EXHIBIT 4.2

                                 LOAN AGREEMENT

BY AND BETWEEN:

          POWER PHOTO  KIOSKS INC., a  corporation  continued  under the laws of
          Canada and having its head  office  and  principal  place of  business
          located  at 181  Whitehall  Drive,  in the  municipality  of  Markham,
          Ontario L3R 9T1, herein  represented by R. Terry Cooke,  Esq, Business
          Executive,  its Chief Executive  Officer and Chief Financial  Officer;

          (hereinafter referred to as the "Borrower")

AND

          MLIC HOLDINGS INC., a corporation duly  constituted  under the laws of
          Canada and having its head  office  and  principal  place of  business
          located at 999,  boulevard de  Maisonneuve  Quest,  Suite 1775, in the
          City and District of Montreal QC HSA 3L4, herein represented by Murray
          Lester, Esq.. Business Executive, its President;

          (hereinafter referred to as the "Lender")

          The  Borrower  and the Lender are  hereinafter  sometimes  referred to
          collectively  as the  "parties",  and each may be  referred  to in the
          singular as a "party".


     A)   WHEREAS the Borrower  wishes to obtain certain  bridge  financing from
          the Lender and the Lender has agreed to advance  certain  funds to the
          Borrower,  provided that the conditions set out in this loan agreement
          are met and maintained;

     B)   WHEREAS  for the  purposes  of the  Agreement,  the  following  words,
          phrases   and   expressions   shall   have  the   following   meanings
          respectively.

          "Agreement" means this agreement  regarding bridge financing  executed
          on the date  recorded in this  document  between the  Borrower and the
          Lender;

          "Closing Date" means May 10, 1999;

          "Interest Rate" means an annual interest rate of twelve per cent (12%)
          per annum, payable at the Maturity Date;


                                        1




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     Loan Agreement/ Power Photo Kiosks/                      2
     MLIC Holdings Inc./
     May 10, 1999


           "Lender's  security" shall mean  collectively  any present and future
           security  given  pursuant  to the  Agreement  and to the  Loan and in
           particular refers  collectively to to the security  interests set out
           in Clause 4;

           "Lender's  Shares" mean the shares of common  stock of the  Borrower,
           issued by the  Borrower  to the Lender  under  Paragraph  3.2 of this
           Agreement;

           "Loan" has the meaning set out in Paragraph  1.1 and, in  particular,
           means  the  bridge   financing  of  one  million   Canadian   dollars
           ($1,000,000.00 CD) which is the subject of this Agreement;

           "Loan Agreement",  "these presents",  "this Agreement',  "hereunder",
           "therein"  or other  similar  words  or  expressions  shall  mean the
           Agreement;

           "Maturity  Date"  shall mean the  earlier of the date of closing of a
           private placement and 30th day of July, 1999;


      C)   WHEREAS  all  the  recitals  of  this  preamble,  together  with  all
           schedules and exhibits form an integral part of the Agreement;

NOW  THEREFORE,   IN   CONSIDERATION  OF  THE  MUTUAL   COVENANTS,   AGREEMENTS,
REPRESENTATIONS  AND WARRANTIES HEREIN CONTAINED AND FOR OTHER GOOD AND VALUABLE
CONSIDERATION,  THE RECEIPT AND  SUFFICIENCY  OF WHICH ARE  ACKNOWLEDGED  BY THE
PARTIES, THE BORROWER AND THE LENDER MUTUALLY AGREE AS FOLLOWS:

1.   Loan.

      1.1  The Lender hereby agrees to lend the Borrower the principal amount of
           One Million Dollars  ($1,000,000.00),  the whole subject to the terms
           and conditions contained in the Agreement

      1.2  As  evidence of the Loan and of the  interest  payable  thereon,  the
           Borrower  agrees to deliver a term  promissory  note in favour of the
           Lender,  issued  and  payable  by the  Borrower  to the  order of the
           Lender,  such term note to constitute a "promissory note" pursuant to
           the Bills of Exchange Act, negotiable by endorsement and delivery and
           in the form set out in Schedule B.



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      Loan Agreement/ Power Photo Kiosks/                     3
      MLIC Holdings Inc./
      May 10, 1999

2.   Disbursement of Loan.

      2.1  The Lender  hereby  agrees to advance to the  Borrower or to its duly
           authorized  attorney,  on the Closing  Date,  the total amount of the
           Loan due under this Agreement, by certified cheque.

3.   Interest and Share Participation

      3.1  Interest. The principal amount of the Loan shall bear interest at the
           rate of twelve  per cent (12%) per  annum,  payable  at the  Maturity
           Date,  calculated from the Closing Date to the Maturity Date in full,
           inclusively.

           Should the Loan be repaid  partially  or totally  before the Maturity
           Date for any reason whatsoever, the Borrower shall not have the right
           to any  reimbursement of the interest due and payable at the Maturity
           Date or the date of repayment, as the case may be.

           Any interest not paid on the Maturity Date shall bear interest at the
           rate  applicable  to the principal of the Loan,  calculated  from the
           Maturity Date and computed monthly on the first day of each month and
           payable on demand.

      3.2  Lender's  Share  Participation.  In  further  consideration  for  the
           present  Loan  Agreement,  and  in  addition  to the  payment  of the
           interest set out above,  the Borrower  hereby  agrees to issue to the
           Lender,  on the Closing Date Forty Thousand (40,000) Class "A" common
           shares ("Lender's  Shares") which amount equals four per cent (4%) of
           the common shares of the capital  stock of the  Borrower,  on a fully
           diluted  basis,  based upon a current  valuation  of the  Borrower of
           Eight Million Five Hundred Thousand  Canadian Dollars  ($8,500,000.00
           CD) and Nine Hundred and Sixty Thousand  (960,000)  shares  currently
           outstanding, before issuance of the 40,000 shares to the Lender.

           The  Lender's  Shares shall be delivered to the Lender at the Closing
Date.

          The form of the  share  certificate  to be  issued  to the  Lender  is
           attached as Schedule C of this Agreement.

          The Borrower  agrees that the Lender's  Shares will not be diluted and
          that the Borrower will not issue further common stock,  except for any
          dilution  arising from the issuance of  securities  of the Borrower in
          consideration  for the  raising  of new  capital,  whether  through an
          offering of  securities or by other means.  Nothing in this  Paragraph
          3.2 shall be deemed or interpreted in such a way as to limit the




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     Loan Agreement/Power Photo Kiosks/                       4
    MLIC Holdings Inc./
    May 10, 1999

         right of the  Borrower to raise new  capital,  or to seek to  encourage
         investors  to provide  such capital  through  subscription,  whether by
         debenture, convertible debenture, bond issue, stock issue or such other
         financial  instrument  as the  Borrower  deems  necessary  for  its own
         corporate planning goals.


4.   Lender's Security.

    4.1  As a general and  continuing  collateral  security for the Loan and for
         the  performance by the Borrower of all of its  obligations  under this
         Agreement,  including without limiting the foregoing, the obligation to
         repay the Loan in principal and interest upon the terms and  conditions
         set out in this Agreement, the Borrower hereby agrees to:

         4.1.1      grant  in  favour  of  the  Lender  a first-ranking security
                    interest on Fifty (50) Kiosks (Power Photo Kiosks); and

         4.1.2      make  a  specific  assignment  to  the  Lender  of  accounts
                    receivable  for all sales of Power Photo  kiosks made by the
                    Borrower  within  three (3) days after the  shipment  of the
                    said Power Photo Kiosks.

    4.2  The  Lender's  Security  will  take the form of a  Security  Agreement,
         annexed  hereto  as  Exhibit  A and  an  agreement  for  Assignment  of
         Indebtedness,  annexed hereto as Exhibit B, and such agreements will be
         executed by the Borrower on the Closing Date.

5.   Limited Recourse Loan.

    5.1 The Borrower covenants that, at all times until repayment of the Loan,:

         5.1.1      the  Loan  shall remain at all times a valid and enforceable
                    obligation of the Borrower;


         5.1.2      the security constituted under Clause 4 of this Agreement is
                    and shall remain at all times valid and enforceable;


         5.1.3     at  all  times,  no  encumbrance,   lien,  chattel  mortgage,
                   hypothec,  security interest,  pledge,  charge or priority of
                   any kind  shall rank ahead of the  Lender's  Security  on the
                   assets  as that  security  is set out in Clause 4, or has the
                   effect of reducing the  amounts  that  the Lender is entitled
                   to receive in repayment of the Loan;


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    Loan Agreement/ Power Photo Kiosks/                       5
    MLIC Holdings Inc./
    May 10, 1999



         5.1.2      the  representations  and  warranties  given by the Borrower
                    pursuant  to  this  Agreement  are  true and accurate on the
                    Closing Date; and


         5.1.5      the  Borrower  shall  be in  compliance with its obligations
                    pursuant to Clause 7 of this Agreement; and

          in  consideration  of  the  foregoing  covenants  and  the  terms  and
          conditions set out in this Agreement generally, the Lender agrees that
          it shall be bound to  execute  and  enforce  its  security  under this
          Agreement only from the assets charged under the Lender's  Security as
          set out in Clause 4 and/or  the term  promissory  note,  described  in
          Paragraph 1.1, and not from any other assets.

6.   Representations and Warranties.

   6.1    The  Borrower  represents  and warrants as follows and does so in full
          understanding  and  acknowledgement  that the Lender is relying on the
          said   representations   and  warranties  in  concluding  the  present
          Agreement:

         6.1.1      Status:  the  Borrower  is a corporation continued, existing
                    and in good standing under the Canada Business  Corporations
                    Act. No action has been taken by the directors.  officers or
                    shareholders  of  the  Borrower  to  dissolve  it,  and  the
                    Borrower has the corporate power and authority to enter into
                    the present  Agreement  and to perform  all its  obligations
                    hereunder;

         6.1.2      All  Necessary  Proceedings:  the  Borrower  has  taken  all
                    necessary  corporate actions and proceedings to enable it to
                    enter into the present Agreement;

         6.1.3      Licences:  the Borrower holds all permits,  licences,  trade
                    names  trade  marks and other  proprietary  or  intellectual
                    property  rights  required  to operate  its  business  as it
                    currently  operates  it and  intends to  operate it and,  it
                    shall  continue  to  comply  with  all  requirements  of the
                    obtaining  of any  other  rights  required  to  carry on its
                    business activities;

         6.1.4      Enforceability:  Once  signed,  the present  Agreement  is a
                    legal,   valid  and  binding  obligation  of  the  Borrower,
                    enforceable  against it by the Lender in accordance with its
                    terms, except as the obligations hereunder may be limited by
                    bankruptcy,  insolvency  and any other  laws  affecting  the
                    rights of creditors generally;




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  Loan Agreement/ Power Photo Kiosks/                         6
  MLIC Holdings Inc./
  May 10, 1999

          6.1.5     No  Violation;  the Borrower  warrants  that the  execution,
                    delivery and performance of the present Agreement by it, (1)
                    do not and will not violate or conflict  with any  provision
                    of law or any  regulation,  or any writ,  order judgement or
                    decree of any court or governmental or regulatory authority,
                    or  any  provision  of  its  Articles  of  Incorporation  or
                    By-laws;  and (2) do not and will not,  with or without  the
                    passage  of time or the  giving  of  notice,  result  in the
                    breach of, or constitute a default,  cause the  acceleration
                    of  performance,  or require any consent under, or result in
                    the creation of any lien,  charge or encumbrance upon any of
                    its property or assets  pursuant to any material  instrument
                    or  agreement  to  which it is a party or by which it or its
                    properties may be bound or affected;


         6.1.6      No Material  Change:  the Borrower  warrants  that there has
                    been  no  detrimental   material  change  in  its  financial
                    position or otherwise  since the date of its last  financial
                    statements.

7.   Undertakings of the Borrower.

  7.1    The Borrower  hereby  represents to the Lender that, for so long as any
         amount due to the Lender under this Agreement remains  outstanding,  it
         shall  comply  with  and  satisfy  each  of  the  following  terms  and
         conditions:

         7.1.1      the  Borrower  will  repay  or  will  attend  to the  timely
                    repayment of the capital and interest of the Loan;

         7.1.2      the Borrower will do all things  necessary and attend to all
                    obligations  or  act  required  to  maintain  its  corporate
                    existence;

         7.1.3      the Borrower will maintain  insurance coverage of sufficient
                    value on its insurable  assets  against fire and against all
                    other  risks  as  may  be  reasonable  to  cover,  and  such
                    insurance  shall  be at the full  replacement  value of such
                    assets;  copies of such insurance policies will be delivered
                    to the Lender where required by the Lender;

         7.1.4      the  Borrower  will  pay  when  due all  taxes,  duties  and
                    assessments imposed by any municipal, provincial, federal or
                    other  governmental  authority  upon its  assets,  provided,
                    however,  that in the event any such taxes are  contested in
                    good  faith,  the  Borrower  shall not be obliged to pay any
                    such taxes until there is a final judgment of its case;




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   Loan Agreement/ Power Photo Kiosks/                        7
   MUC Holdings Inc./
   May 10, 1999

          7.1.5    the Borrower will keep accounting  records in accordance with
                   generally accepted accounting principles and will provide the
                   Lender  with  such  information  relating  to the sale of the
                   Power  Photo  Kiosks as the  Lender  may,  from time to time,
                   reasonably   require,   including,   but  not   limited   to,
                   notification to the Lender of each sale within three (3) days
                   of shipment.

   7.2    The Loan shall be used to manufacture or have manufactured  fifty (50)
          Power Photo  Kiosks1 to supply them fully for operation and to install
          them in locations  selected by the Borrower,  as described in Schedule
          A.

  7.3     The Borrower  agrees to use the proceeds of the Loan  exclusively  for
          the purpose of manufacturing  or securing the manufacture,  outfitting
          and  installation  of the fifty (50) Power  Photo  Kiosks and  related
          expenses and not for other purposes.


8.   Events of Default.

  8.1     Each of the  following  events  shall be an event of default,  and the
          Borrower  will be deemed to be in default  hereunder in each and every
          of the following instances:

          8.1.1     where the Borrower defaults in the payment, when due, of the
                    principal or the interest of the Loan;

          8.1.2     where the Borrower makes an assignment of its assets for the
                    benefit of creditors,  or is petitioned into bankruptcy,  or
                    is the subject of a receiving  order,  or makes any proposal
                    to or arrangement with its creditors respecting its debts or
                    cannot  generally meet its obligations as they become due in
                    the  ordinary  course of business,  or avails  itself of any
                    provision of any law relating to bankruptcy and insolvency;

          8.1.3     where the  Borrower's  assets or a material part of them are
                    subject  to any  attachment  sequestration,  garnishment  or
                    seizure;

          8.1.4     where the Borrower  permits an assignment or transfer of all
                    or of a significant part of its business; or

          8.1.5     where  any  of the  representations  and  warranties  of the
                    Borrower as set out in Clause B prove to be materially false
                    or incorrect.



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      Loan Agreement/ Power Photo Kiosk/                      8
      MLIC Holdings Inc./
      May 10, 1999

     8.2  In each and every event of default provided for in this Clause 8:

          8.2.1     the  Lender  will have the right to notify the  Borrower  in
                    writing of the  existence  of the said  default and, if such
                    default is not remedied within a period of seven (7) days of
                    the  date of  receipt  of the  notification,  the  principal
                    amount of the Loan shall then,  at the option of the Lender,
                    become  immediately due and payable,  together with interest
                    accrued,  all  without  any  obligation  on the  part of the
                    Lender to give further  notice.  The Borrower  hereby waives
                    all right to such further notice; and

          8.2.2     following the expiration of the seven-day  cure period,  the
                    Lender  may  realize  the  Lender's  Security  to the extent
                    required  to  recover  the  whole  of  the  Loan   including
                    principal and interest which is then due and owing.

     8.3  Notwithstanding  the  foregoing,  the Lender will be entitled to waive
          its rights  under this Clause 8, in  writing,  or extend the time of a
          cure period available to the Borrower, without prejudice in subsequent
          events of default to its right to exercise  its  recourses  as set out
          herein.


9.   Notice.

     9.1  Any demand,  request or notice to be given under this Agreement  shall
          be in writing in English  and shall be sent by  registered  mail or by
          Email, facsimile or other electronic means, subject to confirmation by
          registered mail, to the following address unless otherwise  instructed
          by written notice of the other Party:

IF TO THE BORROWER:                 POWER PHOTO KIOSKS INC.,
                                    181 Whitehall Drive,
                                    Markham, Ontario L3R 9T1
                                    Tel:  905-948-9600
                                    Fax: 905-948-8377

IF TO THE LENDER:                   MLIC HOLDINGS INC.
                                    999 boulevard de Maisonneuve Ouest
                                    Suite 1775
                                    Montreal QO H3A 3L4
                                    Tel: 514-849-5566
                                    Fax: 514-849-4016



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       Loan Agreement/ Power Photo Kiosks/                    9
       MUC Holdings Inc./
       May 10, 1999




     9.2  When  Deemed to have been Sent.  All  notices  shall be deemed to have
          been duly given and made,  unless otherwise  specifically  provided in
          this Agreement (i) when such registered mail properly addressed to the
          registered  office or  principal  place of  business  shall  have been
          deposited in the mail,  postage prepaid,  or (ii) on the day following
          the transmission of such e-mail or facsimile notice.


10.  Termination by Repayment.


     10.1 Upon the  repayment in full of the Loan and of all amounts owed by way
          of interest,  the present Agreement shall be terminated,  and with it,
          all  obligations of the Borrower,  saving the  obligations  set out in
          Paragraph 3.2  respecting  the Lender's  Shares,  and the Lender shall
          remit  to  the  Borrower  the  promissory  note  and  shall  discharge
          forthwith all security interests constituted under Clause 4.


11.  General Matters.

     11.1 This  Agreement  shall enure to the benefit of and be binding upon the
          successors,  assigns  or legal  representatives  of the Lender and the
          successors or legal representatives of the Borrower.

     11.2 Depending upon the context, the singular shall include the plural, and
          vice versa;  words  denoting the  masculine  gender shall be deemed to
          include the feminine and vice versa.

     11.3 The invalidity or nullity of any provision of this Agreement shall not
          render any other  provision or the whole of this Agreement  invalid or
          null and void.

     11.4 The provisions of this Agreement  shall be construed!  interpreted and
          enforced in accordance with, and respective  rights and obligations of
          the  Parties  shall be  governed  by,  the laws of Quebec  and  Canada
          applicable herein.

     11.5 All amounts herein recited are denominated in Canadian Dollars.

     11.6 The present  Agreement may be executed in counterparts,  each of which
          shall be deemed an original but which  together  shall  constitute one
          and the same document.




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  MLIC Holdings Inc./
  May 10, 1999




     11.7 Each  of the  parties  shall  bear  its  own  costs  and  expenses  in
          connection with the present  transaction.  However,  in the event that
          the  Lender  is  obliged  by an  event of  default  on the part of the
          Borrower to incur legal  expenses,  including  attorney's  fees,  such
          legal expenses, if reasonable, shall be borne by the Borrower, and the
          Borrower  hereby agrees to indemnify and hold the Lender harmless with
          respect to such legal expenses .

     11.8 The Borrower shall not transfer or assign its rights  hereunder or the
          amount to be received by it hereunder.


     11.9 The Parties have expressly  requested  that the present  Agreement and
          any related documents, including schedules and exhibits, be drafted in
          English,  and they find such  draft  satisfactory.  C'est a la demande
          expresse  des  parties  que la  presente  convention  ainsi  que  tout
          document y afferant, y compris les exhibits et annexes, soient rediges
          en anglais, et les parties s'en declarent satisfaites.


 IN WITNESS WHEREOF,  each of the Parties hereto has caused this Agreement to be
 duly executed on the Closing Date by a duly authorized representative.


                                            POWER PHOTO KIOSKS INC.
                                            Per:


                                             /s/ Ronald Terry Cooke

Witness
                                             MLIC HOLDINGS INC.
                                            Per:

                                             /s/ Murray D. Lester

 Witness
/s/ Mark (illegible)


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   Loan Agreement! Power Photo Kiosks/                        11
   MLIC Holdings Inc./
   May 10, 1999

                                   SCHEDULE A

  Power  Photo  Kiosks  Inc.  (the  "Company')  is a CSCA  company  which  has a
  proprietary  digital imaging software  enabling it to superimpose  images in a
  scene and to use the highest quality digital photo technology from Sony.

  This digital  software is made  available to the public  through  specialized,
  consumer-  operated kiosks;  which are to be sold to the intended operators of
  the kiosks. The Company will have a continuing stream of revenue from the sale
  of photo paper to the owner-operators of the kiosks.

  The Company has signed certain licensing  agreements with sports organizations
  which  entitle  it to use their  superstars,  images,  brands and marks in the
  Company's  software  programme.  The  Company  also has access to more than 60
  colleges and universities, largely in the U.S. It is presently in negotiations
  with other sectors,  such as the film industry,  so as to expand its potential
  market.

  The Company will produce and sell an initial  fifty (50) kiosks with the funds
  provided  by the  bridge  financing  set out in the Loan  Agreement,  and will
  utilise the one million dollars  ($1,000,000.00)  of the Loan for this purpose
  and expenses related to this initial set of 50 kiosks.



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   Loan Agreement/Power Photo Kiosks/                         12
   MLIC Holdings Inc./
   May 10, 1999

                                   SCHEDULE B

                                 PROMISSORY NOTE
   MAY 10, 1999.

     FOR  VALUE  RECEIVED,  the  undersigned,  POWER  PHOTO  KIOSKS  INC.,  (the
"Borrower")  promises to pay to the order of MLIC HOLDINGS INC., (the "Lender"),
the principal  amount of ONE MILLION CANADIAN  DOLLARS  ($1,000,000.00  CD) (the
"Loan") on the 30th day of July, 1999 (the "Maturity Date").

     In addition,  the undersigned promises to pay interest,  on the outstanding
balance  of this  Note at the rate of  twelve  per cent  (12%)  per annum on the
Maturity Date, calculated from the Closing Date until the Maturity Date.

     The  Borrower  shall  have the right to repay  any part of the Loan  and/or
interest before the Maturity Date, without penalty.

     The undersigned waives all right to notice of default, and in the event the
Borrower is in default on the  principal  or  interest  on the Loan,  the Lender
shall have the right  immediately  to demand payment of the entire amount of the
Loan  (together  with  interest  thereon),  and the  Loan or any  balance  shall
thereupon become due and payable without further notice.

     The Parties have  expressly  requested  that the present  Agreement and any
related documents,  including schedules and exhibits, be drafted in English, and
they find such draft  satisfactory.  C'est a la demande expresse des parties qua
la  presente  convention  ainsi que tout  document  y  afferant,  y compris  les
exhibits et annexes,  soient redige's en anglais,  at les parties s'en declarent
satisfaites.

  In witness whereof, this Promissory Note is signed on May 10, 1999

                                            POWER PHOTO KIOSKS INC.
                                             Per:

                                             /s/ Ronald Terry Cooke
                                             the Borrower




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   Loan Agreement/Power Photo Kiosks/                         13
   MLIC Holdings Inc./
   May 10, 1999


                                   SCHEDULE C

                                SHARE CERTIFICATE
                             POWER PHOTO KIOSKS INC.




<PAGE>






                                    EXHIBIT A
                               SECURITY AGREEMENT


1. For value  received,  POWER PHOTO KIOSKS INC., a corporation  continued under
the laws of Canada (the "Corporation"),  hereby grants, mortgages and charges to
MLIC  Holdings  Inc.,  (the  "Lender"),  as and by way of a fixed  and  specific
mortgage,  charge and security  interest,  all of the right,  title and interest
which the Corporation now has or may hereafter have in the assets,  property and
undertaking hereinafter described (collectively, the "Collateral"):

     (a)  the personal property described in Schedule A;

     (b)  with respect to the personal property  described in paragraph (a), all
          proceeds therefrom and any insurance or other payments as indemnity or
          compensation  for loss of or damage to such  property  or any right to
          such payment.

2. Words used in this  agreement  which are defined in the PPSA (as  hereinafter
defined)  shall  have the  meanings  given to such  words  in the  PPSA,  unless
specifically  modified by this agreement and, in addition,  the following  words
shall have the following meanings:

     (a)  "Collateral"  means the  "Collateral"  as  defined in section 1 hereof
          and/or any part thereof';

     (b)  "Event of Default"  means  demand  being made by the Lender  under the
          Loan Agreement (as hereinafter described);

     (c)  "Lender" means MLIC Holdings Inc., its successors and assigns;

     (d)  "Loan  Agreement"  means the loan agreement dated May 10, 1999 between
          the Corporation and the Lender;

     (e)  "PPSA" means the Personal Property  Security' Act (Ontario) as amended
          or replaced or re-enacted from time to time;

     (f)  "Prime  Rate" means the  variable  annual  rate of  interest  which is
          declared  by the Royal  Bank of Canada  from time to time as its prime
          rate for Canadian dollar loans made in Canada; and

     (g)  "Security   Interest"  means  the  mortgages,   charges  and  security
          interests granted and created pursuant to this agreement.

3. The  security  interest  granted  under this  agreement  secures  payment and
performance to the Lender of all debts, liabilities and obligations,  present or




<PAGE>






                                       -2-

future,  direct or indirect,  absolute or  contingent,  matured or not,  whether
extended or renewed, at any time owing or remaining unpaid by the Corporation to
the Lender pursuant to the Loan Agreement, and all interests, commissions, fees,
reasonable  legal and other  costs,  charges  and  expenses;  including  without
limitation; the expenses under section 6 of this agreement (all of the foregoing
being herein called, and included in; the "Obligations").


4. The  Corporation  hereby  represents  and  warrants  to the Lender  that this
agreement  has  been  properly   authorized,   executed  and  delivered  by  the
Corporation


5. The Corporation hereby agrees that:

     (a)  the Corporation shall, upon request by the Lender, execute and deliver
          all such financing statements,  certificates,  further assignments and
          documents  and do all such  further  acts and  things  as may,  in the
          reasonable opinion of the Lender. be necessary or desirable to perfect
          and preserve the security  interest  hereby created and give effect to
          the intent of this agreement; and

     (b)  the Corporation will not change its name, its chief executive  office,
          location thereof the location or locations at which tangible  personal
          property forming part of the Collateral is ordinarily  located, or the
          location where it keeps its books or records without  providing thirty
          (30) days prior written notice to the Lender;

6. Upon the occurrence of an Event of Default,  and subject to the provisions of
applicable law, the security  interest  created hereby shall become  enforceable
and the Lender may proceed to enforce  payment of the Obligations and the Lender
shall have,  in addition to any other rights and  remedies  provided by law, the
rights and  remedies  of a secured  parry under the PPSA and as provided by this
agreement and, without limiting the foregoing:

     (a)  the Lender may require the Corporation,  by notice in writing given to
          the  Corporation,  to disclose to the Lender the location or locations
          of the Collateral and the  Corporation  agrees to make such disclosure
          when so required by the Lender;

     (b)  the Lender may take proceedings in any court of competent jurisdiction
          for  the  appointment  of a  receiver  of  the  Collateral  or  may by
          instrument  in writing  appoint  any person to be a receiver of all or
          any part of the  Collateral  and may remove or  replace  or  institute
          proceedings to remove or replace any receiver so appointed and appoint
          or institute proceedings to appoint another in his stead; and any such
          receiver  appointed by  instrument  in writing may exercise all powers
          theLender under this agreement; and without limitation,  in connection
          with such proceedings and/or appointment, it is agreed that:



<PAGE>




                                       -3-

          (i)  the  Lender may  appoint  any  persons,  firm or  corporation  as
               receiver, including an officer or employee of the Lender;

          (ii) such  appointment  may be made at any time either before or after
               the Lender has taken possession of the Collateral;

          (iii)the  Lender  may from  time to time fix the  remuneration  of the
               receiver  and direct the payment  thereof out of the  Collateral;
               and

          (iv) the receiver  shall be deemed to be the agent of the  Corporation
               for all purposes, and for greater certainty, the Lender shall not
               be in any way  responsible  for  any  actions,  whether  wilfull,
               negligent or  otherwise,  of any  receiver,  and the  Corporation
               hereby  agrees to indemnify and save harmless the Lender from and
               against any and all claims,  demands,  actions,  costs,  damages,
               expenses or payments which the Lender may hereafter suffer, incur
               or be  required  to pay as a result  of,  in whole or in part any
               action taken by the receiver or any failure of the receiver to do
               any act or thing unless arising through the wilfull misconduct or
               gross negligence of the Lender.

     (c)  the  Lender  may  at its  option,  take  such  steps  as it  considers
          necessary or desirable to obtain  possession of all or any part of the
          Collateral and to that end the Corporation agrees that the Lender may,
          by its  servants,  agents or receiver,  at any time and without  prior
          notice,  except as required by applicable law, enter upon the premises
          where the  Collateral may be found by any lawful means for the purpose
          of taking  possession of or removing or immobilizing the Collateral or
          any part  thereof;  and the  Corporation  shall,  upon  request of the
          Lender,  assemble  and deliver  possession  of the  Collateral  to the
          Lender, at such place or places as the Lender may designate and at the
          Corporation's expense:

     (d)  in connection with the  realization of the Collateral,  the Lender may
          carry  on all or any  part  of the  business  and  undertaking  of the
          Corporation and may enter upon,  occupy and use all or any part of the
          real or personal  property owned or used by the  Corporation  for such
          time as the Lender sees fit, free of charge,  and the Lender shall not
          be liable to the  Corporation  for any  negligent or imprudent  act or
          omission in so doing other than acts or omissions of gross  negligence
          or wilfull misconduct or in respect of any rent, charges, depreciation
          or damages in connection with such actions;

     (e)  the  Lender  may  borrow  money for the  purpose  of  carrying  on the
          business of the  Corporation or for the  maintenance,  preservation or
          protection of the Collateral and mortgage,  charge,  pledge or grant a
          security  interest  in the  Collateral,  whether or not in priority to
          this security interest,  to secure repayment of any money so borrowed,
          upon such terms and conditions and at such time or times as the Lender
          determines advisable;




<PAGE>




                                       -4-



     (f)  the Lender may file such proofs of claim or other  documents as may be
          necessary or  desirable  to have its claim  lodged in any  bankruptcy,
          winding-up,  liquidation,  dissolution or other proceedings (voluntary
          or otherwise) relating to the Corporation;

     (g)  the Lender may, subject to applicable law, seize, collect,  realize or
          dispose of the  Collateral  by private  sale,  public  sale,  tease or
          otherwise  upon such terms and  conditions as the Lender may determine
          and whether or not the Lender has taken  possession of the Collateral,
          or may otherwise  deal with the Collateral or any part thereof in such
          manner,  upon such terms and  conditions and at such times as may seem
          to the Lender advisable;

     (h)  the Lender may repair,  process,  modify,  complete or otherwise  deal
          with the Collateral and prepare for the disposition of the Collateral,
          whether on the premises of the Corporation or otherwise;

     (i)  the mode of disposition of the Collateral or any part thereof shall be
          in the sole discretion of the Lender, and it shall not be deemed to be
          commercially  unreasonable for the Lender to dispose of the Collateral
          or any part thereof in the ordinary  course of business and the Lender
          may purchase all or any part of the Collateral at a public sale;

     (j)  the Lender may charge on its own behalf, and pay to others, reasonable
          sums for expenses incurred and for services rendered  (including legal
          fees  and  fees  for  receivers,   managers,   accountants  and  other
          professionals)  in  connection  with  Lender's   realizing,   holding,
          repairing,  processing,  preparing for disposition or disposing of the
          Collateral or otherwise dealing with the Collateral in accordance with
          the  provisions of this  agreement or the PPSA and all such sums shall
          be  payable  to the Lender on demand and until paid in full shall bear
          interest at the rate of interest  provided  for in the Loan  Agreement
          following the  occurrence  and during the  continuance  of an Event of
          Default, and if the disposition of the Collateral fails to satisfy the
          Obligations  secured by this agreement and the expenses so incurred in
          full,  the  Corporation  shall be liable to pay any  deficiency to the
          Lender on demand;

     (k)  the  Lender  may pay any  claim,  lien,  security  interest  or  other
          encumbrance that may exist or be threatened against the Collateral, in
          which event the amount so paid,  together  with all costs and expenses
          of the Lender incurred in connection  therewith,  shall be included in
          the  Obligations  and secured hereby and until paid in full shall bear
          interest at the rate of interest  provided  for in the Loan  Agreement
          following the  occurrence  and during the  continuance  of an Event of
          Default;





<PAGE>




                                       -5-

     (l)  Lender shall have the right to postpone  indefinitely  the sale of the
          Collateral  or any part  thereof  and shall  further  have the  right,
          pending any such sale, to lease the  Collateral,  or any part thereof,
          to any  person  for  such  period  as  the  Lender,  in  its  absolute
          discretion,  deems  necessary  in order to  recover,  or to attempt to
          recover, any indebtedness forming a part of the Obligations;

     (m)  the  Lender  shall not be liable or  accountable  for any  failure  to
          realize or otherwise  deal with the  Collateral,  or any part thereof,
          and shall not be bound to  institute  proceedings  for the  purpose of
          effecting any of the  foregoing or for the purpose of  preserving  any
          rights of the Lender,  the  Corporation or any other person in respect
          of the Collateral; and

     (n)  all  monies  received  or  collected  by the  Lender in respect of the
          Collateral  may be applied on account of such part of the  Obligations
          as the Lender deems appropriate.

7. When required to do so by the PPSA, the Lender shall give to the  Corporation
the written  notice  required  by the PPSA of any  intended  disposition  of the
Collateral by serving such notice  personally on the  Corporation  or by mailing
such  notice by  registered  mail to the last known post  office  address of the
Corporation or by any other method authorized or permitted by the PPSA.

8. The Corporation and the Lender further agree that:

     (a)  the  Corporation  shall not be  discharged  by an  extension  of time,
          additional  adyances,  renewals and extensions,  the taking of further
          security, releasing security,  extinguishment of the security interest
          as to all or any part of the  Collateral,  or any other  act  except a
          release or discharge of the security interest upon the full payment of
          the Obligations secured by this agreement;

     (b)  any  failure  by the  Lender  to  exercise  any  right set out in this
          agreement  shall not  constitute  a waiver  thereof;  nothing  in this
          agreement  or in the  Obligations  shall  preclude any other remedy by
          action or  otherwise  for the  enforcement  of this  agreement  or the
          payment in full of the Obligations;

     (c)  all rights of the Lender  hereunder  shall be assignable to the extent
          permitted under the Loan Agreement;


9.  Upon  the  occurrence  of  an  Event  of  Default,  the  Corporation  hereby
irrevocably  constitutes  and  appoints  the  Lender  and each of its  officers,
holding  office  from  time to  time,  as the true and  lawful  attorney  of the
Corporation with power of substitution in the name of the  Corporation to do any




<PAGE>


                                       -6-

such and all such acts and things or execute and  deliver  all such  agreements,
documents  and  instruments  as the Lender,  in its sole  discretion,  considers
necessary  or  desirable  to  carry  out the  provisions  and  purposes  of this
agreement or to exercise any of its rights and remedies hereunder, and to do all
acts or things necessary to realize or collect the proceeds, and the Corporation
hereby  ratifies and agrees to ratify all lawful acts of any such attorney taken
or done in accordance with this section.  This power of attorney,  being a power
coupled with an interest, shall not be revoked or terminated by any act or thing
other than the termination of this agreement.


10.  All  rights of the  Lender  hereunder  shall  enure to the  benefit  of its
successors  and  permitted  assigns  in  accordance  with the  terms of the Loan
Agreement  and all  obligations  of the  Corporation  hereunder  shall  bind the
Corporation and its successors and permitted assigns.

11.  This  agreement  shall  be  construed  in  accordance  with the laws of the
Province of Ontario and the laws of Canada applicable therein.

12. The Corporation  acknowledges  receipt of an executed copy of this agreement
and, to the extent  permitted  by  applicable  law,  waives any right to receive
copies of any financing statements,  financing change statements or verification
statements which may be filed or issued in connection therewith.

     IN WITNESS WHEREOF the Corporation has caused this agreement to be executed
by its duly authorized officer(s), this 10th day of May, 1999

                              POWER PHOTO KIOSKS INC


                              By:  /s/ Ronald Terry Cooke
                                   ------------------------
                              By:
                                   ------------------------

WITNESSES:

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

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



<PAGE>






                                       -7-

                           SCHEDULE "A" (OF EXHIBIT A)


                          FIFTY (5O) POWER PHOTO KIOSKS



<PAGE>




                                    EXHIBIT B

                           ASSIGNMENT OF INDEBTEDNESS

1. FOR  VALUABLE  CONSIDERATION,  receipt  whereof is hereby  acknowledged,  the
undersigned  hereby  assigns,  transfers  and sets over unto MLIC  Holdings Inc.
(hereinafter  called the  "Secured  Party") and grants to the Secured  Party.  a
security  interest in and to the full benefit of, and all its rights,  benefits,
claims,  chooses  in  action  and  any  other  interest  whatsoever  under,  all
indebtedness  and  liability  now or  hereafter  owing  (hereinafter  called the
"Debts")  of the  parties as listed in  Schedule A hereto and in any  subsequent
addendum thereto  (hereinafter called the "Account Debtors") to the undersigned,
and the  undersigned  further  assigns  and  transfers  to the  Secured  Party a
security interest in all deeds,  documents,  writings,  papers, books of account
and other books and  records  relating to the Debts or by which the Debts are or
may hereafter be evidenced, effected or acknowledged.

2. The  undersigned  hereby  agrees  that the Debts shall be held by the Secured
Party as general and  continuing  collateral  security for the fulfilment of all
obligations,  present or future,  direct or  indirect,  absolute or  contingent,
matured or not, of the  undersigned  to the Secured  Party  pursuant to the Loan
Agreement  dated  the 10th day of May,  1999  between  the  undersigned  and the
Secured Party.

3. The undersigned  expressly  authorizes the Secured Party after the occurrence
of any default in any of the Obligations,  to collect, demand, sue for, enforce,
recover  and  receive  the Debts  and to give  valid and  binding  receipts  and
discharges  therefor  and in respect  thereof,  the whole to the same extent and
with the same effect as if the Secured Party were the absolute owner thereof and
without regard to the state of accounts  between the undersigned and the Secured
Party.

4. All monies received by the undersigned from the collection of the Debts after
the  occurrence  of any default in any of the  Obligations  shall be received in
trust for the Secured Party.

5. After the  occurrence of any default in any of the  Obligations,  the Secured
Party may sell  either by public or  private  sale or  otherwise  dispose of the
Debts in such manner, upon such terms and conditions, for such consideration and
at such  time or times as may seem to it  advisable  and  without  notice to the
undersigned and without any liability for any loss resulting therefrom.

6. The  Secured  Party may apply any monies  received  by it against  any of the
Obligations  as the  Secured  Party  deems  best or hold the same in a  separate
collateral  account  for such time as it may see fit and then  apply the same as
aforesaid, the whole without prejudice to its claim for any deficiency.




<PAGE>






                                      - 2 -


7. The Secured Party may  compound,  compromise,  grant  extensions or renewals,
take and give up securities, accept compositions,  grant releases and discharges
and otherwise deal with the Account  Debtors,  the undersigned  and others,  and
with the Debts,  as the  Secured  Party may see fit,  without  prejudice  to the
liability of the  undersigned,  or the Secured Party's right to hold and realize
the security granted hereunder.


8. The Secured  Party need not present,  protest,  give any notice in connection
with, prevent outlawry of, collect, enforce or realize any of the Debts and need
not  protect  or  preserve   them  from,   and  is  hereby   released  from  all
responsibility  for any  depreciation  in or loss of value  which such Debts may
suffer.  The  undersigned  shall  from  time to time  take  all  steps as may be
necessary or desirable  to perfect or maintain  the  perfection  of its security
interest in the Debts.

9. The undersigned agrees to pay to the Secured Party its charges for receiving,
whether directly or through the  undersigned,  payments on account of the Debts,
and also to pay to the Secured  Party its charges  for  services in  collecting,
enforcing or realizing any of the Debts or  attempting  so to do and  authorizes
the Secured Party to add such charges,  sums or expenses to the  indebtedness of
the  undersigned  and/or to retain the same out of monies received by the Secure
Party.

10. The undersigned  covenants and agrees with the Secured Party that all of the
obligations of the  undersigned and others in respect of the Debts and all other
agreements  incidental  or  ancillary  thereto  shall  be  fulfilled,   and  the
undersigned  shall from time to time  forthwith on the Secured  Party's  request
furnish to the Secured Party all writings and information  requested relating to
the Debts and the Secured  Party shall be entitled  from time to time to inspect
any books, papers,  documents or records evidencing or relating thereto and make
copies  thereof and for such purposes the Secured Party shall have access to all
premises occupied by the undersigned.


11. The  undersigned  covenants  and  declares  that none of the Debts have been
assigned  to or pledged or  encumbered  in favour of any other  person,  firm or
corporation and the undersigned  covenants and agrees with the Secured Party not
to  otherwise  assign,  pledge  or  encumber  any of the  Debts  so long as this
agreement  remains  in  force,  to or in favour  of any  other  person,  firm or
corporation without the written consent of the Secured Party.

12. This agreement  shall be binding on the  undersigned  and its successors and
assigns and shall enure to the benefit of the Secured  Party and its  successors
and assigns.





<PAGE>




                                       -3-



13. This  agreement  shall be governed by and construed in  accordance  with the
laws of the Province of Ontario and the laws of Canada applicable therein.

           IN WITNESS WHEREOF this agreement has been executed under the seal of
the undersigned at Toronto, this 10th day of May, 1999

                              POWER PHOTO KIOSKS INC


                              By:  /s/ Ronald Terry Cooke
                                   ------------------------
                              By:
                                   ------------------------

WITNESSES:

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

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




<PAGE>





                                       -4-

                           SCHEDULE "A" (OF EXHIBIT B)