Consulting and Advisory Agreement - Burchmont Equities Group Inc. and Netgateway Inc.
CONSULTING AND ADVISORY AGREEMENT This Consulting and Advisory Agreement ("Agreement") is made and entered as of this 20th day of October, 1998, and between BURCHMONT EQUITIES GROUP INC., (or "BMEG") and Netgateway, Inc. (or "NGWY") Recitals A. BMEG is experienced as a consultant and advisor in the securities industry. BMEG has played a key role in assisting in the dissemination of information of certain publicly traded companies and providing the necessary strategy for growth of the public awareness within the companies where it has been retained. BMEG is also experienced in dealing with brokers, NASD broker/dealers, financial institutions, and equity investors as it pertains to the securities transactions and in corporate finance in the securities industry. B. BMEG is experienced at making presentations to the brokerage community in addition to providing market analysts and NASD broker/dealer interviews concerning the energy industry and the current activities of the company's wherein he has been contracted as an advisor. C. NGWY desires to publicize itself with the intention of making its name and business better known to shareholders, investors, and the financial communities and to avail itself of BMEG's experience, advice and contacts within these communities. NGWY desires to enter into this Agreement with BMEG and BMEG is willing to provide consulting and advisory services to NGWY under the following terms and conditions of this Agreement. NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein and for good valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 1. Engagements. NGWY hereby retains BMEG to present the Company to institutions, broker/dealers and prospective investors and shareholders. BMEG hereby agrees to make itself available to render its professional advise and reasonable assistance to NGWY and NGWY's Board of Directors under the terms and conditions herein set forth. 2. Duties. During the term of this Agreement, BMEG agrees to assist and advise NGWY in the following areas; however it is understood by the parties hereto that BMEG will only play an active role in day to day operations if requested to do so: a) Assist in the dissemination of information concerning Netgateway Inc.; <PAGE> b) Interview and source qualified investment opportunities to be presented to the board of directors. c) Assist in the presentation of due diligence material included in investment memoranda and other similar matters as may be required by industry partners, bankers, financial institutions, NASD broker/dealers, securities analysts and equity investors; d) Such other general assistance and advice as may be mutually agreed upon. 3. Compensation. In exchange for the services to be rendered hereunder, BMEG will be compensated as follows: a) For promotional services: 1) 100,000 shares of restricted Rule 144 common stock, subject to piggyback registration rights deliverable in seven (7) days. 2) 300,000 stock options at a strike price of $1.50 per share. b) The compensation for promotional services will only vest upon the happening of all of the following events: (i) NGWY becomes listed on the NASDAQ Small Cap Market; (ii) NGWY files an effective S-1 Registration statement for its existing shares, including the shares governed hereunder; (iii) NGWY files a Form 10 and becomes a 12(g) reporting company; and c) NGWY also agrees to pay compensation not to exceed 10% of the gross proceeds raised by BMEG on behalf of the Company, whether raised through loans, direct equity lending or other negotiated financial instruments. 4. Term. This agreement shall be for a term of twelve (12) months, provided, however, that after the initial sixty (60) days, NGWY may terminate this agreement upon thirty (30) days prior written notice. 5. Accuracy Information and Indemnification. NGWY agrees to furnish to BMEG truthful and accurate information in all respects. NGWY agrees to cooperate with BMEG in the performance of BMEG's consulting services and experience. Any written materials generated by BMEG concerning NGWY for distribution must be reviewed prior to and approved in writing by NGWY before distribution. 6. Miscellaneous. a) Assignability. Unless otherwise agreed to in writing by both parties hereto, the rights, obligations and benefits established by this Agreement shall be nonassignable by either of the parties hereto and any such attempt of assignment shall be null and void and of no effect whatsoever. <PAGE> b) Entire Agreement. This Agreement contains the entire agreement of the parties with respect to the subject matter hereof, and may not be changed except by a writing signed by the party against whom enforced or discharged is sought. c) Waiver of Breach. The waiver by either party of a breach of any position of this agreement by the other shall not operate or be construed as a waiver of any subsequent breach by the other party. d) Construction of Language. The language used in this Agreement shall be construed as a whole according to its fair meaning, and not strictly for nor against either party. e) Captions and Headings. The paragraph headings throughout this Agreement are for convenience and reference only, and shall in no way be deemed to define, limit or add to the meaning of any provision of the Agreement. f) State of Law. This Agreement, its interpretation, and its application shall be governed by the laws of the State of Nevada. g) Counterpart. This agreement may be executed in several counterparts, each of which shall be an original, and such counterparts shall together constitute one and the same instrument. h) Costs. In the event of any legal proceedings between any of the parties to enforce or defend the terms and rights set forth in this Agreement, the prevailing party or parties shall be paid all costs of such legal proceeding, including but not limited to, attorney fees by the other party. IN WITNESS THEREOF, the parties have executed this agreement to be effective as of the day and the year first mentioned above written notwithstanding the actual date of signatures. BURCHMONT EQUITIES GROUP, INC. By: /s/ Dean S. Dumont ------------------------------- Dean S. Dumont Title: President Netgateway Inc. By: /s/ Keith D. Freadhoff ------------------------------- Keith D. Freadhoff Title: CEO