AGREEMENT
Made Between:
Pacific Channel Ltd.
A company incorporated under the laws of the
British Virgin Islands and having its
administrative office located at Suite 2008
Technology Park
18 On Lai St.
Shatin, N.T.
Hong Kong
(hereinafter referred to as "PCL")
- and -
Megola Inc
A company incorporated under the laws of the State of Nevada
And having its head office at
446 Lyndock St #102
Corunna, ON, Canada, N0N 1G0
(hereinafter referred to as "Megola")
Whereas PCL owns the exclusive distribution rights to Canada and
manufacturing
rights for North America (the "Territory") to the fire
extinguishing, fire
retarding, and/or fire inhibiting products generally and
specifically described
and set forth in Schedule A hereto (said products being hereinafter
referred to
as the "Hartindo Products" and singularly as a "Hartindo
Product");
And Whereas Megola has negotiated with PCL to be appointed its (a)
exclusive
distributor/distribution network in Canada for Hartindo Products,
(b) to
exclusive rights to establish a manufacturing facility or
facilities for
Hartindo Products sold anywhere in North America; and (c)
non-exclusive
distributor for Hartindo Products sold anywhere in the United
States.
Now Therefore the Parties hereto covenant and agree as follows:
1. For and in consideration of the sum of US$ $900,000 to be fully
paid and
satisfied by the issuance and allotment to PCL of 30,000,000 common
shares of
MGOA as fully paid and non-assessable at the price of US $0.03 per
share, PCL
hereby grants to Megola the exclusive and non-exclusive rights set
forth in this
agreement, upon the terms and conditions herein set forth.
2. PCL hereby appoints Megola its exclusive and sole company for
the following
purposes:
(a) to distribute and/or establish a distribution network
throughout Canada for
Hartindo Products including the right, subject to the prior written
approval of
PCL, to enter into contracts with distributors, agents and/or
sales
representatives (collectively called "Sales Agents" and singularly
a "Sales
Agent") for the marketing of Hartindo Products in Canada; and
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(b) to arrange for the manufacture within the Territory of Hartindo
Products,
subject to the prior written approval of PCL, either through
contract
manufacturing, or in a plant or plants to be purchased or
constructed for that
purpose, which arrangements may be effected through any of the
Sales Agents or
undertaken by Megola directly;
PCL hereby appoints Megola on a non- exclusive basis for the
following purposes:
to distribute Hartindo Products in the United States.
3. With respect to every contract Megola enters into as authorized
hereunder,
the revenues and other consideration described below, if any,
derived by Megola
therefrom, shall be disbursed as follows:
(a) 50% of all up-front fees received by Megola and 50% of all
other forms of
consideration received by Megola, (including shares of the grantee
corporation),
as a one-time payment for the Megola grant of a license or rights
as herein
authorized, shall be paid to PCL and 50% retained by Megola;
(b) 50% of all other consideration r
