SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-QSB


(Mark One)
   [X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the quarterly period ended June 30, 2002.

   [  ]  Transition report under Section 13 or 15(d) of the Securities Exchange
         Act of 1934 for the transition
         period from              to               .
                     ------------    --------------


         Commission file number: 000-27879
                                -----------


                           GATEWAY DISTRIBUTORS, LTD.
                          ----------------------------
        (Exact name of small business issuer as specified in its charter)





                Nevada                              65-0683539
               --------                            ------------
   (State or other jurisdiction of     (I.R.S. Employer Identification No.)
    incorporation or organization)





             3095 E. Patrick Lane, Suite 1, Las Vegas, Nevada 89120
            --------------------------------------------------------
               (Address of principal executive office) (Zip Code)


                                 (702) 399-4328
                           (Issuer's telephone number)


         Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

                                    Yes XX           No
                                        --             ----


         The number of outstanding shares of the issuer's common stock, $0.001
par value (the only class of voting stock), as of August 9, 2002 was
23,894,594,044.




<PAGE>





                                TABLE OF CONTENTS

                                     PART I
<TABLE>
<CAPTION>
<S><C>

ITEM 1.  FINANCIAL STATEMENTS.....................................................................................3

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION................................................4


                                     PART II


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS................................................................7

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS......................................................8

ITEM 5. OTHER INFORMATION.........................................................................................9

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K  ......................................................................10

SIGNATURES.......................................................................................................11

INDEX TO EXHIBITS................................................................................................12
</TABLE>











                 [THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK]










                                        2

                                     <PAGE>



ITEM 1.           FINANCIAL STATEMENTS

As used herein, the term "Company" or "Gateway" refers to Gateway Distributors,
Ltd., a Nevada corporation, and its subsidiaries and predecessors unless
otherwise indicated. Consolidated, unaudited, condensed interim financial
statements including a balance sheet for the Company as of the quarter ended
June 30, 2002, and statements of operations, and statements of cash flows for
the interim period up to the date of such balance sheet and the comparable
period of the preceding year are attached hereto as Pages F-1 through F-9 and
are incorporated herein by this reference.



















                      [THIS SPACE LEFT BLANK INTENTIONALLY]
























                                        3

                                     <PAGE>




                           GATEWAY DISTRIBUTORS, LTD.
                                    --------

                              FINANCIAL STATEMENTS
                                    ---------

                                  JUNE 30, 2002



                                       F-1

                                     <PAGE>



                           GATEWAY DISTRIBUTORS, LTD.


                                  - CONTENTS -




                                                                    PAGE NUMBER

Financial Statements:

    Balance Sheet                                                           F-1

    Statement of Operations                                                 F-2

    Statement of Changes in Stockholders' Equity (Deficit)                  F-3

    Statement of Cash Flows                                           F-4 & F-5

    Notes to Financial Statements                                     F-6 - F-8

                                       F-2

<PAGE>



                           GATEWAY DISTRIBUTORS, LTD.
                           CONSOLIDATED BALANCE SHEET


                                     ASSETS

<TABLE>
<CAPTION>
<S>                                                                <C>                  <C>

                                                                          JUNE 30,          DECEMBER 31,
                                                                            2002                    2001
                                                               -------------------    ------------------
                                                                       (UNAUDITED)

         CURRENT ASSETS:
            Cash and cash equivalents                                 $     22,979          $     12,121
            Accounts receivable                                              -                   130,921
            Inventories                                                     77,871               499,594
                                                                     -------------          ------------

Total current assets                                                       100,850               642,636

         Property and equipment, at cost -                                 440,963               547,602
            Less accumulated depreciation and amortization                 347,924               332,687
                                                                      ------------          ------------

                                                                            93,039               214,915

         OTHER ASSETS:
            Goodwill, net of accumulated amortization
               of $156,107 at December 31, 2001                              -                 1,245,925
                Other                                                      215,500                54,172
                                                                       ------------        -------------

                                                                           215,500             1,300,097

                                                                         $ 409,389            $2,157,648
                                                                        ===========           ==========

</TABLE>

               The accompanying notes are an integral part of the
                             financial statements.



                                       F-3

<PAGE>



                           GATEWAY DISTRIBUTORS, LTD.
                       CONSOLIDATED BALANCE SHEET (Cont.)

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
<S>                                                               <C>                   <C>

                                                                        JUNE 30,            DECEMBER 31,
                                                                        2002                    2001
                                                                     -----------           ---------------------
                                                                    (UNAUDITED)

         CURRENT LIABILITIES:
            Current maturities of long-term debt                     $   2,399,648         $   1,884,401
            Accounts payable:
               Trade                                                     1,763,570             2,106,958
               Related party                                                 4,360                69,751
               Commissions                                                 769,656               790,971
            Accrued expenses:
               Payroll and employee benefits                               201,259               233,421
               Payroll taxes                                               417,444               421,658
               Interest                                                    744,300               644,709
               Other                                                       260,323               239,839
                                                                     -------------         ---------------

Total current liabilities 6,560,560 6,391,708

         LONG-TERM DEBT                                                        -                  18,348

         MINORITY INTEREST                                                  17,246             1,028,280

         STOCKHOLDERS' EQUITY (DEFICIT):
            Preferred stock - $.001 par value                                  -                       -
               Authorized - 1,000,000 shares
               No shares issued and outstanding
            Common stock, - $.001 par value
               Authorized - 25,000,000,000 shares at
                 June 30, 2002 and 20,000,000 shares
                                At December 31, 2001
               Issued and outstanding -
              11,174,312,044  and 13,594,000 shares,
                 respectively                                           11,174,312                13,594
            Additional paid-in capital                                       -                 1,781,880
            Accumulated deficit                                        (17,342,729)           (7,076,162)
                                                                     -------------         --------------

                                                                       (6,168,417 )         (5,280,688 )
                                                                    --------------         -------------

                                                                         $ 409,389            $ 2,157,648
                                                                     ============            ===========
</TABLE>

               The accompanying notes are an integral part of the
                             financial statements.



                                       F-4

<PAGE>





                           GATEWAY DISTRIBUTORS, LTD.
                             STATEMENT OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
<S>                                        <C>                <C>            <C>                <C>

                                                THREE MONTHS ENDED              SIX MONTHS ENDED
                                                JUNE 30,                        JUNE 30,

                                                2002             2001           2002                      2001

         SALES                                $ 279,380          $ 393,488         $ 559,324       $ 1,097,285

         COST OF SALES                            8,761             80,540           117,102           221,504
                                  --------------------- ------------------ ----------------- -----------------

         GROSS PROFIT                           270,619            312,948           442,222           875,781

         SELLING, GENERAL AND
            ADMINISTRATIVE EXPENSES             794,045            555,630         1,507,504         1,359,802
                                    -------------------  -----------------  ----------------  ----------------

         LOSS FROM OPERATIONS                  (523,426)          (242,682)       (1,065,282)        (484,021)

         OTHER INCOME (EXPENSE):
            Loss on sale of A & A Medical
               Supply Co.                         -                  -               (43,105)                -
            Interest - net                      (59,717)           (73,591)         (119,638)        (131,909)
            Gain on settlement                    -                  -                 -               568,970
            Abandonment of leasehold
               improvements                       -                  -               (26,329)                -
            Impairment of goodwill            (1,203,953)            -            (1,203,953)                -
            Miscellaneous income
               (expense)                         (5,541)             3,253           (11,984)            7,586
                                  --------------------- ------------------------------------- ----------------

                                              (1,269,211)          (70,388)      (1,405,009 )          444,647

                                              (1,792,637 )        (313,020 )     (2,470,291 )        (39,374 )
         MINORITY INTEREST IN
            INCOME OF CONSOLIDATED
            SUBSIDIARIES                        946,344             91,042         1,252,218          (14,833)
                                    ------------------- ------------------  ---------------- -----------------

        NET LOSS                              $ (846,293)        $ (221,978)    $ (1,218,073 )     $ (54,207 )
                                              ================== ============== ===============    ===+=======

         BASIC LOSS PER SHARE                 $   (0.00)         $    (0.02)    $    ( 0.00)       $    (0.00)
                                  ===================== =================== -----------------      ===========

         WEIGHTED AVERAGE SHARES
            OUTSTANDING                       1,565,679,901      13,594,544      793,924,751        13,524,740
                                              ===============    =============== ============      ===========
</TABLE>

               The accompanying notes are an integral part of the
                             financial statements.



                                       F-5

<PAGE>



                           GATEWAY DISTRIBUTORS, LTD.
       CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                                   (UNAUDITED)




                         SIX MONTHS ENDED JUNE 30, 2002

<TABLE>
<CAPTION>
<S>                          <C>            <C>                   <C>                    <C>                 <C>

                                                                                    ADDITIONAL
                                   NUMBER OF                                 PAID-IN             ACCUMULATED
                                   SHARES               AMOUNT               CAPITAL                 DEFICIT               TOTAL
                            ------------------   ------------------      --------------        ------------------    --------------

 BALANCE - January 1, 2002          13,594,000 $              13,594 $         1,781,880    $      (7,076,162)  $       (5,280,688)

 Shares issued for services     11,160,718,044            11,160,718         (1,781,880)           (9,048,494)              330,344

 Net loss                                    -                     -                   -           (1,218,073)          (1,218,073)
                                ------------------ --------------------------------------------------------------------------------

 BALANCE - June 30, 2002        11,174,312,044 $         11,174,312  $                 -    $     (17,342,729)  $       (6,168,417)
                               ===============  =================== ========================================        ===============
</TABLE>







               The accompanying notes are an integral part of the
                             financial statements.



                                       F-6

                                     <PAGE>



                           GATEWAY DISTRIBUTORS, LTD.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
<S>                                                               <C>                      <C>

                                                                        SIX MONTHS ENDED
                                                                        -------------------------------
                                                                        JUNE 30,                JUNE 30,
                                                                        2002                    2001
                                                                        ----------------         ----------------
         CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                $ (1,218,073)           $ ( 54,207 )
            Adjustments to reconcile net loss
                to net cash from (to) operating activities:
                Depreciation and amortization                                 67,783                  66,649
                Minority interest                                        (1,252,518)                 787,837
                Loss on disposal of A & A Medical Supply Co                   43,105                       -
                Loss on abandonment of leasehold
                improvement                                                  s26,329                       -
                Penalties                                                     11,984                       -
                of A & A Medical Supply Co.                                 (22,561)                       -
                Impairment of goodwill1,                                     203,953                       -
                Stock issued for services                                 11,639,590                       -
            Changes in operating assets and liabilities
               which increase (decrease) cash flow:
                Accounts receivable1                                      (129,234 )               (37,528 )
                Inventories                                               (421,723 )               (60,318 )
                Prepaid expenses                                                   -                  90,329
                Accounts payable                                          (430,094 )              (204,094 )
                Deferred revenue                                                   -              (244,629 )
                Accrued expenses                                           (83,699 )                 100,165
                                                                      ----------------       ---------------

Net cash from operating activities                                         9,435,152                 444,204

         CASH FLOWS FROM INVESTING ACTIVITIES:
            Proceeds from A & A Medical Supply                               114,000                       -
            Capital expenditures                                             (3,606)                 (3,500)
            Cash paid for investment in TRSG Corporation                           -               (350,000)
            Advances (to) from related party                               (272,933)                       -
            Deposit                                                          54,172
            Other                                                                  -                   5,350
                                                               ---------------------       -----------------

Net cash to investing activities                                          (108,367 )              (348,150 )

         CASH FLOWS FROM FINANCING ACTIVITIES:
            Shares re-acquired                                                 3,408                (41,500)
            Net proceeds from issuance of stock                          (9,838,795)                  80,000
            Net proceeds from issuance of debt                               519,460                  48,647
                                                                   ---------------       --   --------------

Net cash from financing activities                                      (9,315,927 )                   7,147
-------------- -----------------
</TABLE>

               The accompanying notes are an integral part of the
                              financial statements.



                                       F-7

<PAGE>




                           GATEWAY DISTRIBUTORS, LTD.
                CONSOLIDATED STATEMENT OF CASH FLOWS - CONTINUED
                                   (UNAUDITED)

<TABLE>
<CAPTION>
<S>                                                          <C>                 <C>

                                                                SIX MONTHS ENDED
                                                                ---------------------------------
                                                                        JUNE 30,         JUNE 30,
                                                                       2002              2001

         NET INCREASE (DECREASE) IN
            CASH EQUIVALENTS                                              10,858          103,201

         CASH AND CASH EQUIVALENTS -
             beginning of period                                          12,121            2,625
                                                                 ---------------    -------------

         CASH AND CASH EQUIVALENTS -
             end of period                                         $      22,979    $      105,826
                                                                   =============    ==============





                             SUPPLEMENTAL DISCLOSURE

                                                                SIX MONTHS ENDED
                                                                ----------------------------------
                                                                JUNE 30,                JUNE 30,
                                                                2002                     2001
                                                            -------------------     --------------

         CASH PAID FOR INTEREST                                    $      66,577    $       42,570
                                                                   ===============     ===========





                   NON CASH INVESTING AND FINANCING ACTIVITIES

         STOCK ISSUED FOR SERVICES                                  $      330,344   $              -
                                                                    ==============   ====================
</TABLE>

               The accompanying notes are an integral part of the
                             financial statements.



                                       F-8

<PAGE>



                           GATEWAY DISTRIBUTORS, LTD.
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 2002

              NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:


 The consolidated balance sheet as of June 30, 2002 and the related consolidated
statements of operations,  changes in stockholders'  equity (deficit),  and cash
flows for the six months  ended  June 30,  2002 and 2001 are  unaudited.  In the
opinion of management,  the  information  reflects all  adjustments  (consisting
solely  of  normal  recurring   adjustments)   that  are  necessary  to  a  fair
presentation of the financial statements.  The results of operations for the six
months  ended  June 30,  2002 and 2001  are not  necessarily  indicative  of the
results to be expected for the whole year.

                         NOTE 2 - BUSINESS COMBINATION:


  On  January  11,  2001,  the  Company  obtained   13,448,660  shares  of  TRSG
 Corporation  ("TRSG") , a publicly held company,  in exchange for substantially
 all of the assets  and  operations  of the  Company.  On  January 4, 2002,  the
 Company obtained an additional  8,000,000 shares of TRSG Corporation (TRSG). As
 of March,  2001, this resulted in a 51% ownership in TRSG and  consolidation of
 the  entity  into  the  Company's   financial   statements.   All   significant
 intercompany  balances and transactions  have been eliminated.  The transaction
 was accounted for under the purchase  method of accounting,  therefore,  assets
 and liabilities  were recorded on their fair values at the date of acquisition.
 Operating  results have been included in the Company's  statement of operations
 from the date of acquisition.  The Company recorded $350,000 in costs in excess
 of net assets acquired, which were being amortized over 15 years. An impairment
 loss was recognized at June 30, 2002 for these costs. Refer to Note 8.

         NOTE 3 - ADDITIONAL SUBSIDIARY HOLDINGS


  On July 1, 2002, the Company received an additional  45,000,000 shares of TRSG
 for services rendered. The Company at the time of this filing owns 71% of TRSG.

                          NOTE 4 - SETTLEMENT PAYABLE:


  On December 29, 2000, TRSG obtained a settlement on the judgment against it of
 $618,970 for $50,000.  The  obligation  was satisfied and resulted in a gain on
 settlement  of $568,970 for the period ended March 31, 2001 and is reflected in
 the financial statement for the six months ended June 30, 2001.

                             NOTE 5 - NOTES PAYABLE:


  At June 30,  2002,  the  Company  had  $252,150  of notes  payable  to certain
 individuals. Both notes bear interest at a fixed rate of 15%, are unsecured and
 due within one year.

                          The accompanying notes are an integral part of the
financial statements.



                                       F-9

<PAGE>



                           GATEWAY DISTRIBUTORS, LTD.
                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
                                  JUNE 30, 2002


                    NOTE 6 - NOTE PAYABLE - RELATED PARTIES:


  At June 30, 2002,  the Company had a $1,141,459  note payable to  stockholders
 and related parties. There is no schedule for repayments of these notes at June
 30, 2002.

                   NOTE 7 - SALE OF A & A MEDICAL SUPPLY CO.:


  On February 1, 2002, the Company sold its medical  supply  division in Utah. A
 summary of the transaction is as follows:

                              Assets sold               $619,817
                      Liabilities assumed by buyer       316,712
                                                       ---------

                                                         303,105
           s price - cash to be received over
                            term of agreement            260,000
                                                       ---------

                        Loss on sale of division        $ 43,105
                                                        ========


  At June 30, 2002, other  receivables  include an amount of $126,000 related to
 this sale.

         NOTE 8 -    IMPAIRMENT OF GOODWILL:

               Goodwill is assigned to specific reporting units and is reviewed
               for possible impairment at least annually or more frequently upon
               the occurrence of an event or when circumstances indicate that a
               reporting unit's carrying amount is greater than its fair value.
               During 2002, the company determined that the carrying amount
               exceeded it's fair value, which was estimated based on the
               present value of expected future cash inflows.

               Accordingly, a goodwill impairment loss of $1,203,953 was
recognized.

               Changes in the carrying amount of goodwill during 2002 are
summarized below:

                  Balance, January 1, 2002                  $ 1,245,925
                  Amortization expense - goodwill              (41,972)
                  Impairment loss                           (1,203,953)
                                                           ------------

                      Balance, June 30, 2002         $           -
                                                     ==================

               The accompanying notes are an integral part of the
financial statements.



                                      F-10

                                     <PAGE>



                           GATEWAY DISTRIBUTORS, LTD.
                    NOTES TO FINANCIAL STATEMENTS - CONTINUED
                                  JUNE 30, 2002


NOTE 9 - ADDITIONAL FOOTNOTES INCLUDED BY REFERENCE:

               Except as indicated in Notes above, there have been no other
               material changes in the information disclosed in the notes to the
               financial statements included in the Company's Annual Report on
               Form 10-KSB for the year ended December 31, 2001. Therefore,
               these footnotes are included by reference. In addition, the
               footnotes for inventory, property and equipment and amortization
               of Gateway Distributors, LTD. December 31, 2001 10-KSB should
               also be referred to due to the acquisition per Note 2.








               The accompanying notes are an integral part of the
                             financial statements.



                                      F-11

<PAGE>



         ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATION

         General

         This "Management's Discussion and Analysis of Financial Condition and
         Results of Operation" should be read in conjunction with the Company's
         unaudited financial statements, the notes thereto and the other
         financial data included elsewhere herein. This section includes
         forward-looking statements which involve risks and uncertainties which
         are based upon the Company's beliefs, as well as assumptions made by
         and information currently available to the Company. The Company's
         actual results may differ materially from the results predicted by such
         forward-looking statements due to various factors, including, but not
         limited to, those risks and uncertainties which are discussed below.

         Results Of Operations

         The Company's results of operations for the periods described below are
         not necessarily indicative of results of operations for future periods,
         which depend upon numerous factors including the Company's ability in
         the future to enter new markets and introduce additional and new
         products into its current markets.

         Three and six months ending June 30, 2002 and 2001

         Sales for the three months ended June 30, 2002 decreased to $279,380 ,
         as compared to sales of $393,488 in the three months ended June 30,
         2001. The decrease resulted from a lack of inventory to support
         customer demand.

         Sales for the six months ended June 30, 2002 decreased to $559,324, as
         compared to sales of $1,097,285 in the six months ended June 30, 2001.
         The decrease resulted from a lack of inventory to support customer
         demand.

         Gross profit of $270,619 for the three months ended June 30, 2002, was
         $42,329 lower than the gross profit of $312,948 for the three months
         ended June 30, 2001. As a percentage of sales, gross profit for the
         three month period ended June 30, 2002, as compared to the same period
         in 2001 decreased approximately three percent as a result of a lack of
         inventory to support customer demand and the resultant loss of sales
         during the period.

         Gross profit of $442,222 for the six months ended June 30, 2002, was
         $433,559, or 49 % lower than the gross profit of $875,781 for the six
         months ended June 30, 2001. As a percentage of sales, gross profit for
         the six month period ended June 30, 2002, as compared to the same
         period in 2001 decreased approximately two and one half percent. The
         decrease in gross profit as a percentage of sales primarily resulted
         from a lack of inventory to support customer demand and the resultant
         loss of sales during the period.

                                        4

<PAGE>



         General, and administrative expenses were $794,045 for the three months
         ended on June 30, 2002, and $555,630 for the comparable period in 2001,
         an increase of $238,415. The increase in general and administrative
         expenses resulted from an increase in payments to outside consultants.

         General, and administrative expenses were $1,507,504 for the six months
         ended on June 30, 2002, and $1,359,802 for the comparable period in
         2001, an increase of $147,702.

         Operating loss was $523,426 during the three months ended on June 30,
         2002, compared to an operating loss of $242,682 for the comparable
         three months in 2001. The Company's operating loss increased $280,764
         for the three months ended June 30, 2002 because of higher general and
         administrative costs and reduced sales.

         Operating loss was $1,065,282 during the six months ended on June 30,
         2002, compared to an operating loss of $484,021 for the comparable six
         months in 2001. The Company's operating loss increased $581,261for the
         six months ended June 30, 2002 because of a 50% drop in 6 month sales
         and an increase in overhead costs.

         Liquidity and Capital Resources

         The Company had a net working capital deficit of $6,459,710 at June 30,
         2002, as compared to a deficit of $5,749,072 as of December 31, 2002.

         Net stockholders' deficit in the Company was $6,168,417 as of June 30,
         2002, compared to a stockholder's deficit of $5,280,688 as of December
         31, 2001. The increase in net stockholder's deficit is due to an
         increase in operating losses coupled with an impairment of goodwill.

         Cash flows generated by operations were $9,435,152 for the six months
         ended June 30, 2002 as compared to cash flows used in operations of
         $444,204 for the comparable period in 2001. The increase is largely due
         to issuances of stock for services.

         Cash flows used in investing activities were $108,367 for the six
         months ended June 30, 2002 and $348,150 for the six months ended June
         30, 2001. The drop is due to advances made to related parties.

         Cash flows used in financing activities were $9,315,927 for the six
         months ending June 30, 2002, as compared to $7,147 generated by
         financing activities for the comparable period in 2001.

         Going Concern

         The Company's ability to continue as a going concern is an issue raised
         as a result of an accumulated deficit of $17,342,729 as of June 30,
         2002 as well as the current period loss of $846,293 and a working
         capital deficit of $6,459,710. The Company's ability to continue as a
         going concern is subject to the ability of the Company to operate at a
         profit and /or obtaining the necessary funding from outside sources.
         Management is committed to taking the necessary steps to ensure the
         Company remains a going concern.

                                        5

<PAGE>



         Management's plan to address the Company's ability to continue as a
         going concern includes: (1) obtaining additional funding from the sale
         of the Company's securities; (2) increasing sales; (3) obtaining loans
         and grants from various financial institutions where possible. Although
         management believes that it will be able to obtain the necessary
         funding to allow the Company to remain a going concern through the
         methods discussed above, there can be no assurances that such methods
         will prove successful.

         Stock Transactions For Services

         As a result of the Company's limited cash position, it used the
         issuance of its common stock to compensate officers, directors,
         employees, consultants and other professionals. The following is a
         description of those transactions:

  On  April  8,  2002,  the  board  of  directors  authorized  the  issuance  of
 475,000,000 shares of restricted common stock to Neptune Communications,  Inc.,
 of which Florian Ternes is the president,  for communication services rendered.
 Mr. Ternes is also an officer and a director of the Company.

         On April 15, 2002, the board of directors authorized the issuance of
         50,000,000 shares of restricted common stock to Suburban Capital
         Corporation pursuant to a purchase agreement dated the same.

         On April 28,2002 the board of directors authorized the issuance of
         50,000,000 shares of common stock registered under an effective Form
         S-8 registration statement to Paul Munnich for payment of consulting
         services provided to the Company.

         On April 29, 2002, the Company issued 40,000,000 shares of common stock
         to Coolman International for services rendered two years prior to the
         date of issuance.

         On April 29, 2002, the Company issued 1,000,000 shares of common stock
         registered under an effective Form S-8 registration statement to Mark
         Coolman for services provided to the Company.

         On May 21, 2002, the board of directors authorized the issuance of
         300,000,000 shares of restricted common stock to Gateway Distributors,
         Ltd. to be held by the Company as security for a $35,000 promissory
         note dated May 24, 2002, payable to Suburban Capital Corporation.

         On June 7, 2002, the Company entered into a consulting agreement with
         Paul Munnich whereby Mr. Munnich agreed to provide the Company with
         advice concerning management, marketing, consulting, strategic
         planning, corporate organization and structure, and marketing
         consulting services through April 30, 2003. In exchange for these
         services, the Company agreed to issue to Mr. Munnich 500,000,000 shares
         of the common stock of the Company in reliance upon an effective Form
         S-8 registration statement.

  On June 8, 2002, the Company signed an Agreement with Neptune  Communications,
 Inc. a company of which Florian Ternes is the president.  Mr. Ternes is also an
 officer and a director of the Company.  The agreement  provides for the payment
 of compensation for prior services provided by Neptune to the

                                        6

<PAGE>



         Company, these services included, but were not limited to website,
         acquisitions, manufacturing representations and negotiation of raw
         material prices. The Company agreed to payment of the claims for
         services and as full and final compensation for those services the
         transfer of 5,300,000,000 shares of restricted common stock.

         On June 11, 2002, the Company issued 200,000,000 shares of common stock
         to Suburban Capital Corporation to be held as security for a $40,000
         convertible note dated June 10, 2002, payable to Suburban Capital
         Corporation.

         On June 11, 2002, the Company authorized the issuance of 320,000,000
         shares of common stock to Matt Swan. The shares were issued pursuant to
         a settlement agreement dated June 7, 2002, for services rendered two
         years prior to the date of authorization.

         On June 22, 2002, the Company issued 200,000,000 shares of restricted
         common stock to Matt Swan for auditing and tax services rendered

         On June 24, 2002, the board of directors authorized the issuance of
         3,500,000,000 shares of common stock registered under an effective Form
         S-8 registration statement to Paul Munnich for payment of consulting
         services as an employee of Suburban Capital Corporation pursuant to a
         consulting agreement dated June 4, 2002.

                                     PART II

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

         On April 8, 2002, the board of directors authorized the issuance of
         475,000,000 shares of restricted common stock to Neptune
         Communications, Inc. for services rendered . The Company issued the
         shares pursuant to section 4(2) of the Securities Act of 1933 in an
         isolated private transaction by the Company which did not involve a
         public offering. The Company made this transfer based on the following
         factors: (1) The issuance was an isolated private transaction by the
         Company which did not involve a public offering; (2) there was only one
         offeree who was issued stock; (3) the offeree has not resold the stock
         but has continued to hold it since the date of issue; (4) there were no
         subsequent or contemporaneous public offerings of the stock; (5) the
         stock was not broken down into smaller denominations; and (6) the
         negotiations for the sale of the stock took place directly between the
         offeree and the Company.

         On April 15, 2002, the board of directors authorized the issuance of
         50,000,000 shares of restricted common stock to Suburban Capital
         Corporation pursuant to a Purchase Agreement dated the same. The
         Company issued the shares pursuant to section 4(2) of the Securities
         Act of 1933 in an isolated private transaction by the Company which did
         not involve a public offering. The Company made this transfer based on
         the following factors: (1) The issuance was an isolated private
         transaction by the Company which did not involve a public offering; (2)
         there was only one offeree who was issued stock pursuant to the
         purchase agreement; (3) the offeree has not resold the stock but has
         continued to hold it since the date of

                                        7

<PAGE>



         issue; (4) there were no subsequent or contemporaneous public offerings
         of the stock; (5) the stock was not broken down into smaller
         denominations; and (6) the negotiations for the sale of the stock took
         place directly between the offeree and the Company.

         On May 21, 2002, the board of directors authorized the issuance of
         300,000,000 shares of restricted common stock to Gateway Distributors,
         Ltd. to be held by the Company as security for a $35,000 promissory
         note dated May 24, 2002, payable to Suburban Capital Corporation. The
         Company issued the shares pursuant to section 4(2) of the Securities
         Act of 1933 in an isolated private transaction by the Company which did
         not involve a public offering. The Company made this transfer based on
         the following factors: (1) The issuance was an isolated private
         transaction by the Company which did not involve a public offering; (2)
         there was only one offeree who was issued stock to be held as security
         for the May 24, 2002 promissory note; (3) the offeree has not resold
         the stock but has continued to hold it since the date of issue; (4)
         there were no subsequent or contemporaneous public offerings of the
         stock; (5) the stock was not broken down into smaller denominations;
         and (6) the negotiations for the sale of the stock took place directly
         between the offeree and the Company.

         On June 3, 2002, the board of directors authorized the issuance of
         5,300,000,000 shares of restricted common stock to Neptune
         Communication, Inc. for services rendered. The Company issued the
         shares pursuant to section 4(2) of the Securities Act of 1933 in an
         isolated private transaction by the Company which did not involve a
         public offering. The Company made this transfer based on the following
         factors: (1) The issuance was an isolated private transaction by the
         Company which did not involve a public offering; (2) there was only one
         offeree who was issued stock; (3) the offeree has not resold the stock
         but has continued to hold it since the date of issue; (4) there were no
         subsequent or contemporaneous public offerings of the stock; (5) the
         stock was not broken down into smaller denominations; and (6) the
         negotiations for the sale of the stock took place directly between the
         offeree and the Company.

         On June 22, 2002, the board authorized the issuance of 200,000,000
         shares of restricted common stock to Matt Swan as payment for auditing
         and tax services rendered. The Company issued the shares pursuant to
         section 4(2) of the Securities Act of 1933 in an isolated private
         transaction by the Company which did not involve a public offering. The
         Company made this transfer based on the following factors: (1) The
         issuance was an isolated private transaction by the Company which did
         not involve a public offering, being made to a single individual for
         services; (2) there was only one offeree who was issued stock; (3) the
         offeree has not resold the stock but has continued to hold it since the
         date of issue; (4) there were no subsequent or contemporaneous public
         offerings of the stock; (5) the stock was not broken down into smaller
         denominations; and (6) the negotiations for the sale of the stock took
         place directly between the offeree and the Company.

         ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         The Company as authorized by the resolutions of the Board of Directors
         and the written consent of a holder of in excess of 50% of the common
         stock of the Company authorized an amendment to Gateway's Articles of
         Incorporation increasing Gateway's authorized common shares from
         1,000,000,000 shares of $0.001 par value common stock to 25,000,000,000
         shares of $0.001 par value common stock.

                                        8

<PAGE>



         The Board of Directors and a person owning the majority of the
         outstanding voting securities of Gateway have unanimously adopted,
         ratified and approved resolutions to effect the recapitalization. No
         other votes are required or necessary. The amendment was filed and
         became effective on May 31, 2002.

         The Company did not comply with the notice requirements under Section
         14 of the Securities and Exchange Act of 1934. The Company's majority
         shareholder effected the transaction with the board's consent prior to
         a Definitive 14C being mailed to the shareholders of record. The
         Company has made an effort to correct the error by mailing notice to
         its shareholders of record subsequent to the amendment, noticing the
         increase in authorized shares.

         ITEM 5. OTHER INFORMATION

         Upon reviewing the Company's stock ledgers it became apparent that the
         Company issued in excess of six billion shares for services in reliance
         upon the June 25, 2002, Form S-8 when only five billion shares were
         authorized under the Employee Benefit Plan ("Plan").

         In an effort to correct the over issuance error, the Company on August
         16, 2002, amended the Form S-8 dated June 25, 2002, to increase the
         number of shares under the Company's Plan to fifteen billion by
         registering an additional ten billion shares. The Company's belief is
         that no shares over the original five billion shares registered under
         the Form S-8 filed on June 25, 2002, were sold into the open market.

         In addition, the Company's board of directors also realized that in
         some instances it issued in excess of 10% of the Company's issued and
         outstanding shares to certain consultants. The Company relied upon Form
         S-8 to cover such issuances in compliance with Section 5 of the
         Securities Act of 1933. None of the consultants were control persons or
         affiliates of the issuer as those terms are defined under the
         Securities Exchange Act of 1934.

         Nonetheless, the Company's board of directors has been informed that
         ownership of 10% or more of a Company's issued and outstanding shares
         is a strong factor which may indicate control. The existing Form S-8
         registration statement would not cover the resale of control shares.
         Accordingly, an exemption would have to be available for such resales
         in order to comply with Section 5 of the Securities Act of 1933.

         The board of directors has reviewed all the transactions involving
         these consultants and is satisfied with the level of service provided
         by such consultants. Furthermore, the board of directors believes that
         the steps it has taken are sufficient to correct the inadvertent errors
         it has made.

         Subsequent Transactions

         On July 5, 2002, the board of directors authorized the issuance of
         1,000,000,000 shares of restricted common stock to Gateway
         Distributors, Ltd. to be held by the Company as security of a $25,000
         promissory note dated June 21, 2002, to Suburban Capital Corporation.
         The Company issued the shares pursuant to section 4(2) of the
         Securities Act of 1933 in an isolated private transaction by the
         Company which did not involve a public offering. The Company made this
         transfer based on the following factors:

                                        9

<PAGE>



         (1) The issuance was an isolated private transaction by the Company
         which did not involve a public offering; (2) there was only one offeree
         who was issued stock; (3) the offeree has not resold the stock but has
         continued to hold it since the date of issue; (4) there were no
         subsequent or contemporaneous public offerings of the stock; (5) the
         stock was not broken down into smaller denominations; and (6) the
         negotiations for the sale of the stock took place directly between the
         offeree and the Company.

         On July 22, 2002, the board of directors authorized the issuance of
         5,000,000,000 shares of restricted common stock to Neptune
         Communication, Inc. for consulting services rendered. The Company
         issued the shares pursuant to section 4(2) of the Securities Act of
         1933 in an isolated private transaction by the Company which did not
         involve a public offering. The Company made this transfer based on the
         following factors: (1) The issuance was an isolated private transaction
         by the Company which did not involve a public offering; (2) there was
         only one offeree who was issued stock; (3) the offeree has not resold
         the stock but has continued to hold it since the date of issue; (4)
         there were no subsequent or contemporaneous public offerings of the
         stock; (5) the stock was not broken down into smaller denominations;
         and (6) the negotiations for the sale of the stock took place directly
         between the offeree and the Company.

         On July 29, 2002, the board of directors authorized the issuance of
         1,500,000,000 shares of common stock to Donald Hansen in exchange for
         extinguishment of a debt.

         ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)   Exhibits Exhibits required to be attached by Item 601 of
               Regulation S-B are listed in the Index to Exhibits on page 12 of
               this Form 10-QSB, and are incorporated herein by this reference.

         (b)   Reports on Form 8-K.   No reports were filed on Form 8-K
 during the quarter.




                                       10

<PAGE>



                                                         SIGNATURES

               In accordance with the requirements of the Exchange Act, the
         registrant caused this report to be signed on its behalf by the
         undersigned, thereunto duly authorized, this 23th day of August 2002.


         Gateway Distributors, Ltd.


         By:        /s/ Rick Bailey
               ------------------------------------------
                  Rick Bailey
         Its:   President, Chief Executive Officer and Director

   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 Quarterly Report of Gateway Distributors,
               Ltd.. (the" Company") on Form 10-QSB for the period ending June
               30, 2002 as filed with the Securities and Exchange Commission on
               the date hereof (the"Report"), I, Rick Bailey, sole Executive
               Officer of the Company, certify, pursuant to 18 U.S.C. S 1350, as
               adopted pursuant to S 906 of the Sarbanes-Oxley Act of 2002,
               that:

                  (1) The Report complies with the requirements of section 13
                  (a) or 15 (d) of the Securities
                  Exchange Act of 1934; and

                  (2) The financial information contained in the Report fairly
                  presents, in all material respects, the financial condition
                  and result of operations of the Company.


                 /s/ Rick Bailey
                ---------------------------------
               Rick Bailey
               Chief Executive Officer /  Chief Financial Officer
               August 23, 2002




                                       11

<PAGE>





<TABLE>
<CAPTION>
<S><C>


                                                     INDEX TO EXHIBITS


         Exhibit    Page                                            Description

         2.1                          * Agreement and Plan of Merger as of April
                                      10, 1998 (Incorporated by reference from
                                      Form 10-SB/A filed December 15, 1999).

         3.1                          * Amended and Restated Articles of
                                      Incorporation of the Company (Incorporated
                                      by reference from Form 10-SB/A filed
                                      December 15, 1999).

         3.1(i)         14            Amendment to the Articles of Incorporation of the Company, increasing the
                                      number of authorized shares of common stock, filed May 31, 2002.

         3.2            *             Bylaws of the Company, as amended (Incorporated by reference from Form
                                      10-SB/A filed December 15, 1999).

         4.1            *             Specimen Common Stock Certificate (Incorporated by reference from Form
                                      10-SB/A filed December 15, 1999).

         4.2            *             Specimen 12% Convertible Note (Incorporated by reference from Form 10-
                                      SB/A filed December 15, 1999).
</TABLE>

         Material Contracts
<TABLE>
<CAPTION>
<S><C>



         10(i)    15             Purchase Agreement dated April 15,2002, between the Company and
                                 Suburban
                                 Capital Corporation for 50,000,000 shares.

         10(ii)   17             Settlement Agreement dated April 24, 2002, between the Company and Coolman
                                 International Ltd. for services rendered.

         10(iii ) 21             Promissory Note dated May 24, 2002, from the Company payable to Suburban
                                 Capital Corporation requiring the issuance of 300,000,000 shares to be held by the
                                 Company as security for the note.


                                       12

<PAGE>



         10(iv)   29             Consulting Agreement dated June 7, 2002, between the Company and Paul Munnich
                                 for the issuance of 500,000,000 shares for consulting services provided to the
                                 Company.

         10(v)      35           Settlement Agreement dated June 7, 2002, between the Company and Matt Swan for
                                 the issuance of 320,000,000 for services provided to the Company.

         10(vi)     39           Consulting Contract dated June 8, 2002, between the Company and Neptune
                                 Communications for the issuance of 5,300,000,000 shares for services provided to
                                 the Company.

         10(vii)    42           Promissory Note dated June 10, 2002, from the Company payable to Suburban
                                 Capital Corporation requiring the issuance of  200,000,000 shares to held by
                                 Suburban as security for the note.

         10(viii)   48           Promissory Note dated June 21, 2002, from the Company payable to Suburban
                                 Capital Corporation requiring the issuance of 1,000,000,000 shares to held by the
                                 Company as security for the note.

         10(ix)     54           Letter Agreement dated July 22, 2002, between the Company and Neptune
                                  Communications, Inc. to extend the consulting relationship between the two
                                 companies for a period of five years for 5,000,000,000 shares.

         10(x)      65           Settlement Agreement dated July 24, 2002, between the Company and Donald Gary
                                 Hansen for the issuance of 1,500,000 shares for consulting services provided to the
                                 Company.

</TABLE>

         * Incorporated by reference as noted above.



                                       13

<PAGE>



         Exhibit 3.1(i)
                            CERTIFICATE OF AMENDMENT
                                       TO
                            ARTICLES OF INCORPORATION
                                       FOR
                              GATEWAY DISTRIBUTORS
                           A Nevada Profit Corporation


1. Name of Corporation: Gateway
Distributors, Ltd.

2. The articles have been amended as
follows:

  To increase  the  authorized  shares of $0.001 par value  common  voting stock
 ("Shares") from  1,000,000,000  to  25,000,000,000  shares and to authorize the
 Board of Directors of the Corporation to issue same on such terms and condition
 as the Board of Directors shall determine from time to time.

3. Date of Amendment: May 28, 2002.

4. The Amendment was approved by the Boar of Directors and by holders of common
stock representing more than 70% of the issued and outstanding shares on May 28,
20002.

                  Officer Signature:


                  /s/ Rich Bailey_________________
                  ---------------
                  Rich Bailey, President of the Company

                                       14

<PAGE>










                                  Exhibit 10(i)
                               PURCHASE AGREEMENT



  This  Purchase  Agreement  (the  "Agreement"),  dated April 15, 2002 is by and
 between SUBURBAN CAPITAL CORP. (the "Buyer"),  and Gateway  Distributors,  Ltd.
 (the

                             "Seller"), as follows:

     1.Buyer agrees to purchase and seller agrees to sell 50,000,000 shares
           of Gateway Distributors, Ltd common stock for the price of
                  $125, 000 and subject to the following terms.

                    2.Buyer will send to Seller the purchase
                        price by wire transfer according
                        to wire instructions provided by
                                     Seller.

       3.Upon Paying the purchase price Buyer will become the owner of the
       Shares and will enjoy all rights attendant to the ownership of the
           Shares, including but not limited to, the right to transfer
       encumbers, hypothecate, assign or otherwise dispose of the Shares.

     4.In the event that additional documents are required for the transfer
      of the Shares, Seller agrees to fully cooperate with the transfer of
       the Shares and sign any and all documents necessary to transfer the
     Shares to Buyer and to provide any documentation that may be required,
                                   such as an
                            acceptable legal opinion.

           5.In the event the Buyer does not reach the aggregate price of
         $500,000 after liquidation the shares within one year from the date of
         this Agreement, Seller agrees to issue additional shares
                                       until the aggregate price is reached.

        6.The parties agree that tine is of the essence in this contract and
         that the reasonable measure of damages in the event that Seller does
         not transfer the shares to Buyer as described herein is the
              highest Closing price between the day Buyer transferred the
         purchase price described in Paragraph 1 of this Agreement and the date
         that any action brought by Buyer to enforce its rights
                                        under this agreement goes to trial.

         7.The              invalidity of unenforceability of any of the rights
                            or remedies herein shall not in any way affect any
                            of the other rights or remedies herein provided.

  8.The parties acknowledge that this agreement constitutes a sale of stock with
 an option to purchase and that it is not a secured  loan.  Seller  acknowledges
 that the Option  Purchase Price is fair and reasonable  taking into account the
 market risks assumed by Buyer and the stock price's potential volatility.

     9.This Agreement is being delivered and is intended to be performed in
       Du page County, Illinois and venue for any action arising hereunder
          shall be in such county and Seller expressly consents to the
       jurisdiction of that Court for resolution of any disputes that may
                           arise. This Agreement shall

  be construed and enforced in  accordance  with and governed by the laws of the
 State of Illinois, and to the extent applicable,  the law of the United States.
 In the event that Buyer resorts to litigation  relating to the rights  afforded
 herein, Seller shall be responsible for the costs incurred by

                                       15

<PAGE>



              Buyer associated with any such litigation, including
                           reasonable attorney fees.

        10.This Agreement embodies the entire agreement and understanding
        between the parties hereto and supersedes all prior agreement and
              understandings relating to the subject matter hereof.



         SELLER: Gateway Distributors, LtdBuyer: Suburban Capital Corp.

                    By: /s/ Rick BaileyBy: /s/Frank Custable

                      Print Name / TitlePrint Name / Title

                         Date: 24 April 02Date: 04/24/02
                              ----------- --------





                                       16

<PAGE>



         Exhibit 10(ii)

                                                    SETTLEMENT AGREEMENT

         THIS SETTLEMENT AGREEMENT is entered into by and between Gateway
         Distributors LTD ("GD") and Coolman International LTD ("Consultant")
         effective as of April 24, 2002. FOR GOOD AND VALUABLE CONSIDERATIONS
         RECEIVED, AND THE MUTUAL PROMISES HEREIN, THE PARTIES AGREE AS FOLLOWS:
         1. DISPUTE
         It is the position of Consultant that compensation in the form of
         shares of GD were due to the Consultant, as consideration for being
         engaged to supply services for or on behalf of GD, over two years prior
         to this date. It is the position of the Company that the shares are in
         complete settlement of any claim of the Consultant for compensation or
         money owed by the Company and in avoidance of further dispute and
         litigation and relate back to the services rendered over two years ago.
         2. SETTLEMENT
         The parties hereby agree that they have settled any and all claims one
         has against the other, including any affiliates of a party, such as
         officers, Directors, and shareholders, by the execution and performance
         of this Agreement. In connection herewith, the parties agree that, on
         or about this date:
a. GD a total of 40,000,000 shares of common stock
         of GD and the parties agree that these shares
         effectively should have been issued on April 1, 2000 will supply
consultant. b. Any and all work product, documents,
 and         materials, data, relating to Consultants work in the
         possession or control of Consultant or GD shall be retained by GD;

c.

  Consultant  agrees it has no ownership right,  title or claim of any nature to
 GD or to its assets  other  than as to the shares  above.

d.  Consultant  will
 execute any reasonable additional documents as requested by GD.


                                       17

<PAGE>



  3.  RELEASE The parties  agree to release  hereby one another from any and all
 obligations  of one  to  the  other,  except  to  perform  this  Agreement.  4.
 MISCELLANEOUS  PROVISIONS A. Gender.  Wherever the context shall  require,  all
 words  ------  herein in the  masculine  gender  shall be deemed to include the
 feminine or neuter gender, all singular words shall include the plural, and all
 plural shall include the  singular.  B.  Severability.  If a court of competent
 jurisdiction, the ------------ remainder of this Agreement, and the application
 of  such   provision  in  other   circumstances   hereof  deem  any   provision
 unenforceable shall not be affected thereby. C. Further  Cooperation.  From and
 after  the  date of this  -------------------  Agreement,  each of the  parties
 hereto agrees to execute  whatever  additional  documentation or instruments as
 are  necessary  to carry out the intent and  purposes of this  Agreement  or to
 comply with any law. D. Waiver.  No waiver of any  provision of this  Agreement
 ------  shall be valid unless in writing and signed by the waiving  party.  The
 failure  of any  party at any time to insist  upon  strict  performance  of any
 condition,  promise,  agreement or understanding set forth herein, shall not be
 construed  as a waiver  or  relinquishment  of any  other  condition,  promise,
 agreement  or  understanding  set forth  herein or of the right to insist  upon
 strict   performance   of  such  waived   condition,   promise,   agreement  or
 understanding  at any other time.  E.  Expenses.  Except as otherwise  provided
 herein,  each  --------  party hereto shall bear all expenses  incurred by each
 such party in connection  with this  Agreement and in the  consummation  of the
 transactions contemplated hereby and in preparation thereof. F. Amendment. This
 Agreement may only be amended or ---------  modified at any time, and from time
 to time, in writing,  executed by the parties hereto.  G. Notices.  Any notice,
 communication,  request,  reply or -------  advice  (hereinafter  severally and
 collectively  called  "Notice") in this  Agreement  provided or permitted to be
 given, shall be made or be served by delivering

                                       18

<PAGE>



     same by overnight mail or by delivering the same by a hand-delivery
     service, such Notice shall be deemed given when so delivered.
H. Captions. Captions herein are for the convenience of th
--------
parties and shall not affect the interpretation of
     this Agreement.
I. Counterpart Execution. This Agreement may be executed i
---------------------
     two or more counterparts, each of which shall
     be deemed an original, but all of which together shall constitute one and
     the same instrument and this Agreement may be executed by fax.
J. Assignment. This Agreement is not assignable without th
----------
     written consent of the parties.
K. Parties in Interest. Provisions of this Agreement shall
-------------------
     be binding upon and inure to the benefit of and be
     enforceable by the parties, their heirs, executors, administrators, other
     permitted successors and assigns, if any. Nothing contained in this
     Agreement, whether express or implied, is intended to confer any rights or
     remedies under or by reason of this Agreement on any persons other than the
     parties to it and their respective successors and assigns.
L. Entire Agreement. This Agreement constitutes the entire
----------------
     agreement and understanding of the parties on
     the subject matter hereof and supersedes all prior agreements
and understandings.
M. Construction. This Agreement shall be governed by the
------------
     laws of Toronto without reference to conflict of
     laws and the venue for any action, claim or dispute in respect of this
     Agreement shall be such court of competent jurisdiction as is located in
     Toronto. The parties agree and acknowledge that each has reviewed this
     Agreement and the normal rule of construction that agreements are to be
     construed against the drafting party shall not apply in respect of this
     Agreement given the parties have mutually negotiated and drafted this
     Agreement.
N. Cooperation. The parties hereto agree to cooperate with
-----------
     one another in respect of this Agreement,
     including reviewing and executing any document necessary for the
     performance of this Agreement, to comply with law or as reasonably
     requested by any party hereto, or legal counsel to any party hereto.

                                       19

<PAGE>



O. Independent Legal Counsel. The parties hereto agree tha
-------------------------
         (i) each has retained independent legal
         counsel in connection with the preparation and of this Agreement, (ii)
         each has been advised of the importance of retaining legal counsel, and
         (iii) by the execution of this Agreement, each party who has not
         retained independent legal counsel acknowledges having waived such
         right. IN WITNESS WHEREOF, the parties have executed this Agreement on
         the date above written.
The "Company"
Gateway Distributors
A Nevada Corporation
By: /s/ Rick Bailey
--------------------------
Name: Rick Bailey
Title: President / CEO
         The "Consultant"
         Coolman International
         By: _/s/ Mark Coolman______
              ----------------
         Name: Mark Coolman
         Title:    President
                                        t
                                        t

                                       20

<PAGE>



Exhibit 10(iii)
                                 PROMISSORY NOTE
$35,000.00 Addison, IL Date: May 24, 2002 FOR VALUE RECEIVED, the undersigned
RICK BAILEY ON BEHALF OF GATEWAY DISTRIBUTORS, LTD., as maker(s) (hereinafter
called "Maker", whether one (1) or more), promises to pay to the order of
SUBURBAN CAPIAL CORP., as payee (hereinafter called "Payee", which term shall
also refer to any subsequent owner or holder of this Note), the principal sum of
$35,000.00, together with interest thereon accruing on any and all principal
amounts from time to time remaining unpaid, at the term rate hereinafter stated,
said principal and interest being payable in lawful money of the United States
of America at the address, except on past due sums, at a term rate equal to 50%.
Principal and interest of this Note shall be due and payable as follows:
Principal, plus accrued interest thereon, shall be due and payable 365 days from
the date hereof. Payment shall be made on or before the 12:00 p.m. (noon)
Central Time on the date due in either Certified Funds that clear the bank
account of Payee or by wire transfer received by the bank designated by Payee.
Any other mode of payment shall be unacceptable. If, for any reason a certified
check or wire transfer is not honored, any tender of such payment will be deemed
void and Payee will have available to it all remedies contained in this
Promissory Note and contained in the Security Agreement described below. A money
order shall not constitute certified funds. Only a check certified by a
financial institution shall constitute certified funds.
         Maker may prepay this Note in whole or in part at any time without
being required to pay any penalty or premium for such privilege. All payments
hereunder, whether designated as

                                       21

<PAGE>



payments of principal or interest, shall be applied first to unpaid and accrued
interest, then to the discharge of any expenses or damages for which the holder
of this Note may be entitled to receive reimbursement under the terms of this
Note, and last to unpaid principal. In the application of any prepayment of
principal as provided for in the preceding sentence, if any principal hereof is
to be paid in installments, in the absence of any written agreement between
Maker and Payee, each such prepayment shall be applied to installments of
principal in the inverse order of maturity. All past due sums, including
principal and interest of this Note, whether due as the result of acceleration
of maturity or otherwise, shall bear interest at a term rate equal to eighteen
percent (18%) from the date the payment thereof shall have become due until the
same have been discharged by payment.
         If any installment or payment of principal or interest of this Note is
not paid when due; or if both of Maker or any drawer, acceptor, endorser,
guarantor, surety accommodation party or other person now or hereafter primarily
or secondarily liable upon or for payment of this Note (each hereinafter called
an "other liable party") become insolvent (however such insolvency may be
evidenced); or if Maker or any other liable party shall file a voluntary
petition in bankruptcy or for relief under provision of any federal bankruptcy
law or similar law of any other jurisdiction; or if any involuntary petition
under any federal bankruptcy law or similar law of any other jurisdiction shall
be filed against Maker or any other liable party and such involuntary petition
is not dismissed within ninety (90) days thereafter; or if Maker or any other
liable party shall be adjudicated a bankrupt or insolvent; or if Maker of any
other liable party shall file any petition or answer seeking for itself any
arrangement, composition, winding up, liquidation, readjustment, reorganization
or dissolution under any federal bankruptcy law or any applicable present or
future law, statute or regulation of the United States, any state thereof or any
other jurisdiction, or shall

                                       22

<PAGE>



file any answer admitting the material allegations of a petition or complaint
filed against Maker or any other liable party in any such proceeding ; or if
Maker or any other liable party shall make an assignment for the benefit of
creditors; or if any proceeding, procedure or remedy supplementary to or in
enforcement of judgment shall be restored to or commenced against Maker or any
liable party, or with respect to any property of any of them; or if any
governmental authority, or any court at the instance thereof, shall take
possession of any substantial part of the property of or assume control over the
affairs or operations of Maker or any other liable party, or a receiver, trustee
or any other judicial officer shall be appointed for or take possession of all
or any substantial part of the property of, or a writ or order of attachment or
garnishment shall be issued or made against, any of the property of Maker or any
other liable party, or if Maker or any other liable party shall seek, consent to
or acquiesce in any of the foregoing; or if any Indebtedness for which Maker or
other liable party is primarily or secondarily liable shall not be paid when due
or shall become due and payable by acceleration of maturity thereof, or if any
event or condition shall occur which shall permit the holder of any such
indebtedness to declare it due and payable upon the lapse of time, giving of
notice or otherwise; or if Maker or any liable party (if other than a natural
person) shall be dissolved, wound up, liquidated or otherwise terminated, or be
a party to any merger, corporate reorganization or consolidation without the
written consent of Payee; or if Maker or any other liable party shall sell
substantially all or any integral portion of its assets without the written
consent of Payee; or if Maker or any other liable party fails to furnish
financial information requested by Payee; or if Maker or any other liable party
furnishes or has furnished any financial or other information or statements
which are misleading in any respect; or if a default occurs under or if Maker or
any other liable party violates any covenant, agreement or condition contained
in any instrument now or hereafter executed in connection with or as security
for this

                                       23

<PAGE>



Note; thereupon, at the option of Payee, this Note and any and all other
indebtedness of Maker to Payee shall become and be due and payable forthwith.
         Maker and each other liable party shall be directly and primarily,
jointly and severally, liable to any legal holder of this Note for the payment
of all sums called for hereunder. Maker and each other liable party agree:
(1) That Payee or other legal holder of
                      this Note may, at any time, and from time
                      to time, on request of or by agreement with Maker or any
                      other liable party, with or without notice to or the
                      consent of Maker or any other liable party, extend the
                      maturity of, renew, extend for any period or rearrange all
                      or any part hereof;
(2) That it will be necessary for the Paye
                      or any holder hereof, in order to enforce
                      payment of this Note, to first institute or exhaust its
                      remedies against Maker or any other liable party or to
                      enforce its rights against any security for this Note; and
         If in the event of default hereunder or under any other instrument now
or hereafter executed in connection with or as security for this Note, this Note
is placed in the proceedings or through probate, (whether or not suit is filed),
or if this Note is collected by suit or legal proceedings. Maker and each other
liable party agrees to pay the reasonable attorneys fees of Payee and the
expenses of collection in connection therewith, but in no event to exceed the
maximum amount permitted by applicable law.
         It is the intention of the parties hereto to strictly comply with and
conform to all applicable law, including usury laws. Accordingly,
notwithstanding any provision of this Note, or any

                                       24

<PAGE>



security instrument or other document, instrument or agreement evidencing,
accruing or entered into in connection with this Note or the loan transaction
evidenced hereby, it is expressly stipulated and agreed as follows:
(1) In no event shall Maker or any other
                      liable party be required to pay interest in
                      excess of the maximum non-usurious contract rate of
                      interest (determined from time to time if the applicable
                      maximum rate is a floating rate) that Payee may charge
                      Maker under applicable law in regard to which Maker would
                      be prevented successfully from raising the claim or
                      defense of usury (hereinafter called AMaximum Rate@), nor
                      under any circumstances shall the aggregate of all
                      consideration which constitutes interest under applicable
                      law and taken, reserved, charged, received, contracted
                      for, chargeable or receivable under this Note, or any
                      security instrument or other document, instrument or
                      agreement evidencing hereby exceed the maximum amount of
                      interest allowed by applicable law, and any excess
                      interest shall be deemed a mistake and canceled
                      automatically or, if theretofore paid, shall, at the
                      option of the holder of this Note, either be refunded to
                      Maker or credited on this Note or any other obligation of
                      Maker or any other liable party to the holder hereof; and
(2) In the event the maturity of this Note
                      is accelerated for any reason before the
                      due date hereof, or in the event of any prepayment hereof,
                      then such consideration that constitutes interest under
                      applicable law may never include or exceed more than the
                      maximum amount allowed by applicable law, and excess
                      interest, if any, provided for in this Note or otherwise
                      shall be canceled automatically as of the date of such
                      acceleration or prepayment, and if

                                       25

<PAGE>



                      theretofore paid, shall, at the option of the holder of
                      this Note, either be refunded to Maker or credited on this
                      Note or any other obligation of Maker or any other liable
                      party to the holder hereof.
In determination whether or not interest paid or payable exceeds the Maximum
Rate, Maker and Payee shall, to the extent permitted by applicable law, (a)
characterize any non-principal payment as an expense fee, or premium rather than
as interest, (b) exclude voluntary prepayments and effects thereof, and (c)
authorize, prorate, allocate, and spread in equal or unequal parts the total
amount of interest throughout the contemplated term of the indebtedness
evidenced by this note so that interest for the entire term does not exceed the
Maximum Rate. The laws of the State of Illinois shall apply to this Note and the
loan transaction contemplated hereby, this agreement shall be deemed to have
been executed in the state of Illinois County of Cook, and Maker expressly
consents to the jurisdiction of any Court located within the State of Illinois
in any action pertaining to this note.
Any check, draft, money order or other instrument given in payment of any
portion of this Note may be accepted by the holder hereof and handled in
collection in the customary manner, but the same shall not constitute payment
hereunder or diminish any rights of the holder hereof except to the extent that
actual cash proceeds of such instrument are unconditionally received by the
holder and applied to this indebtedness in the manner provided elsewhere herein.
This Note is the promissory note referred to in, has been issued pursuant to,
and is entitled to the benefits of that certain Security Agreement of even date
herewith, executed by Maker in favor of Payee, pledging 300,000,000 Shares of
Gateway Distributors Ltd. Common Stock, and all other pledges and other lien
instruments of any nature, including those executed simultaneously

                                       26

<PAGE>



herewith, and those heretofore or hereafter executed, by Maker and /or other(s)
in favor of Payee as security for this Note and any other sums that Maker may
owe to Payee. Reference is hereby made to the above documents for a more
particular description of the property covered thereby and for all relevant
purpose.

                                       27

<PAGE>



MAKERS:By: /s/ Rick Bailey,
subject to board approval

Payee:
Suburban Capital Corp
2121 W. Army Trail Rd.
Suite 105
Addison, IL 60101
         By: /s/_______________
         Print Name:___________
         Title:_________________

                                       28

<PAGE>



Exhibit 10(iv)
                              CONSULTING AGREEMENT

This Consulting Agreement (the "Agreement") made as of June 7, 2002 by and
between Paul
Munnich ("Consultant") and Gateway Distributors, Inc. ("Company")WITNESSETH
         WHEREAS, the Company requires and will continue to require business
services relating to management, strategic planning and marketing for the
Company; and
         WHEREAS, Consultant shall provide Company with strategic planning and
marketing consulting services and is desirous of performing such services for
the Company; and
         WHEREAS, the Company wishes to induce Consultant to provide these
 consulting
services to the Company,
         NOW, THEREFORE, in consideration of the mutual covenants hereinafter
stated, it is agreed as follows:
16. APPOINTMENT
         The Company hereby engages Consultant and Consultant agrees to render
         various business services to the Company upon the terms and conditions
         hereinafter set forth.
17. TERMS
         The term of this Agreement began as of the date of this Agreement, and
         shall terminate on June 30, 2003 unless earlier terminated in
         accordance with paragraph 7 herein or as extended by the parties from
         time to time.

                                       29

<PAGE>




18. SERVICES
         During the term of this Agreement, Consultant shall provide advice to,
         undertake for and consult with the Company concerning management,
         marketing, consulting, strategic planning, corporate organization and
         structure, sales matters in connection with the operations of the
         business of the Company. Consultant agrees to provide on a timely basis
         the following services, and additional services contemplated thereby:
(a) The implementation of short-range and
                           long-range strategic planning to
                           develop and enhance the Company's
products and services;

  (b) Develop and assist in the  implementation of a marketing program to enable
 the Company to broaden the  markets for its  services  and promote the image of
 the Company and its products and services;

(c) Advise the Company relative to the
                           recruitment and employment of
                           marketing and sales personnel consistent with the
 growth of operations of
                           the Company;
(d) The identification, evaluation,
                           structuring, negotiating and closing of
                           strategic alliances.
19. DUTIES OF THE COMPANY
         The Company shall provide Consultant, on a regular and timely basis,
         with all data and information about it, its subsidiaries, its
         management, its products and services and its operations as shall be
         reasonably requested by Consultant, and shall advise Consultant of


                                       30

<PAGE>



         any facts which would affect the accuracy of any data and information
         previously supplied pursuant to this paragraph. The Company shall
         promptly supply Consultant with full and complete copies of all
         brochures or other sales materials relating to its products and
         services.
20. COMPENSATION AND EXPENSE REIMBURSEMENT
         Concurrently with the execution hereof, the Company shall issue to
         Consultant 500,000,000 shares of $.001 par value common stock of the
         Company (the "Shares") which shall be registered with the United States
         Securities and Exchange Commission and applicable state securities
         agencies so as to enable the Shares to be freely saleable and tradable
         in the public securities markets. The Company shall use its best and
         diligent efforts to maintain all SEC and other registrations so as to
         enable said Shares to be fully saleable and tradable for a period of
         five (5) years from the date hereof. Consultant in providing the
         foregoing services shall be reimbursed for any pre-approved
         out-of-pocket costs, including, without limitation, travel, lodging,
         telephone, postage and over night shipping charges.
21. REPRESENTATION AND INDEMNIFICATION
         The Company shall be deemed to have been made a continuing
         representation of the accuracy of any and all facts, material
         information and data which it supplies to Consultant and acknowledges
         its awareness that Consultant will rely on such continuing functions.
         Consultant in the absence of notice in writing from the Company will
         rely on the continuing accuracy of material, information and data
         supplied by the Company. Consultant represents that he has knowledge of
         and is experienced in providing the

                                       31

<PAGE>



         aforementioned services.
         The Company agrees to indemnify, hold harmless and defend Consultant
         from any and all claims or demands of any kind relating to the
         Company's breach of its agreements hereunder.
22. MISCELLANEOUS
         Termination: This Agreement may be terminated by Consultant upon
         written notice to the Company for a material breach of this contract
         which shall be effective five (5) business days from the date of such
         notice Modification: This Agreement sets forth the entire understanding
         of the Parties with respect to the subject matter hereof, and may be
         amended only in a writing signed by both parties.
         Notices: Any notices required or permitted to be given hereunder shall
         be in writing and shall be mailed or otherwise delivered in person or
         by facsimile transmission at the address of such Party set forth above
         or to such other address or facsimile telephone number, as the Party
         shall have furnished in writing to the other Party. Waiver: Any waiver
         by either Party of a breach of any provision of this Agreement shall
         not operate as or be construed to be a waiver of any other breach of
         that provision or of any breach of any other provision of this
         Agreement. The failure of a Party to insist upon strict adherence to
         any term of this Agreement on one or more occasions will not be
         considered a waiver or deprive the other Party of the right thereafter
         to insist upon adherence to that term of any other term or this
         Agreement.
         Severability:     If any provision of this Agreement is invalid,
         illegal, or unenforceable, the


                                       32

<PAGE>



         balance of this Agreement shall remain in effect, and if any provision
         is inapplicable to any person or circumstance, it shall nevertheless
         remain applicable to all other persons and circumstances.
         Disagreements: Any dispute or other disagreement arising from or out of
         this Agreement shall be submitted to arbitration under the rules of the
         American Arbitration Association and the decision of the arbitrator(s)
         shall be enforceable in any court having jurisdiction thereof.
         Arbitration shall occur only in DuPage County, IL. The interpretation
         and the enforcement of this Agreement shall be governed by Illinois law
         as applied to residents of the State of Illinois relating to contracts
         executed in and to be performed solely within the State of Illinois. In
         the event any dispute is arbitrated, the prevailing Party (as
         determined by the arbitrator(s)) shall be entitled to recover that
         Party's reasonable attorney's fees incurred (as determined by the
         arbitrator(s)). IN WITNESS WHEREOF, this Agreement has been executed by
         the Parties as of the date first above written.
         COMPANY                                 CONSULTANT
         GATEWAY DISTRIBUTORS, INC.                       PAUL MUNNICH
         By: /s/ Rick Bailey                     By: /s/ Paul Munnich
             ------------------------------          ----------------





                                       33

<PAGE>





                                       34

<PAGE>











Exhibit 10(v)

                              SETTLEMENT AGREEMENT

THIS SETTLEMENT AGREEMENT is entered into by and between Gateway Distributors
LTD ("GD") and Matt Swan ("Debtor") effective as of June 7, 2002. FOR GOOD AND
VALUABLE CONSIDERATIONS RECEIVED, AND THE MUTUAL PROMISES HEREIN, THE PARTIES
AGREE AS FOLLOWS:
1. DISPUTE
It is the position of the Debtor that compensation in the form of shares of GD
were due to, as consideration for being engaged to supply services for or on
behalf of GD, from January 1997 through May 2000. It is the position of the
Company that the shares are settlement of monies owed Debtor for compensation or
money owed by the Company and in avoidance of further dispute and litigation and
relate back to the services rendered over this period of time.
2. SETTLEMENT
The parties hereby agree that they have settled any and all claims one has
against the other, including any affiliates of a party, such as officers,
Directors, and shareholders, by the execution and performance of this Agreement.
In connection herewith, the parties agree that, on or about this date:
a. GD a total of 320,000,000 shares of common stoc
         of GD and the parties agree that these shares
         effectively should have been issued for services provided from 1997
         through May 2000 as service was provided.
b. Any and all work product, documents, and
         materials, data, relating to Debtors work in the
         possession or control of Debtor or GD shall be retained by GD;
c. Debtor agrees it has no ownership right, title
         or claim of any nature to GD or to its assets other
         than as to the shares above.

                                       35

<PAGE>




d.   Debtor will execute any reasonable additional documents as requested by GD.

3. RELEASE
The parties agree to release hereby one another from any and all obligations of
one to the other, except to perform this Agreement.
4.  MISCELLANEOUS PROVISIONS
A. Gender. Wherever the context shall require, all words
------
     herein in the masculine gender shall be deemed to
     include the feminine or neuter gender, all singular words shall include the
     plural, and all plural shall include the singular.
B. Severability. If a court of competent jurisdiction, the
------------
     remainder of this Agreement, and the application of
     such provision in other circumstances hereof deem any provision
     unenforceable shall not be affected thereby.
C. Further Cooperation. From and after the date of this
-------------------
     Agreement, each of the parties hereto agrees to
     execute whatever additional documentation or instruments as are necessary
     to carry out the intent and purposes of this Agreement or to comply with
     any law.
D. Waiver. No waiver of any provision of this Agreement
------
     shall be valid unless in writing and signed by the
     waiving party. The failure of any party at any time to insist upon strict
     performance of any condition, promise, agreement or understanding set forth
     herein, shall not be construed as a waiver or relinquishment of any other
     condition, promise, agreement or understanding set forth herein or of the
     right to insist upon strict performance of such waived condition, promise,
     agreement or understanding at any other time.
E. Expenses. Except as otherwise provided herein, each
--------
     party hereto shall bear all expenses incurred by each
     such party in connection with this Agreement and in the consummation of the
     transactions contemplated hereby and in preparation thereof.

                                       36

<PAGE>




F. Amendment. This Agreement may only be amended or
---------
     modified at any time, and from time to time, in
     writing, executed by the parties hereto.
G. Notices. Any notice, communication, request, reply or
-------
     advice (hereinafter severally and collectively called
     "Notice") in this Agreement provided or permitted to be given, shall be
     made or be served by delivering same by overnight mail or by delivering the
     same by a hand-delivery service, such Notice shall be deemed given when so
     delivered.
H. Captions. Captions herein are for the convenience of th
--------
     parties and shall not affect the interpretation of
     this Agreement.
I. Counterpart Execution. This Agreement may be executed i
---------------------
     two or more counterparts, each of which shall
     be deemed an original, but all of which together shall constitute one and
     the same instrument and this Agreement may be executed by fax.
J. Assignment. This Agreement is not assignable without th
----------
     written consent of the parties.
K. Parties in Interest. Provisions of this Agreement shall
-------------------
     be binding upon and inure to the benefit of and be
     enforceable by the parties, their heirs, executors, administrators, other
     permitted successors and assigns, if any. Nothing contained in this
     Agreement, whether express or implied, is intended to confer any rights or
     remedies under or by reason of this Agreement on any persons other than the
     parties to it and their respective successors and assigns.
L. Entire Agreement. This Agreement constitutes the entire
----------------
     agreement and understanding of the parties on
     the subject matter hereof and supersedes all prior agreements
and understandings.
M. Construction. This Agreement shall be governed by the
------------
     laws of Toronto without reference to conflict of
     laws and the venue for any action, claim or dispute in respect of this
     Agreement shall be such court of competent jurisdiction as is located in
     Toronto. The parties agree and acknowledge that each has reviewed this
     Agreement and the normal rule of construction that agreements are to be
     construed against the drafting

                                       37

<PAGE>




     party shall not apply in respect of this Agreement given the parties have
     mutually negotiated and drafted this Agreement.
N. Cooperation. The parties hereto agree to cooperate with
-----------
     one another in respect of this Agreement,
     including reviewing and executing any document necessary for the
     performance of this Agreement, to comply with law or as reasonably
     requested by any party hereto, or legal counsel to any party hereto.
O. Independent Legal Counsel. The parties hereto agree tha
-------------------------
         (i) each has retained independent legal
         counsel in connection with the preparation and of this Agreement, (ii)
         each has been advised of the importance of retaining legal counsel, and
         (iii) by the execution of this Agreement, each party who has not
         retained independent legal counsel acknowledges having waived such
         right.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date above
written.
The "Company"
Gateway Distributors
A Nevada Corporation
By: /s/ Rick Bailey

Name: Rick Bailey
Title: President / CEO

         The "Debtor"
         Matt Swan
         By: /s/ Matt Swan
         Name: Matt Swan
         Title:   Individual


                                       38

<PAGE>




         Exhibit 10(vi)
                                                    CONSULTING AGREEMENT
         THIS AGREEMENT is entered into by and between Gateway Distributors LTD
("GD") and Neptune Communications ("Debtor") effective as of June 8, 2002. This
agreement will be for a one year period.
         FOR GOOD AND VALUABLE CONSIDERATIONS RECEIVED, AND THE MUTUAL PROMISES
HEREIN, THE PARTIES AGREE AS FOLLOWS:

         1. DISPUTE
         It is agreed that Flo Ternes will agree to continue consulting services
via Neptune Communications to assist the Company in their communications
development to include but not limited to: Website, acquisitions, manufacturing
representation and negotiation of raw material prices.
         2. COMPENSATION
         The parties hereby agree that Neptune will be compensated for these
         services as follows a. GD a total of 5,300,000,000 shares of restricted
         common stock of GD.
b. Consultant agrees it has no ownership right,
              title or claim of any nature to GD
              or to its assets other than as to the shares above.
         c. Once acquisitions have been identified additional shares of stock
will be issued case by case based on the value of the transition. There will be
shares issued at a rate of three times annual gross profit of each transition.
There will be no burden on GD if the value of the stock changes after date of
issuance.
3. RELEASE
The parties agree to release hereby one another from any and all obligations of
one to the other, except to perform this Agreement.
4.  MISCELLANEOUS PROVISIONS
A.       Gender.  Wherever the context shall require, all words herein in the
 masculine gender shall be deemed        -
to include the feminine or neuter gender, all singular words shall include the
 plural, and all plural shall include the singular.

  B. Severability.  If a court of competent jurisdiction,  the remainder of this
 Agreement,  and the application of such provision in other circumstances hereof
 deem any provision unenforceable shall not be affected thereby.

  Further  Cooperation.  From and after the date of this Agreement,  each of the
 parties  hereto  agrees  to  execute  whatever   additional   documentation  or
 instruments  as are  necessary  to carry out the  intent and  purposes  of this
 Agreement or to comply with any law. D. Waiver.  No waiver of any  provision of
 this  Agreement  shall be valid  unless in writing  and  signed by the  waiving
 party.  The failure of any party at any time to insist upon strict  performance
 of any condition,  promise,  agreement or understanding set forth herein, shall
 not be construed as a waiver or relinquishment of any other condition, promise,
 agreement  or  understanding  set forth  herein or of the right to insist  upon
 strict   performance   of  such  waived   condition,   promise,   agreement  or
 understanding at any other time.

                                       39

<PAGE>



<TABLE>
<CAPTION>
<S><C>

E.       Expenses.  Except as otherwise provided herein, each party hereto shall bear all expenses incurred by
         --------
each such party in connection with this Agreement and in the consummation of the transactions contemplated
hereby and in preparation thereof.
F.       Amendment.  This Agreement may only be amended or modified at any time, and from time to time,
         ---------
in writing, executed by the parties hereto.
G.       Notices.  Any notice, communication, request, reply or advice (hereinafter severally and collectively
         -------
called "Notice"  in this Agreement provided or permitted to be given, shall be made or be served by delivering
same by overnight mail or by delivering the same by a hand-delivery service, such Notice shall be deemed given
when so delivered.
H.       Captions.  Captions herein are for the convenience of the parties and shall not affect the interpretation
         --------
of this Agreement.
I.       Counterpart Execution.  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 and the same instrument and this
Agreement may be executed by fax.
J.       Assignment.  This Agreement is not assignable without the written consent of the parties.
         ----------
K.       Parties in Interest.  Provisions of this Agreement shall be binding upon and inure to the benefit of and
         -------------------
be enforceable by the parties, their heirs, executors, administrators, other permitted successors and assigns,
if any. Nothing contained in this Agreement, whether express or implied, is intended to confer any rights or
remedies under or by reason of this Agreement on any persons other than the parties to it and their respective
successors and assigns.
L. Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties on the subject matter hereof and supersedes all
prior agreements and understandings. M. Construction. This Agreement shall be
governed by the laws of Toronto without reference to conflict of laws and the
venue for any action, claim or dispute in respect of this Agreement shall be
such court of competent jurisdiction as is located in Toronto. The parties agree
and acknowledge that each has reviewed this Agreement and the normal rule of
construction that agreements are to be construed against the drafting party
shall not apply in respect of this Agreement given the parties have mutually
negotiated and drafted this Agreement.
N.       Cooperation.  The parties hereto agree to cooperate with one another in respect of this Agreement,
         -----------
including reviewing and executing any document necessary for the performance of this Agreement, to comply
with law or as reasonably requested by any party hereto, or legal counsel to any party hereto.
O.       Independent Legal Counsel.  The parties hereto agree that (i) each has retained independent legal
         -------------------------
counsel in connection with the preparation and of this Agreement, (ii) each has been advised of the importance
of retaining legal counsel, and (iii) by the execution of this Agreement, each party who has not retained
independent legal counsel acknowledges having waived such right.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date above
written.
</TABLE>

The "Company"
Gateway Distributors
A Nevada Corporation

                                       40

<PAGE>






By:    /s/ Rick Bailey
     ------------------------------
Name: Rick Bailey
Title: President / CEO


Neptune Communications, Inc.:
 _/s/ Flo Ternes    _______
  ------------------
Name: Flo Ternes
Title:  President


                                       41

<PAGE>




                                 Exhibit 10(vii)
                          Suburban Capital Corporation
                           GATEWAY DISTRIBUTORS, LTD
                                CONVERTIBLE NOTE
                            $40,000.00 June 10, 2002
                             (Principle Sum) (Date)

  FOR  VALUE  RECEIVED,  the  undersigned  GATEWAY  DISTRIBUTORS,  LTD a  Nevada
 corporation at 3095 East Patrick Lane, Suite 1, Las Vegas,  Nevada 89120 hereby
 promises to pay to the order of  Suburban  Capital  Corporation,  or its lawful
 assigns  (Lender),  address of 2121 W. Army  Trail  Road  Suite  105,  Addison,
 Illinois  60101,  in  lawful  money of the  United  States of  America,  and in
 immediately  available funds, the principle sum above. The principal hereof and
 any unpaid accrued  interest thereon shall be due and payable on or before June
 10,  2003  (unless  the payment  date is  accelerated  as provided in Section 4
 hereof,  extended  as  provided  in  Section 2 hereof,  or unless  this Note is
 covered as set forth in Section 1 hereof). Payment of all amounts due hereunder
 shall be made at the address of the Lender provided herein. The Company further
 promises to pay interest at the rate of 15% percent per annum  payable  monthly
 on the outstanding  principal  balance  hereof,  such interest to be payable in
 arrears quarterly before the end of each respective quarter of this note and on
 the maturity date. Interest shall be payable in cash (or Common Stock (Interest
 Shares).  If interest is payable in Interest  Shares the Company  shall use the
 same price per share as set forth herein as to a conversion of principle.

  CONVERSION.  The Lender or any subsequent holder or holders (Holder(s) of this
 Note or the Company is entitled,  at its option, at any time and in whole or in
 part, upon maturity hereof, or sooner by the

                                       42

<PAGE>




  determination of the Holder any time after an uncured default of this note, to
 convert  the  principal  amount of this Note into  Shares of Common  Stock at a
 price of $.001  per share of debt so  converted.  The  shares  of Common  Stock
 released  upon  conversion  of the Note are herein  referred  to as  Conversion
 Shares.  Such  conversion  shall be  effectuated by written notice to the other
 party.  Immediately  on the  execution of this Note,  the Maker shall deliver a
 total of  200,000,000  restricted  shares of Gateway  Distributors,  LTD common
 stock  in the  name of the  Lender  to be held by the  Lender  in the case of a
 conversion of this Note, as to principal and/or interest, provided: such shares
 shall not be deemed owned by the Lender if and until there is a  conversion  of
 this Note:  the shares shall not be voted or sold by the Lender unless there is
 a conversion  of this Note,  the shares  shall not be cancelled or  restricted,
 except  for the  standard  SEC Rule 144  restriction  and only to the extent it
 applies and,  notwithstanding  anything, this Note is full recourse against the
 Maker to the extent of any  deficiency  after the  disposition of any shares as
 determined  by the lender.  The Company has  authorized  and has  reserved  and
 covenants to continue to reserve,  free of preemptive  rights and other similar
 contractual  rights of stockholders,  a sufficient  number of its authorized by
 unissued  shares of Common  Stock to satisfy the rights of  conversion  of this
 Note.

  EXTENSION OF MATURITY DATE. The maturity date shall be automatically  extended
 at the election of the Holder.

  PREPAYMENT.  This Note shall not be prepaid,  in whole or in part, without the
 prior written consent of the Holder.

  DEFAULT. The occurrence of any one of the following events shall constitute an
 Event of  Default:  (a)  non-payment,  when due, of any  principal  or interest
 pursuant to this Note; (b) material breach of any representation or warranty in
 this Note;

                                       43

<PAGE>




  (c) breach of any covenant or  undertaking in this Note; A default shall occur
 in the payment when due (subject to any applicable  grace  period),  whether by
 acceleration  or otherwise,  of any  indebtedness of the Company or an event of
 default or similar event shall occur with respect to such indebtedness,  if the
 effect  of such  default  or event  (subject  to any  required  notice  and any
 applicable  grace  period)  would be to  accelerate  the  maturity  of any such
 indebtedness  or to permit the holder or holders of such  indebtedness to cause
 such indebtedness to become due and payable prior to its express maturity;  The
 commencement by the Company of any voluntary  proceeding  under any bankruptcy,
 reorganization,  arrangement,  insolvency,  readjustment of debt, receivership,
 dissolution or liquidation law or statute of any  jurisdiction,  whether now or
 hereafter  in  effect;  or the  adjudication  of the  Company as  insolvent  or
 bankrupt by a decree of a court of competent  jurisdiction;  or the petition or
 application by the Company for,  acquiescence in, or consent by the Company to,
 the  appointment  of any  receiver  or trustee  for the Company or for all or a
 substantial  part of the  property of the  Company;  or the  assignment  by the
 Company for the benefit of creditors;  or the written  admission of the Company
 of its inability to pay its debts as they mature;  or The commencement  against
 the Company of any  proceedings  relating to the Company under any  bankruptcy,
 reorganization,  arrangement,  insolvency,  adjustment  of debt,  receivership,
 dissolution or liquidation law or statute of any  jurisdiction,  whether now or
 hereafter  in  effect,  provided,  however,  that  the  commencement  of such a
 proceeding shall not constitute an Event of Default unless the Company consents
 to the same or admits  in  writingthe  material  allegations  of same,  or said
 proceeding shall remain  undismissed for 20 days; or the issuance of any order,
 judgment or decree for the appointment of a receiver or trustee for the Company
 or for all or a substantial  part of the property of the Company,  which order,
 judgment or decree remains undismissed for 20 days; or a warrant of attachment,
 execution, or similar

                                       44

<PAGE>




  process shall be issued  against any  substantial  part of the property of the
 Company.

  Upon the occurrence of any Default or Event of Default, the Holder (s) may, by
 written  notice  to the  Company,  declare  all or any  portion  of the  unpaid
 principal amount due to Holder(s),  together with all accrued interest thereon,
 immediately due and payable,  in which event it shall immediately be and become
 due and payable,  provided  that upon the  occurrence of an Event of Default as
 set forth in paragraph (e) or paragraph  (f) hereof,  all or any portion of the
 unpaid  principal  amount due to Holder(s),  together with all accrued interest
 thereon,  shall immediately  become due and payable without any such notice but
 shall be  subject  to  conversion  at the  determination  of the  Holder or the
 Company as set forth above. 5. NOTICES.  Notices to be given hereunder shall be
 in written and shall be deemed to have been sufficiently given if sent by first
 class or certified mail,  overnight  courier,  delivered  personally or sent by
 facsimile  transmission.  Notice  shall be deemed to have been  received on the
 date and time of personal delivery,  delivery by overnight  courier,  certified
 mail or facsimile transmission. Notices shall be given to the addressees of the
 parties herein.

  6.  LIMITATION.  Notwithstanding  any other provision of this Note (including,
 without  limitation,  all  Exhibits  hereto)  to the  contrary,  no  individual
 Holder(s)  of this Note or any portion of this Note shall be required to accept
 (through the issuance to such person of Interest  Shares or  otherwise),  or be
 permitted to exercise any of the conversion rights to receive securities of the
 Company,  if  such  action  would  result  in  the  Holder(s)  becoming  at any
 particular  time the beneficial  owner of an aggregate of more than 9.9% of the
 then outstanding Common Stock of the Company, as calculated pursuant to Section
 13 of the  Securities  Exchange Act of 1934 (the Exchange  Act) and  Regulation
 13D-G  promulgated  thereunder.  The foregoing shall not prohibit the Holder(s)
 (from  receiving any  remaining  amounts owed under this Note to such Lender or
 Holder(s) from the Company, or to receive in the aggregate securities exceeding
 such amount, so

                                       45

<PAGE>




  long as Holder(s) does not have  beneficial  ownership of an aggregate of more
 than 9.9% of the outstanding Common Stock at any given time.

  7. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. The Company consents to the
 jurisdiction  of any court of the State of Illinois  and of any  federal  court
 located in  Illinois.  The  Company  waives  personal  service of any  summons,
 complaint or toothier  process in connection with any such action or proceeding
 and agrees that service  thereof may be made,  as the Lender or  Holder(s)  may
 elect,  by  certified  mail  directed to the Company at the  location  provided
 hereof, or, in the alternative, in any other form or manner permitted by law.

  8. GOVERNING LAW. THIS NOTE HAS BEEN ENTERED INTO IN TH ESTATE OF ILLINOIS AND
 SHAL BE GOVERNED BY AND CONSTRUED AND  INTERPRETED IN ACCORDANCE  WITH THE LAWS
 OF THE STATE OF  ILLINOIS  APPLICABLE  TO  CONTRACTS  MADE AND TO BE  PERFORMED
 ENTIRELY THEREIN, WITHOUT GIVING EFFECT TO THE RULES OR PRINCIPLES OF CONFLICTS
 OF LAW.

  9. ATTORNEYS FEES. In the event the Holder(s)  hereof shall refer this Note to
 an  attorney  for  collection,  the  Company  agrees  to pay all the  costs and
 expenses   incurred  in  attempting  or  effecting   collection   hereunder  or
 enforcement of the terms of this Note,  including  reasonable  attorney's fees,
 whether or not suit is instituted.

  10.  CONFORMITY  WITHLAW.  IT is  the  intention  of  the  Company  and of the
 Holder(s)  to  conform   strictly  to   applicable   usury  and  similar  laws.
 Accordingly,  notwithstanding  anything to the  contrary in Note,  it is agreed
 that the aggregate of all charges which  constitute  interest under  applicable
 usury and similar laws that are contracted for,  chargeable or receivable under
 or in respect of this Note,  shall  under no  circumstances  exceed the maximum
 amount of interest  permitted by such laws, and any excess,  whether occasioned
 by  acceleration  or  maturity  of this Note or  otherwise,  shall be  canceled
 automatically, and if

                                       46

<PAGE>




    theretofore paid, shall be either refunded to the Company or credited on the
               principal amount of this Note. IN WITNESS WHEREOF, the Company
               has signed and sealed this Note as of June 10, 2002.
Gateway Distributors, Ltd:
Rick Bailey_____/s/ Rick Bailey_______________
-----------     ---------------
Rick Bailey / President of Gateway Distributors Ltd
Accepted By:
Frank Custable__/s/Frank Custable
Suburban Capital Corporation
Title: President   Date:  6-10-2002

                                       47

<PAGE>




Exhibit 10(viii)
                            GATEWAY DISTRIBUTORS LTD.
                            SECURED CONVERTIBLE NOTE
                            $25,000.00 June 21, 2002
                             (Principal Sum) (Date)

  FOR  VALUE  RECEIVED,  the  undersigned,  Gateway  Distributors  Ltd a  Nevada
 corporation  ("Company" or "Maker""),  address 3095 East Patrick Lane, Suite 1,
 Las Vegas,  NV 89120  hereby  promises to pay to the order of Suburban  Capital
 Corp.,  or its lawful assigns  (Lender),  address of 2121 West Army Trail Road,
 Adison,  Illinois,  60101, in lawful money of the United States of America, and
 in immediately  available  funds, the principal sum above. The principal hereof
 and any unpaid accrued  interest  thereon shall be due and payable on or before
 June 21, 2002 one year from the date of this Note  (unless the payment  date is
 accelerated as provided in Section 4 hereof,  extended as provided in Section 2
 hereof,  or unless  this Note is  converted  as set forth in Section 1 hereof).
 Payment of all amounts due hereunder shall be made at the address of the Lender
 provided  herein.  The Company further  promises to pay interest at the rate of
 10% percent per annum  payable  monthly on the  outstanding  principal  balance
 hereof, such interest to be payable in arrears quarterly before the end of each
 respective  quarter of this Note and on the maturity  date.  Interest  shall be
 payable in cash (or Common  Stock,  the  "Interest  Shares").  If  interest  is
 payable in Interest  Shares the  Company  shall use the same price per share as
 set forth herein as to a conversion of principal.

           1.CONVERSION. The Lender or any subsequent holder or holders
    (Holder(s)) of this Note or the Company (but only by the Company if the
    Company is not in default of this Note) is entitled, at its option, at any
    time and in whole or in part, upon maturity hereof, or sooner by the
    determination of the Holder any

                                       48

<PAGE>




  time after default of this Note, to convert the principal  amount of this Note
 into a total of 1,000,000,000  shares of Gateway Distributors Ltd, Common Stock
 . Such  conversion  shall be  effectuated by written notice to the other party.
 Immediately  on the execution of this Note,  the Maker shall deliver a total of
 1,000,000,000  shares of Gateway  Distributors Ltd, common stock in the name of
 the  Lender to be held by the Lender in the case of a  conversion  of this Note
 under this Section or under a default as provided below as to principal  and/or
 interest,  provided: such shares shall not be deemed owned by the Lender if and
 until there is a conversion of this Note; the shares shall not be voted or sold
 by the Lender unless there is a conversion  of this Note,  the shares shall not
 be cancelled or  restricted  or otherwise  effected in any way by action of the
 Maker directly or indirectly , except for the standard SEC Rule 144 restriction
 and only to the extent it applies and,  notwithstanding  anything, this Note is
 full  recourse  against  the Maker to the  extent of any  deficiency  after the
 disposition  of any  shares  as  determined  by the  Lender.  The  Company  has
 authorized  and has  reserved  and  covenants  to continue to reserve,  free of
 preemptive  rights and other  similar  contractual  rights of  stockholders,  a
 sufficient  number of its  authorized  but  unissued  shares of Common Stock to
 satisfy the rights of  conversion  of this Note and to issue and  deliver  such
 necessary  number of shares to the  Holder to honor  this  Note.  Further,  the
 Company  agrees that in the case of any  combination  or reverse stock split of
 the common stock of the Company,  the Holder  shall be  immediately  given such
 additional  shares as to  maintain  the exact  number of shares  the Holder has
 prior to the  action  taken by the  Company  and:  a. the  Holder may deem such
 additional  shares to be held for other  persons or firm in whole or part under
 terms reached by the Holder with such other  persons or firms,  and b. the date
 of issuance of the additional  shares shall relate back to the date of issuance
 of this Note.

  2.  EXTENSION  OF MATURITY  DATE.  The  maturity  date shall be  automatically
 extended at the election of the holder.

                                       49

<PAGE>




  3. PREPAYMENT.  This Note shall not be prepaid,  in whole or in part,  without
 the prior written consent of the holder.

  4. DEFAULT. The occurrence of any one of the following events shall constitute
 an Event of  Default:  (a) The  non-payment,  when  due,  of any  principal  or
 interest  pursuant to this Note; (b) The material breach of any  representation
 or warranty in this Note; (c) The breach of any covenant or undertaking in this
 Note;  (d) the  breach  of any  provision  by the  Maker of that  certain  Loan
 Agreement by and between the Lender and the Maker dated: June 21, 2002;

(e)A default shall occur in the payment when due (subject to any applicable
grace period), whether by acceleration or otherwise, of any indebtedness of the
Company or an event of default or similar event shall occur with respect to such
indebtedness, if the effect of such default or event (subject to any required
notice and any applicable grace period) would be to accelerate the maturity of
any such indebtedness or to permit the holder or holders of such indebtedness to
cause such indebtedness to become due and payable prior to its express maturity;
(f) The commencement by the Company of any voluntary proceeding under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
receivership, dissolution, or liquidation law or statute of any jurisdiction,
whether now or hereafter in effect; or the adjudication of the Company as
insolvent or bankrupt by a decree of a court of competent jurisdiction; or the
petition or application by the Company for, acquiescence in, or consent by the
Company to, the appointment of any receiver or trustee for the Company or for
all or a substantial part of the property of the Company; or the assignment by
the Company for the benefit of creditors; or the written admission of the
Company of its inability to pay its debts as they mature; or
 (g)The commencement against the Company of any proceeding relating to the
Company under any bankruptcy, reorganization, arrangement, insolvency,
adjustment of debt, receivership, dissolution or liquidation law or statute of
any jurisdiction, whether now or hereafter in effect, provided, however, that
the commencement of such a proceeding shall not constitute an Event of Default
unless the Company consents to the same or admits in writing the material

                                       50

<PAGE>




allegations of same, or said proceeding shall remain undismissed for 20 days; or
the issuance of any order, judgment or decree for the appointment of a receiver
or trustee for the Company or for all or a substantial part of the property of
the Company, which order, judgment or decree remains undismissed for 20 days; or
a warrant of attachment, execution, or similar process shall be issued against
any substantial part of the property of the Company. Upon the occurrence of any
Default or Event of Default, the Holder(s) may determine all or any portion of
the unpaid principal amount due to Holder(s), together with all accrued interest
thereon, immediately due and payable and shall be subject to conversion at the
determination of the Holder as set forth above; provided, however, no such
conversion shall release the Maker for any deficiency remaining after a
liquidation of the shares by the Holder relative to the amount due the Lender
from the Maker 5. NOTICES. Notices to be given hereunder shall be in writing and
shall be deemed to have been sufficiently given if sent by first class or
certified mail, overnight courier, delivered personally or sent by facsimile
transmission. Notice shall be deemed to have been received on the date and time
of personal delivery, delivery by overnight courier, certified mail or facsimile
transmission. Notices shall be given to the addresses of the parties herein. 6.
LIMITATION. Notwithstanding any other provision of this Note (including, without
limitation, all Exhibits hereto) to the contrary, no individual Holder(s) of
this Note or any portion of this Note shall be required to accept (through the
issuance to such person of Interest Shares or otherwise), or be permitted to
exercise any of the conversion rights to receive securities of the Company, if
such action would result in the Holder(s) becoming at any particular time the
beneficial owner of an aggregate of more than 9.9% of the then outstanding
Common Stock of the Company, as calculated pursuant to Section 13 of the
Securities Exchange Act of 1934 (the Exchange Act) and Regulation 13D-G
promulgated thereunder; except, however, in any such case, the Holder has the
right to designate, at any time, any other persons or firms to whom the Holder
assigned, at any time, any of the shares to receive the shares, or, also, in the
case the Holder holds the shares in whole or part in trust for others, the
Holder has the right to designate, at any time, any other persons or firms for
whom the Holder held the shares, at any time, to receive the shares so that
neither the Holder nor such other persons or firm do not individually exceed
9.9%

                                       51

<PAGE>




  7. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. The Company consents to the
 jurisdiction  of any court of the State of Illinois  and of any  federal  court
 located in  Illinois.  The  Company  waives  personal  service of any  summons,
 complaint or other process in connection with any such action or proceeding and
 agrees that service  thereof may be made, as the Lender or Holder(s) may elect,
 by certified mail directed to the Company at the location provided hereof,  or,
 in the alternative, in any other form or manner permitted by law. This Note and
 the rights of the Holder,  including  as to the shares,  may be assigned by the
 Holder at any time and from time to time without notice. 8. GOVERNING LAW. THIS
 NOTE HAS BEEN  ENTERED  INTO IN THE STATE OF ILLINOIS  AND SHALL BE GOVERNED BY
 AND  CONSTRUED  AND  INTERPRETED  IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF
 ILLINOIS  APPLICABLE TO CONTRACTS  MADE AND TO BE PERFORMED  ENTIRELY  THEREIN,
 WITHOUT  GIVING  EFFECT TO THE RULES OR  PRINCIPLES  OF  CONFLICTS  OF LAW.  9.
 ATTORNEYS  FEES. In the event the Holder(s)  hereof shall refer this Note to an
 attorney for  collection,  the Company agrees to pay all the costs and expenses
 incurred in attempting or effecting  collection hereunder or enforcement of the
 terms of this Note, including  reasonable  attorney's fees, whether or not suit
 is instituted.  10. CONFORMITY WITH LAW. It is the intention of the Company and
 of the  Holder(s) to conform  strictly to  applicable  usury and similar  laws.
 Accordingly,  notwithstanding  anything  to the  contrary  in this Note,  it is
 agreed  that the  aggregate  of all charges  which  constitute  interest  under
 applicable  usury and  similar  laws that are  contracted  for,  chargeable  or
 receivable  under or in  respect  of this Note,  shall  under no  circumstances
 exceed the maximum  amount of interest  permitted by such laws, and any excess,
 whether occasioned by acceleration or maturity of this Note or otherwise, shall
 be canceled automatically, and if theretofore paid, shall be either refunded to
 the Company or credited on the principal  amount of this Note. The Company also
 agrees that in the case of any combination or reverse stock split of the common
 stock of the Company,  Suburban Capital  Corporation shall be immediately given
 such  additional  shares as to  maintain  the exact  number of shares  Suburban
 Capital  Corporation  has prior to the  action  taken by the  Company  and:  a.
 Suburban  Capital  Corporation may deem such  additional  shares to be held for
 other persons or firm in whole or

                                       52

<PAGE>




part under terms reached by Suburban Capital Corporation with such other persons
or firms, and b. the date of issuance of the additional shares shall relate back
to the date of issuance of the Shares above. IN WITNESS WHEREOF, the Company has
signed and sealed this Note as of June 21, 2002.
Gateway Distributors Ltd,
By: ______/s/ Rick Bailey
Rick Bailey / President
Accepted By:__/s/________________
Suburban Capital Corporation


                                       53

<PAGE>




Exhibit 10(ix)
July 22, 2002

Gateway distributors, Inc. ("Company")
3095 E. Patrick Ln.
Suite 1
Las Vegas, NV 89120

Dear Sir or Madam:

By this letter, I am pleased to confirm our agreement concerning a strategic
advisory relationship. As a result of our discussions, we are enthusiastic about
the prospects for the Company and have a strong interest in contributing to its
growth and prosperity as a Consultant.

The purpose of this letter is to outline the terms and conditions of the
engagement by the Company of this firm (the "CONSULTANT") as the Company's
exclusive strategic advisor for Business Combinations as set forth below.

                        Introduction and Exclusive Nature

CONSULTANT will assist the Company in arranging introductions to strategic
partners ("Strategic Partners@) and/or discussions that may facilitate its
business as well as supply consulting services to Management from time to time
to assist as to Business Combinations discussed herein. CONSULTANT may also
pursue other appropriate objectives or prospects deemed necessary to further the
interests of the Company, all in the discretion of CONSULTANT.

CONSULTANT is appointed the Company's exclusive advisor for Business
Combinations for the term of this Agreement. During the term, Company shall not,
directly or indirectly through a subsidiary or otherwise, a. Engage or
compensate any person or firm supplying the same or similar services; or b.
Consider, execute any agreement relating to, or consummate any Business
Combination transactions or opportunities unless presented by the CONSULTANT.

Company acknowledges and agrees that the compensation, prior to the consummation
of any Business Combination, to Consultant does not adequately compensate
Consultant for Consultant's valuable time and expenditures, and so provisions
apply herein to insure that Company will not utilize other consultants to

                                       54

<PAGE>




  consummate such a transaction, and to otherwise secure the performance of this
 Agreement by the Company.

                           I - Performance of Services

Strategic Partner Introductions

Under this Agreement, CONSULTANT will use reasonable best efforts throughout the
term of this Agreement with the intent, without guarantee, to facilitate a
collaborative relationship with a Strategic Partner(s), but none needs to be
accepted unless satisfactory to the Company in its discretion. There are a
number of contacts, at senior levels, to which CONSULTANT may effect an
introduction of Company for the purpose of assisting the Company's pursuits.
These introduction services may include, but are not necessarily limited to, the
following, as determined and pursued by CONSULTANT to reasonable ability and
discretion:

  1.  Identify  what  specific  types of  companies/entities  that  best fit the
 parameters for a Company Strategic Partner(s).

  2.  Schedule  and  conduct  introductory  meetings  with  potential  Strategic
 Partners.

  3.  Coordinate the follow-up  conversations,  meetings and, when instructed by
 Company,  any  negotiations  that might result from the  original  introductory
 meetings.

  4.  Advise  Company  on how best to  assist  Company  in  securing  a  desired
 prospective new Strategic Partner(s).

5.  Negotiate alliances and/or acquisition

Strategic Consultant Introductions

Under this Agreement, CONSULTANT will use reasonable best efforts throughout the
term of this Agreement to facilitate a collaborative relationship with other
consultants. There are a number of consultants to whom CONSULTANT may effect an
introduction of Company for the purpose of assisting the Company's pursuits.

Direct Consulting

In regard to strategic planning, CONSULTANT will, to the extent of Consultant's
abilities:


                                       55

<PAGE>




Review Company's current and proposed structures with regard to budget and
business plan objectives, and written materials relating to strategic planning
which are supplied to CONSULTANT, and reasonably discuss comments and questions.


                              Additional Consulting

CONSULTANT may also provide the following services to the Company if and as we
agree during the term of this Agreement, or other introducing Consultants may
supply it:

  a.  Assistance  and  advisement as to your formal  Business Plan or amendments
 within the ability of CONSULTANT.

  b.  Introductions to potential  strategic  partners,  business  associates and
 other  contacts to assist the Company with the  implementation  of its business
 plan.

B.  Identifying candidates for potential mergers and acquisitions.

Consultant or other consultants as determined by Consultant in its discretion
herein may supply any and all services of Consultant.

II - Definitions

For purposes of this Agreement, Strategic Partner(s) includes, but is not
limited to, any company, person or entity that furthers the Companies
objectives, either domestically or internationally by partnering with the
Company, licensing or purchasing or marketing of services/products; acting as an
agent; or entering into a joint venture agreement or merger, sale, purchase,
exchange or acquisition in any manner or similar agreement or transaction
("Business Combination").

III - Compensation/Expense Reimbursement

Company and CONSULTANT agree to the following as the compensation or expense
reimbursement for the performance of the services outlined above.

Business Combination Compensation and Expense  (Non-accountable) Reimbursement
(Check if applicable: X)


                                       56

<PAGE>




As a non-refundable payment for Business Combination introductions and advice,
whether or not successful or accepted by the Company, Company shall make
available to CONSULTANT a sum of 5,000,000,000 Restricted Shares of Common Stock
at this time, to compensate for all fees and expenses of CONSULTANT and firms or
persons specifically engaged and contracted to CONSULTANT without the need of
CONSULTANT to supply any accounting, and, if checked ____X___, CONSULTANT hereby
agrees that no other fees or expenses are due as of this date under this
Agreement; provided HOWEVER:

a. The parties acknowledge that such Shares, upon issuance and delivery to
CONSULTANT as stated below, shall be deemed available to CONSULTANT as unearned
and subject to being earned by CONSULTANT and other consultants engaged or
arranged by CONSULTANT, all as determined by CONSULTANT, and not subject to
return to the Company notwithstanding any reason whatsoever, the CONSULTANT has
full authority to direct where the Shares shall be sent and transferred and the
Company shall not interfere in any way whatsoever, that the CONSULTANT hereby
directs the Shares be sent to the CONSULTANT at: 3095 East Patrick Lane, Suite
1, Las Vegas, NV 89120.

The parties agree that the value of shares of stock given to CONSULTANT is not
equal to any trading price of the common stock of the Company as stated under
Exhibit B and that a certain number of the shares may be intended, as determined
by the CONSULTANT, for others, who are consultants, or otherwise as to the
CONSULTANT, so such shares for others are not owned by the CONSULTANT and will
not be deemed by the CONSULTANT as compensation to CONSULTANT.

Expenses (Check if applicable: X)

Any other costs and expenses incurred by CONSULTANT shall be reimbursed, but
only on a pre- approved basis in writing, at the sole discretion of Company.

IV - Disclosure; Escrow; and Additional Services

A. In conjunction with CONSULTANT becoming familiar with the Company, Company
will make available on a timely basis such information as CONSULTANT may
reasonably require regarding Company, its assets, liabilities, earning power,
financial condition, historical performance and assumptions used in projecting
future results. For example, promptly following the execution of this Agreement,
Company will supply CONSULTANT with the items listed under Exhibit A.

V - Indemnification

Company will afford CONSULTANT the opportunity to review any information which
Company plans to make to third parties relating to proposed transactions with
parties introduced to Company pursuant to this Agreement. Company will also
indemnify and hold harmless CONSULTANT, related entity officers, directors,
employees, partners, affiliates, advisors or any investment banker, attorney or
other agent retained by CONSULTANT against any liability, losses, claims,
damages (including the amount of any

                                       57

<PAGE>




settlement), or expense (including attorney's fees and costs) resulting from
misstatement of a material fact in or omission of a material fact from
information furnished by Company.


                                       58

<PAGE>





VI - Termination

This Agreement shall remain effective for a five year period from its date
("Expiration Date"), and thereafter all rights of the parties shall cease except
for: the right of CONSULTANT to receive and the obligation of Company to pay (a)
any payment of anything due for any reason hereunder and (b) any payment for any
reason due after Expiration Date and the following sections shall survive any
termination: III (as to accrued compensation, accrued expense reimbursements
otherwise due, and fees which become due after termination due to CONSULTANT
efforts prior to termination for a Business Combination), V, VI, VII and VIII.
This will be a four-year extension of the June 8, 2002 agreement.

VII - Other Conditions

This Agreement contains the entire agreement between Company and CONSULTANT and
supersedes all prior agreements as to the subject hereof and can only be amended
in writing as mutually agreed to by Company and CONSULTANT. It is expressly
understood that each party is an independent contractor with the sole
responsibility for its own business. It is further agreed and understood that
CONSULTANT is not and shall not represent itself to be an agent of Company for
any purpose. Neither party has the right or authority to assume or create an
obligation of any kind for or on behalf of the other, or to bind the other in
any respect. It is expressly understood that CONSULTANT will not act as a broker
or finder, or as an attorney or as an accountant, and that the compensation and
expense reimbursement referred to above is in exchange for strategic advisory
services, and to reimburse CONSULTANT and is specifically not a brokerage fee,
nor a finder's fee, nor a legal fee, nor an accounting fee. Any lawyers or
accountant or advisors of CONSULTANT, unless specifically engaged in writing
between the Company and such person or firm, is not under contract with the
Company and represents CONSULTANT exclusively. All payments to CONSULTANT are
non-refundable. Company represents that consummation of any transaction
contemplated herein will not conflict with or result in a breach of any of the
terms, provisions or conditions of any written agreement to which it is a party.
This issuance of stock will include all compensation for acquisitions and void
this requirement in the agreement dated June 8, 2002.

VIII- MISCELLANEOUS PROVISIONS

  A.  Gender.  Wherever  the  context  shall  require,  all words  herein in the
 masculine gender shall be deemed to include the feminine or neuter gender,  all
 singular  words  shall  include the plural,  and all plural  shall  include the
 singular.

  B. Severability.  If a court of competent jurisdiction,  the remainder of this
 Agreement,  and the application of such provision in other circumstances hereof
 deem any provision unenforceable shall not be affected thereby.


                                       59

<PAGE>




C. Further Cooperation. From and after the date of this Agreement, each of the
parties hereto agrees to execute whatever additional documentation or
instruments as are necessary to carry out the intent and purposes of this
Agreement or to comply with any law.

D. Waiver. No waiver of any provision of this Agreement shall be valid unless in
writing and signed by the waiving party. The failure of any party at any time to
insist upon strict performance of any condition, promise, agreement or
understanding set forth herein, shall not be construed as a waiver or
relinquishment of any other condition, promise, agreement or understanding set
forth herein or of the right to insist upon strict performance of such waived
condition, promise, agreement or understanding at any other time.

  E. Expenses. Except as otherwise provided herein, each party hereto shall bear
 all expenses  incurred by each such party in connection with this Agreement and
 in the consummation of the transactions  contemplated hereby and in preparation
 thereof.

  F. Amendment.  This Agreement may only be amended or modified at any time, and
 from time to time, in

writing, executed by the parties hereto.

G. Notices. Any notice, communication, request, reply or advice (hereinafter
severally and collectively called ANotice@) in this Agreement provided or
permitted to be given, shall be made or be served by delivering same by
overnight mail or by delivering the same by a hand-delivery service, such Notice
shall be deemed given when so delivered. For all purposes of Notice, the
addresses of the parties herein shall be their addresses unless later advised in
writing.

  H. Captions.  Captions herein are for the convenience of the parties and shall
 not affect the interpretation of this Agreement.

I. Counterpart Execution. 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 and the same instrument and this Agreement may be
executed by fax.

J.  Assignment.  This Agreement is not assignable without the written consent
 of the parties.
    -
K. Parties in Interest. Provisions of this Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties, their heirs,
executors, administrators, other permitted successors and assigns, if any.
Nothing contained in this Agreement, whether express or implied, is intended to
confer any rights or remedies under or by reason of this Agreement on any
persons other than the parties to it and their respective successors and
assigns, nor is anything in this Agreement intended to relieve or discharge the
obligation or liability of any third persons to any party to this Agreement, nor
shall any provision give any third persons any right of subrogation over, or
action against, any party to this Agreement.

                                       60

<PAGE>





  L. Entire  Agreement.  This  Agreement  constitutes  the entire  agreement and
 understanding  of the parties on the subject  matter hereof and  supersedes all
 prior agreements and understandings on the subject hereof.

  M. Construction. The parties agree and acknowledge that each has reviewed this
 Agreement  and  the  normal  rule of  construction  that  agreements  are to be
 construed  against  the  drafting  party  shall  not apply in  respect  of this
 Agreement  given  the  parties  have  mutually   negotiated  and  drafted  this
 Agreement.

  N.  Cooperation.  The parties  hereto agree to  cooperate  with one another in
 respect  of this  Agreement,  includingreviewing  and  executing  any  document
 necessary  for the  performance  of this  Agreement,  to comply  with law or as
 reasonably requested by any party hereto, or legal counsel to any party hereto.

O. Independent Legal Counsel.
CONSULTANT will retain legal counsel and be responsible for handling any legal
issues related to the Companies filings, audits, Public Relations, or legal
actions by anyone regarding vendor services provided by Consultant for the
Company. This will apply to all agreements written in the past by Consultant as
well as the future and includes all of the Companies affiliates or subsidiaries.
P. Choice of Law/Venue. The laws of the State of Nevada shall apply to this
Agreement without reference to conflict of law principles, and the sole venue
for any dispute or suit between the parties shall be a court of competent
jurisdiction in the location of the CONSULTANT in Nevada.

Sincerely yours,


Neptune Communications


__/s/ Flo Ternes___
  --------------
Flo Ternes, President



Agreed (Company):

Gateway Distributors, Inc.


By: _/s/ Rick Bailey_____
     ---------------
      Rick Bailey, President

                                       61

<PAGE>








                                    EXHIBIT A

                               DUE DILIGENCE ITEMS

Please obtain as much of the following as available. Exact copies, not
originals, are requested. Please return a copy of this marked to show what is
attached, and what may not be applicable. Please supply all items to the contact
information at the end of this list.

  WARNING: the fact you may supply an item does not mean we represent or promise
 we will read it in full,  understand  it or  consider  it in the context of any
 project, nor do we undertake to return anything.

  1. Articles of  Incorporation- a copy of the filing with the State,  including
 any amendments.

2. Bylaws- includes any amendments.

3. Agreements- a copy of all current, including amendments, agreements, whether
in the form of a written Agreement, or by Memorandum, Letter of Intents, Letter
Agreements, or otherwise, involving anything and everything relating to the
Company, or any affiliated business, including: -License agreements -Merger or
acquisition agreements Note: if there are any verbal agreements, please provide
a Memorandum explaining it.

4. Business Plan-including any projections-- past or present, latest as
available, and any industry information, like articles, research, etc.

5.   An itemization of the capitalization of the Company detailing:

  6. Subsidiary and Other Affiliated  Entities-an  explanation of any subsidiary
 or affiliated entity, including names and details.


                                       62

<PAGE>




7. Please supply the current corporate addresses and locations for the Company,
including fax numbers and e-mail and Web page addresses. Designate, also, the
main one for our records.

-Please supply any other information that is material to the Company; and
-Please confirm by e-mail when the above was sent including date and time sent
and anticipated delivery, and Federal Express tracking number as applicable.

                                    EXHIBIT B

                                LOCK UP AGREEMENT

THIS AGREEMENT is entered into by and between the Undersigned Company and
Neptune Communications as the Shareholder, effective as of the date below.

RECITALS:

WHEREAS;

  1. The  Company  has or will  issue  shares  of  common  stock in the  Company
 ("Shares") to the Shareholder, which Shares are restricted;

  2. The  Company  is a trading  company  listed on the NASD  Bulletin  Board or
 nationally recognized stock exchange or otherwise;

3. The trading of the Company stock is deemed to provide a generally acceptable
basis, absent special circumstances as discussed below, of valuation of an
ownership interest in the Company, and specifically trading occurs regularly and
not by appointment or in any unusual or sporadic method relative to most stocks
of the forum or exchange on which trading occurs;

4. The parties wish to acknowledge that the Shares do not have the same value as
shares of the trading stock of the Company, given the number of the Shares
reduces the marketability of the stock and therefore reduces the value in that
the Shares cannot be liquidated immediately at the market price reported on the
medium that the common stock of the Company trades on; and

NOW, THEREFORE:

                                       63

<PAGE>




FOR GOOD AND VALUABLE CONSIDERATIONS RECEIVED, AND THE MUTUAL PROMISES HEREIN,
THE PARTIES AGREE AS FOLLOWS:

1. The Company and Shareholder agree that the valuation of the Shares cannot be
done based only on the trading price of the common stock. The valuation is
substantially less than market value. While the sale of one share of stock
acquired by a person from the Company may readily be undertaken at the market
price as reported by the trading medium, the Shareholder acquiring a larger
quantity of stock and attempting to sell on a particular day, may not and
probably would not (depending upon the strength of demand for shares of the
Company stock, a future unknown variable, commonly referred to as volume
indications) be able to dispose of such quantity of the stock at the market
price. Further, any attempt to sell all the Shares or a good portion would
result in a substantial decline of price resulting from an attempt to sell more
shares than the market will bear in a short period of time.

2. Assuming the Shareholder must sell the Shares over time and that the shares
are restricted for one year, more risks are then encountered, and these include:
the Company must remain publicly reporting and current at the time and trading,
and the Shareholder bears the risk of volatility in the trading price.

3. The parties agree that the Shareholder, upon advice of counsel and the
accountant for the Shareholder, shall be permitted to set the valuation of the
Shares, and notify the Company of same, and the Company agrees to abide by such
valuation for all purposes.

5. This Agreement shall be governed exclusively by the laws of the State of
Nevada without reference to conflict of law principles, and the exclusive
jurisdiction for any claim or dispute hereunder or relating hereto shall be a
court of competent jurisdiction in Nevada. This Agreement may be executed in
counterparts and by fax.


Company Name: Gateway

By: ____/s/ Rick Bailey____
        ---------------
       Rick Bailey President




                                       64

<PAGE>



Exhibit 10(x)
                              SETTLEMENT AGREEMENT

THIS SETTLEMENT AGREEMENT is entered into by and between Gateway Distributors
LTD ("GD") and Donald Gary Hansen a Consultant for GD effective as of July 24,
2002. FOR GOOD AND VALUABLE CONSIDERATIONS RECEIVED, AND THE MUTUAL PROMISES
HEREIN, THE PARTIES AGREE AS FOLLOWS:
1. DISPUTE
It is the position of Donald Gary Hansen a Consultant that compensation in the
form of shares of GD were due to the Consultant, as consideration for loans and
being engaged to supply services for or on behalf of GD, over two years prior to
this date. It is the position of the Company that the shares are in complete
settlement of any claim of the Consultant for compensation or money owed by the
Company and in avoidance of further dispute and litigation and relate back to
the services rendered over two years ago.
2. SETTLEMENT
The parties hereby agree that they have settled any and all claims one has
against the other, including any affiliates of a party, such as officers,
Directors, and shareholders, by the execution and performance of this Agreement.
In connection herewith, the parties agree that, on or about this date:
a. GD a total of 1,500,000,000 (2 billion 400
         thousand) shares of common stock of GD and the
         parties agree that these shares effectively should have been issued
prior to July 29, 2000
b. Any and all work product, documents, and
         materials, data, relating to Consultants work in the
         possession or control of Consultant or GD shall be retained by GD;

  c. Consultant  agrees it has no ownership right,  title or claim of any nature
 to GD or to its assets other than as to the shares above.  c.  Consultant  will
 execute  any  reasonable  additional  documents  as  requested  by GD.  d. This
 agreement will also retire promissory notes 0010 in the amount of $20,000, 0012
 in the amount of $50,000, and 0044 in the amount of $25,000.

3. RELEASE
The parties agree to release hereby one another from any and all obligations of
one to the other, except to perform this Agreement.

4.  MISCELLANEOUS PROVISIONS
A. Gender. Wherever the context shall require, all words
------
     herein in the masculine gender shall be deemed to
     include the feminine or neuter gender, all singular words shall include the
     plural, and all plural shall include the singular.
B. Severability. If a court of competent jurisdiction, the
------------
     remainder of this Agreement, and the application of
     such provision in other circumstances hereof deem any provision
     unenforceable shall not be affected thereby.
C. Further Cooperation. From and after the date of this
-------------------
     Agreement, each of the parties hereto agrees to
     execute whatever additional documentation or instruments as are necessary
     to carry out the intent and purposes of this Agreement or to comply with
     any law.
D. Waiver. No waiver of any provision of this Agreement
------
     shall be valid unless in writing and signed by the
     waiving party. The failure of any party at any time to insist upon strict
     performance of any condition, promise, agreement or understanding set forth
     herein, shall not be construed as a waiver or relinquishment of any other
     condition, promise, agreement or understanding set forth herein or of the
     right to insist upon strict performance of such waived condition, promise,
     agreement or understanding at any other time.

                                       65

<PAGE>


E. Expenses. Except as otherwise provided herein, each
--------
party hereto shall bear all expenses incurred by each
     such party in connection with this Agreement and in the consummation of the
     transactions contemplated hereby and in preparation thereof.
F. Amendment. This Agreement may only be amended or
---------
     modified at any time, and from time to time, in
     writing, executed by the parties hereto.
G. Notices. Any notice, communication, request, reply or
-------
     advice (hereinafter severally and collectively called
     "Notice") in this Agreement provided or permitted to be given, shall be
     made or be served by delivering same by overnight mail or by delivering the
     same by a hand-delivery service, such Notice shall be deemed given when so
     delivered.
H. Captions. Captions herein are for the convenience of th
--------
     parties and shall not affect the interpretation of
     this Agreement.
I. Counterpart Execution. This Agreement may be executed i
---------------------
     two or more counterparts, each of which shall
     be deemed an original, but all of which together shall constitute one and
     the same instrument and this Agreement may be executed by fax.
J. Assignment. This Agreement is not assignable without th
----------
     written consent of the parties.
K. Parties in Interest. Provisions of this Agreement shall
-------------------
     be binding upon and inure to the benefit of and be
     enforceable by the parties, their heirs, executors, administrators, other
     permitted successors and assigns, if any. Nothing contained in this
     Agreement, whether express or implied, is intended to confer any rights or
     remedies under or by reason of this Agreement on any persons other than the
     parties to it and their respective successors and assigns.
L. Entire Agreement. This Agreement constitutes the entire
----------------
     agreement and understanding of the parties on
     the subject matter hereof and supersedes all prior agreements
 and understandings.
M. Construction. This Agreement shall be governed by the
------------
     laws of Nevada without reference to conflict of
     laws and the venue for any action, claim or dispute in respect of this
     Agreement shall be such court of competent jurisdiction as is located in
     Nevada. The parties agree and acknowledge that each has reviewed this
     Agreement and the normal rule of construction that agreements are to be
     construed against the drafting party shall not apply in respect of this
     Agreement given the parties have mutually negotiated and drafted this
     Agreement.
N. Cooperation. The parties hereto agree to cooperate with
-----------
     one another in respect of this Agreement,
     including reviewing and executing any document necessary for the
     performance of this Agreement, to comply with law or as reasonably
     requested by any party hereto, or legal counsel to any party hereto.
O. Independent Legal Counsel. The parties hereto agree tha
-------------------------
         (i) each has retained independent legal
         counsel in connection with the preparation and of this Agreement, (ii)
         each has been advised of the importance of retaining legal counsel, and
         (iii) by the execution of this Agreement, each party who has not
         retained independent legal counsel acknowledges having waived such
         right.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date above
written.
The "Company"
Gateway Distributors
A Nevada Corporation

By: /s/ Rick Bailey

Name: Rick Bailey
Title: President / CEO
         The "Consultant"
         Donald Gary Hansen
         By: /s/ Donald Gary Hansen
         Name: Donald Gary Hansen
         Title:    Consultant

                                       66

<PAGE>