Maverick Minerals Corporation - Exhibit 10.3 - Filed by newsfilecorp.com






GENERAL SECURITY AGREEMENT 

                  THIS
GENERAL SECURITY AGREEMENT is dated for reference September 20, 2010
and made, 

BETWEEN: 


  
    
      MAVERICK MINERALS CORPORATION, a Nevada
        corporation, having an office at 2501 Lansdowne Avenue, Saskatoon, SK
        S7J 1H3; 

      (the “Debtor”) 

    

  



AND: 


  
    
      ART BROKERAGE, INC., a Nevada corporation,
        having an office at 2245 N. Green Valley Pkwy, Ste. 429, Henderson, Nevada
        89014; 

      (the “Secured Party”)

    

  



ARTICLE 1 

  DEFINITIONS 

1.1           
Definitions 

                  In
this Agreement the following words and phrases will have the meanings set out
below unless the parties or the context otherwise require(s).

	 	(a) 	
      “Act” means the Uniform Commercial Code in
      effect under Chapter 104 of the Nevada Revised Statutes.

	 	 	 
	 	(b) 	
      “Agreement” or “this Agreement” means this
      Agreement including all recitals and schedules hereto. as modified,
      amended, restated or replaced from time to time.

	 	 	 
	 	(c) 	
      “Collateral” means all of the Debtor’s present and
      after-acquired personal property and interests therein of every nature and
      kind and wherever situate, including, without limitation, all personal
      property and interests therein now or hereafter held by the Debtor in
      trust for any person(s) or by any person(s) in trust for the Debtor,
      including all proceeds (including proceeds) derived therefrom that are
      present or after-acquired personal property or other assets or undertaking
      of any nature or kind, tangible or intangible, legal or equitable,
      wherever the same may be situate, (including proceeds derived directly or
      indirectly from any dealing with the personal property charged hereby
      (including proceeds), all rights to insurance payments and other payments
      as indemnity or compensation for loss thereof or damage thereto, and all
      payments made in total or partial discharge or redemption of securities,
      instruments, chattel paper or intangibles (including accounts) comprised
      therein); provided, however, that to the extent the
term “Collateral” may have a broader meaning under the Act,
      such broader definition is hereby incorporated by reference and shall
  apply in addition to the description above








- 2 -

	 	(d) 	
      “Debtor” means the party so described above and
      its successors and assigns, whether immediate or derivative, along with
      any majority-owned subsidiary of such party

	 	 	 
	 	(e) 	
      “Encumbrances” means all security interests,
      assignments, mortgages, hypothecations, pledges, liens, claims, charges
      (whether fixed or floating), or encumbrances whatsoever.

	 	 	 
	 	(f) 	
      “Events of Default” means the events of default
      described in Article 7 of this Agreement and “Event of Default”
      means any one of them.

	 	 	 
	 	(g) 	
      “Intellectual Property” in respect of a Person
      means present and after acquired intellectual or industrial property of
      that Person, including, without limitation, all patents, patent
      applications, inventions, copyright (whether registered or not), copyright
      applications, trademarks, (whether registered or not), trademark
      applications, trade names, moral and personality rights, industrial
      designs (whether registered or not), industrial design applications, trade
      secrets, know- how, confidential and other proprietary information, and
      contractual rights and any and all covenants not to compete in favour of
      that Person, and all income, royalties, damages, payments and claims now
      and hereafter due and or payable to that Person with respect
    thereto.

	 	 	 
	 	(h) 	
      “Loan” means the $2,400,000 loan made or to be
      made by the Secured Party to the Debtor pursuant to the Loan
    Agreement.

	 	 	 
	 	(i) 	
      “Loan Agreement” means the loan agreement dated
      for reference September __, 2010 and made between the Debtor and the
      Secured Party, in connection with the Loan, as amended, modified, restated
      or replaced from time to time.

	 	 	 
	 	(j) 	
      “Obligants” means the Debtor and all (other)
      Persons who are from time to time liable to the Secured Party for the
      payment, observance or performance of the whole or any portion of the
      Secured Obligations, whether directly or indirectly, absolutely or
      contingently, jointly, severally or jointly and severally and includes all
      Persons who from time to time otherwise become liable for, or who agree to
      indemnify the Secured Party for any loss, costs or damages as a result of
      the failure of any other Persons to pay, observe or perform any of the
      Secured Obligations and “Obligant” means any of them.

	 	 	 
	 	(k) 	
      “Other Document” means any instrument or document
      other than this Agreement which evidences, secures or evidences or secures
      the payment, observance, observance and performance of the Secured
      Obligations in whole or in part.

	 	 	 
	 	(l) 	
      “Persons” or “Person” means and includes
      any individual, sole proprietorship, corporation, partnership, bank, joint
      venture, trust, unincorporated association, association, institution,
      entity, party or government (whether national,
federal, provincial, state, municipal, city, county or otherwise
      and including any instrumentality, division, agency, body or department
  thereof).








- 3 -

	 	(m) 	
      “Permitted Encumbrances” means as of any
      particular time in respect of any particular Collateral, any of the
      following:

	 	 	 	 
	 		(i) 	
      any Encumbrance in favour of the Secured Party;
  and

	 	 	 	 
	 		(ii) 	
      any immaterial Encumbrance incurred in the ordinary
      course of the Debtor’s business.

	 	 	 	 
	 	(n) 	
      “Secured Obligations” means the obligations of the
      Debtor to the Secured Party in connection with the Loan (including all
      future advances and re-advances) whether direct or indirect, absolute or
      contingent, joint, several or joint and several, matured or not, extended
      or renewed, wherever and however incurred, of whatever nature or kind and
      whether or not evidenced or secured by any Other Document, or provided for
      herein.

	 	 	 	 
	 	(o) 	
      “Secured Party” means the party so described above
      and its successors and assigns, whether immediate or derivative, the term
      “Secured Party” shall also be deemed to mean any agent, representative or
      attorney acting on the Secured Party’s behalf, on a mutatis mutandis
      basis



1.2           
  Applicability of Act

         
       Capitalized words used in this
Agreement that are defined in the Act will have the respective meanings ascribed
to them in the Act, unless otherwise defined herein. 

ARTICLE 2 

  SECURITY INTEREST

2.1            
  Creation of Security Interest

             
     For valuable consideration and as continuing
security for the payment, observance and performance of each and all of the
Secured Obligations: 

	 	(a) 	
      Fixed Security Interest: the Debtor:

	 	 	 	 
	 		(i) 	
      grants to the Secured Party (who takes from the Debtor) a
      continuing security interest in the Collateral;

	 	 	 	 
	 		(ii) 	
      grants, mortgages and charges the Collateral to the
      Secured Party by way of a fixed and specific charge; and

	 	 	 	 
	 		(iii) 	
      absolutely assigns the Collateral to the Secured
      Party.

	 	 	 	 
	 	(b) 	
      Intellectual Property: without limiting the
      generality of the foregoing, the Debtor grants to the Secured Party a
      security interest in all its Intellectual Property and all proceeds
      thereof and therefrom, renewals thereof, accessions thereto and
      substitutions therefor.







- 4 -

	2.2 	
      [Reserved]

	 	 
	2.3 	
      Attachment



           
     The Debtor acknowledges that value has
been given, the security interests hereby created attach upon the execution of
this Agreement (or in the case of any after acquired property, upon the date of
acquisition thereof by or on behalf of the Debtor) and the Debtor has (or in the
case of after acquired property will have) rights in the Collateral. 

2.4           
  Multiple Debtors

             
    It is understood that if the Debtor is
comprised of more than one Person, the charges and security interests created by
the Debtor hereunder pursuant to Section 2.1 hereof shall be interpreted to be
charges and security interests created by each such Person in respect of both
its individually owned or acquired present and future property and the property
now or hereafter held by it with one or more other such Persons as if that
Person had granted such charges and security interests either alone or jointly
with one or more other such Persons pursuant to Section 2.1 hereof. 

ARTICLE 3 

  SECURED OBLIGATIONS

3.1           
  Secured Obligations

              
   This Agreement, the Collateral and the security and
other interests hereby created are in addition to and not in substitution for
any other security interest now or hereafter held by the Secured Party from the
Debtor or from any other Person whomsoever and will be general and continuing
security for the payment, performance and observance of the Secured Obligations.


ARTICLE 4 

  DEBTOR’S REPRESENTATIONS AND WARRANTIES

4.1           
  General

            
     The Debtor makes the representations and
warranties set out in this paragraph 4.1 to and for the benefit of the Secured
Party. 

	 	(a) 	
      Incorporation: The Debtor is duly incorporated,
      properly organized and validly existing under the laws of
Nevada.

	 	 	 	 
	 	(b) 	
      Power and Authority: The Debtor has full power and
      lawful authority:

	 	 	 	 
	 		(i) 	
      to own real and personal property; and

	 	 	 	 
	 		(ii) 	
      to borrow and guarantee the repayment of money and grant
      security therefor (including this Agreement and the security interest and
      any floating charge hereby created).

	 	 	 	 
	 	(c) 	
      Proceedings and Enforceability: The Debtor
      represents and warrants that this Agreement is granted in accordance with
      resolutions of the directors (and of the shareholders as applicable) of
      the Debtor 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
      Secured Obligations hereunder, a valid and legally binding obligation of
      the Debtor enforceable in accordance with its terms, subject only to
      bankruptcy, insolvency or other statutes or judicial decisions affecting
      the enforcement of creditors’ rights generally and to general principles
  of equity.








- 5 -

	 	(d) 	
      No Actions or Material Adverse Changes: There is
      no action or proceeding pending or, to the knowledge of the Debtor,
      threatened against the Debtor before any court, administrative agency,
      tribunal, arbitrator, government or governmental agency, and there is no
      fact known to the Debtor and not disclosed to the Secured Party which
      might involve any material adverse change in the properties, business,
      prospects or condition of the Debtor, or which question the validity of
      this Agreement or any other material agreement to which the Debtor is a
      party (or the Debtor’s ability to perform its obligations under this
      Agreement) and there are no outstanding judgments, writs of execution,
      work orders, injunctions, directives against the Debtor or its
      properties;

	 	 	 
	 	(e) 	
      Non-Conflict: Neither the execution nor the
      performance of this Agreement requires the approval of any regulatory
      agency having jurisdiction over the Debtor nor is this Agreement in
      contravention of or in conflict with the articles, by-laws or resolutions
      of the directors (or shareholders) of the Debtor, or of the provisions of
      any agreement to which the Debtor is a party or by which any of its
      property may be bound or of any statute, regulation, by-law, ordinance or
      other law, or of any judgment, decree, award, ruling or order to which the
      Debtor or any of its property may be subject.

	 	 	 
	 	(f) 	
      No Default: The Debtor is not in breach or default
      under any agreement to which it is a party which if not cured would have a
      material adverse effect upon the Debtor or the Collateral.

	 	 	 
	 	(g) 	
      No Liens: Except for Permitted Encumbrances, the
      Debtor has paid and discharged all claims and demands of all employees,
      contractors, subcontractors, material men, mechanics, carriers,
      warehousemen, landlords, and other like persons, and all governmental
      taxes, assessments, withholdings, remittances, charges, security
      interests, levies, and claims levied or imposed, which, if unpaid, become
      or might become an Encumbrance upon any or all of the properties, assets,
      earnings, or operations of the Debtor.

	 	 	 
	 	(h) 	
      Ownership and Collateral Free of Encumbrances: The
      Debtor is the owner of or has rights in the Collateral free and clear of
      all Encumbrances whatsoever save only Permitted Encumbrances. The Debtor
      has not, within the last 60 days, acquired rights in the Collateral from a
      vendor, lessor or other person.

	 	 	 
	 	(i) 	
      No Other Corporate Names or Styles: The Debtor
      does not now carry on business under or use any name or style other than
      the names specified in this Agreement.

	 	 	 
	 	(j) 	
      Chief Executive Office: The Debtor has its chief
      executive office at the location described in Schedule
  “B”.








- 6 -

	 	(k) 	
      Location of Collateral: The Collateral will be
      maintained (or in the case of mobile goods based) at the locations
      described in Schedule “B”Insurance: The Collateral is insured in
      accordance with the terms hereof.

	 	 	 	 
	 	(l) 	
      Serial Numbered Goods: The type, make (or
      manufacturer), model and serial number of each motor vehicle, trailer,
      manufactured home, boat, outboard motor and aircraft included in the
      Collateral and which is not inventory is set out in Schedule
“B”.

	 	 	 	 
	 	(m) 	
      Legal and Trade Names: Each name of the Debtor is
      set out on the first page hereof, and the Debtor has not had, used, or
      carried on business under, and will not at any time have, use or carry on
      business under, any other name except as disclosed in Schedule “B” or upon
      giving 15 days’ prior written notice to the Secured Party.

	 	 	 	 
	 	(n) 	
      Rights in Collateral: No Person other than the
      Debtor has any rights in the Collateral except as noted in Schedule
      “B”.

	 	 	 	 
	 	(o) 	
      Solvency: The assets of the Debtor exceeds its
      liabilities and the Debtor is able to meet its obligations as the same
      become due.

	 	 	 	 
	 	(p) 	
      Intellectual Property:

	 	 	 	 
	 		(i) 	
      Ownership: The Debtor is the owner of the
      Intellectual Property applications and registrations (if any) described in
      Schedule “B”; there are no outstanding claims of ownership by third
      parties in respect of such registrations and applications; and all are
      valid and in good standing.

	 	 	 	 
	 		(ii) 	
      Trade Marks: All trade-mark and industrial designs
      described in Schedule “B” have been in continuous use and that use has
      been proper in relation to the wares and/or services of Debtor; only the
      Debtor has used the trade-marks, or if there are any third party users of
      the Debtor’s trade- marks, such third party users are properly licensed to
      use such trade- marks.

	 	 	 	 
	 		(iii) 	
      Assignments: All assignments and Other Document
      affecting the Debtor’s Intellectual Property rights have been disclosed
      and provided to the Secured Property.

	 	 	 	 
	 		(iv) 	
      Claims: There are no outstanding or threatened
      claims or proceedings with respect to the Debtor’s Intellectual
      Property.

	 	 	 	 
	 		(v) 	
      Third Party Intellectual Property: All necessary
      assignments and license agreements have been properly executed by the
      Debtor for use of third party Intellectual
Property.







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ARTICLE 5 

  DEBTOR’S COVENANTS

5.1           
  General Covenants

            
     The Debtor covenants and agrees with the
Secured Party as set forth in this Section 5.1 unless compliance with any such
covenants is waived by the Secured Party in writing, or unless non-compliance
with any such covenants is otherwise consented to by the Secured Party by
written agreement with the Debtor. 

	 	(a) 	
      Compliance with Secured Obligations: The Debtor
      shall strictly comply with all of the Secured Obligations.

	 	 	 
	 	(b) 	
      Use of Advances: All advances, including future
      advances, advanced or extended by the Secured Party to or for the benefit
      of the Debtor shall be used in the ordinary course of the Debtor’s
      business for the purposes agreed to by the Secured Party and for no other
      purpose, and the Debtor shall supply the Secured Party with such evidence
      as it may reasonably request from time to time as to the application of
      such advances.

	 	 	 
	 	(c) 	
      Keep Collateral in Good Repair: The Debtor shall
      keep the Collateral in good order, condition and repair.

	 	 	 
	 	(d) 	
      Conduct of Business: The Debtor shall carry on and
      conduct its affairs in a proper and efficient manner so as to protect and
      preserve the Collateral and shall maintain places of business at the
      locations disclosed in Schedule “B”.

	 	 	 
	 	(e) 	
      Payment of Other Sums Due: The Debtor shall pay
      when due all amounts which are payable by it in connection with the
      Collateral, howsoever arising, including without limiting the generality
      of the foregoing, all rents, charges, taxes, rates, levies, assessments,
      fees and duties of every nature which may be levied, assessed or imposed
      against or in respect of the Collateral or the Debtor and shall provide
      the Secured Party with evidence of such payment upon request.

	 	 	 
	 	(f) 	
      Notice of Encumbrances and Proceedings: The Debtor
      shall promptly notify the Secured Party of any Encumbrance made or
      asserted against any of the Collateral, and of any suit, action or
      proceeding affecting any of the Collateral or which could affect the
      Debtor. The Debtor shall, at its own expense, defend the Collateral
      against any and all Encumbrances (other than any Permitted Encumbrances)
      and against any and all such suits, actions or proceedings.

	 	 	 
	 	(g) 	
      No Accessions or Fixtures: The Debtor shall
      prevent the Collateral from becoming an accession to any property other
      than other items of the Collateral or from becoming a Fixture unless the
      security interests hereby created rank prior to the interests of all other
      persons in the applicable property.

	 	 	 
	 	(h) 	
      Marking the Collateral: The Debtor shall, at the
      request of the Secured Party, mark, or otherwise take appropriate steps to
      identify, the Collateral to indicate clearly that it is subject to the
      security interests hereby created.







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	 	(i) 	
      Notice of Loss of Collateral: The Debtor shall
      give immediate written notice to the Secured Party of all loss or damage
      to or loss or possession of the Collateral otherwise than by disposition
      in accordance with the terms hereof.

	 	 	 	 
	 	(j) 	
      Inspection of Records and Collateral: The Debtor
      shall at all times:

	 	 	 	 
	 		(i) 	
      keep accurate and complete records of the Collateral as
      well as proper books of account for its business all in accordance with
      generally accepted accounting principles, consistently applied;
  and

	 	 	 	 
	 		(ii) 	
      permit the Secured Party or its authorized agents to have
      access to all premises occupied by the Debtor or any place where the
      Collateral may be found to inspect the Collateral and to examine the books
      of accounts, financial records and reports of the Debtor and to have
      temporary custody of, make copies of and take extracts from such books,
      records and reports.

	 	 	 	 
	 	(k) 	
      Access to Computer Information: In the event that
      the use of a computer system is required to access any information and
      data which the Secured Party is entitled to access and examine hereunder,
      the Debtor shall allow the Secured Party the use of its computer system
      for such purpose and shall provide assistance in that regard. If for any
      reason such information and data cannot be accessed and retrieved at the
      Debtor premises, the Secured Party may remove the medium in which such
      information or data is stored from the Debtor’s premises to any other
      place which has a computer system that will give the Secured Party the
      opportunity to retrieve, record or copy such information and data. The
      Secured Party is hereby authorized to reproduce and retain a copy of any
      such information and data in any format whatsoever.

	 	 	 	 
	 	(l) 	
      Delivery of Documents: The Debtor shall promptly
      deliver to the Secured Party upon request:

	 	 	 	 
	 		(i) 	
      all policies and certificates of insurance relating to
      the Collateral;

	 	 	 	 
	 		(ii) 	
      any documents of title and instruments representing or
      relating to the Collateral;

	 	 	 	 
	 		(iii) 	
      a list of the Collateral, specifying make, model, name of
      manufacturer and serial number, where applicable, for each item of the
      Collateral; and

	 	 	 	 
	 		(iv) 	
      such information concerning the Collateral, the Debtor
      and the Debtor’s operations and affairs as the Secured Party may
      request.

	 	 	 	 
	 	(m) 	
      Risk and Insurance: The Debtor shall bear the sole
      risk of any loss, damage, destruction or confiscation of or to the
      Collateral during the Debtor’s possession hereunder or otherwise after
      default hereunder. The Debtor shall insure the Collateral with insurers
      acceptable to the Secured Party against loss or damage by fire, theft or
      other insurable perils customarily insured against by persons having an
      interest in such Collateral for the full insurable value thereof with the
      Secured Party as a named insured and with loss payable to the Secured
      Party as its interest may appear. All such policies of insurance will
      provide that the insurance coverage provided thereunder shall not be changed or
      cancelled except on 30 days’ prior written notice to the Secured Party. If
      the Debtor fails to so insure, the Secured Party may, but shall not be
      required to, insure the Collateral and the premiums for such insurance
  will be added to the Secured Obligations and be secured hereby.








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	 	(n) 	
      Proceeds in Trust: The Debtor shall hold all
      proceeds in trust, separate and apart from other money, instruments or
      property, for the benefit of the Secured Party until all amounts owing by
      the Debtor to the Secured Party have been paid in full.

	 	 	 	 
	 	(o) 	
      Reliance and Survival: All representations and
      warranties of the Debtor made herein or in any certificate or other
      document delivered by or on behalf of the Debtor for the benefit of the
      Secured Party are material, will survive the execution and delivery of
      this Agreement and will continue in full force and effect without time
      limit. The Secured Party is deemed to have relied upon each such
      representation and warranty notwithstanding any investigation made by or
      on behalf of the Secured Party at any time.

	 	 	 	 
	 	(p) 	
      Compliance with Agreements and Laws: The Debtor
      shall not use the Collateral in violation of this Agreement or any other
      agreement relating to the Collateral or any policy insuring the Collateral
      or any applicable statute, law, by- law, rule, regulation, court order or
      ordinance.

	 	 	 	 
	 	(q) 	
      Disposition of Collateral: Except as hereinafter
      provided, the Debtor shall not, without the prior written consent of the
      Secured Party:

	 	 	 	 
	 		(i) 	
      assign, sell, lease, exchange, or otherwise dispose of
      the Collateral or any interest therein; or

	 	 	 	 
	 		(ii) 	
      release, surrender or abandon possession of any of the
      Collateral; or

	 	 	 	 
	 		(iii) 	
      move or transfer the Collateral from its present
      location,

	 	 	 	 
	 		
      provided that so long as no Event of Default remains
      outstanding, the Debtor may sell or lease inventory in the ordinary course
      of business and for the purpose of carrying on the same, and subject to
      the provisions of Section 5.1(b) hereof use monies available to the
      Debtor.

	 	 	 	 
	 		
      For any item of the Collateral which has become worn out,
      damaged or otherwise unsuitable for its purpose, the Debtor may substitute
      for such item property of equal value free from all Encumbrances except
      Permitted Encumbrances. All substituted property shall become part of the
      Collateral as soon as the Debtor acquires any interest in it. The Debtor
      shall give immediate written notice to the Secured Party of the occurrence
      of any event referred to in this paragraph.

	 	 	 	 
	 	(r) 	
      Encumbrances: The Debtor shall not create, assume
      or suffer to exist any Encumbrance in, of or on any of the Collateral
      except for Permitted Encumbrances.

	 	 	 	 
	 	(s) 	
      Change of Name: The Debtor shall not change its
      name without giving to the Secured Party 20 days’ prior written notice of
      the change.








- 10 -

	 	(t) 	
      Serial Numbered Goods: Upon the Debtor’s
      acquisition of rights in additional serial numbered goods which are not
      inventory, or upon repossession by or return to the Debtor of any such
      goods, the Debtor shall immediately give the Secured Party written notice
      of full particulars thereof.

	 	 	 	 
	 	(u) 	
      Liability for Deficiency: If the aggregate sum
      realized as a result of any realization pursuant hereto is not sufficient
      to pay the whole amount of the Secured Obligations, the Debtor shall
      forthwith pay to the Secured Party the full amount of the deficiency plus
      interest thereon at the rate or rates applicable to the Secured
      Obligations.

	 	 	 	 
	 	(v) 	
      Notification: The Debtor shall notify the Secured
      Party promptly:

	 	 	 	 
	 		(i) 	
      Scheduled Information: Any change in the
      information contained herein or in the Schedules hereto relating to the
      Debtor, the Debtor’s name, the Debtor’s business or the
  Collateral.

	 	 	 	 
	 		(ii) 	
      Acquisitions: The details of any significant
      acquisition of Collateral.

	 	 	 	 
	 		(iii) 	
      Litigation: The details of any claims or
      litigation affecting the Debtor or the Collateral.

	 	 	 	 
	 		(iv) 	
      Account Debtors: Any default by any account debtor
      in payment or other performance of obligations of that Person comprised in
      the Collateral.

	 	 	 	 
	 		(v) 	
      Return of Collateral: The return to, or
      repossession by, the Debtor of Collateral.

	 	 	 	 
	 	(w) 	
      Payments: The Debtor shall forthwith
pay:

	 	 	 	 
	 		(i) 	
      Employee obligations: All obligations to its
      employees and all obligations to others which relate to its employees when
      due, including, without limitation, all taxes, duties, levies, government
      fees, claims and dues related to its employees.

	 	 	 	 
	 		(ii) 	
      Taxes: All taxes, assessments, rates, duties,
      levies, government fees, claims and dues lawfully levied, assessed or
      imposed upon it or the Collateral when due, unless the Debtor shall in
      good faith contests its obligations so to pay and furnishes such security
      as the Secured Party may require.

	 	 	 	 
	 	(x) 	
      Deliveries: The Debtor shall deliver to the
      Secured Party from time to time promptly upon written request:

	 	 	 	 
	 		(i) 	
      Documents of Title, Instruments, Securities and
      Chattel Paper: Any documents of title, instruments, securities and
      chattel paper comprised in or relating to the Collateral.

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








- 11 -

	 	(iii) 	
      Financial Statements: All financial statements
      prepared by or for the Debtor regarding the Debtor’s business.

	 	 	 
	 	(iv) 	
      Insurance Policies: All policies and certificates
      of insurance relating to the Collateral.

	 	 	 
	 	(v) 	
      Serial Number: A list of the Collateral,
      specifying make, model, name of manufacturer and serial number, where
      applicable, for each item of the Collateral.

	 	 	 
	 	(vi) 	
      Other Information: such information concerning the
      Collateral, the Debtor and Debtor’s business and affairs as the Secured
      Party may reasonably require.





	 	(y) 	
      Intellectual Property: The Debtor shall:

	 	 	 	 
	 		(i) 	
      Registration of present Intellectual Property:
      Where commercially reasonable, apply to file applications and complete
      registrations on any of its present Intellectual Property which is not
      currently protected by an application or registration, including any and
      all improvements to Intellectual Property and, where commercially
      reasonable, apply to file registrations on unregistered trade-marks in
      Canada and the United States.

	 	 	 	 
	 		(ii) 	
      Registration of after acquired Intellectual Property:
      Apply to file applications and complete registrations of all
      Intellectual Property hereafter acquired by it in all jurisdictions where
      commercially reasonable.

	 	 	 	 
	 		(iii) 	
      Maintain Records: Keep up-to-date witnessed
      records regarding its Intellectual Property.

	 	 	 	 
	 		(iv) 	
      Confidentiality Agreements: Enter into
      confidentiality agreements with employees and other third parties who may
      invent, create, discover, author and/or reduce to practice Intellectual
      Property for the Debtor and who may have access to confidential
      information of the Debtor.

	 	 	 	 
	 		(v) 	
      License/Assignment Agreements: Ensure that all
      Intellectual Property hereafter acquired by it from third parties is
      properly acquired by way of a written license agreement or
    assignment.

	 	 	 	 
	 		(vi) 	
      List of unregistered trade marks etc.: Provide,
      upon written request by the Secured Party, a list of all of its registered
      and unregistered trade-marks, patent applications, issued patents,
      copyright, industrial designs and other Intellectual Property.

	 	 	 	 
	 		(vii) 	
      Mark Products: Mark all of its products and
      advertising appropriately to maintain the validity of all of its
      Intellectual Property rights.







- 12 -

ARTICLE 6 

  PERFORMANCE OF OBLIGATIONS

6.1           
  Perform Obligations

            
     If the Debtor fails to perform its
obligations hereunder, the Secured Party may, but will not be obligated to,
perform any or all of such obligations without prejudice to any other rights and
remedies of the Secured Party hereunder, and any payments made and any costs,
charges, expenses and legal fees and disbursements (on an attorney and its own
client basis) incurred in connection therewith will be payable by the Debtor to
the Secured Party forthwith with interest until paid at the highest rate borne
by any of the Secured Obligations and such amounts will be a charge upon and
security interest in the Collateral in favour of the Secured Party prior to all
claims subsequent to this Agreement. 

ARTICLE 7

  DEFAULT 

7.1           
  Default

            
     Notwithstanding that any one or more of
the Secured Obligations may be payable on demand and without prejudice thereto,
the Debtor shall be in default under this Agreement upon the occurrence of any
of the following events: 

	 	(a) 	
      if there is a default or a breach by the Debtor (or by
      any other Person bound hereby) of any covenant, agreement, term,
      condition, stipulation or provision contained herein; or

	 	 	 
	 	(b) 	
      if any representation or warranty contained herein or in
      any certificate, declaration, application or other instrument delivered
      pursuant hereto, is found at any time to be incorrect in any material
      respect; or

	 	 	 
	 	(c) 	
      if at any time there is an event of default or a breach
      by any Obligant under any Other Document; or

	 	 	 
	 	(d) 	
      if an Obligant becomes bankrupt or insolvent or makes or
      demonstrates an intention to make an assignment for the benefit of its
      creditors or makes a proposal or takes advantage of any provision of the
      Bankruptcy and Insolvency Act of Canada or any other similar law in
      any jurisdiction for the benefit of the insolvent debtors; or

	 	 	 
	 	(e) 	
      if any proceedings with respect to an Obligant are
      commenced under the compromise or arrangement provisions of any applicable
      legislation, or an Obligant enters into an arrangement or compromise with
      any or all of its creditors pursuant to such provisions or otherwise;
      or

	 	 	 
	 	(f) 	
      if a receiver, receiver-manager or bankruptcy trustee is
      appointed by a court or any other Person in respect of any Obligant, or
      any part of the Collateral; or

	 	 	 
	 	(g) 	
      if the Debtor or any other Person who becomes an owner of
      an interest in any of the Collateral while this Agreement is in effect,
      without the prior consent in writing of the Secured Party, grants or
      purposes to grant an Encumbrance upon or in respect of that Collateral other than pursuant to this
  Agreement or a Permitted Encumbrance; or








- 13 - 

	 	(h) 	
      if any execution, sequestration, extent or any other
      process of any other kind is levied or enforced upon or against the
      Collateral or any part thereof by any Person other than the Secured Party
      and remains unsatisfied for a period of 10 days; or

	 	 	 	 
	 	(i) 	
      if the holder (other than the Secured Party) of any
      Encumbrance against any of the Collateral does anything to enforce or
      realize on such Encumbrance; or

	 	 	 	 
	 	(j) 	
      if in the opinion of the Secured Party a material portion
      of the Collateral is lost, damaged or destroyed; or

	 	 	 	 
	 	(k) 	
      if an Obligant ceases, or threatens to cease, to carry on
      his, her or its business as the same is conducted by that Obligant from
      time to time; or

	 	 	 	 
	 	(l) 	
      if an Obligant is a corporation and:

	 	 	 	 
	 		(i) 	
      it carries on any business that it is restricted from
      carrying on by its charter documents; or

	 	 	 	 
	 		(ii) 	
      an order is made, a resolution is passed or a motion is
      filed for its liquidation, dissolution or winding-up; or

	 	 	 	 
	 	(m) 	
      if an Obligant who is an individual dies or is declared
      incompetent by a court of competent jurisdiction; or

	 	 	 	 
	 	(n) 	
      if in the opinion of the Secured Party, any material
      portion of the Collateral becomes the subject of expropriation
      proceedings; or

	 	 	 	 
	 	(o) 	
      if in the opinion of the Secured Party:

	 	 	 	 
	 		(i) 	
      there is or has been a material adverse change in the
      financial condition of an Obligant or in the value of the Collateral and
      the property, assets and undertakings charged by the Other Document;
    or

	 	 	 	 
	 		(ii) 	
      the prospect for payment, observance and performance of
      all or any part of the Secured Obligations is impaired or is about to be
      placed in jeopardy.



ARTICLE 8 

  RIGHTS, REMEDIES AND POWERS

8.1           
  Before and After Default

                 
At any time and from time to time without notice, whether before or
after an Event of Default, the Secured Party will have the right and power (but
will not be obligated):

	 	(a) 	
      Inspection and Records: to inspect the Collateral
      whenever the Secured Party considers it appropriate to do so, and to
      inspect, review, audit and copy any or all information relating thereto or
      to the Collateral or to any other transactions between the parties hereto
      wherever and however such information is stored,
and for such purposes may at any time with or without notice
      enter into and upon any lands, buildings and premises where the Collateral
  or any such information is or may be;








- 14 -

	 	(b) 	
      Set-Off: to set off the Secured Obligations
      against any or all debts and liabilities, direct and indirect, absolute
      and contingent, in any currency, now existing or hereafter incurred by the
      Secured Party in any capacity in favour of the Debtor;

	 	 	 
	 	(c) 	
      Perfection of Charges and Security Interests: to
      file such financing statements, financing change statements and Other
      Document and do such other acts, matters and things (including completing
      and adding schedules hereto identifying the Collateral or any permitted
      liens affecting the Collateral or identifying the locations at which the
      Debtor’s business is carried on and where the Collateral and records
      relating thereto are situate) as the Secured Party may consider
      appropriate in its sole discretion to perfect, preserve, continue and
      realize upon the security interest created hereby, all without the consent
      of or notice to the Debtor; and

	 	 	 
	 	(d) 	
      Extensions and Other Indulgences: to 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
      Encumbrances, and otherwise deal with the Debtor and other obligors of the
      Debtor, sureties and others and with the Collateral and Encumbrances as
      the Secured Party may consider appropriate, all without prejudice to the
      liability of the Debtor or the Secured Party’s rights to hold and realize
      on the security interest created hereby.



8.2           
  After Default

            
     Upon the occurrence of an Event of
Default and at any time thereafter, the Secured Party may exercise any or all of
the rights, remedies and powers of the Secured Party under any applicable law,
or otherwise existing, whether under this Agreement or any other agreement or at
law or in equity, all of which other rights, remedies and powers are hereby
incorporated as if expressly set out herein. In addition to the foregoing, the
Secured Party will have the right and power (but will not be obligated): 

	 	(a) 	
      Withhold Advances: to withhold any or all
      advances, including future advances;

	 	 	 
	 	(b) 	
      Accelerate Secured Obligations: to declare any or
      all of the Secured Obligations to be immediately due and
payable;

	 	 	 
	 	(c) 	
      Enter and Take Possession: to take possession of
      the Collateral and to collect and get in the same, and for such purposes
      may at any time, with or without notice or legal process and to the
      exclusion of all others including the Debtor and its servants, agents and
      employees, enter into and upon, use and occupy any lands, buildings and
      premises wheresoever and whatsoever, where the Collateral is or may be
      located and do any act and take any proceedings in the name of the Debtor
      or otherwise, as the Secured Party may consider appropriate, and the
      Debtor hereby waives and releases the Secured Party and any Receiver from
      any and all claims in connection therewith or arising
  therefrom;







- 15 -

	 	(d) 	
      Receive Payments: to receive income, rents,
      profits, increases, payments, damages and proceeds from and in respect of
      the Collateral and to demand, collect (by legal proceedings or otherwise),
      endorse, sue on, enforce, realize, recover, receive and get in the same,
      and for such purposes may give valid and binding receipts and discharges
      therefor and in respect thereof and may do any act and take any
      proceedings in the name of the Debtor or otherwise as the Secured Party
      may consider appropriate;

	 	 	 
	 	(e) 	
      Control of Proceeds: to take control of any or all
      proceeds where the Collateral (including proceeds) is dealt with or
      otherwise gives rise to proceeds;

	 	 	 
	 	(f) 	
      Use and Protection of the Collateral: to use,
      hold, insure, preserve, repair, process, maintain, protect and prepare the
      Collateral for disposition and to renew or replace such of the Collateral
      as may be worn out, lost or otherwise unserviceable, in the manner and to
      the extent that the Secured Party may consider appropriate;

	 	 	 
	 	(g) 	
      Disposition of the Collateral: to sell, lease,
      rent or otherwise dispose of or concur in the sale, lease, rental or other
      disposition of the Collateral, whether in or out of the ordinary course of
      business, by private or public sale, lease or other disposition, with or
      without notice, advertising or any other formality, either for cash or in
      any manner involving deferred payment in whole or in part, at such time or
      times and upon such terms and conditions as the Secured Party may consider
      appropriate and for such prices or consideration as can reasonably be
      obtained at such time therefor, and to carry any such disposition into
      effect by conveying title and executing agreements and assurances in the
      name of the Debtor or otherwise as the Secured Party may consider
      appropriate, and to make any stipulations as to title or conveyance or
      commencement of title or otherwise as the Secured Party may consider
      appropriate, and to buy in or rescind or vary any contract for the
      disposition of the Collateral and to re-dispose of the same without being
      answerable for any loss occasioned thereby;

	 	 	 
	 	(h) 	
      Exercise and Enforcement of Debtor’s Rights: to
      exercise as to the Collateral any or all of the rights, remedies and
      powers of the Debtor, and to enforce the observance and performance by
      others of all other obligations and liabilities under or in respect of the
      Collateral;

	 	 	 
	 	(i) 	
      Payment of Liabilities: to pay any or all debts
      and liabilities in connection with the Collateral;

	 	 	 
	 	(j) 	
      Arrangements: to enter into any compromise,
      extension, reorganization, deposit, merger or consolidation agreement or
      similar arrangement in any way relating to or affecting the Collateral,
      and in connection therewith may deposit, exchange or surrender control of
      the Collateral and accept other property upon such terms as the Secured
      Party may consider appropriate, and either with or without payment or
      exchange of money for equality of exchange or otherwise;

	 	 	 
	 	(k) 	
      Institution and Defence of Actions: to institute
      and prosecute all suits, proceedings and actions which the Secured Party
      may consider necessary or advisable for the proper protection or
      enforcement of the Collateral, and to defend all suits, proceedings and actions against the Debtor,
      and to appear in and conduct the prosecution and defence of any suit,
      proceeding or action then pending or thereafter instituted, and to appeal
  any suit, proceeding or action;








- 16 -

	 	(l) 	
      Foreclosure: to exercise its rights under any
      applicable law from time to time, to give notice of a proposal to take,
      and to subsequently take, the Collateral in satisfaction of the Secured
      Obligations;

	 	 	 
	 	(m) 	
      Real Property Realization: to proceed as to the
      Collateral as if the Collateral were land;

	 	 	 
	 	(n) 	
      Other Means of Enforcement: to otherwise enforce
      this Agreement and realize upon the security interest created hereby by
      any method permitted by law, including by bringing action to recover a
      judgment or by taking proceedings to obtain a certificate under (i) the
      Creditor Assistance Act of British Columbia, or (ii) any other
      applicable law, against the Debtor, and to do all such other acts and
      things as it may consider incidental or conducive to any of its rights,
      remedies and powers; and



Appointment of Receiver: to appoint by instrument in
writing with or without bond, or to take proceedings in any court of competent
jurisdiction for the appointment of, an agent, a receiver or receiver manager of
the Debtor or the Collateral, including all or any part or parts of the
undertaking and business or businesses of the Debtor, and to remove any agent,
receiver or receiver manager appointed by the Secured Party and to appoint
another in his, her or its stead, (and any person so appointed, whether by the
Secured Party or a court, will be referred to herein as a “Receiver”).


8.3           
  Receiver

                
 Any Receiver will be entitled to exercise any and all rights,
remedies and powers of the Secured Party under the Act as amended from time to
time or any other applicable law or legislation or otherwise existing, whether
under this Agreement or any other agreement or at law or in equity, all of which
other rights, remedies and powers are hereby incorporated as if expressly set
out herein, and in addition will have the right and power (but will not be
obligated):

	 	(a) 	
      Carry on Business: To carry on or concur in
      carrying on all or any part of the business or businesses of the
      Debtor.

	 	 	 
	 	(b) 	
      Employ Agents: To employ and discharge such
      agents, managers, clerks, lawyers, accountants, servants, workmen and
      others upon such terms and with such salaries, wages or remuneration as
      the Receiver may consider appropriate.

	 	 	 
	 	(c) 	
      Raise Funds and Grant Security: To borrow or
      otherwise raise on the security of the Collateral or otherwise any sum or
      sums of money required for the seizure, retaking, repossession, holding,
      insuring, repairing, processing, maintaining, protecting, preparing for
      disposition and disposing of the Collateral, or for the carrying on of all
      or any part of the business or businesses of the Debtor, or to complete
      any construction or repair of lands owned by the Debtor or any part
      thereof, or for any other enforcement of this Agreement, in such sum or
      sums as will in the opinion of the Receiver be sufficient for obtaining
      the amounts from time to time required, and in so doing may issue
      certificates which may be payable either to order or to bearer and may be
      payable at such time or times as the Receiver may consider appropriate and
      may bear interest as stated therein, and the amounts from time to time
      payable by virtue of such certificates will form an Encumbrance in and
      upon the Collateral in priority to the security interest created
  hereby.








- 17 -

	 	(d) 	
      Other Rights: to exercise any or all rights,
      remedies and powers conferred or delegated by the Secured
  Party.



8.4           
  Rights of Transferees

               
  No purchaser, lessee or other transferee pursuant to any
disposition made or purporting to be made pursuant to this Agreement will be
bound or concerned to see or enquire whether an Event of Default has occurred or
continues, or whether any notice required hereunder has been given, or as to the
necessity or expediency of the stipulations subject to which such disposition is
to be made, or otherwise as to the propriety of such disposition or the
regularity of its proceedings, or be affected by notice that no Event of Default
has occurred or continues or that any required notice has not been given or that
the disposition is otherwise unnecessary, improper or irregular, and,
notwithstanding any impropriety or irregularity whatsoever or notice thereof,
the disposition as regards such purchaser, lessee or other transferee will be
deemed to be within the powers conferred by this Agreement and will be valid
accordingly, and the remedy (if any) of the Debtor in respect of any impropriety
or irregularity whatsoever in any such disposition will be in damages only. 

8.5           
  Limitations

                 
Notwithstanding anything herein contained to the contrary: 

	 	(a) 	
      Failure to Exercise: Neither the Secured Party nor
      any Receiver will be liable or accountable for any failure to exercise its
      rights, remedies or powers.

	 	 	 
	 	(b) 	
      Receiver is Debtor’s Agent: The Receiver will be
      deemed the agent of the Debtor and not the agent of the Secured Party, and
      the Debtor shall be solely responsible for the acts and defaults of the
      Receiver and for its remuneration, costs, charges and expenses, and the
      Secured Party will not in any way be responsible for any misconduct,
      negligence or nonfeasance on the part of the Receiver or its servants,
      agents or employees.

	 	 	 
	 	(c) 	
      Receiver’s and Secured Party’s Liability: The
      Receiver will not be liable for any loss unless it is caused by the
      Receiver’s or Secured Party’s own negligence or wilful default,
      respectively.

	 	 	 
	 	(d) 	
      Accountability for Payments Received: Each of the
      Secured Party and any Receiver will only be accountable for and charged
      with any monies they actually receive.

	 	 	 
	 	(e) 	
      Not Liable Under the Collateral: This Agreement
      and the security interests created hereby will not impair or diminish any
      obligation or liability of the Debtor or any other party or parties under
      or in respect of the Collateral, and, except
as may be provided in the Act, no obligation or liability
      under or in respect of the Collateral will be imposed upon or incurred by
      the Secured Party by virtue of this Agreement or the security interest
    created hereby.








- 18 -

	 	(f) 	
      Not a Mortgagee in Possession: Neither the
      provisions of this Agreement nor anything done under or pursuant to the
      rights, remedies and powers conferred upon the Secured Party and the
      Receiver, whether hereunder or otherwise, will render the Secured Party a
      mortgagee in possession.

	 	 	 
	 	(g) 	
      No Duty to Take Steps: Neither the Secured Party
      nor any Receiver will be bound to collect, dispose of, realize, enforce or
      sell any securities, instruments, chattel paper or intangibles (including
      any accounts) comprised in the Collateral or to allow any such Collateral
      to be sold or disposed of, nor will it be responsible for any loss
      occasioned by any such sale or other dealing or for any failure to sell or
      so act, nor will it be responsible for any failure to take necessary steps
      to preserve rights against others in respect of such Collateral nor bound
      to present, protest or give any notice in connection with any such
      Collateral nor to perform any act to prevent prescription thereof nor to
      protect any such Collateral from depreciating in value or becoming
      worthless, nor will it be responsible for any loss occasioned by the
      failure to exercise any rights in respect of such Collateral within the
      time limited for the exercise thereof.

	 	 	 
	 	(h) 	
      No Duty to Keep Property Separate: Neither the
      Secured Party nor the Receiver will be obligated to keep the Collateral
      separate or identifiable.



8.6           
  Liability of Secured Party

	 	(a) 	
      No Responsibility for Debt: The Secured Party will
      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 will manage the Collateral upon
      entry of the business of the Debtor, as herein provided, nor will the
      Secured Party be liable to account as mortgagee in possession or for
      anything except actual receipts or be liable for any loss or realization
      or for any default or omission for which a mortgagee in possession may be
      liable.

	 	 	 
	 	(b) 	
      No Requirement to Perform: The Secured Party will
      not be bound to do, observe or perform or to see to the observance or
      performance by the Debtor of any obligations or covenants imposed upon the
      Debtor nor will the Secured Party, in the case of securities, instruments
      or chattel paper, be obliged to reserve rights against other persons, nor
      will the Secured Party be obliged to keep any of the Collateral
      identifiable.

	 	 	 
	 	(c) 	
      Waiver: The Debtor hereby waives any applicable
      provision of law permitted to be waived by it which imposes higher or
      greater obligations upon the Secured Party other than provided in this
      Agreement.







- 19 -

8.7           
  Application of Proceeds

            
     Any proceeds of any disposition of the
Collateral, any net profits of carrying on all or any part of the business or
businesses of the Debtor, and any proceeds of any other realization will, at the
option of the Secured Party, be held in whole or in part unappropriated in a
separate account (as security for any or all of the Secured Obligations
including such part or parts thereof as may be contingent or not yet due) or be
applied in whole or in part (subject to applicable legislation and the claims of
any creditors ranking in priority to the security interest created hereby): 

	 	(a) 	
      Receiver’s Costs: Firstly, to the payment of all
      costs, charges and expenses of and incidental to the appointment of any
      Receiver and the exercise by the Receiver of any or all of its rights,
      remedies and powers with respect to the Debtor, the Collateral and this
      Agreement, including the remuneration of the Receiver and all amounts
      properly payable by the Receiver together with all legal costs in respect
      thereof on a solicitor and his own client basis.

	 	 	 
	 	(b) 	
      Costs of Repossession and Disposition: Secondly,
      to the payment of all costs, charges and expenses incurred or paid in
      connection with seizing, repossessing, collecting, holding, repairing,
      processing, preparing for disposition and disposing of the Collateral and
      any other expenses of enforcing this Agreement incurred by the Secured
      Party (including legal fees on a solicitor and his own client basis and
      all taxes, costs and charges in respect of the Collateral).

	 	 	 
	 	(c) 	
      Secured Obligations: Thirdly, to the payment of
      the Secured Obligations.

	 	 	 
	 	(d) 	
      Surplus: Fourthly, any surplus will, subject to
      the rights of any other creditors of the Debtor, be paid to the
    Debtor.



8.8           
  Appointment of Attorney

             
    To enable the Secured Party and any Receiver to
exercise the rights, remedies and powers conferred upon them, whether by this
Agreement (and specifically, including, without limitation, any actions
contemplated by Section 6.1 and 8.1) or otherwise, upon the occurrence and
during the continuance of an Event of Default the Debtor hereby appoints each of
the Secured Party and the Receiver, whoever they may be to be the lawful
attorney of the Debtor to do any act or thing and to execute any assurance or
instrument (in the name of the Debtor or otherwise) in the exercise of the
powers conferred upon them (including carrying out any disposition of the
Collateral and for such purpose to affix the Debtor common seal to any deeds,
transfers, conveyances, assignments, assurances and things which the Debtor
ought to execute to complete any disposition of the Collateral or alternatively
to execute the same under its own seal by conveying in the name of and on behalf
of Debtor and under its own seal, and any deed or other thing executed by the
Secured Party or the Receiver under its own seal pursuant hereto will have the
same effect as if it were under the common seal of the Debtor) or which the
Debtor ought to do or execute hereunder and to exercise any or all of the
rights, remedies and powers of the Debtor in carrying out or attempting to carry
out any or all of the rights, remedies and powers conferred upon them. This
power of attorney will be irrevocable and coupled with an interest and will
survive the death, disability, insolvency or other legal incapacity of the
Debtor. 




- 20 -

8.9           
  Rights Cumulative

             
    All rights, remedies and powers of the Secured
Party and any Receiver set out in this Agreement are cumulative. No right,
remedy or power set out herein is intended to be exclusive but each will be in
addition to every other right, remedy and power contained herein or in any other
existing or future agreement or now or hereafter existing by statute, at law or
in equity. 

8.10           Order
  of Realization

              
   The Secured Party may realize upon the security
interest created hereby and any other Encumbrances it may now or hereafter have
in such order as it may consider appropriate, and any such realization by any
means upon any such Encumbrance will not bar realization upon any other
Encumbrance(s). 

8.11           Waiver

            
     The Secured Party in its absolute
discretion may at any time and from time to time by written notice waive any
breach by the Debtor of any of its covenants or agreements herein. No course of
dealing between the Debtor and the Secured Party will operate as a waiver of any
of the Secured Party’s rights, remedies or powers. No failure or delay on the
part of the Secured Party to exercise any right, remedy or power given herein or
by any other existing or future agreement or now or hereafter existing by
statute, at law or in equity will operate as a waiver thereof, nor will any
single or partial exercise of any such right, remedy or power preclude any other
exercise thereof or the exercise of any other such right, remedy or power, nor
will any waiver by the Secured Party be deemed to be a waiver of any subsequent,
similar or other event. 

ARTICLE 9 

  MISCELLANEOUS

9.1           
   Costs

            
     The Debtor shall reimburse the Secured
Party on demand for all interest, commissions, costs of realization and other
costs and expenses (including the full amount of all legal fees and expenses
paid by the Secured Party) incurred by the Secured Party or any Receiver in
connection with: 

	 	(a) 	
      the enforcement of and advice with respect to this
      Agreement;

	 	 	 
	 	(b) 	
      the realization, disposition of, retention, protection,
      insuring or collection of any Collateral; and

	 	 	 
	 	(c) 	
      the protection or enforcement of the rights, remedies and
      powers of the Secured Party or any Receiver.



              
   All amounts for which the Debtor required hereunder
to reimburse the Secured Party or any Receiver will, from the date of
disbursement until the date the Secured Party or the Receiver receives
reimbursement, be deemed advanced to the Debtor by the Secured Party, will be
deemed to be Secured Obligations and will bear interest at the highest rate per
annum charged by the Secured Party on any of the other Secured Obligations. 




- 21 -

9.2           
  No Merger

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

9.3           
  No Obligation to Make Advances

            
     Nothing herein will obligate the Secured
Party to make any advance or loan or further advance or extend credit to the
Debtor. 

9.4           
  Set-Off or Counterclaim

             
    The obligation of the Debtor to make all
payments comprising part of the Secured Obligations is absolute and
unconditional and will not be affected by: 

	 	(a) 	
      any circumstance, including any set-off, compensation,
      counterclaim, recoupment, defence or other right which the Debtor may now
      or hereafter have against the Secured Party or any one or more others for
      any reason whatsoever; or

	 	 	 
	 	(b) 	
      any insolvency, bankruptcy, reorganization or similar
      proceedings by or against the Debtor.



9.5           
  Statutory Waiver

            
     To the fullest extent permitted by law,
the Debtor waives all of the rights, benefits and protection given by the
provisions of any existing or future statute which imposes limitations upon the
rights, remedies or powers of a Secured Party or upon the methods of realization
of security, including any seize or sue or anti-deficiency statute or any
similar provisions of any other statute. 

9.6           
  Assignment

            
     The Secured Party may, without further
notice to the Debtor, at any time assign, transfer or grant a security interest
in this Agreement and the security interests granted hereby. The Debtor
expressly agrees that the assignee, transferee or secured party, as the case may
be, will have all of the Secured Party’s rights and remedies under this
Agreement and the Debtor shall not assert any defence, counterclaim, right of
set-off or otherwise any claim which it now has or hereafter acquires against
the Secured Party in any action commenced by such assignee, transferee or
secured party, as the case may be, and will pay the Secured Obligations to the
assignee, transferee or secured party, as the case may be, as the Secured
Obligations become due. The Debtor shall not assign this Agreement or any of its
rights or benefits hereunder without the express written consent of the Secured
Party first had and obtained. 

9.7           
  Provisions Reasonable

             
    The Debtor acknowledges that the provisions of
this Agreement and, in particular, those respecting rights, remedies and powers
of the Secured Party and any Receiver against the Debtor, its business and any Collateral upon an Event of
Default, are commercially reasonable and not manifestly unreasonable.  




- 22 -

9.8        
      Release by Debtor

             
    The Debtor releases and discharges the Secured
Party and the Receiver from every claim of every nature, whether sounding in
damages or not, which may arise or be caused to the Debtor or any person
claiming through or under the Debtor by reason or as a result of anything done
by the Secured Party or any successor or assign claiming through or under the
Secured Party or the Receiver under the provisions of this Agreement unless such
claim be the result of dishonesty or gross neglect. 

9.9           
   Indemnity

             
    The Debtor shall indemnify and save the Secured
Party from any and all costs, expenses, liabilities and damages which may be
incurred by the Secured Party in connection with the Collateral and the
enforcement of its rights hereunder, save only any costs, expenses, liabilities
or damages resulting from any gross neglect or wilful misconduct by the Secured
Party or its servants or agents. 

9.10          
  Information to third parties

              
   The Secured Party will not be obliged to inquire into
the right of any Person purporting to be entitled under the Act to information
and materials from the Secured Party by making a demand upon the Secured Party
for such information and materials and the Secured Party will be entitled to
comply with such demand and will not be liable for having complied with such
demand notwithstanding that such Person may in fact not be entitled to make such
demand. 

9.11          
  Further Assurances

            
     The Debtor shall at all times, do,
execute, acknowledge and deliver or cause to be done, executed, acknowledged or
delivered all such further acts, deeds, transfers, assignments, security
agreements and assurances as the Secured Party may reasonably require in order
to give effect to the provisions hereof and for the better granting,
transferring, assigning, charging, setting over, assuring, confirming or
perfecting the security interests hereby created and the priority accorded to
them by law or under this Agreement. At the request of Secured Party, Debtor
shall execute and deliver any further documents that will create, grant and
perfect a security interest in any assets of the Debtor, including, without
limitation, real property, that are not covered by this Agreement. 

9.12          
  Notices

            
     Any notice, demand or other document to
be given, or any delivery to be made hereunder shall be effective if in writing
and delivered in person and left with, or if faxed and confirmed by prepaid
registered letter addressed to the attention of: 




- 23 -

	 	(a) 	
      in the case of the Secured Party, addressed as
      follows:

	 	 	 
	 		
      MAVERICK MINERALS CORPORATION

	 		
      2501 Lansdowne Avenue 
Saskatoon, SK S7J 1H3

	 	 	 
	 	(b) 	
      in the case of the Debtor, addressed as
follows:

	 	 	 
	 		
      ART BROKERAGE, INC.

	 		
      2245 N. Green Valley Pkwy, Ste. 429 
Henderson, Nevada
      89014

	 	 	 
	 		
      With a copy (which copy shall not constitute notice)
      to:

	 	 	 
	 		
      Holland & Hart LLP,

	 		
      5441 Kietzke Lane, Second Floor, R
eno, NV 89511,
      
Attention: David A. Garcia, 
Fax: (775) 786-6179, 
Email:
      dgarcia@hollandhart.com



            
     Any notice, demand or other document or
delivery so given or made will be deemed to have been given or made and received
at the time of delivery in person or on the business day next following the date
of faxing of the same. Any party hereto may from time to time by notice in
writing change his or its address (or in the case of a corporate party, the
designated recipient) for the purposes of this section.

9.13           Discharge

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

9.14          
  Delivery of Copy/Waiver

              
   The Debtor acknowledges receiving a copy of this
Agreement. The Debtor waives all rights to receive from the Secured Party a copy
of any financing statement, financing change statement or verification statement
filed at any time in respect of this Agreement. 

ARTICLE 10 

  INTERPRETATION

10.1          
  Amendment

          
       Any amendment of this Agreement
shall not be binding unless in writing and signed by the Secured Party and the
Debtor. 




- 24 -

10.2          Headings

          
       All headings and titles in this
Agreement are for reference only and are not to be used in the interpretation of
the terms hereof. 

10.3         
  Hereof, Etc.

              
  All references in this Agreement to the words
“hereof”, “herein” or “hereunder” will be construed to mean
and refer to this Agreement as a whole and will not be construed to refer only
to a specific Article, Section, paragraph or clause of this Agreement unless the
context clearly requires such construction. 

10.4         
  Joint and Several Liability

             
   If any party hereto is comprised of more than one
Person the assignments, security interests and other charges constituted hereby
and the representations, warranties, covenants, agreements, obligations and
liabilities made by or imposed upon that party herein or by law will be deemed
to have been made or incurred by all those Persons jointly and by each of those
Persons severally. 

10.5          Severability

             
   If any of the terms of this Agreement are or are held
to be unenforceable or otherwise invalid, such holding will not in any way
affect the enforceability or validity of the remaining terms of this Agreement.


10.6         
  Governing Law

               
 This Agreement will be governed by and construed in accordance
with the laws of the State of Nevada, and each party hereby submits to the
jurisdiction of the courts of the State of Nevada provided that the foregoing
will in no way limit the right of the Secured Party to commence suits, actions
or proceedings based on this Agreement in any other jurisdiction. 

10.7         
  Interpretation

             
   Wherever the singular or masculine gender is used
throughout this Agreement the same will be construed as meaning the plural or
the feminine or the body corporate or politic where the context or the parties
hereto so require. 

10.8         
  Capacity

             
   If the Collateral or any portion thereof or any
interest therein is held by the Debtor as a partner of a firm, as a trustee, as
an agent, or in any other similar capacity, whether fiduciary or otherwise: 

	 	(a) 	
      each and every warranty, representation, covenant,
      agreement, term, condition, provision and stipulation; and

	 	 	 
	 	(b) 	
      each and every Security Interest and other charge created
      hereby,







- 25 -

made by or imposed upon the Debtor hereunder will be and be
deemed to be jointly and severally made by or imposed upon the Debtor and the
partnership, the beneficiary or beneficiaries of the trust, the principal(s) of
the agent, or other entity or entities, as the case may be, and each Security
Interest and other charge contained in this Agreement will be deemed to create a
Security Interest in (and if applicable, floating charge over) the estate,
right, title and interest of the partnership, the beneficiary or beneficiaries,
the principal(s), or such entity or entities, as the case may be, in and to the
Collateral (or in the case of a floating charge, real property or interests
therein) as well as being a Security Interest in (or a floating charge over) the
estate, interest and title of the Debtor in and to the Collateral (or in the
case of a floating charge, its real property or interests therein), it being the
intention of the parties hereto that this Agreement will create a Security
Interest in (or a floating charge over) both the legal and beneficial title to
the Collateral (or the applicable real property or interests therein). 

10.9          Binding
  Effect

           
     This Agreement shall be binding on the
Debtor and its heirs, executors, personal representatives, successors and
permitted assigns and shall enure to the benefit of the Secured Party and its
successors and assigns. 

10.10        Entire
  Agreement

           
     The Secured Party has made no
representations, warranties, covenants or acknowledgements affecting any
Collateral, other than as expressly set out herein in writing and in Other
Document executed by the Secured Party. 

10.11        Legal
  Representation

           
     It is understood and agreed by the
parties hereto that Clark Wilson LLP acts only for the Debtor and that the
Secured Party is in no way relying upon Clark Wilson LLP for legal advice in
this matter. The Secured Party acknowledges that it has been advised to obtain
independent legal advice in connection with this Agreement prior to the
execution and delivery hereof and prior to the execution and delivery of any
related documents. 

[signature page follows]




- 26 -

                
EXECUTED by the Debtor as of the day, month and year set forth below.

MAVERICK MINERALS CORPORATION 


Per:  /s/ Robert Kinloch   

            Authorized
Signatory

 


 

Agreed and Accepted: 

ART BROKERAGE, INC.




Per:    /s/ Donna Rose    

            Authorized
Signatory





- 27 -

This is page 27 to a “GENERAL SECURITY AGREEMENT”
dated for reference September __, 2010 and made by MAVERICK MINERALS
CORPORATION in connection with a loan not exceeding $2,400,000 to ART
BROKERAGE, INC.




SCHEDULE “A” 

  PERMITTED ENCUMBRANCES 

None 

SCHEDULE “B” 

  SERIAL NUMBERED GOODS 


	TYPE 	SERIAL NUMBER 	MODEL NUMBER 	YEAR 
	N/A 	  	  	  



LOCATIONS IN BC WHERE COLLATERAL MAINTAINED 

None 

JURISDICTIONS (OTHER THAN B.C.) AND LOCATION OF COLLATERAL



	JURISDICTIONS: 	LOCATIONS: 
	Nevada 	  
	Texas 	  



CHIEF EXECUTIVE OFFICE 

2501 Lansdowne Avenue, Saskatoon, SK S7J 1H3 

OTHER NAMES 

Nil 

OTHER PERSONS WITH RIGHTS IN COLLATERAL 

Nil 

INTELLECTUAL PROPERTY APPLICATIONS

  AND REGISTRATIONS / TRADE MARK AND INDUSTRIAL DESIGNS 

Nil 






	DATED FOR
      REFERENCE: September 20, 2010 

	
BETWEEN: 
	
MAVERICK MINERALS CORPORATION 
	
AND: 
	
ART
      BROKERAGE, INC. 

	
      
GENERAL SECURITY AGREEMENT 
MAVERICK MINERALS
      CORPORATION