Exhibit 10.3
April 7, 2002
Mr. Thomas Y. Gorman Jr.
702 Clarendon
Longmont, Colorado 80501
Re: Settlement of Wages, Bonus and Expenses
Dear Tom:
Pursuant to ongoing conversations, when signed by you, this letter will
constitute a final settlement as to outstanding wages and bonuses owed you by
Arete Industries, Inc. (Arete) and any of its subsidiaries, including Aggression
Sports, Inc. (Arete Outdoors) and will resolve any claims you may have
whatsoever against either entity or any of its officers, directors or employees
concerning the business of either Company arising during the term of your
employment there through the date of this agreement.
According to the records of the Company, you have outstanding $150,000 in gross
wages and $119,000 in gross bonus owing from the Company through December 31,
2001. The Company does not have now, nor does it anticipate that in the near
future, will have any funds to pay these amounts, but does anticipate that
within the next 6 months, it will own common stock interests in companies which
will be acquired in part by the Company and which the Company will distribute
all or a portion of its holdings in such companies to its shareholders in a
registered dividend of freely trading shares in such entities.
Therefore, as an inducement to you to forgive the Company of its obligations to
you as described above, offers in exchange for such forgiveness the right to
receive 9% of the total stock dividend distributed by the Company to its
shareholders from the first four (4) companies that it spins off to its
shareholders in a registered stock dividend and/or a registered rights offering.
On or before June 30, 2002, the Company will identify the entities to which the
above dividend will apply.
By your signature below indicating your acceptance of this offer of settlement
as a binding legal agreement upon you and the Company, its officers, directors
and subsidiaries, you confirm that you waive the right to sue to collect the
amounts due you as stated above, and waive and release the Company, its
subsidiaries, current and former officers, directors and shareholders from any
claims, rights or causes of action which you may have against them or any of
them arising from your employment or otherwise during the term thereof, arising
as a shareholder or employee of the Company and its subsidiaries through the
date hereof. You further confirm and acknowledge: (i) that there are potential
unanticipated problems which may arise relating to the Company's ability to
issue the referenced dividends, including without limitation the inability of
either or all the prospective subsidiaries to gain approval of the Securities
and Exchange Commission of a registration statement covering the shares of such
subsidiaries subject to the dividend; (ii) that two of the four proposed
Mr. Thomas Y. Gorman, Jr.
April 7, 2002
Page 2 of 2
dividends are contingent upon the Company entering into acquisition agreements
with companies yet to be identified and that acquisition agreements concerning
them are not assured and that the forgiveness, waivers and releases being made
by you are not contingent upon the occurrence of any such event; and (iii) that
there may be adverse tax consequences to the above settlement by the Company or
other adverse consequences arising from the unconditional waivers and releases
provided in this agreement and none-the-less enter into this agreement without
reservation or qualification.
This offer is valid and binding on the Company only upon your signature below on
or before 12:00 midnight, Monday, April 8, 2002.
By the Company and on behalf of its subsidiary, Aggression Sports, Inc.:
By: /s/ Thomas P. Raabe Date: April 7, 2002
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Thomas P. Raabe, CEO
WITNESS:
BY: /s/ Thomas Y. Gorman Date: April 7, 2002
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Thomas Y. Gorman, Individually
WITNESS:
-------------------------------- Date:
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2955 Valmont Road, Suite 300 o Boulder, Colorado 80301
o Phone: 303.247.1313 o Fax: 303.247.1315