Document:

Unassociated Document

    Exhibit
      10.53

     

     

    FUNDS
      ESCROW AGREEMENT

     

     

    This
      Agreement is dated as of the 30th
      day of
      November, 2006 among Diamond Entertainment Corporation, a New Jersey corporation
      (the "Company"), the parties identified on Schedule A hereto (each
      a
“Subscriber”, and collectively “Subscribers”), and
      Grushko & Mittman, P.C. (the "Escrow Agent"):

     

    W I T N E S S E T H:

     

    WHEREAS,
      the Company and Subscribers have entered into Subscription Agreements calling
      for the sale by the Company to the Subscribers of secured Promissory Notes
      and
      Warrants for an aggregate purchase price of up to $2,300,000; and

     

    WHEREAS,
      the parties hereto require the Company to deliver the Notes and Warrants against
      payment therefor, with such Notes, Warrants and the Escrowed Funds to be
      delivered to the Escrow Agent to be held in escrow and released by the Escrow
      Agent in accordance with the terms and conditions of this Agreement;
      and

     

    WHEREAS,
      the Escrow Agent is willing to serve as escrow agent pursuant to the terms
      and
      conditions of this Agreement;

     

    NOW
      THEREFORE, the parties agree as follows:

     

    ARTICLE
      I

     

    INTERPRETATION

     

    1.1. Definitions.
      Capitalized terms used and not otherwise defined herein that are defined in
      the
      Subscription Agreement shall have the meanings given to such terms in the
      Subscription Agreement. Whenever used in this Agreement, the following terms
      shall have the following respective meanings:

     

    § "Agreement"
      means this Agreement and all amendments made hereto and thereto by written
      agreement between the parties;

     

    § “Collateral
      Agent Agreement” shall have the meaning set forth in Section 3 of the
      Subscription Agreement;

     

    § “Due
      Diligence Fee” shall have the meaning set forth in Section 8 of the Subscription
      Agreement;

     

    § “Due
      Diligence Fee Recipient” shall have the meaning set forth in Section 8 of the
      Subscription Agreement;

     

    § "Escrowed
      Payment" means an aggregate cash payment of up to $2,300,000 which is,
      collectively, the Initial Closing Purchase Price and Second Closing Purchase
      Price;

     

    § “Guaranty”
      shall have the meaning set forth in Section 3 of the Subscription
      Agreement;

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    § “Initial
      Closing Date” shall have the meaning set forth in Section 1(b) of the
      Subscription Agreement;

     

    § “Initial
      Closing Legal Opinion” means the original signed legal opinion referred to in
      Section 6 of the Subscription Agreement;

     

    § “Initial
      Closing Notes” shall have the meaning set forth in Section 1(b) of the
      Subscription Agreement;

     

    § “Initial
      Closing Purchase Price” shall mean up to $1,150,000;

     

    § “Initial
      Closing Warrants” shall have the meaning set forth in Section 1(b) of the
      Subscription Agreement;

     

    § “Legal
      Fees” shall have the meaning set forth in Section 9 of the Subscription
      Agreement; 

     

    § “Second
      Closing Certificate” shall have the meaning set forth in Section 1(e) of the
      Subscription Agreement;

     

    § “Second
      Closing Date” shall have the meaning set forth in Section 1(c) of the
      Subscription Agreement;

     

    § “Second
      Closing Legal Opinion” shall have the meaning set forth in Section 1(e) of the
      Subscription Agreement;

     

    § “Second
      Closing Notes” shall have the meaning set forth in Section 1(c) of the
      Subscription Agreement;

     

    § “Second
      Closing Purchase Price” shall mean up to $1,150,000;

     

    § “Security
      Agreement” shall have the meaning set forth in Section 3 of the Subscription
      Agreement and shall refer to the Security Agreements to be executed by the
      Company and include the certificates evidencing ownership of the Subsidiaries
      as
      described on Annex 1 to the Security Agreement;

     

    § “Subscription
      Agreement" means the Subscription Agreement (and the exhibits thereto) entered
      into or to be entered into by the parties in reference to the sale and purchase
      of the Initial Closing Notes, Second Closing Notes, and Warrants;

     

    § “Warrants”
      ” shall have the meaning set forth in the recitals of the Subscription
      Agreement;

     

    § Collectively,
      the executed Subscription Agreement, Initial Closing Notes, Initial Closing
      Warrants, Initial Closing Legal Opinion, Second Closing Notes, Second Closing
      Legal Opinion, Second Closing Certificates, Security Agreement, Guaranty,
      Collateral Agent Agreement, and Due Diligence Fee are referred to as "Company
      Documents"; and

     

    § Collectively,
      the Escrowed Payment and the executed Subscription Agreement are referred to
      as
      "Subscriber Documents".

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    1.2. Entire
      Agreement.
      This
      Agreement along with the Company Documents and the Subscriber Documents
      constitute the entire agreement between the parties hereto pertaining to the
      Company Documents and Subscriber Documents and supersede all prior agreements,
      understandings, negotiations and discussions, whether oral or written, of the
      parties. There are no warranties, representations and other agreements made
      by
      the parties in connection with the subject matter hereof except as specifically
      set forth in this Agreement, the Company Documents and the Subscriber
      Documents.

     

    1.3. Extended
      Meanings.
      In this
      Agreement words importing the singular number include the plural and vice versa;
      words importing the masculine gender include the feminine and neuter genders.
      The word "person" includes an individual, body corporate, partnership, trustee
      or trust or unincorporated association, executor, administrator or legal
      representative.

     

    1.4. Waivers
      and Amendments.
      This
      Agreement may be amended, modified, superseded, cancelled, renewed or extended,
      and the terms and conditions hereof may be waived, only by a written instrument
      signed by all parties, or, in the case of a waiver, by the party waiving
      compliance. Except as expressly stated herein, no delay on the part of any
      party
      in exercising any right, power or privilege hereunder shall operate as a waiver
      thereof, nor shall any waiver on the part of any party of any right, power
      or
      privilege hereunder preclude any other or future exercise of any other right,
      power or privilege hereunder.

     

    1.5. Headings.
      The
      division of this Agreement into articles, sections, subsections and paragraphs
      and the insertion of headings are for convenience of reference only and shall
      not affect the construction or interpretation of this Agreement.

     

    1.6. Law
      Governing this Agreement.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York without regard to principles of conflicts of laws. Any action
      brought by either party against the other concerning the transactions
      contemplated by this Agreement shall be brought only in the state courts of
      New
      York or in the federal courts located in the state of New York. Both parties
      and
      the individuals executing this Agreement and other agreements on behalf of
      the
      Company agree to submit to the jurisdiction of such courts and waive trial
      by
      jury. The prevailing party (which shall be the party which receives an award
      most closely resembling the remedy or action sought) shall be entitled to
      recover from the other party its reasonable attorney's fees and costs. In the
      event that any provision of this Agreement or any other agreement delivered
      in
      connection herewith 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 such provision which may prove invalid or
      unenforceable under any law shall not affect the validity or enforceability
      of
      any other provision of any agreement.

     

    1.7. Specific
      Enforcement, Consent to Jurisdiction.
      The
      Company and Subscriber acknowledge and agree that irreparable damage would
      occur
      in the event that any of the provisions of this Agreement were not performed
      in
      accordance with their specific terms or were otherwise breached. It is
      accordingly agreed that the parties shall be entitled to an injuction or
      injunctions to prevent or cure breaches of the provisions of this Agreement
      and
      to enforce specifically the terms and provisions hereof or thereof, this being
      in addition to any other remedy to which any of them may be entitled by law
      or
      equity. Subject to Section 1.6 hereof, each of the Company and Subscriber hereby
      waives, and agrees not to assert in any such suit, action or proceeding, any
      claim that it is not personally subject to the jurisdiction of such court,
      that
      the suit, action or proceeding is brought in an inconvenient forum or that
      the
      venue of the suit, action or proceeding is improper. Nothing in this Section
      shall affect or limit any right to serve process in any other manner permitted
      by law.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    ARTICLE
      II

     

    DELIVERIES
      TO THE ESCROW AGENT

     

    2.1. Initial
      Closing Company Deliveries.
      On or
      about the date hereof, the Company shall deliver to the Escrow Agent the
      executed Subscription Agreement, the Initial Closing Notes, Initial Closing
      Warrants, and Due Diligence Fee, Initial Closing Legal Opinion, Security
      Agreement, Guaranty and Collateral Agent Agreement (collectively, the “Initial
      Closing Company Documents”).

     

    2.2. Second
      Closing Company Deliveries.
      On or
      prior to the Second Closing Date the Company will deliver to the Escrow Agent
      the Second Closing Notes, Second Closing Certificate, and Second Closing Legal
      Opinion (collectively, the “Second Closing Company Documents”).

     

    2.3. Subscriber
      Deliveries.
      On or
      before the Initial Closing Date, each Subscriber shall deliver to the Escrow
      Agent such Subscriber’s portion of the Initial Closing Purchase Price and the
      executed Subscription Agreement. On or before the Second Closing Date, each
      Subscriber will deliver such Subscriber’s portion of the Second Closing Purchase
      Price to the Escrow Agent. The Escrowed Payment will be delivered pursuant
      to
      the following wire transfer instructions:

     

    Citibank,
      N.A.

    1155
      6th
      Avenue

    New
      York,
      NY 10036, USA

    ABA
      Number: 0210-00089

    For
      Credit to: Grushko & Mittman, IOLA Trust Account

    Account
      Number: 45208884

     

    2.4. Intention
      to Create Escrow Over Company Documents and Subscriber Documents.
      The
      Subscriber and Company intend that the Company Documents and Subscriber
      Documents shall be held in escrow by the Escrow Agent pursuant to this Agreement
      for their benefit as set forth herein.

     

    2.5. Escrow
      Agent to Deliver Company Documents and Subscriber Documents.
      The
      Escrow Agent shall hold and release the Company Documents and Subscriber
      Documents only in accordance with the terms and conditions of this
      Agreement.

     

     

    ARTICLE
      III

     

    RELEASE
      OF COMPANY DOCUMENTS AND SUBSCRIBER DOCUMENTS

     

    3.1. Release
      of Escrow.
      Subject
      to the provisions of Section 4.2, the Escrow Agent shall release the Company
      Documents and Subscriber Documents as follows:

     

    (a) On
      the
      Initial Closing Date, the Escrow Agent will simultaneously release the Initial
      Closing Company Documents to the Subscriber and release the Subscription
      Agreement and the Initial Closing Purchase Price to the Company except that
      (i)
      the Due Diligence Fee in connection with the Initial Closing will be released
      to
      the Due Diligence Fee Recipient identified in Section 8 to the Subscription
      Agreement; (ii) the Legal Fees (less any amounts paid prior to the Initial
      Closing Date) in connection with the Initial Closing will be released to the
      Subscriber’s attorneys; and (iii) the original Security Agreement, Guaranty and
      Collateral Agent Agreement will be released to the Collateral
      Agent.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (b) On
      the
      Second Closing Date, the Escrow Agent will simultaneously release the Second
      Closing Company Documents to the Subscriber and release the Second Closing
      Purchase Price to the Company.

     

    (c) All
      funds
      to be delivered to the Company shall be delivered pursuant to the wire
      instructions to be provided in writing by the Company to the Escrow Agent.
      

     

    (d) Notwithstanding
      the above, upon receipt by the Escrow Agent of joint written instructions
      ("Joint Instructions") signed by the Company and the Subscriber, it shall
      deliver the Company Documents and Subscriber Documents in accordance with the
      terms of the Joint Instructions.

     

    (e) Notwithstanding
      the above, upon receipt by the Escrow Agent of a final and non-appealable
      judgment, order, decree or award of a court of competent jurisdiction (a "Court
      Order"), the Escrow Agent shall deliver the Company Documents and Subscriber
      Documents in accordance with the Court Order. Any Court Order shall be
      accompanied by an opinion of counsel for the party presenting the Court Order
      to
      the Escrow Agent (which opinion shall be satisfactory to the Escrow Agent)
      to
      the effect that the court issuing the Court Order has competent jurisdiction
      and
      that the Court Order is final and non-appealable.

     

    3.2. Acknowledgement
      of Company and Subscriber; Disputes.
      The
      Company and the Subscriber acknowledge that the only terms and conditions upon
      which the Company Documents and Subscriber Documents are to be released are
      set
      forth in Sections 3 and 4 of this Agreement. The Company and the Subscriber
      reaffirm their agreement to abide by the terms and conditions of this Agreement
      with respect to the release of the Company Documents and Subscriber Documents.
      Any dispute with respect to the release of the Company Documents and Subscriber
      Documents shall be resolved pursuant to Section 4.2 or by agreement between
      the
      Company and Subscriber.

     

     

    ARTICLE
      IV

     

    CONCERNING
      THE ESCROW AGENT

     

    4.1. Duties
      and Responsibilities of the Escrow Agent.
      The
      Escrow Agent's duties and responsibilities shall be subject to the following
      terms and conditions:

     

    (a) The
      Subscriber and Company acknowledge and agree that the Escrow Agent (i) shall
      not
      be responsible for or bound by, and shall not be required to inquire into
      whether either the Subscriber or Company is entitled to receipt of the Company
      Documents and Subscriber Documents pursuant to, any other agreement or
      otherwise; (ii) shall be obligated only for the performance of such duties
      as
      are specifically assumed by the Escrow Agent pursuant to this Agreement; (iii)
      may rely on and shall be protected in acting or refraining from acting upon
      any
      written notice, instruction, instrument, statement, request or document
      furnished to it hereunder and believed by the Escrow Agent in good faith to
      be
      genuine and to have been signed or presented by the proper person or party,
      without being required to determine the authenticity or correctness of any
      fact
      stated therein or the propriety or validity or the service thereof; (iv) may
      assume that any person believed by the Escrow Agent in good faith to be
      authorized to give notice or make any statement or execute any document in
      connection with the provisions hereof is so authorized; (v) shall not be under
      any duty to give the property held by Escrow Agent hereunder any greater degree
      of care than Escrow Agent gives its own similar property; and (vi) may consult
      counsel satisfactory to Escrow Agent, the opinion of such counsel to be full
      and
      complete authorization and protection in respect of any action taken, suffered
      or omitted by Escrow Agent hereunder in good faith and in accordance with the
      opinion of such counsel.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    (b) The
      Subscriber and Company acknowledge that the Escrow Agent is acting solely as
      a
      stakeholder at their request and that the Escrow Agent shall not be liable
      for
      any action taken by Escrow Agent in good faith and believed by Escrow Agent
      to
      be authorized or within the rights or powers conferred upon Escrow Agent by
      this
      Agreement. The Subscriber and Company, jointly and severally, agree to indemnify
      and hold harmless the Escrow Agent and any of Escrow Agent's partners,
      employees, agents and representatives for any action taken or omitted to be
      taken by Escrow Agent or any of them hereunder, including the fees of outside
      counsel and other costs and expenses of defending itself against any claim
      or
      liability under this Agreement, except in the case of gross negligence or
      willful misconduct on Escrow Agent's part committed in its capacity as Escrow
      Agent under this Agreement. The Escrow Agent shall owe a duty only to the
      Subscriber and Company under this Agreement and to no other person.

     

    (c) The
      Subscriber and Company jointly and severally agree to reimburse the Escrow
      Agent
      for outside counsel fees, to the extent authorized hereunder and incurred in
      connection with the performance of its duties and responsibilities
      hereunder.

     

    (d) The
      Escrow Agent may at any time resign as Escrow Agent hereunder by giving five
      (5)
      days prior written notice of resignation to the Subscriber and the Company.
      Prior to the effective date of the resignation as specified in such notice,
      the
      Subscriber and Company will issue to the Escrow Agent a Joint Instruction
      authorizing delivery of the Company Documents and Subscriber Documents to a
      substitute Escrow Agent selected by the Subscriber and Company. If no successor
      Escrow Agent is named by the Subscriber and Company, the Escrow Agent may apply
      to a court of competent jurisdiction in the State of New York for appointment
      of
      a successor Escrow Agent, and to deposit the Company Documents and Subscriber
      Documents with the clerk of any such court.

     

    (e) The
      Escrow Agent does not have and will not have any interest in the Company
      Documents and Subscriber Documents, but is serving only as escrow agent, having
      only possession thereof. The Escrow Agent shall not be liable for any loss
      resulting from the making or retention of any investment in accordance with
      this
      Escrow Agreement.

     

    (f) This
      Agreement sets forth exclusively the duties of the Escrow Agent with respect
      to
      any and all matters pertinent thereto and no implied duties or obligations
      shall
      be read into this Agreement.

     

    (g) The
      Escrow Agent shall be permitted to act as counsel for the Subscriber in any
      dispute as to the disposition of the Company Documents and Subscriber Documents,
      or in any other dispute between the Subscriber and Company, whether or not
      the
      Escrow Agent is then holding the Company Documents and Subscriber Documents
      and
      continues to act as the Escrow Agent hereunder.

     

    (h) The
      provisions of this Section 4.1 shall survive the resignation of the Escrow
      Agent
      or the termination of this Agreement.

     

    4.2. Dispute
      Resolution: Judgments.
      Resolution of disputes arising under this Agreement shall be subject to the
      following terms and conditions:

     

    (a) If
      any
      dispute shall arise with respect to the delivery, ownership, right of possession
      or disposition of the Company Documents and Subscriber Documents, or if the
      Escrow Agent shall in good faith be uncertain as to its duties or rights
      hereunder, the Escrow Agent shall be authorized, without liability to anyone,
      to
      (i) refrain from taking any action other than to continue to hold the Company
      Documents and Subscriber Documents pending receipt of a Joint Instruction from
      the Subscriber and Company, or (ii) deposit the Company Documents and Subscriber
      Documents with any court of competent jurisdiction in the State of New York,
      in
      which event the Escrow Agent shall give written notice thereof to the Subscriber
      and the Company and shall thereupon be relieved and discharged from all further
      obligations pursuant to this Agreement. The Escrow Agent may, but shall be
      under
      no duty to, institute or defend any legal proceedings which relate to the
      Company Documents and Subscriber Documents. The Escrow Agent shall have the
      right to retain counsel if it becomes involved in any disagreement, dispute
      or
      litigation on account of this Agreement or otherwise determines that it is
      necessary to consult counsel.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    (b) The
      Escrow Agent is hereby expressly authorized to comply with and obey any Court
      Order. In case the Escrow Agent obeys or complies with a Court Order, the Escrow
      Agent shall not be liable to the Subscriber and Company or to any other person,
      firm, corporation or entity by reason of such compliance.

     

    ARTICLE
      V

     

    GENERAL
      MATTERS

     

    5.1. Termination.
      This
      escrow shall terminate upon the release of all of the Company Documents and
      Subscriber Documents or at any time upon the agreement in writing of the
      Subscriber and Company.

     

    5.2. Notices.
      All
      notices, demands, requests, consents, approvals, and other communications
      required or permitted hereunder shall be in writing and, unless otherwise
      specified herein, shall be (i) personally served, (ii) deposited in the mail,
      registered or certified, return receipt requested, postage prepaid, (iii)
      delivered by reputable air courier service with charges prepaid, or (iv)
      transmitted by hand delivery, telegram, or facsimile, addressed as set forth
      below or to such other address as such party shall have specified most recently
      by written notice. Any notice or other communication required or permitted
      to be
      given hereunder shall be deemed effective (a) upon hand delivery or delivery
      by
      facsimile, with accurate confirmation generated by the transmitting facsimile
      machine, at the address or number designated below (if delivered on a business
      day during normal business hours where such notice is to be received), or the
      first business day following such delivery (if delivered other than on a
      business day during normal business hours where such notice is to be received)
      or (b) on the second business day following the date of mailing by express
      courier service, fully prepaid, addressed to such address, or upon actual
      receipt of such mailing, whichever shall first occur. The addresses for such
      communications shall be: 

     

    (a) 
If
      to the
      Company, to:

    

    Diamond
      Entertainment Corporation

    800
      Tucker Lane

    Walnut,
      CA 91789

    Fax:
      (909) 869-1990

    

     
      With a copy by telecopier only to:

    

    Owen
      M.
      Naccarato, Esq.

    Naccarato
      & Associates

    18301
      Von
      Karman Avenue, Suite 430

    Irvine,
      CA 92612

    Fax:
      (949) 851-9262

    

     

    (b) 
If
      to the
      Subscriber, to: the addresses and fax numbers listed on Schedule A
      hereto.

    

     

    (c) 
If
      to the
      Escrow Agent, to:

     

    Grushko
      & Mittman, P.C.

    551
      Fifth
      Avenue, Suite 1601

    New
      York,
      New York 10176

    Fax:
      212-697-3575

     

    or
      to
      such other address as any of them shall give to the others by notice made
      pursuant to this Section 5.2.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    5.3. Interest.
      The
      Escrowed Payment shall not be held in an interest bearing account nor will
      interest be payable in connection therewith. In the event the Escrowed Payment
      is deposited in an interest bearing account, the Subscriber shall be entitled
      to
      receive any accrued interest thereon, but only if the Escrow Agent receives
      from
      the Subscriber the Subscriber’s United States taxpayer identification number and
      other requested information and forms.

     

    5.4. Assignment;
      Binding Agreement.
      Neither
      this Agreement nor any right or obligation hereunder shall be assignable by
      any
      party without the prior written consent of the other parties hereto. This
      Agreement shall enure to the benefit of and be binding upon the parties hereto
      and their respective legal representatives, successors and assigns.

     

    5.5. Invalidity.
      In the
      event that any one or more of the provisions contained herein, or the
      application thereof in any circumstance, is held invalid, illegal, or
      unenforceable in any respect for any reason, the validity, legality and
      enforceability of any such provision in every other respect and of the remaining
      provisions contained herein shall not be in any way impaired thereby, it being
      intended that all of the rights and privileges of the parties hereto shall
      be
      enforceable to the fullest extent permitted by law.

     

    5.6. Counterparts/Execution.
      This
      Agreement may be executed in any number of counterparts and by different
      signatories hereto on separate counterparts, each of which, when so executed,
      shall be deemed an original, but all such counterparts shall constitute but
      one
      and the same instrument. This Agreement may be executed by facsimile
      transmission and delivered by facsimile transmission.

     

    5.7. Agreement.
      Each of
      the undersigned states that he has read the foregoing Funds Escrow Agreement
      and
      understands and agrees to it.

     

     DIAMOND
      ENTERTAINMENT CORPORATION

     the
      “Company”

    

    

    
      	 	
              By:

            	
              /s/
                James
                Lu                                                                             
                

            
	 	 	
              James
                Lu

            
	 	 	
              President

            

    

    

    

    “SUBSCRIBERS”

    

    

    

    
      	
              ___________________________________________

            	 	
              __________________________________________

            
	
              LONGVIEW
                FUND, L.P.

            	 	
              ALPHA
                CAPITAL ANSTALT

            
	 	 	 

    

     

    

    ESCROW
      AGENT:

    

     

    _______________________________________

    GRUSHKO
      & MITTMAN, P.C.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    SCHEDULE
      A TO FUNDS ESCROW AGREEMENT

    

    
      	 	 	 
	
              SUBSCRIBER

            	
              INITIAL
                CLOSING PURCHASE PRICE

            	
              SECOND
                CLOSING

              PURCHASE
                PRICE

            
	
              LONGVIEW
                FUND, LP

              600
                Montgomery Street, 44th Floor

              San
                Francisco, CA 94111

              Fax:
                (415) 981-5301

            	
              $1,000,000.00

            	
              $1,000,000.00

            
	
              ALPHA
                CAPITAL ANSTALT

              Pradafant
                7

              9490
                Furstentums

              Vaduz,
                Lichtenstein

              Fax:
                011-42-32323196

            	
              $150,000.00

            	
              $150,000.00

            
	
              TOTALS

            	
              $1,150,000.00

            	
              $1,150,000.00Unassociated Document

    
      Exhibit
        10.54

      

      

      THIS
        NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
        BEEN
        REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE AND THE
        COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED
        FOR
        SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
        STATEMENT AS TO THIS NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
        SATISFACTORY TO DIAMOND ENTERTAINMENT CORPORATION THAT SUCH REGISTRATION
        IS NOT
        REQUIRED.

      

      
        	Principal
                Amount $1,000,000.00	
                Issue
                  Date: November 30, 2006

              

      

      

      SECURED
        CONVERTIBLE NOTE

      

      FOR
        VALUE
        RECEIVED, DIAMOND ENTERTAINMENT CORPORATION, a New Jersey corporation
        (hereinafter called "Borrower"), hereby promises to pay to LONGVIEW FUND,
        LP,
        600 Montgomery Street, 44th Floor, San Francisco, CA 94111, Fax: (415) 981-5301
        (the "Holder") or order, without demand, the sum of One Million Dollars
        ($1,000,000.00), with interest accruing thereon, on November 30, 2008 (the
        "Maturity Date"), if not retired sooner.

      

      This
        Note
        has been entered into pursuant to the terms of a subscription agreement between
        the Borrower and the Holder, dated of even date herewith (the “Subscription
        Agreement”), and shall be governed by the terms of such Subscription Agreement.
        Unless otherwise separately defined herein, all capitalized terms used in
        this
        Note shall have the same meaning as is set forth in the Subscription Agreement.
        The following terms shall apply to this Note:

      

      ARTICLE
        I

      

      GENERAL
        PROVISIONS

      

      1.1 Interest
        Rate.
        Interest payable on this Note shall accrue at the annual rate of twelve percent
        (12%) and be payable on the 90th
        day
        after the Issue Date and on the last day of each calendar quarter thereafter
        and
        on the Maturity Date, accelerated or otherwise, when the principal and remaining
        accrued but unpaid interest shall be due and payable, or sooner as described
        below.

      

      1.2 Payment
        Grace Period.
        The
        Borrower shall have a five (5) day grace period to pay any monetary amounts
        due
        under this Note, after which grace period a default interest rate of fifteen
        percent (15%) per annum.

      

      1.3 Conversion
        Privileges.
        The
        Conversion Privileges set forth in Article II shall remain in full force
        and
        effect immediately from the date hereof and until the Note is paid in full
        regardless of the occurrence of an Event of Default. The Note shall be payable
        in full on the Maturity Date, unless previously converted into Common Stock
        in
        accordance with Article II hereof; provided, that if an Event of Default
        has
        occurred, the Borrower may not pay this Note, without the consent of the
        Holder,
        until one year after the later of the date the Event of Default has been
        cured
        or one year after the Maturity Date.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      ARTICLE
        II

      

      CONVERSION
        RIGHTS

      

      The
        Holder shall have the right to convert the principal and any interest due
        under
        this Note into Shares of the Borrower's Common Stock, no par value per share
        (“Common Stock”) as set forth below.

      

      2.1. Conversion
        into the Borrower's Common Stock.

      

      (a) The
        Holder shall have the right from and after the date of the issuance of this
        Note
        and then at any time until this Note is fully paid, to convert any outstanding
        and unpaid principal portion of this Note, and accrued interest, at the election
        of the Holder (the date of giving of such notice of conversion being a
        "Conversion Date") into fully paid and nonassessable shares of Common Stock
        as
        such stock exists on the date of issuance of this Note, or any shares of
        capital
        stock of Borrower into which such Common Stock shall hereafter be changed
        or
        reclassified, at the conversion price as defined in Section 2.1(b) hereof
        (the
        "Conversion Price"), determined as provided herein. The Borrower shall have
        the
        option from and after the date of issuance of this Note and then at any time
        until this Note is fully paid, to convert any accrued interest into fully
        paid
        non-assessable registered shares of Common Stock valued at 85% of the average
        of
        the daily volume weighted average price (“VWAP”) during the five trading days
        ending the day prior to a payment date. Upon delivery to the Borrower of
        a
        completed Notice of Conversion, a form of which is annexed hereto, Borrower
        shall issue and deliver to the Holder within three (3) business days after
        the
        Conversion Date (such third day being the “Delivery Date”) that number of shares
        of Common Stock for the portion of the Note converted in accordance with
        the
        foregoing. At the election of the Holder, the Borrower will deliver accrued
        but
        unpaid interest on the Note, if any, through the Conversion Date directly
        to the
        Holder on or before the Delivery Date (as defined in the Subscription
        Agreement). The number of shares of Common Stock to be issued upon each
        conversion of this Note shall be determined by dividing that portion of the
        principal of the Note and interest, if any, to be converted, by the Conversion
        Price.

      

      (b) Subject
        to adjustment as provided in Section 2.1(c) hereof, the Conversion Price
        per
        share shall be equal to [a
        number equal to $12,000,000 pre-money valuation on a fully diluted
        basis].

      

      (c) 
        The
        Conversion Price and number and kind of shares or other securities to be
        issued
        upon conversion determined pursuant to Section 2.1(a), shall be subject to
        adjustment from time to time upon the happening of certain events while this
        conversion right remains outstanding, as follows:

      

      A. Merger,
        Sale of Assets, etc. If the Borrower at any time shall consolidate with or
        merge
        into or sell or convey all or substantially all its assets to any other
        corporation, this Note, as to the unpaid principal portion thereof and accrued
        interest thereon, shall thereafter be deemed to evidence the right to purchase
        such number and kind of shares or other securities and property as would
        have
        been issuable or distributable on account of such consolidation, merger,
        sale or
        conveyance, upon or with respect to the securities subject to the conversion
        or
        purchase right immediately prior to such consolidation, merger, sale or
        conveyance. The foregoing provision shall similarly apply to successive
        transactions of a similar nature by any such successor or purchaser. Without
        limiting the generality of the foregoing, the anti-dilution provisions of
        this
        Section shall apply to such securities of such successor or purchaser after
        any
        such consolidation, merger, sale or conveyance. This subsection does not
        preclude the sale of the assets and the rights of the DVD and Video
        business.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      B. Reclassification,
        etc. If the Borrower at any time shall, by reclassification or otherwise,
        change
        the Common Stock into the same or a different number of securities of any
        class
        or classes that may be issued or outstanding, this Note, as to the unpaid
        principal portion thereof and accrued interest thereon, shall thereafter
        be
        deemed to evidence the right to purchase an adjusted number of such securities
        and kind of securities as would have been issuable as the result of such
        change
        with respect to the Common Stock immediately prior to such reclassification
        or
        other change.

      

      C. Stock
        Splits, Combinations and Dividends. If the shares of Common Stock are subdivided
        or combined into a greater or smaller number of shares of Common Stock, or
        if a
        dividend is paid on the Common Stock in shares of Common Stock, the Conversion
        Price shall be proportionately reduced in case of subdivision of shares or
        stock
        dividend or proportionately increased in the case of combination of shares,
        in
        each such case by the ratio which the total number of shares of Common Stock
        outstanding immediately after such event bears to the total number of shares
        of
        Common Stock outstanding immediately prior to such event..

       

      D. Share
        Issuance. So long as this Note is outstanding, if the Borrower shall issue
        or
        agree to issue any shares of Common Stock except for the Excepted Issuances
        (as
        defined in the Subscription Agreement) for a consideration less than the
        Conversion Price in effect at the time of such issue, then, and thereafter
        successively upon each such issue, the Conversion Price shall be reduced
        to such
        other lower issue price. For purposes of this adjustment, the issuance of
        any
        security carrying the right to convert such security into shares of Common
        Stock
        or of any warrant, right or option to purchase Common Stock shall result
        in an
        adjustment to the Conversion Price upon the issuance of the above-described
        security and again upon the issuance of shares of Common Stock upon exercise
        of
        such conversion or purchase rights if such issuance is at a price lower than
        the
        then applicable Conversion Price. The reduction of the Conversion Price
        described in this paragraph is in addition to other rights of the Holder
        described in this Note and the Subscription Agreement.

      

      (d) Whenever
        the Conversion Price is adjusted pursuant to Section 2.1(c) above, the Borrower
        shall promptly mail to the Holder a notice setting forth the Conversion Price
        after such adjustment and setting forth a statement of the facts requiring
        such
        adjustment.

      

      (e) During
        the period the conversion right exists, Borrower will reserve from its
        authorized and unissued Common Stock not less than an amount of Common Stock
        equal to 150% of the amount of shares of Common Stock issuable upon the full
        conversion of this Note. Borrower represents that upon issuance, such shares
        will be duly and validly issued, fully paid and non-assessable. Borrower
        agrees
        that its issuance of this Note shall constitute full authority to its officers,
        agents, and transfer agents who are charged with the duty of executing and
        issuing stock certificates to execute and issue the necessary certificates
        for
        shares of Common Stock upon the conversion of this Note.

      

      2.2 Method
        of Conversion.
        This
        Note may be converted by the Holder in whole or in part as described in Section
        2.1(a) hereof and the Subscription Agreement. Upon partial conversion of
        this
        Note, a new Note containing the same date and provisions of this Note shall,
        at
        the request of the Holder, be issued by the Borrower to the Holder for the
        principal balance of this Note and interest which shall not have been converted
        or paid.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      2.3 Optional
        Redemption of Principal Amount.
        Provided an Event of Default or an event which with the passage of time or
        the
        giving of notice could become an Event of Default has not occurred, whether
        or
        not such Event of Default has been cured, the Borrower will have the option
        of
        prepaying the outstanding Principal amount of this Note ("Optional Redemption"),
        in whole or in part, by paying to the Holder a sum of money equal to one
        hundred
        and twenty percent (120%) of the Principal amount to be redeemed, together
        with
        accrued but unpaid interest thereon and any and all other sums due, accrued
        or
        payable to the Holder arising under this Note or any Transaction Document
        through the Redemption Payment Date as defined below (the "Redemption Amount").
        Borrower’s election to exercise its right to prepay must be by notice in writing
        (“Notice of Redemption”). The Notice of Redemption shall specify the date for
        such Optional Redemption (the "Redemption Payment Date"), which date shall
        be
        thirty (30) business days after the date of the Notice of Redemption (the
        "Redemption Period"). Conversions will not be permitted if the Redemption
        Payment Date is fewer than five business days after notice by the Company.
        A
        Notice of Redemption shall not be effective with respect to any portion of
        the
        Principal Amount for which the Holder has a pending election to convert,
        or for
        conversions initiated or made by the Holder during the Redemption Period.
        On the
        Redemption Payment Date, the Redemption Amount, less any portion of the
        Redemption Amount against which the Holder has exercised its conversion rights,
        shall be paid in good funds to the Holder. In the event the Borrower fails
        to
        pay the Redemption Amount on the Redemption Payment Date as set forth herein,
        then (i) such Notice of Redemption will be null and void, (ii) Borrower will
        have no right to deliver another Notice of Redemption, and (iii) Borrower’s
        failure may be deemed by Holder to be a non-curable Event of Default. A
        Redemption Notice may be given only at a time a Registration Statement is
        effective. A Notice of Redemption may not be given nor may the Borrower
        effectuate a Redemption without the consent of the Holder, if at any time
        during
        the Redemption Period an Event of Default or an Event which with the passage
        of
        time or giving of notice could become an Event of Default (whether or not
        such
        Event of Default has been cured), has occurred or the Registration Statement
        registering the Registrable Securities is not effective each day during the
        Redemption Period.

      

      2.4 Maximum
        Conversion.
        The
        Holder shall not be entitled to convert on a Conversion Date that amount
        of the
        Note in connection with that number of shares of Common Stock which would
        be in
        excess of the sum of (i) the number of shares of Common Stock beneficially
        owned
        by the Holder and its affiliates on a Conversion Date, (ii) any Common Stock
        issuable in connection with the unconverted portion of the Note, and (iii)
        the
        number of shares of Common Stock issuable upon the conversion of the Note
        with
        respect to which the determination of this provision is being made on a
        Conversion Date, which would result in beneficial ownership by the Holder
        and
        its affiliates of more than 4.99% of the outstanding shares of Common Stock
        of
        the Borrower on such Conversion Date. For the purposes of the provision to
        the
        immediately preceding sentence, beneficial ownership shall be determined
        in
        accordance with Section 13(d) of the Securities Exchange Act of 1934, as
        amended, and Regulation 13d-3 thereunder. Subject to the foregoing, the Holder
        shall be limited to aggregate conversions of only 4.99% and aggregate conversion
        by the Holder may not exceed 4.99%. The Holder shall have the authority and
        obligation to determine whether the restriction contained in this Section
        2.3
        will limit any conversion hereunder and to the extent that the Holder determines
        that the limitation contained in this Section applies, the determination
        of
        which portion of the Notes are convertible shall be the responsibility and
        obligation of the Holder. 

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      ARTICLE
        III

      

      EVENT
        OF DEFAULT

      

      The
        occurrence of any of the following events of default ("Event of Default")
        shall,
        at the option of the Holder hereof, make all sums of principal and interest
        then
        remaining unpaid hereon and all other amounts payable hereunder immediately
        due
        and payable, upon demand, without presentment, or grace period, all of which
        hereby are expressly waived, except as set forth below:

      

      3.1 Failure
        to Pay Principal or Interest.
        The
        Borrower fails to pay any installment of principal, interest or other sum
        due
        under this Note when due and such failure continues for a period of five
        (5)
        days after the due date. The five (5) day period described in this Section
        3.1
        is the same five (5) day period described in Section 1.2 hereof.

      

      3.2 Breach
        of Covenant.
        The
        Borrower breaches any material covenant or other term or condition of the
        Subscription Agreement or this Note in any material respect and such breach,
        if
        subject to cure, continues for a period of ten (10) business days after written
        notice to the Borrower from the Holder.

      

      3.3 Breach
        of Representations and Warranties.
        Any
        material representation or warranty of the Borrower made herein, in the
        Subscription Agreement, Transaction Documents, or in any agreement, statement
        or
        certificate given in writing pursuant hereto or in connection therewith shall
        be
        false or misleading in any material respect as of the date made and the Closing
        Date.

      

      3.4 Receiver
        or Trustee.
        The
        Borrower shall make an assignment for the benefit of creditors, or apply
        for or
        consent to the appointment of a receiver or trustee for it or for a substantial
        part of its property or business; or such a receiver or trustee shall otherwise
        be appointed.

      

      3.5 Judgments.
        Any
        money judgment, writ or similar final process shall be entered or filed against
        Borrower or any of its property or other assets for more than $50,000, and
        shall
        remain unvacated, unbonded or unstayed for a period of forty-five (45)
        days.

      

      3.6 Bankruptcy.
        Bankruptcy, insolvency, reorganization or liquidation proceedings or other
        proceedings or relief under any bankruptcy law or any law, or the issuance
        of
        any notice in relation to such event, for the relief of debtors shall be
        instituted by or against the Borrower and if instituted against Borrower
        are not
        dismissed within 45 days of initiation.

      

      3.7 Delisting.
        Delisting of the Common Stock from any Principal Market; failure to comply
        with
        the requirements for continued listing on a Principal Market for a period
        of
        seven consecutive trading days; or notification from a Principal Market that
        the
        Borrower is not in compliance with the conditions for such continued listing
        on
        such Principal Market.

      

      3.8 Non-Payment.
        A
        default by the Borrower under any one or more obligations in an aggregate
        monetary amount in excess of $100,000 for more than twenty days after the
        due
        date, unless the Borrower is contesting the validity of such obligation in
        good
        faith.

      

      3.9 Stop
        Trade.
        An SEC
        or judicial stop trade order or Principal Market trading suspension that
        lasts
        for five or more consecutive trading days.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      3.10 Failure
        to Deliver Common Stock or Replacement Note.
        Borrower's failure to timely deliver Common Stock to the Holder pursuant
        to and
        in the form required by this Note and Sections 7 and 11 of the Subscription
        Agreement, or, if required, a replacement Note.

      

      3.11 Non-Registration
        Event.
        The
        occurrence of a Non-Registration Event as described in Section 11.4 of the
        Subscription Agreement.

      

      3.12 Reservation
        Default.
        Failure
        by the Borrower to have reserved for issuance upon conversion of the Note
        the
        amount of Common stock as set forth in this Note and the Subscription
        Agreement.

      

      3.13 Abandonment
        of Acquisition.
        Abandonment of the transaction with Rx for Africa or it becoming impracticable
        to consummate such transaction.

      

      3.14 Failure
        to Deliver Financial Statement.
        Failure
        by the Borrower to deliver the financial statements as more fully described
        in
        Section 1(d) of the Subscription Agreement on or before January 31,
        2007.

      

      3.15 Cross
        Default.
        A
        default by the Borrower of a material term, covenant, warranty or undertaking
        of
        any other agreement to which the Borrower and Holder are parties, or the
        occurrence of a material event of default under any such other agreement
        which
        is not cured after any required notice and/or cure period.

      

      ARTICLE
        IV

      

      SECURITY
        INTEREST

      

      4. Security
        Interest/Waiver of Automatic Stay.
        This
        Note is secured by a security interest granted to the Collateral Agent for
        the
        benefit of the Holder pursuant to a Security Agreement, as delivered by Borrower
        to Holder. The Borrower acknowledges and agrees that should a proceeding
        under
        any bankruptcy or insolvency law be commenced by or against the Borrower,
        or if
        any of the Collateral (as defined in the Security Agreement) should become
        the
        subject of any bankruptcy or insolvency proceeding, then the Holder should
        be
        entitled to, among other relief to which the Holder may be entitled under
        the
        Transaction Documents and any other agreement to which the Borrower and Holder
        are parties (collectively, "Loan Documents") and/or applicable law, an order
        from the court granting immediate relief from the automatic stay pursuant
        to 11
        U.S.C. Section 362 to permit the Holder to exercise all of its rights and
        remedies pursuant to the Loan Documents and/or applicable law. THE BORROWER
        EXPRESSLY WAIVES THE BENEFIT OF THE AUTOMATIC STAY IMPOSED BY 11 U.S.C. SECTION
        362. FURTHERMORE, THE BORROWER EXPRESSLY ACKNOWLEDGES AND AGREES THAT NEITHER
        11
        U.S.C. SECTION 362 NOR ANY OTHER SECTION OF THE BANKRUPTCY CODE OR OTHER
        STATUTE
        OR RULE (INCLUDING, WITHOUT LIMITATION, 11 U.S.C. SECTION 105) SHALL STAY,
        INTERDICT, CONDITION, REDUCE OR INHIBIT IN ANY WAY THE ABILITY OF THE HOLDER
        TO
        ENFORCE ANY OF ITS RIGHTS AND REMEDIES UNDER THE LOAN DOCUMENTS AND/OR
        APPLICABLE LAW. The Borrower hereby consents to any motion for relief from
        stay
        that may be filed by the Holder in any bankruptcy or insolvency proceeding
        initiated by or against the Borrower and, further, agrees not to file any
        opposition to any motion for relief from stay filed by the Holder. The Borrower
        represents, acknowledges and agrees that this provision is a specific and
        material aspect of the Loan Documents, and that the Holder would not agree
        to
        the terms of the Loan Documents if this waiver were not a part of this Note.
        The
        Borrower further represents, acknowledges and agrees that this waiver is
        knowingly, intelligently and voluntarily made, that neither the Holder nor
        any
        person acting on behalf of the Holder has made any representations to induce
        this waiver, that the Borrower has been represented (or has had the opportunity
        to he represented) in the signing of this Note and the Loan Documents and
        in the
        making of this waiver by independent legal counsel selected by the Borrower
        and
        that the Borrower has discussed this waiver with counsel.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      ARTICLE
        V

      

      MISCELLANEOUS

      

      5.1 Failure
        or Indulgence Not Waiver.
        No
        failure or delay on the part of Holder hereof in the exercise of any power,
        right or privilege hereunder shall operate as a waiver thereof, nor shall
        any
        single or partial exercise of any such power, right or privilege preclude
        other
        or further exercise thereof or of any other right, power or privilege. All
        rights and remedies existing hereunder are cumulative to, and not exclusive
        of,
        any rights or remedies otherwise available.

      

      5.2 Unconditional
        Obligation. This Note shall be deemed an unconditional obligation of Borrower
        for the payment of money and, without limitation to any other remedies Holder
        may have, may be enforced against Borrower by summary proceeding pursuant
        to
        N.Y. Civil Procedure Law and Rules Section 3213 or any similar rule or statute
        in the jurisdiction where enforcement is sought.

      

      5.3 Notices.
        All
        notices, demands, requests, consents, approvals, and other communications
        required or permitted hereunder shall be in writing and, unless otherwise
        specified herein, shall be (i) personally served, (ii) deposited in the mail,
        registered or certified, return receipt requested, postage prepaid, (iii)
        delivered by reputable air courier service with charges prepaid, or (iv)
        transmitted by hand delivery, telegram, or facsimile, addressed as set forth
        below or to such other address as such party shall have specified most recently
        by written notice. Any notice or other communication required or permitted
        to be
        given hereunder shall be deemed effective (a) upon hand delivery or delivery
        by
        facsimile, with accurate confirmation generated by the transmitting facsimile
        machine, at the address or number designated below (if delivered on a business
        day during normal business hours where such notice is to be received), or
        the
        first business day following such delivery (if delivered other than on a
        business day during normal business hours where such notice is to be received)
        or (b) on the second business day following the date of mailing by express
        courier service, fully prepaid, addressed to such address, or upon actual
        receipt of such mailing, whichever shall first occur. The addresses for such
        communications shall be: (i) if to the Borrower to: Diamond Entertainment
        Corporation, 800
        Tucker Lane, Walnut, California 91789, Attn: James Lu,
        CEO,
        telecopier: (909) 869-1990, with a copy by telecopier only to: Owen M.
        Naccarato, Esq., Naccarato & Associates, 18301 Von Karman Avenue, Suite 430,
        Irvine, CA 92612, telecopier: (949) 851-9262, and (ii) if to the Holder,
        to the
        name, address and telecopy number set forth on the front page of this Note,
        with
        a copy by telecopier only to Grushko & Mittman, P.C., 551 Fifth Avenue,
        Suite 1601, New York, New York 10176, telecopier: (212) 697-3575.

      

      5.4 Amendment
        Provision.
        The
        term "Note" and all reference thereto, as used throughout this instrument,
        shall
        mean this instrument as originally executed, or if later amended or
        supplemented, then as so amended or supplemented.

      

      5.5 Assignability.
        This
        Note shall be binding upon the Borrower and its successors and assigns, and
        shall inure to the benefit of the Holder and its successors and
        assigns.

      

      5.6 Cost
        of Collection.
        If
        default is made in the payment of this Note, Borrower shall pay the Holder
        hereof reasonable costs of collection, including reasonable attorneys'
        fees.

      

      5.7 Governing
        Law.
        This
        Note shall be governed by and construed in accordance with the laws of the
        State
        of New York. Any action brought by either party against the other concerning
        the
        transactions contemplated by this Agreement shall be brought only in the
        state
        courts of New York or in the federal courts located in the state of New York.
        Both parties and the individual signing this Agreement on behalf of the Borrower
        agree to submit to the jurisdiction of such courts. The prevailing party
        shall
        be entitled to recover from the other party its reasonable attorney's fees
        and
        costs.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      5.8 Maximum
        Payments.
        Nothing
        contained herein shall be deemed to establish or require the payment of a
        rate
        of interest or other charges in excess of the maximum permitted by applicable
        law. In the event that the rate of interest required to be paid or other
        charges
        hereunder exceed the maximum permitted by such law, any payments in excess
        of
        such maximum shall be credited against amounts owed by the Borrower to the
        Holder and thus refunded to the Borrower.

      

      5.9 Shareholder
        Status.
        The
        Holder shall not have rights as a shareholder of the Borrower with respect
        to
        unconverted portions of this Note. However, the Holder will have all the
        rights
        of a shareholder of the Borrower with respect to the shares of Common Stock
        to
        be received by Holder after delivery by the Holder of a Conversion Notice
        to the
        Borrower.

      

      IN
        WITNESS WHEREOF,
        Borrower has caused this Note to be signed in its name by an authorized officer
        as of the 30th
        day of
        November, 2006.

    

    
      

      
        	
                 

              	
                DIAMOND
                  ENTERTAINMENT CORPORATION

              

      

      

      
        	 	 	 
	 	 	 
	 	
                By:
                  

              	
                /s/
                  James
                  Lu                                                                  
                  

              
	 	 	
                Name:
                  James LU

              
	 	 	
                Title:
                  President

              

      

      

      WITNESS:

      

      

      /s/
        Fred U.
        Odaka                                                       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      NOTICE
        OF CONVERSION

      

      (To
        be
        executed by the Registered Holder in order to convert the Note)

      

      

      The
        undersigned hereby elects to convert $_________ of the principal and $_________
        of the interest due on the Note issued by Diamond Entertainment Corporation
        on
        November ___, 2006 into Shares of Common Stock of Diamond Entertainment
        Corporation (the "Borrower") according to the conditions set forth in such
        Note,
        as of the date written below.

      

      

      

      Date
        of
        Conversion:
        __________________________________________________________________________________________

      

      

      Conversion
        Price:
        ____________________________________________________________________________________________

      

      

      Shares
        To
        Be Delivered:
        _______________________________________________________________________________________

      

      

      Signature:
        __________________________________________________________________________________________________

      

      

      Print
        Name:
        _________________________________________________________________________________________________

      

      

      Address:
        ___________________________________________________________________________________________________

      

       ___________________________________________________________________________________________________

       

       

      9

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