ex10-1.htm


  
     

    LOAN
AGREEMENT

     

     

    THIS AGREEMENT dated for
reference the 24th day of November, 2009 and made,

     

    BETWEEN:

     

    PANGLOBAL
BRANDS INC., a company incorporated under the laws of Delaware, having an
office at 2853 E. Pico Blvd, Los Angeles, CA 90023;

     

    (the
“Borrower”)

     

    AND:

     

    Providence
Wealth Management Ltd, a company incorporated
under the laws of the British Virgin Islands, with an address c/o Mr. Karim
Khoury, Chabrier & Partners (Reed Smith), 3 rue du Mont-Blanc P.O. Box 1363
CH - 1211 Geneva 1 Switzerland;

     

    (the
“Lenders”)

     

    WITNESSES THAT
WHEREAS:

     

    A.          The
Borrower has applied to the Lender for a loan in the aggregate principal amount
of US$290,000 (the “Loan”) to be utilized by the
Borrower for the purposes described in Section 3.

     

    B.           Lender
have agreed to make the Loan available to Borrower provided they are secured by
assignment of the trademark “Scrapbook” of the Company; and

     

    C.           The
parties wish to provide for the terms and conditions upon which the Loan will be
made available to the Borrower.

     

    THEREFORE in consideration of
the premises and of the mutual covenants and agreements hereinafter set forth,
the Lender and the Borrower warrant and represent to and covenant and agree with
each other as set forth below.

     

    
      	
              1.

            	
              DEFINITIONS;
      INTERPRETATION

            


    

     

    1.1                      For
the purpose of this Agreement, the following words and phrases will have
meanings set forth below unless the parties or the context otherwise
require(s):

     

    
      	
               
      

            	
              (a)

            	
              “Advance” means an
      advance or readvance on account of the Loan, as the context
      requires;

            


    


    
      
         


      

      
         

        
          

        

      

      
         


      

    


     

    
      	
               
      

            	
              (b)

            	
              “Affiliate” has the
      meaning give to it in the Securities
Act;

            


    

     

    
      	
               
      

            	
              (c)

            	
              “Agreement” and “this Agreement” means
      this agreement and all schedules hereto as the same may be amended,
      modified, replaced or restated from time to
  time;

            


    

     

    
      	
               
      

            	
              (d)

            	
              “Borrower’s Indebtedness”
      means all present and future indebtedness and liability, direct and
      indirect, of the Borrower to the Lender arising under and pursuant to the
      Loan Documents (including, without limitation, at any point in time the
      principal amount outstanding under the Loan, all unpaid accrued interest
      thereon, liquidated damages, and all fees and costs and expenses then
      payable in connection therewith);

            


    

     

    
      	
               
      

            	
              (e)

            	
              “Business Day” means any
      day, other than a Saturday or a Sunday, on which commercial banks in
      California are required to be open for
business;

            


    

     

    
      	
               
      

            	
              (f)

            	
              “Conditions Precedent”
      means the conditions precedent described in Article 8
hereof;

            


    

     

    
      	
               
      

            	
              (g)

            	
              “Event of Default” means
      any of the events specified in Section 12, and “Default” mean any of
      such events, whether or not any such requirement has been
      satisfied;

            


    

     

    
      	
               
      

            	
              (h)

            	
              “GAAP” means United
      States generally accepted accounting principles, as applied on a
      consistent basis;

            


    

     

    
      	
               
      

            	
              (i)

            	
              “Interest Payment Date”
      means 30 days after advance of the Loan and, if the Loan is extended
      beyond the Maturity Date, each 30 days
  thereafter.

            


    

     

    
      	
               
      

            	
              (j)

            	
              “Interest Rate” means
      nine percent (9 %) per annum calculated as herein
  provided;

            


    

     

    
      	
               
      

            	
              (k)

            	
              “Lien” means, with
      respect to any Person, any mortgage, lien, pledge, hypothecation,
      charge(whether fixed or floating), security interest (including, without
      limitation, any assignment, notice or security interest filed pursuant to
      applicable federal, state or other laws) or other encumbrance, or any
      interest or title of any vendor, lessor, or lender to or other secured
      party of such Person under any conditional sale or other title retention
      agreement, upon or with respect to any property, asset or undertaking of
      such Person, including any agreement to create any of the foregoing, and
      whether arising under any statute, law, contract or
    otherwise;

            


    

     

    
      	
               
      

            	
              (l)

            	
              “Loan” means the loan
      facility of US$290,000 established by the Lender in favour of the Borrower
      pursuant to this Agreement;

            


    

     

    
      	
               
      

            	
              (m)

            	
              “Loan Documents” means
      this Agreement, the Priority Agreement and the Security
      Documents;

            


    


    
      
         


      

      
        2

        
          

        

      

      
         


      

    


     

    
      	
               
      

            	
              (n)

            	
              “material adverse effect”
      in respect of the Borrower means a material adverse effect
    on:

            


    

     

    
      	
               
      

            	
              (i)

            	
              the
      business, operations, affairs, financial condition, property, assets or
      undertakings of the Borrower, or

            


    

     

    
      	
               
      

            	
              (ii)

            	
              the
      validity, priority or enforceability of any Loan Document to which that
      Borrower is a party or by which any of its property, assets and
      undertakings are bound;

            


    

     

    
      	
               
      

            	
              (o)

            	
              “material” means, in
      respect of the Borrower, material in relation to the business, operations,
      affairs, financial condition, assets, properties, or prospects of the
      Borrower;

            


    

     

    
      	
               
      

            	
              (p)

            	
              “Maturity Date” has the
      meaning set out in Section 5 of
      this Agreement;

            


    

     

    
      	
               
      

            	
              (q)

            	
              “Person” means and
      includes an individual, a partnership, a joint venture, a corporation, a
      limited liability company, a trust, an unincorporated organization and a
      government or any department or agency
thereof;

            


    

     

    
      	
               
      

            	
              (r)

            	
              “Priority Claim” means a
      claim of a Person  pursuant to a Lien which, in the opinion of
      the Lender or its solicitors, acting reasonably, ranks or could rank pari
      passu with or in priority to any Lien that the Lender may have pursuant to
      the Security Documents;

            


    

     

    
      	
               
      

            	
              (s)

            	
              “Prior Convertible Loan”
      means the loans from certain lenders represented by Chelsea Capital
      Corporation for the principal amount of
  US$2,187,500;

            


    

     

    
      	
               
      

            	
              (t)

            	
              “Prior Convertible Loan
      Lenders” means Chelsea Capital Corporation. and other lenders
      represented by Chelsea Capital
Corporation.;

            


    

     

    
      	
               
      

            	
              (u)

            	
              “Prior Factor” means a
      Person in the business of factoring accounts receivable who is approved by
      the Lender for the purpose of financing the Borrower’s accounts receivable
      in whole or in part; such approval not to be unreasonably or arbitrarily
      withheld;

            


    

     

    
      	
               
      

            	
              (v)

            	
              “Prior Factor’s Loan”
      means the loan made by the Prior Factor to the Borrower for the purposes
      of factoring the Borrower’s accounts receivables in whole or in
      part;

            


    

     

    
      	
               
      

            	
              (w)

            	
              “Prior Factor’s Lien”
      means the Lien in favour of the Prior Factor over the Borrower’s accounts
      receivable which have been assigned to the Prior Factor for the repayment
      of the Prior Factor’s Loan and
interest;

            


    

     

    
      	
               
      

            	
              (x)

            	
              “Prior Permitted Liens”
      means:

            


    

     

    
      	
               
      

            	
              (i)

            	
              the
      Prior Factor’s Lien;

            


    


    
      
         


      

      
        3

        
          

        

      

      
         


      

    


     

    
      	
               
      

            	
              (ii)

            	
              Liens
      in favour of the Prior Convertible Loan
Lenders;

            


    

     

    
      	
               
      

            	
              (iii)

            	
              any
      other Lien from time to time agreed to as such by the Lender in
      writing;

            


    

     

    
      	
               
      

            	
              (iv)

            	
              Liens
      incidental to the conduct of Borrower’s business as the ownership of its
      property; and

            


    

     

    
      	
               
      

            	
              (v)

            	
              Liens
      granted to factors over specific accounts receivable which the said factor
      is collecting on behalf of the
Company.

            


    

     

    
      	
               
      

            	
              (y)

            	
              “Securities Act” means
      the United States Securities Act of 1933, as amended or replaced from time
      to time;

            


    

     

    
      	
               
      

            	
              (z)

            	
              “Security Documents”
      means the security documents set out in Section 11 to this Agreement and any other
      security document(s) from time to time taken by the Lender from the
      Borrower or any other Person as security for the payment, observance and
      performance of the Borrower’s Indebtedness in whole or in
      part;

            


    

     

    
      	
               
      

            	
              (aa)

            	
              “Subsidiary” has the
      meaning give to it in the Securities
Act;

            


    

     

    
      	
               
      

            	
              (bb)

            	
              “Priority Agreement”
      means the agreement of the Prior Convertible Loan Lenders to grant
      priority to the claim of the Lender to the trademark “Scrapbook” of the
      Borrower;

            


    

     

    
      	
               
      

            	
              (cc)

            	
              “UCC” shall mean the
      Uniform Commercial Code as in effect in the applicable jurisdiction;
      and

            


    

     

    
      	
               
      

            	
              (dd)

            	
              “US$” means lawful
      currency of the United States.

            


    

     

    
      	
              2.

            	
              LOAN

            


    

     

    2.1                      Subject
to the terms and conditions of this Agreement, the Lender hereby establishes and
agrees to make the Loan available to the Borrower.

     

    
      	
              3.

            	
              PURPOSE

            


    

     

    3.1                      The
Loan will be made available to the Borrower for its payroll accounts and to pay
other outstanding accounts.

     

    
      	
              4.

            	
              AVAILABILITY AND
      SUBORDINATION

            


    

     

    4.1                      The
Loan will be available by advance on the day of execution of this
Agreement.

     

    4.2                      The
Loan will be subordinated to a Prior Factor who is arranged by the Borrower, so
long as the borrowings of the Borrower from the Prior Factor do not exceed 90%
of the Borrower’s accounts receivable and security granted to such Prior Factor
are limited to an assignment of such accounts receivable collected by the Prior
Factor.


    
      
         


      

      
        4

        
          

        

      

      
         


      

    


     

    4.3                      The
Loan will be subordinated to the Prior Convertible Loan, so long as the Prior
Convertible Loan Lenders grant to the Lender priority over security on the
trademark “Scrapbook” of the Borrower pursuant to the Priority
Agreement.

     

    
      	
              5.

            	
              TERM

            


    

     

    5.1                      Subject
to the provisions of Section 7, the
Borrower will pay the Borrower’s Indebtedness to the Lender in full thirty (30)
days after advance, unless sooner prepaid or accelerated upon the occurrence and
during the continuance of an Event of Default (the “Maturity Date”), or unless
extended by the Lender for such period as is agreed in writing by the
Lender.

     

    
      	
              6.

            	
              INTEREST

            


    

     

    6.1                      The
outstanding principal balance of the Loan will bear interest at the Interest
Rate.

     

    6.2                      Interest
at the Interest Rate will be calculated monthly, not in advance, as well as
before maturity, default, demand and judgment.

     

    6.3                      All
overdue and unpaid interest and all fees, costs, and other amounts payable by
the Borrower hereunder or under any of the Loan Documents will be added to the
principal balance of the Loan and will bear interest at the Interest Rate until
paid in full.

     

    6.4                      If
Interest calculated under the laws of the State of California is determined to
be in excess of the maximum interest rate permitted by law, the parties agree to
reduce the Interest  payable to such rate of interest as is 0.1% below
the maximum permitted by California law and to reduce Interest otherwise paid or
payable to such adjusted rate.  Any excess amount of Interest received
by a Lender shall be first applied to any unpaid principal balance owed by the
Borrower, and if the then remaining excess amount is greater than the previously
unpaid principal balance, the Lender shall promptly refund such excess amount to
the Borrower.

     

    
      	
              7.

            	
              REPAYMENT

            


    

     

    7.1                      On
each Interest Payment Date, the Borrower will pay the Lender all interest which
has accrued on account of the outstanding balance of the Lender’s Loan and then
remains unpaid.

     

    7.2                      On
the Maturity Date the Borrower will pay to the Lender the Borrower’s
Indebtedness then outstanding in full, unless otherwise agreed in writing by the
Lender.

     

    7.3                      The
Borrower will be entitled to prepay the whole or any portion of the Borrower’s
Indebtedness at any time and from time to time, without notice, bonus or
penalty.

     

    7.4                      All
amounts payable by the Borrower under this Agreement will be paid without
set-off or counterclaim, and without any deductions or withholdings
whatsoever.


    
      
         


      

      
        5

        
          

        

      

      
         


      

    


     

    7.5                      Subject
to the provisions hereof, all payments received by the Lender on account of the
Borrower’s Indebtedness will be applied first in payment of outstanding interest
and secondly in reduction of the principal balance of the Loan then
outstanding.  If any payment is received at any time while an Event of
Default remains outstanding or after demand has been made for the repayment of
the Borrower’s Indebtedness, the Lender may appropriate such payment to such
part or parts of the Borrower’s Indebtedness as the Lender in its sole
discretion may determine and the Lender may from time to time revoke and change
any such appropriation.

     

    7.6                      The
Lender is hereby authorized to open and maintain books of account and other
books and records evidencing all advances under the Loan, interest accruing
thereon, fees, charges, and other amounts from time to time charged to the
Borrower under the Loan Documents; and amounts from time to time owing, paid, or
repaid by the Borrower under this Agreement.  All such books,
accounts, and records will constitute prima facie evidence of the amount owing
by the Borrower under the Loan Documents; but the failure to make any entry or
recording in such books, accounts, and records will not limit or otherwise
affect the obligations of the Borrower under the Loan Documents.

     

    7.7                      Notwithstanding
anything in this Agreement to the contrary, any payment of principal of or
interest on the Borrower’s Indebtedness that is due on a date other than a
Business Day will be made on the next succeeding Business Day.  If the
date for any payment on the Borrower’s Indebtedness is extended to the next
succeeding Business Day by reason of the preceding sentence, the period of such
extension will not be included in the computation of the interest payable on
such Business Day.

     

    
      	
              8.

            	
              CONDITIONS
      PRECEDENT

            


    

     

    8.1                      The
Lender’s obligation to make any Advance is subject to the following conditions
precedent having been met to the Lender’s sole satisfaction or waived by the
Lender in writing at the time of that Advance, namely:

     

    
      	
               
      

            	
              (a)

            	
              the
      Borrower’s representations and warranties contained herein and in the
      Security Documents then in effect then being true and correct in all
      material respects;

            


    

     

    
      	
               
      

            	
              (b)

            	
              the
      Security Documents being registered against the Borrower in the state of
      California;

            


    

     

    
      	
               
      

            	
              (c)

            	
              there
      then being no outstanding Default or Event of Default;
  and

            


    

     

    
      	
               
      

            	
              (d)

            	
              the
      Prior Convertible Loan Lenders have signed the Priority
      Agreement.

            


    

     

    
      	
              9.

            	
              REPRESENTATIONS AND
      WARRANTIES

            


    

     

    9.1                      The
Borrower represents and warrants as follows:

     

    
      	
               
      

            	
              (a)

            	
              it
      is a corporation duly organized, validly existing and in good standing
      under the laws of Delaware;

            


    


    
      
         


      

      
        6

        
          

        

      

      
         


      

    


     

    
      	
               
      

            	
              (b)

            	
              it
      has the (corporate) power and capacity to carry on business as currently
      conducted by it, own property or interests therein, borrow and lend money,
      grant security, make, keep, observe and perform representations,
      warranties, covenants and agreements and incur obligations and
      liabilities, all as contemplated
hereby;

            


    

     

    
      	
               
      

            	
              (c)

            	
              except
      as disclosed to the Lender there is no action, suit, investigation or
      proceeding outstanding or pending or, to the knowledge of the Borrower,
      threatened against it or any of its property, assets or undertakings by or
      before any court, arbitrator or administrative or governmental body which
      would reasonably be expected to have a material adverse
      effect;

            


    

     

    
      	
               
      

            	
              (d)

            	
              it
      has not agreed or consented to, nor has it agreed to cause or permit in
      the future (upon the happening of a contingency or otherwise), any of its
      property, whether now owned or hereafter acquired, to be subject to a Lien
      other than Prior Permitted Liens;
and

            


    

     

    
      	
               
      

            	
              (e)

            	
              the
      execution and delivery by it of this Agreement and the Security Documents
      and the performance by it of its obligations hereunder and thereunder, do
      not and will not conflict with or result in a material breach of any of
      the terms, conditions, or provisions
of:

            


    

     

    
      	
               
      

            	
              (i)

            	
              its
      organizational documents,

            


    

     

    
      	
               
      

            	
              (ii)

            	
              any
      law, regulation, or decree applicable or binding on it or any of its
      property, assets and undertaking,
or

            


    

     

    
      	
               
      

            	
              (iii)

            	
              any
      material agreement or instrument binding to which it or any of its
      property assets or undertakings is a party or bound, the breach of which
      could reasonably be expected to have a material adverse effect or result
      in, or require or permit the imposition of any Lien in or with respect to
      the property, assets and undertakings now owned or hereafter acquired by
      it.

            


    

     

    
      	
              10.

            	
              COVENANTS

            


    

     

    10.1                      The
Borrower will:

     

    
      	
               
      

            	
              (a)

            	
              comply
      with all applicable laws, ordinances or governmental rules or regulations
      to which it or any of its property, assets and undertaking are
      subject;

            


    

     

    
      	
               
      

            	
              (b)

            	
              obtain
      and maintain in effect all licenses, certificates, permits, franchises and
      other governmental authorizations necessary to the ownership of its
      property, assets and undertakings or to the conduct of its businesses, in
      each case to the extent necessary to ensure that non-compliance with such
      applicable laws, ordinances or governmental rules or regulations or
      failures to obtain or maintain in effect such licenses, certificates,
      permits, franchises and other governmental authorizations could not,
      individually or in the aggregate, reasonably be expected to have a
      material adverse effect; and

            


    


    
      
         


      

      
        7

        
          

        

      

      
         


      

    


     

    
      	
               
      

            	
              (c)

            	
              maintain
      and keep, or cause to be maintained and kept, its property, assets and
      undertakings in good repair, working order and condition (other than
      ordinary wear and tear), so that the business(es) carried on by it may be
      properly conducted at all times, provided that this section will not
      prevent the Borrower from discontinuing the operation and the maintenance
      of any of its property, assets and undertakings if such discontinuance is
      desirable in the conduct of its business and such the Borrower has
      concluded that such discontinuance could not, individually or in the
      aggregate, reasonably be expected to have a material adverse
      effect.

            


    

     

    10.2                      So
long as this Agreement remains in effect, the Borrower will not, without the
prior written consent of the Lender, which consent will not be unreasonably
withheld:

     

    
      	
               
      

            	
              (a)

            	
              incur
      any further indebtedness of either a direct or indirect nature to any
      party other than the Lender, the Prior Factor and the Prior Convertible
      Loan Lenders except in the normal course of
  business;

            


    

     

    
      	
               
      

            	
              (b)

            	
              grant
      or allow any further Lien to be registered against it or exist on any of
      its property, assets and undertaking, save and except for security in
      favour of the Lender and Prior Permitted
Liens;

            


    

     

    
      	
               
      

            	
              (c)

            	
              make
      any advances or loan to, or any investment in, or provide any guarantees
      on behalf of, any Person, other than the endorsement of checks in the
      ordinary course;

            


    

     

    
      	
               
      

            	
              (d)

            	
              become
      a party to any transaction whereby all or a substantial part of its
      property assets and undertakings or of any of its subsidiaries would
      become the property of any other Person, whether by way of reconstruction,
      reorganization, amalgamation, merger, transfer, sale, lease or
      otherwise;

            


    

     

    
      	
               
      

            	
              (e)

            	
              in
      any fiscal year of the Borrower or any of its subsidiaries, pay dividends
      on any class or kind of its shares, repurchase or redeem any of its
      shares, or reduce its capital in any way
  whatsoever.

            


    

     

    10.3                      So
long as this Agreement remains in effect, the Borrower will provide the Lender
with the following information:

     

    
      	
               
      

            	
              (a)

            	
              within
      90 days of each fiscal year end of the Borrower, consolidated and non
      consolidated financial statements of the Borrower prepared by an
      independent public accountant approved by the Lender (which approval shall
      not be unreasonably withheld) on a review engagement basis, which
      statements must include a balance sheet, an income statement, a statement
      of retained earnings, and a statement of changes in financial position,
      and must be prepared in accordance with GAAP applied on a basis consistent
      with the statements for the previous fiscal year and be approved and
      signed by two directors of the
Borrower;

            


    

     

    
      	
               
      

            	
              (b)

            	
              within
      20 days of each calendar month end, management prepared monthly financial
      statements and aged payables and receivables for the
    Borrower;

            


    


    
      
         


      

      
        8

        
          

        

      

      
         


      

    


     

    
      	
               
      

            	
              (c)

            	
              within
      20 days of each calendar month end, an aged list of the Borrower’s
      accounts receivable; and

            


    

     

    
      	
               
      

            	
              (d)

            	
              at
      the written request of the Lender, such other reports, certificates,
      projections of income and cash flow or other matters affecting its
      business affairs or financial condition as the Lender may reasonably
      request from time to time.

            


    

     

    
      	
              11.

            	
              SECURITY

            


    

     

    11.1                      As
security for payment, observance and performance of the Borrower’s Indebtedness,
the Borrower agrees to execute and deliver an assignment of the trademark
“Scrapbook” and a priority agreement from the Prior Convertible Loan Lenders
(collectively, the “Security
Documents”) in a form and manner satisfactory to the Lender and the
Lender’s attorneys.

     

    11.2                      Each
Security Document is given as additional, concurrent and collateral security to
the remainder of the Security Documents and will not operate to merge, novate or
discharge the Borrower’s Indebtedness or any of the other Security
Documents.  The execution and delivery of each Security Document will
not in any way suspend or affect the present or future rights and remedies of
the Lender in respect of the Borrower’s Indebtedness, or the other Security
Documents.  No action or judgment taken by the Lender in respect of
any of the Security Documents or with respect to the Borrower’s Indebtedness
will affect the liability of the Borrower hereunder and nothing but the actual
payment in full by the Borrower to the Lender of the Borrower’s Indebtedness
will discharge the Borrower or any of the Security Documents.

     

    
      	
              12.

            	
              EVENTS OF
      DEFAULT

            


    

     

    12.1                      Notwithstanding
and without prejudice to the demand nature of the Loan, at the option of the
Lender, the Borrower’s Indebtedness will immediately become due and payable and
this Agreement and the Security Documents will become enforceable upon the
happening of any one or more of the following events:

     

    
      	
               
      

            	
              (a)

            	
              if
      the Borrower:

            


    

     

    
      	
               
      

            	
              (i)

            	
              fails
      to make any payment of principal, interest, or other money payable by it
      hereunder or under any of the Security Documents when the same becomes due
      hereunder or thereunder which failure continues unremediated for more than
      Five (5) days, or

            


    

     

    
      	
               
      

            	
              (ii)

            	
              fails
      to observe or perform any covenant contained in this Agreement or any of
      the Security Documents and upon notice by the Lender, the Borrower fails
      to cure the same within Thirty (30) days of the Borrower’s receipt of such
      notice;

            


    

     

    
      	
               
      

            	
              (b)

            	
              if
      any representation or warranty given by or on behalf of the Borrower is
      untrue in any material respect;

            


    


    
      
         


      

      
        9

        
          

        

      

      
         


      

    


     

    
      	
               
      

            	
              (c)

            	
              if
      an order is made or a resolution is passed for the winding-up of the
      Borrower, or if a petition is filed for the winding-up of the
      Borrower;

            


    

     

    
      	
               
      

            	
              (d)

            	
              if
      the Borrower commits or threatens to commit any act of bankruptcy; becomes
      insolvent; or makes an assignment or proposal under applicable federal,
      state or other legislation in any jurisdiction, a general assignment in
      favour of its creditors, or a bulk sale of its assets; or if a bankruptcy
      petition is filed or presented against the
  Borrower;

            


    

     

    
      	
               
      

            	
              (e)

            	
              if
      a receiver, receiver and manager, or receiver-manager, or any person with
      like powers, is appointed for all or any of the property, assets and
      undertakings of the Borrower;

            


    

     

    
      	
               
      

            	
              (f)

            	
              if
      the Borrower permits any sum which has been admitted as due by it, or is
      not disputed to be due by it, and which forms or is capable of being made
      a charge upon any of its property, assets and undertakings in priority to
      any charge created by any of the Security Documents, to remain unpaid for
      30 days after proceedings have been taken to enforce the
      same;

            


    

     

    
      	
               
      

            	
              (g)

            	
              if
      the Borrower ceases to carry on any material aspect of its
      business;

            


    

     

    
      	
               
      

            	
              (h)

            	
              if
      the Borrower makes default in payment of any of the Borrower’s
      Indebtedness or liability to the Lender, whether secured by the Security
      Documents or not;

            


    

     

    
      	
               
      

            	
              (i)

            	
              if
      the holder (other than the Lender) of any Lien against the property,
      assets and undertakings of the Borrower, any subsidiary of the Borrower,
      does anything to enforce or realize on such Lien, and if, in the
      reasonable opinion of the Lender, such enforcement or realization would
      have a material adverse effect on the security for the Borrower’s
      Indebtedness or on the Borrower’s ability to repay the Borrower’s
      Indebtedness;

            


    

     

    
      	
               
      

            	
              (j)

            	
              if,
      without the prior written consent of the Lender, the Borrower transfers
      its property, assets or undertakings or any material part thereof to any
      other Person;

            


    

     

    
      	
               
      

            	
              (k)

            	
              if
      any execution, sequestration, extent, or any other process of any kind is
      levied upon or enforced against any part of the property, assets or
      undertakings  of the Borrower, any subsidiary of the Borrower
      and remains unsatisfied for a period of Thirty (30) days as to personal
      property, unless such process is disputed in good faith and, in the
      reasonable opinion of the Lender, does not jeopardize or impair the
      security constituted by the Security Documents in any material
      way;

            


    

     

    
      	
               
      

            	
              (l)

            	
              if
      a distress or analogous process is levied upon the any of the property,
      assets or undertakings of the Borrower, any subsidiary of the Borrower, or
      any part thereof, unless the process is disputed in good faith and
      adequate security is given to pay the amount claimed in full;
      and

            


    


    
      
         


      

      
        10

        
          

        

      

      
         


      

    


     

    
      	
               
      

            	
              (m)

            	
              if,
      without the prior written consent of the Lender, the Borrower grants a
      Lien against any of its property, assets or undertakings other than in
      favour of the Lender or the holder of a Prior Permitted
    Lien.

            


    

     

    
      	
              13.

            	
              WAIVER

            


    

     

    13.1                      The
Lender may waive any breach by the Borrower of any of the provisions contained
in this Agreement or in the Security Documents or any default by the Borrower in
the observance or performance of any covenant or condition required to be
observed or performed by the Borrower under the terms of this Agreement or any
of the Security Documents; but any waiver by the Lender of such breach or
default, or any failure to take any action to enforce its rights hereunder or
under any of the Security Documents, will not extend to or be taken in any
manner whatsoever to affect any subsequent breach or default or the rights
resulting therefrom.

     

    
      	
              14.

            	
              REMEDIES UNDER THIS
      AGREEMENT AND THE SECURITY
DOCUMENTS

            


    

     

    14.1                      Any
Event of Default by the Borrower under this Agreement or under any of the
Security Documents will constitute an Event of Default under the remainder of
the Security Documents.

     

    14.2                      All
rights and remedies stipulated for the Lender hereunder or in any of the
Security Documents will be deemed to be in addition to and not restrictive of
the right and remedies which the Lender might be entitled to at law or in
equity; and the Lender may realize on the Security Documents or any part thereof
in any manner and in such order as it may be advised, and any such realization
by any means will not bar realization of any other security or any part or parts
thereof, nor will any single or partial exercise of any right or remedy preclude
any other or further exercise thereof, nor will any failure on the part of the
Lender to exercise, or any delay in exercising any rights under this Agreement
or any of the Security Documents operate as a waiver.

     

    14.3                      The
acceptance by the Lender of any further security or of any payment of or on
account of any of the Borrower’s Indebtedness after a Default or of any payment
on account of any past Default will not be construed to be a waiver of any right
in respect of any future default or of any past default not completely cured
thereby; and the Lender may, in its uncontrolled discretion, exercise any and
all rights, powers, remedies and recourses available to it in accordance with
this Agreement and the Security Documents concurrently or individually without
the necessity of any election.

     

    
      	
              15.

            	
              LAPSE AND CANCELLATION
      PERIODIC REVIEW

            


    

     

    15.1                      If,
in the opinion of the Lender, any material adverse change in risk occurs or if
the Borrower fails to comply with the conditions herein, then the Lender’s
obligations to continue to make Advances hereunder may, at the option of the
Lender, be withdrawn or cancelled.


    
      
         


      

      
        11

        
          

        

      

      
         


      

    


     

    16.                      MISCELLANEOUS

     

    16.1                      If
for the purpose of obtaining or enforcing any judgment on any matter under this
Agreement in any court in any jurisdiction, it becomes necessary to convert into
any other currency (such other currency being hereinafter called the “Judgment Currency”) an amount due in
respect of the Borrower’s Indebtedness, then the conversion shall be made at the
option of the Lender at the Rate of Exchange prevailing either on the Business
Day before the date of default or on the Business Day before the day on which
the judgment is given (the date as of which such conversion is made being
hereinafter called the “Currency Conversion Date”).  If there is
a change between the Rate of Exchange in effect on the Conversion Date (or any
other date which shall be specified in any judgment or judicial award) and the
Rate of Exchange in effect on the date of payment, then the Borrower covenants
and agrees to pay such additional amounts, if any, but in any event not a lesser
amount, as may be necessary, together with the amount paid in the Judgment
Currency converted at the Rate of Exchange in effect on the date of payment, to
produce the amount in the currency of the said amount due in respect of the
Borrower’s Indebtedness which could have been purchased with the amount of
Judgment Currency stipulated in the judgment or judicial award at the Rate of
Exchange in effect on the Currency Conversion Date or such other date as
specified in such judgment or judicial award.  Any amount due under
this clause shall be due as a separate and independent debt and shall not be
affected by judgment being obtained for amounts otherwise due under or in
respect of the Borrower’s Indebtedness.  For the purposes of this
clause, “Rate of Exchange” means, for any
relevant date and currency, the spot rate at which any large commercial bank, in
accordance with its normal practice, is able on the relevant date to purchase
such currency with the Judgment Currency and includes premiums and costs of
exchange payable in connection with such purchase.

     

    16.2                      Each
of the parties hereto will forthwith at all times, and from time to time, at the
Borrower’s sole cost and expense, do, execute, acknowledge and deliver, or cause
to be done, executed, acknowledged and delivered, all such further acts, deeds,
documents and assurances which, in the opinion of a Lender, acting reasonably,
are necessary or advisable for the better accomplishing and effecting of the
intent of this Agreement.

     

    16.3                      The
Borrower will pay all legal costs, registration fees and other costs incurred by
the Lender in investigating title, preparing this Agreement and the Security
Documents and in perfecting the security for the Borrower’s
Indebtedness

     

    16.4                      None
of the execution and delivery of the Security Documents, the registration of the
Security Documents and making of any Advance will in any way merge or extinguish
this Agreement or the terms and conditions hereof, which will continue in full
force and effect.

     

    16.5                      In
the event of any inconsistency or conflict between any of the provisions of this
Agreement and any of the provisions of the Security Documents, the provisions of
this Agreement will prevail; but the omission from this Agreement of any
covenant, agreement, term, or condition contained in any of the Security
Documents will not be considered to be an inconsistency or a
conflict.


    
      
         


      

      
        12

        
          

        

      

      
         


      

    


     

    16.6                      Neither
this Agreement nor any benefits hereunder may be transferred, assigned or
otherwise disposed of by the Borrower to any Person without the prior written
consent of the Lender.

     

    16.7                      No
amendment, waiver or modification of, or agreement collateral to, this Agreement
or any of the Security Documents will be enforceable against the Lender unless
it is by a formal instrument in writing expressed to be a modification of this
Agreement or the Security Documents, as the case may be, and executed in the
same fashion as this Agreement.

     

    16.8                      All
covenants and other agreements in this Agreement contained by or on behalf of
any of the parties hereto will bind and enure to the benefit of the respective
successors and assigns of the parties hereto (including, without limitation, any
transferee) whether so expressed or not; provided, however, that the Borrower
may not assign its rights or obligations hereunder to any Person.

     

    16.9                      Any
notice required or permitted to be given under this Agreement will be in writing
and may be given by delivering, sending by electronic facsimile transmission or
other means of electronic communication capable of producing a printed copy, or
sending by prepaid registered mail posted in Canada or the United States, as the
case may be, the notice to the following address or number:

     

    
      	
               
      

            	
              (a)

            	
              If
      to the Borrower:

            


    

     

    PANGLOBAL
BRANDS INC.

    2853 E.
Pico Blvd

    Los
Angeles, CA 90023 USA

     

    Attention:         Charles
Lesser

     

    Facsimile
No.:  (323) 266-6505

    email:
charles@panglobalbrand.com

     

    with a
copy to (which does not constitute notice):

     

    CLARK
WILSON LLP

    800 – 885
West Georgia Street

    Vancouver,
BC  V6C 3H1

    Canada

     

    Attention:        Bernard
Pinsky

     

    Facsimile
No.:  (604) 687-6314


    
      
         


      

      
        13

        
          

        

      

      
         


      

    


     

    
      	
               
      

            	
              (b)

            	
              If
      to the Lender:

            


    

     

    PROVIDENCE
WEALTH MANAGEMENT LTD,

    c/o Mr.
Karim Khoury, Chabrier & Partners (Reed Smith),

    3 rue du
Mont-Blanc

    P.O. Box
1363 CH - 1211

    Geneva 1
Switzerland;

     

    Attention:
Charles Shaker

     

    Fax
Number: 1.647438.4464

    Email:
Charles@providence.bb

     

    (or to
such other address or number as any party may specify by notice in writing to
another party).

     

    Any
notice delivered or sent by electronic facsimile transmission or other means of
electronic communication capable of producing a printed copy on a business day
will be deemed conclusively to have been effectively given on the day the notice
was delivered, or the transmission was sent successfully to the number set out
above, as the case may be.  Any notice sent by prepaid registered mail
will be deemed conclusively to have been effectively given on the third business
day after posting; but if at the time of posting or between the time of posting
and the third business day thereafter there is a strike, lockout, or other
labour disturbance affecting postal service, then the notice will not be
effectively given until actually delivered.

     

    16.10                      The
descriptive headings of the several sections of this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.

     

    16.11                      This
Agreement will be construed and enforced in accordance with, and the rights of
the parties will be governed by the laws of the State of California and
applicable federal laws thereto.  The Lender and the Borrower hereby
attorn to the courts of competent jurisdiction located in the County of Los
Angeles, State of California in any proceedings hereunder.

     

    16.12                      The
Lender acknowledges that it has consulted with and is represented by separate
legal counsel.

     

    16.13                      This
Agreement may be executed simultaneously in two or more counterparts, each of
which will be deemed an original, and it will not be necessary in making proof
of this Agreement to produce or account for more than one such
counterpart.  This Agreement may be executed by delivery of executed
signature pages by fax or other form of electronic transmission and such
transmission will be effective for all purposes.

     

    16.14                      This
Agreement, the schedules attached hereto and the Security Documents contain the
entire agreement between the parties with respect to the subject matter hereof
and supersede all prior arrangements and understandings, both written and oral,
expressed or implied, with respect thereto.  Any preceding
correspondence is expressly superseded and terminated by this
Agreement.


    
      
         


      

      
        14

        
          

        

      

      
         


      

    


     

    


     

    16.15                      All
covenants hereunder will be given independent effect so that if a particular
action or condition is prohibited by any one of such covenants, the fact that it
would be permitted by an exception to, or otherwise be in compliance within the
limitations of, another covenant will not avoid the occurrence of a Default or
Event of Default if such action is taken or such condition exists.

     

    16.16                      Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement, and any such prohibition or unenforceability in
any jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.

     

    16.17                      At
such time as the Loan is repaid in full, Lender shall promptly release and
discharge the Security Documents to the Borrower (or its designee), and release
all security interests which are granted to Lender pursuant
hereto.  Under such circumstances, the Lender shall, upon the
Borrower’s request, promptly return to the Borrower all original copies of this
Agreement and the Security Agreement, and shall promptly execute such
termination statements and other documents as may be required by Borrower to
evidence the same.

     

    IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed and delivered by
their respective officers thereunto duly authorized on the 24th day of November,
2009.

     

    PANGLOBAL
BRANDS INC.

     

    Per:           /s/ Charles
Lesser

    Authorized Signatory

     

    PROVIDENCE
WEALTH MANAGEMENT LTD

     

    Per:           /s/
signed

    Authorized Signatory

     

    This is
page 3 of an agreement entitled LOAN AGREEMENT dated for
reference November 24, 2009 made by PANGLOBAL BRANDS INC. in
favour of Providence Wealth
Management Ltd  in connection with loan(s) aggregating
US$290,000.00


    
      
         


      

      
        15