EXHIBIT 10.1
JOINT
VENTURE AGREEMENT Page 1 of 8 Pages
THIS AGREEMENT made the day of May 2009
BETWEEN:
SEA 2 SKY CORPORATION, a corporation registered under the laws
of Nevada, with an office at 0000 Xxxxxx Xxxx, Xxxxxxxx, XX
XXX 00000.
(Hereinafter called the "SSKY")
OF THE FIRST PART
AND:
GATEWAY ASSOCIATES LLC. a corporation duly incorporated under
the laws of the Xxxxx Xxxxxx Xxxxxx, XX XXX 00000,
(hereinafter called the "Gateway")
WHEREAS:
A. SSKY is a public corporation specializing in renewable energy and
alternative energy supply and sources to the United States and
international countries.
B. As part of its operations SSKY is developing long term sources of
supply of woody biomass alternative fuels in pelletized forms
(hereinafter referred to as "Pellet Products").
C. Pellet Products are used in various market places throughout the world
for industrial, commercial and residential applications of heat,
electricity and other uses.
D. In addition, Pellet Products are used by various customers within the
market place; with some of those customers being individual home users
(hereinafter the "Retail Market"), governmental bodies, whether
federal, military, state or local bodies or agencies (the
"Institutional Market") and large industrial contractors (the
"Industrial Market").
E. In evaluating the US marketplace, SSKY is in the process of locating
market access points into the Retail Market, the Institutional Market
and Industrial Market.
F. After research SSKY has determined that the Retail, Institutional and
Industrial Markets are competitive in nature with the market for
SSKY's Pellet Products is increasing in size and potential due to the
increased US Government mandates in each of the Retail, Institutional
and Industrial Markets via the stimulus funding set forth by the
government.
G. SSKY is in process of evaluating the Retail Market and various retail
market entry points.
JOINT
Page 2 of 8 Pages
VENTURE AGREEMENT
H. Gateway is a corporation incorporated under the laws of the Lummi
Nation and is controlled by Xxxxx Xxxxx.
I. Gateway is a consulting corporation that has the ability to source,
promote and to propose contracts within the Institutional and
Industrial Markets (the "Referral Network").
J. Gateway and Gateway's Referral Network contains parties who have
distinctive market access rights to the Institutional and Industrial
Markets through the usage of, access to and location on a Foreign
Trade Zone (FTZ), a zone created under the Foreign-Trade Zones Act of
1934, (see US Code Title 19-Customs Duties) which can allow and
facilitate the movement of any international SSKY Pellet Products into
the United States potentially without or with reduced import duties as
applicable as well as significant tax and possible grant incentives in
doing business within a Historically underutilized Business (HUB) Zone
and the Domestic Sovereign Lummi Nation.
K. Further, Gateway and Gateway's Referral Network contains parties who
have distinctive market access rights to the Institutional and
Industrial Markets through those parties various special designations
under US law as noted hereunder.
L. Gateway's current research shows that within the competitive
Institutional and Industrial Marketplace the US government has created
various incentive programs for certain demographic and minority based
businesses in the Institutional Marketplace to an aggregate of 23% of
the Federal Procurement Budget to compete; namely:
a. Under US Public Law Public Law 108-183 and Veterans
Administration Law 109-461. A requirement has been established
to provide a strategic plan to have 3% mandated purchase
requirements for Service-Disabled Veteran Owned Small Business
(SDVOSB) from the Budget.
b. Under Small Business Reauthorization Act of 1997 a business
locating on a HUB Zone is eligible for Federal contracting
preferences with the government having a further 3% for
contract set-asides to HUB Zone-certified companies.
c. Under SBA regulations ata small business is eligible for
Federal contracting preferences with the government having up
to a further 13% for contract set-asides to small business
companies.
d. Under SBA Reauthorization Act of 1999, SBA Regulations and
other law, a business owned and operated by a Native American
is eligible for Federal contracting preferences with the
government having a further 5% for contract set-asides.
(with these four category rights collectively referred to as the
Special Category Business Rights" and the minority business referred
to as "Special Category Businesses").
JOINT
Page 3 of 8 Pages
VENTURE AGREEMENT
Based on research, the cumulative mandate of the US government is the
within the Institutional Market, businesses that have these Special
Category Businesses Rights have the right under a contract set-aside
to sell into the government on a priority basis of 23 % of the US
federal Budget of $425,000,000,000 for a total contract preference of
$97,750,000,000.
M. In evaluating the Industrial Market, Gateway has determined that the
US Government often requires that the industrial companies within the
Industrial Market, provide a similar mandate of their own buying to
Special Category Business companies in order at times to be eligible
to continued contracting with the US government
N. Based on current evaluation, currently only approximately one-quarter
of this target amount is serviced, leaving approximately 17% of the
federal procurement budget as an unmet market need. The current US
federal procurement budget is estimated to be $425,000,000,000 dollars
thereby leaving the unmet market need available to Special Category
Businesses is as high as $72,250,000,000 Dollars (the "Institutional
Market Unmet Demand").
O. Although not quantifiable, Gateway is aware that the Industrial Market
has similar type programs and will be of like size (the "Industrial
Market Unmet Demand").
P. The parties hereto agree to commence a Joint Venture between
themselves in accordance with the terms of this agreement where
Gateway will engage its Referral Network to allow SSKY to submit,
promote and provide its Pellet Products and expertise to the
Institution and Industrial Markets to tap into and start to meet the
Institutional Market and Industrial Market Unmet Demand
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT, in consideration of the premises,
the mutual covenants herein contained, and other good and valuable consideration
now paid by each party to the other, the receipt and sufficiency whereof each
party hereby acknowledges, the parties hereto hereby covenant and agree as
follows:
1. FORMATION AND ENGAGEMENT
1.01 In accordance with the terms of this agreement, Gateway agrees to
pursue and provide to SSKY its Referral Network and use its best
efforts and due diligence to assist SSKY to pursue that Referral
Network to enable the SSKY to become a member of a teaming agreement or
such similar role in the Special Category Business contracts as issued
from time to time for the Pellet Products.
1.02 In performance of its obligations hereunder, Gateway shall promote to
the Referral Network that SSKY:
JOINT
Page 4 of 8 Pages
VENTURE AGREEMENT
1.02.1.1 has a long term supply of Pellet Products
1.02.1.2 the Pellet Products can be provided in a teaming Agreement with a
Special Category Business to pursue the Institutional and
Industrial Market Unmet Demand
1.02.1.3 is prepared to promote its Pellet Products through the Referral
Network in a fashion to meet as much of the Institutional and
Industrial Market Unmet Demand.
1.03 In performance of its obligations hereunder, SSKY shall abide by the
terms of this Agreement.
2. TERM
2.01 This Agreement shall be effective as of the date of this agreement and,
shall subject to the annual payment as stated in Schedule A, continue
for a minimum seven year term from the date hereof. Thereafter, the
agreement will automatically extend on a year by year basis provided
SSKY remits the payment as set forth in Schedule A.
3. PELLET PRODUCT PERFORMANCE AND INDEMNITY
3.01 SSKY acknowledges that in the sale of Pellet Products to Institutional
and Industrial markets, certain criteria and performance conditions and
bonding maybe required and that it is the sole responsibility of SSKY
to comply with those conditions.
3.02 SSKY hereto covenants and agrees to indemnify and save the Gateway
harmless from and against any loss, demand, suit, claim or damages
resulting from the legal obligations of SSKY to third parties, and
shall further save the Gateway harmless from and against, and shall
defend against, any and all claims and damages of every kind arising
out of any defects or failures in any of the Pellets, and damage,
injury or death caused by any of the Pellets.
4. TERMINATION
4.01 This Agreement may be terminated for any of the following reasons:
4.01.1 Upon the occurrence of any material breach by either party of
the terms and conditions of this Agreement and failure to cure
such material breach within 30 days after receipt of written
notice from the other party, the non-breaching party may, at
its option, terminate this Agreement upon written notice.
JOINT
Page 5 of 8 Pages
VENTURE AGREEMENT
4.01.2 Upon the occurrence of bankruptcy or reorganization under
bankruptcy laws, cessation of operations or assignment for the
benefit of creditors of either party, the other party may
terminate this Agreement upon written notice.
4.01.3 Failure to remit the payments required to be paid under
Schedule A to this Agreement.
4.01.4 This Agreement may be terminated by mutual written agreement of
both parties to terminate.
4.01.5 The approval by the shareholders of the SSKY of a complete
liquidation or dissolution of the SSKY.
4.02 Notwithstanding the foregoing, upon the occurrence of a material
breach by either Party (the "Breaching Party"), which is not cured
within the appropriate cure period, or other event giving rise to a
right for either Party to terminate this Agreement, without limiting
any other rights or remedies available, the Party which is not in
material breach (the "Non-Breaching Party"), which has the right to
terminate this Agreement may, at its option, terminate its own
obligations of exclusivity under this agreement, such that the
agreement remains binding against the Breaching Party for the
remainder of the term but shall thereafter no longer be binding
against the Non-Breaching Party.
5. NOTICES
5.01 The parties hereto agree that notices shall only be in writing and
shall be personally delivered, or sent by telex or telecopier, to the
addresses, telex numbers or telecopier numbers first above noted, or to
such other addresses, telex numbers or telecopier numbers as a party
notifies the other in writing in the manner required herein.
All notices shall be deemed delivered, upon actual receipt at the
address, telex number or telecopier number set forth for the receiving
party.
6. JURISDICTION AND PROPER LAW
6.01 The parties hereto hereby agree that this Agreement, and the
interpretation thereof, shall be governed by the laws of the State of
Nevada. The parties further agree that the successful party in any
civil proceeding with respect to this Agreement shall be entitled to
full reimbursement of all its costs and expenses with respect to such
proceeding, including costs on a solicitor and own client basis.
JOINT
Page 6 of 8 Pages
VENTURE AGREEMENT
7. GENERAL
7.01 This Agreement shall enure to the benefit of, and be binding upon, the
parties hereto and their respective successors and permitted assigns.
7.02 Time is of the essence of each provision of this Agreement.
7.03 This Agreement contains all of the terms and conditions agreed upon by
the parties hereto with reference to the subject matter hereof. No
other agreements, oral or otherwise, shall be deemed to exist or to
bind either of the parties hereto, and all prior agreements and
understandings are superseded hereby. No amendment of this Agreement
shall be effective unless in writing and executed by both parties
hereto.
7.04 Titles and headings used in this Agreement are for convenience only and
shall not be deemed to affect the meaning or construction of any of the
terms, provisions, covenants or conditions of this Agreement.
7.05 If any provision of this Agreement or the application thereof to any
person or circumstances is determined, to any extent, to be invalid or
unenforceable, the remainder of this Agreement, or the application of
such provision to persons or circumstances other than those as to which
the same is held invalid or unenforceable, will not be affected
thereby, and each term and provision of this Agreement will be valid
and enforceable to the fullest extent permitted by law. This Agreement
is intended to be interpreted, construed and enforced in accordance
with the laws of the State of Nevada.
7.06 Trademarks, Trade Names and Copyright. Except as expressly provided
herein, this Agreement does not give either party any ownership rights
or interest in the other party's trade name, trademarks or copyrights.
7.07 Waiver. No failure or delay by either party in exercising any of its
rights or remedies hereunder will operate as a waiver thereof, nor will
any single or partial exercise of any such right or remedy preclude any
other or further exercise thereof or the exercise of any other right or
remedy. The rights and remedies of the party's provided in this
Agreement are cumulative and not exclusive of any rights or remedies
provided under this Agreement, by law, in equity or otherwise.
7.08 Independent Contractors. This Agreement shall not be construed to
establish any form of partnership or agency of any kind between the
parties; or to constitute either party as an agent, employee, or legal
representative of the other; and nothing in this Agreement shall create
any relationship between the parties other than that of an independent
contractor. Neither party shall have any responsibility nor did
liability for the actions of the other party, except as specifically
provided herein. Neither party shall have any right or authority to
bind or obligate the other in any manner or make any representation or
warranty on behalf of the other. No profits, losses or costs will be
shared under any provision of this Agreement or as a result of either
JOINT
Page 7 of 8 Pages
VENTURE AGREEMENT
party's efforts in connection with any joint opportunity and securing
an award of any customer contract. There are no third-party
beneficiaries of this Agreement.
7.09 Further Assurances. Without limiting the generality of any provision of
this Agreement, each party agrees that upon request of the other party,
it shall, from time to time, do any and all other acts and things as
may reasonably be required to carry out its obligations hereunder, to
consummate the transactions contemplated hereby, and to effectuate the
purposes hereof.
7.10 Expenses. Each party will pay its own expenses and costs incidental to
the negotiation of the transactions contemplated by this Agreement,
including legal and accounting fees.
7.11 Attorneys' Fees. If any party institutes an action, proceeding or
arbitration against any other party relating to the provisions of this
Agreement or any default hereunder, SSKY will be responsible for paying
Gateway's legal fees and expenses and the SSKY will be required to
reimburse Gateway or reasonable expenses and legal fees incurred by
Gateway in connection with the resolution of such action or proceeding,
including any costs of appeal.
7.12 Headings and Interpretation. The headings used in this Agreement are
for convenience of reference only and shall not affect the meaning or
construction of this Agreement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.
Sea 2 Sky Corporation
--------------------------
Xxxxx Xxxxxxxx, CEO
Gateway Associates LLC
--------------------------
Xxxxx Xxxxx, Chairman
JOINT
Page 8 of 8 Pages
VENTURE AGREEMENT
Schedule A
Anniversary License Fee
Year 1 $ 10,000.00
Year 2 $ 25,000.00
Year 3 $ 50,000.00
Year 4 $100,000.00
Year 5 $100,000.00
Year 6 $100,000.00
Year 7 $250,000.00
And on each subsequent The greater of $250,000 and
Anniversary date of this 1/2 of One percent of gross
Agreement sales of SSKY
