Document:

Quantum Solar Power Corp.: Exhibit 10.3 - Filed by newsfilecorp.com

GUARANTEE 

THIS GUARANTEE made as of the 23rd day of April, 2012.

GRANTED BY: 

0935493 B.C. LTD.

(together hereinafter referred to as
the "Guarantor") 

IN FAVOUR OF: 

FOUNDATION FREEHOLD LTD.

(hereinafter referred to as the
"Creditor") 

WHEREAS: 

	A. 	
      QUANTUM SOLAR POWER CORP. (the "Debtor") has requested
      that the Creditor provide it with a loan in the amount of CAD$475,000
      bearing interest at a rate of 9% per annum (the "Loan");

	 	 
	B. 	
      To secure its obligations to repay the Loan and as a
      condition of advance of the Loan, the Debtor has agreed to deliver this
      Guarantee of the Guarantor of the Loan in favour of the
Creditor;

	 	 
	C. 	
      To induce the Creditor to provide the Loan to the Debtor,
      the Guarantor has agreed to give this Guarantee in favour of the
      Creditor.

NOW THEREFORE, in consideration of the sum of TEN
($10.00) DOLLARS now paid by the Creditor to the Guarantor and for other good
and valuable consideration (the receipt and sufficiency of all consideration is
hereby acknowledged by the Guarantor) the Guarantor hereby covenants and agrees
as follows: 

	1. 	
      The Guarantor hereby guarantees the payment to the
      Creditor of all present and future debts and liabilities (direct or
      indirect, absolute or contingent, matured or otherwise) now or at any time
      and from time to time hereafter due or owing by the Debtor to the Creditor
      arising from or relating to the Loan (the “Indebtedness”).

	 	 
	2. 	
      The Guarantor hereby guarantees payment to the Creditor
      of all costs and disbursements incurred by the Creditor with respect to
      recovering the Indebtedness (including all reasonable legal fees on a
      solicitor and own client basis).

	 	 
	3. 	
      The Creditor may grant extensions of time or other
      indulgences, take and give up securities, accept compositions, grant
      releases and discharges and otherwise deal with the Debtor and other
      parties and securities as the Creditor may see fit, and may apply all
      monies received from the Debtor or others, or from securities, upon such
      part of the Debtor's liability as it may think best, without prejudice to
      or in any way limiting or lessening the liability of the Guarantor under
      this Guarantee.

	 	 
	4. 	
      This shall be a continuing guarantee and shall cover all
      liabilities of the Debtor to the Creditor relating to the Loan and the
      Indebtedness and shall apply to and secure any ultimate balance due or
      remaining due to the Creditor and shall be binding as a continuing
      security on the Guarantor.

	 	 
	5. 	
      All moneys, advances, renewals and credits in fact
      borrowed or obtained from the Creditor shall be deemed to form part of the
      liabilities hereby guaranteed notwithstanding any incapacity, disability
      or lack or limitation of status or of power of the Debtor or of the directors, partners or agents thereof, or that the Debtor may not be a legal entity, or any irregularity, defect or informality in the borrowing or obtaining of such
moneys, advances, renewals, or credits; and any amount which may not be recoverable from the Guarantor on the footing of a guarantee shall be recoverable from the Guarantor as a principal debtor in respect thereof and shall be paid to the Creditor
after demand therefor as hereinafter provided.

	
6. 		
The Creditor shall not be bound to exhaust its recourse against the Debtor or other parties or the securities it may hold before being entitled to payment from the Guarantor under this Guarantee.
	
	 	 
	
7. 		
Any change or changes in the name of the Debtor shall not affect or in any way limit or lessen the liability of the Guarantor hereunder and this Guarantee shall extend to the person, firm or corporation acquiring or from time to
time carrying on the business of the Debtor.
	
	 	 
	
8. 		
Any accounts settled or stated by or between the Creditor and the Debtor shall be accepted by the Guarantor as conclusive evidence that the balance or amount thereby appearing due by the Debtor to the Creditor is so due.
	
	 	 
	
9. 		
Should the Creditor receive from the Guarantor a payment or payments in full or on account of the liability under this Guarantee, the Guarantor shall not be entitled to claim repayment against the Debtor or the Debtor's estate
until the Creditor's claims against the Debtor have been paid in full; and in case of liquidation, winding up or bankruptcy of the Debtor (whether voluntary or compulsory), the Creditor shall have the right to rank for its full claim and receive all
dividends or other payments in respect thereof until its claim has been paid in full and the Guarantor shall continue liable, up to the amount guaranteed less any payments made by the Guarantor, for any balance which may be owing by the Debtor to
the Creditor.
	
	 	 
	
10. 		
In order to secure its obligations under this Guarantee, the Guarantor agrees to enter into a security agreement in the form attached as Schedule A, granting the Lender a security interest in the assets described therein.
	
	 	 
	
11. 		
The Guarantor shall make payment to the Creditor of the amount of the debts and liabilities guaranteed hereby forthwith after demand therefore is made in writing and such demand shall be conclusively deemed to have been
effectually made when an envelope containing it addressed to the Guarantor at the last address of the Guarantor known to the Creditor is delivered to the Guarantor or is deposited, postage prepaid and registered, in a Post Office in the City of
Vancouver and interest at a rate of 1% per month, compounded monthly, shall accrue and be payable by the Guarantor to the Creditor after such demand.
	
	 	 
	
12. 		
This instrument is in addition and without prejudice to any security interest of any kind granted by the Debtor, the Guarantor or others (including without limitation guarantees whether or not in the same form as this instrument)
now or hereafter held by the Creditor.
	
	 	 
	
13. 		
There are no representations, collateral agreements or conditions with respect to this instrument or effecting the Guarantor's liability hereunder other than as contained herein.
	
	 	 
	
14. 		
The Guarantor may terminate his liability with respect to future debts and liabilities of the Debtor by delivering to the Creditor at the above address 30 days advance written notice of an intention to so terminate. Such
termination shall be effective to terminate all obligations with respect to debts and liabilities incurred by the Debtor to the Creditor after the expiration of the said 30 day period, but such termination shall not apply in respect of any prior
debts or liabilities matured or not and the notice of termination shall have no effect on those debts or liabilities incurred after the effective date of such notice but which result from express or implied commitments made prior to said effective
date. If there is more than one Guarantor hereunder then no notice of termination delivered by any Guarantor hereunder shall affect the liability of any other Guarantor hereunder.
	

	15. 	
      All indebtedness and liability, present and future, of
      the Debtor to the Guarantor is hereby assigned to the Creditor and
      postponed to the debts and liabilities of the Debtor to the Creditor,
      present and future. All monies received by the Guarantor in satisfaction
      of debts and liabilities owed to the Guarantor by the Debtor shall be held
      in trust for the Creditor and shall be paid to the Creditor forthwith.
      This paragraph shall remain in full force and effect, notwithstanding the
      termination of the guarantee pursuant to the provisions of paragraph 14
      herein in which event it will terminate when the debts and liabilities of
      the Debtor to the Creditor covered by the continuing guarantee provided
      for in paragraph 14 herein have been paid in full.

	 	 
	16. 	
      This instrument shall be construed in accordance with the
      laws of British Columbia and the Guarantor agrees that any legal suit,
      action or proceeding arising out of or relating to this instrument may be
      instituted in the courts of this province, and the Guarantor hereby
      accepts and irrevocably submits to the jurisdiction of the said courts and
      acknowledges their competence and agrees to be bound by any judgement
      thereof, provided that nothing herein shall limit the Creditor's right to
      bring proceedings against the Guarantor elsewhere.

	 	 
	17. 	
      This instrument shall be binding upon the Guarantor and
      the Guarantor's personal representatives and shall enure to the benefit of
      the Creditor and its successors and assigns.

	 	 
	18. 	
      The Guarantor acknowledges that this Guarantee has been
      prepared by O’Neill Law Corporation acting on behalf of the Debtor only
      and that the Lender and the Guarantor have been advised to obtain
      independent legal advice.

IN WITNESS WHEREOF the Guarantor has executed this
guarantee as of the day and year first above written. 

0935493 B.C. LTD. 

	per: 	/s/ Daryl J. Ehrmantraut
    	 
	  	Daryl J. Ehrmantraut 	 

3

SCHEDULE "A" 

SECURITY AGREEMENT 

4

SECURITY AGREEMENT 

IN CONSIDERATION OF Foundation Freehold Ltd.
(“Foundation”) loaning CAD$475,000 to Quantum Solar Power Corp. (“Quantum”), the
undersigned 0935493 B.C. Ltd. ("0935493") hereby covenants, agrees, warrants,
represents, acknowledges and confirms to and with Foundation and creates and
grants the mortgages, charges and security interests hereinafter set forth as
follows: 

	1. 	
      SECURITY INTEREST

1.1         For the
consideration aforesaid, 0935493 does hereby mortgage and charge as and by way
of a fixed and specific charge to and in favour of Foundation, and assign and
transfer to Foundation and grant to Foundation, by way of mortgage, charge,
assignment and transfer, a security interest in all of 0935493's right, title
and interest, in the equipment described in Schedule A. 

1.2         The mortgages,
charges, assignments and transfers and security interests created or granted
pursuant to sections 1.1 are hereinafter collectively called the "Security
Interest", and all property, assets, interests and undertakings (including
Proceeds) subject to the Security Interest or otherwise charged or secured
hereby or expressed to be charged, assigned or transferred or secured by any
instruments supplemental hereto or in implementation hereof are hereinafter
collectively called the "Collateral". 

1.3         The terms
"Chattel Paper", "Document of Title", "Equipment", "Consumer Goods",
"Instrument", "Intangible", "Investment Property", "Proceeds", "Inventory",
"Accessions", "Money", “Securities Accounts”, “Security Entitlements”
“Entitlement Orders” Securities Intermediary”, “Uncertificated Security”,
"financing statement", "financing change statement" and "verification statement"
whenever used herein and whether expressed in the singular or the plural shall,
unless otherwise defined herein or otherwise required by the context, be
interpreted pursuant to their respective meanings when used in the Personal
Property Security Act of the province of British Columbia, as amended from time
to time, which Act, including amendments thereto and any Act substituted
therefor and amendments thereto is herein referred to as the "P.P.S.A.", unless
this Agreement is expressed to be governed by the laws of some jurisdiction
other than British Columbia, in which event the term "P.P.S.A." shall mean and
the above terms shall derive their respective meanings from the Personal
Property Security Act of that jurisdiction, as amended from time to time, or any
Act substituted therefor, as amended from time to time, and in interpreting any
of the above terms the singular shall include and may be read and interpreted to
include the plural, and vice versa. Provided always that the term "Inventory"
when used herein shall include livestock and the young thereof after conception
and crops that become such within six months of execution of this Security
Agreement. Any reference herein to "Collateral" shall, unless the context
otherwise requires, be deemed a reference to "Collateral or any part thereof".
The term "Proceeds" whenever used herein and interpreted as above shall by way
of example include trade-ins, equipment, cash, bank accounts, notes, chattel
paper, goods, contract rights, accounts and any other personal property or
obligation received when such collateral or proceeds are sold, exchanged,
collected or otherwise disposed of. The term "licence" whenever used herein
means any licence or similar right at any time owned or held by 0935493
including but without being limited to a "licence" as defined in the P.P.S.A.,
and the meaning of the term "crops" whenever used herein includes but is not
limited to "crops" as defined in the P.P.S.A. 

1.4        
Attachment 

0935493 hereby acknowledges and
confirms that the Security Interest hereby created attaches upon the execution
of this Security Agreement, that value has been given, and that 0935493 has
rights in the Collateral. 

Page 1 

1.5        
Prohibitions 

Without the prior written consent of
Foundation, 0935493 shall not and shall not have the power to grant, create or
permit to be created any security interest in, charge, encumbrance or lien over,
or claim against any of its property, assets, or undertakings which ranks or
could in any event rank in priority to or pari passu with any Security Interest
created by this Security Agreement. 

	2. 	
      OBLIGATIONS SECURED

	 	 
		
      The Security Interest granted hereby is in addition to
      and not in substitution for any other security interest now or hereafter
      held by Foundation from 0935493 or Quantum Solar Power Corp. or from any
      other person whomsoever and secures and is and shall at all times be
      general and continuing security for the payment, performance and
      satisfaction of any and all liability of 0935493 to Foundation (including
      interest thereon), present or future, direct or indirect, absolute or
      contingent, matured or not, extended or renewed, wheresoever and howsoever
      incurred and any ultimate unpaid balance thereof, including all advances
      on current or running account and all future advances and re-advances, and
      whether the same is from time to time reduced and thereafter increased or
      entirely extinguished and thereafter incurred again and whether 0935493 be
      bound alone or with another or others and whether as principal or surety,
      and for the performance and satisfaction of all obligations of 0935493 to
      Foundation, whether or not contained in this Security Agreement and
      whether or not 0935493 be bound alone or with another or others (all of
      which indebtedness, liability and obligations are hereinafter collectively
      called the "Indebtedness" or the "Obligations"). If the Security Interest
      in the Collateral is not sufficient, in the event of default, to satisfy
      all Indebtedness of 0935493, 0935493 acknowledges and agrees that 0935493
      shall continue to be liable for any Indebtedness remaining outstanding and
      Foundation shall be entitled to pursue full payment thereof.

	 	 
	3. 	
      REPRESENTATIONS AND WARRANTIES OF DEBTOR

	 	 
		
      0935493 represents and warrants and so long as this
      Security Agreement remains in effect shall be deemed to continuously
      represent and warrant that:

(a)         the Collateral
is genuine and owned by 0935493 free of all security interests, mortgages,
liens, claims, charges or other encumbrances (hereinafter collectively called
"Encumbrances"), save for the Security Interest and those Encumbrances shown on
Schedule "A" or hereafter approved in writing by Foundation, prior to their
creation or assumption, and 0935493 has good right and lawful authority to grant
a security interest in the Collateral as provided by this Security Agreement;

(b)         the locations
specified in Schedule "A" with respect to goods constituting Collateral are
accurate and complete; and 

(c)         this Security
Agreement is granted, if 0935493 is a corporation, in accordance with
resolutions of the directors (and of the shareholders, if necessary) of 0935493
or, if 0935493 is a partnership, of the partners of 0935493, and all other
matters and things have been done and performed so as to make the execution and
delivery of this Security Agreement, and the performance of 0935493's
obligations hereunder, legal, valid and binding. 

	4. 	
      COVENANTS OF 0935493

	 	4.1 	
      So long as this Security Agreement remains in effect
      0935493 covenants and agrees:

	 	 	 	 
			
      (a)         to
      defend the Collateral for the benefit of Foundation against the claims and
      demands of all other parties claiming the same or an interest therein; to
      keep the Collateral free from all Encumbrances, except for the Security
      Interest and those hereafter approved in writing by Foundation, prior to
      their creation and not to sell, exchange, transfer, assign, lease, or
      otherwise dispose of Collateral or any interest therein without the prior
      written consent of Foundation;

	 	 	 	 
	 		(b) 	
      to notify Foundation promptly of:

Page 2 

	 	(i) 	
      any change in the information contained herein or in the
      Schedules hereto relating to the Collateral, including without limitation
      any change in the present location of any Collateral;

	 	 	 
	 	(ii) 	
      the details of any claims or litigation affecting 0935493
      or Collateral; and

	 	 	 
	 	(iii) 	
      any loss or damage to Collateral;

(c)         to keep the
Collateral in good order, condition and repair and not to use Collateral in
violation of the provisions of this Security Agreement or any other agreement
relating to Collateral or any policy insuring Collateral or any applicable
statute, law, by-law, rule, regulation or ordinance; 

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

(e)         to pay all
taxes, rates, levies, assessments and other charges of every nature which may be
lawfully levied, assessed or imposed against or in respect of 0935493 or
Collateral as and when the same become due and payable; 

(f)         to prevent
Collateral from being or becoming an Accession to other property not covered by
this Security Agreement; 

(g)         to carry on
and conduct the business of 0935493 in a proper and efficient manner and so as
to protect and preserve the Collateral and to keep, in accordance with generally
accepted accounting principles, consistently applied, proper books of account
for 0935493's business as well as accurate and complete records concerning
Collateral, and mark any and all such records and Collateral at Foundation's
request so as to indicate the Security Interest; 

(h)         to deliver to
Foundation from time to time promptly upon request: 

	 	(i) 	
      any Documents of Title relating to Collateral;

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

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

	 	 	 
	 	(iv) 	
      such information concerning Collateral, 0935493 and
      0935493's business and affairs as Foundation may reasonably
  request;

(i)         to permit
Foundation and its representatives, at all reasonable times, access to all its
property, assets and undertakings and to all its books of account and records
for the purpose of inspection and to render all assistance necessary for such
inspection; 

(j)         to forthwith
pay all security interests, charges, encumbrances, liens and claims which rank
or could in any event rank in priority to any security interest created hereby
and to forthwith reimburse and indemnify Foundation for all costs, charges,
expenses and legal fees and disbursements which may be incurred by Foundation
in: 

	 	(i) 	
      inspecting the Collateral;

	 	 	 
	 	(ii) 	
      perfecting and registering this Security Agreement or
      notice of it and other documents, whether or not relating to this Security
      Agreement;

Page 3 

	 	(iii) 	
      investigating title to the Collateral;

	 	 	 
	 	(iv) 	
      taking, recovering and keeping possession of the
      Collateral;

	 	 	 
	 	(v) 	
      all other actions and proceedings taken in connection
      with the preservation of the Collateral and the enforcement of this
      Security Agreement and of any other security interest held by Foundation
      as security for the Obligations of Quantum or
0935493.

	5. 	
      USE AND VERIFICATION OF COLLATERAL

	 	 
		
      Subject to compliance with 0935493's covenants contained
      herein and section 4 hereof, 0935493 may, until default, possess, operate,
      collect, use and enjoy and deal with Collateral in the ordinary course of
      0935493's business in any manner not inconsistent with the provisions
      hereof; provided always that Foundation shall have the right at any time
      and from time to time to verify the existence and state of the Collateral
      in any manner Foundation may consider appropriate and 0935493 agrees to
      furnish all assistance and information and to perform all such acts as
      Foundation may reasonably request in connection therewith and for such
      purpose to grant to Foundation or its agents access to all places where
      Collateral may be located and to all premises occupied by
  0935493.

	 	 
	6. 	
      INSURANCE

	 	6.1 	
      0935493 covenants that at all times while this Security
      Agreement is in effect 0935493 shall:

(a)         maintain or
cause to be maintained insurance on the Collateral with an insurer, of kinds,
for amounts and payable to such person or persons, all as Foundation may
require, and in particular but without limitation maintain insurance on the
Collateral to its full insurable value against loss or damage by fire including
extended coverage endorsement and in the case of motor vehicles and other mobile
Collateral, maintain insurance against theft; and 

(b)         pay all
premiums in connection with such insurance, and deliver all such policies to
Foundation, if it so requires. 

6.2         If proceeds of
any insurance required hereunder become payable Foundation may, in its absolute
discretion, apply such proceeds to such part or parts of the Indebtedness as
Foundation may see fit or Foundation may release any such insurance proceeds to
0935493 for the purpose of repairing, replacing or rebuilding, but any release
of insurance proceeds to 0935493 shall not operate as a payment on account of
the Indebtedness or in any way affect this Security Agreement. 

6.3         0935493 will
forthwith, on the happening of loss or damage to the Collateral, notify
Foundation thereof and furnish to Foundation at 0935493's expense any necessary
proof and do any necessary act to enable Foundation to obtain payment of the
insurance proceeds, but nothing herein contained shall limit Foundation's right
to submit to the insurer a proof of loss on its own behalf. 

6.4         0935493 hereby
irrevocably authorizes and directs the insurer under any policy of insurance
required hereunder to include the name of Foundation as a loss payee on any
cheque or draft which may be issued with respect to a claim under and by virtue
of such insurance, and the production by Foundation to any insurer of a
certified copy of this Security Agreement shall be its full and complete
authority for so doing. 

6.5         If 0935493
fails to maintain insurance as required hereby, Foundation may, but shall not be
obliged to, maintain or effect such insurance coverage, or so much thereof as
Foundation considers necessary for its protection. 

	7. 	
      RESTRICTIONS ON SALE OR DISPOSAL OF
    COLLATERAL

	 	7.1 	
      Except as herein provided, without the prior written
      consent of Foundation, 0935493 will not:

	 	(a) 	
      sell, lease or otherwise dispose of the
  Collateral;

Page 4 

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

(c)         move or
transfer the Collateral from the jurisdictions in which the Security Interests
hereby created have been perfected. 

	8. 	
      EVENTS OF DEFAULT

	 	 
		
      8.1         The
      happening of any of the following events or conditions (each a "default")
      shall constitute default hereunder unless waived by
  Foundation:

(a)         the occurrence
of a default under or the failure of 0935493 to observe or perform any
obligation, covenant, term, provision or condition contained in this Security
Agreement or the Guarantee Agreement between 0935493 and Foundation; 

(b)         the bankruptcy
or insolvency of 0935493; the filing against 0935493 of a petition in
bankruptcy; the making of an authorized assignment for the benefit of creditors
by 0935493; the appointment of a receiver, receiver-manager or trustee for
0935493 or for any assets of 0935493 or the institution by or against 0935493 of
any other type of insolvency proceeding under the Bankruptcy and Insolvency Act
or otherwise; 

(c)         the
institution by or against 0935493 of any formal or informal proceeding for the
dissolution or liquidation of, settlement of claims against or winding up of
affairs of 0935493; 

(d)         if any
Encumbrances affecting Collateral become enforceable against Collateral; 

(e)         if 0935493
ceases or threatens to cease to carry on business or makes or agrees to make a
bulk sale of assets without complying with applicable law or commits or
threatens to commit an act of bankruptcy; 

(f)         if any
execution, sequestration, extent or other process of any court becomes
enforceable against 0935493 or if a distress or analogous process is levied upon
the assets of 0935493 or any part thereof; 

(g)         if any
certificate, statement, declaration, representation, warranty or audit report
heretofore or hereafter furnished by or on behalf of 0935493 pursuant to or in
connection with this Security Agreement, or otherwise (including, without
limitation, the representations and warranties contained herein) or as an
inducement to Foundation to extend any credit to or to enter into this or any
other agreement with 0935493 or Quantum Solar Power Corp., proves to have been
false in any material respect at the time as of which the facts therein set
forth were stated or certified, or proves to have omitted any substantial
contingent or unliquidated liability or claim against 0935493; or if upon the
date of execution of this Security Agreement, there shall have been any material
adverse change in any of the facts disclosed by any such certificate,
representation, statement, declaration, warranty or audit report, which change
shall not have been disclosed to Foundation at or prior to the time of such
execution; 

(h)         if without the
prior written consent of Foundation, 0935493 creates or permits to exist any
security interest in, charge, encumbrance, lien on or claim against any of the
Collateral which ranks or could in any event rank in priority to or pari passu
with any of the Security Interests created hereby; 

(i)         if 0935493
without the prior written consent of Foundation enters into an amalgamation, a
merger or other similar arrangement with any other person; 

(j)         if Foundation
in good faith believes and has commercially reasonable grounds to believe that
the prospect of payment or performance of any of the Obligations is or is about
to be impaired or that any of the Collateral is or is about to be placed in
jeopardy; 

Page 5 

(k)         if any
proceedings with respect to 0935493 are commenced under the Companies' Creditors
Arrangement Act; 

(l)         if 0935493 is
more than 30 days in arrears of rent payable under any lease or if 0935493
allows any amount outstanding from 0935493 to the Crown pursuant to Federal or
Provincial statute to remain unpaid for a period in excess of 30 days; 

(m)         if 0935493
shall permit any sum which has been admitted as due by it or is not disputed to
be due by it and which forms or is capable of being made a charge upon any of
the Collateral to remain unpaid for 30 days after proceedings have been taken to
enforce the same as such charge; 

(n)         if 0935493
carries on any business that it is restricted from carrying on by its
Memorandum; 

(o)         if in the
opinion of Foundation there is a material adverse change in the financial
condition of 0935493; 

(p)         if legal
proceedings are initiated or legal positions are taken by or against 0935493 or
by any third party which could in the opinion of Foundation have a material
adverse effect on this Security Agreement or the Security Interest or any other
security held by Foundation for all or any part of the Indebtedness; 

(q)         if there is a
change in the ownership or control of 0935493 which is not acceptable to
Foundation. 

	9. 	
      REMEDIES

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

(b)         In addition to
those rights granted herein and in any other agreement now or hereafter in
effect between 0935493 and Foundation and in addition to any other rights
Foundation may have at law or in equity, Foundation shall have, both before and
after default, all rights and remedies of a secured party under the P.P.S.A.
Provided always, that Foundation shall not be liable or accountable for any
failure to exercise its remedies, take possession of, collect, enforce, realize,
sell, lease or otherwise dispose of Collateral or to institute any proceedings
for such purposes. Furthermore, Foundation shall have no obligation to take any
steps to preserve rights against prior parties to any Instrument or Chattel
Paper whether Collateral or Proceeds and whether or not in Foundation's
possession and shall not be liable or accountable for failure to do so. 

(c)         0935493
acknowledges that Foundation may take possession of Collateral wherever it may
be located and by any method permitted by law and 0935493 agrees upon request
from Foundation or any such Receiver to assemble and deliver possession of
Collateral at such place or places as directed by Foundation or any Receiver.

(d)         0935493 agrees
to pay all costs, charges and expenses reasonably incurred by Foundation or any
Receiver appointed by it, whether directly or for services rendered (including
reasonable solicitors and auditors costs and other legal expenses), in preparing
or enforcing this Security Agreement, taking custody of, preserving, repairing,
processing, preparing for disposition and disposing of Collateral and all such
costs, charges and expenses as permitted hereby, shall be secured hereby and
shall be paid from the proceeds of realization, collection or disposition of
Collateral in the following order of priority: 

Page 6 

	 	(i) 	
      to satisfy claims of all secured or unsecured creditors
      ranking in priority to Foundation;

	 	 	 
	 	(ii) 	
      to repay to Foundation all the Indebtedness;

	 	 	 
	 	(iii) 	
      any surplus shall, subject to the rights of other
      creditors, be paid to 0935493.

(e)         Foundation
will give 0935493 such notice, if any, of the date, time and place of any public
sale or of the date after which any private disposition of collateral is to be
made, as may be required by the P.P.S.A. 

(f)         0935493 agrees
that Foundation may exercise its rights and remedies hereunder immediately upon
default, except as may be otherwise provided in the P.P.S.A., and 0935493 hereby
expressly confirms that except as may be otherwise provided herein or in the
P.P.S.A., Foundation has not given any covenant, express or implied, and is
under no obligation to allow 0935493 any period of time to remedy any default
prior to Foundation exercising its rights and remedies hereunder. 

(g)         Foundation
shall not be responsible or liable for any debts contracted by it, for damages
to persons or property or for salaries or non-fulfilment of contracts during any
period when Foundation shall manage the Collateral upon entry, as herein
provided, nor shall Foundation be liable to account as mortgagee in possession
or for anything except actual receipts or be liable for any loss on realization
or for any default or omission for which a mortgagee in possession may be
liable. Foundation shall not be bound to do, observe or perform or to see to the
observance or performance by 0935493 of any obligations or covenants imposed
upon 0935493. 0935493 hereby waives any applicable provision of law permitted to
be waived by it which imposes higher or greater obligations upon Foundation than
aforesaid. 

(h)         0935493 hereby
irrevocably appoints Foundation with full power of substitution, to be the
attorney of 0935493 for and in the name of 0935493 to sign, endorse or execute
under seal or otherwise any deeds, documents, transfers, instruments, demands,
assignments, assurances or consents that 0935493 is obliged to sign, endorse or
execute and generally to use the name of 0935493 and to do all things as may be
necessary or incidental to the exercise of all or any of the powers conferred on
Foundation, as the case may be, pursuant to this Security Agreement. 

	10. 	
      MISCELLANEOUS

(a)         0935493 hereby
authorizes Foundation to file such financing statements, financing change
statements and other documents and do such acts, matters and things (including
completing and adding schedules hereto identifying Collateral or any permitted
Encumbrances affecting Collateral or identifying the locations at which
0935493's business is carried on and Collateral and records relating thereto are
situate) as Foundation may deem appropriate to perfect on an ongoing basis and
continue the Security Interest, to protect and preserve Collateral and to
realize upon the Security Interest and 0935493 hereby irrevocably constitutes
and appoints the Manager or Acting Manager or any officer from time to time of
Foundation with which 0935493 deals the true and lawful attorney of 0935493,
with full power of substitution, to do any of the foregoing in the name of
0935493 whenever and wherever it may be deemed necessary or expedient. 

(b)         Without
limiting any other right of Foundation, whenever Indebtedness is immediately due
and payable or Foundation has the right to declare Indebtedness to be
immediately due and payable (whether or not it has so declared), Foundation may,
in its sole discretion, set off against Indebtedness any and all amounts then
owed to 0935493 by Foundation in any capacity, whether or not due, and
Foundation shall be deemed to have exercised such right to set off immediately
at the time of making its decision to do so even though any charge therefor is
made or entered on Foundation's records subsequent thereto. 

Page 7 

(c)         Upon 0935493's
failure to perform any of its duties hereunder, Foundation may, but shall not be
obligated to, perform any or all of such duties without prejudice to any other
rights and remedies of Foundation hereunder, and 0935493 shall pay to
Foundation, forthwith upon written demand therefor, an amount equal to the
expense incurred by Foundation in so doing plus interest thereon from the date
such expense is incurred until it is paid at the rate of 15% per annum. 

(d)         Foundation may
from time to time and at any time waive in whole or in part any right, benefit
or default under any provision of this Security Agreement but any such waiver of
any right, benefit or default on any occasion shall be deemed not to be a waiver
of any such right, benefit or default thereafter, or of any other right, benefit
or default, as the case may be. No waiver shall be effective unless it is in
writing. 

(e)         Foundation may
grant extensions of time and other indulgences, take and give up security,
accept compositions, compound, compromise, settle, grant releases and discharges
and otherwise deal with 0935493, Quantum, debtors of 0935493, and others and
with Collateral and other security as Foundation may see fit without prejudice
to the liability of 0935493 or Foundation's right to hold and realize the
Security Interest. 

(f)         No delay or
omission by Foundation in exercising any right or remedy hereunder under any
agreement with Quantum or with respect to any Indebtedness or any default shall
operate as a waiver thereof or of any other right or remedy, and no single or
partial exercise thereof shall preclude any other or further exercise thereof or
the exercise of any other right or remedy. Furthermore, Foundation may remedy
any default by 0935493 hereunder or with respect to any Indebtedness in any
reasonable manner without waiving the default remedied and without waiving any
other prior or subsequent default by 0935493. All rights and remedies of
Foundation granted or recognized herein are cumulative and may be exercised at
any time and from time to time independently or in combination. 

(g)         0935493 waives
protest of any Instrument constituting Collateral at any time held by Foundation
on which 0935493 is in any way liable and, subject to the provisions of
P.P.S.A., notice of any other action taken by Foundation. 

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

(i)         Subject to the
requirements of the P.P.S.A. or as otherwise provided herein, whenever either
party hereto is required or entitled to notify or direct the other or to make a
demand or request upon the other, such notice, direction, demand or request
shall be in writing and shall be sufficiently given in the case of Foundation,
if delivered to it or sent by prepaid registered mail addressed to it at its
address herein set forth or as changed pursuant hereto and, in the case of
0935493, if delivered to it or sent by prepaid registered mail addressed to it
at its last address known to Foundation. Either party may notify the other
pursuant hereto of any change in such party's principal address to be used for
the purposes hereof. 

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

(k)         This Security
Agreement shall not operate so as to create any merger or discharge of any of
the Obligations, or of any assignment, transfer, guarantee, mortgage, lien,
contract, promissory note, bill of exchange or
security interest of any form held or which may hereafter be held by Foundation
from 0935493 or from any other person whomsoever. The taking of a judgment with
respect to any of the Obligations will not operate as a merger of any of the
covenants contained in this Security Agreement. 

Page 8 

(l)         All rights and
remedies of Foundation set out in this Security Agreement and in any agreement
with Quantum, and in any other security agreement held by Foundation from
0935493 or any other person whomsoever to secure payment and performance of the
Obligations, are cumulative and no right or remedy contained herein or therein
is intended to be exclusive but each is in addition to every other right or
remedy contained herein or therein or in any future security agreement, or now
or hereafter existing at law, in equity or by statute, or pursuant to any other
agreement between 0935493 and Foundation that may be in effect from time to
time. 

(m)         Foundation
may, without further notice to 0935493, at any time assign, transfer or grant a
security interest in this Security Agreement and the Security Interests created
hereby. 0935493 expressly agrees that the assignee, transferee or secured party,
as the case may be, shall have all of Foundation's rights and remedies under
this Security Agreement and 0935493 will not assert any defense, counterclaim,
right of set-off or otherwise any claim which it now has or hereafter acquires
against Foundation in any action commenced by such assignee, transferee or
secured party, as the case may be, and will pay the Obligations to the assignee,
transferee or secured party, as the case may be, as the Obligations become due.

(n)         Any partial
payment or satisfaction of the Obligations or any ceasing by 0935493 to be
indebted to Foundation shall be deemed not to be a redemption or discharge of
this Security Agreement. 0935493 shall be entitled to a release and discharge of
this Security Agreement upon full payment and satisfaction of all Obligations,
and upon written request by 0935493 and payment to Foundation of a discharge fee
to be fixed by Foundation and payment of all costs, charges, expenses and legal
fees and disbursements (on a solicitor and his own client basis) incurred by
Foundation in connection with the Obligations and such release and discharge.

(o)         This Security
Agreement shall enure to the benefit of Foundation and its successors and
assigns, and shall be binding upon the heirs and executors, if applicable, and
the successors and permitted assigns of 0935493. If more than one Debtor
executes this Security Agreement, the obligations of such Debtors hereunder
shall be joint and several. 

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

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

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

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

(t)         0935493
acknowledges and agrees that in the event it amalgamates with any other company
or companies it is the intention of the parties hereto that the term "0935493"
when used herein shall apply to each of the amalgamating companies and to the
amalgamated company, such that the Security Interest granted hereby shall secure
the "Indebtedness" (as that term is herein defined) of each of the amalgamating
companies and the amalgamated company to Foundation at the time of amalgamation
and any "Indebtedness" of the amalgamated company to Foundation thereafter
arising. The Security Interest shall attach to "Collateral" owned by each company amalgamating with 0935493, and
by the amalgamated company, at the time of amalgamation, and shall attach to any
"Collateral" thereafter owned or acquired by the amalgamated company when such
becomes owned or is acquired. 

Page 9 

(u)         0935493
hereby authorizes Foundation to provide a copy of this Security Agreement and
such other information and documents specified under the P.P.S.A. to any person
entitled pursuant to the P.P.S.A. to demand and receive same. 

(v)         This Security
Agreement and the transactions evidenced hereby shall be governed by and
construed in accordance with the laws of the province of British Columbia as the
same may from time to time be in effect. 

	11. 	
      COPY OF AGREEMENT

	 	 
		
      0935493 hereby acknowledges receipt of a copy of this
      Security Agreement and waives all rights to receive a copy of any
      financing statement or financing change statement filed or registered by
      Foundation or any verification statement issued by the Personal Property
      Registry established under the P.P.S.A. that relates to such financing
      statement or financing change statement.

	 	 
	12. 	
      DEBTOR INFORMATION

	 	 
		
      0935493 represents and warrants that the following
      information is accurate:

BUSINESS DEBTOR NAME AND ADDRESS 

0935493 B.C. LTD. 
Suite 950 – 650 West Georgia Street

Vancouver, BC V6B 4N8 

IN WITNESS WHEREOF 0935493 has executed this Security
Agreement on the date indicated below. 

		 	 EXECUTION 	 	  
	  	 	DATE 	 	  
	Officer Signature(s) 	 	 	  	  	 	0935493 B.C. LTD., 
		 	Y  	M 	D 	 	by its authorized signatories: 
	  	 	 	  	  	 	  
	  	 	 12  	 	 	 	 
	  	 	 	  	  	 	  
	Name: 	 	 	  	  	 	  
	Address: 	 	 	  	  	 	  
	Occupation: 	 	 	  	  	 	  
	 	 	  

       
	 	 	 	 

OFFICER CERTIFICATION: 
Your signature constitutes a
representation that you are a solicitor, notary public or other person
authorized by the Evidence Act, R.S.B.C. 1996, c. 124, to take affidavits for
use in British Columbia and certifies the matters set out in Part 5 of the Land
Title Act as they pertain to the execution of this instrument. 

Page 10 

SCHEDULE "A" 
To Security Agreement 

(DESCRIPTION OF PROPERTY) 

  	Item 	Manufacturer 	Model 	Serial 	Price 	Date Acquired 
	1 	Kurt J. Lesker 	PVD 75 Deposition tool 	PRD072562 	$225,000 	August 7/11 
	2 	FEI 	Nova NanoSEM 430 Ultra-high resolution FESEM
      microscope 	9920646-D9893 	$496,550 	November 2/11 
	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	Total 	$721,550 	 

All located at Simon Fraser University 4D Labs 8888 University
Drive, Burnaby, BC, Canada V5A 1S6. 

Page 11Quantum Solar Power Corp.: Exhibit 10.4 - Filed by newsfilecorp.com

SECURITY AGREEMENT 

IN CONSIDERATION OF Foundation Freehold Ltd.
(“Foundation”) loaning CAD$475,000 to Quantum Solar Power Corp. (“Quantum”), the
undersigned 0935493 B.C. Ltd. ("0935493") hereby covenants, agrees, warrants,
represents, acknowledges and confirms to and with Foundation and creates and
grants the mortgages, charges and security interests hereinafter set forth as
follows: 

	1. 	
      SECURITY INTEREST

1.1         For the
consideration aforesaid, 0935493 does hereby mortgage and charge as and by way
of a fixed and specific charge to and in favour of Foundation, and assign and
transfer to Foundation and grant to Foundation, by way of mortgage, charge,
assignment and transfer, a security interest in all of 0935493's right, title
and interest, in the equipment described in Schedule A. 

1.2         The mortgages,
charges, assignments and transfers and security interests created or granted
pursuant to sections 1.1 are hereinafter collectively called the "Security
Interest", and all property, assets, interests and undertakings (including
Proceeds) subject to the Security Interest or otherwise charged or secured
hereby or expressed to be charged, assigned or transferred or secured by any
instruments supplemental hereto or in implementation hereof are hereinafter
collectively called the "Collateral". 

1.3         The terms
"Chattel Paper", "Document of Title", "Equipment", "Consumer Goods",
"Instrument", "Intangible", "Investment Property", "Proceeds", "Inventory",
"Accessions", "Money", “Securities Accounts”, “Security Entitlements”
“Entitlement Orders” Securities Intermediary”, “Uncertificated Security”,
"financing statement", "financing change statement" and "verification statement"
whenever used herein and whether expressed in the singular or the plural shall,
unless otherwise defined herein or otherwise required by the context, be
interpreted pursuant to their respective meanings when used in the Personal
Property Security Act of the province of British Columbia, as amended from time
to time, which Act, including amendments thereto and any Act substituted
therefor and amendments thereto is herein referred to as the "P.P.S.A.", unless
this Agreement is expressed to be governed by the laws of some jurisdiction
other than British Columbia, in which event the term "P.P.S.A." shall mean and
the above terms shall derive their respective meanings from the Personal
Property Security Act of that jurisdiction, as amended from time to time, or any
Act substituted therefor, as amended from time to time, and in interpreting any
of the above terms the singular shall include and may be read and interpreted to
include the plural, and vice versa. Provided always that the term "Inventory"
when used herein shall include livestock and the young thereof after conception
and crops that become such within six months of execution of this Security
Agreement. Any reference herein to "Collateral" shall, unless the context
otherwise requires, be deemed a reference to "Collateral or any part thereof".
The term "Proceeds" whenever used herein and interpreted as above shall by way
of example include trade-ins, equipment, cash, bank accounts, notes, chattel
paper, goods, contract rights, accounts and any other personal property or
obligation received when such collateral or proceeds are sold, exchanged,
collected or otherwise disposed of. The term "licence" whenever used herein
means any licence or similar right at any time owned or held by 0935493
including but without being limited to a "licence" as defined in the P.P.S.A.,
and the meaning of the term "crops" whenever used herein includes but is not
limited to "crops" as defined in the P.P.S.A. 

1.4        
Attachment 

0935493 hereby acknowledges and
confirms that the Security Interest hereby created attaches upon the execution
of this Security Agreement, that value has been given, and that 0935493 has
rights in the Collateral. 

Page 1 

1.5        
Prohibitions 

Without the prior written consent of
Foundation, 0935493 shall not and shall not have the power to grant, create or
permit to be created any security interest in, charge, encumbrance or lien over,
or claim against any of its property, assets, or undertakings which ranks or
could in any event rank in priority to or pari passu with any Security Interest
created by this Security Agreement. 

	2. 	
      OBLIGATIONS SECURED

	 	 
		
      The Security Interest granted hereby is in addition to
      and not in substitution for any other security interest now or hereafter
      held by Foundation from 0935493 or Quantum Solar Power Corp. or from any
      other person whomsoever and secures and is and shall at all times be
      general and continuing security for the payment, performance and
      satisfaction of any and all liability of 0935493 to Foundation (including
      interest thereon), present or future, direct or indirect, absolute or
      contingent, matured or not, extended or renewed, wheresoever and howsoever
      incurred and any ultimate unpaid balance thereof, including all advances
      on current or running account and all future advances and re-advances, and
      whether the same is from time to time reduced and thereafter increased or
      entirely extinguished and thereafter incurred again and whether 0935493 be
      bound alone or with another or others and whether as principal or surety,
      and for the performance and satisfaction of all obligations of 0935493 to
      Foundation, whether or not contained in this Security Agreement and
      whether or not 0935493 be bound alone or with another or others (all of
      which indebtedness, liability and obligations are hereinafter collectively
      called the "Indebtedness" or the "Obligations"). If the Security Interest
      in the Collateral is not sufficient, in the event of default, to satisfy
      all Indebtedness of 0935493, 0935493 acknowledges and agrees that 0935493
      shall continue to be liable for any Indebtedness remaining outstanding and
      Foundation shall be entitled to pursue full payment thereof.

	 	 
	3. 	
      REPRESENTATIONS AND WARRANTIES OF DEBTOR

	 	 
		
      0935493 represents and warrants and so long as this
      Security Agreement remains in effect shall be deemed to continuously
      represent and warrant that:

(a)         the Collateral
is genuine and owned by 0935493 free of all security interests, mortgages,
liens, claims, charges or other encumbrances (hereinafter collectively called
"Encumbrances"), save for the Security Interest and those Encumbrances shown on
Schedule "A" or hereafter approved in writing by Foundation, prior to their
creation or assumption, and 0935493 has good right and lawful authority to grant
a security interest in the Collateral as provided by this Security Agreement;

(b)         the locations
specified in Schedule "A" with respect to goods constituting Collateral are
accurate and complete; and 

(c)         this Security
Agreement is granted, if 0935493 is a corporation, in accordance with
resolutions of the directors (and of the shareholders, if necessary) of 0935493
or, if 0935493 is a partnership, of the partners of 0935493, and all other
matters and things have been done and performed so as to make the execution and
delivery of this Security Agreement, and the performance of 0935493's
obligations hereunder, legal, valid and binding. 

	4. 	
      COVENANTS OF 0935493

	 	4.1 	
      So long as this Security Agreement remains in effect
      0935493 covenants and agrees:

(a)         to defend the
Collateral for the benefit of Foundation against the claims and demands of all
other parties claiming the same or an interest therein; to keep the Collateral
free from all Encumbrances, except for the Security Interest and those hereafter approved in writing by
Foundation, prior to their creation and not to sell, exchange, transfer, assign,
lease, or otherwise dispose of Collateral or any interest therein without the
prior written consent of Foundation; 

Page 2 

(b)         to notify
Foundation promptly of: 

	 	(i) 	
      any change in the information contained herein or in the
      Schedules hereto relating to the Collateral, including without limitation
      any change in the present location of any Collateral;

	 	 	 
	 	(ii) 	
      the details of any claims or litigation affecting 0935493
      or Collateral; and

	 	 	 
	 	(iii) 	
      any loss or damage to Collateral;

(c)         to keep the
Collateral in good order, condition and repair and not to use Collateral in
violation of the provisions of this Security Agreement or any other agreement
relating to Collateral or any policy insuring Collateral or any applicable
statute, law, by-law, rule, regulation or ordinance; 

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

(e)         to pay all
taxes, rates, levies, assessments and other charges of every nature which may be
lawfully levied, assessed or imposed against or in respect of 0935493 or
Collateral as and when the same become due and payable; 

(f)         to prevent
Collateral from being or becoming an Accession to other property not covered by
this Security Agreement; 

(g)         to carry on
and conduct the business of 0935493 in a proper and efficient manner and so as
to protect and preserve the Collateral and to keep, in accordance with generally
accepted accounting principles, consistently applied, proper books of account
for 0935493's business as well as accurate and complete records concerning
Collateral, and mark any and all such records and Collateral at Foundation's
request so as to indicate the Security Interest; 

(h)         to deliver to
Foundation from time to time promptly upon request: 

	 	(i) 	
      any Documents of Title relating to Collateral;

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

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

	 	 	 
	 	(iv) 	
      such information concerning Collateral, 0935493 and
      0935493's business and affairs as Foundation may reasonably
  request;

(i)         to permit
Foundation and its representatives, at all reasonable times, access to all its
property, assets and undertakings and to all its books of account and records
for the purpose of inspection and to render all assistance necessary for such
inspection; 

Page 3 

(j)         to forthwith
pay all security interests, charges, encumbrances, liens and claims which rank
or could in any event rank in priority to any security interest created hereby
and to forthwith reimburse and indemnify Foundation for all costs, charges,
expenses and legal fees and disbursements which may be incurred by Foundation
in: 

	 	(i) 	
      inspecting the Collateral;

	 	 	 
	 	(ii) 	
      perfecting and registering this Security Agreement or
      notice of it and other documents, whether or not relating to this Security
      Agreement;

	 	 	 
	 	(iii) 	
      investigating title to the Collateral;

	 	 	 
	 	(iv) 	
      taking, recovering and keeping possession of the
      Collateral;

	 	 	 
	 	(v) 	
      all other actions and proceedings taken in connection
      with the preservation of the Collateral and the enforcement of this
      Security Agreement and of any other security interest held by Foundation
      as security for the Obligations of Quantum or
0935493.

	5. 	
      USE AND VERIFICATION OF COLLATERAL

	 	 
		
      Subject to compliance with 0935493's covenants contained
      herein and section 4 hereof, 0935493 may, until default, possess, operate,
      collect, use and enjoy and deal with Collateral in the ordinary course of
      0935493's business in any manner not inconsistent with the provisions
      hereof; provided always that Foundation shall have the right at any time
      and from time to time to verify the existence and state of the Collateral
      in any manner Foundation may consider appropriate and 0935493 agrees to
      furnish all assistance and information and to perform all such acts as
      Foundation may reasonably request in connection therewith and for such
      purpose to grant to Foundation or its agents access to all places where
      Collateral may be located and to all premises occupied by
  0935493.

	 	 
	6. 	
      INSURANCE

6.1         0935493
covenants that at all times while this Security Agreement is in effect 0935493
shall: 

(a)         maintain or
cause to be maintained insurance on the Collateral with an insurer, of kinds,
for amounts and payable to such person or persons, all as Foundation may
require, and in particular but without limitation maintain insurance on the
Collateral to its full insurable value against loss or damage by fire including
extended coverage endorsement and in the case of motor vehicles and other mobile
Collateral, maintain insurance against theft; and 

(b)         pay all
premiums in connection with such insurance, and deliver all such policies to
Foundation, if it so requires. 

6.2         If proceeds of
any insurance required hereunder become payable Foundation may, in its absolute
discretion, apply such proceeds to such part or parts of the Indebtedness as
Foundation may see fit or Foundation may release any such insurance proceeds to
0935493 for the purpose of repairing, replacing or rebuilding, but any release
of insurance proceeds to 0935493 shall not operate as a payment on account of
the Indebtedness or in any way affect this Security Agreement. 

6.3         0935493 will
forthwith, on the happening of loss or damage to the Collateral, notify
Foundation thereof and furnish to Foundation at 0935493's expense any necessary
proof and do any necessary act to enable Foundation to obtain payment of the
insurance proceeds, but nothing herein contained shall limit
Foundation's right to submit to the insurer a proof of loss on its own behalf.

Page 4 

6.4         0935493 hereby
irrevocably authorizes and directs the insurer under any policy of insurance
required hereunder to include the name of Foundation as a loss payee on any
cheque or draft which may be issued with respect to a claim under and by virtue
of such insurance, and the production by Foundation to any insurer of a
certified copy of this Security Agreement shall be its full and complete
authority for so doing. 

6.5         If 0935493
fails to maintain insurance as required hereby, Foundation may, but shall not be
obliged to, maintain or effect such insurance coverage, or so much thereof as
Foundation considers necessary for its protection. 

	7. 	
      RESTRICTIONS ON SALE OR DISPOSAL OF
    COLLATERAL

7.1         Except as
herein provided, without the prior written consent of Foundation, 0935493 will
not: 

(a)         sell, lease or
otherwise dispose of the Collateral; 

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

(c)         move or
transfer the Collateral from the jurisdictions in which the Security Interests
hereby created have been perfected. 

	8. 	
      EVENTS OF DEFAULT

8.1         The happening
of any of the following events or conditions (each a "default") shall constitute
default hereunder unless waived by Foundation: 

(a)         the occurrence
of a default under or the failure of 0935493 to observe or perform any
obligation, covenant, term, provision or condition contained in this Security
Agreement or the Guarantee Agreement between 0935493 and Foundation; 

(b)         the bankruptcy
or insolvency of 0935493; the filing against 0935493 of a petition in
bankruptcy; the making of an authorized assignment for the benefit of creditors
by 0935493; the appointment of a receiver, receiver-manager or trustee for
0935493 or for any assets of 0935493 or the institution by or against 0935493 of
any other type of insolvency proceeding under the Bankruptcy and Insolvency Act
or otherwise; 

(c)         the
institution by or against 0935493 of any formal or informal proceeding for the
dissolution or liquidation of, settlement of claims against or winding up of
affairs of 0935493; 

(d)         if any
Encumbrances affecting Collateral become enforceable against Collateral; 

(e)         if 0935493
ceases or threatens to cease to carry on business or makes or agrees to make a
bulk sale of assets without complying with applicable law or commits or
threatens to commit an act of bankruptcy; 

(f)         if any
execution, sequestration, extent or other process of any court becomes
enforceable against 0935493 or if a distress or analogous process is levied upon
the assets of 0935493 or any part thereof; 

(g)         if any
certificate, statement, declaration, representation, warranty or audit report
heretofore or hereafter furnished by or on behalf of 0935493 pursuant to or in
connection with this Security Agreement, or otherwise (including, without
limitation, the representations and warranties
contained herein) or as an inducement to Foundation to extend any credit to or
to enter into this or any other agreement with 0935493 or Quantum Solar Power
Corp., proves to have been false in any material respect at the time as of which
the facts therein set forth were stated or certified, or proves to have omitted
any substantial contingent or unliquidated liability or claim against 0935493;
or if upon the date of execution of this Security Agreement, there shall have
been any material adverse change in any of the facts disclosed by any such
certificate, representation, statement, declaration, warranty or audit report,
which change shall not have been disclosed to Foundation at or prior to the time
of such execution; 

Page 5 

(h)         if without the
prior written consent of Foundation, 0935493 creates or permits to exist any
security interest in, charge, encumbrance, lien on or claim against any of the
Collateral which ranks or could in any event rank in priority to or pari passu
with any of the Security Interests created hereby; 

(i)         if 0935493
without the prior written consent of Foundation enters into an amalgamation, a
merger or other similar arrangement with any other person; 

(j)         if Foundation
in good faith believes and has commercially reasonable grounds to believe that
the prospect of payment or performance of any of the Obligations is or is about
to be impaired or that any of the Collateral is or is about to be placed in
jeopardy; 

(k)         if any
proceedings with respect to 0935493 are commenced under the Companies' Creditors
Arrangement Act; 

(l)         if 0935493 is
more than 30 days in arrears of rent payable under any lease or if 0935493
allows any amount outstanding from 0935493 to the Crown pursuant to Federal or
Provincial statute to remain unpaid for a period in excess of 30 days; 

(m)         if 0935493
shall permit any sum which has been admitted as due by it or is not disputed to
be due by it and which forms or is capable of being made a charge upon any of
the Collateral to remain unpaid for 30 days after proceedings have been taken to
enforce the same as such charge; 

(n)         if 0935493
carries on any business that it is restricted from carrying on by its
Memorandum; 

(o)         if in the
opinion of Foundation there is a material adverse change in the financial
condition of 0935493; 

(p)         if legal
proceedings are initiated or legal positions are taken by or against 0935493 or
by any third party which could in the opinion of Foundation have a material
adverse effect on this Security Agreement or the Security Interest or any other
security held by Foundation for all or any part of the Indebtedness; 

(q)         if there is a
change in the ownership or control of 0935493 which is not acceptable to
Foundation. 

	9. 	
      REMEDIES

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

Page 6 

(b)         In addition to
those rights granted herein and in any other agreement now or hereafter in
effect between 0935493 and Foundation and in addition to any other rights
Foundation may have at law or in equity, Foundation shall have, both before and
after default, all rights and remedies of a secured party under the P.P.S.A.
Provided always, that Foundation shall not be liable or accountable for any
failure to exercise its remedies, take possession of, collect, enforce, realize,
sell, lease or otherwise dispose of Collateral or to institute any proceedings
for such purposes. Furthermore, Foundation shall have no obligation to take any
steps to preserve rights against prior parties to any Instrument or Chattel
Paper whether Collateral or Proceeds and whether or not in Foundation's
possession and shall not be liable or accountable for failure to do so. 

(c)         0935493
acknowledges that Foundation may take possession of Collateral wherever it may
be located and by any method permitted by law and 0935493 agrees upon request
from Foundation or any such Receiver to assemble and deliver possession of
Collateral at such place or places as directed by Foundation or any Receiver.

(d)         0935493 agrees
to pay all costs, charges and expenses reasonably incurred by Foundation or any
Receiver appointed by it, whether directly or for services rendered (including
reasonable solicitors and auditors costs and other legal expenses), in preparing
or enforcing this Security Agreement, taking custody of, preserving, repairing,
processing, preparing for disposition and disposing of Collateral and all such
costs, charges and expenses as permitted hereby, shall be secured hereby and
shall be paid from the proceeds of realization, collection or disposition of
Collateral in the following order of priority: 

	 	(i) 	
      to satisfy claims of all secured or unsecured creditors
      ranking in priority to Foundation;

	 	 	 
	 	(ii) 	
      to repay to Foundation all the Indebtedness;

	 	 	 
	 	(iii) 	
      any surplus shall, subject to the rights of other
      creditors, be paid to 0935493.

(e)         Foundation
will give 0935493 such notice, if any, of the date, time and place of any public
sale or of the date after which any private disposition of collateral is to be
made, as may be required by the P.P.S.A. 

(f)         0935493 agrees
that Foundation may exercise its rights and remedies hereunder immediately upon
default, except as may be otherwise provided in the P.P.S.A., and 0935493 hereby
expressly confirms that except as may be otherwise provided herein or in the
P.P.S.A., Foundation has not given any covenant, express or implied, and is
under no obligation to allow 0935493 any period of time to remedy any default
prior to Foundation exercising its rights and remedies hereunder. 

(g)         Foundation
shall not be responsible or liable for any debts contracted by it, for damages
to persons or property or for salaries or non-fulfilment of contracts during any
period when Foundation shall manage the Collateral upon entry, as herein
provided, nor shall Foundation be liable to account as mortgagee in possession
or for anything except actual receipts or be liable for any loss on realization
or for any default or omission for which a mortgagee in possession may be
liable. Foundation shall not be bound to do, observe or perform or to see to the
observance or performance by 0935493 of any obligations or covenants imposed
upon 0935493. 0935493 hereby waives any applicable provision of law permitted to
be waived by it which imposes higher or greater obligations upon Foundation than
aforesaid. 

Page 7 

(h)         0935493 hereby
irrevocably appoints Foundation with full power of substitution, to be the
attorney of 0935493 for and in the name of 0935493 to sign, endorse or execute
under seal or otherwise any deeds, documents, transfers, instruments, demands,
assignments, assurances or consents that 0935493 is obliged to sign, endorse or
execute and generally to use the name of 0935493 and to do all things as may be
necessary or incidental to the exercise of all or any of the powers conferred on
Foundation, as the case may be, pursuant to this Security Agreement. 

	10. 	
      MISCELLANEOUS

(a)         0935493 hereby
authorizes Foundation to file such financing statements, financing change
statements and other documents and do such acts, matters and things (including
completing and adding schedules hereto identifying Collateral or any permitted
Encumbrances affecting Collateral or identifying the locations at which
0935493's business is carried on and Collateral and records relating thereto are
situate) as Foundation may deem appropriate to perfect on an ongoing basis and
continue the Security Interest, to protect and preserve Collateral and to
realize upon the Security Interest and 0935493 hereby irrevocably constitutes
and appoints the Manager or Acting Manager or any officer from time to time of
Foundation with which 0935493 deals the true and lawful attorney of 0935493,
with full power of substitution, to do any of the foregoing in the name of
0935493 whenever and wherever it may be deemed necessary or expedient. 

(b)         Without
limiting any other right of Foundation, whenever Indebtedness is immediately due
and payable or Foundation has the right to declare Indebtedness to be
immediately due and payable (whether or not it has so declared), Foundation may,
in its sole discretion, set off against Indebtedness any and all amounts then
owed to 0935493 by Foundation in any capacity, whether or not due, and
Foundation shall be deemed to have exercised such right to set off immediately
at the time of making its decision to do so even though any charge therefor is
made or entered on Foundation's records subsequent thereto. 

(c)         Upon 0935493's
failure to perform any of its duties hereunder, Foundation may, but shall not be
obligated to, perform any or all of such duties without prejudice to any other
rights and remedies of Foundation hereunder, and 0935493 shall pay to
Foundation, forthwith upon written demand therefor, an amount equal to the
expense incurred by Foundation in so doing plus interest thereon from the date
such expense is incurred until it is paid at the rate of 15% per annum. 

(d)         Foundation may
from time to time and at any time waive in whole or in part any right, benefit
or default under any provision of this Security Agreement but any such waiver of
any right, benefit or default on any occasion shall be deemed not to be a waiver
of any such right, benefit or default thereafter, or of any other right, benefit
or default, as the case may be. No waiver shall be effective unless it is in
writing. 

(e)         Foundation may
grant extensions of time and other indulgences, take and give up security,
accept compositions, compound, compromise, settle, grant releases and discharges
and otherwise deal with 0935493, Quantum, debtors of 0935493, and others and
with Collateral and other security as Foundation may see fit without prejudice
to the liability of 0935493 or Foundation's right to hold and realize the
Security Interest. 

(f)         No delay or
omission by Foundation in exercising any right or remedy hereunder under any
agreement with Quantum or with respect to any Indebtedness or any default shall
operate as a waiver thereof or of any other right or remedy, and no single or
partial exercise thereof shall preclude any other or further exercise thereof or
the exercise of any other right or remedy. Furthermore, Foundation may remedy
any default by 0935493 hereunder or with respect to any
Indebtedness in any reasonable manner without waiving the default remedied and
without waiving any other prior or subsequent default by 0935493. All rights and
remedies of Foundation granted or recognized herein are cumulative and may be
exercised at any time and from time to time independently or in combination.

Page 8 

(g)         0935493 waives
protest of any Instrument constituting Collateral at any time held by Foundation
on which 0935493 is in any way liable and, subject to the provisions of
P.P.S.A., notice of any other action taken by Foundation. 

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

(i)         Subject to the
requirements of the P.P.S.A. or as otherwise provided herein, whenever either
party hereto is required or entitled to notify or direct the other or to make a
demand or request upon the other, such notice, direction, demand or request
shall be in writing and shall be sufficiently given in the case of Foundation,
if delivered to it or sent by prepaid registered mail addressed to it at its
address herein set forth or as changed pursuant hereto and, in the case of
0935493, if delivered to it or sent by prepaid registered mail addressed to it
at its last address known to Foundation. Either party may notify the other
pursuant hereto of any change in such party's principal address to be used for
the purposes hereof. 

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

(k)         This Security
Agreement shall not operate so as to create any merger or discharge of any of
the Obligations, or of any assignment, transfer, guarantee, mortgage, lien,
contract, promissory note, bill of exchange or security interest of any form
held or which may hereafter be held by Foundation from 0935493 or from any other
person whomsoever. The taking of a judgment with respect to any of the
Obligations will not operate as a merger of any of the covenants contained in
this Security Agreement. 

(l)         All rights and
remedies of Foundation set out in this Security Agreement and in any agreement
with Quantum, and in any other security agreement held by Foundation from
0935493 or any other person whomsoever to secure payment and performance of the
Obligations, are cumulative and no right or remedy contained herein or therein
is intended to be exclusive but each is in addition to every other right or
remedy contained herein or therein or in any future security agreement, or now
or hereafter existing at law, in equity or by statute, or pursuant to any other
agreement between 0935493 and Foundation that may be in effect from time to
time. 

(m)         Foundation
may, without further notice to 0935493, at any time assign, transfer or grant a
security interest in this Security Agreement and the Security Interests created
hereby. 0935493 expressly agrees that the assignee, transferee or secured party,
as the case may be, shall have all of Foundation's rights and remedies under
this Security Agreement and 0935493 will not assert any defense, counterclaim,
right of set-off or otherwise any claim which it now has or hereafter acquires
against Foundation in any action commenced by such assignee, transferee or
secured party, as the case may be, and will pay the Obligations to the
assignee, transferee or secured party, as the case may be, as the Obligations
become due. 

Page 9 

(n)         Any partial
payment or satisfaction of the Obligations or any ceasing by 0935493 to be
indebted to Foundation shall be deemed not to be a redemption or discharge of
this Security Agreement. 0935493 shall be entitled to a release and discharge of
this Security Agreement upon full payment and satisfaction of all Obligations,
and upon written request by 0935493 and payment to Foundation of a discharge fee
to be fixed by Foundation and payment of all costs, charges, expenses and legal
fees and disbursements (on a solicitor and his own client basis) incurred by
Foundation in connection with the Obligations and such release and discharge. 

(o)         This Security
Agreement shall enure to the benefit of Foundation and its successors and
assigns, and shall be binding upon the heirs and executors, if applicable, and
the successors and permitted assigns of 0935493. If more than one Debtor
executes this Security Agreement, the obligations of such Debtors hereunder
shall be joint and several. 

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

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

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

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

(t)         0935493
acknowledges and agrees that in the event it amalgamates with any other company
or companies it is the intention of the parties hereto that the term "0935493"
when used herein shall apply to each of the amalgamating companies and to the
amalgamated company, such that the Security Interest granted hereby shall secure
the "Indebtedness" (as that term is herein defined) of each of the amalgamating
companies and the amalgamated company to Foundation at the time of amalgamation
and any "Indebtedness" of the amalgamated company to Foundation thereafter
arising. The Security Interest shall attach to "Collateral" owned by each
company amalgamating with 0935493, and by the amalgamated company, at the time
of amalgamation, and shall attach to any "Collateral" thereafter owned or
acquired by the amalgamated company when such becomes owned or is acquired. 

(u)         0935493 hereby
authorizes Foundation to provide a copy of this Security Agreement and such
other information and documents specified under the P.P.S.A. to any person
entitled pursuant to the P.P.S.A. to demand and receive same. 

(v)         This Security
Agreement and the transactions evidenced hereby shall be governed by and
construed in accordance with the laws of the province of British Columbia as the
same may from time to time be in effect. 

Page 10 

	11. 	
      COPY OF AGREEMENT

	 	 
		
      0935493 hereby acknowledges receipt of a copy of this
      Security Agreement and waives all rights to receive a copy of any
      financing statement or financing change statement filed or registered by
      Foundation or any verification statement issued by the Personal Property
      Registry established under the P.P.S.A. that relates to such financing
      statement or financing change statement.

	 	 
	12. 	
      DEBTOR INFORMATION

	 	 
		
      0935493 represents and warrants that the following
      information is accurate:

BUSINESS DEBTOR NAME AND ADDRESS 

0935493 B.C. LTD. 
Suite 950 – 650 West Georgia Street

Vancouver, BC V6B 4N8 

IN WITNESS WHEREOF 0935493 has executed this Security
Agreement on the date indicated below. 

		 	EXECUTION  	 	  
	  	 	DATE 	 	  
	Officer Signature(s) 	 	 	  	  	 	0935493 B.C. LTD., 
		 	Y  	M 	D 	 	by its authorized signatories: 
	  	 	 	  	  	 	  
		 	 12 	  	  	 	/s/ Daryl J. Ehrmantraut 
	  	 	 	  	  	 	  
	Name: 	 	 	  	  	 	  
	Address: 	 	 	  	  	 	  
	Occupation: 	 	 	  	  	 	  
	 	 	  

       
	 	 	 	 

OFFICER CERTIFICATION: 
Your signature constitutes a
representation that you are a solicitor, notary public or other person
authorized by the Evidence Act, R.S.B.C. 1996, c. 124, to take affidavits for
use in British Columbia and certifies the matters set out in Part 5 of the Land
Title Act as they pertain to the execution of this instrument. 

Page 11 

SCHEDULE "A" 
To Security Agreement 

(DESCRIPTION OF PROPERTY) 

	Item 	Manufacturer 	Model 	Serial 	Price 	Date Acquired 
	1 	Kurt J. Lesker 	PVD 75 Deposition tool 	PRD072562 	$225,000 	August 7/11 
	2 	FEI 	Nova NanoSEM 430 Ultra-high resolution FESEM
      microscope 	9920646-D9893 	$496,550 	November 2/11 
	  	  	  	Total 	$721,550 	 

All located at Simon Fraser University 4D Labs 8888 University
Drive, Burnaby, BC, Canada V5A 1S6. 

Page 12

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