EXHIBIT 10.11
AGREEMENT
THIS AGREEMENT (THE "AGREEMENT") is made this 14th day of January 2003, by
and between Suburban Capital Corporation, a Delaware corporation ("Advisor") and
Gateway Distributors, Ltd., a Nevada corporation (the "Company").
WHEREAS, Advisor and Company have heretofore entered into a written
agreement dated October 22, 2002; and
WHEREAS, it is the intent of Advisor and Company (the "Parties") to enter
into a new agreement which will supercede and replace any and all existing
consulting contracts and agreements, whether written or oral, which have
heretofore existed between the parties, their agents and assigns; and
WHEREAS, it is the intent that this Agreement, and any subsequent written
amendments or addendums thereto, shall set forth all duties between the parties
and shall govern all subsequent dealings between the Parties; and
WHEREAS, Advisor and Advisor's Personnel and sub-contractors (as defined
below) have experience in evaluating and effecting mergers and acquisitions,
advising corporate management, and in performing general administrative duties
for publicly-held companies and development stage investment ventures; and
WHEREAS, the Company has previously retained Advisor to advise and assist
the Company in its development on the terms and conditions set forth in previous
agreements between the parties; and
WHEREAS, it is the intent that this Agreement settle all claims of Advisor
for monies for services performed, or to be performed, pursuant to any and all
previous agreements between the parties.
NOW, THEREFORE, in consideration of the payment to advisor of the sum of
One Dollar ($1.00), the receipt of which is hereby acknowledged, and in
consideration of the mutual promises, covenants and agreements contained herein,
and for other good and valuable consideration, including, but not limited to,
the cancellation of all previous contracts and agreements between and among the
parties, the receipt and sufficiency of which is hereby acknowledged, the
Company and Advisor (the "Parties") agree as follows:
The Company has previously hired Advisor, pursuant to an agreement dated
October 22, 2002, to assist the Company in it's effecting the purchase of
businesses and assets relative to its business and growth strategy,
acquisition of other operations or businesses, general business and
financial issues consulting, the introduction of the Company to other
advisors or other third parties that may assist the Company in its plans
and future (the "Services"). The Services were to be provided on a "best
efforts" basis directly and through Advisor's employees or others employed
or retained and under the direction of Advisor (Advisor's Personnel");
provided, however, that the Services were to expressly exclude all legal
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advice, accounting services or other services which require licenses or
certification which Advisor may not have, services in connection with the
offer or sale of securities in a capital raising transaction, and services
which might directly or indirectly promote or maintain a market for the
securities of the Company.
Advisor was to serve as an advisor to the Company for the purpose of
finding and presenting potential business combinations to the Company
during the term of this Agreement.
COMPENSATION AND MEANS OF PAYMENT OF COMPENSATION
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As a complete and total satisfaction of all claims of Advisor for fees
which have been earned to the date of this agreement, the Company agrees to pay
Advisor, or at the option of Advisor an employee or
contractor of Advisor, $550,000 for the Services which have been rendered under
the terms all prior agreements between the parties ("Advisory Fee"). The Company
shall pay the $550,000 by the delivery to Advisor of a number of shares of the
Company's common stock, par value $.001 per share, that when sold will provide
to advisor, or its assignee the sum of $550,000.
The Parties agree that the value of uncompensated services rendered by
Advisor to the date of this agreement is $550,000 and that the amount of
$550,000 is due to advisor for services previously performed during the term of
the previous Agreement.
Commencing on the date of this Agreement, the Company shall issue and
deliver to the Advisor as compensation for services previously rendered, as
described above, shares having a value of $550,000. At no time shall the
Company issue to Advisor shares equaling, when added to the number of shares, if
any, presently owned by Advisor, shares in excess of 9.99% of the number of
shares of outstanding common stock of the Company as of the date of issuance.
Shares issued pursuant to this agreement are to be liquidated and the gross
proceeds applied towards the satisfaction of the $550,000 Advisory Fee.
Thereafter, from time to time, and after the liquidation of the shares issued
upon the signing of this agreement, the Company shall issue such additional
shares as may be necessary to assure the payment to Advisor of the $550,000 owed
to Advisor for services which have actually been rendered by Advisor, as set
forth herein. At no time shall the Company issue to Advisor shares which would
cause the number of shares owned legally or beneficially by Advisor, to equal
ten percent (10%) of the issued and outstanding shares of the Company.
Any demand for additional shares to be issued to allow payment of the total
of $550,000 to advisor shall contain an accounting showing the amount received
by Advisor from all sales of Shares delivered to Advisor under the terms of this
Agreement together with a statement showing the total number of Shares received
under this Agreement, the number of said Shares which have been sold, and the
remaining amount owed to Advisor. The Company shall have five (5) business days
following actual receipt of said accounting to deliver a sufficient number of
additional shares, subject to the 10% limitation, to pay any remaining balance.
All Shares delivered to the Advisor under the terms of this agreement shall have
been registered pursuant to an effective registration statement filed by the
Company with the U.S. Securities and Exchange Commission prior to issuance.
At no time shall the Advisor have the right to receive, or the Company be
required to deliver shares to Advisor which would result in the Advisor having,
at any time, legal and/or beneficial ownership of the Company's shares equaling
in excess of 9.99% of the issued and outstanding shares of the Company. Shares
delivered to Advisor upon the submission of any invoice shall be deemed to be
fully paid for at the time of submission of the invoice.
In the event the shares delivered to and sold by Advisor pursuant to the
terms of this Agreement fail to gross a total of $550,000 or the total amount
invoiced to the Company for services actually rendered during the term of this
agreement, whichever is less, the Company, as set forth herein, shall within
five (5) business days of notice of this event, and subject to demand under the
terms of this agreement, issue a sufficient number of additional registered
shares in order to deliver to the Advisor any remaining earned balance of the
$550,000.
Advisor hereby expressly agrees that upon his receipt of the $550,000
Advisory Fee contemplated by this Agreement, Advisor shall immediately return to
the Company any shares remaining in Advisor's possession. Advisor shall not
knowingly sell Shares in excess of the number needed to allow his gross recovery
of monies from the sale of Shares to exceed $550,000. Upon the termination of
this Agreement, Advisor shall immediately return to the Company any shares in
excess of those necessary to pay to Advisor the amount due under the terms of
this Agreement. This will include all revenues received from sale of stock by
Advisor since December 4, 2002.
Upon any issuance of stock pursuant to this Agreement, Advisor shall pay
the cost of any revised shareholders' lists as may be necessitated or required
as a result of said issuance. Also, Advisor shall pay all costs related to the
preparation and filing of any S-8 Registration Statement necessary to allow
shares to
be issued under this agreement, together with any transfer agent fees or other
fees as may be necessitated by said issuance. Advisor shall be responsible for
the legal fees of Xxxxxx X. Xxxxx related to the drafting and execution of this
Agreement.
All shares transferred to Advisor pursuant to the provisions of this
Agreement are fully earned and non-assessable as of the date of delivery.
MISCELLANEOUS PROVISIONS
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A. Gender. Wherever the context shall require, all words herein in the
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masculine gender shall be deemed to include the feminine or neuter
gender, all singular words shall include the plural, and all plural
shall include the singular.
B. Severability. If any provision hereof is deemed unenforceable by a
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court of competent jurisdiction, the remainder of this Agreement, and
the application of such provision in other circumstances shall not be
affected thereby.
C. Further Cooperation. From and after the date of this Agreement, each
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of the parties hereto agrees to execute whatever additional
documentation or instruments as are necessary to carry out the intent
and purposes of this Agreement or to comply with any law.
D. Waiver. No waiver of any provision of this Agreement shall be valid
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unless in writing and signed by the waiving party. The failure of any
party at any time to insist upon strict performance of any condition,
promise, agreement or understanding set forth herein, shall not be
construed as a waiver or relinquishment of any other condition,
promise, agreement or understanding set forth herein or of the right
to insist upon strict performance of such waived condition, promise,
agreement or understanding at any other time.
E. Expenses. Except as otherwise provided herein, each party hereto
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shall bear all expenses incurred by each such party in connection with
this Agreement and in the consummation of the transactions
contemplated hereby and in preparation thereof.
F. Amendment. This Agreement may only be amended or modified at any
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time, and from time to time, in writing, executed by the parties
hereto.
G. Notices. Any notice, communication, request, reply or advice
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(hereinafter severally and collectively called "Notice") in this
Agreement provided or permitted to be given, shall be made or be
served by delivering same by overnight mail or by delivering the same
by a hand-delivery service, such Notice shall be deemed given when so
delivered. For all purposes of Notice, the addresses of the parties
set out below their signatures herein shall be their addresses unless
later advised in writing.
H. Captions. Captions herein are for the convenience of the parties and
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shall not affect the interpretation of this Agreement.
I. Counterpart Execution. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument and this
Agreement may be executed by fax.
J. Assignment. This Agreement is not assignable without the written
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consent of the parties.
K. Parties in Interest. Provisions of this Agreement shall be binding
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upon and inure to the benefit of and be enforceable by the parties,
their heirs, executors, administrators, other permitted successors and
assigns, if any. Nothing contained in this Agreement, whether express
or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any persons other than the parties to it
and their respective successors and assigns, not is anything in this
Agreement intended to relieve or discharge the obligation or liability
of any third persons to any party to this Agreement, not shall any
provision give any third persons any right of subrogation over, or
action against, any party to this Agreement.
L. Entire Agreement. This Agreement constitutes the entire agreement and
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understanding of the parties on the subject matter hereof and
supercedes all prior agreements and understandings on the subject
thereof. All prior agreements between the Parties or any of them,
whether written or oral, are superceded by this agreement and any and
all rights, duties and/or obligations existing by virtue of any
previous agreement, written or oral, between the parties or any of
them are merged herein.
M. Construction. The parties hereto agree to cooperate with one another
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in respect of this Agreement, including reviewing and executing any
document necessary for the performance of this Agreement, to comply
with law or as reasonably requested by any party hereto, or legal
counsel to any party hereto.
N. Cooperation. The parties hereto agree to cooperate with one another
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in respect of this Agreement, including reviewing and executing any
document necessary for the performance of this Agreement, to comply
with law or as reasonably requested by any party hereto, or legal
counsel to any party hereto.
O. Choice of Law/Venue. The law of the State of Illinois shall apply to
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this Agreement without reference to conflict of law principles, and
the sole venue for any dispute or suit between the parties shall be a
court of competent jurisdiction in the location of the ADVISOR in
Illinois.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
above written.
GATEWAY DISTRIBUTORS, LTD., A NEVADA CORPORATION
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By: ______________________________
President
SUBURBAN CAPITAL CORPORATION, A DELAWARE CORPORATION
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By: ______________________________
President
