CONSULTING AGREEMENT

CONSULTING AGREEMENT

This Consulting Agreement (“Agreement”) is entered into as of September 16th, 2007, by and between Panglobal Brands, Inc. (“Company”), a Delaware corporation, with its principal place of business at Huntington Park, California, and Lolly Factory, LLC, a California limited liability company (“LF”), and Mark Cywinski (“Consultant”), whose address is 11920 Laurel Hills Rd., Studio City, California. This Agreement is effective as of the date set forth above (Effective Date, August 20, 2007 the “Effective Date”).

WHEREAS, the Company is in the business of design, production and sale of clothing; and

WHEREAS, LF has substantial expertise in the sale and merchandising of clothing and is in the business of providing consulting services to apparel manufacturers; and

WHEREAS, Consultant has been a consultant to Consultant’s prior client , pursuant to a verbal agreement and prior thereto, written agreement between Consultant and Consultant’s prior client; and

WHEREAS, the representations and obligations contained herein by Company are a material inducement for Consultant to terminate his relationship with his prior client; and

WHEREAS, Cywinski is an employee of LF and has experience and expertise in sales, merchandising and marketing; and

WHEREAS, the Company desires to engage the services of LF to conduct and direct the merchandising and sales of Company’s products in its newly-formed Junior Division and Contemporary Knit Division, upon the terms and conditions set forth herein; and

WHEREAS, LF is willing to provide those services for Company, upon the terms and conditions set forth herein;

NOW THEREFORE, in consideration of the mutual covenants, promises and other valuable consideration as described herein, the parties agree as follows:

(a)         The Company hereby engages the services of LF, and LF hereby agrees to provide consulting services to the Company, commencing on the Effective Date upon the terms and conditions set forth herein.

(b)        In carrying out its obligations hereunder, LF agrees to assign Consultant to Company on a full-time and exclusive basis to carry out LF’s obligations under this Agreement. The availability and performance obligations of LF by Consultant is a material inducement to Company to enter into this Agreement. The performance by Company of its obligations to LF and/or Consultant under this Agreement are premised and conditioned upon Consultant’s being

made available and providing on a full-time and exclusive basis sales, marketing and merchandising consulting to Company.

2.              Term of Agreement. This Agreement is for a fixed period, commencing as of the Effective Date and continuing through December 31, 2010, except as earlier terminated pursuant to the terms set forth herein.

(a)         Consultant shall use his exclusive best efforts and devote all time, attention, knowledge and skills as are reasonably necessary to perform, supervise and oversee merchandising, sales and solicitation of orders for the Junior Division (including knits and wovens) and Contemporary Knit Division of the Company. Consultant shall report to the Chief Executive Officer of Company. The sales and merchandising staff of Company shall report to Consultant. Consultant shall not undertake any other clients or accounts or any other consulting or employment of any type or nature during the term of this Agreement.

(b)         Consultant shall have the right to solicit orders for the products of Company for sale worldwide (but excluding any territories outside of the United States for which exclusive licensing or distribution agreements have been granted to any third party).

(c)         Consultant shall follow and quote the pricing and sales conditions, including, without limitation, gross profit margin, delivery and payment terms, provided by Company to Consultant for Company products that Consultant sells, subject to modification in Consultant’s reasonable judgment. The Company agrees that Consultant shall have the right to provide input into the formulation (and amendment) of such terms.

(e)         Consultant shall forward to Company the original copy of each completed purchase order (the “Purchase Order”) for sales of Company products to customers that he receives no later than one (1) business day following receipt of such Purchase Orders by Consultant. The Purchase Order shall be subject to approval by Company. Company shall promptly notify Consultant of its acceptance or rejection of any Purchase Order for products of the Junior Division or Contemporary Knit Division, including but not limited to those solicited on Company’s behalf by others, and of any subsequent modification or cancellation thereof.

Company shall be responsible for the issuance of invoices to customers on approved Purchase Orders. All payments on invoices must be made payable to Company (or its factor). Consultant shall forward promptly to Company any and all money, payment, or remittance in any form which Consultant has received from any customer in connection with any invoices for any customer’s purchase of Company products.

Company shall provide copies of all invoices for Junior Division and Contemporary Knit Division sales simultaneously with Company’s delivery of the invoices to its customers.

Consultant shall perform such additional tasks that are reasonably within the scope of his duties as directed by the Company.

Company shall make available to Consultant an office and access to telephone, computer and other standard operating infrastructure during the term of this Agreement.

Consultant shall report to and take direction from the President of Company or such other officer or representative as shall be designated by him.

(a)        Company and Consultant each understand and agree that LF is an independent contractor and that Consultant is an employee of LF, and not an employee of Company. Except as provided in this Agreement, Consultant shall use his own supplies and equipment in the performance of his duties, and shall be solely responsible for, and exercise independent judgment as to, the time, place, method and manner in which those duties are performed. This Agreement shall not be construed to create the relationship of employer and employee between Company and Consultant or Company and LF. Company does not have, and shall not exercise any control or direction over the time, place, method and manner in which Consultant performs his duties, except that Consultant agrees to perform his work under the Agreement in accordance with currently approved methods and practices in his industry.

(b)         Company and LF and Company and Consultant each agree and understand that there is no joint venture or partnership between them.

Consultant shall represent himself to all third parties as an independent contractor although he may be provided with a business card identifying him as “Director of Sales” or such other title which is commensurate with the services he is providing to Company.

Except as provided in this Agreement, Consultant is not an agent of Company and shall not have the right to bind Company, to transact any business in Company’s name or on behalf of Company, or to make any promises or representations on behalf of Company.

(a)         LF and Consultant understand and agree that because of their status as an independent contractor and employee of independent contractor, respectively, Company shall not have any obligation or liability whatsoever to LF or Consultant for federal or state income or employment tax withholding, payment of employment or unemployment insurance contributions or benefits with respect to LF or Consultant, minimum wage and overtime requirements, workers’ compensation coverage, or other similar taxes or liabilities.

(b)        LF and Consultant agree, jointly and severally, to indemnify and hold Company harmless for any claims made against Company by any taxing or other governmental authority for failure to withhold or pay any federal or state income or employment tax, employment or unemployment insurance, contributions or benefits with respect to LF or Consultant, any payment pursuant to applicable employment statutes (including without limitation, minimum wage or overtime payments), workers’ compensation benefits, or other similar liabilities which would otherwise be an obligation of the Company were LF or Consultant an employee of the Company. In the event of any such claims made against the Company,

Company shall promptly notify LF and Consultant thereof and they shall have the opportunity to participate in the defense thereof at their expense.

6.              Fees . Subject to the terms of this Agreement, LF shall receive consulting fees as follows:

(a)            On September 20, 2007, October 20, 2007, and November 20, 2007, LF shall receive a consulting fee of $**** per month, payable in two equal installments on the first and fifteenth of each month.

(b)            LF shall receive a deferred consulting fee of $**** for the month of November 2007, payable on or before March 31, 2008. Such fee shall be deemed to have been earned as of November 30, 2007.

(c)            LF shall receive a deferred consulting fee of $**** for the month of December 2007, payable 1/3 on or before April 30, 2008, 1/3 on or before May 31, 2008 and 1/3 on or before June 30, 2008. Such fee shall be deemed to have been earned as of December 31, 2007.

(e)            Commencing January 20, 2008, LF shall be paid a commission as follows:

“Junior Division” as used in this Agreement shall mean Company’s junior knit and woven products lines as reasonably designated by Company.

The Junior Rate with respect to any order for Junior Division products is based upon Company’s obtaining, at a minimum, a 25% gross margin on such order. In the event that Company’s gross margin for a specific order in the Junior Division falls below 25%, the Junior Rate for such order shall be based upon agreement between the parties; the parties agree to negotiate such Junior Rate in good faith.

“Contemporary Knit Division” as used in this Agreement shall mean Company’s contemporary knit product line as reasonably designated by Company.

The Contemporary Rate with respect to any order for Contemporary Division products is based on upon Company’s obtaining, at a minimum, a 50% gross margin on such order. In the event that Company’s gross margin for a specific order in the Contemporary Knit Division falls below 50%, the Contemporary Rate shall be based upon agreement between the parties; the parties agree to negotiate such Contemporary Rate in good faith.

“Net Sales” as used herein shall mean the amount of gross sales for orders actually shipped to customers less returns, discounts, allowances, chargebacks, customer deductions of any type or nature and losses for bad debts on client-risk or non-factored orders.

(f)            Annual Draw. Commencing on January 20, 2008, LF shall receive an annual draw in the amount of $**** ($**** per month), which amount shall be an advance against the commissions earned by LF. This amount shall be deducted from the monthly commissions paid to LF pursuant to this Agreement and shall be owing to Company in the event commissions due are not sufficient to repay the advances.

7.              Sales Targets. LF and Consultant shall use good-faith efforts to achieve the following combined sales targets for the Junior Division and Contemporary Knit Division, although such targets are not in any way a minimum or guarantee of sales, and failure to achieve such targets shall not be deemed a breach of this Agreement. These targets relate to all sales by the Junior and Contemporary Knit Divisions, and not merely those sales generated by Consultant.

January 1, 2008, through December 31, 2008 : Thirty million dollars ($30,000,000) in Net Sales (“First Year Sales Target”);

January 1, 2009, through December 31, 2009 : Forty five million dollars ($45,000,000) in Net Sales (“Second Year Sales Target”); and

January 1, 2010, through December 31, 2010 : Sixty million dollars ($60,000,000) in Net Sales (“Third Year Sales Target”).

8.             Expenses. Consultant may incur reasonable expenses for travel, meals, lodging, entertainment and similar items, including but not limited to cellphone, in the performance of his duties in accordance with Company’s policies and procedures applicable to executive employees of Company. Air travel shall be economy class on flights under two (2) hours and business class on flights over two (2) hours; if business class is not offered on such flight, Consultant shall be entitled to a first-class ticket. Company will reimburse LF for reasonable business expenses so incurred by Consultant; provided, however, that such expenses are incurred and accounted for in

accordance with the reasonable policies and procedures established by Company. Any expense for which LF seeks reimbursement must be submitted to Company within thirty (30) days of the date the expense was incurred. Any expense submitted to Company more than thirty (30) days after the expense was incurred may be considered and paid at the sole discretion of Company.

9.              Stock Transfer. As a material inducement to Consultant to enter into this Agreement with Company, Company shall cause Jacques Ninio (“Ninio”), the holder of at least 2,500,000 shares of common stock of the Company, to transfer his ownership in two million five hundred thousand (2,500,000) restricted shares of common stock of Company (the “Shares”) to LF or such third party as LF shall direct, free and clear of all liens and encumbrances (except only as provided below), without any additional payment required of LF, pursuant to the following terms and conditions:

Prior to the Effective Date, the Company shall cause Ninio to deposit all of the Shares (evidenced by thirteen (13) share certificates) with Michael C. Baum (“Escrow Agent”), who shall act as escrow agent and release the Shares only as set forth herein, pursuant to an Escrow Agreement in the form of Exhibit “A” hereto. The Company shall also cause Ninio to execute and deliver to Escrow Agent a power of attorney, stock powers and such other instruments of transfer as may be reasonably required by Escrow Agent or Consultant in order for Consultant to obtain ownership of the Shares.

based on LF’s or Consultant’s Net Sales as compared to the Third Year Sales Target.

subject to applicable securities law and restrictions, and LF and its designee agrees to be bound thereby; provided that Company shall not take any action or permit Escrow Agent or Ninio to take any action that would impose additional restrictions on the Shares. LF agrees that the only permitted designee under this Agreement is Consultant.

designee, they are solely responsible for payment of any tax liabilities or obligations related to, or arising from the transfer of the Shares to them as set forth herein and that Company shall not have any obligation or liability whatsoever to LF or its designee for federal or state income taxes relati