GENERAL SECURITY AGREEMENT{PRIVATE}

(a)

“Agreement” means this Agreement and all amendments made thereto by written agreement between the Secured Party and the Debtor;

(b)

“Collateral” has the meaning ascribed to that term in Section 2.01;

(c)

“Loan Agreement” means the Loan Agreement between the Debtor and the Secured Party, if any, and/or the Promissory Note.

(d)

“Promissory Note” means the demand promissory note drawn by the Debtor in favour of the Secured Party.

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(e)

“Obligations” means all obligations of the Debtor to the Secured Party pursuant to the Loan Agreement and/or Promissory Note plus all advances made or further advances to be made by the Secured Party to the Debtor.

(f)

the terms “accessions”, “chattel paper”, “documents of title”, “goods”, “instruments”, “intangibles”, “inventory”, “money”, “proceeds” and “securities” whenever used herein shall have the meanings given to those terms, or the singular or plural thereof, as the case may be, in the Personal Property Security Act of the Province of British Columbia, as now enacted or as the same may from time to time be amended, re-enacted or replaced.

(a)

Accounts Receivable:    all debts, accounts, claims and choses in action which are now or which may hereafter become due, owing or accruing due to the Debtor (collectively, the “Receivables”);

(b)

Inventory:    all inventory of whatever kind and wherever situated (whether or not supplied or sold by the Secured Party to the Debtor) including, without limiting the generality of the foregoing, all goods held for sale or lease or that have been leased or that are to be furnished or have been furnished under contracts for service or used or consumed in the business of the Debtor (collectively, the “Inventory”);

(c)

Equipment:    all machinery including but not limited to plant, equipment, tools, apparatus and vehicles; unaffixed doors, windows, wiring, pipes, conduits, and other building materials and supplies; boilers, furnaces, air filtering and cooling devices, and other heating, ventilating and air conditioning equipment, plumbing, electrical, mechanical, communications, control, software, computer and data

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systems; escalators, elevators and other conveyancing devices; vacuum systems, plumbing fixtures; hot water tanks; light fixtures; interior doors, demising walls and partitions; suspended ceiling tiles; wall-to-wall carpeting; built-in furniture; fixed mirrors; screen windows and screen doors; awnings; window blinds and coverings; curtains, draperies, rods and runners, tracks and valances; sprinkler equipment; fire fighting equipment; carpets; furniture; stoves, ovens, ranges, dishwashers, garburators, refrigerators, washers and dryers, and other appliances; and other chattels, equipment, furnishings, fitting and fixtures located on the Lands including docks, floats, improvements and other tangible personal property which are not Inventory, whether or not described in any schedule hereto (collectively, the “Equipment”);

(d)

Chattel Paper:    all chattel paper;

(e)

Documents of Title:    all warehouse receipts, bills of lading and other documents of title, whether negotiable or not;

(f)

Securities and Instruments:    all shares, stock, warrants, bonds, debentures, debenture stock and other securities and all instruments (collectively, the “Securities”)

(g)

Intangibles:    all intangibles not described in Section 2.01 (a) including, without limiting the generality of the foregoing, all goodwill, licenses, patents, trademarks, trade names, copyrights and other industrial property or intellectual property;

(h)

Money:    all monies on deposit including all coins or bills or other medium of exchange adopted for use as part of the currency of Canada or of any foreign government;

(i)

Books, Records, Etc.:    all books, papers, accounts, invoices, documents and other records in any form evidencing or relating to any of the property described in Sections 2.01 (a) to (h) inclusive, and all contracts, securities, instruments and other rights and benefits in respect thereof;

(j)

Substitutions, Etc.:    all replacements of, substitutions for and increases, additions and accessions to any of the property described in Sections 2.01 (a) to (i) inclusive;

(k)

Proceeds:    all proceeds of the property described in Sections 2.01 (a) to (j) inclusive including, without limiting the generality of the foregoing, all personal property in any form or fixtures derived directly or indirectly from any dealing with such property or the proceeds therefrom and any payment that indemnifies or compensates for the loss of or damage to such property or the proceeds therefrom;

(l)

Letters of Credit:    all letters of credit lodged by the Debtor with third parties for performance of obligations of the Debtor to third parties to which the Debtor is now or will be entitled to on completion of the work;

(m)

Performance Bonds:    all performance bonds lodged by or on behalf of the Debtor to secure performance of labour or material contracts

(n)

Agreements:    all agreements, permits, licences, approvals and consents issued by any public authority;

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(o)

Contracts:    all contracts and contractual rights including, without limitation: contracts with architects, landscapers, engineers, managers and consultants; contracts for labour, materials and supplies, warranties with respect to work and materials; service, agency and management contracts; and

(p)

Debts:    all debts, accounts, bonds and money (including without limitation, sale proceeds, insurance proceeds, prepaid rents and rental and damage deposits); all claims, actions, causes of action, judgments and other choses in action; and all books, records, documents, papers and electronically records data recording or evidencing any of the foregoing

(a)

the Debtor is the sole registered, legal and beneficial owner of the Collateral hereinafter described in this Agreement;

(b)

the Debtor is a corporation duly incorporated, organized and subsisting under the laws of British Columbia, with the corporate power to enter into this Agreement; this Agreement has been duly authorized by all necessary corporate action on the part of the Debtor and constitutes a legal and valid agreement binding upon the Debtor enforceable in accordance with its terms, the making and performance of this Agreement will not result in the breach of, constitute a default under, contravene any provision of, or result in the creation of, any lien, charge, security interest, encumbrance or any other rights of others upon any property of the Debtor pursuant to any agreement, indenture or other instrument to which the Debtor is a party or by which the Debtor or any of its property may be bound or affected;

(c)

all financial information provided by the Debtor to the Secured Party is true, correct and complete; all financial statements have been prepared in accordance with United States generally accepted accounting principles consistently applied; there has been no material adverse change in the Debtor’s financial condition since the date of the most recent financial statements provided to the Secured Party, such financial statements being a management prepared draft at March 31, 2002;

(d)

except as otherwise provided herein or disclosed in a schedule hereto, all of the Collateral is the sole property of the Debtor free from any liens, charges, security interests, encumbrances or any rights of others which rank prior to or pari passu with the security interest, assignment and mortgage and charge granted hereby; and

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(e)

the address of the Debtor’s chief executive office and the office where it keeps its records respecting the Receivables is set forth on page 1 of this Agreement.

(a)

ensure that the representations and warranties set forth in Section 3.01 shall be true and correct at all times;

(b)

maintain, use and operate the Collateral and carry on and conduct its business in a lawful and business-like manner and in accordance with any agreement now or hereafter entered into with the Secured Party;

(c)

not permit the Collateral to be affixed to real or personal property so as to become a fixture or accession without the prior written consent of the Secured Party;

(d)

defend the Collateral against all claims and demands respecting the Collateral made by all persons at any time and, except as otherwise provided herein, shall keep the Collateral free and clear of all security interest, mortgages, charges, liens and other encumbrances or interests except for those disclosed in a schedule hereto or hereafter approved in writing by the Secured Party prior to their creation or assumption;

(e)

not change its chief executive office and the location of the office where it keeps its records respecting the Receivables, or move any of the Inventory or Equipment from the address set out below the name of the Debtor on the signature page hereof or the locations specified in any schedule hereto, without the prior written consent of the Secured Party;

(f)

pay all rents, taxes, levies, assessments and government fees or dues lawfully levied, assessed or imposed in respect of the Collateral or any part thereof as and when the same shall become due and payable and sufficient working capital is available, and shall exhibit to the Secured Party, when required, the receipts and vouchers establishing such payment;

(g)

keep proper books of account in accordance with sound accounting practice, shall furnish to the Secured Party such financial information and statements and such information and statements relating to the Collateral as the Secured Party may from time to time require, and the Debtor shall permit the Secured Party or its authorized agents at any time at the expense of the Debtor to examine the books of accounts and other financial records and reports relating to the Collateral and to make copies thereof and take extracts therefrom;

(h)

from time to time forthwith at the request of the Secured Party furnish to the Secured Party in writing all information requested relating to the Collateral, and the Secured Party shall be entitled from time to time at any reasonable time to inspect the Collateral and make copies of all information relating to the Collateral and for such purposes the Secured Party shall have access to all premises occupied by the Debtor or where the Collateral may be found;

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(i)

from time to time forthwith at the request of the Secured Party executed and deliver all such financing statements, schedules, assignments and documents, and do all such further acts and things as may be reasonably required by the Secured Party to effectively carry out the full intent and meaning of this Agreement or to better evidence and perfect the security interest, assignment and mortgage and charge granted hereby, and the Debtor hereby irrevocably constitutes and appoints the Secured Party, or any Receiver appointed by the court or the Secured Party, the true and lawful attorney of the Debtor, with full power of substitution, to do any of the foregoing in the name of the Debtor whenever and wherever the Secured Party or any such Receiver may consider it to be necessary of expedient;

(j)

not change its name or, if the Debtor is a corporation, shall not amalgamate with any other corporation without first giving notice to the Secured Party of its new name and the names of all amalgamating corporations and the date when such new name or amalgamation is to become effective; and

(k)

pay to the Secured Party forthwith upon demand all reasonable costs and expenses (including, without limiting the generality of the foregoing, all legal, Receiver’s and accounting fees and expenses) incurred by or on behalf o the Secured Party in connection with the preparation, execution and perfection of this Agreement and the carrying out of any of the provisions of this Agreement including, without limiting the generality of the foregoing, protecting and preserving the security interest, assignment and mortgage and charge granted hereby and enforcing by legal process or otherwise the remedies provided herein; and all such costs and expenses shall be added to and form part of the Obligations secured hereunder.

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(a)

the Debtor does not pay to the Secured Party any sum when due;

(b)

the Debtor does not perform any of its obligations under Section 4.01;

(c)

the Debtor does not observe or perform any covenant or obligation of the Debtor contained in this Agreement (other than a covenant or condition the breach or default in performance of which is specifically dealt with elsewhere in this Section 6.01) and such default is not remedied within 30 days after notice has been given by the Secured Party to the Debtor specifying such default;

(d)

any material representation or warranty made by the Debtor herein or in any document or certificate provided at any time to the Secured Party in connection herewith shall prove to be incorrect or misleading in any material respect;

(e)

the Debtor is in default under any other agreement relating to the Property with the Secured Party;

(f)

the Debtor ceases or threatens to cease to carry on the business currently being carried on by it or a substantial portion thereof or makes or agrees to make an assignment, disposition or conveyance, whether by way of sale of otherwise, of its assets in bulk;

(g)

the Debtor shall commit or threaten to commit any act of bankruptcy;

(h)

the commencement of any proceeding or the taking of any step by or against the Debtor for the dissolutions, liquidation or winding up of the Debtor or for any relief under the laws of any jurisdiction relating to bankruptcy, insolvency, reorganization, arrangement or compromise, or for the appointment of one or more of a trustee, receiver, receiver and manager, custodian, liquidator or any other person with similar powers with respect to the Debtor or the collateral or any part thereof;

(i)

the Collateral or any material part thereof is seized or otherwise attached by anyone pursuant to any legal process or other means, including distress, execution or nay other step or proceeding with similar effect, and the same is not released, bonded, satisfied, discharged or vacated within the shorter of a period of 15 days and 10 days less than such period as would permit such property or any part thereof to be sole pursuant thereto; or

(j)

the Secured Party believes in good faith that the prospect of payment of performance of any of the Obligations is impaired or that the Collateral is in danger of being lost, damaged or confiscated, or of being encumbered by the Debtor or seized or otherwise attached by anyone pursuant to any legal process.

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(a)

the Secured Party may by appointment in writing appoint a receiver or receiver and manager (each herein referred to as the “Receiver”) of the Collateral (which term when used in this Section 6.02 shall include the whole or any part of the Collateral) and may remove or replace such Receiver from time to time or may institute proceedings in any court of competent jurisdiction for the appointment of a Receiver of the collateral; and the term “Secured Party” when used in this Section 6.02 shall include any Receiver so appointed and the agents, officers and employees of such Receiver; and the Secured Party shall not be in any way responsible for any misconduct or negligence of any such Receiver;

(b)

the Secured Party may take possession of the Collateral and require the Debtor to assemble the Collateral and deliver or make the Collateral available to the Secured party at such place or places as may be specified by the Secured Party;

(c)

the Secured Party may take such steps as it considers desirable to maintain, preserve or protect the Collateral;

(d)

the Secured Party may carry on or concur in the carrying on of all or any part of the business of the Debtor;

(e)

the Secured Party may enforce any rights of the Debtor in respect of the Collateral by any manner permitted by law;

(f)

the Secured Party may sell, lease or otherwise dispose of the Collateral at public auction, by private tender, by private sale or otherwise either for cash or upon credit upon such terms and conditions as the Secured party may determine and without notice to the Debtor unless required by law;

(g)

the Secured Party may accept the Collateral in satisfaction of the Obligations upon notice to the Debtor of its intention to do so in the manner required by law;

(h)

the Secured Party may, for any purpose specified herein, borrow money on the security of the Collateral in priority to the security interest, assignment and mortgage and charge granted by this Agreement;

(i)

the Secured Party may enter upon, occupy and use all or any of the premises, buildings and plant occupied by the Debtor and use all or any of the Equipment and other personal property of the Debtor for such time as the Secured Party requires to facilitate the realization of the Collateral, free of charge, and the Secured Party will

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not be liable to the Debtor for any neglect in so doing or in respect of any rent, charges, depreciation or damages in connection with such actions;

(j)

the Secured Party may charge on its own behalf and pay to others all reasonable amounts for expenses incurred and for services rendered in connection with the exercise of the rights and remedies of the Secured Party hereunder, including, without limiting the generality of the foregoing, reasonable legal, Receiver and accounting fees and expenses, and in every such case the amounts so paid together with all costs, charges and expenses incurred in connection therewith, including interest thereon at such rate as the secured Party deems reasonable, will be added to and form part of the Obligations hereby secured; and

(k)

the Secured Party may discharge any claim, lien, mortgage, charge, security interest, encumbrance or any rights of others that may exist or be threatened against the Collateral, and in every such case the amounts so paid together with costs, charges and expenses incurred in connection therewith shall be added to the Obligations hereby secured.

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