Document:

Filed by sedaredgar.com - Stockhouse Inc. - Exhibit 10.19

Exhibit 10.19 

GENERAL SECURITY AGREEMENT 

THIS GENERAL SECURITY AGREEMENT is dated for reference
October <>, 2008. 

BETWEEN: 

                         STOCKGROUP
MEDIA INC., a company incorporated
under 
                         the
British Columbia Business Corporations Act
(BC0495849), 
                         having
an office at Suite 500 - 750 West Pender Street,
Vancouver,
                         
BC V6C 2T7 

                         (the
“Debtor”), 

AND: 

                         <>,

                         and

                         <>,

                         (collectively,
the “Secured Parties”).

ARTICLE 1 
DEFINITIONS 

1.1                 
 Definitions 

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

	 	(a) 	
      “Act” means the Personal Property Security Act
      of British Columbia and the regulations thereunder, as amended,
      restated or replaced by successor legislation of comparable
  effect.

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

	 	 	 
	 	(c) 	
      “Collateral” means all of the Debtor’s present and
      after-acquired personal property and interests therein of every nature and
      kind and wherever situate, including all personal property and interests
      therein now or hereafter held by the Debtor in trust for any person(s) or
      by any person(s) in trust for the Debtor. including all proceeds
      (including proceeds) derived therefrom that are present or after-acquired
      personal property or other assets or undertakings of any nature or kind,
      tangible or intangible, legal or equitable, wherever the same may be
      situate,

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      (including proceeds derived directly or indirectly from
      any dealing with the personal property charged hereby (including
      proceeds), all rights to insurance payments and other payments as
      indemnity or compensation for loss thereof or damage thereto, and all
      payments made in total or partial discharge or redemption of securities,
      instruments, chattel paper or intangibles (including accounts) comprised
      therein).

	 	 	 
	 	(d) 	
      “Debtor” means the party so described above and
      its successors and assigns, whether immediate or derivative.

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

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

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

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

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

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

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

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

	 	 	 
	 	(ii) 	
      any Encumbrance described or referred to in Schedule “A”
      hereto.

	 	(l) 	
      “Secured Obligations” means the obligations of
      Stockhouse Inc. to the Secured Parties pursuant to the Debenture Purchase
      Agreements dated October <>, 2008 (including all future advances and
      re-advances), whether direct or indirect, absolute or contingent, joint,
      several or joint and several, matured or not, extended or renewed,
      wherever and however incurred, of whatever nature or kind and whether or
      not evidenced or secured by any Other Document, or provided for
    herein.

	 	 	 
	 	(m) 	
      “Secured Parties” means the parties so described
      above and their successors and assigns, whether immediate or
      derivative.

1.2                 
 Applicability of Act 

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

ARTICLE 2 
SECURITY INTEREST 

2.1                 
 Creation of Security Interest 

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

	 	(a) 	
      Fixed Security Interest: the Debtor:

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

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

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

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

2.2                  
 Exceptions 

                         There
shall be excepted out of or excluded from the assignment(s), charge(s) and or
security interest(s) created by this Agreement: 

	 	(a) 	
      Last 10 Days of Lease: the last 10 days of the
      term created by any lease or agreement therefor (but the Debtor shall
      stand possessed of the reversion thereby

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      remaining upon trust to assign and dispose thereof to any
      third party as the Secured Parties shall direct);

	 	 	 
	 	(b) 	
      Consumer Goods: any consumer goods of the Debtor;
      and

	 	 	 
	 	(c) 	
      Agreements Requiring Consent: with respect to each
      agreement or other asset that requires the consent or approval of another
      party thereto for the creation of a security interest or charge therein,
      the security interests or charges created hereby will not become effective
      therein until all such consents or approvals have been obtained, or until
      such other assurances as may be acceptable to the Secured Parties have
      been received, but until then the Debtor shall stand possessed of such
      asset in trust to dispose of as the Secured Parties may
  direct.

                         There
shall be excepted out of or excluded from the assignment provided for in
subparagraph 2.1(a)(iii), all Intellectual Property now or hereafter included in
the Collateral. 

2.3                 
   Attachment

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

2.4                 
   Multiple Debtors

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

ARTICLE 3 
SECURED OBLIGATIONS 

3.1                  
Secured Obligations 

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

ARTICLE 4 
DEBTOR’S REPRESENTATIONS AND WARRANTIES

4.1                 
 General 

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

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	 	(a) 	
      Incorporation: The Debtor, if a body corporate, is
      duly incorporated, properly organized and validly existing under the laws
      of the Province of British Columbia.

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

	 	 	 	 
	 		(i) 	
      to own real and personal property; and

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

	 	 	 	 
	 	(c) 	
      Proceedings and Enforceability: The Debtor, if a
      body corporate or partnership, represents and warrants that this Agreement
      is granted in accordance with resolutions of the directors (and of the
      shareholders as applicable) or the partners, as the case may be, of the
      Debtor or the general partner of the Debtor as the case may be and all
      other matters and things have been done and performed so as to authorize
      and make the execution and delivery of this Agreement and the performance
      of the Secured Obligations hereunder, a valid and legally binding
      obligation of the Debtor enforceable in accordance with its terms, subject
      only to bankruptcy, insolvency or other statutes or judicial decisions
      affecting the enforcement of creditors’ rights generally and to general
      principles of equity.

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

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

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

	 	 	 	 
	 	(g) 	
      No Liens: Except for Permitted Encumbrances, the
      Debtor has paid and discharged all claims and demands of all employees,
      contractors, subcontractors, material men, mechanics, carriers,
      warehousemen, landlords, and other like

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      persons, and all governmental taxes, assessments,
      withholdings, remittances, charges, levies, and claims levied or imposed,
      which, if unpaid, become or might become an Encumbrance upon any or all of
      the properties, assets, earnings, or operations of the Debtor.

	 	 	 
	 	(h) 	
      Ownership and Collateral Free of Encumbrances: The
      Debtor is the owner of or has rights in the Collateral free and clear of
      all Encumbrances whatsoever save only Permitted Encumbrances. The Debtor
      has not, within the last 60 days, acquired rights in the Collateral from a
      vendor, lessor or other person where its chief executive office or
      principal residence is, or within the last 60 days has been, located
      outside of British Columbia.

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

	 	 	 
	 	(j) 	
      Insurance: The Collateral is insured in accordance
      with the terms hereof.

	 	 	 
	 	(k) 	
      Legal and Trade Names: Each name of the Debtor
      (including its name in any French or combined English-French form) is set
      out on the first page hereof, and the Debtor has not had, used, or carried
      on business under, and will not at any time have, use or carry on business
      under any other name (including any French or combined English-French
      form) except upon giving 15 days’ prior written notice to the Secured
      Parties.

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

ARTICLE 5 
DEBTOR’S COVENANTS 

5.1                  
General Covenants 

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

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

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

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

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	 	(d) 	
      Conduct of Business: The Debtor shall carry on and
      conduct its affairs in a proper and efficient manner so as to protect and
      preserve the Collateral.

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

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

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

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

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

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

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

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

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

- 8 - 

	 		
      Secured Parties the opportunity to retrieve, record or
      copy such information and data. The Secured Parties are hereby authorized
      to reproduce and retain a copy of any such information and data in any
      format whatsoever.

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

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

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

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

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

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

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

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

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

- 9 - 

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

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

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

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

	 	 	 	 
	 		
      provided that so long as no Event of Default remains
      outstanding, the Debtor may sell or lease inventory in the ordinary course
      of business and for the purpose of carrying on the same, and subject to
      the provisions of Section 8.1(a) hereof use monies available to the
      Debtor.

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

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

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

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

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

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

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

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

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

- 10 - 

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

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

	 	(w) 	
      Payments: The Debtor shall forthwith
pay:

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

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

	 	 	 	 
	 		(iii) 	
      Prior Encumbrances: All Encumbrances which rank or
      could in any event rank in priority to or pari passu with the
      security constituted by this Agreement.

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

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

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

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

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

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

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

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	 	(y) 	
      Intellectual Property: The Debtor shall:

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

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

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

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

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

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

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

ARTICLE 6 
PERFORMANCE OF OBLIGATIONS 

6.1                 
 Perform Obligations 

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

- 12 - 

ARTICLE 7 
DEFAULT 

7.1                 
 Default 

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

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

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

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

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

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

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

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

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

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

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

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

- 13 - 

	 	(l) 	
      if any of the moneys secured under this Agreement as part
      of the Secured Obligations are used for any purpose other than as declared
      to and agreed upon by the Secured Parties; or

	 	 	 	 
	 	(m) 	
      if an Obligant is a corporation and:

	 	 	 	 
	 		(i) 	
      it authorizes the purchase or charging of a majority of
      its shares without the prior written consent of the Secured Parties;
    or

	 	 	 	 
	 		(ii) 	
      one of its members commences an action against it which
      action relates to the Secured Obligations, or gives a notice of dissent in
      accordance with the provisions of the Business Corporations Act of
      British Columbia, or amendments thereto or a similar notice by a
      shareholder under other applicable legislation; or

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

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

	 	 	 	 
	 		(v) 	
      there is any change in its beneficial ownership of its
      shares from the ownership of same which exists as of the date of the
      execution of this Agreement by the Debtor; or

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

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

	 	 	 	 
	 	(p) 	
      if in the opinion of the Secured Parties:

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

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

ARTICLE 8 
RIGHTS, REMEDIES AND POWERS 

8.1                 
 Before and After Default 

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

	 	(a) 	
      Inspection and Records: to inspect the Collateral
      whenever the Secured Parties consider it appropriate to do so, and to
      inspect, review, audit and copy any or all information relating thereto or
      to the Collateral or to any other transactions

- 14 - 

	 		
      between the parties hereto wherever and however such
      information is stored, and for such purposes may at any time with or
      without notice enter into and upon any lands, buildings and premises where
      the Collateral or any such information is or may be;

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

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

	 	 	 
	 	(d) 	
      Extensions and Other Indulgences: to grant
      extensions of time and other indulgences, take and give up security,
      accept compositions, compound, compromise, settle, grant releases and
      discharges, refrain from perfecting or maintaining perfection of
      Encumbrances, and otherwise deal with the Debtor and other obligors of the
      Debtor, sureties and others and with the Collateral and Encumbrances as
      the Secured Parties may consider appropriate, all without prejudice to the
      liability of the Debtor or the Secured Parties’ rights to hold and realize
      on the security interest created hereby.

8.2                  
After Default 

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

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

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

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

- 15 - 

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

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

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

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

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

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

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

	 	 	 
	 	(k) 	
      Institution and Defence of Actions: to institute
      and prosecute all suits, proceedings and actions which the Secured Parties
      may consider necessary or advisable for the proper protection or
      enforcement of the Collateral, and to defend

- 16 - 

	 		
      all suits, proceedings and actions against the Debtor,
      and to appear in and conduct the prosecution and defence of any suit,
      proceeding or action then pending or thereafter instituted, and to appeal
      any suit, proceeding or action;

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

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

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

8.3                 
 Receiver 

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

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

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

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

- 17 - 

	 		
      the amounts from time to time payable by virtue of such
      certificates will form an Encumbrance in and upon the Collateral in
      priority to the security interest created hereby.

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

8.4                  
Rights of Transferees 

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

8.5                 
   Limitations

                         Notwithstanding
anything herein contained to the contrary: 

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

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

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

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

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

- 18 - 

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

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

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

8.6                 
 Liability of Secured Parties

	 	(a) 	
      No Responsibility for Debt: The Secured Parties
      will not be responsible or liable for any debts contracted by it, for
      damages to persons or property or for salaries or non-fulfilment of
      contracts during any period when the Secured Parties will manage the
      Collateral upon entry of the business of the Debtor, as herein provided,
      nor will the Secured Parties be liable to account as mortgagee in
      possession or for anything except actual receipts or be liable for any
      loss or realization or for any default or omission for which a mortgagee
      in possession may be liable.

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

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

8.7                   Application
of Proceeds 

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

- 19 - 

applicable legislation and the claims of any creditors ranking
in priority to the security interest created hereby): 

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

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

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

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

8.8                  
 Appointment of Attorney 

                         To
enable the Secured Parties and any Receiver to exercise the rights, remedies and
powers conferred upon them, whether by this Agreement or otherwise, upon the
occurrence and during the continuance of an Event of Default the Debtor hereby
appoints each of the Secured Parties and the Receiver, whoever they may be to be
the lawful attorney of the Debtor to do any act or thing and to execute any
assurance or instrument (in the name of the Debtor or otherwise) in the exercise
of the powers conferred upon them (including carrying out any disposition of the
Collateral and for such purpose to affix the Debtor common seal to any deeds,
transfers, conveyances, assignments, assurances and things which the Debtor
ought to execute to complete any disposition of the Collateral or alternatively
to execute the same under its own seal by conveying in the name of and on behalf
of Debtor and under its own seal, and any deed or other thing executed by the
Secured Parties or the Receiver under its own seal pursuant hereto will have the
same effect as if it were under the common seal of the Debtor) or which the
Debtor ought to do or execute hereunder and to exercise any or all of the
rights, remedies and powers of the Debtor in carrying out or attempting to carry
out any or all of the rights, remedies and powers conferred upon them. This
power of attorney will be irrevocable and coupled with an interest and will
survive the death, disability, insolvency or other legal incapacity of the
Debtor. 

8.9                 
   Rights Cumulative

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

- 20 - 

8.10               
  Order of Realization

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

8.11               
  Waiver

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

ARTICLE 9 
MISCELLANEOUS 

9.1                   
Costs 

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

	 	(a) 	
      inspecting the Collateral;

	 	 	 
	 	(b) 	
      negotiating, preparing, perfecting and registering this
      Agreement or any renewal or modification hereof, including the renewal of
      registration of any financing statement registered or land title office
      notice filed in connection with the security interests hereby
    created;

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

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

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

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

- 21 - 

9.2                 
   No Merger

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

9.3                 
   No Obligation to Make Advances

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

9.4                 
   Set-Off or Counterclaim

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

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

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

9.5                 
 Statutory Waiver 

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

9.6                  
   Assignment

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

- 22 - 

9.7                  
   Provisions Reasonable

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

9.8                  
   Release by Debtor

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

9.9                  
   Indemnity

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

9.10               
   Information to third parties

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

9.11               
   Further Assurances

                         The
Debtor shall at all times, do, execute, acknowledge and deliver or cause to be
done, executed, acknowledged or delivered all such further acts, deeds,
transfers, assignments, security agreements and assurances as the Secured
Parties may reasonably require in order to give effect to the provisions hereof
and for the better granting, transferring, assigning, charging, setting over,
assuring, confirming or perfecting the security interests hereby created and the
priority accorded to them by law or under this Agreement. 

9.12               
   Notices

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

- 23 - 

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

	 	 	 
	 		
      [<> NTD: insert names and addresses of secured
      parties]

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

	 	 	 
	 		
      STOCKGROUP MEDIA INC.

	 		
      Suite 500 - 750 West Pender Street 
Vancouver, BC V6C
      2T7

	 	 	 
	 		
      Attention: President

	 	 	 
	 		
      Fax No: (604) 331-1194

	 	 	 
	 		
      with a copy to:

	 	 	 
	 		
      CLARK WILSON LLP

	 		
      Barristers & Solicitors

	 		
      Suite 800 – 885 West Georgia Street 
Vancouver, B.C.
      V6C 3H1

	 	 	 
	 		
      Attention:       
      Stewart Muglich

	 	 	 
	 		
      Fax
      No:            
       (604) 687-6314

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

9.13                
Discharge 

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

9.14               
   Delivery of Copy/Waiver

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

- 24 - 

ARTICLE 10 
INTERPRETATION 

10.1              
 Amendment 

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

10.2              
   Headings

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

10.3               
Hereof, Etc.

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

10.4              
   Joint and Several Liability

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

10.5              
   Severability

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

10.6               
   Governing Law

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

10.7              
   Interpretation

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

- 25 - 

10.8             
   Capacity

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

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

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

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

10.9               
   Binding Effect

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

10.10              Entire
  Agreement

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

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

STOCKGROUP MEDIA INC. 

Per:  _______________________________ 

         Authorized Signatory

 

Per:  _______________________________ 

         Authorized Signatory

- 26 - 

This is page 26 to a “GENERAL SECURITY AGREEMENT”
dated for reference October<>, 2008 and made by STOCKGROUP MEDIA
INC. in favour of [<> NTD: insert names of secured
parties]. 

SCHEDULE “A” 
PERMITTED ENCUMBRANCES 

	1. 	
      Encumbrances perfected by Financing Statement(s)
      registered in the British Columbia Personal Property Registry as of
      October 23, 2008 against any one or more of the Persons comprising the
      Debtor.

SCHEDULE “B” 
CHIEF EXECUTIVE OFFICE 

Suite 500 - 750 West Pender Street, Vancouver, BC V6C 2T7Exhibit 10.1

 

FIRST LOAN MODIFICATION AGREEMENT

 

This First Loan
Modification Agreement (this “Loan Modification Agreement’) is entered into as
of June 30, 2004, by and between SILICON VALLEY BANK,
a California-chartered bank, with its principal place of business at
3003 Tasman Drive, Santa Clara, California 95054 and with a loan
production office located at One Newton Executive Park, Suite 200, 2221
Washington Street, Newton, Massachusetts 02462, doing business under the name “Silicon
Valley East” (“Bank”) and AMERICAN SCIENCE AND
ENGINEERING, INC, a Massachusetts corporation with its chief
executive office located at 829 Middlesex Turnpike, Billerica, Massachusetts 01821
(“Borrower”).

 

1.             DESCRIPTION
OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other indebtedness and
obligations which may be owing by Borrower to Bank, Borrower is indebted to
Bank pursuant to a loan arrangement dated as of August 11, 2003, evidenced
by, among other documents, a certain Loan and Security Agreement dated as of August 11,
2003, between Borrower and Bank (as amended, the “Loan Agreement”).  Capitalized terms used but not otherwise
defined herein shall have the same meaning as in the Loan Agreement.

 

2.             DESCRIPTION
OF COLLATERAL. 
Repayment of the Obligations is secured by the Collateral as described
in the Loan Agreement (together with any other collateral security granted to
Bank, the “Security Documents”).

 

Hereinafter, the Security
Documents, together with all other documents evidencing or securing the
Obligations shall be referred to as the “Existing Loan Documents”.

 

3.             DESCRIPTION
OF CHANGE IN TERMS.

 

A.                                   Modifications
to Loan Agreement.

 

1                                          The
Loan Agreement shall be amended by deleting the following, appearing in Section 13.1
of the definition of “Eligible Accounts”:

 

“(f)  Accounts for which the
account debtor is a federal, state or local government entity or any
department, agency, or instrumentality thereof except for Accounts of the
United States if the payee has assigned its payment rights to Bank and the
assignment has been acknowledged under the Assignment of Claims Act of 1940 (31
U.S.C. 3727);”

 

and inserting in lieu thereof the
following:

 

“(f) Accounts for which the
account debtor is a federal, state or local government entity or any
department, agency or instrumentality thereof except for Accounts of the United
States if the payee has assigned its payment rights to Bank and the assignment
has been acknowledged under the Assignment of Claims Act of 1940 (31 U.S.C.
3727) (with the exception of such Accounts approved by the Bank, on a case by a
case basis, in its sole and absolute discretion);”

 

2                                          The
Loan Agreement shall be amended by deleting Section 6.7(b) in its
entirety and the following shall be inserted in lieu thereof:

 

“(b)         Minimum EBIT.  The Borrower shall maintain, on a quarterly
basis: (i) (A) a net loss of no greater than Six Hundred Thousand Dollars
($600,000.00) for Borrower’s fiscal quarter beginning June 30, 2004, and
for each quarter thereafter; and (ii) a cumulative net loss for each twelve(12)
month period beginning June 30, 2004, of no greater than One Million Two
Hundred Thousand Dollars ($1,200,000.00).”

 

 

4.             FEES.  Borrower shall pay to Bank a modification fee
equal to Five Thousand Dollars ($5,000.00), which fee shall be due on the date
hereof and shall be deemed fully earned as of the date hereof.  The Borrower shall also reimburse Bank for
all legal fees and expenses incurred in connection with this amendment to the
Existing Loan Documents.

 

5.             RATIFICATION
OF INTELLECTUAL PROPERTY SECURITY AGREEMENT.  Borrower hereby ratifies, confirms and
reaffirms, all and singular, the terms and conditions of a certain Intellectual
Property Security Agreement dated as of August 11, 2003, between Borrower
and Bank, and acknowledges, confirms and agrees that said Intellectual Property
Security Agreement contains an accurate and complete listing of all
Intellectual Property Collateral as defined in said Intellectual Property
Security Agreement as updated by Exhibit B
Supplement attached hereto, shall
remain in full force and effect.  In
addition to the foregoing, the Borrower shall update the Bank, on a quarterly
basis, regarding any supplemental Copyrights, Copyright application(s) or
Mask works filed with the United States Copyright Office and any supplemental applications
filed by Borrower in the United States Patent Trademark Office for a patent or a
trademark or service mark.

 

6.             RATIFICATION
OF PERFECTION CERTIFICATE.  Borrower
hereby ratifies, confirms and reaffirms, all and singular, the terms and disclosures
contained in a certain Perfection Certificate dated as of August 11, 2003,
between Borrower and Bank, and acknowledges, confirms and agrees the
disclosures and information above Borrower provided to Bank in the Perfection
Certificate has not changed, as of the date hereof, except to the extent such
disclosure is updated by the information contained in Exhibit B
Supplement attached hereto.

 

7.             CONSISTENT
CHANGES.  The Existing Loan Documents
are hereby amended wherever necessary to reflect the changes described above.

 

8.             RATIFICATION
OF LOAN DOCUMENTS.  Borrower hereby
ratifies, confirms, and reaffirms all terms and conditions of all security or
other collateral granted to the Bank, and confirms that the indebtedness
secured thereby includes, without limitation, the Obligations.

 

9.             NO
DEFENSES OF BORROWER.  Borrower
hereby acknowledges and agrees that Borrower has no offsets, defenses, claims,
or counterclaims against Bank with respect to the Obligations, or otherwise,
and that if Borrower now has, or ever did have, any offsets, defenses, claims,
or counterclaims against Bank, whether known or unknown, at law or in equity,
all of them are hereby expressly WAIVED and Borrower hereby RELEASES Bank from
any liability thereunder.

 

10.           CONTINUING
VALIDITY.  Borrower understands and
agrees that in modifying the existing Obligations, Bank is relying upon
Borrower’s representations, warranties, and agreements, as set forth in the
Existing Loan Documents.  Except as
expressly modified pursuant to this Loan Modification Agreement, the terms of
the Existing Loan Documents remain unchanged and in full force and effect.  Bank’s agreement to modifications to the
existing Obligations pursuant to this Loan Modification Agreement in no way
shall obligate Bank to make any future modifications to the Obligations.  Nothing in this Loan Modification Agreement
shall constitute a satisfaction of the Obligations.  It is the intention of Bank and Borrower to
retain as liable parties all makers of Existing Loan Documents, unless the
party is expressly released by Bank in writing. 
No maker will be released by virtue of this Loan Modification Agreement.

 

11.           COUNTERSIGNATURE.  This Loan Modification Agreement shall become
effective only when it shall have been executed by Borrower and Bank (provided,
however, in no event shall this Loan Modification Agreement become effective
until signed by an officer of Bank in California).

 

 

This Loan
Modification Agreement is executed as a sealed instrument under the laws of the
Commonwealth of Massachusetts as of the date first written above.

 

	
  BORROWER:

  	
   

  	
  BANK:

  
	
   

  	
   

  	
   

  
	
  AMERICAN
  SCIENCE AND ENGINEERING, INC.

  	
   

  	
  SILICON
  VALLEY BANK, doing business as

  SILICON VALLEY EAST 

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Anthony R. Fabiano

  	
   

  	
  By: 

  	
  /s/ Mark Gallagher

  
	
   

  	
   

  	
   

  
	
  Name: Anthony R. Fabiano

  	
   

  	
  Name: Mark Gallagher

  
	
   

  	
   

  	
   

  
	
  Title: President and
  Chief Executive Officer

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SILICON
  VALLEY BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
  (signed in Santa Clara
  County, California)

  
								

 

The undersigned, AS&E GLOBAL, INC., 
a Massachusetts corporation (“Guarantor”) hereby: (i) ratifies,
confirms and reaffirms, all and singular, the terms and conditions of a certain
Unlimited Guaranty dated August 11, 2003 (the “Guaranty”), and (B) a
certain Security Agreement by Guarantor in favor of the Bank dated August 11,
2003 (the “Security Agreement”); and (ii) acknowledges, confirms and
agrees that the Guaranty, and Security Agreement shall remain in full force and
effect and shall in no way be limited by the execution of this Loan Modification
Agreement, or any other documents, instruments and/or agreements executed
and/or delivered in connection herewith; and (iii) acknowledges,
confirms and agrees that the obligations of Borrower to Bank under the Guaranty
include, without limitation, all Obligations of Borrower to Bank under the Loan
Agreement, as amended by this Loan Modification Agreement.

 

	
   

  	
  AS&E
  GLOBAL, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Anthony R. Fabiano

  
	
   

  	
   

  
	
   

  	
  Name: Anthony R. Fabiano

  
	
   

  	
   

  
	
   

  	
  Title:  President
  and Chief Executive Officer

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