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Exhibit 10.1
 
GENERAL SECURITY AGREEMENT

FROM:

Syntec Biofuel Inc., a Washington State Corporation with a registered office at
520 Pike Street, Seattle, Washington (referred to in this agreement as the
“Debtor”),

- in favour of –

Impulse Advertising Ltd., a British Columbia Corporation, c/o15th Floor, 1040
West Georgia Street, Vancouver, BC, Vancouver, BC (referred to in this agreement
as the "Secured Party").

WHEREAS the Secured Party has advanced funds to the Debtor for use by the Debtor
in its business:

AND WHEREAS the parties now wish to enter into this agreement for purposes of
securing the repayment to the Secured Party of such funds;

NOW THEREFORE, THE PARTIES AGREE AS FOLLOWS:

1.
Grant of Security Interest

To secure compliance with the obligations referred to in paragraph 2 of this
agreement, the Debtor hereby mortgages, charges and assigns to the Secured Party
and grants the Secured Party a security interest (the "Security Interest”) in
all of the Assets and the Intellectual Property, including patents applied for
and/or issued, relating to the method for producing catalysts and processes for
the manufacture of alcohol from syngas (collectively referred to in this
agreement as the “Collateral”), of the Debtor now or hereafter owned by the
Debtor as outlined in Schedule A.

2.
Obligations Secured

The obligations secured by this agreement are the repayment by the Debtor to the
Secured Party of all amounts agreed to by the Debtor pursuant to a promissory
note between the parties in the principal amount of $300,000 plus interest
together with all legal and other costs incurred by the Secured Party in the
collection thereof.

3.
Covenants

So long as this agreement remains in effect, the Debtor covenants and agrees:
(a)
To diligently maintain, use and operate the Collateral and to conduct the
Debtor’s affairs in a proper and efficient manner so as to preserve and protect
the Collateral and the earnings, income, rents and profits thereof;

(b)
Not to sell, exchange, transfer, assign, lease or otherwise dispose of the
Collateral or any interest therein other than in the ordinary course of the
Debtor’s business or with the prior written consent of the Secured Party;

(c)
To cause all of the Collateral which is of a character usually insured in
comparable circumstances to be properly insured with reputable insurers against
loss or damage by fire or other hazards, to maintain such insurance with loss
payable to the Secured Party and to deliver to the Secured Party evidence of
such insurance satisfactory to the Secured Party;

 
 

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(d)
To pay all rents, taxes, rates, levies, assessments and government fees or dues
lawfully levied, assessed or imposed in respect of the Collateral or any part
thereof as and when the same shall become due and payable and to exhibit to the
Secured Party, on demand, the receipts and vouchers establishing such payments;

(e)
To keep proper books of accounts in accordance with generally accepted
accounting principals, consistently applied, and to furnish to the Secured
Party, within 48 hours following the Secured Party’s request during normal
business hours, such financial information and statements relating to the
Collateral as the Secured Party may from time to time require;

 
(f)
To notify the Secured Party promptly of:

 
i.
Any change in the information contained in this agreement;

 
ii.
The details of any significant acquisition of, loss of or damage to the
Collateral;

 
iii.
Any significant default in the payment to the Debtor of accounts which are part
of the Collateral; and

 
iv.
All litigation before any court, administrative board or other tribunal
affecting the Debtor or the Collateral;

(g)
To furnish to the Secured Party such other information with respect to the
Collateral as the Secured Party may from time to time require;

(h)
Not to, without the prior written consent of the Secured Party, create any other
security interest, mortgage, hypothec, charge, lien or other encumbrance upon
the Collateral or any part thereof ranking or purporting to rank in priority to
or equally with the Security Interest; and

 
 
(i)
To defend the title to the Collateral against all persons and, upon demand by
the Secured Party, to furnish such further assurance of title and further
security for the obligations herein secured and to execute any written
instruments or do any other acts necessary to make effective the purposes and
provisions of this agreement.

4.
Events of Default

At the option of the Secured Party, the Security Interest shall become
enforceable if:
(a)
The Debtor fails to pay or perform any of the obligations referred to in
paragraph 2 of this agreement;

(b)
The Debtor fails to comply with any other commitments or provisions of this
agreement or other agreements between the parties referred to herein;

(c)
Any of the representations and warranties in this agreement were incorrect in
any material respect when made or deemed to have been made;

(d)
The Debtor ceases or threatens to cease to carry on its business, commits an act
of bankruptcy, becomes insolvent or makes an assignment or bulk sale of the
Debtor’s assets without the written consent of the Secured Party;

(e)
Any proceeding is taken with respect to a compromise or arrangement with the
Debtor’s creditors, having the Debtor wound up, having a receiver appointed over
any part of the Collateral or any encumbrancer taking possession of any part
thereof without the written consent of the Secured Party;

 
(f)
Any execution or other process of any court becomes enforceable against the
Debtor or any distress or analogous process is levied upon the Collateral or any
part thereof; or

(g)
The Secured Party in good faith believes that the prospect of payment or
performance of any of the obligations herein is impaired.

 
 

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5.
Remedies

(a)
Upon the Security Interest becoming enforceable, the Secured Party shall have
the right:

 
i.
To take immediate possession of the Collateral in any manner permitted by law
and to require the Debtor to assemble and deliver the Collateral or make the
Collateral available to the Secured Party at a reasonably convenient place
designated by the Secured Party;

 
ii.
To dispose of the Collateral in any manner permitted by law, with or without
judicial process;

 
iii.
To enforce any rights of the Debtor in respect of the Collateral, including the
right to demand, sue for and receive any book debts or accounts receivable, to
give effectual receipts and discharges therefore, to give time for payment
thereof with or without security, and to compromise any book debts or accounts
receivable which may seem bad or doubtful to the Secured Party; and

 
iv.
To take proceedings in any court of competent jurisdiction for the appointment
of a receiver (which term shall include a receiver and manager) of the
Collateral or any part thereof or by instrument in writing to appoint any person
to be a receiver of the Collateral or any part thereof and to remove any
receiver so appointed by the Secured Party and appoint another in his stead. Any
receiver appointed by instrument in writing shall have power (i) to take
possession of the Collateral or any part thereof, (ii) to carry on the business
of the Debtor, (iii) to borrow money required  for the maintenance, preservation
or protection of the Collateral or any part thereof or for the carrying on of
the business of the Debtor, and (iv) to sell, lease or otherwise dispose of the
whole or any part of the Collateral at public auction, by public tender or by
private sale, either for cash or upon credit, at such time and upon such terms
and conditions as the receiver may determine. Any such receiver shall be deemed
to be the agent of the Debtor, and the Secured Party shall not be responsible
for misconduct of or negligence by any such receiver.

(b)
The remedies of the Secured Party provided for in this agreement are in addition
to, not in substitution of, any rights or remedies provided by law

6.
Application of Proceeds

Any proceeds of any disposition of any of the Collateral may be applied by the
Secured Party to the payment of expenses incurred in connection with the
retaking, holding, repairing, processing, preparing for disposition and
disposing of the Collateral, and any balance of such proceeds shall be applied
by the Secured Party towards the payment of the obligations secured herein in
such order of application as the Secured Party may from time to time effect. If
the disposition of the Collateral fails to satisfy the obligations and the
expenses incurred by the Secured Party, the Debtor shall be liable to pay for
any deficiency on demand. Any excess proceeds from the sale of the assets shall
be paid to the Debtor.

 
 

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7.
Miscellaneous

 
(a)
Any failure by the Secured Party to exercise any right set out in this agreement
in any particular instance shall not constitute a waiver thereof in any other
instance.

 
(b)
If any provision in this agreement is determined to be invalid or unenforceable,
such provision shall be severed from the agreement, and the remaining portions
shall continue to be given full force and effect.

 
(c)
All rights of the Secured Party under this agreement shall be assignable.

 
(d)
The rights and obligations agreed to herein shall extend to the benefit of and
be binding on the parties hereto and their successors and permitted assigns.

 
(e)
If more than one party executes this agreement as Debtor, the obligations of
such parties shall be joint and several.

 
(f)
Any notice required or permitted to be given under this agreement may be given
in writing to a party at that party’s last known address by personal delivery,
mail, facsimile and/or other means of electronic communication. Notice by mail
shall be deemed received on the fifth Business Day following the date same was
deposited in the mail.

 
(g)
This agreement shall be governed by and construed in accordance with the laws in
force in the Province of British Columbia without prejudice to or limitation of
any other rights or remedies available under the laws of any jurisdiction where
property or assets of the Debtor may be found.

 
(h)
The Debtor acknowledges receiving an executed copy of this agreement.

June 20, 2008
 
/s/Janet Cheng
Date
 
Syntec Biofuel Inc.
   
Name: Janet Cheng
   
CFO.

 
 

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SCHEDULE A

ASSETS

1
Office:

-
oval 10’ boardroom table (cherry red) with 8 black leather chairs

-
1 - 4lines RCA tel, 4 – 2lines GE tel.

-
4’x6’ white board

-
3 metal filing cabinets with 5 drawers (beige), 1 metal filing cabinet with 4
drawer (beige)

-
5 office desks with drawers on both sides (beech)

-
6 office chairs with rollers

-
2 bookcases, 1 with 4 shelves (beech) and the other with 6 shelves (black)

-
1 Brother laser printer MFC 850, 2 desktop computers, 1 notebook.

-
1 paper shredder, 2 hole punchers, 1 coat rack, 4 staplers, & other office
supplies

-
1 small fridge, 1 microwave oven, 1 kettle & other kitchen utensils

2
Lab facility:

-
1 Shimadzu 14B Gas Chromatograph with Shimadzu C-R8A printer

-
1 Shimadzu GC/MS 2010 with computer

-
2 Lindberg tube furnaces

-
8 pressure regulators for gas cylinders

-
1 Superior Powerstat variable transformer

-
2  5850 Brooks mass flow regulators, 1 Brooks 2-channel controller l

-
4 Omega mass flow regulators, 1 Omega 4-channels controller

-
lab testing unit with control panel, 2 temperature controllers, 2 pressure
gauges, 2  condensers, 4 flow meters

-
1 Barnstead 1400 Furnace

-
1 Cimarec heater & stirrer

-
1 Shel Lab Model 1320 oven/dryer

-
1 Sartorius CP153 precision scale

-
1 Gast Mfg compressor

-
12 lab benches, 3 countertops, 4 metal chemical cabinets

-
1 fume hood, 2 gas cylinder racks

-
Various tools, range sets, pipe cutters, Swagelock pipes & fittings, lab wares,
supplies, chemicals,  container for waste chemicals, 2 fire extinguishers

-
1 complete pilot unit with steam reformer and alcohol synthesis reactor for
landfill gas as feed.

INTELLECTUAL PROPERTY

1.
PATENT

Refer to Patent  number 7,384,987 at the US Patent and Trademark Office
(www.uspto.gov)

2.
PATENT APPLICATION

The pending patent application includes all the intellectual technology that has
been developed at the Syntec Biofuel Research Inc.'s laboratory in Burnaby
relating to the design, development and process of catalytic conversion of
biomass into methanol, ethanol, propanol and butanol.
 
 

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