interstar_8k-ex1003.htm


     

    EXHIBIT
      10.3

     

    SECURITY
      AGREEMENT

     

     

    This
      Security Agreement is made and
      entered into this 3rd day of December 2007, by and between Kilpatrick’s
      Rose-Neath Funeral Homes, Crematorium and Cemeteries, Inc. (“Lender”), and
      International Star, Inc., a Nevada corporation (“Borrower”).

    


    For
      the mutual covenants and promises
      herein, and other good and valuable consideration, the sufficiency and receipt
      of which are hereby acknowledged as received between the parties, the parties
      have agreed as follows:

    


    
      	
               

            	
              1.

            	
              Secured
                Debts.  This Security Agreement will secure the following
                debts ("Secured Debts"), together with all extensions, renewals,
                re-financings, modifications, or replacements of these debts: Lender
                has
                made a loan to Borrower, and Borrower has accepted sums of money
                and
                borrowed from Lender up to the sum of U.S. Five Hundred Thousand
                Dollars
                (U.S.$500,000) principal amount (the "debt"), evidenced by a corporate
                promissory note and loan agreement, of even date
                herewith.

            


    

    


    
      	
               

            	
              2.

            	
              Security
                Interest.  To secure the payment and performance of the
                Secured Debt, Borrower gives a security interest in all of the property
                described in this Security Agreement that Borrower owns or has sufficient
                rights in which to transfer an interest now or in the future, wherever
                the
                property is or will be located, and all proceeds and products from
                the
                property (including but not limited to all parts, accessories, repairs,
                replacements, improvements, and accessions to the
                property).  Property is all the collateral given as security for
                the Secured Debts and described in this Security Agreement, and includes
                all obligations that support the payment or performance of the
                property.  “Proceeds” includes anything acquired upon the sale,
                lease, license, exchange or other disposition of the property; any
                rights
                and claims arising from the property; and any collections and
                distributions on account of the
                property.

            


    

    


    Property
      also includes any original evidence of title or ownership whether evidenced
      by a
      certificate of title or ownership, a manufacturer’s statement of origin or other
      documents when the property is titled under state or federal
      law.  Borrower will deliver the title documents and properly execute
      all title documents as necessary to reflect Lender’s security
      interest.  This Security Agreement remains in effect until terminated
      in writing, even if the Secured Debts are paid and Lender is no longer obligated
      to advance any funds to Borrower under any credit or loan
      agreement.

    


    
      	
               

            	
              3.

            	
              Property
                Description.   The property subject to this Security
                Agreement is described as follows:  the loan shall be
                collateralized by, and Borrower does hereby grant as security interest
                to
                Lender in and to the said collateral of Borrower:  a fifty-one
                per cent (51%) interest in the mineral rights of certain mining claims
                in
                the Detrital Wash and Wickieup properties located and situated in
                Mohave
                County, Arizona, and any future claims acquired by International
                Star,
                Inc.

            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    
      	
               

            	
              4.

            	
              Duties
                Toward Property.

            


    

    


    
      	
               

            	
              a.

            	
              Protection
                of Secured Party’s Interest:  Borrower will defend the property
                against any other claim.  Borrower agrees to do whatever is
                necessary to protect Lender’s security interest and to keep its claim in
                the property ahead of the claims of other creditors.  Borrower
                will not do anything to harm Lender’s position.  Borrower will
                keep books, records, and accounts about its business and the
                property.  Lender may examine these and make copies at any
                reasonable time.  Borrower will prepare any reasonable report or
                accounting of the property as requested by
                Lender.

            


    

    


    
      	
               

            	
              b.

            	
              Uses,
                Location and Protection of Property.  Borrower will keep the
                property in its possession and in good repair and will use the property
                only for the commercial uses intended.  Borrower will not change
                the specified uses of the property without Lender’s prior written consent,
                which shall not unreasonably be withheld.  Lender has the right
                of reasonable access to inspect the property using all due care upon
                entering the property.  Borrower will not permit waste on the
                property and will immediately inform Lender of any change of use,
                loss or
                damage to the property of a material nature.  Borrower will at
                all times be in compliance with any local, state or federal laws
                pertaining to the use or operation of the mining activities on the
                property and will carry sufficient liability
                insurance.

            


    

    


    
      	
               

            	
              c.

            	
              Selling,
                Leasing or Encumbering the Property.  Any disposition of the
                property contrary to this Security Agreement may adversely affect
                the
                rights of Lender.  Consequently, Borrower will not sell, offer
                to see, lease, or otherwise transfer or encumber the property without
                prior written consent of Lender, which shall not unreasonably be
                withheld.  Borrower will not permit the Property to be the
                subject of any court order or decree affecting its rights in the
                property
                in any action by anyone other than Lender.  If the property
                includes chattel paper or instruments, either as original collateral
                or as
                proceeds of the property, Borrower will note Lender’s security interest on
                the face of the chattel paper or
                instruments.

            


    

    


    
      	
               

            	
              5.

            	
              Authority
                to Perform.  Borrower authorized Lender to do anything it deems
                reasonable necessary to protect the property, and to perfect and
                continue
                Lender’s security interest in the property.  If Borrower fails
                any of its duties under the Note, Loan Agreement, or this Security
                Agreement, Lender is authorized, without notice to Borrower, to perform
                the duties or cause them to be performed, including but not limited
                to:

            


    

    


    
      	
               

            	
              a.

            	
              Pay
                and discharge taxes, liens, security interests, or other encumbrances
                at
                any time levied or placed on the
                property.

            


    

    


    
      	
               

            	
              b.

            	
              Pay
                any rents or other charges under any lease affecting the
                property.

            


    

    


    
      	
               

            	
              c.

            	
              Order
                and pay for the repair, maintenance and preservation of the
                property.

            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    
      	
               

            	
              d.

            	
              Sign,
                when permitted by law, and file any financing statements on Borrower’s
                behalf and pay for filing or recording
                fees.

            


    

    


    
      	
               

            	
              e.

            	
              Place
                a note on any chattel paper indicating Lender’s interest in the
                property.

            


    

    


    
      	
               

            	
              f.

            	
              Take
                any action Lender deems necessary to realize on the property, including
                performing any part of a contract or endorsing it in Borrower’s
                name.

            


    

    


    
      	
               

            	
              g.

            	
              Handle
                any suits or other proceedings involving the property in Borrower’s
                name.

            


    

    


    
      	
               

            	
              h.

            	
              Prepare,
                file and sign Borrower’s name to any necessary reports or
                accountings.

            


    

    


    
      	
               

            	
              i.

            	
              Make
                an entry on Borrower’s books or records showing the existence of this
                agreement.

            


    

    


    Lender
      has no obligation to perform for Borrower.  But if Lender performs for
      Borrower, it will use reasonable care to preserve and protect the
      property.

    


    
      	
               

            	
              6.

            	
              The
                note and security interest therein is assignable in whole or in part
                by
                Lender upon reasonable written notice to
                Borrower.

            


    

    


    
      	
               

            	
              7.   
                 Borrower hereby represents and warrants to Lender that Borrower has
                all the authority necessary to enter into this security
                agreement.  The officer signing this security agreement and the
                note and loan agreement has all of the necessary corporate authority
                to
                bind Borrower to the terms and conditions of performance recited
                herein.

            


    

    


    
      	
               

            	
              8.

            	
              Borrower
                authorizes Lender to file a financing statement, notice of security
                interest, or notice of lien covering the property.  Borrower
                will comply with, assist, or otherwise facilitate such filing for
                perfecting of Lender’s security
                interest.

            


    

    


    
      	
               

            	
              9.  
                  Any notices called for herein shall be deemed delivered if
                deposited in the U. S. mail with first class postage prepaid and
                addressed
                as follows:

            


    

     

    
      	                       
              If to Star:	International
              Star, Inc. 
              Post
                Office Box 7202

              Shreveport,
                Louisiana 71137

            


    

     

    
      	
                                  
                   If to Rose-Neath:

            	
              Kilpatrick’s
                Rose-Neath Funeral Homes, Crematorium and Cemeteries, Inc.

              
                Post
                  Office Box 26

                
                  Shreveport,
                    Louisiana 71161

                

              

            


    

     

    
      	
               

            	
              10.

            	
              In
                the event of Borrower’s default, Lender shall be entitled to costs of
                collection to enforce
                the terms of the security agreement, including reasonable attorney
                fees
                and court costs.  This agreement may be interpreted according to
                the commercial laws of the State of Louisiana and may be enforced
                in the
                proper court or courts of jurisdiction in that
                state.

            	
            


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Dated
      the
      above date.  In witness the parties have executed this
      agreement.

    


                                                                             

    


    
      	BORROWER 	LENDER 


      	 	 


      	
              International
                Star, Inc.

            	
              Kilpatrick’s
                Rose-Neath Funeral Homes, 

              Crematorium
                and Cemeteries, Inc.

            


    

    


     

    
      	
              By:
                /s/ Virginia K.
                Shehee                           

              Virginia
                K. Shehee

              Chairman
                and Acting President

            	
              By:
                /s/ Margaret Shehee
                Cole                         
                

              Margaret
                Shehee Cole

              Vice
                President

            


    

     

     

    
      	
              By:
                /s/ Jacqulyn B.
                Wine                             

              Jacqulyn
                B. Wine

              Acting
                Secretary and Treasurer