MEXORO GENERAL SECURITY AGREEMENT

SECURITY AGREEMENT (this “ Agreement ”), dated as of March 25, 2009, between MEXORO MINERALS LTD. (“ Borrower ”), a Colorado corporation, and each lender identified on the signature pages hereto (each, including its successors and assigns, a “Lender” and collectively the “Lenders”).  The Lender and Borrower are concurrently entering into a financing transaction pursuant to which Borrower will issue to Lender its Secured Convertible Debenture, dated as of even date herewith, (as amended, modified or supplemented from time to time in accordance with its terms, the (“ Debenture ”) pursuant to which the Lender will make a loan to the Borrower in the Principal Amount (as such term is defined in the Debenture) pursuant to, and subject to the terms and conditions thereof.

Execution and delivery of this Agreement is a condition precedent to the making of the Loan.

The obligation of the Lender to make the Loan is conditioned, among other things, on the execution and delivery by the Borrower of the Debenture and this Agreement to secure the Obligations (as such term is defined below), such Obligations to include, without limitation, the due and punctual payment and performance of (a) the principal of and interest and fees due under the Debenture, when and as due, whether at maturity, by acceleration, or otherwise, (b) all obligations of the Borrower at any time and from time to time under this Agreement and (c) all other obligations at any time and from time to time under the Debenture or this Agreement (the “Obligations”).

Accordingly, the Borrower and the Lender hereby agree as follows:

1.            Definitions of Terms .  All capitalized terms used herein, but not defined herein, shall have the meanings set forth in the Debenture.  As used herein, the following terms shall have the following meanings:

(a) “ Account ” shall mean all present and future rights of the Borrower to payment of a monetary obligation, whether or not earned by performance, which is not evidenced by chattel paper or an instrument, (i) for services rendered or to be rendered, or (ii) for a secondary obligation incurred or to be incurred.

(b)   “ Chattel Paper ”, “ Documents ” and “ Instruments ” shall have the meanings set forth in the Colorado Uniform Commercial Code.

(c)   “ Equipment ” shall mean all of the equipment of the Borrower, including, without limitation, all machinery, data processing and computer equipment (whether owned or licensed and including embedded software), vehicles, tools, furniture, fixtures, all attachments, accessions and property now or hereafter affixed thereto or used in connection therewith, and substitutions and replacements thereof, wherever located.  Without limitation to the generality of the foregoing, such term shall also include all “Equipment” as defined in the Uniform Commercial code.

(d)  General Intangibles ” shall mean all of any Borrower’s present and future general intangibles of every kind and description, including, without limitation, mineral concessions,  option properties, contract rights, payment intangibles, trade names and trademarks and the goodwill of the business symbolized thereby, deposit accounts, letters of credit, and federal, state and local tax refund claims of all kinds.

(e)    “ UCC ” shall mean the Uniform Commercial Code of the State of Colorado and or any other applicable law of any state or states which have jurisdiction with respect to all, or any portion of, the Collateral subject to this Agreement, or this Agreement, from time to time.  It is the intent of the parties that defined terms in the UCC should be construed in their broadest sense so that the term “Collateral” (as defined herein below) will be construed in its broadest sense.  Accordingly if there are, from time to time, changes to defined terms in the UCC that broaden the definitions, they are incorporated herein and if existing definitions in the UCC are broader than the amended definitions, the existing ones shall be controlling.

(f)   “ Proceeds ” shall mean any consideration received from the sale, lease, exchange or other disposition of any asset or property which constitutes Collateral, any other value received as a consequence of the possession of any Collateral and any payment received from any insurer or other person or entity as a result of the loss, nonconformity, or interference with the use of, defects or infringements of rights, or damage to any asset or property that constitutes Collateral.

(g)   “ Receivable ” shall mean all of the following property of the Borrower: (a) all Accounts; (b) all interest, fees, late charges, penalties, collection fees and other amounts due or to become due or otherwise payable in connection with any Account; (c) all payment intangibles; (d) letters of credit, indemnities, guarantees, security or other deposits and proceeds thereof issued and payable to the Borrower or otherwise in favor of or delivered to the Borrower in connection with any Account; or (e) all other accounts, contract rights, chattel paper, instruments, notes, general intangibles and other forms of obligations owing to the Borrower, whether from the rendition of services or otherwise associated with any Accounts, or general intangibles of the Borrower (including, without limitation, choses in action, causes of action, tax refunds, tax refund claims, any funds which may become payable to the Borrower in connection with the termination of any employee benefit plan and any other amounts payable to the Borrower from any employee benefit plan, rights and claims against insurance carriers, rights to indemnification, business interruption insurance and proceeds thereof, casualty or any similar types of insurance and any proceeds thereof and proceeds of insurance covering the lives of employees on which the Borrower is a beneficiary).

(h)   “ Records ”  shall mean all of the Borrower’s files, present and future books of account of every kind or nature, invoices, ledger cards, statements, correspondence, memoranda, and other data relating to the Collateral or any account debtor, together with the tapes, disks, diskettes and other data and software storage media and devices, file cabinets or containers in or on which the foregoing are stored (including any rights of the Borrower with respect to the foregoing maintained with or by any other person).

(i)   “Securities”   shall mean all common or preferred equities owned by the Borrower in any subsidiary company, affiliated company or any other entity wherever situated, whether in the United States of America or any other country including Mexico.

2.            Grant and Perfection of Security Interest . (a) As security for the payment or performance, as the case may be, of the Obligations, the Borrower hereby creates and grants to the Lender, its successors and its assigns, a continuing security interest in, lien upon, and right of setoff against, and hereby assigns to the Lender, all personal property and fixtures and interests of the Borrower, whether now owned or hereafter acquired or existing and wherever located (together with all other collateral security for the Obligations at any time granted to or held or acquired by the Lender), collectively the “ Collateral ”, including, without limitation, all of the Borrower’s right, title and interest in the following:

(i)           all Receivables;

(ii)          all General Intangibles;

(iii)         all goods, including, without limitation, Equipment;

(iv)         Chattel Paper, including, without limitation, all tangible and electronic chattel paper;

(v)          all Instruments, including, without limitation, all promissory notes;

(vi)         all Documents;

(vii)        all deposit accounts;

(viii)       all letters of credit, banker’s acceptances and similar instruments and including all letter-of-credit rights;

(ix)          all supporting obligations and all present and future liens, security interests, rights, remedies, title and interest in, to and in respect of any Collateral, including (A) rights and remedies under or relating to guaranties, contracts of suretyship, letters of credit and credit and other insurance related to the Collateral, and (B) deposits by and property of account debtors or other persons securing the obligations of account debtors;

(x)           all (A) investment property (including but not limited to the securities of any subsidiary now organized or hereinafter organized of the Borrower,  whether certificated or uncertificated, securities accounts, security entitlements, commodity contracts or commodity accounts) and (B) monies, credit balances, deposits and other property of the Borrower now or hereafter held or received from or for the account of the Borrower, whether for safekeeping, pledge, custody, transmission, collection or otherwise;

(xi)          all commercial tort claims;

(xii)         all Records; and

(xiii)        all products and Proceeds of the foregoing, in any form, including insurance proceeds and all claims against third parties for loss or damage to or destruction of or other involuntary conversion of any kind or nature of any or all of the other Collateral.

Attached hereto and marked Schedule 1 is a list of the Collateral in existence as of the date hereof.

(b)   The Borrower irrevocably and unconditionally authorizes the Lender (or its agent) to file at any time and from time to time such financing statements with respect to the Collateral naming the Lender as the secured party and the Borrower as debtor, as the Lender may require, and including any other information with respect to the Borrower or otherwise required by Article 9 of the Uniform Commercial Code of such jurisdiction as the Lender may determine in good faith, together with any amendment and continuations with respect thereto, which authorization shall apply to all financing statements filed on, prior to or after the date hereof.  The Lender hereby ratifies and approves all financing statements naming the Lender as secured party and the Borrower as debtor with respect to the Collateral (and any amendments with respect to such financing statements) filed by or on behalf of the Lender prior to the date hereof and ratifies and confirms the authorization of the Lender to file such financing statements (and amendments, if any).  The Borrower hereby authorizes the Lender to adopt on behalf of the Borrower any symbol required for authenticating any electronic filing.  In the event that the description of the collateral in any financing statement naming the Lender as the secured party and the Borrower as debtor includes assets and properties of the Borrower that do not at any time constitute Collateral, whether hereunder, under any of the other Financing Agreements or otherwise, the filing of such financing statement shall nonetheless be deemed authorized by the Borrower to the extent of the Collateral included in such description and it shall not render the financing statement ineffective as to any of the Collateral or otherwise affect the financing statement as it applies to any of the Collateral, provided , that, in such event, upon the Borrower’s written request and at the Borrower’s expense, the Lender shall file such amendments to its financing statements to change the assets described therein so as to constitute the Collateral.  In no event shall the Borrower at any time file, or permit or cause to be filed, any correction statement or termination statement with respect to any financing statement (or amendment or continuation with respect thereto) naming the Lender as secured party and the Borrower as debtor so long as this Agreement has not been terminated or all of the Obligations have not been paid and satisfied in full in immediately available funds.

(c)   In the event that any goods, documents of title are at any time after the date hereof in the custody, control or possession of another person, the Borrower shall promptly notify the Lender thereof in writing.  Promptly upon the Lender’s request, the Borrower shall promptly obtain an acknowledgment from such other person, in form and substance satisfactory to the Lender, that such other person, inter alia , acknowledges the security interest of the Lender in such collateral, agrees to waive any and all claims such other person may, at any time, have against such collateral, and agrees to permit the Lender access to, and the right to remain on, the premises of such other person so as to exercise the Lender’s rights and remedies and otherwise deal with such collateral and in the case of any person who at any time has custody, control or possession of any Collateral, holds such collateral for the benefit of the Lender and shall agrees to act upon the instructions of the Lender, without the further consent of the Borrower.

(d)   The Borrower agrees at all times to keep in all material respects accurate and complete accounting records with respect to the Collateral, including, but not limited to, a record of all payments and Proceeds received.

3.            Further Assurances .  The Borrower agrees to take any other actions reasonably requested by the Lender to insure the attachment, perfection of, and the ability of the Lender to enforce, the security interest of the Lender in any and all of the Collateral, including, without limitation, (i) executing, delivering and, where appropriate, filing financing statements and amendments relating thereto under the UCC or other applicable law, including Mexico to the extent, if any, that the Borrower’s signature thereon is required therefor, (ii) causing the Lender’s name to be noted as secured party on any certificate of title for a titled good if such notation is a condition to attachment, perfection or priority of, or ability of the Lender to enforce, the security interest of the Lender in such Collateral, (iii) complying with any provision of any statute, regulation or treaty of the United States as to any Collateral if compliance with such provision is a condition to attachment, perfection or priority of, or ability of the Lender to enforce, the security interest of the Lender in such Collateral, (iv) obtaining the consents and approvals of any governmental and other third party consents and approvals, including, without limitation, any consent of any other person obligated on Collateral, (v) paying any fees and taxes required in connection with the execution and delivery of this Agreement or the granting of the security interest of the Borrower, and (vi) taking all actions required by any earlier versions of the UCC or by other law, as applicable in any relevant jurisdiction.

4.            Inspection and Verification .  The Lender and such persons as the Lender may designate shall have the right, at any reasonable time or times, and upon reasonable notice (which may be telephonic), to inspect the Collateral owned by the Borrower, all records related thereto (and to make extracts and copies from such records), and the premises upon which any such Collateral is located, to discuss the Borrower’s affairs with the officers of the Borrower and its independent accounta