NOTE AND SECURITY AGREEMENT
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Principal amount: $250,000 USD
Date: February 7, 2007
FOR VALUE RECEIVED, the undersigned hereby promises to pay to FireStop USA, LLC
["Firestop"] 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 Firestop. If this Note is not
repaid when due, in addition to the pledged assets as described below, FireStop
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 State of
Wisconsin. Exclusive jurisdiction and venue for all actions arising out of, or
relating to, this Note and Security Agreement shall be in Kenosha County,
Wisconsin. 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 FireStop in enforcing its rights under this Note and
Security Agreement.
PLEDGE AND SECURITY AGREEMENT. As security for the performance in full of the
obligations of Megola under this Note, Megola hereby pledges to FireStop, and
creates in favor of FireStop, a first priority security interest in all of the
rights, title and interest in and to U.S. Manufacturing Rights under the
Agreement attached hereto as Exhibit A. Megola, Inc. agrees to sign any
financing statements or other documents necessary or appropriate to perfect the
lien rights granted herein, and authorizes FireStop to file a UCC-1 Financing
Statement in Nevada and in Ontario. Megola, Inc. shall sign any documents
necessary or appropriate to reflect the perfection of the security interests
within seven (7) days following written request by FireStop.
Megola, Inc.
By:_____________________
Xxxx Xxxxxxx, President
