Document:

4.4 Form of Subscription Agreement

    SUBSCRIPTION
      FOR CONVERTIBLE DEBENTURES

     

    TO:  Red
      Mile Entertainment Inc. (the "Corporation")

    AND
      TO: J.F.
      Mackie & Company Ltd. (the "Agent" or "J.F. Mackie") 

     

    The
      undersigned (the "Subscriber")
      hereby
      irrevocably subscribes for and agrees to purchase the principal sum set forth
      below of senior secured convertible debentures of the Corporation having the
      terms set forth in Exhibit 3 hereto (the "Debentures"),
      at a
      subscription price of USD $1,000 per Debenture (the "Subscription
      Price"),
      upon
      and subject to the terms and conditions set forth in "Terms and Conditions
      of
      Subscription for Convertible Debentures of Red Mile Entertainment Inc." attached
      hereto (together with this page and the attached Exhibits, the "Subscription
      Agreement").
      In
      addition to this face page, the Subscriber must complete all applicable
      Exhibits.

    

      
        	
                 

                ______________________________________________________________________________

                (Name
                  of Subscriber - please print)

                 

                By: ___________________________________________________________________________

                (Authorized
                  Signature)

                 

                 

                ______________________________________________________________________________

                (Official
                  Capacity or Title if Subscriber is a corporation - please
                  print)

                 

                ______________________________________________________________________________

                (Please
                  print name of individual whose signature appears above if different
                  than
                  the name of the Subscriber printed above.)

                 

                ______________________________________________________________________________

                (Subscriber's
                  Address)

                 

                ______________________________________________________________________________

                 

                ______________________________________________________________________________

                (Telephone
                  Number) (E-Mail
                  Address)

                 

                 

              	 	
                 

                Number
                  of Debentures Subscribed For: ___________________

                 

                 

                Principal
                  Amount of Debentures Subscribed for (Number of Debentures X $1,000):
                  

                 

                $_____________________________________________________________________________

                 

              
	 
	
                 

                If
                  the Subscriber is signing as agent for a principal and is not deemed
                  to be
                  purchasing as principal pursuant to NI 45-106 (as defined herein)
                  by
                  virtue of being either (i) a trust company or trust corporation
                  acting on behalf of a fully managed account managed by the trust
                  company
                  or trust corporation; or (ii) a person acting on behalf of a fully
                  managed account managed by it, and in each case satisfying the
                  criteria
                  set forth in NI 45-106, complete the following and ensure that
                  Exhibit 1
                  is completed in respect of such principal ("Disclosed Beneficial
                  Purchaser"):

                 

                _____________________________________________________________________________

                (Name
                  of Principal)

                 

                _____________________________________________________________________________

                (Principal's
                  Address)

                 

                _____________________________________________________________________________

                (Principal's
                  Address)

                 

                _____________________________________________________________________________

                (Principal's
                  Telephone Number)(Principal's
                  E-Mail Address)

              
	 	 	 
	
                 

                Register
                  the Debentures as set forth below:

                 

                 

                _____________________________________________________________________________

                (Name)

                 

                 

                _____________________________________________________________________________

                (Account
                  reference, if applicable)

                 

                _____________________________________________________________________________

                (Address)

                 

                _____________________________________________________________________________

                (Address)

                 

                 

                 

                 

              	 	
                 

                Deliver
                  the Debentures as set forth below:

                 

                _____________________________________________________________________________

                (Name)

                 

                _____________________________________________________________________________

                (Account
                  reference, if applicable)

                 

                 

                _____________________________________________________________________________

                (Contact
                  Name)

                 

                _____________________________________________________________________________

                (Address)

                 

                _____________________________________________________________________________

                (Address)

                 

              

      

    

     

    ACCEPTANCE:
      The
      Corporation hereby accepts the subscription as set forth above on the terms
      and
      conditions contained in this Subscription Agreement and the Corporation
      represents and warrants to the Subscriber that the representations and
      warranties made by the Corporation to the Agent in the Agency Agreement (as
      defined herein) are true and correct in all material respects as of the Closing
      Date (as defined herein) (save and except as may be waived by the Agent) and
      that the Subscriber is entitled to rely thereon and on the respective covenants
      of the Corporation set out in the Agency Agreement as if the Subscriber were
      a
      party thereto and such representations, warranties and covennts are incorporated
      herein and form part of this Subscription Agreement.

    

    _________________________,
      2006

    

    
      	
              RED
                MILE ENTERTAINMENT INC.

               

              _______________________________________________

              By: 

            	 	
               

              Subscription
                No:

            

    

    

    This
      is the first page of an agreement comprised of 10 pages (not including Exhibits
      1, 2 and 3).

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    TERMS
      AND CONDITIONS OF SUBSCRIPTION FOR

    CONVERTIBLE
      DEBENTURES OF RED MILE ENTERTAINMENT INC.

    

    Terms
      of the Offering

     

    1.  The
      Subscriber acknowledges (on its own behalf and, if applicable, on behalf of
      each
      person on whose behalf the Subscriber is contracting) that this subscription
      is
      subject to rejection or allotment by the Corporation in whole or in part at
      any
      time and is effective only upon acceptance by the Corporation.

     

    2.  The
      Subscriber acknowledges (on its own behalf and, if applicable, on behalf of
      each
      person on whose behalf the Subscriber is contracting) that:

     

    
      	(a)  	
              the
                Debentures
                subscribed for by it hereunder form part of a larger issuance and
                sale by
                the Corporation of Debentures having a principal amount of a minimum
                of
                USD$5,000,000 and a maximum of USD$10,000,000 at a subscription price
                of
                USD$1,000 per Debenture; 

            

    

     

    
      	(b)  	
              the
                Debentures have the terms and conditions set forth in Exhibit 3 hereto;
                

            

    

     

    
      	(c)  	
              if
                the Closing Date does not occur on or before October
                3, 2006,
                or such other date as may be agreed to by the Corporation and J.F.
                Mackie,
                or in the event that the Corporation rejects the Subscription Agreement,
                the subscription proceeds will be promptly returned to the Subscriber,
                without interest or deduction; and

            

    

     

    
      	(d)  	
              the
                Corporation may complete additional financings in the future in order
                to
                fund the ongoing operations and expansion of the Corporation and
                such
                future financings may have a dilutive effect on security holders
                of the
                Corporation, including the Subscriber.

            

    

     

    Representations,
      Warranties and Covenants by Subscriber

     

    3.  The
      Subscriber (on its own behalf and, if applicable, on behalf of each person
      on
      whose behalf the Subscriber is contracting) represents, warrants, certifies
      and
      covenants to the Corporation and the Agent (and acknowledges that the
      Corporation and the Agent, and their respective counsel, are relying thereon)
      both at the date hereof and at the Closing Time (as herein defined)
      that:

     

    
      	(a)  	
              it
                has been independently advised as to restrictions with respect to
                trading
                in the Debentures
                and in the common shares ("Common
                Shares")
                of the Corporation issuable on the conversion of the Debentures (the
                "Underlying
                Securities")
                imposed
                by applicable securities legislation in the jurisdiction in which
                it
                resides, confirms that no representation has been made to it by or
                on
                behalf of the Corporation or the Agent with respect thereto, acknowledges
                that it is aware of the characteristics of the Debentures
                and the Underlying Securities,
                the risks relating to an investment therein and of the fact that
                it may
                not be able to resell the Debentures
                or Underlying Securities, except
                in accordance with limited exemptions under applicable securities
                legislation and regulatory policy until expiry of the applicable
                hold
                period and compliance with the other requirements of applicable law;
                and
                it agrees that any certificates representing the Underlying
                Securities will
                bear a legend indicating that the resale of such securities is restricted;
                and

            

    

     

    
      	(b)  	
              it
                has not received or been provided with, nor has it requested, nor
                does it
                have any need to receive, any offering memorandum, any prospectus,
                sales
                or advertising literature, or any other document (other than financial
                statements, interim financial statements or any other document, the
                content of which is prescribed by statute or regulation) describing
                or
                purporting to describe the business and affairs of the Corporation
                which
                has been prepared for delivery to, and review by, prospective purchasers
                in order to assist it in making an investment decision in respect
                of the
                Debentures;
                and

            

    

     

    
      	(c)  	
              it
                has not become aware of any advertisement in printed media of general
                and
                regular paid circulation (or other printed public media), radio,
                television or telecommunications or other form of advertisement (including
                electronic display such as the Internet) with respect to the distribution
                of the Debentures;
                and

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    -3-

     

     

     

    
      	(d)  	
              it
                is aware that: (i) the Corporation is not a reporting issuer under
                the
                securities legislation of any province and that as a result the applicable
                hold period on the Debentures and the Underlying Securities may never
                expire; (ii) if no further statutory exemption may be relied upon
                and no
                discretionary order is obtained, this could result in it having to
                hold
                the Debentures and the Underlying Securities for an indefinite period
                of
                time; (iii) there is no market for the Debentures or the Underlying
                Securities; and (iv) the Corporation is not undertaking to file a
                prospectus or registration statement with respect to the Debentures
                or the
                Underlying Securities, now or in the future;
                and

            

    

     

    
      	(e)  	
              unless
                it is purchasing under subparagraph 3(f), it is purchasing the Debentures
                as principal for its own account, not for the benefit of any other
                person,
                for investment only and not with a view to the resale or distribution
                of
                all or any of the Debentures, it is resident in or otherwise subject
                to
                applicable securities laws of the jurisdiction set out as the
                "Subscriber's Address" on the face page hereof and it fully complies
                with
                one or more of the criteria set forth below:

            

    

     

    
      	(i)  	
              it
                is an "accredited
                investor",
                as such term is defined in National Instrument 45-106 - Prospectus
                and Registration Exemptions
                of
                the Canadian Securities Administrators adopted under the securities
                legislation of the Canadian jurisdictions ("NI 45-106"),
                it was not created or used solely to purchase or hold securities
                as an
                accredited investor as described in paragraph (m) of the definition
                of
                "accredited investor" in NI 45-106 (and reproduced as Appendix “A” to
                Exhibit 1 hereto), and it has concurrently executed and delivered
                a
                Representation Letter in the form attached as Exhibit 1
                to
                this Subscription Agreement and has initialed or placed a check mark
                in
                Appendix "A"
                thereto indicating that the Subscriber satisfies one of the categories
                of
                "accredited investor" set forth in such definition;
                or

            

    

     

    
      	(ii)  	
              it
                is a person (as defined in NI 45-106), it has an aggregate acquisition
                cost for the Debentures of not less than CDN $150,000 paid in cash
                at the
                time of the trade and it was not created or used solely to purchase
                or
                hold securities in reliance on this exemption from the registration
                and
                prospectus requirements of applicable securities laws;
                or

            

    

     

    
      	(iii)  	
              it
                is resident in or otherwise subject to applicable securities laws
                of a
                Province of Canada other than Ontario or Saskatchewan and it is (if
                applicable, please initial):

            

    

     

    

      
        	
                ______

              	
                (A)  a
                  "director", "executive officer" or "control person" (as such terms
                  are
                  defined in NI 45-106 and reproduced in Appendix A to Exhibit 1
                  of this
                  Subscription Agreement) of the Corporation, or of an affiliate
                  of the
                  Corporation; or

                 

              
	
                ______

              	
                (B)  a
                  "spouse" (as such term is defined in NI 45-106 and reproduced in
                  Appendix
                  A to Exhibit 1 of this Subscription Agreement), parent, grandparent,
                  brother, sister or child of any person referred to in subparagraph
                  (A)
                  above; or

                 

              
	
                ______

              	
                (C)  a
                  parent, grandparent, brother, sister or child of the spouse of
                  any person
                  referred to in subparagraph (A) above; or

                 

              
	
                ______

              	
                (D)  a
                  close personal friend of any person referred to in subparagraph (A)
                  above and has completed Exhibit
                  2
                  hereto; or

                 

              
	
                ______

              	
                (E)  a
                  close business associate of any person referred to in
                  subparagraph (A) above and has completed Exhibit
                  2
                  hereto;
                  or

                 

              
	
                ______

              	
                (F)  a
                  "founder" (as such term is defined in NI 45-106 and reproduced
                  in Appendix
                  A to Exhibit 1 of this Subscription Agreement) of the Corporation,
                  or a
                  spouse, parent, grandparent, brother, sister, child, close personal
                  friend
                  or close business associate of a founder of the Corporation and,
                  if
                  requested by the Corporation or the Agent or their respective counsel,
                  will provide a signed statement describing the relationship with
                  such
                  founder of the Corporation; or

                 

              
	
                ______

              	
                (G)  a
                  parent, grandparent, brother, sister or child of a spouse of a
                  founder of
                  the Corporation; or 

                 

              

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      -4-

       

    

    

      
        	
                ______

              	
                (H)  a
                  person of which a majority of the voting securities are beneficially
                  owned
                  by, or a majority of directors are, persons described in
                  subparagraphs (A) through (G) above; or

                 

              
	
                ______

              	
                (I)  a
                  trust or estate of which all of the beneficiaries or a majority
                  of the
                  trustees or executors are persons described in subparagraphs (A)
                  through
                  (G) above; or

                 

              

      

    

    (Note:
      for
      the purposes of subparagraphs (D) and (F) above, a person is not a close
      personal friend solely because the individual is a relative or a member of
      the
      same organization, association or religious group or because the individual
      is a
      client, customer or former client or customer, nor is an individual a close
      personal friend as a result of being a close personal friend of a close personal
      friend of one of the listed individuals above, rather the relationship must
      be
      direct. A close personal friend is one who knows the director, executive
      officer, founder or control person well enough and has known them for a
      sufficient period of time to be in a position to assess their capabilities
      and
      trustworthiness. Further, for the purposes of subparagraphs (E) and (F)
      above, a person is not a "close business associate" if the person is a casual
      business associate or a person introduced or solicited for purposes of
      purchasing securities nor is the individual a close business associate solely
      because the individual is a client, customer, former client or customer, nor
      is
      the individual a close business associate if they are a close business associate
      of a close business associate of one of the listed individuals above, rather
      the
      relationship must be direct. A close business associate is an individual who
      had
      sufficient prior dealings with the director, executive officer, founder or
      control person to be in a position to assess their capabilities and
      trustworthiness)

     

    
      	(iv)  	
              it
                is an employee, executive officer, director or consultant (as such
                terms
                (other than employee) are defined in NI 45-106 and reproduced in
                Appendix A to Exhibit 1 to this Subscription Agreement) of the Corporation
                or a related entity of the Corporation and its participation in the
                trade
                is voluntary, meaning it is not induced to participate in the trade
                by
                expectation of employment or appointment or continued employment
                or
                appointment with, or engagement to provide services or continued
                engagement to provide services to, as applicable, the Corporation
                or a
                related entity of the Corporation; 

            

    

     

    
      	(f)  	
              if
                it is not purchasing as a principal, it is duly authorized to enter
                into
                this Subscription Agreement and to execute and deliver all documentation
                in connection with the purchase on behalf of each beneficial purchaser,
                each of whom is purchasing as principal for its own account, not
                for the
                benefit of any other person, and not with a view to the resale or
                distribution of all or any of the Debentures, it acknowledges that
                the
                Corporation and/or the Agent are required by law to disclose to certain
                regulatory authorities the identity of each beneficial purchaser
                of
                Debentures for whom it may be acting, and it and each beneficial
                purchaser
                is resident in the jurisdiction set out as the "Subscriber's Address"
                and:

            

    

     

    
      	(i)  	
              it
                is an "accredited investor" as such term is defined in paragraphs
                (p) or
                (q) of the definition of "accredited investor" in NI 45-106 and reproduced
                in Appendix
                "A"
                to
                Exhibit 1
                of
                this Subscription Agreement (provided, however, that it is not a
                trust
                company or trust corporation registered under the laws of Prince
                Edward
                Island that is not registered or authorized under the Trust
                and Loan Companies Act (Canada)
                or under comparable legislation in another jurisdiction in Canada)
                and is
                therefore deemed to be purchasing as principal pursuant to NI 45-106
                and it has concurrently executed and delivered a Representation Letter
                in
                the form attached hereto as Exhibit 1
                and has initialled or placed a check mark in Appendix "A"
                thereto indicating that the Subscriber satisfies one of the categories
                of
                "accredited investor" set out in paragraphs (p) or (q) of Appendix "A"
                thereto; or

            

    

     

    
      	(ii)  	
              subject
                to securities laws applicable to the Subscriber, it is acting as
                agent for
                one or more Disclosed Beneficial Purchasers, each of such principals
                is
                purchasing as principal for its own account, not for the benefit
                of any
                other person, for investment only, and not with a view to the resale
                or
                distribution of all or any of the Debentures, and each of such principals
                complies with subparagraphs (i) or (ii) of paragraph 3(d) hereof
                as are
                applicable to it; 

            

    

     

    
      	(g)  	
              if
                it is a resident of or otherwise subject to applicable securities
                laws of
                any
                jurisdiction
                referred to in the preceding paragraphs
                but not purchasing thereunder, it is purchasing pursuant to an exemption
                from prospectus and registration requirements (particulars of which
                are
                enclosed herewith) available to it under applicable securities legislation
                of the jurisdiction of its residence and shall deliver to the Corporation
                and the Agent such further particulars of the exemption(s) and the
                Subscriber's qualifications thereunder as the Corporation may request;
                and
                

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
       

      -5-

       

    

     

    
      	(h)  	
              if
                the Subscriber is resident in or otherwise subject to applicable
                securities laws of a jurisdiction other
                than Canada or the United States,
                the Subscriber confirms, represents and warrants
                that:

            

    

     

    
      	(i)  	
              the
                Subscriber is knowledgeable of, or has been independently advised
                as to,
                the applicable securities laws of the jurisdiction in which the Subscriber
                is resident (the "International
                Jurisdiction")
                and which would apply to the acquisition of the Debentures;
                

            

    

     

    
      	(ii)  	
              the
                Subscriber is purchasing the Debentures
                pursuant to exemptions from prospectus or registration requirements
                or
                equivalent requirements under applicable securities laws or, if such
                is
                not applicable, the Subscriber is permitted to purchase the Debentures
                under the applicable securities laws of the International Jurisdiction
                without the need to reply on any
                exemptions;

            

    

     

    
      	(iii)  	
              the
                applicable securities laws of the International Jurisdiction do not
                require the Corporation to make any filings or seek any approvals
                of any
                kind whatsoever from any securities regulator of any kind whatsoever
                in
                the International Jurisdiction in connection with the issue and sale
                or
                resale of the Subscriber’s Debentures;
                and

            

    

     

    
      	(iv)  	
              the
                purchase of the Debentures
                by
                the Subscriber does not trigger:

            

    

     

    
      	(A)  	
              any
                obligation to prepare and file a prospectus or similar document,
                or any
                other report with respect to such purchase in the International
                Jurisdiction; or

            

    

     

    
      	(B)  	
              any
                continuous disclosure reporting obligation of the Corporation in
                the
                International Jurisdiction; and

            

    

     

    the
      Subscriber will, if requested by the Corporation or the Agent, deliver to the
      Corporation and the Agent a certificate or opinion of local counsel from the
      International Jurisdiction which will confirm the matters referred to in
      subsections (ii), (iii) and (iv) above to the satisfaction of the Corporation
      and the Agent, acting reasonably; and

     

    
      	(i)  	
              it
                acknowledges and certifies that:

            

    

     

    
      	(i)  	
              no
                securities commission or similar regulatory authority has reviewed
                or
                passed on the merits of the Debentures;
                and

            

    

     

    
      	(ii)  	
              there
                is no government or other insurance covering the Debentures;
                and

            

    

     

    
      	(iii)  	
              there
                are risks associated with the purchase of the Debentures;
                and

            

    

     

    
      	(iv)  	
              there
                are restrictions on the Subscriber's ability to resell the Debentures
                and Underlying Securities and it is the responsibility of the Subscriber
                to find out what those restrictions are and to comply with them before
                selling the Debentures
                or Underlying
                Securities; and

            

    

     

    
      	(v)  	
              the
                Corporation has advised the Subscriber that the Corporation is relying
                on
                exemptions from the requirements to provide the Subscriber with a
                prospectus under the applicable securities legislation of the province
                or
                territory in which the Subscriber is resident, and, as a consequence
                of
                acquiring Debentures
                pursuant to these exemptions, certain protections, rights and remedies
                provided by the applicable securities legislation of the province
                of
                territory in which the Subscriber is resident, including statutory
                or
                contractual rights of rescission or damages, will not be available
                to the
                Subscriber; and

            

    

     

    
      	(j)  	
              it
                confirms that neither the Corporation, the Agent nor any of their
                respective directors, officers, employees or representatives, has
                made any
                representations (oral or written) to the
                Subscriber:

            

    

     

    
      	(i)  	
              that
                any person will resell or repurchase the Debentures or Underlying
                Securities;

            

    

     

    
      	(ii)  	
              that
                any person will refund the purchase price of the Debentures;
                or

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
       

      -6-

       

    

     

    
      	(iii)  	
              as
                to the future price or value of the Debentures or Underlying Securities;
                and

            

    

     

    
      	(k)  	
              it
                is not a "U.S. person" as defined by Regulation S promulgated under
                the
                Unites States Securities Act of 1933 (the "1933
                Act")
                and is not acquiring the Debentures for the account or benefit of
                a U.S.
                person or a person in the United States. A "U.S. person" is defined
                by
                Regulation S promulgated under the 1933 Act to be any person who
                is:

            

    

     

    
      	(i)  	
              any
                natural person resident in the United States;

            

    

     

    
      	(ii)  	
              any
                partnership or corporation organized or incorporated under the laws
                of the
                United States; 

            

    

     

    
      	(iii)  	
              any
                estate of which any executor or administrator is a U.S.
                person;

            

    

     

    
      	(iv)  	
              any
                trust of which any trustee is a U.S. person;

            

    

     

    
      	(v)  	
              any
                agency or branch of a foreign entity located in the United States;
                

            

    

     

    
      	(vi)  	
              any
                non-discretionary account or similar account (other than an estate
                or
                trust) held by a dealer or other fiduciary for the benefit or account
                of a
                U.S. person; 

            

    

     

    
      	(vii)  	
              any
                discretionary account or similar account (other than an estates or
                trust)
                held by a dealer or other fiduciary organized, incorporated, or (if
                an
                individual) resident in the United States;
                and

            

    

     

    
      	(viii)  	
              any
                partnership or corporation if: organized or incorporated under the
                laws of
                any foreign jurisdiction; and formed by a U.S. person principally
                for the
                purpose of investing in securities not registered under the 1933
                Act,
                unless it is organized or incorporated, and owned, by accredited
                investors
                as defined in Rule 501(a) under the 1933 Act who are not natural
                persons,
                estates or trusts.

            

    

     

    
      	(l)  	
              it
                acknowledges and agrees that: (1) the Debentures and the Underlying
                Securities
                have not been registered under the provisions of the 1933 Act, and
                may not
                be transferred unless (A) subsequently registered thereunder or (B)
                the
                buyer shall have delivered to the Corporation an opinion of counsel,
                reasonably satisfactory in form, scope and substance to the Corporation,
                to the effect that the securities to be sold or transferred may be
                sold or
                transferred pursuant to an exemption from such registration; and
                (2) any
                sale of the shares of securities made in reliance on Rule 144 promulgated
                under the 1933 Act may be made only in accordance with the terms
                of said
                Rule and further, if said Rule is not applicable, any resale of such
                securities under circumstances in which the seller, or the person
                through
                whom the sale is made, may be deemed to be an underwriter, as that
                term is
                used in the 1933 Act, may require compliance with some other exemption
                under the 1933 Act or the rules and regulations of the United States
                Securities and Exchange Commission thereunder;
                and

            

    

     

    
      	(m)  	
              it
                acknowledges and agrees that, until such time as the Underlying Securities
                have been registered for resale under the 1933 Act and sold in accordance
                with an effective registration statement, certificates and other
                instruments representing the Debentures and the Underlying Securities
                shall bear a restrictive legend in substantially the following form
                (and a
                stop-transfer order may be placed against transfer of any such
                securities):

            

    

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND HAVE BEEN ISSUED IN RELIANCE
      ON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY
      REGULATION S PROMULGATED UNDER THE ACT. THE SECURITIES MAY NOT BE REOFFERED
      FOR
      SALE OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
      REGISTRATION STATEMENT UNDER THE ACT, OR PURSUANT TO AN EXEMPTION FROM THE
      REGISTRATION REQURIEMENTS OF THE ACT AFTER PROVIDING A LEGAL OPINION TO SUCH
      EFFECT IN FORM AND SUBSTANCE SATISFACTORY TO THE CORPORATION. HEDGING
      TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
      COMPLIANCE WITH THE ACT.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      -7-

       

    

    
      	(n)  	
              the
                Debentures have not been offered to the Subscriber in the United
                States,
                and the individual(s) making the order to purchase the Debentures
                and
                executing and delivering this Subscription Agreement on behalf of
                the
                Subscriber were not in the United States when the order was placed
                and
                this Subscription Agreement was executed and delivered;
                and

            

    

     

    
      	(o)  	
              the
                Subscriber agrees not to engage in hedging transactions with regard
                to the
                Debentures or Underlying Securities except in compliance with the
                1933
                Act; and

            

    

     

    
      	(p)  	
              the
                Subscriber acknowledges that the Corporation is required to refuse
                to
                register any transfer of the Debentures or Underlying Securities
                not made
                in accordance with the resale restrictions described in paragraph
                (l)
                above

            

    

     

    
      	(q)  	
              if
                it is a corporation, partnership, unincorporated association or other
                entity, it has the legal capacity to enter into and be bound by this
                Subscription Agreement and further certifies that all necessary approvals
                of directors, shareholders or otherwise have been given and obtained;
                and

            

    

     

    
      	(r)  	
              if
                it is an individual, it is of the full age of majority and is legally
                competent to execute this Subscription Agreement and take all action
                pursuant hereto; and

            

    

     

    
      	(s)  	
              this
                Subscription Agreement has been duly and validly authorized, executed
                and
                delivered by and constitutes a legal, valid, binding and enforceable
                obligation of the Subscriber; and

            

    

     

    
      	(t)  	
              in
                the case of a subscription by it for Debentures
                acting as agent for a Disclosed Beneficial Purchaser, it is duly
                authorized to execute and deliver this agreement and all other necessary
                documentation in connection with such subscription on behalf of such
                disclosed principal, each of whom is purchasing as principal for
                its own
                account, not for the benefit of any other person, and not with a
                view to
                the resale or distribution of all or any of the Debentures, and this
                Subscription Agreement has been duly authorized, executed and delivered
                by
                or on behalf of, and constitutes a legal, valid and binding agreement
                of,
                such disclosed principal, it acknowledges that the Corporation is
                required
                by law to disclose to certain regulatory authorities the identity
                of each
                beneficial purchaser of Debentures for whom it may be acting;
                and

            

    

     

    
      	(u)  	
              it
                has such knowledge in financial and business affairs as to be capable
                of
                evaluating the merits and risks of its investment and it, or, where
                not
                purchasing as principal, each disclosed principal is able to bear
                the
                economic risk of loss of its investment;
                and

            

    

     

    
      	(v)  	
              it
                has relied solely upon publicly available information relating to
                the
                Corporation and not upon any verbal or written representation as
                to fact
                or otherwise made by or on behalf of the Corporation or the Agent,
                such
                publicly available information having been delivered to the Subscriber
                without independent investigation or verification by the Agent, and
                agrees
                that the Agent and Agent's counsel assume no responsibility or liability
                of any nature whatsoever for the accuracy, adequacy or completeness
                of the
                publicly available information or as to whether all information concerning
                the Corporation required to be disclosed by the Corporation has been
                generally disclosed and acknowledges that the Corporation's counsel
                and
                the Agent's counsel are acting solely as counsel to the Corporation
                and
                the Agent, respectively, and not as counsel to the Subscriber;
                and

            

    

     

    
      	(w)  	
              it
                understands that Debentures
                are being offered for sale only on a "private placement" basis and
                that
                the sale and delivery of the Debentures
                is
                conditional upon such sale being exempt from the requirements as
                to the
                filing of a prospectus or delivery of an offering memorandum or upon
                the
                issuance of such orders, consents or approvals as may be required
                to
                permit such sale without the requirement of filing a prospectus or
                delivering an offering memorandum;
                and

            

    

     

    
      	(x)  	
              if
                required by applicable securities legislation, regulations, rules,
                policies or orders or by any securities commission, stock exchange
                or
                other regulatory authority, the Subscriber will execute, deliver,
                file and
                otherwise assist the Corporation in filing, such reports, undertakings
                and
                other documents with respect to the issue of the Debentures
                as
                may be required (including, without limitation): (a) this duly completed
                and executed Subscription Agreement; (b) if the Subscriber is an
                "accredited investor", a fully executed and completed Representation
                Letter in the form attached as Exhibit
                1;
                and (c) if the Subscriber is a close personal friend or close business
                associate of a director, executive officer, control person or founder
                (as
                defined in NI 45-106) of the Corporation, or of an affiliate (as
                defined
                in NI 45-106) of the Corporation, a fully executed Questionnaire
                in the
                form attached as Exhibit
                2;
                and

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    -8-

     

     

    
      	(y)  	
              it
                acknowledges that the certificates representing the Debentures and
                Underlying Securities will bear a restrictive legend in accordance
                with
                applicable securities legislation; and

            

    

     

    
      	(z)  	
              it
                will not resell the Debentures
                or Underlying
                Securities except in accordance with the provisions of applicable
                securities legislation and stock exchange rules, if applicable, in
                the
                future; and

            

    

     

    
      	(aa)  	
              it
                does not act jointly or in concert with any other subscriber for
                Debentures for the purposes of acquisition of the Debentures;
                and

            

    

     

    
      	(bb)  	
              the
                entering into of this Subscription Agreement and the transactions
                contemplated hereby will not result in a violation of any of the
                terms or
                provisions of any law applicable to the Subscriber, or if the Subscriber
                is not a natural person, any of the Subscriber's constating documents,
                or
                any agreement to which the Subscriber is a party or by which it is
                bound;
                and

            

    

     

    
      	(cc)  	
              none
                of the funds the Subscriber is using to purchase the Debentures
                are, to the knowledge of the Subscriber, proceeds obtained or derived,
                directly or indirectly, as a result of illegal activities and the
                funds
                representing the aggregate subscription amount which will be advanced
                by
                the Subscriber hereunder will not represent proceeds of crime for
                the
                purposes of the Proceeds
                of Crime (Money Laundering) Act
                (Canada) and the Subscriber acknowledges that the Corporation or
                the Agent
                may in the future be required by law to disclose the Subscriber's
                name and
                other information relating to this Subscription Agreement and the
                Subscriber's subscription hereunder, on a confidential basis, to
                regulatory authorities pursuant to the Proceeds
                of Crime (Money Laundering) Act
                (Canada) and (i) to the best of the Subscriber's knowledge none of
                the
                subscription funds to be provided by the Subscriber (A) have been
                or will
                be derived from or related to any activity that is deemed criminal
                under
                the laws of Canada, the United States of America, or any other
                jurisdiction, or (B) are being tendered on behalf of a person or
                entity
                who has not been identified to the Subscriber, and (ii) it shall
                promptly
                notify the Corporation and the Agent if the Subscriber discovers
                that any
                of such representations ceases to be true, and to provide the Corporation
                and the Agent with appropriate information in connection therewith;
                and

            

    

     

    
      	(dd)  	
              the
                Subscriber acknowledges that the Debentures
                are being purchased pursuant to exemptions from the prospectus
                requirements contained in applicable securities legislation and,
                as a
                result:

            

    

     

    
      	(i)  	
              the
                Subscriber is restricted from using most of the civil remedies available
                under applicable securities
                legislation;

            

    

    

    
      	(ii)  	
              the
                Subscriber may not receive information that would otherwise be required
                to
                be provided to the Subscriber under applicable securities legislation;
                and

            

    

    

    
      	(iii)  	
              the
                Corporation is relieved from certain obligations that would otherwise
                apply under applicable securities legislation;
                and

            

    

    

    
      	(ee)  	
              the
                Subscriber acknowledges that it has been encouraged to and should
                obtain
                independent legal and investment advice with respect to its subscription
                for these Debentures
                and accordingly, has been independently advised as to the meanings
                of all
                terms contained herein relevant to the Subscriber for purposes of
                giving
                representations, warranties and covenants under this Subscription
                Agreement.

            

    

     

    Registration
      Rights

     

    4.  Corporation
      Registration.
      The
      Subscribers shall be entitled to "piggyback" registration rights on all
      registrations of the Corporation or on any demand registrations of any other
      investor subject to the right, however, of the Corporation and its underwriters
      to reduce the number of shares proposed to be registered pro rata in view of
      market conditions, and subject to complete cutback in the case of the
      Corporation’s initial public offering. If the Subscribers are so limited,
      however, no party shall sell shares in such registration other than the
      Corporation or the Subscriber, if any, invoking the demand registration. In
      the
      event that the Corporation exercises its rights to convert the Debentures into
      Common Shares, no shareholder of the Corporation shall be granted registration
      rights pari passu with or senior to those rights granted to the Subscribers
      holding such Common Shares without the consent of the holders of 50% such Common
      Shares.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      -9-

       

    

    5.  Expenses.
      The
      Corporation shall bear registration expenses (exclusive of underwriting
      discounts and commissions) of all such demands, piggybacks and registrations
      on
      Form S-3 (including the expense of a single counsel to the selling shareholders,
      which counsel shall also be counsel to the Corporation unless there is a
      conflict of interest with respect to the representation of any selling
      shareholder or the underwriters otherwise object.

     

    6.  Transfer
      of Rights.
      The
      registration rights may be transferred to (i) any partner or retired partner
      of
      any holder that is a partnership, (ii) any family member or trust for the
      benefit of any individual holder, or (iii) any transferee who acquires at least
      100,000 Underlying Securities, provided the Corporation is given written notice
      thereof.

     

    7.  Termination
      of Rights:. The
      obligation of the Corporation under Section 4 shall not apply to any shares
      of
      the Corporation that are eligible for immediate resale pursuant to Rule 144(k)
      under the 1933 Act or are otherwise eligible for resale pursuant to Rule 144(k)
      within a period of three months.

     

    8.  Other
      Provisions.
      Other
      provisions shall be contained in the Agency Agreement (as defined herein) with
      respect to registration rights as are reasonable, including
      cross-indemnification, the period of time in which the registration statement
      shall be kept effective, and underwriting arrangements. Registration rights
      provisions may be amended or waived solely with the consent of the holders
      of
      50% of the Underlying Securities issued or issuable pursuant to the conversion
      of the Debentures.

     

    9.  Reporting
      Issuer Status.
      The
      Corporation shall be required to make an application in the Province of Alberta
      for exemptive relief from the requirements of Canadian Securities legislation
      that the first trade in common shares held by Canadian subscribers which were
      acquired on conversion of the Debentures be exempt from the prospectus and
      registration requirements of the applicable Canadian Securities legislation.
      In
      the event such exemptive relief is not granted, the Corporation shall be
      required to file a prospectus or otherwise become a reporting issuer in the
      Province of Alberta concurrently with or promptly following the completion
      of
      the Corporation's initial public offering in the United States, and in any
      event
      within eight months of the date of the Closing Date, and to maintain its
      reporting issuer status in the Province of Alberta for a period of two years
      thereafter.

     

    Closing

     

    10.  The
      Subscriber agrees to deliver the Agent, not later than 4:30 p.m. (Calgary time)
      on the day that is two business days before the Closing Date (as defined below):
      (a) this duly completed and executed agreement; (b) if applicable, a duly
      executed and completed representation letter in the form of Exhibit 1; (c)
      if a
      applicable, a duly completed Close Personal Friend / Close Business Associate
      Questionnaire in the form of Exhibit 2; (d) a cheque payable to "J.F. Mackie
      and
      Company Ltd.: dated no later than the Closing Date, or such other manner of
      payment acceptable to the Corporation, for an amount equal to the aggregate
      purchase price of the Debentures subscribed for hereunder; and (e) any
      additional documentation that may be reasonably requested by the Agent or the
      Corporation hereunder. 

     

    11.  The
      sale
      of the Debentures pursuant to this Subscription Agreement will be completed
      at
      the offices of Heenan
      Blaikie LLP
      at
9:00
      a.m.
      (Calgary time) or such other time and place as the Corporation and the Agent
      may
      agree (the "Closing
      Time")
      on
      October 3, 2006 or such other date as the Corporation and the Agent may agree
      (the "Closing
      Date").
      At
      the Closing Time, the Agent shall deliver to the Corporation all completed
      subscription agreements, including this Subscription Agreement, and the
      aggregate subscription price against delivery by the Corporation of certificates
      representing the Debentures.

     

    12.  The
      Corporation and the Agent shall be entitled to rely on delivery of a facsimile
      copy of executed subscriptions, and acceptance by the Corporation of such
      facsimile subscriptions shall be legally effective to create a valid and binding
      agreement between the Subscriber and the Corporation in accordance with the
      terms hereof. Notwithstanding the foregoing, the Subscriber shall deliver
      originally executed copies of the documents set forth in the Delivery
      Instructions attached to this Subscription Agreement to the Corporation within
      two business days of the Closing Date. In addition, this Subscription Agreement
      may be executed in counterparts, each of which shall be deemed to be an original
      and all of which shall constitute one and the same document.

     

    General

     

    13.  The
      Subscriber agrees that the representations, warranties and covenants of the
      Subscriber herein will be true and correct both as of the execution of this
      Subscription Agreement and as of the Closing Time and will survive the
      completion of the issuance of the Debentures.
      The
      representations, warranties and covenants of the Subscriber herein are made
      with
      the intent that 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      -10-

       

    

    they
      be
      relied upon by the Corporation and the Agent in determining the eligibility
      of a
      purchaser of Debentures and the Subscriber agrees to indemnify the Corporation
      and the Agent and their respective directors, officers, partners, affiliates,
      shareholders, partners, employees, advisors, agents and representatives against
      all losses, claims, costs, expenses and damages or liabilities which any of
      them
      may suffer or incur which are caused or arise from a breach thereof. The
      Subscriber undertakes to immediately notify the Corporation at Red Mile
      Entertainment Inc., 4000
      Bridgeway, Suite 101, Sausalito, California 95965
      Attention: Chester Aldridge (Fax Number: (415)
      339-4250)
      and the
      Agent at J.F. Mackie & Company Ltd., 1550, 335 - 8th Avenue S.W., Calgary,
      Alberta, Attention: J. Scott Riddell, Managing Director (Fax Number: (403)
      218-6376), of any change in any statement or other information relating to
      the
      Subscriber set forth herein which takes place prior to the Closing
      Time.

     

    14.  The
      Subscriber acknowledges that the Corporation and the Agent have entered into,
      or
      will enter into prior to the Closing Date, an agreement (the "Agency
      Agreement")
      pursuant to which the Agent, in connection with the issue and sale of the
      Debentures, will receive a fee from the Corporation. The Subscriber hereby
      irrevocably authorizes J.F. Mackie: (a) to act as its representative at the
      closing and to execute in its name and on its behalf all closing receipts and
      documents required; (b) to complete or correct any errors or omissions in
      any form or document provided by the Subscriber; (c) to receive on its
      behalf certificates representing the Debentures
      purchased
      under this Subscription Agreement; (d) to approve any opinions,
      certificates or other documents addressed to the Subscriber; (e) to waive,
      in whole or in part, any representations, warranties, covenants or conditions
      for the benefit of the Subscriber and contained in the Agency Agreement; (f)
      to
      register or permit the registration of the Debentures
      purchased
      hereunder by way of one or more certificates registered in the name of any
      or
      all of the Agent and/or in the name of each subscriber to the Offering and/or
      in
      the name of such other nominee or nominees as the Corporation and the Agent
      may
      agree; and (g) to exercise any rights of termination contained in the Agency
      Agreement.

     

    15.  The
      terms
      and provisions of this Subscription Agreement are binding upon and enure to
      the
      benefit of the Subscriber and the Corporation and their respective heirs,
      executors, administrators, successors and assigns; provided that, except for
      the
      assignment by a Subscriber who is acting as nominee or agent to a disclosed
      principal and as otherwise herein provided, this Subscription Agreement is
      not
      assignable by any party without prior written consent of the other
      parties.

     

    16.  The
      Subscriber acknowledges and agrees that all costs incurred by the Subscriber
      (including any fees and disbursements of any special counsel retained by the
      Subscriber) relating to the sale of the Debentures
      to
      the
      Subscriber shall be borne by the Subscriber.

     

    17.  The
      contract arising out of this Subscription Agreement and all documents relating
      thereto, which by common accord has been or will be drafted in English, shall
      be
      governed by and construed in accordance with the laws of the Province of Alberta
      and the federal laws of Canada applicable therein, with the exception of those
      principles relating to conflict of laws. The parties irrevocably attorn to
      the
      exclusive jurisdiction of the courts of the Province of Alberta. The parties
      hereto confirm their express wish that this Subscription Agreement and all
      documents and agreements directly or indirectly related thereto be drawn up
      in
      the English language. Les parties reconnaissent leur volonté expresse que la
      présente convention de souscription ainsi que tous les documents et contrats s’y
      rattachant directment ou indirectement soient rédigés en langue
      anglaise.

     

    18.  Time
      is
      of the essence hereof.

     

    19.  This
      Subscription Agreement represents the entire agreement of the parties hereto
      relating to the subject matter hereof and there are no representations,
      covenants or other agreements relating to the subject matter hereof except
      as
      stated or referred to herein. 

     

    20.  The
      covenants, representations and warranties contained herein shall survive the
      closing of the transactions contemplated hereby.

     

    21.  Except
      in
      respect of Appendix A to Exhibit 1 hereto or otherwise in this Subscription
      Agreement (including attachments), references to "$" or "USD $" are to United
      States dollars. 

     

    22.  The
      Subscriber acknowledges that this Subscription Agreement and the Exhibits hereto
      require the Subscriber to provide certain personal information to the
      Corporation and the Agent. Such information is being collected by the
      Corporation and the Agent for the purposes of completing the Offering, which
      includes, without limitation, determining the Subscriber's eligibility to
      purchase the Debentures under applicable securities legislation, preparing
      and
      registering any certificates representing securities to be issued to the
      Subscriber and completing filings required by any stock exchange or securities
      regulatory authority. The Subscriber's personal 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    -11-

     

     

    information
      may be disclosed by the Corporation or the Agent to: (a) stock exchanges or
      securities regulatory authorities, (b) the registrar and transfer agent of
      the
      Corporation, and (c) any of the other parties involved in the Offering,
      including legal counsel to the Corporation and the Agent. By executing this
      Subscription Agreement, the Subscriber consents to the foregoing collection,
      use
      and disclosure of the Subscriber's personal information. The Subscriber also
      consents to the filing of copies or originals of any of the Subscriber's
      documents described herein
      as
      may be
      required to be filed with any stock exchange or securities regulatory authority
      in connection with the transactions contemplated hereby. An officer of the
      Corporation is available to answer questions about the collection of personal
      information by the Corporation at the address provided in Section 12.

     

    23.  The
      invalidity, illegality or unenforceability of any provision of this Subscription
      Agreement shall not affect the validity, legality or enforceability of any
      other
      provision hereof.

     

    24.  In
      this
      Agreement, words importing the singular number shall include the plural and
      vice
      versa and words importing the masculine gender shall include the feminine and
      neuter genders and vice versa.

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

     

    EXHIBIT
      1

     

    REPRESENTATION
      LETTER

     

    (FOR
      ACCREDITED INVESTORS)

     

    TO: Red
      Mile Entertainment Inc. (the "Corporation")

     

    
      	
              AND
                TO:

            	
              J.F.
                Mackie & Company Ltd. (the
                "Agent")

            

    

     

    In
      connection with the purchase of Debentures of the Corporation ("Debentures")
      by the
      undersigned subscriber or, if applicable, the principal on whose behalf the
      undersigned is purchasing as agent (the "Subscriber"
      for the
      purposes of this Exhibit 1), the Subscriber hereby represents, warrants,
      covenants and certifies to the Corporation and the Agent that:

     

    1.  The
      Subscriber is resident in or is subject to the laws of a jurisdiction of
      Canada;

     

    2.  The
      Subscriber is purchasing the Debentures as principal for its own
      account;

     

    3.  The
      Subscriber is an "accredited investor" within the meaning of National Instrument
      45-106 entitled "Prospectus and Registration Exemptions" by virtue of satisfying
      the indicated criterion as set out in Appendix "A" to this Representation
      Letter; and

     

    4.  The
      Subscriber was not created or used solely to purchase or hold securities as
      an
      accredited investor as described in paragraph (m) of the attached Appendix
      "A"
      of this Exhibit 1; and

     

    5.  Upon
      execution of this Exhibit 1 by the Subscriber, this Exhibit 1 shall be
      incorporated into and form a part of the Subscription Agreement.

     

    Dated:
      _________________________, 2006

     

     

    Print
      name of Subscriber

    

    By:  

    Signature

    

     

    Print
      name of Signatory (if different from Subscriber)

    

     

    Title

    

     

    

     

    IMPORTANT:
      PLEASE INITIAL APPENDIX "A" ON THE NEXT PAGE

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    APPENDIX
      "A" TO EXHIBIT 1

     

    Accredited
      Investor
      -
      (defined in National Instrument 45-106) means:

     

    NOTE:
      The investor must initial beside the applicable portion of the above
      definition.

     

    

      
        	 	
                (a)  a
                  Canadian financial institution, or an authorized foreign bank named
                  in
                  Schedule III of the Bank
                  Act
                  (Canada),

                 

              
	 	
                (b)  the
                  Business Development Bank of Canada incorporated under the Business
                  Development Bank of Canada Act
                  (Canada),

                 

              
	 	
                (c)  a
                  subsidiary of any person or company referred to in paragraphs (a)
                  or (b),
                  if the person or company owns all of the voting securities of the
                  subsidiary, except the voting securities required by law to be
                  owned by
                  directors of that subsidiary,

                 

              
	 	
                (d)  a
                  person registered under the securities legislation of a jurisdiction
                  of
                  Canada as an adviser or dealer, other than a person registered
                  solely as a
                  limited market dealer under one or both of the Securities
                  Act
                  (Ontario) or the Securities
                  Act
                  (Newfoundland and Labrador),

                 

              
	 	
                (e)  an
                  individual registered or formerly registered under the securities
                  legislation of a jurisdiction of Canada as a representative of
                  a person
                  referred to in paragraph (d),

                 

              
	 	
                (f)  the
                  Government of Canada or a jurisdiction of Canada, or any crown
                  corporation, agency or wholly owned entity of the Government of
                  Canada or
                  a jurisdiction of Canada,

                 

              
	 	
                (g)  a
                  municipality, public board or commission in Canada and a metropolitan
                  community, school board, the Comité de gestion de la taxe scolaire de
                  l’île
                  de Montréal or an intermunicipal management board in Québec,

                 

              
	 	
                (h)  any
                  national, federal, state, provincial, territorial or municipal
                  government
                  of or in any foreign jurisdiction, or any agency of that
                  government,

                 

              
	 	
                (i)  a
                  pension fund that is regulated by either the Office of the Superintendent
                  of Financial Institutions (Canada) or a pension commission or similar
                  regulatory authority of a jurisdiction of Canada,

                 

              
	 	
                (j)  an
                  individual who, either alone or with a spouse, beneficially owns,
                  directly
                  or indirectly, financial assets having an aggregate realizable
                  value that
                  before taxes, but net of any related liabilities, exceeds
                  $1,000,000,

                 

              
	 	
                (k)  an
                  individual whose net income before taxes exceeded $200,000 in each
                  of the
                  two most recent calendar years or whose net income before taxes
                  combined
                  with that of a spouse exceeded $300,000 in each of the two most
                  recent
                  calendar years and who, in either case, reasonably expects to exceed
                  that
                  net income level in the current calendar year,

                 

              
	 	
                (l)  an
                  individual who, either alone or with a spouse, has net assets of
                  at least
                  $5,000,000,

                 

              
	 	
                (m)  a
                  person, other than an individual or investment fund, that has net
                  assets
                  of at least $5,000,000 as shown on its most recently prepared financial
                  statements,

                 

              
	 	
                (n)  an
                  investment fund that distributes or has distributed its securities
                  only
                  to: (i) a person that is or was an accredited investor at the time
                  of the
                  distribution; (ii) a person that acquires or acquired securities
                  in the
                  circumstances referred to in sections 2.10 [Minimum
                  amount investment],
                  and 2.19 [Additional
                  investment in investment funds]
                  of National Instrument 45-106; or (iii) a person described in paragraph
                  (i) or (ii) that acquires or acquired securities under section
                  2.18
                  [Investment
                  fund reinvestment]
                  of National Instrument 45-106,

                 

              
	 	
                (o)  an
                  investment fund that distributes or has distributed securities
                  under a
                  prospectus in a jurisdiction of Canada for which the regulator
                  or, in
                  Québec, the securities regulatory authority, has issued a
                  receipt,

                 

              

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      -3-

       

    

    

      
        	 	
                (p)  a
                  trust company or trust corporation registered or authorized to
                  carry on
                  business under the Trust
                  and Loan Companies Act
                  (Canada) or under comparable legislation in a jurisdiction of Canada
                  or a
                  foreign jurisdiction, acting on behalf of a fully managed account
                  by the
                  trust company or trust corporation, as the case may be,

                 

              
	 	
                (q)  a
                  person acting on behalf of a fully managed account managed by that
                  person,
                  if that person (i) is registered or authorized to carry on business
                  as an
                  adviser or the equivalent under the securities legislation of a
                  jurisdiction of Canada or a foreign jurisdiction, and (ii) in Ontario,
                  is
                  purchasing a security that is not a security of an investment
                  fund,

                 

              
	 	
                (r)  a
                  registered charity under the
                  Income Tax Act
                  (Canada) that, in regard to the trade, has obtained advice from
                  an
                  eligibility adviser or an adviser registered under the securities
                  legislation of the jurisdiction of the registered charity to give
                  advice
                  on the securities being traded,

                 

              
	 	
                (s)  an
                  entity organized in a foreign jurisdiction that is analogous to
                  any of the
                  entities referred to in paragraphs (a) to (d) or paragraph (i)
                  in form and
                  function, 

                 

              
	 	
                (t)  a
                  person in respect of which all of the owners of interests, direct,
                  indirect or beneficial, except the voting securities required by
                  law to be
                  owned by directors, are persons that are accredited
                  investors,

                 

              
	 	
                (u)  an
                  investment fund that is advised by a person registered as an adviser
                  or a
                  person that is exempt from registration as an adviser, or

                 

              
	 	
                (v)  a
                  person that is recognized or designated by the securities regulatory
                  authority or, except in Ontario and Québec, the regulator as (i) an
                  accredited investor, or (ii) an exempt purchaser in Alberta or
                  British
                  Columbia after September 14, 2005.

                 

              

      

    

    For
      the purposes hereof:

     

    
      	(a)  	
              "consultant"
                means, for an issuer, a person, other than an employee, executive
                officer,
                or director of the issuer or of a related entity of the issuer,
                that

            

    

     

    
      	(i)  	
              is
                engaged to provide services to the issuer or a related entity of
                the
                issuer, other than services provided in relation to a
                distribution;

            

    

     

    
      	(ii)  	
              provides
                the services under a written contract with the issuer or a related
                entity
                of the issuer; and

            

    

     

    
      	(iii)  	
              spends
                or will spend a significant amount of time and attention on the affairs
                and business of the issuer or a related entity of the issuer and
                includes,
                for an individual consultant, a corporation of which the individual
                consultant is an employee or shareholder, and a partnership of which
                the
                individual consultant is an employee or
                partner;

            

    

     

    
      	(b)  	
              "control
                person"
                has the same meaning ascribed to that term in securities legislation
                except in Manitoba, Newfoundland and Labrador, Northwest Territories,
                Nova
                Scotia, Nunavut, Ontario, Prince Edward Island and Québec, where "control
                person" means any person that holds or is one of a combination of
                persons
                or companies that holds:

            

    

     

    
      	(i)  	
              a
                sufficient number of any of the securities of an issuer so as to
                affect
                materially the control of the issuer,
                or

            

    

     

    
      	(ii)  	
              more
                than 20% of the outstanding voting securities of an issuer except
                where
                there is evidence showing that the holding of those securities does
                not
                affect materially the control of that
                issuer;

            

    

     

    
      	(c)  	
              "director"
                means:

            

    

     

    
      	(i)  	
              a
                member of the board of directors of a company or an individual who
                performs similar functions for a company,
                and

            

    

     

    
      	(ii)  	
              with
                respect to a person that is not a company, an individual who performs
                functions similar to those of a director of a
                company;

            

    

     

    
      	(d)  	
              "eligibility
                adviser"
                means

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    -4-

     

     

    
      	(i)  	
              a
                person that is registered as an investment dealer or in an equivalent
                category of registration under the securities legislation of the
                jurisdiction of a purchaser and authorized to give advice with respect
                to
                the type of security being distributed,
                and

            

    

     

    
      	(ii)  	
              in
                Saskatchewan or Manitoba, also means a lawyer who is a practicing
                member
                in good standing with a law society of a jurisdiction of Canada or
                a
                public accountant who is a member in good standing of an institute
                or
                association of chartered accountants, certified general accountants
                or
                certified management accountants in a jurisdiction of Canada provided
                that
                the lawyer or public accountant must
                not:

            

    

     

    
      	(A)  	
              have
                a professional, business or personal relationship with the issuer,
                or any
                of its directors, executive officers, founders, or control persons,
                and

            

    

     

    
      	(B)  	
              have
                acted for or been retained personally or otherwise as an employee,
                executive officer, director, associate or partner of a person or
                company
                that has acted for or been retained by the issuer or any of its directors,
                executive officers, founders or control persons within the previous
                12
                months;

            

    

     

    
      	(e)  	
              "executive
                officer"
                means, for an issuer, an individual who
                is

            

    

     

    
      	(i)  	
              a
                chair, vice-chair or president,

            

    

     

    
      	(ii)  	
              a
                vice-president in charge of a principal business unit, division or
                function including sales, finance or
                production,

            

    

     

    
      	(iii)  	
              an
                officer of the issuer or any of its subsidiaries and who performs
                a
                policy-making function in respect of the issuer,
                or

            

    

     

    
      	(iv)  	
              performing
                a policy-making function in respect of the
                issuer;

            

    

     

    
      	(f)  	
              "financial
                assets"
                means cash, securities or a contract of insurance, a deposit or an
                evidence of a deposit that is not a security for the purposes of
                securities legislation;

            

    

     

    
      	(g)  	
              "founder"
                means, in respect of an issuer, a person
                who,

            

    

     

    
      	(i)  	
              acting
                alone, in conjunction, or in concert with one or more persons, directly
                or
                indirectly, takes the initiative in founding, organizing or substantially
                reorganizing the business of the issuer,
                and

            

    

     

    
      	(ii)  	
              at
                the time of the trade is actively involved in the business of the
                issuer;
                

            

    

     

    
      	(h)  	
              "fully
                managed account"
                means an account of a client for which a person makes the investment
                decisions if that person has full discretion to trade in securities
                for
                the account without requiring the client’s express consent to a
                transaction;

            

    

     

    
      	(i)  	
              "individual"
                means a natural person, but does not
                include

            

    

     

    
      	(i)  	
              a
                partnership, unincorporated association, unincorporated syndicate,
                unincorporated organization or a trust,
                or

            

    

     

    
      	(ii)  	
              a
                natural person in the person’s capacity as trustee, executor,
                administrator or other legal
                representative;

            

    

     

    
      	(j)  	
              "mutual
                fund"
                includes an issuer of securities that entitles the holder to receive
                on
                demand or within a specified period after demand, an amount computed
                by
                reference to the value of a proportionate interest in the whole or
                in part
                of the net assets, including a separate fund or trust account, of
                the
                issuer of the securities;

            

    

     

    
      	(k)  	
              "non-redeemable
                investment fund"
                means an issuer,

            

    

     

    
      	(i)  	
              whose
                primary purpose is to invest money provided by its security
                holders,

            

    

     

    
      	(ii)  	
              that
                does not invest, (i) for the purpose of exercising or seeking to
                exercise
                control of an issuer, other than an issuer that is a mutual fund
                or a
                non-redeemable investment fund, or (ii) for the purpose of being
                actively
                involved in the management of any issuer in which it invests, other
                than
                an issuer that is a mutual fund or a non-redeemable investment fund,
                and

            

    

     

    
      	(iii)  	
              that
                is not a mutual fund; 

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      -5-

       

    

    
      	(l)  	
              "person"
                includes:

            

    

     

    
      	(i)  	
              an
                individual,

            

    

     

    
      	(ii)  	
              a
                corporation,

            

    

     

    
      	(iii)  	
              a
                partnership, trust, fund and an association, syndicate, organization
                or
                other organized group of persons, whether incorporated or not,
                and

            

    

     

    
      	(iv)  	
              an
                individual or other person in that person’s capacity as a trustee,
                executor, administrator or personal or other legal representative;
                and

            

    

     

    
      	(m)  	
              "related
                liabilities"
                means:

            

    

     

    
      	(i)  	
              liabilities
                incurred or assumed for the purpose of financing the acquisition
                or
                ownership of financial assets; or

            

    

     

    
      	(ii)  	
              liabilities
                that are secured by financial
                assets.

            

    

     

    All
      monetary references set forth in Appendix A to Exhibit 1 are in Canadian
      Dollars.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    -6-

     

    EXHIBIT
      2

     

    CLOSE
      PERSONAL FRIEND / CLOSE BUSINESS ASSOCIATE QUESTIONNAIRE

     

    To
      be
      completed by Subscribers to whom section 3(e)(iii)(D) or (E)) of the
      Subscription Agreement applies.

     

    

     

    Name
      of
      director, executive officer, control person or founder

    

    

     

    Length
      of
      relationship

    

    

     

    Details
      of relationship or prior business dealings

    

    

     

    

    

    

     

    

    

    The
      undersigned understands that the Corporation is relying on this information
      in
      determining to sell securities to the undersigned in a manner exempt from the
      registration and prospectus requirements of applicable securities
      laws.

    

    

    Dated:
      _________________________, 2006

     

    

     

    Print
      name of Subscriber

    

    By:  

    Signature

    

                                  

    Print
      name of Signatory (if different from Subscriber)

    

     

    Title

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    -7-

     

    EXHIBIT
      3

     

    TERMS
      OF CONVERTIBLE DEBENTURES

     

    
      	
              OFFERING
                TERMS

               

            
	
              Amount
                Raised:

            	
              Minimum
                of USD$5,000,000, Maximum of USD$10,000,000, 5.5% Senior Secured
                Convertible Debentures each Debenture having a principle amount of
                $1000
                (“Par”).

               

            
	
              Closing
                Date:

               

            	
              Payment
                for, and delivery of the Debentures shall be made on or about October
                3,
                2006 or any other date acceptable to the Corporation and the Agent
                (the
                “Closing”).

               

            
	
              Conversion
                Price:

            	
              The
                Debentures shall convert to Common Shares in the capital stock of
                the
                Corporation (the “Common Shares”) at a ratio of $1.75 per Common Share
                (the “Conversion Price”) at any time at option of the holder after a
                minimum non-conversion period of 12 months (the “Minimum Term”) from the
                issue date (the “Issue Date”). Investors shall be entitled to accrued
                unpaid interest from the last interest payment date to the date of
                conversion. 

               

            
	
              Term:

               

            	
              The
                Debentures shall mature on the second anniversary of the Issue Date
                (the
                “Maturity Date”).

               

            
	
              Payment
                at Maturity:

            	
              On
                the Maturity Date, the Corporation shall repay the Debentures in
                full with
                accrued interest. The Corporation shall retain the right to make
                this
                payment in cash, in kind, or in cash and in kind with Common Shares
                of the
                Corporation based on the 20 day volume weighted average trading price
                of
                the Corporation’s Common Shares for the 20 days immediately prior to the
                Maturity Date (subject to In Kind Limitations, as defined herein).
                In the
                event the Corporation exercises this right in kind, all Common Shares
                shall be given Piggyback Registration rights as defined
                herein.

               

            
	
              Coupon:

            	
              5.5%
                per annum non-compounded, payable semi-annually in cash, or in kind
                based
                on the 20 day volume weighted average trading price of the Corporation’s
                Common Shares immediately prior to the coupon payment date (subject
                to In
                Kind Limitations, as defined herein). Coupon payments will occur
                semi-annually on the dates of March 15 and September 15 of each year
                until
                Redemption or the Maturity Date. In the event the Corporation makes
                payment in kind, all Common Shares shall be given Piggyback Registration
                rights as defined herein.

               

            

    

    
      	
              Collateral:

            	
              All
                assets of the Corporation and its operating subsidiaries, except
                for items
                related to the Accounts Receivables of the Corporation, until the
                Debenture is either converted to Common Shares or repaid in
                full.

               

            
	
              Redemption:

            	
              After
                the Minimum Term, the Corporation shall retain the right to convert
                the
                Debentures into Common Shares at the Conversion Price at any time
                so long
                as Corporation’s Common Shares have traded at a minimum volume weighted
                average price of $3.00/share for 20 consecutive trading days (subject
                to
                In Kind Limitations, as defined herein). Such right must be exercised
                by
                the Corporation within 5 days of the 20 trading day period. In the
                event
                the Corporation exercises this right, all Common Shares shall be
                given
                Piggyback Registration rights as defined herein.
                

               

              The
                Corporation shall also retain the option to redeem the Debentures
                at a
                redemption price equal to 115% of their Par value, plus any accrued
                and
                unpaid interest, payable in cash at any time after the Minimum Term
                so
                long as Corporation’s Common Shares have traded at a minimum volume
                weighted average price of $3.00/share for 20 consecutive trading
                days
                (subject to In Kind Limitations, as defined herein). If the Corporation
                chooses to redeem the Debentures equal to 115% of their Par value,
                the
                Corporation must give written notice to the holders of the Debentures
                and
                allow the holders the right to convert the Debentures into the
                Corporation's Common Shares at the Conversion Price within ten days
                of being notified of Corporation’s intent to redeem. 

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      -8-

       

    

    

      
        	
                In
                  Kind Limitations:

                 

              	
                In
                  order for the Corporation to maintain its right to pay Coupon payments,
                  and/or Redemption proceeds that are payable with the Corporation’s Common
                  Shares, the Corporation must be publicly listed and have freely
                  tradable
                  Common Shares. For clarity, the holder of the Debentures will still
                  maintain the right to convert Debentures into Common Shares regardless
                  if
                  the Corporation’s Common Shares are publicly trading after the Minimum
                  Term. 

                 

              
	
                Change
                  of Control:

                 

              	
                In
                  the event of the acquisition of voting control or direction over
                  50% or
                  more of Corporation’s Common Shares before the Minimum Term, each holder
                  of Debentures will have the right to require the Corporation (including
                  any successor entity to the Corporation) to make an offer, within
                  20 days
                  following the consummation of the change of control to purchase
                  for cash,
                  such holder’s outstanding Debentures then outstanding at a price equal to
                  110.0% of the principal amount thereof plus any accrued interest.
                  

                 

              
	
                Anti-Dilution:

                 

              	
                Proportional
                  adjustments of the conversion rights attached to the Debentures
                  will be
                  made for stock splits, stock dividends, recapitalizations and the
                  like.
                  Notwithstanding the foregoing, for greater certainty, no anti-dilution
                  adjustment would be made on account of any new issuance of securities
                  of
                  the Corporation including (i) upon conversion of the Debentures
                  issued as
                  part of this Offering, or (ii) any issuance of stock options pursuant
                  to
                  the Corporation’s approved stock option plan, so long as the "option pool"
                  available for issuance pursuant to such stock option plan does
                  not exceed
                  ten percent (10%) of the Common Shares, calculated on a fully-diluted
                  basis as of the Closing Date, or (iii) any issuance of securities
                  issued
                  in an additional financing, however subject to applicable anti-dilution
                  laws in Canada and the United States, or (iv) securities issued
                  in
                  connection with mergers or acquisitions. 

                 

              
	
                Liens
                  & Indebtedness:

                 

              	
                The
                  Corporation will repay all outstanding indebtedness to its lenders,
                  if
                  any, out of the proceeds of the Debenture funding, and remove all
                  registrations, liens or other charges against the Corporation at
                  closing.

                 

              
	
                Registration
                  Rights:

                 

              	
                Holders
                  will have full rights to Piggyback Registration after the Minimum
                  Term is
                  met, subject to customary underwriter's cutbacks, as may be required.
                  If
                  at any time the Corporation proposes to file a Registration Statement
                  after the Minimum Term is met, whether or not for sale for the
                  Corporation’s own account, on a form and in a manner that would permit
                  registration of Registrable Securities, Corporation shall give
                  to the
                  Agent and the holders of Debentures, written notice of such proposed
                  filing at least ten (10) days before the anticipated filing. The
                  notice
                  referred to in the preceding sentence shall offer Holder the opportunity
                  to register such amount of Registrable Securities as Holder may
                  request (a
                  "Piggyback Registration"), subject to customary underwriter's cutbacks,
                  as
                  may be required..4.5 Form of Debenture issued to the investor

    UNLESS
      PERMITTED UNDER SECURITIES LEGISLATION THE HOLDER OF THE SECURITIES REPRESENTED
      BY THIS CERTIFICATE SHALL NOT TRADE THESE SECURITIES BEFORE
THE
      DATE THAT IS 4 MONTHS AND A DAY AFTER THE LATER OF OCTOBER 19,
      2006
      AND THE DATE THE CORPORATION BECAME A REPORTING ISSUER IN ANY PROVINCE OR
      TERRITORY OF CANADA.

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND HAVE BEEN ISSUED IN RELIANCE
      ON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY
      REGULATION S PROMULGATED UNDER THE ACT. THE SECURITIES MAY NOT BE REOFFERED
      FOR
      SALE OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
      REGISTRATION STATEMENT UNDER THE ACT, OR PURSUANT TO AN EXEMPTION FROM THE
      REGISTRATION REQURIEMENTS OF THE ACT AFTER PROVIDING A LEGAL OPINION TO SUCH
      EFFECT IN FORM AND SUBSTANCE SATISFACTORY TO THE CORPORATION. HEDGING
      TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
      COMPLIANCE WITH THE ACT.

     

    

      
        	
                No.
                  l

              	
                $ ̃

              

      

    

     

     

    RED
      MILE ENTERTAINMENT, INC.

     

    (Incorporated
      under the laws of the State of Delaware)

     

    5.5%
      SENIOR SECURED CONVERTIBLE DEBENTURE

    DUE
      OCTOBER 19,
      2008

     

    RED
      MILE ENTERTAINMENT, INC.
      (the
“Corporation”)
      for
      value received hereby acknowledges itself indebted and, subject to the
      provisions of the trust indenture (the “Indenture”)
      dated
      as of October 19,
      2006
      between the Corporation and Olympia
      Trust Company
      (the
“Debenture
      Trustee”),
      promises to pay to

     

    **[REGISTRATION]**

     

    the
      registered holder hereof, on presentation and surrender of this Debenture,
      the
      sum of  ̃
      Dollars
      ($ ̃)
      in
      lawful money of the United States (the “Principal
      Amount”)
      on
October
      19,
      2008
      (the “Maturity
      Date”)
      or on
      such earlier date as the Principal Amount hereof may become due in accordance
      with the provisions of the Indenture and, subject as hereinafter provided,
      to
      pay interest on the principal amount hereof from the date hereof, or from the
      last Interest Payment Date to which interest shall have been paid or made
      available for payment hereon, whichever is later, at the rate of 5.5% per annum,
      in like money, in arrears in equal (with the exception of the first interest
      payment which will include interest from October 19,
      2006 as
      set forth below) semi-annual instalments (less any tax required by law to be
      deducted) on September 15 and March 15 in each year commencing on March 15,
      2007
      and the last payment (representing interest payable from the last Interest
      Payment Date to, but excluding, the Maturity Date) to fall due on the Maturity
      Date and, should the Corporation at any time default in the payment of any
      principal, premium (if any) or interest, to pay interest on the amount in
      default at the same rate, in like money and on the same dates. The first
      interest payment will include interest accrued from October 19,
      2006
      to, but excluding March 15, 2007.

     

    Interest
      hereon shall be payable by cheque mailed by prepaid ordinary mail or by
      electronic transfer of funds to the registered holder hereof and, subject to
      the
      provisions of the Indenture, the mailing of such cheque or payment by electronic
      funds transfer shall, to the extent of the sum represented thereby (plus the
      amount of any tax withheld and remitted), satisfy and discharge all liability
      for interest on this Initial Debenture. The Corporation may, on notice as
      provided in the Indenture and subject to the restrictions set forth in the
      Indenture, at its option and subject to any applicable regulatory approval,
      elect to satisfy the obligation to pay all or any portion of the interest
      payable on this Initial Debenture and due on any Interest Payment Date by the
      issue of that number of Common Shares obtained by dividing the applicable amount
      of interest by the Current Market Price of the Common Shares in effect on the
      Interest Payment Date.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    This
      Debenture is one of the 5.5% Senior Secured Convertible Debentures (referred
      to
      herein as the “Initial
      Debenture”)
      of the
      Corporation issued under the provisions of the Indenture. The Initial Debentures
      authorized for issue are limited to an aggregate principal amount of $10,000,000
      in lawful money of the United States. Reference is hereby expressly made to
      the
      Indenture for a description of the terms and conditions upon which the Initial
      Debentures are issued and held and the rights and remedies of the holders of
      the
      Initial Debentures and of the Corporation and of the Debenture Trustee, all
      to
      the same effect as if the provisions of the Indenture were herein set forth
      to
      all of which provisions the holder of this Initial Debenture by acceptance
      hereof assents. To the extent that anything contained herein is inconsistent
      with or conflicts with the provisions of the Indenture, the provisions of the
      Indenture shall govern.

     

    The
      Initial Debentures are issuable only in denominations of $1,000 and integral
      multiples thereof. Upon compliance with the provisions of the Indenture,
      Debentures of any denomination may be exchanged for an equal aggregate principal
      amount of Debentures in any other authorized denomination or denominations.
      The
      whole, or if this Initial Debenture is a denomination in excess of $1,000,
      any
      part which is $1,000 or an integral multiple thereof, of the principal of this
      Initial Debenture is convertible, at the option of the holder hereof, upon
      surrender of this Initial Debenture at the principal office of the Debenture
      Trustee in Calgary,
      Alberta
      at any
      time prior to the close of business on the Maturity Date or, if this Initial
      Debenture is called for redemption on or prior to such date, then up to but
      not
      after 5:00 p.m. (Eastern time) on the last Business Day immediately preceding
      the date specified for redemption of this Initial Debenture, into Common Shares
      (without adjustment for interest accrued hereon or for dividends or
      distributions on Common Shares issuable upon conversion) at a conversion price
      of $1.75 (the “Conversion
      Price”)
      per
      Common Share, being a rate of approximately 571 Common Shares for each $1,000
      principal amount of Initial Debentures, all subject to the terms and conditions
      and in the manner set forth in the Indenture. No Debentures may be converted
      during the five Business Days preceding and including September 15 and March
      15
      in each year as the registers of the Debenture Trustee will be closed during
      such periods. The Indenture makes provision for the adjustment of the Conversion
      Price in the events therein specified. No fractional Common Shares will be
      issued on any conversion but in lieu thereof, the Corporation will satisfy
      such
      fractional interest by a cash payment equal to the market price of such
      fractional interest determined in accordance with the Indenture. Holders
      converting their Debentures will receive accrued and unpaid interest thereon.
      If
      a Debenture is surrendered for conversion on an Interest Payment Date or during
      the five preceding Business Days, the Person or Persons entitled to receive
      Common Shares in respect of the Debenture so surrendered for conversion shall
      not become the holder or holders of record of such Common Shares until the
      Business Day following such Interest Payment Date.

     

    This
      Initial Debenture may be redeemed at the option of the Corporation on the terms
      and conditions set out in the Indenture at the redemption price therein and
      herein set out provided that this Initial Debenture is not redeemable before
      the
      first anniversary of the date of issuance, except in the event of the
      satisfaction of certain conditions after a Change of Control has occurred.
      On
      and after first anniversary of the Issue Date and prior to the Maturity Date,
      the Initial Debentures are redeemable at the option of the Corporation provided
      that the Current Market Price of the Common Shares on the date on which notice
      of redemption is given is not less than $3.00 at a price equal to 110% of the
      principal amount of the Initial Debentures and, in addition thereto, at the
      time
      of redemption, the Corporation shall pay to the holder accrued and unpaid
      interest thereon. The Corporation may, on notice as provided in the Indenture
      and subject to the restrictions set forth in the Indenture, at its option and
      subject to any applicable regulatory approval, elect to satisfy its obligation
      to pay all or any portion of the applicable Redemption Price and any accrued
      and
      unpaid interest thereon by the issue of that number of Common Shares obtained
      by
      dividing the aggregate of the outstanding principal amount of the Initial
      Debentures to be redeemed and any accrued and unpaid interest thereon by the
      Conversion Price in effect on the Redemption Date.

     

    Upon
      the
      occurrence of a Change of Control of the Corporation, the Corporation is
      required to make an offer to purchase all of the Initial Debentures at a price
      equal to 110% of the principal amount of such Initial Debentures plus accrued
      and unpaid interest (if any) up to, but excluding, the date the Initial
      Debentures are so repurchased (the “Offer”).
      If
      90% or more of the principal amount of all Initial Debentures outstanding on
      the
      date the Corporation provides notice of a Change of Control to the Debenture
      Trustee have been tendered for purchase pursuant to the Offer, the Corporation
      has the right to redeem and shall redeem all the remaining outstanding Initial
      Debentures effective as of the same date and at the same price.

     

    The
      Corporation may, on notice as provided in the Indenture and subject to the
      restrictions set forth in the Indenture, at its option and subject to any
      applicable regulatory approval, elect to satisfy the obligation to repay all
      

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    or
      any
      portion of the principal amount of this Initial Debenture and any accrued and
      unpaid interest thereon due on the Maturity Date by the issue of that number
      of
      Common Shares obtained by dividing the principal amount of this Initial
      Debenture and any accrued and unpaid interest thereon by the Current Market
      Price in effect on the Maturity Date.

     

    This
      Initial Debentures is a direct obligation of the Corporation secured against
      all
      of present and after acquired personal property of the Corporation to the extent
      a security interest in such collateral may be created and perfected under
      Article 9 of the New York Uniform Commercial Code (and as applicable the
      Delaware Uniform Commercial Code) provided however that the Corporation may
      factor or otherwise sell its accounts receivable in the ordinary course of
      business or secure such accounts receivable in priority to the Initial
      Debentures in favour of a third party lender.

     

    The
      principal hereof may become or be declared due and payable before the stated
      maturity in the events, in the manner, with the effect and at the times provided
      in the Indenture.

     

    The
      Indenture contains provisions making binding upon all holders of Debentures
      outstanding thereunder (or in certain circumstances specific series of
      Debentures) resolutions passed at meetings of such holders held in accordance
      with such provisions and instruments signed by the holders of a specified
      majority of Debentures outstanding (or specific series), which resolutions
      or
      instruments may have the effect of amending the terms of this Initial Debenture
      or the Indenture.

     

    This
      Initial Debenture may only be transferred, upon compliance with the conditions
      prescribed in the Indenture, in one of the registers to be kept at the principal
      office of the Debenture Trustee in Calgary,
      Alberta
      and in
      such other place or places and/or by such other registrars (if any) as the
      Corporation with the approval of the Debenture Trustee may designate. No
      transfer of this Initial Debenture shall be valid unless made on the register
      by
      the registered holder hereof or his executors or administrators or other legal
      representatives, or his or their attorney duly appointed by an instrument in
      form and substance satisfactory to the Debenture Trustee or other registrar,
      and
      upon compliance with such reasonable requirements as the Debenture Trustee
      and/or other registrar may prescribe and upon surrender of this Initial
      Debenture for cancellation. Thereupon a new Initial Debenture or Initial
      Debentures in the same aggregate principal amount shall be issued to the
      transferee in exchange hereof

     

    This
      Initial Debenture shall not become obligatory for any purpose until it shall
      have been certified by the Debenture Trustee under the Indenture.

     

    Capitalized
      words or expressions used in this Initial Debenture shall, unless otherwise
      defined herein, have the meaning ascribed thereto in the Indenture.

     

    IN
      WITNESS WHEREOF RED MILE ENTERTAINMENT, INC.
      has
      caused this Debenture to be signed by its authorized representatives as of
      the
19th
      day of
      October, 2006.

     

     

    

      RED
        MILE ENTERTAINMENT, INC.

       

      By:
        ______________________________________

       

      This
        Initial Debenture is one of the 5.5% Senior Secured Convertible Debentures
        referred to in the Indenture within mentioned.

       

      OLYMPIA
        TRUST COMPANY

       

      

      By:
        ________________________________________________

      (Authorized
        Officer)

       

      Date
        of
        Certification: ___________________________________

       

    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

        

     

    FORM
      OF ASSIGNMENT

     

    FOR
      VALUE
      RECEIVED, the undersigned hereby sells, assigns and transfers unto
      ____________________________________ whose address and social insurance number,
      if applicable, are set forth below, this Initial Debenture (or $______________
      principal amount hereof) of RED MILE ENTERTAINMENT, INC. standing in the name(s)
      of the undersigned in the register maintained by the Corporation with respect
      to
      such Initial Debenture and does hereby irrevocably authorize and direct the
      Debenture Trustee to transfer such Initial Debenture in such register, with
      full
      power of substitution in the premises.

     

    

      Dated:
        ________________________________________________________________________________

       

      Address
        of Transferee:
        ___________________________________________________________________

      (Street
        Address, City, Province and Postal Code)

       

      Social
        Insurance Number of Transferee, if applicable:
        __________________________________________

       

      *If
        less
        than the full principal amount of the within Initial Debenture is to be
        transferred, indicate in the space provided the principal amount (which must
        be
        $1,000 or an integral multiple thereof, unless you hold an Initial Debenture
        in
        a non-integral multiple of 1,000 by reason of your having exercised your
        right
        to exchange upon the making of an Offer, in which case such Initial Debenture
        is
        transferable only in its entirety) to be transferred.

       

      
        	
                1.

              	
                The
                  signature(s) to this assignment must correspond with the name(s)
                  as
                  written upon the face of this Initial Debenture in every particular
                  without alteration or any change whatsoever. The signature(s) must
                  be
                  guaranteed by a Canadian chartered bank or trust company or by
                  a member of
                  an acceptable Medallion Guarantee Program. Notarized or witnessed
                  signatures are not acceptable as guaranteed signatures. The Guarantor
                  must
                  affix a stamp bearing the actual words: “SIGNATURE
                  GUARANTEED”.

              

      

       

      
        	
                2.

              	
                The
                  registered holder of this Initial Debenture is responsible for
                  the payment
                  of any documentary, stamp or other transfer taxes that may be payable
                  in
                  respect of the transfer of this Debenture

              

      

       

      Signature
        of Guarantor:

       

      

       

      ____________________________________     ________________________________________

      Authorized
        Officer            Signature
        of transferring registered holder

      

      

      

      ____________________________________

      Name
        of
        Institution

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