American Bonanza Gold Corp.: Exhibit 4.8 - Filed by newsfilecorp.com






GENERAL SECURITY AGREEMENT 

	1. 	
      SECURITY INTEREST



(a)               For
value received, American Bonanza Gold Corp. (the "Debtor"), hereby grants to
Resource Income Fund, L.P. ("RIF"), a security interest (the "Security
Interest") in the undertaking of Debtor and in all of Debtor's present and after
acquired personal property except for the Mining Lease (as defined in the
Secured Promissory Note and Guaranty of Debtor to RIF of February 14, 2012,
herewith the “Note”), otherwise without exceptions in all Goods (including all
parts, accessories, attachments, special tools, additions and accessions
thereto), Chattel Paper, Documents of Title (whether negotiable or not),
Instruments, Intangibles, Money and Securities and all other Investment Property
now owned or hereafter owned or acquired by or on behalf of Debtor (including
such as may be returned to or repossessed by Debtor) and in all proceeds and
renewals thereof, accretions thereto and substitutions therefore (hereinafter
collectively called "Collateral"), including, to the extent same do not comprise
the Mining Lease, all of the following now owned or hereafter owned or acquired
by or on behalf of Debtor: 

	 	(i) 	
      all inventory of whatever kind and wherever
    situate;

	 	 	 
	 	(ii) 	
      all equipment (other than Inventory) of whatever kind and
      wherever situate, including, without limitation, all machinery, tools,
      apparatus, plant, furniture, fixtures and vehicles of whatsoever nature or
      kind;

	 	 	 
	 	(iii) 	
      all Accounts and book debts and generally all debts,
      dues, claims, choses in action and demands of every nature and kind
      howsoever 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 hereafter become due, owing or accruing or growing due to or
      owned by Debtor ("Debts");

	 	 	 
	 	(iv) 	
      all lists, records and files relating to Debtor's
      customers, clients and patents;

	 	 	 
	 	(v) 	
      all deeds, documents, writings, papers, books of account
      and other books relating to or being records of Debts, Chattel Paper or
      Documents of Title or by which such are or may hereafter be secured,
      evidenced, acknowledged or made payable;

	 	 	 
	 	(vi) 	
      all contractual rights and insurance claims;
and

	 	 	 
	 	(vii) 	
      all patents, industrial designs, trade-marks, trade
      secrets and know- how including without limitation environmental
      technology and biotechnology, confidential information, trade-names,
      goodwill, copyrights, personality rights, plant breeders' rights,
      integrated circuit topographies, software and all other forms of
      intellectual and industrial property, and any registrations and
      applications for registration of any of the foregoing (collectively
      "Intellectual Property"); and








	 	(viii) 	
      any and all future material contracts including any
      mining exploration or development contract, refining contracts and all
      proceeds related thereto refining and milling contracts, and any renewals
      and amendments thereof.

	 	 	 
		(ix) 	
      The entire interest of Debtor in Bonanza Explorations
      Inc, a Nevada Corporation, all additional interests in Bonanza
      Explorations Inc. or any successor from time to time acquired by Debtor,
      and all warrants, options or other rights, whether now owned or hereafter
      acquired, of Debtor entitling the holder thereof to purchase or acquire
      any such interests, including (i) Debtor’s capital account, its interest
      as a shareholder, as applicable, in the net cash flow, net profit and net
      loss, any items of income, gain, loss, deduction and credit of Bonanza
      Explorations Inc., Debtor’s interest in all distributions made or to be
      made by Bonanza Explorations Inc. to Debtor and all of the other economic
      rights, titles and interests of Debtor as a shareholder whether set forth
      in the articles of incorporation or bylaws, as applicable, of Bonanza
      Explorations Inc., by separate agreement or otherwise, (ii) Debtor’s
      voting and other control rights as a shareholder of Bonanza Explorations,
      and (iii) all certificates, agreements (including operating agreements),
      books, records, writings, data bases, information and other property
      relating to, used or useful in connection with, evidencing, embodying,
      incorporating or referring to, any of the
foregoing.



(b)               The
Security Interest granted hereby shall not extend or apply to and Collateral
shall not include the last day of the term of any lease or agreement therefor
but upon the enforcement of the Security Interest, Debtor shall stand possessed
of such last day in trust to assign the same to any person acquiring such term.


(c)               The
terms "Goods", "Chattel Paper", "Document of Title", "Instrument", "Intangible",
"Security", "Investment Property", "proceed", "Inventory", "accession", "Money",
"Account", "financing statement" and "financing change statement" whenever used
herein shall be interpreted pursuant to their respective meanings when used in
The Personal Property Security Act (British Columbia), as amended from time to
time, which Act, including amendments thereto and any Act substituted therefor
and amendments thereto is herein referred to as the "P.P.S.A.". Provided always
that the term "Goods" when used herein shall not include "consumer goods" of
Debtor as that term is defined in the P.P.S.A., the term "Inventory" when used
herein shall include livestock and the young thereof after conception and crops
that become such within one year of execution of this Security Agreement. Any
reference herein to "Collateral" shall, unless the context otherwise requires,
be deemed a reference to "Collateral or any part thereof". 

Page 2 of 15 





	2. 	
      INDEBTEDNESS SECURED



The
Security Interest granted hereby secures payment and performance of any and all
obligations, indebtedness and liability of Debtor to RIF (including interest
thereon) present or future, direct or indirect, absolute or contingent, matured
or not, extended or renewed, wheresoever and howsoever incurred and any ultimate
unpaid balance thereof and whether the same is from time to time reduced and
thereafter increased or entirely extinguished and thereafter incurred again and
whether Debtor be bound alone or with another or others and whether as principal
or surety (hereinafter collectively called the "Indebtedness"). If the Security
Interest in the Collateral is not sufficient, in the event of default, to
satisfy all Indebtedness of the Debtor, the Debtor acknowledges and agrees that
Debtor shall continue to be liable for any Indebtedness remaining outstanding
and RIF shall be entitled to pursue full payment thereof. 

	3. 	
      REPRESENTATIONS AND WARRANTIES OF
  DEBTOR



Debtor
represents and warrants and so long as this Security Agreement remains in effect
shall be deemed to continuously represent and warrant that: 

	 	(a) 	
      the Collateral is genuine and owned by Debtor free of all
      security interests, mortgages, liens, claims, charges, licenses, leases,
      infringements by third parties, encumbrances or other adverse claims or
      interests (hereinafter collectively called "Encumbrances"), save for the
      Security Interest and those Encumbrances shown on Schedule "A" or
      hereafter approved in writing by RIF, prior to their creation or
      assumption;

	 	 	 
	 	(b) 	
      all Intellectual Property applications and registrations
      are valid and in good standing and Debtor is the owner of the applications
      and registrations;

	 	 	 
	 	(c) 	
      each Debt, Chattel Paper and Instrument constituting
      Collateral is enforceable in accordance with its terms against the party
      obligated to pay the same (the "Account Debtor"), and the amount
      represented by Debtor to RIF from time to time as owing by each Account
      Debtor or by all Account Debtors will be the correct amount actually and
      unconditionally owing by such Account Debtor or Account Debtors, except
      for normal cash discounts where applicable, and no Account Debtor will
      have any defence, set off, claim or counterclaim against Debtor which can
      be asserted against RIF, whether in any proceeding to enforce Collateral
      or otherwise;

	 	 	 
	 	(d) 	
      the locations specified in Schedule "B" as to business
      operations and records are accurate and complete and with respect to Goods
      (including Inventory) constituting Collateral, the locations specified in
      Schedule "B" are accurate and complete save for Goods in transit to such
      locations and Inventory on lease or consignment; and all fixtures or Goods
      about to become fixtures and all crops and all oil, gas or other minerals
      to be extracted and all timber to be cut which forms part of the
      Collateral will be situate at one of such locations; and

	 	 	 
	 	(e) 	
      the execution, delivery and performance of the
      obligations under this Security Agreement and the creation of any security
      interest in or assignment hereunder of Debtor's rights in the Collateral to
RIF will not result in a breach of any agreement to which Debtor is a party.



Page 3 of 15 






	4. 	
      COVENANTS OF THE DEBTOR



So long
as this Security Agreement remains in effect Debtor covenants and agrees: 

(a)               to
defend the Collateral against the claims and demands of all other parties
claiming the same or an interest therein; to diligently initiate and prosecute
legal action against all infringers of Debtor's rights in Intellectual Property;
to take all reasonable action to keep the Collateral free from all Encumbrances,
except for the Security Interest, licenses which are compulsory under federal or
provincial legislation and those shown on Schedule "A" or hereafter approved in
writing by RIF, prior to their creation or assumption, and not to sell,
exchange, transfer, assign, lease, license or otherwise dispose of Collateral or
any interest therein without the prior written consent of RIF; provided always
that, until default, Debtor may, in the ordinary course of Debtor's business,
sell or lease Inventory and, subject to Clause 7 hereof, use Money available to
Debtor;

(b)               to
notify RIF promptly of: 

	 	(i) 	
      any change in the information contained herein or in the
      Schedules hereto relating to Debtor, Debtor's business or
    Collateral,

	 	 	 
	 	(ii) 	
      the details of any significant acquisition of
      Collateral,

	 	 	 
	 	(iii) 	
      the details of any claims or litigation affecting Debtor
      or Collateral,

	 	 	 
	 	(iv) 	
      any loss or damage to Collateral,

	 	 	 
	 	(v) 	
      any default by any Account Debtor in payment or other
      performance of its obligations with respect to Collateral, and

	 	 	 
	 	(vi) 	
      the return to or repossession by Debtor of
    Collateral;



(c)               to
keep Collateral in good order, condition and repair and not to use Collateral in
violation of the provisions of this Security Agreement or any other agreement
relating to Collateral or any policy insuring Collateral or any applicable
statute, law, by-law, rule, regulation or ordinance; to keep all agreements,
registrations and applications relating to Intellectual Property and
intellectual property used by Debtor in its business in good standing and to
renew all agreements and registrations as may be necessary or desirable to
protect Intellectual Property, unless otherwise agreed in writing by RIF; to
apply to register all existing and future copyrights, trade-marks, patents,
integrated circuit topographies and industrial designs whenever it is
commercially reasonable to do so; 

(d)               to
do, execute, acknowledge and deliver such financing statements, financing change
statements and further assignments, transfers, documents, acts, matters and
things (including further schedules hereto) as may be reasonably requested by RIF of or with respect to Collateral in order to give effect to these presents and to pay
all costs for searches and filings in connection therewith; 

Page 4 of 15 




(e)               to
pay all taxes, rates, levies, assessments and other charges of every nature
which may be lawfully levied, assessed or imposed against or in respect of
Debtor or Collateral as and when the same become due and payable;

(f)               to
insure collateral in such amounts and against such risks as would customarily be
insured by a prudent owner of similar Collateral and in such additional amounts
and against such additional risks as RIF may from time to time direct, with loss
payable to RIF and Debtor, as insureds, as their respective interests may
appear, and to pay all premiums therefor and deliver copies of policies and
evidence of renewal to RIF on request; 

(g)               to
prevent Collateral, save Inventory sold or leased as permitted hereby, from
being or becoming an accession to other property not covered by this Security
Agreement; 

(h)               to
carry on and conduct the business of Debtor in a proper and efficient manner and
so as to protect and preserve Collateral and to keep, in accordance with
generally accepted accounting principles, consistently applied, proper books of
account for Debtor's business as well as accurate and complete records
concerning Collateral, and mark any and all such records and Collateral at RIF's
request so as to indicate the Security Interest; 

(i)               to
deliver to RIF from time to time promptly upon request:

	 	(i) 	
      any Documents of Title, Instruments, Securities and
      Chattel Paper constituting, representing or relating to
  Collateral,

	 	 	 
	 	(ii) 	
      all books of account and all records, ledgers, reports,
      correspondence, schedules, documents, statements, lists and other writings
      relating to Collateral for the purpose of inspecting, auditing or copying
      the same,

	 	 	 
	 	(iii) 	
      all financial statements prepared by or for Debtor
      regarding Debtor's business,

	 	 	 
	 	(iv) 	
      all policies and certificates of insurance relating to
      Collateral, and

	 	 	 
	 	(v) 	
      such information concerning Collateral, the Debtor and
      Debtor's business and affairs as RIF may reasonably
  request.




	5. 	
      USE AND VERIFICATION OF
  COLLATERAL



Subject
to compliance with Debtor's covenants contained herein and Clause 7 hereof,
Debtor may, until the expiry of any cure period for a default, possess, operate,
collect, use and enjoy and deal with Collateral in the ordinary course of
Debtor's business in any manner not inconsistent with the provisions hereof;
provided always that RIF shall have the right at any time and from time to time
to verify the existence and state of the Collateral in any manner RIF may
consider appropriate and Debtor agrees to furnish all assistance and information
and to perform all such acts as RIF may reasonably request in connection
therewith and for such purpose to grant to RIF or its agents access to all places where
Collateral may be located and to all premises occupied by Debtor. 

Page 5 of 15 






	6. 	
      SECURITIES, INVESTMENT
PROPERTY



If
Collateral at any time includes Securities, Debtor authorizes RIF, following a
default, to transfer the same or any part thereof into its own name or that of
its nominee(s) so that RIF or its nominee(s) may appear of record as the sole
owner thereof. 

Where any Investment Property is held in or credited to an
account that has been established with a securities intermediary, RIF may, at
any time after default, give a notice of exclusive control to any such
securities intermediary with respect to such Investment Property. 

	7. 	
      COLLECTION OF DEBTS



After default under this Security
Agreement, RIF may notify all or any Account Debtors of the Security Interest
and may also direct such Account Debtors to make all payments on Collateral to
RIF. Debtor acknowledges that any payments on or other
proceeds of Collateral received by Debtor from Account Debtors, whether before
or after notification of this Security Interest to Account Debtors and whether
before or after default under this Security Agreement, shall be received and
held by Debtor in trust for RIF and shall be turned over to RIF upon request.


	8. 	
      INCOME FROM AND INTEREST ON COLLATERAL



(a)               Until default, Debtor reserves the right to receive any Money constituting
income from or interest on Collateral and if RIF receives any such Money prior
to default, RIF shall pay the same promptly to Debtor. 

(b)               After default, Debtor will not request or receive any Money constituting income
from or interest on Collateral and if Debtor receives any such Money without any
request by it, Debtor will pay the same promptly to RIF. 

	9. 	
      INCREASES, PROFITS, PAYMENTS OR
    DISTRIBUTIONS



(a)               Whether or not default has occurred, Debtor authorizes RIF: 

	 	(i) 	
      to receive any increase in or profits on Collateral
      (other than Money) and to hold the same as part of Collateral. Money so
      received shall be treated as income for the purposes of Clause 8 hereof
      and dealt with accordingly;

	 	 	 
	 	(ii) 	
      to receive any payment or distribution upon redemption or
      retirement or upon dissolution and liquidation of the issuer of
      Collateral; to surrender such Collateral in exchange therefor and to hold
      any such payment or distribution as part of
Collateral.



Page 6 of 15 




(b)               If
Debtor receives any such increase or profits (other than Money) or payments or
distributions, Debtor will deliver the same promptly to RIF to be held by RIF as
herein provided. 

	10. 	
      DISPOSITION OF MONEY



Subject
to any applicable requirements of the P.P.S.A. and the terms of this Agreement,
all Money collected or received by RIF pursuant to or in exercise of any right
it possesses with respect to Collateral shall be applied on account of
Indebtedness first, to retire any other Indebtedness of the Debtor to RIF, ;
second, to pay the expenses of RIF in enforcing its interests hereunder; third,
to pay down the Note in order of the payments due thereunder, or released to
Debtor, all without prejudice to the liability of Debtor or the rights of RIF
hereunder, and any surplus shall be accounted for as required by law. 

	11. 	
      EVENTS OF DEFAULT



The
happening of any Event of Default (as defined in the Note made on February ____,
2012 between Debtor and RIF, as the same may be amended, modified, supplemented
or restated from time to time) shall constitute a default hereunder and is
herein referenced to as “default”. All cure periods applicable in the Note shall
apply herein. 

	13. 	
      REMEDIES



(a)               Upon
default, subject to the expiry of any cure periods set out in the Note and
provided that such default is continuing: 

(i)               RIF may appoint or reappoint by
instrument in writing, any person or persons, whether an officer or officers or
an employee or employees of RIF or not, to be a receiver or receivers
(hereinafter called a "Receiver", which term when used herein shall include a
receiver and manager) of Collateral (including any interest, income or profits
therefrom) and may remove any Receiver so appointed and appoint another in
his/her stead. Any such Receiver shall, so far as concerns responsibility for
his/her acts, be deemed the agent of Debtor and not RIF, and RIF shall not be in
any way responsible for any misconduct, negligence or non-feasance on the part
of any such Receiver, his/her servants, agents or employees. Subject to the
provisions of the instrument appointing him/her, any such Receiver shall have
power to take possession of Collateral, to preserve Collateral or its value, to
carry on or concur in carrying on all or any part of the business of Debtor and
to sell, lease, license or otherwise dispose of or concur in selling, leasing,
licensing or otherwise disposing of Collateral. To facilitate the foregoing
powers, any such Receiver may, to the exclusion of all others, including Debtor,
enter upon, use and occupy all premises owned or occupied by Debtor wherein
Collateral may be situate, maintain Collateral upon such premises, borrow money
on a secured or unsecured basis and use Collateral directly in carrying on
Debtor's business or as security for loans or advances to enable the Receiver to
carry on Debtor's business or otherwise, as such Receiver shall, in its
discretion, determine. Except as may be otherwise directed by RIF, all Money
received from time to time by such Receiver in carrying out his/her appointment shall be received in trust for and
paid over to RIF. Every such Receiver may, in the discretion of RIF, be vested
with all or any of the rights and powers of RIF.

Page 7 of 15 




(ii)               RIF may, either directly or through
its agents or nominees, exercise any or all of the powers and rights given to a
Receiver by virtue of the foregoing sub-clause (a). 

(iii)             RIF may take possession of,
collect, demand, sue on, enforce, recover and receive Collateral and give valid
and binding receipts and discharges therefor and in respect thereof and, upon
default, RIF may sell, license, lease or otherwise dispose of Collateral in such
manner, at such time or times and place or places, for such consideration and
upon such terms and conditions as to RIF may seem reasonable. 

(b)               In
addition to those rights granted herein and in any other agreement now or
hereafter in effect between Debtor and RIF and in addition to any other rights
RIF may have at law or in equity, RIF shall have, both before and after default,
all rights and remedies of a secured party under the P.P.S.A. Provided always,
that RIF shall not be liable or accountable for any failure to exercise its
remedies, take possession of, collect, enforce, realize, sell, lease, license or
otherwise dispose of Collateral or to institute any proceedings for such
purposes. Furthermore, RIF shall have no obligation to take any steps to
preserve rights against prior parties to any Instrument or Chattel Paper whether
Collateral or proceeds and whether or not in RIF's possession and shall not be
liable or accountable for failure to do so. 

(c)               Debtor acknowledges that RIF or any Receiver appointed by it may take possession
of Collateral wherever it may be located and by any method permitted by law and
Debtor agrees upon request from RIF or any such Receiver to assemble and deliver
possession of Collateral at such place or places as directed.

(f)               Debtor agrees to be liable for and to pay all costs, charges and expenses
reasonably incurred by RIF or any Receiver appointed by it, whether directly or
for services rendered (including reasonable solicitors and auditors costs and
other legal expenses and Receiver remuneration), in operating Debtor's accounts,
in preparing or enforcing this Security Agreement, taking and maintaining
custody of, preserving, repairing, processing, preparing for disposition and
disposing of Collateral and in enforcing or collecting Indebtedness and all such
costs, charges and expenses, together with any amounts owing as a result of any
borrowing by RIF or any Receiver appointed by it, as permitted hereby, shall be
a first charge on the proceeds of realization, collection or disposition of
Collateral and shall be secured hereby. 

(d)               RIF
will give Debtor such notice, if any, of the date, time and place of any public
sale or of the date after which any private disposition of Collateral is to be
made as may be required by the P.P.S.A.

(e)               Upon
default and receiving written demand from RIF, Debtor shall take such further
action as may be necessary to evidence and effect an assignment or licensing of
Intellectual Property to whomever RIF directs, including to RIF. Debtor appoints
any officer or director or branch manager of RIF upon default to be its attorney
in accordance with applicable legislation with full power of substitution and to do on
Debtor's behalf anything that is required to assign, license or transfer, and to
record any assignment, licence or transfer of the Collateral. This power of
attorney, which is coupled with an interest, is irrevocable until the release or
discharge of the Security Interest. 

Page 8 of 15 






	14. 	
      MISCELLANEOUS



(a)               Debtor hereby authorizes RIF to file such financing statements, financing change
statements and other documents and do such acts, matters and things (including
completing and adding schedules hereto identifying Collateral or any permitted
Encumbrances affecting Collateral or identifying the locations at which Debtor's
business is carried on and Collateral and records relating thereto are situate)
as RIF may deem appropriate to perfect on an ongoing basis and continue the
Security Interest, to protect and preserve Collateral and to realize upon the
Security Interest and Debtor hereby irrevocably constitutes and appoints RIF the
true and lawful attorney of Debtor, with full power of substitution, to do any
of the foregoing in the name of Debtor whenever and wherever it may be deemed
necessary or expedient. 

(b)               Without limiting any other right of RIF, whenever Indebtedness is immediately
due and payable or RIF has the right to declare Indebtedness to be immediately
due and payable (whether or not it has so declared), RIF may, in its sole
discretion, set off against Indebtedness any and all amounts then owed to Debtor
by RIF in any capacity, whether or not due, and RIF shall be deemed to have
exercised such right to set off immediately at the time of making its decision
to do so even though any charge therefor is made or entered on RIF's records
subsequent thereto. 

(c)               Upon
Debtor's failure to perform any of its duties hereunder, RIF may, but shall not
be obligated to, perform any or all of such duties, and Debtor shall pay to RIF,
forthwith upon written demand therefor, an amount equal to the reasonable
expenses incurred by RIF in so doing plus interest thereon from the date such
expense is incurred until it is paid at the rate of 15% per annum. 

(d)               RIF
may grant extensions of time and other indulgences, take and give up security,
accept compositions, compound, compromise, settle, grant releases and discharges
and otherwise deal with Debtor, debtors of Debtor, sureties and others and with
Collateral and other security as RIF may see fit without prejudice to the
liability of Debtor or RIF's right to hold and realize the Security Interest.
Furthermore, RIF may demand, collect and sue on Collateral in either Debtor's or
RIF's name, at RIF's option, and may endorse Debtor's name on any and all
cheques, commercial paper, and any other Instruments pertaining to or
constituting Collateral. 

(e)               No
delay or omission by RIF in exercising any right or remedy hereunder or with
respect to any Indebtedness shall operate as a waiver thereof or of any other
right or remedy, and no single or partial exercise thereof shall preclude any
other or further exercise thereof or the exercise of any other right or remedy.
Furthermore, RIF may remedy any default by Debtor hereunder or with respect to
any Indebtedness in any reasonable manner without waiving the default remedied
and without waiving any other prior or subsequent default by Debtor. All rights
and remedies of RIF granted or recognized herein are cumulative and may be
exercised at any time and from time to time independently or in combination.


Page 9 of 15 




(f)               Debtor waives protest of any Instrument constituting Collateral at any time held
by RIF on which Debtor is in any way liable and, subject to Clause 13(g) hereof,
notice of any other action taken by RIF. 

(g)               This
Security Agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective heirs, executors, administrators, successors and
assigns.

(h)               Subject to compliance with applicable securities laws, RIF may provide any
financial and other information it has about Debtor, the Security Interest and
the Collateral to any one acquiring or who may acquire an interest in the
Security Interest or the Collateral from RIF or any one acting on behalf of RIF.


(i)                Save
for any schedules which may be added hereto pursuant to the provisions hereof,
no modification, variation or amendment of any provision of this Security
Agreement shall be made except by a written agreement, executed by the parties
hereto and no waiver of any provision hereof shall be effective unless in
writing. 

(j)                This
Security Agreement and the security afforded hereby is in addition to and not in
substitution for any other security now or hereafter held by RIF and is intended
to be a continuing Security Agreement and shall remain in full force and effect
until RIF shall actually receive written notice of its discontinuance; and,
notwithstanding such notice, shall remain in full force and effect thereafter
until all Indebtedness contracted for or created before the receipt of such
notice by RIF, and any extensions or renewals thereof (whether made before or
after receipt of such notice) together with interest accruing thereon after such
notice, shall be paid in full. 

(k)                The
headings used in this Security Agreement are for convenience only and are not be
considered a part of this Security Agreement and do not in any way limit or
amplify the terms and provisions of this Security Agreement.

(l)                When
the context so requires, the singular number shall be read as if the plural were
expressed and the provisions hereof shall be read with all grammatical changes
necessary dependent upon the person referred to being a male, female, firm or
corporation.

(m)                In
the event any provisions of this Security Agreement, as amended from time to
time, shall be deemed invalid or void, in whole or in part, by any Court of
competent jurisdiction, the remaining terms and provisions of this Security
Agreement shall remain in full force and effect. 

(n)                Nothing herein contained shall in any way obligate RIF to grant, continue,
renew, extend time for payment of or accept anything which constitutes or would
constitute Indebtedness. 

(o)                The
Security Interest created hereby is intended to attach when this Security
Agreement is signed by Debtor and delivered to RIF. 

(p)                Debtor acknowledges and agrees that in the event it amalgamates with any other
company or companies it is the intention of the parties hereto that the term
"Debtor" when used herein shall apply to each of the amalgamating companies and to
the amalgamated company, such that the Security Interest granted hereby

Page 10 of 15 






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

	 	 	 
	 	(ii) 	
      shall secure the "Indebtedness" (as that term is herein
      defined) of each of the amalgamating companies and the amalgamated company
      to RIF at the time of amalgamation and any "Indebtedness" of the
      amalgamated company to RIF thereafter arising. The Security Interest shall
      attach to "Collateral" owned by each company amalgamating with Debtor, and
      by the amalgamated company, at the time of the amalgamation, and shall
      attach to any "Collateral" thereafter owned or acquired by the amalgamated
      company when such becomes owned or is acquired.



(q)               This
Security Agreement and the transactions evidenced hereby shall be governed by
and construed in accordance with the laws of the Province of Ontario and the
laws of Canada applicable therein. 

	15. 	
      COPY OF AGREEMENT



(a)               Debtor hereby acknowledges receipt of a copy of this Security Agreement. 

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