Panglobal Brands Inc.
AGREEMENT
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>exhibit10-1.htm
<DESCRIPTION>AGREEMENT
<TEXT>
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<P align=center><B>REVOLVING LOAN AGREEMENT </B></P>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>THIS
AGREEMENT</B> dated for reference the 16th day of January, 2009 and made, </P>
<P align=justify><B>BETWEEN</B>: </P>
<blockquote>
  <blockquote>
    <p align="justify"><B><U>PANGLOBAL BRANDS INC.</U></B>, a company incorporated
      under the laws of Delaware, having an office at 2853 E. Pico Blvd, Los Angeles,
      CA 90023; </p>
    <p align="justify">(the &#147;<B>Borrower</B>&#148;) </p>
  </blockquote>
</blockquote>
<P align=justify><B>AND</B>: </P>
<blockquote>
  <blockquote>
    <p align="justify"><B><U>PROVIDENCE WEALTH MANAGEMENT LTD,</U></B><B> </B>a
      company incorporated under the laws of the British Virgin Islands, with
      an address c/o Mr. Karim Khoury, Chabrier &amp; Partners (Reed Smith), 3
      rue du Mont-Blanc P.O. Box 1363 CH - 1211 Geneva 1 Switzerland;<B> </B></p>
    <p align="justify">(the &#147;<B>Lenders</B>&#148; ) </p>
  </blockquote>
</blockquote>
<P align=justify><B>WITNESSES THAT WHEREAS</B>:</P>
<P
align=justify>A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Borrower has applied to the Lender for a loan in the aggregate principal amount
of US$1,000,000 (the &#147;<B>Loan</B>&#148;) to be utilized by the Borrower for the
purposes described in Section 3. </P>
<P
align=justify>B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Lender have agreed to make the Loan available to Borrower provided they are
secured in the same manner and pari passu with prior secured lenders; and </P>
<P
align=justify>C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
parties wish to provide for the terms and conditions upon which the Loan will be
made available to the Borrower. </P>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>THEREFORE</B>
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. </P>
<P
align=justify><STRONG>1.&nbsp;</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<STRONG><U>DEFINITIONS; INTERPRETATION</U> </STRONG></P>
<P
align=justify>1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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):
</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD>
      <P align=justify>&#147;<B>Accredited Investor</B>&#148; means an accredited investor
      as that term is defined by Regulation D promulgated under the Securities
      Act;</P></TD></TR></TABLE><BR>
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<P align=center>- 2 - </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify>&#147;<B>Advance</B>&#148; means an advance or readvance on account
      of the Loan, as the context requires;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(c) </TD>
    <TD>
      <P align=justify>&#147;<B>Advance Date</B>&#148; means the date set out in an
      Advance Request as the date on which the Borrower requests an Advance in
      the amount described therein be made to it and being a date not less than
      5 Business Days after the date on which the Lender receives that Advance
      Request;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(d) </TD>
    <TD>
      <P align=justify>&#147;<B>Advance Request</B>&#148; means a written request by the
      Borrower in the form attached hereto as Schedule A that an Advance be made
      to it in the amount and on the Advance Date set forth therein,;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(e) </TD>
    <TD>
      <P align=justify>&#147;<B>Affiliate</B>&#148; has the meaning give to it in the
      Securities Act;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(f) </TD>
    <TD>
      <P align=justify>&#147;<B>Agreement</B>&#148; and &#147;<B>this Agreement</B>&#148; means this
      agreement and all schedules hereto as the same may be amended, modified,
      replaced or restated from time to time;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(g) </TD>
    <TD>
      <P align=justify>&#147;<B>Borrower&#146;s Indebtedness</B>&#148; 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);</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(h) </TD>
    <TD>
      <P align=justify>&#147;<B>Business Day</B>&#148; means any day, other than a
      Saturday or a Sunday, on which commercial banks in California are required
      to be open for business;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(i) </TD>
    <TD>
      <P align=justify>&#147;<B>Common Shares</B>&#148; means fully paid non assessable
      common shares par value $0.0001 in the capital of the Borrower;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(j) </TD>
    <TD>
      <P align=justify>&#147;<B>Conditions Precedent</B>&#148; means the conditions
      precedent described in Article 10 hereof;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(k) </TD>
    <TD>
      <P align=justify>&#147;<B>Conversion</B>&#148; means the right of the Lender to
      convert any portion of the outstanding Loan and Interest accrued as set
      out in section 8;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(l) </TD>
    <TD>
      <P align=justify>&#147;<B>Event of Default</B>&#148; means any of the events
      specified in Section 14, and &#147;<B>Default</B>&#148; mean any of such events,
      whether or not any such requirement has been satisfied;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(m) </TD>
    <TD>
      <P align=justify>&#147;<B>First Advance&#148; </B>means the amount of
    US$700,000;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(n) </TD>
    <TD>
      <P align=justify>&#147;<B>First Advance Date</B>&#148; means the date the first
      Advance is advanced by the Lender to the Borrower;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(o) </TD>
    <TD>
      <P align=justify>&#147;<B>GAAP</B>&#148; means United States generally accepted
      accounting principles, as applied on a consistent
basis;</P></TD></TR></TABLE><BR>
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<P align=center>- 3 - </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(p) </TD>
    <TD colSpan=2>
      <P align=justify>&#147;<B>Interest Payment Date</B>&#148; means the last day of each
      calendar quarter, commencing the last day of April, 2009;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(q) </TD>
    <TD colSpan=2>
      <P align=justify>&#147;<B>Interest Rate</B>&#148; means nine percent (9 %) per annum
      calculated as herein provided;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(r) </TD>
    <TD colSpan=2>
      <P align=justify>&#147;<B>Lien</B>&#148; 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;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(s) </TD>
    <TD colSpan=2>
      <P align=justify>&#147;<B>Loan</B>&#148; means the revolving loan facility not
      exceeding US$1,000,000 established by the Lender in favour of the Borrower
      pursuant to this Agreement;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(t) </TD>
    <TD colSpan=2>
      <P align=justify>&#147;<B>Loan Documents</B>&#148; means this Agreement, the Pari
      Passu Agreement and the Security Documents;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(u) </TD>
    <TD colSpan=2>
      <P align=justify>&#147;<B>material adverse effect</B>&#148; in respect of the
      Borrower means a material adverse effect on:</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(i) </TD>
    <TD>
      <P align=justify>the business, operations, affairs, financial condition,
      property, assets or undertakings of the Borrower, or</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(ii) </TD>
    <TD>
      <P align=justify>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;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(v) </TD>
    <TD colSpan=2>
      <P align=justify>&#147;<B>material</B>&#148; means, in respect of the Borrower,
      material in relation to the business, operations, affairs, financial
      condition, assets, properties, or prospects of the Borrower;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(w) </TD>
    <TD colSpan=2>
      <P align=justify>&#147;<B>Maturity Date</B>&#148; has the meaning set out in Section
      4 of this Agreement;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(x) </TD>
    <TD colSpan=2>
      <P align=justify><B>&#147;Pari Passu Agreement&#148; </B>means the agreement among
      the Borrower, the Lender and the Prior Revolving Loan Lenders whereby the
      Prior Revolving Loan is equal to and pari passu with the Loan in priority
      over the assets of the Borrower;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(y) </TD>
    <TD colSpan=2>
      <P align=justify>&#147;<B>Person</B>&#148; 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;</P></TD></TR></TABLE><BR>
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<P align=center>- 4 - </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(z) </TD>
    <TD colSpan=2>
      <P align=justify>&#147;<B>Priority Claim</B>&#148; 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;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(aa) </TD>
    <TD colSpan=2>
      <P align=justify>&#147;<B>Prior Factor</B>&#148; means a Person in the business of
      factoring accounts receivable who is approved by the Lender for the
      purpose of financing the Borrower&#146;s accounts receivable in whole or in
      part; such approval not to be unreasonably or arbitrarily
  withheld;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(bb) </TD>
    <TD colSpan=2>
      <P align=justify>&#147;<B>Prior Factor&#146;s Loan</B>&#148; means the loan made by the
      Prior Factor to the Borrower for the purposes of factoring the Borrower&#146;s
      accounts receivables in whole or in part;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(cc) </TD>
    <TD colSpan=2>
      <P align=justify>&#147;<B>Prior Factor&#146;s Lien</B>&#148; means the Lien in favour of
      the Prior Factor over the Borrower&#146;s accounts receivable which have been
      assigned to the Prior Factor for the repayment of the Prior Factor&#146;s Loan
      and interest;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(dd) </TD>
    <TD colSpan=2>
      <P align=justify>&#147;<B>Prior Permitted Liens</B>&#148; means:</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(i) </TD>
    <TD>
      <P align=justify>the Prior Factor&#146;s Lien;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(ii) </TD>
    <TD>
      <P align=justify>Liens in favour of the Prior Revolving Loan
    Lenders;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(iii) </TD>
    <TD>
      <P align=justify>any other Lien from time to time agreed to as such by the
      Lender in writing;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(iv) </TD>
    <TD>
      <P align=justify>Liens incidental to the conduct of Borrower&#146;s business as
      the ownership of its property; and</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(v) </TD>
    <TD>
      <P align=justify>Liens granted to factors over specific accounts
      receivable which the said factor is collecting on behalf of the
      Company.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(ee) </TD>
    <TD colSpan=2>
      <P align=justify><B>&#147;Prior Revolving Loan&#148; </B>means the Revolving Loan
      Agreement dated March 4, 2008 for the principal amount of
    US$750,000;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(ff) </TD>
    <TD colSpan=2>
      <P align=justify><B>&#147;Prior Revolving Loan Lenders&#148; </B>means Sinecure
      Holdings Ltd. and Capella Investments Inc.;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(gg) </TD>
    <TD colSpan=2>
      <P align=justify>&#147;<B>Securities</B>&#148; means the Warrants and the Common
      Shares</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(hh) </TD>
    <TD colSpan=2>
      <P align=justify>&#147;<B>Securities Act</B>&#148; means the United States
      Securities Act of 1933, as amended or replaced from time to
time;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(ii) </TD>
    <TD colSpan=2>
      <P align=justify>&#147;<B>Security Documents</B>&#148; means the security documents
      set out in Section 13 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&#146;s Indebtedness in whole or in part;</P></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_5></A>
<P align=center>- 5 - </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(jj) </TD>
    <TD>
      <P align=justify>&#147;<B>Subsidiary</B>&#148; has the meaning give to it in the
      Securities Act;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(kk) </TD>
    <TD>
      <P align=justify><B>&#147;UCC&#148; </B>shall mean the Uniform Commercial Code as in
      effect in the applicable jurisdiction;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(ll) </TD>
    <TD>
      <P align=justify><B>&#147;Units&#148; </B>means the unit of one Common Share and one
      half Warrant;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(mm) </TD>
    <TD>
      <P align=justify>&#147;<B>US$</B>&#148; means lawful currency of the United States;
      and</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(nn) </TD>
    <TD>
      <P align=justify><B>&#147;Warrant&#148; </B>means a warrant to purchase a Common
      Share for a period of twelve months from issuance. One whole warrant may
      be exercised at a price US$0.25 per Common Share.</P></TD></TR></TABLE>
<P
align=justify><STRONG>2.&nbsp;</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U><STRONG>LOAN</STRONG></U></P>
<P
align=justify>2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Subject to the terms and conditions of this Agreement, the Lender hereby
establishes and agrees to make the Loan available to the Borrower. </P>
<P
align=justify><STRONG>3.&nbsp;</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<STRONG><U>PURPOSE</U> </STRONG></P>
<P
align=justify>3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Loan will be made available to the Borrower for its general corporate
purposes and for no other purpose without the prior written consent of the
Lender. </P>
<P
align=justify><STRONG>4.&nbsp;</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<STRONG><U>AVAILABILITY AND SUBORDINATION</U> </STRONG></P>
<P
align=justify>4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Loan will be available by advance of the First Advance on the day of
execution of this Agreement.</P>
<P
align=justify>4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
After the First Advance, the Borrower may request an additional Advance of up to
$300,000. Provided that the Conditions Precedent have been fulfilled, the Lender
will advance the remaining Advance Requests up to US$300,000.</P>
<P
align=justify>4.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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&#146;s accounts receivable and security granted to such Prior
Factor are limited to an assignment of such accounts receivable collected by the
Prior Factor.</P>
<P
align=justify>4.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Loan will rank equally with the Prior Revolving Loan and the Borrower will
ensure execution by the Prior Revolving Loan Lenders of the Pari Passu
Agreement.</P>
<P
align=justify><STRONG>5.&nbsp;</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<STRONG><U>TERM</U> </STRONG></P>
<P
align=justify>5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject
to the provisions of Section 7, the Borrower will pay the Borrower&#146;s
Indebtedness to the Lender in full on July 31, 2009, unless sooner prepaid or
accelerated upon the occurrence and during the continuance of an Event of
Default. (the &#147;<B>Maturity Date</B>&#148;). </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_6></A>
<P align=center>- 6 - </P>
<P
align=justify><STRONG>6.</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<STRONG>&nbsp;<U>INTEREST</U> </STRONG></P>
<P
align=justify>6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The outstanding principal balance of the Loan will bear interest at the Interest
Rate. </P>
<P
align=justify>6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Interest at the Interest Rate will be calculated monthly, not in advance, as
well as before maturity, default, demand and judgment. </P>
<P
align=justify>6.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. </P>
<P
align=justify>6.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. </P>
<P
align=justify><STRONG>7.&nbsp;</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<STRONG><U>REPAYMENT</U> </STRONG></P>
<P
align=justify>7.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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&#146;s Loan and then
remains unpaid. </P>
<P
align=justify>7.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
the Maturity Date the Borrower will pay to the Lender the Borrower&#146;s
Indebtedness then outstanding in full. </P>
<P
align=justify>7.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Borrower will be entitled to prepay the whole or any portion of the Borrower&#146;s
Indebtedness at any time and from time to time, without notice, bonus or
penalty, except pursuant to section 8.4. </P>
<P
align=justify>7.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
amounts payable by the Borrower under this Agreement will be paid without
set-off or counterclaim, and without any deductions or withholdings whatsoever.
</P>
<P
align=justify>7.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Subject to the provisions hereof, all payments received by the Lender on account
of the Borrower&#146;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&#146;s Indebtedness, the Lender may appropriate such payment to such part or
parts of the Borrower&#146;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. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_7></A>
<P align=center>- 7 - </P>
<P
align=justify>7.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. </P>
<P
align=justify>7.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
anything in this Agreement to the contrary, any payment of principal of or
interest on the Borrower&#146;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&#146;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. </P>
<P
align=justify><STRONG>8.&nbsp;</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<STRONG><U>CONVERSION TO COMMON SHARES</U> </STRONG></P>
<P
align=justify>8.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
any time after the First Advance to the Maturity Date, if the Borrower has not
paid the Loan in full, the Lender may by written notice (the "Notice") to the
Borrower, exercise its rights of Conversion in respect of either a portion of or
the total outstanding amount of the Loan plus accrued Interest as of that date
into Units, at a price per Unit of US$0.10.</P>
<P
align=justify>8.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Within
seven (7) days of Notice by the Lender exercising its rights of Conversion
hereunder, the Borrower shall deliver a Share Certificate and a Warrant
Certificate to the Lender representing the number of Shares and Warrants
acquired by the Lender pursuant to the calculation set out in subparagraph 8.1
of this Agreement. </P>
<P
align=justify>8.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
any of the foregoing, Interest shall be calculated and included in any
Conversion of the Loan. </P>
<P
align=justify>8.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event that the Lender has advanced the First Advance but not advanced any
further Advances, upon receipt of the Notice by the Lender exercising its right
of Conversion, the Borrower may within seven (7) days in lieu of delivering a
Share Certificate and a Warrant Certificate, the Borrower may pay the full
amount of the Loan outstanding together with all outstanding Interest. In the
event that any Advances have been made in addition to the First Advance, the
Lender will maintain its right of Conversion to the Maturity Date and the
Borrower may not prepay the Loan.</P>
<P
align=justify><STRONG>9.</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<STRONG>&nbsp;<U>ADVANCE</U> </STRONG></P>
<P
align=justify>9.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Borrower may request an Advance on account of the Loan by executing and
delivering an Advance Request to the Lender dated as of the date of that Advance
Request. </P>
<P
align=justify>9.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Borrower agrees that subject to the provisions Article 10 hereof, the Lender may
make an Advance without the necessity of an Advance Request and any such Advance
and all interest from time to time accruing on account thereof will be secured
by the Security Documents. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_8></A>
<P align=center>- 8 - </P>
<P
align=justify><STRONG>10.</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG>
<U>CONDITIONS PRECEDENT</U> </STRONG></P>
<P
align=justify>10.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Lender&#146;s obligation to make any Advance is subject to the following conditions
precedent having been met to the Lender&#146;s sole satisfaction or waived by the
Lender in writing at the time of that Advance, namely: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD>
      <P align=justify>Prior to the Initial Advance Date only, the Lender having
      received a properly executed original of this Agreement and the Security
      Documents then in effect;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify>the Borrower&#146;s representations and warranties contained
      herein and in the Security Documents then in effect then being true and
      correct in all material respects;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(c) </TD>
    <TD>
      <P align=justify>the Security Documents being registered against the
      Borrower in the state of California;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(d) </TD>
    <TD>
      <P align=justify>there then being no outstanding Default or Event of
      Default;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(e) </TD>
    <TD>
      <P align=justify>except as contemplated by Section 9.2 hereof, the Lender
      having received an Advance Request from the Borrower for that
    Advance;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(f) </TD>
    <TD>
      <P align=justify>the Prior Revolving Loan Lenders have signed the Pari
      Passu Agreement; and</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(g) </TD>
    <TD>
      <P align=justify>after the making of such Advance the aggregate principal
      amount of all Advances outstanding not exceeding the principal amount of
      the Loan.</P></TD></TR></TABLE>
<P
align=justify><STRONG>11.&nbsp;</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><U>REPRESENTATIONS
AND WARRANTIES</U> </STRONG></P>
<P
align=justify>11.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Borrower represents and warrants as follows:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD>
      <P align=justify>it is a corporation duly organized, validly existing and
      in good standing under the laws of Delaware;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify>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;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(c) </TD>
    <TD>
      <P align=justify>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;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(d) </TD>
    <TD>
      <P align=justify>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</P></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_9></A>
<P align=center>- 9 - </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(e) </TD>
    <TD colSpan=2>
      <P align=justify>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:</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(i) </TD>
    <TD>
      <P align=justify>its organizational documents,</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(ii) </TD>
    <TD>
      <P align=justify>any law, regulation, or decree applicable or binding on
      it or any of its property, assets and undertaking, or</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(iii) </TD>
    <TD>
      <P align=justify>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.</P></TD></TR></TABLE>
<P
align=justify><STRONG>12.&nbsp;</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><U>COVENANTS</U>
</STRONG></P>
<P
align=justify>12.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Borrower will: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD>
      <P align=justify>comply with all applicable laws, ordinances or
      governmental rules or regulations to which it or any of its property,
      assets and undertaking are subject;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify>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</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(c) </TD>
    <TD>
      <P align=justify>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.</P></TD></TR></TABLE>
<P
align=justify>12.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD>
      <P align=justify>alter any of its organizational documents or its
      corporate organization;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify>change its name;</P></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_10></A>
<P align=center>- 10 - </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(c) </TD>
    <TD>
      <P align=justify>amalgamate, consolidate or merge with any other
      Person;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(d) </TD>
    <TD>
      <P align=justify>redeem any of its redeemable shares or securities or
      otherwise change its capital structure or shareholders;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(e) </TD>
    <TD>
      <P align=justify>incur any further indebtedness of either a direct or
      indirect nature to any party other than the Lender, the Prior Factor and
      the Prior Revolving Loan Lenders except in the normal course of
      business;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(f) </TD>
    <TD>
      <P align=justify>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;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(g) </TD>
    <TD>
      <P align=justify>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;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(h) </TD>
    <TD>
      <P align=justify>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;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(i) </TD>
    <TD>
      <P align=justify>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.</P></TD></TR></TABLE>
<P
align=justify>12.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;So
long as this Agreement remains in effect, the Borrower will provide the Lender
with the following information: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD>
      <P align=justify>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;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify>within 20 days of each calendar month end, management
      prepared monthly financial statements and aged payables and receivables
      for the Borrower;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD>
      <P align=justify>within 20 days of each calendar month end, an aged list
      of the Borrower&#146;s accounts receivable; and</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(c) </TD>
    <TD>
      <P align=justify>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.</P></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_11></A>
<P align=center>- 11 - </P>
<P
align=justify><STRONG>13.</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG>
<U>SECURITY</U></STRONG></P>
<P
align=justify>13.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
security for payment, observance and performance of the Borrower&#146;s Indebtedness,
the Borrower agrees to execute and deliver the following documents
(collectively, the &#147;<B>Security Documents</B>&#148;) in a form and manner
satisfactory to the Lender and the Lender&#146;s attorneys a security agreement from
the Borrower creating a security interest by way of priority security interest
in the Borrower&#146;s present and after-acquired personal property (including its
accounts receivable) and such other collateral described in the Security
Documents, subject to the terms described therein. </P>
<P
align=justify>13.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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&#146;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&#146;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&#146;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&#146;s Indebtedness will discharge
the Borrower or any of the Security Documents. </P>
<P
align=justify><STRONG>14.&nbsp;</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><U>EVENTS
OF DEFAULT</U> </STRONG></P>
<P
align=justify>14.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
and without prejudice to the demand nature of the Loan, at the option of the
Lender, the Borrower&#146;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: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD colSpan=2>
      <P align=justify>if the Borrower:</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(i) </TD>
    <TD>
      <P align=justify>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</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(ii) </TD>
    <TD>
      <P align=justify>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&#146;s receipt of such notice;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD colSpan=2>
      <P align=justify>if any representation or warranty given by or on behalf
      of the Borrower is untrue in any material respect;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(c) </TD>
    <TD colSpan=2>
      <P align=justify>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;</P></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_12></A>
<P align=center>- 12 - </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(d) </TD>
    <TD>
      <P align=justify>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;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(e) </TD>
    <TD>
      <P align=justify>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;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(f) </TD>
    <TD>
      <P align=justify>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;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(g) </TD>
    <TD>
      <P align=justify>if the Borrower ceases to carry on any material aspect of
      its business;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(h) </TD>
    <TD>
      <P align=justify>if the Borrower makes default in payment of any of the
      Borrower&#146;s Indebtedness or liability to the Lender, whether secured by the
      Security Documents or not;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(i) </TD>
    <TD>
      <P align=justify>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&#146;s
      Indebtedness or on the Borrower&#146;s ability to repay the Borrower&#146;s
      Indebtedness;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(j) </TD>
    <TD>
      <P align=justify>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;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(k) </TD>
    <TD>
      <P align=justify>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;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(l) </TD>
    <TD>
      <P align=justify>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</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(m) </TD>
    <TD>
      <P align=justify>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.</P></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_13></A>
<P align=center>- 13 - </P>
<P
align=justify><STRONG>15.&nbsp;</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><U>SECURITIES
ISSUED</U> </STRONG></P>
<P
align=justify>15.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Lender represents and warrants to, and covenants and agrees with the Borrower
that: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD colSpan=2>
      <P align=justify>the Lender makes the Loan to the Borrower and acquires
      the Conversion right in reliance upon the Exemption from registration
      provided by Section 4(2) of the Securities Act, Section 506 of Regulation
      D of the Securities Act, or Rule 903 of Regulation S of the Securities Act
      for the private offering of securities;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD colSpan=2>
      <P align=justify>the Lender is eligible to make the Loan to the Borrower
      and acquire the Securities in the Borrower under Regulation S;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(c) </TD>
    <TD colSpan=2>
      <P align=justify>the Lender is aware of the significant economic and other
      risks involved in making the Loan to the Borrower and in acquiring and/or
      exercising the Conversion right;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(d) </TD>
    <TD colSpan=2>
      <P align=justify>the Lender has consulted with its own securities advisor
      as to its eligibility to acquire the Securities under the laws of its home
      jurisdiction and acknowledges that the Borrower has made no effort and
      takes no responsibility for the consequences to the Lender as a non-U.S.
      investor acquiring the Securities and, in particular, in purchasing
      U.S.-based securities upon exercise, if any, of the Conversion
    right;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(e) </TD>
    <TD colSpan=2>
      <P align=justify>no federal or state agency has passed upon, or make any
      finding or determination as to the fairness of this investment, and that
      there have been no federal or state agency recommendations or endorsements
      of the investment made hereunder;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(f) </TD>
    <TD colSpan=2>
      <P align=justify>the Lender acknowledges that:</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(i) </TD>
    <TD>
      <P align=justify>there are substantial restrictions on the sale or
      transferability of any Securities and understands that, although the
      Borrower is a reporting company, the Lender is purchasing unregistered
      securities;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(ii) </TD>
    <TD>
      <P align=justify>the Borrower is not contractually obligated to register
      the Securities under the Securities Act; and</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(iii) </TD>
    <TD>
      <P align=justify>any Securities acquired by the Lender upon exercise of
      the Conversion right may not be sold or otherwise transferred without
      registration under the Securities Act, unless an exemption from
      registration is available.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(g) </TD>
    <TD colSpan=2>
      <P align=justify>the Lender has received all information and documentation
      and has asked all questions of Company representatives that it or its
      advisor deems necessary or desirable so that it can make an informed
      decision regarding the investment made
hereunder;</P></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_14></A>
<P align=center>- 14 - </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(h) </TD>
    <TD>
      <P align=justify>the Lender, alone or with its advisor, has enough
      knowledge and experience in financial and business matters to make it
      capable of evaluating the merits and risks of investing in the
    Company;</P></TD></TR></TABLE>
<P
align=justify>15.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Lender makes the Loan to the Borrower and acquires the Conversion right as
principal for its own account and not for the benefit of any other person; </P>
<P
align=justify><STRONG>16.</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG>
<U>SECURITIES EXEMPTION</U> </STRONG></P>
<P
align=justify>16.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Lender acknowledges that any Securities issued pursuant hereto will have
such hold periods as are required under applicable securities laws and as a
result may not be sold, transferred or otherwise disposed, except pursuant to an
effective registration statement under the Securities Act, or pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act and in each case only in accordance with all
applicable securities laws.</P>
<P
align=justify>16.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
certificate for the Securities of the Lender that has not been so registered and
that has not been sold under an exemption that permits removal of the legend,
shall bear a legend substantially in the following form, as appropriate: </P>
<blockquote>
  <blockquote>
    <p align="justify">&#147;THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED
      IN AN OFFSHORE TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED
      HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT
      OF 1933, AS AMENDED (THE &#147;SECURITIES ACT&#148;). NONE OF THE SECURITIES
      REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE SECURITIES ACT, OR ANY
      U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED
      OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS DEFINED HEREIN)
      OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION
      S UNDER THE SECURITIES ACT, 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 EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
      LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT
      BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT. &#147;UNITED
      STATES&#148; AND &#147;U.S. PERSON&#148; ARE AS DEFINED BY REGULATION S
      UNDER THE SECURITIES ACT.&#148; </p>
  </blockquote>
</blockquote>
<P
align=justify>16.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Upon the request of the Lender for a certificate representing any Securities
issuable pursuant hereto, the Borrower shall cause its transfer agent to remove
the foregoing legend from the certificate and issue to the Lender a new
certificate free of any transfer legend if:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD colSpan=2>
      <P align=justify>without an effective registration statement with such
      request, Borrower shall have received either:</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%">(i) </TD>
    <TD>
      <P align=justify>an opinion of counsel, in form, substance and scope
      customary for opinions in such circumstances, to the effect that any such
      legend may be removed from such certificate,
or</P></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_15></A>
<P align=center>- 15 - </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="10%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(ii) </TD>
    <TD>
      <P align=justify>satisfactory representations from the Lender that the
      Lender is eligible to sell such security under Rule 144;
  or</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify>a registration statement under the Securities Act
      covering the resale of such securities is in
effect.</P></TD></TR></TABLE>
<P
align=justify><STRONG>17.&nbsp;</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><U>WAIVER</U>
</STRONG></P>
<P
align=justify>17.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.</P>
<P
align=justify><STRONG>18.&nbsp;</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><U>REMEDIES
UNDER THIS AGREEMENT AND THE SECURITY</U> <U>DOCUMENTS</U> </STRONG></P>
<P
align=justify>18.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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. </P>
<P
align=justify>18.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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. </P>
<P
align=justify>18.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
acceptance by the Lender of any further security or of any payment of or on
account of any of the Borrower&#146;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. </P>
<P
align=justify><STRONG>19.&nbsp;</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<STRONG><U>LAPSE
AND CANCELLATION PERIODIC REVIEW</U> </STRONG></P>
<P
align=justify>19.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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&#146;s
obligations to continue to make Advances hereunder may, at the option of the
Lender, be withdrawn or cancelled. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_16></A>
<P align=center>- 16 - </P>
<P
align=justify><STRONG>20.&nbsp;</STRONG>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U><STRONG>MISCELLANEOUS</STRONG></U></P>
<P
align=justify>20.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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
&#147;<B>Judgment</B> <B>Currency</B>&#148;) an amount due in respect of the Borrower&#146;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
&#147;<B>Currency Conversion</B> <B>Date</B>&#148;). 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&#146;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&#146;s Indebtedness. For
the purposes of this clause, &#147;<B>Rate</B> <B>of</B> <B>Exchange</B>&#148; 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. </P>
<P
align=justify>20.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each of the parties hereto will forthwith at all times, and from time to time,
at the Borrower&#146;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. </P>
<P
align=justify>20.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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&#146;s
Indebtedness</P>
<P
align=justify>20.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.</P>
<P
align=justify>20.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_17></A>
<P align=center>- 17 - </P>
<P
align=justify>20.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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. </P>
<P
align=justify>20.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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. </P>
<P
align=justify>20.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</P>
<P
align=justify>20.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD>
      <P align=justify>If to the Borrower:</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>PANGLOBAL BRANDS INC.</B></P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>2853 E. Pico Blvd</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Los Angeles, CA 90023 USA</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P
      align=justify>Attention:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      Stephen Soller</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><br>
        Facsimile No.: (323) 266-6505 <br>
        email:
    StephenS@mynkbrand.com</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>with a copy to (which does not constitute
  notice):</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>CLARK WILSON LLP</B></P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>800 &#150; 885 West Georgia Street <BR>Vancouver, BC V6C 3H1
      <BR>Canada</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P
      align=justify>Attention:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
      &nbsp;Bernard Pinsky</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Facsimile No.: (604) 687-6314</P></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_18></A>
<P align=center>- 18 - </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify>If to the Lender:</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>PROVIDENCE WEALTH MANAGEMENT LTD, <BR></B>c/o Mr.
      Karim Khoury, Chabrier &amp; Partners (Reed Smith), <BR>3 rue du
      Mont-Blanc <BR>P.O. Box 1363 CH - 1211 <BR>Geneva 1 Switzerland;</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Attention: Charles Shaker</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Fax Number: 1.613.569.9994 <br>
        Email:
    Charles@providence.bb</P></TD></TR></TABLE>
<P align=justify>(or to such other address or number as any party may specify by
notice in writing to another party). </P>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp; 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.
</P>
<P
align=justify>20.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The descriptive headings of the several sections of this Agreement are inserted
for convenience only and do not constitute a part of this Agreement. </P>
<P
align=justify>20.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. </P>
<P
align=justify>20.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Lender acknowledges that it has consulted with and is represented by
separate legal counsel.</P>
<P
align=justify>20.13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. </P>
<P
align=justify>20.14&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_19></A>
<P align=center>- 19 - </P>
<P
align=justify>20.15&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. </P>
<P
align=justify>20.16&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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. </P>
<P
align=justify>20.17&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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&#146;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. </P>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>IN WITNESS WHEREOF</B>, the parties hereto have
caused this Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized on the 16th day of January, 2009. </P>
<P align=justify><B>PANGLOBAL BRANDS INC.</B> </P>
<P align=justify>Per:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>/s/ <em>Stephen Soller</em>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Authorized Signatory </P>
<P align=justify><B>PROVIDENCE WEALTH MANAGEMENT LTD </B></P>
<P align=justify>Per:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>/s/ <em>Charles Shaker</em>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Authorized Signatory </P>
<P align=justify>This is page 19 of an agreement entitled <B>REVOLVING LOAN
AGREEMENT</B> dated for reference January 16, 2009 made by <B>PANGLOBAL BRANDS
INC.</B> in favour of <B>Providence Wealth Management Ltd </B>in connection with
loan(s) aggregating US$1,000,000.00<B>.</B> </P>
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<P align=center><B>SCHEDULE A </B></P>
<P align=center><B>ADVANCE REQUEST </B></P>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TO:
Providence Wealth Management Ltd </P>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Advance Request Claim is delivered pursuant to the terms of a revolving loan
agreement (the &#147;<B>Loan Agreement</B>&#148;) made between the you and us dated for
reference January ___, 2009. All capitalized terms in this Advance Request
shall, unless otherwise specified herein, have the meaning given to them in the
Loan Agreement. </P>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
hereby request an Advance on account of the Loan in the amount of $
___________________. </P>
<P
align=justify>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
hereby certify that as at the date of this Advance Request:</P>
<P align=justify>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;The Advance requested will be utilized solely for working capital; </P>
<P align=justify>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;No Event of Default has occurred and is outstanding;</P>
<P
align=justify>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
warranties and representations made by us in the Loan Documents are true and
correct as of the date of this Advance Request; and</P>
<P
align=justify>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each of the Security Documents are true and correct as though made on and as of
the date hereof; </P>
<P align=justify>Yours very truly, </P>
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