ex10_1.htm


    
      

    

    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;

            


    

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    
      	
            	
              (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.

            


    

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    
      	
              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.

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    
      	
              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.

            


    

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    
      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.