April
28, 2009            

    Agency
Agreement

    


    Megola Inc., a corporation
pursuant to the laws of the State of Nevada, having the principle place of
business at Suite 111, 704 Mara Street, Point Edward, Ontario N7V LX4 (herein
called MEGOLA)

    


    and

    Innovative Composites Inc., a
corporation of the Province of Ontario, having its principle place of business
at 5500 North Service Road, Burlington, Ontario L7L 6W6 (herein called
ICI)

    


    
      	
            	
              A.

            	
              Background
      of Agreement

            


    

    


    MEGOLA
and ICI entered into a Memorandum of Understanding on March 13, 2009 whereby the
following points and terms were agreed to and which are now binding on both
parties;

    


    
      	
               
      

            	
              1.

            	
              MEGOLA
      has the exclusive rights to manufacture the Hartindo line of Fire
      Extinguishing Suppressants and Fire Inhibitors in North America (Appendix
      A(ii)). MEGOLA also has the exclusive rights to distribute the Hartindo
      line of products (“Products”) in Canada and co-exclusive distribution
      rights in the USA. MEGOLA has the desire to commercialize and market the
      Products in order to advance their business plan and have recognized the
      size of the potential market and the manpower, skills and resources that
      will be required to develop and capitalize on this
      potential.  MEGOLA is looking for solutions and assistance in
      this area.

            


    

     

    
      	
               
      

            	
              2.

            	
              ICI
      has the experience, contacts and resources to provide this solution and is
      ready, able, and willing to provide them to MEGOLA under a marketing and
      commercialization cooperation agreement between the
    parties.

            


    

     

    
      	
               
      

            	
              3.

            	
              MEGOLA
      represents that the manufacturing and distribution rights have been
      properly and legally acquired and that all terms required to maintain them
      in good standing have been met and will continue to be met in the
      future.

            


    

     

    
      	
               
      

            	
              4.

            	
              It
      is recognized that Megola has granted certain distribution rights to third
      parties as set out in Schedule A of this Agreement. ICI recognizes that
      certain of the companies listed in Appendix A have expended considerable
      effort and are close to obtaining sales contracts. ICI supported by Megola
      is prepared to support those initiatives under reasonable commercial
      terms.

            


    

     

    
      	
               
      

            	
              5.

            	
              ICI
      will become an Agent for commercialization of the Hartindo Anti-Fire
      product line on behalf of MEGOLA (Appendix A(ii)). As Agent, ICI will be
      provided with the authority and responsibility to coordinate all
      activities of all parties involved in commercialization of the Hartindo
      product line in North America. subject to ICI executing commercial
      agreements with the parties set out in Appendix
  A.

            


    

     

    
      	
               
      

            	
              6.

            	
              This
      Agreement will remain in effect perpetually and shall be extended for all
      Hartindo products (Appendix A(ii)) upon achieving the sales milestone for
      AF21 and achieving 15% annual sales growth for 5 years
      thereafter.

            


    

     

    
      	
               
      

            	
              7.

            	
              It
      is understood that Megola will not grant any additional distribution
      rights to any third party for sales of Hartindo products except as noted
      in Appendix A hereto, unless agreed upon in writing by both parties to
      this Agreement.

            


    

     

    
      	
               
      

            	
              8.

            	
              ICI
      will become  an Agent for commercialization of the Hartindo
      anti-fire product line (Appendix A(ii)) on behalf of MEGOLA and will
      manage the entire commercialization process inclusive of representative
      management, compensation, training, etc.
  including:

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (a)

            	
              Develop
      and provide marketing materials and strategies on an industry by industry
      basis

            


    

     

    
      	
               
      

            	
              (b)

            	
              Provide
      dedicated customer service
representatives

            


    

     

    
      	
               
      

            	
              (c)

            	
              Provide
      engineering support for product development and
  testing

            


    

     

    
      	
               
      

            	
              (d)

            	
              Utilize
      a structured program management process from product inception through
      production release

            


    

     

    B.
Financial terms

     

    
      	
               
      

            	
              1.

            	
              ICI
      will provide Megola with a $100,000 (CAD) deposit upon execution of this
      Agreement which will be used to secure Hartindo product. Initial sales
      will be paid for from the $100,000 deposit until the deposit amount has
      been fully utilized. All sales subsequent to this will require a deposit
      equal to cost price at the time of order or such commercial terms as
      agreed to in writing by both parties. Terms shall be reviewed quarterly
      and if Megola can negotiate terms with suppliers it will pass those terms
      to ICI.

            


    

     

    
      	
               
      

            	
              2.

            	
              ICI
      will purchase AF21 product from Megola under a profit sharing arrangement
      as defined in Appendix B (omitted).

            


    

     

    
      	
               
      

            	
              3.

            	
              For
      any contracts that ICI receives utilizing its composite technology that
      also requires the application of the Hartindo material, ICI will acquire
      the raw material under favourable
conditions.

            


    

     

    
      	
               
      

            	
              4.

            	
              ICI
      will invoice customers for the Hartindo products and pay sales
      commissions. MEGOLA will have 24 hour online access to CRM software for
      financial review and information
purposes.

            


    

    


    
      	
               
      

            	
              5.

            	
              Testing
      and Certification Costs will be paid for by ICI. Megola will provide ICI
      with a credit representative of 50% of Testing and Certification costs
      required for each customer at the time of the initial
    order.

            


    

     

    
      	
               
      

            	
              6.

            	
              All
      technical knowledge, testing results and certifications will become the
      joint property of ICI and Megola for the advancement of the
      commercialization of the Hartindo line of products. Transfer or disclosure
      of any of the knowledge or certifications obtained to any third party
      requires the written consent of both Megola and
  ICI.

            


    

     

    
      	
               
      

            	
              7.

            	
              Hartindo
      product samples for testing purposes will be provided to ICI or their
      prospective customers on a sample cost plus shipping
  basis.

            


    

     

    
      	
               
      

            	
              8.

            	
              Hartindo
      Marketing and Promotional Materials will be developed and paid for by
      ICI.

            


    

     

    
      	
               
      

            	
              9.

            	
              Sales
      Commissions will be the responsibility of
ICI.

            


    

    


    C.
Vulcan Technologies “VULCAN” Agreement

     

    MEGOLA
acknowledges that ICI has entered into a binding agreement with VULCAN as per
“Appendix C”(omitted)

     

    D.
Other Terms

     

    
      	
               
      

            	
              1.

            	
              No
      press releases regarding this agreement shall be issued by either ICI or
      MEGOLA without prior consultation and concurrence between ICI and MEGOLA
      (as evidenced by the written acceptance of such releases or statements by
      the President of MEGOLA and at least one of the directors of ICI),
      provided that no party shall be prevented from making any disclosure which
      is required to be made by law or any rule of a stock exchange or similar
      organization to which it is bound. It is further understood that the
      details of this Agreement will not be shared with any third party until
      after a press release describing its contents has been
      released.

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    
      	
               
      

            	
              2.

            	
              If
      MEGOLA is unable to provide ICI with the required volumes and/or
      quality  of Hartindo products or in the event that MEGOLA, for
      whatever reason, is not able to manufacture and/or deliver the Product to
      ICI and/or ICI’s Customers in accordance with MEGOLA’S normal and
      customary manufacturing and delivery practices in the chemical industry,
      or if the Product fails to conform to its specifications due to a lapse or
      series of lapses in quality control, then and in that event ICI shall have
      the authority to approach PCL and/or Newstar Chemical to obtain the
      license and right to manufacture the Product in accordance with its
      specifications in order to meet ICI’s and/or ICI’s Customer Product orders
      and the milestones set out in Appendix B (omitted) shall be adjusted for
      the availability of Product. If ICI were to start a relationship with PCL
      and/or Newstar Chemicals, Megola shall be compensated under mutually
      acceptable terms.

            


    

     

    
      	
               
      

            	
              3.

            	
              This
      agreement will be governed by the laws of the State of
    Nevada

            


    

     

    
      	
               
      

            	
              4.

            	
              This
      Agreement imposes personal obligations on ICI and MEGOLA.  ICI
      and MEGOLA shall not assign any of their respective rights under this
      Agreement not specifically transferable by its terms without the written
      consent of the other.

            


    

     

    
      	
               
      

            	
              5.

            	
              This
      Agreement, any documents incorporated by reference herein and any
      Appendixes hereto, constitutes the entire agreement between the parties
      pertaining to the subject matter hereof and supersede all prior
      agreements, understandings, negotiations and discussions with respect to
      the subject matter hereof whether oral or written, including the
      Memorandum of Understanding dated March 13, 2009 between MEGOLA and
      ICI.

            


    

     

    
      
        	
              	
                6.

              	
                A
      provision of this Agreement may be altered only by a writing signed by
      both parties. No
      supplement, modification or waiver of this Agreement shall be binding upon
      the parties unless executed in writing by
  them.

              


      

    

     

    Dated
this 28th day of April, 2009

    


    
      
        
          
            
              
                
                  
                    
                      	Innovative Composites
      Inc. 	 	Megola Inc
	 	 	 	 	 
	
                              Per:

                            	 
      	 
      	
                              Per:

                            	 
      
	
                              Terry
      Ball, President and CEO

                            	 
      	
                              Joel
      Gardner, President and
CEO

                            


                    

                  

                

              

            

          

        

      

    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Appendix
A

     

    
      	
              (i)

            	
              ICI
      acknowledges that MEGOLA has entered into Agreements and Discussions with
      various Customers and Sales, Marketing and Distribution groups prior to
      entering into this Agreement. The following list shall be exempt from this
      agreement:

            


    

     

    
      	
               
      

            	
              o

            	
              WoodSmart
      Solutions Inc. and all Bluwood Licensees – Definitive
      Agreement

            


    

     

    
      	
               
      

            	
              o

            	
              Janus
      Products Corp. – Definitive
Agreement

            


    

     

    
      	
               
      

            	
              o

            	
              Vulcan
      Technologies, LLC – Definitive
Agreement

            


    

     

    
      	
               
      

            	
              o

            	
              Innovative
      Synergies, LLC - MOU

            


    

     

    
      	 	
              o

            	
              New
      Fire Solutions, LLC – MOU

            


    

     

    
      	
               
      

            	
              o

            	
              Lorvin
      Steel Ltd. and /or Subsidiaries – Verbal
  Agreement

            


    

     

    
      	
               
      

            	
              o

            	
              CTT
      Group - MOU

            


    

     

    
      	
               
      

            	
              o

            	
              Logistik
      Unicorp. and/or Subsidiaries - MOU

            


    

     

    
      	
               
      

            	
              o

            	
              Hazmat
      4U and Hazmat 1 - MOU

            


    

     

    MSE
Enviro-tech Corp- has a distribution agreement with Pacific Channel Limited for
exclusive agency for Hartindo sales in USA but it excludes any
sales distribution agreements that Megola Inc enters into with other companies
as listed above. MSE has authorization to obtain and purchase product from
Megola Inc. MSE and Megola have negotiated joint ventures with WoodSmart and
Janus Corp above.

     

    
      	
              (ii)

            	
              At
      present, MEGOLA can meet the manufacturing and supply requirements
      necessary to provide ICI with the following Hartindo Products for
      commercialization:

            


    

     

    Hartindo
AF21 in all its various forms (concentrate, wood and fabric solution,
powder)

     

    Titan 21
Blankets

     

    AF31 40/0
Spray (Xmas Tree/ Kitchen/ Boat/ Car Spray)

     

    Megola
agrees to extend the validity of this agreement to the commercialization of any
additional Hartindo products (AF31, AF11E, Dectan or any other Hartindo
products), subject to ICI meeting the milestones set out in Appendix B. Any
terms and conditions related to the commercialization of future products will be
determined at that time.