AGREEMENT
Dated as of May 20, 2004
Among
QUALITY DISTRIBUTION SERVICES, INC.
And
GATEWAY DISTRIBUTORS LTD
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THIS AGREEMENT ("Agreement"), dated as of May 20, 2004 , is by and among Gateway
Distributors Ltd, a Nevada Corporation ("GWDL") and Quality Distribution
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Services, Inc. a Nevada corporation ("QDS")
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RECITALS
A. ORGANIZATION will form a new corporation, (name to be determined) that
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will be a majority owned subsidiary of Gateway Distributors Ltd. "GWDL" will own
51% of the shares of the new company and "QDS" will own 49%.
B. PHOENIX The parties agree that the first order of business will be to
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start up a "QDS" operation in Phoenix.
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C. FUNDING "GWDL" will fund the project up to one million dollars.
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D. OPERATIONS "QDS" will set up the operation and run the day to day
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business to include all accounting functions for the local operations, trucking,
sales, etc.
E. INITIAL BUDGET Startup is $250,000 to include approximately $172,000 in
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inventory costs. Funds will be made available by "GWDL" upon signing of the
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agreement. Additional funding will be available by board request. All additional
funding will be a loan and put on the payables owed to "GWDL" over a five year
term at 7% interest.
F. OFFICERS Xxxxx Xxxxx will serve as President/CEO, and Xxxxx Xxxx will be
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responsible for operations.
G. BOARD OF DIRECTORS The board of directors will consist of the following
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persons. Xxxxx Xxxxx, Xxxxx Xxxx, Xxxxxx X. Xxxxxxx, Xxxx Xxxxxx, and Xxx
Xxxxxx.
H. ARTICLES OF INCORPORATIONS AND BYLAWS These items will be drafted and
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filed upon signing of the agreement.
AGREEMENT
Accordingly, and in consideration of the representations, warranties,
covenants, agreements and conditions herein contained, the parties hereto agree
as follows:
A. OWNERSHIP. "GWDL" 51% . "QDS" 49%
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B. STOCK ISSUANCE. "QDS" and GWDL will identify their preference of
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their stock distribution and certificates will be issued to the parties
accordingly. In the event no disbursement is requested the stock will
remain in the company's procession until requested.
C. SIGNING. Unless this Agreement shall have been terminated and the
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transactions contemplated herein shall have been abandoned, a signing will
be held on May 20, 2004 (the "Closing, Date"), provided, however, that if
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any of the conditions provided have not have been satisfied or waived by
such date, then the party to this Agreement which is unable to satisfy such
condition or
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conditions, despite the best efforts of such party, shall be entitled to
postpone the Closing by notice to the other parties until such condition or
conditions shall have been satisfied (which such notifying party will seek
to cause to happen at the earliest practicable date) or waived, but in no
event shall the Closing occur later than the May 31, 2004.
D. CORPORATE ORGANIZATION. "GWDL" is validly existing and in good standing
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under the laws of the state of Nevada.
E. AUTHORIZATION. "QDS" has full corporate power and authority to enter
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into this Agreement and the. "QDS" Delivered Documents and to carry out the
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transactions contemplated herein and therein.
F. INTELLECTUAL PROPERTY RIGHTS. "QDS" has the right to all necessary
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information regarding "QDS" operations to assist in the Phoenix startup. To
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the knowledge of the "QDS" the use of all Intellectual Property Rights necessary
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or required for the conduct of the businesses of the "QDS" as presently
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conducted and as proposed to be conducted does not and, to the knowledge of the
"QDS", will not infringe or violate or allegedly infringe or violate the
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intellectual property rights of any person or entity.
G. CONFIDENTIALITY. Each of the parties hereto agrees that it will not use,
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or permit the use of, any of the information relating to any other party hereto
furnished to it in connection with the transactions contemplated herein
("Information") in a manner or for a purpose detrimental to such other party or
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otherwise than in connection with the transaction, and that they will not
disclose, divulge, provide or make accessible, or permit the Disclosure of
(collectively, "Disclose" or "Disclosure" as the case may be), any of the
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Information to any person or entity, other than their responsible directors,
officers, employees, investment advisors, accountants, counsel and other
authorized representatives and agents, except as may be required by judicial or
administrative process or, in the opinion of such party's regular counsel, by
other requirements of Law; provided, however, that prior to any Disclosure of
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any Information permitted hereunder, the disclosing party shall first obtain the
recipients' undertaking to comply with the provisions of this subsection with
respect to such information. The term "Information" as used herein shall not
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include any information relating to a party which the party disclosing such
information can show: (i) to have been in its possession prior to its receipt
from another party hereto; (ii) to be now or to later become generally available
to the public through no fault of the disclosing party; (iii) to have been
available to the public at the time of its receipt by the disclosing party; (iv)
to have been received separately by the disclosing party in an unrestricted
manner from a person entitled to disclose such information; or (v) to have been
developed independently by the disclosing party without regard to any
information received in connection with this transaction. Each party hereto also
agrees to promptly return to the party from who originally received all original
and duplicate copies of written materials containing Information should the
transactions contemplated herein not occur. A party hereto shall be deemed to
have satisfied its obligations to hold the Information confidential if it
exercises the same care as it takes with respect to its own similar information.
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H. GOVERNING LAW. This Agreement and the legal relations among the parties
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hereto shall be governed by and construed in accordance with the internal
substantive laws of the State of Nevada (without regard to the laws of conflict
that might otherwise apply) as to all matters, including without limitation
matters of validity, construction, effect, performance and remedies.
I. ARBITRATION. Any controversy or claim arising out of or relating to this
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Agreement, or the making, performance or interpretation thereof, including
without limitation alleged fraudulent inducement thereof, shall be settled by
binding arbitration in Las Vegas, Nevada by a panel of three arbitrators in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. Judgment upon any arbitration award may be entered in any court
having jurisdiction thereof and the parties consent to the jurisdiction of the
courts of the State, of Nevada for this purpose.
J. DEFAULT. If there is a breach of the contract between, "GWDL" and
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"QDS" that results in litigation, the prevailing party shall be entitled to
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attorney's fees and costs in the arbitration process.
14. "GWDL" has the right to inspect and photo copy all accounting functions to
verify the revenues of the company.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written. This agreement will
supercede all previous agreements both written and verbal.
"GWDL" "QDS"
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By By
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Xxxx Xxxxxx Xxxxx Xxxxx
President / CEO President / CEO
Date Date
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