("Discloser") Francois Vautour and Chelsea Collection, Inc. and INTERNATIONAL VITAMIN COMPANY,
LLC ("Recipient") agree that the following terms and conditions apply to confidential information ("Information")
given to the Recipient under this Agreement. Both parties agree that the mutual objective under this Agreement is
to provide appropriate protection for Information while maintaining the ability to conduct business activities.
Information shall be defined as: (a) Discloser's product formulas for each of its products as determined by
Discloser Francois Vautour (and approved by Recipient) from time to time; and (b) marketing, sales and financial
documents or information which relates to Disclosure and its products; (c) any other documentation or
information which by prior written notice Discloser informs recipient that such matters are "confidential
information". All of the forgoing is subject to the exceptions hereinafter set forth. Any and all information and/or
documents related to the formula are per se confidential.
Information that is disclosed which relates to the evaluation of a business opportunity will be disclosed in writing
and indicated as confidential information. The Discloser as it relates to the formula will be Francois Vautour
exclusively. Unless written notice is given by Francois Vautour no-one other than the employees involved can
have information related to the formula.
a. Liquidated Damages regarding breach of the formula will apply to Francois Vautour and to Chelsea Collection,
Inc. as it relates to the loss of revenues for the breach.
2. OBLIGATION OF CONFIDENTIALLITY
Recipient may use the information solely for the purposes of the agreement. Recipient may disclose information to
(a) its employees, professional consultants as may be necessary or expedient to perform the duties of Recipient;
and (b) any other parties with Disclosure's prior written consent; and (c) if requested by any judicial government
or regulatory authority to disclose information. The Recipient will be responsible for any dissemination of the
confidential materials by anyone they disclose it to including employees. This agreement will be for a two year
period and be self renewing for same length of time unless either party terminates the agreement in writing.
3. CONFIDENTIALLITY PERIOD
Disclosed information continues to be subject to this Agreement during the term of this Agreement and ongoing
after the last transaction between parties from the date this Agreement. In the event this Agreement is terminated
all information related to the products must be returned to the Company and Francois Vautour.
No obligation of confidentiality applies to any Information that Recipient:
a) already possesses without obligation of confidentiality
b) develops independently; or
c) rightfully receives without obligations of confidentiality from a third party
d) any data or information generally known to the public and/or industry
It is acknowledged by the parties that Discloser uses many if not all of the same ingredients currently
manufactured by Recipient for its own products and for products it manufactures for others, however in different
proportions and/or appearance. Nothing herein shall prevent Recipient from making products having similar
ingredients as Discloser's products, however not having the same proportions of such ingredients as designed as
Discloser's products unless such proportions are already being manufactured by Recipient or its other customers.
Neither this Agreement nor any disclosure information grants recipient any license under any patents, copyrights,
or other intellectual property rights established by Discloser.
5. REPRESENTATIONS AND WARRANTIES
Discloser hereby represents and warrants that any Information disclosed to Recipient as being solely owned and
confidential to Disclosure is not the property of any other party for which Discloser is obligated to keep
confidential from the Recipient from the sale of Discloser's products in breach of the abovementioned
representations and warranties and the duties and obligations of Disclosure to any other party, including the
payment of any royalties, if any, that Discloser may owe any other party regarding the sale of such products.
Either party may terminate this Agreement by providing the proper notice to the other party. Upon notice of a
request for termination, the Recipient shall (i) cease using the Information, (ii) return the Information and all
copies, notes or extracts thereof to the Discloser within seven (7) days of demand or alternatively, certify that all
information has been destroyed, and (iii) upon request of the Discloser, certify in writing that the Recipient has
complied with the obligations set forth in this paragraph.
All notices and demands hereunder shall be in writing and shall be served by personal service or by mail at the
address of the Recipient. All notices or demands by mail shall be certified or registered mail, return receipt
requested, or by nationally recognized private express courier, and shall be deemed complete upon receipt.
Except as otherwise set forth here in this Agreement, the Recipient hereby agrees not to solicit the clients of
Discloser which have been disclosed to Recipient as confidential information and are not already also the
customers of Recipient as herein set forth without written consent of Discloser. Furthermore, the Recipient agrees
to advise its employees to better assure that said employees do not utilize the confidential information in
contacting Discloser's clients. In the event of breach of this paragraph, it is understood that Discloser shall have
such rights and remedies as elsewhere set forth in this Agreement.
9. GENERAL PROVISIONS
a) This Agreement does not require either party to disclose or receive information.
b) Neither party may assign its rights or delegates its duties or obligations under this Agreement without prior
written consent. Any attempt to do so is void.
c) This Agreement shall be in all respects, governed by and construed and enforced in accordance with the laws
of the State of Nevada, including all matters of construction, validity and performance. Any action to enforce or
interpret the terms of this Agreement shall be instituted and maintained in a court of competent jurisdiction in
Clark County, Nevada. The parties respectfully hereby consent to jurisdiction of such court and waive any
obligations to such jurisdiction. In any action or proceeding arising out of this Agreement, the party prevailing in
such action shall be entitled to recover its reasonable attorney's fees and costs awarded by said court of
d) Either party may terminate this agreement by providing written notice to the other. Any provisions of this
Agreement which by their nature extend beyond its termination will remain in effect beyond such termination until
fulfilled and will apply to either party's successors or assigns. Upon Discloser's written request, Recipient, at is
option, will return or destroy all information, including copies.
e) Except as modified by written agreement signed by Parties, the terms and conditions of this Agreement remain
in full force and effect.
f) No representations or statements of any kind made by either party that are not expressly stated herein shall be
binding on such party. The parties agree that there are no third party beneficiaries to this Agreement.
g) No supplement, modification, or amendment of this Agreement shall be binding, unless executed in writing by a
duly authorized representative of each party to this Agreement except where indicated otherwise.
h) This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but
which together shall constitute one and the same document.
i) It is agreed and acknowledged by the signatories that it shall be binding on the parties hereto, their assigns,
clients, employees, representatives, agents, heirs, and successor(s), that their signatures on facsimile transmissions
will have the same force and effect as originals.
j) Neither party shall have any obligation by virtue of this Agreement to procure any goods or services from the
other party, nor to enter into any further agreements with the other party. However, this paragraph shall not apply
once subsequent agreements are entered into between the parties to procure goods or services from the other
Name: Francois Vautour
Title: _________________, Chelsea Collection, Inc.
NATIONAL VITAMIN COMPANY, LLC ("RECIPIENT")
Name: Earl Courtney, Sr.
Title: General Manager
Dated as of May 20, 2004
QUALITY DISTRIBUTION SERVICES, INC.
GATEWAY DISTRIBUTORS LTD
THIS AGREEMENT ("Agreement"), dated as of May 20, 2004 , is by and among Gateway Distributors Ltd, a
Nevada Corporation ("GWDL") and Quality Distribution
Services, Inc. a Nevada corporation ("QDS")
A. ORGANIZATION will form a new corporation, (name to be determined) that 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 start up a "QDS" operation in Phoenix.
C. FUNDING "GWDL" will fund the project up to one million dollars.
D. OPERATIONS "QDS" will set up the operation and run the day to day 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 inventory costs. Funds will be
made available by "GWDL" upon signing of the 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%
F. OFFICERS Wayne Stamm will serve as President/CEO, and Steve Fife will be responsible for operations.
G. BOARD OF DIRECTORS The board of directors will consist of the following persons. Wayne Stamm,
Steve Fife, Robert F. Sommers, Rick Bailey, and Flo Ternes.
H. ARTICLES OF INCORPORATIONS AND BYLAWS These items will be drafted and filed upon signing
of the 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%
B. STOCK ISSUANCE. "QDS" and GWDL will identify their preference of 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 transactions contemplated herein shall
have been abandoned, a signing will be held on May 20, 2004 (the "Closing, Date"), provided, however, that if
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
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,
D. CORPORATE ORGANIZATION. "GWDL" is validly existing and in good standing under the laws of the
state of Nevada.
E. AUTHORIZATION. "QDS" has full corporate power and authority to enter into this Agreement and the.
"QDS" Delivered Documents and to carry out the transactions contemplated herein and therein.
F. INTELLECTUAL PROPERTY RIGHTS. "QDS" has the right to all necessary information regarding "QDS"
operations to assist in the Phoenix startup. To the knowledge of the "QDS" the use of all Intellectual Property
Rights necessary or required for the conduct of the businesses of the "QDS" as presently 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 intellectual property rights of any person or entity.
G. CONFIDENTIALITY. Each of the parties hereto agrees that it will not use, 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 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 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 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 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.
H. GOVERNING LAW. This Agreement and the legal relations among the 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.
I. ARBITRATION. Any controversy or claim arising out of or relating to this 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
"QDS" that results in litigation, the prevailing party shall be entitled to
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
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.
Rick Bailey Wayne Stamm
President / CEO President / CEO
Page 1 of 2
This will confirm the arrangements, terms and conditions under which Steven Frye (hereinafter referred to as the
"Consultant") has and will render services to GATEWAY DISTRIBUTORS LTD, (hereinafter referred to as the
1. CONSULTING SERVICES. During the term of this Agreement, the consultant will, at the Company's
request, assist the Company in developing, studying and evaluating merger and acquisition or investment
proposals relating to the Company, prepare reports and studies thereon when deemed advisable, and assist in
negotiations and discussions pertaining thereto.
2. TERM. Consultant's engagement will commence on the date of execution of this Agreement (the "Effective
Date") and continue for a period of two (2) months; provided, however, that the term may be extended by mutual
agreement of the parties and this Agreement may be terminated at any time and for any reason, with or without
cause, by either party upon thirty (30) days written notice to the other.
COMPENSATION. In consideration of the services to be rendered and performed by Consultant during the
Consulting Period, the Company will deliver to Consultant Nine Hundred Thousand (900,000) shares of GAWD
common stock delivered on or before December 31, 2004.
Such compensation is non-revocable and non-conditional except as otherwise specified herein.
3. TRANSACTION FEES. The company is not engaging Consultant to introduce the Company to a source for
a financing. In the event that, with the consent of the Company and pursuant to a separate agreement, Consultant
introduces to the Company a party which consummates an Applicable Financing, as hereinafter defined, the
Company will pay upon the closing of the Applicable Financing, but not greater than the fee that would be
derived by applying a Lehman formula (five percent
(5%) of the first million dollars of part thereof, four percent (4%) of the next million dollars of part thereof, three
percent (3%) of the next million dollars of part thereof, two percent (2%) of the next million dollars of part
thereof, and one percent (1%) of the amount by which the gross proceeds from the Applicable Financing exceed
four million dollars) to the total amount of the applicable financing, or
(b) such separate and additional fee as may be mutually agreed upon by the Company and Consultant not to
exceed the fee rendered to in clause
(a) of this Section 4. Any fee shall be based solely on the proceeds received by the Company. An Applicable
Financing shall mean a private placement of debt or equity securities with parties introduced to the Company
Consultant other than (i) a financing with a bank or institutional or commercial lender, (ii) a secured financing,
including capital lease financing, (iii) a revolving credit or similar financing, or (iv) a financing in connection
Page 2 of 2
with an acquisition.
4. ACCESS. TO/AND USE OF INFORMATION. The Company will work together with Consultant to
provide any and all necessary documents and full access to the Company's officers, directors, employees and
accountants as are reasonable requested by Consultant in order for it to provide the Services.
5. RELATIONSHIP. Nothing herein shall constitute the Consultant as employee or agent of the Company
except or such an extent as might hereafter be agreed upon for a particular purpose. Except as expressly agreed,
the consultant shall not have the authority to obligate or commit the Company in any manner whatsoever.
6. ASSIGNMENT. This Agreement shall not be assignable by either party.
Agreed and Accepted by:
Agreed and Accepted by:
The agreement is made and entered into this 2nd day of August 2004, by and between:
Bill Woo and Gateway Venture Holdings, Inc., a Nevada corporation ("Gateway").
WHEREAS, the purpose of this Agreement is to lay down the terms and conditions, and guidelines which will
allow the respect and protection of each Party's respective proprietary interests.
NOW THEREFORE, in considering of the various representations, mutual promises, covenants, and
undertakings contemplated herein and for good valuable consideration, the value of which is acknowledged by
the Parties by execution hereof, the Parties agree as follows:
1. None of the parties shall divulge to any person, (other than those whose provenance it is to know it, or with
proper authority) or use any trade secrets or confidential information or any financial or trade information relating
to the other, which they acquire as a result of the discussing of or the entering into agreements with each other.
Each Party shall endeavor to prevent its officers, employees, agents, representatives, and associates from doing
anything, which, if done by Party, would be a breach of this agreement. This restriction shall continue to apply
after the expiration of this Agreement, and other Agreements entered into between the Parties, without limit in
point of time, but shall cease to apply to secrets or information, which came into the public domain through no
fault of the Party concerned.
2. The Parties each undertake to the other that for a period of five
(5) years from the date of this Agreement, they will not, without prior written consent of the other, directly or
indirectly through third parties, make or seek to make contact or communication with those Banks, Financial
Institutions, government representatives, clients, investors, traders, associates, legal advisors and financial
advisors with whom they have been placed into contact with by the other or to whom the names, addresses and
other pertinent information has been released to them by the other.
3. Each party undertakes irrevocably and unconditionally:
a. To ensure that all aspects of each transaction remain confidential.
b. Not to disclose, either verbally or in written form, any knowledge that it may obtain at any time in the future, be
it either implicit or
implied, with respect to the implementation of any proposed transaction.
c. Not to circumvent or attempt to circumvent the other.
d. Not to disclose to third parties the names, addresses, fax and telephone coordinates of any contact/client
revealed by one party to the other.
e. Not to enter into direct or indirect negotiations with any other's contacts/clients.
f. Not to show, deliver, or cause to be seen, any documents, papers, correspondence, memoranda or copies of
such to other than person(s) or entities of any kind, except to those whom are required to maintain confidentiality
such as an attorney or tax advisor.
g. Each Party shall endeavor to ensure that any of its officers, employees, agents, representatives or associates
who, by virtue of their duties may receive the type of information described in this Agreement, are fully obligated
to respect the spirit and terms of this Agreements in the same way as each Party. Each Party shall undertakes to
have those officers, employees, agents, representatives or associates acknowledge their obligation by
Countersigning a copy of this Agreement, thereby binding them to honor the terms of this Agreement.
4. Each Party acknowledges that any breach of the terms and conditions of this Agreement by either party or its
employees, agents, representatives or associates may render the seeking of liquidated damages, by the other and
the cancellation and termination of all agreements and transactions.
5. This Agreement has been entered into by each Party acting on its own free will and judgment and shall be
binding on the Parties, their heirs or successors, administrators, and assignees.
6. Any dispute or controversy arising out of or relating to any interpretation, construction, performance, or breach
of this Agreement shall be resolved exclusively by binding arbitration in Las Vegas, Nevada, in accordance with
the rules then in effect of the American Arbitration Association, The arbitrator(s) may grant injunctions or other
relief in such dispute or controversy. The decision of the arbitrator(s) shall be final, conclusive, and binding on the
parties to the arbitration. Judgment may be entered on the arbitrator's decision in any court having jurisdiction.
The parties to the arbitration shall each pay an equal share of the costs and expenses of such
arbitration, and each of them shall separately pay their counsel fees and expenses.
7. The release of confidential information pursuant to a protested court order shall not be deemed to be a
violation of this Agreement.
8. This Agreement may be executed in one or more counterparts each of which shall be binding on each party by
whom or on whose behalf it is so executed, but which together shall constitute a single instrument. For the
avoidance of doubt, this Agreement shall not be binding on any party hereto unless and until it shall have been
executed by or on behalf of all persons expressed to be party hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
GATEWAY VENTURE HOLDINGS, INC.
Its: Chief Operations Officer
This agreement is made this 10th day of January 2005 between The Right Solutions Gateway at 3220 Pepper
Lane, Las Vegas, Nevada 89120, hereinafter referred to as RSG. Phone number (702) 317-2400
Jack M. Zufelt at 3228 East Phillips Drive, Centennial, Colorado 80122, hereinafter referred to as Zufelt. Phone
number (303) 741-9025.
RSG agrees to retain Zufelt, and Zufelt has agreed to provide certain consulting services on the terms and
conditions set out below.
RESPONSIBILITIES OF ZUFELT:
Zufelt will be responsible for the training of existing as well as future distributors of TRS via all modalities available
to him. Zufelt shall put forth, on a "best efforts" basis, regular and ongoing marketing for the express purpose of
recruiting distributors. Zufelt will also provide consulting services at the request of RSG regarding any issues
related to the business and/or the industry.
1. Zufelt will consult with RSG on all aspects of their business as well as create and implement important
strategies regarding all aspects of what it takes to cause prospecting and recruiting. Zufelt will:
- Sell and train our existing distributors on using the system created and coordinate training conference calls for
- Work one on one with key distributors.
- Become a designated distributor to recruit new members
- Zufelt will report direct to the President and COO
RESPONSIBILITIES OF RSG
1. In exchange for Zufelt's services listed above, RSG shall pay Zufelt a guaranteed minimum amount of five
thousand dollars ($5,000.00) per month through January 2005 in perpetuity except as defined below in
paragraph 1.1a. This monthly fee will increase to $10,000 in February 2005 and will be paid on February 20,
2005, then in the month of March 2005 it will increase to $12,000 payable on March 20, 2005; the fee will then
increase to $15,000.00 per month in April, 2005 and be paid on the 20th of each month thereafter in perpetuity.
These payments shall come from the combination of two sources;
A) A new position that is created above all past, present and future distributors. All income that this newly
created position generates shall be paid to Zufelt in perpetuity but Zufelt shall not have ownership of that position
except as covered in paragraph 1b below.
B) In the event said position does not earn enough income in any given month to meet the minimum of fifteen
thousand dollar guarantee, RSG shall make up the difference each month. This
newly formed position will be flagged and qualified for commission payments each month by the Company. Zufelt
shall not be required to meet any minimum monthly qualifications to get paid this income except as described in
paragraph 1a below. All income earned by this position shall be paid to Zufelt as a consulting fee by the 20th of
each month. These payments will begin with the January 2004 commission checks for the month of December
and will be ongoing monthly thereafter in perpetuity.
1.1a. In the event Zufelt shall no longer be able, or no longer wishes, to perform the services as outlined above he
will still be paid the income from that position in perpetuity however the company shall no longer be obligated to
pay the difference between what the position earns and $5,000.00 In addition should either of the above
mentioned events happen Zufelt shall, in the month following said event, be required to start paying the standard
minimum amount each month required by the company to qualify to be paid the income earned from said position
as long as said income is equal to, or greater than, the one hundred dollar minimum qualification. Said amount for
minimum qualification shall not exceed one hundred dollars.
1.1b. Zufelt shall be provided monthly statements showing the income of the newly created position. At his
option, Zufelt may choose to have said position put in his name or the name of an assignee at any time.
2. RSG shall also issue to Zufelt five million preferred shares of stock class B prior to February 20, 2005. Once
RSG monthly revenues reaches the following levels, additional preferred stock shall be issued to Zufelt in the
Gross Monthly Revenues Shares to Zufelt
$ 250,000 100,000
$ 400,000 200,000
$ 1,000,000 500,000
$ 5,000,000 2,000,000
All stock issued will be restricted for a period of one year from the date of issuance. Stock certificates will be
issued on each level of monthly revenues reached as described above within ten business days of the
All expenses for Zufelt's services shall be paid for by RSG. Said expenses are to include, but are not limited to,
travel, meals, lodging, rental cars, airport parking, shuttle or taxi fees, long distance calls, all mailings costs
including postage, envelopes, inserts etc. Both parties shall agree upon all expenses before Zufelt incurs them.
This contract will be construed according to the laws of the State of Nevada and any disputes arising here from
will be litigated in its courts.
ENTIRE AGREEMENT. This agreement contains the entire agreement of the parties and there are no other
promises or conditions in any other agreement whether oral or written. This Agreement supersedes any prior
written or oral agreements between the parties.
This contract sets forth the entire understanding and agreement and is not subject to amendment or supplemental
agreement except in writing and duly executed by both parties. This agreement shall be valid and binding only
when signed by both an authorized agent for RSG and Jack M. Zufelt.
Signed _________________________________ Date ___________________
Jack M. Zufelt
Signed The Right Solution Gateway
_________________________________ Date ___________________
Rick Bailey President / CEO
OMITTED] MEDIA SERVICES AGREEMENT
MEDIA CHIEF MEDIA, LLC.
This Media Services Agreement (this "Agreement") is made and entered into as of March 10, 2004, by and
between CHIEF MEDIA, LLC a Limited Liability Company ("Agency"), with its principal offices at 70 West
36th Street, 10th Floor, NY, NY 10018 , and THE RIGHT SOLUTION ("Advertiser") with its principal offices
at 3035 E. Patrick Lane, Suite 14, Las Vegas, NV 89120 (collectively Agency and Advertiser are referred to as
the "Parties" or individually, each is referred to as a "Party").
WHEREAS Agency is in the business of planning, managing and procuring advertising media time (on television
and radio) and space (in newspapers, magazines, and other published media) and other initial "pre-rollout"
services outlined in Section 5 herein; on behalf of businesses seeking to advertise their products and services; and
WHEREAS Advertiser desires to engage Agency and to have Agency plan, manage and procure media time
and/or space for the purpose of advertising various direct marketing campaigns (collectively, the "Project");
NOW, THEREFORE, in consideration of the agreements set forth below and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. ENGAGEMENT OF AGENCY. Advertiser hereby engages Agency as its exclusive agent to book and
purchase advertising media time or space on behalf of and for the use of Advertiser for the purpose of advertising
the Project (Rollout Phase) Subject to the provisions of Section 2, Advertiser hereby authorizes Agency to enter
into contracts (in the name and on behalf of Advertiser) with third parties for the purchase of media time or
2. RESPONSIBILITIES OF AGENCY.
(A) Upon being advised by Advertiser of its proposed budgets thereof, Agency shall prepare detailed media
plans consistent with such budgets. Such plans shall consist of a listing of day parts, date spans, and such other
criteria as Advertiser may reasonably specify for each media type purchased.
Following Advertiser's approval of the media buy plans, Agency shall buy the advertising time or space on behalf
of Advertiser and implement such approved plans.
(B) Upon completion of media buys, Agency will provide a summary comparison of planned media to purchased
media. Agency will endeavor to prepare and forward to Advertiser such summary comparisons on a weekly
(C) Agency will assist the Advertiser's chosen tape duplication and customization vendor ("Vendor") by providing
the Vendor with the station's requirements for airing including the size of tape, trafficking instructions, and the time
prior to airing in which the station must receive the tape.
(D) Agency will provide ongoing analysis setting forth recommended adjustments to the existing media buy based
on interim telemarketing sales results and Advertiser direction.
(E) Agency will reconcile any discrepancies, subject to Advertiser's approval, and obtain make-goods, credits or
other compensating adjustments from the media suppliers.
(F) Agency will work directly with Advertiser's telemarketing service provider to assess order results and assist in
problems involving sourcing of all data points captured. Upon advertiser's requested schedule as defined during
operational set up, Agency shall provide written estimates of orders, cleared dollars, and cost-per-order. The
estimates shall be based on analysis of order "bursts" received from the telemarketer. On an ongoing basis,
Agency will provide Advertiser with reports containing similar information based upon air times received from
media vendors, and Agency will use best efforts to insure the accuracy of such reports. The reports will provide
Advertiser a listing of the orders, cleared dollars, cost-per-order, cost per call, cost per thousand, up-sell ratios,
order ratios and media efficiency ratios for each media spot individually and in the aggregate.
3. ADVERTISER AUTHORIZATIONS AND APPROVALS. Within the reasonable requirements and
parameters established by Advertiser and of which Agency is given written notice, Advertiser hereby authorizes
Agency to purchase and book media advertising availabilities ("Availabilities") without Advertiser's prior
approval. Notwithstanding the foregoing, Advertiser reserves its right to serve advance written notice upon
Agency requiring Agency to obtain prior approval to purchase and book future Availabilities. Said notice shall
only be effective as to future bookings, and shall not affect those bookings which Agency cannot cancel in
compliance with the media supplier's cancellation policy. Agency, upon receiving such written notice, shall submit
to Advertiser suggested media advertising availabilities with costs for its use ("Suggested Availabilities"), and
Advertiser within a reasonable time prior to the date and time such availabilities must be booked shall select and
approve, via email, those Suggested Availabilities that it desires to purchase ("Approved Availabilities"). During
the term of this Agreement, Advertiser shall not book the Suggested or Approved Availabilities other than
through Agency. Agency shall use all reasonable efforts to book the Approved Availabilities for Advertiser's use.
Agency shall not be liable or responsible for any failure to obtain Approved Availabilities due to Advertiser's
delay in selecting and approving the media. (Approved Availabilities booked for Advertiser's use are hereinafter
referred to collectively as the "Media Contracts" or individually as a "Media Contract").
4. ADVERTISER'S LIABILITY. Advertiser shall be liable for and shall pay Agency all incidental costs and
expenses related to each Media Contract, and all commissions owed to Agency for each such Media Contract as
specified in Section 5.
5. COMPENSATION. (A) Advertiser shall be liable for and shall pay to Agency a commission equal to Fifteen
Percent (15%) of the "Gross Media" dollars spent or as scheduled per the Media Contract. The parties agree
that Gross Media shall mean the total cost of media purchased inclusive of agency commission.
(B) Agency, upon undertaking any of the initial "pre-rollout" services mentioned below, with and on behalf of
Advertiser, shall bill Advertiser per the following fee schedule: (See Section 5C for waiver clause):
Commercial Production Assistance/Scripting - $500 per hour Vendor setup - $400 per hour
Call center script writing - $500 per hour Call Center Training - $3,000 per day + out of pocket expenses
(C) In the event Advertiser and Agency proceed to the Rollout Phase the above fees will be waived by Agency
and applied against future commissions per 5(A). The parties agree that Rollout shall mean gross media spend of
at least $300 thousand dollars spent per week for a consecutive four week period.
6. BILLING AND PAYMENT. Agency shall regularly invoice Advertiser for the costs and expenses of all
Media Contracts and Agency's commission for such contracts. Agency will invoice Advertiser not less than four
(4) weeks in advance of the first scheduled airdate for all media types ("First Scheduled Airdate") and Advertiser
shall make payment not later than three (3) weeks prior to the First Scheduled Airdate. Advertiser shall remit
funds to Agency by wire transfer to the following account:
J.P. MORGAN CHASE CHIEF MEDIA ACCOUNT # 891-502399665 ROUTING # 021-0000-21 350
MAIN STREET HUNTINGTON, NY 11743 631-673-7422
7. CANCELLATIONS. (A) In the event that Advertiser cancels any Media Contract such that Agency is unable
to cancel its contract with the media outlet including, but not limited to, print, broadcast stations, cable stations,
radio stations and online media, Advertiser shall remain liable for and shall pay Agency the following:
(i) All actual costs incurred in connection with such canceled Media Contract; and
(ii) Agency's commission for such canceled contract.
In the event of cancellation by Advertiser pursuant to this Subsection 7(A), Agency shall use its reasonable best
efforts to mitigate Advertiser's liability to Agency for costs and commissions. If Agency is able to resell the Media
Contract, Advertiser will be liable to Agency only for an amount equal to the cost and commission which Agency
would receive under the relevant Media Contract less the cost and commission, if any, actually received by
Agency upon resale.
(B) If Advertiser fails to make timely payments, for the costs, expenses and commissions for any Media
Contract, as required by Sections 4, 5 and 6 hereof, Advertiser will be charged a fee equal to one half of one
percent (.50%) per week of any balance outstanding and Agency reserves the right, in its sole discretion, but shall
not be obliged to, deem the unpaid Media Contract as having been canceled by the Advertiser.
(C) Except as provided in Subsection 7(B), cancellations of Media Contracts by Advertiser may only be made in
writing signed by Advertiser and delivered to Agency.
(A) Agency agrees that all confidential proprietary information, materials, and knowledge acquired or learned by
Agency from Advertiser or developed or obtained by Agency in connection with its services hereunder, including
but not limited to, ordering information, strategy, sales results, data, media information, financial results, customer
lists, trade secrets, costs, and other information, which if disclosed could be of assistance to Advertiser's
competitors, will be held by Agency in confidence. Except as may otherwise be required by applicable law or
judicial or administrative order, such information may not be disclosed or used by Agency for any purpose
whatsoever except solely by Agency personnel, its advisors and representatives or otherwise in furtherance of
Agency's obligation's and responsibilities to Advertiser under this Agreement. The obligations of this paragraph
do not apply to information which is or later becomes part of the public domain through no fault of Agency.
(B) Advertiser agrees that all confidential proprietary information, materials, and knowledge acquired or learned
from Agency or developed or obtained in connections with Agency's services hereunder, including but not limited
to, Suggested Availabilities, stations, unit costs for the time slots, scripting, buying strategies, analytical strategies
and other information which if disclosed could be of assistance to Agency's competitors will be held by
Advertiser in confidence. Except as may otherwise be required by applicable law or judicial or administrative
order, such information may not be disclosed or used for any purpose whatsoever except solely by Advertiser's
personnel in furtherance of Advertiser's obligation's and responsibilities to Agency under this Agreement. The
obligations of this paragraph do not apply to information which is or later becomes part of the public domain
through no fault of Advertiser.
9. INDEMNIFICATION. Each party shall indemnify and hold the other party harmless from and against all
claims, liabilities, loss and damages arising from or relating to any and all Media Contracts, and any and all claims,
liabilities, losses or damages arising from or relating to any advertising for which Media Contracts are used and
the products or services advertised, including the costs of litigation and attorney's fees, unless the claim, liability,
loss or damages arise solely from the negligence of the party against which such claim is made. In addition,
notwithstanding the foregoing, Agency and Advertiser agree that Agency is not responsible or liable to Advertiser
or Advertiser's Client, if any, for any claims or damages arising from or relating to the sales performance of any
product or service advertised, without regard to whether or not Advertiser or Advertiser's Client approved the
Availability. Both party's liability hereunder shall not exceed the amounts paid by Client to Agency hereunder, and
in no event shall either party be liable for consequential damages.
10. EFFECTIVE DATE. This Agreement shall be effective as of the date of this Agreement first set forth above.
11. TERMINATION. Either party may terminate this Agreement by giving the other party sixty (60) days
advance written notice thereof. All rights and duties of the parties shall continue during such notice period;
provided, however, that Agency shall not obtain any additional Media Contracts for Advertiser' account during
such notice period unless Advertiser provides Agency with written consent to do so, in which case Advertiser
shall be liable for all costs, expenses and commissions owed to Agency in accordance with the terms hereof.
Notwithstanding any termination of this Agreement, Advertiser shall remain liable to Agency, as provided by this
Agreement for all costs, expenses and commissions for Media Contracts that have Air Dates prior to, during, or
after either the notice period or the termination of this Agreement.
12. MODIFICATIONS. Advertiser reserves the right to modify, reject, cancel, or stop any and all plans,
schedules, or media purchases. In such event, Agency shall promptly take all reasonable steps to carry out
Advertiser's instructions. Advertiser agrees to reimburse Agency for all expenses incurred and to indemnify
Agency for all claims and actions by third parties for damages and expenses that result from carrying out
13. RECORD INSPECTION. Agency's records relating to ordering and payment of media and other services
hereunder which are billed to Advertiser shall be open to inspection by Advertiser's authorized representatives
during normal business hours following reasonable notice to Agency for a period of one year.
14. PUBLICITY. Any public announcement or publicity concerning the relationship established by this
Agreement or the services provided hereunder shall be released only upon mutual written consent of both of the
15. CONTROLLING LAW. The validity, interpretation, and performance of this agreement shall be controlled
by and construed under the laws of the State of New York, excluding any conflicts of law principles which would
apply the law of any other jurisdiction. It is hereby agreed that any matter arising under this Agreement (subject to
the arbitration provisions below) and including, without limitation, any suit to enforce and award under the
arbitration provisions hereof, must be finally adjudged or determined in any court or courts of the State of New
York or of the United States of America, in New York County, New York, and the parties hereto hereby submit
generally and unconditionally to the jurisdiction of such courts and of any of them in respect to any such matter
and consent to service of process by any means authorized by New York law.
16. ARBITRATION. Any controversy or claim between the parties, including, but not limited to, those arising
out of or relating to this Agreement or any agreements or instruments relating hereto or delivered in connection
herewith shall be determined by arbitration. The arbitration shall be conducted in accordance with the United
States Arbitration Act (Title 9, U.S. Code), notwithstanding any choice of law provision in this Agreement, and
under the Commercial Rules of the American Arbitration Association. The arbitration shall commence at a
location in New York County, New York to be chosen by the arbitrators. The arbitrators shall give effect to
statutes of limitation in determining any claim. Any controversy concerning whether an issue is arbitrable shall be
determined by the arbitrators. Judgment upon the arbitration award may be entered in any court having
jurisdiction. The institution and maintenance of an action for judicial relief or pursuit of a provisional or ancillary
remedy shall not constitute a waiver of the right of any party, including the plaintiff, to submit the controversy or
claim to arbitration if any other party contests such action for judicial relief. No provision of this paragraph shall
limit the right of any party to this Agreement to obtain provisional or ancillary remedies from a court of competent
jurisdiction before, after or during the pendency of any arbitration.
17. ATTORNEY'S FEES. The prevailing Party in any action brought to enforce this Agreement or any provision
hereof, to rescind the same, or to collect damages for an alleged breach thereof shall be entitled to recover its
reasonable attorney's fees and court costs from the non- prevailing Party.
18. INTEGRATION AND MODIFICATION. This Agreement contains the entire agreement of the Parties and
supersedes any prior understandings and agreements between them respecting the subject matter of this
Agreement. No representations were made or relied upon by either Party, other than those that are expressly set
forth herein. No agent, employee, or other representative of either Party is empowered to alter any term of this
Agreement, unless done in writing and signed by an appropriate officer of Advertiser and an executive officer of
19. ASSIGNMENT UPON TERMINATION. Upon termination of this Agreement and upon payment of all
amounts due to Agency hereunder, Agency shall assign to Advertiser all Media Contracts and all Agency's rights
and contracts, agreements, arrangements, or other transactions made with third parties for Advertiser's account
effective on the date of termination or on such other date as may be agreed upon by the Parties. Advertiser shall
assume all obligations and indemnify and hold Agency harmless from all liability thereunder. If any contract is not
assignable, or consent to assignment is refused, or Agency cannot obtain a release from its obligations, Agency
shall continue performance, and Advertiser shall meet its obligations, as to the unassigned or unreleased contracts
to Agency as though this Agreement had not been terminated.
20. WAIVER. The failure of either Party to this Agreement to object to or to take affirmative action with respect
to any conduct of the other which is in violation of the terms of this Agreement shall not be construed as a waiver
of the violation or breach or of any future violation, breach or wrongful conduct.
21. NOTICES. All notices pertaining to this Agreement shall be in writing and given at the addresses indicated
set forth below, or at such other address as may be designated by the Parties.
CHIEF MEDIA, LLC
70 WEST 36TH STREET
NEW YORK, NY 10018
ATTN: VIC GOLIO
22. HEADINGS. Headings in this Agreement are for convenience only and shall not be used to interpret or
construe its provisions.
23. PRESUMPTION. This Agreement, having been fully negotiated and drafted by both Parties, shall not be
strictly construed against either Party.
24. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one in the same instrument.
25. BINDING EFFECT. The provisions of this Agreement shall be binding upon and inure to the benefit of each
of the Parties and their respective successors and assigns.
IN WITNESS WHEREOF, intending to be legally bound, the Parties have executed this Agreement as of the
day first above written.
CHIEF MEDIA, LLC. ADVERTISER
Vic Golio Name
Executive Vice President Title
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Richard A. Bailey, certify that:
1. I have reviewed this annual report on Form 10-KSB of Gateway Distributors, Ltd.;
2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial information included in this annual report,
fairly present in all material respects the financial condition, results of operations and cash flows of the registrant
as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
(a) designed such disclosure controls and procedures to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days
prior to the filing date of this annual report (the "Evaluation Date"); and
(c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's board of directors (or persons performing the
(a) all significant deficiencies in the design or operation of internal controls which could adversely affect the
registrant's ability to record, process, summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves management or other employees who have significant roles in
the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this annual report whether there were significant
changes in internal controls or in other factors that could significantly affect internal controls subsequent to the
date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and
Date: April 15, 2005.
/s/ Richard A. Bailey
Richard A. Bailey, Chief Financial Officer and Chief
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual report of Gateway Distributors, Ltd. (the "Company") on Form 10-KSB for the
period ended December 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, Richard A. Bailey, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
1. The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.
A signed original of this written statement required by Section 906 has been provided to the Company and will
be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
/s/ Richard A. Bailey
Richard A. Bailey, Chief Financial Officer and Chief
Date: April 15, 2005