TERMS AND CONDITIONS

1. Definitions

The "Company" means any of Coyote Films Ltd. or its divisions. "Company Liability" means any and all liabilities, losses, damages, demands, claims, causes of action and all costs and expenses, including legal fees, incurred in connection with the performance of the Company's obligations hereunder. "Customer Element" means any material delivered to the Company and received from or produced by a third party for a Customer with respect to which services are performed or goods are sold by the Company or from which the Company obtains information in connection with the performance of services or sale of goods to Customer and "Customer Elements" means two or more such materials. "Customer" means the owner(s) or the duly authorized agent or licensee of the owner(s) or a person who has the right to possession and use of the Elements delivered to the Company.

2. Limitation of warranty

The Company assumes no responsibility for and makes no express or implied warranty as to the merchantability, fitness for a particular put, pose, description, quality or character of quality or otherwise with respect to the production of, filming, development, printing, dubbing, transferring and processing of Customer Elements and other services provided by the Company or the materials, including film, provided by the Company. Furthermore, the Company shall not be liable to anyone for lost profits or special, incidental, indirect or consequential damages whatsoever resulting from any defective products or equipment delivered, produced or provided by the Company.

3. Responsibility of Company and liability limitations

Customer acknowledges that the Company is not an insurer and that payments made for the services provided by the Company are based solely on the value of such services and not on the value of the Customer Elements. Since the Company's prices for services are not proportionate to the value of the Customer Elements delivered to or deposited with it, the Customer Elements are received, processed and stored solely at the risk of Customer. The Company reserves the right to assign or subcontract all or any part of the work required to be done by the Company. If the Customer Elements are lost, stolen, destroyed or damaged by reason of the negligence of the Company, its employees, subcontractors or agents, the Company Liability in respect of such loss, theft, destruction or damage shall be limited to the replacement value of the raw materials. If an Element produced by the Company is defective or is erroneously labeled or shipped or if non-conforming services or materials are furnished by the Company, the Company Liability shall be limited to the replacement or repair of such defective Customer Elements, the correction of such errors in shipment or labeling or the provision of conforming services or materials at the Company's expense; provided that the defective Element as returned and written notice of such imperfection or error in labeling or shipment is given the Company within twenty days after shipment.

4. Delay in delivery

Delivery dates and/or shipping dates are approximate. The Company shall not be liable to Customer or any other person for any losses, damage (incidental or consequential), liability or delay in delivery or shipping, nor for failure to give notice or delay and such delay shall not constitute grounds for cancellation.

5. Cancellation charges and quotations

The Company reserves the right to bill at 50% of book rate any scheduled session which has been canceled by Customer with less than 24 hours notice. Any scheduled time which has been canceled but is subsequently resold by the Company at 100% of book rate will not be charged to Customer, but Customer will be liable for the shortfall. Written quotations submitted by the Company are valid and binding for a period of thirty days from the date of submission. Quotations made orally are considered to be an approximation of charges only and will not be deemed to bind the Company to the amount quoted. All prices and rates are subject to change without prior notice.

6. Terms of payment

All work is accepted on a COD basis unless credit arrangements have been agreed to in advance by the Company. If a Customer credit account has been established and agreed to by the Company, then Customer agrees to pay the Company for all services performed and invoiced to Customer within thirty days of invoice date. Customer agrees to comply with credit terms extended by the Company. Unless Customer and Company have otherwise agreed in writing, Customer agrees to pay interest at the rate of 24% per annum on all accounts which are not paid when due. Customer agrees to pay all costs and expenses, including legal fees incurred by the Company, in connection with the enforcement of the Company's rights hereunder. Any claim for adjustment in connection with an invoice must be presented to the Company in writing within thirty days from the date of invoice in question. Customer understands that the Company's charges as shown on its standard price list are based upon the use and operation of equipment and the employment of personnel during normal working hours. If, at Customer's request or by its consent, overtime or premium time work is undertaken with respect to Customer Elements, Customer agrees to pay the Company, without demand therefore, the additional expense thereof.

7. Liens

In addition to any other liens or remedies given to the Company under applicable law or elsewhere in these conditions, the Company shall have a security interest in and lien on any or all Customer Elements in the possession of the Company as security for payment of any and all services and materials furnished by the Company to Customer. To the extent permitted by law, the parties agree that if the Customer Elements are voluntarily restored or delivered to Customer or some third person before payment to the Company for such materials and services, the lien and security interest therein shall not be extinguished but shall survive. Customer hereby grants to the Company the rights of a secured creditor with respect to its security interest in the Customer Elements and upon request by the Company will execute such documents, including a Financial Statement, as may be required to protect and perfect such a security interest.

8. Insurance

Customer agrees to fully insure all Customer Elements delivered or to be deposited with the Company against all insurable risks, including damage to or destruction of such Customer Elements by the negligence of the Company or its employees, agents or subcontractors. Customer agrees that such insurance shall insure against any and all losses (including incidental and consequential losses) for which insurance is available, and that the policy of insurance shall provide that the insurer waives all claims of subrogation against the Company, its employees and subcontractors. Company shall in no event be liable for any loss or damage which was, or could have been, covered by insurance but for the failure by Customer to obtain and pay for such insurance as obligated hereunder.

9. Right to refuse performance

The Company may refuse to produce, film, transfer, dub, or process at no cost to the Customer any Customer Elements which the Company in its sole discretion (whether or not acting reasonably) deems unlawful, pornographic or degrading or which it deems as tending to incite prejudice or passion. If the Company determines, in its sole judgment, that the performance of any service for Customer by the Company could subject it or its parent or affiliates, or officers or directors of any of them, to criminal or civil claims or process or to any liability whatsoever, the Company may cease such service and any other service relating in any way thereto and retain in its possession any Customer Elements until paid in full for the work performed, whether or not incomplete.

10. Ownership of Customer Elements and indemnification

Customer warrants that it is the sole owner and/or has the right to possession and use of all Customer Elements delivered to the Company by Customer or for Customer's account for storage, development, printing, dubbing, transferring or processing of any kind; that Customer is now and at all times during the term of this Agreement will be the sole owner and/or sole proprietor of all rights to possession and use of the Customer Elements, including without limitation of the copyright therein, the music, television, motion picture, video cassette, literary, paperback, book and dramatic rights. As long as Customer is indebted to the Company, Customer agrees not to pledge, mortgage, assign or otherwise encumber the Customer Elements or rights without the prior written consent of the Company. No filming, processing, dubbing or other work which is to be billed to a third party will be accepted by the Company without the prior written instructions from that third party. Customer shall indemnify and hold harmless the Company from all Company Liability arising out of or in connection with the publication, processing, use, distribution, contents or exhibition of Customer Elements delivered to the Company, including, without limitation, any Company Liability for libel, slander, defamation, invasion of privacy or infringement of patent, copyright, trademark, or other proprietary right. Upon written request from the Company, Customer agrees at Customer's sole expense promptly to defend any claim, demand, action or proceeding to which the Company may be a party which involves or is based in whole or in part on any Company Liability from which Customer has agreed to indemnify and hold the Company harmless.

12. Storage and removal of leftover Customer Elements

Customer agrees to remove from the Company's premises all Customer Elements within ninety days after the last work performed thereon by the Company. If Customer fails to remove such Customer Elements as herein provided, the Company may, without liability to Customer or any other person, destroy, erase, reuse or make any disposition of such Customer Elements as the Company sees fit. At Customer's request, the Company will store Customer Elements during the time of production and release printing or dubbing and for a reasonable period thereafter, not to exceed six months, at a nominal charge. The Company may store such Customer Elements at any place or places that the Company deems fit. Within thirty days after written notice from the Company, Customer agrees to remove, at Customer's sole expense, all Customer Elements in storage. If Customer fails to remove such Customer Elements, the Company may destroy or otherwise dispose of such Customer Elements at no cost to Customer or any other person. Customer agrees to indemnify and hold the Company harmless from all Company Liability arising out of or connected with the Company's destruction or disposition of said Customer Elements as provided herein.

13. Shipping charges, sales and other taxes

Transportation of Customer Elements to and from Company's place of business shall be at Customer's risk and expense. All shipments shall be insured at Customer's expense. All prices are based on FOB the Company's place of business, Vancouver, B.C. and do not include any applicable federal, provincial or municipal taxes. Customer agrees to reimburse, indemnify and hold Company harmless from any or all taxes which the Company may pay or collect or be required to pay or collect under any existing or future law in connection with the services of the Company or the sale, purchase, delivery, storage, processing, use or consumption of any material or films delivered to or deposited with Company. In the absence of the receipt of written instructions from Customer, Company will make all shipments of Customer Elements via same method as received. In the absence of receipt of written instructions from Customer and where method of shipment by which Customer Elements were received by the Company is inappropriate and/or unavailable to the Company, the Company will choose a method of shipment which is reasonable and of a standard appropriate in the industry. If the Customer Elements are damaged, lost, delayed or destroyed as a result of negligence on the part of the Company's involvement in the method of shipment of Customer Elements, Customer agrees that any liability will be limited to the replacement value of the raw materials. Customer agrees that where obligated for shipping, the amount of insurance required to be purchased by the Company need be no more than the replacement value of the raw materials.

14. General

This Agreement is and will be deemed to be made in British Columbia, for all purposes will be governed exclusively by and construed and enforced in accordance with the domestic laws prevailing in British Columbia, other than the International Sale of Goods Act (British Columbia), and the rights and remedies of the parties will be determined in accordance with those domestic laws. Except as otherwise provided herein, this Agreement may not be amended or terminated except by an instrument in writing executed by all the parties hereto. The rights of the parties provided in this Agreement are cumulative and no exercise or enforcement by the parties of any right or remedy under this Agreement will preclude the exercise or enforcement by the parties of any other right or remedy under this Agreement or otherwise available to the parties at law or in equity.

This Agreement will endure to the benefit of and be binding upon each of the parties and their respective heirs, administrators, representatives, successors and permitted assigns. No consent or waiver, express or implied, by any party to or of any breach or default by any of the other parties of any or all of their obligations under this Agreement will be valid unless it is in writing and stated to be a consent or waiver pursuant to this section, be relied upon as a consent or waiver to or of any other breach or default of the same or any other obligation, constitute a general waiver under this Agreement, or eliminate or modify the need for a specific consent or waiver pursuant to this section in any other or subsequent instance. If any provision of this Agreement is unenforceable or invalid for any reason whatsoever, that provision will be severable from the remainder of this Agreement and the validity of the remainder will continue in full force and effect and be construed as if this Agreement had been executed without the invalid or unenforceable provision.

15. Prices and Quotations

All prices and rates are subject to change without notice. Written quotations submitted by the Company are valid and binding for a period of sixty (60) days from the date of submission. Quotations made orally are considered to be approximation of charges only. Oral quotations do not constitute a binding contract.

This Agreement supersedes and replaces all previous offers and agreements, and constitutes the entire agreement between the parties hereto, and there is no agreement collateral hereto, with respect to the subject matter hereof and no representation or warranty other than as expressly set forth or referred to in this Agreement.

All notices and communications hereunder to the Company shall be delivered to:

Coyote Films Ltd.
601 West Broadway, Suite 400
Vancouver, British Columbia
Canada, V5Z 4C2

and will be deemed to have been received on the date actually received by the Company.