Lithium Exploration Group, Inc.: Exhibit 10.4 - Filed by newsfilecorp.com





EXHIBIT A TO SECURED CONVERTIBLE PROMISSORY NOTE G

ENERAL SECURITY AGREEMENT 

THIS SECURITY AGREEMENT made as of the 22nd day of July, 2014.
AMONG: 

ALTA DISPOSAL LTD., 

(the "Guarantor") 

AND: 

JDF Capital Inc. 

(the "Secured Party") 

WHEREAS: 

(A)            As evidenced by a Secured Promissory Note dated for
reference July 21, 2014, (as the same may be amended, supplemented, extended,
renewed, restated, replaced or superseded from time to time, the “Promissory
Note”) between Lithium Exploration Group Inc. (the “Debtor”), as
borrower, and the Secured Party, as lender, the Debtor has obtained a loan in
the aggregate principal amount of US $708,000; 

(B)            As a material inducement to the Secured Party to purchase
the Promissory Note, the Guarantor has agreed to provide a security agreement
securing the loan documented by the Promissory Note. 

FOR VALUE RECEIVED, the Guarantor covenants, agrees, warrants,
represents, acknowledges, and confirms to and with the Secured Party and creates
and grants the mortgages, charges, transfers, assignments, and security
interests as follows: 

1.             Security Interest 

As security for the payment and performance of the Obligations
(as defined in paragraph 3), the Guarantor, subject to the exceptions set out in
paragraph 2, does: 

1.1           Grant to the Secured Party a security interest in, and
mortgages, charges, transfers and assigns absolutely, all of the Guarantor 's
present and after acquired personal property, and all personal property in which
the Guarantor has rights, of whatever nature or kind and wherever situate,
including, without limitations, all of the following now owned or in future
owned or acquired by or on behalf of the Guarantor; 




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	 	(a) 	
      all goods, including:

	 	 	 	 
	 		(i) 	
      all inventory of whatever kind and wherever situate,
      including, without limitation, goods acquired or held for sale or lease or
      furnished or to be furnished under contracts of rental or service, all raw
      materials, work in progress, finished goods, returned goods, repossessed
      goods and all packaging materials, supplies, and containers relating to or
      used or consumed in connection with any of the foregoing (collectively the
      "Inventory");

	 	 	 	 
	 		(ii) 	
      all equipment of whatever kind and wherever situate,
      including, without limitation, all machinery, tools, apparatus, plant,
      fixtures, furniture, furnishings, chattels, motor vehicles, vessels, and
      other tangible personal property of whatever nature or kind (collectively
      the "Equipment");

	 	 	 	 
	 	(b) 	
      all book accounts and book debts and generally all
      accounts, debts, dues, claims, choses in action, and demands of every
      nature and kind however arising or secured including letters of credit and
      advices of credit, which are now due, owing, or accruing, or growing due
      to, or owned by, or which may in future become due, owing, or accruing, or
      growing due to, or owned by the Guarantor (the "Accounts");

	 	 	 	 
	 	(c) 	
      all contractual rights, insurance, claims, licences,
      goodwill, patents, trademarks, trade names, copyrights, and other
      industrial or intellectual property of the Guarantor or in which the
      Guarantor has an interest, all other choses in action of the Guarantor of
      every kind which now are, or which may in future be, due or owing to or
      owned by the Guarantor, and all other intangible property of the Guarantor
      which is not Accounts, Chattel Paper, Instruments, Documents of Title,
      Securities, or Money;

	 	 	 	 
	 	(d) 	
      all Money;

	 	 	 	 
	 	(e) 	
      all property described in Schedule A to this Agreement,
      or in any schedule now or at any time in future annexed to this Agreement
      or agreed to form part of this Agreement;

	 	 	 	 
	 	(f) 	
      the undertaking of the Guarantor;

	 	 	 	 
	 	(g) 	
      all Chattel Paper, Documents of Title (whether negotiable
      or not), Instruments, Intangibles, and Securities now owned or in future
      owned or acquired by or on behalf of the Guarantor (including those
      returned to or repossessed by the Guarantor) and all other goods of the
      Guarantor that are not Equipment, Inventory, or Accounts;

	 	 	 	 
	 	(h) 	
      all deeds, documents, writings, papers, books of account,
      and other books and electronically recorded data relating too any of the
      foregoing or by which any of the foregoing is or may in future be
  secured, evidenced, acknowledged, or made payable; and







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	 	(i) 	
      all renewals, accretions and substitutions of any of the
      foregoing and all after acquired personal property and fixtures and crops
      in any form derived directly or indirectly from any dealing with the
      Collateral or Proceeds, including rights to insurance payments and any
      other payments representing indemnity or compensation for loss or damage
      to Collateral or Proceeds.



1.2           The security interests created or granted under section 1.1
of this Agreement are collectively called the "Security Interest", and all
property, assets, interests, and undertakings (including Proceeds) subject to
the Security Interest or otherwise charged or secured by this Agreement or
expressed to be charged, assigned or transferred, or secured by any instruments
supplemental to this Agreement or in implementation of this Agreement are
collectively called the "Collateral". 

2.             Exceptions and Definitions 

2.1           The Security Interest granted by this Agreement shall not
extend or apply to and the Collateral shall not extend to the last day of the
term of any lease or agreement to lease real property, but upon the enforcement
of the Security Interest the Guarantor shall stand possessed of such last day in
trust to assign and dispose thereof as the Secured Party shall direct. 

2.2           The Security Interests shall not render the Secured Party
liable to observe or perform any term or covenant or condition of any agreement,
document or instrument to which the Guarantor is a party or by which it is
bound. In addition, the Security Interests do not and shall not extend to, and
the Collateral shall not include, any agreement, right, franchise, licence or
permit (the “Contractual Rights”) to which the Guarantor is a party or of
which the Guarantor has the benefit, to the extent that the creation of the
Security Interests herein would constitute a breach of the terms of or permit
any person to terminate the Contractual Rights, but the Guarantor shall hold its
interest therein in trust for the Secured Party and shall assign such
Contractual Rights to the Secured Party forthwith upon obtaining the consent of
all other parties thereto. The Guarantor agrees that it shall, if required by
the Secured Party, use commercially reasonable efforts to obtain any consent
required to permit any Contractual Rights to be subject to the Security
Interests herein. 

2.3           All Consumer Goods are excepted from the Security Interest.

2.3           The terms "Chattel Paper", "Document of title",
"Equipment", "Consumer Goods", "Instrument", "Intangible", "Security",
"Proceeds", "Inventory", "Accessions", "Money", "financing statement",
"financing change statement" and "verification statement" shall, unless
otherwise defined in this Agreement or otherwise required by the context, be interpreted according to their
respective meanings as set out in the Province of Alberta Personal Property
Security Act, as amended. 




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2.4           Any reference in this Agreement to "Collateral" shall,
unless the context otherwise requires, be deemed a reference to "Collateral or
any part thereof". The Collateral shall not include consumer goods of the
Guarantor. 

2.5           The term "Proceeds", whenever used and interpreted as
above, shall by way of example include trade-ins, equipment, cash, bank
accounts, notes, chattel paper, goods, contract rights, accounts, and any other
personal property or obligation received when such collateral or proceeds are
sold, exchanged, collected, or otherwise disposed of. The term "licence" means
any licence or similar right at any time owned or held by the Guarantor
including without limitation a "licence" as defined in the Act, and the meaning
of the term "crops" whenever used in this Agreement includes but is not limited
to "crops" as defined in the Act. 

3.             Obligations Secured 

This Agreement and the Security Interest are in addition to and
not in substitution for any other security interest now or in future held by the
Secured Party from the Guarantor, or from any other person and shall be general
and continuing security for the payment of all indebtedness and liability of the
Guarantor to the Secured Party (including interest thereon), present or future,
absolute or contingent, joint or several, direct or indirect, matured or not,
extended or renewed, wherever and however incurred, and any ultimate balance
thereof, including all advances on current or running account and all future
advances and re-advances, and whether the same is from time to time reduced and
thereafter increased or entirely extinguished and thereafter incurred again, and
whether the Guarantor be bound alone or with another or others, and whether as
principal or surety, and for the performance and satisfaction of all obligations
of the Guarantor to the Secured Party, whether or not contained in this
Agreement or Promissory Note (all of which indebtedness, liability, and
obligations are collectively the "Obligations"). 

4.             Covenants of Guarantor 

	 		
      The Guarantor covenants and agrees with the Secured
      Party:

	 	 	 
	 	(a) 	
      not to change its name, its principal place of business,
      its chief executive office or the location of any of the Collateral
      without giving 15 days’ prior written notice thereof to the Secured
      Party;

	 	 	 
	 	(b) 	
      not to sell, exchange, transfer, assign, lease or
      otherwise dispose of or deal in any way with Collateral or release,
      surrender or abandon possession of Collateral or move or transfer
      Collateral, or enter into any agreement or undertaking to do any of the
      foregoing;







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	 	(c) 	
      not to create or permit to exist any encumbrance against
      any of the Collateral except the Security Interests created by this
      Agreement and other Permitted Encumbrances;

	 	 	 
	 	(d) 	
      to defend the title to the Collateral for the benefit of
      the Secured Party against all claims and demands;

	 	 	 
	 	(e) 	
      to promptly pay when due all taxes, assessments, rates,
      levies, payroll deductions, workers’ compensation assessments, and any
      other charges which could result in the creation of a statutory lien or
      deemed trust in respect of the Collateral;

	 	 	 
	 	(f) 	
      to do, make, execute and deliver such further and other
      assignments, transfers, deeds, security agreements and other documents as
      may be required by the Secured Party to establish in favour of the Secured
      Party and perfect the Security Interests intended to be created hereby and
      to accomplish the intention of this Agreement and, if requested by the
      Secured Party, to specifically assign to the Secured Party, the
      Guarantor’s rights and interests (but not the Guarantor’s obligations)
      under any contracts to which the Guarantor is a party;

	 	 	 
	 	(g) 	
      to pay all expenses, including reasonable solicitors’
      fees and disbursements, receivers’ fees and disbursements, and accounting
      fees and disbursements incurred by or on behalf of the Secured Party, its
      secured parties, or any Receiver, as hereinafter defined, in connection
      with inspecting the Collateral, investigating title to the Collateral, the
      preparation, perfection, preservation, and enforcement of this Agreement,
      including taking, recovering and keeping possession of the Collateral and
      all expenses incurred by or on behalf of the Secured Party or such Secured
      Party’s or any Receiver in dealing with other creditors of the Guarantor
      in connection with the establishment and confirmation of the priority of
      the Security Interests, all of which expenses shall be payable forthwith
      upon demand with interest at the rate specified in the Promissory Note and
      shall form part of the Obligations; and

	 	 	 
	 	(h) 	
      to observe and perform all of its obligations under or in
      connection with any other security agreement creating a security interest
      over the Collateral or any part thereof.



5.             Attachment 

	 		
      The Guarantor acknowledges and confirms that:

	 	 	 
	 	(a) 	
      there is no intention to delay the time of attachment of
      the Security Interest created by this Agreement, and the Security Interest
      shall attach at the earliest time permissible under the laws governing
      this Agreement;







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	 	(b) 	
      that value has been given; and

	 	 	 
	 	(c) 	
      that the Guarantor has (or in the case of any after
      acquired property, will have at the time of acquisition) rights in the
      Collateral.



6.             Use and Verification of Collateral 

The Guarantor may, until default, possess, operate, collect,
use and enjoy, and deal with the Collateral in the ordinary course of the
Guarantor 's business in any manner not inconsistent with the provisions of this
Agreement; provided always that the Secured Party shall have the right at any
time and from time to time to verify the existence and state of the Collateral
in any manner the Secured Party may consider appropriate. The Guarantor agrees
to furnish all assistance and information and to perform all such acts as the
Secured Party may reasonably request in connection therewith, and for such
purposes to grant to the Secured Party or its agents access to all places where
the Collateral may be located and to all premises occupied by the Guarantor.


7.             Income from and Interest on Collateral 

7.1           Until an Event of Default, the Guarantor reserves the right
to receive any money constituting income from or interest on Collateral and if
the Secured Party receives any money before the occurrence of an Event of
Default, the Secured Party shall either credit that money against the
Obligations or pay it promptly to the Guarantor. 

7.2           After the occurrence of an Event of Default, the Guarantor
shall not request or receive any money constituting income from or interest on
Collateral and if the Guarantor receives any such money in any event, the
Guarantor shall hold that money in trust for the Secured Party and shall pay it
promptly to the Secured Party. 

8.             Disposition of Monies 

Subject to any applicable requirements of the Act, all monies
collected or received by the Secured Party under or in exercise of any right it
possesses with respect to Collateral shall be applied on account of the
Obligations in such manner as the Secured Party deems best or, at the option of
the Secured Party, may be held unappropriated in a collateral account or
released to the Guarantor, all without prejudice to the liability of the
Guarantor or the rights of the Secured Party under this Agreement, and any
surplus shall be accounted for as required by law. 

9.             Performance of Obligations 

If the Guarantor fails to perform any of its obligations under
this Agreement, the Secured Party may, but shall not be obliged to, perform any
or all of those obligations without prejudice to any other rights and remedies
of the Secured Party under this Agreement. 




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10.           Default 

10.1         Unless waived by the Secured Party, it shall be an event
of default (an “Event of Default”) under this Agreement and the security
constituted by this Agreement shall become enforceable if: 

	 	(a) 	
      an Event of Default (as that term is defined in the
      Promissory Note) occurs under the Promissory Note;

	 	 	 
	 	(b) 	
      any term, covenant, or representation set out in this
      Agreement breached or if an Event of Default occurs under this Agreement;
      or

	 	 	 
	 	(c) 	
      any amount owed to the Secured Party is not paid when
      due; or

	 	 	 
	 	(d) 	
      the Guarantor declares itself to be insolvent, makes an
      assignment for the benefit of its creditors, is declared bankrupt,
      declares bankruptcy, makes a proposal, or otherwise takes advantage of
      provisions under the Bankruptcy and Insolvency Act, the Companies
      Creditors' Arrangement Act, or similar legislation in any jurisdiction, or
      fails to pay its debts generally as they become due; or

	 	 	 
	 	(e) 	
      a receiver or receiver-manager is
  appointed.



11.           Enforcement 

11.1         Upon the occurrence and during the continuance of an Event
of Default under this Agreement, the Obligations shall, at the option of the
Secured Party, be immediately due and payable and the Security Interests granted
hereby shall, at the option of the Secured Party, become immediately
enforceable. To enforce and realize on the security constituted by this
Agreement, the Secured Party may take any action permitted by law or in equity,
as it may deem expedient, and in particular, but without limiting the generality
of the foregoing, the Secured Party may do any of the following: 

	 	(a) 	
      appoint by instrument a receiver, receiver and manager,
      or receiver- manager (the person so appointed is called the "Receiver") of
      the Collateral, with or without bond as the Secured Party may determine,
      and from time to time in its absolute discretion remove such Receiver and
      appoint another in its stead;

	 	 	 
	 	(b) 	
      enter upon any premises of the Guarantor and take
      possession of the Collateral with power to exclude the Guarantor, its
      agents, and its servants from those premises, without becoming liable as a
      mortgagee in possession;

	 	 	 
	 	(c) 	
      preserve, protect, and maintain the Collateral and make
      such replacements and repairs and additions as the Secured Party may deem
      advisable;







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	 	(d) 	
      sell, lease, or otherwise dispose of all or any part of
      the Collateral, whether by public or private sale or lease or otherwise,
      in such manner, at such price as can be reasonable obtained, and on such
      terms as to credit and with such conditions of sale and stipulations as to
      title or conveyance or evidence of title or otherwise as the Secured Party
      may deem reasonable, provided that if any sale, lease or other disposition
      is on credit, the Guarantor shall not be entitled to be credited with the
      proceeds of any such sale, lease or other disposition until the monies
      therefor are actually received;

	 	 	 
	 	(i) 	
      exercise any of the powers set out in this Section 11.1,
      without the appointment of a Receiver;

	 	 	 
	 	(j) 	
      institute proceedings in any court of competent
      jurisdiction for the appointment of a Receiver or for the sale of the
      Collateral;

	 	 	 
	 	(k) 	
      file proofs of claim and other documents in order to have
      the claims of the Secured Party lodged in any bankruptcy, winding-up, or
      other judicial proceeding relating to each Guarantor;

	 	 	 
	 	(e) 	
      exercise all of the rights and remedies of a secured
      party under the Act.



11.2         Any Receiver appointed by the Secured Party may be any
person licensed as a trustee under the Bankruptcy and Insolvency Act
(Canada), and the Secured Party may remove any Receiver so appointed and appoint
another or others instead. Any Receiver appointed shall act as Secured Party for
the Guarantor for all purposes, including the occupation of any premises of the
Guarantor and in carrying on Guarantor’s business and the Secured Party shall
not be liable for any act or omission of any Receiver. Guarantor agrees to
ratify and confirm all actions of the Receiver and to release and indemnify the
Receiver and the Secured Party in respect of all such actions. Any Receiver so
appointed shall have the power: 

	 	(a) 	
      to enter upon, use, and occupy all premises owned or
      occupied by the Guarantor;

	 	 	 
	 	(b) 	
      to take possession of the Collateral;

	 	 	 
	 	(c) 	
      to carry on the business of the Guarantor;

	 	 	 
	 	(d) 	
      to borrow money required for the maintenance,
      preservation or protection of the Collateral or for the carrying on of the
      business of the Guarantor, and in the discretion of such Receiver, to
      charge and grant further security interests in the Collateral in priority
      to the Security Interests, as security for the money so
borrowed;

	 	 	 
	 	(e) 	
      to sell, lease, or otherwise dispose of the Collateral in
      whole or in part and for cash or credit, or part cash and part credit on
      such terms and conditions and in such manner as the Receiver shall
  determine in its discretion;







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	 	(f) 	
      to demand, commence, continue or defend any judicial or
      administrative proceedings for the purpose of protecting, seizing,
      collecting, realizing or obtaining possession or payment of the
      Collateral, and to give valid and effectual receipts and discharges
      therefor and to compromise or give time for the payment or performance of
      all or any part of the Accounts or any other obligation of any third party
      to the Guarantor; and

	 	 	 
	 	(g) 	
      to exercise any rights or remedies which could have been
      exercised by the Secured Party against the Guarantor or the
    Collateral.



11.3         Subject to the claims, if any, of the creditors of the
Guarantor ranking in priority to this Agreement, all amounts realized from the
disposition of Collateral under this Agreement shall be applied as the Secured
Party, in its absolute discretion, may direct.. 

Subject to applicable law and the claims, if any, of other
creditors of the Guarantor, any surplus shall be paid to the Guarantor. 

11.4         The Guarantor agrees that the Secured Party may exercise
its rights and remedies under this Agreement immediately upon default, except as
may be otherwise provided in the Act, and the Guarantor expressly confirms that,
except as may be otherwise provided in this Agreement or in the Act, the Secured
Party has not given any covenant, express or implied, and is under no obligation
to allow the Guarantor any period of time to remedy any Event of Default before
the Secured Party exercises its rights and remedies under this Agreement. 

11.5         The Guarantor hereby irrevocably constitutes and appoints
any officer for the time being of the Secured Party to be, upon the occurrence
and during the continuance of an Event of Default, the true and lawful attorney
of the Guarantor, with full power of substitution, to do, make and execute all
such statements, assignments, documents, acts, matters of things with the right
to use the name of the Guarantor whenever and wherever the officer may deem
necessary or expedient and from time to time to exercise all rights and powers
and to perform all acts of ownership in respect to the Collateral in accordance
with this Agreement. 

11.6         The Secured Party shall not be liable for any delay or
failure to enforce any remedies available to it or to institute any proceedings
for such purposes. The Secured Party may waive any Event of Default, provided
that no such waiver shall be binding upon the Secured Party unless in writing
nor shall it affect the rights of the Secured Party in connection with any other
or subsequent Event of Default. 

12.           Representations of Guarantor 

2.             The Guarantor represents and warrants that: 




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	 	(a) 	
      this Agreement is granted in accordance with resolutions
      of the directors (and of the shareholders as applicable) of the Guarantor,
      and all other matters and things have been done and performed so as to
      authorize and make the execution and delivery of this Agreement and the
      performance of the obligations of the Guarantor hereunder legal, valid and
      binding;

	 	 	 
	 	(b) 	
      it lawfully owns and possesses all presently held
      Collateral and has good title thereto, free from all security interests,
      charges, encumbrances, liens and claims, save only the permitted
      encumbrances set out in Schedule “B” attached hereto (the “Permitted
      Encumbrances”), and has good right and lawful authority to grant the
      Security Interests hereunder, free and clear of all encumbrances other
      than the Permitted Encumbrances; and

	 	 	 
	 	(c) 	
      the locations specified in the attached Schedule ”C” with
      respect to goods constituting the Collateral and of the business
      operations and records of the Guarantor are accurate and
  complete.



13.           Deficiency 

If the amounts realized from the disposition of the Collateral
are not sufficient to pay the Obligations in full, the Guarantor shall pay to
the Secured Party the amount of such deficiency immediately upon demand for the
same. 

14.           Rights Cumulative 

All rights and remedies of the Secured Party set out in this
Agreement are cumulative, and no right or remedy contained in this Agreement is
intended to be exclusive but each shall be in addition to every other right or
remedy contained in this Agreement or in any existing or future security
agreement or now or in future existing at law, in equity or by statute, or under
any other agreement between the Guarantor and the Secured Party that may be in
effect from time to time. 

15.           Liability of Secured Party 

The Secured Party shall not be responsible or liable for any
debts contracted by it, for damages to persons or property or for salaries or
non-fulfilment of contracts during any period when the Secured Party shall
manage the Collateral upon entry, as provided in this Agreement, nor shall the
Secured Party be liable to account as mortgagee in possession or for anything
except actual receipts or be liable for any loss on realization or for any
default or omission for which a mortgagee in possession may be liable. The
Secured Party shall not be bound to do, observe or perform or to see to the
observance or performance by the Guarantor of any obligations or covenants
imposed upon the Guarantor, nor shall the Secured Party, in the case of
Securities, Instruments, or Chattel Paper, be obliged to preserve rights against
other persons, nor shall the Secured Party be obliged to keep any of the
Collateral identifiable. The Guarantor waives any applicable provision of law
permitted to be waived by it which imposes higher or greater obligations upon the Secured Party
than as contained in this paragraph. 




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16.           Appropriation of Payments 

Any and all payments made in respect of the Obligations from
time to time and monies realized from any security interests held therefor
(including monies collected in accordance with or realized on any enforcement of
this Agreement) may be applied to such part or parts of the Obligations as the
Secured Party may see fit, and the Secured Party may at all times and from time
to time change any appropriation as the Secured Party may see fit. 

17.           Waiver 

The Secured Party may from time to time and at any time waive
in whole or in part any right, benefit or default under any paragraph of this
Agreement but any such waiver of any right, benefit, or default on any occasion
shall be deemed not to be a waiver of any such right, benefit, or default
thereafter, or of any other right, benefit or default, as the case may be, and
no delay or omission by the Secured Party in exercising any right or remedy
under this Agreement or with respect to any default shall operate as a waiver
thereof or of any other right or remedy. 

18.           Notice 

Any notice, demand, or other communication required or
permitted to be given under this Agreement shall be effectually made or given if
delivered by prepaid private courier or by facsimile transmission to the address
of each party set out below: 

	To the Guarantor: 	Alta Disposal Ltd. 
	  	200 N. Hayden Road, Suite 235, 
	  	Scottsdale, Arizona 858251 
	  	Facsimile No.: 480-641-4794 
	  	Attention: Alex Walsh 
	  	  
	  	  
	To the Secured Party: 	74 West George St 
	  	Freehold, New Jersey 07728 
	  	Tel: 718-289-4058 
	  	Fax: 800-319-6863 
	  	Attention: John Fierro 


or to such other address or facsimile number as either party
may designate in the manner set out above. Any notice, demand, or other
communication shall be deemed to have been given and received on the day of
prepaid private courier delivery or facsimile transmission. 




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19.           Extensions 

The Secured Party may grant extensions of time and other
indulgences, take and give up security, accept compositions, compound,
compromise, settle, grant releases and discharges, refrain from perfecting or
maintaining perfection of the Security Interest, and otherwise deal with the
Guarantor, account debtors of the Guarantor, sureties, and others and with the
Collateral, the Security Interest, and other security interests as the Secured
Party sees fit without prejudice to the liability of the Guarantor or the
Secured Party's right to hold and realize on the security constituted by this
Agreement. 

20.           No Merger 

This Agreement shall not operate to create any merger or
discharge of any of the Obligations, or of any assignment, transfer, guarantee,
lien, mortgage, contract, promissory note, bill of exchange, or security
interest of any form held or which may in future be held by the Secured Party
from the Guarantor or from any other person. The taking of a judgment with
respect to any of the Obligations shall not operate as a merger of any of the
covenants contained in this Agreement. 

21.           Satisfaction and Discharge 

Any partial payment or satisfaction of the Obligations, or any
ceasing by the Borrower to be indebted to the Secured Party, shall be deemed not
to be a redemption or discharge of this Agreement. The Guarantor shall be
entitled to a release and discharge of this Agreement upon full payment and
satisfaction of all Obligations and upon written request by the Guarantor and
payment to the Secured Party of all costs, charges, expenses, and legal fees and
disbursements (on a solicitor and own client basis) incurred by the Secured
Party in connection with the Obligations and such release and discharge. 

22.           Enurement 

This Agreement shall enure to the benefit of and be binding
upon the parties and their respective heirs, executors, personal
representatives, successors, and permitted assigns. 

23.           Interpretation 

23.1         In this Agreement 

	 	(a) 	
      "Act" means the Personal Property Security Act (Alberta)
      and all regulations thereunder as amended;

	 	 	 
	 	(d) 	
      The word “including”, when following any word or
      words is not to be construed as limiting the preceding word or words but
      the preceding word or words are to be construed as referring to all items
      or matters that could fall within the broadest possible interpretation of
the preceding word or words. 







- 13 - 

23.2         Words and expressions used in this Agreement that have
been defined in the Act shall be interpreted in accordance with their respective
meanings given in the Act, whether expressed in this Agreement with or without
initial capital letters and whether in the singular or the plural, unless
otherwise defined in this Agreement or unless the context otherwise requires,
and, wherever the context so requires, in this Agreement the singular shall be
read as if the plural were expressed, and vice-versa, and the provisions of this
Agreement shall be read with all grammatical changes necessary dependent upon
the person referred to being a male, female, firm, or corporation. 

23.3         Should any provision of this Agreement be declared or held
invalid or unenforceable in whole or in part or against or with respect to the
Guarantor by a court of competent jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of any or all
of the remaining provisions of this Agreement, which shall continue in full
force and effect and be construed as this Agreement had been executed without
the invalid or unenforceable provision. 

23.4         The headings of the paragraphs of this Agreement have been
inserted for reference only and do not define, limit, alter, or enlarge the
meaning of any provision of this Agreement. 

23.5         This Agreement shall be governed by the laws of the
Province of Alberta. 

24.           Miscellaneous 

24.1         The Guarantor authorizes the Secured Party to file such
financing statements, financing change statements, and other documents, and do
such acts, matters, and things as the Secured Party may deem appropriate, to
perfect on an ongoing basis and continue the Security Interest, to protect and
preserve the Collateral, and to realize upon the Security Interest. 

24.2         The Guarantor waives protest of any Instrument
constituting Collateral at any time held by the Secured Party on which the
Guarantor is any way liable and, subject to the provisions of the Act, notice of
any other action taken by the Secured Party. 

24.3         The Guarantor covenants that it shall not amalgamate with
any other company or entity without first obtaining the written consent of the
Secured Party. The Guarantor acknowledges and agrees that if it amalgamates with
any other company or companies, then it is the intention of the parties that the
term " Guarantor " when used in this Agreement shall apply to each of the
amalgamating companies and to the amalgamated company, so that the Security
Interest granted by this Agreement: 




- 14 - 

	 	(a) 	
      shall extend to the "Collateral" (as that term is defined
      in this Agreement) owned by each of the amalgamating companies and the
      amalgamated company at the time of amalgamation and to any "Collateral"
      owned or acquired by the amalgamated company thereafter, and

	 	 	 
	 	(b) 	
      shall secure the "Obligations" (as that term is defined
      in this Agreement) of each of the amalgamating companies and the
      amalgamated company to the Secured Party at the time of amalgamation and
      any "Obligations" of the amalgamated company to the Secured Party arising
      thereafter. The Security Interest shall attach to "Collateral" owned by
      each company amalgamating with the Guarantor, and by the amalgamated
      company, at the time of amalgamation, and shall attach to any "Collateral"
      thereafter owned or acquired by the amalgamated company when that
      Collateral becomes owned or is acquired.



24.4         The Guarantor authorizes the Secured Party to provide a
copy of this Agreement and such other information and documents specified under
the Act to any person entitled under the Act to demand and receive them. 

25.           Copy of Agreement and Financing Statement 

	 		
      The Guarantor:

	 	 	 
	 	(a) 	
      acknowledges receiving a copy of this Agreement,
    and

	 	 	 
	 	(b) 	
      waives all rights to receive from the Secured Party a
      copy of any financing statement, financing change statement, or
      verification statement filed, issued, or obtained at any time in respect
      of this Agreement.



[Balance of page intentionally left blank] 

 

IN WITNESS WHEREOF the Guarantor has executed this Agreement on
the date indicated above. 

ALTA DISPOSAL LTD., by its 
authorized signatory:





- 15 - 


	By: 	/s/ Alexander Walsh    
		
      Alexander Walsh 

	Its: 	Chief Executive Officer 
	  	  
	  	  
	  	  
	  	  
	JDF CAPITAL INC., by its 
	authorized signatory: 
	  	  
	  	  
	By: 	/s/ John Fierro    
	  	John Fierro 
	Its: 	President 







- 16 - 

Schedule “A” 

Description of Collateral 

Alta Disposal’s Morrinville Disposal Facility Equipment and
Lease: 

14-27-055-24- W4 Facility: 

1) Well - Disposal Well - completed to Approx 1145M c/w tested
packers, tubing, wellhead and enclosure building , catadyne heater& Guard
fence. 

2) Access road & well lease . 

3) Containment System c/w liner capable of > 1500m3 

4) 110 M3 (750 bbl) internally coated ,insulated tank c/w 250MM
BTU burner, Pollution Box for load line and sampling point.

5) Dual filter vessels, control valves, turbine metering
equipment in skid mounted building c/w catadyne heater. 

6) Buried 3 inch steel flowline from Filter building to
wellhead. 

7) Control and Monitor building and equipment c/w solar power. 

8) Connecting piping, enclosures and heaters. 

13-27-055- 24-W4 Facility: 

1) Well – suspended - Drilled and cased with basic wellhead and
guard fence. 

2) Undeveloped lease and access road 

16-27-055-24-W4 Facility 

1) Well -gas producer – suspended - wellhead; casing and tubing

2) Partially developed lease and access. 

3) 400 bbl Insulated tank with heater 

4) Skidded separator package 




- 17 - 

Schedule “B” 

Permitted Encumbrances 

“Permitted Encumbrances” means any of the following:


	 	a) 	
      liens for taxes, assessments or governmental charges or
      levies not at the time due and delinquent or the validity of which the
      Guarantor is contesting in good faith and in respect of which such
      Guarantor has set aside, on its books, reserves considered by the
      Guarantor and the Secured Party as adequate therefor;

	 	 	 
	 	b) 	
      undetermined or inchoate liens and charges incidental to
      current operations which have not been filed against the Guarantor or
      which relate to obligations not due or delinquent;

	 	 	 
	 	c) 	
      the right reserved to or vested in any governmental or
      public authority by any lease, licence, franchise, grant, permit or
      statutory provision to terminate any lease, licence, franchise, grant or
      permit, or to require annual or other period payments as a condition of
      the continuance thereof;

	 	 	 
	 	d) 	
      the encumbrance resulting from the deposit of cash or
      obligations as security when a Guarantor is required to do so by
      governmental or other public authority or by normal business practice in
      connection with contracts, licences or tenders or similar matters in the
      ordinary course of business and the purpose of carrying on the same or to
      secure workers’ compensation, surety or appeal bonds or to secure costs of
      litigation when required by law; and

	 	 	 
	 	e) 	
      security given to any public utility or any governmental
      or other public authority when required in connection with the operations
      of a Guarantor.







- 18 - 

Schedule “C” 

Location of Collateral

LOCATION OF GUARANTOR’S BUSINESS OPERATION 

The Guarantor’s:

Chief Executive Office:

3800 North Central Avenue, Suite 820

Phoenix, AZ 85012 

Operations Office: 

Suite 300, 840 6th Ave SW 
Calgary,
AB 
T2P2ES 

Other Location: Near Morinville,
Alberta 

LOCATIONS OF RECORDS RELATING TO COLLATERAL 

Operations Office: 

Suite 300, 840 6th Ave SW 
Calgary,
AB 
T2P2ES 

LOCATIONS OF COLLATERAL 

Operations Office: 

Suite 300, 840 6th Ave SW 
Calgary,
AB 
T2P2ES 

Other Location Near Morinville,
Alberta