable in cash, equal to the sum of (i) one hundred thirty-three percent (133%) of the principal of an Unconverted Debenture, plus (ii) any accrued but unpaid interest and penalties thereon through and including the date on which the Redemption Amount is paid to the holder (the "Redemption Date").

     The Holder of an Unconverted Debenture may elect one of the above remedies with respect to a portion of such Unconverted Debenture and the other remedy with respect to other portions of the Unconverted Debenture.  The Debenture shall contain provisions substantially consistent with the above terms, with such additional provisions as may be consented to by the Holder.  The provisions of this section are not intended to limit the scope of the provisions otherwise included in the Debenture.

     (i)     Limitation on Amount of Conversion and Ownership. Notwithstanding anything to the contrary in  this Debenture, in no event shall the Holder be entitled to convert that amount of Debenture, and in no event shall the Company permit that amount of conversion, into that number of shares, which when added to the sum of the number of shares of Common Stock beneficially owned, (as such term is defined under Section 13(d) and Rule 13d-3 of the Securities Exchange Act of 1934, as may be amended, (the "1934 Act")), by the Holder, would exceed 4.99% of the number of shares of Common Stock outstanding on the Conversion Date, as determined in accordance with Rule 13d-1(j) of the 1934 Act. In the event that the number of shares of Common Stock outstanding as determined in accordance with Section 13(d) of the 1934 Act is different on any Conversion Date than it was on the Closing Date, then the number of shares of Common Stock outstanding on such Conversion Date shall govern for purposes of determining whether the Holder would be acquiring beneficial ownership of more than 4.99% of the number of shares of Common Stock outstanding on such Conversion Date.

     (j)     Legend.  The Holder acknowledges that each certificate representing the Debentures, and the Common Stock unless registered pursuant to the Registration Rights Agreement, shall be stamped or otherwise imprinted with a legend substantially in the following form:

THE SECURITIES EVIDENCED BY THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT (i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (ii) TO THE EXTENT APPLICABLE, PURSUANT TO RULE 144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) PURSUANT TO AN AVAILABLE EXEMPTION  FROM REGISTRATION UNDER SUCH ACT.

     (k)  Prior to conversion of the Debenture, if at any time the conversion of all the Debentures and exercise of all the Warrants outstanding would result in an insufficient number of authorized shares of Common Stock being available to cover all the conversions, then in such event, the Company will move to call and hold a shareholder's meeting or have shareholder action with written consent of the proper number of shareholders within thirty (30) days of such event, or such greater period of time if statutorily required or reasonably necessary in regards to standard brokerage house and/or SEC requirements and/or procedures, for the purpose of authorizing additional shares of Common Stock to facilitate the conversions.   In such an event management of the Company shall recommend to all shareholders to vote their shares in favor of increasing the authorized number of shares of Common Stock. 

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Management of the Company shall vote all of its shares of Common Stock in favor of increasing the number of shares of authorized Common Stock to an amount equal to three hundred percent (300%) of the balance on the Debenture.  The Company represents and warrants that under no circumstances will it deny or prevent the Holder's right to convert the Debentures as permitted under the terms of this Agreement or the Registration Rights Agreement.  Nothing in this Section shall limit the obligation of the Company to make the payments set forth in this Section 3.  The Holder, at his option, may request the company to authorize and issue additional shares if the Holder feels it is necessary for conversions in the future. In the event the Company's shareholder's meeting does not result in the necessary authorization, the Company shall redeem the outstanding Debentures for an amount equal to the sum of the principal of the outstanding Debentures plus accrued interest thereon multiplied by 133%.

     Section 3.3     Fractional Shares.  The Company shall not issue fractional shares of Common Stock, or scrip representing fractions of such shares, upon the conversion of this Debenture.  Instead, the Company shall round up or down, as the case may be, to the nearest whole share.

     Section 3.4     Taxes on Conversion.  The Company shall pay any documentary, stamp or similar issue or transfer tax due on the issue of shares of Common Stock upon the conversion of this Debenture.  However, the Holder shall pay any such tax which is due because the shares are issued in a name other than its name.

     Section 3.5     Company to Reserve Stock.  The Company shall reserve the number of shares of Common Stock required pursuant to and upon the terms set forth in the Subscription Agreement to permit the conversion of this Debenture. All  shares of Common Stock which may be issued upon the conversion hereof shall upon issuance by the Company be validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issuance thereof.

     Section 3.6     Restrictions on Sale.  This Debenture has not been registered under the Securities Act of 1933, as amended (the "Act") and is being issued under Section 4(2) of the Act and Rule 506 of Regulation D promulgated under the Act.  This Debenture and the Common Stock issuable upon the conversion thereof may only be sold pursuant to registration or under an exemption from the Act.

     Section 3.7     Stock Splits, Combinations and Dividends.  If the shares of Common  Stock are subdivided or combined into a greater or smaller number of shares of Common Stock, or if a dividend is paid on the Common Stock in shares of  Common  Stock, the Conversion Price shall be proportionately reduced in case of subdivision of shares or stock dividend or proportionately increased in the case of combination of shares, in each such case, by the ratio of the total number of shares of Common Stock outstanding immediately after such event bears to the total number of shares of Common Stock outstanding immediately prior to such event.

Article 4     Mergers

     The Company shall not consolidate or merge into, or transfer any or all of its assets to, any person, unless such person assumes in writing the obligations of the Company under this Debenture and immediately after such transaction no Event of Default exists.  Any reference herein to the Company shall refer to such surviving or transferee corporation and the obligations of the Company shall terminate only upon such written assumption of the Company's obligation. The Company shall make notice to the Holder simultaneously with the dissemination of a Merger to the public markets.

Article 5 Security

     Intentionally Left Blank

Article 6     Defaults and Remedies

     Section 6.1     Events of Default.  An "Event of Default" occurs if any one of the following occurs:

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     (a)  the Company does not make the Payment of the principal, interest or other sum due under this Debenture by the Holder's conversion into Common Stock, within five (5) business days of the Maturity Date, upon redemption, Conversion Date or otherwise described herein; or,

     (b)  The Company does not make a Payment in cash for a period of three (3) business days when due as described in this Agreement; or,

     (c)  any  f the Company's representations or warranties contained in   this Debenture were false when made or the Company fails to comply with any of its other agreements and such failure continues for a period of  five (5) business days; or,

     (d)  The Company pursuant to or within the meaning of any Bankruptcy Law:  (i) commences a voluntary case; (ii) consents to the entry of an order for relief against it in an involuntary case; (iii) consents to the appointment of a Custodian (as hereinafter defined) of it or for all or substantially all of its property  or (iv) makes a general assignment for the benefit of its creditors or (v) a court of competent jurisdiction  enters an order or decree under any Bankruptcy Law that:  (A) is for relief against the Company in an involuntary case; (B) appoints a Custodian of the Company or for all or substantially all of its property or (C) orders the liquidation of the Company, and the order or decree remains unstayed and in effect for sixty (60) calendar days; or,

     (e)  the Company's Common Stock is suspended or no is longer listed on any recognized exchange including electronic over-the-counter bulletin  board ("Principal Market") for more than three (3) consecutive Trading Days. Failure to comply with the requirements for continued listing on a Principal Market for a period of five (5) trading days; or notification from a Principal Market that the Company is not  in compliance with the conditions for such continued listing on such Principal Market; or,

     (f)  The Company breaches any covenant or condition of this Agreement, and such breach, if subject to cure, continues for a period of five (5) business days.

     Section 6.2     Remedies.  In the Event of Default, the Holder may elect to secure a portion of the Company's assets in Pledged Collateral (as defined in the Security Agreement).  The Holder may also elect to garnish Revenue from the Company in an amount that will repay the Holder on the schedules outlined in this Agreement.

     In the Event of Default, as outlined in this Agreement, the Holder can exercise its right to increase the Face Amount of the Debenture by ten percent (10%) as an initial penalty, and an additional ten percent (10%) for each subsequent Event of Default under this Agreement.  In addition, the Holder may elect to increase the Face Amount by two and one-half percent (2.5%) per month (pro-rata for partial periods) paid as a penalty for liquated damages ("Liquidated Damages").  The Liquated Damages will be compounded daily.  It is the intention and acknowledgement of both parties that the Liquidated Damages not be deemed as interest under the terms of this Agreement.

     The Company agrees that the date of consideration for the Debenture shall remain the Issuance Date stated herein.  The Company shall provide an opinion letter from counsel within two (2) business days of written request by the Holder stating that the date of consideration for the Debenture is the Issuance Date and submission of proper Rule 144, promulgated under the Securities Act of 1933, support documentation consisting of Form 144, a broker's representation letter and a seller's representation letter.  In the event the Company does not deliver the opinion letter within two business days, the Default Conversion Price shall immediately decrease by two percent (2%) for each business day an opinion letter fails to be delivered.  In the event that counsel to the Company fails or refuses to render an opinion as required to issue the Shares in accordance with this paragraph (either with or without restrictive legends, as applicable), then the Company irrevocably and expressly authorizes counsel to the Holder to render such opinion and shall authorize the Transfer Agent to accept and to rely on such opinion for the purposes of issuing the Shares.  Any costs incurred by Holder for such opinion letter shall be added to the Face Amount of the Debenture. 

     Section 6.3

Acceleration.  If an Event of Default occurs, the Holder hereof by notice to the Company may declare the remaining principal amount of this Debenture, together with all accrued interest, penalties and any liquidated damages, to be due and payable.

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     Section 6.4     Seniority.  No indebtedness of the Company is issued after this Debenture shall be senior to this Debenture in right of payment, whether with respect to interest, damages or upon liquidation or dissolution or otherwise.

     Section 6.5     Cost of Collections.  If an Event of Default occurs, the Company shall pay the Holder hereof reasonable costs of collection, including reasonable attorney’s fees.

Article 7     Registered Debentures

Section 7.1     Record Ownership.  The Company, or its attorney, shall maintain a register of the Holder of the Debentures (the "Register") showing their names and addresses and the serial numbers and principal amounts of Debentures issued to them.  The Register may be maintained in electronic, magnetic or other computerized form.  The Company may treat the person named as the Holder of this Debenture in the Register as the sole owner of this Debenture.   The Holder of this  Debenture is the person exclusively  entitled to receive payments of interest on this Debenture, receive  notifications with respect to this Debenture, convert it into Common Stock and otherwise exercise all of the rights and powers as the absolute  owner hereof.

     Worn or Lost Debentures.  If this Debenture becomes worn, defaced or mutilated but is still substantially intact and recognizable, the Company or its agent may issue a new Debenture in lieu hereof upon its surrender.   Where the Holder of this Debenture claims that the Debenture has been lost, destroyed or wrongfully taken, the Company shall issue a new Debenture in place of the Debenture if the Holder so requests by written notice  to the Company.

Article 8     Notice.

     Any notices, consents, waivers or other communications required  or permitted to be given under the terms of this Debenture must be in writing and will be deemed to have been delivered (i) upon receipt,  when delivered personally; (ii) upon receipt, when sent by facsimile (provided a confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) 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:

Douglas Lane, CEO

Genesis BioVentures, Inc.

10940 Wilshire Blvd.

Los Angeles, CA 90024

Telephone:  (310) 443-4102

Facsimile:  (310) 443-4103

If to the Investor:

Barrett Evans

EFund Capital Management

211 E. Ocean Blvd., Suite 218

Long Beach, CA 90802

Telephone:  562-983-0660

Facsimile:  310-861-1033

     Each party shall provide five (5) business days prior notice to the other party of any change in address, phone number or facsimile number.

Article 9 Times

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     Where this Note authorizes or requires the payment of money or the performance of a condition or obligation on a Saturday or Sunday or a holiday on which the United States Stock Markets ("US Markets")are closed ("Holiday"), such payment shall be made or condition or obligation performed on the last business day preceding such Saturday, Sunday or Holiday.  A "business day" shall mean a day on which the US Markets are open for a full day or half day of trading.

Article 10     Assignment

     This Debenture and the obligation hereunder shall not be assignable by the Company.  The Holder may assign this Debenture to another holder.

Article 11     Rules of Construction.

     In this Debenture, unless the context otherwise requires, words in the singular number include the plural, and in the plural include the singular, and words of the masculine gender include the feminine and the neuter, and when the sense so indicates, words of the neuter gender may refer to any gender.  The numbers and titles of sections contained in the Debenture are inserted for convenience of reference only, and they neither form a part of this Debenture nor are they to be used in the construction or interpretation hereof.  Wherever, in this Debenture, a determination of the Company is required or allowed, such determination shall be made by a majority of the Board of Directors of the Company and if it is made in good faith, it shall be conclusive and binding upon the Company and the Holder of this Debenture.

Article 12     Governing Law

     The validity, terms, performance and enforcement of this Debenture shall be governed and construed by the provisions hereof and in accordance with the laws of the State of California applicable to agreements that are negotiated, executed, delivered and performed solely in the State of California.

Article 13     Disputes under Agreement

     All disputes arising under this agreement shall be governed by and interpreted in accordance with the laws of the State of California, without regard to principles of conflict of laws.  The parties to this agreement will submit all disputes arising under this agreement to arbitration in Los Angeles, California before a single arbitrator of the American Arbitration Association ("AAA").  The arbitrator shall be selected by application of the rules of the AAA, or by mutual agreement of the parties, except that such arbitrator shall be an attorney admitted to practice law in the State of California.  No party to this agreement will challenge the jurisdiction or venue provisions as provided in this section.   Nothing in this section shall limit the Holder's right to obtain an injunction for a breach of this Agreement from a court of law.

Article 14 Redemption

     The Holder shall have the right to be redeemed from the Debenture, in whole or in part, at a price equal to one hundred and twenty percent (120%) of the outstanding  principal amount of the Debenture, including accrued interest (and penalties if applicable).  Any Payments, as defined in Article 2 above, shall apply to the Redemption Amount.

Article 15     Use of Proceeds

     For general corporate purposes and working capital.    

Article 16     Reserved

Article 17     Waiver

Page 9 of 12

The Holder’s delay or failure at any time or times hereafter to require strict performance by the Company of any undertakings, agreements or covenants shall not waive, affect, or diminish any right of the Holder under this Agreement to demand strict compliance and performance herewith. Any waiver by the Holder of any  Event  of  Default  shall  not  waive or affect any other Event of Default, whether  such Event of Default is prior or subsequent thereto and whether of the same  or a different type. None of the undertakings, agreements and covenants of the  Company  contained  in  this  Agreement,  and no Event of Default, shall be deemed  to  have  been  waived by the Holder, nor may this Agreement be amended, changed  or  modified,  unless such waiver, amendment, change or modification is evidenced  by an instrument in writing specifying such waiver, amendment, change or  modification  and  signed  by  the  Holder.

Article 18     Integration

This  Debenture  is  the FINAL AGREEMENT between the Company and the Holder with respect  to  the  terms  and conditions set forth herein, and, the terms of this Debenture  may  not  be  contradicted  by evidence of prior, contemporaneous, or subsequent  oral  agreements of the Parties.  The execution and delivery of this Debenture shall not alter the prior written agreements between the Company and the Holder.

Article 19     Failure to Meet Obligations

           The  Company  acknowledges that its failure to timely meet any of its obligations  hereunder,  including,  but without limitations, its obligations to make  Payments,  deliver  shares  and,  as  necessary,  to register and maintain sufficient  number  of  Shares, will cause the Holder to suffer irreparable harm and,  that  the  actual  damage  to  the  Holder will be difficult to ascertain.  Accordingly, the parties agree that it is appropriate to include in this Debenture a provision for liquidated damages.  The parties acknowledge and agree that the liquidated damages provision set forth in this section represents the parties' good faith effort to quantify such damages and, as such, agree that the form and amount of such liquidated damages are reasonable and do not constitute a penalty.  The payment of liquidated damages shall not relieve the Company from its obligations to deliver the Common Stock pursuant to the terms of this Debenture.

Article 20     Registration

     The Company shall file a registration statement with the SEC, within 30  days following the signing of this Debenture ("Filing Date"), covering the Debenture.  The number of shares of Stock registered shall be equivalent to the sum of:  1) the Face Amount divided by the Conversion Price. The Company agrees that if such registration statement has not been submitted to the SEC by the Filing Date, the Conversion Price will initially drop ten percent (10%) and an additional ten percent (10%) for every fifteen (15) day period thereafter the Company fails to file the Registration Statement.  The Company additionally agrees that if the Filing Date exceeds 30 days or the date the registration statement is declared effective (the "Effective Date") exceeds 90 days from the Filing Date ("Penalty Date" collectively the "Penalty Dates"), a penalty of two percent (2%) per month, of the Face Amount of the Debenture, shall accrue for each month the Filing Date and/or the Effective Date exceeds the Penalty Date, pro-rated for partial periods.  The Company agrees not to include any other registration to this statement without the Investor’s consent.

Article 21     Incentive Shares

     As an inducement for this investment the Company shall issue to the Holder or its designee Five Hundred Thousand (500,000) shares.

Page 10 of 12

     IN WITNESS WHEREOF, the Company has duly executed this Debenture as of the date first written above and duly authorized to sign on behalf of:

GENESIS BIOVENTURES, INC.

By: /s/ Douglas Lane

Name:  Douglas Lane

Title:  Chief Executive Officer

EFUND SMALL CAP FUND II, L.P.

BY ITS GENERAL PARTNER EFUND

CAPITAL MANAGEMENT, LLC.

By: /s/ Barrett Evans

Name:  Barrett Evans

Title:  A Managing Member

Page 11 of 12

Exhibit A

NOTICE OF CONVERSION

(To be executed by the Registered Owner in order to Convert Debenture)

TO:

Genesis BioVenures, Inc.

The undersigned hereby irrevocably elects, as of ________________, to convert $________________ of its convertible debenture (the "Debenture") into Common Stock of Genesis BioVentures, Inc., (the "Company") according to the conditions set forth in the Debenture issued by the Company.

Date of Conversion________________________________________________

Applicable Conversion Price________________________________________

Number of Debentures Issuable upon this Conversion_______________________

Name (Print) EFUND SMALL CAP FUND II, LP

Address 2111 E. Ocean Blvd., Suite 218, Long Beach, CA 90802

Phone 562-983-0660

Fax 310-861-1033

                    By: _______________________________________

                                   Barrett Evans

Page 12 of 12Exhibit 10.4

    
      
        EXHIBIT
          10.4

        Alliance
          Agreement with In Pipe Technology, LLC dated March 28,
          2007

        

         

        ALLIANCE
          AGREEMENT

         

        THIS
          ALLIANCE AGREEMENT (the “Agreement”) is entered into as of March 28, 2007,
          between In-Pipe Technology Company, L.L.C., an Illinois limited liability
          company (“In-Pipe”), and Exousia Advanced Materials, Inc., a Texas corporation
          (“Exousia”).

         

        BACKGROUND

         

        WHEREAS,
          In-Pipe owns certain technology used in the treatment of
          wastewater;

         

        WHEREAS,
          Exousia has the ability to market and sell products to original equipment
          manufacturers, distributors, and dealers in certain industries;

         

        WHEREAS,
          In-Pipe and Exousia have agreed to develop a dosing unit using In-Pipe’s
          proprietary technology, suitable for installation adjacent to, and for
          the
          dosing of microbes into, wastewater tanks used in recreational vehicles,
          private
          aircraft, private watercraft and trains (each such dosing unit, a “Unit,” and
          collectively, the “Units”);

         

        WHEREAS,
          In-Pipe and Exousia have also agreed that In-Pipe will arrange the design
          and
          manufacture of the Units and will sell the Units and microbes to be used
          in the
          Units, to Exousia, and that Exousia will market and sell the Units and
          microbes
          to original equipment manufacturers, distributors, and dealers; and

         

        WHEREAS,
          In-Pipe and Exousia are entering into this Agreement in order to set forth
          the
          terms and conditions pursuant to which they will jointly develop the Unit,
          In-Pipe will arrange the design and manufacture of the Units and sell Units
          and
          microbes to Exousia, and Exousia will market and sell such Units to original
          equipment manufacturers, distributors, and dealers;

         

        AGREEMENT

         

        NOW,
          THEREFORE, in consideration of the foregoing and of other good and valuable
          consideration, the receipt and sufficiency of which are hereby acknowledged,
          the
          parties hereby agree as follows:

         

        1. Recitals.
          The
          recitals set forth above are hereby incorporated into this Agreement by
          reference.

         

        2. Development
          of Unit.

         

        (a) In-Pipe
          and Exousia shall cooperate in designing and otherwise developing the Unit.
          Each
          party shall devote the personnel and other resources reasonably required
          of it
          in order to complete the design of the Unit by September 1, 2007. In-Pipe
          will
          own all Intellectual Property Rights (as defined below) embodied in or
          related
          to the Unit, whether developed by In-Pipe, Exousia, or jointly by the parties
          (the “Unit IP”). But Exousia will own any Intellectual Property Rights in items
          previously developed by Exousia that are described on Exhibit A hereto
          (“Exousia
          IP”). “Intellectual Property Rights,” as used in this Agreement, means rights
          throughout the world in any patent, patent continuation application,
          continuation-in-part application, divisional application, reexamination,
          reissue, reissued patent, copyright, moral right, trade name, trademark,
          service
          mark, trade dress, trade identity, logo, design, slogan, trade secret,
          Confidential Information, Internet domain name, URL, general intangible,
          computer software or application, tangible or intangible proprietary
          information, know-how, proprietary process, formula, algorithm, and any
          application or right throughout the world to apply for registration of
          any of
          the foregoing or any other intellectual property, whether registered or
          unregistered.

         

         

        (b) Exousia
          hereby assigns to In-Pipe all of its Intellectual Property Rights in, related
          to
          or infringed by the Units, other than Intellectual Property Rights in the
          Exousia IP. Exousia shall execute and deliver such instruments and documents
          and
          take such other acts as may be reasonably necessary to document the foregoing
          assignment. If In-Pipe is unable, after two weeks, to secure Exousia’s signature
          to apply for or to pursue any application for any patent, trademark, service
          mark, copyright or other registration of rights in the United States or
          elsewhere, then Exousia hereby designates and appoints In-Pipe as Exousia’s
          limited agent and attorney in fact, to act for and on Exousia’s behalf and stead
          with respect to securing those rights.

         

         

        (c) Exousia
          hereby grants In-Pipe a non-exclusive, worldwide, royalty-free copyright
          license
          to reproduce, prepare derivative works of, publicly display, publicly perform,
          distribute and sublicense the Exousia IP, if any, and derivative works
          of that
          Exousia IP used in products manufactured, sold or distributed by In-Pipe.
          Exousia hereby grants In-Pipe a non-exclusive, worldwide, royalty-free
          trade
          secret license to use, distribute, otherwise exploit and sublicense the
          Exousia
          IP used in products manufactured, sold or distributed by In-Pipe. Exousia
          hereby
          grants In-Pipe a non-exclusive, worldwide, royalty-free patent license
          under all
          patent claims licensable by Exousia to make, have-made, use, sell, offer
          to
          sell, import and otherwise transfer the Exousia IP, if any, used in products
          manufactured, sold or distributed by In-Pipe. This patent license shall
          apply to
          the combination of the Exousia IP with any In-Pipe products.  

         

         

        (d) Upon
          termination of this Agreement, if a license of any part of the Unit IP
          is
          desired by Exousia, In-Pipe and Exousia shall negotiate in good faith to
          provide
          a non-exclusive license of such rights from In-Pipe to Exousia for a mutually
          acceptable license fee or royalties and on other mutually acceptable terms
          and
          conditions.

         

        3. Production
          of Units; Sale of Units and Microbes to Exousia.
          

         

        (a) Following
          In-Pipe and Exousia’s agreement on the design of the Unit, In-Pipe shall cause
          production of Units and microbes to be used in the Units to be commenced,
          in
          quantities requested by Exousia in purchase orders submitted to In-Pipe
          by
          Exousia. All Units will be manufactured in accordance with In-Pipe’s quality
          standards for use of In-Pipe’s proprietary technology. The parties intend that
          In-Pipe’s inventory of Units and microbes will be minimal and the parties shall
          cooperate to develop “just in time” production capability and
          deliveries.

         

        (b) In-Pipe
          shall sell to Exousia and Exousia shall purchase such quantities of Units
          and
          microbes as are requested by Exousia in Exousia’s purchase orders. In-Pipe shall
          be responsible for arranging and paying for shipping of all Units and microbes
          from In-Pipe’s Wheaton, Illinois facility, or other distribution point, to
          Exousia or Exousia’s customer, as directed by Exousia. Exousia shall take title
          to Units and microbes ordered by it upon pickup by the shipper at In-Pipe’s
          point of distribution. The parties agree that the intent of this alliance
          is
          that each party will share equally in the gross margin dollars realized
          between
          In-Pipe’s full cost of production (including but not limited to insurance,
          taxes, tariffs, and other relevant costs) and the average price charged
          by
          Exousia to its OEM and wholesale customers. In-Pipe
          shall provide Exousia with information supporting In-Pipe’s determination of its
          cost of production, and Exousia shall provide In-Pipe with information
          supporting Exousia’s indication of the prices it charges its customers and its
          costs for shipping. Exousia’s purchase price for microbes shall be calculated in
          the same manner in order that the parties are able to share equally the
          gross
          margin dollars. In-Pipe shall invoice Exousia for Units and microbes sold
          to
          Exousia at the time that such Units and microbes are shipped to Exousia
          or
          Exousia’s customer, whichever is earlier. Exousia shall pay In-Pipe the amount
          of each such invoice within 30 days after the date of the invoice. The
          parties
          will meet annually during the last quarter of each calendar year to confirm
          supply terms for the subsequent year, including pricing and quantities.
          

         

        4. Marketing
          and Sale of Units by Exousia.
          Exousia
          shall use its commercially reasonable best efforts to market the Units
          and
          microbes, and maximize sales thereof, to original equipment manufacturers
          and
          distributors on a worldwide basis. Exousia shall market the Units only
          for
          installation in recreational vehicles, private aircraft, private watercraft
          and
          trains (the foregoing applications constitute the “Field of Exclusivity”).
          Exousia shall be free to determine the prices that its charges its customers
          for
          the Units and the microbes. Exousia shall develop an appropriate marketing
          strategy and program to maximize sales of the Units. In-Pipe’s name and logo
          shall appear in marketing. Prior to using In-Pipe’s name or logo in any
          marketing materials, Exousia shall submit the proposed use of the name
          or logo
          to In-Pipe and In-Pipe shall have approved such use. The parties intend
          that
          In-Pipe’s name and logo be used less prominently in marketing the Units than the
          brand of Exousia.

         

        5. Exclusivity;
          Exclusivity Fee.
          

         

        (a) During
          the term of this Agreement, except for the Unit or any other toilette solution
          or competing product sold to it by In-Pipe, Exousia shall not, and shall
          cause
          its controlled affiliates not to, market, solicit orders for, or sell,
          directly
          or indirectly, any toilette solution or any product which competes with
          the
          Unit. Exousia agrees not, and shall cause its controlled affiliates not
          to,
          market, solicit orders for, or sell, directly or indirectly, the Units
          outside
          of the Field of Exclusivity.

         

        (b) Subject
          to Exousia’s compliance with this Agreement, including this Section 5(b), during
          the term of this Agreement, including all renewal periods, In-Pipe shall
          not
          sell, directly or indirectly, Units in the Field of Exclusivity, to any
          party
          other than Exousia. The parties acknowledge that nothing in this Agreement
          shall
          prevent In-Pipe from selling the Units or other In-Pipe products to other
          parties outside the Field of Exclusivity. In consideration of In-Pipe’s
          agreement to sell Units for use in the Field of Exclusivity only to Exousia
          during the term of this Agreement, Exousia agrees to pay In-Pipe a
          non-refundable, irrevocable, initial exclusivity fee in the aggregate amount
          of
          $1,000,000.00 (the “ Initial Exclusivity Fee”). The Exclusivity Fee shall be
          divided into payments as prescribed in this section. Exousia shall pay
          the
          installment payments of the Initial Exclusivity Fee to In-Pipe by cashier’s or
          certified check or by wire transfer of immediately available funds to an
          account
          designated by In-Pipe. Installment payments of the Exclusivity Fee shall
          be made
          on the following dates: (i) $200,000 on the first day after Exousia receives
          available funds resulting from the issuance and sale of bonds by the City
          of
          Elkhart, IN for the benefit of Exousia (expected on or prior to May 1,
          2007),
          (ii) $100,000 on October 31, 2007, (iii) $100,000 on January 10, 2008,
          (iv)
          $300,000 on March 30, 2008, and (v) $300,000 on June 30, 2008. The first
          installment shall be reduced by the amount of the good faith deposit ($25,000)
          previously paid by Exousia to In-Pipe. Interest shall accrue at the rate
          of 12%
          per annum on any portion of any installment of the Exclusivity Fee that
          is not
          paid within thirty (30) days of the due date. Any installment paid prior
          to the
          specified due date will be discounted by 2% per month it is paid early,
          rounded
          to the nearest whole month. The parties acknowledge and agree that the
          initial
          term of Exclusivity and the Initial Exclusivity Fee paid to In-Pipe is
          full
          compensation for the initial efforts expended by In-Pipe through December
          31,
          2007 to complete the design, arrange the manufacturing of the Units, and
          meet
          the time requirements of Exousia. The second and third years of Exclusivity
          will
          be maintained in exchange for the gross margin realized by In-Pipe from
          Unit and
          Microbe sales to Exousia. Upon termination of this Agreement for any reason
          other than a material breach by In-Pipe, or by mutual agreement of the
          parties,
          all installments of the Exclusivity Fee that have not yet been paid shall
          become
          immediately due and payable. The above defined discount on early payments
          will
          apply to this accelerated termination payment.

         

        6. Warranty.
          In-Pipe
          shall warrant the Units to be free from material defects in materials and
          workmanship for a period of one (1) year following purchase by an end-user,
          pursuant to a form of warranty to be agreed upon by In-Pipe and Exousia.
          In-Pipe’s sole obligation pursuant to such warranty will be to repair or replace
          a Unit, at In-Pipe’s option. THIS
          LIMITED WARRANTY IS EXPRESSLY IN LIEU OF ANY OTHER WARRANTIES, EXPRESS
          OR
          IMPLIED. IN-PIPE DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY
          OR FITNESS FOR A PARTICULAR PURPOSE.

         

        7. Confidential
          Information.
          

         

        (a) “Confidential
          Information,”
as
          used herein, means any information concerning any confidential, proprietary
          or
          secret aspect of any business (i) of In-Pipe or its affiliates or (ii)
          of
          Exousia or its affiliates (each of the entities described in the preceding
          clauses (i) and (ii), a “Protected Party”), including, without limitation, the
          activities of the parties related to the transactions contemplated by this
          Agreement, financial statements and data, strategic business plans, proprietary
          contracts (whether oral or written), budgets, pricing policies, marketing
          plans
          or strategies, business acquisition plans in any form or media, trade secrets,
          know-how, software, developments, inventions, processes, technology or
          designs,
          including any of the foregoing relating to current or potential clients,
          research, operations, finances, current or proposed products or services,
          vendors, advertising or marketing.

         

        (b) The
          parties anticipate that, under this Agreement, it may be necessary for
          either
          party to make
          disclosures
          to the
          other. Subject
          to paragraph (c) below, neither
          party
          shall make any reproductions, disclosure or use of the
          other
          party’s
          Confidential Information, except as instructed in writing by the disclosing
          party.

         

        (c) The
          limitations on reproduction, disclosure or use of Confidential
          Information shall not apply to, and neither party shall be liable for,
          reproduction, disclosure or use of information
          with
          respect to which any of the following conditions exist:

         

        (i) if,
          prior
          to the receipt thereof under this Agreement, the
          information is in the public domain, the information
          has been
          developed independently by the party receiving it, or was lawfully known
          to the
          party receiving it, or has been lawfully received from other sources, including
          any customer, provided such other sources did not receive it due to a breach
          of
          this or any other agreement, or in an unlawful manner;

         

        (ii) if,
          subsequent to the receipt thereof under this Agreement,
          (A)
          the
          information
          is
          published by the party furnishing it or is disclosed by the party furnishing
          it
          to others without restrictions, or (B)
          the
          information
          has been
          lawfully obtained by the party receiving it from other sources, provided
          such
          other source did not receive it due to a breach of this or any other agreement,
          or in an unlawful manner;
          or

         

        (iii) if
          a
          party is compelled by a governmental authority to disclose a Protected
          Party’s
Confidential
          Information,
          but
          only if that party provides the applicable Protected Party with written
          notice
          of the information to be disclosed as far in advance of its disclosure
          as
          practicable, that party uses reasonable efforts to obtain assurances that
          the
          Protected Party’s Confidential Information will be accorded confidential
          treatment, and that party furnishes only that part of the Protected Party’s
          Confidential Information that is legally required.

         

        (d) Upon
          termination of this Agreement and upon a written request of the disclosing
          party, the receiving party shall return or destroy all documents
          and other media containing or pertaining to any
          Confidential Information of
          the
          disclosing party and
          shall
          certify in writing that the Confidential
          Information has been returned
          or destroyed.

         

        (e) Neither
          the execution and delivery of this Agreement, nor the furnishing of any
          Confidential
          Information by either party shall be construed as granting to the other
          party
          either expressly, by implication, estoppels, or otherwise, any license
          under any
          invention, patent, trademark or copyright now or hereafter owned or controlled
          by the furnishing party. 

         

        (f) The
          obligations set forth in this Section 7 shall survive any termination or
          expiration of this Agreement.

         

        8. Representations
          and Warranties.
          Each
          party represents and warrants to the other that:

         

        (a) it
          (i) is
          a corporation or limited liability company that is validly existing and
          in good
          standing in its jurisdiction of organization and (ii) has full power and
          authority to enter into and deliver this Agreement;

         

        (b) this
          Agreement has been duly and validly executed and delivered by it and represents
          its valid and binding obligations, enforceable against it in accordance
          with its
          terms; and

         

        (c) neither
          the execution and delivery of this Agreement by it nor the consummation
          by it of
          the transactions contemplated hereby will:

         

        (i) violate
          its corporate charter or by-laws, or in the case of a limited liability
          company,
          its articles of organization or operating agreement;

         

        (ii) violate,
          or be in conflict with, or constitute a default (or an event which, with
          or
          without due notice or lapse of time, or both, would constitute a default)
          under,
          or cause or permit the acceleration of the maturity of, any debt, obligation,
          contract, commitment or other agreement to which it is a party, except
          as would
          not reasonably be expected to have an adverse effect on its performance
          of this
          Agreement; or

         

        (iii) violate
          any statute or law or any judgment, decree, order, regulation or rule of
          any
          court or governmental authority by which it is bound, except as would not
          reasonably be expected to have an adverse effect on its performance of
          this
          Agreement.

         

        9. Status
          as Independent Contractors.
          The
          relationship of In-Pipe and Exousia under this Agreement shall be that
          of
          independent contractors. Nothing in this Agreement will be construed to
          create
          any
          partnership, association
          or joint
          venture between
          the parties or any fiduciary duties between them.

        

        10. Indemnification
          Generally.
          

        

        (a) In-Pipe
          shall indemnify, defend and hold Exousia and its employees, agents, officers,
          directors and representatives (the “Exousia Indemnified Parties”) harmless from
          and against all costs, liabilities and expenses, including without limitation,
          attorneys’ fees and legal costs, associated with or in any way related to the
          defense or settlement of any claim, suit, allegation or action (each, a
“Claim”)
          brought against or suffered by any of the Exousia Indemnified Parties related
          to: (i) any negligent acts or omissions by, or willful misconduct of, In-Pipe,
          its employees, agents and representatives, or (ii) any failure of In-Pipe
          to
          comply with all applicable local, state and federal laws, rules and regulations.
          

         

        (b) Exousia
          shall indemnify, defend and hold In-Pipe and its employees, agents, officers,
          directors and representatives (the “Exousia Indemnified Parties”) harmless from
          and against all costs, liabilities and expenses, including without limitation,
          attorneys’ fees and legal costs, associated with or in any way related to the
          defense or settlement of any Claim brought against or suffered by any of
          the
          Exousia Indemnified Parties related to: (i) any negligent acts or omissions
          by,
          or willful misconduct of, the Exousia, its employees, agents and
          representatives, (ii) any false or misleading advertisements and promotional
          materials created by Exousia that relate to the Units or microbes, (iii)
          the
          marketing, distribution or sale of the Units or microbes by Exousia or
          its
          agents, (iv) any failure of Exousia to comply with all applicable local,
          state
          and federal laws, rules and regulations; or (v) any modification of or
          addition
          to the Units performed or approved by Exousia. 

        

        (c) Any
          party
          entitled to indemnification pursuant to this Section 10 (an “Indemnified Party”)
          shall give the party obligated to indemnify it pursuant to this Section
          10 (the
“Indemnifying Party”) prompt written notice of any Claim that is subject to this
          Section 10. The Indemnifying Party will be relieved of its obligations
          under
          this Section 10 due to a delayed notice of the Claim only to the extent
          the
          defense of the Claim is prejudiced by any late notice. The Indemnified
          Party
          shall cooperate in the defense of any Claim at the Indemnifying Party’s sole
          expense; provided, however, that under no circumstances shall the Indemnifying
          Party pay for the time of any employee, officer or director of Indemnified
          Party
          in connection with their cooperation in such defense. The Indemnifying
          Party
          shall not settle any Claim without the prior written consent of the Indemnified
          Party, which shall not be unreasonably withheld, unless the Indemnified
          Party’s
          only obligation under the settlement is the payment of a cash amount that
          is
          fully paid by the Indemnifying Party. The Indemnifying Party shall defend
          the
          Indemnified Party with counsel reasonably acceptable to Indemnified Party.
          The
          Indemnified Party shall be entitled to participate in the defense and settlement
          of any Claim with independent counsel of its own choosing at its own expense.
          

        

        11. Indemnification
          for Intellectual Property Infringement.

        

        (a) In-Pipe
          agrees to defend, indemnify and hold harmless Exousia, from and against
          any
          final judgment by a court of competent jurisdiction arising out of a claim
          that
          the Units contain any misappropriated trade secret or infringe any U.S.
          patent
          issued as of the effective date of this Agreement, any trademark or any
          copyright. This indemnification obligation will not apply unless: (i) In-Pipe
          is
          notified promptly in writing of the claim or the threatened or actual suit;
          (ii)
          Exousia, at In-Pipe’s request and expense, gives In-Pipe reasonable non-monetary
          assistance; and (iii) In-Pipe is given control over all proceedings and
          negotiations, including settlement negotiations.

        

        (b) Following
          notice of a claim or a threatened or actual suit, In-Pipe may: (i) procure
          for
          Exousia the right to continue to use the Units; (ii) modify the Units so
          that
          they do not misappropriate or infringe; in which case, Exousia will immediately
          cease use of the alleged infringing or misappropriated Units; or (iii)
          substitute other product or materials of like features and capability in
          which
          case, Exousia will immediately cease use of the alleged infringing or
          misappropriated Units.

        

        (c) If,
          in
          In-Pipe’s sole discretion, none of the foregoing is commercially reasonable,
          In-Pipe may terminate this Agreement and direct Exousia to cease use of
          the
          Units. If In-Pipe terminates this Agreement pursuant to this Section 11,
          upon
          return of the Units by Exousia, In-Pipe will return the actual purchase
          price
          paid by Exousia for those Units under this Agreement, less twenty (20%)
          for each
          year that has passed since the Unit was sold to Exousia.

        

        (d) In-Pipe
          will not be liable for, and will not be required to indemnify Exousia for,
          any
          Loss which arises from: (i) combination or use of the Units with any materials
          or product not supplied by In-Pipe; (ii) continued use of the Units after
          Exousia receives notice of a claim of infringement, misappropriation or
          instructions to discontinue use of the Units; (iii) use of the Units in
          any
          manner other than as set forth in the Unit’s technical documentation; (iv)
          In-Pipe’s compliance with Exousia’s designs, specifications, plans or
          instructions; or (v) modification of the Units. Exousia shall indemnify
          In-Pipe
          for any claim arising under this Section 11(d).

        

        (e) This
          Section 11 constitutes the entire liability of In-Pipe, and Exousia’s sole and
          exclusive remedy, with respect to any third party claims of infringement
          or
          misappropriation of any intellectual property rights.

        

        12. Term;
          Termination.
          The
          initial term of this
          Agreement begins
          on
          the date
          hereof and ends
          on
December
          31, 2007. Beginning upon the expiration of such initial term and thereafter,
          the
          term of this Agreement will be continually extended for successive one
          (1) year
          terms, unless either In-Pipe or Exousia provides written notice of termination
          to the other no later than 120 days before the end of the term then in
          progress.
          In addition, either party hereto shall have the right to terminate this
          Agreement upon written notice to the other if the other (a) is in breach
          of any
          material term, condition, warranty or covenant of this Agreement and fails
          to
          cure that breach within sixty (60) days after receipt of written notice
          of such
          breach, (b) files a petition for bankruptcy, becomes insolvent, admits
          in
          writing to insolvency or inability to pay its debts or perform its obligations
          as they mature, or makes an assignment for the benefit of creditors, or
          (c) has
          a petition in bankruptcy filed against it and such petition is not dismissed
          within sixty (60) days of the filing date. 

        

        13. Effect
          of Termination.
          The
          rights and obligations of the parties under all of the Sections of this
          Agreement except Sections 3 and 4, shall survive the termination of this
          Agreement. Upon any termination of this Agreement, Exousia shall provide
          In-Pipe
          with a list of the names, addresses and telephone numbers of all of the
          customers that have ordered Units or microbes during the term of the Agreement.
          In addition, upon termination of the Agreement Exousia shall cease using
          the
          In-Pipe name and logo in any manner in its marketing. Upon any termination
          of
          this Agreement, if Exousia has not failed to pay any amounts due to In-Pipe
          or
          committed any other material breach of this Agreement that has not been
          cured,
          In-Pipe shall fulfill all orders for Units and microbes received from Exousia
          by
          In-Pipe prior to termination, in accordance with the terms of such orders.
          Exousia shall pay In-Pipe with respect to such orders in accordance with
          the
          normal payment terms for orders, as provided for in Section 3 hereof. If
          this
          Agreement is terminated and Exousia has failed to pay any amounts due to
          In-Pipe
          or has committed any other material breach of this Agreement that has not
          been
          cured, In-Pipe shall have the option of fulfilling outstanding orders for
          Units
          and microbes, in exchange for payment from Exousia in accordance with the
          normal
          payment terms for orders, or not fulfilling such orders. If In-Pipe exercises
          its option not to fulfill the orders, Exousia shall promptly reimburse
          In-Pipe
          for all of In-Pipe’s costs incurred to date in connection with such
          orders.

        

        14. Dispute
          Resolution.
          

         

        (a) Exclusive
          Procedures.
          Any
          dispute between the parties arising out of or relating to this Agreement
          or
          otherwise (whether such claim is based on contract, tort, statute or otherwise)
          (a “Dispute”) shall be resolved in accordance with the procedures specified in
          this Section 14, which shall be the sole and exclusive procedures for the
          resolution of any Dispute.

        

        (b) Negotiation
          Between Executives.
          The
          parties shall attempt in good faith to resolve any Dispute promptly by
          negotiation between executives who have authority to settle the controversy
          and
          who are at a higher level of management than the persons with direct
          responsibility for the administration of the Agreement. Any party may give
          the
          other written notice of any Dispute (a “Notice”) not resolved in the normal
          course of business. Within fifteen (15) days after delivery of a Notice,
          the
          receiving party shall submit to the other a written response (a “Response”). The
          Notice and Response shall include (a) a statement of that party’s position and a
          summary of arguments supporting that position, and (b) the name and title
          of the
          executive who will represent that party and of any other person who will
          accompany the executive. Within 30 days after delivery of the Response,
          the
          executives of both parties shall meet at a mutually acceptable time and
          place,
          and thereafter as often as they reasonably deem necessary, to attempt to
          resolve
          the Dispute. All negotiations pursuant to this subsection (b) shall be
          confidential and shall be treated as compromise and settlement negotiations
          for
          purposes of any subsequent proceedings under this Section 14.

        

        (c) Binding
          Arbitration.
          Any
          Dispute which has not been resolved by negotiation under subsection (b)
          above,
          shall be finally resolved by binding arbitration in accordance with the
          rules of
          the American Arbitration Association by a sole arbitrator. Judgment upon
          the
          award rendered by the arbitrator may be entered by any court having
          jurisdiction. The law of the State of Illinois (excluding its conflicts-of-law
          provisions) shall govern the substantive law of the arbitration, including
          the
          interpretation, validity and enforcement of the Agreement and all other
          claims
          included in the Dispute. The site of the arbitration shall be Chicago,
          Illinois.
          But In-Pipe may file for injunctive relief in any court of appropriate
          jurisdiction.

        

        15. Entire
          Agreement.
          This
          Agreement is intended to be the exclusive and final statement of the terms
          and
          understandings relative to the subject matter hereof, merging herein and
          superseding all negotiations and prior written or oral agreements between
          the
          parties as to the subject matter of this Agreement. There are no promises,
          representations or understandings made in connection with this Agreement
          or
          contemporaneous with the execution of this Agreement, except as set forth
          herein
          and therein.

        

        16. Mutually
          Drafted Agreement.
          Each
party
          has
          had
          the opportunity to have this Agreement reviewed by legal counsel and it
          is the
          product of arms-length negotiations and therefore it shall be interpreted
          as
          mutually drafted by the parties.
           

        

        17. Amendment.
          No
          modification or amendment of this Agreement
          shall be
          valid unless it is in writing and signed by both of the parties
          hereto.

        

        18. Assignment.
          This
          Agreement shall be binding upon and inure to the benefit of and be enforceable
          by the parties hereto and their successors and permitted assigns. No party
          hereto may assign this Agreement without the prior written consent of the
          other
          party.

        

        19. Counterparts.
          This
          Agreement may be executed in counterparts, each of which shall be deemed
          an
          original,
          and both of which
          together
          shall constitute one and the same instrument.
          

        

        20. Notices.
          Any
          notice or other communication required under this Agreement shall be in
          writing
          and delivered personally
          to the
          addressee, faxed to the addressee (and confirmation received), sent by
          express
          courier to the addressee, or mailed, certified or registered mail, postage
          prepaid, and shall be deemed given when so delivered personally, faxed
          to the
          addressee, or, if sent by express courier, two business days after the
          date so
          sent, or, if mailed, five business days after the date of mailing, to the
          applicable address as follows:

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        

        
          	
                  If
                    to In-Pipe:

                   

                  In-Pipe
                    Technology Company, L.L.C.

                  100
                    Bridge Street

                  Wheaton,
                    Illinois 60187 

                  Facsimile:
                    (630) 871-0303

                  Attn:
                    Chief
                    Executive Officer

                   

                  With
                    copy to:

                   

                  Wildman,
                    Harrold, Allen & Dixon LLP

                  225
                    West Wacker Drive, Suite 2800

                  Chicago,
                    Illinois 60606

                  Facsimile:
                    (312) 201-2555

                  Attn:
                    Adam S. Calisoff

                	
                  If
                    to Exousia:

                   

                  Exousia
                    Advanced Materials, Inc.

                  4251
                    Pine Creek Road

                  Elkhart,
                    Indiana 46516

                  Facsimile:
                    (574) 294 7446

                  Attn:
                    Chief Executive Officer

                   

                  With
                    copy to:

                   

                  ____________________

                  ____________________

                  ____________________

                  Facsimile:
                    ___________

                  Attn:
                    _______________

                

        

         

        21. Severability.
          Whenever possible, each provision of this Agreement shall be interpreted
          in such
          manner as to be effective and valid under applicable law, but if any provision
          of this Agreement is held to be prohibited by or invalid under applicable
          law,
          such provision shall be ineffective only to the extent of such prohibition
          or
          invalidity, without invalidating the remainder of this Agreement.

        

        22. Governing
          Law.
          The
          construction, validity and interpretation of this Agreement shall be governed
          by
          the internal law, and not the law of conflicts, of the State of
          Illinois.

         

         

        [Signature
          Page Follows]

        

         

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        

         

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

         

        

        In-Pipe
          Technology Company, L.L.C.

        

        

        By:
          //s
          Daniel R. Williamson, Jr.

        Daniel
          R.
          Williamson, Jr.,

        President
          and Chief Executive Officer

        

        

        

        Exousia
          Advanced Materials, Inc.

        

        

        By:
          //s
          J. Wayne Rodrigue

        J.
          Wayne
          Rodrigue

        Chief
          Executive Officer

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