Document:

exhibit10-2.htm

    AMENDMENT
TO EXCLUSIVE LICENSE AGREEMENT

    

    

    This Amendment (“Amendment”) is made
effective as of October 2, 2008, and amends that certain Exclusive License
Agreement (hereinafter, the “Agreement”), dated September 22, 2008, by and
between Global Entertainment Holdings, Inc., as the “Licensor”, and Global
Universal Pictures, Inc., as the “Licensee.”

    

    WHEREAS, Licensor has agreed
to consent to Licensee’s assignment of certain rights granted under the
Agreement; and

    

    WHEREAS, Licensee desires that
Licensor undertake an investment in B & J Pictures, Inc., a New Brunswick
Corporation (“B & J”), a entity that is producing the film, Blue Seduction,
based on the intellectual property licensed under the Agreement;
and

    

    WHEREAS, B & J is majority
owned and controlled by Licensee, and Licensee covenants with Licensor that it
will cause B & J to become a co-debtor of a certain promissory note executed
by Licensee as consideration for the licensing rights granted under the
Agreement; and

    

    WHEREAS, the Licensor is
agreeable to such transactions, predicated upon the mutual execution of this
Amendment;

    

    NOW, THERFORE, in
consideration of the mutual covenants contained in this Amendment and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Licensor and Licensee hereby agree to amend the Agreement as set
forth below:

    

    1.           Sub-Section
3.1 of Section 3 of the Agreement, captioned COMPENSATION, shall be amended as
follows:

    

    The reference therein to:  “...
(i) a sum of CA$150,000, and ...”, shall be amended to state:

    “...
(i) a sum of $150,000, payable in United States Dollars, and shall be payable by
promissory note, in the form attached hereto as Schedule B, incorporated as a
part of this Agreement, and ...”

    

    2.           The
Agreement shall be amended by affixing a Schedule B, listing a promissory note
to be executed by the Licensee in consideration for the licensing rights granted
under the Agreement, which Schedule B shall be incorporated as a part of the
Agreement.

    

    3.           This
Amendment shall amend the Agreement only as expressly set forth hereinabove and
in all other respects, said Agreement shall remain unchanged and in full force
and effect.  All capitalized terms used but not defined herein shall
have the respective meaning ascribed to them in the Agreement hereby
amended.

    

    4.           The
Agreement as amended by this Amendment, including any and all schedules thereto
or hereto, contains the entire understanding of Licensor and Licensee with
respect to the intellectual rights granted Licensee under the Agreement, and
supersedes and abrogates all contemporaneous and prior understandings of the
parties, whether written or oral, relating thereto.  The Agreement as
amended by this Amendment may not be further modified or changed except in a writing executed by the
parties.

    

    

    The signatories below represent that
they have been duly authorized by their respective companies to execute this
Amendment.

    

    ACCEPTED
AND AGREED TO AS OF THE DATE FIRST WRITTEN ABOVE.

     

                                                            

    
       

      
        	 “Licensor”  	 “Licensee”
	 Global
      Entertainment Holdings, Inc. 	 Global
      Universal Pictures, Inc.

      

       

    

     

    
      	 By: Gary
      Rasmussen  	 By: Jacqueline
      Giroux
	Its:  CEO 	  Its:  President

    

     

    

    

    ACKNOWLEDGED AND AGREED
TO:

    

    B
& J Pictures, Inc.

    

     

    
      	 By: Jacqueline
      Giroux
	 Its:  President

    

     

    
      
        
           

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
B

    Attachment
to Exclusive License Agreement

    By
Amendment Dated October 2, 2008

    

    SECURED
PROMISSORY NOTE

     

    $150,000.00 October
2, 2008

    Los
Angeles, California

     

    1. Promise to
Pay.  For good and valuable consideration, the receipt of which
is hereby acknowledged, GLOBAL UNIVERSAL PICTURES, INC., a Canadian corporation
whose address is 11 Pine Court, Maugerville, New Brunswick, Canada E3A 8M8
(“Maker”), promises to pay to GLOBAL ENTERTAINMENT HOLDINGS, INC., a Nevada
corporation (“Payee”), on March 31, 2009 (the “Maturity Date”), unless sooner
paid as provided in Section 3 hereof, the principal sum of One Hundred Fifty
Thousand ($150,000.00) Dollars (U.S.), plus accrued interest thereon, in one
lump sum payment.  The principal sum of this Secured Promissory Note
(the “Note”) shall bear interest at a rate equal to ten percent (10%) per annum
from the date hereof to the date the principal sum is paid in full; provided
however that if this Note is not paid in full on the Maturity Date or the date
required pursuant to Section 3 hereof, whichever is earlier, the unpaid balance
of the Note shall bear interest therefrom and until paid at the Default Rate (as
hereinafter defined).  All payments under this Note shall be made to
the order of the Payee at 650 N. Bronson Avenue, Suite B-116, Los Angeles,
California 90004, or such other address as Payee may designate in writing to
Maker, in United States Dollars, and shall be applied first to accrued, but
unpaid interest, if any, and then to principal.

     

    2. Security.  The
full and punctual payment and performance of this Note by Maker is secured by a
grant by Maker to Payee of a general lien on any and all rights in and to the
motion picture property being produced by Maker or its affiliates, tentatively
entitled “Blue Seduction”, plus the intellectual property rights licensed to
Maker by Payee, pursuant to a certain Exclusive Licensing Agreement of even date
herewith (hereinafter, the foregoing described general lien and the licensed
intellectual property rights are collectively referred to as the
“Collateral”).  Maker, and any co-debtor, hereby grant Payee a first
priority security interest in and to the Collateral, subordinate only to any
bank loan granted for purposes of financing “Blue Seduction.”  The
security interest granted in the Collateral to Payee hereunder extends to the
proceeds of any sale or other transfer or disposition of the Collateral, whether
by Maker, the Payee or any other entity or person, that occurs prior to the
payment in full of this Note.

     

    3. Prepayments.

     

    (a) Mandatory
Prepayment.  If, prior to the payment in full of this Note, an
Event of Default (as defined below), occurs, the principal amount of the Note
then outstanding, together with accrued but unpaid interest thereon and any
other amounts that may have become due by Maker to Payee under this Note or the
security interest granted herein, shall be and become immediately due and
payable.  If, after the date hereof, but prior to Maturity Date, Maker
shall have fully repaid any bank loans received for the production of “Blue
Seduction,” Maker, or any co-debtor hereunder, covenants with Payee that all
available funds received by Maker from any and all sources, shall first be used
to immediately pay the outstanding accrued interest and principal balance of
this Note.

     

    (b)   Maker
shall also immediately pay the outstanding principal balance of this Note,
together with accrued but unpaid interest thereon, in the event that Maker sells
or agrees to sell all or substantially all of its assets to a party other than
Payee, or Maker agrees to enter into any agreement or understanding pursuant to
which more than 50% of the outstanding capital stock of Maker is or shall be
acquired by a party other than Payee.

     

    (c) Voluntary
Prepayment.  Maker may voluntarily prepay this Note either in
whole or in part without penalty or premium.

     

    4. Waivers.  Except
as provided herein, Maker hereby waives diligence, presentment for payment,
demand, protest, notice of non-payment, notice of dishonor, notice of protest,
and any and all other notices and demands whatsoever.  Maker shall
remain bound under this Note until all principal and interest and any other
amounts that are payable hereunder or under the security interest granted in the
Collateral have been paid in full, notwithstanding any extensions or renewals
granted with respect to this Note or the release of any party liable hereunder
or any security for the payment of this Note.  Maker, and any and all
endorsers hereof, also waive the right to plead any and all statutes of
limitations as a defense to any demand on this Note or any and all obligations
or liabilities arising out of or in connection with this Note or the security
interest granted in the Collateral hereunder, to the fullest extent permitted by
law.

     

    5. Negative
Covenants.  So long as any portion of this Note remains unpaid,
Maker covenants that:

     

    (a) No
dividends, whether in cash or property, shall be paid or declared, nor shall any
other distribution be made, on or in respect to any equity securities of Maker,
or any co-debtor, nor shall any outstanding equity securities of Maker be
purchased, redeemed or otherwise acquired for value by Maker; and

     

    (b) No
security interest, lien or other encumbrance shall be granted or permitted to
exist on any of the assets of Maker, except in favor of Payee, except for
Permitted Encumbrances (which are defined as inchoate statutory liens,
mechanic’s liens, tax liens, or notice filings with regard to
leases).

     

    6. Events of
Default.  Any of the following events shall constitute an event
of default by Maker under this Note (an “Event of Default”):

     

    (a) The
failure of Maker to pay to Payee, on the Maturity Date, any and all amounts due
and owing under this Note which shall continue for ten (10) days after written
notice to Maker and its counsel; or

     

    (b) There
occurs any breach of the obligations of Maker under the covenants set forth in
Section 5 of this Note which shall continue for ten (10) days after written
notice to Maker; or

     

    (c) There
occurs any other event or circumstance that constitutes an “Event of Default” as
defined herein (taking into account any applicable cure periods).

     

    Upon the
occurrence of any Event of Default, as defined hereinabove, at Payee’s option,
Payee may declare immediately due and payable, and on any such declaration there
shall become immediately due and payable, the entire unpaid principal balance of
this Note, together with all accrued and unpaid interest under this Note and any
other sums owing at the time of such declaration pursuant to this Note, and
Payee shall be entitled to exercise all rights and remedies available to Payee
under this Note, including the right to execute against any Collateral and under
applicable law, all of which rights and remedies shall be
cumulative.  Without limiting the generality of the foregoing, upon
the occurrence of an Event of Default, the interest rate at which interest shall
accrue on the principal sum and any other amounts that are due under this Note
shall increase to the maximum interest rate permitted under applicable law (the
“Default Rate”), until all such amounts have been paid in full.

     

    7. No Waiver by
Payee.  Any delay or omission on the part of Payee to exercise
any of Payee’s rights or remedies hereunder, under the security interest granted
in the Collateral or under applicable law, including, without limitation, the
right to accelerate amounts owing under this Note, shall not be deemed a waiver
of that right or remedy or of any other right or remedy of Payee in respect
thereof.  The acceptance by Payee of any payment pursuant to the terms
of this Note which is less than payment in full of all amounts due and payable
at the time of such payment shall not constitute a waiver of the right to
exercise any of the Payee’s rights or remedies under this Note or under
applicable law at that time or at any subsequent time or nullify any prior
exercise of any such rights or remedies without the express written consent of
Payee, except as and to the extent provided to the contrary by applicable
law.

     

    8. Governing
Law.  This Note shall be governed by and construed according to
and enforced under the internal laws of the State of California with respect to
contracts wholly performed within the State and without giving effect to its
choice of laws.

     

    9. Enforcement of the
Note.  Maker and Payee hereby irrevocably agree that the state
and federal courts in and for the County of Los Angeles, California shall have
exclusive jurisdiction over any disputes, between the Maker and Payee and any
action, suit or other proceeding brought by Maker or Payee relating to the
interpretation or enforcement of this Note, and each of the parties further
agrees as follows:  (i) such party shall accept and not contest the
personal or subject matter jurisdiction of such Court; (ii) such party shall
accept and not object to or challenge the venue of such Court or assert the
doctrine of ‘forum non
conveniens’ with respect to such Court; (iii) such party shall accept and
not contest the validity or effectiveness of service of process in any such
action, suit or other proceeding by registered or certified first class mail
sent to Maker, Payee and their respective counsel; and (iv) TO THE MAXIMUM
EXTENT PERMITTED BY LAW, SUCH PARTY WAIVES AND SHALL WAIVE ANY RIGHT TO A TRIAL
BY JURY IN ANY ACTION OR OTHER PROCEEDING BROUGHT WITH RESPECT TO THIS NOTE OR
ITS ENFORCEMENT OR INTERPRETATION.  If an Event of Default occurs
under this Note or under the security interest granted herein, then Maker shall
pay all costs of enforcement and collection, including, without limitation,
reasonable attorneys’ fees and costs incurred by Payee, whether or not
enforcement and collection includes the filing of a lawsuit, and whether or not
that lawsuit is prosecuted to judgment.  The costs of enforcement and
collection shall be added to the principal amount of the Note and shall accrue
interest at the Default Rate from the date incurred by Payee to the date paid by
Maker.  In the event that Maker prevails with respect to any
litigation concerning this Note or the security interest granted herein, Payee
shall pay Maker’s related reasonable attorneys fees and costs.

     

    10. Binding
Nature.  The provisions of this Note shall be binding upon
Maker, and any co-debtor, jointly and severally, and shall inure to the benefit
of the Payee.

     

    11. Usury Savings
Provisions.  In the event Payee receives any sums under this
Note which constitute interest in an amount in excess of that permitted by any
applicable law, then, all such sums constituting interest in excess of that
permitted to be paid under applicable law shall, at Payee’s option, either be
credited to the payment of principal owing hereunder or returned to
Maker.  The provisions of this Paragraph control the other provisions
of this Note and any other agreement between Maker and Payee.

     

    12. Severability.  If,
but only to the extent that, any provision of this Note shall be invalid or
unenforceable, then, such offending provision shall be deleted from this Note,
but only to the extent necessary to preserve the validity and effectiveness of
this Note to the fullest extent permitted by applicable law.

     

    13. Interpretation.  No
provision of this Note shall be interpreted for or against Maker or Payee
because that person or that person’s legal representative drafted such
provision.  Unless otherwise indicated elsewhere in this Note,
(a) the term “or” shall not be exclusive, (b) the term “including”
shall mean “including, but not limited to,” and (c) the terms “herein,”
“hereof,” “hereto,” “hereunder” and other terms similar to such terms shall
refer to this Note as a whole and not merely to the specific section,
subsection, paragraph or clause where such terms may
appear.   The Section and paragraph headings in this Note are
included for convenience of reference only and shall be ignored in the
construction or interpretation of this Note.

     

    14. Assignment.  This
Note shall be non-assignable by either party, except that Payee may assign its
rights hereunder in connection with the sale of substantially all of its stock
or assets. Notwithstanding the foregoing, in the event that the Maker assigns
its Licensing Rights relating to the motion picture “Blue Seduction”, which
constitute a portion of the Collateral under this Note, the Maker warrants that
it shall cause any assignee of said Licensing Rights to assume the liability
created by this Note and become bound hereunder as a co-debtor with Maker,
jointly and severally in all respects.

     

    Dated as
of October __,
2008.                                                                “MAKER”

    Global
Universal Pictures, Inc.

    

    

    

    By: 

          
Jacqueline Giroux,
President                                                               

           

    

    The
undersigned entity has become an assignee or beneficiary of certain Licensing
Rights referred to hereinabove and hereby agrees to assume the liability created
by this Note, and become legally bound hereunder as a co-debtor with Maker,
jointly and severally in all respects. The undersigned signatory warrants that
it has been duly authorized to execute this instrument on behalf on the entity
stated below.

    

    Dated as
of October __,
2008.                                                                “CO-DEBTOR”

    B
& J Pictures, Inc.

    A
New Brunswick Corporation

    Address:11
Pine Court

    Maugerville, New Brunswick

    Canada  E3A 8M8

    By:                                                                

           Jacqueline
Giroux, Presidentexhibit10-3.htm

    

     

    GENERAL
SECURITY AGREEMENT

     

     

     

    THIS GENERAL SECURITY
AGREEMENT (“Agreement”) is made and effective as of October 2,
2008.

     

    

     

    
      	
               AGREEMENT

            

    

     

     

    
      	
              BETWEEN

            	
              B & J PICTURES,
      INC., a corporation incorporated under the Business Corporations
      Act (New Brunswick), having its registered office at 11 Pine Court,
      Maugerville, New Brunswick, E3A 8M8 Canada, represented by Jacquelin
      Giroux, duly authorized as she so declares (hereinafter referred to as
      “B&J”);

            

    

    

    
      	
              AND

            	
              GLOBAL UNIVERSAL PICTURES
      INC., a corporation incorporated under the Canada Business
      Corporations Act, having its registered office at 11 Pine Court,
      Maugerville, New Brunswick, E3A 8M8 Canada, represented by Jacquelin
      Giroux, duly authorized as she so declares (hereinafter referred to as
      “Global”, and
      B&J and Global are hereinafter
      collectively referred to as the “Debtor”)

            

    

    

    
      	
              IN FAVOUR
      OF:

            	
              GLOBAL ENTERTAINMENT HOLDINGS,
      INC., a Nevada Corporation, located at 650 N. Bronson Avenue, Suite
      B-116, Los Angeles, California 90004 USA (the "Secured
      Party")

            

    

     

    

     

     

    RECITALS

     

    
      	
              A.

            	
              Pursuant
      to a certain General Security Agreement, dated as of October 10, 2008,
      between B&J (as “Debtor) and National Bank of Canada, a Canadian bank
      duly constituted under the Bank Act of Canada (as
      “Lender”), National Bank of Canada holds a first security interest on all
      assets and other property of B&J, in connection with a certain credit
      facility made available to B&J, to which the security interest granted
      under this Agreement shall be deemed subordinate, solely with respect to
      B&J, and only until such date as B&J’s obligation to the National
      Bank of Canada has been satisfied and
  discharged.

            

    

    

     

    
      	
              B.

            	
              Pursuant
      to a certain Completion Agreement, dated as of October 15, 2008, by and
      between B&J and Global (collectively as “Producers) and Film Finances
      Canada, Ltd. (as “Guarantor”), the Secured Party executed its guarantee
      (“Completion
      Guarantee”) of any sums that may be due and owing by Debtor to Film
      Finances Canada, Ltd.

            

    

     

     

    
      	
              C.

            	
              Pursuant
      to a certain Exclusive License Agreement dated September 22, 2008, as
      amended on October 2, 2008, between Global and Secured Party, Global
      executed its promissory note in favor of Secured Party (“Promissory Note”) in the
      principal amount of One Hundred Fifty Thousand ($150,000) Dollars, payable
      in currency of the United States, as consideration for licensing exclusive
      rights to specific intellectual property as more fully described therein
      (hereinafter, the “Completion Guarantee” and the
      “Promissory Note” are collectively referred to as the “Debtor
      Obligations”).

            

    

     

     

    
      	
              D.

            	
              In
      connection with the Secured Party’s execution of the Completion Guarantee
      and the acceptance of the Debtor’s Promissory Note, and as a condition
      precedent thereto, the Secured Party has required that the Debtor execute
      and deliver this Agreement as security for the payment and performance of
      the Debtor Obligations.

            

    

     

     

    In
consideration of the sum of $1.00 and for other good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged), the Debtor
agrees with the Secured Party as follows:

     

    

     

    1.           INTERPRETATION

     

     

    1.1 Definitions - In this
Agreement:

     

     

    "Accession" means “accession”
as defined in the PPSA as in force on the date hereof;

     

     

    "Account" means “account” as
defined in the PPSA as in force on the date hereof;

     

     

    "this Agreement", "hereto", "herein",
"hereof", "hereby", "hereunder" and any similar expressions refer to this
Agreement and the Schedules as they may be amended or supplemented from time to
time, and not to any particular section or other portion thereof and, unless
otherwise indicated, references to Clauses, Schedules and Sections are
references to clauses, schedules and sections of this Agreement;

     

     

    "Business Day" means any day,
other than Saturday, Sunday or any statutory holiday in the Province of New
Brunswick and in the United States of America;

     

     

    "Chattel Paper" means “chattel
paper” as defined in the PPSA as in force on the date hereof;

     

     

    "Collateral" means all of the
undertaking, property and assets of the Debtor subject to, or intended to be
subject to, the Security Interest, all as more particularly described in Section
2.1, and any reference to "Collateral" shall be deemed
to be a reference to "Collateral or any part
thereof" except where otherwise specifically provided;

     

     

    "Debtor Obligations" means all
of the obligations, liabilities and indebtedness of the Debtor to the Secured
Party from time to time, whether present or future, absolute or contingent,
liquidated or unliquidated, as principal or as surety, alone or with others of
whatsoever nature or kind, in any currency or otherwise under or in respect of
agreements or dealings between the Debtor and the Secured Party or agreements or
dealings between the Secured Party and any Person by which the Secured Party may
be or become in any manner whatsoever a creditor of the Debtor, including
without limitation, all obligations, liabilities and indebtedness of the Debtor
pursuant to the Completion Guarantee and the Promissory Note;

     

     

    "Document of Title" means
“document of title” as defined in the PPSA as in force on the date
hereof;

     

     

    "Equipment" means “equipment”
as defined in the PPSA as in force on the date hereof;

     

     

    "Event of Default" has the
meaning attributed to such term in Section 8;

     

     

    "Goods" means “goods” as
defined in the PPSA as in force on the date hereof;

     

     

    "Instrument" means
“instrument” as defined in the PPSA as in force on the date hereof;

     

     

    "Intangible" means
“intangible” as defined in the PPSA as in force on the date hereof;

     

     

    "Inventory" means “inventory”
as defined in the PPSA as in force on the date hereof;

     

     

    "Lien" means any mortgage,
pledge, charge, assignment, security interest, hypothec, lien or other
encumbrance, including, without limitation, any agreement to give any of the
foregoing, or any conditional sale or other title retention
agreement;

     

     

    "Money" means “money” as
defined in the PPSA as in force on the date hereof;

     

     

    "Person" means any individual,
partnership, limited partnership, joint venture, syndicate, sole proprietorship,
company or corporation with or without share capital, unincorporated
association, trust, trustee, executor, administrator or other legal personal
representative, regulatory body or agency, government or governmental agency,
authority or entity however designated or constituted;

     

     

    "PPSA" means the Personal Property Security
Act (New Brunswick) as amended from time to time and any Act substituted
therefor and amendments thereto;

     

     

    "Proceeds" means “proceeds” as
defined in the PPSA as in force on the date hereof; "Receiver" means any of a
receiver, manager, receiver-manager and receiver and manager;

     

     

    "Security" means “security” as
defined in the PPSA as in force on the date hereof; and

     

     

    "Security Interest" has the
meaning attributed to such term in Section 2.1.

     

     

    1.2           Currency - Except for amounts
due under the Promissory Note, and where otherwise expressly provided, all
amounts in this Agreement are stated and shall be paid in Canadian
currency.

     

     

    1.3           Gender and Number - In this
Agreement, unless the context otherwise requires, words importing the singular
include the plural and vice versa and words importing gender include all
genders.

     

     

    1.4           Invalidity of Provisions -
Each of the provisions contained in this Agreement is distinct and severable and
a declaration of invalidity or unenforceability of any such provision or part
thereof by a court of competent jurisdiction shall not affect the validity or
enforceability of any other provision hereof.

     

     

    1.5           Amendment, Waiver - No
amendment or waiver of this Agreement shall be binding unless executed in
writing by the party to be bound thereby. No waiver of any provision of this
Agreement shall constitute a waiver of any other provision nor shall any waiver
of any provision of this Agreement constitute a continuing waiver unless
otherwise expressly provided.

     

     

    1.6           Governing Law, Attornment -
This Agreement shall be governed by and construed in accordance with the laws of
the Province of New Brunswick and the federal laws of Canada applicable therein.
The Debtor hereby irrevocably attorns to the non-exclusive jurisdiction of the
courts of New Brunswick in regard to all disputes that may arise under this
Agreement, provided however that nothing herein shall prevent the Secured Party
from proceeding at its election against the Debtor in the courts of any other
jurisdiction.

     

     

    2.           SECURITY
INTEREST

     

     

    2.1           Creation of Security Interest
- Subject to Sections 2.2 and 2.3, the Debtor hereby mortgages, pledges, charges
and assigns to the Secured Party and grants to the Secured Party a security
interest (in which mortgages, charges, assignments and security interest are
hereinafter collectively referred to as the "Security Interest") all of its
right, title and interest in all of its present and after-acquired personal
property of whatsoever nature and kind and wherever situate including, without
limitation, the following:

     

     

    (a)           all
Goods (including, without limitation, all parts, accessories, attachments,
additions and Accession thereto) whether or not such Goods are now or hereafter
become fixtures, all Accounts, all Chattel Paper, all Documents of Title
(whether negotiable or not), all Equipment, all Inventory of whatever kind and
wherever situated, all Instruments, all Intangibles, all Money and all
Securities, and all other personal property, if any, in each case now owned or
hereafter acquired by or on behalf of the Debtor or in respect of which the
Debtor now or hereafter has any right, title or interest (including, without
limitation, such as may be returned to or repossessed by the Debtor) and
including, without limitation, all contracts, licenses, computer software,
warranties, ownership certificates, manuals, publications, books, statements of
account, bills, invoices, letters and other documents or records in any form
evidencing or relating to any of the foregoing property and including, without
limitation, the property described in Schedule "A" hereto forming an integral
part hereof;

     

     

    (b)           all
Accounts and book debts and generally all debts, dues, claims, choses in action
and demands of every nature and kind howsoever arising or secured including
letters of credit and advices of credit, which are now due, owing or accruing or
growing due to or owned by or which may hereafter become due, owing or accruing
or growing due to or owned by the Debtor (collectively the “Debts”);

     

     

    (c)           all
deeds, documents, writings, papers, books of account and other books relating to
or being records of Debts, Chattel Paper or Documents of Title or by which such
are or may hereafter be secured, evidenced, acknowledged or made
payable;

     

     

    (d)           all
contractual rights and insurance claims;

     

     

    (e)           all
goodwill, patents and patents rights, trademarks, copyrights, trade names,
literary property rights, music rights and all other intangible property of an
intellectual nature (collectively the “Intellectual
Property”);

     

     

    (f)           all
renewals of, accretions to and substitutions for any of the property described
in this Clause 2.1; and

     

     

    (g)           all
Proceeds (including Proceeds of Proceeds) of any of the property described in
this Clauses 2.1.

     

     

    2.2           Exception for Last Day of
Leases - The Security Interest granted hereby does not and shall not
extend to, and the Collateral shall not include, the last day of the term of any
lease or sub-lease, oral or written, or any agreement therefor, now held or
hereafter acquired by the Debtor, but upon the sale of the leasehold interest or
any part thereof the Debtor shall stand possessed of such last day in trust to
assign the same as the Secured Party shall direct.

     

     

    2.3           Exception for Contractual
Rights - The Security Interest granted hereby does not and shall not
extend to, and the Collateral shall not include, any agreement, right,
franchise, license or permit (the "contractual rights") to which the Debtor is a
party or of which the Debtor has the benefit, to the extent that the creation of
the Security Interest therein would constitute a breach of the terms of or
permit any Person to terminate the contractual rights, but the Debtor shall hold
its interest therein in trust for the Secured Party and shall assign such
contractual rights to the Secured Party forthwith upon obtaining the consent of
the other party thereto. The Debtor agrees that it shall, upon the request of
the Secured Party, use all commercially reasonable efforts to obtain any consent
required to permit any contractual rights to be subjected to the Security
Interest.

     

     

    2.4           Attachment - The attachment of
the Security Interest has not been postponed and the Security Interest shall
attach to any particular Collateral as soon as the Debtor has rights in such
Collateral.

     

     

    3.           OBLIGATIONS
SECURED

     

     

    3.1           Obligations Secured - The
Security Interest granted hereby secures payment, performance and satisfaction
of the Debtor Obligations.

     

     

    4.           REPRESENTATIONS
AND WARRANTIES

     

     

    4.1           Representations and Warranties
- The Debtor represents and warrants, and so long as this Agreement remains in
effect shall be deemed continuously to represent and warrant, that:

     

     

    (a)           it
is duly incorporated and validly existing under the laws of its jurisdiction of
incorporation and has the corporate power and capacity to own its properties and
assets and to carry on its business as presently carried on by it;

     

     

    (b)           it
has the corporate power and capacity to enter into this Agreement and to do all
acts and things as are required or contemplated hereunder to be done, observed
and performed by it;

     

     

    (c)           it
has taken all necessary corporate action to authorize the execution, delivery
and performance of this Agreement;

     

     

    (d)           there
is no unanimous shareholder agreement which restricts, in whole or in part, the
powers of the directors of the Debtor to manage or supervise the business and
affairs of the Debtor;

     

     

    (e)           the
entering into of this Agreement and the performance by the Debtor of its
obligations hereunder does not and will not contravene, breach or result in any
default under the articles, by-laws, constating documents or other
organizational documents of the Debtor or under any mortgage, lease, agreement
or other legally binding instrument, license, permit or law to which the Debtor
is a party or by which the Debtor or any of its properties or assets may be
bound and will not result in or permit the acceleration of the maturity of any
indebtedness, liability or obligation of the Debtor under any mortgage, lease,
agreement or other legally binding instrument of or affecting the
Debtor;

     

     

    (f)           no
authorization, consent or approval of, or filing with or notice to, any Person
is required in connection with the execution, delivery or performance of this
Agreement by the Debtor;

     

     

    (g)           except
as disclosed in writing to the Secured Party, there is no court, administrative,
regulatory or similar proceeding (whether civil, quasi-criminal, or criminal);
arbitration or other dispute settlement procedure; investigation or enquiry by
any government body; or any similar matter or proceeding (collectively
"proceedings") against or involving the Debtor (whether in progress or
threatened) which, if determined adversely to the Debtor, would adversely affect
its business, property, financial condition or prospects or its ability to
perform any of the provisions of this Agreement; no event has occurred which
might give rise to any proceedings and there is no judgment, decree, injunction,
rule, award or order of any governmental body outstanding against the Debtor
which has or may have an adverse effect on its business, property, financial
condition or prospects;

     

     

    (h)           the
Debtor does not have or use a French form of name or a combined English and
French form of name;

     

     

    (i)           the
Debtor owns the Collateral free of all Liens;

     

     

    (j)           each
Account, Chattel Paper and Instrument constituting the Collateral is enforceable
in accordance with its terms against the Person obligated to pay the same, and
the amount represented by the Debtor to the Secured Party from time to time as
owing by each such Person or by all such Persons will be the correct amount
actually and unconditionally owing by such Person or Persons, except for normal
cash discounts where applicable, and no such Person will have any defense,
set-off, claim or counterclaim against the Debtor which can be asserted against
the Secured Party, whether in any proceeding to enforce the Collateral or
otherwise; and

     

     

    (k)           the
locations specified in Schedule "B" hereto forming an integral part hereof as to
business operations and records are accurate and complete and, with respect to
Goods (including Inventory) constituting the Collateral, the locations specified
in Schedule "B" are accurate and complete except for Goods in transit to such
locations and Inventory on lease or consignment; and all fixtures or Goods about
to become fixtures which forms part of the Collateral will be situate at one of
such locations.

     

     

    5.           AGREEMENTS
OF THE DEBTOR

     

     

    5.1           General Agreements - The
Debtor agrees that:

     

     

    (a)           it
shall pay or satisfy all Debtor Obligations upon demand and when due, as
applicable;

     

     

    (b)           it
shall carry on and conduct its business in a proper and efficient manner and so
as to protect and preserve the Collateral and shall keep, in accordance with
generally accepted accounting principles, consistently applied, proper books of
account for its business and accurate and complete records concerning the
Collateral, and shall mark any and all such records and the Collateral at the
Secured Party's request so as to indicate the existence of the Security
Interest;

     

     

    (c)           it
shall keep the Collateral in good order and repair and shall not use the
Collateral in violation of the provisions of this Agreement or any other
agreement between the Debtor and the Secured Party relating to the Collateral or
any policy insuring the Collateral or any applicable statute, law, by-law, rule,
regulation or ordinance;

     

     

    (d)           it
shall not locate any of the Collateral at any location not set out in Schedule
"B" without the Secured Party's prior written consent;

     

     

    (e)           it
shall prevent any of the Collateral, except Inventory sold or leased as
permitted hereby, from being or becoming an Accession to property not covered by
this Agreement;

     

     

    (f)           it
shall pay all taxes, rates, levies, assessments and other charges of every kind
which may be lawfully levied, assessed or imposed against or in respect of it or
the Collateral as and when the same become due and payable;

     

     

    (g)           it
shall insure the Collateral for such periods, in such amounts, on such terms and
against loss or damage by fire and such other risks as the Secured Party shall
reasonably direct, with loss payable to the Secured Party, and shall pay all
premiums therefor;

     

    (h)           it
shall notify the Secured Party promptly of:

     

    (1)           any
change in the information contained in this Agreement or in any schedules hereto
relating to it, its business or the Collateral;

     

    (2)           the
details of any significant acquisition of the Collateral;

     

    (3)           the
details of any claims or litigation affecting it or the Collateral;

     

    (4)           any
loss of or damage to the Collateral;

     

    (5)           any
default by any Person in payment or other performance of its obligations with
respect to the Collateral; and

     

    (6)           the
return to or repossession by it of the Collateral;

     

    (i)           it
shall deliver to the Secured Party from time to time promptly upon
request:

     

    (1)           any
Documents of Title, Instruments, Securities and Chattel Paper
constituting, representing or relating to the Collateral;

     

    (2)           all
statements of accounts, bills, invoices and books of account relating to
Accounts and all records, ledgers, reports, correspondence, schedules,
documents, statements, lists and other writings relating to the Collateral for
the purpose of inspecting, auditing or copying the same;

     

    (3)           all
financial statements prepared by or for it regarding its business;

     

    (4)           all
policies and certificates of insurance relating to the Collateral;
and

     

    (5)           such
information concerning the Collateral, the Debtor and its business and affairs
as the Secured Party may reasonably request;

     

     

    (j)           it
shall not change its name without giving prior written notice to the Secured
Party of the new name and the date upon which such change of name is to take
effect; and

     

     

    (k)           it
shall, at its own expense, do, execute, acknowledge and deliver such financing
statements and further assignments, transfers, documents, acts, matters and
things (including further schedules to this Agreement) as may be reasonably
requested by the Secured Party or with respect to the Collateral in order to
give effect to this Agreement.

     

     

    5.2           Restrictions on Dealings with the
Collateral - Except as provided in Section 5.3, the Debtor agrees that it
shall not, without the prior consent in writing of the Secured
Party:

     

     

    (a)           sell,
assign, transfer, exchange, lease, consign or otherwise dispose of any of the
Collateral;

     

     

    (b)           move
or transfer the Collateral from its present location; or

     

     

    (c)           create,
assume or suffer to exist any Lien upon the Collateral ranking or purporting to
rank in priority to or pari
passu with the Security Interest.

     

     

    5.3           Permitted Dealings with the
Collateral - The Debtor may at any time, without the consent of the
Secured Party:

     

     

    (a)           sell,
assign, transfer, exchange, lease, consign or otherwise dispose of Inventory in
the ordinary course of its business; and

     

     

    (b)           sell
or otherwise dispose of such part of its Equipment which is no longer necessary
or useful in connection with its business or which has become worn out or
obsolete or unsuitable for the purpose for which it was intended.

     

     

    6.
SECURITIES

     

     

    6.1           Securities

     

     

    (a)           If
the Collateral at any time includes Securities, the Debtor authorizes the
Secured Party to transfer the same or any part thereof into its own name or that
of its nominee so that the Secured Party or its nominee may appear as the sole
owner of record thereof; provided that, until the occurrence of an Event of
Default, the Secured Party shall deliver promptly to the Debtor all notices or
other communications received by the Secured Party or its nominee as such
registered owner.

     

     

    (b)           The
Secured Party may, but shall not be obligated to, vote and exercise all rights
of conversion or retraction or other similar rights with respect to any
Securities constituting the Collateral and the Secured Party shall be entitled
to receive all dividends (whether paid or distributed in cash, securities or
other property) and interest declared and paid or distributed in respect of
Securities constituting the Collateral.

     

     

    (c)           The
Debtor recognizes that the Secured Party may be unable to effect a public sale
of any or all of the Securities constituting the Collateral by reason of certain
prohibitions contained in applicable securities laws or otherwise, and
accordingly, may be compelled to resort to one or more private sales thereof to
a restricted group of purchasers who will be obliged to agree, among other
things, to acquire such Securities for their own account for investment and not
with a view to the distribution or resale thereof.  The Debtor
acknowledges and agrees that any such private sale may result in prices and
other terms less favourable than if such sale were a public sale, and
notwithstanding such circumstances, agrees that any such private sale shall not
be deemed to have been made in a commercially unreasonable manner solely by
reason of its being a private sale.  The Secured Party shall be under
no obligation to delay a sale of any Securities constituting the Collateral for
the period of time necessary to permit the issuer of such securities to register
such securities for public sale under applicable securities laws, or otherwise,
even if the issuer would agree to do so.

     

     

    7.           COLLECTION
OF DEBTS

     

     

    7.1           Collection of Debts - Before
or after the occurrence of an Event of Default, the Secured Party may give
notice of the Security Interest to any Person obligated to pay any debt or
liability constituting the Collateral and may also direct such Person to make
all payments on account of any such debt or liability to the Secured
Party.  The Debtor acknowledges that any payments received by the
Debtor from such Persons, whether before or after the occurrence of an Event of
Default, shall be received and held by the Debtor in trust for the Secured Party
and shall be turned over to the Secured Party upon request.

     

     

    8.           EVENTS
OF DEFAULT

     

     

    8.1           Events of Default - The
occurrence of any of the following events (an “Event of Default”) shall
constitute an event of default:

     

     

    (a)           default
by the Debtor in payment when due of any of the Debtor Obligations which require
the payment of money to the Secured Party;

     

     

    (b)           default
by the Debtor in the performance or observance of any covenant, condition or
obligation contained in this Agreement or any other agreement to which it and
the Secured Party are party that does not require the payment of money by the
Debtor to the Secured Party unless such default is remedied within five (5)
Business Days after notice thereof by the Secured Party to the
Debtor;

     

     

    (c)           any
representation or warranty made by the Debtor herein or in any officers'
certificate or other document delivered to the Secured Party pursuant hereto or
in connection with any agreement to which the Secured Party and the Debtor are
party is found to be false or incorrect in any way so as to make it misleading
when made or deemed to have been made;

     

     

    (d)           default
by the Debtor in the performance or observance of any covenant, condition or
obligation contained in any agreement between the Debtor and any Person, where
such default gives rise to a right to enforce security against the
Debtor;

     

     

    (e)           the
Debtor fails to pay to any Person any material indebtedness (other than the
Debtor Obligations) when due (whether at scheduled maturity or by required
prepayment, acceleration, demand or otherwise) and such failure continues after
any applicable grace period;

     

     

    (f)           the
Debtor admits its inability to pay its debts generally as they become due or
otherwise acknowledges its insolvency;

     

     

    (g)           the
Debtor institutes any proceeding or takes any corporate action or executes
anyagreement to authorize its participation in or commencement of any
proceeding:

     

     

    (1)           seeking
to adjudicate it a bankrupt or insolvent; or

     

     

    (2)           seeking
liquidation, dissolution, winding up, reorganization, arrangement, protection,
relief or composition of it or any of its property or debt or making a proposal
with respect to it under any law relating to bankruptcy, insolvency,
reorganization or compromise of debts or other similar laws (including, without
limitation, any application under the Companies' Creditors Arrangement Act
(Canada) or any reorganization, arrangement or compromise of debt under
the laws of its jurisdiction of incorporation);

     

     

    (h)           any
proceeding is commenced against or affecting the Debtor:

     

     

    (1)           seeking
to adjudicate it a bankrupt or insolvent, which is not being defended in good
faith;

     

     

    (2)           seeking
liquidation, dissolution, winding up, reorganization, arrangement, protection,
relief or composition of it or any of its property or debt or making a proposal
with respect to it under any law relating to bankruptcy, insolvency,
reorganization or compromise of debts or other similar laws (including, without
limitation, any reorganization, arrangement or compromise of debt under the laws
of its jurisdiction of incorporation); or

     

     

    (3) seeking appointment of a Receiver,
trustee, agent, custodian or other similar official for it or for any
substantial part of its properties and assets, including the Collateral or any
part thereof;

     

     

    (i)           any
creditor of the Debtor, or any other Person, shall privately appoint a
Receiver, trustee or similar official for any part of the properties and
assets of the Debtor including the Collateral or any part thereof;

     

     

    (j)           if
any execution, distress or other enforcement process, whether by court order or
otherwise, becomes enforceable against any property of the Debtor;

     

     

    (k)           if
any event or proceeding is taken with respect to any part of the Collateral in
any jurisdiction outside Canada which has an effect equivalent or similar to any
of theevents described in Sections 8.1(g), 8.1(h), 8.1(i), 8.1(j);

     

     

    (l)           if,
in the opinion of the Secured Party, acting in good faith, any of the security
held by the Secured Party is in jeopardy, or, if any material adverse change
occurs in the financial condition or prospects of the Debtor which, in the
opinion of the Secured Party, acting in good faith, is likely to impair the
ability of the Debtor to repay the Debtor Obligations;

     

     

    (m)           the
Debtor ceases or threatens to cease to carry on business in the ordinary course,
except where such cessation occurs in connection with an amalgamation, transfer
of assets or other reorganization which is effected in accordance with the
provisions hereof; or

     

     

    (n)           the
Secured Party in good faith believes and has commercially reasonable grounds to
believe that the prospect of payment or performance of the Debtor Obligations is
or is about to be impaired or that the Collateral is or is about to be placed in
jeopardy.

     

     

    9.           REMEDIES

     

     

    9.1           Appointment of Receiver
–

     

     

    (a)           Upon
the occurrence of an Event of Default, the Secured Party may appoint by
instrument any Person, whether an officer or an employee of the Secured Party or
not, to be a Receiver of the Collateral and may remove any Receiver so appointed
and appoint another in place of such Receiver in the same manner.  Any
such Receiver shall be deemed the agent of the Debtor and not of the Secured
Party for the purpose of (i) carrying on and managing the business and affairs
of the Debtor, and(ii) establishing liability for all acts or omissions of the
Receiver while acting as such, and the Secured Party shall not be in any way
responsible for any acts or omissions on the part of any such Receiver, its
officers, employees and agents.  The Debtor hereby irrevocably
authorizes the Secured Party to give instructions to the Receiver relating to
the performance of its duties.  The Debtor hereby irrevocably waives
any right it may have now or in the future under any applicable law, including,
without limitation, the PPSA, to make application to a court for the removal,
replacement or discharge of the Receiver or for directions on any matter
relating to the duties of the Receiver (unless such duties are not being
performed in a commercially reasonable manner) or in respect of the Receiver's
accounts or remuneration or in respect of any other matter.

     

     

    (b)           Subject
to the provisions of the instrument appointing it, any such Receiver shall have
the power to take possession of the Collateral, to preserve the Collateral or
its value in such manner as it considers appropriate, to carry on or concur in
carrying on all or any part of the business of the Debtor and to sell, lease or
otherwise dispose of or concur in selling, leasing or otherwise disposing of the
Collateral in such manner and on such terms as it considers to be commercially
reasonable. To facilitate the foregoing powers, any such Receiver may enter
upon, use and occupy all premises owned or occupied by the Debtor wherein the
Collateral may be situate to the exclusion of all others to the extent permitted
by law, including the Debtor, maintain the Collateral upon such premises, borrow
money on a secured or unsecured basis, incur reasonable expenses in exercise of
the rights, powers and remedies set out in this Agreement and use the Collateral
directly in carrying on the Debtor's business or as security for loans or
advances to enable it to carry on the Debtor's business or otherwise, as such
Receiver shall, in its discretion, determine. In addition, the Receiver shall
have the following rights, powers and remedies:

     

     

    (1)           to
make payments to Persons having prior rights or Liens on properties on which the
Debtor may hold a Lien and to Persons having prior rights or Liens on the
Collateral; and

     

     

    (2)           to
demand, commence, continue or defend proceedings in the name of the Secured
Party or of the Receiver or in the name of the Debtor for the purpose of
protecting, seizing, collecting, realizing or obtaining possession or payment of
the Collateral and to give effectual receipts and discharges
therefor.

     

     

    (c)           Except
as may be otherwise directed by the Secured Party, all Proceeds received from
time to time by such Receiver in carrying out its appointment shall be received
in trust for and paid over to the Secured Party. Every such Receiver may, in the
discretion of the Secured Party, be vested with all or any of the rights and
powers of the Secured Party.

     

     

    9.2           Exercise of Remedies by the Secured
Party - Upon the occurrence of an Event of Default, the Secured Party
may, either directly or through its agents or nominees, exercise all the powers
and rights available to a Receiver by virtue of Section 9.1.  In
addition to the rights granted in this Agreement and in any other agreement now
or hereafter in effect between the Debtor and the Secured Party and in addition
to any other rights the Secured Party may have at law or in equity or otherwise,
the Secured Party shall have, both before and after the occurrence of an Event
of Default, all rights and remedies of a secured party under the
PPSA.

     

     

    9.3           Possession of the Collateral -
The Debtor acknowledges that the Secured Party or any Receiver appointed by it
may take possession of the Collateral wherever it may be located and by any
method permitted by law and the Debtor agrees upon request from the Secured
Party or any such Receiver to assemble and deliver possession of the Collateral
at such place or places as directed.

     

     

    9.4           Remedies Not Exclusive - All
rights, powers and remedies of the Secured Party under this Agreement may be
exercised separately or in combination and shall be in addition to, and not in
substitution for, any other security now or hereafter held by the Secured Party
and any other rights, powers and remedies of the Secured Party however created
or arising.  No single or partial exercise by the Secured Party or any
of the rights, powers and remedies under this Agreement or under any other
security now or hereafter held by the Secured Party shall preclude any other and
further exercise of any other right, power or remedy pursuant to this Agreement
or any other security or at law, in equity or otherwise.  The Secured
Party shall at all times have the right to proceed against the Collateral or any
other security in such order and in such manner as it shall determine without
waiving any rights, powers or remedies which the Secured Party may have with
respect to this Agreement or any other security or at law, in equity or
otherwise. No delay or omission by the Secured Party in exercising any right,
power or remedy hereunder or otherwise shall operate as a waiver thereof or of
any other right, power or remedy.

     

     

    9.5           Debtor Liable for Deficiency -
The Debtor shall remain liable to the Secured Party for any deficiency after the
Proceeds of any sale, lease or disposition of the Collateral are received by the
Secured Party.

     

     

    9.6           Exclusion of Liability of Secured
Party and Receiver - The Secured Party shall not, nor shall any Receiver
appointed by it, be liable for any failure to exercise its rights, powers or
remedies arising hereunder or otherwise, including without limitation any
failure to take possession of, collect, enforce, realize, sell, lease or
otherwise dispose of, preserve or protect the Collateral, to carry on all or any
part of the business of the Debtor relating to the Collateral or to take any
steps or proceedings for any such purposes.  Neither the Secured Party
nor any Receiver appointed by it shall have any obligation to take any steps or
proceedings to preserve rights against prior parties to or in respect of the
Collateral including without limitation any Instrument, Chattel Paper or
Securities, whether or not in the Secured Party's or the Receiver's possession,
and neither the Secured Party nor any Receiver appointed by it shall be liable
for failure to do so.  Subject to the foregoing, the Secured Party
shall use reasonable care in the custody and preservation of the Collateral in
its possession.

     

     

    9.7           Notice of Sale - Unless
required by law, neither the Secured Party nor any Receiver appointed by it
shall be required to give the Debtor any notice of any sale, lease or other
disposition of the Collateral, the date, time and place of any public sale of
the Collateral or the date after which any private disposition of the Collateral
is to be made.

     

     

    10.           APPLICATION
OF PROCEEDS

     

     

    10.1           Application of Proceeds - The
Proceeds arising from the enforcement of the Security Interest as a result of
the possession by the Secured Party or the Receiver of the Collateral or from
any sale, lease or other disposition of, or realization of security on, the
Collateral (except following acceptance of the Collateral in satisfaction of the
Debtor Obligations) shall be applied by the Secured Party or the Receiver in the
following order, except to the extent otherwise required by law:

     

     

    (a)           first,
in payment of the Secured Party's reasonable costs, charges and expenses
(including legal fees on a solicitor and his own client basis) incurred in the
exercise of all or any of the rights, powers or remedies granted to it under
this Agreement, and in payment of the reasonable remuneration of the Receiver,
if any, and the reasonable costs, charges and expenses incurred by the Receiver,
if any, in the exercise of all or any of the rights, powers or remedies granted
under this Agreement;

     

     

    (b)           second,
in payment of amounts paid by the Secured Party or the Receiver pursuant to
Clause 9.1(a);

     

     

    (c)           third,
in payment of all money borrowed or advanced by the Secured Party or the
Receiver, if any, pursuant to the exercise of the rights, powers or remedies set
out in this Agreement and any interest thereon;

     

     

    (d)           fourth,
in payment of the remainder of the Debtor Obligations in such order of
application as the Secured Party may determine;

     

     

    (e)           fifth,
subject to Sections 10.2 and 10.3, to any Person who has a security interest in
the Collateral that is subordinate to that of the Secured Party and whose
interest:

     

     

    (1)           was
perfected by possession, the continuance of which was prevented by the Secured
Party or the Receiver taking possession of the Collateral, or

     

     

    (2)           was,
immediately before the sale, lease or other disposition by the Secured Party or
the Receiver, perfected by registration;

     

     

    (f)           sixth,
subject to Sections 10.2 and 10.3, to any other Person with an interest in such
Proceeds who has delivered a written notice to the Secured Party or the Receiver
of the interest before the distribution of such Proceeds; and

     

     

    (g)           last,
subject to Sections 10.2 and 10.3, to the Debtor or any other Person who is
known by the Secured Party or the Receiver to be an owner of the
Collateral.

     

     

    10.2           Proof of Interest - Subject to
applicable laws, the Secured Party or the Receiver may require any Person
mentioned in Clauses 10.1(e), 10.1(f) or 10.1(g) to furnish proof of that
Person's interest, and unless the proof is furnished within ten (10) days after
demand by the Secured Party or the Receiver, the Secured Party or the Receiver
need not pay over any portion of the Proceeds referred to therein to such
Person.

     

     

    10.3           Payment Into Court - Where
there is a question as to who is entitled to receive payment under Clauses
10.1(e), 10.1(f), or 10.1(g), the Secured Party or the Receiver may pay the
Proceeds referred to therein into court.

     

     

    10.4           Monies Actually Received - The
Debtor shall be entitled to be credited only with the actual Proceeds arising
from the possession, sale, lease or other disposition of, or realization of
security on, the Collateral when received by the Secured Party or the Receiver
and such actual Proceeds shall mean all amounts received in cash by the Secured
Party or the Receiver upon such possession, sale, lease or other disposition of,
or realization of security on, the Collateral.

     

     

    11.           GENERAL

     

     

    11.1           Power of Attorney - The Debtor
hereby appoints the Secured Party as the Debtor's attorney, with full power of
substitution, in the name and on behalf of the Debtor, to execute, deliver and
do all such acts, deeds, leases, documents, transfers, demands, conveyances,
assignments, contracts, assurances, consents, financing statements and things as
the Debtor has herein agreed to execute, deliver or do or as may be required by
the Secured Party or any Receiver to give effect to this Agreement or in the
exercise of any rights, powers or remedies hereby conferred on the Secured
Party, and generally to use the name of the Debtor in the exercise of all or any
of the rights, powers or remedies hereby conferred on the Secured
Party.  This appointment, coupled with an interest, shall not be
revoked by the insolvency, bankruptcy, dissolution, liquidation or other
termination of the existence of the Debtor or for any other reason.

     

     

    11.2           Set-Off - The Secured Party
may at any time and from time to time, without notice to the Debtor or to any
other Person, set-off, appropriate and apply any and all deposits, general or
special, matured or unmatured, held by or for the benefit of the Debtor with the
Secured Party, and any other indebtedness and liability of the Secured Party to
the Debtor, matured or unmatured, against and on account of the Debtor
Obligations when due, in such order of application as the Secured Party may from
time to time determine.

     

     

    11.3           Dealings with Others - The
Secured Party may grant extensions of time and other indulgences, take and give
up security, accept compositions, make settlements, grant releases and
discharges and otherwise deal with the Debtor, debtors of the Debtor, sureties
and other Persons and with the Collateral and other security as the Secured
Party sees fit, without prejudice to the liability of the Debtor to the Secured
Party or the rights, powers and remedies of the Secured Party under this
Agreement.

     

     

    11.4           No Obligation to Advance -
Nothing herein contained shall in any way obligate the Secured Party to advance
any funds, or otherwise make or continue to make any credit available, to the
Debtor.

     

     

    11.5           Perfection of Security - The
Debtor authorizes the Secured Party to file such financing statements and other
documents and do such acts, matters and things as the Secured Party may consider
appropriate to perfect and continue the Security Interest, to protect and
preserve the interest of the Secured Party in the Collateral and to realize upon
the Security Interest.

     

     

    11.6           Communication - (a) Any notice
required by law or this Agreement to be served upon either of the parties to
this Agreement shall be sufficiently served if given personally or if sent by
telex or fax (where the intended recipient is equipped to receive such a form of
telecommunication) or by prepaid courier or registered mail (provided no general
discontinuance of postal service due to strike, lockout or otherwise,
exists);

     

     

    
      	
               (i)
      in the case of
      the Secured Party:

            	
              (ii)
      in the case of
      the Debtor:

            

    

     

    
      	
              Global
      Entertainment Holdings, Inc.

            	
              B
      & J Pictures Inc. and

            

    

    
      	
              650
      N. Bronson Avenue, Suite B-116

            	
              11
      Pine Court

            

    

    
      	
              Los
      Angeles, California  90004 USA

            	
              Maugerville,
      New Brusnwick E3A 8M8

            

    

    
      	
              Attention:
      Gary Rasmussen, CEO

            	
              Attention:
      Jacqueline Giroux, President

            

    

     

    
      	
               
      

            	
              AND

            

    

     

    
      	
               
      

            	
              Global
      Universal Pictures, Inc.

            

    

    
      	
               
      

            	
              11
      Pine Court

            

    

    
      	
               
      

            	
              Maugerville,
      New Brunswick E3A 8M8

            

    

    
      	
               
      

            	
              Attention:
      Jacqueline Giroux, President

            

    

     

    and,
either party may by notice given in accordance with this Section change its
address for the purposes of this Agreement.

     

     

    (b) Any
notice shall be deemed (in the absence of evidence of prior receipt) to have
been received by the intended recipient the same day if personally served, the
next Business Day if sent by telex or fax, and on the third Business Day next
following where sent by prepaid courier or by registered mail.

     

     

    11.7           Successors and Assigns - This
Agreement shall be binding on the Debtor and its successors and shall enure to
the benefit of the Secured Party and its successors and assigns.  This
Agreement shall be assignable by the Secured Party free of any set-off,
counterclaim or equities between the Debtor and the Secured Party, and the
Debtor shall not assert against any assignee of the Secured Party any claim or
defense that the Debtor has against the Secured Party.

     

     

    11.8           Copy Received - The Debtor
hereby acknowledges receipt of a copy of this Agreement and waives receipt of a
copy of any financing statement or any renewal thereof or related verification
statement registered under the PPSA in respect of the Security
Interest.

     

     

    IN WITNESS WHEREOF, the Debtor
has properly executed this Agreement as of the date first above
written.

     

     

    B
& J PICTURES INC.

     

    Per:

    

    ________________________________________

    Jacqueline
(Jackie) Giroux

    Its:           President

    

    
 

    GLOBAL UNIVERSAL PICTURES,
INC.,

    Per:

    

    ________________________________________

    Jacqueline
(Jackie) Giroux

    Its:           President

    

    

    ACKNOWLEDGED:

    

    Global
Entertainment Holdings, Inc.

    Per:

    

    

    ______________________________________

    Gary
Rasmussen

    Its:  Chief
Executive Officer

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SCHEDULE
"A"

     

    Collateral Mentioned in
Clause 2.1(a)

     

     

    The
Collateral includes, without limitation, the following additional property of
the Debtor:

     

     

    All of
the Debtor’s right, title and interest in and to the motion picture presently
entitled “Blue
Seduction” aka “Symphony” and “Unwound” (the “Film”), including all
copyright and ancillary rights, distribution rights, claims, revenues and tax
credit refunds therein and all proceeds from the exploitation
thereof.

     

     

    Any and
all amounts owing as tax credit refunds to the Debtor in connection with the
Film pursuant to the Income
Tax Act (Canada) and pursuant to the Income Tax Act (New
Brunswick) by the appropriate federal and provincial governmental
authorities.

     

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    SCHEDULE
"B"

     

    Location of Business
Operations and Records

     

     

    1.           Locations of Debtor's business
operations and Collateral:

     

     

    11 Pine
Court, Maugerville, New Brunswick, E3A 8M8, or at any locations accepted by the
Secured Party in writing.

     

     

    2.           Locations
of records relating to the Collateral:

     

     

    11 Pine
Court, Maugerville, New Brunswick, E3A 8M8, or at any locations accepted by the
Secured Party in writing

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