Document:

EXHIBIT 10.27

                                 LOAN AGREEMENT

     THIS LOAN AGREEMENT  dated for reference the 24th day of July, 2001 between
Infowave  Software,  Inc., a company validly  existing under the laws of British
Columbia,  as borrower and Thomas Koll, a businessman  having an office at Suite
200, 4664 Lougheed Highway,  Burnaby, BC, V5C 5T5 (facsimile (604) 473-3799), as
lender.

     WHEREAS the Borrower has  requested a loan from the Lender in the principal
amount of U.S.  $5,000,000  and the Lender has agreed to make the loan available
on the terms and conditions herein;

     NOW  THEREFORE  THIS  AGREEMENT  WITNESSES  that, in  consideration  of the
covenants  and  agreements  contained  herein,  and each party  intending  to be
legally bound hereby, the parties hereto hereby represent, warrant, covenant and
agree as follows:

                                   ARTICLE 1
                                   Definitions

     Section 1.1 Defined Terms and Expressions. In this Agreement, the following
terms have the meanings set forth after each:

     "Borrower"  means  Infowave  Software,  Inc.,  its successors and permitted
assigns;

     "Business Day" means any day of the year,  other than  Saturday,  Sunday or
other  day on which  banks  are  required  or  authorized  to close  banking  in
Vancouver, British Columbia or Seattle, Washington;

     "Credit Facility" means the loan in the principal amount of U.S. $5,000,000
made or to be made by the Lender to the Borrower pursuant to section 2.1;

     "Event of Default" has the meaning assigned to that term in section 7.1;

     "Financial  Statements" means the financial  statements of the Borrower and
all other financial statements and information  delivered to the Lender pursuant
to this Agreement or any of the Security Instruments;

     "GAAP" has the meaning assigned to that term in section 5.1(c);

     "General Security  Agreement" means the general security  agreement made by
the  Borrower in favour of the Lender  pursuant to section 3.1, as same may from
time to time be modified, supplemented, amended and in effect;

     "Indebtedness",  in respect of the Borrower,  includes all amounts borrowed
by the Borrower (whether secured or unsecured) and all other debts,  guarantees,
indemnities,  obligations, judgments and liabilities of the Borrower heretofore,
now or hereafter made, incurred or created;

     "Priority Agreement", means a priority agreement between the Lender and The
Toronto-Dominion  Bank in form and substance  satisfactory to the Lender and its
legal counsel;

     "Intellectual  Property"  means,  at any  time,  any and  all  intellectual
property  now owned or in the future  owned or  acquired  by a Person in which a
Person has rights, including, without limitation, all

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trademarks,  copyrights,  copyright  applications and registrations,  waivers of
moral rights, patents,  patent applications,  industrial design applications and
registrations,   inventions,  recipes,  formulae,  technology,  know-how,  trade
secrets,  data bases,  methods of doing business,  technical processes or rights
therein or related  thereto and all licenses or other Consents  related  thereto
and all goodwill  associated  with any of the  foregoing  together  with (i) any
trade names,  trade marks,  corporate  names,  company  names,  business  names,
fictitious  business names, trade styles,  service marks,  logos,  design marks,
certification  marks,   distinguishing  guises  and  other  source  or  business
identifiers,  and the goodwill associated therewith,  (ii) any registrations and
recordings  thereof,  and all  applications in connection  therewith,  (iii) any
extensions,  renewals and continuations  thereof, and (iv) any rights to sue for
past, present or future  infringements of, dilution or depreciation of value to,
passing off of or injury to, or loss of distinctiveness of, any thereof`;

     "Judgment Currency" has the meaning assigned to that term in section 8.15;

     "Lender"   means  Thomas  Koll,  his  heirs,   executors,   administrators,
successors and assigns;

     "Lien" means any mortgage,  pledge, lien, hypothecation,  security interest
or other  encumbrance or charge (whether fixed,  floating or otherwise) or title
retention, any right of set-off (arising otherwise than by operation of law) and
any deposit of monies under any agreement or arrangement whereby such monies may
be withdrawn  only upon  fulfillment of any condition as to the discharge of any
other  indebtedness  or other  obligation  to any  creditor,  or any right of or
arrangement of any kind with any creditor to have its claims  satisfied prior to
other creditors with or from the proceeds of any properties,  assets or revenues
of any kind now owned or later acquired;

     "Maturity Date" means the date the Lender demands payment after the earlier
of: (a) January 24, 2002; and (b) October 30, 2001, if Shareholder  Approval has
not been obtained;

     "Original Currency" has the meaning assigned to that term in section 8.15;

     "Permitted Encumbrances" means the Liens, if any, referred to in Schedule A
and other  Liens,  if any,  from time to time  consented  to in  writing  by the
Lender;

     "Person" means any  individual,  corporation,  partnership,  joint venture,
association,   joint-stock  company,  trust,   unincorporated   organization  or
government or any agency or political subdivision thereof;

     "Intellectual  Property Security Agreement" means the intellectual property
security  agreement  made by the  Borrower  in favour of the Lender  pursuant to
section  3.1,  as the  same  may from  time to time be  modified,  supplemented,
amended and in effect;

     "Security  Instruments" means the Intellectual Property Security Agreement,
the General Security  Agreement and any and all other security at any time given
in respect of all or any part of the Credit Facility;

     "Shareholder Approval" has the meaning set forth in the Warrant Agreement;

     "Warrant Agreement" means the warrant agreement made between the Lender and
the Borrower  dated as of the date hereof,  as the same may from time to time be
modified, supplemented or amended and in effect;

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     "Withholding  Taxes" means all amounts which must, by law, be withheld from
amounts  payable to the Lender and remitted to a competent  taxing  authority in
Canada on account of income tax imposed on the Lender on such amounts payable as
a result of the Lender being a non-resident of Canada;

     "Taxes"  means any and all  present  or future  taxes  (including,  without
limitation,  all  Withholding  Taxes,  stamp,  documentary,  excise or  property
taxes),  levies,  imposts,  deductions,  charges or withholdings and liabilities
with respect thereto;

     "Trademarks"  means (i) all trade  marks,  trade  names,  corporate  names,
company names,  business names,  domain names,  fictitious business names, trade
styles, service marks, logos, design marks, certification marks,  distinguishing
guises and other source or business  identifiers,  and the  goodwill  associated
therewith,  (ii) all registrations and recordings thereof,  and all applications
in  connection  therewith,  (iii) all  extensions,  renewals  and  continuations
thereof,  and (iv) all rights to sue for past,  present or future  infringements
of,  dilution or  depreciation of value to, passing off of or injury to, or loss
of distinctiveness of, any thereof; and

     "U.S. $" means United  States  Dollars,  the lawful  currency of the United
States of America.

     Section  1.2  Interpretation.  For  purposes of this  Agreement  (except as
otherwise expressly provided), (i) "this Agreement" means this loan agreement as
it may from time to time be  supplemented  or amended  and in  effect;  (ii) all
references in this Agreement to designated  "section" and other subdivisions are
to the designated  sections and other subdivisions of this Agreement;  (iii) the
words "herein", "hereof' and "hereunder" and other words of similar import refer
to  this  Agreement  as a whole  and  not to any  particular  section  or  other
subdivision;  (iv) the headings are for convenience  only and do not form a part
of this Agreement and are not intended to interpret,  define or limit the scope,
extent or intent of this Agreement or any provision hereof; and (v) the singular
of any term includes the plural,  and vice versa, the use of any term is usually
applicable to any gender and, where applicable,  a body corporate, the word "or"
is not  exclusive  and the word  "including"  is not  limiting  (whether  or not
non-limiting  language (such as "without  limitation" or "but not limited to" or
words of similar  import) is used with  reference  thereto).  All  references to
currency  as used  herein  mean the  lawful  currency  of the  United  States of
America, unless a reference is expressly made to another currency.

     Section 1.3  Schedules.  Schedules A, B and C form an integral part of this
Agreement.

                                   ARTICLE 2
                                   THE CREDIT

     Section 2.1 Terms of the Credit Facility.  The Lender agrees to lend to the
Borrower on or before the Maturity Date, at the request of the Borrower given to
the Lender in writing  three  Business  Days prior to the date of drawdown,  the
aggregate  principal  amount of U.S.  $5,000,000  for  general  working  capital
purposes.

     Section 2.2 Maximum Amount of the Credit Facility. Notwithstanding anything
to the contrary  contained  herein,  at no time shall the aggregate  outstanding
principal  amount of the Credit Facility exceed the amount  specified in section
2.1  hereof  and any  amounts  outstanding  in excess of such  amounts  shall be
immediately paid to the Lender on demand.

     Section 2.3 Interest. The Borrower will pay interest from and including the
date  of  the  advance  of  the  Credit  Facility  on the  amount  advanced  and
outstanding  from time to time,  after as well as before  maturity,  default and
judgment, in accordance with the following provisions:

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     (a)  amounts  outstanding under the Credit Facility will bear interest at a
          rate per annum  which is equal to eight per cent (8%) per annum of the
          principal amount thereof; and

     (b)  interest  will be calculated on the basis of the actual number of days
          elapsed  in a year  of 365 or 366  days,  as the  case  may  be,  with
          interest on overdue  interest  calculated daily at the set forth below
          rate, compounded in arrears monthly and payable on demand.

Notwithstanding the foregoing,  the Borrower shall pay interest on any principal
of or interest on the Credit Facility and on any other amount whatsoever payable
by the Borrower in respect of the Credit  Facility  under this  Agreement or the
Security Instruments which shall not be paid in full when due (whether at stated
maturity or by acceleration,  mandatory prepayment, demand or otherwise) for the
period  commencing  on and  including the due date thereof until same is paid in
full at a rate per annum which is equal to 12% per annum.

     Section 2.4 Warrant  Agreement.  As partial  consideration for the entering
into of this  Agreement,  the  Borrower  shall enter into the Warrant  Agreement
concurrent  with this  Agreement.  The Borrower and the Lender  acknowledge  and
agree that the entering into of the Warrant  Agreement is solely  related to the
entering into of this Agreement. For greater certainty, the entering into of the
Warrant  Agreement  is not  connected  in any way  with the  performance  of any
services by Koll for the Borrower or any of its subsidiaries.

     Section 2.5 Prepayment  and Payment of Credit.  (1) The Borrower will repay
the principal amount of the Credit Facility together with all accrued and unpaid
interest  thereon and all other  amounts  payable  hereunder  in full,  and such
amounts shall become due and owing in full, on the Maturity  Date.  Prior to the
Maturity  Date,  the  Borrower  will have the right at any time and from time to
time to repay the Credit  Facility or any part thereof,  with accrued and unpaid
interest thereon, without notice, premium, bonus or penalty.

     (2) Except as  otherwise  provided  herein,  each payment to be made to the
Lender  hereunder  will be made to the  Lender  at his  office  as  shown on the
signature pages hereof (or at such other place as may be specified by the Lender
by notice in writing  to the  Borrower)  not later  than  12:00 noon  (Vancouver
time), in U.S. $ and freely transferable, immediately available funds on the due
date for  payment  of the same  (whether  or not the full  amount of the  Credit
Facility  has then  been  advanced),  and,  if any  payment  made to the  Lender
hereunder  is made after 12:00 noon  (Vancouver  time) on any day,  such payment
will be deemed to have been made on the immediately  following  Business Day for
purposes of the  calculation  of interest and  interest  will accrue due to such
following Business Day.

     (3) Whenever any payment to be made hereunder is due on a day that is not a
Business Day, such payment will be made on the  immediately  following  Business
Day and interest will accrue due to such following Business Day.

     (3) The Lender will have the right to allocate any and all payments made to
the Lender by the  Borrower  (whether  on account  of any  amounts  owing by the
Borrower hereunder or under any of the Security Instruments or on account of any
other  Indebtedness  of the  Borrower to the Lender) in such  manner,  order and
priority as the Lender in its sole discretion may determine.

     Section 2.6 Taxes.  All payments by the Borrower  under this  Agreement and
the Security  Instruments shall be made free and clear of, and without deduction
or withholding for, Taxes other than Withholding Taxes. If the Borrower shall be
required by law to withhold or remit any Withholding Taxes from or in respect of
any sum payable under this Agreement or the Security Instruments:

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     (a)  the sum payable  shall be  increased as may be necessary so that after
          paying the  Withholding  Taxes  (including any additional  Withholding
          Taxes payable on additional  amounts payable under this section),  the
          Lender  receives a net amount equal to the sum it would have  received
          if no Withholding Taxes had been paid;

     (b)  the  Borrower  shall  remit  such  Withholding  Taxes to the  relevant
          taxation or other authority in accordance with applicable law; and

     (c)  the Borrower shall forthwith  provide the Lender with proof in writing
          of the payment of all Withholding Taxes paid.

     The  Borrower  shall  indemnify  and save  harmless the Lender for the full
amount of Taxes levied by any  jurisdiction in Canada on, or in relation to, any
sum received or receivable  hereunder by the Lender (other than [income] capital
taxes or Withholding Taxes which have been paid by the Borrower).  Payment under
this indemnification shall be made within 30 days from the date the Lender makes
written demand therefor.  A certificate as to the amount of such Taxes submitted
to the  Borrower by the Lender shall be  conclusive  evidence,  absent  manifest
error, of the amount due from the Borrower to the Lender.  Without  prejudice to
the survival of any other agreement or obligation of the Borrower hereunder, the
obligations of the Borrower under this section shall survive the payment in full
of the  outstandings  hereunder  and each of the Credit  Facility  and  interest
thereon.

                                   ARTICLE 3
                                    SECURITY

     Section 3.1 Security. The Credit Facility,  interest thereon, and all other
amounts  from time to time  payable  hereunder  and the due  performance  of the
obligations  and covenants of the Borrower  herein  contained will be secured by
(i) the  Intellectual  Property  Security  Agreement  made and  delivered by the
Borrower to the Lender charging all of the Intellectual Property of the Borrower
in the  form of  Schedule  B and  (ii) a  general  security  agreement  made and
delivered by the Borrower to the Lender granting a security  interest in all the
property, assets and undertaking of the Borrower in the form of Schedule C.

                                   ARTICLE 4
                         REPRESENTATIONS AND WARRANTIES

     Section 4.1  Representations  and  Warranties of the Borrower.  In order to
induce the Lender to enter into this  Agreement  (and the Borrower  acknowledges
that the Lender is relying thereon), the Borrower represents and warrants to the
Lender that:

     (a)  the Borrower is a corporation  duly  incorporated and validly existing
          and in good standing  under the Company Act (British  Columbia) and is
          in good  standing  under the laws of the Province of British  Columbia
          and the  Borrower  has the  capacity  and  power to own and  lease its
          assets and property,  to carry on its business, to execute and deliver
          this  Agreement  and  the  Security  Instruments  being  executed  and
          delivered by it, to comply with the provisions  hereof and thereof and
          to duly  perform  and  observe all of its  obligations  hereunder  and
          thereunder and the entering into and  performance and observance by it
          of  such  obligations  has  been  duly  authorized  by  all  necessary
          partnership action;

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     (b)  this  Agreement  has been duly  executed and delivered by the Borrower
          and constitutes a legal,  valid and binding obligation of the Borrower
          enforceable  in  accordance  with its terms  and each of the  Security
          Instruments,  when delivered to the Lender,  will  constitute a legal,
          valid and binding obligation of the Borrower enforceable in accordance
          with its terms in each case subject to the  qualifications  as set out
          in the opinion of counsel to the  Borrower,  delivered  as at the date
          hereof;

     (c)  there is no law, decree, regulation or similar enactment, no provision
          of the constating  documents of the Borrower or any of any instrument,
          agreement  or other  obligation  by which the  Borrower  or any of its
          respective property,  assets and undertaking is bound and no judgment,
          injunction  or other order or award of any  judicial,  administrative,
          governmental  or other  authority  or  arbitrator  which is or will be
          contravened  as a  result  of  the  execution  and  delivery  of  this
          Agreement or any of the Security  Instruments  or the  performance  or
          observance of any of the  obligations  expressed to be incurred by the
          Borrower in or pursuant hereto or thereto;

     (d)  all  authorizations,  approvals,  licenses,  registrations,  consents,
          exemptions or declarations  required or otherwise appropriate in order
          for the Borrower to own its property and assets, carry on its business
          in all  jurisdictions in which such property and assets are located or
          such  business is carried on and to enter into,  execute,  deliver and
          performs and be legally bound by its  obligations  hereunder and under
          the Security  Instruments  have been duly obtained or effected and are
          in full force and effect;

     (e)  no representation  or warranty by the Borrower  contained herein or in
          any of the  Security  Instruments  contains  any untrue  statement  of
          material fact or omits to state a material fact necessary to make such
          representation   and   warranty  not   misleading   in  light  of  the
          circumstances; and

     (f)  the  Borrower  has good  title  free and clear of all Liens to all its
          property  and assets  other  than  Permitted  Encumbrances  and is the
          registered,  legal and beneficial owner of the Intellectual  Property,
          except for any  licences  granted  therein in the  ordinary  course of
          business.

                                   ARTICLE 5
                                    COVENANTS

     Section 5.1  Borrower's  Positive  Covenants.  The Borrower  covenants  and
agrees with the Lender to:

     (a)  duly  and  punctually  pay or  cause  to be  paid  to the  Lender  the
          principal  amount of the Credit  Facility,  interest  thereon  and all
          other  amounts  from  time to time  payable  hereunder  and  under the
          Security  Instruments,  and to perform  and  observe  all of its other
          obligations  under this Agreement and the Security  Instruments on the
          dates, at the place and in the manner set forth herein;

     (b)  preserve and  maintain  its  corporate  existence,  licenses,  rights,
          franchises and privileges in the  jurisdiction of its organization and
          all authorizations,  consents, approvals, orders, licenses, exemptions
          from or registrations or qualifications with any court or governmental
          department, public body, authority,  commission, board, bureau, agency
          or  instrumentality  that is necessary or  materially  valuable in the
          operation of its business;

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     (c)  promptly  pay and  discharge  all  material  Taxes,  assessments,  and
          governmental  charges or levies  imposed upon the Borrower or upon its
          income and profits, or upon any of its property, before the same shall
          become  delinquent,  as well as all claims for labour,  materials  and
          supplies  which,  if unpaid,  might  become a lien or charge upon such
          properties or any part thereof;  provided,  however, that the Borrower
          shall not be required to pay and discharge  any such tax,  assessment,
          charge,  levy or  claim  so  long as the  validity  thereof  shall  be
          contested in good faith by  appropriate  proceedings  and the Borrower
          shall set aside on its books  adequate  reserves  in  accordance  with
          Canadian  generally  accepted  accounting   principles  ("GAAP")  with
          respect  to any  such  tax,  assessment,  charge,  levy  or  claim  so
          contested;

     (d)  keep adequate  records and books of account  reflecting  all financial
          transactions   in  conformity  with  generally   accepted   accounting
          principles and, when requested so to do,  forthwith make available for
          inspection by duly authorized representatives of the Lender any of its
          books  and  records  and  furnish  the  Lender  with  any  information
          regarding its business affairs and financial condition;

     (e)  upon becoming aware that the same may be threatened or pending, and in
          any case  immediately  after  the  commencement  thereof,  give to the
          Lender  notice in  writing  of all  litigation  or  administrative  or
          arbitration  proceedings before or of any court, tribunal,  arbitrator
          or  governmental  or municipal or other  authority or dispute with any
          governmental  or  municipal  or other  authority  which if  determined
          adversely to the Borrower, might have a material adverse effect on its
          financial conditions or operations;

     (f)  comply  with  the  requirements  of  all  applicable  laws,   decrees,
          regulations  and  similar   enactments  or  orders  of  any  judicial,
          administrative,   governmental   or  other  authority  or  arbitrator,
          non-compliance  with  which  might  materially  adversely  affect  the
          ability of the  Borrower to duly  perform and observe its  obligations
          under this Agreement or any of the Security Instruments;

     (g)  as soon as  practicable  and in any event  within  two days  after the
          occurrence  thereof  notify  the  Lender  forthwith  in writing of any
          occurrence of an Event of Default or any event which,  with the giving
          of notice or lapse. of time or otherwise, might constitute an Event of
          Default or of any failure by the Borrower  duly to perform and observe
          any of its respective  obligations  under this Agreement or any of the
          Security  Instruments,  and at the same time  inform the Lender of any
          action  taken or  proposed to be taken by the  Borrower in  connection
          therewith;

     (h)  at any time and from  time to time  upon the  written  request  of the
          Lender, execute and deliver such further documents and do such further
          acts and  things as the  Lender  may  reasonably  request  in order to
          effect  the  purposes  of  this  Agreement  or  any  of  the  Security
          Instruments.

     Section 5.2  Borrower's  Negative  Covenants.  The Borrower  covenants  and
agrees with the Lender that it will not, with the prior  written  consent of the
Lender (such consent not to be unreasonably withheld):

     (a)  incur or create any secured Indebtedness in excess of U.S. $100,000 or
          any Liens on the collateral charged by the Security  Instruments other
          than Permitted Encumbrances;

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                                      -8-

     (b)  liquidateor  dissolve,  consolidate  with, or merge into or with,  any
          corporation  or entity as a result  of which the  shareholders  of the
          Borrower  prior to such  transaction  will not hold a majority  of the
          outstanding  voting shares of the  surviving or combined  entity after
          such  transaction  unless this Credit Facility is repaid in full prior
          to  or  in  connection   with  such   transaction,   except  that  any
          wholly-owned subsidiary may merge with another wholly-owned subsidiary
          or with  the  Borrower  (so  long  as the  Borrower  is the  surviving
          corporation and no Event of Default shall occur as a result thereof);

     (c)  sell,  transfer,  lease or  otherwise  dispose  of, or grant  options,
          warrants or other rights with respect to, all or a substantial part of
          its  properties  or assets to any Person or entity  unless this Credit
          Facility  is  repaid  in full  prior  to or in  connection  with  such
          transaction;   provided  that  this  clause  shall  not  restrict  any
          disposition  made in the ordinary course of business and consisting of
          capital goods which are obsolete or have no remaining  useful life; or
          finished goods inventories;

     Section 5.3 Lender Covenant to Subscribers.  In the event: (a) the Borrower
completes an equity  financing of a minimum of US$4,000,000 on or before January
24, 2002 (the  "Equity  Financing"),  and (b) the  Shareholder  Approval for the
exercise of rights under the Warrant  Agreement  has been  obtained,  the Lender
agrees  to  subscribe  for  US$1,000,000  of  securities  as part of the  Equity
Financing (provided that the Lender acknowledges and agrees that under the rules
and policies of the Toronto  Stock  Exchange the Lender shall not be entitled to
any  "discount"  from the market  price for the  purposes  of the pricing of the
Securities under the Equity Financing.

                                   ARTICLE 6
                              CONDITIONS PRECEDENT

     Section 6.1 Conditions Precedent.  The Lender will not be obligated to make
any advance of the Credit Facility unless:

     (a)  the  Borrower  shall have  executed  and  delivered  to the Lender the
          Security  Instruments  and all other  documents  required by the terms
          hereof to be executed  and  delivered by it and each of the same shall
          be in full force and effect;

     (b)  the Borrower shall have obtained and delivered  Priority Agreement and
          the same shall be in full force and effect;

     (c)  the  Security  Instruments  and any  financing  statements  in respect
          thereof shall have been filed, registered,  entered or recorded in all
          offices of public record necessary or desirable to preserve or protect
          the security  created  thereby to the extent required by the Lender in
          its sole discretion;

     (d)  all legal matters incidental to the form,  substance and effectiveness
          of this Agreement and the Security Instruments and all other documents
          executed and delivered  pursuant  hereto shall be  satisfactory to the
          Lender and its counsel;

     (e)  no  representation  or warranty made by the Borrower in or pursuant to
          this  Agreement or any of the Security  Instruments  or in any notice,
          certificate, instrument or statement contemplated hereby or thereby is
          untrue or incorrect in any material respect; and

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                                      -9-

     (f)  no event shall have occurred and be continuing  which  constitutes  an
          Event of  Default  or with the  giving  of  notice of lapse of time or
          otherwise would constitute an Event of Default.

     Section  6.2   Discretion  of  Lender  to  Advance.   Notwithstanding   the
non-fulfillment of any condition precedent as set out in section 6.1, the Lender
may make the Credit  Facility  available or make such advance if the Lender,  in
its sole  discretion,  determines same to be advisable.  The making available of
the Credit Facility or any advance thereof by the Lender, either before or after
the  fulfillment of all conditions  precedent to the obligation of the Lender to
make the Credit Facility available or make such advance,  will not constitute an
approval, acceptance or waiver by the Lender of any condition precedent or Event
of Default.

                                   ARTICLE 7
                                EVENTS OF DEFAULT

     Section 7.1 Events of Default.  Each of the following events constitutes an
"Event of Default" under this Agreement:

     (a)  the Borrower failing to pay to the Lender when due principal, interest
          or any amount  payable by the Borrower to the Lender in respect of the
          Credit  Facility or  otherwise  payable by the  Borrower to the Lender
          hereunder  or  pursuant  hereto  or  under or  pursuant  to any of the
          Security  Instruments  (whether on account of  principal,  interest or
          otherwise) and such failure shall continue for three days;

     (b)  the  Borrower  committing  a breach of, or  defaulting  in the due and
          prompt   performance  or  observance  of,  any  of  its  covenants  or
          obligations  pursuant  to  this  Agreement  or  any  of  the  Security
          Instruments,  and,  in the case of a breach  other than one  involving
          payment,  such breach  continues for 3 days following  notice from the
          Lender,  or the  occurrence of any event which  entitles,  or with the
          giving of notice or lapse of time otherwise would entitle,  the Lender
          to accelerate any indebtedness, liability or obligation secured by any
          of the Security Instruments pursuant to the provisions thereof;

     (c)  any  representation or warranty made by the Borrower in or pursuant to
          this  Agreement or any of the Security  Instruments  or in any notice,
          certificate,  instrument or statement  contemplated  hereby or thereby
          being or proving to be untrue or incorrect in any material  respect as
          of the date on which such representation or warranty is made;

     (d)  any Lien on the whole or any  substantial  part of the  undertaking or
          assets of the Borrower becoming  enforceable and the Person or Persons
          entitled to the benefit thereof taking steps to enforce such Lien;

     (e)  any  execution,  extent or  sequestration  or any other process of any
          court  becoming  enforceable  against  the  Borrower  or a distress or
          analogous  process being levied upon any part of the property,  assets
          and  undertaking of the Borrower unless the Borrower gives security to
          the  Lender in such  form,  substance  and amount as the Lender in its
          sole  discretion may require,  and the Borrower in good faith disputes
          such process or appeals the  judgment  giving rise to such process and
          thereafter,  in the opinion of the  Lender,  the  Borrower  diligently
          thereafter prosecutes such dispute or appeal;

<PAGE>

                                      -10-

     (f)  the Borrower  carrying on a business  which its  constating  documents
          prohibits it from carrying on, or ceasing or  threatening  to cease to
          carry on business as a going concern,  or a resolution being passed, a
          petition  being  filed or an  order  being  made for the  dissolution,
          liquidation or winding-up of the Borrower or any other event occurring
          which  under   applicable   law  could  result  in  the   dissolution,
          liquidation or winding-up of the Borrower;

     (g)  the Borrower becoming insolvent, admitting in writing its inability to
          pay its debts as they  become  due or  committing  or  threatening  to
          commit an act of bankruptcy; the Borrower making an assignment for the
          benefit  of  creditors,   a  proposal  or  similar  action  under  the
          Bankruptcy and Insolvency  Act, the Companies'  Creditors  Arrangement
          Act or any similar  legislation,  or commencing any other  proceedings
          relating to it under any reorganization,  arrangement, readjustment of
          debt,  dissolution or liquidation  law or statute of any  jurisdiction
          whether  now or  hereafter  in  effect,  or by any act  indicates  its
          consent to, approval of, or acquiescence in, any such proceeding; or a
          bankruptcy  petition being filed or presented  against the Borrower or
          the Borrower being declared bankrupt;

     (h)  a   custodian,    liquidator,    receiver,   receiver   and   manager,
          receiver-manager,  trustee or any other  Person  with  similar  powers
          being  appointed  for the  Borrower  or any  property or assets of the
          Borrower;

     (i)  any action or proceeding  of or before any  judicial,  administrative,
          governmental or other authority or arbitrator  being commenced and not
          stayed or discharged within 30 days after it is commenced to enjoin or
          restrain the performance or observance by the Borrower of the terms of
          this Agreement or the Security Instruments,  to question in any manner
          the right or power of the Borrower to enter into,  exercise its rights
          under or perform or observe  the terms or  conditions,  or to question
          the legality,  validity,  binding nature or enforceability,  hereof or
          thereof;

     (j)  the due and prompt performance or observance of any of the obligations
          of the  Borrower  in or pursuant  to this  Agreement  or either of the
          Security  Instruments being or proving to be unlawful or impossible in
          any material respect for the Borrower;

     (k)  any or all of the  obligations  of the Borrower in or pursuant to this
          Agreement   or  any  of  the  Security   Instruments   being  void  or
          unenforceable or this Agreement or any of the Security  Instruments in
          any material respect ceasing to be in full force and effect;

     (l)  any  indebtedness  of the Borrower,  other than due the Lender,  in an
          aggregate principal amount exceeding $50,000 shall be duly declared to
          be or  shall  become  due and  payable  prior to the  stated  maturity
          thereof.

     (m)  the Lender in good faith has  reasonable  grounds to believe  that the
          prospect of payment or performance of any other  obligation under this
          Agreement  or the Security  Instrument  is impaired or that any of the
          Collateral (as defined in either of the Security Instruments) is or is
          about to be placed in jeopardy.

     Section 7.2 Lender's Remedies. Except as set out below, upon the occurrence
and during the  continuance of any Event of Default the Lender may, by notice in
writing (i) terminate the  obligation of the Lender to make the Credit  Facility
available or make any further  advance  thereunder;  and (ii) declare the Credit
Facility,  all accrued and unpaid interest thereon and all other amounts payable
under this

<PAGE>

                                      -11-

Agreement  and the  Security  Instruments  to be  immediately  due and  payable,
whereupon  the same shall become and be  immediately  due and  payable,  without
protest,  presentment,  demand or further  notice of any kind,  all of which are
expressly  waived by the Borrower,  and the Lender,  without notice to or demand
upon the Borrower,  which are expressly  waived by the Borrower,  may proceed to
protect,  exercise and enforce its rights and remedies  under this Agreement and
the Security  Instruments  and such other rights and remedies as are provided by
law or by equity or by statute. If any Event of Default described in section 7.1
(e),  (f),  (g) or (h) hereof shall occur for any reason,  whether  voluntary or
involuntary,  and be  continuing,  the Credit  Facility,  all accrued and unpaid
interest and all other amounts  payable under this Agreement shall be and become
immediately due and payable, without further notice, demand, or presentment.

     Section 7.3 Reinstatement.  To the extent that the Borrower makes a payment
or payments to the Lender,  and such payment or payments or any part thereof are
subsequently for any reason invalidated,  set aside and/or required to be repaid
to a trustee,  receiver  or any other  party under any  bankruptcy  law,  state,
provincial or federal law, common law or equitable cause,  then to the extent of
such  recovery,  the  obligation  or  part  thereof  originally  intended  to be
satisfied,  and all rights and remedies therefor, shall be revived and continued
in  full  force  and  effect  as if  such  payment  had  not  been  made or such
enforcement or setoff had not occurred.

                                   ARTICLE 8
                                  MISCELLANEOUS

     Section 8.1 Lender May Perform. If the Borrower fails to perform any of its
obligations under this Agreement or any of the Security Instruments,  the Lender
may, but is not obligated  to,  perform any or all of such  obligations  and all
costs, charges,  expenses, fees and outlays incurred by the Lender in connection
with such performance  will be payable by the Borrower to the Lender,  forthwith
without  demand by the Lender,  with interest  thereon from the date incurred by
the Lender at the rate per annum equal to 12% per annum  calculated and payable,
and bearing interest on overdue interest, in the same manner,  mutatis mutandis,
as interest on the Credit Facility as provided in section 2.3.

     Section 8.2 Borrower To Pay Fees. All  statements,  reports,  certificates,
opinions  and other  documents  or  information  required to be furnished to the
Lender by the Borrower under this Agreement and the Security Instruments will be
supplied without cost to the Lender. Furthermore,  the Borrower hereby agrees to
pay  promptly  to the  Lender on demand  the  amount of  US$50,000  to cover the
Lender's  out-of-pocket  expenses  (including  legal (on a solicitor and his own
client basis) and similar fees)  incurred from time to time in the  preparation,
negotiation,  documentation,  execution,  registration  and  operation  of  this
Agreement and the Security  Instruments and in the enforcement and  preservation
of the  Lender's  rights and  remedies  under this  Agreement  and the  Security
Instruments,  with interest  thereon from the date incurred by the Lender at the
rate per annum  equal to 12% per  annum  calculated  and  payable,  and  bearing
interest on overdue interest, in the same manner,  mutatis mutandis, as interest
on the Credit Facility.

     Section 8.3 Waiver;  No Preclusion of Rights.  No amendment,  modification,
supplement,  termination  or waiver of any provision of this Agreement or any of
the Security Instruments,  and no approval, consent or permission to be given by
the Lender hereunder or under any of the Security  Instruments will be effective
unless in writing  signed by the Lender and then only in the  specific  instance
and for the  specific  purpose  given  and the  Lender  will and does  have sole
discretion as to the exercise of any such approval, consent or permission and to
the mode of and time for  exercise  thereof  and, in the  absence of fraud,  the
Lender  will  be  in  no  way  responsible  for  any  loss,  costs,  damages  or
inconvenience  that may result from the  exercise or  non-exercise  thereof.  No
failure or delay on the part of the Lender in

<PAGE>

                                      -12-

exercising  any right,  power or  privilege  under this  Agreement or any of the
Security  Instruments  will operate as a waiver thereof and no single or partial
exercise of any right, power or privilege  hereunder or thereunder will preclude
any other or further exercise thereof or the exercise of any other right,  power
or privilege and  performance by the Lender pursuant to section 8.1 or otherwise
of any obligation of the Borrower will not constitute a waiver thereof.

     Section 8.4 Rights and Remedies Cumulative. The rights and remedies in this
Agreement and the Security  Instruments  expressly  specified are cumulative and
not exclusive of any rights or remedies which the Lender would  otherwise  have;
nor will the acceptance by the Lender of any further  security or of any payment
of or on account of the Credit  Facility,  interest  thereon or any other amount
payable under this Agreement or any of the Security Instruments maturing after a
default or of any payment on account of any past  default be  construed  to be a
waiver of any  right to take  advantage  of any  future  default  or of any past
default  not  completely  cured  thereby  and the Lender  may also,  in its sole
discretion,  exercise  any  and  all  rights,  powers,  remedies  and  recourses
available to it under this Agreement or any of the Security Instruments,  or any
other remedy  available to it, and such rights,  powers,  remedies and recourses
may be  exercised  concurrently  or  individually  without the  necessity of any
election.

     Section 8.5 Full Discharge of Security Instruments. The Lender will execute
and deliver or cause to be executed and delivered all  instruments  necessary to
discharge  the  security  created by the Security  Instruments  upon the written
request  of the  Borrower  and (i)  payment  in full to the Lender of the Credit
Facility,   interest  thereon,  and  all  other  amounts  payable  hereunder  or
thereunder;  and  (ii)  termination  of the  obligation  of the  Lender  to make
available the Credit Facility or any further advance thereunder.

     Section 8.6 No Other Person  Beneficiary.  The provisions hereof are solely
and  exclusively  for the  benefit  of the  Lender  and the  Borrower  and their
respective heirs, executors, administrators, successors and assigns and no other
Person  will,  under any  circumstances,  be or be  deemed  to be a  beneficiary
thereof.

     Section  8.7 Notice.  Any  notice,  demand,  request,  consent,  agreement,
approval or disapproval  which may or is required to be given hereunder shall be
made in writing and shall be considered given when delivered  personally or sent
by facsimile (with a copy by any means permitted for the giving of notices under
this Agreement),  or one day after delivery by a reputable overnight courier, to
the parties at the addresses set forth on the signature pages hereof (or at such
other address as a party may specify by notice similarly given).

     Section 8.8 Further Assurances. The Borrower agrees to do such further acts
and  things and to  execute  and  deliver  to the  Lender  such  further  deeds,
instruments,  powers and other documents as the Lender,  acting reasonably,  may
from time to time require or deem advisable to carry into effect the purposes of
this Agreement and the Security Instruments or to better assure and confirm unto
the Lender its rights, powers and remedies hereunder and thereunder.

     Section  8.9  Successors  and  Assigns.  This  Agreement  and the  Security
Instruments  will be binding  upon and enure to the benefit of the  Borrower and
the Lender, and their respective heirs,  executors,  administrators,  successors
and  assigns;  provided  that the  Borrower  may not assign any of its rights or
interests hereunder or thereunder.

     Section 8.10 Severability. If any provision of this Agreement or any of the
Security  Instruments or any part hereof or thereof is found or determined to be
invalid,  illegal or unenforceable such provision or part will be severable from
this Agreement or such Security Instrument, as the case may

<PAGE>

                                      -13-

be, and the remainder of this Agreement or such Security Instrument, as the case
may be, will be construed as if such invalid, illegal or unenforceable provision
or part had been deleted herefrom or therefrom.

     Section 8.11  Relationship  Between Parties.  The relationship  between the
Borrower and the Lender hereunder is, and shall at all times remain, solely that
of  borrower  and  lender,  and the Lender  neither  undertakes  nor assumes any
responsibility  or duty to the  Borrower  to review,  inspect,  supervise,  pass
judgment  upon or inform the  Borrower of any matter.  The  Borrower  shall rely
entirely upon its own judgment and any review, inspection, supervision, exercise
of judgment or information  supplied to the Borrower by the Lender in connection
with any matter is for the protection of the Lender and neither the Borrower nor
any third party is entitled to rely thereon.

     Section 8.12  Interest  Limitation.  Notwithstanding  any  provision to the
contrary  contained  herein,  in no event  shall the  aggregate  "interest"  (as
defined in Section 347 of the Criminal Code, Statutes of Canada,  1985, c. C-46,
as the same may be amended,  replaced or  re-enacted  from time to time) payable
hereunder exceed the effective annual rate of interest on the "credit  advanced"
(as defined in that section)  hereunder  lawfully  permitted  under that section
and, if any payment,  collection or demand pursuant to this Agreement in respect
of  "interest"  (as defined in that section) is determined to be contrary to the
provisions of that section,  such payment,  collection or demand shall be deemed
to have been made by mutual  mistake  of the  Borrower  and the  Lender  and the
amount of such  payment or  collection  shall be refunded to the  Borrower;  for
purposes  hereof the  effective  annual rate of interest  shall be determined in
accordance with generally accepted  actuarial  practices and principles over the
term of the  Credit  Facility  on the  basis of annual  compounding  of the rate
lawfully  permitted  under  that  section  and,  in the  event of a  dispute,  a
certificate of a Fellow of the Canadian Institute of Actuaries  appointed by the
Lender will be prima facie evidence for the purposes of such determination.

     Section 8.13 Time of essence.  Time is of the essence of this Agreement and
the Security Instruments.

     Section 8.14 Jurisdiction.  This Agreement and the Security Instruments and
all matters arising  hereunder or thereunder will be governed by the laws of the
Province of British  Columbia and all disputes  arising  hereunder or thereunder
will be referred to the courts of the Province of British Columbia or such other
court or courts as the Lender in its sole discretion may elect and, by execution
and delivery of this Agreement,  the Borrower  irrevocably  submits to each such
jurisdiction.

     Section 8.15 Judgment Currency.  If, for the purposes of obtaining judgment
in any court,  it is necessary to convert a sum due hereunder to the Lender from
the  currency  in  respect  of which  such  sum is  outstanding  hereunder  (the
"Original   Currency")   into  the  currency  in  which  a  court  of  competent
jurisdiction  may render judgment in connection with any litigation  relating to
the repayment of such sum (the "Judgment  Currency"),  the parties hereto agree,
to the fullest extent that they may effectively do so, that the rate of exchange
used shall be that at which in accordance with normal banking  procedures of the
Lender's  bankers the Lender  could  purchase  the  Original  Currency  with the
Judgment  Currency on the Business Day preceding that on which final judgment is
paid or satisfied.  The obligations of the Borrower in respect of any sum due in
the Original Currency from it to the Lender under this Agreement or the Security
Instruments shall,  notwithstanding  any judgment in any Judgment  Currency,  be
discharged only to the extent that on the Business Day following  receipt by the
Lender of any sum adjudged to be so due in such  Judgment  Currency,  the Lender
may in  accordance  with  normal  banking  procedures  of the  Lender's  bankers
purchase the Original Currency with such Judgment Currency. If the amount of the
Original Currency so purchased is less than the sum originally due to the Lender
in the Original  Currency,  the Borrower  agrees,  as a separate  obligation and
notwithstanding any such judgment, to indemnify the

<PAGE>

                                      -14-

Lender,  against  such  loss,  and if the  amount of the  Original  Currency  so
purchased exceeds the sum originally due to the Lender in the Original Currency,
the Lender agrees to remit such excess to the Borrower.

     Section 8.16 Entire Agreement.  This Agreement and the Security Instruments
constitute the whole and entire agreement  between the parties hereto and cancel
and supersede any prior agreements, undertakings, declarations, representations,
written or verbal, in respect thereof.

     Section 8.17  Counterparts and Facsimile  Execution.  This Agreement may be
executed in one or more counterparts,  each of which so executed will constitute
an original and all of which will  constitute one and the same  agreement.  This
Agreement may be executed by the parties and  transmitted  by telecopy and if so
executed and transmitted this Agreement will be for all purposes as effective as
if the parties had delivered an executed original agreement.

         IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed and delivered on the date first written above.

Suite 200                            INFOWAVE SOFTWARE, INC.
4664 Lougheed Highway
Burnaby, B.C.
V5C 5T5                              By: --------------------------------------
                                         Authorized Signatory
Attn:    Morgan Sturdy,
         Chairman
                                     By: --------------------------------------
Tel:     (604) 473-3739                  Authorized Signatory
Fax:     (604) 473-3799
Witness:

------------------------------       --------------------------------------
Name:                                Thomas Koll

                                     Address:  Suite 200
                                               4664 Lougheed Highway
                                               Burnaby, B.C.
                                               V5C 5T5
                                               Tel:  (604) 473-3739
                                               Fax:  (604) 473-3799

<PAGE>

                                   SCHEDULE A

                             PERMITTED ENCUMBRANCES

The term "Permitted Encumbrances" means:

(1)  undetermined  or inchoate  liens and charges  incidental  to  construction,
     maintenance or operations which have not at the time been filed pursuant to
     law;

(2)  liens for taxes, assessments or governmental charges or levies for the then
     current year and liens for taxes,  assessments or  governmental  charges or
     levies not at the time  overdue  or) if overdue,  the  validity of which is
     being contested diligently and in good faith by appropriate proceedings and
     for which,  if the Lender so requires,  the Borrower has given  security to
     the Lender in such amount as the Lender may reasonably require;

(3)  liens or  privileges  imposed by law such as carriers'  warehousemen's  and
     builder's  liens arising in the ordinary course of business which relate to
     the obligations not at the time due or delinquent, or if due or delinquent,
     the validity of which is being  contested  diligently and in good faith and
     for which,  if the Lender so requires,  the Borrower has given  security to
     the Lender in such amount as the Lender may reasonably require;

(4)  any mortgage,  pledge,  charge or other encumbrance or security interest in
     favour of the Lender or any company controlled by him;

(5)  Liens granted to secure  indebtedness  incurred to finance the  acquisition
     (whether by purchase or capitalized  lease) of tangible assets, but only on
     the assets acquired with the proceeds of such indebtedness;

(6)  Liens  (other  than Liens  arising  under the  Employee  Retirement  Income
     Security Act of 1974, as amended, or Section 412(n) of the Internal Revenue
     Code of 1986,  as amended)  incurred in the ordinary  course of business in
     connection  with  workers'  compensation,  unemployment  insurance or other
     forms of governmental  insurance or benefits,  or to secure  performance of
     tenders,  statutory  obligations,  leases  and  contracts  (other  than for
     borrowed  money)  entered  into in the  ordinary  course of  business or to
     secure obligations on surety or appeal bonds; and

(7)  judgment  Liens in existence  less than 60 days after the entry  thereof or
     with respect to which execution has been stayed.

<PAGE>

                                   SCHEDULE B

                FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT

<PAGE>

                                   SCHEDULE C

                       FORM OF GENERAL SECURITY AGREEMENTEXHIBIT 10.28

                               SECURITY AGREEMENT

     THIS  SECURITY  AGREEMENT  dated as of the 24th day of July,  2001  made by
Infowave Software, Inc. (the "Borrower"),  a corporation  incorporated under the
laws of the Province of British  Columbia and having its chief executive  office
at Suite 200, 4664 Lougheed  Highway,  Burnaby,  BC, V5C 5T5  (facsimile:  (604)
473-3799),  to and in favour of Thomas Koll (the "Lender"), a businessman having
an office at Suite 200, 4664 Lougheed Highway,  Burnaby,  BC, V5C 5T5 (facsimile
(604) 473-3799).

     WHEREAS:

A. The Borrower has entered  into a loan  agreement  dated as of the date hereof
between the Borrower as borrower and the Lender as lender (as such agreement may
at any time or from time to time be amended,  supplemented or otherwise modified
or  restated,  the  "Credit  Agreement")  and the  Lender  has agreed to advance
certain  credit  facilities  on the terms and  conditions  set out in the Credit
Agreement.

B. It is a condition of the advance of the said credit  facilities by the Lender
that the Borrower  execute and deliver this Security  Agreement to the Lender as
collateral security for the payment and performance of the Obligations.

     NOW THEREFORE WITNESSETH that, in consideration of these premises and other
good and valuable consideration,  the receipt and sufficiency of which is hereby
acknowledged  by the Borrower,  the Borrower  covenants,  declares and agrees as
follows:

                                   ARTICLE 1
                                 INTERPRETATION

     Section 1.1 Terms  Incorporated for Reference.  All capitalized  terms used
but not  otherwise  defined in this Security  Agreement  shall have the meanings
attributed  to  them in the  Credit  Agreement.  Terms  defined  in the  British
Columbia  Personal  Property  Security  Act (as amended  from time to time,  the
"PPSA") and used but not otherwise defined in this Security Agreement shall have
the same meaning herein.

     Section 1.2 Defined  Terms.  In this  Security  Agreement,  unless there is
something in the subject matter or context inconsistent therewith, the following
words and terms shall have the following meanings:

          "Book Accounts" means all debts, accounts,  moneys, demands and choses
in action which are now due, owing or accruing due or which may hereafter become
due,  owing or accruing due to the Borrower and all claims of whatsoever  nature
or kind  which  the  Borrower  now has or may  hereafter  have,  in each case in
respect of or  arising  out of or in  connection  with the  Business,  including
claims  against  the Crown  and  claims  under  insurance  policies  and all the
proceeds and other monies  payable  thereunder  (including  bonuses,  additions,
profits,  interest and all other such amounts);  and all Contracts,  securities,
bills, notes, lien notes, judgments, chattel mortgages,  mortgages and all other
rights and benefits  which now are or may hereafter be vested in the Borrower or
anyone on behalf of the  Borrower  in respect of or as  security  for any of the
said debts, accounts,  moneys,  demands, choses in action and claims or any part
thereof; and also all books, accounts,  invoices,  letters, papers and documents
recording  or in any  way  evidencing  or  relating  to any of the  said  debts,
accounts, moneys, demands, choses in action and claims or any part thereof;

<PAGE>

                                      -2-

          "Business" means the business of the Borrower as conducted by it as at
the date hereof and as proposed to be conducted by it hereafter;

          "Contracts"  means  all  contracts  or  agreements   relating  to  the
ownership  or  conduct  of the  Business  (including,  without  limitation,  all
contractual rights and benefits, options or rights to acquire options thereunder
to which the Borrower is a party  (whether by way of assignment or otherwise) in
any form whatsoever,  written or verbal,  now in existence or hereafter  entered
into,  including  leases,  the options to purchase and rights of first refusal),
together  in  each  case  with  any  amendments,   supplements,   modifications,
extensions, renewals or replacements thereof;

          "Credit Agreement" has the meaning set forth in recital A hereof;

          "Intellectual   Property"   has  the  meaning  set  forth  in  Section
2.1(1)(e);

          "Inventory" means all inventories of the Borrower  wheresoever located
(including, without limitation, such inventory located at, on or about the Lands
or any leasehold property) including,  without limitation,  finished goods, work
in progress, raw materials,  stores, supplies, spare parts and other maintenance
items and  merchandise and all other  materials and supplies  wherever  located,
including on or about or in transit to or from the Lands (or otherwise on hand),
to be used or consumed in connection with the processing,  manufacture, packing,
shipping, selling or furnishing of products in the Business;

          "Lender"  means Thomas  Koll,  his heirs,  executors,  administrators,
successors and assigns;

          "Lien" includes any mortgage,  pledge, lien,  hypothecation,  security
interest or other  encumbrance or charge (whether fixed,  floating or otherwise)
or title retention, any right of set-off (arising otherwise than by operation of
Law) and any deposit of moneys under any agreement or  arrangement  whereby such
moneys  may be  withdrawn  only upon  fulfillment  of any  conditions  as to the
discharge of any other indebtedness or other obligation to any creditor,  or any
right  of or  arrangement  of any  kind  with any  creditor  to have its  claims
satisfied  prior to other creditors with or from the proceeds of any properties,
assets or revenues of any kind now owned or hereafter acquired;

          "Negotiable Collateral" has the meaning set forth in Section 2.3(2);

          "Obligations" has the meaning set forth in Section 2.2(1);

          "Official  Body" means any government or political  subdivision or any
agency,  authority,  bureau,  central  bank,  monetary  authority,   commission,
department or instrumentality  thereof,  or any court,  tribunal,  grand jury or
arbitrator, whether foreign or domestic;

          "Person" means an individual,  partnership,  corporation  (including a
business trust), joint stock company, trust, unincorporated  association,  joint
venture or other entity, or a foreign state or political  subdivision thereof or
any agency of such state or subdivision;

          "PPSA" has the meaning set forth in Section 1.1;

          "Security Agreement" means this agreement as supplemented,  amended or
otherwise modified, renewed or replaced from time to time.

<PAGE>

                                      -3-

                                   ARTICLE 2
                                    SECURITY

     Section 2.1 Grant of  Security.  (1) Subject to Section  2.4,  the Borrower
hereby (i) mortgages and charges to the Lender as and by way of a fixed mortgage
and charge;  (ii)  pledges to the  Lender;  and (iii)  grants to the  Lender,  a
security interest in all of the Borrower's  right,  title and interest in and to
all  personal  property and  undertaking  of the Borrower now owned or hereafter
acquired  (collectively,  the  "Collateral",  and all references  thereto herein
include any part  thereof)  including,  without  limitation,  any and all of the
Borrower's:

     (a)  Inventory,  including,  without  limitation,  goods  held  for sale or
          lease,  goods  furnished  or to be furnished  to third  parties  under
          contracts  of  lease,  consignment  or  service,  goods  which are raw
          materials or work in progress,  goods used in or procured for packing,
          materials used or consumed in the Business, and the goods described in
          Schedule A hereto;

     (b)  equipment,   fixtures  and  other  goods  of  every  kind,   type  and
          description  now or hereafter  owned,  leased or otherwise held by it,
          including, without limitation,  office equipment,  computer equipment,
          consumables, machinery, plant, vehicles, licenses including the serial
          numbered goods described in Schedule B hereto,  all licences and other
          rights   and   all   records,    files,   charts,   plans,   drawings,
          specifications, manuals and documents relating thereto;

     (c)  Book Accounts and Contracts;

     (d)  documents of title, chattel paper, instruments,  securities and money,
          including,  without  limitation,  all  proceeds  of  all  policies  of
          insurance  payable as indemnity or compensation  for loss of or damage
          to any of the Collateral;

     (e)  intangibles,  including,  without limitation,  all security interests,
          goodwill,  choses in action  and other  contractual  benefits  and (i)
          trademarks  and  rights  and  interests  which  are  capable  of being
          protected as trademarks (including service marks, certification marks,
          designs,  logos, indicia, trade names, corporate names, company names,
          business names,  fictitious  business names,  trade styles,  and other
          source or business identifiers,  and applications pertaining thereto),
          and including the trade names, trademarks, trademark registrations and
          pending applications listed on Schedule C attached hereto, as the same
          may be updated  hereafter  from time to time, and rights to apply for,
          register,  renew and extend such trademarks and trademark rights,  and
          all  Licenses  in  respect  of  any  of  the  above;  (ii)  all of the
          Borrower's  right,  title and  interest in and to all  patentable  and
          unpatentable  invention  disclosures,  patents,  patent  applications,
          industrial designs and industrial design  applications,  including the
          applications and  registrations  listed on Schedule C attached hereto,
          as the same may be updated  hereafter from time to time, all reissues,
          divisions,  renewals and continuations in part, foreign filing rights,
          and rights to register,  renew and extend such rights,  and to request
          re-examination  and/or  reissue of the  patents,  and all  Licenses in
          respect  of  any  of  the  above;  (iii)  all  copyrights,   copyright
          applications,   copyright  registrations,   know-how,  trade  secrets,
          technical processes,  recipes and formulae, and Licenses in respect of
          any of the above; (iv) the right (without  obligation) to sue or bring
          opposition, expungement or cancellation proceedings in the name of the
          Borrower  or in the name of the  Lender for past,  present  and future
          infringements or violations of any of the intellectual property listed
          in paragraphs (i) to

<PAGE>

                                      -4-

          (iii) above;  (v) all general  intangibles  relating to the foregoing,
          including all  associated  goodwill;  (vi) all rights in databases and
          data  collections and all rights therein  throughout the world;  (vii)
          all rights in computer  software  including  all source  code,  object
          code,  firmware,  development  tools,  files  records and data and all
          documentation  relating  to the  foregoing;  (vii) all World  Wide Web
          addresses,  sites and domain  names;  (ix) all  proceeds of and rights
          associated  with  any and  all of the  foregoing  (including,  without
          limitation, Royalties and claims by the Borrower against third parties
          for past, present or future infringement of the Intellectual Property,
          including  those  items  listed  in the  Schedules  to  this  Security
          Agreement,  or for injury to the goodwill  associated  with the use of
          any of the  Trademarks  or for breach or  enforcement  of any License,
          Royalties and proceeds of  infringement  suits) and, to the extent not
          otherwise  included,  all payments under insurance,  or any indemnity,
          warranty,  or  guarantee,  payable  by  reason of loss or damage to or
          otherwise   with  respect  to  the   Collateral   (collectively,   the
          "Intellectual Property"); (x) all contracts, licenses, sublicenses and
          agreements  with  respect to,  relating to or  ancillary to any of the
          foregoing; and (xi) any similar,  corresponding,  or equivalent rights
          to any of the foregoing throughout the world;

     (f)  substitutions and replacements of and increases,  additions and, where
          applicable,   accessions   to  the  property   described  in  Sections
          2.1(1)(a)-(e) inclusive; and

     (g)  proceeds in any form derived  directly or indirectly  from any dealing
          with  all  or  any  part  of  the   property   described  in  Sections
          2.1(1)(a)-(f) inclusive or the proceeds therefrom.

     (2) In addition, the Borrower hereby charges in favour of the Lender by way
of a floating charge, its undertaking and all its property and assets,  real and
personal,  moveable or immoveable,  of whatsoever  nature and kind, both present
and future and every  interest  therein  which the Borrower now has or hereafter
acquires  (other than the property  and assets  hereby  effectively  assigned or
subjected  to a  specific  mortgage  and charge  and  subject to the  exceptions
hereinafter contained).

     (3) Without limiting the generality of the foregoing,  the Collateral shall
include all personal  property of the  Borrower  now or hereafter  located on or
about or in transit to or from the locations  set out in Schedule D hereto.  The
Borrower  shall  promptly  inform the Lender in writing of any other location at
which the Collateral  consisting of tangible  personal property may in future be
located.

     Section 2.2  Obligations  Secured.  (1) The  mortgages,  charges,  pledges,
transfers,  assignments and security interests granted hereby (collectively, the
"Lien hereof") shall be continuing  collateral  security for the due payment and
performance of all debts, liabilities and obligations, present or future, direct
or indirect,  absolute or contingent,  matured or unmatured, joint or several or
joint and several, at any time due or accruing due of the Borrower to the Lender
under the Credit  Agreement,  any other Credit  Facility  Documents or otherwise
howsoever incurred,  and whether incurred as principal or surety  (collectively,
and together with the expenses, costs and charges set out in Section 2.2(2), the
"Obligations").

     (2) All expenses,  costs and charges incurred by or on behalf of the Lender
in connection with the preparation and issuance of this Security Agreement,  the
perfection,  preservation  and protection of the Lien hereof and the enforcement
of the Lender's rights and remedies hereunder,  including the realization of the
Collateral,  and including all legal fees (on a solicitor  and  solicitor's  own
client basis) and disbursements, court costs, receiver's or agent's remuneration
and other expenses of taking  possession of,  repairing,  protecting,  insuring,
preparing  for  disposition,   realizing,   collecting,  selling,  transferring,
delivering or obtaining payment of the Collateral,  shall be added to and form a
part of the Obligations.

<PAGE>

                                      -5-

     Section 2.3 Attachment.  (1) The Borrower and the Lender hereby acknowledge
that (i) value has been given;  (ii) the Borrower  has rights in the  Collateral
(other  than  after-acquired  Collateral);  and (iii)  they  have not  agreed to
postpone the time of attachment of the Lien hereof.

     (2) If the  Borrower  acquires  Collateral  consisting  of  chattel  paper,
instruments,   securities  or  negotiable   documents  of  title  (collectively,
"Negotiable  Collateral")  after the date hereof,  the Borrower will,  forthwith
upon receipt by the Borrower,  deliver to the Lender such Negotiable  Collateral
and shall,  at the request of the Lender (i) cause the  transfer  thereof to the
Lender to be registered wherever,  in the reasonable opinion of the Lender, such
registration  may be  required  or  advisable,  (ii) duly  endorse  the same for
transfer in blank or as the Lender may direct,  and (iii)  forthwith  deliver to
the Lender all consents or other instruments or documents which may be necessary
to effect the transfer of the Negotiable Collateral to the Lender or its nominee
or, upon the enforcement of the Lien hereof, any third party.

     (3) The  Borrower  agrees to  promptly  inform the Lender in writing of the
acquisition  by the Borrower of any personal  property  which is not  adequately
described  herein,  and the  Borrower  agrees to execute  and deliver at its own
expense from time to time amendments to this Security Agreement or the schedules
hereto or additional  Security Agreements or schedules as may be required by the
Lender in order that the Lien hereof shall attach to such personal property.

     Section 2.4 Scope of Lien. (1) Nothing in Section 2.1 shall be construed as
an assignment by the Borrower  (which term shall include a sub-lease,  mortgage,
pledge or charge)  of any  Contract,  Book  Account,  claim,  demand or chose in
action which, as a matter of Law or by its terms, is non-assignable  without the
Consent  or   Authorization   of  some  other  person  unless  such  Consent  or
Authorization  has been  obtained.  To the extent that the  creation of the Lien
hereof would  constitute a breach or permit the  acceleration  of any  agreement
right, license or permit to which the Borrower is a party, the Lien hereof shall
not attach thereto but the Borrower shall hold its interest therein in trust for
the Lender, and, in the case of any such potential breach or acceleration of any
agreement,  right, license or permit, shall use all reasonable efforts to obtain
the consent of the other party thereto.  Upon the Borrower obtaining the consent
of such  other  party,  the Lien  hereof  shall be deemed to have  automatically
attached to such agreement, right, license or permit, as the case may be.

     (2) Until the Lien hereof shall have become  enforceable,  the grant of the
Lien  hereof  in the  Intellectual  Property  shall  not  affect  in any way the
Borrower's rights to commercially exploit the Intellectual  Property,  to defend
the  Intellectual  Property,  to enforce the  Borrower's  rights therein or with
respect  thereto  against third parties in any court or to claim and be entitled
to receive any damages with respect to any infringement thereof.

     (3) The Lien hereof shall not extend to consumer goods.

     (4) The Lien  hereof  shall not extend or apply to the last day of any term
of years reserved by a lease, verbal or written, or any agreement therefor,  now
held or hereafter  acquired by the Borrower in respect of real  property but the
Borrower  shall stand  possessed  of any such  reversion  in trust to assign and
dispose thereof as the Lender may direct.

     (5) The  Lender  will not be  deemed  in any  manner  to have  assumed  any
obligation of the Borrower under any Contracts nor shall the Lender be liable to
any  Official  Body or contract  counterparties  by reason of any default by any
person under any contract.  The Borrower agrees to indemnify and hold the Lender
harmless  of and from all  liability,  loss,  damage or expense  which it may or
might  incur by reason of any claim or demand  against  it based on its  alleged
assumption of the

<PAGE>

                                      -6-

Borrower's duty and obligation to perform and discharge the terms, covenants and
agreements in any Contract.

     (6) The Lien hereof shall not constitute an assignment of the  Intellectual
Property for purposes of the Patent Act (Canada) or the  Copyright  Act (Canada)
and shall not impose any  obligation  on the Lender to  prosecute  or defend any
application to register the Intellectual Property or to pay maintenance fees.

     (7) It is expressly acknowledged by the Borrower that,  notwithstanding any
right or authority  granted to the Borrower  herein or in any other agreement or
instrument to deal with the Collateral,  it is the intention of the Borrower and
the Lender that (i) the Lien hereof  shall  operate and be  construed as a fixed
and specific charge of all Collateral in respect of which the Borrower presently
has rights, and as a fixed and specific charge of all after-acquired  Collateral
which shall attach  forthwith upon the Borrower  acquiring  rights therein,  and
(ii) except as provided in Section 2.1(2), the Lien hereof shall neither operate
nor be construed as a floating charge.

     Section 2.5 The  Lender's  Care and Custody of  Collateral.  (1) The Lender
shall not be bound to collect,  dispose of,  realize,  protect or enforce any of
the  Borrower's  right,  title  and  interest  in and to  the  Collateral  or to
institute  proceedings  for  the  purpose  thereof  and,  without  limiting  the
generality of the foregoing,  the Lender shall not be required to take any steps
necessary to preserve  rights against prior parties in respect of any Negotiable
Collateral.

     (2)  The  Lender  shall  have  no  obligation  to  keep  Collateral  in its
possession identifiable.

     (3) The Lender may, both before and after the Lien hereof shall have become
enforceable,  (i) notify any person  obligated  on a Book  Account or on chattel
paper or any obligor on an instrument  to make payment  thereunder to the Lender
whether or not the Borrower was theretofore making collections thereon, and (ii)
assume control of any proceeds arising from the Collateral.

     Section 2.6 The  Borrower's  Dealings with  Collateral.  The Borrower shall
not,  without the prior written consent of the Lender,  sell,  exchange,  lease,
release or abandon or otherwise  dispose of the Collateral or create,  assume or
permit to remain  outstanding  any Lien (except for Liens which are permitted by
the Credit  Agreement)  in, on or of the  Collateral  except as  provided in the
Credit  Agreement,  or as  otherwise  agreed to in  writing by the  Lender.  Any
proceeds of such sale or lease except as referred to in (i) and (ii) above shall
be held by the  Borrower  in trust for the  Lender  and,  at the  request of the
Lender, shall be paid immediately to the Lender.

     Section  2.7 Right of Set-Off.  The  Obligations  secured by this  Security
Agreement  shall be paid, when due, by the Borrower to the Lender without regard
to any equities existing among the Borrower and the Lender and without regard to
any right of set-off or  cross-claim  or of any claim or demand of the  Borrower
against the Lender or otherwise.

     Section 2.8 Protective Disbursements.  If the Borrower fails to perform any
covenant on its part  contained in this Security  Agreement then the Lender may,
in its absolute discretion, perform any such covenant capable of being performed
by it and, if any such covenant  requires the payment or  expenditure  of money,
the Lender may make such payment but shall be under no  obligation to do so, and
all sums so paid or expended by the Lender shall be  immediately  payable by the
Borrower,  shall  bear  interest  at the  highest  rate set forth in the  Credit
Agreement until paid and shall be secured hereby, having the benefit of the Lien
hereof in priority to the indebtedness evidenced by this Security Agreement. No

<PAGE>

                                      -7-

such  performance  or payment  shall relieve the Borrower from any default under
this Security Agreement or any consequences of such default.

                                   ARTICLE 3
                                   ENFORCEMENT

     Section  3.1  Default.  The Lien  hereof  shall be and  become  enforceable
against the  Borrower if and when it shall fail to make  payments or perform any
of the  Obligations  on  demand  or  otherwise  when  due and  payable  or to be
performed,  as the case may be, or upon the  occurrence of any Event of Default,
as defined in the Credit Agreement.

     Section 3.2 Remedies. Whenever the Lien hereof has become enforceable,  the
Lender may realize upon the Collateral and enforce the rights of the Lender by:

     (a)  entry  onto any  premises  where  Collateral  consisting  of  tangible
          personal property may be located;

     (b)  entry into  possession  of the  Collateral  and removal of  Collateral
          consisting of tangible  personal  property by any method  permitted by
          Law;

     (c)  sale,  assignment,  lease,  sub-lease,  granting options or options to
          purchase or any other disposal of the Collateral;

     (d)  collection of any proceeds arising in respect of the Collateral;

     (e)  collection,  realization  or sale of or  other  dealing  with the Book
          Accounts;

     (f)  the exercise of any contractual, legal or other rights or interests of
          the Borrower under or in respect of the Collateral;

     (g)  the  payment of any Lien that may exist or be  threatened  against the
          Collateral,  in which  event such  amount and any costs,  charges  and
          expenses  incurred  in  connection  therewith  shall  be  added to the
          Obligations;

     (h)  the  appointment by instrument in writing of a receiver (which term as
          used in this  Security  Agreement  includes a receiver and manager) or
          agent  of the  Collateral  and/or  the  Business  and the  removal  or
          replacement of such receiver or agent from time to time;

     (i)  the institution of proceedings in any court of competent  jurisdiction
          for the appointment of a receiver of the Collateral;

     (j)  the institution of proceedings in any court of competent  jurisdiction
          for sale or foreclosure of the Collateral;

     (k)  filing proofs of claim and other documents to establish  claims in any
          proceeding relating to the Borrower;

     (l)  the set-off and application  against the  Obligations,  to the fullest
          extent permitted by Law, of any monies to be paid by the Lender to the
          Borrower under the Credit  Agreement,  or any other agreement  between
          the Lender and the Borrower; and

<PAGE>

                                      -8-

     (m)  any other remedy or  proceeding  authorized or permitted by applicable
          Law.

Such remedies may be exercised from time to time separately or in combination
and are in addition to and not in substitution for any other rights of the
Lender however created. The Lender may proceed by way of any action, suit or
other proceeding available at law and no right, remedy or power of the Lender
shall be exclusive of or dependent on any other. The Lender may exercise any of
its rights, remedies or powers separately or in combination and at any time. The
Lender shall not be bound to exercise any such rights or remedies, and the
exercise of such rights and remedies shall be without prejudice to the rights of
the Lender in respect of the Obligations including the right to claim for any
deficiency.

     Section 3.3  Additional  Rights.  In addition to the remedies of the Lender
set forth in Section  3.2,  the Lender may,  whenever the Lien hereof has become
enforceable,

     (a)  require  the  Borrower,  at the  Borrower's  expense,  to  gather  the
          Collateral  consisting  of  tangible  personal  property at a place or
          places  designated  by notice in  writing  given by the  Lender to the
          Borrower;

     (b)  require the Borrower,  by notice in writing given by the Lender to the
          Borrower,  to disclose to the Lender the  location or locations of the
          Collateral consisting of tangible personal property;

     (c)  repair,   process,   modify,  complete  or  otherwise  deal  with  the
          Collateral and prepare for the disposition of the Collateral,  whether
          on the premises of the Borrower or otherwise;

     (d)  carry on all or any part of the business or businesses of the Borrower
          and, to the  exclusion of all others  including  the  Borrower,  enter
          upon,  occupy and use all or any of the  premises,  buildings,  plant,
          undertaking  and other  property of or used by the  Borrower  for such
          time as the Lender sees fit, free of charge,  and the Lender shall not
          be liable to the Borrower for any act,  omission or  negligence  in so
          doing or for any rent,  charges,  depreciation or damages  incurred in
          connection therewith or resulting therefrom;

     (e)  borrow for the purpose of carrying on the  business of the Borrower or
          for the maintenance,  preservation or protection of the Collateral and
          mortgage,  charge, pledge or grant a Lien in, on or of the Collateral,
          whether or not in priority to the Lien hereof, to secure repayment;

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

     (g)  participate in any recapitalization, reclassification, reorganization,
          consolidation,  redemption,  share split, merger or liquidation of any
          issuer of securities  which constitute  Collateral,  and in connection
          therewith may deposit or surrender  control of the Collateral,  accept
          money or other property in exchange for the Collateral,  and take such
          action as it deems proper in connection therewith, and any other money
          or property  received in exchange for the Collateral  shall be held by
          the  Lender  thereafter  as part  of the  Collateral  pursuant  to the
          provisions hereof.

<PAGE>

                                      -9-

     Section 3.4  Concerning  the  Receiver.  (1) Any receiver  appointed by the
Lender  shall be vested  with the  rights  and  remedies  which  could have been
exercised  by the Lender in respect of the Borrower or the  Collateral  and such
other powers and discretions as are granted in the instrument of appointment and
any  instrument  or  instruments  supplemental  thereto.  The  identity  of  the
receiver,  any replacement thereof and any remuneration  thereof shall be within
the sole and unfettered discretion of the Lender.

     (2) Any receiver  appointed by the Lender shall act as agent for the Lender
for the purposes of taking  possession of the Collateral,  but otherwise and for
all other purposes  (except as provided below),  as agent for the Borrower.  The
receiver may sell,  lease,  or otherwise  dispose of Collateral as agent for the
Borrower or as agent for the Lender (but in all cases shall take  direction from
the Lender) as the Lender may determine in its sole and  unfettered  discretion.
The Borrower  agrees to ratify and confirm all actions of the receiver acting as
agent for the Borrower,  and to release and indemnify the receiver in respect of
all such actions.

     (3) The Lender,  in appointing or refraining  from appointing any receiver,
shall not incur  liability to the receiver,  the Borrower or otherwise and shall
not be responsible for any misconduct or negligence of such receiver.

     Section 3.5  Appointment  of  Attorney.  The  Borrower  hereby  irrevocably
appoints the Lender (and any officer  thereof) as attorney of the Borrower (with
full power of  substitution)  to  exercise,  whenever the Lien hereof has become
enforceable,  in the name of and on behalf of the Borrower any of the Borrower's
right  (including  the  right of  disposal),  title and  interest  in and to the
Collateral including the execution,  endorsement and delivery of any agreements,
documents, instruments, securities, documents of title and chattel paper and any
notices,  receipts,  assignments or verifications of the Book Accounts. All acts
of any such attorney are hereby  ratified and approved,  and such attorney shall
not be  liable  for any act,  failure  to act or any  other  matter  or thing in
connection therewith, except for its own negligence or wilful misconduct.

     Section  3.6  Dealing  with the  Collateral.  (1) The  Lender  shall not be
obliged to exhaust its  recourses  against the  Borrower or any other  Person or
Persons or against any other security it may hold in respect of the  Obligations
before realizing upon or otherwise dealing with the Collateral in such manner as
the Lender may consider desirable.

     (2) The Lender may grant extensions or other indulgences,  take and give up
securities,  accept  compositions,  grant  releases and discharges and otherwise
deal with the Borrower and with other  Persons,  sureties or  securities  as the
Lender may see fit, all without  prejudice to the  Obligations  or the rights of
the Lender in respect of the Collateral.

     (3) The Lender  shall not be (i) bound under any  circumstances  to realize
upon the  Collateral;  (ii)  liable or  accountable  for any failure to collect,
realize or obtain payment in respect of the Collateral; (iii) bound to institute
proceedings  for the purpose of  collecting,  enforcing,  realizing or obtaining
payment of the  Collateral  or for the purpose of  preserving  any rights of the
Lender  and  the  Borrower  or  any  other  Persons  in  respect  thereof;  (iv)
responsible  for any  loss  occasioned  by any sale or  other  dealing  with the
Collateral  or by  the  retention  of or  failure  to  sell  or  otherwise  deal
therewith;  or (v) bound to protect the Collateral from depreciating in value or
becoming worthless.

     (4) All moneys from time to time received by the Lender or the receiver may
be  applied  in such a manner,  order  and  priority  as the  Lender in its sole
discretion may determine. If there shall be a

<PAGE>

                                      -10-

deficiency,  the Borrower shall remain liable for such  deficiency and shall pay
the amount of such deficiency to the Lender forthwith.

     Section 3.7  Standards  of Sale.  Without  prejudice  to the ability of the
Lender  to  dispose  of the  Collateral  in any  manner  which  is  commercially
reasonable,  the Borrower  acknowledges  that a disposition of Collateral by the
Lender  which  takes  place  substantially  in  accordance  with  the  following
provisions shall be deemed to be commercially reasonable:

     (a)  Collateral  may be disposed of in whole or in part  whether or not the
          Lender has taken possession thereof;

     (b)  Collateral  may be disposed  of by public  auction,  public  tender or
          private  contract,  with or without  advertising and without any other
          formality;

     (c)  any  purchaser  or  lessee of such  Collateral  may be a  customer  or
          related party of the Lender;

     (d)  a disposition  of Collateral may be on such terms and conditions as to
          credit,   deferred  payment  or  otherwise  as  the  Lender,   in  its
          discretion, may deem advantageous;

     (e)  the Lender may  establish  an upset or reserve bid or price in respect
          of the Collateral; and

     (f)  the  Lender  may  buy  in,  rescind  or  vary  any  contract  for  the
          disposition  of  Collateral  and may dispose of any  Collateral  again
          without  being  obligated  to  account  or answer for any gain or loss
          occasioned thereby.

     Section  3.8  Dealings by Third  Parties.  (1) No person  dealing  with the
Lender or its agent or a receiver shall be required (i) to determine whether the
Lien hereof has become  enforceable;  (ii) to determine whether the powers which
the Lender or such agent or  receiver on behalf of the Lender is  purporting  to
exercise have become  exercisable;  (iii) to determine whether any money remains
due to the Lender by the Borrower; (iv) to determine the necessity or expediency
of the stipulations  and conditions  subject to which any sale or lease shall be
made;  (v) to determine  the propriety or regularity of any sale or of any other
dealing by the Lender with the Collateral;  or (vi) to see to the application of
any money paid to the Lender.

     (2) Any  purchaser  of the  Collateral  from  the  Lender  shall  hold  the
Collateral  absolutely  free from any claim or right of whatever kind  including
any equity of redemption of the Borrower,  and the Borrower hereby  specifically
waives,  to the fullest extent  permitted by Law, as against any such purchaser,
all right of  redemption,  stay or  appraisal  which the Borrower now has or may
have under any rule of Law now  existing or  hereafter  adopted.  To the fullest
extent  permitted by Law, the  Borrower  waives all of the rights,  benefits and
protection  provided to it by any statute  which  imposes  limitations  upon the
rights, remedies or powers of a secured party.

                                   ARTICLE 4
                                     GENERAL

     Section 4.1  Discharge.  The Lien hereof shall be released  and  discharged
upon,  but only upon,  full  payment of the  Obligations  and at the request and
expense of the  Borrower.  The Lender shall execute and deliver to the Borrower,
at the request and expense of the Borrower,  such releases and discharges as the
Borrower may reasonably require.

<PAGE>

                                      -11-

     Section  4.2 No Merger,  etc.  No judgment  recovered  by the Lender  shall
operate by way of merger of or in any way affect  the Lien  hereof,  which is in
addition to and not in substitution for any other security now or hereafter held
by the Lender in respect of the Obligations.

     Section 4.3  Security  Additional.  The  Borrower  agrees that the security
interests  created by this  Security  Agreement  are in  addition  to and not in
substitution for any other security now or hereafter held by the Lender.

     Section 4.4  Realization.  The  Borrower  acknowledges  and agrees that the
Lender may realize upon various securities  securing the Obligations or any part
thereof in such order as it may be advised and any such realization by any means
upon any security or any part thereof  will not bar  realization  upon any other
security or the security hereby constituted or parts thereof.

     Section 4.5  Waivers,  etc. No  amendment,  consent or waiver by the Lender
shall be effective unless made in writing and signed by an authorized officer of
the Lender and then such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.

     Section  4.6  Further  Assurances.  The  Borrower  shall from time to time,
whether  before or after the Lien hereof shall have become  enforceable,  do all
such  acts and  things  and  execute  and  deliver  all such  deeds,  transfers,
assignments and instruments as the Lender may reasonably  require for protecting
the  Collateral or  perfecting  the Lien hereof and for  exercising  all rights,
remedies,  powers, authorities and discretions hereby conferred upon the Lender,
and the  Borrower  shall,  from time to time  after the Lien  hereof  has become
enforceable, do all such acts and things and execute and deliver all such deeds,
transfers,   assignments   and   instruments  as  the  Lender  may  require  for
facilitating the sale of or other dealing with the Collateral in connection with
any realization thereof.

     Section  4.7  Notice.  All  notices,  requests,   demands,  directions  and
communications  (in this  Section  4.5,  "notices")  hereunder  shall be sent by
telex, facsimile or similar means of recorded communication or hand delivery and
shall be effective  when hand  delivered  or, in the case of  successful  telex,
facsimile or similar means of recorded communication, when received. All notices
shall be given to the respective  addresses on page 1 of this Security Agreement
or, in either case, in accordance with any unrevoked  written  direction as to a
change of address given in accordance with this Section 4.5.

     Section 4.8  Successors  and  Assigns.  This  Security  Agreement  shall be
binding upon the Borrower,  its successors  and assigns,  and shall enure to the
benefit of the Lender and its  successors  and  assigns.  The  Borrower  may not
assign or novate any of its rights or obligations under this Security  Agreement
without  the prior  written  consent  of the  Lender.  All  rights of the Lender
hereunder  shall  be  assignable  in  accordance  with the  terms of the  Credit
Agreement  and in any action  brought by an  assignee to enforce any such right,
the Borrower  shall not assert  against such assignee any claim or defence which
the Borrower now has or hereafter may have against the Lender.

     Section 4.9  Headings,  etc. The division of this Security  Agreement  into
sections and  subsections  and the insertion of headings are for  convenience of
reference only and shall not affect the construction or interpretation thereof.

     Section 4.10  Severability.  If and to the extent that any provision hereof
shall  conflict with any  mandatory  provision of the PPSA  (including,  without
limitation, an exclusion or purported exclusion of a duty or onus imposed by the
PPSA or a limitation  or purported  limitation of the liability of or the amount
of  damages  recoverable  from a person who has  failed to  discharge  a duty or
obligation imposed

<PAGE>

                                      -12-

by the PPSA),  such  provision of the PPSA shall govern.  The provisions of this
Security  Agreement  are  intended to be  severable.  If any  provision  of this
Security  Agreement  shall be deemed by any court of competent  jurisdiction  or
held  to be  invalid  or  void  or  unenforceable  in  whole  or in  part in any
jurisdiction,  such provision shall, as to such jurisdiction,  be ineffective to
the  extent  of  such  invalidity  or  unenforceability  without  in any  manner
affecting the validity or  enforceability  thereof in any other  jurisdiction or
the remaining provisions hereof in any jurisdiction.

     Section 4.11  Governing Law. This Security  Agreement  shall be governed by
and  construed in accordance  with the laws of the Province of British  Columbia
and of Canada  applicable  therein  and shall be  treated in all  respects  as a
British Columbia contract.

     Section 4.12 Incorporation of Schedules. Schedules A, B, C and D shall, for
all purposes hereof, form an integral part of this Security Agreement.

     Section 4.13 Conflict.  In the event of a conflict or inconsistency between
the  provisions  of this  Security  Agreement  and the  provisions of the Credit
Agreement, the provisions of the Credit Agreement shall prevail.

     Section 4.14 Acknowledgement of Receipt/Waiver.  The Borrower  acknowledges
receipt of an executed copy of this Security Agreement.  The Borrower waives, to
the  extent  permitted  by Law,  the right to  receive  a copy of any  financing
statement,  financing change statement or verification statement registered with
or issued by any personal property registry or other Official Body in connection
with this Security Agreement.

     IN WITNESS  WHEREOF the Borrower has duly executed this Security  Agreement
and  affixed  its  corporate  seal under the hands of its proper  officers  duly
authorized  in that  behalf for the  purpose  thereof as of the date first above
written.

                                        INFOWAVE SOFTWARE, INC.

                                        Per: ----------------------------------
                                                Authorized Signatory

                                        Per: ----------------------------------
                                                Authorized Signatory

<PAGE>

                                   SCHEDULE A

                                    INVENTORY

Nil

<PAGE>

                                   SCHEDULE B

                              SERIAL NUMBERED GOODS

Nil

<PAGE>

                                   SCHEDULE C

                              INTELLECTUAL PROPERTY

          TRADEMARKS, TRADEMARK REGISTRATIONS AND PENDING APPLICATIONS

REGISTERED TRADE-MARKS
----------------------

--------------------------------------------------------------------------------
Trade-mark:                I Design
Country:                   Canada
Registration No.:          527,301
Registration Date:         May 4, 2000

--------------------------------------------------------------------------------
Trade-mark:                I Design
Country:                   United States
Registration No.:          2,411,809
Registration Date:         Dec. 12, 2000

--------------------------------------------------------------------------------
Trade-mark:                INFOWAVE
Country:                   Canada
Registration No.:          441,677
Registration Date:         March 31, 1995

--------------------------------------------------------------------------------
Trade-mark:                INFOWAVE OFFICE ENABLER
Country:                   Canada
Registration No.:          496,520
Registration Date:         June 19, 1998

--------------------------------------------------------------------------------
Trade-mark:                INFOWAVE OFFICE ENABLER
Country:                   United States
Registration No.:          2,291,877
Registration Date:         November 16, 1999

--------------------------------------------------------------------------------
Trade-mark:                INFOWAVE WIRELESS ENABLER
Country:                   Canada
Registration No.:          507,188
Registration Date:         January 27, 1999

--------------------------------------------------------------------------------
Trade-mark:                infoWave Design
Country:                   United States
Registration No.:          2,301,202
Registration Date:         December 21, 1999

--------------------------------------------------------------------------------

<PAGE>
                                      -2-

TRADE-MARK APPLICATIONS
-----------------------

--------------------------------------------------------------------------------
Trade-mark:                CRM2GO
Country:                   Canada
Serial No.:                1,045,777
Filing Date:               February 8, 2000

--------------------------------------------------------------------------------
Trade-mark:                SFA2GO
Country:                   Canada
Serial No.:                1,045,774
Filing Date:               February 8, 2000

--------------------------------------------------------------------------------

Trade-mark:                INFOWAVE & CIRCLE WITHIN A CIRCLE DESIGN
Country:                   Canada
Serial No.:                1,084,735
Filing Date:               November 30, 2000

--------------------------------------------------------------------------------

Trade-mark:                INFOWAVE & CIRCLE WITHIN A CIRCLE DESIGN
Country:                   United States
Serial No.:                76/218,583
Filing Date:               March 5, 2001

--------------------------------------------------------------------------------

Trade-mark:                INFOWAVE WIRELESS ENABLER
Country:                   United States
Serial No.:                75/396,059
Filing Date:               November 25, 1997

--------------------------------------------------------------------------------

Trade-mark:                INFOWAVE
Country:                   United States
Serial No.:                75/229,032
Filing Date:               January 21, 1997

--------------------------------------------------------------------------------

Trade-mark:                SYMMETRY
Country:                   United States
Serial No.:                75/816,213
Filing Date:               Oct. 5, 1999

--------------------------------------------------------------------------------

Trade-mark:                WIRELESS BUSINESS ENGINE
Country:                   United States
Serial No.:                76/139,261
Filing Date:               October 3, 2000

--------------------------------------------------------------------------------

Trade-mark:                WIRELESS BUSINESS ENGINE
Country:                   Canada
Serial No.:                1,074,166
Filing Date:               September 8, 2000

--------------------------------------------------------------------------------

<PAGE>

                                      -3-

--------------------------------------------------------------------------------
Trade-mark:                INFOWAVE FOR THE NET
Country:                   United States
Serial No.:                75/803,984
Filing Date:               September 21, 1999

--------------------------------------------------------------------------------

Trade-mark:                INFOWAVE FOR EXCHANGE
Country:                   United States
Serial No.:                75/803,983
Filing Date:               September 21, 1999

--------------------------------------------------------------------------------

Trade-mark:                WIRELESS BUSINESS ENGINE
Country:                   European Community (Austria, Belgium, Denmark,
                           Finland, France, Germany, Greece, Ireland, Italy,
                           Luxembourg, Netherlands, Portugal, Spain, Sweden and
                           United Kingdom).
Serial No.:                1,996,636
Filing Date:               November 29, 2000

--------------------------------------------------------------------------------

<PAGE>

                                   SCHEDULE D

                PATENTS, PATENT APPLICATIONS, INDUSTRIAL DESIGNS
                       AND INDUSTRIAL DESIGN APPLICATIONS

Registrations
-------------

None

Applications
------------

       United States Patent Application No. 09/755,898 - Filing Date May 5, 2001
       Title:       METHOD, APPARATUS, SIGNALS AND MEDIA FOR PROVIDING CUSTOM
                    OUTPUT IN RESPONSE TO USER INPUT AND E-MAIL SYSTEM
                    EMPLOYING SAME
       Inventor:    Mark Miller Chesser
       Assignee:    Infowave Software, Inc.

       Canadian Patent Application No. 2,330,414 - Filing Date May 8, 2001
       Title:       METHOD, APPARATUS, SIGNALS AND MEDIA FOR PROVIDING CUSTOM
                    OUTPUT IN RESPONSE TO USER INPUT AND E-MAIL SYSTEM
                    EMPLOYING SAME
       Inventor:    Mark Miller Chesser
       Assignee:    Infowave Software, Inc.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}]]