EXHIBIT 4.4

                          SECURITIES PURCHASE AGREEMENT

      SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of April __,
2005, by and among Peak Entertainment Holdings, Inc., a Nevada corporation (the
"Company"), and the purchaser set forth on the signature page hereto ("Buyer").

                                    WHEREAS:

      A. The Company and Buyer are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by the rules
and regulations as promulgated by the United States Securities and Exchange
Commission (the "SEC") under the Securities Act of 1933, as amended (the "1933
Act");

      B. This Agreement is being made as part of a private placement offering by
the Company pursuant to which a minimum of $300,000 and a maximum of $1,000,000
of debentures and warrants are to be sold (the "Private Placement"), and the
purchasers in the private placement, including Buyer, are collectively referred
to as the "Buyers");

      C. Buyer desires to purchase and the Company desires to issue and sell,
upon the terms and conditions set forth in this Agreement: (i) 12% convertible
debentures of the Company, in the form attached hereto as Exhibit A (together
with any debenture(s) issued in replacement thereof or as interest thereon or
otherwise with respect thereto in accordance with the terms thereof, the
"Debentures"), convertible into shares of common stock of the Company (the
"Common Stock"), at a valuation of $0.30 per share ("Bridge Valuation"), upon
the terms and subject to the limitations and conditions set forth in such
Debentures; and (ii) such number of warrants as providing a 60% warrant coverage
("Warrant Coverage"), in the form attached hereto as Exhibit B, to purchase
shares of the Company's Common Stock (the "Warrants"), exercisable for five
years at $0.50 per share; (the Common Stock and Warrants are sometimes referred
to herein as the "Securities")

      D. Buyer wishes to purchase, upon the terms and conditions stated in this
Agreement, the amount of Securities issuable in the Private Placement for that
"Amount Invested" that Buyer indicates on the signature page hereto;

      NOW THEREFORE, the Company and Buyer hereby agrees as follows:

      1. PURCHASE AND SALE OF SECURITIES.

            a. Purchase of Securities. On the Closing Date (as defined below),
the Company shall issue and sell to Buyer and Buyer agrees to purchase from the
Company such principal amount of Debentures as equals the Amount Invested and
such number of Warrants as providing a 60% Warrant Coverage. "Warrant Coverage"
is defined and calculated as the Amount Invested divided by the warrant exercise
price, with that number then multiplied by 0.6. For example, an Amount Invested
of $100,000 would entitle the Buyer to: (i) $100,000 in principal amount of
Debentures; and (ii) warrants to purchase 120,000 shares of common stock.

            b. Form of Payment. Upon execution of this Agreement, (i) Buyer
shall pay the purchase price for the Debentures and the Warrants to be issued
and sold to them at the Closing (as defined below) (the "Purchase Price") by
wire transfer of immediately available funds shall be paid to the Company by
wire transfer to:

                  Signature Bank
                  565 5th Ave
                  New York, NY 10017
                  ABA:  026013576
                  For: Peak Entertainment Holdings, Inc.
                  Account No.:  1500495630


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            c. Closing Date. The date and time of the issuance and sale of the
Securities pursuant to this Agreement (the "Closing Date") shall be the date of
the release of the Purchase Price that is received and cleared and the issue of
the Debentures and Warrants.

      2. BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer represents and warrants
to the Company solely as to it that:

            a. Investment Purpose. As of the date hereof, Buyer is purchasing
the Debentures and the shares of Common Stock issuable upon conversion of or
otherwise pursuant to the Debentures pursuant to this Agreement (such shares of
Common Stock being collectively referred to herein as the "Conversion Shares")
and the Warrants and the shares of Common Stock issuable upon exercise thereof
(the "Warrant Shares" and, collectively with the Debentures, Warrants and
Conversion Shares, the "Securities") for its own account and not with a present
view towards the public sale or distribution thereof, except pursuant to sales
registered or exempted from registration under the 1933 Act; provided, however,
that by making the representations herein, Buyer does not agree to hold any of
the Securities for any minimum or other specific term and reserves the right to
dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption under the 1933 Act.

            b. Accredited Investor Status. Buyer is a sophisticated investor (as
described in Rule 506(b)(2)(ii) of Regulation D) and an accredited investor (as
defined in Rule 501 of Regulation D), and Buyer has such experience in business
and financial matters that it has the capacity to protect its own interests in
connection with this transaction and is capable of evaluating the merits and
risks of an investment in the Securities pursuant to this Agreement. Buyer has
been represented by counsel and advisors of its choice. Buyer acknowledges that
an investment in the Securities pursuant to this Agreement is speculative and
involves a high degree of risk.

            c. Reliance on Exemptions. Buyer understands that the Securities are
being offered and sold to it in reliance upon specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying upon the truth and accuracy of, and Buyer's
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of Buyer set forth herein in order to determine the
availability of such exemptions and the eligibility of Buyer to acquire the
Securities.

            d. Information. Buyer has conducted its own independent
investigation of the Company, has access to the Company's filings on Edgar
available at http://www.sec.gov/, and has, so far as the Buyer is aware,
received all documents, records, books and other information pertaining to
Buyer's investment in the Company that have been requested by Buyer.

            e. Governmental Review. Buyer understands that no United States
federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Securities.

            f. Transfer or Resale. Buyer understands that: (i) except as
provided for herein, the sale or re-sale of the Securities has not been and is
not being registered under the 1933 Act or any applicable state securities laws,
and the Securities may not be transferred unless (a) the Securities are sold
pursuant to an effective registration statement under the 1933 Act, (b) Buyer
shall have delivered to the Company an opinion of counsel that shall be in form,
substance and scope customary for opinions of counsel in comparable transactions
to the effect that the Securities to be sold or transferred may be sold or
transferred pursuant to an exemption from such registration to the reasonable
satisfaction of the Company, (c) the Securities are sold or transferred to an
"affiliate" (as defined in Rule 144 promulgated under the 1933 Act (or a
successor rule) ("Rule 144")) of Buyer who agrees to sell or otherwise transfer
the Securities only in accordance with this Section 2(f) and who is an
accredited investor, or (d) the Securities are sold pursuant to Rule 144, and
Buyer shall have delivered to the Company an opinion of counsel that shall be in
form, substance and scope customary for opinions of counsel in corporate
transactions to the reasonable satisfaction of the Company; (ii) any sale of
such Securities made in reliance on Rule 144 may be made only in accordance with
the terms of said Rule and further, if said Rule is not applicable, any re-sale
of such Securities under circumstances in which the seller (or the person
through whom the sale is made) may be deemed to be an underwriter (as that term
is defined in the 1933 Act) may require compliance with some other exemption
under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii)
neither the Company nor any other person is under any obligation to file to
register such Securities under the 1933 Act or any state securities laws or to
comply

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with the terms and conditions of any exemption thereunder (in each case, other
than pursuant to the provisions herein). Notwithstanding the foregoing or
anything else contained herein to the contrary, the Securities may be pledged as
collateral in connection with a bona fide margin account or other lending
arrangement.

            g. Legends. Buyer understands that until such time as the Securities
have been registered under the 1933 Act or otherwise may be sold pursuant to
Rule 144 without any restriction as to the number of securities as of a
particular date that can then be immediately sold, the Securities may bear a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of the certificates for such Securities):

      "The securities represented by this certificate have not been registered
      under the Securities Act of 1933, as amended. The securities may not be
      sold, transferred or assigned in the absence of an effective registration
      statement for the securities under said Act, or an opinion of counsel, in
      form, substance and scope customary for opinions of counsel in comparable
      transactions, that registration is not required under said Act or unless
      sold pursuant to Rule 144 under said Act."

            h. Authorization; Enforcement. This Agreement has been duly
authorized and validly executed and delivered by Buyer and is a valid and
binding agreement of Buyer enforceable against it in accordance with its terms
(i) subject to applicable bankruptcy, insolvency, or similar laws relating to,
or affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application, (ii) subject to a court's
discretionary authority with respect to the granting of specific performance,
injunctive relief or other equitable remedies and (iii) except to the extent the
indemnification and contribution provisions, if any, contained in any this
Agreement may be limited by applicable federal or state securities laws or
unenforceable as against public policy..

            i. Residency. Buyer is a resident of the jurisdiction set forth
immediately below Buyer's name on the signature page hereto.

            j. Not an Affiliate. Buyer is not an officer, director or
"affiliate" (as that term is defined in Rule 405 under the 1933 Act) of the
Company.

            k. Manner of Sale. At no time was Buyer presented with or solicited
by or through any leaflet, public promotional meeting, television advertisement
or any other form of general solicitation or advertising.

      3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

            The Company represents and warrants to Buyer that:

            a. Organization and Qualification. The Company and each of its
subsidiaries, if any, is an entity duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated,
organized or formed, with full power and authority (corporate and other) to own,
lease, use and operate its properties and to carry on its business as and where
now owned, leased, used, operated and conducted. The Company and each of its
subsidiaries is duly qualified or intends to apply for qualification as a
foreign corporation to do business and is in good standing in every jurisdiction
in which its ownership or use of property or the nature of the business
conducted by it makes such qualification necessary, except where the failure to
be so qualified or in good standing would not have a Material Adverse Effect.
"Material Adverse Effect" means a material adverse effect on the business,
operations, assets, financial condition or prospects of the Company or its
subsidiaries, if any, taken as a whole, or on the transactions contemplated
hereby or by the agreements or instruments to be entered into in connection
herewith. "Subsidiaries" means any corporation or other organization, whether
incorporated or unincorporated, in which the Company owns, directly or
indirectly, any equity or other ownership interest.


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            b. Authorization; Enforcement. The Company has all requisite
corporate power and authority to enter into and perform this Agreement and the
agreements annexed hereto as exhibits (collectively the "Transaction
Agreements") and to consummate the transactions contemplated hereby and thereby
and to issue the Securities, in accordance with the terms hereof and thereof.
The execution and delivery of the Transaction Agreements by the Company and the
consummation by it of the transactions contemplated hereby and thereby
(including without limitation, the issuance of the Securities), have been duly
authorized by the Company's Board of Directors. This Agreement has been duly
executed and delivered by the Company by its authorized representative, and such
authorized representative is the true and official representative with authority
to sign this Agreement and the other documents executed in connection herewith
and bind the Company accordingly. This Agreement constitutes a legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms.

            c. Capitalization. As of April 7, 2005, the authorized capital stock
of the Company consists of 900,000,000 shares of Common Stock, of which
approximately 31,020,995 shares are issued and outstanding. As of March 31,
2005, the Company has a principal amount of $958,500 in 8% convertible
debentures issued in January 2004 outstanding (principal, as well as accrued
interest, are convertible at $.30 per share) and warrants to purchase 8,850,000
shares of common stock (such warrants or options are exerciseable at prices of
$0.35 to $1.20 per share, with most of those warrants exercisable at either
$0.50 or $0.75). The Company also has or is negotiating commitments or plans for
adoption that call for it to issue 5,000,000 shares and/or options or warrants
to employees, consultants, and agents pursuant to negotiations or stock
incentive plans yet to be formally adopted and approved or concluded. The
Company also entered into a letter of intent with Maverick Entertainment Plc,
pursuant to which it may be required to issue securities. All of such
outstanding reserved shares of capital stock are, or upon issuance will be duly
authorized, validly issued, fully paid and nonassessable. No shares of capital
stock of the Company are subject to preemptive rights or any other similar
rights of the shareholders of the Company or any liens or encumbrances imposed
through the actions or failure to act of the Company. Except as set forth in
this paragraph and in the SEC Documents, there are no outstanding options,
warrants, rights (including, without limitation, rights of first refusal,
anti-dilution, conversion, preemptive or similar rights) or agreements for the
purchase or acquisition from the Company of any shares of its capital stock or
any securities convertible into or ultimately exchangeable or exercisable for
any shares of its capital stockother than the Securities.

            d. Issuance of Shares. The Conversion Shares and Warrant Shares are
duly authorized and reserved for issuance and, upon conversion of the Debentures
and exercise of the Warrants in accordance with their respective terms, will be
validly issued, fully paid and non-assessable, and free from all taxes, liens,
claims and encumbrances with respect to the issue thereof and shall not be
subject to preemptive rights or other similar rights of shareholders of the
Company.

            e. Acknowledgment of Dilution. The Company understands and
acknowledges the potentially dilutive effect to the Common Stock upon the
issuance of the Conversion Shares and Warrant Shares upon conversion of the
Debenture or exercise of the Warrants. The Company further acknowledges that its
obligation to issue Conversion Shares and Warrant Shares upon conversion of the
Debentures or exercise of the Warrants in accordance with this Agreement, the
Debentures and the Warrants is absolute and unconditional regardless of the
dilutive effect that such issuance may have on the ownership interests of other
shareholders of the Company.

            f. No Conflicts. The execution, delivery and performance of this
Agreement and the other Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
(including, without limitation, the issuance and reservation for issuance of the
Conversion Shares and Warrant Shares), will not (i) conflict with or result in a
violation of any provision of the Company's Articles of Incorporation or
By-laws, (ii) violate or conflict with, or result in a breach of any provision
of, or constitute a default (or an event which with notice or lapse of time or
both could become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture, patent,
patent license or instrument to which the Company or any of its Subsidiaries is
a party, or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws and regulations
and regulations of any self-regulatory organizations to which the Company or its
securities are subject) applicable to the Company or any of its Subsidiaries or
by which any property or asset of the Company or any of its Subsidiaries is
bound or affected (except for such conflicts, defaults, terminations,
amendments, accelerations, cancellations and


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violations as would not, individually or in the aggregate, have a Material
Adverse Effect). Neither the Company nor any of its Subsidiaries is in violation
of its Articles of Incorporation, By-laws or other organizational documents and
neither the Company nor any of its Subsidiaries is in default (and no event has
occurred which with notice or lapse of time or both could put the Company or any
of its Subsidiaries in default) under, and neither the Company nor any of its
Subsidiaries has taken any action or failed to take any action that would give
to others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which the Company or any of its
Subsidiaries is a party or by which any property or assets of the Company or any
of its Subsidiaries is bound or affected, except for possible defaults as would
not, individually or in the aggregate, have a Material Adverse Effect. The
businesses of the Company and its Subsidiaries, if any, are not being conducted,
and shall not be conducted so long as a Buyer owns any of the Securities, in
violation of any law, ordinance or regulation of any governmental entity. Except
as specifically contemplated by this Agreement and as required under the 1933
Act and any applicable state securities laws, the Company is not required to
obtain any consent, authorization or order of, or make any filing or
registration with, any court, governmental agency, regulatory agency, self
regulatory organization or stock market in order for it to execute, deliver or
perform any of its obligations under this Agreement, the Debentures or the
Warrants in accordance with the terms hereof or thereof or to issue and sell the
Debentures and Warrants in accordance with the terms hereof and to issue the
Conversion Shares upon conversion of the Debentures and the Warrant Shares upon
exercise of the Warrants.

            g. Reports and Financial Statements; Absence of Certain Changes. The
Company has filed all reports, schedules, forms, statements and other documents
required to be filed by the Company with the SEC as of the date of this
Agreement (collectively, the "SEC Documents") pursuant to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the "1934
Act"), and has previously furnished or made available to Buyer true and complete
copies of such SEC Documents and shall promptly deliver to Buyer any SEC
Documents filed between the date hereof and the Closing Date. Such SEC Documents
complied with the reporting requirements with respect thereto, and none of such
SEC Documents, as of their respective dates (and as amended through the date
hereof), contained or, with respect to SEC Documents filed after the date
hereof, will contain any untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading. All reports, schedules, forms, statements and other
documents required to be filed by any person or entity with respect to the
Company pursuant to Section 16 of the 1934 Act as of the date hereof have been
filed, and do not contain any untrue statement of material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading. Since December 31, 2004, other than in the
ordinary course of business, there has been no material adverse change and no
material adverse development in the assets, liabilities, business, properties,
operations, financial condition, results of operations or prospects of the
Company or any of its Subsidiaries, except as disclosed herein or in the SEC
Documents.

            i. Intellectual Property. The Company has the rights stated herein
and in the SEC Documents (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures) and
other similar rights and proprietary knowledge (collectively, "Intangibles")
necessary for the conduct of its business as now being conducted. To the
Company's knowledge, except as disclosed herein and/or in the SEC Documents,
neither the Company nor any of its subsidiaries is infringing upon or in
conflict with any right of any other person with respect to any Intangibles.
Except as disclosed herein and/or in the SEC Documents, no adverse claims have
been asserted by any person to the ownership or use of any Intangibles and the
Company has no knowledge of any basis for such claim.

                  The obligations of the Company under the Debentures shall be
secured by that certain Security Agreement by and between the Company and the
Holder entered into in connection with the Debentures; the security interest
rights granted to the Buyer are behind those previously granted to existing
debenture holders, and shall be on an equal level to the security interest
rights granted to third party purchasers in the Company's sale of debentures, on
terms and conditions similar to the terms herein, in the principal amount of
$1,000,000 occurring on or about the same time as this Agreement. The Company
shall be entitled to grant security interest rights senior to the rights of the
Buyer to a financial institution, subject to the approval of the Buyer, which
shall not be unreasonably withheld. The Company shall be entitled to grant
security interest rights similar to the rights granted to the Buyer to lender(s)
hereafter providing at least $1,500,000 or more in working capital, subject to
the approval of the Buyer, which shall not be unreasonably withheld.


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            p. Trading in Securities. The Company specifically acknowledges
that, except to the extent specifically provided herein or in any of the other
Transaction Agreements (but limited in each instance to the extent so
specified), Buyer retain the right (but are not otherwise obligated) to buy,
sell, engage in hedging transactions or otherwise trade in the securities of the
Company, including, but not necessarily limited to, the Securities, at any time
before, contemporaneous with or after the execution of this Agreement or from
time to time, but only, in each case, in any manner whatsoever permitted by
applicable federal and state securities laws.

            q. Fees to Brokers, Finders and Others. The Company may utilize a
placement agent in connection with the Private Placement, and such placement
agent, if any, shall receive a cash commission fee of up to 10% of the gross
amount raised, and five year placement agent warrants similar to the Warrants,
but with the addition of cashless exercise, equal to 10% of the number of five
year investor Warrants issued to investors, or such other fee as may be
negotiated by the Company and the placement agent. Buyer shall have no
obligation with respect to such fees or with respect to any claims made by or on
behalf of other Persons for fees of a type contemplated in this paragraph that
may be due in connection with the transactions contemplated hereby. The Company
shall indemnify and hold harmless each of Buyer, their employees, officers,
directors, agents, and partners, and their respective Affiliates, from and
against all claims, losses, damages, costs (including the costs of preparation
and attorney's fees) and expenses suffered in respect of any such claimed or
existing fees, as and when incurred.

      4. COVENANTS.

            a. SEC Reporting. So long as Buyer beneficially owns any of the
Securities, the Company shall use best efforts to timely file all reports
required to be filed with the SEC pursuant to the 1934 Act, and the Company
shall use best efforts to maintain its status as an issuer filing reports under
the 1934 Act even if the 1934 Act or the rules and regulations thereunder would
permit such termination.

            b. Use of Proceeds. The Company shall use the proceeds from the sale
of the Securities for its working capital.

            c. Listing. The Company will use best efforts, so long as Buyer owns
at least one-third of the Securities, to maintain the quoting/listing and
trading of its Common Stock on the OTCBB or any equivalent or replacement
quotation service or exchange, including, but not limited to, the Nasdaq
National Market ("Nasdaq"), the Nasdaq SmallCap Market ("Nasdaq SmallCap"), the
New York Stock Exchange ("NYSE"), or the American Stock Exchange ("AMEX") and
will comply in all respects with the Company's reporting, filing and other
obligations under the bylaws or rules of the National Association of Securities
Dealers ("NASD") and such exchanges, as applicable. The Company will promptly
notify Buyer regarding the continued eligibility of the Common Stock for listing
or quotation should there be a material change.

            e. Corporate Existence. So long as Buyer beneficially owns any
Debentures or Warrants, the Company shall maintain its corporate existence and
shall not sell all or substantially all of the Company's assets, except in the
event of a merger or consolidation or sale of all or substantially all of the
Company's assets, where the surviving or successor entity in such transaction
(i) assumes the Company's obligations hereunder and under the agreements and
instruments entered into in connection herewith and (ii) is a publicly traded
corporation whose Common Stock is listed for trading on the OTCBB, Nasdaq,
Nasdaq SmallCap, NYSE or AMEX, or any other equivalent or replacement quotation
service or exchange.

            f. Registration Rights. If the Company proposes to register any of
its securities under the Securities Act for sale to the public, whether for its
own account or for the account of other security holders or both (except with
respect to registration statements on Forms S-4, S-8 and any successor forms
thereto), each such time it will give written notice to such effect to each
holder of the Securities from time to time (a "Holder") at least ten days prior
to such filing. Upon the written request of any Holder, received by the Company
within ten days after the giving of any such notice by the Company, to register
any of its shares of common stock eligible to be registered, the Company will
cause such shares as Buyer has a right to own pursuant to ownership of the
Securities to be covered by the registration statement proposed to be filed by
the Company. Notwithstanding the foregoing, in the event that any registration
pursuant to this provision shall be, in whole or in part, an underwritten public
offering of common stock, the number of shares to be included in such an
underwriting may be reduced (pro rata among the requesting


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holders and the Company's placement agent and its assigns (based upon the number
of Shares requested to be registered by them)) if and to the extent that the
managing underwriter shall be of the good faith opinion that such inclusion
would reduce the number of shares to be offered by the Company, its other
securities owners, the placement agent and its assigns or requesting holders of
Shares. Notwithstanding the foregoing provisions, the Company may withdraw any
registration statement referred to in this provision without thereby incurring
any liability to any Holder. In the event that the SEC restricts or prohibits
the inclusion of any part of the common stock included in the registration
statement on the basis of integration or that such securities are not deemed
owned or paid for or any other reason, the Company shall not register such
shares. Holder shall cooperate with the Company in furnishing such information
regarding itself as reasonably needed to prepare, file and effect the
registration statement, and the failure to cooperate shall suspend the Company's
obligations discussed in this paragraph.

                  Notwithstanding anything to the contrary, if the Company has
not filed a registration statement within six months hereof, Buyer shall be
entitled to demand the filing of a registration statement covering the resale of
the shares of common stock underlying the Securities purchased pursuant to this
Agreement. Such demand shall be consistent with the Company's year-end federal
securities reporting obligations.

                  All expenses other than underwriting discounts and commissions
incurred in connection with registrations, filings or qualifications pursuant to
this paragraph, including, without limitation, all registration, filing and
qualification fees (including "blue sky" fees), printers' and accounting fees,
fees and disbursements of counsel for the Company (including fees and
disbursements of counsel for the Company) shall be borne by the Company.

                  Whenever required under this paragraph to effect the
registration of any shares of Common Stock underlying Securities of a Holder,
the Company shall, as expeditiously as is feasible:

                        (i) prepare and file with the SEC a registration
statement with respect to such shares of Common Stock underlying Securities and
use commercially reasonable efforts to cause such registration statement to
become effective, and keep such registration statement effective for a period of
up to 120 days or, if earlier, until the distribution contemplated in such
registration statement has been completed; provided, however, that such 120 day
period shall be extended for a period of time equal to the period a Holder
refrains from selling any securities included in such registration at the
request of an underwriter of Common Stock (or other securities) of the Company;

                        (ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Act with respect to the disposition of all securities covered
by such registration statement;

                        (iii) furnish to each Holder (A) a draft copy of the
registration statement and (B) a prospectus, including a preliminary prospectus,
in conformity with the requirements of the 1933 Act, and such other documents as
it may reasonably request in order to facilitate the disposition of Securities
owned by it;

                        (iv) in the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting, if any, shall also enter into and perform
its obligations under such an agreement. In connection with any offering
involving an underwriting of shares of the Company's capital stock, the Company
shall not be required to include any of the Holders' securities in such
underwriting unless they accept the terms of the underwriting as agreed upon
between the Company and the underwriters selected by the Company and enter into
an underwriting agreement in customary form with an underwriter or underwriters
selected by the Company. If the total amount of securities, including shares of
Common Stock underlying Securities of a Holder, to be included in such offering
exceeds the amount of securities that the underwriters determine in their sole
discretion is compatible with the success of the offering, then the Company
shall be required to include in the offering only that number of securities that
the underwriters determine in their sole discretion will not jeopardize the
success of the offering;


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<PAGE>

                        (v) notify each Holder of Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the 1933 Act, of (i) the issuance of any stop
order by the SEC in respect of such registration statement, or (ii) the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing; and.

                        (vi) use commercially reasonable efforts to register and
qualify the securities covered by such registration statement under such other
securities or "blue sky" laws of such jurisdictions as shall be reasonably
requested by a Holder, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business, where
not otherwise required, or to file a general consent to service of process in
any such states or jurisdictions, unless the Company is already subject to
service in such jurisdiction and except as may be required by the 1933 Act.

      5. CONDITIONS TO THE COMPANY'S OBLIGATION. The obligation of the Company
hereunder to issue and sell the Securities to Buyer at the Closing is subject to
the satisfaction, at or before the Closing Date of each of the following
conditions thereto, provided that these conditions are for the Company's sole
benefit and may be waived by the Company at any time in its sole discretion:

            a. Buyer shall have executed this Agreement, and delivered the same
to the Company.

            b. Buyer shall have delivered and the Company shall have received
the Purchase Price in accordance with Section 1.

            c. The representations and warranties of Buyer shall be true and
correct in all material respects as of the date when made and as of the Closing
Date as though made at that time (except for representations and warranties that
speak as of a specific date), and Buyer shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by Buyer
at or prior to the Closing Date.

            d. No undisclosed litigation, statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by or in any court or governmental authority of
competent jurisdiction or any self-regulatory organization having authority over
the matters contemplated hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.

      6. CONDITIONS TO BUYER'S OBLIGATION. The obligation of Buyer to purchase
the Securities at the Closing is subject to the satisfaction, at or before the
Closing Date of each of the following conditions, provided that these conditions
are for Buyer's sole benefit and may be waived by Buyer at any time in its sole
discretion:

            a. The Company shall have executed this Agreement and the Warrant
Agreement. The Company shall have submitted irrevocable instructions to its
transfer agent for the issuance of the Common Stock.

            b. The representations and warranties of the Company shall be true
and correct in all material respects as of the date when made and as of the
Closing Date as though made at such time (except for representations and
warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the Closing Date.

            c. No litigation, statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by or in any court or governmental authority of competent jurisdiction
or any self-regulatory organization having authority over the matters
contemplated hereby which prohibits the consummation of any of the transactions
contemplated by this Agreement.

      7. GOVERNING LAW; MISCELLANEOUS.


                                       8
<PAGE>

            a. Governing Law. THIS AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS AND THE NEW YORK
STATE COURTS LOCATED IN NEW YORK COUNTY IN THE STATE OF NEW YORK WITH RESPECT TO
ANY DISPUTE ARISING UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED INTO IN
CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. BOTH
PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE
OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER. The Company and Buyer hereby waive a trial by jury in any action,
proceeding or counterclaim brought by either of the Parties hereto against the
other in respect of any matter arising out or in connection with the Transaction
Agreements.

            b. Counterparts; Signatures by Facsimile. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original
but all of which shall constitute one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party. This Agreement, once executed by a party, may be delivered to the
other party hereto by facsimile transmission of a copy of this Agreement bearing
the signature of the party so delivering this Agreement.

            c. Headings. The headings of this Agreement are for convenience of
reference only and shall not form part of, or affect the interpretation of, this
Agreement.

            d. Severability. In the event that any provision of this Agreement
is invalid or unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any provision hereof which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision hereof.

            e. Entire Agreement; Amendments. This Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor Buyer makes any representation,
warranty, covenant or undertaking with respect to such matters. Except as
provided herein, no provision of this Agreement may be waived or amended other
than by an instrument in writing signed by the party to be charged with
enforcement.

            f. Notices. Any notices required or permitted to be given under the
terms of this Agreement shall be sent by certified or registered mail (return
receipt requested) or delivered personally or by courier (including a recognized
overnight delivery service) or by facsimile and shall be effective five days
after being placed in the mail, if mailed by regular United States mail, or upon
receipt, if delivered personally or by courier (including a recognized overnight
delivery service) or by facsimile, in each case addressed to a party. The
addresses for such communications shall be:


                                       9
<PAGE>

                  If to the Company:
                  Attn.:   Wilfred Shorrocks, President
                  Peak Entertainment Holdings, Inc.
                  Bagshaw Hall, Bagshaw Hill
                  Bakewell, Derbyshire, UK DE45 1DL
                  Tel:  +44(0)1629 814555
                  Fax:  +44(0)1629 813539

                  With a copy (which shall not constitute notice) to:

                  Attn.:  Dan Brecher, Esq.
                  Law Offices of Dan Brecher
                  99 Park Avenue, 16th Floor
                  New York, NY 10016
                  Tel:  212-286-0747
                  Fax:  212-808-4155

                  If to Buyer:
                  At the address and facsimile number listed on the signature
                  page hereof.

Each party shall provide notice to the other party of any change in address.

            g. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns. Neither
the Company nor any Buyer shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other.
Notwithstanding the foregoing, subject to Section 2(f), any Buyer may assign its
rights hereunder to any person that purchases Securities in a private
transaction fromBuyer or to any of its affiliates.

            h. Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

            i. Further Assurances. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

            j. No Strict Construction. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.

            k. Remedies. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to Buyer by vitiating the
intent and purpose of the transaction contemplated hereby. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
under this Agreement will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Agreement, that Buyer
shall be entitled, in addition to all other available remedies at law or in
equity.

            l. Survival. The representations, warranties and covenants made by
each of the Company and Buyer in this Agreement, the annexes, schedules and
exhibits hereto and in each instrument, agreement and certificate entered into
and delivered by them pursuant to this Agreement, shall survive the Closing and
the consummation of the transactions contemplated hereby. In the event of a
breach or violation of any of such representations, warranties or covenants, the
party to whom such representations, warranties or covenants have been made shall
have all rights and remedies for such breach or violation available to it under
the provisions of this Agreement, irrespective of any investigation made by or
on behalf of such party on or prior to the Closing Date.


                                       10
<PAGE>

            m. Indemnification.

                  (a) The Company hereby agrees to indemnify and hold harmless
Buyer and its officers, directors, partners and members (collectively, the
"Buyer Indemnitees"), from and against any and all damages, and agrees to
reimburse Buyer Indemnitees for all reasonable out-of-pocket expenses (including
the reasonable fees and expenses of legal counsel), in each case promptly as
incurred by Buyer Indemnitees and to the extent arising out of or in connection
with:

                        (i) any material misrepresentation, omission of fact or
breach of any of the Company's representations or warranties contained in this
Agreement, the annexes, schedules or exhibits hereto or any instrument,
agreement or certificate entered into or delivered by the Company pursuant to
this Agreement; or

                        (ii) any material failure by the Company to perform in
any material respect any of its covenants, agreements, undertakings or
obligations set forth in this Agreement, the annexes, schedules or exhibits
hereto or any instrument, agreement or certificate entered into or delivered by
the Company pursuant to this Agreement; or

                        (iii) any action instituted against any Buyer, or any of
its affiliates, by any stockholder of the Company who is not an affiliate of
Buyer, with respect to any of the transactions contemplated by this Agreement.

                  (b) Buyer hereby agrees to indemnify and hold harmless the
Company, its affiliates and its respective officers, directors, partners and
members (collectively, the "Company Indemnitees"), from and against any and all
damages, and agrees to reimburse the Company Indemnitees for reasonable all
out-of-pocket expenses (including the reasonable fees and expenses of legal
counsel), in each case promptly as incurred by the Company Indemnitees and to
the extent arising out of or in connection with:

                        (i) any material misrepresentation, omission of fact, or
breach of any of any Buyer's representations or warranties contained in this
Agreement, the annexes, schedules or exhibits hereto or any instrument,
agreement or certificate entered into or delivered by Buyer pursuant to this
Agreement; or

                        (ii) any material failure by Buyer to perform in any
material respect any of its covenants, agreements, undertakings or obligations
set forth in this Agreement or any instrument, certificate or agreement entered
into or delivered by Buyer pursuant to this Agreement.

                  (c) Promptly after receipt by either party hereto seeking
indemnification pursuant to this Section 7(m) (an "Indemnified Party") of
written notice of any investigation, claim, proceeding or other action in
respect of which indemnification is being sought (each, a "Claim"), the
Indemnified Party promptly shall notify the party from whom indemnification
pursuant to this Section 7(m) is being sought (the "Indemnifying Party") of the
commencement thereof; but the omission to so notify the Indemnifying Party shall
not relieve it from any liability that it otherwise may have to the Indemnified
Party, except to the extent that the Indemnifying Party is actually prejudiced
by such omission or delay. In connection with any Claim as to which both the
Indemnifying Party and the Indemnified Party are parties, the Indemnifying Party
shall be entitled to assume the defense thereof. Notwithstanding the assumption
of the defense of any Claim by the Indemnifying Party, the Indemnified Party
shall have the right to employ separate legal counsel and to participate in the
defense of such Claim, and the Indemnifying Party shall bear the reasonable
fees, out-of-pocket costs and expenses of such separate legal counsel to the
Indemnified Party if (and only if): (x) the Indemnifying Party shall have agreed
to pay such fees, out-of-pocket costs and expenses, (y) the Indemnified Party
reasonably shall have concluded that representation of the Indemnified Party and
the Indemnifying Party by the same legal counsel would not be appropriate due to
actual or, as reasonably determined by legal counsel to the Indemnified Party,
potentially differing interests between such parties in the conduct of the
defense of such Claim, or if there may be legal defenses available to the
Indemnified Party that are in addition to or disparate from those available to
the Indemnifying Party, or (z) the Indemnifying Party shall have failed to
employ legal counsel reasonably satisfactory to the Indemnified Party within a
reasonable period of time after notice of the commencement of such Claim. If the
Indemnified Party employs separate legal counsel in circumstances other than as
described in clauses (x), (y) or (z) above, the fees, costs and expenses of such
legal counsel shall be borne exclusively by the Indemnified Party. Except as
provided above, the Indemnifying Party


                                       11
<PAGE>

shall not, in connection with any Claim in the same jurisdiction, be liable for
the fees and expenses of more than one firm of legal counsel for the Indemnified
Party (together with appropriate local counsel). The Indemnifying Party shall
not, without the prior written consent of the Indemnified Party (which consent
shall not unreasonably be withheld), settle or compromise any Claim or consent
to the entry of any judgment that does not include an unconditional release of
the Indemnified Party from all liabilities with respect to such Claim or
judgment.

            n. Certain Fees. Each party will bear its own expenses and fees in
connection with this Agreement.

                            [signature page follows]


                                       12
<PAGE>

      IN WITNESS WHEREOF, the undersigned Buyer and the Company have caused this
Agreement to be duly executed as of the date first above written.

THE COMPANY:                           PEAK ENTERTAINMENT HOLDINGS, INC.

                                       By:
                                          --------------------------------------
                                          Wilf Shorrocks
                                          President and Chief Executive Officer

BUYER:                                 _________________________________________

                                       By:
                                          --------------------------------------
                                          Name:
                                          Title: _____________________

                                       STATE OF INCORPORATION/FORMATION:
                                                                        --------

                                       ADDRESS:
                                               ---------------------------------

                                               ---------------------------------
                                       TELEPHONE:
                                                 -------------------------------
                                       FACSIMILE:
                                                 -------------------------------

                                       AMOUNT INVESTED:  $_________________


                                       13
<PAGE>

                        PEAK ENTERTAINMENT HOLDINGS, INC.

                                  RISK FACTORS

                              Dated: April 30, 2005

An investment in the Company has a high degree of risk. In connection with the
Securities Purchase Agreement, before you invest you should carefully consider
the risks and uncertainties associated with our business and operations. Certain
risks are summarized below and other information is disclosed by the Company in
its filings with the S.E.C. If any of the following risks actually occur, our
business, operating results and financial condition could be harmed and the
value of our stock could go down. This means you could lose all or a part of
your investment.

o     Any future success that we might enjoy will depend upon many factors,
      including factors out of our control or which cannot be predicted at this
      time, including when financing can be obtained to complete production of
      television shows, market acceptance and sale of broadcast rights for our
      shows, increased levels of competition, increases in production costs for
      the shows, and other factors.
o     If our products are unable to attract the attention of children,
      television broadcasters will not order television programs from us, and we
      will not be able to promote, market or sell merchandise and other consumer
      products based on the television shows.
o     Even if the shows are initially popular, a decline in the popularity of
      our shows, or the failure of merchandise products and licensed rights to
      achieve and sustain market acceptance could result in reduced overall
      revenues.
o     Forecasting revenues and gross profits is extremely difficult. It is
      difficult to predict the worldwide appeal of the television shows we are
      developing before the premiers of the shows. We cannot accurately predict
      when or if we will achieve or sustain profitability.
o     In connection with our planned entertainment projects, we require
      substantial capital expenditures and expect to incur significant operating
      expenses and, probably, significant losses in the near future. We will
      devote significant financial resources to the development and production
      of television shows targeted for the children's market, and will not know
      whether the shows will have broad consumer appeal until after the shows
      have been broadcast. If we are unable to obtain additional funding to
      finance production costs, our business operations will be harmed and if we
      do obtain additional financing our then existing shareholders may suffer
      substantial dilution.
o     We are a very highly leveraged company, with significant liabilities and
      pending or threatened claims and actions. Debenture holders hold security
      interests in substantially all of our collateral. Our independent auditors
      have expressed substantial doubt about our ability to continue as a going
      concern, which may hinder our ability to obtain future financing.
o     We need to improve our reporting and internal controls and procedures. We
      have not yet filed audited financial statements for the year ended
      December 31, 2004. Our Form 10-KSB for the year ended December 31, 2004
      contained unaudited financial information, so we are not current in our
      filings. A copy of a letter, dated April 14, 2005, from our accountants
      regarding the unaudited financial information for the year ended December
      31, 2004 is provided to you with these Risk Factors. We have in the past
      submitted filings with the S.E.C. after the due date of such quarterly and
      annual reports. Our stock symbol is currently "PKEHE", and, if we fail to
      be or remain current on our reporting requirements, we could be removed
      from the OTC Bulletin Board which would limit the ability of
      broker-dealers to sell our securities and the ability of stockholders to
      sell their securities in the secondary market.
o     The loss of current licenses or the inability to successfully develop
      those properties could significantly hinder our ability to achieve or
      maintain profitable operations.
o     We issued, and may continue to issue, a large number of shares of common
      stock and securities convertible into common stock, that may be available
      for future sale, and the sale of these shares may depress the market price
      of our common stock.
o     Our common stock is subject to the "penny stock" rules of the SEC and the
      trading market in our securities is limited, which makes transactions in
      our stock cumbersome and may reduce the value of an investment in our
      stock. Generally, brokers may be less willing to execute transactions in
      securities Subject to the "penny stock" rules. This may make it more
      difficult for Investors to dispose of our common stock and cause a decline
      in the market value of our stock.


                                       14
<PAGE>

                            ACKNOWLEDGMENT OF RECEIPT
                         OF DOCUMENTS IN CONNECTION WITH
                              THE PRIVATE PLACEMENT
                 PURSUANT TO SECURITIES PURCHASE AGREEMENT WITH
                        PEAK ENTERTAINMENT HOLDINGS, INC.

      The undersigned, in connection with the Private Placement being conducted
pursuant to a Securities Purchase Agreement, dated as of April 2005, hereby
acknowledges that the undersigned has received and read the Securities Purchase
Agreement and Exhibits A (Convertible Debenture), B (Warrant), C (Security
Agreement) and D (Intellectual Property Security Agreement) thereto, the Risk
Factors dated April 30, 2005, and the Accredited Investor Questionnaire.

                                       Print Name:
                                                  ------------------------------

                                       Signature:
                                                 -------------------------------

                                       Date:
                                            ------------------------------------


<PAGE>

                                                                       EXHIBIT A

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE SECURITIES MAY NOT BE
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM,
SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR UNLESS SOLD PURSUANT TO RULE
144 UNDER SAID ACT.

                        PEAK ENTERTAINMENT HOLDINGS, INC.

                            12% CONVERTIBLE DEBENTURE

Debenture No. 0405.___

      THIS DEBENTURE is issued by Peak Entertainment Holdings, Inc., a
corporation organized and existing under the laws of the State of Nevada (the
"Company") and is designated as its 12% Convertible Debenture (the
"Debentures").

      FOR VALUE RECEIVED, the Company promises to pay to _________________ (the
"Holder"), the principal sum of _______________________ ($_________) on the
Maturity Date (as defined herein) and to pay interest on the principal sum
outstanding from time to time annually in arrears at the rate of twelve percent
(12%) per annum, compounded annually, accruing from the date of the first
closing of the private placement pursuant to which these Debentures are issued
(the "Private Placement"). The "Maturity Date" is the earlier of 270 days from
the first closing of the Private Placement or any future funding of any dollar
amount (excluding funds pursuant to the Private Placement) equaling 15% more
than amounts closed pursuant to the Private Placement at that point in time. The
Company will pay the principal of, and any accrued but unpaid interest due upon
this Debenture on the Maturity Date, by check or wire transfer to the person who
is the registered holder of this Debenture as of the tenth day prior to the
Maturity Date and addressed to such holder at the last address appearing on the
Debenture Register. The forwarding of such check or money order shall constitute
a payment of principal and interest hereunder and shall satisfy and discharge
the liability for principal and interest on this Debenture to the extent of the
sum represented by such check or wire transfer plus any amounts so deducted. The
obligations of the Company under this Debenture shall be secured by that certain
Security Agreement by and between the Company and the Holder entered into in
connection with these Debentures.

      This Debenture is subject to the following additional provisions:

      1. The Company shall be entitled to withhold from all payments of interest
on this Debenture any amounts required to be withheld under the applicable
provisions of the United States income tax laws or other applicable laws at the
time of such payments, and the Holder shall execute and deliver all required
documentation in connection therewith.

      2. This Debenture has been issued subject to investment representations of
the original purchaser hereof and may be transferred or exchanged only in
compliance with the Securities Act of 1933, as amended (the "Act"), and other
applicable state and foreign securities laws. The Holder shall deliver written
notice to the Company of any proposed transfer of this Debenture. In the event
of any proposed transfer of this Debenture, the Company may require, prior to
issuance of a new Debenture in the name of such other person, that it receive
reasonable transfer documentation including legal opinions that the issuance of
the Debenture in such other name does not and will not cause a violation of the
Act or any applicable state or foreign securities laws. Prior to due presentment
for transfer of this Debenture, the Company and any agent of the Company may
treat the person in whose name this Debenture is duly registered on the
Company's Debenture Register as the owner hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether or not this
Debenture be overdue, and neither the Company nor any such agent shall be
affected by notice to the contrary. This Debenture has been executed and
delivered pursuant to the Securities Purchase Agreement between the Company and
the Holder entered into as of even date (the "Securities Purchase Agreement"),
and is subject to the terms and conditions


                                       1
<PAGE>

of the Securities Purchase Agreement, which are, by this reference, incorporated
herein and made a part hereof. Capitalized terms used and not otherwise defined
herein shall have the meanings set forth for such terms in the Securities
Purchase Agreement.

      3. The Holder of this Debenture is entitled, at its option, to convert at
any time commencing on the date of this Agreement, the principal amount of this
Debenture or any portion thereof, into shares of Common Stock of the Company
("Conversion Shares") at the valuation of $0.30 per share ("Bridge Valuation" or
"Conversion Price"), subject to adjustment for stock splits and the like. Any
conversion at or prior to maturity of this Debenture shall constitute a waiver
of all accrued interest on the Debenture. If, upon any conversion of this
Debenture, the Company's issuance of Conversion Shares would cause it to violate
any listing requirement of the OTCBB or other public market through which the
Company's Common Stock is listed or quoted, then in lieu of such stock issuance,
the Company shall pay the Holder cash in an amount equal to the closing price of
the Common Stock on the Conversion Date multiplied by the number of shares which
would otherwise have been issuable upon such conversion within five (5) calendar
days.

            In case of any stock split or reverse stock split, stock dividend,
reclassification of the common stock, recapitalization, merger or consolidation,
or like capital adjustment affecting the Common Stock of the Company, the
provisions of this Section 3 shall be applied in a fair, equitable and
reasonable manner so as to give effect, as nearly as may be, to the purposes
hereof.

            The Conversion Price shall be adjusted for dilutive issuances of
securities for value by the Company which shall constitute an Adjustment Event,
as defined herein. The term "Adjustment Event" shall mean any issuance by the
Company for the Company's common stock or convertible in to the Company's common
stock (excluding securities issued to the Company's employees, directors,
consultants and others similarly situtated in the ordinary course of business
and not for capital raising purposes) below the lower of (a) $.30 per common
share, or (b) fair market value for such securities as determined at the time of
issuance. Upon the occurrence of an Adjustment Event, appropriate and
proportionate adjustments shall be made to the Conversion Price on a penny for
penny basis. The good faith determination by the Board of Directors as to what
adjustments, amendments or arrangements shall be made to the Conversion Price,
and the extent thereof, shall be final and conclusive, provided that the
Conversion Price is adjusted in a manner that is no less favorable than the
manner of adjustment used as to any other person with similar adjustment rights.

      4. The rate of interest on this Debenture shall be twelve percent (12%),
per annum, on the outstanding principal until paid or converted. If any interest
payment date or the Maturity Date is not a business day in the State of New
York, then such payment shall be made on the next succeeding business day.
Accrual of interest shall commence on the first business day to occur after the
date of closing of the Securities Purchase Agreement and continue until payment
in full of the principal sum has been made or duly provided for.

      5. On the Maturity Date, the Company will pay the principal of, and any
accrued but unpaid interest due upon, this Debenture, less any amounts required
by law to be deducted, to the registered holder of this Debenture and addressed
to such holder at the last address appearing on the Debenture Register.

            If the outstanding Debenture held by the Holder are not paid in full
on maturity, and has not been converted, there will be a cash penalty equal to
1.5% of the outstanding principal amount of the Debenture, compounded monthly
for each month that payment in full is not effected, up to a maximum cash
penalty equal to 9% of the outstanding principal amount of the Debenture, and,
in addition, there will be monthly reduction in warrant exercise price of the
warrants issued pursuant to the Securities Purchase Agreement at the rate of
2.5% and up to a maximum of 20% reduction in the exercise price.

      6. Conversion of all or a part of this Debenture shall be effectuated by
surrendering this Debenture to the Company (if such Conversion will convert all
outstanding principal) together with the form of conversion notice attached
hereto as Exhibit A (the "Notice of Conversion"), executed by the Holder of this
Debenture evidencing such Holder's intention to convert this Debenture or a
specified portion (as above provided) hereof, and accompanied, if required by
the Company, by proper assignment hereof in blank. No fraction of a share or
scrip representing a fraction of a share will be issued on conversion, but the
number of shares issuable shall be rounded to the nearest whole share. The date
on which Notice of Conversion is given (the "Conversion Date") shall be deemed


                                       2
<PAGE>

to be the date on which the Holder faxes the Notice of Conversion duly executed
to the Company. Facsimile delivery of the Notice of Conversion shall be accepted
by the Company at facsimile number +44(0)1629 813539, Attn.: Wilfred Shorrocks,
President, to the Company's attorneys, Law Offices of Dan Brecher at facsimile
number 212-808-4155, Attn.: Kenneth Oh, or such other facsimile number provided,
in writing, by the Company. Certificates representing Common Stock upon
conversion will be delivered to the Holder within three (3) Trading Days from
the date the Notice of Conversion is delivered to the Company ("Delivery Date").
Delivery of shares upon conversion shall be made to the address specified by the
Holder in the Notice of Conversion.

      7. No provision of this Debenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of, and
interest on, this Debenture at the time, place, and rate, and in the coin or
currency or shares of Common Stock herein prescribed. This Debenture is a direct
obligation of the Company.

      8. No recourse shall be had for the payment of the principal of, or the
interest on, this Debenture, or for any claim based hereon, or otherwise in
respect hereof, against any incorporator, shareholder, employee, officer or
director, as such, past, present or future, of the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.

      9. (a) In case of any (1) merger or consolidation of the Company with or
into another third party entity, excluding non-material transactions with
parent, subsidiaries or affiliates, or (2) sale by the Company of more than
one-half of the assets of the Company (on an as valued basis) in one or a series
of related transactions, the Holder shall have the right to (A) deem such an
occurrence an Event of Default and exercise its rights of prepayment pursuant to
Paragraph 12 herein, (B) convert its aggregate principal amount of this
Debenture then outstanding into the shares of stock and other securities, cash
and property receivable upon or deemed to be held by holders of Common Stock
following such merger, consolidation or sale, and the Holder shall be entitled
upon such event or series of related events to receive such amount of
securities, cash and property as the shares of Common Stock into which such
aggregate principal amount of this Debenture could have been converted
immediately prior to such merger, consolidation or sales would have been
entitled, or (C) in the case of a merger or consolidation, (x) require the
surviving entity to issue convertible debentures with such aggregate stated
value or in such face amount, as the case may be, equal to the aggregate
principal amount of this Debenture then held by the Holder, plus all accrued and
unpaid interest and other amounts owing thereon, which newly issued debentures
shall have terms identical (including with respect to conversion) to the terms
of this Debenture and shall be entitled to all of the rights and privileges of
the Holder of this Debenture set forth herein and the agreements pursuant to
which this Debenture was issued (including, without limitation, as such rights
relate to the acquisition, transferability, registration and listing of such
shares of stock and other securities issuable upon conversion thereof), and (y)
simultaneously with the issuance of such convertible debentures, shall have the
right to convert such instrument only into shares of stock and other securities,
cash and property receivable upon or deemed to be held by holders of Common
Stock following such merger or consolidation. In the case of clause (C), the
conversion price applicable for the newly convertible debentures shall be based
upon the amount of securities, cash and property that each share of Common Stock
would receive in such transaction and the Conversion Price in effect immediately
prior to the effectiveness or closing date for such transaction. The terms of
any such merger, sale or consolidation shall include such terms so as to
continue to give the Holder the right to receive the securities, cash and
property set forth in this Paragraph upon any conversion or redemption following
such event. This Paragraph shall similarly apply to successive such events.

            (b) If, at any time while any portion of this Debenture remains
outstanding, the Company spins off or otherwise divests itself of a part of its
business or operations or disposes of all or of a part of its assets in a
transaction (the "Spin Off") in which the Company, in addition to or in lieu of
any other compensation received and retained by the Company for such business,
operations or assets, causes securities of another entity (the "Spin Off
Securities") to be issued to security holders of the Company, the Company shall
cause (i) to be reserved Spin Off Securities equal to the number thereof which
would have been issued to the Holder had all of the Holder's Debentures
outstanding on the record date (the "Record Date") for determining the amount
and number of Spin Off Securities to be issued to security holders of the
Company (the "Outstanding Debentures") been converted as of the close of
business on the trading day immediately before the Record Date (the "Reserved
Spin Off Shares"), and (ii) to be issued to the Holder on the conversion of all
or any of the Outstanding Debentures, such amount of the Reserved Spin Off
Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction,
of which (I) the


                                       3
<PAGE>

numerator is the principal amount of the Outstanding Debentures then being
converted, and (II) the denominator is the principal amount of the Outstanding
Debentures.

      10. The Holder of the Debenture, by acceptance hereof, agrees that this
Debenture is being acquired for investment and that such Holder will not offer,
sell or otherwise dispose of this Debenture or the Conversion Shares except
under circumstances which will not result in a violation of the Act or any
applicable state Blue Sky or foreign laws or similar laws relating to the sale
of securities.

      11. This Debenture shall be governed by and construed in accordance with
the laws of the State of New York. Each of the parties consents to the
jurisdiction of the federal courts and the state courts located in New York
County in the State of New York in connection with any dispute arising under
this Agreement and hereby waives, to the maximum extent permitted by law, any
objection, including any objection based on forum non conveniens, to the
bringing of any such proceeding in such jurisdictions.

      12. The following shall constitute an "Event of Default":

            a. The Company shall default in the payment of principal or interest
on this Debenture at the Maturity Date and same shall continue for a period of
twenty business days; or

            b. Any of the material representations or warranties made by the
Company herein, in the Securities Purchase Agreement, the Registration Rights
Agreement, or in any agreement, certificate or financial statements heretofore
or hereafter furnished by the Company in connection with the execution and
delivery of this Debenture or the Securities Purchase Agreement shall be false
or misleading in any material respect at the time made; or

            c. The Company fails to issue shares of Common Stock to the Holder
or to cause its Transfer Agent to issue shares of Common Stock upon proper
exercise by the Holder of the conversion rights of the Holder in accordance with
the terms of this Debenture, fails to transfer or to cause its Transfer Agent to
transfer any certificate for shares of Common Stock issued to the Holder upon
conversion of this Debenture as and when required by this Debenture or the
Registration Rights Agreement, and such transfer is otherwise lawful, or fails
to remove any restrictive legend or to cause its Transfer Agent to transfer any
certificate or any shares of Common Stock issued to the Holder upon conversion
of this Debenture as and when required by this Debenture, the Securities
Purchase Agreement or the Registration Rights Agreement and such legend removal
is otherwise lawful, and any such failure shall continue uncured for twenty
business days; or

            d. The Company shall, without cause, fail to perform or observe, in
any material respect, any other material covenant, term, provision, condition,
agreement or obligation of the Company under the Securities Purchase Agreement,
the Registration Rights Agreement or this Debenture and such failure shall
continue uncured for a period of thirty days after written notice from the
Holder of such failure; or

            e. The Company shall (1) admit in writing its inability to pay its
debts generally as they mature; (2) make an assignment for the benefit of
creditors or commence proceedings for its dissolution; or (3) apply for or
consent to the appointment of a trustee, liquidator or receiver for its or for a
substantial part of its property or business; or

            f. A trustee, liquidator or receiver shall be appointed for the
Company or for a substantial part of its property or business without its
consent and shall not be discharged within sixty (60) days after such
appointment; or

            g. Any governmental agency or any court of competent jurisdiction at
the instance of any governmental agency shall assume custody or control of the
whole or any substantial portion of the properties or assets of the Company and
shall not be dismissed within sixty (60) days thereafter; or

            h. Bankruptcy, reorganization, insolvency or liquidation proceedings
or other proceedings for relief under any bankruptcy law or any law for the
relief of debtors shall be instituted by or against the Company and, if
instituted against the Company, shall not be dismissed within sixty (60) days
after such institution or the


                                       4
<PAGE>

Company shall by any action or answer approve of, consent to, or acquiesce in
any such proceedings or admit the material allegations of, or default in
answering a petition filed in any such proceeding; or

            i. Upon a properly noticed Notice of Conversion, the Company fails
to deliver Conversion Shares, when lawful to do so, within 10 Trading Days of
such Notice of Conversion.

      Then, or at any time thereafter, and in each and every such case, unless
such Event of Default shall have been waived in writing by the Holder (which
waiver shall not be deemed to be a waiver of any subsequent default), at the
option of the Holder, and in the Holder's sole discretion, the Holder may
consider this Debenture immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived,
anything herein or in any note or other instruments contained to the contrary
notwithstanding, and the Holder may immediately enforce any and all of the
Holder's rights and remedies provided herein or any other rights or remedies
afforded by law.

      13. Nothing contained in this Debenture shall be construed as conferring
upon the Holder the right to vote or to receive dividends or to consent or
receive notice as a shareholder in respect of any meeting of shareholders or any
rights whatsoever as a shareholder of the Company, unless and to the extent
converted in accordance with the terms hereof.

      14. In no event shall the Holder be permitted to convert this Debenture
for shares of Common Stock to the extent that (x) the number of shares of Common
Stock beneficially owned by such Holder (other than shares of Common Stock
issuable upon conversion of this Debenture) plus (y) the number of shares of
Common Stock issuable upon conversion of this Debenture, would be equal to or
exceed 4.9% of the number of shares of Common Stock then issued and outstanding,
including shares issuable upon conversion of this Debenture held by such Holder
after application of this Paragraph 14. As used herein, beneficial ownership
shall be determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder. To the extent
that the limitation contained in this Paragraph 14 applies, the determination of
whether this Debenture is convertible (in relation to other securities owned by
the Holder) and of which a portion of this Debenture is convertible shall be in
the sole discretion of such Holder, and the submission of a Notice of Conversion
shall be deemed to be such Holder's determination of whether this Debenture is
convertible (in relation to other securities owned by such holder) and of which
portion of this Debenture is convertible, in each case subject to such aggregate
percentage limitation, and the Company shall have no obligation to verify or
confirm the accuracy of such determination. Nothing contained herein shall be
deemed to restrict the right of a holder to convert this Debenture into shares
of Common Stock at such time as such conversion will not violate the provisions
of this Paragraph 14. The provisions of this Paragraph 14 may be waived by the
Holder of this Debenture upon, at the election of the Holder, not less than 75
days' prior notice to the Company, and the provisions of this Paragraph 14 shall
continue to apply until such 75th day (or such later date as may be specified in
such notice of waiver). No conversion of this Debenture in violation of this
Paragraph 14 but otherwise in accordance with this Debenture shall affect the
status of the Common Stock issued upon such conversion as validly issued,
fully-paid and nonassessable. If instead of receiving cash on the Maturity Date
the Holder instead exercises its right to convert this Debenture into Common
Stock pursuant to Paragraph 3 by delivery of a Notice of Conversion prior to
receipt of payment, and such conversion would cause the limit contained in the
first sentence of this Paragraph 14 to be exceeded, such conversion of this
Debenture shall occur up to such limit and the remaining unconverted portion of
this Debenture shall be converted into Common Stock (1) in accordance with one
or more Notices of Conversion delivered by the Holder, or (2) 65 days after the
Maturity Date, whichever is earlier. Notwithstanding anything contained herein
to the contrary, no interest shall accrue after the Maturity Date on any such
unconverted portion of this Debenture.

      15. By its acceptance of this Debenture, the Holder agrees to be bound by
the applicable terms of the Securities Purchase Agreement.

                            [signature page follows]


                                       5
<PAGE>

      IN WITNESS WHEREOF, Borrower has caused this Debenture to be signed in its
name by its duly authorized officer this _______ day of ______________, 2005.

                                       Peak Entertainment Holdings, Inc.

                                       By:
                                          --------------------------------------
                                          Wilf Shorrocks
                                          President and Chief Executive Officer


                                       6
<PAGE>

                                    EXHIBIT A

                              NOTICE OF CONVERSION

  (To be Executed by the Registered Holder in order to Convert the Debentures)

      The undersigned hereby irrevocably elects to convert $ ________________ of
the principal amount of the above Debenture No. ___ into Shares of Common Stock
of Peak Entertainment Holdings, Inc. (the "Company") according to the conditions
hereof, as of the date written below.

Date of Conversion:
                   -------------------------------------------------------------

Conversion Price:
                 ---------------------------------------------------------------

Accrued Interest:
                 ---------------------------------------------------------------

Number of Shares of Common Stock to be Issued:
                                              ----------------------------------

Name:
     ---------------------------------------------------------------------------

Signature:
          ----------------------------------------------------------------------

Address:
        ------------------------------------------------------------------------


                                       7
<PAGE>

                                                                       EXHIBIT B

THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. EXCEPT AS
OTHERWISE SET FORTH HEREIN, OR IN THE SECURITIES PURCHASE AGREEMENT, NEITHER
THIS WARRANT NOR ANY OF SUCH SHARES MAY BE SOLD, PLEDGED, TRANSFERRED, ASSIGNED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SECURITIES UNDER SAID ACT OR, AN OPINION OF COUNSEL, IN FORM,
SUBSTANCE AND SCOPE, CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE
TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD
PURSUANT TO RULE 144 UNDER SUCH ACT.

                        PEAK ENTERTAINMENT HOLDINGS, INC.

                          COMMON STOCK PURCHASE WARRANT
                RIGHT TO PURCHASE _______ SHARES OF COMMON STOCK
                         EXERCISE PRICE: $0.50 PER SHARE

      THIS CERTIFIES THAT, for value received, _________________ (the "Holder"),
is entitled, upon the terms and subject to the conditions hereinafter set forth,
at any time on or after the closing of the related Securities Purchase Agreement
(the "Initial Exercise Date") entered into Peak Entertainment Holdings, Inc., a
Nevada corporation (the "Company") and the Holder, as of even date, and on or
prior to the close of business on the fifth year anniversary of this Warrant
(the "Termination Date"), but not thereafter, to subscribe for and purchase from
the Company, up to ___________ fully paid and nonassessable shares of the
Company's Common Stock (the "Common Stock"), at the exercise price of $0.50 per
share (the "Exercise Price"). The Exercise Price and the number of shares for
which this Warrant is exercisable shall be subject to adjustment as provided
herein. In the event of any conflict between the terms of this Warrant and the
Securities Purchase Agreement, the Securities Purchase Agreement shall control.
Capitalized terms used and not otherwise defined herein shall have the meanings
set forth for such terms in the Securities Purchase Agreement.

      1. Title to Warrant. Prior to the Termination Date and subject to
compliance with applicable laws, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company by the
holder hereof in person or by duly authorized attorney, upon surrender of this
Warrant together with the Assignment Form annexed hereto, properly endorsed.

      2. Authorization of Shares. The Company covenants that all shares of
Common Stock which may be issued upon the exercise of rights represented by this
Warrant will, upon exercise of the rights represented by this Warrant, be duly
authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such issue).

      3. Exercise of Warrant. Except as provided in Sections 4 and 5 herein,
exercise of the purchase rights represented by this Warrant may be made at any
time or times on or after the Initial Exercise Date, and before the close of
business on the Termination Date by the surrender of this Warrant and the Notice
of Exercise Form annexed hereto, duly executed, at the office of the Company (or
such other office or agency of the Company as it may designate by notice in
writing to the registered holder hereof at the address of such holder appearing
on the books of the Company) and upon payment of the Exercise Price of the
shares thereby purchased by wire transfer or cashier's check drawn on a United
States bank, the holder of this Warrant shall be entitled to receive a
certificate for the number of shares of Common Stock so purchased. Certificates
for shares purchased hereunder shall be delivered to the Holder hereof within
three (3) Trading Days after the date on which this Warrant shall have been
exercised as aforesaid. This Warrant shall be deemed to have been exercised and
such certificate or certificates shall be deemed to have been issued, and the
Holder or any other person so designated to be named therein shall be deemed to
have become a holder of record of such shares for all purposes, as of the date
this Warrant has been exercised by payment to, and receipt thereof by, the
Company of the Exercise Price and all taxes required to be paid by Holder, if
any, pursuant to Section 5 herein prior to the issuance of such shares. If this
Warrant shall have been exercised in part, the Company shall, at the time of
delivery of the certificate or certificates representing Warrant Shares, deliver
to


                                       1
<PAGE>

Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased
shares of Common Stock called for by this Warrant, which new warrant shall in
all other respects be identical with this Warrant.

      4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to the Exercise Price.

      5. Limitation on Exercise of Warrant. In no event shall the Holder be
permitted to exercise this Warrant for shares of Common Stock in excess of the
amount of this Warrant upon the exercise of which, (x) the number of shares of
Common Stock beneficially owned by such Holder (other than shares of Common
Stock issuable upon exercise of this Warrant) plus (y) the number of shares of
Common Stock issuable upon exercise of this Warrant, would be equal to or exceed
4.9% of the number of shares of Common Stock then issued and outstanding,
including shares issuable upon exercise of this Warrant held by such Holder
after application of this Section 5. As used herein, beneficial ownership shall
be determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder. To the extent that
the limitation contained in this Section 5 applies, the determination of whether
this Warrant is exercisable (in relation to other securities owned by the
Holder) and which portion of this Warrant is exercisable shall be in the sole
discretion of such Holder, and the submission of a Notice of Exercise shall be
deemed to be such Holder's determination of whether this Warrant is exercisable
(in relation to other securities owned by such Holder) and of which portion of
this Warrant is exercisable, in each case subject to such aggregate percentage
limitation, and the Company shall have no obligation to verify or confirm the
accuracy of such determination. Nothing contained herein shall be deemed to
restrict the right of a Holder to exercise this Warrant into shares of Common
Stock at such time as such exercise will not violate the provisions of this
Section 5. The provisions of this Section 5 may be waived by the Holder of this
Warrant upon not less than 75 days' prior notice to the Company, and the
provisions of this Section 5 shall continue to apply until such 75th day (or
such later date as may be specified in such notice of waiver). No exercise of
this Warrant in violation of this Section 5, but otherwise in accordance with
this Warrant, shall affect the status of the Common Stock issued upon such
exercise as validly issued, fully-paid and nonassessable.

      6. Charges, Taxes and Expenses. Issuance of certificates for shares of
Common Stock upon the exercise of this Warrant shall be made without charge to
the Holder hereof for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificate, all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name
of the Holder of this Warrant, or in such name or names as may be directed by
the holder of this Warrant; provided, however, that in the event certificates
for shares of Common Stock are to be issued in a name other than the name of the
Holder of this Warrant, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto, duly executed by the Holder
hereof; and the Company may require, as a condition thereto, the payment of a
sum sufficient to reimburse it for any transfer tax incidental thereto.

      7. Closing of Books. The Company will not close its shareholder books or
records in any manner which prevents the timely exercise of this Warrant.

      8. Transfer, Division and Combination.

            (a) Subject to compliance with any applicable securities laws,
transfer of this Warrant and all rights hereunder, in whole or in part, shall be
registered on the books of the Company to be maintained for such purpose, upon
surrender of this Warrant at the principal office of the Company, together with
a written assignment of this Warrant substantially in the form attached hereto
duly executed by Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such surrender
and, if required, such payment, the Company shall execute and deliver a new
warrant or warrants in the name of the assignee or assignees and in the
denomination or denominations specified in such instrument of assignment, and
shall issue to the assignor a new warrant evidencing the portion of this Warrant
not so assigned, and this Warrant shall promptly be cancelled. This Warrant, if
properly assigned, may be exercised by a new holder for the purchase of shares
of Common Stock without having a new warrant issued.


                                       2
<PAGE>

            (b) This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants are
to be issued, signed by Holder or its agent or attorney. Subject to compliance
with Section 8(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.

            (c) The Company shall prepare, issue and deliver at its own expense
(other than transfer taxes) the new Warrant or Warrants under this Section 8.

            (d) The Company agrees to maintain, at its aforesaid office, books
for the registration and the registration of transfer of the Warrants.

      9. No Rights as Shareholder until Exercise. This Warrant does not entitle
the Holder hereof to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate Exercise Price, the Warrant Shares so purchased shall
be and be deemed to be issued to such Holder as the record owner of such shares
as of the close of business on the later of the date of such surrender or
payment.

      10. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant certificate
or any stock certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it
(which shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Company
will make and deliver a new warrant or stock certificate of like tenor and dated
as of such cancellation, in lieu of such Warrant or stock certificate.

      11. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a Saturday,
Sunday or legal holiday.

      12. Adjustments of Exercise Price and Number of Warrant Shares.

            (a) Stock Splits, etc. The number and kind of securities purchasable
upon the exercise of this Warrant and the Exercise Price shall be subject to
adjustment from time to time upon the happening of any of the following. In the
event that the Company shall (i) pay a dividend in shares of Common Stock or
make a distribution in shares of Common Stock to holders of its outstanding
Common Stock, (ii) subdivide its outstanding shares of Common Stock into a
greater number of shares of Common Stock, (iii) combine its outstanding shares
of Common Stock into a smaller number of shares of Common Stock, (iv) issue any
shares of its capital stock in a reclassification of the Common Stock, or (v)
otherwise transacts a similar adjustment to its class of Common Stock, then the
number of Warrant Shares purchasable upon exercise of this Warrant and the
Exercise Price immediately prior thereto shall be adjusted so that the holder of
this Warrant shall be entitled to receive the kind and number of Warrant Shares
or other securities of the Company which the holder would have owned or have
been entitled to receive had such Warrant been exercised in advance thereof.
Upon each such adjustment of the kind and number of Warrant Shares or other
securities of the Company which are purchasable hereunder, the holder of this
Warrant shall thereafter be entitled to purchase the number of Warrant Shares or
other securities resulting from such adjustment at an Exercise Price per Warrant
Share or other security obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of Warrant Shares purchasable
pursuant hereto immediately prior to such adjustment and dividing by the number
of Warrant Shares or other securities of the Company resulting from such
adjustment. An adjustment made pursuant to this paragraph shall become effective
immediately after the effective date of such event retroactive to the record
date, if any, for such event.

            (b) Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all its


                                       3
<PAGE>

property, assets or business to another corporation and, pursuant to the terms
of such reorganization, reclassification, merger, consolidation or disposition
of assets, shares of common stock of the successor or acquiring corporation, or
any cash, shares of stock or other securities or property of any nature
whatsoever (including warrants or other subscription or purchase rights) in
addition to or in lieu of common stock of the successor or acquiring corporation
("Other Property"), are to be received by or distributed to the holders of
Common Stock of the Company, then the Holder shall have the right thereafter to
receive, upon exercise of this Warrant, the number of shares of common stock of
the successor or acquiring corporation or of the Company, if it is the surviving
corporation, and Other Property receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or disposition of assets
by a holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of shares of
Common Stock for which this Warrant is exercisable which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section 12.
For purposes of this Section 12, "common stock of the successor or acquiring
corporation" shall include stock of such corporation of any class which is not
preferred as to dividends or assets over any other class of stock of such
corporation and which is not subject to redemption and shall also include any
evidences of indebtedness, shares of stock or other securities which are
exercisable into or exchangeable for any such stock, either immediately or upon
the arrival of a specified date or the happening of a specified event and any
warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section 12 shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.

            (c) Adjustment for Spin Off. If, for any reason, prior to the
exercise of this Warrant in full, the Company spins off or otherwise divests
itself of a part of its business or operations or disposes all or a part of its
assets in a transaction (the "Spin Off") in which the Company does not receive
compensation for such business, operations or assets, but causes securities of
another entity (the "Spin Off Securities") to be issued to security holders of
the Company, then

                  (A) the Company shall cause (i) to be reserved Spin Off
Securities equal to the number thereof which would have been issued to the
Holder had all of the Holder's unexercised Warrants outstanding on the record
date (the "Record Date") for determining the amount and number of Spin Off
Securities to be issued to security holders of the Company (the "Outstanding
Warrants") been exercised as of the close of business on the trading day
immediately before the Record Date (the "Reserved Spin Off Shares"), and (ii) to
be issued to the Holder on the exercise of all or any of the Outstanding
Warrants, such amount of the Reserved Spin Off Shares equal to (x) the Reserved
Spin Off Shares multiplied by (y) a fraction, of which (I) the numerator is the
amount of the Outstanding Warrants then being exercised, and (II) the
denominator is the amount of the Outstanding Warrants; and

                  (B) the Exercise Price on the Outstanding Warrants shall be
adjusted immediately after consummation of the Spin Off by multiplying the
Exercise Price by a fraction (if, but only if, such fraction is less than 1.0),
the numerator of which is the average Closing Bid Price of the Common Stock for
the five (5) trading days immediately following the fifth trading day after the
Record Date, and the denominator of which is the average Closing Bid Price of
the Common Stock on the five (5) trading days immediately preceding the Record
Date; and such adjusted Exercise Price shall be deemed to be the Exercise Price
with respect to the Outstanding Warrants after the Record Date.

      13. Voluntary Adjustment by the Company. The Company may at any time
during the term of this Warrant, reduce the then current Exercise Price to any
amount and for any period of time deemed appropriate by the Board of Directors
of the Company.

      14. Notice of Adjustment. Whenever the number of Warrant Shares or number
or kind of securities or other property purchasable upon the exercise of this
Warrant or the Exercise Price is adjusted, as herein provided, the Company shall
promptly send notice to the holder of this Warrant notice of such adjustment or
adjustments setting forth the number of Warrant Shares (and other securities or
property) purchasable upon the exercise of this


                                       4
<PAGE>

Warrant and the Exercise Price of such Warrant Shares (and other securities or
property) after such adjustment, setting forth a brief statement of the facts
requiring such adjustment and setting forth the computation by which such
adjustment was made. Such notice, in the absence of manifest error, shall be
conclusive evidence of the correctness of such adjustment.

      15. Redemption. Prior to the Termination Date, the Warrant shall be
redeemable, under the circumstances described in this Section, at the discretion
of the Company, for $.10 per warrant (the "Redemption Fee"). The Company's right
to redemption shall be exercisable commencing upon the day following the tenth
consecutive business day during which the Company's common stock has traded at
prices of, or in excess of, $3.00 per share, subject to adjustment for stock
splits, dividends, subdivisions, reclassification and the like, with weekly
volume of such trading being in excess of the total number of shares represented
by this Warrant. In the event the Company exercises its right to redeem the
Warrants, the Company shall give the Holder written notice of such decision. In
the event that the Holder does not exercise all or any part of the Warrants or
that the Company does not receive the Warrant from the Holder within 30 days
from the date on the notice to the Holder of the Company's intention to redeem
the Warrant, then the Warrant shall be deemed canceled, and the Holder shall not
be entitled to further exercise thereof or to the Redemption Fee.

      16. Notice of Corporate Action. If at any time:

            (a) the Company shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend or other
distribution, or any right to subscribe for or purchase any evidences of its
indebtedness, any shares of stock of any class or any other securities or
property, or to receive any other right, or

            (b) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger of the Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation or,

            (c) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;

then, in any one or more of such cases, the Company shall give to the Holder (i)
at least 30 days' prior written notice of the date on which a record date shall
be selected for such dividend, distribution or right or for determining rights
to vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 30
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to the
Holder at the last address of the Holder appearing on the books of the Company
and delivered in accordance with Section 18(d).

      17. Authorized Shares. The Company covenants that during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the OTCBB or other
market upon which the Common Stock may be listed.


                                       5
<PAGE>

            The Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate to protect the rights of the
Holder against impairment. Without limiting the generality of the foregoing, the
Company will (a) take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant, and (b)
use its best efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this Warrant.

      18. Miscellaneous.

            (a) Jurisdiction. This Warrant shall be binding upon any successors
or assigns of the Company. This Warrant shall constitute a contract under the
laws of New York without regard to its conflict of law, principles or rules, and
be subject to governing law provisions set forth in the Securities Purchase
Agreement.

            (b) Restrictions. The holder hereof acknowledges that the Warrant
Shares acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by state and federal securities laws.

            (c) Nonwaiver and Expenses. No course of dealing or any delay or
failure to exercise any right hereunder on the part of the Holder shall operate
as a waiver of such right or otherwise prejudice the Holder's rights, powers or
remedies, notwithstanding all rights hereunder terminate on the Termination
Date. If the Company fails to comply with any provision of this Warrant, the
Company shall pay to the Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys' fees,
including those of appellate proceedings, incurred by the Holder in collecting
any amounts due pursuant hereto or in otherwise enforcing any of its rights,
powers or remedies hereunder.

            (d) Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder hereof by the Company shall be
delivered in accordance with the notice provisions of the Securities Purchase
Agreement.

            (e) Limitation of Liability. No provision hereof, in the absence of
affirmative action by the Holder to purchase shares of Common Stock, and no
enumeration herein of the rights or privileges of the Holder hereof, shall give
rise to any liability of the Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.

            (f) Remedies. The Holder, in addition to being entitled to exercise
all rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant.

            (g) Successors and Assigns. Subject to applicable securities laws,
this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and permitted assigns of the Holder. The provisions of this Warrant are intended
to be for the benefit of all Holders from time to time of this Warrant and shall
be enforceable by any such Holder or holder of Warrant Shares.

            (h) Indemnification. The Company agrees to indemnify and hold
harmless the Holder from and against any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, attorneys' fees,
expenses and disbursements of any kind which may be imposed upon, incurred by or
asserted against the Holder in any manner relating to or arising out of any
failure by the Company to perform or observe in any material respect any of its
covenants, agreements, undertakings or obligations set forth in this Warrant;
provided, however, that the Company will not be liable hereunder to the extent
that any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, attorneys' fees, expenses or disbursements are
found in a final non-appealable judgment by a court to have resulted from the
holder's negligence, bad faith or willful misconduct in its capacity as a
stockholder or warrantholder of the Company.


                                       6
<PAGE>

            (i) Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the Holder.

            (j) Severability. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Warrant.

            (k) Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.

            (l) Piggyback Registration Rights. The initial Holder of this
Warrant is entitled to the benefit of certain registration rights with respect
to the shares of Common Stock issuable upon the exercise of this Warrant. If the
Company, at any time from the date of this Warrant through the date of
expiration of this Warrant, proposes to register any of its securities under the
Securities Act for sale to the public, whether for its own account or for the
account of other security holders or both (except with respect to registration
statements on Forms S-4, S-8 and any successor forms thereto), each such time
the Company will give written notice to such effect to the Holder at least 30
days prior to such filing. Upon the written request of Holder, received by the
Company within 30 days after the giving of any such notice by the Company, to
register any of the shares of Common Stock underlying this Warrant, the Company
will cause, at Company's expenses, such underlying shares of Common Stock to be
covered by the registration statement proposed to be filed by the Company, all
to the extent requisite to permit the sale or other disposition by the holder of
such shares so registered.

                            [signature page follows]


                                       7
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its officer thereunto duly authorized.

Dated:  _________ __, 2005

                                       Peak Entertainment Holdings, Inc.

                                       By:
                                          --------------------------------------
                                          Wilf Shorrocks
                                          President and Chief Executive Officer


                                       8
<PAGE>

                               NOTICE OF EXERCISE

To:   Peak Entertainment Holdings, Inc.

      The undersigned hereby elects to purchase ________ shares of Common Stock
(the "Common Stock"), at an exercise price of $0.50 per share, of Peak
Entertainment Holdings, Inc. pursuant to the terms of the attached Warrant, and
tenders herewith payment of the exercise price in full, in the amount of
$_____________, together with all applicable transfer taxes, if any.

      Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:

                                       -----------------------------------------
                                       (Name)

                                       -----------------------------------------
                                       (Address)
                                       -----------------------------------------

Dated:
      ---------------------

                                       -----------------------------------------
                                       Signature


                                       9
<PAGE>

                                 ASSIGNMENT FORM

(To assign the foregoing warrant, execute this form and supply required
information. Do not use this form to exercise the warrant.)

      FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby
are hereby assigned to ___________________________________________ whose address
is ___________________________________________________ .

Dated:
      ---------------------

                                       Holder's Signature:
                                                          ----------------------
                                       Holder's Address:
                                                        ------------------------

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

Signature Guaranteed:  ___________________________________________

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.


                                       10
<PAGE>

                                                                       EXHIBIT C

                               SECURITY AGREEMENT

      SECURITY AGREEMENT (this "Agreement"), dated as of _____________, 2005, by
and among Peak Entertainment Holdings, Inc., a Nevada corporation (the
"Company"), and the secured party signatory hereto and its respective endorsees,
transferees and assigns (the "Secured Party").

                              W I T N E S S E T H:

      WHEREAS, pursuant to a Securities Purchase Agreement between the Company
and the Secured Party (the "Purchase Agreement"), the Company has agreed to
issue to the Secured Party and other persons who enter into a similar Purchase
Agreement (collectively the Secured Party and others similarly situated are
referred to hereinafter as the "Secured Parties"), and the Secured Party has
agreed to purchase from the Company certain of the Company's 12% Secured
Convertible Debentures (the "Debentures"), which are convertible into shares of
the Company's Common Stock, par value $.001 per share (the "Common Stock"), and
in connection therewith, the Company shall issue the Secured Party certain
Common Stock purchase warrants (the "Warrants"); and

      WHEREAS, in order to induce the Secured Parties to purchase the
Debentures, the Company has agreed to execute and deliver to the Secured
Parties, this Agreement for the benefit of the Secured Parties and to grant to
the Secured Parties a priority security interest, to the extent not already
encumbered, in certain property of the Company to secure the prompt payment,
performance and discharge in full of all of the Company's obligations under the
Debentures and exercise and discharge in full of the Company's obligations under
the Warrants.

      NOW, THEREFORE, in consideration of the agreements herein contained and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:

      1. Certain Definitions. As used in this Agreement, the following terms
shall have the meanings set forth in this Section 1. Terms used but not
otherwise defined in this Agreement that are defined in Article 9 of the UCC
(such as "general intangibles" and "proceeds") shall have the respective
meanings given such terms in Article 9 of the UCC.

            (a) "Collateral" means the collateral in which the Secured Party is
      granted a security interest by this Agreement and which shall include the
      following, whether presently owned or existing or hereafter acquired or
      coming into existence, and all additions and accessions thereto and all
      substitutions and replacements thereof, and all proceeds, products and
      accounts thereof, including, without limitation, all proceeds from the
      sale or transfer of the Collateral and of insurance covering the same and
      of any tort claims in connection therewith:

                  (i) All Goods of the Company, including, without limitations,
            all machinery, equipment, computers, motor vehicles, trucks, tanks,
            boats, ships, appliances, furniture, special and general tools,
            fixtures, test and quality control devices and other equipment of
            every kind and nature and wherever situated, together with all
            documents of title and documents representing the same, all
            additions and accessions thereto, replacements therefor, all parts
            therefor, and all substitutes for any of the foregoing and all other
            items used and useful in connection with the Company's businesses
            and all improvements thereto (collectively, the "Equipment");

                  (ii) All Inventory of the Company, less inventory to the
            extent that CK's Supermarket Limited of 64/65 The Kingsway, Swansea
            SA1 5HW maintains security interests in inventory pursuant to an
            agreement for a loan made July 10, 2002;

                  (iii) All of the Company's contract rights and general
            intangibles, including, without limitation, all partnership
            interests, stock or other securities, licenses, distribution and
            other


                                       1
<PAGE>

            agreements, computer software development rights, leases,
            franchises, customer lists, quality control procedures, grants and
            rights, goodwill, trademarks, service marks, trade styles, trade
            names, patents, patent applications, copyrights, deposit accounts,
            and income tax refunds (collectively, the "General Intangibles");

                  (iv) All of the Company's documents, instruments and chattel
            paper, files, records, books of account, business papers, computer
            programs and the products and proceeds of all of the foregoing
            Collateral set forth in clauses (i)-(iv) above; and

                  (v) All of the Company's shares of stock of the subsidiaries
            of the Company, including, without limitation, all of the Company's
            shares of stock of Peak Entertainment, Ltd.

            (b) "Company" shall mean, collectively, the Company and all of the
      subsidiaries of the Company.

            (c) "Obligations" means all of the Company's obligations under this
      Agreement and the Debentures, in each case, whether now or hereafter
      existing, voluntary or involuntary, direct or indirect, absolute or
      contingent, liquidated or unliquidated, whether or not jointly owed with
      others, and whether or not from time to time decreased or extinguished and
      later decreased, created or incurred, and all or any portion of such
      obligations or liabilities that are paid, to the extent all or any part of
      such payment is avoided or recovered directly or indirectly from the
      Secured Party as a preference, fraudulent transfer or otherwise as such
      obligations may be amended, supplemented, converted, extended or modified
      from time to time.

            (d) "UCC" means the Uniform Commercial Code, as currently in effect
      in the State of New York.

      2. Grant of Security Interest. As an inducement for the Secured Party to
purchase the Debentures and to secure the complete and timely payment,
performance and discharge in full, as the case may be, of all of the
Obligations, the Company hereby, unconditionally and irrevocably, pledges,
grants and hypothecates to the Secured Party, a continuing security interest, to
the extent not already encumbered, in, a continuing lien upon, a right to
possession and disposition of and a right of set-off against, in each case to
the fullest extent permitted by law, all of the Company's right, title and
interest of whatsoever kind and nature (including, without limitation, all of
Peak Entertainment Ltd.'s rights) in and to the Collateral (the "Security
Interest"). The Security Interest rights herein shall be on an equal level to
the security interest rights granted to other third party purchasers in the
Company's sale of debentures, on terms and conditions similar to the terms
herein, occurring on or about the same time as this Agreement. Notwithstanding
anything to the contrary herein, the parties understand and agree that the
Security Interest rights herein shall be secondary to any security interest
rights previously granted by the Company in or about January 2005, and that the
provisions of this Agreement shall be interpreted accordingly. The Company shall
be entitled to grant security interest rights senior to the rights of the
Secured Parties to a financial institution, subject to the approval of the
Secured Parties, which shall not be unreasonably withheld. The Company shall be
entitled to grant security interest rights similar to the rights granted to the
Secured Parties to non-financial institution lender(s) hereafter providing at
least $1,500,000 or more in working capital, subject to the approval of the
Secured Parties, which shall not be unreasonably withheld. Secured Parties
acknowledge that the Company will need additional capital for its business.
Except as provided for herein, the Company will not grant to any other person a
security interest in its assets for so long as a majority of the Debentures sold
to the Secured Parties remaining outstanding, except with the consent of
two-thirds of the outstanding face amount of the Debentures held by the Secured
Parties, which shall not be unreasonably withheld.

      3. Representations, Warranties, Covenants and Agreements of the Company.
The Company represents and warrants to, and covenants and agrees with, the
Secured Party as follows:

            (a) This Agreement constitutes a legal, valid and binding obligation
      of the Company enforceable in accordance with its terms, except as
      enforceability may be limited by bankruptcy, insolvency, reorganization,
      moratorium or similar laws affecting the enforcement of creditor's rights
      generally.


                                       2
<PAGE>

            (b) The Company represents and warrants that its principal place of
      business is set forth in the Company's filings with the Securities and
      Exchange Commission that that it has no place of business or offices where
      its respective books of account and records are kept (other than
      temporarily at the offices of its attorneys or accountants) or places
      where Collateral is stored or located;

            (c) The Company is the sole owner of the Collateral (except for
      licenses granted by the Company in the ordinary course of business), free
      and clear of any liens, security interests, encumbrances, rights or
      claims, and is fully authorized to grant the Security Interest in and to
      pledge the Collateral, subject to the surrender and cancellation of
      previously issued debentures. Subject to the surrender and cancellation of
      previously issued debentures, there is not on file in any governmental or
      regulatory authority, agency or recording office an effective financing
      statement, security agreement, license or transfer or any notice of any of
      the foregoing (other than those that have been filed in favor of any
      secured party pursuant to this Agreement or similar agreements) covering
      or affecting any of the Collateral.

            (d) No part of the Collateral has been judged invalid or
      unenforceable. There has been no adverse decision to the Company's claim
      of ownership rights in or exclusive rights to use the Collateral in any
      jurisdiction or to the Company's right to keep and maintain such
      Collateral in full force and effect, and there is no proceeding involving
      said rights pending or, to the best knowledge of the Company, threatened
      before any court, judicial body, administrative or regulatory agency,
      arbitrator or other governmental authority.

            (e) The Company shall at all times maintain its books of account and
      records relating to the Collateral at its principal place of business and
      may not relocate such books of account and records or tangible Collateral
      unless it delivers to the Secured Party at least 30 days prior to such
      relocation (i) written notice of such relocation and the new location
      thereof (which must be within the United States) and (ii) evidence that
      appropriate financing statements and other necessary documents have been
      filed and recorded and other steps have been taken to perfect the Security
      Interest to create in favor of the Secured Party valid, perfected and
      continuing liens in the Collateral.

            (f) This Agreement creates in favor of the Secured Party a valid
      security interest in the Collateral securing the payment and performance
      of the Obligations and, upon making the filings described in the
      immediately following sentence, a perfected security interest in such
      Collateral. Subject to the surrender and cancellation of previously issued
      debentures, except for the filing of financing statements on Form-1 under
      the UCC with the appropriate jurisdictions, no authorization or approval
      of or filing with or notice to any governmental authority or regulatory
      body is required either (i) for the grant by the Company of, or the
      effectiveness of, the Security Interest granted hereby or for the
      execution, delivery and performance of this Agreement by the Company or
      (ii) for the perfection of or exercise by the Secured Party of its rights
      and remedies hereunder.

            (g) The Company will prepare and deliver to the Secured Party one or
      more executed UCC financing statements on Form-1 with respect to the
      Security Interest for filing with the appropriate jurisdictions at the
      expense of the Company.

            (h) The execution, delivery and performance of this Agreement does
      not conflict with or cause a breach or default, or an event that with or
      without the passage of time or notice, shall constitute a breach or
      default, under any agreement to which the Company is a party or by which
      the Company is bound. No consent (including, without limitation, from
      stockholders or creditors of the Company) is required for the Company to
      enter into and perform its obligations hereunder.

            (i) The Company shall at all times maintain the liens and Security
      Interest provided for hereunder as valid and perfected priority liens and
      security interests in the Collateral in favor of the Secured Party until
      this Agreement and the Security Interest hereunder shall terminate
      pursuant to Section 8. The Company hereby agrees to defend the same
      against any and all persons. The Company shall safeguard and protect all
      Collateral for the account of the Secured Party. At the request of the
      Secured Party, the Company will sign and deliver to the Secured Party at
      any time or from time to time one or more financing statements pursuant to
      the UCC (or any other applicable statute) in form reasonably satisfactory
      to the


                                       3
<PAGE>

      Secured Party and will pay the cost of filing the same in all public
      offices wherever filing is, or is reasonably deemed by the Secured Party
      to be, necessary or desirable to effect the rights and obligations
      provided for herein.

            (j) The Company shall keep and preserve its Equipment, Inventory and
      other tangible Collateral in good condition, repair and order and shall
      not operate or locate any such Collateral (or cause to be operated or
      located) in any area excluded from insurance coverage.

            (k) The Company shall promptly execute and deliver to the Secured
      Party such further deeds, mortgages, assignments, security agreements,
      financing statements or other instruments, documents, certificates and
      assurances and take such further action as the Secured Party may from time
      to time reasonably request and may in its sole discretion deem necessary
      to perfect, protect or enforce its security interest in the Collateral
      including, without limitation, the execution and delivery of a separate
      security agreement with respect to the Company's intellectual property
      ("Intellectual Property Security Agreement") in which the Secured Party
      has been granted a security interest hereunder, substantially in a form
      acceptable to the Secured Party, which Intellectual Property Security
      Agreement, other than as stated therein, shall be subject to all of the
      terms and conditions hereof.

            (l) The Company will take all steps reasonably necessary to
      diligently pursue and seek to preserve, enforce and collect any rights,
      claims, causes of action and accounts receivable in respect of the
      Collateral.

            (m) All information heretofore, herein or hereafter supplied to the
      Secured Party by or on behalf of the Company with respect to the
      Collateral is accurate and complete in all material respects as of the
      date furnished.

      4. Defaults. The following events shall be "Events of Default":

            (a) The occurrence of an Event of Default (as defined in the
      Debentures) under the Debentures; and

            (b) Any breach of, or default under, the Warrants.

      5. Rights and Remedies Upon Default. Upon occurrence of any Event of
Default and at any time thereafter, the Secured Party shall have the right to
exercise all of the remedies conferred hereunder and under the Debentures, and
the Secured Party shall have all the rights and remedies of a secured party
under the UCC and/or any other applicable law (including the Uniform Commercial
Code of any jurisdiction in which any Collateral is then located).

      6. Responsibility for Collateral. The Company assumes all liabilities and
responsibility in connection with all Collateral, and the obligations of the
Company hereunder or under the Debentures and the Warrants shall in no way be
affected or diminished by reason of the loss, destruction, damage or theft of
any of the Collateral or its unavailability for any reason.

      7. Security Interest Absolute. All rights of the Secured Party and all
Obligations of the Company hereunder, shall be absolute and unconditional,
irrespective of: (a) any lack of validity or enforceability of this Agreement,
the Debentures, the Warrants or any agreement entered into in connection with
the foregoing, or any portion hereof or thereof; (b) any change in the time,
manner or place of payment or performance of, or in any other term of, all or
any of the Obligations, or any other amendment or waiver of or any consent to
any departure from the Debentures, the Warrants or any other agreement entered
into in connection with the foregoing; (c) any exchange, release or
nonperfection of any of the Collateral, or any release or amendment or waiver of
or consent to departure from any other collateral for, or any guaranty, or any
other security, for all or any of the Obligations; (d) any action by the Secured
Party to obtain, adjust, settle and cancel in its sole discretion any insurance
claims or matters made or arising in connection with the Collateral; or (e) any
other circumstance which might otherwise constitute any legal or equitable
defense available to the Company, or a discharge of all or any part of the
Security Interest granted hereby. Until the Obligations shall have been paid and
performed in full, the rights of the Secured Party shall


                                       4
<PAGE>

continue even if the Obligations are barred for any reason, including, without
limitation, the running of the statute of limitations or bankruptcy. The Company
expressly waives presentment, protest, notice of protest, demand, notice of
nonpayment and demand for performance. In the event that at any time any
transfer of any Collateral or any payment received by the Secured Party
hereunder shall be deemed by final order of a court of competent jurisdiction to
have been a voidable preference or fraudulent conveyance under the bankruptcy or
insolvency laws of the United States, or shall be deemed to be otherwise due to
any party other than the Secured Party, then, in any such event, the Company's
obligations hereunder shall survive cancellation of this Agreement, and shall
not be discharged or satisfied by any prior payment thereof and/or cancellation
of this Agreement, but shall remain a valid and binding obligation enforceable
in accordance with the terms and provisions hereof. The Company waives all right
to require the Secured Party to proceed against any other person or to apply any
Collateral which the Secured Party may hold at any time, or to marshal assets,
or to pursue any other remedy. The Company waives any defense arising by reason
of the application of the statute of limitations to any obligation secured
hereby.

      8. Term of Agreement. This Agreement and the Security Interest shall
terminate on the date on which all payments under the Debentures have been made
in full and all other Obligations have been paid or discharged. Upon such
termination, the Secured Party, at the request and at the expense of the
Company, will join in executing any termination statement with respect to any
financing statement executed and filed pursuant to this Agreement.

      9. Power of Attorney; Further Assurances.

            (a) The Company authorizes the Secured Party, and does hereby make,
      constitute and appoint it, and its respective officers, agents, successors
      or assigns with full power of substitution, as the Company's true and
      lawful attorney-in-fact, with power, in its own name or in the name of the
      Company, to, after the occurrence and during the continuance of an Event
      of Default, (i) to sign and endorse any UCC financing statement relating
      to the Collateral; (ii) to pay or discharge taxes, liens, security
      interests or other encumbrances at any time levied or placed on or
      threatened against the Collateral; and (iii) generally, to do, at the
      option of the Secured Party, at any time, or from time to time, all acts
      and things which the Secured Party deems necessary to protect and preserve
      the Collateral and the Security Interest granted therein in order to
      effect the intent of this Agreement, the Debentures and the Warrants, as
      fully and effectually as the Company might or could do; and the Company
      hereby ratifies all that said attorney shall lawfully do or cause to be
      done by virtue hereof. This power of attorney is coupled with an interest
      and shall be irrevocable for the term of this Agreement and thereafter as
      long as any of the Obligations shall be outstanding.

            (b) On a continuing basis, the Company will make, execute,
      acknowledge, deliver, file and record, as the case may be, in the proper
      filing and recording places in any jurisdiction, all such instruments, and
      take all such action as may reasonably be deemed necessary or advisable,
      or as reasonably requested by the Secured Party, to perfect the Security
      Interest granted hereunder and otherwise to carry out the intent and
      purposes of this Agreement, or for assuring and confirming to the Secured
      Party the grant or perfection of a security interest in all the
      Collateral.

            (c) The Company hereby irrevocably appoints the Secured Party as the
      Company's attorney-in-fact, with full authority in the place and stead of
      the Company and in the name of the Company, from time to time in the
      Secured Party's discretion, to take any action and to execute any
      instrument which the Secured Party may deem necessary or advisable to
      accomplish the purposes of this Agreement, including the filing, in its
      sole discretion, of one or more financing or continuation statements and
      amendments thereto, relative to the Collateral without the signature of
      the Company where permitted by law.

      10. Notices. All notices, requests, demands and other communications
hereunder shall be in writing, with copies to all the other parties hereto, and
shall be deemed to have been duly given when (i) if delivered by hand, upon
receipt, (ii) if sent by facsimile, upon receipt of proof of sending thereof,
(iii) if sent by nationally recognized overnight delivery service (receipt
requested), the next business day or (iv) if mailed by first-class registered or
certified mail, return receipt requested, postage prepaid, four days after
posting in the U.S. mails, in each case if delivered to the following addresses:


                                       5
<PAGE>

                                    If to the Company:
                                    Attn.:  Wilfred Shorrocks, President
                                    Peak Entertainment Holdings, Inc.
                                    Bagshaw Hall, Bagshaw Hill
                                    Bakewell, Derbyshire, UK DE45 1DL
                                    Tel:  +44(0)1629 814555
                                    Fax:  +44(0)1629 813539

                                    With a copy to (which shall not constitute
                                    notice):
                                    Attn:   Dan Brecher
                                    Law Offices of Dan Brecher
                                    99 Park Avenue, 16th Floor
                                    New York, New York 10016
                                    Tel: (212) 286-0747
                                    Fax: (212) 808-4155

                                    If to the Secured Party:
                                    At the address and facsimile number as
                                    provided pursuant to the Securities Purchase
                                    Agreement.

      11. Other Security. To the extent that the Obligations are now or
hereafter secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other entity,
then the Secured Party shall have the right, in its sole discretion, to pursue,
relinquish, subordinate, modify or take any other action with respect thereto,
without in any way modifying or affecting any of the Secured Party's rights and
remedies hereunder.

      12. Miscellaneous.

            (a) No course of dealing between the Company and the Secured Party,
      nor any failure to exercise, nor any delay in exercising, on the part of
      the Secured Party, any right, power or privilege hereunder or under the
      Debentures shall operate as a waiver thereof; nor shall any single or
      partial exercise of any right, power or privilege hereunder or thereunder
      preclude any other or further exercise thereof or the exercise of any
      other right, power or privilege.

            (b) All of the rights and remedies of the Secured Party with respect
      to the Collateral, whether established hereby or by the Debentures or by
      any other agreements, instruments or documents or by law shall be
      cumulative and may be exercised singly or concurrently.

            (c) This Agreement constitutes the entire agreement of the parties
      with respect to the subject matter hereof and is intended to supersede all
      prior negotiations, understandings and agreements with respect thereto.
      Except as specifically set forth in this Agreement, no provision of this
      Agreement may be modified or amended except by a written agreement
      specifically referring to this Agreement and signed by the parties hereto.

            (d) In the event that any provision of this Agreement is held to be
      invalid, prohibited or unenforceable in any jurisdiction for any reason,
      unless such provision is narrowed by judicial construction, this Agreement
      shall, as to such jurisdiction, be construed as if such invalid,
      prohibited or unenforceable provision had been more narrowly drawn so as
      not to be invalid, prohibited or unenforceable. If, notwithstanding the
      foregoing, any provision of this Agreement is held to be invalid,
      prohibited or unenforceable in any jurisdiction, such provision, as to
      such jurisdiction, shall be ineffective to the extent of such invalidity,
      prohibition or unenforceability without invalidating the remaining portion
      of such provision or the other provisions of this Agreement and without
      affecting the validity or enforceability of such provision or the other
      provisions of this Agreement in any other jurisdiction.

            (e) No waiver of any breach or default or any right under this
      Agreement shall be deemed a waiver of any subsequent breach or default or
      right, whether of the same or similar nature or otherwise.


                                       6
<PAGE>

            (f) This Agreement shall be binding upon and inure to the benefit of
      each party hereto and its successors and assigns.

            (g) Each party shall take such further action and execute and
      deliver such further documents as may be necessary or appropriate in order
      to carry out the provisions and purposes of this Agreement.

            (h) This Agreement shall be construed in accordance with the laws of
      the State of New York, except to the extent the validity, perfection or
      enforcement of a security interest hereunder in respect of any particular
      Collateral which are governed by a jurisdiction other than the State of
      New York in which case such law shall govern. Each of the parties hereto
      irrevocably submit to the exclusive jurisdiction of any state or federal
      court sitting in New York County in the State of New York over any action
      or proceeding arising out of or relating to this Agreement, and the
      parties hereto hereby irrevocably agree that all claims in respect of such
      action or proceeding may be heard and determined in such state or federal
      court. The parties hereto agree that a final judgment in any such action
      or proceeding shall be conclusive and may be enforced in other
      jurisdictions by suit on the judgment or in any other manner provided by
      law. The parties hereto further waive any objection to venue in the State
      of New York and any objection to an action or proceeding in the State of
      New York on the basis of forum non conveniens.

            (i) EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS
      TO A JURY TRAIL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
      OF THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL
      ENCOMPASSING OF ANY DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT
      RELATE TO THE SUBJECT MATER OF THIS AGREEMENT, INCLUDING WITHOUT
      LIMITATION CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL
      OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT
      THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTO A
      BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY RELIED ON THIS WAIVER
      IN ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY
      ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER
      WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
      COUNSEL, AND THAT SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY WAIVES ITS
      RIGHTS TO A JURY TRIAL FOLLOWING SUCH CONSULTATION. THIS WAIVER IS
      IRREVOCABLE, MEANING THAT, NOTWITHSTANDING ANYTHING HEREIN TO THE
      CONTRARY, IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS
      WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS AND SUPPLEMENTS
      OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF A LITIGATION, THIS
      AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

            (j) This Agreement may be executed in any number of counterparts,
      each of which when so executed shall be deemed to be an original and, all
      of which taken together shall constitute one and the same Agreement. In
      the event that any signature is delivered by facsimile transmission, such
      signature shall create a valid binding obligation of the party executing
      (or on whose behalf such signature is executed) the same with the same
      force and effect as if such facsimile signature were the original thereof.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                       7
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be duly executed on the day and year first above written.

THE COMPANY:                           PEAK ENTERTAINMENT HOLDINGS, INC.

                                       By:
                                          --------------------------------------
                                          Wilf Shorrocks
                                          President and Chief Executive Officer

THE SECURED PARTY:                     __________________________


                                       8
<PAGE>

                                                                       EXHIBIT D

                    INTELLECTUAL PROPERTY SECURITY AGREEMENT

      Intellectual Property Security Agreement (this "Agreement") dated as of
_____________, 2005, by and among Peak Entertainment Holdings, a Nevada
corporation (the "Company"), and the secured party signatory hereto and its
respective endorsees, transferees and assigns (the "Secured Party").

                              W I T N E S S E T H :

      WHEREAS, pursuant to a Securities Purchase Agreement between the Company
and the Secured Party (the "Purchase Agreement"), the Company has agreed to
issue to the Secured Party and other persons who enter into a similar Purchase
Agreement (collectively the Secured Party and others similarly situated are
referred to hereinafter as the "Secured Parties"), and the Secured Party has
agreed to purchase from the Company certain of the Company's 12% Secured
Convertible Debentures (the "Debentures"), which are convertible into shares of
the Company's Common Stock, par value $.001 per share (the "Common Stock"), and
in connection therewith, the Company shall issue the Secured Party certain
Common Stock purchase warrants (the "Warrants"); and

      WHEREAS, in order to induce the Secured Parties to purchase the
Debentures, the Company has agreed to execute and deliver to the Secured
Parties, this Agreement for the benefit of the Secured Parties and to grant to
the Secured Parties a security interest, to the extent not already encumbered,
in certain property of the Company to secure the prompt payment, performance and
discharge in full of all of the Company's obligations under the Debentures and
exercise and discharge in full of the Company's obligations under the Warrants.

      NOW, THEREFORE, in consideration of the agreements herein contained and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:

      1. Defined Terms. Unless otherwise defined herein, terms which are defined
in the Purchase Agreement and used herein are so used as so defined; and the
following terms shall have the following meanings:

            "Company" shall mean, collectively, the Company and all of the
      subsidiaries of the Company (including, without limitation, Peak
      Entertainment, Ltd.).

            "Copyrights" shall mean (a) all copyrights, registrations and
      applications for registration, issued or filed, including any reissues,
      extensions or renewals thereof, by or with the United States Copyright
      Office or any similar office or agency of the United States, any state
      thereof, or any other country or political subdivision thereof, or
      otherwise, including, all rights in and to the material constituting the
      subject matter thereof, and (b) any rights in any material which is
      copyrightable or which is protected by common law, United States copyright
      laws or similar laws or any law of any State.

            "Copyright License" shall mean any agreement, written or oral,
      providing for a grant by the Company of any right in any Copyright.

            "Intellectual Property" shall means, collectively, the Software
      Intellectual Property, Copyrights, Copyright Licenses, Patents, Patent
      Licenses, Trademarks, Trademark Licenses and Trade Secrets of the Company,
      as set forth in Schedule A hereto.

            "Obligations" means all of the Company's obligations under this
      Agreement and the Debentures, in each case, whether now or hereafter
      existing, voluntary or involuntary, direct or indirect, absolute or
      contingent, liquidated or unliquidated, whether or not jointly owed with
      others, and whether or not from time to time decreased or extinguished and
      later decreased, created or incurred, and all or any portion of such
      obligations or liabilities that are paid, to the extent all or any part of
      such payment is avoided or


                                       1
<PAGE>

      recovered directly or indirectly from the Secured Party as a preference,
      fraudulent transfer or otherwise as such obligations may be amended,
      supplemented, converted, extended or modified from time to time.

            "Patents" shall mean (a) all letters patent of the United States or
      any other country or any political subdivision thereof, and all reissues
      and extensions thereof, and (b) all applications for letters patent of the
      United States and all divisions, continuations and continuations-in-part
      thereof or any other country or any political subdivision.

            "Patent License" shall mean all agreements, whether written or oral,
      providing for the grant by the Company of any right to manufacture, use or
      sell any invention covered by a Patent.

            "Security Agreement" shall mean the Security Agreement, dated the
      date hereof between the Company and the Secured Party.

            "Software Intellectual Property" shall mean:

                  (a) all software programs (including all source code, object
            code and all related applications and data files), whether now
            owned, upgraded, enhanced, licensed or leased or hereafter acquired
            by the Company, above;

                  (b) all computers and electronic data processing hardware and
            firmware associated therewith;

                  (c) all documentation (including flow charts, logic diagrams,
            manuals, guides and specifications) with respect to such software,
            hardware and firmware described in the preceding clauses (a) and
            (b); and

                  (d) all rights with respect to all of the foregoing,
            including, without limitation, any and all upgrades, modifications,
            copyrights, licenses, options, warranties, service contracts,
            program services, test rights, maintenance rights, support rights,
            improvement rights, renewal rights and indemnifications and
            substitutions, replacements, additions, or model conversions of any
            of the foregoing.

            "Trademarks" shall mean all trademarks, trade names, corporate
      names, the Company names, business names, fictitious business names, trade
      styles, service marks, logos and other source or business identifiers, and
      the goodwill associated therewith, now existing.

            "Trademark License" shall mean any agreement, written or oral,
      providing for the grant by the Company of any right to use any Trademark.

            "Trade Secrets" shall mean common law and statutory trade secrets
      and all other confidential or proprietary or useful information and all
      know-how obtained by or used in or contemplated at any time for use in the
      business of the Company (all of the foregoing being collectively called a
      "Trade Secret"), whether or not such Trade Secret has been reduced to a
      writing or other tangible form, including all documents and things
      embodying, incorporating or referring in any way to such Trade Secret, all
      Trade Secret licenses, and including the right to sue for and to enjoin
      and to collect damages for the actual or threatened misappropriation of
      any Trade Secret and for the breach or enforcement of any such Trade
      Secret license.

      2. Grant of Security Interest. In accordance with Section 3(m) of the
Security Agreement, to secure the complete and timely payment, performance and
discharge in full, as the case may be, of all of the Obligations, the Company
hereby, unconditionally and irrevocably, pledges, grants and hypothecates to the
Secured Party, a continuing security interest in, a continuing lien upon, an
unqualified right to possession and disposition of and a right of set-off
against, in each case to the fullest extent permitted by law, all of the
Company's right, title and interest of whatsoever kind and nature (including,
without limitation, all of Peak Entertainment Ltd.'s rights) in and to the
Intellectual Property (the "Security Interest"). The Security Interest rights
herein shall be on equal level to the


                                       2
<PAGE>

other security interest rights granted to third party purchasers in the
Company's sale of debentures, on terms and conditions similar to the terms
herein. Notwithstanding anything to the contrary herein or in the Security
Agreement, the parties understand and agree that the Security Interest rights
herein shall be secondary to any security interest rights previously granted by
the Company, including those granted in or about January 2005, and that the
provisions of this Agreement shall be interpreted accordingly. The Company shall
be entitled to grant security interest rights senior to the rights of the
Secured Parties to a financial institution, subject to the approval of the
Secured Parties, which shall not be unreasonably withheld. The Company shall be
entitled to grant security interest rights similar to the rights granted to the
Secured Parties to non-financial institution lender(s) hereafter providing a
total of at least $1,000,000 or more in working capital, subject to the approval
of the Secured Parties, which shall not be unreasonably withheld. Secured
Parties acknowledge that the Company will need additional capital for its
business. Except as provided for herein, the Company will not grant to any other
person a security interest in its assets for so long as a majority of the
Debentures sold to the Secured Parties remaining outstanding, except with the
consent of two-thirds of the outstanding face amount of the Debentures held by
the Secured Parties, which shall not be unreasonably withheld.

      3. Representations and Warranties. The Company hereby represents and
warrants, and covenants and agrees with, the Secured Party as follows:

            (a) The Company has the requisite corporate power and authority to
      enter into this Agreement and otherwise to carry out its obligations
      thereunder. The execution, delivery and performance by the Company of this
      Agreement and the filings contemplated therein have been duly authorized
      by all necessary action on the part of the Company and no further action
      is required by the Company. This Agreement constitutes a legal, valid and
      binding obligation of the Company enforceable in accordance with its
      terms, except as enforceability may be limited by bankruptcy, insolvency,
      reorganization, moratorium or similar laws affecting the enforcement of
      creditor's rights generally.

            (b) The Company represents and warrants that it has no place of
      business or offices where its respective books of account and records are
      kept (other than temporarily at the offices of its attorneys or
      accountants) or places where the Intellectual Property is stored or
      located.

            (c) The Company is the sole owner of the Intellectual Property
      (except for licenses granted by the Company in the ordinary course of
      business), and is fully authorized to grant the Security Interest in and
      to pledge the Intellectual Property, subject to the surrender and
      cancellation of previously issued debentures. Subject to the surrender and
      cancellation of previously issued debentures, there is not on file in any
      governmental or regulatory authority, agency or recording office an
      effective financing statement, security agreement, license or transfer or
      any notice of any of the foregoing (other than those that have been filed
      in favor of the Secured Party pursuant to this Agreement) covering or
      affecting any of the Intellectual Property.

            (d) The Company shall at all times maintain its books of account and
      records relating to the Intellectual Property at its principal place of
      business and may not relocate such books of account and records unless it
      delivers to the Secured Party at least 30 days prior to such relocation
      (i) written notice of such relocation and the new location thereof (which
      must be within the United States) and (ii) evidence that the necessary
      documents have been filed and recorded and other steps have been taken to
      perfect the Security Interest to create in favor of the Secured Party
      valid, perfected and continuing liens in the Intellectual Property to the
      extent they can be perfected through such filings.

            (e) This Agreement creates in favor of the Secured Party a valid
      security interest in the Intellectual Property securing the payment and
      performance of the Obligations and, upon making the filings required
      hereunder, a perfected security interest in such Intellectual Property to
      the extent that it can be perfected through such filings, and subject to
      the other and prior security interests to such Intellectual Property.

            (f) Upon request of the Secured Party, the Company shall execute and
      deliver any and all agreements, instruments, documents, and papers as the
      Secured Party may reasonably request to evidence the Secured Party's
      security interest in the Intellectual Property and the goodwill and
      general intangibles of


                                       3
<PAGE>

      the Company relating thereto or represented thereby, and the Company
      hereby appoints the Secured Party its attorney-in-fact to execute and file
      all such writings for the foregoing purposes, all acts of such attorney
      being hereby ratified and confirmed; such power being coupled with an
      interest is irrevocable until the Obligations have been fully satisfied
      and are paid in full.

            (g) The execution, delivery and performance of this Agreement does
      not conflict with or cause a breach or default, or an event that with or
      without the passage of time or notice, shall constitute a breach or
      default, under any agreement to which the Company is a party or by which
      the Company is bound.

            (h) The Company shall at all times maintain the liens and Security
      Interest provided for hereunder as valid and perfected liens and security
      interests in the Intellectual Property to the extent they can be perfected
      by filing in favor of the Secured Party until this Agreement and the
      Security Interest hereunder shall terminate pursuant to Section 8. The
      Company hereby agrees to defend the same against any and all persons. The
      Company shall safeguard and protect all Intellectual Property for the
      account of the Secured Party. Without limiting the generality of the
      foregoing, the Company shall pay all fees, taxes and other amounts
      necessary to maintain the Intellectual Property and the Security Interest
      hereunder, and the Company shall obtain and furnish to the Secured Party
      from time to time, upon demand, such releases and/or subordinations of
      claims and liens which may be required to maintain the Security Interest
      hereunder.

            (i) The Company will take all steps reasonably necessary to
      diligently pursue and seek to preserve, enforce and collect any rights,
      claims, causes of action and accounts receivable in respect of the
      Intellectual Property.

            (j) All information heretofore, herein or hereafter supplied to the
      Secured Party by or on behalf of the Company with respect to the
      Intellectual Property is accurate and complete in all material respects as
      of the date furnished.

            (k) With respect to any Intellectual Property:

                  (i) such Intellectual Property is subsisting and has not been
            adjudged invalid or unenforceable, in whole or in part;

                  (ii) such Intellectual Property is valid and enforceable; and

                  (iii) the Company is the owner of the right, title and
            interest in and to such Intellectual Property and no claim has been
            made that the use of such Intellectual Property infringes on the
            asserted rights of any third party.

      4. Defaults. The following events shall be "Events of Default":

            (a) The occurrence of an Event of Default (as defined in the
      Debentures) under the Debentures and

            (b) Any breach of, or default under, the Warrants.

      5. Rights and Remedies Upon Default. Upon occurrence of any Event of
Default and at any time thereafter, the Secured Party shall have the right to
exercise all of the remedies conferred hereunder and under the Debentures, and
the Secured Party shall have all the rights and remedies of a secured party
under the UCC and/or any other applicable law (including the Uniform Commercial
Code of any jurisdiction in which any Intellectual Property is then located).

      6. Responsibility for Intellectual Property. The Company assumes all
liabilities and responsibility in connection with all Intellectual Property, and
the obligations of the Company hereunder or under the Debentures and


                                       4
<PAGE>

the Warrants shall in no way be affected or diminished by reason of the loss,
destruction, damage or theft of any of the Intellectual Property or its
unavailability for any reason.

      7. Security Interest Absolute. All rights of the Secured Party and all
Obligations of the Company hereunder, shall be absolute and unconditional,
irrespective of: (a) any lack of validity or enforceability of this Agreement,
the Debentures, the Warrants or any agreement entered into in connection with
the foregoing, or any portion hereof or thereof; (b) any change in the time,
manner or place of payment or performance of, or in any other term of, all or
any of the Obligations, or any other amendment or waiver of or any consent to
any departure from the Debentures, the Warrants or any other agreement entered
into in connection with the foregoing; (c) any exchange, release or
nonperfection of any of the Intellectual Property, or any release or amendment
or waiver of or consent to departure from any other Intellectual Property for,
or any guaranty, or any other security, for all or any of the Obligations; (d)
any action by the Secured Party to obtain, adjust, settle and cancel in its sole
discretion any insurance claims or matters made or arising in connection with
the Intellectual Property; or (e) any other circumstance which might otherwise
constitute any legal or equitable defense available to the Company, or a
discharge of all or any part of the Security Interest granted hereby. Until the
Obligations shall have been paid and performed in full, the rights of the
Secured Party shall continue even if the Obligations are barred for any reason,
including, without limitation, the running of the statute of limitations or
bankruptcy. The Company expressly waives presentment, protest, notice of
protest, demand, notice of nonpayment and demand for performance. In the event
that at any time any transfer of any Intellectual Property or any payment
received by the Secured Party hereunder shall be deemed by final order of a
court of competent jurisdiction to have been a voidable preference or fraudulent
conveyance under the bankruptcy or insolvency laws of the United States, or
shall be deemed to be otherwise due to any party other than the Secured Party,
then, in any such event, the Company's obligations hereunder shall survive
cancellation of this Agreement, and shall not be discharged or satisfied by any
prior payment thereof and/or cancellation of this Agreement, but shall remain a
valid and binding obligation enforceable in accordance with the terms and
provisions hereof. The Company waives all right to require the Secured Party to
proceed against any other person or to apply any Intellectual Property which the
Secured Party may hold at any time, or to marshal assets, or to pursue any other
remedy. The Company waives any defense arising by reason of the application of
the statute of limitations to any obligation secured hereby.

      8. Term of Agreement. This Agreement and the Security Interest shall
terminate on the date on which all payments under the Debentures have been made
in full and all other Obligations have been paid or discharged. Upon such
termination, the Secured Party, at the request and at the expense of the
Company, will join in executing any termination statement with respect to any
financing statement executed and filed pursuant to this Agreement.

      9. Power of Attorney; Further Assurances.

            (a) The Company authorizes the Secured Party, and does hereby make,
      constitute and appoint it, and its respective officers, agents, successors
      or assigns with full power of substitution, as the Company's true and
      lawful attorney-in-fact, with power, in its own name or in the name of the
      Company, to, after the occurrence and during the continuance of an Event
      of Default, (i) to sign and endorse any UCC financing statement relating
      to the Intellectual Property; (ii) to pay or discharge taxes, liens,
      security interests or other encumbrances at any time levied or placed on
      or threatened against the Intellectual Property; and (iii) generally, to
      do, at the option of the Secured Party, at any time, or from time to time,
      all acts and things which the Secured Party deems necessary to protect and
      preserve the Intellectual Property and the Security Interest granted
      therein in order to effect the intent of this Agreement, the Debentures
      and the Warrants, as fully and effectually as the Company might or could
      do; and the Company hereby ratifies all that said attorney shall lawfully
      do or cause to be done by virtue hereof. This power of attorney is coupled
      with an interest and shall be irrevocable for the term of this Agreement
      and thereafter as long as any of the Obligations shall be outstanding.

            (b) On a continuing basis, the Company will make, execute,
      acknowledge, deliver, file and record, as the case may be, in the proper
      filing and recording places in any jurisdiction, all such instruments, and
      take all such action as may reasonably be deemed necessary or advisable,
      or as reasonably requested by the Secured Party, to perfect the Security
      Interest granted hereunder and otherwise to carry out


                                       5
<PAGE>

      the intent and purposes of this Agreement, or for assuring and confirming
      to the Secured Party the grant or perfection of a security interest in the
      Intellectual Property.

            (c) The Company hereby irrevocably appoints the Secured Party as the
      Company's attorney-in-fact, with full authority in the place and stead of
      the Company and in the name of the Company, from time to time in the
      Secured Party's discretion, to take any action and to execute any
      instrument which the Secured Party may deem necessary or advisable to
      accomplish the purposes of this Agreement, including the filing, in its
      sole discretion, of one or more financing or continuation statements and
      amendments thereto, relative to any of the Intellectual Property without
      the signature of the Company where permitted by law.

      10. Notices. All notices, requests, demands and other communications
hereunder shall be in writing, with copies to all the other parties hereto, and
shall be deemed to have been duly given when (i) if delivered by hand, upon
receipt, (ii) if sent by facsimile, upon receipt of proof of sending thereof,
(iii) if sent by nationally recognized overnight delivery service (receipt
requested), the next business day or (iv) if mailed by first-class registered or
certified mail, return receipt requested, postage prepaid, four days after
posting in the U.S. mails, in each case if delivered to the following addresses:

                                    If to the Company:
                                    Attn.:  Wilfred Shorrocks, President
                                    Peak Entertainment Holdings, Inc.
                                    Bagshaw Hall, Bagshaw Hill
                                    Bakewell, Derbyshire, UK DE45 1DL
                                    Tel:  +44(0)1629 814555
                                    Fax:  +44(0)1629 813539

                                    With a copy to (which shall not constitute
                                    notice):
                                    Attn:   Dan Brecher
                                    Law Offices of Dan Brecher
                                    99 Park Avenue, 16th Floor
                                    New York, New York 10016
                                    Tel: (212) 286-0747
                                    Fax: (212) 808-4155

                                    If to the Secured Party:
                                    At the address and facsimile number as
                                    provided pursuant to the Securities Purchase
                                    Agreement.

      11. Other Security. To the extent that the Obligations are now or
hereafter secured by property other than the Intellectual Property or by the
guarantee, endorsement or property of any other person, firm, corporation or
other entity, then the Secured Party shall have the right, in its sole
discretion, to pursue, relinquish, subordinate, modify or take any other action
with respect thereto, without in any way modifying or affecting any of the
Secured Party's rights and remedies hereunder.

      12. Miscellaneous.

                  (a) No course of dealing between the Company and the Secured
            Party, nor any failure to exercise, nor any delay in exercising, on
            the part of the Secured Party, any right, power or privilege
            hereunder or under the Debentures shall operate as a waiver thereof;
            nor shall any single or partial exercise of any right, power or
            privilege hereunder or thereunder preclude any other or further
            exercise thereof or the exercise of any other right, power or
            privilege.

                  (b) All of the rights and remedies of the Secured Party with
            respect to the Intellectual Property, whether established hereby or
            by the Debentures or by any other agreements, instruments or
            documents or by law shall be cumulative and may be exercised singly
            or concurrently.


                                       6
<PAGE>

                  (c) This Agreement and the Security Agreement constitute the
            entire agreement of the parties with respect to the subject matter
            hereof and is intended to supersede all prior negotiations,
            understandings and agreements with respect thereto. Except as
            specifically set forth in this Agreement, no provision of this
            Agreement may be modified or amended except by a written agreement
            specifically referring to this Agreement and signed by the parties
            hereto.

                  (d) In the event that any provision of this Agreement is held
            to be invalid, prohibited or unenforceable in any jurisdiction for
            any reason, unless such provision is narrowed by judicial
            construction, this Agreement shall, as to such jurisdiction, be
            construed as if such invalid, prohibited or unenforceable provision
            had been more narrowly drawn so as not to be invalid, prohibited or
            unenforceable. If, notwithstanding the foregoing, any provision of
            this Agreement is held to be invalid, prohibited or unenforceable in
            any jurisdiction, such provision, as to such jurisdiction, shall be
            ineffective to the extent of such invalidity, prohibition or
            unenforceability without invalidating the remaining portion of such
            provision or the other provisions of this Agreement and without
            affecting the validity or enforceability of such provision or the
            other provisions of this Agreement in any other jurisdiction.

                  (e) No waiver of any breach or default or any right under this
            Agreement shall be deemed a waiver of any subsequent breach or
            default or right, whether of the same or similar nature or
            otherwise.

                  (f) This Agreement shall be binding upon and inure to the
            benefit of each party hereto and its successors and assigns.

                  (g) Each party shall take such further action and execute and
            deliver such further documents as may be necessary or appropriate in
            order to carry out the provisions and purposes of this Agreement.

                  (h) This Agreement shall be construed in accordance with the
            laws of the State of New York, except to the extent the validity,
            perfection or enforcement of a security interest hereunder in
            respect of any particular Intellectual Property which are governed
            by a jurisdiction other than the State of New York in which case
            such law shall govern. Each of the parties hereto irrevocably submit
            to the exclusive jurisdiction of any state or federal court sitting
            in the County of New York in the State of New York over any action
            or proceeding arising out of or relating to this Agreement, and the
            parties hereto hereby irrevocably agree that all claims in respect
            of such action or proceeding may be heard and determined in such
            state or federal court. The parties hereto agree that a final
            judgment in any such action or proceeding shall be conclusive and
            may be enforced in other jurisdictions by suit on the judgment or in
            any other manner provided by law. The parties hereto further waive
            any objection to venue in the State of New York and any objection to
            an action or proceeding in the State of New York on the basis of
            forum non conveniens.

                  (i) EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE
            RIGHTS TO A JURY TRAIL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
            ARISING OUT OF THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED
            TO BE ALL ENCOMPASSING OF ANY DISPUTES THAT MAY BE FILED IN ANY
            COURT AND THAT RELATE TO THE SUBJECT MATER OF THIS AGREEMENT,
            INCLUDING WITHOUT LIMITATION CONTRACT CLAIMS, TORT CLAIMS, BREACH OF
            DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH
            PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT
            FOR EACH PARTY TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH
            PARTY HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS
            AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY ON THIS WAIVER
            IN THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND
            REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL,
            AND THAT SUCH PARTY HAS KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHTS
            TO A JURY TRIAL FOLLOWING SUCH CONSULTATION. THIS WAIVER IS
            IRREVOCABLE, MEANING THAT, NOTWITHSTANDING ANYTHING HEREIN TO THE
            CONTRARY, IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND
            THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS AND
            SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF A
            LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
            TRIAL BY THE COURT.


                                       7
<PAGE>

                  (j) This Agreement may be executed in any number of
            counterparts, each of which when so executed shall be deemed to be
            an original and, all of which taken together shall constitute one
            and the same Agreement. In the event that any signature is delivered
            by facsimile transmission, such signature shall create a valid
            binding obligation of the party executing (or on whose behalf such
            signature is executed) the same with the same force and effect as if
            such facsimile signature were the original thereof.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                       8
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.

THE COMPANY:                           PEAK ENTERTAINMENT HOLDINGS, INC.

                                       By:
                                          --------------------------------------
                                          Wilf Shorrocks
                                          President and Chief Executive Officer

THE SECURED PARTY:                     __________________________


                                       9
<PAGE>

                                   SCHEDULE A

A.      Software Intellectual Property:      None.

B.      Copyrights:                          None, other than any, if any,
                                             disclosed in filings
                                             with the S.E.C.

C.      Copyright Licenses:                  None, other than any, if any,
                                             disclosed in filings
                                             with the S.E.C.

D.      Patents:                             None.

E.      Patent Licenses:                     None.

F.      Trademarks:                          None, other than any, if any,
                                             disclosed in filings
                                             with the S.E.C.

G.      Trademark Licenses:                  None, other than any, if any,
                                             disclosed in filings
                                             with the S.E.C.

H.      Trade Secrets:                       None.


                                       10