PROMISSORY NOTE AND SECURITY AGREEMENT
This PROMISSORY NOTE AND SECURITY AGREEMENT (this “Agreement”) is entered into as of this
14th day of March, 2008 between American Oil & Gas, Inc., a Nevada corporation ( the “Borrower”), and
Jefferies Group, Inc., a Delaware corporation (the “Lender”).
WHEREAS, Lender has previously, or concurrently with the execution of this Agreement, lent to the
Borrower an amount equal $8,600,000 (the “Loan”);
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Promise to Pay . For value received, the Borrower promises to pay to the order of the Lender, in lawful
money of the United States of America, in immediately available funds, the principal amount of Eight Million,
Six Hundred Thousand Dollars ($8,600,000) or the then outstanding principal amount of the Loan, together
with interest thereon, on or prior to September 30, 2008. The principal amount of the Loan (and any accrued
and unpaid interest) shall bear interest from the date hereof at a rate equal to the Overnight London Interbank
Offered Rate (as quoted on Bloomberg) plus 2.5%. Interest will accrue each month and shall be paid on or
prior to the fifth business day of every month.
2. Voluntary Prepayment . The Borrower shall have the right, at any time, or from time to time, to prepay,
without premium or penalty, the whole or any part of the principal or interest amount owing hereunder and
3. Fees and Expenses . The Borrower agrees to pay all fees, costs, and expenses, including all reasonable
attorneys’ fees and expenses, incurred by the Lender in connection with the enforcement of this Agreement or
in connection with any other matters contemplated by or arising under this Agreement.
4. Application of Payments . All payments made hereunder shall be applied first to any unpaid costs, fees and
expenses payable to the Lender hereun