Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Image Innovations Holdings Inc. -  Exhibit 10.3

 SECURITY AGREEMENT 

 THIS SECURITY AGREEMENT dated for reference September
  30, 2004 

 BETWEEN: 

  
     IMAGE INNOVATIONS HOLDINGS INC., a Nevada
      corporation having an office at 432 Park Avenue, New York, New York 10022
    

     (the "Debtor") 

  

 AND: 

  
     H.E. CAPITAL S.A., a corporation
      having an office at Casa del Sol, MJ19 Paseo Marino, Perla Marina, Sosua,
      Dominican Republic 

     (the "Secured Party") 

  

 WITNESSES THAT: 

 1.0      SECURITY INTEREST

 1.1      For valuable consideration
  (the receipt and sufficiency of which is hereby acknowledged by the Debtor)
  the Debtor does hereby: 

	 (a)      	 mortgage and charge as and by way of a
        fixed and specific charge in favour of the Secured Party, and assign and
        transfer to the Secured Party, and grant to the Secured Party a security
        interest in, all the Debtor's and Debtor's wholly-owned subsidiaries'
        present and after acquired personal property, assets and undertakings,
        of whatever nature or kind and wheresoever situate, and all proceeds thereof
        and therefrom including without limitation all of the Debtor's right,
        title and interest in and to all: 

	 
	 	 (i)      	 equipment, including, without limiting the generality
        of the foregoing, machinery, tools, fixtures, furniture, furnishings,
        chattels, motor vehicles and other tangible personal property that is
        not Inventory (as hereinafter defined), and all parts, components, attachments,
        accessories, accessions, replacements, substitutions, additions and improvements
        to any of the foregoing (all of which is hereinafter collectively called
        the "Equipment"); 

	 
	 	 (ii)      	 inventory, including, without limiting the generality
        of the foregoing, goods acquired or held for sale or lease or furnished
        or to be furnished under contracts of rental or service, all raw materials,
        work in process, 

	 

	 	 	 finished goods, returned goods, repossessed goods,
        and all packaging materials, supplies and containers relating to or used
        or consumed in connection with any of the foregoing (all of which is hereinafter
        collectively called the "Inventory"); 

	 	 	 
	 	 (iii)      	 debts, accounts, claims, demands, monies and choses
        in action which now are, or which may at any time hereafter be, due or
        owing to or owned by the Debtor and all books, records, documents, papers
        and electronically recorded data recording, evidencing or relating to
        the said debts, accounts, claims, demands, monies and choses in action
        or any part thereof (all of which is hereinafter collectively called the
        "Accounts"); 

	 
	 	 (iv)      	 chattel paper; 

	 
	 	 (v)      	 documents of title including all warehouse receipts;
      

	 
	 	 (vi)      	 securities and instruments including all shares,
        stock, warrants, bonds, debentures and debenture stock; 

	 

	 	 (vii)  	  money;  
	 	 	 
	 	 (viii)  	  goods that are not Equipment or Inventory;  

 

	 	 (ix)      	 contractual rights, licenses, goodwill, patents,
        trademarks, designs, trade names, copyrights and other intellectual properties
        of the Debtor, all other choses in action of the Debtor of every kind
        which now are, or which may at any time hereafter be, due or owing to
        or owned by the Debtor, and all other personal property of the Debtor
        which are not Accounts, goods, chattel paper, instruments, documents of
        title, securities or money; 

	 

	 (b)      	 charge as and by way of floating charge, and grant
        to the Secured Party a security interest in and to, all of the Debtor's
        and Debtor's wholly-owned subsidiaries' right, title and interest in and
        to all presently owned or held and after acquired or held real, immovable
        and leasehold property and all interests therein, and all easements, rights-of-way,
        privileges, benefits, licences, improvements and rights whether connected
        therewith or appurtenant thereto or separately owned or held, including
        all structures, plant and other fixtures (all which is hereinafter collectively
        called the "Real Property"). 

 1.2      The charges, assignments
  and transfers and security interests created pursuant to Clause 1.1 are hereinafter
  collectively called the "Security Interests" and the property, assets and undertakings
  subject to the Security Interests and all property, assets and undertakings
  expressed to be charged, assigned or transferred or secured by any instruments
  supplemental hereto or in implementation hereof are hereinafter collectively
  called the "Collateral". 

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 1.3      For the purposes of Section
  198.1 of the Land Title Act (British Columbia) the floating charges created
  pursuant to Clause 1.1(b) shall become a fixed charge upon the earlier of: 

	 (a)      	 the occurrence of an Event of Default (as hereinafter
        defined); or 

	 
	 (b)      	 the Secured Party taking any action to enforce and/or
        realize on the security hereby constituted. 

 2.0      EXCEPTIONS 

 2.1      The last ten days of the
  term created by any lease or agreement therefor are hereby excepted out of the
  Security Interests hereby created but the Debtor shall stand possessed of the
  reversion thereby remaining upon trust to assign and dispose thereof to any
  third party as the Secured Party shall direct and as set forth on Schedule A.

 3.0      ATTACHMENT 

 3.1      The Debtor acknowledges
  that the Security Interests hereby created attach upon the execution of this
  Security Agreement (or in the case of any after acquired property, upon the
  date of acquisition thereof), that value has been given and that the Debtor
  has (or in the case of any after acquired property, will have upon the date
  of acquisition) rights in the Collateral, provided that the Secured Party hereby
  undertakes to file the appropriate UCC-1 Forms in the states which such filing
  is required, including the States of Nevada and Delaware. Until such time as
  the UCC-1 Forms are filed, the Secured Party understands that the Security Interests
  hereby created have not been perfected. 

 4.0      PROHIBITION 

 4.1      Without the prior written
  consent of the Secured Party the Debtor shall not create or permit to exist
  any security interest in, charge, encumbrance or lien over, or claim against
  any of its property, assets or undertaking which ranks or could in any event
  rank in priority to or pari passu with any of the Security Interests created
  by this Security Agreement, save only for the security interests and encumbrances,
  if any, consented to in writing by the Secured Party (collectively "Permitted
  Encumbrances"). 

 5.0      OBLIGATIONS SECURED

 5.1 This Security Agreement and the Security Interests hereby
  created are in addition to and not in substitution for any other security interest
  now or hereafter held by the Secured Party from the Debtor, and shall be general
  and continuing security for the payment of all indebtedness and liability of
  the Debtor to the Secured Party (including interest), present and future, absolute
  or contingent, joint and several, direct or indirect, matured or not, extended
  or renewed, wheresoever and howsoever incurred whether alone or with others,
  and any ultimate balance 

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 thereof, including all future advances and re-advances, and
  for the performance of all obligations of the Debtor to the Secured Party, whether
  or not contained in this Security Agreement, and including without limitation
  all indebtedness and liability of the Debtor to the Secured Party under or pursuant
  to the loan agreement (the "Loan Agreement") of even date made between the Debtor
  and the Secured Party and all promissory notes issued pursuant thereto (all
  of which indebtedness, liability and obligations are hereinafter collectively
  called the "Obligations"). 

 6.0      REPRESENTATIONS AND WARRANTIES

 6.1      The Debtor represents and
  warrants that the execution, delivery and performance of this Security Agreement
  are within the Debtor's corporate powers, are not in contravention of the law
  or the terms of the Debtor's charter, bylaws or other incorporation papers,
  or any intention, agreement or undertaking to which the Debtor is a party or
  by which it is bound. 

 6.2      The Debtor represents and
  warrants that the Debtor lawfully owns and possesses all Collateral presently
  held by it, and has good title thereto, free from all security interests, charges,
  encumbrances, liens and claims, save only for Permitted Encumbrances, and the
  Debtor has good right and lawful authority to grant the Security Interests in
  the Collateral as provided by this Security Agreement. 

 7.0      COVENANTS OF THE DEBTOR

 7.1      The Debtor covenants that
  at all times while this Security Agreement remains in effect the Debtor will:

	 (a)      	 defend the title to the Collateral for
        the benefit of the Secured Party against the claims and demands of all
        persons; 

	 
	 (b)      	 fully and effectively maintain and keep
        maintained the Security Interests hereby created valid and effective;
      

	 
	 (c)      	 maintain the Collateral in good order
        and repair; 

	 
	 (d)      	 forthwith pay: 
	 
	 	 (i)      	 all taxes, assessments, rates, duties, levies, government
        fees, claims and dues lawfully levied, assessed or imposed upon them,
        respectively, or the Collateral when due, unless the Debtor shall in good
        faith contest its obligation so to pay and shall furnish such security
        as the Secured Party may require; and 

	 
	 	 (ii)      	 all security interests, charges, encumbrances, liens
        and claims which rank or could in any event rank in priority to any Security
        Interest created by this Security Agreement other than the Permitted Encumbrances;
      

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	 (e)      	 forthwith pay all costs, charges, expenses
        and legal fees and disbursements (on a solicitor and his own client basis)
        which may be incurred by the Secured Party in: 

	 
	 	 (i)      	 taking, recovering and keeping possession of the
        Collateral; 

	 
	 	 (ii)      	 all other actions and proceedings taken in connection
        with the preservation of the Collateral and the enforcement of this Security
        Agreement and of any other security interest held by the Secured Party
        as security for the Obligations; 

	 
	 	 (iii)      	 complying with the disclosure requirements under
        the Act; 

	 
	 (f)      	 at the Secured Party's request at any
        time and from time to time execute and deliver such further and other
        documents and instruments and do all acts and things as the Secured Party
        in its absolute discretion requires in order to confirm and perfect, and
        maintain perfection of, the Security Interests hereby created in favour
        of the Secured Party upon any of the Collateral; 

	 
	 (g)      	 notify the Secured Party promptly of:
      

	 
	 	 (i)      	 any material change in the information contained
        herein relating to the Debtor for which notice is required to be filed
        under the Act, its business or the Collateral, including without limitation,
        any change of name or address of the Debtor, and any change in the present
        location of any Collateral which is not Inventory; 

	 
	 	 (ii)      	 the details of any material acquisition of Collateral
        which is not Inventory; 

	 
	 	 (iii)      	 any material loss or damage to Collateral; 

	 
	 	 (iv)      	 any material default by any account debtor in payment
        or other performance of his obligations to the Debtor with respect to
        any Accounts; and 

	 
	 	 (v)      	 the return to or repossession by the Debtor of Collateral
        where such return or repossession of Collateral is material in relation
        to the business of the Debtor; 

	 
	 (h)      	 prevent Collateral, other than Inventory
        sold, leased or otherwise disposed of as permitted hereby, from being
        or becoming an accession to other property not covered by this Security
        Agreement; 

	 
	 (i)      	 carry on and conduct its business in a
        proper and business-like manner, including maintenance of proper books
        of account and records; 

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	 (j)      	 permit, on 24-hours' notice, the Secured
        Party and its representatives, at all reasonable times, access to all
        its property, assets and undertaking and to all its books of account and
        records for the purpose of inspection and render all assistance necessary
        for such inspection; 

	 
	 (k)      	 deliver to the Secured Party from time
        to time within five days of its written request: 

	 
	 	 (i)      	 any documents of title, instruments, securities
        and chattel paper constituting, representing or relating to Collateral;
      

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

	 
	 	 (iii)      	 all financial statements prepared by or for the
        Debtor or any of them regarding the Debtor's business; and 

	 
	 	 (iv)      	 such information concerning Collateral, the Debtor
        and the Debtor's business and affairs as the Secured Party may reasonably
        require including but not limited to a complete list of all jurisdictions
        in which the Debtor carries on business and a list setting out the jurisdiction
        of any of the Collateral. 

 8.0      INSURANCE

 8.1      The Debtor covenants that
  at all times while this Security Agreement is in effect the Debtor shall: 

	 	 (a)      	 maintain or cause to be maintained insurance on
        the Collateral with an insurer, of kinds, for amounts and payable to such
        person or persons, all as the Secured Party may require, and in particular
        maintain insurance on the Collateral to the full insurable value against
        loss or damage by fire including extended coverage endorsement and in
        the case of motor vehicles, maintain insurance against theft; 

	 
	 	 (b)      	 cause the insurance policy or policies required
        hereunder to be assigned to the Secured Party as its interests may appear
        and have as part thereof a standard mortgage clause or a mortgage endorsement,
        as appropriate; and 

	 
	 	 (c)      	 pay any premium in connection with such insurance,
        and deliver all such policies to the Secured Party, if it so requires.
      

 8.2      If proceeds of any insurance
  required hereunder become payable, the Secured Party may, in its absolute discretion
  apply such proceeds to such part or parts of the Obligations as the Secured
  Party may see fit or the Secured Party may release any such insurance proceeds
  to the 

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 Debtor for the purpose of repairing, replacing or rebuilding,
  but any release of insurance proceeds to the Debtor shall not operate as a payment
  on account of the Obligations or in any way affect this Security Agreement.

 8.3      The Debtor will forthwith,
  on the happening of loss or damage to the Collateral, notify the Secured Party
  thereof and furnish to the Secured Party at the Debtor's expense any necessary
  proof and do any necessary act to enable the Secured Party to obtain payment
  of the insurance proceeds, but nothing herein contained shall limit the Secured
  Party's right to submit to the insurer a proof of loss on its own behalf. 

 8.4      The Debtor hereby authorizes
  and directs the insurer under any policy of insurance required hereunder to
  include the name of the Secured Party as a loss payee on any cheque or draft
  which may be issued with respect to a claim under and by virtue of such insurance,
  and the production by the Secured Party to any insurer of a certified copy of
  this Security Agreement shall be its full and complete authority for so doing.

 8.5      If the Debtor fails to maintain
  insurance as required by Clause 8.1, the Secured Party may, but shall not be
  obliged to, maintain or effect such insurance coverage, or so much thereof as
  the Secured Party considers necessary for its protection. 

 9.0      PERFORMANCE OF OBLIGATIONS

 9.1      If the Debtor fails to perform
  its obligations hereunder, the Secured Party may, but shall not be obliged to,
  perform any or all of such obligations without prejudice to any other rights
  and remedies of the Secured Party hereunder, and any payments made and any costs,
  charges, expenses and legal fees and disbursements (on a solicitor and his own
  client basis) incurred in connection therewith shall be payable by the Debtor
  to the Secured Party forthwith with interest until paid at the highest rate
  borne by any of the Obligations. 

 10.0     RESTRICTIONS ON SALE OR DISPOSAL
  OF COLLATERAL 

 10.1     Except as herein provided, without
  the prior written consent of the Secured Party, the Debtor will not: 

	 	 (a)      	 sell, lease or otherwise dispose of the Collateral;
      

	 
	 	 (b)      	 release, surrender or abandon possession of the
        Collateral; and 

	 
	 	 (c)      	 move or transfer the Collateral from the jurisdiction
        in which the Security Interests hereby created have been perfected. 

 10.2     Provided that the Debtor is not
  in default under this Security Agreement, the Debtor may at any time without
  the consent of the Secured Party lease, sell, license, consign or otherwise
  deal with items of Inventory in the ordinary course of its business and dispose
  of other items of Collateral in the ordinary course of business as they become
  surplus to the requirements of the Debtor, provided that Collateral of equal
  or greater value is acquired by the Debtor. 

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 11.0     DEFAULT 

 11.1     The Debtor shall be in default
  under this Security Agreement, unless waived in writing by the Secured Party,
  in the event (herein called an "Event of Default") there occurs any default
  under the Loan Agreement, including without limitation a default of payment
  of any portion of the Loan (as defined in the Loan Agreement) or interest. 

 12.0     ENFORCEMENT 

 12.1     Upon the occurrence of an Event
  of Default, the Secured Party may declare any or all of the Obligations not
  payable on demand to become immediately due and payable and the security hereby
  constituted will immediately become enforceable. To enforce and realize on the
  Security Interests created by this Security Agreement the Secured Party may
  take any action permitted by law or in equity, as it may deem expedient, and
  in particular and without limiting the generality of the foregoing, the Secured
  Party may do any of the following: 

	 	 (a)      	 appoint by instrument a receiver, receiver and manager
        or receiver-manager (the person so appointed being hereinafter called
        the "Receiver") of the Collateral, with or without bond as the Secured
        Party may determine, and from time to time in its absolute discretion
        remove such Receiver and appoint another in its stead; 

	 
	 	 (b)      	 enter upon any premises of the Debtor and take possession
        of the Collateral with power to exclude the Debtor, its agents and its
        servants therefrom, without becoming liable as a mortgagee in possession;
      

	 
	 	 (c)      	 preserve, protect and maintain the Collateral and
        make such replacements thereof and repairs and additions thereto as the
        Secured Party may deem advisable; 

	 
	 	 (d)      	 sell, lease or otherwise dispose of all or any part
        of the Collateral, whether by public or private sale or lease or otherwise,
        in such manner, at such price as can be reasonably obtained therefor and
        on such terms as to credit and with such conditions of sale and stipulations
        as to title or conveyance or evidence of title or otherwise as to the
        Secured Party may seem reasonable, provided that if any sale, lease or
        other disposition is on credit the Debtor will not be entitled to be credited
        with the proceeds of such sale, lease or other disposition until the monies
        therefor are actually received; and 

	 
	 	 (e)      	 exercise all of the rights and remedies of a secured
        party under the Act. 

 12.2     A Receiver appointed pursuant
  to this Security Agreement shall be the agent of the Debtor and not of the Secured
  Party and, to the extent permitted by law or to such lesser extent permitted
  by its appointment, shall have all the powers of the Secured Party hereunder,
  and in addition shall have power to carry on the business of the Debtor and
  for such purpose from time 

 8 

 to time to borrow money either secured or unsecured, and if
  secured by a security interest on any Collateral, such security interest may
  rank before or pari passu with or behind any of the Security Interests created
  by this Security Agreement, and if it does not so specify such security interest
  shall rank in priority to the Security Interests created by this Security Agreement.

 12.3     Subject to the claims, if any,
  of the creditors of the Debtor ranking in priority to this Security Agreement,
  all amounts realized from the disposition of Collateral pursuant to this Security
  Agreement will be applied as the Secured Party, in its absolute discretion,
  may direct, as follows: 

	 	 (a)      	 in payment of all costs, charges and expenses
        (including legal fees and disbursements on a solicitor and his own client
        basis) incurred by the Secured Party in connection with or incidental
        to: 

	 
	 	 	 (i)      	 the exercise by the Secured Party of all or any
        of the powers granted to it pursuant to this Security Agreement; and 

	 
	 	 	 (ii)      	 the appointment of the Receiver and the exercise
        by the Receiver of all or any of the powers granted to it pursuant to
        this Security Agreement, including the Receiver's reasonable remuneration
        and all outgoings properly payable by the Receiver; 

	 
	 	 (b)      	 in or toward payment to the Secured Party
        of all principal and other monies (except interest) due in respect of
        the Obligations; 

	 
	 	 (c)      	 in or toward payment to the Secured Party
        of all interest remaining unpaid in respect of the Obligations. 

 Subject to applicable law and the claims, if any, of other
  creditors of the Debtor, any surplus will be paid to the Debtor. 

 13.0     DEFICIENCY 

 13.1     If the amounts realized from
  the disposition of the Collateral are not sufficient to pay the Obligations
  in full, the Debtor will immediately pay to the Secured Party the amount of
  such deficiency. 

 14.0     LIABILITY OF SECURED PARTY

 14.1     The Secured Party shall not be
  responsible or liable for any debts contracted by it, for damages to persons
  or property or for salaries or non-fulfillment of contracts during any period
  when the Secured Party shall manage the Collateral upon entry, as herein provided,
  nor shall the Secured Party be liable to account as a mortgagee in possession
  or for anything except actual receipts or be liable for any loss on realization
  or for any default or omission for which a mortgagee in possession may be liable.
  The Secured Party shall not be bound to do, observe or 

 9 

 perform or to see to the observance or performance by the
  Debtor of any obligations or covenants imposed upon the Debtor nor shall the
  Secured Party, in the case of securities, instruments or chattel paper, be obliged
  to preserve rights against other persons, nor shall the Secured Party be obliged
  to keep any of the Collateral identifiable. The Debtor hereby waives any applicable
  provision of law permitted to be waived by it which imposes higher or greater
  obligations upon the Secured Party than aforesaid. 

 15.0     APPOINTMENT OF ATTORNEY

 15.1     The Debtor hereby irrevocably
  appoints the Secured Party or the Receiver, as the case may be, with full power
  of substitution, to be the attorney of the Debtor for and in the name of the
  Debtor to sign, endorse or execute under seal or otherwise any deeds, documents,
  transfers, cheques, instruments, demands, assignments, assurances or consents
  that the Debtor may be obliged to sign, endorse or execute, and generally to
  use the names of the Debtor and to do all things as may be necessary or incidental
  to the exercise of all of the powers conferred on the Secured Party or the Receiver,
  as the case may be, pursuant to this Security Agreement. 

 16.0     ACCOUNTS 

 16.1     The Secured Party may collect,
  realize, sell, or otherwise deal with the Accounts or any part thereof in such
  manner, upon such terms and conditions and at such time to times, whether before
  or after default, as may seem to it advisable, and without notice to the Debtor.
  Upon the occurrence of an Event of Default, all monies or other forms of payment
  received by the Debtor in payment of any Account will be received and held by
  the Debtor in trust for the Secured Party and paid to the Secured Party on demand.

 17.0     APPROPRIATION OF PAYMENTS

 17.1     Any and all payments made in
  respect of the Obligations from time to time and monies realized from any security
  interests held therefor (including monies collected in accordance with or realized
  on any enforcement of this Security Agreement) may be applied to such part or
  parts of the Obligations as the Secured Party may see fit, and the Secured Party
  may at all times and from time to time change any appropriation as the Secured
  Party may see fit. 

 18.0     NOTICE 

 18.1     Any demand, request, notice or
  consent to be given under this Security Agreement shall be in writing and shall
  be given by delivering the same to the Debtor at the address first set forth
  above or such other address as may be given in writing by the Debtor, or by
  telecopying such notice to the Debtor; and any such demand, request, notice
  or consent sent as aforesaid shall be 

 10 

 deemed to have been received upon delivery, if delivered,
  and when transmitted, if sent by telecopier or other like medium of transmission.

 19.0     EXTENSIONS 

 19.1     The Secured Party may grant extensions
  of time and other indulgences, take and give up security, accept compositions,
  compound, compromise, settle, grant releases and discharges, refrain from perfecting
  or maintaining perfection of security interests, and otherwise deal with the
  Debtor, account debtors of the Debtor, sureties and others and with Collateral
  and other security interests as the Secured Party may see fit without prejudice
  to the liability of the Debtor or the Secured Party's right to hold and realize
  on the Security Interests created by this Security Agreement. 

 20.0     NO MERGER 

 20.1     This Security Agreement shall
  not operate so as to create any merger or discharge of any of the Obligations,
  or of any assignment, transfer guarantee, lien, contract, promissory note, bill
  of exchange or security interest of any form held or which may hereafter be
  held by the Secured Party from the Debtor or from any other person whomsoever.
  The taking of a judgment with respect to any of the Obligations will not operate
  as a merger of any of the covenants contained in this Security Agreement. 

 21.0     RIGHTS CUMULATIVE 

 21.1     All rights and remedies of the
  Secured Party set out in this Security Agreement, and in any other security
  agreement held by the Secured Party from the Debtor or any other person whomsoever
  to secure payment and performance of the Obligations, are cumulative and no
  right or remedy contained herein or therein is intended to be exclusive but
  each is in addition to every other right or remedy contained herein or therein
  or in any future security agreement, or now or hereafter existing at law, in
  equity or by statute, or pursuant to any other agreement between the Debtor
  and the Secured Party that may be in effect from time to time. 

 22.0     ASSIGNMENT 

 22.1     The Secured Party may, without
  further notice to the Debtor, at any time assign, transfer or grant a security
  interest in this Security Agreement and the Security Interests created hereby.
  The Debtor expressly agrees that the assignee, transferee or secured party,
  as the case may be, shall have all of the Secured Party's rights and remedies
  under this Security Agreement and the Debtor will not assert any defense, counterclaim,
  right of set-off or otherwise any claim which it now has or may hereafter acquire
  against the Secured Party in any action commenced by such assignee, transferee
  or secured party, as the case may be, and will pay the Obligations to the assignee,
  transferee or secured party, as the case may be, as the Obligations become due.

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 23.0     SATISFACTION AND DISCHARGE 

 23.1     Any partial payment or satisfaction
  of the Obligations, or any ceasing by the Debtor to be indebted to the Secured
  Party shall be deemed not to be a redemption or discharge of this Security Agreement.
  The Debtor shall be entitled to a release and discharge of this Security Agreement
  upon full payment and satisfaction of all Obligations, and upon written request
  by the Borrower and payment to the Secured Party of a discharge fee to be fixed
  by the Secured Party and payment of all costs, charges, expenses and legal fees
  and disbursements (on a solicitor and his own client basis) incurred by the
  Secured Party in connection with the Obligations and such release and discharge.

 24.0     ENUREMENT 

 24.1     This Security Agreement shall
  enure to the benefit of the Secured Party and its successors and assigns, and
  shall be binding upon the successors and permitted assigns of the Debtor. 

 25.0     INTERPRETATION 

 25.1     In this Security Agreement: 

	 	 (a)      	 "Collateral" has the meaning set out in Clause 1
        hereof and any reference to Collateral shall, unless the context otherwise
        requires, be deemed to be a reference to Collateral as a whole or any
        part thereof; 

	 
	 	 (b)      	 "the Act" means the Personal Property Security Act
        (British Columbia) and all regulations thereunder, as amended from time
        to time. 

 25.2     Words and expressions used herein
  that have been defined in the Act shall be interpreted in accordance with their
  respective meanings given in the Act unless otherwise defined herein or unless
  the context otherwise requires. 

 25.3     The invalidity or unenforceability
  of the whole or any part of any clause of this Security Agreement shall not
  affect the validity or enforceability of any other clause or the remainder of
  such clause. 

 25.4     The headings of the clauses of
  this Security Agreement have been inserted for reference only and do not define,
  limit, alter or enlarge the meaning of any provision of this Security Agreement.

 25.5     This Security Agreement shall
  be governed by the laws of British Columbia. 

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 26.0     COPY OF AGREEMENT AND WAIVER 

 26.1     The Debtor hereby: 

	 	 (a)      	 acknowledges receiving a copy of this Security Agreement; and 
	 
	 	 (b)      	 waives all rights to receive from the Secured Party a copy of any financing
      statement or financing change statement filed, or any verification statement
      received, at any time in respect of this Security Agreement. 

 IN WITNESS WHEREOF the Debtor has executed this Security
  Agreement effective September 30, 2004. 

	 IMAGE INNOVATIONS HOLDINGS INC.  

        
 \s\ Derick Sinclair  

      Derick Sinclair  

      Authorized Signatory  	H.E. CAPITAL S.A.  
   
 \s\
      Richard Smith  

      Richard Smith  

      Authorized Signatory  

13 

 Schedule A 

	        Debtor's warehouse located at
    6093 Main Street, Tannersville, New York 12485. 

      
	       Loan due to Coach Capital LLC
    on October 27, 2004 in the principal amount of $800,000. 

14EXHIBIT 4.1

                            CORONADO INDUSTRIES, INC.
                         2004 EMPLOYEE STOCK BONUS PLAN

I.   PURPOSE

This 2004  Employee  Stock  Bonus  Plan  is  intended  to reward  employees  and
consultants through the ownership of common stock of Coronado  Industries,  Inc.
by  employees  of  and   consultants  to  the  Corporation  by  giving  suitable
recognition,  in addition to salaries and bonuses, to their ability and industry
which  contribute  materially  to  the  success  of the  Corporation's  business
interests.

II.  DEFINITIONS

In this  Plan,  except  where  the  context  otherwise  clearly  indicates,  the
following definitions apply:

(1)  "Board" means the Board of Directors of the Corporation.

(2)  "Corporation" means Coronado Industries, Inc., a Nevada corporation, or any
entity  that,  directly  or  indirectly,  through  one or  more  intermediaries,
controls,  is controlled by or is under common control with Coronado Industries,
Inc.

(3)  "Date of Grant" means the date on which the Board approves the grant of the
Option under this Plan to the Optionee.

(4)  "Incentive  Stock  Option"  means any Option  granted under this Plan which
complies  with the  provisions  of Section 422A of the Internal  Revenue Code of
1986, as amended from time to time (herein called the "Code").

(5)  "Key  Employee"  means any  employee  who is an officer or is employed in a
managerial,  professional or other key position (including directors who provide
services beyond the normal  activities of a director);  provided,  however,  the
term  "Key  Employee"  shall  not  include  any  employee   (hereinafter  called
"Shareholder  Employee") of the Corporation who, at the date of grant, owns more
than ten  percent  (10%) of the total  combined  voting  power of all classes of
stock of the Corporation (or its parent or subsidiary,  if applicable).  For the
purposes of this  limitation,  an employee  shall be considered as owning Shares
owned  directly  or  indirectly  by or for his  brothers  and  sisters,  spouse,
ancestors and lineal  descendants;  and stock owned directly or indirectly by or
for a  corporation,  partnership,  estate or trust shall be  considered as being
owned proportionately by or for its shareholders, partners or beneficiaries.

(6)  "Non-Qualified Stock Option" means any Option granted under this Plan which
does not qualify in whole or in part as an  "incentive  stock  option" under the
provisions of Section 422A of the Code.

(7)  "Option" means a common stock option granted pursuant to the Plan.

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(8)  "Optionee"  means a person  or  entity  to whom a common  stock  option  is
granted under this Plan, including, but not limited to, a Key Employee.

(9)  "Plan" means this 2004 Employee Stock Bonus Plan.

(10) "Share"  means  a  share  of  the  $.001  par  value  common  stock  of the
Corporation  that has been  previously  authorized  but unissued,  or issued and
reacquired by the Corporation.

(11) "Value" means the lowest bid price published by the National Association of
Securities  Dealers,  Inc.  (or  registered  securities  exchange or NASDAQ,  if
appropriate)  of the Shares on the date of grant,  or if not  available for that
day,  then the next earliest  preceding day in which the price is available.  If
the Shares should become listed on a national  registered  securities  exchange,
then the Value shall be the reported  closing price for the day in question.  In
all other  cases,  the Value shall be the fair market  value  determined  by the
method the Board deems reasonable.  Value shall be determined  without regard to
securities law  restrictions,  or any other  restriction which by its terms will
lapse.

III. TERM OF PLAN

This Plan shall  become  effective  upon its  adoption  by the  Board.  It shall
continue  in  effect  for a term of ten years  unless  sooner  terminated  under
Article X. This Plan shall  remain in effect  after its term for the  purpose of
administration  of any Option  granted  pursuant  to its  provisions.  No Option
granted  during the term of the Plan shall be  adversely  affected by the end of
the term of this Plan.  Options must be granted  within ten years of the date on
which the Plan is adopted or the date the Plan is approved by the  stockholders,
whichever is earlier.

IV.  SHARES TO BE OPTIONED

The maximum  number of Shares  which may be optioned and sold under this Plan is
3,350,000  Shares.  If Options granted under this Plan shall terminate or expire
without  being  wholly  exercised,  new Options  may be granted  under this Plan
covering the number of Shares to which such termination or expiration relates.

V.   ADMINISTRATION OF THE PLAN

The Plan shall be administered by the Board of Directors of the Corporation,  or
a committee of Board members, if such is appointed.

VI.  NON-QUALIFIED STOCK OPTIONS

Only Non-qualified Stock Options may be granted to any Optionee under this Plan.
Each  Non-qualified  Stock Option granted under this Article VI shall be subject
to the  following  conditions:

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(1)  The Option price shall be at least fifty  percent (50%) of the Value of the
Share at the Date of Grant.

(2)  During the Optionee's  lifetime,  Non-qualified Stock Options granted under
this Article VI may not be sold, pledged, assigned or transferred in any manner,
and may be exercised  during the Optionee's  lifetime only by the Optionee.  Any
Option that is  exercisable  after the  Optionee's  death is  exercisable by the
person or persons to whom his rights  under the Option shall have passed by will
or the laws of descent and distribution.

(3)  Each  Non-qualified  Stock  Option  granted  under this Article VI shall be
exercised during the period beginning on the Date of Grant and ending on the ten
(10) year anniversary of the Date of Grant.

(4)  A Non-qualified Stock Option shall be exercised when written notice of such
exercise is given to the  Corporation  at its principal  business  office by the
Optionee  and full  payment for the Shares  with  respect to which the option is
exercised has been received by the Corporation.  Until the issuance of the stock
certificates,  no right to vote or to receive dividends or any other rights as a
stockholder shall exist with respect to the optioned Shares  notwithstanding the
exercise  of the  Option.  No  adjustment  will be made for a dividend  or other
rights for which the record date is prior to the date that the stock certificate
is issued.  Payment for the Shares shall be made with cash,  previously acquired
Shares having a Value equal to the Option price,  or previously  acquired Shares
having a Value  less  than  the  Option  price,  plus  cash.  Upon  exercise  of
Non-qualified  Stock Option and payment of the purchase  price,  the Corporation
shall promptly issue the Shares to the Optionee.

(5)  In the event an Optionee who is an Employee of the  Corporation  who during
his  lifetime  ceases to be employed  by the  Corporation  for any  reason,  any
Non-qualified  Stock Option or unexercised  portion  thereof which was otherwise
exercisable  on the  date of  termination  of  employment  shall  expire  unless
exercised  within a period  of three  (3)  months  from the date his  employment
terminates, but in no event later than ten (10) years from the Date of Grant. In
the event of the death of an Optionee  (who is an  employee of the  Corporation)
during  the  three (3) month  period,  the  Non-qualified  Stock  Option  may be
exercised by the person or persons to whom his rights under the Option passed by
will or laws of descent and  distribution to the same extent and during the same
period that the Optionee could have exercised the Non-qualified Stock Option had
the Optionee not died.  If an Optionee dies while  employed by the  Corporation,
any  Non-qualified  Stock  Option  or  unexercised  portion  thereof  which  was
otherwise  exercisable  at the time of the  Optionee's  death  may be  exercised
within twelve (12) months of the  Optionee's  death,  but in no event later than
ten (10)  years  from the Date of Grant,  by the  person or  persons to whom his
rights under the Option  passed by will or laws of descent or  distribution.  An
Optionee's  continuous  employment shall not be deemed interrupted by a leave of
absence approved by the Corporation.

VII.  ADJUSTMENTS UPON CHANGES IN CAPITALIZATION

Whenever a stock split or stock dividend  occurs,  (1) the number of Shares that
can thereafter be purchased,  and the Option price per Share,  under each Option
that has been granted under this Plan and not exercised, and (2) every number of

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Shares used in determining whether a particular Option is grantable  thereafter,
shall be appropriately adjusted.

VIII.  CORPORATE TRANSACTIONS

(1)  If the Corporation is dissolved or liquidated, or is merged or consolidated
into or with another  corporation,  other than by a merger or  consolidation  in
which  the  Company  is the  surviving  corporation,  the then  exercisable  and
unexercised  Options granted under the Plan may or may not be exercisable  after
the  date  of  such  dissolution,   liquidation,  merger  or  consolidation,  as
determined by the Board at the time of such event or at the Date of Grant of the
Option.

(2)  Notwithstanding any provision of this Plan, the Board is authorized to take
such action upon the Date of Grant of an Option or at any time  thereafter as it
determines  to be necessary or  advisable,  and fair and equitable to Optionees,
with  respect to Options held by Optionees in the event of a sale or transfer of
all or  substantially  all of the Company's  assets,  or merger or consolidation
(other  than a merger or  consolidation  in which the  Company is the  surviving
corporation and no shares are converted into or exchanged for  securities,  cash
or any other thing of value).  Such  action may include  (but is not limited to)
the following:

     (a)  Accelerating the  exercisability  of any Option to permit its exercise
in full  during  such  period  as the  Committee  in its sole  discretion  shall
prescribe  following the public  announcement of a sale or transfer of assets or
merger or consolidation.

     (b)  Permitting  an  Optionee,  at  any  time  during  such  period  as the
Committee in its sole discretion  shall prescribe  following the consummation of
such a merger,  consolidation  or sale or transfer of assets,  to surrender  any
Option (or any portion thereof) to the Company for cancellation.

     (c)  Requiring any Optionee, at any time following the consummation of such
a merger,  consolidation or sale or transfer of assets, if required by the terms
of the  agreements  relating  thereto,  to surrender  any Option (or any portion
thereof) to the Company in return for a substitute Option which is issued by the
corporation  surviving such merger or  consolidation  or the  corporation  which
acquired  such assets (or by an  affiliate  of such  corporation)  and which the
Committee,  in its sole  discretion,  determines to have a value to the Optionee
substantially  equivalent to the value to the Optionee of the Option (or portion
thereof) so surrendered.

(3)  Subject  to any  action  which  the  Committee  may  take  pursuant  to the
provisions of this Article VIII,  in the event of any merger,  consolidation  or
sale or transfer of assets  referred to in this Article VIII,  upon any exercise
thereafter of an Option,  and Optionee  shall,  at no additional cost other than
payment of the Option price,  be entitled to receive in lieu of Shares,  (I) the
number and class of Shares or other  security,  or (ii) the  amount of cash,  or
(iii)  property,  or (iv) a combination of the foregoing,  to which the Optionee
would have been entitled pursuant to the terms of such merger,  consolidation or
sale or transfer of assets,  if immediately  prior thereto the Optionee had been
the holder of record of the number of Shares for which such  Option  shall be so
exercised.

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IX.  ADDITIONAL PROVISIONS APPLICABLE TO OPTIONS AND CERTAIN POWERS OF THE BOARD

The Board, in addition to any other powers granted it hereunder, shall have the
power, subject to the express provisions of the Plan:

(1)  To determine  the  provisions  of the  respective  Options other than those
provisions expressly stated or limited herein, which terms and provisions may be
set forth in Option agreements:

(2)  Without  limiting the  generality  of the  foregoing,  to provide in Option
agreements, in its discretion:

     (a)  For an agreement by the Optionee to render services to the Corporation
upon such terms and conditions as shall be specified in the agreement.

     (b)  For restrictions on the transfer, sale, or disposition of the stock to
be issued to the Optionee upon the exercise of his Option.

(3)  To require,  whether or not provided for in the pertinent  Option or Option
agreement of any person exercising an Option granted under the Plan, at the time
of such exercise, the execution of any paper or the making of any representation
or the giving of any commitment when the Board shall,  in its  discretion,  deem
necessary or advisable by reason of the securities  laws of the United States or
of any State.

(4)  To amend Options previously granted and outstanding under this Plan, but no
amendment  to any Option  agreement  shall be made  without  the  consent of the
Optionee if such amendment would adversely affect the Optionee; and no amendment
shall be made to any Option agreement which would cause the inclusion therein of
any  term or  provisions  inconsistent  with  the  Plan or  Section  422A of the
Internal Revenue Code, as amended (if applicable).

(5)  To grant  Options  after the date the Plan is adopted  provided the Options
granted are  specifically  contingent upon approval of this Plan by holders of a
majority of the Corporation's outstanding common stock.

X.   POWER TO AMEND OR TERMINATE THE PLAN

(1)  The Board may terminate  this Plan at any time, or amend or modify the Plan
without  shareholder  approval in such  respects as it shall deem  advisable  in
order that Options granted to Key Employees  shall be "Incentive  Stock Options"
as defined in Section 422A of the Internal Revenue Code of 1954, as amended,  or
to conform to any change in the law, or in order to comply  with the  provisions
of any rule or regulations  of the  Securities and Exchange  Commission or other
applicable  governmental  agency required to exempt the Plan or any transactions
under this Plan from the operation of Section 16(b) of the  Securities  Exchange
Act of 1934, as amended, or in any other respect which shall not be inconsistent
with the  provisions  of Section 422A of the Internal  Revenue Code of 1954,  as
amended, or Section 16(b) of the Securities Exchange Act of 1934, as amended.

(2)  The Board may terminate this Plan. Any  termination  shall not affect stock
options  already granted as those Options shall remain in force and effect as if
this  Plan had not been  terminated.  The  termination  or any  modification  or

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<PAGE>

amendment of this Plan shall not,  without the consent of the  Optionee,  affect
his rights under an Option previously granted to him.

(3)  Only  with  shareholder  approval  can  the  Board  amend  the  Plan in the
following areas:

     (a)  Increasing  the  maximum  number  of  Shares  that may be  effectively
optioned, otherwise than through the making of an adjustment pursuant to Article
VII.

     (b)  Changing the class of employees eligible for Options.

     (c)  Decreasing  the  prices at which  previously  granted  Options  may be
exercised.

XI.  STOCKHOLDER APPROVAL

This Plan shall become  effective  upon receipt by the  Corporation  of approval
from the holders of a majority of the shares of common stock of the  Corporation
entitled to vote thereon.  This Plan shall not be effective unless such consents
are obtained within twelve (12) months before or after the Plan is adopted.

                                         CORONADO INDUSTRIES, INC.

                                         By  /s/ Gary R. Smith
                                             -----------------------------------
                                             Gary R. Smith, President

ATTEST:

/s/ G. Richard Smith
---------------------------
G. Richard Smith, Secretary

Date Approved By Shareholders: July 2, 2004

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