Document:

Filed by sedaredgar.com - Panglobal Brands Inc. - Exhibit 10.3

THIS PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT RELATES TO AN
OFFERING OF SECURITIES IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S.
PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). 

THE SECURITIES TO WHICH THIS PRIVATE PLACEMENT SUBSCRIPTION
AGREEMENT (THE “SUBSCRIPTION AGREEMENT”) RELATES HAVE NOT BEEN REGISTERED WITH
THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE, AND WILL BE ISSUED IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. 

PANGLOBAL BRANDS INC. 

PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT SHARES 

NON-UNITED STATES RESIDENT SUBSCRIBERS 

INSTRUCTIONS TO PURCHASER 

 

	1. 	
      The purchaser is to complete all the information in the
      boxes on page 1 and sign where indicated with an “X”.

	 	 
	2. 	
      IF THE PURCHASER IS A CANADIAN RESIDENT AND IS AN
      ACCREDITED INVESTOR, then complete the “Accredited Investor
      Questionnaire” that starts on page 5.

	 	 
	3. 	
      IF THE PURCHASER IS A CANADIAN RESIDENT AND IS NOT AN
      ACCREDITED INVESTOR, and not purchasing a minimum of $150,000 in value of
      securities, complete the “Friends and Family” Questionnaire that
      starts on page 8.

	 	 
	4. 	
      RESIDENTS OF COUNTRIES OUTSIDE THE UNITED STATES AND
      CANADA AND CANADIAN RESIDENTS PURCHASING A MINIMUM OF $150,000 IN VALUE OF
      SECURITIES may subscribe without filling in an Accredited Investor or
      Friends and Family Questionnaire.

	 	 
	5. 	
      All other information must be filled in where
      appropriate.

This is Page 2 of 15 pages of a subscription agreement and
related appendices, schedules and forms. Collectively, these pages together are
referred to as the “Subscription Agreement”. 

PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT 

TO:        PANGLOBAL BRANDS
INC. (the “Issuer”), of 2853 E. Pico Blvd, Los
Angeles, CA 90023 CA 90255, U.S.A. 

Subject and pursuant to the terms set out in the Terms on pages
  3 to 4, the General Provisions on pages 9 to 14 and the other schedules and
  appendices attached which are hereby incorporated by reference, the Purchaser
  hereby irrevocably subscribes for, and on Closing will purchase from the Issuer,
  the following securities at the following price: 

  	____________________________Units
      
	 
	U.S.$0.10 per Unit for a total purchase Price
          of US$ ____________________________________________________________

	The Purchaser owns, directly or indirectly, the following securities
        of the Issuer: 
	 
	 
	[Check if applicable] The Purchaser is [ ] an insider
        of the Issuer or [ ] a member of the professional group 

The Purchaser directs the Issuer to issue, register and deliver
  the certificates representing the Purchased Securities as follows: 

  	REGISTRATION INSTRUCTIONS 	 	DELIVERY INSTRUCTIONS 
	 	 	 
	Name to appear on
        certificate 	 	Name
        and account reference, if applicable 
	 	 	 
	Account reference
        if applicable 	 	Contact
        name 
	 	 	 
	Address 	 	Address
      
	 	 	 
	  	 	Telephone Number 

  

	EXECUTED by the Purchaser this
        day of _____________ , 2009. By executing this Subscription Agreement,
        the Purchaser certifies that the Purchaser and any beneficial purchaser
        for whom the Purchaser is acting is resident in the jurisdiction
        shown as the “Address of Purchaser”. 

	WITNESS: 	 	EXECUTION BY PURCHASER: 
	 	 	 
	 	 	X 
	Signature of Witness
      	 	Signature of individual (if Purchaser is an individual)
      
	 	 	X 
	Name of Witness 	 	Authorized signatory (if Purchaser is not an individual)
      
	 	 	  
	Address of Witness
      	 	Name
        of Purchaser (please print) 
	 	 	  
	 	 	Name
        of authorized signatory (please print) 
	Accepted this day
        of ____________, 2009 	 	  
	PANGLOBAL BRANDS
        INC. 	 	Address
        of Purchaser (residence) 
	Per: 	 	  
	 	 	Telephone Number 
	Authorized Signatory
      	 	  
	 	 	E-mail
        address 
	 	 	  
	 	 	Social Security/Insurance No.: 

By signing this acceptance, the Issuer agrees to be bound by
the Terms on pages 3 to 4, the General Provisions on pages 9 to 14 and the other
schedules and appendices incorporated by reference. If funds are delivered to
the Company’s lawyers, they are authorized to release the funds to the Issuer.

	
Subscription Agreement (with related appendices, schedules and forms)
		
Page 3 of 15
	

 TERMS 

	
Reference date of this Subscription
		 

	
	
Agreement
		
April 9, 2009 (the “Agreement Date”)
	

 The Offering 

	 The Issuer 	 Panglobal Brands Inc.” (the “Issuer”)
    
	  	  
	 Offering 	 The offering consists of units
        (“Units”) each comprising one common share (“Shares”)
        of the Issuer and one half of one common share purchase warrant (“Warrants”).
      

	  	  
	 Warrants 	 Each whole Warrant is exercisable for 12 months
      from Closing at $0.25 per share. 
	  	  
	 Purchased Securities 	 The “Purchased Securities” under
      this Subscription Agreement are Shares and Warrants. 
	  	  
	 Total Amount 	 Up to US $1,000,000 from the sale of Units.
    
	  	  
	 Issue Price 	 US$0.10 per Unit . 
	  	  
	 Selling Jurisdictions 	 The Units may be sold in Canada
        or in other jurisdictions other than the United States where they may
        be lawfully sold (the “Selling Jurisdictions”).
      

	  	  
	 Exemptions  	 The offering will be made in
        accordance with the following exemptions from the prospectus requirements:
      

	  	  
	  	        
         (a) Regulation S under United States Securities Act of 1933; 

	  	  
	  	        
         (b) the “accredited investor” exemption in Canada
        (section 2.3 of National Instrument 45-106); 

	  	  
	  	        
         (c) the “$150,000 purchaser” exemption in Canada
        (section 2.10 of National Instrument 45-106); or 

	  	  
	  	        
         (d) such other exemptions as may be available the securities laws
        of the Selling Jurisdictions. 

	  	  
	 No Registration of Securities 	 The Units will not be registered
        with the SEC and will be tradable in compliance with Rule 144 restricted
        periods. . 

	  	  
	 Resale restrictions and legends 	 The Purchaser acknowledges
        that the certificates representing the Purchased Securities will bear
        the following legends: 

	  	  
	  	 “THESE SECURITIES HAVE
        NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
        SECURITIES COMMISSION OF ANY STATE AND HAVE BEEN ISSUED IN RELIANCE UPON
        AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
        (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED
        OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
        SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
        NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
        IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.” 

	  	  
	  	 Purchasers are advised to consult
        with their own legal counsel or advisors to determine the resale restrictions
        that may be applicable to them. 

	  	  
	  	 If Purchaser is Canadian resident,
        Purchaser has requested the Issuer not to include legend under Canadian
        Securities laws 

	Subscription Agreement (with related appendices, schedules and forms) 	Page 4 of 15 

	Closing Date 	
      The completion of the sale and purchase of the Units will
      take place in one or more closings, on a date or dates as agreed to by the
      Issuer and the Purchaser. Payment for, and delivery of the Units, is
      scheduled to occur on or about April 30, 2009 or such later date as may be
      agreed upon by the Issuer and the Purchaser (the “Closing Date”).
      

	  	
       

	Additional definitions 	
      In the Subscription Agreement, the following words have
      the following meanings unless otherwise indicated: 

	  	
       

		
                 (a)
      “Purchased Securities” means the Shares and Warrants purchased
      under this Subscription Agreement; and 

	  	
       

		
                 (b)
      “Securities” means the Shares, the Warrants and the common shares
      issued upon exercise of the Warrants. 

The Issuer 

	Jurisdiction of organization 	
      The Issuer is incorporated under the laws of the State of
      Delaware. 

	  	
       

	Stock exchange listings 	
      Certain market makers make market in the Issuer’s stock
      on the US over the counter bulletin board 

	  	
       

	“Securities Legislation Applicable 
to the
      Issuer” 	
      The “Securities Legislation Applicable to the
      Issuer” is the US Securities Exchange Act of 1934, and the Securities
      Commission having jurisdiction over the Issuer is the United States
      Securities and Exchange Commission. 

End of Terms

	Subscription Agreement (with related appendices, schedules and forms) 	Page 5 of 15 

NATIONAL INSTRUMENT 45-106 

ACCREDITED INVESTOR QUESTIONNAIRE 

The purpose of this Questionnaire is to assure Panglobal
Brands Inc.” (the “Company”) that the undersigned (the “Subscriber”) will
meet certain requirements for the registration and prospectus exemptions
provided for under National Instrument 45-106 (“NI 45-106”), as adopted by the
Securities Commissions in Canada, in respect of a proposed private placement of
securities by the Company (the “Transaction”). The Company will rely on the
information contained in this Questionnaire for the purposes of such
determination. 

The undersigned Subscriber covenants, represents and warrants
to the Company that: 

	 	1. 	
      the Subscriber has such knowledge and experience in
      financial and business matters as to be capable of evaluating the merits
      and risks of the Transaction and the Subscriber is able to bear the
      economic risk of loss arising from such Transaction;

	 	 	 
	 	2. 	
      the Subscriber satisfies one or more of the categories of
      “accredited investor” (as that term is defined in NI 45-106) indicated
      below (please check the appropriate box):

		[ ] 	
      (a) a Canadian financial institution as defined in
      National Instrument 14-101, or an authorized foreign bank listed in
      Schedule III of the Bank Act (Canada); 

	 	  	
       

		[ ] 	
      (b) the Business Development Bank of Canada incorporated
      under the Business Development Bank Act (Canada); 

	 	  	
       

		[ ] 	
      (c) a subsidiary of any person referred to in any of the
      foregoing categories, if the person owns all of the voting securities of
      the subsidiary, except the voting securities required by law to be owned
      by directors of that subsidiary; 

	 	  	
       

		[ ] 	
      (d) an individual registered or formerly registered under
      securities legislation in a jurisdiction of Canada, as a representative of
      a person or company registered under securities legislation in a
      jurisdiction of Canada, as an adviser or dealer, other than a limited
      market dealer registered under the Securities Act (Ontario) or the
      Securities Act (Newfoundland); 

	 	  	
       

		[ ] 	
      (e) an individual registered or formerly registered under
      the securities legislation of a jurisdiction of Canada as a representative
      of a person referred to in paragraph (d); 

	 	  	
       

		[ ] 	
      (f) the government of Canada or a province, or any crown
      corporation or agency of the government of Canada or a province;

	 	  	
       

		[ ] 	
      (g) a municipality, public board or commission in Canada
      and a metropolitan community, school board, the Comite de gestion de la
      taxe scholaire de l’ile de Montreal or an intermunicipal management board
      in Québec; 

	 	  	
       

		[ ] 	
      (h) a national, federal, state, provincial, territorial
      or municipal government of or in any foreign jurisdiction, or any agency
      thereof; 

	 	  	
       

		[ ] 	
      (i) a pension fund that is regulated by either the Office
      of the Superintendent of Financial Institutions (Canada) or a pension
      commission or similar regulatory authority of a jurisdiction of Canada;
      

	Subscription Agreement (with related appendices, schedules and forms) 	Page 6 of 15 

	 	[ ] 	
      (j) an individual who either alone or with a spouse
      beneficially owns, directly or indirectly, financial assets (as defined in
      NI 45-106) having an aggregate realizable value that, before taxes but net
      of any related liabilities, exceeds CDNUS$1,000,000;

	 	 	 
	 	[ ] 	
      (k) an individual whose net income before taxes exceeded
      CDNUS$200,000 in each of the two more recent calendar years or whose net
      income before taxes combined with that of a spouse exceeded US$300,000 in
      each of those years and who, in either case, reasonably expects to exceed
      that net income level in the current calendar year;

	 	 	 
	 	[ ] 	
      (l) an individual who, either alone or with a spouse, has
      net assets of at least CDN US$5,000,000;

	 	 	 
	 	[ ] 	
      (m) a person, other than an individual or investment
      fund, that had net assets of at least CDNUS$5,000,000 as reflected on its
      most recently prepared financial statements;

	 	 	 
	 	[ ] 	
      (n) an investment fund that distributes it securities
      only to persons that are accredited investors at the time of distribution,
      a person that acquires or acquired a minimum of CDN$150,000 of value in
      securities, or a person that acquires or acquired securities under
      Sections 2.18 or 2.19 of NI 45-106;

	 	 	 
	 	[ ] 	
      (o) an investment fund that distributes or has
      distributed securities under a prospectus in a jurisdiction of Canada for
      which the regulator or, in Québec, the securities regulatory authority,
      has issued a receipt;

	 	 	 
	 	[ ] 	
      (p) a trust company or trust corporation registered or
      authorized to carry on business under the Trust and Loan Companies Act
      (Canada) or under comparable legislation in a jurisdiction of Canada
      or a foreign jurisdiction, acting on behalf of a fully managed account
      managed by the trust company or trust corporation, as the case may
    be;

	 	 	 
	 	[ ] 	
      (q) a person acting on behalf of a fully managed account
      managed by that person, if that person (i) is registered or authorized to
      carry on business as an adviser or the equivalent under the securities
      legislation of a jurisdiction of Canada or a foreign jurisdiction, and
      (ii) in Ontario, is purchasing a security that is not a security of an
      investment fund;

	 	 	 
	 	[ ] 	
      (r) a registered charity under the Income Tax Act
      (Canada) that, in regard to the trade, has obtained advice from an
      eligibility advisor or an advisor registered under the securities
      legislation of the jurisdiction of the registered charity to give advice
      on the securities being traded;

	 	 	 
	 	[ ] 	
      (s) an entity organized in a foreign jurisdiction that is
      analogous to any of the entities referred to in paragraphs (a) to (d) or
      paragraph (i) in form and function;

	 	 	 
	 	[ ] 	
      (t) a person in respect of which all of the owners of
      interests, direct, indirect or beneficial, except the voting securities
      required by law are persons or companies that are accredited
    investors.

	 	 	 
	 	[ ] 	
      (u) an investment funds that is advised by a person
      registered as an advisor or a person that is exempt from registration as
      an advisor; or

	 	 	 
	 	[ ] 	
      (v) a person that is recognized or designated by the
      securities regulatory authority or, except in Ontario and Québec, the
      regulator as (i) an accredited investor, or (ii) an exempt purchaser in
      Alberta or British Columbia after this instrument comes into
  force;

	Subscription Agreement (with related appendices, schedules and forms) 	Page 7 of 15 

The Subscriber acknowledges and agrees that the Subscriber may
be required by the Company to provide such additional documentation as may be
reasonably required by the Company and its legal counsel in determining the
Subscriber’s eligibility to acquire the Units under relevant Legislation. 

                                 
IN WITNESS WHEREOF, the undersigned has executed this Questionnaire as of the
________ day of __________________, 2009. 

	If a Corporation, Partnership or Other Entity: 	 	If an Individual: 
	  	 	
	 	 	X 
	Print or Type Name of Entity 	 	Signature 
	  	 	  
	 	 	 
	X 	 	 
    
	Signature of Authorized Signatory 	 	Print or Type Name 
	  	 	  
	 	 	 
	Type of Entity 	 	  

	Subscription Agreement (with related appendices, schedules and forms) 	Page 8 of 15 

Family, Friends and Business Associates
Questionnaire

IF THE SUBSCRIBER IS RESIDENT IN A
CANADIAN PROVINCE OR TERRITORY OTHER THAN ONTARIO IS NOT PURCHASING MORE THAN
$150,000 IN VALUE OF SECURITIES AND IS NOT AN ACCREDITED INVESTOR, HE OR SHE IS
TO CHECK ONE OR MORE OF THE FOLLOWING BOXES, AS APPROPRIATE: 

	 	(A) 	
      a director, officer, employee or control person of the
      Issuer 
	________
	 	  	
       
	 
	 	(B) 	
      a spouse, parent, grandparent, brother, sister or
      child of a director, senior officer or control person of the
      Issuer 
	________
	 	  	
       
	 
	 	(C) 	
      a close personal friend of a director, senior officer
      or control person of the Issuer 
	________
	 	  	
       
	 
	 	(D) 	
      a close business associate of a director, senior
      officer or control person of the Issuer 
	________

if the Subscriber is resident in Ontario, the Subscriber is
(tick one or more of the following boxes only if the Subscriber is resident
in Ontario): 

	 	(A) 	
      a founder of the Issuer 
	[ ]
	 	 	
       
	 
	 	(B) 	
      an affiliate of a founder of the Issuer 
	[ ]
	 	 	
       
	 
	 	(C) 	
      a spouse, parent, brother, sister, grandparent or child
      of a director, executive officer or founder of the Issuer 
	[ ]
	 	 	
       
	 
	 	(D) 	
      a person that is a control person of the Issuer 
	[ ]
	 	 	
       
	 
	 	(E) 	
      an accredited investor 
	[ ]
	 	 	
       
	 
	 	(F) 	
      purchasing as principal Securities with an aggregate
      acquisition cost of not less than CDN$150,000 
	[ ] 

If the Subscriber ticked boxes A-D above, name of director,
officer or employee of the Issuer with whom the Subscriber has a relationship:

_____________________________________________________________________________________

___________________________________________
Signature

___________________________________________
Print
or Type Name of Entity or Individual 

Date: _______________________, 2009 

	Subscription Agreement (with related appendices, schedules and forms) 	Page 9 of 15 

GENERAL PROVISIONS 

1.         
 DEFINITIONS 

1.1         In the
Subscription Agreement (including the first (cover) page, the Terms on pages 3
to 4, the General Provisions on pages 9 to 14 and the other schedules and
appendices incorporated by reference), the following words have the following
meanings unless otherwise indicated: 

	 	(a) 	
      “1933 Act” means the United States Securities Act
      of 1933, as amended;

	 	 	 
	 	(b) 	
      “Applicable Legislation” means the Securities
      Legislation Applicable to the Issuer (as defined on page 8) and all
      legislation incorporated in the definition of this term in other parts of
      the Subscription Agreement, together with the regulations and rules made
      and promulgated under that legislation and all administrative policy
      statements, blanket orders and rulings, notices and other administrative
      directions issued by the Commissions;

	 	 	 
	 	(c) 	
      “Closing” means the completion of the sale and
      purchase of the Purchased Securities;

	 	 	 
	 	(d) 	
      “Closing Date” has the meaning assigned in the
      Terms;

	 	 	 
	 	(e) 	
      “Closing Year” means the calendar year in which
      the Closing takes place;

	 	 	 
	 	(f) 	
      “Commissions” means the Commissions with
      Jurisdiction over the Issuer (as defined on page 4) and the securities
      commissions incorporated in the definition of this term in other parts of
      the Subscription Agreement;

	 	 	 
	 	(g) 	
      “Final Closing” means the last closing under the
      Private Placement;

	 	 	 
	 	(h) 	
      “General Provisions” means those portions of the
      Subscription Agreement headed “General Provisions” and contained on
      pages 9 to 15;

	 	 	 
	 	(i) 	
      “Private Placement” means the offering of the
      Units on the terms and conditions of this Subscription
Agreement;

	 	 	 
	 	(j) 	
      “Purchased Securities” has the meaning assigned in
      the Terms;

	 	 	 
	 	(k) 	
      “Regulatory Authorities” means the
    Commissions;

	 	 	 
	 	(l) 	
      “Securities” has the meaning assigned in the
      Terms;

	 	 	 
	 	(m) 	
      “Subscription Agreement” means the first (cover)
      page, the Terms on pages 3 to 4, the General Provisions on pages 9 to 14
      and the other schedules and appendices incorporated by reference;
    and

	 	 	 
	 	(n) 	
      “Terms” means those portions of the Subscription
      Agreement headed “Terms” and contained on pages 3 to
4.

1.2         In the
Subscription Agreement, the following terms have the meanings defined in
Regulation S: “Directed Selling Efforts”, “Foreign Issuer”,
“Substantial U.S. Market Interest”, “U.S. Person” and
“United States”. 

1.3         In the
Subscription Agreement, unless otherwise specified, currencies are indicated in
US dollars. 

1.4         In the
Subscription Agreement, other words and phrases that are capitalized have the
meanings assigned to them in the body hereof. 

	Subscription Agreement (with related appendices, schedules and forms) 	Page 10 of 15 

2.          
ACKNOWLEDGEMENTS, REPRESENTATIONS AND WARRANTIES OF PURCHASER

2.1        
Acknowledgements concerning offering 

The Purchaser acknowledges that: 

	 	(a) 	
      none of the Securities have been registered under the
      1933 Act, or under any state securities or "blue sky" laws of any state of
      the United States, and, unless so registered, may not be offered or sold
      in the United States or, directly or indirectly, to U.S. Persons, as that
      term is defined in Regulation S under the 1933 Act ("Regulation S"),
      except in accordance with the provisions of Regulation S, pursuant to an
      effective registration statement under the 1933 Act, or pursuant to an
      exemption from, or in a transaction not subject to, the registration
      requirements of the 1933 Act and in each case in accordance with
      applicable state and provincial securities laws;

	 	 	 
	 	(b) 	
      the Purchaser acknowledges that the Company has not
      undertaken, and will have no obligation, to register any of the Securities
      under the 1933 Act;

	 	 	 
	 	(c) 	
      the decision to execute this Agreement and acquire the
      Units hereunder has not been based upon any oral or written representation
      as to fact or otherwise made by or on behalf of the Company, and such
      decision is based entirely upon a review of information (the receipt of
      which is hereby acknowledged) which has been filed by the Company with the
      Securities and Exchange Commission (the "SEC");

	 	 	 
	 	(d) 	
      neither the SEC nor any other securities commission or
      similar regulatory authority has reviewed or passed on the merits of the
      Shares;

	 	 	 
	 	(e) 	
      there is no government or other insurance covering any of
      the Shares;

	 	 	 
	 	(f) 	
      there are risks associated with an investment in the
      Shares;

	 	 	 
	 	(g) 	
      the Purchaser has not acquired the Units as a result of,
      and will not itself engage in, any "directed selling efforts" (as defined
      in Regulation S under the 1933 Act) in the United States in respect of the
      Units which would include any activities undertaken for the purpose of, or
      that could reasonably be expected to have the effect of, conditioning the
      market in the United States for the resale of any of the Shares; provided,
      however, that the Purchaser may sell or otherwise dispose of the Units
      pursuant to registration thereof under the 1933 Act and any applicable
      state and provincial securities laws or under an exemption from such
      registration requirements;

	 	 	 
	 	(h) 	
      the Purchaser and the Purchaser's advisor(s) have had a
      reasonable opportunity to ask questions of and receive answers from the
      Company in connection with the distribution of the Units hereunder, and to
      obtain additional information, to the extent possessed or obtainable
      without unreasonable effort or expense, necessary to verify the accuracy
      of the information about the Company;

	 	 	 
	 	(i) 	
      the books and records of the Company were available upon
      reasonable notice for inspection, subject to certain confidentiality
      restrictions, by the Purchaser during reasonable business hours at its
      principal place of business, and all documents, records and books in
      connection with the distribution of the Units hereunder have been made
      available for inspection by the Purchaser, the Purchaser's lawyer and/or
      advisor(s);

	 	 	 
	 	(j) 	
      the Purchaser will indemnify and hold harmless the
      Company and, where applicable, its directors, officers, employees, agents,
      advisors and shareholders, from and against any and all loss, liability,
      claim, damage and expense whatsoever (including, but not limited to, any
      and all fees, costs and expenses whatsoever reasonably incurred in
      investigating, preparing or defending against any claim, lawsuit,
      administrative proceeding or investigation whether commenced or
      threatened) arising out of or based upon any representation or warranty of
      the Purchaser contained herein or in

	Subscription Agreement (with related appendices, schedules and forms) 	Page 11 of 15 

	 		
      any document furnished by the Purchaser to the Company in
      connection herewith being untrue in any material respect or any breach or
      failure by the Purchaser to comply with any covenant or agreement made by
      the Purchaser to the Company in connection therewith;

	 	 	 	 
	 	(k) 	
      the Shares are not listed on any stock exchange or
      automated dealer quotation system and no representation has been made to
      the Purchaser that any of the Shares will become listed on any stock
      exchange or automated dealer quotation system, except that currently
      market makers make a market for the Company's common shares on the NASD's
      OTC Bulletin Board;

	 	 	 	 
	 	(l) 	
      the Company will refuse to register any transfer of the
      Shares not made in accordance with the provisions of Regulation S,
      pursuant to an effective registration statement under the 1933 Act or
      pursuant to an available exemption from the registration requirements of
      the 1933 Act and in accordance with applicable state and provincial
      securities laws;

	 	 	 	 
	 	(m) 	
      the statutory and regulatory basis for the exemption
      claimed for the offer of the Shares, although in technical compliance with
      Regulation S, would not be available if the offering is part of a plan or
      scheme to evade the registration provisions of the 1933 Act or any
      applicable state and provincial securities laws;

	 	 	 	 
	 	(n) 	
      the Purchaser has been advised to consult the Purchaser's
      own legal, tax and other advisors with respect to the merits and risks of
      an investment in the Units and with respect to applicable resale
      restrictions, and it is solely responsible (and the Company is not in any
      way responsible) for compliance with:

	 	 	 	 
	 		(i) 	
      any applicable laws of the jurisdiction in which the
      Purchaser is resident in connection with the distribution of the Units
      hereunder, and

	 	 	 	 
	 		(ii) 	
      applicable resale restrictions;

	 	 	 	 
	 	(o) 	
      this Agreement is not enforceable by the Purchaser unless
      it has been accepted by the Company, and the Purchaser acknowledges and
      agrees that the Company reserves the right to reject any subscription for
      any reason; and

	 	 	 	 
	 	(p) 	
      By executing and delivering this Agreement, each
      Subscriber will have directed the Company not to include a Canadian Legend
      on any certificates representing the Units to be issued to such
      Subscriber. As a consequence, the Subscriber will not be able to rely on
      the resale provisions of Multilateral Instrument 45-102, and any
      subsequent trade in the Securities during or after the Canadian hold
      period described therein will be a distribution subject to the prospectus
      and registration requirements of Canadian securities legislation, to the
      extent that the trade is at that time subject to any such Canadian
      securities legislation.

2.2        
Representations by the purchaser 

The Purchaser represents and warrants to the Issuer that, as at
the Agreement Date and at the Closing: 

	 	(a) 	
      the Purchaser has the legal capacity and competence to
      enter into and execute this Agreement and to take all actions required
      pursuant hereto and, if the Purchaser is a corporation, it is duly
      incorporated and validly subsisting under the laws of its jurisdiction of
      incorporation and all necessary approvals by its directors, shareholders
      and others have been obtained to authorize execution and performance of
      this Agreement on behalf of the Purchaser;

	 	 	 
	 	(b) 	
      the entering into of this Agreement and the transactions
      contemplated hereby do not result in the violation of any of the terms and
      provisions of any law applicable to the Purchaser or of
  any

	Subscription Agreement (with related appendices, schedules and forms) 	Page 12 of 15 

	 		
      agreement, written or oral, to which the Purchaser may be
      a party or by which the Purchaser is or may be bound;

	 	 	 
	 	(c) 	
      the Purchaser has duly executed and delivered this
      Agreement and it constitutes a valid and binding agreement of the
      Purchaser enforceable against the Purchaser in accordance with its
      terms;

	 	 	 
	 	(d) 	
      the Purchaser is not acquiring the Units for the account
      or benefit of, directly or indirectly, any U.S. Person;

	 	 	 
	 	(e) 	
      the Purchaser is not a U.S. Person;

	 	 	 
	 	(f) 	
      the Purchaser is resident in the jurisdiction set out
      under the heading "Name and Address of Purchaser" on the signature page of
      this Agreement;

	 	 	 
	 	(g) 	
      the sale of the Units to the Purchaser as contemplated in
      this Agreement complies with or is exempt from the applicable securities
      legislation of the jurisdiction of residence of the Purchaser;

	 	 	 
	 	(h) 	
      the Purchaser is acquiring the Units for investment only
      and not with a view to resale or distribution and, in particular, it has
      no intention to distribute either directly or indirectly any of the Units
      in the United States or to U.S. Persons;

	 	 	 
	 	(i) 	
      the Purchaser is outside the United States when receiving
      and executing this Agreement and is acquiring the Units as principal for
      the Purchaser's own account, for investment purposes only, and not with a
      view to, or for, resale, distribution or fractionalisation thereof, in
      whole or in part, and no other person has a direct or indirect beneficial
      interest in such Shares;

	 	 	 
	 	(j) 	
      the Purchaser is not an underwriter of, or dealer in, the
      common shares of the Company, nor is the Purchaser participating, pursuant
      to a contractual agreement or otherwise, in the distribution of the
      Shares;

	 	 	 
	 	(k) 	
      the Purchaser (i) is able to fend for him/her/itself in
      the Subscription; (ii) has such knowledge and experience in business
      matters as to be capable of evaluating the merits and risks of its
      prospective investment in the Shares; and (iii) has the ability to bear
      the economic risks of its prospective investment and can afford the
      complete loss of such investment;

	 	 	 
	 	(l) 	
      the Purchaser acknowledges that the Purchaser has not
      acquired the Units as a result of, and will not itself engage in, any
      "directed selling efforts" (as defined in Regulation S under the 1933 Act)
      in the United States in respect of the Shares which would include any
      activities undertaken for the purpose of, or that could reasonably be
      expected to have the effect of, conditioning the market in the United
      States for the resale of the Shares; provided, however, that the Purchaser
      may sell or otherwise dispose of the Shares pursuant to registration of
      the Shares pursuant to the 1933 Act and any applicable state and
      provincial securities laws or under an exemption from such registration
      requirements and as otherwise provided herein;

	 	 	 
	 	(m) 	
      the Purchaser understands and agrees that none of the
      Shares have been registered under the 1933 Act, or under any state
      securities or "blue sky" laws of any state of the United States, and,
      unless so registered, may not be offered or sold in the United States or,
      directly or indirectly, to U.S. Persons except in accordance with the
      provisions of Regulation S, pursuant to an effective registration
      statement under the 1933 Act, or pursuant to an exemption from, or in a
      transaction not subject to, the registration requirements of the 1933
      Act;

	 	 	 
	 	(n) 	
      the Purchaser understands and agrees that offers and
      sales of any of the Shares prior to the expiration of a period of one year
      after the date of original issuance of the Units (the one year period
      hereinafter referred to as the "Distribution Compliance Period") shall
      only be made in

	Subscription Agreement (with related appendices, schedules and forms) 	Page 13 of 15 

	 		
      compliance with the safe harbor provisions set forth in
      Regulation S, pursuant to the registration provisions of the 1933 Act or
      an exemption therefrom, and that all offers and sales after the
      Distribution Compliance Period shall be made only in compliance with the
      registration provisions of the 1933 Act or an exemption therefrom and in
      each case only in accordance with applicable state and provincial
      securities laws;

	 	 	 	 
	 	(o) 	
      the Purchaser understands and agrees not to engage in any
      hedging transactions involving any of the Shares unless such transactions
      are in compliance with the provisions of the 1933 Act and in each case
      only in accordance with applicable state and provincial securities
      laws;

	 	 	 	 
	 	(p) 	
      the Purchaser understands and agrees that the Company
      will refuse to register any transfer of the Shares not made in accordance
      with the provisions of Regulation S, pursuant to an effective registration
      statement under the 1933 Act or pursuant to an available exemption from
      the registration requirements of the 1933 Act;

	 	 	 	 
	 	(q) 	
      the Purchaser is not aware of any advertisement of any of
      the Units and is not acquiring the Units as a result of any form of
      general solicitation or general advertising including advertisements,
      articles, notices or other communications published in any newspaper,
      magazine or similar media or broadcast over radio or television, or any
      seminar or meeting whose attendees have been invited by general
      solicitation or general advertising; and

	 	 	 	 
	 	(r) 	
      no person has made to the Purchaser any written or oral
      representations:

	 	 	 	 
	 		(i) 	
      that any person will resell or repurchase any of the
      Shares;

	 	 	 	 
	 		(ii) 	
      that any person will refund the purchase price of any of
      the Shares;

	 	 	 	 
	 		(iii) 	
      as to the future price or value of any of the Shares;
      or

	 	 	 	 
	 		(iv) 	
      that any of the Shares will be listed and posted for
      trading on any stock exchange or automated dealer quotation system or that
      application has been made to list and post any of the Shares of the
      Company on any stock exchange or automated dealer quotation
  system.

2.3      
  Reliance, indemnity and notification of changes 

The representations and warranties in the Subscription
Agreement (including the first (cover) page, the Terms on pages 3 to 4, the
General Provisions on pages 9 to 14 and the other schedules and appendices
incorporated by reference) are made by the Purchaser with the intent that they
be relied upon by the Issuer in determining its suitability as a purchaser of
Purchased Securities, and the Purchaser hereby agrees to indemnify the Issuer
against all losses, claims, costs, expenses and damages or liabilities which any
of them may suffer or incur as a result of reliance thereon. The Purchaser
undertakes to notify the Issuer immediately of any change in any representation,
warranty or other information relating to the Purchaser set forth in the
Subscription Agreement (including the first (cover) page, the Terms on pages 3
to 4, the General Provisions on pages 9 to 14 and the other schedules and
appendices incorporated by reference) which takes place prior to the Closing.

2.4         Survival
of representations and warranties 

The representations and warranties contained in this Section
will survive the Closing. 

3.          
ISSUER’S ACCEPTANCE 

The Subscription Agreement, when executed by the Purchaser, and
delivered to the Issuer, will constitute a subscription for Units which will not
be binding on the Issuer until accepted by the Issuer by executing the
Subscription Agreement in the space provided on the face page(s) of the
Agreement and, notwithstanding the 

	Subscription Agreement (with related appendices, schedules and forms) 	Page 14 of 15 

Agreement Date, if the Issuer accepts the subscription by the
Purchaser, the Subscription Agreement will be entered into on the date of such
execution by the Issuer. 

4.          
CLOSING 

4.1         On or
before the end of the fifth business day before the Closing Date, the Purchaser
will deliver to the Issuer the Subscription Agreement and all applicable
schedules and required forms, duly executed, and payment in full for the total
price of the Purchased Securities to be purchased by the Purchaser. 

4.2         At
Closing, the Issuer will deliver to the Purchaser the certificates representing
the Purchased Securities purchased by the Purchaser registered in the name of
the Purchaser or its nominee, or as directed by the Purchaser.

5.          
MISCELLANEOUS 

5.1         The
Purchaser agrees to sell, assign or transfer the Securities only in accordance
with the requirements of applicable securities laws and any legends placed on
the Securities as contemplated by the Subscription Agreement. 

5.2         The
Purchaser hereby authorizes the Issuer to correct any minor errors in, or
complete any minor information missing from any part of the Subscription
Agreement and any other schedules, forms, certificates or documents executed by
the Purchaser and delivered to the Issuer in connection with the Private
Placement. 

5.3         The Issuer
may rely on delivery by fax machine of an executed copy of this subscription,
and acceptance by the Issuer of such faxed copy will be equally effective to
create a valid and binding agreement between the Purchaser and the Issuer in
accordance with the terms of the Subscription Agreement. 

5.4         Without
limitation, this subscription and the transactions contemplated by this
Subscription Agreement are conditional upon and subject to the Issuer’s having
obtained such regulatory approval of this subscription and the transactions
contemplated by this Subscription Agreement as the Issuer considers necessary.

5.5         This
Subscription Agreement is not assignable or transferable by the parties hereto
without the express written consent of the other party to this Subscription
Agreement. 

5.6         Time is of
the essence of this Subscription Agreement and will be calculated in accordance
with the provisions of the Interpretation Act (British Columbia). 

5.7         Except
as expressly provided in this Subscription Agreement and in the agreements,
instruments and other documents contemplated or provided for in this
Subscription Agreement, this Subscription Agreement contains the entire
agreement between the parties with respect to the Securities and there are no
other terms, conditions, representations or warranties whether expressed,
implied, oral or written, by statute, by common law, by the Issuer, or by anyone
else. 

5.8         The
parties to this Subscription Agreement may amend this Subscription Agreement
only in writing. 

5.9         This
Subscription Agreement enures to the benefit of and is binding upon the parties
to this Subscription Agreement and their successors and permitted assigns. 

5.10      A party to this Subscription
Agreement will give all notices to or other written communications with the
other party to this Subscription Agreement concerning this Subscription
Agreement by hand or by registered mail addressed to the address given on page
1. 

5.11      This Subscription Agreement
is to be read with all changes in gender or number as required by the context.

5.12      This Subscription Agreement
will be governed by and construed in accordance with the internal laws of
British Columbia (without reference to its rules governing the choice or
conflict of laws), and the parties hereto 

	Subscription Agreement (with related appendices, schedules and forms) 	Page 15 of 15 

irrevocably attorn and submit to the exclusive jurisdiction of
the courts of British Columbia with respect to any dispute related to this
Subscription Agreement. 

End of General Provisions 

End of Subscription AgreementFiled by sedaredgar.com - Panglobal Brands Inc. - Exhibit 10.4

	
      SECURITY AGREEMENT 

       

          THIS
SECURITY AGREEMENT, dated for reference April 30, 2009 (the “Security
Agreement”), is executed by PANGLOBAL BRANDS INC, a company
incorporated under the laws of Delaware (“Debtor”), for the benefit of
Chelsea Capital Corporation., a company incorporated under the
laws of British Columbia (“Chelsea”) with an address c/o Darryl
Yea/Michael O’Brian, Chelsea Capital Corporation, 666 Burrard Street, Vancouver,
BC, V6C ZX8, Canada, on behalf of all subscribers (the “Subscribers”,
together with Chelsea, “Secured Party”) for a convertible loan issue of
Debtor pursuant to a convertible loan agreement dated for reference April 9,
2009 (the “Loan Agreement”). 

          WHEREAS,
Secured Party has agreed to subscribe for convertible loans of Debtor in the
aggregate amount of up to US$2,500,000 pursuant to the Loan Agreement.

          WHEREAS,
it is a condition precedent to the subscription for the convertible loans that
Debtor enter into this Agreement to secure, among other things, the Indebtedness
(as defined below), and Debtor has agreed to enter into this Agreement in
furtherance of the same. 

          NOW
THEREFORE, in consideration of the premises and mutual covenants and agreements
set forth herein, Debtor hereby agrees as follows: 

                    
For value received, Debtor grants to Secured Party a continuing security
interest in the Collateral (as defined below) to secure payment when due,
whether by stated maturity, demand, acceleration or otherwise, of all existing
and future indebtedness and obligations of Debtor (“Indebtedness”),
including but not limited to Indebtedness arising under the Loan Agreement and
all other agreements and instruments related thereto. Indebtedness includes
without limitation any and all obligations or liabilities of Debtor to Secured
Party, whether absolute or contingent, direct or indirect, voluntary or
involuntary, liquidated or unliquidated, joint or several, known or unknown; any
and all obligations or liabilities for which Debtor would otherwise be liable to
Secured Party were it not for the invalidity or unenforceability of such
obligations or liabilities by reason of any bankruptcy, insolvency or other law,
or for any other reason; any and all amendments, modifications, renewals and/or
extensions of any of the above; all costs incurred by Secured Party in
establishing, determining, continuing, or defending the validity or priority of
its security interest, or in pursuing its rights and remedies under this
Agreement or under any other agreement between Secured Party and Debtor or in
connection with any proceeding involving Secured Party as a result of any
financial accommodation to Debtor; and all other costs of collecting
indebtedness, including without limitation attorneys’ fees. Debtor agrees to pay
Secured Party all such costs incurred by Secured Party, immediately upon demand,
and until paid all costs shall bear interest at the highest per annum rate
applicable to any of the indebtedness, but not in excess of the maximum rate
permitted by law. Any reference in this Agreement to attorney fees shall be
deemed a reference to actual fees, costs, and expenses of both in-house and
outside counsel and paralegals, whether or not a suit or action is instituted,
and to court costs if a suit or action is instituted, and whether attorneys’
fees or court costs are incurred at the trial court level, on appeal, in a
bankruptcy, administrative or probate proceeding or otherwise. 

                    1.      Collateral.
“Collateral” shall mean all the following property Debtor now or later
owns or has an interest in, wherever located:

                              1.1     
All present and future accounts, accounts receivable, agreements, contracts,
leases, contract rights, rights to payment, instruments, documents, chattel
paper, security agreements, guaranties, letters of credit, undertakings, surety
bonds, insurance policies, notes and drafts, and all forms of obligations owing
to Debtor or in which Debtor may have any interest, however created or arising
and whether or not earned by performance; 

                              1.2      All
present and future general intangibles, payment intangibles, all tax refunds of
every kind and nature to which Debtor now or hereafter may become entitled,
however arising, all other refunds, and all deposits, reserves, loans,
royalties, cost savings, deferred payments, goodwill, chooses in action,
liquidated damages, rights to indemnification, trade secrets, computer programs,
software, customer and supplier lists, trademarks, trade names, patents,
licenses, permits, copyrights, technology, processes, proprietary information
and insurance proceeds of which Debtor is a beneficiary; 

                              1.3     
All present and future deposit accounts of Debtor, including, without
limitation, any demand, time, savings, passbook or like account maintained by
Debtor with Secured Party or any other bank, savings and loan association,
credit union or like organization, and all money, cash and cash equivalents of
Debtor, whether or not deposited in any such deposit account; 

                              1.4     
All present and future books and records, including, without limitation,
books of account and ledgers of every kind and nature, all electronically
recorded data relating to Debtor or the business thereof, all receptacles and
containers for such records, and all files and correspondence; 

                              1.5      All
present and future goods, inventory, equipment and merchandise,
including, without limitation, all present and future goods held for sale
or lease or to be furnished under a contract of service, all raw materials, work
in process and finished goods, all packing materials, supplies and containers
relating to or used in connection with any of the foregoing, and all bills of
lading, warehouse receipts or documents of title relating to any of the
foregoing; 

                              1.6      All
present and future investment collateral and all rights, preferences, privileges
and distributions with respect thereto; 

                              1.7     
All present and future accessions, appurtenances, components, repairs, repair
parts, spare parts, replacements, substitutions, additions, issue and/or
improvements to or of or with respect to any of the foregoing; 

                              1.8     
All rights, remedies, powers and/or privileges with respect to any of the
foregoing, including the right to make claims thereunder or with respect
thereto; 

                              1.9      Any
and all balances, credits, deposits, accounts or moneys of or in its name
arising from any of the foregoing in the possession or control of, or in transit
to, Secured Party or any other financial institution and all sums on deposit
therein from time to time and all securities, instruments and accounts in which
such sums are invested from time to time; 

                              1.10      Any
other collateral, rights and properties described in each and every deed of
trust, mortgage, security agreement, pledge, assignment and other agreement
which has been, or will at any time(s) later be, executed by Debtor or its
affiliates for the benefit of Secured Party; and 

- 2 - 

                              1.11     
All products, rents, issues, profits, returns, income and proceeds of and from
any and all of the foregoing (including proceeds which constitute property of
the types described in the foregoing clauses (1.1) through (1.10),
and any and all money, accounts, general intangibles, deposit accounts,
documents, instruments, chattel paper, goods, insurance proceeds, and any other
tangible or intangible property received upon the sale or disposition of any of
the foregoing).

                    2.     
Warranties, Covenants and Agreements. Debtor warrants, covenants
and agrees as follows: 

                              2.1     
Debtor shall furnish to Secured Party, in form and at intervals as Secured Party
may request, any information Secured Party may reasonably request and shall
allow Secured Party to examine, inspect, and copy any of Debtor’s books and
records. Debtor shall, at the request of Secured Party, mark its records and the
Collateral to clearly indicate the security interest of Secured Party under this
Agreement. 

                              2.2     
At the time any Collateral becomes, or is represented to be, subject to a
security interest in favor of Secured Party, Debtor shall be deemed to have
warranted that (a) Debtor is the lawful owner of the Collateral and has the
right and authority to subject it to a security interest granted to Secured
Party; (b) none of the Collateral is subject to any security interest other than
that in favor of Secured Party and there are no financing statements on file,
other than in favor of Secured Party; and (c) Debtor acquired its rights in the
Collateral in the ordinary course of its business. 

                              2.3     
Debtor confirms that the Collateral is and will keep the Collateral free at all
times from all claims, liens, security interests and encumbrances other than
those in favor of Secured Party, and other than those agreed to by the Secured
Party in writing. Debtor will not, without the prior written consent of Secured
Party, sell, transfer, or lease, or permit to be sold, transferred or leased,
any or all of the Collateral, except (where inventory is pledged as Collateral)
for inventory in the ordinary course of its business and will not return any
inventory to its supplier. Secured Party or its representatives may at all
reasonable times inspect the Collateral and may enter upon all premises where
the Collateral is kept or might be located. 

                              2.4     
Debtor will do all acts and or cause to be executed all writings requested by
Secured Party to establish, maintain and continue a perfected and first security
interest of Secured Party in the Collateral. Debtor agrees that Secured Party
has no obligation to acquire or perfect any lien on or security interest in any
asset(s), whether realty or personalty, to secure payment of the Indebtedness,
and Debtor is not relying upon assets in which Secured Party may have a lien or
security interest for payment of the Indebtedness. Without limiting the
generality of the foregoing, Debtor hereby authorizes Secured Party to prepare,
execute and file all financing statements, continuation statements or other
documents or instruments as Secured Party shall determine are necessary or
desirable to perfect, evidence, continue or otherwise take action in connection
with the security interests granted hereunder. 

                              2.5     
Debtor will pay within the time that they can be paid without interest or
penalty all taxes, assessments and similar charges which at any time are or may
become a lien, charge, or encumbrance upon any Collateral, except to the extent
contested in good faith and bonded in a manner satisfactory to Secured Party. If
Debtor fails to pay any of these taxes, assessments, or other charges in the
time provided above, Secured Party has the option (but not the obligation) to do
so, and Debtor agrees to repay all amounts so expended by Secured Party
immediately upon demand, together with interest at the highest lawful default
rate which could be charged by Secured Party to Debtor on any indebtedness. 

- 3 - 

                              2.6     
Debtor will keep the Collateral in good condition and will protect it from loss,
damage, or deterioration from any cause. Debtor has and will maintain at all
times (a) with respect to the Collateral, insurance under an “all risk” policy
against fire and other risks customarily insured against; and (b) public
liability insurance and other insurance as may be required by law or reasonably
required by Secured Party; all of which insurance shall be in amount, form and
content, and written by companies as may be satisfactory to Secured Party,
containing a lender’s loss payable endorsement acceptable to Secured Party.
Debtor will deliver to Secured Party immediately upon demand evidence
satisfactory to Secured Party that the required insurance has been procured. If
Debtor fails to maintain satisfactory insurance, Secured Party has the option
(but not the obligation) to do so and Debtor agrees to repay all amounts so
expended by Secured Party immediately upon demand, together with interest at the
highest lawful default rate which could be charged by Secured Party to Debtor on
any indebtedness. 

                              2.7     
If Debtor’s accounts are pledged as Collateral under this Agreement, then on
each occasion on which Debtor evidences to Secured Party the account balances
on, and the nature and extent of, the accounts, Debtor shall be deemed to have
warranted that except as otherwise indicated (a) each of those accounts is valid
and enforceable without performance by Debtor of any act; (b) each of those
account balances are in fact owing, (c) there are no setoffs, recoupments,
credits, contra accounts, counterclaims or defenses against any of those
accounts, (d) as to any accounts represented by a note, trade acceptance, draft
or other instrument or by any chattel paper or document, the same have been
endorsed and/or delivered by Debtor to Secured Party, (e) Debtor has not
received with respect to any account, any notice of the death of the related
account debtor, nor the dissolution, liquidation, termination of existence,
insolvency, business failure, appointment of a receiver for, assignment for the
benefit of creditors by, or filing of a petition in bankruptcy by or against,
the account debtor, and (f) as to each account, the account debtor is not an
affiliate of Debtor, the United States of America or any department, agency or
instrumentality of it, or a citizen or resident of any jurisdiction outside of
the United States. Debtor will do all acts and will execute all writings
requested by Secured Party to perform, enforce performance of, and collect all
accounts. Debtor shall neither make nor permit any modification, compromise or
substitution for any account without the prior written consent of Secured Party.
Debtor shall, at Secured Party’s request arrange for verification of accounts
directly with account debtors or by other methods acceptable to Secured Party.

                              2.8     
Debtor at all times shall be in strict compliance with all applicable laws,
including without limitation any laws, ordinances, directives, orders, statutes,
or regulations an object of which is to regulate or improve health, safety, or
the environment (“Environmental Laws”). 

                              2.9     
If Secured Party, acting in its sole discretion, redelivers Collateral to Debtor
or Debtor’s designee for the purpose of (a) the ultimate sale or exchange
thereof; or (b) presentation, collection, renewal, or registration of transfer
thereof; or (c) loading, unloading, storing, shipping, transshipping,
manufacturing, processing or otherwise dealing with it preliminary to sale or
exchange; such redelivery shall be in trust for the benefit of Secured Party and
shall not constitute a release of Secured Party’s security interest in it or in
the proceeds or products of it unless Secured Party specifically so agrees in
writing. If Debtor requests any such redelivery, Debtor will deliver with such
request a duly executed financing statement in form and substance satisfactory
to Secured Party. Any proceeds of Collateral coming into Debtor’s possession as
a result of any such redelivery shall be held in trust for Secured Party and
immediately delivered to Secured Party for application on the Indebtedness.
Secured Party may (in its sole discretion) deliver any or all of the Collateral
to Debtor, and such delivery by Secured Party shall discharge Secured Party from
all liability or responsibility for such Collateral. Secured Party, at its
option, may require delivery of any Collateral to Secured Party at any time with
such endorsements or assignments of the Collateral as Secured Party may request.

- 4 - 

                              2.10      At
any time and without notice, Secured Party may as to Collateral other than
equipment, fixtures or inventory (a) cause any or all of such Collateral to be
transferred to its name or to the name of its nominees; (b) receive or collect
by legal proceedings or otherwise all dividends, interest, principal payments
and other sums and all other distributions at any time payable or receivable on
account of such Collateral, and hold the same as Collateral, or apply the same
to the Indebtedness, the manner and distribution of the application to be in the
sole discretion of Secured Party; (c) enter into any extension, subordination,
reorganization, deposit, merger or consolidation agreement or any other
agreement relating to or affecting such Collateral, and deposit or surrender
control of such Collateral, and accept other property in exchange for such
Collateral and hold or apply the property or money so received pursuant to this
Agreement. 

                              2.11      Secured
Party may assign any of the Indebtedness and deliver any or all the Collateral
to its assignee, who then shall have with respect to Collateral so delivered all
the rights and powers of Secured Party under this Agreement, and after that
Secured Party shall be fully discharged from all liability and responsibility
with respect to Collateral so delivered. 

                              2.12      Debtor
shall defend, indemnify and hold harmless Secured Party, its employees, agents,
shareholders, officers, and directors from and against any and all claims,
damages, fines, expenses, liabilities or causes of action of whatever kind,
including without limitation consultant fees, legal expenses, and actual
attorneys’ fees, suffered by any of them as a direct or indirect result of any
actual or asserted violation of any law, including, without limitation,
Environmental Laws, or of any remediation relating to any property required by
any law, including without limitation Environmental Laws. 

                    3.      Collection
of Proceeds. 

                              3.1      Debtor
agrees to collect and enforce payment of all Collateral until Secured Party
shall direct Debtor to the contrary. Immediately upon notice to Debtor by
Secured Party and at all times after that, Debtor agrees to fully and promptly
cooperate and assist Secured Party in the collection and enforcement of all
Collateral and to hold in trust for Secured Party all payments received in
connection with Collateral and from the sale, lease or other disposition of any
Collateral, all rights by way of suretyship, guaranty or indemnity and all
rights in the nature of a lien or security interest which Debtor now or later
has regarding Collateral. Immediately upon and after such notice, Debtor agrees
to (a) endorse to Secured Party and immediately deliver to Secured Party all
payments received on Collateral or from the sale, lease or other disposition of
any Collateral or arising from any other rights or interests of Debtor in the
Collateral, in the form received by Debtor without commingling with any other
funds, and (b) immediately deliver to Secured Party all property in Debtor’s
possession or later coming into Debtor’s possession through enforcement of
Debtor’s rights or interests in the Collateral. Debtor irrevocably authorizes
Secured Party or any Secured Party employee or agent to endorse the name of
Debtor upon any checks or other items which are received in payment for any
Collateral, and to do any and all things necessary in order to reduce these
items to money. Secured Party shall have no duty as to the collection or
protection of Collateral or the proceeds of it, nor as to the preservation of
any related rights, beyond the use of reasonable care in the custody and
preservation of Collateral in the possession of Secured Party. Debtor agrees to
take all steps necessary to preserve rights against prior parties with respect
to the Collateral. Nothing in this Section 3.1 shall be deemed a consent by
Secured Party to any sale, lease or other disposition of any Collateral. 

- 5 - 

                    4.      Defaults,
Enforcement and Application of Proceeds. 

                              4.1      Upon
the occurrence of any of the following events (each an “Event of
Default”), Debtor shall be in default under this Agreement: 

                                        (a)      Any
failure to pay the Indebtedness or any other indebtedness when due, or such
portion of it as may be due, by acceleration or otherwise; or 

                                        (b)     
Any failure or neglect to comply with, or breach of, or default under, any term
of this Agreement, the Loan Agreement or any other agreement or commitment
between Debtor and Secured Party; or 

                                        (c)     
Any warranty, representation, financial statement, or other information made,
given or furnished to Secured Party by or on behalf of Debtor shall be, or shall
prove to have been, false or materially misleading when made, given, or
furnished; or 

                                        (d)      Sale
or other disposition by Debtor of any substantial portion of its assets or
assignment for the benefit of creditors of or by Debtor; or commencement of any
proceedings under any state or federal bankruptcy or insolvency law or laws for
the relief of debtors by or against Debtor; or the appointment of a receiver,
trustee, court appointee, sequestrator or otherwise, for all or any part of the
property of Debtor. 

                              4.2     
Upon the occurrence of any Event of Default, Secured Party may at its discretion
and without prior notice to Debtor declare any or all of the Indebtedness to be
immediately due and payable, and shall have and may exercise any one or more of
the following rights and remedies: 

                                        (a)     
exercise all the rights and remedies upon default, in foreclosure and otherwise,
available to secured parties under the provisions of the Uniform Commercial Code
and other applicable law including without limitation such rights and remedies
as are available under the Deeds of Trust; 

                                        (b)     
institute legal proceedings to foreclose upon the lien and security interest
granted by this Agreement, to recover judgment for all amounts then due and
owing as Indebtedness, and to collect the same out of any Collateral or the
proceeds of any sale of it; 

                                        (c)     
institute legal proceedings for the sale, under the judgment or decree of any
court of competent jurisdiction, of any or all Collateral; and/or 

                                        (d)     
personally or by agents, attorneys, or appointment of a receiver, enter upon any
premises where Collateral may then be located, and take possession of all or any
of it and/or render it unusable; and without being responsible for loss or
damage to such Collateral, hold, operate, sell, lease, or dispose of all or any
Collateral at one or more public or private sales, leasings or other
dispositions, at places and times and on terms and conditions as Secured Party
may deem fit, without any previous demand or advertisement; and except as
provided in this Agreement, all notice of sale, lease or other disposition, and
advertisement, and other notice or demand, any right or equity of redemption,
and any obligation of a prospective purchaser or lessee to inquire as to the
power and authority of Secured Party to sell, lease, or otherwise dispose of the
Collateral or as to the application by Secured Party of the proceeds of sale or
otherwise, which would otherwise be required by, or available to Debtor under,
applicable law are expressly waived by Debtor to the fullest extent permitted.

- 6 - 

                              At
any sale pursuant to this Section 4.2, whether under the power of sale, by
virtue of judicial proceedings or otherwise, it shall not be necessary for
Secured Party or a public officer under order of a court to have present
physical or constructive possession of Collateral to be sold. The recitals
contained in any conveyances and receipts made and given by Secured Party or the
public officer to any purchase at any sale made pursuant to this Agreement
shall, to the extent permitted by applicable law, conclusively establish the
truth and accuracy of the matters stated (including, without limitation, as to
the amounts of the principal of and interest on the Indebtedness, the accrual
and nonpayment of it and advertisement and conduct of the sale); and all
prerequisites to the sale shall be presumed to have been satisfied and
performed. Upon any sale of any Collateral, the receipt of the officer making
the sale under judicial proceedings or of Secured Party shall be sufficient
discharge to the purchaser for the purchase money, and the purchaser shall not
be obligated to see to the application of the money. Any sale of any Collateral
under this Agreement shall be a perpetual bar against Debtor with respect to
that Collateral. 

                              4.3      Secured
Party may, itself, upon the occurrence of any Event of Default notify and direct
any account debtor or obligor. 

                              4.4     
The proceeds of any sale or other disposition of Collateral authorized by this
Agreement shall be applied by Secured Party first upon all expenses authorized
by the Uniform Commercial Code and all reasonable attorneys’ fees and legal
expenses incurred by Secured Party; the balance of the proceeds of the sale or
other disposition shall be applied in the payment of the Indebtedness, first to
interest, then to principal, then to remaining Indebtedness and the surplus, if
any, shall be paid over to Debtor or to such other person(s) as may be entitled
to it under applicable law. Debtor shall remain liable for any deficiency, which
it shall pay to Secured Party immediately upon demand. 

                              4.5      Nothing
in this Agreement is intended, nor shall it be construed, to preclude Secured
Party from pursuing any other remedy provided by law for the collection of the
Indebtedness or for the recovery of any other sum to which Secured Party may be
entitled for the breach of this Agreement by Debtor. Nothing in this Agreement
shall reduce or release in any way any rights or security interests of Secured
Party contained in any existing agreement between Debtor and Secured Party. 

                              4.6     
No waiver of default or consent to any act by Debtor shall be effective unless
in writing and signed by an authorized officer of Secured Party. No waiver of
any default or forbearance on the part of Secured Party in enforcing any of its
rights under this Agreement shall operate as a waiver of any other default or of
the same default on a future occasion or of any rights. 

                              4.7     
Debtor irrevocably appoints Secured Party or any agent of Secured Party (which
appointment is coupled with an interest) the true and lawful attorney of Debtor
(with full power of substitution ) in the name, place and stead of, and at the
expense of, Debtor: 

                                        (a)      to
demand, receive, sue for, and give receipts or acquittances for any monies due
or to become due on any Collateral and to endorse any item representing any
payment on or proceeds of the Collateral; 

                                        (b)     
to execute and file in the name of and on behalf of Debtor all financing
statements or other filings deemed necessary or desirable by Secured Party to
evidence, perfect, or continue the security interests granted in this Agreement;
and 

- 7 - 

                                        (c)      to
do and perform any act on behalf of Debtor permitted or required under this
Agreement. 

                    Upon
the occurrence of an Event of Default, Debtor also agrees, upon request of
Secured Party, to assemble the Collateral and make it available to Secured Party
at any place designated by Secured Party which is reasonably convenient to
Secured Party and Debtor. 

                    5.     
Miscellaneous. 

                              5.1      Notwithstanding
anything else contained in this Agreement, the Debtor may grant security
interest in its accounts receivable to a factor who may advance up to ninety
(90%) percent of the value of such receivables to the Debtor, and such factor’s
security in the Debtor’s receivables will take precedence over the security
granted in this Agreement.

                              5.2      Until
Secured Party is advised in writing by Debtor to the contrary, all notices,
requests and demands required under this Agreement or by law shall be given to,
or made upon , Debtor at the address indicated in Section 5.15 below. 

                              5.3     
Debtor will give Secured Party not less than 90 days prior written notice of all
contemplated changes in Debtor’s name, chief executive office location, and/or
location of any Collateral, but the giving of this notice shall not cure any
Event of Default caused by this change. 

                              5.4      Secured
Party assumes no duty of performance or other responsibility under any contracts
contained within the Collateral. 

                              5.5     
Secured Party has the right to sell, assign, transfer, negotiate or grant
participations or any interest in, any or all of the Indebtedness and any
related obligations, including without limitation this Agreement. In connection
with the above, but without limiting its ability to make other disclosures to
the full extent allowable, Secured Party may disclose all documents and
information which Secured Party now or later has relating to Debtor, the
Indebtedness or this Agreement, however obtained. Debtor further agree(s) that
Secured Party may provide information relating to this Agreement or relating to
Debtor to Secured Party’s parent, affiliates, subsidiaries and service
providers. 

                              5.6     
In addition to Secured Party’s other rights, any Indebtedness owing from Secured
Party to Debtor can be set off and applied by Secured Party on any Indebtedness
at any time(s) either before or after maturity or demand without notice to
anyone. 

                              5.7     
Debtor waives any right to require Secured Party to: (a) proceed against any
person or property; (b) give notice of the terms, time and place of any public
or private sale of personal property security held from Debtor or any other
person, or otherwise comply with the provisions of Section 9607 of the
California Commercial Code or other applicable Uniform Commercial Code, or any
similar provision; or (c) pursue any other remedy in Secured Party’s power.
Debtor waives notice of acceptance of this Agreement and presentment, demand,
protest, notice of protest, dishonor, notice of dishonor, notice of default,
notice of intent to accelerate or demand payment of any Indebtedness, any and
all other notices to which the undersigned might otherwise be entitled, and
diligence in collecting any Indebtedness, and agree(s) that Secured Party may,
once or any number or times, modify the terms of any Indebtedness, compromise,
extend, increase, accelerate, renew or forbear to enforce payment of any or all
Indebtedness, all without notice to Debtor and without affecting in any manner
the unconditional obligation of Debtor under this Agreement. Debtor
unconditionally and irrevocably waives each and 

- 8 - 

every defense and setoff of any nature which, under principles
of guaranty or otherwise, would operate to impair or diminish in any way the
obligation of Debtor under this Agreement and acknowledges that such waiver is
by this reference incorporated into each security agreement, collateral
assignment, pledge and/or other document from Debtor now or later securing the
Indebtedness, and acknowledges that as of the date of this Agreement no such
defense or setoff exists. 

                              5.8     
Debtor waives any and all rights (whether by subrogation, indemnity,
reimbursement, or otherwise) to recover from any person, including without
limitation the Debtor, if different that Debtor, any amounts paid or the value
of any Collateral given by Debtor pursuant to this Agreement. 

                              5.9     
In the event that applicable law shall obligate Secured Party to give prior
notice to Debtor of any action to be taken under this Agreement, Debtor agrees
that a written notice given to Debtor at least five (5) days before the date of
the act shall be reasonable notice of the act and, specifically, reasonable
notification of the time and place of any public sale or of the time after which
any private sale, lease, or other disposition is to be made, unless a shorter
notice period is reasonable under the circumstances. A notice shall be deemed to
be given under this Agreement when delivered to Debtor or when placed in an
envelope addressed to Debtor and deposited, with postage prepaid, in a post
office or official depository under the exclusive care and custody of the United
States Postal Service or delivered to an overnight courier. The mailing shall be
by overnight courier, certified, or first class mail. 

                              5.10     
Notwithstanding any prior revocation, termination, surrender, or discharge of
this Agreement in whole or in part, the effectiveness of this Agreement shall
automatically continue or be reinstated in the event that any payment received
or credit given by Secured Party in respect of the Indebtedness is returned,
disgorged, or rescinded under any applicable law, including, without limitation,
bankruptcy or insolvency laws, in which case this Agreement, shall be
enforceable against Debtor as if the returned, disgorged, or rescinded payment
or credit had not been received or given by Secured Party, and whether or not
Secured Party relied upon this payment or credit or changed its position as a
consequence of it. In the event of continuation or reinstatement of this
Agreement, Debtor agrees upon demand by Secured Party to execute and deliver to
Secured Party those documents which Secured Party determines are appropriate to
further evidence (in the public records or otherwise) this continuation or
reinstatement, although the failure of Debtor to do so shall not affect in any
way the reinstatement or continuation. 

                              5.11     This
Agreement and all the rights and remedies of Secured Party under this Agreement
shall inure to the benefit of Secured Party’s successors and assigns and to any
other holder who derives from Secured Party title to or an interest in the
Indebtedness or any portion of it, and shall bind Debtor and the heirs, legal
representatives, successors, and assigns of Debtor. Nothing in this Section 5.10
is deemed a consent by Secured Party to any assignment by Debtor. 

                              5.12     
If there is more than one Debtor, all undertakings, warranties and covenants
made by Debtor and all rights, powers and authorities given to or conferred upon
Secured Party are made or given jointly and severally. 

                              5.13     
Except as otherwise provided in this Agreement, all terms in this Agreement have
the meanings assigned to them in Division 9 (or, absent definition in Division
9, in any other Division) of the Uniform Commercial Code, as of the date of this
Agreement. “Uniform Commercial Code” means the California Commercial
Code, as amended. 

- 9 - 

                              5.14      No
single or partial exercise, or delay in the exercise, of any right or power
under this Agreement, shall preclude other or further exercise of the rights and
powers under this Agreement. The unenforceability of any provision of this
Agreement shall not affect the enforceability of the remainder of this
Agreement. This Agreement constitutes the entire agreement of Debtor and Secured
Party with respect to the subject matter of this Agreement. No amendment or
modification of this Agreement shall be effective unless the same shall be in
writing and signed by Debtor and an authorized officer of Secured Party. This
Agreement shall in all respects be governed by and construed in accordance with
the internal laws of the State of California without regard to conflict of laws
principles. 

                              5.15     
To the extent that any of the Indebtedness is payable upon demand, nothing
contained in this Agreement shall modify the terms and conditions of that
Indebtedness nor shall anything contained in this Agreement prevent Secured
Party from making demand, without notice and with or without reason, for
immediate payment of any or all of that Indebtedness at any time(s), whether or
not an Event of Default has occurred. 

                              5.16     
Debtor’s chief executive office is located and shall be maintained at 2853 E.
Pico Blvd, Los Angeles, CA 90023. Debtor is organized under the laws of Delaware
and maintains all of its assets in the state of California and shall not
reorganize in any other jurisdiction or move any part of its assets into any
other jurisdiction without the prior written consent of the Secured Party. 

                              5.17      A
carbon, photographic or other reproduction of this Agreement shall be sufficient
as a financing statement under the Uniform Commercial Code and may be filed by
Secured Party in any filing office. 

                              5.18     
This Agreement shall be terminated only by the filing of a termination statement
in accordance with the applicable provisions of the Uniform Commercial Code, but
the obligations contained in Section 2.12 of this Agreement shall survive
termination. 

                    6.      Governing
Law. This Agreement shall be interpreted and the rights and liabilities of
the parties hereto determined in accordance with the internal laws and decisions
of the State of California without regard to conflict of law principles. THE
BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE
STATE AND FEDERAL COURTS LOCATED IN LOS ANGELES COUNTY, CALIFORNIA WITH RESPECT
TO ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT AND HEREBY WAIVES ANY OBJECTION TO SUCH FORUM BASED ON FORUM
NON-CONVENIENS. IN ADDITION, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
LENDER AND THE BORROWER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING
WHICH PERTAINS DIRECTLY OR INDIRECTLY TO THIS NOTE. 

PANGLOBAL BRANDS INC.: 

 

By: /s/ Stephen Soller 

Name: Stephen Soller 
Title: CEO, President and Secretary

- 10 -

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