AGREEMENT
Dated as of September 1, 2006
Among
LE' ELEGANT BATH, INC. - DBA, AMERICAN BATH FACTORY
AND GATEWAY DISTRIBUTORS LTD
AGREEMENT
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THIS Agreement ("Agreement"), dated as of September 1, 2006 is by and among
Le' Elegant Bath, Inc. - DBA, AMERICAN BATH FACTORY, a California Corporation,
00000 Xxxxxxx Xxxxxx, Xxxxxx Xxxxxxxxxx 00000 ("ABF"), and GATEWAY DISTRIBUTORS
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LTD, 0000 Xxxx Xxxxxxxx Xxxx, Xxxxx Xxx Xxxxx 00000, a Nevada Corporation (the
"Company").
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RECITALS
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A. The parties hereto wish to provide for the terms and conditions upon
which the ABF will acquire its Products, Services, Marketing, Technology
services and day to day consulting needs to be determined from the Company's
wholly owned subsidiary Xxxxxxxx Corporate Administration.
C. The parties hereto wish to make certain representations, warranties,
covenants and agreements in connection with the purchase of these services and
assumption of liabilities and also to prescribe various conditions to such
transaction.
AGREEMENT
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Accordingly, and in consideration of the representations, warranties,
covenants, agreements and conditions herein contained, the parties hereto agree
as follows:
ARTICLE 1PURCHASE OF
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SERVICES
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1.1 Services to be purchased. Upon satisfaction of all conditions to the
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obligations of the parties contained herein (other than such conditions as shall
have been waived in accordance with the terms hereof), the ABF shall purchase
from the Company, at the Closing (as hereinafter defined) Products, Services,
Marketing and Technology needed:
(i)the right to use the names and all variations thereof related to the sale of
the products, displays and material, marketing literature and programs,
personnel, facilities, and equipment.
1.2 Assumptions of Liabilities. Upon satisfaction of all conditions to the
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obligations of the parties contained herein (other than such conditions as shall
have been waived in accordance with the terms hereof), shall assume liabilities
and obligations regarding product quality and replacements. The ABF is not
assuming, and will not be obligated or liable for, any liability of the Company
as it relates to the services provided. The Company will not assume and will not
be obligated for any product related issues. All products related issues will be
the responsibility of the ABF. All information in the marketing material and
corresponded will be the liability of the ABF. The Company will serve as the
distribution center for the marketing material.
1.3 Purchase Price. The ABF shall pay for services on an agreed to price on
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each request for services. The ABF and the Company will determine the price and
a purchase order will be submitted for services. (the "Purchase Price"): An
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initial order for
services will be $851,425 which will be marketing and fulfillment services
utilized in the development of collateral material.
1.3.1 Payment. ABF will make payment per agreement and normal terms on the
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$851,425 dollar order as indicated in 1.3 above. The Company will invoice for
future services rendered on a regular basis and payments will be due within ten
days of such invoice.
ARTICLE 2 ABF
COMPENSATION
2.1 Xxxxxxx X. Xxxxxxx will serve as President/CEO of Xxxxxxxx Corporate
Administration and have veto rights on any decisions made on expenses,
purchases and assets.
2.2 Xxxxxxxx Corporate Administration will be a wholly owned subsidiary of
Xxxxxxxx Distributing
2.3 Twenty Five percent of all monies raised through a stock offering in the
parent company, Gateway Distributors will be put into Xxxxxxxx Corporate
Administration until such time it spins off on its own.
2.4 Xxxxxxx X. Xxxxxxx will have the right to request the Company to spin off
Xxxxxxxx Corporate Administration from the parent and become a public held
company on its own anytime after it meets SEC eligibility requirements.
2.5 When the spin off occurs Xxxxxxx X. Xxxxxxx will own 60% of the spin off
company stock and Gateway will own 40%.
2.6 Gateway will maintain 60% of Gateway and Xxxxxxx X. Xxxxxxx will have 40%
of Gateway stock held by the Company.
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF
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COMPANY
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The Company hereby represents and warrant to the ABF as of the date hereof
as follows:
2.1 Corporate Organization. The Company is a Nevada corporation duly organized,
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validly existing and in good standing under the laws of the state of Nevada, has
full corporate power and authority to carry on its business as it is now being
conducted and to own, lease and operate its properties and assets, is duly
qualified or licensed to do business as a foreign corporation in good standing
in every other jurisdiction in which the character or location of the properties
and assets owned, leased or operated by it or the conduct of its business
requires such qualification or licensing, except in such jurisdictions in which
the failure to be so qualified or licensed and in good standing
would not, individually or in the aggregate, have a Material Adverse Effect (as
hereinafter defined) on the Company. The Company has heretofore delivered to the
ABF complete and correct copies of its articles or certificate of organization
and bylaws, as presently in effect. The Company is qualified and licensed to do
business.
2.2 Intellectual Property Rights. Xxxxxxxx Corporate Administration owns the
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industrial and intellectual property rights, including without limitation the
patents, patent applications, patent rights, trademarks, trademark applications,
trade names, service marks, service xxxx applications, copyrights, computer
programs and other computer software, inventions, know-how, trade secrets,
technology, proprietary processes and formulae (collectively, "Intellectual
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Property Rights")
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2.5 Tax Matters.
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(a) Tax Returns. The Company has duly and timely filed all tax
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and information reports, returns and related documents required to be
filed by it with respect to the income-type, sales/use-type and
employment-related taxes of the United States and the states and other
jurisdictions. (b) Cooperation on TaxMatters.
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ARTICLE 3 REPRESENTATIONS AND
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WARRANTIES OF ABF
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The ABF, jointly and severally, represents and warrants to the Company as
of the date hereof as follows:
3.1. Corporate Organization. The ABF is a corporation duly organized,
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validly existing and in good standing under the laws of the State of California.
The ABF is qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the nature of the activities conducted by
it or the character of the property owned, leased or operated by it make such
qualification necessary or appropriate, except for those jurisdictions where the
failure to be so qualified has not and could not reasonably be expected to have
a Material Adverse Effect on the ability of the ABF to fulfill its obligations
under this Agreement.
3.2. Authorization. The ABF has full corporate power and authority to enter
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into this Agreement and the ABF Delivered Documents and to carry out the
transactions contemplated herein and therein. The Boards of Directors of the ABF
have taken all action required by law, their respective articles of
incorporation and bylaws or otherwise to authorize the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein. This Agreement is the valid and binding legal obligation of
the ABF enforceable against it in accordance with its terms.
ARTICLE 4
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4.1 Confidentiality. Each of the parties hereto agrees that it will not use, or
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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 include any information relating to
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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.
4.2 Public Announcements. None of the parties hereto shall make any public
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announcement with respect to the transactions contemplated herein without the
prior written consent of the other parties, which consent shall not be
unreasonably withheld or delayed; provided, however, that any of the parties
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hereto may at any time make any announcements which are deemed by its counsel to
be required by applicable Law so long as the party so required to make an
announcement promptly upon learning of such requirement notifies the other
parties of such requirement and discusses with the other parties in good faith
the exact proposed wording of any such announcement.
ARTICLE 5TERMINATION AND
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ABANDONMENT
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5.1 Methods of Termination. This Agreement may be terminated
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and the transactions contemplated herein may be abandoned at any time
notwithstanding approval thereof by the Company, but not later than the Closing:
5.2 Governing Law. This Agreement and the legal relations among the
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parties 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.
5.3 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
Gateway Distributors Ltd
By: Date:
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Xxxx Xxxxxx
President
"COMPANY"
Le' Elegant Bath, Inc. - DBA, American Bath Factory
By: Date:
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Xxxxxxx X. Xxxxxxx
President
