Problem creating stored procedure.

I'm trying to create a stored procedure in MSSQL Server 2005 that'll perform the following jobs:
1) Create a login.
2) Create an user in TestDB database for the login created in step 1.
3) Assign the role 'db_generaluser' to the user created in step 2.

The login name and password for the login to be created will be supplied from externally through input parameters. If this procedure executes successfully it returns 0 else 1 to the caller through an output parameter.

When I try to compile it, it's prompting the following error messages:
Msg 102, Level 15, State 1, Procedure sp_CreateLogin, Line 23
Incorrect syntax near '@loginname'.

Msg 319, Level 15, State 1, Procedure sp_CreateLogin, Line 23
Incorrect syntax near the keyword 'with'. If this statement is a common table expression or an xmlnamespaces clause, the previous statement must be terminated with a semicolon.

Msg 319, Level 15, State 1, Procedure sp_CreateLogin, Line 27
Incorrect syntax near the keyword 'with'. If this statement is a common table expression or an xmlnamespaces clause, the previous statement must be terminated with a semicolon.

What's my mistake? Plz help. My code follows:

SET ANSI_NULLS ON
GO
SET QUOTED_IDENTIFIER ON
GO
-- ==========================================================================================================
-- Author:    Priyamtheone
-- Create date: 2009-Oct-08
-- Description:    This procedure is used to create a login, create an user in TestDB database associated to
--        that login and assign the role 'db_generaluser' to that user. The login name and password
--        will be supplied from externally through input parameters. If this procedure executes
--        successfully it returns 0 else 1 to the caller through an output parameter.
-- ==========================================================================================================
CREATE PROCEDURE [dbo].[sp_CreateLogin]
    -- Add the parameters for the stored procedure here.
    @loginname sysname,
    @passwd    sysname,
    @intRetVal int = 0 output    --Output parameter.
AS
BEGIN
    -- SET NOCOUNT ON added to prevent extra result sets from interfering with SELECT statements.
    SET NOCOUNT ON;
    SET @intRetVal = 0;

    BEGIN TRY
        CREATE LOGIN @loginname WITH PASSWORD=@passwd, DEFAULT_DATABASE=[TestDB], DEFAULT_LANGUAGE=[us_english], CHECK_EXPIRATION=OFF, CHECK_POLICY=OFF

        CREATE USER @loginname FOR LOGIN @loginname WITH DEFAULT_SCHEMA=[dbo]

        EXEC sp_addrolemember N'db_generaluser', @loginname
    END TRY
    BEGIN CATCH
        SET @intRetVal = 1;    --Something went wrong. So set the return value to 1.
    END CATCH
END
GO