DUSSAULT APPAREL INC.

8010 Melrose Avenue

Los Angeles, CA 90046-7010

 

July 19, 2007

Dussault Jeans Inc.

3742 West 10th Avenue

Vancouver, BC V6R 2G4

Attention: Jason Dussault

Dear Sirs:

Re:        Bridge Loan

This letter will serve to confirm our agreement wherein, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, we
have agreed to loan US$2.6 million (the “Loan”) to Dussault Jeans Inc.
(“Dussault Jeans”), of which US$1.3 million has previously been provided by way
of payment directly from us to Dussault Jeans creditors, on the following terms
and conditions in order to facilitate exploring a further investment or purchase
of Dussault Jeans by Dussault Apparel Inc. (the “Transaction”):

1.

The principal amount of the Loan, shall be due and payable on December 31, 2008
(the “Maturity Date”).

2.

The Loan shall bear interest at the rate of 6% per annum, payable on the
Maturity Date.

3.

The Dussault Jeans may repay any or all outstanding amounts of principal and
interest at any time, without penalty.

4.

Except as otherwise agreed to in writing between the parties, Dussault Jeans
agrees that for a period from the date of this Agreement until the earliest of:

 

(a)

the Maturity Date; or

 

(b)

the date that a Transaction is consummated between the parties hereto,

other than in connection with a Transaction mutually agreed to by the parties
hereto (a “Permitted Transaction”), Dussault Jeans and its Representatives will
not, directly or indirectly:

 

(c)

acquire, by purchase or otherwise and whether individually or jointly or in
concert with any other person, any of the outstanding securities or direct or
indirect rights to acquire any securities of the other party;

 

(d)

offer to purchase all or any part of the outstanding securities of the other
party;

 

(e)

offer to sell all or any part of Dussault Jeans’ securities to the other party;

 

 

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(f)

in any way solicit proxies to vote, or seek to advise or influence any person or
entity with respect to the voting of, any securities of the other party;

 

(g)

otherwise act, alone or in concert with others, to seek to control the
management, board of directors or policies of the other party;

 

(h)

contact or otherwise communicate with any shareholder of the other party with a
view to discussing any direct or indirect purchase of securities of the other
party, other than by, or subsequent to, the delivery of a takeover bid circular,
proxy circular or similar disclosure document to all shareholders of the other
party pursuant to a Permitted Transaction.

5.

“Representatives” of Dussault Jeans means the directors, employees, affiliates,
subsidiaries, shareholders, advisors, agents and representatives of Dussault
Jeans, and shall also include directors and employees of the affiliates,
subsidiaries and shareholders of Dussault Jeans.

6.

The obligations of Dussault Jeans will be evidenced by a promissory note in the
form attached hereto.

Accepting that the above accurately details your understanding of our agreement
in this regard could you please execute this letter where indicated and return
same at your early convenience.

Yours truly,

DUSSAULT APPAREL INC.

Per:

/s/ Jason Dussault

 

 

Authorized Signatory

 

Acknowledged and agreed to this 19 day of July, 2007 by:

 

DUSSAULT JEANS INC.

 

Per:

/s/ Robert Mintak

 

 

Authorized Signatory

 

 

 

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PROMISSORY NOTE

US$2,600,000

July 19, 2007

 

DUSSAULT APPAREL INC.

8010 Melrose Avenue

Los Angeles, CA 90046-7010

 

FOR VALUE RECEIVED, Dussault Jeans Inc. (“Dussault Jeans”) promises to pay to
the order of Dussault Apparel Inc. (the “Lender”) the Principal Sum of
$2,600,000 in lawful currency of the United States of America (the “Principal
Sum”).

It is understood and agreed that Dussault Jeans shall pay to the Lender all of
the principal and accrued interest evidenced by this Promissory Note on December
31, 2008.

The Principal Sum or such amount as shall remain outstanding from time to time
shall bear interest thereon, calculated annually, not in advance, at a rate of
six (6%) percent per annum commencing on the day the Principal Sum is advanced
by the Lender to Dussault Jeans and shall be payable on maturity. In the event
of any partial repayments made on the Principal Sum, such payments shall be
applied firstly towards accrued interest and then towards the Principal Sum.

This Promissory Note is being issued in accordance with and is subject to the
terms of a letter agreement entered into between the undersigned and the Lender
dated as July 19, 2007.

The undersigned shall have the privilege of prepaying in whole or in part the
Principal Sum and accrued interest.

 

Presentment, protest, notice of protest and notice of dishonour are hereby
waived.

 

 

DUSSAULT JEANS INC.

 

 

/s/ Robert Mintak

 

 

Signature

 

 

Robert Mintak, President  

 

 

Name of Signatory and Title

 

 

 

CW1327765.1