NOTE AND SECURITY AGREEMENT Principal amount: $250,000 USD Date: July 24, 2007
Exhibit
10.1
Principal
amount: $250,000 USD
Date:
July 24, 2007
FOR
VALUE
RECEIVED, the undersigned hereby promises to pay to Pacific Channel Ltd. [“PCL”]
the sum of TWO HUNDRED FIFTY THOUSAND U. S. Dollars ($250,000), with no interest
thereon if repaid when due. Said sum shall be paid in the following manner:
$250,000 USD to be repaid in its entirety six months from the date hereof,
unless such date is extended by PCL. If this Note is not repaid when due, in
addition to the pledged assets as described below, PCL will be entitled to
interest that is accrued against the outstanding principal on a daily basis
at
the annual simple rate of 15% from the date above until the loan is paid off
by
Megola.
The
undersigned and all other parties to this note, whether as endorsers, guarantors
or sureties, agree to remain fully bound until this note shall be fully paid
and
waive demand, presentment and protest and all notices hereto and further agree
to remain bound notwithstanding any extension, modification, waiver, or other
indulgence or discharge or release of any obligor hereunder or exchange,
substitution, or release of any collateral granted as security for this note.
No
modification or indulgence by any holder hereof shall be binding unless in
writing; and any indulgence on any one occasion shall not be an indulgence
for
any other or future occasion. Any modification or change in terms, hereunder
granted by any holder hereof, shall be valid and binding upon each of the
undersigned, notwithstanding the acknowledgement of any of the undersigned,
and
each of the undersigned does hereby irrevocably grant to each of the others
a
power of attorney to enter into any such modification on their behalf. This
note
shall take effect as a sealed instrument and shall be construed, governed and
enforced in accordance with the laws of the Province of Ontario. If Megola,
Inc.
defaults under any term or provision of this Note and Security Agreement,
Megola, Inc. agrees to pay the reasonable attorneys fees and court costs
incurred by PCL in enforcing its rights under this Note and Security Agreement
within seven (7) days following written request by PCL.
PLEDGE
AND SECURITY AGREEMENT. As security for the performance in full of the
obligations of Megola under this Note, Megola hereby pledges to PCL the right
to
obtain the equivalent value of any outstanding loan balance in restricted MGOA
common shares at the six month average of market value.
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Megola,
Inc.
By:
/s/ Xxxx Xxxxxxx
Xxxx
Xxxxxxx, President
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