UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C.   20549





FORM
20-F





(Mark
one)





[    ]
            REGISTRATION
      STATEMENT PURSUANT TO SECTION 12(b)3 OR (g) OF THE SECURITIES EXCHANGE ACT
      OF 1934





OR





[
      X ]
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the
fiscal year ended   April 30,
2007





OR





[    ]
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





OR





[    ]
            SHELL
      COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934


Date of
event requiring this shell company report
____________________________________





For the
transition period from ________________________to ________________________








Commission
file number   333-107199








PACIFIC
      GOLD ENTERTAINMENT INC.(Exact
      name of Registrant specified in its charter)N/A
              (Translation
      of Registrant’s name into English)British
      Columbia
              (Jurisdiction
      of incorporation or organization)Suite # 7, 536 Cambie
      Street, Vancouver, British Columbia, V6B 2N7, Canada
              (Address
      of principal executive offices)








Securities
registered or to be registered pursuant to Section 12(b) of the
Act:


Title
      of each class
            Name
      of each exchange on which registeredNone
            N/A





Page
- 1





Securities
registered or to be registered pursuant to Section 12(g) of the
Act:





None(Title
      of Class)





Securities
for which there is a reporting obligation pursuant to Section 15(d) of the
Act:





Shares
      of Common Stock(Title
      of Class)





Indicate
the number of outstanding shares of each of the issuer’s classes of capital or
common stock as of the close of the period covered by the annual
report.





Class
            Outstanding at April 30,
    2007Shares
      of Common Stock
            10,000,000





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.


[    ]   Yes      [
X ]   No





If this
report is an annual or transition report, indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934.        [  X
]   Yes      [    ]  No





Note –
Checking the box above will not relieve any registrant required to file reports
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
from their obligation under those Sections.





Indicate
by check mark whether the registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90
days.           [    ]   Yes      [
X ]   No





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer.  See definition of
accelerated filer and larger accelerated filer in Rule 12b-2 of the Exchange
Act. (Check one):





Larger
accelerated
filer   [    ]                                                                                     Accelerated
filer   [    ]                                                                Non-accelerated
filer  [ X ]





Indicate
by check mark which basis of accounting the registrant has used to prepare the
financial statements included in this filing:





U.S.
GAAP   [ X
]                                                                                                                                        International
Financial Reporting Standards as
issued   [    ]Other  [    ]


by the International
Accounting Standards Board





If
“Other” has been checked in response to the previous question, indicate y check
mark which financial statement item the registrant has elected to
follow.


[    ]   Item
17        [ X ]   Item
18








If this
is an annual report, indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act).      [    ]   Yes      [
X ]   No





Page
- 2


PACIFIC
GOLD ENTERTAINMENT INC.


Form
20-F


PART
I





Item
1. Identity of Directors, Senior Management and Advisers.





The
information required for this Item is not required for an annual
report.





Item
2. Offer Statistics and Expected Timetable.





The
information required for this Item is not required for an annual
report.





Item
3. Key Information.


A.           Selected
financial data.





The
selected financial and other data set forth below should be read in conjunction
with the audited financial statements of Pacific Gold Entertainment Inc. (“PGE Inc.”) as of April 30,
2007 and 2006 including the notes thereto, and “Item 5 - Operating and Financial
Review and Prospects” included in this annual report.  The selected
financial data set forth below for the last four fiscal years are derived from
the audited financial statements of PGE Inc., which have been audited by Pannell
Kerr Forster, registered independent chartered accountants.  PGE
Inc.’s financial statements are maintained in Canadian dollars, expressed in US
dollars, and presented in accordance with accounting principles generally
accepted in the United States of America.  PGE Inc. has commenced
doing business as a film producer.





(US$)
            April
      30Statement
      of Operations Data
            2007
            2006
            2005
            2004$
            $
            $
            $Revenue
      – Sales
            0
            0
            8,464
            0Costs
      of sales
            0
            0
            5,120
            0Website
      construction and maintenance (recovery)
            (4,351)
            4,218
            10,000
            0Operating
      expenses
            126,537
            5,521
            9,513
            6,189Total
      expenses
            122,186
            9,739
            19,513
            6,189Net
      loss
            (122,
      186)
            (9,739)
            (16,169)
            (6,189)Other
      comprehensive income (loss)
            (4,245)
            (2,307)
            0
            87Comprehensive
      loss
            (126,431)
            (12,046)
            (16,169)
            (6,102)Weighted
      average number of shares
            10,000,000
            10,000,000
            10,000,000
            10,000,000Basic
      and diluted loss per shares
            $(0.01)
            $(0.00)
            $(0.00)
            $(0.00)(US$)
            April
      30Statement
      of Operations Data
            2007
            2006
            2005
            2004$
            $
            $
            $Cash
      and cash equivalents
            0
            4,294
            0
            13Total
      current assets
            48,710
            9,234
            3,344
            13Total
      Assets
            529,592
            9,234
            3,344
            13Accounts
      payable and accrued liabilities
            119,257
            15,988
            17,144
            3,644Due
      to related parties
            549,013
            28,589
            9,497
            3,497Total
      Liabilities
            677,523
            44,577
            26,641
            7,141Shareholders’
      equity (deficiency)
            (147,931)
            (35,343)
            (23,297)
            (7,128)Total
      Liabilities and Shareholders’ Equity
            529,592
            9,234
            3,344
            13








Page
- 3


Exchange
Rates





PGE Inc.
records its finances in Canadian (CDN) dollars and reports its operations in US
dollars.  Fluctuation in the exchange rate between the CDN dollar and
the US dollar will affect the amount of dollars reported in its financial
statements and paid out in respect of cash dividends or other distributions paid
in CDN dollars by PGE Inc.  The following table sets forth, for the
periods and dates indicated, certain information concerning the noon buying rate
of one US dollar in CDN funds.  No representation is made that the CDN
dollar amounts referred to herein could have been or could be converted into US
dollars at any particular rate, or at all.  On November 27, 2009 the
noon buying rate was CDN$1.0624 to US$1.00 [Source:  Bank of
Canada].





High
      and Low Exchange Rates for Previous Six MonthsHigh
            LowNovember
      2009
            1.0774
            1.0460October
      2009
            1.0845
            1.0292September
      2009
            1.1065
            1.0613August
      2009
            1.1079
            1.0686July
      2009
            1.1655
            1.0790June
      2009
            1.1625
            1.0827








Annual
      Average Exchange Rates
              May
      1 to April 30CDN$
      per US$1.002008
            1.02252007
            1.13772006
            1.18612005
            1.27022004
            1.3434





B.           Capitalization
and indebtedness.





The
information required for this Item is not required for an annual
report.





C.           Reason
for offer and use of proceeds.





The
information required for this Item is not required for an annual
report.





D.           Risk
factors.





There are
significant risks associated with an investment in PGE Inc.’s common
stock.  Before making a decision concerning the purchase of PGE Inc.’s
common stock, you should consider each of the following risk factors and the
other information in this annual report, including PGE Inc.’s financial
statements and the related notes, in evaluating PGE Inc.’s business and
prospects.  The risks and uncertainties described below are not the
only ones that impact on PGE Inc.’s business.  Additional risks and
uncertainties not presently known to PGE Inc. or that PGE Inc. currently
considers immaterial may also impair its business operations.  If any
of the following risks actually occur, PGE Inc.’s business and financial results
could be harmed.





Risks associated with PGE Inc.’s business.





1.
            PGE
      Inc. may not be able to continue as a going concern as a result of its
      history of operating losses and PGE Inc. not being able to raise
      additional financing.





A note
provided by PGE Inc.’s independent auditors in PGE Inc.’s financial statements
for the period from inception, March 21, 2003 through April 30, 2007 states
there is a substantial doubt about PGE Inc.’s ability to continue as a going
concern, which is due to PGE Inc.’s history of operating losses and its working
capital deficiency.  PGE Inc.’s ability to continue as a going concern
is dependent on continued financial support from its shareholders, raising
additional capital to fund future operations, and ultimately attaining
profitable operations.  This note may make it more difficult for PGE
Inc. to raise additional equity or debt financing needed to run its business,
and is not viewed favorably by analysts or investors.  PGE Inc. urges
potential investors to review this report before making a decision to invest in
PGE Inc.





Page
- 4


2.
            PGE
      Inc. has a limited history of operations and has losses that it expects to
      continue into the future.  If the losses continue PGE Inc. will
      have to suspend operations or cease
operations.





PGE Inc.
was incorporated on March 21, 2003 and PGE Inc. has no significant operating
history upon which an evaluation of its future success or failure can be
made.  PGE Inc.’s net loss from inception to April 30, 2007 was
$156,662.  PGE Inc. has a limited history of operations that has been
characterized by ongoing operating losses, which management believes will
continue for at least the next 8 to 12 months.  PGE Inc.’s ability to
achieve and maintain profitability and positive cash flow is dependent upon its
ability to generate revenues from its planned business operations and to reduce
development costs.  PGE Inc. cannot guaranty that it will operate
profitably, and if it cannot, PGE Inc. may not be able to meet its working
capital requirements, capital expenditure plans, anticipated production slate,
or other cash needs.  PGE Inc.’s inability to meet those needs could
have a material adverse effect on its business, results of operations and
financial conditions.





3.
            PGE
      Inc. is relatively new to the film production industry with a limited
      history of operations and, as a result, PGE Inc.’s ability to operate and
      compete effectively may be affected
negatively.





In
deciding whether to purchase PGE Inc.’s shares of common stock, and the
likelihood PGE Inc.’s success, you should consider that PGE Inc. is relatively
new to the film production industry and has a limited operating history upon
which to judge its current operations.  As a result, you will be
unable to assess PGE Inc.’s future operating performance or its future financial
results or condition by comparing these criteria against its past or present
equivalents.





4.
            PGE
      Inc. faces substantial capital requirements and financial
      risks.





The
production, acquisition and distribution of films requires a substantial amount
of investment capital.  A significant amount of time may elapse
between PGE Inc.’s expenditure of funds and the receipt of commercial revenues
from or government contributions to its films. This time lapse requires PGE Inc.
to fund a significant portion of its capital requirements from other
sources.  Although PGE Inc. intends to continue to reduce the risks of
its production exposure through financial contributions from distributors, tax
shelters, government and industry programs, and studios, management cannot
assure you that PGE Inc. will continue to implement successfully these
arrangements or that PGE Inc. will not be subject to substantial financial risks
relating to the production, acquisition, completion and release of future
films.  If PGE Inc. increases (through internal growth or acquisition)
its production slate or its production budgets, PGE Inc. may be required to
increase overhead, make larger up-front payments to talent and consequently bear
greater financial risks. Any of the foregoing could have a material adverse
effect on its business, results of operations or financial
condition.





PGE
Inc.’s business model requires that it be efficient in production of its films,
but budget overruns may adversely affect PGE Inc.’s business.  Actual
film costs often exceed their budget, sometimes significantly.  The
production, completion and distribution of films are subject to a number of
uncertainties, including delays and increased expenditures due to creative
differences among key cast members and other key creative personnel or other
disruptions or events beyond PGE Inc.’s control.  Risks such as death
or disability of star performers, technical complications with special effects
or other aspects of production, shortages of necessary equipment, damage to film
negatives, master tapes and recordings or adverse weather conditions may cause
cost overruns and delay or frustrate completion of a production.  If a
film incurs substantial budget overruns, PGE Inc. may have to seek additional
financing from outside sources to complete production.  PGE Inc.
cannot make assurances regarding the availability of such financing on terms
acceptable to PGE Inc., and the lack of such financing could have a material
adverse effect on its business, results of operations and financial
condition.





In
addition, if a film incurs substantial budget overruns, PGE Inc. cannot assure
you that PGE Inc. will recoup these costs, which could have a material adverse
effect on PGE Inc.’s business, results of operations or financial
condition.  Increased costs incurred with respect to a particular film
may result in any such film not being ready for release at the intended time and
the postponement to a potentially less favorable time, all of which could cause
a decline in box office performance, and thus the overall financial success of
such film.  Budget overruns could also prevent a picture from being
completed or released.  Any of the foregoing could have a material
adverse effect on PGE Inc.’s business, results of operations and financial
condition.





Page
- 5


5.
            PGE
      Inc.’s revenues and results of operations are difficult to predict and are
      influenced by a variety of factors, which may cause revenues and results
      of operations to fluctuate
significantly.





Revenues
and results of operations are difficult to predict and depend on a variety of
factors.  PGE Inc.’s revenues and results of operations depend
significantly upon the commercial success of the films that it distributes,
which cannot be predicted with certainty.  Accordingly, PGE Inc.’s
revenues and results of operations may fluctuate significantly from period to
period, and the results of any one period may not be indicative of the results
for any future periods.





PGE Inc.
relies on a few major distributors for the distribution of its film projects. A
single distributor accounts for approximately 50% of PGE Inc.’s film project
distribution.  PGE Inc. does have long-term agreements with most of
its distributors, but PGE Inc. cannot assure you that it will continue to
maintain favorable relationships with these distributors or that they will not
be adversely affected by economic conditions.  If any of these
distributors reduces or cancels a significant order, it could have a material
adverse effect on PGE Inc.’s business, results of operations or financial
condition.





6.
            PGE
      Inc.’s profits, if any, may be negatively impacted by currency exchange
      fluctuations.





PGE
Inc.’s revenues and results of operations are vulnerable to currency
fluctuations.  PGE Inc. reports its revenues and results of operations
in U.S. dollars, but a significant portion of its revenues is earned outside of
the United States.  PGE Inc.’s principal currency exposure is between
Canadian and U.S. dollars.  PGE Inc. cannot accurately predict the
impact of future exchange rate fluctuations between the Canadian dollar and the
U.S. dollar or other foreign currencies on revenues and operating margins, and
fluctuations could have a material adverse effect on PGE Inc.’s business,
results of operations or financial condition.





From time
to time PGE Inc. may experience currency exposure on distribution and production
revenues and expenses from foreign countries, which could have a material
adverse effect on its business, results of operations and financial
condition.





7.
            Failure
      to manage future growth may adversely affect PGE Inc.’s
      business.





PGE
Inc.’s ability to grow through acquisitions, business combinations and joint
ventures, to maintain and expand its development, production and distribution of
films and to fund its operating expenses depends upon PGE Inc.’s ability to
obtain funds through equity financing, debt financing (including credit
facilities) or the sale or syndication of some or all of its interests in
certain projects or other assets.  If PGE Inc. does not have access to
such financing arrangements, and if other funding does not become available on
terms acceptable to it, there could be a material adverse effect on PGE Inc.’s
business, results of operations or financial condition.





Also, PGE
Inc. may enter into, and will continue to pursue, various acquisitions, business
combinations and joint ventures intended to complement or expand its
business.  Given that discussions or activities relating to possible
acquisitions range from private negotiations to participation in open bid
processes, the timing of any such acquisition is uncertain.  Although
from time to time management actively engages in discussions and activities with
respect to possible acquisitions and investments, PGE Inc. has no present
agreements or understandings to enter into any such material
transaction.  Any indebtedness incurred or assumed in any such
transaction may or may not increase its leverage relative to its earnings before
interest, provisions for income taxes, amortization, minority interests, gain on
dilution of investment in subsidiary and discounted operation, or EBIDTA, or
relative to PGE Inc.’s equity capitalization, and any equity issued may or may
not be at prices dilutive to PGE Inc.’s then existing
shareholders.  PGE Inc. may encounter difficulties in integrating
acquired assets with its operations.  Furthermore, PGE Inc. may not
realize the benefits it anticipated when it entered into these
transactions.  In addition, the negotiation of potential acquisitions,
business combinations or joint ventures as well as the integration of an
acquired business could require PGE Inc. to incur significant costs and cause
diversion of management’s time and resources.  Future acquisitions by
PGE Inc. could also result in impairment of goodwill and other intangibles,
development write-offs, and other acquisition-related expenses.





Any of
the foregoing could have a material adverse effect on PGE Inc.’s business,
results of operations or financial condition.





Page
- 6


8.
            Since
      PGE Inc.’s success depends on its arrangement with Pathway Films Inc. for
      the use of the studio and equipment, any alternation to or the termination
      of that arrangement may negatively effect PGE Inc.’s
      operations.





PGE Inc
is partnered with Pathway Films Inc., a fully functioning film and game
production studio and equipment, which allows it to keep every aspect of film
and video game production in-house.  Pursuant to the arrangement with
Pathway Films Inc., PGE Inc. is allowed access to the studio and the equipment
for a reduced rate for overhead and equipment.  However, there is no
written agreement for the arrangement and the arrangement can be terminated
without cause or notice.  If the arrangement is modified in any way or
terminated, and PGE Inc. is unable to use Pathway’s studio and equipment, PGE
Inc. will need to find another studio and other equipment to produce its films
and video games.  Any change in the arrangement could negatively
effect the business operations and financial condition of PGE Inc.





Risks associated with PGE Inc.’s industry.





9.
            PGE
      Inc.’s business operations could be adversely affected by strikes or other
      union job actions.





The films
produced by PGE Inc. generally employ actors, writers and directors who are
members of the Screen Actors Guild, Writers Guild of America and Directors Guild
of America, respectively, pursuant to industry-wide collective bargaining
agreements.  Many productions also employ members of a number of other
unions, including, without limitation, the International Alliance of Theatrical
and Stage Employees, the Teamsters and the Alliance of Canadian Cinema,
Television and Radio Artists.  A strike by one or more of the unions
that provide personnel essential to the production of films could delay or halt
PGE Inc.’s ongoing production activities.  Such a halt or delay,
depending on the length of time, could cause a delay or interruption in PGE
Inc.’s production, marking and distribution of its films, which could have a
material adverse effect on its business, results of operations or financial
condition.





10.
            PGE
      Inc. faces substantial competition in all aspects of PGE Inc.’s
      business.





PGE Inc.
is smaller and less diversified than many of its
competitors.  Although PGE Inc. is an independent distributor and
producer, it constantly competes with major U.S. and international
studios.  Most of the major U.S. studios are part of large diversified
corporate groups with a variety of other operations, including television
networks and cable channels that can provide both means of distributing their
products and stable sources of earnings that may allow them better to offset
fluctuations in the financial performance of their motion picture and television
operations.  In addition, the major studios have more resources with
which to compete for ideas, storylines and scripts created by third parties as
well as for actors, directors and other personnel required for
production.  The resources of the major studios may also give them an
advantage in acquiring other businesses or assets, including film libraries,
that PGE Inc. might also be interested in acquiring.  The foregoing
could have a material adverse effect on PGE Inc.’s business, results of
operations and financial condition.





Also,
technological advances may reduce PGE Inc.’s ability to exploit its
films.  The entertainment industry in general and the motion picture
industry in particular continue to undergo significant technological
developments, including video-on-demand.  This rapid growth of
technology combined with shifting consumer tastes could change how consumers
view PGE Inc.’s films. For example, an increase in video-on-demand could
decrease home video rentals.  Other larger entertainment distribution
companies will have larger budgets to exploit these growing
trends.  PGE Inc. cannot predict how it will financially participate
in the exploitation of its films through these emerging technologies or whether
it has the right to do so for certain of its library titles.  If PGE
Inc. cannot successfully exploit these and other emerging technologies, it could
have a material adverse effect on its business, results of operations or
financial condition.





11.
            PGE
      Inc. faces risks from doing business
  internationally.





PGE Inc.
will distribute its films outside the United States and Canada through third
party licensees and derive revenues from these sources.  As a result,
PGE Inc.’s business is subject to certain risks inherent in international
business, many of which are beyond its control. These risks
include:







●  changes in the
            laws and policies affecting trade,
      investment and taxes (including laws and policies relating to the
      repatriation of funds and to withholding
taxes);


●  differing
degrees of protection for intellectual property;


●  instability
of foreign economies and governments; and


●  cultural
barriers.





Page
- 7


Any of
these factors could have a material adverse effect on PGE Inc.’s business,
results of operations or financial condition.





12.
            PGE
      Inc. may lose certain benefits by failing to meet certain Canadian
      regulatory requirements.





PGE Inc.
may lose investment funds, tax credits and other benefits if it fails to meet
Canadian regulatory requirements.  The Canadian federal government and
a number of its provincial counterparts have established refundable tax credit
programs based on eligible labor expenditures of qualifying production
entities.  PGE Inc. expects that certain of its films will incorporate
these refundable tax credits as elements of production financing.  If
such productions do not ultimately qualify for anticipated refundable tax
credits, the relevant production may require additional funds for completion,
which may not be available from other sources.





For PGE
Inc.’s films to continue to qualify for several refundable tax credits, PGE Inc.
must remain Canadian-controlled pursuant to the Investment Canada Act
(Canada), or ICA, among other statutory requirements.  The ICA
contains rules, the application of which determines whether an entity (as the
term is defined in the ICA) is Canadian-controlled.  Under these
rules, an entity is presumed to be a non-Canadian in certain circumstances,
including where Canadians own less than a majority of voting interests of an
entity.  This presumption may be rebutted, for example, if the entity
establishes that it is not controlled in fact through the ownership of its
voting interests and that two-thirds of the members of its board of directors
are Canadians.





Although
management believes PGE Inc. is currently a Canadian-controlled entity under the
ICA, there can be no assurance that the Minister of Canadian Heritage will not
determine PGE Inc. is out of compliance with the ICA, or that events beyond its
control will not result in PGE Inc. ceasing to be Canadian-controlled pursuant
to the ICA.  The ICA provides the Minister of Canadian Heritage with
discretion to make a determination that a business activity prescribed under the
ICA as relating to Canada’s cultural heritage or national identity (which
includes a business engaged in the production, distribution, sale or exhibition
of film or video products, hereinafter referred to as a “cultural business”) is
not a Canadian-controlled entity, if the Minister is satisfied, after
considering any information or evidence submitted by the entity or otherwise
made available to the Minister or the Director of Investments, that the entity
is controlled in fact by one or more non-Canadians.  If PGE Inc.
ceases to be Canadian-controlled under the ICA, it would no longer qualify or be
entitled to access these refundable tax credits and other Canadian government
and private motion picture industry incentives that are restricted to
Canadian-controlled corporations, including the ability to produce under
Canada’s official co-production treaties with other countries.





Such a
change in status would require PGE Inc. to return tax credits previously
received, reducing its cash balance.  In addition, because under
Canadian GAAP tax credits are included in revenues, PGE Inc. would take a charge
to earnings in the amount of the lost tax credits.  In addition,
certain provincial refundable tax credits require that the applicant be
provincially controlled.  If PGE Inc. ceases to be provincially
controlled, it would no longer be entitled to access the applicable provincial
refundable tax credits.





For all
of the foregoing reasons, the loss of PGE Inc.’s Canadian status could have a
material adverse effect on its business, results of operations or financial
condition.





PGE Inc.
faces other risks in obtaining production financing from private and other
international sources.  For some productions, PGE Inc.’s finances a
portion of its production budgets from incentive programs from such agencies as
Telefilm Canada, as well as international sources in the case of its
international treaty co-productions.  There can be no assurance that
local cultural incentive programs that PGE Inc. may access in Canada and
internationally, as a result of its Canadian-controlled status, will not be
reduced, amended or eliminated.  Any change in policies in connection
with incentive programs may have an adverse impact on PGE Inc.  In
addition, PGE Inc. could lose its ability to exploit such incentive programs in
Canada if it ceases to qualify as “Canadian”.





Certain
films produced by PGE Inc. will be contractually required to be certified as
“Canadian Film and Video Production.”  If a program does not qualify
for such certification, PGE Inc. would be in default on commitments made in
connection with government incentive programs and licenses to broadcasters/
distributors.  In addition, to the extent PGE Inc. does not qualify as
“Canadian” as a result of a merger, an acquisition or an unconstrained share
transfer to one or more non-Canadians, it would no longer qualify for such
incentives/tax credits and may be liable to repay certain benefits to the
applicable authorities.  The foregoing could have a material adverse
effect on PGE Inc.’s business, results of operations or financial
condition.




Page
- 8


13.
            An
      investment by non-Canadians in PGE Inc.’s business may constitute an
      acquisition of control.





Under the
ICA, the Minister of Canadian Heritage has discretion to determine, after
considering any information or evidence submitted by the entity or otherwise
made available to the Minister or the Director of Investments, that an
investment in PGE Inc. by a non-Canadian in a cultural business may constitute
an acquisition of control by that non-Canadian, notwithstanding the provisions
in the ICA that state that certain investments do not or may not constitute an
acquisition of control that would require notification or review under the
ICA.  If the Minister of Canadian Heritage exercises its discretion
and deems an investment by a non-Canadian in a cultural business to be an
acquisition of control, the investment is potentially subject to notification
and/or review.  If the investment is subject to review, the Minister
must be satisfied that the investment is likely to be of net benefit to
Canada.  Such a determination is often accompanied by requests that
the non-Canadian provide undertakings supportive of Canadian cultural
policy.  These undertakings may, in some circumstances, include a
request for financial support of certain initiatives.  The
determination by the Minister of whether a proposed investment is of net benefit
to Canada also includes consideration of sector specific policies of the
Canadian federal government.  One such policy prohibits takeovers of
Canadian owned and controlled film distribution businesses by
non-Canadians.  This prohibition is not contained in the ICA nor in
the regulations made under the ICA, but is a separate foreign investment policy
relating to the Canadian film distribution sector.  If an investment
by a non-Canadian in PGE Inc.’s business is deemed by the Minister to be an
acquisition of control and ultimately subject to review, the current policy of
the Canadian federal government prohibiting the takeover of a Canadian owned and
controlled film distribution business would be applied in the context of the
Minister’s determination of whether the proposed investment would be of net
benefit to Canada, with the result that PGE Inc.’s film distribution business in
Canada may have to be divested to a Canadian purchaser, which could have a
material adverse effect on PGE Inc.’s business, results of operations or
financial condition.





14.
            Protecting
      and defending against intellectual property claims may have a material
      adverse effect on PGE Inc.’s
business.





PGE
Inc.’s ability to compete depends, in part, upon successful protection of its
intellectual property.  PGE Inc. does not have the financial resources
to protect its rights to the same extent as major studios.  PGE Inc.
will attempt to protect proprietary and intellectual property rights to its film
productions through available copyright and trademark laws and licensing and
distribution arrangements with reputable international companies in specific
territories and media for limited durations.  Despite these
precautions, existing copyright and trademark laws afford only limited practical
protection in certain countries.  PGE Inc. also distributes its
products in other countries in which there is no copyright and trademark
protection.  As a result, it may be possible for unauthorized third
parties to copy and distribute PGE Inc.’s film productions or certain portions
or applications of its intended film productions, which could have a material
adverse effect on its business, results of operations or financial
condition.





Litigation
may also be necessary in the future to enforce PGE Inc.’s intellectual property
rights, to protect its trade secrets, or to determine the validity and scope of
the proprietary rights of others or to defend against claims of infringement or
invalidity.





Any such
litigation could result in substantial costs and the diversion of resources and
could have a material adverse effect on PGE Inc.’s business, results of
operations or financial condition.  Management cannot assure you that
infringement or invalidity claims will not materially adversely affect PGE
Inc.’s business, results of operations or financial
condition.  Regardless of the validity or the success of the assertion
of these claims, PGE Inc. could incur significant costs and diversion of
resources in enforcing its intellectual property rights or in defending against
such claims, which could have a material adverse effect on its business, results
of operations or financial condition.





15.
            Piracy
      of motion pictures, including digital and internet piracy, may reduce the
      gross receipts from the exploitation of PGE Inc.’s
  films.





Motion
picture piracy is extensive in many parts of the world, including South America,
Asia, the countries of the former Soviet Union, and other former Eastern bloc
countries.  Additionally, as films begin to be digitally distributed
using emerging technologies such as the internet and online services, piracy
could become more prevalent, including in North America, because digital formats
are easier to copy.  As a result, users can download and distribute
unauthorized copies of copyrighted motion pictures over the
internet.  In addition, there could be increased use of devices
capable of making unauthorized copies of films.  As long as pirated
content is available to download digitally, many consumers may choose to
download such pirated motion pictures rather than pay for motion
pictures.  Piracy of PGE Inc.’s films may adversely impact the gross
receipts received from the exploitation of these films, which could have a
material adverse effect on its business, results of operations or financial
condition.





Page
- 9


Risks associated with PGE Inc.





16.
            The
      loss of key personnel could adversely affect PGE Inc.’s
      business.





PGE
Inc.’s success depends on its ability to attract, retain and motivate qualified
personnel and to a significant degree upon the efforts, contributions and
abilities of its key personnel.  PGE Inc.’s limited financial
resources seriously inhibit its ability to attract qualified
personnel.  Key personnel represent a significant asset, and the
competition for these personnel is intense in the film production
industry.  PGE Inc. has no employment agreements with any of its
personnel and does not maintain key person life insurance on any of its
personnel.  Management cannot assure you that the services of PGE
Inc.’s key personnel will continue to be available to it or that PGE Inc. will
be able to successfully retain such key personnel.  The loss of one or
more of its key personnel or PGE Inc’s inability to attract, retain and motivate
qualified personnel could negatively impact its ability to implement its plan of
operations and to complete its films.





17.
            PGE Inc.does not expect to pay cash
      dividends in the foreseeable future.





PGE Inc.
has never paid cash dividends on its shares of common stock and has no plans to
do so in the foreseeable future.  PGE Inc. intends to retain earnings,
if any, to develop and expand its business operations.





18.
            If
      and when PGE Inc.’s shares of common stock are listed for quotation on the
      NASD’s OTC Bulletin Board, any sale of a significant amount of PGE Inc.’s
      shares of common stock into the public market may depress PGE Inc.’s stock
      price.





Management
and the principal shareholders currently own an aggregate 9.065,000 shares of
common stock, which represent 60.9% of the 14,888,000 issued and outstanding
shares of common stock of PGE Inc.  None of these shares have been
registered for resale under a registration statement.  Currently,
there are 7,723,000 shares of common stock in the capital of PGE Inc. that are
freely tradeable and there are 7,165,000 shares of common stock that are subject
to Rule 144 and there are nil shares of common stock that are restricted from
trading.  If PGE Inc.’s shares of common stock are listed for
quotation on the NASD’s OTC Bulletin Board, management and the principal
shareholders may sell in the future, large amounts of shares of common stock
into the public market over relatively short periods of time subject to Rule
144.  Any sale of a substantial amount of PGE Inc.’s shares of common
stock in the public market may adversely affect the market price of PGE Inc.’s
shares of common stock.  Such sales could create public perception of
difficulties or problems with PGE Inc.’s business and may depress PGE Inc.’s
stock price.





19.
            “Penny
      Stock” rules may make buying or selling PGE Inc.’s shares of common stock
      difficult, and severely limit the market and liquidity of the shares of
      common stock.





Trading
in PGE Inc.’s shares of commons tock is subject to certain regulations adopted
by the SEC commonly known as the “penny stock” rules.  If and when PGE
Inc.’s shares of common stock are quoted for trading on the NASD’s OTC Bulletin
Board, management expects that the shares of common stock will trigger and be
subject to the “penny stock” rules.   These rules govern how
broker-dealers can deal with their clients and “penny stocks”.  The
additional burdens imposed upon broker-dealers by the “penny stock” rules may
discourage broker-dealers from effecting transactions in PGE Inc.’s securities,
which could severely limit their market price and liquidity of PGE Inc.’s
securities.





Item
4. Information on Pacific Gold Entertainment Inc.





Pacific
Gold Entertainment Inc. (“PGE
Inc.”) is a British Columbia corporation that is reporting with the
United States Securities Exchange and Commission.  PGE Inc. is a
Canadian multi-media studio that intends to produce and market genre related,
independent films.  Each film will be marked with spin-off
merchandise, such as soundtracks, graphic novels, tee-shirts and video games on
franchise titles.





A.           History
and development of Pacific Gold Entertainment Inc.





PGE Inc.
was incorporated in British Columbia on March 12, 2003 under the name “CyPacific
Trading Inc.”  On June 27, 2006, PGE Inc. changed its name to its
current name “Pacific Gold Entertainment Inc.”





Page
- 10


PGE
Inc.’s principal place of business is located at Suite # 7, 536 Cambie Street,
Vancouver, British Columbia, V6B 2N7, Canada and the telephone number is
604-633-2753.  PGE Inc.’s registered office is located at 1100
Melville Street, Suite #610, Vancouver, British Columbia, V6E 4A6, Canada and
the telephone number is 604-648-0527.





PGE
Inc.’s original business concept involved Internet-based electronic retail sales
with an on-line store.  PGE Inc. intended to specialize in selling
products obtained from North American manufacturers, which products may be
difficult to find in Asian countries, to individuals and businesses first in
Korea, and later in other parts of Asia.  Subsequently, in 2005, PGE
Inc. had a contract to manage Internet-based electronic retail sales via an
on-line store for Daval Productions Ltd.  Daval Productions Ltd.
produced and distributed travel and sites of interest video products in DVD
format to the travel and tourist industry.  However, in 2006, the
contract with Daval Productions Inc. was cancelled and PGE Inc. changed its
focus and business to film production.





B.           Business
overview.





PGE Inc.
is a multi media studio, specializing in popular, genre branded
films.  With each film project, PGE Inc. will bundle the project with
ancillary merchandise, including video games, graphic novels, t-shirts, and
other related products.  PGE Inc. will also coordinate the release of
its film projects with the release of the video games and the ancillary
merchandise.





PGE
Inc.’s mission is to garner worldwide exposure for all of its projects and
create franchise potentials that generate long term income returns for its
investors.  PGE Inc. will enhance the value and exposure of its
projects by releasing film affiliated merchandises to other lucrative markets,
thus creating familiarity in the licensed products.  PGE Inc.’s model
is to make a quantity of lower budget independent films for the growing DVD
market.  Where the average Canadian film costs about $1 million and
takes about two years to complete, PGE Inc’s average budget is $250K, with a 12
month turn around.  Most Canadian films fail to reach the
international market.  PGE Inc.’s primary focus is the international
markets, via its distributor. PGE Inc. intends to also diversify its licences so
it can create more revenue potentials within a brand.  The Disney
Company employs this model, so rather then spending $12 million on a film, they
will produce four films for $3 million, for greater revenue
potential.





Products





PGE
Inc.’s products will include genre related, independent films, which will be
produced and marketed by PGE Inc.  Also, each film project will be
marked with spin-off merchandise, such as soundtracks, graphic novels,
tee-shirts and video games based on the applicable film
project.   PGE Inc. has commenced production of the first film
project.  PGE Inc. wants to (1) create a non-stop work flow of back to
back film projects for the first two years beginning January 2007; (2) achieve
delivery of the first film project by January 2009; (3) complete two film
projects and two video games to add to the ancillary merchandise by January
2009.





1.           Film
Projects.





PGE Inc.
intends to produce and market the film projects discussed
below.   In July 2006, PGE Inc. obtained the rights to acquire
five film projects that were optioned from SomnamBulist Imagery Inc., for an
exercise price of CDN$32,000 per film project.  See “Item 7.B. –
Related party transactions” below, “Item 10. C. – Material contracts” below, and
Exhibits 4.1 to 4.5 inclusive and Exhibits 4.6 to 4.9 inclusive for more
details.





Subsequently,
PGE Inc. has relinquished its rights in two of the film projects and has issued
a promissory note to Somnambulist Imagery Inc. for each of the following three
film projects.  See “Item 7.B. – Related party transactions” below,
“Item 10. C. – Material contracts” below, and Exhibits 4.31 to 4.33 inclusive
for more details.





Blood:  A
Butcher’s Tale





Blood: A
Butcher’s Tale is a green screen shot feature film. This state of the art
technique shoots actors on a green screen.  Then in the post
production process, through CGI (Computer Generated Imagery) and VFX (Visual
Effects), the backgrounds are replaced with vivid and visually rich details that
could not be created through traditional set construction.





Blood: A
Butcher’s Tale is being produced with a video game, which acts as a
sequel.  The video game, Blood: Butcher’s Block, will be released the
same time as the film, as to capitalize on the same day release marketing of the
film.  This horror feature follows a heart-broken butcher, who exacts
revenge on a clan of vampires who turn his fiancé into a minion of
evil.  The film will be released in conjunction with the video game, a
soundtrack, and graphic novel.  PGE Inc. has budgeted US$500,000 for
this film project.  The budget has increased significantly from last
year due to the inclusion of higher end Visual Effects to reach a broader
market.  The film project is currently in the post-production, which
includes picture editing, sound editing, and FX.  The Film and Video
Game have been both completed and delivered to Daval Releasing as of March 2009.
..





Page
- 11


Pursuant
to the terms and conditions of a visual effects agreement dated January 26,
2007, PGE Inc. is entitled to receive 84% of the net profits from the
distribution of Blood:  A Butcher’s Tale.  From that 84% of
the net profits PGE Inc. is required to pay for the life of the film project (a)
5.6% of the gross amount PGE Inc. receives to the Union of B.C. Performers, and
(b) 4.5% on the first $1 million PGE Inc. receives to the Screen Actors Guild
and 5.4% thereafter.  See Exhibit 4.14 - Visual Effects Agreement for
more details.  Also, see Exhibit 4.15 - Performance Contract with
Aaron Douglas, Exhibit 4.20 - Producers Agreement with Pathway Films Inc.,
Exhibit 4.16 - Producer Employment Agreement with Jennifer Sciole, and Exhibit
4.17 - Funding, Production and Distribution Agreement for more details on the
division of net profits.





Beneath





This
claustrophobic thriller plants the audience in the middle of a cat and mouse
game between a lawyer buried alive in a coffin and a serial killer.  A
young female lawyer wakes up to find herself buried in a coffin.  With
only a cell phone she finds out that she is a pawn of a serial killer who plans
to murder her past clients, who were technically found innocent of their
crimes.  The film will be released in conjunction with the video game,
a soundtrack and graphic novel.  PGE Inc. has budgeted US$3 million
for this film project.  The film project is currently in the
pre-production, which includes casting and financing.





Crimson





A state
of the art horror reveals the deadly world of stem cell research that is tested
on vampires.  Four university students kidnap a woman who they believe
is a vampire, and begin horrific experiments to extract the gene that presumably
gives her immortality.  PGE Inc. intends to release the film in
conjunction with a soundtrack and graphic novel.  PGE Inc. has
budgeted US$2,000,000 for this film project.  The budget has increased
significantly from last year due to affiliate interest for outside
financing.  The film project is currently in development, which
includes commitments for financing and attaching actors.





The
SUBhuman Franchise





Management
has decided not to exercise the two options on this film project and as a result
PGE Inc. has relinquished all rights it had in the film project.





Bunny
Tales





Bunny
Tales is a 3-D CGI animated series that will be released in 12 minute chapters
or sold collectively.





Bunny
Tales is a collection of six classic fairy tales with a modern
twist.  As Mother Bunny reads from her ancient story book, the little
bunnies learn important lessons as they are transported into enchanted and
colorful worlds of magic and wonder.





PGE Inc.
has budgeted US$250,000 for this film project and as of the date of this annual
report has spent $70,027 on this film project.  The film project is
currently in the post-production, which includes picture editing, sound
editing  and FX.  Five of the six chapters have been
completed and are ready for retail.





PGE Inc.
acquired a 49% interest in Bunny Tales pursuant to a transfer agreement dated
June 21, 2007 with Mark Tuit for 24% and a transfer agreement dated June 21,
2007 with Ron Loudoun for 25%.  Subsequently, pursuant to a funding
and production agreement dated January 26, 2008, PGE Inc. transferred 2.5% of
its interest to an arms’ length party.  See Exhibit 4.21 - Transfer
Agreement (Red Blossom), Exhibit 4.22 - Transfer Agreement (Pathway), Exhibit
4.24 - Funding and Production Agreement – Bunny Tales #1, Exhibit 4.25 - Funding
and Production Agreement – Bunny Tales #2, and Exhibit 4.26 - Funding and
Production Agreement – Bunny Tales #3 for more details.





Pursuant
to the terms and conditions of the funding and production agreement PGE Inc. is
entitled to 46.5% of the net profits from the distribution of Bunny
Tales.  See Exhibit 4.26 - Funding and Production Agreement – Bunny
Tales #3 for more details.





Page
- 12


2.           Video
Games.





Also, PGE
Inc. intends to develop and market the following video games in conjunction with
the film projects:





Blood:  Butcher’s
Block





This
video game will pick up immediately where the film “Blood” ends, with
contaminated ground meat being consumed by innocent people.  Those who
consume the meat die, to rise soon after as vampires themselves.  In a
time sensitive reality, the player must escape a gated urban community, with
several blocks of idyllic suburban homes contained within perimeter walls, where
the residences are slowly turning into blood thirsty ghouls.  PGE Inc.
has budgeted US$350,000 for this video game and as of the date of this annual
report has spent approximately $365,000 to complete this video
game.





Pursuant
to a funding, production and distribution agreement dated January 27, 2008, PGE
Inc. owns 90% of the video game “Blood:  Butcher’s Block” and is
entitled to recoup its funds committed to the video game on a priority basis
over any other funds committed to the video game.  See Exhibit 4.27 -
Funding, Production and Distribution Agreement (Blood) for more
details.





NOMBZ





This
video game places you in a zombie infected city where you have to shoot your way
out.  PGE Inc. released the video game on a downloadable format for PC
on March 12, 2008.  PGE Inc. has spent US$100,000 for this video
game.  The video game is completed and selling online.





Pursuant
to a funding, production and distribution agreement dated January 27, 2008, PGE
Inc. owns 90% of the video game “NOMBZ” and is entitled to recoup its funds
committed to the video game in second position to the initial CDN$75,000
committed by PowerUp Studios Inc.  See Exhibit 4.28 - Funding,
Production and Distribution Agreement (NOMBZ) for more details.





3.           Ancillary
Products.





Finally,
PGE Inc. will be further marketing its film projects and video games with the
sale and distribution of soundtracks and graphic novels.  To date, the
only ancillary product that PGE Inc. has completed for delivery is a graphic
novel for “Blood – A Butcher’s Tale”.  PGE Inc. has a budget of 5% of
the budgets for the film projects for these ancillary products.  PGE
Inc. spent a total of $3,500 on the “Blood – A Butcher’s Tale” graphic
novel.   For any net profits earned on any merchandise for “Blood
– A Butcher’s Tale”, PGE Inc. will pay an aggregate 15% of the net profits to
certain actors in the film project.





Partners in
Production





Pathway
Films Inc.





Pathway
Films Inc. is a British Columbia company formed on September 18,
2001.  Ron Loudoun, PGE Inc.’s CFO, is the sole shareholder, officer
and director of Pathway.  Pathway studios will provide deferred costs
of its services and equipment, which include offices for production, HD cameras,
grip and lighting, full sound stage, sound recording facilities, picture edit
facilities, and DVD authoring.





Skywork
Studios Inc.





Skywork
Studios Inc. is a visual effects and motion graphics design studio located in
Vancouver, British Columbia, Canada, that was founded in 1999.  Ashish
Mittal is the president of Skywork.  Skywork has agreed to defer a
percentage in visual special effects, and on-line colour correction and delivery
elements.





PowerUp
Studios Inc.





PowerUp
Studios Inc. is a video game production company based out of Vancouver, British
Columbia.  PowerUp Studios Inc.’s principal and president is Bren
Lynne.  PowerUp Studios Inc. will be responsible for the creation,
completion and marketing of all of the video games produced from PGE
Inc.





Page
- 13


Markets





With PGE
Inc.’s current slate of film projects, video games and merchandise, its target
demographic ranges from 14 years to 35 years, both male and
female.  Management also intends to target comic book, video game and
horror related franchises.





PGE Inc.
will also target the video and DVD market with its film projects.  All
of PGE Inc.’s film projects have secured worldwide video and DVD distribution in
advance, thus eliminating the risk of having to shop a film on the markets
without guarantees.





Dependence on
Partners





PGE Inc.
is not dependent on any patents or licenses, industrial, or commercial or
financial contracts, including contracts with customers or suppliers, with the
exception of the following:





PGE Inc
is partnered with Pathway Films Inc., a fully functioning film and game
production studio, which allows it to keep every aspect of film and video game
production in-house.  Pathway Films Inc. will provide deferred costs
of its services and equipment, which include offices for production, HD cameras,
grip and lighting, full sound stage, sound recording facilities, picture edit
facilities, and DVD authoring.  There is currently no agreement for
this arrangement.  If PGE Inc. is unable to use Pathway’s studio and
equipment, it will have to find another studio and other equipment to produce
its films and video games.  Management cannot be certain at this time,
but it is unlikely that PGE Inc. would be able to secure terms for another
studio and other equipment on such favorable terms as provided by Pathway Films
Inc.





Competition





Film and video game production and
distribution are highly competitive businesses.  PGE Inc. faces
competition from companies within the entertainment business and from
alternative forms of leisure entertainment.PGE Inc.’s
competitors vary in size from very small companies with limited resources to
very large corporations with greater financial, marketing and product
development resources than ours.  Successful competition in PGE Inc’s
target markets is also dependent on price, access to retail shelf space, product
quality, product enhancements, brand recognition, marketing support and access
to distribution channels.  The number of new video game releases for
PC’s in a given year is much higher than the number of new video game releases
for home consoles and handheld platforms.  Management believes PGE
Inc.’s strategy of publishing PC titles within established franchises and games
developed by studios personnel, well-known within the industry allows PGE Inc.
to quickly develop market share with a minimal investment in sales and
distribution infrastructure.





Film
Projects





PGE Inc.
competes with the major studios, numerous independent motion picture and
television production companies such as: Focus Features, New Line Cinema, Castle
Rock Entertainment, Fine Line Features and Warner Independent Pictures, Tri-Star
Pictures, Screen Gems Dimension Films, and Miramax Film Corp.





According
to the Motion Picture Association of America, the average cost to produce and
distribute a major studio film in 2004 was $98.0 million, including $63.6
million of production costs and $34.4 million of distribution and marketing
expenses (typically called “P&A” or “prints and advertising”).





In
comparison, films released by smaller independent studios typically cost less
than $4.0 million to produce and market in the same period. Despite the limited
resources generally available to independent studios, independent films have
gained wider market approval and increased share of overall box office receipts
in recent years. Past successful independent films such as Open Water, Cabin Fever, Saw,
The Blair Witch Projectand Crashhighlight moviegoers’ willingness to support high quality motion pictures
despite limited marketing and production budgets.





Page
- 14


Video
Games





PGE
Inc.’scompetitors vary in size
from very small companies with limited resources to very large corporations with
greater financial, marketing and product development resources than
ours.  These competitors include Activision, Atari, Capcom, Electronic
Arts, Konami, Namco, Sci Entertainment, Sega, Take-Two Interactive Software,
THQ, Ubisoft Entertainment, and Vivendi Universal Games, among
others.  PGE Inc. faces additional competition from the entry of new
companies into the market, including large diversified entertainment
companies.  PGE Inc. willcompete with Microsoft, Nintendo and
Sony, who publish software for their respective systems.   PGE
Inc. also competes with numerous companies licensed by the platform
manufacturers to develop or publish software products for use with their
respective systems.





Government
Regulation





While the
actual production of PGE Inc.’s movies does not require governmental approval,
PGE Inc. is subject to many federal, state, local and foreign regulation with
respect to the production and distribution of its movies. Accordingly, PGE Inc.
is required to be aware and sensitive to government laws and
regulations.  PGE Inc. distributes its films to wholesalers and
retailers in the United States and abroad.  Management has taken steps
to ensure compliance with all federal, state, local and foreign regulations
regulating the content of motion pictures, by staying abreast of all legal
developments in the areas in which motion pictures are
distributed.  In light of PGE Inc.’s efforts to review, regulate and
restrict the distribution of its materials, management believes that the
distribution of PGE Inc.’s products does not violate any statutes or
regulations.





Distribution
rights to films are granted legal protection under the copyright laws of Canada,
the United States and most foreign countries, which impose substantial
civil and criminal sanctions for unauthorized duplication and exhibition of
films.  From time to time, various third parties may contest or
infringe upon PGE Inc.’s intellectual property rights.  Management
will take all appropriate and reasonable measures to secure, protect and
maintain or obtain agreements from licensees to secure, protect and maintain
copyright protection for all of its films and products produced and distributed
by PGE Inc. under the laws of all applicable jurisdictions.  PGE Inc.
can give no assurance that its actions to establish and protect its trade-marks
and other proprietary rights will be adequate to prevent imitation or copying of
its filmed entertainment by others or to prevent third parties from seeking to
block sales of its filmed entertainment as a violation of their trade-marks and
proprietary rights.  Moreover, PGE Inc. can give no assurance that
others will not assert rights in, or ownership of, PGE Inc.’s trade-marks and
other proprietary rights, or that PGE Inc. will be able to successfully resolve
these conflicts.  In addition, the laws of certain foreign countries
may not protect proprietary rights to the same extent as do the laws of the
United States or Canada.  See “Risk Factors” for more
details.





Tax
Credits





The
Canadian federal government and a number of its provincial counterparts have
established refundable tax credit programs based on eligible labor expenditures
of qualifying production entities.  PGE Inc. expects that certain of
its films will incorporate these refundable tax credits as elements of
production financing.  If such productions do not ultimately qualify
for anticipated refundable tax credits, the relevant production may require
additional funds for completion, which may not be available from other
sources.





For PGE
Inc.’s films to continue to qualify for several refundable tax credits, PGE Inc.
must remain Canadian-controlled pursuant to the Investment Canada Act
(Canada) (the “ICA”), among other statutory
requirements.  The ICA contains rules, the application of which
determines whether an entity (as the term is defined in the ICA) is
Canadian-controlled.  Under these rules, an entity is presumed to be a
non-Canadian in certain circumstances, including where Canadians own less than a
majority of voting interests of an entity.  This presumption may be
rebutted, for example, if the entity establishes that it is not controlled in
fact through the ownership of its voting interests and that two-thirds of the
members of its board of directors are Canadians.





Although
management believes PGE Inc. is currently a Canadian-controlled entity under the
ICA, there can be no assurance that the Minister of Canadian Heritage will not
determine PGE Inc. is out of compliance with the ICA, or that events beyond its
control will not result in PGE Inc. ceasing to be Canadian-controlled pursuant
to the ICA.  The ICA provides the Minister of Canadian Heritage with
discretion to make a determination that a business activity prescribed under the
ICA as relating to Canada’s cultural heritage or national identity (which
includes a business engaged in the production, distribution, sale or exhibition
of film or video products, hereinafter referred to as a “cultural business”) is
not a Canadian-controlled entity, if the Minister is satisfied, after
considering any information or evidence submitted by the entity or otherwise
made available to the Minister or the Director of Investments, that the entity
is controlled in fact by one or more non-Canadians.  If PGE Inc.
ceases to be Canadian-controlled under the ICA, it would no longer qualify or be
entitled to access these refundable tax credits and other Canadian government
and private motion picture industry incentives that are restricted to
Canadian-controlled corporations, including the ability to produce under
Canada’s official co-production treaties with other countries.





Page
- 15


In
addition, certain provincial refundable tax credits require that the applicant
be provincially controlled.  If PGE Inc. ceases to be provincially
controlled, it would no longer be entitled to access the applicable provincial
refundable tax credits.





Investment by Non-Canadians





Under the
ICA, the Minister of Canadian Heritage has discretion to determine, after
considering any information or evidence submitted by the entity or otherwise
made available to the Minister or the Director of Investments, that an
investment by a non-Canadian in a cultural business may constitute an
acquisition of control by that non-Canadian, notwithstanding the provisions in
the ICA that state that certain investments do not or may not constitute an
acquisition of control that would require notification or review under the
ICA.  If the Minister of Canadian Heritage exercises its discretion
and deems an investment by a non-Canadian in a cultural business to be an
acquisition of control, the investment is potentially subject to notification
and/or review.  If the investment is subject to review, the Minister
must be satisfied that the investment is likely to be of net benefit to
Canada.  Such a determination is often accompanied by requests that
the non-Canadian provide undertakings supportive of Canadian cultural
policy.  These undertakings may, in some circumstances, include a
request for financial support of certain initiatives.  The
determination by the Minister of whether a proposed investment is of net benefit
to Canada also includes consideration of sector specific policies of the
Canadian federal government.  One such policy prohibits takeovers of
Canadian owned and controlled film distribution businesses by
non-Canadians.  This prohibition is not contained in the ICA nor in
the regulations made under the ICA, but is a separate foreign investment policy
relating to the Canadian film distribution sector.  If an investment
by a non-Canadian in PGE Inc.’s business is deemed by the Minister to be an
acquisition of control and ultimately subject to review, the current policy of
the Canadian federal government prohibiting the takeover of a Canadian owned and
controlled film distribution business would be applied in the context of the
Minister’s determination of whether the proposed investment would be of net
benefit to Canada, with the result that PGE Inc.’s film distribution business in
Canada may have to be divested to a Canadian purchaser, which could have a
material adverse effect on PGE Inc.’s business, results of operations, or
financial condition.





C.           Organizational
structure.





PGE is
not part of a group and PGE does not have any subsidiaries.





D.           Property,
plants and equipment.





As of
April 30, 2007, and as of the date of this annual report, PGE has no material
tangible fixed assets.  Also, PGE has no plans to construct, expand or
improve any facilities.





Item
4A. Unresolved Staff Comments.





There are
no unresolved Staff comments at this time.





Item
5. Operating and Financial Review and Prospects.





A.           Operating
results.





Year
Comparisons between 2007 and 2006





For the
year ended April 30, 2007, PGE Inc. achieved sales revenues of $nil compared
with sales revenues of $nil for the period ended April 30, 2006.  PGE
Inc.’s operating loss increased to $122,186 in 2007 from a loss of $9,739 in
2006.  Such increase in the operating loss was due to an increase in
wages of $76,984, an increase in rent of $16,169, an increase in interest of
$13,843, an increase of professional fees of $7,457, an increase in advertising
of $2,753, an increase in automobile expense of $2,220, an increase in office
expenses of $1,233, an increase in consulting fees of $249, which was offset by
a decrease (recovery) of $8,569 in website construction and
maintenance.  The primary reasons for the increase in operating costs
were due to the production of the Feature Film “Blood: A Butchers Tale”, the
Video Game “Blood: Butchers Block”, and the Bunny Tales collection.





In the
same period, the working capital deficiency increased to $(628,813) in 2007 from
a deficiency of $(35,343) in 2006.  As of the year ended April 30,
2007, PGE Inc. had an accumulated stockholders’ deficiency of
$(147,931).  The current year’s contribution to the deficit was
financed in part by Pathway Films Inc.





Page
- 16


B.           Liquidity
and capital resources.





PGE Inc.
had $nil in cash on hand as at April 30, 2007.  To date PGE Inc.’s
activities have been financed by equity and debt financing.  From
inception (March 21, 2003) to the date of this filing, PGE Inc. raised a total
of $2,318,000 from private offerings of its shares of common stock and borrowed
a total of $830,217 from a related party, Pathway Films Inc.





PGE Inc.
estimates that funding of CDN$1,900,000 will be required to implement its
business plan over the next 12 months.  The funding is anticipated to
be required for film equipment expenses of CDN$30,000, inventory and raw stock
items of CDN$50,000, wage and salaries of CDN$400,000, marketing expenses of
CDN$100,000, administrative costs of CDN$150,000, professional fees of
CDN$80,000, and film production expenses of CDN$1,090,000.





During
the next 12 months, PGE Inc. intends to:





1.           Attend
all film markets and film festivals.


2.
            Contact
      buyers for worldwide distribution of completed projects (including Blood:
      A Butchers Tale, Blood: Butchers Block, NOMBZ and Bunny
      Tales).


3.           Acquiring
and optioning screenplays for future potential projects.


4.           Begin
development and pre-production of two untitled film projects.





See “Item
10. Additional Information – C. Material Contracts” below for more
information.





PGE Inc.
intends to finance its administrative and operating costs by the sale of its
shares, other shareholder financings, and standard business trade
financing.  No commitments to provide additional funds have been made
by management, stockholders or anyone else.





PGE Inc.
intends to raise the required funds to implement its business plan through
equity or debt financing or a combination of both.  To the extent that
additional capital is raised through the sale of equity or equity-related
securities, the issuance of such securities is likely to result in dilution to
PGE Inc.’s shareholders.  There can be no assurance that sources of
capital will be available to PGE Inc. on acceptable terms, or at
all.  The absence of funding would make the successful completion of
PGE Inc.’s business plan doubtful.





C.           Research
and development, patents and licenses, etc.





PGE Inc.
has not spent any funds on research and development activities in the last three
fiscal years except for funds spent for the development of its
website.





PGE Inc.
is not currently conducting any research and development
activities.





Currently,
PGE Inc. has not patents or licenses or registered trademarks or any other
intellectual property, with the exception of the copyright to its film and video
game projects.  PGE Inc. will attempt to protect proprietary and
intellectual property rights to its film projects through available copyright
and trademark laws and licensing and distribution arrangements with reputable
international companies in specific territories and media for limited
durations.





D.           Trend
information.





PGE Inc.
does not have a significant history with respect to its financial operations in
order to identify any recent trends in its
business operations.





E.           Off-balance
sheet arrangements.





PGE Inc.
does do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on its financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that are material to
investors.





Page
- 17


F.           Tabular
disclosure of contractual obligations.





As at
April 30, 2007, PGE Inc. had no contractual obligations and commitments as set
out in the following table.





Payments
      due (by period)less
      than
            
            
            more
      thanContractual
      Obligations
            Total
            one
      year
            1-3
      years
            3-5
      years
            5
      yearsLong-term
      debt obligations
            $nil
            $nil
            $nil
            $nil
            $nilDebentures
            $nil
            $nil
            $nil
            $nil
            $nilLong-term
      accounts payable
            $nil
            $nil
            $nil
            $nil
            $nilContractual
      commitments
            $250,000
            $nil
            $nil
            $nil
            $nilRetirement
      and severance indemnities
            $nil
            $nil
            $nil
            $nil
            $nil





G.           Safe
Harbor.





This Form
20-F - Annual Report contains forward-looking statements.  PGE Inc.
intends to identify forward-looking statements in this report using words such
as “anticipates”, “will”, “believes”, “plans”, “expects”, “future”, “intends”,
“projects”, “estimates”, “should”, “could”, or similar
expressions.  These statements are based on management’s beliefs as
well as assumptions PGE Inc. made using information currently available to
it.  You should not place undue reliance on these forward-looking
statements.  Because these statements reflect PGE Inc.’s current views
concerning future events, these statements involve risks, uncertainties and
assumptions.  Actual future results may differ significantly from the
results discussed in the forward-looking statements.  As a result, the
identification and interpretation of data and other information and their use in
developing and selecting assumptions from and among reasonable alternatives
requires the exercise of judgment.  To the extent that the assumed
events do not occur, PGE Inc.’s outcome may vary substantially from its
anticipated or projected results, and accordingly, PGE Inc. expresses no opinion
on the achievability of those forward-looking statements and give no assurance
that any of the assumptions relating to the forward-looking statements are
accurate.  Some, but not all, of the factors that may cause these
differences include those discussed in the Risk Factors section.





All
forward-looking statements are made as of the date of filing of this Form 20-F
and PGE Inc. disclaims any duty to update such statements.





PGE Inc.
may, from time to time, make oral forward-looking statements.  PGE
Inc. strongly advises you to read the foregoing paragraphs and the risk factors
described in this Form 20-F - Annual Report and in PGE Inc.’s other exhibits and
documents filed with the United States Securities and Exchange Commission for a
description of certain factors that could cause actual results to differ
materially from those in the oral forward-looking statements.  PGE
Inc. disclaims any intention or obligation to update or revise any oral or
written forward-looking statements whether as a result of new information,
future events or otherwise.





Item
6. Directors, Senior Management and Employees.





A.           Directors
and senior management.





Ron
Loudoun (46 years old) – Ron has been a director and officer of PGE Inc.
since March 2004 and has been the CEO and the President of PGE Inc. since
December 2008 and was the CFO of PGE Inc. from March 2004 to December
2008.  Ron is also the sole officer, director, and owner of Pathway
Films Inc., a British Columbia corporation, which owns and operates the studios
that are being leased to PGE Inc.Ron graduated
with a diploma of Administrative management from BCIT in 1983.  In
2001, Ron graduated from the Vancouver Film School Foundation
Program.  In 2002, Ron purchased two buildings and renovated them into
a fully equipped soundstage, HD postproduction facilities and office buildings,
thus creating the studios owned by Pathway Films Inc.





Janet
Gilleshammer (37) – Janet has been the CFO of PGE Inc. since October
2009.  From December 2008 to August 2009 Janet was the CFO of PGE Inc.
and from June 2006 to August 2009 Janet was the Controller and Production
Accountant for PGE Inc., as well as the Controller for Daval Releasing Inc. and
Pathways Films Inc. February 2005 to August 2009.  After graduating
from the University of Manitoba with a B.A. in 1994, Janet studied video &
television production in Vancouver in 1997 and then worked as an assistant
production accountant on the feature film “Limp” in 1998 before going on to
other more corporate office work.  After living & working in Asia
from 2000-2002, Janet began formal studies in accounting in 2003 while working
for B.U.K. Realty, a German owned property management company in
Vancouver.  Janet then accepted a job at the Cambie Film Center with
Daval Releasing Inc. and Pathway Films Inc. in 2005 and was there through the
development of PGE Inc. and did all of the accounting for the studio from 2005
to 2009.





Page
- 18


Rene
Daignault (43) – Rene has been a director and the corporate secretary of
PGE Inc. since June 2006.  Since graduating from University of
Victoria in 1992, Rene has been a business and securities lawyer in British
Columbia and a member in good standing with the Law Society of British
Columbia.  Since July 2002, Rene has been working as a sole
practitioner with start-up companies and clients involved with the securities
markets in both Canada and the United States.





Michael
Grudman (36) – Mike has been a director of PGE Inc. since December
2008.  Michael has worked in the film industry since 2002. After a
stint with Brightlight Pictures inc. as a post-production accountant he then
advanced to Sales and Acquisitions in 2006 for a world class sales and
Distribution Company that is based out of Germany and headed the North American
office in Vancouver.  Michael has sold films with budget ranges from
$1million to $60 million.  For the last 18 months he has been managing
Daval Releasing Inc dealing with acquisitions, sales and distribution. He has
been attending all the major film festivals and has developed and maintained
solid working relationships with buyers and producers from all over the
world.  He lives and spends much of his time in Vancouver, British
Columbia, Canada. He spends 100% of his available time on the affairs of the
Company.







There are
no family relationships among the directors and executive officers of PGE
Inc.  Also, there are no arrangements or understandings with major
shareholders, customers, suppliers or others, by which any director or officer
was elected or appointed.





Advisory
Board





Bren Lynne –Lead
Developer


Game
Producer





Bren was
Senior Programmer at 3DNA Corp in Toronto, Ontario.  Employing direct
marketing and digital distribution methods, 3DNA developed and published the
3DNA Desktop.  Bren ’s other computer and video game development
experience includes Lead Designer at Arc-Media Inc., a developer /publisher
Level Designer/Writer at Pseudo Interactive, developer of Full Auto and Cell
Damage, and Designer and 3D Programmer at Wagga-world Entertainment, an MMORPG
developer.  Bren has nine years experience as a Lead Designer, Senior
Programmer, Level Designer and Writer.  Bren joined EA as a Software
Engineer, and later graduated into his current production role to engage more of
his creative talents, working on such titles as Need For Speed:  Most
Wanted 5-1-0, Fight Night:  Round 2, and NBA Basketball for the
PlayStation Portable (PSP).





Mathew Rose –Video Game
Designer


Game
Producer





Mr. Rose
has over 10 years of Graphic design and 3D animation experience on such titles
as NBA Street: Showdown and Marvel Nemesis PSP, and has worked on several
additional PSP titles (FIFA, Madden, NCAA, Need for Speed, Tiger Woods Golf
etc.) of yet unannounced project as a member of a central art
team.  Currently working as Assistant Art Lead on an as of yet
unannounced project, Mr. Rose designed, purchased and implemented a Linux based
network of 22 workstations, including several file servers, a fax server, print
server and four line testing workstations.  Mr. Rose then evolved to
an IT administrator where he was partially responsible for the administration
and maintenance of nearly 200 workstations and 90 servers.





Robert Merilees –Industry
Advisor


Producer





Over the
past six years working with Infinity Features, Mr. Merilees has helped put
together over US$160M in financing for feature films and
television.  In addition to financing, Mr. Merilees has been
physically producing feature films for seven years.  The most
ambitious feature film project in Canadian history recently completed and
released THE SNOW WALKER, starring Barry Pepper and James
Cromwell.  THE SNOW WALKER has smashed its DVD sales records . Working
behind the scenes, Mr. Merilees has assisted in the financing and production of
films in the Infinity slate such as:  SAVED, MR RIPLEY ’S RETURN,
EVELYN, the Academy Award winning CAPOTE, the New Line Cinema romantic comedy,
and JUST FRIENDS, starring Ryan Reynolds.  Recently Mr. Merilees
wrapped up production on another New Line film, THE CLEANER and the Archlight
production “Stone of Destiny”.





Page
- 19


Charles Martin Smith –Industry Advisor


Producer
/ Director





Mr. Smith
is an American film actor, writer and director.  Mr. Smith landed the
role of Terry “The Toad” Fields in the George Lucas 1973 film AMERICAN
GRAFFITI.  The sequel MORE AMERICAN GRAFFITI (1979), did not have the
success of the original, but he gained notice in THE BUDDY HOLLY STORY (1978),
NEVER CRY WOLF (1983), and the successful STARMAN (1984).  Mr. Smith’s
career continued to receive good reviews for his work in THE UNTOUCHABLES
(1987), SPEECHLESS (1994) and I LOVE TROUBLE (1995).  Mr. Smith was
also one of the directors on the hit TV series BUFFY THE VAMPIRE SLAYER
(1997).  Mr. Smith directed the successful feature film AIR BUD
(Disney-1997).  Mr. Smith also wrote and directed the $12 million
dollar feature film THE SNOW WALKER (2003) for Lionsgate Films.  Mr.
Smith recently completed working with Academy award winning director Curtis
Hanson on LUCKY YOU.





B.           Compensation.





PGE Inc.
paid $45,760 in compensation to its directors and officers during its fiscal
year ended April 30, 2007.





SUMMARY
COMPENSATION TABLE





Name
      and principal position
              
              (a)
            Year
              
              
              
              (b)
            Salary
              
              ($)
              
              (c)
            Bonus
              
              ($)
              
              (d)
            Stock
      Awards
              ($)
              
              (e)
            Option
      Awards
              ($)
              
              (f)
            Non-Equity
      Incentive Plan
              ($)
              
              (g)
            Non-qualified
      Deferred Compen-
              sation
      Earnings ($)
              (h)
            All
      other compen-sation
              ($)
              
              (i)
            Total
              
              ($)
              
              (j)Mark
      Tuit
              Director
              CEO
      & President
              Jun
      2006 – Dec 2008
            2007
            16,640
            nil
            nil
            nil
            nil
            nil
            nil
            16,640Ronald
      Loudoun
              Director
              CEO
              Mar
      2004 – Jun 2006
              Dec
      2008 - present
              CFO
      &  Treasurer
              Mar
      2004 - Dec 2008
            2007
            13,312
            nil
            nil
            nil
            nil
            nil
            nil
            13,312Janet
      Gilleshammer
              CFO
      & Treasurer
              Dec
      2008 - July 2009
              Oct
      2009 - present
            2007
            n/a
            n/a
            n/a
            n/a
            n/a
            n/a
            n/a
            n/aMichael
      George
              Director
              June
      ‘06 – May 2009
            2007
            15,808
            nil
            nil
            nil
            nil
            nil
            nil
            15,808Rene
      Daignault
              Director
              Corporate
      Secretary
              June
      2006 - present
            2007
            nil
            nil
            nil
            nil
            nil
            nil
            nil
            nilMike
      Grudman
              Director
              Dec
      2008 - present
            2007
            n/a
            n/a
            n/a
            n/a
            n/a
            n/a
            n/a
            n/aMayleen
      Ahoy
              CFO
      & Treasurer
              July
      2009 – Oct 2009
            2007
            n/a
            n/a
            n/a
            n/a
            n/a
            n/a
            n/a
            n/a





In the
fiscal year ended April 30, 2007, the amount of retirement and severance
benefits accrued for PGE Inc.’s executive officers and directors was $nil and
there were no pension, retirement or other similar benefits set aside for PGE
Inc.’s executive officers and directors.


Page
- 20





Since PGE
Inc.’s inception, no stock options, stock appreciation rights, or long-term
incentive plans have been granted, exercised or repriced.





There are
no employment agreements between PGE Inc. and any executive officer or director,
and there are no employment agreements or other compensating plans or
arrangements with regard to any executive officer or director that provide for
specific compensation in the event of resignation, retirement, other termination
of employment or from a change of control of PGE Inc. or from a change in a
executive officer’s or director’s responsibilities following a change in
control.





C.           Board
practices.





Each
director holds their office until the next annual meeting of the shareholders or
until he resigns or his successor has been elected or qualified.  Each
officer holds their office until they resign or are removed from their
office.





Currently,
there are no arrangements between PGE Inc. and any of its directors whereby such
directors are compensated for any services provided as directors, or which
provide for benefits upon the termination of employment.





PGE Inc.
does not have a separately-designated standing audit
committee.  Rather, PGE Inc.’s entire board of directors perform the
required functions of an audit committee.  However, none of the
directors meet the independent requirements for an audit committee
member.





PGE
Inc.’s audit committee reviews and recommends to the board of directors for
approval the annual financial statements and the annual report of PGE
Inc.  In addition, the audit committee is charged with the
responsibility of monitoring the integrity of PGE Inc.’s internal controls and
management information systems.  For the purposes of performing these
duties, the members of the audit committee have the right, at all times, to
inspect all of the books and financial records of PGE Inc. and to discuss with
management and the auditors of PGE Inc. any accounts, records and matters
relating to the financial statements of PGE Inc.





PGE
Inc.’s audit committee is responsible for: (1) selection and oversight of PGE
Inc.’s independent accountant; (2) establishing procedures for the receipt,
retention and treatment of complaints regarding accounting, internal controls
and auditing matters; (3) establishing procedures for the confidential,
anonymous submission by PGE Inc.’s employees of concerns regarding accounting
and auditing matters; (4) engaging outside advisors; (5) funding for the outside
auditory and any outside advisors engagement by the audit committee; (6)
reviewing the annual financial statements and management discussion and
analyses; and (7) reviewing any relevant accounting and financial matters
including reviewing PGE Inc.’s public disclosure of information extracted or
derived from its financial statements.  PGE Inc. has adopted an audit
committee charter.  See Exhibit 15.1 - Audit Committee Charter for
more information.  A copy of the Audit Committee Charter can be found
on PGE Inc.’s web site at www.pacificgoldentertainment.com
or a copy can be requested by calling Rene Daignault at (604)
648-0527.





PGE Inc.
does not have a remuneration committee.





D.           Employees.





As of
April 30, 2007, PGE Inc. had five full time employees and no part time
employees.





On August
31, 2008, PGE Inc. dismissed all of its employees, with the exception of its
controller, as a result of PGE Inc. having insufficient funds to pay employee
wages or to make tax remittance payments.  Management made an
operational decision to reduce the overhead during these challenging times and
pay employees on a project by project basis rather than a salary.  As
of the date of this annual report, PGE Inc. has one full time employee and one
part time employees.





Page
- 21


PGE Inc.
expects the number of employees to increase in the current fiscal year as a
result of the commencement of the production of its film projects and video
games.  PGE Inc. may hire union affiliated performers and employees
but the number of employees will depend on the size of production for each film
project.  Management has a good working relationship with the
unions.  For the most part, PGE Inc. will hire temporary employees for
each film project.





E.           Share
ownership.





The
following table sets forth certain information regarding the beneficial
ownership of the common stock of PGE Inc. as of the date of this annual report
of (a) each of PGE Inc.’s directors and officers, and (b) all directors and
officers of PGE Inc., as a group.





Title
      of Class
            Name
      and Address of Beneficial Owner
            Amount
      and Nature of Beneficial Owner
            Percent
              of Class[1]shares
      of
              common
      stock
            Ron
      Loudoun
              536
      Cambie Street, Suite #7
              Vancouver,
      British Columbia
              V6B
      2N7     Canada
            3,900,000
      [2]
            26.2%shares
      of
              common
      stock
            Rene
      Daignault
              1100
      Melville Street, 6th
      Floor
              Vancouver,
      British Columbia
              V6E
      4A6     Canada
            200,000
      [3]
            1.3%shares
      of common stock
            Janet
      Gilleshammer
              705-1170
      Harwood Street
              Vancouver,
      British Columbia
              V6E
      1R8  Canada
            32,500
            0.2%shares
      of
              common
      stock
            Mike
      Grudman
              104
      – 838 West 16th
      Avenue
              Vancouver,
      British Columbia
              V5Z
      1T1     Canada
            Nil
            0%shares
      of
              common
      stock
            Directors
      and Executive Officers (as a group)
            4,132,500
            27.8%





[1]Based
on 14,888,000 shares of common stock issued and outstanding as of November 12,
2009.


[2]Mr.
      Loudoun has an indirect beneficial ownership in these
      shares.  3,400,000 of these shares are registered in the name of
      Pathway Films Inc. and the remaining 500,000 shares are registered in the
      name of Atlantis Financial Group Inc.  Mr. Loudoun is the sole
      shareholder, officer and director of both Pathway Films Inc. and Atlantis
      Financial Group Inc.


[3]Mr.
      Daignault has an indirect beneficial ownership in these
      shares.  These shares are registered in the name of Otter Crique
      Ventures Limitée.  Mr. Daignault is an officer and shareholder
      of Otter Crique Ventures Limitée.





Currently,
there are no convertible securities, including stock options or share purchase
warrants, issued or outstanding.  Also, there is no arrangement for
involving the employees of PGE Inc. in the capital of the PGE Inc., including
any arrangement that involves the issue or grant of options or shares or
securities of PGE Inc.





Item
7. Major Shareholders and Related Party Transactions.





A.           Major
shareholders.





The
following table sets forth, as of the date of this annual report, the total
number of shares of common stock owned beneficially by PGE Inc.’s major
shareholders who are the present owners of 5% or more of PGE Inc.’s total
outstanding shares of common stock.  The stockholders listed below
have beneficial ownership of his shares and possesses sole voting and
dispositive power with respect to the shares.





Page
- 22


Title
      of Class
            Name
      and Address of Beneficial Owner
            Amount and Nature of Beneficial
      Owner[1]
            Percent
              of Class[2]shares
      of
              common
      stock
            Ron
      Loudoun
              536
      Cambie Street, Suite #7
              Vancouver,
      British Columbia
              V6B
      2N7     Canada
            3,900,000
      [3]
            26.2%shares
      of
              common
      stock
            Will
      Loudoun
              1559
      Pritchard Drive
              Westbank,
      British Columbia
              V4T
      1X4     Canada
            3,032,500
            20.4%shares
      of
              common
      stock
            Gary
      D. Feeny
              3142
      Dunsten Road
              Kelowna,
      British Columbia
              V1W
      4H3     Canada
            1,000,000
            6.7%shares
      of
              common
      stock
            Mariner
      International Inc.
              c/o
      #3 - 534 Cambie Street
              Vancouver,
      British Columbia
              V6B
      2N7     Canada
            900,000
            6.0%





[1]The listed beneficial owner has no right to acquire any shares
      within 60 days of the date of this Form 20-F from options, warrants,
      rights, conversion privileges or similar obligations excepted as otherwise
      noted.


[2]Based on 14,888,000 shares of common stock issued and outstanding
      as of November 12, 2009.


[3]Mr. Loudoun has an indirect beneficial ownership in these
      shares.  3,400,000 of these shares are registered in the name of
      Pathway Films Inc. and the remaining 500,000 shares are registered in the
      name of Atlantis Financial Group Inc.   Mr. Loudoun is the
      sole shareholder, officer and director of both Pathway Films Inc. and
      Atlantis Financial Group Inc.





As of the
date of this annual report PGE Inc. has approximately 95 registered
shareholders.  All outstanding shares of common stock in the capital
of PGE Inc. are beneficially owned by shareholders located in Canada and in the
United States.





PGE Inc.
is not aware of any arrangement that may result in a change in control of PGE
Inc.





B.           Related
party transactions.





During
the last fiscal year and up to the date of this annual report, no director,
executive officer or security holder has had any direct or indirect material
interest in any material transaction or a series of similar transactions with
the exception of the following:





Agreements with Daval
Productions Ltd.





Amounts
due from Daval Productions Inc. (“Daval”) are unsecured, have no
stated terms of repayment and are non-interest bearing.  Daval is
owned by a director of PGE Inc. and is PGE Inc’s sole customer, providing 100%
of PGE Inc.’s revenue to date.  The amount due from Daval is $nil for
fiscal year 2007 (2006 - $3,679).





Options Agreements with Mark
Tuit





On July
10, 2006, PGE Inc. acquired five film projects from Mark Tuit, PGE Inc.’s former
President and CEO and the sole shareholder, director and officer of SomnamBulist
Imagery Inc., the owner and seller of the film projects.  The film
projects were acquired pursuant to the terms and conditions of five separate
Option and Literary Purchase Agreements, and include, SUBhuman, Beneath,
Crimson, Blood, and SUBhuman 2.  PGE Inc. acquired each film project
for the price of CDN$32,000 per film project, with payment due on the first day
of production for each film project.  With each film project PGE Inc.
is solely and exclusively granted all motion picture rights (including all
silent, sound dialogue and musical motion picture rights), all television
motion-picture and other television rights, with all radio broadcasting rights
and all publication rights for advertisement, publicity and exploitation
purposes, and certain incidental and allied rights, throughout the world, in and
to each film project and in and to the copyright of it and all renewals and
extensions of copyright.  During the past fiscal year ended April 30,
2007, Blood was put into production and an agreement was made whereby the
$32,000 owing under the respective option agreement has no fixed terms of
repayment and does not bear interest.  The remaining four option
agreements were extended for another 12 months and expired on July 31,
2009.  Also, each option agreement entitled Somnambulist Imagery Inc.
limited stage rights and limited rights to author-written
sequels.  See Exhibits 4.1 to 4.5 inclusive and Exhibits 4.6 to 4.9
inclusive for more details. Subsequently, PGE Inc. has relinquished it rights in
two of the film projects and has issued a promissory note to Somnambulist
Imagery Inc. for the three remaining film projects.  See “Item 7.B. –
Related party transactions” below, “Item 10. C. – Material contracts” below, and
Exhibits 4.31 to 4.33 inclusive for more details.





Page
- 23


Funding, Production and
Distribution Agreement with RTG Productions





On
November 2, 2006, Pathway Films Inc., entered into a funding, production and
distribution agreement with RTG Productions.  Pursuant to the terms
and conditions of the agreement, Pathway Films Inc. retained the services of RTG
Technologies as a producer on the film “Blood:  A Butcher’s Tale” for
the total consideration of $20,000 as fixed compensation plus a deferred
compensation of $15,000.  Additionally, Pathway Films Inc. granted RTG
Productions a 10.0% interest in the net profits of the film and maximum of an
additional 10% will be provided to select cast.  See Exhibit 4.17 -
Funding, Production and Distribution Agreement for more details.





On
February 1, 2007, Pathway Films Inc., PGE Inc. and RTG Productions entered into
an assignment agreement whereby Pathway Films Inc. and PGE Inc. agreed to assign
all of the interest and obligations of in the funding, production and
distribution agreement to PGE Inc. and RTG Productions consented to the
assignment.  See 4.29 – Assignment Agreement for more
details.





Director / Producer
Employment Agreement with Mark Tuit





On
January 1, 2007, PGE Inc. entered into a director / producer employment
agreement with Mark Tuit for the film “Blood – A Butcher’s Tale”.  In
exchange for Mr. Tuit rendering non-exclusive services as a director and
producer, PGE Inc, agreed to pay Mr. Tuit a fixed compensation of CDN$2,080
semi-monthly over the course of pre-production, production, post-production, and
delivery of the film.  Also, PGE Inc. agreed to pay a deferred
compensation fee of CDN$25,000 upon fifth tier recoupment on a pari-passu,
pro-rata basis.  Mr. Tuit is not entitled to any equity in the film
pursuant to the terms of the director / producer employment
agreement.  See Exhibit 4.10 - Director / Producer Employment
Agreement and Exhibit 4.14 - Visual Effect Agreement for more
details.





Producer Employment
Agreement with Ron Loudoun





On
January 1, 2007, PGE Inc. entered into a producer employment agreement with Ron
Loudoun for the film “Blood – A Butcher’s Tale”.  Mr. Loudoun is the
CFO and a director of PGE Inc.  In exchange for Mr. Loudoun rendering
non-exclusive services as an executive producer, PGE Inc, agreed to pay Mr.
Loudoun a fixed compensation of CDN$1,664 semi-monthly over the course of
pre-production, production and post-production of the film.  Also, PGE
Inc. agreed to pay a deferred compensation fee of CDN$25,000 upon fifth tier
recoupment on a pari-passu, pro-rata basis.  Mr. Loudoun is not
entitled to any equity in the film pursuant to the terms of the producer
employment agreement.  See Exhibit 4.11 - Producer Employment
Agreement and Exhibit 4.14 - Visual Effect Agreement for more
details.





Producer Employment
Agreement with Michael George





On
January 1, 2007, PGE Inc. entered into a producer employment agreement with
Michael George for the film “Blood – A Butcher’s Tale”.  Mr. George is
a director of PGE Inc.  In exchange for Mr. George rendering
non-exclusive services as an associate producer, PGE Inc, agreed to pay Mr.
George a fixed compensation of CDN$1,976 semi-monthly over the course of
pre-production, production, post-production, and delivery of the
film.  Also, PGE Inc. agreed to pay a deferred compensation fee of
CDN$25,000 upon fifth tier recoupment on a pari-passu, pro-rata
basis.  Mr. George is not entitled to any equity in the film pursuant
to the terms of the producer employment agreement.  See Exhibit 4.12 -
Producer Employment Agreement and Exhibit 4.14 - Visual Effect Agreement for
more details.





Producer Employment
Agreement with Richard Powell





On
January 1, 2007, PGE Inc. entered into a producer employment agreement with
Richard Powell for the film “Blood – A Butcher’s Tale”.  At the time
of entering into the agreement, Mr. Powell was a major shareholder of PGE
Inc.  In exchange for Mr. Powell rendering non-exclusive services as
an associate producer, PGE Inc, agreed to pay Mr. Powell a fixed compensation of
CDN$1,456 semi-monthly over the course of pre-production, production, and
post-production of the film.  Also, PGE Inc. agreed to pay a deferred
compensation fee of CDN$25,000 upon fifth tier recoupment on a pari-passu,
pro-rata basis.  Mr. Powell is not entitled to any equity in the film
pursuant to the terms of the producer employment agreement.  See
Exhibit 4.13 - Producer Employment Agreement and Exhibit 4.14 - Visual Effect
Agreement for more details.





Visual Effects Agreement –
Bonus Payments





Pursuant
to the visual effects agreement with Skywork Studios Inc. dated January 26,
2007, and the recoupment and payment tiers set out in Schedule “A” to that
agreement, each of Ron Loudoun, Michael George, and Mark Tuit are to receive a
bonus payment of CDN$25,000 in the fifth payment tier when the project generates
CDN$3 million in net profits from the distribution of the project
“Blood:  A Butcher’s Tale”.  See Exhibit 4.14 - Visual
Effect Agreement for more details.





Page
- 24


Settlement of Debt with
Pathway Films Inc.





On May 1,
2007, PGE Inc. and Pathway Films Inc. agreed to settle CDN$500,000 in debt by
issuing 2,000,000 restricted Common Shares at a price of CDN$0.25 per restricted
share to Pathway Films Inc. as full payment of the debt.  After the
settlement of debt, PGE Inc. only owed Pathway Films Inc.
$35,921.  Since April 30, 2007, Pathway Films Inc. has advanced an
additional $697,410 CDN to PGE Inc. and PGE Inc. has repaid CDN$622,603 of these
advances.  As of the date of this annual report, PGE Inc. is indebted
to Pathway Films Inc. in the amount of CDN$110,728, plusCDN$143,115 for
outstanding rent, for a total of CDN$253,843.





Pathway
Films Inc. is a related party of PGE Inc.  PGE Inc. relied upon
Section 4(2) of the Securities Act of 1933 and Rule 903 of Regulation S
promulgated pursuant to that Act by the Securities and Exchange Commission for
this debt settlement.  PGE Inc. is satisfied that it complied with the
requirements of the exemption from the registration and prospectus delivery of
the Securities Act of 1933.  The debt settlement was not a public
offering and was not accompanied by any general advertisement or any general
solicitation.  PGE Inc. received from Pathway Films Inc. a completed
and signed subscription agreement containing certain representations and
warranties, including, among others, that (a) Pathway Films Inc. was not a U.S.
person, (b) Pathway Films Inc. subscribed for the shares for its own investment
account and not on behalf of a U.S. person, and (c) there was no prearrangement
for the sale of the shares with any buyer.  No offer was made or
accepted in the United States, and the share certificates representing the
shares were issued bearing a legend with the applicable trading
restrictions.





Producers Agreement with
Pathway Films Inc.





On May 1,
2007, PGE Inc. entered into a producers agreement with Pathway Films Inc., a
related party, for the film “Blood – A Butcher’s Tale”.  In exchange
for producing services, PGE Inc, agreed to pay a producer fee of CDN$500,000 to
Pathway Films Inc. upon second tier recoupment on a pari-passu, pro-rata basis
and to accrue 15% interest on the producers fee amount from May 1,
2007.  Pathway is not entitled to any equity in the film pursuant to
the terms of the producers agreement.  As of the date of this annual
report, PGE Inc. has accrued approximately CDN$177,945 n simple interest on the
producers fee.  Pathway is not entitled to any equity in the film
pursuant to the terms of the producers agreement.  See Exhibit 4.20 -
Producers Agreement and Exhibit 4.14 - Visual Effect Agreement for more
details.





Transfer Agreement with Red
Blossom Entertainment Inc.





On June
21, 2007, PGE Inc. entered into a transfer agreement with Red Blossom
Entertainment Inc., which is owned by Mark Tuit, a former related party of PGE
Inc., whereby PGE Inc. acquired 24% of the full ownership of the original
material entitled “Bunny Tales” for a purchase price of $
CDN$100,000.  The purchase price has yet to be paid by PGE
Inc.  However, the 24% interest in “Bunny Tales” was transferred to
PGE Inc. in consideration of PGE Inc. delivering to Red Blossom Entertainment
Inc. a non-interest bearing promissory note in the amount CDN$100,000 payable on
demand.  See Exhibit 4.21 - Transfer Agreement (Red Blossom) for more
details.





Transfer Agreement with
Pathway Films Inc.





On June
21, 2007, PGE Inc. entered into a transfer agreement with Pathway Films Inc.,
which is owned by Ron Loudoun, a related party of PGE Inc., whereby PGE Inc.
acquired 25% of the full ownership of the original material entitled “Bunny
Tales” for a purchase price of $ CDN$100,000.  The purchase price has
yet to be paid by PGE Inc.  However, the 25% interest in “Bunny Tales”
was transferred to PGE Inc. in consideration of PGE Inc. delivering to Pathway
Films Inc. a non-interest bearing promissory note in the amount CDN$100,000
payable on demand.  See Exhibit 4.22 - Transfer Agreement (Pathway)
for more details.





Funding and Production
Agreement – Bunny Tales #2.





On
November 12, 2007, PGE Inc. entered into a funding and production agreement with
Skywork Studios Inc, and Daval Releasing Inc.  Pursuant to the terms
and conditions of the funding and production agreement, and the recoupment and
payment tiers set out in Schedule “A” to that agreement, Daval is entitled to
recoup CDN$50,000 in the second payment tier.  See Exhibit 4.25 -
Funding and Production Agreement (Bunny Tales #2) for more details.





Page
- 25


Distribution Agreement with
Daval Releasing Inc.





On
February 20, 2009, PGE Inc. entered into a distribution agreement with Daval
Releasing Inc., which is owned by Ron Loudoun, a director and the CEO of PGE
Inc.  Pursuant to the terms and conditions of the distribution
agreement   Daval Releasing will be paying a minimum guarantee to
PGE Inc. of $100,000 upon acceptance of the director’s cut of the film and
approval of the distributor. The term of the contract is 25 years and proceeds
from all sales will be split 50/50.  Daval Releasing is responsible
for the cost of all print and advertising.  See Exhibit 4.30 -
Distribution Agreement for more details.





Loans from Pathway Films
Inc.





The
amounts due to Pathway Films Inc. (“Pathway”) of $501,882 (2006 -
$12,845) are unsecured, have no stated terms of repayment and are non-interest
bearing.  Pathway is 100% owned by a director of PGE Inc. Also,
Pathway charged PGE Inc. rent of $16,169 for the fiscal year ended April 30,
2007.  On May 1, 2007, PGE Inc. and Pathway Films Inc. agreed to
settle CDN$500,000 in debt by issuing 2,000,000 restricted Common Shares at a
price of CDN$0.25 per restricted share to Pathway Films Inc. as full payment of
the debt.  After the settlement of debt, PGE Inc. only owed Pathway
Films Inc. $35,921.  Since April 30, 2007, Pathway Films Inc. has
advanced an additional CDN$697,410 to PGE Inc. and PGE Inc. has repaid
CDN$622,603 of these advances.  As of the date of this annual report,
PGE Inc. is indebted to Pathway Films Inc. in the amount of CDN$110,728 plus
CDN$143,115 for outstanding rent for a total of CDN$253,843.





C.           Interest
of experts and counsel.





The
information to be disclosed in this Item is not required for an annual
report.





Item
8. Financial Information.





A.           Consolidated
Statements and Other Financial Information.





See “Item
18 - Financial Statements” below for the required financial information for the
fiscal period ended April 30, 2007.





B.           Significant
Changes.





Since
April 30, 2007, PGE Inc. has completed the Video Game NOMBZ and has placed it on
the market for download.  Also, the Bunny Tales series has been
completed and it premiered at MIPCOM market, and is ready for
delivery.  The film “Blood: A Butchers Tale” is due for completion and
market delivery by March 31, 2009.  The video game “Blood: Butchers
Block” is due for completion and market delivery by March 31, 2009.





See “Item
4 – Information on Pacific Gold Entertainment Inc.” above and “Item 10. C. –
Material contracts” below for more information.





Item
9. The Offer and Listing.





A.           Offer
and listing details.





PGE
Inc.’s shares of common stock are currently not listed for trading or quotation
on any exchange or quotation service.





B.           Plan
of distribution.





The
information to be disclosed in this Item is not required for an annual
report.





C.           Markets.





PGE
Inc.’s shares of common stock are currently not listed for trading or quotation
on any exchange or quotation service.  However, PGE Inc. intends to
submit a listing application during this current fiscal year to have its shares
of common stock quoted on the NASD’s OTC Bulletin Board.





D.           Selling
shareholders.





The
information to be disclosed in this Item is not required for an annual
report.





Page
- 26


E.           Dilution.





The
information to be disclosed in this Item is not required for an annual
report.





F.           Expense
of the issue.





The
information to be disclosed in this Item is not required for an annual
report.





Item
10. Additional Information.





A.           Share
capital.





The
information to be disclosed in this Item is not required for an annual
report.





B.           Memorandum
and articles of association.





On March
30, 2006, PGE Inc. transitioned under the new Business Corporations Act
(British Columbia).  The Memorandum was replaced with a Notice of
Articles.  See Exhibit 1.3 –Transition Application for more
details.





On June
27, 2006, PGE Inc. changed its name from “Cypacific Trading Inc.” to “Pacific
Gold Entertainment Inc.”  None of the provisions of the Transition
Application, the Notice of Articles, or the Articles of Incorporation changed as
a result of the name change.  See Exhibit 1.4 – Notice of Articles for
more details.





As
provided by Article 24 of the Articles of PGE Inc., all transfers of shares
require the written approval of the board of directors before being made
effective.  Article 24 also provides that the share transfer
restriction will be in effect until PGE Inc. has been listed for trading on any
stock exchange or any regulatory authority has accepted for filing and has
issued a receipt for a prospectus qualifying the distribution of PGE Inc.’s
securities to the public.  As a result, the directors currently have
the ability to delay, defer, or prevent a change of control.





See
Exhibit 1.1 – Memorandum, Exhibit 1.2 – Articles of Incorporation, Exhibit 1.3
–Transition Application, and Exhibit 1.4 – Notice of Articles for further
details.





C.           Material
contracts.





PGE Inc.
has not entered into any material contracts in the two years immediately
preceding the date of this annual report that have not been in the ordinary
course of business, with the exception of the following:





Recent Sales of Unregistered
Securities -April 25, 2007 - CDN$0.50 Offering





Subsequent
to the fiscal year covered by this report, PGE Inc. raised a total of $309,000
in cash in four closings of this offering, and issued an aggregate 618,000
unregistered and restricted Common Shares to 14 non-US subscribers outside the
United States and one accredited investor in the United States.





On
November 30, 2007, the board of directors approved the acceptance of
subscriptions in the aggregate amount of 286,000 unregistered and restricted
Common Shares at an offering price of CDN$0.50 per restricted
share.





On April
2, 2008, the board of directors approved the acceptance of subscriptions in the
aggregate amount of 92,000 unregistered and restricted Common Shares at an
offering price of CDN$0.50 per restricted share.





On April
26, 2008, the board of directors approved the acceptance of one subscription in
the amount of 10,000 unregistered and restricted Common Shares at an offering
price of CDN$0.50 per restricted share.





On
September 26, 2008, the board of directors approved the acceptance of one
subscription in the amount of 200,000 unregistered and restricted Common Shares
at an offering price of CDN$0.50 per restricted share.





On May
29, 2009, the board of directors approved the acceptance of four subscriptions
in the amount of 30,000 unregistered and restricted Common Shares at an offering
price of CDN$0.50 per restricted share.





Page
- 27


PGE Inc.
set the value of the restricted Common Shares arbitrarily without reference to
its assets, book value, revenues or other established criteria of
value.  All the restricted Common Shares issued in this offering were
issued for investment purposes in a “private transaction”.





For the
non-US subscribers outside the United States, PGE Inc. relied upon Section 4(2)
of the Securities Act of 1933 and Rule 903 of Regulation S promulgated pursuant
to that Act by the Securities and Exchange Commission for this private placement
offering.  PGE Inc. is satisfied that it complied with the
requirements of the exemption from the registration and prospectus delivery of
the Securities Act of 1933.  The offering was not a public offering
and was not accompanied by any general advertisement or any general
solicitation.  PGE Inc. received from each subscriber a completed and
signed subscription agreement containing certain representations and warranties,
including, among others, that (a) the subscriber was not a U.S. person, (b) the
subscriber subscribed for the shares for their own investment account and not on
behalf of a U.S. person, and (c) there was no prearrangement for the sale of the
shares with any buyer.  No offer was made or accepted in the United
States, and the share certificates representing the shares were issued bearing a
legend with the applicable trading restrictions.





Finally,
for accredited investors in the United States, PGE Inc. relied upon Section 4(2)
of the Securities Act of 1933 and Rule 506 Regulation D promulgated pursuant to
that Act by the Securities and Exchange Commission.  PGE Inc. is
satisfied that it has complied with the requirements of the exemption from the
registration and prospectus delivery of the Securities Act of
1933.  Specifically, PGE Inc. made the offer only to accredited
investors as that term is defined under applicable federal and state securities
laws.  The share certificates representing the shares were issued
bearing a legend with the applicable trading restrictions.





Distribution Agreement with
Daval Releasing Inc.





On
February 20, 2009, PGE Inc. entered into a distribution agreement with Daval
Releasing Inc., which is owned by Ron Loudoun, a director and the CEO of PGE
Inc.  Pursuant to the terms and conditions of the distribution
agreement Daval Releasing will be paying a minimum guarantee to PGE Inc. of
$100,000 upon acceptance of the director’s cut of the film and approval of the
distributor. The term of the contract is 25 years and proceeds from all sales
will be split 50/50.  Daval Releasing is responsible for the cost of
all print and advertising.  See Exhibit 4.30 - Distribution Agreement
for more details.





Funding, Production and
Distribution Agreement with PowerUp – “Blood:  Butcher’s
Block”





On
January 27, 2008, PGE Inc. entered into a production and financing contract with
Power Up Studios Inc., an arms-length company.  PGE Inc. intends to
produce and finance a full-length video game by utilizing the services of Power
Up Studios Inc.  PGE Inc. has committed to paying and has paid
CDN$250,000 in relation to the development of the video game.





For
providing the funds, PGE will be last money in and will be in the first position
to recoup its funds.  Subsequently 2nd tier
equity owners will receive pari passu with PGE Inc. receiving 90% and PowerUp
Studios receiving 10%.  For the purpose of calculating revenue from
the sales of bundle packages containing both the video game and the film,
revenues will be split in half unless the parties agree otherwise.





The
contract also includes an agreement whereby Power Up Studios Inc. will repay PGE
Inc. for computer hardware purchased for production of the full-length video
game over a six-month period ending in June 2007.  The short-term loan
of CDN$5,918 was paid in full subsequent to April 30, 2007.





See
Exhibit 4.27 - Funding, Production and Distribution Agreement (Blood) for more
details.





Funding, Production and
Distribution Agreement with PowerUp – “NOMBZ”





On
January 27, 2008, PGE Inc. entered into a funding, production and distribution
agreement with PowerUp Studios, an arms-length company.  Pursuant to
the terms of the agreement, PGE will provide up to CDN$75,000 in cash or other
bankable considerations, distribution opportunities, and talent procurement for
the video game “NOMBZ”.





For
producing NOMBZ, PowerUp Studios will receive CDN$75,000 first tier recoupment
from the net profits of sales and distribution of the video game, after which
net profits will be shared pari passu with PGE Inc. receiving 90% and PowerUp
Studios receiving 10%.  See Exhibit 4.28 - Funding, Production and
Distribution Agreement (NOMBZ) for more details.





Page
- 28


Funding and Production
Agreements – Bunny Tales.





On July
17, 2006, Skywork Studios Inc., Pathway Films Inc., and Red Blossom
Entertainment Inc. entered into a funding and production agreement setting out
their interest in the project “Bunny Tales”.  See Exhibit 4.24 -
Funding and Production Agreement (Bunny Tales #1) for more details.





Subsequent
to the initial Bunny Tales agreement and the two transfer agreements discussed
below, on November 12, 2007, PGE Inc. entered into a funding and production
agreement with Skywork Studios Inc, and Daval Releasing Inc.  See
Exhibit 4.25 - Funding and Production Agreement (Bunny Tales #2) for more
details.





On
January 26, 2008, PGE Inc. entered into a funding and production agreement with
Skywork Studios Inc, and Marigold Paints Pvt. Ltd.  Pursuant to the
terms and conditions of the funding and production agreement, and the recoupment
and payment tiers set out in Schedule “A” to that agreement, PGE Inc. is
entitled to a payment of CND$100,000 in the second payment tier and then 46.5%
of the net profits from the distribution of the Bunny Tales
project.  See Exhibit 4.26 - Funding and Production Agreement (Bunny
Tales #3) for more details.





Producers Agreement with Cam
Watts





On July
27, 2007, PGE Inc. entered into a producers agreement with Cam Watts for the
film project “Beneath” or the next film project that PGE commences depending on
funding, as determined by the board of directors.  In exchange for
producing services, PGE Inc, agreed to pay a producer fee of CDN$50,000 to Cam
Watts upon first tier recoupment on a pari-passu, pro-rata basis and to accrue
15% interest on the producers fee amount from July 27, 2007, which will be due
upon final sale.  As of the date of this annual report, PGE Inc. has
accrued approximately CDN$16,192 in simple interest on the producers
fee.  Film equity on the next film project will be distributed in the
amount of a percentage based on a ratio of CDN$50,000 to the final budget, which
is yet to be determined.  See Exhibit 4.23 - Producers Agreement for
more details.





Transfer Agreement with Red
Blossom Entertainment Inc.





On June
21, 2007, PGE Inc. entered into a transfer agreement with Red Blossom
Entertainment Inc., which is owned by Mark Tuit, a former related party of PGE
Inc., whereby PGE Inc. acquired 24% of the full ownership of the original
material entitled “Bunny Tales” for a purchase price of $
CDN$100,000.  The purchase price has yet to be paid by PGE
Inc.  However, the 24% interest in “Bunny Tales” was transferred to
PGE Inc. in consideration of PGE Inc. delivering to Red Blossom Entertainment
Inc. a non-interest bearing promissory note in the amount CDN$100,000 payable on
demand.  See Exhibit 4.21 - Transfer Agreement (Red Blossom) for more
details.





Transfer Agreement with
Pathway Films Inc.





On June
21, 2007, PGE Inc. entered into a transfer agreement with Pathway Films Inc.,
which is owned by Ron Loudoun, a related party of PGE Inc., whereby PGE Inc.
acquired 25% of the full ownership of the original material entitled “Bunny
Tales” for a purchase price of $ CDN$100,000.  The purchase price has
yet to be paid by PGE Inc.  However, the 25% interest in “Bunny Tales”
was transferred to PGE Inc. in consideration of PGE Inc. delivering to Pathway
Films Inc. a non-interest bearing promissory note in the amount CDN$100,000
payable on demand.  See Exhibit 4.22 - Transfer Agreement (Pathway)
for more details.





Producers Agreement with
Pathway Films Inc.





On May 1,
2007, PGE Inc. entered into a producers agreement with Pathway Films Inc., a
related party, for the film “Blood – A Butcher’s Tale”.  In exchange
for producing services, PGE Inc, agreed to pay a producer fee of CDN$500,000 to
Pathway Films Inc. upon second tier recoupment on a pari-passu, pro-rata basis
and to accrue 15% simple interest on the producers fee amount from May 1,
2007.  Pathway is not entitled to any equity in the film pursuant to
the terms of the producers agreement.  As of the date of this annual
report, PGE Inc. has accrued approximately CDN $179,795 in simple interest on
the producers fee.  See Exhibit 4.20 - Producers Agreement for more
details.





Settlement of Debt with
Pathway Films Inc.





On May 1,
2007, PGE Inc. and Pathway Films Inc. agreed to settle CDN$500,000 in debt by
issuing 2,000,000 restricted Common Shares at a price of CDN$0.25 per restricted
share to Pathway Films Inc. as full payment of the debt.  After the
settlement of debt, PGE Inc. only owed Pathway Films Inc.
$35,921.  Since April 30, 2007, Pathway Films Inc. has advanced an
additional CDN $697,410 to PGE Inc. and PGE Inc. has repaid CDN $622,603 of
these advances.  As of the date of this annual report, PGE Inc. is
indebted to Pathway Films Inc. in the amount of  CDN $110,728, plus
CDN $143,115 for outstanding rent, for a total of CDN $253,843.





Page
- 29


Pathway
Films Inc. is a related party of PGE Inc.  PGE Inc. relied upon
Section 4(2) of the Securities Act of 1933 and Rule 903 of Regulation S
promulgated pursuant to that Act by the Securities and Exchange Commission for
this debt settlement.  PGE Inc. is satisfied that it complied with the
requirements of the exemption from the registration and prospectus delivery of
the Securities Act of 1933.  The debt settlement was not a public
offering and was not accompanied by any general advertisement or any general
solicitation.  PGE Inc. received from Pathway Films Inc. a completed
and signed subscription agreement containing certain representations and
warranties, including, among others, that (a) Pathway Films Inc. was not a U.S.
person, (b) Pathway Films Inc. subscribed for the shares for its own investment
account and not on behalf of a U.S. person, and (c) there was no prearrangement
for the sale of the shares with any buyer.  No offer was made or
accepted in the United States, and the share certificates representing the
shares were issued bearing a legend with the applicable trading
restrictions.





Producer Employment
Agreement with Jennifer Sciole





On March
31, 2007, PGE Inc., entered into a producer employment agreement with Result
Technology Group, LLC, on behalf of Jennifer Sciole.  Pursuant to the
terms and conditions of the agreement, PGE Inc. retained the services of Ms.
Sciole as a producer on the film “Blood:  A Butcher’s Tale” for the
consideration of $10,000 as fixed compensation plus a deferred compensation of
$15,000 in first position of all contingent deferments.  Additionally,
PGE Inc. granted Ms. Sciole a 1.0% interest in the net profits of the
film.  See Exhibit 4.16 - Producer Employment Agreement (Jennifer
Sciole) for more details.





On April
1, 2007, Ms. Sciole agreed to exchange the fixed compensation of CDN$10,000 for
40,000 restricted Common Shares in the capital of PGE Inc. at CDN$0.25 per
restricted share.  See Exhibit 4.18 - Amending Agreement (Sciole) for
more details.





Funding, Production and
Distribution Agreement with RTG Productions





On
November 2, 2006, Pathway Films Inc., entered into a funding, production and
distribution agreement with RTG Productions.  Pursuant to the terms
and conditions of the agreement, Pathway Films Inc. retained the services of RTG
Technologies as a producer on the film “Blood:  A Butcher’s Tale” for
the total consideration of $20,000 as fixed compensation plus a deferred
compensation of $15,000.  Additionally, Pathway Films Inc. granted RTG
Productions a 10.0% interest in the net profits of the film and maximum of an
additional 10% will be provided to select cast.  See Exhibit 4.17 -
Funding, Production and Distribution Agreement for more details.





On
February 1, 2007, Pathway Films Inc., PGE Inc. and RTG Productions entered into
an assignment agreement whereby Pathway Films Inc. and PGE Inc. agreed to assign
all of the interest and obligations of in the funding, production and
distribution agreement to PGE Inc. and RTG Productions consented to the
assignment.  See 4.29 – Assignment Agreement for more
details.





On April
1, 2007, RTG Productions agreed to exchange CDN$10,000 of the fixed compensation
for 40,000 restricted Common Shares in the capital of PGE Inc. at CDN$0.25 per
restricted share and an additional CDN$10,000 of the CDN$15,000 deferred
compensation for 40,000 restricted Common Shares in the capital of PGE Inc. at
CDN$0.25 per restricted share.  See Exhibit 4.19 - Amending Agreement
for more details.





Performer Contract with
Aaron Douglas





On March
16, 2007, PGE Inc. entered into a performer contract with Aaron Douglas agreeing
to pay the performer 5% of the net profits of the motion picture
“Blood:  A Butcher’s Tale”.   For the period ended
April 30, 2007, PGE Inc. paid Mr. Douglas an aggregate CDN$13,531.64 pursuant to
the terms of the agreement.  Subsequently, PGE Inc. has paid Mr.
Douglas an additional CDN$1,380.56 pursuant to the terms of the agreement up to
the date of this report.  See Exhibit 4.15 - Performer Contract for
more details.





Visual Effects Agreement
with Skywork Studios Inc.





On
January 26, 2007, PGE Inc, entered into a visual effects agreement with Skywork
Studios Inc., in which Skywork provided VFX and CGI services for “Blood – A
Butcher’s Tale” for a fee of $150,000.  The fee for services will be
paid to Skywork as set out in Schedule “A” of the agreement under the third
payment tier.  Pursuant to the same payment tiers, PGE Inc. will
receive 84% of the net profits on distribution of “Blood – A Butcher’s Tale” as
set out under the fourth payment tier and the final payment and ownership
tier.  See Exhibit 4.14 - Visual Effect Agreement for more
details.





Page
- 30


Director / Producer
Employment Agreement with Mark Tuit





On
January 1, 2007, PGE Inc. entered into a director / producer employment
agreement with Mark Tuit for the film “Blood – A Butcher’s Tale”.  In
exchange for Mr. Tuit rendering non-exclusive services as a director and
producer, PGE Inc, agreed to pay Mr. Tuit a fixed compensation of CDN$2,080
semi-monthly over the course of pre-production, production, post-production, and
delivery of the film.  Also, PGE Inc. agreed to pay a deferred
compensation fee of CDN$25,000 upon fifth tier recoupment on a pari-passu,
pro-rata basis.  Mr. Tuit is not entitled to any equity in the film
pursuant to the terms of the director / producer employment
agreement.  See Exhibit 4.10 - Director / Producer Employment
Agreement and Exhibit 4.14 - Visual Effect Agreement for more
details.





Producer Employment
Agreement with Ron Loudoun





On
January 1, 2007, PGE Inc. entered into a producer employment agreement with Ron
Loudoun for the film “Blood – A Butcher’s Tale”.  In exchange for Mr.
Loudoun rendering non-exclusive services as an executive producer, PGE Inc,
agreed to pay Mr. Loudoun a fixed compensation of CDN$1,664 semi-monthly over
the course of pre-production, production, and post-production of the
film.  Also, PGE Inc. agreed to pay a deferred compensation fee of
CDN$25,000 upon fifth tier recoupment on a pari-passu, pro-rata
basis.  Mr. Loudoun is not entitled to any equity in the film pursuant
to the terms of the producer employment agreement.  See Exhibit 4.11 -
Producer Employment Agreement and Exhibit 4.14 - Visual Effect Agreement for
more details.





Producer Employment
Agreement with Michael George





On
January 1, 2007, PGE Inc. entered into a producer employment agreement with
Michael George for the film “Blood – A Butcher’s Tale”.  In exchange
for Mr. George rendering non-exclusive services as an associate producer, PGE
Inc, agreed to pay Mr. George a fixed compensation of CDN$1,976 semi-monthly
over the course of pre-production, production, post-production, and delivery of
the film.  Also, PGE Inc. agreed to pay a deferred compensation fee of
CDN$25,000 upon fifth tier recoupment on a pari-passu, pro-rata
basis.  Mr. George is not entitled to any equity in the film pursuant
to the terms of the producer employment agreement.  See Exhibit 4.12 -
Producer Employment Agreement and Exhibit 4.14 - Visual Effect Agreement for
more details.





Producer Employment
Agreement with Richard Powell





On
January 1, 2007, PGE Inc. entered into a producer employment agreement with
Richard Powell for the film “Blood – A Butcher’s Tale”.  In exchange
for Mr. Powell rendering non-exclusive services as an associate producer, PGE
Inc, agreed to pay Mr. Powell a fixed compensation of CDN$1,456 semi-monthly
over the course of pre-production, production, and post-production of the
film.  Also, PGE Inc. agreed to pay a deferred compensation fee of
CDN$25,000 upon fifth tier recoupment on a pari-passu, pro-rata
basis.  Mr. Powell is not entitled to any equity in the film pursuant
to the terms of the producer employment agreement.  See Exhibit 4.13 -
Producer Employment Agreement and Exhibit 4.14 - Visual Effect Agreement for
more details.





Option & Literary
Purchase Agreements





On July
10, 2006, PGE Inc. were granted the right to acquire five film projects optioned
from Mark Tuit, PGE Inc.’s former President and CEO, and the sole shareholder,
director and officer of SomnamBulist Imagery Inc., the owner and seller of the
film projects.  The rights to the film projects were acquired pursuant
to the terms and conditions of five separate Option and Literary Purchase
Agreements, and include the film projects Subhuman, Beneath, Crimson, Blood, and
Subhuman 2.  PGE Inc. will acquire each film project for the price of
CDN$32,000 per film project, with payment due on the first day of production for
each film project.  With each film project PGE Inc. is solely and
exclusively granted all motion picture rights (including all silent, sound
dialogue and musical motion picture rights), all television motion-picture and
other television rights, with all radio broadcasting rights and all publication
rights for advertisement, publicity and exploitation purposes, and certain
incidental and allied rights, throughout the world, in and to each film project
and in and to the copyright of it and all renewals and extensions of
copyright.  Also, each option agreement entitled Somnambulist Imagery
Inc. limited stage rights and limited rights to author-written
sequels.  The option agreements expired on July 31,
2009.  See Exhibits 4.1 to 4.5 inclusive and Exhibits 4.6 to 4.9
inclusive for more details.  Prior to expiry, PGE Inc. has
relinquished it rights in two of the film projects and has issued a promissory
note to Somnambulist Imagery Inc. for the three remaining film
projects.  See “Item 7.B. – Related party transactions” below, “Item
10. C. – Material contracts” below, and Exhibits 4.31 to 4.33 inclusive for more
details.





Page
- 31


Recent Sales of Unregistered
Securities -April 25, 2007 - CDN$0.25 Offering





On April
25, 2007, the board of directors authorized the issuance of up to 2,000,000
unregistered and restricted Common Shares at an offering price of CDN$0.25 per
restricted share.  PGE Inc. set the value of the restricted Common
Shares arbitrarily without reference to its assets, book value, revenues or
other established criteria of value.  All the restricted Common Shares
issued in this offering were issued for investment purposes in a “private
transaction”.





In May
2007, PGE Inc. raised CDN$136,000 in cash from this offering and issued an
aggregate 544,000 restricted Common Shares to 10 non-US subscribers outside the
United States and one accredited investor in the United States.





In June
2007, PGE Inc. raised an additional CDN$25,000 in cash from this offering and
issued an aggregate 100,000 restricted Common Shares to three non-US subscribers
outside the United States.





In July
2007, PGE Inc. raised an additional CDN$179,000 in cash from this offering and
issued an aggregate 716,000 restricted Common Shares to 14 non-US subscribers
outside the United States.





In August
2007, PGE Inc. raised an additional CDN$140,000 in cash from this offering and
issued an aggregate 560,000 restricted Common Shares to 12 non-US subscribers
outside the United States.  Also in August 2007, PGE Inc. received an
additional CDN$2.500 in cash and a subscription agreement for 10,000 restricted
Common Shares from one non-US subscriber outside the United
States.  However, as a result of some discrepancy with this
subscription and another unrelated subscription and the delay in being provided
confirmation of the required information from the subscribers the 10,000
restricted Common Shares were not issued until May 2009.





In
November 2007, PGE Inc. raised an additional CDN$75,000 in cash from this
offering and issued an aggregate 300,000 restricted Common Shares to four non-US
subscribers outside the United States.





PGE Inc.
set the value of the restricted Common Shares arbitrarily without reference to
its assets, book value, revenues or other established criteria of
value.  All the restricted Common Shares issued in this offering were
issued for investment purposes in a “private transaction”.





For the
non-US subscribers outside the United States, PGE Inc. relied upon Section 4(2)
of the Securities Act of 1933 and Rule 903 of Regulation S promulgated pursuant
to that Act by the Securities and Exchange Commission for this private placement
offering.  PGE Inc. is satisfied that it complied with the
requirements of the exemption from the registration and prospectus delivery of
the Securities Act of 1933.  The offering was not a public offering
and was not accompanied by any general advertisement or any general
solicitation.  PGE Inc. received from each subscriber a completed and
signed subscription agreement containing certain representations and warranties,
including, among others, that (a) the subscriber was not a U.S. person, (b) the
subscriber subscribed for the shares for their own investment account and not on
behalf of a U.S. person, and (c) there was no prearrangement for the sale of the
shares with any buyer.  No offer was made or accepted in the United
States, and the share certificates representing the shares were issued bearing a
legend with the applicable trading restrictions.





Finally,
for accredited investors in the United States, PGE Inc. relied upon Section 4(2)
of the Securities Act of 1933 and Rule 506 Regulation D promulgated pursuant to
that Act by the Securities and Exchange Commission.  PGE Inc. is
satisfied that it has complied with the requirements of the exemption from the
registration and prospectus delivery of the Securities Act of
1933.  Specifically, PGE Inc. made the offer only to accredited
investors as that term is defined under applicable federal and state securities
laws.  The share certificates representing the shares were issued
bearing a legend with the applicable trading restrictions.





D.           Exchange
controls.





There are
no governmental laws, decrees or regulations in Canada that restrict the export
or import of capital or that affect the remittance of dividends, interest or
other payments to non-resident holders of PGE Inc.’s securities.  However,
any such remittance to a resident of the United States may be subject to a
withholding tax pursuant to the Income Tax Act (Canada).
 For further information concerning such withholding tax, see “Taxation”
below.





Page
- 32


Limitations
on the ability to acquire and hold shares of PGE Inc. may be imposed by the
Competition Act (Canada) (the “Competition Act”).  This
legislation permits the Commissioner of Competition to review any acquisition of
a significant interest in PGE Inc.  This legislation grants the
Commissioner jurisdiction, for up to three years, to challenge this type of
acquisition before the Competition Tribunal if the Commissioner believes that it
would, or would be likely to, result in a substantial lessening or prevention of
competition in any market in Canada.





The
Competition Act requires that any person proposing to acquire any of the assets
in Canada of an operating business file a notification with the Competition
Bureau where (a) the parties to the transaction, together with their respective
affiliates, have (i) assets in Canada the value of which exceeds $400,000,000 in
the aggregate, or (ii) annual gross revenues from sales in, from or into Canada
that exceed $400,000,000 in the aggregate; and (b) the aggregate
value of those assets, or the gross revenues from sales in or from Canada
generated from those assets, would exceed $50,000,000.  For the purposes of
the Competition Act, asset values and gross revenues are to be determined as of
the last day of the period covered by the most recent audited financial
statements in which the assets or gross revenues are accounted for.





This
legislation also requires any person who intends to acquire shares to file a
notification with the Competition Bureau if certain financial thresholds are
exceeded, and that person would hold more than 20% of PGE Inc.’s voting shares
as a result of the acquisition.  If a person already owns 20% or more of
PGE Inc.’s voting shares, a notification must be filed when the acquisition
would bring that person’s holdings over 50%.  Where a notification is
required, the legislation prohibits completion of the acquisition until the
expiration of a statutory waiting period, unless the Commissioner provides
written notice that he does not intend to challenge the
acquisition.





Except as
may be provided under the Investment Canada Act (the “ICA”), there are no specific
limitations under the laws of Canada, the Province of British Columbia, or in
the Notice of Articles and Articles of PGE Inc. with respect to the rights of
non-residents of Canada to hold and/or vote securities of PGE Inc.





The ICA
requires each individual, government or agency thereof, corporation,
partnership, trust or joint venture that is not a “Canadian” as defined in the
ICA (a “non-Canadian”) making an investment to acquire control of a Canadian
business, the gross assets of which exceed certain defined threshold levels, to
file an application for review with the Investment Review Division of Industry
Canada.  The current threshold level for non-Canadians who are World Trade
Organization investors (as defined in the ICA) is $265,000,000 (in 2006).
 This amount is subject to an annual adjustment on the basis of a
prescribed formula in the ICA to reflect inflation and real growth within
Canada.





In the
context of PGE Inc., in essence, three methods of acquiring control of a
Canadian business are regulated by the ICA: (i) the acquisition of all or
substantially all of the assets used in carrying on business in Canada; (ii) the
acquisition, directly or indirectly, of voting shares of a Canadian corporation
carrying on business in Canada; (iii) the acquisition of voting shares of an
entity which controls, directly or indirectly, another entity carrying on
business in Canada.  An acquisition of a majority of the voting interests
of an entity, including a corporation, is deemed to be an acquisition of control
under the ICA.  However, under the ICA, there is a rebuttable presumption
that control is acquired if one-third of the voting shares of a Canadian
corporation or an equivalent undivided interest in the voting shares of such
corporation are held by a non-Canadian person or entity.  An acquisition of
less than one-third of the voting shares of a Canadian corporation is deemed not
to be an acquisition of control.  An acquisition of less than a majority,
but one-third or more, of the voting shares of a Canadian corporation is
presumed to be an acquisition of control unless it can be established that on
the acquisition the Canadian corporation is not, in fact, controlled by the
acquirer through the ownership of voting shares.  Certain transactions
relating to the acquisition of shares of common stock would be exempt from
review from the ICA, including:





(a)
            acquisition
      of shares of common stock by a person in the ordinary course of a person’s
      business as a trader or dealer in
securities;


(b)
            acquisition
      of control of a Canadian corporation in connection with the realization of
      security granted for a loan or other financial assistance and not for any
      purpose related to the provisions of the ICA;
  and


(c)
            acquisition
      of control of a Canadian corporation by reason of an amalgamation, merger,
      consolidation or corporate reorganization following which the ultimate
      direct or indirect control in fact of the corporation, through the
      ownership of voting interests, remains
  unchanged.





In
addition, if less than a majority of voting interests of a Canadian corporation
are owned by Canadians, the acquisition of control of any other Canadian
corporation by such corporation may be subject to review unless it can be
established that the corporation is not in fact controlled through the ownership
of voting interests and that two-thirds of the members of the board of directors
of the corporation are Canadians.





Page
- 33


Where an
investment is reviewable under the ICA, it may not be implemented unless it is
likely to be of net benefit to Canada.  If an applicant is unable to
satisfy the Minister responsible for Industry Canada that the investment is
likely to be of net benefit to Canada, the applicant may not proceed with the
investment.  Alternatively, an acquiror may be required to divest control
of the Canadian business that is the subject of the investment.





In
addition to the foregoing, the ICA requires formal notification to the Canadian
government of all other acquisitions of control of Canadian businesses by
non-Canadians.  These provisions require a foreign investor to give notice
in the required form, which notices are for information, as opposed to review
purposes





E.           Taxation.





THERE
ARE RECIPROCAL TAX TREATIES BETWEEN CANADA AND THE UNITED
STATES.  INVESTORS IN PGE INC. ARE URGED TO CONSULT THEIR TAX ADVISORS
AS TO THE PARTICULAR CONSEQUENCES TO THEM UNDER U.S. FEDERAL, STATE, LOCAL AND
APPLICABLE FOREIGN TAX LAWS OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF
SHARES OF COMMON STOCK.





Material
Canadian Federal Income Tax Consequences





The
summary below is restricted to the case of a holder (a “Holder”) of one or more shares
of common stock who for the purposes of the Income Tax Act (Canada) is a
non-resident of Canada, holds his shares of common stock as capital property and
deals at arm’s length with PGE Inc.





The
following is a general discussion of certain possible Canadian federal income
tax consequences, under current law, generally applicable to a non-resident of
Canada (as hereinafter defined) of shares of common stock of PGE
Inc.  This discussion does not address all potentially relevant
federal income tax matters and it does not address consequences peculiar to
persons subject to special provisions of federal income tax law, such as those
described above as excluded from the definition of a U.S. Holder.  In
addition, this discussion does not cover any provincial, local or foreign tax
consequences.





Dividends





A Holder
will be subject to Canadian withholding tax (“Part XIII Tax”) equal to 25%,
or such lower rate as may be available under an applicable tax treaty, of the
gross amount of any dividend paid or deemed to be paid on his shares of common
stock.  Under the 1995 Protocol amending the Canada-US Income Tax
Convention (1980) (the “Treaty”) the rate of Part XIII
Tax applicable to a dividend on shares of common stock paid to a Holder who is a
resident of the United States is, if the Holder is a company that beneficially
owns at least 10% of the voting stock of PGE Inc., 5% and in any other case, 15%
of the gross amount of the dividend.  PGE Inc. will be required to
withhold the applicable amount of Part XIII Tax from each dividend so paid and
remit the withheld amount directly to the Receiver General for Canada for the
account of the Holder.





Capital
Gains





A Holder
who disposes of a common share, including by deemed disposition on death, will
not be subject to Canadian tax on any capital gain (or capital loss) thereby
realized unless the common share constituted “taxable Canadian property” as
defined by the Income Tax
Act (Canada). Generally, a common share will not constitute taxable
Canadian property of a Holder unless he held the shares of common stock as
capital property used by him carrying on a business (other than an insurance
business) in Canada, or he or persons with whom he did not deal at arm’s-length
alone or together held or held options to acquire, at any time within the five
years preceding the disposition, 25% or more of the shares of any class of the
capital stock of PGE Inc.





A Holder
who is resident of the United States and realizes a capital gain on disposition
of a common share that was taxable Canadian property will nevertheless, by
virtue of the Treaty, generally be exempt from Canadian tax thereon unless (a)
more than 50% of the value of the common share is derived from, or forms an
interest in, Canadian real estate, including Canadian mineral resource
properties, (b) the common share formed part of the business property of a
permanent establishment that the Holder has or had in Canada within the 12
months preceding disposition, or ( c) the Holder (i) was a resident of Canada at
any time within the ten years immediately the disposition and for a total of 120
months during the 20 years, preceding the disposition, and (ii) owned the common
share when he ceased to be a resident of Canada.





A Holder
who is subject to Canadian tax in respect of a capital gain on disposition of a
common share must include one-half of the capital gain (taxable capital gain) in
computing his taxable income earned in Canada.  This Holder may,
subject to certain limitations, deduct one half of any capital loss (allowable
capital loss) arising on disposition of taxable Canadian property from taxable
capital gains realized in the year of disposition in respect of taxable Canadian
property and, to the extent not so deductible, from such taxable capital gains
of any of the three preceding years or any subsequent year.





Page
- 34


Material
United States Federal Income Tax Consequences





The
following is a general discussion of certain possible United States federal
income tax consequences, under current law, generally applicable to a U.S.
Holder (as hereinafter defined) of shares of common stock of PGE
Inc.  This discussion does not address all potentially relevant
federal income tax matters and it does not address consequences peculiar to
persons subject to special provisions of federal income tax law, such as those
described below as excluded from the definition of a U.S. Holder. In addition,
this discussion does not cover any state, local or foreign tax consequences.
(See “Canadian Federal Income Tax Consequences” above).





The
following discussion is based upon the sections of the Internal Revenue Code of
1986, as amended (the “Code”), Treasury Regulations,
published Internal Revenue Service (“IRS”) rulings, published
administrative positions of the IRS and court decisions that are currently
applicable, any or all of which could be materially and adversely changed,
possibly on a retroactive basis, at any time and which are subject to differing
interpretations.  This discussion does not consider the potential effects, both
adverse and beneficial, of any recently proposed legislation, which, if enacted,
could be applied, possibly on a retroactive basis, at any time.  This
discussion is for general information only and it is not intended to be, nor
should it be construed to be, legal or tax advice to any holder or prospective
holder of shares of common stock of PGE Inc. and no opinion or representation
with respect to United States federal income tax consequences to any such holder
or prospective holder is made.  Accordingly, holders and prospective
holders of shares of common stock of PGE Inc. should consult their own tax
advisors about the federal, state, local, and foreign tax consequences of
purchasing, owning and disposing of shares of common stock of PGE
Inc.





U.S.
Holders





As used
herein, a “U.S. Holder”
means a holder of shares of common stock of PGE Inc. who is a citizen or
individual resident of the United States, a corporation or partnership created
or organized in or under the laws of the United Sates or of any political
subdivision thereof, an estate whose income is taxable in the United States
irrespective of source or a trust subject to the primary supervision of a court
within the United States and control of a United States fiduciary as described
in Section 7701(a)(30) of the Code.  This summary does not address the
tax consequences to, and U.S. Holder does not include, persons subject to
specific provisions of federal income tax law, such as tax-exempt organizations,
qualified retirement plans, individual retirement accounts and other
tax-deferred accounts, financial institutions, insurance companies, real estate
investment trusts, regulated investment companies, broker-dealers, nonresident
alien individuals, or foreign corporations whose ownership of shares of common
stock of PGE Inc. is not effectively connected with conduct on a trade or a
business in the United States, persons or entities that have a “functional
currency” other than the U.S. dollar, shareholders who hold shares of common
stock as part of a straddle, hedging or a conversion transaction, and
shareholders subject to the alternative minimum tax, and shareholders who
acquired their shares of common stock through the exercise of employee stock
options or otherwise as compensation for services.  This summary is
limited to U.S. Holders who own shares of common stock as capital
assets.  This summary does not address the consequences to a person or
entity holding an interest in a shareholder or the consequences to a person of
the ownership, exercise or disposition of any options, warrants or other rights
to acquire shares of common stock.





Distribution
on Shares of Common Stock of PGE Inc.





U.S.
Holders receiving dividend distributions (including constructive dividends) with
respect to shares of PGE Inc. are required to include in gross income for United
States federal income tax purposes the gross amount of such distributions, equal
to the U.S. dollar value of such distributions on the date of receipt (based on
the exchange rate on such date), to the extent that PGE Inc. has current or
accumulated earnings or profits, without reduction for any Canadian income tax
withheld from such distributions. Such Canadian tax withheld may be credited,
subject to certain limitations, against the U.S. Holder’s federal income tax
liability or, alternatively, may be deducted in computing the U.S. Holder’s
federal taxable income by those who itemize deductions. (See more detailed
discussion at “Foreign Tax Credit” below.) To the extent that distributions
exceed current or accumulated earnings and profits of PGE Inc., they will be
treated first as a return of capital up to the U.S. Holder’s adjusted basis in
the shares of common stock and thereafter as gain from the sale or exchange of
the shares of common stock. Preferential tax rates for long-term capital gains
are applicable to a U.S. Holder, which is an individual, estate or
trust.  There are currently no preferential tax rates for long-term
capital gains for a U.S. Holder, which is a corporation.





In the
case of foreign currency received as a dividend that is not converted by the
recipient into U.S. dollars on the date of receipt, a U.S. Holder will have a
tax basis in the foreign currency equal to its U.S. dollar value on the date of
receipt.  Generally any gain or loss recognized upon a subsequent sale
or other disposition of the foreign currency, including the exchange for U.S.
dollars, will be ordinary income or loss.  However, an individual
whose realized gain does not exceed $200 will not recognize that gain, to the
extent that there are no expenses associated with the transaction that meet the
requirement for deductibility as a trade or business expense (other than travel
expenses in connection with a business trip) or as an expense for the production
of income.





Page
- 35


Dividends
paid on the shares of common stock of PGE Inc. generally will not be eligible
for the dividends received deduction provided to corporations receiving
dividends from certain United States corporations.  A U.S. Holder
which is a corporation may, under certain circumstances, be entitled to a 70%
(or 80%) deduction of the United States source portion of dividends received
from PGE Inc. (unless PGE Inc. qualifies as a “foreign personal holding company”
or a “passive foreign investment company,” as defined below) if such U.S. Holder
owns shares representing at least 10% (or 20%) of the voting power and value of
PGE Inc.  The availability of this deduction is subject to several
complex limitations that are beyond the scope of this discussion.





Information
Reporting and Backup Withholding





Under
current Treasury Regulations, dividends paid on PGE Inc.’s shares of common
stock, if any, generally will not be subject to information reporting and
generally will not be subject to U.S. backup withholding tax. However, dividends
and the proceeds from a sale of PGE Inc.’s shares of common stock paid in the
U.S. through a U.S. or U.S. related paying agent (including a broker) will be
subject to U.S. information reporting requirements and may also be subject to
the 30% U.S. backup withholding tax, unless the paying agent is furnished with a
duly completed and signed Form W-9. Any amounts withheld under the U.S. backup
withholding tax rules will be allowed as a refund or a credit against the U.S.
Holder’s U.S. federal income tax liability, provided the required information is
furnished to the IRS.





Foreign
Tax Credit





A U.S.
Holder who pays (or has withheld from distributions) Canadian income tax with
respect to the ownership of shares of common stock of PGE Inc. may be entitled,
at the option of the U.S. Holder, to either receive a deduction or a tax credit
for such foreign tax paid or withheld.  Generally, it will be more
advantageous to claim a credit because a credit reduces United States federal
income taxes on a dollar-for-dollar basis, while a deduction merely reduces the
taxpayer’s income subject to tax.  This election is made on a
year-by-year basis and applies to all foreign taxes paid by (or withheld from)
the U.S. Holder during that year.  There are significant and complex
limitations which apply to the credit, among which is the general limitation
that the credit cannot exceed the proportionate share of the U.S. Holder’s
United States income tax liability that the U.S. Holder’s foreign source income
bears to his or its worldwide taxable income.  In the determination of
the application of this limitation, the various items of income and deduction
must be classified into foreign and domestic sources.  Complex rules
govern this classification process. In addition, this limitation is calculated
separately with respect to specific classes of income such as “passive income”,
“high withholding tax interest”, “financial services income”, “shipping income,”
and certain other classifications of income.  Dividends distributed by
PGE Inc. will generally constitute “passive income” or, in the case of certain
U.S. Holders, “financial services income” for these purposes.  The
availability of the foreign tax credit and the application of the limitations on
the credit are fact specific, and U.S. Holders of shares of common stock of PGE
Inc. should consult their own tax advisors regarding their individual
circumstances.





Disposition
of Shares of Common Stock of PGE Inc.





A U.S.
Holder will recognize gain or loss upon the sale of shares of common stock of
PGE Inc. equal to the difference, if any, between (i) the amount of cash plus
the fair market value of any property received, and (ii) the shareholder’s tax
basis in the shares of common stock of PGE Inc.  Preferential tax
rates apply to long-term capital gains of U.S. Holders which are individuals,
estates or trusts. This gain or loss will be capital gain or loss if the shares
of common stock are a capital asset in the hands of the U.S. Holder, which will
be long-term capital gain or loss if the shares of common stock of PGE Inc. are
held for more than one year.  Deductions for net capital losses are
subject to significant limitations.  For U.S. Holders who are not
corporations, any unused portion of such net capital loss may be carried over to
be used in later tax years until such net capital loss is thereby
exhausted.  For U.S. Holders which are corporations (other than
corporations subject to Subchapter S of the Code), an unused net capital loss
may be carried back three years from the loss year and carried forward five
years from the loss year to be offset against capital gains.





Page
- 36


Currency
Exchange Gains or Losses





U.S.
Holders generally are required to calculate their taxable incomes in United
States dollars.  Accordingly, a U.S. Holder who purchases shares of
common stock of PGE Inc. with Canadian dollars will be required to determine the
tax basis of such shares in United States dollars based on the exchange rate
prevailing on the settlement date of the purchase (and may be required to
recognize the unrealized gain or loss, if any, in the Canadian currency
surrendered in the purchase transaction). Similarly, a U.S. Holder receiving
dividends or sales proceeds from shares of common stock of PGE Inc. in Canadian
dollars will be required to compute the dividend income or the amount realized
on the sale, as the case may be, in United States dollars based on the exchange
rate prevailing at the time of receipt in the case of dividends and on the
settlement date in the case of sales on an established securities
exchange.  Gain or loss, if any, recognized on a disposition of
Canadian currency in connection with the described transaction generally will be
treated as ordinary gain or loss.





Other
Considerations





In the
following circumstances, the above sections of this discussion may not describe
the United States federal income tax consequences resulting from the holding and
disposition of shares of common stock:





●  Foreign Personal Holding
Company





If at any
time during a taxable year more than 50% of the total combined voting power or
the total value of PGE Inc.’s outstanding shares is owned, directly or
indirectly, by five or fewer individuals who are citizens or residents of the
United States and 60% or more of PGE Inc.’s gross income for such year was
derived from certain passive sources (e.g., from dividends received from its
subsidiaries), PGE Inc. may be treated as a “foreign personal holding
company”.  In that event, U.S. Holders that hold shares of common
stock would be required to include in gross income for such year their allocable
portions of such passive income to the extent PGE Inc. does not actually
distribute such income. PGE Inc. does not believe that it currently qualifies as
a foreign personal holding company.  However, there can be no
assurance that PGE Inc. will not be considered a foreign personal holding
company for the current or any future taxable year.





●  Foreign Investment
Company





If 50% or
more of the combined voting power or total value of PGE Inc.’s outstanding
shares are held, directly or indirectly, by citizens or residents of the United
States, United States domestic partnerships or corporations, or estates or
trusts other than foreign estates or trusts (as defined by the Code Section
7701(a)(31)), and PGE Inc. is found to be engaged primarily in the business of
investing, reinvesting or trading in securities, commodities, or any interest
therein, it is possible that PGE Inc. may be treated as a “foreign investment
company” as defined in Section 1246 of the Code, causing all or part of any gain
realized by a U.S. Holder selling or exchanging shares of common stock to be
treated as ordinary income rather than capital gain.  PGE Inc. does
not believe that it currently qualifies as a foreign investment
company.  However, there can be no assurance that PGE Inc. will not be
considered a foreign investment company for the current or any future taxable
year.





●  Passive Foreign Investment
Company





The Code
contains rules governing “passive foreign investment companies” (“PFIC”) which can have
significant tax effects on U.S. Holders of foreign
corporations.  These rules do not apply to non-U.S. Holders. Section
1297 of the Code defines a PFIC as a corporation that is not formed in the
United States and, for any taxable year, either (i) 75% or more of its gross
income is “passive income”, which includes interest, dividends and certain rents
and royalties or (ii) the average percentage, by fair market value (or, if PGE
Inc. is not publicly traded and either is a controlled foreign corporation or
makes an election, by adjusted tax basis), of its assets that produce or are
held for the production of “passive income” is 50% or more. PGE Inc. believes
that it qualified as a PFIC for the fiscal year ended April 30, 1997 and the
fiscal years ended from April 30, 1998 through April 30, 2002 and April 30,
2006.  There can be no assurance that PGE Inc.’s determination
concerning its PFIC status will not be challenged by the IRS, or that it will be
able to satisfy record keeping requirements which will be imposed on a qualified
electing fund (“QEF”).  Each U.S. Holder of PGE Inc. is urged to
consult a tax advisor with respect to how the PFIC rules affect their tax
situation.





A U.S.
Holder who holds stock in a foreign corporation during any year in which such
corporation qualifies as a PFIC is subject to United States federal income
taxation under one of two alternative tax regimes at the election of each such
U.S. Holder.  The following is a discussion of such two alternative
tax regimes applied to such U.S. Holders of PGE Inc.  In addition,
special rules apply if a foreign corporation qualifies as both a PFIC and a
“controlled foreign corporation” (as defined below) and a U.S. Holder owns,
actually or constructively, 10% or more of the total combined voting power of
classes of stock entitled to vote of such foreign corporation (See more detailed
discussion at “Controlled Foreign Corporation” below).





Page
- 37


A U.S.
Holder who elects in a timely manner to treat PGE Inc. as a QEF (an “Electing U.S. Holder”) will be
subject, under Section 1293 of the Code, to current federal income tax for any
taxable year in which PGE Inc. qualifies as a PFIC on his pro rata share of PGE
Inc.’s (i) “net capital gain” (the excess of net long-term capital gain over net
short-term capital loss), which will be taxed as long-term capital gain to the
Electing U.S. Holder and (ii) “ordinary earnings” (the excess of earnings and
profits over net capital gain), which will be taxed as ordinary income to the
Electing U.S. Holder, in each case, for the shareholder’s taxable year in which
(or with which) PGE Inc.’s taxable year ends, regardless of whether such amounts
are actually distributed.





The
effective QEF election also allows the Electing U.S. Holder to (i) generally
treat any gain realized on the disposition of his Company shares of common stock
(or deemed to be realized on the pledge of his shares) as capital gain; (ii)
treat his share of PGE Inc.’s net capital gain, if any, as long-term capital
gain instead of ordinary income; and (iii) either avoid interest charges
resulting from PFIC status altogether, or make an annual election, subject to
certain limitations, to defer payment of current taxes on his share of PGE
Inc.’s annual realized net capital gain and ordinary earnings subject, however,
to an interest charge.  If the Electing U.S. Holder is not a
corporation, such an interest charge would be treated as “personal interest”
that is not deductible.





The
procedure a U.S. Holder must comply with in making an effective QEF election
will depend on whether the year of the election is the first year in the U.S.
Holder’s holding period in which PGE Inc. is a PFIC.  If the U.S.
Holder makes a QEF election in such first year, i.e., a timely QEF election,
then the U.S. Holder may make the QEF election by simply filing the appropriate
documents at the time the U.S. Holder files his tax return for such first
year.  If, however, PGE Inc. qualified as a PFIC in a prior year, then
in addition to filing documents, the U.S. Holder must elect to recognize under
the rules of Section 1291 of the Code (discussed herein), any gain that he would
otherwise recognize if the U.S. Holder sold his stock on the qualification date
or if PGE Inc. is a controlled foreign corporation, the U.S. Holder’s pro rata
share of PGE Inc.’s post-1986 earnings and profits as of the qualification
date.  The qualification date is the first day of PGE Inc.’s first tax
year in which PGE Inc. qualified as a QEF with respect to such U.S.
Holder.  The elections to recognize such gain or earnings and profits
can only be made if such U.S. Holder’s holding period for the shares of common
stock of PGE Inc. includes the qualification date.  By electing to
recognize such gain or earnings and profits, the U.S. Holder will be deemed to
have made a timely QEF election. A U.S. Holder who made elections to recognize
gain or earnings and profits after May 1, 1992 and before January 27, 1997 may,
under certain circumstances, elect to change such U.S. Holder’s qualification
date to the first day of the first QEF year.  U.S. Holders are urged
to consult a tax advisor regarding the availability of and procedure for
electing to recognize gain or earnings and profits under the foregoing rules. In
addition, special rules apply if a foreign corporation qualifies as both a PFIC
and a “controlled foreign corporation (as defined below) and a U.S. Holder owns,
actually or constructively, 10% or more of the total combined voting power of
classes of stock entitled to vote of such foreign corporation. (See more
detailed discussion at “Controlled Foreign Corporation” below).





If PGE
Inc. is a PFIC for any taxable year during which a Non-Electing U.S. Holder
holds PGE Inc. shares of common stock, then PGE Inc. will continue to be treated
as a PFIC with respect to such Company shares of common stock, even if it is no
longer defined as a PFIC.  A Non-Electing U.S. Holder may terminate
this deemed PFIC status by electing to recognize gain (which will be taxed under
the rules discussed above for Non-Electing U.S. Holders) as if such PGE Inc.
shares of common stock had been sold on the last day of the last taxable year
for which it was a PFIC.





Effective
for tax years of U.S. Holders beginning after December 31, 1997, U.S. Holders
who hold (actually or constructively) marketable stock of a foreign corporation
that qualifies as a PFIC, may annually elect to mark such stock to the market (a
“mark-to-market election”).  If such an election is made, such U.S.
Holder will not be subject to the special taxation rules of Section 1291
discussed above.  However, if the mark-to-market election is made by a
Non-Electing U.S. Holder after the beginning of the holding period for the PFIC
stock, then the Section 1291 rules will apply to certain dispositions of,
distributions on and other amounts taxable with respect to PGE Inc.’s shares of
common stock.  A U.S. Holder who makes the mark-to-market election
will include in income for the taxable year for which the election was made an
amount equal to the excess, if any, of the fair market value of the shares of
common stock of PGE Inc. as of the close of such tax year over such U.S.
Holder’s adjusted basis in such shares of common stock.  In addition,
the U.S. Holder is allowed a deduction for the lesser of (i) the excess, if any,
of such U.S. Holder’s adjusted tax basis in shares of common stock over the fair
market value of such shares as of the close of the tax year, or (ii) the excess,
if any, of (A) the mark-to-market gains for the shares of common stock in PGE
Inc. included by such U.S. Holder for prior tax years, including any amount
which would have been included for any prior tax year but for the Section 1291
interest on tax deferral rules discussed above with respect to Non-Electing U.S.
Holders, over (B) the mark-to-market losses for shares that were allowed as
deductions for prior tax years.  A U.S. Holder’s adjusted tax basis in
the shares of common stock of PGE Inc. will be adjusted to reflect the amount
included in or deducted from income as a result of a mark-to-market election. A
mark-to-market election applies to the taxable year in which the election is
made and to each subsequent taxable year, unless PGE Inc.’s shares of common
stock cease to be marketable, as specifically defined, or the Secretary of the
IRS consents to revocation of the election. Because the IRS has not established
procedures for making a mark-to-market election, U.S. Holders should consult
their tax advisor regarding the manner of making such an election.





Page
- 38


Under
Section 1291(f) of the Code, the IRS has issued Proposed Treasury Regulations
that, subject to certain exceptions, would treat as taxable certain transfers of
PFIC stock by Non-Electing U.S. Holders that are generally not otherwise taxed,
such as gifts, exchanges pursuant to corporate reorganizations, and transfers at
death.  Generally, in such cases the basis of PGE Inc. shares of
common stock in the hands of the transferee and the basis of any property
received in exchange for those shares of common stock would be increased by the
amount of gain recognized. Under the Proposed Treasury Regulations, an Electing
U.S. Holder would not be taxed on certain transfers of PFIC stock, such as
gifts, exchanges pursuant to corporate reorganizations, and transfers at
death.  The transferee’s basis in this case will depend on the manner
of transfer. In a transfer at death, for example, the transferee’s basis is
equal to (i) the fair market value of the Electing U.S. Holder’s shares of
common stock reduced by the U.S. Holder’s adjusted basis in these shares of
common stock at death.  The specific tax effect to the U.S. Holder and
the transferee may vary based on the manner in which the shares of common stock
are transferred. Each U.S. Holder of PGE Inc. is urged to consult a tax advisor
with respect to how the PFIC rules affect their tax situation.





Certain
special, generally adverse, rules will apply with respect to PGE Inc. shares of
common stock while PGE Inc. is a PFIC whether or not it is treated as a
QEF.  For example, under Section 1298(b)(6) of the Code, a U.S. Holder
who uses PFIC stock as security for a loan (including a margin loan) will,
except as may be provided in regulations, be treated as having made a taxable
disposition of such shares.





If PGE
Inc. is classified as a PFIC, U.S. Holders who do not make timely QEF Elections
(as discussed above) will be subject to a number of special tax rules. For
example, gains recognized on disposition of PGE Inc. stock or the receipt of an
“excess distribution” from PGE Inc. is (i) treated as if it were ordinary income
earned ratably on each day of the period the U.S. Holder owns shares of PGE Inc.
at the highest marginal rate in effect during the period in which it was deemed
included and (ii) subject to an interest charge as if the resulting tax had
actually been due in such earlier year or years (An excess distribution is the
amount of any distribution received by the U.S. Holder during the taxable year
that exceeds 125% of the immediately preceding three year average of
distributions received from PGE Inc., subject to certain
adjustments.)  Proposed regulations broadly define a disposition to
include any transaction or event that constitutes an actual or deemed transfer
of property for any purpose under the Code, including (but not limited to) a
sale, exchange, gift, transfer at death, and the pledging of PFIC stock to
secure a loan.  If the tax described above is not imposed on transfer
at death, the recipient of the PFIC stock receives a basis in the transferred
stock equal to the lessor of the fair market value or the adjusted basis of the
stock in the hands of the U.S. Holder immediately before death. Finally, the
foregoing rules will continue to apply with respect to a U.S. Holder who held
the stock of PGE Inc. while PGE Inc. met the definition of a PFIC even if PGE
Inc. ceases to meet the definition of a PFIC.





●  Controlled Foreign
Corporation





If more
than 50% of the total combined voting power of all classes of shares entitled to
vote or the total value of the shares of PGE Inc. is owned, actually or
constructively, by citizens or residents of the United States, United States
domestic partnerships and corporations or estates or trusts other than foreign
estates or trusts (as defined by the Code Section 7701 (a)(31), each of which
own, actually or constructively, 10% or more of the total combined voting power
of all classes of shares of PGE Inc. (“United States Shareholder”), PGE Inc.
could be treated as a controlled foreign corporation (“CFC”) under Subpart F of
the Code.  This classification would affect many complex results, one
of which is the inclusion of certain income of a CFC which is subject to current
U.S. tax.  The United States generally taxes United States
Shareholders of a CFC currently on their pro rata shares of the Subpart F income
of the CFC. Such United States Shareholders are generally treated as having
received a current distribution out of the CFC’s Subpart F income and are also
subject to current U.S. tax on their pro rata shares of the CFC’s earnings
invested in U.S. property. The foreign tax credit described above may reduce the
U.S. tax on these amounts. In addition, under Section 1248 of the Code, gain
from the sale or exchange of shares by a U.S. Holder of shares of common stock
of PGE Inc. which is or was a United States Shareholder at any time during the
five-year period ending with the sale or exchange is treated as ordinary income
to the extent of earnings and profits of PGE Inc. attributable to shares sold or
exchanged. If a foreign corporation is both a PFIC and a CFC, the foreign
corporation generally will not be treated as a PFIC with respect to United
States shareholders of the CFC.  This rule generally will be effective
for taxable years of United States Shareholders beginning after 1997 and for
taxable years of foreign corporations ending with or within such taxable years
of United States Shareholders.  Special rules apply to United States
Shareholders who are subject to the special taxation rules under Section 1291
discussed above with respect to a PFIC.  Because of the complexity of
Subpart F, a more detailed review of these rules is outside the scope of this
discussion. PGE Inc. does not believe that it currently qualifies as a
CFC.  However, there can be no assurance that PGE Inc. will not be
considered a CFC for the current or any future taxable year.





Page
- 39


F.           Dividends
and paying agents.





The
information to be disclosed in this Item is not required for an annual
report.





G.           Statements
by experts.





The
information to be disclosed in this Item is not required for an annual
report.





H.           Documents
on display.





PGE Inc.
is not required send it shareholders an annual report.  PGE Inc. is
required to file reports with the SEC under section 15(d) of the Securities
Act.  The only report PGE Inc. is currently required to file is a Form
20-F, which is filed electronically.  You may read copies of any
materials PGE Inc. files with the SEC at the SEC’s Public Reference Room at 100
F Street, N.E., Washington, D.C. 20549.  You may obtain information on
the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330.  The SEC also maintains an Internet site that will
contain copies of the reports PGE Inc. files electronically.  The
address for the Internet site is www.sec.gov.  Also,
you can obtain a copy of any document referred to in this annual report or in
any filings of PGE Inc. from PGE Inc.’s registered office located at 1100
Melville Street, Suite #610, Vancouver, British Columbia, V6E 4A6, Canada
(Telephone:  604-648-0527).





I.           Subsidiary
information.





PGE Inc.
had no subsidiaries as of April 30, 2007 and has no subsidiaries as of the date
of this annual report.





Item
11. Quantitative and Qualitative Disclosure About Market Risk.





PGE Inc.
is subject to market risk exposures due to fluctuations in exchange rates and
interest rates.  Changes in the foreign exchange rate between the CDN$
and the US$ may affect PGE Inc. due to the effect of such changes on any
shareholder distributions to the shareholders using US$ as a main
currency.  PGE Inc. denominates its financial statements in United
States dollars but conducts its daily affairs in Canadian
dollars.  PGE Inc. currently does not engage in hedging or other
activities to control the risk of its foreign currency exposure.





PGE Inc.
is not currently carrying significant amounts of short term or long-term
debt.  Upward fluctuations in interest rates increase the cost of
additional debt and the interest cost of outstanding floating rate
borrowings.





Management
does not consider that inflation in Canada has had a material impact on PGE
Inc.’s results of operations.  Inflation in Canada based on a CPI of
100 in August 2002 was 1.98% (2003), 1.91% (2004), 2.13% (2005), 2.14% (2006),
and 2.05 (2007-August). [Data Source: StatisticsCanada,
CONSUMER PRICE INDEXES FOR CANADA, MONTHLY, 1914-2006]





Item
12. Description of Securities Other than Equity Securities.





The
information to be disclosed in this Item is not required for an annual
report.





A.           Debt
Securities.





The
information to be disclosed in this Item is not required for an annual
report.





B.           Warrants
and Rights.





The
information to be disclosed in this Item is not required for an annual
report.





C.           Other
Securities.





The
information to be disclosed in this Item is not required for an annual
report.





Page
- 40


D.           American
Depository Shares.





The
information to be disclosed in this Item is not required for an annual
report.








PART
II





Item
13. Defaults, Dividends Arrearages and Delinquencies.





PGE Inc.
is not in default of any payment of indebtedness, with the exception of the
following matter discussed below, and not in arrears with any payment of
dividends.  Also, there have been no material
delinquencies.





Item
14. Material Modifications to the Rights of Security Holders and Use of
Proceeds.





Neither
PGE Inc. nor anyone else has materially modified or qualified the rights, or the
instruments defining such rights, of holders of any class of registered
securities.





E.           Use
of proceeds.





PGE Inc.
has not filed any offering documents and has not received any proceeds from any
offering.  Therefore, the information to be disclosed in this Item is
not required for an annual report.





Item
15. Controls and Procedures.





Disclosure Controls and
Procedures





Ron
Loudoun, PGE Inc.’s Chief Executive Officer, and Janet Gilleshammer, PGE Inc’s
Chief Financial Officer, have evaluated the effectiveness of PGE Inc.’s
disclosure controls and procedures (as such term is defined in Rules 13a-15 and
15d-15 under the Securities Exchange Act of 1934 (the “Exchange Act”)) as of the end
of the period covered by this annual report (the “Evaluation
Date”).  Based on such evaluation, Mr. Loudoun and Ms.
Gilleshammer have concluded that, as of the Evaluation Date, PGE Inc.’s
disclosure controls and procedures are not effective in alerting PGE Inc. on a
timely basis to material information required to be included in its reports
filed or submitted under the Exchange Act.





Management’s annual report
on internal control over financial reporting





Management
is responsible for establishing and maintaining adequate internal control over
financial reporting.  Disclosure controls and procedures are controls
and other procedures that are designed to ensure that information required to be
disclosed in PGE Inc.’s reports filed or submitted under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the Securities and Exchange Commission’s rules and forms.  Disclosure
controls and procedures include, without limitation, controls and procedures
designed to ensure that the required information is accumulated and communicated
to management, including PGE Inc.’s Chief Executive Officer and Chief Financial
Officer, to allow timely decisions regarding required disclosure.





The term
“internal control over financial reporting” is defined as a process designed by,
or under the supervision of, the registrant’s principal executive and principal
financial officers, or persons performing similar functions, and effected by the
registrant’s board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles and includes those policies and
procedures that:





●  Pertain
      to the maintenance of records that in reasonable detail accurately and
      fairly reflect the transactions and dispositions of the assets of the
      registrant;





●  Provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with generally accepted
      accounting principles, and that receipts and expenditures of the
      registrant are being made only in accordance with authorizations of
      management and directors of the registrant;
and





●  Provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use of disposition of the registrant’s assets
      that could have a material effect on the financial
    statements.





Page
- 41


There are
inherent limitations to the effectiveness of any system of disclosure controls
and procedures, including the possibility of human error and the circumvention
or overriding of the controls and procedures.  Accordingly, even
effective disclosure controls and procedures can only provide reasonable
assurance of achieving their control objectives with respect to financial
statement preparation and presentation.





PGE
Inc.’s internal control system was designed to provide reasonable assurance to
PGE Inc.’s management and board of directors regarding the preparation and fair
presentation of published financial statements.  However, testing of
PGE Inc.’s internal control systems was not conducted because PGE Inc.’s has no
revenue and is a start up development company.





As of
April 30, 2007, management assessed the effectiveness of PGE Inc.’s internal
control over financial reporting based on the criteria for effective internal
control over financial reporting established in Internal Control—Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (“COSO”) and
SEC guidance on conducting such assessments.  Based on that
evaluation, they concluded that, during the period covered by this report, such
internal controls and procedures were not effective to detect the inappropriate
application of US GAAP rules as more fully described below.  This was
due to deficiencies that existed in the design or operation of PGE Inc.’s
internal control over financial reporting that adversely affected its internal
controls and that may be considered to be material weaknesses.





An
internal control material weakness is a significant deficiency, or aggregation
of deficiencies, that does not reduce to a relatively low level the risk that
material misstatements in financial statements will be prevented or detected on
a timely basis by employees in the normal course of their work.  An
internal control significant deficiency, or aggregation of deficiencies, is one
that could result in a misstatement of the financial statements that is more
than inconsequential.





The
matters involving internal controls and procedures that management considered to
be material weaknesses under the standards of the Public Company Accounting
Oversight Board were: (1) lack of a functioning audit committee and lack of a
majority of outside directors on PGE Inc.’s board of directors, resulting in
ineffective oversight in the establishment and monitoring of required internal
controls and procedures; (2) inadequate segregation of duties consistent with
control objectives; (3) insufficient written policies and procedures for
accounting and financial reporting with respect to the requirements and
application of US GAAP and SEC disclosure requirements; and (4) ineffective
controls over period end financial disclosure and reporting
processes.  The aforementioned material weaknesses were identified by
PGE Inc.’s Chief Financial Officer in connection with the audit of its financial
statements as of April 30, 2007 and communicated the matters to
management.





Management
believes that the material weaknesses set forth in items (2), (3) and (4) above
did not have an affect on PGE Inc.’s financial results.  However,
management believes that the lack of a functioning audit committee and lack of a
majority of outside directors on PGE Inc.’s board of directors, resulting in
ineffective oversight in the establishment and monitoring of required internal
controls and procedures can result in PGE Inc.’s determination to its financial
statements for the future years.





PGE Inc.
is committed to improving its financial organization.  As part of this
commitment, PGE Inc. will create a position to segregate duties, when funds are
available to PGE Inc., consistent with control objectives and will increase its
personnel resources and technical accounting expertise within the accounting
function:  i) Appointing one or more outside directors to its board of
directors who will also be appointed to the audit committee of PGE Inc.
resulting in a fully functioning audit committee who will undertake the
oversight in the establishment and monitoring of required internal controls and
procedures; and ii) Preparing and implementing sufficient written policies and
checklists that will set forth procedures for accounting and financial reporting
with respect to the requirements and application of US GAAP and SEC disclosure
requirements.





Management
believes that the appointment of one or more outside directors, who will also be
appointed to a fully functioning audit committee, will remedy the lack of a
functioning audit committee and a lack of a majority of outside directors on PGE
Inc.’s Board.  In addition, management believes that preparing and
implementing sufficient written policies and checklists will remedy the
following material weaknesses:  (i) insufficient written policies and
procedures for accounting and financial reporting with respect to the
requirements and application of US GAAP and SEC disclosure requirements; and
(ii) ineffective controls over period end financial close and reporting
processes.  Further, management believes that the hiring of additional
personnel who have the technical expertise and knowledge will result proper
segregation of duties and provide more checks and balances within the
department.  Additional personnel will also provide the cross training
needed to support PGE Inc. if personnel turn over issues within the department
occur.  This coupled with the appointment of additional outside
directors will greatly decrease any control and procedure issues PGE Inc. may
encounter in the future.





Page
- 42


Management
will continue to monitor and evaluate the effectiveness of PGE Inc.’s internal
controls and procedures and its internal controls over financial reporting on an
ongoing basis and are committed to taking further action and implementing
additional enhancements or improvements, as necessary and as funds
allow.





Attestation report of the
registered public accounting firm





This
annual report does not include an attestation report of PGE Inc.’s independent
registered public accounting firm regarding internal control over financial
reporting.  Management’s report was not subject to attestation by PGE
Inc.’s independent registered public accounting firm pursuant to temporary rules
of the SEC that permit PGE Inc. to provide only management’s report in this
annual report.





Changes in Internal
Controls





During
the fiscal year covered by this report, there were no changes in PGE Inc’s
internal controls or, to PGE Inc’s knowledge, in other factors that have
materially affected, or are reasonably likely to materially affect, these
controls and procedures subsequent to the date PGE Inc. carried out this
evaluation.





Item
16A. Audit committee financial expert.





PGE Inc.
has no financial expert. Management believes the cost related to retaining a
financial expert at this time is prohibitive. Further, because of PGE Inc.’s
limited operations, management believes the services of a financial expert are
not warranted.





Item
16B. Code of Ethics.





PGE Inc.
has adopted a code of ethics that applies to all its executive officers and
employees, including its CEO and CFO.  See Exhibit 11 – Code of Ethics
for more information.  PGE Inc. undertakes to provide any person with
a copy of its code of ethics free of charge.  Please contact Rene
Daignault at (604) 648-0527 to request a copy of PGE Inc’s code of
ethics.  A copy of the Code of Ethics can also be found on PGE Inc.’s
web site at www.pacificgoldentertainment.com.  Management
believes PGE Inc’s code of ethics is reasonably designed to deter wrongdoing and
promote honest and ethical conduct; provide full, fair, accurate, timely and
understandable disclosure in public reports; comply with applicable laws; ensure
prompt internal reporting of code violations; and provide accountability for
adherence to the code.





Item
16C. Principal Accountant Fees and Services.





(1)
  Audit Fees and Related Fees





The
aggregate fees billed for each of the last two fiscal years for professional
services rendered by the principal accountant for PGE Inc.’s audit of annual
financial statements or services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for those fiscal
years was:





2006 -
CDN$8,904 - Pannel Kerr Forster (registered with the PCAOB as “Smythe
Ratcliffe”)


2005 -
CDN$6,587 - Pannel Kerr Forster (registered with the PCAOB as “Smythe
Ratcliffe”)





(2)  Audit-Related
Fees





The
aggregate fees billed in each of the last two fiscal years for assurance and
related services by the principal accountants that are reasonably related to the
performance of the audit or review of PGE Inc.’s financial statements and are
not reported in the preceding paragraph:





2006 -
$nil - Pannel Kerr Forster (registered with the PCAOB as “Smythe
Ratcliffe”)


2005 -
$nil - Pannel Kerr Forster (registered with the PCAOB as “Smythe
Ratcliffe”)





(3)
  Tax Fees





The
aggregate fees billed in each of the last two fiscal years for professional
services rendered by the principal accountant for tax compliance, tax advice,
and tax planning was:





2006 -
$nil - Pannel Kerr Forster (registered with the PCAOB as “Smythe
Ratcliffe”)


2005 -
$nil - Pannel Kerr Forster (registered with the PCAOB as “Smythe
Ratcliffe”)





Page
- 43


(4)
  All Other Fees





The
aggregate fees billed in each of the last two fiscal years for the products and
services provided by the principal accountant, other than the services reported
in paragraphs (1) and (2) was:





2006 -
$nil - Pannel Kerr Forster (registered with the PCAOB as “Smythe
Ratcliffe”)


2005 -
$nil - Pannel Kerr Forster (registered with the PCAOB as “Smythe
Ratcliffe”)





(5)           PGE
Inc.’s audit committee’s pre-approval policies and procedures described in
paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the board of
directors, acting as the audit committee, pre-approve all accounting related
activities prior to the performance of any services by any accountant or
auditor.





(6)           The
percentage of hours expended on the principal accountant’s engagement to audit
PGE Inc.’s financial statements for the most recent fiscal year that were
attributed to work performed by persons other than the principal accountant’s
full time, permanent employees was nil.





Item
16D. Exemptions from the Listing Standards for Audit Committees.





PGE
Inc.’s shares of common stock are not listed or quoted on any exchange or
quotation system, and as a result, there are no listing standard requirements
for an audit committee of PGE Inc.





Item
16E. Purchase of Equity Securities by Pacific Gold Entertainment Inc. and
Affiliated Purchasers.





No
purchases of equity securities were made by or on behalf of PGE Inc. or any
affiliated purchaser.





PART
III





Item
17. Financial Statements.





PGE Inc.
has elected to provide financial statements pursuant to Item 18.  See
“Item 18. Financial Statements” below for the required disclosure under this
Item.





Page
- 44


Item
18. Financial Statements.





PACIFIC
GOLD
 ENTERTAINMENT
INC.
 (formerly CyPacific Trading
Inc.)
 
 Financial Statements
 April 30, 2007 and 2006
 (Expressed in US dollars)
 
 
 
 
  Index
              PageReport of Independent
      Registered Public Accounting Firm
              F -
  1Financial
      Statements
              F -
  2Balance
      Sheets
              F -
  3Statements of
      Operations and Comprehensive Loss
              F -
  4Statements of
      Stockholders’ Equity (Deficit)
              F -
  5Statements of
      Cash Flows
              F -
  6Notes to
      Financial Statements
              F -
  7
  
 
 Page
- 45
 
  Pannell
Kerr Forster
 
 
 
 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 TO
THE BOARD OF DIRECTORS OF PACIFIC GOLD ENTERTAINMENT INC.
 (FORMERLY
CYPACIFIC TRADING INC.)
 
 We have
audited the balance sheets of Pacific Gold Entertainment Inc. (formerly
CyPacific Trading Inc.) (A Development Stage Company) as at April 30, 2007 and
2006 and the statements of operations and comprehensive loss, stockholders’
equity (deficit) and cash flows for the years ended April 30, 2007, 2006 and
2005, and the cumulative totals for the development stage from inception (March
21, 2003) to April 30, 2007.  These financial statements are the
responsibility of the Company’s management.  Our responsibility is to
express an opinion on these financial statements based on our
audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform an audit to obtain reasonable assurance whether the
financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.
 
 In our
opinion, these financial statements present fairly in all material respects, the
financial position of the Company as at April 30, 2007 and 2006 and the results
of its operations and its cash flows for the years ended April 30, 2007, 2006
and 2005, and the cumulative totals for the development stage from inception
(March 21, 2003) to April 30, 2007 in conformity with accounting principles
generally accepted in the United States of America.
 
 These
financial statements have been prepared assuming the Company will continue as a
going-concern.  As discussed in note 1 to the financial
statements, the Company has had minimal operations, has no established sources
of revenue and needs additional financing in order to complete its business
plan.  This raises substantial doubt about its ability to continue as
a going-concern.  These financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
 
 
 /s/
Pannell Kerr Forster
 
 
 Chartered
Accountants
 (registered
with the PCAOB as “Smythe Ratcliffe”)
 
 Vancouver,
Canada
 August
28, 2007 except for notes 10(c)(ii), 10(c)(iii)(b), and notes 11(a)(b)(c)(d) and
(g) which are as of December 14, 2007
    F
- 1
  PACIFIC
GOLD ENTERTAINMENT INC.
 (formerly
CyPacific Trading Inc.)
 (A
Development Stage Company)
 Balance Sheets (note
1)
 April
30
 (Expressed
in US dollars)
 
 2007
              
              
              2006AssetsCurrentCash
              $
              0
              
              
              $
              4,294Refundable
      deposits (note 4)
              
              32,620
              
              
              
              0Short-term
      loan (note 10(b))
              
              5,918
              
              
              
              0GST
      receivable
              
              10,172
              
              
              
              1,261Due
      from related party (note 7)
              
              0
              
              
              
              3,679Total
      Current Assets
              
              48,710
              
              
              
              9,234Investment in Films(note 5)
              
              387,866
              
              
              
              0Advance to Acquire Investment(note 10(b))
              
              92,021
              
              
              
              0Equipment,
      net
              
              995
              
              
              
              0Total
      Assets
              $
              529,592
              
              
              $
              9,234LiabilitiesCurrentBank
      indebtedness
              $
              9,253
              
              
              
              0Accounts
      payable and accrued liabilities
              
              119,257
              
              
              $
              15,988Due
      to related parties (note 7)
              
              549,013
              
              
              
              28,589Total
      Current Liabilities and Liabilities
              
              677,523
              
              
              
              44,577Stockholders’
      DeficitCommon Stock (note
      8)Authorized100,000,000 shares
      of common stock without par valueIssued
      and outstanding10,000,000 shares of common
      stock
              
              1,395
              
              
              
              1,395Donated
      Capital
              
              13,843
              
              
              
              0Deficit
      Accumulated During the Development Stage
              
              (156,662
              )
              
              
              (34,476
              )Accumulated
      Other Comprehensive Loss
              
              (6,507
              )
              
              
              (2,262
              )Total
      Stockholders’ Deficit
              
              (147,931
              )
              
              
              (35,343
              )Total
      Liabilities and Stockholders’ Deficit
              $
              529,592
              
              
              $
              9,234
 
 Commitments
(note 10)
 
 F
- 2
 PACIFIC
GOLD ENTERTAINMENT INC.
 (formerly
CyPacific Trading Inc.)
 (A
Development Stage Company)
 Statements of Operations and
Comprehensive Loss (note 1)
 (Expressed
in US dollars)
 
 Year
      Ended April 30,
                2007
              
              
              Year
      Ended April 30,
                2006
              
              
              Year
      Ended April 30,
                2005
              
              
              Cumulative
      From Inception (March 21, 2003) to April 30,
2007Sales
              $
              0
              
              
              $
              0
              
              
              $
              8,464
              
              
              $
              8,464Cost
      of Sales
              
              0
              
              
              
              0
              
              
              
              4,274
              
              
              
              4,274Sales
      Commissions
              
              0
              
              
              
              0
              
              
              
              846
              
              
              
              8460
              
              
              
              0
              
              
              
              5,120
              
              
              
              5,120Revenue
      from Operations
              
              0
              
              
              
              0
              
              
              
              3,344
              
              
              
              3,344General
      and Administrative ExpensesWages
              
              76,984
              
              
              
              0
              
              
              
              0
              
              
              
              76,984Rent
              
              16,169
              
              
              
              0
              
              
              
              0
              
              
              
              16,169Interest
              
              13,843
              
              
              
              0
              
              
              
              0
              
              
              
              13,843Professional
    fees
              
              11,807
              
              
              
              4,350
              
              
              
              3,500
              
              
              
              27,826Advertising
              
              2,753
              
              
              
              0
              
              
              
              0
              
              
              
              2,753Automobile
              
              2,220
              
              
              
              0
              
              
              
              0
              
              
              
              2,220Office
              
              1,777
              
              
              
              544
              
              
              
              13
              
              
              
              2,733Consulting
fees
              
              876
              
              
              
              627
              
              
              
              6,000
              
              
              
              7,503Website construction and
      maintenance(recovery)
              
              (4,351
              )
              
              
              4,218
              
              
              
              10,000
              
              
              
              9,867Amortization
              
              108
              
              
              
              0
              
              
              
              0
              
              
              
              108122,186
              
              
              
              9,739
              
              
              
              19,513
              
              
              
              160,006Net
      Loss
              
              (122,186
              )
              
              
              (9,739
              )
              
              
              (16,169
              )
              
              
              (156,662
              )Other
      Comprehensive LossForeign currency translation
      loss
              
              (4,245
              )
              
              
              (2,307
              )
              
              
              0
              
              
              
              (6,507
              )Comprehensive
      Loss
              $
              (126,431
              )
              
              $
              (12,046
              )
              
              $
              (16,169
              )
              
              $
              (163,169
              )Loss
      Per Common ShareBasic and
diluted
              $
              (0.01
              )
              
              $
              (0.00
              )
              
              $
              (0.00
              )Weighted
      Average Number of CommonShares Issued and
      Outstanding
              
              10,000,000
              
              
              
              10,000,000
              
              
              
              10,000,000
   
 F
- 3
 PACIFIC
GOLD ENTERTAINMENT INC.
 (formerly
CyPacific Trading Inc.)
 (A
Development Stage Company)
 Statements of Stockholders’ Equity
(Deficit) (note 8)
 Period
from Inception (March 21, 2003) to April 30, 2007
 (Expressed
in US dollars)
 
 Common
      Stock
              
              
              Deficit
      Accumulated During the Development
              
              
              Accumulated
      Other Comprehensive Income
              
              
              Donated
              
              
              Total
      Stockholders’Shares
              
              
              Amount
              
              
              Stage
              
              
              (Loss)
              
              
              Capital
              
              
              DeficitInception,
      March 21, 2003
              
              
              0
              
              
              $
              0
              
              
              $
              0
              
              
              $
              0
              
              
              $
              0
              
              
              $
              0Shares
      issued for cash
              
              
              10,000,000
              
              
              
              1,395
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              1,395Foreign
      currency translation loss
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              (42
              )
              
              
              0
              
              
              
              (42
              )Net
      loss for period
              
              
              0
              
              
              
              0
              
              
              
              (2,379
              )
              
              
              0
              
              
              
              0
              
              
              
              (2,379
              )Balance,
      April 30, 2003
              
              
              10,000,000
              
              
              
              1,395
              
              
              
              (2,379
              )
              
              
              (42
              )
              
              
              0
              
              
              
              (1,026
              )Foreign
      currency translation gain
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              87
              
              
              
              0
              
              
              
              87Net
      loss for year
              
              
              0
              
              
              
              0
              
              
              
              (6,189
              )
              
              
              0
              
              
              
              0
              
              
              
              (6,189
              )Balance,
      April 30, 2004
              
              
              10,000,000
              
              
              
              1,395
              
              
              
              (8,568
              )
              
              
              45
              
              
              
              0
              
              
              
              (7,128
              )Net
      loss for year
              
              
              0
              
              
              
              0
              
              
              
              (16,169
              )
              
              
              0
              
              
              
              0
              
              
              
              (16,169
              )Balance,
      April 30, 2005
              
              
              10,000,000
              
              
              
              1,395
              
              
              
              (24,737
              )
              
              
              45
              
              
              
              0
              
              
              
              (23,297
              )Foreign
      currency translation loss
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              (2,307
              )
              
              
              0
              
              
              
              (2,307
              )Net
      loss for year
              
              
              0
              
              
              
              0
              
              
              
              (9,739
              )
              
              
              0
              
              
              
              0
              
              
              
              (9,739
              )Balance,
      April 30, 2006
              
              
              10,000,000
              
              
              
              1,395
              
              
              
              (34,476
              )
              
              
              (2,262
              )
              
              
              0
              
              
              
              (35,343
              )Donated
      interest
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              13,843
              
              
              
              13,843Foreign
      currency translation loss
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              (4,245
              )
              
              
              0
              
              
              
              (4,245
              )Net
      loss for year
              
              
              0
              
              
              
              0
              
              
              
              (122,186
              )
              
              
              0
              
              
              
              0
              
              
              
              (122,186
              )Balance,
      April 30, 2007
              
              
              10,000,000
              
              
              $
              1,395
              
              
              $
              (156,662
              )
              
              $
              (6,507
              )
              
              $
              13,843
              
              
              $
              (147,931
              )
   
 F
- 4
 PACIFIC
GOLD ENTERTAINMENT INC.
 (formerly
CyPacific Trading Inc.)
 (A
Development Stage Company)
 Statements of Cash Flows (note
1)
 (Expressed
in US dollars)
 
 Year
      Ended
                April 30,
                2007
              
              
              Year
      Ended
                April 30,
                2006
              
              
              Year
      Ended
                April 30,
                2005
              
              
              Cumulative
      From Inception (March 21, 2003) to April 30,
2007Operating
      ActivitiesNet loss
              $
              (122,186
              )
              
              $
              (9,739
              )
              
              $
              (16,169
              )
              
              $
              (156,662
              )Changes in non-cash working
      capitalAccounts payable and
      accruedliabilities
              
              9,366
              
              
              
              (1,156
              )
              
              
              13,500
              
              
              
              25,354Donated
    interest
              
              13,843
              
              
              
              0
              
              
              
              0
              
              
              
              13,843GST receivable
              
              (8,911
              )
              
              
              (1,261
              )
              
              
              0
              
              
              
              (10,172
              )Amortization
              
              108
              
              
              
              0
              
              
              
              0
              
              
              
              108Cash
      Used in Operating Activities
              
              (107,780
              )
              
              
              (12,156
              )
              
              
              (2,669
              )
              
              
              (127,529
              )Investing
      ActivitiesRefundable
    deposits
              
              (32,620
              )
              
              
              0
              
              
              
              0
              
              
              
              (32,620
              )Short-term loan
              
              (5,918
              )
              
              
              0
              
              
              
              0
              
              
              
              (5,918
              )Advance to acquire
      investment
              
              (92,021
              )
              
              
              0
              
              
              
              0
              
              
              
              (92,021
              )Investment in
    films
              
              (265,049
              )
              
              
              0
              
              
              
              0
              
              
              
              (265,049
              )Purchase
    equipment
              
              (1,103
              )
              
              
              0
              
              
              
              0
              
              
              
              (1,103
              )Cash
      Used in Investing Activities
              
              (396,711
              )
              
              
              0
              
              
              
              0
              
              
              
              (396,711
              )Financing
      ActivitiesDue to related
      parties
              
              491,510
              
              
              
              19,092
              
              
              
              6,000
              
              
              
              520,099Due from related
      party
              
              3,679
              
              
              
              (335
              )
              
              
              (3,344
              )
              
              
              0Issuance of common
      stockfor
      cash
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              1,395Bank
    indebtedness
              
              9,253
              
              
              
              0
              
              
              
              0
              
              
              
              9,253Cash
      Provided by Financing Activities
              
              504,442
              
              
              
              18,757
              
              
              
              2,656
              
              
              
              530,747Effect
      of Foreign Currency Translation
              
              (4,245
              )
              
              
              (2,307
              )
              
              
              0
              
              
              
              (6,507
              )Inflow
      (Outflow) of Cash
              
              (4,294
              )
              
              
              4,294
              
              
              
              (13
              )
              
              
              0Cash,
      Beginning of Year
              
              4,294
              
              
              
              0
              
              
              
              13
              
              
              
              0Cash,
      End of Year
              $
              0
              
              
              $
              4,294
              
              
              $
              0
              
              
              $
              0Non-Cash
      Operating, Investing andFinancing
      ActivitiesAccounts payable
      forinvestment in
      films
              $
              93,903
              
              
              $
              0
              
              
              $
              0
              
              
              $
              93,903Due to related parties
      forinvestment in
      films
              $
              28,914
              
              
              $
              0
              
              
              $
              0
              
              
              $
              28,914Donated
    interest
              $
              13,843
              
              
              $
              0
              
              
              $
              0
              
              
              $
              13,843
    F
- 5
 PACIFIC
GOLD ENTERTAINMENT INC.
 (formerly
CyPacific Trading Inc.)
 (A
Development Stage Company)
 Notes
to Financial Statements
 Years
Ended April 30, 2007, 2006 and 2005
 (Expressed
in US dollars)
 
 
 1.
              INCORPORATION,
      NATURE OF OPERATIONS AND
GOING-CONCERN
 
 Pacific
Gold Entertainment Inc. (the “Company”) was incorporated under the laws of
British Columbia on March 21, 2003 and has its head office in Vancouver,
British Columbia, Canada.  The Company is in the development stage as
more fully defined in Statement No. 7 of the Financial Accounting Standards
Board (“FASB”) of the United States of America.
 
 The
Company is now an entertainment production company. The Company’s focus is on
movies and video game production and plans to merchandise related products on an
online store.
 
 The
accompanying financial statements have been prepared on the basis of accounting
principles generally accepted in the United States of America applicable to a
going-concern, which contemplates the realization of assets and discharge of
liabilities in the normal course of business.  The Company has
incurred losses of $156,662 and applied cash flows of $127,529 to operating
activities during the period from inception (March 21, 2003) to
April 30, 2007. Incidental revenues of $8,464 were generated from sales to
an affiliate in 2005.
 
 The
Company requires financing to fund its future operations and will attempt to
meet its ongoing liabilities as they fall due through the sale of equity
securities and/or debt financing.  There can be no assurance that the
Company will be able to raise the necessary financing to continue in operation
or meet its liabilities as they fall due or be successful in achieving
profitability from its planned principal operations.  Should the
Company be unable to discharge its liabilities in the normal course of business,
the Company may not be able to remain in operation.
 
 2.
              SIGNIFICANT
      ACCOUNTING POLICIES
 
 (a)
              Revenue
      recognition
 
 At this
time, the Company has not established any source of revenue; therefore, no
revenue recognition policy has been determined.
 
 (b)
              Loss
      per share
 
 Loss per
share computations are based on the weighted average number of common shares
issued and outstanding during the period.
 
 (c)
              Foreign
      currency translation
 
 The
Company’s functional currency is the Canadian dollar, and as such, converts its
financial statements into United States dollars as follows:
 
 (i)
              Assets
      and liabilities, at the rate of exchange at the balance sheet date;
      and
 
 (ii)
              Revenues
      and expenses, at the average rate of exchange for the year.
  F
- 6
 PACIFIC
GOLD ENTERTAINMENT INC.
 (formerly
CyPacific Trading Inc.)
 (A
Development Stage Company)
 Notes
to Financial Statements
 Years
Ended April 30, 2007, 2006 and 2005
 (Expressed
in US dollars)
  
 2.
              SIGNIFICANT ACCOUNTING
      POLICIES (Continued)
 
 (c)           Foreign
currency translation (Continued)
 
 Gains and
losses arising from the translation of foreign currency are excluded from net
loss for the period and are included in accumulated other comprehensive income
(loss), as a separate component of stockholders’ equity (deficit).
 
 (d)
              Website
      development and maintenance
 
 The
Company expenses all costs of website development and maintenance in the period
incurred.
 
 (e)
              Use
      of estimates
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in these financial
statements. By their very nature, estimates are subject to measurement
uncertainty and the effect on the financial statements in the future could be
material. Significant estimates made in the preparation of these financial
statements include the valuation of investment in films, the valuation allowance
relating to future tax assets, and estimate of accounts payable and accrued
liabilities. Management believes the estimates are reasonable; however, actual
results could differ from those estimates and would impact future results of
operations and cash flows.
 
 (f)
              Equipment
 
 Equipment
is reflected at cost less accumulated amortization, provided on the
straight-line basis using a 20% annual rate.
 
 (g)
              Investment
      in films
 
 Investment
in films includes the costs of completed films and films in progress, which have
been produced by the Company for which the Company has acquired distribution
rights. Capitalized costs include all direct production and financing costs, and
production overhead.
 
 Costs of
production will be amortized using the individual-film-forecast method, whereby
these costs are amortized, and participation and residual costs are accrued in
the proportion that current year’s revenue bears to management’s estimate of
ultimate revenue at the beginning of the current year expected to be recognized
from the exploitation, exhibition or sale of films.
 
 Ultimate
revenue includes estimates over a period not to exceed ten years following the
date of initial release.
  F
- 7
 PACIFIC
GOLD ENTERTAINMENT INC.
 (formerly
CyPacific Trading Inc.)
 (A
Development Stage Company)
 Notes
to Financial Statements
 Years
Ended April 30, 2007, 2006 and 2005
 (Expressed
in US dollars)
   
 2.
              SIGNIFICANT ACCOUNTING
      POLICIES (Continued)
 
 (g)           Investment
in films (Continued)
 
 Investment
in films is stated at the lower of amortized cost or estimated fair value. The
valuation of investment in films is reviewed on a title-by-title basis, when an
event or change in circumstances indicates that the fair value of a film is less
than the amortized cost. The fair value of the film is determined using
management’s future revenue and cost estimates and a discounted cash flow
approach. Additional amortization is recorded in the amount by which the
unamortized costs exceed the estimate fair value of the
film.  Estimates of future revenue involve measurement uncertainty and
it is therefore possible that reductions in the carrying value of investment in
films may be required as a consequence of changes in management’s future revenue
estimates.
 
 Films in
progress include the accumulated costs of productions to date for films that are
not yet complete.
 
 (h)
              Income
      taxes
 
 The
Company follows the Statement of Financial Accounting Standards (“SFAS”)
No. 109, “Accounting for
Income Taxes”.  SFAS No. 109 requires recognition of
deferred income tax liabilities and deferred income tax assets for the expected
future income tax consequences of events that have been included in the
financial statements or income tax returns.  Under this method,
deferred income tax assets and liabilities are determined based on the
difference between the financial statement and income tax basis of the
respective assets and liabilities using the tax rates expected to be enacted and
in effect for the year in which the differences are expected to reverse. The
amount of future income tax assets recognized is limited to the amount that is,
in management’s estimation, more likely than not to be realized.
 
 (i)
              Recent
      accounting pronouncements
 
 In
February 2007, the Financial Accounting Standards Board (“FASB”) issued
Statement No. 159, “The Fair
Value Option for Financial Assets and Financial Liabilities - Including an
Amendment of FASB Statement No. 115”. This standard permits an entity to
choose to measure many financial instruments and certain other items at fair
value. Most of the provisions in Statement 159 are elective; however, the
amendment to FASB Statement No. 115, Accounting for Certain Investments in Debt
and Equity Securities, applies to all entities with available-for-sale and
trading securities.
 
 In 2006,
FASB issued Statement No. 157, “Fair Value
Measurements”.  This new pronouncement provides guidance for
using fair value to measure assets and liabilities.  The standard
clarifies that for items that are not actively traded, such as certain kinds of
derivatives, fair value should reflect the price in a transaction with a market
participant, including an adjustment for risk, not just the company’s
mark-to-market value. The Company does not believe adoption of Statement 157
will have a material effect on its balance sheet, statements of operations and
comprehensive loss, or cash flows.
   F
- 8
 PACIFIC
GOLD ENTERTAINMENT INC.
 (formerly
CyPacific Trading Inc.)
 (A
Development Stage Company)
 Notes
to Financial Statements
 Years
Ended April 30, 2007, 2006 and 2005
 (Expressed
in US dollars)
 2.
              SIGNIFICANT ACCOUNTING
      POLICIES (Continued)
 
 (i)           Recent
accounting pronouncements (Continued)
 
 In 2006,
the FASB issued Statement No. 156, “Accounting for Servicing of
Financial Assets - An Amendment of FASB Statement No. 140”. This standard
amends the guidance in FASB Statement No. 140, “Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities”. Among
other requirements, Statement 156 requires an entity to recognize a servicing
asset or servicing liability each time it undertakes an obligation to service a
financial asset by entering into a servicing contract in certain
situations.  Statement 156 is effective as of the beginning of an
entity's first fiscal year that begins after September 15, 2006. Earlier
adoption is permitted as of the beginning of an entity's fiscal year, provided
the entity has not issued financial statements. The Company does not believe
adoption of Statement 156 will have a material effect on its balance sheet,
statements of operations and comprehensive loss, or cash flows.
 
 In 2006,
the FASB issued Statement No. 155, “Accounting for Certain Hybrid
Instruments”. This standard amends the guidance in FASB Statements No.
133, “Accounting for
Derivative Instruments and Hedging Activities”, and Statement No. 140,
“Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of
Liabilities”.  Statement 155 allows financial instruments that
have embedded derivatives to be accounted for as a whole (eliminating the need
to bifurcate the derivative from its host) if the holder elects to account for
the whole instrument on a fair value basis. Statement 155 is effective for all
financial instruments acquired or issued after the beginning of an entity’s
first fiscal year that begins after September 15, 2006. There is no impact on
the Company’s financial statements.
 
 In 2006,
the FASB issued Interpretation No. 48, (“FIN 48”), “Accounting for uncertainty in
income taxes - an interpretation of SFAS No. 109”.  This
Interpretation provides guidance for recognizing and measuring uncertain tax
positions, as defined in FASB No. 109, “Accounting for income
taxes”.  FIN 48 prescribes a threshold condition that a tax
position must meet for any of the benefits of an uncertain tax position to be
recognized in the financial statements.  Guidance is also provided
regarding derecognition, classification and disclosure of uncertain tax
positions.  FIN 48 is effective for fiscal years beginning after
December 15, 2006.  The Company does not expect that this
Interpretation will have a material impact on their financial
position.
 
 3.
              FINANCIAL
      INSTRUMENTS
 
 (a)
              Fair
      value
 
 The
carrying values of cash, bank indebtedness, short-term loan, advance to acquire
investment, and accounts payable and accrued liabilities approximate their fair
values because of the short-term maturity of these financial instruments. Fair
value of amounts due to related parties are not determinable as there is no
ready market for such amounts.
   F
- 9
  PACIFIC
GOLD ENTERTAINMENT INC.
 (formerly
CyPacific Trading Inc.)
 (A
Development Stage Company)
 Notes
to Financial Statements
 Years
Ended April 30, 2007, 2006 and 2005
 (Expressed
in US dollars)
 3.           FINANCIAL INSTRUMENTS
(Continued)
 
 (b)
              Interest
      rate risk
 
 The
Company is not exposed to significant Interest rate risk due to the short-term
maturity of its monetary current assets and current liabilities.
 
 (c)
              Currency
      risk
 
 The
Company translates the results of foreign transactions into US currency using
rates approximating the average exchange rate for the year.  The
exchange rate may vary from time to time.  The Company is exposed to
risk to the extent that funds to cover all expenses must be translated from
foreign currencies into US dollars at exchange rates prevailing at the time of
payment settlement.
 
 4.
              REFUNDABLE
      DEPOSITS
 
 The
Company was required to pay a deposit of $31,626 to the Union of BC Performers
to guarantee the payment of wages to the actors employed by the Company for the
motion picture “Blood”. The amount is completely refundable once all actors have
been paid subsequent to the completion of production.
 
 5.
              INVESTMENT
      IN FILMS
 
 The
Company currently has one film in progress (notes 7(c) and 10(a)).
 
 6.
              EQUIPMENT
 
 2007AccumulatedCost
              Amortization
              NetEquipment
              $
              1,103
              $
              108
              $
              995
 
 7.
              RELATED
      PARTY TRANSACTIONS
 
 (a)
              Amounts
      due from Daval Productions Inc. (“Daval”) are unsecured, have no stated
      terms of repayment and are non-interest bearing. Daval is owned by a
      director of the Company and is the Company’s sole customer, providing 100%
      of the Company’s revenue to date.  The amount due from Daval is
      $Nil (2006 - $3,679).
 
 (b)
              The
      Company entered into a contract to receive services from Wind Horse Media
      Inc. (“WHM”), which is owned by a director of the Company. The amount
      owing of $18,217 (2006 - $Nil) has no fixed terms of repayment and does
      not bear interest. WHM charged the Company for payroll and administrative
      expenses of $14,640 (2006 - $Nil; 2005 - $Nil) and script acquisition fees
      of $3,075 (2006 - $Nil; 2005 -
$Nil).
   F
- 10
 PACIFIC
GOLD ENTERTAINMENT INC.
 (formerly
CyPacific Trading Inc.)
 (A
Development Stage Company)
 Notes
to Financial Statements
 Years
Ended April 30, 2007, 2006 and 2005
 (Expressed
in US dollars)
 7.           RELATED PARTY TRANSACTIONS
(Continued)
 
 (c)
              The
      Company acquired the right to acquire five film projects from Somnambulist
      Imagery Inc. (“Somnambulist”), a company wholly-owned by the Company’s
      President and CEO. The film projects will be acquired pursuant to the
      terms and conditions of five separate Option and Literary Purchase
      Agreements. The Company will acquire each film project for
      Cdn $32,000, with payment payable on the first day of production for
      each film project. During 2006, one film project was put into production
      and an agreement was made whereby the $28,914 (2006 - $Nil) owing has no
      fixed terms of repayment and does not bear interest. The remaining four
      options expire August 1, 2008. Somnambulist charged the Company for script
      acquisition fees of $34,272 (2006 - $Nil; 2005 -
  $Nil).
 
 (d)
              The
      amount due to a director of $Nil (2006 - $15,744) is unsecured, does not
      bear interest and has no fixed terms of
  repayment.
 
 (e)
              The
      amounts due to Pathway Films Inc. (“Pathway”) of $501,882 (2006 - $12,845)
      are unsecured, have no stated terms of repayment and are non-interest
      bearing. Pathway is 100% owned by a director of the Company. Pathway
      charged the Company rent of $16,169 (2006 - $Nil; 2005 -
      $Nil).
 
 (f)
              The
      fair value of interest payable on amounts due to related parties has been
      calculated at prime plus 3.75%.  The interest expense amount of
      $13,843 was charged to operations and treated as donated
      capital.
 
 8.
              COMMON
      STOCK
 
 To
April 30, 2007, the Company has issued 10,000,000 shares of common stock
for cash of $1,395 ($0.00014 per share).
 
 All
common shares and per share amounts have been restated to give retroactive
effect to the 4:1 stock dividend, which took effect on June 26,
2006.
 
 9.
              INCOME
      TAXES
 
 The
reconciliation of income tax attributable to continuing operations computed at
the statutory tax rates to income tax expense is:
 
 2007
              
              2006Income
      tax benefit computed at Canadian statutory rates
              $
              41,600
              
              $
              9,700Non-deductible
      donated interest
              
              (4,700
              )
              
              0Unrecognized
      tax losses
              
              (36,900
              )
              
              (9,700
              )Future
      income tax benefit
              $
              0
              
              $
              0
   F
- 11
 PACIFIC
GOLD ENTERTAINMENT INC.
 (formerly
CyPacific Trading Inc.)
 (A
Development Stage Company)
 Notes
to Financial Statements
 Years
Ended April 30, 2007, 2006 and 2005
 (Expressed
in US dollars)
 9.           INCOME TAXES
(Continued)
 
 Significant
components of the Company’s future tax assets and liabilities, after applying
enacted corporate income tax rates, are as follows:
 
 2007
              
              2006Future
      income tax assetsNet
      losses carried forward
              $
              48,700
              
              $
              11,700Valuation
      allowance for future income tax assets
              
              (48,700
              )
              
              (11,700
              )Future
      income tax assets, net
              $
              0
              
              $
              0
 
 The
valuation allowance reflects the Company’s estimate that the tax assets, more
likely than not, will not be realized and consequently have not been recorded in
these financial statements.
 
 At April
30, 2007, the Company had non-capital losses for Canadian income tax purposes of
$142,800 that expire as follows:
 
 2012
              $     8,6002015
              $   16,2002026
              $     9,7002027
              $
      108,300
 
 10.
              COMMITMENTS
 
 (a)
              On
      July 10, 2006, the Company acquired the right to acquire five film
      projects from a company wholly-owned by the Company’s President and CEO.
      The film projects will be acquired pursuant to the terms and conditions of
      five separate Option and Literary Purchase Agreements. The Company will be
      able to acquire each film project for Cdn $32,000, with payment
      payable on the first day of production for each film project. At
      April 30, 2007, only one of the five films has been put into
      production. The remaining four options expire August 1,
    2008.
 
 (b)
              On
      December 17, 2006, the Company entered into a production and financing
      contract with an arms-length company. The Company intends to produce and
      finance a full-length video game by utilizing the services as a developer.
      The Company has committed to paying Cdn $250,000 in relation to the
      development, of which $92,021 has been
paid.
 
 The
contract also includes an agreement whereby the developer will repay the Company
for computer hardware purchased for production of the full-length video game
over a six-month period ending in June 2007. The short-term loan of $5,918
(2006 - $Nil) is unsecured, does not bear interest and is due in three
equal installments of Cdn $2,183, due April 1, 2007, May 1, 2007
and June 1, 2007. All payments have been received subsequent to the
year-end.
  F
- 12
 PACIFIC
GOLD ENTERTAINMENT INC.
 (formerly
CyPacific Trading Inc.)
 (A
Development Stage Company)
 Notes
to Financial Statements
 Years
Ended April 30, 2007, 2006 and 2005
 (Expressed
in US dollars)
 10.           COMMITMENTS
(Continued)
 
 (c)
              On
      April 1, 2007, the Company entered into an assignment agreement with
      Pathway, a related party, whereby the Company accepted assignment of all
      percentage of proceeds, deferred salaries and fees previously agreed to be
      paid to Result Technology Group (“RTG”), an arm’s length
      party.   The contracts assigned are as
    follows:
 
 (i)
              On
      March 23, 2007, Pathway agreed to pay RTG a producer fee of
      Cdn $35,000, which will be deferred until the first
    of:
 
 (a)
              the
      production received funding from Telefilm, or any other source other than
      the shareholder; or
 (b)
              when
      any sale is made.
 
 (ii)
              On
      March 24, 2007, RTG agreed to exchange Cdn $20,000 of the Cdn $35,000
      producer fee for 80,000 of the Company’s shares at Cdn $0.25 per
      share.
 
 (iii)
              (a)           On
      March 23, 2007, Pathway agreed to pay RTG, who will
      subsequently
 pay a
performer from the motion picture “Blood”, 1% of the total of the Canadian net
proceeds of the motion picture “Blood” and Cdn $25,000 in deferred
salary.
 
 (b)
              On
      March 24, 2007, the performer agreed to exchange Cdn $10,000 of the Cdn
      $25,000 deferred salary for the Company’s shares at Cdn $0.25 per share
      for 40,000 shares.
 
 (d)
              The
      Company entered into a performance rider agreement agreeing to pay the
      performer 5% of the Canadian net profits of the motion picture
      “Blood”.
 
 11.
              SUBSEQUENT
      EVENTS
 
 (a)
              Subsequent
      to April 30, 2007, the Company issued 2,100,000 common shares at Cdn $0.25
      per share for cash proceeds of Cdn $525,000 and 282,000 common shares at
      $0.50 per share for cash proceeds of
$141,000.
 
 (b)
              On
      May 1, 2007, the Company entered into a producers agreement with Pathway,
      a related party, for “Blood A Butcher’s Tale”.  In exchange for
      services, the Company agreed to pay producer fee of Cdn $500,000 upon
      first tier recoupment on a pari-passu, pro-rata basis and accrue 15%
      interest on the producers fee amount from May 1,
  2007.
 
 (c)
              On
      May 1, 2007, the Company agreed to issue 2,000,000 restricted common
      shares at Cdn $0.25 per share as full payment of debt of Cdn $500,000 owed
      to Pathway, a related party.
 
 (d)
              On
      May 15, 2007, the Company entered into a producers agreement for “Blood A
      Butcher’s Tale”.  In exchange for services, the Company agreed
      to pay producer fee of Cdn $25,000 upon first tier recoupment on a
      pari-passu, pro-rata basis.
   F
- 13
 PACIFIC
GOLD ENTERTAINMENT INC.
 (formerly
CyPacific Trading Inc.)
 (A
Development Stage Company)
 Notes
to Financial Statements
 Years
Ended April 30, 2007, 2006 and 2005
 (Expressed
in US dollars)
 (e)
              On
      June 21, 2007, the Company entered into a transfer agreement with Pathway,
      a related party, whereby the Company will purchase 25% of the full
      ownership of the original material entitled “Bunny Tales” for
      $100,000.
 
 (f)
              On
      June 21, 2007, the Company entered into a transfer agreement with Red
      Blossom Entertainment Inc., a related party, whereby the Company will
      purchase 24% of the full ownership of the original material entitled
      “Bunny Tales” for $100,000.
 
 (g)
              On
      July 27, 2007, the Company entered into a producers agreement for “A
      Premature Burial”.  In exchange for producing services, the
      Company agreed to pay producer fee of Cdn $50,000 upon first tier
      recoupment on a pari-passu, pro-rata basis and accrue 15% interest on the
      producers fee amount from July 27, 2007.  Film Equity will be
      distributed in the amount of a percentage based on a ratio of $50,000 to
      the final budget which is yet to be
determined.


F
- 14


Item
19.  Exhibits.





(a)           Index
to and Description of Exhibits.





Exhibit
            Description
            Status1.1
            Memorandum,
      filed as Exhibit 3.1 to PGE Inc.’s Form F-1 (Registration Statement) filed
      on July 18, 2003 and incorporated herein by reference.
            Filed1.2
            Articles
      of Incorporation, filed as Exhibit 3.2 to PGE Inc.’s Form F-1
      (Registration Statement) filed on July 18, 2003 and incorporated herein by
      reference.
            Filed1.3
            Transition
      Application dated March 30, 2006, filed as Exhibit 1.3 to PGE Inc.’s Form
      20-F (Annual Report) filed on November 30, 2006 and incorporated herein by
      reference.
            Filed1.4
            Notice
      of Articles dated June 27, 2006, filed as Exhibit 1.4 to PGE Inc.’s Form
      20-F (Annual Report) filed on November 30, 2006 and incorporated herein by
      reference.
            Filed4.1
            Option
      & Literary Purchase Agreement dated July 10, 2006 between Pacific Gold
      Entertainment Inc. and Somnambulist Imagery Inc. for the literary property
      “SUBhuman”, filed
      as Exhibit 4.1 to PGE Inc.’s Form 20-F (Annual Report) filed on November
      30, 2006 and incorporated herein by reference.
            Filed4.2
            Option
      & Literary Purchase Agreement dated July 10, 2006 between Pacific Gold
      Entertainment Inc. and Somnambulist Imagery Inc. for the literary property
      “Beneath”, filed
      as Exhibit 4.2 to PGE Inc.’s Form 20-F (Annual Report) filed on November
      30, 2006 and incorporated herein by reference
            Filed4.3
            Option
      & Literary Purchase Agreement dated July 10, 2006 between Pacific Gold
      Entertainment Inc. and Somnambulist Imagery Inc. for the literary property
      “Crimson”, filed
      as Exhibit 4.3 to PGE Inc.’s Form 20-F (Annual Report) filed on November
      30, 2006 and incorporated herein by reference.
            Filed4.4
            Option
      & Literary Purchase Agreement dated July 10, 2006 between Pacific Gold
      Entertainment Inc. and Somnambulist Imagery Inc. for the literary property
      “Blood”, filed as
      Exhibit 4.4 to PGE Inc.’s Form 20-F (Annual Report) filed on November 30,
      2006 and incorporated herein by reference.
            Filed4.5
            Option
      & Literary Purchase Agreement dated July 10, 2006 between Pacific Gold
      Entertainment Inc. and Somnambulist Imagery Inc. for the literary property
      “SUBhuman 2”,
      filed as Exhibit 4.5 to PGE Inc.’s Form 20-F (Annual Report) filed on
      November 30, 2006 and incorporated herein by reference.
            Filed4.6
            Amending
      Agreement dated August 1, 2008 between Pacific Gold Entertainment Inc. and
      Somnambulist Imagery Inc. for the literary property “SUBhuman”.
            Included4.7
            Amending
      Agreement dated August 1, 2008 between Pacific Gold Entertainment Inc. and
      Somnambulist Imagery Inc. for the literary property “Beneath”.
            Included4.8
            Amending
      Agreement dated August 1, 2008 between Pacific Gold Entertainment Inc. and
      Somnambulist Imagery Inc. for the literary property “Crimson”.
            Included4.9
            Amending
      Agreement dated August 1, 2008 between Pacific Gold Entertainment Inc. and
      Somnambulist Imagery Inc. for the literary property “SUBhuman
    2”.
            Included4.10
            Director
      / Producer Employment Agreement dated January 1, 2007 between Pacific Gold
      Entertainment Inc. and Mark Tuit.
            Included4.11
            Producer
      Employment Agreement dated January 1, 2007 between Pacific Gold
      Entertainment Inc. and Ron Loudoun.
            Included   Page
- 60
     Exhibit
              Description
              Status
 4.12
            Producer
      Employment Agreement dated January 1, 2007 between Pacific Gold
      Entertainment Inc. and Michael George.
            Included4.13
            Producer
      Employment Agreement dated January 1, 2007 between Pacific Gold
      Entertainment Inc. and Richard Powell.
            Included4.14
            Visual
      Effects Agreement dated January 26, 2007 between Pacific Gold
      Entertainment Inc. and Skywork Studios Inc.
            Included4.15
            Performer
      Contract dated March 16, 2007 between Aaron Douglas and Pacific Gold
      Entertainment Inc.
            Included4.16
            Producer
      Employment Agreement dated March 31, 2007 between Pacific Gold
      Entertainment Inc. and Result Technology Group, LLC (Jennifer
      Sciole).
            Included4.17
            Funding,
      Production and Distribution Agreement dated November 2, 2006 between
      Pathway Films Inc. and RTG Productions.
            Included4.18
            Amending
      Agreement dated April 1, 2007, between Pacific Gold Entertainment Inc. and
      Result Technology Group, LLC (Jennifer Sciole).
            Included4.19
            Amending
      Agreement dated April 1, 2007, between  Pacific Gold
      Entertainment Inc. and RTG Productions.
            Included4.20
            Producers
      Agreement dated May 1, 2007 between Pathway Films Inc. and Pacific Gold
      Entertainment Inc.
            Included4.21
            Transfer
      Agreement (Red Blossom) dated June 21, 2007 between Pacific Gold
      Entertainment Inc. and Red Blossom Entertainment Inc.
            Included4.22
            Transfer
      Agreement (Pathway) dated June 21, 2007 between Pacific Gold Entertainment
      Inc. and Pathway Films Inc.
            Included4.23
            Producers
      Agreement dated July 27, 2007 between Cam Watts and Pacific Gold
      Entertainment Inc.
            Included4.24
            Funding
      and Production Agreement (Bunny Tales #1) dated July 17, 2006 among
      Skywork Studios Inc., Pathway Films Inc., and Red Blossom Entertainment
      Inc.
            Included4.25
            Funding
      and Production Agreement (Bunny Tales #2) dated November 12, 2007 among
      Skywork Studios Inc., Pacific Gold Entertainment Inc., and Daval Releasing
      Inc.
            Included4.26
            Funding
      and Production Agreement (Bunny Tales #3) dated January 26, 2008 among
      Skywork Studios Inc., Pacific Gold Entertainment Inc., and Marigold Paints
      Pvt. Ltd.
            Included4.27
            Funding,
      Production and Distribution Agreement (Blood: Butchers Block) dated
      January 27, 2008 between Pacific Gold Entertainment Inc. and PowerUp
      Studios Inc.
            Included4.28
            Funding,
      Production and Distribution Agreement (NOMBZ) dated January 27, 2008
      between Pacific Gold Entertainment Inc. and PowerUp Studios
      Inc.
            Included4.29
            Assignment
      Agreement dated February 1, 2007 among Pathway Films Inc., Pacific Gold
      Entertainment Inc., and RTG Productions.
            Included4.30
            Distribution
      Agreement dated February 20, 2009 between Pacific Gold Entertainment Inc.
      and Daval Releasing Inc.
            Included4.31
            Non-interest
      bearing demand promissory note dated March 5, 2000 given by Pacific Gold
      Entertainment Inc. in favour of Somnambulist Imagery Inc. in the principal
      amount of CDN$32,000 for the sale of the screenplay “Blood:  A
      Butcher’s Tale”.
            Included   Page
- 61
    Exhibit
              Description
              Status
 4.32
            Non-interest
      bearing demand promissory note dated March 5, 2000 given by Pacific Gold
      Entertainment Inc. in favour of Somnambulist Imagery Inc. in the principal
      amount of CDN$32,000 for the sale of the screenplay
    “Crimson”.
            Included4.33
            Non-interest
      bearing demand promissory note dated March 5, 2000 given by Pacific Gold
      Entertainment Inc. in favour of Somnambulist Imagery Inc. in the principal
      amount of CDN$32,000 for the sale of the screenplay
    “Beneath”.
            Included11
            Code
      of Ethics, filed as Exhibit 11 to PGE Inc.’s Form 20-F (Annual Report)
      filed on November 30, 2006 and incorporated herein by
      reference.
            Filed12
            Certifications
      pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
            Included13
            Certification
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002.
            Included15.1
            Audit
      Committee Charter filed as Exhibit 15.1 to PGE Inc.’s Form 20-F (Annual
      Report) filed on November 30, 2006 and incorporated herein by
      reference.
            Filed


























SIGNATURES








Pacific
Gold Entertainment Inc. hereby certifies that it meets all of the requirements
for filing on Form 20-F and it has duly caused and authorized the undersigned to
sign this annual report on its behalf.








PACIFIC
GOLD ENTERTAINMENT INC.








By:           /s/ Ron
Loudoun


Name:           Ron Loudoun


Title:           
 Director and
CEO


Dated:          November 13, 2009











Page
- 62








Exhibit
4.6











Page
- 63





AMENDING
AGREEMENT
 
 ThisAMENDING AGREEMENT made as of
the 1st day
of August, 2008, to the Option and Literary Purchase Agreement (SubHuman) made
as of the 10th day
of July, 2006 (the “Original
Agreement”),
 
 BETWEEN:
 
 PACIFIC GOLD ENTERTAINMENT
      INC., a British Columbia company with a business office at #7 – 534
      Cambie Street, Vancouver, British Columbia, V6B
  2N7
 
 (“PGE Inc.”)
 
 AND:
 
 SOMNAMBULIST IMAGERY
      INC., a British Columbia company with a business office at #6 – 534
      Cambie Street, Vancouver, British Columbia, V6B
  2N7
 
 (the “Seller”)
 
 WITNESSES
THAT WHEREAS:
 
 A.
              By
      the Original Agreement made between the parties hereto the Seller granted
      PGE Inc. the exclusive and irrevocable option to purchase from the Seller
      the rights in certain literary property entitled SUBHUMAN;
 
 B.
              The
      parties wish to amend the Original Agreement pursuant to the terms and
      conditions of this agreement;
 
 NOW THEREFORE THIS AGREEMENT
WITNESSES that in consideration of the premises, the covenants,
agreements and warranties hereinafter set forth, it is hereby agreed as
follows:
 
 1.
              The
      Original Agreement is hereby amended by deleting the Clause of the
      Original Agreement entitled “OPTION PERIOD” in its
      entirety and replacing it with the
following:
 
 “OPTION
      PERIOD:  The within option will be effective during the
      period commencing on July 10, 2006 and ending July 31, 2009 (the “Initial Option
      Period”)”
 
 2.
              The
      Original Agreement shall henceforth be read and construed together with
      this Agreement, and the Original Agreement will remain in full force and
      effect.
 
 Page
- 64
 3.
              In
      the event of any inconsistencies between this agreement and the Original
      Agreement, this Agreement will
govern.
 
 4.
              All
      terms, conditions, covenants, agreements, benefits and obligations
      contained in the Original Agreement, as amended hereby, will be binding
      upon and enure to the benefit of the parties hereto and their respective
      successors and assigns.
 
 
 IN WITNESS WHEREOF this
Amending Agreement has been executed the day and year first above
written.
 
 
 The
Corporate Seal
of                                                                           )
 Pacific
GoldEntertainment
Inc.                                                 )
 was
hereunto affixed in the presence
of:                                         
 )
 )
 )                                           (SEAL)
 /s/ Authorized
Signatory                                                                
  )
 )
 Authorized
Signatory                                                                           )
 
 
 
 The
Corporate Seal
of                                                                           )
 Somnambulist
Imagery
Inc.                                                            )
 was
hereunto affixed in the presence
of:                                           )
 )
 )                                           (SEAL)
 /s/ Authorized
Signatory                                                                  
 )
 )
 Authorized
Signatory                                                                           )





Page
- 65





Exhibit
4.7








Page
- 66





AMENDING
AGREEMENT
 
 ThisAMENDING AGREEMENT made as of
the 1st day
of August, 2008, to the Option and Literary Purchase Agreement (Beneath) made as
of the 10th day
of July, 2006 (the “Original
Agreement”),
 
 BETWEEN:
 
 PACIFIC GOLD ENTERTAINMENT
      INC., a British Columbia company with a business office at #7 – 534
      Cambie Street, Vancouver, British Columbia, V6B
  2N7
 
 (“PGE Inc.”)
 
 AND:
 
 SOMNAMBULIST IMAGERY
      INC., a British Columbia company with a business office at #6 – 534
      Cambie Street, Vancouver, British Columbia, V6B
  2N7
 
 (the “Seller”)
 
 WITNESSES
THAT WHEREAS:
 
 A.
              By
      the Original Agreement made between the parties hereto the Seller granted
      PGE Inc. the exclusive and irrevocable option to purchase from the Seller
      the rights in certain literary property entitled BENEATH;
 
 B.
              The
      parties wish to amend the Original Agreement pursuant to the terms and
      conditions of this agreement;
 
 NOW THEREFORE THIS AGREEMENT
WITNESSES that in consideration of the premises, the covenants,
agreements and warranties hereinafter set forth, it is hereby agreed as
follows:
 
 1.
              The
      Original Agreement is hereby amended by deleting the Clause of the
      Original Agreement entitled “OPTION PERIOD” in its
      entirety and replacing it with the
following:
 
 “OPTION
      PERIOD:  The within option will be effective during the
      period commencing on July 10, 2006 and ending July 31, 2009 (the “Initial Option
      Period”)”
 
 2.
              The
      Original Agreement shall henceforth be read and construed together with
      this Agreement, and the Original Agreement will remain in full force and
      effect.
 
 Page
- 67
 3.
              In
      the event of any inconsistencies between this agreement and the Original
      Agreement, this Agreement will
govern.
 
 4.
              All
      terms, conditions, covenants, agreements, benefits and obligations
      contained in the Original Agreement, as amended hereby, will be binding
      upon and enure to the benefit of the parties hereto and their respective
      successors and assigns.
 
 
 IN WITNESS WHEREOF this
Amending Agreement has been executed the day and year first above
written.


The
Corporate Seal
of                                                                           )
 Pacific
GoldEntertainment
Inc.                                                  )
 was
hereunto affixed in the presence
of:                                         
 )
 )
 )                                           (SEAL)
 /s/ Authorized
Signatory                                                                
  )
 )
 Authorized
Signatory                                                                           )
 
 
 
 The
Corporate Seal
of                                                                           )
 Somnambulist
Imagery
Inc.                                                             )
 was
hereunto affixed in the presence
of:                                           )
 )
 )                                           (SEAL)
 /s/ Authorized
Signatory                                                                  
 )
 )
 Authorized
Signatory                                                                           )








Page
- 68








Exhibit
4.8










Page
- 69





AMENDING
AGREEMENT
 
 ThisAMENDING AGREEMENT made as of
the 1st day
of August, 2008, to the Option and Literary Purchase Agreement (Crimson) made as
of the 10th day
of July, 2006 (the “Original
Agreement”),
 
 BETWEEN:
 
 PACIFIC GOLD ENTERTAINMENT
      INC., a British Columbia company with a business office at #7 – 534
      Cambie Street, Vancouver, British Columbia, V6B
  2N7
 
 (“PGE Inc.”)
 
 AND:
 
 SOMNAMBULIST IMAGERY
      INC., a British Columbia company with a business office at #6 – 534
      Cambie Street, Vancouver, British Columbia, V6B
  2N7
 
 (the “Seller”)
 
 WITNESSES
THAT WHEREAS:
 
 A.
              By
      the Original Agreement made between the parties hereto the Seller granted
      PGE Inc. the exclusive and irrevocable option to purchase from the Seller
      the rights in certain literary property entitled CRIMSON;
 
 B.
              The
      parties wish to amend the Original Agreement pursuant to the terms and
      conditions of this agreement;
 
 NOW THEREFORE THIS AGREEMENT
WITNESSES that in consideration of the premises, the covenants,
agreements and warranties hereinafter set forth, it is hereby agreed as
follows:
 
 1.
              The
      Original Agreement is hereby amended by deleting the Clause of the
      Original Agreement entitled “OPTION PERIOD” in its
      entirety and replacing it with the
following:
 
 “OPTION
      PERIOD:  The within option will be effective during the
      period commencing on July 10, 2006 and ending July 31, 2009 (the “Initial Option
      Period”)”
 
 2.
              The
      Original Agreement shall henceforth be read and construed together with
      this Agreement, and the Original Agreement will remain in full force and
      effect.
 
 Page
- 70
 3.
              In
      the event of any inconsistencies between this agreement and the Original
      Agreement, this Agreement will
govern.
 
 4.
              All
      terms, conditions, covenants, agreements, benefits and obligations
      contained in the Original Agreement, as amended hereby, will be binding
      upon and enure to the benefit of the parties hereto and their respective
      successors and assigns.
 
 
 IN WITNESS WHEREOF this
Amending Agreement has been executed the day and year first above
written.
 
 
 The
Corporate Seal
of                                                                           
)
 Pacific
GoldEntertainment
Inc.                                                  )
 was
hereunto affixed in the presence
of:                                          
 )
 )
 )                                           (SEAL)
 /s/ Authorized
Signatory                                                                
   )
 )
 Authorized
Signatory                                                                           )
 
 
 
 The
Corporate Seal
of                                                                           )
 Somnambulist
Imagery
Inc.                                                            )
 was
hereunto affixed in the presence
of:                                          
 )
 )
 )                                           (SEAL)
 /s/ Authorized
Signatory                                                                  
 )
 )
 Authorized
Signatory                                                                           )











Page
- 71








Exhibit
4.9










Page
- 72


AMENDING
AGREEMENT
 
 ThisAMENDING AGREEMENT made as of
the 1st day
of August, 2008, to the Option and Literary Purchase Agreement (SubHuman 2) made
as of the 10th day
of July, 2006 (the “Original
Agreement”),
 
 BETWEEN:
 
 PACIFIC GOLD ENTERTAINMENT
      INC., a British Columbia company with a business office at #7 – 534
      Cambie Street, Vancouver, British Columbia, V6B
  2N7
 
 (“PGE Inc.”)
 
 AND:
 
 SOMNAMBULIST IMAGERY
      INC., a British Columbia company with a business office at #6 – 534
      Cambie Street, Vancouver, British Columbia, V6B
  2N7
 
 (the “Seller”)
 
 WITNESSES
THAT WHEREAS:
 
 A.
              By
      the Original Agreement made between the parties hereto the Seller granted
      PGE Inc. the exclusive and irrevocable option to purchase from the Seller
      the rights in certain literary property entitled SUBHUMAN
    2;
 
 B.
              The
      parties wish to amend the Original Agreement pursuant to the terms and
      conditions of this agreement;
 
 NOW THEREFORE THIS AGREEMENT
WITNESSES that in consideration of the premises, the covenants,
agreements and warranties hereinafter set forth, it is hereby agreed as
follows:
 
 1.
              The
      Original Agreement is hereby amended by deleting the Clause of the
      Original Agreement entitled “OPTION PERIOD” in its
      entirety and replacing it with the
following:
 
 “OPTION
      PERIOD:  The within option will be effective during the
      period commencing on July 10, 2006 and ending July 31, 2009 (the “Initial Option
      Period”)”
 
 2.
              The
      Original Agreement shall henceforth be read and construed together with
      this Agreement, and the Original Agreement will remain in full force and
      effect.
 
 Page
- 73
 3.
              In
      the event of any inconsistencies between this agreement and the Original
      Agreement, this Agreement will
govern.
 
 4.
              All
      terms, conditions, covenants, agreements, benefits and obligations
      contained in the Original Agreement, as amended hereby, will be binding
      upon and enure to the benefit of the parties hereto and their respective
      successors and assigns.
 
 
 IN WITNESS WHEREOF this
Amending Agreement has been executed the day and year first above
written.
 
 
 The
Corporate Seal
of                                                                           
)
 Pacific
GoldEntertainment
Inc.                                                  )
 was
hereunto affixed in the presence
of:                                          
 )
 )
 )                                           (SEAL)
 /s/ Authorized
Signatory                                                                
   )
 )
 Authorized
Signatory                                                                           )
 
 
 
 The
Corporate Seal
of                                                                           )
 Somnambulist
Imagery
Inc.                                                            )
 was
hereunto affixed in the presence
of:                                          
 )
 )
 )                                           (SEAL)
 /s/ Authorized
Signatory                                                                  
 )
 )
 Authorized
Signatory                                                                           )














Page
- 74








Exhibit
4.10










Page
- 75


DIRECTOR / PRODUCER EMPLOYMENT
AGREEMENT
 
 THIS
AGREEMENT is made and entered into as of the January 1, 2007, by and between
Pacific Gold Entertainment, Inc., (hereinafter "Production Company"), and Mark
Tuit (hereinafter "Employee").
 
 This
Agreement is entered into with reference to the following facts:
 A.
Production Company intends to produce a theatrical motion picture (hereinafter
the "Picture") based upon that certain screenplay tentatively entitled "Blood: A
Butcher’s Tale," (hereinafter the "Screenplay") which Picture is intended for
initial theatrical exhibition.
 
 B.
Production Company wishes to utilize the services of Employee as Director and
Producer in connection with the production and delivery of the Picture upon the
terms and conditions herein contained.
 
 ACCORDINGLY,
IT IS AGREED AS FOLLOWS:
 
 1.
ENGAGEMENT: Subject to events of force majeure, default, or the disability or
death of Employee, Production Company hereby engages the services of Employee,
and Employee agrees to render non-exclusive services as Director and Producer,
in connection with the production of the Picture upon the terms and conditions
herein contained. Subject to Production Company's final approval, Employee shall
supervise the testing of persons proposed for the cast, scouting for shooting
locations, assembling the crew, the supervision of the photography of the
Picture, assisting in the supervision of the editing, and sound mixing,
assisting in the selection of music, assisting in the supervision of the final
dubbing and scoring, the supervision of all other post-production requirements
of the Picture, the delivery of the final answer print and all other customary
delivery items to Production Company and its principal distributors, foreign and
domestic, and perform such other services as are reasonably required by
Production Company and are usually and customarily performed by producers in the
motion picture industry.
 
 2. TERM:
Employee shall render the services required of him as set forth in paragraph 1
hereof during the period commencing on January 1, 2007, and continuing
thereafter for such time as pre-production, principal photography, and customary
post-production and delivery of the Picture as required by Production
Company.
 
 It is
contemplated that principal photography of the Picture will commence
approximately on March 16, 2007 and, subject to extension for events beyond
Production Company's control and other events of force majeure, Employee's
exclusive services shall not be required beyond December 31, 2008, but he shall
nevertheless supervise the delivery of the Picture hereunder.
 
 3.
COMPENSATION: In consideration for all of the services to be rendered by
Employee hereunder and for all of the rights granted by Employee to Production
Company, and on condition that Employee is not in default hereunder, and subject
to the terms and conditions specified herein, Production Company agrees to pay
Employee, and Employee agrees to accept:
 
 Page
- 76
 (a) Fixed
Compensation: Employee shall receive the amount of Two Thousand Eighty dollars
($2080.00) paid semi-monthly over the course of pre-production, production,
post-production, and delivery.
 
 (b)
Deferred Compensation: In addition to the Fixed Compensation payable under
Clause 3(a), subject to the production and release of the Picture, and subject
to the performance of all obligations of Employee, the Employee shall receive
and an amount equal to Twenty Five Thousand dollars ($25,000.00) in fifth (5th)
tier of the recoupment schedule (Exhibit A). The aforesaid payment shall be
deferred and paid pro-rata with all similar deferments.
 
 (c) Net
Profits Definition: All income actually received by Production Company from the
exploitation of the Picture after deducting all expenses and deferments incurred
by Production Company in connection with the financing (including all interest
and fees owed), pre-production, production, post-production, investor
recoupment, marketing, distribution and exploitation of the Picture; this shall
also include any attorneys' fees and expenses incurred by Production Company in
connection with the Picture.
 
 4.
SERVICES: At all times during the term of Employee's services hereunder,
Employee will promptly and faithfully comply with all of Production Company's
reasonable instructions, directions, requests, rules and regulations. Employee
will perform his services conscientiously and to the full limit of his talents
and capabilities when wherever reasonably required or desired by Production
Company and in accordance with Production Company's reasonable instructions and
directions in all matters, including those involving artistic taste and
judgment. Employee will perform such service as Production Company may
reasonably require of him, and as customarily and usually rendered by and
required of directors and producers employed to direct and produce low-budget
theatrical motion pictures in the motion picture industry.
 
 Production
Company will provide Employee with a copy of the work print on DVD. Employee
agrees not to show this work print to any distributor or sales rep without
Production Company's prior written consent, and Employee will not show the work
print to anyone else without the prior consent of Production
Company.
 
 5.
CONTROL: Production Company shall have complete control of the production of the
Picture including, but not limited to, all artistic controls and the right to
cut, edit, add to, subtract from, arrange, rearrange, and revise the Picture in
any manner. Production Company shall not be obligated to make any actual use of
Employee's services or to produce or to release or to continue the distribution
or release of the Picture once released.
 
 Page
- 77
 7.
RIGHTS: In addition to Employee's services as a producer, Production Company
shall be entitled to and shall own all of the results and proceeds thereof
throughout the world in perpetuity (including, but not limited to, all rights
throughout the world of production, public performance, manufacture, television,
recordation, and reproduction by any art or method, whether now known or
hereafter devised, copyright, trademark and patent) whether such results and
proceeds consist of literary, dramatic, musical, motion picture, mechanical or
any other form of works, ideas, themes, compositions, creations, or products and
without obligation to pay any fees, royalties or other amounts except those
expressly provided for in this Agreement. Specifically, but without in any way
limiting the generality of the foregoing, Production Company shall own all
rights of every kind and character in and to any and all acts, poses, plays and
appearances of any and all kinds which Employee may write, suggest, direct or
produce during the term hereof (provided, however, that any assignment will not
reduce Production Company's obligations to Employee in regard to compensation
and credit). In the event that Production Company shall desire to secure
separate assignments of any of the foregoing, Employee agrees to execute them
upon Production Company's request therefore. All rights granted or agreed to be
granted to Production Company hereunder shall vest in Production Company
immediately and shall remain vested in Production Company and Production
Company's successors and assigns whether this Agreement expires in normal course
or whether Employee's engagement hereunder is sooner terminated for any cause or
reason. Production Company shall have the right to use and authorize others to
use the name, voice and likeness of Employee, and any results and proceeds of
his services hereunder, to advertise and publicize the Picture including, but
not limited to, the right to use the same in the credits of the Picture, in
trailers, in commercial tie-ups, and in all other forms and media of advertising
and publicity including merchandising, publications, records and commercial
advertising and publicity tie-ups derived from or relating to the
Picture.
 
 8.
REPRESENTATIONS, WARRANTIES & INDEMNITY:
 (a)
Employee represents and warrants that all material of every kind authored,
written, prepared, composed, and/or submitted by Employee hereunder for or to
Production Company shall be wholly original with him, and shall not infringe or
violate the right of privacy of, or constitute libel against, or violate any
copyright, common law right or any other right of any person, firm or
corporation. The foregoing warranties shall not apply to any material not
authored, written, prepared, composed or submitted by Employee, but shall apply
to all material, incidents and characterizations which Employee may add to or
incorporate in or cause to be added to or incorporated in such material.
Employee further represents and warrants that Employee is free to enter into
this Agreement and to render the required services hereunder and that Employee
is not subject to any obligations or disability which will or might interfere
with Employee's fully complying with this Agreement; that Employee has not made,
and will not make any grant or assignment which might interfere with the
complete enjoyment of the rights granted to Production Company hereunder; and
that Employee will not at any time render any services or do any acts which
shall derogate from the value of Employee's services rendered pursuant to this
Agreement or which shall interfere with the performance of any of Employee's
covenants or obligations pursuant to this Agreement. Employee hereby indemnifies
Production Company, its successors, assigns, licensees, officers and employees,
and hold it harmless from and against any and all liability, losses, damages and
expenses (including attorneys' fees) arising out of (i) the use of any materials
furnished by Employee for the Picture, or (ii) any breach by Employee of any
warranty or agreement made by Employee hereunder.
 
 Page
- 78
 (b)
Production Company represents and warrants that Production Company has the right
to enter into this Agreement, and to render the required obligations hereunder,
and that Production Company is not subject to any other obligations or
disabilities which will or might interfere with Production Company's fully
complying with this Agreement; that Production Company has not made, and will
not make any grant or assignment which might interfere with the complete
enjoyment of the compensation granted to Employee hereunder; that Production
Company has secured all necessary financing to make all payments hereunder, and
complete the Picture as budgeted; and that Production Company will not at any
time render any services or do any acts which shall derogate from the value of
Production Company's obligations pursuant to this Agreement, or which shall
interfere with the performance of any of Production Company's covenants or
obligations pursuant to this Agreement. Production Company hereby indemnifies
Employee and his successors and assigns, and holds them harmless from and
against any and all liability, losses, damages, and expenses (including
reasonable attorneys' fees) arising out of any breach by Production Company of
any warranty or agreement made by Production Company hereunder.
 
 9.
CREDIT: Provided that Employee shall fully and completely keep and perform all
of his obligations and agreements hereunder, and if the Picture has been
produced substantially with the use of Employee's services hereunder, Employee
shall receive a producing credit on the positive prints and/or tape for the
Picture in the main titles thereof, and in all paid advertisements (subject to
customary distributor exclusions).
 Employee's
credit shall be in the same size and prominence as all producers, and placed in
all media in which his name appears. Producer credit shall read:
 
 "Produced
by Mark Tuit".
 
 Page
- 79
 If an
attribution is used; only company name may appear in print media. Credit on all
prints will appear in the main titles in second or third position from last
credit in the same size as the largest credit, other than film title or
presentation credit (which could include production company name). Nothing
herein shall be deemed to restrict Production Company from granting co-producer,
associate producer, executive producer or similar producer credits to
others.
 (a)
Credit: Subject to the production and release of the Picture and provided
Director performs his material obligations hereunder, then Production Company
shall accord Director credit in connection with the Picture in accordance with
the credit allocation rules of the Directors Guild of America, Basic Agreement,
as amended and supplemented from time to time. Said credit shall
read:
 
 "Directed
by " Mark Tuit"
 
 (b)
Artwork Title Exception: If both a regular (or repeat) title and an artwork
title are used, the position and percentage requirements above, as they relate
to the title of the Picture, shall relate to the regular (or repeat) title. If
only an artwork title is used, the percentage requirements above, as they relate
to the title, shall be not less than ten percent (10%) of the average size of
the letters used in the artwork title.
 
 (c)
Credit Limitation: Production Company agrees that no other individual and/or
entity (other than members of the cast receiving "starring" billing before or
after the title of the Picture or the company distributing and/or financing the
Picture) shall receive credit larger than that used to display the credit
accorded to Director and no other individual or entity shall receive a credit
that is larger.
 
 No casual
or inadvertent failure to comply with the provisions of this paragraph or
failure of any third party to comply with same shall be deemed to be a breach of
this Agreement by Production Company. In the event of a failure or omission by
Production Company constituting a breach of its credit obligations under this
Agreement, Employee's rights shall be limited to the right, if any, to seek
damages at law, and Employee shall not have any right in such event to rescind
this Agreement or any of the rights granted to Production Company hereunder, or
to enjoin the distribution, exhibition, or other exploitation of the Picture or
the advertising or publicizing thereof. Production Company shall, however, upon
receipt of written notice of any such breach of its credit obligations, cure
such breach on a prospective basis on materials to be created in the
future.
 
 10.
CONTINGENCIES: If Employee shall become incapacitated or prevented from fully
performing his services hereunder by reason of illness, accident, or mental and
physical disability and/or if the production of the Picture is hampered or
interrupted or interfered with for any event or reason beyond the control of
Production Company or any other event of force majeure (hereinafter collectively
referred to as "incapacity"), Production Company shall have the right to suspend
Employee's services and the compensation payable to Employee during the
continuance of any such incapacity. In the event any such incapacity continues
for a period of seven (7) consecutive days or for an aggregate period of
twenty-one (21) days, Production Company shall have the right to terminate
Employee's engagement hereunder. In the event that Employee should fail, refuse
or neglect other than because of incapacity to perform any of his required
services hereunder, Production Company shall have the right at any time to
suspend Employee's services and the compensation payable to Employee during the
continuance of such default, and Production Company shall have the right at any
time to terminate Employee's engagement hereunder by reason of such
default.
 
 11. NO
RIGHT TO CONTRACT: Employee acknowledges and agrees that he has no right or
authority to and will not employ any person to serve in any capacity, nor
contract for the purchase or rental of any article or material, nor make any
commitment or agreement whereby Production Company shall be required to pay any
monies or other consideration or which shall otherwise obligate Production
Company, without Production Company's express prior written
consent.
  Page
- 80
  12.
ASSIGNMENT: Production Company may transfer and assign this Agreement or all or
any of its rights hereunder to any person, firm or corporation, but no such
assignment or transfer shall relieve Production Company of its executory
obligations hereunder. This Agreement shall inure to the benefit of Production
Company's successors, licensees and assigns. Employee shall not assign or
transfer this Agreement, or any of his rights or obligations hereunder, it being
understood that the obligations and duties of Employee are personal to Employee,
and any purported assignment shall be void. Employee may, however, assign his
right to receive any monies hereunder.
 
 13.
LIMITATION OF REMEDY: All rights assigned by this Agreement shall be irrevocable
under all or any circumstances and shall not be subject to reversion,
rescission, termination or injunction. Employee agrees that he shall not have
the right to enjoin the exhibition, distribution or exploitation of any motion
picture produced hereunder or to enjoin, rescind or terminate any rights granted
to Production Company hereunder. Employee further agrees that Employee's sole
remedy in the event of any default by Production Company hereunder, including
the failure by Production Company to pay Employee any consideration payable to
Employee pursuant hereto, or to accord Employee credit (to the extent that
Production Company is obligated to accord Employee such credit) pursuant hereto,
shall be an action at law for damages and/or for an accounting (if applicable).
At all times, the Production Company shall have all rights and remedies which it
has at law or in equity, pursuant hereto or otherwise.
 
 14.
NOTICES: All notices or payments which Production Company may be required to
give or make to Employee hereunder may be delivered personally or sent by
certified or registered mail or telegraph, or by email to 2155 Gravely Street,
Vancouver BC V5L-3B8.  Email: marktuit@gmail.com
 
 All
notices which Employee may wish to give to Production Company hereunder may be
delivered personally or sent by certified or registered mail or telegraph, or
fax, to Production Company at # 7 - 534 Cambie Street, Suite 7, Vancouver, BC,
V6B 2N7. Fax 604-633-2703. The date of delivery, or attempted delivery, as the
case may be, of any notice or payment hereunder shall be deemed to be the date
of service of such notice or payment.
 
 15.
SECTION HEADINGS: The headings of paragraphs, sections or other subdivisions of
this Agreement are for convenience in reference only. They will not be used in
any way to govern, limit, modify, construe or otherwise be given any legal
effect.
 
 16.
GOVERNING LAW / ARBITRATION / REMEDIES  This agreement will be deemed to
have been executed and delivered in Vancouver, British Columbia, Canada, and the
rights and obligations of the Parties hereunder will be construed and enforced
in accordance with the laws of Canada, without regard to conflicts of law
principles thereof. The place of arbitration will be in Canada applying its then
current rules and the language of the arbitration will be in English. Judgment
upon the award rendered by the arbitrator may be entered into any court having
jurisdiction thereof.
  Page
- 81
 The
prevailing party in any such arbitration will be entitled to recover its
reasonable attorneys’ fees and costs, in addition to the award of the
arbitrator.
 
 17.
ENTIRE AGREEMENT: This Agreement represents the entire understanding between the
parties hereto with respect to the subject matter hereof, and this Agreement
supersedes all previous representations, understandings or agreements, oral or
written, between the parties with respect to the subject matter hereof, and
cannot be modified except by written instrument signed by the parties hereto.
This Agreement shall be governed by and construed in accordance with the laws of
British Columbia, and the exclusive venue for resolution of any dispute arising
out of, or in connection with this Agreement shall be in Vancouver, British
Columbia.
 
 AGREED TO
AND ACCEPTED:
 
 /s/ Mark Tuit
 ______________________________
 Mark
Tuit  "Employee"
 January
1, 2007
 
 AGREED TO
AND ACCEPTED:
 
 /s/ Michael
George
 ______________________________
 Michael
George - Producer
 Pacific
Gold Entertainment, Inc. "Production Company"
 January
1, 2007
 
 AGREED TO
AND ACCEPTED:
 
 /s/ Ron Loudoun
 ______________________________
 Ron
Loudoun - CFO
 Pacific
Gold Entertainment, Inc. "Production Company"
 January
1, 2007














Page
- 82








Exhibit
4.11







Page
- 83





PRODUCER EMPLOYMENT
AGREEMENT
  THIS
AGREEMENT is made and entered into as of the January 1, 2007, by and between
Pacific Gold Entertainment, Inc., (hereinafter "Production Company"), and Ron
Loudoun (hereinafter "Employee").
   This
Agreement is entered into with reference to the following facts:
   A.
Production Company intends to produce a theatrical motion picture (hereinafter
the "Picture") based upon that certain screenplay tentatively entitled " Blood:
A Butcher’s Tale," (hereinafter the "Screenplay") which Picture is intended for
initial theatrical exhibition.
   B.
Production Company wishes to utilize the services of Employee as an Executive
Producer in connection with the production and delivery of the Picture upon the
terms and conditions herein contained.
   ACCORDINGLY,
IT IS AGREED AS FOLLOWS:
   1.
ENGAGEMENT: Subject to events of force majeure, default, or the disability or
death of Employee, Production Company hereby engages the services of Employee,
and Employee agrees to render non-exclusive services as an executive producer,
in connection with the production of the Picture upon the terms and conditions
herein contained. Subject to Production Company's final approval, Employee shall
supervise the testing of persons proposed for the cast, scouting for shooting
locations, assembling the crew, the supervision of the photography of the
Picture, assisting in the supervision of the editing, and sound mixing,
assisting in the selection of music, assisting in the supervision of the final
dubbing and scoring, the supervision of all other post-production requirements
of the Picture, the delivery of the final answer print and all other customary
delivery items to Production Company and its principal distributors, foreign and
domestic, and perform such other services as are reasonably required by
Production Company and are usually and customarily performed by producers in the
motion picture industry.
   2. TERM:
Employee shall render the services required of him as set forth in paragraph 1
hereof during the period commencing on January 1, 2007, and continuing
thereafter for such time as pre-production, principal photography, and customary
post-production and delivery of the Picture as required by Production
Company.
   It is
contemplated that principal photography of the Picture will commence
approximately on March 16, 2007 and, subject to extension for events beyond
Production Company's control and other events of force majeure, Employee's
exclusive services shall not be required beyond December 31, 2008, but he shall
nevertheless supervise the delivery of the Picture hereunder.
   3.
COMPENSATION: In consideration for all of the services to be rendered by
Employee hereunder and for all of the rights granted by Employee to Production
Company, and on condition that Employee is not in default hereunder, and subject
to the terms and conditions specified herein, Production Company agrees to pay
Employee, and Employee agrees to accept:
   (a) Fixed
Compensation:Employee
shall receive the amount of One Thousand Six Hundred Sixty Four dollars
($1664.00)paid semi-monthly over the course of pre-production,
production and post-production.
  Page
- 84
 (b)
Deferred Compensation: In addition to the Fixed Compensation payable under
Clause 3(a), subject to the production and release of the Picture, and subject
to the performance of all obligations of Employee, the Employee shall receive
and an amount equal to Twenty Five Thousand dollars ($25,000.00) in fifth (5th)
tier of the recoupment schedule (Exhibit A). The aforesaid payment shall be
deferred and paid pro rata with all similar deferments.
  
  (c) Net
Profits Definition: All income actually received by Production Company from the
exploitation of the Picture after deducting all expenses and deferments incurred
by Production Company in connection with the financing (including all interest
and fees owed), pre-production, production, post-production, investor
recoupment, marketing, distribution and exploitation of the Picture; this shall
also include any attorneys' fees and expenses incurred by Production Company in
connection with the Picture.
   4.
SERVICES: At all times during the term of Employee's services hereunder,
Employee will promptly and faithfully comply with all of Production Company's
reasonable instructions, directions, requests, rules and regulations. Employee
will perform his services conscientiously and to the full limit of his talents
and capabilities when wherever reasonably required or desired by Production
Company and in accordance with Production Company's reasonable instructions and
directions in all matters, including those involving artistic taste and
judgment. Employee will perform such service as Production Company may
reasonably require of him, and as customarily and usually rendered by and
required of producers employed to produce low-budget theatrical motion pictures
in the motion picture industry.
   Production
Company will provide Employee with a copy of the work print on DVD. Employee
agrees not to show this work print to any distributor or sales rep without
Production Company's prior written consent, and Employee will not show the work
print to anyone else without the prior consent of Production
Company.
   5.
CONTROL: Production Company shall have complete control of the production of the
Picture including, but not limited to, all artistic controls and the right to
cut, edit, add to, subtract from, arrange, rearrange, and revise the Picture in
any manner. Production Company shall not be obligated to make any actual use of
Employee's services or to produce or to release or to continue the distribution
or release of the Picture once released.
   7.
RIGHTS: In addition to Employee's services as a producer, Production Company
shall be entitled to and shall own all of the results and proceeds thereof
throughout the world in perpetuity (including, but not limited to, all rights
throughout the world of production, public performance, manufacture, television,
recordation, and reproduction by any art or method, whether now known or
hereafter devised, copyright, trademark and patent) whether such results and
proceeds consist of literary, dramatic, musical, motion picture, mechanical or
any other form of works, ideas, themes, compositions, creations, or products and
without obligation to pay any fees, royalties or other amounts except those
expressly provided for in this Agreement. Specifically, but without in any way
limiting the generality of the foregoing, Production Company shall own all
rights of every kind and character in and to any and all acts, poses, plays and
appearances of any and all kinds which Employee may write, suggest, direct or
produce during the term hereof (provided, however, that any assignment will not
reduce Production Company's obligations to Employee in regard to compensation
and credit). In the event that Production Company shall desire to secure
separate assignments of any of the foregoing, Employee agrees to execute them
upon Production Company's request therefore. All rights granted or agreed to be
granted to Production Company hereunder shall vest in Production Company
immediately and shall remain vested in Production Company and Production
Company's successors and assigns whether this Agreement expires in normal course
or whether Employee's engagement hereunder is sooner terminated for any cause or
reason. Production Company shall have the right to use and authorize others to
use the name, voice and likeness of Employee, and any results and proceeds of
his services hereunder, to advertise and publicize the Picture including, but
not limited to, the right to use the same in the credits of the Picture, in
trailers, in commercial tie-ups, and in all other forms and media of advertising
and publicity including merchandising, publications, records and commercial
advertising and publicity tie-ups derived from or relating to the
Picture.
  Page
- 85
  8.
REPRESENTATIONS, WARRANTIES & INDEMNITY:
   (a)
Employee represents and warrants that all material of every kind authored,
written, prepared, composed, and/or submitted by Employee hereunder for or to
Production Company shall be wholly original with him, and shall not infringe or
violate the right of privacy of, or constitute libel against, or violate any
copyright, common law right or any other right of any person, firm or
corporation. The foregoing warranties shall not apply to any material not
authored, written, prepared, composed or submitted by Employee, but shall apply
to all material, incidents and characterizations which Employee may add to or
incorporate in or cause to be added to or incorporated in such material.
Employee further represents and warrants that Employee is free to enter into
this Agreement and to render the required services hereunder and that Employee
is not subject to any obligations or disability which will or might interfere
with Employee's fully complying with this Agreement; that Employee has not made,
and will not make any grant or assignment which might interfere with the
complete enjoyment of the rights granted to Production Company hereunder; and
that Employee will not at any time render any services or do any acts which
shall derogate from the value of Employee's services rendered pursuant to this
Agreement or which shall interfere with the performance of any of Employee's
covenants or obligations pursuant to this Agreement. Employee hereby indemnifies
Production Company, its successors, assigns, licensees, officers and employees,
and hold it harmless from and against any and all liability, losses, damages and
expenses (including attorneys' fees) arising out of (i) the use of any materials
furnished by Employee for the Picture, or (ii) any breach by Employee of any
warranty or agreement made by Employee hereunder.
   (b)
Production Company represents and warrants that Production Company has the right
to enter into this Agreement, and to render the required obligations hereunder,
and that Production Company is not subject to any other obligations or
disabilities which will or might interfere with Production Company's fully
complying with this Agreement; that Production Company has not made, and will
not make any grant or assignment which might interfere with the complete
enjoyment of the compensation granted to Employee hereunder; that Production
Company has secured all necessary financing to make all payments hereunder, and
complete the Picture as budgeted; and that Production Company will not at any
time render any services or do any acts which shall derogate from the value of
Production Company's obligations pursuant to this Agreement, or which shall
interfere with the performance of any of Production Company's covenants or
obligations pursuant to this Agreement. Production Company hereby indemnifies
Employee and his successors and assigns, and holds them harmless from and
against any and all liability, losses, damages, and expenses (including
reasonable attorneys' fees) arising out of any breach by Production Company of
any warranty or agreement made by Production Company hereunder.
   9.
CREDIT: Provided that Employee shall fully and completely keep and perform all
of his obligations and agreements hereunder, and if the Picture has been
produced substantially with the use of Employee's services hereunder, Employee
shall receive a producing credit on the positive prints and/or tape for the
Picture in the main titles thereof, and in all paid advertisements (subject to
customary distributor exclusions). Employee's credit shall be in the same size
and prominence as all producers, and placed in all media in which his name
appears. Credit shall read "Executive Produced by Ron Loudoun" If an attribution
is used; only company name may appear in print media. Credit on all prints will
appear in the main titles in second or third position from last credit in the
same size as the largest credit, other than film title or presentation credit
(which could include production company name). Nothing herein shall be deemed to
restrict Production Company from granting co-producer, associate producer,
executive producer or similar producer credits to others.
  Page
- 86
 No casual
or inadvertent failure to comply with the provisions of this paragraph or
failure of any third party to comply with same shall be deemed to be a breach of
this Agreement by Production Company. In the event of a failure or omission by
Production Company constituting a breach of its credit obligations under this
Agreement, Employee's rights shall be limited to the right, if any, to seek
damages at law, and Employee shall not have any right in such event to rescind
this Agreement or any of the rights granted to Production Company hereunder, or
to enjoin the distribution, exhibition, or other exploitation of the Picture or
the advertising or publicizing thereof. Production Company shall, however, upon
receipt of written notice of any such breach of its credit obligations, cure
such breach on a prospective basis on materials to be created in the
future.
 
 10.
CONTINGENCIES: If Employee shall become incapacitated or prevented from fully
performing his services hereunder by reason of illness, accident, or mental and
physical disability and/or if the production of the Picture is hampered or
interrupted or interfered with for any event or reason beyond the control of
Production Company or any other event of force majeure (hereinafter collectively
referred to as "incapacity"), Production Company shall have the right to suspend
Employee's services and the compensation payable to Employee during the
continuance of any such incapacity. In the event any such incapacity continues
for a period of seven (7) consecutive days or for an aggregate period of
twenty-one (21) days, Production Company shall have the right to terminate
Employee's engagement hereunder. In the event that Employee should fail, refuse
or neglect other than because of incapacity to perform any of his required
services hereunder, Production Company shall have the right at any time to
suspend Employee's services and the compensation payable to Employee during the
continuance of such default, and Production Company shall have the right at any
time to terminate Employee's engagement hereunder by reason of such
default.
  11. NO
RIGHT TO CONTRACT: Employee acknowledges and agrees that he has no right or
authority to and will not employ any person to serve in any capacity, nor
contract for the purchase or rental of any article or material, nor make any
commitment or agreement whereby Production Company shall be required to pay any
monies or other consideration or which shall otherwise obligate Production
Company, without Production Company's express prior written
consent.
  12.
ASSIGNMENT: Production Company may transfer and assign this Agreement or all or
any of its rights hereunder to any person, firm or corporation, but no such
assignment or transfer shall relieve Production Company of its executory
obligations hereunder. This Agreement shall inure to the benefit of Production
Company's successors, licensees and assigns. Employee shall not assign or
transfer this Agreement, or any of his rights or obligations hereunder, it being
understood that the obligations and duties of Employee are personal to Employee,
and any purported assignment shall be void. Employee may, however, assign his
right to receive any monies hereunder.
  13.
LIMITATION OF REMEDY: All rights assigned by this Agreement shall be irrevocable
under all or any circumstances and shall not be subject to reversion,
rescission, termination or injunction. Employee agrees that he shall not have
the right to enjoin the exhibition, distribution or exploitation of any motion
picture produced hereunder or to enjoin, rescind or terminate any rights granted
to Production Company hereunder. Employee further agrees that Employee's sole
remedy in the event of any default by Production Company hereunder, including
the failure by Production Company to pay Employee any consideration payable to
Employee pursuant hereto, or to accord Employee credit (to the extent that
Production Company is obligated to accord Employee such credit) pursuant hereto,
shall be an action at law for damages and/or for an accounting (if applicable).
At all times, the Production Company shall have all rights and remedies which it
has at law or in equity, pursuant hereto or otherwise.
  14.
NOTICES: All notices or payments which Production Company may be required to
give or make to Employee hereunder may be delivered personally or sent by
certified or registered mail or telegraph, or by fax to Employee at 534 Cambie
Street, Suite 5, Vancouver, BC, V6B 2N7. Fax 604-633-2703.
 
 Page
- 87
 All
notices which Employee may wish to give to Production Company hereunder may be
delivered personally or sent by certified or registered mail or telegraph, or
fax, to Production Company at 534 Cambie Street, Suite 7, Vancouver, BC, V6B
2N7. Fax 604-633-2703. The date of delivery, or attempted delivery, as the case
may be, of any notice or payment hereunder shall be deemed to be the date of
service of such notice or payment.
 
 15.
SECTION HEADINGS: The headings of paragraphs, sections or other subdivisions of
this Agreement are for convenience in reference only. They will not be used in
any way to govern, limit, modify, construe or otherwise be given any legal
effect.
 
 16. GOVERNING LAW / ARBITRATION / REMEDIES  This agreement will
be deemed to have been executed and delivered in Vancouver, British Columbia,
Canada, and the rights and obligations of the Parties hereunder will be
construed and enforced in accordance with the laws of Canada, without regard to
conflicts of law principles thereof. The place of arbitration will be in Canada
applying its then current rules and the language of the arbitration will be in
English. Judgment upon the award rendered by the arbitrator may be entered into
any court having jurisdiction thereof. The prevailing party in any such
arbitration will be entitled to recover its reasonable attorneys’ fees and
costs, in addition to the award of the arbitrator.
  17.
ENTIRE AGREEMENT: This Agreement represents the entire understanding between the
parties hereto with respect to the subject matter hereof, and this Agreement
supersedes all previous representations, understandings or agreements, oral or
written, between the parties with respect to the subject matter hereof, and
cannot be modified except by written instrument signed by the parties hereto.
This Agreement shall be governed by and construed in accordance with the laws of
British Columbia, and the exclusive venue for resolution of any dispute arising
out of, or in connection with this Agreement shall be in Vancouver, British
Columbia.
   AGREED TO
AND ACCEPTED:
   
   /s/ Ron Loudoun
 ______________________________
 Ron
Loudoun  "Employee"
   January
1, 2007
  AGREED TO
AND ACCEPTED:
 
 /s/ Mark Tuit
 ______________________________
 Mark Tuit
- CEO
 Pacific
Gold Entertainment, Inc. "Production Company"
 January
1, 2007
 
  AGREED TO
AND ACCEPTED:
  
  /s/ Michael
George
 ______________________________
 Michael
George - Producer
 Pacific
Gold Entertainment, Inc. "Production Company"
 January
1, 2007


Page
- 88








Exhibit
4.12







Page
- 89
 PRODUCER EMPLOYMENT
AGREEMENT


THIS
AGREEMENT is made and entered into as of the January 1, 2007, by and between
Pacific Gold Entertainment, Inc., (hereinafter "Production Company"), and
Michael George (hereinafter "Employee").
   This
Agreement is entered into with reference to the following facts:
   A.
Production Company intends to produce a theatrical motion picture (hereinafter
the "Picture") based upon that certain screenplay tentatively entitled "Blood: A
Butcher’s Tale," (hereinafter the "Screenplay") which Picture is intended for
initial theatrical exhibition.
   B.
Production Company wishes to utilize the services of Employee as a Producer in
connection with the production and delivery of the Picture upon the terms and
conditions herein contained.
   ACCORDINGLY,
IT IS AGREED AS FOLLOWS:
   1.
ENGAGEMENT: Subject to events of force majeure, default, or the disability or
death of Employee, Production Company hereby engages the services of Employee,
and Employee agrees to render non-exclusive services as an Associate Producer,
in connection with the production of the Picture upon the terms and conditions
herein contained. Subject to Production Company's final approval, Employee shall
supervise the testing of persons proposed for the cast, scouting for shooting
locations, assembling the crew, the supervision of the photography of the
Picture, assisting in the supervision of the editing, and sound mixing,
assisting in the selection of music, assisting in the supervision of the final
dubbing and scoring, the supervision of all other post-production requirements
of the Picture, the delivery of the final answer print and all other customary
delivery items to Production Company and its principal distributors, foreign and
domestic, and perform such other services as are reasonably required by
Production Company and are usually and customarily performed by producers in the
motion picture industry.
   2. TERM:
Employee shall render the services required of him as set forth in paragraph 1
hereof during the period commencing on January 1, 2007, and continuing
thereafter for such time as pre-production, principal photography, and customary
post-production and delivery of the Picture as required by Production
Company.
   It is
contemplated that principal photography of the Picture will commence
approximately on March 16, 2007 and, subject to extension for events beyond
Production Company's control and other events of force majeure, Employee's
exclusive services shall not be required beyond December 31, 2008, but he shall
nevertheless supervise the delivery of the Picture hereunder.
   3.
COMPENSATION: In consideration for all of the services to be rendered by
Employee hereunder and for all of the rights granted by Employee to Production
Company, and on condition that Employee is not in default hereunder, and subject
to the terms and conditions specified herein, Production Company agrees to pay
Employee, and Employee agrees to accept:
   (a) Fixed
Compensation:Employee
shall receive the amount of One Thousand Nine Hundred Seventy Six dollars
($1976.00)paid semi-monthly over the course of pre-production,
production, post-production, and delivery.
  Page
- 90
 (b)
Deferred Compensation: In addition to the Fixed Compensation payable under
Clause 3(a), subject to the production and release of the Picture, and subject
to the performance of all obligations of Employee, the Employee shall receive
and an amount equal to Twenty Five Thousand dollars ($25,000.00) in fifth (5th)
tier of the recoupment schedule (Exhibit A). The aforesaid payment shall be
deferred and paid pro-rata with all similar deferments.
  
  (c) Net
Profits Definition: All income actually received by Production Company from the
exploitation of the Picture after deducting all expenses and deferments incurred
by Production Company in connection with the financing (including all interest
and fees owed), pre-production, production, post-production, investor
recoupment, marketing, distribution and exploitation of the Picture; this shall
also include any attorneys' fees and expenses incurred by Production Company in
connection with the Picture.
   4.
SERVICES: At all times during the term of Employee's services hereunder,
Employee will promptly and faithfully comply with all of Production Company's
reasonable instructions, directions, requests, rules and regulations. Employee
will perform his services conscientiously and to the full limit of his talents
and capabilities when wherever reasonably required or desired by Production
Company and in accordance with Production Company's reasonable instructions and
directions in all matters, including those involving artistic taste and
judgment. Employee will perform such service as Production Company may
reasonably require of him, and as customarily and usually rendered by and
required of producers employed to produce low-budget theatrical motion pictures
in the motion picture industry.
   Production
Company will provide Employee with a copy of the work print on DVD. Employee
agrees not to show this work print to any distributor or sales rep without
Production Company's prior written consent, and Employee will not show the work
print to anyone else without the prior consent of Production
Company.
   5.
CONTROL: Production Company shall have complete control of the production of the
Picture including, but not limited to, all artistic controls and the right to
cut, edit, add to, subtract from, arrange, rearrange, and revise the Picture in
any manner. Production Company shall not be obligated to make any actual use of
Employee's services or to produce or to release or to continue the distribution
or release of the Picture once released.
   7.
RIGHTS: In addition to Employee's services as a producer, Production Company
shall be entitled to and shall own all of the results and proceeds thereof
throughout the world in perpetuity (including, but not limited to, all rights
throughout the world of production, public performance, manufacture, television,
recordation, and reproduction by any art or method, whether now known or
hereafter devised, copyright, trademark and patent) whether such results and
proceeds consist of literary, dramatic, musical, motion picture, mechanical or
any other form of works, ideas, themes, compositions, creations, or products and
without obligation to pay any fees, royalties or other amounts except those
expressly provided for in this Agreement. Specifically, but without in any way
limiting the generality of the foregoing, Production Company shall own all
rights of every kind and character in and to any and all acts, poses, plays and
appearances of any and all kinds which Employee may write, suggest, direct or
produce during the term hereof (provided, however, that any assignment will not
reduce Production Company's obligations to Employee in regard to compensation
and credit). In the event that Production Company shall desire to secure
separate assignments of any of the foregoing, Employee agrees to execute them
upon Production Company's request therefore. All rights granted or agreed to be
granted to Production Company hereunder shall vest in Production Company
immediately and shall remain vested in Production Company and Production
Company's successors and assigns whether this Agreement expires in normal course
or whether Employee's engagement hereunder is sooner terminated for any cause or
reason. Production Company shall have the right to use and authorize others to
use the name, voice and likeness of Employee, and any results and proceeds of
his services hereunder, to advertise and publicize the Picture including, but
not limited to, the right to use the same in the credits of the Picture, in
trailers, in commercial tie-ups, and in all other forms and media of advertising
and publicity including merchandising, publications, records and commercial
advertising and publicity tie-ups derived from or relating to the
Picture.
  Page
- 91
  8.
REPRESENTATIONS, WARRANTIES & INDEMNITY:
   (a)
Employee represents and warrants that all material of every kind authored,
written, prepared, composed, and/or submitted by Employee hereunder for or to
Production Company shall be wholly original with him, and shall not infringe or
violate the right of privacy of, or constitute libel against, or violate any
copyright, common law right or any other right of any person, firm or
corporation. The foregoing warranties shall not apply to any material not
authored, written, prepared, composed or submitted by Employee, but shall apply
to all material, incidents and characterizations which Employee may add to or
incorporate in or cause to be added to or incorporated in such material.
Employee further represents and warrants that Employee is free to enter into
this Agreement and to render the required services hereunder and that Employee
is not subject to any obligations or disability which will or might interfere
with Employee's fully complying with this Agreement; that Employee has not made,
and will not make any grant or assignment which might interfere with the
complete enjoyment of the rights granted to Production Company hereunder; and
that Employee will not at any time render any services or do any acts which
shall derogate from the value of Employee's services rendered pursuant to this
Agreement or which shall interfere with the performance of any of Employee's
covenants or obligations pursuant to this Agreement. Employee hereby indemnifies
Production Company, its successors, assigns, licensees, officers and employees,
and hold it harmless from and against any and all liability, losses, damages and
expenses (including attorneys' fees) arising out of (i) the use of any materials
furnished by Employee for the Picture, or (ii) any breach by Employee of any
warranty or agreement made by Employee hereunder.
   (b)
Production Company represents and warrants that Production Company has the right
to enter into this Agreement, and to render the required obligations hereunder,
and that Production Company is not subject to any other obligations or
disabilities which will or might interfere with Production Company's fully
complying with this Agreement; that Production Company has not made, and will
not make any grant or assignment which might interfere with the complete
enjoyment of the compensation granted to Employee hereunder; that Production
Company has secured all necessary financing to make all payments hereunder, and
complete the Picture as budgeted; and that Production Company will not at any
time render any services or do any acts which shall derogate from the value of
Production Company's obligations pursuant to this Agreement, or which shall
interfere with the performance of any of Production Company's covenants or
obligations pursuant to this Agreement. Production Company hereby indemnifies
Employee and his successors and assigns, and holds them harmless from and
against any and all liability, losses, damages, and expenses (including
reasonable attorneys' fees) arising out of any breach by Production Company of
any warranty or agreement made by Production Company hereunder.
   9.
CREDIT: Provided that Employee shall fully and completely keep and perform all
of his obligations and agreements hereunder, and if the Picture has been
produced substantially with the use of Employee's services hereunder, Employee
shall receive a producing credit on the positive prints and/or tape for the
Picture in the main titles thereof, and in all paid advertisements (subject to
customary distributor exclusions). Employee's credit shall be in the same size
and prominence as all producers, and placed in all media in which his name
appears. Credit shall read "Produced by Michael George". If an attribution is
used; only company name may appear in print media. Credit on all prints will
appear in the main titles in second or third position from last credit in the
same size as the largest credit, other than film title or presentation credit
(which could include production company name). Nothing herein shall be deemed to
restrict Production Company from granting co-producer, associate producer,
executive producer or similar producer credits to others.
  Page
- 92
  No casual
or inadvertent failure to comply with the provisions of this paragraph or
failure of any third party to comply with same shall be deemed to be a breach of
this Agreement by Production Company. In the event of a failure or omission by
Production Company constituting a breach of its credit obligations under this
Agreement, Employee's rights shall be limited to the right, if any, to seek
damages at law, and Employee shall not have any right in such event to rescind
this Agreement or any of the rights granted to Production Company hereunder, or
to enjoin the distribution, exhibition, or other exploitation of the Picture or
the advertising or publicizing thereof. Production Company shall, however, upon
receipt of written notice of any such breach of its credit obligations, cure
such breach on a prospective basis on materials to be created in the
future.
   10.
CONTINGENCIES: If Employee shall become incapacitated or prevented from fully
performing his services hereunder by reason of illness, accident, or mental and
physical disability and/or if the production of the Picture is hampered or
interrupted or interfered with for any event or reason beyond the control of
Production Company or any other event of force majeure (hereinafter collectively
referred to as "incapacity"), Production Company shall have the right to suspend
Employee's services and the compensation payable to Employee during the
continuance of any such incapacity. In the event any such incapacity continues
for a period of seven (7) consecutive days or for an aggregate period of
twenty-one (21) days, Production Company shall have the right to terminate
Employee's engagement hereunder. In the event that Employee should fail, refuse
or neglect other than because of incapacity to perform any of his required
services hereunder, Production Company shall have the right at any time to
suspend Employee's services and the compensation payable to Employee during the
continuance of such default, and Production Company shall have the right at any
time to terminate Employee's engagement hereunder by reason of such
default.
   11. NO
RIGHT TO CONTRACT: Employee acknowledges and agrees that he has no right or
authority to and will not employ any person to serve in any capacity, nor
contract for the purchase or rental of any article or material, nor make any
commitment or agreement whereby Production Company shall be required to pay any
monies or other consideration or which shall otherwise obligate Production
Company, without Production Company's express prior written
consent.
   12.
ASSIGNMENT: Production Company may transfer and assign this Agreement or all or
any of its rights hereunder to any person, firm or corporation, but no such
assignment or transfer shall relieve Production Company of its executory
obligations hereunder. This Agreement shall inure to the benefit of Production
Company's successors, licensees and assigns. Employee shall not assign or
transfer this Agreement, or any of his rights or obligations hereunder, it being
understood that the obligations and duties of Employee are personal to Employee,
and any purported assignment shall be void. Employee may, however, assign his
right to receive any monies hereunder.
   13.
LIMITATION OF REMEDY: All rights assigned by this Agreement shall be irrevocable
under all or any circumstances and shall not be subject to reversion,
rescission, termination or injunction. Employee agrees that he shall not have
the right to enjoin the exhibition, distribution or exploitation of any motion
picture produced hereunder or to enjoin, rescind or terminate any rights granted
to Production Company hereunder. Employee further agrees that Employee's sole
remedy in the event of any default by Production Company hereunder, including
the failure by Production Company to pay Employee any consideration payable to
Employee pursuant hereto, or to accord Employee credit (to the extent that
Production Company is obligated to accord Employee such credit) pursuant hereto,
shall be an action at law for damages and/or for an accounting (if applicable).
At all times, the Production Company shall have all rights and remedies which it
has at law or in equity, pursuant hereto or otherwise.
  Page
- 93
  14.
NOTICES: All notices or payments which Production Company may be required to
give or make to Employee hereunder may be delivered personally or sent by
certified or registered mail or telegraph, or by email to PO Box 30576 - 4567
Lougheed Hwy, Burnaby, BC V5C 6J5. Email wanderingbuffalo@gmail.com
   All
notices which Employee may wish to give to Production Company hereunder may be
delivered personally or sent by certified or registered mail or telegraph, or
fax, to Production Company at 534 Cambie Street, Suite 7, Vancouver, BC, V6B
2N7. Fax 604-633-2703. The date of delivery, or attempted delivery, as the case
may be, of any notice or payment hereunder shall be deemed to be the date of
service of such notice or payment.
   15.
SECTION HEADINGS: The headings of paragraphs, sections or other subdivisions of
this Agreement are for convenience in reference only. They will not be used in
any way to govern, limit, modify, construe or otherwise be given any legal
effect.
  16.
GOVERNING LAW / ARBITRATION / REMEDIES  This agreement will be deemed to
have been executed and delivered in Vancouver, British Columbia, Canada, and the
rights and obligations of the Parties hereunder will be construed and enforced
in accordance with the laws of Canada, without regard to conflicts of law
principles thereof. The place of arbitration will be in Canada applying its then
current rules and the language of the arbitration will be in English. Judgment
upon the award rendered by the arbitrator may be entered into any court having
jurisdiction thereof. The prevailing party in any such arbitration will be
entitled to recover its reasonable attorneys’ fees and costs, in addition to the
award of the arbitrator.
  17.
ENTIRE AGREEMENT: This Agreement represents the entire understanding between the
parties hereto with respect to the subject matter hereof, and this Agreement
supersedes all previous representations, understandings or agreements, oral or
written, between the parties with respect to the subject matter hereof, and
cannot be modified except by written instrument signed by the parties hereto.
This Agreement shall be governed by and construed in accordance with the laws of
British Columbia, and the exclusive venue for resolution of any dispute arising
out of, or in connection with this Agreement shall be in Vancouver, British
Columbia.
  AGREED TO
AND ACCEPTED:
  
  /s/ Michael
George
 ______________________________
 Michael
George  "Employee"
  January
1, 2007
  
 AGREED TO
AND ACCEPTED:
 
 /s/ Mark Tuit
 ______________________________
 Mark Tuit
- CEO
 Pacific
Gold Entertainment, Inc. "Production Company"
 January
1, 2007
 
 AGREED TO
AND ACCEPTED:
 
  /s/ Ron Loudoun
 ______________________________
 Ron
Loudoun - CFO
 Pacific
Gold Entertainment, Inc. "Production Company"
 January
1, 2007





Page
- 94








Exhibit
4.13










Page
- 95


PRODUCER EMPLOYMENT
AGREEMENT
  THIS
AGREEMENT is made and entered into as of the January 1, 2007, by and between
Pacific Gold Entertainment, Inc., (hereinafter “Production Company”), and
Richard Powell (hereinafter “Employee”).
  This
Agreement is entered into with reference to the following facts:
 
 A.
Production Company intends to produce a theatrical motion picture (hereinafter
the “Picture”) based upon that certain screenplay tentatively entitled “ Blood:
A Butcher’s Tale,” (hereinafter the “Screenplay”) which Picture is intended for
initial theatrical exhibition.
 
 B.
Production Company wishes to utilize the services of Employee as an Associate
Producer in connection with the production and delivery of the Picture upon the
terms and conditions herein contained.
 
 ACCORDINGLY,
IT IS AGREED AS FOLLOWS:
 
 1.
ENGAGEMENT: Subject to events of force majeure, default, or the disability or
death of Employee, Production Company hereby engages the services of Employee,
and Employee agrees to render non-exclusive services as an Associate Producer,
in connection with the production of the Picture upon the terms and conditions
herein contained. Subject to Production Company’s final approval, Employee shall
supervise the testing of persons proposed for the cast, scouting for shooting
locations, assembling the crew, the supervision of the photography of the
Picture, assisting in the supervision of the editing, and sound mixing,
assisting in the selection of music, assisting in the supervision of the final
dubbing and scoring, the supervision of all other post-production requirements
of the Picture, the delivery of the final answer print and all other customary
delivery items to Production Company and its principal distributors, foreign and
domestic, and perform such other services as are reasonably required by
Production Company and are usually and customarily performed by producers in the
motion picture industry.
 
 2. TERM:
Employee shall render the services required of him as set forth in paragraph 1
hereof during the period commencing on January 1, 2007, and continuing
thereafter for such time as pre-production, principal photography, and customary
post-production and delivery of the Picture as required by Production
Company.
 It is
contemplated that principal photography of the Picture will commence
approximately on March 16, 2007 and, subject to extension for events beyond
Production Company’s control and other events of force majeure, Employee’s
exclusive services shall not be required beyond December 31, 2008, but he shall
nevertheless supervise the delivery of the Picture hereunder.
 
 3.
COMPENSATION: In consideration for all of the services to be rendered by
Employee hereunder and for all of the rights granted by Employee to Production
Company, and on condition that Employee is not in default hereunder, and subject
to the terms and conditions specified herein, Production Company agrees to pay
Employee, and Employee agrees to accept:
 
 (a) Fixed
Compensation:Employee
shall receive the amount of One Thousand Four Hundred Fifty Six dollars
($1,456.00)paid semi-monthly over the course of pre-production,
production and post-production.
 
 (b)
Deferred Compensation: In addition to the Fixed Compensation payable under
Clause 3(a), subject to the production and release of the Picture, and subject
to the performance of all obligations of Employee, the Employee shall receive
and an amount equal to Twenty Five Thousand dollars ($25,000.00) in fifth (5th)
tier of the recoupment schedule (Exhibit A). The aforesaid payment shall be
deferred and paid pro rata with all similar deferments.
 
 (c) Net
Profits Definition: All income actually received by Production Company from the
exploitation of the Picture after deducting all expenses and deferments incurred
by Production Company in connection with the financing (including all interest
and fees owed), pre-production, production, post-production, investor
recoupment, marketing, distribution and exploitation of the Picture; this shall
also include any attorneys’ fees and expenses incurred by Production Company in
connection with the Picture.
 
 Page
- 96
 4.
SERVICES: At all times during the term of Employee’s services hereunder,
Employee will promptly and faithfully comply with all of Production Company’s
reasonable instructions, directions, requests, rules and regulations. Employee
will perform his services conscientiously and to the full limit of his talents
and capabilities when wherever reasonably required or desired by Production
Company and in accordance with Production Company’s reasonable instructions and
directions in all matters, including those involving artistic taste and
judgment. Employee will perform such service as Production Company may
reasonably require of him, and as customarily and usually rendered by and
required of producers employed to produce low-budget theatrical motion pictures
in the motion picture industry.
 
 Production
Company will provide Employee with a copy of the work print on DVD. Employee
agrees not to show this work print to any distributor or sales rep without
Production Company’s prior written consent, and Employee will not show the work
print to anyone else without the prior consent of Production
Company.
 
 5.
CONTROL: Production Company shall have complete control of the production of the
Picture including, but not limited to, all artistic controls and the right to
cut, edit, add to, subtract from, arrange, rearrange, and revise the Picture in
any manner. Production Company shall not be obligated to make any actual use of
Employee’s services or to produce or to release or to continue the distribution
or release of the Picture once released.
 
 7.
RIGHTS: In addition to Employee’s services as a producer, Production Company
shall be entitled to and shall own all of the results and proceeds thereof
throughout the world in perpetuity (including, but not limited to, all rights
throughout the world of production, public performance, manufacture, television,
recordation, and reproduction by any art or method, whether now known or
hereafter devised, copyright, trademark and patent) whether such results and
proceeds consist of literary, dramatic, musical, motion picture, mechanical or
any other form of works, ideas, themes, compositions, creations, or products and
without obligation to pay any fees, royalties or other amounts except those
expressly provided for in this Agreement. Specifically, but without in any way
limiting the generality of the foregoing, Production Company shall own all
rights of every kind and character in and to any and all acts, poses, plays and
appearances of any and all kinds which Employee may write, suggest, direct or
produce during the term hereof (provided, however, that any assignment will not
reduce Production Company’s obligations to Employee in regard to compensation
and credit). In the event that Production Company shall desire to secure
separate assignments of any of the foregoing, Employee agrees to execute them
upon Production Company’s request therefore. All rights granted or agreed to be
granted to Production Company hereunder shall vest in Production Company
immediately and shall remain vested in Production Company and Production
Company’s successors and assigns whether this Agreement expires in normal course
or whether Employee’s engagement hereunder is sooner terminated for any cause or
reason. Production Company shall have the right to use and authorize others to
use the name, voice and likeness of Employee, and any results and proceeds of
his services hereunder, to advertise and publicize the Picture including, but
not limited to, the right to use the same in the credits of the Picture, in
trailers, in commercial tie-ups, and in all other forms and media of advertising
and publicity including merchandising, publications, records and commercial
advertising and publicity tie-ups derived from or relating to the
Picture.
 
 8.
REPRESENTATIONS, WARRANTIES & INDEMNITY:
 
 (a)
Employee represents and warrants that all material of every kind authored,
written, prepared, composed, and/or submitted by Employee hereunder for or to
Production Company shall be wholly original with him, and shall not infringe or
violate the right of privacy of, or constitute libel against, or violate any
copyright, common law right or any other right of any person, firm or
corporation. The foregoing warranties shall not apply to any material not
authored, written, prepared, composed or submitted by Employee, but shall apply
to all material, incidents and characterizations which Employee may add to or
incorporate in or cause to be added to or incorporated in such material.
Employee further represents and warrants that Employee is free to enter into
this Agreement and to render the required services hereunder and that Employee
is not subject to any obligations or disability which will or might interfere
with Employee’s fully complying with this Agreement; that Employee has not made,
and will not make any grant or assignment which might interfere with the
complete enjoyment of the rights granted to Production Company hereunder; and
that Employee will not at any time render any services or do any acts which
shall derogate from the value of Employee’s services rendered pursuant to this
Agreement or which shall interfere with the performance of any of Employee’s
covenants or obligations pursuant to this Agreement. Employee hereby indemnifies
Production Company, its successors, assigns, licensees, officers and employees,
and hold it harmless from and against any and all liability, losses, damages and
expenses (including attorneys’ fees) arising out of (i) the use of any materials
furnished by Employee for the Picture, or (ii) any breach by Employee of any
warranty or agreement made by Employee hereunder.
 
 Page
- 97
 (b)
Production Company represents and warrants that Production Company has the right
to enter into this Agreement, and to render the required obligations hereunder,
and that Production Company is not subject to any other obligations or
disabilities which will or might interfere with Production Company’s fully
complying with this Agreement; that Production Company has not made, and will
not make any grant or assignment which might interfere with the complete
enjoyment of the compensation granted to Employee hereunder; that Production
Company has secured all necessary financing to make all payments hereunder, and
complete the Picture as budgeted; and that Production Company will not at any
time render any services or do any acts which shall derogate from the value of
Production Company’s obligations pursuant to this Agreement, or which shall
interfere with the performance of any of Production Company’s covenants or
obligations pursuant to this Agreement. Production Company hereby indemnifies
Employee and his successors and assigns, and holds them harmless from and
against any and all liability, losses, damages, and expenses (including
reasonable attorneys’ fees) arising out of any breach by Production Company of
any warranty or agreement made by Production Company hereunder.
 
 9.
CREDIT: Provided that Employee shall fully and completely keep and perform all
of his obligations and agreements hereunder, and if the Picture has been
produced substantially with the use of Employee’s services hereunder, Employee
shall receive a producing credit on the positive prints and/or tape for the
Picture in the main titles thereof, and in all paid advertisements (subject to
customary distributor exclusions). Employee’s credit shall be in the same size
and prominence as all producers, and placed in all media in which his name
appears. Credit shall read “Associate Produced by Richard Powell” If an
attribution is used; only company name may appear in print media. Credit on all
prints will appear in the main titles in second or third position from last
credit in the same size as the largest credit, other than film title or
presentation credit (which could include production company name). Nothing
herein shall be deemed to restrict Production Company from granting co-producer,
associate producer, executive producer or similar producer credits to
others.
 No casual
or inadvertent failure to comply with the provisions of this paragraph or
failure of any third party to comply with same shall be deemed to be a breach of
this Agreement by Production Company. In the event of a failure or omission by
Production Company constituting a breach of its credit obligations under this
Agreement, Employee’s rights shall be limited to the right, if any, to seek
damages at law, and Employee shall not have any right in such event to rescind
this Agreement or any of the rights granted to Production Company hereunder, or
to enjoin the distribution, exhibition, or other exploitation of the Picture or
the advertising or publicizing thereof. Production Company shall, however, upon
receipt of written notice of any such breach of its credit obligations, cure
such breach on a prospective basis on materials to be created in the
future.
 
 10.
CONTINGENCIES: If Employee shall become incapacitated or prevented from fully
performing his services hereunder by reason of illness, accident, or mental and
physical disability and/or if the production of the Picture is hampered or
interrupted or interfered with for any event or reason beyond the control of
Production Company or any other event of force majeure (hereinafter collectively
referred to as “incapacity”), Production Company shall have the right to suspend
Employee’s services and the compensation payable to Employee during the
continuance of any such incapacity. In the event any such incapacity continues
for a period of seven (7) consecutive days or for an aggregate period of
twenty-one (21) days, Production Company shall have the right to terminate
Employee’s engagement hereunder. In the event that Employee should fail, refuse
or neglect other than because of incapacity to perform any of his required
services hereunder, Production Company shall have the right at any time to
suspend Employee’s services and the compensation payable to Employee during the
continuance of such default, and Production Company shall have the right at any
time to terminate Employee’s engagement hereunder by reason of such
default.
 
 Page
- 98
 11. NO
RIGHT TO CONTRACT: Employee acknowledges and agrees that he has no right or
authority to and will not employ any person to serve in any capacity, nor
contract for the purchase or rental of any article or material, nor make any
commitment or agreement whereby Production Company shall be required to pay any
monies or other consideration or which shall otherwise obligate Production
Company, without Production Company’s express prior written
consent.
 
 12.
ASSIGNMENT: Production Company may transfer and assign this Agreement or all or
any of its rights hereunder to any person, firm or corporation, but no such
assignment or transfer shall relieve Production Company of its executory
obligations hereunder. This Agreement shall inure to the benefit of Production
Company’s successors, licensees and assigns. Employee shall not assign or
transfer this Agreement, or any of his rights or obligations hereunder, it being
understood that the obligations and duties of Employee are personal to Employee,
and any purported assignment shall be void. Employee may, however, assign his
right to receive any monies hereunder.
 
 13.
LIMITATION OF REMEDY: All rights assigned by this Agreement shall be irrevocable
under all or any circumstances and shall not be subject to reversion,
rescission, termination or injunction. Employee agrees that he shall not have
the right to enjoin the exhibition, distribution or exploitation of any motion
picture produced hereunder or to enjoin, rescind or terminate any rights granted
to Production Company hereunder. Employee further agrees that Employee’s sole
remedy in the event of any default by Production Company hereunder, including
the failure by Production Company to pay Employee any consideration payable to
Employee pursuant hereto, or to accord Employee credit (to the extent that
Production Company is obligated to accord Employee such credit) pursuant hereto,
shall be an action at law for damages and/or for an accounting (if applicable).
At all times, the Production Company shall have all rights and remedies which it
has at law or in equity, pursuant hereto or otherwise.
 
 14.
NOTICES: All notices or payments which Production Company may be required to
give or make to Employee hereunder may be delivered personally or sent by
certified or registered mail or telegraph to 3087 Cypress Street, Vancouver, BC
V6J 4X1.
 
 All
notices which Employee may wish to give to Production Company hereunder may be
delivered personally or sent by certified or registered mail or telegraph, or
fax, to Production Company at 534 Cambie Street, Suite 7, Vancouver, BC, V6B
2N7. Fax 604-633-2703. The date of delivery, or attempted delivery, as the case
may be, of any notice or payment hereunder shall be deemed to be the date of
service of such notice or payment.
 
 15.
SECTION HEADINGS: The headings of paragraphs, sections or other subdivisions of
this Agreement are for convenience in reference only. They will not be used in
any way to govern, limit, modify, construe or otherwise be given any legal
effect.
 
 16.
GOVERNING LAW / ARBITRATION / REMEDIES  This agreement will be deemed to
have been executed and delivered in Vancouver, British Columbia, Canada, and the
rights and obligations of the Parties hereunder will be construed and enforced
in accordance with the laws of Canada, without regard to conflicts of law
principles thereof. The place of arbitration will be in Canada applying its then
current rules and the language of the arbitration will be in English. Judgment
upon the award rendered by the arbitrator may be entered into any court having
jurisdiction thereof. The prevailing party in any such arbitration will be
entitled to recover its reasonable attorneys’ fees and costs, in addition to the
award of the arbitrator.
 
 Page
- 99
 17.
ENTIRE AGREEMENT: This Agreement represents the entire understanding between the
parties hereto with respect to the subject matter hereof, and this Agreement
supersedes all previous representations, understandings or agreements, oral or
written, between the parties with respect to the subject matter hereof, and
cannot be modified except by written instrument signed by the parties hereto.
This Agreement shall be governed by and construed in accordance with the laws of
British Columbia, and the exclusive venue for resolution of any dispute arising
out of, or in connection with this Agreement shall be in Vancouver, British
Columbia.
 
 
 AGREED TO
AND ACCEPTED:
 
 /s/ Richard
Powell
 ______________________________
 Richard
Powell  “Employee”
 January
1, 2007
 
 
 AGREED TO
AND ACCEPTED:
 
 /s/ Ron Loudoun
 ______________________________
 Ron
Loudoun - CFO
 Pacific
Gold Entertainment, Inc. “Production Company”
 January
1, 2007
 
 
 AGREED TO
AND ACCEPTED:
 
 /s/ Michael
George
 ______________________________
 Michael
George - Producer
 Pacific
Gold Entertainment, Inc. “Production Company”
 January
1, 2007





Page
- 100








Exhibit
4.14








Page
- 101


VISUAL
EFFECTS AGREEMENT
  BETWEEN PACIFIC GOLD ENTERTAINMENT
INC.AND SKYWORK STUDIOS INC.
 FOR THE MOTION PICTURE "BLOOD – A
BUTCHERS TALE".
 
 This VISUAL EFFECTS
AGREEMENT is made and entered into as of January 26, 2007 (the
“Effective
Date”), by and between Pacific Gold Entertainment Inc. (“PGE”) and
Skywork Studios Inc. (“SWS”). Where applicable “PGE,”
and "SWS" will individually be referred to as the “Party” and collectively as the
“Parties”.
 
 RECITALS:
 
 WHEREAS,PGE is in the
business of writing and developing, recruiting talent for, producing and
post-producing for Feature and Long Form Films for Theatrical, Cable and Direct
to Video Distribution.
 
 WHEREAS,SWS is in the
business of supplying Visual and CGI effects for Feature and Long Form Films.
 
 NOW, THEREFORE, in
consideration of the above recitals and the commitments set forth herein, the
receipt and sufficiency of which are acknowledged, the Parties agree as
follows:
 
 This
agreement is entered into with reference to the following facts:
 
 A.PGE intends to produce a
theatrical motion picture (hereinafter the "Picture") based upon that
certain screenplay tentatively entitled “Blood – A Butchers Tale," (hereinafter
the "Screenplay") which the Picture
is intended for initial theatrical exhibition.
 
 B.SWS agrees to produce VFX
and CGI effects for the Picture at a cost of CDN$200,000 and CDN$150,000
deferred for the Picture upon the terms and conditions herein
contained.
 
 C.SWS agrees to deliver an H-D
picture negative of the final Picture when payment of the final CDN$17,000 is
made.
 
 D.SWS will provide an invoice
to PGE, which will be due no later than PGE’s submission of its CAVCO
application, for the amount of CDN$100,000, which will be filed with PGE’s CAVCO
application for Tax Credit refunds.
 
 ENGAGEMENT: PGE hereby engages
the VFX and CGI services of SWS, and SWS agrees to render services and assist in
performing such other services as are reasonably required by a VFX supervisor in
the motion picture industry.
 
 The Parties agree to assign the recoupment of any
proceeds from the Picture and the Screenplay to a third party company, which
will represent all of the contracts signed between the Parties and will disperse
all monies contractually owed to the Parties. The third party company will
charge a fee equal to 5% of all proceeds for the purpose of its administration
fees, not to exceed CDN$25,000 annually.
 
 Page
- 102
 In exchange for the above services
and arrangements, and compensation to SWS:
 
 Repayment of Investment:
 
 A prior-mutually agreed amount of CDN$150,000 will be
distributed in the following proportion:
  For providing said services, SWS will receive
CDN$150,000 in a deferred payment in a pro-rata, pari-passu arrangement with all
other third tier deferments as set out in Exhibit “A” attached hereto and
forming part of this agreement.
 
 Credits:
 
 All
credits will be complying with CAVCO rules to qualify as a Canadian Content
film: Credits will be mutually decided and agreed to prior to the commencement
of pre-production: The following is a potential scenario but must be mutually
agreed to by all parties.
 
 “Skywork Studios and or Ashish Mittal” will receive one
Cavco-approved “Producer” credit and one Visual Effects Supervisor credit.
 
 REPRESENTATIONS AND
WARRANTIES.
 
 PGE represents and warrants that, as of the
Effective Date,
 
 1.              PGE
hasthe authority and power to enter into this agreement.
 
 2.              PGE
has, or prior to closing, will have long-form financing documents, or if
earlier, at the commencement of Principal Photography, will have full
unencumbered right and title to the Picture and to the underlying rights
thereto, and PGE further agrees to indemnify and keep indemnified SWS in respect
thereof PGE.
 
 3.              PGE
will obtain an Industry standard policy of Errors and Omissions insurance as
part of the Picture’s budget, with limits of not less than CDN$5,000,000, which
will be in full force and effect for no less than three years from the date of
delivery.  SWS (and its licenses and assignees) will be additional insured
on this policy.
 
 SWS
represents and warrants that, as of the Effective Date, SWS has the authority
and power to enter into this agreement.
 
 CONFIDENTIALITY.  The
Parties acknowledge that Confidential Information (as defined below) is of great
value to the Parties. Accordingly, the Parties and its “Affiliates” agree not to
divulge to anyone, either during or after the term of this agreement, any
Confidential Information obtained or developed during the term of this
agreement. Upon the expiration or termination of this agreement, the both
Parties agree to deliver to each other all documents, papers, drawings,
tabulations, reports and similar documentation which are furnished by one
another or which were prepared in the performance of the services.
 Page
- 103
 Upon the
expiration or termination of this agreement, both Parties agree to make no
further use or utilization of any Confidential Information. “Confidential
Information” means information of the Parties, its agents or assigns, or
any person or business entity directly or indirectly controlled by or
controlling, or in which any of the aforesaid have at least a 50% interest,
which information is or has been disclosed to the Parties or known to the
Parties as a consequence of or through the performance of services for the other
Party, whether or not related to its duties for the other Party, including,
without limitation,information relating to political,
business and social contacts, business relationships and opportunities,
potential business opportunities and relationships, and other information
previously unknown to both Parties. Each Party agrees and warrants that it will
refrain from stealing or misappropriating any of the Confidential Information
gained through its relationship with each other, in any direct or indirect
manner. For purpose of this agreement, “Affiliates” will mean any
company directly or indirectly controlling, controlled by, or under common
control with a Party.
 
 NON-CIRCUMVENTION. Each Party
agrees and warrants that it will refrain from stealing or misappropriating any
of the Confidential Information gained through its relationship with the other
Party, in any direct or indirect manner. This includes most specifically bank
contacts, mailing concepts, advertising, promotional concepts, client referrals,
investigative report formats, information sources, computer formats disclosed by
the Parties to each other and the Parties agreeing not to solicit, serve or
cater to, or engage, assist, be interested in or connected with any other
persons or entities served by or related to the other Party, its contractors,
employees, agents and directors, or soliciting, serving or catering to or any
clients of the other Party disclosed to the Parties.
 
 GOVERNING
LAW/ARBITRATION/REMEDIES:
This agreement will be deemed to have been executed and delivered within the
Province of British Columbia, and the rights and obligations of the Parties
hereunder will be construed and enforced in accordance with, and governed by,
the laws of the Province of British Columbia, without regard to the conflicts of
law principles thereof. The place of arbitration will be in the Province of
British Columbia applying its then current rules and the language of the
arbitration will be in English. Judgment upon the award rendered by the
arbitrator may be entered into any court having jurisdiction thereof. The
prevailing party in any such arbitration will be entitled to recover its
reasonable attorneys’ fees and costs, in addition to the award of the
arbitrator.
 
 Page
- 104
 ASSIGNMENT. This agreement may
be assigned by PGE to any third parties. This agreement will be binding on, and
will inure to the benefit of, the Parties hereto and their respective legal
representatives, successors and assigns.
 
 
 IN WITNESS WHEREOF, the
Parties have executed this agreement as of the Effective Date.
 
 
 Pacific Gold Entertainment
Inc.
 
 /s/ Mark Tuit
 BY:
 Mark
Tuit - CEO
 
 /s/ Ron Loudoun
 BY:
 Ron
Loudoun - CFO
 
 
 Skywork Studios Inc.
 
 /s/ Ashish Mittal
 BY:
 Ashish
Mittal – President
  Page
- 105
 EXHIBIT
“A”
 
 Exhibit
“A” to that certain Visual Effects Agreement
 between
Pacific Gold Entertainment Inc. and Skywork Studios Inc.
 made as
of the 26th day
of January, 2007.
 
 (number
of pages including this one:  2)
  
  Recoupment
and Payment Tiers
  
  All
proceeds from the sale and distribution of “Blood:  A Butcher’s Tale”
will be deposited with a third party company to be named “Blood LLC”, or a
similar name to be agreed upon by the Parties.  Blood LLC will
disperse all monies owed to the Parties directly to the Parties pursuant to the
terms and agreements of this agreement and as per the tier structure for
recoupment and payments as set out below.  All payments will be made
on a pari-passu pro-rata basis among the Parties and their interest or payment
amount within each tier.
 
 
 Tier
1 – Initial Payment Tier
 
 Parties
              True
      Fiction FilmsTotal
      payment amount
              CDN$120,000
 
 
 Tier
2 – Second Payment Tier
 
 Parties
              Pathway
      Films Inc.Total
      payment amount
              CDN$500,000
      plus 15% simple interest  accruing since May 1,
    2007
 
 
  Tier
3 – Third Payment Tier
 
 Parties
              Pathway
      Films Inc.
              Skywork
      Studios Inc.Total
      payment amount
              CDN$140,000
              CDN$150,000
 
 
 Tier
4 – Fourth Payment Tier
 
 Parties
              Pacific
      Gold Entertainment Inc.
              Aaron
      Douglas
              RTG
      Productions
              Jennifer
      ScioleTotal
      payment interest
              84%
              5.0%
              10.0%
              1.0%
 
 Page
- 106
 
 Tier
5 – Fifth Payment Tier – Performance Bonuses (1)
 
 Parties
              Ron
      Loudoun
              Michael
      George
              Mark
      Tuit
              Richard
      PowellTotal
                Payment
                amount
              CDN$25,000
              CDN$25,000
              CDN$25,000
              CDN$25,000
 
 
 Tier
6 – Final Payment and Ownership Tier (2)
 
 Parties
              Pacific
      Gold Entertainment Inc.
              Aaron
      Douglas
              RTG
      Productions
              Jennifer
      ScioleTotal
      payment interest
              84%
              5.0%
              10.0%
              1.0%
 
 
 (1)  No
payments in Tier 5 will be made until Blood LLC has received and paid out an
aggregate CDN$3 million in net profits to the parties in the first four
tiers.
 
 (2)  No
      payments in Tier 6 will be made until the full amount of each payment has
      been made to each Party in Tier 1, Tier 2, Tier 3, Tier 4, and Tier
      5.








Page
- 107





Exhibit
4.15







Page
- 108











Page
- 109








Page
- 110







Page
- 111












Page
- 112







Page
- 113







Page
- 114







Page
- 115





Page
- 116








Exhibit
4.16







Page
- 117











Page
- 118








Page
- 119







Page
- 120








Page
- 121










Page
- 122









Page
- 123














Page
- 124








Exhibit
4.17









Page
- 125








Page
- 126











Page
- 127











Page
- 128











Page
- 129








Exhibit
4.18










Page
- 130





AMENDING
AGREEMENT
 
 ThisAMENDING AGREEMENT made as of
the 1st day
of April, 2007, to the Producer Employment Agreement made as of the 24th day
of March, 2007 (the “Original
Agreement”),
 
 BETWEEN:
 
 PACIFIC GOLD ENTERTAINMENT
      INC., a British Columbia company with a business office at #7 – 534
      Cambie Street, Vancouver, British Columbia, V6B
  2N7
 
 (“PGE Inc.”)
 
 AND:
 
 RESULT TECHNOLOGY GROUP,
      LLC, a Delaware limited liability company with a business office at
      526 Kingwood Drive, Suite 330, Kingwood, Texas,
  77339
 
 (“RTG LLC”)
 
 WITNESSES
THAT WHEREAS:
 
 A.
              By
      the Original Agreement made between the parties hereto PGE Inc. engaged
      the services of RTG LLC’s employee, Jennifer Sciole, to
      render non-exclusive services as a producer on the screenplay
      “Blood”;
 
 B.
              By
      an actor’s employment agreement dated March 24, 2007 between PGE Inc. and
      RTG LLC, relating to the services of Jennifer Sciole (the “Actor’s Agreement”), PGE
      Inc. engaged Jennifer Sciole as an actor in the screenplay
      “Blood”;
 
 C.
              The
      parties wish to amend the Original Agreement pursuant to the terms and
      conditions of this agreement;
 
 NOW THEREFORE THIS AGREEMENT
WITNESSES that in consideration of the premises, the covenants,
agreements and warranties hereinafter set forth, it is hereby agreed as
follows:
 
 1.
              The
      Original Agreement is hereby amended by deleting Clause 3(b) in its
      entirety and replacing it with the
following:
 
 “(b)  Deferred
      Compensation:  In addition to the Fixed Compensation payable
      under Clause 3(a), the Employee shall receive (1) an amount equal to
      US$5,000, in first position of all contingent deferments and (2) a number
      of restricted common shares in the capital of the Production Company equal
      to US$10,000 at US$0.25 per share for a total of 40,000 restricted common
      shares.  If the Production Company received additional funding
      for the Screenplay after March 31, 2007, through an equity investment,
      financing, sale, Telefilm, or any other source, the Production Company
      will immediately pay the deferred compensation mentioned in this paragraph
      to the Employee.”
 
 Page
- 131
 2.
              RTG
      LLC confirms that the compensation to be paid under the Actor’s Agreement
      consists only of the guaranteed compensation set out in Section 4(a) of
      the Actor’s Agreement and that there is no other compensation due or owing
      under the Actor’s Agreement.
 
 3.
              The
      Original Agreement shall henceforth be read and construed together with
      this Agreement, and the Original Agreement will remain in full force and
      effect.
 
 4.
              In
      the event of any inconsistencies between this agreement and the Original
      Agreement, this Agreement will
govern.
 
 5.
              All
      terms, conditions, covenants, agreements, benefits and obligations
      contained in the Original Agreement, as amended hereby, will be binding
      upon and enure to the benefit of the parties hereto and their respective
      successors and assigns.
 
 
 IN WITNESS WHEREOF this
Amending Agreement has been executed the day and year first above
written.
 
 
 The
Corporate Seal
of                                                                                              
)
 Pacific
GoldEntertainment
Inc.                                                                    
)
 was
hereunto affixed in the presence
of:                                                                )
 )
 Per:           /s/ Authorized
Signatory                                                                      
 )                                           (SEAL)
 )
 )
 Authorized
Signatory                                                                                              
)
 
 
 
 The
Corporate Seal
of                                                                                               )
 Result
technology group,
llc                                                                        )
 was
hereunto affixed in the presence
of:                                                                )
 )
 Per:           /s/ Authorized
Signatory                                                                       
)                                           (SEAL)
 )
 )
 Authorized
Signatory                                                                                               )














Page
- 132










Exhibit
4.19










Page
- 133





AMENDING
AGREEMENT
 
 ThisAMENDING AGREEMENT made as of
the 1st day
of April, 2007, to the Funding, Production and Distribution Agreement made as of
the 2nd day
of November, 2006 (the “Original
Agreement”),
 
 BETWEEN:
 
 PACIFIC GOLD ENTERTAINMENT
      INC., a British Columbia company with a business office at #7 – 534
      Cambie Street, Vancouver, British Columbia, V6B
  2N7
 
 (“PGE Inc.”)
 
 AND:
 
 RTG PRODUCTIONS, a
      limited liability company with a business office at 526 Kingwood Drive,
      Suite 330, Kingwood, Texas, 77339
 
 (“RTG”)
 
 WITNESSES
THAT WHEREAS:
 
 A.
                By
      the Original Agreement made between Pathway Films Inc. and RTG, Pathway
      Films Inc. engaged the services of RTG to render services as a producer on
      the screenplay “Blood”;
 
 B.
                By
      an assignment agreement made among Pathway Films Inc., PGE Inc. and RTG
      dated February 1, 2007, Pathway Films Inc. assigned all of its interest in
      the Original Agreement to PGE Inc. and RTG has consented to the
      assignment;
 
 C.
                The
      parties wish to amend the Original Agreement pursuant to the terms and
      conditions of this agreement;
 
 NOW THEREFORE THIS AGREEMENT
WITNESSES that in consideration of the premises, the covenants,
agreements and warranties hereinafter set forth, it is hereby agreed as
follows:
 
 1.
                The
      Original Agreement is hereby amended by deleting the “Producer Fees”
      clause in its entirety and replacing it with the
  following:
 
 “Producer
      Fees:
 
 Producers
      from RTG Productions will be paid $35,000 from the Producer
      budget.
 
 Page
- 134
 All
      Producer and Director fees will be drawn down in the following
      manner:
 
 $10,000:  producers
      fee cash flowed from prep through principal, 20% in prep, 60% in
      principal, 20% upon completion;
      $15,000.  Deferred.  Upon final delivery (of
      film):
 
 In
      addition to the producer fees payable, RTG will receive a number of
      restricted common shares in the capital of PGE Inc. equal to US$10,000 at
      US$0.25 per share for a total of 40,000 restricted common
      shares.”
 
 2.
                RTG
      confirms that it has received the 40,000 restricted common shares from PGE
      Inc.
 
 3.
                The
      Original Agreement will be read and construed together with this
      Agreement, and the Original Agreement will remain in full force and
      effect.
 
 4.
                In
      the event of any inconsistencies between this agreement and the Original
      Agreement, this Agreement will
govern.
 
 5.
                All
      terms, conditions, covenants, agreements, benefits and obligations
      contained in the Original Agreement, as amended hereby, will be binding
      upon and enure to the benefit of the parties hereto and their respective
      successors and assigns.
 
 
 IN WITNESS WHEREOF this
Amending Agreement has been executed the day and year first above
written.
   The
Corporate Seal
of                                                                                              
)
 Pacific
GoldEntertainment
Inc.                                                                    
)
 was
hereunto affixed in the presence
of:                                                                )
 )
 Per:           /s/ Authorized
Signatory                                                                      
 )                                           (SEAL)
 )
 )
 Authorized
Signatory                                                                                              
)
 
 
 
 The
Corporate Seal
of                                                                                               )
 RTG
Productions                                                                                            
)
 was
hereunto affixed in the presence
of:                                                                )
 )
 Per:           /s/ Authorized
Signatory                                                                       
)                                           (SEAL)
 )
 )
 Authorized
Signatory                                                                                               )








Page
- 135










Exhibit
4.20










Page
- 136








PRODUCERS
AGREEMENT
 BETWEEN
PATHWAY FILMS INC. AND
 PACIFIC
GOLD ENTERTAINMENT INC.
 
 This
Producers Agreement ("Agreement") is made and entered into as of May 1, 2007,
("Effective Date"), by Pathway Films Inc. (PF) and between Pacific Gold
Entertainment Inc. (PGE) Where applicable "PF" and "PGE" will individually be
referred to as the "Party" and collectively as the "Parties".
 
 RECITALS:
 
 WHEREAS,
PF is in the business of securing capital, for, Feature and Long Form Films for
Theatrical, Cable and Direct to Video Distribution.
 
 WHEREAS,
PGE is in the business of securing capital, writing and developing, recruiting
talent for, producing and post-producing for Feature and Long Form Films for
Theatrical, Cable and Direct to Video Distribution.
 
 NOW,
THEREFORE, in consideration of the above recitals and the commitments set forth
herein, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:
 
 
 PF and
PGE endeavor to equally produce, complete and aid in finding distribution for
"Blood A Butcher’s Tale"
(Working Title).
 
 In
exchange for producing services, compensation will be as follows:
 
 $500,000.00
CDN producer’s fee upon first tier recoupment on a pari-passu, pro-rata
basis.
 
 In
addition, 15% interest on the producer’s fee amount from May 1, 2007
accrued.
 
 There
will be no Film Equity included in this deal.
 
 Credits: Ron Loudoun of
Pathway Films Inc. is entitled to a full production credit as: Executive
Producer.
 
 REPRESENTATIONS AND
WARRANTIES.
 
 By "PF"
Pathway Films Inc.named represent and warrant that as of the Effective
Date, PF has the authority and power to enter into this Agreement.
 
 By
"PGE".Pacific Gold
Entertainment named represent and warrant that as of the Effective Date,
PGE has the authority and power to enter into this Agreement.
 
 Page
- 137
 CONFIDENTIALITY.
 
 The
Parties acknowledge that Confidential Information (as defined below) is of great
value to the Parties.  Accordingly, the Parties and its “Affiliates”
agree not to divulge to anyone, either during or after the term of this
Agreement, any Confidential Information obtained or developed during the term of
this Agreement.  Upon the expiration or termination of this Agreement,
the both parties agrees to deliver to each other all documents, papers,
drawings, tabulations, reports and similar documentation which are furnished by
one another or which were prepared in the performance of the
services.  Upon the expiration or termination of this Agreement, both
parties agree to make no further use or utilization of any Confidential
Information.   “Confidential
Information” means information of the Parties, its agents or assigns, or
any person or business entity directly or indirectly controlled by or
controlling, or in which any of the aforesaid have at least a 50% interest,
which information is or has been disclosed to the parties or known to the
parties as a consequence of or through the performance of services, whether or
not related to its duties under this Agreement, including, without limitation,
trade secrets, information relating to political, business and social contacts,
business relationships and opportunities, potential business opportunities and
relationships, and other information previously unknown to both
Parties.  Parties agrees and warrants that it shall refrain from
stealing or misappropriating any of the Confidential Information gained through
its relationship with each other, in any direct or indirect
manner.  For purpose of this Agreement, “Affiliates”
shall mean any company directly or indirectly controlling, controlled by, or
under common control with a Party.
 
 
 NON-CIRCUMVENTION.  Parties
agrees and warrants that it shall refrain from stealing or misappropriating any
of the Confidential Information gained through its relationship with the each
other, in any direct or indirect manner.  This includes most
specifically bank contacts, mailing concepts, advertising, promotional concepts,
client referrals, investigative report formats, information sources, computer
formats disclosed by the parties to each other and the parties agreeing not to
solicit, serve or cater to, or engage, assist, be interested in or connected
with any other persons or entities served by or related to the Parties, its
contractors, employees, agents and directors, or soliciting, serving or catering
to or any clients of the Parties.
 
 GOVERNING
LAW/ARBITRATION/REMEDIES:  This
Agreement shall be deemed to have been executed and delivered within the British
Columbia, and the rights and obligations of the Parties hereunder shall be
construed and enforced in accordance with, and governed by, the laws of the
British Columbia, without regard to the conflicts of law principles
thereof.  The place of arbitration shall be in the British Columbia
applying its then current rules and the language of the arbitration shall be in
English.  Judgment upon the award rendered by the arbitrator may be
entered into any court having jurisdiction thereof.  The prevailing
party in any such arbitration shall be entitled to recover its reasonable
attorneys’ fees and costs, in addition to the award of the
arbitrator.
  Page
- 138
 
 ASSIGNMENT.This
Agreement may not be assigned or delegated by the Parties to any third
parties.  This Agreement shall be binding on, and shall inure to the
benefit of, the parties hereto and their respective heirs, legal
representatives, successors and assigns.
 
 
 IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective
Date.  May 1, 2007
 
 Pacific
Gold Entertainment Inc.
 
 /s/ Mark Tuit
 By:
__________________________
 Mark Tuit
- President
 
 Pathway
Films Inc.
 
 /s/ Ron Loudoun
 By:
__________________________
 Ron
Loudoun - President





Page
- 139





Exhibit
4.21








Page
- 140





Pacific
Gold Entertainment Inc.
 Transfer
Agreement
 
 THIS
TRANSFER AGREEMENT, made and entered into as of June 21, 2007, by and between
Pacific Gold Entertainment Inc., having an office at  #7 – 534 Cambie
Street, Vancouver, British Columbia, V6B 2N7, Canada (“Red Blossom Entertainment
Inc.”) and Pathway Films., having an office at  #6 – 534 Cambie
Street, Vancouver, British Columbia, V6B 2N7, Canada (the”RBE”).
 
 1.           SELLER’S REPRESENTATIONS AND
WARRANTIES:
 
 (a)
              Sole
      Proprietor:  The Seller represents and warrants to PGE
      that the Seller is the sole and exclusive proprietor, throughout the world
      of that certain original material entitled “Bunny Tales” (the “Property”).
 
 (b)
              Facts:  The
      Seller represents and warrants to PGE that the following statements are
      true and correct in      all respects with
      respect to
said  material:
 
 (i)
              The
      Seller is the one of the owners of the
Property.
 (ii)
              The
      Property was registered for copyright in the name of” Bunny Tales”, under
      copyright registration number (Pending), in the Office of the United
      States Register of Copyrights, Washington,
D.C.
 
 No Motion
Picture or dramatic version of the  Property, or any part of it, has
been manufactured, produced, presented or authorized; no radio or television
development, presentation or program based on the  Property, or any
part of it, has been manufactured, produced, presented, broadcast or authorized;
and no written or oral agreements or commitments at all with any respect to
the  Property or with respect to any right therein, have previously
been made or entered by or on behalf of the Seller (except with respect to the
publication of the  Property as set forth above).
 
 (c)
              No Infringement or Violation of
      Third Party Rights:  The Seller represents and warrants
      to PGE that the Seller has not adapted the Property from any other ,
      dramatic or other material of any kind, nature or description, nor,
      excepting for material which is in the public domain, has the Seller
      copied or used in the Property the plot, scenes, sequence or story of any
      other , dramatic or other material; that the Property does not infringe
      upon any common law or statutory rights in any other , dramatic, or other
      material; that as far as the Seller has knowledge, no material in the
      Property is libelous or vocative of the right of privacy of any person and
      the full use of the rights in the Property which are covered by the within
      option would not violate any rights of any person, firm or corporation;
      and that the Property is not in the public domain in any country in the
      world where copyright protection is
available.
 
 (d)
              No Impairment of
      Rights:  The Seller represents and warrants to PGE that
      the Seller is the exclusive proprietor, throughout the world, of the
      rights in the Property, which are covered by the within option; that the
      Seller has not assigned, licensed nor in any manner encumbered, diminished
      or impaired these rights; that the Seller has not committed nor omitted to
      perform any act by which these rights could or will be encumbered,
      diminished or impaired; and that there is no outstanding claim or
      litigation pending against or involving the title, ownership and/or
      copyright in the Property, or in any part of it, or in the rights which
      are covered by the within option.  The Seller further represents
      and warrants that no attempt hereafter will be made to encumber, diminish
      or impair any of the rights herein granted and that all appropriate
      protections of such rights will continue to be maintained by the
      Seller.
 
 Without
limiting any other rights PGE may have in the  Property, the Seller
agrees that if there is any claim and/or litigation involving any breach or
alleged breach of any such representations and warranties of the Seller, the
option period granted hereunder and any periods within which PGE may, pursuant
to the provisions of Clause 3 hereof, extend the option, will automatically be
extended until no claim and/or litigation involving any breach or alleged breach
of any such representation and warranties of the Seller is outstanding, but in
any event not for a period more than one additional year.
 Page
- 141
 Any time
after the occurrence of such a claim and/or litigation until the expiration of
the option period, as extended, PGE may, besides any other rights and remedies
PGE may have in the Property, rescind this agreement and in such event, despite
anything else to the contrary contained herein, the Seller agrees to repay PGE
any monies paid by PGE to the Seller hereunder concerning the Property and any
reasonable amounts expended by PGE in developing or exploiting the
Property.  Without limiting the generality of the foregoing, the
Seller agrees that the Seller will not, any time during the option period,
exercise or authorize or permit the exercise by others of any of the rights
covered by the option or any of the rights reserved by the Seller under the
provisions of this contract which are not to be exercised or licensed to others
during any period therein specified.
 
 2.
              CONSIDERATION FOR
      OPTION:  In consideration of the payment to the Seller of
      the sum of $100,000. receipt of which is acknowledged and 24% of full
      ownership of the Property, the Seller agrees to and does give and grant to
      PGE the exclusive and irrevocable option to purchase from the Seller the
      rights in the  Property as described in Exhibit “A” for the
      total purchase price specified and payable as provided in Exhibit “A”,
      provided that any sums paid under this Clause 2 or any other provision of
      this agreement with respect to the option will be credited against the
      first sums payable on account of such purchase price.  If PGE
      fails to exercise this option, then the sums paid to the Seller hereunder
      with respect to the option will be and remain the sole property of the
      Seller.
 
 3.
              RESTRICTIONS:  During
      the Initial Option Period, the Seller will not exercise or otherwise use
      any of the rights herein granted to PGE and as more particularly described
      in Exhibit “A” hereof nor the rights reserved to the Seller pursuant to
      Clause 2 (Rights Reserved) of Exhibit “A”, nor will the Seller permit the
      use of nor will the Seller use any other right the Seller has reserved in
      a way that would in any manner or for any purpose unfairly compete with,
      interfere with or conflict with the full and unrestricted use of the
      rights herein granted to PGE and as described in Exhibit
    “A”.
 
 4.
              ASSIGNMENT:  This
      agreement and the rights granted hereunder may be assigned by PGE to any
      other person, firm or corporation without the consent of the Seller,
      provided the assignee accepts all the obligations of PGE under this
      agreement as a condition of the
assignment.
 
 5.
              FORCE
      MAJEURE:  “Force Majeure” means any fire, flood,
      earthquake or public disaster; strike, labor dispute or unrest; embargo,
      riot, war, insurrection or civil unrest; any act of God, any act of
      legally constituted authority; or any other cause beyond PGE’s control
      which would excuse PGE’s performance as a matter of law.  If
      because of Force Majeure, PGE’s performance hereunder is delayed or
      prevented, then the Initial Option period will be extended for the time of
      such delay or prevention.
 
 6.
              SECTION
      HEADINGS:  The headings of paragraphs, sections and other
      subdivisions of this agreement are for convenient reference only and they
      will not be used in any way to govern, limit, modify, construe this
      agreement or any part or provision of
it.
 
 7.
              ARBITRATION:  Any
      controversy or claim arising out of or in relation to this agreement or
      the validity, construction or performance of this agreement, or the breach
      thereof, will be resolved by arbitration in accordance with the rules and
      procedures of the American Film Marketing Association, as said rules may
      be amended from time to time with rights of discovery if requested from
      the arbitrator.  Such rules and procedures are incorporated and
      made a part of this agreement by reference.  If the American
      Film Marketing Association refuses to accept jurisdiction of such dispute,
      then the parties will arbitrate such matter before and in accordance with
      the rules of the Canadian Arbitration Association under its jurisdiction
      in Vancouver, British Columbia before a single arbitrator familiar with
      entertainment law.  The parties will have the right to engage in
      pre-hearing discovery in connection with such arbitration proceedings if
      approved by the arbitrator.  The parties hereto will abide by
      and perform any award rendered in any arbitration conducted pursuant
      hereto, that any court having jurisdiction thereof may issue a judgment
      based upon such award and that the prevailing party in such arbitration
      and/or confirmation proceeding will be entitled to recover its reasonable
      attorneys fees and expenses.  The arbitration award will be
      final, binding and
non-appealable.
 Page
- 142
 
 8.
              ENTIRE
      AGREEMENT:  This agreement, including the Exhibits
      attached hereto, contains the complete understanding and agreement between
      the parties with respect to the within subject matter, and supersedes all
      other agreements between the parties whether written or oral relating
      thereto, and may not be modified or amended except by written instrument
      executed by both of the parties hereto.  This agreement will in
      all respects be subject to the laws of the Province of British Columbia
      applicable to agreements executed and wholly performed within such
      Province.  All the rights, licenses, privileges and property
      herein granted to PGE are irrevocable and not subject to rescission,
      restraint, or injunction under any or all
  circumstances.
 
 IN
WITNESS WHEREOF, the parties hereto have signed this Transfer Agreement as of
the day and year first hereinabove written.
 
 Red
Blossom Entertainment Inc.
 
 Per:           /s/ Mark Tuit
 ___________________________________
 SELLER:  Mark
Tuit  (President)
 Date:
June 21, 2007
 
 
 
 Pacific Gold Entertainment
Inc.
 
 Per:           /s/ Ron Loudoun
 ___________________________________
 BUYER:  Ron
Loudoun (CFO)
 Date:
June 21, 2007
 
 
 
 Pacific
Gold Entertainment Inc.
 
 Per:           /s/ Mark Tuit
 ___________________________________
 BUYER:  Mark
Tuit (CEO)
 Date:
June 21, 2007





Page
- 143


Exhibit
4.22





Page
- 144





Transfer
Agreement
 
 THIS
TRANSFER AGREEMENT, made and entered into as of June 21, 2007, by and between
Pacific Gold Entertainment Inc., having an office at  #7 – 534 Cambie
Street, Vancouver, British Columbia, V6B 2N7, Canada (“PGE”) and Pathway Films Inc.
having an office at  #7 – 534 Cambie Street, Vancouver, British
Columbia, V6B 2N7, Canada (the”Seller”).
 
 1.           SELLER’S REPRESENTATIONS AND
WARRANTIES:
 
 (a)
              Sole
      Proprietor:  The Seller represents and warrants to PGE
      that the Seller is the sole and exclusive proprietor, throughout the world
      of that certain original material entitled “Bunny Tales” (the “Property”).
 
 (b)
              Facts:  The
      Seller represents and warrants to PGE that the following statements are
      true and correct in all respects with respect to
      said  material:
 
 (i)
              The
      Seller is one of the owners of the Property and has a 25% interest in the
      Property.
 
 (ii)
              The
      Property was registered for copyright in the name of” Bunny Tales”, under
      the Writer Guild  of America  #
  1167959
 
 No motion
picture or dramatic version of the  Property, or any part of it, has
been manufactured, produced, presented or authorized; no radio or television
development, presentation or program based on the  Property, or any
part of it, has been manufactured, produced, presented, broadcast or authorized;
and no written or oral agreements or commitments at all with any respect to
the  Property or with respect to any right therein, have previously
been made or entered by or on behalf of the Seller (except with respect to the
publication of the Property as set forth above).
 
 (c)
              No Infringement or Violation of
      Third Party Rights:  The Seller represents and warrants
      to PGE that the Seller has not adapted the Property from any other ,
      dramatic or other material of any kind, nature or description, nor,
      excepting for material which is in the public domain, has the Seller
      copied or used in the Property the plot, scenes, sequence or story of any
      other , dramatic or other material; that the Property does not infringe
      upon any common law or statutory rights in any other , dramatic, or other
      material; that as far as the Seller has knowledge, no material in the
      Property is libelous or vocative of the right of privacy of any person and
      the full use of the rights in the Property which are covered by the within
      purchase would not violate any rights of any person, firm or corporation;
      and that the Property is not in the public domain in any country in the
      world where copyright protection is
available.
 
 (d)
              No Impairment of
      Rights:  The Seller represents and warrants to PGE that
      the Seller is the exclusive proprietor, throughout the world, of its
      rights in the Property, which are covered by this agreement; that the
      Seller has not assigned, licensed nor in any manner encumbered, diminished
      or impaired these rights; that the Seller has not committed nor omitted to
      perform any act by which these rights could or will be encumbered,
      diminished or impaired; and that there is no outstanding claim or
      litigation pending against or involving the title, ownership and/or
      copyright in the Property, or in any part of it, or in its rights covered
      by this agreement.  The Seller further represents and warrants
      that no attempt hereafter will be made to encumber, diminish or impair any
      of the rights herein granted and that all appropriate protections of such
      rights will continue to be maintained by the
  Seller.
 
 2.
              CONSIDERATION FOR
      PURCHASE:  In consideration of the payment to the Seller
      of the sum of $100,000 and delivery of the 25% interest in the Property to
      PGE, the Seller agrees to sell to PGE and PGE agrees to purchase from the
      Seller, the rights in the Property for the total purchase price of
      $100,000.  The purchase price will be evidenced by a
      non-interest demand promissory note payable in favor of the Seller to be
      issued as of the day of this
agreement.
 
 3.
              RESTRICTIONS:  The
      Seller will not permit the use of nor will the Seller use any other right
      the Seller has reserved in a way that would in any manner or for any
      purpose unfairly compete with, interfere with or conflict with the full
      and unrestricted use of the rights granted to PGE in this
      agreement.
 
 
 
 Page
- 145
 
 
 4.
              ASSIGNMENT:  This
      agreement and the rights granted hereunder may be assigned by PGE to any
      other person, firm or corporation without the consent of the Seller,
      provided the assignee accepts all the obligations of PGE under this
      agreement as a condition of the
assignment.
 
 5.
              SECTION
      HEADINGS:  The headings of paragraphs, sections and other
      subdivisions of this agreement are for convenient reference only and they
      will not be used in any way to govern, limit, modify, or construe this
      agreement or any part or provision of
it.
 
 6.
              ARBITRATION:  Any
      controversy or claim arising out of or in relation to this agreement or
      the validity, construction or performance of this agreement, or the breach
      thereof, will be resolved by arbitration in accordance with the rules and
      procedures of the American Film Marketing Association, as said rules may
      be amended from time to time with rights of discovery if requested from
      the arbitrator.  Such rules and procedures are incorporated and
      made a part of this agreement by reference.  If the American
      Film Marketing Association refuses to accept jurisdiction of such dispute,
      then the parties will arbitrate such matter before and in accordance with
      the rules of the Canadian Arbitration Association under its jurisdiction
      in Vancouver, British Columbia before a single arbitrator familiar with
      entertainment law.  The parties will have the right to engage in
      pre-hearing discovery in connection with such arbitration proceedings if
      approved by the arbitrator.  The parties hereto will abide by
      and perform any award rendered in any arbitration conducted pursuant
      hereto, that any court having jurisdiction thereof may issue a judgment
      based upon such award and that the prevailing party in such arbitration
      and/or confirmation proceeding will be entitled to recover its reasonable
      attorneys fees and expenses.  The arbitration award will be
      final, binding and non-appealable.
 
 7.
              ENTIRE
      AGREEMENT:  This agreement contains the complete
      understanding and agreement between the parties with respect to the within
      subject matter, and supersedes all other agreements between the parties
      whether written or oral relating thereto, and may not be modified or
      amended except by written instrument executed by both of the parties
      hereto.  This agreement will in all respects be subject to the
      laws of the Province of British Columbia applicable to agreements executed
      and wholly performed within such Province.  All the rights,
      licenses, privileges and property herein granted to PGE are irrevocable
      and not subject to rescission, restraint, or injunction under any or all
      circumstances.
 
 IN
WITNESS WHEREOF, the parties hereto have signed this Transfer Agreement as of
the day and year first hereinabove written.
 
 
 Pacific Gold Entertainment
Inc.
 
 Per:  /s/ Mark Tuit
 ___________________________________
 BUYER:  Mark
Tuit (CEO)
 Date:
June 21, 2007
 
 
 
 Pathway
Films Inc.
 
 Per:  /s/ Ron Loudoun
 ___________________________________
 SELLER:  Ron
Loudoun (President)
 Date:
June 21, 2007














Page
- 146


Exhibit
4.23








Page
- 147


PRODUCERS
AGREEMENT
 BETWEEN
CAM WATT AND
 PACIFIC
GOLD ENTERTAINMENT INC.
 
 This
Producers Agreement ("Agreement") is made and entered into as of July 27, 2007,
("Effective Date"), by Cam Watt (CW) and between Pacific Gold Entertainment
(PGE) Where applicable "CW" and "PGE" will individually be referred to as the
"Party" and collectively as the "Parties".
 
 RECITALS:
 
 WHEREAS,
CW is in the business of securing capital, for, Feature and Long Form Films for
Theatrical, Cable and Direct to Video Distribution.
 
 WHEREAS,
PGE is in the business of securing capital, writing and developing, recruiting
talent for, producing and post-producing for Feature and Long Form Films for
Theatrical, Cable and Direct to Video Distribution.
 
 NOW,
THEREFORE, in consideration of the above recitals and the commitments set forth
herein, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:
 
 CW and
PGE endeavor to equally produce, complete and aid in finding distribution for "A
Premature Burial" (Working Title).
 
 Film
Investment Recoupment:
 
 Investors
will be in a first position, pari-passu proto-rata proportion and sequence, to
recoup original investment before any other parties will receive
profits.
 
 Cam
Watt investment      $50,000.00 CDN
 
 In
exchange for the above services, compensation will be as follows:
 
 Film Equity:Equity
will be distributed (in totality) in the following proportion:
 
 
 $50,000.00
CDN recoupment, first tier upon sale of A Premature Burial.
 
 15% interest of initial investment of
$50,000.00 CDN Due upon final sale.
 
 
 
 Credits: Cam Watt is entitled
to a full production credit as: Associate
Producer.
 
 Page
- 148
 
 REPRESENTATIONS AND
WARRANTIES.
 
 By ÒCW"
Cam Wattnamed represent and warrant that as of the Effective Date, the
Company has the authority and power to enter into this Agreement.
 
 By
"PGEÓ.Pacific Gold
Entertainment named represent and warrant that as of the Effective Date,
the Company has the authority and power to enter into this
Agreement.
 
 
 CONFIDENTIALITY.
 
 The
Parties acknowledge that Confidential Information (as defined below) is of great
value to the Parties.  Accordingly, the Parties and its “Affiliates”
agree not to divulge to anyone, either during or after the term of this
Agreement, any Confidential Information obtained or developed during the term of
this Agreement.  Upon the expiration or termination of this Agreement,
the both parties agrees to deliver to each other all documents, papers,
drawings, tabulations, reports and similar documentation which are furnished by
one another or which were prepared in the performance of the
Services.  Upon the expiration or termination of this Agreement, both
parties agree to make no further use or utilization of any Confidential
Information.   “Confidential
Information” means information of the Parties, its agents or assigns, or
any person or business entity directly or indirectly controlled by or
controlling, or in which any of the aforesaid have at least a 50% interest,
which information is or has been disclosed to the parties or known to the
parties as a consequence of or through the performance of Services for the
Company, whether or not related to its duties for the Company, including,
without limitation, “Trade Secrets” (as defined below), information relating to
political, business and social contacts, business relationships and
opportunities, potential business opportunities and relationships, and other
information previously unknown to both Parties.  Parties agrees and
warrants that it shall refrain from stealing or misappropriating any of the
Confidential Information gained through its relationship with each other, in any
direct or indirect manner.  For purpose of this Agreement, “Affiliates”
shall mean any company directly or indirectly controlling, controlled by, or
under common control with Client.
 
 
 NON-CIRCUMVENTION.  Parties
agrees and warrants that it shall refrain from stealing or misappropriating any
of the Confidential Information gained through its relationship with the each
other, in any direct or indirect manner.  This includes most
specifically bank contacts, mailing concepts, advertising, promotional concepts,
client referrals, investigative report formats, information sources, computer
formats disclosed by the parties to each other and the parties agreeing not to
solicit, serve or cater to, or engage, assist, be interested in or connected
with any other persons or entities served by or related to the Consultants, its
contractors, employees, agents and directors, or soliciting, serving or catering
to or any clients of the Consultants disclosed to the Parties.
 
 
 Page
- 149
 
 GOVERNING
LAW/ARBITRATION/REMEDIES:  This
Agreement shall be deemed to have been executed and delivered within the British
Columbia, and the rights and obligations of the Parties hereunder shall be
construed and enforced in accordance with, and governed by, the laws of the
British Columbia, without regard to the conflicts of law principles
thereof.  The place of arbitration shall be in the British Columbia
applying its then current rules and the language of the arbitration shall be in
English.  Judgment upon the award rendered by the arbitrator may be
entered into any court having jurisdiction thereof.  The prevailing
party in any such arbitration shall be entitled to recover its reasonable
attorneys’ fees and costs, in addition to the award of the
arbitrator.
  
 ASSIGNMENT.This
Agreement may not be assigned or delegated by the Parties to any third
parties.  This Agreement shall be binding on, and shall inure to the
benefit of, the parties hereto and their respective heirs, legal
representatives, successors and assigns.
 
 
 IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective
Date.
 
 /s/ Cam Watt
 By:
__________________________
 Cam
Watt
 Date:
 
 /s/ Mark Tuit
 By:
__________________________                                                                Pacific
Gold Entertainment
 Mark
Tuit
 Date:
 
 /s/ Ron Loudoun
 By:
__________________________                                                                Pacific
Gold Entertainment
 Ron
Loudoun
 Date:





Page
- 150


Exhibit
4.24








Page
- 151





FUNDING AND
PRODUCTION AGREEMENT
 FOR THE 3-D ANIMATED MOTION PICTURE
 "BUNNY
TALES"
 
 ThisFUNDING AND PRODUCTION
AGREEMENT is made and entered into as of July 17, 2006, ("Effective Date"), by Skywork
Studios Inc. ("Skywork"); Pathway Films Inc.
("Pathway"); and Red
Blossom Entertainment Inc. ("Red Blossom"); where
applicable. Skywork, Pathway, and Red Blossom will individually be referred to
as the "Party" and
collectively as the "Parties".
 
 WHEREAS:
 
 A.           Skywork
is in the business of securing capital, writing and developing, recruiting
talent for, producing and post-producing for Feature and Long Form Films for
Theatrical, Cable and Direct to Video Distribution.
 
 B.           Pathway
is in the business of securing capital, writing and developing, recruiting
talent for, producing and post-producing for Feature and Long Form Films for
Theatrical, Cable and Direct to Video Distribution.
 
 C.           Red
Blossom is in the business of securing capital, writing and developing,
recruiting talent for, producing and post-producing for Feature and Long Form
Films for Theatrical, Cable and Direct to Video Distribution.
 
 NOW THEREFORE, in
consideration of the above recitals and the commitments set forth herein, the
receipt and sufficiency of which are acknowledged, the Parties agree as
follows:
 
 1.           The
Partiesendeavor to
equally produce, complete and aid in finding distribution for "Bunny Tales".
 
 Film Investment Recoupment
 
 2.           Investors
will be in a second position, pari-passu proto-rata proportion and sequence, to
recoup original investment secondary to any other parties received profits.
 
 Skywork Studio Inc.
CDN$350,000
 
 Pathway Films Inc. CDN$100,000
 
 3.           All post investment
recoupment will be distributed in a pari-passu pro-ratasequence as set out in Exhibit “A” attached hereto and forming part
of this agreement.
 
 4.           All
Parties agree to assign the recoupment to a third party company, which will
represent all of the contracts signed between the Parties and
will disperse all monies contractually owed to the Parties.  The third
party company will charge a fee equal to 5% of all proceeds for the purpose of
its administration fees, not to exceed CDN$25,000 annually.
 
 Page
- 152
 
 5.           In exchange for the
above services, compensation will be as follows:
 
 Film Equity:Equity
will be distributed (in totality) in the following proportion:
 
 Skywork Studios Inc. 51 %
 Pathway Films Inc. 25 %
 Red Blossom Entertainment Inc. 24%
 
 Credits:  Davinder
      Mittal, Ashish Mittal, Ron Loudoun and Mark Tuit are each entitled to a
      full production credit.
 
 Representations and Warranties
 
 6.           Skyworkrepresents and warrants that as of the Effective Date it has
the authority and power to enter into this agreement.
 
 7.           Pathwayrepresents and warrants that as of the Effective Date it has
the authority and power to enter into this agreement.
 
 8.           Red
Blossom represents and warrants that as of the Effective Date it
has the authority and power to enter into this agreement.
 
 Confidentiality
 
 9.           The
Parties acknowledge that Confidential Information (as defined below) is of great
value to the Parties. Accordingly, the Parties and its “Affiliates” agree not to
divulge to anyone, either during or after the term of this agreement, any
Confidential Information obtained or developed during the term of this
agreement. Upon the expiration or termination of this agreement, the Parties
agrees to deliver to each other Party all documents, papers, drawings,
tabulations, reports and similar documentation which are furnished by one
another or which were prepared in the performance of the services. Upon the
expiration or termination of this agreement, the Parties agree to make no
further use or utilization of any Confidential Information.“Confidential
Information” means information of the Parties, their agents or assigns,
or any person or business entity directly or indirectly controlled by or
controlling any Party, or in which any of the aforesaid have at least a 50%
interest in the Party, which information is or has been disclosed to the Parties
or known to the parties as a consequence of or through the performance of
services, whether or not related to its duties for Party, including, without
limitation, information relating to political, business and social contacts,
business relationships and opportunities, potential business opportunities and
relationships, and other information previously unknown to the
Parties.  Each Party agrees and warrants that it will refrain from
stealing or misappropriating any of the Confidential Information gained through
its relationship with each other, in any direct or indirect
manner.  For purpose of this agreement,“Affiliates”will mean any
company directly or indirectly controlling, controlled by, or under common
control with, the Party.
 Non-circumvention
 
 Page
- 153
 10.           Each
Party agrees and warrants that it will refrain from stealing or misappropriating
any of the Confidential Information gained through its relationship with the
each other, in any direct or indirect manner. This includes most specifically
bank contacts, mailing concepts, advertising, promotional concepts, client
referrals, investigative report formats, information sources, computer formats
disclosed by the Parties to each other and the Parties agreeing not to solicit,
serve or cater to, or engage, assist, be interested in or connected with any
other persons or entities served by or related to the other Parties, their
contractors, employees, agents and directors, or soliciting, serving or catering
to or any clients of the other Parties  as disclosed to the Party, as the
case may be.
 
 Governing Law
/ Arbitration / Remedies
 
 11.           This
agreement will be deemed to have been executed and delivered within the British
Columbia, and the rights and obligations of the Parties hereunder will be
construed and enforced in accordance with, and governed by, the laws of the
British Columbia, without regard to the conflicts of law principles thereof. The
place of arbitration will be in the British Columbia applying its then current
rules and the language of the arbitration will be in English. Judgment upon the
award rendered by the arbitrator may be entered into any court having
jurisdiction thereof. The prevailing party in any such arbitration will be
entitled to recover its reasonable attorneys’ fees and costs, in addition to the
award of the arbitrator.
 
  IN
WITNESS WHEREOF, the Parties have executed this agreement as of the
Effective Date.
 
 
 Skywork Studios
Inc.
 
 Per:           /s/
Ashish Mittal
 
 Ashish Mittal - President
 
 
 Pathway Films Inc.
 
 Per:           /s/ Ron
Loudoun
 
 Ron
Loudoun - President
 
 
 Red
Blossom Entertainment Inc.
 
 Per:           /s/ Mark
Tuit
 
 Mark
Tuit - President
  Page
- 154
 EXHIBIT
“A”
 
 Exhibit
“A” to that certain Funding and Production Agreement
 among
Skywork Studios Inc., Pathway Films Inc., and Red Blossom Entertainment
Inc.
 made as
of the 17th day
of July, 2006.
 
 (number
of pages including this one:  1)
 
 
  Recoupment
and Payment Tiers
  
  All
proceeds from the sale and distribution of “Bunny Tales” will be deposited with
a third party company to be named “Bunny Tales LLC”, or a similar name to be
agreed upon by the Parties.  Bunny Tales LLC will disperse all monies
owed to the parties directly to the Parties pursuant to the terms and agreements
of this agreement and as per the tier structure for recoupment and payments as
set out below.  All payments will be made on a pari-passu pro-rata
basis among the Parties and their interest or payment amount within each
tier.
  
  Tier
1 – Initial Payment Tier
 
 Parties
              Skywork
      Studios Inc.
              Pathway
      Films Inc.Total
      payment amount
              CDN$350,000
              CDN$100,000
 
 
 Tier
2 – Final Payment and Ownership Tier
 
 Parties
              Skywork
      Studios Inc.
              Pathway
      Films Inc.
              Red
      Blossom Entertainment Inc.Total
      payment interest
              51%
              25%
              24%
 
 
 
 No
payments in Tier 2 will be made until the full amount of each payment has been
made to each Party in Tier 1.





Page
- 155


Exhibit
4.25








Page
- 156





FUNDING AND
PRODUCTION AGREEMENT
 FOR THE 3-D ANIMATED MOTION PICTURE
 "BUNNY
TALES"
 
 This FUNDING AND PRODUCTION
AGREEMENT is made and entered into as of November 12, 2007 (the “Effective
Date”),
  AMONG:
 
 SKYWORK
STUDIOS INC., a company registered in Canada having office at Unit #11 –
534 Cambie Street, Vancouver, BC V6B 2N7 and having its production studio at :
293/1 Madhuvan Society, Near Lakhubhai Estate, Vallabh Vidyanagar, Gujarat
(hereinafter referred to as “Skywork”) being represented by
Mr. Ashish Mittal as President;
 
 AND:
 
 PACIFIC GOLD ENTERTAINMENT
INC., a company registered in Canada having office at #6 – 534 Cambie
Street, Vancouver, BC V6B 2N7, (hereinafter referred as “PGE Inc.”) being represented
by Mr. Mark Tuit as CEO (Chief Executive Officer);
 
 AND:
 
 DAVAL RELEASING INC., a
company registered in Canada having office at #3 – 534 Cambie Street, Vancouver,
BC V6B 2N7, (hereinafter referred as “Daval”) being represented by
Mr. Ron Loudoun as President;
 
 WHEREAS:
 
 A.
              On
      July 17, 2006, Skywork, Pathway Films Inc. and Red Blossom Entertainment
      Inc. entered into the initial funding and production agreement for the
      animated motion picture named “Bunny Tales” setting out the parties’ film
      equity in “Bunny Tales”.
 
 B.
              On
      June 21, 2007, Pathway Films Inc. and Red Blossom Entertainment Inc.
      transferred each of their interest in “Bunny Tales” to PGE Inc. pursuant
      to the terms and conditions of a transfer
  agreement.
 
 C.           The
production of Bunny Tales is in an advanced stage of completion;
 
 D.
              Skywork,
      Daval and PGE Inc. seek to arrange funding contribution for the production
      of the movie.
 
 E.
              Skywork
      with the consent of PGE Inc. had to arrange for venture capital loan of
      CDN$50,000 from Daval;
 
 F.           Daval
has agreed to give the loan on conditions stipulated in this agreement:
 
 NOW
THEREFORE, this agreement witnesses that:
 
 Terms
of Loan
 
 1.           Daval
agrees to advance the production loan of CDN$50,000 at nil interest for the
purpose of funding the project “Bunny Tales”.
 
 Page
- 157
 
 2.           Daval
will have no responsibility for losses, if any suffered, in production and
distribution of “Bunny Tales”.
 
 Repayment of Loan Proceeds
 
 3.           Repayment
of loan proceeds will be paid out in a pari-passu pro-rata sequence as set out
in Exhibit “A” attached hereto and forming part of this agreement.
 
 4.All
parties agree to assign the repayment of loan proceeds and recoupment of
proceeds to a third party company, which will represent all of the contracts
signedbetween the parties and will disperse all monies
contractually owed to the parties.  The third party company will charge a
fee equal to 5% of all proceeds for the purpose of its administration fees, not to exceed CDN$25,000 annually.
 
 Governing
Law / Arbitration / Remedies
 
 5.           This
agreement will be deemed to have been executed and delivered in Vancouver,
British Columbia, Canada, and the rights and obligations of the parties
hereunder will be construed and enforced in accordance with the laws of Canada,
without regard to conflicts of law principles thereof. The place of arbitration
will be in Canada applying its then current rules and the language of the
arbitration will be in English. Judgment upon the award rendered by the
arbitrator may be entered into any court having jurisdiction thereof. The
prevailing party in any such arbitration will be entitled to recover its
reasonable attorneys’ fees and costs, in addition to the award of the
arbitrator.
 
 Assignment
 
 6.           This
agreement may be assigned or delegated by the Parties to any third parties. This
agreement will be binding on, and will incur to the benefit of, the Parties
hereto and their respective heirs, legal representatives, successors and
assigns.
 
 
 IN WITNESS
WHEREOF, the Parties have executed this agreement as of the effective
date.
 
 
 Skywork Studios Inc.
 
 Per:           /s/
Ashish Mittal
 
 Ashish
Mittal - President
 
 
 Pacific Gold Entertainment
Inc.
 
 Per:           /s/ Mark
Tuit
 
 Mark
Tuit - President
 
 
 Daval Releasing
Inc.
 
 Per:           /s/ Ron
Loudoun
 
 Ron
Loudoun - President
  Page
- 158
 EXHIBIT “A”
 
 Exhibit
“A” to that certain Funding and Production Agreement
 among
Skywork Studios Inc., Pacific Gold Entertainment Inc.,
 and Daval
Releasing Inc.
 made as
of the 12th day
of November, 2007.
 
 (number
of pages including this one:  1)
  
  Recoupment
and Payment Tiers
  
  All
proceeds from the sale and distribution of “Bunny Tales” will be deposited with
a third party company to be named “Bunny Tales LLC”, or a similar name to be
agreed upon by the Parties.  Bunny Tales LLC will disperse all monies
owed to the parties directly to the Parties pursuant to the terms and agreements
of this agreement and as per the tier structure for recoupment and payments as
set out below.  All payments will be made on a pari-passu pro-rata
basis among the Parties and their interest or payment amount within each
tier.
  
  Tier
1 – Initial Payment Tier
 
 Parties
              Skywork
      Studios Inc.
              Pacific
      Gold Entertainment Inc.Total
      payment amount
              CDN$350,000
              CDN$100,000
 
 
  Tier
2 – Second Payment Tier
 
 Parties
              Daval
      Releasing Inc.Total
      payment amount
              CDN$50,000
 
 
 Tier
3 – Final Payment and Ownership Tier
 
 Parties
              Skywork
      Studios Inc.
              Pacific
      Gold Entertainment Inc.Total
      payment interest
              51.0%
              49.0%
 
 
 
 No
payments in Tier 3 will be made until the full amount of each payment has been
made to each Party in Tier 1 and in Tier 2.


Page
- 159


Exhibit
4.26





Page
- 160





FUNDING AND
PRODUCTION AGREEMENT
 FOR THE 3-D ANIMATED MOTION PICTURE
 "BUNNY
TALES"
 
  ThisFUNDING AND
PRODUCTION AGREEMENTis
made and entered into as of January 26, 2008 (the "Effective
Date"),
  AMONG:
 
 SKYWORK
STUDIOS INC, a company registered in Canada having office at Unit #11 –
534 Cambie Street, Vancouver, BC V6B 2N7 and having its production studio at :
293/1 Madhuvan Society, Near Lakhubhai Estate, Vallabh Vidyanagar, Gujarat
(hereinafter referred to as “Skywork”) being represented by
Mr. Ashish Mittal as President;
 
 AND:
 
 PACIFIC GOLD
ENTERTAINMENT INC, a company registered in Canada having office at #6 –
534 Cambie Street, Vancouver, BC V6B 2N7, (hereinafter referred as “PGE Inc.”)
being represented by Mr. Mark Tuit as CEO (Chief Executive Officer);
 
 AND:
 
 MARIGOLD PAINTS PVT.
LTD., a private limited company incorporated in Gujarat, India having
registered office at C-1/10, GIDC Estate, Vallabh Vidyanagar – 388 120, Gujarat
State, India (hereinafter referred to as “MPPL”) being represented by
Managing Director of the company Mr. Davinder Kumar Mittal.
 
 (Skywork, PGE Inc. and
      MPPL will individually be referred to as the “Party” and collectively
      as the “Parties”.)
 
 WHEREAS:
 
 A.
              On
      July 17, 2006, Skywork, Pathway Films Inc. and Red Blossom Entertainment
      Inc. entered into the initial funding and production agreement for the
      animated motion picture named “Bunny Tales” setting out the parties’ film
      equity in “Bunny Tales”.
 
 B.
              On
      June 21, 2007, Pathway Films Inc. and Red Blossom Entertainment Inc.
      transferred each of their interest in “Bunny Tales” to PGE Inc. pursuant
      to the terms and conditions of a transfer
  agreement;
 
 C.
              On
      November 12, 2007, Skywork, PGE Inc. and Daval Releasing Inc. entered into
      a second funding and production agreement for the animated motion picture
      named “Bunny Tales” setting out the parties’ adjusted film equity in
      “Bunny Tales”.
 
 D.           The
production of “Bunny Tales” is in an advanced stage of completion.
 
 E.           Skywork
or PGE Inc. seeks to arrange funding contribution for the production of the
movie.
 
 Page
- 161
 F.
              Skywork,
      with the consent of PGE Inc., had to arrange for venture capital loan of
      CDN$75,000 from MPPL.
 
 G.           MPPL
has agreed to give the loan on conditions stipulated in this
agreement.
 
 NOW THEREFORE, this agreement
witnesses that:
 
 Terms
of Loan
 
 1.  MPPL
agrees to advance the venture capital loan of CDN$75,000 at 20% annual interest
and 5% share in the equity of the project “Bunny Tales”.
 
 2.  Each of Skywork and PGE
Inc. agree to transfer 2.5% of its interest in “Bunny Tales” to MPPL as
additional consideration for the advance of the venture capital
loan.
 
 3.MPPL will be first
tier recoupment in the funding arrangement outlined above; the equity shares
will therefore be deemed as under:
 
 Skywork                      48.5%
 PGE
Inc.                      46.5%
 MPPL                                5.0%
 
 4.           MPPL
will have no responsibility for losses, if any suffered, in production and
distribution of “Bunny Tales”, but will be eligible to dividends declared as per
its share in the equity.
 
 Repayment of Loan Proceeds
 
 5.           Repayment
of loan proceeds will be paid out in a pari-passu pro-rata sequence as set out
in Exhibit “A” attached hereto and forming part of this agreement.
 
 6.All
Parties agree to assign the repayment of loan proceeds and future recoupment of
proceeds to a third party company, which will represent all of the contracts
signedbetween the Parties and will disperse all monies
contractually owed to the Parties.  The third party company will charge a
fee equal to 5% of all proceeds for the purpose of its administration fees, not
to exceed CDN$25,000 annually.
 
 Governing Law / Arbitration / Remedies
 
 7.           This
agreement will be deemed to have been executed and delivered in Vancouver,
British Columbia, Canada, and the rights and obligations of the Parties
hereunder will be construed and enforced in accordance with the laws of Canada,
without regard to conflicts of law principles thereof. The place of arbitration
will be in Canada applying its then current rules and the language of the
arbitration will be in English. Judgment upon the award rendered by the
arbitrator may be entered into any court having jurisdiction thereof. The
prevailing party in any such arbitration will be entitled to recover its
reasonable attorneys’ fees and costs, in addition to the award of the
arbitrator.
 
 Page
- 162
 Assignment
 
 8.           This
agreement may be assigned or delegated by the Parties to any third parties. This
agreement will be binding on, and will incur to the benefit of, the Parties
hereto and their respective heirs, legal representatives, successors and
assigns.
 
 
 IN WITNESS WHEREOF, the
parties have executed this agreement as of the Effective Date.
 
 
 Skywork Studios Inc.
 
 Per:           /s/
Ashish Mittal
 
 Ashish Mittal - President
 
 
 Pacific Gold Entertainment
Inc.
 
 Per:           /s/ Mark
Tuit
 
 Mark
Tuit - President
 
 
 Marigold Paints Pvt.
Ltd.
 
 Per:           /s/
Davinder Kumar Mittal
 
 Davinder
Kumar Mittal - President
  Page
- 163
 EXHIBIT
“A”
 
 Exhibit
“A” to that certain Funding and Production Agreement
 among
Skywork Studios Inc., Pacific Gold Entertainment Inc.,
 and
Marigold Paints Pvt. Ltd.
 made as
of the 26th day
of January, 2008.
 
 (number
of pages including this one:  1)
  
  Recoupment
and Payment Tiers
  
  All
proceeds from the sale and distribution of “Bunny Tales” will be deposited with
a third party company to be named “Bunny Tales LLC”, or a similar name to be
agreed upon by the Parties.  Bunny Tales LLC will disperse all monies
owed to the parties directly to the Parties pursuant to the terms and agreements
of this agreement and as per the tier structure for recoupment and payments as
set out below.  All payments will be made on a pari-passu pro-rata
basis among the Parties and their interest or payment amount within each
tier.
  
  Tier
1 – Initial Payment Tier
 
 Parties
              Marigold
      Paints Pvt. Ltd.Total
      payment amount
              CDN$75,000
      plus 20% for simple interest on venture capital
  loan
 
 
  Tier
2 – Second Payment Tier
 
 Parties
              Skywork
      Studios Inc.
              Pacific
      Gold Entertainment Inc.Total
      payment amount
              CDN$350,000
              CDN$100,000
 
 
  Tier
3 – Third Payment Tier
 
 Parties
              Daval
      Releasing Inc.Total
      payment amount
              CDN$50,000
 
 
 Tier
4 – Final Payment and Ownership Tier
 
 Parties
              Skywork
      Studios Inc.
              Pacific
      Gold Entertainment Inc.
              Marigold
      Paints Pvt. Ltd.Total
      payment interest
              47.5%
              46.5%
              5.0%
 
 
 
 No
payments in Tier 4 will be made until the full amount of each payment has been
made to each Party in Tier 1, Tier 2, and Tier 3.


Page
- 164


Exhibit
4.27








Page
- 165





FUNDING,
PRODUCTION AND DISTRIBUTION AGREEMENT BETWEEN
 PACIFIC
GOLD ENTERTAINMENT INC. AND POWERUP STUDIOS FOR THE VIDEO GAME
 “BLOOD:
BUTCHERS BLOCK ".
 
 This Memorandum of Agreement
(“Agreement”) is made and entered into as of January 27, 2008 (“Effective
Date”), by and between PowerUp Studios (PS) and Pacific Gold Entertainment Inc
(“PGE”).  Where applicable, "PS” and "PGE" will individually be
referred to as the “Party” and collectively as the “Parties.
 
 RECITALS:
 
 WHEREAS, PGE
is in the business of securing capital, developing, producing for Feature and
Long Form Films for Theatrical, Cable and Direct to Video Distribution and the
production of Video Games.
 
 WHEREAS, PS
is in the business of writing and developing, recruiting talent for, producing
and post-producing for Long Form video games
 
 NOW,
THEREFORE, in consideration of the above recitals and the commitments set forth
herein, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:
 
 Based on
a general understanding and agreement between Pacific Gold Entertainment Inc.
and Power Up Studios with the right to secure funding to produce the long form
video game with the current working title “BLOOD: BUTCHERS BLOCK” and in
consideration of the rights granted by PGE to PS hereunder, PGE will provide up
to $250,000. in cash or other bankable considerations, distribution
opportunities, and talent procurement for the video game.
 
 Final
budget will be determined between all parties, and will not exceed 250,000.00
CDN
 
 Repayment
of Investment:
 
 For
providing said funds, PGE will be in the first position to recoup its funds used
to produce the video game.
 Following
that, the equity owners, Pacific Gold Entertainment 90% and Powerup Studios 10%,
will receive funds Pari Passau of the producer’s gross, of the entire game
equity.
 For the
purposes of calculating revenue from the sales of bundle packages containing
both the game and the film the revenue shall be split in half unless otherwise
agreed to in writing.
 
 
 Distribution
Arrangement:
 
 The
Territory:                       The
Universe
  Term
              25
      years
  Page
- 166
 Rights Granted:
   All media
( now known or hereafter) including, without limitations,  and other
devices, formats and methods whether or not  invented, and all
computer, electronic, internet and other media and rights of any kind, plus, all
ancillary rights including merchandising, commercial tie-ins, music publishing
and novelisation, audio, soundtrack, and publishing rights.
   Rating:
   
   Approvals: PGE and PS shall
mutually approve the production and delivery schedules with the Producers of
BLOOD: BUTCHERS BLOCK, also final delivery materials
   PS allows
PGE Inc. meaningful consideration in the sale of the video game to a domestic
distributor.  It is understood that final consideration shall be PGE,
based on the best financial offer.
  PGE shall
own all intellectual property of the “BLOOD: BUTCHERS BLOCK” video game and any
and all derivations thereof (including all trade name licenses and applications,
if any, related thereto).
  
   Delivery:
   In
accordance with PGE, standard delivery schedule to be supplied separately, the
receipt and approval of which by the Producer is a condition precedent to this
Agreement becoming effective.
  
 Credits
and Billing Block:
 
 All
Canadian credits will comply with CAVCO rules to qualify as a Canadian
Content:  Credits will be mutually decided and agreed to prior to the
commencement of pre-production: The following is a potential scenario but must
be mutually agreed to by all parties.
 
 
 “Power Up
Studios” will receive 3 “Executive Producer” Credits, and 2 Cavco-approved
“Producer” credits.
 
 “Pacific
Gold Entertainment Inc.” will receive 2 Executive Producer” Credits, and 2
Cavco-approved “Producer” credits.
 
 Conditions
Precedent:
 
 PS shall
provide PGE, upon signature of this agreement, an acceptable Chain of Title and
grant all rights free of any adverse rights, claims, security interests,
license, lawsuits, or other legal entanglement or encumbrances, or any other
agreements of any kind.  Further more proof of expenditures, cash
flows and detailed cash flow for completion of film are due upon final
delivery.
 
 Page
- 167
 REPRESENTATIONS
AND WARRANTIES.
  Warranties & Indemnity:
   Producer
warrants that it has, or prior to closing of long-form financing documents or,
if earlier, commencement of Principal Production, will have full unencumbered
right and title to the Video Game and to the underlying rights thereto, and
Producer further agrees to indemnify and keep indemnified Pacific Gold
Entertainment in respect thereof.  Pacific Gold Entertainment standard
indemnity terms shall apply
   Insurance
              Producer
      will obtain Industry standard policy of Errors and Omissions insurance as
      part of the game’s Budget, with limits of not less than $5,000,000, which
      shall be in full force and effect for no less than three (3) years from
      the date of Delivery.  PGE (and its licenses and assignees)
      shall be additional insured on this
policy.
   Accounting
      & AuditDaval releasing
      shall provide a Quarterly Statement of Accounts for the first three (3)
      years following first receipt of gross receipts, as well as quarterly
      distributor reports.  PS shall have the right to audit Daval
      releasing records (at PS’s cost).
  By “PS”
Power Up Studios, named represent and warrant that as of the Effective Date, the
Company has the authority and power to enter into this Agreement.
 
 
 By “PGE”
Pacific Gold Entertainment, named represent and warrant that as of the Effective
Date, the Company has the authority and power to enter into this
Agreement.
 
 CONFIDENTIALITY.  The
Parties acknowledge that Confidential Information (as defined below) is of great
value to the Parties.  Accordingly, the Parties and its “Affiliates”
agree not to divulge to anyone, either during or after the term of this
Agreement, any Confidential Information obtained or developed during the term of
this Agreement.  Upon the expiration or termination of this Agreement,
the both parties agrees to deliver to each other all documents, papers,
drawings, tabulations, reports and similar documentation which are furnished by
one another or which were prepared in the performance of the
Services.  Upon the expiration or termination of this Agreement, both
parties agree to make no further use or utilization of any Confidential
Information.   “Confidential Information” means information of
the Parties, its agents or assigns, or any person or business entity directly or
indirectly controlled by or controlling, or in which any of the aforesaid have
at least a 50% interest, which information is or has been disclosed to the
parties or known to the parties as a consequence of or through the performance
of Services for the Company, whether or not related to its duties for the
Company, including, without limitation, “Trade Secrets” (as defined below),
information relating to political, business and social contacts, business
relationships and opportunities, potential business opportunities and
relationships, and other information previously unknown to both
Parties.  Parties agrees and warrants that it shall refrain from
stealing or misappropriating any of the Confidential Information gained through
its relationship with each other, in any direct or indirect
manner.  For purpose of this Agreement, “Affiliates” shall mean any
company directly or indirectly controlling, controlled by, or under common
control with Client.
 
 Page
- 168
 NON-CIRCUMVENTION.  Parties
agrees and warrants that it shall refrain from stealing or misappropriating any
of the Confidential Information gained through its relationship with the each
other, in any direct or indirect manner.  This includes most
specifically bank contacts, mailing concepts, advertising, promotional concepts,
client referrals, investigative report formats, information sources, computer
formats disclosed by the parties to each other and the parties agreeing not to
solicit, serve or cater to, or engage, assist, be interested in or connected
with any other persons or entities served by or related to the Consultants, its
contractors, employees, agents and directors, or soliciting, serving or catering
to or any clients of the Consultants disclosed to the Parties.
 
 GOVERNING
LAW/ARBITRATION/REMEDIES:  This Agreement shall be deemed to
have been executed and delivered within the Province of British Columbia, and
the rights and obligations of the Parties hereunder shall be construed and
enforced in accordance with, and governed by, the laws of the Province of
British Columbia, without regard to the conflicts of law principles
thereof.  The place of arbitration shall be in the Province of British
Columbia applying its then current rules and the language of the arbitration
shall be in English.  Judgment upon the award rendered by the
arbitrator may be entered into any court having jurisdiction
thereof.  The prevailing party in any such arbitration shall be
entitled to recover its reasonable attorneys’ fees and costs, in addition to the
award of the arbitrator.
  
 ASSIGNMENT.  This
Agreement may be assigned by Pacific Gold Entertainment to any third
parties.  This Agreement shall be binding on, and shall inure to the
benefit of, the parties hereto and their respective heirs, legal
representatives, successors and assigns.
 
 
 IN WITNESS WHEREOF, the
Parties have executed this Agreement as of the Effective Date.
 
 
 By: /s/ Bren Lynne
 Bren
Lynne representative of
 Power Up
Studios Inc.
 Date:           January.
27, 2008
 
 
 By: /s/ Ron Loudoun
 Ron
Loudoun representative of
 Pacific
Gold Entertainment Inc.
 Date.
January 27, 2008





Page
- 169


Exhibit
4.28





Page
- 170





FUNDING,
PRODUCTION AND DISTRIBUTION AGREEMENT BETWEEN
 PACIFIC
GOLD ENTERTAINMENT INC. AND POWERUP STUDIOS FOR THE VIDEO GAME
 "
NOMBZ ".
 
 
 This Memorandum of Agreement
(“Agreement”) is made and entered into as of January 27, 2008 (“Effective
Date”), by and between PowerUp Studios (PS) and Pacific Gold Entertainment Inc
(“PGE”).  Where applicable, "PS” and "PGE" will individually be
referred to as the “Party” and collectively as the “Parties.
 
 RECITALS:
 
 WHEREAS, PGE
is in the business of securing capital, developing, producing for Feature and
Long Form Films for Theatrical, Cable and Direct to Video Distribution and the
production of Video Games.
 
 WHEREAS, PS
is in the business of writing and developing, recruiting talent for, producing
and post-producing for Long Form video games
 
 NOW,
THEREFORE, in consideration of the above recitals and the commitments set forth
herein, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:
 
 Based on
a general understanding and agreement between Pacific Gold Entertainment Inc.
and PowerUp Studios, with the right to secure funding to produce the long form
video game with the current working title “NOMBZ” and in consideration of the
rights granted by PGE to PS hereunder, PGE will provide up to $75,000. in cash
or other bankable considerations, distribution opportunities, and talent
procurement for the video game.
 
 Final
budget will be determined between all parties, and will not exceed 75,000.00
CDN
 
 Repayment
of Investment:
 
 For
providing said funds, PGE will be last money in and will be in the second
position to recoup its funds, after PS initial $75,000. Subsequently 2nd tier
equity owners receive Pari Passau with Pacific Gold Entertainment – 90% and
PowerUp Studios 10%.
 
 For
producing NOMBZ, PS will receive $75,000 first tier recoupment, after
distribution and replication costs.
 
 Distribution
Arrangement:
 
 The
Territory:        The
Universe
 
  Term:
              25
      years
  Page
- 171
 Rights Granted:
   All media
( now known or hereafter) including, without limitations,  and other
devices, formats and methods whether or not  invented, and all
computer, electronic, internet and other media and rights of any kind, plus, all
ancillary rights including merchandising, commercial tie-ins, music publishing
and novelisation, audio, soundtrack, and publishing rights.
   Distribution
Expenses:
   Daval
Releasing will prepare a detailed marketing budget, marketing plan and sales
estimates for approval and signed agreement by the Producer before expense is
dispersed.
  Domestic
Distribution: 25% net commission on sales, including pre-sales in North America
through Daval releasing.
 
 Foreign
Distribution: 25% net commission on sales, including pre-sales in the Territory
excluding North America through Daval releasing.
 
 In
consideration of a third party distributor or sales rep, the sales fees shall be
allocated and capped to the equivalent or equal to a standard 25% sales
fee.
  Rating:
   No more
restrictive than TEEN.
   Titles
ratedT (Teen) have
content that may be suitable for ages 13 and older. Titles in this category may
contain violence, suggestive themes, crude humour, minimal blood, simulated
gambling, and/or infrequent use of strong language
   Approvals:
   PGE and
PS shall mutually approve the production and delivery schedules with the
Producers of NOMBZ, also final delivery materials
   PS allows
PGE Inc. meaningful consideration in the sale of the video game to domestic and
international distributors.  It is understood that final consideration
shall be PGE, based on the best financial offer.
  PS shall
own all intellectual property of the “NOMBZ” video game and any and all
derivations thereof (including all trade name licenses and applications, if any,
related thereto).
 
 PS agrees
to distribute NOMBZ through the official website at: www.nombz.com at no
extra costs to PGE.
 Page
- 172
  Delivery:
   In
accordance with PGE, standard delivery schedule to be supplied separately, the
receipt and approval of which by the Producer is a condition precedent to this
Agreement becoming effective.
  
 Credits
and Billing Block:
 
 All
Canadian credits will comply with CAVCO rules to qualify as a Canadian
Content:  Credits will be mutually decided and agreed to prior to the
commencement of pre-production: The following is a potential scenario but must
be mutually agreed to by all parties.
 
 “Power Up
Studios” will receive 3 “Executive Producer” Credits, and 2 Cavco-approved
“Producer” credits.
 
 “Pacific
Gold Entertainment Inc.” will receive 2 Executive Producer” Credits, and 2
Cavco-approved “Producer” credits.
 
 REPRESENTATIONS
AND WARRANTIES.
  Warranties & Indemnity:
   Producer
warrants that it has, or prior to closing of long-form financing documents or,
if earlier, commencement of Principal Production, will have full unencumbered
right and title to the Video Game and to the underlying rights thereto, and
Producer further agrees to indemnify and keep indemnified Pacific Gold
Entertainment in respect thereof.  Pacific Gold Entertainment standard
indemnity terms shall apply:
   Insurance
              Producer
      will obtain Industry standard policy of Errors and Omissions insurance as
      part of the game’s Budget, with limits of not less than $5,000,000, which
      shall be in full force and effect for no less than three (3) years from
      the date of Delivery.  PGE (and its licenses and assignees)
      shall be additional insured on this
policy.
   Accounting
      & AuditDaval releasing
      shall provide a Quarterly Statement of Accounts for the first three (3)
      years following first receipt of gross receipts, as well as quarterly
      distributor reports.  PS shall have the right to audit Daval
      releasing records (at PS’s cost).
  By “PS”
Power Up Studios, named represent and warrant that as of the Effective Date, the
Company has the authority and power to enter into this Agreement.
 
 
 Page
- 173
 By “PGE”
Pacific Gold Entertainment, named represent and warrant that as of the Effective
Date, the Company has the authority and power to enter into this
Agreement.
 
 CONFIDENTIALITY.  The
Parties acknowledge that Confidential Information (as defined below) is of great
value to the Parties.  Accordingly, the Parties and its “Affiliates”
agree not to divulge to anyone, either during or after the term of this
Agreement, any Confidential Information obtained or developed during the term of
this Agreement.  Upon the expiration or termination of this Agreement,
the both parties agrees to deliver to each other all documents, papers,
drawings, tabulations, reports and similar documentation which are furnished by
one another or which were prepared in the performance of the
Services.  Upon the expiration or termination of this Agreement, both
parties agree to make no further use or utilization of any Confidential
Information.   “Confidential Information” means information of
the Parties, its agents or assigns, or any person or business entity directly or
indirectly controlled by or controlling, or in which any of the aforesaid have
at least a 50% interest, which information is or has been disclosed to the
parties or known to the parties as a consequence of or through the performance
of Services for the Company, whether or not related to its duties for the
Company, including, without limitation, “Trade Secrets” (as defined below),
information relating to political, business and social contacts, business
relationships and opportunities, potential business opportunities and
relationships, and other information previously unknown to both
Parties.  Parties agrees and warrants that it shall refrain from
stealing or misappropriating any of the Confidential Information gained through
its relationship with each other, in any direct or indirect
manner.  For purpose of this Agreement, “Affiliates” shall mean any
company directly or indirectly controlling, controlled by, or under common
control with Client.
 
 NON-CIRCUMVENTION.  Parties
agrees and warrants that it shall refrain from stealing or misappropriating any
of the Confidential Information gained through its relationship with the each
other, in any direct or indirect manner.  This includes most
specifically bank contacts, mailing concepts, advertising, promotional concepts,
client referrals, investigative report formats, information sources, computer
formats disclosed by the parties to each other and the parties agreeing not to
solicit, serve or cater to, or engage, assist, be interested in or connected
with any other persons or entities served by or related to the Consultants, its
contractors, employees, agents and directors, or soliciting, serving or catering
to or any clients of the Consultants disclosed to the Parties.
 
 GOVERNING
LAW/ARBITRATION/REMEDIES:  This
Agreement shall be deemed to have been executed and delivered within the
Province of British Columbia, and the rights and obligations of the Parties
hereunder shall be construed and enforced in accordance with, and governed by,
the laws of the Province of British Columbia, without regard to the conflicts of
law principles thereof.  The place of arbitration shall be in the
Province of British Columbia applying its then current rules and the language of
the arbitration shall be in English.  Judgment upon the award rendered
by the arbitrator may be entered into any court having jurisdiction
thereof.  The prevailing party in any such arbitration shall be
entitled to recover its reasonable attorneys’ fees and costs, in addition to the
award of the arbitrator.
  
 
 Page
- 174
 
 
 
 ASSIGNMENT.  This
Agreement may be assigned by Pacific Gold Entertainment to any third
parties.  This Agreement shall be binding on, and shall inure to the
benefit of, the parties hereto and their respective heirs, legal
representatives, successors and assigns.
 
 
 IN WITNESS WHEREOF, the
Parties have executed this Agreement as of the Effective Date.
 
 
 By: /s/ Bren Lynne
 Bren
Lynne representative of
 Power Up
Studios Inc.
 Date:           January.
31, 2008
 
 
 By: /s/ Ron Loudoun
 Ron
Loudoun representative of
 Pacific
Gold Entertainment Inc.
 Date.
January 31, 2008





Page
- 175


Exhibit
4.29





Page
- 176











Page
- 177








Page
- 178









Page
- 179







Page
- 180







Page
- 181










Page
- 182











Page
- 183


Exhibit
4.30





Page
- 184


DISTRIBUTION
AGREEMENT
 
 THIS AGREEMENTdated as of
February 20, 2009 (the “Agreement”).
 
 BETWEEN:
 
 PACIFIC
GOLD ENTERTAINMENT INC.,a corporation duly incorporated under the laws of the Province of British
Columbia ("PGE")
 
 (hereinafter
called the "Producer");
 
 OF THE FIRST PART
 
 -
and
 
 DAVAL RELEASING INC.,a
corporation duly incorporated under the laws of the Province of British
Columbia
 
 (hereinafter
called the "Distributor");
 
 OF THE SECOND PART
 
 WHEREASPGE has obtained the
rights to develop, finance, produce and exploit a feature film currently
entitled "BLOOD: A BUTCHER’S TALE" (the "Picture");
 
 AND WHEREASthe Producer
wishes to grant to the Distributor the right to exhibit, distribute and
otherwise exploit the Picture in the Territory for the Term (as those terms are
hereinafter defined) on the conditions set forth herein;
 
 AND WHEREASthe Distributor
wishes to exhibit, distribute and otherwise exploit the Picture in the Territory
for the Term, subject to the terms and conditions set forth herein;
 
 NOW THEREFOREin consideration
of the premises and the mutual covenants and agreements contained herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereby covenant and agree as
follows:
 
 ARTICLE
1
 INTERPRETATION
 
 l.l           Defined Terms. As used in this
Agreement, the following words and phrases shall have the respective meanings
ascribed thereto:
 
 Page
- 185
 (a)
              "Minimum Guarantee" means
      the minimum amount committed to producer which is conditional upon
      Producer satisfying all of its obligations hereunder, Daval agrees to pay
      One Hundred Thousand Canadian dollars ($100,000) as a minimum guarantee
      for the Film, recoupable in accordance with the terms, as more
      particularly set out in Article 8.1
herein;
 
 (b)
              "Agreement" means this
      distribution agreement, including the schedules hereto, and any and all
      amendments made by written agreement among the parties
    hereto;
 
 (c)
              "Ancillary Rights" means
      all merchandising rights, commercial tie-in rights, soundtrack album
      rights, interactive, multi-media and electronic rights, toys, home video
      rights, theme park and virtual reality-type entertainment rights and all
      other ancillary rights in and to the Picture and all characters,
      situations, objects or events depicted, described, portrayed or appearing
      therein in all media now or hereafter
known;
 
 (d)           "Budget" has the meaning
ascribed in Article 2.5 herein;
 
 (e)
              "Cash Flow Schedule"
      means the cash flow schedule for the Picture which is attached hereto as
      Schedule "B";
 
 (f)
              "Collateral" means all
      Distribution Rights in and to the Picture, and all proceeds and
      collections thereof, all guarantees and other security therefor, or any
      such instruments or chattel paper and the proceeds thereof', Producer's
      share of Net Receipts and all of Producer's books and records relating to
      Collateral;
 
 (g)
              "Delivery" means the
      receipt and acceptance by the Distributor of the Delivery
      Materials;
 
 (h)
              "Delivery Date" means on
      or about March 30, 2009, or such other date as may be mutually agreed to
      by the parties;
 
 (i)
              "Delivery Materials"
      means the delivery materials described in Schedule “A” hereto to be
      delivered to the Distributor;
 
 (j)           "Distribution Fee" has the
meaning ascribed in Article 8.4 herein;
 
 (k)
              "Distribution Rights"means the right to lease, license, distribute, sub-distribute and
      otherwise exploit the Picture, all as more particularly described in
      Article 2.1 herein;
 
 (1)
              "Future Productions"means all sequels, prequels, remakes or television movies based on
      or adapted for or in any way derived from the
  Picture;
 
 (m)
              "Gross Receipts"means
      all monies actually received by the Distributor or Distributor's parents,
      subsidiaries or affiliates or by any third party for the benefit of or at
      the direction of the Distributor derived from the exhibition, distribution
      and exploitation of the Picture or any rights therein or elements thereof
      in the Territory, or refundable advances and deposits until earned or
      forfeited. Without limiting the generality of the foregoing, Gross
      Receipts shall include any cable retransmission royalties from the
      exploitation of the Picture and proceeds of litigation with respect
      thereto.
 
 Page
- 186
 Notwithstanding
the foregoing, the parties acknowledge that Gross Receipts shall not include any
of the following:
 
 (i)any
      amounts collected by any author's rights organization, performing rights
      society or governmental agency which amounts are paid to authors,
      producers or distributors and which arise from royalties, compulsory
      license, cable re-transmission income, tax credits and/ or rebates,
      exhibition surcharges or the like, which sums, as between Producer and
      Distributor shall be Producer's
property;
 
 (ii)recoupable
      advances or security deposits until such time as the same are earned or
      forfeited, except if any such advances or deposits are
      non-returnable/non-recoupable advances or deposit, in which event such
      non-returnable/non-recoupable advances shall be credited to Gross Receipts
      at the time of receipt by
Distributor;
 
 (iii)
              any
      amounts collected and paid by Distributor as taxes or for payment of taxes
      such as admission, sales and value-added taxes, provided, however, that,
      to the extent any such monies are collected by Distributor and included in
      Gross Receipts because they have not been paid to the appropriate
      authorities as of the time Distributor renders an accounting statement to
      Producer hereunder, and such sums are subsequently paid to the appropriate
      authorities, such sums shall be deducted as Distribution
      Expenses.
 
 (n)
              "Incidental Rights"means, subject to the terms and conditions of this Agreement, the
      following rights:
 
 (i)
              To
      use the title or titles by which the Picture is or maybe known or
      identified and to change the title of the Picture, subject to obtaining
      proper legal clearance for any changes at Distributor's sole expense,
      subject to Producer's approval, such approval not to be unreasonably
      withheld.
 
 (ii)
              To
      permit, authorize and license others to exercise and sub-license all or
      any of Distributor's rights and licenses hereunder and to distribute,
      exhibit, advertise, publicize and exploit the Picture under any term or
      terms and in such manner as Distributor may deem proper or
      expedient.
 
 Page
- 187
 (iii)
              To
      make such dubbed or subtitled versions of the Picture and the trailer
      thereof, including but not limited to, cut-in, synchronized and
      superimposed versions thereof in any and all languages used in the
      Territory as Distributor may deem advisable and the right to use any such
      versions now in existence or hereafter prepared by Producer or any of its
      licensees.
 
 (iv)
              To
      permit commercial messages to be broadcast or telecast before, during and
      after exhibition of the Picture.
 
 (v)To
      use the name, service mark(s) and trademark(s) of Distributor or any of
      its subsidiaries on the positive prints of the Picture and in the trailer
      thereof and in all advertising and publicity relating thereto, in such
      manner, position, form and substance as Distributor may elect. Distributor
      shall also have the right to indicate on all positive prints of the
      Picture and in the trailer and in other advertising and publicity that it
      or one of its sub-distributors is the distributor of the Picture in such
      manner and position and by the use of such words and phrases as it shall
      determine.
 
 (vi)
              To
      make such changes, additions (including, but not limited to, narration),
      alterations, cuts, interpolations and eliminations as Distributor may
      require in order to adapt and to make the Picture suitable for exhibition
      in any and all parts of the Territory, to meet time segment requirements
      to television stations, to comply with the censorship requirements of any
      governmental body or to comply with any legal impediments to the
      exhibition of the Picture. Nothing herein shall be deemed to relieve
      Distributor from the warranties and representations made
      herein.
 
 (vii)
              To
      publicize, advertise and exploit the Picture throughout the Territory
      during the Term and to cause or permit others to do so, including without
      limitation, the exclusive right in the Territory in connection with, and
      for the purpose of advertising, publicizing and exploiting the Picture
      to:
 
 (a)
              publish
      and to license and authorize others to publish in any language used in the
      Territory and in such forms as Distributor may deem advisable synopses,
      summaries, resumes and stories of and excerpts [not to exceed seven
      thousand five hundred (7,500) words] from the Picture and from any
      literary or dramatic material included in the Picture or upon which the
      Picture is based, in newspapers, magazines, trade periodicals, booklets,
      pressbooks and any other periodicals and in any and all other types of
      advertising and publicity now known or hereafter created or devised, in
      any and all media;
 
 Page
- 188
 (b)
              broadcast
      by radio and television and to license and authorize others to so
      broadcast, without further financial consideration, in any language used
      in the Territory, the Picture or any parts or portions thereof, and any
      literary or dramatic material included in the Picture or upon which the
      Picture is based, and to use in conjunction therewith any other literary,
      dramatic or musical material;
 
 (viii)
              To
      cause trailers of the Picture to be made (should Distributor desire to
      make trailers) and prints thereof and of the Picture to be manufactured,
      exhibited and distributed by every means, method and device now or
      hereafter known. Producer shall be provided with a copy of all such
      trailers.
 
 (ix)
              To
      order and procure from Producer directly from any laboratory holding
      pre­print or other material (including any dubbed, titled, narrated or
      other versions thereof) of the Picture, at Distributor's cost, such number
      of release prints, sound recordings, pre-print material and any part or
      parts of any thereof as Distributor may, from time to time, require, in
      any and all sizes and gauges, for the exercise of its rights hereunder,
      and to cause the performances of such laboratory or other work (including
      but not limited to manufacture of dubbed, re-dubbed, titled, sub-titled,
      narrated and any and all language versions of the Picture used in the
      Territory). Producer will, as one of the items of delivery to be made
      pursuant to this Agreement, deliver to Distributor a statement setting
      forth the details of any and all pre-print materials relating to the
      Picture together with the name and address of the laboratories having
      possession thereof. Further, Producer will, as one of the delivery items
      hereunder, furnish to Distributor laboratory access agreements in a form
      satisfactory to Distributor signed by the laboratories having possession
      of said materials, and by Producer and by any other party whose consent
      may be necessary or required.
 
 (x)
              The
      right to use or exercise any and all rights which Producer may now or
      hereafter acquire and which Distributor may acquire to use the names,
      likeliness', voices and persona of all artists in connection with the
      advertising or exploitation of the Picture, including any commercial
      tie-ups. Distributor may license, sub-license and/or assign all or any
      part of the rights granted to Distributor under this Agreement to the
      sub-distributors, licensees or
sub-licensees.
 
 (xi)
              To
      assert, prosecute, handle and settle in any and all parts of the Territory
      all claims or actions or causes of action against any and all persons for
      the unauthorized or illegal use, copying, reproduction, release,
      distribution, exhibition or performance of the Picture or any part or
      versions thereof, or of the literary, dramatic or musical material upon
      which the Picture is based or which are used therein, or any part or
      version hereof, or for the enforcement or protection all or any rights
      herein granted or purported to be granted to Distributor together with
      full and complete authority and power of attorney in name of Producer or
      otherwise to do all or any of the foregoing and to execute, acknowledge,
      verify and deliver any and all consents, documents, releases or other
      papers or documents of any kind pertaining thereto or any part thereof in
      the name of or on behalf of
Producer.
 
 Page
- 189
 (xii)
              If
      the Picture has not been registered for copyright and if application for
      copyright can be properly be made, Distributor shall have the right, at
      its election (but not the obligation) to cause the Picture to be
      registered for copyright in Producer's name. Distributor shall be under no
      liability of any kind in the event there shall be failure to secure any
      such copyrights or the event of any defect in any such copyrights. The
      Picture or any material upon which it is based or which is contained
      therein or is used or synchronized therewith, is copyrighted in any part
      of the Territory, and the Term extends into any term of renewal of any
      such copyrights, the grant herein made shall continue for and during such
      term of renewal or extended copyright, and Distributor is hereby
      constituted and appointed attorney-in-fact of Producer to apply and obtain
      in the name of Producer, any such renewals or extensions of copyright, and
      to do all things and acts necessary or desirable in connection therewith,
      including, without limitation, the execution, acknowledgement, delivery
      and filing of any and all applications or assignments or other acts which
      Distributor may deem necessary or advisable to accomplish any of the
      foregoing. Nothing herein contained shall be deemed to require Distributor
      to apply for renewal of copyright or take any other action to comply with
      any statutory formality, it being understood that Distributor's right to
      do so is entirely discretionary.
 
 (xiii)
              The
      right to manufacture, distribute, license, sell or otherwise exploit
      characters, names and events appearing in or used in connection with the
      Picture.
 
 (xiv)
              The
      right to distribute and sell the Picture in all electronic media including
      all forms of computer assisted, optically driven or interactive media,
      including CD-ROM, CDI/DO, MMCD, DVD, DVI, 3DOor any similar
      media, including all rights to transmit the Picture on the internet and
      broadcast on the internet, subject to British Columbia Film’s Interim
      Internet Policy.
 
 (xv)
              The
      right to sell and/or license the Picture in the ancillary markets,
      including but not limited to in-flight airplanes, hotels, trains, ships,
      military installations, prisons, schools, colleges and other educational
      institutions.
 
 Page
- 190
 (xvi)
              The
      right to distribute and sell any soundtrack of the music composed or
      licensed to the Picture together with the synchronization and the
      performing rights in and to all music and musical compositions contained
      in the Picture for all purposes of exploitation of the Picture in a
      Territory for the Term.
 
 (o)
              "Rights"means an undivided
      100% ownership interest in all right, title and interest in and to the
      Picture;
 
 (p)"Term" means the term of
      license of this Agreement as established in Article 3.1 hereof;
      and
 
 (q)
              "Territory"As used in
      this Agreement, "Territory" shall mean Canada (i.e. the ten provinces, the
      Yukon, Northwest, and Nunavut territories of Canada, and any successor
      countries occupying in whole or in part the Geographic territory known as
      Canada as of the date of this Agreement), and the possessions and
      commonwealths, and ships and aircraft registered in and/or flying the flag
      of Canada, marine installations including oil rigs serviced from any
      jurisdiction comprising part of Canada as described above, military
      installations wherever situated at which armed forces of Canada are
      stationed, and any other governmental installations of Canada wherever
      situated throughout the universe..
 
 1.2Governing Law.This Agreement
shall be governed by, construed and performed in all respects in accordance with
the laws of the Province of British Columbia and the federal laws of Canada
applicable therein and the parties hereto attorn to the jurisdiction of the
courts of the Province of British Columbia . Notwithstanding the foregoing
choice of law, the parties hereto further agree that, in the event of insolvency
of the Producer, the rights and obligations of the parties hereto and this
Agreement shall be deemed an "executory contract" for the license of
"intellectual property", it being the intention of the parties that a trustee in
bankruptcy or receiver or similar agent on behalf of the Producer or its assets
shall not have the right to disaffirm this Agreement under the laws of Canada,
including the Bankruptcy and Insolvency Act and the Company Creditors
Arrangement Act.
 
 1.3Severability.Nothing
contained in this Agreement shall be construed so as to require the commission
of any act contrary to law, and if any provision of this Agreement is held to be
invalid or illegal under any material statute, law, ordinance, order or
regulation, in the jurisdiction, such provision shall be curtailed and limited
only to the extent necessary to bring it within the legal requirements of such
jurisdiction and such curtailment or limitation shall not affect the validity of
the remainder of this Agreement or any other provisions hereof in that
jurisdiction.
 
 
 Page
- 191
 
 1.4             Captions.Captions or
paragraph headings are used herein for convenience of reference only and shall
not constitute a part of this Agreement and shall not be utilized or referred to
in the construction or interpretation of this Agreement.
 
 1.5             Location.The parties
acknowledge that the location of the production of the Picture shall be in and
around Vancouver, British Columbia.
 
 
 ARTICLE
2
 GRANT OF
RIGHTS
 
 2.1             Grant.Subject to the
provisions of Article 13 herein, the Producer hereby grants to the Distributor
the sole and exclusive right, license and privilege to exhibit, rent, lease,
distribute, subdistribute, transmit, broadcast and otherwise exploit the Picture
or any part thereof for exhibition and broadcast of the Picture throughout the
Territory, in colour and/or black and white prints, and on tapes or any other
surface and the right to exploit the Incidental Rights (subject to British
Columbia Film’s Interim Internet Policy) and the Ancillary Rights in connection
therewith, and to license or grant rights to others to do so, in all manner and
in any media now known or hereinafter created, including without limitation,
theatrically, non-theatrically or by any media of distribution or transmission,
whether by over-the-air, satellite, cable or by any other broadcast or
telecommunications medium, including, without limitation, commercial on-line
services, by projection, radio, all forms of television (including without
limitation, free, pay, toll, cable, high-definition, digital television,
sustained subscription, sponsored and direct satellite broadcast) and all forms
of "pay-per-view" and "video-on-demand", in theatres, videotape, videodisc,
cassettes, cartridges, discs, CD-ROM, CDI/DO, MMCD, DVD, DVI, 3DO, and other
similar and dissimilar video devices, by direct satellite broadcast, high
definition, interactive and digital transmission and all rights derived
therefrom, all of which such rights shall be exploitable as provided herein by
all means, methods or processes, whether now known or hereafter devised and in
all gauges and sizes throughout the Territory, in any and all language versions
in which the Picture may become available in accordance with the terms hereof
(collectively, the "Distribution Rights") forthe Term.
 
 2.2             Production.The Producer shall
produce the Picture and make Delivery of the Delivery Materials to the
Distributor in accordance with the terms and conditions of this Agreement, and
any other distribution agreements or broadcast license agreements relating to
the exhibition, distribution and exploitation of the Picture and the Distributor
shall provide to the Producer copies of any further agreements entered into
after the date hereof.
 
 2.3Delivery.The Producer shall
complete the Picture and deliver the Delivery Materials, at Producer's sole cost
and expense, to the Distributor and/or at the Distributor's direction to such
sub-distributors as may be entitled to receive Delivery, not later than the
Delivery Date, subject only to delays caused by reason of Force
Majeure.
 
 2.4Credits.Distributor shall be
entitled to receive a presentation credit in a form as preferred by
Distributor.
 
 Page
- 192
 2.5             Budget.The Picture shall be
produced in strict accordance with the budget (the "Budget")presented to and
approved in writing by Distributor and by Producer, which Budget shall not be
less than the sum of $1,000,000 (CDN).  Producer shall be responsible
for all Budget overages.
 
 2.
6             Approval.Distributor, shall
have the right of approval of the director, the Budget, the lead performers, the
screenplay, the production schedule, the financing plan and any replacements
thereof with respect to the Picture and such other approval rights as Producer
shall grant and it is understood that such approval shall not be unreasonably
withheld and shall be exercised in a manner consistent with the approved
Budget.
 
 2.7             Inspection and Examination of
Material and Documents.Distributor shall have the right, not to be
unreasonably exercised, to inspect and examine the materials to be delivered
hereunder and to which access is given and to be given under this Agreement and
to examine all the schedules and documents to be delivered hereunder within
thirty (30) days after their Delivery. Wherein same is not complete, Producer
shall, within ten (10) business days of receiving written notice from
Distributor setting out such delivery failures, deliver to Distributor or afford
access to Distributor (where access to pre-print materials is to be provided)
such items and documents which it shall have failed to deliver and provide
prompt access to pre-print materials where access has not been secured.
Notwithstanding the aforementioned cure period, in circumstances where failure
to deliver the Delivery Materials materially affects Distributors'
sub-distribution agreements and upon written notice to Producer of these
material requirements, Distributor may deny Producer such cure period and
proceed with the remedies described in subparagraphs (a) or (b) below. If
delivery of all documents and schedules shall not be completed within the time,
manner and in accordance with the requirements of this Agreement or if complete
access to all pre-print materials is not secured within the time, manner and in
accordance with the requirements of this Agreement, Distributor (without
prejudice to any other right or remedy which may be available to it) may, but
shall not be obliged to: (a) itself supply at the cost of Producer, or require
Producer to promptly supply, such items or materials which Producer failed to
supply in the first instance, or (b) to deduct from the yet unpaid portion of
the Advance or from any and all monies theretofore paid by Distributor to effect
complete and proper delivery or access, or (c) to require Producer to refund any
and all monies theretofore paid to it until Producer shall effect complete and
proper delivery or access, or to (d) terminate this Agreement and all of the
obligations of Distributor hereunder, in which event, Producer will, upon
demand, pay to Distributor a sum equal to the aggregate of all payments to
Producer plus costs and expenditures incurred by Distributor. Acceptance of
incomplete delivery shall not be deemed to be a waiver of Distributor's right to
demand and require full delivery of complete schedules and documents and
complete access to pre-print materials as required by this
Agreement.
 
 
 
 Page
- 193
 
 
 
 
 ARTICLE
3
 TERM OF
LICENSE
 
 3.1           Term.  The Producer
hereby grants to Distributor the sole and exclusive right, licence and privilege
to distribute, license, exhibit and exploit the Picture throughout the Territory
as set out herein for a term (the "Term") of twenty-five (25)
years commencing from the date of Delivery. Furthermore, the Distributors shall
have the right to renew this Agreement for one (1) further term of twenty-five
(25) years for the Territory which renewal shall be automatic unless Distributor
gives written notice of its intent not to so renew at least thirty (30) days
prior to the expiry of the initial term or the first renewal
thereof.
 
 ARTICLE
4
 REPRESENTATIONS
AND WARRANTIES
 
 4.1           Producer's Representations and
Warranties.The Producer hereby represents and warrants to the
Distributor as follows, and acknowledges that the Distributor is relying upon
such representations and warranties in entering into this
Agreement:
 
 (a)
              Organization.The
      Producer is a corporation incorporated, organized and subsisting under the
      laws of the jurisdiction of its incorporation and is empowered to conduct
      its business in every jurisdiction in which it carries on
      business;
 
 (b)
              Authority.The Producer
      has the full right and power to enter into this Agreement and to grant,
      assign, transfer and convey the Distribution Rights to the Distributor in
      accordance with the terms set forth
herein;
 
 (c)
              No Other Assignment.The
      Producer has not been a party to any assignment, transfer or conveyance of
      the Distribution Rights or any part thereof to any party other than
      pursuant to this Agreement and the Producer is not presently a party to
      any agreements similar to this Agreement, in respect of the Territory,
      with any person whatsoever and the Producer is under no obligation that
      might interfere with the performance by the Producer of its obligations or
      the Distributors' rights hereunder or the grant of rights contained
      herein;
 
 (d)
              Due Execution and
      Enforceability.This Agreement has been duly executed and delivered
      by the Producer and constitutes a legal, valid and binding obligation of
      the Producer enforceable against it in accordance with its terms, subject
      to bankruptcy, insolvency and arrangement laws, given the parties'
      intention stated in Article 1.2 hereunder, as well as the laws generally
      affecting the enforceability of creditors' rights (other than those
      pertaining to fraudulent assignments and preferences) and the
      availability, in the discretion of a court of competent jurisdiction, of
      equitable remedies;
 
 (e)
              Ownership.The Producer
      owns all of the Rights with a good, valid and marketable title thereto and
      the Producer has the absolute right to grant the Distribution Rights to
      the extent transferred to the Distributor hereunder which shall be enjoyed
      by the Distributor free from any interruption or disturbance other than as
      expressly provided for herein;
 
 Page
- 194
 (f)
              No Infringement.To the
      best of Producer's knowledge and belief after reasonable inquiry, the
      Producer is not infringing or deemed to be infringing on the rights of any
      third party with respect to its dealings with the Distribution
      Rights;
 
 (g)
              Approval.The
      Distributor, uniquely through its representative, shall have the right to
      approve of the director (Mark Tuit is hereby pre-approved), the Budget (as
      defined below) and the lead actors (Aaron Douglas, Kim Coates, Emily
      Perkins, Christa Campbell, Jennifer Sciole etc. are hereby pre-approved),
      the screenplay (the version of the screenplay dated November 8, 2006
      written by Mark Tuit is hereby pre-approved) and any replacements thereof
      with respect to the Picture (collectively the "Approved Elements"),and it is understood that such approval is not to be unreasonably
      withheld;
 
 (h)
              Budget.The Picture
      shall have a Budget of no less than $1,000,000
  (CDN);
 
 (i)
              Distributor's Financing.The Distributor shall pay the Advance in accordance with the Cash
      Flow Schedule;
 
 (j)
              Production Requirements.The Picture shall be produced in accordance with the Budget and the
      Approved Elements;
 
 (k)
              Quality.The Picture
      shall be technically first-class and of not less than 90 minutes in
      running time, produced in the English language, in
  colour;
 
 (l)
              Principal Photography.
      Principal photography of the Picture shall commence on or about March 13,
      2007 and shall be completed and delivered to the Distributor by the
      Delivery Date, subject to Events of Force
  Majeure;
 
 (m)
              Costs. There will not be
      any rerun, reuse, residual or other fees or payments due or required to be
      paid (the "Residuals")by the Distributor in perpetuity of its exploitation of the Picture
      in the media permitted hereunder to any union, guild, artist, or any other
      person, firm or organization as a result of the Distributor's exercise of
      any of the rights granted hereunder other than to the screenwriter of the
      Picture and other than in respect of the possible theatrical use of the
      Picture in any part of the Territory, provided that the Distributor shall
      be responsible for any Residuals or other fees following the expiration of
      the UBCP Ultra-Low Budget Waiver which the Producer has obtained and for
      any residual payments due to the screenwriter of the Picture or as a
      result of the theatrical release of the Picture in any part of the
      Territory. In this regard, the Producer agrees that any such Residuals
      which shall be payable by the Distributor shall be at the applicable
      minimum rate required by any applicable
guilds;
 
 Page
- 195
 (n)
              Permission for Publicity.The Producer has obtained or will obtain all of the rights,
      permissions and licenses (other than non-dramatic music performance rights
      or licenses) required to enable to fully exploit the Distribution Rights
      granted hereunder, including without imitation the right to use the
      performers' names, likenesses and biographies to advertise and promote the
      Picture;
 
 (o)
              Copyright Notice.The
      main and end titles of the negative and preprint materials of the Picture
      shall contain a legally sufficient copyright notice, in the Producer's
      name, in the form and position authorized by the Universal Copyright
      Convention, the Berne Convention and the Buenos Aires Convention,
      including the symbol "©" ("c" in a circle) and the legend "All Rights
      Reserved" in close proximity to such
notice;
 
 (p)
              Music Rights.The
      synchronization rights in and to all music and musical compositions
      contained in the Picture and, if any pre-recorded music is contained in
      the Picture, reproduction rights to any such pre-recorded music, are or
      will be owned or licensed by the
Producer;
 
 (q)
              Music Performance
      Rights. All performing rights in and to all music and musical
      compositions contained in the Picture will be licensed by SOCAN, or that
      such music will be in the public domain, or that the Producer will own or
      control all the performing rights in such music for all purposes of
      exhibition;
 
 (r)
              Credit Requirements.The
      Producer shall not agree with any third parties to any credit requirements
      or any other contractual restrictions which are outside of industry
      standards.
 
 4.2           Distributor's Representations and
Warranties.The Distributor hereby represents and warrants to the
Producer as follows, and acknowledges that the Producer is relying on such
representations and warranties in entering into this Agreement:
 
 (a)
              Organization.The
      Distributor is a corporation duly incorporated, organized and subsisting
      under the laws of the jurisdiction of its incorporation and is empowered
      to conduct its business in every jurisdiction in which it carries on
      business;
 
 (b)
              Corporate Power.The
      Distributor has the full corporate right and authority to enter into and
      to perform its obligations under this
Agreement;
 
 (c)
              Due Execution and
      Enforceability.This Agreement has been duly executed and delivered
      by the Distributor and constitutes a legal, valid and binding obligation
      of the Distributor enforceable against it in accordance with its terms,
      subject to bankruptcy, insolvency, and arrangement laws, given the
      parties' intention stated in Article 1.2 hereunder, as well as the laws
      generally affecting the enforceability of creditors' rights (other than
      those pertaining to fraudulent assignments and preferences) and the
      availability, in the discretion of a court of competent jurisdiction, of
      equitable remedies;
 
 Page
- 196
 (d)
              Credit Provisions.The
      Distributor will ensure that it will abide by the credit provisions
      provided by the Producer, same conforming with Article 4.1(s) hereinabove
      on the main and/or end titles of the Picture and in all advertising and
      publicity with respect to the Picture. The Distributor agrees not to
      remove the credit of the Producer or the copyright notice from the
      Picture. All claims, actions and causes of action arising as a result of
      the failure of the Producer to deliver such a statement to the Distributor
      or arising as a result of compliance with such statement by the
      Distributor or as a result of any error in any such notice shall be deemed
      to be claims, actions and causes of action with respect to which the
      Distributor is to be indemnified by the Producer. No casual or inadvertent
      failure by the Distributor or any of its sub-distributors or licensees to
      comply with the statement of credits shall constitute a breach of this
      Agreement. In the event of such breach, the Distributor agrees to use its
      best efforts to cure such breach prospectively. The Distributor agrees to
      require all sub-distributors and licensees to comply, in writing, with the
      credit provisions hereof, including without limitation, credits accorded
      to the Producer;
 
 (e)
              Credit Obligations.The
      Distributor shall comply with all credit obligations notified to the
      Distributor prior to the Delivery Date in respect of screen credits and
      promotional and advertising credits for the Picture. The Distributor
      agrees that it shall not have the right to edit the credits on the Picture
      nor the copyright notice therein.
 
 
 ARTICLE
5
 FUTURE
PRODUCTIONS
 
 5.1           The
Producer hereby grants to Distributor, the exclusive right of first
negotiation/last matching right to distribute all Future Productions in the
Territory. In the event that the Producer elects to produce a Future Production,
the Producer shall forthwith notify Distributor in writing and thereupon the
Producer and Distributor shall enter into exclusive  negotiations
whereby the parties shall negotiate in good faith to conclude an agreement
whereunder the Distributor shall acquire the Distribution Rights in and to such
Future Production. In the event that the Distributor waives the aforementioned
exclusive right of  negotiation, the Producer shall be free to enter
into an agreement with a third party in connection with the exploitation of the
Distribution Rights in and to such Future Production, provided that the
Distributor shall have the right to match the material terms and conditions of
any such agreement for a period of ten (10) business days from the date of
written receipt of such terms and conditions from the Producer, and during said
matching period the Producer shall not enter into any agreement with such third
party until Distributor has notified the Producer of its decision whether or not
to match. The Distributor shall not be required to match any terms that cannot
be met by one person as easily as another, such as employment of a particular
individual or the engagement of a particular sub-licensee or sales agent. If
after sixty (60) days the Producer has not entered into an agreement with a
third party, Distributor shall once again have an exclusive first right of
refusal.
 
 Page
- 197
 ARTICLE
6
 INDEMNIFICATION
 
 6.1           Indemnity.Each party (in the
appropriate context, the "Indemnifying Party")to this
Agreement agrees to hold the other party (the "Indemnified Party")harmless
and indemnifies the Indemnified Party from and against any loss, damage, cost,
and expense which the Indemnified Party may suffer or incur by reason of any
breach of any warranty, representation or agreement made by the Indemnifying
Party under this Agreement. In the event that a claim is made or legal
proceedings are instituted against the Indemnified Party by any third party
claiming the breach of any rights of such third party, which claim would if true
be contrary to the warranties and representations made by the Indemnifying Party
in this Agreement, such Indemnified Party shall within fifteen (15) days after
receiving notice of such claim or legal proceeding advise the Indemnifying Party
in writing of such claim. In the event of the foregoing, the Indemnified Party
shall have the right to:
 
 (a)
              cause
      the Indemnifying Party to conduct the defence of such claim or proceeding
      at its cost; or
 
 (b)
              defend
      such claim or proceeding, with all costs and expenses of such Indemnified
      Party to be borne by the Indemnifying
Party;
 
 provided,
however, that in no event may the Indemnified Party settle any claim or incur
any expense in connection with any such claim or proceeding without first
securing the Indemnifying Party's written approval and if such approval shall be
unreasonably withheld, the Indemnified Party shall have the right to conclude
the settlement of the claim or proceeding in question and the Indemnifying Party
shall be liable for the amount of such settlement.
 
 6.2           Carriage of Actions.The
parties to this Agreement may institute such proceedings against any third party
as may be necessary for the purposes of protecting the rights hereunder of the
other party (the "Non Litigious
Party")to this Agreement. The Non-Litigious Party will render at all
times such assistance in the way of evidence and the production of documents in
its possession as may be reasonably required to maintain such
action.
 
 ARTICLE
7
 DISTRIBUTION
POLICY
 
 7.1           General.Except as otherwise
expressly set forth in this Agreement as a restriction or limitation,
Distributor shall have complete, exclusive and unqualified discretion and
control as to the time, manner and terms of distribution, exhibition and
exploitation of the Picture throughout the Territory and during the Term,
separately or in connection with other motion pictures, in accordance with such
policies, terms and conditions and through such parties as Distributor in its
sole business judgment may determine proper or expedient and the decision of
Distributor in all such matters shall be final, binding and conclusive upon
Producer.
 
 Page
- 198
 7.2           Exploitation.The Distributor
agrees to negotiate and enter into distribution and/or licensing agreements
and/or exhibitor’s agreements in connection with the exhibition, distribution
and exploitation of the Picture on the most favourable terms reasonably
obtainable and shall employ all commercially reasonable efforts to maximize the
commercial benefits from the exploitation of the Picture.
 
 7.3           No Representation Regarding
Revenue.  Distributor has not made any express or implied
representation, warranty, guarantee or agreement as to the manner or extent of
any distribution or exploitation of the Picture, nor the amount of money to be
derived from the distribution, exhibition and exploitation of the Picture, nor
as to the maximum or minimum  amount of monies to be expended in
connection therewith, nor that there will be any sums payable to Producer
hereunder, nor that the Picture will be favourably received by exhibitors or by
the public, or will be distributed or exploited continuously.
 
 7.4           No Guarantee of Performances.Distributor does not guarantee the performance by any sub-distributor,
licensee or exhibitor of any contract regarding the distribution and
exploitation of the Picture. In no event shall Distributor incur any liability
based upon any claim by Producer that Distributor has failed to realize receipts
or revenue which should or could have been realized. Distributor may settle,
compromise, adjust, cancel, waive, give allowances to, not collect or not seek
any remedy for collection of any contracts, debts or sums due with respect to
the Picture, for any reason whatsoever. Distributor may, if it so elects,
refrain from releasing and/or distributing and/or exploiting the Picture, in any
territory or portion thereof for any reason whatsoever.
 
 7.5           Sub-Distributors.Distributor
may distribute or exploit the Picture either itself or through such other
parties, including affiliates of Distributor, as Distributor may, in its sole
discretion, determine. Distributor may license the Picture or the Distribution
Rights to any and all theatres or other agencies in which Distributor or its
affiliates may have an interest directly or indirectly upon such terms and
rentals as Distributor may deem fair and proper under the circumstances,
provided such terms are negotiated at arms length and in good
faith.
 
 ARTICLE
8
 GROSS
RECEIPTS
 
 8.1 Minimum
Guarantee:  Payment Terms: The Minimum Guarantee will be paid
to Producer according to the following payment schedule, within thirty days of
receipt of an invoice for each payment:
 
 (a)
              $50,000.00
      upon screening and acceptance of the director’s cut of the
      film;
 
 (b)
              $50,000.00
      upon approval by Distributor of the creative elements for the Picture
      described herein.
 
 Page
- 199
 8.2             Expenses. The Distributor
shall be entitled to deduct from Gross Receipts all actual and out-of-pocket
costs, expenses and charges paid and actually and reasonably incurred (the “Distribution Expenses”)by the Distributor or
its sub-agents or sub-distributors by reason of, in connection with or allocable
to the derivation of Gross Receipts. Such Distribution Expenses (all reasonably
incurred) shall include, among other things, the following:
 
 (a)
              Taxes. All taxes,
      imposts, duties, tariffs and governmental fees of any nature, however
      denominated or characterized, imposed by any taxing authority in any
      territory, directly or indirectly, on any receipts (irrespective of
      character or origin) derived from the exhibition, distribution and
      exploitation of the Picture, save and except for income or franchise
      taxes.
 
 (b)
              Collection Costs.All
      costs reasonably incurred in connection with the collection of any portion
      of the Gross Receipts, including reasonable fees of lawyers and
      auditors.
 
 (c)
              Costs of Prints and Other
      Materials.All costs incurred in the manufacture, preparation,
      duplication or delivery of positive prints of the Picture or positive film
      in any gauge, video or electronic tape recording, cassette, disc or other
      physical material or substance of any kind produced by means of any
      photographic, electrical, electronic, mechanical or other process or
      device now known or hereafter devised, on or with respect to which the
      Picture or any part thereof is printed, imprinted, recorded, reproduced,
      duplicated or otherwise preserved (the "Materials"), or any
      facility or similar quality designated by the Distributor to be utilized
      in connection with the Picture, including without limitation, the
      following:
 
 (i)
              Material Costs. All
      costs of manufacture of positive prints or other materials, including
      laboratory, labour, service, materials and facilities, and costs in
      connection therewith.
 
 (ii)
              Re-Editing Costs. All
      costs incurred to recur, re-edit, re-record, restore, remix and redub the
      Picture, including changes, eliminations and additions with respect to the
      Picture for any use of the Picture and conforming (voluntarily or
      involuntarily) the Picture to requirements of censorship, classification
      and rating by government or other community organizations or other
      persons, including exhibitors and religious and ethnic groups, and to the
      national and/or political regulations of any
  territory.
 
 (iii)
              Transportation and Inspection
      Costs. All transportation, shipping, packing, delivery and
      inspection charges on all positive prints or other
    materials.
 
 (iv)
              Foreign Version Costs.
      All costs incurred to make and deliver foreign language versions of the
      Picture.
 
 Page
- 200
 (d)
              Marketing and Advertising
      Costs. All reasonable costs incurred in marketing, advertising,
      promoting and exploiting Picture throughout the Territory, as applicable,
      including but not limited to premieres, screenings, television advertising
      and independent advertising agents' commissions and attending sales
      markets, allocated on a reasonable basis consistently for all productions
      in a group.
 
 (e)Administrative Costs.All costs or charges incurred in connection with administering
      sub-distribution and broadcast agreements up to an amount equal to five
      percent (5%) of Gross Receipts, whether such costs or charges are incurred
      directly by Distributor or charged by an affiliate of
      Distributor.
 
 (f)
              Miscellaneous Costs.All
      other costs incurred in connection with the exploitation of the Picture
      throughout the Territory, as applicable, including, without limitation,
      the following:
 
 (i)
              Royalties.The cost of
      all licenses required to permit exhibition, distribution or other use of
      the Picture, trailers and prints thereof, including fees for use of any
      patented equipment or processes; synchronization, recording and performing
      royalties and fees with respect to performance of lyrics and music and
      literary material; and any re-use fees and costs advanced by the
      Distributor and any other similar fees and/or amounts to be incurred by
      Distributor pursuant to Article 4.1(n) hereof or otherwise as contemplated
      in this Agreement.
 
 (ii)
              Insurance Costs.All
      costs for insurance coverage for any and all risks of loss with respect to
      the Picture and any components thereof, including errors and omissions
      insurance and loss or damage to prints and physical material
      insurance.
 
 (iii)
              Copyrighting Costs.All
      costs and expenses of registering copyright in the Picture for the benefit
      of the copyright holders thereof and their assigns and the extension and
      renewal thereof, and other similar protection throughout the Territory,
      wherever and whenever incurred, within the Distributor's sole
      discretion.
 
 (iv)
              Copyright Infringement Costs.All costs incurred in protecting the copyright in the Picture for
      the benefit of a copyright holders thereof and their assigns and
      preventing any infringement of copyright or violation of rights in and to
      the Picture or any elements thereof (whether by litigation or otherwise),
      including reasonable fees of counsel in connection
    therewith.
 
 (v)
              Claims and Litigation CostsAll costs incurred by reason of claims asserted by third parties
      which arise from the production, distribution, exhibition and/or
      exploitation of the Picture (including, without limitation, claims of
      infringement, unfair competition, violation of any right of privacy,
      defamation or breach of contract).
 
 Page
- 201
 (vi)
              Marketing Costs.All
      expenses incurred with respect to marketing the Picture at the various
      film and television markets and all film festivals, including a share of
      the costs of attending such markets and
  festivals.
 
 (vii)
              Other Costs.Any
      residual or music payments due or paid by Distributor, or any other
      deferred payments or participation obligations payable in connection with
      the Picture.
 
 8.3           Interest on Distribution
Expenses.  Distribution Expenses include amounts on account of
the cost to Distributor of interest on any and all monies in respect of costs
relating to the distribution of the Picture, calculated at a rate equal to the
prime rate plus 2% of the main bank of Distributor from time to time in effect,
such rate to be automatically adjusted without notice to Producer upon every
change by the said bank of its prime rate. For the purposes of this calculation
the amount payable shall be calculated on December 31 of each year and
compounded on that date if not deducted or otherwise recovered.
 
 8.4           Distribution Fee.The
Distributor shall be entitled to deduct and retain from the Gross Receipts, the
following distribution fees (the "Distribution Fee")which
shall not be inclusive of any sub-distribution fees and any distribution or
similar fees paid to affiliates, subsidiaries or other companies related to the
Distributor with respect to the exploitation and distribution of the
Picture.
 
 Distributor's
Share         Producer's
Share
 Theatrical                                                                                           
50%                               50%
 Non-Theatrical                                                                                  
50%                               50%
 Pay
television (Canada
Only)                                                          50%                               50%
 Other
television (Canada
Only)                                                      
50%                               50%
 Other
television                                                                                 
50%                               50%
 Retransmission
royalties                                                                  50%                               50%
 Home
entertainment
(rental)                                                            
50%                 
(agreed upon royalty)
 Home
entertainment (re-issue,
sell-through)                                
50%                 
(agreed upon royalty)
 Other
(including airline, ship, hotel,
etc.)                                       50%                               50%
 
 
 
 ARTICLE
      9
 ALLOCATION
      OF GROSS RECEIPTS
 
 9.1           Allocation.  Gross
Receipts derived from the exhibition, exploitation and distribution of the
Picture in the Territory, as applicable, shall be distributed from time to time
as provided for below:
 
 Page
- 202
 A.           Cinematic
Rights: Film Rentals (“Film Rentals” shall
be defined as 100% of DR’s share of the gross box office receipts) from
Cinematic Rights, shall be applied on a continuous rolling basis as
follows:
  (a)
              Firstly,
      Distributor shall retain 50% of the Film
  Rentals;
 
 (b)
              Secondly,
      Distributor shall recoup its P&A Expenditures from the Film
      Rentals;
 
 (c)
              Thirdly,
      Producer shall recoup any union residuals from the Film Rentals;
      and
 
 (d)
              Lastly,
      following the deductions stated above, the balance of the Film Rentals
      shall be paid to Producer.
 
 B.    Videogram
Rights:  Video
Net Revenue (“Videogram Net
Revenue” shall be defined as Gross Revenue from Videogram Rights, less
returns or refunds) from Videogram Rights, shall be applied on a continuous
rolling basis as follows:
 
 (a)
              Firstly,
      Distributor shall retain 50% of the Videogram Net
  Revenue;
 
 (b)
              Secondly,
      Distributor shall recoup its Videogram Distribution Expenses (“Videogram Distribution
      Expenses” shall be defined as all amounts incurred by DR in
      connection with the DVD release of each Picture, which shall be capped at
      20% of Gross Revenue (the “Videogram Distribution
      Expense Cap”) EXCEPT THAT the
      Videogram Distribution Expense Cap shall not apply to any replication and
      packaging cost);
 
 (c)
              Thirdly,
      Distributor shall recoup its P&A Expenditures from the Videogram Net
      Revenue;
 
 (d)
              Fourthly,
      Producer shall recoup any union residuals from the Videogram Net Revenue;
      and
 
 (e)
              Lastly,
      following the deductions stated above, the remaining Videogram Net Revenue
      shall be paid to Producer.
 
 D.           All Other
Rights:  Gross Revenue from all Rights (other than Cinematic
Rights or Videogram Rights), shall be applied on a continuous rolling basis as
follows
 
 (a)
              Firstly,
      Distributor shall retain 50% of Gross
Revenue;
 
 (b)
              Secondly,
      Distributor shall recoup its Distribution Expenses (“Distribution
      Expenses” as defined in Exhibit “B” attached hereto and
      incorporated herein by this reference, which shall be capped at 5% of
      Gross Revenue);
 
 (c)
              Thirdly,
      Distributor shall recoup its P&A Expenditures and any unrecouped
      Videogram Distribution Expenses from Gross
  Revenue;
 
 (d)
              Fourthly,
      Producer shall recoup any union residuals paid from Gross Revenue;
      and
 
 Page
- 203
 (e)
              Lastly,
      following the deductions stated above, the remaining Gross Revenue shall
      be paid to Producer.
 
 E.           For
greater certainty, Distributor shall be entitled to recoup any of the P&A
Expenditures on a cross-collateralized basis across all Rights. Only after full
recoupment by Distributor of its P&A Expenditures, shall Producer be paid
the balance of Film Rentals, Videogram Net Revenue or Gross Revenue, as
applicable and as set out in A., B. and C. above.
 
 
 ARTICLE
      10
 FINANCIAL
      REPORTS AND PAYMENTS
 
 10.1
              Statements.
 
 (a)
              The
      Distributor agrees to render to the Producer periodic statements (the
      "Statements")showing in summary form the calculation of any sums due to the
      Producer under this Agreement including, but not limited to, Gross
      Receipts, permitted expenses and fees hereunder. Statements shall be
      rendered with respect to each of the following periods (the "Periods")and shall be
      delivered not later than forty-five (45) days after each such Period to
      the Producer:
 
 (i)
              the
      end of each calendar quarter period ending the thirty-six (36) month
      period commencing after the Delivery of the Picture;
  and
 
 (ii)
              in
      the event that the Distributor has not recouped the full amount of the
      Advance plus the applicable interest within the first thirty-six (36)
      months after Delivery, the Distributor shall continue to provide the
      statements on a quarterly basis for the first sixty (60) months after
      Delivery.
 
 (b)
              Thereafter,
      the Distributor shall deliver such Statements to the Producer no later
      than sixty (60) days after each semi-annual calendar
    period.
 
 10.2           Deemed Accuracy.Any Statement
shall be deemed to be accurate in all material respects if a notice of dispute
with respect to such Statement shall not be given by the Producer to the
Distributor within twenty-four ( 4) months after delivery of such
Statement.
 
 10.3           Audit & Inspection of Accounts.The Distributor agrees to keep written books of account and records in
accordance with generally accepted accounting principles in respect of the
Picture, on a consistent, uniform and non-discriminatory basis during the Term,
relating to the calculation of the sums due to the Producer pursuant to this
Agreement, for the Picture separately (the “Participation Account”). Such
records shall include, without limitation, all Gross Receipts derived by
Distributor, all Distribution Fees charged, all Distribution Expenses charged,
the portion of the Advance recouped, all adjustments made and all cash collected
or credits received, and Net Receipts due to Producer. Subject to the
limitations set forth below, the Producer shall have the right, at its sole
expense, to inspect the Participation Account to verify the accuracy of any
Statement which has not become incontestable under the terms hereof (an "Inspection"). Specifically,
Producer shall have access to the files, correspondence, agreements and related
documentation of the Distributor so as to verify allocation of Gross Receipts of
the Picture, as opposed to other films not owned by Producer for which
Distributor has licensed as a package. The Distributor agrees to permit British
Columbia Film to have access to all of the Participation Accounts for purposes
of audit, on the same terms and conditions as for Producer. The Producer agrees
that any Inspection and their respective right to contest or object to any
Statement or any payment made pursuant hereto will be subject to the
following:
 
 Page
- 204
 (a)
              An
      Inspection shall be conducted only by a certified qualified chartered
      accountant or a firm of certified public
  accountants.
 
 (b)
              An
      Inspection (i) shall be conducted only once with respect to each
      Statement, only during normal business hours in such a manner as to not
      unreasonably interfere with the Distributor's normal business activities
      and only at such places as the Participation Account are kept, (ii) shall
      not continue for more than five (5) consecutive business days, and (iii)
      shall not be conducted more than once in any twelve (12) month
      period.
 
 (c)
              Each
      Statement (and all items and information contained therein) shall be
      deemed correct and shall be conclusive and binding on the Producer and not
      subject to objection or contest for any reason, unless the Distributor
      shall receive from the Producer an objection, in writing, specifying in
      detail the items or transactions which the Producer contests, on or before
      the last day of the 36th full calendar month next succeeding the date the
      applicable Statement is received by the
  Producer.
 
 10.4           Reserves. If Distributor
reasonably anticipates incurring union or guild residual payments, uninsured
claims or other reasonably anticipated costs, expenses or losses relating to the
Picture, which, if and when incurred, will be properly deductible hereunder,
Distributor may set up appropriate reserves therefor, provided, however, that at
no time shall the aggregate of any such reserves exceed more that ten percent
(10%) of the Gross Receipts reported by Distributor in any accounting statement.
Such reserves shall be taken from Producer's share of Net Receipts. Any such
reserve will be liquidated within a reasonable time after the anticipated event,
but, unless there is an active claim for which a reserve has been established,
no such reserve shall be maintained for a period longer than twelve (12) months
from such reserves creation.
 
 10.5           Right to Cure.Distributor may
cure any failure to make timely payment under this Agreement, or to timely
deliver any Statement, within sixty (60) business days after Distributor
receives a written notice from Producer.
 
 10.6           Foreign Funds.With respect to
any Gross Receipts received by Distributor in foreign funds, Distributor shall
convert any such funds to Canadian currency prior to remitting the same to
Producer. The rate of exchange with respect to any such funds shall be the rate
of exchange prevailing and reasonably available to Distributor at the time
Distributor actually converts such funds into Canadian currency, and Distributor
shall have no obligation to convert any such funds to Canadian currency at any
time prior to the time Distributor is required to remit such funds to Producer
hereunder so as to maximize the benefit of a favourable rate of exchange. If the
transmission of any Gross Receipts derived from the Picture from any countries
or territories into Canada is prevented by embargo, blocked currency regulations
or other restrictions, then, if Distributor elects by giving notice to Producer
to such effect or Producer so requests by giving Distributor notice to such
effect, Distributor shall (to the extent permitted under the laws of any such
country wherein such monies are blocked or frozen) cause Producer's share of Net
Receipts to which Producer would be entitled upon transmission to Canada to be
deposited in Producer's name (or in such name as Producer may designate) in any
bank or other depository designated by Producer (or by Distributor if
Distributor elects to so deposit such monies and Producer fails to designate
within fifteen (15) business days) in such territory or country. Such deposit
will, for the purposes of this Agreement, be deemed payment to Producer of the
amount deposited (computed at the rate of exchange charged by the Royal Bank at
the time such deposit is made) and Distributor shall have no further liability
to Producer in connection with any monies so deposited.
 
 Page
- 205
 
 ARTICLE
11
 ARBITRATION
 
 11.1             Dispute Resolution and Cure
Period.
 
 (a)
              If
      either party shall claim that the other party has breached this Agreement
      (the “Defaulting
      Party”), the claimant shall give the Defaulting Party written
      notice thereof, and the parties shall endeavour to resolve the matter on
      an amicable basis. The Defaulting Party receiving such notice shall not be
      deemed in breach of this Agreement unless the parties are unable to
      amicably resolve the matter in dispute within the hereinafter described
      period of fifteen (15) days, or the Defaulting Party receiving such notice
      shall fail to cure such breach within fifteen (15) days after the date
      such notice is received by it, provided however that said fifteen (15) day
      period shall be shortened to the extent necessary to avoid interference
      with the production of the Picture.
 
 (b)
              Any
      dispute, controversy or claim arising out of or in connection with or
      relating to this Agreement or any breach or alleged breach hereof, which
      the parties are unable to resolve after consultation with each other,
      shall be determined and settled by arbitration at Vancouver, British
      Columbia in accordance with the provisions of the Commercial Arbitration Rulesof the American Arbitration Association which presently exist or as
      same may be amended. The parties agree to abide by the decision rendered
      and further agree that any such determination or settlement shall be final
      and conclusive upon the parties and any judgment thereon may be entered in
      any Court having jurisdiction.
 
 Page
- 206
 
 
 
 
 ARTICLE
12
 EXPLOITATION
 
 12.1           The
Distributor agrees to negotiate and enter into distribution and/or licensing
agreements and/or exhibitor's agreements in connection with the exhibition,
distribution and exploitation of the Picture on the most favourable terms
obtainable in accordance with the Distributor's business judgement exercised in
good faith and shall employ all commercially reasonable efforts to maximize the
commercial benefits to the Producer of the exploitation of the
Picture.
 
 ARTICLE
13
 TERMINATION
 13.1             Subject
to an event of Force Majeure, the Distributor may terminate this Agreement if
during pre-production, production or post-production of the Picture and until
Delivery of the Picture, the Producer (the "Defaulting Party")does not
meet its material obligations and commitments hereunder (the "Producer Default")and the
Producer fails to cure the Producer Default within ten (10) business days of
receipt of a written notice of the Producer Default, detailing such
default.
 
 13.2             If
the Distributor terminates this Agreement, all of the obligations of the
Distributor hereunder shall immediately cease and a monies advanced until the
date of termination by the Distributor to the Producer shall immediately become
due and payable in full to Distributor without further demand or
notice.
 
 13.3              Subject
to an event of Force Majeure, the Producer may terminate this Agreement if prior
to full payment of the Advance, the Distributor does not meet its financial
obligations on a timely basis (the "Distributor Default)and the
Distributor fails to cure the Distributor Default within ten (10) business days
of receipt of a written notice of the Distributor Default, detailing such
default.
 
 13.4              If
the Producer terminates this Agreement, the Producer may in its discretion
substitute another party (the "Substitute Party")or
substitute themselves for the Distributor and the monies paid by the Distributor
until the date of termination will become payable to full recoupment (as defined
in 8.1 (c)) from the first revenues from the Picture. Alternatively, the
Producer may elect to terminate this Agreement and their involvement with the
Picture and in which case, all monies advanced by the Distributor which upon
termination are still in the Producer's possession and are uncommitted to any
third party in respect of the Picture, shall be returned to the Distributor
forthwith.
 
 13.5             Except
as specifically provided for in Articles 13.1 and 13.3, neither party shall have
the right to terminate this Agreement and the sole and unique remedy available
in the event that either party fails to meet its material obligations and
commitments hereunder is an action at law for damages. Notwithstanding the
foregoing, the Producer shall be entitled to obtain injunctive relief against
the Distributor exploiting the Picture outside of the Territory.
 
 Page
- 207
 13.6             Return of Materials.In the
event this Agreement is terminated for any reason whatsoever, including the
expiry of the Term, the Distributor agrees to return all of the Delivery
Materials in its possession in respect of the Picture and copies thereof
forthwith to Producer and the Distributor shall immediately cease to hold itself
out in any manner which might give third persons the impression that this
Agreement is still in force.
 
 13.7             Bankruptcy.In the event that
Distributor becomes insolvent, bankrupt or otherwise takes advantage of or
becomes subject to any law or statute relating to insolvency, Producer may in
its absolute discretion terminate this Agreement by giving written notice to
Distributor in accordance with Article 16 hereof, and such termination shall be
effective upon receipt of the notice of termination provided, however, that no
such termination will affect the validity of or the assignment of rights of any
such distribution agreement or license previously entered into by the
Distributor or its sub-distributors.
 
 13.8             Effect on Existing Agreements.Notwithstanding any other provisions of this Agreement, with respect to
any sub-distribution or licensing agreements or any assignments entered into by
Distributor in connection with the Distribution Rights in the Territory, the
following shall apply notwithstanding any other provision of this
Agreement:
 
 (a)
              any
      termination, expiration, revocation, cancellation, recission, repudiation,
      abrogation or failure of any aspect of this Agreement, occurring for any
      reason whatsoever, shall so far as Producer is concerned, subject to and
      in no way affect any distribution or license agreements (or any provisions
      thereof or authorizations granted pursuant thereto) entered into by
      Distributor in respect of the Distribution Rights (such distribution and
      license agreements and authorizations defined hereinafter as "License Agreements")regardless of (inter alia) the length of the remaining term of any
      such License Agreements, and Producer shall undertake all the obligations,
      rights and benefits of Distributor thereunder in such
    event;
 
 (b)
              Producer
      shall do nothing to disturb or interfere in any way with any rights under
      the License Agreements;
 
 (c)
              all
      sales, assignments, pledges, encumbrances or other transfers or any nature
      whatsoever, made at any time whatsoever by, on behalf of or under the
      authority of Producer of all or any part of Producer’s rights and the
      Picture shall be subject to all such License Agreements;
    and
 
 (d)
              if
      by operation of law or otherwise any rights and such License Agreements
      revest in or revert to Producer, then Producer will grant to such persons
      as Distributor may designate effective immediately upon any such revesting
      or reverting all such rights under the effective License Agreements as
      necessary, appropriate or convenient in Distributor's sole discretion, and
      Producer hereby irrevocably appoints Distributor as Producer's exclusive
      attorney-in-fact which appointment shall be deemed a power coupled with an
      interest, for its use and benefit with power of delegation and
      substitution and re-substitution, for the purpose of executing,
      acknowledging, filing and recording of all documents and instruments and
      doing all other acts necessary or advisable to further accomplish the
      purposes aforesaid, as power of attorney to survive the dissolution or
      bankruptcy or legal capacity of Producer. Distributor shall give Producer
      five (5) business days notice before exercising such
    rights.
 
 Page
- 208
 13
..9           Distributor's Default.In
addition to any other event of default under this Agreement, Distributor will
default if Distributor:
 
 (a)
              becomes
      insolvent or fails to pay its debts when due;
or
 
 (b)
              makes
      an assignment for the benefit of creditors or seeks relief under any
      bankruptcy law or similar law for the protection of debtors or suffers a
      bankruptcy petition to be filed against it or a receiver or trustee is
      appointed for substantially all of its assets, and the same is not removed
      within thirty (30) days.
 
 13.10           Notice to Distributor.Producer will give Distributor written notice of any claimed default. If
a default is incapable of cure then Distributor will be in default immediately
upon the occurrence of the event giving rise to the default. If the default is
capable of cure, then Distributor will have sixty (60) business days after its
receipt of such notice to cure any monetary default and ninety (90) business
days after its receipt of any such notice to cure any non-monetary default. Only
if Distributor fails to do so, may Producer proceed against Distributor for
available relief, by giving Distributor written notice of claimed default. If a
default is incapable of cure, then Distributor will be in default immediately
upon the occurrence of the event giving rise to the default. If the default is
capable of cure, then Distributor will have sixty (60) business days after its
receipt of such notice to cure any monetary default and ninety (90) business
days after its receipt of any such notice to cure any non-monetary default. Only
if Distributor fails to do so, may Producer proceed against Distributor for
available relief.
 
 13.11           Producer's Default.In
addition to any other event or default under this Agreement, Producer will
default if Producer:
 
 (a)           becomes
insolvent or fails to pay its debts when due; or
 
 (b)
              makes
      any assignment for the benefit of creditors, or seeks relief under any
      bankruptcy law or similar law for the protection of debtors or suffers a
      bankruptcy petition to be filed against it or a receiver or trustee is
      appointed for substantially all of its assets, and the same is not removed
      within thirty (30) days.
 
 13.12           Notice to Producer.The
Distributor will give Producer written notice of any claimed default. If a
default is incapable of cure, then Producer will be in default immediately upon
the occurrence of the event giving rise to the default. If the default is
capable of cure, then Producer will have sixty (60) business days after its
receipt of such notice to cure any monetary default and ninety (90) business
days after its receipt of any such notice to cure any non-monetary default. Only
if Producer fails to do so, may Distributor proceed against Producer for
available relief by giving Producer written notice of claimed default. If a
default is incapable of cure, then Producer will be in default immediately upon
the occurrence of the event giving rise to the default. If the default is
capable of cure, then Producer will have sixty (60) business days after its
receipt of such notice to cure any monetary default and ninety (90) business
days after its receipt of any such notice to cure any non-monetary default. Only
if Producer fails to do so, may Distributor proceed against Producer for
available relief.
 
 
 Page
- 209
 ARTICLE
14
 CONFLICTS
 
 14.1           The
Distributor shall have the right to act as sales agent or distributor for any
producer of motion pictures, television series or features, other than the
Picture, regardless of whether the films, features or episodes produced by such
other producer can, in any way, be deemed to be competitive with the
Picture.
 
 
 ARTICLE
15
 FORCE
MAJEURE
 
 15.1           As
used herein, "Force Majeure"shall mean any event beyond the Producer's or the Distributor's control
which delays, hampers, interrupts or interferes with the Delivery of the
Picture, including, without limitation, fire, earthquake, flood, epidemic,
strike, lock-out or other industrial action, civil disturbance, war, act of God,
death, illness or incapacity of or breach by any principal member of the cast or
crew, of any statute, law or judicial order or any other event completely beyond
the control or influence of the Distributor or the Producer.
 Page
- 210
  ARTICLE
16
 NOTICES
 
 16.1           All
notices given hereunder must be in writing and may be delivered by personal
delivery or by pre-paid, registered or certified mail, or by telegram,
telecopier or by facsimile transmission to the following address or to such
other address or addresses as any party hereto advises the other party in
writing from time to time and shall be deemed received three (3) days after
mailing by registered or certified mail, and one (1) business day after delivery
by telegram, telecopier or by facsimile transmission:
 
 To
      the Producer:
              PACIFIC GOLD ENTERTAINMENT
      INC.
 7-534 Cambie St.
 Vancouver, B.C.
 Canada V6B 2N7
 
 Attention:                    Michael
George
 
 To
      the Distributor:
              DAVAL RELEASING
      INC.
 3-534 Cambie St.
 Vancouver, B.C.
 Canada V6B 2N7
 
 Attention:                    Michael
Grudman
 
 
 ARTICLE 17
 MISCELLANEOUS
 
 
 17.1           Security Interest.As security
for the payment in full of its share of Net Receipts, all Distribution Fees,
Distribution Expenses and recoupment of the Advance and all other recoupments to
which Distributor is entitled under this Agreement, Producer hereby grants to
Distributor a security interest in and to the Collateral. In connection with
Distributor's security interest, Producer agrees that Distributor shall have a
non-exclusive right of access to all physical materials comprising the Picture
necessary to allow Distributor to enforce its security interest in the event
Producer defaults on account of its obligations to Distributor pursuant to this
Agreement. Distributor’s access rights under this paragraph are subject to
Producer's access rights in and to such material. Also, Distributor acknowledges
that it has no interest whatsoever in any reserved rights (if any) or in any
proceeds received by Producer from its exploitation of any reserved rights not
licensed to Distributor.  In addition, Producer agrees to execute all
documents reasonably necessary to allow Distributor to perfect its security
interest set forth in this paragraph, including, but not limited to a Mortgage
of Copyright.
 
 Page
- 211
 17.2           No Partnership or Agency.Nothing contained in this Agreement shall be deemed to constitute a
partnership or any other legal relationship other than that of licensor and
independent distributor and neither the Producer or the Distributor shall do or
suffer to be done anything whereby one may be represented as a partner or agent
of the others.
 
 17.3           Insurance.The Producer shall
obtain and maintain during the course of the production of the Picture (and in
respect of the errors and omissions coverage, for a period of three (3) years
from Delivery), and at the Producer's own expense, insurance in connection with
the Picture, to such extent and covering such risks as is customary for
companies engaged in motion picture production, including without limitation,
the Producer's liability (errors and omissions) insurance including title
coverage naming the Distributor as an additional insured. The Producer shall
furnish to the Distributor copies of valid policies for all such insurance prior
to payment of the Advance.
 
 17.4           Representative.The
Distributor will be entitled to have a representative present at any and all of
the Producer's screenings of each cut for third parties including
distributors.
 
 17.5           Assignment.With the exception
of an assignment for the purposes of financing, or to a corporation owned by the
Producer, the Producer may not assign this Agreement, in whole or in part,
without the prior written consent of the Distributor. Distributor may assign or
transfer this Agreement and all or a part of its rights and obligations
hereunder, provided such assignee or transferee shall assume all obligations to
Producer in writing, and Producer shall be furnished with written notice of any
such assignment and/or transfer of Distributor's rights and obligations
hereunder.
 
 17.6           Entire Agreement.This
Agreement sets out the entire agreement between the parties relating to the
Picture and this Agreement may not be modified except by written agreement
between the parties.
 
 17.7           Waiver.
 
 (a)
              No
      waiver by any party of any breach hereof shall be deemed a waiver of any
      preceding, continuing or succeeding breach of the same, or any other time
      hereof.
 
 (b)
              Any
      party may waive the benefit of any term, condition, warranty or covenant
      in this Agreement or any right or remedy at law or in equity, but only by
      an instrument in writing signed by the party to be
  charged.
 
 17.
8             Counterparts.This Agreement
may be executed in one or more counterparts, each of which shall constitute an
original hereof and which together shall constitute one agreement.
 
 17.9             Preamble and Schedules.The
preamble and any schedule to this Agreement form part of this Agreement as if
recited at length herein.
 
 Page
- 212
 17.10             Fraud. In the event that one
or several copies of the Picture are fraudulently exploited by third parties,
the Distributor is hereby authorized to avail itself, at its own cost, of any
and all judicial recourses and remedies it deems appropriate or necessary in
order to defend its rights under this Agreement.
 
 17.11            Time. Time is of the essence
with respect to this Agreement.
 
 17.12             Legal Fees. In any proceeding
brought by either party with respect to this Agreement, its subject matter or
the actions, statements or conduct of the parties hereunder, the prevailing
party shall be entitled to recover from the other party all costs and expenses
incurred in connection therewith, including but not limited to legal fees, legal
costs and court costs.
 
 17.13             Further Assurances.All
parties shall execute and deliver such other documents or instruments as may be
necessary or desirable to evidence, give effect to or confirm this Agreement,
and any of the terms and conditions hereof.
 
 17.14             Withholding.In the event that
any claim or action is made or brought with respect to which Distributor and its
licensees, assigns and sub-distributors are to be indemnified by Producer
hereunder, Distributor shall have the right to withhold from disbursements to or
for the account of Producer any amounts otherwise payable by Distributor to
Producer pursuant to this Agreement, to the extent that such amounts are
necessary to satisfy any claim, cost, liability or settlement in connection with
such claim or action, plus a reasonable amount to be determined by Distributor
to cover the expenses of contesting or defending such claim or action.
Distributor shall have the further right to apply the amount withheld to satisfy
such claim, cost, liability or settlement. Producer shall remain liable,
however, for any part of such claim, cost, liability, settlement or expense not
satisfied by application of such amount withheld.
 
 17.15
              No Third Party Beneficiary.Nothing in this Agreement, expressed or implied, is intended or
      shall be construed to confer upon any person other than the parties hereto
      any right, remedy or claim, legal or equitable, under or by reason of this
      Agreement or any provision hereof, this Agreement and all of its
      provisions intended to be and being for the sole and exclusive benefit of
      the parties hereto.
 
 
 Page
- 213
 IN WITNESS WHEREOFthe parties
hereto have caused this Agreement to be executed by their duly authorized
officers as of the day and year above written.
 
 PACIFIC GOLD ENTERTAINMENT
      INC.
              
              DAVAL RELEASING
      INC.Date:
              
              Date:Name:
      MICHAEL GEORGE
              
              Name:  MICHAEL
      GRUDMANTitle:   PRODUCER
              
              Title:  VP
      AcquisitionsBy:  /s/
      Michael George
              
              By:  /s/
      Michael Grudman
 
 
 
 Page
- 214
 
 SCHEDULE
“A”
 to
a Distribution Agreement dated as of February 20, 2009
 
 DELIVERY
MATERIALS
 
 Producer
agrees as a material obligation hereunder to make full and complete delivery, at
Producer's sole cost and expense, of all the following items of the Picture or
its trailer (as applicable and subject to
availability) (the "Materials"), as required below
by Access Certificate and physical delivery (as applicable), to Distributor or
to the places and persons, including laboratory(ies) designated by Distributor
unless otherwise specified.
 
 A.
ESSENTIAL DELIVERY MATERIALS
 
 1.
              FILM
      ELEMENTS
 
 P
      1. a)
              FEATURE:
      Delivery of one 35mm Original Picture Negative, with main and end titles
      and fully edited, and conformed in all respect to the approved final
      version of the Picture
 P
      1. b)
              FEATURE:
      Delivery of one 35mm Textless backgrounds
  negatives
 P
      1. c)
              FEATURE:
      Delivery of one 35mm Original negative and positive prints of all cover
      material
 P
      1. d)
              FEATURE:
      Delivery of one 35mm first class Interpositive manufactured from item P
      1.a)
 P
      1. e)
              FEATURE:
      Delivery of one 35mm first class internegative manufactured from item P 1.
      d)
 P
      1. f)
              FEATURE:
      Delivery of one 35mm Low contrast print manufactured from item P 1.
      e)
 P
      1. g)
              FEATURE:
      Delivery of one 35 mm Interpositive of the textless backgrounds for the
      main and end titles and texted
scenes.]
 P
      1. h)
              FEATURE:
      Delivery of one 35 mm Answer print manufactured from item P 1
      a)
 P
      1. I)
              FEATURE:
      Delivery of one 35 mm print from P
  1.  e)
 P
      1. j)
              FEATURE:  Delivery
      of one  35mm Check Print.
 P1.  k)
              FEATURE:
      Delivery of all out takes and
trims.
 
 
 2.           SOUND
ELEMENTS
 
 S 1.
a)                     FEATURE:
Access to one 35 mm optical Soundtrack negative
 S 1.
b)                     FEATURE:
Access to one digital multitracks as follow:
 
 M & E :
 
              4
      TRACKS + 2 TRACKS ( L C R S  + STEMS +DIAL. MONO
      PRE-MIX)
 
 
              6
      TRACKS ( LEFT+BACK  LEFT +CENTER + RIGHT + BACK RIGHT + SUBW)
      AND
 
 
              ORIGINAL
      STEREO MIX
 
 
              MUSIC
      SCORE
 
 
 Page
- 215
 3.           VIDEO
ELEMENTS
 
 High Definition
Master
 
 This
master must be supervised by the director of the Picture (if available), and
manufactured from:
 
 
              A
      35 mm Interpositive, or
 
              A
      35 mm new print struck from the original
  negative
 
 and with
textless backgrounds after the principal program.
 
 V
      1. a)
              FEATURE:  Delivery
      of one (1) High Definition Master original aspect ratio anamorphic master
      manufactured from a 35mm
Interpositive.
 
 SOUND
CONFIGURATION
 
 The
tracks for such digital masters shall be laid from a DIGITAL
MULTITRACKS as follows:
 
 VS
      1. a)
              Tracks
      1 and 2: Stereo Right / Stereo Left - Original
  language
 Tracks
      3 and 4: Stereo Right / Stereo Left - Music and
  Effects
 
 
 4.           DOCUMENTATION
 
 (i)           The
chain of title of the Picture
 
 (ii)
              An
      E&O insurance certificate naming the Distributor and its assignees and
      sub-distributors as additional
insured.
 
 
 B.
SECONDARY DELIVERY MATERIALS
 
 1.           DOCUMENTATION
AND PUBLICITY MATERIALS
 
 PR 1.
a)                     PAID
ADVERTISING BILLING STATEMENT
 PR 1.
b)                     SYNOPSIS
OF THE PICTURE
 PR 1.
c)                     SPOTTING
LIST of trailer and feature ON
DISKETTE
 PR 1.
d)                     10
x original soundtrack records
 PR 1.
e)                     PRODUCTION
NOTES
 PR 1.
f)                     BIOGRAPHIES
OF PRODUCTION AND CAST MEMBERS
 PR 1.
g)                     COLOR
STILLS not less than 75
  Page
- 216
 PR
      1. h)
              B
      & W STILLS not less than 50
 PR
      1. i)
              Press
      reviews
 PR
      1. j)
              COLOR
      TRANSPARENCY SET not less than 50
 PR
1.
k)                 Editor’s
script notes
 PR
      1. l)
              20
      x Press books, press kits (as
available)
 PR
1.
m)                50
x items of each poster (as available)
 PR
      1. n)
              ORIGINAL
      DIALOGUE LIST CONTINUITY ON DISKETTE,plus two (2) printed copies.
 PR
1.
o)                 
TRANSPARENCY POSTER ART with separated text
 PR
1.
p)                  Dubbing
and Subtitling restrictions
 PR
      1. q)
              MAIN
      TITLES and END CREDITS
 PR
1.
r)                  Shooting
Script printed and if available, on disk
 
 
 2.           SUBTITLING
 
 SB.1
              SUB -TITLING
      DISK  ASCII  RATIO/synchronised to the video
      elements
 
 
              FEATURE subtitled
      elements
 
 
 3.           LEGAL
DOCUMENTATION
 
 
 LD.1
              a
      typed statement summarising all restrictions and obligations with respect
      to advertising and promotion in connection with the Picture (statement to
      cover restrictions pertaining not only to credits but also to use name and
      likeness obligations),
 
 LD.2
              a
      copy of the Title Report covering the title of the Picture from a
      recognised source setting forth prior uses of the same or similar
      titles,
 
 LD.3
              a
      copy of the executed licence agreement in full force and effect between
      the Producer and Dolby Laboratories,
Inc.,
 
 LD.4
              if
      any clips from other films are used in the Picture, copies of all
      necessary licenses, or permissions granting the rights to use the clips in
      the Picture,
 
 LD.5
              typed
      contact list for all key cast and
crew,
 
 LD.6
              twenty
      (20) original certificates of Origin for the Picture certifying that the
      Picture is a picture of Canadian
origin,
 
 LD.7
              Three
      (3) originals of an Instrument of Transfer in the form attached hereto,
      signed by the Producer before a person authorised to attest
      signature,
 
 Page
- 217
 LD.8
              Three
      (3) copies of the Music Cue Sheet of the Picture, which cue sheet shall
      specify the author of each musical composition involved, the publishing
      company and performing rights society controlling the rights in each such
      piece of music and its specific location in the Picture, the location
      where the music was recorded, and the names of the composer and the
      arranger,
 
 LD.9
              Laboratory
      Access Letter(s) signed by the Licensor and each respective Laboratory
      and/or facility having possession of the preprint and sound materials for
      the Picture (all versions) and trailer (s), including film, sound and
      storage facilities,
 
 LD.10
              Twenty
      (20) original notarized short- form
licenses,
 
 LD.11
              Two
      (2) credit lists as on screen,
 
 LD.12
              Two
      (2) foreign theatrical advertising
credits,
 
 LD.13
              One
      (1) Certificate of Canadian Copyright Registration for the screenplay, or
      if not yet available, a copy of the application therefore accompanied by
      the letter of transmittal to the Canadian Copyright
  Office,
 
 LD.14
              One
      (1) Certificate of Canadian Copyright Registration for the Picture, or if
      not yet available, a copy of the application therefore accompanied by the
      letter of transmittal to the Canadian Copyright
  Office,
 
 LD.15
              Final
      certified Negative Cost Statement certified by the Completion Guarantor
      (and if no completion guarantor was engaged for the Picture, then by the
      Producer’s outside certified public accountants as approved by the
      Distributor) evidencing a Minimum Negative Cost of Seventy Five Thousand
      (CDN$75,000) (the definition of “negative cost” for the purposes of this
      agreement shall be subject to the written approval of the Distributor, but
      in no event shall such “negative cost” include the aggregate producer fees
      or interest and financing charges),
 
 LD.16
              MPAA
      rating certificate reflecting the rating specified in the Exhibit XYZ to
      the agreement,
 LD.17
              All
      literary and music chain of title and other clearance documentation for
      the feature in the form and substance satisfactory to the
      Distributor,
 
 LD.18
              Access
      to and all location of all agreements and documents relating to the
      picture: e.g. employment agreements, clearances, releases, location
      agreements and evidence of payment in full with respect thereto) as may be
      required by Distributor, including but no limited
  to:
 
 a)
              Cast/Talent/Personnel
      Agreements- Fully executed agreements for all cast, crew, and other
      entities and related personnel who have been accorded paid advertising and
      /or screen credit whose names are accorded paid advertising credit.
      (Should agreements for any the cast members not exist, then signed
      releases for those individuals).
 b)
              Releases-
      Signed releases from all persons identified by name or likeness in the
      Picture who do not have signed
contracts.
 c)
              Music
      Licenses- Fully executed synchronization and master use licenses on all
      media buy-outs basis for each item of licensed music used in the Picture;
      fully executed agreements for each composer of underscoring on all media
      buy-out basis; and evidence payment under each composer of underscoring on
      all media buy-out basis; and evidence of payment under each
      synchronization and master use license and composer
    agreement.
 
 Page
- 218
 LD.19
              Mortgage
      of Copyright and Security Agreement- two (2) original of a Mortgage of
      Copyright and Security Agreement.
 
 LD.20
              Coverage-
      If requested, laboratory access to the original negative, answer print,
      work picture, magnetic or digital soundtracks, filled music, and effect
      tracks and the original sound recordings, of all alternative takes, cover
      shots, looped dialogue lines and other materials (collectively referred to
      as “coverage”) for the purpose of re-transferring and/or conforming to
      rating requirements, broadcast standards and practices and
      censorship.
 
 LD.21
              Residuals-
      Producer shall be responsible for all residuals, but will provide the
      following information:
 a)
              A
      letter signed and certified to be true and correct, from the producer or
      director of the Picture, setting
forth:
 
 (i)
              Which,
      if any, domestic and foreign unions and guilds whose members rendered
      services on the Picture.
 (ii)
              With
      respect to each such union or guild listed in (i) preceding what, if any,
      residual obligations exist (with specificity) in connection with
      Distributor’s exercise of its distribution rights in the
      Picture;
 (iii)
              All
      documents and information necessary for Distributor to comply with the
      residual obligations stated in (ii) preceding including, without
      limitation, an itemized statement of the total amounts paid to each
      director, write, artist, musician, and technician employed or in
      connection with the Picture together with the number of days worked by
      each, the social security number (or other applicable documentation) of
      each thereof and the name of the guild or union having jurisdiction;
      and
 (iv)
              Where
      worldwide rights in all media have been “bought out” a letter from the
      Producer or director setting forth with specificity the persons subject to
      such “buyout” and the method of
buyout.
 
 Any
waiver of delivery of any such item shall not be valid or binding unless in
writing and signed by Distributor.
 
 
 Page
- 219
 
 SCHEDULE
“B”
 to
a Distribution Agreement dated as of February 20, 2009
 
 CASH FLOW
SCHEDULE
 
 To be
mutually approved by the parties.


Page
- 220


Exhibit
4.31





Page
- 221

















Page
- 222


Exhibit
4.32





Page
- 223




















Page
- 224


Exhibit
4.33








Page
- 225

















Page
- 226





Exhibit
12








Page
- 227













PACIFIC
GOLD ENTERTAINMENT INC.


CERTIFICATIONS
PURSUANT TO


SECTION
302 OF THE SARBANES-OXLEY ACT OF 2002






CERTIFICATION






I, Ron
Loudoun, certify that:






1.  
I have reviewed this annual report on Form 20-F of Pacific Gold Entertainment
Inc.;






2.  Based
on my knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;






3.  Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the company as of, and for,
the periods presented in this report;






4.  The
company’s other certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and
have:






(a)
Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the company, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;






(b)
Designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;






(c)
Evaluated the effectiveness of the company’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and






(d)
Disclosed in this report any change in the company’s internal control over
financial reporting that occurred during the period covered by the annual report
that has materially affected, or is reasonably likely to materially affect, the
company’s internal control over financial reporting; and




5.  The
company’s other certifying officer(s) and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the company’s
auditors and the audit committee of the company’s board of directors (or persons
performing the equivalent functions):




(a) All
significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to
adversely affect the company’s ability to record, process, summarize and report
financial information; and






(b) Any
fraud, whether or not material, that involves management or other employees who
have a significant role in the company’s internal control over financial
reporting.






Date:  November
13, 2009













/s/
Ron Loudoun


Ron
Loudoun


Chief
Executive Officer






Page
- 228


PACIFIC
GOLD ENTERTAINMENT INC.


CERTIFICATIONS
PURSUANT TO


SECTION
302 OF THE SARBANES-OXLEY ACT OF 2002






CERTIFICATION






I, Janet
Gilleshammer, certify that:






1.  
I have reviewed this annual report on Form 20-F of Pacific Gold Entertainment
Inc.;






2.  Based
on my knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;






3.  Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the company as of, and for,
the periods presented in this report;






4.  The
company’s other certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and
have:






(a)
Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the company, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;






(b)
Designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;






(c)
Evaluated the effectiveness of the company’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and






(d)
Disclosed in this report any change in the company’s internal control over
financial reporting that occurred during the period covered by the annual report
that has materially affected, or is reasonably likely to materially affect, the
company’s internal control over financial reporting; and




5.  The
company’s other certifying officer(s) and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the company’s
auditors and the audit committee of the company’s board of directors (or persons
performing the equivalent functions):




(a) All
significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to
adversely affect the company’s ability to record, process, summarize and report
financial information; and






(b) Any
fraud, whether or not material, that involves management or other employees who
have a significant role in the company’s internal control over financial
reporting.






Date:  November
13, 2009













/s/
Janet Gilleshammer


Janet
Gilleshammer


Chief
Financial Officer







Page
- 229








Exhibit
13











Page
- 230







CERTIFICATION
PURSUANT TO


18
U.S.C. SECTION 1350,


AS
ADOPTED PURSUANT TO


SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002













In
connection with the Annual Report of Pacific Gold Entertainment Inc. (the
“Company”) on Form 20-F for the period ending April 30, 2007 as filed with the
Securities and Exchange Commission on the date hereof (the “Report”), I, Ron
Loudoun, President and Chief Executive Officer of the Company and a member of
the Board of Directors, certify, pursuant to 18 U.S.C. §1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:






(1)
        The Report fully complies with the requirements of section 13(a) or
      15(d) of the Securities Exchange Act of 1934;
  and






(2)
        The information contained in the Report fairly presents, in all
      material respects, the financial condition and results of operations of
      the Company.




















/s/
Ron Loudoun


Ron
Loudoun


Chief
Executive Officer






November
13, 2009




Page
- 231














CERTIFICATION
PURSUANT TO


18
U.S.C. SECTION 1350,


AS
ADOPTED PURSUANT TO


SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002













In
connection with the Annual Report of Pacific Gold Entertainment Inc. (the
“Company”) on Form 20-F for the period ending April 30, 2007 as filed with the
Securities and Exchange Commission on the date hereof (the “Report”), I, Janet
Gilleshammer, Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:






(1)
        The Report fully complies with the requirements of section 13(a) or
      15(d) of the Securities Exchange Act of 1934;
  and






(2)
        The information contained in the Report fairly presents, in all
      material respects, the financial condition and results of operations of
      the Company.




















/s/
Janet Gilleshammer


Janet
Gilleshammer


Chief
Financial Officer






November
13, 2009









Page
- 232