Ex 10.1


    Exhibit
      10.1

    


    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY
      STATE, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
      OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT
      UNDER THE ACT AND ANY APPLICABLE STATE LAWS, (ii) TO THE EXTENT APPLICABLE,
      RULE
      144 UNDER THE ACT (OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION
      OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE
      REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, THAT AN EXEMPTION FROM
      REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW IS
      AVAILABLE.

    


    PNG
      VENTURES, INC.

    


    CONVERTIBLE
      PROMISSORY NOTE

    (8%
      Interest)

    


    $120,000

    


    Issued: March
      31, 2006

    Maturing: March
      31, 2007

    


    


    PNG
      Ventures, Inc, a Nevada corporation (the “Company”) hereby promises to pay to
      the order of Mark L. Baum (the Noteholder), at such place as Noteholder may
      from
      time to time designate, in lawful money of the United States of America, and
      in
      immediately payable funds, $120,000
      due and
      payable on March
      31, 2007.

    


    1. PREPAYMENT.
      This
      Convertible Promissory Note (the “Note”) may be prepaid, in whole or in part, by
      the Company without the prior written consent of the Noteholder.

    


    2. TRANSFER
      and ASSIGNMENT.
      This
      Note shall be freely transferable and assignable by the Noteholder provided
      such
      transfer is in compliance with applicable federal and state securities
      laws.

    


    3. CONVERSION
      OF NOTE. The
      Noteholder shall have the right from and after the date of the issuance of
      this
      Note and then at any time until this Note is fully paid, to convert any
      outstanding and unpaid principal portion of this Note, into fully paid and
      nonassessable shares of the common stock of the Company as such stock exists
      on
      the date of issuance of this Note, or is hereafter be changed or reclassified,
      at a “Conversion Price” equal to the lesser of: (i) $0.51 per share or, (ii) the
      current “Market Price,” which shall be equal to fifty percent (50%) of the
      average of the three lowest closing bid prices of the Company’s common stock as
      reported by the principal market for the thirty trading days preceding the
      date
      of conversion. The Conversion Price shall be subject to proportional adjustment
      for reclassification, Stock Splits, Combinations and Dividends.

    


    4. CONVERSION
      PRIVILEGES.
      The
      conversion privileges of this Note shall remain in full force and effect
      immediately from the date hereof and until the Note is paid in full regardless
      of the occurrence of an Event of Default. 

    


    5. DEFAULT. The
      occurrence of any one of the following events shall constitute an Event of
      Default:

    


    a. The
      commencement by the Company of any voluntary proceeding under any bankruptcy,
      reorganization, arrangement, insolvency, readjustment or debt, receivership,
      dissolution, or liquidation law or statute or any jurisdiction, whether now
      or
      hereafter in effect; or the adjudication of the Company as insolvent or bankrupt
      by a decree of a court of competent jurisdiction; or the petition or application
      by the Company for, acquiescence in, or consent by the Company to, the
      appointment of any receiver or trustee for the Company or for all or a
      substantial part of the property of the Company; or the assignment by the
      Company for the benefit of creditors; or the written admission of the Company
      of
      its inability to pay its debts as they mature;

    


    b. The
      commencement against the Company of any proceeding relating to the Company
      under
      any bankruptcy, reorganization, arrangement, insolvency, adjustment of debt,
      receivership, dissolution or liquidation law or statute or any jurisdiction,
      whether now or hereafter in effect, provided, however, that the commencement
      of
      such a proceeding shall not constitute an Event of Default unless the Company
      consents to the same or admits in writing the material allegations of same,
      or
      said proceeding shall remain undismissed for 20 days; or the issuance of any
      order, judgment or decree for the appointment of a receiver or trustee for
      the
      Company or for all or a substantial part of the property of the Company, which
      order, judgment or decree remains undismissed for 20 days; or a warrant of
      attachment, execution, or similar process shall be issued against any
      substantial part of the property of the Company; or

    


    6. ACCELERATION. Upon
      the
      occurrence of an Event of Default as described under subsections (a) and (b)
      of
      Section 5, Noteholder, upon written notice to the Company, shall be entitled
      to
      declare all unpaid past, and all future payments required under the Note,
      immediately due and payable and which shall be paid by the Company within 30
      days of the Company’s receipt of the written notice.

    


    7. NOTICES.
      Notices
      to be given hereunder shall be in writing and shall be deemed to have been
      sufficiently given if delivered personally or sent by overnight courier or
      messenger or sent by registered or certified mail (air mail if overseas), return
      receipt requested, or by telex, facsimile transmission, telegram or similar
      means of communication. Notice shall be deemed to have been received on the
      date
      of personal delivery, telex, facsimile transmission, telegram or similar means
      of communication, or if sent by overnight courier or messenger, shall be deemed
      to have been received on the next delivery day after deposit with the courier
      or
      messenger, or if sent by certified or registered mail, return receipt requested,
      shall be deemed to have been received on the third business day after the date
      of mailing. The address of the Company and the Noteholder is as set forth in
      the
      Subscription Agreement.

    


    8. GOVERNING
      LAW.
      THIS
      NOTE HAS BEEN DELIVERED IN THE STATE OF CALIFORNIA AND SHALL BE GOVERNED BY
      AND
      CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA
      APPLICABLE TO CONTRACT MADE AND TO BE PERFORMED ENTIRELY THEREIN, WITHOUT GIVING
      EFFECT TO THE RULES AND CONFLICTS OF LAW. 

    


    9. ATTORNEYS
      FEES.
      In the
      event any holder hereof shall refer this Note to an attorney for collection,
      the
      Company agrees to pay all the costs and expenses incurred in attempting or
      effecting collection hereunder, including reasonable attorney’s fees, whether or
      not suit is instituted.

    


    10. CONFORMITY
      WITH LAW.
      It
      is the
      intention of the Company and of the Noteholder to conform strictly to applicable
      usury and similar laws. Accordingly, notwithstanding anything to the contrary
      in
      this Note, it is agreed that the aggregate of all charges which constitute
      interest under applicable usury and similar laws that are contract for,
      chargeable or receivable under or in respect of this Note, shall under no
      circumstances exceed the maximum amount of interest permitted by such laws,
      and
      any excess, whether occasioned by acceleration or maturity of this Note or
      otherwise, shall be canceled automatically, and if theretofore paid, shall
      be
      either refunded to the Company or credited on the principal amount of this
      Note.

    


    11. MISCELLANEOUS.
      This
      Note
      may only be changed, modified or amended in writing by the mutual consent of
      Noteholder and the Company. The provisions of this Note may only be waived
      in or
      by a writing signed by the party against whom enforcement of any waiver is
      sought. This Note embodies the entire understanding between Noteholder and
      the
      Company and merges all prior discussions or communications between them. Time
      is
      of the essence of this Note and of each and every provisions
      thereof.

    


    


    


    IN
      WITNESS WHEREOF, the Company has signed and sealed this Note and delivered
      it as
      of the date first set forth above.

    


    


    


    PNG
      VENTURES, INC.

    A
      Nevada
      corporation

    


    


    


    _______________________________________

    By:
      Mark
      L. Baum

    Its:
      President